SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a)
of the Security Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
Circuit Research Labs, Inc.
(Name of Registrant as Specified In Its Charter)
Gary D. Clarkson
Name of Person Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box): N/A
[ ] $125 per Exchange Act rules 0-11(c)(1)(ii),
14a-6(i)(1), or 14a6(j) (2).
[ ] $500per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i) (4) and 0-11.
1) Title of each class of securities to which
transaction applies:
N/A
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:
4) Proposed maximum aggregate value of transaction:
[ ] 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 Previous Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party
4) Date Filed:
Mailed to Shareholders on
or about April 11, 1997
<PAGE>
CIRCUIT RESEARCH LABS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 2, 1997
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of CIRCUIT RESEARCH LABS, INC., an Arizona
corporation, will be held on May 2, 1997 at 2:00 o'clock p.m.,
Mountain Standard Time, at the offices of Circuit Research Labs,
Inc., 2522 West Geneva Drive, Tempe, Arizona 85282 for the
following purposes:
1. To elect a board of five (5) directors to serve for the
coming year and until their successors are elected;
2. To approve Deloitte & Touche LLP as the Company's
independent public accountants for the year ending December 31,
1997; and
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on March 31,
1997 are entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person.
However, only those shares which are represented at the meeting
personally by the holder or by proxy may vote. To assure your
representation at the meeting, please mark, date, sign and return
the enclosed proxy card as promptly as possible in the envelope
provided. You may attend the meeting, revoke your proxy and vote
in person even if you have returned a proxy.
Sincerely,
Gary D. Clarkson,
Secretary
Tempe, Arizona
April 11, 1997
Mailed to Shareholders on
or about April 11, 1997
<PAGE>1
CIRCUIT RESEARCH LABS, INC.
2522 WEST GENEVA DRIVE
Tempe, Arizona 85282
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of CIRCUIT RESEARCH
LABS, INC. (the Company) for use at its Annual Meeting of
Shareholders to be held on May 2 1997, at 2:00 p.m., Mountain
Standard Time, or at any adjournment thereof. The purposes of
the meeting are set forth herein and in the accompanying Notice
of Annual Meeting of Shareholders. The Annual Meeting will be
held in the offices of Circuit Research Labs, Inc., 2522 West
Geneva Drive, Tempe, Arizona 85282. The Company will bear the
cost of this solicitation.
Shareholders may revoke any proxy given pursuant to this
solicitation by: (a) delivering a written notice of revocation
to Gary D. Clarkson, Secretary, Circuit Research Labs, Inc., 2522
West Geneva Drive, Tempe, Arizona 85282; or (b) a duly executed
proxy bearing a later date; or (c) attending the meeting and
voting in person.
Outstanding Shares and Voting Rights
As of the close of business on March 31, 1997, the Company
had outstanding 597,682 shares of common stock with $.10 per
share par value, each of which is entitled to one vote at all
meetings of stockholders, other than the election of directors.
(see "Cumulative Voting Rights"). Only holders of record of
Common Stock at the close of business on March 31, 1997 will be
entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof.
In determining whether a quorum exists at the meeting, all
shares represented in person or proxy will be counted. Presence
of holders of a majority of the outstanding stock shall
constitute a quorum. Votes will be tabulated by inspectors.
Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting. Each
is tabulated separately. Abstentions are counted in tabulations
of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
Cumulative Voting Rights
Each member present either in person or by proxy at the
Annual Meeting will have cumulative voting rights with respect to
the election of directors; that is the shareholder will have an
aggregate number of votes in the election of directors equal to
the number of directors to be elected multiplied by the number of
shares of Common Stock of the Company held by such shareholder on
the record date. The resulting aggregate number of votes may be
cast by the shareholder for the election of any single nominee,
or the shareholder may distribute such votes among any number of
<PAGE>2
all the nominees. The five nominees receiving the highest number
of votes will be elected to the Board of Directors. The
cumulative voting rights may be exercised in person or by proxy
and there are no conditions precedent to the exercise of such
rights.
PROPOSALS OF SECURITY HOLDERS INTENDED TO
BE PRESENT AT THE NEXT ANNUAL MEETING
Shareholders of the Company who intend to present proposals
at the Company's 1998 Annual Meeting of Shareholders must send
such proposals to the Company no later than December 20, 1997 in
order to be included in the proxy statement and form of proxy
relating to the meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
A board of five directors is to be elected at the meeting.
Unless otherwise instructed, proxy holders will vote the proxies
received by them for the Company's nominees named below, each of
whom is a current director of the Company. If any of the
Company's nominees is unable or declines to serve as a director
at the time of the Annual Meeting, proxies will be voted for any
nominee designated by the present board of directors to fill the
vacancy. It is not expected that any nominee will be unable or
will decline to serve as a director. If additional persons are
nominated for election as directors, the proxy holders intend to
vote all proxies received by them according to the cumulative
voting rules to assure the election of as many of the nominees
listed below as possible. In such event, the specific nominees
to be voted for will be determined by the proxy holders. The
term of office of each person elected as a director will continue
until the next Annual Meeting of Shareholders or until his
successor has been elected and qualified.
