ATS MONEY SYSTEMS, INC.
25 Rockwood Place
Englewood, New Jersey 07631
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 30, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of ATS Money Systems, Inc. (the "Company"),
will be held at The Clinton Inn, 145 Dean Drive, Tenafly,
New Jersey 07670, at 5:00 p.m., on Friday, May 30, 1997, for
the following purposes:
1. To elect four directors for a term of one year and
until their respective successors are elected and qualified;
2. To approve amendments to the Company's Common Stock
Incentive Plan;
3. To approve amendments to the Company's 1995 Director
Stock Plan;
4. To ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1997; and
5. To transact such other business as properly may come
before the meeting or any adjournment or adjournments
thereof.
The Board of Directors has fixed the close of business on April 1, 1997
as the record date for determining stockholders entitled to receive
notice of the Annual Meeting and to vote at such meeting or any
adjournment or adjournments thereof.
The Board of Directors appreciates and welcomes stockholder
participation in the Company's affairs. Whether or not you plan to attend
the Annual Meeting, please vote by completing, signing and dating the enclosed
proxy and returning it promptly to the Company in the enclosed
self-addressed, postage prepaid envelope. If you attend the meeting, you
may revoke your proxy and vote your shares in person.
By Order of the Board of
Directors,
Fred Den,
Secretary
April 7, 1997
ATS MONEY SYSTEMS, INC.
25 Rockwood Place
Englewood, New Jersey 07631
PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS
General Information
This Proxy Statement is furnished to stockholders of
ATS Money Systems, Inc., a Nevada corporation (the
"Company"), in connection with the solicitation of proxies
by the Board of Directors of the Company (the "Board of
Directors") for use at the Annual Meeting of Stockholders of
the Company to be held at 5:00 p.m. on Friday, May 30, 1997
at The Clinton Inn, 145 Dean Drive, Tenafly, New Jersey
07670, and any adjournment or adjournments thereof (the
"Annual Meeting"), for the purposes set forth in the
accompanying Notice of Annual Meeting. This Proxy
Statement, the attached Notice of Annual Meeting, the
accompanying form of proxy, together with the Annual Report
to Stockholders of the Company for the fiscal year ended
December 31, 1996, are first being sent to stockholders of
the Company on or about April 29, 1997.
The record date for stockholders of the Company
entitled to notice of, and to vote at, the Annual Meeting is
the close of business on April 1, 1997 (the "Record Date").
On the Record Date, there were issued and outstanding
5,791,911 shares of the Company's common stock, par value
$.001 per share (the "Common Stock"). All of such shares
are of one class, with equal voting rights, and each holder
thereof is entitled to one vote on all matters voted on at
the Annual Meeting for each share registered in such
holder's name. Presence in person or by proxy of holders of
2,895,956 shares of Common Stock will constitute a quorum at
the Annual Meeting. Assuming a quorum is present (i) the
affirmative vote by the holders of a plurality of the shares
represented at the Annual Meeting and entitled to vote will
be required to act on the election of directors and (ii) the
affirmative vote by the holders of a majority of the shares
represented at the Annual Meeting and entitled to vote will
be required to act on all other matters to come before the
Annual Meeting, including approval of amendments to the
Company's Common Stock Incentive Plan (the "Plan"), approval
of amendments to the Company's 1995 Director Stock Plan (the
"Director Plan") and the ratification of the selection of
Deloitte & Touche LLP as independent auditors for the
current fiscal year.
In accordance with applicable law, all stockholders of
record on the Record Date are entitled to receive notice of,
and to vote at, the Annual Meeting. If a stockholder,
present in person or by proxy, abstains on any matter, the
stockholder's shares will not be voted on such matter.
Thus, an abstention from voting on a matter has the same
legal effect as a vote "against" the matter, even though a
stockholder may interpret such action differently. A proxy
submitted by a stockholder may indicate that all or a
portion of the shares represented by such proxy are not
being voted by such stockholder with respect to a particular
matter. This could occur, for example, when a broker is not
permitted to vote shares of Common Stock held in street name
on certain matters in the absence of instructions from the
beneficial owner of the shares. The shares subject to any
such proxy which are not being voted with respect to a
particular matter (the "non-voted shares") will be
considered shares not present and entitled to vote on such
matter, although such shares may be considered present and
entitled to vote for other purposes and will count for
purposes of determining the presence of a quorum. (Shares
voted to abstain as to a particular matter will not be
considered non-voted shares).
A proxy, in the accompanying form, which is properly
executed, duly returned to the Company and not revoked will
be voted in accordance with the instructions contained
thereon. If no specific instructions are indicated on the
proxy, the shares represented thereby will be voted FOR
(i) the election of the persons nominated herein as
directors, (ii) the amendments to the Plan, (iii) the
amendments to the Director Plan, and (iv) the ratification
of the selection of Deloitte & Touche LLP as the Company's
independent auditors for the current fiscal year; as well as
FOR the transaction of such other business as properly may
come before the Annual Meeting.
Each proxy granted may be revoked by the person
granting it at any time (i) by giving written notice to such
effect to the Secretary of the Company, (ii) by execution
and delivery of a proxy bearing a later date, or (iii) by
attendance and voting in person at the Annual Meeting;
except as to any matter upon which, prior to such
revocation, a vote shall have been cast at the Annual
Meeting pursuant to the authority conferred by such proxy.
The mere presence at the Annual Meeting of a person
appointing a proxy does not revoke the appointment.
Security Ownership of Certain Beneficial Owners and
Management as a Group
Set forth below is information, as of the Record Date,
with respect to the beneficial ownership of the Common Stock
by (i) each person or group who is known by the Company to
be the beneficial owner of 5% or more of the outstanding
Common Stock, (ii) each of the directors of the Company
(which directors also constitute the nominees for election
as directors at the Annual Meeting), (iii) each of the
executive officers of the Company named in the compensation
table under the section entitled "Executive Compensation",
and (iv) all directors and executive officers of the
Company, as a group (6 persons).
<TABLE>
<CAPTION>
Number of Percent
Name and Address Shares of Class
of Common Stock
<S> <C> <C>
Michael M. Smith 1,296,970 22.4%
35-20 Broadway
Astoria, New York 11106
Gerard F. Murphy 1,184,544(1) 20.4%
218 Park Street
Montclair, New Jersey
07043
Fred Den 1,120,970(2) 19.4%
61-55 98th Street
Rego Park, New York
11374
James H. Halpin 32,275(3) *
27 Danvers Road
New Milford, Connecticut
06776
Thomas J. Carey 10,000 *
52 Hominy Hill Road
Colts Neck, New Jersey
07722
A. Paul Cox, Jr. 10,000 *
3615 Atlantic Avenue
Virginia Beach, Virginia
23451
All directors and 2,390,407(4) 40.9%
executive
officers as a group
</TABLE>
_________________________
* Represents less than 1% of the issued and outstanding
shares of Common Stock.
