<PAGE> 1
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Eltron International, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Eltron International, Inc.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / 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:
N/A
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
ELTRON INTERNATIONAL, INC.
41 MORELAND ROAD
SIMI VALLEY, CALIFORNIA 93065
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 6, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Eltron International, Inc., a California corporation (the "Company"), will be
held at the Radisson Hotel, 999 Enchanted Way, Simi Valley, California 93065,
on September 6, 1996 at 1:30 p.m., Pacific Daylight Time, for the following
purposes:
1. To elect members of the Board of Directors to serve until the
next annual meeting of shareholders;
2. To adopt and approve the Company's 1996 Stock Option Plan
pursuant to which options for up to 500,000 shares of the
Company's Common Stock may be granted; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on August 1,
1996 as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting. Only shareholders of record at the close
of business on the record date will be entitled to vote at the meeting and any
adjournments thereof.
Accompanying this Notice are a Proxy and Proxy Statement. IF YOU WILL
NOT BE ABLE TO ATTEND THE MEETING TO VOTE IN PERSON PLEASE COMPLETE, SIGN AND
DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. The Proxy may be revoked at any time prior to its exercise at the
meeting.
By Order of the Board of Directors,
Daniel C. Toomey, Jr.
Vice President Finance and Chief
Financial Officer
Simi Valley, California
August 12, 1996
<PAGE> 3
ELTRON INTERNATIONAL, INC.
41 MORELAND ROAD
SIMI VALLEY, CALIFORNIA 93065
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 6, 1996
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished to the shareholders of Eltron
International, Inc., a California corporation (the "Company"), in connection
with the solicitation of proxies by and on behalf of the Board of Directors of
the Company. The proxies solicited hereby are to be voted at the Annual
Meeting of Stockholders of the Company to be held on September 6, 1996, and at
any and all adjournments thereof (the "Annual Meeting").
A form of proxy is enclosed for your use. The shares represented by
each properly executed unrevoked proxy will be voted as directed by the
shareholder executing the proxy. If no direction is made, the shares
represented by each properly executed unrevoked proxy will be voted "FOR" (i)
the election of management's nominees for the Board of Directors; and (ii) the
adoption and approval of the Company's 1996 Stock Option Plan. With respect to
any other item of business that may come before the Annual Meeting, the proxy
holders will vote the proxy in accordance with their best judgment.
Any proxy given may be revoked at any time prior to the exercise
thereof by filing with Daniel C. Toomey, Jr., Secretary of the Company, an
instrument revoking such proxy or by the filing of a duly executed proxy
bearing a later date. Any shareholder present at the meeting who has given a
proxy may withdraw it and vote his or her shares in person if such shareholder
so desires.
It is contemplated that the solicitation of proxies will be made
primarily by mail. Should it, however, appear desirable to do so in order to
ensure adequate representation of shares at the Annual Meeting, the officers,
agents and employees of the Company may communicate with shareholders, banks,
brokerage houses and others by telephone, telegraph, or in person to request
that proxies be furnished. All expenses incurred in connection with this
solicitation will be borne by the Company. In following up the original
solicitation of proxies by mail, the Company may make arrangements with
brokerage houses and other custodians, nominees and fiduciaries to send proxies
and proxy material to the beneficial owners of the shares eligible to vote at
the Annual Meeting and will reimburse them for their expenses in so doing. The
Company has no present plans to hire special employees or paid solicitors to
assist in obtaining proxies, but reserves the option of doing so if it should
appear that a quorum otherwise might not be obtained. This Proxy Statement and
the accompanying form of proxy are first being mailed to shareholders on or
about August 12, 1996.
1.
<PAGE> 4
VOTING SECURITIES
Only holders of record of the Company's voting securities at the close
of business on August 1, 1996 are entitled to notice of and to vote at the
Annual Meeting. As of August 1, 1996, the Company had issued and outstanding
7,231,874 shares of the Company's Common Stock ("Common Stock"), the holders of
which are entitled to vote at the Annual Meeting. Each share of Common Stock
that was issued and outstanding on August 1, 1996 is entitled to one vote at
the Annual Meeting. The presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes entitled to be cast by all
shareholders will constitute a quorum for the transaction of business at the
Annual Meeting.
Stockholders may cumulate their votes with respect to the election of
directors of the Company if one or more shareholder gives notice at the Annual
Meeting, prior to voting, of an intention to cumulate votes for a nominated
director. A shareholder may cumulate votes by casting for the election of one
nominee a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his shares are entitled or by
distributing his votes on the same principle among as many candidates as he
sees fit. If a proxy is marked "FOR" the election of directors, it may, at the
discretion of the proxy holders, be voted cumulatively in the election of
directors.
Abstentions may be specified as to all proposals to be brought before
the Annual Meeting other than the election of directors. Approval of each of
the other proposals to be brought before the Annual Meeting (not including the
election of directors) will require the affirmative vote of at least a majority
in voting interest of the shareholders present in person or by proxy at the
Annual Meeting and entitled to vote thereon. As to those proposals, if a
shareholder abstains from voting on a proposal it will have the effect of a
negative vote on that proposal, but if a broker indicates that it does not have
authority to vote certain shares, those votes will not be considered as shares
present and entitled to vote at the Annual Meeting with respect to that
proposal and therefore will have no effect on the outcome of the vote.
2.
<PAGE> 5
ELECTION OF DIRECTORS
NOMINEES
Directors are elected at each annual meeting of the shareholders and
hold office until their respective successors are elected and qualified. The
Board of Directors is of the opinion that the election to the Board of
Directors of the persons identified below, all of whom are currently serving as
Directors of the Company and have consented to continue to serve if elected,
would be in the best interests of the Company. The names of such nominees are
as follows:
Donald K. Skinner Hugh K. Gagnier
George L. Bragg Robert G. Bartizal
The shares of each properly executed unrevoked proxy will be voted FOR
the election of all of the above named nominees unless the shareholder
executing such proxy indicates that the proxy shall not be voted for all or any
one of the nominees. If cumulative voting is utilized, the proxy holders
intend to distribute the votes represented by each proxy, unless such authority
is withheld, among the four nominees named, in such proportion as they see fit.
Nominees receiving the highest number of affirmative votes cast, up to the
number of directors to be elected, will be elected as director. Abstentions,
broker non-votes, and instructions on the accompanying proxy card to withhold
authority to vote for one or more of the nominees will result in the respective
nominees receiving fewer votes. If for any reason any nominee should, prior to
the Annual Meeting, become unavailable for election as a Director, an event not
now anticipated, the proxies will be voted for such substitute nominee, if any,
as may be recommended by the Board of Directors. In no event, however, shall
the proxies be voted for a greater number of persons than the number of
nominees named.
MEETINGS; ATTENDANCE; COMMITTEES
The Board of Directors of the Company met six times during the fiscal
year ended December 31, 1995. No incumbent member who was a director during
the past fiscal year attended fewer than 75% of all meetings of the Board of
Directors except Arthur Wang. Mr. Wang resigned as a director in June 1996.
