<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
DBT ONLINE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
DBT ONLINE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 1998
The Annual Meeting of Shareholders of DBT Online, Inc. (the "Company") will
be held on Tuesday, May 12, 1998, at 9:00 a.m. at The Waldorf Astoria Hotel,
Conrad Suite, 301 Park Ave., New York, New York 10022 for the
following purposes:
1. To elect three Class II directors to hold office until their
term expires at the Annual Meeting of Shareholders in 2001 and until
their successors are duly elected and qualified.
2. To amend the Company's Amended and Restated Stock Option Plan
to increase the number of authorized shares from 3,000,000 to
6,000,000 shares available for issuance under the Plan.
3. To amend the Company's Amended and Restated Articles of
Incorporation to increase the authorized shares of Common Stock from
40,000,000 shares to 100,000,000 shares.
4. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company for 1998; and
5. To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 1, 1998, as
the record date for the meeting. Only shareholders of record at that time are
entitled to notice of and to vote at the meeting and any adjournments or
postponements thereof.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the attached proxy statement for further information with
respect to the business to be transacted at the meeting. The Board of Directors
urges you to date, sign and return the enclosed proxy promptly. You are
cordially invited to attend the meeting in person. The return of the enclosed
proxy will not affect your right to vote in person if you do attend the meeting.
J. Henry Muetterties
Secretary
April 15, 1998
<PAGE> 3
DBT ONLINE
PROXY STATEMENT
This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of DBT Online, Inc. (the
"Company") for use at the Company's Annual Meeting of Shareholders (the
"Meeting") for purposes set forth in the foregoing notice. This proxy statement,
the foregoing notice and the enclosed proxy are being sent to shareholders on or
about April 16, 1998.
The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice and does not know of
anyone else who intends to do so. If any other matters properly come before the
Meeting, however, the persons named in the enclosed proxy, or their duly
constituted substitutes acting at the Meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment on such matters. If the
enclosed proxy is properly executed and returned prior to voting at the Meeting,
the shares presented thereby will be voted in accordance with the instructions
marked thereon. In the absence of instruction, the shares will be voted "FOR"
the nominees of the Board of Directors in the election of the directors; "FOR"
the increase in the number of shares available for issuance under the Amended
and Restated Stock Option Plan; "FOR" the amendment to the Amended and Restated
Articles of Incorporation to increase in the number of authorized shares of
Common Stock to 100,000,000; "FOR" the ratification of the appointment of
Deloitte & Touche LLP as independent auditors for the fiscal year ending
December 31, 1998; and in the discretion of the persons named on the proxy with
respect to such other business as may properly come before the Meeting or any
adjournments or postponements thereof.
Any proxy may be revoked at any time prior to its exercise by notifying
the Secretary in writing at the Company's principal executive offices, by
delivering a duly executed proxy bearing a later date or by attending the
Meeting and voting in person. The Company's principal executive offices are
located 5550 W. Flamingo Road, Suite B-5, Las Vegas, Nevada 89103.
VOTING SECURITIES
At the close of business on April 1, 1998, the record date fixed for
the determination of shareholders entitled to notice of and to vote at the
Meeting, there were 18,465,418 outstanding shares of the Company's common stock
(the "Common Stock"), the only class of voting securities outstanding. Only the
record holders of the Common Stock at the close of business on the record date
will be entitled to vote. Each share of Common Stock is entitled to one vote,
without cumulation, on each matter to be voted upon at the Meeting.
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<PAGE> 4
VOTING AT THE MEETING
The presence at the Meeting, in person or by proxy, of the
holders of a majority of the voting power of the Common Stock outstanding and
entitled to vote shall constitute a quorum. Directors are to be elected at the
Meeting by a plurality of the votes cast by holders of Common Stock present in
person or represented by proxy at the Meeting and entitled to vote. The
affirmative vote of the majority of the votes cast at the Meeting by the holders
of Common Stock will be required for approval of all other matters to be acted
upon at the Meeting. For purposes of determining the votes cast with respect to
any matter presented for consideration at the Meeting, only those votes cast
"FOR" or "AGAINST" are included. Abstentions and broker non-votes (which are
described below) will be counted solely for the purpose of determining whether a
quorum is present. Abstentions and broker non-votes will not be deemed to be
cast either "FOR" or "AGAINST" the matters to be acted upon at the Meeting.
Therefore, abstentions and broker non-votes will have no effect on the approval
of the matters to be acted upon at the Meeting. Broker non-votes result when
brokers who hold shares in street name for customers who are the beneficial
owners of such shares are prohibited under applicable rules of the New York
Stock Exchange from giving a proxy to vote such customers' shares with respect
to the approval of certain matters without specific instructions from such
customers.
THE COMPANY
The Company is a holding company with businesses that serve
the electronic information and patent enforcement industries. Its electronic
information businesses are on-line providers of integrated database services and
related reports primarily to law enforcement and other governmental agencies,
law firms, insurance companies and licensed investigation companies. Its patent
enforcement business is engaged in the exploitation and enforcement of two laser
patents and generates its revenues through patent royalties. The Company was
formed in August 1996 by the merger of Database Technologies, Inc. ("DBT") and
Patlex Corporation ("Patlex").
ELECTION OF DIRECTORS
The Board is divided into three classes of directors. The Bylaws of the
Company provide that at each annual meeting of shareholders directors shall be
chosen by class for a term of three years, or for such shorter term as the
shareholders may specify to preserve, as evenly as practicable, the division of
directors into classes. Three directors are to be elected at the Meeting, to
hold office until the annual meeting of shareholders in 2001.
At the Meeting, the shareholders will elect three Class II directors to
hold office, subject to the provisions of the Bylaws, until their term expires
at the annual meeting of shareholders in 2001 and until their respective
successors shall have been duly elected and qualified. The current term of the
present Class II directors is expiring at the Meeting.
