<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PLANAR SYSTEMS, 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 transaction 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:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF PLANAR]
1400 N.W. COMPTON DRIVE
BEAVERTON, OR 97006
(503) 690-1100
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 12, 1998
----------------
To the Shareholders of
Planar Systems, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Planar Systems, Inc. (the "Company") will be held on Thursday,
February 12, 1998, at 3:00 p.m., local time, at the Courtyard by Marriott-
Hillsboro, 3050 NW Stucki Place, Hillsboro, Oregon for the following purposes:
1. ELECTION OF DIRECTORS. To elect two directors, each for a three-year
term;
2. RATIFICATION OF APPOINTMENT OF AUDITORS. To ratify the appointment by
the Board of Directors of KPMG Peat Marwick LLP as independent auditors
of the Company for the fiscal year ending September 25, 1998; and
3. OTHER BUSINESS. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
December 13, 1997 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. Only shareholders of
record at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting or any adjournments thereof.
By Order of the Board,
/s/ James M. Hurd
James M. Hurd
President and Chief Executive
Officer
Beaverton, Oregon
January 5, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
PLANAR SYSTEMS, INC.
1400 N.W. COMPTON DRIVE
BEAVERTON, OR 97006
(503) 690-1100
--------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 12, 1998
--------
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of Planar
Systems, Inc., an Oregon corporation ("Planar" or the "Company"), as part of
the solicitation of proxies by the Company's Board of Directors (the "Board of
Directors") from holders of the outstanding shares of Planar common stock, no
par value (the "Common Stock"), for use at the Company's Annual Meeting of
Shareholders to be held at 3:00 p.m. on February 12, 1998, and at any
adjournments or postponements thereof, (the "Annual Meeting"). At the Annual
Meeting, shareholders will be asked to elect two members of the Board of
Directors, ratify the appointment by the Board of Directors of KPMG Peat
Marwick LLP as independent auditors of the Company for the fiscal year ending
September 25, 1998, and transact such other business as may properly come
before the meeting or any adjournments thereof. This Proxy Statement, together
with the enclosed proxy card, is first being mailed to shareholders of Planar
on or about January 5, 1998.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on December 13, 1997
as the record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting. Accordingly, only holders of
record of shares of Common Stock at the close of business on such date will be
entitled to vote at the Annual Meeting, with each such share entitling its
owner to one vote on all matters properly presented at the Annual Meeting. On
the record date, there were approximately 4,956 beneficial holders of the
10,798,141 shares of Common Stock then outstanding. The presence, in person or
by proxy, of a majority of the total number of outstanding shares of Common
Stock entitled to vote at the Annual Meeting is necessary to constitute a
quorum at the Annual Meeting.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Annual Meeting, the shares represented thereby will be voted
in accordance with the instructions marked thereon. EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED FOR THE ELECTION OF THE TWO NOMINEES FOR ELECTION TO THE
BOARD OF DIRECTORS, AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
SEPTEMBER 25, 1998. The Board of Directors does not know of any matters other
than those described in the Notice of Annual Meeting that are to come before
the Annual Meeting. If any other matters are properly brought before the
Annual Meeting, the persons named in the proxy will vote the shares
represented by such proxy upon such matters as determined by a majority of the
Board of Directors.
Shareholders who execute proxies retain the right to revoke them at any time
prior to the exercise of the powers conferred thereby by filing a written
notice of revocation with, or by delivering a duly executed proxy bearing a
later date to, Corporate Secretary, Planar Systems, Inc., 1400 N.W. Compton
Drive, Beaverton, Oregon 97006, or by attending the Annual Meeting and voting
in person. All valid, unrevoked proxies will be voted at the Annual Meeting.
1
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting, two directors will be elected, each for a three-year
term. Unless otherwise specified on the proxy, it is the intention of the
persons named in the proxy to vote the shares represented by each properly
executed proxy for the election of the nominees named below. The Board of
Directors believes that the nominees will stand for election and will serve if
elected as directors. However, if either of the persons nominated by the Board
of Directors fails to stand for election or is unable to accept election, the
proxies will be voted for the election of such other person as the Board of
Directors may recommend.
Under the Company's articles of incorporation and bylaws, the directors are
divided into three classes composed of two directors each in three classes.
