<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
__________________________________________________________________________
2) Aggregate number of securities to which transaction 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>
[APERTUS LOGO]
7275 Flying Cloud Drive
Eden Prairie, Minnesota 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
July 23, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Apertus
Technologies Incorporated (the "Company") will be held on Wednesday, July 23,
1997, 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
29, 1998; 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 9, 1997 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 18, 1997
<PAGE>
[APERTUS LOGO]
7275 Flying Cloud Drive
Eden Prairie, Minnesota 55344
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
July 23, 1997
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 Wednesday, July 23, 1997, 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 18,
1997.
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 9, 1997
will be entitled to vote at the Annual Meeting. As of that date, a total of
14,163,623 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 Two directors expires at the Annual Meeting, and two
Class Two directors will be elected at the Annual Meeting to hold office until
the 2000 Annual Meeting or until their respective successors are elected and
qualified. Nicholas J. Covatta, Jr. and Robert D. Gordon are the incumbent
Class Two directors, and Messrs. Covatta and Gordon 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.
Covatta and Gordon, unless otherwise directed. Each of Messrs. Covatta and
Gordon 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 Three and Class One directors expire at the 1998 and 1999
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. Covatta and
Gordon.
Nicholas J. Covatta, Jr.
(Class Two)...... Mr. Covatta, 50 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, 48 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 President in July 1987, and
subsequently served as Chief Financial Officer from August
1987 to May 1988, Secretary from January to September 1988,
and Group Vice President, Marketing from April to December
1988. From April 1984 to July 1987, Mr. Gordon was Executive
Vice President of First Bank System, Inc.
George E. Hubman
(Class One)...... Mr. Hubman, 54 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, 66 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.
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<PAGE>
Robert W. Fischer
(Class Three).... Mr. Fischer, 78 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, 72 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 1997 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 1997 fiscal year. The Board of Directors does not have
a standing nominating committee.
During the 1997 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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"). Executive officers, directors, and greater than ten percent (10%)
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
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 applicable to
its executive officers and directors were complied with, except that statements
of changes in beneficial ownership on Form 4 were not timely filed for (i) Mr.
McGill, to reflect the sale of 24,730 shares of Common Stock in August 1996 and
(ii) Mr. Fischer, to reflect the sale by Robert W. Fischer, Inc. of 5,000 shares
of Common Stock in February 1997.
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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 1997 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.
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 1997 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 1997 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.
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 40,000 shares of Common Stock were granted to five
executive officers other than the Chief Executive Officer during the 1997 fiscal
year.
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 and two such officers received restricted stock
awards prior to the time they became executive officers.
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<PAGE>
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
1997 fiscal year, the Company did not make any loans under the Loan Program.
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 such
amounts were deemed to be invested in the Deferred Compensation Program.
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 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.
During the 1997 fiscal year, no executive officers of the Company deferred
any salary pursuant to the Deferred Compensation Program, and the Company did
not make any matching or supplemental contributions.
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
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<PAGE>
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 1997 fiscal year.
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 1997 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. As a result of the Company's performance, Mr. Gordon did not
receive an increase in his base salary in fiscal 1997.
Bonuses, Stock Option Awards and Loan Program
Mr. Gordon did not receive a bonus for the 1997 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. Mr. Gordon was not granted any stock options during
the 1997 fiscal year. Mr. Gordon has not been granted any restricted stock
under the 1990 Plan to date.
During the 1997 fiscal year, Mr. Gordon did not defer any salary pursuant
to the Deferred Compensation Program, and the Company did not make any matching
or supplemental contribution 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 $1,000,000 limit on deductible compensation under
Section 162(m). The Compensation Committee has not formulated any policy with
respect to qualifying other types of compensation for deductibility under
Section 162(m).
Nicholas J. Covatta, Jr.
