<PAGE> 1
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or 14a-12
SPATIALIZER AUDIO LABORATORIES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): N/A
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
LOGO
20700 VENTURA BOULEVARD
SUITE ONE THIRTY FOUR
WOODLAND HILLS, CA 91364
TEL 818.227.3370
FAX 818.227.9750
April 18, 1997
Dear Stockholder:
The Company's Annual Meeting of Stockholders will be held on Thursday, June
5, 1997 at 10:00 a.m. at the Warner Center Hilton hotel located at 6360 Canoga
Avenue, Woodland Hills, California 91364. I hope that you will be able to attend
in person. Following the formal business of the meeting, management will be
providing an update on our business operations, and will be available to respond
to your questions.
This year the agenda for the Annual Meeting includes the election of
directors and any other matters that may properly come before the meeting. While
the agenda may seem routine to you, YOUR VOTE IS IMPORTANT TO US. Please sign,
date and return your completed proxy card promptly so your shares can be
represented, even if you plan to attend the Annual Meeting in person. As
Chairman, I want you to know that the Board endorses each of the nominees and I
urge you to elect the nominated Directors.
Additional copies of our Annual Report and Form 10-K are available upon
request by contacting Angela Johnson at (818) 227-3370.
On behalf of the Company, I want to express our appreciation to the Board
members who are retiring, and to the members of management who have moved on to
other opportunities. Each of you has contributed to our development. Finally, I
want to thank each of you as stockholders for your continued support of our
endeavors.
Sincerely,
SPATIALIZER AUDIO LABORATORIES, INC.
STEVEN D. GERSHICK
Chairman of the Board
President and CEO
<PAGE> 3
SPATIALIZER AUDIO LABORATORIES, INC.
20700 VENTURA BOULEVARD
SUITE ONE THIRTY FOUR
WOODLAND HILLS, CA 91364
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 1997
Notice is hereby given that Spatializer Audio Laboratories, Inc. will hold
its Annual Meeting of Stockholders on June 5, 1997 at 10:00 a.m., at the Warner
Center Hilton located at 6360 Canoga Avenue, Woodland Hills, California 91364,
for the following purposes:
1. To elect three (3) directors each for a term of three (3) years, two
(2) directors each for a term of two (2) years, and two (2) directors
each for a term of one (1) year;
2. To act upon other matters that may properly come before the meeting.
The Board of Directors has fixed April 10, 1997 as the Record Date for the
determination of the stockholders entitled to notice of, and to vote at, the
Annual Meeting or any adjournment or postponement of the Annual Meeting.
At the Annual Meeting, each share of Common Stock represented at the
meeting will be entitled to one (1) vote on each matter properly brought before
the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
Stockholders who do not expect to attend the meeting in person are requested to
date, sign and mail the enclosed proxy as promptly as possible in the enclosed
envelope.
BY ORDER OF THE BOARD
Angela J. Johnson
Secretary
Dated: April 18, 1997
<PAGE> 4
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of
Spatializer Audio Laboratories, Inc. (the "Company") for use at the 1997 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held on
Thursday, June 5, 1997 at the Warner Center Hilton hotel located at 6360 Canoga
Avenue, Woodland Hills, California 91364 at 10:00 a.m., and at any adjournments
or postponements of the Annual Meeting. This proxy statement and accompanying
proxy will be mailed beginning on or about April 18, 1997 to give holders of
Common Stock of the Company of record on April 10, 1997 (the "Record Date") an
opportunity to vote at the Annual Meeting.
VOTING
In voting, please specify your choices by marking the appropriate spaces on
the enclosed proxy, signing and dating the proxy and returning it in the
accompanying envelope. If no directions are given and the signed proxy is
returned, the proxy holders will vote the shares for the election of all listed
nominees, in accordance with the directors' recommendations on the other
subjects listed on the proxy card, and at their discretion on any other matters
that may properly come before the meeting. In situations where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned proxies to the brokers (so-called "broker non-votes"), the
affected shares will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business but will not be included in
the vote totals and, therefore, will have no effect on the outcome of the votes.
A STOCKHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
STOCKHOLDER) TO ATTEND AND ACT FOR HIM AND ON HIS BEHALF AT THE MEETING OTHER
THAN THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF PROXY. TO EXERCISE THIS
RIGHT, THE STOCKHOLDER MAY INSERT THE NAME OF THE DESIRED PERSON IN THE BLANK
SPACE PROVIDED IN THE PROXY AND STRIKE OUT THE OTHER NAMES OR MAY SUBMIT ANOTHER
PROXY.
THE SHARES REPRESENTED BY PROXIES IN FAVOR OF MANAGEMENT WILL BE VOTED ON
ANY BALLOT (SUBJECT TO ANY RESTRICTIONS THEY MAY CONTAIN) IN FAVOR OF THE
MATTERS DESCRIBED IN THE PROXY.
REVOCABILITY OF PROXIES
Any stockholder giving a proxy has the power to revoke it at any time
before the proxy is voted. In addition to revocation in any other manner
permitted by law, a proxy may be revoked by instrument in writing executed by
the stockholder or by his attorney authorized in writing or, if the stockholder
is a corporation, under its corporate seal or by an officer or attorney thereof
duly authorized, and deposited at the executive office of the Company located at
20700 Ventura Boulevard, Suite 134, Woodland Hills, California, 91364, or at
Harris Trust Company of California located at 601 South Figueroa, 49th Floor,
Los Angeles, California 90017, at any time up to and including the last business
day preceding the day of the meeting, or any adjournment thereof, or with the
chairman of the meeting on the day of the meeting. Attendance at the Annual
Meeting will not in and of itself constitute revocation of a proxy.