The term of office of only one class of directors expires in each year, and
their successors are elected for terms of three years and until their
successors are elected and qualified. There is no cumulative voting for
election of directors.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS. The following table
sets forth the names of the Board of Directors' nominees for election as a
director and those directors who will continue to serve after the Annual
Meeting. Also set forth is certain other information with respect to each such
person's age at December 13, 1997, principal occupation or employment during
at least the past five years, the periods during which he has served as a
director of Planar and positions currently held with Planar.
<TABLE>
<CAPTION>
DIRECTOR EXPIRATION POSITIONS HELD
AGE SINCE OF TERM WITH PLANAR
--- -------- ---------- --------------
<S> <C> <C> <C> <C>
NOMINEES:
Heinrich Stenger............ 56 1997 1998 Director
William D. Walker........... 66 1983 1998 Chairman of the Board
CONTINUING DIRECTORS:
Gregory H. Turnbull......... 59 1986 1999 Director
Steven W. Wynne............. 45 1996 1999 Director
Heikki T. Horstia........... 47 1991 2000 Director
James M. Hurd............... 49 1983 2000 President, Chief Executive
Officer and Director
</TABLE>
WILLIAM D. WALKER. Mr. Walker has served as a Director of the Company since
inception and has served as Chairman of the Board since December 1988. Mr.
Walker served as President and Chief Operating Officer of Tektronix, Inc. from
April 1990 until November 1990. Mr. Walker was Chairman of the Board and Chief
Executive Officer of Electro Scientific Industries, Inc. from 1984 to 1987.
Mr. Walker was Executive Vice President of Tektronix from 1979 to 1984. Mr.
Walker also serves as Vice-Chairman of the Board of Directors of Tektronix.
Mr. Walker received an electrical engineering degree from the University of
Missouri.
HEINRICH STENGER. Mr. Stenger has served as a Director of the Company since
October 1997. Mr. Stenger is Managing Director of EPP, Electronic Production
Partners GmbH located in Munich, Germany. Mr. Stenger served as the Vice
President of European Operations for Electro Scientific Industries (ESI) from
1977 to 1988. Mr. Stenger received his engineering degree from the Engineering
University Munich, Germany.
GREGORY H. TURNBULL. Mr. Turnbull has served as a Director of the Company
since 1986. He currently is self-employed as a consultant to certain small
businesses and is a Special Limited Partner of Cable & Howse Ventures, a
venture capital firm. Mr. Turnbull served as a managing director of Kemper
Securities from June 1992 to April 1993. Mr. Turnbull was a partner of Cable &
Howse Ventures from 1983 to 1991 and served as an investment banker with
Morgan Stanley & Co. and White, Weld & Co. prior to 1983. Mr. Turnbull also
serves on the Board of Directors of Advanced Polymer Systems, Inc. Mr.
Turnbull received a BS in chemical engineering from Oregon State University
and an MBA from Stanford University.
2
<PAGE>
STEVEN W. WYNNE. Mr. Wynne has served as a Director of the Company since
1996. He has served as President and Chief Executive Officer of adidas America
since 1995. Prior to that time, he was a partner in the law firm of Ater Wynne
Hewitt Dodson & Skerritt, LLP. Mr. Wynne also serves on the Board of Directors
of Protocol Systems, Inc. Mr. Wynne received an undergraduate degree from
Willamette University and a J.D. from Willamette University.
HEIKKI T. HORSTIA. Mr. Horstia has served as a Director of the Company since
January 1991. Mr. Horstia is Senior Vice President, Finance of Metra
Corporation, a diversified manufacturing company. Mr. Horstia served as Vice
President, Finance for Metra from 1979 to 1991. Mr. Horstia received a B.Sc.
degree from the Helsinki School of Economics and Business Administration.
JAMES M. HURD. Mr. Hurd, co-founder of the Company, has served as President
and a Director of the Company since inception and has served as Chief
Executive Officer since December 1988. Prior to co-founding Planar, Mr. Hurd
held a wide variety of positions at Tektronix as a scientist and manager. Mr.
Hurd also serves on the Board of Directors of Integrated Measurement Systems,
Inc. Mr. Hurd received an undergraduate degree in physics from Lewis & Clark
College.
