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:
[X] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VIDEOLABS, INC.
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(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):
[ ] No fee required
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
VIDEOLABS, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 29, 1997
TO THE SHAREHOLDERS OF VIDEOLABS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of VideoLabs,
Inc., a Delaware corporation (the "Company"), will be held on Thursday, May 29,
1997, at 4:00 p. m., local time, at the UMAGA Gift Mart, 10301 Bren Road W.,
Minnetonka, Minnesota 55343 for the following purposes:
1. To elect four Directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To ratify the appointment of Boulay, Heutmaker, Zibell & Co.
P.L.L.P. as independent public accountants of the Company for the
fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on April 1, 1997,
are entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. Any shareholder attending the Annual Meeting may vote in person even if
such shareholder previously signed and returned a Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jill R. Larson
Jill R. Larson
Secretary
Minneapolis, Minnesota
April ___, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
VIDEOLABS, INC.
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PRELIMINARY PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 29, 1997
The enclosed Proxy is solicited on behalf of the Board of Directors of
VideoLabs, Inc., a Delaware corporation (the "Company"), for use at the
Company's Annual Meeting of Shareholders ("Annual Meeting") to be held Thursday,
May 29, 1997, at 4:00 P.M., local time, or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. The Annual Meeting will be held at the UMAGA
Gift Mart, 10301 Bren Road W., Minnetonka, Minnesota 55343.
The Company's principal executive offices are located at 10925 Bren
Road East, Minneapolis, Minnesota 55343. The telephone number at that address is
(612) 988-0055.
These Proxy solicitation materials and the Company's Annual Report to
Shareholders for its fiscal year ended December 31, 1996 were mailed on or about
April ___, 1997, to all shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on April 1, 1997, are
entitled to notice of, and to vote at, the Annual Meeting. At the record date
3,134,948 shares of the Company's Common Stock were issued, outstanding and
entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any Proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed Proxy bearing a
later date or by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
The enclosed Proxy is solicited on behalf of the Board of Directors of
the Company.
Every shareholder voting for the election of Directors shall be
entitled to one vote for each share of Common Stock standing in such
shareholders name on the books of the Company for each Director separately on a
non-cumulative basis. On all other matters each share is entitled to one vote on
each proposal or item that comes before the Annual Meeting.
Proxy statements delivered to brokers who are prohibited from
exercising discretionary authority over beneficial owners who have not provided
voting instructions (commonly referred to as "broker non-votes") will not be
included in these vote totals. The Company will include abstentions and broker
non-votes as present or represented for purposes of establishing a quorum for
transaction of business, but will exclude abstentions and broker non-votes from
the calculation of shares entitled to vote with respect to any proposal for
which authorization to vote was withheld.
The cost of this solicitation will be borne by the Company. The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
Directors, officers and regular employees, without compensation, personally or
by telephone or telegram.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company which are intended to be
presented by such shareholders at the Company's 1998 Annual Meeting must be
received by the Secretary of the Company no later than _________, 1997, in order
to be included in the Proxy soliciting material relating to that Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth as of March 15, 1997, certain
information concerning those persons known to be the beneficial owners of more
than five percent (5%) of the outstanding shares of Common Stock of the Company;
the number of shares of Common Stock owned by all directors of the Company,
individually; and all Directors and all executive officers of the Company as a
group.
SHARES BENEFICIALLY OWNED(1)
----------------------------
NAME NUMBER PERCENT(2)
- ---- ------ ----------
Ward C. Johnson 538,000(3) 15.6%
4507 Moorland Avenue
Edina, Minnesota 55424-1158
Richard Craven 447,825(4) 12.98%
5200 Willson Road Suite 200
Edina, Minnesota 55424-1343
John A. Collins 38,889(5) 1.12%
5555 West 78th Street
Bloomington, Minnesota 55435
James W. Hansen 177,976(6) 5.16%
26 Hwy 96E
Dellwood, MN 55110
Douglas Clapp 310,000 8.99%
4312 Branson
Edina, Minnesota 55424
Perkins Capital Management, Inc. 291,150(8) 8.44%
730 East Lake Street
Wayzata, Minnesota 55391
Jill R. Larson 47,000(7) *
14228 Shore Lane
Prior Lake, Minnesota 55372
All Directors and officers as a group
(5 persons) 1,249,690 34.86%
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* Less than one percent (1%).
