SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
The Source Information Management Company
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title to each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
THE SOURCE INFORMATION MANAGEMENT COMPANY
11644 Lilburn Park Road
St. Louis, Missouri 63146
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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To the Shareholders of August 26, 1998
The Source Information Management Company: St. Louis, Missouri
The Annual Meeting of the Shareholders of The Source Information Management
Company will be held on October 6, 1998 at 4:00 p.m. Eastern Daylight Savings
Time at The Sky Club, 200 Park Avenue, New York, New York 10166, for the
following purposes:
1. To elect two class III directors to each serve a three-year term and
until each director's successor has been elected and qualified;
2. To consider and vote upon a proposal to amend the Company's Bylaws to
render inapplicable a Missouri statute which restricts certain business
combinations;
3. To consider and vote upon a proposal to amend the Company's Bylaws to
render inapplicable a Missouri statute which may impair voting rights
of control shares upon transfer;
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on August 17, 1998, will be
entitled to vote at the meeting. A list of all shareholders entitled to vote at
the annual meeting, arranged in alphabetical order and showing the address of
and number of shares held by each shareholder, will be open at the principal
office of The Source Information Management Company, 11644 Lilburn Park Road,
St. Louis, Missouri 63146, during usual business hours, to the examination of
any shareholder for any purpose germane to the annual meeting for 10 days prior
to the date thereof. The list of shareholders will also be available at the
meeting for examination at any time during the meeting.
A copy of the Company's Annual Report for fiscal year 1998 accompanies this
notice.
By Order of the Board of Directors
/s/ Alan G. Johnson
Alan G. Johnson
Secretary
Whether or not you intend to be present at the meeting, please mark, sign, date,
and return the accompanying proxy promptly. A return addressed envelope is
enclosed for your convenience.
The Source Information Management Company
11644 Lilburn Park Road
St. Louis, Missouri 63146
(314) 995-9040
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PROXY STATEMENT
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SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of The Source
Information Management Company, a Missouri corporation (the "Company"), for use
at the Annual Meeting of Shareholders to be held October 6, 1998 at The Sky
Club, 200 Park Avenue, New York, New York 10166, at 4:00 p.m. Eastern Daylight
Savings Time and at any adjournments thereof. Whether or not you expect to
attend the meeting in person, please return your executed proxy in the enclosed
envelope and the shares represented thereby will be voted in accordance with
your wishes. This proxy statement and the accompanying proxy card will be first
mailed to shareholders on or about August 26, 1998. All costs of solicitation of
proxies will be borne by the Company. In addition to solicitations by mail, the
Company's directors, officers and regular employees, without additional
remuneration, may solicit proxies by telephone, telegraph, telecopy and personal
interviews. Brokers, custodians and fiduciaries will be requested to forward
proxy soliciting material to the owners of stock held in their names and the
Company will reimburse them for their out-of-pocket expenses incurred in
connection with the distribution of proxy materials.
REVOCABILITY OF PROXY
If, after sending in your proxy, you decide to vote in person or desire to
revoke your proxy for any other reason, you may do so by notifying the Secretary
of the Company, or the presiding officer at the meeting, in writing of such
revocation at any time prior to the voting of the proxy, by attending the
meeting and voting in person, or by submitting a new proxy bearing a later date.
RECORD DATE
Only shareholders of record at the close of business on August 17, 1998, will be
entitled to vote at the meeting.
ACTION TO BE TAKEN UNDER PROXY
All properly executed proxies received by the Board of Directors pursuant to
this solicitation will be voted by S. Leslie Flegel and William H. Lee, or the
one of them who acts, in accordance with the directions specified in the proxy.
If no such directions have been specified by marking the appropriate squares in
the accompanying proxy card, the shares will be voted as follows:
(1) FOR the election of S. Leslie Flegel and William H. Lee named
herein as nominees for directors of the Company to hold
office for a term of three years expiring in 2001 and until
each director's successor has been duly elected and
qualified;
(2) FOR an amendment of the Bylaws to render inapplicable a
Missouri statute which restricts certain business
combinations;
(3) FOR an amendment of the Bylaws to render inapplicable a
Missouri statute which may impair the voting rights of
control shares upon transfer;
(4) According to their judgment, on the transaction of such other
business as may properly come before the meeting or any
adjournments thereof.
