<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TURBOCHEF, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(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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(4) Proposed maximum aggregate value of transaction:
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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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF TURBOCHEF, INC. APPEARS HERE]
__________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 1997
_________________________
To our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
TurboChef, Inc., a Delaware corporation ("TurboChef"), will be held at the
offices of Henry, Meier, Jones & Johnson, L.L.P., 1700 Pacific Avenue, Suite
2700, Dallas, Texas 75201 on Tuesday, June 17, 1997 at 10:00 a.m., local time,
for the purpose of considering and acting upon:
(1) a proposal to elect directors of TurboChef to serve as the Board of
Directors until the next annual meeting of stockholders and until
their successors are elected and qualified;
(2) a proposal to amend the Fourth Article of the Company's Restated
Articles of Incorporation to increase the number of authorized shares
of Common Stock from 20,000,000 shares to 50,000,000 shares;
(3) a proposal to amend the Company's 1994 Stock Option Plan, as amended,
to increase the number of shares of Common Stock authorized for
issuance from 2,400,000 shares to 3,150,000 shares;
(4) a proposal to ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the 1997 fiscal year; and
(5) such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 15, 1997 as
the record date for determining stockholders entitled to notice of and to vote
at the meeting or any adjournments or postponements thereof.
A proxy and postage prepaid return envelope are enclosed for your
convenience.
By Order of the Board of Directors,
Dennis J. Jameson
Corporate Secretary
Dallas, Texas
May 21, 1997
It is important that your shares be represented at the Annual Meeting.
Please complete, date, sign, and mail the enclosed proxy card promptly in the
return envelope provided, regardless of whether you plan to attend the Annual
Meeting, so that your vote may be recorded. If you are present at the Annual
Meeting, you may withdraw your proxy and vote in person if you so desire.
<PAGE>
[LETTERHEAD OF TURBOCHEF, INC. APPEARS HERE]
________________________
PROXY STATEMENT
________________________
This Proxy Statement is furnished to the holders ("Stockholders") of common
stock, par value $.01 per share ("Common Stock"), of TurboChef, Inc., a Delaware
corporation ("TurboChef" or the "Company"), in connection with the solicitation
of proxies by the Board of Directors for use at the Annual Meeting of
Stockholders of TurboChef to be held on Tuesday, June 17, 1997, and any
adjournment thereof. A copy of the Notice of Annual Meeting accompanies this
Proxy Statement. It is anticipated that this Proxy Statement and the
accompanying proxy card will be first mailed to Stockholders on or about May 21,
1997.
GENERAL
-------
Stockholders Entitled to Vote. May 15, 1997, has been fixed as the record
-----------------------------
date for the determination of Stockholders entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof. As of that date, the Company had
outstanding 13,861,411 shares of Common Stock, the only outstanding voting
securities of the Company. Stockholders are entitled to one vote for each share
owned upon all matters to be considered at the Annual Meeting.
Quorum. The presence at the Annual Meeting, in person or by proxy, of the
------
holders of a majority of the shares of Common Stock outstanding on May 15, 1997,
will constitute a quorum, permitting the meeting to conduct its business.
Abstentions and broker non votes will be included in the calculation of the
number of shares considered to be present at the Annual Meeting.
Voting. If the accompanying proxy card is properly signed, returned to the
------
Company and not revoked, it will be voted as directed by the Stockholder. Unless
contrary instructions are given, the persons designated as proxy holders in the
proxy card will vote (i) for the slate of nominees for election as directors
proposed by the Board of Directors, (ii) for the proposal to amend the Company's
Restated Articles of Incorporation to increase the number of authorized shares
of Common Stock, (iii) for the proposal to amend the Company's 1994 Stock Option
Plan, as amended, (iv) for ratification of the appointment of KPMG Peat Marwick
LLP as the Company's independent accountants for the 1997 fiscal year, and (v)
as recommended by the Board of Directors with regard to any other matters or, if
no recommendation is given, in their own discretion.
The affirmative vote of a plurality of the votes cast at the Annual Meeting
will be required for the election of directors. A properly executed proxy
marked "WITHHOLD AUTHORITY" with respect to the election of one or more
directors will not be voted with respect to the director or directors indicated,
although it will be counted for purposes of determining whether there is a
quorum. For each other item to be acted upon at the Annual Meeting, the
affirmative vote of the holders of a majority of the shares represented in
person or by proxy and entitled to vote on the item
-1-
<PAGE>
will be required for approval. A properly executed proxy marked "ABSTAIN" with
respect to any such matter will not be voted, although it will be counted for
purposes of determining whether there is a quorum. Accordingly, an abstention
will have the effect of a vote against the matter in question.
