KOALA CORPORATION
May 1, 1997
TO THE SHAREHOLDERS OF KOALA CORPORATION
You are cordially invited to attend the Annual Meeting of Shareholders of
Koala Corporation to be held on Friday, May 30, 1997, at 2:00 p.m. at the
Embassy Suites Hotel, 4444 Havana Street, Denver, Colorado. I encourage you to
attend. Whether or not you plan to attend the meeting, I urge you to complete
and sign the accompanying Proxy and return it in the enclosed envelope. Also
attached for your review are the formal Notice of Meeting and Proxy Statement.
On behalf of your Board of Directors and employees, thank you for your
continued support of Koala Corporation.
Very truly yours,
Mark A. Betker,
Chairman and Chief Executive Officer
<PAGE>
KOALA CORPORATION
11600 E. 53rd Ave., Unit D
Denver, Colorado 80239
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 30, 1997
TO: The Shareholders of Koala Corporation:
The Annual Meeting of Shareholders of Koala Corporation ("the Company")
will be held on Friday, May 30, 1997 at 2:00 p.m. at the Embassy Suites Hotel,
4444 Havana Street, Denver, Colorado.
The items of business are:
1. To elect five directors to hold office until the next Annual Meeting of
Shareholders or until their successors are elected;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record as shown on the books of the Company at the
close of business of April 23, 1997 will be entitled to vote at the meeting and
any adjournment thereof.
This notice, the Proxy Statement and the enclosed Proxy are sent to you by
order of the Board of Directors.
Robert D. Scott,
Secretary
May 1, 1997
Denver, Colorado
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND IN
PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON IF THEY DESIRE.
<PAGE>
KOALA CORPORATION
11600 E. 53rd Ave., Unit D
Denver, Colorado 80239
_________________________
PROXY STATEMENT
_________________________
ANNUAL MEETING OF SHAREHOLDERS
MAY 30, 1997
PROXY SOLICITED BY THE BOARD OF DIRECTORS
This Proxy Statement is furnished to the record holders of shares of Common
Stock of Koala Corporation, a Colorado corporation (the Company ), as of April
23, 1997, by order of the Board of Directors. This Proxy Statement is furnished
in connection with the Board of Directors solicitation of the enclosed Proxy for
the Annual Meeting of Shareholders to be held on Friday, May 30, 1997, at 2:00
p.m. at the Embassy Suites Hotel, 4444 Havana Street, Denver, Colorado. A
shareholder giving a Proxy may revoke it at any time prior to the actual voting
at the Annual Meeting of Shareholders by filing written notice of revocation
with the Secretary of the Company, by attending the Annual Meeting of
Shareholders and voting in person, or by filing a new Proxy with the Secretary
of the Company. The revocation of a Proxy will not affect any vote taken prior
to such revocation. This Proxy Statement is expected to be first mailed to
shareholders on or about May 2, 1997.
The Annual Meeting of Shareholders has been called for the purpose of
electing five directors for a one-year term, and ratifying the appointment of
Ernst & Young LLP as independent auditors of the Company for the fiscal year
ending December 31, 1997. All properly executed proxies received at or prior to
the meeting will be voted at the meeting. If a shareholder directs how a Proxy
is to be voted with respect to the business coming before the meeting, the Proxy
will be voted in accordance with the shareholder's directions. If a shareholder
does not direct how a Proxy is to be voted, it will be voted FOR electing
management's nominees as members of the Company's Board of Directors, and FOR
ratifying the appointment by the Board of Directors of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on April 23, 1997, the record date for the Annual
Meeting of Shareholders, there were 2,481,260 shares of Common Stock
outstanding. Each share of Common Stock is entitled to one vote on each matter
properly coming before the meeting. Cumulative voting for directors is not
permitted.
