<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 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:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[PLANAR SYSTEMS, INC. LOGO]
December 29, 2000
Dear Fellow Shareholder:
Our Annual Meeting is scheduled for Thursday, February 1, 2001. Attached
please find a copy of our proxy statement for this meeting. A copy of our 2000
Annual Report is also enclosed.
We look forward to seeing as many of our shareholders as are able to attend
the meeting. We recognize, however, that this is impractical for most of you.
For this reason, we have enclosed a form of proxy and return envelope that you
can use to ensure your shares are represented at the meeting.
At this meeting, in addition to the Election of Directors and Ratification
of the Appointment of Auditors, shareholders are being asked to vote on and
approve an amendment to your Company's 1996 Stock Incentive Plan. We believe
that the way we have structured this plan, and our compensation program
generally, successfully aligns the interests of our senior management with
those of our public shareholders. This compensation philosophy is a
fundamental part of our corporate strategy, and we believe it has been a major
factor in our recent success and record in delivering value to our
shareholders. For this reason, we believe the amendment to the Stock Incentive
Plan is in your best interests and deserves your support.
The amendment to the Stock Incentive Plan, as well as the other matters to
be considered at the meeting, are explained in greater detail in the proxy
statement, and we encourage you to review this information.
Please take a moment and sign, date and return the enclosed form of proxy.
This way your shares will be represented whether or not you are able to attend
the meeting. Many of our shareholders that hold their shares in "street-name"
will also have the alternatives of voting either by touch-tone telephone call,
or by Internet e-mail.
We thank you for your attention to this matter and for your continuing
support of your Company.
Very truly yours,
/s/ Balaji Krishnamurthy
Balaji Krishnamurthy
President and Chief Executive
Officer
<PAGE>
[PLANAR SYSTEMS, INC. LOGO]
1400 N.W. Compton Drive
Beaverton, OR 97006
(503) 690-1100
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 1, 2001
----------------
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 1, 2001, at 3:00 p.m., local time, at the Hilton Garden Inn, 15520 NW
Gateway Court (Hwy. 26 and Cornell Road) Beaverton, Oregon 97006 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. Approval of Amendment to 1996 Stock Incentive Plan. To approve an
amendment to the Planar Systems, Inc. 1996 Stock Incentive Plan to
increase the number of shares reserved for issuance thereunder from
1,200,000 to 2,100,000;
3. Ratification of Appointment of Auditors. To ratify the appointment by
the Board of Directors of KPMG LLP as independent auditors of the
Company for the fiscal year ending September 28, 2001; and
4. 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 15, 2000 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/ Balaji Krishnamurthy
Balaji Krishnamurthy
President and Chief Executive
Officer
Beaverton, Oregon
December 29, 2000
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 1, 2001
--------
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 1, 2001, 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, approve an amendment to the Company's 1996 Stock Incentive Plan,
ratify the appointment by the Board of Directors of KPMG LLP as independent
auditors of the Company for the fiscal year ending September 28, 2001, and
transact such other business as may properly come before the meeting or any
adjournments or postponements thereof. This Proxy Statement, together with the
enclosed proxy card, is first being mailed to shareholders of Planar on or
about January 3, 2001.
Solicitation, Voting and Revocability of Proxies
The Board of Directors has fixed the close of business on December 15, 2000
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 4,700 beneficial holders of the
11,062,647 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, FOR the amendment to the Company's 1996 Stock
Incentive Plan and FOR the ratification of the appointment of KPMG LLP as the
Company's independent auditors for the fiscal year ending September 28, 2001.
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.
<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. 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
directors 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 15, 2000, principal occupation or employment during
at least the past five years, the periods during which he or she has served as
a director of Planar and positions currently held with Planar.
<TABLE>
<CAPTION>
Expiration
Expiration of Term
Director of Current for Which
Age Since Term Nominated Position Held with Planar
--- -------- ---------- ---------- --------------------------
<S> <C> <C> <C> <C> <C>
Nominees:
Heinrich Stenger....... 59 1997 2001 2004 Director
William D. Walker...... 68 1983 2001 2004 Chairman of the Board
Carl Neun.............. 56 2000 2001 2002 Director
Continuing Directors:
Balaji Krishnamurthy... 47 1999 2003 -- President, Chief Executive
Officer and Director
E. Kay Stepp........... 55 1998 2003 -- Director
Gregory H. Turnbull.... 62 1986 2002 -- Director
Steven E. Wynne........ 48 1996 2002 -- Director
</TABLE>
Heinrich Stenger. Mr. Stenger has served as a Director of the Company since
October 1997. Mr. Stenger is Chief Executive Officer of EPP, Electronic
Production Partners GmbH located in Munich, 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.
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 retired as Vice-Chairman of the Board of Directors of Tektronix in
September, 2000. Mr. Walker received an electrical engineering degree from the
University of Missouri.
Carl Neun. Mr. Neun became a Director of the Company in December 2000. Mr.
Neun is Chairman of WireX Communications, Inc., a server appliance software
company. From March 1993 to January 2000, Mr. Neun was Senior Vice President
and Chief Financial Officer of Tektronix, Inc. a test and measurement company.
From September 1987 through March 1993 he was Senior Vice President and Chief
Financial Officer of Conner Peripherals, Inc., a disk drive company. Mr. Neun
is a director of Powerwave Technologies, Inc., SpeedFam-IPEC, Inc. and Radisys
Corporation.
2
<PAGE>
Balaji Krishnamurthy. Mr. Krishnamurthy has served as the President, CEO and
Director of the Company since September 1999. Prior to joining Planar, he
served as Vice President and General Manager for various business units of
Tektronix where his 15 year tenure from August, 1984 to September, 1999
included assignments in engineering, marketing and general management. Mr.
Krishnamurthy was with General Electric Co. from June, 1981 to June, 1984. Mr.
Krishnamurthy received his BS and MS in mathematics from Birla Institute of
Technology and Science, India and an MS and Ph.D. in computer science from the
University of Massachusetts.
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 and StanCorp Financial Group. Ms. Stepp also serves
on the Boards of Directors of several private companies, including 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.
