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
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_|Confidential, For Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DATASTREAM SYSTEMS, INC.
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(Name of Registrant as Specified in Its Charter)
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(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
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(2) Aggregate number of securities to which transactions
applies:
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(3) Per unit price or other underlying value of transaction
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
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<PAGE>
(LOGO OF DATASTREAM SYSTEMS, INC. APPEARS HERE)
DATASTREAM SYSTEMS, INC.
50 Datastream Plaza
Greenville, South Carolina 29605
(864) 422-5001
May 12, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting
of Stockholders of Datastream Systems, Inc., which will be held
at 2:00 p.m. on Friday, June 12, 1998 at The Embassy Suites
Hotel, 670 Verdae Boulevard, Greenville, South Carolina 29607.
The principal business of the meeting will be to: (i) elect
two directors to Class II of the Company's Board of Directors, to
serve a three-year term expiring in the year 2001; (ii) to
consider approval of a proposal to adopt the Datastream Systems,
Inc. 1998 Stock Option Plan; and (iii) to transact such other
business as may properly come before the meeting. During the
meeting, we will also review the results of the past fiscal year
and report on significant aspects of our operations during the
first quarter of fiscal 1998.
Whether or not you plan to attend the meeting, please
complete, sign, date and return the enclosed proxy card in the
postage prepaid envelope provided so that your shares will be
voted at the meeting. If you decide to attend the meeting, you
may, of course, revoke your proxy and personally cast your votes.
Sincerely yours,
/s/ Larry G. Blackwell
Larry G. Blackwell
Chairman, President and Chief
Executive Officer
<PAGE>
DATASTREAM SYSTEMS, INC.
50 Datastream Plaza
Greenville, South Carolina 29605
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1998 Annual Meeting of Stockholders of Datastream
Systems, Inc. will be held at 2:00 p.m. on Friday, June 12, 1998
at The Embassy Suites Hotel, 670 Verdae Boulevard, Greenville,
South Carolina 29607. The meeting is called for the following
purposes:
(1) To elect two directors to Class II of the Company's
Board of Directors, to serve a three-year term expiring
in the year 2001;
(2) To consider approval of a proposal to adopt the
Datastream Systems, Inc. 1998 Stock Option Plan; and
(3) To transact such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on
April 28, 1998 as the record date for the purpose of determining
the stockholders who are entitled to notice of and to vote at the
meeting and any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ Larry G. Blackwell
Larry G. Blackwell
Chairman, President and Chief
Executive Officer
Greenville, South Carolina
May 12, 1998
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE
REQUESTED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD SO THAT YOUR SHARES WILL BE REPRESENTED.
<PAGE>
DATASTREAM SYSTEMS, INC.
50 Datastream Plaza
Greenville, South Carolina 29605
PROXY STATEMENT
This Proxy Statement is furnished by and on behalf of the
Board of Directors of Datastream Systems, Inc. (the "Company") in
connection with the solicitation of proxies for use at the 1998
Annual Meeting of Stockholders of the Company to be held at 2:00
p.m. on Friday, June 12, 1998 at The Embassy Suites Hotel, 670
Verdae Boulevard, Greenville, South Carolina 29607, and at any
adjournments or postponements thereof (the "Annual Meeting").
This Proxy Statement and the enclosed proxy card will be first
mailed on or about May 12, 1998 to the Company's stockholders of
record on the Record Date, as defined below.
THE BOARD OF DIRECTORS URGES YOU TO MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE
PREPAID ENVELOPE PROVIDED.
SHARES ENTITLED TO VOTE
Proxies will be voted as specified by the stockholder or
stockholders granting the proxy. Unless contrary instructions
are specified, if the enclosed proxy card is executed and
returned (and not revoked) prior to the Annual Meeting, the
shares of common stock, $.01 par value per share (the "Common
Stock"), of the Company represented thereby will be voted (i) FOR
the election as directors of the nominees listed in this Proxy
Statement and (ii) FOR the adoption of the Datastream Systems,
Inc. 1998 Stock Option Plan (the "Stock Option Plan"), as
described herein. The submission of a signed proxy will not
affect a stockholder's right to attend and to vote in person at
the Annual Meeting. A stockholder who executes a proxy may
revoke it at any time before it is voted by filing with the
Secretary of the Company either a written revocation or an
executed proxy bearing a later date or by attending and voting in
person at the Annual Meeting.
Only holders of record of Common Stock as of the close of
business on April 28, 1998 (the "Record Date") will be entitled
to vote at the Annual Meeting. As of the close of business on
the Record Date, there were 18,822,594 shares of Common Stock
(the "Shares") outstanding. Holders of Shares authorized to vote
are entitled to cast one vote per Share on all matters. The
holders of a majority of the Shares outstanding and entitled to
vote must be present in person or represented by proxy to
constitute a quorum. Shares as to which authority to vote is
withheld and abstentions will be counted in determining whether a
quorum exists.
Under Delaware law, directors are elected by the affirmative
vote of a plurality of the shares present in person or
represented by proxy and entitled to vote in the election at a
meeting at which a quorum is present. Only votes actually cast
will be counted for the purpose of determining whether a
particular nominee received more votes than the persons, if any,
nominated for the same seat on the Board of Directors.
Approval of the proposal to adopt the Stock Option Plan, as
well as any other matter that may properly come before the Annual
Meeting, requires the affirmative vote of a majority of the
Shares present in person or represented by proxy and entitled to
vote on such matter at a meeting at which a quorum is present.
Abstentions will be counted in determining the minimum number of
votes required for approval and will, therefore, have the effect
of votes against such proposals. Broker non-votes, those shares
held by a broker or nominee as to which such broker or nominee
does not have discretionary voting power, will not be counted as
votes for or against approval of such matters.
With respect to any other matters that may come before the
Annual Meeting, if proxies are executed and returned, such
proxies will be voted in a manner deemed by the proxy
representatives named therein to be in the best interests of the
Company and its stockholders.
PROPOSAL I - ELECTION OF DIRECTORS
Prior to its initial public offering, the Company's
stockholders adopted a Certificate of Incorporation providing for
a classified Board of Directors. Pursuant to the Certificate of
Incorporation, the Board of Directors must be separated into
three classes, each consisting, as nearly as may be possible, of
one-third of the total number of directors constituting the
entire Board of Directors. The Company's Bylaws set the number
of directors of the Company at five, and accordingly, the first,
second and third classes of directors consist of one, two and two
directors, respectively. Each class serves three years, with the
terms of office of the respective classes expiring in successive
years. The term of office of the directors in Class II, Messrs.
Richard T. Brock and Ira D. Cohen, expires at the Annual
Meeting. The Board of Directors proposes that Messrs. Brock and
Cohen be re-elected to Class II for a new term of three years
expiring in 2001 and until their successors are duly elected and
qualified.
All Shares represented by properly executed proxies received
in response to this solicitation will be voted in connection with
the election of the Class II directors as specified therein by
the stockholders. Unless otherwise specified in the proxy, it is
the intention of the persons named on the enclosed proxy card to
vote FOR the election of Messrs. Brock and Cohen to the Board of
Directors. Both Mr. Brock and Mr. Cohen have consented to serve
as a director of the Company if elected. If at the time of the
Annual Meeting a nominee is unable or declines to serve as a
director, the discretionary authority provided in the enclosed
proxy card may be exercised to vote for a substitute candidate
designated by the Board of Directors. The Board of Directors has
no reason to believe that either of the nominees will be unable
or will decline to serve as a director.
Stockholders may withhold their votes from a nominee by so
indicating in the space provided on the enclosed proxy card.
<PAGE>
Director Nominees Biographical Information
Set forth below is certain biographical information
furnished to the Company by its directors, including Richard T.
Brock and Ira D. Cohen, the director nominees for the Company's
Class II directorships. Messrs. Brock and Cohen are proposed for
election at this Annual Meeting to serve a term expiring in the
year 2001. Messrs. Brock and Cohen currently serve as directors
of the Company.
RICHARD T. BROCK
Age: 50
Class II Director - Term Expires 1998
Mr. Brock has served as a director of the Company since
August 1993. In 1984, Mr. Brock founded the predecessor of
Firstwave Technologies, Inc. ("Firstwave Technologies"), a
publicly-held provider of sales and marketing automation
software, for which he has served in various capacities,
including Chairman of the Board, Chief Executive Officer and
President, since 1984. He serves as the Chairman of the Board of
Firstwave Technologies and as the founding partner of Brock
Capital Partners, a privately-held venture capital fund. He also
founded and formerly served as Chief Executive Officer of
Management Control Systems, Inc. Mr. Brock is a
nationally-recognized developer, author and speaker on sales,
marketing and service automation and business development
strategy.
IRA D. COHEN
Age: 46
Class II Director - Term Expires 1998
Mr. Cohen has been a director of the Company since February
1995. Since 1988, Mr. Cohen has served as the Managing Director
of Updata Group, Inc., an investment banking firm focused on
mergers and acquisitions in the information technology industry.
Mr. Cohen founded Updata Software, Inc., and from 1986 to 1988
served as that Company's Chief Financial Officer. Mr. Cohen is
also a director of Computer Learning Centers, Inc.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ABOVE IN
THE CLASS NOTED ABOVE.
