SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a)
of the Security 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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Circuit Research Labs, Inc.
(Name of Registrant as Specified In Its Charter)
Gary D. Clarkson
Name of Person Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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: N/A
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:
4) Proposed maximum aggregate value of transaction:
[ ] 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 Previous Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party
4) Date Filed:
Mailed to Shareholders on
or about April 12, 1996
CIRCUIT RESEARCH LABS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 3, 1996
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CIRCUIT
RESEARCH LABS, INC., an Arizona corporation, will be held on May 3, 1996 at
2:00 o'clock p.m., Mountain Standard Time, at the offices of Circuit Research
Labs, Inc., 2522 West Geneva Drive, Tempe, Arizona 85282 for the following
purposes:
1. To elect a board of five (5) directors to serve for the coming year
and until their successors are elected;
2. To approve Deloitte & Touche LLP as the Company's independent public
accountants for the year ending December 31, 1996; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 31, 1996 are
entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. However, only
those shares which are represented at the meeting personally by the holder or by
proxy may vote. To assure your representation at the meeting, please mark,
date, sign and return the enclosed proxy card as promptly as possible in the
envelope provided. You may attend the meeting and vote in person even if you
have returned a proxy.
Sincerely,
Gary D. Clarkson, Secretary
Tempe, Arizona
April 12, 1996
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Mailed to Shareholders on
or about April 12, 1996
CIRCUIT RESEARCH LABS, INC.
2522 WEST GENEVA DRIVE
Tempe, Arizona 85282
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of CIRCUIT RESEARCH LABS, INC. (the
Company) for use at its Annual Meeting of Shareholders to be held on May 3 1996,
at 2:00 p.m., Mountain Standard Time, or at any adjournment thereof. The
purposes of the meeting are set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The Annual Meeting will be held in the offices
of Circuit Research Labs, Inc., 2522 West Geneva Drive, Tempe, Arizona 85282.
The Company will bear the cost of this solicitation.
Shareholders may revoke any proxy given pursuant to this solicitation by:
(a) delivering a written notice of revocation to Gary D. Clarkson, Secretary,
Circuit Research Labs, Inc., 2522 West Geneva Drive, Tempe, Arizona 85282; or
(b) a duly executed proxy bearing a later date; or (c) attending the meeting
and voting in person.
Outstanding Shares and Voting Rights
As of the close of business on March 31, 1996, the Company had outstanding
597,682 shares of common stock with $.10 per share par value, each of which is
entitled to one vote at all meetings of stockholders, other than the election
of directors. (see "Cumulative Voting Rights"). Only holders of record of
Common Stock at the close of business on March 31, 1996 will be entitled to
notice of, and to vote at, the Annual Meeting and any adjournments thereof.
In determining whether a quorum exists at the meeting, all shares
represented in person or proxy will be counted. Presence of holders of a
majority of the outstanding stock shall constitute a quorum. Votes will be
tabulated by inspectors. Abstentions and broker non-votes are each included in
the determination of the number of shares present and voting. Each is
tabulated separately. Abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders, whereas broker non-votes are
not counted for purposes of determining whether a proposal has been approved.
Cumulative Voting Rights
Each member present either in person or by proxy at the Annual Meeting
will have cumulative voting rights with respect to the election of directors;
that is the shareholder will have an aggregate number of votes in the
election of directors equal to the number of directors to be elected
multiplied by the number of shares of Common Stock of the Company held by
such shareholder on the record date. The resulting aggregate number of
votes may be cast by the shareholder for the election of any single nominee,
or the shareholder may distribute such votes among any number of all the
nominees. The five nominees receiving the highest number of votes will be
elected to the Board of Directors. The cumulative voting rights may be
exercised in person or by proxy and there are no conditions precedent to the
exercise of such rights.
