<PAGE> 1
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 Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
TRANSACT TECHNOLOGIES INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
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<PAGE> 2
TRANSACT TECHNOLOGIES INCORPORATED
7 LASER LANE
WALLINGFORD, CONNECTICUT 06492
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 1997
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of TransAct Technologies Incorporated (the "Company"), a Delaware
corporation, will be held on May 1, 1997, at 10:00 am Eastern Daylight Savings
Time, at The New York Yacht Club, 37 West 44th Street, New York, New York 10036
for the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To consider and act upon a proposal to elect one Director to serve
until the Annual Meeting of Shareholders in the year 2000 or until his
successor has been duly elected and qualified;
(2) To consider and act upon a proposal to adopt an amendment to the
Company's Certificate of Incorporation and By-Laws which would eliminate
the ability of shareholders of the Company to act by written consent; and
(3) To receive the reports of Officers (without taking any action
thereon) and transact such other business as may legally come before the
Annual Meeting.
Shareholders of record at the close of business on March 7, 1997 are
entitled to notice of and to vote at the Annual Meeting. The transfer books will
not be closed for the Annual Meeting.
The Company's Proxy Statement, Form of Proxy and Annual Report for the
fiscal year ended December 31, 1996 are submitted herewith.
By Order of the Board of Directors,
RICHARD L. COTE
Secretary
Wallingford, Connecticut
April 4, 1997
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, THE COMPANY REQUESTS THAT YOU
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT
PURPOSE. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
<PAGE> 3
(This page is left blank intentionally)
<PAGE> 4
TRANSACT TECHNOLOGIES INCORPORATED
7 LASER LANE
WALLINGFORD, CONNECTICUT 06492
------------------------
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
------------------------
SOLICITATION AND REVOCATION OF PROXY
The following information concerning the enclosed proxy and matters to be
acted upon under the authority of such proxy is furnished to shareholders of
TransAct Technologies Incorporated (the "Company") in connection with the
solicitation by the Company of proxies to be voted at the Annual Meeting to be
held on May 1, 1997 (the "Annual Meeting").
Any shareholder who executes and returns the enclosed proxy has the power
to revoke the same anytime prior to it being voted.
The shares represented by the proxy will be voted unless the proxy is
mutilated or otherwise received in such form or at such time as to render it not
votable. The proxy is in ballot form so that a specification may be made to
grant or withhold authority to vote for the election of the Director and to
indicate separate approval or disapproval as to each of the other matters
presented to shareholders. All of the proposals will be presented by the Board
of Directors. The shares represented by the proxy will be voted for the election
of the Director named thereon, unless authority to do so is withheld. With
respect to each proposal presented to shareholders other than the election of a
Director, the shares represented by the proxy will be voted in accordance with
the specifications made. Where a choice is not so specified, the shares
represented by the proxy will be voted "FOR" the proposals. The Proxy Committee
consists of Messrs. Thomas R. Schwarz, Chairman, and Bart C. Shuldman, the
President and Chief Executive Officer of the Company. A majority of the shares
entitled to vote, present in person or represented by proxy, will constitute a
quorum to transact business at the Annual Meeting. A majority of the votes cast
is required for the approval of the proposals to be considered by the
shareholders at the Annual Meeting.
This Proxy Statement is being mailed to shareholders on or about April 4,
1997.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record on March 7, 1997 are entitled to cast one vote for
each share of common stock held by them on March 7, 1997. There were 6,722,500
shares of common stock issued and outstanding and entitled to vote at the close
of business on March 7, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial ownership
of the Company's common stock as of March 7, 1997 for each person who is known
by the Company to own beneficially more than five percent of the Company's
issued and outstanding common stock, and each person who is, or was, as of
December 31, 1996, a Director, a nominee for Director, or an individual named in
the Summary Compensation Table, and all Directors and Executive Officers of the
Company as a group.