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<PAGE> 5
The Class II directors are to be elected at the Meeting by a plurality
of the votes cast by the holders of the Common Stock present, in person or
represented by proxy, and entitled to vote at the Meeting. Shares of Common
Stock held by shareholders present in person at the Meeting that are not voted
for a nominee or shares held by shareholders represented at the Meeting by proxy
from which authority to vote for a nominee has been properly withheld (including
broker non-votes) will not affect the election of the nominees receiving the
plurality of votes. UNLESS CONTRARY INSTRUCTIONS ARE GIVEN, THE PERSONS NAMED IN
THE ENCLOSED PROXY OR THEIR SUBSTITUTES WILL VOTE FOR THE ELECTION OF THE
NOMINEES NAMED BELOW.
The Board of Directors believes that the nominees are willing to serve
as directors. If a nominee at the time of his election is unable or unwilling to
serve or is otherwise unavailable for election, and as a result another nominee
is designated, the persons named in the enclosed proxy or their substitutes will
have discretion and authority to vote or to refrain from voting for such other
nominee in accordance with their judgment.
The nominees for election as Class II directors and the directors whose
terms of office continue after the Meeting, together with their ages as of the
Meeting and certain information about them, are as follows:
NAME CLASS OF DIRECTOR AGE
---- ----------------- ---
NOMINEES FOR TERM
EXPIRING IN 2001
Frank Borman II 70
Jack Hight II 73
Andrall E. Pearson II 72
CONTINUING DIRECTORS WHOSE
TERM EXPIRES IN 1999
Hank Asher III 47
Gary E. Erlbaum III 53
Bernard Marcus III 69
CONTINUING DIRECTORS WHOSE
TERM EXPIRES IN 2000
Kenneth G. Langone I 62
Charles A. Lieppe I 53
Eugene L. Step I 69
Sari Zalcberg I 44
FRANK BORMAN has been Chairman of the Company since August 1996, and
President of Patlex since 1988. From September 1995 until August 1996, he also
served as Chief Executive Officer and a director of Patlex. He served as
Chairman and Chief Executive Officer of Patlex from 1988 to December 1992, and
as Chairman of AutoFinance Group, Inc. ("AFG") from December 1992 to September
1995, during the period that Patlex was a subsidiary of AFG. He served as Vice
Chairman of the Board of Directors at Texas Air Corporation from 1986 to 1991.
From 1969 to
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<PAGE> 6
1986, he served in various capacities for Eastern Airlines, including President,
Chief Executive Officer and Chairman of the Board of Directors. Mr. Borman
served in the United States Air Force from 1950 to 1970. Mr. Borman currently
serves as a director of The Home Depot, Inc., Thermo Instruments Systems and
American Superconductor Corporation and is also a member of the Board of
Trustees of the National Geographic Society.
JACK HIGHT has been a director of the Company since August 1996, and
was Chairman of the Board of DBT from 1995 to August 1996. Since 1981, Mr. Hight
has held various positions at Intec Systems, Inc., which he founded, including
his current position of Chief Financial Officer and Chairman of the Board. From
1978 to 1980, he was Chairman of the Board, Chief Executive Officer and
President of Information Science, Inc., a public company. In the 1960s, Mr.
Hight co-founded and was President of Electronic Data Systems Federal
Corporation before it merged with Electronic Data Systems Corporation in 1968.
ANDRALL E. PEARSON became a director of the Company in June 1997. Since
June 1997, Mr. Pearson has been Chairman and Chief Executive Officer for Tricon
Global Restaurants, Inc. Prior to joining Tricon Global Restaurants he served as
Principal for Clayton, Dubilier & Rice, Inc., a management buy-out firm in New
York, specializing in leveraged acquisitions involving management participation
of large USA corporations. From 1985 until June 1993, he was the Class of 1958
Professor of Business Administration at Harvard Business School (HBS). Prior to
joining HBS, Mr. Pearson spent 15 years at PepsiCo, Inc. - 14 years as President
and Chief Operating Officer. Mr. Pearson joined PepsiCo from McKinsey & Co.,
where he rose from associate to director. Mr. Pearson serves as a director of
Alliant Foodservice, Inc. (formerly Kraft Food Services), Kinko's, The May
Department Stores Company, Lexmark, Inc., and Travelers Group Inc. He is also a
trustee of the New York University Medical Center and the Good Samaritan Medical
Center in Palm Beach, Florida.
HANK ASHER has been a director of the Company since August 1996, and
was President and Chief Executive Officer of the Company from August 1996 to
August 1997. He has been the President, Chief Executive Officer and a director
of DBT since he founded the company in 1992. Prior to founding DBT, Mr. Asher
performed contract programming services for various computer companies.
GARY E. ERLBAUM has been a director of the Company since August 1996,
and was a director of Patlex from September 1995 to August 1996. He has been
involved with Patlex since May 1972, serving as a Patlex director from 1983 to
December 1992, and as a director of AFG from December 1992 to September 1995,
during the period that Patlex was a subsidiary of AFG. Mr. Erlbaum served as the
Chairman of the Board of Directors of Patlex from September 1977 to July 1981
and from October 1981 to February 1983, and served as the President of Patlex
from May 1972 to September 1977 and from December 1978 to July 1981. Since 1983,
he has been the President of Greentree Properties Corporation, which is engaged
in real estate and business ventures. He is also a director of several privately
owned companies.
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<PAGE> 7
BERNARD MARCUS became a director of the Company in October 1997. Mr.
Marcus is one of the co-founders of The Home Depot, Inc. and has been its
Chairman of the Board of Directors and Chief Executive Officer since its
inception in 1978. He also serves on the Board of Directors of National Service
Industries, Inc., Westfield America, Inc. and the New York Stock Exchange, Inc.
Mr. Marcus also serves on the Board of the National Foundation for the Centers
for Disease Control and Prevention and is Chairman of the Board of The Marcus
Center, which provides support services for persons with developmental
disabilities and their families. In addition, he is a member of the Advisory
Board and Board of Directors of the Shepherd Center in Atlanta, Georgia and Vice
President and member of the Board of The City of Hope, a charitable organization
in Duarte, California.
