<PAGE>
                           SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
        
Filed by the Registrant [X]

Filed by a Party other than the Registrant [_] 

Check the appropriate box:

[X]  Preliminary Proxy Statement         [_]  CONFIDENTIAL, FOR USE OF THE     
                                              COMMISSION ONLY (AS PERMITTED BY 
[_]  Definitive Proxy Statement               RULE 14A-6(E)(2))                 

[_]  Definitive Additional Materials 

[_]  Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

                           CustomTracks Corporation
--------------------------------------------------------------------------------
               (Name of Registrant as Specified In Its Charter)

                           CustomTracks Corporation
--------------------------------------------------------------------------------
   (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)(4) and 0-11.

     (1) Title of each class of securities to which transaction applies:

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

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

     (4) Proposed maximum aggregate value of transaction:

     (5) Total fee paid:

[_]  Fee paid previously with preliminary materials.
     
[_]  Check box if any part of the fee is offset as provided by Exchange
     Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
     was paid previously. Identify the previous filing by registration statement
     number, or the Form or Schedule and the date of its filing.
     
     (1) Amount Previously Paid:
 
     (2) Form, Schedule or Registration Statement No.:

     (3) Filing Party:

     (4) Date Filed:

Notes:

<PAGE>
 
                           CustomTracks Corporation
                              One Galleria Tower
                                13355 Noel Road
                                  Suite 1555
                           Dallas, Texas 75240-6604
                                        
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         To Be Held September 14, 1999

     Notice is hereby given that the Annual Meeting of the Stockholders of
CustomTracks Corporation ("CustomTracks") will be held on September 14, 1999 at
9:00 a.m. (registration to begin at 8:30 a.m.), local time, at 4200 Cityplace,
2711 North Haskell Avenue, Amphitheater, Dallas, Texas 75204-2910, for the
following purposes:

          1.  To consider and vote upon a proposal to elect David P. Cook,
     Michael E. Keane, James S. Marston, Jack L. Martin, Antonio R. Sanchez,
     Jr., Dr. Ben G. Streetman and Mark A. Tebbe as directors of CustomTracks;

          2.  To amend CustomTracks' Articles of Incorporation to change
     CustomTracks' name to "ZixIt Corporation;"

          3.  To amend CustomTracks' Articles of Incorporation to increase the
     number of authorized shares of common stock, par value $0.01, from 30
     million to 175 million shares;

          4.  To approve the adoption of the CustomTracks Corporation 1999
     Directors' Stock Option Plan; and

          5.  To transact any other business that properly comes before the
     meeting or any adjournment thereof.

     Only stockholders of record at the close of business on July 23, 1999 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
The stock transfer books will not be closed.

     CustomTracks would like you to attend the meeting, but understands that you
may not be able to do so.  For your convenience, and to ensure that your shares
are represented and voted according to your wishes, we have enclosed a proxy
card for you to use.  Please sign and date the proxy card and return it to us as
soon as possible.  We have provided you with a postage-paid envelope to return
your proxy card. If you attend the meeting, you may revoke your proxy and vote
in person.

                                    By Order of the Board of Directors


                                    Ronald A. Woessner
                                      Secretary
Dallas, Texas
August 10, 1999

<PAGE>
 
                            CustomTracks Corporation

                               One Galleria Tower
                                13355 Noel Road
                                   Suite 1555
                            Dallas, Texas 75240-6604

                                PROXY STATEMENT
                                      FOR
                       THE ANNUAL MEETING OF STOCKHOLDERS

                         To Be Held September 14, 1999

                                  SOLICITATION

     The Board of Directors of CustomTracks Corporation ("CustomTracks") is
soliciting your proxy in the form of the enclosed proxy card for use at the
Annual Meeting of Stockholders of CustomTracks to be held on September 14, 1999,
at 9:00 a.m. (registration beginning at 8:30 a.m.), local time, at 4200
Cityplace, 2711 North Haskell Avenue, Amphitheater, Dallas, Texas 75204-2910, as
set forth in the accompanying Notice of Annual Meeting of Stockholders (the
"Notice") and at any adjournment thereof.  This Proxy Statement and the enclosed
proxy card are being mailed to stockholders on or about August 10, 1999.


                       RECORD DATE AND VOTING SECURITIES

     Only stockholders of record at the close of business on July 23, 1999 will
be entitled to vote on matters presented at the meeting or any adjournment
thereof.

     As of June 30, 1999, there were issued and outstanding 15,267,929 shares of
$.01 par value common stock of CustomTracks.  The holders of a majority of the
shares of common stock entitled to vote at the meeting must be represented at
the meeting in person or by proxy to have a quorum for the meeting and to act on
the matters specified in the Notice.  Votes withheld from any director nominee
will be counted in determining whether a quorum has been reached.  Under the
Articles of Incorporation of CustomTracks, each share of common stock is
entitled to one vote on all matters brought before the meeting or any
adjournment thereof.

     Assuming a quorum is present, the affirmative vote of a plurality of the
shares of common stock voted and entitled to vote for the election of directors
is required for the election of directors.  Votes may be cast in favor of, or
withheld from, a director nominee.  Votes that are withheld from a particular
nominee will not affect the outcome of the vote.  In the election of directors,
stockholders are not entitled to cumulate their votes and are not entitled to
vote for a greater number of persons than the number of nominees named in this
Proxy Statement.  The affirmative vote of at least two-thirds of the outstanding
shares of common stock entitled to vote thereon is required to approve the
amendment of CustomTracks' Articles of Incorporation to change CustomTracks'
name to "ZixIt Corporation" and to increase the number of authorized shares of
common stock, par value $0.01, from 30 million to 175 million shares.  The
affirmative vote of a majority of the shares of common stock entitled to vote
on, and that voted for or against or expressly abstained with respect to, the
matter is required to approve the adoption of the proposed CustomTracks
Corporation 1999 Directors' Stock Option Plan and any other matters that
properly come before the meeting.

<PAGE>
 
     Under applicable rules, brokers who hold shares in street name have the
authority to vote in favor of all matters specified in the Notice, if they do
not receive contrary voting instructions from beneficial owners.  Under
applicable law, if a broker has not received voting instructions with respect to
certain shares and gives a proxy for those shares, but does not vote the shares
on a particular matter, those shares will not affect the outcome of the vote
with respect to that matter.  Any stockholder that is present at the meeting,
either in person or by proxy, but abstains from voting, will be counted for
purposes of determining whether a quorum exists, even if the stockholder
abstains from voting.  An abstention will not be counted as an affirmative or
negative vote in the election of the directors.  With respect to all other
matters, an abstention would have the same effect as a vote against the
proposal.  The stockholders of CustomTracks have no appraisal rights under Texas
law with respect to the proposals specified in the Notice.

     Any stockholder giving a proxy may revoke it at any time before it is voted
by giving written notice to CustomTracks or by attending the meeting in person
and voting such shares.  Where a stockholder has appropriately specified how a
proxy is to be voted, it will be voted accordingly, and where no specific
direction is given, it will be voted FOR adoption of each of the proposals set
forth in the Notice and at the discretion of the proxy holders on any matter
proposed to come before the meeting that was not brought to the attention of
CustomTracks by June 7, 1999.

                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     The following table sets forth certain information concerning beneficial
ownership of CustomTracks' common stock as of June 30, 1999, by (i) each person
who is known by CustomTracks to own beneficially more than five percent of the
outstanding shares of common stock, (ii) each director and executive officer of
CustomTracks and (iii) all directors and executive officers as a group.


<TABLE>
<CAPTION>
                                                    Amount and Nature
                                               of Beneficial Ownership (1)
                                   ----------------------------------------------

                                                            Percentage of Total
                                   Number of Shares        Shares Outstanding (2)
                                   ----------------        ----------------------
<S>                                <C>                     <C>
David P. Cook (3)                         2,748,140                   15.33%
Michael E. Keane (4)                         27,500                       *
Douglas H. Kramp                                  0                       *
James S. Marston (4)                         37,500                       *
Jack L. Martin (4)                           25,000                       *
Antonio R. Sanchez, Jr. (5)               1,779,276                   11.63%
Dr. Ben G. Streetman (4)                     27,500                       *
Mark A. Tebbe                                 7,500                       *
Ronald A. Woessner (6)                      102,319                       *
Steve M. York (7)                           179,255                    1.17%
Dimensional Fund Advisors, Inc.             958,424                    6.28%
 1299 Ocean Avenue
 11/th/ Floor
 Santa Monica, California 90401
</TABLE>


                                       2

<PAGE>
 
White Rock Capital, Inc.                            1,386,500         9.08%
 3131 Turtle Creek Boulevard
 Suite 800
 Dallas, Texas 75219
All directors and executive officers as a group     4,933,990        27.09%

__________________

* Denotes ownership of less than 1%.

(1)  Except as otherwise noted, each person has sole voting and investment power
     over the common stock shown as beneficially owned, subject to community
     property laws where applicable.  Except as otherwise noted, the address for
     each beneficial owner is c/o CustomTracks, One Galleria Tower, 13355 Noel
     Road, Suite 1555, Dallas, Texas 75240-6604.

(2)  Shares of common stock that were not outstanding but could be acquired upon
     exercise of an option within 60 days of June 30, 1999, are deemed
     outstanding for the purpose of computing the percentage of outstanding
     shares beneficially owned by a particular person.  However, such shares are
     not deemed to be outstanding for the purpose of computing the percentage of
     outstanding shares beneficially owned by any other person.

(3)  Includes 2,659,140 shares that Mr. Cook has the right to acquire under
     outstanding stock options that are currently exercisable or that become
     exercisable within 60 days of June 30, 1999.

(4)  This individual has the right to acquire these shares under outstanding
     stock options that are currently exercisable or that become exercisable
     within 60 days of June 30, 1999.