(1) Includes 21,608 shares of Common Stock which are the
subject of currently exercisable options granted to Mr.
Murphy under the Company's Common Stock Incentive Plan
(the "Plan").
(2) Includes 108,000 shares of Common Stock owned by Mr.
Den's wife, beneficial ownership of which is disclaimed
by Mr. Den.
(3) Includes 20,377 shares of Common Stock which are the
subject of currently exercisable options granted to Mr.
Halpin under the Plan.
(4) Includes an aggregate of 58,739 shares of Common Stock
which are the subject of currently exercisable options
granted to executive officers of the Company under the
Plan.
ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
Nominees
The Company's by-laws provide for a Board of Directors
of not less than three directors nor more than seven
directors, as fixed by the vote of the stockholders. The
size of the Board has been fixed at five directors. At
present, the Board of Directors consists of four directors
and there is one vacancy. The Board of Directors is taking
action to locate a suitable candidate to be elected by the
Board as a fifth director subsequent to the Annual Meeting.
At the Annual Meeting, four persons will be elected to the
Board of Directors to serve until the next annual meeting
and until their respective successors are elected and
qualified. The persons named in the accompanying form of
proxy, unless otherwise instructed, intend to vote the
shares of Common Stock covered by valid proxies FOR the
election of the four persons named in the following table
who have been designated by the Board of Directors as
nominees for director, each of whom is currently serving as
a director. In the event that any of such persons is unable
to continue to be available for election, the persons named
in the accompanying form of proxy will have discretionary
power to vote FOR a substitute and will have discretionary
power to vote or withhold their vote for any additional
nominees named by stockholders. There are no circumstances
presently known to the Board of Directors which would render
any of the following persons unavailable to continue to
serve as a director, if elected.
<TABLE>
<CAPTION>
Other Relationships Director
Name Age with the Company Since
<S> <C> <C> <C>
A. Paul Cox, Jr. 59 Chairman of the Board October 1995
Gerard F. Murphy 61 President and Chief Executive August 1988
Officer
Fred Den 55 Secretary August 1988
Thomas J. Carey 60 Treasurer October 1995
</TABLE>
There is no family relationship between any of the
nominees to the Board of Directors or between any of such
persons and the executive officers of the Company.
The business experience of each of the foregoing
persons, during the past five years, is as follows:
Mr. Cox has been the Chairman of the Board since
October 1996. Since January 1995, Mr. Cox has been the sole
proprietor of Asset Protection Company, a consulting firm.
From 1992 through 1994, Mr. Cox was Vice-President and
General Manager of the Business Equipment and Systems
Division of Standard Register Corporation. From 1989 to
1992, Mr. Cox was Chairman and Chief Executive Officer of
Codema Corporation, a management consulting company. Mr.
Cox also previously served in various capacities at IBM
Corporation, including as a Systems Engineer, Senior
Marketing Representative, Regional Director of Large Account
Planning and Marketing Unit Manager.
Mr. Murphy has been the President and Chief Executive
Officer of the Company for more than the past five years.
Mr Murphy, on August 4, 1995, was terminated as President
and Chief Executive Officer of the Company and, on August
30, 1995, was reinstated retroactive to August 4, 1995.
Mr. Den has been a real estate manager for Marteva
Corp. for more than the past five years and is involved in
managing and operating various real estate ventures. He has
been the Secretary of the Company for more than the past
five years.
Mr. Carey has been the Chief Financial Officer of
Driver Harris Company, a publicly-traded multi-national
manufacturer of electrical resistance wire, since May 1995.
From 1992 through 1994, Mr. Carey served as Chief Financial
Officer and Treasurer of The Home News Company and its
successor, Glenwood Communications Corporation, a newspaper
publisher. Prior to 1992, Mr. Carey was a partner with
Deloitte & Touche LLP.
Each of the foregoing nominees is a current director of
the Company, elected as such at the October 1995 annual
meeting of stockholders, and holds office until the next
annual meeting of stockholders and until his respective
successor has been duly elected and qualified or until his
earlier resignation.
The Board of Directors recommends that the stockholders
vote FOR the election of the above nominees as directors of
the Company.
Additional Information With Respect to the Board of
Directors and its Committees
Settlement Agreement
On August 30, 1995, the Company, Fred Den and each of
Michael M. Smith and Louis Z. Weitz, then directors of the
Company, entered into a Settlement Agreement (the
"Settlement Agreement") which resolved a threatened proxy
contest for the election of directors at the 1995 Annual
Meeting of Stockholders between Messrs. Smith and Murphy.
The Settlement Agreement provides that, notwithstanding
anything to the contrary contained therein, if at any time
when Mr. Den is a director of the Company or any subsidiary
of the Company he does not beneficially own at least 10% of
the outstanding Common Stock (the "10% Condition"), and
irrespective of whether he subsequently increases his
beneficial ownership of Common Stock to 10% or more of the
outstanding Common Stock, then the Board, by a vote of a
majority of the directors other than Mr. Den, may at any
time thereafter request that Mr. Den resign as a director of
the Company and as a director of any subsidiary of the
Company, and within two business days following such
request, Mr. Den will resign. In addition, in the event
that Mr. Den fails to meet the 10% Condition and at such
time has been nominated by the Board to stand for election
or re-election to the Board then, if pursuant to the
aforementioned requirements Mr. Den would be required to
resign as a director, he will immediately withdraw as a
nominee (or, in the absence of such withdrawal, the Company
may remove Mr. Den from its slate of nominees). The
Settlement Agreement further provides that if Mr. Den is in
compliance with the 10% Condition and, solely as a result of
the issuance by the Company of additional shares of Common
Stock, Mr. Den no longer owns at least 10% of the
outstanding Common Stock, Mr. Den shall not be deemed to
have failed the 10% Condition unless and until he shall, in
one or more transactions, sell, transfer or dispose of
shares of Common Stock which, in the aggregate, represent 1%
or more of the then outstanding Common Stock.