KENNETH G. LANGONE has been a director of the Company since August
1996, and was a director of Patlex from September 1995 to August 1996. He has
been involved with Patlex since 1979, serving as a Patlex director from 1979 to
December 1992, and as a director of AutoFinance Group, Inc. ("AFG") from
December 1992 to September 1995, during the period that Patlex was a subsidiary
of AFG. Since 1974, Mr. Langone has been Chairman of the Board, Chief Executive
Officer and President of Invemed Associates, Inc. ("Invemed"), a New York Stock
Exchange member firm engaged in investment banking and brokerage. He is one of
the co-founders of The Home Depot, Inc. and has been a director of that company
since 1978. He also serves as a director of the New York Stock Exchange, Inc.,
The Home Depot, Inc., Unifi, Inc. and Tricon Global Restaurants, Inc. He is also
a director of several private corporations.
CHARLES A. LIEPPE was elected President and Chief Executive Officer of
the Company in August 1997, and a member of the Board of Directors. From April
1996 through February 1997, Mr. Lieppe was President and Chief Executive Officer
of Nabisco International. From 1991 through November 1995, Mr. Lieppe was
President and Chief Executive Officer of Berol Corporation, an international
consumer products company.
EUGENE L. STEP became a director of the Company in March 1997. From
1973 to 1992, Mr. Step served in various senior management positions with Eli
Lilly & Co., most recently as Executive Vice President, President of the
Pharmaceutical Division and a member of the Board of Directors and its Executive
Committee. Mr. Step is a past Chairman of the Board of the Pharmaceutical
Manufacturers Association and a past President of the International Federation
of Pharmaceutical Manufacturers Association. Mr. Step also serves as a director
of Cell Genesys, Inc., Scios, Inc., Medco, Inc., Pathogenesis, Inc. and Guidant
Corp.
SARI ZALCBERG has been a director of the Company since August 1996, and
was a director of DBT from 1995 to August 1996. She is the Chief Executive
Officer and sole shareholder of La Grande Trunk, Inc., a retail concern with
locations in two states. Ms. Zalcberg is also a member of the Regional Board of
Directors of the Valparaiso Banking Center of Bank One Merrillville, N.A., an
Indiana chartered bank.
Hank Asher and Sari Zalcberg are siblings.
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<PAGE> 8
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
serving on the Board of Directors. During 1997, non-employee directors of the
Company received annual compensation of $16,000 and $1,000 for each meeting of
the Board of Directors attended, up to a maximum annual compensation of $20,000.
All directors are reimbursed for expenses associated with the attendance of the
Board of Directors' meetings.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
There were seven meetings of the Board of Directors of the Company
during the year ended December 31, 1997. No director for the full fiscal year
attended less than 75% of the meetings of the Board or of the Committees of the
Board of which they were a member.
The Board of Directors has the following committees:
<TABLE>
<CAPTION>
COMMITTEE MEMBERSHIP
--------- ----------
<S> <C>
Executive Committee. . . . . . . . . . . . . . . . .Messrs. Asher, Borman, Erlbaum,
Hight, Langone, and Lieppe
Audit Committee. . . . . . . . . . . . . . . . . . .Messrs. Erlbaum, Hight, and Ms. Zalcberg
Compensation Committee. . . . . . . . . . . . . . . Messrs. Langone and Step
Nominating Committee. . . . . . . . . . . . . . . . Messrs. Asher, Borman,
Erlbaum, Hight,
Langone, Lieppe, Marcus, Pearson,
Step and Ms. Zalcberg
Stock Option Plan Administration Committee. . . . . Messrs. Erlbaum and Hight
</TABLE>
The Executive Committee is authorized to approve certain actions by the
Company. The Audit Committee is charged with the responsibility of reviewing the
Company's accounting policies, practices and controls. The Audit Committee is
also responsible for making recommendations to the Board of Directors regarding
the selection of independent auditors and for reviewing the results and scope of
audits and other services provided by the Company's independent auditors. The
Compensation Committee reviews the compensation policies of the Company. The
Stock Option Plan Administration Committee administers the Company's Amended and
Restated Stock Option Plan. The Nominating Committee identifies and reviews the
qualifications of candidates to serve on the Board of Directors. The Board of
Directors has no formal procedure for receiving recommendations from
shareholders regarding potential nominees. The Board of Directors will consider
recommendations from shareholders regarding potential nominees, when and if such
recommendations are submitted. During 1997, the Executive Committee, the
Compensation Committee, and the Audit Committee had one meeting each. The
Nominating Committee and the Stock Option Plan Administration Committee did not
have a formal meeting during 1997, however, the Stock Option Plan Administration
Committee took action by unanimous written consent on a number of occasions.
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<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth compensation information concerning the chief
executive officer and the most highly compensated executive officers of the
Company for the fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION OTHER SECURITIES
------------------- ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
- --------------------------- ------------------- ----- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CHARLES A. LIEPPE (3) 1997 $ 81,731 $ 14,000 $ * 600,000 0
President & Chief Executive
Officer
HANK ASHER (4) 1997 $200,156 $119,438 * 0 0
Founder 1996 110,000 0 * 0 0
FRANK BORMAN 1997 $160,000 0 * 0 $ 6,369
Chairman of the Board 1996 145,000 0 * 0 7,569
1995 140,000 0 * 100,000 4,867
TIMOTHY M. LEONARD (5) 1997 $115,782 $ 53,907 * 95,000 $ 1,954
Vice President, Finance,
Treasurer & Chief Financial
Officer
GEORGE A. BRUDER JR (6) 1997 $106,428 $ 25,480 * 35,000 $ 1,848
Senior Vice President,
Operations
J. HENRY MUETTERTIES 1997 $120,720 $ 25,763 $ 38,892 0 $ 3,942
Vice President and Secretary 1996 113,923 35,199 53,202 0 5,393
1995 105,330 21,944 19,091 20,000 4,249
THOMAS L. SIMPSON (7) 1997 $156,960 $107,161 * 170,000 $ 2,224
Chief Operating Officer
</TABLE>
* Value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
the executive officer.