Steven E. Wynne. Mr. Wynne has served as a Director of the Company since
1996. Mr. Wynne served as Chairman and Chief Executive Officer of eteamz.com
from June 2000 to December 2000. He also served as President and Chief
Executive Officer of adidas America from 1995 to 1999. 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 FLIR Systems,
Inc.
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 29, 2000, conducted three 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
3
<PAGE>
administers the Company's stock option plans. During the fiscal year ended
September 29, 2000, the Compensation Committee held three meetings. The
members of the Compensation Committee currently are Mr. Turnbull and Ms.
Stepp. The Committee on Directors is responsible for performing the Board's
annual self evaluation, locating potential candidates to fill Board vacancies
and recommending the nominees to stand for election at each annual meeting of
shareholders and held four meetings during fiscal year 2000. The members of
the Committee on Directors currently are Ms. Stepp and Mr. Walker.
During fiscal year 2000 the Company's Board of Directors held four 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.
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.
4
<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
---- --- --------
<S> <C> <C>
Balaji Krishnamurthy...... 47 President, Chief Executive Officer and Director
Christopher N. King....... 55 Executive Vice President, Chief Technical Officer
and Secretary
Steven J. Buhaly.......... 44 Vice President, Chief Financial Officer and
Assistant Secretary
Douglas K. Barnes......... 43 Vice President
Mark A. Ceciliani......... 41 Vice President
Michael J. Franzi......... 45 Vice President
Kimmo Karhunen............ 45 Vice President
Carolyn McKnight.......... 52 Vice President
Richard H. Phillips....... 47 Vice President
William R. Sproull........ 43 Vice President
</TABLE>
Information concerning the principal occupation of Mr. Krishnamurthy 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.
Steven J. Buhaly. Mr. Buhaly has served as Chief Financial Officer since
October 1, 2000 prior to which he served as Vice President of the Medical
Business Unit. Prior to joining Planar, Mr. Buhaly spent 15 years at Tektronix
in a variety of General Management, Finance, and Manufacturing roles. Mr.
Buhaly received his MBA from the University of Washington in 1984.
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
to July 1998. 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.
Mark A. Ceciliani. Mr. Ceciliani joined the Company in 1984 and served in a
variety of roles in the financial organization including controller, assistant
treasurer and treasurer between 1984 and 2000. In April 2000 he assumed his
current role as Vice President and General Manager of the Military
Transportation Business. Prior to joining Planar, Mr. Ceciliani worked as a
staff accountant for KPMG Peat Marwick for three years. Mr. Ceciliani received
a BS in Business Administration from Portland State University.
Michael J. Franzi. Mr. Franzi joined the Company in September of 2000 as
Vice President, American Sales and Marketing. Mr. Franzi has over 20 years
experience in technical sales and sales management, most recently serving as
Director of Strategic Operations for Conexant Systems (formerly Rockwell Semi-
Conductor) from September 1999 to September 2000, and prior to which he served
as part of the sales management team with Tektronix from December 1979 through
August 1999.
5
<PAGE>
Kimmo Karhunen. Mr. Karhunen joined the Company in October of 1999 serving
as Vice President and Managing Director Planar Europe. Prior to joining Planar
Mr. Karhunen held several sales and general management positions with
Tektronix, Inc., including positions in sales and marketing--Europe from 1994
through 1999. Currently Mr. Karhunen is based in Espoo, Finland. Mr. Karhunen
received a computer science degree from Unea University, Sweden and is
currently studying at the Helsinki Business School of Economics and Business
Administration. Fluent in Finnish, Swedish, English and German, Mr. Karhunen
is also an officer in the Finnish Reserve Forces.
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 H. Phillips. Mr. Phillips has been the Vice President and General
Manager of the Commercial Transportation Business Unit since May 2000. From
January 2000 through September 2000, Mr. Phillips was the Vice President of
Sales and Marketing, North America. Mr. Phillips joined Planar in December
1995 and has held various management positions in the sales organization.
William R. Sproull. Mr. Sproull joined the Company in June 1995. Since
February 2000 he has held the position of Vice President and General Manager
of the Industrial Business Unit. Prior to that he had been the general manager
of the Company's Microdisplay business.
6
<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 during the fiscal year
ended September 29, 2000 and each of the four other most highly compensated
executive officers of the Company (the "named executive officers") for the
fiscal years ended September 29, 2000, September 24, 1999 and September 25,
1998.
<TABLE>
<CAPTION>
Long-Term
Compensation
---------------------
Securities
Annual Underlying
Compensation Restricted Stock
Name and Principal ----------------- Stock Options All Other
Position Year Salary Bonus Awards(1) Granted Compensation(2)
------------------ ---- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balaji
Krishnamurthy(3)...... 2000 $350,000 $302,677 $321,875 269,647 $5,775
President and Chief
Executive
Officer
Christopher N. King.... 2000 232,692 125,863 -- 20,000 6,318
Executive Vice
President and Chief 1999 186,769 672 156,800 10,000 9,546
Technical Officer 1998 140,423 37,744 -- 25,000 5,837
Jack Raiton(4)......... 2000 212,032 86,477 -- 15,000 4,783
Vice President and
Chief Financial 1999 164,845 613 122,400 10,000 10,000
Officer 1998 139,423 34,223 115,000 10,000 4,659
Carolyn McKnight....... 2000 149,807 54,495 -- 23,136 5,811
Vice President 1999 134,690 10,613 92,000 10,000 3,717
1998 80,385 12,176 -- 10,000 --
Douglas K. Barnes...... 2000 165,577 60,046 -- 18,982 5,042
Vice President 1999 139,111 507 16,800 10,000 10,000
1998 125,000 24,933 287,500 -- 7,350
</TABLE>
--------
(1) The amounts set forth under Restricted Stock Awards represent the dollar
value of shares of restricted stock granted during the applicable fiscal
year calculated based upon the closing price of the Common Stock on the
date of grant. Restricted Stock Awards for 2000 include an award of 50,000
shares to Mr. Krishnamurthy which is scheduled to vest as follows: 20,000
shares at the date of grant and 15,000 shares each on the first and second
anniversaries of the grant date. Restricted Stock Awards for 1999 included
the following awards: Mr. King--15,000 shares; Mr. Raiton--12,000 shares
and Ms. McKnight--11,500 shares. Each such award is scheduled to vest on
May 24, 2001, subject to accelerated vesting as described below under
"Change in Control Agreements." Restricted Stock Awards for 1999 also
included the following awards: Mr. King--4,600 shares and Mr. Raiton--
3,300 shares. Each such award is scheduled to vest with respect to 25
percent of the award at each of May 24, 2000, May 24, 2001, May 24, 2002
and May 24, 2003. Restricted Stock Awards for 1998 included the following
awards: Mr. Raiton--10,000 shares and Mr. Barnes 25,000 shares. The award
to Mr. Raiton was scheduled to vest in fiscal 2001 based upon achievement
of specified performance goals and, to the extent not vested, to vest on
the tenth anniversary of the award. The award to Mr. Barnes is scheduled
to vest in part in each of fiscal 2001, 2002 and 2003 based upon specified
criteria and, to the extent not vested, to vest on the tenth anniversary
of the award.
