<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.
<PAGE>
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF PLANAR (R) APPEARS HERE]
1400 N.W. COMPTON DRIVE
BEAVERTON, OR 97006
(503) 690-1100
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 4, 1999
----------------
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 4, 1999, at 3:00 p.m., local time, at 1600 N.W. Compton Drive,
Beaverton, Oregon for the following purposes:
1. ELECTION OF DIRECTORS. To elect three directors, two for a three-year
term and one for a one-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 24, 1999; 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 10, 1998 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
December 30, 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 4, 1999
--------
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 4, 1999, and at any
adjournments or postponements thereof, (the "Annual Meeting"). At the Annual
Meeting, shareholders will be asked to elect three 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 24, 1999, 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 December 30, 1998.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on December 10, 1998
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 4,486 beneficial holders of the
10,669,956 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 THREE 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 24, 1999. 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, three directors will be elected: two for a three-year
term and one for a one-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 any 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. 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. E. Kay Stepp was elected to the Board of Directors in 1998 to fill
a vacancy created by the resignation of one of the Company's directors, and
has been nominated for election at the Annual Meeting in the class of
directors in which such director served. 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 10, 1998, 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>
EXPIRATION OF
DIRECTOR EXPIRATION OF TERM FOR WHICH POSITION HELD
AGE SINCE CURRENT TERM NOMINATED WITH PLANAR
--- -------- ------------- -------------- --------------------------
<S> <C> <C> <C> <C> <C>
NOMINEES:
E. Kay Stepp........... 53 1998 1999 2000 Director
Gregory H. Turnbull.... 60 1986 1999 2002 Director
Steven E. Wynne........ 46 1996 1999 2002 Director
CONTINUING DIRECTORS:
James M. Hurd.......... 50 1983 2000 -- President, Chief Executive
Officer and Director
William D. Walker...... 68 1983 2001 -- Chairman of the Board
Heinrich Stenger....... 57 1997 2001 -- Director
</TABLE>
E. KAY STEPP. Ms. Stepp has served as a Director of the Company since
November 1998. Ms. Stepp formed and now operates Executive Solutions, Inc., a
consulting firm which provides consulting services to senior executives and
Boards of Directors. From 1989 to 1992, Ms. Stepp held the position of
President and Chief Operating Officer of Portland General Electric Company
("PGE"), a Portland, Oregon, investor owned utilities company. From 1978 to
1989 Ms. Stepp held various other positions at PGE including President of the
Energy Service Division, Vice President of Marketing and Operations and Vice
President of Human Resources and Administration. Ms. Stepp is Chairman of the
Board of Directors of Gardenburger, Inc. and serves on the Board of Directors
of Franklin Covey Company. Ms. Stepp also serves on the Boards of Directors of
several private companies, including Standard Insurance Company, Bank of the
Northwest and Working Assets. She is a former director of the Federal Reserve
Bank of San Francisco.
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 E. WYNNE. Mr. Wynne has served as a Director of the Company since
1996. He has served as President and Chief Executive Officer of addias America
since 1995. Prior to that time, he was a partner in the law firm of Ater Wynne
LLP. Mr. Wynne received an undergraduate degree from Willamette University and
a J.D. from Willamette University. Mr. Wynne also serves on the Board of
Directors of Protocol Systems, Inc.
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 received an undergraduate degree in physics from Lewis & Clark College.
Mr. Hurd also serves on the Board of Directors of Integrated Measurement
Systems, Inc.
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 Munish, Germany. Mr. Stenger served as Vice President
of European Operations for Electro Scientific Industries from 1977 to 1988.
Mr. Stenger received his engineering degree from the Engineering University
Munich, Germany.
