THE NATIONAL REGISTRY INC.
2502 ROCKY POINT DRIVE
TAMPA, FLORIDA 33607

April 10, 1998

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
The National Registry Inc. (the "Company"), to be held at 10:00 a.m., local
time, on Tuesday, May 12, 1998, at the Tampa Bay Convention Center, 333 South
Franklin Street, Meeting Room 4, Tampa, Florida 33602.

Business scheduled to be considered at the meeting includes (a) the
election of eight directors, (b) the consideration of a proposed amendment to
the Company's Certificate of Incorporation (the "Certificate") to effect a
reverse stock split of the Company's common stock, $.01 par value per share
(the "Common Stock"), such that every six (6) shares of Common Stock
outstanding on the effective date of such reverse stock split would be
converted into one (1) share of Common Stock (the "Reverse Split"), (c) the
consideration of a proposed amendment to the Certificate to decrease, subject
to the approval of the Reverse Split, the number of authorized shares of Common
Stock from the present amount of 75,000,000 shares to 25,000,000 shares, (d)
the consideration of a proposed amendment to the Company's 1992 Stock Incentive
Plan (the "Plan") to increase the number of shares of Common Stock authorized
for issuance under the Plan from 4,700,000 shares to 15,000,000 shares
(2,500,000 shares if the Reverse Split is implemented) and (e) the ratification
of the appointment of Ernst & Young LLP as independent auditors for the Company
for its fiscal year ending December 31, 1988. Additional information concerning
these matters is included in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement.

The Board of Directors of the Company recommends that you vote "FOR" the
election of the eight nominees of the Board of Directors as directors, "FOR"
the Reverse Stock Split, "FOR" the amendment of the Certificate to decrease the
number of authorized shares of Common Stock from the present amount of
75,000,000 shares to 25,000,000 shares, "FOR" the amendment to the Plan to
increase the number of shares of the Common Stock authorized for issuance under
the Plan and "FOR" ratification of the appointment of Ernst & Young LLP as
independent auditors of the Company for its fiscal year ending December 31,
1998. The accompanying Proxy Statement provides further information concerning
the matters to be voted on at the Annual Meeting. Also enclosed is the
Company's 1997 Annual Report on Form 10-K which contains information concerning
the Company's 1997 fiscal year.

Please complete, sign and return the enclosed proxy card as soon as
possible. The Company's Board of Directors urges that all stockholders exercise
their right to vote at the meeting personally or by proxy.

Sincerely,

/s/ JEFFREY P. ANTHONY
-----------------------------
Jeffrey P. Anthony
CHAIRMAN OF THE BOARD

THE NATIONAL REGISTRY INC.
2502 ROCKY POINT DRIVE
TAMPA, FLORIDA 33607

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998

----------------
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of The National Registry Inc., a Delaware corporation (the
"Company"), will be held at 10:00 a.m., local time, on Tuesday, May 12, 1998,
at the Tampa Bay Convention Center, 333 South Franklin Street, Meeting Room 4,
Tampa, Florida 33602 for the following purposes:

1. To elect eight directors to serve for a term of one-year or until
their successors have been duly elected and qualified;

2. To approve the proposed amendment to the Company's Certificate of
Incorporation (the "Certificate") to effect a reverse stock split of the
common stock, $.01 par value per share (the "Common Stock"), such that
every six (6) shares of Common Stock outstanding on the effective date of
such reverse stock split would be converted into one (1) share of Common
Stock (the "Reverse Split");

3. To approve the proposed amendment to the Certificate to decrease,
subject to the approval of the Reverse Split, the number of authorized
shares of the Common Stock from the present amount of 75,000,000 shares to
25,000,000 shares;

4. To approve the proposed amendment to the Company's 1992 Stock
Incentive Plan (the "Plan") to increase the number of shares of Common
Stock authorized for issuance under the Plan from 4,700,000 to 15,000,000
(2,500,000 if the Reverse Split is implemented); and

5. To ratify the appointment by the Board of Directors of Ernst & Young
LLP as the Company's independent auditors for its fiscal year ending
December 31, 1998.

6. To transact such other business as may properly come before the Annual
Meeting and any and all adjournments thereof.

Pursuant to the Company's Bylaws, the Board of Directors has fixed the
close of business on April 9, 1998 as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting. Only
holders of record of the Common Stock at the close of business on that date
will be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.

Stockholders are urged to attend the meeting in person. If you are not
able to do so, please sign, date and return the accompanying proxy in the
enclosed envelope. No postage is required if mailed in the United States.
By Order of the Board of Directors

/s/ DAVID E. BROGAN
-------------------------------------
David E. Brogan
CHIEF FINANCIAL OFFICER AND SECRETARY
TAMPA, FLORIDA
APRIL 10, 1998

THE NATIONAL REGISTRY INC.
2502 ROCKY POINT DRIVE
TAMPA, FLORIDA 33607

----------------
PROXY STATEMENT

----------------
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 12, 1998

SOLICITATION AND VOTING

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of The National Registry Inc.,
a Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company (the "Stockholders") to be held at 10:00 a.m.,
local time, on Tuesday, May 12, 1998, at the Tampa Bay Convention Center, 333
South Franklin Street, Meeting Room 4, Tampa, Florida 33602 and at any
adjournments thereof (the "Annual Meeting"). Only holders of record of the
Company's common stock, $.01 par value per share (the "Common Stock"), at the
close of business on April 9, 1998 (the "Record Date") are entitled to receive
notice of, and to vote at, the Annual Meeting. At the close of business on the
Record Date, 38,924,124 shares of Common Stock were issued and outstanding. The
presence in person or by proxy of the holders of a majority of the votes
entitled to be cast by the outstanding shares of Common Stock shall constitute
a quorum for matters to be voted on at such Annual Meeting. Shares represented
by proxies that are marked "abstain" will be counted as shares present for
purposes of determining the presence of a quorum on all matters. Proxies
relating to "street name" shares that are voted by brokers on some but not all
of the matters will be treated as shares present for purposes of determining
the presence of a quorum on all matters, but will not be treated as shares
entitled to vote at the Annual Meeting on those matters as to which authority
to vote is withheld by such broker ("broker non-votes"). In the event that
there are not sufficient votes present either in person or by proxy to
constitute a quorum at the time of the Annual Meeting, the Annual Meeting may
be adjourned in order to permit the solicitation of proxies.

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, including certified financial statements, has either
preceded or is now enclosed with, this Proxy Statement. This Proxy Statement
and the accompanying proxy card are being mailed to the Stockholders on or
about April 10, 1998.

The Common Stock was the only voting security of the Company outstanding
and entitled to vote at the Annual Meeting on the Record Date. Holders of
Common Stock are entitled to one vote per share on each matter to be voted upon
at the Annual Meeting. The Company's Bylaws provide that a plurality of the
votes present in person or represented by proxy at the Annual Meeting entitled
to vote on the election of directors shall be sufficient to elect directors
(Proposal 1). Accordingly, abstentions and broker non-votes will not affect the
outcome on Proposal 1 provided that a quorum is present. The vote required for
approval of Proposal 2 (an amendment to the Company's Certificate of
Incorporation (the "Certificate") to effect a reverse stock split of the Common
Stock (the "Reverse Split") such that every six (6) shares of Common Stock
outstanding on the effective date of such reverse stock split would be
converted into one (1) share of Common Stock) and Proposal 3 (an amendment to
the Certificate to decrease, subject to the approval of the Reverse Split, the
number of authorized shares of Common Stock (the "Authorized Shares Decrease")
from the present amount of 75,000,000 shares to 25,000,000 shares) shall be a
majority of all of the issued and outstanding shares of Common Stock. On
Proposals 2 and 3, abstentions and broker non-votes will have the same effect
as a negative vote. The vote required for approval of Proposal 4 (an amendment
the "Plan Amendment" to the Company's 1992 Stock Incentive Plan (the "Plan") to
increase the number of shares of Common Stock authorized

for issuance thereunder from 4,700,000 shares to 15,000,000 shares (2,500,000
shares if the Reverse Split is implemented) (the "Plan Amendment")) and
Proposal 5 (ratification of the appointment of Ernst & Young LLP as the
Company's independent auditors for its fiscal year ending December 31, 1998)
shall be a majority of shares present in person or represented by proxy at the
Annual Meeting. On such matters, an abstention will have the same effect as a
negative vote but, because shares held by brokers will not be considered
entitled to vote on matters as to which the brokers withhold authority, a
broker non-vote will have no effect on the vote. The vote of shares of Common
Stock will be counted by representatives of the Company's stock transfer agent,
U.S. Stock Transfer Corporation, or another inspector of elections appointed by
the Company.

Shares of Common Stock represented by properly executed proxy cards
received by the Company at or prior to the Annual Meeting will be voted
according to the instructions indicated on such proxy cards. Unless contrary
instructions are given, the persons named on the proxy card intend to vote the
shares so represented, "FOR" the election of the eight nominees for director
named in this Proxy Statement, "FOR" the Reverse Split, "FOR" the Authorized
Shares Decrease, "FOR" the Plan Amendment and "FOR" the ratification of the
appointment of Ernst & Young LLP as the Company's independent auditors for its
fiscal year ending December 31, 1998. As to any other business which may
properly come before the Annual Meeting, the persons named on the proxy card
will vote according to their sole discretion.

Any Stockholder has the power to revoke his, her or its proxy at any time
before it is voted at the Annual Meeting by delivering a written notice of
revocation to the Secretary of the Company, by a duly executed proxy bearing a
later date or by voting by ballot at the Annual Meeting.

The cost of preparing, assembling and mailing this proxy soliciting
material and Notice of Annual Meeting will be paid by the Company. Additional
solicitation by mail, telephone, telegraph or by personal solicitation may be
done by directors, officers and regular employees of the Company, for which
they will receive no additional compensation. Brokerage houses and other
nominees, fiduciaries and custodians nominally holding shares of Common Stock
as of the Record Date will be requested to forward proxy soliciting material to
the beneficial owners of such shares, and will be reimbursed by the Company for
their reasonable expenses.

