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)
Dennis L. Drew
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 10, 1998<PAGE>
CIRCUIT RESEARCH LABS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 1, 1998
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 1,
1998 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 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, 1998 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,
Dennis L. Drew, Secretary
Tempe, Arizona
April 10, 1998
Page 1<PAGE>
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 1, 1998, 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 Dennis L. Drew,
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, 1998, 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, 1998 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
all the nominees. The five nominees receiving the highest number of votes
will be elected to the Board of Directors. The cumulative voting rights
Page 2<PAGE>
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 1999 Annual Meeting of Shareholders must send such proposals to
the Company no later than December 20, 1998 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
Gary D. Clarkson 45(1) 1978 Chief Executive
Officer, President
and Chairman
Erle M. Constable 79 1983 Assistant Treasurer and
Director
Carl E. Matthusen 54 1988 Director
Gary M. Hamker 61 1993 Director
Royce T. Jones 48 1998 Director
Gary D. Clarkson In January 1998, following the death of Mr. Ronald R.
Jones, Mr. Clarkson was elected to the positions of Chief Executive
Officer, President and Chairman. Mr. Clarkson had 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
Page 3<PAGE>
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 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.
Royce T. Jones was appointed to the Board of Directors on January 3, 1998
following the death of her husband, Ronald R. Jones. She is employed at the
Page 4<PAGE>
Wild Toucan restaurant in Sedona, Arizona. Previously she had been a flight
attendant with Hughes Airwest and Northwest Airlines.
OTHER EXECUTIVE OFFICERS
Name Age Position
Dennis L. Drew 52 Vice President Operations,
Assistant Secretary/Treasurer
Dennis L. Drew was appointed Secretary/Treasurer in January 1998. Mr. Drew
joined the Company in 1993 as controller. In 1994, he was appointed to the
positions of Vice President of Operations, and Assistant
Secretary/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.
(1) Ronald R. Jones had been Chief Executive Office, President, and a
Director of Circuit Research Labs, Inc. since incorporation in 1978. Mr.
Jones died on January 1, 1998.
BOARD MEETING AND COMMITTEES
The Board of Directors of the Company held a total of 2 meetings during
the fiscal year ended December 31, 1997.
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 1997.
The Board of Directors has an Audit Committee which was comprised of
Messrs. Constable and Matthusen during the year ended December 31, 1997.
The Audit Committee oversees the financial reporting and disclosures
prepared by Management. The Audit Committee held one meeting during the
fiscal year ended December 31, 1997.
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. Mr. Clarkson does not vote on his salary and other
compensation.
The Board of Directors has a Stock Option Committee which was
comprised of Messrs. Jones(1) and Clarkson. The Stock Option Committee is
empowered to issue stock options as outlined in the 1994 Stock Option Plan.
Page 5<PAGE>
The Stock Option Committee held one meeting during the fiscal year ended
December 31, 1997.
Each of the directors attended, either in person or by telephone, each
meeting scheduled during the time he has served as a director.
(1) Mr. Jones died on January 1, 1998, no new member has been appointed.
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, 1997.
Summary Compensation Table
Name and Other
Principal Position Year Salary Bonus Compensation
Ronald R. Jones(1)
President and
Chairman of the Board 1997 $ 72,696 -0- $ 0
1996 72,696 -0- 2,022(3)
1995 72,696 -0- 2,152(2)
(1) Mr. Jones died on January 1, 1998.
(2) 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, 1997, Directors received no
compensation for attending meetings.
Page 6<PAGE>
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, 1997.
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 1997, 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 27, 1998 was
$2.375 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 7<PAGE>
Option Committee may impose at the grant date. This plan expires
in April 2004.
As of February 27, 1998, options to purchase a total of 15,312
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 27, 1998:
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
Dennis L. Drew Secretary/Treasurer,
Vice President
Operations 5,000(3) $2.00
All officers and directors
as a group (3 individuals) 7,812(4) $1.73
(1) 1,562 shares granted May 6, 1994. All shares became
exercisable on May 6, 1995 and expire May 6, 1999.
