<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-12
</TABLE>
--------------------------------------------------------------------------------
(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):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
[TIDEL TECHNOLOGIES, INC. LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 8, 2001
The Annual Meeting (the "Meeting") of Stockholders of Tidel
Technologies, Inc. (the "Company") will be held at the DoubleTree Hotel - Post
Oak, 2001 Post Oak Blvd., Houston, Texas 77056, on Thursday, February 8, 2001,
at 11:00 A.M., Central Standard Time. The purposes of the Meeting are to vote
upon:
1. The election of six (6) directors to hold office until the next
annual meeting in 2002 or until their successors have been elected
and qualified;
2. The selection of KPMG LLP as the Company's independent auditors for
the fiscal year ending September 30, 2001;
3. Approval of an amendment to the 1997 Long-Term Incentive Plan to
increase the maximum number of shares of Common Stock reserved for
issuance thereunder from 1,000,000 to 2,000,000; and
4. Such other business as may properly come before the Meeting and any
adjournment thereof.
The Board of Directors fixed the close of business on Wednesday,
January 3, 2001, as the record date for determining stockholders entitled to
notice of, and to vote at, the Meeting and any adjournment thereof. A complete
list of stockholders entitled to vote at the Meeting will be available at the
offices of the Company, 5847 San Felipe, Suite 900, Houston, Texas 77057, for
not less than ten days prior to the Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. EVEN
IF YOU PLAN TO ATTEND THE MEETING, WE HOPE THAT YOU WILL PROMPTLY SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. A PROXY WILL NOT BE VALID
UNLESS IT IS RECEIVED AT THE OFFICE OF COMPUTERSHARE INVESTOR SERVICES LLC, 2
NORTH LASALLE STREET, CHICAGO, IL 60602, PRIOR TO THE DATE FIXED FOR THE
MEETING. MAILING YOUR PROXY WILL NOT LIMIT YOUR RIGHT TO ATTEND IN PERSON OR
VOTE AT THE MEETING.
James T. Rash
Chairman and
Chief Executive Officer
January 9, 2001
<PAGE> 3
TIDEL TECHNOLOGIES, INC.
5847 SAN FELIPE
SUITE 900
HOUSTON, TEXAS 77057
(713) 783-8200
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Tidel Technologies, Inc., a Delaware
corporation (the "Company") of proxies in the accompanying form to be
used at the Annual Meeting (the "Meeting") of Stockholders of the
Company to be held on February 8, 2001, and any adjournment thereof.
This Proxy Statement, the accompanying form of proxy and the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2000
(the "2000 Annual Report") were mailed to stockholders on or about
January 9, 2001. The shares represented by the proxies received
pursuant to the solicitation made hereby and not revoked will be voted
at the Meeting.
The Company held its last annual meeting of stockholders in July 1999.
Due to various corporate transactions including the issuance of
$18,000,000 aggregate principal amount of convertible debentures (all
as more fully described in the 2000 Annual Report), the Company was
unable to hold an Annual Meeting of Stockholders during the 2000
calendar year. Accordingly, the Meeting constitutes the Company's
Annual Meeting of Stockholders for 2000 and 2001. Since the Company's
fiscal year end is September 30th, the Company has determined that it
would be more appropriate to deliver the 2000 Annual Report with this
proxy statement, as opposed to the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1999, so that stockholders
receive the most current information relating to the Company. In the
future, the Company anticipates holding its annual meeting in February
of each calendar year so that the date of the annual meeting is more
closely aligned with the end of the Company's fiscal year.
MEETING OF STOCKHOLDERS
The Meeting will be held at the DoubleTree Hotel - Post Oak, 2001 Post
Oak Blvd., Houston, Texas 77056, on Thursday, February 8, 2001, at
11:00 A.M., Central Standard Time.
RECORD DATE AND VOTING
The Board of Directors fixed the close of business on Wednesday,
January 3, 2001, as the record date (the "Record Date") for the
determination of holders of outstanding shares of the Company entitled
to notice of and to vote on all matters presented at the Meeting. Such
stockholders will be entitled to one vote for each share held on each
matter submitted to a vote at the Meeting. On the Record Date, there
were 17,376,210 shares of the Company's Common Stock, $.01 par value
(the "Common Stock"), issued and outstanding, each of which is entitled
to one vote on each matter to be voted upon.
PURPOSES OF THE MEETING
The purposes of the Meeting are to vote upon (i) the election of six
(6) directors for the ensuing year, (ii) the selection of KPMG LLP as
the Company's independent auditors for the fiscal year ending September
30, 2001, (iii) approval of an amendment to the 1997 Long-Term
Incentive Plan (the "1997 Plan") to
<PAGE> 4
increase the maximum number of shares of Common Stock reserved for
issuance thereunder from 1,000,000 to 2,000,000 and (iv) such other
business as may properly come before the Meeting and any adjournment
thereof.
QUORUM AND REQUIRED VOTE
The presence, either in person or by properly executed proxy, of the
holders of a majority of the outstanding shares of Common Stock of the
Company is necessary to constitute a quorum for the purpose of acting
on the matters referred to in the Notice of Annual Meeting accompanying
this Proxy Statement and any other proposals which may properly come
before the Meeting. In the tabulation of votes, proxies marked
"abstain" will be counted for the purposes of determining the presence
of a quorum and for calculating the number of shares represented at the
Meeting but will not be counted as either affirmative votes or negative
votes. So-called broker "non-votes" (i.e., shares held by brokers,
fiduciaries or other nominees which are not permitted to vote due to
the absence of instructions from beneficial owners) will be deemed to
be abstentions and counted solely for quorum purposes.
PROXIES
A stockholder who has given a proxy may revoke it by voting in person
at the Meeting, by giving written notice of revocation to the Secretary
of the Company or by giving a later dated proxy at any time before
voting.
On the matters coming before the Meeting as to which a choice has been
specified by a stockholder by means of the ballot on the proxy, the
shares will be voted accordingly. If no choice is so specified, the
shares will be voted (i) FOR the election of the nominees for director
listed in this Proxy Statement, (ii) FOR the selection of KPMG LLP as
the Company's independent auditors and (iii) FOR approval of an
amendment to the 1997 Plan to increase the maximum number of shares of
Common Stock reserved for issuance thereunder from 1,000,000 to
2,000,000, all as referred to in Items 1, 2 and 3, respectively, in the
Notice of Annual Meeting of Stockholders and as described in this Proxy
Statement.