Dissenters' rights of appraisal will not be available under Delaware law
with respect to any of the proposals being submitted by the Board to the
Stockholders at the Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the Record Date by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
Common Stock; (ii) each of the Company's directors; (iii) each person nominated
to serve as a director of the Company; (iv) each of the Named Executive
Officers (as hereinafter defined); and (v) all executive officers and directors
of the Company as a group:

AMOUNTS AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------- ------------------------ -------------------------

Clearwater Fund IV, L.L.C. .......... 9,894,867(1) 20.3
611 Druid Road E. #200
Clearwater, FL 34616
Home Shopping Network, Inc. ......... 6,336,154(2) 14.0
P.O. Box 9090
Clearwater, FL 34618
J. Anthony Forstmann ................ 6,307,500(3)(4) 16.0
7 Beverly Park
Beverly Hills, CA 90210
RMS Limited Partnership ............. 4,000,000 10.3
201 West Liberty Street
P.O. Box 281
Reno, NV 89504
Francis R. Santangelo ............... 800,000(4) 2.0
Frank M. Devine ..................... 293,500(4) (5)
John L. Gustafson ................... 256,667(4) (5)
Jeffrey P. Anthony .................. 95,000(4) (5)
Donald C. Klosterman ................ -0-(4) (5)
Don M. Lyle ......................... -0-(4) (5)
Robert J. Rosenblatt ................ -0- (5)
Clinton C. Fuller ................... 46,667(4) (5)
David E. Brogan ..................... 18,333(4) (5)
Executive officers and directors
as a group (10 persons) ........... 7,817,667(3)(4) 13.4(3)(4)(5)
<FN>
- ----------------
(1) Includes 9,894,867 shares of Common Stock issuable upon conversion of
250,000 currently convertible shares of Series C Preferred Stock, based
upon the conversion rates which would have been in effect as of March 31,
1998.
(2) Includes 6,336,154 shares of Common Stock issuable upon conversion of
100,000 currently convertible shares of Series A Preferred Stock.
(3) Of such amount, 3,500,000 shares of Common Stock are pledged in favor of
Theodore J. Forstmann, Mr. Forstmann's brother, to secure a demand note,
and 1,500,000 shares of Common Stock are pledged in favor of a financial
institution to secure a non-recourse credit facility, which demand note is
past due. Includes 557,500 shares of Common Stock subject to outstanding
options which are vested and exercisable. Includes 750,000 shares of
Common Stock directly held by Mr. Forstmann's spouse, Catherine S.
Forstmann.
(4) Includes shares of Common Stock that can be acquired by exercise of vested
and exercisable stock options within 60 days of April 9, 1998, as follows:
Mr. Forstmann -- 557,500 shares; Mr. Santangelo -- 800,000 shares; Mr.
Devine -- 200,000 shares; Mr. Gustafson -- 256,667 shares; Mr. Anthony --
95,000 shares; Mr. Klosterman -- -0- shares; Mr. Lyle -- -0- shares; Mr.
Fuller -- 46,667 shares; Mr. Brogan -- 18,333 shares. Excludes 700,000,
290,000, 443,333, 305,000, 200,000, 200,000, 153,333, and 136,667 shares
issuable upon exercise of outstanding options which either have not vested
or are not exercisable and which will not vest or which may not be
exercisable within 60 days of April 9, 1998 in favor of Messrs.
Santangelo, Devine, Gustafson, Anthony, Klosterman, Lyle, Fuller, and
Brogan, respectively.
(5) Less than 1%.
</FN>

PROPOSAL 1. ELECTION OF DIRECTORS

Eight directors are to be elected at the Annual Meeting to hold office for
a term of one year or until their successors have been duly elected and
qualified. Proxies will be voted for election of each of the eight directors
named below, unless otherwise directed.

Election of directors will require the affirmative vote of the holders of
a plurality of the votes of shares of Common Stock present in person or
represented by Proxy and entitled to vote on the election of directors at the
Annual Meeting. Although the Board anticipates that all of the nominees will be
available to serve as directors of the Company, should any one or more of them
not accept the nomination, or otherwise be unwilling or unable to serve, it is
intended that the proxies will be voted for the election of a substitute
nominee or nominees designated by the Board.

The Board has nominated the persons named below for election as directors
at the Annual Meeting. All nominees are currently directors of the Company.

TERM DIRECTOR
NAME AGE POSITION EXPIRES SINCE
- ---------------------------------- ----- ---------------------------- --------- ---------

Jeffrey P. Anthony ............... 39 Chairman and Director 1998 1998
John L. Gustafson ................ 54 President, Chief Executive 1998 1995
Officer and Director
Frank M. Devine(1)(2). ........... 55 Director 1998 1997
J. Anthony Forstmann ............. 60 Director 1998 1991
Donald C. Klosterman(1) .......... 66 Director 1998 1997
Don M. Lyle(2) ................... 58 Director 1998 1997
Robert J. Rosenblatt(2) .......... 40 Director 1998 1998
Francis R. Santangelo(1) ......... 65 Director 1998 1997

- ----------------
(1) Compensation Committee
(2) Audit Committee member.

INFORMATION REGARDING NOMINEES

JEFFREY P. ANTHONY has been Chairman of the Board since March 1998 and a
director of the Company since February 1998. Mr. Anthony had been the Director
of Business Development for the Company since March 1995 and a Senior Vice
President from February 1992 to March 1995. From April 1987 to February 1992,
Mr. Anthony was Managing Director of Shinnecock Capital Corporation, a venture
capital firm he co-founded. From October 1983 to April 1987, Mr. Anthony was
Assistant to the Chairman and a director of Spear Financial Services Inc., a
publicly owned brokerage firm that provided computer accessible financial
services including online trading and specialist operations on the floor of the
Pacific Coast Stock Exchange. Mr. Anthony received his BA in Anthropology from
Vassar College.

JOHN L. GUSTAFSON has served as President, Chief Operating Officer and a
director of the Company since March 1995, Chief Executive Officer since
December 1995 and a member of each of the Board's Compensation Committee (the
"Compensation Committee") and a member of the Board's Audit Committee (the
"Audit Committee") from December 1995 to June 1997. From November 1993 to March
1995, Mr. Gustafson served as Vice President for Business Development of Allied
Technical Services, a wholly-owned subsidiary of Allied Signal Inc. From 1968
to November 1993, Mr. Gustafson held a variety of senior executive positions at
Unisys Corp. ("Unisys") and at Burroughs Corporation, its predecessor company.
Mr. Gustafson received his BS in Math from St. Louis University and his MS in
Computer Science from the University of Missouri-Rolla.

FRANK M. DEVINE has served as a director of the Company and as a member of
the Compensation Committee since June 1997 and the Audit Committee since
September 1997. Mr. Devine also serves as a business consultant for various
entities. He has founded or co-founded Bachmann-Devine, Inc., a venture capital
firm, and Shapiro, Devine & Craparo, Inc., a hard goods manufacturers agency
serving the retail industry, where he has also served as President since 1978.
Since December 1994, Mr. Devine has served as a member of the Board of
Directors of Salton Maxim Housewares Inc., a publicly owned company that
markets and sells electrical appliances and decorative accessories to the
retail trade under various brand names. Mr. Devine received a BS in Mathematics
from Iowa State University.

J. ANTHONY FORSTMANN served as a director of the Company since October
1991. Mr. Forstmann was the Chairman of the Board from June 1995 to March 1998,
Co-Chairman from August 1993 to June 1995, Chairman from the Company's
inception in October 1991 to August 1993, a member of the Compensation
Committee from February 1993 to June 1997 and a member of the Audit Committee
from December 1995 to June 1997. Mr. Forstmann was President of the Company
from October 1991 to August 1993 and from September 1994 to March 1995 and
Chief Executive Officer of the Company from October 1991 to August 1993 and
from September 1994 to December 1995. Mr. Forstmann has been a Managing
Director of J.A. Forstmann & Co., a merchant banking firm since October 1987.
He co-founded Forstmann-Leff Associates, an institutional money management
firm, in 1968 and was a Managing Director thereof from its inception until
October 1987. Mr. Forstmann has been a Limited Partner of Forstmann Little &
Co. since its inception in 1978. Mr. Forstmann has been a director of Community
Health Services, a private entity engaged in the operations of hospitals, since
1996. Mr. Forstmann received a BA in Economics from Yale University and an MBA
from the Graduate School of Business Administration, Columbia University.

DONALD C. KLOSTERMAN has served as a director of the Company and as a
member of Compensation Committee since June 1997. Mr. Klosterman also serves as
a business consultant for various entities. From July 1994 to November 1995,
Mr. Klosterman was co-founder and President of Pacific Casino Management Inc.,
a casino operator. Mr. Klosterman was a co-founder and the Chairman of the
Board of Directors of NTN Communications, Inc. ("NTN"), a satellite
broadcasting company that provides interactive entertainment programming, from
April 1983 to September 1994, and a consultant to NTN from 1991 to 1992. From
1989 to 1991, Mr. Klosterman was a consultant to Comcheck, a credit verifying
company. Mr. Klosterman is currently a director of NTN, and has been a director
of Aldila Shaft Manufacturer, Inc., a manufacturer of graphite golf shafts,
since March 1994. Mr. Klosterman served as Vice President/General Manager of
the Los Angeles Rams from 1971 until 1982, General Manager of the Baltimore
Colts from 1970 until 1971 and General Manger of the Houston Oilers from 1966
until 1970. Mr. Klosterman played professional football for Cleveland, Dallas,
Los Angeles and Calgary.