(5)  Includes 131,251 shares that are owned by family members of Mr. Sanchez or
     by trusts for which Mr. Sanchez serves as trustee or is a beneficiary. Of
     such 131,251 shares, (i) 9,375 shares are held by family members of Mr.
     Sanchez; (ii) 82,500 shares, over which Mr. Sanchez exercises voting,
     investment and disposition power, are held in trusts for which Mr. Sanchez
     acts as trustee for the benefit of other persons and (iii) 39,376 shares,
     over which Mr. Sanchez does not have voting, investment or disposition
     powers, are held in a trust for the benefit of Mr. Sanchez and certain of
     his family members. Also, includes 35,000 shares that Mr. Sanchez has the
     right to acquire under outstanding stock options that are currently
     exercisable or that become exercisable within 60 days of June 30, 1999.

(6)  Includes 2,500 shares that are held in a trust for which Mr. Woessner acts
     as trustee for the benefit of another person and 59,249 shares that Mr.
     Woessner has the right to acquire under outstanding stock options that are
     currently exercisable or that become exercisable within 60 days of June 30,
     1999.

(7)  Includes 74,800 shares that Mr. York has the right to acquire under
     outstanding stock options that are currently exercisable or that become
     exercisable within 60 days of June 30, 1999 and 51,700 shares that are
     subject to forfeiture to CustomTracks under certain circumstances.

                                       3

<PAGE>
 
                                   MANAGEMENT

Directors, Executive Officers and Significant Employees

     The following table sets forth, as of June 30, 1999, the names of the
directors, executive officers and other significant employees of CustomTracks
and their respective ages and positions with CustomTracks.


<TABLE>
<CAPTION>
Name                         Age                                  Position
---------------------------  ---  --------------------------------------------------------------------------------------------------
<S>                          <C>  <C>
 
David P. Cook (1)(3)          47  Director, Chairman, President and Chief Executive Officer
Michael E. Keane (2)(4)       43  Director
Douglas H. Kramp              37  Executive Vice President, Strategic Business Development; and Executive Vice President and Chief
                                  Executive Officer, ZixMail.com, Inc.
Dr. G. Gary Liu               44  Chief Technical Officer, ZixMail.com, Inc.
James S. Marston (1)(4)       66  Director
Jack L. Martin (2)(4)         45  Director
Antonio R. Sanchez, Jr.
 (1)(3)                       56  Director
Dr. Ben G. Streetman (2)(3)   60  Director
Mark A. Tebbe                 37  Director
Ronald A. Woessner            42  Vice President, General Counsel and Secretary
Steve M. York                 48  Senior Vice President, Chief Financial Officer and Treasurer
</TABLE>

____________________

(1)  Member of the Executive Committee.
(2)  Member of the Audit Committee.
(3)  Member of the Nominating Committee.
(4)  Member of the Compensation and Stock Option Committee.

     David P. Cook became a director of CustomTracks in December 1995 and was
appointed Chairman, President and Chief Executive Officer in April 1998.  He
most recently served as Chairman and Chief Executive Officer of ARBImetrics
Corporation, a Dallas-based investment company that he founded. Mr. Cook
previously served as a director of CustomTracks from 1984 until 1990, serving as
Chairman of the Executive Committee until 1990.  Mr. Cook founded Blockbuster
Entertainment Corporation and was its Chief Executive Officer from its inception
until 1987.  Prior to that, he was Chairman of Cook Data Services, Inc., a
software company that he also founded.

     Michael E. Keane became a director of CustomTracks in November 1997.  Mr.
Keane has been Senior Vice President and Chief Financial Officer of UNOVA, Inc.
("UNOVA") since November 1997.  UNOVA comprises the former industrial technology
businesses spun off from Western Atlas, Inc. in October 1997, where Mr. Keane
was also Senior Vice President and Chief Financial Officer from October 1996
until October 1997 and Vice President and Treasurer from March 1994 until
October 1996.  Prior to that, he was Corporate Director, Pensions and Insurance,
for Litton Industries, Inc. from February 1991 until March 1994.

     Douglas H. Kramp joined CustomTracks in May 1999 as Executive Vice
President, Strategic Business Development.  Mr. Kramp was subsequently appointed
to the positions of Executive Vice President and Chief Executive Officer of
ZixMail.com, Inc., a wholly-owned subsidiary of CustomTracks.  Prior to joining
CustomTracks, Mr. Kramp was Executive Vice President, Strategic Business Units,
for 

                                       4

<PAGE>
 
PageMart Wireless, Inc. Mr. Kramp was also the founder of Artificial
Linguistics, Inc., a Dallas-based software company, where he directed the
release of "PowerEdit," a software program that won PC Magazine's "Editor's
Choice Award" in 1992.

     Dr. G. Gary Liu became an employee of CustomTracks in January 1999 and was
subsequently appointed to the position of Chief Technical Officer of
ZixMail.com, Inc.  From 1997 until beginning employment with CustomTracks, Dr.
Liu was President of Securisys Corporation, a digital signature, start-up
enterprise that he founded, and for a few years prior to that, he was President
of American Advanced Technology, Inc., a privately-held telecommunications
design consulting company.  Dr. Liu has a doctorate degree in physics from the
California Institute of Technology (Caltech).

     James S. Marston became a director of CustomTracks in September 1991.  From
September 1987 through February 1998, Mr. Marston served as a Senior, or
Executive, Vice President and the Chief Information Officer of APL Limited, a
U.S.-based intermodal shipping company.  Between 1986 and 1987, Mr. Marston
served as President of AMR Technical Training Division, AMR Corporation.

     Jack L. Martin became a director in August 1998.  Mr. Martin is Chairman
and founder of Public Strategies, Inc., an international strategic
communications firm that specializes in advising Fortune 500 companies.  Mr.
Martin currently serves as a director for the Scott and White Memorial Hospital
and Scott, Sherwood and Brindley Foundation, the Caesar Kleberg Foundation and
KLRU-TV.  For many years, Mr. Martin served on former U.S. Senator Bentsen's
staff and held the position of Executive Assistant to the Senator.  He served on
the Board of Regents of the Texas State University System from 1985 to 1991 and
was elected Chairman in 1988.  Mr. Martin served as the chair of the Texas
National Research Laboratory Commission, the Texas state agency that oversaw the
National Superconducting Super Collider project.

     Antonio R. Sanchez, Jr. was one of the early investors in CustomTracks in
1987 and became a director of CustomTracks in February 1993.  Presently, Mr.
Sanchez is Chairman and Chief Executive Officer of Sanchez Oil & Gas
Corporation.  Mr. Sanchez also holds interests in banking, real estate
development, industrial parks and various other investments.  Mr. Sanchez serves
as a director of International Bank of Commerce ("IBC") and as a director and
stockholder of IBC's publicly-traded holding company, International Bancshares
Corporation.  Mr. Sanchez is also a member of the University of Texas Board of
Regents.

     Dr. Ben G. Streetman became a director in July 1998.  Dr. Streetman is Dean
of the College of Engineering at the University of Texas at Austin and holds the
Dula D. Cockrell Centennial Chair in Engineering.  He is a Professor of
Electrical and Computer Engineering and was the founding director of the
Microelectronics Research Center from 1984 until 1996.  He is also a member of
the Board of Directors for National Instruments and Global Marine.

     Mark A. Tebbe became a director in March 1999.  Mr. Tebbe is President and
Chief Executive Officer of Lante Corporation, a privately-held Internet commerce
solutions and consulting firm.  He is a contributing editor to InfoWorld, a
weekly industry publication.  He is also affiliated with several technology,
software and charity boards, including COMDEX Conference, Chicago Software
Association, Guru, Inc., Saranac and Bionomics.

     Ronald A. Woessner joined CustomTracks in April 1992 as General Counsel.
He was appointed Vice President in December 1993.  He was previously a corporate
and securities attorney with the Dallas-based law firm of Johnson & Gibbs, P.C.

                                       5

<PAGE>
 
     Steve M. York joined CustomTracks in April 1990 as Vice President, Chief
Financial Officer and Treasurer.  He was appointed Senior Vice President in
April 1994.  Mr. York, a Certified Public Accountant, previously held various
financial management positions with commercial operating companies and was
employed by Arthur Young & Co. (now Ernst & Young LLP).

     Each director serves until the next annual meeting of stockholders, and
until the director's successor is duly elected and qualified, unless earlier
removed in accordance with CustomTracks' bylaws.  Officers serve at the
discretion of the Board of Directors.

     See "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS -- Transactions with
Management and Related Parties" for a description of transactions between
CustomTracks and certain directors and executive officers of CustomTracks.

Meeting Attendance and Committees of the Board

     CustomTracks has an Audit Committee of the Board of Directors, which is
currently comprised entirely of non-employee directors.  The members of the
committee are Michael E. Keane, Dr. Ben G. Streetman and Jack L. Martin.  The
committee has responsibility and authority for recommending to the Board of
Directors the auditors to serve as the independent auditors of CustomTracks'
books, records and accounts; reviewing the scope of audits made by the
independent auditors; and receiving and reviewing the audit reports submitted by
the independent auditors.  The committee met once during the year ended December
31, 1998.

     CustomTracks has a Compensation and Stock Option Committee, which is
currently comprised entirely of non-employee directors.  The members of the
committee are James S. Marston, Michael E. Keane and Jack L. Martin.  The
committee administers CustomTracks' stock option plans and executive
compensation, although any proposed compensation arrangements and option grants
for CustomTracks' corporate officers require approval of the entire Board of
Directors.  The committee did not meet during the year ended December 31, 1998.

     CustomTracks has a Nominating Committee, which is currently comprised of
Antonio R. Sanchez, Jr., David P. Cook and Dr. Ben G. Streetman.  The committee
is responsible for recommending to the Board of Directors the director nominees
for the upcoming year.  The committee will consider nominees for the Board of
Directors suggested by CustomTracks' stockholders.  Stockholders desiring to
submit nominations should forward them no later than April 12, 2000, to the
Secretary of CustomTracks, Ronald A. Woessner, at CustomTracks' principal
executive offices.  The committee met once during the year ended December 31,
1998.