OUTSTANDING COMMON STOCK
Holders of record of Common Stock at the close of business on April 10,
1997 ("Record Date"), will be entitled to receive notice of and vote at the
meeting. The Company is authorized to issue 50,000,000 shares of Common Stock,
par value of $0.01 US per share ("Common Stock") and 1,000,000 Preferred Shares,
par value of $0.01 US per share ("Preferred Stock"). On the Record Date, there
were 20,806,429 shares of Common Stock and no shares of Preferred Stock issued
and outstanding. The holders of Common Stock are entitled to one (1) vote for
each share held. All matters presented to the meeting require approval by simple
majority of votes cast at the meeting.
1
<PAGE> 5
SOLICITATION
The Company will bear the entire cost of the solicitation of proxies,
including preparation, assembly and mailing of this proxy statement, the proxy
and any additional material furnished to stockholders. Proxies may be solicited
by directors, officers and a small number of regular employees of the Company
personally or by mail, telephone or telegraph, but such persons will not be
specially compensated for such service. Copies of solicitation material will be
furnished to brokerage houses, fiduciaries and custodians which hold shares of
Common Stock of record for beneficial owners for forwarding to such beneficial
owners. The Company may reimburse persons representing beneficial owners for
their costs of forwarding the solicitation material to such owners.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED PROXY PROMPTLY SO YOUR
SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON.
2
<PAGE> 6
PROPOSAL 1 -- NOMINATION AND ELECTION OF DIRECTORS
The Company has nine (9) positions on its board of directors; currently
there are two (2) vacancies on the board of directors. The board of directors is
classified into three (3) classes, directors in each class being elected to
serve for three (3) years (1). At this annual meeting the Company proposes to
nominate Jerold H. Rubinstein, Stephen W. Desper and Steven D. Gershick to the
office of director for terms to end in 2000, to nominate Carlo Civelli and Scot
E. Land for terms to end in 1999 and to nominate James D. Pace and Gilbert N.
Segel for terms to end in 1998.
In each case, the elected director will continue in office until such
director's successor is elected and has been qualified, or until such director's
earlier death, resignation or removal. The By-Laws state that in any election of
directors, the persons receiving a plurality of the votes cast, up to the number
of directors to be elected in such election, shall be deemed to be elected.
Shares represented by proxies marked "withhold authority" for one (1) or more
nominees will be counted as a negative vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NAMED NOMINEE.
NOMINEES AND CONTINUING DIRECTORS
The Board of Directors believes that a classified Board of Directors with
staggered terms will help to assure the continuity and stability of the Board of
Directors and the business strategies and policies of the Company. At this
annual meeting the Company proposes to nominate Jerold H. Rubinstein, Stephen W.
Desper and Steven D. Gershick to the office of director for terms to end in
2000, to nominate Carlo Civelli and Scot E. Land to the office of director for
terms to end in 1999, to nominate James D. Pace and Gilbert N. Segel for terms
to end in 1998. The following table sets forth certain information with respect
to the nominees in each class and with respect to certain executive officers:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Nominees for terms ending in 2000:
Jerold H. Rubinstein 58 Director -- 8/91 to date.
Member of Audit Committee -- 8/91 to date.
Stephen W. Desper 54 Director -- 7/92 to date.
Chairman of the Board -- 7/92 to 12/95.
Vice Chairman of the Board -- 12/95 to date.
Principal Holder.
Steven D. Gershick 42 Director -- 7/92 to date.
President and Chief Executive Officer -- 7/92 to date.
President of Operating Subsidiary Desper Products, Inc.
("DPI") -- 3/97 to date.
Chairman of the Board -- 12/95 to date.
</TABLE>
- - ---------------
(1) Although each director is elected for a three year term, the directors must
be re-elected annually while the Company is subject to Section 2115 of the
California Corporations Code ("Section 2115"). An entity such as the Company
can be subject to Section 2115 even though it does not itself transact
business in California if, on a consolidated basis, the average of the
property factor, payroll factor and sales factor is more than fifty percent
(50%) deemed to be in California during its latest full income year and more
than one-half of its outstanding voting securities are held of record by
persons having addresses in California. Section 2115 does not apply to
corporations with outstanding securities listed on the New York or American
Stock Exchange, or with outstanding securities designated as qualified for
trading on the NASDAQ Stock Market, national market system, if such
corporation has at least eight hundred (800) beneficial holders of its
equity securities.
3
<PAGE> 7
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Nominees for terms ending in
1999:
Carlo Civelli 48 Director -- 3/93 to date.
Vice-President Finance, Europe -- 8/91 to 3/95. Principal
Holder.
Scot E. Land 42 Director Nominee
Nominees for terms ending in
1998:
James D. Pace 41 Director -- 2/95 to date.
Member of Compensation Committee -- 2/95 to date.
Gilbert N. Segel 64 Director -- 5/95 to date.
Member of Audit Committee -- 5/95 to date. Member of
Compensation Committee -- 5/95 to date.
Executive Officers:
Kathy Partch 33 Chief Financial Officer (Acting) -- 3/97 to date.
Irwin Zucker 49 President of Operating Subsidiary MultiDisc Technologies, Inc.
("MDT") -- 6/96 to date.
</TABLE>
JEROLD H. RUBINSTEIN. Director since August, 1991. Chairman and Chief
Executive Officer of DMX, Inc., formerly International Cablecasting
Technologies, Inc. Formerly co-owner and chairman of United Artist Records;
chairman of ABC Records, Inc.; co-founder and chairman of Bel-Air Savings and
Loan of Los Angeles; and co-founder and partner of JRC Oil, a Colorado oil and
gas exploration company. Attorney and certified public accountant, California.
