SOURCE INFORMATION MANAGEMENT CO, DEF 14A, 2000-09-27

SOURCE INFORMATION MANAGEMENT CO
DEF 14A, 2000-09-27
DIRECT MAIL ADVERTISING SERVICES

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<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] 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.

The Source Information Management Company
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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 applies:

--------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

--------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

--------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

--------------------------------------------------------------------------------

(5) Total fee paid:

--------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2

THE SOURCE INFORMATION MANAGEMENT COMPANY
Two CityPlace Drive, Suite 380
St. Louis, Missouri 63141

--------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------------------------------------------------------------

To the Shareholders of September 22, 2000
The Source Information Management Company: St. Louis, Missouri

The Annual Meeting of the Shareholders of The Source Information Management
Company will be held on October 23, 2000 at 4:00 p.m. Central Standard Time in
the offices of the Company at Two CityPlace Drive, Suite 380, St. Louis,
Missouri 63141, for the following purposes:

1. To elect two class II directors to each serve a three-year term until
each director's successor has been elected and qualified;

2. To approve an amendment to the Company's 1995 Incentive Stock Option
Plan to increase the number of shares of Common Stock available under
the Stock Plan from 2,520,661 to 2,770,661;

3. To approve the Company's 1998 Omnibus Plan, as amended to increase the
number of shares of Common Stock available under the Omnibus Plan from
600,000 to 1,850,000; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Only shareholders of record at the close of business on September 18, 2000, will
be entitled to vote at the meeting. A list of all shareholders entitled to vote
at the annual meeting, arranged in alphabetical order and showing the address of
and number of shares held by each shareholder, will be available at the
principal office of The Source Information Management Company, Two CityPlace
Drive, Suite 380, St. Louis, Missouri 63141, during usual business hours, for
examination by any shareholder for any purpose germane to the annual meeting for
10 days prior to the date thereof. The list of shareholders will also be
available at the meeting for examination at any time during the meeting.

A copy of the Company's Annual Report for fiscal year 2000 accompanies this
notice.

By Order of the Board of Directors

/s/ W. Brian Rodgers

W. Brian Rodgers
Secretary

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN, DATE,
AND RETURN THE ACCOMPANYING PROXY PROMPTLY. A RETURN ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE.

<PAGE> 3
THE SOURCE INFORMATION MANAGEMENT COMPANY
Two CityPlace Drive, Suite 380
St. Louis, Missouri 63141
(314) 995-9040

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

The enclosed form of proxy is solicited by and on behalf of the Board of
Directors of The Source Information Management Company (the "Company"), for use
at the Annual Meeting of Shareholders to be held on October 23, 2000 in the
offices of the Company at Two CityPlace Drive, Suite 380, St. Louis, Missouri
63141, at 4:00 p.m. Central Standard Time and at any adjournments thereof. Each
shareholder giving the proxy has the power to revoke it any time before it is
exercised by notice in writing to the Secretary of the Company at the Company's
principal executive offices at Two CityPlace Drive, Suite 380, St. Louis,
Missouri 63141, by properly submitting to the Company a duly executed proxy
bearing a later date, or by attending the meeting and voting in person
(attendance at the meeting will not, in and of itself, revoke the proxy). The
proxy will be voted as specified by the shareholder in the spaces provided or,
if no specification is made, it will be voted for Proposals 1, 2 and 3.

This Proxy Statement and form of proxy are first being mailed to shareholders of
the Company on or around September 22, 2000. The solicitation of proxies is
being made primarily by the use of the mail. The cost of preparing and mailing
this Proxy Statement and accompanying materials, and the cost of any
supplementary solicitations, which may be made by mail, telephone, telegraph or
personally by officers and employees of the Company and its subsidiaries, will
be borne by the Company.

Only shareholders of record at the close of business on September 18, 2000, are
entitled to notice of, and to vote at, the Annual Meeting of Shareholders and
any adjournments thereof. On September 18, 2000 the Company had issued and
outstanding 17,834,283 shares of Common Stock. Each outstanding share is
entitled to one vote on each matter to be voted on at the Annual Meeting of
Shareholders. A majority of the outstanding shares of Common Stock present in
person or by proxy will constitute a quorum for the transaction of business at
the Annual Meeting of Shareholders. Votes cast by proxy or in person at the
Annual Meeting of Shareholders will be tabulated by the inspectors of election
appointed by the Board for the meeting.

Shares which are entitled to vote but which are not voted at the direction of
the beneficial owner ("abstentions") will be counted for the purpose of
determining whether there is a quorum for the transaction of business at the
Annual Meeting. Abstentions may be specified on each of Proposals 1, 2 and 3.

The affirmative vote of a majority of the shares voting at the meeting is
required for approval of an amendment to the Company's 1995 Incentive Stock
Option Plan (the "Stock Plan") and for ratification of adoption of, and approval
of an amendment to, the Company's 1998 Omnibus Plan (the "Omnibus Plan"). The
affirmative vote of a plurality of the shares voting at the meeting is required
for the election of directors. Votes withheld by brokers in the absence of
instructions ("broker non-votes") will not be counted with respect to, and will
have no effect on, whether the shareholders approve these proposals.
Abstentions, however, are counted in determining whether the shareholders have
approved proposals 2 and 3 and, thus, have the effect of a vote against the
proposals.

2
<PAGE> 4

PROPOSAL 1 - ELECTION OF TWO CLASS II DIRECTORS
INFORMATION ABOUT THE NOMINEES AND DIRECTORS CONTINUING IN OFFICE

The Company's Articles of Incorporation and Bylaws currently provide for three
classes of directors, each class serving for a three-year term expiring one year
after the term of the preceding class, so that the term of one class will expire
each year. The terms of the current Class III and Class I directors expire in
2001 and 2002, respectively. The Board of Directors has nominated Harry L.
"Terry" Franc, III and Kenneth F. Teasdale, who are currently Class II
directors, for election to each serve a three-year term expiring at the annual
meeting of shareholders in 2003. The following table sets forth certain
information concerning Mr. Franc and Mr. Teasdale and those directors who are
continuing in office.

NOMINEES FOR DIRECTOR - CLASS II
(TO BE ELECTED TO SERVE A THREE-YEAR TERM)

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----
<S> <C> <C> <C>
Harry L. "Terry" Franc, III 64 Director 1995
Kenneth F. Teasdale 65 Director 3/27/00
</TABLE>

Harry L. "Terry" Franc, III, has been a director of The Source since it
commenced operations in May 1995. Mr. Franc is one of the founders of Bridge
Information Systems, Inc. ("BIS"), a global provider of information services to
the securities industry and of BIS's subsidiary, Bridge Trading Company ("BTC"),
a registered broker-dealer and member of the New York Stock Exchange. Mr. Franc
has been Executive Vice President of BTC for more than 20 years and for more
than 20 years prior to 1995, served as a director and an Executive Vice
President of BIS. Mr. Franc is a member of the National Organization of
Investment Professionals. He is a director of TV House, Inc. and of the St.
Louis Community Foundation.

Kenneth F. Teasdale was appointed as a director of The Source in March 2000. Mr.
Teasdale has been the Chairman of Armstrong Teasdale LLP, a law firm, since 1993
and before that was Managing Partner from 1986 to 1993. He has been associated
with Armstrong Teasdale since 1964. Prior thereto, Mr. Teasdale served as
General Counsel to the Democratic Policy Committee of the United States Senate
beginning in 1962. In that position, he also served for three years as Legal
Assistant to the Majority Leader of the United States Senate. Mr. Teasdale is
Chairman of the Board of Regents for St. Louis University, Member of the Board
of Trustees for the St. Louis Science Center, member of the Board of Directors
for the United Way of Greater St. Louis, member of the Board of Trustees for St.
Louis University and member of the Board of Trustees for the St. Louis Art
Museum.

The Board of Directors recommends that shareholders vote "FOR" the election of
Messrs. Franc and Teasdale to the Company's Board of Directors.

3
<PAGE> 5

DIRECTORS CONTINUING IN OFFICE - CLASS III
(TERMS EXPIRING IN 2001)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----
<S> <C> <C> <C>
S. Leslie Flegel 63 Chairman and Chief Executive Officer of the Company 1995
William H. Lee 49 Director 1995
Robert O. Aders 73 Director 1999
</TABLE>

S. Leslie Flegel has been the Chairman of the Board of Directors and Chief
Executive Officer of The Source since its inception in March 1995. For more than
14 years prior thereto, Mr. Flegel was the principal owner and Chief Executive
Officer of Display Information Systems Company, a predecessor of The Source. S.
Leslie Flegel is the father of Jason S. Flegel, The Source's Executive Vice
President, Information Services. Mr. Flegel is a director of eRoomSystem
Technologies, Inc.

William H. Lee has been a director of The Source since its inception in March
1995. Since March 1999 he has served as Chairman of the Executive Committee. For
approximately 14 years prior thereto, Mr. Lee was the principal owner and Chief
Executive Officer of Periodical Marketing and Management, Inc., a predecessor of
The Source.

Robert O. Aders was appointed as a director in March 1999. He is Chairman and
Chief Executive Officer of the Advisory Board, Inc. (an international consulting
organization) and a member of the Board of Directors of Food Marketing
Institute, where he served from its founding in 1976 until his retirement in
1993. Mr. Aders was the Acting Secretary of Labor in the Ford administration, is
a former advisor to the White House Office of Emergency Preparedness and has
served on the U.S. Wage and Price Commission and as a Vice Chairman of the
National Business Council for Consumer Affairs. From 1970 to 1974, Mr. Aders was
Chairman of the Board of the Kroger Company, where he served in various
executive positions beginning in 1957. Mr. Aders is also a member of the Board
of Directors of Coinstar, Inc., P&J Brands, Spar Group, Inc. and Telepanel
Systems, Inc.

DIRECTORS CONTINUING IN OFFICE - CLASS I
(TERMS EXPIRING IN 2002)

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----
<S> <C> <C> <C>
Aron Katzman 62 Director 1995
Randall S. Minix 50 Director 1999
James R. Gillis 47 President and Chief Operating Officer of the Company 3/27/00
</TABLE>

Aron Katzman has served as a director of The Source since it commenced
operations in May 1995. Mr. Katzman was a founder of Medicine Shoppe
International, Inc. (Nasdaq) and served on its Board of Directors until it was
purchased by Cardinal Health (NYSE) in 1994. Until its sale in May 1994, Mr.
Katzman served as the Chairman and Chief Executive Officer of Roman Company, a
manufacturer and distributor of fashion custom jewelry. Mr. Katzman is a member
of the board of directors of Foto, Inc. and Southern Internet, Inc. Presently,
Mr. Katzman is Chairman and Chief Executive Officer of Decorating Den of
Missouri.

