SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Tridex Corporation
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Tridex Corporation
61 Wilton Road
Westport, Connecticut 06880
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1999
Notice is hereby given that the Annual Meeting of Shareholders (the
"Annual Meeting") of Tridex Corporation (the "Company"), a Connecticut
corporation, will be held on Wednesday, May 19, 1999, at 10:00 am Eastern
Daylight Savings Time, at The Westport Inn, 1595 Post Road East, Westport,
Connecticut for the following purposes, all of which are more completely set
forth in the accompanying Proxy Statement:
(1) To consider and act upon a proposal to elect five Directors to serve
until the next Annual Meeting of Shareholders or until their
successors have been duly elected and qualified;
(2) To consider and act upon a proposal to ratify the selection of
PricewaterhouseCoopers LLP, Certified Public Accountants, as
independent public accountants of the Company for the year ending
December 31, 1999; and
(3) To receive the reports of Officers (without taking any action
thereon) and transact such other business as may legally come before
the Meeting.
Shareholders of record at the close of business on April 9, 1999 are
entitled to notice of and to vote at the Meeting. The transfer books will not be
closed for the Meeting.
The Company's Proxy Statement, Form of Proxy and Annual Report for the
year ended December 31, 1998 are submitted herewith.
By Order of the Board of Directors,
George T. Crandall
Secretary
Westport, Connecticut
April 19, 1999
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, THE COMPANY REQUESTS THAT YOU
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT
PURPOSE. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
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(Left Blank Intentionally)
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Tridex Corporation
61 Wilton Road
Westport, Connecticut 06880
----------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
----------------------------------------
SOLICITATION AND REVOCATION OF PROXY
The following information concerning the enclosed proxy and matters to be
acted upon under the authority of such proxy is furnished to shareholders of
Tridex Corporation (the "Company") in connection with the solicitation by the
Company of proxies to be voted at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on Wednesday, May 19, 1999.
Any shareholder that executes and returns the enclosed proxy has the power
to revoke the same anytime prior to it being voted.
The shares represented by the proxy will be voted unless the proxy is
mutilated or otherwise received in such form or at such time as to render it not
votable. The proxy is in ballot form so that a specification may be made to
grant or withhold authority to vote for the election of Directors and to
indicate separate approval or disapproval as to each of the other matters
presented to shareholders. All of the proposals will be presented by the Board
of Directors. The shares represented by the proxy will be voted for the election
of each of the Directors named thereon, unless authority to do so is withheld.
With respect to each proposal presented to shareholders other than the election
of Directors, the shares represented by the proxy will be voted in accordance
with the specifications made. Where a choice is not so specified, the shares
represented by the proxy will be voted "FOR" the proposals. The Proxy Committee
consists of Messrs. Seth M. Lukash, Paul J. Dunphy and Thomas R. Schwarz. A
majority of the shares entitled to vote, present in person or represented by
proxy, will constitute a quorum to transact business at the Annual Meeting. A
majority of the votes cast is required for the approval of the proposals to be
considered by the shareholders at the Annual Meeting.
This Proxy Statement is being mailed to shareholders on or about April 21,
1999.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the close of business on April 9, 1999, the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting, there were 6,368,289 shares of common stock issued and outstanding.
Each share entitles the holder to cast one vote on each matter submitted for
shareholder vote at the Annual Meeting.
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as to the beneficial ownership
of the Company's common stock as of April 9, 1999 for each person who is known
by the Company to own beneficially more than five percent of the Company's
issued and outstanding common stock, each person who is, or was, as of December
31, 1998, a Director, a nominee for Director, or an individual named in the
Summary Compensation Table, and all Directors and Executive Officers of the
Company as a group. The persons named in such table have furnished the
information set forth opposite their respective names:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership(1) Class(2)
- --------------------------------------------------------------- ---------------------------------------
<S> <C> <C>
Management Beneficial Owners
Seth M. Lukash ................................................ 578,837(3) 9.0%
Alvin Lukash .................................................. 44,666(4) *
Graham Y. Tanaka .............................................. 132,182(5) 2.1%
Paul J. Dunphy ................................................ 50,166(6) *
Thomas R. Schwarz ............................................. 15,166(6) *
Dennis J. Lewis ............................................... 136,014 2.1%
Gary H. German ................................................ 107,256(7) 1.7%
Paul C. Wolf .................................................. 94,916(7) 1.5%
Daniel A. Bergeron ............................................ 13,333(8) *
John MacWillie ................................................ 10,000(8) *
Raymond Mueller ............................................... 12,666(8) *
Samuel J. Villanti ............................................ 0 *
All Directors and Executive Officers
as a group (14 persons) ..................................... 1,270,535(9) 19.3%
Other Beneficial Owners
Paul J. Smith ................................................. 714,000 11.2%
85 North Hill Side Drive, North Myrtle
Beach, SC 29582
Massachusetts Mutual Life Insurance Company & Related Parties.. 1,085,714(10) 15.1%
1295 State Street,
Springfield, MA 01111
Dimensional Fund Advisors, Inc. ............................... 318,700(11) 5.0%
1299 Ocean Avenue, Santa Monica, CA 90401
</TABLE>
- ----------
(1) Except as otherwise indicated, each of the persons named in the table has
sole voting power and sole investment power with respect to the shares set
forth opposite his name.
