ATS MONEY SYSTEMS, INC.
25 Rockwood Place
Englewood, New Jersey 07631
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 22, 1998
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 22, 1998, 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 ratify the selection of Deloitte & Touche LLP
as the Company's independent auditors for the fiscal year ending
December 31, 1998; and
3. 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, 1998 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,
Thomas J. Carey
Secretary
April 17, 1998
ATS MONEY SYSTEMS, INC.
25 Rockwood Place
Englewood, New Jersey 07631
PROXY STATEMENT
1998 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 22, 1998 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 and the
accompanying form of proxy, together with the Annual Report to
Stockholders of the Company for the fiscal year ended December
31, 1997, are first being sent to stockholders of the Company on
or about April 28, 1998.
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, 1998 (the "Record Date"). On the
Record Date, there were issued and outstanding 5,822,731 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 2,911,366 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 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, and (ii) 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>
Name and Address Number of
Shares of Common Stock Percent of Class
<S> <C> <C>
Michael M. Smith
35-20 Broadway
Astoria, New York 11106 1,296,970 22.3%
Gerard F. Murphy
218 Park Street
Montclair, New Jersey 07043 1,130,336(1) 19.3%
Fred Den
102 Glen Way
Syosset, New York 11791 1,127,637(2) 19.3%
James H. Halpin
27 Danvers Road
New Milford, Connecticut 06776 35,503(3) 0.6%
A. Paul Cox, Jr.
3615 Atlantic Avenue
Virginia Beach, Virginia 23451 29,667(4) 0.5%
Thomas J. Carey
52 Hominy Hill Road
Colts Neck, New Jersey 07722 16,667(5) 0.2%
All directors and executive
officers as a group 2,374,867(6) 40.2%
</TABLE>
_________________________
(1) Includes 24,400 shares of Common Stock which
are the subject of incentive stock options granted to Mr. Murphy
which are currently exercisable or are exercisable within 60
days after the Record Date. See "Common Stock Incentive Plan".
(2) Includes (i) 108,000 shares of Common Stock owned
by Mr. Den's wife, and (ii) 6,667 shares of Common Stock which
are the subject of non-qualified stock options granted to Mr.
Den which are currently exercisable or are exercisable within 60
days after the Record Date. See "Directors Stock Plan".
(3) Includes 23,605 shares of Common Stock which are
the subject of incentive stock options granted to Mr. Halpin
which are currently exercisable or are exercisable within 60
days after the Record Date. See "Common Stock Incentive Plan".
(4) Includes 6,667 shares of Common Stock which are
the subject of non-qualified stock options granted to Mr. Cox
which are currently exercisable or are exercisable within 60
days after the Record Date. See "Directors Stock Plan".
(5) Includes 6,667 shares of Common Stock which are
the subject of non-qualified stock options granted to Mr. Carey
which are currently exercisable or are exercisable within 60
days after the Record Date. See "Directors Stock Plan".
(6) In addition to the information included above for
Messrs. Murphy, Den, Halpin, Cox and Carey, includes an
aggregate of 19,193 shares of Common Stock which are the subject
of incentive stock options granted to another executive officer
of the Company which are currently exercisable or are
exercisable within 60 days after the Record Date. See "Common
Stock Incentive 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. 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>
<S> <C> <C> <C>
Name Age Other Relationships with theCompany Director Since
A. Paul Cox, Jr. 60 Chairman of the Board October 1995
Gerard F. Murphy 62 President and ChiefExecutive Officer August 1988
Fred Den 56 Treasurer August 1988
Thomas J. Carey 61 Secretary 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 management 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 and, 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. On August 4, 1995, Mr. Murphy was temporarily relieved
from such positions and was retroactively reinstated to such
positions on August 30, 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. Mr. Den
has been Treasurer of the Company since May 30,1997; for more
than the five years prior thereto, Mr. Den was Secretary of the
Company.
Mr. Carey has been Secretary of the Company since
May 30, 1997 and 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 May 1997 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 then threatened proxy
contest for the election of directors at the 1995 Annual Meeting
of Stockholders.