ELECTION OF DIRECTORS
The Board of Directors recommends that the five nominees named below be
elected to serve as directors of the Company. Directors are elected to serve a
one-year term. Directors being elected at this Annual Meeting of Shareholders
will serve until the next Annual Meeting of Shareholders, or until their
successors have been duly elected and qualified. All nominees have consented to
serve if elected, but if any nominee becomes unable to serve the persons named
as proxies may exercise their discretion to vote for a substitute nominee.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present in person or by proxy at the meeting and entitled to
vote is required to elect directors. Abstentions are treated as present and
entitled to vote and broker non-votes are treated as not present and not
entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTING THE NOMINEES SET
FORTH BELOW FOR DIRECTOR.
<PAGE>
Directors and Executive Officers
The following table lists the names, ages and positions of the directors
and executive officers of the Company as of April 15, 1997. The members of the
Board of Directors are elected to serve until the next Annual Meeting of
Shareholders. All executive officers have been appointed to serve until their
successors are elected and qualified. Additional information regarding the
business experience length of time served in each capacity and other matters
relevant to each individual is set forth below the table.
<TABLE>
<CAPTION>
Name Age Company Position Director/Officer Since
<S> <C> <C> <C>
Mark A. Betker 46 Chairman, Chief Executive 1995
Officer, and Director
Michael C. Franson 42 Director 1994
Thomas W. Gamel 57 Director 1993
John T. Pfannenstein 40 Director 1993
Ellen S. Robinson 34 Director 1997
Jeffrey L. Vigil 43 Treasurer and Vice President 1996
of Finance and Administration
</TABLE>
Mark A. Betker has served as Chief Executive Officer, President and a
Director since joining the Company in November 1995, and as Chairman since
December 1996. From 1986 to 1995, Mr. Betker was executive vice president of
Windsor Industries Inc., a world-wide manufacturer of building maintenance
equipment. Mr. Betker received an MBA degree from Regis University and a
bachelors degree from the University of Wisconsin.
Michael C. Franson is a Director of the Company. He is currently an
Executive Vice President and principal of The Wallach Company, Inc., a
investment banking firm located in Denver, Colorado where he has worked since
1988.
Thomas W. Gamel is a Director of the Company. Since 1992, Mr. Gamel has
served as Chairman of Rockmont Value Investors, Ltd. ("Rockmont"), a
privately-held investment company based in Denver, Colorado. He has been an
owner and director of Timpte Industries, Inc., a diversified private holding
company since 1970, and is an owner and director of several other private
companies. Mr. Gamel, a certified public accountant, received a bachelors degree
from the University of Notre Dame.
John T. Pfannenstein is a Director of the Company. From 1993 to 1995, he
served as the Company s Chairman of the Board, and from 1993 to May, 1996 he
served as the Company's Treasurer. Mr. Pfannenstein also serves as President of
Rockmont. From 1988 to 1992, he was president of Pfannenstein & Associates,
Inc., a Denver-based investment banking firm. Mr. Pfannenstein is a certified
public accountant and received a bachelors degree from St. John s University
(Minnesota).
Ellen S. Robinson is a Director of the Company. Ms. Robinson has been the
President of Ascent Sports, Inc. since June, 1996, where she oversees the
business operations of the Colorado Avalanche professional hockey team and the
Denver Nuggets professional basketball team. From 1988 to 1996, Ms. Robinson was
the vice president of customer development, general manager and area marketing
manager for the Pepsi Cola Bottling Company in Denver. Ms. Robinson also serves
as a director of a number of private non-profit businesses. Ms. Robinson
received a bachelors degree from the Wharton School of Business at the
University of Pennsylvania and a certificate in international business from the
University of Colorado.
<PAGE>
Jeffrey L. Vigil has served as the Company's Treasurer and Vice President
of Finance and Administration since May 1996. From 1980 to 1989 and from 1993 to
1996, Mr. Vigil held various positions at Energy Fuels Corporation, a privately
owned Colorado coal company, including Accounting Manager, Contract
Administrator, Controller and Vice President of Finance. From 1990 to 1993 Mr.