Should the nominee named herein for election as a director become unavailable
for any reason, it is intended that the persons named in the proxy will vote for
the election of such other person in his stead as may be designated by the Board
of Directors. The Board of Directors is not aware of any reason that might cause
the nominee to be unavailable.
VOTING SECURITIES, PRINCIPAL HOLDERS THEREOF
AND CUMULATIVE VOTING RIGHTS
On July 1, 1998, there were 9,562,468 shares of Common Stock, par value $.01 per
share ("Common Stock"), outstanding, which constitute all of the outstanding
voting capital stock of the Company. Each shareholder is entitled to cast one
vote for each share of record on all matters to be voted on by the shareholders,
including the election of directors.
A majority of the outstanding shares, represented in person or by proxy, shall
constitute a quorum at the meeting. Votes that are withheld in the election of
directors, abstentions on all other matters properly brought before the meeting
and the proxies relating to "street name" shares which are not voted by brokers
on one or more, but less than all, matters (so-called "broker non-votes") will
be considered as shares present for purposes of determining a quorum. Under
applicable state law and the Company's Bylaws, an affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting is
required for the election of directors and for approval of all other matters
that may be submitted to a vote of the shareholders at the 1998 Annual Meeting.
Proxies that direct votes be withheld for the election of a director and
abstentions regarding other proposals (including proxies which deny
discretionary authority on any other matters properly brought before the
meeting) will be counted as shares present and entitled to vote and will have
the same effect as a vote against any such matters. Broker non-votes will not be
treated as shares represented at the meeting as to such matter(s) not voted on
and therefore will have no effect.
The following table sets forth as of July 1, 1998, the beneficial ownership of
each current director (including the nominees for election as directors), each
of the executive officers named in the Summary Compensation Table set forth
herein, the executive officers and directors as a group, and each other
shareholder known to the Company to own beneficially more than 5% of the
outstanding Common Stock. Unless otherwise indicated, the Company believes that
the beneficial owners set forth in the table have sole voting and investment
power.
Beneficial Ownership
Name and Address --------------------
of Beneficial Owner Number of Shares Percent
- ------------------- ---------------- -------
S. Leslie Flegel 1,231,722(a) 12.8
11644 Lilburn Park Road
St. Louis, Missouri 63146
William H. Lee 909,146(b) 9.5
711 Gallimore Dairy Road
High Point, North Carolina 27265
Cameron Capital Ltd 571,328(c) 5.8
10 Cavendish Rd
Hamilton HM 19
Bermuda
Timothy A. Braswell 306,509(d) 3.2
711 Gallimore Dairy Road
High Point, North Carolina 27265
Aron Katzman 148,826(d) 1.6
10 Layton Terrace
St. Louis, Missouri 63124
Dwight L. DeGolia 112,450(e) 1.2
11644 Lilburn Park Road
St. Louis, Missouri 63146
John P. Watkins 46,776(f) *
711 Gallimore Dairy Road
High Point, North Carolina 27265
Harry L. Franc, III 36,462(g) *
19 Briarcliff
St. Louis, Missouri 63124
Randall S. Minix 8,485 *
5502 White Blossom Drive
Greensboro, North Carolina 27410
All directors and executive 2,946,145(h) 30.4
officers as a group (11 persons)
- ------------------------
* Less than 1%
(a) Includes exercisable options to acquire 29,752 shares of Common Stock
at an exercise price of $1.66 per share.
(b) Includes exercisable options to acquire 16,364 shares of Common Stock
at an exercise price of $2.66 per share.
(c) Includes exercisable options to acquire 300,000 shares of Common Stock
at an exercise price of $3.00 per share.
(d) Includes exercisable options to acquire 10,045 shares of Common Stock
at an exercise price of $3.00 per share.
(e) Includes exercisable options to acquire 4,364 shares of Common Stock at
an exercise price of $2.42 per share.
(f) Includes exercisable options to acquire 41,322 and 5,454 shares of
Common Stock at an exercise price of $5.60 and $2.42, respectively, per
share.
(g) Includes exercisable options to acquire 2,232 shares of Common Stock at
an exercise price of $3.00 per share.