Randall S. Minix has served as a director of The Source since it commenced
operations in May 1995. For more than six years, Mr. Minix has been the managing
partner of Minix, Morgan & Company, L.L.P., an independent accounting firm
headquartered in Greensboro, North Carolina.

James R. Gillis became President of The Source in December 1998, was appointed
as a director of The Source in March 2000 and became President and Chief
Operating Officer in August 2000. Prior thereto, he was President and Chief
Executive Officer of Brand Manufacturing Corporation.

4
<PAGE> 6

Each member of the Board of Directors of the Company serves in such capacity for
a three-year term or until a successor has been elected and qualified, subject
to earlier resignation, removal or death. The number of directors comprising the
Board of Directors may be increased or decreased by resolution adopted by the
affirmative vote of a majority of the Board of Directors. The Company's Articles
of Incorporation and Bylaws provide for three classes of directorships serving
staggered three year terms such that approximately one-third of the directors
are elected at each annual meeting of shareholders. During fiscal 2000, seven
meetings of the Board of Directors were held. Each director attended 75 percent
or more of the aggregate of (i) the total number of meetings held during fiscal
year 2000 and (ii) the total number of meetings held during such period by all
committees of the Board of Directors on which he served.

The Board of Directors evaluates and nominates qualified nominees for election
or appointment as Directors and qualified persons for selection as senior
officers. The Board of Directors will give appropriate consideration to a
written recommendation by a shareholder for the nomination of a qualified person
to serve as a Director of the Company, provided that such recommendation
contains sufficient information regarding the proposed nominee for the Board of
Directors to properly evaluate such nominee's qualifications to serve as
Director.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board has established an Audit Committee, a Compensation Committee, a
Finance Committee and an Acquisition Committee. During fiscal 2000, the Audit
Committee held four meetings and the Compensation Committee held seven meetings.
The duties and members of each of these committees are indicated below.

- The Audit Committee is comprised of two non-employee directors, presently
Messrs. Minix and Katzman, and has the responsibility of recommending the
firm that will serve as the Company's independent auditors, reviewing the
scope and results of the audit and services provided by the independent
auditors and meeting with the financial staff to review accounting
procedures and policies.

- The Compensation Committee is comprised of three non-employee directors,
presently Messrs. Katzman, Aders and Minix, and has been given the
responsibility of reviewing the Company's financial records to determine
overall compensation and benefits for executive officers and to establish
and administer the policies which govern employee salaries and benefit
plans.

- The Finance Committee is comprised of two directors, Messrs. Franc and
Katzman. The Finance Committee has been given the responsibility of
monitoring the Company's capital structure, reviewing available alternatives
to satisfy the Company's liquidity and capital requirements and recommending
the firm or firms which will provide investment banking and financial
advisory services to the Company.

- The Acquisition Committee is comprised of four directors, presently Messrs.
Franc, Katzman, Aders and Minix, and has been given the responsibility of
monitoring the Company's search for attractive acquisition opportunities,
consulting with members of management to review plans and strategies for the
achievement of the Company's external growth objectives and recommending the
firm or firms that will serve as advisors to the Company in connection with
the evaluation of potential business combinations.

DIRECTOR COMPENSATION

Under the Company's present policy, each director of the Company who is not also
an employee receives $15,000 annually payable quarterly in either cash or shares
of Common Stock valued at 90% of the last reported sale price on the

5
<PAGE> 7

date of grant as of the payment date. Directors also annually receive options to
purchase 10,000 shares of Common Stock at an exercise price equal to the last
reported sale price on the date of grant. Directors are also entitled to be
reimbursed for expenses incurred by them in attending meetings of the Board and
its committees.

SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS

The following table sets forth as of August 31, 2000, certain information
concerning the ownership of Common Stock (1) by each person who is known to the
Company to own beneficially 5.0% or more of the outstanding Common Stock, (2) by
each director and current executive officer named in the compensation table and
(3) by all directors and executive officers as a group. As of August 31, 2000,
there were 17,834,283 shares of Common Stock outstanding.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------
NAME AND ADDRESS
OF BENEFICIAL OWNER NUMBER OF SHARES(1) PERCENT
------------------- ------------------- -------
<S> <C> <C>
Jonathan J. Ledecky 2,640,000(2) 14.8%
800 Connecticut Avenue NW, Suite 1111
Washington, D.C. 20006

FMR Corporation 1,753,000(3) 9.8
82 Devonshire Street
Boston, Massachusetts, 02109

S. Leslie Flegel 1,476,493(2)(4) 8.0
Two CityPlace Drive, Suite 380
St. Louis, Missouri 63141

Firstar Corporation 1,018,669(5) 5.7
425 Walnut Street
Cincinnati, Ohio 45201

William H. Lee 440,350(4) 2.5
711 Gallimore Dairy Road
High Point, North Carolina 27265

Aron Katzman 268,909(4) 1.5
10 Layton Terrace
St. Louis, Missouri 63124

Monte Weiner 134,502(4) *
10 Mountainview Road, S. Wing, Suite 301
Upper Saddle River, New Jersey 07458

Harry L. Franc, III 74,105(4) *
19 Briarcliff
St. Louis, Missouri 63124

James R. Gillis 75,168(4) *
10 Mountainview Road, S. Wing, Suite 301
Upper Saddle River, New Jersey 07458
</TABLE>

6
<PAGE> 8
<TABLE>
<S> <C> <C>
Kenneth F. Teasdale 45,483(4) *
33 Kingsbury Place
St. Louis, Missouri 63112

Randall S. Minix 34,686(4) *
5502 White Blossom Drive
Greensboro, North Carolina 27410

Robert O. Aders 25,000(4) *
132 S. Delancey Place
Atlantic City, NJ 08401

All directors and executive 2,950,850(2)(6) 15.6
officers as a group (16 persons)
</TABLE>
------------------------

*Less than 1%

(1) Under the rules of the Commission, the shares of the Company's Common
Stock which a person has the right to acquire within 60 days after
August 31, 2000 in connection with the exercise of stock options and
warrants are deemed to be outstanding for the purpose of computing
beneficial ownership and the percentage of ownership of that person.
(2) S. Leslie Flegel and Jonathan J. Ledecky entered into a Voting
Agreement on January 7, 1999, under which Mr. Ledecky granted a proxy
to Mr. Flegel to vote his shares of Common Stock with regard to certain
corporate matters. The number of shares shown for Mr. Flegel in the
table does not include Mr. Ledecky's shares.
(3) This amount, as of August 21, 2000, as reflected on correspondence from
FMR Corporation, consists of sole voting power with respect to -0-
shares, sole dispositive power with respect to 1,753,000 shares and no
shared voting or dispositive power.
(4) Includes exercisable options to acquire shares of Common Stock in the
following amounts per beneficial owner: S. Leslie Flegel -- 598,423
shares; William H. Lee -- 49,091 shares; Aron Katzman -- 20,000 shares;
Monte Weiner -- 133,334; Harry L. Franc, III -- 20,000 shares; James R.
Gillis -- 66,667; Kenneth F. Teasdale -- 10,000; Randall S. Minix --
20,000 shares; and Robert O. Aders -- 20,000 shares.
(5) This amount, as of August 21, 2000, as reflected on correspondence from
Firstar Corporation, consists of sole voting power with respect to
1,018,669 shares, sole dispositive power with respect to 1,018,669
shares and no shared voting or dispositive power.
(6) Includes options and warrants to acquire 203,545 shares of Common
Stock, excluded in the names indicated in the footnotes above.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during its most recent fiscal year and Form 5 and amendments
thereto, or written representations that no Form 5 is required, all executive
officers and directors of the Company timely filed with the Securities and
Exchange Commission all reports required by Section 16(a) of the Securities
Exchange Act of 1934 except that Mr. Cloeter filed a Form 3, Initial Statement
of Beneficial Ownership of Securities, more than 10 days after he became an
executive officer of the Company.

7
<PAGE> 9

EXECUTIVE OFFICERS

The following table sets forth certain information concerning the executive
officers of the Company who are not also directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Frank Bishop 49 Senior Vice President, Sales

James W. Brinkerhoff 57 Vice President, Human Resources

Cameron Cloeter 45 Executive Vice President, Strategic Planning and New Product Development

Dwight L. DeGolia 55 Executive Vice President, Special Projects

Jason S. Flegel 35 Executive Vice President, Information Services

W. Brian Rodgers 35 Secretary and Chief Financial Officer

Monte Weiner 50 President and Chief Executive Officer - Source Display
</TABLE>

FRANK BISHOP has served the Company since 1995, most recently as Senior
Vice-President of North American Sales. Prior to joining the Company, Mr. Bishop
served as The Director of Sales & Marketing for Triangle News Co., a wholesale
distributor of books and magazines.

JAMES W. BRINKERHOFF has served as Vice President, Human Resources since October
1999. Prior to joining the Company, Mr. Brinkerhoff was Vice President, Human
Resources and Administration for Ganes Chemical, Inc. from June 1995. Previous
to Ganes, Mr. Brinkerhoff was Director, Human Resources for Potters Industries,
Inc.

CAMERON CLOETER has served as Executive Vice President, Strategic Planning and
New Product Development since August 2000 and served as Executive Vice
President, Sales and Marketing from August 1999 until August 2000. For five
years prior thereto, Mr. Cloeter was Senior Vice President of Sales at
Time-Warner Inc.'s Time Distribution Services. Prior to joining Time
Distribution Services, Mr. Cloeter worked for M&M Mars for 15 years where his
last position was Director of Sales for the Eastern United States.

DWIGHT L. DEGOLIA has served as Executive Vice President, Special Projects since
the Company's commencement of operations in May 1995. For more than ten years
prior thereto, Mr. DeGolia served as Executive Vice President of Sales and
Marketing for DISC. From 1986 to 1993, Mr. DeGolia also served as a director of
Advanced Marketing Services, a leading supplier of books to wholesale clubs.

JASON S. FLEGEL has served as Executive Vice President, Information Services
since June 1996. Prior thereto, and since the Company's inception in March 1995,
Mr. Flegel served as Vice President - Western Region. For more than two years
prior thereto, Mr. Flegel was an owner and the Chief Financial Officer of DISC.
Jason S. Flegel is the son of S. Leslie Flegel.

8
<PAGE> 10

W. BRIAN RODGERS has served as Secretary and Chief Financial Officer since
October 1996. Prior to joining the Company, Mr. Rodgers practiced for seven
years as a certified public accountant with BDO Seidman, LLP.

