SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section240.14a-11(c) or
Section240.14a-12
TRIDEX CORPORATION
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
-----------------------------------------------------------------------
(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 14(a)-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
/ / Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
TRIDEX CORPORATION
61 WILTON ROAD
WESTPORT, CONNECTICUT 06880
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 12, 2000
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Tridex Corporation (the "Company"), a Connecticut corporation, will
be held on Monday, June 12, 2000, at 10:00 a.m., Eastern Daylight Savings Time,
at The Westport Inn, 1595 Post Road East, Westport, Connecticut for the
following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To consider and act upon a proposal to elect four Directors to serve
until the next Annual Meeting of Shareholders or until their successors
have been duly elected and qualified;
(2) To consider and act upon a proposal to ratify the selection of
PricewaterhouseCoopers LLP, Certified Public Accountants, as independent
public accountants of the Company for the year ending December 31, 2000;
and
(3) To receive the reports of Officers (without taking any action thereon)
and transact such other business as may legally come before the Meeting.
Shareholders of record at the close of business on May 5, 2000 are entitled
to notice of and to vote at the Meeting. The transfer books will not be closed
for the Meeting.
The Company's Proxy Statement, Form of Proxy and Annual Report on Form 10-K
for the year ended December 31, 1999 are submitted herewith.
By Order of the Board of Directors,
Seth M. Lukash
CHAIRMAN
Westport, Connecticut
May 15, 2000
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, THE COMPANY REQUESTS THAT YOU
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT
PURPOSE. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
TRIDEX CORPORATION
61 WILTON ROAD
WESTPORT, CONNECTICUT 06880
------------------------
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
------------------------
SOLICITATION AND REVOCATION OF PROXY
The following information concerning the enclosed proxy and matters to be
acted upon under the authority of such proxy is furnished to shareholders of
Tridex Corporation (the "Company") in connection with the solicitation by the
Company of proxies to be voted at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on Monday, June 12, 2000.
Any shareholder that executes and returns the enclosed proxy has the power
to revoke the same any time prior to it being voted.
All shares of Tridex common stock represented by properly executed proxies
in the enclosed form that are received in time for the Annual Meeting and have
not been revoked will be voted in accordance with the instructions indicated in
such proxies, unless the proxy is mutilated or otherwise received in such form
or at such time as to render it not votable. The proxy is in ballot form so that
a specification may be made to grant or withhold authority to vote for the
election of Directors and to indicate separate approval or disapproval as to
each of the other matters presented to shareholders. All of the proposals will
be presented by the Board of Directors. The shares represented by the proxy will
be voted for the election of each of the Directors named thereon, unless
authority to do so is withheld. With respect to each proposal presented to
shareholders other than the election of Directors, the shares represented by the
proxy will be voted in accordance with the specifications made. Where a choice
is not so specified, the shares represented by the proxy will be voted "FOR"
such proposals. In addition, the persons designated in such proxy will have
discretion to vote upon any procedural matter relating to the Annual Meeting,
including the right to vote for any adjournment or postponement thereof proposed
by the Board of Directors, including a postponement and adjournment to solicit
additional proxies. Abstentions will be treated as present and entitled to vote
and therefore will have the effect of a vote against a matter. A broker non-vote
on a matter will be considered not entitled to vote on the matter and will not
be counted in determining whether a matter requiring approval of a majority of
the shares present and entitled to vote has been approved.
A majority of the shares entitled to vote, present in person or represented
by proxy, will constitute a quorum to transact business at the Annual Meeting. A
plurality of votes cast is required to elect Directors. A majority of the votes
cast is required for the approval of all other proposals to be considered by the
shareholders at the Annual Meeting. Any proxy in the enclosed form may be
revoked by the shareholder executing it at any time prior to its exercise by
giving written notice thereof to the Secretary of Tridex, by signing and
returning a later dated proxy or by voting in person at the Annual Meeting.
Attendance at the Annual Meeting will not in and of itself constitute the
revocation of a proxy.
This Proxy Statement is being mailed to shareholders on or about May 15,
2000.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the close of business on May 5, 2000, the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting, there were 6,368,289 shares of common stock issued and outstanding.
