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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PRINTRONIX, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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[PRINTRONIX LOGO]
17500 CARTWRIGHT ROAD
P.O. BOX 19559
IRVINE, CALIFORNIA 92623
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 12, 1997
The Annual Meeting of Stockholders of Printronix, Inc. will be held at the
principal executive offices of the Company, located at 17500 Cartwright Road,
Irvine, California, on Tuesday, August 12, 1997 at 9:00 a.m. local time, for the
following purposes, all as set forth in the attached Proxy Statement:
1. To elect five directors to hold office until the next annual meeting of
stockholders.
2. To approve an amendment to the Certificate of Incorporation to increase
the authorized number of shares from 12,000,000 to 30,000,000.
3. To approve an amendment to the 1994 Stock Incentive Plan to increase
shares available for awards.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on June 23, 1997 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
Stockholders are cordially invited to attend the meeting in person. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTPAID ENVELOPE. If you do
attend the meeting, you may withdraw your proxy and vote personally on each
matter brought before the meeting.
July 10, 1997
GEORGE L. HARWOOD
Senior Vice President, Finance & IS
Chief Financial Officer and Secretary
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[PRINTRONIX LOGO]
17500 CARTWRIGHT ROAD
P.O. BOX 19559
IRVINE, CALIFORNIA 92623
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 12, 1997
This Proxy Statement is furnished in connection with the solicitation of
the enclosed proxy on behalf of the Board of Directors of Printronix, Inc., a
Delaware corporation (the "Company"), for use at the annual meeting of
stockholders of the Company to be held on Tuesday, August 12, 1997 and at any
adjournments thereof, for the purposes set forth in the accompanying notice. It
is anticipated that this Proxy Statement and the enclosed form of proxy will be
first mailed to stockholders on or about July 10, 1997.
The close of business on June 23, 1997 has been fixed as the record date
for stockholders entitled to notice of and to vote at the meeting. As of that
date, there were 7,866,722 shares of Common Stock of the Company outstanding and
entitled to vote, the holders of which are entitled to one vote per share.
In the election of directors, a stockholder may cumulate his or her votes
for one or more candidates, but only if such candidate's or candidates' names
have been placed in nomination prior to the voting and the stockholder has given
notice at the meeting, prior to the voting, of his or her intention to cumulate
votes. If any one stockholder has given such notice, all stockholders may
cumulate their votes for the candidates in nomination. If the voting for
directors is conducted by cumulative voting, each share will be entitled to a
number of votes equal to the number of directors to be elected, which votes may
be cast for a single candidate or may be distributed among two or more
candidates in such proportions as the stockholder thinks fit. The five
candidates receiving the highest number of affirmative votes shall be elected.
In the event of cumulative voting, the proxy solicited by the Board of Directors
confers discretionary authority on the proxies to cumulate votes so as to elect
the maximum number of persons nominated by the Board of Directors.
Stockholders are requested to date, sign and return the enclosed proxy to
make certain that their shares will be voted at the meeting. Any proxy given may
be revoked by the stockholder at any time before it is voted by delivering
written notice of revocation to the Secretary of the Company, by filing with him
a proxy bearing a later date, or by attendance at the meeting and voting in
person. All proxies properly executed and returned will be voted in accordance
with the instructions specified thereon. If no instructions are specified,
proxies will be voted FOR the election of the five nominees for directors named
below and FOR each of the proposals set forth herein.
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PROPOSAL NUMBER 1:
ELECTION OF DIRECTORS
The By-laws of the Company authorize a minimum of five and a maximum of
nine directors, the actual number of authorized directors to be determined by
the Board of Directors. Currently, the number of authorized directors is five
who are to be elected at the annual meeting of stockholders to hold office until
the next annual meeting and until their respective successors are elected and
qualified. It is intended that the proxies received, unless otherwise specified,
will be voted for the five nominees named below, each of whom is an incumbent
director of the Company. It is not contemplated that any of the nominees will be
unable or unwilling to serve as a director but, if that should occur, the
persons designated as proxies will vote for a substitute nominee or nominees
designated by the Board of Directors.
There is set forth below as to each of the five nominees for election as a
director, his principal occupation, age, the year he became a director of the
Company, and additional biographical data.
ROBERT A. KLEIST
Mr. Kleist, age 68, is one of the founders of the Company and has served as
a director and its President and Chief Executive Officer since its formation in
1974. He held the additional office of Chief Financial Officer from February
1987 until October 1988 and from August 1985 until January 1986. Mr. Kleist is a
director of Seagate Technology.
BRUCE T. COLEMAN
Mr. Coleman, age 58, has served as a director of the Company since February
1994 and previously from 1976 to 1989. Since September 1991, he has been the
Chief Executive Officer of El Salto Advisors, a consulting firm which provides
interim management to computer software and service companies. In the years 1992
to 1996, Mr. Coleman served as interim CEO for Computer Network Technology
Corporation, Fischer International, Image BSN Systems, Knowledge Systems
Corporation, Resumix Inc. and Viewpoint Systems. From 1988 to 1991, Mr. Coleman
managed Information Science, Inc., a human resource software and service
company. Mr. Coleman is a director of Computer Network Technology Corporation.
JOHN R. DOUGERY
Mr. Dougery, age 57, has served as a director of the Company since 1978.
Mr. Dougery has been a general partner of Dougery & Wilder and its predecessor
since its formation in April 1981. The partnership is engaged in the business of
selecting and managing venture capital investments.
RALPH GABAI
Mr. Gabai, age 59, has served as a director of the Company since 1988. In
December 1996, Mr. Gabai became President, Chief Executive Officer and a
director of MicroNet Technology, Inc., a manufacturer and marketer of storage
systems and RAID memory systems. From March 1984 to December 1996, Mr. Gabai was
the President of Bi-Coastal Consulting Ltd., a firm specializing in management
consulting. From July 1987 to December 1989, Mr. Gabai was Chairman and Chief
Executive Officer of Triplex Corporation, a manufacturer of fault tolerant
programmable controllers. From January to December 1990, he was Chairman and
Chief Executive Officer of Unistructure Inc., a firm engaged in high density
electronic packaging. Mr. Gabai is an adviser to Seidman-Fisher, a venture
capital investment fund.
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ERWIN A. KELEN
Mr. Kelen, age 62, has served as a director of the Company since 1977. From
January 1984 to September 1990, he was the President and Chief Executive Officer
of DataMyte Corporation, a manufacturer of factory data collection systems.
