<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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Check Technology Corporation
- --------------------------------------------------------------------------------
(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):
/ / 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:
------------------------------------------------------------------------
<PAGE>
CHECK TECHNOLOGY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 20, 1997
Notice is hereby given that the Annual Meeting of Shareholders of Check
Technology Corporation will be held at the offices of the Company, 12500
Whitewater Drive, Minnetonka, Minnesota 55343-9420 on Thursday, March 20, 1997
at 3:30 p.m., Central Standard Time, for the following purposes:
1. To elect five directors to hold office until the next Annual Meeting
of Shareholders or until their successors are elected.
2. To ratify and approve the selection of independent public
accountants for the current fiscal year.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on January 27, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
By Order of the Board of Directors,
Thomas H. Garrett III
SECRETARY
Minnetonka, Minnesota
January 31, 1997
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON.
SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON
IF THEY SO DESIRE.
<PAGE>
CHECK TECHNOLOGY CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Check Technology
Corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the Annual Meeting of
Shareholders to be held on March 20, 1997, or any adjournment or adjournments
thereof. The cost of this solicitation will be borne by the Company. In addition
to the solicitation by mail, officers, directors and employees of the Company
may solicit proxies by telephone, telegraph or in person. The Company may also
request banks and brokers to solicit their customers who have a beneficial
interest in the Company's Common Stock registered in the name of nominees and
will reimburse such banks and brokers for their reasonable out-of-pocket
expenses.
Any proxy may be revoked at any time before it is voted by receipt of a
proxy properly signed and dated subsequent to an earlier proxy, or by revocation
of a written proxy by request in person at the Annual Meeting; if not so
revoked, the shares represented by such proxy will be voted. The Company's
principal offices are located at 12500 Whitewater Drive, Minnetonka, Minnesota
55343-9420, and its telephone number is (612) 939-9000. The mailing of this
proxy statement to shareholders of the Company commenced on or about January 31,
1997.
The total number of shares of capital stock of the Company outstanding and
entitled to vote at the meeting as of January 27, 1997 consists of 6,317,727
shares of $.10 par value Common Stock (the "Common Stock"). Each share of Common
Stock is entitled to one vote and there is no cumulative voting. Only
shareholders of record at the close of business on January 27, 1997 will be
entitled to vote at the meeting. The presence in person or by proxy of the
holders of a majority of the shares entitled to vote at the Annual Meeting of
Shareholders constitutes a quorum for the transaction of business.
Under Minnesota law, each item of business properly presented at a meeting
of shareholders generally must be approved by the affirmative vote of the
holders of a majority of the voting power of the shares present, in person or by
proxy, and entitled to vote on that item of business. However, if the shares
present and entitled to vote on that item of business would not constitute a
quorum for the transaction of business at the meeting, then the item must be
approved by a majority of the voting power of the minimum number of shares that
would constitute such a quorum. Votes cast by proxy or in person at the Annual
Meeting of Shareholders will be tabulated at the meeting to determine whether or
not a quorum is present. Abstentions will be treated as shares that are present
and entitled to vote for purposes of determining the presence of a quorum but as
unvoted for purposes of determining the approval of the matter submitted to the
shareholders for a vote. If a broker indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table includes information as of January 27, 1997 concerning
the beneficial ownership of the holdings of Common Stock of the Company by (i)
all persons who are known by the Company to hold five percent or more of the
Common Stock of the Company, (ii) each of the directors of the Company, (iii)
each executive officer named in the Summary Compensation Table below, and (iv)
all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED PERCENT OF CLASS
- ----------------------------------------------------------------------- ------------------------ -----------------
<S> <C> <C>
Perkins Capital Management, Inc........................................ 972,700(2) 15.4%
730 East Lake Street
Wayzata, MN 55391-1769
Austin W. Marxe........................................................ 628,000(3) 9.9%
AWM Investment Company, Inc.
153 East 53rd Street
New York, NY 10022
Jay A. Herman(4)(5).................................................... 164,000(6) 2.6%
Robert Reznick(4)...................................................... 92,025(6) 1.5%
Thomas H. Garrett III(4)............................................... 20,000(6)(7) *
Gary R. Holland(4)..................................................... 13,333(6) *
Oscar Victor(4)........................................................ 22,000(6) *
All officers and directors as a group (9 persons)...................... 448,183(6) 7.0%
</TABLE>
- ------------------------
* Less than 1%
(1) Except as otherwise indicated, all shares are beneficially owned and the
sole voting and investment power is held by the person indicated.