The Settlement Agreement provided 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 provided 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 will 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, Mr. Den 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, he would not (and would not
cause his affiliates and associates to) directly or indirectly
(i) acquire or propose to acquire any Common Stock, (ii)
participate in any solicitation of proxies of the Company's
stockholders or attempt to influence any person with respect to
the voting of any Common Stock, (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 Securities Exchange Act of 1934 (the "Exchange Act"))
with respect to any Common Stock, (v) 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 stockholder consent with
respect to the Company, except as set forth in the Settlement
Agreement, (vii) otherwise seek to control or influence or seek
to influence the management, the Board of Directors 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 proposal or statement inconsistent with
the foregoing, (x) attempt to amend any provision of the
Settlement Agreement, or (ix) advise or communicate with any
person that proposes to engage in any of the foregoing. The
Settlement Agreement provided that the restrictions set forth in
clauses (iii) and (vii) above were not to be deemed to limit Mr.
Den from acting in his lawful capacity as a director of the
Company.
Meetings and Committees of the Board of Directors
The Company has standing Audit and Compensation
Committees of the Board of Directors. The members of each
committee are appointed by, and serve at the discretion of, the
Board of Directors. Messrs Carey, Cox and Den comprise the
members of each committee. 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 the compensation of key
employees of the Company based upon the recommendation of the
President and Chief Executive Officer. The Compensation
Committee also is responsible for administering the Company's
stock option plans, including the designating of individuals to
be granted options, prescribing the terms and conditions of such
options and making all other determinations deemed necessary for
the administration of such plans.
During 1997, there were eight meetings of the Board
of Directors, one meeting of the Audit Committee and four
meetings of the Compensation Committee. During this period,
each director attended all of the meetings of the Board of
Directors and the committees thereof on which he served.
Compensation of Directors
Each director who is not a full-time employee of
the Company or any of its subsidiaries (a "Non-Employee
Director") receives an annual payment of $5,000. Each of
Messrs. Carey, Cox and Den is a Non-Employee Director. In
addition, each director (including Mr. Murphy) receive
compensation of $500 for attendance at each day of duly called
meetings of the Board of Directors, Mr. Cox, as Chairman of the
Board of Directors, receives an additional $300 per day of Board
of Directors meetings, and the director who prepares the minutes
for the Board of Directors meeting receives an additional $100
for acting as secretary of the meeting. Non-Employee Directors
also receive compensation of $300 for attendance at each
committee meeting.
In addition to cash compensation, each Non-Employee
Director received 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 receives an option to
purchase 10,000 shares of Common Stock at an exercise price
equal to the fair market value of the Common Stock on the date
of grant. See "Directors Stock Plan".
Executive Officers of the Company
The executive officers of the Company are:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position with the Company
A. Paul Cox, Jr. 60 Chairman of the Board and Director
Gerard F. Murphy 62 President and ChiefExecutive Officer
and Director
James H. Halpin 55 Executive Vice President
Joseph M. Burke 56 Vice President -- Finance
Thomas J. Carey 61 Secretary and Director
Fred Den 56 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 each of Messrs. Cox,
Murphy, Carey and Den is set forth above. Messrs Halpin and
Burke have been associated with the Company for more than the
past five years as the Company's Executive Vice President and
Vice President - Finance, respectively.
In addition to the foregoing, the Company considers
Messrs. Timothy J. Eames and Val Kida to be significant
employees of the Company. Mr. Eames, 62, has been associated
with the Company for more than the past five years as Vice
President - Sales. Mr. Kida, 53, has been associated with the
Company since January 1996 as Vice President - Finance of the
Company's subsidiary, Innovative Electronics, Inc. ("IEI").
From June 1991 until joining IEI in January 1996, Mr. Kida
served as controller of M. Epstein's Department Store in
Morristown, New Jersey.
