SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 ss.240.14a-11(c) or ss.240.14a-12
Global Payment Technologies, Inc.
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(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)(1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (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:
[ ] 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.:
3) Filing Party:
4) Date Filed:
<PAGE>
20 East Sunrise Highway, Suite 201
Valley Stream, New York 11581
January 28, 1999
Dear Fellow Stockholders:
You are cordially invited to attend our 1999 Annual Meeting of
Stockholders which will be held on Tuesday, March 23, 1999 at 10:00 a.m., at the
Garden City Hotel, 45 7th Street, Garden City, New York 11530.
The Notice of Annual Meeting and Proxy Statement which follows
describes the business to be conducted at the meeting.
Whether or not you plan to attend the meeting in person, it is
important that your shares be represented and voted. After reading the enclosed
Notice of Annual Meeting and Proxy Statement, I urge you to complete, sign, date
and return your proxy card in the envelope provided. If the address on the
accompanying material is incorrect, please advise our Transfer Agent, American
Stock Transfer & Trust Company, in writing, at 40 Wall Street, New York, New
York 10005.
Your vote is very important, and we would appreciate a prompt return of
your signed proxy card. We hope to see you at the meeting.
Cordially,
/s/ STEPHEN KATZ
--------------------------------------
STEPHEN KATZ
Chairman and Chief Executive Officer
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<PAGE>
GLOBAL PAYMENT TECHNOLOGIES, INC.
20 East Sunrise Highway, Suite 201
Valley Stream, New York 11581
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 23, 1999
-----------------
To the Stockholders of GLOBAL PAYMENT TECHNOLOGIES, INC.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
GLOBAL PAYMENT TECHNOLOGIES, INC. (the "Company") will be held at the Garden
City Hotel, 45 7th Street, Garden City, New York 11530, on March 23, 1999 at
10:00 a.m., Eastern Standard Time, for the following purposes:
1. To elect one (1) Class I director to serve until the
Annual Meeting of Shareholders to be held in the year
2002 and until his successor is elected and
qualified; and
2. To transact such other business as may properly be
brought before the Annual Meeting or any adjournments
or postponements thereof.
Only stockholders of record at the close of business on February 11,
1999 are entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ THOMAS MCNEILL
----------------------------------------
THOMAS MCNEILL
Secretary
Valley Stream, New York
January 28, 1999
- --------------------------------------------------------------------------------
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE AND SIGN THE PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
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<PAGE>
GLOBAL PAYMENT TECHNOLOGIES, INC.
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PROXY STATEMENT
---------------------
This Proxy Statement is furnished to the stockholders of Global Payment
Technologies, Inc. (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the 1999 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
Garden City Hotel, 45 7th Street, Garden City, New York 11530, on Tuesday, March
23, 1999 at 10:00 a.m., Eastern Standard Time, and at any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting.
The Company intends to mail this proxy statement and the accompanying
proxy to stockholders on or about February 16, 1999.
The cost of solicitation of proxies will be borne by the Company. The
Company may also reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses incurred in forwarding solicitation materials to
the beneficial owners of shares held of record by such persons. It is
contemplated that proxies will be solicited principally through the mail, but
directors, officers and regular employees of the Company may, without additional
compensation, solicit proxies personally or by telephone, facsimile or special
letter.
Proxies in the accompanying form, duly executed, returned to the
Company and not revoked, will be voted at the Annual Meeting. Any proxy given
pursuant to such solicitation may be revoked by the stockholder at any time
prior to the voting of the proxy by a subsequently dated proxy, by written
notification to the Secretary of the Company or by personally withdrawing the
proxy at the meeting and voting in person.
