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TURBOCHEF TECHNOLOGIES, INC.
SIX CONCOURSE PARKWAY
SUITE 1900
ATLANTA, GEORGIA 30328
Dear Stockholder:
Sincerely,
Richard E. Perlman | James K. Price | |||||
Chairman of the Board | President and Chief Executive Officer |
July 2, 2004
TURBOCHEF TECHNOLOGIES, INC.
2004 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING
To the Stockholders of TurboChef Technologies, Inc.:
1. | Election of seven directors for a term of one year; |
2. | Approval of an amendment to our Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of our common stock, par value $.01 per share, from 50,000,000 shares to 100,000,000 shares; |
3. | Approval of our 2003 Stock Incentive Plan; |
4. | Ratification of the appointment of Ernst & Young LLP as our independent auditors for fiscal year 2004; and |
5. | Such other matters as may properly come before the meeting or any adjournments or postponements thereof. |
By Order of the Board of Directors,
Richard E. Perlman | James K. Price | |||||
Chairman of the Board | President and Chief Executive Officer |
Atlanta, Georga
July 2, 2004
TURBOCHEF TECHNOLOGIES, INC.
2004 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
PAGE | ||||||
PROPOSAL ONE — ELECTION OF DIRECTORS | 3 | |||||
General Information | 5 | |||||
• Board of Directors | 5 | |||||
• Director Nominations | 6 | |||||
• Compensation Committee Interlocks and Insider Participation | 7 | |||||
• Director Compensation | 7 | |||||
• Executive Officers | 7 | |||||
• Section 16(a) Beneficial Ownership Reporting Compliance | 7 | |||||
• Certain Relationships and Related Transactions | 8 | |||||
Security Ownership of Certain Beneficial Owners and Management | 10 | |||||
Executive Compensation | 13 | |||||
• Report of the Compensation Committee | 13 | |||||
• Summary Compensation Table | 15 | |||||
• Executive Agreements | 15 | |||||
• Other Compensation Information | 16 | |||||
• Equity Compensation Plans | 17 | |||||
Performance Graph | 18 | |||||
PROPOSAL TWO — APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION | 19 | |||||
General | 19 | |||||
Reasons for the Amendment | 19 | |||||
Additional Action Required for Issuance; Preemptive Rights | 20 | |||||
Consequences of Failing to Approve the Amendment | 21 | |||||
Possible Anti-Takeover Effect | 21 | |||||
Vote Required | 22 | |||||
Recommendation of the Board of Directors | 22 | |||||
PROPOSAL THREE — APPROVAL OF 2003 STOCK INCENTIVE PLAN | 23 | |||||
Description of the 2003 Stock Plan | 23 | |||||
Federal Income Tax Consequences | 25 | |||||
2003 Stock Plan Awards | 27 | |||||
Vote Required | 27 | |||||
Recommendation of the Board of Directors | 27 | |||||
PROPOSAL FOUR — SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS | 27 | |||||
Information Regarding Change of Independent Auditors | 28 | |||||
Report of the Audit Committee | 28 | |||||
Independent Accountant Fees | 30 | |||||
Interests of Certain Persons in Matters to be Acted Upon | 30 | |||||
Stockholder Proposals for 2005 Annual Meeting | 30 | |||||
Other Matters | 31 | |||||
Proxies | 31 | |||||
Communicating with the Board of Directors | 31 | |||||
Incorporated Financial Information | 31 | |||||
Where You Can Find More Information | 32 | |||||
Certificate of Amendment | Appendix A | |||||
2003 Stock Incentive Plan, as Amended | Appendix B | |||||
Audit Committee Charter | Appendix C |
2
TURBOCHEF TECHNOLOGIES, INC.
2004 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
PROPOSAL ONE — ELECTION OF DIRECTORS
NOMINEES
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Richard E. Perlman
James K. Price
William A. Shutzer
Raymond H. Welsh
J. Thomas Presby
4
Mr. Presby was a director of PracticeWorks, Inc. He currently is a director of Tiffany & Co., Greenpoint Financial Corp. and World Fuel Services Corporation. Mr. Presby received a B.S. Electrical Engineering degree from Rutgers, and a M.S. Industrial Administration degree from Carnegie Mellon University Graduate School of Business. He is a Certified Public Accountant in New York and Ohio.