Executive Compensation
Summary of Compensation in fiscal years ended
December 31, 1995, 1996 and 1997 (respectively, "Fiscal 1995",
"Fiscal 1996" and "Fiscal 1997")
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 $100,000 during Fiscal 1995, Fiscal
1996 or Fiscal 1997.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
<S> <C> <C> <C> <C> <C> <C>
Securities
Name and Principal Fiscal Underlying LTIP All Other
Position Year Salary Bonus Options (#) LTIP Payouts ($)(3) Compensation
Gerard F. Murphy,
President and
Chief Executive
Officer 1997 $153,509 $10,000 -- $38,163 $1,695(4)
1996 $150,491 -- 8,375(1) $34,563 $1,695(4)
1995 $150,491 $21,000 -- $32,053 $1,695(4)
James H. Halpin,
Vice-President -
National Accounts 1997 $252,564 $ -- 5,000(2) $20,600 --
1996 $117,269 $13,000 4,682(1) $18,423 --
1995 $124,560 $ 3,288 -- $17,198 --
</TABLE>
_________________________
(1) Represents incentive stock options granted on
February 2, 1996. See "Common Stock Incentive Plan".
(2) Represents incentive stock options granted on
February 14, 1997. See "Common Stock Incentive Plan".
(3) 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.
(4) 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
General
The Common Stock Incentive Plan (the "Incentive
Plan") was originally adopted by the Board of Directors in
January 1993 and approved by the Company's stockholders on May
26, 1993. The Incentive Plan, as amended, 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). As of April 1, 1998,
options for an aggregate of 210,535 shares of Common Stock, at
per share exercise prices ranging from $.28125 to $1.375, were
outstanding under the Incentive Plan and 152,704 shares of
Common Stock were available for the grant of future options
under the Incentive Plan.
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 Incentive Plan. The Incentive
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.
Options granted under the Incentive 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 Compensation Committee which
administers the Incentive 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 Compensation Committee, and as set forth in the
option agreement between the Company and the optionee.
Options granted under the Incentive Plan are not
transferable by an optionee (unless allowed by the Board of
Directors or the Compensation 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 Incentive 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.
<TABLE>
<CAPTION>
Stock Options Granted in Fiscal 1997
The following table sets forth information
concerning individual grants of stock options made during Fiscal
1997 to each executive officer listed in the Summary
Compensation table. The Company did not grant any stock
appreciation rights during Fiscal 1997.
<S> <C> <C> <C> <C>
Number of % of Total
Securities Options Granted Exercise
Underlying Options to Employees in Price Expiration
Name Granted (#) Fiscal Year (per share) Date
Gerard F. Murphy - - - -
James H. Halpin 5,000 17.9% $.71 2/14/07
</TABLE>
The foregoing options were granted by the
Compensation Committee on February 14, 1997 pursuant to the
Incentive Plan, when the fair market value of the Common Stock
was $.71 per share. All of the foregoing options become
exercisable as to one-third of the shares included in the grant
on each anniversary of the grant. The right to purchase shares
of Common Stock pursuant to such options is cumulative, and the
optionee may exercise his or her right to purchase shares of
Common Stock at any time and from time to time after the option
becomes exercisable and prior to the expiration or termination
of the option. In the event of the termination of the
optionee's employment, the optionee's option may be exercised by
the optionee or the optionee's legal representative, to the
extent that the option has not expired, within three months (one
year in the case of termination as a result of disability or
death) from the date of the optionee's termination of employment.
Stock Options Held at End of Fiscal 1997
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, 1997. No options to purchase Common Stock were
exercised during Fiscal 1997 by the named executive officers and
no stock appreciation rights were outstanding during Fiscal 1997.
