<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BancTec, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BancTec, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:*
(4) Proposed maximum aggregate value of transaction:
- - --------
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] 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>
[LOGO OF BANCTEC, INC. APPEARS HERE]
4435 SPRING VALLEY ROAD
DALLAS, TEXAS 75244
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 18, 1994
Notice is hereby given that the Annual Meeting of Stockholders of BancTec,
Inc., a Delaware corporation (the "Company"), will be held at The Doubletree
Hotel at Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas on August 18, 1994, at
10:00 a.m., Dallas, Texas time for the following purposes:
(i) To elect three directors;
(ii) To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
The accompanying Proxy Statement contains information regarding, and a more
complete description of, the items of business to be considered at the meeting.
Only stockholders of record at the close of business on July 6, 1994, are
entitled to notice of, and to vote at, the Annual Meeting of Stockholders or
any adjournment(s) thereof.
You are cordially invited and urged to attend the meeting, but if you are
unable to attend, you are requested to sign and date the accompanying proxy and
return it promptly in the enclosed self-addressed envelope. If you attend the
meeting, you may vote in person, if you wish, whether or not you have returned
your proxy. In any event, a proxy may be revoked at any time before it is
exercised.
By Order of the Board of Directors
Tod V. Mongan
Secretary
Dallas, Texas
July 13, 1994
<PAGE>
[LOGO OF BANCTEC, INC. APPEARS HERE]
4435 SPRING VALLEY ROAD
DALLAS, TEXAS 75244
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 18, 1994
This Proxy Statement is sent to stockholders of BancTec, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company (the "Board") for use at the Annual
Meeting of Stockholders of the Company, and any adjournment(s) thereof (the
"Meeting"), to be held on August 18, 1994, at 10:00 a.m., Dallas, Texas time at
The Doubletree Hotel at Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas for the
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. Solicitation of proxies may be made in person or by mail,
telephone, or telegraph by directors, officers, and regular employees of the
Company. The Company has also retained Beacon Hill Partners, Inc. to solicit
stockholders in connection with the matters to be presented at the Meeting for
a fee not to exceed $3,500 plus reimbursement of certain expenses. The Company
may also request banking institutions, brokerage firms, custodians, nominees,
and fiduciaries to forward solicitation materials to the beneficial owners of
Common Stock of the Company held of record by such persons, and the Company
will reimburse the forwarding expenses. The cost of solicitation of proxies
will be paid by the Company. This Proxy Statement was first mailed to
stockholders on or about July 13, 1994.
The Annual Report to Stockholders covering the Company's fiscal year ended
March 27, 1994 ("Fiscal 1994"), including audited financial statements, is
enclosed herewith. Such Annual Report to Stockholders does not form any part of
the material for the solicitation of proxies.
Any stockholder returning the accompanying proxy may revoke such proxy at any
time prior to its exercise: (i) by giving written notice to the Company of such
revocation; (ii) by voting in person at the Meeting; or (iii) by executing and
delivering to the Company a later dated proxy.
The voting securities of the Company are shares of its Common Stock, $.01 par
value ("Common Stock"), each share of which entitles the holder thereof to one
vote. On July 6, 1994, there were outstanding and entitled to vote 10,624,122
shares of Common Stock. Only stockholders of record at the close of business on
July 6, 1994, are entitled to notice of, and to vote at, the Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute
a quorum at the Meeting. If a quorum is not present or
<PAGE>
represented at the Meeting, the stockholders entitled to vote thereat, present
in person or represented by proxy, have the power to adjourn the Meeting from
time to time, without notice other than an announcement at the Meeting, until a
quorum is present or represented. At any such adjourned Meeting at which a
quorum is present or represented, any business may be transacted that might
have been transacted at the original Meeting. Abstentions and broker non-votes
are each included in the determination of the number of shares present for
purposes of a quorum, but will not be counted as votes in favor of a proposal.
Cumulative voting is not permitted in the election of directors of the
Company. On all matters (including election of directors) submitted to a vote
of the stockholders at the Meeting, each stockholder will be entitled to one
vote for each share of Common Stock owned of record by such stockholder at the
close of business on July 6, 1994.
Proxies in the accompanying form, if properly executed and returned, will be
voted at the Meeting in accordance with the instructions thereon. Any proxy
upon which no instructions have been indicated with respect to any of the
following matters will be voted as follows: (i) "FOR" the election of the three
persons named in this Proxy Statement as the Board's nominees for election to
the Board; and (ii) in accordance with the discretion of the holders of such
proxies with respect to any other business that properly comes before the
stockholders at the Meeting. The Board knows of no matters, other than those
stated above, to be presented for consideration at the Meeting. If, however,
other matters properly come before the Meeting, it is the intention of the
persons named in the accompanying proxy to vote such proxy in accordance with
their judgment on any such matters. The persons named in the accompanying proxy
may also, if it is deemed to be advisable, vote such proxy to adjourn the
Meeting from time to time.