<PAGE>
Biographical Information Concerning Other Directors
LARRY G. BLACKWELL
Age: 57
Class III Director - Term Expires 1999
Dr. Blackwell, the founder of the Company, has served as
Chairman of the Board, Chief Executive Officer and President of
the Company from its inception in 1986 until the present. Prior
to founding the Company, he was President of the Datastream
Systems Division of a subsidiary of Wisconsin Power & Light. He
also co-founded and formerly served as Chairman of the Board of
EDI Technology Companies, an environmental process engineering
consulting company. Dr. Blackwell is a registered Professional
Engineer in Illinois, Pennsylvania and South Carolina and was
named Inc. magazine's 1994 "Entrepreneur of the Year" in the
Master Entrepreneur category for the State of South Carolina.
Dr. Blackwell has been a member of the Board of Directors of
Emergent Group, Inc. ("Emergent Group") since 1997.
JOHN M. STERLING, JR.
Age: 60
Class III Director - Term Expires 1999
Mr. Sterling has served as a director of the Company since
February 1986. He has also served as the Chairman of the Board of
Directors and Chief Executive Officer of Emergent Group since
December 1990 and served as President of Emergent Group from
December 1990 to August 1996. Mr. Sterling has also served as
President of Palmetto Seed Capital Corp. from September 1993 to
the present and served as a General Partner of Reedy River
Ventures Limited Partnership ("Reedy River") from 1981 until
August 1995. Reedy River provided venture capital financing to
the Company to fund its early development, and Mr. Sterling
originally served on the Board of Directors of the Company
pursuant to that relationship. Mr. Sterling is the father of
John M. Sterling, III, an executive officer of the Company.
KENNETH D. TRACY
Age: 55
Class I Director - Term Expires 2000
Dr. Tracy has served as a director of the Company since
1990. He currently serves as Vice President-Environmental
Technology for Warner-Lambert Company, a position he has held
since February 1991. From 1984 to 1991, he held positions of
increasing responsibility with Air Products and Chemicals, Inc.,
including Director of Research from January 1990 to February
1991. Prior to joining Air Products, Dr. Tracy was a principal
in the EDI Technology Companies, where he was involved with
process engineering consulting as well as software design and
sales.
Additional Information Concerning The Board Of Directors
The Company's Board of Directors held five meetings during
fiscal 1997. During fiscal 1997, the Board had an Audit
Committee and a Compensation Committee, but did not have a
Nominating Committee. No director attended less than 75% of the
aggregate number of meetings of the Board and the committees of
the Board on which he served that were held during his term as a
director of the Company.
Committees of the Board of Directors. In connection with
its initial public offering in March 1995, the Company
established an Audit Committee and a Compensation Committee. The
Audit Committee is responsible for reviewing and making
recommendations regarding the Company's employment of independent
auditors, the annual audit of the Company's financial statements
and the Company's internal accounting practices and policies. It
consists of Messrs. Cohen (Chairman), Sterling and Tracy. In
fiscal 1997, the Audit Committee held one meeting.
The Compensation Committee is responsible for making
recommendations to the Board of Directors regarding compensation
arrangements for senior management of the Company (including
annual bonus compensation), recommendations concerning the
adoption of any compensation plans in which management is
eligible to participate and grants of stock options or other
benefits under such plans. It consists of Messrs. Brock
(Chairman), Sterling and Tracy. The Compensation Committee held
one meeting in fiscal 1997.
Compensation of Directors. The Company's Board of Directors
is comprised of five members. In fiscal 1997, non-management
directors received an annual retainer of $7,000 and were
reimbursed for expenses incurred in connection with attendance at
meetings of the Board of Directors or committees thereof. The
Company also has adopted a Stock Option Plan for Directors, which
provides for an annual automatic grant of options to purchase
2,000 shares of Common Stock to non-management directors.
Executive Officers
The executive officers of the Company serve at the
discretion of the Board of Directors and presently include Mr.
Blackwell, John Fury Christ, Daniel H. Christie and John M.
Sterling, III. See "Biographical Information Concerning Other
Directors" for information about Mr. Blackwell.
JOHN FURY CHRIST
Vice President of Development and Chief Technology Officer
Age: 42
Dr. Christ served as Manager of Development of the Company
from May 1992 to December 1994, and has held the position of Vice
President of Development since December 1994. In January 1997,
Dr. Christ was named Chief Technology Officer of the Company.
Prior to joining the Company on a full-time basis, Dr. Christ
served as President of Positech, Inc. from January 1990 to May
1992. During this period, Positech was awarded a Small Business
Innovative Research Contract for the application of neural
networks in support of the U.S. Government's Strategic Defense
Initiative. From 1988 to 1990, Dr. Christ provided contract
software development services to the Company. Dr. Christ holds
B.S. and Master of Science degrees in Electrical and Computer
Engineering, and a Ph.D. in Computer Science, all from Clemson
University.
DANIEL H. CHRISTIE
Chief Financial Officer
Age: 45
Mr. Christie served as Controller of the Company from July
1993 to December 1994, and has held the position of Chief
Financial Officer since December 1994. Prior to joining the
Company, from 1991 to 1993, Mr. Christie served as Group Finance
Manager for Digital Equipment Corporation. From 1989 to 1991,
Mr. Christie also served as Digital Equipment's PWB Group Cost
and Budgets Manager and the Plant Controller for Digital
Equipment's Printed Wiring Board Advanced Technology Center in
Greenville, South Carolina. He presently serves as a director
and as the President and Treasurer of Vaughn-Russell Candy Co.
Mr. Christie holds an A.B. degree in Economics from Colgate
University and an M.B.A. in Accounting/International Finance from
Cornell University.
JOHN M. STERLING, III
Vice President of International
Age: 36
Mr. Sterling has served as the Company's Vice President of
International since September 1997, overseeing the Company's
European operations. Prior to holding such position, Mr.
Sterling served as the Company's Managing Director of European
Operations from February through August 1997. Mr. Sterling also
served as the Company's Vice President of Sales from 1989 to
January 1997. Prior to joining Datastream, Mr. Sterling was a
Regional Sales Manager for Silicon Valley Products. Mr. Sterling
holds a B.S. degree in Political Science from The Citadel. Mr.
Sterling is the son of John M. Sterling, Jr., one of the
Company's directors.
Compliance with Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's directors, executive
officers and persons who own beneficially more than 10% of the
Company's Common Stock to file reports of ownership and changes
in ownership of such stock with the Securities and Exchange
Commission (the "SEC") and the National Association of Securities
Dealers, Inc. Directors, executive officers and greater than 10%
stockholders are required by SEC regulations to furnish the
Company with copies of all such forms they file. To the
Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations
that no other reports were required, its directors, executive
officers and greater than 10% stockholders complied during fiscal
1997 with all applicable Section 16(a) filing requirements,
except for a Form 4 for Mr. John Fury Christ for the month of
April 1997. Such Form 4 was filed to report the purchase of
7,500 shares of Common Stock by Mr. Christ in that month and, due
to an administrative oversight, was filed one month after the
deadline for filing such form.
Beneficial Ownership Of Common Stock
The following table sets forth information concerning (i) those
persons known by management of the Company to own beneficially
more than 5% of the Company's outstanding Common Stock, (ii) the
directors of the Company, (iii) the executive officers of the
Company named in the Summary Compensation Table included
elsewhere herein and (iv) all directors and executive officers of
the Company as a group. Such information is provided as of April
15, 1998. According to rules adopted by the SEC, a person is the
"beneficial owner" of securities if he or she has or shares the
power to vote them or to direct their investment or has the right
to acquire beneficial ownership of such securities within 60 days
through the exercise of an option, warrant or right, the
conversion of a security or otherwise. Except as otherwise
noted, the indicated owners have sole voting and investment power
with respect to shares beneficially owned. An asterisk in the
percent of class column indicates beneficial ownership of less
than 1% of the outstanding Common Stock.
Amount and
Nature
of Beneficial Percent
Name of Beneficial Owner Ownership of Class
- ------------------------ --------- --------
Larry G. Blackwell.................. 3,466,900(1) 18.4%
John M. Sterling, III............... 498,208(2) 2.6%
John F. Christ...................... 74,863(3) *
John M. Sterling, Jr................ 141,072(4) *
Richard T. Brock.................... 16,000(5) *
Kenneth D. Tracy.................... 14,000(6) *
Ira D. Cohen........................ 3,000(7) *
All current directors and
executive officers as a
group (8 persons)................. 4,271,719(8) 22.3%
(1) Includes 67,086 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998. Mr. Blackwell's address is that of the Company.
(2) Includes 93,332 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
(3) Includes 66,667 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
(4) Includes 12,000 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
(5) Includes 12,000 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
(6) Includes 12,000 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998 and 2,000 shares of Common Stock to which Mr. Tracy
shares voting and investment power with his spouse.
(7) Represents 3,000 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
(8) Includes 313,009 shares of Common Stock subject to
options exercisable on or within 60 days after April 15,
1998.
EXECUTIVE COMPENSATION
Pursuant to SEC rules for proxy statement disclosure of
executive compensation, the Compensation Committee of the Board
of Directors of the Company has prepared the following Report on
Executive Compensation. The Committee intends that this report
clearly describe the current executive compensation program of
the Company, including the underlying philosophy of the program
and the specific performance criteria on which executive
compensation is based. This report also discusses in detail the
compensation paid to the Company's Chief Executive Officer, Mr.
Larry G. Blackwell, during 1997.