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PROPOSALS OF SECURITY HOLDERS INTENDED TO
BE PRESENT AT THE NEXT ANNUAL MEETING
Shareholders of the Company who intend to present proposals at the
Company's 1997 Annual Meeting of Shareholders must send such proposals to the
Company no later than December 20, 1996 in order to be included in the proxy
statement and form of proxy relating to the meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
A board of five directors is to be elected at the meeting. Unless otherwise
instructed, proxy holders will vote the proxies received by them for the
Company's nominees named below, each of whom is a current director of the
Company. If any of the Company's nominees is unable or declines to serve as a
director at the time of the Annual Meeting, proxies will be voted for any
nominee designated by the present board of directors to fill the vacancy. It
is not expected that any nominee will be unable or will decline to serve as a
director. If additional persons are nominated for election as directors, the
proxy holders intend to vote all proxies received by them according to the
cumulative voting rules to assure the election of as many of the nominees
listed below as possible. In such event, the specific nominees to be voted
for will be determined by the proxy holders. The term of office of each
person elected as a director will continue until the next Annual Meeting of
Shareholders or until his successor has been elected and qualified.
Names of the nominees of the Company, together with certain information
about them is set forth below.
Director
Name Age Since Position in the Company
Ronald R. Jones 48 1978 Chief Executive Officer, President and
Chairman
Gary D. Clarkson 43 1978 Secretary/Treasurer and Director
Erle M. Constable 77 1983 Assistant Treasurer and Director
Carl E. Matthusen 52 1988 Director
Gary M. Hamker 59 1993 Director
Ronald R. Jones has been Chief Executive Officer, President and a director
of the Company since its incorporation in 1978. Mr. Jones founded Circuit
Research Labs business in 1974. Since 1976, he has devoted his sole business
efforts to the Company and its affiliates. Prior to that time, Mr. Jones
served as a consultant chief engineer for numerous radio stations. He also
taughtcourses in broadcast engineering at Phoenix College and the Institute of
Broadcast Arts from 1974 to 1976. Mr. Jones holds an associate degree in
electronics engineering technology from DeVry Institute of Technology, Phoenix,
Arizona. He is a member of the Institute of Electrical and Electronics
Engineers and the Audio Engineering Society.
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Gary D. Clarkson has been Secretary and a director of the Company since
itsincorporation and was elected Treasurer in July 1992. Mr. Clarkson founded
Circuit Research Labs with Mr. Jones in 1974, and has devoted substantially
all of his business efforts to the Company's business since that time. He
has been a design engineer for Circuit Research Labs from 1974 to present. He
holds an associate degree in electronics engineering technology from DeVry
Institute of Technology, Phoenix, Arizona. Mr. Clarkson served as assistant
and chief engineer at many radio stations from 1971 until 1978.
Erle M. Constable has served as a director of the Company since 1983 and
Treasurer from January 1987 to November 1988 when he reduced his activity to
Assistant Treasurer. In 1983, Mr. Constable retired from Dynalectron
Corporation (now DYNCORP), then a publicly-held diversified technical services
company where he served as Vice President of Finance and Corporate Development.
He was employed by Dynalectron in 1973, and was in charge of an acquisition
program which merged 15 companies into Dynalectron. Prior to joining
Dynalectron, Mr. Constable worked for Fairchild Industries, Lockheed Aircraft
Corporation, Glenn L. Martin Company and Trans World Airlines. He holds
undergraduate and masters degrees in business administration received in 1939
and 1940 from the University of Nebraska. Periodically, Mr. Constable acts as
a consultant to the Company and receives an hourly consulting fee for his
services.
Carl E. Matthusen became a member of the Board of Directors in February
1988. Mr. Matthusen has been in the broadcast industry since 1963 serving in
various capacities at seven radio broadcast stations in Arizona, Wisconsin,
Minnesota and Virginia. Since 1978, he has been General Manager of KJZZ/Sun
Sounds operated by the Mesa Community College in Mesa, Arizona. In addition,
he is a guest lecturer at Mesa Community College, Phoenix College and Arizona
State University as well as a consultant to Arizona Western Community College
and the Arizona Commission on post-secondary education. Mr. Matthusen also
serves as Chairman of the Board of Directors of the National Public Radio
Network, where he has been a director since 1990.