Pursuant to the Settlement Agreement, Messrs. Den and
Weitz agreed that, except as set forth in the Settlement
Agreement, until August 30, 1997, without the prior written
consent of the Board specifically expressed in a resolution
adopted by a majority of the directors other than Mr. Den
(and, if at the time he shall be serving on the Board), they
will not and will cause each of their Affiliates and
Associates not to, directly or indirectly (i) acquire, offer
or propose to acquire, or agree to acquire, directly or
indirectly, whether by purchase, tender or exchange offer or
otherwise, any Common Stock; (ii) make, or in any way
participate in, directly or indirectly, any solicitation of
proxies or consents of the Company's stockholders, seek to
advise, encourage or influence any person with respect to
the voting of any Common Stock, initiate, propose or
otherwise solicit stockholders of the Company for the
approval of stockholder proposals, induce or attempt to
induce any other person to initiate any such stockholder
proposal or otherwise communicate with the Company's
stockholders or others with respect thereto pursuant to Rule
14a-1(2)(iv) under the Securities Exchange Act of 1934 (the
"Exchange Act"); (iii) seek, propose, or make any statement
with respect to, any merger, consolidation, business
combination, tender or exchange offer, sale or purchase of
assets or securities, dissolution, liquidation,
restructuring, recapitalization or similar transactions of,
or involving, the Company or any of its affiliates; (iv)
form, join or in any way participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any Common Stock; (v) deposit any Common Stock in
any voting trust or subject any Common Stock to any
arrangement or agreement with respect to the voting of any
Common Stock, except as set forth in the Settlement
Agreement; (vi) execute any written consent with respect to
the Company or the Common Stock, except as set forth in the
Settlement Agreement; (vii) otherwise act, alone or in
concert with others, to control or seek to control or
influence or seek to influence the management, the Board or
the policies of the Company; (viii) seek, alone or in
concert with others, representation on the Board, or seek
the removal of any member of the Board, except as set forth
in the Settlement Agreement; (ix) make any publicly
disclosed proposal or enter into any discussion regarding
any of the foregoing; (x) make any proposal, statement or
inquiry, or disclose any intention, plan or arrangement
inconsistent with the foregoing, or make or disclose any
request to amend, waive or terminate any provision of the
Settlement Agreement; or (ix) have any discussions or
communications, or enter into any arrangements,
understandings or agreements with, or advise, finance,
assist or encourage, any other person in connection with any
of the foregoing, or make any investment in or enter into
any arrangement with, any other person that engages, or
offers or proposes to engage in any of the foregoing. The
Settlement Agreement also provides that the restrictions set
forth in clauses (iii) and (vii) above will not be deemed in
any way to prohibit or limit Mr. Den from acting in his
lawful capacity as a director of the Company.
Meetings and Committees of the Board of Directors
Until October 1996, the Company had a standing Stock
Option Committee of the Board of Directors comprised of Mr.
Smith, who resigned as a director in October 1996. During
1996, the Stock Option Committee was responsible for
administering the Plan and the Director Plan, including the
designating of employees to be granted options under the
Plan, prescribing the terms and conditions of options
granted under the Plan and the Director Plan, interpreting
both the Plan and the Director Plan and making all other
determinations deemed necessary for the administration of
such plans. Since October 1996, the Board of Directors has
succeeded to the role of the Stock Option Committee in
administering both the Plan and the Director Plan.
The Company has standing Audit and Compensation
Committees of the Board of Directors. The current members
of each committee hold office until the next Annual Meeting
of the Board of Directors and until their respective
successors have been elected and qualified. During 1996
until December 1996, both committees were comprised of
Messrs. Cox, Carey and Smith, at which time Mr. Den replaced
Mr. Smith on both committees. The Board of Directors does
not have a Nominating Committee or a committee performing
similar functions.
The Audit Committee is authorized to confer with the
auditors and financial officers of the Company, review
reports submitted by the auditors, establish or review, and
monitor compliance with codes of conduct of the Company,
inquire about procedures for compliance with laws and
regulations relating to the management of the Company, and
report and make recommendations to the Board of Directors.
The Compensation Committee is responsible for establishing
the compensation of the President and Chief Executive
Officer of the Company and of key employees of the Company
based upon recommendation from the President and Chief
Executive Officer.
During 1996, there were 14 meetings of the Board of
Directors, two meetings of the Stock Option Committee, one
meeting of the Compensation Committee and no meetings of the
Audit Committee. During this period, each director attended
all of the meetings of the Board of Directors and the
committee thereof on which he served.
Compensation of Directors
Directors receive compensation of $500 for each day of
regular meetings, special meetings, planning meetings or any
other duly called meeting of the Board, other than committee
meetings. For each day of committee meetings that members
of the Board attend, compensation of $300 is paid.
Additional compensation of $300 is paid to the Chairman of
the Board for each day of any duly called meeting of the
Board that he attends. In addition, commencing December
1996, additional compensation of $100 has been paid to the
director who acts as secretary of a meeting of the Board of
Directors upon his delivery to the Board of the minutes
thereof.
Effective as of October 31, 1995 and pursuant to the
Director Plan, each director of the Company who is not an
employee of the Company or any of its subsidiaries (a "Non-
Employee Director") is automatically granted 10,000 shares
of Common Stock upon first becoming a director. Thereafter,
immediately following the election of directors at each
annual meeting of stockholders, each elected Non-Employee
Director automatically is granted an option to purchase
5,000 shares of Common Stock at an exercise price equal to
the fair market value of the Common Stock on the date of
grant. Since there was no annual meeting of stockholders in
1996, options have not yet been granted under the Director
Plan. A proposal to amend the Director Plan is one of the
matters on the agenda at the Annual Meeting. See "Proposal
to Approve Amendments to 1995 Director Stock Plan."
Executive Officers of the Company
<TABLE>
<CAPTION>
The executive officers of the Company are:
Position with the
Name Age Company
<S> <C> <C>
A. Paul Cox, Jr. 59 Chairman of the Board and
Director
Gerard F. Murphy 61 President and Chief Executive
Officer and Director
James H. Halpin 54 Executive Vice President
Joseph M. Burke 55 Vice President -- Finance
Fred Den 55 Secretary and Director
Thomas J. Carey 60 Treasurer
and Director
</TABLE>
Executive officers of the Company are appointed by, and
serve at the discretion of, the Board of Directors.
The business experience of Messrs. Cox, Murphy, Den and
Carey is set forth above. The business experience of each
of the other executive officers of the Company during the
past five years is as follows:
Mr. Halpin has been associated with the Company for
more than the past five years as its Vice President -
National Accounts through December 31, 1992 and as Executive
Vice President since January 1, 1993.
Mr. Burke has been associated with the Company for more
than the past five years as its Vice President - Finance.
In addition to the foregoing, the Company considers
Messrs. Ray T. Riley, Timothy J. Eames and James O'Pray to
be significant employees of the Company. Mr. Riley, 70, has
been associated with the Company for more than the past five
years as its Vice President - Marketing.
Mr. Eames, 61, joined the Company as Assistant to the
President in January 1990 and became Vice President - Sales
in November 1990. Mr. O'Pray, 57, is the President of the
Company's subsidiary, Innovative Electronics Incorporated,
and was Vice President - Sales and Marketing of its
predecessor from June 1991 until he joined the Company in
August 1994.