(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. Krishnamurthy joined the Company on September 27, 1999.
(4) Mr. Raiton served as Vice President and Chief Financial Officer until
September 29, 2000.
7
<PAGE>
Stock Options
The following table sets forth information concerning options granted to the
named executive officers during the fiscal year ended September 29, 2000.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Number of Percent of Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to Exercise for Option Term(2)
Options Employees in Price Per Expiration -------------------
Name Granted Fiscal 2000 Share(1) Date 5% 10%
---- ---------- ------------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balaji Krishnamurthy.... 200,000(3) 26.62% $ 6.563 9/27/09 $784,865 $2,027,203
50,000(4) 6.66 6.431 9/27/09 202,441 513,026
19,647(6) 2.61 16.063 7/21/07 114,664 280,292
Christopher N. King..... 20,000(5) 2.66 6.375 9/27/09 80,184 203,202
Jack Raiton............. 15,000(5) 2.00 6.375 9/27/09 60,138 152,402
Carolyn McKnight........ 15,000(5) 2.00 6.375 9/27/09 60,138 152,402
8,136(6) 1.08 16.063 7/21/07 47,483 116,063
Douglas K. Barnes....... 10,000(5) 1.33 6.375 9/27/09 40,092 101,601
8,982(6) 1.20 16.063 7/21/07 52,421 128,132
</TABLE>
--------
(1) 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, or pursuant to the employment
agreement with Mr. Krishnamurthy.
(2) 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.
(3) Mr. Krishnamurthy's option to purchase 200,000 shares will vest as
follows: 25 percent of the shares vest as of September 27, 2000 and,
thereafter, 6.25 percent of the options will vest on the last day of each
quarter, beginning with the quarter ending December 31, 2000.
(4) Mr. Krishnamurthy's option to purchase 50,000 shares will vest as follows:
20,000 shares as of September 27, 1999 and 15,000 shares on that date for
the next two years.
(5) These options 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.
(6) These options will vest as follows: 33.33 percent on the first anniversary
of the grant and each of the next two anniversaries thereafter, if a
specified target stock price has been achieved for thirty consecutive
trading days during the period between each anniversary date, but in any
event all options will vest on the fifth anniversary date of each grant.
8
<PAGE>
Option Exercises and Holdings
The following table provides information, with respect to the named
executive officers, concerning the shares acquired during fiscal 2000 upon the
exercise of stock options, the related value realized and the number and value
of unexercised stock options held as of September 29, 2000.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Options Exercised in Underlying Unexercised In-the-Money Options at
Last Fiscal Year(1) Options at FY-End FY-End(2)
----------------------- ------------------------- -------------------------
Number of Value
Name Shares Realized Exercisable Unexercisable Exercisable Unexercisable
---- ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balaji Krishnamurthy.... -- -- 62,500 207,147 $755,463 $2,316,733
Christopher N. King..... 700 $3,225 70,499 41,001 577,210 381,847
Jack Raiton............. -- -- 55,999 22,001 379,183 199,317
Carolyn McKnight........ -- -- 15,000 28,136 129,219 222,880
Douglas K. Barnes....... -- -- 36,725 32,232 277,909 263,641
</TABLE>
--------
(1) The value realized is based on the difference between the market price at
the time of exercise and the applicable exercise price.
(2) Amounts reflected are based upon the market value of the underlying
securities at fiscal year end minus the exercise price.
Employment Agreements
The Company has entered into an employment agreement (the "Employment
Agreement") with Balaji Krishnamurthy for a term ending September 24, 2001,
provided that on that date and each anniversary thereafter the term of the
Employment Agreement will automatically be extended for one additional year
unless at least 90 days prior to such anniversary Mr. Krishnamurthy or the
Company have given notice that the Employment Agreement will not be extended.