(1) Unless otherwise noted, all shares are beneficially owned and the sole
voting and investment power is held by persons indicated based upon
there being 3,134,948 Common Shares outstanding.
(2) Includes shares of Common Stock issuable upon the exercise of warrants
or options. (See below for an analysis of management warrants and
options.)
(3) Includes warrants owned by Mr. Johnson to purchase 30,000 shares of the
Company's Common Stock.
(4) Includes warrants owned by Mr. Craven to purchase 87,301 shares of the
Company's Common Stock and 3,000 shares of the Company's Common Stock
and warrants to purchase 3,000 shares of the Company's Common Stock
owned by Mr. Craven's children.
(5) Includes warrants to purchase 5,556 shares of the Company's Common
Stock.
(6) Includes options to purchase 150,000 shares of the Company's Common
Stock.
(7) Includes options to purchase 47,000 shares of the Company's Common
Stock.
(8) Includes sole voting power over 80,500 shares of the Company's Common
Stock and sole dispositive power over 291,150 shares of the Company's
Common Stock.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Company's Board of Directors currently has three (3) members. There
is currently one vacancy on the Board of Directors. Four directors are to be
elected at the Annual Meeting. Unless otherwise instructed, the Proxy Holders
will vote the Proxies received by them for the four nominees named below. In the
event that any nominee is unable or declines to serve as a Director at the time
of the Annual Meeting, the Proxies shall be voted for any nominee who shall be
designated by the current Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as Directors, the Proxy
holders intend to vote all Proxies received by them in such a manner as will
ensure the election of the nominees listed below. The term of office of each
person elected as a Director will continue until the next Annual Meeting of the
Shareholders and until his successor has been duly elected and qualified. It is
not expected that any nominee will be unable or will decline to serve as a
Director.
The following named persons have been nominated for election to the
Company's Board of Directors:
Name of Nominee Age Positions Held With The Company
--------------- --- -------------------------------
Ward C. Johnson 53 Director of the Company.
Richard F. Craven 52 Director of the Company.
John A. Collins 55 Director of the Company.
James W. Hansen 42 Acting President, Treasurer and CEO
Nominated as Chairman of the Board
The Board of Directors recommends a vote FOR each nominee.
Ward C. Johnson had been President, Treasurer and a Director of the
Company since its inception. He retired as President and Treasurer as of
November 1, 1996. He remains the Chairman of the Board of Directors. He holds a
bachelor of science degree in chemical engineering from the University of
Minnesota. From 1990 through 1992, he was president of Image-In, Inc., a
distributor which developed image processing software. Mr. Johnson left
Image-In, Inc. in February 1992. Image-In, Inc. filed for bankruptcy in April
1993. From 1980 through 1990, Mr. Johnson was President of Moniterm Corporation,
a manufacturer of high resolution monitors and control boards.
Richard F. Craven has been a Director of the Company since 1992. He
holds a bachelor of science degree in business from the University of Minnesota.
Mr. Craven has been in the real estate and insurance business since 1965,
managing, owning and developing several business ventures. Mr. Craven is also a
Director of RSI, Inc. See "Certain Transactions".
John A. Collins has been a Director of the Company since 1992. He holds
a bachelors degree in liberal arts from Regis College in Denver Colorado. From
1962 to 1981 Mr. Collins held various sales and sales management positions. In
1983, Mr. Collins founded Amcom Software, Inc. and is its President and Chief
Executive Officer.
James W. Hansen has been acting President, CEO and Treasurer of the
Company since November 1996 and has been nominated to become chairman. Mr.
