<PAGE>
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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
APERTUS TECHNOLOGIES INCORPORATED
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF APERTUS]
7275 FLYING CLOUD DRIVE
EDEN PRAIRIE, MINNESOTA 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 18, 1996
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Apertus
Technologies Incorporated (the "Company") will be held on Thursday, July 18,
1996, at 10:00 a.m., Minneapolis time, at the Radisson Hotel South and Plaza
Tower, 7800 Normandale Boulevard, Bloomington, Minnesota 55439, for the
following purposes:
1. To elect two directors to serve for three-year terms or until their
respective successors are elected and qualified;
2. To ratify and approve the appointment of Ernst & Young LLP as the
independent auditors for the Company for the fiscal year ending March
30, 1997; and
3. To consider and act upon any other matters that may properly come
before the meeting or any adjournment thereof.
The Board of Directors of the Company has designated the close of business
on June 3, 1996 as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting or any adjournment thereof.
Only shareholders of record of the Company's Common Stock at the close of
business on that date will be entitled to vote.
You are cordially invited to attend the meeting. However, 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
Julie Cummins Brady
Secretary
June 12, 1996
<PAGE>
[LOGO OF APERTUS]
7275 FLYING CLOUD DRIVE
EDEN PRAIRIE, MINNESOTA 55344
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
JULY 18, 1996
This Proxy Statement is furnished in connection with the solicitation of
the enclosed proxy by the Board of Directors of Apertus Technologies
Incorporated (the "Company") for use at the annual meeting of shareholders (the
"Annual Meeting") to be held on Thursday, July 18, 1996, at 10:00 a.m.,
Minneapolis time, at the Radisson Hotel South and Plaza Tower, 7800 Normandale
Boulevard, Bloomington, Minnesota 55439, and at any adjournment thereof, for the
purposes set forth in the Notice of Annual Meeting of Shareholders. This Proxy
Statement and the form of proxy enclosed are being mailed to shareholders with
the Company's Annual Report to Shareholders commencing on or about June 12,
1996.
VOTING RIGHTS AND PROCEDURES
Only shareholders of record of the Common Stock of the Company whose names
appear of record on the Company's books at the close of business on June 3, 1996
will be entitled to vote at the Annual Meeting. As of that date, a total of
14,047,455 shares of such Common Stock were outstanding, each share being
entitled to one vote. There is no cumulative voting. If a shareholder returns a
proxy withholding authority to vote the proxy with respect to a nominee for
director, then the shares of the Common Stock covered by such proxy shall be
deemed present at the Annual Meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such nominee, but shall not
be deemed to have been voted for such nominee. If a shareholder abstains from
voting as to any matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum and for
purposes of calculating the vote with respect to such matter, but shall not be
deemed to have been voted in favor of such matter. If a broker returns a "non-
vote" proxy, indicating a lack of authority to vote on such matter, then the
shares covered by such non-vote shall be deemed present at the Annual Meeting
for purposes of determining a quorum but shall not be deemed to be present and
entitled to vote at the Annual Meeting for purposes of calculating the vote with
respect to such matter.
Shares of the Company's Common Stock represented by proxies in the form
solicited will be voted in the manner directed by a shareholder. If no
direction is given, the proxy will be voted for the election of the nominees for
director named in this Proxy Statement and for approval of the appointment of
Ernst & Young LLP as the Company's independent auditors. So far as the
management of the Company is aware, no matters other than those described in
this Proxy Statement will be acted upon at the Annual Meeting. In the event
that any other matters properly come before the Annual Meeting and call for a
vote of shareholders, the persons named as proxies in the enclosed form of proxy
will vote in accordance with their best judgment on these matters. A proxy may
be revoked at any time before being exercised by delivery to an officer of the
Company of a written notice of termination of the proxy's authority or a duly
elected proxy bearing a later date.
<PAGE>
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
its Board of Directors, which is comprised of six members. The Board of
Directors is divided into three classes, and the members of each class are
elected to serve a three-year term, with the terms of office of each class
ending in successive years.
The term of the Class One directors expires at the Annual Meeting, and two
Class One directors will be elected at the Annual Meeting to hold office until
the 1999 Annual Meeting or until their respective successors are elected and
qualified. George E. Hubman and Arch J. McGill are the incumbent Class One
directors, and Messrs. Hubman and McGill are being nominated for election at the
Annual Meeting. The persons named as proxies in the enclosed form of proxy will
vote the proxies received by them for the election of Messrs. Hubman and McGill,
unless otherwise directed. Each of Messrs. Hubman and McGill has indicated a
willingness to serve, but in case either of them is not a candidate at the
Annual Meeting, the persons named as proxies in the enclosed form of proxy may
vote for a substitute nominee in their discretion. Information concerning the
incumbent directors is set forth below. The terms of the incumbent Class Two
and Class Three directors expire at the 1997 and 1998 Annual Meetings,
respectively. The affirmative vote of a majority of the shares of Common Stock
present and entitled to vote at the Annual Meeting is necessary to elect the
nominees for director. The Board of Directors recommends a vote FOR the
election of Messrs. Hubman and McGill.