Vigil was a self-employed financial consultant. Mr. Vigil received a bachelors
degree in Accounting from the University of Wyoming.
There are no family relationships among directors or executive officers
except that John T. Pfannenstein and Jeffrey L. Vigil are brothers-in-law.
During the fiscal year ended December 31, 1996, the Board of Directors held
two meetings and took action by unanimous written consent on one occasion.
Board Committees
The Board of Directors has an Audit Committee, which consisted of Mr.
Franson, Mr. Pfannenstein and Donald R. Brattain until Mr. Brattain's
resignation as a Director in December, 1996. On January 29, 1997, Ms. Robinson
was appointed to serve on the Audit Committee to fill the vacancy created by Mr.
Brattain's resignation. The purpose of the Audit Committee is to recommend the
appointment of the independent auditors for the Company, review the scope of the
audit, examine the auditors reports, make appropriate recommendations to the
Board of Directors as a result of such review and examination, and make
inquiries into the effectiveness of the financial and accounting functions and
controls of the Company. The Audit Committee held no meetings during 1996. The
Company has no nominating or compensation committees.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company s
directors, certain officers and persons holding 10% of the Company s Common
Stock to file reports with the Securities and Exchange Commission regarding
their ownership and regarding their acquisitions and dispositions of the Company
s Common Stock.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended December 31, 1996, all filing requirements
applicable to its executive officers, directors and greater than ten percent
beneficial owners were complied with except that Mr. Vigil failed to timely file
a report on Form 3. The Company has also determined that Rockmont failed to
timely file its Report on Form 3 when obligated to do so in 1993. However, the
majority owners of Rockmont have filed reports under Section 16(a) disclosing
their beneficial interests in the shares held by Rockmont. Mr. Jeff H. Hilger, a
former officer and director of the Company, resigned as a director in December
1996. Based solely on a review of its shareholder records, the Company believes
that Mr. Hilger, currently owns no stock of the Company. The Company is unable
to determine whether any reports under Section 16(a) were required to be filed
by Mr. Hilger during the past year and has no record that any filings, if
required, have been made by him for that period.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the fiscal years ended
December 31, 1994, 1995 and 1996 of Mr. Betker who was the Chief Executive
Officer of the Company at December 31, 1996. The Company had no other executive
officers who received compensation of $100,000 or more during the year ended
December 31, 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Other Annual Option
Principal Position Year Salary Bonus Compensation Awarded
------------------ ---- ------ ----- ------------ -------
($) ($) ($) (#)
<S> <C> <C> <C> <C> <C>
Mark A. Betker 1996 175,000 27,580 -- --
Chief Executive 1995 22,884(1) -- --(2) 250,000
Officer 1994 -- -- -- --
______________________
<FN>
(1) Does not include consulting fees paid to Mr. Betker prior to his
employment by the Company in the amount of $18,000.
(2) Does not include housing costs, temporary living expenses, nor certain
out-of-pocket travel expenses incurred by Mr. Betker related to travel to and
relocation in Denver.
</FN>
</TABLE>
Aggregate Option Exercise in Fiscal 1996
and Fiscal Year-End Option Values
The following table summarizes option exercises during 1996 and the value
of the unexercised options held by the officer named in the summary compensation
table as of December 31, 1996:
<TABLE>
<CAPTION>
Shares
Acquired Value of Unexercised
on Value Number of Unexercised In-the-Money
Name Exercise Realized Options at 12/31/96 Options at 12/31/96(1)
(#) ($) Exercisable Unexercisable Exercisable Unexercisable
--- --- ----------- ------------- ----------- -------------
(#) ($)
<S> <C> <C> <C> <C> <C> <C>
Mark A. Betker -0- -0- 50,000 200,000 112,500 450,000
__________________________
<FN>
(1) Value of Unexercised In-the-Money Options is equal to the difference
between the closing bid price per share of the Company s Common Stock as
reported by Nasdaq on December 31, 1996, the last day of trading in 1996 ($13.50
per share) and the option exercise price, multiplied by the number of shares
subject to such options.
