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))
Dotronix, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Items 22(a)(2) of Schedule A.
[ ] $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:
(2) Aggregate number of securities to which transactions applies:
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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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[ ] 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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DOTRONIX, INC.
160 FIRST STREET S.E.
NEW BRIGHTON, MINNESOTA 55112
NOTICE OF ANNUAL MEETING
To the Shareholders of Dotronix, Inc.:
Notice is hereby given that the annual meeting of shareholders of Dotronix,
Inc. (the "Company") will be held at 3:30 p.m. on Wednesday, November 6, 1996,
on the sixth floor of the Minneapolis Marriott City Center, Minneapolis,
Minnesota, for the following purposes:
1. To elect a Board of Directors for the ensuing year and until their
successors are elected.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending June 30, 1997.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 27,
1996 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting and any adjournment thereof.
A copy of the Company's Annual Report to Shareholders is included with this
mailing, which is being first made on approximately the date shown below.
We encourage you to take part in the affairs of your Company either in
person or by executing and returning the enclosed proxy.
By Order of the Board of Directors
/s/ David R. Beel
David R. Beel, Secretary
Dated: October 4, 1996
IF YOU ARE UNABLE TO ATTEND THIS MEETING, YOU ARE URGED TO DATE
AND SIGN THE ENCLOSED PROXY AND TO RETURN IT IN THE POSTAGE-
PAID ENVELOPE ENCLOSED HEREWITH FOR YOUR CONVENIENCE.
PROXY STATEMENT
The annual meeting of shareholders of Dotronix, Inc. (the "Company"), 160
First Street S.E., New Brighton, Minnesota 55112, will be held at 3:30 p.m. on
Wednesday, November 6, 1996, on the sixth floor of the Minneapolis Marriott City
Center, Minneapolis, Minnesota, for the purposes set forth in the Notice of
Annual Meeting. The accompanying form of proxy for use at the meeting and any
adjournments thereof is solicited by the Board of Directors of the Company and
may be revoked by written notice to the Secretary of the Company at any time
prior to its exercise, by voting in person at the meeting, or by giving a later
dated proxy at any time before voting. Shares represented by a proxy will be
voted in the manner directed by a shareholder. If no direction is made, the
proxy will be voted for the election of the nominees for directors named and for
the other proposals described in this Proxy Statement. Abstentions and broker
non-votes will be counted as present or represented at the Annual Meeting for
purposes of determining whether a quorum exists. Abstentions and broker
non-votes with respect to any matter brought to a vote at the Annual Meeting
will be treated as shares present but not voted for purposes of determining
whether the requisite vote has been obtained. This Proxy Statement and the
accompanying form of proxy are being mailed to shareholders commencing on or
about October 4, 1996.
All expenses in connection with the solicitation of this proxy will be paid
by the Company, including the charges and expenses of brokerage firms and others
for forwarding solicitation materials to beneficial owners. In addition to
solicitation by mail, officers, directors and regular employees of the Company
who will receive no extra compensation for their services may solicit proxies by
telephone, telegraph or personal calls.
The Board of Directors knows of no other matters that may be brought before
the meeting. However, if any other matters are properly brought before the
meeting, persons named in the enclosed proxy or their substitutes will vote in
accordance with their best judgment on such matters.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Only the holders of the Company's Common Shares whose names appear of
record on the Company's books at the close of business on September 27, 1996
will be entitled to vote at the annual meeting. At the close of business on
September 27, 1996, the Company had 4,288,935 Common Shares (the Company's only
voting securities) outstanding and entitled to vote. Each share of such stock
entitles the holder thereof to one vote upon each matter to be voted upon.
The following table sets forth, as of the record date for the meeting,
certain information with respect to beneficial share ownership by the directors
and nominees individually, by all officers and directors as a group, and by all
persons known to management to own more than 5% of the Company's outstanding
Common Shares. Except as otherwise indicated, the shareholders listed below have
sole investment and voting power with respect to their shares.
NUMBER
OF SHARES PERCENT OF
NAME OF BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER OWNED SHARES
- ---------------- ------------ -----------
William S. Sadler
160 First Street S.E.
New Brighton, MN 55112 1,051,207(1) 24.29%
Ray L. Bergeson 16,500(2) 0.39%
Robert J. Snow 16,746(2)(3) 0.40%
Edward L. Zeman 16,500(2) 0.39%
L. Daniel Kuechenmeister 8,000(4) 0.19%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
Santa Monica, CA 90401 218,500 5.18%
All officers and directors
as a group (7 persons) 1,108,058(5) 25.40%
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(1) Includes 352,089 shares owned directly by Mr. Sadler, 659,800 shares owned
by Minnesota River Aviation, Inc., of which Mr. Sadler is President and
sole shareholder, 12,800 shares owned by Mr. Sadler's wife, and 21,518
shares underlying stock options and warrants exercisable within 60 days.
