SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
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 Rule 14a-1(c) or Rule 14a-12
GO-VIDEO, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)((1) or
14a-6(j)(2).
[ ] $500 per 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:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11: _/
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_/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ X } 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:
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<PAGE>
GO-VIDEO, INC.
7835 East McClain Drive
Scottsdale, Arizona 85260
- --------------------------------------------------------------------------------
July 10, 1996
Dear fellow Go-Video Stockholder:
You are cordially invited to attend our 1996 Annual Meeting of
Stockholders, which will begin at 8:00 a.m. at Go-Video's headquarters at 78th
Street and McClain Drive, Scottsdale, Arizona, on Thursday, August 29, 1996.
The first item of business for the meeting is the election of
directors. I have been privileged to serve as a director for Go-Video over the
last three years and I'm delighted that the Board of Directors has nominated me
for a new three year term. I believe the next several years will be a most
exciting and rewarding time for the Company and its stockholders and I'm very
pleased to play a guiding role in the growth of your Company. The continuing
directors are Tom Hartley, Tom Linnen, Ralph Palaia, and Bill Walker. The
Go-Video Board of Directors recommends that you vote FOR the proposed director
slate.
Terry Dunlap, co-founder and former Chairman and Chief Executive
Officer of the Company, will not be standing for reelection as a director this
year. I want to personally thank Mr. Dunlap on behalf of Go-Video for his twelve
years of service as a director, during which time the Company successfully
developed and introduced the Dual-Deck VCR. Mr. Dunlap's management and
guidance, against extreme odds and numerous business and legal challenges, were
critical in bringing Go-Video through its formative stages and providing the
opportunity to rebuild an American leadership position in the consumer
electronics industry.
The second item of business is approval of an amendment to the
Certificate of Incorporation to authorize the issuance of up to 1,000,000 shares
of Preferred Stock. Go-Video's Certificate of Incorporation does not currently
provide for the issuance of Preferred Stock. The Board of Directors believes
that the authorization of Preferred Stock is in the best interests of the
Company because it will provide the Board with additional flexibility in future
financing and other transactional opportunities that may arise. The Go-Video
Board of Directors recommends that you vote FOR the proposed amendment to the
Certificate of Incorporation to permit the issuance of Preferred Stock.
Approval of the amendment authorizing Preferred Stock requires the
affirmative vote of a majority of the outstanding Common Stock of the Company.
Therefore, it is critical that your shares are represented at the meeting,
whether or not you plan to attend the meeting. Accordingly, please mark, date,
sign and return promptly your proxy sheet in the enclosed envelope. You may
attend the meeting and vote your shares in person if you wish, even if you have
previously returned your proxy.
I encourage you to attend this year's Annual Meeting in person. At the
meeting, we will be demonstrating the new stacked GV6000 series Dual-Deck VCR's,
our complete line of video security systems and accessories, and our newest
product line - Loewe Opta digital televisions. After seeing our new product
lines and meeting the teams that are making them happen, I think you'll agree we
have made tremendous progress over the last year and truly do have an exciting
future ahead of us.
Sincerely,
Roger B. Hackett
Chairman, Chief Executive Officer
and President
<PAGE>
GO-VIDEO, INC.
7835 East McClain Drive
Scottsdale, Arizona 85260
NOTICE AND PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held on August 29, 1996
To the Stockholders of Go-Video, Inc.:
The 1996 Annual Meeting of Stockholders of GOoVIDEO, INC., a Delaware
corporation, will be held at the Company's headquarters at 7835 East McClain,
Scottsdale, Arizona, on Thursday, August 29, 1996, at 8:00 a.m., Mountain
Standard Time, for the following purposes:
1. To elect one (1) director to the Board of Directors;
2. To amend the Certificate of Incorporation to permit the issuance of
Preferred Stock; and
3. To act upon such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on July 3, 1996,
as the record date for determining the stockholders entitled to receive notice
of and to vote at the Annual Meeting or any adjournment thereof. Shares of
Common Stock can be voted at the meeting only if the holder is present at the
meeting in person or by valid proxy.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
MARK, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY, BY VOTING IN PERSON AT THE
ANNUAL MEETING, OR BY SUBMITTING A LATER DATED PROXY.
Admission to the Annual Meeting is limited to stockholders or their
proxies. Stockholders who hold their shares in "Street" name (shares registered
under a broker, bank, or other nominee institution's name) will be admitted to
the meeting upon presentation of a written affidavit or statement from the
registered institution showing beneficial ownership as of the July 3, 1996
record date. The Annual Meeting will not be open to the public.
By Order of the Board of Directors
Douglas Klein
Vice President, Chief Financial Officer,
Secretary and Treasurer
Scottsdale, Arizona
July 10, 1996
2
<PAGE>
GO-VIDEO, INC.
7835 East McClain Drive
Scottsdale, Arizona 85260
(602) 998-3400
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors (the
"Board") of Go-Video, Inc. (the "Company") in connection with the Annual Meeting
of Stockholders to be held at the Company's headquarters at 7835 East McClain
Drive, Scottsdale, Arizona, on Thursday, August 29, 1996, at 8:00 a.m., Mountain
Standard Time. The proxy materials were first mailed on or about July 10, 1996,
to shareholders of record at the close of business on July 3, 1996 (the "Record
Date"). As of July 3, 1996, there were outstanding 11,331,012 shares of the
Company's Common Stock. Each share of Common Stock is entitled to one vote on
each matter of business to be considered at the Annual Meeting.
The enclosed proxy is solicited by the Board of Directors of the
Company. A person giving the enclosed proxy has the power to revoke it at any
time before it is exercised by (I) attending the meeting and voting in person,
(ii) duly executing and delivering a proxy bearing a later date, or (iii)
sending a written notice of revocation to the Secretary of the Company, which
notice shall have been received by the Secretary prior to commencement of voting
at the Annual Meeting.