(2) Sole dispositive power is exercised over such shares and sole voting power
is exercised over 356,150 of the shares and no voting power is exercised
over the remaining 616,550 shares.
(3) Includes 455,000 shares held by Special Situations Fund III, L.P. and
150,000 shares held by Special Situations Cayman Fund, L.P., of which AWM
Investment Company has the right to sell 605,000 shares.The controlling
shareholder and Chief Executive Officer of AWM Investment Company is Austin
W. Marxe, who also individually owns 23,000 shares.
(4) Serves as a director of the Company and has been nominated for reelection.
(5) Serves as an executive officer of the Company and appears in the Summary
Compensation Table below.
(6) Includes the following number of shares which could be purchased under stock
options exercisable within 60 days from the date hereof: Mr. Herman, 54,000
shares; Mr. Reznick, 17,700 shares; Mr. Garrett, 4,667 shares; Mr. Holland,
3,333 shares; Mr. Victor, 17,660 shares; and all officers and directors as a
group, 135,485 shares.
(7) Includes 6,000 shares held by Mr. Garrett's spouse. Mr. Garrett disclaims
beneficial ownership of such shares.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Bylaws of the Company provide that at each annual meeting the
shareholders shall determine the number of directors to serve during the
following year. The Bylaws also authorize the Board to increase the number of
directorships between annual meetings of shareholders. Management has
recommended that the number of directors to be elected this year be set at five.
The Board of Directors recommends that the shareholders elect the nominees
named below as directors of the Company for the ensuing year. It is intended
that the persons named as proxies in the enclosed form of proxy will vote the
proxies received by them for the election as directors of the nominees named
below. Each nominee is presently a director of the Company. Unless otherwise
indicated, each nominee has held his present occupation as set forth below, or
has been an officer with the organization indicated, for more than the past five
years. Each nominee has indicated a willingness to serve, but in case any
nominee is not a candidate at the meeting, for reasons not presently known to
the Company, the proxies named in the enclosed form of proxy may vote for a
substitute nominee in their discretion.
<TABLE>
<S> <C>
Robert Reznick Chairman of the Board of Directors
Director since 1986 of Fidelity Bank, Edina, Minnesota
Age--77
</TABLE>
Mr. Reznick served as Chairman of the Board of Craig-Hallum Corporation, a
holding company with interests in the securities and investment banking
industries, from 1969 through June 1992.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Jay A. Herman President of the Company
Director since 1989 since June 1989
Age--49
</TABLE>
Mr. Herman joined the Company as Executive Vice President and Chief
Financial Officer in May 1988 and was promoted to President in June 1989. Prior
to joining the Company, Mr. Herman was Vice President and Chief Financial
Officer of Gelco Corporation's International Division. He held that post from
1986 to 1988. Between 1979 and 1986, Mr. Herman held the positions of Vice
President of Administrative Services for Gelco Corporation and Director of
Planning and Budgets for Gelco's Fleet Leasing Division. Before joining Gelco,
Mr. Herman held several positions with General Mills.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Thomas H. Garrett III Business Consultant
Director since 1986
Age--51
</TABLE>
Mr. Garrett has been a business consultant since July 1996. Prior to July
1996, Mr. Garrett was a partner at the law firm of Lindquist & Vennum P.L.L.P.
of Minneapolis, Minnesota for more than the last five years. He served as its
Managing Partner from 1993 through 1995. Mr. Garrett is also a director of St.
Jude Medical, Inc. and Lifecore Biomedical, Inc.
- --------------------------------------------------------------------------------
3
<PAGE>
<TABLE>
<S> <C>
Gary R. Holland Managing Partner, Holland &
Director since 1992 Associates, a Minneapolis-
Age--54 based consulting firm
</TABLE>
Mr. Holland previously served as President and Chief Executive Officer of
DataCard Corporation, a Minneapolis, Minnesota-based manufacturer of plastic
transaction cards, embossing and encoding equipment and transaction terminals,
from 1982 to 1992. He is also Chairman of the Board of Directors of Datakey,
Inc., a manufacturer of electronic security devices.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Oscar Victor Chief Executive Officer of
Director since 1986 VIC Research and Development
Age--77 Company, a research and consulting
company in Minneapolis, Minnesota
</TABLE>
Mr. Victor serves on the Board of Directors of General Securities,
Incorporated, a Minneapolis based mutual fund.