BOARD OF DIRECTORS COMMITTEES AND NOMINATIONS BY SHAREHOLDERS. The Board of
Directors acts as a nominating committee for selecting nominees for election
as directors. The Company's bylaws also permit shareholders to make
nominations for the election of directors, if such nominations are made
pursuant to timely notice in writing to the Company's Secretary. To be timely,
notice must be delivered to, or mailed to and received at, the principal
executive offices of the Company not less than 60 days nor more than 90 days
prior to the date of the meeting, provided that at least 60 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders. If less than 60 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be received by the Company not later than the
close of business on the tenth day following the date on which such notice of
the date of the meeting was mailed or such public disclosure was made. Public
disclosure of the date of the Annual Meeting was made by the issuance of a
press release on December 15, 1997. A shareholder's notice of nomination must
also set forth certain information specified in Article III, Section 3.16 of
the Company's bylaws concerning each person the shareholder proposes to
nominate for election and the nominating shareholder.
The Board of Directors has appointed a standing Audit Committee which,
during the fiscal year ended September 26, 1997, conducted two meeting. The
members of the Audit Committee currently are Messrs. Horstia and Wynne. The
Audit Committee reviews the scope of the independent annual audit, the
independent public accountants' letter to the Board of Directors concerning
the effectiveness of the Company's internal financial and accounting controls
and the Board of Directors' response to that letter, if deemed necessary, and
such other matters referred to the Committee. The Board of Directors also has
appointed a Compensation Committee which reviews executive compensation and
establishes executive compensation levels and also administers the Company's
stock option plans. During the fiscal year ended September 26, 1997, the
Compensation Committee held four meetings. The members of the Compensation
Committee currently are Messrs. Turnbull and Walker.
During fiscal year 1997 the Company's Board of Directors held 4 meetings.
With the exception of Mr. Horstia, each director attended at least 75% of the
aggregate of the total number of meetings held by the Board of Directors and
the total number of meetings held by all committees of the Board on which he
served during the period that he served. Mr. Horstia attended 50% of the
meetings held by the Board of Directors and the total number of meetings held
by all committees of the Board on which he served during the period that he
served.
See "Management -- Executive Compensation" for certain information regarding
compensation of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF ITS NOMINEES FOR DIRECTOR. If a quorum is present, the Company's
bylaws provide that directors are elected by a plurality of the votes cast by
the shares entitled to vote. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists at the Annual Meeting, but are
not counted and have no effect on the determination of whether a plurality
exists with respect to a given nominee.
3
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
James M. Hurd......................... 49 President, Chief Executive Officer
and Director
Christopher N. King................... 51 Executive Vice President and
Secretary
Jack Raiton........................... 53 Vice President, Chief Financial
Officer
Douglas K. Barnes..................... 39 Vice President
E. L. Herman.......................... 52 Vice President
Charles P. Hoke....................... 55 Vice President
Graham Rothon......................... 45 Vice President
</TABLE>
Information concerning the principal occupation of Messrs. Hurd is set forth
under "Election of Directors." Information concerning the principal occupation
during at least the last five years of the executive officers of the Company
who are not also directors of the Company is set forth below.
CHRISTOPHER N. KING. Dr. King, co-founder of the Company, has served as
Executive Vice President and Secretary of the Company since 1983 and Chief
Technical Officer since 1990. Dr. King served as Director of the Company from
1983 to 1990. Prior to co-founding Planar, Dr. King started the
electroluminescent development program at Tektronix in 1976. Dr. King received
a BS in physics from the University of California, Davis and a Ph.D. in
applied physics from Stanford University.
JACK RAITON. Mr. Raiton has served as Vice President and Chief Financial
Officer of the Company since April of 1996. Mr. Raiton served as Chief
Financial Officer of Smiths Home Furnishing from January 1995 to November
1995. Prior to that, Mr. Raiton served in various positions with Tektronix in
the finance area leaving as Corporate Controller. Mr. Raiton received a B.S.
in Mathematics from Oregon State University and an M.B.A. from University of
Washington.
DOUGLAS K. BARNES. Mr. Barnes has served as Vice President since November
1997 and General Manager of Planar America, a wholly owned subsidiary of the
Company, since August 1997. Since 1986, Mr. Barnes has held various positions
within Planar America including Director of Engineering, Quality and
Manufacturing. Mr. Barnes received an B.S. in Industrial Engineering from
Stanford University.