(h) Includes exercisable options not listed separately above to acquire
8,000 and 4,000 shares of Common Stock at an exercise price of $2.42
and $6.63, respectively, per share.
PROPOSAL 1 - ELECTION OF TWO CLASS III DIRECTORS
INFORMATION ABOUT THE NOMINEES AND DIRECTORS CONTINUING IN OFFICE
The Company's Articles of Incorporation and Bylaws currently provide for three
classes of directors, each class serving for a three-year term expiring one year
after the term of the preceding class, so that the term of one class will expire
each year. The terms of the current Class I and Class II directors expire in
1999 and 2000, respectively. The Board of Directors has nominated S. Leslie
Flegel and William H. Lee, who are currently Class I directors, for re-election
to each serve a three-year term expiring at the annual meeting of shareholders
in 2000. The following table sets forth certain information concerning Mr.
Flegel and Mr. Lee and those directors who are continuing in office.
NOMINEES FOR DIRECTOR - CLASS III
(to be elected to serve a three-year term)
Director
Name Age Position Since
---- --- -------- --------
S. Leslie Flegel 61 Chairman and Chief Executive 1995
Officer of the Company
William H. Lee 47 President and Chief Operating 1995
Officer of the Company
S. Leslie Flegel has been a director, Chairman and Chief Executive Officer of
the Company since its inception in March 1995. For more than 14 years prior
thereto, Mr. Flegel was the principal owner and chief executive officer of
Display Information Systems Company ("DISC"), a predecessor of the Company.
William H. Lee has been a director, President and Chief Operating Officer of the
Company since its inception in March 1995. For approximately 14 years prior
thereto, Mr. Lee was the principal owner and chief executive officer of
Periodical Marketing and Management, Inc. ("PMM"), a predecessor of the Company.
DIRECTORS CONTINUING IN OFFICE - CLASS I
(terms expiring in 1999)
Director
Name Age Position Since
---- --- -------- --------
Aron Katzman 60 President, New Legends, Inc. 1995
Randall Minix 48 Managing Partner, Minix, 1995
Morgan & Company, L.L.P.
Aron Katzman has served as a director of the Company since it commenced
operations in May 1995. For more than five years prior to May 1994, when it was
sold, Mr. Katzman served as the chairman and chief executive officer of Roman
Company, a manufacturer and distributor of fashion custom jewelry. Mr. Katzman
currently serves as a member of the Board of Directors of Phonetel, Inc.
Randall S. Minix has served as a director of the Company since it commenced
operations in May 1995. For more than six years, Mr. Minix has been the managing
partner of Minix, Morgan & Company, L.L.P., an independent accounting firm
headquartered in Greensboro, North Carolina.
DIRECTORS CONTINUING IN OFFICE - CLASS II
(terms expiring in 2000)
Director
Name Age Position Since
---- --- -------- --------
Timothy A. Braswell 69 Consultant to Wholesale
Magazine Industry 1995
Harry L. "Terry" Franc, III 62 Senior Executive Vice-President
of Bridge Information 1995
Systems, Inc. and Vice-President
of Bridge Trading Company
Timothy A. Braswell has been a director of the Company since it commenced
operations in May 1995. He established Braswell Investment Company, a consultant
and broker of wholesale magazine businesses in 1994 and is its owner. For more
than five years prior thereto, Mr. Braswell was the principal owner and chief
executive officer of City News Co. and Dixie News Co., each of which is a
wholesale periodical company.
Harry L. "Terry" Franc, III, has been a director of the Company since it
commenced operations in May 1995. Mr. Franc is one of the founders of Bridge
Information Systems, Inc. ("BIS"), a global provider of information services to
the securities industry and of BIS's subsidiary, Bridge Trading Company ("BTC"),
a registered broker-dealer and member of the New York Stock Exchange. For more
than 20 years, Mr. Franc served as a director and an Executive Vice President of
BIS and an Executive Vice President of BTC.
The Board of Directors of the Company consists of six members, each of whom
serve in such capacity for a three-year term or until a successor has been
elected and qualified, subject to earlier resignation, removal or death. The
number of directors comprising the Board of Directors may be increased or
decreased by resolution adopted by the affirmative vote of a majority of the
Board of Directors. The Company's Articles of Incorporation and Bylaws provide
for three classes of directorships serving staggered three year terms such that
one-third of the directors are elected at each annual meeting of shareholders.