Each share entitles the holder to cast one vote on each matter submitted for
shareholder vote at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial ownership of
the Company's common stock as of May 5, 2000 for each person who is known by the
Company to own beneficially more than five percent of the Company's issued and
outstanding common stock, each person who is a Director, a nominee for Director,
or an individual named in the Summary Compensation Table, and all Directors and
Executive Officers of the Company as a group. The persons named in such table
have furnished the information set forth opposite their respective names:
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP(a) CLASS(b)
- ------------------------ ----------------- --------
MANAGEMENT BENEFICIAL OWNERS
Seth M. Lukash.............................................. 602,705(c) 9.35%
Graham Y. Tanaka............................................ 137,516(d) 2.15%
Paul J. Dunphy.............................................. 55,500(e) *
Thomas R. Schwarz........................................... 20,500(e) *
Dennis J. Lewis............................................. 137,014(f) 2.05%
Daniel A. Bergeron.......................................... 0(g) *
Gary H. German.............................................. 77,256(g) *
John MacWillie.............................................. 0(g) *
Samuel J. Villanti.......................................... 10,000(h) *
All Directors and Executive Officers as a group (5 953,235(i) 14.69%
persons)..................................................
OTHER BENEFICIAL OWNERS
Paul J. Smith............................................... 714,000 11.21%
85 North Hill Side Drive,
North Myrtle Beach, SC 29582
Massachusetts Mutual Life Insurance Company & Related 1,085,714(j) 15.15%
Parties...................................................
1295 State Street,
Springfield, MA 01111
Dimensional Fund Advisors, Inc.............................. 318,700(k) 5.00%
1299 Ocean Avenue,
Santa Monica, CA 90401
- ------------------------
(a) Except as otherwise indicated, each of the persons named in the table has
sole voting power and sole investment power with respect to the shares set
forth opposite his name.
(b) An asterisk denotes beneficial ownership of less than 1%.
(c) Includes 80,000 shares exercisable under the Company's 1997 Long Term
Incentive Plan (the "1997 Plan"). Mr. Lukash's address is care of the
Company at 61 Wilton Road, Westport, CT 06880.
(d) Includes 2,000 shares held of record by Mr. Tanaka's sons, and 13,000 shares
issuable upon exercise of options granted under the Company's Non-employee
Directors' Stock Plan (the "Directors' Plan") which are currently
exercisable or become exercisable within 60 days.
2
(e) Includes 13,000 shares issuable upon exercise of options granted under the
Director's Plan which are currently exercisable or become exercisable within
60 days.
(f) Includes 1,000 shares issuable upon exercise of options granted under the
Director's Plan which are currently exercisable or become exercisable within
60 days.
(g) Vested options terminated immediately upon the officer's leaving the employ
of Tridex.
(h) Represents 10,000 vested options issued under the 1997 Plan which remain
exercisable until May 18, 2000 pursuant to Mr. Villanti's Stay Bonus
Agreement with the Company.
(i) Represents beneficial ownership of the directors and officers of the Company
as of April 24, 2000, and includes 120,000 shares exercisable under the 1997
Plan and 40,000 shares issuable upon exercise of options granted under the
Directors' Plan which are currently exercisable or become exercisable within
60 days.
(j) Represents shares beneficially owned by Massachusetts Mutual Life Insurance
Company, MassMutual Corporate Investors, MassMutual Participation Investors
and MassMutual Corporate Value Partners Limited (the "MassMutual Investors")
and includes warrants to purchase 800,000 shares of common stock at
$2.03125.
(k) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 318,700 shares of common
stock as of December 31, 1999, 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 Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers and persons who beneficially own more than 10%
of a registered class of the Company's equity securities ("10% Owners") to file
with the Securities and Exchange Commission ("SEC") and the Nasdaq Stock Market
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Directors, Executive Officers and 10%
Owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, or written representations that no other
reports were required for those persons, the Company believes that, during the
fiscal year ended December 31, 1999, the Company's Directors, Executive Officers
and persons who beneficially own more than 10% of the Company's equity
securities filed all reports required under Section 16(a) of the Securities
Exchange Act of 1934.
ELECTION OF DIRECTORS
At the Annual Meeting, four persons are to be elected to hold office as
Directors, to serve until the next Annual Meeting or until their successors are
duly elected and qualified. In the absence of instructions to the contrary, the
persons named in the enclosed form of proxy will vote such proxy "FOR" the
election of the four nominees named below. Should any of the nominees become
unavailable, which is not anticipated, it is intended that proxies will be voted
for the election of such other person as the Board of Directors may recommend in
place of such nominee. There is a vacancy on the Board of Directors, which the
Board of Directors intends to fill with a qualified candidate, but no candidate
for this vacancy has yet been identified.
