SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
FUNCO, INC.
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(Name of Registrant as Specified in Its Charter)
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(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:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
FUNCO, INC.
10120 West 76th Street
Minneapolis, MN 55344
June 27, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of Funco, Inc. The meeting will be held at 10:00 a.m. Central
Daylight Time on Friday, August 1, 1997, at the Minneapolis Marriott Southwest
Hotel, 5801 Opus Parkway, Minnetonka, Minnesota 55343. I encourage you to
attend. Whether or not you plan to attend the meeting, I urge you to vote your
proxy.
On behalf of our Board of Directors and employees, thank you for your
continued support and interest in Funco, Inc.
Sincerely,
/s/ David R. Pomije
David R. Pomije
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FUNCO, INC.
10120 West 76th Street
Minneapolis, Minnesota 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
Please take notice that the 1997 Annual Meeting of Shareholders of
Funco, Inc., a Minnesota corporation (the "Company"), will be held at the
Minneapolis Marriott Southwest Hotel, 5801 Opus Parkway, Minnetonka, Minnesota
55343, on Friday, August 1, 1997, at 10:00 a.m. Central Daylight Time, to
consider and vote upon the following matters, as described in the accompanying
Proxy Statement:
1. Election of directors of the Company.
2. Approval of appointment of Ernst & Young LLP as independent auditors of
the Company.
3. Such other business as may properly come before the Annual Meeting or
any adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business
on June 17, 1997, as the record date for determination of shareholders entitled
to notice of and to vote at the Annual Meeting.
Shareholders who do not expect to be personally present at the Annual
Meeting are urged to vote, sign, date and return the accompanying proxy in the
enclosed, postage paid return envelope as soon as possible. The Board of
Directors of the Company sincerely hopes, however, that all shareholders who can
attend the Annual Meeting will do so.
By Order of the Board of Directors
/s/ Robert M. Hiben
Robert M. Hiben
SECRETARY
June 27, 1997
FUNCO, INC.
10120 WEST 76TH STREET
MINNEAPOLIS, MINNESOTA 55344
PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 1, 1997
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SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Funco,
Inc. (the "Company") in connection with the 1997 Annual Meeting of Shareholders
of the Company, which will be held on August 1, 1997, and any adjournments
thereof. A person giving the enclosed proxy has the power to revoke it at any
time before the convening of the Annual Meeting. Revocations of proxy will be
honored if received at the offices of the Company, addressed to the attention of
Robert M. Hiben, on or before July 31, 1997. In addition, on the day of the
meeting, prior to the convening thereof, revocations may be delivered to the
tellers who will be seated at the door of the meeting hall. Unless so revoked,
all properly executed proxies will be voted as specified. In the event no choice
is specified on the proxy, the shares represented by such proxy will be voted
FOR the nominees for directors set forth herein and FOR the appointment of Ernst
& Young LLP as the Company's independent auditors. If any other matters properly
come before the Annual Meeting, or if any of the persons named to serve as
directors should decline or be unable to serve, the persons named in the proxy
will vote the same in accordance with their discretion.
Expenses in connection with the solicitation of proxies will be paid by
the Company. Proxies are being solicited primarily by mail, but officers,
directors and other employees of the Company may also solicit proxies by
telephone, telegraph or personal calls. No extra compensation will be paid by
the Company for such solicitation. The Company may reimburse brokers, banks and
other nominees holding shares for others for the cost of forwarding proxy
materials to, and obtaining proxies from, their principals. This Proxy Statement
is first being mailed to shareholders on or about June 27, 1997.
VOTING RIGHTS
Only shareholders of record at the close of business on June 17, 1997,
are entitled to notice of and to vote at the meeting or any adjournment thereof.
As of that date, there were issued and outstanding 6,098,781 shares of Common
Stock of the Company, the only class of securities of the Company entitled to
vote at the Annual Meeting. Each shareholder of record is entitled to one vote
for each share registered in the shareholder's name as of the record date. The
Articles of Incorporation of the Company do not grant the shareholders the right
to vote cumulatively for the election of directors. The presence in person or by
proxy of holders of a majority of the shares of Common Stock entitled to vote at
the Annual Meeting will constitute a quorum for the transaction of business.