Mr. Rubinstein is the brother-in law of Mr. Segel.
STEPHEN W. DESPER. Vice Chairman of the Board, Inventor. Devoted his full
time for a number of years to developing and refining Spatializer technology.
Recording engineer, over twenty (20) years experience; Director of Engineering
for The Beach Boys Organization. Acoustician, Acoustic Design and Noise Control
Engineer. December, 1991 to December, 1995, Chairman of Spatializer Audio
Laboratories, Inc. Since December, 1995 Vice Chairman of Spatializer Audio
Laboratories, Inc. Inventor and President of Desper Products; Inc.
("DPI") -- June, 1986 to October, 1991. Vice President and Director of Research,
DPI -- October, 1991 to December, 1996.
STEVEN D. GERSHICK. Chairman of the Board, President and Chief Executive
Officer. Director since July, 1992. Since December, 1995, Chairman of
Spatializer Audio Laboratories, Inc. Certified Public Accountant, KPMG Peat
Marwick from May, 1977 through June, 1980. From 1981 through September, 1991,
the principal of a Certified Public Accounting firm specializing in business
consulting and entertainment business management. Since October 1, 1991, CEO of
DPI. From October, 1991 to June, 1996, President of DPI. In March, 1997, resumed
role as President of DPI. Since December, 1991, President and CEO of Spatializer
Audio Laboratories, Inc. Practicing C.P.A. to October, 1991.
CARLO CIVELLI. VP Finance-Europe from August, 1991 to March, 1995. Director
since March, 1993. Has extensive experience in financing emerging public
companies. Managing director of Clarion Finanz AG, Zurich, Switzerland, for more
than the last five years. Director and Financial Consultant to Clarion Finanz
AG.
SCOT E. LAND. Director nominee. Senior Technology Analyst with Microsoft
Corporation since 1994. From 1993 to 1994, Mr. Land was Vice President of First
Marathon Securities, Toronto, Canada with responsibilities in Research and
Investment Banking, specializing in High Technology. During this same time, Mr.
Land was an advisor to Microsoft Corporation on matters related to strategic
planning and competitive product assessment. From 1988 to 1993, Mr. Land was
President and CEO of InVision Technologies, Foster City, California. Mr. Land is
on the Board of Directors of several private technology companies and non-profit
organizations.
4
<PAGE> 8
JAMES D. PACE. Director since February, 1995. Director of DPI since July,
1992. For more than the last five years, Mr. Pace has specialized in the
introduction and distribution of new technologies into the professional
recording and film industries. He is an electronics engineer with broad
experience in recording and live sound reinforcement.
GILBERT N. SEGEL. Director since May, 1995. Mr. Segel has spent more than
thirty (30) years as an independent business manager representing musical
artists, film actors and entertainment industry entrepreneurs. Since 1985, he
has concentrated on his personal investments and serves as a director of various
private business and charitable enterprises. Mr. Segel is the brother-in law of
Mr. Rubinstein.
KATHY PARTCH. Chief Financial Officer (Acting) since March, 1997. Director
of Accounting October, 1995 through March, 1997. Ms. Partch has over twelve
years of accounting and management experience in software and technologies
companies. Operated a consulting practice from 1993 to 1995, aiding businesses
such as Price Waterhouse, Knowledge Adventure, and Gibson, Dunn, and Crutcher,
in business planning, forecasting, and general accounting. Controller of Price
Waterhouse's Santa Monica office, a reengineering software development group,
from 1989 to 1993 when the group was relocated to Tampa, Florida.
IRWIN ZUCKER. Since June, 1996 President of MultiDisc Technologies, Inc. He
was Senior VP of Engineering and Product Development with Harman International
from 1993 to 1995, director of international marketing for JBL (a Harman
company) from 1991 to 1993 and director of Marketing for Dynascan Audio Group
(parent of Marantz) from 1989 to 1991. Mr. Zucker has a strong background in
both marketing and engineering and over 25 years experience in bringing
electronic products to market.
In March, 1995, Mr. Zucker was appointed Executive Vice President of Home
Theater Products International, Inc. ("HTP"), predecessor in interest to
MultiDisc. In that capacity, Mr. Zucker also functioned as President of the
MultiDisc division of HTP. In September, 1995, certain accounting irregularities
were revealed by HTP's outside auditors. As a result, senior creditors and other
parties of interest sought the resignation of all HTP board members and
requested that Mr. Zucker become acting President and CEO. In April, 1996, HTP
filed for protection under Chapter 11 of the Bankruptcy Code and, with the
consent of the Court, the Company and its creditors, Mr. Zucker continued as
HTP's sole director and senior manager through the bankruptcy proceedings, which
are currently in their final stages.
BENEFICIAL OWNERS
The following table sets forth information (except as otherwise indicated
by footnote) as to shares of Common Stock owned as of March 31, 1997, or which
can be acquired in sixty days, by (i) each person known by management to
beneficially own more than five percent (5%) of the Company's outstanding Common
Stock, (ii) each of the Company's directors and nominees for election as
directors, and (iii) all executive officers, directors and nominees for election
as directors as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
- - ------------------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Directors:
Carlo Civelli (2) (5)........................................ 3,970,958 17.2%
Jerold H. Rubinstein (5)..................................... 200,000 *
Stephen W. Desper (3) (5).................................... 2,008,845 8.7%
Steven D. Gershick (5)....................................... 1,026,144 4.5%
James D. Pace (4) (5)........................................ 276,997 1.2%
Gilbert N. Segel (5)......................................... 165,000 *
Scot E. Land................................................. 13,947 *
Named Executive Officers:
Irwin Zucker (5)............................................. 30,000 *
All directors and executive officers as a group (9 persons)
(5) (6).................................................... 7,711,891 33.4%
</TABLE>
- - ---------------
* Indicates that the percentage of shares beneficially owned does not exceed one
percent (1%) of the class.
