<PAGE> 1
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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
COMPUTER CONCEPTS CORP.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title 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
COMPUTER CONCEPTS CORP.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 23, 2000
------------------------
To our Stockholders:
An annual meeting of stockholders will be held at the Grand Hyatt New York,
109 East 42nd Street, New York, New York 10017 on Wednesday, August 23, 2000
beginning at 10:00 a.m. At the meeting, you will be asked to vote on the
following matters:
1. Election of four directors.
2. A proposal to amend our certificate of incorporation to change our name
to "Direct Insite Corp.", as set forth in Exhibit A.
3. Ratification of the appointment by the Board of Directors of Hays & Co.
as our independent certified public accountants for fiscal/calendar
year 2000.
4. Any other matters that properly come before the meeting.
The above matters are set forth in the proxy statement attached to this
notice to which your attention is directed.
If you are a stockholder of record at the close of business on July 17,
2000, you are entitled to vote at the meeting or at any adjournment or
postponement of the meeting. This notice and proxy statement are first being
mailed to stockholders on or about July 25, 2000.
By Order of the Board of Directors,
JAMES A. CANNAVINO
Chairman of the Board
Dated: July 25, 2000
Bohemia, New York
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING
PRE-ADDRESSED POSTAGE-PAID ENVELOPE AS DESCRIBED ON THE ENCLOSED PROXY CARD.
YOUR PROXY, GIVEN THROUGH THE RETURN OF THE ENCLOSED PROXY CARD, MAY BE REVOKED
PRIOR TO ITS EXERCISE BY FILING WITH OUR CORPORATE SECRETARY PRIOR TO THE
MEETING A WRITTEN NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER
DATE, OR BY ATTENDING THE MEETING, FILING A WRITTEN NOTICE OF REVOCATION WITH
THE SECRETARY OF THE MEETING AND VOTING IN PERSON.
<PAGE> 3
COMPUTER CONCEPTS CORP.
80 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, AUGUST 23, 2000
------------------------
Our Annual Meeting of Stockholders will be held on Wednesday, August 23,
2000 at the Grand Hyatt New York, 109 East 42nd Street, New York, New York 10017
at 10:00 a.m. This proxy statement contains information about the matters to be
considered at the meeting or any adjournments or postponements of the meeting.
ABOUT THE MEETING
WHAT IS BEING CONSIDERED AT THE MEETING?
You will be voting on the following:
- election of directors;
- a proposal to amend the Certificate of Incorporation to change our name;
and
- ratification of the appointment of independent certified public
accountants.
In addition, our management will report on our performance during fiscal 1999
and respond to your questions.
WHO IS ENTITLED TO VOTE AT THE MEETING?
You may vote if you owned stock as of the close of business on July 17,
2000. Each share of stock is entitled to one vote.
HOW DO I VOTE?
You can vote in two ways:
- by attending the meeting or
- by completing, signing and returning the enclosed proxy card.
CAN I CHANGE MY MIND AFTER I VOTE?
Yes, you may change your mind at any time before the vote is taken at the
meeting. You can do this by (1) signing another proxy with a later date and
returning it to us prior to the meeting or filing with our corporate secretary a
written notice revoking your proxy, or (2) voting again at the meeting.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT INCLUDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not include voting instructions
will be voted FOR the election of the nominee directors; FOR the proposal to
amend our certificate of incorporation to change our name and FOR the
appointment of our company's independent certified public accountants.
<PAGE> 4
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts with brokers and/or our transfer
agent. Please vote all of these shares. We recommend that you contact your
broker and/or our transfer agent to consolidate as many accounts as possible
under the same name and address. Our transfer agent is Manhattan Transfer
Registrar Company (631) 585-7341.
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
If you hold your shares directly in your own name, they will not be voted
if you do not provide a proxy. Your shares may be voted under certain
circumstances if they are held in the name of a brokerage firm. Brokerage firms
generally have the authority to vote customers' unvoted shares on certain
"routine" matters, including the election of directors. When a brokerage firm
votes its customer's unvoted shares, these shares are counted for purposes of
establishing a quorum. At our meeting these shares will be counted as voted by
the brokerage firm in the election of directors and appointment of auditors, but
will not be counted for all other matters to be voted on because these other
matters are not considered "routine" under the applicable rules.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
Your shares are counted as present at the meeting if you attend the meeting
and vote in person or if you properly return a proxy by mail. In order for us to
conduct our meeting, a majority of our outstanding shares as of July 17, 2000
must be present at the meeting. This is referred to as a quorum. On July 17,
2000, there were 22,168,338 shares outstanding and entitled to vote.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
The affirmative vote of a majority of the votes cast at the Annual Meeting
is required for approval of the election of directors and the appointment of our
independent certified public accountants. The affirmative vote of a majority of
the outstanding shares on the Record Date is required for the approval of the
amendment to the Certificate of Incorporation changing our name. A properly
executed proxy marked "ABSTAIN" with respect to any such matter will not be
voted, although it will be counted for purposes of determining whether there is
a quorum. Accordingly, an abstention will have the effect of a negative vote.