George E. Hubman
(Class One).............. Mr. Hubman, 53 years of age, has been a director of
the Company since July 1995. Since 1994, he has been a
business consultant and private investor. Mr. Hubman
retired as Vice President of Sales and Marketing of
Walker Richer and Quinn, Inc. ("WRQ"), a provider of
desk top connectivity software, in 1994. Mr. Hubman
was a co-founder of WRQ and held such position since
the Company's formation in 1981. Prior to WRQ, Mr.
Hubman's career included sales positions with IBM and
Hewlett-Packard. Mr. Hubman is also a director of
Syntax, Inc. and Tully's Coffee.
Arch J. McGill
(Class One).............. Mr. McGill, 65 years of age, has been a director of
the Company since July 1989. He is President of
Chardonnay Inc., a venture capital investment company
with which he has been associated since 1985. From
1983 to 1985, Mr. McGill served as Chief Executive
Officer of Rothschild Ventures. Mr. McGill has
extensive business experience in the
telecommunications industry, and from 1973 to 1983, he
was employed by AT&T Corp., most recently as President
of AIS/American Bell. Mr. McGill is also a director of
ACT Networks, Inc. and Disc, Inc.
Nicholas J. Covatta, Jr.
(Class Two).............. Mr. Covatta, 49 years of age, has been a director of
the Company since February 1982. He has been Chairman
of the Board of Atlantis Group, Inc., a private
investment company, since August 1986. Mr. Covatta's
prior business experience includes executive positions
at the General Electric Company, Gulf Oil Corporation
and the Boston Consulting Group.
Robert D. Gordon
(Class Two).............. Mr. Gordon, 47 years of age, has been a director of
the Company since July 1987. He has been Chairman of
the Board and Chief Executive Officer of the Company
since April 1990 and President since December 1988. He
was first employed by the Company as Senior Vice
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President in July 1987, and subsequently served as
Chief Financial Officer from August 1987 to May 1988,
Secretary from January 1988 to September 1988, and
Group Vice President, Marketing from April 1988 to
December 1988. From April 1984 to July 1987, Mr.
Gordon was Executive Vice President of First Bank
System, Inc.
Robert W. Fischer
(Class Three)............ Mr. Fischer, 77 years of age, has been a director of
the Company since October 1983. He is President of
Robert W. Fischer & Co., Inc., a private financial
consulting and investment banking firm, and he is a
private investor. Mr. Fischer is also a director of
Ringer Corporation.
Clarence W. Spangle
(Class Three)............ Mr. Spangle, 71 years of age, has been a director of
the Company since May 1985. He is self-employed as a
management consultant. From February 1980 to January
1985, he was Chairman of the Board and President of
Memorex Corporation. Following the acquisition of
Memorex Corporation by Burroughs Corporation, he was
also Executive Vice President of Burroughs Corporation
from January 1982 until January 1985. Mr. Spangle is
also a director of Key Tronic Corporation.
The Board of Directors has an Audit Committee consisting of Messrs.
Covatta, Spangle and Fischer, and a Compensation Committee consisting of Messrs.
McGill, Covatta, Hubman, Spangle and Fischer. The Audit Committee's function is
to review and make recommendations to the Board of Directors with respect to
certain financial and accounting matters. The Audit Committee met one time
during the 1996 fiscal year. The Compensation Committee's function is to review
and make certain determinations with respect to matters concerning the
remuneration of employees, officers and directors. The Compensation Committee
met one time during the 1996 fiscal year. The Board of Directors does not have
a standing nominating committee.
During the 1996 fiscal year, the Board of Directors held five meetings.
Each incumbent director attended at least 75% of the total number of meetings of
the Board of Directors and committees on which he served. Each non-employee
director receives a $12,000 annual retainer and a $750 fee for each Board of
Directors' and committee meeting he attends. In addition, under the terms of
the Company's 1990 Long Term Incentive Plan (the "1990 Plan"), each incumbent
non-employee director automatically receives an option to purchase 5,000 shares
of Common Stock at each annual meeting of shareholders, and each new non-
employee director will receive an option to purchase 20,000 shares on the date
of such director's initial election to the Board of Directors.
As consideration for certain consulting services provided to the Company,
the Company provides health insurance for Mr. McGill at an annual cost to the
Company of approximately $3,500.
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<PAGE>
EXECUTIVE COMPENSATION
REPORT OF COMPENSATION COMMITTEE ON ANNUAL COMPENSATION
OVERVIEW
The Compensation Committee of the Board of Directors is composed entirely
of outside directors and is responsible for developing and approving the
Company's executive compensation policies. In addition, the Compensation
Committee determines on an annual basis the compensation to be paid to the Chief
Executive Officer and to each of the other executive officers of the Company.
The Compensation Committee has available to it an outside compensation
consultant and access to independent compensation data for other companies. The
overall objectives of the Company's executive compensation program are to
provide compensation that will attract and retain superior talent and reward
performance.