</FN>
</TABLE>
<PAGE>
Compensation of Directors
The Company does not pay employees or affiliates additional compensation
for services as a director. The Company pays each non-employee, unaffiliated
director an annual retainer of $5,000 and a fee of $1,000 per meeting attended.
The Board of Directors has also authorized payment of reasonable travel and
out-of-pocket expenses incurred by directors in attending board meetings.
The Company's directors who are not employees of the Company are eligible
to be granted non-qualified stock options. The Company's directors who are also
employees of the Company are eligible to be granted incentive stock options. No
options were granted to any directors of the Company during the fiscal year
ended December 31, 1996.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of April 15, 1997, the number of shares
of Common Stock beneficially owned: by each person known by the Company to be
the beneficial owner of more than 5% of the outstanding share of Common Stock,
by each director of the Company, by each executive officer, and by all executive
officers and directors of the Company as a group. Where the persons listed have
the right to acquire additional shares of Common Stock through the exercise of
options or warrants within sixty days of April 15, 1997, such additional shares
are deemed to be outstanding for the purpose of computing the percentage of
outstanding shares owned by such person, but are not deemed to be outstanding
for the purpose of computing the percentage ownership interest of any other
person. Unless otherwise indicated, each of the following persons has sole
voting and investment power with respect to the shares of Common Stock set forth
opposite their respective names.
<TABLE>
<CAPTION>
Name and Address Number of Shares Beneficially Owned
of Beneficial Owner Shares Percent
- ------------------- ------ -------
<S> <C> <C>
Rockmont Capital Limited ............... 1,106,500(1) 44.6
Liability Company
700 Broadway, Suite 800
Denver, Colorado 80203
John T. Pfannenstein ................... 1,106,500(1) 44.6
700 Broadway, Suite 800
Denver, Colorado 80203
Thomas W. Gamel ........................ 783,300(1) 31.6
700 Broadway, Suite 800
Denver, Colorado 80203
Mark A. Betker ......................... 55,000(2) 2.2
11600 E. 53rd Ave., Unit D
Denver, Colorado 80239
Michael C. Franson ..................... 1,400(3) *
1401 17th Street, Suite 750
Denver, Colorado 80202
Ellen S. Robinson ...................... 1,000(4) *
1635 Clay Street
Denver, CO 80204
All directors and executive ............ 1,163,900 45.6
officers as a group (6 persons)
______________________
*Less than one percent.
<FN>
<PAGE>
(1) Rockmont is the owner of 1,106,500 shares of the Company's Common
Stock. John T. Pfannenstein, who was the Chairman of the Board and Treasurer of
the Company and is a Director of the Company, owns a 20.2 percent membership
interest in and is the Manager of Rockmont and, accordingly, is deemed
beneficial owner of all of the shares owned by Rockmont. Each of the following
persons is an owner of a portion of the membership interests of Rockmont as
indicated and is thereby deemed the beneficial owner of a portion of the shares
held by Rockmont as follows:
Person's
Membership Number of Shares Percent of
Name Interest Beneficially Owned Outstanding Shares
---- -------- ------------------ ------------------
David B. Gamel 20.2% 223,800 9.33%
Leslie D. Gamel 20.2% 223,800 9.33%
Lara M. Gamel 20.2% 223,800 9.33%
Lisa Gamel Scott 10.1% 111,900 4.66%
Robert D. Scott 9% 99,400 4.14%
David, Leslie and Lara Gamel, and Lisa Gamel Scott (who is the wife of
Robert D. Scott), who are all brother and sisters, have agreed that their
father, Thomas W. Gamel, a Director of the Company, has the exclusive right
to vote their membership interests in Rockmont until October 12, 1998 and
each has agreed not to dispose of any membership interest in Rockmont
without the consent of the Manager of Rockmont, currently John T.