STOCK OWNERSHIP
The following information, including stock ownership, is submitted with
respect to our directors, each executive officer named in the "Summary
Compensation Table," for all executive officers and directors as a group, and,
based solely on filings with the Securities and Exchange Commission, except as
otherwise indicated, for each holder of more than five percent of our common
stock as of July 17, 2000.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY % OF OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED SHARES(2)
------------------------ ------------ ----------------
<S> <C> <C>
James A. Cannavino.......................................... -- --
Anthony Coppola(3)(9)....................................... 253,500 1.1%
George Aronson(3)(8)........................................ 403,000 1.8%
Charles Feld................................................ -- --
Dr. Dennis J. Murray........................................ -- --
Carla J. Stovall............................................ -- --
Daniel DelGiorno, Sr.(1)(3)(4)(5)........................... 458,100 2.1%
Daniel DelGiorno, Jr.(1)(3)(4)(6)........................... 618,100 2.8%
Russell Pellicano(1)(3)(7).................................. 216,500 1.0%
Bo-Tel LLC(3)(10)........................................... 2,220,000 10.0%
All Officers and Directors as a Group (6 persons)........... 656,500 3.0%
</TABLE>
2
<PAGE> 5
---------------
(1) Messrs. Daniel DelGiorno, Sr., Daniel DelGiorno, Jr. and Russell Pellicano
resigned as officers and directors in March 2000 as part of a
reorganization plan in which all of our directors resigned and a new board
of directors was appointed.
(2) Based upon 22,168,338 shares outstanding as of July 17, 2000, plus
outstanding options exercisable within 60 days owned by above named
parties.
(3) The address of the holder is 80 Orville Drive, Suite 200, Bohemia, New York
11716.
(4) Includes shares held by his spouse.
(5) Includes 258,100 options exercisable at $2.00 per share, and 200,000
options exercisable at $1.25 per share.
(6) Includes 418,100 options exercisable at $2.00 per share, and 200,000
options exercisable at $1.25 per share.
(7) Includes 35,000 options exercisable at $2.00 per share, 100,000 options
exercisable at $1.25 per share and 20,000 options exercisable at $2.09.
(8) Includes 150,000 options exercisable at $2.00 per share and 150,000 options
exercisable at $1.25 per share.
(9) Includes 105,250, 10,000, 500, 50,000 and 20,000 options at $2.00, $1.34,
$1.75, $1.25 and $2.09, respectively.
(10) Includes 320,000 shares of our common stock owned by a party which has a
financial interest in Internet Tracking & Security Ventures, LLC.
(11) Includes 500, 11,800, 12,500, 10,000 and 10,000 options at $1.75, $2.00,
$1.25, $1.34 and $2.09, respectively.
ELECTION OF DIRECTORS
Our certificate of incorporation provides for a Board of Directors
consisting of not less than three nor more than seven directors. Our Board of
Directors now consists of four directors as set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION HELD SINCE:
---- --------------------------- -----------
<S> <C> <C>
James A. Cannavino(1)............................. Chairman of the Board March, 2000
(Chief Executive Officer)
Charles Feld(1)................................... Director March, 2000
Dr. Dennis J. Murray(2)........................... Director March, 2000
Carla J. Stovall(2)............................... Director April, 2000
</TABLE>
---------------
(1) Member of the Compensation Committees
(2) Member of the Audit Committee
Directors will be elected to hold office until the next annual meeting of
stockholders or until his successor is chosen and qualified. Shares represented
by executed proxies in the form enclosed will be voted, if authority to do so is
not withheld, for the election as directors of the aforesaid nominees unless any
such nominee shall be unavailable, in which case such shares will be voted for a
substitute nominee designated by the Board of Directors. The Board of Directors
has no reason to believe that any of the nominees will be unavailable or, if
elected, will decline to serve.
3
<PAGE> 6
DIRECTORS' COMPENSATION
Effective March, 2000, directors who are not our employees receive a fee of
$2,500 for each board of directors meeting attended; $1,500 for participation in
a telephone board meeting; $5,000 for membership on a committee of the Board and
$1,000 for each committee meeting attended.
During the fiscal year ended December 31, 1999 there were
- eight meetings of the Board of Directors
- two meeting of the Audit Committee
- four meetings of the Compensation Committee
Our Audit Committee is involved in discussions with our independent public
accountants with respect to the quarterly and year-end audited financial
statements, our internal accounting controls and the professional services
furnished by our independent public accountants. Our Compensation Committee
recommends compensation including stock options to our officers and employees.