(1) For fiscal year 1997, includes amounts contributed to Patlex's Deferred
Compensation Plan for Mr. Muetterties, $21,972 and $16,920 paid to Mr.
Muetterties for certain costs in connection with employment by Patlex and
relocation to Las Vegas, Nevada.
(2) For fiscal year 1997, includes amounts received as company matching
contributions under DBT Online, Inc's 401(k) savings plan by Mr. Borman
($3,200), Mr. Leonard ($1,954), Mr. Bruder ($1,848), Mr. Simpson ($2,224)
and Mr. Muetterties ($3,413), and amounts paid by Patlex for life insurance
premiums for Mr. Borman ($3,169), and Mr. Muetterties ($529).
(3) Mr. Lieppe joined the Company in August 1997.
(4) Mr. Asher served as President and Chief Executive Officer until August 20,
1997.
(5) Mr. Leonard joined the Company in January 1997.
(6) Mr. Bruder became an executive officer in November 1997.
(7) Mr. Simpson was Chief Operating Officer until November 25, 1997.
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<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table contains information concerning the exercise of
stock options during fiscal year 1997 to each of the executive officers named in
the Summary Compensation Table. No stock appreciation rights were granted during
fiscal year 1997.
<TABLE>
<CAPTION>
NUMBER
SECURITIES UNDERLYING VALUE OF UNEXERCISED
OPTIONS/SAR'S IN-THE-MONEY
HELD AT FISCAL OPTIONS AT FISCAL
SHARES YEAR END (#) YEAR END($)
ACQUIRED ON VALUE -------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Lieppe.................... -- 162,500 437,500 $213,281 $ 574,219
Hank Asher........................... -- -- -- -- --
Frank Borman......................... 7,500 $176,250 192,500 -- $4,342,319 --
Timothy M. Leonard................... -- 25,000 70,000 $ 223,438 $ 498,025
George A. Bruder, Jr................. -- 5,000 45,000 $ 14,688 $ 154,588
J. Henry Muetterties................. 2,000 $ 46,250 38,000 -- $ 857,185 --
Thomas L. Simpson.................... --- 50,000 31,667 $ 415,625 $ 224,897
</TABLE>
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<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning grants of stock
options made during fiscal year 1997 to each of the executive officers named in
the Summary Compensation Table. No stock appreciation rights were granted during
fiscal year 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------- ---------------------------
Number of Percent of total
securities options/SARs Exercise
underlying granted to or base
options/SARs employees in price Expiration 5% 10%
Name granted (#) fiscal year ($/Sh) date ($) ($)
- ---- ------------- ---------------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Charles A. Lieppe 600,000 44% $23.63 August 20, 2007 $7,816,731 $19,252,982
Hank Asher -- -- -- -- -- --
Frank Borman -- -- -- -- -- --
Timothy M. Leonard 75,000 5% $16.00 January 13, 2007 $661,594 $1,629,537
20,000 1% 22.38 June 4, 2007 246,775 607,817
George A. Bruder Jr. 15,000 1% $22.00 February 18, 2007 $165,398 $407,384
20,000 1% 22.38 June 4, 2007 246,775 607,817
J. Henry Muetterties -- -- -- -- -- --
Thomas L. Simpson 150,000 10% $16.63 January 20, 2007 $687,644 $1,693,700
20,000 1% 22.38 June 4, 2007 246,775 607,817
</TABLE>
EMPLOYMENT AGREEMENTS
In August 1997, the Company entered into an employment agreement with
Mr. Lieppe, which provides for a four-year term commencing August 15, 1997 and
ending on August 14, 2001, unless terminated earlier in accordance with certain
circumstances. The 1997 current annual compensation rate for Mr. Lieppe was
$250,000.
In April 1997, The Company entered into an employment agreement with
Mr. Borman, which provided for an initial three-year term commencing on April 1,
1997 with automatic one-year extensions on the anniversary of the commencement
date, unless either the Company or Mr. Borman gives notice to the other that the
term of the agreement will not be extended. The employment agreement contains
certain restrictive covenants, including provisions relating to noncompetition,
nonsolicitation and the nondisclosure of proprietary information, during the
executive's employment with the Company and for specified periods thereafter.
The 1997 annual compensation rate for Mr. Borman was $160,000.
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<PAGE> 12
During 1992, Patlex entered into an employment agreement with Mr.
Muetterties. The agreement has been extended through December 1999. The current
annual compensation rate for Mr. Muetterties is $123,664. Mr. Muetterties is
entitled to a minimum annual bonus of $10,000 and other incentive compensation.
The employment agreement contains certain restrictive covenants, including
provisions relating to noncompetition, nonsolicitation and the nondisclosure of
proprietary information, during the relevant executive's employment with the
Company and for specified periods thereafter.
THE FOLLOWING COMPENSATION COMMITTEE REPORT AND THE STOCK PERFORMANCE
GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT
INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for implementing and
administering the Company's compensation policies and programs for its executive
officers. This includes setting the base salaries and the total compensation
levels of the Chief Executive Officer (the "CEO") and the other executive
officers of the Company. In addition, the Compensation Committee is responsible
for setting the performance criteria for bonus awards and determining the
achievement levels and payout for the executive officers.
COMPENSATION PHILOSOPHY
The Company's compensation policies for executive officers, as
established by the Compensation Committee, are designed to (a) provide
competitive compensation packages that will attract and retain talented
executive officers, (b) link compensation to financial and operating results, so
as to reward successful performance, and (c) provide long-term equity
compensation, to further align the interests of executive officers with those of
shareholders and further reward successful performance. The principal components
of the Company's executive officer compensation program are base salary, bonus
awards and grants of stock options.