The Company's executive compensation program provides an overall level of
compensation opportunity that is competitive with a broad group of computer
manufacturing industry companies and a smaller group of software and high tech
companies comparable in size to the Company. The broad industry peer group to
which the Compensation Committee compares the Company's executive compensation
levels is currently a group of computer manufacturing companies for which survey
data is obtained from the Company's outside compensation consultant. The other
comparative group of companies used by the Compensation Committee in determining
executive compensation levels currently consists of software and high tech
companies selected by the outside compensation consultant that have annual
revenues approximately equal to those of the Company. Because the Compensation
Committee does not believe that all of the companies included in the peer group
index used in the shareholder return graph included in this Proxy Statement
under the caption "Comparative Stock Performance" are comparable to the Company
or compete for the same pool of executive talent, the two groups of companies
used by the Compensation Committee in setting the Company's executive
compensation levels are both different than the group of companies in such peer
group index.
Actual compensation levels may be greater than competitive levels in
surveyed companies based upon annual and long-term Company performance, as well
as individual performance. The Compensation Committee uses its discretion to
set executive compensation at levels warranted in its judgment by the Company's
or an individual executive officer's circumstances.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The components of the Company's compensation program for its executive
officers include (a) base salary, (b) performance-based cash bonuses, (c) long-
term incentive compensation in the form of stock options and restricted stock
awards, (d) participation in a stock acquisition loan assistance program and (e)
participation in a deferred compensation program.
Base Salary
The Chief Executive Officer makes annual recommendations regarding the base
salaries of the executive officers (other than the Chief Executive Officer) to
the Compensation Committee. For the 1996 fiscal year, base salaries for the
executive officers were intended to be at approximately the 50th percentile of
fixed compensation levels for comparable management personnel employed by the
two groups of peer companies referred to above. In making base salary
recommendations, the Chief Executive Officer also takes into account individual
experience and performance, and specific issues particular to the Company. The
Compensation Committee generally approves the Chief Executive Officer's
recommendations with respect to base salaries for other executive officers.
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<PAGE>
Performance Based Bonuses
Under the Company's bonus plan for executive officers and other key
management employees, bonuses are awarded only if the Company achieves or
exceeds certain corporate performance objectives relating to total revenues and
net income as determined by the Board during the first quarter of each year.
Additionally, the executive officers who have product specific responsibilities
have bonus plans related to key management objectives related to individual
product revenue and operating income goals. The size of the fund available for
such bonuses increases in relation to the extent to which such objectives are
exceeded. The Committee allocates the fund among the executive officers and
other key management personnel based on a percentage of the executive's salary
ranging from approximately 20% to 65% as established at the beginning of the
year. If the base performance criteria are met, each officer is entitled to a
base bonus amount equal to that percentage of the officer's base salary. In the
event the base performance criteria are exceeded, bonuses may be increased up to
two times the base bonus amount depending on the extent to which such base
performance criteria are exceeded. For the 1996 fiscal year, bonus payments
available to executive officers under the bonus plan, in addition to base
salary, were targeted to be in the top quartile of the salary and bonus levels,
assuming superior performance, for comparable management personnel employed by
the two comparative groups of companies referred to above.
During the 1996 fiscal year, the Company did not meet the total revenue and
net income goals set forth in the bonus plan, and as a result, no executive
officer received a bonus under the plan except that bonuses ranging from $15,000
to $32,000 were paid to two executive officers as a result of their achievement
of key management objectives within their business units.
Stock Option and Restricted Stock Program
Stock options and restricted stock awards are granted to key management
employees under the 1990 Plan, which was approved by the Company's shareholders
in 1990. The objectives of the 1990 Plan are to align executive and shareholder
long-term interests by creating a strong and direct link between executive pay
and shareholder return, and to enable executives to develop and maintain a
significant long-term ownership position in the Company's Common Stock.
The 1990 Plan authorizes the Board or a committee of outside directors to
grant stock options, restricted stock and other types of awards to key
executives and key employees. To date, the only type of awards granted to
executive officers under the 1990 Plan have been stock options and restricted
stock. All stock options outstanding were granted at an option price equal to
the fair market value of the Company's Common Stock on the date of grant, have
ten year terms and generally become exercisable in installments over a four or
five year period.
Stock options are granted upon commencement of employment based on the
recommendation of the Chief Executive Officer. In determining whether to
recommend additional option grants to an executive officer, the Chief Executive
Officer typically considers the individual's performance and any planned change
in functional responsibility. Neither the profitability of the Company nor the
market value of its stock are considered in setting the amount of executive
officer stock option grants. The stock option position of executive officers is
reviewed on an annual basis. The Company's policy is to not grant stock options
annually, but to review each individual's stock option position, at which point
the Compensation Committee may or may not grant additional options in its
discretion. The determination of whether or not additional options will be
granted is based on a number of factors, including Company performance,
individual performance and levels of options granted at the competitive median
for the two comparative groups of companies referred to above. Options to
purchase an aggregate of 65,500
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<PAGE>
shares of Common Stock were granted to four executive officers other than the
Chief Executive Officer in fisal 1996.
Historically, the Company has not made restricted stock awards to executive
officers but rather has made such awards to other key management personnel.
However, one of the executive officers named in the table set forth below under
the caption "Summary Compensation Table" received a restricted stock award
during the 1995 fiscal year one such officer received a restricted stock award
during the 1994 fiscal year and two such officers received restricted stock
awards prior to the time they became executive officers.