Hansen holds bachelor degrees in Physiology and Physics Education from the
University of Minnesota and an MBA in Finance from the University of St. Thomas.
From 1979 - 1983 Mr. Hansen was a teacher and management consultant. From 1983 -
1986 he was a Vice President of the Apache Corporation, a NYSE traded oil and
gas exploration company. From 1986 - 1992 he was a Senior Vice President and
General Manager of the pension division of Washington Square Capital, a
Reliastar Company, a NYSE traded financial services company. Since 1992 Mr.
Hansen has served as an investor, Director, President or Vice President of
several private companies in medical services and technology. He serves as a
Director of Kinnard Investments, Inc. and Editek, Inc. both publicly traded
companies and has taught in the MBA program at the University of St. Thomas
since 1984.
OTHER OFFICERS AND SIGNIFICANT EMPLOYEES
Jill R. Larson, age 30, has been Secretary of the Company since
February 1994, and has been the Business Manager of the Company since its
inception in July 1992 and most recently was promoted to Vice President of
Administration. Ms. Larson holds an associate of applied science degree in
business from Northland Community College. From 1988 through 1992 she was
Business Manager for Foundation Publishing which developed a desktop publishing
application and distributed other Macintosh software applications.
Frank J. Broghammer, Chief Financial Officer left the employ of the
Company in December 1996 but remains as a part-time consultant. Broghammer holds
a BBA Degree from the State University of Iowa and is a registered CPA in the
State of Iowa. Mr. Broghammer has previous experience as Chief Financial Officer
of a publicly held company. During 1994 Broghammer acted as an independent
accounting consultant for a number of small companies. From 1991 through 1993
Mr. Broghammer worked in the finance and factoring industry as account executive
operating officer of National Trade Trust and Corporate Financers, Inc.,
respectively.
Gary Campbell, Vice President of sales left the employ of the Company
in December 1996 and has not been replaced at this time.
There is no family relationship between any director or officer of the Company.
BOARD MEETINGS AND COMMITTEES
Ward C. Johnson serves as Chairman of the Board of Directors of the
Company. The Board of Directors held a total of nine (9) meetings during the
fiscal year ended December 31, 1996. No Director attended fewer than
seventy-five (75%) percent of all such meetings of the Board of Directors and of
the committees, if any, upon which such Director served.
The Audit Committee consists of Messrs. Collins and Craven. The
principal functions of the Audit Committee are to recommend engagement of the
Company's independent public accountants, to consult with the such accountants
concerning the scope of the audit, to review with them the results of their
examination, to review and approve any major accounting policy changes affecting
the Company and to review the Company's financial control procedures and
personnel. The Audit Committee held 2 meetings during fiscal year 1996.
The Compensation Committee currently consists of Messrs. Collins and
Craven. The Compensation Committee held one meeting during fiscal year 1996. The
function of the Compensation Committee is to make salary, bonus and compensation
recommendations to the Board of Directors of the Company. The Board of Directors
of the Company has developed a compensation philosophy for all employees. It is
the Company's policy to have all employees serve as employees at will with no
employment contracts and to set base salaries at the midpoint of a range
determined by independent surveys for that position if the incumbent fully meets
the experience and skills necessary for success in that position. Additional
financial compensation is based on performance related to success factors set by
the Company's Board of Directors annually. In 1997 additional compensation could
be earned as a profit sharing award if the Company meets certain pretax return
goals. No payments are made under the plan until shareholders attain a 6% pretax
ROE. The plan then begins awarding increasing amounts to a pool shared with all
employees as shareholder returns increase.
Executives also participate in an additional plan based on annual
objectives of the Company similar to the profit sharing plan with amounts
ranging up to 50% of base compensation. Participants can be awarded qualified
employee stock options to recognize long term contributions to the Company equal
to 50% of base compensation annually. The total pool of qualified options is
limited to 10% of outstanding shares.