Report On Executive Compensation
The Compensation Committee, whose members are Messrs. Brock
(who serves as Chairman), Sterling and Tracy, was established in
connection with the Company's initial public offering. It is
responsible for establishing salaries, bonuses and other
compensation for the Company's executive officers, as well as for
administering the Company's Employee Stock Purchase Plan and
stock option plans. Each member of the Compensation Committee is
a non-employee director.
Compensation Policy. The Compensation Committee meets
annually to review the levels and types of compensation
established for the Company's executive officers during the prior
year. This review is based generally upon (i) an evaluation of
each executive officer's ability to contribute to the success of
the Company as a publicly-held entity and (ii) the desire to have
some portion of each executive officer's compensation be
incentive in nature. After the end of 1997, the Compensation
Committee met to review and approve management's compensation
recommendations for 1998. At that time, the Compensation
Committee made certain adjustments to the salary component of the
compensation packages of its senior executives, primarily to
reflect their increased responsibilities as officers of a public
company. In making these and other compensation decisions, the
Compensation Committee seeks to integrate the Company's annual
and long-term performance goals into the Company's executive
compensation structure. Specifically, the Company's executive
compensation policy is designed to:
o Provide compensation levels that are consistent with the
Company's business plan, financial objectives and operating
performance;
o Reward performance that facilitates the achievement of the
Company's business plan goals;
o Motivate executives to achieve strategic operating
objectives;
o Provide a compensation package for key employees that is
competitive with comparable arrangements made with other
executives in the software industry; and
o Align the interests of the Company's executives with those
of its stockholders and the long-term interests of the
Company by providing long-term incentive compensation in the
form of stock options.
The Compensation Committee has adopted a three-tiered
approach to executive compensation that involves base salaries,
short-term incentive awards in the form of cash bonuses and
long-term incentive awards in the form of stock options. The
procedure used to determine the level of each of these components
is discussed in more detail below.
Base Salaries. In preparing its recommendations to the
Compensation Committee, management typically reviews one or more
studies or reports provided by compensation consulting or major
accounting firms that indicate base salary levels for officers of
other public companies in the software industry holding the same
or similar positions as the executive officers of the Company.
These companies are not necessarily the same companies whose
performance is compared to that of the Company in the Performance
Graph included herein. In light of such data, a salary level for
each officer is recommended based on the officer's experience
level, the scope and complexity of the position held and the
officer's performance during the past year, as measured against
the average salary for comparable positions as indicated by the
studies described above. In reviewing management's
recommendations and making compensation decisions, the
Compensation Committee also takes into account management's
desire for the Company to be a low-cost provider of software
solutions to the maintenance, repair and operations industry,
which requires the Company to keep close control of its selling,
general and administrative expenses. Accordingly, base salaries
range from approximately 70% to 80% of the average salaries
indicated by such studies for comparable positions, although the
Compensation Committee retains the discretion to set base
salaries higher than this range if necessary to attract and
retain exceptional employees.
Short-Term Incentive Compensation -- Cash Bonuses. The goal
of the short-term incentive component of the Company's
compensation packages is to place a significant portion of each
officer's compensation at risk to encourage and reward a high
level of performance each year. For 1997, criteria were applied
that differed for each executive depending primarily on the
responsibilities of that position. For example, the short-term
incentive compensation of the Company's Vice President of
International was primarily a function of the Company's
achievement of certain international revenue goals, the Company's
Vice President of Development was compensated primarily upon
achievement of certain software release dates and the Company's
Chief Financial Officer was compensated primarily upon the level
of the Company's expenses. However, at the recommendation of
management, the Compensation Committee did not award any cash
incentive bonuses to any executive officers for 1997.
For 1998, the Compensation Committee intends to agree on
certain pre-determined criteria for awarding bonuses for each of
the members of the Company's executive management team. For the
Company's executive officers, these criteria are expected to
depend principally on the Company's overall performance for the
year (determined primarily based on the Company's achievement of
its earnings per share goals for the year) and, to a lesser
degree, on each executive's own performance as evaluated
subjectively by the Compensation Committee. The Compensation
Committee intends to seek to establish short-term incentive
compensation levels for 1998 at approximately 30% to 40% of each
executive's salary, assuming that the Company and each executive
is successful in meeting all of its and his budget objectives.
Under the Company's bonus system, it is also possible for an
executive to receive a partial bonus based on partial achievement
by the Company and/or the executive of the bonus criteria.
Long-Term Incentive Compensation -- Stock Options. The goal
of the long-term incentive component of the Company's
compensation packages is to secure, motivate and reward officers
and to align their interests with the interests of the
stockholders through the grant of stock options. Under the
Company's stock option plans, the Compensation Committee is
authorized to grant incentive and non-qualified stock options to
key employees. The number of options granted is based upon the
position held by the individual, his or her performance, the
prior level of equity holdings by the officer and the
Compensation Committee's assessment of the officer's ability to
contribute to the long-term success of the Company. The
Compensation Committee receives and takes into account data
provided by any compensation reports available to it regarding
executives in comparable positions and management's
recommendations concerning proposed option grants. No particular
weight is given to any single factor. Options granted generally
vest in equal annual increments over a period of three to five
years and terminate at the end of five or ten years, depending
upon the terms of the grant. In 1997, Mr. Blackwell was awarded
incentive stock options to purchase 7,992 shares of Common Stock
at an exercise price of $8.32 per share and 5,106 shares of
Common Stock at an exercise price of $9.21 per share. Mr.
Blackwell also received awards of non-qualified stock options to
purchase 6,008 shares of Common Stock at an exercise price of
$7.57 per share and 14,894 shares of Common Stock at an exercise
price of $8.38 per share. Also in 1997, Mr. John Fury Christ,
the Company's Vice President of Development and Chief Technology
Officer; Mr. John M. Sterling, III, the Company's Vice President
of International; and Mr. Daniel H. Christie, the Company's Chief
Financial Officer, were each awarded incentive stock options to
purchase 14,000 shares and 11,236 shares of Common Stock at
exercise prices of $7.57 and $8.38 per share, respectively, and a
non-qualified stock option to purchase 8,764 shares of Common
Stock at an exercise price of $8.38 per share.
Compensation of the Chief Executive Officer. Mr.
Blackwell's salary for 1997 was $186,851, an amount deemed by the
Compensation Committee to be consistent with the level of
compensation for chief executive officers of software companies
with revenues of between $130 million and $200 million. As was
the case with the Company's other executive officers, Mr.
Blackwell did not receive any cash bonus for 1997. The formula
for determining Mr. Blackwell's cash bonus for 1998 has not yet
been finalized, but it is expected to be structured so that it is
primarily dependent upon percentage increases in the value of the
Company's Common Stock.
Limitations on Deductibility of Compensation. Under the
1993 Omnibus Budget Reconciliation Act, a portion of annual
compensation payable after 1993 to any of the Company's five
highest paid executive officers would not be deductible by the
Company for federal income tax purposes to the extent such
officer's overall compensation exceeds $1,000,000. Qualifying
performance-based incentive compensation, however, would be both
deductible and excluded for purposes of calculating the
$1,000,000 base. Although the Compensation Committee does not
presently intend to award compensation in excess of the
$1,000,000 cap, it will continue to address this issue when
formulating compensation arrangements for the Company's executive
officers and will seek, where possible, to maintain the
deductibility of any such payments.
Richard T. Brock
John M. Sterling, Jr.
Kenneth D. Tracy
The Above Report on Executive Compensation of the
Compensation Committee of the Board of Directors shall not be
deemed to be incorporated by reference as a result of any general
incorporation by reference of this Proxy Statement or any part
hereof in the Company's 1997 Annual Report to Stockholders or its
Report on Form 10-K.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is
comprised of Messrs. Brock, Sterling (Jr.) and Tracy. During
fiscal 1997, the Compensation Committee did not include any
member of the Board of Directors who at that time served as an
officer or employee of, or a consultant to, the Company. The
Company's Chief Executive Officer, Mr. Blackwell, is not a member
of the Compensation Committee, but typically participates in its
deliberations by making recommendations to the Compensation
Committee concerning the performance of the Company's executive
officers and recommendations concerning proposed adjustments to
their compensation. During fiscal 1997, Mr. Blackwell served as
a member of the Board of Directors of Emergent Group, for which
Mr. Sterling serves as Chairman of the Board of Directors and
Chief Executive Officer.
Executive Compensation Tables
Table I - Summary Compensation Table
The following table presents certain information required by
the SEC relating to various forms of compensation awarded to,
earned by or paid to the Company's Chief Executive Officer, Vice
President of International and Vice President of Development
during fiscal 1997 (the "Named Executive Officers"). No other
executive officer earned more than $100,000 during fiscal 1997.
Long-Term
Compensation
------------
Annual Compensation Securities
------------------------------- Underlying
Name and Other Options
Principal Annual (# of All Other
Positions(s) Year Salary Bonus Compensation shares) Compensation
- ------------ ---- ------ ----- ------------ ------- ------------
Larry G. 1997 $186,851(1) -- -- 34,000 $4,750(2)
Blackwell 1996 $176,024(1) -- -- - $4,750(2)
Chairman, 1995 $168,000(1) $24,000 -- 114,000 $5,544(2)
President and
Chief
Executive
Officer
John M. 1997 $103,600(3) -- -- 34,000 $3,528(2)
Sterling, III 1996 $97,683(3) -- -- - $2,930(2)
Vice President 1995 $86,378(3) $20,000 -- 100,000 $3,173(2)
of
International
Mr. John F. 1997 $102,900(4) -- -- 34,000 $3,296(2)
Christ 1996 $92,042(4) -- -- - $2,761(2)
Vice President 1995 $80,529(4) $12,000 -- 100,000 $2,776(2)
of Development
and Chief
Technology
Officer
(1) Includes $9,500 (1996: $9,500; 1995: $9,240) deferred at
the election of Mr. Blackwell pursuant to the Company's
401(k). Mr. Blackwell's current annual salary is $203,004.