(2) An asterisk denotes beneficial ownership of less than 1%.
(3) Includes 53,332 shares exercisable under the Company's 1997 Long Term
Incentive Plan (the "1997 Plan"). Mr. Lukash's address is care of the
Company at 61 Wilton Road, Westport, CT 06880.
(4) Includes 6,666 shares exercisable under the 1997 Plan. Mr. Lukash's
address is care of the Company at 61 Wilton Road, Westport, CT 06880.
(5) Includes 2,000 shares held of record by Mr. Tanaka's sons, and 7,666
shares exercisable under the Company's Non-employee Directors' Stock Plan
(the "Directors' Plan").
(6) Includes 7,666 shares exercisable under the Director's Plan.
(7) Includes 30,000 shares exercisable under the 1997 Plan.
(8) Consists entirely of shares exercisable under the 1997 Plan.
(9) Includes 198,329 shares exercisable under the 1997 Plan and 22,998 shares
exercisable under the Directors' Plan.
(10) On April 17, 1998, the Company issued and sold 285,714 shares of common
stock at $7.00 per share to Massachusetts Mutual Life Insurance Company,
MassMutual Corporate Investors, MassMutual Participation Investors and
MassMutual Corporate Value Partners Limited (the "MassMutual Investors").
As of May 27, 1998, the Company issued to the MassMutual Investors
warrants to purchase 350,931 shares of common stock at $7.00 per share. As
of March 26, 1999, in connection with an amendment and waiver of certain
financial covenants in their agreements with the Company, the MassMutual
Investors exchanged these 350,931 warrants for new warrants to purchase
800,000 shares of common stock at $2.03125, the closing price of the
common stock on March 26, 1999. The new warrants are exercisable until
April 17, 2008. With the issuance of the new warrants, the MassMutual
Investors beneficially own 15.1% of the Company's common stock.
(11) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 318,700 shares of
common stock as of December 31, 1998, all of which shares are held in
portfolios of DFA Investment Dimensions Group, Inc., a registered
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open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
Compliance with Section 16(a).
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and Executive Officers and persons who beneficially own more
than 10% of a registered class of the Company's equity securities ("10% Owners")
to file with the Securities and Exchange Commission ("SEC") and the Nasdaq Stock
Market reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Directors, Executive Officers and
10% Owners are required by SEC regulation to furnish the Company with copies of
all Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, or written representations that no other
reports were required for those persons, the Company believes that, during the
fiscal year ended December 31, 1998, all Section 16(a) filing requirements
applicable to Directors, Executive Officers and 10% Owners were complied with,
except that Messrs. A. Lukash and Lewis each filed one report two months late,
Messrs. Tanaka and Villanti each filed one report one month late, Messrs. S.
Lukash and Bergeron each filed one report three days late, and Mr. Schwarz filed
one report two days late and Messrs. Tanaka and Dunphy each filed one report one
day late.
ELECTION OF DIRECTORS
At the Annual Meeting, five persons are to be elected to hold office as
Directors, to serve until the next Annual Meeting or until their successors are
duly elected and qualified. In the absence of instructions to the contrary, the
persons named in the enclosed form of proxy as members of the Proxy Committee
will vote such proxy "FOR" fixing the number of Directors at five and the
election of the five nominees named below. Should any of the nominees become
unavailable, which is not anticipated, it is intended that proxies will be voted
for the election of such other person as the Board of Directors may recommend in
place of such nominee.
Seth M. Lukash
Paul J. Dunphy
Dennis J. Lewis
Graham Y. Tanaka
Thomas R. Schwarz
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS
SETH M. LUKASH, 52, has been a senior executive officer of the Company
since 1977 and has been a Director since 1979. He has served as Chairman of the
Board of Directors of the Company since November 1988, Chief Executive Officer
since August 1987 and President and Chief Operating Officer since June 1989. Mr.
Lukash previously served as President of the Company from September 1983 to
August 1988 and as Chief Operating Officer from September 1983 to August 1987.
Mr. Lukash is the son of Alvin Lukash, Director Emeritus of the Company.
PAUL J. DUNPHY, 79, has been a Director of the Company since 1989. Mr.
Dunphy has been a management consultant from 1988 until the present. Mr. Dunphy
was Chairman of the Board, Chief Executive Officer and President of Towle
Manufacturing Company, from 1985 through 1988 and was Executive Vice President
of Anchor Hocking, a glass and metal manufacturer, from 1970 through 1984. Mr.