ELECTION OF DIRECTORS
The directors of the Company have been divided into three classes. The
members of each class serve for three years. Pursuant to the Company's bylaws,
the Board has fixed the number of directors at eight. Three of the eight
directors' terms expire this year. The term of office for each director shall
be until the year following each nominee's name below or until a successor is
elected and qualified. Directors are elected by a plurality of the votes of
shares of Common Stock present in person or by proxy and entitled to vote at
the Meeting.
The Board recommends a vote FOR the election of the following nominees to be
elected for a term expiring in 1997:
<TABLE>
<CAPTION>
NAME AGE POSITION
------------------------------------ --- ----------------------------
<S> <C> <C>
Michael E. Faherty....................... 59 Director
Paul J. Ferri............................ 55 Director
Merle J. Volding......................... 70 Director
The following directors are presently serving unexpired terms, ending the
year following such director's name:
<CAPTION>
NAME AGE POSITION
------------------------------------ --- ----------------------------
<S> <C> <C>
Grahame N. Clark, Jr. (1996)............. 51 Chairman and Chief Executive
Officer and Director
Rawles Fulgham (1995).................... 66 Director
Thomas G. Kamp (1995).................... 69 Director
Michael A. Stone (1996).................. 57 Director
Norton A. Stuart, Jr. (1995)............. 59 President and Director
</TABLE>
2
<PAGE>
Mr. Faherty has been a director of the Company since September 1984. Since
1977, Mr. Faherty has been president of MICO, Inc., a family-owned consulting
and contract executive business. Mr. Faherty also serves as a director of Davox
Corporation (a manufacturer of computer-aided communication systems),
Biomagnetic Technologies Inc. (a manufacturer of magnetic imaging equipment),
and ALC Communications (a provider of long distance telecommunication
services).
Mr. Ferri has been a director of the Company since September 1978. Mr. Ferri
has been managing general partner in Matrix Partners III, L.P. and Matrix
Partners II, L.P. (venture capital investment partnerships) and Matrix Partners
(a liquidating trust) since March 1990, August 1985, and January 1982,
respectively. In addition, Mr. Ferri is a director of Stratus Computer, Inc. (a
manufacturer of fault tolerant computer systems) and Xyplex, Inc. (a
manufacturer of data communication, multi-protocol servers).
Mr. Volding has been a director of the Company since December 1971. From
April 1987 to April 1989, Mr. Volding was Chairman of the Executive Committee
of the Company. From October 1985 to April 1987, Mr. Volding was Chairman of
the Board of the Company. Mr. Volding served as President and Chief Executive
Officer of the Company from March 1974 to October 1985. Mr. Volding also serves
as a director of Computer Language Research, Inc. (a developer of proprietary
software systems).
Mr. Clark has been a director of the Company since September 1985. Mr. Clark
has been Chairman and Chief Executive Officer of the Company since April 1987.
Mr. Clark also serves as a director of El Chico Restaurants, Inc. (owner and
franchiser of El Chico and other Tex-Mex style Mexican restaurants).
Mr. Fulgham has been a director of the Company since June 1982. Since
September 1989, Mr. Fulgham has served as senior advisor of Merrill Lynch &
Co., Inc. From August 1982 to September 1989, Mr. Fulgham was executive
director of Merrill Lynch Private Capital Inc. In addition, Mr. Fulgham
presently serves as a director of Dresser Industries, Inc. (a supplier to
energy-related companies), NCH Corporation (a manufacturer of products used in
maintenance applications), Republic Financial Services, Inc. (a provider of
casualty life insurance and consumer finance) and INDRESCO, Inc. (a provider of
products for industrial production and infrastructure development).
Mr. Kamp has been a director of the Company since June 1982. Mr. Kamp served
as chairman of the board of Premier Computer Corporation (a disk drive
remanufacturer) from 1985 to 1990, and also served as chairman of the board of
Rodime, Inc. (a disk drive manufacturer) from 1989 to 1991. Mr. Kamp was vice
chairman of Control Data Corporation until December 1984 and chairman of
Centronics Data Computer Corporation (a holding company) from January 1985
until January 1988.
Mr. Stone has been a director of the Company since January 1979. Since March
1985, Mr. Stone has been general partner of Davis Venture Group, L.P., the
general venture partner of Davis Venture Partners, L.P. (a venture capital
partnership). Mr. Stone also serves as a director of Encore Wire Corporation (a
manufacturer of copper electrical wire).
Mr. Stuart has been a director of the Company since February 1986. Mr. Stuart
has been President of the Company since April 1987.