Stock Acquisition Loan Assistance Program
In order to encourage stock ownership, the Board of Directors of the
Company adopted a stock acquisition loan assistance program (the "Loan
Program"). Under the terms of the Loan Program, the Company may make loans to
key employees in order to provide them with funds to purchase the Company's
Common Stock. In addition, participants are required to buy, with their own
funds, equivalent amounts of Common Stock. Each loan bears interest at the rate
of 5.0% per annum and is required to be repaid on a date two years after the
loan is made. However, if the participant continues to be employed with the
Company on such date, the entire amount of the loan is forgiven. During the
1996 fiscal year, the Company made loans under the Loan Program to four
executive officers other than the Chief Executive Officer in the aggregate
amount of $20,000 and forgave a loan to one executive officer in the amount of
$10,000.
Deferred Compensation Program
In May 1996, the Board of Directors adopted a deferred compensation program
(the "Deferred Compensation Program") pursuant to which executive officers of
the Company may elect to defer payment of a portion of their salary. Subject to
the Board of Directors' discretion, the Company may also make matching
contributions to the executive officer's deferred compensation accounts.
Although no Common Stock of the Company is acquired pursuant to the Deferred
Compensation Program, amounts deferred and Company matching contributions are
deemed to be invested in the Company's Common Stock. The right to receive the
amounts in the deferred compensation accounts vests on a date specified by the
Board of Directors, and amounts are distributed after the vesting date if the
executive officer is employed by the Company as of such date. The amount
distributed is determined based on the values of the Company's Common Stock on
the distribution date.
The terms of the Deferred Compensation Program as originally adopted by the
Board of Directors provided that the price of the Common Stock in which amounts
contributed to the deferred compensation accounts were deemed to be invested was
equal to the market price of the Common Stock as of the date of inception of the
Deferred Compensation Program, which was equal to $10.00 as of such date. In
May 1996, the Board of Directors amended the Deferred Compensation Program to
provide that the price of the Common Stock in which amounts contributed to the
deferred compensation accounts were deemed to be invested would be equal to the
lowest average quarterly price for the four quarters following the date of
inception of the Deferred Compensation Program, which for the first year of the
Deferred Compensation Program (June 1, 1995 to May 31, 1996) was equal to $4.08.
Under the terms of the Deferred Compensation Program, if an executive
officer's employment is voluntarily terminated by the officer or is terminated
by the Company for cause prior to the vesting date, the amount of compensation
deferred by such officer is distributed in cash without regard to the value of
the stock on such date, and the Company matching contribution is forfeited. If
the executive officer's employment is terminated by the Company without cause,
the greater of the amount of compensation deferred by such officer or the value
of the deferred compensation account attributable to
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<PAGE>
amounts deferred by such officer is distributed in cash, and a pro rata portion
of the value of the Company matching contributions are distributed in cash based
upon the number of days from the date of the initial election to participate in
the Deferred Compensation Program to the date employment is terminated and the
number of days to the vesting date. Upon a change in control of the Company, all
amounts become fully vested.
In fiscal 1996, executive officers of the Company deferred amounts ranging
from 4% to 11% of their base salaries pursuant to the Deferred Compensation
Program. The Board of Directors determined that the Company should make
matching contributions equal to two times the amount deferred by each such
executive officer during fiscal 1996, and that such matching contributions
should vest on May 31, 1999. In addition, the Board of Directors approved one
time supplemental contributions under the Deferred Compensation Program to three
executive officers other than the Chief Executive Officer ranging from $35,000
to $50,000. Such contributions vest on May 31, 1999.
Savings and Investment Plan; Benefits
The Company makes a matching contribution under the Company's Savings and
Investment Plan, a Section 401(k) retirement plan. The Company also has an
Employee Stock Purchase Plan pursuant to which the Company's Common Stock can be
purchased through periodic payroll deductions at a discount from the market
price. In addition, the Company provides medical and other miscellaneous
benefits to executive officers that are generally available to Company
employees. The amount of perquisites did not exceed 10% of total annual salary
and bonus for any executive officer during the 1996 fiscal year.
Stock Option Repricing
In March 1996, the Compensation Committee authorized the reduction of the
exercise price under an option granted to an executive officer in July 1995
which contained an exercise price higher than the current market price of the
Company's Common Stock at the time of the repricing. The option granted to the
executive officer was designed to provide incentive to the officer to work to
achieve long-term success for the Company. The decline in the market price of
the Company's Common Stock since the date the option was granted frustrated the
purpose of the option and the Compensation Committee deemed it to be in the best
interests of the Company to amend the option to reduce the exercise price to the
market price at the time of the amendment.