Dunphy is a Director of Midwest Fabricating Co. and Four Johns Corporation. He
also is a member of the Board of Trustees of Mt. Ida College, the President's
Advisory Council of Bentley College and the Executive Advisory Board for Ohio
University.
GRAHAM Y. TANAKA, 51, has been a Director of the Company since 1988. Mr.
Tanaka has been President of Tanaka Capital Management, Inc., an investment
management firm, since 1986. From 1980 to 1986, Mr. Tanaka served as Chairman of
Milbank, Tanaka & Associates. Mr. Tanaka is a director of TransAct Technologies
Incorporated ("TransAct"), a manufacturer of transaction based printers which
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was a subsidiary of the Company through March 31, 1997. Mr. Tanaka is also a
member of the Board of Directors of the Japanese American National Museum.
THOMAS R. SCHWARZ, 62, has been a Director of the Company since 1995. Mr.
Schwarz was Chairman of Grossman's Inc., a retailer of building materials, from
1990 to 1994, when he retired. Mr. Schwarz was President, Chief Operating
Officer and a director of Dunkin' Donuts Incorporated, a food service company,
from 1980 to 1990. He is the Chairman of the Board of Directors of TransAct and
a director of Lebhar-Friedman Publishing Company and Foilmark, Inc., a
manufacturer of hot stamping equipment and supplies. Mr. Schwarz was a board
member of The Timberland Company, an overseer of WGBH Educational Foundation,
Inc. (New England Public Broadcasting), the David Littman Foundation, The Walnut
Hill School and co-chairman of the Inner City Scholarship Fund.
DENNIS J. LEWIS, 44, has been a Director of the Company since 1997. Mr.
Lewis was President of Ultimate Technology Corporation ("Ultimate"), a wholly
owned subsidiary of the Company, from its acquisition by the Company in 1993
until September 30, 1998. Prior to the acquisition, Mr. Lewis served as
Ultimate's President, Chief Executive Officer and Director since 1988. Mr. Lewis
founded Serv Tech, Inc. and served as its Chairman and Chief Executive Officer
from 1981 to 1983. Mr. Lewis has held senior management positions related to the
sales, engineering and service of computer peripherals with Add Electronics, RG
Engineering, Naum Brothers and Digital Equipment Corporation.
INFORMATION CONCERNING NON-DIRECTOR EXECUTIVE OFFICERS
DANIEL A. BERGERON, 39, has been a Vice President of the Company since
March 19, 1998 and Chief Financial Officer of the Company since April 1, 1998.
Prior to joining Tridex, Mr. Bergeron served as Vice President and Chief
Financial Officer of Dorr-Oliver Incorporated, an international manufacturing
and engineering company. Prior to 1987, Mr. Bergeron held various financial
management positions with Akzo America Inc. and United Brands Company.
JOHN MACWILLIE, 50, joined Tridex in May 1998 as Vice President of
Technology and Strategic Business Development. Prior to joining Tridex, Mr.
MacWillie was a Vice President of the Gartner Group from March 1996 to May 1998
and was Director of Strategic Business Development at Symantec Corporation from
1993 to 1996. Previously, he was Vice President of Marketing at JYACC, Inc. and
Chief Technology Officer at Telemetrics, Inc.
RAYMOND J. MUELLER, 39, was appointed President of Progressive on April
17, 1998 upon its acquisition by Tridex. He joined Progressive in 1996 as
manager of the Denver branch office and was Executive Vice President since
October 1997. Prior to joining Progressive, Mr. Mueller was Vice President and
Chief Information Officer of Richfield Hospitality Services, Inc. from 1994 to
1996 and was President of Tradeware Technologies, Inc. from 1980 to 1994.
SAMUEL VILLANTI, 34, was appointed President of Ultimate on October 12,
1998. Prior to joining Ultimate, Mr. Villanti was General Manager of Axiohm
IPB's engineering and manufacturing facility in Ithaca, NY from March 1998 to
October 1998. He was employed in the management consulting practice of Price
Waterhouse LLP from 1990 to 1995. Previously, he held various management
positions with NCR Corporation.
GARY GERMAN, 43, has been Vice President of Sales and Marketing of
Ultimate since 1992. He joined Ultimate in 1991 as Director of Sales and
Marketing. Mr. German has held senior sales positions with Apollo Computer,
Prime Computer and MIPS Computer Systems.
PAUL WOLF, 37, has been Vice President of Engineering of Ultimate since
1993. He joined Ultimate in 1990 as Director of Engineering. Mr. Wolf has
completed quality designs for companies such as Hughes Network Systems, Federal
Express and Tokheim Security Pacific.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to 1997, the Company made a personal loan to Seth M. Lukash,
Chairman of the Board, President, Chief Executive Officer, Chief Operating
Officer and a Director of the Company. During 1998, the highest outstanding
balance of the loan to Seth M. Lukash was $125,000. The loan is evidenced by a
demand note and bears interest at an annual rate equal to the rate charged by
the Company's senior lender on its line of credit. The Company's Board of
Directors has agreed to defer payment of the principal balance of the loan until
after December 31, 1999. Interest on the loan is paid quarterly. As of April 9,
1999 the principal amount outstanding under the loan was $125,000.
