PPT VISION, INC.
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 Rule 14a-11(c) or Rule 14a-12
PPT Vision, Inc.
- ------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
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Fee computed on table below per Exchange Act
Rules 14a- 6(i)(4) and 0-11.
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computed pursuant to Exchange Act Rule 0-11:
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Check box if any part of the fee is offset as provided by
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PPT VISION, INC.
12988 Valley View Road
Eden Prairie, MN 55344
(612) 996-9500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 16, 2000
To the Shareholders of PPT Vision, Inc.:
Notice is hereby given that the Annual Meeting of
Shareholders of PPT Vision, Inc. will be held on Thursday, March
16, 2000, at 3:30 p.m., Central Time, at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, MN, for the following purposes:
1. To elect five (5) directors to serve until the next
Annual Meeting of Shareholders or until their successors are
elected and qualified;
2. To approve the PPT Vision, Inc. 2000 Stock Option Plan;
3. To approve the PPT Vision, Inc. 2000 Employee Stock
Purchase Plan; and
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Accompanying this Notice of Annual Meeting is a Proxy
Statement, Form of Proxy and the Company's Annual Report to
Shareholders for the fiscal year ended October 31, 1999.
The Board of Directors has fixed the close of business on
January 31, 2000, as the record date for the determination of
shareholders entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors
/s/ Thomas G. Lovett IV
----------------------
Thomas G. Lovett IV
Secretary
Eden Prairie, Minnesota
Dated: February 7, 2000
PLEASE REMEMBER TO SIGN AND RETURN YOUR PROXY.
PPT VISION, INC.
12988 Valley View Road
Eden Prairie, MN 55344
(612) 996-9500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 16, 2000
GENERAL MATTERS
This Proxy Statement is furnished to the shareholders of PPT
Vision, Inc. (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company to be voted
at the Annual Meeting of Shareholders to be held on March 16,
2000 or any adjournment or adjournments thereof. The cost of
this solicitation will be borne by the Company.
Any proxy may be revoked at any time before it is voted by
receipt of a proxy properly signed and dated subsequent to an
earlier proxy, or by revocation of a written proxy by request in
person at the Annual Meeting. If not so revoked, the shares
represented by such proxy will be voted. The Company's principal
offices are located at 12988 Valley View Road, Eden Prairie,
Minnesota 55344, and its telephone number is (612) 996-9500. The
mailing of this proxy statement to shareholders of the Company
commenced on or about February 9, 2000.
The total number of shares outstanding and entitled to vote
at the meeting as of January 31, 2000 consisted of 5,256,275
shares of common stock, $0.10 par value. Each share of common
stock is entitled to one vote. There is no cumulative voting for
directors. Only shareholders of record at the close of business
on January 31, 2000 will be entitled to vote at the meeting. The
presence in person or by proxy of the holders of a majority of
the shares entitled to vote at the Annual Meeting of Shareholders
constitutes a quorum for the transaction of business.
QUORUM AND VOTE REQUIRED
Under Minnesota law, each item of business properly
presented at a meeting of shareholders generally must be approved
by the affirmative vote of the holders of a majority of the
voting power of the shares present, in person or by proxy, and
entitled to vote on that item of business. If the shares present
and entitled to vote on that item of business would not
constitute a quorum for the transaction of business at the
meeting, however, then the item must be approved by a majority of
the voting power of the minimum number of shares that would
constitute such a quorum. Votes cast by proxy or in person at
the Annual Meeting of Shareholders will determine whether or not
a quorum is present. Abstentions will be treated as shares that
are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining
the approval of the matter submitted to the shareholders for a
vote. Broker non-votes will be treated as shares not present and
entitled to vote.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth information as of January 14,
2000 concerning the beneficial ownership of the common stock of
the Company by (i) the only shareholders known by the Company to
own more than five percent of the common stock of the Company,
(ii) each director of the Company, (iii) each Named Executive
Officer listed in the Summary Compensation Table, and (iv) all
executive officers and directors of the Company as a group.