MONTE WEINER has served as President and Chief Executive Officer -- Source
Display since August 2000. Prior thereto, Mr. Weiner served as Executive Vice
President and Chief Executive Officer -- Source Display from September 1999
until May 2000. For more than 15 years prior thereto, Mr. Weiner served as
President of TCE Corporation and Secretary and Treasurer of Brand Manufacturing
Corporation.

EXECUTIVE COMPENSATION

The following table summarizes information concerning cash and non-cash
compensation paid to or accrued for the benefit of the named executive officers,
in the fiscal years indicated, for all services rendered in all capacities to
the Company.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
NAME OF PRINCIPAL FISCAL UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION(1)($)
-------------------- ----- ---------- ---------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
S. Leslie Flegel 2000 $ 330,000 $ 140,000 525,000 $5,450
Chief Executive Officer 1999 260,857 23,795 360,000 5,450
1998 255,000 96,300 89,256 9,093

William H. Lee 2000 $ 246,430 $ 100,000 -- $2,847
Chief Administrative Officer 1999 246,430 23,795 -- 3,056
1998 245,494 70,382 49,091 3,056

Richard A. Jacobsen (2) 2000 $ 166,458 $ 512,902 375,000 $2,360
Chief Operating Officer 1999 -- -- -- --
1998 -- -- -- --

James R. Gillis 2000 $ 250,000 $ 150,000 -- $2,860
President 1999 21,308 -- 202,000 --
1998 -- -- -- --

Monte Weiner 2000 $ 150,000 $ 100,000 25,000 --
Executive Vice President & 1999 -- -- 100,000 --
CEO -- Source Display 1998 -- -- -- --
</TABLE>
----------

(1) In fiscal 2000, the estimated incremental cost to The Source of life
insurance premiums paid on behalf of Messrs. Flegel, Lee, Jacobsen, Gillis
and Weiner was $5,450, $2,847, $2,360, $2,860 and $0, respectively. In
fiscal 1999, the estimated incremental cost to The Source of life insurance
premiums paid on behalf of Messrs. Flegel, Lee, Jacobsen, Gillis and Weiner
was $5,450, $2,695, $0, $0 and $0. In fiscal 1998, the estimated
incremental cost to The Source of life insurance premiums paid on behalf of
Messrs. Flegel, Lee, Jacobsen, Gillis and Weiner was $9,093, $1,050, $0, $0
and $0, respectively.

(2) Mr. Jacobsen resigned in August 2000.

9
<PAGE> 11

OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation
Underlying Granted to Exercise or for Option Term
Options Employees in Base Price Expiration ------------------------------------
Name Granted # Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S. Leslie Flegel 125,000(1) 7% 11.41 3-15-04 394,047 870,740
S. Leslie Flegel 100,000(2) 6% 13.25 8-22-09 833,285 2,111,709
S. Leslie Flegel 100,000(3) 6% 15.00 7-28-09 943,342 2,390,614
S. Leslie Flegel 100,000(3) 6% 18.00 7-28-09 1,132,010 2,868,736
S. Leslie Flegel 100,000(3) 6% 21.60 7-28-09 1,358,412 3,442,484
Richard Jacobsen 375,000(4) 21% 10.94 3-23-09 2,580,040 6,538,328
Monte Weiner 25,000(5) 1% 13.25 8-23-09 208,321 527,927
---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Options were granted March 16, 1999 and vest in four equal annual
installments.
(2) Options were granted August 23, 1999 and vest in three equal annual
installments.
(3) Options were granted July 29, 1999 and are exercisable in three annual
installments.
(4) Options were granted March 24, 1999 and vest as follows: 50,000 on first
anniversary, 112,500 on second anniversary, 162,500 on third anniversary and
50,000 on fourth anniversary.
(5) Options were granted August 23, 1999 and vest in five equal annual
installments.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Value of Unexercised
Shares Unexercised Options at In-the Money Options/
Acquired on Value Fiscal Year End (#) at Fiscal Year End ($)
Name Exercise (#) Realized ($) Exercisable/ Exercisable/
Unexercisable Unexercisable
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S. Leslie Flegel 0 0 314,086 / 660,170 1,929,304 / 3,678,341
William H. Lee 0 0 32,727 / 16,364 413,997 / 207,005
Richard A. Jacobsen 0 0 0 / 375,000 0 / 1,638,750
James R. Gillis 0 0 67,333 / 134,667 505,000 / 1,010,003
Monte Weiner 0 0 71,667 / 53,333 305,635 / 188,865
--------------------------------------------------------------------------------------------------------------------
</TABLE>

EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

In October 1997, the Company entered into separate employment agreements with S.
Leslie Flegel, William H. Lee and W. Brian Rodgers, each of which expires
January 31, 2000 and are subject to annual renewal thereafter. Under the
employment agreements, Mr. Flegel serves as the Chairman of the Board and Chief
Executive Officer of the Company in exchange for annual base compensation of
$255,000, Mr. Lee serves as Chairman of the Executive Committee and Chief
Administrative Officer of the Company in exchange for annual base compensation
of $240,573, and W. Brian Rodgers serves as Chief Financial Officer of the
Company and receives annual base compensation of $100,000, subject to annual
adjustment by the Compensation Committee of the Board (the "Base Compensation").
In the event the employment of any such person with the Company is terminated
for reasons other than for cause, permanent disability or death or there occurs
a significant reduction in the position, duties or responsibilities thereof (a
"Termination") within two years following a "Change of Control" (as defined in
the employment agreement), the discharged person will be entitled to an
additional bonus of 300% of his then current

10
<PAGE> 12

annual Base Compensation. Such person also will agree to refrain from disclosing
information confidential to the Company or engaging, directly or indirectly, in
the rendering of services competitive with those offered by the Company during
the term of his employment and for two years thereafter, without the prior
written consent of the Company.

In December 1998, the Company entered into an employment agreement with James R.
Gillis, which expires January 31, 2001 (subject to renewal). The employment
agreement provides that Mr. Gillis will serve as President of the Company and
receive annual base compensation of $250,000, subject to annual adjustment by
the Board. In addition, Mr. Gillis is entitled to receive an annual bonus of
$50,000 for each of fiscal 2000, 2001 and 2002 if certain performance goals are
met. The annual bonus amounts may increase if the performance of the Company's
front-end display rack manufacturers exceed certain thresholds. However, under
his employment agreement, Mr. Gillis is not entitled to an annual bonus of more
than $250,000. In the event the employment of Mr. Gillis is terminated for
reasons other than cause, permanent disability or death, Mr. Gillis will be
entitled to receive the remainder of his base salary and benefits for the
balance of the term of the agreement and a pro rata portion of his annual bonus
for the year of termination. Mr. Gillis agreed to refrain from disclosing
information confidential to the Company during the term of the employment
agreement and agreed not to engage, directly or indirectly, in the rendering of
services competitive with those offered by the Company during the term of his
employment and for two years thereafter.

In August 1999, the Company entered into an employment agreement with Cameron
Cloeter, which expires July 31, 2004 (subject to renewal). Under his agreement,
Mr. Cloeter serves as Executive Vice President, Sales and Marketing of the
Company and receives annual base compensation of $175,000. Mr. Cloeter will also
be entitled to receive an annual bonus based upon the percentage that the
Company's net income before taxes represents of the budgeted income before
taxes. Mr. Cloeter will not be entitled to a bonus if the Company's net income
before taxes is not at least 82% of the budgeted income before taxes and the
maximum annual bonus shall not exceed $98,550. Under the agreement, Mr. Cloeter
agreed to refrain from disclosing information confidential to the Company or
engaging, directly or indirectly, in the rendering of services competitive with
those offered by the Company during the term of his employment and for two years
thereafter, without the prior written consent of the Company.

Under the terms of a written agreement with the Company, Dwight L. DeGolia has
agreed to refrain from disclosing information confidential to the Company or
engaging, directly or indirectly, in any activity which is competitive with the
Company's business during the term of his employment and for two years
thereafter.

REPORT OF THE COMPENSATION COMMITTEE REGARDING EXECUTIVE COMPENSATION

GENERAL

The Company's executive compensation program is administered by the Compensation
Committee of the Board of Directors (the "Committee") which is composed of
Messrs. Aders, Katzman and Minix.

The Company's executive compensation policy is designed and administered to
provide a competitive compensation program that will enable the Company to
attract, motivate, reward and retain executives who have the skills, education,
experience and capabilities required to discharge their duties in a competent
and efficient manner. The Company's compensation policy is based on the
principle that the financial rewards to the executives should be aligned with
the financial interests of the stockholders by striving to create a suitable
long-term return on their investment through earnings from operations and
prudent management of the Company's business and operations.

The Company's executive compensation strategy consists of salary and incentive
compensation. The following is a summary of the policies underlying each
element.

ANNUAL COMPENSATION

The annual compensation salary for individual executive officers of the Company
is based upon the level and scope of the responsibility of the office, the pay
levels of similarly positioned executive officers among companies competing for
the services of such executives and a consideration of the level of experience
and performance profile

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<PAGE> 13

of the particular executive officer. Based upon its review and evaluation, the
Committee makes a recommendation to the Board of Directors of the salary to be
paid to each executive officer.

LONG TERM INCENTIVE COMPENSATION

The Committee believes that long-term incentive compensation is the most
effective way of tying executive compensation to increases in stockholder value.
The Committee utilizes both cash- and stock-based awards, thereby providing a
means through which executive officers will be given incentives to continue high
quality performance with the Company over a long period of time while allowing
such executive officers to build a meaningful investment in the Company's Common
Stock.

In 1995, the Company adopted its 1995 Employee Stock Option Plan (the "Plan").
Under the Plan, the participating executive officers each received an initial
grant of stock options. Additional options in addition to cash bonuses were
granted in fiscal 2000 to certain executive officers in recognition of
significant growth in the Company's revenues and net income in the 1999 and 2000
fiscal years, and satisfactory performance evaluations from the Committee.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

Mr. Flegel's salary, bonus and substantial stock options for fiscal 2000 were
determined by the Committee in the same manner as is used by the Committee for
executive officers generally. In addition, the Committee considered Mr. Flegel's
significant role in the Company successfully completing several strategic
acquisitions. The Committee believes that Mr. Flegel's compensation is
competitive within the industry and, when combined with Mr. Flegel's significant
ownership of the Company's Common Stock, provides incentives for performance
which are aligned with the financial interests of the stockholders of the
Company.