If Mr. Krishnamurthy resigns or is terminated for Cause (as defined in the
Employment Agreement and described below) all pay and other benefits under the
Employment Agreement will cease as of the effective date of the termination or
resignation. In the event of Mr. Krishnamurthy's death during the term of the
Employment Agreement, his designated beneficiary will receive a lump sum
payment equal to eighteen months base salary at his then current rate. In the
event of Mr. Krishnamurthy's termination due to disability during the term of
the Employment Agreement, the Company will pay him a lump sum amount equal to
eighteen months base salary at his then current rate. If Mr. Krishnamurthy is
terminated due to death or disability after the second anniversary of the date
of the Employment Agreement, all outstanding stock options and stock grants
held by Mr. Krishnamurthy on the effective date of such termination that
would, by their terms, vest within eighteen months of the effective date of
such termination will become fully vested as of the date of termination. If
Mr. Krishnamurthy is terminated without Cause or if the Company elects not to
extend the term of the Employment Agreement, the Company will continue to pay
his base salary, in accordance with the Company's normal payroll practices,
for a period of eighteen months. In addition, if Mr. Krishnamurthy elects to
continue his group health benefits the Company will pay the premiums for a
period of up to eighteen months. Further, all outstanding stock options and
stock grants held by Mr. Krishnamurthy, at the effective date of his
termination, that would by their terms vest within eighteen months of the
effective date will become fully vested as of the effective date of his
termination. In the event that Mr. Krishnamurthy's employment is terminated by
the Company after a Change of Control (as defined in the Employment Agreement
and described below) for any reason other than for Cause or Mr. Krishnamurthy
elects to terminate his employment within two years after a Change of Control
for Good Reason (as defined in the Employment Agreement and described below)
the Company will make a lump sum payment to Mr. Krishnamurthy in an amount
equal to (i) two times the higher of (A) his base salary at the rate in effect
on the date of the Change of Control, or (B) his base salary at the rate in
effect on the date of the Change of Control termination, plus (ii) an amount
equal to two times the higher of (A) his target bonus for the year in which
the Change of Control termination occurs, or (B) his target bonus for the year
in which the Change of Control occurs. In addition, the Company will continue
to pay the premiums for
9
<PAGE>
Mr. Krishnamurthy's health benefits and disability insurance for a period of
twenty-four months. Further, all outstanding stock options and stock grants
held by Mr. Krishnamurthy that would, by their terms, vest within eighteen
months (twenty-four months with respect to options granted after September 26,
2000) of the Change of Control will become fully vested. For purposes of the
Employment Agreement, "Good Reason" will mean: (i) a change in
Mr. Krishnamurthy's responsibilities, title, offices as in effect immediately
prior to the Change of Control, or any removal from or failure to re-elect him
to any such positions, that has the effect of materially diminishing his
responsibilities or authority; (ii) a reduction in his base salary as in
effect immediately prior to the Change in Control or failure to pay any other
compensation or benefits which he is entitled; (iii) a requirement by the
Company that he be based more than 25 miles from Beaverton, Oregon, (iv) the
Company's failure to continue in effect any material compensation or other
employee benefit plan, program or arrangement in effect before the Change of
Control, or any act or omission that would adversely affect Mr.
Krishnamurthy's continued participation in any such plan, program or
arrangement or materially reduce the benefits under such plan, program or
arrangement, (v) the failure by the Company to require any successor or assign
of the Company to assume the Company's obligations under the Employment
Agreement, and (vi) any material breach of the Employment Agreement by the
Company which is not remedied for a period of 30 days following written notice
by Mr. Krishnamurthy to the Company. For purposes of the Employment Agreement
a "Change of Control" includes (i) any merger or consolidation transaction
that results in the shareholders of the Company immediately before such
transaction owning less than 50 percent of the total combined voting power of
the common stock and other securities entitled to vote generally in the
election of directors of the surviving corporation in the transaction, (ii)
the acquisition by any person or entity or group of persons or entities acting
in concert of 25 percent or more of the total combined voting power of the
Company's then issued and outstanding securities, (iii) the sale of all or
substantially all of the assets of the Company to any person or entity which
is not a wholly-owned subsidiary of the Company, or (iv) the liquidation of
the Company. For purposes of the Employment Agreement "Cause" means the
failure to satisfactorily perform the duties assigned as an executive officer
within a certain period after notice of such failure is given and commission
of certain illegal or wrongful acts.
Change in Control Agreements
The Company has entered into change in control agreements (the "Agreements")
with certain executive officers, including Christopher N. King, Carolyn
McKnight and Douglas K. Barnes. Each of the Agreements is for a term ending
September 26, 2002, provided that on that date and each anniversary
thereafter, the term of the Agreements will be automatically extended by one
additional year unless either party gives 90 days prior written notice that
the term of an agreement will not be so extended. If a "Change in Control" (as
defined in the Agreements and described below) occurs during the term of
Agreements, the Agreements will continue in effect until two years after the
Change in Control.
If an executive officer's employment with the Company is terminated within
two years after a Change in Control either by the Company without "Cause" (as
defined in the Agreements and described below) or by the executive officer for
"Good Reason" (as defined in the Agreements and described below), the
executive officer will be entitled to receive his full base salary through the
date of termination and any benefits or awards (both cash and stock) that have
been earned or are payable through the date of termination plus (i) a lump sum
payment equal to one year's base salary (18 month's base salary in the case of
Mr. King) and (ii) an amount equal to one times (1.5 times in the case of Mr.
King) the target bonus for the year of termination or Change in Control. In
addition, the executive officer would be entitled to the continuation of
health and insurance benefits for certain periods, and all outstanding
unvested stock options granted after the date of the Agreements that would
vest during the one year (eighteen months in the case of Mr. King) period
after the date of termination would immediately become fully vested.
If an executive officer's employment with the Company is terminated after a
Change in Control either by the Company for Cause or as a result of the
executive officer's disability or death, the executive officer will be
entitled to receive his full base salary through the date of termination plus
any benefits or awards (both cash and stock) that have been earned or are
payable through the date of termination.
10
<PAGE>
For purposes of the Agreements, a "Change in Control" includes (i) any
merger or consolidation to which the Company is a party if the individuals and
entities who were shareholders of the Company immediately prior to the
effective date of such merger or consolidation would have beneficial ownership
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less
than 50% of the total combined voting power for election of directors of the
surviving corporation immediately following the effective date of such merger
or consolidation, (ii) the acquisition by any person or entity, or group of
associated persons or entities, of 25% or more of the Company's total combined
voting power, (iii) the liquidation of the Company or the sale or other
transfer of substantially all of its assets, and (iv) a change in the
composition of the Board of Directors such that the directors in office as of
the effective date of the Agreements, and/or their successors who were elected
by or on the recommendation of the directors in office as of the effective
date of the Agreements, do not constitute at least a majority of the Board of
Directors. For purposes of the Agreements, "Cause" means (i) fraud or
misrepresentation, (ii) theft or embezzlement of Company assets, (iii)
intentional violations of law involving moral turpitude, (iv) continued
failure to satisfactorily perform reasonably assigned duties for a period of
30 days after a written demand for such satisfactory performance which
specifically and with reasonable detail identifies the manner in which it is
alleged that such duties have not been satisfactorily performed (provided,
however, that no such termination for Cause will be effective until after the
executive officer, together with their counsel, has had an opportunity to be
heard before the Board of Directors), and (v) any material breach of the
Agreements which, if curable, has not been cured within 30 days after written
notice to the executive officer of such breach. For purposes of the
Agreements, "Good Reason" includes (i) a change in the executive officer's
responsibilities, titles or offices as in effect immediately prior to the
Change in Control, or any removal from or failure to re-elect to any of such
positions, which has the effect of materially diminishing the executive
officer's responsibility or authority, (ii) a reduction in the executive
officer's base salary as in effect immediately prior to the Change in Control
or any failure to pay compensation or benefits otherwise due to the executive
officer, (iii) a requirement that the executive officer be based anywhere
other than within 25 miles of their job location before the Change in Control,
(iv) the Company's failure to continue in effect any material compensation or
employee benefit plan, program or arrangement in effect before the Change in
Control, or any act or omission that would adversely affect the executive
officer's continued participation in any such plan, program or arrangement or
materially reduce the benefits under such plan, program or arrangement, (v)
the failure by the Company to require any successor or assign of the Company
to assume the Company's obligations under the Agreements, and (vi) any
material breach of the Agreements by the Company which is not remedied for a
period of 30 days following written notice by the executive officer to the
Company.
