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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
DAKTRONICS, 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):
[X] No fee required
[ ] 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:
<PAGE>
DAKTRONICS, INC.
331 32nd Avenue
Brookings, South Dakota 57006
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 18, 1999
TO THE SHAREHOLDERS OF DAKTRONICS, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of
Daktronics, Inc. ("Daktronics" or the "Company") will be held on Wednesday,
August 18, 1999, at Daktronics, Inc., 331 32nd Avenue, Brookings, South Dakota
at 7:00 p.m. Central Daylight Time, for the following purposes:
1. To elect three directors as members of the class of directors to
serve until the third succeeding Annual Meeting of Shareholders, and
until their successors have been elected and qualified.
2. To ratify the appointment of McGladrey & Pullen, LLP as independent
auditors for the Company for the fiscal year ending April 30, 2000.
3. To consider and act upon any other matters that may properly come
before the meeting or any adjournment thereof.
Only the shareholders of record of Daktronics Common Stock at the close of
business on July 16, 1999, will be entitled to receive notice of and to vote at
the meeting or any adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN
TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
BY ORDER OF THE BOARD OF DIRECTORS,
Duane E. Sander,
SECRETARY
July 22, 1999
<PAGE>
DAKTRONICS, INC.
331 32nd Avenue
Brookings, South Dakota 57006
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 18, 1999
This Proxy Statement is furnished in connection with the solicitation of
the enclosed proxy by the Board of Directors of Daktronics, Inc. ("Daktronics"
or the "Company") for use at the Annual Meeting of Shareholders to be held on
Wednesday, August 18, 1999, at Daktronics, Inc., 331 32nd Avenue, Brookings,
South Dakota at 7:00 p.m. Central Daylight Time, and at any adjournment thereof,
for the purposes set forth in the Notice of Annual Meeting of Shareholders.
Shares of Common Stock represented by proxies in the form solicited will
be voted in the manner directed by a shareholder. If no direction is made, the
proxy will be voted (1) for the election of the three nominees for director
named in this Proxy Statement, and (2) for the ratification of the appointment
of McGladrey & Pullen, LLP as independent auditors for the Company for the
fiscal year ending April 30, 2000 . A shareholder may revoke his or her proxy at
any time before it is voted by delivering to the Secretary of the Company a
written notice of termination of the proxy's authority, by filing with the
Secretary of the Company another proxy bearing a later date, or by appearing and
voting at the meeting. This Proxy Statement and the form of proxy enclosed are
being mailed to shareholders commencing on or about July 23, 1999.
Votes cast by proxy or in person at the Annual Meeting will be tabulated
by the inspectors of election appointed by the Company for the meeting, and the
number of shareholders present in person or by proxy will determine whether or
not a quorum is present. The inspectors of election will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum for all matters. Shares abstaining will be treated as
unvoted. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will
not be considered as present and entitled to vote by the inspectors of election
with respect to that matter. The three persons receiving the most votes will be
elected for directors and the ratification for the appointment of the auditors
will be determined by a majority of the votes cast.
Only the holders of the Company's Common Stock whose names appear of
record on the Company's books at the close of business on July 16, 1999 will be
entitled to vote at the annual meeting. At the close of business on July 16,
1999, a total of 4,369,941 shares of Common Stock were outstanding. The holders
of one-third of the shares of Common Stock issued and outstanding and entitled
to vote at the 1999 Annual Meeting, present in person or represented by proxy,
will constitute a quorum for the transaction of business. If a quorum should not
be present, the 1999 Annual Meeting may be adjourned from time to time until a
quorum is present. Holders of Common Stock are entitled to one vote per share on
all matters submitted to a vote of shareholders, except that with respect to the
election for directors every shareholder shall have the right to vote, in person
or by proxy, the number of shares owned by the holder for as many persons as
there are directors to be elected, or to cumulate the holder's votes by giving
one candidate the number of votes which is equal to the number of directors to
be elected multiplied by the number of the holder's shares, or by distributing
such cumulated votes among any number of candidates.