Robert W. Fischer
George E. Hubman
Arch J. McGill
Clarence W. Spangle
Members of the Compensation Committee
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<PAGE>
Summary Compensation Table
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and each of the other four most highly compensated
executive officers of the Company (the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long-Term Compensation
Awards(3)
Annual Compensation ----------------------
------------------------------ Restricted Securities
Fiscal Other Stock Underlying All Other
Name and Principal Position Year Salary Bonus(1) Annual(2) Awards($) Options(#) Compensation(4)
- --------------------------- ------ ------ -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert D. Gordon 1997 $245,000 $ -0- $ -0- $ -0- -0- $ 2,970
Chairman of the Board, 1996 256,839 -0- -0- -0- 19,000 2,051
President and Chief 1995 238,846 299,000 -0- -0- -0- 22,717
Executive Officer
Julie Cummins Brady 1997 $105,538 $ -0- $ -0- $ -0- 5,000 $ 1,015
Corporate Vice President, 1996 103,577 -0- -0- -0- 8,000 -0-
General Counsel and 1995 103,538 60,000 -0- -0- -0- 10,000
Corporate Secretary
Steven Gimnicher (5) 1997 $130,687 $ -0- $ -0- $ -0- 7,500 $ 953
Vice President, 1996 129,462 9,801 -0- -0- -0- -0-
Internet Solutions Division 1995 131,250 56,250 -0- -0- -0- -0-
Martin G. Hahn (6) 1997 $150,000 $ -0- $ -0- $ -0- 10,000 $ 1,038
Corporate Vice President, 1996 152,500 15,000 -0- -0- 12,000 -0-
Internet Solutions Division 1995 132,309 137,000 -0- 28,438 -0- 12,310
Sue A. Hogue (6) 1997 $114,231 $ -0- $ -0- $ -0- 7,500 $ -0-
Corporate Vice President, 1996 111,923 -0- -0- -0- 8,500 10,979
Chief Financial Officer and 1995 103,846 80,000 -0- -0- -0- -0-
Chief Administrative Officer
Lizabeth Converse Wilson (6)(7) 1997 $140,264 $ -0- $61,335 $ -0- 10,000 $22,748
Corporate Vice President, 1996 127,692 32,000 -0- -0- 10,000 689
Sales 1995 122,885 122,000 -0- -0- 15,000 7,773
</TABLE>
- ------------------------
(1) The bonus amounts are comprised of bonuses paid pursuant to the Company's
1997 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) Represents commissions payable to Ms. Wilson totalling $49,335 earned in
the 1997 fiscal year and a deferred compensation payment of $12,000 upon
her termination of employment with the Company.
(3) Although the 1990 Plan permits awards of restricted stock, stock
appreciation rights 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.
(4) 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 Ms. Brady,
$10,000 for Mr. Hahn, and $6,500 for Ms. Wilson. Also includes transition
payments of $21,635 to Ms. Wilson following the termination of her
employment with the Company. All other compensation reflected in this
column represents Company matching contributions under the Company's
Savings and Investment Plan.
(5) Mr. Gimnicher ceased to be an executive officer of the Company as of March
30, 1997.
(6) As of March 30, 1997, Mr. Hahn had aggregate restricted stock award
holdings of 10,000 shares ($14,380 determined as of such date), and Ms.
Wilson and Ms. Hogue each had aggregate restricted stock award holdings of
6,000 shares ($8,628 determined as of such date). If any dividends are paid
with respect to the Company's Common Stock, such dividends will be paid on
the restricted stock.
(7) Ms. Wilson ceased to be employed by the Company on March 14, 1997.
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<PAGE>
Stock Options
The following tables summarize (i) stock option grants during the Company's
fiscal year ended March 30, 1997 to or by the Named Executive Officers and (ii)
the value of all options held by such persons at March 30, 1997. No options
held by such executive officers were exercised during the 1997 fiscal year.
Option Grants in Fiscal 1997
<TABLE>
<CAPTION>
Individual Grants(1) Potential Realizable
------------------------------------------------------------ Value at Assumed
Annual Rates of Stock
% of Total Price Appreciation
Number Options Granted Exercise or for Option Term (3)
of Options to Employees Base Price Expiration ---------------------
Name Granted in Fiscal 1997(2) ($/Share) Date 5% 10%
- ---- ---------- ----------------- ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Gordon -0- -- -- -- -- --
Julie Cummins Brady 5,000 1.0% $4.38 5/14/06 $13,750 $34,900
Steven Gimnicher 7,500 1.4% $4.38 5/14/06 $20,625 $52,350
Martin G. Hahn 10,000 1.9% $4.38 5/14/06 $27,500 $69,800
Sue A. Hogue 7,500 1.4% $4.38 5/14/06 $20,625 $52,350
Lizabeth Converse Wilson 10,000 1.9% $4.38 5/14/06 $27,500 $69,800
</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. All of the
options were granted under the 1990 Plan on May 14, 1996, have 10-year
terms and vest and become exercisable in four equal cumulative
installments.