Abstentions and broker non-votes are counted for the purpose of
determining whether a quorum is present at the Annual Meeting. For the purpose
of determining whether a proposal (but not on the election of directors) has
received a majority vote, abstentions will be included in the vote totals with
the result that an abstention will have the same effect as a negative vote. In
instances where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not returned a proxy (the broker non-votes),
those shares will not be included in the vote totals and, therefore, will have
no effect on the vote.
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of June 17, 1997,
with respect to the stock ownership of all persons known by the Company to be
beneficial owners of more than five percent of its outstanding shares of Common
Stock, each director, each nominee for director, each of the Named Executive
Officers and all officers and directors of the Company as a group:
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING SHARES
- --------------------------------------------------- ------------------ ------------------
David R. Pomije.................................... 1,907,030(1) 3l.1%
10120 West 76th Street
Minneapolis, MN 55344
Stanley A. Bodine.................................. 173,740(2) 2.8%
Richard T. Guidera................................. 9,250(3) Less than 1%
George E. Mileusnic................................ 12,250(4) Less than 1%
Patrick J. Ferrell................................. 8,250(5) Less than 1%
Jeffrey R. Gatesmith............................... 56,977(6) Less than 1%
Robert M. Hiben.................................... 47,590(7) Less than 1%
All officers and directors as a group (7 persons).. 2,215,087(8) 35.2%
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(1) Includes 33,580 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(2) Includes 72,838 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(3) Includes 5,250 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(4) Includes 8,750 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(5) Includes 7,250 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(6) Includes 37,727 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(7) Includes 35,840 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
(8) Includes 201,235 shares issuable upon exercise of currently exercisable
options and options exercisable within 60 days of the record date.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Management has nominated the individuals listed below for election as
directors, each to serve until the next Annual Meeting of Shareholders and until
his successor is elected and qualified or until his earlier resignation or
removal.
Unless instructed not to vote for the election of directors or not to
vote for any specified nominee, the proxies will vote to elect the listed
nominees. If any of the nominees are not candidates for election at the Annual
Meeting, which is not currently anticipated, the proxies may vote for such other
persons as they, in their discretion, may determine.
NAME AGE DIRECTOR SINCE
------------------------------------- --- --------------
David R. Pomije...................... 41 1988
Stanley A. Bodine.................... 47 1992
Richard T. Guidera................... 68 1992
George E. Mileusnic.................. 42 1993
Patrick J. Ferrell................... 40 1995
DAVID R. POMIJE is the founder of the Company and has been chairman of
the board and chief executive officer of the Company since its inception in
March 1988. He also served the Company as its president and chief financial
officer until April 1995. Mr. Pomije's prior experience includes nine years
within the consumer electronics industry. Mr. Pomije currently serves on the
Board of Directors of Excelsior-Henderson Motorcycle Manufacturing Company.
STANLEY A. BODINE was named president and chief operating officer of
the Company in April 1995. He had served as executive vice president since March
1992 and has been a director of the Company since May 1992. From October 1991 to
March 1992, he worked for Funco as a management consultant. Mr. Bodine held
various management positions with The Pillsbury Company from 1978 to 1991, most
recently as senior vice president of The Haagen-Dazs Company, with
responsibility for business development in the United States, Europe and the
Pacific Rim. He also served as general manager of Haagen-Dazs International and
director of planning and development for Pillsbury's domestic and international
divisions.
RICHARD T. GUIDERA was elected to the Board of Directors in September
1992. Since 1984, Mr. Guidera has been president of The Guidera Group, Inc., a
firm providing shopping center consulting and business brokerage services to
retailers and shopping center developers. Prior thereto he had served as
executive vice president of operations and leasing and a partner of The Center
Companies, which was formed in 1980 as a successor to Dayton-Hudson Properties.