5
<PAGE> 9
(1) Each of the persons named can be reached at the Company's offices at 20700
Ventura Boulevard, Suite 134, Woodland Hills, California, 91364, except for
Carlo Civelli, whose address is Seefeldstrasse 214, 8034 Zurich,
Switzerland. The persons named in the table have sole voting and investment
power with respect to all shares shown to be beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
(2) Carlo Civelli controls Clarion Finanz AG, a non-reporting investment
company. Holdings of Mr. Civelli and Clarion Finanz AG are combined, and
include all shares of the Company held of record or beneficially by either,
and all additional shares over which he either currently exercises full or
partial control, without duplication through attribution.
(3) Does not include 37,853 shares held by Sparkle Co. on behalf of the Estate
of Stephen Desper's deceased father, Ira Desper, as to which Mr. Desper
disclaims any direct or indirect beneficial interest or control.
(4) Does not include 134,497 shares held by Jeffrey C. Evans, a director of DPI,
and co-owner with Mr. Pace of Audio Intervisual Design and Developing
Technologies Distributors. Mr. Pace disclaims any direct or indirect
beneficial interest or control of Mr. Evans' shares.
(5) Includes an aggregate of 4,580,697 escrowed performance shares held as of
March 31, 1997 as follows: Carlo Civelli, 1,390,880 shares; Jerold H.
Rubinstein, 150,000 shares; Stephen W. Desper, 1,929,676 shares; Steven D.
Gershick, 843,144 shares; James D. Pace, 126,997 shares; Gilbert N. Segel,
110,000 shares; Irwin Zucker, 30,000 shares.
(6) Includes options to purchase 450,000 shares exercisable at various prices
from $2.13 to $3.26 per share, and expiring on various dated from February,
2000 to October, 2001.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except for salaries paid to Mr. Desper as described in 'Executive
Compensation' on page 12, no insider and no security holder who is known to the
Company to own more than five percent (5%) of the Common Stock and no member of
the immediate family of any of the officers or directors has or has had any
material interest, direct or indirect, in any transaction in which the amount
involved exceeds U.S. $60,000 since the commencement of the Company's last
completed financial year or in any proposed transaction which in either such
case has materially affected or will materially affect the Company.
In September, 1996, the Company reacquired 500,000 of the outstanding
performance shares from several of the original holders of the performance
shares, and reallocated them to key employees and directors based on an
understanding that the shares were held for such purposes.
At the 1996 Annual Meeting the stockholders approved, subject to regulatory
consent, a proposal to modify the terms of the performance share escrow
arrangements for certain founders, officers and directors. On December 30, 1996,
the Company received final consent from the British Columbia Securities
Commission ("BCSC") to a modification arrangement which was less favorable to
the holders of performance shares than the proposal approved by the
stockholders. The Company has implemented the modification as consented to by
the BCSC.
Under the revised arrangement, the performance shares will be released
automatically as follows: 5% on June 22, 1997; 5% on June 22, 1998; 10% on June
22, 1999; 20% on June 22, 2000; 30% on June 22, 2001; and 30% on June 22, 2002.
In addition to the automatic releases, performance shares can be released based
on the cash flow release criteria contained in the original June 22, 1992 escrow
agreement although, to maintain a stable market in the Company's stock, in any
year not more than 30% of the shares will be released, based on the cash flow
criteria.
In addition, under the revised arrangement the performance shares will vest
if the individual holder has not voluntarily terminated his or her service to
the Company prior to the applicable vesting dates. Any individual who is
involuntarily terminated by the Company will be entitled to an automatic
acceleration of the unvested performance shares. The Board, in its discretion,
may allow an individual who has voluntarily terminated his or her services to
the Company to retain a portion or all of any unvested performance shares.
The Company's only indebtedness to related parties is a loan payable to the
estate of Stephen Desper's deceased father, Ira A. Desper. The amount payable to
the estate at December 31, 1996 was U.S. $112,500.
6
<PAGE> 10
None of the directors or officers of the Company have been involved in any
securities transactions in the last fiscal year (excluding grants and exercises
of Employee and Director Incentive Options as described below).
COMPENSATION OF DIRECTORS
None of the Company's directors received any type of compensation or other
arrangements for services provided in their capacity as directors. However, the
Company has granted stock options to directors in that capacity. Under the 1995
Stock Option Plan, each director who is not an employee of the Company is
entitled to an automatic annual grant of an option to purchase 50,000 shares of
Common Stock. Employee directors may receive such a grant at the discretion of
the Board of Directors.
ACTIVITIES OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
Members of the Board of Directors are elected by the holders of the Common
Stock of the Company and represent the interests of all stockholders. The Board
of Directors meets periodically to review significant developments affecting the
Company and to act on matters requiring board approval. Although the Board of
Directors delegates many matters to others, it reserves certain powers and
functions to itself.
During fiscal 1996, the Board of Directors of the Company, which consisted
of seven (7) members, had formal meetings quarterly and took action by unanimous
written consent on 6 additional occasions. All incumbent directors of the
Company were present at, or participated in taking actions for, seventy-five
percent (75%) or more of the total number of meetings of the Board of Directors
of the Company and the Committees on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
Standing committees of the Board of Directors of the Company include an
Audit Committee and a Compensation and Stock Option Committee.