Since October 1990, Mr. Kelen has been the principal of Kelen Ventures, a
venture capital and investment firm. Mr. Kelen is a director of Computer Network
Technology Corporation, Insignia Systems Inc. and CyberOptics Inc.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company held seven meetings during the fiscal
year ended March 28, 1997. All directors attended at least 75% of the meetings
of the Board and its committees on which they served. In addition to action
taken at the meetings, the Board and its committees on occasion act by unanimous
written consent.
The Board of Directors has established standing Audit and Stock Option
Committees but does not have standing nominating or compensation committees.
The Audit Committee, which held two meetings during fiscal year 1997, was
composed of Messrs. Dougery, Gabai and Kelen. The Audit Committee meets
periodically with the Company's independent auditors and Company financial
personnel, as a group or separately, to oversee the planning and performance of
the annual audit and to consult as to audit, accounting and financial matters.
The Audit Committee brings to the attention of the Company any recommendations
of the independent auditors for improvements in accounting procedures and
internal controls.
The Stock Option Committee is composed of Messrs. Kleist, Dougery and
Gabai. This committee, which acted by written consent on 11 occasions during
fiscal year 1997, administers the Company's 1980 Employee Stock Purchase Plan,
the 1984 Stock Incentive Plan and the 1994 Stock Incentive Plan.
Directors who are not employees of the Company receive fees in amounts
determined from time to time by the Board. During fiscal year 1997, directors
were paid at the rate of $10,000 per year plus $750 for each meeting of the
Board of Directors or its committees attended. In addition, a variable bonus
based upon Company profitability was paid quarterly totaling $3,250 for fiscal
year 1997. Directors who are employees of the Company do not receive any
additional compensation for their services as directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of May 12, 1997, regarding
the beneficial ownership of the Common Stock of the Company by (i) all persons
known by the Company to be beneficial owners of more than 5% of its outstanding
stock, (ii) each of the directors of the Company, and (iii) all officers and
directors of the Company as a group.
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SHARES OF RIGHTS TO ACQUIRE
COMMON STOCK BENEFICIAL PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNERSHIP(2) TOTAL OF CLASS
- ---------------- --------------------- ----------------- --------- --------
Robert A. Kleist 1,293,139 86,623 1,379,762 17.3%
17500 Cartwright Road
Irvine, CA 92623
Dimensional Fund Advisors Inc.(3) 430,825 -- 430,825 5.5%
1299 Ocean Ave., Suite 650
Santa Monica, CA 90401
John R. Dougery 46,293 28,348 74,641 0.9%
Erwin A. Kelen 22,713 30,373 53,086 0.6%
Ralph Gabai 5,625 14,173 19,798 0.2%
Bruce T. Coleman 3,000 6,073 9,073 0.1%
All officers and directors as
a group (17 persons including
the persons named above) 1,726,895 265,931 1,992,826 24.5%
- ----------------------
(1) Except as otherwise noted, the beneficial owners enjoy sole voting and
investment powers with respect to the shares indicated, subject to community
property laws where applicable.
(2) Includes shares which the party or group has the right to acquire by the
exercise of stock options which are currently exercisable or exercisable within
60 days after May 12, 1997.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 430,825 shares of Printronix,
Inc. common stock as of May 12, 1997, all of which shares are held in portfolios
of DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional serves
as investment manager. Dimensional disclaims beneficial ownership of all such
shares.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Securities Act of 1934, as amended, the
Company's officers and directors and holders of more than 10% of the Company's
Common Stock are required to file reports of their trading in Company equity
securities with the Securities and Exchange Commission.
Based solely on its review of the copies of such reports received by the
Company, or written representations from certain reporting persons, the Company
believes that during the fiscal year 1997 all Section 16 filing requirements
applicable to reporting persons were complied with.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors makes all decisions on compensation of the Company's
executives. During the 1997 fiscal year, the Board included four non-employee
directors, Bruce T. Coleman, John R. Dougery, Ralph Gabai and Erwin A. Kelen and
one employee director, Robert A. Kleist, Chief Executive Officer ("CEO") and
Chairman of the Board. Robert A. Kleist does not participate in the Board's
discussion of the Chief Executive Officer's compensation.
COMPENSATION PHILOSOPHY
The Board has adopted an executive compensation program designed to link
executive compensation to the performance of the Company and is based upon the
following principles:
o To provide the level of total compensation necessary to attract
and retain key executives critical to the long-term success of the
Company.
o To provide a compensation plan that rewards performance by
maintaining the base salary comparable to average salaries in the
industry while creating opportunities for higher total
compensation through performance bonuses and stock incentives.
o To properly balance compensation between short-term and long-term
results.
The executive total compensation consists of two elements: (A) an annual
component consisting of base salary and quarterly bonuses and (B) a long-term
component consisting of stock options and restricted stock.
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(A) Annual Component
Base Salary: Base salaries for executive officers are measured
against the industry norms for companies of
comparable revenue size. This data is gathered from
the American Electronics Association and the Radford
Associates Executive Compensation Surveys. The total
base salaries for the group of executive officers is
set to approximate industry norms. Executive
officers received no increase to base salary for
fiscal year 1997.
Quarterly Bonus: The Board has approved an incentive compensation
plan that is 80% based upon achievement of quarterly
Company profitability targets and 20% based upon
sales/revenue growth targets. The Board approves the
participation of executive officers and key
employees in the plan. The plan was established to
provide incentive compensation of varying percentage
levels of base salaries.
(B) Long-term Compensation
Stock Options: The Stock Option Committee of the Board of Directors
administers the 1984 Stock Incentive Plan (the "1984
Plan") and the 1994 Stock Incentive Plan (the "1994
Plan"), both of which provide for grants of stock
options and restricted stock awards. The 1984 Plan
and the 1994 Plan were established to advance the
interests of the Company and its stockholders by
strengthening the ability of the Company to attract
and retain in its employ persons of training,
experience and ability, and to furnish additional
incentives to officers, directors and key employees
of the Company. Stock options are granted
periodically at the fair market value of Printronix
stock on the date of grant. They are generally
exercisable in 25% increments over four years and
expire five years after the date of grant.
Restricted Stock: Restricted stock awards were granted in fiscal year
1991 to the CEO and two executive officers and in
fiscal year 1993 to two other executive officers.
The stock could vest in four equal annual
installments during a seven year window. Restricted
stock is subject to repurchase by the Company and
may not be disposed by the recipient until certain
restrictions established by the Board lapse. In
order for the restrictions to lapse and the
restricted stock to vest, the Company must achieve a
certain level of profitability. Failure to achieve
that level of profitability will result in
repurchase by the Company of the stock.