DON M. LYLE has served as a director of the Company and a member of the
Audit Committee since June 1997. Mr. Lyle has also been an independent
consultant to various computer and venture capital companies in the United
States, Europe and Japan since 1983. Mr. Lyle has also been a principal of
Technology Management Company, a management firm specializing in high
technology companies, since 1983. Mr. Lyle has served as a director of Emulex
Network Systems, Inc., a designer and manufacturer of network access products,
supplying high performance communications solutions for managing the flow of
time-critical data between computers and peripheral equipment, since February
1994, DH Technology, Inc., a print head and specialty printing company, since
April 1992, Systech Corp., a data communications company, since February 1990
and Insync Systems, Inc., a supplier of ultra-clean gas delivery systems to
semiconductor equipment manufacturers, since April 1995. From 1984 to 1987, Mr.
Lyle was President and Chief Executive Officer of Data Electronics, Inc., a
tape drive and cartridge media business.

ROBERT J. ROSENBLATT has served as a director of the Company and as a
member of the Audit Committee since March 1998. Mr. Rosenblatt, has been
Executive Vice President and Chief Financial Officer of Home Shopping Network
("HSN") since December 1997. Mr. Rosenblatt is responsible for Accounting,
Budget and Planning, and Human Resources at HSN. From 1984 until December 1997,
Mr. Rosenblatt held several positions of increasing responsibility at
Bloomindale's, a division of

Federated Department Stores, including Assistant Controller, Vice President of
Finance and Vice President of Stores Operations and Purchasing. Mr. Rosenblatt
was most recently Senior Vice President and Chief Financial Officer of
Bloomingdale's. Mr. Rosenblatt received his BS in Accounting from Brooklyn
College.

FRANCIS R. SANTANGELO has served as a director of the Company and as a
member of the Compensation Committee since September 1997. Mr. Santangelo, also
serves as an independent legal and financial consultant with over 30 years
experience in the financial community. In addition, from 1959 to 1988, Mr.
Santangelo was a principal in Francis R. Santangelo & Co., a specialist firm on
the American Stock Exchange, and is also a former member of the Board of
Directors of the American Stock Exchange.

Pursuant to that certain Stock Purchase Agreement, dated as of April 28,
1992, by and between the Company and HSN, HSN has the right to nominate up to
three directors for the Board. HSN had nominated as directors of the Company
Kevin J. McKeon and then Jed B. Trosper, who resigned effective February 12,
1997 and March 11, 1998, respectively. Robert Rosenblatt has been nominated by
HSN to serve on the Board.

Pursuant to a stockholders' voting agreement, dated as of March 14, 1995,
J. Anthony Forstmann, RMS Limited Partnership, a Nevada limited partnership
("RMS"), and Francis R. Santangelo (the "Stockholders' Voting Agreement"), each
agreed to vote certain shares of the Common Stock, beneficially owned by such
party, and each of their respective affiliates, for a director nominated by
each of Mr. Forstmann and RMS and not to vote certain shares of Common Stock
beneficially owned by such party, and each of their respective affiliates, in
favor of certain specified stockholder actions unless such actions are agreed
upon by Mr. Forstmann and RMS. To date, RMS has not exercised its right to
nominate a director pursuant to the Stockholders' Voting Agreement.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the Nasdaq SmallCap Market
(the "SmallCap Market") Officers, directors and greater than ten-percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during fiscal 1997, each
of Frank M. Devine, Donald C. Klosterman, Don M. Lyle, Francis R. Santangelo
and Jed B. Trosper, each a director or former director of the Company, failed
to file on a timely basis one report, covering his election as a director and
no transactions.

THE BOARD AND ITS COMMITTEES

The Board held five (5) meetings during fiscal year 1997.

The Board has two standing committees, the Audit Committee and the
Compensation Committee. In addition, from time to time the Board establishes
committees of limited duration for special purposes. The Company does not have
a nominating committee for recommending to Stockholders candidates for
positions on the Board.

The Audit Committee, which held one (1) meeting during fiscal year 1997,
consisted of J. Anthony Forstmann, John L. Gustafson and W. Lee Shevel, a
director of the Company who resigned from the Board effective September 8,
1997, until June 1997. Effective June 1997, Don M. Lyle and Jed B. Trosper
replaced Messrs. Forstmann and Gustafson on the Audit Committee. Effective
September

1997, Frank M. Devine replaced Mr. Shevel on the Audit Committee. Effective
March 1998, Robert Rosenblatt replaced Mr. Trosper on the Audit Committee. The
Committee's responsibilities include reviewing (i) the scope and findings of
the annual audit, (ii) accounting policies and procedures and the Company's
financial reporting and (iii) the internal controls employed by the Company.

The Compensation Committee, which held one (1) meeting during fiscal year
1997, consisted of Messrs. Forstmann, Gustafson and Shevel, a director of the
Company who resigned from the Board effective September 8, 1997, until June
1997. Effective June 1997, Messrs. Devine and Klosterman replaced Messrs.
Forstmann and Gustafson on the Compensation Committee. Effective September
1997, Francis R. Santangelo replaced Mr. Shevel on the Compensation Committee.
The Committee's responsibilities include (i) making recommendations to the
Board on salaries, bonuses and other forms of compensation for the Company's
officers and other key management and executive employees, (ii) administering
the Plan and (iii) reviewing management recommendations for grants of stock
options and any proposed plans or practices of the Company relating to
compensation of its employees and directors.

Each incumbent director attended at least 75 percent of all meetings of
the Board and committees of the Board to which he was assigned that were held
during the portion of fiscal year 1997 as to which such director was a member
of the Board or applicable committee.

COMPENSATION OF DIRECTORS

During 1997, no cash compensation was paid to any of the directors of the
Company for being a director of the Company, except that such persons are
reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board or committees of the Board.

In lieu of cash compensation for serving on the Board, on March 11, 1998,
the Board, on the recommendation of the Compensation Committee, adopted a plan
to grant options to acquire 200,000 shares of Common Stock to each new director
of the Company, upon such persons election and qualification to the Board. Such
stock options shall vest one-third on the date of grant and an additional
one-third on each of the first two anniversaries of the grant date, if such
person is still serving as a director of the Company, with an exercise price of
the closing bid price of the Common Stock on the SmallCap Market on the date of
such grant. Messrs. Anthony, Devine, Klosterman, Lyle, and Santangelo received
such grants on such date at an exercise price of $.78 (the closing bid price of
the Common Stock on the SmallCap Market on the date of such grant). Mr.
Rosenblatt, because he was nominated to serve on the Board by HSN, declined the
options granted to him. As additional compensation for Messrs. Devine,
Klosterman and Lyle agreeing to join the Board in June 1997, the Board vested
two-thirds of such options on the date of the grant and an additional one-third
will vest on the first anniversary of such grant. In addition, in recognition
of their past efforts and securities to and on behalf of the Company without
any other compensation, the Board granted Messrs. Anthony and Devine options to
acquire 90,000 shares of Common Stock at an exercise price of $.78 vesting
two-thirds on the date of grant and an additional one-third on the first
anniversary of the date of grant.

On March 11, 1998, the Board, in recognition of services provided by Mr.
Santangelo since approximately March 1996, without any other compensation,
extended the expiration date for one year to acquire 1,000,000 shares of the
Company's Common Stock previously granted and repriced those options to the
market value on the date of such grant, or $.78. 500,000 of such options are
immediately exerciseable. 500,000 of such options will be exerciseable only if
certain performance goals as established by the Board and which the Board
believes provides significant benefit to the Company, are attained by March 10,
1999. one-third will vest on the first anniversary of such grant. In addition,
in recognition of their past effort and services to and on behalf of the
Company without any other compensation, the Board granted Messrs. Anthony and
Devine options to acquire 90,000 shares of Common Stock at an exercise price of
$.78 vesting two-thirds on the date of grant and an additional one-third on the
first anniversary of the date of such grant.

On March 11, 1998, the Board of Directors elected Jeffrey P. Anthony as
the new Chairman of the Board. Mr. Anthony's responsibilities as Chairman of
the Board will include, among other duties,

assisting the executive officers of the Company in connection with the
operations of the Company as a means to facilitate the efficient operation of
the Company and communication with the Board. Mr. Anthony, upon acceptance of
the position of Chairman of the Board, resigned as Director of Business
Development. In such capacity, Mr. Anthony received compensation of $105,000
for 1997. The Compensation Committee set Mr. Anthony's compensation at $150,000
for serving as Chairman of the Board and increasing his responsibilities with
regard to the Company. J. Anthony Forstmann, the prior Chairman of the Board
did not receive compensation for serving as Chairman of the Board.

EXECUTIVE OFFICERS

The names and ages of all executive officers of the Company (the "Named
Executive Officers") as of April 9, 1998 are set forth below.

POSITION
NAME AGE OFFICER SINCE
- --------------------------- ----- --------------------------------------- ---------

John L. Gustafson ......... 54 President and Chief Executive Officer 1995
Clinton C. Fuller ......... 53 Chief Operating Officer 1998
David E. Brogan ........... 43 Chief Financial Officer and Secretary 1998

The following sets forth the business experience, principal occupations
and employment of each of the Named Executive Officers who do not serve on the
Board (See "Election of Directors -- Information Regarding Nominees" above for
such information with respect to Mr. Gustafson):

CLINTON C. FULLER, has been Chief Operating Officer of the Company since
March 1998 and the Vice President -- Product Marketing and Financial Services
of the Company from July 1995 to March 1998, overseeing the development of the
Company's products and services. From September 1967 to June 1995, Mr. Fuller
held a variety of managerial positions at Unisys, including worldwide general
manager of Unisys' financial retail delivery system division. Mr. Fuller
received a BS in Computer Science from Lackawanna College.