Names of the nominees of the Company, together with certain
information about them is set forth below.
Director
Name Age Since Position in the
Company
Ronald R. Jones 49 1978 Chief Executive Officer,
President and Chairman
Gary D. Clarkson 44 1978 Secretary/Treasurer and
Director
Erle M. Constable 78 1983 Assistant Treasurer and
Director
Carl E. Matthusen 53 1988 Director
Gary M. Hamker 60 1993 Director
<PAGE>3
Ronald R. Jones has been Chief Executive Officer, President
and a director of the Company since its incorporation in 1978.
Mr. Jones founded Circuit Research Labs business in 1974. Since
1976, he has devoted his sole business efforts to the Company and
its affiliates. Prior to that time, Mr. Jones served as a
consultant chief engineer for numerous radio stations. He also
taught courses in broadcast engineering at Phoenix College and
the Institute of Broadcast Arts from 1974 to 1976. Mr. Jones
holds an associate degree in electronics engineering technology
from DeVry Institute of Technology, Phoenix, Arizona. He is a
member of the Institute of Electrical and Electronics Engineers
and the Audio Engineering Society. Mr. Jones is President and a
director of CRL International, Inc., the Company's wholly owned
foreign sales corporation.
Gary D. Clarkson has been Secretary and a director of the
Company since its incorporation and was elected Treasurer in July
1992. Mr. Clarkson founded Circuit Research Labs with Mr. Jones
in 1974, and has devoted substantially all of his business
efforts to the Company's business since that time. He has been a
design engineer for Circuit Research Labs from 1974 to present.
He holds an associate degree in electronics engineering
technology from DeVry Institute of Technology, Phoenix, Arizona.
Mr. Clarkson served as assistant and chief engineer at many radio
stations from 1971 until 1978. Mr. Clarkson is Treasurer and a
director of CRL International, Inc., the Company's wholly owned
foreign sales corporation.
Erle M. Constable has served as a director of the Company
since 1983 and Treasurer from January 1987 to November 1988 when
he reduced his activity to Assistant Treasurer. In 1983, Mr.
Constable retired from Dynalectron Corporation (now DYNCORP),
then a publicly-held diversified technical services company where
he served as Vice President of Finance and Corporate Development.
He was employed by Dynalectron in 1973, and was in charge of an
acquisition program which merged 15 companies into Dynalectron.
Prior to joining Dynalectron, Mr. Constable worked for Fairchild
Industries, Lockheed Aircraft Corporation, Glenn L. Martin
Company and Trans World Airlines. He holds undergraduate and
masters degrees in business administration received in 1939 and
1940 from the University of Nebraska. Periodically, Mr.
Constable acts as a consultant to the Company and receives an
hourly consulting fee for his services. Mr. Constable is a
director of CRL International, Inc., the Company's wholly owned
foreign sales corporation.
Carl E. Matthusen became a member of the Board of Directors
in February 1988. Mr. Matthusen has been in the broadcast
industry since 1963 serving in various capacities at seven radio
<PAGE>4
broadcast stations in Arizona, Wisconsin, Minnesota and Virginia.
Since 1978, he has been General Manager of KJZZ/Sun Sounds
operated by the Mesa Community College in Mesa, Arizona. In
addition, he is a guest lecturer at Mesa Community College,
Phoenix College and Arizona State University as well as a
consultant to Arizona Western Community College and the Arizona
Commission on post-secondary education. Mr. Matthusen also
served as Chairman of the Board of Directors of the National
Public Radio Network, from 1992 to 1996, where he had been a
director from 1990 to 1996.
Gary M. Hamker has been a member of the Board of Directors
and a Special Projects Consultant since July 1993. Mr. Hamker is
retired from NCR/AT&T after 30 years in Marketing and Corporate
Product Management. While with NCR/AT&T he had many diversified
assignments, including developing new domestic and international
computer product strategies and product/marketing plans for the
worldwide market. He was instrumental in development and sales
strategies of mini-computers and personal computer/network
systems during their infancy. Approval of research and
development, new product specifications, monitoring R&D budgets,
developing and approving new product plans and planning
profitable products phase-out, were a few of his
responsibilities. His expertise includes working on system
problems, on proposals to increase market penetration with large
multi-national accounts and on developing internal
communications to improve departmental cooperation and
effectiveness. Periodically, Mr. Hamker acts as a consultant to
the Company and receives an hourly consulting fee for his
services.