Seth M. Lukash
Paul J. Dunphy
Graham Y. Tanaka
Thomas R. Schwarz
3
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS
SETH M. LUKASH, 54, has been a senior executive officer of the Company since
1977 and has been a Director since 1979. He has served as Chairman of the Board
of Directors of the Company since November 1988, Chief Executive Officer since
August 1987 and President and Chief Operating Officer since June 1989. In
addition, Mr. Lukash has assumed the responsibilities of Chief Financial Officer
of the Company since the departure of the Company's former CFO in
February 2000. Mr. Lukash previously served as President of the Company from
September 1983 to August 1988 and as Chief Operating Officer from
September 1983 to August 1987. Mr. Lukash has been a director of Tanaka Capital
Management since 1996 and has been a director or F.A.S.T. (Food Automation
Service Techniques, Inc.) since 1995.
PAUL J. DUNPHY, 80, has been a Director of the Company since 1989.
Mr. Dunphy has been a management consultant from 1988 until the present.
Mr. Dunphy was Chairman of the Board, Chief Executive Officer and President of
Towle Manufacturing Company from 1985 through 1988 and was Executive Vice
President of Anchor Hocking, a glass and metal manufacturer, from 1970 through
1984. Mr. Dunphy is a Director of Midwest Fabricating Co. and Four Johns
Corporation. He is also a member of the Board of Trustees of Mt. Ida College,
the President's Advisory Council of Bentley College and the Executive Advisory
Board for Ohio University.
GRAHAM Y. TANAKA, 52, has been a Director of the Company since 1988.
Mr. Tanaka has been President of Tanaka Capital Management, Inc., an investment
management firm, since 1986. From 1980 to 1986, Mr. Tanaka served as Chairman of
Milbank, Tanaka & Associates. He is also President of The Tanaka Funds, Inc.
Mr. Tanaka is a director of TransAct Technologies Incorporated ("TransAct"), a
manufacturer of transaction based printers which was a subsidiary of the Company
through March 31, 1997. Mr. Tanaka is also a member of the Board of Directors of
the Japanese American National Museum.
THOMAS R. SCHWARZ, 63, has been a Director of the Company since 1995.
Mr. Schwarz was Chairman of Grossman's Inc., a retailer of building materials,
from 1990 to 1994, when he retired. Mr. Schwarz was President, Chief Operating
Officer and a director of Dunkin' Donuts Incorporated, a food service company,
from 1980 to 1990. He is the Chairman of the Board of Directors of TransAct and
a director of Lebhar-Friedman Publishing Company, Yorkshire Restaurants and
Foilmark, Inc., a manufacturer of hot stamping equipment and supplies. He is a
Trustee of the Tanaka Growth Fund. Mr. Schwarz was a board member of The
Timberland Company, an overseer of WGBH Educational Foundation, Inc. (New
England Public Broadcasting), the David Littman Foundation, The Walnut Hill
School and co-chairman of the Inner City Scholarship Fund.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During 1999, the Board of Directors held eight meetings. Each incumbent
Director attended more than 75% of (a) the total number of meetings of the Board
of Directors, and (b) the total number of meetings of all committees of the
Board of Directors on which he served.
The Board of Directors has an Audit Committee, which held four meetings
during 1999. The Audit Committee is comprised of Messrs. Paul J. Dunphy,
Chairman, Graham Y. Tanaka and Thomas R. Schwarz. The functions of the Audit
Committee are to participate in the selection of and review the findings of
independent public accountants, review internal audit activities, consider
accounting policies selected by management and review internal accounting
controls and such other matters relating to the Company's financial and
accounting practices as such Committee deems appropriate.
The Board of Directors has a Compensation and Stock Option Committee
comprised of Messrs. Thomas R. Schwarz, Chairman, Graham Y. Tanaka and Paul J.
Dunphy, which has the responsibility for approving the compensation arrangements
for senior management of the Company. The Compensation and Stock Option
Committee approves the adoption of any compensation plans in which Executive
Officers and Directors of the Company are eligible to participate, as well as
the granting of stock options
4
or other benefits under such plans and under the Company's 1997 Plan and 1998
Non-Executive Long Term Incentive Plan (the "1988 Plan"). The Compensation and
Stock Option Committee held three meetings during 1999.