VOTE REQUIRED
The affirmative vote of a majority of the shares represented at the meeting
of the Company's Voting Stock is required for the election of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE NOMINEES.
------------------------
The Board of Directors met four times during fiscal 1996. The Board of
Directors has two standing committees, the Executive Committee and the Audit
Committee. The Executive Committee is currently composed of Messrs. Reznick and
Herman. The Executive Committee met eleven times during fiscal 1996. The
Executive Committee has the power of the Board and also acts as an advisory body
to the Board by reviewing various matters prior to their submission to the
Board. The Audit Committee is currently comprised of Messrs. Holland and
Garrett. The Audit Committee met twice in fiscal 1996 and has met once since
September 30, 1996 to review the 1996 audit and the recommendations of the
Company's independent auditors. Among other duties, the Audit Committee reviews
and evaluates significant matters relating to the audit and internal controls of
the Company, reviews the scope and results of audits by, and the recommendations
of, the Company's independent auditors and approves additional services to be
provided by the auditors. The Committee reviews audited financial statements of
the Company. Each director attended 75% or more of the meetings of the Board of
Directors and Board Committees on which he served.
The Company does not have a nominating committee or a compensation
committee.
The Check Technology Corporation 1991 Stock Plan (the "1991 Plan") provides
for the automatic granting of a defined number of non-qualified options to
non-employee directors. The 1991 Plan provides that each non-employee director
who is first elected a director (whether by vote of shareholders or directors)
shall receive an option to purchase 10,000 shares of the Company's Common Stock
at such date. At the third anniversary date of an option grant a non-employee
director who continues to serve as a member of the Board shall automatically be
granted an option to purchase an additional 10,000 shares of Common Stock with
the option price equal to the fair market value of the Company's Common Stock on
such date. Messrs. Garrett, Reznick and Victor received options for 10,000
shares on March 14, 1994 at $4.38 per share and Mr. Holland received an option
for 10,000 shares on December 30, 1995 at $9.63 per share. These options have
ten-year terms and will be exercisable as to one-third of the shares subject to
the option on each of the first three anniversary dates of the option grant.
4
<PAGE>
During fiscal 1996, directors were paid a fee of $1,000 for each meeting
attended of the Board of Directors and $500 for each meeting attended of any
committee on which they serve. No compensation for serving as a director was
paid to Mr. Herman. Mr. Garrett was a partner of Lindquist & Vennum P.L.L.P.
until June 30, 1996, and received no compensation for serving as a director
prior to that date. Lindquist & Vennum P.L.L.P. was paid for legal services
rendered to the Company during fiscal 1996. Subsequent to June 30, 1996 Mr.
Garrett was paid a fee of $1,000 for each meeting attended of the Board of
Directors and $500 for each meeting attended of the Audit Committee.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending September 30, 1996,
1995 and 1994, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to Jay A. Herman, the
Company's President and Chief Executive Officer (the "Named Executive"). No
other executive officer of the Company received total cash compensation
exceeding $100,000 during 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES
--------------------------------- UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
- ---------------------------------------------- --------- ---------- ---------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Jay A. Herman................................. 1996 $ 186,680 $ 75,600 0 $ 4,500
President and Chief Executive 1995 179,500 103,000 0 1,875
Officer 1994 171,774 145,950 62,500 1,875
</TABLE>
- ------------------------
(1) Reflects 401(k) matching contributions under the Company's Profit Sharing
Plan.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive concerning the exercise of options during 1996 and unexercised options
held as of September 30, 1996:
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#) FY-END ($)(2)
SHARES ACQUIRED VALUE REALIZED -------------------------- --------------------------
NAME ON EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- --------------- ------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jay A. Herman............... 50,000 $ 362,500 54,000 37,500 $ 322,750 $ 168,750
</TABLE>
- ------------------------
(1) Based on the difference between the exercise price and the market value at
the date of exercise.
(2) Based on a market price of $9.875 per share for the Company's Common Stock
as of September 30, 1996.