The Stock Option Committee consisted of Donald Skinner and Arthur Wang
during 1995. Beginning in 1996, such Committee consisted of Messrs. Bragg,
Bartizal and Skinner. The Stock Option Committee administers the Company's
stock option plans. The Stock Option Committee met six times last year and all
members were in attendance.
The Compensation Committee consists of Messrs. Bragg, Bartizal and
Skinner. The Compensation Committee reviews the performance of the executive
officers and determines the compensation of such officers. The Compensation
Committee met two times last year and all members were in attendance.
The Audit Committee consists of Messrs. Bragg and Bartizal. The Audit
Committee met two times last year and all members were in attendance. The
duties of the Audit Committee are to review and act or report to the Board of
Directors with respect to various audit and accounting matters, including the
annual audits of the Company (and their scope), the annual selection of the
independent auditors of the Company, and the nature of services to be performed
by and the fees to be paid to the independent auditors of the Company.
3.
<PAGE> 6
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to the directors and
executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Donald K. Skinner (1) 55 Chairman of the Board and Chief Executive Officer
Hugh K. Gagnier 40 President, Chief Operating Officer and Director
Daniel C. Toomey, Jr. 32 Vice President Finance, Chief Financial Officer and Secretary
Patrice J. Foliard 37 President of Card Division
Robert G. Bartizal (1)(2) 63 Director
George L. Bragg (1)(2) 63 Director
- - -----------
</TABLE>
(1) Member of Stock Option Committee and Compensation Committee.
(2) Member of Audit Committee.
Donald K. Skinner co-founded the Company in 1991 and has served as its
Chief Executive Officer since December 1992, and as its President from December
1992 until Mr. Gagnier assumed the position of President in September 1995. In
July 1995, Mr. Skinner became Chairman of the Board. From January 1991
(inception) to December 1992, Mr. Skinner served as the Company's Executive
Vice President and Chief Operating Officer. From September 1989 to January
1991 Mr. Skinner founded and served as President of Eltron, Incorporated, a
manufacturer of custom thermal printers. From January 1989 to August 1989, Mr.
Skinner served as General Manager of Axiom-Edwards-CPE Incorporated, a
manufacturer of thermal printers. In 1985 Mr. Skinner founded Peripheral
Technology Corporation, a manufacturer of computer disk drives, and was
responsible for new product development, engineering, sales and marketing, and
operations. Prior to his tenure at Peripheral Technology Corporation, Mr.
Skinner spent 15 years at Dataproducts Corporation, a manufacturer of computer
printers. While at Dataproducts Corporation, Mr. Skinner was responsible for
the development, manufacturing and marketing of the company's new product
lines. Mr. Skinner is a director of Percon, Inc. (Eugene, OR), a manufacturer
of bar code reading products.
Hugh K. Gagnier has been a director of the Company since February 1994.
Mr. Gagnier became Executive Vice President and Chief Operating Officer in June
1994, and became President in September 1995. Mr. Gagnier has been Group
President of Wangtek and WangDAT, Inc., which are manufacturers of tape drives
for automated data back-up, since October 1991. Wangtek and WangDAT, Inc. are
subsidiaries of Rexon Inc., a publicly held company. Prior to his position as
Group President, Mr. Gagnier served as President of Wangtek from May 1991 to
October 1991, and as Vice President of Engineering from October 1988 to May
1991. Prior to his tenure at Rexon Inc., Mr. Gagnier spent three and one-half
years at Peripheral Technology Corporation, a disk drive manufacturer, in
various engineering management positions.
Daniel C. Toomey, Jr. joined the Company in October 1992 as Vice
President Finance and Chief Financial Officer. Since 1993, Mr. Toomey has
served as Secretary of the Company. From August 1993 to February 1995, Mr.
Toomey also served as a Director of the Company. From December 1987 to October
1992, Mr. Toomey was employed by Arthur Andersen LLP, where he most recently
served as a Manager in its Enterprise Division.
Patrice J. Foliard, founder and president of Privilege S.A. in France,
joined the Company in January 1996 and continues in his role as president of
the Company's newly formed Card Division. Prior to founding Privilege in 1994,
in 1990 Mr. Foliard founded AP-Print and Newcode, a French
4.
<PAGE> 7
company specializing in the design and production of thermal label printers and
card printers. From 1988 to 1989, Mr. Foliard was General Manager of Cominor,
a French company which designs accounting software. From 1982 to 1988 he
served in Paris with the United Kingdom-based International Computers Limited,
responsible for sales of minicomputers to end users for two years and then in
charge of the sales force for the personal computer line.
Robert G. Bartizal has been a director of the Company since February
1994. Mr. Bartizal currently serves on the Board of Directors of L.H. Research
(Costa Mesa, CA) and Validyne Engineering Corp. (Northridge, CA), and as
Chairman of Datavision Technologies Corp. (San Francisco, CA). In 1986, Mr.
Bartizal founded RGB Associates and co-founded Bartizal and Sherby, both
business consulting companies, and he has served in executive capacities since
then. Prior thereto, Mr. Bartizal served in executive capacities at Logisticon
Inc., a manufacturer of real time material management systems, Dataproducts
Corporation, a manufacturer of computer printers, Control Data Corporation, and
IBM.
George L. Bragg has been a director of the Company since February 1995.
Since September 1994, Mr. Bragg has been Chairman of Markwood Capital Alliance,
which provides management consulting and financing services to high technology
and special situation companies. From October 1993 to September 1994, he was
President and a Director of Nichols Institute, which provides clinical testing
services to hospitals, laboratories and physicians on a nationwide basis.
Nichols Institute was merged with Corning Life Science in September 1994. From
January 1993 to October 1993, he was the President of George Bragg &
Associates, a management consulting firm. From July 1991 to March 1993, Mr.
Bragg served in various executive capacities with Western Digital Corporation,
which is in the business of manufacturing and selling disk drives for the
personal computer market. He served as Vice Chairman from August 1991 to March
1993, and as Chief Financial Officer from July 1991 to October 1991. He has
been a director of Western Digital Corporation since October 1990. He served
as Chairman and President of Boston Street Capital, a management and investment
consulting firm, from September 1990 to December 1991. From July 1989 until
September 1990, he served as Chairman of the Board, Chief Executive Officer and
President of Sooner Federal Savings Association. At the time Mr. Bragg joined
Sooner Federal, it was experiencing severe financial difficulties. Sooner
Federal was unable to recover from these difficulties and, consequently, the
Resolution Trust Corporation was appointed as the receiver of Sooner Federal in
September 1990. Mr. Bragg was appointed President and Chief Operating Officer
of Telex Corporation, which was in the computer networking and terminal
workstation business, in 1986. When Telex merged with Memorex Corporation in
1988, he became Managing Director and Executive Vice President of Memorex Telex
N.V., which positions he held until July 1989. Since June 1993, he has been a
director of Old America Stores. Since 1989, he has been a director of Leasing
Solutions, Inc.
5.