The Company will pay the cost of the proxy solicitation made by the
Board, including the charges and expenses of brokerage firms and others who
forward solicitation material to beneficial owners of Common Stock. In addition,
directors, officers, or employees of the Company may solicit proxies by mail,
personal interview, telephone, telegraph or facsimile transmission without
additional compensation.
If the enclosed proxy is properly executed and returned to the Company
in time to be voted at the meeting, it will be voted as specified on the proxy,
unless it is properly revoked prior thereto. If no specification is made in the
proxy, the shares represented by the proxy will be voted for the election of the
nominee for director named below. With respect to any other matters that may
properly come before the meeting, or any adjournment thereof, the proxy will be
voted at the discretion of the person(s) named in the proxy.
The director candidate receiving the greatest number of votes cast at
the meeting will be elected. The proposed amendment to the Certificate of
Incorporation authorizing Preferred Stock requires the affirmative vote of the
holders of a majority of the voting power of the Common Stock outstanding as of
the Record Date. All other proposals that properly come before the meeting
require the affirmative vote of the holders of a majority of the voting power of
Common Stock represented at the meeting. Abstentions are counted as present at
the meeting for such proposals, but because they are not affirmative votes for
such proposals, they would have the same effect as votes against the proposal.
Broker non-votes are not considered present at the meeting for particular
proposals for which the broker withheld authority.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO IS
ENTITLED TO VOTE AT THE MEETING AND WHO MAKES A WRITTEN REQUEST FOR SUCH, A COPY
OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31,
1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. REQUESTS SHOULD BE ADDRESSED TO THE
SECRETARY AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES.
3
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PROPOSAL 1 - ELECTION OF DIRECTOR
The Company's Bylaws provide for a classified Board of Directors that
is divided into three classes. Each year the stockholders elect directors for
terms of up to three years. Only one member of the Board will be elected at the
1996 Annual Meeting.
NOMINEE FOR ELECTION
The Board has nominated Roger B. Hackett for election as a director for
a term expiring at the 1999 Annual Meeting of Stockholders.
The Board of Directors recommends a vote
FOR the following nominee:
For a Term Expiring at the 1999 Annual Meeting
Roger B. Hackett, age 45, was first elected to the Board of Directors in
December 1992 and joined the Company as President and Chief Operating Officer in
January 1993. In March 1994, Mr. Hackett was elected Chief Executive Officer and
Chairman of the Board. Prior to joining the Company as President, Mr. Hackett
served as an executive officer of Serving Software Inc., a Minneapolis,
Minnesota-based provider of computer software used in the health care industry.
In 1986, Mr. Hackett founded the CAMS division of ATI Medical, Inc., a provider
of "critical care" medical equipment, and over six years developed CAMS into one
of the leading providers of bar-code-based information systems for the health
care industry. In January 1992, Mr. Hackett negotiated the sale of the CAMS
division to Serving Software, where he then served as Vice President of the CAMS
division until being named Senior Vice President, Corporate Affairs in January
1993. He also served as a director of Serving Software from January 1993 until
September 1994 when Serving Software was acquired by HBO & Co., a health care
information systems company. Mr. Hackett serves as a director of Medi-Serv, a
privately-held company providing health care information systems. Mr. Hackett
received a Bachelor of Science Degree in Business Administration from Ohio State
University.
CONTINUING DIRECTORS
Terms Expiring at the 1997 Annual Meeting
Thomas F. Hartley, Jr., age 46, has served as a director of the Company since
November 1991. Mr. Hartley is currently President of Johnson & Higgins of
Arizona, the Arizona subsidiary of a large privately-owned insurance brokerage
and consulting firm, with headquarters in New York City and over 100 offices
worldwide. Prior to joining Johnson & Higgins in 1983, Mr. Hartley was Assistant
Vice President with Marsh & McLennan in Phoenix and New York, and an officer in
the U.S. Navy's nuclear submarine program. Mr. Hartley serves as Chairman of the
Compensation Committee of the Board of Directors of the Company. Mr. Hartley is
on the boards of directors of various community and professional organizations,
including the Phoenix Economic Club, the Arizona Association of Insurance
Brokers, and the Arizona State University - First Interstate Center for Services
Marketing. He is also a member of Valley Leadership and the Arizona State
University Business School Dean's Council of 100. Mr. Hartley received a
Bachelor of Science Degree from the U.S. Naval Academy and a Masters in Business
Administration from New York University.
Ralph F. Palaia, age 46, is President of Innovative Marketing Group, a marketing
and distribution firm founded in April 1994 performing consultation, independent
sales representation, and importation and distribution of consumer electronics
and other products. From February 1991 to April 1994, Mr. Palaia served in
several sales and marketing executive positions, most recently as Senior Vice
President of Marketing and Sales for Philips Consumer Electronics, Knoxville,
Tennessee, a division of Philips N.V., a leading international manufacturer and
distributor of consumer electronic products. Earlier positions with Philips
included Vice President of Retail Sales, Vice President of National Account
Sales, and Vice President of Marketing for the Personal Computer Category. Prior
to joining Philips in February 1991, Mr. Palaia founded MGN Technology Corp.,
Knoxville, Tennessee, in 1987 and served as its President until he sold the
company to Craig Electronics in December 1990. From 1984 until 1987, Mr. Palaia
was
4
<PAGE>
Director of Marketing for the VCR-Camcorder Product Group of Philips. He
received a Bachelor of Arts Degree in Economics from Duke University.
Terms Expiring at the 1998 Annual Meeting
Thomas E. Linnen, age 50, was Vice President - Finance, Secretary and Treasurer
of Continental Circuits Corp. (NASQ: CCIR), a manufacturer of multi-layer,
surface mount circuit boards based in Phoenix, Arizona, from 1987 until June
1996. Prior to joining Continental Circuits in 1987, Mr. Linnen was Vice
President - Finance for ITT Systems, Tempe, Arizona. Mr. Linnen has over
twenty-five years of experience in corporate finance and accounting positions,
holds a C.P.A. certificate, and serves as Chairman of the Audit Committee and as
a member of the Compensation Committee of the Board of Directors of the Company.