All votes will be tabulated by the inspector of election appointed for the
Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast with respect to any issue and will have the same effect
as negative votes. Broker non-votes are not counted for any purpose in
determining whether a matter has been approved.
A list of Stockholders entitled to vote at the Annual Meeting will be open
to examination by any Stockholder, for any purpose germane to the meeting, at
10500 Metric Drive, Suite 128, Dallas Texas 75243, during ordinary business
hours for ten days prior to the Annual Meeting. Such list shall also be
available during the Annual Meeting.
Revocation of a Proxy. A Stockholder may revoke his proxy at any time
---------------------
before it is exercised by filing with the Chairman of the Board of the Company
at the Company's executive offices in Dallas, Texas, either a written notice of
revocation or a duly executed proxy bearing a later date, or by appearing in
person at the Annual Meeting and expressing a desire to vote his or her shares
in person. Attendance at the Annual Meeting will not, in itself, constitute
revocation of a previously granted proxy.
By Whom and the Manner in which the Proxy is being Solicited. The enclosed
------------------------------------------------------------
proxy is solicited by and on behalf of the Board of Directors of the Company.
The expense of the solicitation of proxies for the Annual Meeting, including the
cost of mailing, will be borne by the Company.
In addition to the use of the mails, the Company will request persons
holding Common Stock in their name or custody on behalf of others, or as
nominees, to send proxy materials to their principals and request authority for
the execution of the proxies and will reimburse such persons for their expense
in so doing.
To the extent necessary in order to assure sufficient representation at the
Annual Meeting, officers and regular employees of the Company, at no additional
compensation, may request the return of proxies personally or by telephone or
telegram. The extent to which this will be necessary depends entirely on how
promptly proxies are received, and Stockholders are urged to send in their
proxies without delay. The Board of Directors has no knowledge or information
that any other person will specifically engage any employees to solicit proxies.
Annual Report. A copy of the Company's Annual Report to Stockholders for
-------------
the year ended December 31, 1996, will be first mailed on or about May 21, 1997
to all Stockholders entitled to vote at the Annual Meeting. The Annual Report to
Stockholders is not incorporated by reference into this Proxy Statement and is
not to be deemed a part hereof.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 21, 1997,
based on information obtained from the persons named below, relating to the
beneficial ownership of shares of Common Stock by (i) each beneficial owner of
more than five percent of the outstanding Common Stock, (ii) each director,
(iii) each executive named in the Summary Compensation Table in "Executive
Compensation" and (iv) all current executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
- ------------------- ------------- -----
<S> <C> <C>
Jeffrey B. Bogatin
126 East 56th Street
New York, New York 10022............ 6,028,520(2) 41.12%
Stonehill Capital Management, Inc.
277 Park Avenue
New York, New York 10172............ 1,554,940(3) 11.22%
Robert L. Emerson
277 Park Avenue
New York, New York 10172............ 1,554,940(3) 11.22%
Philip R. McKee
c/o TurboChef, Inc.
10500 Metric Drive, Ste. 128
Dallas, Texas 75243................. 2,138,720(4) 15.43%
Donald J. Gogel
375 Park Avenue, 18th Floor
New York, New York 10152............ 343,512(5) 2.47%
Mr. Joseph F. Fogliano
530 Pine Street
P.O. Box 772655
Steamboat Springs, Colorado 80477... 4,000 .03%
Dennis J. Jameson
c/o TurboChef, Inc.
10500 Metric Drive, Ste. 128
Dallas, Texas 75243................. 47,500 .34%
Robert S. Briggs, Jr.
c/o TurboChef, Inc.
10500 Metric Drive, Ste. 128
Dallas, Texas 75243................. 51,631 .37%
All directors and executive
officers as a group (7 persons)..... 8,615,133(6) 58.41%
</TABLE>
-3-
<PAGE>
(1) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within 60
days upon the exercise of options and warrants. Each beneficial owner's
percentage ownership is determined by assuming that options and warrants
that are held by such person (but not those held by any other person) and
which are exercisable within 60 days have been exercised. Percentages herein
assume a base of 13,861,411 shares of Common Stock outstanding, before any
consideration is given to outstanding options or warrants.