The form of proxy accompanying this Proxy Statement confers
discretionary authority upon the named proxyholders with respect to
amendments or variations to the matters identified in the accompanying
Notice of Meeting and with respect to any other matters which may
properly come before the Meeting. As of the date of this Proxy
Statement, management of the Company knows of no such amendment or
variation or of any matters expected to come before the Meeting which
are not referred to in the accompanying Notice of Annual Meeting.
SUBSTITUTED PROXIES
The persons named in the accompanying form of proxy have been selected
by the Company's management to act as proxies. A STOCKHOLDER DESIRING
TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A STOCKHOLDER) TO
REPRESENT HIM AT THE MEETING MAY DO SO, EITHER BY: (a) striking out the
printed names and inserting the desired person's name in the blank
space directly above the names so stricken or (b) by completing another
proper form of proxy.
COSTS OF SOLICITATION
The Company will bear the cost of printing and mailing proxy materials,
including the reasonable expenses of brokerage firms and others for
forwarding the proxy materials to beneficial owners of
2
<PAGE> 5
Common Stock. In addition to solicitation by mail, solicitation may be
made by certain directors, officers and employees of the Company, or
firms specializing in solicitation; and may be made in person or by
telephone or telegraph. No additional compensation will be paid to any
director, officer or employee of the Company for such solicitation.
ITEM 1: ELECTION OF DIRECTORS
The Company has one class of directors, each serving a one-year term.
Directors elected at the Meeting will serve until the 2002 Annual
Meeting of Stockholders and until their respective successors are duly
elected and qualified.
INFORMATION WITH RESPECT TO NOMINEES AND DIRECTORS
Set forth below are the names and ages of the nominees for directors
and their principal occupations at present and for the past five years.
There are, to the knowledge of the Company, no agreements or
understandings by which these individuals were so selected. No family
relationships exist between any directors or executive officers (as
such term is defined in Item 402 of Regulation S-K). Messrs. Rash,
Britton, Clay and Levenick are currently serving as directors of the
Company.
<TABLE>
<CAPTION>
All Offices
with the Director
Name Age Company Since
---- --- ------- -----
<S> <C> <C> <C>
James T. Rash 60 Chairman, 1987
Chief Executive and
Financial Officer,
and Director
James L. Britton, III 65 Director 1990
Jerrell G. Clay 59 Director 1990
Mark K. Levenick 41 Director, Chief Operating Officer, and 1995
President of the Company's operating
subsidiaries
Raymond P. Landry 61 Director Nominee --
Michael F. Hudson 48 Director Nominee, Executive Vice President, --
and Chief Operating Officer of the Company's
operating subsidiaries
</TABLE>
BUSINESS BACKGROUND
The following is a summary of the business background and experience of
each of the persons named above:
JAMES T. RASH joined the Company in July 1987 and has served as Chief
Financial Officer and as a Director since that time. Since February
1989, he has also served continuously as Chairman of the Board of
Directors and Chief Executive Officer. Mr. Rash was a previously
practicing certified public accountant with the firm of Arthur Andersen
& Co. for approximately 10 years, and holds a Bachelor of Business
Administration degree from the University of Texas.
JAMES L. BRITTON, III has for more than the preceding 5 years managed
his own investments. Mr. Britton holds a Bachelor of Business
Administration degree from the University of Texas.
3
<PAGE> 6
JERRELL G. CLAY is Chief Executive Officer of 3 Mark Financial, Inc.,
an independent life insurance marketing organization, and has served as
President of one of its predecessors for more than the preceding five
years. Mr. Clay also serves as a member of the Management Advisory
Committee of Protective Life Insurance Company of Birmingham, Alabama.
MARK K. LEVENICK is Chief Operating Officer of the Company and has
served as Chief Executive Officer of the Company's operating
subsidiaries for more than the preceding 5 years. He holds a B.S.
degree from the University of Wisconsin at Whitewater.
RAYMOND P. LANDRY has for more than the preceding five years been
engaged in private business consulting to various companies, including
some entities in the Automated Teller Machine ("ATM") industry. Mr.
Landry has served as a senior executive or financial officer with three
publicly traded companies and several private concerns over the
preceding 28 years. Prior to that time, he was employed by the
consulting group of Arthur Andersen & Co. (now known as Accenture) for
10 years. Mr. Landry holds a B.S. degree in Business Administration
from Louisiana State University.
MICHAEL F. HUDSON is Executive Vice President of the Company and Chief
Operating Officer of the Company's principal operating subsidiary.
Prior to joining the Company in September 1993, he held various
positions with the Southland Corporation and its affiliates for more
than 18 years, concluding as President and Chief Executive Officer of
MoneyQuick, a large non-bank ATM network. Mr. Hudson is a recognized
authority in the ATM industry.
DIRECTOR COMPENSATION
Directors of the Company receive $1,000 per meeting as compensation for
their services as members of the Board of Directors. Directors who
serve on board committees receive $500 per committee meeting.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has established an Audit Committee and a
Compensation Committee. The Committees are composed of Messrs. Britton
and Clay, both of whom are independent, non-officer directors. If
elected, Mr. Landry will serve on both committees as an independent,
non-officer director. The Audit Committee, chaired by Mr. Britton, is
charged with reviewing the Company's financial statements, the scope
and performance of the audit and nonaudit services provided by the
Company's independent auditors and overseeing the Company's internal
accounting procedures. The Compensation Committee, chaired by Mr. Clay,
administers the Company's 1997 Plan. In addition, the Compensation
Committee reviews, evaluates and makes recommendations to the Board
with respect to such matters as the payment of direct salaries,
benefits and incentive compensation to the Company's executive officers
and the senior management personnel of the subsidiaries.
During the fiscal year ended September 30, 2000, the Board of
Directors, the Audit Committee and the Compensation Committee each held
one meeting. From time to time, the members of the Board of Directors
act by unanimous written consent pursuant to the laws of the State of
Delaware.
The Company does not presently have a nominating committee, and the
customary functions of such committee are being performed by the entire
board.
4
<PAGE> 7
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than 10% of
a registered class of its equity securities, to file reports of
ownership and changes in ownership of such equity securities with the
Securities and Exchange Commission ("SEC") and NASDAQ. Such entities
are also required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms filed.