During fiscal 1998, eight meetings of the Board of Directors were held. Except
for Mr. Braswell, each director attended 75 percent or more of the aggregate of
(i) the total number of meetings held during fiscal year 1998 and (ii) the total
number of meetings held during such period by all committees of the Board of
Directors on which he served.
The Board of Directors of the Company has established an Audit Committee and a
Compensation Committee. The Audit Committee is comprised of two non-employee
directors, presently Messrs. Minix and Katzman, and has the responsibility of
recommending the firm that will serve as the Company's independent auditors,
reviewing the scope and results of the audit and services provided by the
Company's independent accountants, and meeting with the financial staff of the
Company to review accounting procedures and policies. During fiscal 1998, the
Audit committee held one meeting. The Compensation Committee is comprised of
three non-employee directors, presently Messrs. Katzman, Braswell and Franc, and
has been given the responsibility of reviewing the financial records of the
Company to determine overall compensation and benefits for executive officers of
the Company and to establish and administer the policies which govern employee
salaries and benefit plans. During fiscal 1998, the Compensation Committee held
two meetings.
The Board of Directors evaluates and nominates qualified nominees for election
or appointment as Directors and qualified persons for selection as Senior
Officers. The Board of Directors will give appropriate consideration to a
written recommendation by a shareholder for the nomination of a qualified person
to serve as a Director of the Company, provided that such recommendation
contains sufficient information regarding the proposed nominee for the Board of
Directors to properly evaluate such nominee's qualifications to serve as
Director.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during its most recent fiscal year and Form 5 and amendments
thereto, or written representations that no Form 5 is required, one person, Mr.
Stephen E. Borjes, failed to timely file Form 3, Initial Statement of beneficial
Ownership of Securities. Four persons, Messrs. Dixon, Katzman, Braswell and
Franc, failed to timely file Form 4, Statement of Changes in Beneficial
Ownership. Six persons, Messrs. S.L. Flegel, Lee, Watkins, DeGolia, Rodgers and
J.S. Flegel, failed to timely file Form 5, Annual Statement of Changes in
Beneficial Ownership.
Director Compensation
Under the Company's present policy, each director of the Company who is not also
an employee of the Company will receive $1,000 payable in Common Stock of the
Company, with the exception of Mr. Minix who will be paid in cash, for each
meeting of the Board of Directors attended. Directors are also entitled to be
reimbursed for expenses incurred by them in attending meetings of the Board of
Directors and its committees.
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the executive
officers of the Company who are not also directors of the Company:
Name Age Position
John P. Watkins 43 Chief Administrative Officer
Dwight L. DeGolia 53 Executive Vice President
W. Brian Rodgers 33 Assistant Secretary and Chief Financial Officer
Jason S. Flegel 32 Senior Vice President of RDA Operations
Stephen E. Borjes 49 President - Front-End Merchandising Group
John P. Watkins has served as President - Retail Service Group and Chief
Administrative Officer since February 1, 1996. For more than 16 year prior
thereto, Mr. Watkins served in several senior management positions with Food
Lion, Inc., a seven billion dollar retail grocery chain. From September, 1992 to
July 1995, Mr. Watkins served as Senior Vice President and Chief Operating
Officer and a member of the Board of Directors of Food Lion, Inc.
Dwight L. DeGolia has served as Executive Vice President of the Company since
its commencement of operations in May 1995. For more than ten years prior
thereto, Mr. DeGolia served as Executive Vice President of Sales and Marketing
for DISC. From 1986 to 1993, Mr. DeGolia also served as a director of Advanced
Marketing Services, a leading supplier of books to wholesale clubs.
W. Brian Rodgers has served as Assistant Secretary of the Company and Chief
Financial Officer since October 1996. Prior to joining the Company, Mr. Rodgers
practiced for seven years as a certified public accountant with BDO Seidman,
LLP.
Jason S. Flegel has served as Senior Vice President of RDA Operations since June
1996. Prior thereto, and since the Company's inception in March 1995, Mr. Flegel
served as Vice President - Western Region. For more than two years prior
thereto, Mr. Flegel was an owner and the Chief Financial Officer of DISC. Jason
S. Flegel is the son of S.
Leslie Flegel.