The address and telephone number of the principal executive offices of
the Company are:
20 East Sunrise Highway, Suite 201
Valley Stream, New York 11581
Telephone No.: (516) 256-1000
OUTSTANDING STOCK AND VOTING RIGHTS
Only stockholders of record at the close of business on February 11,
1999 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. As of January 21, 1999, there were issued and outstanding 5,365,700
shares of the Company's common stock, par value $.01 per share ("Common Stock"),
the only class of voting securities of the Company. Each share of
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<PAGE>
Common Stock entitles the holder thereof to one vote on each matter submitted to
a vote at the Annual Meeting.
QUORUM AND VOTING PROCEDURES
Quorum: The attendance, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum. Proxies submitted which
contain abstentions or broker non-votes will be deemed present at the Annual
Meeting in determining the presence of a quorum.
Vote Required: Directors are elected by a plurality of votes of the
shares of Common Stock represented in person or by proxy at the Annual Meeting.
Votes will be counted and certified by one or more Inspectors of Election who
are expected to be either employees of the Company, counsel to the Company or
employees of American Stock Transfer & Trust Company, the Company's transfer
agent.
Effect of Abstentions and Broker Non-Votes: Proxies submitted which
contain abstentions or "broker non-votes" (i.e., proxies from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other persons entitled to vote shares as to a matter with
respect to which the broker or nominee does not have discretionary power to
vote) will be treated as present for purposes of determining the presence of a
quorum. Abstentions and broker non-votes will not have the effect of votes in
favor of or in opposition to the election of a director.
The enclosed proxy will be voted in accordance with the instructions
thereon. Unless otherwise stated, all shares represented by such proxy will be
voted as instructed. Proxies may be revoked as noted above.
PROPOSAL 1
ELECTION OF CLASS I DIRECTOR
The Company's Board of Directors consists of five directors divided
into three classes. The terms of office of Class I, Class II and Class III
directors expire at the 1999, 2000 and 2001 Annual Meeting of Shareholders,
respectively. At each annual meeting, directors are chosen to succeed those in
the class whose term expires at that annual meeting to serve for a term of three
years each and until their respective successors are elected and qualified. Each
of the present directors of the Company was elected by the Company's
shareholders. At the Annual Meeting, one Class I director will be elected.
Shares represented by valid proxies in the accompanying form will be
voted for the election of the nominee named below, unless authority is withheld.
Should the nominee listed below be unable to serve, it is intended that the
proxies will be voted for such other nominee as
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<PAGE>
may be designated by the Board of Directors. Unless otherwise directed, the
persons named in the proxy accompanying this Proxy Statement intend to cast all
proxies received for the election of Richard E. Gerzof to serve as a director
upon his nomination at the Annual Meeting. Mr. Gerzof has indicated to the Board
that he expects to be available to serve as a director of the Company.
Recommendation
THE BOARD OF DIRECTORS BELIEVES THAT THE ELECTION OF THE NOMINATED
CLASS I DIRECTOR IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS
AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS ELECT THE NOMINATED CLASS I
DIRECTOR.
Nominee For Director
The following table sets forth certain information concerning the
nominee for director of the Company:
Name Positions with the Company Age
- ---- -------------------------- ---
Richard E. Gerzof......... Director and Member of the Compensation and 54
Audit Committees
Information About Nominee
Richard E. Gerzof has been a director of the Company since its
inception in 1988. Mr. Gerzof has been a partner of Sun Harbor Manor, a nursing
home, since 1974. He has also been a licensed real estate broker since 1982 and
was a partner or principal in Sonom Realty Co., a property management and
construction firm, from 1974 through 1992. He was also a partner in TFTS
Restaurant, Inc., a restaurant, from 1985 to 1992 and has been a partner in
Frank's Steaks, a restaurant, since 1993.
Current Members of the Board of Directors
The current directors of the Company, their respective Classes and
terms of office and biographical information is as set forth below.