AUDIT COMMITTEE
The Audit Committee of the Company's Board of Directors currently consists
of Messrs. Rubinstein and Segel, each of whom is a non-employee director of the
Company. This committee is directed to review the scope, cost and results of the
independent audit of the Company's books and records, the results of the annual
audit with management and the internal auditors and the adequacy of the
Company's accounting, financial, and operating controls; to recommend annually
to the Board of Directors the selection of the independent auditors; to consider
proposals made by the Company's independent auditors for consulting work; and to
report to the Board of Directors, when so requested, on any accounting or
financial matters. The Audit Committee of the Board of Directors held three (3)
meetings during fiscal 1996.
COMPENSATION AND STOCK OPTION COMMITTEE
The Compensation and Stock Option Committee of the Company (the
"Compensation Committee") currently consists of Messrs. Pace and Segel, each of
whom is a non-employee director of the Company and a "disinterested person" with
respect to the plans administered by such committee, as such term is defined in
Rule 16b-3 adopted under the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (collectively, the "Exchange Act"). The
Compensation Committee reviews and approves annual salaries, bonuses and other
forms and items of compensation for senior officers and employees of the
Company. Except for plans that are, in accordance with their terms or as
required by law, administered by the Board or another particularly designated
group, the Compensation Committee also administers and implements all of the
Company's stock option and other stock-based and equity-based benefit plans
(including performance-based plans), recommends changes or additions to those
plans, and reports to the Board of Directors on compensation matters. The
Compensation Committee held six (6) meetings in 1996.
To the extent required by law, a separate committee of disinterested
parties administers the 1996 Incentive Plan. No Compensation Committee interlock
relationship existed in 1996.
7
<PAGE> 11
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
GENERAL
The Company's Compensation Committee is responsible for formulating and
overseeing the general executive and employee compensation policies for the
Company. Its responsibilities include determination of the compensation of
senior executive officers and administration of the annual and long-term
incentive plans and stock option plans of the Company which are not, in
accordance with their terms, administered by the Board or another particularly
designated group. Specific decisions relating to compensation earned by or
awarded to the senior officers of the Company, including the chief executive
officer and the other four highest paid executive officers (collectively, the
"Named Executive Officers") are governed by the Compensation Committee. The
Compensation Committee was formed in June, 1995.
The Compensation Committee has adopted the following policy framework on
which it intends to base the Company's compensation program and its decisions:
- Efforts should be made to achieve base salaries for the senior
executives which are competitive with compensation at the Company's
peer group of companies, not withstanding the significantly larger
revenues at many of the entities in the peer group.
- Annual incentives should consider Company performance and individual
contribution. Efforts should be made to establish parity among
individuals with similar responsibilities and performance.
- The long-term incentive program should be performance-based and
emphasize stock options to ensure that long-term compensation
primarily depends on increases in stock price. However, since the
Company is limited in the amount of stock option grants, for so long
as the Company is subject to such rules, other awards, including
restricted stock, performance units or a combination may be utilized
to provide incentives that might otherwise be reflected in stock
option grants.
- Stock option grants (or other performance-based long-term incentives
that may be awarded in the future) should be competitive with peer
practices to allow the Company to attract and retain senior personnel
and to reflect the Company's operating growth and performance.
- The relative mix of annual and long-term incentives should reflect
levels within the organization, so that senior executives receive a
greater proportion of long-term incentives and others receive
compensation that emphasizes annual compensation and incentives.
To implement these policies, the Compensation Committee will take into
account current market data and compensation trends for similar enterprises,
compare corporate performance of the Company to the performance of a selected
peer group, gauge achievement of corporate and individual objectives and
consider the overall effectiveness of the Company's compensation programs.
To assist in formulating its operating framework, in December, 1995 the
Compensation Committee engaged an independent executive compensation consultant
to assess the current competitive position of the Company's executive
compensation program and to assist the Company in implementing an ongoing long-
term incentive program. The consultant prepared comparisons of current
compensation levels between the Company and a peer group of eight (8) publicly
traded companies. In addition, broader published compensation surveys of
compensation levels for executives holding similar positions at comparable
industrial entities or organizations were used to establish competitive norms.
The survey indicated that actual cash compensation (salary plus annual
incentives) of the Named Executive Officers were below total cash compensation
levels of the peer group, but when compared to other companies of comparable
size in the high technology and electronics industries, the total cash
compensation levels of the top three Company executives were near the 50th
percentile of the companies surveyed.
8
<PAGE> 12
ANNUAL COMPENSATION
The Compensation Committee intends to review base salary levels of
executives and employees annually, subject to any provisions or limitations
included in their Employment Agreements.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) creates a
new limit on the deductibility of compensation paid to certain officers. With
respect to the Company, the covered officers are the Chief Executive Officer and
the next four most highly compensated persons in office at the end of the year.
Compensation paid to these officers in excess of $1,000,000 per person, that is
not performance-based, cannot be claimed by the Company as a tax deduction. It
is the Compensation Committee's intention to continue to utilize
performance-based compensation and to conform such compensation to these limits.
In order to conform to these new limitations, the Company is seeking stockholder
approval of the material terms of the performance goals under the Plan.