Based solely on a review of the copies of such Forms furnished to the
Company and written representations that no Form 5s were required, the
Company believes that its directors and officers, excluding Michael F.
Hudson, and greater than 10% beneficial owners have complied with all
Section 16(a) filing requirements.
Based on a review of the Form 4 filed on January 8, 2001 and furnished
to the Company, Mr. Hudson had one (1) transaction on Form 4 due on or
about February 10, 2000 and three (3) transactions on Form 4 due on or
about September 10, 2000.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table sets forth as of the Record Date, the number of shares of
Common Stock beneficially owned by (i) the only persons known to the Company to
be the beneficial owners of more than 5% of its voting securities, (ii) each
current director, nominee for director, and executive officer (as such term is
defined in Item 402 of Regulation S-K) of the Company individually and (iii) by
all current directors and the executive officers of the Company as a group.
Except as otherwise indicated, and subject to applicable community property
laws, each person has sole investment and voting power with respect to the
shares shown. Ownership information is based upon information furnished by the
respective holders and contained in the Company's records.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial of Beneficial Percent of
Title of Class Owner Ownership Class (1)
---------------------- ----------------------------------- ----------------- ------------
<S> <C> <C> <C>
Common Stock Alliance Developments 1,081,362 6.2%
One Yorkdale Rd., Suite 510
North York, Ontario
M6A 3A1
Common Stock James L. Britton, III 476,700(2) 2.7%
3272 Westheimer, #3
Houston, Texas 77098
Common Stock James T. Rash 430,000(3) 2.4%
5847 San Felipe, Suite 900
Houston, Texas 77057
Common Stock Mark K. Levenick 300,000(4) 1.7%
2310 McDaniel Dr.
Carrollton, Texas 75006
Common Stock Jerrell G. Clay 241,405(5) 1.4%
2900 Wilcrest, Suite 245
Houston, Texas 77042
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial of Beneficial Percent of
Title of Class Owner Ownership Class (1)
---------------------- ----------------------------------- ----------------- ------------
<S> <C> <C> <C>
Common Stock Michael F. Hudson 123,200(6) *
2310 McDaniel Dr.
Carrollton, Texas 75006
Common Stock M. Flynt Moreland 113,200(7) *
2310 McDaniel Dr.
Carrollton, Texas 75006
Common Stock Eugene W. Moore 113,200(8) *
2310 McDaniel Dr.
Carrollton, Texas 75006
Common Stock Raymond P. Landry 18,500 *
908 Town & Country Blvd.
Ste. 120
Houston, Texas
Common Stock Directors and Executive Officers 1,797,705(9) 9.9%
as a group (7 persons)
</TABLE>
----------
* Less than one percent.
(1) Based upon 17,376,210 shares outstanding as of the Record Date.
(2) Includes 50,000 shares which could be acquired within 60 days of the Record
Date upon exercise of outstanding warrants at an exercise price of $1.25
per share.
(3) Includes 230,000 shares which could be acquired within 60 days of the
Record Date upon exercise of outstanding options and warrants at exercise
prices of (i) $0.625 per share as to 50,000 shares, (ii) $1.00 per share as
to 50,000 shares, (iii) $1.25 per share as to 50,000 shares and (iv)
$1.6875 per share as to 80,000 shares.
(4) Includes 200,000 shares which could be acquired within 60 days of the
Record Date upon exercise of outstanding warrants and options at exercise
prices of (i) $0.875 per share as to 25,000 shares, (ii) $1.25 per share as
to 70,000 shares, (iii) $1.4375 per share as to 25,000 shares, (iv) $1.75
per share as to 30,000 shares and (v) $2.50 per share as to 50,000 shares.
(5) Includes 100,000 shares which could be acquired within 60 days of the
Record Date upon exercise of outstanding warrants at exercise prices of (i)
$1.00 per share as to 50,000 shares and (ii) $1.25 per share as to 50,000
shares.
(6) Includes 43,500 shares which could be acquired within 60 days of the Record
Date upon exercise of outstanding options and warrants at exercise prices
of (i) $2.50 per share as to 33,500 shares and (ii) $5.00 per share as to
10,000 shares.
(7) Includes 52,400 shares which could be acquired within 60 days of the Record
Date upon exercise of outstanding options at exercise prices of (i) $1.25
per share as to 21,600 shares, (ii) $1.875 per share as to 20,000 shares
and (iii) $2.50 per share as to 10,800 shares.
(8) Includes 110,700 shares which could be acquired within 60 days of the
Record Date upon exercise of outstanding options at exercise prices of (i)
$0.875 per share as to 10,000 shares, (ii) $1.25 per share as to 21,600
shares, (iii) $1.4375 per share as to 10,000 shares, (iv) $1.75 per share
as to 30,000 shares, (v) $1.875 per share as to 17,500 shares and (vi)
$2.50 per share as to 21,600 shares.
6
<PAGE> 9
(9) Includes the 50,000 shares referred to in Note (2) above, the 230,000
shares referred to in Note (3) above, the 200,000 shares referred to in
Note (4) above, the 100,000 shares referred to in Note (5) above, the
43,500 shares referred to in Note (6) above, the 52,400 shares referred to
in Note (7) above, and the 110,700 shares referred to in Note (8) above
obtainable upon exercise of outstanding warrants and options.