The information under "After Distribution" sets forth the beneficial
ownership of the Company's common stock by the same persons after giving effect
to the proposed pro rata distribution on March 31, 1997 of the 5,400,000 shares
of the Company's common stock to Tridex's shareholders of record on March 14,
1997
<PAGE> 5
(the "Distribution"). The persons named in such table have furnished the
information set forth opposite their respective names:
<TABLE>
<CAPTION>
AS OF MARCH 7, 1997(1) AFTER DISTRIBUTION(2)
------------------------- -------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENT OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS(4) OWNERSHIP CLASS
- ----------------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
MANAGEMENT BENEFICIAL OWNERS
Thomas R. Schwarz(5)........................... 0 * 8,537 *
Charles A. Dill(6)............................. 850 * 5,175 *
Graham Y. Tanaka(7)............................ 0 * 91,023 1.4
Bart C. Shuldman(8)............................ 0 * 39,597 *
Richard L. Cote(9)............................. 0 * 28,146 *
Lucy H. Staley(10)............................. 0 * 21,607 *
John Cygielnik(11)............................. 0 * 7,839 *
Michael S. Kumpf(12)........................... 0 * 24,120 *
All Directors and Executive Officers as a group
(8 persons).................................. 850 * 226,044 3.4
OTHER BENEFICIAL OWNERS
Tridex Corporation(13)......................... 5,400,000 80.3 0 *
Seth M. Lukash(14)............................. 0 * 586,727 8.7
</TABLE>
- ---------------
(1) As of March 7, 1997, Tridex Corporation ("Tridex") owned 5,400,000, or
80.3%, of the outstanding shares of the Company's common stock.
(2) These columns reflect beneficial ownership by the Company's management and
beneficial owners of more than 5% of the Company's outstanding common stock
after giving effect to the Distribution.
(3) Except as otherwise indicated, each of the persons named in the table has
sole voting power and sole investment power with respect to the shares set
forth opposite his name.
(4) An asterisk denotes beneficial ownership of less than 1%.
(5) These amounts include 1,000 shares deemed to be beneficially owned by Mr.
Schwarz in his capacity as trustee of a trust for the benefit of his
granddaughter. This amount does not include (i) 5,000 shares of restricted
stock of the Company to be issued upon completion of the Distribution and
(ii) 10,000 shares subject to options not currently exercisable under the
1996 Non-Employee Directors Stock Plan (the "1996 Directors Plan"). Mr.
Schwarz's address is 60 Westcliff Road, Weston, Massachusetts 02193.
(6) These amounts do not include 10,000 shares subject to options not currently
exercisable under the 1996 Directors Plan. These amounts include 2,800
shares deemed beneficially owned by Mr. Dill and held by his parents. Mr.
Dill's address is care of Gateway Associates, 8000 Maryland Avenue, Suite
1190, St. Louis, Missouri 63105.
(7) These amounts do not include 10,000 shares subject to options not currently
exercisable under the 1996 Directors Plan.
(8) These amounts do not include (i) 13,200 shares of restricted stock of the
Company to be issued upon the completion of the Distribution and not
currently vested and (ii) 52,800 shares subject to options not currently
exercisable under the 1996 Stock Plan. Mr. Shuldman's address is care of
TransAct Technologies Incorporated, 7 Laser Lane, Wallingford, Connecticut
06492.
(9) These amounts do not include (i) 6,600 shares of restricted stock of the
Company to be issued upon the Distribution and not currently vested and
(ii) 33,000 shares subject to options not currently exercisable under the
1996 Stock Plan. Mr. Cote's address is care of TransAct Technologies
Incorporated, 7 Laser Lane, Wallingford, Connecticut 06492.
(10) These amounts do not include (i) 20,000 shares subject to options not
currently exercisable under the 1996 Stock Plan and (ii) 5,000 shares of
restricted stock of the Company to be issued upon the
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completion of the Distribution and not currently vested. Ms. Staley's
address is care of Ithaca Peripherals, a division of Magnetec Corporation,
20 Bomax Drive, Ithaca, New York 14850.
(11) These amounts do not (i) 20,000 shares subject to options not currently
exercisable under the 1996 Stock Plan and (ii) 5,000 shares of restricted
stock of the Company to be issued upon the completion of the Distribution
and not currently vested. Mr. Cygielnik's address is care of Magnetec
Corporation, 7 Laser Lane, Wallingford, Connecticut 06492.
(12) These amounts do not include (i) 20,000 shares subject to options not
currently exercisable under the 1996 Stock Plan and (ii) 5,000 shares of
restricted stock of the Company to be issued upon the completion of the
Distribution and not currently vested. Mr. Kumpf's address is care of
Ithaca Peripherals, a division of Magnetec Corporation, 20 Bomax Drive,
Ithaca, New York 14850.
(13) Tridex Corporation is located at 61 Wilton Road, Westport, Connecticut
06880.
(14) These amounts include 56,303 shares deemed to be beneficially owned by Mr.
Lukash. Mr. Lukash's address is care of Tridex Corporation, 61 Wilton Road,
Westport, Connecticut 06880.