(2) 1,250 shares granted May 6, 1994. All shares became
exercisable on May 6, 1995 and expire May 6, 1999.
(3) 5,000 shares granted June 12, 1997. All shares became
exercisable on June 12, 1997 and expire May 6, 1999.
(4) An additional 7,500 shares may be acquired by employees
exercising options which expire May 6, 1999.
Page 8<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
A. Security Ownership of Certain Beneficial Owners
As of February 27, 1998, 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 Owner Class(1)
$.10 par value
common Estate of Ronald
R. Jones(2) 187,500 31.4%
of
Charles R. Berry
Titus, Brueckner & Berry, P.C.
Scottsdale Center, Suite B-252
7373 N. Scottsdale Road
Scottsdale, Arizona 85253-3527
$.10 par value
common Gary D. Clarkson 121,312 20.3%
of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
(1) On the basis of 597,682 shares outstanding on February 27,
1998.
(2) It is anticipated that, pursuant to an agreement between the
Company and Ronald R. Jones, the Company will repurchase all of
Ronald R. Jones' 187,500 shares from the estate of Ronald R.
Jones for the price of approximately $181,640. The repurchase
will take place on or before May 5, 1998. The Company had a key
man life insurance policy on the life of Ronald R. Jones
which is more than sufficient to cover the purchase of the stock.
Page 9<PAGE>
B. Security Ownership of Management
The stock ownership by directors and officers of the Company as
of February 27, 1998 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 Estate of Ronald
R. Jones 187,500(1) 31.2%
of
% Charles R. Berry
Titus, Brueckner & Berry, P.C.
Scottsdale Center, Suite B-252
7373 N. Scottsdale Road
Scottsdale, Arizona 85253-3527
$.10 par value
common Gary D. Clarkson 121,312 20.2%
$.10 par value
common Erle M. Constable 2,500(2) .4%
$.10 par value
common Carl E. Matthusen 1,250(3) .2%
$.10 par value
common Dennis L. Drew 5,000(4) .8%
All of
Circuit Research Labs, Inc.
2522 West Geneva Drive
Tempe, Arizona 85282
Officer and directors as a
group (5 persons) 312,562(5) 53%(6)
(1) It is anticipated that, pursuant to an agreement between the
Company and Ronald R. Jones, the Company will repurchase all of
Ronald R. Jones' 187,500 shares from the estate of Ronald R.
Jones for the price of approximately $181,640. The repurchase
will take place on or before May 5, 1998. The Company had a key
man life insurance policy on the life of Ronald R. Jones which is
more than sufficient to cover the purchase of the stock. Royce T.
Jones, a Director and widow of Ronald R. Jones is the beneficiary
of the estate of Ronald R. Jones.
(2) 938 shares owned; 1,562 shares under exercisable options.
Held as community property with Eugenia Constable.
(3) No shares owned; 1,250 shares under exercisable options.
(4) No shares owned; 5,000 shares under exercisable options.
(5) Includes 7,812 shares which may be acquired by exercising
stock options.
(6) Percentage is calculated on the basis that all director and
officer shares under stock options presently
exercisable are deemed outstanding, a total of 605,494 shares.
Page 10<PAGE>
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 10, 1998
Page 11<PAGE>
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 Gary Clarkson and Dennis Drew 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 1, 1998, or any adjournment
thereof.
1. Election of directors.
FOR ALL nominees listed below WITHHOLD
AUTHORITY
(except as marked to the contrary below)
to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any
individual nominee strike a line
through the nominee's name in the list below.)
GARY D. CLARKSON ERLE M. CONSTABLE
CARL E. MATTHUSEN
GARY M. HAMKER
ROYCE T. JONES
FOR AGAINST ABSTAIN
2. 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<PAGE>