The Board of Directors has a Nominating Committee comprised of
Messrs. Graham Y. Tanaka, Chairman, Paul J. Dunphy and Thomas R. Schwarz. The
Nominating Committee has the responsibility for recommending to the Board of
Directors nominees for election to the Board. The Nominating Committee will not
consider nominees recommended by shareholders. The Nominating Committee held one
meeting during 1999.
COMPENSATION OF DIRECTORS
During 1999, each outside Director of the Company received as compensation
for services rendered and expenses incurred (a) $2,000 for each fiscal quarter
served as Director, (b) $750 for each Board of Directors' meeting attended and
(c) $300 for each Board of Directors' Committee meeting attended. Directors
receive $250 for each telephonic meeting, and Chairmen of Committees receive
$600 for each committee meeting attended.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
Pursuant to requirements under federal securities laws, the Compensation and
Stock Option Committee of the Company is required to provide a report on the
compensation and benefits provided to the Company's Executive Officers. The
following report describes the function and composition of the Compensation and
Stock Option Committee, sets forth the compensation policies and goals of the
Company, and provides a description of how compensation for executive officers
is determined.
THE COMPENSATION AND STOCK OPTION COMMITTEE
There are three members of the Compensation and Stock Option Committee, all
of whom are outside directors: Thomas R. Schwarz, Chairman, Graham Y. Tanaka and
Paul J. Dunphy. The Compensation and Stock Option Committee: (a) establishes the
general compensation policies of the Company; (b) approves the hiring and firing
of all officers, subsidiary and division presidents and all staff reporting
directly to the Chief Executive Officer of the Company; and (c) approves the
compensation plans and specific compensation levels for all executive officers,
including subsidiary and division presidents and all staff reporting directly to
the Chief Executive Officer of the Company, except that the compensation of any
employee director is determined by the full Board based on the recommendation of
the Compensation and Stock Option Committee. The Compensation and Stock Option
Committee also approves the issuance of all options to employees of the Company
and its subsidiaries under the Company's 1997 Plan and 1998 Plan.
COMPENSATION POLICIES AND GOALS
The primary goals of the Company's compensation policies are to help retain,
motivate and reward management of the Company and its subsidiaries, while, at
the same time, aligning their interests closely with those of the Company and
its shareholders. The Company seeks to attract and retain management by offering
a competitive total compensation package. The Company also believes it is
important to the retention of its management that it provide benefits which
accrue to the benefit of, and provide security to, its management over the long
term. To align the interests of management more closely with those of the
Company as a whole and reward individual initiative and effort, the Company
seeks to promote performance-based compensation where contribution to the
Company as a whole is rewarded. Through the use of performance-based plans that
reward attainment of subsidiary, division or Company goals, the Company seeks to
foster an attitude of teamwork. The Company also believes that the use of equity
ownership is an important tool to ensure that the efforts of management are
consistent with the objectives of its
5
shareholders and through the use of stock options seeks to promote increased
ownership by management of the Company.
The Company and the Compensation and Stock Option Committee have tried to
achieve the above goals utilizing publicly available information regarding
competitive compensation. The Compensation and Stock Option Committee retains an
independent consultant to ensure that compensation for the Company's management
is competitive, meets the above-stated objectives and is consistent for all
members of management of the Company and its subsidiaries.
COMPENSATION COMPONENTS
At present, the compensation of the executive officers of the Company
consists of a combination of salary, cash bonuses, stock options and
participation in the Company's 401(k) plan, as well as the provision of health
and other insurance benefits typically offered to corporate executives. Several
executive officers are parties to agreements with the Company that provide for
severance payments under certain circumstances. These agreements are described
under "Employment Contracts, Termination of Employment and Change-In-Control
Arrangements" for the officers listed in the Summary Compensation Table.
SALARIES: In general, base salaries were fixed at the beginning of the year
for the subsequent twelve months based on the Compensation and Stock Option
Committee's assessment of competitive base salaries. During 1999, the annual
base salary of Seth M. Lukash, Chairman, President, Chief Executive Officer and
Chief Operating Officer of the Company, was $282,000.
CASH BONUSES: The Company maintains an incentive compensation plan for all
salaried employees of the Company and its subsidiaries, including key
executives, which provides for the payment of cash bonuses. Under the plan, an
incentive target, as well as individual goals and objectives, are fixed for each
employee at the beginning of the year and bonuses are paid shortly after the end
of the year. In order to earn any incentive compensation under the plan, certain
financial goals, including gross profit, operating profit, return on capital
employed and sales, must be met. The percentage of the incentive target to be
paid varies based on the level of attainment of the financial goals; the
incentive target to be paid ranges from 50% to 150%, except that for
corporate-based participants, the range is 50% to 100%. Other components of the
award calculation include the individual incentive target, which ranges from 20%
to 50% of base salary for key employees, and a rating of the participant's
performance versus individual objectives during the plan period.
For 1999, the goals for Mr. Lukash related principally to the attainment of
a specific operating profit level and the development of various strategic
acquisition and growth plans. His target bonus was 50% of base salary. No bonus
was earned in 1999. For 2000, Mr. Lukash's target bonus remains 50% of his base
salary.
STOCK OPTIONS: Under the Company's 1998 and 1997 Plans, options are granted
by the Compensation and Stock Option Committee. Under guidelines adopted by the
Committee in 1995, eligible employees (certain classifications of salaried
employees of the Company and its subsidiaries who have been determined by the
Committee to qualify for an incentive of equity ownership) are granted an
initial award on their date of hiring for a fixed number of shares depending on
their level, which vests over three years. In each year following the initial
award, eligible employees may be granted an annual award in varying amounts
depending on their level and individual performance.
During 1999, a total of 50,000 options were granted to Executive Officers of
the Company, none of which were granted to Seth M. Lukash.
On March 10, 1997, Mr. Lewis and Mr. German, and along with Paul Wolf, all
of whom were shareholders of Ultimate Technology Corporation ("Ultimate") prior
to its acquisition by Tridex in
6
January 1993 (collectively, the "Ultimate Officers") entered into a Stock
Incentive Compensation Agreement (the "SIC Agreement") which terminated the
Employee Performance Compensation Agreement entered into among the Ultimate
Officers, Ultimate and the Company at the time of the acquisition. Under the
terms of the SIC Agreement, 100,000 shares of the Company's common stock were
issued to the Ultimate Officers, of which 50,000 shares were pledged to Ultimate
(the "Pledged Stock") pursuant to a Pledge Agreement, which expires upon the
satisfaction of certain service obligations. On January 2, 1998 the Company
released to the Ultimate Officers 25,000 shares from escrow. Effective
September 30, 1998, Mr. Lewis voluntarily terminated his employment with
Ultimate and, in accordance with the provisions of the SIC Agreement, forfeited
11,500 shares. The balance of the Pledged Stock was released to Messrs. German
and Wolf in January 1999.
OTHER BENEFIT PLANS: Executive Officers of the Company may participate in
the nondiscriminatory Tridex Corporation 401(k) Retirement Plan. No decisions
with respect to this plan are made by the Compensation and Stock Option
Committee.
The Committee strives to assure that the executive compensation serves the
best interests of the shareholders and the Company.
Compensation and Stock Option Committee
Thomas R. Schwarz, Chairman
Graham Y. Tanaka
Paul J. Dunphy
7
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the four most highly compensated Executive Officers
who earned more than $100,000 in salary and bonus in 1999 for each of the last
three fiscal years.
LONG TERM
COMPENSATION(c)
ANNUAL ---------------
COMPENSATION(a) ALL
------------------- SECURITIES OTHER
NAME AND FISCAL SALARY BONUS UNDERLYING COMPENSA-
PRINCIPAL POSITION YEAR ($) (b)($) OPTIONS(#) TION(c)($)
- ------------------------------------------ -------- -------- -------- --------------- ----------
Seth M. Lukash............................ 1999 282,000 0 0 5,000
Chairman of the Board, President, Chief 1998 276,000 0 0 4,170
Executive Officer and Chief Operating 1997 270,000 135,000 80,000 1,055
Officer
Gary H. German............................ 1999 157,600 3,000 0 22,393
Vice President, Sales and Marketing, 1998 135,375 11,824 0 36,512
Ultimate Technology Corporation 1997 132,598 12,917 45,000 239,833
John MacWillie (d)........................ 1999 150,000 0 25,000 3,036
VP Technology & Strategic Bus. Devel., 1998 96,634 0 45,000 1,250
Tridex Corporation
Daniel A. Bergeron (e) 1999 150,000 0 25,000 1,786
Vice President and Chief Financial 1998 117,692 0 60,000 563
Officer, Tridex Corporation
Samuel J. Villanti (f) 1999 145,000 3,000 0 2,033
President, Ultimate Technology Corporation 1998 68,265 0 30,000 0
- ------------------------
(a) Neither the Chief Executive Officer nor any of the other Executive Officers
named in the table received perquisites or other personal benefits in an
amount which exceeded 10% of their salary plus bonus during 1999.
(b) The bonus amounts are payable pursuant to the Company's discretionary
incentive plan described more fully in the Report of the Compensation and
Stock Option Committee of the Board of Directors.
(c) In March 1997, Mr. German received 14,500 shares of the Company's common
stock under a Stock Incentive Compensation Agreement with the Company. On
the date of grant, the Company's common stock price was $16.4375.
Accordingly, Mr. German's compensation was $238,344. Mr. German received an
additional 7,250 shares in January 1998, at a price of $4.8125, for
additional compensation of $34,890, and a final 7,250 shares in
January 1999, at a price of $2.8125, for additional compensation of $20,391.
All other amounts reported in this column consist entirely of Company
contributions under the Company's 401(k) Plan.
(d) Mr. MacWillie joined the Company in May 1998 and resigned from the Company
in February 2000.
(e) Mr. Bergeron joined the Company in March 1998 as its Chief Financial Officer
and resigned from the Company in February 2000.
(f) Mr. Villanti joined the Company on October 12, 1998. He remained as
President of Ultimate until the sale of Ultimate on February 18, 2000, and
is no longer an employee of Tridex.
8
OPTION GRANTS IN 1999
Except as set forth below, no options to purchase the Company's common stock
were granted during the fiscal year ended December 31, 1999 to the named
Executive Officers:
INDIVIDUAL GRANTS
-----------------------------------------------
% OF TOTAL
OPTIONS
GRANTED
TO EXERCISE
EMPLOYEES OR EXPIRA-
OPTIONS IN BASE PRICE TION GRANT DATE
NAME GRANTED(a) THE YEAR ($/SHARE) DATE VALUE (b)
- ---- ---------- ---------- ---------- -------- ----------
Daniel A. Bergeron......................... 25,000 13.48% $2.03125 3/26/09 $17,490
John MacWillie............................. 25,000 13.48% $2.03125 3/26/09 $17,490
- ------------------------
(a) All options were granted under the Company's 1997 Plan. In general, options
granted under the 1997 Plan are granted at an exercise price equal to 100%
of the fair market value of the common stock on the date of grant, expire
ten years from the date of grant, and become exercisable on the first
through third anniversaries of the date of grant.
(b) The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions: expected volatility of 43%; expected life of 3 years; risk-free
interest rate of 5.1%; and common stock dividend rate of 0%.
AGGREGATE OPTION EXERCISES IN 1999 AND VALUES AT DECEMBER 31, 1999
No options to purchase the Company's common stock were exercised during the
fiscal year ended December 31, 1999.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY
DECEMBER 31, 1999 OPTIONS ($)(a)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Seth M. Lukash................................. 53,332 26,668 -- --
Gary H. German................................. 30,000 15,000 -- --
John MacWillie................................. 15,000 55,000 -- --
Dan Bergeron................................... 20,000 65,000 -- --
Samuel Villanti................................ 10,000 20,000 -- --
- ------------------------
(a) The closing price for the Company's common stock as reported by the Nasdaq
Stock Market on December 31, 1999 was $1.625. Consequently, none of the
options were in-the-money as of December 31, 1999.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
Under the terms of an Employment Agreement dated December 2, 1996 between
Seth M. Lukash and the Company, Mr. Lukash serves as Chairman and Chief
Executive Officer for a term of two years, which term renews automatically on a
monthly basis. Under the terms of the agreement, if Mr. Lukash's employment is
terminated other than for cause Mr. Lukash shall be entitled to continue to
receive his then current annual base salary, his annual target bonus for the
year of termination, group insurance, and other benefits for a period of two
years payable in monthly installments. If Mr. Lukash's employment is terminated,
other than for cause, within one year of a change in control of the Company,
Mr. Lukash shall be entitled to receive, for a period of three years, his then
current annual base salary and annual target
9
bonus, payable in monthly installments, and continuation of all benefits. In
addition, the Company shall cause immediate vesting of all options and rights
under the Company's stock plans.
Effective as of February 18, 2000, in connection with the sale of Ultimate,
Tridex entered into a Stay Bonus Agreement with Samuel J. Villanti. This
Agreement provides that the Company shall pay to Mr. Villanti a stay bonus in
the amount of $100,000.00, payable in one lump sum cash payment on the earlier
of (i) a Change in Control of the Company (as defined in the Agreement), or
(ii) May 18, 2001, subject to certain conditions to payment set forth in the
Agreements. The Company also awarded Mr. Villanti stock options to purchase
30,000 shares of Company common stock, no par value, under the 1997 Plan,
exercisable in full six (6) months after the date of grant, or upon a Change in
Control of the Company, if earlier.
10
CORPORATE PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total return on
the Company's common stock from December 31, 1994 through December 31, 1999 with
the CRSP Total Return Index for the NASDAQ Stock Market (US), the NASDAQ
Computer Manufacturer Stocks, and the NASDAQ Computer Manufacturer and Data
Processing Services Stocks. The graph assumes that $100 was invested on
December 31, 1994 in each of the Company's common stock, the CRSP Total Return
Index for the NASDAQ Stock Market (US), the NASDAQ Computer Manufacturer Stocks,
and the NASDAQ Computer Manufacturer and Data Processing Services Stocks and the
and that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
TRIDEX CORPORATION COMMON STOCK,
THE CRSP TOTAL RETURN INDEX FOR THE NASDAQ STOCK MARKET (US),
THE NASDAQ COMPUTER MANUFACTURER STOCKS,
AND THE NASDAQ COMPUTER MANUFACTURER AND DATA PROCESSING SERVICES STOCKS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
Tridex Corporation Common Stock $100.00 $119.15 $219.15 $82.98 $48.94 $27.66
CRSP Total Return Index for the NASDAQ Stock Market (US) 100.00 141.34 173.90 213.07 300.44 556.91
NASDAQ Computer Manufacturer Stocks 100.00 156.90 209.63 253.50 549.74 1,165.43
NASDAQ Computer Manufacturer and Data Processing Services
Stocks 100.00 152.28 187.94 230.88 411.98 907.96
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
Tridex Corporation Common Stock................ $100.00 $119.15 $219.15 $82.98 $48.94 $ 27.66
CRSP Total Return Index for the NASDAQ Stock
Market (US).................................. 100.00 141.34 173.90 213.07 300.44 556.91
NASDAQ Computer Manufacturer Stocks............ 100.00 156.90 209.63 253.50 549.74 1,165.43
NASDAQ Computer Manufacturer and Data
Processing Services Stocks................... 100.00 152.28 187.94 230.88 411.98 907.96
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to 1997, the Company made a personal loan to Seth M. Lukash, Chairman
of the Board, President, Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer and a Director of the Company. During 1999, the highest
outstanding balance of the loan to Seth M. Lukash was $125,000. The loan is
evidenced by a demand note and bears interest at an annual rate equal to the
rate charged by the Company's senior lender on its line of credit. The Company's
Board of Directors has agreed to defer payment of the principal balance of the
loan. Interest on the loan is paid monthly. As of April 24, 2000, the principal
amount outstanding under the loan was $125,000.
11
On March 14, 1997, the Company accepted a note in the amount of $801,375.00
from Seth M. Lukash in payment of the exercise price of options and warrants.
The note is a full recourse note, bearing interest payable quarterly at 7.577%
and secured by a pledge of shares acquired through the exercise of the options
and warrants. The highest amount outstanding under the note during 1999 was
$801,375.00. As of April 24, 2000, the principal balance of this note was
$600,000. Mr. Lukash has agreed to repay $350,000 of the outstanding balance of
the note by June 30, 2000.
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
At the Annual Meeting, approval and ratification of the Board of Directors'
selection of PricewaterhouseCoopers LLP as independent public accountants to
perform the audit of the financial statements of the Company and its
subsidiaries for the year ending December 31, 2000 will be considered. The Board
of Directors recommends the approval of PricewaterhouseCoopers LLP. Proxies
solicited by the Company will be voted "FOR" this approval unless shareholders
specify a contrary choice in their proxies. Representatives of the firm of
PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting to
respond to appropriate questions and will have the opportunity to make a
statement if they so desire.
SECURITY HOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholder proposals for inclusion in the 2001 Proxy Statement and form of
proxy for the Annual Meeting of Shareholders to be held in 2001 must be received
by the Secretary of the Company on or before December 18, 2000. If the date of
the next Annual Meeting is subsequently advanced by more than thirty calendar
days or delayed by more than ninety calendar days from the date such meeting is
scheduled to be held under the Company's By-laws, the Company will inform
shareholders of such change and the date by which proposals of shareholders must
be received. It is suggested that such proposals be sent by Certified
Mail-Return Receipt Requested.
ANNUAL REPORT
A copy of the Company's Securities and Exchange Commission Annual Report on
Form 10-K, including the financial statements and the schedules thereto, is
enclosed herewith.
GENERAL
The Board of Directors is not aware of any matter which is to be presented
for action at the Annual Meeting other than the matters set forth herein. Should
any other matter arise that requires a vote of the shareholders, the proxies
confer upon the persons named in the enclosed form of proxy the authority to
vote in respect of any such other matter in accordance with the recommendation
of management.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company may use
their personal efforts, without additional compensation, to obtain proxies. The
Company will also request persons, firms and corporations holding shares in
their names, or owned by others, to send this proxy material to and obtain
proxies from such beneficial owners and will reimburse such holders for their
reasonable expenses in doing so.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION IS APPRECIATED.
May 15, 2000
12
TRIDEX CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 12, 2000.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TRIDEX
CORPORATION
The undersigned shareholder of Tridex Corporation, Westport, Connecticut,
does hereby nominate, constitute and appoint Seth M. Lukash, Paul J. Dunphy,
Thomas R. Schwarz and Graham Y. Tanaka, or any of them, with full power to act
alone, my true and lawful attorney-in-fact with full power of substitution, for
me and in my name, place and stead to vote all of the Common Stock of Tridex
Corporation standing in my name on its books on May 5, 2000, at the Annual
Meeting of its shareholders to be held at The Westport Inn, Westport,
Connecticut, on June 12, 2000 at 9:00 a.m., or at any adjournment thereof, with
all powers the undersigned would possess if personally present as follows:
This proxy, when properly executed, will be voted for the undersigned as
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted for Proposals 1, 2 and 3.
1. ELECTION OF DIRECTORS
Nominees: Seth M. Lukash
Paul J. Dunphy
Thomas R. Schwarz
Graham Y. Tanaka
(check one box) / / For / / Against / / Abstain
For, except vote withheld from the following nominee(s):
2. APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
A proposal to approve and ratify the selection of
PricewaterhouseCoopers LLP as independent public accounts of Tridex Corporation
for the fiscal year ending December 31, 2000.
(check one box) / / For / / Against / / Abstain
3. In their discretion, Seth M. Lukash, Paul J. Dunphy, Thomas R. Schwarz
and Graham Y. Tanaka, or any of them are authorized to vote upon such other
business as may properly come before the meeting, or any adjournment or
postponement thereof.
---------------------------------------------------------------
(CONTINUED AND SIGNED ON REVERSE SIDE)
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED IN THE MANNER DIRECTED AND, IF NO INSTRUCTIONS TO THE
CONTRARY ARE INDICATED, WILL BE VOTED FOR THE SLATE OF NOMINEES TO THE BOARD OF
DIRECTORS, AND FOR THE APPROVAL OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF TRIDEX CORPORATION FOR THE FISCAL YEAR ENDING DECEMBER 31,
2000.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
You may revoke this Proxy at any time by forwarding to Tridex Corporation a
subsequently dated Proxy received by Tridex prior to the Annual Meeting.
Returned proxy cards will be voted (1) as specified on the matters listed above;
(2) in accordance with the Board of Directors' recommendations where no
specification is made; and (3) in accordance with the judgment of the proxies on
any other matters that may properly come before the meeting.
20
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.
THIS PROXY MUST BE SIGNED EXACTLY AS Dated: _____________, 2000
THE NAME OF THE SHAREHOLDER(S) APPEARS
ON THIS CARD. Signature:_____________________
Signature:_____________________
(if held jointly)
NOTE: When policies are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If signing on behalf of a corporation, please sign the full corporate
name by president or other authorized officer. If signing on behalf of a
partnership, please sign the partnership name by authorized person.
21