See "Compensation Committee Report on Executive Compensation." We have no
standing nominating committee. Each director attended or participated in at
least 75% of the meetings of the Board of Directors and the committees on which
he served.
PRINCIPAL OCCUPATIONS OF DIRECTORS
The following is a brief account of the business experience for the past
five years of our directors:
JAMES A. CANNAVINO has been our Chairman of the Board since March, 2000.
Mr. Cannavino is President and Chief Executive Officer of CyberSafe, Inc., a
corporation specializing in network security. He was the President and Chief
Executive Officer of Perot Systems Corporation through July 1997, and prior to
that was a Senior Vice President at IBM, responsible for strategy and
development. He also served on the IBM Corporate Executive Committee and
Worldwide Management Council, and on the board of IBM's integrated services and
solutions company. Mr. Cannavino currently is a consultant to Computer Concepts
Corp. and serves on the boards of National Center for Missing and Exploited
Children, 7th Level, Inc. and Marist College.
CHARLES FELD (58 years of age) has been President of the Feld Group, Inc.,
a provider of temporary chief information officer consulting services, for more
than the past five years. Since December 1997, Mr. Feld has also served as
operating Chief Information Officer of Delta Air Lines. Prior thereto, from June
1992 until August 1997, Mr. Feld served as operating Chief Information Officer
for Burlington Northern Santa Fe. Corp.
DR. DENNIS J. MURRAY (54) has been President of Marist College since 1979.
Under Dr. Murray's leadership, Marist has become one of the most technologically
advanced liberal arts colleges in the country, having recently completed a
five-year, $16 million joint study with the IBM Corporation that included an
integrated voice and data network that connects virtually every room on campus,
and the integration of information technology across the curriculum. Dr. Murray
serves on several boards, including Bank of New York/Dutchess Division, the
Franklin and Eleanor Roosevelt Institute, the McCann Foundation and Vassar
Brothers Hospital Foundation. He is also the editor of three books in the field
of government and public affairs and is co-author of a guide to
corporate-sponsored university research in biotechnology.
CARLA J. STOVALL (43) has been the Attorney General for the State of Kansas
since 1994. Attorney General Stovall also currently serves as Vice President of
the National Association of Attorneys General and will become the Association's
president in 2001. Attorney General Stovall is active in many organizations such
as Kansas Child Abuse Prevention Council, Big Brother/Big Sister and 4-H Club,
and recently was honored with the Distinguished Service to Kansas' Children
Award.
4
<PAGE> 7
MANAGEMENT
OUR OFFICERS
Our officers are:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH THE COMPANY
---- --- -----------------------------------------------
<S> <C> <C>
James A. Cannavino............... 55 Chairman of the Board (Chief Executive Officer)
Anthony Coppola.................. 46 Acting President
George Aronson................... 51 Secretary, Treasurer (Chief Financial Officer)
Arnold Leap...................... 32 Chief Information Officer
Lawrence York.................... 31 Vice President, President of Global
Telecommunications Solutions division.
</TABLE>
ANTHONY COPPOLA was appointed Acting President in March, 2000. From
January, 1999 until his appointment as President, Mr. Coppola was Executive Vice
President in charge of development, marketing and sales of our d.b.Express based
telecommunications Electronic Bill Presentment Payment Analysis and Reporting
software. Beginning in 1994, Mr. Coppola worked with is in various capacities
related to sales and marketing management. His responsibilities included the
management and direction of the design and programming for the
telecommunications applications, as well as direct involvement with the sales
and marketing of our applications and services to IBM and our other primary
customers. Prior to joining us, Mr. Coppola was President of America Multimedia
Corp., a firm active in consulting and the development and marketing of industry
specific training software.
GEORGE ARONSON, C.P.A., has been our Chief Financial Officer since August,
1995. From March, 1989 to August, 1995, he was the Chief Financial Officer of
Hayim & Co., an importer/distribution organization.
ARNOLD LEAP has been our Chief Information Officer since March, 1998. From
February, 1997 to March, 1998, he was our Director of Development and
Engineering. From February, 1993 to February 1997, Mr. Leap was the MIS Director
of AMP Circuits, Inc., a subsidiary of AMP, Inc. His responsibilities included
day to day information systems operation as well as the development and
implementation of a consolidated ERP and financial systems for three different
manufacturing locations.