GEORGE E. MILEUSNIC was elected to the Board of Directors in December
1993. Mr. Mileusnic currently serves as executive vice president of
administration of the Outdoor Recreation division of The Coleman Company, Inc.,
a leading manufacturer and marketer of brand name consumer products for the
camping and related outdoor recreational markets in the United States, Canada,
Europe and Japan. From 1994 to 1996 he served as executive vice president and
chief financial officer of The Coleman Company. He joined The Coleman Company in
September 1989 as senior vice president and chief financial officer. From 1987
to 1989, he was senior vice president and controller of Burger King Corporation,
a subsidiary of The Pillsbury Company. Mr. Mileusnic currently serves on the
Board of Directors of Intrust Funds Trust.
PATRICK J. FERRELL was elected to the Board of Directors in May 1995.
Mr. Ferrell is currently president of Strategies & Internet Consulting,
providing consultant services to the interactive entertainment industry. Most
recently Mr. Ferrell served as chief executive officer of Infotainment World,
Inc., a subsidiary of IDG Communications which publishes GAMEPRO, S.W.A.T. PRO
and PC GAMES magazines, as well as related tip books and strategy guides. While
with Infotainment World, Mr. Ferrell created and co-produced the Electronic
Entertainment Expo, the world's largest trade show dedicated exclusively to
interactive entertainment products and services. Mr. Ferrell, a CPA, has held a
variety of financial management positions at Visa, U.S.A., Failure Analysis
Associates, Foster Farms and KPMG Peat Marwick LLP. Mr. Ferrell currently serves
on the Board of Directors of Hypermedia Communications.
DIRECTORS' COMPENSATION
Directors who are not otherwise employees of the Company are paid an
annual retainer of $2,400, plus $200 for each committee meeting attended which
is not held on the same date as a regular board meeting. During fiscal 1997, an
aggregate of $7,200 was paid or accrued to outside directors for their services.
Nonemployee directors are eligible for stock option awards under the Company's
1992 Stock Option Plan for Nonemployee Directors. During fiscal 1997 options to
purchase an aggregate of 4,500 shares at an exercise price of $6.85 were granted
to the Company's nonemployee directors.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met three times during fiscal 1997. All
directors attended each of the meetings of the Board and the committees on which
they served. The Board of Directors has Executive, Compensation and Audit
Committees, each comprised of two members. The Board of Directors does not have
a Nominating Committee.
EXECUTIVE COMMITTEE. The Executive Committee is authorized to take
action between meetings of the Board, subject to Board ratification. The
Executive Committee did not meet during fiscal 1997. The current members of the
Executive Committee are Messrs. Pomije and Bodine.
COMPENSATION COMMITTEE. The principal function of the Compensation
Committee is to make recommendations to the Board of Directors concerning the
compensation of executive officers and other management personnel. The
Compensation Committee met four times during fiscal 1997. The current members of
the Compensation Committee are Messrs. Guidera and Mileusnic.
AUDIT COMMITTEE. The Audit Committee has the principal function of
reviewing the adequacy of the Company's internal controls, conferring with the
independent auditors concerning the scope of their examination of the books and
records of the Company, recommending to the Board of Directors the appointment
of independent auditors and considering other appropriate matters regarding the
financial affairs of the Company. The Audit Committee met two times during
fiscal 1997. The current members of the Audit Committee are Messrs. Mileusnic
and Ferrell.
PROPOSAL NO. 2
APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, have been the auditors of the
accounts of the Company for the past seven fiscal years. They have been
appointed by the Board of Directors of the Company for the purpose of auditing
the Company's accounts for the 1998 fiscal year and shareholder approval of such
appointment is requested.
Representatives of the firm of Ernst & Young LLP will be in attendance
at the Annual Meeting of Shareholders and will have the opportunity to make a
statement if they desire to do so. In addition, they will be available to
respond to appropriate questions.
The affirmative vote of a majority of the shares of Common Stock
represented in person or proxy and entitled to vote at the Annual Meeting is
required to approve the appointment of Ernst & Young LLP.
All proxies not voted against the appointment of Ernst & Young LLP or
not abstaining from voting shall be voted FOR the appointment of Ernst & Young
LLP. In the event that the appointment of Ernst & Young LLP should not be
approved by shareholders, the Board of Directors will make another appointment
to be effective at the earliest feasible time, either this fiscal year or the
next.