On March 14, 1997, the Company accepted a note in the amount of
$801,375.00 from Seth M. Lukash in payment of the exercise price of options and
warrants. The note is a full recourse note, due June 30, 1999, bearing interest
payable quarterly at 7.577% and secured by a pledge of shares acquired through
the exercise of the options and warrants.
Alvin Lukash and the Company entered into a Retirement Agreement as of
December 31, 1995. Pursuant to the agreement, as amended in 1996, the Company
provides Mr. Lukash with a lifetime retirement benefit of $100,000 per year, a
$400 per month automobile allowance, an annual life insurance premium ($7,874 in
1998) and health insurance coverage for Mr. Lukash under the Company's health
insurance plan. If a change of control of the Company occurs, the Company will
establish a trust and immediately deposit funds with the trustee equal to the
present value of the remaining retirement benefit.
On July 19, 1995, the Board of Directors of the Company appointed Mr.
Alvin Lukash to the position of Director Emeritus. In that capacity, Mr. Lukash
is entitled to attend and participate in all meetings of the Board of Directors,
but he is not entitled to vote as a member of the Board. Mr. Lukash is not
compensated for his services as a Director Emeritus, but is reimbursed for
expenses incurred to attend Board of Directors meetings.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During 1998, the Board of Directors held eleven meetings. Each incumbent
Director attended more than 75% of (a) the total number of meetings of the Board
of Directors, and (b) the total number of meetings of all committees of the
Board of Directors on which he served.
The Board of Directors has an Audit Committee, which held four meetings
during 1998. The Audit Committee is comprised of Messrs. Paul J. Dunphy,
Chairman, Graham Y. Tanaka and Thomas R. Schwarz. The functions of the Audit
Committee are to participate in the selection and review the findings of
independent public accountants, review internal audit activities, consider
accounting policies selected by management and review internal accounting
controls and such other matters relating to the Company's financial and
accounting practices as such Committee deems appropriate.
The Board of Directors has a Compensation and Stock Option Committee
comprised of Messrs. Thomas R. Schwarz, Chairman, Graham Y. Tanaka and Paul J.
Dunphy, which has the responsibility for approving the compensation arrangements
for senior management of the Company. The Compensation and Stock Option
Committee approves the adoption of any compensation plans in which Executive
Officers and Directors of the Company are eligible to participate, as well as
the granting of stock options or other benefits under such plans and under the
Company's 1997 Plan and 1998 Plan. The Compensation and Stock Option Committee
held six meetings during 1998.
The Board of Directors has a Nominating Committee comprised of Messrs.
Graham Y. Tanaka, Chairman, Paul J. Dunphy and Thomas R. Schwarz. The Nominating
Committee has the responsibility for recommending to the Board of Directors
nominees for election to the Board. The Nominating Committee will not consider
nominees recommended by shareholders. The Nominating Committee held one meeting
during 1998.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
Pursuant to requirements under federal securities laws, the Compensation
and Stock Option Committee of the Company is required to provide a report on the
compensation and benefits provided to the Company's Executive Officers. The
following report describes the function and composition of the Compensation and
Stock Option Committee, sets forth the compensation policies and goals of the
Company, and provides a description of how compensation for executive officers
is determined.
The Compensation and Stock Option Committee
There are three members of the Compensation and Stock Option Committee,
all of whom are outside directors: Thomas R. Schwarz, Chairman, Graham Y. Tanaka
and Paul J. Dunphy. The Compensation and Stock Option Committee: (a) establishes
the general compensation policies of the Company; (b) approves the hiring and
firing of all officers, subsidiary and division Presidents and all staff
reporting directly to the Chief Executive Officer of the Company; and (c)
approves the compensation plans and specific compensation levels for all
Executive Officers, including subsidiary and division Presidents and all staff
reporting directly to the Chief Executive Officer of the Company, except that
the compensation of any employee director is determined by the full Board based
on the recommendation of the Compensation and Stock Option Committee. The
Compensation and Stock Option Committee also approves the issuance of all
options to employees of the Company and its subsidiaries under the Company's
1997 Plan and 1998 Plan. The Compensation and Stock Option Committee met six
times during the year.