     CustomTracks has an Executive Committee, which is currently comprised of
David P. Cook, James S. Marston and Antonio R. Sanchez, Jr.  The Executive
Committee has the authority to exercise the full powers of the Board of
Directors, subject to certain exceptions.  The Executive Committee did not meet
during the year ended December 31, 1998.

     The Board of Directors met on nine occasions during the year ended December
31, 1998.  All directors, except Dr. Streetman, attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all committees of the Board on which the
director served.  Dr. Streetman, who served on the Board of Directors for part
of the year, attended one of the two meetings that occurred during his tenure.

                                       6

<PAGE>
 
Section 16(a) Beneficial Ownership Reporting Compliance

     During 1998, Steve York and former executive officers John Wilson and
Michael Wolpert failed to timely file one Form 4.  In each case, the filing
related to one exercise of stock options held by them, which exercise was exempt
from Section 16(b) of the Securities and Exchange Act of 1934 by virtue of Rule
16b-3 thereunder.  Also during 1998, Antonio R. Sanchez, Jr. failed to timely
file one Form 4 with respect to four open market purchases made by him during a
single month.  In all cases, the filings were promptly made as soon as the
oversight was discovered.


               COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

     Summary Compensation Table


     The following table sets forth the compensation paid to the named
CustomTracks' executive officers for services rendered to CustomTracks for the
periods indicated. Immediately following the table are summaries of employment-
related contracts with these executive officers.


                          SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                                                                          Long-Term Compensation
                                                                             -------------------------------------
                                            Annual Compensation                        Awards           Payouts
                                         ----------------------------------  -------------------------  ----------
                                                                Other                       Number of
                                                                Annual        Restricted     Securities             All Other
                                                               Compen-         Stock        Underlying   LTIP        Compen-
Name and Principal Position      Year     Salary     Bonus      sation         Award          Options    Payouts     sation(9)
-----------------------------  --------  ----------  -------  -------------  -----------  ------------  ----------   ------------
<S>                            <C>       <C>         <C>      <C>            <C>          <C>           <C>          <C>
David P. Cook (1)                  1998  $      ---  $   ---  $     3,750(1) $      ----     4,254,627        ----   $       ----
 President, Chief Executive        1997         ---      ---       15,000(1)        ----         2,500        ----           ----
 Officer and Chairman              1996         ---      ---       15,000(1)        ----         2,500        ----           ----
 of the Board                                              
Stuart M. Evans (2)                1998     104,953   31,486      418,948(2)      68,430(5)       ----        ----            371
 Former President,                 1997     209,042     ----         ----           ----          ----        ----          1,376
 Electronic Security Group         1996     180,550   46,958         ----         34,500        15,000(5)     ----           ----
G. Russell Mortenson (3)           1998      50,000     ----      654,327(3)        ----          ----        ----           ----
 Former President, Chief           1997     300,000     ----         ----           ----       221,838(6)     ----          2,574
 Executive Officer and             1996     300,000   58,536         ----        172,500        80,000(7)     ----          1,440
 Chairman of the Board
Ronald A. Woessner                 1998     150,000   50,000         ----           ----        38,625        ----          5,156
 Vice President, General           1997     130,000    9,100         ----           ----        20,000        ----          1,820
 Counsel and Secretary             1996     120,000   21,291         ----           ----         5,000        ----          1,715
Michael H. Wolpert (4)             1998     175,083   60,379    1,468,600(4)      43,750(8)       ----        ----          2,106
 Former President,                 1997     170,500   34,807         ----           ----        20,000(8)     ----          4,077
 Cardkey Systems                   1996     155,000   55,425         ----           ----        10,000        ----          1,875
Steve M. York                      1998     193,000   50,000         ----         93,750(8)       ----        ----          2,800
 Senior Vice President,            1997     193,000     ----         ----           ----        25,000(8)     ----          2,000
 Chief Financial Officer           1996     175,000   43,162         ----         67,275        30,000(7)     ----          1,440
 and Treasurer
</TABLE>


-----------------------------------------
(1)  In February 1998, Mr. Cook became Chairman, President and Chief Executive
     Officer of CustomTracks. See "Employment and Severance Contracts with
     Certain Executive Officers" below for a description of the employment
     arrangement with Mr. Cook. "Other Annual Compensation" and option awards
     for 1997 and 1996 represent director fees and director options

                                       7

<PAGE>
 
     paid or given prior to Mr. Cook's employment.
(2)  In June 1998, in connection with the sale of a CustomTracks' subsidiary,
     Mr. Evans' employment with CustomTracks ceased. "Other Annual Compensation"
     for 1998 represents a cash severance payment to Mr. Evans. Mr. Evans'
     compensation was paid in U.K. pound sterling and has been translated to
     U.S. dollars at the applicable average rate.
(3)  Mr. Mortenson's employment with CustomTracks ceased in February 1998.
     "Other Annual Compensation" for 1998 represents a cash severance payment
     paid to Mr. Mortenson.
(4)  In November 1998, in connection with the sale of Cardkey Systems and
     related entities ("Cardkey"), Mr. Wolpert's employment with CustomTracks
     ceased. "Other Annual Compensation" for 1998 represents a cash incentive
     payment to Mr. Wolpert for his successful efforts in concluding the sale of
     Cardkey.
(5)  The "Number of Securities Underlying Options" as originally reported in
     CustomTracks' 1997 Proxy Statement for Mr. Evans included 15,000 shares
     which were "restricted shares" issuable for no additional consideration
     when a like number of option shares were exercised and held for the
     requisite period. In 1998, when the corresponding options were exercised,
     these "restricted shares" were issued. They are now reflected in the table
     under "Restricted Stock Award" for 1998, and the number of shares reflected
     in the table under "Number of Securities Underlying Options" for 1996 has
     been correspondingly reduced by the number of "restricted shares" issued.
(6)  The number of shares that may be received under 1997 option grants includes
     73,946 shares that represent "restricted shares" issuable for no additional
     consideration if and when a like number of option shares are exercised and
     held for the requisite period.
(7)  The number of shares that may be received under 1996 option grants includes
     40,000 and 15,000 shares for Messrs. Mortenson and York, respectively,
     which represent "restricted shares" issuable for no additional
     consideration if and when a like number of option shares are exercised and
     held for the requisite period.
(8)  The "Number of Securities Underlying Options" as originally reported in
     CustomTracks' 1998 Proxy Statement for Messrs. Wolpert and York included
     10,000 and 25,000 shares, respectively, which were "restricted shares"
     issuable for no additional consideration when a like number of option
     shares were exercised and held for the requisite period. In 1998, when the
     corresponding options were exercised, these "restricted shares" were
     issued. They are now reflected in the table under "Restricted Stock Award"
     for 1998, and the number of shares reflected in the table under "Number of
     Securities Underlying Options" for 1997 has been correspondingly reduced by
     the number of "restricted shares" issued. The "restricted shares" can be
     forfeited to CustomTracks if, during the three years following their
     issuance, (i) the recipient fails to hold the shares received upon exercise
     of the related stock option for the requisite period or (ii) the
     recipient's employment is terminated for cause or the recipient separates
     from employment with CustomTracks under certain other circumstances. The
     "restricted share" awards provide for, with the consent of the Board of
     Directors, lapsing of restrictions if the recipient's employment is
     terminated other than for cause or if the recipient separates from
     employment with CustomTracks under certain other circumstances.
(9)  Represents CustomTracks' contributions to CustomTracks' 401(k) Retirement
     Plan or CustomTracks' Employee Stock Purchase Plan.

     Employment and Severance Contracts with Certain Executive Officers

     CustomTracks and Mr. Cook are parties to an employment agreement, dated
April 29, 1998, which expires April 28, 2001. In consideration of the employment
agreement, CustomTracks issued to Mr. Cook options to acquire 4,254,627 shares
of CustomTracks' common stock at an exercise price of $7.00 per share (twice the
closing price of CustomTracks' common stock on the day preceding the date of the
employment

                                       8

<PAGE>
 
agreement). The options have a five-year term and vest quarterly over two years.
The options will vest immediately in the event of (i) a change of control (as
defined in the agreement) of CustomTracks, (ii) a change of control of any
material CustomTracks subsidiary that is engaged in the Internet transaction or
secure Internet-messaging businesses or other business involving a concept
primarily fostered by Mr. Cook or (iii) Mr. Cook's employment is terminated
other than for cause. Mr. Cook will receive no salary under the employment
arrangement.

     CustomTracks and Messrs. Woessner and York are parties to severance
agreements, which, per the severance agreement formulas (which are based on
years of service), as of June 30, 1999, provide for the payment to Mr. Woessner
of 17 months, and to Mr. York of 18 months, of each of their base salaries in
the event each has good reason (as defined) to resign his employment or if his
employment is terminated other than for cause. The severance agreements also
provide for the payment to Mr. Woessner of two times, and to Mr. York of three
times, each of their annual base salaries in the event his employment terminates
after a change in control (as defined) of CustomTracks. The severance agreements
also contain confidentiality and non-competition provisions.

                                       9

<PAGE>
 
     Option Grants Table

     The following table sets forth information relating to stock option grants
made by CustomTracks to the named executive officers during the year ended
December 31, 1998.