CEO COMPENSATION
The Compensation for Steven Gershick, CEO of the Company, was determined in
accordance with the guidelines discussed above. Based on the performance of the
Company and the compensation of the CEOs at several peer companies, an annual
bonus of $37,500 was paid in 1996 and base salary was set at $150,000. In
addition, on December 29, 1995, the CEO received a grant of 150,000 stock
options at an exercise price equal to fair market value on the date of grant,
vesting over a three year period. By virtue of the vesting schedule and stock
value, the grant was competitive with that of other comparable CEOs. Finally, on
September 2, 1996, 150,000 performance shares, issued in July 1992, were
transferred from prior holders to the CEO based on an understanding at that time
that those shares were held for the benefit of the CEO.
CONCLUSION
The Compensation Committee believes that the policies and concepts
discussed above will be an effective strategy since a significant portion of
compensation to the Named Executive Officers will be based on the operating
results of the Company, the commensurate results for its stockholders, and the
need to attract and retain senior management, technical and operating personnel
as the Company matures and grows. At the same time, it is intended that the
policies will encourage responsible management for both long-term and short-term
results and will further the interests of the Company's stockholders. In
implementing its policies, the Compensation Committee intends to base its review
on the experience of its members, on Company and management information, and on
discussions with and information compiled by various independent compensation
consultants and other appropriate sources.
Submitted by the Compensation Committee of the Company's Board of
Directors,
James D. Pace
Gilbert N. Segel
9
<PAGE> 13
PERFORMANCE GRAPH FOR THE COMPANY'S COMMON STOCK
The following Performance Graph reflects a comparison of the performance of
the Company's Common Stock to the common stock of other peer group companies and
to the NASDAQ Market Index:
COMPARE CUMULATIVE TOTAL RETURN AMONG
SPATIALIZER AUDIO LABORATORIES, INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX.
<TABLE>
<CAPTION>
SPATIALIZER AUDIO
MEASUREMENT PERIOD LABORATORIES, NASDAQ MARKET
(FISCAL YEAR COVERED) INC. PEER GROUP INDEX INDEX
<S> <C> <C> <C>
8/22/95 100.00 100.00 100.00
9/29/95 114.10 106.86 100.83
12/29/95 89.74 69.18 100.02
3/29/96 102.56 69.24 104.64
6/26/95 103.85 77.84 112.39
9/30/96 76.92 68.83 115.49
12/31/96 74.36 65.79 120.92
</TABLE>
Assumes $100 Invested on August 22, 1995
Assumes Dividend Reinvested
Fiscal Year Ending December 31, 1996
The peer group, for purposes of the above graph, consists of other
comparable technology companies. The peer group was expanded in 1996 to include
a competitor in the advanced audio technology industry that went public during
1996.
10
<PAGE> 14
As the Company is still a British Columbia Securities Commission Reporting
Issuer, in accordance with the Policy 41 requirements the following Performance
Graph reflects a comparison of the performance of the Company's Common Stock to
the Toronto Stock Exchange 300 Stock Index:
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL SHAREHOLDER RETURN ON COMMON SHARES
OF THE CORPORATION AND THE TSE 300 STOCK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SPATIALIZER AUDIO
(FISCAL YEAR COVERED) LABORATORIES, INC. TSE 300
<S> <C> <C>
1991 100.00 100.00
1992 333.33 98.57
1993 341.67 130.65
1994 583.33 130.42
1995 978.75 149.37
1996 822.00 191.71
</TABLE>
Assumes $100 Cdn. Investment in 1991
Assumes Dividend Reinvested
11
<PAGE> 15
EXECUTIVE COMPENSATION
The following table sets forth separately, for the last three complete
fiscal years and for the four-month transition period(1), each component of
compensation paid or awarded to, or earned by, the Chief Executive Officer
("CEO") of the Company and each of the other most highly compensated executive
officers who were serving as executive officers at the end of the last fiscal
year (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
AWARDS
-----------------------
SECURITIES
UNDER
OPTIONS/ RESTRICTED PAYOUTS
ANNUAL COMPENSATION SARS STOCK -------
NAME AND PRINCIPAL ------------------------------- GRANTED AWARDS LTIP
POSITION YEAR SALARY BONUS OTHER (#) ($) PAYOUTS
- - ---------------------------- ----- -------- ------- ------ ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Steven D. Gershick.......... 12/96 $150,000 $37,500 $8,607 50,000 See note 8 N/A
Chairman of the Board 12/95 $150,000 $37,500 $8,100 150,000(7) N/A N/A
President and CEO 12/94(1) $ 41,667 N/A $1,000 N/A N/A N/A
8/94 $125,000 $50,500 $3,000 N/A N/A N/A
Stephen W. Desper(6)........ 12/96 $125,000 N/A $6,276 50,000 N/A N/A
Vice Chairman of the 12/95 $125,000 N/A $3,000 N/A N/A N/A
Board, Director of 12/94(1) $ 41,667 N/A $1,000 N/A N/A N/A
Research of DPI 8/94 $125,000 $25,500 $3,000 N/A N/A N/A
William N. Craft(4)......... 12/96 $115,769 $30,000 $5,007 50,000 See note 8 N/A
Chief Technology Officer; 12/95 $ 90,000 $25,000 N/A N/A N/A N/A
President of DPI 12/94(1) $ 30,000 N/A N/A N/A N/A N/A
8/94(2) $ 68,907 N/A N/A N/A N/A N/A
Irwin Zucker(5)............. 12/96 $ 70,000 $37,500 $5,007 50,000 See note 8 N/A
President of MDT
Timothy R. Bratton(3)....... 12/96 $ 72,549 $30,750 N/A N/A N/A N/A
VP, Sales and 12/95 $ 90,000 $37,000 N/A N/A N/A N/A
Marketing of DPI 12/94(1) $ 22,500 $ 3,000 N/A 75,000 N/A N/A
</TABLE>
- - ---------------
(1) On December 13, 1994, the Board of Directors approved a change in the
Company's year from a fiscal year end of August 31 to a fiscal year end of
December 31 resulting in a four-month transition period (September 1, 1994 -
December 31, 1994).