Should any nominee named herein for the office of director become unable or
unwilling to accept nomination or election, it is intended that the persons
acting under the proxy will vote for the election, in his stead, of such other
person as the Board may recommend. The Board has no reason to believe that any
nominee named above will be unable or unwilling to serve if elected.
3
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board held five meetings in Fiscal 1994, and each director attended at
least 75% of the aggregate of (i) the total number of meetings of the Board
held during the period for which he served as a director and (ii) the total
number of meetings held by all committees of the Board on which he served.
The Board does not have a standing nominating committee or a committee
performing similar functions. Nominees to the Board are selected by the entire
Board.
The Board has an Option Committee (herein so called), which is composed of
Michael A. Stone, Michael E. Faherty, Paul J. Ferri, Rawles Fulgham, Thomas G.
Kamp, and Merle J. Volding. The Option Committee administers the 1989 Plan and
the 1994 Plan. The Option Committee held five meetings during Fiscal 1994.
The Board has a Compensation Committee (herein so called), which is composed
of Rawles Fulgham, Michael E. Faherty, and Thomas G. Kamp. The Compensation
Committee reviews and makes recommendations regarding compensation and other
employment benefits of officers and employees of the Company. The Compensation
Committee held two meetings during Fiscal 1994.
The Board has an Audit Committee (herein so called), which is composed of
Paul J. Ferri, Michael A. Stone, and Merle J. Volding. The Audit Committee
reviews the Company's financial results, recommends the appointment of the
Company's outside auditors, reviews the scope and results of audits, and
reviews internal accounting controls. The Audit Committee held three meetings
during Fiscal 1994.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
earned during Fiscal 1994 and the fiscal years ended March 28, 1993 ("Fiscal
1993"), and March 29, 1992 ("Fiscal 1992"), by the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (based upon salary and bonus earned during Fiscal 1994). All
information relating to shares of Common Stock and options to purchase Common
Stock contained herein have been adjusted to reflect the three-for-two stock
split of Common Stock effected in February 1993.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
---------------------- -------------------------------
FISCAL RESTRICTED STOCK
NAME AND PRINCIPAL POSITION(S) YEAR SALARY ($) BONUS($)(1) AWARD(S) ($) OPTIONS (#)(2)
- - ------------------------------ ------ ---------- ----------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Grahame N. Clark, Jr..... 1994 256,849 198,645 392,364 40,000
Chairman and Chief Exec-
utive Officer 1993 255,615 181,059 229,361(3) 60,000
1992 224,231 270,000(4) -0- 60,000
Norton A. Stuart, Jr. ... 1994 186,924 112,651 19,703 10,000
President 1993 185,038 111,757 44,873(5) 15,000
1992 159,808 155,400(4) -0- 15,000
William A. Feldman....... 1994 164,336 79,167 13,582 10,000
Senior Vice President 1993 159,810 77,074 137,284(6) 22,500
1992 144,000 94,500 -0- 30,000
William E. Bassett....... 1994 169,337 83,261 12,224 15,000
Executive Vice Presi-
dent; President, 1993 135,904 69,312 108,159(7) 37,500
BancTec USA, Inc.; and 1992 127,115 87,020 -0- 15,000
President,
BTI Systems, Inc.
Jerome R. Brown.......... 1994 135,754 63,428 11,095 5,000
Senior Vice President 1993 128,500 62,943 132,502(8) 22,500
1992 128,115 75,030 -0- 15,000
</TABLE>
4
<PAGE>
- - --------
(1) Reflects bonus earned during the fiscal year. In some instances, all or a
portion of the bonus was paid during the next fiscal year.
(2) Options to acquire shares of Common Stock.
(3) On March 27, 1994, Mr. Clark held 36,324 shares of restricted Common Stock
granted under the 1989 Plan with a value of $853,626 based upon the closing
market price of Common Stock reported on the National Market System of
NASDAQ on March 25, 1994, the last trading day of Fiscal 1994. Of these
36,324 shares of restricted stock, 12,064 shares vest within three years of
the date of grant and the remaining shares of restricted stock will vest
beyond three years from the date of grant. Of such 12,064 shares, 3,464
vested on April 1, 1994, 556 vested on May 27, 1994, 3,465 will vest on
April 1, 1995, 557 will vest on May 27, 1995, 3,466 will vest on April 1,
1996, and 557 will vest on May 27, 1996. Dividends, if any, paid in respect
of Common Stock will be paid in respect of Common Stock held as restricted
stock.
(4) For Fiscal 1992, the bonus includes a cash bonus that was required to be
utilized only for the exercise of stock options granted under the 1989 Plan
or any option plan under which the Company had previously granted options.
For Fiscal 1992, the following amounts of such limited purpose cash bonus
were received by the individuals indicated: Grahame N. Clark, Jr.