1
<PAGE>
Participants in the Company's Employee Stock Ownership Plan (ESOP) are
entitled to instruct the trustee of the ESOP how to vote all shares of Common
Stock allocated to participants' accounts under the ESOP. Each participant will
receive a voting instruction card to direct the trustee to vote that
participant's allocated shares. If a participant does not timely return a
completed voting instruction card, the trustee will vote the shares allocated to
that participant in the same proportion as the shares which are voted by all
participants under the ESOP. The trustee of the ESOP will vote any unallocated
shares of Common Stock held by the ESOP in the same proportion as the shares
allocated to the participants' accounts.
Participants in the Company's 401k plan who have Daktronics shares as one
of their 401k selections are entitled to instruct the trustee of the 401k plan
how to vote their shares of Common Stock. Each participant will receive a voting
instruction card to direct the trustee to vote that participant's shares. If a
participant does not timely return a completed voting instruction card, the
trustee will vote the shares allocated to that participant in the same
proportion as the shares which are voted by all participants under the 401k
plan.
Expenses in connection with the solicitation of proxies will be paid by
the Company. Proxies are being solicited primarily by mail, but, in addition,
officers and regular employees of the Company who will receive no extra
compensation for their services may solicit proxies by telephone, telecopier or
personal calls. The Company may reimburse brokerage firms and others for their
expenses in forwarding solicitation materials to the beneficial owners of Common
Stock.
A copy of the Company's Annual Report for the fiscal year ended May 1,
1999 is being furnished to each shareholder with this Proxy Statement.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Pursuant to the Company's Articles of Incorporation, the Board of
directors is divided into three classes serving staggered three-year terms
expiring at each successive annual meeting of shareholders. The terms of Aelred
J. Kurtenbach and Charles S. Roberts expire at the 1999 Annual Meeting; Edwin M.
Theisen whose term was scheduled to expire at the 1999 Annual Meeting passed
away in June of 1999; Frank J. Kurtenbach, James A. Vellenga and Roland J.
Jensen expire at the 2000 Annual Meeting; and James B. Morgan, John L. Mulligan
and Duane E. Sander expire at the 2001 Annual Meeting.
The persons named in the accompanying proxy will vote for the election of
the three nominees described herein, unless authority to vote is withheld. The
Board of Directors has been informed that each of the three nominees is willing
to serve as a director; however, if any nominee should decline or become unable
to serve as a director for any reason, the proxy may be voted for such other
person as the proxies shall, in their discretion, determine.
The following table sets forth certain information as of July 16, 1999
concerning the three nominees for election as directors of the Company and the
continuing directors:
Name and Age Position with Company
- ------------ ---------------------
NOMINEES FOR TERMS EXPIRING AT THE 1999 ANNUAL MEETING
Aelred J. Kurtenbach (65) President and Director
Charles S. Roberts (74) Director
Nancy D. Frame (54) Director (Nominee)
2
<PAGE>
DIRECTORS FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING
Frank J. Kurtenbach (61) Vice President, Sales and Director
Roland J. Jensen (68) Director
James A. Vellenga (64) Director
DIRECTORS FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING
James B. Morgan (52) Executive Vice President and Director
Duane E. Sander (61) Secretary and Director
John L. Mulligan (60) Director
AELRED J. KURTENBACH, PH.D. is a co-founder of the Company and has served
as a director and as President of the Company since its incorporation. Dr.
Kurtenbach also served as Treasurer until 1993. Dr. Kurtenbach has over 40 years
of experience in the fields of communication engineering and control system
design, technical services, computer systems, electrical engineering education
and business management. Dr. Kurtenbach has B.S., M.S. and Ph.D. degrees in
Electrical Engineering from South Dakota School of Mines and Technology, the
University of Nebraska and Purdue University, respectively.
CHARLES S. ROBERTS, M.D. has served as a director of the Company since
1968. Prior to his retirement in 1991, Dr. Roberts was engaged in family
practice and internal medicine at the Brookings Clinic, Brookings, South Dakota.
NANCY D. FRAME is a director nominee. She is currently the Deputy Director
of the United States Trade and Development Agency in Washington, D.C., a
position she has held since 1986. Previous to that she held various positions in
the legal profession. She obtained her law degree from Georgetown University,
Washington, D.C.