ANNUAL COMPENSATION
Annual cash compensation is comprised of base salary and bonus awards.
Salary determinations have not been based upon any specific criteria. The salary
levels of executive officers of the Company that were hired in 1997 were
established at the time the executives were hired. The Compensation Committee
approved the compensation levels of the newly hired executives taking into
consideration the Company's objective of attracting outstanding executives to
join a relatively young and growing corporation. The salary levels of certain
other executive officers of the Company for 1997 were based on established
levels set by employment contracts entered into by the executive officers with
Patlex in 1991 and 1992.
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<PAGE> 13
Bonus awards made to executive officers in 1997 were based in part on
established minimums set by their employment agreements and in part upon the
Company's achievement of performance targets. The Compensation Committee also
took into consideration the leadership provided by the Company's executive
officers in managing the Company's growth in 1997 and successfully completing a
substantial public offering of the Company's stock.
LONG-TERM COMPENSATION
The Compensation Committee believes that stock options are an important
component of compensation for executive officers of the Company because it
closely aligns the interests of management with those of the shareholders. Stock
options also provide an attractive compensation incentive in hiring new
executive officers. This policy of the Compensation Committee is carried out for
the Company by the Stock Option Plan Administration Committee, which has the
discretion to grant stock options to executive officers. The number of options
in each grant is not based on any specific criteria, but the Committee did
consider primarily the executive's position, skills and achievements.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Hank Asher was the CEO of the Company from August 1996 to August 1997.
His salary level of $195,000 for 1997 was established by the Company. He
received a bonus of $119,438 for 1997. He received no options in 1997.
Charles A. Lieppe was named President and Chief Executive Officer of
the Company on August 25, 1997. His salary level of $250,000 for 1997 was
established by the Board of the Company. He received a bonus of $14,000 for
1997. Mr. Lieppe also received stock options of 600,000 during 1997. Mr.
Lieppe's compensation for the period he was employed in 1997 was substantially
based upon the terms of the employment agreement that was entered into when he
joined the Company in August 1997.
DEDUCTIBILITY OF CERTAIN COMPENSATION
Section 162(m) of the Internal Revenue Code generally denies a federal
income tax deduction for certain compensation exceeding $1,000,000 paid to the
CEO or any of the four other highest paid executive officers, excluding (among
other things) certain performance-based compensation. Through December 31, 1997,
this provision has not affected the Company's tax deductions, but the
Compensation Committee will continue to monitor the potential impact of section
162(m) on the Company's ability to deduct executive compensation.
COMPENSATION COMMITTEE
Kenneth G. Langone, Chairman
Eugene L. Step
11
<PAGE> 14
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total shareholder return of (i) the
S&P Stock Market (U.S.) Index (the "S&P Index"), and (ii) a "peer group" index,
assuming an investment of $100 on September 28, 1995 in each of the Common Stock
of the Company, the stocks comprising the S&P Index and the stocks comprising
the "peer group," and further assuming reinvestment of dividends. The "peer
group" consists of Acxiom Corporation, American Business Information, Inc.
and Equifax Inc.
The graph commences on September 28, 1995, the date that the Patlex
Common Stock began trading publicly. From September 28, 1995 and until March 17,
1996, the Patlex Common Stock was listed on the Nasdaq Small-Cap Market. From
March 18, 1996 until August 19, 1996, the Patlex Common Stock was listed on the
Nasdaq National Market. The Company's Common Stock was traded on the Nasdaq
National Market from August 20, 1996 until it began trading on the New York
Stock Exchange on September 17, 1997.
COMPARISON OF CUMULATIVE RETURN
The Company, S&P Index and Peer Group Index
(From September 28, 1995 to December 21, 1997)
12
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Invemed Associates, Inc. ("Invemed"), from time to time, has provided
financial advisory services to the Company, for which customary compensation has
been received. In connection with the Company's offering of 1,940,000 shares of
Common Stock in May, 1997, Invemed performed certain investment banking services
to the Company for which Invemed received fees of approximately $2,706,000. In
connection with the September 1995 merger between AFG and KeyCorp and the
related spin-off of Patlex, Invemed provided certain financial advisory services
to AFG for which Invemed received fees of approximately $2,470,000. Kenneth G.
Langone, a director and shareholder of the Company, is Chairman of the Board,
Chief Executive Officer and President of Invemed, and is the principal
shareholder of Invemed's parent.
On February 7, 1994, DBT entered into a debt and royalty agreement with
a consortium of seven individuals including Jack Hight. During 1995, Mr. Hight
became a shareholder and director of DBT. The agreement provided the financing
necessary for DBT to enter the Texas market. The agreement provided for a loan
to DBT of $200,000, which was repaid in 1995. The agreement also provided for
DBT to grant to the consortium a royalty to share in the revenues of the Texas
expansion up to $800,000, computed as 10% of specified revenues from Texas
operations. Through December 31, 1997, the Company had paid $121,218 relating to
such royalties.
13
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information with respect to beneficial
ownership of the Common Stock as of March 16, 1998 (i) by each person who
beneficially owns more than 5% of the outstanding shares of the Common Stock,
(ii) by each of the Company's executive officers and directors, and (iii) by all
of the executive officers and directors of the Company as a group. Unless
otherwise noted, each person named in the table has sole voting and investment
power as to shares shown.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT
NAMES OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------- ------------------ --------
<S> <C> <C>
Hank Asher(1) ............................... 4,535,658 24.6%
Frank Borman(2) ............................. 200,000 1.1
George A. Bruder, Jr(3) ..................... 5,000 *
Gary E. Erlbaum(4) .......................... 514,484 2.7
Jack Hight(5) ............................... 165,002 *
Thomas J. Hoolihan .......................... 400 *
Charles A. Lieppe(6) ........................ 164,500 *
Kenneth G. Langone(7) ....................... 1,870,200 10.0
Timothy M. Leonard(8) ....................... 25,000 *
Bernard Marcus .............................. 57,942 *
J. Henry Muetterties ........................ 49,820 *
Andrall E. Pearson .......................... -0- *
Eugene L. Step .............................. 10,000 *
Sari Zalcberg ............................... 60,000 *
Charles A. Asher(10) ........................ 1,563,008 8.5
Soros Fund Management LLC(11) ............... 1,778,106 9.2
The Equitable Companies Incorporated(12) .... 1,151,600 6.0
All Officers and Directors
As a Group (14 Persons)(13) .............. 7,658,006 39.7
</TABLE>
- ----------
* Less than 1%
(1) The address of this shareholder is c/o Database Technologies, Inc. 100 E.