(2) During the 1997 fiscal year, the Company granted employees options to
purchase an aggregate of 523,700 shares of Common Stock.
(3) The compounding assumes a ten-year exercise period for all option grants.
The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the SEC and do not represent the Company's
estimate or projection of the Company's future Common Stock prices. These
amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall stock market conditions. The
amounts reflected in this table may not necessarily be achieved.
-9-
<PAGE>
Aggregated Value of Options Held at March 30, 1997
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held at In-the-Money Options Held
March 30, 1997 at March 30, 1997 (1)
----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert D. Gordon 170,750 49,250 $ -0- $-0-
Julie Cummins Brady 17,000 16,000 $ -0- $-0-
Steven Gimnicher 115,000 7,500 $ -0- $-0-
Martin G. Hahn 109,250 27,750 $5,040 $-0-
Sue A. Hogue 50,625 26,375 $ -0- $-0-
Lizabeth Converse Wilson 75,000 25,000 $8,158 $-0-
</TABLE>
- -----------------
(1) "Value" has been determined based on the difference between the last sale
price of the Company's Common Stock as reported by the Nasdaq National
Market System on March 27, 1997 ($1.438) and the per share option exercise
price, multiplied by the number of shares subject to the in-the-money
options.
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.
-10-
<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 29, 1992, and the
reinvestment of all dividends).
[GRAPH OF COMPARATIVE CUMULATIVE TOTAL RETURNS]
<TABLE>
<CAPTION>
March 29, March 28, April 3, April 2, March 31, March 30,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Apertus $100 $262 $166 $710 $200 $ 79
Total Return Index for
Nasdaq Stock Market
(U.S. companies) $100 $115 $124 $138 $187 $208
Total Return Index for
Nasdaq Computer
Manufacturing Stocks (1) $100 $114 $111 $132 $204 $223
</TABLE>
_______________
(1) This index is comprised of computer manufacturing companies (including the
Company) traded on the Nasdaq Stock Market. As of March 30, 1997, this
index included approximately 160 companies.
-11-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 1, 1997, certain information with
respect to the beneficial ownership of Company's Common Stock by (i) each person
who is known by the Company to beneficially own more than 5% of the Company's
Common Stock, (ii) each director of the Company, (iii) each of the Named
Executive Officers, and (iv) all directors and executive officers of the Company
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. Unless noted below, the address of each of the following shareholders is
the same as the Company.
<TABLE>
<CAPTION>
Shares Beneficially
Owned (1)
-----------------------
Name Number Percentage
---- -------- ----------
<S> <C> <C>
Pioneer Management Corporation .................................. 980,000 6.9%
60 State Street, Boston, MA 02109
Robert D. Gordon ................................................ 211,616 (2) 1.5
Julie Cummins Brady ............................................. 38,331 (3) *
Nicholas J. Covatta, Jr. ........................................ 98,000 (4) *
Robert W. Fischer ............................................... 100,600 (5) *
Steven Gimnicher ................................................ 118,375 (6) *
Martin G. Hahn .................................................. 117,786 (7) *
Sue A. Hogue .................................................... 67,964 *
George E. Hubman ................................................ 26,000 *
Arch J. McGill .................................................. 50,270 *
Clarence W. Spangle ............................................. 36,000 *
Lizabeth Converse Wilson ........................................ 93,382 *
All directors and executives officers as a group (11 persons) ... 958,324 6.5
</TABLE>
- ---------------
* Less than one percent.