<PAGE> 8
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Each outside director receives $1,500 for each board meeting attended
and $500 for each committee meeting attended; provided, however, that if two or
more committee meetings are held on the same day, outside directors in
attendance only receive $1,000 for such committee meetings. The Stock Option
Committee has also granted stock options to outside directors, at exercise
prices equal to the fair market value on the date of the grant. See "-- Stock
Option Plans."
The following table sets forth the cash compensation paid or accrued by
the Company for the year ended December 31, 1995 to its Chief Executive Officer
and the other four most highly compensated executive officers who received
total salary and bonuses from the Company of over $100,000 (the "Named
Executives").
<TABLE>
<CAPTION>
Payouts
Long Term
Annual Compensation Awards Compensation
------------------------------------ --------------- ------------
Securities
Other Annual Underlying LTIP
Name and Principal Position Year Salary Bonus(1) Compensation(2 Options/SARs(#) Payouts($)
--------------------------- ---- --------- --------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
1995 $156,850 $ 98,020 -- -- --
Donald K. Skinner, 1994 112,419 183,501 -- -- --
Chief Executive Officer ......... 1993 102,320 24,563 -- -- --
Hugh K. Gagnier, 1995 $149,520 $84,500 __ __ --
President and 1994 65,391 18,000 $29,800(5) 130,000 --
Chief Operating Officer (4) ...... 1993 -- -- -- -- --
Daniel C. Toomey, Jr., 1995 $80,621 $52,390 -- -- __
Chief Financial Officer 1994 66,000 33,000 -- -- __
and Vice President Finance ....... 1993 60,000 -- -- 13,014 __
Vigo H. Gustavsson, 1995 $91,000 $98,453 -- -- --
Vice President New 1994 78,580 27,121 -- -- --
Business Development (3) ......... 1993 76,000 37,245 -- -- --
Robert Scoville,
Senior Vice President
Sales and Marketing (6) .......... 1995 $89,530 $67,190 -- 70,000 --
- - -----------
</TABLE>
(1) Represents commissions and performance-based bonus received.
(2) The value of personal benefits furnished to the Named Executives did not
exceed $50,000 or 10% of their respective cash compensation.
(3) Mr. Gustavsson was Vice President Sales during 1993 and 1994, becoming
Vice President New Business Development in April 1995.
(4) Mr. Gagnier became Executive Vice President and Chief Operating Officer
in June 1994, and President in September 1995.
(5) Represents payments for consulting services rendered by Mr. Gagnier
prior to becoming an employee of the Company.
(6) Mr. Scoville was Senior Vice President Sales and Marketing from April
10, 1995 to December 8, 1995.
EMPLOYMENT AGREEMENTS
Under the terms of Mr. Skinner's three year employment agreement entered
into as of January 1, 1995, Mr. Skinner's current annual base salary is
$195,000 (subject to adjustment once per year by the Compensation Committee)
and he may receive an incentive bonus not to exceed 50% of his annual base
salary. The Company and each of Messrs. Gagnier, Toomey and Foliard have
entered into one year employment agreements as of January 1, 1996. Each of
Messrs. Gagnier, Toomey and Foliard receives an annual base salary of $155,000,
$105,000 and $100,000, respectively, and may receive an incentive bonus not to
exceed 50% of his annual base salary. Mr. Gustavsson has also
6.
<PAGE> 9
entered into a one year employment agreement with the Company as of January 1,
1996, pursuant to which he receives an annual base salary of $100,000 and may
receive an incentive bonus not to exceed 35% of his annual base salary.
Each of Messrs. Skinner, Gagnier, Toomey, Foliard and Gustavsson is
entitled to receive a severance payment in an amount equal to his annual base
salary in the event of a merger or sale of the Company or in the event a third
party obtains majority control of the Company. Each of their estates is
entitled to receive any earned but unpaid compensation for the period prior to
such person's death and an additional payment equal to his base salary and
additional compensation paid during the last full year of employment by the
Company. If any such person becomes disabled, he is entitled to receive
compensation under his employment agreement for up to one year.
STOCK OPTION PLANS
The Company has adopted a 1992 Stock Option Plan and a 1993 Stock Option
Plan (collectively, the "Stock Option Plans" or "Plans") covering 433,812 and
667,188 shares, respectively, of the Company's Common Stock, pursuant to which
officers, employees and directors of the Company, as well as other persons who
render services to or are otherwise associated with the Company, are eligible
to receive incentive and/or non-qualified stock options. The Plans are
administered by the Stock Option Committee of the Board of Directors. The
selection of participants, allotment of shares, determination of price and
other conditions of purchase of options will be determined by the Stock Option
Committee at its sole discretion in order to attract and retain persons
instrumental to the success of the Company. Incentive stock options granted
under the Plans are exercisable for a period of up to 10 years from the date of
grant at an exercise price that is not less than the fair market value of the
Common Stock on the date of grant, except that the term of an incentive stock
option granted under the Plans to a shareholder owning more than 10% of the
voting power of the Company on the date of grant may not exceed five years and
its exercise price may not be less than 110% of the fair market value of the
Common Stock on the date of grant. Non-qualified options granted under the
Plans may be granted at less than the fair market value of the Common Stock on
the date of grant.
As of December 31, 1995, stock options with respect to an aggregate of
584,602 shares were outstanding under the Plans at exercise prices ranging from
$0.18 to $28.25 per share. The 1992 Plan was approved by the Board of
Directors of the Company on February 18, 1992 and, unless sooner terminated by
the Board of Directors or the Stock Option Committee, will terminate on
February 17, 2002. The 1993 Plan was approved by the Board of Directors of the
Company on February 1, 1993 and, unless sooner terminated by the Board of
Directors or the Stock Option Committee, will terminate on January 31, 2003.
The Plans have been registered under the Securities Act of 1933 on Form S-8.
7.
<PAGE> 10
The following table provides information on stock options granted in the
year ended December 31, 1995 to the Named Executives and directors:
OPTIONS GRANTED IN YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------------------------------
Percent of
Total
Number of Options/SARs Potential Realizable
Securities Granted Value at Assumed
Underlying to Employees Exercise or Annual Rates of
Options in Base Price Expiration Stock Price Appreciation
Name Granted (#) Fiscal Year ($/Sh) Date for Option Term(1)
---- ----------- ----------- ------ ---- -------------------------
5% 10%
----- -----
<S> <C> <C> <C> <C> <C> <C>
Donald K. Skinner 0 0.00% N/A N/A N/A N/A
Arthur Wang 0 0.00% N/A N/A N/A N/A
Hugh K. Gagnier 0 0.00% N/A N/A N/A N/A
Daniel C. Toomey,
Jr. 0 0.00% N/A N/A N/A N/A
Vigo H. Gustavsson 0 0.00% N/A N/A N/A N/A
Robert Scoville 70,000 28.47% $ 9.875 01/31/2000 $190,980 $422,015
Robert G. Bartizal 10,000 4.07% $10.50 02/08/2000 $ 29,010 $ 64,104
George L. Bragg 30,000 12.20% $ 9.375 01/03/2005 $176,877 $448,240
</TABLE>
__________
(1) The 5% and 10% assumed rates of appreciation are prescribed by the rules
and regulations of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future trading prices
of the Common Stock.
