<PAGE>
================================================================================
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>
TURBOCHEF, INC.
10500 METRIC DRIVE, SUITE 128
DALLAS, TEXAS 75243
__________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 30, 1998
_________________________
To our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
TurboChef, Inc., a Delaware corporation (the "Company"), will be held at the
offices of Henry, Meier & Jones, L.L.P., 1700 Pacific Avenue, Suite 2700,
Dallas, Texas 75201 on Tuesday, June 30, 1998 at 10:00 a.m., local time, for the
purpose of considering and acting upon:
(1) a proposal to elect four (4) directors of the Company 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 First Article of the Company's Restated
Articles of Incorporation to change the Company's corporate name
to "TurboChef Technologies, Inc.";
(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 3,150,000 shares to 3,650,000 shares;
(4) a proposal to ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the 1998 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, 1998 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
June 5, 1998
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>
TURBOCHEF, INC.
10500 METRIC DRIVE, SUITE 128
DALLAS, TEXAS 75243
________________________
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 30, 1998, 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 June 5,
1998.
GENERAL
Stockholders Entitled to Vote. May 15, 1998, 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 14,571,608 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, 1998,
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 change the Company's corporate
name to "TurboChef Technologies, Inc.", (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 public
accountants for the 1998 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
<PAGE>
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 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 or her 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
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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, 1997, will be first mailed on or about June 5, 1998
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.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 17, 1998,
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
c/o TurboChef, Inc.
745 Fifth Avenue
New York, New York 10151............ 5,869,464 /(2)/ 38.18%
Philip R. McKee
c/o TurboChef, Inc.
10500 Metric Drive, Ste. 128
Dallas, Texas 75243................. 2,004,510 /(3)/ 13.76%
Stonehill Capital Management, Inc.
277 Park Avenue
New York, New York 10172............ 739,405 /(4)/ 5.07%
Robert L. Emerson
277 Park Avenue
New York, New York 10172............ 739,405 /(4)/ 5.07%
Donald J. Gogel
375 Park Avenue, 18th Floor
New York, New York 10152............ 456,501 /(5)/ 3.12%
Dennis J. Jameson
c/o TurboChef, Inc.
10500 Metric Drive, Ste. 128
Dallas, Texas 75243................. 87,500 /(6)/ .60%
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
- ------------------------------------ --------------- -----
<S> <C> <C>
Mr. Joseph F. Fogliano
530 Pine Street
P.O. Box 772655
Steamboat Springs, Colorado 80477... 5,960 .04%
Marion H. Antonini
79 Ferris Hill Road
New Canaan, Connecticut 06840....... -0- -0-
All directors and executive
officers as a group (7 persons)..... 8,495,567 /(8)/ 54.62%
</TABLE>
(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 14,571,608 shares of Common Stock outstanding, before any
consideration is given to outstanding options or warrants.
(2) Includes 3,166 shares of Common Stock which are subject to options issued by
Mr. Bogatin in connection with the August Stock Option Agreements (as
hereinafter defined) 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) Includes 1,482 shares of Common Stock which are subject to options issued by
Mr. McKee in connection with the August Stock Option Agreements.
(4) 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 739,405
of these shares. Of such shares, 739,405 (5.07%) 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.
(5) Includes 246 shares of Common Stock which are subject to options issued by
Mr. Gogel in connection with the August Stock Option Agreements and 73,333
shares issuable upon exercise of immediately exercisable Options granted
under the Option Plan.
-4-
<PAGE>
(6) Includes 80,000 shares issuable upon the exercise of immediately exercisable
Options granted under the Option Plan.
(7) Includes an aggregate of 4,894 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 982,000 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 Section 16(a) forms they file. The Company's
executive officers, directors and ten percent stockholders became 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, 1997, 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 the exercise of certain options to acquire shares of Common Stock by
Robert S. Briggs, Jr. was inadvertently filed late, and (ii) one report with
respect to the transfer 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 five (5) Directors. On April
15, 1998, the Board of Directors increased the size of the Company's Board from
four (4) to five (5) members and appointed Marion H. Antonini to the Board.
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.
-5-
<PAGE>
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, other than Mr.
Joseph F. Fogliano, who has served as a director since 1996 and will not be
standing for re-election. 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 1997 the Company paid Mr. Fogliano 1,960 shares of Common Stock in
lieu of payment of cash directors' fees. In connection with retaining Jeffrey
B. Bogatin to serve as Chairman of the Board and Donald J. Gogel to serve as a
member of the Board of Directors, in fiscal year 1997 the Company granted (i)
Mr. Bogatin options to acquire 165,000 shares of Common Stock, and (ii) Mr.
Gogel options to acquire 20,000 shares of Common Stock. Mr. Bogatin's options
were not granted under the Company's 1994 Stock Option Plan while Mr. Gogel's
options were granted pursuant to such plan.
During the last fiscal year, there has been one (1) meeting of the Board of
Directors of the Company and fourteen (14) 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, except Mr.
Fogliano who did not attend the only Board meeting.
Committees of the Board. The Board of Directors has no standing audit,
-----------------------
nominating or compensation committees or committees performing similar
functions.
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.
MARION H. ANTONINI, age 67, has been Chairman of the Board and acting
Chief Executive Officer of the Company since April 15, 1998. From 1990 to 1997,
Mr. Antonini was Chairman of the Board, President and Chief Executive Officer of
Welbilt Corp., a commercial appliance manufacturer. Mr. Antonini is a director
of Engelhard Corporation, Northwestern Steel & Wire, Scientific Atlanta and
Vulcan Materials Co.
-6-
<PAGE>
JEFFREY B. BOGATIN, age 49, a co-founder of the Company, has been a
director of the Company since its inception in 1991 and served as Chairman of
the Board until April 1998. He was also Treasurer of the Company until June
1996. Since 1975, Mr. Bogatin has served as President of Whitemarsh Industries,
Inc., which was engaged in manufacturing and importing ladies apparel and is now
involved with making venture capital investments.
DONALD J. GOGEL, age 49, 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 APS, Inc. and Jafra Cosmetics International.
PHILIP R. MCKEE, age 41, a co-founder of the Company, has been a director
of the Company since its inception in 1991 and Vice Chairman and Chief
Technology Officer since April 1998. He also served as President and Chief
Executive Officer of the Company until April 1998 and was 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
EACH DIRECTOR NOMINEE NAMED ABOVE.
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, 1997, 1996 and 1995:
<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, 1997 $121,870/(2)/ $ -0- $ -0- $-0- 108,000
President and Chief 1996 $ 95,000 -0- -0- -0- 250,000
Executive Officer/(1)/ 1995 $ 73,077/(3)/ -0- -0- -0- -0-
Dennis J. Jameson, 1997 $150,000 $24,327 $ -0- $-0- 20,000
Executive Vice President, 1996 $135,000 $ 7,500 -0- -0- 120,000
Chief Financial Officer, 1995 $ 1,635 -0- -0- -0- -0-
Secretary and Treasurer
Steven R. Leipsner 1997 $141,846 $10,000 $10,000 -0- -0-
Vice President and
Chief Operating Officer/(4)/
</TABLE>
-7-
<PAGE>
/(1)/ In April 1998, Mr. McKee assumed the positions of Vice Chairman and Chief
Technology Officer and Marion H. Antonini assumed the positions of
Chairman of the Board and acting Chief Executive Officer.
/(2)/ Includes $26,870 paid to Mr. McKee in 1998 for salary earned in 1993, 1994
and 1995.
/(3)/ 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.
/(4)/ Mr. Leipsner separated from the Company effective on October 10, 1997.
OPTION GRANTS FOR FISCAL 1997
The following table sets forth as to each of the named executive officers
information with respect to option grants during fiscal 1997 and the potential
realizable value of such option grants.
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM /(3)/
------------------------------- ------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE PER EXPIRATION
NAME GRANTED EMPLOYEES SHARE DATE 5% 10%
- ------------------------------- ------- ---------- ------- ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Philip R. McKee 108,000/(1)/ 38.85% $10.125 8/5/04 $445,000 $1,037,000
Dennis J. Jameson 20,000/(2/ 7.19% $10.125 8/5/04 $ 82,000 $ 192,000
</TABLE>
/(1)/ These options were not granted under the Company's 1994 Stock Option Plan.
/(2)/ These are options granted under the Company's 1994 Stock Option Plan, as
amended, to acquire shares of Common Stock.
/(3)/ The potential realizable value of the options, if any, granted in 1997 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.
-8-
<PAGE>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
VALUE REALIZED NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
SHARES (MARKET PRICE OPTIONS THE-MONEY OPTIONS AT
ACQUIRED ON AT EXERCISE LESS AT FISCAL YEAR-END FISCAL YEAR-END /(1)/
NAME EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------ ----------- ---------------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Philip R. McKee -0- -0- -0- 358,000 $-0- $-0-
Dennis J. Jameson -0- -0- 40,000 100,000 $-0- $-0-
</TABLE>
/(1)/ Value of unexercised options equals fair market value of the shares
underlying in-the-money options at December 31, 1997 ($7.25), less the
exercise price, times the number of in-the-money options outstanding.
EXECUTIVE EMPLOYMENT AGREEMENTS
In May 1993, the Company entered into a three-year employment agreement
with Philip R. McKee, providing for his employment as President and Chief
Executive Officer 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. 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. In April 1998, Marion H. Antonini was employed as the
Company's acting Chief Executive Officer and Chairman of the Board. The Company
intends to propose the terms of a new employment agreement to Mr. McKee whereby
he will serve as Vice Chairman of the Board and as the Company's Chief
Technology Officer.
In March 1998, the Company entered into a two-year employment agreement
with Marion H. Antonini, providing for his employment as Chairman of the Board
and acting Chief Executive Officer of the Company effective in April 1998.
Pursuant to such employment agreement, Mr. Antonini will be entitled to receive
an annual base salary of $300,000 and shall be granted options to acquire
200,000 shares of Common Stock at a price of $7.375 per share which will vest as
follows: (i) options to acquire 66,667 shares will vest at such time as the
Company executes an employment agreement with a new Chief Executive Officer, the
recruitment of whom shall be one of Mr. Antonini's principal short-term
responsibilities, (ii) options to acquire 66,667 will vest on March 5, 1999, and
(iii) options to acquire 66,666 shares of Common Stock will vest on March 5,
2000.
-9-
<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 Circuit Design Corporation, the manufacturer of
certain electronic circuit boards used by the Company, 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 17, 1998, options to
purchase an aggregate of only 4,894 shares of Common Stock remained outstanding
pursuant to the August Stock Option Agreements and Messrs. Bogatin, McKee and
Gogel had outstanding obligations to sell 3,166 shares, 1,482 shares and 246
shares, respectively.
TOTAL RETURNS TO STOCKHOLDERS
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, 1997, 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.
[STOCK PERFORMANCE GRAPH APPEARS HERE]
April '94 1994 1995 1996 1997
- ------------------------------------------------------------------------------
TurboChef, Inc. 100.00 66.47 547.62 842.86 276.19
- ------------------------------------------------------------------------------
Peer Group Index 100.00 153.06 216.80 327.73 361.89
- ------------------------------------------------------------------------------
Nasdaq Market Index 100.00 102.34 132.74 164.95 201.77
- ------------------------------------------------------------------------------
-10-
<PAGE>
<TABLE>
<CAPTION>
BASE PERIOD RETURN RETURN RETURN RETURN
COMPANY/INDEX NAME APRIL '94 1994 1995 1996 1997
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<S> <C> <C> <C> <C> <C>
TurboChef, Inc. 100.00 66.47 547.62 842.86 276.19
Peer Group Index* 100.00 153.06 216.80 327.73 361.89
Nasdaq Market Index 100.00 102.34 132.74 164.95 201.77
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* 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., Middleby Corp., Minuteman International,
Inc., Recovery Engineering, Inc., Tennant Co., TurboChef, Inc. and United
States Filter Corp.
PROPOSAL 2
PROPOSAL TO CHANGE THE COMPANY'S CORPORATE NAME
The Board of Directors unanimously proposes that the First Article of the
Company's Restated Articles of Incorporation be amended to change the Company's
corporate name to "TurboChef Technologies, Inc."
If the corporate name change is approved, the text of the First Article of
the Company's Restated Articles of Incorporation would read in the entirety as
follows:
"The name of the Corporation is: TurboChef Technologies, Inc."
The Board of Directors believes that the Company's corporate name should
reflect the fact that the Company is one of the world's leading foodservice
technology companies. The proposed name change does not signal any change in
the Company's strategic business focus. Rather, by inserting "Technologies"
into the corporate name, the Company's name will reinforce the Company's
strategy of introducing new technologies for use in kitchens throughout the
world. Moreover, the Board of Directors believes that the proposed name will
more accurately promote one of the Company's core competencies - the ability to
effectively develop and commercialize new technologies.
Under Delaware law, the Stockholders will not have any dissenters' or
appraisal rights in connection with the proposed amendment of the Restated
Articles of Incorporation. If the proposed name change becomes effective, it
will not affect the rights of the Stockholders of the Company or the validity
and transferability of certificates representing the Company's Common Stock.
If the proposed amendment is approved by the Stockholders, it will become
effective after filing a certificate of amendment required by the General
Corporation Law of the State of Delaware.
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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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 500,000 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, as amended by the Stockholders in 1997, 3,150,000 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 May 22, 1998, only 350,334 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, February
1997 and June 1997, pursuant to which stock options covering an aggregate of
3,150,000 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 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.
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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 May 22, 1998, Options to purchase 2,366,893 shares of Common Stock
were outstanding, and Options to purchase an additional 350,334 shares were
available for future grant. In addition to the foregoing, Options to purchase an
aggregate of 432,773 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 1997 to the three
most highly compensated executive officers are set forth on the Summary
Compensation Table on pages 8 and 9. Awards were made to the following groups
during fiscal year 1997 under the Option Plan:
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NO. OF OPTIONS
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All current executive officers, as a group 25,000
All current directors who are not executive officers, as a group 20,000
All employees who are not executive officers, as a group 156,667
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ADOPTION
OF THIS AMENDMENT OF THE 1994 STOCK OPTION PLAN.
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PROPOSAL 4
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP, which audited
the Company's 1997 financial statements, as the Company's independent public
accountants for the year ending December 31, 1998. 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, 1998 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 (10) days
after the date on which notice of the Annual Meeting is first given to the
Stockholders, or more than sixty (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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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.
STOCKHOLDER PROPOSALS FOR 1999 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 Annual Meeting of Stockholders to be
held in 1999 must deliver such proposal in writing to the Company's principal
executive offices no later than March 2, 1999.
By Order Of The Board of Directors
Dennis J. Jameson
Corporate Secretary
Dallas, Texas
June 5, 1998
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PROXY
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
TURBOCHEF, INC.
The undersigned hereby appoints, Marion H. Antonini, Jeffrey B. Bogatin and
Philip R. McKee, each with the full authority to act without any 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 30, 1998 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: MARION H. ANTONINI
OF AUTHORITY JEFFREY B. BOGATIN
DIRECTORS [ ] [ ] DONALD J. GOGEL
PHILIP R. MCKEE
(INSTRUCTIONS: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.)
____________________________________
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PROPOSAL 2. TO AMEND THE FIRST ARTICLE OF THE COMPANY'S FOR AGAINST ABSTAIN
RESTATED ARTICLES OF INCORPORATION TO CHANGE THE [ ] [ ] [ ]
CORPORATE NAME TO "TURBOCHEF TECHNOLOGIES,
INC."
PROPOSAL 3. TO AMEND THE COMPANY'S 1994 STOCK OPTION FOR AGAINST ABSTAIN
PLAN, AS AMENDED, TO INCREASE THE NUMBER OF [ ] [ ] [ ]
SHARES OF COMMON STOCK AUTHORIZED FOR
ISSUANCE.
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PROPOSAL 4. TO RATIFY THE APPOINTMENT OF KPMG PEAT FOR AGAINST ABSTAIN
MARWICK LLP AS THE COMPANY'S INDEPENDENT [ ] [ ] [ ]
PUBLIC ACCOUNTANTS FOR FISCAL 1998.
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.
</TABLE>
SIGNATURE DATE
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SIGNATURE DATE
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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.