(2) Includes 4,222 shares of Common Stock which are subject to options issued by
Mr. Bogatin in connection with the August Stock Option Agreements (as
hereinafter defined), see "Certain Relationships and Related Transactions"
and 800,000 shares issuable upon exercise of immediately exercisable Options
granted under the Company's 1994 Stock Option Plan, as amended (the "Option
Plan").
(3) Stonehill Capital Management, Inc. ("SCM") is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940. Robert
L. Emerson is the President of SCM. SCM and Mr. Emerson share the power to
vote, direct the vote, dispose of and direct the disposition of all
1,554,940 of these shares. Of such shares, 1,554,640 (11.22%) of the
outstanding shares of the Company are held by Stonehill Capital Partners,
L.P., a partnership whose investments are managed by SCM. This partnership
has no authority to vote or dispose of these shares.
(4) Includes 1,976 shares of Common Stock which are subject to options issued by
Mr. McKee in connection with the August Stock Option Agreements.
(5) Includes 3,590 shares of Common Stock which are subject to options issued by
Mr. Gogel in connection with the August Stock Option Agreements and 40,000
shares issuable upon exercise of immediately exercisable Options granted
under the Option Plan.
(6) Includes an aggregate of 9,788 shares of Common Stock which are subject to
options issued by Messrs. Bogatin, McKee and Gogel in connection with the
August Stock Option Agreements and an aggregate of 888,666 shares issuable
upon exercise of immediately exercisable Options granted under the Option
Plan.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who beneficially own
more than ten percent of a registered class of the Company's equity securities
("ten percent stockholders") to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers, Inc. ("NASD"). Executive officers, directors
and ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all 16(a) forms they file. The Company's executive
officers, directors and ten percent stockholders became
-4-
<PAGE>
subject to these requirements in April 1994, when the registration statement
relating to the Company's initial public offering was declared effective by the
SEC.
Based solely upon the Company's review of the copies of such forms received
by it, or written representations from certain reporting persons, the Company
believes that during the fiscal year ended December 31, 1996, all filing
requirements applicable to its executive officers, directors and ten percent
stockholders were fulfilled on a timely basis, except that (i) one report with
respect to a sale of shares by Jeffrey B. Bogatin was inadvertently filed late
and (ii) one report with respect to a sale of shares by Philip R. McKee was
inadvertently filed late.
PROPOSAL 1
PROPOSAL TO ELECT DIRECTORS
GENERAL INFORMATION
The Company's Board of Directors currently has four (4) Directors. Four
directors are to be elected at the Annual Meeting to serve, subject to the
provisions of the Company's Bylaws, until the next Annual Meeting of
Stockholders, and until their successors are duly elected and qualified.
Each of the current members of the Board of Directors has been nominated by
the Company to be reelected as a director at the Annual Meeting. The Board of
Directors has no reason to believe that any nominee will refuse or be unable to
accept election; however, in the event that one or more nominees are unable to
accept election or if any other unforeseen contingencies should arise, each
proxy that does not direct otherwise will be voted for the remaining nominees,
if any, and for such other persons as may be designated by the Board of
Directors.
Directors' Compensation; Attendance. Directors currently receive no cash
-----------------------------------
compensation for serving on the Board of Directors other than reimbursement of
reasonable expenses incurred in attending meetings. In connection with
retaining Joseph F. Fogliano to serve as a member of the Board of Directors, in
fiscal year 1996 the Company paid Mr. Fogliano 2,000 shares of Common Stock in
lieu of payment of cash directors' fees and granted him options to acquire 2,000
shares of Common Stock in accordance with the Company's 1994 Stock Option Plan,
as amended. In addition, for each subsequent year that Mr. Fogliano serves as a
member of the Board of Directors he will be entitled to receive, in lieu of
payment of cash directors' fees, shares of Common Stock valued at $25,000.
During the last fiscal year, there has been one meeting of the Board of
Directors of the Company and 16 unanimous written consents of the Board of
Directors of the Company in lieu of meetings. Each director attended more than
75% of the total meetings of the Board of Directors.
Committees of the Board. The Board of Directors has no standing audit,
-----------------------
nominating or compensation committees or committees performing similar
functions.
-5-
<PAGE>
Election Arrangements. Pursuant to a shareholders agreement, each of Messrs.
---------------------
Bogatin and McKee has agreed to vote for the other to serve as a member of the
Board of Directors, and, as members of the Board, each has agreed to vote for
the election of the other as an officer of the Company.
