SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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<PAGE>
ATS MONEY SYSTEMS, INC.
25 ROCKWOOD PLACE
ENGLEWOOD, NEW JERSEY 07631
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 2000
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, June 30, 2000, for
the following purposes:
1. To elect three directors for a term of one year and until their
respective successors are elected and qualified;
2. To ratify a 100,000 share increase in the number of shares of the
Company's common stock reserved for grants under the Company's Common
Stock Incentive Plan;
3. To ratify a 50,000 share increase in the number of shares of the
Company's common stock reserved for grants under 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, 2000; 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 May 12, 2000 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
May 26, 2000
<PAGE>
ATS MONEY SYSTEMS, INC.
25 ROCKWOOD PLACE
ENGLEWOOD, NEW JERSEY 07631
---------------
PROXY STATEMENT
---------------
2000 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, June 30, 2000 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, 1999, are first being sent to
stockholders of the Company on or about May 26, 2000.
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 May 12, 2000 (the
"Record Date"). On the Record Date, there were issued and outstanding 5,643,235
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 2,821,618 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 (A) the ratification of a
100,000 share increase in the number of shares of Common Stock reserved for
issuance under the Company's Common Stock Incentive Plan, (B) the ratification
of a 50,000 share increase in the number of shares of Common Stock reserved for
issuance under the Company's 1995 Director Stock Plan, and (C) the ratification
of the selection of Deloitte & Touche LLP as the Company's 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 ratification of the 100,000
share increase in the number of shares of Common Stock reserved for issuance
under the Company's Common Stock Incentive Plan, (iii) the ratification of the
50,000 share increase in the number of shares of Common Stock reserved for
issuance under the Company's 1995 Director Stock 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.
<PAGE>
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 current directors of the Company ( three of whom
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).
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF COMMON STOCK OF CLASS
- ---------------- --------------- --------
Michael M. Smith 1,296,970 22.9%
35-20 Broadway
Astoria, New York 11106
Gerard F. Murphy 1,137,793(1) 20.1%
218 Park Street
Montclair, New Jersey 07043
Fred Den 1,087,637(2) 19.1%
102 Glen Way
Syosset, New York 11791
A. Paul Cox, Jr. 99,667(3) 1.8%
3615 Atlantic Avenue
Virginia Beach, Virginia 23451
Thomas J. Carey 68,667(4) 1.2%
52 Hominy Hill Road
Colts Neck, New Jersey 07722
James H. Halpin 54,854(5) 1.0%
27 Danvers Road
New Milford, Connecticut 06776
All directors and executive 2,489,246(6) 43.0%
officers as a group
- ----------------------------
(1) Includes 13,041 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) 100,000 shares of Common Stock owned by Mr. Den's wife, and
(ii) 26,667 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 "Director Stock
Plan".
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<PAGE>
(3) Includes 26,667 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
"Director Stock Plan".
(4) Includes (i) 10,000 shares of Common Stock owned by Mr. Carey's wife, and
(ii) 26,667 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 "Director Stock
Plan".
(5) Includes 42,956 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".
(6) In addition to the information included above for Messrs. Murphy, Den,
Cox, Carey and Halpin, includes 15,864 shares of Common Stock owned by
another executive officer of the Company and 24,764 shares of Common Stock
which are the subject of incentive stock options granted to such executive
officer 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 a Board of Directors meeting held in March 2000, Mr. Cox indicated
that he intended to resign as a director of the Company effective June 5, 2000;
as a result, the Board determined to nominate three directors for reelection and
to leave two positions vacant. At the Annual Meeting, three 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
three 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.
NAME AGE OTHER RELATIONSHIPS WITH THE COMPANY DIRECTOR SINCE
- ---- --- ------------------------------------ --------------
Gerard F. Murphy 64 President and Chief Executive Officer August 1988
Fred Den 58 Treasurer August 1988
Thomas J. Carey 63 Secretary October 1995
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. Murphy has been the President and Chief Executive Officer of the
Company for more than the past five years.
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<PAGE>
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, a certified public accountant, 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.
Each of the foregoing nominees is a current director of the Company,
elected as such at the June 4, 1999 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, among other matters, 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.
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. As of the date of this Proxy Statement,
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
4
<PAGE>
conditions of such options and making all other determinations deemed necessary
for the administration of such plans.