BOARD OF DIRECTORS COMMITTEES AND NOMINATIONS BY SHAREHOLDERS. The Board of
Directors acted as a nominating committee for selecting nominees for election
as directors at the Annual Meeting. 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. 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 25, 1998, conducted two meetings. The
members of the Audit Committee currently are Messrs. Wynne and Stenger. 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 25, 1998, the
Compensation Committee held four meetings. The members of the Compensation
Committee currently are Messrs. Turnbull and Walker. In November 1998, the
Board of Directors appointed a Committee on Directors, which will be
responsible for performing the Board's annual self evaluation, locating
potential candidates to fill Board vacancies and selecting the nominees to
stand for election at each annual meeting of shareholders. The members of the
Committee on Directors currently are Ms. Stepp and Mr. Walker.
During fiscal year 1998 the Company's Board of Directors held 4 meetings.
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.
3
<PAGE>
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.
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......................... 50 President, Chief Executive Officer
and Director
Christopher N. King................... 53 Executive Vice President, Chief
Technical Officer and Secretary
Eric Apfelbach........................ 37 Vice President
Douglas K. Barnes..................... 40 Vice President
E. L. Herman.......................... 53 Vice President
Charles P. Hoke....................... 56 Vice President
Thomas Kingsley....................... 45 Vice President
Carolyn McKnight...................... 50 Vice President
Richard Prins......................... 53 Vice President
Jack Raiton........................... 54 Vice President, Chief Financial
Officer Treasurer, and Assistant
Secretary
</TABLE>
Information concerning the principal occupation of Mr. 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.
ERIC APFELBACH. Mr. Apfelbach has served as Vice President of Global Sales
since July 1998. From March 1998 to July 1998, he served as Vice President of
the Company and general manager of the Company's Liquid Crystal Display (LCD)
operations. Mr. Apfelbach joined the Company in September 1997 in connection
with the Company's acquisition of Standish Industries, Inc., where he had
served as Vice President of Operations since 1995. Previously, Mr. Apfelbach
worked as a process engineer in the semiconductor industry. He received his
bachelor's degree in chemical engineering from the University of Wisconsin.
DOUGLAS K. BARNES. Mr. Barnes has served as Vice President of Global
Manufacturing since July 1998. Mr. Barnes was elected Vice President of the
Company in November 1997 and served as general manager of the Company's
electroluminescent (EL) display operations in North America from August 1997.
Since 1986, Mr. Barnes has held various positions with the Company including
Director of Engineering, Quality and Manufacturing. Mr. Barnes received a B.S.
in Industrial Engineering from Stanford University.
4
<PAGE>
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 Company's Display Components business unit since
November of 1997. Mr. Hoke had served as general manager of the Company's LCD
operations since September 1997, when the Company acquired Standish
Industries, Inc. 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 the University of Wisconsin and an M.B.A.
from Marquette University.
THOMAS KINGSLEY. Mr. Kingsley has served as Vice President of the Company
since August 1998. He joined the Company's Display Components business unit to
oversee Global Marketing & Product Development. From December 1997 to August
1998 Mr. Kingsley was Senior Director of Corporate Development and Strategic
Marketing at Sharp Electronics Corporation--North America. Mr. Kingsley joined
Sharp Electronics in 1984, where he established its Northwest ASIC Service
business and served in a variety of positions. He has over twenty years
experience in the electronics industry in technical, sales and marketing
positions, with such companies as Xilinx, Gatefield, NeoCAD, Inc. and
Hamiton/Avnet Electronics. Mr. Kingsley received his B.S. in Engineering from
UCLA.
CAROLYN MCKNIGHT. Ms. McKnight has served as a Vice President of the Company
since March 1998. Prior to joining Planar she was an independent
organizational development consultant from 1994 to 1998, and previously
International Human Resources Director for Tektronix, Inc. Ms. McKnight
received her bachelor's degree from Tennessee Temple University and is
currently enrolled as a master's/doctoral candidate at Pacifica Graduate
Institute.
RICHARD PRINS. Mr. Prins has served as general manager of the Planar Display
Solutions business unit since February of 1998 and as a Vice President of the
Company since June of 1998. Prior to joining the Company, he was chief
executive officer of MicroPure, a company that produces ultra cleaning
technology for the semiconductor industry, from March 1997 to February 1998.