Pfannenstein, until October 12, 1998. Accordingly, Mr. Pfannenstein is
deemed to be the beneficial owner of all shares of Common Stock owned by
Rockmont, and Mr. Gamel is deemed to be the beneficial owner of 783,300
shares of Common Stock owned by Rockmont. In addition to the shares of the
Company owned, of record, by Rockmont, Mr. Scott also owns 6,500 shares of
the Company directly.
(2) Includes options to acquire an aggregate of 50,000 shares of
common stock at exercise prices ranging from $9.25 to $13.25 per share.
(3) Includes an option to acquire 1,000 shares of common stock at an
exercise price of $13.00 per share.
(4) Consists of an option to acquire 1,000 shares of common stock at
an exercise price of $13.00 per share.
</FN>
</TABLE>
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as the Company s
independent auditors for the fiscal year ending December 31, 1997 and to perform
other accounting services. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting of Shareholders, with the opportunity to make a
statement if they so desire and to respond to appropriate shareholder questions.
The firm of Blanski Peter Kronlage & Zoch, P.C. acted as the Company's
independent auditors for the fiscal year ended December 31, 1996. In April 1997,
the Company's Board of Directors retained Ernst & Young LLP as the Company's
independent public accountants and replaced the Company's former auditors,
<PAGE>
Blanski Peter Kronlage & Zoch, P.C. There were no disagreements with the former
auditors on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure with respect to the
Company's financial statements for the fiscal year ended December 31, 1996 or up
through the time of replacement which, if not resolved to the former auditors'
satisfaction, would have caused them to make reference to the subject matter of
the disagreement in connection with their report. Prior to retaining Ernst &
Young LLP, the Company had not consulted with Ernst & Young LLP regarding
accounting principles.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present in person or by proxy at the annual meeting and entitled
to vote is required to ratify the appointment of Ernst & Young LLP as the
Company s independent auditors. Abstentions are treated as present and entitled
to vote and broker non- votes are treated as not present and not entitled to
vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFYING THE APPOINTMENT OF
ERNST & YOUNG LLP AS THE COMPANY S INDEPENDENT AUDITORS.
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals by Shareholders of the Company to be presented at the next Annual
Meeting of Shareholders must be received by the Company on or before December
20, 1997 to be included in the Company's Proxy Statement and proxy for that
meeting. The proponent must be a record or beneficial owner entitled to vote on
his or her proposal at the next Annual Meeting and must continue to own such
security entitling him or her to vote through that date on which the Meeting is
held. The proponent must own 1% or more of the outstanding shares, or $1,000.00
in market value, of the Company's Common Stock and must have owned such shares
for one year in order to present a shareholder proposal to the Company.
ANNUAL REPORT
The Annual Report concerning the operations of the Company during the
fiscal year ended December 31, 1996, including certified financial statements
for the year then ended, is being mailed to each Shareholder of the Company with
this Notice of Annual Meeting. Additional copies of the Annual Report may be
obtained upon written request to the Company, at 11600 E. 53rd Avenue, Unit D,
Denver, Colorado 80239.
OTHER PROPOSALS
The Board of Directors of the Company does not intend to present any
business at the meeting other than the matters specifically set forth in this
Proxy Statement and knows of no other business to come before the meeting.
COSTS AND METHOD OF SOLICITATION
Solicitation of proxies will be made by preparing and mailing the Notice of
Annual Meeting, Proxy and Proxy Statement to shareholders of record as of the
close of business on April 23, 1997. The cost of making the solicitation
includes the cost of preparing and mailing the Notice of Annual Meeting, Proxy
and Proxy Statement, and the payment of charges incurred by brokerage houses and
other custodians, nominees and fiduciaries for forwarding documents to
shareholders. The Company will bear all expenses incurred in connection with the
solicitation of proxies for the annual meeting.