DAVID E. BROGAN has been Chief Financial Officer of the Company since
March 1998, Vice President -- Finance, Treasurer and Controller of the Company
from August 1996 to March 1998 and Secretary of the Company since December
1996. From March 1995 to March 1996, Mr. Brogan was a consultant for Tunstall
Consulting, a consulting firm specializing in business plan development and
assisting in raising capital. From December 1990 to March 1995, Mr. Brogan was
a Vice President of Finance for Mercury Medical, Inc., a medical distribution
company. From November 1988 to October 1990, Mr. Brogan was Chief Financial
Officer for Electronic Data Technologies, a publicly traded computer systems
manufacturer. Mr. Brogan received his MBA from the University of Colorado and a
BS in Accounting from Metropolitan State College in Denver, Colorado.

EXECUTIVE COMPENSATION

The following table sets forth all compensation with respect to the Named
Executive Officers, including the Chief Executive Officer of the Company:

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS
---------------
ANNUAL SECURITIES
COMPENSATION UNDERLYING
SALARY OPTIONS
NAME AND PRINCIPAL POSITION(1) YEAR ($) (#)
- ---------------------------------------- ------ ----------------- ---------------

John L. Gustafson 1997 $ 170,000 --
President and Chief Executive Officer 1996 248,922(1) 50,000
1995 136,133 400,000
Clinton C. Fuller 1997 $ 128,465 --
Chief Operating Officer 1996 130,000 20,000
1995 78,210 60,000
David E. Brogan 1997 $ 115,000 --
Chief Financial Officer and 1996 27,969 55,000
Secretary 1995 N/A N/A

- ----------------
(1) Mr. Gustafson's salary in 1996 included $78,922 paid by the Company in
connection with Mr. Gustafson's relocation and a related "gross-up" for
the tax applicable to such reimbursement.

The Company offers a plan (the "401(k) Plan") pursuant to Section 401(k)
of the Internal Revenue Code of 1986, as amended (the "Code"), covering
substantially all employees, including the Named Executive Officers. Matching
employer contributions are set at the discretion of the Board. There were no
employer contributions made for 1997, 1996 or 1995.

THE 1992 STOCK INCENTIVE PLAN

The Plan, adopted by the Board and approved by the Stockholders in January
1992, authorizes the granting of stock incentive awards ("Awards") to qualified
officers, employees, directors and third parties providing valuable services to
the Company (e.g., independent contractors, consultants and advisors to the
Company). At the Company's Annual Meeting of Stockholders held on August 12,
1993, the Stockholders approved an amendment to the Plan increasing from
1,500,000 to 2,700,000 the number of shares of Common Stock authorized for
issuance upon exercise of options granted pursuant to the Plan. At the
Company's Annual Meeting of Stockholders held on June 25, 1996, the
Stockholders approved a further amendment to the Plan increasing from 2,700,000
to 3,700,000 the number of shares of Common Stock authorized for issuance upon
exercise of options granted pursuant to the Plan. At the Company's Annual
Meeting of Stockholders held on June 29, 1997, the Stockholders approved a
further amendment to the Plan increasing from 3,700,000 to 4,700,000 the number
of shares of Common Stock authorized for issuance upon exercise of options
granted under the Plan. The Board has proposed increasing the number of shares
under the Plan to 15,000,000 (2,500,000 if the Reverse Split is implemented).
See "Proposal 4. Approval of Amendment to the Plan." There were no individual
grants of stock options nor awards of stock appreciation rights ("SARs") made
during fiscal year 1997 to any of the Named Executive Officers. However, on
March 11, 1998, the Board, upon the recommendation of the Compensation
Committee, granted options to acquire 250,000, 120,000 and 100,000 shares of
Common Stock to Messrs. Gustafson, Fuller and Brogan, respectively, at an
exercise price of $.78 (the closing bid price of the Common Stock on the
SmallCap Market on the date of grant), vesting one-third on the date of grant
and an additional one-third on each of the first two anniversaries of the grant
date. The Compensation Committee also granted options to acquire an aggregate
of 385,000 shares of

Common Stock to other employees of the Company. In addition, on March 11, 1998,
the Board determined to decrease the exercise price on all outstanding stock
options to purchase Common Stock held by employees or directors of the Company
to $.78 (the closing bid price of the Common Stock on the SmallCap Market on
the date of grant). See "Option Repricing" below.

During fiscal year 1997, no stock options were exercised by any director
or Named Executive Officer of the Company. The following table sets forth the
number and value of stock options outstanding as of December 31, 1997 for the
Named Executive Officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------- --------------------------------- --------------------------

John L. Gustafson ......... 176,667/273,333 0/0
Clinton C. Fuller ......... 40,000/60,000 0/0
David E. Brogan ........... 18,333/36,667 0/0

- ----------------
(1) Assumes a market price equal to $.3125 per share, the average of the
closing bid and asked price on the SmallCap Market on December 31, 1997.

OPTION REPRICING

On March 11, 1998, the Board, upon the recommendation of the Compensation
Committee, repriced the exercise price of all outstanding stock options to
purchase Common Stock held by employees and directors of the Company to $.78,
the closing bid price of the Common Stock on the SmallCap Market on such date.
The Board and the Compensation Committee undertook such option repricing in
order to restore the utility of the stock options as effective incentives. As a
result of a decline in the price of the Common Stock, outstanding stock options
granted to employees and directors had exercise prices above the recent
historical trading prices for the Common Stock. The Board believed the
disparity between the exercise price of the stock options and the then current
market price no longer provided a meaningful long-term incentive to the option
holders. The Board believes that the issuance of stock options increases the
incentive of, and attracts and encourages the continued employment and service
of qualified directors, officers and other key employees by facilitating their
purchase of a stock interest in the Company. In addition, the granting of stock
options helps align the financial interests of directors, officers and other
key employees receiving such options with the Stockholders because such
directors', officers' and key employees' compensation increases as the price of
the Common Stock increases. In light of the Company's historical and current
cash flow concerns which have limited and continue to limit the amounts
available to pay individuals as compensation, the Board has determined that it
is advisable that the Company and its Stockholders continue to have the
incentive of stock options available as a means of attracting and retaining
directors, officers and key employees.

In its deliberations over whether to authorize the repricing of all stock
options, the Compensation Committee considered at length the potential
disadvantages of such repricing, including the dilutive affect on, and possible
negative reactions among, the existing Stockholders. While fully cognizant of
the potential disadvantages of the repricing of all stock options, the Board
and the Compensation Committee concluded that such repricing was necessary as a
means (i) to retain and attract directors, officers and other key employees,
(ii) to reward directors, officers and other employees who have continued to
work hard for the Company and its Stockholders through what at times have been
difficult circumstances and (iii) to ensure that the directors, officers and
other key employees have an opportunity to acquire a meaningful equity interest
in the Company helping align their financial interests with those of the
Stockholders.

The repriced stock options have exercise prices of $.78 per share, the
closing bid price of the Common Stock on the SmallCap Market on the date of the
repricing. Except for the new exercise prices, the terms of the repriced stock
options remain the same.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee presently consists of Messrs. Devine,
Klosterman and Santangelo. On September 8, 1997, W. Lee Shovel resigned as a
member of the Compensation Committee. In June 1997 Messrs. Forstmann and
Gustafson resigned as members of the Compensation Committee. During the most
recently completed fiscal year, the Board did not have an option committee.
Rather the Compensation Committee and the full Board determined whether to make
option grants.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee has furnished the following report on executive
compensation:

Under the supervision of the Compensation Committee, the Company has
developed and implemented compensation policies which seek to enhance the
profitability of the Company, and thus Stockholder value, by aligning the
financial interests of the Company's executive officers with those of its
Stockholders. In furtherance of these goals, the Company relies to a large
degree on long-term incentive compensation provided through the Plan to attract
and retain corporate officers and other key employees of outstanding abilities
and to motivate them to perform to the full extent of their abilities.

Total compensation for executive officers of the Company presently
consists of both cash and equity based compensation. The Compensation Committee
determines the salary of executive officers based upon competitive norms. Under
the Plan, the Compensation Committee grants stock options, SARs, performance
share awards and restricted share awards based upon competitive industrial
practice. To date, the Compensation Committee has only granted stock options.
The Compensation Committee has the authority to determine the individuals to
whom such options are awarded, the terms at which option grants shall be made
and the terms of the options and the number of shares subject to each option.
The size of option grants are based upon competitive practice and position
level. Through the award of stock option grants, the objective of aligning
executive officers' long-range interests with those of the Stockholders are met
by providing executive officers with the opportunity to build a meaningful
stake in the Company. Salary levels and stock option awards may be adjusted up
or down for an executive's achievement of specified objectives and individual
job performance.

On March 14, 1995, John L. Gustafson was named President and Chief
Operating Officer of the Company. The Board agreed to compensate Mr. Gustafson,
after extensive negotiations, at the rate of $170,000 per year and granted to
him, on such date, stock options to purchase 400,000 shares of Common Stock at
an exercise price of $1.50 per share, of which options to purchase 80,000
shares of Common Stock will vest on each anniversary of the date of the grant
through March 14, 2000. No specific formula was used in determining or agreeing
to Mr. Gustafson's compensation; however, the cash portion of his compensation
was determined based on the lowest amount Mr. Gustafson could be paid within
the Company's cash constraints to meet its ordinary course expenses, while
giving him significant upside potential in an option grant, the vesting of
which was tied to continuity of service. In December 1995, Mr. Gustafson became
Chief Executive Officer of the Company. Based upon Mr. Gustafson's performance
of his duties in fiscal 1997, the Board determined to continue to compensate
Mr. Gustafson at the previously negotiated rate of $170,000 per year for fiscal
1998.

Compensation Committee

Frank M. Devine
Donald C. Klosterman
Francis R. Santangelo

PERFORMANCE GRAPH

Set forth below is a line graph comparing total Stockholder return on the
Common Stock against the cumulative total return of the Center for Research in
Securities Prices ("CRSP") Index for the SmallCap Market and the CRSP Index for
Nasdaq Computer and Data Processing Stocks for the period commencing December
31, 1992 and ending December 31, 1997.