The Company has also entered into Stock Option Agreements and Restricted
Stock Award Agreements with certain of the named executive officers that
provide for accelerated vesting of the stock options or restricted stock that
are subject to such agreements in the event that the executive officer
terminates his employment with the Company for "good reason" following a
"change of control" of the Company. For purposes of these agreements, "Good
Reason" includes (i) a change in the executive officer responsibilities,
titles or offices that has the effect of diminishing such executive officer's
responsibility or authority, (ii) a reduction in the executive officer's
salary or the failure to pay compensation otherwise due to the executive
officer, (iii) a requirement that the executive officer be based anywhere
other than within 24 miles of his job location before the Change of Control,
(iv) the Company's failure to maintain or continue any material compensation
or employee benefit plan, program or arrangement in effect before the Change
of Control, (v) a material breach of the agreement by the Company that is not
remedied within 60 days after notice of such breach. For purposes of these
Agreements, a "Change of Control" includes (i) shareholder approval of any
merger or consolidation transaction that results in the shareholders of the
Company immediately before such transaction owning less than 50 percent of the
total combined voting power of the surviving corporation in the transaction,
(ii) the acquisition by any person of 25 percent or more of the Company's
total combined voting power, (iii) shareholder approval of the liquidation of
the Company or the sale of substantially all of the Company's assets.
11
<PAGE>
Director Compensation
Nonemployee directors of the Company receive a $15,000 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
shareholders. 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 also approves all stock and
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 of executive
12
<PAGE>
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 fiscal year 2000 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
2000 annual bonuses equal to 36.26 percent to 86.48 percent of base salaries
were paid to the named executive officers based on the Company's achievement
of such predetermined financial performance 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 shareholder value by
aligning the financial interests of executive officers with those of
shareholders. 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
Mr. Krishnamurthy has served as the Company's President and Chief Executive
Officer since September 27, 1999. At that time, Mr. Krishnamurthy and the
Company entered into an Executive Employment Agreement. Pursuant to Mr.
Krishnamurthy's Employment Agreement, Mr. Krishnamurthy received a base salary
for fiscal 2000 of $350,000, a restricted stock award of 50,000 shares of
Common Stock, an option to purchase 200,000 shares of Common Stock at an
exercise price of $6.563 and an option to purchase 50,000 shares of Common
Stock at $6.431. Mr. Krishnamurthy earned a cash bonus of $302,677 for fiscal
2000 based on the Company's achievement of certain financial performance
criteria.
COMPENSATION COMMITTEE:
Gregory H. Turnbull, Chairman
E. Kay Stepp
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during fiscal year 2000 were Ms.
Stepp and Mr. Turnbull. Mr. Turnbull served as Chairman of the Committee for
all of fiscal year 2000.
13
<PAGE>
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is comprised of two directors
who are considered independent under applicable Nasdaq Stock Market rules. The
Committee operates under a written charter adopted by the Board on May 5,
2000. A copy of the Audit Committee charter is attached to this proxy
statement as Appendix A.
The primary purpose of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. The Audit Committee annually reviews and
recommends to the Board the selection of the Company's independent
accountants, subject to shareholder ratification.
Management is responsible for preparing the Company's financial statements.
The independent accountants are responsible for performing an independent
audit of the Company's audited financial statements in accordance with
generally accepted auditing standards and to issue a report thereon. The
Committee's responsibility is to monitor and oversee these processes.
In this context, the Committee has reviewed and discussed the audited
financial statements with management and the independent accountants. The
Committee also has discussed with the independent accountants the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Company's independent accountants also provided to the Committee the
written disclosures and letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the
Committee discussed with the independent accountant's that firm's
independence.
Based on the above discussions and review with management and the
independent accountants, the Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended September 29, 2000 for filing with the
SEC.
AUDIT COMMITTEE
Steven E. Wynne
Heinrich Stenger
14
<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]
Date A B C
Label PLANAR SYSTEMS, INC. NASDAQ STOCK PEER GROUP
1 9/29/95 100 100 100
2 9/27/96 50.62 119.04 54.12
3 9/26/97 59.88 162.61 101.64
4 9/25/98 54.94 170.18 52.37
5 9/24/99 31.48 270.06 114.81
6 9/29/2000 91.98 358.99 359.58
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 2000, 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 2000,
except for Mr. Kimmo Karhunen who filed a Form 4 in July, 2000, 30 days after
the required filing date.
15
<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 15, 2000 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>
State of Wisconsin Investment
Board(2)............................. 1,478,500 13.36%
P.O. Box 7842
Madison, WI 53707
T. Rowe Price Associates, Inc.(3)..... 754,100 6.82
100 E. Pratt Street
Baltimore, MD 21202
Dimensional Fund Advisors, Inc.(4).... 753,600 6.81
1299 Ocean Avenue
Santa Monica, CA 90401
Merrill Lynch & Co., Inc.(5).......... 968,100 8.75
World Financial Center
250 Vesey Street
New York, NY 10381
Benson Associates, LLC(6)............. 599,301 5.42
111 SW Fifth Avenue
Suite 2130
Portland, OR 97204
Balaji Krishnamurthy.................. 115,308 1.04
Carl Neun............................. -- --
Heinrich Stenger...................... 27,050 *
E. Kay Stepp.......................... 19,667 *
Gregory H. Turnbull................... 65,404 *
William D. Walker..................... 99,000 *
Steven E. Wynne....................... 39,500 *
Douglas K. Barnes..................... 47,662 *
Carolyn McKnight...................... 18,329 *
Christopher N. King(7)................ 114,541 1.03
Jack Raiton........................... 14,312 *
Executive Officers and Directors as a
group (18 persons)................... 679,075 5.87
</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
15, 2000 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
16
<PAGE>
60 days of December 15, 2000 is as follows: Mr. Krishnamurthy--78,125; Mr.