During 1999, there were ten 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
Until December 31, 1999, each director who was not a full-time employee of
the Company or any of its subsidiaries (a "Non-Employee Director" - i.e.,
Messrs. Carey, Cox and Den ) received an annual payment of $5,000. In addition,
each director (including Mr. Murphy) received compensation of $500 for
attendance at each day of duly called meetings of the Board of Directors, the
director who acted as chairman of the meeting received an additional $300 per
day for Board of Director meetings and the director who prepared the minutes for
the Board of Directors meeting received an additional $100 for acting as
secretary of the meeting. Effective January 1, 2000, these amounts were
increased to $6,000, $600, $500 and $150, respectively. Non-Employee Directors
also receive compensation of $300 for attendance at each meeting of a Committee
of the Board of Directors.
In addition to cash compensation, 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 "Director Stock Plan" and "Proposal to Ratify a 50,000 Share Increase
in the Number of Shares of Common Stock Reserved for Grants under the 1995
Director Stock Plan".
EXECUTIVE OFFICERS OF THE COMPANY
As of the date of this Proxy Statement, the executive officers of the
Company are:
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
A. Paul Cox, Jr. 62 Chairman of the Board of Directors
Gerard F. Murphy 64 President and Chief Executive Officer and Director
James H. Halpin 57 Executive Vice President - Sales and Marketing
Joseph M. Burke 58 Vice President - Finance
Thomas J. Carey 63 Secretary and Director
Fred Den 58 Treasurer and Director
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. 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. Mr. Cox has been the Chairman of the Board
since October 1996; and, for more than the past five years, he has been the sole
proprietor of Asset Protection Company, a management consulting firm.
In addition to the foregoing, the Company considers Messrs. Timothy J.
Eames and Kenneth Andersen to be significant employees of the Company. Mr.
Eames, 64, has been associated with the Company for more than the past five
years as Vice President - Sales. Mr. Andersen, 51, has been associated with the
Company for more than the past five years as Chief Technology Officer.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary of Compensation in fiscal years ended December 31, 1999, 1998 and 1997
(respectively, "Fiscal 1999", "Fiscal 1998" and "Fiscal 1997")
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to or earned (on an accrual
basis) by the Company's chief executive officer and each other executive officer
of the Company earning more than $100,000 during Fiscal 1999, Fiscal 1998 or
Fiscal 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
------ -------
SECURITIES
NAME AND FISCAL UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) PAYOUTS($)(5) COMPENSATION
- ------------------ ---- ------ ----- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerard F. Murphy 1999 $154,500 $50,000 2,000(1) $45,172 $1,695(6)
President and 1998 $154,500 $10,000 6,000(3) $40,538 $1,695(6)
Chief Exec. Officer 1997 $153,509 $10,000 -- $38,163 $1,695(6)
James H. Halpin 1999 $232,766 37,375(2) $27,974 --
Exec. V.P. - 1998 $458,264 -- 3,000(3) $22,975 --
Sales & Marketing 1997 $252,564 -- 5,000(4) $20,600 --
</TABLE>
- -------------------------
(1) Represents incentive options granted on January 21, 1999. See "Common
Stock Incentive Plan".
(2) Represents incentive options granted on May 3, 1999. See "Common Stock
Incentive Plan".
(3) Represents incentive stock options granted on March 8, 1998. See "Common
Stock Incentive Plan".
(4) Represents incentive stock options granted on February 14, 1997. See
"Common Stock Incentive Plan".
(5) 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.
(6) 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
The Common Stock Incentive (the "Incentive Plan") is intended to provide
an incentive to continued employment or association of key employees and other
individuals 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 individuals, as well as to associate the
interests of such persons with those of the Company and its shareholders. The
Incentive Plan currently authorizes the issuance, until January 2003, of options
covering up to 480,000 shares of Common Stock, subject to adjustment in certain
circumstances. See "Proposal to Ratify a 100,000 Share Increase in the Number of
Shares of Common Stock Reserved for Grants under the Common Stock Incentive
Plan."