(2) Prior to becoming a full-time employee of the Company in August, 1994, Mr.
Craft performed services for the Company on a part-time basis.
(3) Mr. Bratton became an employee in October, 1994. He resigned his position
effective September 6, 1996.
(4) Mr. Craft was named President of DPI in June, 1996. He resigned his
positions effective February 28, 1997.
(5) Mr. Zucker became an employee in June, 1996.
(6) Mr. Desper resigned his position as Director of Research of DPI effective
December 31, 1996. He continues in his capacity as Vice Chairman of the
Board.
(7) The exercise price for these options was adjusted to the closing market
price on April 1, 1997.
(8) On September 2, 1996, Steven D. Gershick, William N. Craft and Irwin Zucker
received performance shares which were transferred from prior holders based
on a previous understanding that those shares were held for their benefit.
Based on the market closing price of $4.25 on September 2, 1996, the value
of the shares they received was as follows: Mr. Gershick, $636,405; Mr.
Craft, $742,473; and Mr. Zucker, $127,281. As of December 31, 1996, there
were 5,776,700 performance shares outstanding which, based on the year end
closing price of the stock, are valued at $20,912,262. Unless released
earlier based on cumulative positive cash flow of $.6285 Cdn. per share,
these shares will vest based on the following
12
<PAGE> 16
schedule: 5% June, 1997; 5% June, 1998; 10% June, 1999; 20% June, 2000; 30%
June 2001; and, 30% June, 2002.
OPTION/STOCK APPRECIATION RIGHT ("SAR") GRANTS DURING THE
MOST RECENTLY COMPLETED FINANCIAL YEAR
The following table (presented in accordance with the Exchange Act and the
Regulations) sets forth stock options granted under the Company's Stock Option
Plan ("the Stock Option Plan") during the most recently completed fiscal year to
each of the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------ ALTERNATIVE
MARKET POTENTIAL TO
VALUE OF REALIZABLE REALIZABLE
% OF TOTAL SECURITIES VALUE AT ASSUMED VALUE:
OPTIONS/ UNDERLYING ANNUAL RATES OF GRANT
SECURITIES SAR'S OPTIONS/ STOCK PRICE VALUE DATE
UNDER GRANTED TO SAR'S ON APPRECIATION FOR ----------
OPTIONS/ EMPLOYEES EXERCISE OR DATE OF OPTION TERM GRANT DATE
SAR'S IN FISCAL BASE PRICE GRANT EXPIRATION ---------------- PRESENT
GRANTED YEAR ($/SECURITY) ($/SECURITY) DATE 5% ($) 10% ($) VALUE
---------- ---------- ------------ ------------ ---------- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven D. Gershick..... 50,000 7% $3.26/ $3.26/ 10/28/01 $8,150 $16,300 $0
Share share
Stephen W. Desper...... 50,000 7% $3.26/ $3.26/ 10/28/01 $8,150 $16,300 $0
Share Share
William N. Craft....... 50,000 7% $3.95/ $3.95/ 09/03/01 $9,875 $19,750 $0
Share Share
Irwin Zucker........... 50,000 7% $3.95/ $3.95/ 09/03/01 $9,875 $19,750 $0
Share Share
Timothy R. Bratton..... N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION/SAR VALUES
The following table (presented in accordance with the Exchange Act and the
Regulations) sets forth details of all exercises of stock options/SAR's during
the most recently completed financial year by each of the Named Executive
Officers and the financial year-end value of unexercised options/SAR's on an
aggregated basis:
<TABLE>
<CAPTION>
UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SECURITIES AGGREGATE OPTIONS/SARS MONEY OPTIONS/SARS AT FISCAL
ACQUIRED ON VALUE AT FISCAL YEAR- YEAR-END ($)
NAME EXERCISE REALIZED END EXERCISABLE/UNEXERCISABLE
------------------- ----------- --------- --------------- ----------------------------
<S> <C> <C> <C> <C>
Steven D.
Gershick......... 92,000 $ 332,431 283,000 $ 245,919/$0
Stephen W.
Desper........... 62,700 $ 211,479 87,300 $ 120,564/$0
William N. Craft... 15,000 $ 54,508 85,000 $ 78,769/$0
Irwin Zucker....... N/A N/A 50,000 $ 0/$0
Timothy R.
Bratton.......... 25,000 $ 43,168 0 N/A
</TABLE>
EMPLOYMENT AGREEMENTS
Effective October 1991, DPI entered into two-year employment agreements
(which continue thereafter from year to year unless terminated) with Stephen
Desper and Steven Gershick pursuant to which Stephen Desper was appointed as
VicePresident and Director of Research and Steven Gershick was designated as
President and Chief Executive Officer, each at annual salaries of $125,000.
Under their respective agreements, the employees both serve full time, may
terminate their employment on 90 days written notice and the Company may
terminate either agreement for cause or at the end of the original or any
extended term on 90 days prior written notice. In the event of termination, the
employees are entitled to payment of six months to one year's salary, depending
on the term remaining on the date of any termination. The employment agreements
provide both Messrs. Desper and Gershick with the employee benefits generally
available to other
13
<PAGE> 17
employees of the Company and, in addition, entitle them to life insurance,
disability insurance and automobile allowances. They are entitled to bonuses at
the discretion of the Board of Directors. Both agreements contain
confidentiality, nondisclosure and invention provisions typical in the industry.