($90,000); and Norton A. Stuart, Jr. ($51,800).
(5) On March 27, 1994, Mr. Stuart held 2,960 shares of restricted Common Stock
granted under the 1989 Plan with a value of $69,560 based upon the closing
market price of Common Stock reported on the National Market System of
NASDAQ on March 25, 1994, the last trading day of Fiscal 1994. Of these
2,960 shares of restricted stock, 965 vested on April 1, 1994, and 965 will
vest on April 1, 1995, 343 will vest on each of May 27, 1994 and May 27,
1995, and 344 will vest on May 27, 1996. Dividends, if any, paid in respect
of Common Stock will be paid in respect of Common Stock held as restricted
stock.
(6) On March 27, 1994, Mr. Feldman held 8,763 shares of restricted Common Stock
granted under the 1989 Plan with a value of $205,930 based upon the closing
market price of Common Stock reported on the National Market System of
NASDAQ on March 25, 1994, the last trading day of Fiscal 1994. Of these
8,763 shares of restricted stock, 3,125 shares vest within three years of
the date of grant and the remaining shares of restricted stock will vest
beyond three years from the date of grant. Of such 3,125 shares, 805 vested
on April 1, 1994, 236 vested on May 27, 1994, 805 will vest on April 1,
1995, 237 will vest on May 27, 1995, 805 will vest on April 1, 1996, and
237 will vest on May 27, 1996. Dividends, if any, paid in respect of Common
Stock will be paid in respect of Common Stock held as restricted stock.
(7) On March 27, 1994, Mr. Bassett held 6,920 shares of restricted Common Stock
granted under the 1989 Plan with a value of $162,620 based upon the closing
market price of Common Stock reported on the National Market System of
NASDAQ on March 25, 1994, the last trading day of Fiscal 1994. Of these
6,920 shares of restricted stock, 2,732 shares vest within three years of
the date of grant and the remaining shares of restricted stock will vest
beyond three years from the date of grant. Of such 2,732 shares, 697 vested
on April 1, 1994, 213 vested on May 27, 1994, 698 will vest on April 1,
1995, 213 will vest on May 27, 1995, 698 will vest on April 1, 1996, and
213 will vest on May 27, 1996. Dividends, if any, paid in respect of Common
Stock will be paid in respect of Common Stock held as restricted stock.
(8) On March 27, 1994, Mr. Brown held 8,471 shares of restricted Common Stock
granted under the 1989 Plan with a value of $199,068 based upon the closing
market price of Common Stock reported on the National Market System of
NASDAQ on March 25, 1994, the last trading day of Fiscal 1994. Of these
8,471 shares of restricted stock, 2,551 shares vest within three years of
the date of grant and the remaining shares of restricted stock will vest
beyond three years from the date of grant. Of such 2,551 shares, 657 vested
on April 1, 1994, 193 vested on May 27, 1994, 657 will vest on April 1,
1995, 193 will vest on May 27, 1995, 657 will vest on April 1, 1996, and
193 will vest on May 27, 1996. Dividends, if any, paid in respect of Common
Stock will be paid in respect of Common Stock held as restricted stock.
5
<PAGE>
OPTION GRANTS IN FISCAL 1994
The following table sets forth information related to options granted to the
named executive officers during Fiscal 1994.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
------------------------------------------------------------------------------- ------------------------
PERCENT OF TOTAL
OPTIONS OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE
NAME (#)(2) FISCAL YEAR(%) ($/SH)(3) EXPIRATION DATE 5% ($) 10% ($)
---- ------- ------------------ ----------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Grahame N. Clark, Jr.... 40,000 14.40 20.75 December 1, 1999 282,279 640,395
Norton A. Stuart, Jr.... 10,000 3.60 20.75 December 1, 1999 70,569 160,098
William A. Feldman...... 10,000 3.60 20.75 December 1, 1999 70,569 160,098
William E. Bassett...... 15,000 5.40 20.75 December 1, 1999 105,854 240,148
Jerome R. Brown......... 5,000 1.80 20.75 December 1, 1999 35,284 80,049
</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 compound
rates of appreciation of the Common Stock over the term of the options.
These amounts do not take into account provisions of certain options
providing for termination of the options following termination of
employment, nontransferability, or vesting periods of up to five years.
These amounts represent certain assumed rates of appreciation only. Actual
gains on stock option exercises are dependent on the future performance of
the Common Stock and overall stock market conditions. There can be no
assurance that the potential values reflected in this table will be
achieved. All amounts have been rounded to the nearest whole dollar amount.
(2) Options to acquire shares of Common Stock, which were granted on December
1, 1994, under the 1989 Plan. The options will vest ratably over five years
beginning one year after the date of grant.