EXECUTIVE COMPENSATION
The following table sets forth the amount of all cash and other compensation
paid by the Company for services rendered during the fiscal years ended
September 30, 2000, 1999 and 1998 to James T. Rash, the Chairman of the Board
and Chief Executive Officer, and the Company's other executive officers, as such
term is defined in Item 402 of Regulation S-K, whose compensation exceeded
$100,000 during the fiscal year ended September 30, 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Name and Principal ------------------------------------------ ------------
Position Year Salary(1) Bonus Options
------------------ ---- ---------- ---------- -------
<S> <C> <C> <C> <C>
James T. Rash 2000 $ 196,000 $ 225,000 75,000
Chief Executive and 1999 182,292 90,000 100,000
Financial Officer 1998 182,292 -- --
Mark K. Levenick 2000 $ 269,000 $ 278,000 75,000
Chief Operating Officer 1999 250,000 85,500 100,000
1998 195,000 97,500 --
Michael F. Hudson 2000 $ 210,000 $ 219,000 50,000
Executive Vice President 1999 195,000 66,700 67,000
1998 125,000 62,500 --
M. Flynt Moreland 2000 $ 150,000 $ 134,000 20,000
Senior Vice President - 1999 129,000 29,000 21,600
Research & Development 1998 100,000 33,000 --
Eugene W. Moore 2000 $ 118,000 $ 90,000 17,500
Senior Vice President - 1999 110,000 25,000 21,600
Operations 1998 100,000 33,000 --
</TABLE>
----------
(1) Certain of the officers of the Company routinely receive other benefits
from the Company, the amounts of which are customary in the industry. The
Company has concluded, after reasonable inquiry, that the aggregate amounts
of such benefits during each of the fiscal years ended September 30, 1998,
1999 and 2000 did not exceed the lesser of $50,000 or 100% of the
compensation set forth as to any named individual.
The following tables set forth certain information concerning individual grants
of stock options to the Company's executive officers during the fiscal years
ended September 30, 1999 and 2000. The Company did not grant any stock
appreciation rights during the fiscal years ended September 30, 1999 and 2000.
7
<PAGE> 10
OPTION GRANTS IN FISCAL YEAR
ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------ Potential Realizable Value at
% of Total Assumed Annual Rates of Stock Price
Number Options Appreciation for Option Term (2)
of Shares Granted to ---------------------------------------
Underlying Employees Exercise Expiration 5% 10%
Name Options in Year Price(1) Date ($) ($)
---------------------- ------- ------- -------- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
James T. Rash 75,000 27.0% $ 1.875 10/19/09 $ 88,400 $ 224,100
Mark K. Levenick 75,000 27.0% 1.875 10/19/09 88,400 224,100
Michael F. Hudson 50,000 18.0% 1.875 10/19/09 59,000 149,400
M. Flynt Moreland 20,000 7.2% 1.875 10/19/09 23,584 59,765
Eugene W. Moore 17,500 6.3% 1.875 10/19/09 20,636 52,295
</TABLE>
OPTION GRANTS IN FISCAL YEAR
ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------ Potential Realizable Value at
% of Total Assumed Annual Rates of Stock Price
Number Options Appreciation for Option Term (2)
of Shares Granted to ---------------------------------------
Underlying Employees Exercise Expiration 5% 10%
Name Options in Year Price(1) Date ($) ($)
---------------------- ------- ------- -------- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
James T. Rash 100,000 22.6% $ 1.25 11/13/08 $ 78,600 $ 199,200
Mark K. Levenick 100,000 22.6% 1.25 11/13/08 78,600 199,200
Michael F. Hudson 67,000 15.1% 1.25 11/13/08 52,662 133,464
M. Flynt Moreland 21,600 5.0% 1.25 11/13/08 16,980 43,031
Eugene W. Moore 21,600 5.0% 1.25 11/13/08 16,980 43,031
</TABLE>
----------
(1) The option exercise prices listed on the foregoing tables may be paid in
shares of the Common Stock owned by the executive, in cash, or a
combination of any of the foregoing, as determined by the Compensation
Committee administering the 1997 Plan. The exercise price is equal to the
fair market value of the Common Stock on date of grant.
(2) The potential realizable value portion of the foregoing tables illustrates
values that might be realized upon exercise of the options immediately
prior to the expiration of their term assuming the specified compounded
rates of appreciation of the Company's Common Stock over the term of the
options. These numbers do not take into account provisions of certain
options providing for termination of the option following termination of
employment, non-transferability or differences in vesting periods.
Regardless of the theoretical value of an option, its ultimate value will
depend on the market value of the Common Stock at a future date, and that
value will depend on a variety of factors, including the overall condition
of the stock market and the Company's results of operations and financial
condition. There can be no assurance that the values reflected in this
table will be achieved.
The following table provides (i) information relating to the exercise of stock
options by Messrs. Hudson and Moreland (ii) the number of options exercisable by
the respective optionees and the respective valuations at September 30, 2000. No
options were exercised by executive officers pursuant to the Company's employee
stock option plans during the fiscal year ended September 30, 1999.
8
<PAGE> 11
OPTIONS EXERCISABLE AND RELATED VALUES
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options at in-the-Money Options at
Shares September 30, 2000 September 30, 2000
acquired Value (Shares) ($)(2)
on exercise realized -------------------------- --------------------------
Name (#)(1) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James T. Rash -- -- 80,000 175,000 $420,040 $ 948,525
Mark K. Levenick -- -- 150,000 225,000 780,387 1,170,425
Michael F. Hudson 83,500 $602,088 -- 150,500 -- 782,919
M. Flynt Moreland 60,800 623,205 -- 52,400 -- 272,051
Eugene W. Moore -- -- 60,800 49,900 319,205 259,393
</TABLE>
----------
(1) Based on the closing price of a share of Common Stock as reported on the
Nasdaq Stock Market on the date of exercise of (i) $8.906 as to Mr.
Hudson's exercise and (ii) $11.938 as to Mr. Moreland's exercise.
(2) Based on the closing price of a share of Common Stock on September 30, 2000
of $6.938 as reported on the Nasdaq Stock Market.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN AMONG TIDEL TECHNOLOGIES, INC.,
PEER GROUP INDEX AND NASDAQ MARKET INDEX
<TABLE>
<CAPTION>
1996(1) 1997 1998 1999 2000
------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Tidel Technologies, Inc. $205.88 $341.18 $147.06 $185.30 $652.99
Peer group (2) 152.27 196.14 109.83 134.55 168.69
NASDAQ Market Index 116.75 158.69 164.91 266.79 364.95
</TABLE>
----------
(1) Assumes $100 invested on October 1, 1995 and no dividends paid in any year
thereafter.
(2) Peer group consists of companies utilizing the category for Calculating and
Accounting Equipment, SIC 3578.