Compensation Policies and Goals
The primary goals of the Company's compensation policies are to help
retain, motivate and reward management of the Company and its subsidiaries,
while, at the same time, aligning their interests closely with those of the
Company and its shareholders. The Company seeks to attract and retain management
by offering a competitive total compensation package. The Company also believes
it is important to the retention of its management that it provide benefits
which accrue to the benefit of, and provide security to, its management over the
long term. To align the interests of management more closely with those of the
Company as a whole and reward individual initiative and effort, the Company
seeks to promote performance-based compensation where contribution to the
Company as a whole is rewarded. Through the use of performance-based plans that
reward attainment of subsidiary, division or Company goals, the Company seeks to
foster an attitude of teamwork. The Company also believes that the use of equity
ownership is an important tool to ensure that the efforts of management are
consistent with the objectives of its shareholders and through the use of stock
options seeks to promote increased ownership by management of the Company.
The Company and the Compensation and Stock Option Committee have tried to
achieve the above goals utilizing publicly available information regarding
competitive compensation. The Compensation and Stock Option Committee retains an
independent consultant to ensure that compensation for the Company's management
is competitive, meets the above-stated objectives and is consistent for all
members of management of the Company and its subsidiaries.
Compensation Components
At present, the compensation of the executive officers of the Company
consists of a combination of salary, cash bonuses, stock options and
participation in the Company's 401(k) plan, as well as the provision of health
and other insurance benefits typically offered to corporate executives. Several
of the executive officers of the Company's subsidiaries are parties to
employment agreements entered into at the time of the Company's purchase of the
subsidiaries. Several other executive officers are parties to agreements with
the Company that provide for severance payments under certain circumstances.
These agreements are described under "Employment Contracts, Termination of
Employment and Change-In-Control Arrangements" for the officers listed in the
Summary Compensation Table.
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Salaries: In general, base salaries were fixed at the beginning of the year for
the subsequent twelve months based on the Compensation and Stock Option
Committee's assessment of competitive base salaries. In 1998, the annual base
salary of Seth M. Lukash, Chairman, President, Chief Executive Officer and Chief
Operating Officer of the Company, was increased from $270,000 to $282,000.
Cash Bonuses: The Company maintains an incentive compensation plan for all
salaried employees of the Company and its subsidiaries, including key
executives, which provides for the payment of cash bonuses. Under the plan, an
incentive target, as well as individual goals and objectives, are fixed for each
employee at the beginning of the year and bonuses are paid shortly after the end
of the year. In order to earn any incentive compensation under the plan, certain
financial goals, including gross profit, operating profit, return on capital
employed and sales, must be met. The percentage of the incentive target to be
paid varies based on the level of attainment of the financial goals; the
incentive target to be paid ranges from 50% to 150%, except that for
corporate-based participants, the range is 50% to 100%. Other components of the
award calculation include the individual incentive target, which ranges from 20%
to 50% of base salary for key employees, and a rating of the participants
performance versus individual objectives during the plan period.
For 1998, the goals for Mr. Lukash related principally to the attainment of a
specific operating profit level and the development of various strategic
acquisition and growth plans. His target bonus was 50% of base salary. No bonus
was earned in 1998. For 1999, Mr. Lukash's target bonus remains 50% of his base
salary.
For 1998, bonuses in varying amounts were earned by plan participants at
Ultimate.
Stock Options: Under the Company's 1998 and 1997 Plans, options are granted by
the Compensation and Stock Option Committee. Under guidelines adopted by the
Committee in 1995, eligible employees (certain classifications of salaried
employees of the Company and its subsidiaries who have been determined by the
Committee to qualify for an incentive of equity ownership) are granted an
initial award on their date of hiring for a fixed number of shares depending on
their level, which vests over three years. In each year following the initial
award, eligible employees may be granted an annual award in varying amounts
depending on their level and individual performance.
During 1998, a total of 170,000 options were granted to Executive Officers of
the Company, none of which was granted to Seth M. Lukash.
Other Benefit Plans: Executive Officers of the Company may participate in the
nondiscriminatory Tridex Corporation 401(k) Retirement Plan. No decisions with
respect to this plan are made by the Compensation and Stock Option Committee.
The Committee strives to assure that the executive compensation serves the
best interests of the shareholders and the Company.
Compensation and Stock Option Committee
Thomas R. Schwarz, Chairman
Graham Y. Tanaka
Paul J. Dunphy
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Summary Compensation Table
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the four most highly compensated Executive Officers
whose compensation exceeded $100,000 for 1998 and for each of the prior two
fiscal years. Mr. Bergeron joined the Company in March 1998 with an annualized
salary of $150,000. Raymond J. Mueller joined the Company as President of
Progressive in April 1998 with an annualized salary of $160,000. John MacWillie
joined the Company as Vice President of Technology and Strategic Business
Development in May 1998 with an annualized salary of $150,000. Samuel J.
Villanti joined the Company as President of Ultimate on October 12, 1998 with an
annualized salary of $145,000. It is anticipated that Messrs. MacWillie and
Villanti will appear in the following table in subsequent years.