THE COMPENSATION COMMITTEE

ROBERT O. ADERS ARON KATZMAN RANDALL S. MINIX

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<PAGE> 14

PERFORMANCE GRAPH

The graph below compares the cumulative total stockholder return on The Source
Information Management Company's Common Stock against the cumulative total
return of companies listed on The Nasdaq Stock Market (US) and the Nasdaq
Non-Financial Stocks Index. The graph is based on the market price of Common
Stock for all companies at January 31 each year and assumes that $100 was
invested on January 31, 1996 in The Source Information Management Company Common
Stock and the common stock of all companies and that dividends were reinvested
for all companies.

[LINE GRAPH]

<TABLE>
<CAPTION>
1/31/96 1/31/97 1/31/98 1/31/99 1/31/00
<S> <C> <C> <C> <C> <C>
Nasdaq US $100 $131 $155 $242 $379
Nasdaq Non-Financial Stocks $100 $133 $188 $188 $395
The Source Information Management Company $100 $53 $131 $258 $390
</TABLE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

From time to time, the Company and its predecessors have engaged in various
transactions with its directors, executive officers and other affiliated
parties. The following paragraphs summarize certain information concerning such
transactions and relationships to the extent that they occurred since the
beginning of our last fiscal year.

On June 28, 1991, a predecessor of the Company entered into a lease with 711
Gallimore Partnership in which William H. Lee, a director of the Company, is a
partner. Under the terms of the lease, 711 Gallimore Partnership leased office
space to the Company in High Point, North Carolina. In fiscal 2000 the Company
paid 711 Gallimore Partnership approximately $97,000 in rent.

In June 1999, the Company purchased the property that it had leased from 711
Gallimore Partnership for $1.8 million in cash. The Board appointed Timothy
Braswell, an independent director who has since resigned from the Board, to

13
<PAGE> 15

negotiate this transaction on the Company's behalf and, based on Mr. Braswell's
recommendation, the Board determined that the terms of the purchase were fair to
the Company.

The terms of the foregoing transactions were not negotiated on an arm's-length
basis, but were ratified by a majority of the independent and disinterested
outside directors who had access, at the Company's expense, to the Company's
legal counsel. All future transactions between the Company and its officers,
directors, principal stockholders and affiliates will be approved by a majority
of the independent and disinterested outside directors who will have access, at
the Company's expense, to the Company's legal counsel.

PROPOSAL 2 -- AMENDMENT TO THE COMPANY'S 1995 INCENTIVE STOCK OPTION PLAN

On March 28, 2000, the Board of Directors of the Company adopted an amendment to
the Stock Plan and directed that the Stock Plan as amended be submitted to the
shareholders for their approval. The amendment provides for an increase in the
number of shares of the Company's Common Stock available under the Stock Plan by
250,000 shares. The amendment will become effective upon approval by the holders
of at least a majority of the shares of the Common Stock voting at the Annual
Meeting. The Stock Plan as amended is attached as Exhibit A to this Proxy
Statement.

GENERAL

The purpose of the Stock Plan is to motivate employees of the Company and its
subsidiaries through incentives inherent in stock ownership by providing the
opportunity to obtain or increase proprietary interest in the Company on a
favorable basis through options to purchase stock granted under the Stock Plan.
The purpose of the proposed amendment to the Stock Plan is to increase the
number of available shares so as to enable the Company to continue the Stock
Plan in future years. The Stock Plan became effective on August 23, 1995. The
maximum number of shares that may be issued under the Stock Plan is now
2,520,661 shares of Common Stock of which all shares have been issued or
reserved for issuance. In the event there is a lapse, expiration, termination,
or cancellation of any benefit awarded under the Stock Plan and the shares
represented by such benefit either are not issued or are subsequently reacquired
by the Company, such shares may be again available to be used in connection with
the Stock Plan without being charged against the limitation of the number of
authorized shares under the Stock Plan. The shares currently authorized have
been and, if Proposal 2 is approved, the additional shares will be registered
under the Securities Act of 1933, as amended. The closing price of the Company's
Common Stock on August 31, 2000 on the Nasdaq National Market was $10.125 per
share.

The Compensation Committee of the Board of Directors serves as the Administrator
of the Stock Plan (the "Administrator") and has the exclusive authority to
determine the type of options awarded (incentive stock options ("ISO") or
non-qualified stock options ("NQSO")); to determine the terms and conditions of
all options; to construe and interpret the Stock Plan and the options granted
under it; to determine the time or times an option may be exercised, the number
of shares as to which an option may be exercised at any one time, and when an
option may terminate; to establish, amend and revoke rules and regulations
relating to the Stock Plan and its administration; and to correct any defect,
supply any omission, or reconcile any inconsistency in the Stock Plan or any
option agreement.

Since January 1, 1999, the Company consummated the acquisitions of seven
manufacturers of display units and one company engaged in the business of
submitting and collecting claims for rebates from magazine publishers on behalf
of retailers. These acquisitions have substantially increased the Company's size
and complexity, and have resulted in the Company's retention of a number of new
executive officers and other key employees. Options granted to attract, motivate
and retain these new employees, together with options granted to the Company's
continuing key employees, have exhausted the number of shares of Common Stock
currently authorized for issuance under the Stock Plan. The Board of Directors
believes that the availability of the proposed additional authorized shares of
Common Stock under the Stock Plan will enable it to continue to attract,
motivate and retain key employees for the Company.

OPTIONS

All employees of the Company who are not members of the Compensation Committee
are eligible to receive options under the Stock Plan. The Compensation Committee
determines the employees to whom options are granted, the time or times such
options are granted, the number of shares to be subject to each option and the
times when each option may be exercised.

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<PAGE> 16

Options entitle a participant to purchase shares of Common Stock at a price per
share equal to the market value of the Common Stock on the date the option is
granted. However, if an ISO is granted and the participant receiving the ISO
owns more than 10% of the total combined voting power of all classes of stock of
the Company, the purchase price shall not be less than one hundred and ten
percent of the market value of the Common Stock on the date the ISO is granted.

Any outstanding option and all unexercised rights thereunder shall expire and
terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the participant by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is 3 months following the effective date of the participant's
retirement from the Company's service; (iii) the date which is 1 year following
the date on which the participant's service with the Company ceases due to death
or disability; (iv) the date of expiration of the option determined by the
Administrator at the time the option is granted and specified in such option; or
(v) the 10th annual anniversary date of the granting of the option, or, if and
when an ISO is granted participant owns more than 10% of the total combined
voting power of all classes of stock of the Company, then on the 5th such
anniversary.

Options are exercisable on the terms determined by the Administrator at the time
of the grant. The option price is payable in full upon exercise of an option and
may be paid in cash or, if permitted by the Administrator, by tendering shares
of Common Stock of the Company already owned by the participant. Options granted
under the Stock Plan are nontransferable and nonassignable by a participant
other than by will or by the laws of descent and distribution, and are
exercisable during the participant's lifetime only by the participant.

CHANGE OF CONTROL

The Stock Plan provides for the accelerated exercisability of options in the
event of a merger, consolidation, acquisition, sale or transfer of assets,
tender, or exchange offer or other reorganization in which the Company does not
survive as an independent company.

AMENDMENT; TERMINATION

The Board of Directors may amend the Stock Plan at any time, except that the
Board may not, without the approval of the shareholders, materially increase the
benefits accruing to participants under the Stock Plan, increase the number of
shares of Common Stock in the aggregate which may be issued under the Stock
Plan, except as provided by the Stock Plan, or materially modify the
requirements as to eligibility for participation in the Stock Plan.

The Board of Directors may terminate or suspend the Stock Plan at any time. The
Stock Plan currently will terminate automatically on August 23, 2005. No
benefits may be awarded under the Stock Plan after its termination. Except as
provided by the Stock Plan, amendment, suspension or termination of the Stock
Plan will not alter or impair any rights or obligations under options previously
granted under the Stock Plan.

FEDERAL TAX CONSEQUENCES

Incentive Stock Options. A participant who exercises an ISO while employed by
the Company or within the 3 month (1 year for disability) period after
termination of employment, will not recognize any ordinary income at that time.
If the shares acquired upon the exercise are not disposed of until more than 1
year after the date of the exercise, and more than 2 years after the date the
ISOs were granted, the excess of the sale proceeds over the aggregate option
price of such shares will be treated as long-term capital gain to the
participant. If the shares acquired on exercise of the ISOs are disposed of
prior to such dates (a "disqualifying disposition"), the excess of the fair
market value of the shares at the time of exercise over the aggregate option
price (but not more than the gain on the disposition if the disposition is a
transaction on which a loss, if realized, would be recognized) will be ordinary
income to the participant at the time of such disqualifying disposition. The
Company will be entitled to a federal tax deduction in a like amount, subject to
the limitation on deductions discussed below. If an ISO is exercised more than 3
months (1 year for disability) after termination of employment, the participant
will recognize ordinary income equal to the difference between the option price
and the fair market value of the stock received on the date of exercise. The
Company would be allowed a deduction for a like amount in such case, subject to
the limitation on deductions discussed below.

15
<PAGE> 17

For purpose of the alternative minimum tax on individuals, on exercise of an
ISO, the difference between the fair market value of the stock on the date of
exercise and the amount paid for the stock will be treated as taxable.

A participant does not recognize any taxable income on the grant or exercise of
an ISO. However, if there is a disqualifying disposition of stock received on
the exercise of an ISO, the Company may deduct from income in the year of the
disqualifying disposition an amount equal to the amount that the participant
recognizes as ordinary income due to the disqualifying disposition, subject to
the limitation on deductions discussed below.

Nonqualified Stock Options. A participant will not realize any income at the
time an NQSO is granted, nor will the Company be entitled to a deduction at that
time. Upon exercise of an NQSO, the participant will recognize ordinary income
(whether the NQSO price is paid in cash or by the surrender of previously owned
Common Stock) in an amount equal to the difference between the option price and
the fair market value of the shares to which the NQSO pertains. The Company will
be entitled to a tax deduction in an amount equal to the amount of ordinary
income realized by the participant, subject to the limitation on deductions
discussed below.

Limitation on Deductions. Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits to $1 million per year the federal income tax deduction
available to a public company for compensation paid to its chief executive
officer or any of its other four highest paid officers unless certain
requirements are met. The Stock Plan does not meet the requirements of Section
162(m) and it is possible that certain compensation paid under the Stock Plan
would not be deductible in the future. However, the Company currently believes
that all amounts under the Stock Plan will be deductible because the
compensation of the officers will either not exceed the limit under Section
162(m) or part of the compensation will be paid under the Performance Plan for
Executives which does meet the requirements of Section 162(m).