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CHIEF EXECUTIVE OFFICER COMPENSATION
The non-employee members of the Board of Directors review the CEO's total
compensation package. A comparison is made between the current total
compensation paid to the CEO and CEOs of companies of similar revenue size in
the Company's industry.
The CEO received no increase to base cash compensation for fiscal year
1997. The base cash compensation of the CEO was increased 4% and 11%,
respectively, during the 1996 and 1995 fiscal years but not increased at all in
fiscal years 1993 and 1994, nor were the voluntary reductions of 10% of base
salary from fiscal years 1991 and 1992 reinstated. The CEO's bonus was part of
the total Executive Bonus Plan and was paid quarterly for fiscal year 1997.
The Board may grant restricted stock awards to the CEO under the Company's
1994 Plan in order to balance the risk/reward element of the position. Specific
grants of stock options under the 1994 Plan are set forth in that Plan. During
the 1997 fiscal year, the CEO was granted a stock option of 15,750 shares at
fair market value on the date of grant under the 1994 Plan. There was no
restricted stock awarded to the CEO in fiscal year 1997.
BOARD OF DIRECTORS
Robert A Kleist, Chairman
Bruce T. Coleman
John R. Dougery
Ralph Gabai
Erwin A. Kelen
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SUMMARY COMPENSATION TABLE
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ANNUAL COMPENSATION LONG-TERM COMPENSATION
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AWARDS PAYOUTS
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NAME AND YEAR SALARY BONUS OTHER RESTRICTED SECURITIES LTIP ALL
PRINCIPAL ($) ($) ANNUAL STOCK UNDERLYING PAYOUTS OTHER
POSITION COMPENSATION AWARD(S) OPTIONS/ ($)(2) COMPENSATION
($)(1) ($)(2) SARS(#) ($)(3)
- ------------------------------------------------------------------------------------------------------------------
R.A. KLEIST 1997 208,000 135,669 15,600 15,750 243,363 7,300
President and CEO
1996 205,846 98,076 15,600 15,750 166,254 7,300
1995 201,551 89,633 16,200 15,750 144,375 7,542
- --------------------------------------------------------------------------------------------------------------
J.E. BELT 1997 162,188 72,040 11,700 0 178,833 4,510
Sr. Vice President- 1996 160,508 57,378 11,700 22,500 118,753 4,510
Engineering and
Assistant Corporate 1995 160,106 60,064 12,150 11,250 103,125 4,645
Secretary
- --------------------------------------------------------------------------------------------------------------
C.V. FITZSIMMONS 1997 141,388 62,801 11,700 0 178,833 1,811
Sr. Vice President- 1996 139,236 48,534 11,700 22,500 118,753 1,796
Worldwide
Manufacturing 1995 129,596 47,468 12,150 11,250 103,125 1,723
- --------------------------------------------------------------------------------------------------------------
G.L. HARWOOD 1997 162,188 72,040 11,700 0 178,833 2,440
Sr. Vice President 1996 160,508 57,378 11,700 22,500 118,753 2,440
Finance and IS,
Chief Financial 1995 158,906 59,663 12,150 11,250 103,125 2,483
Officer and
Corporate Secretary
- --------------------------------------------------------------------------------------------------------------
R.A. STEELE 1997 180,220(4) 55,394 11,700 0 178,833 2,331
Sr. Vice President -
Sales and 1996 154,865(4) 45,993 11,700 22,500 118,753 2,315
Marketing
1995 184,328(4) 48,015 12,150 11,250 103,125 2,288
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(1) Car allowance
(2) At March 28, 1997 the aggregate number of shares of restricted stock sold to
certain officers was 303,750 and the value of such shares, computed in
accordance with Securities and Exchange Commission regulations, was $3,678,716.
The shares were sold at their respective dates of grant (in fiscal years 1991
and 1993), and are subject to the Company's obligation to repurchase them if
certain performance criteria are not met in increments over a period of years.
Because of the attainment of the criterion in fiscal years 1995,1996 and 1997,
the Company's obligation to repurchase has lapsed as to a portion of those
shares. The amounts set forth above under the heading "LTIP Payouts" reflects
the value of those shares. That value is also included in the aggregate amount
set forth in this footnote.
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(3) All other compensation consists of 401(k) matching contributions and life
insurance.
(4) Includes $39,820, $15,919 and $46,906 in sales bonuses paid in 1997, 1996
and 1995, respectively.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
OPTION TERM (1)
- --------------------------------------------------------------------------------------------------------------
NAME NUMBER OF PERCENT OF TOTAL EXERCISE EXPIRATION 5%($) 10%($)
SECURITIES OPTIONS/SARS GRANTED OR BASE DATE
UNDERLYING TO PRICE
OPTIONS/SARS EMPLOYEES IN ($/SH)(2)
GRANTED(#) FISCAL YEAR
- --------------------------------------------------------------------------------------------------------------
R.A. KLEIST 15,750 29.51 14.75 2/07/02 64,223 141,927
- --------------------------------------------------------------------------------------------------------------
J.E. BELT
0 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
C.V. FITZSIMMONS
0 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
G.L. HARWOOD
0 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
R.A. STEELE
0 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
(1) The dollar amounts under these columns are based on 5% and 10% appreciation
rates in accordance with the rules of the Securities and Exchange Commission.
This table is not intended to predict future movement of the Company's stock
price.
(2) A stock option covering 15,750 shares was granted to Mr. Kleist at a fair
market value price of $14.75 per share on February 7, 1997.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR-END OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END (#) FY-END ($)(1)
- ----------------------------------------------------------------------------------------------------------
NAME SHARES ACQUIRED VALUE REALIZED ($) EXERCISABLE/ EXERCISABLE/
ON EXERCISE (#) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------
R.A. KLEIST 0 0 70,873/55,127 594,139/225,759
- ----------------------------------------------------------------------------------------------------------
J.E. BELT 16,875 192,906 5,624/22,501 5,624/67,501
- ----------------------------------------------------------------------------------------------------------
C.V. FITZSIMMONS 18,002 216,872 11,248/22,502 56,240/67,510
- ----------------------------------------------------------------------------------------------------------
G.L. HARWOOD 16,874 188,990 5,624/22,502 5,624/67,510
- ----------------------------------------------------------------------------------------------------------
R.A. STEELE 16,311 169,118 5,624/22,502 5,624/67,510
- ----------------------------------------------------------------------------------------------------------
(1) Based on the difference between the fair market value of $13.00 per share on
March 28, 1997 and the option exercise price.