Shares
Shares of Acquirable
Name and Address Common within
of Beneficial Owner Stock (1) 60 days Total Percentage
- ------------------- ---------- ---------- ----- ----------
P.R. Peterson (2) 1,055,907 1,500 1,057,407 20.1
ESI Investment Co. (2)
6111 Blue Circle Drive
Minnetonka, MN 55343
Dimensional Fund 390,100 - 390,100 7.4
Advisors, Inc. (3)
1229 Ocean Avenue
Santa Monica, CA 90401-
1038
Bruce C. Huber 144,444 1,500 145,944 2.8
Larry G. Paulson 92,348 13,334 105,682 2.0
Joseph C. Christenson 60,577 35,000 95,577 1.8
Arye Malek 30,697 14,834 45,531 *
David Malmberg 18,450 1,500 19,950 *
Thomas R. Northenscold 850 25,734 25,584 *
All executive officers 1,545,206 105,486 1,650,692 30.8
and directors as a
group (9 persons)
* Indicates ownership of less than one percent.
(1) Except as noted, all shares beneficially owned by each
person as of the record date were owned of record, and each
person had sole voting power and sole investment power for
all such shares beneficially held. The table excludes
shares purchasable pursuant to the Company's 1995 Employee
Stock Purchase Plan.
(2) ESI Investment Co. is the record owner of 549,084 shares of
common stock. Mr. Peterson is a controlling shareholder of
the parent company of ESI. Mr. Peterson also owns 202,873
shares of common stock individually and controls 303,950
shares as trustee of the P. R. Peterson Co. Profit Sharing
Trust. Pursuant to Section 302A.671 of the Minnesota
Business Corporation Act, and related definitions (the
"Control Share Acquisition Provisions"), shares of Common
Stock of the Company acquired by an "acquiring person" (as
defined) in a "control share acquisition" (as defined) that
exceed the voting threshold of a certain percentage (e.g. at
least 20 percent but less than or equal to 33 1/3 percent)
shall have the same voting rights as other shares only if
approved, by the required votes, by resolution of the
Company's shareholders. The shares held by Mr. Peterson in
excess of twenty percent of the Company's outstanding shares
will have no voting rights until such time as the
shareholders of the Company approve the rights.
Accordingly, Mr. Peterson will only be able cast votes with
respect to 1,050,054 of his 1,055,907 shares. Mr. Peterson
has not yet requested that the Company submit to its
shareholders a resolution granting voting rights for his
shares in excess of twenty percent of the Company's
outstanding shares. Mr. Peterson also owns options to
purchase common stock of the Company. Mr. Peterson and the
Company have entered into an agreement under which Mr.
Peterson may not exercise any option if such exercise would
result in a 20% or greater beneficial ownership in the
Company unless the shareholders of the Company have approved
voting rights to Mr. Peterson pursuant to the Control Share
Acquisition Provisions.
(3) Based on Schedule 13F filing reporting shares held as of
September 30, 1999.
Proposal #1
ELECTION OF DIRECTORS
It is intended that proxies solicited by the Board of
Directors will be voted FOR (unless otherwise directed) the
election of the nominees for director named below. Each of the
nominees named below upon election will serve until the next
annual meeting or until his successor has been elected and
qualified. If, for any reason, any of the nominees become
unavailable for election, the proxies solicited by the Board of
Directors will be voted for such nominee as is selected by the
Board of Directors. The Board of Directors has no reason to
believe that any of the nominees are not available or will not
serve if elected.
The Company does not have a nominating committee of the
Board of Directors. The nominees named below have been nominated
by the Board of Directors of the Company. The nominees are
listed below with their ages, their present positions with the
Company and their present principal occupations or employment.
Messrs. Paulson and Christenson have devoted and will devote
their full working time to the business of the Company. Messrs.
Huber, Malmberg and Peterson have devoted and will devote such
time as is necessary to fulfill their duties as directors.
JOSEPH C. CHRISTENSON, 41, has been President of the Company
since January 1989 and a director since December 1987. Prior to
being elected President of the Company, he had been its Chief
Operating Officer and Chief Financial Officer from December 1987
to December 1988, General Manager and Chief Financial Officer
from August 1986 to November 1987, and financial analyst and
marketing manager since joining the Company in May 1985. Mr.