Stephen E. Borjes has served as President of Front-End Merchandising Group since
September, 1997. For more than 20 years, Mr. Borjes held several positions with
Dixie News Co. ("Dixie News") and the News Group, which purchased Dixie News in
1994. His latest position at News Group was Vice President of Operations for the
distribution centers in Charlotte and Winston-Salem, North Carolina, and
Johnston City, Tennessee.
Certain Relationships and Related Transactions
From time to time, the Company and its predecessors have engaged in various
transactions with its directors, executive officers and other affiliated
parties. The following paragraphs summarize certain information concerning such
transactions and relationships which have occurred during the past two fiscal
years or which are presently proposed.
Predecessor Transactions
S. Leslie Flegel, Chairman and Chief Executive Officer of the Company and Dwight
L. DeGolia, Executive Vice President of the Company, have from time to time
received cash advances from the Company and DISC, a subchapter S predecessor of
the Company. The largest aggregate amount of such indebtedness outstanding at
any time since February 1, 1997 was $270,675 and $22,093, respectively. In
October, 1997, Mr. Flegel repaid in full all indebtedness due by him to the
Company. As a result, at January 31, 1998, such outstanding balances were $-0-
and $22,093, respectively. All advances to Mr. DeGolia are evidenced by
promissory notes in favor of the Company. Such notes bear interest at rates
varying from 6.96% to 7.34% per annum and mature from 2001 to 2003.
On June 28, 1991, PMM entered into a written lease with 711 Gallimore
Partnership in which Mr. William H. Lee, President and Chief Operating Officer
of the Company, is a partner, whereby 711 Gallimore Partnership leases to the
Company certain office space in High Point, North Carolina. The lease, as
amended in May of 1998, provides for annual rent of approximately $240,000 and
expires in 2012. In fiscal 1998 and 1997, the Company paid 711 Gallimore
Partnership $174,888 and $157,498, respectively, in rent.
Company Transactions
Data-Pros, Inc. ("Data-Pros"), a corporation in which Mr. Lee is a shareholder,
provided the Company with data processing services. In fiscal 1997, the Company
paid Data-Pros $274,893, respectively, for such services. On January 1, 1997 the
Company purchased the assets of Data-Pros for $45,000.
2532 Partnership, a North Carolina partnership in which Mr. Lee is a partner,
has occasionally provided the Company with the use of an airplane. In fiscal
1998, the Company paid 2532 Partnership $11,692 in consideration for the use of
the airplane.
In July 1997, the holders of the Company's 1996 Series 7% Convertible Preferred
Stock exchanged all 5,600 outstanding shares for 186,667 shares of Common Stock
at an effective exchange price of $3.00 per share and non-transferable warrants,
expiring in 2000, to purchase 310,709 shares of Common Stock at an exercise
price of $3.00 per share.
In September 1997, the Company issued to Messrs. Katzman, Franc and Braswell,
non-transferable warrants, expiring in 2000, to purchase an aggregate of 89,289
shares of Common Stock at an exercise price of $3.00 per share. Such warrants
will vest at a rate of 25% on August 1, 1998, 25% on November 1, 1998, 25% on
February 1, 1999 and 25% on May 1, 1999.
Executive Compensation
The following table summarizes information concerning cash and non-cash
compensation paid to or accrued for the benefit of the named executive officers
for all services rendered in all capacities to the Company and its predecessors
in fiscal years 1996, 1997 and 1998.