(1) Includes shares subject to options exercisable within 60 days of May 1,
1997 under the 1990 Plan as follows: For Mr. Gordon, 175,500 shares; for
Ms. Brady 20,250 shares; for Mr. Covatta, 10,000 shares; for Mr. Fischer,
60,000 shares; for Mr. Gimnicher, 116,875 shares; for Mr. Hahn, 114,750
shares; for Ms. Hogue, 54,625 shares; for Mr. Hubman, 25,000 shares; for
Mr. McGill, 10,000 shares; for Mr. Spangle, 20,000 shares; for Ms. Converse
Wilson, 83,750 shares; and for all directors and executive officers as a
group, 690,750 shares.
(2) Includes 5,141 shares held in the Company's 401(k) plan for Mr. Gordon.
(3) Includes 5,000 shares held by Ms. Brady's spouse's SEPP account.
(4) Includes 10,000 shares held by Mr. Covatta as Trustee of Eastern Shore
Nursery Incentive Plan and 10,000 shares held in an IRA for the account of
Mr. Covatta.
(5) Includes 8,000 shares owned by Robert W. Fischer, Inc., a corporation
controlled by Mr. Fischer.
(6) Includes 500 shares held by Mr. Gimnicher's children.
(7) Includes 306 shares held in the Company's 401(k) plan for Mr. Hahn.
-12-
<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 29, 1998. 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 1998 Annual Meeting
must be received at the Company's executive offices, 7275 Flying Cloud Drive,
Eden Prairie, Minnesota 55344, not later than February 12, 1998.
-13-
<PAGE>
APERTUS TECHNOLOGIES INCORPORATED
DIRECTIONS TO 1997 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.
-14-
<PAGE>
PROXY
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 18, 1997, revoking all prior
proxies, hereby appoints Robert D. Gordon and Julie Cummins Brady, and each of
them, with power to appoint a substitute, proxies to represent the undersigned
and to vote all shares of Common Stock of Apertus Technologies Incorporated
(the "Company") that the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held on Wednesday, July 23, 1997, and any
adjournment thereof, as specified below on each matter referred to and, in
their discretion, upon any other matters that may properly be brought before
the meeting. Each of the matters set forth below has been proposed by the
Company.
1. ELECTION OF NICHOLAS J. COVATTA, JR. AND ROBERT D. GORDON AS CLASS TWO
DIRECTORS FOR TERMS EXPIRING IN 2000
[_] FOR all nominees listed below
(except as marked to the contrary below).
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
(Instruction: To withhold authority for any individual nominee, strike a
line through the nominee's name listed below.)
Nicholas J. Covatta, Jr. Robert D. Gordon
2. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 29,
1998.
[_] 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)
- -------------------------------------------------------------------------------
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 PROPERLY
BROUGHT BEFORE THE MEETING.
Please sign exactly as your
name appears hereon. Jointly
owned shares will be voted
as directed if one owner
signs unless another owner
instructs to the contrary,
in which case the shares
will not be voted. If sign-
ing in a representative ca-
pacity, please indicate ti-
tle and authority.
-----------------------------
Signature
-----------------------------
Signature if held jointly
Date:_________________ , 1997
PLEASE MARK, SIGN, DATE AND
MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED ADDRESSED ENVE-
LOPE.
<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, 1997 shall be exercised at the Annual Meeting
of Stockholders of said Corporation to be held July 23, 1997, 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, 1997 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 NICHOLAS J. COVATTA, JR. AND ROBERT D. GORDON AS CLASS TWO
DIRECTORS FOR TERMS EXPIRING IN 2000
[_] FOR all nominees listed below (except as marked to the contrary
below).
[_] WITHHOLD AUTHORITY to vote for all
nominees listed below.
(Instruction: To withhold authority for any individual nominee, strike a
line through the nominee's name listed below.)
Nicholas J. Covatta, Jr. Robert D. Gordon
2. RATIFICATION AND APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 29,
1998.
[_] 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 PROPERLY
BROUGHT BEFORE THE MEETING.
Please sign exactly as your
name appears hereon. Jointly
owned shares will be voted
as directed if one owner
signs unless another owner
instructs to the contrary,
in which case the shares
will not be voted. If sign-
ing in a representative ca-
pacity, please indicate ti-
tle and authority.
-----------------------------
Signature
-----------------------------
Signature if held jointly
Date:_________________ , 1997
PLEASE MARK, SIGN, DATE AND
MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED ADDRESSED ENVE-
LOPE.