Gary M. Hamker has been a member of the Board of Directors and a Special
Projects Consultant since July 1993. Mr. Hamker is retired from NCR/AT&T after
30 years in Marketing and Corporate Product Management. While with NCR/AT&T he
had many diversified assignments, including developing new domestic and
international computer product strategies and product/marketing plans for the
worldwide market. He was instrumental in development and sales strategies of
mini-computers and personal computer/network systems during their infancy.
Approval of research and development, new product specifications, monitoring
R&D budgets, developing and approving new product plans and planning profitable
products phase-out, were a few of his responsibilities. His expertise includes
working on system problems, on proposals to increase market penetration with
large multi-national accounts and on developing internal communications to
improve departmental cooperation and effectiveness. Periodically, Mr. Hamker
acts as a consultant to the Company and receives an hourly consulting fee for
his services.
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OTHER EXECUTIVE OFFICERS
Name Age Position
Santo J. Adams 57 Vice President Manufacturing
Dennis L. Drew 50 Vice President Operations,
Assistant Secretary/Treasurer
Santo J. Adams has been with the Company since 1984. In 1994, he was
appointed to the position of Vice President of Manufacturing. Mr. Adams has
held management positions with RCA, Motorola, GTE Sylvania and ITT in his 30
years of manufacturing experience. He received his electronics training with
the U.S. Navy and Manufacturing Technology Certification from Erie County
Community College, Buffalo, New York. Mr. Adams is a Certified Time and
Motion Analyst.
Dennis L. Drew joined the Company in 1993 as controller. In 1994, he was
appointed to the positions of Vice President of Operations, and Assistant
Sectretary/Treasurer. Before joining the Company, Mr. Drew spent three years
as a Project Manager for Computer Cable Specialists. Prior to Computer Cable
Specialists, Mr. Drew held several senior financial management positions with
companies in the computer leasing industry. These positions covered a wide
range of responsibilities including implementing computerized internal controls
to negotiating contracts and loan agreements. Mr. Drew has an MBA from Arizona
State University.
The Board of Directors of the Company held a total of 2 meetings during the
fiscal year ended December 31, 1995.
The Board of Directors has an Executive Committee currently comprised of
Messrs. Clarkson and Constable. The Executive Committee is empowered to act
on behalf of the full Board of Directors when it is inconvenient for the full
Board to meet. The Executive Committee was formed in 1983 and held no meetings
in 1995.
The Board of Directors has an Audit Committee which was comprised of
Messrs. Constable and Matthusen during the year ended December 31, 1995. The
Audit Committee oversees the financial reporting and disclosures prepared by
Management. The Audit Committee held one meeting during the fiscal year ended
December 31, 1995.
The Company has no nominating committee. The entire board acts as the
nominating committee.
The Company has no executive compensation committee. The entire board
acts in that capacity. Messrs. Jones and Clarkson do not vote on their
salaries and other compensation.
The Board of Directors has a Stock Option Committee comprised of Messrs.
Jones and Clarkson. The Stock Option Committee is empowered to issue stock
options as outlined in the 1994 Stock Option Plan. The Stock Option Committee
held one meeting during the fiscal year ended December 31, 1995.
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Each of the directors attended, either in person or by telephone, each
meeting scheduled during the time he has served as a director.
EXECUTIVE COMPENSATION
The Company did not pay any individual cash compensation in excess of
$100,000 for services provided during the fiscal year. The following table
sets forth compensation paid or accrued to the chief executive officer during
each of the three fiscal years ended December 31, 1995.