SUMMARY COMPENSATION TABLE
Name of Principal Annual Compensation Other Annual
Position Year Salary Bonus Compensation(a)
- ----------------- ---- ------ ----- ---------------
S. Leslie Flegel 1998 $255,000 $96,300 $25,643
Chairman and Chief Executive 1997 $227,500 $176,398 $30,624
Officer 1996 $200,000 $26,543 $30,995
William H. Lee 1998 $245,494 $70,382 $12,629
President and Chief Operating 1997 $224,830 $30,000 $13,944
Officer 1996 $192,646 --- $19,006
Dwight L. DeGolia 1998 $150,000 $29,200 $10,777
Executive Vice President 1997 $140,000 $4,773 $11,223
1996 $134,884 --- $16,739
John P. Watkins 1998 $150,000 $25,000 $9,986
Chief Administration Officer 1997 $150,000 --- $11,891
1996 --- --- ---
Robert B. Dixon (b) 1998 $150,000 $5,500 $12,797
Executive Vice President and 1997 $150,000 --- $13,907
President - Periodical 1996 $114,000 $50,000 $5,458
Information Management
- ------------------------
(a) Reflects personal benefits derived by Messrs. Flegel, Lee, DeGolia, Watkins
and Dixon primarily in connection with personal use of Company automobiles,
country club membership dues and life insurance premiums. In fiscal 1998, the
estimated incremental cost to the Company of the use by Messrs. Flegel, Lee,
DeGolia, Watkins and Dixon of Company automobiles was $9,566, $8,523, $6,312,
$7,800 and $8,597, respectively. In fiscal 1997, such cost was $10,339, $8,650,
$6,090, $7,800 and $8,597, respectively. In fiscal 1996, such cost was $11,444,
$6,234, $6,360, $0 and $3,158, respectively.
In fiscal 1998, the estimated incremental cost to the Company of the
membership dues paid on behalf of Messrs. Flegel, Lee, DeGolia, Watkins and
Dixon was $6,984, $1,050, $4,465, $1,425 and $4,200, respectively. In fiscal
1997, such cost was $11,192, $2,239, $5,133, $3,330 and $5,310, respectively. In
fiscal 1996, such cost was $11,503, $4,738, $4,751, $0 and $2,300, respectively.
In fiscal 1998, the estimated incremental cost to the Company of life
insurance premiums paid on behalf of Messrs. Flegel, Lee, DeGolia, Watkins and
Dixon was $9,093, $3,056, $0, $761 and $0, respectively. In fiscal 1997, such
cost was $9,093, $3,056, $0, $761 and $0, respectively. In fiscal 1996, such
cost was $8,048, $8,033, $5,628, $0 and $0, respectively.
(b) Regrettably, Mr. Dixon died on February 26, 1998.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
Number of % of Total
Securities Options/SAR
Underlying Granted to Exercise or
Options/SARS Employees in Base Price Expiration
Name Granted # Fiscal Year ($/Sh) Date
---- ------------ ------------ ----------- ----------
S. Leslie Flegel 89,256 (1) 27% $1.66 5-14-02
William H. Lee 49,091 (2) 15% $2.66 6-24-02
Dwight L. DeGolia 10,909 (3) 3% $2.42 6-24-07
John P. Watkins 13,636 (3) 4% $2.42 6-24-07
74,380 (4) 23% $5.60 2-01-01
Robert B. Dixon 0 0% N/A N/A
- ------------------
(1) Options were granted May 15, 1997 and are exercisable as follows: 29,752 on
or after May 15, 1998, 29,752 on or after May 15, 1999 and 29, 752 on or after
May 15, 2000.
(2) Options were granted June 25, 1997 and are exercisable as follows: 16,364 on
or after June 25, 1998, 16,364 on or after June 25, 1999 and 16,363 on or after
June 25, 2000.
(3) Options were granted June 25, 1997 and are exercisable 20% a year,
cumulatively, for a period of five years.
(4) Options were granted June 25, 1997 and are exercisable as follows: 24,793
immediately, 16,529 on or after February 1, 1998, 16,529 on or after February 1,
1999 and 16,529 on or after February 1, 2000.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FYE OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the Money
Option/SARs at Options/SARs at
Shares Fiscal Year End Fiscal Year End
Acquired on Value (#) Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ---------------- ---------------
S. Leslie Flegel 0 0 0/89,256 0/309,272
William H. Lee 0 0 0/49,091 0/121,009
Dwight L. DeGolia 0 0 2,182/8,727 5,902/23,607
John P. Watkins 0 0 27,520/60,496 7,377/29,509
Robert B. Dixon 0 0 0/0 0/0
PROPOSAL 2 - AMENDMENT OF THE COMPANY'S BYLAWS TO RENDER INAPPLICABLE A MISSOURI
STATUTE WHICH RESTRICTS CERTAIN BUSINESS COMBINATIONS
The Board of Directors proposes and recommends that the shareholders authorize
an amendment of the Company's Bylaws to render inapplicable a certain Missouri
statute which restricts certain business combinations (the "Business Combination
Statute").