6
<PAGE>
Director Stock Plan
The 1995 Director Stock Plan (the "Directors Plan") is intended to help
the Company attract and retain as directors of the Company and its subsidiaries
qualified persons of ability and with potential. The Directors Plan currently
authorizes the issuance, until October 2005, of options for, and shares of,
Common Stock covering up to 150,000 shares of Common Stock, subject to
adjustments in certain instances. See "Proposal to Ratify a 50,000 Share
Increase in the Number of Shares of Common Stock Reserved for Grants under the
1995 Director Stock Plan." The Directors 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.
Stock Options Granted in Fiscal 1999
The following table sets forth information concerning individual grants of
stock options made during Fiscal 1999 to each executive officer listed in the
Summary Compensation table. The Company did not grant any stock appreciation
rights during Fiscal 1999.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED
UNDERLYING OPTIONS TO EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR (PER SHARE) DATE
- ---- ----------- ----------- ----------- ----
<S> <C> <C> <C> <C>
Gerard F. Murphy 2,000 4.4% $0.96 1/21/2004
James H. Halpin 37,375 82.0% $0.70 5/03/2009
</TABLE>
Mr. Murphy's option was granted by the Compensation Committee on January
21, 1999 pursuant to the Incentive Plan, when the fair market value of the
Common Stock was $.75 per share. Mr. Halpin's option was granted by the
Compensation Committee on May 3, 1999 pursuant to the Incentive Plan, when the
fair market value of the Common Shares was $.70 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 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.
The following table sets forth information concerning options granted
under the Incentive Plan and the Directors Plan during fiscal 1999 to (a) each
nominee for election as a director (b) each of the Company's executive officers
named in the Summary Compensation Table above, (c) all current executive
officers of the Company (which include all of the current directors) as a group
(six persons), and (d) all current employees of the Company (other than
executive officers) as a group.
<TABLE>
<CAPTION>
(A) (B)
SHARES UNDERLYING SHARES UNDERLYING
NAMES AND POSITIONS OF OPTIONS GRANTED OPTIONS GRANTED TOTAL OF
PLAN BENEFICIARIES PURSUANT TO INCENTIVE PURSUANT TO DIRECTOR COLUMNS
- ---------------------- PLAN DURING STOCK PLAN DURING (A) AND (B)
FISCAL 1999 FISCAL 1999
--------------------- -------------------- -----------
<S> <C> <C> <C>
Gerard F. Murphy, President
and Chief Executive Officer
and Director 2,000 -- 2,000
Fred Den, Director and
Secretary -- 10,000 10,000
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
(A) (B)
SHARES UNDERLYING SHARES UNDERLYING
NAMES AND POSITIONS OF OPTIONS GRANTED OPTIONS GRANTED TOTAL OF
PLAN BENEFICIARIES PURSUANT TO INCENTIVE PURSUANT TO DIRECTOR COLUMNS
- ---------------------- PLAN DURING STOCK PLAN DURING (A) AND (B)
FISCAL 1999 FISCAL 1999
--------------------- -------------------- -----------
<S> <C> <C> <C>
Thomas J. Carey, Director
and Treasurer -- 10,000 10,000
James H. Halpin, Executive
Vice President 37,375 -- 37,375
All Executive Officers (as
a Group) 40,375 30,000 70,375
All Current Employees other
than Executive Officers
(as a Group) 5,250 -- 5,250
</TABLE>
Stock Options Held at End of Fiscal 1999
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, 1999. No options to purchase Common Stock
were exercised during Fiscal 1999 by the named executive officers and no stock
appreciation rights were outstanding during Fiscal 1999.
NUMBER OF SHARES OF COMMON STOCK VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
---------------------------- -----------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Gerard F. Murphy 10,375 6,000 $ 2,098 $ 1,916
James H. Halpin 27,831 41,167 $23,124 $24,311
- -------------------------
(1) On December 31, 1999, the average of the high bid and low asked prices of
the Common Stock was $1.3126 per share. On April 14, 2000, based upon the
average of the high bid and low asked price of the Common Stock on such
date ($1.78 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 $11,899 and $46,039 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.
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 1999, 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".
8
<PAGE>
LONG-TERM INCENTIVE PLANS-AWARDS IN FISCAL 1999
-----------------------------------------------
DOLLAR AMOUNT
NAME ALLOCATED FOR 1999 PERIOD UNTIL MATURATION(1) FUTURE PAYOUT
- ---- ------------------ -------------------------- -------------
Gerard F. Murphy $4,634 -- (2)
James H. Halpin $4,999 -- (2)
- -------------------------
(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 of 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.
Mr. Murphy is employed under an employment agreement entered into in 1996
which currently expires on December 31, 2000. Mr. Murphy currently is receiving
a base annual salary of $159,500. 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. In addition, in February 2000, Mr. Murphy was granted a
cash bonus of $50,000.