(3) The option exercise price may be paid in shares of Common Stock owned by
the executive officer, in Cash, or a combination of either of the
foregoing, as approved by the Option Committee in its discretion.
AGGREGATED OPTION EXERCISES IN FISCAL 1994
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information related to the number of options
exercised in Fiscal 1994 and the value realized by the named executive
officers. Further, the table provides information related to the number and
value of options held by the named executive officer at the end of Fiscal 1994.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END(1)
------------------------------- ---------------------------------
SHARES
ACQUIRED
ON VALUE
NAME EXERCISE(#) REALIZED($)(2) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE ($) UNEXERCISABLE ($)
---- ----------- -------------- -------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Grahame N. Clark, Jr. -0- -0- 66,000 149,500 884,540 1,227,040
Norton A. Stuart, Jr. 8,950 167,067 34,235 37,000 548,608 299,980
William A. Feldman -0- -0- 28,500 58,000 381,960 544,460
William E. Bassett -0- -0- 37,800 66,300 540,124 511,634
Jerome R. Brown 12,300 190,604 13,800 44,600 170,904 433,558
</TABLE>
- - --------
(1) The closing market price of Common Stock as reported on the National Market
System of NASDAQ on March 25, 1994, the last trading day of Fiscal 1994,
was $23.50. Value is calculated on the basis of the remainder of $23.50
minus the exercise price multiplied by the number of shares of Common Stock
underlying the option.
6
<PAGE>
(2) Value is calculated based on the remainder of the closing market price of
Common Stock on the date of the exercise minus the exercise price
multiplied by the number of shares to which the exercise relates.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is entitled to receive
compensation in the amount of $12,000 per year plus a fee of $1,000 for each
day on which he attends a meeting of the Board or a meeting of a committee of
the Board, if the committee meeting is not held on the same day as a Board
meeting. Pursuant to the terms of a nondiscretionary formula in the 1989 Plan,
each director who is not an employee of the Company was granted options during
Fiscal 1994 to purchase 5,000 shares of Common Stock at an exercise price of
$22.38 per share.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements (the "Agreements") with
Grahame N. Clark, Jr., Norton A. Stuart, Jr., Gary T. Robinson, and Tod V.
Mongan. Each of the Agreements provides for the payment of base salary amounts
and the participation in any employee benefit or bonus plan or arrangement made
available by the Company on a basis consistent with the terms, conditions, and
overall administration of such plan or arrangement. The term of each of the
Agreements is five years from May 28, 1992, the date of each of the Agreements.
Upon the death of an executive during the term of that executive's Agreement,
the Company is obligated to pay the executive's base salary for a period of
months (not to exceed twelve months) determined by multiplying two times the
number of complete twelve-month periods of employment of the executive with the
Company. Each Agreement provides that if the executive's employment is
terminated (whether such termination is by the executive or by the Company)
within three years after a Triggering Event (which, generally speaking, is
defined in the Agreement as a change in control of the Company) for any reason
other than (i) termination by the Company for cause (as defined in the
Agreement), (ii) the executive having reached the age of 65, or (iii) the
executive's death, the Company is obligated to make a lump sum cash payment
equal to 2.99 times the average of the executive's annualized includable
compensation (as defined in the Agreement) received from the Company during the
period consisting of the five full taxable years ending immediately preceding
the Triggering Event. The Company is obligated to transfer to an irrevocable
trust upon the occurrence of a Triggering Event, or as soon thereafter as the
Company knows of the Triggering Event, the amount of cash that the Company
would be obligated to pay under the Agreement if such executive's employment
were terminated on that date.
COMPENSATION COMMITTEE AND OPTION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During Fiscal 1994, the Compensation Committee was composed of Thomas G.
Kamp, Michael E. Faherty, and Rawles Fulgham and the Option Committee was
composed of Michael A. Stone, Michael E. Faherty, Paul J. Ferri, Rawles
Fulgham, Thomas G. Kamp, and Merle J. Volding. See "Election of Directors" and
"Meetings and Committees of the Board." No member of the Compensation Committee
or the Option Committee is an officer of the Company. No member of the
Compensation Committee or the Option Committee was formerly an officer of the
Company except for Mr. Volding, a member of the Option Committee, who was
formerly an officer of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board is comprised of three nonemployee
directors of the Company, Thomas G. Kamp, Michael E. Faherty, and Rawles
Fulgham. The Compensation Committee members each serve for a term of three
years. A new member is added each year with the then acting chairman stepping
down from the Compensation Committee.
7
<PAGE>
The Compensation Committee is responsible for setting and administering the
policies governing annual compensation of the executive officers of the
Company. These policies are based upon the philosophy that the Company's long-
term success is best achieved through recruitment and retention of the best
people in the industry. The Compensation Committee applies this philosophy in
determining compensation for the Company's executive officers in three areas:
salary; bonuses; and stock options and awards.