<TABLE>
<CAPTION>
Annual Compensation (1) Long Term Compensation Awards
-------------------------------- -----------------------------
Stock All Other
Name and Year Salary Bonus(2) Options(3) Compensation(4)
Principal Position Ended ($) ($) (#) ($)
- ----------------------- -------- -------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Seth M. Lukash 12/31/98 $276,000 0 0 $ 4,170
Chairman of the Board, 12/31/97 $270,000 $135,000 90,000 $ 1,055
President, Chief 12/31/96 $270,000 $135,000 30,000 $ 0
Executive Officer and
Chief Operating Officer
Dennis J. Lewis 12/31/98 $118,972 $ 0 0 $311,850(5)
President, Ultimate 12/31/97 $144,905 $ 6,009 75,000 $378,063(5)
Technology Corporation 12/31/96 $144,000 $ 43,200 0 $221,720(6)
Gary H. German 12/31/98 $135,375 $ 11,824 0 $198,189(5)
Vice President, Sales 12/31/97 $132,598 $ 12,917 45,000 $239,833(5)
and Marketing, Ultimate 12/31/96 $129,000 $ 32,250 0 $155,976(6)
Technology Corporation
Paul C. Wolf 12/31/98 $123,183 $ 10,724 0 $170,312(5)
Vice President, 12/31/97 $120,713 $ 16,232 45,000 $206,820(5)
Engineering, Ultimate 12/31/96 $117,000 $ 23,400 0 $ 83,800(6)
Technology Corporation
Daniel A. Bergeron 12/31/98 $117,692 $ 0 60,000 $ 563
Vice President and
Chief Financial
Officer, Tridex
Corporation
Raymond J. Mueller 12/31/98 $113,333 $ 0 35,000 $ 2,267
President, Progressive
Software, Inc.
</TABLE>
- ----------
(1) Neither the Chief Executive Officer nor any of the other Executive
Officers named in the table received perquisites or other personal
benefits in an amount which exceeded 10% of their salary plus bonus during
1998.
(2) The bonus amounts are payable pursuant to the Company's discretionary
incentive plan described more fully in the Report of the Compensation and
Stock Option Committee of the Board of Directors.
(3) Options granted in 1998 and 1997 were granted under the Company's 1997
Plan. Options granted in prior years were granted under the Company's 1989
Long Term Incentive Plan.
(4) Unless otherwise indicated, these amounts consist entirely of Company
contributions under the Company's 401(k) Plan.
(5) During 1998, Messrs. Lewis, German and Wolf received 11,500 shares, 7,250
shares and 6,250 shares, respectively, of the Company's common stock under
the Stock Incentive Compensation Agreement. See "Employment Contracts,
Termination of Employment and Change-In-Control Arrangements."
Compensation in 1998 includes $311,804, $196,567 and $169,453,
respectively, applicable to the issuance of such shares under the
agreement. During 1997, comparable receipts were 23,000 shares, 14,500
shares and 12,500 shares, respectively, and comparable amounts of
compensation were $378,063, $238,344 and $205,469, respectively.
(6) For year ended December 31, 1996, Messrs. Lewis, German and Wolf earned
performance-based compensation of $220,765 $154,535 and $82,787,
respectively, under an Employee Performance Compensation Agreement among
Tridex, Ultimate, and Messrs. Lewis, German and Wolf.
8
<PAGE>
Option Grants in 1998
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Percent of Potential Realizable
Total Value at Assumed
Options Exercise Annual Rate of Stock
Granted to or Price Appreciation for
Employees Base Option Term (2)
Options in Price Expiration ----------------------
Name Granted(1) the Year ($/share) Date 5% 10%
- ---- --------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Daniel A. Bergeron 40,000 7.9% $ 7.125 3/19/08 $179,200 $454,200
20,000 3.9% $ 3.3125 11/13/08 $ 41,700 $105,600
Raymond J. Mueller 35,000 6.9% $ 7.00 4/17/08 $154,000 $390,500
</TABLE>
- ----------
(1) All options were granted under the Company's 1997 Plan. In general,
options granted under the 1997 Plan are at an exercise price equal to 100%
of the fair market value of the common stock on the date of grant, expire
ten years from the date of grant, and become exercisable on the first
through third anniversaries of the date of grant.
(2) The potential realizable value portion of the foregoing table illustrates
the value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compared
rates of appreciation on the Company's common stock shares over the term
of the options. This hypothetical value is based entirely on assumed
annual growth rates of 5% and 10% in the value of the Company's stock
price over the term of the options granted in 1998. The assumed rates of
growth were selected by the Securities and Exchange Commission for
illustration purposes only, and are not intended to predict future stock
prices, which will depend upon market conditions and the Company's future
performance and prospects. These numbers do not take into account
provisions of certain options providing for termination of the option
following termination of employment, non-transferability or vesting over
various periods.