The Business Combination Statute, Section 351.459 of The General and Business
Corporation Law of Missouri (the "MGBCL"), provides that, under certain
circumstances, a business combination between a corporation and any shareholder
of such corporation which possesses control of 20% or more of the outstanding
voting stock of such corporation (an "interested shareholder") may be prohibited
unless certain steps are taken to approve the business combination, including
obtaining approval of the corporation's board of directors. All resident
domestic corporations are subject to the provisions of the Business Combination
Statute unless the corporation expressly elects not to be governed by such
statute.
The Board of Directors has adopted a resolution which, if approved by the
shareholders of the Company, would amend the Company's Bylaws, as set forth in
Exhibit A hereto, to exempt the Company from the provisions of the Business
Combination Statute. The purported purpose of the Business Combination Statute
is to protect the remaining shareholders against actions an interested
shareholder may induce the corporation to engage in, however, such statute may
(i) delay, defer or prevent a change in control of the Company; and/or (ii)
diminish the opportunity for shareholders to receive a premium above the market
price for their shares from a potential acquirer who is unfriendly to the
Company's management. If the resolution is adopted the Business Combination
Statute specifies that the amendment shall not become effective for a period of
18 months from the date of such amendment.
PROPOSAL 3 - AMENDMENT TO THE COMPANY BYLAWS TO RENDER INAPPLICABLE A MISSOURI
STATUTE WHICH MAY IMPAIR THE VOTING RIGHTS OF CONTROL SHARES UPON TRANSFER
The Board of Directors proposes and recommends that the shareholders authorize
an amendment of the Company's Bylaws to render inapplicable a certain Missouri
statute which may impair the voting rights of control shares upon transfer of
such shares (the "Control Share Acquisition Statute").
The Control Share Acquisition Statute, Section 351.407 of the MGBCL, generally
provides that, except in certain circumstances, if a shareholder acquires 20% or
more of the voting stock the shareholder will not have voting rights regarding
such shares unless (i) the shareholder satisfies certain disclosure
requirements; and (ii) the acquisition of the shares is approved by both (a) a
majority of the outstanding voting stock, and (b) a majority of the outstanding
voting stock, excluding shares held by officers and employee directors of the
corporation. All corporations incorporated under the MGBCL are subject to the
provisions of the Control Share Acquisition Statute unless the corporation
expressly elects not to be governed by the Control Share Acquisition Statute.
The Board of Directors has adopted a resolution which, if approved by the
shareholders of the Company, would amend the Company's Bylaws, as set forth in
Exhibit B hereto, to exempt the Company from the provisions of the Control Share
Acquisition Statute. The legislative purpose of the Control Share Acquisition
Statute is to provide shareholders with an opportunity to vote on a proposed
acquisition of control of the corporation, however, in certain situations such
statute could (i) delay, defer or prevent a change in control of the Company;
and/or (ii) diminish the opportunity for shareholders to receive a premium above
the market price for their shares from a potential acquirer who is unfriendly to
the Company's management.
OTHER BUSINESS
Management does not know of any other matters which may come before the Meeting.
However, if any other matters are properly presented to the Meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
act, in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 Annual Meeting of
Shareholders must be received by the Company by April 28, 1999 for inclusion in
the Company's proxy statement and proxy relating to that meeting. Upon receipt
of any such proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with regulations
governing the solicitation of proxies.
In order for a Shareholder to bring other business before a Shareholder meeting,
timely notice must be given to the Company within by the time limits set forth
above. Such notice must include a description of the proposed business, the
reasons therefor and other matters specified in the Company's Bylaws. The Board
or the presiding officer at the Annual Meeting may reject any such proposals
that are not made in accordance with these procedures or that are not a proper
subject for Shareholder action in accordance with applicable law. These
requirements are separate from to the procedural requirements a Shareholder must
meet to have a proposal included in the Company's proxy statement.