Mr. Ledecky has given Mr. Flegel his irrevocable proxy to vote in favor of
Proposal 2. Messrs. Ledecky and Flegel own an aggregate of 3,518,070 shares
(19.7%) eligible to vote for Proposal 2.

The Board of Directors recommends that the shareholders vote "FOR" the proposed
amendment.

PROPOSAL 3 -- RATIFICATION OF AND AMENDMENT TO THE COMPANY'S 1998 OMNIBUS PLAN

On February 1, 1998, the Board of Directors of the Company adopted the Company's
1998 Omnibus Plan and on March 28, 2000, adopted an amendment to the Omnibus
Plan and directed that the Omnibus Plan as amended be submitted to the
shareholders for their approval. The amendment provides for an increase in the
number of shares of the Company's Common Stock available under the Omnibus Plan
by 1,250,000 shares. The amendment will become effective upon approval by the
holders of at least a majority of the shares of the Common Stock voting at the
Annual Meeting. The Omnibus Plan as amended is attached as Exhibit B to this
Proxy Statement.

GENERAL

The purpose of the Omnibus Plan is to motivate employees of the Company and its
subsidiaries through incentives inherent in stock ownership by providing the
opportunity to obtain or increase their proprietary interest in the Company on a
favorable basis through options to purchase stock granted under the Omnibus
Plan. The purpose of the proposed amendment to the Omnibus Plan is to increase
the number of available shares so as to enable the Company to continue the
Omnibus Plan in future years. The Omnibus Plan became effective on February 1,
1998. The maximum number of shares that may be issued under the Omnibus Plan is
now 600,000 shares of Common Stock of which all shares have been issued or
reserved for issuance. In the event there is a lapse, expiration, termination,
or cancellation of any benefit awarded under the Stock Plan and the shares
represented by such benefit either are not issued or are subsequently reacquired
by the Company, such shares may be again available to be used in connection with
the Omnibus Plan without being charged against the limitation of the number of
authorized shares under the Omnibus Plan. The shares authorized will be
registered under the Securities Act of 1933, as amended.

The full Board of Directors serves as the Administrator of the Omnibus Plan (the
"Administrator") and has the exclusive authority to determine the terms and
conditions of all options; to construe and interpret the Omnibus Plan and the
options

16
<PAGE> 18

granted under it; to determine the time or times an option may be exercised, the
number of shares as to which an option may be exercised at any one time, and
when an option may terminate; to establish, amend and revoke rules and
regulations relating to the Omnibus Plan and its administration; and to correct
any defect, supply any omission, or reconcile any inconsistency in the Omnibus
Plan or any option agreement.

During the prior fiscal year, the Company consummated the acquisitions of seven
manufacturers of display units and one company engaged in the business of
submitting and collecting claims for rebates from magazine publishers on behalf
of retailers. These acquisitions have substantially increased the Company's size
and complexity, and have resulted in the Company's retention of a number of new
executive officers and other key employees. Options granted to attract, motivate
and retain these new employees, together with options granted to the Company's
continuing key employees, have exhausted the number of shares of Common Stock
currently authorized for issuance under the Omnibus Plan. The Board of Directors
believes that the availability of the proposed additional authorized shares of
Common Stock under the Omnibus Plan will enable it to continue to attract,
motivate and retain key employees for the Company.

OPTIONS

All employees, officers and directors of the Company are eligible to receive
options under the Omnibus Plan. The Board of Directors determines the employees,
officers and directors to whom options are granted, the time or times such
options are granted, the number of shares to be subject to each option and the
times when each option may be exercised.

Options entitle a participant to purchase shares of Common Stock at a price per
share equal to the market value of the Common Stock on the date the option is
granted.

Any outstanding option and all unexercised rights thereunder shall expire and
terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the participant by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is 3 months following the effective date of the participant's
retirement from the Company's service; (iii) the date which is 1 year following
the date on which the participant's service with the Company ceases due to death
or disability; (iv) the date of expiration of the option determined by the Board
at the time the option is granted and specified in such option; or (v) the 10th
annual anniversary date of the granting of the option. However, the Board shall
have the discretion, but not the obligation, to extend the expiration of the
option held by a participant whose service has ceased for any reason to the end
of their original terms.

Options are exercisable on the terms determined by the Board at the time of the
grant. The option price is payable in full upon exercise of an option and may be
paid in cash or, if permitted by the Board, by tendering shares of Common Stock
of the Company already owned by the participant. Options granted under the
Omnibus Plan are nontransferable and nonassignable by a participant other than
by will or by the laws of descent and distribution, and are exercisable during
the participant's lifetime only by the participant.

CHANGE OF CONTROL

The Omnibus Plan provides for the accelerated exercisability of options in the
event of a merger, consolidation, acquisition, sale or transfer of assets,
tender, or exchange offer or other reorganization in which the Company does not
survive as an independent company.

AMENDMENT; TERMINATION

The Board of Directors may amend the Omnibus Plan. The Board of Directors may
terminate or suspend the Omnibus Plan at any time. The Omnibus Plan currently
will terminate automatically on January 31, 2008. No benefits may be awarded
under the Omnibus Plan after its termination. Except as provided by the Omnibus
Plan, amendment, suspension or termination of the Omnibus Plan will not alter or
impair any rights or obligations under options previously granted under the
Omnibus Plan.

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<PAGE> 19

FEDERAL TAX CONSEQUENCES

Limitation on Deductions. Section 162(m) of the Internal Revenue Code of 1986,
as amended, limits to $1 million per year the federal income tax deduction
available to a public company for compensation paid to its chief executive
officer or any of its other four highest paid officers unless certain
requirements are met. The Omnibus Plan does not meet the requirements of Section
162(m) and it is possible that certain compensation paid under the Omnibus Plan
would not be deductible in the future. However, the Company currently believes
that all amounts under the Omnibus Plan will be deductible because the
compensation of the officers will either not exceed the limit under Section
162(m) or part of the compensation will be paid under the Performance Plan for
Executives which does meet the requirements of Section 162(m).

The Board of Directors recommends that the shareholders vote "FOR" the proposed
amendment.

OTHER BUSINESS

Management does not know of any other matters which may come before the Meeting.
However, if any other matters are properly presented at the Meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
act, in accordance with their judgment on such matters.

SHAREHOLDER PROPOSALS

Shareholder proposals intended to be presented at the 2001 Annual Meeting of
Shareholders must be received by the Company by May 24, 2001 for inclusion in
the Company's proxy statement and proxy relating to that meeting. Upon receipt
of any such proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with regulations
governing the solicitation of proxies.

In order for a Shareholder to bring other business before a Shareholder meeting,
timely notice must be given to the Company within the time limits set forth
above. Such notice must include a description of the proposed business, the
reasons therefor and other matters specified in the Company's Bylaws. The Board
or the presiding officer at the Annual Meeting may reject any such proposals
that are not made in accordance with these procedures or that are not a proper
subject for Shareholder action in accordance with applicable law. These
requirements are separate from the procedural requirements a Shareholder must
meet to have a proposal included in the Company's proxy statement.

In each case the notice must be provided to the Company at its principal office
in St. Louis, Missouri. Shareholders desiring a copy of the Company's Bylaws
will be furnished a copy without charge upon the submission of a written request
to the Company.

If the date of the 2001 Annual Meeting of Shareholders is advanced or delayed by
more than 30 calendar days from the date of the 2000 Annual Meeting of
Shareholders the Company will make a timely disclosure of such date change and

18
<PAGE> 20

the impact of such date change on the submission deadlines set forth above in
its first quarterly report on Form 10-Q following such date change, or, if
impracticable any means reasonably calculated to inform shareholders.

RELATIONSHIP WITH THE INDEPENDENT ACCOUNTANTS

BDO Seidman, LLP ("BDO Seidman") served as the independent public accountant for
the Company in fiscal 2000. BDO Sediman has been selected as the Company's
independent public accountant for fiscal 2001. Representatives of BDO Seidman
will be present at the annual meeting with the opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.

By Order of the Board of Directors

/s/ W. Brian Rodgers

W. Brian Rodgers, Secretary

THE BOARD OF DIRECTORS HOPES THAT YOU WILL ATTEND THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
THE ACCOMPANYING ENVELOPE PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR
STOCK PERSONALLY BY DELIVERING A WRITTEN REVOCATION OF YOUR PROXY TO THE
SECRETARY OF THE COMPANY.

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<PAGE> 21

EXHIBIT A

THE SOURCE INFORMATION MANAGEMENT COMPANY
AMENDED AND RESTATED 1995 INCENTIVE STOCK OPTION PLAN

1. PURPOSE OF THE PLAN

The Source Information Management Company 1995 Incentive Stock Option
Plan ("Plan") is intended to provide additional incentive to certain valued and
trusted employees of The Source Information Management Company, a Missouri
corporation (the "Company"), by encouraging them to acquire shares of the $.01
par value Common Stock of the Company (the "Stock") through options to purchase
Stock granted under the Plan ("Options"). The purpose for granting such Options
and making the purchase of the Stock possible is to increase the proprietary
interest of such employees in the business of the Company and provide them with
an increased personal interest in the continued success and progress of the
Company. The intended result is to promote the interests of both the Company and
its shareholders.

Options granted under the Plan may be either Options intended to
qualify as "incentive stock options" ("ISOs") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options ("NQSOs"). Each employee granted an Option will receive and be
required to accept a Stock Option Agreement with the Company (the "Option
Agreement"), which sets forth the terms and conditions of the Option, in
accordance with this Plan.

2. ADMINISTRATION OF PLAN

The Plan will be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company ("Board"), to be composed
of at least two (2) members. Each member of the Committee shall be a
"non-employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule or
regulation. Each member of the Committee shall serve at the pleasure of the
Board. Any vacancy occurring in the membership of the Committee shall be filled
by appointment by the Board. If there are less than two members of the Board who
qualify as "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act, then the full Board shall be deemed to be the administrators of
the Plan and shall be endowed with all of the rights and responsibilities
attributed to the Committee herein:

The Committee shall have the sole power:

(a) subject to the provisions of the Plan, to grant Options; to
determine the type of Option (NQSO or ISO); to determine the terms and
conditions of all Options; to construe and interpret the Plan and Options
granted under it; to determine the time or times an Option may be exercised, the
number of shares as to which an Option may be exercised at any one time, and
when an Option may terminate; to establish, amend and revoke rules and
regulations relating to the Plan and its administration; and to correct any
defect supply any omission, or reconcile any inconsistency in the Plan, or in
any Option Agreement, in a manner and to the extent it shall deem necessary, all
of which determinations and interpretations made by the Committee shall be
conclusive and binding on all Optionees and on their legal representatives and
beneficiaries; and

(b) to determine all questions of policy and expediency that may arise
in the administration of the Plan and generally exercise such powers and perform
such acts as are deemed necessary or expedient to promote the best interests of
the Company.