FRANK J. KURTENBACH joined the Company in 1979 as Sales Manager of the
Standard Scoreboard Division, which was expanded to include other products in
1981. He has served as Sales Manager for the Company since 1982, as a director
since 1984 and as Vice President, Sales since November 1993. Mr. Kurtenbach has
a M.S. degree from South Dakota State University. Aelred Kurtenbach and Frank
Kurtenbach are brothers.
ROLAND J. JENSEN worked in various capacities from 1960 to 1990 with
Northern States Power Company, an electric and natural gas utility, ending his
service as Senior Vice President of Power Supply. From 1990 to his retirement in
January 1994, he was Chairman and CEO of NRG Energy, Inc., a Minneapolis-based
energy services company. Mr. Jensen has served as a director of the Company
since 1994.
JAMES A. VELLENGA was elected as a director in 1997. Mr. Vellenga is
currently VP of Technology and previously served as VP of Operations responsible
for Product Development, Manufacturing and Quality Assurance at Aetrium, Inc. in
St. Paul, MN. He was previously a founding officer of Lee Data Corp., and prior
to that he was one of the early employees at Data 100 Corp. until its
acquisition by Northern Telecom. Mr. Vellenga holds a B.S. degree in Electrical
Engineering from South Dakota State University.
JAMES B. MORGAN joined the Company in 1969 as a part-time engineer while
earning his M.S. degree in Electrical Engineering from South Dakota State
University. Since 1970, he has been employed by the Company as its Engineering
Manager and since 1975 as its Vice President, Engineering, with responsibility
for product development, contract design, project management for customer
contracts, and corporate information and scheduling systems. In 1995, Mr. Morgan
was named Executive Vice President. Mr. Morgan has served as a director since
1984.
DUANE E. SANDER, PH.D. is a co-founder of the Company and has served as a
director and as Secretary of the Company since its incorporation. Dr. Sander is
currently employed as Dean of Engineering at South Dakota State University where
he has taught electrical engineering courses and directed biomedical research
projects since 1967.
3
<PAGE>
JOHN L. MULLIGAN was elected as a director of the Company in 1993. He
currently is employed as a financial services specialist with Morgan Stanley
Dean Witter, in the same capacity as when he was employed with Mesirow Financial
from late 1990 through mid 1993. In 1993 and 1994, he served as principal of
Mulligan Financial, a financial services firm which he founded. From 1967 to
March 1990, he served as President, Chairman, Chief Executive Officer and
director of American Western Corporation.
DIRECTOR COMPENSATION
The current nonemployee directors of the Company include Messrs. Mulligan,
Sander, Roberts, Jensen, Theisen, and Vellenga. During fiscal 1999 each
non-employee director received, for their services as a director, a $2,000
retainer each year, $1,500 for each meeting attended in person, $500 for
telephone Board meetings, $500 for each committee meeting attended in person and
reimbursement of all out-of-pocket expenses incurred in attending meetings. The
nonemployee directors also receive stock options under the Company's 1993
Outside Directors Stock Option Plan. In August 1998, Messrs. Roberts and Theisen
each received 2,000 shares and Messrs. Jensen and Vellenga each received 4,000
shares, and Messrs. Mulligan and Sander each received 9,000 shares under the
1993 Outside Directors Stock Option Plan, which are subject to vesting
restrictions under the plan and have an exercise price of $10.375 per share. Dr.
Sander does not receive any additional compensation for serving as Secretary of
the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Audit Committee consisting of
John Mulligan (chair) and James A. Vellenga; and a Compensation Committee
consisting of Roland Jensen (chair), Charles S. Roberts, and John Mulligan. The
Company has no standing nominating committee. The Board as a whole performs the
functions which would otherwise be delegated to a nominating committee.
The Board of Directors held four meetings during fiscal 1999. All
incumbent directors attended at least 75% of the meetings of the Board meetings.
The Board also passed several resolutions during fiscal 1999 by written consent.
The Audit Committee held two meetings in Fiscal 1999. The Audit Committee
reviews the activities of the Company's independent accountants and the results
of audits made by these professionals.