The Company has agreed, for a period of three years from June 12, 1996, to
permit a designee of Whale Securities Co., L.P., the underwriter of the
Company's secondary public offering (which designee may change from time to
time) to serve as a non-voting advisor to the Company's Board of Directors.
NOMINEES
Set forth below are the names and ages of the nominees, the principal
occupation of each, the year in which first elected a director of the Company,
the business experience of each for at least the past five years and certain
other information concerning each of the nominees.
JEFFREY B. BOGATIN, age 48, a co-founder of the Company, has been Chairman
of the Board of the Company since its inception in 1991. He was also Treasurer
of the Company until June 1996. Since 1975, Mr. Bogatin has served as President
of Whitemarsh Industries, Inc., which is engaged in manufacturing and importing
ladies apparel and making venture capital investments.
PHILIP R. MCKEE, age 40, a co-founder of the Company, has been President,
Chief Executive Officer and a director of the Company since its inception in
1991. He was also Secretary of the Company until January 1994. From May 1989
until November 1991, Mr. McKee was President of MicroGold, Inc., a food product
manufacturing company, and from January 1986 until April 1989, he served as
President of Tracer, Inc., a technology development and operations company.
DONALD J. GOGEL, age 48, has been a director of the Company since April
1993. Since February 1989, Mr. Gogel has been a principal of Clayton, Dubilier &
Rice, Inc., a private investment firm, and has served as President since January
1997. Mr. Gogel is a director of Lexmark International, Inc., and its parent
Lexmark Holding, Inc., McCarthy, Crisanti & Maffeim, Inc., and its parent MCM
Group Inc., Alliant Foodservice, Inc., and its parent, CDRF Holding, Inc., and
Kinko's, Inc.
JOSEPH F. FOGLIANO, age 57, has been a director of the Company since June
1996. From 1993 until his retirement in 1996, Mr. Fogliano was Executive Vice
President of Maytag Corporation and President of the Maytag North American
Appliance Group. From 1988 to 1993 he served as President and Chief Executive
Officer of Thomson Consumer Electronics.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
EACH DIRECTOR NOMINEE NAMED ABOVE
-6-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation paid to or accrued by
the Company's Chief Executive Officer and the two most highly compensated
executive officers of the Company for services rendered to the Company during
the fiscal years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
LONG TERM NO. OF STOCK
NAME AND PRINCIPAL FISCAL ALL OTHER COMPENSATION OPTIONS
POSITION YEAR SALARY BONUS COMPENSATION AWARDS GRANTED
- -------- ---- ------ ----- ------------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Philip R. McKee, 1996 $ 95,000 $ -0- $-0- $-0- 250,000
President and Chief 1995 73,077/(1)/ -0- -0- -0- -0-
Executive Officer 1994 110,385 -0- -0- -0- -0-
Dennis J. Jameson, 1996 $135,000 $ 7,500 $-0- $-0- 120,000
Executive Vice President, 1995 1,635 -0- -0- -0- -0-
Chief Financial Officer, 1994 -0- -0- -0- -0- -0-
Secretary and Treasurer
Robert S. Briggs, Jr. 1996 $117,054/(2)/ $ -0- $-0- $-0- -0-
Vice President - Engineering 1995 60,000 -0- -0- -0- 40,000
1994 74,277 -0- -0- -0- 30,000
</TABLE>
/(1)/ Pursuant to Mr. McKee's employment agreement with the Company, he was
entitled to receive annual salary of $95,000 for the fiscal year ended
December 31,1995; however, he did not receive a salary from March 17 to
May 26, 1995 during which time he received $3,745 every two weeks in
repayment of certain indebtedness from the Company.
/(2)/ Includes $32,054 paid to Mr. Briggs in 1996 for salary earned in 1994 and
1995.
OPTION GRANTS FOR FISCAL 1996
The following table sets forth as to each of the named executive officers
information with respect to option grants during fiscal 1996 and the potential
realizable value of such option grants.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM /(2)/
----------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE PER EXPIRATION
NAME GRANTED/(1)/ EMPLOYEES SHARE DATE 5% 10%
- ---- ------------ --------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Philip R. McKee 250,000 28.2% $13.20 2/01 $438,000 $534,000
Dennis J. Jameson 120,000 13.5% $10.75 1/01 $356,000 $435,000
Robert S. Briggs, Jr. -0- - - - - -
</TABLE>
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<PAGE>
/(1)/ These are options granted under the Company's 1994 Stock Option Plan, as
amended, to acquire shares of Common Stock.