Sample Road, Suite 200, Pompano Beach, FL 33064.
(2) Includes 157,895 shares issuable pursuant to stock options currently
exercisable.
(3) Includes 5,000 shares issuable pursuant to stock options currently
exercisable.
(4) Includes (i) 29,420 shares owned by SPSP Corporation of which Mr. Erlbaum
is a director, President and 36.7% shareholder, (ii) 3,750 shares held by
trusts for which Mr. Erlbaum serves as trustee or co-trustee, (iii) 228,960
shares owned by Erlbaum Family L.P., of which Mr. Erlbaum is President of
the general partner, (iv) 2,922 shares owned by Mr. Erlbaum's son, and (v)
200,000 shares issuable upon exercise of presently exercisable options.
(5) Includes (i) 5,000 shares owned by Mr. Hight's wife and (ii) 50,000 shares
issuable upon exercise of presently exercisable options.
(6) Includes 162,500 shares issuable pursuant to stock options currently
exercisable.
14
<PAGE> 17
(7) Includes 900,000 shares owned by Invemed Associates, Inc., 200 shares owned
by his spouse and 200,000 shares issuable upon exercise of presently
exercisable options. Mr. Langone is Chairman of the Board, Chief Executive
Officer and President of Invemed and the principal shareholder of Invemed's
parent corporation. The address of this shareholder is c/o Database
Technologies, Inc., 100 E. Sample Road, Suite 200, Pompano Beach, FL 33064.
(8) Includes 25,000 shares issuable pursuant to stock options currently
exercisable.
(9) Includes 10,000 shares issuable pursuant to stock options currently
exercisable.
(10) The address of Charles A. Asher is 400 Trigon Building, 224 W. Jefferson
Way, South Bend, IN 46601.
(11) Per schedule13G filed with the Securities and Exchange Commission on March
6, 1998 on behalf of Soros Fund Management LLC, George Soros, Stanley F.
Druckenmiller, and Duquense Capital Management L.L.C.
(12) Per schedule13G filed with the Securities and Exchange Commission on
February 10, 1998.
(13) Includes 843,395 shares issuable pursuant to stock options currently
exercisable.
SECTION 16(A) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon the Company's review of Forms 3, 4 and 5 and on amendments
thereto furnished to the Company pursuant to Section 16 of the Exchange Act,
such forms were filed on a timely basis by each reporting person.
PROPOSED AMENDMENT TO THE AMENDED AND RESTATED
STOCK OPTION PLAN
PROPOSED AMENDMENTS
The Amended and Restated Stock Option Plan (the "Plan") originally
received board approval in March 1995 and shareholder approval in September
1995. On August 20, 1996, the Plan was amended and restated to, among other
things, (i) increase the number of authorized shares thereunder from 1,200,000
to 1,800,000 shares available for issuance under the Plan, (ii) amend the
provisions regarding administration of the Plan and (iii) amend the provisions
regarding treatment of option holders upon a change of control. The Plan was
amended to increase the number of authorized shares thereunder from 1,800,000 to
3,000,000 in May, 1997. The purpose of the Plan is to recognize the
contributions made to the Company and its subsidiaries by its employees and
certain consultants or advisors, to provide these individuals with additional
incentives to devote themselves to the Company's future success and to improve
the Company's ability to attract, retain and motivate individuals upon whom the
Company's sustained growth and financial success depend. The Plan is also
intended as an additional incentive to directors who are not employees of the
Company to serve on the Board of Directors and to devote themselves to the
future success of the Company.
The Plan provides for the grant of options to purchase Common Stock to
be made to employees, officers, directors and independent contractors of the
Company and its subsidiaries. The Plan is intended to assist the Company and its
subsidiaries in attracting, retaining and motivating employees, officers,
directors and independent contractors of particular merit.
15
<PAGE> 18
The Board of Directors approved, subject to shareholder approval; an
amendment to the Plan to increase the number of authorized shares thereunder
from 3,000,000 to 6,000,000 shares available for issuance under the Plan.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes cast by
the holders of the Common Stock present, in person or represented by proxy, and
entitled to vote at the Meeting is required to approve the amendment to the
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO THE PLAN.
DESCRIPTION OF THE PLAN
OPTIONS. The Plan provides for the grant of incentive stock options
("ISOs") to officers and employees of the Company and its subsidiaries and
nonqualified stock options ("NQSOs") to officers, employees (including employees
who are also directors) and key advisors, such as consultants, independent
contractors and principals of organizations involved with the Company.
ADMINISTRATION. The Plan is administered by a committee (the
"Committee"), consisting of not less than two persons appointed by the Board of
Directors, all of whom must be "disinterested persons" as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended and "outside directors" as
defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). The Committee has the authority to administer and interpret the Plan as
well as the authority to determine (i) the individuals to whom options are
granted, (ii) the type, size and terms of the options, (iii) the timing of
grants and the duration of the exercise period, and (iv) any other matters
arising under the Plan.
SHARES SUBJECT TO THE PLAN. The aggregate number of shares of common
stock that have been or may be issued or transferred under the Plan is 3,000,000
shares and, if the amendment to the Plan is approved by shareholders, will be
6,000,000. Under the Plan, the maximum number of shares that may be granted to
any one individual during any calendar year shall be 750,000 shares.