<TABLE>
<CAPTION>
Number of Shares of Common Value of Unexercised
Stock Underlying Unexercised In-the-Money Options at
Options at December 31, 1997 December 31, 1997(1)
<S> <C> <C> <C> <C>
Name Exercisable Unexercisable Exercisable Unexercisable
Gerard F. Murphy 21,608 5,583 $10,043 $0
James H. Halpin 20,377 8,121 $10,584 $669
</TABLE>
_________________________
(1) On December 31, 1997, the average of the high
bid and low asked prices of the Common Stock was $.84375 per
share. On April 7, 1998, based upon the average of the high bid
and low asked price of the Common Stock on such date ($1.00 per
share), the value of in-the-money securities underlying the
unexercised options referred to in the table held by Messrs.
Murphy and Halpin was $12,983 and $14,974, respectively.
Directors Stock Plan
The 1995 Director Stock Plan (the "Director Stock
Plan") was adopted by the Board of Directors in September 1995
and approved by the Company's stockholders on October 25, 1995.
The Director Stock Plan has been designed to help the Company
attract and retain as directors of the Company and its
subsidiaries persons of outstanding ability and potential. The
Company has reserved 150,000 shares of
Common Stock for issuance of awards under the
Director Stock Plan (subject to anti-dilution and similar
adjustments). No options may be granted under the Director
Stock Plan on or after October 31, 2005. As of April 1, 1998,
options for an aggregate of 30,000 shares of Common Stock, at a
per share exercise price of $.8281, were outstanding under the
Director Stock Plan and 80,000 shares of Common Stock were
available for the future grants under the Director Stock Plan.
The Director Stock Plan provides for each
Non-Employee Director to receive an award of 10,000 shares of
Common Stock upon first being elected to the Board of Directors
by the stockholders and a grant of 10,000 Non-Qualified Stock
Options immediately following such person's reelection to the
Board at each annual meeting of the stockholders.
The Director Stock 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 Stock
Plan and adopts rules and regulations related thereto.
Generally, each option granted under the Director
Stock Plan may be exercised for a period of up to ten years from
the date of grant. Options are granted with an option price
equal to the "Fair Market Value" (as defined in the Director
Stock Plan) of the Common Stock on the date of grant. The
option price is required to be paid in full in cash or its
equivalent at the time the option is exercised. Options granted
under the Director Stock Plan are 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 Stock 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
Stock 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 Stock Plan also provides for acceleration of the
exercisability of options in the event of a "Change in Control"
(as defined in the Director Stock Plan).
The Board of Directors, at any time and from time to
time, may suspend, terminate, modify or amend the Director Stock
Plan; provided however, that the Director Stock Plan may not be
amended without stockholder approval to the extent that such
approval is required (i) for the Director Stock 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.
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. Effective January 1, 1998, the Company adopted
provisions under the plan to provide a 401k feature, pursuant to
which the Company will match 25% of the participant's
contribution up to 6% of the participant's compensation.
Employee contributions to the 401k feature, which are voluntary,
can range up to 20% of 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 1997, 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 1997
<S> <C> <C> <C>
Dollar Amount Period Until
Name Allocated for 1997 Maturation(1) Future Payout
Gerard F. Murphy $2,250 -- (2)
James H. Halpin $2,250 -- (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 ofEmployment
and Change-in-Control Arrangements
Other than the Incentive 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, their options only may be exercised, to the
extent not expired, within three months (one year in the case of
termination as a result of disability or death) from the date of
termination of employment.
Pursuant to an employment agreement entered into May
23, 1996, effective as of January 1, 1996, Mr. Murphy is
required to receive an annual salary of at least $152,000. Mr.
Murphy's employment agreement was for an initial three year
term, and was automatically extended from year to year
thereafter so that the remaining term, at the beginning of each
calendar year commencing January 1, 1997, was two years unless
the Company gave Mr. Murphy at least two year's prior notice of
non-extension. The Company has given such notice to Mr. Murphy
and Mr. Murphy's employment agreement currently expires December
31, 1999, although Mr. Murphy has the right to terminate his
employment agreement prior thereto on one year's notice. Under
his employment agreement, Mr. Murphy 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 has been receiving 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 was 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 Stock 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 automatically receives an
option to purchase 10,000 shares of Common Stock. The Director
Stock Plan provides for acceleration of the exercisability of
such options in the event of a "Change in Control" (as defined
in the Director Stock Plan).