COMPENSATION OF DIRECTORS
On June 3, 1994, the Company's Board of Directors authorized payment to
non-employee Directors of $50.00 per meeting.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation awarded to, earned by,
or paid for all services rendered to the Company by the Company's Chief
Executive Officer and the other most highly compensated executive officers whose
total compensation exceeded $100,000 at the fiscal year end, for services to the
Company in all capacities during the three fiscal years ended December 31, 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation Awards
--------------------- ----------------------------------------
Other Restricted Options/SARs
Name and Principal Fiscal Annual Stock No. of
Position Year Salary Bonus Compensation Awards Shares
-------- ---- ------ ----- ------------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
James Hansen(1) 1996 $20,000 0 $0 0 150,000
Acting President &
Chief Executive Officer
Ward C. Johnson(2) 1996 $105,990 0 $5,000(3) 0 0
Former President & 1995 $75,000 0 $6,000(3) 0 0
Chief Executive Officer 1994 $75,000 0 $6,000(3) 0 0
1993 $66,462 0 $6,000(3) 0 0
</TABLE>
(1) Includes compensation received as part of a consulting agreement see
"Employment Contracts and Compensatory Arrangements" for the interim
period of November 1, 1996 to December 31, 1996.
(2) Includes compensation received as part of an employment agreement and
retirement agreement see "Employment Contracts and Compensatory
Arrangements". Mr. Johnson was President and CEO for the interim
period of January 1, 1996 to October 31, 1996.
(3) Includes $360.00 monthly automobile allowance and $140.00 monthly
entertainment and expense allowance which is used for country club
membership.
INDIVIDUAL OPTIONS
There were 150,000 non-qualified stock options issued during 1996 to the
Company's Acting President & Chief Executive Officer.
AGGREGATE OPTIONS EXERCISED AND HOLDINGS
The following table sets forth certain information with respect to
aggregate options exercised during 1996 and options held at the end of such year
by the Company's Chief Executive Officer and the other most highly compensated
executive officers whose total compensation exceeded $100,000 at the fiscal year
end.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
Value of Unexercised
Number of Unexercised In-The-Money Options
Shares Options at Fiscal Year End at Fiscal Year End
Acquired on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James Hansen 0 0 150,000 0 0 0
</TABLE>
EMPLOYMENT CONTRACTS AND COMPENSATORY ARRANGEMENTS
In November of 1996 the Company entered into an agreement with
The Hansen Company and James W. Hansen its principal, to provide executive
leadership to the Company and to develop a strategic plan to optimize
shareholder value. The agreement called for a minimum three month commitment
ending February 15, 1997 and extended monthly thereafter at the mutual agreement
of both parties. James Hansen received 150,000 non-qualified options at 13/16 as
an inducement to provide services to the Company and The Hansen Company receives
a retainer of $8,000 per month for services of a minimum of 24 hours per week as
well as reimbursement of normal business expenses. Mr. Hansen has been nominated
to become Chairman of the Board of Directors at the annual meeting and it is the
Companies intention to enter into a part-time permanent employment agreement
with Mr. Hansen following that action.
In November of 1996 the Company entered into an agreement with Mr. Ward
Johnson, its founder and President, to retire from active management and as an
employee of the Company but to continue to provide advice and to serve as the
Chairman until the annual meeting. The agreement calls for a decreasing monthly
retainer over 17 months totaling $101,000. These payments may be offset by net
revenues earned by Mr. Johnson in his development activities of certain projects
abandoned by the Company, but continuing to be pursued by Mr. Johnson and new
investors. Mr. Johnson has agreed to continue to provide continuing assistance
to the Company during this time period.
At the sole discretion of the Company Mr. Johnson may receive an
additional payment from the Company if certain projects under his direction
become viable products for the Company and the Company retains a right of first
refusal on any related technologies developed by Mr. Johnson during the term of
his retainer.
The Company has an agreement with Mr. Frank Broghammer its former Chief
Financial Officer to serve as a consultant on financial and operational matters
for up to four hours per week. The agreement is for a six month period ending in
May 1997 and may be extended by mutual agreement of both parties.