Base Salary. The Company strives to offer salaries to its executive officers
which are competitive in its industry for similar positions requiring similar
qualifications. In determining executive officers' salaries, the Compensation
Committee considers information provided by Hewitt Associates and from
published salary surveys specific to the Company's industry, size, and
geographic location.
The executive officers' base salaries are targeted at slightly below the
median as indicated in the salary surveys. Base salaries are reviewed bi-
annually to determine if adjustments are necessary based upon competitive
practices and economic conditions. In addition, executive officers' salaries
are periodically adjusted based on individual performance and changes in job
content and responsibilities.
The Compensation Committee evaluates the performance and sets the salary of
the Company's Chairman and Chief Executive Officer, Grahame N. Clark, Jr. Mr.
Clark does not participate in any discussions of the Compensation Committee
regarding his salary or performance. Mr. Clark evaluates the performance of all
other executive officers, and recommends salary adjustments which are reviewed
and acted upon by the Compensation Committee. Performance evaluations for
individual executive officers are based on achievement of predetermined
individual goals. For Mr. Clark, these goals are set by the Compensation
Committee, and for all other officers, these goals are set by Mr. Clark.
Bonuses. The Company seeks to provide additional incentives and rewards to
executives who make contributions of outstanding value to the Company. For this
reason, the Compensation Committee administers a bonus plan, which can comprise
a substantial portion of the total compensation of executive officers when
earned and paid. It is the intention of the Compensation Committee to weight
the total compensation of the executive officers heavily in the area of
incentive compensation. The Compensation Committee believes that optimal
performance is encouraged through the use of incentive programs, furthering the
goal of having performance compensation as an important component of total
executive compensation.
In consultation with the Chairman, the Compensation Committee determines
annually the total amount of cash bonuses available for executive officers.
Awards under the plan are contingent upon the performance of the Company as a
whole, based upon the Company attaining certain pre-tax goals set by the Board
annually in consultation with the Chairman. The target amounts of bonus
available to each executive officer are set annually by the Compensation
Committee with regard to Mr. Clark and by Mr. Clark, subject to review and
approval by the Compensation Committee, with regard to executive officers other
than Mr. Clark. In all cases the target amounts for individual officers are
based upon such officer's individual goals and objectives and the goals and
objectives established for the particular operating unit such officer is
responsible for managing. Executive officers earn a percentage of the target
amounts under the bonus plan based on the achievement of these performance
goals and objectives as determined annually by the Compensation Committee and a
percentage based on the Company's attainment of the pre-tax goals. Awards are
weighted so that proportionately higher awards are received when the Company's
performance exceeds targets and proportionately smaller or no awards are made
when the Company does not meet targets.
Stock Options. The Compensation Committee believes that employee equity
participation provides significant additional motivation to executive officers
to maximize value for the Company's stockholders, and therefore recommends to
the Option Committee periodic grants of stock options under the 1989 Plan.
Stock options are approved by the Option Committee, based on the recommendation
of the Compensation Committee, with exercise prices at the prevailing market
price at date of grant. The stock options will have value only if the Company's
stock price increases over the exercise price. Therefore, the Compensation
8
<PAGE>
Committee believes that stock options serve to align the interest of executive
officers closely with the other stockholders because of the direct benefit
executive officers receive through improved stock performance.
The Compensation Committee makes recommendations to the Option Committee
concerning the size and frequency of option grants for executive officers,
after consideration of recommendations from the Chairman. Recommendations for
options are based upon relative position and responsibilities of each executive
officer, historical and expected contributions of each officer to the Company,
and previous option grants to such executive officers within the Company.
Generally, option grants vest over five years and expire six years from date of
grant. Option grants for Fiscal 1994 are set forth in the table entitled
"Option Grants in Fiscal 1994."
Restricted Stock. The Company has implemented the use of restricted stock in
order to further the goal of having its executive officers maintain a "stake"
in the long-term success of the Company, through equity ownership, as well as
encouraging long-term employment with the Company. Restricted awards are given
to executive officers in lieu of base salary increases and in lieu of a fixed
percentage of the available bonus for each fiscal year.
Each time an executive officer's base salary is increased such executive
officer must take a minimum of 50% of such increase as a restricted stock
award. It is such officer's option to take up to the entire amount of such
increase as a restricted stock award but in no event can the percentage fall
below 50%. The amount of restricted stock awarded is based on the base salary
increase, the percentage to be taken in stock, the number of years remaining
until such officer reaches sixty years of age, and the closing price of the
Company's Common Stock on the day of the award. This restricted stock award
vests in equal annual installments over the number of years remaining until
such officer attains the age of sixty.