E. L. HERMAN. Mr. Herman has served as Vice President of the Company and
General Manager of Planar Advance, Inc., a wholly-owned subsidiary of the
Company, since August 1994, when Planar Advance acquired the avionics display
business of Tektronix, Inc. Prior to joining the Company, Mr. Herman served as
General Manager of the avionics display business of Tektronix, Inc. since
1992, and served as President of Tektronix Federal Systems, Inc. since 1987.
Mr. Herman received a B.A. in Mathematics from Kent State University and an
M.B.A. from the University of Oregon.
CHARLES P. HOKE. Mr. Hoke has served as Vice President of the Company and
General Manager of the Display Components business unit since November of
1997. Mr. Hoke served as General Manager of Planar Standish, Inc., a wholly-
owned subsidiary of the Company, since September 1997, when Planar Standish
acquired Standish Industries, Inc., a manufacturer of liquid crystal displays.
Prior to joining the Company, Mr. Hoke served as President and Chief Executive
Officer of Standish Industries, Inc. since 1988. Mr. Hoke received a B.S. in
Economics from University of Wisconsin and an M.B.A. from Marquette
University.
4
<PAGE>
GRAHAM ROTHON. Mr. Rothon has served as Vice President and General Manager
of Planar International since August 1993. Mr. Rothon joined Planar
International as Director of Marketing and Sales in August 1992. Mr. Rothon
served as President of Micronas, a manufacturer of semiconductors in Helsinki,
Finland, from July 1990 to July 1992. Mr. Rothon received an electronic
engineering degree from West London Polytechnic in England.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation of the Company's Chief Executive Officer and each of the four
other most highly compensated executive officers of the Company (the "named
executive officers") for the fiscal years ended September 26, 1997, September
27, 1996 and September 29, 1995.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES
------------------------ UNDERLYING
NAME AND PRINCIPAL STOCK OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS GRANTED COMPENSATION (1)
- ------------------ ---- ------ ----- ------------- ----------------
<S> <C> <C> <C> <C> <C>
James M. Hurd........... 1997 $216,251 $70,046 50,000 $5,846
President, Chief
Executive Officer 1996 208,471 15,349 110,000 4,143
and Director 1995 205,742 59,976 10,000 4,710
Curtis M. Stevens (2)... 1997 163,300 41,267 -- 4,174
Executive Vice Presi-
dent, 1996 134,050 16,205 76,000 4,750
Assistant Secretary,
Director 1995 127,869 47,124 7,000 4,576
Christopher N. King..... 1997 127,226 22,287 24,000 6,040
Executive Vice Presi-
dent, 1996 121,069 4,186 27,000 3,738
Chief Technical Officer
and Secretary 1995 120,150 21,420 5,000 3,634
Jack Raiton............. 1997 126,262 25,471 23,000 6,225
Vice President, Chief
Financial Officer, 1996 42,482(3) -- 30,000 192
Treasurer
E.L. Herman............. 1997 130,451 13,500 23,000 5,733
Vice President 1996 128,846 56,000 5,046
1995 130,943 39,048 1,000 4,750
</TABLE>
- --------
(1) The amounts set forth under All Other Compensation represent matching
amounts contributed on behalf of the named executive officers to the
Company sponsored 401(k) employee savings plan covering all the Company's
employees.
(2) Subsequent to September 26, 1997, Mr Stevens resigned his positions as an
officer of the Company.
(3) Mr. Raiton joined the Company as Vice President and Chief Financial
Officer in April 1996.
5
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning options granted to the
named executive officers during the fiscal year ended September 26, 1997 under
the Company's 1993 Stock Incentive Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES PRICE OPTION TERM(3)
OPTIONS IN FISCAL PER EXPIRATION -------------------
NAME GRANTED(1) 1997 SHARE(2) DATE 5% 10%
- ---- ---------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
James M. Hurd........... 50,000 21% $14.125 9/19/07 $474,699 $1,174,213
Curtis M. Stevens....... -- -- -- -- -- --
Christopher N. King..... 24,000 10% 14.125 9/19/07 227,855 563,622
Jack Raiton............. 23,000 9% 14.125 9/19/07 218,361 540,138
E.L. Herman............. 23,000 9% 14.125 9/19/07 218,361 540,138
</TABLE>
- --------
(1) Options granted in fiscal 1997 become exercisable starting 12 months after
the grant date, with one quarter of the options exercisable at that time
and with an additional 6.25% of such options becoming exercisable each
quarter thereafter.