CERTAIN TRANSACTIONS
PURCHASES OF COMMON STOCK OF THE COMPANY
In July 1992: (i) Mr. Ward C. Johnson purchased 540,000 shares of the
Company's Common Stock for $5,400; (ii) Mr. Douglas Clapp purchased 360,000
shares of the Company's Common Stock for $3,600; (iii) Mr. Richard F. Craven
purchased 266,667 shares of Common Stock and a warrant to purchase 44,444 shares
of Common Stock at an exercise price of $1.50 for $400,444; (iv) Mr. John A.
Collins purchased 33,333 shares of the Company's Common Stock and a warrant to
purchase 5,556 shares of the Company's Common Stock at an exercise price of
$1.50 for $50,055.
In April 1993:; (i) Mr. Johnson purchased 17,858 Units (each unit
consisting of one share of the Company's Common Stock and one warrant to
purchase one share of the Company's Common Stock) for $50,003, and (ii) Mr.
Craven purchased 17,857 Units for $50,000.
In June 1993, Mr. Craven purchased 20,000 Units for $56,000. Effective
October 1993, the Company granted options to purchase 7,000 shares of Common
Stock to Jill R. Larson at $2.65 per share. Effective October 1994, the Company
granted options to purchase 10,000 shares of Common Stock to Jill R. Larson at
an exercise price of $3.13 per share.
In February 1995 the Company granted options to purchase 10,000 shares
of Common Stock to Frank J. Broghammer. In October 1995 the Company granted
options to purchase shares of Common Stock to Frank J. Broghammer 15,000 shares,
Jill Larson 10,000 shares and Gary Campbell 30,000 shares at an exercise price
of $2.13 per share.
In December 1996 the Company granted qualified options to purchase
20,000 share of Common Stock to Jill R. Larson at an exercise price of $0.8125.
In December 1996 the Company granted 150,000 non-qualified options to James
Hansen at an exercise price of $0.8125.
SALE OF ODYSSEY
In 1993, the Company determined that it would be in the Company's best
interest to sell the business operations of the Company's Odyssey division. The
Company received an offer to purchase the assets of its Odyssey division from
Rocket Science, Inc. ("RSI"), a Minnesota corporation founded by Richard Craven
and in which he and Douglas Clapp are now shareholders, officers and directors.
Mr. Craven and Mr. Clapp were also then directors of the Company as well. The
Company received a fairness opinion from the Sheffield Group, Ltd., a
Minneapolis-based investment banking firm, stating the proposed sale to RSI
represented a fair and reasonable value for the assets to be sold. The Company's
Counsel is also counsel to the Sheffield Group Limited. On December 23, 1993,
the Board of Directors considered and approved the sale of the assets of the
Company's Odyssey Division to RSI for $100,000, pursuant to a convertible note
in the amount of $100,000, with interest at seven percent (7%) per annum, which
is convertible, at the election of the Company, into 44,444 shares of RSI common
stock. Neither Messrs. Craven or Clapp voted in connection with the Company's
approval of this transaction. On December 30, 1993, the Company sold the assets
of its Odyssey Division to RSI under the conditions of the purchase agreement
and related documents approved by the Company's Board of Directors on December
23, 1993. RSI's note to the Company provided for monthly payments of interest at
7% per annum, a principal payment of $10,000 due on December 31, on each of the
years 1995, 1996, and 1997, and the payment to the Company of the remaining
principal and accrued and unpaid interest on December 31, 1998, and is secured
by all the assets sold by the Company to RSI. As of December 31, 1994, the
Company has received $7,000 of interest on this note.
In June, 1995, the Company exercised its conversion privilege on the note and
converted the note to 88,888 shares of common stock of RSI, Inc. based on a 2:1
stock split of the RSI, Inc. Common stock. In July, 1995, the Company sold
25,000 shares of its holdings of RSI, Inc. Common stock. As a result of the
above transactions the Company recorded a $95,000.00 gain on the conversion of
the note, which had previously been carried on the books at a value of
$5,000.00, and a gain on the sale of the 25,000 shares of RSI, Inc. common stock
of $103,695.00. The Company sold the remaining 63,888 shares at a discount in
May 1996 after receiving consent from the underwriter for a book profit of
$230,354.