Stenger--25,000; Ms. Stepp--18,667; Mr. Turnbull--43,000; Mr. Walker--
63,000; Mr. Wynne--39,000; Mr. King--75,436; Mr. Raiton--14,312; Ms.
McKnight--16,875; Mr. Barnes--37,662; and all directors and officers as a
group--506,762. The table does not include shares subject to options that
will be granted to Messrs. Turnbull, Neun, Stenger, Walker and Wynne and
Ms. Stepp 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/A
filed by the State of Wisconsin Investment Board with the Securities and
Exchange Commission on February 2, 2000. The Schedule 13G/A states that
the State of Wisconsin Investment Board is the beneficial owner of
1,478,500 shares of Common Stock as to which it has sole voting and
dispositive power.
(3) This information as to beneficial ownership is based on a Schedule 13G/A
filed by the T. Rowe Price Associates with the Securities and Exchange
Commission on February 8, 2000. The Schedule 13G/A states that T. Rowe
Price Associates, Inc. is the beneficial owner of 754,100 shares of Common
Stock, including 98,000 shares as to which it has sole voting power and
754,100 shares as to which it has sole dispositive power.
(4) This information as to beneficial ownership is based on a Schedule 13G/A
filed by Dimensional Fund Advisors, Inc. with the Securities and Exchange
Commission on February 3, 2000. The Schedule 13G/A states that Dimensional
Fund Advisors, Inc. is the beneficial owner of 753,600 shares of Common
Stock, as to which it has sole voting and dispositive power.
(5) This information as to beneficial ownership is based on a Schedule 13G/A
filed by Merrill Lynch & Co., Inc. ("Merrill Lynch") (on behalf of Merrill
Lynch Asset Management Group), with the Securities and Exchange Commission
on February 7, 2000. The Schedule 13G/A states that Merrill Lynch has
shared voting and dispositive power with respect to 968,100 shares of
Common Stock, and that Merrill Lynch disclaims beneficial ownership of
such shares.
(6) This information as to beneficial ownership is based on a Schedule 13G
filed by Benson Associates, LLC with the Securities and Exchange
Commission on February 16, 2000. The Schedule 13G states that Benson
Associates, LLC is the beneficial owner of 599,301 shares of Common
Stock,as to which it has sole voting and dispositive power.
(7) Excludes 39,105 shares of Common Stock beneficially owned by Mr. King's
wife, as to which he disclaims beneficial ownership.
17
<PAGE>
APPROVAL OF AMENDMENT TO THE 1996 STOCK INCENTIVE PLAN
The Board of Directors is requesting that the Company's shareholders approve
an amendment to the Company's 1996 Stock Incentive Plan (the "1996 Plan") to
increase the number of shares of Common Stock that are reserved for issuance
under the 1996 Plan. A total of 1,200,000 shares of Common Stock have been
reserved for issuance under the 1996 Plan. As of December 15, 2000,
approximately 176,500 shares remained available for grant under the 1996 Plan.
The Board of Directors believes that additional shares will be needed under
the 1996 Plan to provide appropriate incentives to employees and others.
Accordingly, the Board of Directors has approved an amendment to the 1996 Plan
that would increase from 1,200,000 shares to 2,100,000 shares the number of
shares of Common Stock that are reserved for issuance under the 1996 Plan.
The purpose of the 1996 Plan is to attract, retain and reward individuals
who can and do contribute to the Company's success by providing employees and
consultants an opportunity to share in the equity of the Company and to more
closely align their interests with the Company and its shareholders. In the
high technology industry in which the Company competes, stock options are an
integral part of the total compensation package. The Company's practice has
been to grant stock options broadly throughout the organization to recognize
key performers and to provide a link between employee and Company performance.
To date more than 40% of employees have been issued stock option grants, with
approximately 53% of the options granted to employees who are not officers of
the Company. Because the individuals who will be granted stock options under
the 1996 Plan and the number of stock options that will be granted will be
determined by the Compensation Committee in its discretion, it is not possible
to identify the officers, directors and employees who will be granted stock
options under the 1996 Plan in the future or the number of stock options that
will be granted to such persons.
To focus executive management on shareholder value creation, a broad
spectrum of short and long term compensation programs have been implemented
and indexed to shareholder value. These programs include cash bonuses
contingent on meeting financial performance targets, a three-year stock option
incentive requiring the performance of the Company's stock to exceed the
Company's cost of capital, and a requirement of executive management to buy
and hold the Company's stock. The additional options requested in this Proxy
are integral to these shareholder-friendly incentive plans.
The Board of Directors considers it critical to be able to continue to offer
stock incentives in order to attract and develop the talented, vital
individuals who can contribute to the Company's growth and success in a very
competitive environment. Doing so provides significant motivational and
performance benefits by providing employees and consultants an ownership
perspective, teamed with the appreciation that comes with growing the value of
the Company. Equity participation is the most effective means for more closely
aligning their interests with the long-range goals of the Company and its
shareholders. Lack of stock incentives would put the Company at a serious
disadvantage in recruiting and retaining key people. For these reasons,
shareholders are encouraged to approve the amendment to the 1996 Plan. The
following is a summary of the basic terms and provisions of the 1996 Plan.
The 1996 Plan provides for grants of both "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and "nonqualified stock options" which are not qualified for
treatment under Section 422 of the Code, and for direct stock grants and sales
to employees or consultants of the Company. No employee may receive options
under the 1996 Plan for more than 200,000 shares in any one fiscal year,
except that options for up to an additional 200,000 shares may be granted in
connection with a person's initial employment with the Company.