(2) Options were granted at an exercise price equal to the fair market value
of the Company's Common Stock, as determined by reference to the closing
price reported on the Nasdaq National Market System on the last trading
day prior to the date of the grant.
(3) The potential realizable value is calculated based upon the term of the
option at its time of grant (10 years) and is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual
rate compounded annually for the entire term of the option and that the
option is exercised and sold on the last day of its term for the
appreciated price. The 5% and 10% assumed rates of appreciation are
derived from the rules of the Securities and Exchange Commission and do
not represent the Company's estimates or projection of the future Common
Stock price. There can be no assurance that the Common Stock will
appreciate at any particular rate or at all in future years.
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and unexercised options held as of September 26, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT FY-END OPTIONS AT FY-END(1)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(1) UNEXERCISABLE EXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James M. Hurd........... -- -- 98,198 112,502 $545,331 $105,156
Curtis M. Stevens....... 50,700 $587,994 25,623 42,877 43,006 70,431
Christopher N. King..... -- -- 18,262 38,938 50,868 23,181
Jack Raiton............. -- -- 8,125 44,875 11,250 33,750
E.L. Herman............. -- -- 23,438 26,657 22,957 47,267
</TABLE>
- --------
(1) Amounts reflected are based upon the market value of the underlying
securities at exercise date or fiscal year end, as appropriate, minus the
exercise price.
6
<PAGE>
DIRECTOR COMPENSATION
Non-employee directors of the Company receive a $5,000 annual retainer plus
$1,000 for attendance at each board meeting and $500 for attendance at each
committee meeting that is not in conjunction with a board meeting. Under
certain circumstances, the non-employee directors of the company are
reimbursed for out-of-pocket and travel expenses incurred in attending Board
meetings. Non-employee members of the Board of Directors participate in the
Company's 1993 Stock Option Plan for Non-employee Directors (the "1993 Non-
employee Director Plan"), which was adopted to promote the interests of the
Company and its shareholders by strengthening the Company's ability to attract
and retain experienced and knowledgeable non-employee directors and to
encourage them to acquire an increased proprietary interest in the Company.
Under the 1993 Non-employee Director Plan, a 10,000 share stock option is
granted to each new non-employee director at the time such person is first
elected or appointed to the Board. In addition, each non-employee director
receives a stock option annually after each annual meeting of shareholders.
The size of each director's annual option grant is based on his or her level
of service on the Board of Directors. Each non-employee director receives an
option to purchase 5,000 shares of Common Stock. An additional 2,000 share
stock option is granted to the non-employee director who is then serving as
the Chairman of the Board of Directors. An additional 1,000 share stock option
is granted to each non-employee director who is then serving as chairman of a
committee of the Board of Directors.
COMPENSATION REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION COMMITTEE REPORT
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Company is required to provide certain data and information in
regard to the compensation and benefits provided to the Company's Chief
Executive Officer and the four other most highly compensated executive
officers. In fulfillment of this requirement, the Compensation Committee has
prepared the following report for inclusion in this Proxy Statement.
EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee of the Board of Directors is composed entirely of
outside directors. The Compensation Committee is responsible for setting and
administering the policies and programs that govern both annual compensation
and stock ownership programs for the executive officers of the Company.
The Company's executive compensation policy is based on principles designed
to ensure that an appropriate relationship exists between executive pay and
corporate performance, while at the same time motivating and retaining
executive officers. Section 162(m) of the Internal Revenue Code imposes a
limitation on the deductibility of nonperformance-based compensation in excess
of $1 million paid to named executive officers. The Compensation Committee
believes that the Company should be able to continue to manage its executive
compensation program for named executive officers so as to preserve the
related federal income tax deductions.
EXECUTIVE COMPENSATION COMPONENTS
The key components of the Company's compensation program are base salary,
quarterly and annual incentive awards and equity participation. These
components are administered with the goals of providing total compensation
that is competitive in the marketplace, rewarding successful financial
performance and aligning executive officers' interests with those of
stockholders. The Compensation Committee reviews each component of executive
compensation on an annual basis and determines base salary and non-equity
incentives for executive officers. The Committee approves all stock option
grants.
