<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions 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 18, 1999
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 on Thursday, March 18, 1999, at
3:00 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 auditors 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 26, 1999
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
February 5, 1999
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
ANNUAL MEETING OF SHAREHOLDERS
MARCH 18, 1999
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 Thursday, March 18, 1999, at the offices of the
Company, 12500 Whitewater Drive, Minnetonka, MN 55343, at 3:00 p.m., Central
Standard Time, 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, and no additional compensation will be paid
to such individuals. 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. The mailing of this proxy statement to
shareholders of the Company commenced on or about February 5, 1999.
The total number of shares of capital stock of the Company outstanding and
entitled to vote at the meeting as of January 26, 1999 consists of 6,166,240
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 26, 1999 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.
Shares represented by proxies properly signed, dated and returned will be
voted at the Annual Meeting in accordance with the instructions set forth
therein. If a proxy is properly signed but contains no such instructions, the
shares represented thereby will be voted FOR the director nominees, FOR the
appointment of the auditors and at the discretion of the proxy holders as to any
other matters which may properly come before the Annual Meeting. Each proxy may
be revoked at any time before it is voted by executing and returning a proxy
bearing a later date, by giving written notice of revocation to the Secretary of
the Company or by attending the Annual Meeting and voting in person.
Abstentions will be treated as shares that are present and entitled to vote
for purposes of determining the presence of a quorum and in tabulating votes
cast on proposals presented to shareholders, but as unvoted for purposes of
determining the approval of the matter. Consequently, an abstention will have
the same effect as a negative 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 sets forth, as of January 26, 1999, the beneficial
ownership of the Company's Common Stock 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>
AWM Investment Company, Inc. .......................................... 528,700(1) 8.6%
153 East 53rd Street
New York, NY 10022
Perkins Capital Management, Inc. ...................................... 346,250(2) 5.6%
730 East Lake Street
Wayzata, MN 55391
Jay A. Herman(3)(4).................................................... 172,300(5) 2.8%
Robert Reznick(3)...................................................... 107,025(5)(6) 1.7%
Thomas H. Garrett III(3)............................................... 25,000(5)(7) *
Gary R. Holland(3)..................................................... 27,000(5) *
Oscar Victor(3)........................................................ 35,400(5) *
All officers and directors as a group (9 persons)...................... 454,561(5) 7.2%
</TABLE>
- ------------------------
* Less than 1%
(1) Includes 380,600 shares held by Special Situations Fund III, L.P. (the
"Special Fund") and 125,100 shares held by Special Situations Cayman Fund,
L.P. (the "Cayman Fund"). AWM Investment Company, Inc. ("AWM") is the
partner of and investment adviser to the Cayman Fund and the general partner
of a partnership that is the general partner of the Special Fund. Messrs.
Austin W. Marxe and David M. Greenhouse are the principal owners of AWM.
Also includes 23,000 shares individually owned by Mr. Marxe.
(2) Perkins Capital Management, Inc. has sole dispositive power with respect
346,250 shares and sole voting power with respect to 117,500 shares.
(3) Serves as a director of the Company and has been nominated for reelection.
The address of each individual is 12500 Whitewater Drive, Minnetonka, MN
55343.
(4) Serves as an executive officer of the Company and appears in the Summary
Compensation Table below.
(5) Includes the following number of shares which could be purchased under stock
options exercisable within 60 days from the date hereof: Mr. Herman, 53,750
shares; Mr. Reznick, 22,700 shares; Mr. Garrett, 8,334 shares; Mr. Holland,
15,000 shares; Mr. Victor, 22,660 shares; and all officers and directors as
a group, 148,694 shares.
(6) Includes 15,000 shares held by the Robert and Anne Reznick Family Foundation
and 5,174 shares held in an irrevocable insurance trust. Mr. Reznick
disclaims beneficial ownership of such 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. The Board of Directors
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 will vote the proxies 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 his
willingness to serve, but should any nominee be unable to serve as a director,
the persons named as proxies 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--79
</TABLE>
Mr. Reznick is the Chairman of the Board of the Company. Mr. Reznick also
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--51
</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--53
</TABLE>
Mr. Garrett is Secretary to the Company and 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. 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--56 based consulting firm
</TABLE>
Mr. Holland is Chairman of the Board of Directors of Datakey, Inc., a
manufacturer of electronic security devices, and President and Chief Executive
Officer of Fargo Electronics, Inc., a manufacturer of photo-identification
printers. He previously served as President and Chief Executive Officer of
Datacard Corporation, a manufacturer of plastic transaction cards, embossing and
encoding equipment and transaction terminals, from 1982 to 1992.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Oscar Victor Private Investor
Director since 1986
Age--79
</TABLE>
Mr. Victor was formerly the President of Vic Research and Development
Incorporated, Minneapolis, MN, a consulting services firm, and Chief Executive
Officer of Vic Manufacturing Company, Minneapolis, MN, a manufacturer of dry
cleaning and air pollution control equipment. He is also a director of Fidelity
Bank and General Securities, Incorporated.
- --------------------------------------------------------------------------------
VOTE REQUIRED
The affirmative vote of a majority of the shares represented at the meeting
of the Company's Common Stock is required for the election of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH NOMINEE.
------------------------
The Board of Directors met six times during fiscal 1998. 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 seven times during fiscal 1998. 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 1998 and has met once since
September 30, 1998 to review the 1998 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 during fiscal
1998 of the Board of Directors and Board Committees on which he served.