LAWRENCE YORK has been our Vice President and President of our Global
Telecommunications Solutions division since June 2000. Mr. York began his career
in telecommunications with Sprint in 1995 in the marketing and business analysis
division. This position led to his recruitment and promotion by MCI Worldcom to
the position of senior analyst for business development. From 1998 to his
employment with us, Mr. York was Vice President of Telwares, Inc., a
telecommunications company.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation with
respect to the then Chairman/Chief Executive Officer and each of our other
executive officers who earned more than $100,000 for services rendered during
the fiscal years ended December 31, 1999, 1998 and 1997. Messrs. Daniel
DelGiorno, Sr., Daniel DelGiorno, Jr. and Russell Pellicano resigned as officers
and directors in March 2000 as part of our reorganization.
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------
ANNUAL COMPENSATION SECURITIES
---------------------------------------- RESTRICTED UNDERLYING
NAME AND FISCAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(9)(6)(4) COMPENSATION AWARDS SARS(8)(5)(2) COMPENSATION
------------------ ------ -------- -------------- ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Daniel DelGiorno, Sr.(1).... 1999 $270,000 $1,130,000 $-- -- 200,000 --
Director 1998 260,000 1,030,000 -- -- 190,000 --
1997 260,000 327,000 -- -- -- --
Daniel DelGiorno, Jr.(1).... 1999 -- 1,354,000 -- -- 200,000 --
President, C.E.O. 1998 -- 1,291,000 -- -- 350,000 --
Director 1997 -- 753,000 -- -- -- --
Russell Pellicano(7)........ 1999 -- 317,000 -- -- 100,000 --
Secretary 1998 -- 76,000 -- -- 25,000 --
Director 1997 -- 199,000 -- -- -- --
George Aronson.............. 1999 170,000 532,000 -- -- 150,000 --
Chief Financial Officer 1998 157,000 456,000 -- -- 150,000 --
1997 157,000 233,000 -- -- -- --
Anthony Coppola(3).......... 1999 136,000 418,000 -- -- 60,000 --
Executive Vice President 1998 125,000 98,000 -- -- 105,750 --
1997 104,000 12,000 -- -- -- --
All Officers as a Group..... 1999 576,000 3,751,000 -- -- 710,000 --
1998 542,000 2,951,000 -- -- 820,750 --
1997 521,000 1,524,000 -- -- -- --
</TABLE>
---------------
(1) In June, 1997, Daniel DelGiorno, Sr. and Daniel DelGiorno, Jr. each held
60,000 stock options (originally granted in 1995) repriced from $15,00 to
$.10 (since exercised). In October, 1998, Daniel DelGiorno Sr. and Daniel
DelGiorno, Jr. each held 68,100 stock options (originally granted in 1995)
repriced from $5.00 to $2.00 (see Note 5).
(2) Options were granted in April, 1998, at prices ranging from $4.00 to $6.00
per share, expiring December 31, 2000. In October, 1998, these options were
repriced to $2.00 and extended to December 31, 2002.
(3) All of Mr. Coppola's options were repriced to $2.00 in 1998, when the
market price was $1.75 per share.
(4) Bonus amounts reflected above for 1997, were in the form of stock options
and our common stock, which were subject to forfeiture and/or restrictions.
(5) Certain options were repriced in 1997 and all employee options were
repriced to $2.00 per share in 1998. (Except for any options which have an
exercise price below $2.00).
(6) Bonus' granted in 1998 for Messrs. DelGiorno, Sr., DelGiorno, Jr., Aronson
and Coppola were in the form of restricted shares of Softworks' common
stock.
(7) In October, 1998, Mr. Pellicano has 10,000 options (originally granted in
1995) repriced from $15.00 to $2.00.
(8) During 1999, we granted options to Messrs. DelGiorno, Sr., DelGiorno, Jr.,
Pellicano, Aronson and Coppola in the amounts of 200,000, 200,000, 100,000,
150,000 and 50,000, respectively. These options are fully vested,
exercisable at $1.25 per share and expire November 30, 2001. Additionally,
during 1999, Mr. Coppola was granted 10,000 options exercisable at $1.34
which expire December 31, 2002.
(9) We granted cash bonuses in 1999, to Messrs. DelGiorno, Sr., Pellicano,
Aronson and Coppola in the amounts of $750,000, $272,000, $150,000 and
$200,000, respectively. Mr. Pellicano and Mr. Coppola received $45,000 and
$218,000, respectively, in the form of our common stock. The balance of
1999 bonuses are in the form of restricted shares of Softworks' common
stock.
EMPLOYMENT AGREEMENTS
We do not have employment agreements with any of our senior management.
6
<PAGE> 9
STOCK AND COMPENSATION PLANS
We have had three stockholder plans.