As of January 1, 1995, the annual salary for Steven D. Gershick was increased to
$150,000, and as of January 1, 1997, the annual salary for Mr. Gershick was
increased to $175,000. As of December 31, 1996, Stephen Desper resigned as
Director of Research of DPI and his employment agreement was terminated, but in
accordance with the terms of the agreement he will continue to receive his
salary through June, 1997.
Effective June 1996, MDT entered into a one-year employment agreement
(which will automatically be extended for one additional year unless canceled by
either party not less than 30 days prior to the extension date) with Irwin
Zucker pursuant to which Mr. Zucker was appointed as President at an annual
salary of $140,000. Under his agreement, he will serve full time, and may
terminate his employment on 90 days written notice. The Company may terminate
the agreement for cause or without cause at any time without notice. In the
event of termination without cause, Mr. Zucker is entitled to payment equal to
one year's salary, payable in equal quarterly installments. The employment
agreement provides Mr. Zucker with the employee benefits generally available to
other employees of the Company and, in addition, entitles him to an automobile
allowance. In addition to a contractual bonus of $50,000, payable in quarterly
installments on June 26, 1996, October 1, 1996, January 1, 1997 and April 1,
1997, Mr. Zucker if entitled to bonuses at the discretion of the Board of
Directors. His agreement contains confidentiality, nondisclosure and invention
provisions typical in the industry.
REQUIREMENTS AND PROCEDURES FOR SUBMISSION OF PROXY PROPOSALS
AND NOMINATIONS OF DIRECTORS BY STOCKHOLDERS
PROPOSALS
Any stockholder who intends to present a proposal to be included in the
Company's proxy materials to be considered for action at the 1998 annual meeting
of stockholders must satisfy the requirements of the Securities and Exchange
Commission and the proposal must be received by the Secretary of the Company on
or before December 12, 1997, for review and consideration for inclusion in the
Company's proxy statement and proxy card relating to that meeting.
The chairman of the annual meeting may decline to allow the transaction of
any business or the consideration of any nomination which was not properly
presented in accordance with these requirements. The requirements with respect
to nomination of persons for director do not affect the deadline for submitting
stockholder proposals for inclusion in the proxy statement, nor do they apply to
questions a stockholder may wish to ask at a meeting. If the Company changes the
date of the 1998 annual meeting of stockholders, stockholders will be notified
in accordance with the Company's By-Laws.
APPOINTMENT OF AUDITOR
The Board of Directors has appointed KPMG Peat Marwick LLP, of 21700 Oxnard
Street, Suite 1200, Woodland Hills, California, USA, 91367, as the auditor of
the Company to hold office for the ensuing year at a remuneration to be fixed by
the directors. KPMG Peat Marwick was first appointed as auditors effective July
27, 1994. The Company expects that a representative of KPMG Peat Marwick LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement if he or she so desires, and will be available to respond to
appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the Exchange Act, the Company's directors, certain executive and
other officers, and any person holding more than ten percent (10%) of the
Company's Common Stock are required to report their ownership and any changes in
that ownership to the Securities and Exchange Commission (the "Commission") and
any exchange or quotation system on which the Common Stock is listed or quoted.
Specific due dates for these reports have been established and the Company is
required to report in this proxy statement any failure to file
14
<PAGE> 18
by directors and officers and ten percent (10%) holders. Based solely on a
review of the copies of reports furnished to the Company as filed with the
Commission, the Company believes that its executive officers and directors have
complied with the filing requirements applicable to them for the year ended
December 31, 1996.
ANNUAL REPORT
The Company will furnish without charge to each stockholder who so requests
in writing a copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 as filed with the Securities and Exchange
Commission. This report was previously mailed to all stockholders. Requests for
the Annual Report on Form 10-K should be sent to the Company at 20700 Ventura
Boulevard, Suite 134, Woodland Hills, California 91364, Attention: Secretary.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. If other matters are properly brought
before the meeting, however, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
BY ORDER OF THE BOARD
Steven D. Gershick
Chairman, President & CEO
Dated: April 18, 1997
15
<PAGE> 19
PROXY PROXY
SPATIALIZER AUDIO LABORATORIES, INC.
20700 VENTURA BOULEVARD, SUITE 134
WOODLAND HILLS, CALIFORNIA 91364
This Proxy is Solicited on Behalf of the Board of Directors and Management
of Spatializer Audio Laboratories, Inc.
The undersigned does hereby appoint Wendy Marie Guerrero and James D.
Pace as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Common Stock of Spatializer Audio Laboratories, Inc. held of record by the
undersigned on April 10, 1997, at the annual meeting of stockholders to be held
on June 5, 1997 or any adjournment thereof.
Please check this box only if you intend to [ ]
attend and vote at the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- - -------------------------------------------------------------------------------
<PAGE> 20
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
[ ]
<TABLE>
<S> <C> <C>
For All
1. ELECTION OF DIRECTORS - For Withheld (Except Nominee(s)
Nominees: Jerold H. Rubinstein, Stephen W. All All written below)
Desper, Steven D. Gershick, Carlo Civelli, / / / / / / In their discretion, the Proxies are
Scot E. Land, James D. Pace authorized to vote upon such other business
and Gilbert N. Segel. as may properly come before the meeting. This
Proxy, when properly executed, will be voted
in the manner directed by the undersigned
stockholder.
----------------------------------------- If no direction is made, this Proxy will be
voted FOR Proposal 1.
Dated: _______________, 1997
----------------------------------------
(Signature)
----------------------------------------
(Signature, if filed jointly)
Please sign exactly as name appears below.
When shares are held jointly, both should
sign. When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