Mr. Linnen also serves as a member of the board of directors for Innovonics,
Inc. Mr. Linnen received a Bachelor of Science Degree in Business from the
University of Wisconsin.
William T. Walker, Jr., age 64, is Chairman and President of Walker Associates,
a Beverly Hills, California-based corporate finance consulting firm which he
founded in 1985. Mr. Walker has over forty years of experience in the capital
markets industry and currently serves as a member of the board of directors of
AmeriQuest Technologies, Inc. (NYSE: AQS), Fortune Petroleum Corporation (AMEX:
FPX), and Eagle Lifestyle Nutrition, Inc. Mr. Walker also serves on the
Compensation Committee of the Board of Directors of the Company. Mr. Walker has
been a member of the board of the Securities Industry Association, Chairman of
the California District Securities Industry Association, Governor of the Pacific
Stock Exchange, President of the Bond Club of Los Angeles, and a member of the
American Stock Exchange Advisory Committee. Mr. Walker graduated from Culver
Military Academy and attended Stanford University.
Meetings and Committees of the Board of Directors
During the fiscal year ended March 31, 1996, the Board met eight times.
The Board has standing Audit and Compensation committees.
The Audit Committee is responsible for evaluating the Company's system
of accounting controls and approves the scope of the annual audit. The committee
consists of Thomas E. Linnen (Chairman). The Committee had one formal meeting
during the fiscal year ended March 31, 1996.
The Compensation Committee consists of Thomas F. Hartley, Jr.
(Chairman), Thomas E. Linnen, and William T. Walker, Jr. The Committee acts on
matters related to executive officer compensation and grants of stock options
pursuant to the Company's stock option plans. None of the members of the
Compensation Committee is eligible to receive stock options under the Company's
plans that they administer. The Compensation Committee had one formal meeting
during the fiscal year ended March 31, 1996.
During the fiscal year ended March 31, 1996, the Board appointed a
temporary Nominating Committee of Ralph F. Palaia and William T. Walker, Jr. The
Nominating Committee met one time to determine the appropriate size of the Board
and the Director nominee for a term expiring at the 1999 Annual Meeting of
Stockholders.
All non-employee directors of the Company receive an annual retainer
fee of $15,000 paid in quarterly installments. All directors, including employee
directors, also receive an annual grant of options to purchase Common Stock from
the 1991 Nonstatutory Directors' Stock Option Plan (the "Directors' Plan"). The
Board of Directors and stockholders of the Company adopted the Directors' Plan
effective November 1, 1991. The Directors' Plan provides for the automatic
annual grant of stock options to directors serving as of September 1st of each
year. On that date, the Chairman is automatically granted options to purchase
20,000 shares of Common Stock and each other director is automatically granted
options to purchase 10,000 shares of Common Stock. The Directors' Plan also
provides for an initial grant of options upon a director's commencement of
service. The number of options granted is equal to 10,000 multiplied by a
fraction, the denominator of which is 12 and the numerator of which is the
number of full calendar months from the date the Director was first appointed or
elected to the Board to the following September 1st. The exercise price for all
options is the fair market value of the Common Stock on the date of grant.
5
<PAGE>
Each option expires on the 10th anniversary date of its grant unless earlier
terminated in accordance with the Directors' Plan. During the fiscal year ended
March 31, 1996, the Board of Directors approved a resolution voluntarily
reducing the annual grant of options to be issued from the Directors' Plan from
20,000 to 15,000 for the Chairman and from 10,000 to 7,500 for each director,
effective with the September 1996 grant. The resolution was a voluntary
reduction of a benefit previously approved by stockholders and was not intended
to restrict the Board's ability to further reduce or reinstate the annual grant
size.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Thomas F. Hartley, Jr., Thomas E. Linnen, and William T. Walker, Jr.,
all of whom are non-employee directors, serve on the Compensation Committee. Mr.
Hartley is the President of Johnson & Higgins of Arizona, an insurance brokerage
firm that obtains bids from and administers the Company's relations with
commercial insurance carriers. During fiscal 1996, Johnson & Higgins earned
$17,287 in brokerage commissions on insurance premiums paid of $150,958.
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Committee Role
As part of its function, the Compensation Committee reviews the
Company's executive compensation programs to ensure they (I) are competitive
with companies of comparable size and complexity and those within the consumer
electronic equipment industry; (ii) reflect both stockholders' and participants'
best interests; (iii) are responsive to both short and long-term corporate and
individual performance goals; and (iv) provide the necessary incentives for the
executives to further stockholders' financial interests in the Company. In
performing this review, the Committee utilizes compensation data collected from
industry association studies on compensation and corporate performance data
provided by the Company. This data includes information concerning a peer group
of companies which the Company considers its primary competitors for both
executive talent and business opportunities. These peer companies for executive
talent are not identical to the group of companies identified under the section
"Stock Performance Graph". The groups are not the same because compensation data
was obtained from trade studies which did not disclose individual company
participants and also included privately-owned competitors which do not have
publicly-traded common stock results to incorporate into the stock performance
chart.
Compensation Philosophy
The Company's executive compensation philosophy, which serves as the
foundation of the total compensation package, is based on the following
principals:
* Programs must be supportive of the Company's strategic business
objectives and thereby stockholders' financial interests in the
Company.
* A significant ownership interest in the Company by senior executives
promotes those behaviors and actions that will result in an alignment
of stockholder and management interests.
* The total compensation package for executive officers should be
competitive with those of an appropriate peer group of companies and
reflect the Company's performance against that peer group.
* Variable pay, in the form of annual incentives and long-term
stock-based compensation, is intended to create an incentive for
superior performance from executive officers.