Executive Compensation
Summary of Compensation in fiscal years ended December 31,
1994, 1995 and 1996 (respectively, "Fiscal 1994", "Fiscal
1995" and "Fiscal 1996")
The following Summary Compensation table sets forth
information concerning compensation for services in all
capacities awarded to, earned by or paid to the Company's
chief executive officer and each other executive officer of
the Company earning more than $100,000 during Fiscal 1994,
Fiscal 1995 or Fiscal 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Name and Fiscal Underlying LTIP All Other ry Payouts ation
Principal Year Salary Bonus Options(#) Payouts($)(2) Compensation
Position
<S> <C> <C> <C> <C> <C> <C>
Gerard F.
Murphy, 1996 $150,491 $ -- 8,375(1) $ 34,563 $ 1,695(3)
President 1995 $150,491 $ 21,000 -- $ 32,053 $ 1,695(3)
and Chief 1994 $146,107 $ -- -- $ 29,889 $ 1,695(3)
Executive
Officer
James H.
Halpin, 1996 $117,269 $13,000 4,682(1) $18,423 --
Exec.Vice- 1995 $124,560 $ 3,288 -- $17,198 -- $ 3,288 - $
president 1994 $ 93,230 $ -- -- $16,402 --
</TABLE>
_________________________
(1) Represents Incentive Stock Options granted under the
Plan on February 2, 1996.
(2) Represents accrued amounts allocated as of December 31
of each year pursuant to the Company's Profit Sharing
Plan. See "Long Term Incentive Plans" for a
description of such plan.
(3) Represents insurance premiums paid by the Company with
respect to a life insurance policy on the life of Mr.
Murphy, the beneficiary of which is his spouse.
Common Stock Incentive Plan
All key employees of the Company (including executive
officers, and directors who are employees of the Company)
are eligible to participate in the Plan. The Plan is
intended to provide incentive to continued employment of
such key employees by enabling them to acquire a proprietary
interest in the Company and by offering comparable
incentives to enable the Company better to attract, compete
for and retain highly qualified employees. The Plan is
administered by the Board of Directors. The Plan authorizes
the issuance of options covering up to 480,000 shares of
Common Stock, subject to adjustment in certain
circumstances. See "Proposal to Approve Amendments to the
Common Stock Incentive Plan."
Stock Options Granted in Fiscal 1996
The following table sets forth information concerning
individual grants of stock options made during Fiscal 1996
to each executive officer listed in the Summary Compensation
table. The Company did not grant any stock appreciation
rights during Fiscal 1996.
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options Granted Exercise
Name Options Employees in Price Expiration
Granted Fiscal Year (per share) Date
(#)
<S> <C> <C> <C> <C>
Gerard F. Murphy 8,375 17.27% $1.1344 2/2/01
James H. Halpin 4,682 9.7% $1.03125 2/2/06
</TABLE>
The foregoing options were granted by the Stock Option
Committee on February 2, 1996 pursuant to the Plan, when the
fair market value of the Common Stock was $1.03125 per
share. The options granted to Mr. Murphy are exercisable at
an exercise price of $1.1344 per share, since Mr. Murphy is
the beneficial owner of more than 10% of the Common Stock
and the option price for options granted to him under the
Plan may be not less than 110% of the fair market value of
the Common Stock on the date of grant in order for such
options to be qualified as incentive stock options under the
Internal Revenue Code of 1986. All of the foregoing options
become exercisable as to one-third of the shares included in
the grant on each anniversary of the grant, commencing on
February 2, 1997. The right to purchase shares of Common
Stock pursuant to such options is cumulative, and the
optionee may exercise his right to purchase shares of Common
Stock at any time and from time to time after his option
becomes exercisable and prior to the expiration or
termination of his option. In the event of the termination
of the optionee's employment, his option may be exercised by
him or his legal representative within the earlier of the
option period or three months (one year in the case of
termination as a result of disability or death) from the
date of termination.
Stock Options Held at End of Fiscal 1996
The following table indicates the total number of
exercisable and unexercisable stock options held by each
executive officer named in the Summary Compensation table as
of December 31, 1996. No options to purchase Common Stock
were exercised during Fiscal 1996 by the named executive
officers and no stock appreciation rights were outstanding
during Fiscal 1996.
<TABLE>
<CAPTION>
Number of Securities Value of Unerercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1996 December 31, 1996
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Gerard F. Murphy 18,816 8,375 $4,751 --
James H. Halpin 18,816 4,682 $5,292 --
</TABLE>
_________________________
(1) On April 1, 1997, based upon the average of the high
bid and low asked price of the Common Stock on such
date, the value of in-the-money securities underlying
the unexercised options held by Messrs. Murphy and
Halpin was $7,692 and $8,233, respectively.
Long Term Incentive Plans
The Company has a discretionary non-contributory Profit
Sharing Plan, the Trustees of which are the Company's
directors. All of the Company's full-time employees who
have attained the age of 21 and have completed one year of
continuous service with the Company, subject to certain
requirements, are eligible to participate in the plan.
Pursuant to the plan, the Company may make annual cash
contributions, limited to 15% of the salaries of
participating employees, if the Board of Directors of the
Company determines that the Company's profits warrant such a
contribution. Contributions made by the Company are
allocated to participating employees in proportion to their
compensation. A participant's right to the Company's
contributions to the plan become 20% vested after two full
years of service and 20% vested for each full year of
service thereafter, except that a participant who is not
fully vested becomes fully vested upon death, total
disability, the termination of the plan or retirement at age
65. The following table shows, for Fiscal 1996, the amounts
allocated under the plan to each executive officer listed in
the Summary Compensation table. Previously accrued awards
under the plan are shown in the Summary Compensation table
under "LTIP Payouts".
<TABLE>
<CAPTION>
Long-Term Incentive Plans-Awards in Fiscal 1996
Dollar Amount
Name Allocated for 1996 Period Until Maturation(1) Future Payout
<S> <C> <C> <C>
Gerard F. Murphy $0 -- (2)
James H. Halpin $0 -- (2)
</TABLE>
_________________________
(1) Each of the named individuals is fully vested in
contributions made to him under the plan.
(2) It is impossible to estimate the benefits that any
participant may be entitled to under the plan upon
retirement or death, since the amount of such benefits
will be dependent upon, among other things, future
profits and contributions by the Company, future net
income earned by the trust to which contributions are
deposited and forfeitures of non-fully vested
participants on future termination of employment.
Employment Contracts and Termination of
Employment and Change-in-Control Arrangements
Other than the Plan and the Profit Sharing Plan, the
Company does not have any program providing compensation to
its executive officers which is intended to serve as an
incentive for performance to occur over a period longer than
one fiscal year. The incentive stock options granted to
Messrs. Murphy and Halpin provide that if their respective
employments are terminated, for any reason other than death
or retirement, the options must be exercised within the
earlier of the balance of the option period or three months
(one year in the case of termination as a result of
disability or death) from the date of termination.