                             OPTION GRANTS IN 1998


<TABLE> 
<CAPTION> 
                                                                                    Potential Realizable
                                                                                       Value at Assumed
                                                                                    Annual Rates of Stock
                                                                                      Price Appreciation
                                           Individual Grants                           for Option Term
                               -------------------------------------------------   -----------------------------
                               Number of      % of Total
                               Securities      Options
                               Underlying     Granted to   Exercise
                                Options       Employees    Price Per  Expiration
                 Name           Granted        in 1998     Share         Date         5%                  10%
-----------------------------  ----------     ----------   ---------  ----------   -------         -------------
<S>                            <C>            <C>          <C>        <C>          <C>             <C> 
David P. Cook (1)               4,254,627          96.02%  $    7.00  04/29/2003   $   --- (1)     $     --- (1)

Stuart M. Evans (2)                   ---            ---         ---         ---       ---               ---

G. Russell Mortenson (2)              ---            ---         ---         ---       ---               ---

Ronald A. Woessner                 38,625(3)        0.87        3.56  04/28/2008    86,443           219,313

Michael H. Wolpert (2)                ---            ---         ---         ---       ---               ---

Steve M. York                         ---            ---         ---         ---       ---               ---
</TABLE>


----------------------------
(1)  See "Employment and Severance Contracts with Certain Executive Officers"
     for a description of the employment arrangement with Mr. Cook. The
     "Potential Realizable Value at Assumed Annual Rates of Stock Price
     Appreciation for Option Term" is zero since the exercise price per share of
     $7.00 is greater than the $3.50 market price of the common stock on the
     date of grant plus the assumed stock price appreciation.
(2)  Separated from employment with CustomTracks during 1998.
(3)  The options vest ratably and become exercisable over three years.  In the
     event of a change in control (as defined) of CustomTracks or a material
     CustomTracks' subsidiary under specified circumstances, the options become
     immediately exercisable.

                                       10

<PAGE>
 
          Aggregated Option Exercises and Year-End Option Value Table

          The following table sets forth information relating to the exercises
of stock options by the CustomTracks' executive officers named below during the
year ended December 31, 1998, and the value of unexercised stock options as of
December 31, 1998.

                    AGGREGATED OPTION EXERCISES IN 1998 AND
                        DECEMBER 31, 1998 OPTION VALUES


<TABLE>
<CAPTION>
 
                               Option Exercises             Number of Securities
                                 During 1998               Underlying Unexercised                      Value of Unexercised
                            ---------------------
                             Number of                             Options at                         In-the-Money Options at
                              Shares                            December 31, 1998                        December 31, 1998
                                                          --------------------------------           ------------------------------
                             Acquired      Value
           Name             on Exercise   Realized        Exercisable        Unexercisable           Exercisable      Unexercisable
--------------------------  -----------   --------        -----------        -------------           -----------      -------------
<S>                         <C>           <C>             <C>                <C>                     <C>              <C>
David P. Cook (1)                   ---   $    ---          1,093,656            3,190,971           $ 4,079,107      $  11,766,705
                                                                                                                   
Stuart M. Evans (2)              15,000        ---             34,000                  ---                97,375                ---
                                                                                                                   
G. Russell Mortenson (2)         73,946    277,297                ---                  ---                   ---                ---
                                                                                                                   
Ronald A. Woessner                  ---        ---             34,337               65,663               114,682            394,970
                                                                                                                   
Michael H. Wolpert (2)           60,000    254,840                ---                  ---                   ---                ---
                                                                                                                   
Steve M. York                    25,000        ---             61,035               28,765               182,487             91,097
</TABLE>
 
__________________________ 
(1)  See "Employment and Severance Contracts with Certain Executive Officers"
     for a description of the employment arrangement with Mr. Cook.
(2)  Separated from employment with CustomTracks during 1998.

     Compensation of Directors

     For serving on CustomTracks' Board of Directors and related committees, a
"Qualifying External Director" currently receives an annual fee of $15,000.
Also, under the terms of CustomTracks' 1996 Directors' Stock Option Plan (the
"1996 Plan"), each Qualifying External Director also receives an automatic one-
time grant of options to acquire 25,000 shares of CustomTracks' common stock at
the time of initial election or appointment to the Board. A Qualifying External
Director is a non-employee director who (a) does not, directly or indirectly,
beneficially own more than five percent of CustomTracks' common stock, or (b) is
not an employee, affiliate or designee to the Board of Directors of a person
(other than a person that is a strategic/business partner of CustomTracks) that,
directly or indirectly, beneficially owns more than five percent of
CustomTracks' common stock. In addition, under the 1996 Plan, a Qualifying
External Director receives an automatic annual grant of 2,500 options while
continuing to serve on the Board of Directors. Under share ownership guidelines
adopted by the Board of Directors, CustomTracks' non-employee directors are
encouraged to own at least 10,000 shares of CustomTracks' common stock.

                                       11

<PAGE>
 
     As noted below under "Proposal 4. Adoption of the CustomTracks Corporation
1999 Directors' Stock Option Plan," on January 28, 1999, the Board of Directors
adopted the CustomTracks Corporation 1999 Directors' Stock Option Plan (the
"1999 Plan"), subject to the approval of the stockholders of CustomTracks at the
meeting. If approved by the stockholders, the 1999 Plan will replace the 1996
Plan, the annual $15,000 retainer fee for participating directors and the
director share ownership guidelines.

     Transactions with Management and Related Parties

     In May 1998, CustomTracks acquired Petabyte Corporation ("Petabyte"), a
digital data distribution start-up enterprise founded by Mr. Cook. In
consideration of the sale of Petabyte, CustomTracks paid Mr. Cook $200,000 and
agreed to pay Mr. Cook four annual payments of $200,000 each. Effective March
1999, CustomTracks returned title to a Petabyte patent covering certain digital
data distribution concepts to Mr. Cook, while retaining a use license to the
patent for a nominal payment. In connection with the return of the patent,
CustomTracks' future payments to Mr. Cook, totaling $800,000, have been
eliminated.

     In February 1999, CustomTracks entered into an agreement with Lante
Corporation ("Lante"), a privately-held Internet commerce solutions and
consulting firm, to assist CustomTracks in the development of CustomTracks'
Internet transaction and secure Internet-messaging systems. Mr. Tebbe, who was
subsequently elected a director of CustomTracks, is President and Chief
Executive Officer of Lante and is its majority stockholder. In exchange for the
services to be provided by Lante, CustomTracks will pay cash for work performed
at discounted rates and has issued options to purchase 500,000 shares of
CustomTracks' common stock to Lante at an exercise price of $7.62 per share, the
closing price of CustomTracks' common stock on the date of the agreement. The
options vest over three years and expire at the end of ten years.

     In April 1999, CustomTracks entered into an agreement with Public
Strategies, Inc. ("PSI"), an international strategic communications firm, to
assist in the marketing of CustomTracks' Internet transaction and secure
Internet-messaging systems. Mr. Martin, a director of CustomTracks, is Chairman
of PSI. In exchange for the services to be performed by PSI, CustomTracks will
pay PSI a monthly retainer of $75,000.

     Mr. Sanchez, a director of CustomTracks, is a director of the International
Bank of Commerce, Laredo, Texas ("IBC"), and a director and stockholder of IBC's
publicly-traded holding company, International Bancshares Corporation.
CustomTracks formerly had a banking relationship with IBC and maintained a
checking account and short-term investments with IBC, which terminated in June
1998. The average month-end balance during 1998 of such checking account and
short-term investments was approximately $1,074,000.

     Mr. York is indebted to CustomTracks in the principal amount of $251,425,
which amount represents money loaned by CustomTracks to fund the exercise of
retention incentive options. Mr. York's indebtedness is represented by
promissory notes that bear interest at the rate of 6.61%, 5.61% and 4.66% per
annum. All notes are secured by the shares issued upon exercise of the retention
incentive options. The notes of Mr. York are due in May 2000, December 2001 and
September 2002 (unless becoming due earlier under certain circumstances
described in the notes).

                                       12

<PAGE>
 
     On June 11, 1998, CustomTracks sold its Transportation Systems Group to
UNOVA, Inc. ("UNOVA"), effective as of May 31, 1998, resulting in a pre-tax gain
of $1,139,000. Mr. Keane, a director of CustomTracks, is Senior Vice President
and Chief Financial Officer of UNOVA. As consideration for the sale,
CustomTracks received $22,350,000 in cash and 2,211,900 unregistered shares of
CustomTracks' common stock that were previously purchased by UNOVA in late 1997.
The shares were valued at $10,921,000.

     Compensation Committee Interlocks and Insider Participation

     As noted below under "REPORT OF BOARD OF DIRECTORS ON ANNUAL COMPENSATION,"
the entire Board of Directors established CustomTracks' compensation policies in
1998. Mr. Cook, CustomTracks' President and Chief Executive Officer,
participated in deliberations of CustomTracks' Board of Directors concerning
executive compensation during the year ended December 31, 1998. Mr. Martin, a
director of CustomTracks, is Chairman of Public Strategies, Inc., a firm engaged
by CustomTracks to assist in the marketing of its Internet transaction and
secure Internet-messaging systems. Mr. Keane, a director of CustomTracks, is
Senior Vice President and Chief Financial Officer of UNOVA, Inc., the purchaser
of CustomTracks' Transportation Systems Group. Mr. Sanchez, a director of
CustomTracks, is a director of the International Bank of Commerce, Laredo,
Texas, with which CustomTracks had a banking relationship. See "COMPENSATION OF
DIRECTORS AND EXECUTIVE OFFICERS - Transactions with Management and Related
Parties."

          REPORT OF BOARD OF DIRECTORS ON ANNUAL COMPENSATION

     During 1998, CustomTracks hired a new President and Chief Executive Officer
and, in the course of transitioning to its new lines of business, sold all of
its operating units. As a result of these changes, four of the five most highly
compensated CustomTracks executive officers at the beginning of 1998 are no
longer employed by CustomTracks.

     Former Executive Officers

     A discussion of the compensation paid to CustomTracks' executive officers
that separated from employment with CustomTracks in 1998 follows.

     No bonus was paid in 1998 to Mr. Mortenson, CustomTracks' former President
and Chief Executive Officer, who separated from employment with CustomTracks in
February 1998. Pursuant to Mr. Mortenson's severance arrangement with
CustomTracks, CustomTracks reported an expense of approximately $1 million,
which included a cash payment of $654,327, with the balance being primarily
attributable to the value of certain option shares awarded to Mr. Mortenson.

     Mr. Evans, the President of CustomTracks' former Electronic Security Group,
separated from employment with CustomTracks in July 1998 in connection with the
sale of CustomTracks' Cotag International business unit. Mr. Evans received a
bonus of $31,486 under the bonus plan applicable to him for the period of time
that he was employed with CustomTracks. Also, pursuant to Mr. Evans' severance
agreement with CustomTracks, CustomTracks reported an expense of approximately
$500,000, which included a cash payment of $418,948, with the balance being
attributable to the lapse of restrictions on certain restricted stock shares
held by Mr. Evans.