Summary Compensation Table
Name and Other
Principal Position Year Salary Bonus
Compensation
Ronald R. Jones
President and
Chairman of the Board 1995 $ 72,696 -0- $ 2,152(1)
1994 72,696 -0- 2,270(1)
1993 70,804 -0- 2,391(1)
(1) Fee paid by Company for the personal guarantee of the SBA loan.
The Company has no employment contracts currently in force. The Company
has agreements with all employees calling for nondisclosure of trade secrets.
The Company has group life, disability, and medical insurance plans, a
401(k) pension plan, an Employee Stock Purchase Plan and an Incentive Stock
Option Plan.
Compensation of Directors
During the year ended December 31, 1995, Directors received no compensation
for attending meetings.
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Employee Pension Plan
The Company sponsors the CRL, INC. 401(K) PROFIT SHARING PLAN (the "Plan")
for the benefit of all employees meeting certain eligibility requirements.
Under the Plan, participants are permitted to make pre-tax contributions to
their plan accounts. The Company will match 50% of a participant's
contributions up to a maximum Company matching contribution of 3% of a
participant's annual compensation. Total annual contributions to a
participant's account may not exceed 25% of annual compensation. In addition,
the Company, at its sole discretion, may make an annual profit sharing
contribution to the Plan out of its current or accumulated profits. The annual
contribution, if any, is allocated to participants based upon each
participant's annual compensation. The Company has not made an annual
contribution and currently has no plans to do so. The Company did not make a
contribution to the account of the individual listed in the preceding cash
compensation table for the year ended December 31, 1995.
Stock Purchase Plan
The Company has an employee stock purchase plan which is offered to
substantially all employees, including officers. Employees may purchase the
Company's common stock through payroll deductions not exceeding $50 per week
and shares are purchased at the market price, by a nonaffiliated dealer on
the open market. No shares were purchased in 1995.
Stock Options
The following is a brief summary of the Company's 1994 Stock Option Plan. The
closing bid price of the Company's common stock on the NASDAQ National Market
System on February 29, 1996 was $1.6875 per share.
In May 1994, the Company's stockholders approved the Company's 1994 Stock
Option Plan, which set aside an aggregate of 60,000 shares of common stock for
which options may be granted to employees, officers, directors, and consultants.
Options granted and not exercised under the Company's previous plan were
canceled and new options were granted. The Company's Board of Directors
appoints the Stock Option Committee which is authorized to grant incentive
stock options and non qualified stock options under the Plan, select optionees,
determine the number of shares to be granted to each nominee, select the term
of the option (up to ten years), and determine the price to be paid on the
exercise of the option, provided that such price must not be less than 100% of
the market value of the shares subject to the option at the time it is granted.
Each option is exercisable from time to time subject to such restrictions on
exercisability as the Stock Option Committee may impose at the grant date.
This plan expires in April 2004. As of February 29, 1996, options to purchase
a total of 14,062 shares were outstanding to 6 employees and directors.
The following table sets forth information as to all options to purchase Common
Stock under the Plan which were granted to certain officers and directors and
to all officers and directors as a group and which were outstanding as of
February 29, 1996:
7
Average
Name Capacities Shares Price
Erle M. Constable Director and
Assistant Treasurer 1,562(1) $1.25
Carl E. Matthusen Director 1,250(2) $1.25
Santo J. Adams Vice President Manufacturing 3,750(3) $1.25
All officers and directors
as a group (3 individuals) 6,562(4) $1.25
(1) 1,562 shares granted May 6, 1994. All shares became exercisable on May
6, 1995 and expire May 6, 1997.
(2) 1,250 shares granted May 6, 1994. All shares became exercisable on May
6, 1995 and expire May 6, 1997.
(3) 3,750 shares granted June 1, 1994. All shares became exercisable on May
6, 1995 and expire May 6, 1997.
(4) An additional 7,500 shares may be acquired by employees exercising options
which expire May 6, 1997.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
a. Security Ownership of Certain Beneficial Owners
As of February 29, 1996, the following persons were known by the Company to be
the beneficial owners of more than 5% of the Company's Common Stock:
Amount and
Name and Address of Nature of Percent of
Title of Class Beneficial Owner Beneficial Owner Class(1)
$.10 par value common Ronald R. Jones 187,500 31.4%
$.10 par value common Gary D. Clarkson 121,312 20.3%
All of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
(1) On the basis of 597,682 shares outstanding on February 29, 1996.
b. Security Ownership of Management
The stock ownership by directors and officers of the Company as of February 29,
1996 is set forth below. Each person named exercises sole voting power over
all shares beneficially owned.
Amount and
Name and Nature of Percent
Address of Beneficial of Class
Title of Class Beneficial Owner Owner (5)
$.10 par value common Ronald R. Jones 187,500 31.2%
$.10 par value common Gary D. Clarkson 121,312 20.2%
$.10 par value common Santo J. Adams 5,000(1) .8%
$.10 par value common Erle M. Constable 2,500(2) .4%
$.10 par value common Carl E. Matthusen 1,250(3) .2%
All of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
Officer and directors as a group (5 persons) 317,562(4) 52.8%
(1) 1,250 shares owned; 3,750 shares under exercisable options.
(2) 938 shares owned; 1,562 shares under exercisable options. Held as
community property with Eugenia Constable.
(3) No shares owned; 1,250 shares under exercisable options.
(4) Includes 2,812 shares which may be acquired by exercising stock options.
(5) Percentage is calculated on the basis that all director and officer shares
under stock options presently exercisable are deemed outstanding,
a total of 600,494 shares.
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PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP, independent
public accountants, to audit the Company's consolidated financial statements
for the fiscal period ending December 31, 1996 and recommends that
shareholders vote for ratification of such appointment. In the event of a
negative vote on such ratification, the Board of Directors will reconsider
its selection.
An Audit Committee of the Company's Board of Directors was formed in
August 1985 and is responsible for recommending selection of the Company's
independent public accountants. The Audit Committee recommended the
appointment of Deloitte & Touche LLP as the Company's independent public
accountants. The recommendation was adopted by the Board of Directors.
Representatives of Deloitte & Touche LLP are expected to be present at the
meeting and will have the opportunity to respond to appropriate questions and
to make a statement if they so choose.
Management recommends a vote FOR ratification of Deloitte & Touche LLP as
auditors for the Company's financial statements.
OTHER MATTERS
Management knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named on the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: April 15, 1996
10
CIRCUIT RESEARCH LABS, INC.
2522 W. GENEVA DRIVE TEMPE, ARIZONA 85282
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of CIRCUIT RESEARCH LABS, INC. hereby appoints each
of Ronald R. Jones and Gary Clarkson as proxy, with power of substitution and
authorizes each of them to represent, vote and act on behalf of such
shareholder at the Annual Meeting of Shareholders to be held May 3, 1996, or
any adjournment thereof.
1. Election of directors.
[] FOR ALL nominees listed below [] WITHHOLD AUTHORITY
(except as marked to the to vote for all
contray below) nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nomine
strike a line through the nominee's name in the list below.)
RONALD R. JONES GARY D. CLARKSON ERLE M. CONSTABLE
CARL E. MATTHUSEN GARY M. HAMKER
2. Approval of Accountants.
Proposal to ratify the appointment of Deloitte & Touche as auditors.
FOR AGAINST ABSTAIN
3> In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT IN THE
ENCLOSED ENVELOPE.
The shares represented by this proxy will be voted in the manner directed.
If no direction is made, this proxy will be voted FOR Proposals 1, and 2 and
in accordance with the best judgment of the proxies on any other matter which
may properly come before the meeting. The proxies, at their discretion, may
cumulate votes for directors.
DATED: ,1996
SIGNATURE
SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.