BASE SALARY. Base salaries for executive officers are set at levels believed
by the Compensation Committee to be sufficient to attract and retain qualified
executive officers. Changes in base salaries to executive officers are based
on an evaluation of each executive's performance, as well as the performance
of the Company as a whole. In establishing base salaries, the Compensation
Committee not only considers the financial performance of the
7
<PAGE>
Company, but also the success of the executive officers in developing and
executing the Company's strategic plans, developing management employees and
exercising leadership. The Compensation Committee believes that executive
officer base salaries for 1997 were reasonable as compared to amounts paid by
companies of similar size.
PERFORMANCE INCENTIVE. The Compensation Committee believes that a
significant proportion of total cash compensation for executive officers
should be subject to attainment of specific Company earnings criteria. This
approach creates a direct incentive for executive officers to achieve desired
performance goals and places a significant percentage of each executive
officer's compensation at risk. Consequently, each year the Compensation
Committee establishes potential bonuses for executive officers based on the
Company's achievement of certain earnings criteria. For fiscal 1997, annual
bonuses equal to 10-33% of base salaries were paid to executive officers based
on the Company's achievement of such predetermined earnings criteria.
STOCK OPTIONS. The Compensation Committee believes that equity participation
is a key component of its executive compensation program. Stock options are
granted to executive officers primarily based on the officer's actual and
potential contribution to the Company's growth and profitability and
competitive marketplace practices. Option grants are designed to retain
executive officers and motivate them to enhance stockholder value by aligning
the financial interests of executive officers with those of stockholders.
Stock options also provide an effective incentive for management to create
shareholder value over the long term since the full benefit of the
compensation package cannot be realized unless an appreciation in the price of
the Company's Common Stock occurs over a number of years.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Consistent with the executive compensation policy and components described
above, the Compensation Committee determined the salary, bonus and stock
options received by James M. Hurd, Chief Executive Officer of the Company, for
services rendered in fiscal 1997. Mr. Hurd received a base salary of $215,000
for 1997. He also earned a $70,046 bonus. Mr. Hurd earned a bonus based upon
the Company's achieving particular earnings performance goals specified in
advance by the Compensation Committee. Mr. Hurd also received options to
purchase 50,000 shares of the Company's Common Stock at the market price on
the last trading day before the date of the grant, vesting over a four-year
period.
COMPENSATION COMMITTEE:
Gregory H. Turnbull, Chairman
William D. Walker
8
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the monthly cumulative total returns for the
Company, the Nasdaq Stock Market Index and an index of peer companies selected
by the Company.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG PLANAR SYSTEMS, NASDAQ STOCK MARKET (US COMPANIES)
AND SELF-DETERMINED PEER GROUP
<TABLE>
<CAPTION>
NASDAQ STOCK SELF-
Measurement Period PLANAR MARKET (US DETERMINED
(Fiscal Year Covered) SYSTEMS COMPANIES) PEER GROUP
- --------------------- ------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt-12/16/1993 $100 $100 $100
FYE 12/30/1993 $139 $102 $102
FYE 3/31/1994 $146 $97 $98
FYE 6/30/1994 $146 $89 $103
FYE 9/30/1994 $204 $96 $157
FYE 12/30/1994 $329 $94 $149
FYE 3/31/1995 $300 $99 $132
FYE 6/30/1995 $318 $110 $146
FYE 9/29/1995 $289 $122 $138
FYE 12/30/1995 $273 $120 $147
FYE 3/29/1996 $182 $127 $128
FYE 6/28/1996 $204 $138 $95
FYE 9/28/1996 $145 $137 $76
FYE 12/27/1996 $150 $138 $91
FYE 3/28/1997 $157 $126 $86
FYE 6/27/1997 $148 $141 $108
FYE 9/26/1997 $162 $171 $125
</TABLE>
The total cumulative return on investment (change in stock price plus
reinvested dividends) for each of the periods for the Company, the peer groups
and the NASDAQ Stock Market index is based upon the stock price or index on
December 16, 1993, the date of the Company's initial public offering.
The above graph compares the performance of the Company with that of the
Nasdaq Stock Market Index and a group of peer companies with the investment
weighted on market capitalization. Companies in the peer group are as follows:
In Focus Systems, Inc., Three Five Systems, Inc. and Kopin Corporation. The
past performance of the Company's Common Stock is not an indication of future
performance. There can be no assurance that the price of the Company's Common
Stock will appreciate at any particular rate or at all in future years.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act") requires the Company's directors and officers, and persons who own more
than 10% of a registered class of the Company's equity securities, to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission. Such persons also are required to furnish
the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it with
respect to fiscal 1997, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with for fiscal 1997.