Sir Anthony Jolliffe
James W. DeYoung
GENERAL INFORMATION
BOARD OF DIRECTORS
5
DIRECTOR NOMINATIONS
6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
DIRECTOR COMPENSATION
EXECUTIVE OFFICERS
NAME | POSITION | |||||
---|---|---|---|---|---|---|
Richard E. Perlman | Chairman of the Board of Directors | |||||
James K. Price | President and Chief Executive Officer | |||||
James A. Cochran | Senior Vice President and Chief Financial Officer |
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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OWNERSHIP INTEREST IN OVENWORKS, LLLP
NAME OF MANAGEMENT MEMBER | OWNERSHIP PERCENTAGE IN OVENWORKS, LLLP (APPROXIMATE) | |||||
---|---|---|---|---|---|---|
Richard E. Perlman, Chairman | 16.02 | %* | ||||
James K. Price, CEO | 16.02 | % | ||||
William A. Shutzer, director | 16.01 | % | ||||
Raymond Welsh, director | 1.87 | % | ||||
J. Thomas Presby, director | 1.11 | % | ||||
James DeYoung, director | 1.87 | % | ||||
Sir Anthony Jolliffe, director | 0.55 | % | ||||
James A. Cochran, CFO | 2.49 | % |
__________
* Includes the interest held by Oven Management, Inc.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Five Percent Owners
TITLE OF CLASS | NAME AND ADDRESS OF BENEFICIAL OWNER OF CLASS | AMOUNT OF BENEFICIAL OWNERSHIP | PERCENT OF CLASS | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common | Jeffrey B. Bogatin 888 Park Avenue New York, NY 10021 | 5,086,201 | (1) | 17.14 | % | |||||||||
Common | Grand Cheer Co. Ltd. 16F Standard Chartered Bank Bldg 4-4A Des Voeux Road Central Hong Kong K3 | 3,163,589 | (2) | 10.66 | % | |||||||||
Common | Donald J. Gogel c/o Clayton, Dubilier & Rice, Inc. 375 Park Avenue 18th Floor New York, NY 10152 | 2,097,744 | (3) | 7.07 | % | |||||||||
Common | Jeffrey L. Fineberg 2775 Via de la Valle Suite 204 Del Mar, CA 92014 | 1,724,137 | (4) | 5.81 | % | |||||||||
Series D Preferred (Common) | OvenWorks, LLLP 645 Madison Avenue Suite 1500 New York, NY 10022 | 1,917,650 (12,942,961 | )(5)(6) | 89.92% (40.10 | %) |
__________
(1) | Based upon ownership reported in a Form 4 filed on February 13, 2004. |
(2) | Based upon ownership reported in a Form 4 filed on April 30, 2004. Includes 800,000 shares issuable upon exercise of a warrant. |
(3) | Based upon ownership reported in a Form 4 filed on October 30, 2003. Includes 264,550 shares issuable upon exercise of warrants. Includes 83,000 shares held in a family trust of which. Mr. Gogel is a trustee. Mr. Gogel disclaims beneficial ownership of the shares held by the family trust. |
(4) | Based upon the Company’s stock register. Includes the following shares acquired in the Company’s private placement on May 21, 2004: 623,227 shares in the name of JLF Partners I, LP; 46,906 shares in the name of JLF Partners II, LP; and 1,054,004 shares in the name of JLF Offshore Fund, Ltd. |
(5) | Based upon a Schedule 13D filed on November 7, 2003 and includes shares owned by Oven Management Inc. Oven Management, Inc. is the sole general partner of OvenWorks, LLLP. Richard Perlman, Chairman of the Company, is the sole stockholder, sole director and President of Oven Management, Inc. By its terms, the Series D Preferred stock is convertible at any time (subject to adjustment) into 20 shares of Company common stock for each preferred share. The Company currently does not have sufficient authorized common stock to reserve for conversion of all outstanding shares of Series D Preferred Stock. The preferred stock held would be convertible into 38,353,000 shares of common stock. |
(6) | Includes the following shares of common stock over which OvenWorks, LLLP has the right to vote, for limited purposes, pursuant to voting agreements: 7,183,945 shares beneficially owned by Messrs. Bogatin and Gogel (or their transferees) and 3,163,589 shares beneficially owned by Grand Cheer Co. Ltd. (or its transferee) (see footnotes 1, 2 and 3 and accompanying table entries). Does not include an additional 35,757,573 shares into which the Series D Preferred Stock would be convertible if the stockholder approve Proposal Two and the Company files the amendment to its Certificate of Incorporation as described in the proposal, in which case |
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OvenWorks would beneficially own 48,700,534 shares of common stock upon conversion of the Series D Preferred Stock, or 71.58% of the outstanding common stock.