EMPLOYMENT AGREEMENTS
Messrs. Rash, Levenick, Hudson, Moreland and Moore have employment agreements
with the Company which provide for minimum annual salaries of $225,000,
$262,500, $204,750, $150,000 and $115,500, respectively, over a three-year term
ending January 2003, with certain change of control provisions. In the event of
a change of control, the executive officers are entitled to all compensation due
through the balance of the term of the agreements, and immediate vesting of all
restricted stock, performance units, stock options, stock appreciation rights,
warrants and employee benefit plans. Similarly, two (2) non-executive officers
have employment agreements with the Company which provide for minimum annual
salaries of $90,000 to $100,000 for the same term, which also contain similar
change of control provisions.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is composed entirely of
non-employee directors. The Committee's principal functions are to establish
base salary levels, to determine and measure achievement of
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<PAGE> 12
corporate and individual goals for the named executive officers and other
executive officers on an annual basis, and to select the participants, measure
achievement of objectives and determine awards under the 1997 Plan. In addition,
the Committee reviews any proposed changes to any benefit plans of the Company
such as deferred compensation plans and 401(k) Savings Plans. The Committee's
recommendations are subject to the approval of the Board of Directors.
The Committee's goal is to establish a motivational compensation plan for
executives that will enable the Company to attract and retain those individuals
deemed most qualified to improve and enhance its future performance. The Company
currently has three basic elements in the compensation for its executive
officers. These elements are (a) base salary compensation, (b) annual incentive
compensation and (c) long-term incentive compensation. These elements of
compensation recognize both individual and corporate performance. Annual
incentive compensation provides awards for performance over a shorter period,
while long-term incentive compensation optimizes rewards for performance over a
longer term based upon achievement of cumulative earnings. In addition, stock
option grants result in a reward when the market value appreciates in relation
to the option price.
In 1997, the Company retained KPMG LLP to establish the base criteria and
performance parameters for all aspects of compensation for each executive
officer. On an annual basis, the Committee conducts an evaluation to update the
data and establish the objectives for the next year within the guidelines
recommended by KPMG LLP in their initial study.
The latest evaluation, performed in December 1999 to set objectives for fiscal
2000, included a review of compensation policies of companies similar to the
Company in size, industry and geographic location. To the greatest extent
possible, the survey included some of the companies with which the Company
competes for talented executives.
The following is a discussion of each element of compensation:
BASE SALARY COMPENSATION
The base salary for all executive officers is reviewed annually, and the
Committee's review process continues throughout the year. This review includes
an analysis of past and expected future performance of the executive officers,
as well as the responsibilities and qualifications of the executive officers
individually and the performance of the Company in comparison with companies
similar to the Company. The Committee's compensation policy is to generally set
base salary at or below median.
ANNUAL INCENTIVE COMPENSATION
The Annual Incentive Plan (the "Incentive Plan") recognizes the performance of
the named executive officers, other executive officers and key managers who
contribute to the Company's success. These participants have the greatest impact
on the profitability of the Company. In general, the participants with the most
significant responsibility have a significant portion of their cash compensation
tied to the Incentive Plan. The performance criteria, which are described in
more detail below, reflect a combination of corporate operating profit and
specific individual goals and objectives.
At the beginning of each year, the Committee establishes annual performance
goals for the Company which are based on Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA"). The performance goals include
threshold and maximum amounts for achievement. The Committee established the
threshold level for 2000 at a level that required the Company to exceed by 14
percent the EBITDA achieved in 1999 before any payout could occur and with the
maximum amount at 67 percent over 1999. At the same time, the Committee
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<PAGE> 13
reviewed, amended and approved individual personal performance goals and
objectives for the named executive officers. No Incentive Plan compensation is
paid if the Company does not achieve at least the threshold amount of its EBITDA
goal. In 2000, the Company did exceed the maximum level of its performance
goals, and the executive officers received Incentive Compensation. Accordingly,
Messrs. Rash, Levenick, Hudson, Moreland and Moore received $225,000, $262,500,
$204,750, $99,000 and $76,230, respectively, of incentive compensation under the
Incentive Plan.
LONG-TERM INCENTIVE COMPENSATION
The Committee believes that stock options provide an essential competitive
component in the executive compensation program. Also, the Committee believes
that stock options align the interests of the named executive officers and other
executive officers with those of the Company's shareholders since no benefit
inures to the executive officers unless stock price appreciation occurs over a
period of years. Information on the stock options granted to the named executive
officers is included in the table entitled Option Grants in the Fiscal Year
Ended September 30, 2000.
CHIEF EXECUTIVE OFFICER COMPENSATION
James T. Rash, who currently continues to serve as Chairman of the Board of the
Company, also served as Chief Executive Officer and Chief Financial Officer
throughout 2000. He participated in all three elements of compensation
previously discussed.
The criteria used in setting Mr. Rash's total compensation plan include his
longevity with the Company, his experience, the financial performance of the
Company and the increase in market capitalization of the Company.
COMPENSATION COMMITTEE
Jerrell G. Clay, Chairman
James L. Britton, III
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, the Company provides certain administrative and clerical
services to three entities with whom James T. Rash, Chairman, and Jerrell G.
Clay, Director, have an affiliation. Fees earned by the Company for these
services were $26,000 for the year ended September 30, 1999; however, the
Company earned no such fees for the year ended September 30, 2000. Amounts due
to the Company from these entities totaled $238,000 at September 30, 2000.
In September 2000, the Company loaned $141,600 to Michael F. Hudson, Executive
Vice President, in a six-month promissory note bearing interest at 10% per
annum. Subsequent to September 2000, the Company loaned Mr. Hudson an additional
$100,000 on similar terms and conditions.
ITEM 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP to serve as the Company's
independent auditors. KPMG LLP has served as the Company's independent auditors
since October 1991. While it is not required to do so, the Board of Directors is
submitting the selection of that firm as the Company's independent auditors for
the fiscal year ending September 30, 2001 to stockholders for ratification in
order to ascertain the stockholders views. Such ratification of the selection of
KPMG LLP will require the affirmative vote of the holders of a majority of
11
<PAGE> 14
the shares of Common Stock of the Company entitled to vote thereon and
represented at the Meeting. The Board of Directors will reconsider its selection
should the stockholder votes evidence disapproval.
Representatives of KPMG LLP are expected to be present at the Meeting and
available to respond to appropriate questions. Such representatives will have
the opportunity to make a statement if they desire to do so.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF
THE SELECTION OF KPMG LLP. BROKER NON-VOTES AND PROXY CARDS MARKED "ABSTAIN"
WITH RESPECT TO THIS PROPOSAL WILL BE COUNTED TOWARDS A QUORUM. ABSTENTIONS WILL
BE COUNTED AS A VOTE AGAINST THIS PROPOSAL AND BROKER NON-VOTES WILL NOT BE
COUNTED FOR PURPOSES OF DETERMINING WHETHER THIS PROPOSAL HAS BEEN APPROVED.