CHIEF EXECUTIVE OFFICER COMPENSATION
Base Salary
The base salary of the Chief Executive Officer is established by and is
subject to adjustment by the Compensation Committee. For the 1996 fiscal year,
the Chief Executive Officer's base salary was intended to be at approximately
the 50th percentile of the base salaries for chief executive officers of the two
comparative groups of companies referred to above. Other factors taken into
consideration in the determination of the Chief Executive Officer's base salary
include historical compensation practices at the Company and the general
experience of the Compensation Committee members in dealing with compensation
matters at other high-growth technology companies. In evaluating the
performance and setting the base salary of the Chief Executive Officer, the
Compensation Committee has taken into account the Company's financial
performance and Mr. Gordon's individual performance. Mr. Gordon's base salary
is $245,000. Mr. Gordon did not receive an increase in his base salary in
fiscal 1996 as a result of the Company's performance.
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Bonuses, Stock Option Awards and Loan Program
Mr. Gordon did not receive a bonus for the 1996 fiscal year under the bonus
plan because the Company did not meet the total revenue and net income goals set
forth in the bonus plan. During the 1996 fiscal year, he was granted options to
purchase 19,000 shares of Common Stock to provide him with additional incentive
to increase shareholder value through long-term growth of the Company. Mr.
Gordon has not been granted any restricted stock under the 1990 Plan to date.
He received a loan of $10,000 under the Loan Program during the 1996 fiscal
year.
During fiscal 1996, the Company's matching contribution to Mr. Gordon's
account established pursuant to the Deferred Compensation Program was equal to
two times the amount of salary deferred by Mr. Gordon. In addition, a one time
supplemental contribution of $75,000 was made to Mr. Gordon's deferred
compensation account. The vesting date for such contributions is May 31, 1999.
The amendment to the Deferred Compensation Program described above under the
caption "Executive Officer Compensation Program--Deferred Compensation Program"
also applied to Mr. Gordon's deferred compensation account.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), should not affect the deductibility of compensation paid to the
Company's executive officers for the foreseeable future. However, in 1994, the
1990 Plan was amended to comply with Section 162(m) in order that compensation
resulting from stock options and certain other awards under the 1990 Plan will
not be counted toward the $1,000,000 limit on deductible compensation under
Section 162(m). The Compensation Committee has not formulated any policy with
respect to qualifying other types of compensation for deductibility under
Section 162(m).
Nicholas J. Covatta, Jr.
Robert W. Fischer
George E. Hubman
Arch J. McGill
Clarence W. Spangle
Members of the Compensation Committee
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SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company, each of the other four most highly compensated executive
officers of the Company and two former executive officers of the Company.
<TABLE>
<CAPTION>
Long-Term Compensation
Awards (2)
Annual -----------------------------------------
Compensation Restricted Securities
---------------------- Stock Underlying All Other
Name and Principal Position Year Salary Bonus(1) Awards Options Compensation (3)
- --------------------------- ---- -------- --------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Gordon 1996 $256,838 $ -0- -0- 19,000 $ 2,051
Chairman of the Board, 1995 238,846 299,000 -0- -0- 22,717
President and Chief 1994 224,614 38,639 -0- 140,000 2,419
Executive Officer
Lloyd A. Hagemo (4) 1996 $101,250 $ -0- -0- 35,000 $ 141
Corporate Vice President,
MQ/Vision Group
Martin G. Hahn (5) 1996 $152,000 $ 15,000 -0- 12,000 $ -0-
Corporate Vice President, 1995 132,309 137,000 2,500 -0- 12,310
Internetworking Group 1994 124,154 12,934 -0- 35,000 -0-
Sue A. Hogue (5) 1996 $111,923 $ -0- -0- 8,500 $10,979
Corporate Vice President, 1995 103,846 80,000 -0- -0- -0-
Chief Financial Officer 1994 80,603 12,126 6,000 10,000 -0-
Lizabeth Converse Wilson (5) 1996 $127,692 $ 32,000 -0- 10,000 $ 689
Corporate Vice President, 1995 122,885 122,000 -0- 15,000 7,773
Sales 1994 103,000 15,307 10,000 -0- 1,269
Norman Friedman (6) 1996 $130,038 $ -0- -0- -0- $ 184
Former Vice President, 1995 157,000 173,485 -0- -0- 1,220
Core Technology 1994 154,000 44,465 -0- 100,000 -0-
Leslie N. Yeamans (6) 1996 $223,259 $ 5,000 -0- -0- $ 1,101
Former Vice President, 1995 166,000 61,320 -0- -0- 1,687
Messaging Products 1994 165,948 104,519 -0- 135,000 -0-
</TABLE>
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(1) The bonus amounts are comprised of bonuses paid pursuant to the Company's
1996 bonus plan for executive officers and other key management employees
as described under the caption "Report of Compensation Committee on Annual
Compensation-Executive Officer Compensation Program-Performance Based
Bonuses" above.
(2) Although the 1990 Plan permits awards of restricted stock, stock
appreciation rights, performance awards and other stock-based awards, no
such awards other than restricted stock awards have been made to date to
any of the named executive officers. Other than as set forth above, no
restricted stock awards have been made to any of the named executive
officers during the last three fiscal years.
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(3) Includes loan amounts forgiven by the Company pursuant to the Company's
Loan Program in the 1996 fiscal year of $10,000 to Ms. Hogue and in the
1995 fiscal year as follows: $20,000 for Mr. Gordon; $10,000 for Mr. Hahn;
and $6,500 for Ms. Wilson. All other compensation reflected in this column
represents Company matching contributions under the Company's Savings and
Investment Plan.