Our 1993 Non-Qualified Stock Option Plans for directors, officers,
consultants and employees authorized the Board of Directors to make a one time
grant of an unspecified number of shares or options in regard to past services,
and to grant annually up to ten percent of the outstanding shares at prices
equal to or above market prices and up to an additional ten percent at prices
below market. This plan was terminated in conjunction with the adoption of the
1995 Stock Option Plan as approved by our shareholders in 1996. At December 31,
1999, no options had been granted at prices below market under the plan, and an
aggregate of 1,270,250 options were granted with exercise prices at or above
market at prices from $5.00 to $46.30, of which approximately 288,147 have been
exercised and 153,252 have terminated without exercise. 420,000 of the options
previously granted under the plan were repriced to $5.00 per share in 1995, when
our market price was $2.80 per share and 242,500 of those options were repriced
to $.10 in 1997, when our market price was $5.00 per share. In 1995, the Chief
Executive Officer and President were each granted 30,000 shares and 18,000
options exercisable at $5.00 and 60,000 options exercisable at $15.00 per share
(repriced to $.10 per shares in 1997 and exercised in 1998), which issuances
were given shareholder approval in 1996.
As of December 31, 1999, under the 1995 Stock Option Plan 881,350 shares
and options to purchase 15,900 shares had been granted under the Plan with
exercise prices from $5.00 to $18.00, none of which have been exercised or
terminated. As of December 31, 1999, 2,271,680 options and/or warrants had been
granted outside of the Plans, at prices ranging between $2.50 and $46.30 per
share, of which 162,437 have been exercised (by non-affiliates) and 114,994 have
terminated without exercise. In October, 1998, 2,234,235 options previously
granted to employees were extended to December 31, 2002, and repriced to $2.00
when the market price was $1.75. At December 31, 1999, an aggregate of 4,282,000
options and/or warrants were outstanding under all our plans, of which 4,282,000
are outstanding as of July 17, 2000. Of these options, as of December 31, 1999,
an aggregate of 2,225,000 options were exercisable at $1.25 to $2.09 per share
under the 1998 Stock Option Plan.
STOCK OPTION REPRICING
As previously reported in our Form 10-Q for the period ended June 30, 1997,
and Form 10-K for the period ended December 31, 1998, we repriced certain
outstanding stock options with exercise prices lower than the terms of the
original grants. These actions were taken in order to provide an appropriate
incentive to these individuals. The following table sets forth certain
information concerning the repricing of options within the previous ten years.
We have not issued any SARs.
TEN-YEAR OPTIONS REPRICINGS(1)
<TABLE>
<CAPTION>
LENGTH OF ORIGINAL
NUMBER OF EXERCISE PRICE OPTION TERM
SECURITIES MARKET PRICE OF AT TIME OF REMAINING AT
UNDERLYING STOCK AT TIME NEW DATE OF
REPRICED OF REPRICING REPRICING OR EXERCISE REPRICING OR
NAME DATE OR AWARDED OR AMENDMENT AMENDMENT PRICE AMENDMENT (YRS.)
---- ------- ----------- --------------- -------------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel DelGiorno, Sr. ... 6/27/97 60,000 $ 5.00 $15.00 $ .10 1.5
Daniel DelGiorno, Jr. ... 6/27/97 60,000 5.00 15.00 .10 1.5
George Aronson........... 6/27/97 2,500 5.00 15.00 .10 1.5
Daniel DelGiorno, Sr. ... 5/01/95 50,000 2.80 12.50 5.00 4.0
Daniel DelGiorno, Jr. ... 5/01/95 50,000 2.80 12.50 5.00 4.0
Daniel DelGiorno, Sr. ... 8/25/94 50,000 11.87 25.60 12.50 4.7
Daniel DelGiorno, Jr. ... 8/25/94 50,000 11.87 25.60 12.50 4.7
Daniel DelGiorno, Sr. ... 10/8/98 258,100 1.75 5.00 2.00 2.2
Daniel DelGiorno, Jr. ... 10/8/98 418,000 1.75 5.00 2.00 2.2
George Aronson........... 10/8/98 150,000 1.75 5.00 2.00 2.2
</TABLE>
---------------
(1) For discussion regarding the repricing, see "Compensation Committee
Report -- Stock Option Repricing."
7
<PAGE> 10
OPTION/SAR GRANTS IN LAST FISCAL YEAR
In 1999, Messrs. DelGiorno, Sr., DelGiorno, Jr., Aronson, Pellicano and
Coppola were granted vested stock options expiring November 30, 2001, which are
exercisable at $1.25 per share as follows: 200,000, 200,000, 150,000 100,000,
and 50,000, respectively. Mr. Coppola was granted an additional 10,000 fully
vested options in June, 1999, exercisable at $1.34 expiring December 31, 2002.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table set forth certain information with respect to stock
option exercises by the named Executive Officers during the fiscal year ended
December 31, 1999, and the value of unexercised options held by them at fiscal
year-end.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel DelGiorno, Jr. ..... -- -- 458,100 -- $87,600 $--
Daniel DelGiorno, Sr. ..... -- -- 618,100 -- 87,600 --
Russell Pellicano.......... -- -- 135,000 -- 43,800 --
George Aronson............. -- -- 300,000 -- 65,700 --
Anthony Coppola............ -- -- 165,750 -- 25,380 --
</TABLE>
---------------
(1) Market Value of our common stock on December 31, 1999 was $1.688.