The Compensation Committee held two meeting during fiscal 1999. The
Compensation Committee (the "Committee") is responsible for making
recommendations to the Board of Directors regarding compensation of the
Company's executive officers and stock option awards under the Company's 1993
Stock Option Plan. None of the members of the Committee are employees of the
Company and all executive officers who serve on the Board of Directors abstain
from voting on compensation affecting those executive officers who are Board
members.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Roland Jensen (chair), Charles S. Roberts and John L. Mulligan served as
the members of the Compensation Committee during Fiscal 1999. There are no
compensation committee interlocks with other companies and none of the members
of the committee has been an officer, employee or insider of the Company or its
subsidiaries.
4
<PAGE>
EXECUTIVE COMPENSATION
CASH AND OTHER COMPENSATION
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Company's Chief
Executive Officer, and each of the other executive officers, whose total annual
salary and bonus exceeded $100,000 during fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compenstaion(1) Awards
---------------------- ------
Fiscal Securities
Year All Other Underlying
Name and Principal Position Ended Salary Bonus(2) Compensation($) Options (#)
- --------------------------- ----- ------ -------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Dr. Aelred J. Kurtenbach 1999 $181,131 $52,500 $3,390(3) 25,000
President and Director 1998 159,955 41,085 2,399(3) 6,000
(Chief Executive Officer) 1997 150,035 0 2,210(3) 4,000
James B. Morgan 1999 $142,569 $37,500 $3,192(4) 8,000
Executive Vice President 1998 131,008 33,300 1,965(4) 5,000
and Director 1997 124,708 0 1,791(4) 5,000
Paul J. Weinand 1999 $112,680 $33,170 $2,748(5) 2,000
Treasurer and 1998 111,584 28,170 1,674(5) 3,000
Chief Financial Officer 1997 108,340 0 1,625(5) 4,000
Frank J. Kurtenbach 1999 $104,585 $27,800 $2,571(6) 3,000
Vice President 1998 101,204 25,575 1,518(6) 3,000
and Director 1997 98,423 0 1,476(6) 4,000
</TABLE>
- -----------------------
(1) Annual Compensation excludes personal benefits received by the named person
to the extent that the aggregate amounts thereof were less than 10% of
the total of that person's annual salary and bonus.
(2) Reflects bonus earned during the fiscal year.
(3) Includes the following respective contributions under the Company's 401(k)
retirement and Savings Plan and the Company's ESOP: fiscal 1999, $2,400
and $990, fiscal 1998, $2,399 and $0; fiscal 1997 $2,210 and $0.
(4) Includes the following respective contributions under the Company's 401(k)
retirement and Savings Plan and the Company's ESOP: fiscal 1999, $2,400
and $792, fiscal 1998, $1,965 and $0; fiscal 1997 $1,791 and $0.
(5) Includes the following respective contributions under the Company's 401(k)
retirement and Savings Plan and the Company's ESOP: fiscal 1999, $2,203
and $545, fiscal 1998, $1,674 and $0; fiscal 1997 $1,625 and $0.
(6) Includes the following respective contributions under the Company's 401(k)
retirement and Savings Plan and the Company's ESOP: fiscal 1999, $1,952
and $619, fiscal 1998, $1,518 and $0; fiscal 1997 $1,476 and $0.
5
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth information relating to stock options and
stock appreciation rights (SARs) awarded to the executive officers named in the
Summary Compensation Table under the Company's 1993 Stock Option Plan during
fiscal 1999. No SARs have been awarded by the Company.
OPTION/SAR GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
Individual Grants
---------------------------
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options/SARs Stock Price Appreciation for
Underlying Granted to Exercise or Option Term
Options/SARs Employees Base Price Expiration -----------------------------
Name Granted(#) in 1999 ($/share) Date 5% 10%
---- ---------- ------- --------- ----- -- ---
<S> <C> <C> <C> <C> <C> <C>
Dr. Aelred J. Kurtenbach 10,000(1) 11.5% 13.475 11/19/2003 37,229 82,266
15,000(2) 17.3% 10.725 02/26/2004 38,447 101,879
James B. Morgan 8,000(3) 9.2% 12.250 11/19/2008 61,632 156,187
Paul J. Weinand 2,000(4) 2.3% 12.250 11/19/2008 15,408 39,047
Frank J. Kurtenbach 3,000(5) 3.5% 12.250 11/19/2008 23,112 58,570
</TABLE>
- ------------------
(1) The options were granted under the 1993 Stock Option Plan and become first
exercisable as follows: 2,000 on November 19, 1999, 2,000 on November 19,
2000, 2,000 on November 19, 2001, 4,000 on November 19, 2002.