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers and persons who beneficially own more than 10%
of a registered class of the Company's equity securities ("10% Owners") to file
with the Securities and Exchange Commission ("SEC") and the NASDAQ National
Market reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Directors, Executive Officers and
10% Owners are required by SEC regulation to furnish the Company with copies of
all Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, or written representations that no other
reports were required for those persons, the Company believes that, during the
fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to Directors, Executive Officers and 10% Owners were complied with
except for a Form 3 which was filed approximately three days late by Charles A.
Dill, a Non-Employee Director.
ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders, one person is to be elected to hold
office as a Director until the Annual Meeting of Shareholders to be held in the
year 2000 or until his successor is duly elected and qualified. In the absence
of instructions to the contrary, the persons named in the enclosed form of proxy
as members of the Proxy Committee will vote such proxy "FOR" the election of the
nominee named below. Should the nominee become unavailable, which is not
anticipated, it is intended that proxies will be voted for the election of such
other person as the Board of Directors may recommend in place of such nominee.
INFORMATION CONCERNING NOMINEE FOR ELECTION AS DIRECTOR
CHARLES A. DILL, 57, has been a Director of the Company since its formation
in June 1996. Mr. Dill is a General Partner of Gateway Associates, a venture
capital firm. Mr. Dill has served as Acting Chief Executive Officer and a
Director of Saleskit Software Inc. since 1995. From 1991 to 1995, Mr. Dill
served as President, Chief Executive Officer and a Director of Bridge
Information Systems, Inc. and from 1988 to 1990 he was President, Chief
Operating Officer and a Director of AVX Corporation. Mr. Dill currently serves
as a Director of Zoltek Companies, Stifel Financial Corp. and Pinnacle
Automation (Alvey Systems). Prior to 1988, Mr. Dill was Senior Vice President
and a member of the Office of the Chief Executive of Emerson Electric Company.
VOTES REQUIRED
The election of Charles A. Dill as a Director of the Company requires the
affirmative vote of the holders of a majority of the Company's issued and
outstanding shares of common stock.
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Tridex, the principal stockholder of the Company, is expected to vote its
80.3% of the Company's outstanding shares for the election of Mr. Dill.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" ELECTION OF
MR. DILL AS A DIRECTOR OF THE COMPANY.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CORPORATE SERVICES AGREEMENT
The Company and Tridex entered into a Corporate Services Agreement (the
"Services Agreement"), under which Tridex and its subsidiaries (other than the
Company) have provided and will continue to provide certain services, including
certain employee benefit administration, human resource and related services,
administrative services, risk management, regulatory compliance, preparation of
tax returns, and certain financial and other services to the Company. The
Services Agreement provides for a transition by the Company to independent
corporate administrative and financial staffing. During the term of the Services
Agreement, it is expected that the Company will complete its own corporate
staffing to the extent necessary. Designated Tridex employees have been and will
continue to be made available for stated percentages of their working time to
the Company through different dates, ending on December 31, 1997. Until March
31, 1997, the Company made available to Tridex the services of Richard L. Cote,
the former Senior Vice President and Chief Financial Officer of Tridex, who now
serves the Company as Executive Vice President, Chief Financial Officer and a
Director. The Company paid Tridex approximately $91,000 during the year ended
December 31, 1996 for the services of the designated Tridex employees and
provided reimbursement for accounting, insurance and legal expenses. The Company
anticipates that it will pay approximately $60,000 during 1997 for the services
of the designated Tridex employees, net of Tridex's payments to the Company.
Additional amounts may be paid by the Company to reimburse Tridex for specific
services requested by the Company. Upon the mutual agreement of Tridex and the
Company, services may continue to be provided after the dates provided in the
Services Agreement.
TAX SHARING AGREEMENT
The Company and Tridex entered into a Tax Sharing Agreement (the "Tax
Agreement") which provides for the terms under which the Company is to be
included in Tridex's consolidated federal income tax return. The Tax Agreement
is effective for the period from the Initial Public Offering until the
completion of the Distribution (or such time as the Company otherwise ceases to
be eligible to be included in the consolidated return of Tridex). During this
period, for financial accounting purposes, the Company has computed for 1996 and
will compute for the applicable portion of 1997 its income tax expense or
benefit as if it filed separate returns using those elements of income and
expense as reported in the Company's financial statements. To the extent that
the Company incurred losses or realized tax credits during 1996, Tridex paid to
the Company the amount of any tax reduction Tridex realized by utilizing those
losses or credits in its consolidated income tax return. In addition, at the
time of utilization of any existing tax attributes, the Company paid to Tridex
the tax benefit obtained by utilizing such tax attributes. Any tax deficiencies
or refunds resulting from amending prior year tax returns or examinations by the
taxing authorities were the responsibility of or inured to the benefit of the
Company to the extent they related to the Company or its predecessor entities.