(2) Includes 15,000 shares underlying stock options exercisable within 60 days.
(3) Includes 200 shares owned by Mr. Snow's wife.
(4) Includes 7,500 shares underlying stock options exercisable within 60 days.
(5) Includes 78,073 shares underlying stock options exercisable within 60 days.
ELECTION OF DIRECTORS
The Board of Directors has recommended that the number of directors to be
elected for the coming year be set at five. The Board of Directors recommends
that the shareholders elect the nominees named below as directors of the Company
for the ensuing year and until their successors are elected and have qualified.
The persons named in the enclosed form of proxy intend to vote for the election
of the five nominees listed below. Each nominee is presently a director of the
Company. Each nominee has indicated a willingness to serve, but in the event any
one or more of such nominees for any reason should not be available as a
candidate for director, votes will be cast pursuant to authority granted by the
enclosed proxy for such other candidate or candidates as may be nominated by
management. The Board of Directors knows of no reason to anticipate that all of
the nominees will not be a candidate at the meeting.
NAME CURRENT POSITION WITH THE COMPANY AGE
- ---- --------------------------------- ---
William S. Sadler President, Treasurer and Director 70
Ray L. Bergeson Director 70
Robert J. Snow Director 76
Edward L. Zeman Director 41
L. Daniel Kuechenmeister Director 66
William S. Sadler, founder of the Company, has been President, Treasurer
and a director since the Company's organization in November 1980. Prior to
founding the Company, Mr. Sadler was President of the Video Display Division of
Audiotronics Corporation from 1978 through 1980 and Chief Executive Officer of
the Ball Electronic Display Division (formerly Miratel Electronics, Inc.) of
Ball Corporation from 1955 through 1976. From 1976 to 1978, Mr. Sadler managed
his personal real estate interests. In his positions with Audiotronics
Corporation and Ball Corporation, Mr. Sadler had overall responsibility for the
development, manufacturing and marketing of CRT displays and CCTV monitors. Mr.
Sadler also is president of Dynetic Systems Company, a manufacturer of precision
motors and a division of Minnesota River Aviation, Inc., of which Mr. Sadler is
sole shareholder.
Ray L. Bergeson has been a director of the Company since 1987. Mr. Bergeson
was employed by Honeywell, Inc. from 1952 through 1988. From 1985 until his
retirement at the end of 1988, he was the chief engineer for the engineering
design automation systems department of the Military Avionics Division. From
1978 to 1985, Mr. Bergeson was a program manager responsible for the development
and implementation of computer-aided design systems for the Military Avionics
Division. Mr. Bergeson holds a degree in electrical engineering from Purdue
University. Since his retirement, Mr. Bergeson has performed consulting work in
the area of CAD-CAM system development and strategic planning.
Robert J. Snow has been a director of the Company since 1988. Mr. Snow is
currently chairman of the board of the American Artstone Company, a manufacturer
of architectural precast concrete, and previously served as vice president and a
director from 1965 to 1989. He also was the owner of Snow-Larson, Inc.,
manufacturers' representatives, and served as president from 1968 to 1987 and
chairman of the board until 1990. Mr. Snow served as vice president and a
director of Construction Midwest, Inc., a distributor of wholesale building
materials, from 1972 to 1987. Mr. Snow holds a master's degree in architecture
from Harvard University.
Edward L. Zeman has been a director of the Company since 1990. Mr. Zeman is
currently Executive Vice President and Chief Financial Officer of ARM Financial
Group, Inc., a financial services company headquartered in Louisville, Kentucky.
From 1990 until August 1995, Mr. Zeman was Chief Operating and Financial
Officer, Treasurer and Vice President for SBM Company, a financial services
company that was acquired by ARM Financial Group, Inc. in June 1995. Prior to
June 1990, Mr. Zeman was an audit manager for Deloitte & Touche in Minneapolis,
Minnesota since before 1985. Mr. Zeman is a certified public accountant and has
a B.S. degree in accounting from the University of Minnesota.
L. Daniel Kuechenmeister has been a director of the Company since 1994. Mr.
Kuechenmeister was employed by Honeywell, Inc. in various management positions
from 1956 through 1990. From 1984 until his retirement in 1990 he was Manager of
Contracts for the Inertial Components Business Area. Since his retirement he has
consulted in the areas of contract negotiations and utilities auditing and
taught classes in government contract negotiations as an adjunct professor at
the University of St. Thomas, St. Paul, Minnesota. He is currently President of
the Board of Merrick Companies, Inc., a non-profit social services entity. Mr.
Kuechenmeister holds a B.A. degree from the University of Minnesota.
During the year ended June 30, 1996, the Board of Directors held six
meetings. Each of the directors attended all six meetings. The Company's Board
also acts from time to time by unanimous written consent in lieu of meetings.