Executive officers are required to take 15% of their annual incentive bonus,
if any, in the form of a restricted stock award. The number of shares of
restricted stock awarded is based upon the closing price of the Company's
Common Stock on the date the incentive bonus is approved by the Compensation
Committee. The restricted stock awarded to each executive officer vests over a
period of three years.
COMPENSATION COMMITTEE
Thomas G. Kamp
Michael E. Faherty
Rawles Fulgham
9
<PAGE>
PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total stockholder return of the Company's Common Stock during the five fiscal
years ended March 27, 1994, with the yearly change in cumulative total return
of the NASDAQ Total Market Index and Standard and Poors (S&P) Computer
Software and Services Industry Group Index. The comparison assumes that $100
was invested on April 1, 1989, in the Company's Common Stock and in each of
the foregoing indices and assumes reinvestment of dividends.
In 1993, the peer group used for comparison purposes in the Performance
Graph was the NASDAQ Computer Manufacturer Index. With the acquisitions of
Advanced Computer Systems, Inc., LeRoux, Pitts and Associates, and Imagesolve
International Ltd., the Company has accelerated its transition from primarily
hardware manufacturer to a software and service company. Software and service
revenue totaled in excess of 63% of the Company's 1994 revenues. Accordingly,
the Company believes the S&P Software and Services Industry Group Index is a
more appropriate peer group for comparison purposes. The NASDAQ Computer
Manufacturer Index is presented in 1994 in accordance with Securities and
Exchange Commission requirements.
(ART)
CALCULATED INDEX
<TABLE>
<CAPTION>
NASDAQ S&P
NASDAQ COMPUTER SOFTWARE
BANCTEC STOCK MKT MFG & SERVICE
------- --------- -------- ---------
<S> <C> <C> <C> <C>
2-Apr-89 100 100 100 100
31-Mar-90 161 110 120 121
31-Mar-91 118 126 167 110
29-Mar-92 207 161 176 143
28-Mar-93 223 182 199 189
27-Mar-94 313 208 199 212
</TABLE>
10
<PAGE>
CERTAIN STOCKHOLDERS
The following table sets forth certain information as of June 30, 1994,
regarding the ownership of Common Stock of: (i) each person who is known by the
Company to be the beneficial owner of more than five percent of the outstanding
shares of Common Stock; (ii) each director of the Company; (iii) each executive
officer named in the Summary Compensation Table; and (iv) all executive
officers and directors of the Company as a group. Included in the "Number of
Shares of Common Stock" are shares attributable to options that are exercisable
as of, or will be exercisable within 60 days after, June 30, 1994.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF BENEFICIAL SHARES OF OUTSTANDING
OWNER(1) COMMON STOCK COMMON STOCK
------------------ ------------ ------------
<S> <C> <C>
FMR Corp.(2)............. 1,260,700 11.8%
82 Devonshire Street
Boston, Massachusetts
02109
Wellington Management
Company(3).............. 821,940 7.7%
75 State Street
Boston, Massachusetts
02109
The Vanguard Group....... 590,000 5.5%
P.O. Box 2600
Valley Forge, Pennsylva-
nia 19482
Michael E. Faherty(4).... 45,792 *
Paul J. Ferri(5)......... 122,062 1.1%
Merle J. Volding(6)...... 38,077 *
Grahame N. Clark, Jr.(7). 133,567 1.2%
Norton A. Stuart, Jr.(8). 72,251 *
Michael A. Stone(9)...... 42,750 *
Rawles Fulgham(10)....... 38,250 *
Thomas G. Kamp(11)....... 16,500 *
William A. Feldman(12)... 17,461 *
William E. Bassett(13)... 51,568 *
Jerome R. Brown(14)...... 36,495 *
All executive officers
and directors as a group
(21 persons)(15)........ 938,828 8.8%
</TABLE>
- - --------
* Less than one percent.
(1) Except as otherwise indicated, each stockholder has sole investment and
sole voting power with respect to the shares of Common Stock shown.
(2) As of June 30, 1994, FMR Corp. beneficially owned 1,260,700 shares of the
Common Stock of the Company. This number includes 986,700 shares
beneficially owned by Fidelity Management & Research Company, as a result
of its serving as investment advisor to various investment companies
registered under Section 8 of the Investment Company Act of 1940 and
serving as investment advisor to certain other funds which are generally
offered to limited groups of investors, and 274,000 shares beneficially
owned by Fidelity Management Trust Company, as a result of its serving as
trustee or managing agent for various private investment accounts,
primarily employee benefit plans, and serving as investment advisor to
certain other funds which are generally offered to limited groups of
investors.
(3) These shares are owned by a variety of investment advisory clients of
Wellington Management Company, which clients receive dividends and the
proceeds from the sale of such shares. In addition, no individual client is
known to have such interest with respect to more than 5% of the shares
outstanding.