It is important that your shares are represented and voted at the meeting,
whether or not you plan to attend. Accordingly, we respectfully request that you
sign, date and mail your Proxy in the enclosed envelope as promptly as possible.
BY ORDER OF THE BOARD OF DIRECTORS
Robert D. Scott,
Secretary
May 1, 1997
<PAGE>
KOALA CORPORATION
PROXY SOLICITED BY MANAGEMENT OF THE COMPANY
The undersigned shareholder of Koala Corporation, a Colorado corporation
(the "Company"), hereby appoints Mark A. Betker or Jeffrey L. Vigil or, in place
of the foregoing,_________________________ , as nominee of the undersigned to
attend, vote and act for and in the name of the undersigned at the Annual
Meeting of the Shareholders of the Company (the "Meeting") to be held at the
Embassy Suites Hotel, 4444 Havana Street, Denver, Colorado, on Friday, May 30,
1997, at 2:00 p.m. (local time), and at every adjournment thereof, and the
undersigned hereby revokes any former proxy given to attend and vote at the
Meeting.
THE NOMINEE IS HEREBY INSTRUCTED TO VOTE AS FOLLOWS WITH RESPECT TO THE
FOLLOWING MATTERS:
1. FOR [ ] All Nominees as Directors
- Mark A. Betker, Michael C. Franson, Thomas W. Gamel, John T.
Pfannenstein, and Ellen S. Robinson.
WITHHELD [ ] From All Nominees.
FOR [ ] All Nominees Except the Following:
___________________________________________________________________________.
2. FOR [ ] AGAINST [ ] ABSTAIN [ ] To appoint Ernst & Young LLP as
independent auditors of the Company.
THIS PROXY WILL BE VOTED FOR OR AGAINST OR WITHHELD OR ABSTAINED IN RESPECT
OF THE MATTERS LISTED IN ACCORDANCE WITH THE CHOICE, IF ANY, INDICATED IN THE
SPACE PROVIDED. IF NO CHOICE IS INDICATED, THE PROXY WILL BE VOTED FOR SUCH
MATTER. IF ANY AMENDMENTS OR VARIATIONS ARE TO BE VOTED ON, OR ANY FURTHER
MATTERS COME BEFORE THE MEETING, THIS PROXY WILL BE VOTED ACCORDING TO THE BEST
JUDGMENT OF THE PERSON VOTING THE PROXY AT THE MEETING. THIS FORM SHOULD BE READ
IN CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND PROXY STATEMENT.
DATED this _________day of ___________, 1997.
___________________________________________
Signature of Shareholder
___________________________________________
(Please print name of Shareholder)
NOTES:
1. YOU HAVE THE RIGHT TO APPOINT A PERSON TO REPRESENT YOU AT THE MEETING
OTHER THAN THE PERSONS DESIGNATED IN THE FORM OF PROXY. IF YOU WISH TO EXERCISE
THIS RIGHT, INSERT THE NAME OF YOUR NOMINEE IN THE BLANK SPACE PROVIDED FOR THAT
PURPOSE IN THE FORM OF PROXY AND STRIKE OUT THE TWO PRINTED NAMES.
2. Please date and sign (exactly as the shares represented by this Proxy
are registered) and return promptly. Where the instrument is signed by a
corporation, its corporate seal must be affixed and execution must be made by an
officer or attorney thereof duly authorized. If no date is stated by the
Shareholder, the Proxy is deemed to bear the date upon which it was mailed by
management to the Shareholder.
3. To be valid, this Proxy form, duly signed and dated, must arrive at the
office of the Company's transfer agent, Norwest Bank Minnesota, N.A., P.O. Box
738, South St. Paul, Minnesota 55075-0738 not less than forty-eight (48) hours
(excluding Saturdays, Sundays and holidays) before the day of the Meeting or any
adjournment thereof.