COMPARISON OF CUMULATIVE TOTAL RETURNS
AMONG THE CRSP INDEX FOR THE SMALLCAP MARKET,
CRSP INDEX FOR NASDAQ COMPUTER AND DATA PROCESSING
STOCKS AND THE NATIONAL REGISTRY INC.

1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
The National Registry Inc. ..... 100.00 45.46 15.91 33.33 31.06 3.79
NASDAQ ......................... 100.00 114.79 112.21 158.69 195.18 239.57
Peer Group ..................... 100.00 105.84 128.53 195.74 241.54 296.77

Notes:

A. Assumes $100 invested on December 31, 1992 in the CRSP Index for the
SmallCap Market, the CRSP Index for Nasdaq Computer and Data Processing Stock
and the Common Stock.

B. The Common Stock began trading on the SmallCap Market on April 27,
1993. Prior to that date, the Common Stock traded sporadically in the
over-the-counter market since February 1992.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Jeffrey P. Anthony, the new Chairman of the Board, is the son-in-law of J.
Anthony Forstmann, a greater than ten percent Stockholder of the Company,
director of the Company and former Chairman of the Board.

Kevin J. McKeon, a director of the Company who resigned from the Board
effective February 11, 1997, was nominated by and served as a representative of
HSN in accordance with HSN's right to nominate up to three directors pursuant
to the Stock Purchase Agreement. Following Mr. McKeon's resignation from the
Board, HSN nominated Jed B. Trosper to serve as a member of the Board. Mr.
Trosper resigned from the Board effective March 11, 1998 and, on such date,
Robert Rosenblatt was elected to the Board. Mr. Rosenblatt has been nominated
by HSN to serve on the Board.

On June 3, 1996, the Company hired Ms. Donna Gustafson, wife of John
Gustafson (CEO, President and Director of the Company), as Director of
Marketing for health care services. On October 13, 1995, the Company, as part
of a prior consulting arrangement, granted Ms. Gustafson options to purchase
25,000 shares of Common Stock at an exercise price of $2.25 per share, vesting
pro rata on each of the next three anniversaries of the date of grant. On
November 18, 1996, the Company granted Ms. Gustafson options to purchase 15,000
shares of Common Stock at an exercise price of $1.125 per share. On February
10, 1998, Ms. Gustafson's employment with the Company terminated. As part of
her termination agreement, the Board extended for one year from the date of her
termination the expiration date of the options previously granted.

The Company believes that each of the related party transactions described
herein were on terms as fair to the Company as could have been obtained from
unaffiliated third parties.

PROPOSAL 2. AMENDMENT OF CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT OF THE COMMON STOCK

GENERAL

The Board has unanimously approved (subject to Stockholder approval), and
is hereby soliciting Stockholder approval of, an amendment to the Certificate,
substantially in the form of Exhibit "A" attached to this Proxy Statement (the
"Reverse Split Certificate Amendment") and incorporated herein by this
reference, effecting the Reverse Split with respect to all issued and
outstanding shares of Common Stock. The text of the Reverse Split Certificate
Amendment is, however, subject to change as may be required by the Secretary of
State of the State of Delaware (the "Secretary of State"). If the Reverse Split
Certificate Amendment is approved by the actions of the Stockholders, as a
result of the Reverse Split, every six (6) shares of existing Common Stock
outstanding (the "Old Common Stock") as of the time of filing of the Reverse
Split Certificate Amendment with the Secretary of State (the "Effective Date")
would be automatically converted into one (1) new share of Common Stock (the
"New Common Stock").

The Certificate currently provides for 75,000,000 authorized shares of
Common Stock, 38,924,124 of which were issued and outstanding as of the Record
Date.

ln order to effect the Reverse Split, the Stockholders are being asked to
approve the Reverse Split and the Reverse Split Certificate Amendment. The
Board believes that the Reverse Split is in the best interests of both the
Company and the Stockholders and has approved, subject to Stockholder approval,
the Reverse Split. The Board reserves the right, notwithstanding Stockholder
approval and without further action by the Stockholders, to decide not to
proceed with the Reverse Split if at any time prior to its effectiveness it
determines, in its sole discretion, that the Reverse Split is no longer in the
best interests of the Company and its Stockholders.

PURPOSES AND REASONS FOR THE REVERSE SPLIT

The Board believes that the Reverse Split is beneficial to the Company and
the Stockholders. The principal reasons for the Reverse Split are to aid the
Company in remaining eligible for listing on the SmallCap Market, to attempt to
enhance investor interest in the Common Stock and to attempt to help the
investment community realize the underlying value of the Common Stock.

The Common Stock is currently quoted on the SmallCap Market. The Company
believes the Reverse Split is necessary to maintain its listing on the SmallCap
Market pursuant to the listing criteria recently adopted by the Board of
Directors of the Nasdaq Stock Market, Inc. ("Nasdaq") and approved by the SEC
(the "Listing Criteria"). For continued inclusion on the SmallCap Market, the
minimum bid price per share is now required by the Listing Criteria to be at
least $1.00. Failure to maintain a bid price in excess of $1.00 per share in
accordance with such maintenance criteria of the SmallCap Market could result
in the future delisting of the Common Stock from the SmallCap Market. The
closing bid price per share of the Common Stock as reported on the SmallCap
Market on April 9, 1998 was $.594. Prior to the final adoption of the Listing
Criteria, there were available alternative criteria for maintaining listing,
which the Company satisfied. However, the Listing Criteria eliminated such
alternative listing criteria. On February 27, 1998, the Company received a
letter from Nasdaq stating that the Company was not in compliance with this
standard and, if not in compliance prior to May 28, 1998 the Common Stock would
be delisted from trading on the SmallCap Market. If the Reverse Split is not
approved and/or the minimum bid price goes and stays below $1.00 the Common
Stock would be subject to being delisted. Such delisting would likely adversely
affect the trading in and liquidity of the Common Stock. The Company expects
that, as a result of the Reverse Split, the market price of the Common Stock
would increase significantly, thereby enabling the Company to maintain its
listing on the SmallCap Market.

If the Common Stock is delisted from the SmallCap Market, trading, if any,
of the Common Stock would thereafter have to be conducted in the over-the
counter market or otherwise. In such event, an investor could find it more
difficult to dispose of, or to obtain accurate quotations as to the market
value of, the Common Stock. In addition, if the Common Stock were to become
delisted from trading on the SmallCap Market and not listed on a national
exchange or on the Nasdaq system and the trading price of the Common Stock were
to remain below $5.00 per share, trading in the Common Stock would also be
subject to the requirements of certain rules promulgated under the Exchange
Act, which require additional disclosure by brokers or dealers in connection
with any trades involving a stock defined as a penny stock (generally, any
non-Nasdaq equity security that has a market price of less than $5.00 per
share, subject to certain exceptions). Further, if the Common Stock was a penny
stock, prior to effectuating any trade in the Common Stock, a broker or dealer
would be required under such Exchange Act rules to make a suitability
determination as to such proposed purchaser of the Common Stock and to receive
a written agreement, meeting certain requirements, prior to effectuating any
transaction in the Common Stock. The additional burdens imposed upon brokers or
dealers by such requirements could discourage brokers or dealers from effecting
transactions in the Common Stock, which could severely limit the market
liquidity of the Common Stock and the ability of investors to trade the Common
Stock.

The Board also believes that the current low per share price of the Common
Stock as reported on the SmallCap Market has had a negative effect on the price
and marketability of existing shares, the amount and percentage (relative to
share price) of transaction costs paid by individual Stockholders and the
potential ability of the Company to raise capital by issuing additional shares
of Common Stock or other securities convertible into Common Stock or to
undertake merger or acquisition transactions. Reasons for these effects include
internal policies and practices of certain institutional investors which
prevent or tend to discourage the purchase of low-priced stocks, the fact that
many brokerage houses do not permit low-priced stocks to be used as collateral
for margin accounts or to be purchased on margin and a variety of brokerage
house policies and practices which tend to discourage individual brokers within
those firms from dealing in low-priced stocks.

In addition, since broker's commissions on low-priced stocks generally
represent a higher percentage of the stock price than commissions on higher
priced stocks, the current share price of the Common Stock can result in
individual Stockholders paying transaction costs which are a higher percentage
of the share price than would be the case if the share price were substantially
higher. The Board believes that the Reverse Split, and the expected resulting
increased price level, may enhance investor interest in the Common Stock and
may help the investment community realize the underlying value of the Common
Stock. There is however, no assurance that any of the foregoing effects will
occur.

WHILE THE BOARD BELIEVES THAT THE SHARES OF COMMON STOCK WILL TRADE AT
HIGHER PRICES THAN THOSE WHICH HAVE PREVAILED IN RECENT MONTHS, THERE IS NO
ASSURANCE THAT SUCH INCREASE IN THE TRADING PRICE WILL OCCUR OR, IF IT DOES
OCCUR, THAT IT WILL EQUAL OR EXCEED THE DIRECT ARITHMETICAL RESULT OF THE
REVERSE SPLIT SINCE THERE ARE NUMEROUS FACTORS AND CONTINGENCIES WHICH COULD
AFFECT SUCH PRICE. THERE IS NO ASSURANCE THAT THE COMPANY WILL CONTINUE TO MEET
THE LISTING REQUIREMENTS FOR THE SMALLCAP MARKET FOLLOWING THE REVERSE SPLIT.

EFFECTS OF THE REVERSE SPLIT

If effected, the Reverse Split would reduce the number of issued and
outstanding shares of Old Common Stock from 38,924,124 as of the Record Date to
approximately 6,487,354 shares of New Common Stock as of the Effective Date.
(The foregoing assumes no issuances of Common Stock between the Record Date and
the Effective Date.) The Reverse Split itself would have no effect on the
number of authorized shares of Common Stock or the par value of the Common
Stock. However, because the number of shares of New Common Stock that the
Company is authorized to issue will not be decreased by the Reverse Split, the
number of shares which are authorized but unissued effectively will be
increased six-fold. In addition, if such shares are issued after the Reverse
Split, the ownership interests of the current Stockholders would be
significantly diluted. See "Proposal 3. Approval of Change in Authorized Common
Stock" for a discussion as to the proposed decrease in the number of authorized
shares of Common Stock.