The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Committee. All expenses and liabilities incurred by the Committee in
connection with the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons, and the Committee, the Board, the Company and the
officers and employees of the Company shall be entitled to rely upon the advice,
opinions or valuations of any such persons. The interpretation and construction
by the Committee of any provision of the Plan and any determination by the
Committee under any provision of the Plan shall be final and conclusive for all

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<PAGE> 22

purposes. Neither the Committee nor any member thereof shall be liable for any
act, omission, interpretation, construction or determination made in connection
with the Plan in good faith, and the members of the Committee shall be entitled
to indemnification and reimbursement by the Company in respect of any claim,
loss, damage or expense (including attorneys' fees) arising therefrom to the
fullest extent permitted by law.

3. SHARES SUBJECT TO THE PLAN

Subject to the provisions of paragraph 13, the Stock that may be issued
pursuant to Options granted under the Plan shall not exceed in the aggregate Two
Million Seven Hundred Seventy Thousand Six Hundred Sixty-One (2,770,661) shares
of $.01 par value Common Stock of the Company. If any Options granted under the
Plan terminate, expire or are surrendered without having been exercised in full,
the number of shares of Stock not purchased under such Options shall be
available again for the purpose of the Plan. The Stock to be offered for
purchase upon the grant of an Option may be authorized but unissued Stock or
Stock previously issued and outstanding and reacquired by the Company.

4. PERSONS ELIGIBLE FOR OPTIONS

All employees of the Company who are not members of the Committee shall
be eligible to receive the grant of Options under the Plan. The Committee shall
determine the employees to whom Options shall be granted, the time or times such
Options shall be granted. the number of shares to be subject to each Option and
the times when each Option may be exercised. The Committee shall seek
information, advice and recommendations from management to assist the Committee
in its independent determination as to the employees to whom Options shall be
granted. An employee who has been granted an Option (an "Optionee"), if he or
she is otherwise eligible, may be granted additional Options.

5. PURCHASE PRICE

The purchase price of each share of Stock covered by each Option
("Purchase Price") shall not be less than one hundred percent (100%) of the Fair
Market Value Per Share (as defined below) of the Stock on the date the Option is
granted. However, if and when an ISO is granted the Optionee receiving the ISO
owns or will be considered to own, by reason of Section 424(d) of the Code, more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, the purchase price of the Stock covered by the ISO shall
not be less than one hundred and ten percent (110%) of the Fair Market Value Per
Share of the Stock on the date the ISO is granted.

"Fair Market Value Per Share" of the Stock shall mean: (i) if the Stock
is traded only otherwise than on a securities exchange and is quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), the closing quoted selling price of the Stock on the date of grant
of the Option. as reported by the Wall Street Journal; (ii) if the Stock is
admitted to trading on a securities exchange, the closing quoted selling price
of the Stock on the date of grant of the Option, as reported in the Wall Street
Journal; or (iii) if the Stock is traded only otherwise than on a securities
exchange and is not quoted on NASDAQ, the closing quoted selling price of the
Stock on the date of grant of the Option as quoted in the "pink sheets"
published by the National Daily Quotation Bureau. In any case, if there were no
sales of the Stock on the date of the grant of an Option, the Fair Market Value
Per Share shall be determined by the Committee in accordance with Section
20.2031-2 of the Federal Estate Tax Regulations.

6. DURATION OF OPTIONS

Any outstanding Option and all unexercised rights thereunder shall
expire and terminate automatically upon the earliest of: (i) the cessation of
the employment or engagement of the Optionee by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is three months following the effective date of the Optionee's
retirement from the Company's service; (iii) the date which is one year
following the date on which the Optionee's service with the Company ceases due
to death or disability; (iv) the date of expiration of the Option determined by
the Committee at the time the Option is granted and specified in such Option; or
(v) the tenth (10th) annual anniversary date of the granting of the Option, or,
if and when an ISO is

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<PAGE> 23

granted the Optionee owns (or would be considered to own by reason of Section
424(d) of the Code) more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, then on the fifth (5th) such
anniversary. However, the Committee shall have the right, but not the
obligation, to extend the expiration of the Options held by an Optionee whose
service with the Company has ceased for any reason to the end of their original
terms, notwithstanding that such Options may no longer qualify as ISOs under the
Code.

7. EXERCISE OF OPTIONS

(a) An Option may be exercisable in installments or otherwise upon such
terms as the Committee shall determine when the Option is granted.

(b) No Option will be exercisable (and any attempted exercise will be
deemed null and void) if such exercise would create a right of recovery for
"short-swing profits" under Section 16(b) of the Securities Exchange Act of
1934.

(c) No Option will become exercisable if the exercisability of such
Option would cause the aggregate fair market value (as determined at the time of
grant in accordance with the provisions of paragraph 5 hereof) of the Stock with
respect to which Option issued by the Company are first exercisable during such
calendar year to exceed $100,000. If the grant of an Option hereunder would
cause a violation of the foregoing limitation, the exercisability of the portion
of the Option granted hereunder shall be reduced to the extent necessary such
that no violation of the foregoing limitation will occur. Any Option with
respect to which exercisability has been deferred shall become first exercisable
on the first day of the calendar year in which such exercisability would not
cause a violation of the limitations contained in Section 422(b)(7) of the Code;
provided, however, if the exercisability is required to be deferred beyond the
expiration of such Option, the grant of such Option shall be null and void.

8. METHOD OF EXERCISE

(a) When the right to purchase shares accrues, Options may be exercised
by giving written notice to the Company stating the number of shares for which
the Option is being exercised, accompanied by payment in full by cash or its
equivalent, as is acceptable to the Company, of the purchase price for the
shares being purchased. The Company shall issue a separate certificate or
certificates of Stock for each Option exercised by an Optionee.

(b) In the Committee's discretion, determined at the time an Option is
granted, payment of the purchase price for shares may be made in whole or in
part with other shares of Stock of the Company which are free and clear of all
liens and encumbrances. The value of the shares of Stock tendered in payment for
the shares being purchased shall be the Fair Market Value Per Share on the date
of the Optionee's notice of exercise.

(c) Notwithstanding the foregoing, the Company shall have the right to
postpone the time of delivery of any shares for such period as may be required
for the Company, with reasonable diligence, to comply with any applicable
listing requirements of any national securities exchange or the National
Association of Securities Dealers, Inc. or any Federal, state or local law. If
the Optionee, or other person entitled to exercise an Option, fails to timely
accept delivery of and pay for the shares specified in such notice, the
Committee shall have the right to terminate the Option and the exercise thereof
with respect to such shares.

9. NONTRANSFERABILITY OF OPTIONS

No Option granted under the Plan shall be assignable or transferable by
the Optionee, either voluntarily or by operation of law, other than by Will or
the laws of descent and distribution, and, during the lifetime of the Optionee,
shall be exercisable only by the Optionee.

10. CONTINUANCE OF EMPLOYMENT

Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any rights with respect to the continuation of
employment by the Company or interfere in any way with the right of the Company
(subject to the terms of any separate employment agreement to the contrary) at
any time to terminate such

22
<PAGE> 24

employment or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the granting of any Option.

11. RESTRICTIONS ON SHARES

If the Company shall be advised by counsel that certain requirements
under Federal or state securities laws must be met before Stock may be issued
under the Plan, the Company shall notify all persons who have been issued
Options, and the Company shall have no liability for the failure to issue Stock
under any exercise of Options because of any delay while such requirements are
being met or the inability of the Company to comply with such requirements.

12. PRIVILEGE OF STOCK OWNERSHIP

No person entitled to exercise any Option granted under the Plan shall
have the rights or privileges of a stockholder of the Company for any shares of
Stock issuable upon exercise of such Option until such person has become the
holder of record of such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date on which such person
becomes the holder of record, except as provided in paragraph 13.

13. ADJUSTMENT

(a) If the number of outstanding shares of Stock are increased or
decreased, or such shares are exchanged for a different number or kind of shares
or securities of the Company, through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares, or other
similar transaction, the aggregate number of shares of Stock subject to the
Plan, as provided in paragraph 3, and the shares of Stock subject to issued and
outstanding Options under the Plan shall be appropriately and proportionately
adjusted by the Committee. Any such adjustment in an outstanding Option shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate adjustment in the
price for each share or other unit of any security covered by the Option.

(b) Notwithstanding paragraph (a), upon: (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or consolidation of
the Company with one or more corporations in which the, Company is not the
surviving corporation, (iii) a sale of substantially all of the assets of the
Company or (iv) the transfer of more than 80% of the then outstanding Stock of
the Company to another entity or person, in a single transaction or series of
transactions, the Board shall accelerate the time in which any outstanding
Options granted under the Plan may be exercised to a time prior to the
consummation of the transaction, and the Plan shall terminate upon such
consummation of the transaction. However, the acceleration of the time of
exercise of such Options and the termination of the Plan shall not occur if
provision is made in writing in connection with the transaction, in a manner
acceptable to the Board, for: (A) the continuance of the Plan and assumption of
outstanding Options, or (B) the substitution for such Options of new options to
purchase the stock of a successor corporation (or parent or subsidiary thereof),
with appropriate adjustments as to number and kind of shares and option price.
The Board of Directors shall have the authority to amend this paragraph to
provide for a requirement that a successor corporation assume any outstanding
Options.

(c) Adjustments under this paragraph 13 shall be made by the Committee,
whose determination as to what adjustments shall be made, and the extent thereof
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued under the Plan or in connection with any such adjustment.

14. INVESTMENT PURPOSE

Each Option granted hereunder may be issued on the condition that any
purchase of Stock by the exercise of an Option which is not the subject of a
registration statement permitting the sale or other distribution thereof shall
be for investment purposes and not with a view to resale or distribution (the
"Restricted Stock"). If requested by the Company, each Optionee must agree, at
the time of the purchase of any Restricted Stock, to execute an "investment
letter" setting forth such investment intent in the form acceptable to the
Company and must consent to any stock

23
<PAGE> 25

certificate issued to him thereunder bearing a restrictive legend setting forth
the restrictions applicable to the further resale, transfer or other conveyance
thereof without registration under the Securities Act of 1933, as amended, and
under the applicable securities or blue sky laws of any other jurisdiction
(together, the "Securities Laws"), or the availability of exemptions from
registration thereunder and to the placing of transfer restrictions on the
records of the transfer agent for such stock. No Restricted Stock may thereafter
be resold, transferred or otherwise conveyed unless:

(1) an opinion of the Optionee's counsel is received. in form and
substance satisfactory to counsel for the Company, that
registration under the Securities Laws is not required; or

(2) such Stock is registered under the applicable Securities Laws;
or

(3) A "no action" letter is received from the staff of the
Securities and Exchange Commission and from the administrative
agencies administering all other applicable securities or blue
sky laws, based on an opinion of counsel for Optionee in form
and substance reasonably satisfactory to counsel for the
Company, advising that registration under the Securities Laws
is not required.