The administration of the 1996 Plan has been delegated to the Compensation
Committee of the Board of Directors (the "Committee"). In addition to
determining who will be granted options, the Committee has the authority and
discretion to determine when options will be granted and the number of options
to be granted and whether the options will be incentive stock options or
nonqualified stock options. Only "employees" of the Company as that term is
defined in the Code will be entitled to receive Incentive Stock Options. See
"Federal Income Tax Consequences" below. The Committee also may determine the
time or times when each option becomes exercisable, the duration of the
exercise period for options and the form or forms of the instruments
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evidencing options granted under the Plan. The Committee also may construe the
Plan and the provisions in the instruments evidencing options granted under
the Plan to employee and officer participants and is empowered to make all
other determinations deemed necessary or advisable for the administration of
the Plan.
The term of each option granted under the 1996 Plan will be ten years from
the date of grant, or such shorter period as may be established at the time of
the grant. An option granted under the 1996 Plan may be exercised at such
times and under such conditions as determined by the Compensation Committee.
If a person who has been granted an option ceases to be an employee or
consultant of the Company, such person may exercise that option only during
the three-month period after the date of termination, and only to the extent
that the option was exercisable on the date of termination. If a person who
has been granted an option ceases to be an employee or consultant as a result
of such person's total and permanent disability, such person may exercise that
option at any time within twelve months after the date of termination, but
only to the extent that the option was exercisable on the date of termination.
Except as otherwise provided by the Compensation Committee at the time an
option is granted, no option granted under the 1996 Plan is transferable other
than at death, and each option is exercisable during the life of the optionee
only by the optionee. In the event of the death of a person who has received
an option, the option generally may be exercised by a person who acquired the
option by bequest or inheritance during the twelve-month period after the date
of death to the extent that such option was exercisable at the date of death.
The exercise price of incentive stock options granted under the 1996 Plan
may not be less than the fair market value of a share of Common stock on the
last market trading day prior to the date of grant of the option. For the
nonqualified stock options, the exercise price may be less than, equal to, or
greater than the fair market value of the Common Stock on the date of grant,
provided that the Compensation Committee must specifically determine that any
option grant at an exercise price less than fair market value is in the best
interests of the Company. The consideration to be paid upon exercise of an
option, including the method of payment, will be determined by the
Compensation Committee and may consist entirely of cash, check, shares of
Common Stock, such other consideration and method of payment permitted by
applicable law or any combination of such methods of payment as permitted by
the Compensation Committee. The Compensation Committee has the authority to
reset the price of any stock option after the original grant and before
exercise. In the event of stock dividends, splits, and similar capital
changes, the 1996 Plan provides for appropriate adjustments in the number of
shares available for option and the number and option prices of shares subject
to outstanding options.
In the event of a proposed sale of all or substantially all of the assets of
the Company, or a merger of the Company with and into another corporation,
outstanding options shall be assumed or equivalent options shall be
substituted by such successor corporation, unless the Committee provides all
option holders with the right to immediately exercise all of their otions,
whether vested or unvested. In the event of a proposed dissolution or
liquidation of the Company, outstanding options will terminate immediately
prior to the consummation of such prosposed action, unless otherwise provided
by the Committee. In such a situation, the Committee is authorized to give
option holders the right to immediately exercise all of their options, whether
vested or unvested.
The 1996 Plan will continue in effect until November 2006, unless earlier
terminated by the Board of Directors, but such termiantion will not affect the
terms of any options outstanding at that time. The Board of Directors may
amend, terminate or suspend the 1996 Plan at any time. Amendments to the 1996
Plan must be approved by shareholders if required by applicable tax,
securities or other law or regulation.
The issuance of shares of Common Stock upon the exercise of options is
subject to registration with the Securities and Exchange Commission of the
shares reserved by the Company under the 1996 Plan.
Federal Income Tax Consequences
The federal income tax discussion set forth below is included for general
information only. Optionees are urged to consult their tax advisors to
determine the particular tax consequences applicable to them, including the
application and effect of foreign, state and local income and other tax laws.
Incentive Stock Options. Certain options authorized to be granted under the
1996 Plan are intended to qualify as incentive stock options for federal
income tax purposes. Under federal income tax law currently in
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<PAGE>
effect, the optionee will recognize no income upon grant or upon exercise of
an incentive stock option. If an employee exercises an incentive stock option
and does not dispose of any of the option shares within two years following
the date of grant and within one year following the date of exercise, then any
gain realized upon subsequent disposition of the shares will be treated as
income from the sale or exchange of a capital asset. If an employee disposes
of shares acquired upon exercise of an incentive stock option before the
expiration of either the one-year holding period or the two-year waiting
period, any amount realized will be taxable as ordinary compensation income in
the year of such disqualifying disposition to the extent that the lesser of
the fair market value of the shares on the exercise date or the fair market
value of the shares on the date of disposition exceeds the exercise price. The
Company will not be allowed any deduction for federal income tax purposes at
either the time of the grant or exercise of an incentive stock option. Upon
any disqualifying disposition by an employee, the Company will be entitled to
a deduction to the extent the employee realized ordinary income.
Non-qualified Stock Options. Certain options authorized to be granted under
the 1996 Plan will be treated as non-qualified stock options for federal
income tax purposes. Under federal income tax law presently in effect, no
income is realized by the grantee of a non-qualified stock option pursuant to
the 1996 Plan until the option is exercised. At the time of exercise of a non-
qualified stock option, the optionee will realize ordinary compensation
income, and the Company will be entitled to a deduction, in the amount by
which the market value of the shares subject to the option at the time of
exercise exceeds the exercise price. The Company's deduction is conditioned
upon withholding on the income amount. Upon the sale of shares acquired
through the exercise of a non-qualified stock option, the excess of the amount
realized from the sale over the market value of the shares on the date of
exercise will be taxable.
Consequences to the Company. The Company recognizes no deduction at the time
of grant or exercise of an incentive stock option. The Company will recognize
a deduction at the time of exercise of a non-qualified stock option on the
difference between the option price and the fair market value of the shares on
the date of grant. The Company also will recognize a deduction to the extent
the optionee recognizes income upon a disqualifying disposition of shares
acquired through the exercise of an incentive stock option.