Pursuant to a written arrangement with Mr. Halpin, effective January 1,
1995, Mr. Halpin was receiving an annual base salary of $73,000 plus a 5%
commission on sales to certain specified accounts and a 0.5% commission on all
other sales by the Company. Mr. Halpin's employment arrangement was modified,
effective January 1, 1999, to increase his base salary to $125,000 and for a
commission of 1% on all sales.
Pursuant to the Directors Plan, which covers each Non-Employee Director of
the Company, all options granted thereunder become immediately exercisable in
the event of a "Change of Control" (as defined in the Directors Plan). See
"Directors Plan" and "Proposal to Ratify a 50,000 Share Increase in the Number
of Shares of Common Stock Reserved for Grants under the 1995 Director Stock
Plan." In November 1999, the Board of Directors approved the following
compensation arrangements in the event of a Change of Control: (i) a bonus of
$50,000 to each then incumbent director, (ii) an award of 15,000 shares of
Common Stock to each then incumbent director, and (iii) awards to selected key
employees from a bonus pool not to exceed $200,000.
Certain Relationships and Related Transactions
At the Board of Directors meeting held in March 2000, after Mr. Cox
announced his intended resignation as a director effective June 5, 2000, the
Board of Directors agreed to enter into a consulting arrangement with Mr. Cox
through December 31, 2001, pursuant to which he will receive $5,000 in 2000 and
$15,000 in 2001.
On April 1, 1999, the Company loaned $40,000 to Fred Den, a director of
the Company. The loan, which bears interest at 9% per annum, is secured by
100,000 shares of the Company's Common Stock owned by Mr. Den. The loan, which
was originally scheduled to mature on March 15, 2000, has been extended to March
15, 2001.
9
<PAGE>
PROPOSAL TO RATIFY A 100,000 SHARE INCREASE IN THE NUMBER OF SHARES OF
COMMON STOCK RESERVED FOR GRANTS UNDER
THE COMMON STOCK INCENTIVE PLAN
(PROPOSAL 2 ON THE PROXY CARD)
GENERAL
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 May 12, 2000, options
for an aggregate of 173,340 shares of Common Stock, at per share exercise prices
ranging from $.28125 to $1.375, were outstanding under the Incentive Plan and
125,895 shares of Common Stock were available for the grant of future options
under the Incentive Plan.
On March 31, 2000, the Board of Directors, subject to ratification by the
Company's stockholders at the Annual Meeting, approved an increase of 100,000
shares of Common Stock in the number of shares to be reserved for issuance under
the Incentive Plan, bringing the aggregate number of shares authorized for
issuance under the Incentive Plan (assuming such ratification) to 580,000
shares.
The Board of Directors believes that the increase in the aggregate number
of shares reserved for issuance under the Incentive Plan will facilitate the
Company's continuing efforts to attract and retain qualified personnel as well
as provide the Company with increased flexibility in structuring compensation.
SUMMARY DESCRIPTION OF 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 may 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.
10
<PAGE>
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 Securities Exchange Act of 1934
(the "Exchange Act") or the rules promulgated thereunder.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion of certain relevant federal income tax effects
applicable to options granted under the Incentive 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.
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."
See "Proposal to Ratify a 50,000 Share Increase in the Number of Shares of
Common Stock Reserved for Grants Under the 1995 Directors Stock Plan -- Certain
Federal Income Tax Consequences" for a discussion of certain relevant federal
income tax effects applicable to Non-Qualified Stock Options.
REQUIRED VOTE
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 ratify the increase in the number of shares
of Common Stock to be authorized for grants under the Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE 100,000 SHARE INCREASE IN THE NUMBER OF SHARES OF COMMON
STOCK RESERVED FOR GRANTS UNDER THE INCENTIVE PLAN.
11
<PAGE>
PROPOSAL TO RATIFY A 50,000 SHARE INCREASE IN THE NUMBER
OF SHARES OF COMMON STOCK RESERVED FOR GRANTS
UNDER THE 1995 DIRECTOR STOCK PLAN
(PROPOSAL 3 ON THE PROXY CARD)
GENERAL
The Directors Plan was adopted by the Board of Directors in September 1995
and approved by the Company's stockholders on October 25, 1995. The Directors
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 Directors Plan (subject to anti-dilution and similar adjustments). No
options may be granted under the Directors Plan on or after October 31, 2005. As
of May 12, 2000, options for an aggregate of 90,000 shares of Common Stock, at a
per share exercise price ranging from $.7969 to $.9500, were outstanding under
the Directors Plan and 60,000 shares of Common Stock were available for the
future grants under the Directors Plan.