The consummation of the Reverse Split without a corresponding decrease in
the authorized Common Stock may be viewed as having the effect of discouraging
or impeding hostile takeovers of the Company or of making it more difficult to
replace management because the issuance of additional shares of Common Stock
could be made at the discretion of the Board. While the Board is not aware of
any proposals to acquire the Company and this proposal is not being made as a
means to deter or prohibit hostile takeovers or to make it more difficult to
remove current management, the Board would be able to issue additional shares
of Common Stock thereby, among other things, diluting Stockholders ownership
interests, increasing the costs of a hostile takeover bid offer or placing
shares of Common Stock with individuals and/or entities who would support
management positions. By potentially discouraging initiation of an unsolicited
takeover attempt, the effective increase of the authorized shares of Common
Stock may limit the opportunity for the Stockholders to dispose of their shares
at the higher price generally available in takeover attempts or that may be
available under a merger proposal. The effective increase of the authorized
shares of Common Stock may also have the effect of permitting the Company's
current management, including the current Board, to retain its position, and
place it in a better position to resist changes that Stockholers may wish to
make if they are dissatisfied with the conduct of the Company's business. See
the discussion below in connection with "Proposal and Approval of Change in
Authorized Common Stock" proposing to reduce the authorized shares of Common
Stock.

All issued and outstanding options, warrants, and convertible securities
would be appropriately adjusted for the Reverse Split automatically on the
Effective Date. The Reverse Split would not affect any Stockholders
proportionate equity interest in the Company except for those Stockholders who
would receive an additional share of Common Stock in lieu of fractional shares.
None of the rights currently accruing to holders of the Common Stock, or
options or warrants to purchase Common Stock, or securities convertible into
Common Stock, will be affected by the Reverse Split.

The Reverse Split will result in some Stockholders holding odd lots of the
Common Stock (blocks of less than 100 shares). Because broker/dealers typically
charge a higher commission to complete trades in odd lots of securities, the
transaction costs may increase for those Stockholders who will hold odd lots
after the Reverse Split.

Although the Board believes as of the date of this Proxy Statement that
the Reverse Split is advisable, the Reverse Split may be abandoned by the Board
at any time before, during or after the Annual Meeting and prior to the
Effective Date.

Dissenting Stockholders have no appraisal rights under Delaware law or
under the Certificate or Bylaws of the Company in connection with the Reverse
Split.

The Board may make any and all changes to the Reverse Split Certificate
Amendment that it deems necessary in order to file the Reverse Split
Certificate Amendment with the Secretary of State and give effect to the
Reverse Split.

MECHANICS OF REVERSE SPLIT

If the Reverse Split is approved by the requisite vote of the
Stockholders, the Company will file the Reverse Split Certificate Amendment as
soon as practicable thereafter, and the Reverse Split will be effective on the
date of such filing, unless abandoned by the Board as described above. Upon
filing of the Reverse Split Certificate Amendment, every six (6) issued and
outstanding shares of Old Common Stock will, effective upon such filing, be
automatically and without any action on the part of the Stockholders converted
into and reconstituted as one (1) share of New Common Stock.

As soon as practical after the Effective Date, the Company will forward,
or cause to be forwarded, a letter of transmittal to each holder of record of
shares of Old Common Stock outstanding as of the Effective Date. The letter of
transmittal will set forth instructions for the surrender of certificates
representing shares of Old Common Stock to the Company's transfer agent in
exchange for certificates representing the number of whole shares of New Common
Stock into which the shares of Old Common Stock have been converted as a result
of the Reverse Split. CERTIFICATES SHOULD NOT BE SENT TO THE COMPANY OR THE
TRANSFER AGENT PRIOR TO RECEIPT OF SUCH LETTER OF TRANSMITTAL FROM THE COMPANY.

Until a Stockholder forwards a completed letter of transmittal together
with certificates representing his, her or its shares of Old Common Stock to
the transfer agent and receives a certificate representing shares of New Common
Stock, such Stockholder's Old Common Stock shall be deemed equal to the number
of whole shares of New Common Stock to which each Stockholder is entitled as a
result of the Reverse Split.

No scrip or fractional certificates will be issued in the Reverse Split.
Instead, the Company will issue one additional share of New Common Stock to
each affected Stockholder at no cost to such Stockholder. The ownership of a
fractional interest will not give the holder thereof any voting, dividend or
other rights except the right to receive an additional share therefor as
described herein. The number of shares of New Common Stock to be issued in
connection with settling such fractional interests is not expected to be
material.

FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT

The following is a summary of the material anticipated federal income tax
consequences of the Reverse Split to Stockholders. This summary is based on the
provisions of the Code, the Treasury Department Regulations (the "Regulations")
issued pursuant thereto, and published rulings and court decisions in effect as
of the date hereof, all of which are subject to change. This summary does not
take into account possible changes in such laws or interpretations, including
amendments to the Code, applicable statutes, Regulations and proposed
Regulations or changes in judicial or administrative rulings; some of which may
have retroactive effect. No assurance can be given that any such changes will
not adversely affect the discussion of this summary.

This summary is provided for general information only and does not purport
to address all aspects of the possible federal income tax-consequences of the
Reverse Split and IS NOT INTENDED AS TAX ADVICE TO ANY PERSON OR ENTITY. In
particular, and without limiting the foregoing, this summary does not consider
federal income tax consequences to Stockholders of the Company in light of
their individual investment circumstances or to holders subject to special
treatment under the federal income tax laws (for example, tax exempt entities,
life insurance companies, regulated investment companies and foreign
taxpayers). In addition, this summary does not address any consequences of the
Reverse Split under any state, local or foreign tax laws. As a result, it is
the responsibility of each Stockholder to obtain and rely on advice from his,
her or its personal tax advisor as to: (i) the effect on his, her or its
personal tax situation of the Reverse Split, including the application and
effect of state, local and foreign income and other tax laws; (ii) the effect
of possible future legislation and Regulations; and (iii) the reporting of
information required in connection with the Reverse Split on his, her or its
own tax returns. It will be the responsibility of each Stockholder to prepare
and file all appropriate federal, state and local tax returns. No ruling from
the Internal Revenue Service (the "Service") or opinion of counsel will be
obtained regarding the federal income tax consequences to the Stockholders as a
result of the Reverse Split. ACCORDINGLY, EACH STOCKHOLDER IS ENCOURAGED TO
CONSULT HIS, HER OR ITS TAX ADVISER REGARDING THE SPECIFIC TAX CONSEQUENCES OF
THE PROPOSED TRANSACTION TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.

The Company believes that the Reverse Split will qualify as a
"recapitalization" under Section 368(a)(1)(E) of the Code. As a result, no gain
or loss will be recognized by the Company or its Stockholders in connection
with the Reverse Split. A Stockholder who exchanges his, her or its Old Common
Stock solely for New Common Stock will recognize no gain or loss for federal
income tax purposes. A Stockholder's aggregate tax basis in his, her or its
shares of New Common Stock received from the Company will be the same as his,
her or its aggregate tax basis in the Old Common Stock exchanged therefor. The
holding period of the New Common Stock received by such Stockholder will
include the period during which the Old Common Stock surrendered in exchange
therefor was held, provided all such Common Stock was held as a capital asset
on the date of the exchange.

VOTE REQUIRED

The approval of the Reverse Split Certificate Amendment to the Certificate
effecting the Reverse Split requires the affirmative vote of a majority of the
issued and outstanding shares of the Common Stock.

The Board recommends a vote "FOR" approval of the proposed Reverse Split
Certificate Amendment.

PROPOSAL 3. APPROVAL OF CHANGE IN
AUTHORIZED COMMON STOCK

COMMON STOCK CERTIFICATE AMENDMENT -- GENERAL

In the event that the Reverse Split Certificate Amendment is approved by
the Stockholders, the Board has authorized, subject to Stockholder approval
which it is hereby soliciting, an amendment to the Certificate to decrease the
number of authorized shares of Common Stock from the present amount of
75,000,000 shares to 25,000,000 shares. The text of such amendment to the
Certificate (the "Common Stock Certificate Amendment") is substantially set
forth in Exhibit "B" to this Proxy Statement and incorporated herein by this
reference. The text of the Common Stock Certificate Amendment is, however,
subject to change as may be required by the Secretary of State. If the Reverse
Split Certificate Amendment and the Common Stock Certificate Amendment are
approved by the necessary vote of the Stockholders, the Board may combine such
amendments and file one Certificate of Amendment to the Certificate with the
Secretary of State covering both amendments.

If the Common Stock Certificate Amendment is approved by the necessary
vote of the Stockholders, upon filing of the Common Stock Certificate Amendment
with the Secretary of State, the

number of shares of Common Stock authorized by the Certificate of Incorporation
will be 25,000,000 shares of Common Stock (decreased from 75,000,000 shares).
The Board may make any and all changes to the Common Stock Certificate
Amendment that it deems necessary in order to give effect to the decrease in
the authorized shares of Common Stock of the Company. In the event that the
Reverse Split Certificate Amendment is not approved by the Stockholders, the
number of authorized shares of Common Stock will remain at 75,000,000 shares.

At the close of business on April 9, 1998, 38,924,124 shares of Common
Stock were issued and outstanding, and an aggregate of 23,951,368 shares of
Common Stock were reserved for various purposes, including 3,247,500 shares for
issuance under the Plan, 2,495,000 shares for issuance upon the exercise of
outstanding options to purchase the Common Stock granted outside the Plan to
various directors and employees of the Company, 824,585 shares for issuance
upon the exercise of outstanding warrants of the Company and 16,875,783 shares
for issuance upon conversion of the Company's Series A Convertible Preferred
Stock and Series C Convertible Preferred Stock (assuming the conversion price
is $.48, or 82.5% of the average closing price of the Common Stock on the
SmallCap Market for the five days preceding April 9, 1998).