(2) The options were granted under the 1993 Stock Option Plan and become first
exercisable as follows: 3,000 on February 26, 2000, 3,000 on February 26,
2001, 3,000 on February 26, 2002, and 6,000 on February 26, 2003.
(3) The options were granted under the 1993 Stock Option Plan and become first
exercisable as follows: 1,600 on November 19, 1999, 1,600 on November 19,
2000, 1,600 on November 19, 2001, 1,600 on November 19, 2002, and 1,600
on November 19, 2003.
(4) The options were granted under the 1993 Stock Option Plan and become first
exercisable as follows: 400 on November 19, 1999, 400 on November 19,
2000, 400 on November 19, 2001, 400 on November 19, 2002, and 400 on
November 19, 2003.
(5) The options were granted under the 1993 Stock Option Plan and become first
exercisable as follows: 600 on November 19, 1999, 600 on November 19,
2000, 600 on November 19, 2001, 600 on November 19, 2002, and 600 on
November 19, 2003.
OPTION/SAR EXERCISE AND HOLDINGS
The following table sets forth information relating to unexercised options
held as of May 1, 1999 by the executive officers named in the Summary
Compensation Table. No stock options granted under the Daktronics, Inc. 1993
Stock Option Plan were exercised in fiscal 1999.
6
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1999
AND OPTION/SAR VALUES AT MAY 1, 1999
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Securities Underlying In-the Money
Acquired Options/SARs at 5/01/99(#) Options/SARs at 5/01/99($)
on Value --------------------------- ---------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Aelred J. Kurtenbach 0 0 16,800 36,200 54,993 45,645
James B. Morgan 0 0 26,200 19,800 83,338 53,413
Paul J. Weinand 0 0 23,400 11,600 74,738 42,700
Frank J. Kurtenbach 0 0 22,400 12,600 72,488 42,700
</TABLE>
7
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates a comparison of cumulative total returns
for the Company vs. the NASDAQ Market Index and the Media General Industry Group
Index (MG Group Index) from April 24, 1994 to May 1, 1999. The graph assumes a
$100 initial investment.
[PL0T POINTS GRAPH]
04-29-94 04-28-95 04-26-96 05-02-97 05-01-98 04-30-99
-------- -------- -------- -------- -------- --------
Daktronics, Inc. $100.00 $81.43 $44.29 $45.71 $92.86 $112.86
MG Group Index $100.00 $124.97 $151.75 $180.37 $256.74 $251.67
NASDAQ Market Index $100.00 $109.19 $152.42 $162.47 $241.31 $318.66
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
CASH COMPENSATION
DETERMINATION OF BASE SALARY The Company's compensation philosophy is to
target executive salaries close to the median market rate paid for comparable
positions within the Midwest region for similar size companies.
The Compensation Committee reviewed base salaries for executive officers
in August 1998. Company fiscal 1998 performance was also considered. Based upon
this review, the Committee approved adjusting the base salary of Aelred
Kurtenbach 28% and the base salaries of the other executive officers an average
of 7%. Salaries are reviewed annually.
DETERMINATION OF BONUS For fiscal 1999, the Committee chose a formula
based performance bonus plan for the executive officers. The bonus consists of
one months salary provided that after tax earnings exceed 12.5% of beginning
stockholders equity. The bonus increases yearly with performance improvement to
a maximum bonus of three months salary at the point that after tax earnings
exceed 16.5% of beginning stockholders equity. For Fiscal 1999, the executive
officers earned the maximum bonus under the plan.
EQUITY BASED COMPENSATION
In November 1993, the Board of Directors of the Company adopted the
Daktronics, Inc. 1993 Stock Option Plan (the "Option Plan") which was approved
by the shareholders in December 1993 and amended in August 1998. The Committee
determines awards under this plan for executive officers and approves awards for
other employees based upon the recommendation of the Company's executive
officers. In November 1998, the Committee awarded Aelred Kurtenbach an option to
purchase a total of 10,000 shares of Common Stock and allowed 65,000 shares to
be granted per Aelred Kurtenbach's discretion.