EMPLOYMENT AGREEMENTS
Effective October 1, 1994, the Board approved a new Employment Agreement for
Mr. Herman with a term through September 30, 1999. Under the agreement, Mr.
Herman receives a minimum base salary of $179,500 and is eligible for fringe
benefits made available to executive officers of the Company. The agreement also
provides that, if Mr. Herman's employment is terminated (1) by the Company for
reasons
5
<PAGE>
other than death, retirement, disability or "Cause;" or (ii) by Mr. Herman for
"good reason," following a "change in control" as defined in the agreement, then
the Company shall pay a severance payment equal to the greater of $538,500 or
three times Mr. Herman's full compensation (base plus incentive compensation and
other items) during the period prior to the termination. In general, a change in
control would occur when there has been a change in the controlling persons
reported in the Company's proxy statement, when 30% or more of the Company's
outstanding voting stock is acquired by any person, or when the current members
of the Board of Directors or their successors, elected or nominated by such
members, cease to be a majority of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The full Board of Directors of the Company acts as the Compensation
Committee. Jay A. Herman, the President of the Company, served on the Board of
Directors during 1996.
REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives are made by the entire
Board of Directors. The following report shall not be deemed incorporated by
reference into any filing under the Securities Exchange Act of 1933 or the
Securities Exchange Act of 1934.
The Company uses various compensation surveys and outside consultants to
develop its compensation strategy and plans. The Board also refers to such
surveys for executive compensation purposes. The Board has not used outside
consultants to prepare specific studies but the Board would be free to do so in
the exercise of its independent judgment.
There are four components to the Company's executive compensation program:
(1) base salary; (2) bonus; (3) stock option; and (4) profit sharing/retirement.
The compensation philosophy of the Company is to be competitive with comparable
and directly competitive companies to attract and motivate highly qualified
employees. To this end, the Board has adjusted the mix of the compensation
components from year to year according to survey data and the Company's
performance. While the Company's financial performance is one of the primary
factors in setting compensation, another important factor has been the Company's
development initiative with respect to the Imaggia product line.
BASE SALARY. Executive base salaries are adjusted annually based on cost of
living adjustments. Historically, base compensation increases have rarely
exceeded 5%. Exceptions have been made in cases where job skills, performance
and competitive salary information justify same.
BONUS. The Board annually approves executive bonuses based upon the
achievement of predetermined earnings and development objectives the Board
believes are critical to the Company's long-term progress. Bonuses are payable
to deserving executives, managers and key employees based upon the
recommendation of the Chief Executive Officer. The full Board approves the Chief
Executive Officer's share of the bonus pool.
STOCK OPTIONS. The Company's current stock option plans include executives,
managers and key employees. Stock options have been granted periodically by the
Board of Directors. The Company's 1991 Plan allows the grant of options, both
incentive and non-qualified, as well as restricted and deferred stock awards.
Restricted stock grants have been used sparingly. The Company's option grants
and restricted stock awards are subject to time vesting in 20%--25% annual
increments commencing on the first anniversary of the date of grant. During
fiscal 1996, the Company granted stock options to purchase an aggregate of
53,500 shares of common stock to eight executive officers and employees of the
Company, and granted an aggregate of 20,000 shares of restricted stock to
employees.
PROFIT SHARING/RETIREMENT. The Company sponsors a 401(k) Plan for U.S.
employees, including executives, under which the Company partially matches
employee contributions at a proportion set by the Company. The Board approves
the corporate matching formula for all employees.
6
<PAGE>
CHIEF EXECUTIVE COMPENSATION. Mr. Herman's compensation for the period
1994--1996 is shown in the summary compensation table above. The Board of
Directors believes that Mr. Herman has managed the Company extremely well in a
difficult competitive environment and that his compensation is consistent with
this evaluation. Mr. Herman has been subject to employment agreements with the
Company since 1990. The Agreement (described in "Employment Agreements" set
forth above) provides that the Board may increase Mr. Herman's base salary from
time to time as it deems advisable.
Submitted by the Company's Board of Directors:
Robert Reznick, Chairman
Thomas H. Garrett
Jay A. Herman
Gary R. Holland
Oscar Victor.