Officers and Directors
• | each of TurboChef’s directors; |
• | each of TurboChef’s named executive officers; and |
• | all of TurboChef’s directors and executive officers as a group. |
NAME OF BENEFICIAL OWNER | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1) | PERCENT OF CLASS | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Richard E. Perlman | 624,127 | (2) �� | 2.06 | % | ||||||
James K. Price | 624,127 | (3) | 2.06 | % | ||||||
J. Thomas Presby | 28,762 | (4) | * | |||||||
William A. Shutzer | 415,657 | (5) | 1.38 | % | ||||||
Raymond H. Welsh | 162,327 | (6) | * | |||||||
Sir Anthony Jolliffe | 164,380 | (7) | * | |||||||
James W. DeYoung | 324,396 | (8) | 1.09 | % | ||||||
Mark C. Mirken | 613,846 | (9) | 2.03 | % | ||||||
Jeffrey B. Bogatin | 5,086,201 | (10) | 17.14 | % | ||||||
Vincent A. Gennaro | -0- | — | ||||||||
James A. Cochran | 131,380 | (11) | * | |||||||
All current directors and executive officers as a group (8 persons) | 2,085,501 | (12) | 6.57 | % |
__________
* | Less than one percent. |
(1) | Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. Percentages herein assume a base of 29,680,585 shares of common stock outstanding as of June 4, 2004. |
(2) | Includes 208,333 shares of common stock issuable upon exercise of options and 415,794 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP and Oven Management, Inc., the general partner of OvenWorks, in which Mr. Perlman has a beneficial interest. Upon the Amendment, Mr. Perlman would have a beneficial interest in an additional 5,728,464 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks and Oven |
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Management. Mr. Perlman’s reported ownership excludes all other shares issuable now, or issuable upon the Amendment, upon conversion of Series D Preferred Stock held by OvenWorks, LLLP, although Mr. Perlman is the sole stockholder of Oven Management, Inc., the general partner of OvenWorks. OvenWorks and Oven Management own and control an aggregate of 1,917,650 shares of Series D Preferred Stock convertible into 2,595,427 shares of common stock as of June 4, 2004 and 38,353,000 shares of common stock upon the Amendment. If all shares of Series D Preferred Stock were converted after the Amendment is effective, including 215,000 shares of Series D Preferred Stock which are not controlled by Mr. Perlman, then OvenWorks and Oven Management would own and control 53.02% of the common stock and Mr. Perlman would control 53.16%. Current directors and executive officers (or their affiliates) would have beneficial ownership of an aggregate of 21,458,929 shares of the Company’s common stock if OvenWorks distributed such shares to its partners. |
(3) | Includes 208,333 shares of common stock issuable upon exercise of options and 415,794 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. Price has a beneficial interest. Upon the Amendment, Mr. Price would have a beneficial interest in an additional 5,728,464 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. Price would beneficially own 8.76% of the common stock. |
(4) | Shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. Presby has a beneficial interest. Upon the Amendment, Mr. Presby would have a beneficial interest in an additional 396,248 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. Presby would beneficially own less than 1% of the common stock. |
(5) | Shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. Shutzer has a beneficial interest. Upon the Amendment, Mr. Shutzer would have a beneficial interest in an additional 5,726,558 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. Shutzer would beneficially own 8.49% of the common stock. |
(6) | Includes 48,534 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. Welsh has a beneficial interest. Upon the Amendment, Mr. Welsh would have a beneficial interest in an additional 668,671 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. Welsh would beneficially own 1.15% of the common stock. |
(7) | Includes 150,000 shares of common stock issuable upon exercise of options and 14,380 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Sir Anthony Jolliffe has a beneficial interest. Upon the Amendment, Sir Anthony Jolliffe would have a beneficial interest in an additional 198,125 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Sir Anthony Jolliffe would beneficially own less than 1% of the common stock. |
(8) | Includes 48,534 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. DeYoung has a beneficial interest. Upon the Amendment, Mr. DeYoung would have a beneficial interest in an additional 668,671 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. DeYoung would beneficially own 1.37% of the common stock. |
(9) | Shares issuable upon exercise of options. |
(10) | See footnote 1 to 5% ownership table above and accompanying table entries. |
(11) | Includes 66,667 shares of common stock issuable upon exercise of options and 64,713 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which Mr. Cochran has a beneficial interest. Upon the Amendment, Mr. Cochran would have a beneficial interest in an additional |
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891,567 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then Mr. Cochran would beneficially own 1.41% of the common stock. |
(12) | Includes 633,333 shares of common stock issuable upon exercise of options and 1,452,168 shares issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks, LLLP, in which the officers and directors as a group have a beneficial interest. Upon the Amendment, the officers and directors as a group would have a beneficial interest in an additional 20,006,761 shares of common stock issuable upon conversion of shares of Series D Preferred Stock currently owned by OvenWorks. If all outstanding shares of Series D Preferred Stock were converted after the Amendment is effective, then the officers and directors as a group would beneficially own 30.28% of the common stock. |
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
— | establish the compensation policies applicable to the executive officers and determine the annual compensation of each executive officer; |
— | exercise all rights, authority and functions of the Board of Directors under the various stock incentive plans; and |
— | perform such other duties as the Board of Directors from time to time may direct. |
The Compensation Committee’s Philosophy
— | foster a high-performance culture that motivates and retains high-performing executives; and |
— | create a comprehensive incentive compensation plan which includes a combination of stock-based and cash compensation. |
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practices and each individual’s role and responsibilities in the organization. Our objective in setting base salaries is generally to provide cash compensation at a level that is competitive with comparable companies.
Compliance with Internal Revenue Code Section 162(m)
By the Compensation Committee:
William A. Shutzer
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
NAME AND PRINCIPAL POSITION | FISCAL YEAR | SALARY ($) | BONUS ($) | LONG-TERM COMPENSATION AWARDS SECURITIES UNDERLYING OPTIONS (#) | ||||||||||||||
Jeffrey B. Bogatin | ||||||||||||||||||
Former Chairman and Chief Executive Officer (1) | 2003 | $ | 42,000 | $ | -0- | -0- | ||||||||||||
2002 | $ | 153,930 | $ | -0- | -0- | |||||||||||||
2001 | $ | -0- | $ | -0- | 1,000,000 | |||||||||||||
Vincent A. Gennaro | ||||||||||||||||||
Former Chief Executive Officer (2) | 2003 | $ | 106,615 | $ | -0- | -0- | ||||||||||||
2002 | $ | 36,000 | $ | -0- | 1,500,000 | |||||||||||||
2001 | $ | -0- | $ | -0- | -0- | |||||||||||||
Richard E. Perlman | ||||||||||||||||||
Chairman (3) | 2003 | $ | 56,154 | $ | -0- | 1,250,000 | ||||||||||||
James K. Price | ||||||||||||||||||
Chief Executive Officer (4) | 2003 | $ | 56,154 | $ | -0- | 1,250,000 | ||||||||||||
Mark C. Mirken | ||||||||||||||||||
Former President — Commercial Sales (5) | 2003 | $ | 159,231 | $ | -0- | 200,000 | ||||||||||||
2002 | $ | -0 | $ | -0- | 438,846 | |||||||||||||
2001 | $ | -0 | $ | -0- | 50,000 |
(1) | Mr. Bogatin served as Chairman of the Board until October 28, 2003 and principal executive officer of the Company from April 15, 2003 to October 28, 2003. |
(2) | Mr. Gennaro served as Chief Executive Officer of the Company until April 15, 2003. |
(3) | Mr. Perlman began serving as Chairman on October 28, 2003. |
(4) | Mr. Price began serving as Chief Executive Officer on October 28, 2003. |
(5) | Mr. Mirken served as an executive officer until December 8, 2003. |
EXECUTIVE AGREEMENTS
15
Internal Revenue Code. Finally, the employment agreements prohibit the executive from engaging in certain activities which compete with the Company, seeks to recruit its employees or disclose any of its trade secrets or otherwise confidential information.
OTHER COMPENSATION INFORMATION
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS TABLE
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM (1) | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
NAME | NUMBER OF SHARES OF COMMON STOCK UNDERLYING OPTIONS GRANTED | % OF TOTAL OPTIONS GRANTED TO EMPLOYEES IN 2003 | EXERCISE PRICE ($/SHARE) | EXPIRATION DATE | 5% | 10% | |||||||||||||||||||||
Jeffrey B. Bogatin | -0- | -0- | -0- | -0- | |||||||||||||||||||||||
Vincent A. Gennaro | -0- | -0- | -0- | -0- | |||||||||||||||||||||||
Richard E. Perlman | 1,250,000 | (2) | 18.42 | % | $ | 1.75 | 10/29/2013 | $ | 1,375,707 | $ | 3,486,312 | ||||||||||||||||
James K. Price | 1,250,000 | (2) | 18.42 | % | $ | 1.75 | 10/29/2013 | $ | 1,375,707 | $ | 3,486,312 | ||||||||||||||||
Mark C. Mirken | 200,000 | (3) | 2.95 | % | $ | 0.31 | 12/8/2013 | $ | 1,013,070 | $ | 1,648,870 |
(1) | The potential realizable value of the options, if any, granted in 2003 to each of the named executive officers was calculated by multiplying those options by the excess of (a) the assumed market value of common stock, at the end of option term, if the market value of common stock were to increase 5% or 10% in each year of the option’s term over (b) the exercise price shown. This calculation does not take into account any taxes or other expenses which might be owed. The 5% and 10% appreciated rates are set forth in the SEC rules and no representation is made that the common stock will appreciate at these assumed rates or at all. |
(2) | The options were granted with an exercise price equal to the fair market value of the common stock on the date of grant. The options vest quarterly over three years from the date of grant. |
(3) | The options vest one half on December 8, 2004 and the other half on December 8, 2005. Market value of the common stock on the grant date was $3.30. |
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUE TABLE
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
Number of Unexercised Options at Fiscal Year-end | Value of Unexercised In-the-money Options at Fiscal Year-end (1) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Shares Acquired on Exercise | Value Realized (Market Price at Exercise Less Exercise Price) | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||||
Jeffrey B. Bogatin (2) | — | $ -0- | — | -0- | $ | -0- | $ | -0- | |||||||||||||||||||
Vincent A. Gennaro | — | $ -0- | — | -0- | $ | -0- | $ | -0- | |||||||||||||||||||
Richard E. Perlman | — | $ -0- | — | 1,250,000 | $ | -0- | $ | 1,687,500 | |||||||||||||||||||
James K. Price | — | $ -0- | — | 1,250,000 | $ | -0- | $ | 1,687,500 | |||||||||||||||||||
Mark C. Mirken | — | $ -0- | 613,846 | 200,000 | $ | 1,276,515 | $ | 558,000 |
(1) | Options are “in the money” if the fiscal year-end fair market value of the common stock exceeds the option exercise price. At December 31, 2003, TurboChef common stock’s closing bid was $3.10. |
(2) | Mr. Bogatin resigned as a Director and Chairman on October 28, 2003. All outstanding options were cancelled in connection with his separation. |
EQUITY COMPENSATION PLANS
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity Compensation Plans Approved by Security Holders | 2,273,920 | $2.26 | 3,463,728 | |||||||||||
Equity Compensation Plans Not Approved by Security Holders | 6,411,000 | $1.84 | 0 | |||||||||||
Total | 8,684,920 | $1.95 | 3,463,728 |
17
PERFORMANCE GRAPH
18
PROPOSAL TWO — APPROVAL OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
GENERAL
REASONS FOR THE AMENDMENT
19
(and our inability to reserve the required number of shares of common stock does not impact the rank, rights, preferences and privileges of the Series D Preferred Stock).
• | 29,680,585 shares of common stock were outstanding; |
• | 5,475,730 shares of common stock were reserved for issuance under our 1994 Stock Option Plan, as amended; |
• | 10,000,000 shares of common stock were reserved for issuance under our 2003 Stock Incentive Plan; and |
• | 1,957,269 shares of common stock were reserved for issuance under warrants, options and other similar rights to acquire shares of common stock. |
ADDITIONAL ACTION REQUIRED FOR ISSUANCE; PREEMPTIVE RIGHTS
• | sale or issuance of common stock or common stock equivalents pursuant to a stock incentive plan; |
• | sale or issuance of common stock or common stock equivalents to officers or members of our Board of Directors; |
• | issuance of common stock or common stock equivalents to third parties in conjunction with licensing, strategic alliances and commercial financing transactions; |
• | issuance of common stock or common stock equivalents in connection with a business combination or partnership or joint venture; |
20
• | issuance of common stock upon conversion of shares of Series D Preferred Stock; |
• | issuance of shares of capital stock in a public offering resulting in aggregate gross proceeds of $25,000,000 or more; or |
• | issuance of shares of common stock upon conversion of outstanding options, warrants or other common stock equivalents. |
CONSEQUENCES OF FAILING TO APPROVE THE AMENDMENT
• | if our common stock has been traded in the open market (e.g., “pink sheets”, bulletin board, NASDAQ, or any national securities exchange constituting the primary trading market for the common stock) during the 10 trading days before the date of redemption, the redemption price for each share of Series D Preferred Stock will be equal to the greater of: |
• | the consideration paid to us for such share of Series D Preferred Stock (subject to adjustment) plus all accrued and unpaid dividends on such share (if any are declared); or |
• | an amount equal to the average closing sales price per share of common stock in the open market during the 10 trading days preceding the date of redemption; and |
• | if our common stock has not been traded in the open market during the 10 trading days before the date of redemption, the redemption price for each share of Series D Preferred Stock will be the greater of: |
• | the aggregate total consideration paid to us for such share of Series D Preferred Stock (subject to adjustment) plus all accrued and unpaid dividends on such share (if any are declared); or |
• | the fair market value of such share as established in good faith by our Board of Directors, as set forth in the Certificate of Designations, after receiving appropriate valuation advice from a reputable investment banking firm reasonably acceptable to the redeeming holders of Series D Preferred Stock. |
POSSIBLE ANTI-TAKEOVER EFFECT
21
authorized but unissued shares of common stock may have the effect of permitting our current management, including our current Board of Directors, to retain its position, and place it in a better position to resist changes that stockholders may wish to make if they are dissatisfied with the conduct of our business. However, our Board of Directors is not aware of any attempt to take control of TurboChef, and our Board of Directors did not propose the increase in the number of authorized but unissued shares of common stock with the intent that it be utilized as a type of anti-takeover device.
VOTE REQUIRED
• | holders of a majority of our shares of common stock and our shares of Series D Preferred Stock, outstanding as of the close of business on the record date, voting together; |
• | holders of a majority of our shares of common stock outstanding as of the close of business on the record date voting as a class; and |
• | holders of a majority of our shares of Series D Preferred Stock outstanding as of the close of business on the record date voting as a class. |
Abstentions and broker non-votes will have the same effect as votes against approval of this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
22
PROPOSAL THREE — APPROVAL OF 2003 STOCK INCENTIVE PLAN
DESCRIPTION OF THE 2003 STOCK PLAN
23
24
FEDERAL INCOME TAX CONSEQUENCES
25
makes an election under a special Code provision to be taxed at the time such restricted stock award is granted. If such election is not made, the participant will recognize taxable income at the time the restrictions on such restricted stock award lapse in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares. The amount of ordinary income recognized by a participant making the above-described special election or upon the lapse of the restrictions is deductible by the Company, as compensation expense, except to the extent the limit of Section 162(m) applies. In addition, a participant receiving dividends with respect to shares subject to a restricted stock award for which the above-described election has not been made and prior to the time the restrictions lapse will recognize taxable compensation (subject to income tax withholding for Company employees), rather than dividend income, in an amount equal to the dividends paid and the Company will be entitled to a corresponding deduction.
26
2003 STOCK PLAN AWARDS
NAME AND POSITION | NUMBER OF OPTIONS | |||||
---|---|---|---|---|---|---|
Jeffrey B. Bogatin — former Chairman and CEO | -0- | |||||
Vincent A. Gennaro — former CEO | -0- | |||||
Richard E. Perlman — Chairman | 1,250,000 | |||||
James K. Price — CEO | 1,250,000 | |||||
Mark C. Mirken — former President Commercial Sales | 200,000 | |||||
Current Executive Officers, as a Group | 2,900,000 | |||||
Non-executive Officer Directors, as a Group | 690,000 | |||||
Director nominees: | ||||||
J. Thomas Presby | 135,000 | |||||
William A. Shutzer | 135,000 | |||||
Raymond H. Welsh | 110,000 | |||||
James W. DeYoung | 110,000 | |||||
Sir Anthony Jolliffe | 200,000 | |||||
Employees (including officers) who are not Executive Officers, as a Group | 4,151,000 |
VOTE REQUIRED
RECOMMENDATION OF THE BOARD OF DIRECTORS
PROPOSAL FOUR — SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Ernst & Young LLP to be our independent auditors for the fiscal year ending December 31, 2004, and proposes that the stockholders ratify this selection at the annual meeting. Ratification of the selection of Ernst & Young LLP requires the approval of a majority of the shares present or represented by proxy and entitled to vote at the annual meeting, with the holders of the Series D Preferred Stock voting with the common holders. Abstentions and broker non-votes will not be counted. If the selection of Ernst & Young LLP is rejected by the stockholders, then the Audit Committee will re-evaluate its selection.
27
INFORMATION REGARDING CHANGE IN INDEPENDENT AUDITORS
REPORT OF THE AUDIT COMMITTEE
— | the plan for, and the independent auditors’ report on, the audit of the Company’s financial statements; |
— | the Company’s financial disclosure documents, including all financial statements and reports filed with the Securities and Exchange Commission or sent to the Company’s stockholders; |
— | management’s selection, application and disclosure of critical accounting policies; |
— | changes in the Company’s accounting practices, principles, controls or methodologies; |
— | significant developments or changes in accounting rules applicable to the Company; and |
— | the adequacy of the Company’s internal controls and accounting and financial personnel. |
— | methods to account for significant unusual transactions; |
— | the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus; |
28
— | the process used by management in formulating particularly sensitive accounting estimates and the basis for the auditors’ conclusions regarding the reasonableness of those estimates; and |
— | disagreements with management over the application of accounting principles, the basis for management’s accounting estimates and the disclosures in the financial statements. |
By the Audit Committee:
William A. Shutzer
James W. DeYoung
29
INDEPENDENT ACCOUNTANT FEES
AUDIT FEES
AUDIT RELATED FEES
TAX FEES
ALL OTHER FEES
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
STOCKHOLDER PROPOSALS FOR THE 2005 ANNUAL MEETING
30
Secretary at our principal executive office sufficiently far in advance that it is received by us no later than May 23, 2005. Proxy voting on such proposals at the 2005 annual meeting of stockholders, if any, will be subject to the discretionary voting authority of the designated proxy holders.
OTHER MATTERS
PROXIES
COMMUNICATING WITH THE BOARD OF DIRECTORS
INCORPORATED FINANCIAL INFORMATION
• | Items 6, 7, 7A, 8 and 9 of our Annual Report on Form 10-K for the year ended December 31, 2003 filed with the SEC on March 30, 2004; |
• | Items 1, 2 and 3 of Part I of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004; |
• | Our Current Report on Form 8-K dated May 21, 2004 filed with the SEC on June 2, 2004; |
• | Our Amendment to Current Report on Form 8-K dated June 30, 2004 filed with the SEC on June 30, 2004; and |
• | Our Amendment to Current Report on Form 8-K dated July 2, 2004 filed with the SEC on July 2, 2004. |
31
WHERE YOU CAN FIND MORE INFORMATION
32
APPENDIX A
CERTIFICATE OF AMENDMENT
TO THE RESTATED CERTIFICATE OF INCORPORATION OF
TURBOCHEF TECHNOLOGIES, INC.
I.
II.
III.
IV.
By: | James K. Price President and Chief Executive Officer |
A-1
APPENDIX B
TURBOCHEF TECHNOLOGIES, INC.
2003 STOCK INCENTIVE PLAN
Table of Contents
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
ARTICLE 1 — GENERAL PROVISIONS | B-1 | |||||||||
1.1 | Establishment of Plan | B-1 | ||||||||
1.2 | Purpose of Plan | B-1 | ||||||||
1.3 | Types of Awards | B-1 | ||||||||
1.4 | Effective Date | B-1 | ||||||||
1.5 | Duration of the Plan | B-1 | ||||||||
ARTICLE 2 — DEFINITIONS | B-1 | |||||||||
ARTICLE 3 — ADMINISTRATION | B-4 | |||||||||
3.1 | General | B-4 | ||||||||
3.2 | Authority of the Committee | B-4 | ||||||||
3.3 | Participation Outside of the United States | B-5 | ||||||||
3.4 | Delegation of Authority | B-5 | ||||||||
3.5 | Award Agreements | B-5 | ||||||||
3.6 | Indemnification | B-5 | ||||||||
ARTICLE 4 — SHARES SUBJECT TO THE PLAN | B-5 | |||||||||
4.1 | Number of Shares | B-5 | ||||||||
4.2 | Individual Limits | B-6 | ||||||||
4.3 | Lapsed Award | B-6 | ||||||||
4.4 | Adjustment of Shares | B-6 | ||||||||
ARTICLE 5 — STOCK OPTIONS | B-6 | |||||||||
5.1 | Grant of Options | B-6 | ||||||||
5.2 | Agreement | B-7 | ||||||||
5.3 | Option Price | B-7 | ||||||||
5.4 | Duration of Options | B-7 | ||||||||
5.5 | Exercise of Options | B-7 | ||||||||
5.6 | Payment | B-7 | ||||||||
5.7 | Nontransferability of Options | B-7 | ||||||||
5.8 | Special Rules for ISOs | B-7 | ||||||||
ARTICLE 6 — STOCK APPRECIATION RIGHTS | B-8 | |||||||||
6.1 | Grant of SARs | B-8 | ||||||||
6.2 | Tandem SARs | B-8 | ||||||||
6.3 | Payment | B-8 | ||||||||
6.4 | Exercise of SARs | B-8 | ||||||||
ARTICLE 7 — RESTRICTED STOCK AND RESTRICTED STOCK UNITS | B-8 | |||||||||
7.1 | Grant of Restricted Stock and Restricted Stock Units | B-8 | ||||||||
7.2 | Restricted Stock Agreement | B-8 | ||||||||
7.3 | Restricted Stock Units Agreement | B-8 | ||||||||
7.4 | Nontransferability | B-9 | ||||||||
7.5 | Certificates | B-9 | ||||||||
7.6 | Dividends and Other Distributions | B-9 |
-i-
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
ARTICLE 8 — PERFORMANCE SHARES AND UNITS | B-1 | |||||||||
8.1 | Grant of Performance Shares/Units | B-9 | ||||||||
8.2 | Value of Performance Shares/Units | B-9 | ||||||||
8.3 | Earning of Performance Shares/Units | B-9 | ||||||||
8.4 | Form and Timing of Payment of Performance Shares/Units | B-10 | ||||||||
8.5 | Nontransferability | B-10 | ||||||||
ARTICLE 9 — PERFORMANCE MEASURES | B-10 | |||||||||
ARTICLE 10 — BENEFICIARY DESIGNATION | B-10 | |||||||||
ARTICLE 11 — DEFERRALS | B-11 | |||||||||
ARTICLE 12 — WITHHOLDING | B-11 | |||||||||
12.1 | Tax Withholding | B-11 | ||||||||
12.2 | Share Withholding | B-11 | ||||||||
ARTICLE 13 — AMENDMENT AND TERMINATION | B-11 | |||||||||
13.1 | Amendment of Plan | B-11 | ||||||||
13.2 | Amendment of Award Agreement | B-11 | ||||||||
13.3 | Termination of Plan | B-11 | ||||||||
13.4 | Cancellation of Awards for Detrimental Activity | B-12 | ||||||||
13.5 | Assumption or Cancellation of Awards Upon a Corporate Transaction | B-12 | ||||||||
ARTICLE 14 — MISCELLANEOUS PROVISIONS | B-12 | |||||||||
14.1 | Restrictions on Shares | B-12 | ||||||||
14.2 | Rights of a Stockholder | B-13 | ||||||||
14.3 | No Implied Rights | B-13 | ||||||||
14.4 | Compliance with Laws | B-13 | ||||||||
14.5 | Successors | B-13 | ||||||||
14.6 | Tax Elections | B-13 | ||||||||
14.7 | Legal Construction | B-13 |
-ii-
TURBOCHEF TECHNOLOGIES, INC.
2003 STOCK INCENTIVE PLAN
ARTICLE 1 — GENERAL PROVISIONS
ARTICLE 2 — DEFINITIONS
B-1
B-2
For purposes of subsection (a) above, if Shares are traded on more than one securities exchange then the following exchange shall be referenced to determine Fair Market Value: (i) the New York Stock Exchange (“NYSE”), or (ii) if shares are not traded on the NYSE, the Nasdaq, or (iii) if shares are not traded on the NYSE or Nasdaq, the largest regional exchange on which Shares are traded.
B-3
ARTICLE 3 — ADMINISTRATION
B-4
ARTICLE 4 — SHARES SUBJECT TO THE PLAN
B-5
or attestation), only the number of Shares issued net of the Shares so tendered shall be deemed delivered for purposes of determining the maximum number of Shares available for issuance under the Plan.
ARTICLE 5 — STOCK OPTIONS
B-6
Committee may grant a Participant ISOs, NQSOs or a combination thereof, and may vary such Awards among Participants; provided that only an employee may be granted ISOs.
B-7
ARTICLE 6 — STOCK APPRECIATION RIGHTS
ARTICLE 7 — RESTRICTED STOCK AND RESTRICTED STOCK UNITS
B-8
service or achievement of certain performance measures; the length of the Restriction Period, if any, and whether any circumstances such as Change in Control, termination of employment, disability or death will shorten or terminate any vesting or Restriction Period; and whether dividend equivalents will be paid or accrued with respect to the RSUs.
ARTICLE 8 — PERFORMANCE SHARES AND UNITS
B-9
ARTICLE 9 — PERFORMANCE MEASURES
ARTICLE 10 — BENEFICIARY DESIGNATION
B-10
the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
ARTICLE 11 — DEFERRALS
ARTICLE 12 — WITHHOLDING
ARTICLE 13 — AMENDMENT AND TERMINATION
B-11
ARTICLE 14 — MISCELLANEOUS PROVISIONS
B-12
are then listed and any applicable federal or state laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. In making such determination, the Committee may rely upon an opinion of counsel for the Company.
B-13
ATTEST: | By: /s/ Richard E. Perlman Authorized Officer |
/s/ James A. Cochran
Secretary
B-14
TURBOCHEF TECHNOLOGIES, INC.
AMENDMENT TO
2003 STOCK INCENTIVE PLAN
Background
Amendment
Subject to adjustment as provided in Section 4.3, the total number of Shares available for grant of Awards under the Plan shall be ten million (10,000,000) Shares, all of which may be granted as Incentive Stock Options. |
By authority of the Board of Directors
/s/ Dennis J. Stockwell
Dennis J. Stockwell
Secretary
B-15
APPENDIX C
TURBOCHEF TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
ORGANIZATION
FUNCTIONS
C-1
C-2
The Board of Directors recommends a vote FOR proposals (1), (2), (3) and (4). | Please Mark Here for Address Change or Comments | c |
SEE REVERSE SIDE | ||
1. | Election of directors 01 Richard E. Perlman, 02 James K. Price, 03 J. Thomas Presby, 04 William A. Shutzer, 05 Raymond H. Welsh, 06 James W. DeYoung and 07 Sir Anthony Jolliffe: | ||
FOR all nominees listed above (except as marked to the contrary below). | WITHHOLD AUTHORITY to vote for all nominees listed above. | ||
c | c | ||
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee’s name in the space below.) | |||
2. | Approval of the amendment to the Restated Certificate of Incorporation, as amended, of TurboChef Technologies, Inc. to increase the number of authorized shares of common stock, par value $.01 per share, from 50,000,000 to 100,000,000: | FOR | AGAINST | ABSTAIN | ||||
c | c | c | ||||||
FOR | AGAINST | ABSTAIN | ||||||
3. | Approval of the TurboChef Technologies, Inc. 2003 Stock Incentive Plan, as amended: | c | c | c | ||||
FOR | AGAINST | ABSTAIN | ||||||
4. | Ratification of the appointment of Ernst & Young LLP as the Company’s independent auditors for the year ending December 31, 2004: | c | c | c | ||||
5. | In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. | |||||||
| ||
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE. |
Receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement dated July 2, 2004, is hereby acknowledged. | |||
Signature | |||
Signature | |||
Dated: | 2004 | ||
Please sign exactly as name appears hereon, including any official position or representative capacity. |
p FOLD AND DETACH HERE p |
TURBOCHEF TECHNOLOGIES, INC.
ATLANTA, GEORGIA
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 11:00 A.M. ON JULY 19, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints James K. Price and Richard E. Perlman, and each of them, as attorneys and proxies of the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to appear at the Annual Meeting of Stockholders of TurboChef Technologies, Inc. to be held on the 19th day of July, 2004, and at any postponements or adjournments thereof, and to vote all of the shares of TurboChef Technologies, Inc. which the undersigned is entitled to vote, with all the powers and authority the undersigned would possess if personally present. The undersigned hereby directs that this proxy be voted as marked on the reverse side hereof.
This Proxy will, when properly executed, be voted as directed. If no directions to the contrary are indicated in the boxes provided, the persons named herein intend to vote FOR each proposal listed on the reverse side hereof.
A majority of said attorneys and proxies present and acting at the meeting in person or by their substitutes (or if only one is present and acting, then that one) may exercise all the powers conferred hereby. Discretionary authority is conferred hereby as to certain matters that may properly come before the meeting.
(Continued and to be marked, signed and dated on the reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side) |
p FOLD AND DETACH HERE p |