ITEM 3: APPROVAL OF AN AMENDMENT TO THE 1997 LONG-TERM INCENTIVE PLAN
TO INCREASE THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK
RESERVED FOR ISSUANCE THEREUNDER FROM 1,000,000 TO 2,000,000.
The Board of Directors has approved an amendment to the 1997 Long-Term Incentive
Plan (the "1997 Plan") to increase the maximum number of shares of common stock
reserved for issuance thereunder from 1,000,000 to 2,000,000. The 1997 Plan was
adopted by the Board of Directors and approved by the shareholders in 1997 in
order to (i) increase incentive and to encourage stock ownership on the part of
key employees and certain non-employee directors of the Company and its
affiliates, (ii) align the interests of key employees and certain non-employee
directors with those of the Company's stockholders and (iii) attract and retain
the services of outstanding individuals, upon whose judgement, interest and
special effort the Company's success is largely dependent. The following is a
summary of certain information about the 1997 Plan.
GENERAL
The 1997 Plan is administrated by a committee of the Board of Directors
consisting of not less than two independent, non-officer directors (the
"Committee"). The members of the Committee shall be appointed from time to time
by, and shall serve at the pleasure of, the Board of Directors. At present, the
Committee is comprised of Messrs. Britton and Clay.
The 1997 Plan gives the Committee authority to either award options to purchase
shares of Common Stock, award stock appreciation rights, award restricted stock
or award performance shares of Common Stock to be paid to participants on the
achievement of certain performance goals set by the Committee with respect to
each participant (collectively "Incentive Awards"). Options awarded under the
1997 Plan may be either "incentive stock options" as defined in Section 422 of
the Internal Revenue Code of 1986, as amended ("Code"), or non-qualified stock
options, as determined by the Committee.
The Committee has all powers and discretion necessary and appropriate to
administer the 1997 Plan and to control its operation, including, without
limitation, the power to (i) determine which employees shall be granted
Incentive Awards, (ii) determine which non-employee directors shall be granted
non-qualified stock options, (iii) interpret the 1997 Plan and the Incentive
Awards, (iv) prescribe the terms and conditions of the Incentive Awards, (v)
adopt rules for the administration, interpretation and application of the 1997
Plan and (vi) interpret, amend or revoke any such rules. All determinations and
decisions made by the Committee pursuant to the provisions of the 1997 Plan are
final, conclusive and binding.
The Board may, in its discretion, alter, amend or terminate the 1997 Plan or any
part thereof, at any time and for any reason. However, to the extent required by
the 1997 Plan or required to maintain the 1997 Plan's qualification under Rule
16b-3 under the 1934 Act or Section 162(m) of the Code, any such amendment shall
be subject to stockholder approval. Neither the amendment, suspension nor
termination of the 1997 Plan shall,
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<PAGE> 15
without the consent of the participant, alter or impair any rights or
obligations under any award previously granted.
ELIGIBILITY
The 1997 Plan provides that awards of Incentive Awards may be granted to
employees (including officers and directors who are also employees) of the
Company and its affiliates, including corporations controlling, controlled by or
under common control with the Company. Awards of incentive stock options,
however, may only be made to employees of the Company or its subsidiaries
(generally, corporations which are at least 50% owned by the Company).
Non-employee directors of the Company and its affiliates, including corporations
controlling, controlled by or under common control with the Company are only
eligible for Incentive Awards of non-qualified stock options. The Committee
selects the participants and determines the number of shares subject to each
Incentive Award. The 1997 Plan prohibits a single participant from receiving
awards of Incentive Awards covering more than 100,000 shares during any single
fiscal year.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
Award Agreement. The terms of stock option and stock appreciation right awards
under the 1997 Plan are determined by the Committee. Each award is evidenced by
a written agreement between the Company and the person to whom the award is
made. The award agreement will specify the option price, the expiration date of
the option, the number of shares to which the option pertains, the number of
stock appreciation rights, any conditions to the exercise of the option or stock
appreciation right and such other terms and conditions as the Committee, in its
discretion, shall determine. The award agreement will also specify whether the
option is intended to be an incentive stock option or a non-qualified stock
option. Generally, no consideration is paid by participants for the grant of a
stock option and stock appreciation right award under the 1997 Plan.
Option Price. The per share exercise price of each option awarded under the 1997
Plan will be no less than 85% in the case of a non-qualified stock option or
100% in the case of an incentive stock option of the fair market value per share
on the date the option is awarded. The fair market value of a share of Common
Stock of the Company is the closing sales price of common stock as reported on
the NASDAQ System or if the Common Stock is listed on a National Securities
Exchange, the closing sales price as reported by such Exchange on any relevant
date for valuation, of if there is no such sale on such date, the applicable
prices as so reported on the nearest preceding date upon which such sale took
place. Incentive stock options awarded to stockholders owning more than 10% of
the Company's outstanding shares are subject to the additional restriction that
the exercise price must be at least 110% of the fair market value of a share as
determined above on the date of award.
During the last completed fiscal year, options to purchase shares of Common
Stock were granted pursuant to the 1997 Plan at an exercise price of $1.875 per
share as follows: (i) 75,000 shares each to Messrs. Rash and Levenick, (ii)
50,000 shares to Mr. Hudson, (iii) 20,000 shares to Mr. Moreland, (iv) 17,500
shares to Mr. Moore, and (v) 40,000 shares to all non-executive officers, as a
group.
REGISTRATION OF SHARES
If approved, the Company intends to file a registration statement under the
Securities Act of 1933 with respect to the additional 1,000,000 shares of Common
Stock contemplated by this amendment.
REQUIRED VOTE
The affirmative vote of a majority of the votes cast by the holders of Common
Stock is required for approval of the amendment to the 1997 Plan. An abstention,
withholding of authority to vote or broker non-vote, therefore
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<PAGE> 16
will not have the same legal effect as an "against" vote and will not be counted
in determining whether the proposal has received the requisite stockholder vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF AN
AMENDMENT TO THE 1997 LONG-TERM INCENTIVE PLAN TO INCREASE THE MAXIMUM NUMBER OF
SHARES OF COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER FROM 1,000,000 TO
2,000,000.