Current Stockholders hold approximately 52% of the currently authorized
Common Stock. Assuming the approval of the Reverse Split Certificate Amendment
and the Common Stock Certificate Amendment, current Stockholders will hold
approximately 40% of the amended authorized Common Stock after giving effect to
such amendments. Assuming the approval of the Reverse Split Certificate
Amendment and the failure to approve the Common Stock Certificate Amendment,
current Stockholders will hold approximately 13% of the currently authorized
Common Stock after giving effect to the Reverse Split Certificate Amendment.

PURPOSE AND REASONS FOR THE COMMON STOCK CERTIFICATE AMENDMENT

If the Common Stock Certificate Amendment is approved by the Stockholders
at the Annual Meeting, 50,000,000 fewer shares of authorized Common Stock will
be available for future issuance. As of April 9, 1998, the Company has
38,924,124 shares of Common Stock issued and outstanding, and 23,951,368 shares
of unissued Common Stock reserved for future issuance for various purposes,
leaving 12,307,318 shares of Common Stock presently unreserved and otherwise
available for issuance. If the Reverse Split Certificate Amendment and the
Common Stock Certificate Amendment are approved by the Stockholders at the
Annual Meeting, approximately 14,520,751 shares of New Common Stock will be
unreserved and otherwise available for issuance (approximately 12,804,085
shares if the Plan Amendment is approved). If the authorized Common Stock was
to be reduced in the same proportion as the Reverse Split, only approximately
2,020,751 shares of New Common Stock would be unreserved and otherwise
available for issuance (approximately 304,084 shares if the Plan Amendment is
approved). Such amount is less than the Board believes is prudent to have
available to maintain flexibility for possible future issuances. Accordingly,
if the Stockholders approve the Reverse Split Certificate Amendment and the
Common Stock Certificate Amendment, the proportion of unreserved authorized
shares of Common Stock to issued and reserved shares of Common Stock will be
effectively increased, but to a much lesser extent than would be the case if
the Reverse Split Certificate Amendment is approved and this Common Stock
Certificate Amendment is not approved; in the latter case, the authorized
Common Stock would remain at the present 75,000,000 share level. Authorized but
unissued shares of Common Stock will be available for issuance from time to
time upon the exercise of options which may in the future be granted to, among
others, employees, consultants and members of the Board, to take advantage of
opportunities in which the issuance of shares of Common Stock may be deemed
advisable such as in equity financings or in acquisition transactions, and for
such other purposes and consideration, and on such terms, as the Board may
approve.

No further vote of the Stockholders will be required with respect to any
such issuance. The timing of the actual issuance of additional shares of Common
Stock will depend upon market conditions, the specific purpose for which the
stock is to be issued and other similar factors. The Company currently has no
plans, agreements, arrangements, understandings or commitments for the issuance
of Common

Stock other than for issuances upon exercise, if any, of presently issued or
authorized options (including any increased authorized shares of Common Stock
if the Plan Amendment is approved) and warrants, upon the conversion, if any,
of presently outstanding Series A Convertible Preferred Stock and Series C
Convertible Preferred Stock. The Board believes it is in the Company's best
interest to have such additional shares authorized as such shares will provide
the Company added flexibility in the future to issue Common Stock for working
capital purposes, acquisitions, employee benefit compensation or otherwise.

The consummation of the Reverse Split without a corresponding decrease in
the authorized Common Stock may be viewed as having the effect of discouraging
or impeding hostile takeovers of the Company or of making it more difficult to
replace management because the issuance of additional shares of Common Stock
could be made at the discretion of the Board. While the Board is not aware of
any proposals to acquire the Company and this proposal is not being made as a
means to deter or prohibit hostile takeovers or to make it more difficult to
remove current management, the Board would be able to issue additional shares
of Common Stock thereby, among other things, diluting Stockholders ownership
interests, increasing the costs of a hostile takeover bid offer or placing
shares of Common Stock with individuals and/or entities who would support
management positions. By potentially discouraging initiation of an unsolicited
takeover attempt, the effective increase of the authorized shares of Common
Stock may limit the opportunity for the Stockholders to dispose of their shares
at the higher price generally available in takeover attempts or that may be
availabel under a merger proposal. The effective increase of the authorized
shares of Common Stock may also have the effect of permitting the Company's
current management, including the current Board, to retain its position, and
place it in a better position to resist changes that Stockholers may wish to
make if they are dissatisfied with the conduct of the Company's business.

The Common Stock has no conversion, preemptive or subscription rights and
is not redeemable. The terms of the additional shares of Common Stock for which
authorization is sought will be identical with the shares of Common Stock
currently authorized and outstanding, and the Common Stock Certificate
Amendment will not affect the terms, or the rights of the holders, of such
shares issued and outstanding. Any additional issuance of Common Stock could,
however, have a dilutive effect on the existing holders of Common Stock.

The Board recommends a vote "FOR" approval of the proposed Common Stock
Certificate Amendment.

PROPOSAL 4. APPROVAL OF AMENDMENT TO THE PLAN

INTRODUCTION

The Board has authorized, subject to approval by the Stockholders, to
increase from 4,700,000 to 15,000,000 (2,500,000 if the Reverse Split is
implemented) the number of shares of Common Stock authorized for issuance under
the Plan. Except as amended, the provisions of the Plan will remain unchanged.
At the Company's Annual Meeting of Stockholders held on August 12, 1993, the
Stockholders approved a proposal amending the Plan to increase from 1,500,000
to 2,700,000 the number of shares of Common Stock authorized for issuance under
the Plan. At the Company's Annual Meeting of Stockholders held on June 25,
1996, the Stockholders approved a proposal amending the Plan to increase from
2,700,000 to 3,700,000 the number of shares of Common Stock authorized for
issuance upon exercise of options granted pursuant to the Plan. At the
Company's Annual Meeting of Stockholders held on June 27, 1997, the
Stockholders approved a proposal amending the Plan to increase from 3,700,000
to 4,700,000 the number of shares of Common Stock authorized for issuance upon
exercise of options granted pursuant to the Plan.

REASONS FOR THE PLAN AMENDMENT

The Board believes that the issuance of stock options increases the
incentive of, and attracts and encourages the continued employment and service
of qualified directors, officers and other key

employees by facilitating their purchase of a stock interest in the Company. In
addition, the granting of stock options helps align the financial interests of
directors, officers and other key employees receiving such options with the
stockholders because such directors', officers' and key employees' compensation
increases as the price of the Common Stock increases. As of the Record Date,
only 65,000 shares remain available for future option grants under the Plan.
The proposed amendment, if approved by the Stockholders, will increase to
15,000,000 (2,500,000 if the Reverse Split is implemented) the number of shares
of Common Stock authorized for issuance under the Plan (equal to approximately
20% of the authorized Common Stock, 10% if the Common Stock Certificate
Amendment is implemented), including 10,365,000 shares reserved for future
option grants (1,727,500 if the Reverse Split is implemented). The Board
believes that more shares than those remaining available under the Plan are
needed to help the Company meet its goals using stock options.

The Board has determined that it is advisable that the Company and its
Stockholders continue to have the incentive of stock options available as a
means of attracting and retaining directors, officers and key employees. As the
Company progresses, the Company needs the ability to attract and retain such
directors, officers and key employees, including moving them into positions in
the Company where, in the judgment of the Board, such individuals can continue
to help the Company develop and market products and services. The Board
believes that an initial or increased stock option grant will be a valuable
tool in attracting and retaining such individuals and providing added
incentives for their continued contributions to the Company each which will
serve to the ultimate benefit of the Stockholders.

The following summary of the Plan is qualified in its entirety by express
reference to the text of the Plan.

DESCRIPTION OF THE PLAN

The Plan, adopted by the Board and approved by the Stockholders in January
1992, as amended by the Board and approved by the Stockholders at the Company's
Annual Meetings of Stockholders held on August 12, 1993, June 25, 1996 and June
27, 1997, authorizes the granting of Awards of up to 4,700,000 shares of Common
Stock to qualified officers, employees, directors, and third parties providing
valuable services to the Company, e.g., independent contractors, consultants
and advisors to the Company. The Plan provides for the granting of options that
are intended to qualify as "incentive options" ("ISOs") under Section 422 of
the Code, as well as non-incentive options. The Plan also provides that Awards
can be Stock Options ("Options"), SARs, Performance Share Awards ("PSAs") and
Restricted Share Awards ("RSAs"). The number and kind of shares available under
the Plan are subject to adjustment in certain events. Shares relating to
Options and SARs which are not exercised in full, shares relating to RSAs which
do not vest and shares relating to PSAs which are not issued will again be
available for issuance under the Plan. No SARs, RSAs or PSAs have been granted
under the Plan.

The Plan may be administered by the Board or by a committee appointed by
the Board and consisting of two or more members, each of whom must be a
director and disinterested. The Plan is currently administered by the
Compensation Committee pursuant to an appointment by the Board. The
Compensation Committee currently consists of Messrs. Devine, Klosterman, and
Santangelo. The Compensation Committee determines the number of shares to be
covered by an Award, the term and exercise price, if any, of the Award and
other terms and provisions of Awards.

The exercise price for Options is to be determined by the Compensation
Committee, but in the case of an ISO is not to be less than fair market value
on the date the Option is granted (110% of fair market value in the case of an
ISO granted to any person who owns more than 10% of the Common Stock). The
purchase price is payable in any combination of cash, shares of Common Stock
already owned by the participant for at least six months or, if authorized by
the Compensation Committee, a promissory note secured by the Common Stock
issuable upon exercise of the Option. In addition, the Award agreement may
provide for "cashless" exercise and payment. Subject to certain early
termination or acceleration provisions, an Option is exercisable, in whole or
in part, from the date

specified in the related Award agreement (which may be six months after the
date of grant) until the expiration date determined by the Compensation
Committee, but not to exceed ten years (five years for any person who owns more
than 10% of the outstanding Common Stock).