Director Age Class Term
- -------- --- ----- Expires at
----------
Richard E. Gerzof 54 I 1999 Annual Meeting
Martin H. Kern 57 II 2000 Annual Meeting
Stephen Katz 55 II 2000 Annual Meeting
Edward Seidenberg 41 III 2001 Annual Meeting
Henry B. Ellis 49 III 2001 Annual Meeting
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<PAGE>
Biographical Information
Stephen Katz has been Chairman of the Board of Directors since
September 1996 and Chief Executive Officer and a director of the Company since
May 1996. Mr. Katz served as Vice Chairman of the Board of Directors from May
1996 until September 1996. From September 1984 until September 1995 Mr. Katz was
Chairman of the Board and Chief Executive Officer, and from September 1984 until
September 1993 was President, of Nationwide Cellular Service, Inc., a reseller
of cellular telephone services. Since 1992 Mr. Katz has been Chairman of the
Board and Chief Executive Officer of Cellular Technical Services Company, Inc.,
a publicly held company engaged in developing software for the cellular
telephone industry.
Edward Seidenberg has been President of the Company since March 1998,
Chief Operating Officer and Vice President of the Company since March 1997, and
a director of the Company since August 1996. From August 1996 to March 1997 he
served as Vice President of the Company and from January 1997 to March 1997 he
served as Secretary of the Company. From March 1990 to July 1996 he was Vice
President and Chief Financial Officer of Nationwide Cellular Service, Inc., a
reseller of cellular telephone services.
Henry B. Ellis has been a director of the Company since July 1996.
Since 1992 Mr. Ellis has been President and Chief Executive Officer of Bassett
California Company, a family-owned real estate holding company located in El
Paso, Texas. From June 1992 to February 1994 Mr. Ellis served as Chairman of the
Board and Chief Executive Officer of Grayson County State Bank, located in
Sherman, Texas. Since 1992 Mr. Ellis has served as a member of the Board of
Directors of Bluebonnet Savings Bank, a savings and loan institution located in
Dallas, Texas.
Martin H. Kern has been a director of the Company since November 1997.
Since 1988 Mr. Kern has been President of Diversified Resources Inc., a
management consulting firm specializing in turnarounds and the marketing of
consumer products. Prior thereto and for more than five years he was Executive
Vice President of The Great Atlantic & Pacific Tea Co., Inc. ("A&P"), and also
served as Chairman of the Board/President of Super Market Service Corp. and
President of Supermarket Distributing Corp., both A&P operating subsidiaries.
Committees
During the fiscal year ended September 30, 1998 the Company's Board of
Directors held three meetings and took action by unanimous written consent on
five occasions. The Board of Directors has a Compensation Committee and an Audit
Committee, each of which is comprised of Messrs. Ellis, Gerzof and Kern. Mr.
Kern has been a member of the Company's Compensation Committee and Audit
Committee since March 1998. The Compensation Committee reviews and recommends to
the Board of Directors the compensation and benefits of all officers of the
Company, reviews general policy matters relating to the compensation and
benefits of employees of the Company and administers the issuance of stock
options to the Company's officers,
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<PAGE>
employees, directors and consultants. The Compensation Committee held three
meetings during fiscal 1998. The Audit Committee meets with management and the
Company's independent auditors to determine the adequacy of internal controls
and other financial reporting matters. The Audit Committee held two meetings
during fiscal 1998. Each director attended at least 75% of all meetings of the
Board of Directors held while he was a director and all meetings held by a
committee of the Board on which he served, except for Mr. Wood who did not
attend one of the Board of Directors meetings.
Information about Non-Director Executive Officers
The following table sets forth certain information with respect to the
non-director executive officers of the Company. Officers are elected annually by
the Board of Directors and serve at the discretion of the Board.
Name Age Position
- ---- --- --------
Robert W. Nader.... 39 Vice President, Market/Product Development
Thomas McNeill..... 36 Vice President, Chief Financial Officer and Secretary
Wesley Trager...... 46 Vice President, Engineering
Dimitrios Rigas ... 52 Vice President of Operations
Robert W. Nader has been Vice President, Market/Product Development of
the Company since January 1995. From September 1991 through December 1994 he was
Engineering Manager for United Gaming, Inc., a manufacturer and route operator
of electronic gaming machines. From July 1991 through September 1991 he was a
design specialist in the Air Defense Systems Division of General Dynamics, Inc.