TERMS OF OPTION GRANTS. Under the Plan, the Committee has full
discretion to determine the term, exercisability (vesting), and price of options
granted under the Plan. The Committee also has the authority to accelerate
exercisability (vesting) of options granted under the Plan. The option price for
ISOs, however, must be equal to or greater than the "fair market value" of the
stock on the date of grant. NQSOs may be issued at a price that is greater than,
equal to or less than the fair market value. The Plan limits the minimum option
price of NQSOs to 85% of the fair market value of the stock on the date of
grant.
16
<PAGE> 19
CORPORATE TRANSACTIONS. Upon a change of control, which is defined in
the Plan to include a change of control in the beneficial ownership of 40% or
more of the voting power of the Company, the commencement or announcement of an
intention to commence a tender offer for 40% or more of the voting power of the
Company, a sale or exchange of substantially all its assets, dissolution or
liquidation, or a merger or consolidation where the company does not survive,
all outstanding options will accelerate automatically and become exercisable.
Upon a change of control where the Company does not survive, all outstanding
stock options shall be assumed or replaced with comparable options of the
surviving corporation. The Committee is responsible to determine the
comparability and its decision is final and binding. Notwithstanding the
foregoing, upon a change of control, the Committee may require option holders to
surrender their outstanding options for cash or Company stock.
FEDERAL INCOME TAX CONSEQUENCES
There are no federal income tax consequences to optionees or to the
Company upon the grant of an NQSO under the Plan. Upon the exercise of NQSOs,
optionees will recognize ordinary compensation income in an amount equal to the
excess of the fair market value of the shares at the time of exercise over the
exercise price of the NQSO, and the company generally will be entitled to a
corresponding federal income tax deduction. Upon the sale of shares of common
stock acquired by exercise of an NQSO, an optionee will have a capital gain or
loss (long-term or short-term depending upon the length of time the shares were
held) in an amount equal to the difference between the amount realized upon the
sale and the optionee's adjusted tax basis in the shares of common stock (the
exercise price plus the amount of ordinary income recognized by the optionee at
the time of exercise of the NQSO).
An optionee of an ISO will not recognize taxable income for purposes of
the regular income tax, upon either the grant or exercise of the ISO. However,
for purposes of the alternative minimum tax imposed under the Code, in the year
in which an ISO is exercised, the amount by which the fair market value of the
shares of common stock acquired upon exercise exceeds the stock option price
will be treated as an item of adjustment and included in the computation of the
recipient's alternative minimum taxable income in the year of exercise. An
optionee will recognize long-term capital gain or loss on a disposition of the
shares acquired upon exercise of an ISO provided that the optionee does not
dispose of such shares within two years from the date the ISO was granted and
within one year after such shares were transferred to him. If the optionee
satisfies the foregoing holding periods, then the company will not be allowed a
deduction by reason of the grant or exercise of the ISO. As a general rule, if
an optionee disposes of the shares acquired upon exercise of an ISO before
satisfying both holding period requirements (a "disqualifying disposition"), the
gain recognized on such a disposition will be taxed as ordinary income to the
extent of the difference between the fair market value of such shares on the
date of exercise and the option price, and the company will be entitled to a
deduction in that amount. The gain, if any, in excess of the amount recognized
as ordinary income on such a disqualifying disposition will be long-term or
short-term capital gain, depending upon the length of time the optionee held the
shares prior to the disposition.
17
<PAGE> 20
SECTION 162(m) OF THE CODE
Under section 162(m) of the Code, the Company may be precluded from
claiming a federal income tax deduction for total remuneration in excess of
$1,000,000 paid to the chief executive officer or to any of the other four most
highly compensated officers of a public company in any one year. An exception
does exist, however, for "performance-based compensation," including amounts
received upon the exercise of stock options pursuant to a plan approved by
shareholders that meets certain requirements. The Plan is intended to satisfy
these requirements. Options granted at below market value, however, will not
qualify as performance-based compensation for these purposes.
ACCOUNTING CONSEQUENCES
There is no charge to the income of the Company in connection with the
grant or exercise of an option under the Plan as long as the exercise price is
not below the market price on the date of grant, the number of shares is fixed
at the grant date, and vesting is not conditioned upon performance. Any tax
benefit received by the Company upon exercise of an NQSO or as a result of a
disqualifying disposition of option shares obtained upon exercise of an ISO is
reflected as a credit to capital in excess of par value and not as income.
Earnings per share may be affected by the Plan by the effect on the calculation,
as prescribed under generally accepted accounting principles, of the number of
outstanding shares of common stock. At the time shares are actually issued as a
result of the exercise of stock options, additional dilution of earnings per
share could result.
AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has approved an amendment to the Company's
Amended and Restated Articles of Incorporation to increase from 40,000,000 to
100,000,000 the number of shares of the Company's Common Stock authorized for
issuance, and directed that the amendment be submitted to a vote of shareholders
at the Meeting. The form of the proposed amendment is as follows:
THE FIRST SENTENCE OF ARTICLE 4 IS HEREBY AMENDED TO READ IN ITS
ENTIRETY AS FOLLOWS:
THE AGGREGATE NUMBER OF SHARES WHICH THE CORPORATION
SHALL HAVE AUTHORITY TO ISSUE IS 105,000,000 OF
WHICH 100,000,000 SHARES, PAR VALUE $.10 PER SHARE,
SHALL BE COMMON STOCK AND 5,000,000 SHARES, PAR VALUE
$.10 PER SHARE, SHALL BE PREFERRED STOCK.
18
<PAGE> 21
Article 4 of the Company's Amended and Restated Articles of
Incorporation as currently in effect authorizes the issuance of 40,000,000
shares of Common Stock. As of April 1, 1998, 18,465,418 shares of Common Stock
were issued and outstanding. Approximately 3,000,000 shares of Common Stock have
been reserved for issuance pursuant to the Company's stock option plan. The
shareholders are also being asked to approve at the Meeting and additional
3,000,000 share increase in the number of shares that may be issued upon
exercise of options granted under the Amended and Restated Stock Option Plan.