(4) Mr. Hagemo became an executive officer of the Company on January 23, 1996.
(5) As of March 31, 1996, Mr. Hahn had aggregate restricted stock award
holdings of 10,000 shares ($36,250 determined as of such date), and Ms.
Wilson and Ms. Hogue each had aggregate restricted stock award holdings of
6,000 shares ($21,750 determined as of such date). If any dividends are
paid with respect to the Company's Common Stock, such dividends will be
paid on the restricted stock.
(6) Mr. Friedman ceased to be employed by the Company on February 2, 1996, and
Mr. Yeamans ceased to be an executive officer of the Company on such date.
STOCK OPTIONS
The following tables summarize stock option grants and exercises during the
Company's fiscal year ended March 31, 1996 to or by the executive officers named
in the Summary Compensation Table above, and the value of all options held by
such persons at March 31, 1996.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1996
Individual Grants (1) Potential Realizable
------------------------------------------------------------ Value at Assumed
% of Total Annual Rates of Stock
Exercise or Price Appreciation
Number Options Granted Exercise or for Option Term
of Options to Employees Base Price Expiration ---------------------
Name Granted in Fiscal 1996 ($/Share) Date 5% 10%
- ----- ---------- --------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Gordon 19,000 7.4% $12.00 5/11/05 $143,450 $363,375
Lloyd A. Hagemo 35,000 13.6 4.563 7/20/05 142,018 296,109
Martin G. Hahn 12,000 4.7 12.00 5/11/05 90,600 229,500
Sue A. Hogue 8,500 3.3 12.00 5/11/05 64,147 162,562
Lizabeth Converse Wilson 10,000 3.9 12.00 5/11/05 75,500 191,250
Norman Friedman -0- - - - - -
Leslie N. Yeamans -0- - - - - -
- ------------
</TABLE>
(1) Exercise price equal to the fair market value of the Common Stock on the
date of grant as determined in accordance with the 1990 Plan. The stock
options to Mr. Gordon, Mr. Hahn, Ms. Hogue and Ms. Wilson were granted on
May 11, 1995 and the stock option to Mr. Hagemo was granted on July 20,
1995. All of the options were granted under the 1990 Plan, have 10-year
terms and vest and become exercisable in four equal cumulative
installments.
-10-
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND
VALUE OF OPTIONS HELD AT MARCH 31, 1996
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Options Held at Options Held at
March 31, 1996 March 31, 1996
Shares Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized (1) Unexercisable) Unexercisable) (1)
- ---- ------------------ ------------ --------------- -------------------
<S> <C> <C> <C> <C>
Robert D. Gordon -0- -0- 135,754/84,246 $ 98,125/$8,749
Lloyd A. Hagemo -0- -0- -0-/35,000 -0-/-0-
Martin G. Hahn 5,000 $ 11,800 100,500/26,500 182,188/ 2,188
Sue A. Hogue -0- -0- 35,625/33,875 26,228/19,901
Lizabeth Converse Wilson 8,900 63,413 75,000/15,000 155,001/ 4,688
Leslie N. Yeamans 35,000 251,875 54,100/45,900 6,763/ 5,738
Norman Friedman -0- -0- 50,000/50,000 6,250/ 6,250
</TABLE>
- -----------------
(1) "Value" has been determined based upon the difference between the per share
option exercise price and the market value of the Common Stock at the date
of exercise or March 31, 1996.
LONG-TERM INCENTIVE PLAN AWARDS
The following table summarizes Company contributions under the Company's
Deferred Compensation Program during the Company's fiscal year ended March 31,
1996 to the executive officers named in the Summary Compensation Table above.
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1996
<TABLE>
<CAPTION>
Number Period until
Name of Units(1) Maturation
- ---- ----------- -------------
<S> <C> <C>
Robert D. Gordon 30,637 May 31, 1999
Lloyd Hagemo 5,515 June 30, 1999
Martin G. Hahn 21,446 May 31, 1999
Sue A. Hogue 15,931 May 31, 1999
Lizabeth Converse Wilson 15,931 May 31, 1999
Leslie N. Yeamans 4,596 May 31, 1999
Norman Friedman 1,673 May 31, 1999
</TABLE>
- -----------------
(1) Number of share units represented by employee contributions and Company
matching and one time supplemental contributions under the Company's
Deferred Compensation Program at a price of $4.08 per Share. Company
matching contributions equal $33,333 for Mr. Gordon, $15,000 for Mr. Hagemo,
$25,000 for Mr. Hahn, $20,000 for Ms. Hogue, $20,000 for Ms. Wilson, $12,500
for Mr. Yeamans and $1,726 for Mr. Friedman. One time supplemental
contributions equal $75,000 for Mr. Gordon, $50,000 for Mr. Hahn, $35,000
for Ms. Wilson and $35,000 for Ms. Hogue. Company contributions subject to
forfeiture if a participant's employment is voluntarily terminated or
terminated for cause prior to the end of the maturation period. See
"Executive Compensation - Report of Compensation Committee on Annual
Compensation - Deferred Compensation Program."