6
<PAGE>
Base Salaries
Initially, base salaries for executive officers are set based upon a
review of the responsibility level of each position and the relative pay levels
for comparable positions at peer companies. Base salaries may be periodically
increased as a result of an individual assuming increased responsibilities, as a
result of competitive data indicating a meaningful change in base pay levels
among peer companies or as a result of the Board of Directors increasing
performance objectives and goals for the individual executive officer or the
Company.
Annual Incentives
In making determinations to award incentive payments, the Compensation
Committee reviews a variety of Company performance measures as well as the
individuals' objectives and accomplishments. The source and amount of the annual
incentives to be paid to the Company's executives is subjective, with
consideration to revenue, operating income, net income, return on equity, and
various other quantitative and qualitative assessments. The annual incentive
payment for the Chief Executive Officer is based on a percentage of pre-tax
profit of the Company for a given fiscal period plus subjective components.
Long-Term Incentives
The Company's current method of providing long-term incentive
compensation opportunities to its executive officers is through the use of stock
options. Stock options allow the recipient to purchase shares of the Company's
Common Stock at a specified price, that is not less than its fair market value
on the grant date, during a fixed period of time following the grant date. This
period has typically been ten years. The Company believes that this form of
long-term incentive is presently the best vehicle by which to link stockholder
and management interests, because value is provided to recipients only if the
Company's stock price increases.
The Compensation Committee is the administrator of the Company's stock
option plans and has the authority to approve awards to executive officers and
employees. The level of the awards granted is subjective and reflects the
relative impact which a recipient is expected to have on future corporate
results. In making this determination, the Committee considers the number of
options held by the executive officer and the dilution effect such grants may
have on existing stockholders.
Chief Executive Officer's Compensation and Company Performance
The Compensation Committee completed an individual performance review
of the Chief Executive Officer addressing such issues, among others, as
individual contributions to the Company, strengths and weaknesses in making
those contributions, and areas of responsibility the Chief Executive Officer was
to focus on. During this review, the Committee examined Mr. Hackett's and the
Company's performance. The Committee determined that Mr. Hackett met or exceeded
the strategic goals but did not meet the financial goals for the Company. In
particular, Mr. Hackett contributed strategically during fiscal 1996 by locating
and developing a second, more competitively priced Dual-Deck manufacturing
source, which permitted the Company to develop a line of Dual-Deck VCRs with
significant cost savings over the existing line and international distribution
potential. Mr. Hackett also launched the Security Products Division during
fiscal 1996 and pursued new developments in technology and strategic
diversification including the commencement of LCD-based rear projection and
digital direct view television projects. Mr. Hackett was not successful in
meeting the Company's revenue or net income goals, in part due to overall
industry weakness which the Committee recognized as a contributing factor. As a
result of the performance review and after giving consideration to the other
factors listed above in establishing executive compensation, the Committee left
Mr. Hackett's base salary unchanged for fiscal 1997 and did not award incentive
compensation for fiscal 1996.
7
<PAGE>
Section 162(m) of the Internal Revenue Code
The Committee has reviewed the Company's compensation plans in light of
the Internal Revenue Code relating to the disallowance of deductions for
compensation in excess of $1.0 million to certain executive officers. All
compensation paid to executive officers for the fiscal year ended March 31, 1996
is fully deductible. The Committee does not believe that Section 162(m)
limitations will apply to compensation to be paid in fiscal 1997.
Compensation Committee
Thomas F. Hartley, Jr., Chairman
Thomas E. Linnen
William T. Walker, Jr.
8
<PAGE>
Summary Compensation Table
The following table shows, for the fiscal year ended March 31, 1996,
the eight month transition period ended March 31, 1995 (resulting from the
change in the Company's fiscal year), and the fiscal years ending July 31, 1994
and 1993, the compensation of the Chief Executive Officer and all executive
officers of the Company with compensation exceeding $100,000:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Principal Securities All Other
Position in Salary Bonus Underlying Compensation
Fiscal 1996 Year ($) ($) Options (#) ($)(4)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Roger B. Hackett 1996 $204,500 $ 0 80,000(5) $ 77
Chairman, Chief Executive ** 1995 $127,333 $ 19,605 70,000(5) $ 0
Officer, and President (1) 1994 $179,000 $ 5,000 220,000(5) $ 0
1993 $ 79,962 $ 0 50,000 $ 0
Kevin P. Sullivan 1996 $156,006 $ 8,333 50,000 $ 0
Executive Vice President, ** 1995 $104,004 $ 5,000 20,000 $ 0
Sales and Marketing (2) 1994 $156,006 $ 0 30,000 $ 0
1993 $142,079 $ 0 20,000 $ 0
Douglas P. Klein 1996 $106,968 $ 0 25,000 $ 727
Vice President, Chief ** 1995 $ 63,773 $ 8,350 40,000 $ 0
Financial Officer, Secretary 1994 $ 75,575 $ 2,500 10,000 $ 0
and Treasurer (3) 1993 $ 13,077 $ 0 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Certain columns have been excluded because the information called for
therein is not applicable to the Company or the individuals named above
for the periods indicated.
** Information reflects compensation for the eight month transition
period from August 1, 1994 through March 31, 1995 as a result of
the change in the Company's fiscal year.
(1) Mr. Hackett joined the Company in January 1993 as President and began
serving as Chairman and Chief Executive Officer in March 1994.
(2) Mr. Sullivan joined the Company in September 1991 as Vice President -
Sales and began serving as an executive officer in February 1993.
(3) Mr. Klein joined the Company in April 1993 as Assistant Treasurer and
began serving as an executive officer in October 1993.
(4) The amounts shown consist of Company contributions for the executive
officer to the Go-Video, Inc. 401(k) Savings Plan, an employee
retirement savings plan.