See "Proposed Amendment to the Amended and Restated Stock Option Plan". There
would be, therefore, approximately 15,538,769 shares of authorized Common Stock
available for future issuances by the Company. The Board of Directors believes
that it would be desirable to increase the number of shares of authorized Common
Stock to make available additional shares for possible stock splits,
acquisitions, financings, employee benefit plan issuances and for such other
corporate purposes as may arise. The Board of Directors believes that stock
splits enhance the liquidity and marketability of the Common Stock by increasing
the number of shares outstanding and lowering the price per share. In
furtherance thereof, the Board approved a 2-for-1 stock split in November 1997.
The Company has no specific plans currently calling for issuance of any
of the additional shares of Common Stock and is subject to certain restrictions
on its ability to issue additional shares of Common Stock. The rules of the New
York Stock Exchange currently require shareholder approval of issuances of
Common Stock under certain circumstances including those in which the number of
shares to be issued is equal to or exceeds 20% of the voting power outstanding
(or, currently, for the Company, issuance of more than approximately 3.69
million shares of Common Stock). In other instances, the issuance of additional
shares of authorized Common Stock would be within the discretion of the Board of
Directors, without the requirement of further action by shareholders. All newly
authorized shares would have the same rights as the presently authorized shares,
including the right to cast one vote per share and to participate in dividends
when and to the extent declared and paid. Under the Company's Amended and
Restated Articles of Incorporation, shareholders do not have preemptive rights.
While the issuance of shares in certain instances may have the effect of
forestalling a hostile takeover, the Board does not intend or view the increase
in authorized Common Stock as an anti-takeover measure, nor is the Company aware
of any proposed or contemplated transaction of this type. For example,
additional shares of Common Stock could be sold to persons, groups or entities
known to be favorable to management or the Board of Directors. The issuance of
additional shares of Common Stock, directly or as part of a so-called
shareholder rights plan (which the Company does not presently have), could also
be used to dilute the stock ownership of a person or entity seeking to obtain
control of the Company should the Board of Directors consider the action of such
person or entity not to be in the best interest of the shareholders and the
Company. The Board of Directors is not aware of any present effort by any person
or entity to accumulate the Company's securities or to obtain control of the
Company.
The affirmative vote of the majority of the votes cast by the holders
of shares of Common Stock present, in person or represented by proxy, at the
Meeting is required to
19
<PAGE> 22
approve the amendment to the Amended and Restated Articles of Incorporation to
increase the authorized Common Stock to 100,000,000 shares.
As soon as practicable after such affirmative vote has been taken, the
amendment will be filed with the Secretary of State of the Commonwealth of
Pennsylvania.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED
COMMON STOCK.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, on the recommendation of its Audit Committee,
has selected the firm of Deloitte & Touche LLP to serve as independent public
accountants for the Company for the current fiscal year. A representative of
Deloitte & Touche LLP is expected to be present at the Meeting and will have the
opportunity to make a statement if they desire to do so. The representatives are
also expected to be available to respond to appropriate questions.
The affirmative vote of a majority of the votes cast by the holders of
the shares of Common Stock present, in person or represented by proxy, at the
Meeting is required for ratification of the selection of Deloitte & Touche LLP
as the Company's independent public accountants for fiscal year 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE APPOINTMENT OF THE
AUDITORS.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual
Meeting of Shareholders in 1999 must be received by the Company by December 29,
1998 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that Meeting.
COST OF SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of the Boards of
Directors' proxies for the Meeting, including the cost of preparing, assembling
and mailing proxy material, the handling and tabulation of the proxies received
and charges of brokerage houses and other institutions, nominees and fiduciaries
such materials to beneficial owners. In addition to the mailing of the proxy
material, such solicitation may be made in person or by telephone or telegraph
by directors, officers or regular employees of the Company, or other persons who
may be engaged to perform soliciting activities.
20
<PAGE> 23
DBT ONLINE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Frank Borman and Thomas J. Hoolihan, and
each of them acting alone, with the power to appoint his substitute, proxy to
represent the undersigned and vote as designated below all of the shares of
Common Stock of DBT Online, Inc. held of record by the undersigned on April 1,
1998, at the Annual Meeting of Shareholders to be held on May 12, 1998 and at
any adjournments or postponements thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 24
DBT ONLINE, INC.
PLACE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. Approval of all three Class II For Withhold For All 2. Approval of the amendment to the For Against Abstain
nominees for the Company's All All Except Company's Amended and Restated Stock [ ] [ ] [ ]
Board of Directors as listed below, [ ] [ ] [ ] Option Plan to increase the number of
Nominees: Frank Borman, Common Stock authorized for issuance
Jack Hight and Andrall E. Pearson from 3,000,000 to 6,000,000.
-------------------------------------- 3. Approval of the amendment to the [ ] [ ] [ ]
(Except nominees written above) Company's Amended and Restated Articles
of Incorporation to increase the
Authorized shares of Common Stock from
40,000,000 shares to 100,000,000 shares.
4. Approval of Deloitte & Touche LLP as [ ] [ ] [ ]
the Independent auditors of the
Company for 1998.
5. In his discretion, the proxy is authorized to
vote upon such other matters as may properly come
before the meeting or any adjournments of postpone-
ments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
PROPOSAL 1, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3 AND "FOR"
PROPOSAL 4.
Date____________________, 1998
_______________________________________________________
Signature
_______________________________________________________
Signature if held jointly
Please sign exactly as name appears on the left. When
shares are held by joint tenants, both should sign. When
signing as attorney, executive, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign on the corporate name by
President or other authorized officer, if a partnership,
please sign in partnership name by authorized person.
</TABLE>
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
4047 - DBT Online, Inc.