Board Recommendation
For the reasons discussed above, the Board recommends a vote FOR approval of
the amendment to the Company's 1996 Stock Incentive Plan. If a quorum is
present, this proposal will be approved if a majority of the votes cast on the
proposal are voted in favor of approval. Abstentions and broker non-votes are
counted for purposes of determining whether a quorum exists at the Annual
Meeting but will not be counted and will have no effect on the determination
of the outcome of this proposal. Proxies solicited by the Board will be voted
FOR approval of the amendment to the 1996 Stock Incentive Plan unless a vote
against the proposal or abstention is specifically indicated.
The Board of Directors unanimously recommends a vote FOR this proposal.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP to act as independent auditors
for the Company for the fiscal year ending September 28, 2001, 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 LLP to audit the books and accounts of
the Company for the fiscal year ending September 28, 2001. 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 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.
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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 2002 annual meeting of shareholders
must be received by the Company not later than September 5, 2001, 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
2001 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, Mellon Financial Services has been
retained to solicit proxies at an approximate cost of $10,000 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.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended September 29, 2000 accompanies this Proxy Statement. The Company is
required to file an Annual Report on Form 10-K for its fiscal year ended
September 29, 2000 with the Securities and Exchange Commission. Shareholders
may obtain, free of charge, a copy of the Form 10-K (without exhibits) by
writing to Chief Executive Officer, Planar Systems, Inc., 1400 N.W. Compton
Drive, Beaverton, Oregon 97006.
By Order of the Board of Directors
/s/ Balaji Krishnamurthy
Balaji Krishnamurthy
President and Chief Executive
Officer
Beaverton, Oregon
December 29, 2000
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APPENDIX A
PLANAR SYSTEMS, INC.
Charter of the Audit Committee of the Board of Directors
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting and legal
compliance.
. Monitor the independence and performance of the Company's independent
auditors.
. Provide an avenue of communication among the independent auditors,
management and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special legal,
accounting or other consultants or experts it deems necessary in the
performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the applicable requirements of the Nasdaq
Stock Market. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be "independent"
within the meaning of regulations promulgated from time to time by the
Securities and Exchange Commission, the Nasdaq Stock Market or other
appropriate authorities, free from any relationship that would interfere with
the exercise of his or her independent judgment. All members of the Committee
shall be able to read and understand fundamental financial statements,
including a company's balance sheet, income statement and statement of cash
flows, and at least one member shall have current or past employment
experience in finance or accounting, requisite professional certification in
accounting or other comparable experience or background.
Audit Committee members shall be appointed by the Board on recommendation of
the Board of Directors or the Committee on Directors thereof. If an Audit
Committee Chair is not designated or present, the members of the Committee may
designate a Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Committee should meet privately in executive
session at least annually with management, the independent auditors, and as a
committee to discuss any matters that the Committee or each of these groups
believe should be discussed.
III. Audit Committee Responsibilities and Duties
A. Review Procedures
1. Review and assess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published in accordance with the regulations of the SEC.
2. In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting processes and
controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control and report such exposures. Review
significant findings prepared by the independent auditors together with
management's responses.
A-1
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3. Review with financial management and the independent auditors the
Company's annual audited financial statements prior to filing of the Company's
annual audited financial statements with the SEC. Discuss any significant
changes to the Company's accounting principles or practices and any items
required to be communicated by the independent auditors in accordance with SAS
61.
4. Review with financial management the company's quarterly financial
results prior to the filing of the Company's quarterly financial statements
with the SEC. Discuss any significant changes to the Company's accounting
principles or practices and any items required to be communicated by the
independent auditors in accordance with SAS 61.
B. Independent Auditors
1. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review the
independence and performance of the auditors and annually recommend to the
Board of Directors the appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
2. Approve the fees and other significant compensation to be paid to the
independent auditors.
3. On an annual basis, the Committee should require the independent
auditors to deliver a formal written report describing all significant
relationships that the independent auditors have with the Company that could
impair the auditors' independence, and review, discuss and take appropriate
action with respect to such report.
4. Review the independent auditors audit plan--discuss scope, staffing,
locations, reliance upon management and internal audit and general audit
approach.
5. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
C. Internal Accounting Department and Legal Compliance
1. Review the budget, plan, changes in plan, activities, organizational
structure and qualifications of the internal accounting department, as needed.
2. Review the appointment, performance and replacement of the senior
internal accounting executive.
3. Review significant reports prepared by the internal accounting
department together with management's response and follow-up to these reports.
4. On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the organization's
financial statements, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental agencies.
D. Other Audit Committee Responsibilities
1. Annually prepare a report to shareholders for inclusion in the
Company's annual proxy statement as required by the regulations of the SEC.
2. Perform any other activities consistent with this Charter, the
Company's bylaws, and governing law, as the Committee or the Board deems
necessary or appropriate.
A-2
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3. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
4. Periodically perform self-assessment of Audit Committee performance.
5. Review financial and accounting personnel succession planning within
the Company.
A-3
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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 Balaji Krishnamurthy 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 1, 2001 at the Hilton Garden Inn, 15520 NW Gateway Court (HWY
26 and Cornell Rd) Beaverton, Oregon 97006 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
PROPOSALS 2 AND 3, 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>
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Please mark
your votes [X]
as indicated
<TABLE>
<CAPTION>
FOR the nominees WITHHOLD AUTHORITY
listed below (except to vote for all nominees
as indicated below) listed below
<S> <C> <C>
1. Election of two directors for a three-year term and one director for a [_] [_]
one-year term.
William D. Walker and Heinrich Stenger each for a three-year term and
Carl Neun for a one-year term.
Instruction: To withhold authority to vote for any nominee write that
nominee's name(s) in this space:
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</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Approval of amendment to the Company's 1996 Stock Incentive Plan. [_] [_] [_]
3. Ratification of appointment of KPMG LLP as independent auditors of the [_] [_] [_]
Company for the fiscal year ending September 28, 2001.
4. 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. [_]
</TABLE>
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 corporated 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
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. FOLD AND DETACH HERE .