Thomas McNeill has been Secretary of the Company since March 1997 and
Vice President and Chief Financial Officer of the Company since September 1997.
From October 1996 to September 1997 he served as Controller of the Company. From
March 1995 through October 1996 Mr. McNeill was Director of Finance for Bellco
Drug Corp., a pharmaceutical distribution company. From January 1991 through
August 1992 he was Controller and from August 1992 to May 1994 he was Vice
President of Operations, for the Marx & Newman Co. division of the United States
Shoe Corporation, a manufacturer and distributor of women's footwear.
Wesley Trager has been Vice President, Engineering of the Company since
April 1998. From June 1994 to April 1997 Mr. Trager served as Vice President of
Advanced Technologies and Engineering for Acclaim Entertainment, Inc. an
interactive entertainment company located in Glen Cove, New York. From August
1992 to June 1994 Mr. Trager served as Director of Technology of the Company.
Dimitrios Rigas has been Vice President of Operations of the Company
since May 1998. From April 1996 to May 1998 Mr. Rigas served as Plant Manager of
Versa Products, a valve
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<PAGE>
manufacturing company located in Paramus New Jersey. From October 1995 to April
1996 Mr. Rigas served as Business Process Re-Engineering Manager of Veeco
Instruments, a manufacturing company located in Plainview, New York. From
December 1994 to September 1995 Mr. Rigas served as Vice President of Operations
of Dayton T. Brown Inc., a sheet metal manufacturer located in Bohemia, New
York. From September 1989 to December 1994 Mr. Rigas served as Vice President of
Operations for Satellite Transmission Systems Inc., a satellite ground equipment
manufacturer located in Hauppauge, New York.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than ten percent of the Company's Common Stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock of the Company. To the Company's knowledge, based
solely on a review of such reports furnished to the Company with respect to its
most recent fiscal year, the Company believes that during the fiscal year ended
September 30, 1998 all reports applicable to executive officers, directors and
10% stockholders have been timely filed, except that both Wesley Trager and
Dimitrios Rigas did not timely file a report reflecting their respective
appointments as officers of the Company, Edward Seidenberg, Robert W. Nader and
Thomas McNeill did not timely file a report reflecting their receipt of an
option to purchase shares of the Company's Common Stock and Stephen Katz did not
timely file one report reflecting sale of shares of the Company's Common Stock
by Odyssey Financial Company.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 21, 1998, certain
information as to the Common Stock ownership of each of the Company's directors
and nominees for director, each of the officers included in the Summary
Compensation Table below, all executive officers and directors as a group and
all persons known by the Company to be the beneficial owners of more than five
percent of the Company's Common Stock. Unless otherwise noted, the Company
believes that each person named in the table below has sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by such person.
Amount and Nature Percentage of
of Beneficial Outstanding Shares
Name and Address Ownership Owned
---------------- --------- --------
Stephen Katz................................. 846,300(1) 14.7%
c/o Global Payment Technologies, Inc.
20 East Sunrise Highway, Suite 201
Valley Stream, NY 11581
Odyssey Financial Company.................... 355,000 6.6%
c/o Stephen Katz
20 East Sunrise Highway, Suite 201
Valley Stream, NY 11581
Richard E. Gerzof............................ 353,333(2) 6.6%
161 Sportsman Avenue
Freeport, NY 11520
William H. Wood.............................. 325,786(3) 6.1%
c/o Global Payment Technologies, Inc.
621 Farr Shores Drive
Hot Springs, AR 71913
Michael Walsh................................ 180,100(4) 3.4%
c/o Global Payment Technologies, Inc.