The Company does not have a nominating committee or a compensation
committee.
During fiscal 1998, 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.
The Company's 1997 Stock Plan (the "1997 Plan") allows for the granting of
discretionary stock options and other stock-based awards to directors of the
Company, including non-employee directors. The 1997 Plan does not currently
provide for annual automatic grants to non-employee directors.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending September 30, 1998,
1997 and 1996, 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 $100,000 during 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
----------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
-------------------------- STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY($) BONUS($) AWARDS($) OPTIONS(#) COMPENSATION($)(3)
- ----------------------------------- ---- --------- -------- ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Jay A. Herman ..................... 1998 $ 201,703 $ 45,000 0 15,000(2) $5,000
President and Chief Executive 1997 193,975 35,000 $240,625(1) 0 4,500
Officer 1996 186,680 75,600 0 0 4,500
</TABLE>
- ------------------------
(1) Reflects a grant of 25,000 shares of restricted stock on October 1, 1996 on
which date the fair market value of the Company's stock was $9.625 per
share. This award vests over five years in equal increments.
(2) Reflects an option grant of 15,000 shares at $4.75 per share.
(3) Reflects 401(k) matching contributions under the Company's Profit Sharing
Plan.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to an option grant
to the Named Executive in fiscal 1998:
OPTION GRANT IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANT VALUE AT ASSUMED
---------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANTED(#) FISCAL YEAR PRICE DATE 5%($) 10%($)
- ------------------------------------------- ------------- ----------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jay A. Herman.............................. 15,000 15% $ 4.75 9/30/04 29,006 67,596
</TABLE>
The following table sets forth information with respect to the Named
Executive concerning the exercise of options during 1998 and unexercised options
held as of September 30, 1998:
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
SHARES ACQUIRED -------------------------- --------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- --------------- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jay A. Herman................ -- -- 50,000 27,500 -- --
</TABLE>
- ------------------------
(1) Based on a market price of $3.00 per share for the Company's Common Stock as
of September 30, 1998.
5
<PAGE>
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 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 1998.
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.
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.
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 and 1997 Plans allow 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 1998, the Company granted stock options to purchase an
aggregate of 97,500 shares of common stock to 10 executive officers and
employees of the Company.
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
1996-1998 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
four companies whose business is selling capital equipment to the industrial
printing industry: 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, 1993 and assuming
reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FISCAL YEAR ENDING SEPTEMBER 30,
<S> <C> <C> <C>
The Company Nasdaq Index Peer Group Index
1993 $100 $100 $100
1994 $220 $101 $107
1995 $290 $139 $131
1996 $385 $165 $65
1997 $190 $227 $95
1998 $117 $232 $68
</TABLE>
The performance graph above shall not be deemed incorporated by reference by
any statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934, and
shall not otherwise be deemed filed under such Acts.
7
<PAGE>
PROPOSAL 2
APPROVAL OF AUDITORS
Ernst & Young LLP, independent auditors, 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 2000 Annual Meeting of
Shareholders is expected to be held on or about March 16, 2000 and proxy
materials in connection with that meeting are expected to be mailed on or about
January 31, 2000. Shareholder proposals prepared in accordance with the proxy
rules must be received by the Company on or before October 4, 1999. In addition,
if the Company receives notice of a shareholder proposal after January 26, 2000,
such proposal will be considered untimely pursuant to the Company's Bylaws and
the persons named as proxies solicited for the Company's 2000 Annual Meeting may
exercise discretionary voting power with respect to such proposal.
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 1998, 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, 1998. A copy of Form 10-K, the Annual Report filed by the
Company with the Securities and Exchange Commission, will be furnished
8
<PAGE>
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
9
<PAGE>
FOR THE ANNUAL MEETING OF SHAREHOLDERS
MARCH 18, 1999
3:00 P.M.
CHECK TECHNOLOGY
CORPORATION
12500 WHITEWATER DRIVE
MINNETONKA, MN 55343
CHECK TECHNOLOGY CORPORATION
12500 WHITEWATER DRIVE, MINNETONKA, MN 55343 PROXY
- -------------------------------------------------------------------------------
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
MARCH 18, 1999
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 26, 1999, at the Annual
Meeting of Shareholders to be held in Minnetonka, Minnesota on March 18,
1999, or at any adjournment or adjournments thereof, hereby revoking all
former proxies:
SEE REVERSE FOR VOTING INSTRUCTIONS
<PAGE>
- PLEASE DETACH HERE -
<TABLE>
<S> <C> <C>
1. Election of Directors / / FOR all nominees / / WITHHOLD AUTHORITY
listed below (except as to vote for nominees
indicated to the contrary) / / listed below / /
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEES NAME IN THE LIST BELOW.)
Robert Reznick, Jay A. Herman, Thomas H. Garrett III, Gary R. Holland and
Oscar Victor
2. Proposal to ratify the appointment of Ernst & Young LLP as independent
auditors
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, upon any other matters coming before the meeting.
/ / FOR / / AGAINST / / ABSTAIN
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE MATTERS
SUMMARIZED ABOVE UNLESS OTHERWISE SPECIFIED.
Dated: , 1999
-------------------------
--------------------------------------------
--------------------------------------------
Signature(s) in Box
(If there are co-owners both must sign)
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.