OTHER EXECUTIVE OFFICERS
Name Age Position
Dennis L. Drew 51 Vice President
Operations,
Assistant
Secretary/Treasurer
Dennis L. Drew joined the Company in 1993 as controller. In
1994, he was appointed to the positions of Vice President of
Operations, and Assistant Sectretary/Treasurer. Before joining
the Company, Mr. Drew spent three years as a Project Manager for
Computer Cable Specialists. Prior to Computer Cable Specialists,
Mr. Drew held several senior financial management positions with
companies in the computer leasing industry. These positions
covered a wide range of responsibilities including implementing
computerized internal controls to negotiating contracts and loan
agreements. Mr. Drew has an MBA from Arizona State University.
<PAGE>5
BOARD MEETING AND COMMITTEES
The Board of Directors of the Company held a total of 2 meetings
during the fiscal year ended December 31, 1996.
The Board of Directors has an Executive Committee currently
comprised of Messrs. Clarkson and Constable. The Executive
Committee is empowered to act on behalf of the full Board of
Directors when it is inconvenient for the full Board to meet.
The Executive Committee was formed in 1983 and held no meetings
in 1996.
The Board of Directors has an Audit Committee which was
comprised of Messrs. Constable and Matthusen during the year
ended December 31, 1996. The Audit Committee oversees the
financial reporting and disclosures prepared by Management. The
Audit Committee held no meetings during the fiscal year ended
December 31, 1996.
The Company has no nominating committee. The entire board
acts as the nominating committee.
The Company has no executive compensation committee. The
entire board acts in that capacity. Messrs. Jones and Clarkson
do not vote on their salaries and other compensation.
The Board of Directors has a Stock Option Committee
comprised of Messrs. Jones and Clarkson. The Stock Option
Committee is empowered to issue stock options as outlined in the
1994 Stock Option Plan. The Stock Option Committee held no
meetings during the fiscal year ended December 31, 1996.
Each of the directors attended, either in person or by
telephone, each meeting scheduled during the time he has served
as a director.
<PAGE>6
EXECUTIVE COMPENSATION
The Company did not pay any individual cash compensation in
excess of $100,000 for services provided during the fiscal year.
The following table sets forth compensation paid or accrued to
the chief executive officer during each of the three fiscal years
ended December 31, 1996.
Summary Compensation Table
Name and Other
Principal Position Year Salary Bonus Compensation
Ronald R. Jones
President and
Chairman of the Board 1996 $ 72,696 -0- $ 2,022(1)
1995 72,696 -0- 2,152(1)
194 72,696 -0- 2,270(1)
(1) Fee paid by Company for the personal guarantee of the SBA
loan.
The Company has no employment contracts currently in force.
The Company has agreements with all employees calling for
nondisclosure of trade secrets.
The Company has group life, disability, and medical
insurance plans, a 401(k) pension plan, an Employee Stock
Purchase Plan and an Incentive Stock Option Plan.
Compensation of Directors
During the year ended December 31, 1996, Directors received
no compensation for attending meetings.
<PAGE>7
Employee Pension Plan
The Company sponsors the CRL, INC. 401(K) PROFIT SHARING
PLAN (the "Plan") for the benefit of all employees meeting
certain eligibility requirements. Under the Plan, participants
are permitted to make pre-tax contributions to their plan
accounts. The Company will match 50% of a participant's
contributions up to a maximum Company matching contribution of 3%
of a participant's annual compensation. Total annual
contributions to a participant's account may not exceed 25% of
annual compensation. In addition, the Company, at its sole
discretion, may make an annual profit sharing contribution to the
Plan out of its current or accumulated profits. The annual
contribution, if any, is allocated to participants based upon
each participant's annual compensation. The Company has not made
an annual contribution and currently has no plans to do so. The
Company did not make a contribution to the account of the
individual listed in the preceding cash compensation table for
the year ended December 31, 1996.
Stock Purchase Plan
The Company has an employee stock purchase plan which is offered
to substantially all employees, including officers. Employees
may purchase the Company's common stock through payroll
deductions not exceeding $50 per week and shares are purchased at
the market price, by a nonaffiliated dealer on the open market.
During 1996 two employees participated in the Stock Purchase
Plan.
Stock Options
The following is a brief summary of the Company's 1994 Stock
Option Plan. The closing bid price of the Company's common stock
on the NASDAQ National Market System on February 28, 1997 was
$2.125 per share.