The following table contains information concerning stock options
exercised in the last fiscal year and stock options remaining unexercised on
December 31, 1995 with respect to the Named Executives and directors.
AGGREGATED OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 1995
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options At
Shares Held at Fiscal Year-End(#) Fiscal Year-End ($) (1)
Acquired on Value ------------------------------ --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald K. Skinner 0 $ 0 0 0 $ 0 $ 0
Arthur Wang 0 0 0 0 0 0
Hugh K. Gagnier 32,500 771,250 0 97,500 0 3,103,125
Daniel C. Toomey,
Jr. 15,000 488,375 9,222 27,472 320,680 959,374
Vigo H. Gustavsson 43,380 751,559 2 0 71 0
Robert Scoville 0 0 0 70,000 0 1,793,750
Robert G. Bartizal 10,000 81,250 0 30,000 0 900,000
George L. Bragg 0 0 0 30,000 0 783,750
- - ----------------
</TABLE>
(1) Amounts are shown as the difference between exercise price and fair
market value (based on the closing price of $35.50 per share at fiscal
year end).
8.
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1995, the Board of Directors
had a compensation committee consisting of three directors -- Donald K.
Skinner, Robert G. Bartizal and George L. Bragg. Mr. Skinner also serves as
Chairman of the Board and Chief Executive Officer of the Company. There are no
interlocks between the Company and other entities involving the Company's
executive officers and board members who served as executive officers or board
members of other entities.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of August 1, 1996, by (i)
each director of the Company, (ii) each Named Executive, (iii) all directors
and executive officers as a group, and (iv) each person known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock.
Except as noted below, the Company believes that the persons listed below have
sole investment and voting power with respect to the Common Stock owned by
them.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
Name and Address of ------------------------------------------------------
Beneficial Owner(1) Number Percent
------------------- -------------------------- --------------------------
<S> <C> <C>
Donald K. Skinner . . . . . . . . . . . . . . 738,258 10.2%
Taiwan Semiconductor Co., Ltd.(2) . . . . . . 393,446 5.4%
Vigo H. Gustavsson . . . . . . . . . . . . . 126,688 1.8%
Hugh K. Gagnier(3) . . . . . . . . . . . . . 32,500 *
Daniel C. Toomey, Jr. . . . . . . . . . . . . 59,412 *
Robert G. Bartizal(4) . . . . . . . . . . . . 41,000 *
George L. Bragg(5) . . . . . . . . . . . . . 15,000 *
Robert Scoville . . . . . . . . . . . . . . . 0 *
All directors and executive officers
as a group (six persons) (6) . . . . . . . . 886,170 12.1%
- - -----------
</TABLE>
* Less than 1%.
(1) The address for all persons listed is c/o Eltron at 41 Moreland Road,
Simi Valley, CA 93065-1692.
(2) TSC is principally owned and controlled by Arthur Wang, a former
director of the Company.
(3) Of such shares, 32,500 represent options exercisable within 60 days
hereof.
(4) Of such shares, 15,000 represent options exercisable within 60 days
hereof.
(5) Of such shares, 15,000 represent options exercisable within 60 days
hereof.
(6) Includes options exercisable within 60 days hereof to purchase 62,500
shares of Common Stock.
9.
<PAGE> 12
CERTAIN TRANSACTIONS
In February 1991, the Company entered into a nonexclusive
manufacturing and marketing agreement with TSC, a principal shareholder of the
Company. TSC is controlled by Arthur Wang, a former director of the Company.
Pursuant to the agreement, TSC manufactures printers for the Company. TSC has
the exclusive right to market and distribute the Company's printers in Asia,
for which it pays a royalty of 3.5% of gross revenues to the Company. The
Company and TSC amended the agreement to provide that (i) prices charged by TSC
under the agreement would remain at January 1994 levels through December 31,
1994, and (ii) "Asia" shall consist solely of China, Korea, Japan, Taiwan, Hong
Kong, Thailand, Vietnam, Malaysia, Singapore, the Philippines, Burma, and
Indonesia. For the year ended December 31, 1995, the Company purchased
subassemblies and components from TSC totaling $7,899,775, pursuant to the
agreement, of which $5,153,426 are recorded in cost of goods sold. For the
same period, the amount paid by TSC to the Company under the 3.5% royalty
provision was $4,624. Accounts payable to TSC amounted to $1,816,909 at
December 31, 1995 and are payable in due course, typically within 45 days of
receipt of an invoice. Management believes that the terms of this agreement
with TSC are no less favorable than those which could have been obtained from
an independent party. In July 1996, the manufacturing and marketing agreement
with TSC was terminated by mutual consent.
The Company entered into an agreement and plan of merger, dated as of
April 10, 1995, by and among the Company, Eltron, Incorporated ("Eltron, Inc.")
and Donald K. Skinner, the Chief Executive Officer and Chairman of the Board of
the Company (the "Merger Agreement"), pursuant to which Eltron, Inc. merged
into the Company on May 30, 1995. Eltron, Inc. was wholly owned by Donald K.
Skinner prior to the merger and its sole assets consisted of 1,038,258 shares
of the Company's Common Stock and certain patents, which patents were valued by
an independent appraiser at approximately $50,000. Eltron, Inc. had no
operations and no material liabilities. Pursuant to the Merger Agreement, upon
closing, Mr. Skinner received 1,038,258 shares of the Company's Common Stock in
exchange for 100% of the outstanding capital stock of Eltron, Inc., and the
1,038,258 shares of the Company's Common Stock that were held by Eltron, Inc.
were returned to the Company and retired. As a result of this transaction, the
separate existence of Eltron, Inc. ceased and the assets and liabilities of
Eltron, Inc. became the assets and liabilities of the Company. This
transaction was approved by the disinterested members of the Board of Directors
of the Company and has no effect on the outstanding capitalization of the
Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the Federal securities laws, the Company's directors, executive
officers, and any person holding more than 10% of the Company's Common Stock
are required to report their ownership of the Company's securities and any
changes in that ownership to the Commission. Specific due dates for these
reports have been established, and the Company is required to report in this
Proxy Statement any failures to file by these dates since the Company became
public in February, 1994. The Company knows of no instances of persons who
have failed to file or have delinquently filed Section 16(a) reports within the
most recently completed fiscal year.
10.