9
<PAGE>
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the ownership
of the Common Stock as of December 1, 1997 with respect to: (i) each person
known by the Company to beneficially own more than 5% of the outstanding
shares of Common Stock, (ii) each of the Company's directors, (iii) each of
the Company's nominees for election as director, (iv) each of the Company's
named executive officers, and (v) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF COMMON STOCK
NAME AND BUSINESS ADDRESS BENEFICIALLY OWNED(1) OUTSTANDING
- ------------------------- ---------------------- -----------------------
<S> <C> <C>
State of Wisconsin Investment
Board (2)...................... 1,053,600 9.8%
P.O. Box 7842
Madison, WI 53707
T. Rowe Price Associates, Inc.
(3)............................. 805,000 7.5%
100 E. Pratt Street
Baltimore, MD 21202
Thompson Horstman & Bryant, Inc.
(4)............................ 561,600 5.2%
Park 80 West, Plaza Two
Saddle Brook, NJ 07663
Heikki T. Horstia............... 23,000 *
James M. Hurd................... 265,225 2.4%
Heinrich Stenger................ 2,050 *
Gregory H. Turnbull............. 30,204 *
William D. Walker............... 47,000 *
Steven E. Wynne................. 18,166 *
Douglas K. Barnes............... 19,994 *
E.L. Herman..................... 28,562 *
Charles P. Hoke................. 80,214 *
Christopher N. King............. 92,450 *
Jack Raiton..................... 11,625 *
Graham Rothon................... 36,375 *
Curtis M. Stevens............... 89,937 *
Executive Officers and Directors
as a group (11 persons)........ 642,544 5.8%
</TABLE>
- --------
*less than one percent
(1) Beneficial ownership is determined in accordance with rules of the SEC,
and includes voting power and investment power with respect to shares.
Shares issuable upon the exercise of outstanding stock options that are
currently exercisable or become exercisable within 60 days from December
1, 1997 are considered outstanding for the purpose of calculating the
percentage of Common Stock owned by such person, but not for the purpose
of calculating the percentage of Common Stock owned by any other person.
The number of shares that are issuable upon the exercise of options that
are currently exercisable or exercisable within 60 days of December 1,
1997 is as follows: Mr. Horstia -- 23,000; Mr. Hurd 106,949; Mr. Turnbull
-- 25,000; Mr. Walker -- 32,000; Mr. Wynne 17,666; Mr. Barnes--19,093, Mr.
Herman 28,562; Mr. Hoke--0, Mr. King -- 21,200; Mr. Raiton 10,625; Mr.
Rothon 36,375; Mr. Stevens--26,872 and all directors and officers as a
group 328,249. The table does not include shares subject to options that
will be granted to Messrs. Horstia, Turnbull, Stenger, Walker and Wynne
under the 1993 Stock Option Plan for Nonemployee Directors immediately
after the Annual Meeting.
(2) This information as to beneficial ownership is based on a Schedule 13G
filed by the State of Wisconsin Investment Board with the Securities and
Exchange Commission on January 24, 1997. The Schedule 13G states that as
of December 31, 1996 the State of Wisconsin Investment Board was the
beneficial owner of 1,053,600 shares of Common Stock as to which it had
sole voting and dispositive power.
10
<PAGE>
(3) This information as to beneficial ownership is based on a Schedule 13G
filed by T. Rowe Price Associates, Inc. with the Securities and Exchange
Commission on February 12, 1997. The Schedule 13G states that as of
December 31, 1996, T. Rowe Price Associates, Inc. was the beneficial owner
of 805,000 shares of Common Stock as to which it had sole dispositive
power.
(4) This information as to beneficial ownership is based on a Schedule 13G
filed by Thompson Horstman & Bryant, Inc. with the Securities and Exchange
Commission on March 14, 1997. The Schedule 13G states that as of December
31, 1996, Thompson Horstman & Bryant, Inc. was the beneficial owner of
561,600 shares of Common Stock as to which it had sole dispositive power.
11
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP to act as
independent auditors for the Company for the fiscal year ending September 25,
1998, subject to ratification of such appointment by the Company's
shareholders.