In May 1994, the Company's stockholders approved the Company's
1994 Stock Option Plan, which set aside an aggregate of 60,000
shares of common stock for which options may be granted to
employees, officers, directors, and consultants. Options granted
and not exercised under the Company's previous plan were canceled
and new options were granted. The Company's Board of Directors
appoints the Stock Option Committee which is authorized to grant
incentive stock options and non qualified stock options under the
Plan, select optionees, determine the number of shares to be
granted to each nominee, select the term of the option (up to ten
years), and determine the price to be paid on the exercise of
the option, provided that such price must not be less than 100%
of the market value of the shares subject to the option at the
time it is granted. Each option is exercisable from time to time
subject to such restrictions on exercisability as the Stock
<PAGE>8
Option Committee may impose at the grant date. This plan expires
in April 2004.
As of February 28, 1997, options to purchase a total of 10,312
shares were outstanding to 5 employees and directors.
The following table sets forth information as to all options to
purchase Common Stock under the Plan which were granted to
certain officers and directors and to all officers and directors
as a group and which were outstanding as of February 28, 1997:
Average
Name Capacities Shares Price
Erle M. Constable Director and Assistant
Treasurer 1,562(1) $1.25
Carl E. Matthusen Director 1,250(2) $1.25
All officers and directors
as a group (2 individuals) 2,812(3) $1.25
(1) 1,562 shares granted May 6, 1994. All shares became
exercisable on May 6, 1995 and expire May 6, 1997.
(2) 1,250 shares granted May 6, 1994. All shares became
exercisable on May 6, 1995 and expire May 6, 1997.
(3) An additional 7,500 shares may be acquired by employees
exercising options which expire May 6, 1997.
<PAGE>9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
a. Security Ownership of Certain Beneficial Owners
As of February 28, 1997, the following persons were known by the
Company to be the beneficial owners of more than 5% of the
Company's Common Stock:
Amount and
Name and Address of Nature of Percent of
Title of Class Beneficial Owner Beneficial Class(1)
$10 par value
common Ronald R. Jones 187,500 31.4%
$.10 par value
common Gary D. Clarkson 121,312 20.3%
All of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
(1) On the basis of 597,682 shares outstanding on February 28,
1997.
b. Security Ownership of Management
The stock ownership by directors and officers of the Company as
of February 28, 1997 is set forth below. Each person named
exercises sole voting power over all shares beneficially owned.
Amount and
Name and Nature of Percent
Address of Beneficial of Class
Title of Class Beneficial Owner Owner (4)
$.10 par value
common Ronald R. Jones 187,500 31.2%
$.10 par value
common Gary D. Clarkson 121,312 20.2%
$.10 par value
common Erle M. Constable 2,500(1) .4%
$.10 par value
common Carl E. Matthusen 1,250(2) .2%
All of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
Officer and directors
as a group (4 persons) 312,562(3) 52%
(1) 938 shares owned; 1,562 shares under exercisable options.
Held as community property with Eugenia Constable.
(2) No shares owned; 1,250 shares under exercisable options.
<PAGE>10
(3) Includes 2,812 shares which may be acquired by exercising
stock options.
(4) Percentage is calculated on the basis that all director and
officer shares under stock options presently exercisable are
deemed outstanding, a total of 600,494 shares.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP,
independent public accountants, to audit the Company's
consolidated financial statements for the fiscal period ending
December 31, 1997 and recommends that shareholders vote for
ratification of such appointment. In the event of a negative
vote on such ratification, the Board of Directors will reconsider
its selection.
An Audit Committee of the Company's Board of Directors was
formed in August 1985 and is responsible for recommending
selection of the Company's independent public accountants. The
Audit Committee recommended the appointment of Deloitte & Touche
LLP as the Company's independent public accountants. The
recommendation was adopted by the Board of Directors.
Representatives of Deloitte & Touche LLP are expected to be
present at the meeting and will have the opportunity to respond
to appropriate questions and to make a statement if they so
choose.
Management recommends a vote FOR ratification of Deloitte &
Touche LLP as auditors for the Company's financial statements.
OTHER MATTERS
Management knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting,
it is the intention of the persons named on the enclosed proxy
card to vote the shares they represent as the Board of Directors
may recommend.
THE BOARD OF DIRECTORS
Dated: April 11, 1997
<PAGE>11
CIRCUIT RESEARCH LABS, INC.
2522 W. GENEVA DRIVE TEMPE, ARIZONA 85282
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of CIRCUIT RESEARCH LABS, INC. hereby
appoints each of Ronald R. Jones and Gary Clarkson as proxy, with
power of substitution and authorizes each of them to represent,
vote and act on behalf of such shareholder at the Annual Meeting
of Shareholders to be held May 2, 1997, or any adjournment
thereof.
1. Election of directors.
FOR ALL nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee strike a line through the nominee's name
in the list below.)
RONALD R. JONES GARY D. CLARKSON ERLE M. CONSTABLE
CARL E. MATTHUSEN GARY M. HAMKER
2. Approval of Accountants.
Proposal to ratify the appointment of Deloitte & Touche as
auditors.
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND
RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>12