In-the-money options at year end were as follows: Messrs. Daniel DelGiorno,
Sr. -- 200,000, Daniel DelGiorno, Jr. -- 200,000, Pellicano -- 100,000;
Aronson -- 150,000; and Coppola -- 60,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(1) We have, from time to time advanced funds to Messrs. Daniel DelGiorno,
Sr. and Daniel DelGiorno, Jr. with such advances being payable upon demand and
bear interest at the rate of 7% per annum. At December 31, 1999, the loan
balance due from these two officers was approximately $1,663,000. Additionally,
at December 31, 1999, a loan balance of approximately $159,000 was due from Mr.
Aronson. During the first quarter of 2000, Messrs. Daniel DelGiorno, Sr. and
Daniel DelGiorno, Jr. repaid approximately $1,547,000 consisting of $624,000 and
410,179 shares of our common stock, valued at $923,000. Mr. Aronson repaid his
loan in full.
(2) In March, 2000, as part of our restructuring plan, we entered into
retirement arrangements with Daniel DelGiorno, Jr., Daniel DelGiorno, Jr., and
Russell Pellicano and our other board members. $1,500,000 was paid with 75,000
shares of NetWolves Corporation common stock, $100,000 was paid with 50,000
shares of our common stock, $558,000 was paid in March 2000, $4,800,000 was paid
in April 2000, $500,000 is payable on or before March 1, 2001 and $77,000 is for
employee benefits payable over various time periods.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, our Compensation Committee consisted of Messrs. Russell
Pellicano, Augustin Medina and Jack S. Beige. None of these persons were our
officers or employees during fiscal 1999 nor had any relationship requiring
disclosure in this Proxy Statement.
In accordance with rules promulgated by the Securities and Exchange
Commission, the information included under the captions "Compensation Committee
Report on Executive Compensation" and "Perform-ance Graph" will not be deemed to
be filed or to be proxy soliciting material or incorporated by reference in any
prior or future filings by us under the Securities Act of 1933 or the Securities
Exchange Act.
8
<PAGE> 11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The members of our Compensation Committee of the Board of Directors is
responsible for annually and/or periodically upon request of the Board,
recommending to the Board of Directors the cash and/or other compensation for
our executive officers. Such compensation will generally be determined by the
Board of Directors based on the recommendation of the Compensation Committee,
subject to applicable employment agreements. The majority of the members of the
Compensation Committee in 1999 were directors who are not our employees or any
of our affiliates. Set forth below is the Committee's report on the compensation
policies for 1999 as they affected our executive officers.
With regard to executive compensation, it is our philosophy to provide a
program which attracts and retains executive officers and other key employees
critical to our success, and to reward executive officers for corporate, group
and individual performance. Executive compensation, including the Chairman and
CEO, is evaluated by the Committee using the aforementioned subjective criteria
and is not based solely on specific objective criteria such as profitability of
the corporation or market value of its stock, however, it is noted that
management has followed a policy of granting compensation which is largely tied
to shareholder values by the issuance of restricted stock and/or stock options
whereby the value to the parties receiving such grants is thereby tied directly
to increases in all shareholders' market values. The Chief Executive Officer
also makes recommendations to the Committee regarding the total compensation
payable to the executives, other than himself, for each fiscal year, which
recommendations the Committee has the discretion to accept or modify as it deems
appropriate. The Committee sets the compensation payable to the Chief Executive
Officer relying on similar factors. Through 1999, Mr. DelGiorno, Jr. did not
accept the recommendation of the Committee that he be paid a cash salary,
preferring to directly align himself with the interests of the shareholders
through the receipt of stock or options. Of our three senior officers, Daniel
DelGiorno, Sr., Daniel DelGiorno, Jr., and Russell Pellicano, none of them
received cash compensation during 1994, only Daniel DelGiorno, Sr. received cash
compensation in 1995, and only Daniel DelGiorno, Sr. and Russell Pellicano in
1996 through 1999. The compensation committee will continue a policy of
compensation primarily through stock or options, thereby tying executive
compensation to increases in shareholder market values without depletion of our
cash resources. Our compensation programs are intended to enable us to attract,
motivate, reward and retain the management talent required to achieve aggressive
corporate objectives in a rapidly changing industry, and thereby increase
stockholder value. It is our policy to provide incentives to its senior
management to achieve both short-term and long-term objectives and also to
reward exceptional performance and contributions to the development of our
business. To attain these objectives, our executive compensation program
includes a competitive base salary, coupled with executive bonus arrangements
which are "at risk" based on the performance of our business, primarily as
reflected in the achievement of certain revenue, earnings and growth goals, as
well as standard company benefit programs such as health insurance and a 401k
plan. Our employees and consultants, including our executive officers, may also
be granted stock and/or stock options and other awards periodically in order to
more directly align their interests with the long-term financial interests of
the our stockholders.