For the year ended December 31, 1996, the Company paid to Tridex $527,000 under
the Tax Agreement.
PRINTER SUPPLY AGREEMENT
The Printer Supply Agreement (the "Printer Agreement"), which has an
initial term expiring on December 31, 1999, provides for the Company to sell to
Ultimate Technology Corporation ("Ultimate"), a subsidiary of Tridex, and for
Ultimate to purchase from the Company, POS printers at discounts from list
prices comparable to discounts historically offered to Ultimate as a subsidiary
under common ownership with the Company. In consideration for these favorable
price terms, the Printer Agreement requires Ultimate to purchase from the
Company at least three quarters of its total POS printer requirements. The
Company may,
4
<PAGE> 8
in its discretion, increase its list prices from time to time, and the prices
offered to Ultimate will reflect the discount rate applied to such increased
list prices. During the year ended December 31, 1996, Ultimate purchased from
the Company $3,178,000 of POS printers.
AGREEMENT REGARDING TRIDEX RIBBON DIVISION
Tridex and Magnetec Corporation, a subsidiary of the Company ("Magnetec"),
entered into an agreement regarding the transfer by Magnetec to Tridex of
substantially all of the assets used in connection with a line of business
involving the manufacture, marketing and sale of ribbon for use in certain
printers manufactured by the Company (the "Ribbon Business"). Under the
agreement, Tridex became the owner of the Ribbon Business and employs the
manufacturing and supervisory personnel required to conduct such business, and
the Company provides Tridex with space within its Wallingford, Connecticut
manufacturing facility and certain support services. In connection with the
transfer of assets, which took place on September 28, 1996, Tridex cancelled
intercompany indebtedness of the Company to Tridex in an amount equal to the
book value of the Ribbon Business on the date of the transfer, approximately
$197,000. As a monthly fee for the space and support services provided to Tridex
for the Ribbon Business, Tridex pays the Company an amount equal to the direct
and indirect costs incurred by the Company to provide the space and render such
services, plus certain related costs. For the year ended December 31, 1996,
Tridex paid $67,000 to the Company for the provision of such space and services.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended December 31, 1996, the Board of Directors held 4
meetings. The incumbent Director attended all of the meetings of the Board of
Directors.
The Board of Directors has an Audit Committee, which held one meeting
during the year ended December 31, 1996. The Audit Committee is comprised of
Messrs. Thomas R. Schwarz, Graham Y. Tanaka and Charles A. Dill, with Mr. Dill
serving as Chairman. The functions of the Audit Committee are to recommend the
firm to be appointed as independent accountants to audit the Company's financial
statements and to perform services related to the audit, review the scope and
results of the audit with the independent accountants, review with management
and the independent accountants the Company's year-end operating results,
consider the adequacy of the Company's internal accounting and control
procedures, review the non-audit services to be performed by the independent
accountants and consider the effect of such performance on the accountants'
independence as well as such other matters relating to the Company's financial
and accounting practices as such Committee deems appropriate.
The Board of Directors has a Compensation Committee comprised of Messrs.
Thomas R. Schwarz, Graham Y. Tanaka and Charles A. Dill, with Mr. Schwarz
serving as Chairman. The Compensation Committee has the responsibility for
reviewing and recommending the compensation arrangements for all directors and
officers of the Company, approving such arrangements for other senior level
employees and administering and taking such other action as may be required in
connection with certain compensation plans of the Company. The Compensation
Committee held two meetings during the year.