/(2)/ The potential realizable value of the options, if any, granted in 1996 to
each of these executive officers was calculated by multiplying those
options by the excess of (a) the assumed market value of Common Stock, at
the end of option term, if the market value of Common Stock were to
increase 5% or 10% in each year of the option's 5-year term over (b) the
exercise price shown. This calculation does not take into account any
taxes or other expenses which might be owed. The 5% and 10% appreciated
rates are set forth in the Securities and Exchange Commission rules and no
representation is, of course, made that the Common Stock will appreciate
at these assumed rates or at all.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
VALUE REALIZED OPTIONS THE-MONEY OPTIONS AT
SHARES (MARKET PRICE AT AT FISCAL YEAR-END FISCAL YEAR-END /(1)/
ACQUIRED ON EXERCISE LESS ------------------ ---------------------
NAME EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip R. McKee -0- -0- -0- 250,000 $ -0- $2,231,250
Dennis J. Jameson -0- -0- -0- 120,000 $ -0- $1,365,000
Robert S. Briggs, Jr. 26,666 $59,999 16,666 26,668 $264,577 $ 411,688
</TABLE>
/(1)/ Value of unexercised options equals fair market value of the shares
underlying in-the-money options at December 31, 1996 ($22.12), less the
exercise price, times the number of in-the-money options outstanding.
EXECUTIVE EMPLOYMENT AGREEMENT
In May 1993, the Company entered into a three-year employment agreement
with Philip R. McKee, providing for his employment as President of the Company.
The term of this agreement was subsequently extended in March 1996, pursuant to
the mutual agreement of the Company and Mr. McKee, for an additional three-year
period. The employment agreement requires Mr. McKee to devote all of his
business time to the affairs of the Company, for which he is entitled to receive
a base salary of $95,000 per year. Originally, Mr. McKee's employment agreement
provided for an annual base salary of $250,000 but was subsequently amended in
December 1993 to provide for an annual base salary of $120,000 commencing as of
January 1, 1994. Pursuant to this amendment, the Company was also relieved of
any liability with respect to any accrued and unpaid compensation due to Mr.
McKee as of that date. Consequently, an aggregate of $95,000 in accrued and
unpaid salary as of December 31, 1993 was eliminated as of such date. Effective
as of July 30, 1994, Mr. McKee voluntarily reduced his annual base salary again,
this time to its current $95,000 level. The employment agreement currently
expires in March 1999 and, thereafter, will be automatically renewed for
successive one-year terms unless the Company or the executive elects not to
renew. The employment agreement with Mr. McKee provides that during the term of
his employment with the Company and thereafter for the remaining stated term or
two years from the date of termination, whichever is longer, Mr. McKee will be
subject to a noncompetition covenant. In addition, Mr. McKee is entitled to
receive other benefits that are generally provided to other employees of the
Company.
-8-
<PAGE>
AUGUST 1993 STOCK OPTION AGREEMENTS
Pursuant to agreements dated as of August 10, 1993, Messrs. Bogatin, McKee
and Gogel granted five-year options to purchase an aggregate of 161,504 of their
shares of Common Stock (104,448 shares, 48,980 shares and 8,076 shares,
respectively), at a price of $1.25 per share, to nine persons employed or
retained by the Company or Cyten who had significantly contributed to the
development of the Company, the TurboChef cooking system and the Company's
cooking technologies (the "August Stock Option Agreements"). The options are
exercisable over the period commencing on April 7,1995, and ending in August
1998, subject to certain exceptions. As of April 30, 1997, options to purchase
an aggregate of only 9,788 shares of Common Stock remained outstanding pursuant
to the August Stock Option Agreements and Messrs. Bogatin, McKee and Gogel had
outstanding obligations to sell 4,222 shares, 1,976 shares and 3,590 shares,
respectively.
CERTAIN TRANSACTIONS
On March 30, 1996, Mr. Bogatin and Mr. McKee advanced to the Company
$200,000 and $85,000, respectively. The notes evidencing such borrowings bear
interest at the rate of 6.5% per annum and are payable upon demand. These loans
were made to satisfy certain eligibility requirements in order for the Company's
Common Stock to continue to be listed on NASDAQ. These loans were repaid by the
Company on June 12, 1996.