Christenson has a Masters in Business Administration from the
University of Michigan and a Bachelor of Arts degree from St.
Olaf College.
LARRY G. PAULSON, 48, is a co-founder of the Company and has
served as a director since December 1981. Mr. Paulson has been
the Company's Vice President and Chief Technology Officer since
March 1999. Mr. Paulson previously served as the Company's Vice
President of Research and Development. Mr. Paulson is also a
Registered Professional Engineer and holds Bachelors and Masters
Degrees in Science from the University of Minnesota.
BRUCE C. HUBER, 52, is a Managing Director of Piper Jaffray
Inc., where he had served as the Director of Equity Capital
Markets until May 1998. Mr. Huber has been a director of the
Company since September 1985. Mr. Huber is also a director of
Axxis Business Solutions, Inc.
DAVID MALMBERG, 56, has been a director of the Company since
May 1994. Since May 1994, Mr. Malmberg has also been the
President of David C. Malmberg, Inc., a consulting and investment
management firm. Prior to that time, he served in various
capacities with National Computer Systems, Inc., a global data
collection services and systems company, most recently serving as
President from 1978 through 1993 and serving as Vice Chairman
from January 1993 through 1994. Mr. Malmberg is a director of
Three Five Systems, Inc., National City Bancorporation, and
Fieldworks, Inc. Mr. Malmberg also serves as a trustee for
Minnesota State University at Mankato.
P. R. PETERSON, 66, is the Secretary and a director of
Electro-Sensors, Inc., a manufacturer of machine control systems.
Mr. Peterson is also President of P. R. Peterson Co., Inc., a
venture capital firm where he has served for over five years.
Mr. Peterson served as a director from the Company's inception in
1982 to 1985. He was again elected a director of the Company in
December 1988 and continues to serve in that capacity.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE
Other Information Regarding the Board of Directors
Directors receive $1,250 per quarter for services as members
of the Board. The Board has a Compensation Committee consisting
of Mr. Huber, Mr. Malmberg (Chair) and Mr. Peterson and an Audit
Committee consisting of Mr. Huber (Chair), Mr. Malmberg and Mr.
Peterson.
The Compensation Committee has the authority to handle
management of compensation matters, including establishment of
the compensation of the Chief Executive Officer and incentive
compensation for employees of the Company and serves as the
Committee authorized to grant options under the Company's stock
option plans. The Compensation Committee did not meet separately
in fiscal 1999, but took action on a number of matters through
written action. The Audit Committee has the authority to review
the accounting and auditing principles and procedures of PPT
Vision, Inc. with a view toward providing for the safeguard of
the Company's assets and the reliability of its financial
records, recommend to the full Board the engagement of
independent auditors, review with the independent auditors the
plans and results of the auditing engagement and consider the
independence of the Company's auditors. The Audit Committee met
once with the Company's auditors in fiscal 1999 as part of a
regular joint meeting of the Board of Directors and the Audit
Committee.
During the fiscal year ended October 31, 1999, the Company's
Board of Directors held seven meetings. All directors attended
at least six of the seven meetings. In addition, the Company's
directors took a number of different actions by written action
during the fiscal year.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Other Compensation
The following table sets forth, for the fiscal years ending
October 31, 1999, 1998 and 1997, the cash compensation paid by
the Company, as well as certain other compensation paid or earned
for those years by Joseph C. Christenson, the Company's President
and Chief Executive Officer, and the only other executive
officers whose compensation exceeded $100,000 in fiscal 1999 (the
"Named Executive Officers"), for services rendered to the Company
in all capacities during the past three fiscal years.
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------- ------------
Options
Name and Principal Year Ended Other Annual (number of
Position October 31, Salary Bonus Compensation(1) shares)
- ------------------ ---------- ------ ----- -------------- -----------
Joseph C. Christenson 1999 $156,000 $2,000 20,000
President and Chief 1998 140,833 2,000 -
Executive Officer 1997 120,000 1,000 65,000
Arye Malek 1999 116,865 2,000 10,000
Vice President 1998 110,250 4,336 2,000 5,000
of Marketing 1997 105,000 1,000 23,500
Thomas R. Northenscold 1999 115,667 2,000 15,000
General Manager, Vision 1998 100,000 2,000 5,000
Systems Division 1997 91,287 1,000 25,000
Larry G. Paulson 1999 100,565 2,000 10,000
Chief Technology 1998 95,776 2,000 --
Officer 1997 91,215 1,000 25,000
(1) Represents contributions to the Company's Employee
Retirement 401(k) Plan and other fringe benefits.