Pursuant to an employment agreement entered into May
23, 1996, effective as of January 1, 1996, Mr. Murphy
receives an annual salary of $152,000. Mr. Murphy's
employment agreement is for an initial three year term, and
is automatically extended from year to year thereafter,
provided that the Company can give Mr. Murphy at least two
year's prior notice of non-renewal and Mr. Murphy can give
the Company at least one year's notice of non-renewal.
Under his employment agreement, Mr. Murphy also receives the
use of a luxury size automobile, at the Company's expense,
and reimburses the Company (currently at the rate of $.11
per mile) for non-business use of such automobile.
Pursuant to a written arrangement with Mr. Halpin,
effective January 1, 1995, Mr. Halpin receives an annual
base salary of $73,000 plus 0.5% of all sales made by the
Company, payable monthly after order entry. In addition,
Mr. Halpin is entitled to receive the Company's standard
commission applicable to national account salesmen on sales
to certain specified accounts. During Fiscal 1996, such
standard commission was equal to 6% of such sales during the
first 12 months after the account is established, 4% during
the next 12 months and 2% during the next succeeding 12
months. As of January 1, 1997, such standard commission was
adjusted to 5% on all such sales commencing on the date the
account is established.
Pursuant to the Director Plan, each Non-Employee
Director is automatically granted 10,000 shares of Common
Stock upon first being elected as a director of the Company.
In addition, immediately following the election of directors
at each annual meeting of stockholders, each re-elected Non-
Employee Director is granted automatically an option to
purchase 5,000 shares of Common Stock. If the amendment to
the Director Plan is approved at the Annual Meeting, the
option will be increased to 10,000 shares of Common Stock.
See "Proposal to Approve Amendment to 1995 Director Stock
Plan."
Certain Relationships and Related Transactions
On February 16, 1995, Mr. Halpin, Executive Vice
President, received a $10,000 loan from the Company bearing
interest at the prime rate plus 1%, which loan, on January
31, 1996, was extended until December 31, 1996. On December
31, 1996 the loan was repaid in full.
On October 25, 1996, the Company, Michael M. Smith
(then Chairman of the Board of Directors and a director of
the Company) and counsel to Mr. Smith ("Counsel"), which law
firm also had acted as securities counsel to the Company
from October 31, 1995 until its termination by the Company
effective May 31, 1996, entered into an agreement to settle
all disputes relating to amounts claimed by Mr. Smith and
Counsel to be owed to them by the Company. Pursuant to such
agreement, the Company paid Counsel $50,000 in satisfaction
of all outstanding legal bills rendered by Counsel to the
Company, and reimbursed Mr. Smith $13,034 for out-of-pocket
expenses incurred by him in connection with his Company
duties. In addition, the Company and Mr. Smith executed
mutual releases and Mr. Smith resigned as Chairman of the
Board.
During 1995, the Company engaged Louis Z. Weitz, then a
director of the Company, to oversee its accounting policies
and activities, particularly of its newly acquired
subsidiary, Innovative Electronics Incorporated, and paid
such director a salary of $15,937, fees of $12,704 and
expenses of $1,337.
During 1996, the Company engaged A. Paul Cox, Jr.,
Thomas J. Carey and Michael M. Smith, then directors of the
Company, as consultants for a potential acquisition which
did not materialize. The directors were paid an aggregate
of $13,218 in fees and expenses during 1996 pursuant to this
arrangement.
PROPOSAL TO APPROVE AMENDMENTS TO THE
COMMON STOCK INCENTIVE PLAN
(Item 2 on the Proxy Card)
The Plan was originally adopted by the Board of
Directors in January 1993 and approved by the Company's
stockholders on May 26, 1993. The Plan, as amended at the
1995 Annual Meeting, currently authorizes the issuance until
January 2003 of options covering up to an aggregate of
480,000 shares of Common Stock (subject to anti-dilution and
similar adjustments).
On March 14, 1997, the Board of Directors amended and
restated the Plan (as amended and restated, the "Amended
Option Plan"), subject to approval by the Company's
stockholders at the Annual Meeting. In addition to
technical, non-substantive amendments to the Plan, the
amendments adopted by the Board of Directors addressed
certain items which generally were not permissible prior to
the Securities and Exchange Commission's recently adopted
amendments to the rules promulgated under Section 16(b) of
the Exchange Act.
The Board of Directors believes that the amendments to
the Plan will enhance the Company's ability to attract and
retain qualified personnel as well as providing the Company
with increased flexibility in structuring compensation. The
material amendments adopted by the Board of Directors (i)
permit options to be granted to any person associated with
the Company or any of its affiliates as a director,
consultant, advisor or other service provider, even if such
person is not an employee of the Company or such affiliate,
and (ii) permit options to be transferable by an optionee,
if allowed by the Board of Directors or the committee of the
Board administering the Amended Option Plan.
General
All key employees of the Company and its affiliates, as
well as Non-Employee Directors of the Company and its
affiliates and certain consultants, advisors and other
persons who provide services to the Company and its
affiliates are eligible to participate in the Amended Option
Plan. The Amended Option Plan is intended to provide
incentive to continued employment or association and
dedication of such persons by enabling them to acquire a
proprietary interest in the Company, and by offering
comparable incentives to enable the Company to better
attract, compete for and retain highly qualified employees
and advisors.
The Amended Option Plan authorizes the issuance,
through January 2003, of options covering up to 480,000
shares of Common Stock (subject to adjustment in certain
circumstances). As of April 1, 1997, options for an
aggregate of 241,295 shares of Common Stock, at exercise
prices ranging from $.28125 to $1.315, were outstanding
under the Amended Option Plan and 152,764 shares of Common
Stock were available for the grant of future options under
the Amended Option Plan.
Options granted under the Amended Option Plan may be
either "Incentive Stock Options", as that term is defined in
Section 422 of the Internal Revenue Code of 1986 (the
"Code"), or options which do not qualify as Incentive Stock
Options ("Non-Qualified Stock Options"). An Incentive Stock
Option must expire within ten years from the date it is
granted (five years in the case of such options granted to a
holder of more than 10% of the outstanding Common Stock).
The exercise price of an Incentive Stock Option must be at
least equal to the fair market value of the Common Stock on
the date such Incentive Stock Option is granted and must be
paid in cash, a cash equivalent, shares of Common Stock or
any other consideration acceptable to the Board of Directors
or the committee administering the Amended Option Plan. To
the extent the aggregate fair market value of Incentive
Stock Options that are exercisable for the first time by an
optionee during any calendar year exceeds $100,000, such
options will be treated as Non-Qualified Stock Options. The
exercise price of Non-Qualified Stock Options is not limited
and may be below fair market value.