     Mr. Wilson, the President of CustomTracks' former Transportation Systems
Group, separated from employment with CustomTracks in June 1998 in connection
with the sale of CustomTracks' Transportation 

                                       13

<PAGE>
 
Systems Group business unit. Mr. Wilson earned a bonus of $20,400 under the
bonus plan applicable to him for the period of time that he was employed with
CustomTracks. Also, pursuant to his separation from employment, CustomTracks
reported a $60,938 expense, which was attributable to the lapse of restrictions
on certain restricted stock shares held by Mr. Wilson.

     Mr. Wolpert, the President of CustomTracks' former Cardkey Systems unit,
separated from employment with CustomTracks in November 1998 in connection with
the sale of the Cardkey Systems business unit. Mr. Wolpert received a bonus of
$60,379 under the bonus plan applicable to him for the period of time that he
was employed with CustomTracks. Also, CustomTracks paid Mr. Wolpert a cash
incentive of $1,468,600 for his successful efforts in concluding the sale of
Cardkey Systems. Furthermore, pursuant to his separation from employment,
CustomTracks reported a $66,250 expense, which was attributable to the lapse of
restrictions on certain restricted stock shares held by Mr. Wolpert.

     Executive Officers at December 31, 1998

     At December 31, 1998, CustomTracks' executive officers were David P. Cook,
President and Chief Executive Officer; Steve M. York, Senior Vice President and
Chief Financial Officer; and, Ronald A. Woessner, Vice President and General
Counsel.

     Mr. Cook receives no salary from CustomTracks.  The compensation under his
employment arrangement consists entirely of options to acquire 4,254,627 shares
of CustomTracks' common stock at an exercise price of $7.00 per share.  See
"COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS - Employment and Severance
Contracts with Certain Executive Officers" for the terms of the employment and
option agreements.  Since Mr. Cook's compensation is entirely stock based, his
interests are aligned precisely with that of CustomTracks' stockholders.  Mr.
Cook's employment arrangement was approved, in principle, by the entire Board of
Directors, while the details were negotiated by an ad-hoc committee of the Board
consisting of outside directors, with the assistance of CustomTracks' General
Counsel and special outside counsel retained by CustomTracks.  The Board
believes that the employment arrangement is appropriate in light of Mr. Cook's
demonstrated prior success in founding and nurturing start-up and development
stage enterprises.

     Mr. York did not receive any increase in base salary for 1998, although
CustomTracks did increase the base salary for Mr. Woessner to remain competitive
with salaries being paid for comparable positions.  Messrs. York and Woessner
received bonuses for 1998 in recognition of their successful efforts in
effecting the disposition of CustomTracks' operating units.  Neither Mr. York
nor Mr. Woessner received any increase in base salary compensation for 1999.

     CustomTracks also uses stock option grants under CustomTracks' stock option
plans to link executive compensation to stock price performance and to provide
long-term incentives.

     Internal Revenue Code (S)162(m) Compliance

     Compensation in excess of $1 million per year realized by any of
CustomTracks' five most highly compensated executive officers is not deductible
by CustomTracks for federal income tax purposes unless the compensation
arrangement complies with the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended.  In 1998, none of CustomTracks' named
executive officers earned compensation that was not deductible for federal
income tax purposes except for $828,600 paid to Mr. Wolpert, which was not
deductible under the golden parachute provisions of Section 280G of the Internal
Revenue Code.

                                       14

<PAGE>
 
     The options granted to Mr. Cook in 1998 will, during the year of exercise,
likely result in Mr. Cook realizing compensation in excess of $1 million,
depending on the number of options exercised and the price of the CustomTracks'
stock at the time.  These options do not comply with the requirements of Section
162(m), which, among other things, would have required CustomTracks to obtain
stockholder approval of the option grant.  When CustomTracks and Mr. Cook were
discussing his potential employment, time was of the essence.  Seeking
stockholder approval of his option grant would have, in the Board's opinion,
imposed an unwarranted and harmful delay in completing the employment
arrangement and Mr. Cook commencing his employment duties.

                              BOARD OF DIRECTORS
                              ------------------

                              David P. Cook
                              Michael E. Keane
                              James S. Marston
                              Jack L. Martin*
                              Antonio R. Sanchez, Jr.
                              Dr. Ben G. Streetman*
                              Mark A. Tebbe*

------------------------ 
* Many of the compensation decisions discussed above were made prior to Messrs.
  Martin and Tebbe and Dr. Streetman being appointed to the Board.


     This Report will not be deemed to be incorporated by reference in any
filing by CustomTracks under the Securities Act of 1933 (the "Securities Act")
or the Securities Exchange Act of 1934 ("Exchange Act"), except to the extent
that CustomTracks specifically incorporates this Report by reference.

                                       15

<PAGE>
 
     Performance Graph
 
     The following graph shows a comparison of cumulative total returns of an
investment in (i) CustomTracks' common stock, (ii) the Center for Research in
Securities Prices ("CRSP") Total Return Index for The NASDAQ Stock Market (U.S.
companies) and (iii) the CRSP Total Return Index for NASDAQ Electronic Component
Stocks, in each case, for the period since December 31, 1993.  The comparison
assumes $100 was invested on December 31, 1993, in CustomTracks' common stock
and in each of the two indices and assumes reinvestment of dividends.  A listing
of the companies comprising each of the CRSP-NASDAQ indices used in the
following graph is available, without charge, upon written request.


                             [GRAPH APPEARS HERE]


                   COMPARISON OF FIVE YEAR CUMULATIVE RETURN
                        AMONG CUSTOMTRACKS CORPORATION
                      CRSP-NASDAQ STOCK MARKET (U.S.) AND
                    CRSP-NASDAQ ELECTRONIC COMPONENT STOCKS


<TABLE>
<CAPTION>
                                                   CRSP-NASDAQ
                                     CRSP-NASDAQ   ELECTRONIC
Measurement period    CUSTOMTRACKS  STOCK MARKET    COMPONENT
(Year Covered)        CORPORATION      (U.S.)        STOCKS
--------------------  ------------  -------------  -----------
<S>                   <C>           <C>            <C>
     12/93               $100.00       $100.00        $100.00  
     12/94               $ 40.10       $ 97.75        $110.49  
     12/95               $ 21.35       $138.26        $182.99  
     12/96               $ 27.54       $170.01        $316.46  
     12/97               $ 16.67       $208.58        $331.74  
     12/98               $ 44.53       $293.21        $512.87  
</TABLE>


     The stock price performance depicted in the above graph is not necessarily
indicative of future price performance.  The Performance Graph (the "Graph")
will not be deemed to be incorporated by reference in any filing by CustomTracks
under the Securities Act or the Exchange Act, except to the extent that
CustomTracks specifically incorporates the Graph by reference.

                                       16

<PAGE>
 
                   MATTERS TO BE BROUGHT BEFORE THE MEETING

     Proposal 1.  Election of Directors

     Seven directors will be elected at the meeting.  The persons named below
have been nominated for election as directors.  Should any nominee become unable
or unwilling to accept nomination or election, no person will be substituted in
his stead, and the Board of Directors, in accordance with the bylaws of
CustomTracks, will by resolution reduce the number of members of the Board of
Directors accordingly.  The Board of Directors has no reason to believe that any
of the nominees will be unable or unwilling to serve if elected, and to the
knowledge of the Board of Directors, each of the nominees intends to serve the
entire term for which election is sought.


<TABLE>
<CAPTION>
Name (1)                                    Principal Occupation                    Director Since
-------------------------  -------------------------------------------------------  --------------
<S>                        <C>                                                      <C>
David P. Cook              Chairman, President and Chief Executive Officer,              1995/(2)/
                           CustomTracks Corporation

Michael E. Keane           Senior Vice President and Chief Financial Officer,            1997      
                            UNOVA, Inc.                                                             

James S. Marston           Private Investor                                              1991      
                                                                                                   
Jack L. Martin             Chairman, Public Strategies, Inc.                             1998      

Antonio R. Sanchez, Jr.    Chairman and Chief Executive Officer, Sanchez Oil &           1993      
                            Gas Corporation                                                         

Dr. Ben G. Streetman       Dean, College of Engineering at the University of Texas       1998      
                            at Austin                                                               
                                                                                                   
Mark A. Tebbe              President and Chief Executive Officer,                        1999      
 c                          Lante Corporation
</TABLE>

s
______________________________ 
(1)  For information concerning the ages, business experience and background of
     the nominees, see "MANAGEMENT -- Directors and Executive Officers."

(2)  Mr. Cook also served on CustomTracks' Board of Directors from 1984 to
     1990.

     THE BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" EACH OF THE NOMINEES FOR
DIRECTOR SET FORTH ABOVE.

     Proposal 2.  Amendment to the Articles of Incorporation to Change the Name
of CustomTracks to ZixIt Corporation

     CustomTracks has announced two new products, ZixMail(TM) (a secure 
Internet-messaging system) and ZixCharge(TM) (an Internet transaction system).
Accordingly, CustomTracks proposes to amend its Articles of Incorporation to
formally change its name to ZixIt Corporation. CustomTracks believes that this
name is appropriate for its new line of technology since two of its expected new
products use the "Zix" prefix. To that end, CustomTracks has filed for federal
trademark/service mark protection for the names ZixIt, ZixMail, ZixCharge and
related marks. This amendment was approved by the Board of

                                       17

<PAGE>
 
Directors, and the Board recommends stockholder approval. If this proposal is
approved by the stockholders, an amendment to CustomTracks' Articles of
Incorporation will be filed to effect the name change as promptly as
practicable.

     The affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock, in person or by proxy, is required to
approve the proposal to amend CustomTracks' Articles of Incorporation to
formally change the name of CustomTracks to ZixIt Corporation.