Base Salary
Each year the Committee examines the salaries of our officers. The
executive officers do not have employment agreements which provide for a base
salary, however, the Committee has recommended that the Board consider entering
into employment agreements with all of its key personnel. The Committee provides
recommendations for salary levels based on information available about salaries
in our industry, inflation and the performance of the individuals. In 1999, no
increases in base salary occurred.
Stock and/or Stock Options
Stock and/or stock options are awarded to executives in order to encourage
future management actions aimed at improving our sales efforts, client
development and service quality, revenues and ultimately profitability. If we
are successful in improving these areas, it is anticipated that these actions
will generate a positive impact on the value of our common stock for all
stockholders, and the individuals will be given the
9
<PAGE> 12
opportunity to share in the increased value of the results of their efforts. In
regard to 1999, 200,000 restricted shares of our common stock were granted to
each of Daniel DelGiorno, Sr. and Jr. The Committee noted that the grants
continued to align management and shareholder interests while also providing
meaningful performance incentives to the recipients in conjunction with the
realities of the market price of our securities. The Committee and Board believe
that these grants are in appropriate amounts in light of the contributions to,
and sacrifices made on our behalf, and provide an incentive for management to
maximize long-term shareholder value.
Chief Executive Officer Compensation
In establishing Mr. DelGiorno, Jr.'s compensation level, consideration is
given to his individual performance level as well as to factors discussed above
for all executive officers. Although the Committee has recommended a base
salary, he has not accepted the recommendation, requesting instead that he
continue to be compensated through stock or options which directly align his
interests and potential rewards with our stockholders.
Section 162(m) of the Federal Income Tax Code
Generally, Section 162(m) denies deduction to any publicly held company for
certain compensation exceeding $1,000,000 paid to the chief executive officer
and the four other highest paid executive officers, excluding among other things
certain performance-based compensation. The Compensation Committee and Board
intend that the stock options issued qualify for the performance-based exclusion
under Section 162(m). The Compensation Committee will continually evaluate to
what extent Section 162 will apply to its other compensation programs.
Respectfully submitted,
The Compensation Committee
Russell Pellicano
Augustin Medina
Jack S. Beige
10
<PAGE> 13
PERFORMANCE GRAPH
The following graph sets forth the cumulative total return to our
stockholders during the five year period ended December 31, 1999 as well as an
overall stock market index (S&P 500 Index) and our peer group index (S&P
Computer Software & Services):
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG COMPUTER CONCEPTS CORPORATION, THE S&P 500 INDEX
AND THE S&P COMPUTERS (SOFTWARE & SERVICES) INDEX
[GRAPH TO COME]
<TABLE>
<CAPTION>
S & P COMPUTERS
COMPUTER CONCEPTS (SOFTWARE &
CORPORATION S & P 500 SERVICES)
----------------- --------- ---------------
<S> <C> <C> <C>
12/94 100 100 100
12/95 344.02 137.58 140.54
12/96 72 169.17 218.48
12/97 64 225.61 304.35
12/98 26 290.09 551.47
12/99 25.64 351.13 1019.84
</TABLE>
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
11
<PAGE> 14
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE OUR NAME
GENERAL
The Board of Directors has proposed and recommended to its stockholders a
proposal which authorizes the Board in its discretion to file an amended
Certificate of Incorporation which amends Article FIRST of our Certificate of
Incorporation to change our name to "Direct Insite Corp."
BOARD POSITION AND REQUIRED VOTE
The proposal will be adopted only if it receives the affirmative vote of a
majority of the outstanding shares of common stock. The Board of Directors
believes that the proposed amendment is in the best interests of our company and
its stockholders in that it represents a name more appropriate for the nature of
its business under its recent restructuring plan. Accordingly, the Board of
Directors recommends a vote FOR its adoption. Proxies received will be voted in
favor of the proposed amendment unless otherwise indicated.
PROPOSAL TO APPOINT INDEPENDENT PUBLIC ACCOUNTANTS
GENERAL
The Board of Directors recommends that the stockholders approve the
appointment of Hays & Co. as our company's independent public accountants to
examine our financial statements for the fiscal/calendar year ending December
31, 2000.
BOARD POSITION AND REQUIRED VOTE
The proposal will be adopted only if it receives the affirmative vote of a
majority of the votes cast at the Annual Meeting. The Board of Directors
recommends a vote FOR the ratification of the appointment of Hays & Co. as our
independent public accountants.