(2) Reflects matching contributions to the Company's 401(k) paid
by the Company on behalf of the executive officer.
(3) Includes $8,288 (1996: $5,997; 1995: $8,461) deferred at
the election of Mr. Sterling pursuant to the Company's 401(k).
Mr. Sterling's current annual salary is $115,000.
(4) Includes $7,203 (1996: $4,749; $1995: $6,477) deferred at
the election of Mr. Christ pursuant to the Company's 401(k).
Mr. Christ's current annual salary is $115,000.
TABLE II -- Option/SAR Grants in Fiscal 1997
This table presents information regarding options granted to the
Company's Named Executive Officers during fiscal 1997 to purchase
shares of the Company's Common Stock. The Company has no
outstanding stock appreciation rights (SARs) and granted no SARs
during fiscal 1997. In accordance with SEC rules, the table
shows the hypothetical gains or option spreads that would exist
for the respective options based on assumed rates of annual
compound stock price growth of 5% and 10% from the date the
options were granted over the full option term.
Individual Grants
---------------------------------------
% of Potential
Total Realizable
Number Options Value at Assumed
of Granted Annual Rates of
Securities to Stock Price
Underlying Employees Exercise Appreciation
Options in or Base for the Option Term
Granted Fiscal Price Expiration -------------------
Name (#) Year ($/Share) Date 5% 10%
---- --- ---- --------- ---- -- ---
Mr. Blackwell.. 7,992 0.47% $8.32 5/5/02 $18,371 $40,595
6,008 0.35% $7.57 5/5/07 $28,602 $72,484
5,106 0.30% $9.21 7/1/02 $12,992 $28,710
14,894 0.88% $8.38 7/1/07 $78,493 $198,918
Total...... 34,000 2.01%
Mr. Christ..... 14,000 0.83% $7.56 5/5/07 $66,562 $168,682
20,000 1.18% $8.38 7/1/07 $105,403 $267,111
Total...... 34,000 2.01%
Mr. Sterling... 14,000 0.83% $7.56 5/5/07 $66,562 $168,682
20,000 1.18% $8.38 7/1/07 $105,403 $267,111
Total...... 34,000 2.01%
TABLE III -- Option Exercises in Fiscal 1997
and Fiscal 1997 Year-End Option Values
The following table shows the number of options exercised during
fiscal 1997 and the number of shares of Common Stock subject to
exercisable and unexercisable stock options held by the Company's
Named Executive Officers as of December 31, 1997. The table also
reflects the values of such options based on the positive spread
between the exercise price of such options and $15.50, which was
the closing sales price of a share of Common Stock reported on
the Nasdaq National Market as of December 31, 1997 (the last
trading day of the Company's fiscal year).
Number of Value of
Securities Unexercised
Shares Underlying In-the-Money
Acquired Unexercised Options
On Value Options at at
Exercise Realized Year-End (#) Year-End(1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- --- --- ----------- ------------- ----------- -------------
Mr. Blackwell -- -- 47,086 100,914 $494,541 $962,485
Mr. Christ -- -- 40,000 67,334 $394,135 $607,299
Mr. Sterling -- -- 66,665 67,335 $707,455 $607,305
(1) The value of unexercised in-the-money options at December
31, 1997 is calculated as follows: [(Per Share Closing
Sales Price on December 31, 1997) - (Per Share Exercise
Price)] X Number of Shares Subject to Unexercised
Options. The closing sales price reported by the Nasdaq
National Market of the Company's Common Stock for December
31, 1997 was $15.50 per share.
<PAGE>
Performance Graph
The following indexed line graph indicates the Company's
total return to stockholders from March 29, 1995, the date on
which the Company's Common Stock began trading on the Nasdaq
National Market, to March 31, 1998, as compared to the total
return for the Nasdaq Composite Index and an index for publicly
traded companies in the software industry based on Standard
Industrial Classification 737 for the same period.
PERFORMANCE GRAPH GOES HERE
3/29/95 6/30/95 9/29/95 12/29/95 3/29/96 6/28/96 9/30/96 12/31/96
------- ------- ------- -------- ------- ------- ------- --------
Nasdaq $100.00 $114.31 $128.08 $129.64 $135.68 $146.76 $151.98 $159.45
SIC 737 $100.00 $118.57 $129.52 $135.34 $141.68 $157.48 $160.61 $167.01
Datastream $100.00 $158.35 $303.33 $253.33 $290.00 $470.00 $403.33 $240.00
3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
------- ------- ------- -------- -------
Nasdaq $150.81 $178.45 $208.65 $195.72 $229.05
SIC 737 $155.02 $198.78 $217.39 $205.20 $271.22
Datastream $213.33 $206.67 $498.75 $413.33 $590.00
<PAGE>
PROPOSAL 2 -- APPROVAL OF THE PROPOSAL
TO ADOPT THE DATASTREAM SYSTEMS, INC.
1998 STOCK OPTION PLAN
On May 8, 1998, the Board of Directors adopted and recommended
for submission to the Company's stockholders for their approval
the Stock Option Plan. The purpose of the Stock Option Plan is
to (i) provide incentives to selected employees and consultants
of the Company and its Subsidiaries to stimulate their efforts
toward the continued success of the Company and to operate and
manage the business of the Company in a manner that will provide
for the long-term growth and profitability of the Company, (ii)
encourage stock ownership by selected employees and consultants
by providing them with a means to acquire a proprietary interest
in the Company and (iii) provide a means of obtaining, rewarding
and retaining valuable employees and consultants. The Board has
reserved 500,000 shares of Common Stock for grants of options
under the Stock Option Plan.
The primary features of the Stock Option Plan are summarized
below. This summary is qualified in its entirety by reference to
the specific provisions of the Stock Option Plan, the full text
of which is set forth as Appendix A to this Proxy Statement.
Stock Option Plan Summary and Other Information
General. Under the Stock Option Plan, options may be granted
to employees and consultants of the Company and its Subsidiaries
(as defined in the Stock Option Plan), provided, however, that an
incentive stock option may only be granted to an employee of the
Company or a Subsidiary. Presently, there are approximately 481
persons eligible to receive grants of options under the Stock
Option Plan, subject to the Compensation Committee's approval of
individual grants.
The Stock Option Plan offers to these participants
("Participants" or, individually, a "Participant") the
opportunity to purchase shares of Common Stock through stock
options granted to them under the Stock Option Plan. A stock
option entitles the optionee to purchase shares of Common Stock
from the Company at the exercise price for that stock option.
Two types of options - incentive stock options ("ISOs") and
non-qualified stock options - may be granted under the Stock
Option Plan. The two types of options differ primarily in the
tax consequences associated with the exercise of an option and
the disposition of the shares of Common Stock received upon
exercise of an option. See "--Certain Federal Income Tax
Consequences." No Participant may be granted options that relate
to more than 200,000 shares of Common Stock during any one-year
period.
Grants Under the Stock Option Plan. The Compensation
Committee, which is comprised of two or more Non-Employee
Directors (as defined in the Stock Option Plan) appointed by the
Board of Directors, administers the Stock Option Plan and
designates Participants to whom options are granted, specifies
whether the option is intended to be an ISO or a non-qualified
stock option and specifies the number of shares of Common Stock
subject to each option. All options granted under the Stock
Option Plan are evidenced by stock option agreements ("Stock
Option Agreements" or, individually, a "Stock Option Agreement")
that are subject to the applicable provisions of the Stock Option
Plan and to such other terms, conditions and restrictions as the
Compensation Committee may determine to be appropriate. At the
time any ISO granted under the Stock Option Plan is exercised,
the Company shall be entitled to legend the certificates
representing the shares of Common Stock purchased pursuant to the
ISO to clearly identify them as representing the shares purchased
upon the exercise of an ISO.
In the case of ISOs, the aggregate Fair Market Value (as
defined in the Stock Option Plan) of Common Stock with respect to
which stock options intended to be ISOs become exercisable for
the first time by an individual during any calendar year under
all plans of the Company and its subsidiaries may not exceed
$100,000; provided further, that if the limitation is exceeded,
the ISOs granted under the Stock Option Plan that cause the
limitation to be exceeded are treated as non-qualified stock
options.
The Compensation Committee has not yet determined which
employees or consultants of the Company will receive options
under the Stock Option Plan or the number of shares of Common
Stock underlying any such grants. However, set forth below is
the number of incentive and non-qualified stock options that had
been granted to certain employees of the Company under the
Company's Amended and Restated 1995 Stock Option Plan and that
remained outstanding as of December 31, 1997. The closing sales
price reported by the Nasdaq National Market of the Company's
Common Stock on May 5, 1998 was $20.88 per share.
Incentive Non-qualified
Name Options Granted Options Granted
Larry G. Blackwell.......... 121,522(1) 26,478(2)
John F. Christ.............. 78,570(2) 28,764(2)
John M. Sterling, III....... 105,236(2) 28,764(2)
All Executive Officers
as a Group (4 Persons)..... 383,898(3) 112,770(2)
All Other Employees(4)...... 1,066,130(5) 895,358(5)
______________________
(1) Options granted become exercisable in one-fifth increments
on the first, second, third, fourth and fifth anniversaries of
the date of grant and expire five years from the date of grant
or earlier if the optionee dies or ceases to be employed by the
Company.