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PERFORMANCE GRAPH
Set forth below is a table comparing the cumulative total stockholder
return on the Common Stock of the Company for the last five fiscal years with
the cumulative total return of companies on the National Association of
Securities Dealers Automated Quotations ("NASDAQ") U.S. Companies Index and Peer
Group Index over the same period of time. The Peer Group Index is a Computers,
Subsystems and Peripherals Industry Group created by Media General Financial
Services, Inc.
CUMULATIVE FIVE YEAR TOTAL RETURN AMONG NASDAQ
INDEX, COMPUTER PEER GROUP AND PRINTRONIX, INC.
Measurement Period NASDAQ
Fiscal Year 1997 Printronix Peer Group Index
- ---------------- ---------- ---------- -----
Measurement Point -3/28/92 $100 $100 $100
FYE 3/26/93 $113 $88 $112
FYE 3/25/94 $131 $100 $129
FYE 3/31/95 $473 $124 $137
FYE 3/29/96 $421 $178 $185
FYE 3/28/97 $450 $205 $206
Assumes $100 invested on March 28, 1992 in Printronix, Inc. Common Stock, the
NASDAQ U.S. Companies Index and Peer Group Common Stock. Total stockholder
returns assume reinvestment of dividends.
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PROPOSAL NUMBER 2:
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
On May 13, 1997, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to increase the authorized number of
shares from 12,000,000 to 30,000,000. The Board directed that this amendment be
submitted to the Stockholders for their consideration and approval at the Annual
Meeting.
As of May 13, 1997, 7,866,047 shares were outstanding. In addition, there
are options for 967,059 shares which have been granted and which, if exercised,
would cause 8,833,106 shares to be outstanding.
If Proposal Number 3 is adopted, there will be a total of 1,525,000 shares
reserved for issuance under the Company's 1994 Stock Incentive Plan. If options
for all of the remaining authorized shares under that plan are granted, a total
of 9,233,106 shares could ultimately be issued, assuming no further repurchases
of stock by the Company.
Prior to June 1994, the Company had a sufficient number of shares
authorized to satisfy its potential obligations under the Common Stock Rights
Agreement, to cover its anticipated needs under the 1994 Stock Incentive Plan
and for other possible valid corporate purposes set forth in the next paragraph.
However, as a result of two 50% stock dividends granted in June 1994 and
December 1996, the Company is now in a position where it has insufficient shares
authorized to satisfy those purposes.
The increase in the authorized number of shares will restore to the Company
flexibility by assuring the availability of sufficient authorized but unissued
shares of common stock for valid corporate purposes such as financings, stock
dividends, mergers, acquisitions and issuance of shares upon exercise of rights
under the Company's Common Share Rights Agreement, discussed below.
The Company has no current plan or commitment to issue shares of stock for
the purposes discussed above, other than under the 1994 Stock Incentive Plan,
including any plan or intention to issue shares as a takeover defense. In
theory, however, the additional authorized shares could be used to discourage
persons from attempting to gain control of the Company or make more difficult
the removal of management. For example, additional shares could be used to
dilute the voting power of shares then outstanding or issued to persons who
would support the Board in opposing a takeover bid or a solicitation in
opposition to management. The Company is not currently aware of any effort to
obtain control of the Company by means of a merger, tender offer, solicitation
in opposition to management, or otherwise. It should also be noted that holders
of the Company's stock do not have preemptive rights to purchase any additional
shares of stock that may be issued. Therefore, the issuance of additional shares
of stock could be disadvantageous to existing stockholders since such issuance
might serve to dilute their percentage interest in the Company.
COMMON SHARE RIGHTS AGREEMENT
The Company entered into a Common Share Rights Agreement, dated as of March
17, 1989, with Manufacturers Hanover Trust Company of California (as a result of
merger, now known as ChaseMellon Shareholder Services) and declared a dividend
of one common share purchase right for each outstanding
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share of common stock. The rights will be exercised only (a) if a person or
group has acquired or obtained the right to acquire 20% or more of the
outstanding shares of common stock; or (b) following commencement of a tender or
exchange offer for 30% of the then outstanding shares of common stock. The
Company is entitled to redeem the rights at $.01 per share (subject to
adjustment for prior stock dividends). The rights do not have voting or dividend
rights and, until they become exercisable, have no dilutive effect on the
Company's earnings. The Common Share Rights Agreement expires on March 17, 1999.
DELAWARE BUSINESS COMBINATION LAW
Section 203 of the Delaware General Corporation Law ("DGCL") imposes
restrictions on a Delaware corporation's engaging in business combinations
(including, for example, mergers, asset sales, issuance of stock and other
transactions resulting in a financial benefit to the beneficial owner of 15% or
more of a corporation's outstanding voting stock). These restrictions can have
the effect of impeding or discouraging persons from attempting to gain control
of the Company. The Company has not adopted an amendment to its Certificate of
Incorporation or By-Laws electing not to be governed by Section 203 of the DGCL.
If Proposal Number 2 is approved, Article Four of the Certificate of
Incorporation will read in its entirety as follows:
The total number of shares which this Corporation has the
authority to issue is 30,000,000. All such shares are of one
class and are Common Stock, $.01 par value per share.
Approval of Proposal Number 2 will require the affirmative vote of a
majority of the outstanding shares of common stock entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR PROPOSAL NUMBER 2.
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PROPOSAL NUMBER 3:
AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN
TO INCREASE SHARES AVAILABLE FOR AWARDS
On May 13, 1997, the Board of Directors approved an amendment to the
Company's 1994 Stock Incentive Plan (the "1994 Plan"). The Board directed that
this amendment be submitted to the Stockholders for their consideration and
approval at the Annual Meeting. The description of the 1994 Plan and of the
proposed amendment, which are set forth below, are qualified in all respects by
reference to the 1994 Plan as amended. A copy of the 1994 Plan including the
proposed amendment is attached to this Proxy Statement as Exhibit A.
The purpose of Proposal Number 3 is to increase the number of shares
authorized for issuance under the 1994 Plan from 1,125,000 to 1,525,000. Only
232,287 shares of the 1,125,000 originally authorized remained available for
grant of additional options as of May 13, 1997. All share numbers have been
adjusted to reflect both stock dividends declared since the adoption of the 1994
Plan.
The Board of Directors believes that stock options are an important and
useful incentive to attract and retain qualified persons to serve as officers,
directors and key employees of the Company and constitute an important element
of the compensation and incentive packages for key employees. The amendment will
therefore enhance the 1994 Plan and further its purposes by making additional
shares available for grant.
DESCRIPTION OF THE 1994 PLAN
The 1994 Plan authorizes the sale of up to a total of 1,125,000 shares of
the Company's Common Stock pursuant to any of three types of "Stock Awards": (i)
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) options that do not qualify as incentive
stock options ("nonqualified stock options"), and (iii) restricted stock
purchase agreements ("restricted stock").
Administration of the 1994 Plan is performed by the Board of Directors or a
committee composed of three or more directors appointed by the Board. Presently,
the 1994 Plan is administered by the Stock Option Committee of the Board of
Directors (the "Committee"), which is composed of three directors. The Committee
has authority to determine in its discretion which eligible persons are to be
granted Stock Awards, the number of shares covered by each Stock Award, whether
such awards are to be incentive stock options, nonqualified stock options, or
restricted stock, and certain other terms of each Stock Award. Provided,
however, that grants of nonqualified stock options to directors are not made by
the Committee. Rather, such grants are specified in the 1994 Plan itself.
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The Committee has indicated its intention that Stock Awards to purchase
shares of Common Stock will be issued under agreements which condition the
individual's right to exercise the award and retain the shares on his or her
continued service to the Company, or any parent or subsidiary of the Company,
during a period of four years from the date of grant. In the case of stock
options, the optionee generally will be able to purchase the shares in
installments only after each installment has vested. Under restricted stock
purchase agreements, it is intended that the individual will purchase the shares
at the time the Stock Award is granted; the shares will be restricted in the
sense that the individual's right to full beneficial ownership of the shares
will vest in installments. If the individual's service terminates for any
reason, the Company will be entitled to repurchase the unvested shares at the
individual's original purchase price. The Committee, however, has the authority
under the 1994 Plan to determine the terms of each stock option and each
restricted stock purchase agreement, which need not be identical.
Directors, officers, key employees and consultants of the Company or of any
present or future parent or subsidiary of the Company are eligible to
participate in the 1994 Plan. However, only employees are eligible to receive
incentive stock options.
The Committee determines the purchase price of the shares subject to each
Stock Award. The purchase price for shares subject to incentive stock options
may not be less than the fair market value of the Company's Common Stock on the
date the option is granted. Shares sold pursuant to nonqualified stock options
or restricted stock purchase agreements, however, may be at prices that are more
or less than the fair market value of the Common Stock on the date such Stock
Award is granted. There is no limitation under the 1994 Plan as to the amount of
the discount from fair market value at which such prices may be established. It
is the intention of the Committee, however, to offer purchase discounts only in
such amounts as it deems necessary or appropriate to attract or retain the
services of key people.
An incentive stock option granted to an optionee then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any parent or
subsidiary of the Company, must have an option price equal to at least 110% of
the fair market value of the shares subject to the option on the date of grant.
The fair market value of the stock for which an employee may be granted
incentive stock options under the 1994 Plan and all other incentive stock option
plans of the Company or any parent or subsidiary of the Company in any calendar
year may not exceed $100,000 plus certain carryover amounts from prior years.
The Committee has the power to set the period during which each option may
be exercised; provided, however, that no option may be exercised more than ten
years after the date of grant thereof. However, an incentive stock option
granted to a person then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or any parent or subsidiary of the Company, must be exercised
within five years from the date such incentive stock option is granted.
The purchase price for shares purchased under the 1994 Plan may be paid in
cash, or, with the consent of the Committee, by delivery of a full-recourse
promissory note, by the assignment and delivery of shares of Common Stock of the
Company having a fair market value equal to the purchase price, by any other
legal consideration acceptable to the Committee, or by any combination of the
above.
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A Stock Award may not be transferred or assigned, except by will or the
laws of descent and distribution, and during the lifetime of the recipient the
Stock Award may be exercised only by him or her.
In the event that there is a change in the Company's capital structure by
reason of merger, consolidation, reorganization, recapitalization, stock split,
stock dividend or otherwise, the number and kind of shares subject to the 1994
Plan and the rights under outstanding Stock Awards, both as to the number of
shares and the purchase price, will be adjusted appropriately. However, if the
Company is not the surviving corporation in any merger, consolidation,
acquisition of stock or property, separation or reorganization, each outstanding
option shall terminate, unless the surviving corporation assumes the outstanding
options or replaces them with options of comparable value. In the event that the
surviving corporation does not assume or replace outstanding options under the
1994 Plan, each optionee shall have the right to exercise his or her outstanding
options for up to the full number of covered shares.
The term of the 1994 Plan is ten years. The Board of Directors may
terminate or amend the 1994 Plan at any time, except that, without approval of
the Company's stockholders, the Board of Directors may not increase the
aggregate number of shares subject to the 1994 Plan or change the class of
persons eligible to receive Stock Awards under the 1994 Plan. Changes to the
1994 Plan altering grants of nonqualified stock options to directors may not
generally be made more frequently than every six months and then only with
stockholder approval.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options.
Under federal law, there are no tax consequences to either the Company or
the optionee upon grant or exercise of an incentive stock option. When the
optionee sells or otherwise disposes of the shares acquired upon the exercise of
an incentive stock option, the entire gain or loss realized will be treated as
capital gain or loss if the disposition occurs more than one year after the
option was exercised and more than two years after the date of grant of the
option. However, if the disposition occurs before either the one-year or two-
year periods have elapsed, any gain realized will be taxed as compensation
income in an amount equal to the difference between the option price and either
the fair market value of the shares at the time of exercise or the sale price,
whichever is less, and the balance, if any, will be treated as capital gain. Any
loss realized will be treated as capital loss. Special rules may apply in
specific circumstances, such as the use of already-owned stock to exercise an
incentive stock option. The Company will be entitled to a deduction for federal
income tax purposes only to the extent the optionee recognizes compensation
income upon the disposition of the shares.
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Nonqualified Stock Options and Restricted Stock.
There are no federal income tax consequences to either the Company or the
optionee upon the grant of a nonqualified stock option. Upon the exercise of a
nonqualified stock option or the purchase of restricted stock, the purchaser
will recognize compensation income in an amount equal to the difference between
the fair market value of the shares acquired on the date of purchase and the
purchase price for such shares, unless the shares acquired are subject to
repurchase by the Company and/or the purchaser is subject to suit pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In either such case, the purchaser would recognize compensation income in
an amount equal to the difference between the purchase price and the fair market
value of the shares acquired, as of the later of the date the Company's right to
repurchase the shares lapses or the date the purchaser is no longer subject to
suit pursuant to Section 16(b) of the Exchange Act.
However, a purchaser whose tax measurement date would be after the date of
purchase for either of the foregoing reasons, may elect to be taxed as of the
date of purchase by filing an election with the Internal Revenue Service
pursuant to Section 83(b) of the Code not later than 30 days after the date the
shares are purchased. If the Section 83(b) election is made, the purchaser will
not recognize any additional income as and when the Company's repurchase right,
if any, lapses or the purchaser is no longer subject to suit pursuant to Section
16(b) of the Exchange Act. The Company is entitled to a tax deduction in an
amount equal to the compensation income recognized by the purchaser. The
purchaser's basis in the shares acquired will be increased by the amount of
compensation income recognized. Any subsequent gain or loss recognized upon the
sale of such shares will be treated as capital gain or loss.
Approval of Proposal Number 3 will require the affirmative vote of a
majority of the outstanding shares of common stock entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR PROPOSAL NUMBER 3.
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The following table sets forth with respect to the 1994 Plan the number of
shares of Common Stock for which stock options have been granted from the
inception of such Plan through March 28, 1997. The options reflected in the
table are not necessarily indicative of the number of options that may be
granted in the future, or the individuals to whom such options may be granted,
pursuant to the 1994 Plan.
- -----------------------------------------------------------------------------------------------
1994 STOCK INCENTIVE PLAN
- -----------------------------------------------------------------------------------------------
NAME AND POSITION DOLLAR VALUE ($)(1) NUMBER OF UNITS
- -----------------------------------------------------------------------------------------------
R. A. KLEIST
President and CEO 10.646 63,000
- -----------------------------------------------------------------------------------------------
J. E. BELT
Sr. Vice President -
Engineering and
Assistant Corporate Secretary 9.444 33,750
- -----------------------------------------------------------------------------------------------
G. L. HARWOOD
Sr. Vice President -
Finance and IS,
Chief Financial Officer
and Corporate Secretary 9.444 33,750
- -----------------------------------------------------------------------------------------------
R. A. STEELE
Sr. Vice President -
Sales and Marketing 9.444 33,750
- -----------------------------------------------------------------------------------------------
C.V. FITZSIMMONS
Sr. Vice President -
Worldwide Manufacturing 9.444 33,750
- -----------------------------------------------------------------------------------------------
EXECUTIVE GROUP 10.045 198,000
- -----------------------------------------------------------------------------------------------
NON-EXECUTIVE DIRECTOR GROUP 10.646 64,800
- -----------------------------------------------------------------------------------------------
NON-EXECUTIVE OFFICER EMPLOYEE GROUP 9.967 488,134
- -----------------------------------------------------------------------------------------------
(1) Average exercise price per share. Actual benefit to plan participants cannot
be determined because it is a function of the fair market of the Company's
common stock at the time of exercise.
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, audited the financial
statements of the Company for the fiscal year ended March 28, 1997. A member of
Arthur Andersen LLP is expected to be present at the meeting, will have an
opportunity to make a statement if so desired and will be available to respond
to appropriate questions. Independent public accountants for the fiscal year
ending March 27,1998 will be selected by the Board of Directors after a review
and recommendation to the Board by the Audit Committee.
STOCKHOLDER PROPOSALS
Stockholders who wish to present proposals for action at the 1998 Annual
Meeting should submit their proposals in writing to the Secretary of the Company
at the address set forth on the first page of this Proxy Statement. Proposals
must be received no later than March 1,1998, for inclusion in next year's Proxy
Statement and proxy.
GENERAL INFORMATION
The cost of soliciting the enclosed form of proxy will be borne by the
Company. In addition, the Company will reimburse brokerage firms and other
persons representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners. Directors, officers
and regular employees of the Company may, without additional compensation, also
solicit proxies either personally or by telephone, telegram or special letter.
The Board of Directors presently knows of no other business which will come
before the meeting. However, if any other matters properly come before the
meeting, the persons named as proxies will vote on them in accordance with their
best judgment.
By Order of the Board of Directors
GEORGE L. HARWOOD
Senior Vice President, Finance & IS,
Chief Financial Officer and Secretary
July 10, 1997
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EXHIBIT A
(Underlined words indicate additions being made to the Plan. Words within
brackets [ ] are being deleted.)
(All share numbers have been adjusted to reflect both stock dividends declared
since the adoption of the 1994 Plan.)
PRINTRONIX, INC.
1994 STOCK INCENTIVE PLAN
AMENDED AND RESTATED
1. ESTABLISHMENT OF THE PLAN
(a) Purposes. The Printronix, Inc. 1994 Stock Incentive Plan
(the "Plan") is hereby established to advance the interests
of Printronix, Inc. (the "Company") and its stockholders by
strengthening the ability of the Company to attract and
retain in its employ persons of training, experience and
ability, and to furnish additional incentives to officers,
directors, employees and consultants of the Company upon
whose judgment, initiative and effort the successful conduct
and development of the business of the Company largely
depends.
(b) Types of Stock Awards. To accomplish these purposes,
the Company is authorized under this Plan to:
(i) grant stock options that qualify as incentive stock
options ("Incentive Stock Options") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"); (ii) grant stock options that do
not qualify as Incentive Stock Options ("Nonqualified
Stock Options"); and (iii) issue and sell shares of its
common stock subject to conditions and restrictions
relating to vesting and resale of the shares
("Restricted Stock").
Unless the context clearly indicates otherwise, the term "Option" shall
mean an option to purchase common stock of the Company and shall
include both Incentive Stock Options and Nonqualified Stock Options,
and the term "Stock Award" shall include both Options and Restricted
Stock.
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2. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment pursuant to the provisions of Section 9 hereof,
an aggregate of 1,525,000 [1,125,000] shares of the Company's common
---------
stock may be issued pursuant to Stock Awards granted under this Plan,
not more than 225,000 shares of which may be issued to directors of the
Company. Such shares may be either authorized and unissued shares of
common stock or shares of common stock issued and thereafter
repurchased by the Company. If any Option expires or terminates without
having been exercised in full, or shares of common stock are
repurchased by the Company pursuant to the terms of any Option
agreement or Restricted Stock agreement, the shares of common stock
allocable to the unexercised portion of such Option and any shares
repurchased shall again be available for issuance pursuant to the Plan.
3. ADMINISTRATION OF THE PLAN
(a) Committee. The Plan shall be administered by the Board of
Directors of the Company (the "Board") and/or by a committee
composed of at least three directors (the "Committee")
appointed from time to time by the Board. As hereinafter
used in this Plan, the term "Committee" shall refer to the
Board if no Committee is then designated.
(b) Powers of Committee. Subject to the express provisions of
the Plan and such terms and conditions as may be prescribed
by the Board, the Committee shall have authority in its
discretion to determine from among eligible persons those to
whom and the time or times at which Stock Awards may be
granted, the number of shares subject to each Stock Award,
whether each Stock Award shall be an Incentive Stock Option,
a Nonqualified Stock Option, Restricted Stock or a
combination thereof, the period for the exercise of each
Option and for the purchase of Restricted Stock, and all
other terms and conditions of each Stock Award. However, the
grant of Options to directors are specified in Section 8 of
the Plan and may not be varied by the Committee, absent
stockholder approval as provided in that section. Subject to
the express provisions of the Plan, and such terms and
conditions as may be prescribed by the Board, the Committee
shall also have complete authority to construe and interpret
the Plan, the terms of each Stock Award granted under the
Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations
necessary or advisable in the administration of the Plan.
Minutes shall be kept of all meetings of the Committee and
all actions taken by the Committee without a meeting shall
be evidenced by written consents.
A-2
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4. ELIGIBILITY
(a) Incentive Stock Options. Only key employees (excluding
directors who are employees) of the Company or of any
present or future parent or subsidiary corporation of the
Company shall be eligible to receive Incentive Stock Options
under the Plan. The aggregate fair market value (determined
as of the time the Option is granted) of the shares of
common stock with respect to which Incentive Stock Options
are exercisable for the first time by any Optionee during
any calendar year (under this Plan and all other plans of
the Company and its parent and subsidiary corporations)
shall not exceed $100,000.
(b) Nonqualified Stock Options. Key employees, directors and
officers (whether or not employees), and consultants of the
Company or of any present or future parent or subsidiary
corporation of the Company shall be eligible to receive
Nonqualified Stock Options under the Plan.
(c) Restricted Stock. Key employees, directors, officers
(whether or not employees), and consultants of the Company
or of any present or future parent or subsidiary corporation
of the Company shall be eligible to purchase Restricted
Stock under the Plan.
5. AGREEMENTS
Stock Awards granted pursuant to the Plan shall be evidenced by written
agreements (which need not be identical) in such form as the Committee
shall from time to time establish. Each agreement shall specify the
number of shares for which the Stock Award is granted, the purchase
price per share and, subject to the express provisions of the Plan,
such other terms and conditions as the Committee in its discretion
shall determine. Agreements evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to qualify such
Incentive Stock Options as "incentive stock options" under Section 422
of the Code.
6. PURCHASE PRICE
(a) Incentive Stock Options. The purchase price of the shares
subject to each Incentive Stock Option shall be set by the
Committee; provided, however, that the purchase price per
share shall not be less than the fair market value of such
shares on the date such Incentive Stock Option is granted;
and provided further, that in the case of an Incentive Stock
Option granted to an individual then owning (within the
meaning of Section 424 (d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the
Company or any parent or subsidiary of the Company, the
purchase price per share shall not be less than 110% of the
fair market value of such shares on the date such Incentive
Stock Option is granted.
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(b) Nonqualified Stock Options and Restricted Stock. The
purchase price of the shares subject to each Nonqualified
Stock Option and the purchase price for each share of
Restricted Stock sold pursuant to this Plan shall be set by
the Committee; provided, however, that the purchase price
per share of the shares subject to each Nonqualified Stock
Option shall not be less than the fair market value of such
shares on the date such Nonqualified Stock Option is
granted.
(c) Fair Market Value. For the purpose of this Plan, "fair
market value" of a share of common stock on a specified date
shall be the closing price of a share of common stock on the
principal exchange on which shares of the Company's common
stock are listed on such date, or if shares were not traded
on such date, then on the next preceding day during which a
sale occurred; or, if the shares are not so listed but are
traded in the over-the-counter market, the closing sale
price in the NASDAQ National Market System or the average of
the closing bid and asked prices on such date as reported by
NASDAQ or similar entity, or if none of the above is
applicable, the value of a share as established by the
Committee for such date using any reasonable method of
evaluation.
7. OTHER TERMS AND CONDITIONS
(a) Consideration and Payment for Shares. Each agreement shall
state the form of consideration and method of payment for
the shares subject to such agreement, and may include cash,
the purchaser's personal check, promissory notes, shares of
common stock of the Company owned by the purchaser, any
other legal consideration acceptable to the Committee, or by
any combination of the foregoing. Any shares of common stock
of the Company tendered to the Company in payment or partial
payment of the purchase price shall be valued at the fair
market value on the date of exercise of the Option or
purchase of Restricted Stock.
(b) Exercise of Options. Each agreement evidencing an Option
shall specify the period during which the Option may be
exercised; provided, however, that no Option may be
exercised more than ten years after the date of grant
thereof. Notwithstanding the foregoing, an Incentive Stock
Option granted to a person then owning (within the meaning
of Section 424 (d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company
or any parent or subsidiary of the Company, may not be
exercised later than the expiration of five years from the
date such Incentive Stock Option is granted.
(c) Non-Transferability. No Stock Award shall be transferable
or assignable by the person to whom such Stock Award is
granted otherwise than by will or by the laws of descent and
distribution. During the lifetime of the person to whom a
Stock Award is granted, the Stock Award shall be exercisable
only by him.
A-4
26
(d) Termination of Relationship with the Company. Whenever the
relationship with the Company of the holder of a Stock Award
is terminated by the Company for cause, all such Stock
Awards shall immediately terminate and, in the case of Stock
Options, shall cease to be exercisable.
(e) Additional Terms and Conditions. The Committee may impose
such additional terms and conditions upon the grant of any
Option or the sale of any Restricted Stock, including
without limitation, repurchase rights in favor of the
Company, restrictions on the vesting of shares, and
restrictions upon transfer, as the Committee in its
discretion shall determine.
8. SPECIAL PROVISIONS RELATING TO DIRECTORS
(a) Administration. The timing, amount, exercise price and
restrictions on exercise of grants to directors of
Nonqualified Stock Options are established under the Plan.
Administration of the Plan with respect to directors, to the
extent necessary, will be provided by the Board of Directors
of the Company. No discretion concerning decisions shall be
afforded to any person who is not a "disinterested" person
under Rule 16b-3, promulgated by the Securities and Exchange
Commission. Options granted to directors must comply with
the applicable provisions of Rule 16b-3 or any successor
thereto and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for
the maximum exemption from Section 16 of the Securities
Exchange Act of 1934.
(b) Number of Shares Granted. Upon adoption of the Plan, and
annually thereafter, each director is granted an Option to
purchase shares of common stock. Further, upon first
becoming a director of the Company each new director is
granted an additional option to purchase shares of common
stock; provided, however, that no such additional grant
shall be made to a director who will within the following
six months become entitled to receive a grant of an Option.
The number of shares for each grant shall be 4,050 as to
outside directors and 15,750 as to employee directors.
(c) Exercise Price. The per share exercise price of Options
shall be the fair market value of the Company's common stock
on the date of grant.
(d) Time of Exercise. Options granted to directors of the
Company shall become exercisable in four equal annual
installments commencing one year after the date of grant.
(e) Amendment. The provisions in this Section 8 of the Plan
may not be amended more frequently than once every six
months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act, or the rules
thereunder.
A-5
27
9. ADJUSTMENTS UPON CHANGES IN STOCK AND OTHER EVENTS
(a) In the event that the shares of common stock of the
Company are increased, decreased, changed into or exchanged
for a different number or kind of shares of the Company or
of another corporation by reason of merger, consolidation,
reorganization, recapitalization, reclassification,
combination or exchange of shares, stock split-up or stock
dividend, or otherwise, (i) the aggregate number and kind of
shares subject to the Plan shall be adjusted appropriately;
and (ii) rights under outstanding Stock Awards granted under
the Plan, both as to the number of shares and the purchase
price, shall be adjusted appropriately.
(b) In the event of dissolution or liquidation of the Company,
or any merger, consolidation, acquisition of property or
stock, separation or reorganization in which the Company is
not the surviving corporation, each outstanding Option shall
terminate, unless the surviving corporation assumes the
outstanding Options or replaces them with new options of
comparable value in accordance with the provisions of
Section 424 (a) of the Code; provided, however, that should
the surviving corporation not assume or replace the
outstanding Options under the Plan, each optionee shall have
the right, immediately prior to such dissolution,
liquidation, merger, consolidation, acquisition of property
or stock, separation or reorganization, to exercise his or
her outstanding Option in full, without regard to any
installment exercise provisions, to the extent that it shall
not have been exercised.
(c) The foregoing adjustments and the manner of application of
the foregoing provisions shall be determined by the
Committee (which may provide for the elimination of
fractional share interests) and shall be final and binding
upon all optionees, the Company and all interested persons.
10. CONDITIONS TO ISSUANCE OF STOCK
The Company shall not be required to issue or deliver any certificate
for shares of stock purchased upon the exercise of an Option, or any
shares of Restricted Stock sold pursuant to the Plan, or any portion
thereof, prior to the completion of any registration or other
qualification of such shares under any federal or state law or under
the rulings or regulations of the United States Securities and Exchange
Commission or any other governmental regulatory body, which the
Committee shall in its sole discretion deem necessary or advisable.
11. RIGHTS AS STOCKHOLDER
A person to whom a Stock Award has been granted shall have no rights or
privileges as a stockholder with respect to any shares covered by such
Stock Award until certificates representing such shares have been
issued by the Company.
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12. OTHER COMPENSATION PLANS
The adoption of this Plan shall not affect any other stock option or
incentive or other compensation plan in effect for the Company or any
parent or subsidiary of the Company, nor shall the Plan preclude the
Company from establishing any other forms of incentive or compensation
plans or arrangements for employees, officers, directors or consultants
of the Company or any parent or subsidiary of the Company.
13. EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective upon the earlier of either its adoption
by the Board or its approval by the stockholders of the Company.
However, unless the Plan is approved by the stockholders of the Company
within 12 months before or after the date of the Board's initial
adoption of the Plan, the Plan and all Stock Awards granted hereunder
shall be cancelled. No Option may be exercised or Restricted Stock sold
prior to and unless such stockholder approval is obtained. Unless
previously terminated by the Board, the Plan shall terminate ten years
after it becomes effective, and no Stock Award may be granted under the
Plan thereafter, but such termination shall not affect any Stock Award
granted prior to such date.
14. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board of Directors may at any time terminate, and may at any time
and from time to time and in any respect amend or modify the Plan;
provided, however, that no such action of the Board without approval of
the stockholders of the Company may (i) increase the aggregate number
of shares subject to the Plan except as contemplated in Section 9
hereof, or (ii) change the standards of eligibility to receive a Stock
Award under the Plan. Neither the termination, amendment or
modification of the Plan shall, without the consent of the holder of a
Stock Award, alter or impair any rights or obligations under any Stock
Award granted prior to the date of termination, amendment or
modification.
A-7
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THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF FIVE DIRECTOR NOMINEES AND FOR PROPOSALS
NUMBERS 2 AND 3. THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO CUMULATE AND
DISTRIBUTE VOTES FOR ANY OR ALL OF THE NOMINEES NAMED BELOW FOR WHICH THE
AUTHORITY TO VOTE HAS NOT BEEN WITHHELD.
PROPOSAL NUMBER 1: To elect five directors to hold office until the next
annual meeting of stockholders.
[ ] FOR all nominees listed to the right [ ] WITHHOLD AUTHORITY to vote for (INSTRUCTIONS: To withhold authority to vote
(except as marked to the contrary) all nominees listed to the right for any individual nominee strike through the
nominee's name in the list below.)
R. Kleist, B. Coleman, J. Dougery,
R. Gabai, E. Kelen
PROPOSAL NUMBER 2: To approve an amendment to the Certificate of Incorporation
to increase the number of authorized shares from 12,000,000
to 30,000,000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL NUMBER 3: To approve an amendment to the 1994 Stock Incentive Plan to
increase shares available for awards.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL NUMBER 4: In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting of any adjournment thereof.
Please sign exactly as name appears hereon.
___________________________________________
Date:________________________________, 1997
PLEASE MARK, DATE AND SIGN AS YOUR NAME
APPEARS HEREON AND RETURN IN THE ENCLOSED
ENVELOPE. IF ACTING AS EXECUTOR,
ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC. YOU
SHOULD SO INDICATE WHEN SIGNING. IF THE
SIGNER IS A CORPORATION, PLEASE SIGN IN THE
FULL CORPORATE NAME, BY DULY AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON. IF
SHARES ARE HELD JOINTLY, EACH STOCKHOLDER
NAMED MUST SIGN.
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN BLUE OR BLACK INK.
30
PRINTRONIX, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 12, 1997
The undersigned hereby appoints Robert A. Kleist and George L. Harwood as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side hereof, all
the shares of common stock of Printronix, Inc. held of record by the
undersigned on June 23, 1997, at the annual meeting of stockholders to be held
on August 12, 1997 or any adjournment thereof.