425-B Oser Avenue
Hauppauge, NY 11788
Edward Seidenberg............................ 101,875(5) 1.9%
c/o Global Payment Technologies, Inc.
20 East Sunrise Highway, Suite 201
Valley Stream, NY 11581
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<PAGE>
Amount and Nature Percentage of
of Beneficial Outstanding Shares
Name and Address Ownership Owned
---------------- --------- --------
Robert W. Nader................................ 37,075(6) *
c/o Global Payment Technologies, Inc.
20 East Sunrise Highway, Suite 201
Valley Stream, NY 11581
Henry B. Ellis................................. 23,333(7) *
303 Texas Avenue #15
El Paso, Texas 79901
Thomas McNeill................................. 14,625(7) *
c/o Global Payment Technologies, Inc.
425-B Oser Avenue
Hauppauge, NY 11788
Martin H. Kern................................. 12,500 *
c/o Global Payment Technologies, Inc.
20 East Sunrise Highway, Suite 201
Valley Stream, NY 11581
All directors and executive officers as a group 1,714,827(8) 29.4%
(10 persons)...................................
- --------------
* Less than 1%
(1) Includes 400,000 shares issuable upon exercise of currently exercisable
stock options and 355,000 shares owned of record by Odyssey Financial
Company, a partnership of which Mr. Katz is Managing General Partner.
(2) Includes 3,333 shares issuable upon exercise of currently exercisable
options.
(3) Includes 10,000 shares issuable upon exercise of currently exercisable
options.
(4) Includes 4,200 shares issuable upon exercise of currently exercisable
options.
(5) Includes 21,875 shares issuable upon exercise of currently exercisable
options.
(6) Includes 35,075 shares issuable upon exercise of currently exercisable
options.
(7) Includes 3,333 shares issuable upon exercise of currently exercisable
options.
(8) Includes 476,949 shares issuable upon exercise of currently exercisable
options.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation earned for the last
three fiscal years by the Company's Chief Executive Officer and the four other
most highly compensated executive officers, whose salary and bonus exceeded
$100,000 for the 1998 fiscal year (the "Named Executive Officers"), for services
in all capacities to the Company during its 1998, 1997 and 1996 fiscal years.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Name and Principal Underlying
Position Year Salary Bonus Options
----------------- ---- ------ ----- --------------
<S> <C> <C> <C> <C>
Stephen Katz
Chairman of the Board 1998 $150,000 $70,000 ---
and Chief Executive 1997 150,000 25,000 ---
Officer 1996 78,000(1) --- 400,000
Edward Seidenberg.................... 1998 170,000 70,000 20,000
President, Chief 1997 141,000 45,000 7,500
Operating Officer 1996 20,000(2) --- 50,000
Robert W. Nader...................... 1998 205,000 --- 10,000
Vice President, 1997 161,000 --- 7,500
Market/Product 1996 112,000 --- 8,000
Development
Thomas McNeill....................... 1998 94,000 15,000 6,500
Secretary, Vice 1997 74,000 12,500 17,500
President and Chief 1996 --- --- ---
Financial Officer
Michael Walsh........................ 1998 125,000 --- ---
Vice President, Chief 1997 125,000 10,000 4,000
Scientist 1996 125,000 --- 8,000
</TABLE>
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(1) Represents compensation paid to Mr. Katz from May 1996, when he became
employed by the Company.
(2) Represents compensation paid to Mr. Seidenberg from August 1996, when
he became employed by the Company.