(2) Options granted become exercisable in one-third increments
on the first, second and third anniversaries of the date of
grant and expire ten years from the date of grant or earlier if
the optionee dies or ceases to be employed by the Company.
(3) 121,522 of such options granted become exercisable in
one-fifth increments on the first, second, third, fourth and
fifth anniversaries of the date of grant and expire five years
from the date of grant or earlier if the optionee dies or
ceases to be employed by the Company. The remainder of such
options become exercisable in one-third increments on the
first, second and third anniversaries of the date of grant and
expire ten years from the date of grant or earlier if the
optionee dies or ceases to be employed by the Company.
(4) These figures represent (i) grants of options to 39
employees in connection with the Company's initial public
offering that are still outstanding and (ii) grants of options
to 312 employees thereafter that are still outstanding. This
figure was adjusted to reflect both the recapture of 148,968
options pursuant to employee terminations and the exercise of
280,384 options by employees as of December 31, 1997.
(5) Options granted become exercisable in varying annual
increments following the date of grant and expire ten years
from the date of grant or earlier if the optionee dies or
ceases to be employed by the Company.
Exercise Price. The price per share for Common Stock purchased
upon the exercise of an option granted under the Stock Option
Plan (the "exercise price") is determined by the Compensation
Committee on the date the option is granted and set forth in the
applicable Stock Option Agreement. The exercise price of an ISO
generally may not be less than the Fair Market Value of a share
of Common Stock on the date the option is granted. With respect
to each grant of an ISO to a Participant who beneficially owns
more than 10% of the combined voting power of the Company or any
of its Subsidiaries (determined by applying certain attribution
rules), the exercise price may not be less than 110% of the Fair
Market Value of the Common Stock on the date the option is
granted. The preceding exercise price requirements do not apply
to non-qualified stock options.
Exercise and Payment. An option may be exercised in accordance
with the Stock Option Plan and such other terms and conditions as
the Compensation Committee may prescribe. Each option is
exercisable by the Participant at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the
Compensation Committee shall specify in the Stock Option
Agreement; provided, however, that subsequent to the grant of an
option, the Compensation Committee, at any time before complete
termination of such option, may accelerate the time or times at
which such option may be exercised in whole or in part, and may
permit the Participant or any other designated person to exercise
the option, or any portion thereof, for all or part of the
remaining option term, notwithstanding any provision of the Stock
Option Agreement to the contrary. Further, upon a "Change of
Control" of the Company (as defined in the Stock Option Plan),
any outstanding stock options granted under the Stock Option Plan
will become immediately exercisable in full.
The maximum period during which an ISO may be exercised is
determined by the Compensation Committee on the date of grant,
but may not be longer than ten years, provided that, any ISO
granted to a Participant who beneficially owns more than 10% of
the combined voting power of the Company or any of its
Subsidiaries (determined by applying certain attribution rules)
may not be exercisable after the expiration of five years after
the date of grant. The term of any ISO or non-qualified stock
option is as specified in the applicable Stock Option Agreement.
The preceding term requirements do not apply to non-qualified
stock options. An option is deemed to be exercised on the date
that the exercise price is paid to the Company.
The exercise price must be paid in cash or a cash equivalent
authorized by the Compensation Committee in the Stock Option
Agreement. If the Stock Option Agreement so provides, the
payment of all or part of the exercise price may be made by
surrendering shares of Common Stock that have been owned by the
Participant for at least six months prior to the date of exercise
to the Company, provided that the shares surrendered have a Fair
Market Value (determined as of the day preceding the date of
exercise) that is not less than the exercise price or part
thereof. The exercise price may also be paid by having the
Company withhold a number of shares, the Fair Market Value of
which is sufficient to satisfy the exercise price or part thereof.
Administration. The Stock Option Plan is administered by the
Compensation Committee of the Board of Directors. Compensation
Committee members generally may not be employees of or
consultants to the Company or its Subsidiaries and serve at the
pleasure of the Board of Directors. All members of the
Compensation Committee serve for such terms as the Board of
Directors determines and are appointed and may be removed only by
the Board of Directors. The Compensation Committee has the
authority to interpret all provisions of the Stock Option Plan;
to prescribe the form of Stock Option Agreements; to adopt, amend
and rescind rules and regulations pertaining to the
administration of the Stock Option Plan; and to make all other
determinations necessary or advisable for the administration of
the Stock Option Plan. The Compensation Committee's
determinations under the Stock Option Plan need not be uniform
and may be made by it selectively among persons who receive, or
are eligible to receive, grants under the Stock Option Plan
(whether or not such persons are similarly situated).
Certain Federal Income Tax Consequences
The following discussion outlines the federal income tax
consequences of participation in the Stock Option Plan.
Individual circumstances may vary these results. The federal
income tax law and regulations are frequently amended, and each
Participant should rely on his or her own tax counsel for advice
regarding the federal income tax consequences of participation in
the Stock Option Plan.
Federal Income Tax Treatment of ISOs. A Participant generally
will not recognize taxable income on the grant or the exercise of
an ISO (although the exercise of an ISO can increase the
Participant's alternative minimum tax liability, which can result
in additional income taxes from the exercise of an ISO). A
Participant will recognize taxable income if and when he disposes
of the shares of Common Stock acquired under the ISO. If the
disposition occurs more than two years after the grant of the ISO
and more than one year after the shares are transferred to the
Participant on exercise of the ISO (the "ISO holding period"),
the Participant will recognize as capital gain or loss the
difference between the amount realized from disposition of the
Common Stock and the Participant's tax basis in that Common
Stock. A Participant's tax basis in the Common Stock generally
is the cash the Participant paid for the stock on exercise of the
ISO.
If Common Stock acquired under an ISO is disposed of before the
expiration of the ISO holding period (a "disqualifying
disposition"), a Participant generally will recognize as ordinary
income in the year of the disqualifying disposition the
difference between the Fair Market Value of the Common Stock on
the date of exercise of the ISO and the exercise price paid by
the Participant. Any additional gain will be treated as
long-term or short-term capital gain, depending on the length of
time the Participant held the shares of Common Stock.
A special rule applies to a disqualifying disposition of Common
Stock in which the amount realized on the disposition is less
than the Fair Market Value of the Common Stock on the date of
exercise of the ISO. In that event, the Participant generally
will recognize as ordinary income the difference between the
amount realized on the disposition of the Common Stock and the
exercise price in lieu of the ordinary income amount described
above for a disqualifying disposition. Any additional loss will
be treated as a long-term or short-term capital loss, depending
on the length of time the Participant held the shares of Common
Stock.
The Company generally will not be entitled to a federal income
tax deduction with respect to the grant or exercise of an ISO.
In the event a Participant disposes of Common Stock acquired
under an ISO before the expiration of the ISO holding period, the
Company generally will be entitled to a federal income tax
deduction equal to the amount of ordinary income recognized by
the Participant.
Federal Income Tax Treatment of Non-qualified Options. A
Participant generally will not recognize any taxable income on
the grant of a non-qualified stock option. On the exercise of a
non-qualified stock option, where the Participant pays the
exercise price in cash, a Participant will recognize as ordinary
income the difference between the Fair Market Value of the Common
Stock acquired and the exercise price. A Participant's tax basis
in Common Stock acquired upon the exercise of a non-qualified
stock option is the cash paid for the stock plus any amounts
included in income with respect to the stock. The Participant's
holding period for the stock begins on the day the Common Stock
is acquired. Any gain or loss that a Participant realizes on a
subsequent disposition of Common Stock acquired upon the exercise
of a non-qualified stock option generally will be treated as
long-term or short-term capital gain or loss, depending on the
length of time the Participant held such shares. The amount of
the gain or loss will equal the difference between the amount
realized on the subsequent disposition and the Participant's tax
basis in his shares.
The exercise of a non-qualified stock option generally will
entitle the Company to claim a federal income tax deduction equal
to the amount of ordinary income recognized by the Participant.
The transfer of Common Stock to a Participant pursuant to the
exercise of a non-qualified stock option will constitute wages
for withholding and employment tax purposes in an amount equal to
the amount of income recognized by the Participant. Accordingly,
the Company will be required to withhold or obtain payment from
the Participant as each Stock Option Agreement permits for the
amount of required withholding and employment taxes.
A Participant's assignment of a non-qualified stock option to a
permitted assignee generally does not change the Participant's
income tax consequences. The Participant will still recognize
taxable income in the same manner from the permitted assignee's
exercise of the non-qualified stock option. Then, the assignee
will have a tax basis in the Common Stock acquired equal to the
cash paid for the Common Stock plus any amounts the Participant
included in income with respect to the Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE IN FAVOR OF THE PROPOSAL TO ADOPT
THE DATASTREAM SYSTEMS, INC.
1998 STOCK OPTION PLAN
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters to be
brought before the Annual Meeting. However, if any other matters
are properly brought before the Annual Meeting, the persons
appointed in the accompanying proxy intend to vote the Shares
represented thereby in accordance with their best judgment.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies on behalf of the
Company will be borne by the Company. The Company has engaged
Corporate Investor Communications, Inc. to assist it in the proxy
solicitation process and will pay such firm approximately $3,500
for its services (exclusive of postage fees). In addition,
directors, officers and other employees of the Company may,
without additional compensation except reimbursement for actual
expenses, solicit proxies by mail, in person or by
telecommunication. The Company will reimburse brokers,
fiduciaries, custodians and other nominees for out-of-pocket
expenses incurred in sending the Company's proxy materials to,
and obtaining instructions relating to such materials from,
beneficial owners.
INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP served as the Company's
independent auditors for the fiscal year ended December 31, 1997
and the Board of Directors has reappointed this firm as the
Company's independent auditors for the fiscal year ending
December 31, 1998. A representative of this firm is expected to
attend the Annual Meeting to respond to questions from
stockholders and to make a statement if he or she so desires.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal that a stockholder may desire to have included
in the Company's proxy materials for presentation at the 1999
annual meeting of stockholders must be received by the Company at
its executive offices at 50 Datastream Plaza, Greenville, South
Carolina 29605, Attention: Mr. Daniel H. Christie, on or prior to
January 12, 1999.
ANNUAL REPORT
The Company's 1997 Annual Report to Stockholders (which is
not part of the Company's proxy soliciting material) is being
mailed to the Company's stockholders with this proxy statement.
By order of the Board of Directors,
/s/ Larry G. Blackwell
Larry G. Blackwell
Chairman, President and Chief
Executive Officer
Greenville, South Carolina
May 12, 1998
<PAGE>
APPENDIX A
DATASTREAM SYSTEMS, INC.
1998 STOCK OPTION PLAN
SECTION I. DEFINITIONS
Whenever used herein, the masculine pronoun shall be deemed
to include the feminine, and the singular to include the plural,
unless the context clearly indicates otherwise, and the following
capitalized words and phrases are used herein with the meaning
thereafter ascribed:
1.1 "Board" means the Board of Directors of the Company.
1.2 "Change of Control" means (i) an acquisition by any
individual, entity or group (within the meaning of Sections
13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership of 50 percent or more of the total
outstanding Voting Securities of the Company, other than any
acquisition by the Company or any employee benefit plan that the
Company sponsors, (ii) any sale, exchange, merger, consolidation,
reorganization, tender offer for shares of Stock or other similar
business transaction involving the Company (a "business
transaction"), unless, following such business transaction, more
than 50 percent of the total outstanding Voting Securities of the
Company (or other entity surviving such business transaction) is
then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were beneficial owners of
the Voting Securities of the Company immediately before such
business transaction, and (iii) the sale or other disposition of
all or substantially all of the assets of the Company, other than
to a corporation with respect to which following such sale or
other disposition more than 50 percent of the total outstanding
Voting Securities of such corporation is then beneficially owned,
directly or indirectly, by all or substantially all of the
Persons who were beneficial owners of the Voting Securities of
the Company immediately before such sale or other disposition.
1.3 "Code" means the Internal Revenue Code of 1986, as
amended.
1.4 "Committee" means the committee consisting of two or
more Non-Employee Directors appointed by the Board to administer
the Plan.
1.5 "Company" means Datastream Systems, Inc., a Delaware
corporation.
1.6 "Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as
security, inter vivos or testamentary, with or without
consideration, voluntary or involuntary.
1.7 "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
1.8 "Exercise Price" means the price per share of Stock
purchasable under any Option.
1.9 "Fair Market Value" with regard to a date means the
closing price at which Stock shall have been sold on the last
trading date prior to that date as reported by the Nasdaq
National Market System (or, if applicable, as reported by a
national securities exchange selected by the Committee on which
the shares of Stock are then actively traded) and published in
The Wall Street Journal; provided that, for purposes of granting
Options other than incentive stock options, Fair Market Value of
the shares of Stock may be determined by the Committee by
reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the
shares of Stock (if settlement of an award is triggered by such
an event) or to any other reasonable measure of fair market
value. If at the time of the determination of Fair Market Value
shares of Stock are not actively traded on any market described
above, Fair Market Value means the fair market value of a share
of Stock as determined by the Committee taking into account such
facts and circumstances deemed to be material by the Committee to
the value of the Stock in the hands of the Participant; provided,
however, for purposes of determining the Option price per share
for an incentive stock option, Fair Market Value shall be
determined by the Committee without regard to any restriction
other than a restriction which, by its terms, will never lapse.
Fair Market Value as determined by the Committee shall be final,
binding and conclusive upon each Participant.
1.10 "Non-Employee Director" means a director who (i) is not
a current employee or officer of the Company or any of its
Subsidiaries, and has never been an officer of the Company or any
of its Subsidiaries, (ii) does not receive compensation, either
directly or indirectly, from the Company or any of its
Subsidiaries for services rendered in any capacity other than as
a director, (iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to
Regulation S-K 404(a) promulgated under the Exchange Act, and
(iv) is not engaged in any business relationship for which
disclosure would be required pursuant to Regulation S-K 404(b)
promulgated under the Exchange Act.
1.11 "Option" means a non-qualified stock option or an
incentive stock option.
1.12 "Over 10% Owner" means an individual who at the time an
incentive stock option is granted owns Stock possessing more than
10% of the total combined voting power of the Company or one of
its Subsidiaries, determined by applying the attribution rules of
Code Section 424(d).
1.13 "Participant" means an individual who receives an
Option hereunder.
1.14 "Plan" means the Datastream Systems, Inc. 1998 Stock
Option Plan.
1.15 "Securities Act" means the Securities Act of 1933, as
amended from time to time.
1.16 "Stock" means the Company's common stock, $.01 par
value.
1.17 "Stock Option Agreement" means an agreement between the
Company and a Participant or other documentation evidencing an
award of an Option.
1.18 "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, at the time of the granting of an Option, each of the
corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in the chain.
1.19 "Voting Securities" means the shares of capital stock
of an entity entitled to vote generally in the election of that
entity's directors.
SECTION 2. THE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a)
provide incentive to selected employees and consultants of the
Company and its Subsidiaries to stimulate their efforts toward
the continued success of the Company and to operate and manage
the business of the Company in a manner that will provide for the
long-term growth and profitability of the Company; (b) encourage
stock ownership by selected employees and consultants by
providing them with a means to acquire a proprietary interest in
the Company; and (c) provide a means of obtaining, rewarding and
retaining select employees and consultants.
2.2 Stock Subject to the Plan. Subject to adjustment in
accordance with Section 4.2 hereof, 500,000 shares of Stock (the
"Maximum Plan Shares") are hereby reserved exclusively for
issuance pursuant to Options. At no time shall the Company have
outstanding Options and shares of Stock issued in respect of
Options granted under this Plan in excess of the Maximum Plan
Shares; for this purpose, the shares of Stock attributable to the
nonvested, unpaid, unexercised, unconverted or otherwise
unsettled portion of any Option that is forfeited or canceled or
expires or terminates for any reason without becoming vested,
paid, exercised, converted or otherwise settled in full shall
again be available for purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be
administered by the Committee. The Committee shall have full
authority in its discretion to determine the persons to whom
Options shall be granted and the terms and provisions of Options,
subject to the Plan. Subject to the provisions of the Plan, the
Committee shall have full and conclusive authority to interpret
the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of
the respective Stock Option Agreements, to accelerate the time at
which Options can be exercised, and to make all other
determinations necessary or advisable for the proper
administration of the Plan. The Committee's determinations under
the Plan need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards
under the Plan (whether or not such persons are similarly
situated). The Committee's decisions shall be final and binding
on all Participants.
2.4 Eligibility and Limits. Options may be granted only to
employees and consultants of the Company and its Subsidiaries;
provided, however, that an incentive stock option may only be
granted to an employee of the Company or any Subsidiary. Only
directors who are also employees of the Company may receive
grants of Options under this Plan. In the case of incentive
stock options, if the aggregate Fair Market Value (determined as
of the date an incentive stock option is granted) of Stock with
respect to which Options intended to meet the requirements of
Code Section 422 become exercisable for the first time by an
individual during any calendar year under all plans of the
Company and its Subsidiaries exceeds $100,000, then the number of
incentive stock option(s) granted under this Plan which cause the
$100,000 limitation to be exceeded shall be treated as
non-qualified stock option(s).
SECTION 3. TERMS OF OPTIONS
3.1 Terms and Conditions of Options. No more than 500,000
shares of Stock shall be reserved and available for issuance as
Options under the Plan.
3.1.1 Number of Option Shares. The number of shares of
Stock as to which an Option shall be granted shall be
determined by the Committee in its sole discretion, subject
to the provisions of Section 2.2 as to the total number of
shares available for grants under the Plan. Notwithstanding
the preceding, to the extent required under Section 162(m)
of the Code and the regulations thereunder for compensation
to be treated as qualified performance-based compensation,
the maximum number of shares of Stock with respect to which
Options may be granted during any one year period to any
employee shall not exceed 200,000.
3.1.2 Stock Option Agreement. Each Option shall be
evidenced by a Stock Option Agreement in such form and
containing such terms, conditions and restrictions as the
Committee may determine to be appropriate. Each Stock
Option Agreement shall be subject to the terms of the Plan
and any provisions contained in the Stock Option Agreement
that are inconsistent with the Plan shall be null and void.