The Board of Directors has a Nominating Committee which consists of the
full Board with Mr. Tanaka as Chairman. The Nominating Committee has the
responsibility for recommending to the Board of Directors nominees for election
to the Board. The Nominating Committee will consider nominees recommended by
shareholders in accordance with proper nomination procedures specified in the
Company's By-laws, which provide for timely prior written notice to the
Secretary of the Company in proper form of a planned nomination for the Board of
Directors. All nominations by shareholders must be delivered to or mailed and
received at the principal executive offices of the Company not less than 30 nor
more than 60 days prior to the meeting at which election of Directions will take
place. The notice must set forth in writing (i) for each person proposed to be
nominated, all information relating to each such person that is required to be
disclosed in solicitations of proxies for election of directors pursuant to
Regulation 14A under the Exchange Act, including such person's written consent
to bring named in the proxy and to serving as a director; (ii) for the
shareholder giving notice, the (x) name and address of such shareholder as they
appear on the Company's books and
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(y) the class and number of shares of the Company beneficially owned by such
shareholder. The Nominating Committee did not hold a meeting during the year
ended December 31, 1996.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the four most highly compensated Executive Officers.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
--------------------------------- ------------
FISCAL STOCK ALL OTHER
YEAR SALARY BONUS(2) OPTIONS(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION ENDED ($) ($) (#) ($)
- ------------------------------- --------- ------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Bart C. Shuldman............... 12/31/96 $64,038 $70,000 52,800 $ 4,075
President and Chief Executive
Officer
Richard L. Cote................ 12/31/96 $51,923 $35,000 33,000 $ 3,583
Executive Vice President and
Chief Financial Officer
Lucy H. Staley................. 12/31/96 $41,123 $29,700 20,000 $ 3,186
Senior Vice
President -- General Manager
(Ithaca, New York facility)
John Cygielnik................. 12/31/96 $36,014 $ 3,329 20,000 $ 2,502
Senior Vice
President -- General Manager
(Wallingford, Connecticut
facility)
Michael S. Kumpf............... 12/31/96 $42,231 $30,500 20,000 $ 3,303
Senior Vice President --
Engineering
</TABLE>
- ---------------
(1) These amounts reflect compensation paid to Mr. Shuldman, Mr. Cote, Ms.
Staley, Mr. Cygielnik and Mr. Kumpf by the Company for the period from
August 22, 1996, the date of the Company's initial public offering, through
December 31, 1996, and therefore are not indicative of each executive
officer's annual base salary, bonuses and other compensation. See
"Employment Contracts, Termination of Employment and Change-In Control
Arrangements." Neither the Chief Executive Officer nor any of the other
Executive Officers named in the table received perquisites or other personal
benefits in an amount which exceeded 10% of their salary plus bonus during
the fiscal year.
(2) The bonus amounts attributable to Ms. Staley and Messrs. Cygielnik and
Kumpf are payable pursuant to the Company's Executive Incentive Compensation
Plan. The bonus amounts attributable to Messrs. Shuldman and Cote are
payable at the discretion of the Compensation Committee of the Board of
Directors and not pursuant to the Company's Executive Incentive Compensation
Plan.
(3) All options were granted under the Company's 1996 Stock Plan and are not
currently exercisable.
(4) For all the Executive Officers named in the table these amounts consist of
Company contributions under the Company's 401(k) Plan and other benefits
such as life insurance and a car allowance.
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OPTION GRANTS IN THE 1996 FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATE OF
- ----------------------------------------------------------------------------------------- STOCK
PERCENT OF TOTAL PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN THE BASE PRICE EXPIRATION -------------------
NAME GRANTED (#)(2) FISCAL YEAR ($/SHARE) DATE 5% 10%
- -------------------------- -------------- ------------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Bart C. Shuldman.......... 52,800 17.0% $8.50 7/30/07 $282,480 $715,440
Richard L. Cote........... 33,000 10.6% $8.50 7/30/07 $176,550 $447,150
Lucy H. Staley............ 20,000 6.4% $8.50 7/30/07 $107,000 $271,000
John Cygielnik............ 20,000 6.4% $8.50 7/30/07 $107,000 $271,000
Michael S. Kumpf.......... 20,000 6.4% $8.50 7/30/07 $107,000 $271,000
</TABLE>
- ---------------
(1) The potential realizable value portion of the foregoing table illustrates
the value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compared rates
of appreciation on the Company's common stock shares over the term of the
options. This hypothetical value is based entirely on assumed annual growth
rates of 5% and 10% in the value of the Company's stock price over the term
of the options granted in 1996. The assumed rates of growth were selected by
the Securities and Exchange Commission for illustration purposes only, and
are not intended to predict future stock prices, which will depend upon
market conditions and the Company's future performance and prospects. These
numbers do not take into account provisions of certain options providing for
termination of the option following termination of employment,
non-transferability or vesting over various periods.