-11-
<PAGE>
OPTION REPRICINGS
The following table summarizes stock options granted to the executive
officers of the Company that have been repriced during the past ten fiscal
years.
<TABLE>
<CAPTION>
TEN-YEAR OPTION REPRICINGS
Number of Market Price Exercise Length of Original
Securities of Stock Price New Option Term
Underlying at Time at time of Exercise Remaining at Date
Name Date Options Repriced of Repricing Repricing Price of Repricing
- ---- ----------- ---------------- ------------ ---------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Gordon March 1990 75,000 1.75 3.00 1.75 7 yrs, 10 mos.
March 1990 15,000 1.75 3.125 1.75 8 yrs, 4 mos.
March 1990 35,000 1.75 3.125 1.75 8 yrs, 9 mos.
March 1990 100,000 1.75 2.75 1.75 9 yrs, 2 mos.
January 1988 75,000 3.00 5.37 3.00 7 yrs, 4 mos.
Lloyd Hagemo (1) March 1996 35,000 4.563 8.875 4.563 9 yrs, 4 mos.
Martin G. Hahn March 1990 1,250 1.75 4.875 1.75 7 yrs, 5 mos.
March 1990 1,250 1.75 3.00 1.75 7 yrs, 10 mos.
March 1990 75 1.75 3.625 1.75 8 yrs, 1 mo.
Sue A. Hogue March 1990 1,000 1.75 2.125 1.75 9 yrs, 6 mos.
Lizabeth Converse Wilson March 1990 100 1.75 3.625 1.75 8 yrs, 1 mo.
March 1990 1,000 1.75 3.125 1.75 8 yrs, 6 mos.
</TABLE>
- ----------------
(1) See "Executive Compensation - Report of Compensation Committee -Executive
Officer Compensation Program - Stock Option Repricing"
SEVERANCE ARRANGEMENTS
The Company has a policy under which its current executive officers are
entitled to receive severance payments in the event that their employment is
involuntarily terminated. Pursuant to this policy, Mr. Gordon would receive
twelve months of severance pay and the other executive officers would receive
six months.
-12-
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Company's Common Stock for the last five fiscal years with the cumulative total
return on the Total Return Index for the Nasdaq Stock Market (U.S. Companies)
and the Total Return Index for Nasdaq Computer Manufacturing Stocks over the
same period (assuming the investment of $100 in each on March 31, 1991, and the
reinvestment of all dividends).
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG APERTUS, NASDAQ (U.S. COMPANIES)
AND NASDAQ COMPUTER MANUFACTURING STOCKS
NASDAQ
<CAPTION> COMPUTER
Measurement Period NASDAQ (U.S. MANUFACTURING
(Fiscal Year Covered) APERTUS COMPANIES) STOCKS
- --------------------- ---------- ------------ -------------
<S> <C> <C> <C>
Measurement Pt-
03/31/1991 $100 $100 $100
FYE 03/29/1992 $ 79 $127 $105
FYE 03/28/1993 $211 $147 $119
FYE 04/03/1994 $133 $158 $116
FYE 04/02/1995 $577 $176 $138
FYE 03/30/1996 $161 $239 $213
</TABLE>
-13-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of May 1, 1996 certain information with
respect to the Company's Common Stock beneficially owned by directors of the
Company, the executive officers of the Company named in the Summary Compensation
Table above, and all directors and executive officers as a group. Except as
otherwise indicated, the shareholders listed in the table have sole voting and
investment power with respect to the Common Stock owned by them. The Company is
not aware of any shareholder owning 5% or more of the Company's Common Stock.
<TABLE>
<CAPTION>
Shares Beneficially
Owned (1)
----------------------
Name Number Percentage
---- ------- ----------
<S> <C> <C>
Robert D. Gordon.................................. 165,846 1.0
Nicholas J. Covatta, Jr........................... 93,000 *
Robert W. Fischer................................. 115,600(2) *
Norman Friedman................................... 50,000
Lloyd A. Hagemo................................... 152 *
Martin G. Hahn.................................... 103,492 *
Sue A. Hogue...................................... 48,625 *
George E. Hubman.................................. 21,000 *
Arch J. McGill.................................... 70,000 *
Clarence W. Spangle............................... 41,000 *
Lizabeth Converse Wilson.......................... 84,632 *
Leslie N. Yeamans................................. 55,000 *
All directors and executives officers as a group
(11 persons).................................... 872,580 *
</TABLE>
- ----------------------
* Less than one percent.
(1) Includes shares subject to options exercisable within 60 days of May 1, 1996
under the 1990 Plan as follows: For Mr. Gordon, 135,754 shares; for Mr.
Covatta, 5,000 shares; for Mr. Fischer, 65,000 shares; for Mr. Friedman,
65,000 shares; for Mr. Hagemo, 0 shares; for Mr. Hahn, 100,500 shares; for
Ms. Hogue, 35,625 shares; for Mr. Hubman, 20,000 shares; for Mr. McGill,
5,000 shares; for Mr. Spangle, 25,000 shares; for Ms. Converse Wilson,
75,000 shares; for Mr. Yeamans, 54,100 shares; and for all directors and
executive officers as a group, 597,979 shares.