STOCKHOLDER PROPOSALS
To be considered for presentation at the 2002 Annual Meeting of Stockholders, a
stockholder proposal must be received at the offices of the Company not later
than September 9, 2001.
In addition, the Company's By-laws require that a stockholder give advance
notice to the Company of nominations for election to the Board of Directors and
of other matters that the stockholder wishes to present for action at an annual
meeting of stockholders (other than matters included in the Company's proxy
statement in accordance with Rule 14a-8). Such stockholder's notice must be
given in writing, include the information required by the By-laws of the
Company, and be delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Company at its principal offices. The Company
must receive such notice not less than 45 days prior to the date in the current
year that corresponds to the date in the prior year on which the Company first
mailed its proxy materials for the prior year's annual meeting of stockholders.
While the Company has not yet set the date of its 2002 Annual Meeting of
Stockholders, if it were held on February 8, 2002 (the date that corresponds to
the date on which the 2001 Annual Meeting is being held), notice of a director
nomination or stockholder proposal made otherwise than in accordance with Rule
14a-8 would be required to be given to the Company no later than November 26,
2001.
REPORT OF THE AUDIT COMMITTEE
In accordance with its written charter adopted by the Board of Directors (the
"Board") (a copy of which is attached as Appendix "A" to this Proxy Statement),
the Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. All of the members of the Audit Committee
are independent (as independence is defined in Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards). During fiscal 2000, the
Committee met one time.
In discharging its responsibility for oversight of the audit process, the Audit
Committee obtained from the independent auditors, KPMG LLP, a formal written
statement describing any relationships between the auditors and the Company that
might bear on the auditors' independence consistent with the Independent
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," discussed with the auditors any relationships that might impact the
auditors' objectivity and Independence and satisfied itself as to the auditors'
independence.
The Committee discussed and reviewed with the independent auditors the
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and discussed and reviewed the results of
the independent auditors' examination of the financial statements for the year
ended September 30, 2000.
The Committee reviewed the audited financial statements of the Company as of
and for the fiscal year ended September 30, 2000, with management and the
independent auditors. Management has the responsibility for
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<PAGE> 17
preparation of the Company's financial statements and the independent auditors
have the responsibility for examination of those statements.
Based upon the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that the Company's
audited financial statements be included in its Annual Report on Form 10-K for
the fiscal year ended September 30, 2000, for filing with the Securities
Exchange Commission.
AUDIT COMMITTEE
James L. Britton III, Chairman
Jerrell G. Clay
OTHER MATTERS
The Board of Directors knows of no other business which will be presented to the
Meeting. If any other business is properly brought before the Meeting, it is
intended that proxies in the enclosed form will be voted in respect to any such
matters in accordance with the judgment of the persons voting the proxies.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND ANY AMENDMENTS THERETO
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS PROVIDED WITH CERTAIN OTHER
STOCKHOLDER INFORMATION IN THE MATERIALS ACCOMPANYING THIS PROXY STATEMENT. TO
OBTAIN ADDITIONAL COPIES WITHOUT CHARGE, PLEASE WRITE TO: LEONARD L. CARR, JR.,
SENIOR VICE PRESIDENT, 5847 SAN FELIPE, SUITE 900, HOUSTON, TEXAS 77057.
Whether or not you intend to be present at this Meeting you are urged to sign
and return your proxy promptly.
By order of the Board of Directors,
James T. Rash
Chairman
Houston, Texas
January 9, 2001
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<PAGE> 18
EXHIBIT "A"
CHARTER OF THE AUDIT COMMITTEE
OF
TIDEL TECHNOLOGIES, INC.
The Audit Committee of the Board of Directors of Tidel
Technologies, Inc. (the "Corporation") (the "Committee") shall assist the Board
of Directors in fulfilling its oversight responsibilities with respect to the
financial reports and other financial information provided by the Corporation to
the stockholders and to the general public, the Corporation's internal controls,
and the Corporation's audit, accounting and financial reporting processes
generally. The Committee shall serve as an independent and objective monitor of
the performance of the Corporation's financial reporting process and system of
internal control; review and appraise the audit efforts of the Corporation's
independent accountants; and provide for open, ongoing communication among the
independent accountant, financial and senior management, and the Board of
Directors concerning the Corporation's financial position and affairs. The
Committee will report its actions to the Board of Directors with such
recommendations as the Committee may deem appropriate. The Committee shall be
governed in accordance with the By-Laws of the Corporation as well as have the
following powers and duties:
1. Structure and Composition. Up until June 14, 2000, the
Committee shall be composed of at least two independent directors who are all
capable of reading, understanding, and analyzing financial statements, or who
will become financially literate within a reasonable time after being appointed
to the Committee. By June 14, 2001, and thereafter, the Committee shall be
composed of at least three independent directors who are all capable of reading,
understanding, and analyzing financial statements, or who will become
financially literate within a reasonable time after being appointed to the
Committee. By June 14, 2001, and thereafter, at least one member of the
Committee shall have past employment experience in finance or accounting, or any
comparable experience or background which results in that committee member
having financial sophistication. The members of the Committee shall elect the
Chairman (the "Chairman") from among themselves. The independence of a director
shall be determined in accordance with the rules and regulations of the
securities market where the Corporation's shares of Common Stock are traded. The
duties and responsibilities of a member of the Committee are in addition to
those duties generally pertaining to a member of the Board of Directors.
2. General Financial Oversight. The Committee shall meet with
the independent accountants and the principal accounting officers of the
Corporation to ascertain that reasonable procedures and controls are followed to
safeguard the Corporation's assets and that adequate examinations are made to
ensure the reasonableness of the results reported in the financial statements
for the fiscal year. Specifically, the Committee shall:
A-1
<PAGE> 19
(a) Review the financial information contained in the Corporation's
Quarterly Report on Form 10-Q prior to its filing with the Securities
and Exchange Commission (the "SEC"), the Corporation's earning
announcement prior to release, and the results of the independent
accountant's review of Interim Financial Information pursuant to SAS
71. The Chairman may represent the Committee, either in person or by
telephone conference call, for the purpose of this review.