(2) All options were granted under the Company's 1996 Stock Plan. In general,
options granted under the 1996 Plan are at an exercise price equal to 100%
of the fair market value of the common stock on the date of grant, expire
ten years from the date of grant, and become exercisable at a rate of 20%
per year on the first through fifth anniversaries of the date of grant. In
the event of a change-in-control, stock options awarded under the 1996 Stock
Plan not previously exercisable and vested shall become fully exercisable
and vested.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Under the terms of an Employment Agreement dated July 31, 1996 between Bart
C. Shuldman and the Company, Mr. Shuldman serves as President and Chief
Executive Officer at the pleasure of the Board of Directors. Under the terms of
this agreement, Mr. Shuldman's annual base salary was $185,000 for the fiscal
year ended December 31, 1996. Effective January 1, 1997, the Compensation
Committee of the Board of Directors voted to increase his annual base salary to
$210,000. If Mr. Shuldman's employment is terminated other than for cause, Mr.
Shuldman shall be entitled to continue to receive (i) his annual base salary and
all other benefits for a period of two (2) years from the date of termination
and (ii) his annual target bonus amount for the year of termination for a period
of one year from the date of termination. If Mr. Shuldman's employment is
terminated, other than for cause, within one year of a change in control of the
Company, for a period of three years from the date of termination, Mr. Shuldman
shall be entitled to receive (i) his annual base salary and all benefits and
(ii) his annual target bonus amount. In addition, the Company shall cause the
immediate vesting of all options and other rights granted to Mr. Shuldman under
the Company's stock plan.
Under the terms of an Employment Agreement dated July 31, 1996 between
Richard L. Cote and the Company, if Mr. Cote's employment is terminated other
than for cause, Mr. Cote shall be entitled to continue to receive his annual
base salary, bonus and all benefits for one year from the date of termination.
If Mr. Cote's employment is terminated other than for cause within one year of a
change in control, Mr. Cote shall be entitled to continue to receive his annual
base salary, bonus and all benefits for a period of two years from the date of
termination. Under the terms of this agreement, Mr. Cote's base salary for the
fiscal year
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ended December 31, 1996 was $150,000. Effective January 1, 1997, the
Compensation Committee of the Board of Directors voted to increase Mr. Cote's
annual base salary to $160,000.
Under the terms of Severance Agreements between the Company and each of
Lucy H. Staley, John Cygielnik and Michael S. Kumpf, dated September 4, 1996,
September 10, 1996 and September 4, 1996, respectively, if any of Ms. Staley's,
Mr. Cygielnik's or Mr. Kumpf's employment is terminated, other than for cause,
such executives shall be entitled to receive, for six months following the date
of termination, the salary and benefits which would otherwise have been payable
to each of them. In addition, each of Ms. Staley, Mr. Cygielnik and Mr. Kumpf
shall be entitled to acceleration of vesting of all stock options and
continuation of certain benefits for one year following a change in control of
the Company.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1996, each outside Director of the
Company received as compensation for services rendered and expenses incurred (a)
$2,000 for each fiscal quarter served as Director, (b) $750 for each Board of
Directors' meeting attended and (c) $300 for each Board of Directors' Committee
meeting attended. Directors receive $250 for each telephonic meeting, and
Chairmen of Committees receive $600 for each committee meeting. The Chairman
also received as compensation (a) $7,500 for each fiscal quarter served as
Chairman and (b) a grant of 5,000 restricted shares, effective April 1, 1997.
8
<PAGE> 12
CORPORATE PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return on
the Company's common stock from August 22, 1996, the effective date of the
Initial Public Offering, through December 31, 1996, with the CRSP Total Return
Index for the NASDAQ Stock Market (US) and the NASDAQ Computer Manufacturer
Stocks. The graph assumes that $100 was invested on August 22, 1996 in each of
the Company's common stock, the CRSP Total Return Index for the NASDAQ Stock
Market (US) and the NASDAQ Computer Manufacturer Stocks and that all dividends
were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
TRANSACT TECHNOLOGIES INCORPORATED COMMON STOCK,
THE CRSP TOTAL RETURN INDEX FOR THE NASDAQ STOCK MARKET (US),
AND THE NASDAQ COMPUTER MANUFACTURER STOCK
<TABLE>
<CAPTION>
TRANSACT CRSP TOTAL RETURN
TECHNOLOGIES INDEX FOR THE NASDAQ COMPUTER
MEASUREMENT PERIOD INCORPORATED NASDAQ STOCK MANUFACTURERS'
(FISCAL YEAR COVERED) COMMON STOCK MARKET (US) STOCK
<S> <C> <C> <C>
8/22/96 100 100 100
12/31/96 122.06 112.69 117.96
</TABLE>
AMENDMENT OF CERTIFICATE OF INCORPORATION
DESCRIPTION OF AMENDMENT
The Board of Directors has voted, subject to shareholder approval, to amend
the Certificate of Incorporation of the Company to eliminate the ability of
shareholders to act by written consent in lieu of a meeting. Specifically, the
Company's Certificate of Incorporation is proposed to be amended to add a
section stating that shareholders may take action only by a vote taken at a
meeting held pursuant to prior notice and that shareholders may not act by
written consent in lieu of a meeting. If the proposal to amend the Company's
9
<PAGE> 13
Certificate of Incorporation is adopted, the Board of Directors of the Company
also intends to adopt a corresponding amendment to the Company's By-laws by
deleting Section 2.10, which provides for shareholder action by written consent.