<PAGE> 13
ADOPTION AND APPROVAL OF THE COMPANY'S 1996 STOCK OPTION PLAN
The Board of Directors has adopted and approved, and has voted to
recommend to the shareholders that they adopt and approve, the Company's 1996
Stock Option Plan ("1996 Plan") for up to 500,000 shares of Common Stock. The
1996 Plan is set forth as Appendix A to this Proxy Statement.
The Board of Directors believes that its existing stock option plans
have played a major role in enabling the Company to attract and retain certain
officers, directors and other key employees instrumental to the success of the
Company. Options granted to such individuals provide long-term incentives to
the recipients that are consistent with the Company's compensation policy of
providing compensation that is closely related to the performance of the
Company. As of the date of this Proxy Statement, 644,679 of the 667,188
options available for grant under the 1993 Plan had been granted, and all of
the options available for grant under the 1992 Plan have been granted. To
allow the Company to continue to obtain the benefit of incentives available
under stock option plans, the Company's Board of Directors has adopted and
recommended for submission to the shareholders for their approval a new 1996
Plan pursuant to which options for up to 500,000 shares of Common Stock may be
granted. The 1996 Plan must be approved by the affirmative vote of a majority
of the shares of the Company's Common Stock represented in person or by proxy
and voting at the Annual Meeting, assuming that a quorum is present.
The future benefits to various executive officers and directors under
the proposed 1996 Plan are not determinable at this time. However, if the 1996
Plan had been in existence during the 1995 fiscal year, based upon the options
granted under the 1993 Plan to these individuals, the following persons would
have received these benefits under the 1996 Plan: Named Executives (70,000
options), current executive officers (4 persons) as a group (0 options),
current non-executive directors (2 persons) as a group (40,000 options), and
non- executive officer employees (15 persons) as a group (135,896 options). To
date, no options have been granted under the 1996 Plan.
Terms of Options. The terms of options to be granted under the 1996
Plan will be determined by the Board of Directors or the Stock Option
Committee. Each option granted under the 1996 Plan will be evidenced by a
stock option agreement between the Company and the optionee of such option, and
will be subject to the following terms and conditions:
(a) Exercise of the Option. The term of each option and
the manner in which it may be exercised will be determined by the Board of
Directors or the Stock Option Committee; provided, however, that no option may
be exercisable more than ten years after the date of grant or, in the case of
an incentive stock option to an eligible employee owning more than 10% of the
Company's outstanding securities, no more than five years. Payment for the
shares purchased upon exercise of an option may be in cash, or with the Board's
or Committee's consent, in shares of the Company's Common Stock. The 1996 Plan
provides that the aggregate fair market value (determined at the time the
option is granted) of the Common Stock with respect to which incentive stock
options are exercisable for the first time by an optionee during any calendar
year shall not exceed $100,000.
(b) Termination of Employment. If the optionee's
employment terminates for any reason other than death, disability or
retirement, options under the 1996 Plan may be exercised no later than 30 days
after such termination or such later date as determined by the Board of
Directors or the Stock Option Committee (not to exceed three months with
respect to incentive stock options) and may be exercised only to the extent the
option was exercisable as of the date of such termination. If the optionee's
employment terminates because of the retirement of the optionee, then options
under the 1996 Plan may be exercised no later than three months after such
termination and may be exercised only to the extent the options were
exercisable at the date of such retirement or disability.
11.
<PAGE> 14
(c) Death or Disability of Optionee. If an optionee
should die or become disabled while employed by the Company, options may be
exercised at any time within such period as shall be prescribed in his option
agreement (such period not to exceed twelve months after death or disability),
but only to the extent the options would have been exercisable on the date of
death or disability.
(d) Non-Transferability of Options. An incentive stock
option is non-transferable by the optionee other than by will or the laws of
descent and distribution, and is exercisable during the optionee's lifetime
only by such optionee, or, in the event of death, by the optionee's estate or
by a person who acquires the right to exercise the option by bequest or
inheritance.
(e) Policy with Respect to Nonemployee Directors. The
Company has recently formalized a policy of granting options to nonemployee
directors, and intends to grant options under the 1996 Plan in accordance with
such policy. Upon initially joining the Board, each nonemployee director will
receive an option to purchase 15,000 shares at an exercise price equal to the
fair market value on the date of grant, vesting one-third on the first
anniversary of becoming a director, one-third on the second anniversary, and
the remaining third on the third anniversary, provided that such director
remains a director at the time of vesting. Additionally, on each anniversary
of his joining the Board, the nonemployee director will receive an option to
purchase 5,000 shares at an exercise price equal to the fair market value on
the date of grant, which option will be immediately exercisable.
Federal Income Tax Aspects. The following is a brief summary of
certain of the Federal income tax consequences of certain transactions under
the 1996 Plan based on Federal income tax laws in effect on January 1, 1996.
This summary is not intended to be exhaustive and does not describe state or
local tax consequences.
(a) Nonqualified Stock Options. In general, (i) no
income will be recognized by an optionee at the time a nonqualified stock
option is granted; (ii) at exercise, ordinary income will be recognized by the
optionee in an amount equal to the difference between the option price paid for
the shares and the fair market value of the shares, if unrestricted, on the
date of exercise; and (iii) at sale, appreciation (or depreciation) after the
date of exercise will be treated as either short-term or long-term capital gain
(or loss) depending on how long the shares have been held.
(b) Incentive Stock Options. In general, no income will
be recognized by an optionee upon the grant or exercise of an incentive stock
option (although the difference between the value of the shares and the
exercise price is added to the tax base of the alternative minimum tax). If
shares of Common Stock are issued to the optionee pursuant to the exercise of
an incentive stock option, and if no disqualifying disposition of such shares
is made by such optionee within two years after the date of grant or within one
year after the issuance of such shares to the optionee, then upon the sale of
such shares, any amount realized in excess of the option price will be taxed to
the optionee as a long-term capital gain and any loss sustained will be a
long-term capital loss.
If shares of Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to the excess (if any) of the fair
market value of such shares at the time of exercise (or, if less, the amount
realized on the disposition of such shares if a sale or exchange) over the
option price paid for such shares. Any further gain (or loss) realized by the
participant generally will be taxed as short-term or long-term capital gain (or
loss) depending on the holding period.
12.
<PAGE> 15
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that might incorporate by reference previous or
future filings, including this Proxy Statement, in whole or in part, the
following report and the Performance Graph herein shall not be incorporated by
reference into any of such filings.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised of Donald K. Skinner, Robert
G. Bartizal and George L. Bragg. Donald K. Skinner serves as the Chairman of
the Board and Chief Executive Officer of the Company.
The Company has entered into written employment agreements with each
of its executive officers as of January 1, 1995. The base compensation for
each of the executive officers was fixed at the time of execution of their
respective employment agreements. See "Compensation of Directors and Executive
Officers." Each such executive officer received a bonus under his employment
agreement for the year ended December 31, 1995. The amount of the bonuses was
determined by the Compensation Committee based upon the performance of the
Company, as well as a review of the performance of each executive officer. In
January 1996, those executive officers with one year employment agreements
which expired on December 31, 1995 entered into new one year agreements
containing similar terms to the 1995 agreements, with salary and bonus
increases. The executive officers are eligible to receive a bonus for the
current fiscal year in an amount to be determined by the Compensation Committee
in accordance with the terms of their new employment agreements.