Unless otherwise indicated, properly executed proxies will be voted in favor
of ratifying the appointment of KPMG Peat Marwick LLP to audit the books and
accounts of the Company for the fiscal year ending September 25, 1998. No
determination has been made as to what action the Board of Directors would
take if the shareholders do not ratify the appointment.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if he or
she desires to do so and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement and
form of proxy relating to the Company's 1999 annual meeting of shareholders
must be received by the Company not later than September 7, 1998, pursuant to
the proxy soliciting regulations of the Securities and Exchange Commission
(the "SEC"). In addition, the Company's bylaws require that notice of
shareholder proposals and nominations for director be delivered to the
Secretary of the Company not less than 60 days nor more than 90 days prior to
the date of an annual meeting, unless notice or public disclosure of the date
of the meeting occurs less than 60 days prior to the date of such meeting, in
which event, shareholders may deliver such notice not later than the 10th day
following the day on which notice of the date of the meeting was mailed or
public disclosure thereof was made. Nothing in this paragraph shall be deemed
to require the Company to include in its proxy statement and form of proxy for
such meeting any shareholder proposal which does not meet the requirements of
the SEC in effect at the time.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any other matters to be presented for action by the shareholders at the
1998 Annual Meeting. If, however, any other matters not now known are properly
brought before the meeting, the persons named in the accompanying proxy will
vote such proxy in accordance with the determination of a majority of the
Board of Directors.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited personally or by telephone by
directors, officers and employees of the Company, who will not be specially
compensated for such activities. Also, Allen Nelson & Co. Incorporated may
solicit proxies at an approximate cost of $4,000 plus reasonable expenses.
Such solicitations may be made personally, or by mail, facsimile, telephone,
telegraph or messenger. Planar will also request persons, firms and companies
holding shares in their names or in the name of their nominees, which are
beneficially owned by others, to send proxy materials to and obtain proxies
from such beneficial owners. The Company will reimburse such persons for their
reasonable expenses incurred in that connection.
12
<PAGE>
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended September 26, 1997 accompanies this Proxy Statement. The Company is
required to file an Annual Report on Form 10-K for its fiscal year ended
September 26, 1997 with the Securities and Exchange Commission. Shareholders
may obtain, free of charge, a copy of the Form 10-K (without exhibits) by
writing to Jack Raiton, Planar Systems, Inc., 1400 N.W. Compton Drive,
Beaverton, Oregon 97006.
By Order of the Board of Directors
/s/ James M. Hurd
James M. Hurd
President and Chief Executive Officer
Beaverton, Oregon
January 5, 1998
13
<PAGE>
PLANAR SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Planar Systems, Inc., an Oregon corporation
(the "Company"), hereby appoints James M. Hurd and Gregory H. Turnbull, or
either of them, with full power of substitution in each, as proxies to cast all
votes which the undersigned shareholder is entitled to cast at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at 3:00 p.m. on
Thursday, February 12, 1998 at the Courtyard by Marriott - Hillsboro, 3050
Stucki Place, Hillsboro, Oregon, and any adjournments or postponements thereof
upon the following matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. UNLESS DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1, FOR
PROPOSAL 2 AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY OF THE BOARD
OF DIRECTORS AS TO OTHER MATTERS. The undersigned hereby acknowledges receipt of
the Company's Proxy Statement and hereby revokes any proxy or proxies previously
given.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
Please mark
your votes [X]
as indicated
1. Election of two directors for a three-year term.
[ ] FOR the nominees listed below (except as indicated below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
William D. Walker and Heinrich Stenger
Instruction: To withhold authority to vote for any nominee write that
nominee's name(s) in this space:
-----------------------------------------------------------------------------
2. Ratification of appointment of 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 of any adjournments or
postponements thereof.
Please check this box if you plan to attend the Annual Meeting. [ ]
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD TODAY, USING THE ENCLOSED ENVELOPE.
If you receive more than one Proxy Card, please sign and return all such cards
in the accompanying envelope.
Please sign below exactly as your name appears on this Proxy Card. If shares
are registered in more than one name, the signatures of all such persons should
sign. A corporation should sign in its full corporate name by a duly authorized
officer, stating his/her title. Trustees, guardians, executors and
administrators should sign in their official capacity, giving their full title
as such. If a partnership, please sign in the partnership name by authorized
person(s).
- -------------------------------------------------
Typed or Printed name(s)
- -------------------------------------------------
Authorized Signature
- -------------------------------------------------
Title or authority, if applicable
- -------------------------------------------------
Date