REASONS FOR AND EFFECT OF AMENDMENT
Before the Initial Public Offering, when Tridex owned all of the Company's
outstanding common stock, it was convenient for administrative purposes for
Tridex to have the ability to take shareholder action by written consent and
without the necessity of a formal meeting. After the Initial Public Offering and
before the Distribution, when Tridex still owned approximately 80.3% of the
Company's outstanding common stock, and the timing of the Distribution was
uncertain, it remained administratively convenient for Tridex and the Company to
allow Tridex to take action by written consent until the Company ceased to be
its consolidated subsidiary. At and after the Distribution, it will no longer be
necessary or convenient for the Company's shareholders to have the ability to
take action by written consent and without the necessity of a formal meeting.
One of the overall effects of the proposed amendment to the Company's
Certificate of Incorporation will be to render more difficult the completion of
a merger, tender offer, proxy contest, other business combination or the
assumption of control by a principal stockholder which has not been approved by
the Board of Directors, thereby making more difficult the removal of the
Company's management. Another effect of the amendment is that the Company's
shareholders will be able to take action and transact business with respect to
the Company only at a meeting duly held upon prior notice and upon a vote of the
holders of a majority of the issued and outstanding shares of Common Stock of
the Company. Shareholders will no longer have the ability to transact business
or take action by a consent in writing signed by the holders of at least a
majority of the issued and outstanding shares of the Company, without a meeting,
without prior written notice and without an in person vote.
The Company's Certificate of Incorporation currently contains several
provisions which have the effect of making more difficult the acquisition of
control of the Company by means of a tender offer, proxy contest or otherwise.
The By-laws also contain similar anti-takeover provisions. Specifically, the
Certificate of Incorporation and By-laws provide for: (i) a classified Board of
Directors, dividing the directors into classes each serving three-year terms;
(ii) the ability of the Board of Directors to authorize and issue additional
common stock; and (iii) governance by Section 203 of the Delaware General
Corporation Law, which prevents persons owning 15% or more of the Company's
outstanding Common Stock from engaging in a business combination unless certain
conditions are met. These provisions have the effect of making it more difficult
to remove directors and may discourage third parties from attempting to take
control of the Company through a tender offer or proxy solicitation.
There is no right under the Company's Certificate of Incorporation or under
the Delaware General Corporation Law to dissent to an amendment of the Company's
Certificate of Incorporation.
VOTES REQUIRED
The adoption of the amendment to the Company's Certificate of Incorporation
requires approval by the Board of Directors of the Company and the affirmative
vote of the holders of a majority of the Company's issued and outstanding
shares. The Board of Directors has approved the amendment, subject to
shareholder approval. If the proposal to amend the Company's Certificate of
Incorporation is approved by the shareholders, the Board of Directors of the
Company will amend the Company's By-laws to remove the relevant provision.
Tridex, the principal stockholder of the Company, has indicated that it
will vote its 80.3% of the Company's outstanding shares for adoption of an
amendment to the Company's Certificate of Incorporation to eliminate the ability
of shareholders to take action by written consent in lieu of a formal meeting.
10
<PAGE> 14
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" ADOPTION OF
THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
SECURITY HOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholder proposals for inclusion in the 1998 Proxy Statement and form of
proxy for the Annual Meeting of Shareholders to be held in 1998 must be received
by the Secretary of the Company on or before December 31, 1997. If the date of
the next Annual Meeting is subsequently advanced by more than thirty calendar
days or delayed by more than ninety calendar days from the date such meeting is
scheduled to be held under the Company's By-laws, the Company will inform
shareholders of such change and the date by which proposals of shareholders must
be received. It is suggested that such proposals be sent by Certified
Mail-Return Receipt Requested.