11
<PAGE>
(4) Includes 22,500 shares that Mr. Faherty may acquire pursuant to stock
options.
(5) Includes 11,250 shares owned of record by Mr. Ferri's children. Mr. Ferri
disclaims beneficial ownership of such shares. Also includes 30,000 shares
that Mr. Ferri may acquire pursuant to stock options.
(6) Includes 37,702 shares that Mr. Volding may acquire pursuant to stock
options.
(7) Includes 66,000 shares that Mr. Clark may acquire pursuant to stock
options and 36,324 shares of unreleased restricted stock.
(8) Includes 34,235 shares that Mr. Stuart may acquire pursuant to stock
options and 2,960 shares of unreleased restricted stock.
(9) Includes 31,500 shares that Mr. Stone may acquire pursuant to stock
options.
(10) Includes 30,000 shares that Mr. Fulgham may acquire pursuant to stock
options.
(11) Includes 16,500 shares that Mr. Kamp may acquire pursuant to stock
options.
(12) Includes 7,722 shares of unreleased restricted stock.
(13) Includes 37,800 shares that Mr. Bassett may acquire pursuant to stock
options and 6,802 shares of unreleased restricted stock.
(14) Includes 13,800 shares that Mr. Brown may acquire pursuant to stock
options and 8,548 shares of unreleased restricted stock.
(15) Also includes 576,062 shares subject to stock options and 92,897 shares of
unreleased restricted stock.
STOCKHOLDER PROPOSALS
Any stockholder of the Company desiring to present a proposal for action at
the Annual Meeting of Stockholders to be held in 1995 must deliver the proposal
to the executive offices of the Company by no later than April 3, 1995, unless
the Company notifies the stockholders otherwise.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has selected
Arthur Andersen & Co. to act as independent auditors for the fiscal year ending
in April 1995.
Arthur Andersen & Co. has advised the Company that it will have a
representative in attendance at the Meeting with the opportunity to make a
statement, if such representative desires to do so, and to respond to
appropriate questions presented at the Meeting.
On September 2, 1992, the Company notified Ernst & Young (Dallas, Texas
office) of its decision to retain another independent auditor for the audit of
its financial statements for Fiscal 1993. During Fiscal 1992 and during the
period from March 29, 1992 (the last day of Fiscal 1992) through September 2,
1992, there were no disagreements with Ernst & Young on matters of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures which, if not resolved to the satisfaction of Ernst & Young, would
have caused Ernst & Young to make reference to the matter in their report.
Ernst & Young's report on the financial statements of the Company for Fiscal
1992 did not contain an adverse opinion or a disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
12
<PAGE>
OTHER MATTERS
The Board does not intend to bring any other matters before the Meeting and
does not know of any matters which will be brought before the Meeting by
others. However, if any other matters properly come before the Meeting, it is
the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with their judgment on such matters.
By Order of the Board of Directors
Tod V. Mongan
Secretary
Dallas, Texas
July 13, 1994
13
<PAGE>
BANCTEC, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 18, 1994
The undersigned hereby appoints Grahame N. Clark, Jr. and Norton A.
Stuart, Jr. as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated below, all the
shares of common stock of BancTec, Inc. held of record by the undersigned on
July 6, 1994, at the Annual Meeting of Stockholders to be held on August 18,
1994 at 10:00 a.m., Dallas, Texas time, at The Doubletree Hotel at Lincoln
Centre, 5410 LBJ Freeway, Dallas, Texas, and at any adjournment(s) thereof.
Receipt of the Notice of Annual Meeting of Stockholders and the Proxy
Statement in connection therewith, each dated July 13, 1994, is hereby
acknowledged. The undersigned hereby revokes any proxies heretofore given.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS HEREON. IN
THE ABSENCE OF SUCH SPECIFICATIONS, THE PROXY WILL BE VOTED FOR THE ELECTION
TO THE BOARD OF DIRECTORS OF THE NOMINEES LISTED ON THIS PROXY AND IN THE
DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS.
(REVERSE SIDE)
------------------------------------------------------
----------
COMMON
1. ELECTION OF DIRECTORS: Michael E. Faherty, Paul J. Ferri, and Merle J.
Volding (INSTRUCTION: To withhold authority for any individual nominee,
write that nominee's name on the space provided below.)
FOR all nominees WITHHOLD
listed below (except as AUTHORITY --------------------------------
marked to the to vote FOR
contrary). all nominees
listed above.
-------- --------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE WITH RESPECT TO ANY
OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT(S) THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 18, 1994.
Dated: _______________, 1994
_____________________________
_____________________________
Signature(s)
When signing on behalf of a
corporation, partnership,
estate, trust, or in any
other representative
capacity, please sign name
and title. For joint accounts
each joint owner must sign.