(5) Includes annual, automatic option grants from the 1991 Non-Statutory
Directors' Stock Option Plan (the "Directors' Plan") pursuant to
stockholder-approved plan rules. Options granted under the Directors'
Plan totaled 20,000 shares for 1996, 1995, and 1994, respectively.
Non-cash personal benefits payable to executive officers during the
fiscal year ended March 31, 1996 did not exceed, in the aggregate, the lesser of
10% of the cash compensation or $50,000 for any individual officer.
9
<PAGE>
Stock Options
The following tables set forth grants of options to purchase shares of
Common Stock of the Company made to the executive officers named in the Summary
Compensation Table who served during the fiscal year ended March 31, 1996. The
tables also set forth the potential realizable value of these options assuming a
5% and 10% compounded appreciation in the market value of the stock over the
term of the option grants.
Option Grants in the Fiscal Year Ended March 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------- ---------------------
Potential
Individual Grants Realizable
Value at Assumed
Number % of Total Annual Rates of
of Options Stock Price
Securities Granted to Exercise Appreciation for
Underlying Employees Price Option Term
Options in the 1996 Per Expiration
Name Granted Fiscal Year Share Date 5% 10%
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Roger B. Hackett 60,000 33.3% $1.50 8/3/05 $56,601 $143,437
20,000 11.1% $1.75 9/1/05 $22,011 $ 55,781
Kevin P. Sullivan 50,000 27.8% $1.50 8/3/05 $47,167 $119,531
Douglas P. Klein 25,000 13.9% $1.50 8/3/05 $23,584 $ 59,765
</TABLE>
The options granted to the individuals listed above were made at the fair
market value of the Company's Common Stock on the date of grant and were fully
vested following a six month holding period.
10
<PAGE>
Option Exercises and Holdings
The following table summarizes option exercises during the fiscal year
ended March 31, 1996, by the executive officers named in the Summary
Compensation Table and unexercised options held by these individuals on March
31, 1996.
Aggregated Option Exercises in Fiscal 1996 and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares 3/31/96 (#) 3/31/96 (1)
Acquired
on Exercise Value Exercisable/ Exercisable/
Name (# of shares) Realized ($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roger B. Hackett - - 420,000 / 0 $ 0 / $0
Kevin P. Sullivan 25,000 $ 19,125 135,000 / 0 $ 0 / $0
Douglas P. Klein - - 75,000 / 0 $ 0 / $0
</TABLE>
(1) The closing price of the Company's Common Stock as reported for March 31,
1996 on the American Stock Exchange Composite Tape was $1.125.
Executive Separation Agreement
The Company has a Separation Agreement with Roger B. Hackett. The Agreement
provides that if Mr. Hackett's employment is terminated, Mr. Hackett would be
entitled to receive:
(a) in the event that Mr. Hackett's employment is terminated as a result of a
"takeover" of the Company, Mr. Hackett would receive 2.99 times his annual
base salary in a lump sum payment;
(b) in the event that the Company's Board initiates Mr. Hackett's separation
(absent a "takeover"), Mr. Hackett would receive payments equal to (I) 0.25
multiplied by the number of complete years of employment, to a maximum of
one; plus (ii) one, multiplied by his gross annual base salary in effect at
the time of separation. Payments would be payable in equal installments
timed to coincide with the Company's payroll period over the applicable
period. As of July 10, 1996, with three years of service, Mr. Hackett would
be entitled to receive 1.75 times his gross annual base salary payable in
equal installments over twenty-one months. During the time of such
payments, Mr. Hackett would also receive all standard employee benefits,
including Company-subsidized health insurance;
(c) in the event Mr. Hackett initiates separation with a minimum of ninety days
notice, Mr. Hackett would receive payments equal to (I) 0.125 times each
year of employment, to a maximum of one; plus (ii) 0.5, multiplied by his
gross annual base salary in effect at the time of separation. Payments
would be payable in equal installments timed to coincide with the Company's
payroll period over the applicable period. As of July 10, 1996, with three
years of service, Mr. Hackett would be entitled to receive 87.5% of his
gross annual base salary payable in equal installments over ten and 1/2
months. During the time of such payments, Mr. Hackett would also receive
all standard employee benefits, including Company-subsidized health
insurance.
The Agreement provides for the extension of the right to exercise options
to purchase Common Stock for the maximum period, not to exceed seven years,
permitted by the plans under which such options were granted. The Agreement
continues in full force and effect during the life of the Corporation or its
successors and/or assigns, unless amended or terminated with the consent of both
parties.
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following performance graph compares the yearly change since July 31,
1990 in cumulative return on the Common Stock of the Company to the AMEX Market
Value Index (Broad Market Index) and a Company-constructed Industry Peer Index.
The Industry Peer Index shown below is comprised of companies competing either
solely or substantially within the consumer electronics industry with common
stock or ADRs traded on an exchange within the United States. Each company's
stock performance is weighted within the Industry Peer Index by its relative
market capitalization. The graph assumes $100 was invested on July 31, 1990 and
shows the cumulative total return as of each July 31 thereafter through the
fiscal year ended July 31, 1994, as of the eight month transition period ended
March 31, 1995, and as of the fiscal year ended March 31, 1996.
TOTAL RETURN TO STOCKHOLDERS
<TABLE>
<CAPTION>
Total Return Analysis
7/31/90 7/31/91 7/31/92 7/30/93 7/31/94 3/31/95 3/29/96
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Go Video, Inc. $ 100.00 $ 13.46 $ 44.23 $ 38.46 $ 23.08 $ 29.09 $ 17.31
Peer Group $ 100.00 $ 102.31 $ 60.89 $ 93.25 $ 126.95 $ 127.18 $ 140.30
AMEX Market Value $ 100.00 $ 104.15 $ 109.97 $ 123.59 $ 123.78 $ 131.34 $ 161.59
</TABLE>
Companies comprising the Industry Peer Index are: Audiovox Corp., Boston
Acoustics Inc., Carver Corp., Cobra Electronics Corp., Harman International
Industries Inc., Hitachi Ltd., International Jensen Inc., Koss Corp., Matsushita
Electronics Industries Ltd., Philips Electronics NV, Pioneer Electronic Corp.,
Polk Audio Inc., Recoton Corp., Sanyo Electronics Ltd., Sony Corp., Wells
Gardner Electronics Group, and Zenith Electronics Corp. Akai Electric, Ltd. and
Victor Company Japan Ltd. were dropped from the index because they no longer
have securities listed on an American stock exchange.