3.1.3 Type of Option. At the time any Option is
granted, the Committee shall determine whether the Option is
intended to be an incentive stock option described in Code
Section 422 or a non-qualified stock option that is not
governed by Code Section 422, and the Option shall be
clearly identified as to its status as an incentive stock
option or a non-qualified stock option. At the time any
incentive stock option granted under the Plan is exercised,
the Company shall be entitled to legend the certificates
representing the shares of Stock purchased pursuant to the
Option to clearly identify them as representing the shares
purchased upon the exercise of an incentive stock option.
An incentive stock option may only be granted within 10
years from the earlier of the date the Plan is adopted by
the Board or approved by the Company's stockholders.
3.1.4 Exercise Price. Subject to adjustment in
accordance with Section 4.2 and the other provisions of this
Section 3, the Exercise Price of an Option shall be as set
forth in the applicable Stock Option Agreement.
Notwithstanding the preceding, the Exercise Price under an
incentive stock option shall not be less than the Fair
Market Value of the underlying Stock on the date the Option
is granted, and with respect to each grant of an incentive
stock option to a Participant who is an Over 10% Owner, the
Exercise Price shall not be less than 110% of the Fair
Market Value of the underlying Stock on the date the Option
is granted.
3.1.5 Option Term. Any incentive stock option granted
to a Participant who is not an Over 10% Owner shall not be
exercisable after the expiration of 10 years after the date
the Option is granted. Any incentive stock option granted
to a Participant who is an Over 10% Owner shall not be
exercisable after the expiration of five years after the
date the Option is granted. The term of any non-qualified
stock option shall be as specified in the applicable Stock
Option Agreement.
3.1.6 Payment. Payment for all shares of Stock
purchased pursuant to the exercise of an Option shall be
made in any form or manner authorized by the Committee in
the Stock Option Agreement, including, but not limited to,
(i) cash, (ii) by delivery to the Company of a number of
shares of Stock which have been owned by the Participant for
at least six months prior to the date of exercise having an
aggregate Fair Market Value of not less than the product of
the Exercise Price multiplied by the number of shares the
Participant intends to purchase upon exercise of the Option
on the date of delivery; (iii) in a cashless exercise
through a broker; or (iv) by having a number of shares of
Stock withheld, the Fair Market Value of which as of the
date of exercise is sufficient to satisfy the Exercise
Price. In its discretion, the Committee also may authorize
(at the time an Option is granted or thereafter) Company
financing to assist the Participant as to payment of the
Exercise Price on such terms as may be offered by the
Committee in its discretion. Any such financing shall
require the payment by the Participant of interest on the
amount financed at a rate not less than the "applicable
federal rate" under the Code. If a Stock Option Agreement
so provides, the Participant may be granted a new Option to
purchase a number of shares of Stock equal to the number of
previously-owned shares of Stock tendered in payment for
each share of Stock purchased pursuant to the terms of the
Stock Option Agreement. Any such new Option shall be
subject to the terms and conditions of the Stock Option
Agreement pursuant to which such new Option is granted.
Payment of the Exercise Price shall be made at the time the
Option or any part thereof is exercised, and no shares of
Stock shall be issued or delivered upon exercise of an
Option until full payment has been made by the Participant.
The holder of an Option, as such, shall have none of the
rights of a stockholder until delivery of the certificate(s)
representing the Stock the Participant has purchased.
3.1.7 Conditions to the Exercise of an Option. Each
Option shall be exercisable by the Participant at such time
or times, or upon the occurrence of such event or events,
and in such amounts, as the Committee shall specify in the
Stock Option Agreement; provided, however, that subsequent
to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the time
or times at which such Option may be exercised in whole or
in part, and may permit the Participant or any other
designated person to exercise the Option, or any portion
thereof, for all or part of the remaining Option term,
notwithstanding any provision of the Stock Option Agreement
to the contrary.
3.1.8 Termination of Incentive Stock Option. With
respect to an incentive stock option, in the event of
termination of employment of a Participant for any reason
other than death or disability, the Option or portion
thereof held by the Participant which is unexercised shall
expire, terminate, and become unexercisable no later than
the expiration of three months after the date of termination
of employment; provided, however, that in the case of a
holder whose termination of employment is due to death or
disability ("disability" meaning "disabled" within the
meaning of Code Section 22(e)(3)), one year shall be
substituted for such three month period. For purposes of
this Subsection 3.1.8, termination of employment of the
Participant shall not be deemed to have occurred if the
Participant is employed by another corporation (or a parent
or subsidiary corporation of such other corporation) which
has assumed the incentive stock option of the Participant in
a transaction to which Code Section 424(a) is applicable.
3.1.9 Special Provisions for Certain Substitute
Options. Notwithstanding anything to the contrary in this
Section 3, any Option issued in substitution for an option
previously issued by another entity, which substitution
occurs in connection with a transaction to which Code
Section 424(a) is applicable, may provide for an exercise
price computed in accordance with such Code Section and the
regulations thereunder and may contain such other terms and
conditions as the Committee may prescribe to cause such
substitute Option to contain as nearly as possible the same
terms and conditions (including the applicable vesting and
termination provisions) as those contained in the
previously-issued option being replaced thereby.
3.1.10 Date of Grant. The date an Option is granted
shall be the date on which the Committee has approved the
terms and conditions of the Option and has determined the
recipient of the Option and the number of shares covered by
the Option and has taken all such other action necessary to
complete the grant of the Option.
3.1.11 Nonassignability. Options shall not be
transferable or assignable except by will or by the laws of
descent and distribution. Such Options shall be
exercisable, during the Participant's lifetime, only by the
Participant; or in the event of the death of the
Participant, by the legal representatives of the
Participant's estate or if no legal representative has been
appointed, by the successor in interest determined under the
Participant's will. Notwithstanding the two prior
sentences, however, if the applicable Stock Option Agreement
so provides, a Participant may assign all or any portion of
an Option granted to him that is not an incentive stock
option to (i) his spouse or lineal descendants, (ii) one or
more trusts for the benefit of his spouse or lineal
descendants, (iii) a partnership of which his spouse or
lineal descendants are the only partners, or (iv) a tax
exempt organization as described in Section 501(c)(3) of the
Code, as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. In
that event, the spouse, lineal descendant, trust,
partnership or tax exempt organization will be entitled to
all of the rights of the Participant with respect to the
assigned portion of such Option, and such Option will
continue to be subject to all of the terms and conditions
that governed the Option during the period that it was held
by the Participant; provided, however, that such assignee
may not further assign the Option except by will or by the
laws of descent and distribution. Any such assignment will
be permitted only if the Participant does not receive any
consideration therefore. Additionally, in order for an
assignment by a Participant to be effective, (i) at least 30
days prior to the date of assignment, the Participant must
notify the Company in writing of the date of the assignment,
the Option or portion thereof to be assigned and the name,
address, telephone number and social security or employer
identification number of the assignee, (ii) at the time of
assignment, the Participant must execute an appropriate
written agreement that the Company provides to evidence the
assignment and to agree to remit any applicable withholding
the Company may require and (iii) at the time of assignment,
the assignee pursuant to a written agreement that the
Company provides must agree to be bound by the same terms
and conditions that governed the Option during the period it
was held by the Participant.
3.2 Treatment of Option Upon Termination of Employment.
Except as otherwise provided by Plan Subsection 3.1.8, any Option
granted to a Participant whose employment with the Company has
been terminated may be canceled, accelerated or continued, as
provided in the applicable Stock Option Agreement, or, in the
absence of such provision, as the Committee may determine. The
portion of any grant exercisable in the event of continuation may
be adjusted by the Committee to reflect the Participant's period
of service from the date of grant through the date of the
Participant's termination of employment or such other factors as
the Committee determines are relevant to its decision to continue
the award.
SECTION 4. GENERAL PROVISIONS
4.1 Withholding. Whenever the Company proposes or is
required to issue or transfer shares of Stock under the Plan, the
Company shall require the recipient to remit to the Company, as a
condition to exercising the Option, an amount sufficient to
satisfy any federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such
shares. A Participant may pay the withholding tax: (i) in cash;
(ii) if the Stock Option Agreement so provides, by delivery to
the Company of a number of shares of Common Stock which has been
owned by the Participant for at least six months prior to the
date of exercise which, when multiplied by the Fair Market Value
of the shares of Stock determined as of the Tax Date (defined
below), is sufficient to satisfy federal, state and local, if
any, withholding taxes arising from exercise of an Option; or
(iii) if the Stock Option Agreement so provides, a Participant
may elect to have the number of shares of Stock he is to receive
reduced by the smallest number of whole shares of Stock which,
when multiplied by the Fair Market Value of the shares of Stock
determined as of the Tax Date is sufficient to satisfy federal,
state and local, if any, withholding taxes arising from exercise
of an Option (clauses (ii) and (iii) each being a "Withholding
Election"). A Participant may make a Withholding Election only
if both of the following conditions are met:
4.1.1 The Withholding Election must be made on or prior
to the date on which the amount of tax required to be
withheld is determined (the "Tax Date") by executing and
delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
4.1.2 Any Withholding Election made will be irrevocable
except on six months advance written notice delivered to the
Company; however, the Committee may in its sole discretion
disapprove and give no effect to the Withholding Election.
4.2 Changes in Capitalization; Merger; Liquidation.
4.2.1 The number of shares of Stock reserved for the
grant of Options; the number of shares of Stock reserved for
issuance upon the exercise or payment, as applicable, of
each outstanding Option; and the Exercise Price of each
outstanding Option shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock
resulting from a subdivision or combination of shares of
Stock or the payment of a stock dividend in shares of Stock
to holders of outstanding shares of Stock or any other
increase or decrease in the number of shares of Stock
outstanding effected without receipt of consideration by the
Company.