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<PAGE>
Option Grants in Last Fiscal Year
(Individual Grants)
<TABLE>
<CAPTION>
Potential Realizable Value
% of Total at Assumed Annual Rates
Number of Securities Options Granted Exercise of Stock Price Appreciation
Underlying Options to Employees in Price Expiration for Option Term
Name Granted Fiscal Year ($/Share) Date At 5% At 10%
---- ------- ----------- --------- ----- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Edward Seidenberg..... 20,000(1) 12.9% $6.5625 9/13/05 $53,432 $124,519
Robert W. Nader....... 10,000(1) 6.4% $6.5625 9/13/05 $26,716 $62,260
Thomas McNeill........ 6,500(1) 4.2% $6.5625 9/13/05 $17,365 $40,469
</TABLE>
(1) The option was awarded at the fair market value of the Company's Common
Stock at September 14, 1998, the date of the award, and becomes
exercisable in cumulative annual installments of 25% per year on each
of the first four anniversaries of the grant date.
Aggregated Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options at In-the-Money Options
on Exercise Value September 30, 1998 September 30, 1998(1)
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Katz............. 0 0 400,000 0 $1,516,000 $ 0
Edward Seidenberg........ 0 0 21,875 55,625 61,300 99,500
Michael Walsh............ 0 0 4,200 7,800 10,108 15,162
Robert W. Nader.......... 0 0 29,075 26,425 44,668 27,577
Thomas McNeill........... 0 0 3,625 20,375 5,820 25,734
</TABLE>
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(1) The closing price of the Company's Common Stock as reported on the
Nasdaq National Market on September 30, 1998 was $6.94 per share. Value
is calculated by multiplying (a) the difference between the closing
price and the option exercise price by (b) the number of shares of
Common Stock underlying the option.
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<PAGE>
Compensation of Directors
No director received compensation during the 1998 fiscal year for
services rendered as a director, except Messrs. Ellis and Kern who each received
$9,750 during the 1998 fiscal year for services rendered as a director.
Employment Agreements
Effective September 30, 1997 the Company entered into an agreement with
Stephen Katz providing for his employment as Chief Executive Officer and
Chairman of the Board of Directors for a two-year term, with an automatic
extension for an additional one-year term beyond the initial two-year term
unless and until either the Company or Mr. Katz provides advance written notice
of a desire to terminate the agreement. The agreement provides for a salary at a
rate of $150,000 per year and bonuses and stock options as determined by the
Board of Directors. To the extent Mr. Katz' outstanding stock options to
purchase an aggregate of 400,000 shares of Common Stock previously granted under
the Company's 1994 and 1996 Stock Option Plans were not exercisable, such
options became fully exercisable upon execution of the agreement. The agreement
also provides for participation in employee benefit plans, the use of an
automobile and other fringe benefits.
Effective October 1, 1998 the Company entered in an agreement with
Edward Seidenberg providing for his employment as President and Chief Operating
Officer for a three-year term, with automatic extensions for additional one-year
terms beyond the initial three-year term unless and until either the Company or
Mr. Seidenberg provides advance written notice of a desire to terminate the
agreement. The agreement provides for a salary at a rate of $192,500 per year
and bonuses and stock options as determined by the Board of Directors. The
agreement also provides for participation in employee benefit plans, the use of
an automobile and other fringe benefits.
Effective January 1, 1998 the Company entered into an agreement with
Robert W. Nader providing for his employment as Vice President Product/Market
Development for a three-year term, with automatic extensions for additional
one-year terms beyond the initial three-year term unless and until either the
Company or Mr. Nader provides advance written notice of a desire to terminate
the agreement. The agreement provides for a salary at a rate of $100,000 per
year and an additional non-refundable draw against commissions of $40,000 in the
first year of the agreement, $50,000 in the second year of the agreement and
$60,000 in the third year of the agreement. The agreement also provides for
participation in employee benefit plans, the use of an automobile and other
fringe benefits.
Certain Relationships and Related Transactions
The Company leases approximately 6,600 square feet in Valley Stream,
New York, from a company in which Stephen Katz, Chairman of the Board of
Directors and Chief Executive Officer of the Company, is a part owner. The
lease, which expires February 28, 2002, provides for an
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annual base rental of $150,000, increasing annually to approximately $170,000 in
the final year of the term. The facility houses the executive, accounting and
certain sales functions of the Company. The Company believes that the terms of
the lease are fair and reasonable and as favorable to it as could be obtained
from unaffiliated third parties.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee of the Company's Board of
Directors are Henry B. Ellis, Richard E. Gerzof and Martin H. Kern, each of whom
is a non-employee director. No member of the Compensation Committee has a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, and the
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the performance graph on page 15 shall not be incorporated by reference to any
such filings.
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<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors is composed of
non-employee directors and is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
executive compensation policies. In addition, the Compensation Committee
determines the compensation to be paid to the Chief Executive Officer and each
of the other executive officers of the Company.
The objectives of the Company's executive compensation program are to:
* Support the achievement of desired Company performance
* Provide compensation that will attract and retain superior
talent and reward performance
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the manufacturing industry
on Long Island, as well as with a broader group of companies of comparable size
and complexity.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of
base salary, annual cash incentive compensation, long-term incentive
compensation in the form of stock options, specific performance-based bonuses
and various benefits, including medical and 401(k) plans generally available to
employees of the Company.
Base Salary
Base salary levels for the Company's executive officers are
competitively set relative to companies in the manufacturing industry on Long
Island, as well as with a broader group of companies of comparable size and
complexity. In determining salaries, the Compensation Committee also takes into
account individual experience and performance and specific issues particular to
the Company.
Stock Option Program
The stock option program is the Company's long-term incentive plan for
providing an incentive to key employees (including directors and officers who
are key employees) and to directors who are not employees of the Company.
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<PAGE>
The 1994 and 1996 Stock Option Plans authorize the Compensation
Committee to award key executives stock options. Options granted under the plan
may be granted containing terms determined by the Committee, including exercise
period and price; provided, however, that the plan requires that exercise price
may not be less than the fair market value of the Common Stock on the date of
the grant and the exercise period may not exceed ten years, subject to further
limitations.
Benefits
The Company provides to executive officers medical and 401(k) plan
benefits that generally are available to Company employees. The amount of
perquisites, as determined in accordance with the rules of the Securities and
Exchange Commission relating to executive compensation, did not exceed 10% of
salary for fiscal 1998.
Bonus
Based upon recommendations of the Compensation Committee, the Company
provides to certain executive officers bonuses based on their performance and
the performance of the Company.
Chief Executive Officer Compensation
Mr. Steven Katz was appointed to the position of Chief Executive
Officer in May 1996. Effective September 30, 1997 the Company entered into a
two-year employment agreement, with an automatic extension for an additional
one-year term, with Mr. Katz, providing an annual base salary of $150,000 and
bonuses and stock options as determined by the Company's Board of Directors. In
making this determination, the Board of Directors takes into account the
Compensation Committee's recommendations, which in the case of Mr. Katz, are
based on the overall performance of the Company.
Henry B. Ellis
Richard E. Gerzof
Martin H. Kern
Members of the Compensation Committee
-14-
<PAGE>
Performance Graph
Set forth below is a graph comparing the yearly change in the
cumulative stockholder return on the Company's Common Stock since December 31,
1995, the date of the Company's initial public offering, with the NASDAQ Stock
Market Index (U.S.) and the NASDAQ Non- Financial Index. The graph assumes $100
was invested at the close of business on December 31, 1995 in the Company's
Common Stock and in each of the indices and that all dividends on the stocks
included in the NASDAQ indices were reinvested. No cash dividends were paid on
the Company's Common Stock. The stockholder return shown on the graph below is
not necessarily indicative of future performance.
[GRAPHIC OMITTED]
12/31/95 12/31/96 12/31/97 12/31/98
Global Payment Technologies, Inc. $100 $150 $277 $250
NASDAQ Stock Market Index (U.S.) $100 $123 $151 $212
NASDAQ Non-Financial Index $100 $121 $143 $209
-15-
<PAGE>
INDEPENDENT AUDITORS
Arthur Andersen LLP has audited and reported upon the financial
statements of the Company for the fiscal year ended September 30, 1998. It is
currently anticipated that Arthur Andersen LLP will be selected by the Board of
Directors to examine and report on the financial statements of the Company for
the year ending September 30, 1999. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting, will have the opportunity to make
a statement if they desire to do so and are expected to be available to respond
to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's Annual
Meeting to be held in 2000 must be received by the Company for inclusion in the
Company's proxy statement relating to that meeting not later than October 20,
1999. Such proposals should be addressed to Secretary, Global Payment
Technologies, Inc., 20 East Sunrise Highway, Suite 201, Valley Stream, New York
11581.
OTHER INFORMATION
An annual report to stockholders for the year ended September 30, 1998
is being furnished herewith to each stockholder of record as of the close of
business on February 11, 1999. Copies of the Company's Annual Report on Form
10-KSB will be provided free of charge upon written request to:
Global Payment Technologies, Inc.
20 East Sunrise Highway, Suite 201
Valley Stream, New York 11581
Attention: Thomas McNeill, Secretary
In addition, copies of any exhibits to the annual report on Form 10-KSB
will be provided for a nominal charge to stockholders who make a written request
to the Company at the above address.
-16-
<PAGE>
The Board of Directors is aware of no other matters, except for those
incident to the conduct of the Annual Meeting, that are to be presented to
stockholders for formal action at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting or any adjournments thereof, it
is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment.
By Order of the Board of Directors,
/s/ THOMAS MCNEILL
--------------------------------
THOMAS MCNEILL
Secretary
January 28, 1999
-17-
<PAGE>
PROXY CARD
PROXY PROXY
- ----- -----
GLOBAL PAYMENT TECHNOLOGIES, INC.
(Solicited on behalf of the Board of Directors)
The undersigned holder of Common Stock of GLOBAL PAYMENT TECHNOLOGIES,
INC., revoking all proxies heretofore given, hereby constitutes and appoints
Stephen Katz and Edward Seidenberg, and each of them, Proxies, with full power
of substitution, for the undersigned and in the name, place and stead of the
undersigned, to vote all of the undersigned's shares of said stock, according to
the number of votes and with all the powers the undersigned would possess if
personally present at the 1999 Annual Meeting of Stockholders of GLOBAL PAYMENT
TECHNOLOGIES, INC., to be held at the Garden City Hotel, 45 7th Street, Garden
City, New York 11530, on Tuesday, March 23, 1999 at 10:00 a.m., Eastern Standard
Time, and at any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting
and Proxy Statement relating to the meeting and hereby revokes any proxy or
proxies heretofore given.
Each properly executed Proxy will be voted in accordance with the
specifications made below and in the discretion of the Proxies on any other
matter that may come before the meeting. Where no choice is specified, this
Proxy will be voted FOR the listed nominee to serve as a director.
The Board of Directors recommends a vote FOR the listed nominee.
1. Election of one Class I |_| FOR listed nominee |_| AGAINST listed nominee
Director.
|_| WITHHOLD AUTHORITY
to vote for listed nominee
Nominee: Richard E. Gerzof
2. The Proxies are authorized to vote in their discretion upon such other
matters as may properly come before the meeting.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THIS AND THE REVERSE SIDE.
<PAGE>
The shares represented by this Proxy
will be voted in the manner directed. In
the absence of any direction, the shares
will be voted FOR the nominee named in
Proposal 1 and in accordance with the
discretion of the Proxies on such other
matters as may properly come before the
meeting.
Dated__________________________, 1999
----------------------------------------
----------------------------------------
Signature(s)
(Signature(s) should conform to names as
registered. For jointly owned shares,
each owner should sign. When signing as
attorney, executor, administrator,
trustee, guardian or officer of a
corporation, please give full title).
PLEASE MARK AND SIGN ABOVE AND
RETURN PROMPTLY.