The Company believes that equity ownership by executive officers
provides incentive to build stockholder value and align the interests of
executive officers with the interests of stockholders. Upon the hiring of
executive officers and other key employees, the Stock Option Committee will
typically recommend stock option grants to those persons under the Company's
stock option plan, subject to applicable vesting periods. Thereafter, the
Stock Option Committee will consider awarding grants on a periodic basis. The
Stock Option Committee believes that these additional annual grants will
provide incentive for executive officers to remain with the Company. Options
will be granted at the market price of the Company's Common Stock on the date
of grant and, consequently, will have value only if the price of the Company's
Common Stock increases over the exercise price. In determining the size of the
periodic grants, the Stock Option Committee will consider various factors,
including the amount of any prior option grants, the executive's or employee's
performance during the current fiscal year and his or her expected
contributions during the succeeding fiscal year.
The foregoing report on executive compensation is provided by the
following directors:
Compensation Committee
Robert G. Bartizal
George L. Bragg
Donald K. Skinner
13.
<PAGE> 16
PERFORMANCE GRAPH
The chart below sets forth a line graph comparing the performance of
the Company's Common Stock against the Nasdaq Market (U.S. Companies) index
and the Nasdaq Computer Manufacturers Stocks (SIC 3570-3579 US & Foreign) index
for the period from February 9, 1994 (the date on which the market price of the
Company's shares was first quoted by the Nasdaq National Market following the
Company's initial public offering) through December 29, 1995. The indices
assume that the value of an investment in the Company's Common Stock and each
index was 100 on February 9, 1994 and that dividends were reinvested.
PERFORMANCE GRAPH
ELTRON INTERNATIONAL, INC.
Nasdaq Computer Manufacturing Stock
Nasdaq Stock Market (US Companies)
<TABLE>
<CAPTION>
$900 $800 $700 $600 $500 $400 $300 $200 $100 $0
2/09/94 12/30/94 12/29/95
<S> <C> <C> <C>
ELTRON INTERNATIONAL, INC. 0 239.4 860.6
Nasdaq Computer Manufacturing Stock 98.8 103.3 162.7
Nasdaq Stock Market (US Companies) 94.0 96.6 136.6
</TABLE>
14.
<PAGE> 17
INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December
31, 1995 were Coopers & Lybrand LLP. The Board of Directors of the Company has
not yet considered the selection of an auditor for the current fiscal year. It
is anticipated that the Board will consider the selection and make a decision
by October 31, 1996. A representative of Coopers & Lybrand LLP will be
available at the Annual Meeting to respond to appropriate questions or make any
other statements as such representative deems appropriate.
OTHER MATTERS
If any matters not referred to in this proxy statement should properly
come before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment. The management is not
aware of any such matters which may be presented for action at the meeting.
Matters incident to the conduct of the meeting may be voted upon pursuant to
the proxies.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, AS AMENDED BY FORM 10-K-A, FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION TO
ANY SHAREHOLDER DESIRING A COPY. SHAREHOLDERS MAY WRITE TO THE COMPANY AT:
Corporate Secretary
Eltron International, Inc.
41 Moreland Road
Simi Valley, California 93065
SUBMISSION OF SHAREHOLDER PROPOSALS
Stockholders are advised that any shareholder proposal, including
nominations to the Board of Directors, intended for consideration at next
year's Annual Meeting must be received by the Company no later than April 14,
1997 to be included in the proxy material for next year's Annual Meeting. It
is recommended that shareholders submitting proposals direct them to the
Corporate Secretary, Eltron International, Inc., 41 Moreland Road, Simi Valley,
California 93065, and utilize certified mail, return-receipt requested in order
to ensure timely delivery.
THE STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, AND RETURN PROMPTLY THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Daniel C. Toomey, Jr.
Vice President Finance and Chief
Financial Officer
August 12, 1996
15.
<PAGE> 18
APPENDIX A
ELTRON INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
1. Purpose. The purpose of the Eltron International, Inc. 1996
Stock Option Plan (the "Plan"), is to provide an incentive to officers,
directors and key employees of Eltron International, Inc. (sometimes referred
to as the "Parent") and its subsidiaries (individually and collectively, the
"Company") and to other persons providing significant services to the Company
to remain in the employ of the Company or provide services to the Company and
contribute to its success.
As used in the Plan, the term "Code" shall mean the Internal Revenue
Code of 1986, as amended, and any successor statute, and the terms "Parent" and
"Subsidiary" shall have the meaning set forth in Sections 424(e) and (f) of the
Code.
2. Administration. The Plan shall be administered by either the
Board of Directors of the Company (the "Board") or a Plan Committee which shall
be established by the Board. The Board may appoint and remove members of the
Plan Committee in its discretion subject only to the requirements set forth
herein. The Plan Committee shall be comprised of such number of "non-employee
directors" of the Board as defined in Rule 16b-3 (or any successor rule)
promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, or such other persons as may be
permitted under Rule 16b-3, as such may be amended from to time, in order to
preserve the status of this Plan as a Rule 16b-3 Plan. The Plan Committee or
Board shall determine the meaning and application of the provisions of the Plan
and all option agreements executed pursuant thereto, and its decisions shall be
conclusive and binding upon all interested persons. Subject to the provisions
of the Plan, the Plan Committee and/or the Board shall have the sole authority
to determine:
(a) The persons to whom options to purchase Stock shall
be granted;
(b) The number of options to be granted to each person;
(c) The price to be paid for the Stock upon the exercise
of each option;
(d) The period within which each option shall be
exercised and, with the consent of the optionee, any extensions of such period
(provided, however, that the original period and all extensions shall not
exceed the maximum period permissible under the Plan); and
(e) The terms and conditions of each stock option
agreement entered into between the Company and persons to whom the Company has
granted an option and of any amendments thereto (provided that the optionee
consents to each such amendment).
3. Eligibility. Officers, directors and key employees of the
Company and persons providing significant services to the Company shall be
eligible to receive grants of options under the Plan.
4. Stock Subject to Plan. There shall be reserved for issue upon
the exercise of options granted under the Plan 500,000 shares of Common Stock
of the Parent ("Stock") or the number of shares of Stock, which, in accordance
with the provisions of Section 10 hereof, shall be substituted therefor. Such
shares may be treasury shares. If an option granted under the Plan shall
expire or
16.
<PAGE> 19
terminate for any reason without having been exercised in full, unpurchased
shares subject thereto shall again be available for the purposes of the Plan.
5. Terms of Options
(a) Incentive Stock Options. It is intended that
options granted pursuant to this Section 5(a) qualify as incentive stock
options as defined in Section 422 of the Code. Incentive stock options shall
be granted only to employees of the Company. Each stock option agreement
evidencing an incentive stock option shall provide that the option is subject
to the following terms and conditions and to such other terms and conditions
not inconsistent therewith as the Board or Plan Committee may deem appropriate
in each case:
(1) Option Price. The price to be paid for each
share of Stock upon the exercise of each incentive stock option shall be
determined by the Board or Plan Committee at the time the option is granted,
but shall in no event be less than 100% of the fair market value of the shares
on the date the option is granted, or not less than 110% of the fair market
value of such shares on the date such option is granted in the case of an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or of its Parent or Subsidiaries. As used in this Plan the term "date
the option is granted" means the date on which the Board or Plan Committee
authorizes the grant of an option hereunder or any later date specified by the
Board or Plan Committee. Fair market value of the shares shall be (i) the mean
of the high and low prices of shares of Stock sold on the New York or American
Stock Exchange on the date the option is granted (or if there was no sale on
such date, the highest asked price for the Stock on such date), or (ii) if the
Stock is not listed on either of those exchanges on the date the option is
granted, the mean between the "bid" and "asked" prices of the Stock in the
Nasdaq National Market or Nasdaq Stock Market on the date the option is
granted, or (iii) if the Stock is not traded in any market, the price
determined by the Board or Plan Committee to be fair market value, based upon
such evidence as it may deem necessary or desirable.
(2) Period of Option and Exercise. The period or
periods within which an option may be exercised shall be determined by the
Board or Plan Committee at the time the option is granted, but in no event
shall any option granted hereunder be exercised more than ten years from the
date the option was granted nor more than five years from the date the option
was granted in the case of an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or of its Parent or Subsidiaries.
(3) Payment for Stock. The option exercise price
for each share of Stock purchased under an option shall be paid in full at the
time of purchase. The Board or Plan Committee may provide that the option
price be payable, at the election of the holder of the option and with the
consent of the Board or Plan Committee, in whole or in part either in cash or
by delivery of Stock in transferable form, such Stock to be valued for such
purpose at its fair market value on the date on which the option is exercised.
No share of Stock shall be issued upon exercise until full payment therefor has
been made, and no optionee shall have any rights as an owner of Stock until the
date of issuance to him of the stock certificate evidencing such Stock.
(4) Limitation on Amount Becoming Exercisable In
Any One Calendar Year. Subject to the overall limitations of Section 4 hereof
(relating to the aggregate shares subject to the Plan), the aggregate fair
market value (determined as of the time the option is granted) of Stock with
respect to which incentive stock options are exercisable for the first time by
the optionee during
17.
<PAGE> 20
any calendar year (under the Plan and all other incentive stock option plans of
the Company, the Parent, and Subsidiaries) shall not exceed $100,000.
(b) Nonqualified Stock Options. Nonqualified stock
options may be granted not only to employees but also to directors who are not
employees of the Company and to persons who provide substantial services to the
Company. Each nonqualified stock option granted under the Plan shall be
evidenced by a stock option agreement between the person to whom such option is
granted and the Company. Such stock option agreement shall provide that the
option is subject to the following terms and conditions and to such other terms
and conditions not inconsistent therewith as the Board or Plan Committee may
deem appropriate in each case:
(1) Option Price. The price to be paid for each
share of Stock upon the exercise of an option shall be determined by the Board
or Plan Committee at the time the option is granted. As used in this Plan, the
term "date the option is granted" means the date on which the Board or Plan
Committee authorizes the grant of an option hereunder or any later date
specified by the Board or Plan Committee. To the extent that the fair market
value of Stock is relevant to the pricing of the option by the Board or Plan
Committee, fair market value of the Stock shall be determined as set forth in
Section 5(a)(1) hereof.
(2) Period of Option and Exercise. The period or
periods within which an option may be exercised shall be determined by the
Board or Plan Committee at the time the option is granted, but in no event
shall such period exceed 10 years from the date the option is granted.
(3) Payment for Stock. The option exercise price
for Stock purchased under an option shall be paid in full at the time of
purchase. The Board or Plan Committee may provide that the option exercise
price be payable at the election of the holder of the option, with the consent
of the Board or Plan Committee, in whole or in part either in cash or by
delivery of Stock in transferable form, such Stock to be valued for such
purpose at its fair market value on the date on which the option is exercised.
No share of Stock shall be issued until full payment therefor has been made,
and no optionee shall have any rights as an owner of shares of Stock until the
date of issuance to him of the stock certificate evidencing such Stock.
6. Nontransferability. The options granted pursuant to the Plan
shall be nontransferable except by will or the laws of descent and
distribution, and shall be exercisable during the optionee's lifetime only by
him and after his death, by his personal representative or by the person
entitled thereto under his will or the laws of intestate succession.
7. Termination of Employment or Other Relationship. Upon
termination of the optionee's employment or other relationship with the
Company, his rights to exercise options then held by him shall be only as
follows (in no case do the time periods referred to below extend the term
specified in any option):
(a) Death or Disability. Upon the death of an optionee,
any option which he holds may be exercised (to the extent exercisable at his
death), unless it otherwise expires, within such period after the date of his
death (not to exceed twelve (12) months) as the Board or Plan Committee shall
prescribe in his option agreement, by the employee's representative or by the
person entitled thereto under his will or the laws of intestate succession.
Upon the disability (within the meaning of Section 22(e)(3) of the Code) of an
employee, any option which he holds may be exercised (to the extent exercisable
as of the date of disability), unless it otherwise expires, within
18.
<PAGE> 21
such period after the date of his disability (not to exceed twelve (12) months)
as the Board or Plan Committee shall prescribe in his option agreement.
(b) Retirement. Upon the retirement of an officer,
director or employee or the cessation of services provided by a nonemployee
(either pursuant to a Company retirement plan, if any, or pursuant to the
approval of the Board or Plan Committee), an option may be exercised (to the
extent exercisable at the date of such termination or cessation) by him within
such period after the date of his retirement or cessation of services (not to
exceed three (3) months) as the Board or Plan Committee shall prescribe in his
option agreement.
(c) Other Termination. In the event an officer, director
or employee ceases to serve as an officer or director or leaves the employ of
the Company or a nonemployee ceases to provide services to the Company for any
reason other than as set forth in (a) and (b), above, any option which he holds
shall terminate at (i) the earlier of 30 days after the date (A) his employment
terminates, or (B) he ceases providing services to the Company or the date he
receives written notice that his employment or rendering of services is or will
be terminated, or (ii) such later date as determined by the Board or Plan
Committee not to exceed the maximum period under Section 7(b) hereof with
respect to incentive stock options. The foregoing shall not extend any option
beyond the term specified therein and such option shall be exercisable only to
the extent exercisable at the date of termination of employment or cessation of
services.
(d) Board and Plan Committee Discretion. The Board or
Plan Committee may in its discretion accelerate the exercisability of any or
all options upon termination of employment or cessation of services.
8. Discretionary Acceleration on Merger or Sale of the Parent.
In the event the Parent or its shareholders enter into an agreement to dispose
of all or substantially all of the assets or capital stock of the Parent by
means of a sale, merger, consolidation, reorganization, liquidation or
otherwise, an option granted under the Plan will, in the discretion of the
Board or Plan Committee, if such agreement or transaction is authorized by the
Board of Directors and conditioned upon consummation of such disposition of
assets or stock, become immediately exercisable in full during the period
commencing as of the date of the execution of such agreement and ending as of
the earlier of the stated termination date of the option or the date on which
the disposition of assets or stock contemplated by the agreement is
consummated.
9. Transfer to Related Corporation. In the event an employee
leaves the employ of the Parent to become an employee of a Subsidiary or any
employee leaves the employ of a Subsidiary to become an employee of the Parent
or another Subsidiary, such employee shall be deemed to continue as an employee
for purposes of this Plan.
10. Adjustment of Shares; Termination of Options.
(a) Adjustment of Shares. In the event of changes in the
outstanding Stock by reason of stock dividends, split-ups, consolidations,
recapitalizations, reorganizations or like events (as determined by the Board
or Plan Committee), an appropriate adjustment shall be made by the Board or
Plan Committee in the number of shares reserved under the Plan, in the number
of shares set forth in Section 4 hereof, and in the number of shares and the
option price per share specified in any stock option agreement with respect to
any unpurchased shares. The determination of the Board or Plan Committee as to
what adjustments shall be made shall be conclusive. Adjustments for any
options to purchase fractional shares shall also be determined by the Board or
Plan Committee. The
19.
<PAGE> 22
Board or Plan Committee shall give prompt notice to all optionees of any
adjustment pursuant to this Section.
(b) Termination of Options on Merger; Sale or Liquidation
of Parent. Notwithstanding anything to the contrary in this Plan, in the event
of any merger, consolidation or other reorganization of the Parent in which the
Parent is not the surviving or continuing corporation (as determined by the
Board or Plan Committee) or in the event of the liquidation or dissolution of
the Parent, all options granted hereunder shall terminate on the effective date
of the merger, consolidation, reorganization, liquidation, or dissolution
unless there is an agreement with respect thereto which expressly provides for
the assumption of such options by the continuing or surviving corporation.
11. Securities Law Requirements. The Company's obligation to
issue shares of its Stock upon exercise of an option is expressly conditioned
upon the completion by the Company of any registration or other qualification
of such shares under any state and/or federal law or rulings and regulations of
any government regulatory body or the making of such investment representations
or other representations and undertakings by the optionee (or his legal
representative, heir or legatee, as the case may be) in order to comply with
the requirements of any exemption from any such registration or other
qualification of such shares which the Company in its sole discretion shall
deem necessary or advisable. The Company may refuse to permit the sale or
other disposition of any shares acquired pursuant to any such representation
until it is satisfied that such sale or other disposition would not be in
contravention of applicable state or federal securities law.
12. Tax Withholding. As a condition to exercise of an option or
otherwise, the Company may require an optionee to pay over to the Company all
applicable federal, state and local taxes which the Company is required to
withhold with respect to the exercise of an option granted hereunder. At the
discretion of the Board or Plan Committee and upon the request of an optionee,
the minimum statutory withholding tax requirements may be satisfied by the
withholding of shares of Stock otherwise issuable to the optionee upon the
exercise of an option.
13. Amendment. The Board of Directors may amend the Plan at any
time, except that without shareholder approval:
(a) The number of shares of Stock which may be reserved
for issuance under the Plan shall not be increased except as provided in
Section 10(a) hereof;
(b) The option price per share of Stock subject to
incentive options may not be fixed at less than 100% of the fair market value
of a share of Stock on the date the option is granted;
(c) The maximum period of ten (10) years during which the
options may be exercised may not be extended;
(d) The class of persons eligible to receive options
under the Plan as set forth in Section 3 shall not be changed; and
(e) This Section 13 may not be amended in a manner that
limits or reduces the amendments which require shareholder approval.
14. Effective Date. The Plan shall be effective upon its adoption
by the Board of Directors of the Company. Options may be granted but not
exercised prior to shareholder approval of the Plan. If any options are so
granted and shareholder approval shall not have been obtained
20.
<PAGE> 23
within 12 months of the date of adoption of this Plan by the Board of
Directors, such options shall terminate retroactively as of the date they were
granted.
15. Termination. The Plan shall terminate automatically as of the
close of business on the day preceding the 10th anniversary date of its
adoption by the Board of Directors or earlier by resolution of the Board of
Directors or upon consummation of the disposition of capital stock or assets of
the Parent, as described in Sections 8 and 10(b) hereof. Unless otherwise
provided herein, the termination of the Plan shall not affect the validity of
any option agreement outstanding at the date of such termination.
16. Stock Option Agreement. Each option granted under the Plan
shall be evidenced by a written agreement ("Stock Option Agreement") executed
by the Company and accepted by the optionee, which (i) shall contain each of
the provisions and agreements herein specifically required to be contained
therein, (ii) shall indicate whether such option is to be an incentive stock
option or a nonqualified stock option, and if it is to be an incentive stock
option, such Stock Option Agreement shall contain terms and conditions
permitting such option to qualify for treatment as an incentive stock option
under Section 422 of the Code, (iii) may contain the agreement of the optionee
to remain in the employ of, and/or to render services to, the Company or any
Parent or Subsidiary for a period of time to be determined by the Board or Plan
Committee, and (iv) may contain such other terms and conditions as the Board or
Plan Committee deems desirable and which are not inconsistent with the Plan.
17. No Right to Employment. Nothing in this Plan or in any option
granted hereunder shall confer upon any optionee any right to continue in the
employ of the Company or to continue to perform services for the Company or any
Parent or Subsidiary, or shall interfere with or restrict in any way the rights
of the Company to discharge or terminate any officer, director, employee,
independent contractor or consultant at any time for any reason whatsoever,
with or without good cause.
This 1996 Stock Option Plan was approved by the Board as of August 1,
1996.
21.
<PAGE> 24
PRELIMINARY COPY
ELTRON INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 6, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF ELTRON INTERNATIONAL, INC.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, each dated August 12, 1996, and does hereby
appoint Donald K. Skinner, Hugh K. Gagnier and Daniel C. Toomey, Jr. (the
"Proxies"), and each of them, with full power of substitution, as the proxy of
the undersigned to represent the undersigned and to vote all shares of Common
Stock of Eltron International, Inc. which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders, to be held on
September 6, 1996, at the Radisson Hotel, 999 Enchanted Way, Simi Valley, CA
93065, and at any adjournments thereof.
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
Donald K. Skinner, Hugh K. Gagnier, Robert G. Bartizal, George L. Bragg
(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name on the line that follows:
- - --------------------------------------------------------------------------------
PROXIES NOT MARKED TO WITHHOLD AUTHORITY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES WHOSE NAMES ARE NOT WRITTEN ON THE ABOVE LINE.
2. The adoption and approval of the Company's 1996 Stock Option Plan
pursuant to which options for up to 500,000 shares of Common Stock may be
granted.
FOR / / AGAINST / / ABSTAIN / /
3. At their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 25
PRELIMINARY COPY
The shares represented hereby will be voted as directed. Where no direction
is made, the shares will be voted FOR proposals 1 and 2.
______________________________ ______________________________
(Signature) (Signature, if held jointly)
Dated: , 1996
(Please sign exactly as
your name or names appear
hereon, and when signing
as attorney, executor,
administrator, trustee or
guardian, give your full
title as such. If the
signatory is a
corporation, sign the
full corporate name by a
duly authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