On March 31, 2000, the Board of Directors, subject to ratification by the
Company's stockholders at the Annual Meeting, approved an increase in the number
of shares to be reserved for issuance under the Directors Plan by 50,000 shares
of Common Stock, bringing the aggregate number of shares authorized for issuance
under the Directors Plan (assuming such ratification) to 200,000 shares.
The Board of Directors believes that the increase in the aggregate number
of shares reserved for issuance under the Director Stock Plan will facilitate
the Company's continuing efforts to attract and retain qualified directors as
well as provide the Company with increased flexibility in structuring
compensation.
SUMMARY DESCRIPTION OF THE DIRECTORS PLAN
The Directors 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 Directors 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 Directors Plan, administers and interprets the Directors Plan and adopts
rules and regulations related thereto.
Generally, each option granted under the Directors 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 Directors
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 Directors 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 optionee unless the optionee 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 Directors
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 Directors 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 Directors Plan also provides for acceleration of the
exercisability of options in the event of a "Change in Control" (as defined in
the Directors Plan).
12
<PAGE>
The Board of Directors, at any time and from time to time, may suspend,
terminate, modify or amend the Directors Plan; provided however, that the
Directors Plan may not be amended without stockholder approval to the extent
that such approval is required (i) for the Directors 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 optionee.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion of certain relevant federal income tax effects
applicable to the Common Stock and Non-Qualified Stock Options, including all of
the options granted under the Directors 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 with
respect thereto terminates. At that time, the Non-Employee Director will
recognize income measured by the fair market value of the shares of Common Stock
issued as of that date. 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 Directors 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
13
<PAGE>
required to be withheld on the amount of ordinary income resulting from the
exercise of a Non-Qualified Stock Option.
REQUIRED VOTE
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 ratify the increase in the number of shares
of Common Stock to be authorized for grants under the Directors Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE 50,000 SHARE INCREASE IN THE NUMBER OF SHARES OF COMMON
STOCK RESERVED FOR GRANTS UNDER THE DIRECTORS PLAN.
SELECTION OF INDEPENDENT AUDITORS
(ITEM 4 ON THE PROXY CARD)
The Board of Directors has selected, subject to ratification by the
stockholders, the firm of Deloitte & Touche LLP as the independent auditors to
audit the Company's financial statements for its fiscal year ending December 31,
2000. Deloitte & Touche LLP 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.
OTHER MATTERS
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 1999 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, 1999, reports required by
Section 16(a) of the Exchange Act.
In June 1999, Thomas J. Carey, Andrew P. Cox, Jr. and Fred Den were each
granted incentive stock options to acquire 10,000 shares of Common Stock
pursuant to the Directors Plan and, in May 1999, James H. Halpin was granted
incentive stock options to acquire 37,375 shares of Common Stock pursuant to the
Incentive Plan; however, each of them inadvertently neglected to timely file a
Form 5 for his respective option grant. Such inadvertent failures to report
these transactions were corrected by each individual by the filing of a Form 4
in April 2000.
STOCKHOLDERS' PROPOSALS FOR THE 2000 ANNUAL MEETING
The Company intends to hold the 2000 annual meeting of stockholders of the
Company during or about the last week of June 2000. Stockholder proposals for
the 2000 annual meeting of stockholders must be received by the Company a
reasonable time before the solicitation is made with respect to the 2000 annual
meeting of stockholders for the proposal to be considered for inclusion in the
proxy statement for such meeting. Any proposal received after February 29, 2000
14
<PAGE>
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.
GENERAL
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
May 26, 2000
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, 1999, 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.
15
<PAGE>
ATS MONEY SYSTEMS, INC.
PROXY - ANNUAL MEETING OF STOCKHOLDERS - JUNE 30, 2000
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned stockholder of ATS Money Systems, Inc. hereby
constitutes and appoints Gerard F. Murphy and Thomas J. Carey, 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, June 30, 2000, 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)
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Election of Directors FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY [ ]
as marked to the contrary below) to vote for all nominees
</TABLE>
THOMAS J. CAREY, 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 a 100,000 share increase in the number of shares of
Common Stock reserved for grants under the Common Stock Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to ratify a 50,000 share increase in the number of shares of
Common Stock reserved for grants under the 1995 Director Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000.
[ ] 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.)
<PAGE>
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, 1999.
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: June __, 2000
-------------------------------------
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.