(b) Review with management and the independent accountants at the
completion of the annual audit and prior to filing the Corporation's
annual report on Form 10-K (the "Annual Report") with the SEC, the
accuracy and completeness of the following :
(i) the Corporation's financial statements included in the
Annual Report and related footnotes;
(ii) the independent accountant's audit of the financial
statements and their report;
(iii) any significant changes required in the independent
accountant's examination plan;
(iv) any serious difficulties or disputes with management
encountered during the course of the audit; and
(v) other matters related to the conduct of the audit which
are to be communicated to the Committee under generally
accepted auditing standards, including discussions relating to
the independent accountants' judgement about such matters as
to the quality, not just the acceptability, of the
Corporation's accounting practices and other items set forth
in SAS 61 (Communications with Audit Committees) or other such
auditing standards that may in time modify, supplement or
replace SAS 61.
(c) The Committee will have prepared and reviewed the Audit Committee
Report for inclusion in the annual stockholder's meeting proxy
statement. The Committee must state whether it:
(i) has reviewed and discussed the audited financial
statements with management;
(ii) has discussed with the independent accountant the matters
required to be discussed by SAS 61, as may be modified,
supplemented or replaced;
(iii) has received the written disclosures from the
independent accountants required by Independence Standards
Board Standard No. 1 ("ISBS No. 1"), as may be modified or
supplemented, and has discussed with the accountant their
independence; and
A-2
<PAGE> 20
(iv) has recommended to the Board of Directors, based on the
review and discussions referred to in above items (i) through
(iii), that the Corporation's financial statements be included
in the Annual Report on Form 10-K for the last fiscal year for
filing with the SEC.
3. Selection of Independent Accountants. The Committee shall
recommend the firm of independent accountants to be nominated for the ensuing
year at the Board of Directors meeting when such action is taken.
(a) Before recommending a continuing independent accountant, the
Committee shall ensure the receipt for the year of, and review with the
independent accountant, a written statement required by ISBS No.1, as
may be modified or supplemented, and discuss their continued
independence with the accountant. The Committee will recommend that the
Board of Directors take appropriate action on any disclosed
relationships that may reasonably be brought to bear on the
independence of the accountants and satisfy itself that the Corporation
has engaged independent accountants as required by the Securities Act
of 1933,as amended.
(b) Together with the Board of Directors, the Committee shall submit to
the stockholders for ratification or rejection at the annual meeting of
stockholders the independent accountants selected.
4. Controls, Policies and Procedures Oversight. The members of
the Committee shall meet from time to time to review accounting policies
followed, changes therein, internal and accounting controls, and any issues that
may be raised by the independent accountants. At the discretion of the Chairman,
the principal accounting officers of the Corporation may be invited to attend
the meetings of the Committee with the independent accountants. The Committee
may request the independent accountants to report on the adequacy of their
examination, their views of the Corporation's internal controls, and on the
Corporation's compliance with accepted accounting principles adopted by the
accounting profession, as well as the effect of unusual or extraordinary
transactions. The Committee shall also be responsible for the following:
(a) Obtain the approval of the full Board of Directors of this Charter
and shall review and reassess this Charter as conditions dictate, at
least on annual basis;
(b) Periodically review the adequacy of the Corporation's accounting,
financial, and auditing personnel resources.
5. Advice; Legal Representation. The Committee is authorized
to confer with the Corporation's management and other employees to whom it may
deem necessary or appropriate to fulfill its duties. The Committee is authorized
to conduct or authorize investigations into any matter within the Committee's
scope of responsibilities. The Committee also is authorized to seek outside
legal or other advice to the extent it deems necessary or appropriate, provided
it shall keep the Board of Directors advised as to the nature and extent of such
outside advice.
A-3
<PAGE> 21
TIDEL TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, FEBRUARY 8, 2001
The undersigned hereby appoints James T. Rash as proxy, with full power of
substitution, to vote as proxy all of the shares of common stock, par value $.01
per share, of TIDEL TECHNOLOGIES, INC. (the "Company") standing in the name of
the undersigned at the Annual Meeting of Stockholders of the Company (the
"Meeting") to be held on Thursday, February 8, 2001, and at any adjournment
thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE STOCKHOLDER'S
SPECIFICATIONS HEREON. IF NO SPECIFICATION IS MADE, ALL SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED IN FAVOR OF EACH OF THE NOMINEES FOR DIRECTOR NAMED
HEREIN.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE PROMPTLY
SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
(Continued, and to be signed, on the other side.)
<PAGE> 22
TIDEL TECHNOLOGIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<S> <C> <C> <C>
FOR WITHHOLD FOR ALL
1. TO ELECT the six (6) directors of the Company to serve until the 2002 ALL ALL EXCEPT*
annual meeting of stockholders of the Company and until their [ ] [ ] [ ]
successors are duly elected and qualified--
Nominees: 01 - James T. Rash,
02 - James L. Britton III, 03 - Jerrell G. Clay,
04 - Mark K. Levenick, 05 - Raymond P. Landry,
06 - Michael F. Hudson
*Instruction: To withhold authority to vote for any nominee, draw
a line through the name of the nominee in the list above.
2. TO RATIFY AND APPROVE the appointment of KPMG, LLP as independent FOR AGAINST ABSTAIN
auditors of the Company for the fiscal year ending [ ] [ ] [ ]
September 30, 2001.
3. TO RATIFY AND APPROVE an amendment to the 1997 Long-Term Incentive FOR AGAINST ABSTAIN
Plan to increase the maximum number of shares of common stock [ ] [ ] [ ]
reserved for issuance thereunder from 1,000,000 to 2,000,000.
This proxy may be revoked at any time before it is
exercised (1) by providing written notice of
revocation to the Secretary of the Company prior to
the Meeting or (2) by attending the Meeting and
voting in person.
EXECUTED this ____ day of __________________, 2001
Signature(s)_______________________________________
___________________________________________________
**INSTRUCTION: Signature(s) should agree exactly
with name(s) on stock certificate(s). If this Proxy
is signed on behalf of a corporation or
partnership, please print both the name of the
entity and the name and title of the signatory.
Executors, administrators, trustees, guardians and
attorneys should indicate the capacity in which
they are signing. If stock is held jointly, each
owner should sign.
</TABLE>
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY SIGN, DATE AND RETURN THIS PROXY IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