STOCK PERFORMANCE GRAPH
- -----------------------
The following line graph compares the total stockholder return (stock price
growth plus dividends) of the Common Stock from April 7, 1994 through December
31, 1996, with the total stockholder return for the same period of a peer group
index. The graph assumes that the value of the investment in the Common Stock
and each index was $100 on April 7, 1994 and all dividends were reinvested. The
Company notes that the Company's initial public offering occurred on April 7,
1994 and that the initial offering price of $2.50 was used as the beginning
price for the Company's stock price on the performance graph.
-9-
<PAGE>
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
BASE PERIOD RETURN RETURN RETURN
COMPANY/INDEX NAME APRIL '94 1994 1995 1996
------------------ --------- ---- ---- ----
<S> <C> <C> <C> <C>
TurboChef, Inc. 100.00 66.47 547.62 842.86
Peer Group Index* 100.00 153.06 216.80 327.73
Nasdaq Market Index 100.00 102.34 132.74 164.95
</TABLE>
* The common stock of the following companies have been included in the
peer group index: AquaCare Systems, Inc., Culligan Water Technology, Engineered
Support Systems, Environment/One Corp., Harmony Brook, Inc., Helpmate Robotics,
Inc., Middleby Corp., Minuteman International, Inc., Recovery Engineering, Inc.,
Tennant Co., TurboChef, Inc., and United States Filter Corp.
-10-
<PAGE>
PROPOSAL 2
PROPOSAL TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors unanimously proposes that the Fourth Article of the
Company's Restated Articles of Incorporation be amended to increase the number
of authorized shares of Common Stock from 20,000,000 shares to 50,000,000
shares. Of the 20,000,000 shares of Common Stock currently authorized for
issuance under the Company's Restated Articles of Incorporation, the Company had
13,861,411 shares issued and outstanding on April 21, 1997. As of such date,
the Company had 1,973,800 shares subject to issuance pursuant to the Company's
1994 Stock Option Plan, as amended, and 379,166 shares subject to issuance upon
the exercise of certain other stock options. The Board of Directors believes
that this amendment would benefit the Company by providing greater flexibility
to the Board of Directors to issue additional equity securities, for example, to
raise additional capital, to facilitate possible future acquisitions, to provide
stock related employee benefits and to effect stock splits of the outstanding
Common Stock.
The additional authorized but unissued shares may be issued by the Board of
Directors without further action by the Stockholders, and the Stockholders will
have no preemptive rights with respect to such additional authorized but
unissued shares. Although the Company considers from time to time mergers,
acquisitions and other transactions that may involve the issuance of additional
shares of Common Stock (any one or more of which may be under consideration or
acted upon at any time), the Company is not a party to any agreements with
respect to any such transactions, nor does it have any agreements, commitments
or understandings with respect to such transactions or that would involve the
issuance of additional shares of Common Stock in amounts that would exceed the
number of currently authorized and unissued shares. Moreover, the Company has
no other arrangements, agreements, understandings or plans at this time for the
issuance of any shares of Common Stock, except for shares of Common Stock
heretofore reserved for issuance upon the exercise of previously granted stock
options under the Company's 1994 Stock Option Plan, as amended, or stock option
agreements unrelated to such plan.
The additional authorized shares of Common Stock could be issued to deter a
hostile takeover attempt of the Company. Such action could insulate incumbent
management from removal and prevent the Stockholders from being able to sell
their shares to a potential acquiror. The Board of Directors is not aware of
any current proposals by any party to acquire control of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THIS AMENDMENT
TO THE COMPANY'S RESTATED ARTICLES OF INCORPORATION.
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<PAGE>
PROPOSAL 3
PROPOSAL TO INCREASE SHARES AVAILABLE
UNDER 1994 STOCK OPTION PLAN
The Board of Directors unanimously proposes that the Stockholders approve
an amendment to the Company's 1994 Stock Option Plan, as amended, (the "Option
Plan"), increasing by 750,000 the number of shares of the Common Stock reserved
for issuance under such plan. Under the Option Plan as adopted by the Company's
stockholders in 1994, 2,400,000 shares of Common Stock were reserved for
issuance in connection with the grant of restricted stock under such plan. In
connection with converting certain debts owed by the Company to Jeffrey B.