Certain Relationships and Related Transactions
In 1995, the Company lent James H. Halpin,
Executive Vice President, $10,000 with interest at the prime
rate plus 1%, which loan was repaid in full on December 31, 1996.
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 (which law firm also had acted
as securities counsel to the Company from October 31, 1995 until
May 31, 1996) entered into an agreement to settle all disputes
relating to amounts claimed by Mr. Smith and such counsel to be
owed to them by the Company. Pursuant to such agreement, the
Company paid such counsel $50,000 in satisfaction of all
outstanding legal bills rendered by such 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 of Directors.
During 1996, the Company engaged Thomas J. Carey and
A. Paul Cox, Jr., directors of the Company, and Michael M.
Smith, then a director of the Company, as consultants for a
potential acquisition which did not materialize. Such persons
were paid an aggregate of $13,218 in fees and expenses during
1996 pursuant to this arrangement.
During 1997, the Company engaged A. Paul Cox, Jr., a
director of the Company, as a consultant and paid Mr. Cox an
aggregate of $14,792 in fees and expenses pursuant to this
arrangement.
SELECTION OF INDEPENDENT AUDITORS
(Item 2 on the Proxy Card)
Deloitte & Touche LLP, independent accountants,
currently is, and for more than the Company's last two fiscal
years has been, the Company's independent auditors. Since the
beginning of such two fiscal year period, (i) Deloitte & Touche
LLP has not expressed reliance, in its audit report, on the
audit services of any other accounting firm, and (ii) there have
been no reported disagreements between the Company and Deloitte
& Touche LLP on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure.
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, except as provided below, no person who
at any time during 1997 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,
1997, reports required by Section 16(a) of the Exchange Act.
Each of Thomas J. Carey, A. Paul Cox, Jr. and Fred
Den, directors of the Company, were granted options to acquire
10,000 shares of Common Stock pursuant to the Directors Stock
Plan in May 1997 and timely filed a Form 4 with respect thereto.
However, the Forms 4 filed by each of Messrs Carey and Cox
contained a footnote which inadvertently misstated the vesting
schedule of his respective options, and the Form 4 filed by Mr.
Den inadvertently misstated the vesting schedule, the exercise
price and the term of his options. In addition, due to a
typographical error, Mr. Cox reported on a timely filed Form 4
that he acquired 10,300 shares of Common Stock in June 1997,
when such acquisition was actually of 13,000 shares of Common
Stock. Such misstatements were corrected by the filing of
amended Forms 4 in April 1998.
STOCKHOLDERS' PROPOSALS FOR THE 1999 ANNUAL MEETING
The Company intends to hold the 1999 annual
meeting of stockholders of the Company in or about the second
week of May 1999. Stockholder proposals for the 1999 annual
meeting of stockholders must be received by the Company a
reasonable time before the solicitation is made with respect to
the 1999 annual meeting of stockholders for the proposal to be
considered for inclusion in the proxy statement for such
meeting. Any proposal received after January 29, 1999 may be
considered not to have been timely received. 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
Thomas J. Carey
Secretary
April 17, 1998
_____________________
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 the fiscal year ended
December 31, 1997, 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 Thomas J.
Carey, 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 22, 1998
(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 22, 1998 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) and (2)
(1) Election of Directors
FOR all nominees listedbelow (except as marked to the contrary below) ____
WITHHOLD AUTHORITY to vote for all nominees ____
Thomas J. Carey, A. Paul Cox, Fred Den, Gerard F. Murphy
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in the space
provided below.)
__________________________________________________________________________
(2) Proposal to ratify the selection of Deloitte &
Touche LLP as the Company's independent accountants for the
fiscal year ending December 31, 1998.
____ 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.
(3) 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, 1997.
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)
and (2).
IN WITNESS WHEREOF, the undersigned has signed this
proxy.
Dated: ______________________________, 1998
_____________________________________
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
Securities 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:
