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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.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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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[ ] 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.
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PRINTRONIX(R)
14600 MYFORD ROAD
P.O. BOX 19559
IRVINE, CALIFORNIA 92623
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 22, 2001
The Annual Meeting of Stockholders of Printronix, Inc. will be held at
the principal executive offices of the Company, located at 14600 Myford Road,
Irvine, California, 92623 on Wednesday, August 22, 2001 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 1994 Stock Incentive Plan to
increase by 500,000 the number of shares available for awards,
and to remove specific grants of options to directors and to
substitute discretionary grants on any basis permitted by Rule
16b-3 promulgated by the Securities and Exchange Commission.
3. 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 25, 2001
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 18, 2001
GEORGE L. HARWOOD
Senior Vice President, Finance & IS,
Chief Financial Officer and Secretary
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PRINTRONIX(R)
14600 MYFORD ROAD
P.O. BOX 19559
IRVINE, CALIFORNIA 92623
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 22, 2001
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 Wednesday, August 22, 2001 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 18, 2001.
The close of business on June 25, 2001 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 5,846,839 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 the other proposal 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 or her principal occupation, age, the year he or she became a
director of the Company, and additional biographical data.
ROBERT A. KLEIST
Mr. Kleist, age 72, 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.
BRUCE T. COLEMAN
Mr. Coleman, age 62, 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. Mr.
Coleman served as interim CEO for several software technology companies over the
last ten years. Mr. Coleman is a director of Websense Inc. and Stamps.com.
JOHN R. DOUGERY
Mr. Dougery, age 61, has served as a director of the Company since 1978.
Mr. Dougery was a general partner of Dougery & Wilder and its predecessor from
1981 to 1997, a partnership specializing in venture capital investments. Since
1997, Mr. Dougery has been independently engaged in the business of selecting
and managing venture capital investments. Mr. Dougery is a director of Exodus
Communications, Inc.
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CHRIS WHITNEY HALLIWELL
Ms. Halliwell, age 52, has served as a director of the Company since
1998. Ms. Halliwell is currently principal of Chris Halliwell, a technology
marketing consulting firm, and an instructor for the Executive Education
Marketing curriculum at the Caltech Industrial Relations Center in Pasadena,
California. Prior to starting her own consulting business, she was managing
partner at Regis McKenna, Inc., where she was a consultant since 1984, a
marketing director for Intel Corporation and a sales representative for IBM.
ERWIN A. KELEN
Mr. Kelen, age 66, 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 five meetings during the
fiscal year ended March 30, 2001. 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 2001,
was composed of Messrs. Dougery, Coleman 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. Dougery and Kelen.
This committee, which acted by written consent on 18 occasions during fiscal
year 2001, administers 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 2001, 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. Directors who are employees of
the Company do not receive any additional compensation for their services as
directors.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of May 25, 2001, 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.
RIGHTS TO
SHARES OF COMMON ACQUIRE
STOCK BENEFICIALLY BENEFICIAL PERCENT
BENEFICIAL OWNER OWNED (1) OWNERSHIP (2) TOTAL OF CLASS
---------------- ------------------ ------------- --------- --------
Robert A. Kleist 1,210,622 39,377 1,249,999 21.0%
14600 Myford Road
P.O. Box 19559
Irvine, CA 92623
Dimensional Fund Advisors Inc.(3) 546,327 -- 546,327 9.2%
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401
Wellington Management Co. 437,300 -- 437,300 7.4%
75 State Street
Boston, MA 02109
Brinson Partners, Inc. 373,100 -- 373,100 6.3%
209 S. LaSalle Street
Chicago, IL 60604
Awad Asset Management, Inc. 355,000 -- 355,000 6.0%
250 Park Ave., 2nd Floor
New York, NY 10177
John R. Dougery 80,667 10,127 90,794 1.5%
Erwin A Kelen 51,313 10,217 61,440 1.0%
Bruce T. Coleman 15,100 10,127 25,227 0.4%
Chris Whitney Halliwell 4,000 5,065 9,065 0.2%
All officers and directors as a 1,704,097 245,047 1,949,144 31.7%
group (14 persons including the
persons named above)
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(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 25, 2001.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), an investment
advisor registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to certain
other commingled group trusts and separate accounts. These investment companies,
trusts and accounts are the "Funds." In its role as investment advisor or
manager, Dimensional possesses voting and/or investment power over the
securities of the Issuer described in this schedule that are owned by the Funds.
All securities reported in this schedule are owned by the Funds. Dimensional
disclaims beneficial ownership of such securities.
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 2001 all Section 16 filing requirements
applicable to reporting persons were complied with.
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BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors makes all decisions on compensation of the
Company's executives. During the 2001 fiscal year, the Board included four
non-employee directors, Bruce T. Coleman, John R. Dougery, Chris Whitney
Halliwell 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:
- To provide the level of total compensation necessary to attract
and retain key executives critical to the long-term success of
the Company.
- 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 Company performance bonuses and stock
incentives.
- 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.
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(A) Annual Component
Base Salary: Base salaries for individual 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.
Quarterly Bonus: The Board has approved an incentive compensation plan
for officers that is partly based upon achievement of
quarterly Company profitability targets and partly
based upon revenue growth targets. The Board approves
the participation of executive officers 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 1994 Stock Incentive Plan (the "1994
Plan"), which provides for grants of stock options
and restricted stock awards. The 1994 Plan was
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 to ten years after the date of
grant.
Restricted Stock: Pursuant to restricted stock awards previously
granted to certain officers, such persons acquired
stock of the Company which was subject to repurchase
by the Company in certain circumstances. The
consideration for the shares was in the form of
promissory notes. Effective March 26, 1999, those
stock awards were amended such that all shares
previously purchased are now vested and the Company
no longer has a right to repurchase. The promissory
notes were also amended to provide for payment on or
after March 26, 2001. During the period ending March
26, 2001, the shares remained pledged to the Company
as security for repayment of the notes. Effective
April 2, 2001, the promissory notes were again
amended to extend the term to April 2, 2003 and to
stop the accrual of interest.
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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.
From October 2000, Robert A Kleist, CEO, voluntarily took a 12.5%
reduction in base salary which lowered the amount to a rate of $278,611 per
year. This was done in response to the Company's financial goals not being met
and Mr. Kleist's personal philosophy to pay for performance. Prior to this
salary reduction, his base cash compensation was below that of his peers within
the comparable industry.
The Board may grant restricted stock awards to the CEO under the
Company's 1994 Plan in order to balance the risk/reward element of the position.
No restricted stock awards were granted in the last fiscal year. Specific grants
of stock options under the 1994 Plan are set forth in that Plan. During the 2001
fiscal year, the CEO was granted a nonqualified stock option of 15,750 shares at
fair market value on the date of grant under the 1994 Plan.
BOARD OF DIRECTORS
Robert A Kleist
Bruce T. Coleman
John R. Dougery
Chris Whitney Halliwell
Erwin A. Kelen
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SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------------- ---------------------------------------------
AWARDS PAYOUTS
OTHER ----------------------- ------- ALL
ANNUAL RESTRICTED SECURITIES LTIP OTHER
NAME AND COMPEN- STOCK UNDERLYING PAY- COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD(s) OPTIONS/ OUTS SATION
POSITION YEAR ($) ($) ($)(1) ($)(2) SARs(#) ($)(2) ($)(3)
- -------- ---- ------- ------- ------- ---------- ---------- ------ -------
R.A. KLEIST 2001 297,298 38,043 15,600 15,750 0 8,180
President and CEO 2000 288,223 176,052 15,600 15,750 0 9,553
1999 258,180 142,185 15,600 15,750 50,000 13,280
T.A. CHAPMAN(*) 2001 179,953 14,726 11,700 49,250 0 2,690
Sr. Vice President - 2000 171,796 62,554 11,600 25,500 0 2,892
Engineering and
Chief Technical
Officer
C.V. FITZSIMMONS 2001 179,951 14,954 11,700 42,500 0 2,690
Sr. Vice President - 2000 172,537 69,146 11,700 11,250 0 2,892
Worldwide 1999 164,796 59,660 11,700 11,250 37,500 3,440
Manufacturing
R. GABAI 2001 181,885 14,884 11,700 46,550 0 3,980
Sr. Vice President - 2000 171,729 68,828 11,700 11,250 0 4,392
Marketing 1999 93,357 20,044 6,975 11,250 37,500 3,394
G.L. HARWOOD 2001 211,542 17,579 11,700 42,500 0 3,290
Sr. Vice President - 2000 202,826 96,285 11,700 11,250 0 3,549
Finance and IS, Chief 1999 193,720 70,199 11,700 11,250 37,500 3,627
Financial Officer and
Corporate Secretary
R.A. STEELE(**) 2001 195,356 16,234 11,700 11,250 0 3,290
Sr. Vice President - 2000 187,841 75,356 11,700 11,250 0 3,549
Sales 1999 182,257(4) 79,829 11,700 11,250 37,500 3,609
(*) Mr. Chapman became an executive officer of the Company on April 3, 1999.
(**) Mr. Steele has not been an officer of the Company since March 30, 2001.
(1) Car allowance
(2) On March 30, 2001, the aggregate number of shares of restricted stock sold
to certain officers was 266,000 and the value of such shares, computed in
accordance with Securities and Exchange Commission regulations, was $1,504,576.
The shares were sold at their respective dates of grant (in fiscal years 1998
and 1999), and were subject to the Company's obligation to repurchase them if
certain performance criteria were not met in increments over a period of years.
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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Effective March 26, 1999, the Company and various of its employees and
directors who had purchased restricted stock in fiscal years 1998 and 1999
entered into agreements amending the prior purchase agreements and related
promissory notes. During the period ending March 26, 2001, the shares remained
pledged to the Company as security for repayment of the notes. Effective April
2, 2001, the promissory notes were again amended to extend the term to April 2,
2003 and to stop the accrual of interest.
(3) All other compensation consists of 401(k) matching contributions and life
insurance.
(4) Includes $14,623 in sales bonuses paid in 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES PERCENT OF TOTAL STOCK PRICE
UNDERLYING OPTIONS/SARs EXERCISE APPRECIATION FOR
OPTIONS/ GRANTED TO OR BASE OPTION TERM (1)
SARs EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(#) FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
- ---- ---------- ---------------- --------- ---------- ------- -------
R.A. KLEIST 15,750 2.13 7.125 2/8/06 31,400 68,511
T.A. CHAPMAN 6,750 0.92 10.625 7/13/02 7,351 15,061
11,250 1.52 10.625 7/13/05 33,025 72,975
31,250 4.22 5.375 3/14/11 105,635 267,699
C.V. FITZSIMMONS 11,250 1.52 10.625 7/13/05 33,025 72,975
31,250 4.22 5.375 3/14/11 105,635 267,699
R. GABAI 4,050 0.55 10.625 7/13/02 4,411 9,037
11,250 1.52 10.625 7/13/05 33,025 72,975
20,000 2.70 5.375 3/14/03 11,019 22,575
11,250 1.52 5.375 3/14/11 38,028 96,372
G.L. HARWOOD 11,250 1.52 10.625 7/13/05 33,025 72,975
31,250 4.22 5.375 3/14/11 105,635 267,699
R.A. STEELE 11,250 1.52 10.625 7/13/05 33,025 72,975
(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) All stock options were granted at the fair market value price on the date of
grant.
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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 IN-
UNEXERCISED THE-MONEY
OPTIONS/SARs OPTIONS/SARs
AT FY-END (#) AT FY-END ($)(1)
------------- ----------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ------------------ ------------- ----------------
R.A. KLEIST 0 0 39,377/39,373 0/0
T.A. CHAPMAN 0 0 22,001/70,749 0/8,791
C.V. FITZSIMMONS 2,250 9,376 16,876/59,374 0/8,791
R. GABAI 0 0 23,178/65,222 0/8,791
G.L. HARWOOD 0 0 16,876/59,374 0/8,791
R.A. STEELE 0 0 16,876/28,124 0/0
(1) Based on the difference between the fair market value of $5.6563 per share
on March 30, 2001 and the option exercise price.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee, which acts pursuant to an Audit Committee Charter
approved by the Board of Directors, a copy of which is included as Exhibit A to
this proxy statement, oversees Printronix's reporting process on behalf of the
Board of Directors. The Audit Committee consists of three non-employee
directors, each of whom is independent as defined by Rule 4200 (a) (14) of the
National Association of Securities Dealers' listing standards.
Management is responsible for the financial reporting process, including
the system of internal control, and for the preparation of consolidated
financial statements in accordance with generally accepted accounting
principles. Printronix's independent auditors are responsible for auditing those
financial statements. The Audit Committee's responsibility is to monitor and
review these processes. While they have experience in business and financial
matters, as required by the Audit Committee Charter, the members of the Audit
Committee are not professionally engaged in the practice of accounting or
auditing and are not experts in the fields of accounting or auditing, including
with respect to auditor independence. The Audit Committee relies, without
independent verification, on the information provided to it and on the
representations made by management and the independent auditors.
The Audit Committee has reviewed and discussed with management of
Printronix the audited financial statements for the 2001 fiscal year; discussed
with the independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards), as modified or supplemented;
received a written disclosure letter from Printronix's independent certified
public accountants as required by Independent Standards Board Standard No. 1
(Independence Discussions with Audit Committees), as modified or supplemented,
and has discussed with the independent certified public accountants the
independent account's independence; and based on the preceding review and
discussion contained in this paragraph, recommended to the Board of Directors
that the audited financial statements be included in Printronix's Annual Report
on Form 10-K for the 2001 fiscal year for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
John R. Dougery, Chairman
Bruce T. Coleman
Erwin A. Kelen
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AUDIT FEES
The Company was billed approximately $135,500 for professional services
by Arthur Andersen LLP, our independent auditors. These fees were for the audit
of the Company's annual financial statements for the most recent fiscal year
ended March 30, 2001, and interim reviews of the financial statements included
in the Company's Quarterly Reports on Form 10-Q during the last fiscal year.
ALL OTHER FEES
The Company was billed approximately $261,750 for all other services
rendered by Arthur Andersen LLP for the most recent fiscal year ended March 30,
2001. The majority of these fees relate to tax consulting and compliance
requirements.
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PERFORMANCE GRAPH
Set forth below is a line graph 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 Computer
Peripherals Industry Group created by Media General Financial Services, Inc.
CUMULATIVE FIVE YEAR TOTAL RETURN AMONG NASDAQ INDEX,
COMPUTER PEER GROUP AND PRINTRONIX, INC.
Fiscal Year 2001 Printronix Computer Peripherals NASDAQ Market Index
- ---------------- ---------- -------------------- -------------------
Measurement Point -3/29/96 $100 $100 $100
FYE 3/29/96 $100.00 $100.00 $100.00
FYE 3/27/97 $106.80 $101.22 $111.87
FYE 3/27/98 $136.58 $141.86 $169.07
FYE 3/26/99 $99.61 $153.32 $220.94
FYE 3/31/00 $163.27 $390.02 $406.86
FYE 3/30/01 $46.46 $144.05 $167.46
Assumes $100 invested on March 29, 1996 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 TO THE 1994 STOCK INCENTIVE PLAN TO
INCREASE BY 500,000 THE NUMBER OF SHARES AVAILABLE FOR
AWARDS AND TO REMOVE SPECIFIC GRANTS OF OPTIONS TO
DIRECTORS AND TO SUBSTITUTE DISCRETIONARY GRANTS ON
ANY BASIS PERMITTED BY RULE 16b-3 PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION
On June 6, 2001, 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 B.
The purposes of Proposal Number 2 are twofold: The first purpose is to
increase by 500,000 the number of shares authorized for issuance under the 1994
Plan. No shares remain available for grant as of May 25, 2001. All share numbers
have been adjusted to reflect both stock dividends declared since the adoption
of the 1994 Plan. The second purpose is to allow awards to be made to directors
on the same basis as to officers and employees, provided the grant also
satisifes the requirements of Rule 16b-3, promulgated by the Securities and
Exchange Commission, as that rule may be amended from time to time. That rule
currently allows grants to directors if approved by the entire board of
directors, if the transaction is approved by the stockholders or if certain
holding requirements are met by the recipient of the award. Treating directors
the same as officers and employees will give the board of directors greater
flexibility in fashioning awards designed to adequately compensate directors
consistent with those of other companies similarly situated.
The Board of Directors believes that stock awards 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.
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DESCRIPTION OF THE 1994 PLAN
The 1994 Plan authorizes the sale of up to a total of 2,125,000 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.
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 upon achievement of certain performance criteria. 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.
16
19
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.
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.
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20
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.
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.
18
21
The affirmative vote of the holders of a majority of the shares of
common stock represented and voting at the meeting is required for approval of
the amendment to the 1994 Stock Incentive Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR PROPOSAL NUMBER 2.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, audited the
financial statements of the Company for the fiscal year ended March 30, 2001. 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 29, 2002 have been 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 2002 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 earlier than May 21, 2002 and no later than June 20, 2002,
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. Original
solicitation of proxies by mail may be supplemented by telephone, telegram,
special letter or personal solicitation by directors, officers or other regular
employees of the Company or, at the Company's request, Mellon Investor Services,
LLC a professional proxy solicitation firm. No additional compensation will be
paid to directors, officers or other employees for such services, but Mellon
Investor Services, LLC will be paid its customary fee, estimated to be about
$9,500.
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 18, 2001
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22
EXHIBIT A
PRINTRONIX, INC. AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the Board of Directors to be known as the Audit
Committee. The Audit Committee shall be composed of Directors who are
independent of the management of the Corporation and are free of any
relationship that, in the opinion of the Board of Directors, would interfere
with their exercise of independent judgment as a Committee member.
COMPOSITION
The Audit Committee shall be comprised of three or more Directors as determined
by the Board, each of whom shall be independent Directors, and free from any
relationship that in the opinion of the Board, would interfere with the exercise
of his or her independent judgment as a member of the Committee. All members of
the Committee shall have a working familiarity with basic finance and accounting
practices, and at least one member of the Committee shall have accounting or
related financial management expertise.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
PURPOSE
The primary function of the Audit Committee is to assist the Board of Directors
in fulfilling its oversight responsibilities by reviewing: the financial reports
and other financial information provided by the Corporation to any governmental
body or the public; the Corporation's systems of internal controls regarding
finance, accounting, legal compliance, and ethics that management and the Board
have established; and the Corporation's auditing, accounting and financial
reporting processes generally. Consistent with this function, the Audit
Committee should encourage continuous improvement of, and should foster
adherence to, the Corporation's policies, procedures, and practices at all
levels.
RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the Directors and shareholders that the corporate
accounting and reporting practices of the Corporation are in accordance with all
requirements and are of the highest quality.
A-1
23
In carrying out these responsibilities, the Audit Committee will:
- - Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
- - Review and recommend to the Directors the independent auditors to be
selected to audit the financial statements of the Corporation and its
subsidiaries.
- - Meet with the independent auditors and financial management of the
Corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized, and at the conclusion
thereof review such audit, including any comments or recommendations of
the independent auditors.
- - Review with the independent auditors the Corporation's internal auditor,
and financial and accounting personnel, the adequacy and effectiveness
of the accounting and financial controls of the Corporation, and elicit
any recommendations for the improvement of such internal control
procedures or particular areas where new or more detailed controls or
procedures are desirable. Further, the Committee periodically should
review the Corporation's policy statements to determine their adherence
to the code of ethics.
- - Review the internal audit function of the Corporation including the
independence and authority of its reporting obligations; the proposed
audit plans for the coming year, and the coordination of such plans with
the independent auditors. Review the internal reports to management
prepared by the internal audit department and management's response.
- - Provide an open avenue of communication among the independent
accountants, financial, and senior management, the internal auditing
department, and the Board of Directors.
- - Review the financial statements contained in the annual report to
stockholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the stockholders.
Any changes in accounting principles should be reviewed.
- - Upon review, recommend to the Board that the annual audited financial
statements be included in the 10K.
- - Investigate any matter brought to the Committee's attention within the
scope of its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
- - Review and update this Charter periodically, at least annually, as
conditions dictate.
A-2
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EXHIBIT B
(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.
B-1
25
2. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment pursuant to the provisions of Section 9 hereof, an
aggregate of 2,625,000 [2,125,000] 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.
B-2
26
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.
B-3
27
(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.
B-4
28
(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.
(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.
B-5
29
(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.]
The Plan shall be administered with respect to directors so as to comply with
- -----------------------------------------------------------------------------
the provisions of Rule 16b-3, promulgated by the Securities and Exchange
- ------------------------------------------------------------------------
Commission, as that Rule may be amended from time to time.
- ----------------------------------------------------------
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.
B-6
30
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.
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.
B-7
31
PROXY
PRINTRONIX, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 22, 2001
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 25, 2001 at the annual meeting of stockholders to be held on August 22,
2001 or any adjournment thereof.
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32
PLEASE MARK
YOUR CHOICE [X]
LIKE THIS IN
BLUE OR
BLACK INK.
PROPOSAL NUMBER 1:
To elect five directors to hold office until the next annual meeting of
stockholders.
FOR WITHHOLD
all nominees listed AUTHORITY
below (except as marked to vote for all nominees
to the contrary) listed below
[ ] [ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
01 R. Kleist, 02 B. Coleman, 03 J. Dougery, 04 C. Halliwell, 05 E. Kelen
PROPOSAL NUMBER 2:
To approve an amendment to the 1994 Stock Incentive Plan to increase by 500,000
the number of shares available for awards, and to remove specific grants of
options to directors and to substitute discretionary grants on any basis
permitted by Rule 16b-3 promulgated by the Securities and Exchange Commission.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PROPOSAL NUMBER 3:
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF FIVE DIRECTOR NOMINEES AND FOR PROPOSAL NUMBER 2.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO CUMULATE AND DISTRIBUTE VOTES FOR
ANY OR ALL OF THE NOMINEES NAMED ABOVE FOR WHICH THE AUTHORITY TO VOTE HAS NOT
BEEN WITHHELD.
Please sign exactly as name appears hereon.
NO PRINT AREA
Signature(s)______________________________________________ Date:________, 2001
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.
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