In each case the notice must be provided to the Company at its principal office
in St. Louis, Missouri. Shareholder desiring a copy of the Company's Bylaws will
be furnished a copy without charge upon the submission of a written request to
the Company.
If the date of the 1999 Annual Meeting of Shareholders is advanced or delayed by
more than 30 calendar days from the date of the 1998 Annual Meeting of
Shareholders the Company will make a timely disclosure of such date change and
the impact of such date change on the submission deadlines set forth above in
its first quarterly report on Form 10-QSB following such date change, or, if
impracticable any means reasonably calculated to inform shareholders.
RELATIONSHIP WITH THE INDEPENDENT ACCOUNTANTS
BDO Seidman, LLP ("BDO Seidman") served as the independent public accountant for
the Company in fiscal 1998. The Company's independent public accountant for
fiscal 1999 will be selected by the Board at a regular Board meeting to be held
in fiscal 1999. Representatives of BDO Seidman will be present at the annual
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
By Order of the Board of Directors
/s/ Alan G. Johnson
Alan G. Johnson, Secretary
THE BOARD OF DIRECTORS HOPES THAT YOU WILL ATTEND THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
THE ACCOMPANYING ENVELOPE PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR
STOCK PERSONALLY BY DELIVERING A WRITTEN REVOCATION OF YOUR PROXY TO THE
SECRETARY OF THE COMPANY.
EXHIBIT A
Proposed Amendment to add Article X to Company's
Bylaws to render inapplicable a Missouri statute which
restricts certain business combinations
RESOLVED, that Article X be added to the Company's Bylaws as follows:
Section 1. The Corporation expressly elects not to be governed by
Section 351.459 of the General and Business Corporation Law of Missouri pursuant
to subsection 4(3) thereof.
EXHIBIT B
Proposed Amendment to add Article XI to Company's
Bylaws to render inapplicable a Missouri statute which
may impair the voting rights of control shares upon transfer
RESOLVED, that Article XI be added to the Company's Bylaws as follows:
Section 1. The Corporation expressly elects not to be governed by
Section 351.407 of the General and Business Corporation Law of Missouri pursuant
to subsection 1 thereof.
THE SOURCE INFORMATION MANAGEMENT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS,
OCTOBER 6, 1998 AT 4:00 P.M.
The undersigned stockholder of The Source Information Management
Company (the "Company") hereby appoints S. Leslie Flegel and William H. Lee and
each of them as attorneys and proxies, each with power of substitution and
revocation, to represent the undersigned at the Annual Meeting of Stockholders
of the Company to be held at The Sky Club, 200 Park Avenue, New York, New York
10166 on October 6, 1998 at 4:00 P.M. Eastern Time, and at any adjournment or
postponement thereof, with authority to vote all shares held or owned by the
undersigned in accordance with the directions indicated herein.
Receipt of the Notice of Annual Meeting of Stockholders dated August
26, 1998, the Proxy Statement furnished herewith, and a copy of the Annual
Report on Form 10-KSB for the year ended January 31, 1998 is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION OF VOTE IS MADE, THIS PROXY WILL
BE VOTED FOR ITEMS 1, 2 AND 3 AND PURSUANT TO ITEM 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3
Item 1. Election of S. Leslie Flegel and William H. Lee as Class III Directors
for a term of three years expiring in 2001 and until each director's successor
has been duly elected and qualified.
S. Leslie Flegel
|_| FOR |_| AGAINST |_| WITHHOLD
William H. Lee
|_| FOR |_| AGAINST |_| WITHHOLD
Item 2. An amendment to the Company's Bylaws to render inapplicable a Missouri
statute which restricts certain business combinations.
|_| FOR |_| AGAINST |_| WITHHOLD
Item 3. An amendment to the Company's Bylaws to render inapplicable a Missouri
statute which may impair the voting rights of control shares upon transfer.
|_| FOR |_| AGAINST |_| WITHHOLD
Item 4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
Dated: ______________, 1998 __________________________________________
(Signature)
------------------------------------------
(Signature if held jointly)
The signature should agree with the name
on your stock certificate. If acting as
attorney, executor, administrator,
trustee, guardian, etc., you should so
indicate when signing. If the signer is a
corporation, please sign the full
corporate name by duly authorized officer.
If shares are held jointly, each
shareholder should sign.