Bogatin into equity, the Company granted Mr. Bogatin options under the Option
Plan to acquire an aggregate of 1,000,000 shares of Common Stock. Currently, as
a result of these transactions and other grants to qualified individuals, as of
April 21, 1997, only 75,334 shares remained available for issuance under the
Option Plan. The Board of Directors believes that the proposed increase in the
number of shares available for issuance under the Option Plan is necessary in
order to continue the effectiveness of the Option Plan in attracting,
motivating, and retaining outside directors, officers and key employees with
appropriate experience and ability, and to increase the grantees' alignment of
interest with the Company's stockholders.
SUMMARY OF EXISTING TERMS OF OPTION PLAN
The following summary of the principal features of the Option Plan is
subject to the specific provisions contained in the official text of the Option
Plan.
In January 1994, in order to attract, retain and motivate employees
(including officers), directors, consultants and other persons who perform
substantial services for or on behalf of the Company, the Company adopted the
Option Plan, which was subsequently amended in March 1994, June 1995 and
February 1997, pursuant to which stock options covering an aggregate of
2,400,000 shares of the Company's Common Stock may be granted to such persons.
Under the Option Plan, "incentive stock options" ("Incentive Options") within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), may be granted to employees (including officers), and non-incentive
stock options ( "Non-incentive Options") may be granted to any such employee and
to other persons (including directors) who perform substantial services for or
on behalf of the Company. Incentive Options and Non-incentive Options are
collectively referred to herein as "Options".
The Option Plan is administered by the Board of Directors, which is vested
with complete authority to administer and interpret the Option Plan, determine
the terms upon which Options may be granted, prescribe, amend and rescind such
interpretations and determinations and grant Options. The Board of Directors
also has the power to terminate or amend the Option Plan from time to time in
such respects as it deems advisable, except that no termination or amendment
shall materially adversely affect any outstanding Option without the consent of
the grantee, and the approval of the Company's stockholders is required in
respect of any amendment which would (i) change the total
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<PAGE>
number of shares subject to the Option Plan or (ii) change the designation or
class of employees or other persons eligible to receive Incentive Options or
Non-incentive Options.
The price at which shares covered by an Option may be purchased is
determined on the date of the Option grant by the Board of Directors but may be
no less than the par value of such shares and, in the case of Incentive Options,
no less than the fair market value of such shares on the date of grant (the
"Fair Market Value"). The Fair Market Value is generally equal to the last sale
price quoted for shares of Common Stock on the Nasdaq SmallCap Market ("NASDAQ")
on the date of grant. The purchase price of shares issuable upon exercise of an
Option may be paid in cash or by delivery of shares with a value equal to the
exercise price of the Option. The Company may also loan the purchase price to
the optionee, or guarantee third-party loans to the optionee, on terms and
conditions acceptable to the Board of Directors. The number of shares covered by
an Option is subject to adjustment for stock splits, mergers, consolidations,
combinations of shares, reorganizations and recapitalizations. Options are
generally non-transferable except by will or by the laws of descent and
distribution, and in the case of employees, with certain exceptions, may be
exercised only so long as the optionee continues to be employed by the Company.
If the employee dies or becomes disabled, the right to exercise the Option, to
the extent then vested, continues for specified periods. Non-incentive Options
may be exercised within a period not exceeding ten years from the date of grant.
The terms of Incentive Options are subject to additional restrictions provided
by the Option Plan.
As of April 21, 1997, Options to purchase 1,963,800 shares of Common Stock
were outstanding, and Options to purchase an additional 75,334 shares were
available for future grant. In addition to the foregoing, Options to purchase an
aggregate of 360,866 shares of Common Stock have been exercised, including
Options to purchase an aggregate of 200,000 shares of Common Stock at $2.50 per
share, which were exercised by Mr. Bogatin in June and December 1995.
Awards of Options under the Option Plan in fiscal year 1996 to the three
most highly compensated executive officers are set forth on the Summary
Compensation Table on page 7. Awards were made to the following groups during
fiscal year 1996 under the Option Plan:
<TABLE>
<CAPTION>
NO. OF OPTIONS
--------------
<S> <C>
All current executive officers, as a group 420,000
All current directors who are not executive
officers, as a group 252,000
All employees who are not executive officers,
as a group 215,000
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ADOPTION
OF THIS AMENDMENT OF THE 1994 STOCK OPTION PLAN.
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<PAGE>
PROPOSAL 4
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP, which audited
the Company's 1996 financial statements, as the Company's independent public
accountants for the year ending December 31, 1997. KPMG Peat Marwick LLP has
audited the books of the company since 1994. A proposal to ratify the
appointment will be presented at the Annual Meeting. Representatives of KPMG
Peat Marwick LLP are not expected to be present at the Annual Meeting.
Ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the year ending December 31, 1997 will
require the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy and entitled to vote at the Annual Meeting. In
the event the Stockholders do not ratify the appointment of KPMG Peat Marwick
LLP for the forthcoming fiscal year such appointment will be reconsidered by the
Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
RATIFYING THE APPOINTMENT OF KPMG PEAT MARWICK LLP
STOCKHOLDER NOMINATION OF DIRECTORS
Nominations of individuals other than those made by the Board of Directors
must be in writing and be delivered to the Company not less than ten days after
the date on which notice of the Annual Meeting is first given to the
Stockholders, or more than 60 days prior to any Annual Meeting, whichever is
later. Such nominations must include the information regarding the person
advancing the nomination as well as information about the nominee as required by
the Bylaws of the Company. Nominations not made according to these procedures
will be disregarded.
FORM 10-K
THE COMPANY SHALL PROVIDE WITHOUT CHARGE TO EACH PERSON, SOLICITED ON THE
WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S MOST RECENT ANNUAL
REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENT SCHEDULES AND ALL EXHIBITS THERETO. STOCKHOLDERS WHO DESIRE SUCH
MATERIALS SHOULD CONTACT MR. DENNIS J. JAMESON, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER BY TELEPHONE AT (214) 341-9471, OR WRITE TO TURBOCHEF,
INC., 10500 METRIC DRIVE, SUITE 128, DALLAS, TEXAS 75243, ATTN: DENNIS J.
JAMESON.
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<PAGE>
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no
other business to be brought before the Annual Meeting requiring action of the
Stockholders, nor does it have any information that other matters will be
brought before the Annual Meeting. If, however, any other business should
properly come before the Annual Meeting, the persons named in the accompanying
proxy will vote proxies as in their discretion they may deem appropriate, unless
they are directed by a proxy to do otherwise.
STOCKHOLDERS PROPOSALS FOR 1998 ANNUAL MEETING
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a Stockholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1998 Annual Meeting of Stockholders
must deliver such proposal in writing to the Company's principal executive
offices no later than January 21, 1998.
By Order Of The Board of Directors
Dennis J. Jameson
Corporate Secretary
Dallas, Texas
May 21, 1997
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<PAGE>
PROXY
-----
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
TURBOCHEF, INC.
The undersigned hereby appoints Jeffrey B. Bogatin and Philip R. McKee,
each with the full authority to act without the other, as proxies with full
power of substitution, to vote and act for and in the name of the undersigned as
fully as the undersigned could vote and act if personally present, at the annual
meeting of stockholders of TurboChef, Inc. to be held on June 17, 1997 and at
any adjournments thereof, as follows:
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL OF THE PROPOSALS. IF OTHER MATTERS PROPERLY COME BEFORE THE
MEETING, THE PROXIES WILL VOTE IN ACCORDANCE WITH THEIR JUDGMENT.
PROPOSAL 1. ELECTION FOR WITHHOLD NOMINEES: JEFFREY B. BOGATIN
OF AUTHORITY PHILIP R. MCKEE
DIRECTORS [_] [_] DONALD J. GOGEL
JOSEPH F. FOGLIANO
(INSTRUCTIONS: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.)
____________________________________
PROPOSAL 2. TO AMEND THE FOURTH ARTICLE OF FOR AGAINST ABSTAIN
THE COMPANY'S RESTATED ARTICLES [_] [_] [_]
OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.
PROPOSAL 3. TO AMEND THE COMPANY'S 1994 FOR AGAINST ABSTAIN
STOCK OPTION PLAN, AS AMENDED, [_] [_] [_]
TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE.
<PAGE>
PROPOSAL 4. TO RATIFY THE APPOINTMENT OF FOR AGAINST ABSTAIN
KPMG PEAT MARWICK LLP AS THE [_] [_] [_]
COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR FISCAL 1997.
PROPOSAL 5. IN THEIR DISCRETION, THE PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
SIGNATURE ________________ DATE ________ SIGNATURE ________________ DATE ______
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF SHARES ARE HELD
JOINTLY, SIGNATURE SHOULD INCLUDE BOTH NAMES. WHEN SIGNING AS AN
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR OTHER SIGNING IN A
REPRESENTATIVE CAPACITY, PLEASE GIVE FULL TITLE AS SUCH.