The Board of Directors has two standing committees, the Audit Committee and
the Stock Option Committee. The Audit Committee reviews and makes
recommendations to the Board of Directors with respect to designated financial
and accounting matters. The Stock Option Committee administers the Company's
1989 Stock Option and Restricted Stock Plan.
During the year ended June 30, 1996, the members of the Audit Committee
were Mr. Bergeson, Mr. Snow, Mr. Zeman and Mr. Kuechenmeister. The Audit
Committee held two meetings during such year. Each member attended both
meetings.
During the year ended June 30, 1996, the members of the Stock Option
Committee were Mr. Bergeson, Mr. Snow, Mr. Zeman and Mr. Kuechenmeister. The
Stock Option Committee held no meetings during such year.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table summarizes the total
compensation earned or paid for services rendered by William S. Sadler, the
Chief Executive Officer of the Company, during each of the years ended June 30,
1996, 1995 and 1994 and Michael J. Hopkins, Vice President during the years
ended June 30, 1996 and 1995 and 1994. No other officer of the Company had a
total annual salary and bonus exceeding $100,000 for the year ended June 30,
1996.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- --------------------- -------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS LTIP(1) ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS(3) GRANTED PAYOUTS COMPENSATION(2)
POSITION YEAR ($) ($) ($) (#) (#) ($) ($)
- ------------------ ---- ------- ------- ------------ ---------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William S. Sadler 1996 180,000 150,000 0 0 0 0 1,500
President (Chief 1995 180,000 150,000 0 0 21,518 0 1,500
Executive Officer) 1994 180,000 34,027 0 0 0 0 1,800
and Chairman
Michael J. Hopkins 1996 100,000 46,935 0 0 0 0 0
Vice President(4) 1995 100,000 16,585 0 0 47,000 0 0
1994 83,716 0 0 10,000 0 0 0
</TABLE>
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(1) Long-Term Incentive Plan.
(2) Employer matching contributions to 401(k) savings plan.
(3) Shares were awarded under an employment contract dated August 31, 1993 and
were restricted as to transferability during the first year of employment.
All restrictions were removed September 1, 1994.
(4) Mr. Hopkins resigned from the Company on August 2, 1996.
STOCK OPTION GRANTS IN LAST FISCAL YEAR. There were no stock option grants
to the persons named in the "Summary Compensation Table" above during the year
ended June 30, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES. The following table sets forth information concerning the exercise of
stock options by each person named in the "Summary Compensation Table" above
during the year ended June 30, 1996, and the value of all exercisable and
unexercisable options at June 30, 1996.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT JUNE 30, 1996 OPTIONS AT JUNE 30, 1996(1)
ACQUIRED VALUE ---------------------------- ----------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William S. Sadler 0 0 21,518 32,277 2,152 6,886
Michael J. Hopkins 0 0 0 47,000 0 75,859
</TABLE>
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(1) Value of unexercised in-the-money options equals fair market value of the
shares underlying such options at June 30, 1996 ($1.50 per share) less the
exercise price, times the number of in-the-money options outstanding.
COMPENSATION OF DIRECTORS. Directors of the Company who are not employees
of the Company are compensated at the rate of $4,000 per fiscal year and $400
per Board meeting attended during a fiscal year in excess of four such meetings.
In addition, nonemployee directors participate in the Dotronix, Inc. Nonemployee
Director Stock Option Plan (the "Director Option Plan"), which was approved by
shareholders in 1991 and was amended with shareholder approval in 1995. Each
nonemployee director of the Company is eligible to participate in the Director
Option Plan. Under the Director Option Plan, an initial option to purchase 5,000
shares (1) was granted automatically immediately following the Company's 1991
annual meeting of shareholders to each eligible director, and (2) will be
granted automatically immediately following each meeting of the Company's
shareholders or Board of Directors thereafter to each eligible director, if any,
who is elected to the Board of Directors for the first time at such meeting. In
addition, a grant of 500 shares and an option to purchase 2,500 shares will be
granted automatically on an annual basis immediately following each annual
meeting of the Company's shareholders to each eligible director in office who
previously received an initial grant as described in the preceding sentence. All
options granted under the Director Option Plan have an exercise price equal to
the fair market value of the Company's Common Stock on the date of grant,
determined in accordance with the Director Option Plan, and become exercisable
six months after the date of grant (or immediately in the event of the death of
the holder thereof). The option exercise price is payable in cash. Options
granted under the Director Option Plan are intended to be "nonqualifed options"
under the Internal Revenue Code of 1986, as amended. Pursuant to the Director
Option Plan, during the year ended June 30, 1996, Mr. Bergeson, Mr. Snow, Mr.