Aggregated Option Exercises in 1998 and Values at December 31, 1998
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options At Options At
Shares December 31, 1998 December 31, 1998 ($)(1)
Acquired Value ------------------------------- ----------------------------
Name On Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Seth M. Lukash -- $ -- 26,666 80,000 -- $ --
Dennis J. Lewis 25,000 $120,313 -- -- -- $ --
Gary H. German -- $ -- 15,000 45,000 938 $ 1,875
Paul C. Wolf -- $ -- 15,000 45,000 938 $ 1,875
Daniel A. Bergeron -- $ -- -- 60,000 $
Raymond J. Mueller -- $ -- -- 35,000 $
</TABLE>
- ----------
(1) The closing price for the Company's common stock as reported by the Nasdaq
Stock Market on December 31, 1998 was $2.875. The Value of Unexercised
In-The-Money Options is calculated on the basis of the difference between
the option price and $2.875 multiplied by the number of shares of common
stock underlying the option.
9
<PAGE>
Employment Contracts, Termination of Employment and Change-In-Control
Arrangements.
Under the terms of an Employment Agreement dated December 2, 1996 between
Seth M. Lukash and the Company, Mr. Lukash serves as Chairman and Chief
Executive Officer for a term of two years. Under the terms of the agreement, if
Mr. Lukash's employment is terminated other than for cause Mr. Lukash shall be
entitled to continue to receive his then current annual base salary, his annual
target bonus for the year of termination, group insurance, and other benefits
for a period of two years payable in monthly installments. If Mr. Lukash's
employment is terminated, other than for cause, within one year of a change in
control of the Company, Mr. Lukash shall be entitled to receive his then current
annual base salary and annual target bonus for a period of three years, payable
in monthly installments, and continuation of all benefits. In addition, the
Company shall cause immediate vesting of all options and rights under the
Company's stock plans.
Under terms of separate Employment Agreements between the Company and each
of Daniel A. Bergeron and John MacWillie, in the case of a change of control
with a terminating event, such officer shall be entitled to receive his then
current annual base salary and annual target bonus for a period to two years,
payable in monthly installments, and continuation of all benefits. In addition,
the Company shall cause immediate vesting of all options and rights under the
Company's stock plans.
Under terms of separate Employment Agreements between the Company and each
of Raymond J. Mueller and Samuel J. Villanti, if their employment is terminated,
other than for cause, within one year of a change in control of the Company, the
Company shall pay in cash in monthly installments an amount equal to their
annual base salary and annual target bonus.
Under the terms of separate Employment Agreements between Ultimate and
each of Gary H. German and Paul C. Wolf, if any such officers' employment is
terminated, other than for cause, he shall be entitled to receive, for twelve
months following the date of termination, the salary and benefits which would
otherwise have been payable to him.
On March 10, 1997, Mr. Lewis, Mr. German and Mr. Wolf, who were
shareholders of Ultimate prior to the acquisition (collectively the "Ultimate
Officers"), entered into a Stock Incentive Compensation Agreement (the "SIC
Agreement") which terminated the Employee Performance Compensation Agreement
entered into among the Ultimate Officers, Ultimate and the Company in January
1993, when the Company acquired Ultimate. Under the terms of the SIC Agreement,
100,000 shares of the Company's common stock were issued to the Ultimate
Officers, of which 50,000 shares were pledged to Ultimate (the "Pledged Stock")
pursuant to a pledge agreement, which expires upon the satisfaction of future
service obligations. On January 2, 1998 the Company released to the Ultimate
Officers 25,000 shares from escrow. Effective on September 30, 1998, Mr. Lewis
voluntarily terminated his employment with Ultimate. In accordance with the
provisions of the SIC Agreement, Mr. Lewis forfeited 11,500 shares. The balance
of the Pledged Stock was released to Messrs. German and Wolf in January 1999.
Compensation of Directors
During 1998, each outside Director of the Company received as compensation
for services rendered and expenses incurred (a) $2,000 for each fiscal quarter
served as Director, (b) $750 for each Board of Directors' meeting attended and
(c) $300 for each Board of Directors' Committee meeting attended. Directors
receive $250 for each telephonic meeting, and Chairmen of Committees receive
$600 for each committee meeting attended.
10
<PAGE>
CORPORATE PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total return
on the Company's common stock from April 2, 1994 through December 31, 1998 with
the CRSP Total Return Index for the NASDAQ Stock Market (US) and the NASDAQ
Computer Manufacturer Stocks. The graph assumes that $100 was invested on April
2, 1994 in each of the Company's common stock, the CRSP Total Return Index for
the NASDAQ Stock Market (US) and the NASDAQ Computer Manufacturer Stocks and
that all dividends were reinvested.
Comparison of Five Year Cumulative Total Return Among
Tridex Corporation Common Stock,
the CRSP Total Return Index for the NASDAQ Stock Market (US),
and the NASDAQ Computer Manufacturer Stocks
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
4/2/94 4/1/95 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Tridex Corporation Common Stock $100.00 $85.67 $100.00 $183.86 $340.67 $200.91
CRSP Total Return Index for the
NASDAQ Stock Market (US) 100.00 111.25 144.32 177.47 217.73 306.07
NASDAQ Computer Manufacturer Stocks 100.00 119.41 178.40 239.66 289.34 629.36
</TABLE>
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
At the Annual Meeting, approval and ratification of the Board of
Directors' selection of PricewaterhouseCoopers LLP as independent public
accountants to perform the audit of the financial statements of the Company and
its subsidiaries for the year ending December 31, 1999 will be considered. The
Board of Directors recommends the approval of Price Waterhouse LLP. Proxies
solicited by the Company will be voted "FOR" this approval unless shareholders
specify a contrary choice in their proxies. Representatives of the firm of Price
Waterhouse LLP are expected to be present at the Annual Meeting to respond to
appropriate questions and will have the opportunity to make a statement if they
so desire.
11
<PAGE>
SECURITY HOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals for inclusion in the 2000 Proxy Statement and form
of proxy for the Annual Meeting of Shareholders to be held in 2000 must be
received by the Secretary of the Company on or before January 18, 2000. If the
date of the next Annual Meeting is subsequently advanced by more than thirty
calendar days or delayed by more than ninety calendar days from the date such
meeting is scheduled to be held under the Company's By-laws, the Company will
inform shareholders of such change and the date by which proposals of
shareholders must be received. It is suggested that such proposals be sent by
Certified Mail-Return Receipt Requested.
ANNUAL REPORT
A COPY OF THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT
ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, WILL
BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST. REQUESTS
SHOULD BE ADDRESSED TO: TRIDEX CORPORATION, SHAREHOLDER RELATIONS DEPARTMENT, 61
WILTON ROAD, WESTPORT, CONNECTICUT 06880.
GENERAL
The accompanying proxy will be voted as specified thereon. Unless
otherwise specified, proxies will be voted for the slate of Directors nominated
by the Nominating Committee as set forth in this Proxy Statement, and for each
of the other matters to be presented to the shareholders at the Annual Meeting
as set forth in this Proxy Statement. A majority of the votes cast is required
for the approval of the proposals to be considered by the shareholders at the
Annual Meeting. Abstentions are treated as present and entitled to vote and
therefore have the effect of a vote against a matter. A broker non-vote on a
matter is considered not entitled to vote on the matter and is not counted in
determining whether a matter requiring approval of a majority of the shares
present and entitled to vote has been approved.
The Board of Directors is not aware of any matter which is to be presented
for action at the Annual Meeting other than the matters set forth herein. Should
any other matter arise that requires a vote of the shareholders, the proxies
confer upon the Proxy Committee the authority to vote in respect of any such
other matter in accordance with the recommendation of management.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company may use
their personal efforts, without additional compensation, to obtain proxies. The
Company will also request persons, firms and corporations holding shares in
their names, or owned by others, to send this proxy material to and obtain
proxies from such beneficial owners and will reimburse such holders for their
reasonable expenses in doing so.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
April 19, 1999
12
<PAGE>
TRIDEX CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD, MAY 19, 1999
This proxy is solicited on behalf of the Board of Directors
of Tridex Corporation
The undersigned shareholder of Tridex Corporation, Westport, Connecticut,
does hereby nominate, constitute and appoint Seth M. Lukash, Paul J. Dunphy and
Thomas R. Schwarz, or any of them, with full power to act alone, my true and
lawful attorney-in-fact with full power of substitution, for me and in my name,
place and stead to vote all of the Common Stock of Tridex Corporation standing
in my name on its books on April 9, 1999, at the Annual Meeting of its
shareholders to be held at The Westport Inn, Westport, Connecticut, on May 19,
1999 at 10:00 a.m., or at any adjournment thereof, with all powers the
undersigned would posses if personally present as follows:
This proxy, when properly executed, will be voted for the undersigned as
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted for Proposals 1, 2 and 3.
(To be signed on Reverse Side)
<PAGE>
|X| Please mark your votes as in this example.
FOR AGAINST
1. ELECTION OF DIRECTORS |_| |_|
Nominees: Seth M. Lukash
Paul J. Dunphy
Dennis J. Lewis
Thomas R. Schwarz
Graham Y. Tanaka
For, except vote withheld from the following nominee(s):
FOR AGAINST ABSTAIN
2. APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS |_| |_| |_|
A proposal to approve and ratify the selection of PricewaterhouseCoopers
LLP as independent public accounts of Tridex Corporation for the fiscal
year ending December 31, 1999.
3. In their discretion, Seth M. Lukash, Paul J. Dunphy and Thomas R. Schwarz,
or any of them are authorized to vote upon such other business as may
properly come before the meeting.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.
SIGNATURES:________________ DATE:______ SIGNATURES:________________ DATE:______
Note: Please sign exactly as name appears on the mailing label. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If signing
on behalf of a corporation, please sign the full corporate name by president or
other authorized officer. If signing on behalf of a partnership, please sign the
partnership name by authorized person.