Persons to whom Options are granted prior to the expiration of a resale
restriction period must execute a letter agreement agreeing to certain
restrictions on the sale of the shares issuable upon exercise of such Options.
The Company intends to register under the Securities Act of 1933, as amended,
the shares issuable pursuant to the Plan, which shares will be freely tradable
subject to certain limitations on shares held by affiliates.

As of the Record Date, the Compensation Committee had granted, and as of
the Record Date there is still outstanding, non-qualified stock options with
respect to 2,495,000 shares at various exercise prices. The vesting of Options
varies with respect to each grant of Options. As discussed above, on March 11,
1998, the exercise price of all outstanding options under the Plan was changed
to $.78. See "Proposal 1. Election of Directors -- Option Repricing."

An SAR is the right to receive payment based on the appreciation in the
fair market value of Common Stock from the date of grant to the date of
exercise. In its discretion, the Compensation Committee may grant an SAR
concurrently with the grant of an Option. An SAR is only exercisable at such
time, and to the extent, that the related Option is exercisable. Upon exercise
of an SAR, the holder receives for each share with respect to which the SAR is
exercised an amount equal to the difference between the exercise price under
the related Option and the fair market value of a share of Common Stock on the
date of exercise of the SAR. The Compensation Committee, in its discretion, may
pay the amount in cash, shares of Common Stock or a combination thereof.

A RSA is an Award of a fixed number of shares of Common stock subject to
restrictions. The Compensation Committee specifies the price, if any, the
recipient must pay for such shares. Shares included in a RSA may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered until
they have vested. These restrictions may not terminate earlier than six months
after the Award date. The recipient is entitled to dividend and voting rights
pertaining to such RSA shares even though they have not vested, so long as such
shares have not been forfeited.

A PSA is an Award of a fixed number of shares of Common Stock the issuance
of which is contingent upon the attainment of certain performance objectives,
and the payment of certain consideration, if any, as is specified by the
Compensation Committee. Issuance shall, in any case, not be earlier than six
months after the Award date.

The Plan also provides for certain stock depreciation protection,
tax-offset bonuses and tax withholding using shares of Common Stock instead of
cash.

Upon the date a participant is no longer employed by the Company for any
reason, shares subject to the participant's RSAs which have not become vested
by such date or shares subject to the participant's PSAs which have not been
issued by such date shall be forfeited in accordance with the terms of the
related Award agreements. Options which have become exercisable by the date of
termination of employment must be exercised within certain specified periods of
time from the date of such termination, the period of time depending on the
reason of termination. Options which have not yet become exercisable on the
date the participant terminates employment for a reason other than retirement,
death or total disability shall terminate on such date.

The Board may, at any time, terminate, amend or suspend the Plan. However,
the Board may not amend the Plan, except subject to the approval of the
Company's stockholders, if such amendment would (i) materially increase the
benefits accruing to eligible individuals under the Plan, (ii) increase the
aggregate number of shares which may be issued under the Plan or (iii) modify
the requirements of eligibility for participation in the Plan. Accordingly, and
in order to seek to continue to take advantage of the exemption from the
short-swing profit rules under Section 16(b) (which may be applicable to

certain participants in the Plan) under the Exchange Act pursuant to Rule 16b-3
promulgated thereunder, Stockholders' approval is being sought for the
amendment to the Plan. No amendment, suspension or termination of the Plan may,
without the consent of the optionee to whom an Award has been granted, in any
way modify, amend, alter or impair any rights or obligations under any Award
previously granted under the Plan.

MARKET VALUE

On April 9, 1998, the closing bid price for the Common Stock on the
SmallCap Market was $.594.

RECOMMENDATION AND VOTE

Approval of the Plan Amendment requires the affirmative vote of the
holders of a majority of the shares of Common Stock present in person or by
proxy at the Annual Meeting.

The Board recommends a vote "FOR" approval of the proposed Plan Amendment.

PROPOSAL 5. APPOINTMENT OF INDEPENDENT AUDITORS

Subject to Stockholder ratification, the Board, on the recommendation of
the Audit Committee, has appointed Ernst & Young LLP to continue as its
independent auditors for the fiscal year ending December 31, 1998.

Ernst & Young LLP has been the Company's independent auditors since
October 1992. The Board recommends that the Stockholders vote "FOR" such
ratification. If the Stockholders do not ratify this appointment, other
independent auditors will be considered by the Board upon recommendation of the
Audit Committee. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting, and will have the opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions.

STOCKHOLDER PROPOSALS

In order to be eligible for inclusion in the Company's Proxy Statement for
the 1999 Annual Meeting of Stockholders, Stockholder proposals must be received
by the Secretary of the Company at its executive offices by December 7, 1998.

OTHER BUSINESS

It is not intended that any business other than that set forth in the
Notice of Annual Meeting and more specifically described in this Proxy
Statement will be brought before the Annual Meeting. However, if any other
business should properly come before the Annual Meeting, it is the intention of
the persons named on the enclosed proxy card to vote the signed proxies
received by them in accordance with their sole discretion on such business and
any matters dealing with the conduct of the Annual Meeting.

By Order of the Board

/s/ DAVID E. BROGAN
-------------------------------------
David E. Brogan
CHIEF FINANCIAL OFFICER AND SECRETARY

Dated: April 10, 1998

EXHIBIT A

PROPOSED REVERSE SPLIT CERTIFICATE
AMENDMENT TO THE CERTIFICATE OF
INCORPORATION OF THE NATIONAL REGISTRY INC.

ARTICLE FOUR of the Certificate of Incorporation is amended by deleting it
in its entirety and replacing it with the foregoing:

"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 76,000,000 shares [26,000,000
shares if the Common Stock Certificate Amendment is approved], consisting of
(i) 1,000,000 shares of Preferred Stock, $.01 par value per share (the
"Preferred Stock"), and (ii) 75,000,000 shares [25,000,000 shares if the Common
Stock Certificate Amendment is approved], of Common Stock, $.01 par value per
share (the "Common Stock"). Upon amendment to this Articles to read as herein
set forth, each six (6) shares of outstanding Common Stock is converted into
and reconstituted as one (1) share of Common Stock."

EXHIBIT B

PROPOSED COMMON STOCK AMENDMENT TO
THE CERTIFICATE OF INCORPORATION OF
THE NATIONAL REGISTRY INC.

ARTICLE FOUR of the Certificate of Incorporation is amended by replacing
the reference to "76,000,000 shares " with "26,000,000 shares and the reference
to "75,000,000 shares of Common Stock" with "25,000,000 shares of Common Stock"

THE NATIONAL REGISTRY INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS--MAY 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE NATIONAL
REGISTRY INC.
The undersigned hereby appoints Jeffrey P. Anthony and John L. Gustafson
and each of them, with full power of substitution, as proxies and with all
powers the undersigned would possess if personally present, to vote all of the
shares of Common Stock, $.01 par value per share (the "Common Stock"), of The
National Registry Inc. (the "Company") that the undersigned is entitled to vote
at the Annual Meeting of Stockholders of the Company to be held at 10:00 a.m.,
local time on Tuesday, May 12, 1998, and any adjournments or postponements
thereof, at 333 South Franklin Street, Meeting Room 4, Tampa, Florida 33602, as
directed herein upon the matters set forth below and on the reverse side hereof
and described in the accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement and upon such other matters as may properly be brought before
such meeting according to their sole discretion.
(1) Election of eight Directors for a one-year term:

[ ] VOTE FOR all listed Nominees [ ] WITHHOLD AUTHORITY to vote
except as indicated listed for all nominees

To withhold authority to vote for any individual nominee, write that nominee's
name on the line below:

NOMINEES: Jeffrey P. Anthony J. Anthony Forstmann John L. Gustafson Francis R. Santangelo
Frank M. Devine Donald C. Klosterman Don M. Lyle Robert J. Rosenblatt

- --------------------------------------------------------------------------------
(2) Approval of the Reverse Split amendment to the Company's Certificate of
Incorporation:

[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Approve the decrease of authorized capital stock amendment to the Company's
Certificate of Incorporation. (This proposal is conditioned upon the
approval of proposal number 2):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Amendment to the Company's 1992 Stock Incentive Plan to increase from
4,700,000 to 15,000,000 (2,500,000 if proposal number 2 is approved) the
number of shares of Common Stock authorized for issuance thereunder:
[ ] FOR [ ] AGAINST [ ] ABSTAIN

(5) Ratification of appointment of Ernst & Young LLP as independent auditors
for the fiscal year ending December 31, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN

THE BOARD OF DIRECTORS OF THE NATIONAL REGISTRY INC. RECOMMENDS A VOTE FOR
PROPOSALS 1, 2, 3, 4 AND 5, EACH OF WHICH WERE PROPOSED BY THE BOARD OF
DIRECTORS OF THE NATIONAL REGISTRY INC.
(PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE)

Receipt of the Notice of Annual Meeting, the Proxy Statement and the 1997
Annual Report of the Company on Form 10-K is acknowledged.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL OF THE DIRECTORS LISTED IN PROPOSAL 1 AND
FOR PROPOSALS 2, 3, 4 AND 5. AS TO ANY OTHER MATTER COMING BEFORE THE MEETING,
EACH OF THE PERSONS AUTHORIZED AS PROXIES HEREWITH IS AUTHORIZED TO VOTE IN HIS
DISCRETION ON SUCH MATTER.

-----------------------------------------
Signature

-----------------------------------------
Date

-----------------------------------------
Signature

------------------------------------------
Date

Please date this card and sign your name
exactly as it appears on this Proxy. If the
Common Stock represented by this Proxy is
registered in the names of two or more persons,
each should sign this proxy. Persons signing in
a representative or fiduciary capacity and
corporate officers should add their full titles
as such.

PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.