From March 1992 to March 1997, Mr. Prins served as President of Synektron,
Inc., a brushless DC motor and motion control company. Mr. Prins received a
bachelor's degree from Reed College and a master's degree in industrial
administration from Carnegie Mellon University.
JACK RAITON. Mr. Raiton has served as Vice President and Chief Financial
Officer of the Company since April 1996. Mr. Raiton served as Chief Financial
Officer of Smith's Home Furnishing from January 1995 to November 1995. Prior
to this, 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 the University of
Washington.
5
<PAGE>
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 25, 1998, September
26, 1997 and September 27, 1996.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION STOCK LONG-TERM
------------------------- OPTIONS INCENTIVE PLAN ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED PAYOUTS(1) COMPENSATION(2)
- ---------------------------- ---- -------- -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
James M. Hurd............ 1998 $250,577 $100,825 15,000 $115,000 $6,037
President and Chief
Executive 1997 216,251 70,046 50,000 -- 5,846
Officer and Director 1996 208,471 15,349 110,000 -- 4,143
Christopher N. King...... 1998 140,423 37,744 25,000 -- 5,837
Executive Vice President
and 1997 127,226 22,287 24,000 -- 6,040
Chief Technical Officer 1996 121,069 4,186 27,000 -- 3,738
Jack Raiton.............. 1998 139,423 34,223 10,000 115,000 4,659
Vice President and Chief 1997 126,262 25,471 23,000 -- 6,225
Financial Officer 1996 42,482(3) -- 30,000 -- 192
E.L. Herman.............. 1998 139,872 21,427 25,000 -- 5,897
Vice President 1997 130,451 13,500 23,000 -- 5,733
1996 128,846 56,000 5,046 -- --
Charles P. Hoke.......... 1998 170,117(4) 44,431 25,000 -- --
Vice President
</TABLE>
- --------
(1) The amounts set forth under Long-Term Incentive Plan payouts represent the
dollar value of shares of restricted stock granted during the fiscal year
ended September 25, 1998. Such shares will vest in fiscal year 2001 based
upon achievement of specified performance goals and, to the extent not
then-vested, will vest on the tenth anniversary of the award. The value of
these shares was calculated based upon the closing price of the Common
Stock on September 24, 1998.
(2) 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.
(3) Mr. Raiton joined the Company as Vice President and Chief Financial
Officer in April 1996.
(4) Mr. Hoke joined the Company as Vice President in September 1997.
6
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning options granted to the
named executive officers during the fiscal year ended September 25, 1998 under
the Company's 1993 Stock Incentive Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ----------------------
NAME GRANTED(1) FISCAL 1998 SHARE(2) DATE 5% 10%
- ---- ---------- ------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
James M. Hurd........... 15,000 4% $11.50 9/24/08 $ 108,484 $ 274,921
Christopher N. King..... 25,000 6% 11.50 9/24/08 180,807 458,201
Jack Raiton............. 10,000 2% 11.50 9/24/08 72,323 183,280
E.L. Herman............. 25,000 6% 11.50 9/24/08 180,807 458,201
Charles P. Hoke......... 25,000 6% 11.50 9/24/08 180,807 458,201
</TABLE>
- --------
(1) Options granted in fiscal 1998 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 unexercised stock options held as of September
25, 1998. There were no stock option exercises by named executive officers
during the fiscal year ended September 25, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END(1)
------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
James M. Hurd.............. 130,697 95,003 $477,599 $42,189
Christopher N. King........ 29,950 52,250 42,412 8,437
Jack Raiton................ 20,125 42,875 10,937 14,062
E.L. Herman................ 44,124 62,064 13,671 17,579
Charles P. Hoke............ 10,000 35,000 -- --
</TABLE>
- --------
(1) Amounts reflected are based upon the market value of the underlying
securities at fiscal year end minus the exercise price.
7
<PAGE>
DIRECTOR COMPENSATION
Nonemployee 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 nonemployee directors of the company are reimbursed
for out-of-pocket and travel expenses incurred in attending Board meetings.