Incentive Stock Options terminate three months (one
year if termination is by reason of death or disability)
after the optionee's relationship with the Company or its
affiliate is terminated without cause. In the case of Non-
Qualified Stock Options, such options terminate as
determined by the Board of Directors or the committee
administering the Amended Option Plan, and as set forth in
the option agreement between the Company and the optionee.
The Amended Option Plan will be administered either by
the Board of Directors or by a committee of the Board of
Directors consisting of at least two Non-Employee Directors
(the "Committee"), who will determine, consistent with the
terms of the Amended Option Plan, the persons to whom
options may be granted, the number of shares subject to
options and certain other terms and conditions of options.
Non-Employee Directors, in addition to being entitled to
received discretionary grants of options under the Amended
Option Plan, are entitled to receive pursuant to the
Director Plan, on the date they initially join the Board of
Directors, 10,000 shares of Common Stock, and immediately
following each annual meeting of stockholders at which they
are re-elected as a director, a Non-Qualified Stock Option
to purchase 5,000 shares of Common Stock at the fair market
value of the Common Stock on the date of grant. See
"Proposal to Approve Amendments to 1995 Director Stock
Plan."
Options granted under the Amended Option Plan are not
transferable by an optionee (unless allowed by the Board of
Directors or the Committee) otherwise than by will or the
laws of descent and distribution, and are exercisable during
the holder's lifetime only by the holder.
The Board of Directors, with respect to shares of
Common Stock not then subject to options, may amend or
terminate the Amended Option Plan at any time or from time
to time, without the approval of the stockholders, except as
otherwise required by (i) the Code, (ii) the laws of the
State of Nevada (the Company's jurisdiction of
incorporation), and (iii) the Exchange Act or the rules
promulgated thereunder.
The following table sets forth summary information
regarding the shares of Common Stock underlying options
granted under the Plan during Fiscal 1996 to (i) each
nominee for election as a director, (ii) all current
executive officers of the Company (which include all of the
current directors) as a group (6 persons), and (iii) all
employees (other than Executive Officers) as a group (16
persons).
<TABLE>
<CAPTION>
Name Number of Option Shares
<S> <C>
Gerard F. Murphy 8,375
All current executive officers as a group 17,373
All employees (other than executive officers) as a group 31,128
</TABLE>
Information with respect to the grant of options during
Fiscal 1996 to the named executive officers listed in the
Summary Compensation table is included under "Executive
Compensation - Stock Options Granted in Fiscal 1996." The
Company did not grant any stock appreciation rights during
Fiscal 1996.
Certain Federal Income Tax Consequences of the Amended
Option Plan
The following discussion of certain relevant federal
income tax effects applicable to options granted under the
Amended Option Plan is a brief summary only, and reference
is made to the Code, and the regulations and interpretations
issued thereunder, for a complete statement of all relevant
federal tax provisions. This brief summary of the principal
federal income tax consequences is based on current federal
income tax laws, is not intended to be exhaustive and does
not describe State, local or foreign tax consequences.
No taxable income will be realized by an optionee upon
the grant or timely exercise of an Incentive Stock Option.
If Common Stock is issued to an optionee pursuant to the
exercise of an Incentive Stock Option and if a disqualifying
disposition of such Common Stock is not made by the optionee
(i.e., no disposition is made within two years after the
date of grant or within one year after the receipt of Common
Stock upon exercise of an option by such optionee, whichever
is later), then (i) upon sale of the Common Stock, any
amount realized in excess of the exercise price of the
Incentive Stock Option will be taxable to the optionee as a
long-term capital gain and any loss sustained will be a long-
term capital loss, and (ii) no deduction will be allowed to
the Company. However, if Common Stock acquired upon the
exercise of an Incentive Stock Option is disposed of prior
to satisfying the holding period described above, generally
(i) the optionee will realize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the
fair market value of the Common Stock at the time of
exercise (or, if less, the amount realized on the
disposition of the Common Stock), over the exercise price
thereof, and (ii) the Company will be entitled to deduct an
amount equal to the amount of such income. Any additional
gain recognized by the optionee upon a disposition of Common
Stock prior to satisfying the holding period described above
will be taxable as a short-term or long-term capital gain,
as the case may be, and will not result in any deduction by
the Company.
If an Incentive Stock Option is exercised at a time
when it no longer qualifies as an Incentive Stock Option,
the option will be treated as a Non-Qualified Stock Option.
Subject to certain exceptions, an Incentive Stock Option
generally will not be eligible for the federal income tax
treatment described above if it is exercised more than three
months following termination of employment. See "Proposal
to Approve Amendments to 1995 Directors Stock Plan --
Certain Federal Income Tax Consequences of the Director
Plan" for a discussion of certain relevant federal income
tax effects applicable to Non-Qualified Stock Options.
The amount by which the fair market value of the Common
Stock on the exercise date of an Incentive Stock Option
exceeds the exercise price generally will constitute an item
which increases the optionee's "alternative minimum taxable
income."
The affirmative vote of the holders of at least a
majority of the shares of Common Stock present and entitled
to vote at the Annual Meeting (assuming the presence of a
quorum) is required to approve the amendments to the Plan.
The Board of Directors recommends that the stockholders
vote FOR approval of the amendments to the Plan.
PROPOSAL TO APPROVE AMENDMENTS TO 1995 DIRECTOR STOCK PLAN
(Proposal 3 on the Proxy Card)
The Director Plan was adopted by the Board of Directors
in September 1995 and approved by the Company's stockholders
on October 25, 1995. On March 14, 1997, the Board of
Directors amended the Director Plan, subject to approval of
the stockholders. In addition to technical non-substantive
amendments to the Director Plan, the Board approved (i) an
amendment increasing the annual grant of options to Non-
Employee directors of the Company and any of its
subsidiaries ("Non-Employee Directors") from an annual grant
of options covering 5,000 shares of Common Stock to an
annual grant of options covering 10,000 shares of Common
Stock, and (ii) an amendment granting each new Non-Employee
Director, whether first elected by the stockholders or by
the Board to fill an existing vacancy, 10,000 shares of
Common Stock (together, the "Amendments").
The Board has approved the Amendments, subject to
stockholder approval at the Annual Meeting. The Board
believes the Amendments will help the Company to attract and
retain as directors of the Company and its subsidiaries
persons of outstanding ability and potential.
Description of Principal Features of the Director Plan
The Director Plan currently provides for each Non-
Employee Director to receive an award of 10,000 shares of
Common Stock upon first being elected to the Board by the
stockholders and a grant of 5,000 Non-Qualified Stock
Options immediately following his or her reelection to the
Board at each annual meeting of the stockholders.
The Company has reserved 150,000 shares of Common Stock
for issuance of awards under the Director Plan (subject to
anti-dilution and similar adjustments).
The Director Plan is administered by the Board of
Directors and is intended to satisfy the provisions of Rule
16b-3 under the Exchange Act. The Board of Directors,
subject to and not inconsistent with the express provisions
of the Director Plan, administers and interprets the
Director Plan and adopts rules and regulations related
thereto.
Generally, each option granted under the Director Plan
may be exercised for a period of up to 10 years from the
date of grant. Options will be granted with an exercise
price equal to the "Fair Market Value" (as defined in the
Director Plan) of the Common Stock on the date of grant.
The option price will be paid in full in cash or its
equivalent at the time the option is exercised. Options
granted under the Director Plan will be exercisable as to 33-
1/3% of the shares subject thereto on the date of grant and
become exercisable as to an additional 33-1/3% of the shares
subject thereto on each of the first and second
anniversaries of such date of grant if the Non-Employee
Director continues to be a Non-Employee Director. An option
granted to a Non-Employee Director may not be exercised by
such grantee unless the grantee has remained continuously in
service as a director since the date of grant of such
option. In the event that service of a Non-Employee
Director as a director is terminated other than by reason of
death, "Disability" or "Retirement" (each as defined in the
Director Plan), all options held by such Non-Employee
Director may be exercised within six months after such
cessation to the extent such options are then exercisable;
provided, however, that if the termination of such Non-
Employee Director's service was for "Cause" (as defined in
the Director Plan), all options held by such Non-Employee
Director terminate immediately. In the event that the Non-
Employee Director ceases to be a director by reason of
death, Disability or Retirement, or if the Non-Employee
Director dies within three months after such termination of
service other than for Cause, all options held by such Non-
Employee Director, to the extent such options are then
exercisable, remain exercisable for two years after the date
of such death, Disability or Retirement. The Director Plan
also provides for acceleration of the exercisability of
options in the event of a "Change in Control" (as defined in
the Director Plan).
The Board of Directors, at any time and from time to
time, may suspend, terminate, modify or amend the Director
Plan; provided however, that the Director Plan may not be
amended without stockholder approval to the extent that such
approval is required (i) for the Director Plan to meet the
requirements of Rule 16b-3 under the Exchange Act, or (ii)
by any other provision of applicable law. In addition, no
such change may adversely affect any option previously
granted, except with the written consent of the grantee.
No options may be granted under the Director Plan on or
after October 31, 2005.
Immediately following approval by the stockholders of
the Amendments, each Non-Employee Director elected to the
Board will be granted 10,000 Non-Qualified Stock Options.
Certain Federal Income Tax Consequences of the Director Plan
The following discussion of certain relevant federal
income tax effects applicable to the Common Stock and Non-
Qualified Stock Options granted under the Director Plan is a
brief summary only, and reference is made to the Code, and
the regulations and interpretations issued thereunder, for a
complete statement of all relevant federal tax provisions.
This brief summary of the principal federal income tax
consequences is based on current federal income tax laws, is
not intended to be exhaustive and does not describe State,
local or foreign tax consequences.
An award of Common Stock generally results in the
immediate recognition of ordinary income measured by the
fair market value of the shares of Common Stock issued as of
the date of issuance. However, since a Non-Employee
Director is subject to potential liability under Section
16(b) of the Exchange Act, an award of Common Stock to a Non-
Employee Director is deemed to be subject to a substantial
risk of forfeiture, as defined in the Code and, unless such
Non-Employee Director makes an election under Section 83(b)
of the Code within 30 days after receipt of the award of
Common Stock, will not be taxable to the Non-Employee
Director until such time as the Section 16(b) restriction
terminates (normally six months). The Company generally will
be entitled to a deduction at the time and in the amount
that the Non-Employee Director recognizes ordinary income.
In general, an optionee will not be subject to tax at
the time a Non-Qualified Stock Option is granted. Upon
exercise of a Non-Qualified Stock Option when the exercise
price is paid in cash, the optionee generally must include
in ordinary income at the time of exercise an amount equal
to the excess, if any, of the fair market value of the
Common Stock at the time of exercise over the exercise
price, and will have a tax basis in such Common Stock equal
to the cash paid upon exercise plus the amount taxable as
ordinary income to the optionee. Where the optionee
receiving the Common Stock is restricted from selling the
Common Stock because the optionee is subject to reporting
under Section 16(a) of the Exchange Act (the instance with
respect to optionees under the Director Plan) and would be
subject to liability under Section 16(b) of the Exchange Act
(an "Insider"), then, unless the Insider makes an election
under Section 83(b) of the Code within 30 days after
exercise to be taxed under the rule of the preceding
sentence, (i) the Insider will recognize taxable ordinary
income at the time the Section 16(b) restriction terminates,
(ii) the amount of such ordinary income will be equal to the
exercise price, (iii) the Insider's tax basis in such Common
Stock will be the fair market value at that time, (iv) the
Insider's holding period for the Common Stock will begin at
that time, and (v) any dividends the Insider receives on the
Common Stock before that time will be taxable to the Insider
as compensation income.
Pursuant to the revised rules under Section 16(b) of
the Exchange Act, the purchase of Common Stock upon exercise
of an option by an optionee who is an Insider will not be
deemed a purchase triggering a six-month period of potential
short-swing liability. Accordingly, unless a Non-Qualified
Stock Option is exercised during the six-month period
following the date of grant of the option, the Common Stock
would not be considered subject to a substantial risk of
forfeiture as a result of Section 16(b), and the Section
83(b) election generally would not be significant. Thus, in
this context, the taxable event for the exercise of a Non-
Qualified Stock Option that has been outstanding for at
least six months ordinarily will be the date of exercise.
If a Non-Qualified Stock Option is exercised within six
months after the date of the grant, taxation ordinarily
would be deferred until the date which is six months after
the date of grant, unless the Insider files an election
pursuant to Section 83(b) of the Code to be taxed on the
date of exercise.
The Company generally will be entitled to a deduction
in the amount of an optionee's ordinary income at the time
such income is recognized by the optionee upon the exercise
of a Non-Qualified Stock Option. Income and payroll taxes
are required to be withheld on the amount of ordinary income
resulting from the exercise of a Non-Qualified Stock Option.
The affirmative vote of the holders of at least a
majority of the shares of Common Stock present and entitled
to vote at the Annual Meeting (assuming the presence of a
quorum) is required to approve the Amendments.
The Board of Directors recommends that the stockholders
vote FOR approval of the Amendments.