12
<PAGE>
PROPOSAL 2
TO AMEND THE GO-VIDEO, INC.
CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously adopted and submitted to the
stockholders for approval an amendment to the Certificate of Incorporation (the
"Preferred Stock Amendment") to authorize the issuance by the Company of up to
1,000,000 shares of preferred stock, $.001 par value (the "Preferred Stock").
The text of the Preferred Stock Amendment is attached hereto as Exhibit A and is
incorporated herein by reference.
The Board of Directors believes that authorization of the Preferred Stock
is in the best interests of the Company and its stockholders. The Board believes
that it is advisable to authorize Preferred Stock and have it available to
provide flexibility to the Company to pursue transactions in the future that may
be beneficial to the Company. Such transactions may include public or private
offerings of shares for cash, other financing alternatives, strategic alliances,
corporate mergers, acquisitions, possible funding of new product programs or
businesses and other uses not presently determinable that, in the future, may be
deemed to be feasible and in the best interests of the Company. If such shares
are approved now and therefore available for issuance, the Board would have the
flexibility to issue shares of Preferred Stock in such transactions without
stockholder approval at the time of such a transaction.
The Company has no arrangements, agreements, understandings, or plans at
the present time for the issuance of Preferred Stock and no assurances can be
given that any offering or issuance of Preferred Stock will be effected.
The Preferred Stock will have such designations, preferences, conversion
rights, cumulative, relative, participating, optional or other rights, including
voting rights, qualifications, limitations or restrictions thereof as are
determined by the Board of Directors. Thus, if the Preferred Stock Amendment is
approved, the Board of Directors would be entitled to authorize the creation and
issuance of up to 1,000,000 shares of Preferred Stock in one or more series with
such limitations and restrictions as may be determined in the Board's sole
discretion, without further authorization by the Company's stockholders.
It is not possible to determine the actual effect of the Preferred Stock on
the rights of the stockholders of the Company until the Board of Directors
determines the rights of the holders of a series of the Preferred Stock.
However, such effects might include (I) restrictions on the payment of dividends
to holders of the Common Stock; (ii) dilution of voting power to the extent that
the holders of shares of Preferred Stock are given voting rights; (iii) dilution
of the equity interests and voting power if the Preferred Stock is convertible
into Common Stock; and (iv) restrictions upon any distribution of assets to the
holders of the Common Stock upon liquidation or dissolution and until the
satisfaction of any liquidation preference granted to the holders of Preferred
Stock.
Possible Anti-takeover Effects
Although the Board of Directors has no present intention of doing so, it
could adopt a shareholder rights plan or issue shares of Preferred Stock (within
the limits imposed by applicable law) that could, depending on the terms of such
series, make more difficult or discourage an attempt to obtain control of the
Company by means of a merger, tender offer, proxy contest or other means, and
thus make more difficult the removal of management, even if it may be beneficial
to the interests of the shareholders. For example, when in the judgment of the
Board of Directors such action would be in the best interests of the
shareholders and the Company, the Board could issue shares of Preferred Stock to
purchasers favorable to the Board of Directors to create voting or other
impediments to discourage persons seeking to gain control of the Company. In
addition, the Board of Directors could authorize holders of a series of
Preferred Stock to vote either separately as a class or with the holders of
Common Stock, on any merger, sale or exchange of assets by the Company or any
other extraordinary corporate transaction. The existence of the additional
authorized shares could have the effect of discouraging unsolicited takeover
attempts. The issuance of new shares could also be used to dilute the stock
ownership of a person, including shareholders, or entity seeking to obtain
control of the Company should the Board of Directors consider the action of such
entity or person not to be in the best interests of the stockholders generally
and the Company. Such issuance of Preferred Stock could also have the effect of
diluting the earnings per share and book value per share of the Common Stock
held by the holders of Common Stock.
13
<PAGE>
Other Anti-Takeover Provisions
The Company's Certificate of Incorporation and Bylaws already contain other
provisions that have anti-takeover effects in addition to this proposal to
authorize the issuance of Preferred Stock. The Company's Certificate of
Incorporation authorizes the Board of Directors to create a stock option plan to
create and issue shares of stock of the Company, rights or options entitling
directors, officers or employees of the Company to purchase shares of the
Company's capital stock. Such plans could be used to make more difficult or
discourage an attempt to obtain control of the Company. The Company's Bylaws
provide for classification of Directors to serve for staggered terms. A
classified Board makes it more difficult for stockholders to change the majority
of directors.
The proposal to provide for the issuance of Preferred Stock is not part of
a plan by the Company to make more difficult or discourage an attempt to obtain
control of the Company.
Dissenters' Rights
Pursuant to Delaware corporate law, the Company's stockholders are not
entitled to dissenters' rights of appraisal with respect to the Preferred Stock
Amendment.
Preemptive Rights
Pursuant to the Company's Certificate of Incorporation, the Company's
stockholders are not entitled to preemptive rights to subscribe for shares of
Preferred Stock.
Cumulative Voting
Pursuant to the Company's Certificate of Incorporation, the Company's
stockholders are not entitled to cumulative voting.
Vote Required
Approval of Proposal 2 to amend the Certificate of Incorporation to
authorize the issuance of up to 1,000,000 shares of Preferred Stock requires the
affirmative vote of a majority of the outstanding Common Stock of the Company.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR Proposal 2 to amend the
Certificate of Incorporation to authorize Preferred Stock.