(2) Includes 3,000 shares owned by Robert W. Fischer & Co., Inc..
-14-
<PAGE>
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending March 30, 1997. A proposal
to ratify the appointment of Ernst & Young LLP will be presented at the Annual
Meeting. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they desire to
do so, and will be available to answer appropriate questions from shareholders.
If the appointment of Ernst & Young LLP is not ratified by the shareholders, the
Board of Directors is not obligated to appoint other auditors, but the Board of
Directors will give consideration to such unfavorable vote.
The Board of Directors recommends a vote FOR ratification of the
appointment of Ernst & Young LLP as the Company's independent auditors.
SOLICITATION OF PROXIES
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, telegraph,
facsimile transmission or in person.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal by a shareholder to be presented at the 1997 Annual Meeting
must be received at the Company's executive offices, 7275 Flying Cloud Drive,
Eden Prairie, Minnesota 55344 not later than February 14, 1997.
-15-
<PAGE>
APERTUS TECHNOLOGIES INCORPORATED
DIRECTIONS TO 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT
RADISSON HOTEL SOUTH AND
PLAZA TOWER
7800 NORMANDALE BOULEVARD
BLOOMINGTON, MINNESOTA 55439
(612) 835-7800
. Normandale Boulevard (Highway 100) runs north and south and intersects with
major highways: 494 and 62 (Crosstown).
. From Normandale Boulevard (Highway 100) exit to 77th Street (Industrial
Boulevard) and go west.
. 77th Street (Industrial Boulevard) intersects with Service Road. Turn left
on Service Road and proceed to Radisson Hotel South and Plaza Tower.
-16-
<PAGE>
APERTUS TECHNOLOGIES INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and Proxy Statement dated June 12, 1996, revoking all prior
proxies, hereby appoints Robert D. Gordon and Julie Cummins Brady, and each of
them, with power to appoint a substitute, to vote all shares the undersigned is
entitled to vote at the Annual Meeting of Shareholders of Apertus Technologies
Incorporated (the "Company") to be held on July 18, 1996, and at all
adjournments thereof, as specified below on each matter referred to, and, in
their discretion, upon any other matters which may be brought before the
meeting.
1. ELECTION OF GEORGE E. HUBMAN AND ARCH J. MCGILL AS CLASS ONE DIRECTORS FOR
THREE YEAR TERMS AS DESCRIBED IN THE PROXY STATEMENT.
[_] VOTE FOR all nominees listed above (except as marked to the
contrary below).
[_] WITHHOLD AUTHORITY to vote for all
nominees listed above.
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
---------------------------------------------------------------
2. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 30,
1997.
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
(continued and to be dated and signed on other side)
P R O X Y
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 THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN ITEM 1, FOR ITEM 2
AND IN THE DISCRETION OF THE NAMED PROXIES ON ALL OTHER MATTERS.
Please sign exactly as name appears below. When When signing as attorney,
shares are held by joint tenants, both must executor, administrator,
sign. trustee or guardian, please
give full title as such. If
a corporation, please have
signed in full corporate
name by President or other
authorized officer. If a
partnership, name by autho-
rized person.
- ------------------------------------------------
-----------------------------
Signature
-----------------------------
Signature if held jointly
Date:_________________ , 1996
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
APERTUS TECHNOLOGIES INCORPORATED
SAVINGS AND INVESTMENT PLAN
CONFIDENTIAL VOTING INSTRUCTIONS TO
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
I hereby direct that the voting rights pertaining to the stock of Apertus
Technologies Incorporated held by the Trust and allocable to my account under
the above Plan, as of April 30, 1996, shall be exercised at the Annual Meeting
of Stockholders of said Corporation to be held July 18, 1996, and at any
adjournment thereof, as specified on this instruction card and also on any
other business as may properly come before said meeting or any adjournment
thereof.
This instruction card must be returned to Norwest Bank Minnesota, National
Association, as Agent for Piper Trust Company, Trustee, by July 16, 1996, if
your instructions are to be honored. The agent will tabulate the instructions
from all Participants received by the deadline and the Trustee will vote all
shares held in the Trust for which instructions are received. The Trustee shall
not vote shares for which no instructions are received.
1. ELECTION OF GEORGE E. HUBMAN AND ARCH J. MCGILL AS CLASS ONE DIRECTORS FOR
THREE YEAR TERMS AS DESCRIBED IN THE PROXY STATEMENT.
[_] VOTE FOR all nominees listed above (except as marked to the
contrary below).
[_] WITHHOLD AUTHORITY to vote for all
nominees listed above.
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
---------------------------------------------------------------
2. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 30,
1997.
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
(continued and to be dated and signed on other side)
P R O X Y
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 NOT BE
VOTED.
Please sign exactly as name appears below. When When signing as attorney,
shares are held by joint tenants, both must executor, administrator,
sign. trustee or guardian, please
give full title as such. If
a corporation, please have
signed in full corporate
name by President or other
authorized officer. If a
partnership, name by autho-
rized person.
- ------------------------------------------------
-----------------------------
Signature
-----------------------------
Signature if held jointly
Date:_________________ , 1996
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE.