The Board of Directors recommends a vote FOR the appointment of Ernst &
Young LLP.
OTHER EXECUTIVE OFFICERS
The Company's executive officers, other than Messrs. Pomije and Bodine,
are identified below.
JEFFREY R. GATESMITH, 45, has served as vice president of retail
operations and human resources of the Company since January 1992. From 1988 to
1991 he served as vice president of human resources for the sixty-store retail
jewelry operations of Henry Birks and Sons, Ltd., Montreal, Quebec, Canada, and
as vice president of operations for Amerpro, Inc., a California firm offering
residential painting services from 1987 to 1988.
ROBERT M. HIBEN, 39, has served as chief financial officer and
secretary of the Company since April 1995. Mr. Hiben joined the Company as
controller in February 1992. He was chief financial officer of Bretts Department
Store Company, a nineteen-store chain, from 1990 to 1992, and served in various
financial capacities, most recently as director of financial planning, for
Wilsons, a national retailer of leather apparel, from 1982 to 1990.
REPORT OF THE COMPENSATION COMMITTEE
With respect to executive compensation, the objectives of the Committee
are to establish and maintain programs and practices that will align executive
compensation with the Company's performance and profitability and motivate and
retain executive officers. In meeting these objectives, the Compensation
Committee has determined that executive compensation plans are to include
competitive base salaries, performance based cash bonuses and appropriate
long-term stock based incentive awards.
ELEMENTS OF THE COMPANY'S EXECUTIVE COMPENSATION PLANS
BASE SALARY. The Board of Directors establishes the base salary level
for each executive officer, including the chief executive officer, based upon
recommendation of the Compensation Committee. In developing specific salary
recommendations, the Compensation Committee considers the scope of
responsibility of each executive officer, the individual's experience and the
competitive marketplace for the position. Base salaries of the Company's Named
Executive Officers increased an average of approximately 12% during fiscal 1997.
PERFORMANCE-BASED CASH BONUS. The Board of Directors establishes an
annual cash bonus plan based upon recommendation of the Compensation Committee,
which correlates incentive payments to factors including overall Company
financial performance, specific individual objectives and the individual
executive officer's base salary. The Company awarded performance based cash
bonuses to its Named Executive Officers during fiscal 1997 with bonus amounts
ranging from approximately 46% to 60% of base salary.
STOCK-BASED INCENTIVE AWARDS. The Compensation Committee and the Board
of Directors believe that stock-based incentive awards encourage and reward
effective management actions that bring about long-term corporate financial
success, primarily as measured by increases in shareholder value. During fiscal
1997 the Board of Directors, upon recommendation of the Compensation Committee,
granted options to purchase an aggregate of 111,600 shares at prices ranging
from $8.52 to $9.48 to the Named Executive Officers.
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The following criteria were applied by the Compensation Committee to
determine compensation for the Chief Executive Officer, Mr. Pomije, for the last
fiscal year.
The Committee established Mr. Pomije's annual base salary for fiscal
1997 to be $200,000, based upon the criteria described above regarding base
salary. The Committee established Mr. Pomije's annual incentive bonus
opportunity at a level at which achievement of bonus, together with base salary,
would have been marketplace competitive. The Company awarded an incentive bonus
to Mr. Pomije in the amount of $120,000 for achieving fiscal 1997 results. The
Committee recommended to the Board of Directors that pursuant to the 1993 Stock
Option Plan, Mr. Pomije should be granted 16,200 and 21,100 shares of Common
Stock at exercise prices of $9.37 and $9.48 per share, respectively.
OTHER INFORMATION
In 1993, Section 162(m) of the Internal Revenue Code was adopted which,
beginning in 1994, imposes an annual deduction limitation of $1.0 million on the
compensation of certain executive officers of publicly held companies. The
Compensation Committee does not believe that the Section 162(m) limitation will
materially affect the Company in the near future given the current level of the
compensation of the executive officers.
The Compensation Committee: Richard T. Guidera and George E. Mileusnic
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth certain
information regarding compensation paid during each of the Company's last three
fiscal years to the Company's chief executive officer and the three other
executive officers whose total annual compensation in fiscal 1997 (based on
salary and bonus) exceeded $100,000 (the "Named Executive Officers").
ANNUAL COMPENSATION LONG TERM
FISCAL -------------------------- COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS/OPTIONS
- ------------------------------------------ --------- ------------ ---------- ----------------
David R. Pomije........................ 1997 $200,000 $120,000 37,300 shares
Chief Executive Officer 1996 180,000 - 18,500 shares
1995 180,000 - 14,214 shares
Stanley A. Bodine...................... 1997 168,000 100,800 34,500 shares
President and Chief Operating Officer 1996 153,750 - 33,500 shares
1995 153,750 - 13,355 shares
Jeffrey R. Gatesmith................... 1997 102,000 47,500 20,900 shares
Vice President of Retail Operations 1996 88,200 11,730 22,400 shares
and Human Resources 1995 87,230 - 7,661 shares
Robert M. Hiben........................ 1997 92,000 46,000 18,900 shares
Chief Financial Officer 1996 78,750 11,125 20,000 shares
1995 77,885 - 6,840 shares
OPTIONS GRANTED DURING FISCAL 1997. The following table provides
information relating to options granted to the Named Executive Officers during
fiscal 1997.
POTENTIAL REALIZABLE
INDIVIDUAL GRANT VALUE AT ASSUMED
------------------------------------------------------- ANNUAL RATE OF STOCK
PERCENT OF TOTAL PRICE APPRECIATION
OPTIONS GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANTED(1) FISCAL YEAR PRICE(2) DATE 5%(3) 10%(3)
- ---------------------- ---------- ------------------ -------- ---------- -------- --------
David R. Pomije....... 21,100 7.3% $9.48 6/13/2001 $ 55,264 $122,119
16,200 5.6 9.37 12/5/2001 41,938 92,672
Stanley A. Bodine..... 19,500 6.8 8.62 6/13/2006 105,711 267,892
15,000 5.2 8.52 12/5/2006 80,373 203,680
Jeffrey R. Gatesmith.. 11,800 4.1 8.62 6/13/2006 63,969 162,109
9,100 3.2 8.52 12/5/2006 48,759 123,566
Robert M. Hiben....... 10,700 3.7 8.62 6/13/2006 58,005 146,997
8,200 2.9 8.52 12/5/2006 43,937 111,345
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(1) The number indicated is the number of shares of Common Stock that can be
acquired upon exercise of the option. The Company has not granted any
SARs. All options granted in fiscal 1997 are incentive stock options and
are nontransferable, vest over a period of three years, become
exercisable in three equal annual installments commencing either June 14,
1996 or December 6, 1996, and provide for forfeiture of unvested options
upon termination of employment.
(2) The exercise price is equal to the fair market value of the Common Stock
on the date of grant; however, the exercise price for Mr. Pomije was
increased by 10% as required by the federal tax code, as Mr. Pomije owns
greater than 10% of the outstanding Common Stock.
(3) The assumed rates of 5% and 10% are hypothetical rates of stock price
appreciation selected by the Securities and Exchange Commission and are
not intended to, and do not, forecast or assume actual future stock
prices. The Company believes that future stock appreciation, if any, is
unpredictable and is not aware of any formula that will determine with
any reasonable accuracy the present value of stock options based on
future factors which are unknowable and volatile. No gain to optionees is
possible without an appreciation in stock prices, and any such increase
would benefit all shareholders. There can be no assurance that the
amounts reflected in this table will be achieved.
AGGREGATE OPTION EXERCISES DURING FISCAL 1997 AND FISCAL YEAR-END
OPTION VALUES. The following table provides information related to options
exercised by the Named Executive Officers during fiscal 1997 and the number and
value of options held at fiscal year-end. The Company does not have any
outstanding stock appreciation rights.
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED FISCAL YEAR-END FISCAL YEAR-END(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- -------- -------- ----------- ------------- ----------- -------------
David R. Pomije....... - - 15,643 54,371 $ 60,745 $319,833
Stanley A. Bodine..... 8,250 $23,059 55,720 65,035 417,738 485,418
Jeffrey R. Gatesmith.. 4,575 13,073 31,749 41,387 233,948 313,876
Robert M. Hiben....... 3,200 14,582 28,877 37,213 215,237 281,894
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(1) Value is determined by the difference between the closing price of the
Company's Common Stock on March 30, 1997, which was $14.75, and the
option exercise price (if less than $14.75) multiplied by the number of
shares subject to the option.
STOCK PERFORMANCE CHART
PERFORMANCE GRAPH. The following table compares the cumulative total
shareholder return on Common Stock for the period commencing August 12, 1992,
the date of the Company's initial public offering, through March 30, 1997, with
the cumulative total return on the NASDAQ United States Stock Market Index and
the NASDAQ Retail Trade Index over the same period. This comparison assumes $100
was invested on August 12, 1992, in the Company's Common Stock and in each of
the foregoing indices, and assumes reinvestment of all dividends.
[PLOT POINTS GRAPH]
FUNCO, INC. NASDAQ STOCK MARKET (U.S.) NASDAQ RETAIL TRADE
8/12/92 $100 $100 $100
4/04/93 $245 $117 $104
4/03/94 $266 $131 $111
4/02/95 $ 89 $145 $109
3/31/96 $ 80 $201 $136
3/30/97 $268 $224 $138
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company during fiscal 1997, all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with.
OTHER MATTERS
The Board of Directors is not aware that any matter, other than those
described in the Notice, will be presented for action at the Annual Meeting. If,
however, other matters do properly come before the Annual Meeting, it is the
intention of the persons named in the proxy to vote the proxied shares in
accordance with their best judgment on such matters.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
All shareholder proposals intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company at its offices on or
before February 27, 1998.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended March 30, 1997, accompanies this Notice of Annual Meeting of
Shareholders and Proxy Statement.
By Order of the Board of Directors
/s/ Robert M. Hiben
Robert M. Hiben
SECRETARY
June 27, 1997
FUNCO, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS -- AUGUST 1, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David R. Pomije and Stanley A. Bodine, or either
of them, proxies or proxy, with full power of substitution, to vote all shares
of Common Stock of Funco, Inc. (the "Company") which the undersigned is entitled
to vote at the 1997 Annual Meeting of Shareholders to be held at the Minneapolis
Marriott Southwest Hotel, 5801 Opus Parkway, Minnetonka, Minnesota 55343, August
1, 1997, at 10:00 a.m. Central Daylight Time, and at any adjournment thereof, as
directed below with respect to the proposals set forth below, all as more fully
described in the Proxy Statement, and upon any other matter that may properly
come before the meeting or any adjournment thereof.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary all nominees listed below
below)
DAVID R. POMIJE STANLEY A. BODINE RICHARD T. GUIDERA
GEORGE E. MILEUSNIC PATRICK J. FERRELL
(INSTRUCTION: To withhold authority for any individual nominee, write that
nominee's name in the space provided below.)
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2. APPROVAL OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
The power to vote granted by this Proxy may be exercised by David R. Pomije
and Stanley A. Bodine, jointly or singly, or their substitute(s), who are
present and acting at said Annual Meeting or any adjournment of said Annual
Meeting. The undersigned hereby revokes any and all prior proxies given by the
undersigned to vote at this Annual Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDERS' INSTRUCTIONS.
IF THE SHAREHOLDER(S) WHO EXECUTE THIS PROXY DO NOT WITHHOLD THEIR VOTES FOR THE
ELECTION OF DIRECTORS AND DO NOT VOTE AGAINST OR ABSTAIN FROM VOTING ON PROPOSAL
NO. 2, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE PROPOSED DIRECTORS AND
FOR PROPOSAL NO. 2.
It is urgent that each shareholder complete,
date, sign and mail this Proxy as soon as
possible. Your vote is important!
Dated ________________________________, 1997
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Signature of Shareholder(s)
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Signature of Shareholder(s)
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