Nonemployee members of the Board of Directors participate in the Company's
1993 Stock Option Plan for Nonemployee Directors (the "1993 Nonemployee
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 nonemployee directors and to encourage them to
acquire an increased proprietary interest in the Company. Under the 1993
Nonemployee Director Plan, a 10,000 share stock option is granted to each new
nonemployee director at the time such person is first elected or appointed to
the Board. In addition, each nonemployee 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 nonemployee director receives an option to purchase
5,000 shares of Common Stock. An additional 2,000 share stock option is
granted to the nonemployee director who is then serving as the Chairman of the
Board of Directors. An additional 1,000 share stock option is granted to each
nonemployee 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 and stock
option grants.
8
<PAGE>
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 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 1998 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 financial performance
criteria, including earnings and return on investment measures. 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 financial performance criteria. For fiscal
1998, annual bonuses equal to 15 percent to 40 percent of base salaries were
paid to the named executive officers based on the Company's achievement of
such predetermined earnings criteria.
STOCK GRANTS AND OPTIONS. The Compensation Committee believes that equity
participation is a key component of its executive compensation program. Stock
grants and options are awarded to executive officers primarily based on the
officer's actual and potential contribution to the Company's growth and
profitability and competitive marketplace practices. These awards 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 grants and 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 $250,577
for 1998. He also earned a $100,825 bonus. Mr. Hurd earned the bonus based
upon achieving particular financial performance goals specified in advance by
the Compensation Committee. Mr. Hurd also received options to purchase 15,000
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, and a
restricted stock grant of 10,000 shares which will vest in fiscal year 2001
based upon achievement of specified performance goals and, to the extent not
then-vested, will vest on the tenth anniversary of the award.
COMPENSATION COMMITTEE:
Gregory H. Turnbull, Chairman
William D. Walker
9
<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.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NASDAQ SELF
PLANAR STOCK MARKET DETERMINED
DATE SYSTEMS (US COMPANIES) PEER GROUP
- -------- ------- -------------- ----------
<S> <C> <C> <C>
12/16/93 100 100 100
12/23/93 118 101 95
3/25/94 155 104 114
6/24/94 154 92 100
9/30/94 204 102 161
12/30/94 329 101 153
3/31/95 300 110 136
6/30/95 318 126 150
9/29/95 289 141 142
12/29/95 273 143 151
3/29/96 182 149 131
6/29/96 204 161 97
9/27/96 146 168 77
12/27/96 171 176 101
3/27/97 170 170 90
6/27/97 143 196 118
9/26/97 173 229 141
12/26/97 146 207 138
3/27/98 180 250 116
6/26/98 158 255 104
9/25/98 159 241 71
</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 1998, 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 1998.
10
<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 10, 1998 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
NAME AND BUSINESS ADDRESS BENEFICIALLY OWNED(1) STOCK OUTSTANDING
- ------------------------- ---------------------- -----------------
<S> <C> <C>
EQSF Advisers, Inc. (2)............... 1,254,350 11.8%
M.J. Whitman Advisers, Inc.
Martin J. Whitman
767 Third Avenue
New York, NY 10017
State of Wisconsin Investment
Board (3)............................ 1,053,600 9.9%
P.O. Box 7842
Madison, WI 53707
T. Rowe Price Associates, Inc. (4).... 865,300 8.1%
100 E. Pratt Street
Baltimore, MD 21202
Dimensional Fund Advisors, Inc. (5)... 722,100 6.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Princeton Services, Inc. (6).......... 639,000 6.0%
800 Scudders Mill Road
Plainsboro, NJ 08536
James M. Hurd......................... 279,578 2.6%
Heinrich Stenger...................... 10,384 *
E. Kay Stepp.......................... 200 *
Gregory H. Turnbull................... 36,204 *
William D. Walker..................... 59,000 *
Steven E. Wynne....................... 27,500 *
E.L. Herman........................... 50,945 *
Christopher N. King (7)............... 92,450 *
Jack Raiton........................... 26,945 *
Charles P. Hoke....................... 95,088 *
Executive Officers and Directors as a
group (15 persons)................... 713,202 6.4%
</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
10, 1998 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 10,
1998 is as follows: Mr. Hurd--145,074; Mr. Stenger--8,334; Ms. Stepp--0;
Mr. Turnbull--31,000; Mr. Walker--39,000; Mr. Wynne--27,000; Mr. Herman--
50,687; Mr. King--34,200; Mr. Raiton--25,312; Mr. Hoke--13,125 and all
directors and officers as a group--407,237. The table does not include
shares subject to options that will be granted to Messrs. Turnbull,
Stenger, Walker and Wynne and Ms. Stepp under the 1993 Stock Option Plan
for Nonemployee Directors immediately after the Annual Meeting.