The exercise price per share of these options was established as the
average between the closing bid and asked price quotations for the Common Stock
as reported by the National Association of Securities Dealers Automatic
Quotation System (NASDAQ) on November 19, 1998, which was $12.250 Subject to
accelerated vesting upon "change in control" of the Company as defined in the
Option Plan, the outstanding options generally vest 20% each year commencing
November 19, 1999.
In addition, the Committee met in February 1999 and made a special award
of 15,000 options to Aelred Kurtenbach at a price computed as described above
which was $10.725.
The Committee's basis for these awards was the Company's performance, as
measured in increased net sales and results of operations, over the last three
years and review of awards by the comparable companies. The number of options
granted to the executive officers, including the Chief Executive Officer, was
less than the average of the comparable companies for similar positions. The
terms of these options, including duration, vesting, and exercise price were
similar to that of the comparable companies.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee determined the Chief Executive Officer's compensation in the
same manner described above for all executive officers of the Company.
BASE SALARY The Committee recommended Dr. Kurtenbach's salary be increased
28% to $210,000, commencing November 1998.
9
<PAGE>
DETERMINATION OF BONUS Based upon the bonus plan described above, Dr.
Kurtenbach earned a bonus of $52,500 for fiscal 1999.
EQUITY BASED COMPENSATION The Committee awarded to Dr. Kurtenbach options
to purchase 10,000 and 15,000 shares of Company Stock at exercise prices of
$12.250 and $10.725, respectively.
COMPENSATION COMMITTEE
Roland J. Jensen
Charles S. Roberts
John L. Mulligan
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of May 31, 1999, regarding
the beneficial ownership of Common Stock of the Company by (i) each person or
group who is known by the Company to be the beneficial owner of more than 5% of
the outstanding Common Stock, (ii) all directors and nominees of the Company,
(iii) each individual named in the Summary Compensation Table and (iv) all
directors and executive officers of the Company as a group. The Company believes
that the beneficial owners of the Common Stock listed below, based on
information furnished by such owners, have sole voting and investment power (or
share such powers with his or her spouse) with respect to the shares, subject to
the information contained in the notes to the table.
Name and Address Percent of
(if applicable) of Shares Outstanding
Beneficial Owner Beneficially Owned(1) Shares(1)
- ---------------- --------------------- ---------
Daktronics, Inc.
Employee Stock Ownership Plan(2) (ESOP)....... 267,799 5.9%
331 32nd Avenue, Brookings, SD 57006
James B. Morgan............................... 176,849(3) 3.9%
John L. Mulligan.............................. 8,000(4) *
Dr. Duane E. Sander(5)........................ 192,392(6) 4.2%
Dr. Aelred J. Kurtenbach(5)................... 415,034(7) 9.1%
Charles S. Roberts, M.D....................... 34,360(8) *
Frank J. Kurtenbach........................... 164,930(9) 3.6%
Roland J. Jensen.............................. 7,400(10) *
James A. Vellenga............................. 5,000(11) *
Paul J. Weinand............................... 27,327(12) *
All executive officers and directors
as a group (10 persons).................... 1,080,131 23.7%
- -----------------------
* Represents less than 1%
(1) For purposes of this table, a person or group of persons is deemed to
beneficially own shares issuable upon the exercise of options that are
currently exercisable or that become exercisable within sixty days after
the date hereof.
(2) The Common Stock held by the Daktronics, Inc. ESOP and allocated to the
plan participants are voted by the respective participants. Any
unallocated or nonvoted shares of Common Stock will be voted by the
trustee without discretion on the same proportionate basis as the voted
allocated shares.
(3) Includes (i) 26,200 shares issuable pursuant to currently exercisable
stock options and (ii) 4,419 shares held through the Daktronics, Inc.
ESOP.
(4) Includes 5,000 shares issuable pursuant to currently exercisable stock
options.
(5) Dr. Sander's and Dr. Kurtenbach's addresses are 331 32nd Avenue,
Brookings, South Dakota 57006.
(6) Includes (i) 5,000 shares issuable pursuant to currently exercisable stock
options, (ii) 82,330 shares owned by Dr. Sander's spouse and (iii) 16,540
shares owned by Dr. Sander's son.