     THE BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" THE ADOPTION OF THIS
AMENDMENT TO CUSTOMTRACKS' ARTICLES OF INCORPORATION TO FORMALLY CHANGE THE NAME
OF CUSTOMTRACKS TO ZIXIT CORPORATION.

     Proposal 3.  Amendment to the Articles of Incorporation to Increase the
Number of Authorized Shares of Common Stock

     CustomTracks presently has authorized for issuance 30 million shares of
common stock, par value $0.01 per share.  The Board of Directors has approved
and recommends that the stockholders of CustomTracks adopt an amendment to
CustomTracks' Articles of Incorporation to increase the number of authorized
shares of common stock from 30 million to 175 million shares.  As of June 30,
1999, there were approximately 15.3 million common stock shares outstanding and
an additional approximately 5.7 million shares reserved for issuance in
connection with CustomTracks' stock option plans and options held by third
parties, for a total of approximately 21 million shares.  This would leave
approximately 9 million common stock shares available for future uses.

     Although the Board of Directors has no present plans, arrangements,
understandings or commitments to issue the additional authorized shares of
common stock if this proposal is adopted, the proposed increase in authorized
shares will provide CustomTracks with the capability and flexibility in its
capital structure for investments and acquisitions, stock splits or stock
dividends, stock option and other stock based incentive plans, future
financings, using stock options to compensate third-party consulting and
software development firms, and for other general corporate purposes.
Accordingly, the Board believes that the proposed amendment to increase the
number of authorized shares of common stock should be approved. If this proposal
is approved by the stockholders, an amendment to CustomTracks' Articles of
Incorporation will be filed to effect the increase in the number of authorized
shares of common stock as promptly as practicable.

     The number of authorized shares of CustomTracks' preferred stock would
remain unchanged as a result of this proposal.

     Authorized but unissued shares of CustomTracks' common stock may be issued
at such times, for such purposes and for such consideration as the Board of
Directors may determine to be appropriate.  No further authorization by vote of
the stockholders will be solicited for the issuance of the additional shares of
common stock proposed to be authorized, except as might be required by law,
regulatory authorities or rules of NASDAQ or any stock exchange on which
CustomTracks' shares may then be listed.  The additional shares of common stock
to be authorized will have the same status as presently authorized common stock.
The stockholders do not have any right to purchase or subscribe for any part of
any new or additional issuance of CustomTracks' securities.  To the extent that
the additional authorized shares are issued in the future, they would decrease
the existing stockholders' relative percentage ownership in CustomTracks.

                                       18

<PAGE>
 
     The proposed increase in authorized shares of common stock is not intended
to impede a change in control of CustomTracks, and CustomTracks is not aware of
any current efforts to acquire control of CustomTracks.  However, it is possible
that the additional shares could be issued as a means of preventing or
discouraging an unsolicited change in control of CustomTracks.  The issuance of
additional shares could be used to dilute the ownership of anyone seeking to
gain control of CustomTracks or could be placed with an entity opposed to a
change in control.  Management has no present intention to propose any anti-
takeover measures in future proxy solicitations.

     The affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock, in person or by proxy, is required to
approve the proposal to amend CustomTracks' Articles of Incorporation to
increase the number of authorized shares of common stock from 30 million to 175
million.

     THE BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" THE ADOPTION OF THIS
AMENDMENT TO CUSTOMTRACKS' ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK.

     Proposal 4.  Adoption of the CustomTracks Corporation 1999 Directors' Stock
Option Plan

     General

     On January 28, 1999, the Board of Directors adopted the CustomTracks
Corporation 1999 Directors' Stock Option Plan (the "1999 Plan" or the "Plan"),
subject to approval of the stockholders of CustomTracks at the meeting.  The
1999 Plan provides for the automatic grant of options to acquire shares of
CustomTracks' common stock to non-employee directors of CustomTracks, as
described below.  Assuming approval by CustomTracks' stockholders, the 1999 Plan
will replace CustomTracks' 1996 Directors' Stock Option Plan and provisions in
CustomTracks' other option plans that provide for the automatic grant of options
to directors.  Also under the 1999 Plan, directors that are eligible to receive
the annual automatic options grants will no longer receive the annual $15,000
retainer fee.

     The maximum number of common stock shares with respect to which options may
be granted under the Plan is 750,000, subject to adjustment as described below.
The aggregate market value of these 750,000 shares was $41,953,125 as of June
30, 1999.  The 1999 Plan will become effective upon approval by the stockholders
and will expire ten years from January 28, 1999, unless terminated earlier.

     The purpose of the 1999 Plan is to strengthen the ability of CustomTracks
to attract and retain non-employee directors of high caliber through encouraging
a sense of proprietorship through stock ownership.

     A copy of the 1999 Plan is attached to this Proxy Statement as Appendix A,
                                                                    ---------- 
and the following summary is qualified in its entirety by reference to the full
text of the 1999 Plan.  The following is a summary of certain provisions of the
1999 Plan.

     Automatic Grants of Options; Exercise Price

     The 1999 Plan provides that on the day that a non-employee director is
first appointed or elected to the Board of Directors, such director will be
granted options to purchase 25,000 shares of CustomTracks' common stock.  These
options vest six months from the grant date, and the exercise price will be 100%
of the common stock price on the grant date.

                                       19

<PAGE>
 
     Thereafter, on the first business day of each subsequent January during the
term of the 1999 Plan, each non-employee director that has served on the Board
of Directors at least 12 consecutive months will automatically receive a further
grant of options.  The number of options received by each non-employee director
in a given year will be determined according to the following formula: 1% of the
number of CustomTracks' outstanding common stock shares as of the December 31
immediately preceding the grant date divided by the number of then-eligible
directors.  However, in no event may the number of shares granted a director in
any given year exceed one-half of 1% of CustomTracks' outstanding common stock
shares.  The exercise price for these options will be 120% of the common stock
price on the grant date.

     These annual options will be 100% vested as of the grant date.  The shares
underlying the options are subject to sale restrictions that lapse annually and
pro-rata over three years from the option grant date.  Thus, one-third of the
shares may be sold after one year, two-thirds after two years, and all after
three years.  The sale restrictions will immediately lapse if (a) a change in
control of CustomTracks occurs or (b) the director is removed by vote of the
stockholders other than for cause.

     The exercise price of all options under the 1999 Plan may not be "re-
priced" without approval of CustomTracks' stockholders (obtained in accordance
with applicable law).  The options may not be exercised after the tenth
anniversary of the grant date.

     The following eligible non-employee directors received immediately vested
option grants on January 28, 1999 under the 1999 Plan to acquire the number of
shares of CustomTracks' common stock indicated below, subject to the approval of
the 1999 Plan by CustomTracks' stockholders at the meeting:

                               NEW PLAN BENEFITS


<TABLE>
<CAPTION>
                                                  Number of Securities    
          Name                  Dollar Value (1)   Underlying Options     
     -----------------          ----------------  --------------------     
     <S>                        <C>               <C>                     
     Michael E. Keane                $2,278,449               50,308      
     James S. Marston                $2,278,449               50,308      
     Antonio R. Sanchez, Jr.         $2,278,449               50,308       
</TABLE>


__________________
(1)  These amounts represent the dollar value of the option grants, based upon
the exercise price of $10.65 and the closing price of $55.94 per share of common
stock on June 30, 1999.

     The exercise price of these options is $10.65 per share (which is 120% of
the closing price of CustomTracks' common stock on January 28, 1999).  See
"Certain Financial Reporting Consequences of Option Grants under 1999 Plan"
below for a discussion of the accounting for stock option grants issued to non-
employee directors.  Under current financial accounting rules, assuming the 1999
Plan is approved at the meeting, for each of these January 28, 1999 option
shares, CustomTracks will incur a non-cash expense equal to the amount, if any,
by which the fair market value of CustomTracks' common stock on September 14,
1999 exceeds the $10.65 per share exercise price.  This expense will occur in
the third quarter of 1999.  As noted above, these three directors will also
receive immediately vested options to acquire additional shares of CustomTracks'
common stock on each subsequent first business day of January that they serve on
CustomTracks' Board of Directors.

                                       20

<PAGE>
 
     All options are "non-qualified" options since they are not qualified under
Section 422 of the Internal Revenue Code of 1986, as amended.  The 1999 Plan
does not provide for the grant of any type of award other than the automatic
grant of options to acquire common stock as described above.

     Amendment and Termination

     The Board of Directors may amend, abandon, suspend or terminate the Plan or
any portion thereof at any time in such respects as it may deem advisable in its
sole discretion, provided that no amendment shall be made without stockholder
approval if such amendment is material or if stockholder approval is necessary
to comply with any tax or regulatory requirement.  No options may be granted
under the 1999 Plan after January 27, 2009.

     Certain Financial Reporting Consequences of Option Grants under 1999 Plan

     Current Rules
     -------------

     The accounting for director stock options is presently determined by the
provisions of Accounting Principles Board Opinion No. 25 "Accounting for Stock
Issued to Employees" ("APB 25").  Under APB 25, assuming the 1999 Plan is
approved at the meeting, for each January 28, 1999 option grant share,
CustomTracks will incur a non-cash expense equal to the amount, if any, by which
the fair market value of CustomTracks' common stock on September 14, 1999
exceeds the $10.65 per share exercise price.  This expense will be charged to
income in the third quarter of 1999.  There would be no charge to income for
future grants under the Plan since the option exercise prices would equal or
exceed 100% of the fair market value of CustomTracks' common stock on the date
of grant.

     Proposed Rules
     --------------

     The current rules are likely to be replaced.  The Financial Accounting
Standards Board is currently considering adopting new financial accounting rules
that affect the valuation for financial reporting purposes of stock options
issued to non-employee directors.  The proposed rules will require that the fair
value of non-employee director stock options be determined using an option
pricing model, such as the Black-Scholes model.  Under these rules, for the
25,000 initial grant shares, CustomTracks will incur a non-cash charge to income
equal to the fair value of the options on the date of grant.  The non-cash
charge will be amortized over six months, which is the vesting period of the
options.  However, from the date of grant through the end of the six-month
vesting period, the options will be revalued, and CustomTracks will recognize a
cumulative catch-up adjustment reflecting any changes in their fair value.  For
the annual immediately vested options, in the first quarter of each year
CustomTracks will incur a non-cash charge to income equal to the fair value of
the options granted on January 1 of that year.  As a result, CustomTracks'
future operating results could be materially impacted by non-employee director
option grants and changes in the price of CustomTracks' common stock during the
six-month vesting period (which will affect the valuation of the stock options).

     Certain Federal Income Tax Consequences

     An optionee will not realize any taxable income, and CustomTracks will not
be entitled to any federal income tax deduction, at the time the option is
granted.  At the time the option is exercised, however, the optionee generally
will realize ordinary income in an amount equal to the excess of the fair market
value of the common stock on the date of exercise over the option price paid,
and CustomTracks will generally be entitled to a corresponding federal income
tax deduction.

                                       21

<PAGE>
 
     Effect of 1999 Plan on Existing Board Compensation Arrangements

     If approved by CustomTracks' stockholders, the 1999 Plan will replace
CustomTracks' 1996 Directors' Stock Option Plan and all other stock option plan
provisions that provide for the automatic grant of options to directors.  Under
these existing plans, a Qualifying External Director receives an option to
acquire 25,000 shares of CustomTracks' common stock upon the date of initial
election or appointment to CustomTracks' Board of Directors and 2,500 option
shares on each subsequent date of re-election to the Board.  The option exercise
price for both the 25,000 share grant and the 2,500 share grant is the fair
market value of CustomTracks' stock on the grant date, and the options vest six
months from the grant date.

     Also, if the 1999 Plan is approved by CustomTracks' stockholders, external
directors that are eligible to receive the 1999 Plan annual option grants (i.e.,
those that have served on the Board at least 12 months) will no longer receive a
directors' retainer fee (which is currently $15,000 per annum).  CustomTracks
will continue to pay a retainer fee to non-employee directors until they are
eligible to receive the annual grants under the 1999 Plan.

     Amendment to CustomTracks' 1995 Long-Term Incentive Plan
 
     To decrease the potential dilution to the stockholders that might result
from the issuance of stock-based awards under CustomTracks' benefit plans,
CustomTracks' has amended its 1995 Long-Term Incentive Plan (the "1995 Plan") to
limit the types of awards available thereunder.  As amended, the only types of
future awards that are permitted under the 1995 Plan are stock options.  Prior
to amendment, in addition to stock options, the 1995 Plan permitted the award of
performance shares, restricted stock and other stock-based awards.  Non-employee
directors of CustomTracks are not eligible to receive awards under the 1995
Plan, as amended.
 
     Summary

     The Board of Directors believes that the 1999 Plan is in the best interest
of CustomTracks and its stockholders and is necessary to enable it to attract
and retain highly qualified non-employee directors.  The affirmative vote of a
majority of the shares of common stock entitled to vote on, and that vote for or
against or expressly abstain with respect to, this matter is required to adopt
the 1999 Plan.  A vote "FOR" the adoption of the 1999 Plan will, according to
the terms of the Plan, approve the grant of immediately vested options to
acquire 50,308 shares of common stock, at an exercise price of $10.65 per share,
to each of Messrs. Keane, Marston and Sanchez.

     THE BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" THE ADOPTION OF THE
CUSTOMTRACKS CORPORATION 1999 DIRECTORS' STOCK OPTION PLAN.

                      DEADLINE FOR STOCKHOLDER PROPOSALS

     Stockholders intending to submit proposals to be included in the proxy
materials for the 2000 Annual Meeting of Stockholders must submit their
proposals in writing so that they will be received by CustomTracks no later than
April 12, 2000.  The proposals should be directed to the Secretary of
CustomTracks, Ronald A. Woessner, CustomTracks Corporation, One Galleria Tower,
13355 Noel Road, Suite 1555, Dallas, Texas, 75240-6604.  Under Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended, proposals of
stockholders must conform to certain requirements as to form and may be omitted
from the proxy materials under certain circumstances.  To avoid unnecessary
expenditures of

                                       22

<PAGE>
 
time and money by stockholders and CustomTracks, stockholders are urged to
review this Rule and, if questions arise, consult legal counsel prior to
submitting a proposal to CustomTracks.

                                 MISCELLANEOUS

     The Board of Directors of CustomTracks knows of no matters other than those
described herein that will be presented for consideration at the meeting.  If,
however, other matters come before the meeting, the proxy holders intend to vote
all proxies in accordance with their best judgment in the interest of
CustomTracks.

     A representative of Ernst & Young LLP, independent auditors of
CustomTracks, is expected to be present at the meeting, and will be afforded an
opportunity to make a statement, if such representative so desires, and to
respond to appropriate questions.

     The cost of solicitation of proxies, including the cost of preparing,
printing and mailing proxy materials and the cost of reimbursing brokers for
forwarding proxies and Proxy Statements to their principals, will be borne by
CustomTracks.  CustomTracks has engaged Corporate Investor Communications, Inc.
to assist in the solicitation of proxies from stockholders at a fee of
approximately $5,000 plus reimbursement of reasonable out-of-pocket expenses.
Proxies may also be solicited without extra compensation by the officers and
employees of CustomTracks by telephone, facsimile, telegraph or personally.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of shares of common stock held of record by such persons, and
CustomTracks may reimburse them for reasonable out-of-pocket expenses incurred
by them.

     PLEASE DATE, SIGN AND RETURN THE PROXY AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED ENVELOPE.  NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.  A
PROMPT RETURN OF YOUR PROXY WILL BE APPRECIATED, AS IT WILL SAVE THE EXPENSE OF
FURTHER MAILINGS.

     A copy of CustomTracks' 1998 Annual Report containing audited financial
statements accompanies this Proxy Statement.  The Annual Report does not
constitute any part of the proxy solicitation material.

                                    By Order of the Board of Directors



                                    RONALD A. WOESSNER
                                       Secretary
Dallas, Texas
August 10, 1999

                                       23

<PAGE>
 
                                  APPENDIX A
                                  ----------

                           CUSTOMTRACKS CORPORATION
                       1999 DIRECTORS' STOCK OPTION PLAN

Section 1.  Purpose
            -------

     The purpose of the CustomTracks Corporation 1999 Directors' Stock Option
Plan (hereinafter called the "Plan") is to advance the interests of CustomTracks
Corporation, a Texas corporation (hereinafter called the "Company"), by
strengthening the ability of the Company to attract, on its behalf, and retain
External Directors (as defined below) of high caliber through encouraging a
sense of proprietorship by means of stock ownership.


Section 2.  Definitions
            -----------


     "Adoption Date" shall mean January 28, 1999.

     "Board" shall mean the Board of Directors of the Company.

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time-
to-time.

     "Committee" shall mean the entire Board of Directors, or if the
administration of the Plan has been delegated to a committee of the Board, a
committee selected by the Board and comprised of at least two directors.  To the
extent necessary to comply with the requirements of Rule 16b-3, the Committee
shall consist of two or more Non-Employee Directors.

     "Common Stock" shall mean the Common Stock of the Company, par value $.01
per share.

     "Date of Grant" shall mean the date on which an Option is granted under the
Plan.

     "Designated Beneficiary" shall mean the beneficiary designated by the
Optionee, in a manner determined by the Committee, to receive amounts due the
Optionee in the event of the Optionee's death.  In the absence of an effective
designation by the Optionee, Designated Beneficiary shall mean the Optionee's
estate.

     "Eligible Director" shall mean an External Director who has served on the
Board at least 12 consecutive months as of the Date of Grant.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "External Director" shall mean a member of the Board who is not an employee
of the Company or a subsidiary.

     "Fair Market Value" shall mean the closing sales price (or average of the
quoted closing bid and asked prices if there is no closing sales price reported)
of the Common Stock on the date specified as reported by the NASDAQ Stock
Market, or by the principal national stock exchange on which the Common Stock is
then listed.  If there is no reported price information for such date, the Fair
Market Value will be determined by the reported price information for Common
Stock on the day nearest preceding such date.

                                      A-1

<PAGE>
 
     "Grant Shares" shall mean, with respect to each Eligible Director for a
particular year, a number of shares calculated according to the following
formula: 1% of the number of the Company's outstanding Common Stock shares as of
the December 31 immediately preceding the Date of Grant divided by the number of
then-Eligible Directors. In no event, may the number of Grant Shares in any
given year to any given Eligible Director exceed one-half of 1% of the Company's
outstanding Common Stock shares.

     "Non-Employee Director" shall have the meaning given such term in Rule 
16b-3.

     "Option" shall mean a nonqualified option to purchase shares of the
Company's Common Stock.

     "Optionee" shall mean the person to whom an Option is granted under the
Plan or who has obtained the right to exercise an Option in accordance with the
provisions of the Plan.

     "Rule 16b-3" shall mean Rule 16b-3 of the rules and regulations under the
Exchange Act as it may be amended from time-to-time and any successor provision
to Rule 16b-3 under the Exchange Act.


Section 3.  Administration
            --------------

     The Plan shall be administered by the Committee. The Committee shall have
sole and complete authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing the operation of the Plan as it shall
from time-to-time deem advisable, and to construe, interpret and administer the
terms and provisions of the Plan and the agreements thereunder. The
determinations and interpretations made by the Committee are final and
conclusive and binding on all persons.

Section 4.  Eligibility
            -----------

     All External Directors shall be eligible to receive awards of Options under
the Plan.

Section 5.  Maximum Amount Available for Awards
            -----------------------------------

     Subject to the provisions of Section 9, the maximum number of shares of
Common Stock in respect of which Options may be granted under the Plan shall be
750,000 shares of Common Stock. Shares of Common Stock may be made available
from authorized but unissued shares of the Company or from shares reacquired by
the Company, including shares purchased in the open market. In the event that an
Option is terminated unexercised as to any shares of Common Stock covered
thereby, such shares shall thereafter be again available for award pursuant to
the Plan.