11
<PAGE>
(2) This information as to beneficial ownership is based on a Schedule 13G
filed by EQSF Advisers, Inc. ("EQSF"), M.J. Whitman Advisers, Inc.
("MJWA") and Martin J. Whitman ("Whitman") with the Securities and
Exchange Commission on May 26, 1998. The Schedule 13G states that (i) EQSF
is the beneficial owner of 807,300 shares of Common Stock as to which it
has sole voting and dispositive power; (ii) MJWA is the beneficial owner
of 447,050 shares of Common Stock as to which it has sole voting and
dispositive power; and (iii) Whitman is the controlling person of EQSF and
MJWA, but disclaims beneficial ownership of the shares of Common Stock
beneficially owned by such entities.
(3) 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 22, 1998. The Schedule 13G states that the
State of Wisconsin Investment Board is the beneficial owner of 1,053,600
shares of Common Stock as to which it has sole voting and dispositive
power.
(4) This information as to beneficial ownership is based on a Schedule 13G
filed by the T. Rowe Price Associates with the Securities and Exchange
Commission on February 10, 1998. The Schedule 13G states that T. Rowe
Price Associates, Inc. is the beneficial owner of 865,300 shares of Common
Stock, including 25,300 shares as to which it has sole voting and 865,300
shares as to which it has sole dispositive power.
(5) This information as to beneficial ownership is based on a Schedule 13G
filed by Dimensional Fund Advisors, Inc. with the Securities and Exchange
Commission on February 10, 1998. The Schedule 13G states that Dimensional
Fund Advisors, Inc. is the beneficial owner of 722,100 shares of Common
Stock, including 484,500 shares as to which is has sole voting power and
722,100 shares as to which it has sole dispositive power.
(6) This information as to beneficial ownership is based on a Schedule 13G
filed by Princeton Services, Inc. ("PSI"), Fund Asset Management, L.P.,
("FAM") and Merrill Lynch Special Value Fund, Inc. ("Special Value") with
the Securities and Exchange Commission on February 2, 1998. The Schedule
13G states that PSI, FAM and Special Value are the beneficial owners of
639,000 shares of Common Stock as to which each has shared voting and
dispositive power.
(7) Excludes 58,250 shares of Common Stock beneficially owned by Mr. King's
wife, as to which he disclaims beneficial ownership.
12
<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 24,
1999, 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 24, 1999. 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 2000 annual meeting of shareholders
must be received by the Company not later than September 1, 1999, 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
1999 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. 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.
13
<PAGE>
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended September 25, 1998 accompanies this Proxy Statement. The Company is
required to file an Annual Report on Form 10-K for its fiscal year ended
September 25, 1998 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
December 30, 1998
14
<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 William D. Walker, 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 4, 1999 at 1600 N.W. Compton Drive, Beaverton, 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)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark
your votes [X]
as indicated
FOR the nominees WITHHOLD AUTHORITY
listed below (except to vote for all
as indicated below) nominees listed below
[ ] [ ]
1. Election of directors.
Gregory H. Turnbull and Steven E. Wynne, each for a three-year term and
E. Kay Stepp for a one-year term.
Instruction: To withhold authority to vote for any nominee write that
nominee's name(s) in this space:
_______________________________________
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Ratification of appointment of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending September 24, 1998.
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting or 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, 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
________________________________________________________________________________
FOLD AND DETACH HERE