14
<PAGE>
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of June 10, 1996,
concerning shares of Common Stock beneficially owned by each stockholder known
by the Company to be the beneficial owner of more than five percent of the
Common Stock, by directors, named executive officers, and by all directors and
executive officers of the Company as a group. The information presented is based
upon information furnished to the Company by the beneficial owners.
<TABLE>
<CAPTION>
Name and address of Number of shares Percent of
beneficial owner beneficially owned (3) outstanding shares
- ---------------- ---------------------- ------------------
<S> <C> <C>
Ralph Weil (1) 591,200 5.2%
R. Terren Dunlap (2) 791,132 (4) 6.5%
Roger B. Hackett (2) 436,000 (5) 3.7%
Kevin P. Sullivan (2) 143,700 (6) 1.3%
Douglas P. Klein (2) 80,000 (7) **
Thomas F. Hartley, Jr. (2) 45,000 (8) **
William T. Walker, Jr. (2) 35,450 (9) **
Thomas E. Linnen (2) 30,000 (10) **
Ralph F. Palaia (2) 30,000 (11) **
All officers and directors as a group 1,667,362 (12) 12.9%
(10 persons)
** Less than 1.0%
</TABLE>
- ----------
(1) The address of this beneficial owner is 2 Crossfield Avenue, West Nyack,
New York, 10994. The information provided was obtained from a Schedule 13D dated
September 21, 1994 on file with the Securities and Exchange Commission. The
Company makes no representation as to the accuracy or completeness of the
information reported.
(2) The address of each beneficial owner is 7835 E. McClain Dr., Scottsdale,
Arizona, 85260.
(3) All options and warrants indicated are exercisable within 60 days.
(4) Includes options and warrants to acquire 757,392 shares.
(5) Includes options to acquire 420,000 shares.
(6) Includes options to acquire 135,000 shares.
(7) Includes options and warrants to acquire 75,000 shares.
(8) Includes options to acquire 43,000 shares.
(9) Includes options and warrants to acquire 34,450 shares.
(10) Includes options to acquire 30,000 shares.
(11) Includes options and warrants to acquire 20,000 shares.
(12) Includes options and warrants to acquire 1,589,922 shares.
CERTAIN TRANSACTIONS
Thomas F. Hartley, Jr., a director of the Company, is the President of
Johnson & Higgins of Arizona, an insurance brokerage firm that obtains bids from
and administers the Company's relations with commercial insurance carriers.
During fiscal 1996, Johnson & Higgins earned $17,287 in brokerage commissions on
insurance premiums paid of $150,958. Mark A. Sullivan is the principal of Total
Market Sales Inc. ("TMS"), an independent manufacturers' representative who
represents the Company, along with other consumer electronic and personal
computer firms, in the mid-Atlantic sales region. Mr. Sullivan is the brother of
Kevin P. Sullivan, an executive officer of the Company. During fiscal 1996,
sales commissions paid to TMS totaled $113,701. Sales commissions were paid to
TMS at the same percentage of revenue rate as were the majority of the Company's
other independent manufacturers' representatives. Ralph F. Palaia, a director of
the Company, is President of Innovative Marketing Group ("IMG"), which provides
sales and marketing consultation. The Company signed a consulting agreement with
IMG effective April 1, 1995 through March 31, 1996, in which the Company issued
warrants to purchase 10,000 shares of Common Stock at the fair market
15
<PAGE>
value price on the date of issuance and paid a monthly retainer of $6,000 plus
reimbursable direct expenses in exchange for sales and marketing consulting
services. The agreement expired on March 31, 1996 and was not renewed.
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, officers, and persons who own more than 10% of a registered class of
the Company's equity securities to file reports of ownership and changes of
ownership with the Securities and Exchange Commission. Based solely on its
review of the copies of such forms received by it, the Company believes that
during the fiscal year ending March 31, 1996, all filing requirements applicable
to its directors, officers, and greater-than-10% beneficial owners were complied
with.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The principal independent public accounting firm utilized by the Company
during the fiscal year ending March 31, 1996 was Deloitte and Touche LLP,
independent certified public accountants (the "Auditors"). It is presently
contemplated that the Auditors will be retained as the principal accounting firm
to be utilized by the Company during the current fiscal year. It is anticipated
that a representative of the Auditors will attend the Annual Meeting for the
purpose of responding to appropriate questions. At the meeting, a representative
of the Auditors will be afforded an opportunity to make a statement if the
Auditors so desire.
REPORTS TO STOCKHOLDERS
The Company has mailed this Notice and Proxy Statement and a copy of its
1996 Annual Report to each stockholder entitled to vote at the Annual Meeting.
Included in the 1996 Annual Report are the Company's financial statements for
the fiscal year ended March 31, 1996. The Company's 1996 Annual Report is not to
be regarded as proxy soliciting material.
PROPOSALS BY STOCKHOLDERS
Any stockholder proposal which is intended to be presented at the next
annual meeting must be received at the Company's principal executive offices by
no later than March 11, 1997, if such proposal is to be considered for inclusion
in the Company's Proxy Statement and Form of Proxy relating to such meeting.
OTHER BUSINESS
The meeting is being held for the purposes set forth in the Notice which
accompanies this Proxy Statement. The Board of Directors is not presently aware
of any business to be transacted other than the business described in the
Notice.
Go-Video, Inc.
Douglas P. Klein
Vice President, Chief Financial Officer,
Secretary and Treasurer
16
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO THE CERTIFICATE
OF INCORPORATION OF
GO-VIDEO, INC.
Section 4 of the Certificate of Incorporation of the Company shall be amended to
read as follows:
"The total number of shares of capital stock that the Company shall have
authority to issue is: Fifty-one million (51,000,000) shares, consisting of
Fifty Million (50,000,000) shares of common stock, $.001 par value each (the
"Common Stock") and One Million (1,000,000) shares of preferred stock, $.001 par
value each (the "Preferred Stock").