GUARANTEE
During 1993, in order to induce the Company's bank to issue a letter of
credit in the amount of $100,000 to purchase inventory from foreign
manufacturers, Messrs. Johnson and Craven each personally guaranteed the
Company's obligation to pay such letter of credit. In April 1993, Messrs.
Johnson and Craven were each issued a warrant to purchase 5,000 shares of the
Company's Common Stock at an exercise price of $2.65 in return for their
personal guarantees of this bank letter of credit.
PURCHASE OF REAL ESTATE IN ROTTERDAM
In 1994 the Company purchased a condominium in Rotterdam, The
Netherlands for $137,579, for use by Company sales representatives. From
September, 1994 through November 15, 1996, this condominium was occupied by Greg
Craven, a former sales representative of the Company who is also the adult son
of Richard F. Craven, a Director of the Company. Greg Craven is no longer
employed by the Company. The condominium is for sale and listed with a
Netherlands Real Estate Agent.
COMPLIANCE OF OFFICERS AND DIRECTORS WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC") and the National Association of
Security Dealers, Inc.. Such officers, directors and ten percent (10%)
shareholders are also required by SEC rules to furnish the Company with copies
of all section 16(a) forms that they file.
Based solely on its review of copies of such reports received or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended December 31, 1996, all Section 16(a) filing
requirements applicable to its officers, directors and ten percent (10%)
shareholders were complied with except that the year end Form 5 filings for
Messrs. Johnson, Hansen and Larson were filed late.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of the Audit Committee, the Board of Directors
has appointed Boulay, Heutmaker, Zibell & Co., P.L.L.P. independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 1997, and recommends that shareholders vote FOR
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
Boulay, Heutmaker, Zibell & Co., P.L.L.P. has audited the Company's
financial statements since the Company was founded in 1992. Its representatives
are expected to be present at the Annual Meeting, will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed Proxy to vote the shares they
represent according to their best judgment.
It is important that your shares be represented at the Annual Meeting,
regardless of the number of shares which you hold. You are, therefore, urged to
execute and return the accompanying Proxy in the envelope which has been
enclosed, at your earliest convenience.
THE BOARD OF DIRECTORS
Dated: April ____, 1997
VIDEOLABS, INC.
10925 BREN ROAD EAST MINNETONKA, MN 55343
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, having duly received the Notice of Annual Meeting and Proxy
Statement dated , , hereby appoints James W. Hansen and Jill R. Larson proxies
(each with the power to act alone and with the power of substitution and
revocation), to represent the undersigned and to vote, as designated below, all
common shares of VideoLabs, Inc. which the undersigned is entitled to vote at
the annual meeting of shareholders of VideoLabs, Inc., to be held at 4:00 pm on
Thursday, May 29, 1997, at the UMAGA Gift Mart, 10301 Bren Road West,
Minnetonka, Minnesota, and any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY TO VOTE FOR ALL NOMINEES LISTED
BELOW): BELOW:
(INSTRUCTION: to withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below:)
WARD C. JOHNSON RICHARD F. CRAVEN JOHN COLLINS JAMES W. HANSEN
2. PROPOSAL TO RATIFY THE APPOINTMENT OF BOULAY, HEUTMAKER, ZIBELL & CO. as
the independent auditors for the Company for the fiscal year ending
December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED, AND TO BE COMPLETED AND SIGNED ON THE REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
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 shareholder. If no direction is made, this proxy will be voted
for all directors named in Item 1 and for proposal 2.
PLEASE SIGN, DATE AND MAIL THIS PROXY STATEMENT IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
Sign exactly as your name appears below, in the case of joint tenancy, both
joint tenants must sign; fiduciaries please indicate title and authority.
Dated:___________________________, 1997
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Signature
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Signature