15. AMENDMENT AND TERMINATION OF PLAN

(a) The Board of Directors of the Company may, from time to time, with
respect to any shares at the time not subject to Options, suspend or terminate
the Plan or amend or revise the terms of the Plan; provided that any amendment
to the Plan shall be approved by a majority of the shareholders of the Company
if the amendment would (i) materially increase the benefits accruing to
participants under the Plan; (ii) increase the number of shares of Stock which
may be issued under the Plan, except as provided under the provisions of
paragraph 13; or (iii) materially modify the requirements as to eligibility for
participation in the Plan.

(b) Subject to the provisions of paragraph 13, the Plan shall terminate
ten (10) years from the earlier of the adoption of the Plan by the Board of
Directors or its approval by the shareholders.

(c) Subject to the provisions of paragraph 13, no amendment, suspension
or termination of this Plan shall, without the consent of each Optionee, alter
or impair any rights or obligations under any Option granted to such Optionee
under the Plan.

16. EFFECTIVE DATE OF PLAN

The Plan shall become effective upon adoption by the Board of Directors
of the Company and approval by the Company's shareholders; provided, however,
that prior to approval of the Plan by the Company's shareholders but after
adoption by the Board of Directors, Options may be granted under the Plan
subject to obtaining such approval.

17. TERM OF PLAN

No Option shall be granted under the Plan after ten (10) years from the
earlier of the date of adoption of the Plan by the Board of Directors of the
Company or the date of approval by the Company's shareholders.

Adopted by the Board of Directors as of August 23, 1995, amended as of
June 26, 1997, further amended as of October 7, 1998, further amended as of July
7, 1999 and further amended as of March 28, 2000.

THE SOURCE INFORMATION MANAGEMENT COMPANY

By:
-------------------------------------------------
S. Leslie Flegel, Chairman of the Board and Chief
Executive Officer

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EXHIBIT B

THE SOURCE INFORMATION MANAGEMENT COMPANY 1998 OMNIBUS PLAN

ARTICLE I
PURPOSE OF THE PLAN

The Source Information Management Company 1998 Omnibus Plan ("Plan") is intended
to provide additional incentive to certain valued and trusted employees,
officers, and directors of The Source Information Management Company, a Missouri
corporation (the "Company"), by encouraging them to acquire shares of the $0.01
par value Common Stock of the Company (the "Stock") through options to purchase
Stock granted pursuant to the Plan ("Options"), and, in the case of directors,
conversion of their director retainer fees into Stock for payment, thereby
increasing such employees', officers', and directors' interest in the business
of the Company and providing them with an increased personal interest in the
continued success and progress of the Company, the result of which will promote
both the interests of the Company and its shareholders.

ARTICLE II
ADMINISTRATION OF PLAN

2.1 The entire Board of Directors of the Company ("Board") will administer the
Plan.

2.2 The Board shall have the sole power:

(a) subject to the provisions of the Plan, to determine the terms and conditions
of all Options; to construe and interpret the Plan and Options granted under it;
to establish, amend and revoke rules and regulations relating to the Plan and
its administration; to determine the time or times an Option may be exercised,
the number of shares as to which an Option may be exercised at any one time, to
accelerate the time or times at which an Option may be exercised and increase
the number of shares as to which an Option may be exercised at any one time, and
when an Option may terminate; and to correct any defect, supply any omission, or
reconcile any inconsistency in the Plan, or any Option Agreement, in a manner
and to the extent it shall deem necessary, all of which determinations and
interpretations made by the Board shall be conclusive and binding on all
Optionees and on their legal representatives and beneficiaries; and

(b) to determine all questions of policy and expediency that may arise in the
administration of the Plan and generally exercise such powers and perform such
acts as are deemed necessary or expedient to promote the best interests of the
Company.

2.3 The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Board. All expenses and liabilities incurred by the Board in connection
with the administration of the Plan shall be borne by the Company. The Board may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons, and the Board, the Company and the officers and employees of the
Company shall be entitled to rely upon the advice, opinions or valuations of any
such persons. The interpretation and construction by the Board of any provision
of the Plan and any determination by the Board under any provision of the Plan
shall be final and conclusive for all purposes. Neither the Board nor any member
thereof shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Board shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including attorneys' fees)
arising therefrom to the fullest extent permitted by law.

ARTICLE III
SHARES SUBJECT TO THE PLAN

Subject to the provisions of Article IX below, the Stock which may be issued
under the Plan shall not exceed in the aggregate 1,850,000 shares, which Stock
may be authorized but unissued Stock or Stock previously issued and

25
<PAGE> 27

outstanding and reacquired by the Company. If any Options granted under the Plan
terminate, expire or are surrendered without having been exercised in full, the
number of shares of Stock not purchased under such Options shall be available
again for the Plan.

ARTICLE IV
NONQAUALIFLED STOCK OPTIONS

4.1 All employees, officers, and directors of the Company shall be eligible to
receive the grant of Options under the Plan. The Board shall determine the
employees, officer and directors to whom Options shall be granted, the time or
times such Options shall be granted, the number of shares to be subject to each
Option and the times when each Option may be exercised. The Board shall seek
information, advice and recommendations from management to assist the Board in
its independent determination as to the persons to whom Options shall be
granted. An employee, officer or director who has been granted an Option (an
"Optionee"), if he or she is otherwise eligible, may be granted additional
Options. Each Optionee shall enter into an agreement with the Company (the
"Option Agreement") setting forth the terms and conditions of the Optionee's
Option, as determined in accordance with this Plan.

4.2 Options granted under the Plan are not intended to qualify as "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

4.3 The purchase price of each share of Stock covered by each Option ("Purchase
Price") shall not be less than one hundred percent (100%) of the Fair Market
Value Per Share (as defined in Section 10.1) of the Stock on the date the Option
is granted.

4.4 Any outstanding Option and all unexercised rights thereunder shall expire
and terminate automatically upon the earliest of: (i) the cessation of the
employment or engagement of the Optionee by the Company for any reason other
than retirement (under normal Company policies), death or disability; (ii) the
date which is three months following the effective date of the Optionee's
retirement from the Company's service; (iii) the date which is one year
following the date on which the Optionee's service with the Company ceases due
to death or disability; (iv) the date of expiration of the Option determined by
the Board at the time the Option is granted and specified in such Option; or (v)
the tenth (10th) annual anniversary date of the granting of the Option. However,
the Board shall have the discretion, but not the obligation, to extend the
expiration of the Options held by an Optionee whose service with the Company has
ceased for any reason to the end of their original terms. Such discretion may be
exercised at the time of grant by express statement in the Option Agreement or
prior to expiration and termination of the Option by resolution duly adopted by
the Board.

4.5 An Option may be exercisable in installments or otherwise upon such terms as
the Board shall determine when the Option is granted. In the event that an
Option is exercisable only in installments, such Option shall become fully
exercisable upon the termination of employment of the Optionee by reason of
retirement (under normal Company policies), death, disability or a Change in
Control (as defined in Section 10.2).

4.6 Upon exercise of an Option, the full Exercise Price for the shares with
respect to which the Option is being exercised shall be payable to the Company:
(i) in cash or by check payable and acceptable to the Company; (ii) if expressly
permitted in the Option Agreement, by tendering to the Company shares of Stock
owned by the Optionee having an aggregate Fair Market Value Per Share as of the
date of exercise that is not greater than the full Exercise Price for the shares
with respect to which the Option is being exercised and by paying any remaining
amount of the Exercise Price as provided in (i) above; or (iii) if expressly
permitted in the Option Agreement and to such instructions as the Board may
specify, at the Optionee's written request the Company may deliver certificates
for the shares of Stock for which the Option is being exercised to a broker for
sale on behalf of the Optionee, provided that the Optionee has irrevocably
instructed such broker to remit directly to the Company on the Optionee's behalf
the full amount of the Exercise Price from the proceeds of such sale. In the
event that the Optionee elects to make payment as allowed under clause (ii)
above, the Board may, upon confirming that the Optionee owns the number of
shares of Stock being tendered, authorize the issuance of a new certificate for
the number of shares being acquired pursuant to the exercise of the Option less
the number of shares being tendered upon the exercise and return to the Optionee
(or not require surrender of) the certificate for the shares of Stock being
tendered upon the exercise. Payment instruments will be received subject to
collection.

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<PAGE> 28

4.7 No shares will be issued upon exercise of an Option until the Company has
received full payment of the Exercise Price for the shares. The Optionee shall
have no rights as a stockholder until the shares are reflected as issued on the
Company's stock transfer records.

4.8 Notwithstanding the foregoing, the Company shall have the right to postpone
the time of delivery of any shares for such period as may be required for the
Company, with reasonable diligence, to comply with any applicable listing
requirements of any national securities exchange or the Nasdaq Stock Market or
any Federal, state or local law. If the Optionee, or other person entitled to
exercise an Option, fails to timely accept delivery of and pay for the shares
specified in such notice, the Board shall have the right to terminate the Option
and the exercise thereof with respect to such shares.

4.9 No Option granted under the Plan shall be assignable or transferable by the
Optionee, either voluntarily or by operation of law, other than by will or the
laws of descent and distribution, and, during the lifetime of the Optionee,
shall be exercisable only by the Optionee, except as otherwise provided in this
paragraph. If the Optionee becomes disabled, the Option will be exercisable
either by the Optionee's attorney-in-fact under a Durable Power of Attorney or
by a duly appointed legal representative.

ARTICLE V
DIRECTORS' RETAINER STOCK

5.1 Subject to the availability of shares of Stock under the Plan, each present
or future member of the Board of Directors of the Company who is not also an
employee of the Company or of any subsidiary of the Company shall, unless such
director shall elect not to participate in this Plan, receive, in the form of
Stock, all amounts payable from time to time for service on the Board, including
any amounts payable with respect to service as chairperson of any committee of
the Board or attendance at any meeting of the Board of Directors or any
committee (collectively, "Retainer Fees").