ANNUAL REPORT
A COPY OF THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, WILL BE
FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST. REQUESTS
SHOULD BE ADDRESSED TO: TRANSACT TECHNOLOGIES INCORPORATED, SHAREHOLDER
RELATIONS DEPARTMENT, 7 LASER LANE, WALLINGFORD, CONNECTICUT 06492.
GENERAL
The accompanying proxy will be voted as specified thereon. Unless otherwise
specified, proxies will be voted for the Director nominated by the Board of
Directors and for the proposed amendment to the Company's Certificate of
Incorporation as set forth in this Proxy Statement, and for each of the other
matters to be presented to the shareholders at the Annual Meeting as set forth
in this Proxy Statement. A majority of the votes cast is required for the
approval of the proposals to be considered by the shareholders at the Annual
Meeting. Abstentions are treated as present and entitled to vote and therefore
have the effect of a vote against a matter. A broker non-vote on a matter is
considered not entitled to vote on the matter and is not counted in determining
whether a matter requiring approval of a majority of the shares present and
entitled to vote has been approved.
The Board of Directors is not aware of any matter which is to be presented
for action at the Annual Meeting other than the matters set forth herein. Should
any other matter requiring a vote of the shareholders arise, the proxies confer
upon the Proxy Committee the authority to vote in respect of any such other
matter in accordance with the recommendation of management.
A shareholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting or prior to the receipt by the Company of proxies
voting in favor of election of Charles A. Dill as a Director of the Company and
adoption of the Amendment to the Certificate of Incorporation of the Company, by
(i) giving written notice of revocation to the Secretary of the Company, (ii)
properly submitting to the Company a duly executed proxy bearing a later date,
or (iii) voting in person at the Annual Meeting. All written notices of
revocation and other communications with respect to revocation of proxies should
be addressed to the Company, as follows: TransAct Technologies Incorporated, 7
Laser Lane, Wallingford, Connecticut 06492, Attention: Corporate Secretary. A
proxy appointment will not be revoked by death or supervening incapacity of the
shareholder executing the proxy unless, before the shares are voted, notice of
such death or incapacity is filed with the Company's Corporate Secretary or
other person responsible for tabulating votes on behalf of the Company.
11
<PAGE> 15
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company, without
additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies. The Company will also request persons, firms and
corporations holding shares in their names, or owned by others, to send this
proxy material to and obtain proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in doing so.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
April 4, 1997
12
<PAGE> 16
TRANSACT TECHNOLOGIES INCORPORATED
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD, THURSDAY, MAY 1, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TRANSACT
TECHNOLOGIES INCORPORATED. The undersigned shareholder of TransAct Technologies
Incorporated (the "Company"), does hereby nominate, constitute and appoint
Thomas R. Schwarz and Bart C. Shuldman, or either of them, with full power to
act alone, my true and lawful attorney with full power of substitution, for me
and in my name, place and stead to vote all of the shares of Common Stock of the
Company standing in my name on its books on March 7, 1997, at the Annual Meeting
of its shareholders to be held at The New York Yacht Club, 37 West 44th Street,
New York, New York 10036 on Thursday, May 1, 1997 at 10:00 a.m., or at any
adjournment thereof, with all powers the undersigned would possess if personally
present as follows:
[X] Please mark your votes as in this example.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTOR:
NOMINEE: Charles A. Dill [ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ADOPTION OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
A proposal to adopt an amendment to the Company's Certificate of
Incorporation to eliminate the ability of shareholders to act by
written consent.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
__________________________________________________________________________
| |
| 3. In their discretion, the Proxies, or either of them, are authorized |
| to vote upon such other business as may properly come before the |
| meeting. |
|__________________________________________________________________________|
(To be signed on Reverse Side)
<PAGE> 17
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED ON BEHALF OF THE
UNDERSIGNED AS DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE NAME, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS ON THE MAILING LABEL. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF SIGNING
ON BEHALF OF A CORPORATION, PLEASE SIGN THE FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF SIGNING ON BEHALF OF A PARTNERSHIP, PLEASE SIGN THE
PARTNERSHIP NAME BY AUTHORIZED PERSON.
------------------------------------
SIGNATURES
DATE:
----------------------------------
------------------------------------
SIGNATURE IF HELD JOINTLY
DATE:
----------------------------------
PLEASE MARK, SIGN, DATE AND PROMPTLY
RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.