STOCK PERFORMANCE
The graph below sets forth a comparison of the cumulative shareholder return
of the Company's Common Stock over the last five fiscal years with the
cumulative total return over the same periods for the Total Return Index for the
Nasdaq Stock Market--U.S. Companies and a peer group made up of the following
five companies whose business is selling capital equipment to the industrial
printing industry: AM International Inc., Baldwin Technology Company Inc.,
Gunther International Ltd., Publishers Equipment Corp., and Stevens
International, Inc. The graph below compares the cumulative total return of the
Company's Common Stock over the last five fiscal years assuming a $100
investment on October 1, 1991 and assuming reinvestment of all dividends. This
graph shall not be deemed incorporated by reference into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE COMPANY NASDAQ INDEX PEER GROUP INDEX
<S> <C> <C> <C>
1991 $100 $100 $100
1992 64 112 61
1993 93 147 84
1994 208 148 90
1995 270 204 95
1996 359 243 42
</TABLE>
7
<PAGE>
PROPOSAL 2
APPROVAL OF AUDITORS
Ernst & Young LLP, independent public accountants, have been auditors for
the Company since its inception. They have been reappointed by the Board of
Directors, upon recommendation of the Audit Committee, as the Company's auditors
for the current fiscal year and shareholder approval of the appointment is
requested. In the event the appointment of Ernst & Young LLP is not approved by
the shareholders, the Board of Directors will make another appointment to be
effective at the earliest feasible time.
A representative of Ernst & Young LLP will be present at the Annual Meeting
of Shareholders, will have an opportunity to make a statement if he desires to
do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF ERNST &
YOUNG LLP.
SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders of a
company, after timely notice to the company, to present proposals for
shareholder action in the company's proxy statement where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action and are not properly omitted by company action in accordance with the
proxy rules. The Check Technology Corporation 1998 Annual Meeting of
Shareholders is expected to be held on or about March 19, 1998 and proxy
materials in connection with that meeting are expected to be mailed on or about
January 31, 1998. Shareholder proposals prepared in accordance with the proxy
rules must be received by the Company on or before October 15, 1997.
GENERAL
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) under the Securities Exchange Act of 1934,
executive officers, directors and 10% shareholders of the Company are required
to file reports on Forms 3, 4 and 5 of their beneficial holdings and
transactions in the Company's Common Stock. During fiscal 1996, all such reports
were filed in a timely manner.
OTHER MATTERS
The Board of Directors of the Company knows of no matters other than the
foregoing to be brought before the meeting. However, the enclosed proxy gives
discretionary authority in the event that any additional matters should be
presented.
The Annual Report of the Company for the past fiscal year is enclosed
herewith and contains the Company's financial statements for the fiscal year
ended September 30, 1996. A copy of Form 10-K, the Annual Report filed by the
Company with the Securities and Exchange Commission, will be furnished without
charge to any shareholder who requests it in writing from the Company, at the
address noted on the first page of this Proxy Statement.
BY THE ORDER OF THE
BOARD OF DIRECTORS
Thomas H. Garrett III
SECRETARY
8
<PAGE>
CHECK TECHNOLOGY CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
For the Annual Meeting of Shareholders
March 20, 1997
The undersigned hereby appoints Robert Reznick and Thomas H. Garrett III, or
either of them, proxies with full power of substitution to vote all shares of
stock of Check Technology Corporation of record in the name of the undersigned
at the close of business on January 27, 1997, at the Annual Meeting of
Shareholders to be held in St. Paul, Minnesota on March 20, 1997, or at any
adjournment or adjournments therof, hereby revoking all former proxies:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS. WITHHOLD AUTHORITY
FOR ALL NOMINEES LISTED BELOW TO VOTE FOR ALL NOMINEES
(EXCEPT AS MARKED TO THE CONTRARY) / / LISTED BELOW / /
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Robert Reznick, Jay A. Herman, Thomas H. Garrett III, Gary R. Holland and
Oscar Victor
<TABLE>
<S> <C> <C>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACOUNTANTS.
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
<TABLE>
<S> <C> <C>
3. IN THEIR DISCRETION, UPON ANY OTHER MATTERS COMING BEFORE THE MEETING.
</TABLE>
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE MATTERS
SUMMARIZED ABOVE UNLESS OTHERWISE SPECIFIED.
Dated ______________________, 1997
__________________________________
__________________________________
Please sign name(s) exactly as
shown at left. When signing as
executor, administrator, trustee
or guardian, give full title as
such; when shares have been issued
in names of two or more persons,
all should sign.