5.2 A director may elect not to participate in the Plan by filing a written
election ("the Election Agreement") with the Company before the beginning of
each fiscal year of the Company. Any person who becomes a director during a
fiscal year, and who was not a director prior to the beginning of such fiscal
year, may file an Election Agreement to withdraw from participation in the Plan
for fiscal year before his term begins. The Election Agreement shall continue
until the director terminates or modifies such election by filing a new Election
Agreement with the Company. An Election Agreement, once made by a director,
shall be irrevocable with respect to all Retainer Fees otherwise payable while
such Election Agreement is in effect. No Election Agreement, or any modification
or termination thereof, shall apply to any portion of the Retainer Fee otherwise
payable within six months of the date of such Election Agreement, modification
or termination.

5.3 The Company shall establish and maintain a Stock Account for each
participating director, which shall reflect all entries required to be made
pursuant to the terms and conditions of the Plan. Credits made pursuant to
Section 5.4 shall be reflected on the books and records of the Company as an
obligation to issue and deliver a number of shares of Stock on the specified
payment date. No stock certificate shall be created or registered until the
payment date.

5.4 As of each date that any portion of the Retainer Fee would otherwise be
payable to a participating director, the Company shall credit to such director's
Stock Account a number of shares (rounded to the nearest whole share) equal to
portion of the director's Retainer Fee divided by the Fair Market Price Per
Share on such day.

5.5 The Company shall provide each participating director with an annual
statement indicating the number of shares of Stock credited to his Stock Account
as of the end of the preceding fiscal year.

5.6 Stock credited to a participating director's Stock Account shall not be
subject to forfeiture for any reason.

5.7 Stock credits to a participating director's Stock Account shall be payable
not later than ninety (90) days after the end of the Company's fiscal year. Upon
the occurrence of a Change of Control, the Stock credits to a participating
director's Stock Account as of the day immediately prior to the effective date
of the event constituting

<PAGE> 29
the Change of Control shall be paid in full on such date.

ARTICLE VI
CONTINUANCE OF EMPLOYMENT

Nothing contained in the Plan or in any Option granted under the Plan shall
confer upon any participant any rights with respect to the continuation of
employment or engagement by the Company or interfere in any way with the right
of the Company (subject to the terms of any separate employment agreement to the
contrary) at any time to terminate such employment, to remove any director or to
increase or decrease the compensation of the participant from the rate in
existence at the time of the granting of any Option or the credit of any Stock
to any Stock Account.

ARTICLE VII
RESTRICTIONS ON SHARES

If an Optionee gives notice to the Company of the exercise of any Option under
the Plan or any Stock credits are payable under the Plan and the Company is
advised by counsel that Stock cannot be issued pursuant to such exercise until
the requirements of Federal or state securities laws are met, the Company shall
so notify the participant and the Company shall have no liability for any delay
in issuing or failure to issue such Stock until such requirements are met or as
a result of the inability of the Company to comply with such requirements.
However, no option which is prevented from being exercised pursuant to this
paragraph shall expire until the later of (i) its expiration date pursuant to
its terms or (ii) 30 days after the Company has advised the Optionee that the
Company is no longer prevented by Federal or state securities laws from issuing
Stock to the Optionee.

ARTICLE VIII
PRIVILEGE OF STOCK OWNERSHIP

No participant entitled to be issued Stock under this Plan shall have the rights
or privileges of a stockholder of the Company for any shares of Stock issuable
until such person has become the holder of record of such shares. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date on which such person becomes the holder of record, except as
otherwise expressly provided in this Plan.

ARTICLE IX
ADJUSTMENT

9.1 If the number of outstanding shares of Stock is increased or decreased, or
such shares are exchanged for a different number or kind of shares or securities
of the Company through reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, combination of shares, or other
similar transaction, (a) the aggregate number of shares of Stock subject to the
Plan as provided in Article III above, (b) the number of shares of Stock and the
Purchase Price applicable thereto specified in outstanding Option Agreements
executed under the Plan, and (c) the number of Stock credits to each Stock
Account, shall be appropriately and proportionately adjusted by the Board.

9.2 In the event of the payment of an extraordinary dividend by the Company on
the Stock (an "extraordinary dividend" being a payment or series of payments
within any 12 consecutive months in the aggregate in excess of twenty-five
percent (25%) of the book value attributable to the Stock of the Company at the
time of the payment of the extraordinary dividend), (a) adjustment shall be made
in the purchase price of Stock under the Option for the amount of the
extraordinary dividend, and (b) each participating director's Stock Account
shall be credited with that number of shares (rounded to the nearest whole
share) determined by multiplying the dividend amount per share by the total
number of shares credited to such director's Stock Account as of the record date
for such dividend and dividing the product by the Fair Market Price Per Share on
the dividend payment date.

9.3 Adjustments under this Article IX shall be made by the Board, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued nor shall cash in lieu of fractional shares be paid under the Plan or in
connection with any such adjustment.

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<PAGE> 30

ARTICLE X
DEFINITIONS

10.1 "Fair Market Value Per Share" of the Stock shall mean: (i) if the Stock is
traded only otherwise than on a securities exchange and is quoted on the NASDAQ
Stock Market ("Nasdaq"), the closing quoted selling price of the Stock on the
date of grant of the Option, as reported by the Wall Street Journal; (ii) if the
Stock is admitted to trading on a securities exchange, the closing quoted
selling price of the Stock on the date of grant of the Option, as reported in
the Wall Street Journal; or (iii) if the Stock is traded only otherwise than on
a securities exchange and is not quoted on Nasdaq, the closing quoted selling
price of the Stock on the date of grant of the Option as quoted on the Nasdaq
OTC Bulletin Board. In any case, if there were no sales of the Stock on the date
of the grant of an Option, the Fair Market Value Per Share shall be determined
by the Board in accordance with Section 20.2031-2 of the Federal Estate Tax
Regulations.

10.2 "Change in Control" shall mean the occurrence of any of the following
events: (i) any "person" (together with its "affiliates" and "associates")
becoming the "beneficial owner" (each term as defined in the Securities Exchange
Act of 1934, as amended, or the rules and regulations promulgated thereunder) of
30% or more of the voting power of all outstanding securities of the Company
entitled to vote for the election of directors of the Company, unless a majority
of the Board as constituted prior to that time have determined in their sole
discretion that, for purposes of the Plan, a Change in Control of the Company
has not occurred; (ii) as a result of or in connection with any cash tender
offer, merger or other business combination, sale of assets or contested
election of directors, or any combination of the foregoing, the persons who were
members of the Board immediately prior to such event shall cease to constitute a
majority of the Company's Board; or (iii) the Board or shareholders of the
Company approve an agreement providing for a transaction in which the Company
will cease to be an independent publicly-owned corporation or the occurrence of
a sale or other disposition of all or substantially all of the assets of the
Company.
ARTICLE XI
AMENDMENT AND TERMINATION OF PLAN

11.1 The Board may, from time to time, with respect to any shares at the time
not subject to Options or credited to any Stock Account, suspend or terminate
the Plan or amend or revise the terms of the Plan.

11.2 This Plan shall terminate ten years from the earlier of the adoption of
this Plan by the Board.

11.3 No amendment, suspension or termination of this Plan shall, without the
consent of the participant, alter or impair any rights or obligations under any
Option granted to an Optionee or Stock credited to any Stock Account under this
Plan prior to the date of such amendment, suspension or termination.

ARTICLE XII
EFFECTIVE DATE OF PLAN

The Plan shall become effective upon adoption by the Board of Directors of the
Company.

ARTICLE XIII
TERM OF OPTIONS GRANTED UNDER THE PLAN

No Option shall be granted and the Board shall credit no Stock to any Stock
Account under this Plan more than ten years from the date of adoption of the
Plan.

Adopted by the Board of Directors as of the 1st day of February, 1998, amended
March 28, 2000.

THE SOURCE INFORMATION MANAGEMENT COMPANY

By:
---------------------------------
S. Leslie Flegel, Chairman
of the Board and Chief Executive Officer

<PAGE> 31
THE SOURCE INFORMATION MANAGEMENT COMPANY

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 23, 2000 AT 4:00 P.M.

The undersigned shareholder of The Source Information Management Company (the
"Company") hereby appoints S. Leslie Flegel and W. Brian Rodgers and each of
them as attorneys and proxies, each with power of substitution and revocation,
to represent the undersigned at the Annual Meeting of Shareholders of the
Company to be held at the offices of the Company at Two CityPlace Drive, Suite
380, St. Louis, Missouri 63141 at 4:00 P.M. Central Standard Time, and at any
adjournment or postponement thereof, with authority to vote all shares held or
owned by the undersigned in accordance with the directions indicated herein.

Receipt of the Notice of Annual Meeting of Shareholders dated September 22,
2000, the Proxy Statement furnished herewith, and a copy of the Annual Report on
Form 10-K for the year ended January 31, 2000 is hereby acknowledged.

(Continued on reverse side)

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<PAGE> 32
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, AND 3 PLEASE MARK
VOTES AS IN [X]
THIS EXAMPLE
<TABLE>
<S><C>
ITEM 1. Election of Harry L. "Terry" Franc, III FOR ALL WITHHOLD ITEM 2. An amendment to the Company's 1995
and Kenneth F. Teasdale as Class II NOMINEES (EXCEPT AUTHORITY Incentive Stock Option Plan to
Directors for a term of three years AS MARKED TO THE TO VOTE FOR increase the number of shares of
expiring in 2003 and until each director's CONTRARY) ALL NOMINEES common stock available under the
successor has been duly elected and qualified. [ ] [ ] plan from 2,520,661 to 2,770,661.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

NOMINEES: HARRY L. "TERRY" FRANC, III ITEM 3. Approve the Company's 1998 Omnibus
KENNETH F. TEASDALE Plan, as amended to increase the
number of shares of common stock
available under the plan from
600,000 to 1,850,000.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.) FOR AGAINST ABSTAIN
[ ] [ ] [ ]
-------------------------------------------------------------------------------------

THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION OF VOTE IS MADE,
THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3.

Dated: ,2000
------------------------------------

-----------------------------------------------
Signature
THE SIGNATURE SHOULD AGREE WITH THE NAME ON YOUR STOCK CERTIFICATE. IF ACTING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC., YOU SHOULD SO -----------------------------------------------
INDICATE WHEN SIGNING. IF THE SIGNOR IS A CORPORATION, PLEASE SIGN THE FULL Signature if held jointly
CORPORATE NAME BY DULY AUTHORIZED OFFICER. IF SHARES ARE HELD JOINTLY, EACH
SHAREHOLDER SHOULD SIGN.
</TABLE>

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