Zeman and Mr. Kuechenmeister each was automatically granted an option to
purchase 2,500 shares of the Company's Common Stock at $2.125 per share and was
granted 500 shares. No options granted under the Director Option Plan have been
exercised.
EMPLOYMENT CONTRACTS. Mr. Sadler is employed by the Company through June
30, 1998 under an amended and restated employment agreement approved by the
independent directors. The agreement provides for an annual base salary of
$180,000 per year, subject to annual salary adjustments equal to the average
annual salary adjustment of all Company employees (but not to decrease to less
than $180,000). The agreement also provides for Mr. Sadler to be paid a bonus of
$150,000 in each of fiscal years 1995, 1996, 1997 and 1998; provided, that the
bonus in any one year cannot exceed 20% of corporate pre-tax earnings before the
payment of such bonus. If the bonus is restricted by this 20% limitation in one
year, it will be made up in a subsequent year, provided that the sum of the
bonus payments does not exceed 20% of corporate pre-tax earnings before the
payment of such bonuses. At Mr. Sadler's option, up to 50% of the foregoing
bonus for any fiscal year may be paid in the form of warrants to purchase
Company Common Stock having an exercise price of $1.00 per share and a term of
three years from the date of issuance, on the basis of one such warrant for each
dollar of bonus compensation paid in the form of warrants. The agreement also
provides for the payment of a one-time cash incentive award of $125,000 on July
31, 1998, if specified corporate goals are met, and for the payment of severance
benefits of up to the remaining base salary due under the agreement if Mr.
Sadler's employment is terminated under specified circumstances.
CERTAIN TRANSACTIONS
The Company leases a service facility in New Brighton from Minnesota River
Aviation Inc., a company wholly owned by Mr. Sadler, on a month to month basis,
and it leases a warehouse facility in New Brighton from Minnesota River
Television, Inc., which is also wholly owned by Mr. Sadler, through March 31,
1998. The Company paid aggregate rentals of approximately $86,000 to these two
companies during the year ended June 30, 1996. The Company believes that these
rentals, which have been approved by the independent directors of the Company,
are fair and no less favorable to the Company than could have been obtained
elsewhere.
APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending June 30, 1997. A proposal to
ratify that appointment will be presented at the annual meeting. Deloitte &
Touche LLP and its predecessor have served as the Company's auditors since March
1981, and has no relationship with the Company other than that arising from its
employment as independent auditors. Representatives of Deloitte & Touche LLP are
expected to be present at the annual meeting, will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions from shareholders.
The Board of Directors recommends a vote FOR this proposal. If the
appointment is not ratified by shareholders, the Board of Directors is not
obligated to appoint other auditors, but the Board of Directors will give
consideration to such unfavorable vote.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal by a shareholder to be presented at the next annual meeting
must be received at the Company's principal executive offices, 160 First Street
S.E., New Brighton, Minnesota 55112, not later than July 1, 1997.
By Order of the Board of Directors
/s/ David R. Beel
David R. Beel, Secretary
Dated: October 4, 1996
UPON WRITTEN REQUEST, DOTRONIX, INC. WILL FURNISH, WITHOUT CHARGE, TO
PERSONS SOLICITED BY THIS PROXY STATEMENT, A COPY OF ITS REPORT ON FORM 10-KSB
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED JUNE
30, 1996. REQUESTS SHOULD BE ADDRESSED TO DOTRONIX, INC., 160 FIRST STREET S.E.,
NEW BRIGHTON, MINNESOTA 55112, ATTENTION: DAVID R. BEEL.
DOTRONIX, INC.
160 First Street S.E.
New Brighton, Minnesota 55112
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned, having duly received the Notice of Annual Meeting and Proxy
Statement dated October 4, 1996, hereby appoints William S. Sadler and David R.
Beel proxies (each with the power to act alone and with the power of
substitution and revocation), to represent the undersigned and to vote, as
designated below, all common shares of Dotronix, Inc. which the undersigned is
entitled to vote at the annual meeting of shareholders of Dotronix, Inc., to be
held at 3:30 p.m. on Wednesday, November 6, 1996 on the sixth floor of the
Minneapolis Marriott City Center, Minneapolis, Minnesota, and any adjournment
thereof.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) TO VOTE FOR ALL NOMINEES
LISTED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:)
W. Sadler, R. Bergeson, R. Snow, E. Zeman, L. Daniel Kuechenmeister
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP as the
independent auditors for the Company for the fiscal year ending June 30,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be dated and signed on other side)
(Continued from other side)
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL DIRECTORS NAMED IN ITEM 1 AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND MAIL THIS PROXY STATEMENT IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
Sign exactly as your name appears below; in the case of joint tenancy, both
joint tenants must sign; fiduciaries please indicate title and authority.
Date: _________________________, 1996
_____________________________________
Signature
_____________________________________
Signature