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(7) Includes (i) 16,800 shares issuable to Dr. Kurtenbach pursuant to
currently exercisable stock options, (ii) 5,692 shares held through the
Daktronics, Inc. ESOP, (iii) 7,402 share held through the Daktronics, Inc.
401(K) Plan, and (iv) 211,926 shares owned by Dr. Kurtenbach's spouse.
(8) Includes 3,000 shares issuable pursuant to currently exercisable stock
options.
(9) Includes (i) 22,400 shares issuable pursuant to currently exercisable
stock options and (ii) 3,500 shares held through the Daktronics, Inc.
ESOP.
(10) Includes 6,000 shares issuable pursuant to currently exercisable stock
options.
(11) Includes 3,000 shares issuable pursuant to currently exercisable stock
options.
(12) Includes (i) 23,400 shares issuable pursuant to currently exercisable
stock options and (ii) 1,927 shares held through the Daktronics, Inc.
ESOP.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten percent
(10%) of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
(SEC), and furnish copies of those reports to the Company. Based solely on a
review of the copies of such forms furnished to the Company, and written
representations from the executive officers and directors, the Company believes
that all Section 16(a) filing requirements were complied with during fiscal
1999.
PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
McGladrey & Pullen, LLP served as the Company's independent certified
public accountants for fiscal 1999. The appointment of independent certified
public accountants is made annually by the Audit Committee of the Board of
Directors. In making its appointment, the Audit Committee reviews both the audit
scope and the estimated fees for professional services for the coming year. The
Audit Committee has selected McGladrey & Pullen, LLP as the independent
certified public accountants for fiscal 2000.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which may
come before the meeting. However, if any matters other than those referred to
above should properly come before the meeting calling for a vote of the
shareholders, it is the intention of the persons named in the enclosed proxy to
vote such proxy in accordance with their best judgment.
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SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal by a shareholder to be presented at the 2000 Annual Meeting
must be received at the Company's principal executive offices, 331 32nd Avenue,
Brookings, South Dakota 57006, addressed to the Secretary of the Company, not
later than March 26, 2000.
BY ORDER OF THE BOARD OF DIRECTORS,
Duane E. Sander
SECRETARY
Dated: July 22, 1999
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DAKTRONICS, INC.
Annual Meeting of Shareholders - August 18, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Aelred J. Kurtenbach and Duane E. Sander, or
either of them, as proxy of the undersigned, with full power of substitution,
for and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Shareholders of Daktronics, Inc., to be held at Daktronics,
Inc., 331 32nd Avenue, Brookings, South Dakota 57006 on Wednesday, August 18,
1999 at 7:00 p.m. Central Daylight Time, and at any adjournments thereof, and to
vote all same of the undersigned, as designated below, with all the powers which
the undersigned would possess if personally at such meeting.
1. Election of Directors duly nominated for a term expiring in 2002: Aelred
J. Kurtenbach, Charles S. Roberts, Nancy D. Frame.
* FOR * WITHHELD FOR ALL * WITHHELD FOR THE
FOLLOWING ONLY
(Write the nominee's name
in space below):
--------------------------------------------------------------------------
2. To ratify the appointment of McGladrey & Pullen, LLP as independent
auditors for the Company for the fiscal year ending April 29, 2000.
* FOR * AGAINST * ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
THE PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE GIVEN FOR VOTING
ON THE MATTERS ABOVE, THIS PROXY WILL BE VOTED FOR MATTERS 1 THROUGH 3 ABOVE.
Shareholders who are present at the meeting may withdraw their Proxy and vote in
Person if they so desire. The undersigned acknowledges receipt of the Proxy
Statement for the 1999 Annual Meeting.
Date ______________________, 1999 ________________________________________
Signature
________________________________________
Signature if held jointly
Please sign exactly as name(s) appears
on this Proxy. If shares are registered
in more than one name, the signature of
all persons are required. A corporation
should sign in its full corporate name
by a duly authorized officer, stating
their title. Trustees, guardians,
executors and administrators should sign
in their official capacity, giving their
full title as such. If a partnership,
please sign in partnership name by
authorized person.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY
No postage is required if returned in the enclosed envelope.
This Proxy may also be returned via fax to 605/697-4700.