SELECTION OF INDEPENDENT AUDITORS
(Item 4 on the Proxy Card)
The Board of Directors has selected, subject to
ratification by the Company's stockholders at the Annual
Meeting, the firm of Deloitte & Touche LLP as the
independent auditors to audit the Company's financial
statements for its fiscal year ending December 31, 1997.
Deloitte & Touche LLP served as the independent auditors for
the Company and its predecessor from 1988 through July 7,
1995, at which time the Board of Directors engaged Margolin,
Winer & Evens LLP ("Margolin") as the Company's auditors.
On September 29, 1995, Margolin was dismissed as the
Company's auditors and Deloitte & Touche LLP was re-engaged
as the Company's auditors. Margolin issued no reports on
the Company's financial statements. At no time during
either of their respective engagements has there been any
disagreements with Deloitte & Touche LLP or Margolin on any
matter of accounting principles and practices, financial
statement disclosure or audit scope and procedure, which
disagreement, if unresolved to the satisfaction of such
firm, would have caused it to make reference to the subject
matter of the disagreement in connection with any report on
the Company's financial statements.
A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting, will have the
opportunity to make a statement if such representative
desires to do so, and will be available to respond to
appropriate questions.
The Board of Directors recommends that the stockholders
vote FOR ratification of the selection of Deloitte & Touche
LLP as the Company's independent auditors.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3, 4 and 5 filed
with the Securities and Exchange Commission and the Company
under the Exchange Act, and upon a review of other
information received by the Company, no person who at any
time during 1996 was a director, executive officer or
beneficial owner of more than 10% of the Company's
outstanding Common Stock failed to file, on a timely basis
since January 1, 1996, reports required by Section 16(a) of
the Exchange Act, except that each of Messrs. Murphy, Halpin
and Burke filed a late Form 4 upon their receipt of options
during 1996 pursuant to the Plan.
STOCKHOLDERS' PROPOSALS FOR THE 1998 ANNUAL MEETING
The Company intends to hold the 1998 annual meeting of
stockholders of the Company in or about the second week of
May 1998. Stockholder proposals for the 1998 annual meeting
of stockholders must be received by the Company a reasonable
time before the solicitation is made with respect to the
1998 annual meeting of stockholders for the proposal to be
considered for inclusion in the proxy statement for such
meeting. Such proposal must also meet the other
requirements of the Securities and Exchange Commission
relating to stockholder proposals required to be included in
the Company's proxy statement.
OTHER MATTERS
The Board of Directors does not know of any other
business to be presented for consideration at the Annual
Meeting. If other matters properly come before the Annual
Meeting, the persons named in the accompanying form of proxy
intend to vote thereon in accordance with their best
judgment.
The Company will bear the cost of the Annual Meeting
and the cost of soliciting proxies, including the cost of
mailing the proxy materials. In addition to solicitation by
mail, directors, officers and regular employees of the
Company (none of whom will be specifically compensated for
such services) may solicit proxies by telephone or
otherwise. Arrangements will be made with brokerage houses
and other custodians, nominees and fiduciaries to forward
forms of proxy and proxy materials to their principals and
the Company will reimburse them for their expenses.
By Order of the Board of
Directors
Fred Den
Secretary
April 7, 1997
The Company will furnish, without charge, to each
person whose proxy is being solicited, upon request, a copy
of its Annual Report on Form 10-KSB for Fiscal 1996, as
filed with the Securities and Exchange Commission, including
the financial statements, notes to the financial statements
and the financial schedules contained therein. Copies of
any exhibits thereto also will be furnished upon the payment
of a reasonable duplicating charge. Requests for copies of
any such materials should be directed to Fred Den,
Secretary, ATS Money Systems, Inc., 25 Rockwood Place,
Englewood, New Jersey 07631.
Please date, sign and return the enclosed proxy at your
earliest convenience in the enclosed envelope. No postage
is required for mailing in the United States.
ATS MONEY SYSTEMS, INC.
PROXY - Annual Meeting of Stockholders - May 30, 1997
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned stockholder of ATS Money Systems, Inc. hereby constitutes
and appoints Gerard F. Murphy and A. Paul Cox, Jr., and each of them, the
attorneys and proxies of the undersigned, with full power of substitution, to
represent and to vote on behalf of the undersigned all of the shares of ATS
Money Systems, Inc. which the undersigned is entitled to vote At the Annual
Meeting of Stockholders to be held at The Clinton Inn, 145 Dean Drive,
Tenafly, New Jersey 07670, at 5:00 p.m. on Friday, May 30, 1997, and at
any adjournments thereof, upon the following proposals which are more
fully described in the notice of, and proxy statement for, the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS (1), (2), (3) and (4)
(1) Election of Directors
FOR all nominees listed below ______
(except as marked to the contrary below)
WITHHOLD AUTHORITY ______
to vote for all nominees
A. Paul Cox, Jr., Gerard F. Murphy, Fred Den, Thomas J. Carey
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
____________________________________________
(2) Proposal to approve the amendments to the Company's Common Stock
Incentive Plan. _____ FOR _____ AGAINST _____ ABSTAIN
(3) Proposal to approve the amendments to the Company's 1995 Director
Stock Plan. _____ FOR _____ AGAINST _____ ABSTAIN
(4) Proposal to ratify the selection of Deloitte & Touche LLP as the
Company's independent accountants for the fiscal year ending
December 31, 1997. _____ FOR _____ AGAINST _____ ABSTAIN
Each of the foregoing matters has been proposed by the Company and is
independent and not conditioned on the approval of any other matter.
(5) In their discretion, upon such other matters as properly may come before
the Annual Meeting.
(Continued and to be signed on reverse side.)
Said attorneys and proxies, or their substitutes (or if only one, that
one) at the Annual Meeting, and any adjournments thereof, may exercise all
of the powers hereby given. Any proxy heretofore given is hereby revoked.
Receipt is acknowledged of the Notice of Annual Meeting of Stockholders,
the Proxy Statement accompanying said Notice and the Annual Report to
Stockholders for the fiscal year ended December 31, 1996.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS (1), (2), (3) and (4).
IN WITNESS WHEREOF, the undersigned has signed this proxy.
Dated:________________________1997
_____________________________________
Stockholder(s) signature
_____________________________________
Stockholder(s) signature
NOTE: Signature(s) of stockholder(s) should correspond exactly with the
name(s) shown hereon. If shares are held jointly, both holders should sign.
Attorneys, executors, administrators, trustees, guardians or others
signing in a representative capacity should give their full titles.
Proxies executed in the name of a corporation should be signed on behalf of
the corporation by its president or other authorized officer.
I do _____ do not_____ expect to attend the Annual Meeting.
NOTE: This proxy, properly filled in, dated and signed, should be returned
promptly in the enclosed envelope.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Sec
urities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ATS MONEY SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o 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:
o Fee paid previously with preliminary materials.
o 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:
