<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
PMT SERVICES, 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):
[_] 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:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[X] 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:
-------------------------------------------------------------------------
(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>
PMT SERVICES, INC.
LOGO
NOVEMBER 15, 1996
[LOGO OF PMT SERVICES INC. APPEARS HERE]
TO OUR SHAREHOLDERS:
On behalf of the Board of Directors and management, I invite you to attend
the Annual Meeting of Shareholders of PMT Services, Inc. to be held on
December 16, 1996, at 10:00 A.M., Central Standard Time, at the Company's
corporate headquarters, Two Maryland Farms, Suite 200, Brentwood, Tennessee.
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a report
on the progress of the Company and an opportunity for questions of general
interest to the shareholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to mark, sign, date and
promptly return the enclosed proxy in the envelope provided.
Sincerely yours,
[PASTE UP SIG]
Richardson M. Roberts
Chairman of the Board
<PAGE>
PMT SERVICES, INC.
Two Maryland Farms
Brentwood, Tennessee 37027
NOTICE OF ANNUAL SHAREHOLDERS' MEETING
December 16, 1996
Notice is hereby given that the Annual Meeting of Shareholders of PMT
Services, Inc. (the "Company") will be held on December 16, 1996, at 10:00
A.M., Central Standard Time, at the Company's corporate headquarters, Two
Maryland Farms, Suite 200, Brentwood, Tennessee, for the following purposes:
1. To approve and adopt a proposed amendment to the Company's Amended and
Restated Charter increasing the amount of authorized shares of Common
Stock, $.01 par value per share (the "Common Stock"), of the Company from
40,000,000 shares to 100,000,000 shares.
2. To approve and adopt the proposed amendment to the Company's 1994
Incentive Stock Plan increasing the number of shares that may be issued
thereunder from 2,295,000 to 3,795,000.
3. To elect two Class III Directors.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on October 21, 1996, are
entitled to notice of and to vote at the Annual Shareholders' Meeting.
Dated: November 15, 1996
By order of the Board of Directors
/s/ Vickie G. Johnson
Vickie G. Johnson
Secretary
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
PMT SERVICES, INC.
Two Maryland Farms, Suite 200
Brentwood, Tennessee 37027
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of Shareholders of PMT Services, Inc. ("PMT"
or the "Company") to be held on December 16, 1996, at 10:00 A.M., Central
Standard Time, at the Company's corporate headquarters, Two Maryland Farms,
Suite 200, Brentwood, Tennessee, and at any adjournment or adjournments
thereof.
At the Annual Meeting, the shareholders will vote upon proposed amendments
to PMT's Amended and Restated Charter and PMT's 1994 Incentive Stock Plan. The
proposed amendment to the Company's Amended and Restated Charter (the "Charter
Amendment") increases the amount of authorized PMT Common Stock from
40,000,000 to 100,000,000. The proposed amendment to the Company's 1994
Incentive Stock Plan (the "Plan Amendment") increases the number of shares
reserved for issuance under the Incentive Plan from 2,295,000 to 3,795,000. If
a quorum exists, the Charter Amendment will be approved if a majority of votes
entitled to be cast are cast in favor of the Charter Amendment, and the Plan
Amendment will be approved if the votes cast in favor of the Plan Amendment
exceed the votes cast in opposition. In addition, the shareholders will vote
on the election of two Directors. Directors are elected by a plurality of the
votes cast by the shares entitled to vote at a meeting at which a quorum is
present.
Shareholders are urged to sign the enclosed form of proxy and return it
promptly in the envelope enclosed for that purpose. Proxies will be voted in
accordance with the shareholders' directions. If no directions are given,
proxies will be voted for the election of the nominees named herein as
Directors, and for the approval of the proposed Charter Amendment and Plan
Amendment. Abstentions and broker non-votes will not have the effect of voting
in opposition to a Director or of a vote against the proposed amendment to the
Plan Amendment but will have the effect of voting in opposition to the Charter
Amendment.
The Board of Directors knows of no other business to be presented at the
meeting. If any other business is properly presented, the persons named in the
enclosed proxy have authority to vote in accordance with the recommendations
of the Board of Directors. A proxy may be revoked at any time prior to the
voting thereof by written request to the Company at Two Maryland Farms, Suite
200, Brentwood, Tennessee 37027, Attention: Vickie G. Johnson, Secretary. A
proxy may also be revoked by submission to the Company of a more recently
dated proxy. The giving of a proxy will not affect the right of the
shareholders to attend the meeting and vote in person. A shareholder may
revoke a proxy and vote in person at the meeting by delivering an instrument
of revocation to the Secretary no later than 10:00 A.M., Central Standard
Time, on the date of the meeting.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company. The entire cost of soliciting these proxies
will be borne by the Company. In addition to being solicited through the
mails, proxies may be solicited personally or by courier service, telephone or
telegraph by officers, directors and employees of the Company, who will
receive no additional compensation for such activities. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries
to forward solicitation materials to the beneficial owners of shares held of
record by such persons, who will be reimbursed for their reasonable expenses
incurred in such connection. It is expected that this Proxy Statement will
first be sent to shareholders on or about November 15, 1996.
SHAREHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders' proposals intended to be presented at the 1998 Annual Meeting
of Shareholders must be received by the Company no later than August 18, 1997,
for inclusion in the Company's proxy statement and form of proxy relating to
that meeting.
<PAGE>
OUTSTANDING VOTING SECURITIES
Only shareholders of record on October 21, 1996, are entitled to notice of
and to vote at the Annual Meeting. On that date there were 33,107,507 shares of
Common Stock issued and outstanding. Each share has one vote.
2
<PAGE>
PROPOSAL 1: APPROVAL OF AMENDMENT TO THE
COMPANY'S AMENDED AND RESTATED CHARTER
The Company's Board of Directors has determined that it is advisable to
increase the authorized number of shares of the Company's Common Stock from
40,000,000 shares to 100,000,000 and has voted to recommend that the
shareholders approve and adopt the Charter Amendment to effect the proposed
increase. As of October 21, 1996, 33,107,507 shares of the Company's Common
Stock were issued and outstanding, with 6,892,493 shares of the Company's
Common Stock remaining available for issuance.
The purpose of the amendment is to provide additional shares of Common Stock
issuable from time to time by the Company for corporate purposes without
obtaining shareholder approval unless such approval is required by applicable
law or regulation. The Company may utilize additional authorized shares of
Common Stock in connection with future stock splits, in acquisition
transactions as a portion of the consideration paid in such transactions, for
option exercises, for the issuance of restricted and bonus stock awards, to
issue additional shares of Common Stock in public offerings to fund the
continued growth of the Company and for the issuance of shares as a result of
conversions of convertible securities issued in connection with acquisitions
or financing transactions.
An increase in the number of authorized shares of Common Stock could enable
the Board of Directors to take certain actions making it more difficult for a
third party to acquire control of the Company, even though shareholders of the
Company may deem such an acquisition to be desirable. To the extent that the
issuance of additional shares impedes any such attempts to acquire control of
the Company, the amendment may serve to perpetuate existing management. The
issuance of additional shares by the Company may also have a dilutive effect
on earnings per share and would have a dilutive effect on the percentage
ownership interest of the present holders of the Common Stock.
The Board of Directors does not intend to issue any Common Stock to be
authorized pursuant to the amendment except upon terms that the Board of
Directors deems to be in the best interest of the Company and its
shareholders. The Board of Directors believes that it is necessary to increase
the number of authorized shares of Common Stock for continued growth and to
provide continuing equity incentives for its employees.
REQUIRED VOTE
Approval of the proposed amendment to the Company's Amended and Restated
Charter requires the affirmative vote of the holders of a majority of the
votes entitled to be cast (in person or by proxy) at the meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS APPROVAL OF THE AMENDMENT
TO THE COMPANY'S AMENDED AND RESTATED CHARTER IN THE FORM ATTACHED AS ANNEX A
TO THIS PROXY STATEMENT.
3
<PAGE>
PROPOSAL 2: APPROVAL OF AMENDMENT TO THE COMPANY'S
1994 INCENTIVE STOCK PLAN
The Company's Board of Directors has adopted, subject to the approval of the
shareholders, an amendment to the Company's 1994 Incentive Stock Plan (the
"Incentive Plan") increasing the number of authorized shares of Common Stock
under the Incentive Plan from 2,295,000 to 3,795,000.
DESCRIPTION OF THE INCENTIVE PLAN
The current form of the Incentive Plan was approved by the shareholders at
their 1994 Annual Meeting. The Company has reserved 2,295,000 shares of Common
Stock (as adjusted for both of the Company's stock splits) for issuance
pursuant to options granted or administered under the Incentive Plan. Options
to purchase 2,137,176 shares under the Incentive Plan have been granted. Under
the Incentive Plan and pursuant to action of the Board of Directors, the
Compensation Committee appointed by the Board of Directors may grant to
officers and key employees non-transferable options to purchase shares of
Common Stock for terms not longer than ten years (five years in the case of
incentive stock options granted to an individual who, at the time of the
grant, owns more than 10% of the total combined voting power of all classes of
stock of the Company), at prices to be determined by the Board of Directors or
the committee, which may not be less than 100% of the fair market value of the
Common Stock on the date of grant (110% in the case of an individual who, at
the time of grant of incentive stock options, owns more than 10% of the total
combined voting power of all classes of stock of the Company) in the case of
incentive stock options under Section 442 of the Internal Revenue Code which
may be granted only to employees, and may not be less than 85% of the Common
Stock's fair market value on the date of grant in the case of nonstatutory
stock options. Options granted under the Incentive Plan may be exercisable in
installments. The Company is authorized to loan, or guarantee loans of, the
purchase price of shares issuable upon exercise of options granted under the
Incentive Plan. Unless terminated earlier, the Incentive Plan will terminate
in May 2004. The aggregate fair market value of stock with regard to which
incentive stock options are exercisable by an individual for the first time
during any calendar year may not exceed $100,000. The Incentive Plan is
administered by the Compensation Committee.
DESCRIPTION OF PROPOSED AMENDMENT
The Plan Amendment increases the number of shares reserved for issuance
under the Incentive Plan from 2,295,000 to 3,795,000.
The Incentive Plan is an essential part of the Company's compensation and
reward program for its employees, because awards under the Incentive Plan
permit employees to benefit from the Company's continued growth and financial
performance. As a result of the Company's growth, the Company has hired
additional employees and has awarded options to many such individuals. Of the
2,295,000 shares of Common Stock reserved for issuance under the Incentive
Plan, 2,137,176 have been used in connection with the granting of options.
Accordingly, the Board of Directors believes that it is in the best interest
of the Company to adopt the Plan Amendment to continue to provide employees
with equity in the Company as a reward for their efforts to accomplish the
Company's long-term and short-term goals.
4
<PAGE>
The table below provides information for fiscal year 1996 regarding the
dollar value and the number of shares underlying awards granted under the
Incentive Plan as if the amendment to the Incentive Plan as described above
had been in effect in fiscal year 1996:
NEW PLAN BENEFITS
AMENDED 1994 INCENTIVE STOCK PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE OF NUMBER OF SHARES
SHARES UNDERLYING UNDERLYING STOCK
NAME AND POSITION STOCK OPTIONS(1) OPTIONS(2)
- ----------------- ----------------- ----------------
<S> <C> <C>
Richardson M. Roberts....................... $ 309,990 62,000
Chairman of the Board and
Chief Executive Officer
Gregory S. Daily ........................... $ 309,990 62,000
President and Treasurer
Clay M. Whitson ............................ $ 975,000 120,000
Chief Financial Officer
Joseph T. Stewart, Jr. ..................... $1,175,250 150,000
Chief Operating Officer
Vickie G. Johnson .......................... $ 87,720 12,000
Chief Accounting Officer,
Secretary and Controller
Executive Officer Group..................... $2,857,950 406,000
Non-Employee Director Group................. -- --
Non-Executive Officer Employee Group........ $1,236,038 136,500
</TABLE>
- --------
(1) Based upon the closing sale price of the Company's Common Stock of $18.125
per share as reported on the Nasdaq Stock Market on October 16, 1996, less
$10.58 per share, the weighted average of the exercise prices of the
options granted.
(2) Reflects the Company's two-for-one stock split effected in January 1996
and the Company's three-for-two stock split effected in June 1996.
FEDERAL INCOME TAX CONSEQUENCES
A recipient of incentive stock options under the Incentive Plan will not
recognize income or gain upon the grant or exercise of the incentive stock
options, but will recognize income or gain upon a sale of shares of Common
Stock acquired upon exercise of the incentive stock options. The recipient
will recognize as ordinary income the amount by which the sale price per share
of Common Stock acquired upon exercise of incentive stock options exceeds the
exercise price per share if a sale of such shares occurs within two years
after the date of grant or one year after the date of exercise of the
incentive stock options. This amount would be treated as a long-term capital
gain if (i) the shares of Common Stock were held for two years after grant of
the incentive stock options and one year after exercise of the incentive
stockoptions, and (ii) the recipient was employed by the Company at all times
from the grant of the incentive stock options through a date three months
prior to the date of exercise of the incentive stock options. The difference,
at the time of exercise of an incentive stock option, between the option
exercise price and fair market value of the underlying shares is a tax
preference item subject to provisions of the Code concerning the alternative
minimum tax. The grant or exercise of incentive stock options does not create
a federal income tax deduction for the Company except to the extent a
recipient of incentive stock options recognizes ordinary income.
With respect to the grant or exercise of non-qualified stock options under
the Incentive Plan, the Company may deduct for federal income tax purposes the
amount of income taxable to a recipient of non-qualified stock options. The
Code provides that the difference between the exercise price of non-qualified
stock options and the
5
<PAGE>
fair market value of the underlying shares is taxable either at the date of
grant of the options or at the date of exercise, but not at both. A non-
qualified stock option is taxable at the date of grant if it has a readily
ascertainable fair market value on the date of grant. A non-qualified stock
option is taxable at the date of exercise if it does not have a readily
ascertainable fair market value at the date of grant. Generally, in order for
an option to be treated as having a readily ascertainable fair market value,
identical options must be traded on an established exchange. The difference
between the exercise price per share and the fair market value per share on
the date of exercise of a non-qualified stock option will be recognized as
ordinary income in the event that a non-qualified stock option which was not
taxed upon the date of grant is exercised. The difference between the amount
realized upon the sale of shares of Common Stock acquired upon exercise of a
non-qualified stock option and the sum of the amount of the exercise price
plus the amount of income recognized upon grant or exercise of the
nonqualified stock option is taxable upon a sale of such shares.
REQUIRED VOTE
Approval of the proposed amendment to the Company's 1994 Incentive Stock
Plan requires the affirmative vote of the holders of a majority of the votes
cast (in person or by proxy) at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS APPROVAL OF THE AMENDMENT
TO THE COMPANY'S 1994 INCENTIVE STOCK PLAN IN THE FORM ATTACHED AS ANNEX B TO
THIS PROXY STATEMENT.
6
<PAGE>
PROPOSAL 3: ELECTION OF DIRECTORS
The Company's Amended and Restated Charter provides that the Board of
Directors shall consist of not less than three nor more than nine members. The
Directors have determined that the Board of Directors shall consist of six
members. The Company's Amended and Restated Charter provides that the Board of
Directors shall be divided into three classes of as nearly equal size as
possible. The Board of Directors has authorized two positions in each of Class
I, II and III.
The term of the Class III Directors expires at the 1997 Annual Meeting. The
Board of Directors has nominated the two individuals named below as "Class III
Nominees" for election as Directors to serve until the 2000 Annual Meeting or
until their earlier retirement from the Board of Directors. If any nominee or
nominees should be unable to accept nomination or election as a Director,
which is not expected, the proxies may be voted with discretionary authority
for a substitute or substitutes designated by the Board of Directors.
REQUIRED VOTE
Directors are elected by a plurality of the votes cast by the shares
entitled to vote at a meeting at which a quorum is present. The Amended and
Restated Charter of the Company does not permit shareholders to cumulate their
votes in the election of Directors. As a result, each shareholder may cast one
vote per share for each nominee.
CLASS III NOMINEES
The following table shows the names, ages and principal occupations of the
nominees to become Class III Directors and the year in which each nominee was
first elected to the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME AGE OCCUPATION SINCE
---- --- ---------- --------
<C> <C> <S> <C>
Richardson M. Roberts 38 Chairman of the Board and Chief Executive
Officer 1984
Leslie D. Coble 38 Vice President of Equitable Securities
Corporation 1987
</TABLE>
Mr. Roberts has served as Chief Executive Officer of the Company, Chairman
of the Board and as a Director since co-founding the Company in August 1984.
Mr. Roberts also served as President of the Company from August 1994 to
December 1995. Mr. Roberts was previously employed with Comdata Network, Inc.
as a national sales representative.
Mr. Coble has served as a Director of the Company since November 1987. Mr.
Coble has been a Vice President of Equitable Securities Corporation since
1990.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THE ELECTION OF THE CLASS
III NOMINEES.
7
<PAGE>
CONTINUING DIRECTORS
The persons named below will continue to serve as Directors until the annual
meeting of shareholders in the year indicated and until their successors are
elected and take office. Shareholders are not voting on the election of the
Class I and Class II Directors. The following table shows the names, ages and
principal occupations of each continuing Director and the year in which each
was first elected to the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME AGE OCCUPATION SINCE
---- --- ---------- --------
<C> <C> <S> <C>
Gregory S. Daily(1) 37 President and Treasurer of PMT 1984
Charles R. Burtzloff(1) 44 President and Chief Executive Officer
of Cardservice International, Inc. 1995
Robert C. Fisher, Jr.(2) 37 Chief Operating Officer of Corporate
Supply Network, Inc. 1992
Harold L. Siebert(2) 51 Retired 1994
</TABLE>
- --------
(1) Class II Director (term expires at the 1999 Annual Meeting of Shareholders)
(2) Class I Director (term expires at the 1998 Annual Meeting of Shareholders)
Mr. Daily has served as Treasurer and as a Director of the Company since co-
founding the Company in August 1984. Mr. Daily also served as Vice President,
Chief Operating Officer and Secretary of the Company from August 1984 to
December 1995, and currently serves as President of the Company. Mr. Daily was
previously employed with Comdata Network, Inc. as a telemarketing
representative.
Mr. Burtzloff has served as a Director of the Company since 1995. Mr.
Burtzloff is President and Chief Executive Officer of Cardservice
International, Inc., an independent service organization, which he founded in
1988. Cardservice International, Inc. is headquartered in Agoura Hills,
California.
Mr. Fisher has served as a Director of the Company since September 1992.
Currently, Mr. Fisher is Chief Operating Officer of Corporate Supply Network,
Inc., a wholesaler of office supply products. Mr. Fisher was Vice President of
Massey Burch Capital Corp. from January 1994 to July 1995, and served as a Vice
President of Massey Burch Investment Group, Inc., a predecessor of Massey Burch
Capital Corp., from January 1989 to January 1994. Mr. Fisher serves on the
Board of Directors of Communications Central, Inc., an owner and operator of
pay telephones.
Mr. Siebert has served as a Director of the Company since January 1994.
Currently, Mr. Siebert is retired. Mr. Siebert was Bureau Chief of TennCare, a
specialized Medicare waiver program administered by the State of Tennessee from
1995 to 1996, served as a consultant to several national health care
information companies from 1993 to 1995 and Chief Executive Officer of Inforum,
Inc., a Nashville-based health care information company, from 1987 to 1993.
During the last fiscal year, the Board of Directors held 12 meetings. No
Director attended less than 75% of the meetings held during fiscal year 1995.
Directors not otherwise employed by the Company received a $250 per month
retainer and a fee of $1,500 for each regularly scheduled Board and committee
meeting (except for Messrs. Burtzloff and Siebert, who elected to receive the
$1,500 meeting fee in shares of restricted Common Stock valued at $10.938, the
closing price of the Common Stock on the date preceding the annual meeting (as
adjusted for both of the Company's stock splits). In addition, such Directors
are eligible to participate in the Non-Employee Director Stock Option Plan (the
"Director Plan").
The Board of Directors has two committees--a Compensation Committee and an
Audit Committee.
Members of the Compensation Committee during fiscal year 1996 were Leslie D.
Coble and Harold L. Siebert. The Compensation Committee was appointed by the
Board of Directors to administer the Company's stock plans and recommend to the
Board of Directors compensation of the Company's executive officers. During
fiscal year 1996, the Compensation Committee held three meetings, and each
member attended each meeting.
8
<PAGE>
Members of the Audit Committee from August 1, 1995 through December 14, 1995
were E. Townes Duncan and Robert C. Fisher, Jr. Members of the Audit Committee
for the balance of fiscal year 1996 were Charles R. Burtzloff and Robert C.
Fisher, Jr. The Audit Committee was appointed by the Board of Directors to
recommend the annual appointment of the Company's auditors, with whom the
Audit Committee reviews the scope of audit and non-audit assignments and
related fees, accounting principles used by the Company in financial
reporting, internal auditing procedures and the adequacy of the Company's
internal control principles. During fiscal year 1996, the Audit Committee held
two meetings. Mr. Fisher attended both meetings, Mr. Duncan attended the one
meeting held during which he was a member and Mr. Burtzloff did not attend the
one meeting held during which he was a member.
Members of the Compensation Committee and the Audit Committee are typically
selected once each year. It is currently expected that the Board of Directors
will appoint members to these committees, at the meeting of the Board of
Directors that will follow the 1997 Annual Meeting.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares held beneficially,
directly or indirectly, as of October 21, 1996, by (i) all holders of more
than 5% of the Company's Common Stock, (ii) all Directors and nominees for
Director who beneficially own Common Stock, (iii) the Company's Chief
Executive Officer and the four other most highly compensated executive
officers of the Company whose total annual salary and bonus exceeded $100,000
for the year ended July 31, 1996 (these five executive officers being
hereinafter referred to as the "Named Executive Officers"), and (iv) all
Directors and executive officers as a group, together with the percentage of
the outstanding shares which such ownership represents.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
------------------- -------------------------- -------------------
<S> <C> <C>
Richardson M. Roberts(3)... 1,935,817 5.8%
Two Maryland Farms, Suite
200
Brentwood, Tennessee 37027
Gregory S. Daily(4)........ 1,487,877 4.5
Clay M. Whitson............ 900 *
Joseph T. Stewart, Jr.(5).. 41,400 *
Vickie G. Johnson(6)....... 70,200 *
Charles R. Burtzloff....... 405 *
Leslie D. Coble(7)......... 21,039 *
Robert C. Fisher, Jr.(8)... 23,625 *
Harold L. Siebert(9)....... 94,770 *
All Executive Officers and
Directors
as a group (nine
persons)(10).............. 3,676,033 10.9
</TABLE>
- --------
* Indicates less than 1% ownership.
(1) These shares are deemed to be outstanding for the purposes of computing
the percentage ownership of that individual but are not deemed outstanding
for the purposes of computing the percentage of any other person. Unless
otherwise noted in the following footnotes, the persons as to whom
information is given had sole voting and investment power over the shares
of Common Stock shown as beneficially owned.
(2) Computation based upon 33,107,507 shares outstanding on October 21, 1996.
(3) Includes 144,763 shares to be issued upon exercise of options held by Mr.
Roberts.
(4) Includes 144,763 shares to be issued upon exercise of options held by Mr.
Daily and 90,000 shares held by Mr. Daily's wife. Mr. Daily disclaims
beneficial ownership of the shares held by his wife.
(5) Includes 37,500 shares to be issued upon exercise of options held by Mr.
Stewart.
(6) Includes 70,200 shares to be issued upon exercise of options held by Ms.
Johnson.
(7) Includes 19,500 shares to be issued upon exercise of options held by Mr.
Coble.
(8) Includes 19,500 shares to be issued upon exercise of options held by Mr.
Fisher.
(9) Includes 19,500 shares to be issued upon exercise of options held by Mr.
Siebert.
(10) Includes 455,726 shares to be issued upon exercise of options held by all
executive officers and directors as a group and 90,000 shares held by Mr.
Daily's wife. Mr. Daily disclaims beneficial ownership of the shares held
by his wife.
10
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, Directors and persons who own more than 10% of a registered class of
the Company's securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "SEC").
Based solely on a review of copies of reports filed with the SEC, the
Company believes that all persons subject to the reporting requirements
pursuant to Section 16(a) filed the required reports on a timely basis with
the SEC, except that one report for a single transaction was filed late by
each of Messrs. Roberts, Daily, Coble and Fisher, and two reports, each for
single transactions, were filed late by each of Messrs. Burtzloff and Siebert.
These transactions were subsequently reported.
CERTAIN TRANSACTIONS
See "Senior Management Incentive Agreements" for a discussion of certain
stock awards and related transactions between the Company and each of Messrs.
Roberts and Daily.
One of the Company's Directors, Leslie D. Coble, is a Vice President of
Equitable Securities Corporation, a representative of the underwriters in the
Company's recent public offering in April 1996.
11
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or accrued by or on
behalf of the Company's Named Executive Officers (in addition to Edward J.
Burke, the Company's former Chief Financial Officer) for services rendered in
all capacities to the Company for the fiscal years ended July 31, 1994, 1995
and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- ----------------------------------------
SECURITIES
OTHER RESTRICTIVE UNDERLYING
NAME AND ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) (#)(1) COMPENSATIONS ($)
------------------ ---- --------- -------- -------------- ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richardson M. Roberts
Chairman of the Board 1996 $165,000 $ 0 -- -- 62,000 --
and Chief Executive 1995 165,000 79,514 -- -- 340,908 --
Officer 1994 127,488 135,854 -- -- -- --
Gregory S. Daily 1996 $165,000 $ 0 -- -- 62,000 --
President and 1995 165,000 79,514 -- -- 340,908 --
Treasurer 1994 127,488 135,854 -- -- -- --
Clay M. Whitson(2)
Vice President of 1996 $ 81,250 $ 0 -- -- 120,000 --
Finance and Chief 1995 -- -- -- -- -- --
Financial Officer 1994 -- -- -- -- -- --
Joseph T. Stewart, Jr.(2) 1996 $ 77,500 $ 0 -- -- 150,000 --
Chief Operating Officer 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
Vickie G. Johnson
Chief Accounting 1996 $ 75,300 $ 14,000 -- -- 12,000 --
Officer, Secretary and 1995 64,500 17,500 -- -- 30,000 --
Controller 1994 48,000 32,800 -- -- -- --
Edward J. Burke(3) 1996 $144,375 $ 0 -- -- -- --
1995 165,000 79,514 -- -- 340,908 --
1994 127,488 135,854 -- -- -- --
</TABLE>
- --------
(1) As adjusted for the Company's two-for-one stock split effective in January
1996 and three-for-two stock split effective in June 1996.
(2) Joined the Company in fiscal year 1996.
(3) Mr. Burke died on June 17, 1996.
None of the Named Executive Officers exercised stock options during fiscal
year 1996, except for Ms. Johnson who exercised options to purchase 3,000
shares of Common Stock (as adjusted for both of the Company's stock splits).
The Company has no long-term incentive plans, as that term is defined in
Securities and Exchange Commission regulations. The Company has no employment
contracts with any of its executive officers.
12
<PAGE>
The following table sets forth information concerning the stock options
granted to the Named Executive Officers in 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES
SECURITIES PERCENT OF OF STOCK PRICE
UNDERLYING TOTAL OPTIONS EXERCISE MARKET APPRECIATION
OPTIONS GRANTED TO OR BASE PRICE ON FOR OPTION TERM(5)
GRANTED EMPLOYEES IN PRICE THE DATE OF EXPIRATION ---------------------------
NAME (1) (#)(2)(3) FISCAL YEAR ($/SH)(2) GRANT (4) DATE 5%($) 10%($) 0%($)
-------- ---------- ------------- --------- ----------- ---------- -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richardson M. Roberts... 42,000(6) 7.96% $ 8.78 $10.29 12-12-05 $231,800 $ 588,400 $63,400
20,000(6) 3.79 22.25 -- 07-16-06 588,000 1,489,700 --
Gregory S. Daily........ 42,000(6) 7.96 8.78 10.29 12-12-05 231,800 588,400 63,400
20,000(6) 3.79 22.25 -- 07-16-06 588,000 1,489,700 --
Clay M. Whitson......... 120,000(7) 22.75 10.00 -- 12-28-05 264,600 669,100 --
Joseph T. Stewart, Jr... 150,000(8) 28.44 10.29 -- 12-12-05 272,200 689,600 --
Vickie G. Johnson....... 6,000(6) 1.14 5.96 -- 08-15-05 157,500 399,400 --
6,000(8) 1.14 15.67 -- 03-29-06 413,700 1,050,400 --
</TABLE>
- --------
(1) Edward J. Burke died on June 17, 1996 and was not granted any options in
the last fiscal year.
(2) As adjusted for the Company's two-for-one stock split effective in January
1996 and three-for-two stock split effective in June 1996.
(3) Options listed in the table were granted under the Company's 1994
Incentive Stock Plan.
(4) Represents the closing sales price of the Common Stock as reported on the
Nasdaq Stock Market on the date of grant.
(5) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term and based
upon assumed rates of appreciation in the market price of the Common Stock
of 5% and 10% compounded annually from the date of grant to the expiration
date. Actual gains, if any, upon the exercise of stock options will depend
on the future performance of the Common Stock and the date on which the
options are exercised.
(6) Options become exercisable in five equal annual installments beginning on
the first anniversary of the date of the grant.
(7) Options become exercisable in three equal annual installments beginning on
the first anniversary date of the grant.
(8) Options become exercisable in four equal annual installments beginning on
the first anniversary date of the grant.
13
<PAGE>
The following table sets forth information with respect to unexercised
options held as of the end of the fiscal year by the Named Executive Officers.
No Named Executive Officer exercised any options for the purchase of shares of
Common Stock during fiscal 1996, except for Ms. Johnson who exercised options
to purchase 3,000 shares of Common Stock (as adjusted for both of the
Company's stock splits).
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUES OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR-END(#) AT FISCAL YEAR-END($)(2)
ACQUIRED ON ------------------------- -------------------------
NAME(1) EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------- ----------- ------------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Richardson M. Roberts... -- -- 68,181/334,727 $1,710,000/$7,746,700
Gregory S. Daily........ -- -- 68,181/334,727 $1,710,000/$7,746,700
Clay M. Whitson......... -- -- 0/120,000 $0/$2,130,000
Joseph T. Stewart, Jr... -- -- 0/150,000 $0/$2,619,000
Vickie G. Johnson....... 3,000 27,770 63,000/ 36,000 $ 1,675,900/$ 805,100
</TABLE>
- --------
(1) Edward J. Burke died on June 17, 1996 and did not exercise any options in
the last fiscal year.
(2) Based upon the closing sale price of the Company's Common Stock of $27.75
per share as reported on the Nasdaq Stock Market on July 31, 1996, less
the exercise price for the options.
SENIOR MANAGEMENT INCENTIVE AGREEMENTS
In October 1990, the Company authorized a Common Stock award (the "Award")
to each of its senior management personnel as an inducement to remain in the
service of the Company and as an incentive for increased efforts during such
service. The Award was granted under separate agreements (collectively, the
"Incentive Agreements") between the Company and each of Richardson M. Roberts
and Gregory S. Daily (individually, a "Holder" and collectively, the
"Holders"). Messrs. Roberts and Daily were each awarded 153,394 shares of
Common Stock, all of which shares vested upon the completion of the Company's
initial public offering. Each of the Holders has been granted the right with
respect to all shares subject to the Awards to participate in any registration
of the Common Stock on the same priority as other security holders having
contractual registration rights.
The Incentive Agreements required the Company, upon vesting of the Common
Stock, to loan each of the Holders (collectively, the "Loans") an amount equal
to any income and employment tax liability incurred as a result of the
vesting. The tax liability resulting to Messrs. Roberts and Daily from the
vesting of shares upon the Company's initial public offering was paid by these
individuals from the proceeds of their sale of shares in the Company's initial
public offering, and, consequently, no further loans will be made by the
Company pursuant to the Incentive Agreements.
The Incentive Agreements also provide that upon the death of a Holder, the
Company will purchase from such Holder's estate the number of shares awarded
to such Holder up to a maximum fair market value of $500,000. To the extent
that the fair market value of the awarded shares exceeds $500,000, the
Holder's estate will be entitled to retain the balance of such shares. The
Company maintains "key man" life insurance on each of the lives of the Holders
to fund its purchase obligations under the Incentive Agreements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no relationships among the Company's executive officers and any
entity affiliated with any of the members of the Compensation Committee that
require disclosure under applicable rules promulgated by the Securities and
Exchange Commission.
14
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee of the Company (the
"Compensation Committee") at the direction of the Board of Directors pursuant
to rules established by the Securities and Exchange Commission. This report
provides certain data and information regarding the compensation and benefits
provided to the Company's Chief Executive Officer as well as to Messrs. Daily,
Stewart and Whitson and Ms. Johnson.
The Compensation Committee is responsible for establishing and administering
the Company's executive compensation policies and programs within the
guidelines of the Company's compensation philosophy. Recommendations are made
by the Compensation Committee with respect to the compensation of Messrs.
Roberts and Daily to the Board of Directors, which makes the final decisions
as to their compensation. Employees serving on the Board of Directors do not
participate in the determination of their compensation. In addition, Messrs.
Roberts and Daily determine the total annual compensation for each of Messrs.
Stewart and Whitson and Ms. Johnson.
During fiscal year 1996, the Compensation Committee consisted of Leslie D.
Coble and Harold L. Siebert, each of whom is an outside Director.
COMPENSATION POLICY
Prior to the Company's initial public offering in August 1994, the Committee
engaged the independent consulting firm of the Hay Group to conduct a thorough
review of the Company's compensation practices to assist the Compensation
Committee in developing a comprehensive executive compensation plan which
would address the immediate and long-term goals of the Company as a publicly-
traded company. The Compensation Committee requested that the consulting firm
recommend a comprehensive compensation plan designed to ensure that:
. base salaries are competitive with amounts paid to executive officers of
companies comparable in size and performance to the Company;
. annual and long-term incentive design should encourage sound business
decisions that support both short and long-term strategies of the
Company;
. incentive awards for executive officers should be tied to after-tax
profits and reflect the rewards realized by shareholders and correspond
with their consistency in performance; and
. significant ownership opportunities will be provided to executive
officers so that they will continue to be motivated towards shareholder
return and increased shareholder value.
Relevant industry and other data were compared to the current and planned
compensation of the Company's executive officers and Directors. In general,
the compensation of certain individual officers was assessed against that paid
by companies in the credit card processing business that are competitors of
the Company and other regional service providers with annual revenues and
capitalization within a reasonable range of the Company's. The consulting firm
suggested, and the Compensation Committee accepted, various revisions
discussed herein to the compensation program of the Company and methods of
improving the stock ownership levels of the Company's executive officers.
COMPENSATION PAID IN FISCAL 1996
Consistent with the previous recommendations of the consulting firm, the
Compensation Committee determined to maintain the base salary for each of
Messrs. Roberts and Daily for fiscal year 1996 at $165,000 per year. In
addition to this base salary, the Company has granted to each of Messrs.
Roberts and Daily stock options under the Company's 1994 Incentive Stock Plan,
including options to purchase 42,000 shares of Common Stock at $8.78 per share
and options to purchase 20,000 shares of Common Stock at $22.25
15
<PAGE>
per share. These options will vest 20% per year over five years commencing on
the first anniversary of the award date. In addition, the Compensation
Committee has adopted an executive compensation policy pursuant to which, each
of Messrs. Roberts and Daily was granted the opportunity to earn up to
$115,500 in annual cash bonuses based on the Company's earnings per share
performance and to earn additional performance cash awards ranging from
$75,000 to $300,000 payable at the end of the current fiscal year based on
achievement of earnings per share goals over a two-year period beginning with
fiscal year 1996, such goals having been set by the Compensation Committee
based upon the Company's internal projections and market expectations of the
Company's earnings per share. Messrs. Roberts and Daily set the base salaries
for each of Messrs. Stewart and Whitson and Ms. Johnson for fiscal year 1996
based on comparisons with salaries paid to officers of other companies in the
credit card processing business with comparable duties and responsibilities.
In addition to their base salary, the Company has granted to each of Messrs.
Stewart and Whitson and Ms. Johnson options under the Company's 1994 Incentive
Stock Plan to purchase shares of Common Stock. The Company does not provide
its executive officers with incidental perquisites such as club memberships,
company vehicles, financial planning or other similar items.
COMPENSATION PAID IN FISCAL YEAR 1996 TO THE CHIEF EXECUTIVE OFFICER
As President, Mr. Roberts' 1996 base salary was determined by the
Compensation Committee consistent with the consulting firm's previous
recommendations. Mr. Roberts received the same base salary he received last
year.
The Compensation Committee intends to structure future compensation so that
executive compensation paid by the Company is fully deductible in accordance
with Section 162(m) of the Internal Revenue Code, enacted in 1993, which
generally disallows a tax deduction to public companies for compensation over
$1 million paid to certain executive officers unless certain conditions are
met.
Compensation Committee:
Leslie D. Coble
Harold L. Siebert
16
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
The following is a comparative performance graph which compares the
percentage change of cumulative total shareholder return on the Company's
Common Stock with (a) the performance of a broad equity market indicator and
(b) the performance of a published industry index or peer group. The following
graph compares the percentage change of cumulative total shareholder return on
the Company's Common Stock with (a) the CRSP Index for Nasdaq Stock Market (US
Companies) (the "Market Index") and (b) CRSP Index for NYSE/AMEX/Nasdaq
Computer Programming, Data Processing and Other Computer Related Services
Stocks (the "Peer Index"). The graph begins on August 12, 1994, the date on
which the Company's Common Stock first began trading on the Nasdaq Stock
Market, and assumes the investment on such date of $100 in the Company's Common
Stock, the Market Index and the Peer Index and assumes that all dividends, if
any, were reinvested at the time they were paid.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE REPORT FOR
PMT SERVICES, INC.
PMT MARKET PEER
Date Index INDEX INDEX
- -------- --------- -------- --------
08/12/94 $ 100.000 $100.000 $100.000
09/30/94 123.881 104.463 105.726
12/30/94 102.985 103.272 115.192
03/31/95 164.179 112.583 125.635
06/30/95 188.060 128.775 146.611
09/29/95 288.060 144.286 158.037
12/29/95 361.194 146.049 166.519
03/29/96 573.134 152.870 174.577
06/28/96 1025.372 165.334 192.244
07/31/96 994.029 150.585 178.656
17
<PAGE>
COMPENSATION OF DIRECTORS
Directors not otherwise employed by the Company receive a retainer of $250
per month and a fee of $1,500 plus expenses for each scheduled regularly
scheduled meeting. The $1,500 meeting fee is payable at the election of each
Director either in cash or in shares of restricted Common Stock valued at the
closing price of the Common Stock on the date preceding the annual meeting. In
addition, non-employee Directors are entitled to receive options pursuant to
the 1994 Non-Employee Director Stock Option Plan (the "Director Plan"). The
Director Plan provides for the granting of non-qualified stock options to each
Director of the Company who is not also an employee of the Company (a "Non-
Employee Director"). The material features of the Director Plan are described
below.
The Director Plan authorizes the issuance of up to 300,000 shares of Common
Stock (as adjusted for both of the Company's stock splits) pursuant to options
having an exercise price equal to the fair market value of the Common Stock on
the date the options are granted (the "Grant Date"). The Director Plan
contains provisions providing for adjustment of the number of shares available
for options and subject to unexercised options in the event of stock splits,
dividends payable in Common Stock, business combinations or certain other
events. The Board of Directors or a committee thereof administers the Director
Plan subject to certain limitations.
The Director Plan provides for the grant on the date of each annual meeting
of the Company's shareholders, beginning in fiscal year 1995, of options to
purchase 6,000 shares (as adjusted for both of the Company's stock splits) to
each Non-Employee Director serving the Company on the Grant Date. The price at
which each share of Common Stock covered by an option may be purchased upon
exercise of such option is the fair market value of the share on the Grant
Date of such option.
The Board of Directors may revoke, on or prior to each Grant Date, the next
automatic grant of options otherwise provided for by the Director Plan if no
options have been granted to employees since the preceding automatic grant of
options under the 1994 Incentive Stock Plan or any other employee stock option
plan that the Company might adopt hereafter. Each option granted under the
Director Plan shall expire ten years after the Grant Date (the "Option
Period"), unless cancelled sooner as a result of termination of service or
death, or unless such option is fully exercised prior to the end of the Option
Period.
18
<PAGE>
PROPOSAL 4: OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the meeting other than that
referred to herein. If any other business should come before the meeting, the
persons named in the enclosed Proxy will have discretionary authority to vote
all proxies in accordance with the recommendation of the Board of Directors.
INFORMATION CONCERNING INDEPENDENT AUDITORS
The Board of Directors has authorized the Audit Committee to select the
Company's auditors for the fiscal year ending July 31, 1997. As of the date
hereof, the Audit Committee has not selected the Company's independent
auditors for the fiscal year ending July 31, 1997, because the Audit Committee
is reviewing proposals for services from Price Waterhouse LLP and other
accounting firms.
Price Waterhouse LLP served as the Company's independent auditors for the
fiscal year ending July 31, 1996 and has performed this function for the
Company since June 1, 1992. Representatives of Price Waterhouse LLP will be
present at the meeting and will have the opportunity to make a statement, if
they desire to do so, and will be available to respond to appropriate
questions at that time.
UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF COMMON
STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING, THE COMPANY, WITHOUT CHARGE,
WILL PROVIDE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JULY 31, 1996, TOGETHER WITH THE FINANCIAL STATEMENT SCHEDULES, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE DIRECTED TO
CLAY M. WHITSON, CHIEF FINANCIAL OFFICER, PMT SERVICES, INC., TWO MARYLAND
FARMS, SUITE 200, BRENTWOOD, TENNESSEE 37027.
BY ORDER OF THE BOARD OF DIRECTORS
[Sig Cut]
Brentwood, Tennessee Vickie G. Johnson
November 15, 1996 Secretary
19
<PAGE>
ANNEX A
ARTICLES OF AMENDMENT
TO THE AMENDED AND RESTATED CHARTER
OF
PMT SERVICES, INC.
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-20-106 of the Tennessee Code
Annotated, the undersigned corporation submits this Amendment to its Amended
and Restated Charter for the purpose of increasing the number of authorized
shares of common stock:
ARTICLE ONE
The name of the corporation is PMT Services, Inc.
ARTICLE TWO
The following resolution amending the Restated Charter of PMT Services, Inc.
(the "Company"), was duly adopted by the Board of Directors of the Company at
a meeting duly held on September 25, 1996:
RESOLVED, that, subject to the approval of the shareholders of the Company,
the Company hereby proposes and declares it advisable to increase the number
of shares of Common Stock which the Company shall have the authority to issue
by deleting from Section 6 the words and figures "fifty million (50,000,000)"
and "Forty million (40,000,000)", respectively, and substituting therein the
words and figures "one hundred ten million (110,000,000)", and "One hundred
million (100,000,000)", respectively.
ARTICLE THREE
The above amendment to the Amended and Restated Charter of the Company was
duly adopted and approved by the shareholders of the Company on December 16,
1996.
PMT SERVICES, INC.
By: _________________________________
Title: ______________________________
Dated: December 16, 1996
<PAGE>
ANNEX B
PMT SERVICES, INC.
1994 INCENTIVE
STOCK PLAN
AMENDMENT NO. 1
WHEREAS, the Board of Directors of PMT Services, Inc. (the "Company")
adopted the 1994 Incentive Stock Plan (the "Plan"), effective May 13, 1994;
and
WHEREAS, the Company reserved the right to amend the Plan in Section 10
thereof; and
WHEREAS, the Company desires to amend the Plan to increase the options
granted pursuant to the Plan;
NOW THEREFORE, Section 2 of the Plan is hereby amended, subject to
shareholder approval, by deleting therefrom the figure "765,000" (such figure
representing the number of shares reserved under the Plan prior to both of the
Company's stock splits effective in January 1996 and June 1996, respectively)
and substituting therein the figure "3,795,000."
Other than as set forth above, the Plan is hereby ratified, confirmed and
approved in its entirety.
CERTIFICATE OF SECRETARY
I, Vickie G. Johnson, Secretary of PMT Services, Inc., do hereby certify that
the foregoing Amendment No. 1 to the 1994 Incentive Stock Plan was adopted by
the Board of Directors of PMT Services, Inc. on the 28th day of October, 1996.
/s/ Vickie G. Johnson
-------------------------------------
Vickie G. Johnson,
Secretary
<PAGE>
PROXY
PMT SERVICES, INC.
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 16, 1996
The undersigned hereby appoints Richardson M. Roberts or Gregory S.
Daily, or either of them, with power of substitution, as Proxies to vote all
stock of PMT Services, Inc. owned by the undersigned at the Annual Meeting of
Shareholders to be held at the Company's corporate headquarters, Two Maryland
Farms, Suite 200, Brentwood, Tennessee, at 10:00 A.M. on December 16, 1996, and
any adjournment thereof, on the following items of business and such other
business as may properly come before the meeting.
1. Proposal to amend the Company's Amended and Restated Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Proposal to amend the 1994 Incentive Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. [ ] FOR THE ELECTION AS CLASS III DIRECTORS OF ALL NOMINEES
LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY BELOW)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
Richardson M. Roberts and Leslie D. Coble
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE HIS
NAME IN THE SPACE PROVIDED BELOW.
------------------------------------------------------------------------
4. In their discretion, upon such other matters as may properly
come before the meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
PMT SERVICES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES AND FOR ALL PROPOSALS.
Please sign exactly as your name appears on your stock certificates. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: ----------, 1996 ---------------------------------
Signature of Shareholder
---------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
