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):
[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:
<PAGE>
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 12, 1997,
on the eighth 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 ended June 30, 1998.
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 October 1, 1997
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
Erling J. Anderson, Secretary
Dated: October 6, 1997
IF YOU ARE UNABLE TO ATTEND THE MEETING, YOU ARE URGED TO DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE POSTAGE-PAID
ENVELOPE ENCLOSED HEREWITH FOR YOUR CONVENIENCE.
<PAGE>
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 12, 1997 on the eighth 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 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 counted as present or represented at the Annual Meeting for purposes
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 requisite
vote has been obtained. This Proxy Statement and the accompanying form of proxy
are being mailed to shareholders commencing on or about October 6, 1997.
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, officer, 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 note
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 October 1, 1997 will
be entitled to vote at the annual meeting. At the close of business on October
1, 1997, the Company had 4,037,135 Common Shares (the Company's only voting
securities) outstanding and entitled to vote. Each share of 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 following
have sole investment and voting power with respect to their shares.
<PAGE>
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 ......... 1,151,207(1) 28.36%
Ray L. Bergeson ............... 19,500(2) .48%
Robert J. Snow ............... 19,746(2)(3) .49%
Edward L. Zeman. ............... 19,500(2) .48%
L. Daniel Kuechenmeister ...... 11,000(4) .27%
All officers and directors
as a group(6 persons) ......... 1,228,885(5) 29.76%
- ------------------
(1) Includes 432,089 shares owned directly by Mr. Sadler, 684,800 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 exercisable within 60 days.
(2) Includes 17,500 shares underlying stock options exercisable within 60 days.
(3) Includes 200 shares owned by Mr. Snow's wife.
(4) Includes 10,000 shares underlying stock options exercisable within 60 days.
(5) Includes 91,950 shares underlying stock options exercisable within 60 days.
<PAGE>
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 71
Ray L. Bergeson Director 71
Robert J. Snow Director 77
Edward L. Zeman Director 42
L. Daniel Kuechenmeister Director 67
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 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 development 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 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 director from 1965 to 1989. He also was the owner of Snow-Larsen,
Inc., manufacturers' representatives, and 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
currently is Executive Vice President and Chief Financial Officer of ARM
Financial Group, Inc., a financial services
<PAGE>
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, 1997, the Board of Directors held three
meetings. Each of the directors attended all three 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, 1997, the members of the Audit Committee
were Mr. Bergeson, Mr. Snow, Mr. Zeman, and Mr. Kuechenmeister. The Audit
Committee held one meeting during such year. Each member attended this meeting.
During the year ended June 30, 1997, 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.
<PAGE>
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,
1997, 1996 and 1995 and Michael J. Hopkins, Vice President during the years
ended June 30, 1997, 1996 and 1995. William S. Sadler was the only officer of
the Company that had a total annual salary and bonus that exceeded $100,000 for
the year ended June 30, 1997.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ----------------------- ---------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS LTIP(1) ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS GRANTED PAYOUTS COMPENSATION(2)
POSITION YEAR ($) ($) ($) (#) (#) ($) ($)
- -------------------- ------ --------- --------- -------------- ----------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William S. Sadler 1997 150,000 0 0 0 0 0 1,500
President (Chief 1996 180,000 150,000 0 0 0 0 1,500
Executive Office) 1995 180,000 150,000 0 0 21,518 0 1,500
and chairman
Michael J. Hopkins 1997 12,883 0 0 0 0 0 0
Vice President(3) 1996 100,000 46,935 0 0 0 0 0
1995 100,000 16,585 0 0 0 0 0
</TABLE>
- ------------------
(1) Long-Term Incentive Plan
(2) Employer matching contributions to 401(k) plan.
(3) 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, 1997.
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, 1997 and the value of all exercisable and
unexercisable options at June 30, 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT JUNE 30, 1997 OPTIONS AT JUNE 30, 1996(1)
SHARES ------------------------------- -------------------------------
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) (#) (#)
- ------------------- ------------- ---------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William S. Sadler 0 0 21,518 10,759 1,506 0
</TABLE>
- ------------------
(1) Value of unexercised in-the-money options equals fair market value of the
shares underlying such options at June 30, 1997 ($1.00 per share) less the
exercise price, times the number of in-the-money options outstanding.
<PAGE>
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 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 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 the
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
death of the holder thereof). The option exercise price is payable in cash.
Options granted under the Director Option Plan are intended to be "nonqualified
options" under the Internal Revenue Code of 1986, as amended. Pursuant to the
Director Option Plan, during the year ended June 30, 1997, 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 $1.641 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.
<PAGE>
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 form Minnesota River
Television, Inc., which is also wholly owned by Mr. Sadler, through March 31,
1998. The Company paid aggregate rentals of approximately $88,000 to these two
companies during the year ended June 30, 1997. 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, 1998. 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 the 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 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, 1998.
By Order of the Board of Directors
Erling J. Anderson, Secretary
Dated: October 6, 1997
UPON WRITTEN REQUEST, DOTRONIX, INC. WILL FURNISH, WITHOUT CHARGE TO
PERSONS SOLICITED BY THIS PROXY STATEMENT, COPY OF ITS REPORT ON FORM 10-KSB
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED JUNE
30, 1997. REQUESTS SHOULD BE ADDRESSED TO DOTRONIX, INC., 160 FIRST STREET S.E.,
NEW BRIGHTON, MINNESOTA 55112, ATTENTION: ERLING J. ANDERSON.
<PAGE>
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 6, 1997, hereby appoints William S. Sadler and Erling J.
Anderson 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 12, 1997 on the eighth floor of the
Minneapolis Marriott City Center, Minneapolis, Minnesota, and any adjournment
thereof.
1. ELECTION OF DIRECTORS. [ ] FOR all nominees listed below
(EXCEPT AS MARKED TO THE CONTRARY BELOW)
[ ] WITHHOLD AUTHORITY
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,
1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE DATED AND SIGNED ON OTHER SIDE)
<PAGE>
(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:______________________________, 1997
_________________________________________
Signature
_________________________________________
Signature