Section 6.  Stock Options
            -------------

     (a)    During the term of the Plan, on the day that an External Director is
first appointed or elected to the Board, such director shall be granted
nonqualified Options to purchase 25,000 shares of the Company's Common Stock.
Also, during the term of the Plan, on the first business day of January of each
year after the Adoption Date, each Eligible Director shall be granted Options to
purchase the Grant Shares. Each Eligible Director serving on the Board on the
Adoption Date shall be granted Options to purchase the Grant Shares, effective
as of the Adoption Date. Directors that receive the Grant Shares are not
eligible to receive a directors' retainer cash payment, although they are
eligible to be reimbursed for expenses related to Board activities.

     (b)    All Options granted under the Plan prior to shareholder approval of
the Plan shall be subject to the approval of the Plan by the shareholders of the
Company.

                                      A-2

<PAGE>
 
     (c)  The exercise price of the 25,000 share option grants shall be 100% of
the Fair Market Value of the Common Stock on the Date of Grant. The exercise
price for the Grant Shares shall be 120% of the Fair Market Value of the Common
Stock on the Date of Grant. The exercise price of any outstanding Options may
not be repriced without the approval of the Company's shareholders (obtained in
accordance with applicable law), given in each specific instance.

     (d)  Each Option hereunder shall be evidenced in writing, delivered to the
Optionee, and shall be exercisable at such times and subject to such terms and
conditions as specified in the applicable grant and agreement, subject to the
following principles:


     (1)  the 25,000 share option grants shall vest six months from the Date of
          Grant, while the Grant Shares option grants shall be 100% vested as of
          the Date of Grant;

     (2)  the Grant Shares are subject to the following transfer restrictions:
          100% of the shares may not be transferred for one year from the Date
          of Grant, 66% of the shares may not be transferred for two years, and
          33% may not be transferred for three years; and the sale restrictions
          will immediately lapse if (a) a change in control of CustomTracks
          occurs or (b) the director is removed by vote of the shareholders
          other than for cause; and

     (3)  the Options may not be exercised after the tenth anniversary of the
          Date of Grant.

     The Committee may impose such conditions with respect to the exercise of
Options (that are consistent with the foregoing principles), including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable.

     (e)  No shares shall be delivered pursuant to any exercise of an Option
until cash payment in full of the option price therefor is received by the
Company. If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, any Option may be exercised by a
broker-dealer acting on behalf of an Optionee if (a) the broker-dealer has
received from the Optionee instructions signed by the Optionee requesting the
Company to deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Optionee and specifying the account into which
such shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and (c)
the broker-dealer and the Optionee have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor provision. The
Company shall have the right to deduct from all amounts paid to an Optionee in
cash (whether under the Plan or otherwise) any taxes the Company withholds in
respect of Options under the Plan.

     (f)  The Company shall not be required to issue any fractional shares upon
the exercise of any Options granted under the Plan. No Optionee or such
Optionee's legal representatives, legatees or distributees, as the case may be,
will be, or will be deemed to be, a holder of any shares subject to an Option
unless and until said Option has been exercised and the purchase price of the
shares in respect of which the Option has been exercised has been paid. Unless
otherwise provided in the agreement applicable thereto, an Option shall not be
exercisable except by the Optionee or by a person who has obtained the
Optionee's rights under the Option by will or under the laws of descent and
distribution or pursuant to a "qualified domestic relations order" as defined in
the Code, and no right or interest of any Optionee shall be subject to any lien,
obligation or liability of the Optionee.

Section 7.  Plan Amendments
            ---------------

     The Board may amend, abandon, suspend or terminate the Plan or any portion
thereof at any 

                                      A-3

<PAGE>
 
time in such respects as it may deem advisable in its sole discretion, provided
that no amendment shall be made without shareholder approval if such amendment
is material or if shareholder approval is necessary to comply with any tax or
regulatory requirement.

Section 8.  Restrictions on Issuance of Options and Option Shares
            -----------------------------------------------------

     The Company shall not be obligated to issue any shares upon the exercise of
any Option granted under the Plan unless: (1) the shares pertaining to such
Option have been registered under applicable securities laws or are exempt from
such registration; (2) if required, the prior approval of such sale or issuance
has been obtained from any state regulatory body having jurisdiction; and (3) in
the event the Common Stock has been listed on any exchange, the shares
pertaining to such Option have been duly listed on such exchange in accordance
with the procedure specified therefor. The Company shall be under no obligation
to effect or obtain any listing, registration, qualification, consent or
approval with respect to shares pertaining to any Option granted under the Plan.
If the shares to be issued upon the exercise of any Option granted under the
Plan are intended to be issued by the Company in reliance upon the exemptions
from the registration requirements of applicable federal and state securities
laws, the recipient of the Option, if so requested by the Company, shall furnish
to the Company such evidence and representations, including an opinion of
counsel satisfactory to it as the Company may reasonably request.

     The Company shall not be liable for damages due to a delay in the delivery
or issuance of any stock certificates for any reason whatsoever, including, but
not limited to, a delay caused by listing, registration or qualification of the
shares of Common Stock pertaining to any Option granted under the Plan upon any
securities exchange or under any federal or state law or the effecting or
obtaining of any consent or approval of any governmental body.

     The Committee may impose such other restrictions on the ownership and
transfer of shares issued pursuant to the Plan as it deems desirable; any such
restrictions shall be set forth in the agreement applicable thereto.

Section 9.  Adjustment to Shares
            --------------------

     In the event that the Committee shall determine that any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below Fair Market Value or other similar
corporate event affects the Common Stock such that an adjustment is required in
order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall adjust appropriately any or
all of (a) the number and kind of shares that thereafter may be optioned under
the Plan, (b) the number and kind of shares subject of Options and (c) the
exercise price with respect to any of the foregoing and/or, if deemed
appropriate, make provision for cash payment to an Optionee or a person who has
an outstanding Option; provided, however, that the number of shares subject to
                       --------  -------                                      
any Option shall always be a whole number.


Section 10. Effective Date; Term; Effect on 1996 Plan
            -----------------------------------------

     Subject to the approval of the shareholders of the Company, the Plan shall
be effective as of the Adoption Date. No Options may be granted under the Plan
after January 27, 2009; however, all previously granted Options that have not
expired under their original terms or will not then expire at the time the Plan
expires will remain outstanding. The Plan supersedes the Company's 1996
Directors' Stock Option Plan, effective upon the approval of the Plan by the
Company's shareholders.

                                      A-4

<PAGE>
 
Section 11. General Provisions
            ------------------

     (a)  Neither the Plan nor any Option granted hereunder is intended to
confer upon any Optionee any rights with respect to continuance of the
utilization of his or her services by the Company, nor to interfere in any way
with his or her right or that of the Company to terminate his or her services at
any time (subject to the terms of any applicable contract, law, regulation, and
the articles and bylaws of the Company).

     (b)  No Optionee or Designated Beneficiary shall have any rights as a
shareholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she has become the holder thereof.

     (c)  The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State of Texas
(without giving effect to its conflicts of laws rules) and, to the extent
applicable, federal law.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed on its
behalf as of the 28th day of January 1999.



                                             CUSTOMTRACKS CORPORATION


                                             By:________________________________

                                             Title:_____________________________

                                             Date:______________________________

                                      A-5

<PAGE>
 
                           CUSTOMTRACKS CORPORATION
                Board of Directors Proxy for the Annual Meeting
 Of Stockholders at 9:00 a.m. (registration at 8:30 a.m.), September 14, 1999


     The undersigned stockholder of CustomTracks Corporation ("CustomTracks")
hereby appoints David P. Cook and Steve M. York, or either of them, as proxies,
each with full power of substitution, to vote the shares of the undersigned at
the above-stated meeting and at any adjournment thereof:

     THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED ACCORDING TO YOUR DIRECTIONS MADE ON THE REVERSE SIDE. IF YOU DO NOT VOTE
ON A PARTICULAR ITEM (OTHER THAN ITEM (5), THIS PROXY WILL BE VOTED "FOR" THAT
ITEM. THE PROXY HOLDERS WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER
REFERRED TO IN ITEM (5). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS
EXERCISED.

                      (Please sign on the reverse side.)

<PAGE>
 
                         (Continued from reverse side)

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

     (1)  Election of Directors:

          FOR all nominees listed below                WITHHOLD AUTHORITY
          (Except as provided to the contrary below)   to vote for all nominees
                                                       below

     David P. Cook, Michael E. Keane, James S. Marston, Jack L. Martin, Antonio
     R. Sanchez, Jr., Dr. Ben G. Streetman and Mark A. Tebbe.

     INSTRUCTION: To withhold authority to vote for an individual nominee, write
that nominee's name on the following line.

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

     (2)  Change of CustomTracks' name to "ZixIt Corporation:"

          FOR            AGAINST              ABSTAIN

--------------------------------------------------------------------------------
 
     (3)  Increase number of authorized shares of common stock from 30 million
          to 175 million:
 
          FOR            AGAINST              ABSTAIN

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

     (4)  Adoption of the CustomTracks Corporation 1999 Directors' Stock Option
Plan:

          FOR            AGAINST              ABSTAIN

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

     (5)  On any other business that properly comes before the meeting or any
adjournment thereof.

          The undersigned revokes any proxies given prior to the date hereof.

     Receipt herewith of CustomTracks' 1998 Annual Report and Notice of Annual
Meeting and Proxy Statement, dated August 10, 1999, is hereby acknowledged.

               Dated: ____________________________________________, 1999

                      ____________________________________________

                      ____________________________________________

                      (Signature of Stockholder(s))

                      (Joint owners must EACH sign. Please sign EXACTLY as your
                      name(s) appear(s) on this card. When signing as attorney,
                      trustee, executor, administrator, guardian or corporate
                      officer, please give your FULL title.)

                       PLEASE SIGN, DATE AND MAIL TODAY.