INDEPENDENT PUBLIC ACCOUNTANTS
Hays & Co. acted as our independent public accountants for the fiscal year
ended December 31, 1999 and has been selected by the Board of Directors, upon
the recommendation of the Audit Committee, to continue to act as our independent
public accountants for the 2000 fiscal year.
A representative of Hays & Co. plans to be present at the Annual Meeting
with the opportunity to make a statement if he desires to do so, and will be
available to respond to appropriate questions.
FINANCIAL STATEMENTS
A copy of our Annual Report to Stockholders for the fiscal year ended
December 31, 1999, including our Form 10-K for said period, and our Quarterly
Report on Form 10-Q for the three month period ended March 31, 2000, has been
provided to all stockholders as of the Record Date. Stockholders are referred to
the report for financial and other information about us, but such report is not
incorporated in this proxy statement and is not a part of the proxy soliciting
material.
FORWARD LOOKING STATEMENTS
All statements other than statements of historical fact included in this
proxy statement are forward-looking statements. When used in this proxy
statement, words such as "anticipate," "believe," "estimate," "expect," "intend"
and similar expressions, as they relate to us or our management, as well as
assumptions made by and information currently available to our management,
identify forward-looking statements. Actual results could differ materially from
those contemplated by the forward-looking statements as a result of
12
<PAGE> 15
certain factors including, but not limited to, the effect of business and
economic conditions; the impact of competitive products and pricing; and
capacity and supply constraints or difficulties. Such statements reflect our
current views with respect to future events and are subject to these and other
risks, uncertainties and assumptions relating to our operations, results of
operations, growth strategy and liquidity.
MISCELLANEOUS INFORMATION
As of the date of this Proxy Statement, the Board of Directors does not
know of any business other than that specified above to come before the meeting,
but, if any other business does lawfully come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote in regard thereto,
in accordance with their judgment.
We will pay the cost of soliciting proxies in the accompanying form. In
addition to solicitation by use of the mails, certain of our officers and
employees may solicit proxies by telephone, telegraph or personal interview. We
may also request brokerage houses and other custodians, and, nominees and
fiduciaries, to forward soliciting material to the beneficial owners of stock
held of record by such persons, and may make reimbursement for payments made for
their expense in forwarding soliciting material to the beneficial owners of the
stock held of record by such persons.
We must receive stockholder proposals with respect to our next annual
meeting of stockholders no later than March 31, 2001 to be considered for
inclusion in our next Proxy Statement.
By Order of the Board of Directors,
JAMES A. CANNAVINO
Chairman of the Board
Dated: July 25, 2000
Bohemia, New York
13
<PAGE> 16
EXHIBIT A
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
CHANGING OUR NAME
The following sets forth the changes to Article "FIRST" of our Certificate
of Incorporation if the proposed amendment is approved:
"FIRST: The name of the corporation is: DIRECT INSITE CORP."
<PAGE> 17
COMPUTER CONCEPTS CORP.
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING
AUGUST 23, 2000
The undersigned hereby appoints James A. Cannavino and Charles Feld, or
either of them, attorneys and Proxies with full power of substitution in each of
them, in the name and stead of the undersigned to vote as Proxy all the stock of
the undersigned in COMPUTER CONCEPTS CORP., a Delaware corporation, at the
Annual Meeting of Stockholders scheduled to be held on August 23, 2000 and any
adjournments thereof.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, AND EACH OF THEM, AS
SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. STOCKHOLDERS MAY WITHHOLD THE VOTE FOR ONE OR MORE
NOMINEE(S) BY WRITING THE NOMINEE(S) NAME(S) IN THE BLANK SPACE PROVIDED ON THE
REVERSE HEREOF. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE
ELECTION OF DIRECTORS, AND FOR EACH OF THE OTHER PROPOSALS AS SET FORTH ON THE
REVERSE HEREOF.
(Continued and to be signed on reverse side)
SEE REVERSE SIDE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
1. Election of the following nominees, as set forth in the proxy statement:
NOMINEES: James A. Cannavino, Charles Feld, Dr. Dennis J. Murray, Carla J.
Stovall
[ ] FOR all nominees listed above [ ] WITHHOLD authority to vote
(Instruction: To withhold authority to vote for any individual nominee, print
the nominee's name on the line provided below)
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
2. Proposal to amend the Company's Certificate of Incorporation to change the
name of the Company, as set forth in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal to ratify the appointment of Hays & Co. as the Company's
independent certified public accountants as set forth in the Proxy
Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Upon such other business as may properly come before the meeting or any
adjournment thereof.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
SIGNATURE(S)
--------------------------------------------------------------------------------
DATED:
--------------------, 2000