4.2.2 In the event of or in anticipation of a sale,
exchange, merger, consolidation, reorganization, tender
offer for shares of Stock or other similar business
transaction involving the Company, the Committee may make
such adjustments with respect to awards and take such other
action as it deems necessary or appropriate to reflect such
sale, exchange, merger, consolidation, reorganization,
tender offer or other similar business transaction
including, without limitation, the substitution of new
awards, the termination or adjustment of outstanding awards,
the acceleration of awards, or the removal of restrictions
on outstanding awards. Notwithstanding the foregoing
sentence, however, in the event of or in anticipation of a
sale, exchange, merger, consolidation, reorganization,
tender offer for shares of Stock or other similar business
transaction involving the Company that would result in a
Change of Control, any Option granted hereunder shall become
immediately exercisable in full, and shall remain so,
regardless of any provisions contained in the applicable
Stock Option Agreement with respect thereto limiting the
exercisability of the Option for any length of time or
terminating the Option prior to the expiration of its
remaining term, subject to all the terms hereof and of the
Stock Option Agreement with respect thereto not inconsistent
with this sentence. Any adjustment pursuant to this Section
4.2 may provide, in the Committee's discretion, for the
elimination without payment therefor of any fractional
shares that might otherwise become subject to any Option,
but shall not otherwise diminish the then-current value of
the Option.
4.2.3 The existence of the Plan and the Options granted
pursuant to the Plan shall not limit or otherwise adversely
affect in any way the right or power of the Company to make
or authorize any adjustment, reclassification,
reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any
issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or
any other corporate act or proceeding.
4.3 Cash Awards. The Committee may, at any time and in its
discretion, grant to any holder of an Option the right to
receive, at such times and in such amounts as determined by the
Committee in its discretion, a cash amount which is intended to
reimburse such person for all or a portion of the federal, state
and local income taxes imposed upon such person as a consequence
of the receipt of the Option or the exercise of rights thereunder.
4.4 Compliance with Code. All incentive stock options to
be granted hereunder are intended to comply with Code Section
422, and all provisions of the Plan and all incentive stock
options granted hereunder shall be construed in such a manner as
to effectuate that intent. However, no Option that is intended
to be an incentive stock option shall be invalid for failure to
qualify as an incentive stock option. A Participant shall notify
the Company of any sale or other Disposition of Stock acquired
pursuant to an incentive stock option if such sale or other
Disposition occurs (i) within two years of grant of the incentive
stock option or (ii) within one year of the issuance of the Stock
to the Participant. Such notice shall be in writing and directed
to the Secretary of the Company.
4.5 Right to Terminate Employment. Nothing in the Plan or
in any Option shall confer upon any Participant the right to
continue as an employee or consultant of the Company or any
Subsidiary or affect the right of the Company or any Subsidiary
to terminate the Participant's employment or other relationship
with the Company or any Subsidiary at any time.
4.6 Non-alienation of Benefits. Other than as specifically
permitted in Section 3.1.11, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge; and any
attempt to do so other than as specifically permitted thereunder
shall be void. No such benefit shall, prior to receipt, be in
any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the recipient.
4.7 Restrictions on Delivery and Sale of Shares; Legends.
Each Option is subject to the condition that if at any time the
Committee, in its discretion, shall determine that the listing,
registration or qualification of the shares covered by such
Option upon any securities exchange or under any state or federal
law is necessary or desirable as a condition of or in connection
with the granting of such Option, the assignment of such Option
or the purchase or delivery of shares thereunder, the delivery of
any or all shares pursuant to such Option may be withheld unless
and until such listing, registration or qualification shall have
been affected. If a registration statement is not in effect
under the Securities Act, or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise
deliverable under Options then outstanding, the Committee may
require, as a condition of assignment or exercise of the Option
or as a condition to any other delivery of Stock pursuant to an
Option, that the Participant or other recipient of an Option
represent, in writing, that the shares received pursuant to the
Option are being acquired for investment and not with a view to
distribution and agree that the shares will not be disposed of
except pursuant to an effective registration statement, unless
the Company shall have received an opinion of counsel that such
disposition is exempt from such requirement under the Securities
Act and any applicable state securities laws. The Company may
include on certificates representing shares delivered pursuant to
an Option such legends referring to the foregoing representations
or restrictions or any other applicable restrictions on resale as
the Company, in its discretion, shall deem appropriate.
4.8 Termination and Amendment of the Plan. The Board at
any time may amend or terminate the Plan without stockholder
approval; provided, however, that the Board may condition any
amendment on the approval of stockholders of the Company if such
approval is necessary or advisable with respect to tax,
securities or other applicable laws. No such termination or
amendment without the consent of the Participant holding an
Option shall adversely affect the rights of such Participant with
respect to such Option.
4.9 Choice of Law. The laws of the State of Delaware shall
govern the Plan, to the extent not preempted by federal law.
4.10 Effective Date of Plan. The Plan became effective on
May 8, 1998, the date of its approval by the Board, subject,
however, to the subsequent approval of the Plan by the Company's
stockholders within twelve months after the Board's approval of
the Plan.
<PAGE>
APPENDIX B
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF DATASTREAM SYSTEMS, INC.
The undersigned stockholder(s) of Datastream Systems, Inc.,
a Delaware corporation (the "Company"), hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement, each dated May 12, 1998, and hereby appoints Larry G.
Blackwell and Daniel H. Christie, or either of them, proxies and
attorneys-in-fact, with full power of substitution, on behalf and
in the name of the undersigned, to represent the undersigned at
the 1998 Annual Meeting of Stockholders of the Company to be held
at 2:00 p.m. Eastern Standard Time on Friday, June 12, 1998 at
The Embassy Suites Hotel, 670 Verdae Boulevard, Greenville, South
Carolina, 29607, and at any adjournment(s) thereof, and to vote
all shares of Common Stock which the undersigned would be
entitled to vote if then and there personally present, on the
matters set forth below:
(1) To elect the nominees listed below to serve as Class II
directors of the Company for a term ending in 2001:
Richard T. Brock and Ira D. Cohen
FOR the nominees WITHHOLD authority to
listed above, except vote for both of the
as indicated below. nominees listed above.
*To withhold authority for any individual nominee, mark
"FOR" above and write the name of the nominee as to
whom you wish to withhold authority in the space below:
_______________________________________________________
(2) To approve the proposal to adopt the Company's 1998 Stock Option
Plan.
FOR AGAINST ABSTAIN
(3) In their discretion, upon such other matter or matters which
may properly come before the meeting or any adjournment(s)
or postponement(s) thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY.
This Proxy, when properly executed, will be voted in accordance
with the directions given by the undersigned stockholder(s). If
no direction is made, it will be voted FOR Proposals 1 and 2
above and as the proxies deem advisable on such other matters
which may properly come before the meeting.
Dated
_______________________________,1998
_______________________________
Signature
_______________________________
Signature (if held jointly)
Title or authority (if applicable)
NOTE: Please sign exactly as name appears hereon. If
shares are registered in more than one name, the signature of all
such persons are required. A corporation should sign in its full
corporate name by a duly authorized officer, stating his or her
title. Trustees, guardians, executors and administrators should
sign in their official capacity, giving their full title as
such. If a partnership, please sign in the partnership name by
an authorized person.
<PAGE>
Kelly Ann. Carlos File No.: 50024.1
E-Mail: [email protected] Direct Dial:(404) 888-4211
May 12, 1998
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Datastream Systems, Inc.
Commission File Number: 0-25590
Definitive Proxy Materials
Ladies and Gentlemen:
On behalf of our client, Datastream Systems, Inc., a
Delaware corporation (the "Company"), we hereby include for
electronic filing pursuant to Regulation S-T the following:
1. Schedule 14A Cover Page;
2. The Company's Letter to Stockholders;
3. The Notice of Annual Meeting of Stockholders;
4. The Proxy Statement for the Annual Meeting of
Stockholders to be held on June 12, 1998 (the
"Proxy Statement"); and
5. The form of Proxy to be used for the Annual Meeting of
Stockholders to be held on June 12, 1998.
The Proxy materials will be first sent to Stockholders on or
about May 12, 1998.
Under separate cover the Company will submit, solely for the
Commission's information, seven copies of the Company's 1997
Annual Report to Stockholders (the "Annual Report"), which
comprises the Company's annual report to security holders
required by Rule 14a-3(b) under the Securities Exchange Act of
1934, as amended. The Company will also submit three copies of
the Annual Report to the Nasdaq Stock Market, Inc.
We have been advised that the financial statements contained
in the Annual Report do not reflect any significant changes in
the Company's accounting practices or policies. We have also
been advised that the Company intends to register the 500,000
shares under the Datastream Systems, Inc. 1998 Stock Option Plan
(proposal 2 of the Proxy Statement) pursuant to a Form S-8
Registration Statement to be filed with the Securities and
Exchange Commission.
If you have any questions about the enclosed documents,
please contact the undersigned at 404/888-4211.
Very truly yours,
/s/ Kelly A. Carlos
Kelly A. Carlos
Enclosures
cc: Mr. Daniel H. Christie (via facsimile (864) 422-5000)
Ms. Mary Margaret Dragoun (via facsimile (864) 422-5000)
J. Stephen Hufford, Esq.
Ms. Stacy George