Designation of Classes; Relative Rights, etc. The designation, relative rights,
- ----------------------
preferences and limitations of the shares of the Preferred Stock are as follows:
The shares of Preferred Stock may be issued from time to time in one or more
series of any number of shares, provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preferred Stock hereinabove authorized, and with distinctive
serial designations, all as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issuance of such shares of Preferred
Stock from time to time adopted by the Board of Directors pursuant to authority
so to do which is hereby vested in the Board of Directors. Each series of shares
of Preferred Stock (a) may have such voting powers, full or limited, or may be
without voting powers; (b) may be subject to redemption at such time or times
and at such prices; (c) may be entitled to receive dividends (which may be
cumulative or non-cumulative) at such rate or rates, on such conditions and at
such times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or series of stock; (d) may have such
rights upon the dissolution of, or upon any distribution of the assets of, the
Company; (e) may be made convertible into or exchangeable for, shares of any
other class or classes or of any other series of the same or any other class or
classes of shares of capital stock of the Company at such price or prices or at
such rates of exchange and with such adjustments; (f) may be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption of shares
of such series in such amount or amounts; (g) may be entitled to the benefit of
conditions and restrictions upon the creation of indebtedness of the Company or
any subsidiary, upon the issuance of any additional shares (including additional
shares of such series or of any other series) and upon the payment of dividends
or the making of other distributions on, and the purchase, redemption or other
acquisition by the Company or any subsidiary of, any outstanding shares of
capital stock of the Company and (h) may have such other relative,
participating, optional or other special rights, qualifications, limitations or
restrictions thereof; all as shall be stated in said resolution or resolutions
providing for the issuance of such shares of Preferred Stock. Shares of
Preferred Stock of any series that have been redeemed (whether through the
operation of a sinking fund or otherwise) or that if convertible or
exchangeable, have been converted into or exchanged for shares of any other
class or classes shall have the status of authorized and unissued shares of
Preferred Stock of the same series and may be reissued as a part of the series
of which they were originally a part or may be reclassified and reissued as part
of a new series of shares of Preferred Stock to be created by resolution or
resolutions of the Board of Directors or as part of any other series of shares
of Preferred Stock, all subject to the conditions or restrictions on issuance
set forth in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of any series of shares of Preferred Stock.
Subject to the provisions of any applicable law or of the By-laws of the
Company as from time to time amended, with respect to the closing of the
transfer books or the fixing of a record date for the determination of
stockholders entitled to vote and except as otherwise provided by law or by the
resolution or resolutions providing for the issuance of any series of shares of
Preferred Stock, the holders of outstanding shares of Common Stock shall
exclusively possess voting power for the election of directors and for all other
purposes, each holder of record of shares of Common Stock being entitled to one
vote for each share of Common Stock standing in his or her name on the books of
the Company. Except as otherwise provided by the resolution or
17
<PAGE>
resolutions providing for the issuance of any series of shares of Preferred
Stock, the holders of shares of Common Stock shall be entitled, to the exclusion
of the holders of shares of Preferred Stock of any and all series, to receive
such dividends as from time to time may be declared by the Board of Directors.
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after payment shall have been made to the
holders of shares of Preferred Stock of the full amount to which they shall be
entitled pursuant to the resolution or resolutions providing for the issuance of
any series of shares of Preferred Stock, the holders of Preferred Stock of any
and all series, to share, ratably according to the number of shares of Common
Stock held by them, in all remaining assets of the Company available for
distribution to its stockholders.
Subject to the provisions of this Certificate of Incorporation and except as
otherwise provided by law, the stock of the Company, regardless of class, may be
issued for such consideration and for such corporate purposes as the Board of
Directors may from time to time determine."
18
<PAGE>
PROXY SHEET
GO-VIDEO, INC.
7835 East McClain Drive
Scottsdale, Arizona 85260
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF GO-VIDEO, INC.
The undersigned hereby appoints Roger Hackett and Douglas Klein, or any one of
them acting in the absence of the other with full powers of substitution, the
true and lawful attorneys and proxies for the undersigned and to vote, as
designated below, all shares of Common Stock of Go-Video, Inc. (the "Company")
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
of Go-Video, Inc., to be held on Thursday, August 29, 1996, or at any
postponement or adjournment thereof, with the same effect as if the undersigned
was (were) present and voting the stock on all matters set forth in the Notice
and Proxy Statement for the Annual Meeting of Stockholders, dated July 10, 1996,
as directed below.
1. Proposal 1 - Election of Directors. The Board of Directors recommends
a vote for the nominee listed below.
Roger B. Hackett
|_| VOTE FOR |_| WITHHOLD AUTHORITY |_| VOTE AGAINST
2. Proposal 2 - Approval of Amendment to the Certificate of Incorporation
(the "Amendment") to authorize 1,000,000 shares of Preferred Stock. The
Board of Directors recommends a vote for Proposal 2.
|_| VOTE FOR |_| WITHHOLD AUTHORITY |_| VOTE AGAINST
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). UNLESS OTHERWISE DIRECTED, OR IF NO
DIRECTION IS GIVEN, THE PROXY WILL BE VOTED FOR THE NOMINEE IN PROPOSAL 1, IN
FAVOR OF THE AMENDMENT IN PROPOSAL 2, AND IN ACCORDANCE WITH THE BEST JUDGMENT
OF THE PROXIES OR ANY OF THEM ON ANY MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGE(S) RECEIPT OF THE NOTICE AND PROXY
STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS.
Dated_____________________, 1996 _____________________________________________
Shareholder Joint Owner
Please date and sign exactly as your name or names
appear herein. Person signing in a fiduciary capacity
or as corporate officers should sign as indicated.