Stock Options
The following table contains information concerning stock
option grants to the Named Executive Officers during the fiscal
year ended October 31, 1999.
<TABLE>
Option/SAR Grants in Fiscal Year 1999
-------------------------------------
Individual Grants
------------------------- Potential Realizable Value
Number of % of Total at Assumed Annual Rates of
Securities Options Granted Stock Price Appreciation
Underlying to Employees Exercise Expiration for Option Term(1)
Options Granted(2) in Fiscal Year Price Date 5% 10%
------------------- -------------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Joseph C. Christenson 20,000 8.1% $3.875 9/27/2006 $31,550 $73,526
Arye Malek 10,000 4.1% $3.875 9/27/2006 $15,775 $36,763
Thomas R. Northenscold 15,000 6.1% $3.875 9/27/2006 $23,663 $55,144
Larry G. Paulson 10,000 4.1% $3.875 9/27/2006 $15,775 $36,763
- ---------------------
</TABLE>
(1)Potential realizable values shown above represent the
potential gains based upon annual compound price appreciation
of 5% and 10% from the date of grant through the full option
term. The actual value realized, if any, on stock option
exercises will be dependent on overall market conditions and
the future performance of the Company and its common stock.
There is no assurance that the actual value realized will
approximate the amounts reflected in this table.
(2)All of the options listed above become exercisable in equal
installments over a period of two years, commencing one year
after the date of grant.
The following table contains information concerning exercises
of stock options during the last fiscal year by the Named
Executive Officer and the value of options which were held by the
Named Executive Officer at the end of the fiscal year ended
October 31, 1999.
<TABLE>
Aggregated Option Exercises in Fiscal 1999
and Options Values at October 31, 1999
Number of Unexercised Value of Unexercised(1)
Options at In-the-Money Options at
October 31, 1999 October 31, 1999
Shares Acquired Value ---------------- ----------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph C. Christenson 7,500 $11,250 35,000 50,000 ------ -----
Arye Malek 3,000 4,500 14,834 23,666 ------ -----
Thomas R. Northenscold ----- ----- 25,734 29,166 $10,313 -----
Larry G. Paulson 3,750 5,429 13,334 21,666 ------ -----
- ---------------------
</TABLE>
(1) Value is calculated based on the difference between the
option exercise price and the closing price for the common
stock on October 31, 1999, as reported on the Nasdaq
National Market, multiplied by the number of shares
underlying the option.
Employment Agreements
The Company has entered into written employment agreements
with Messrs. Christenson, Paulson, Malek and Northenscold. Under
the terms of their respective employment contracts, each of the
officers is required to devote his full time and effort to the
Company. Each employment agreement is renewable annually,
contains a one-year non-compete provision and is terminable by
the Company or the officer on 60-days' notice.
Report on Executive Compensation
Decisions on compensation of the Company's executives are
made by the Compensation Committee ("Compensation Committee") of
the Board of Directors. The following report shall not be deemed
incorporated by reference into any filing under the Securities
Exchange Act of 1933 or the Securities Exchange Act of 1934.
The Company uses various national and local compensation
surveys to develop its compensation strategy and plans. The
Compensation Committee also refers to such surveys for executive
compensation purposes. The Board has not used outside
consultants to prepare specific studies but the Compensation
Committee would be free to do so in the exercise of its
independent judgment.
There are four components to the Company's executive
compensation program: (1) base salary (2) bonus (3) stock
options and (4) retirement. The compensation philosophy of the
Company is to be competitive with comparable and directly
competitive companies to attract and motivate highly qualified
employees. To this end, the Compensation Committee has adjusted
the mix of the compensation components from year to year
according to the Company's performance.
Base Salary. Executive base salary is adjusted annually
based on the prior fiscal year's financial results and
performance on developmental objectives the Compensation
Committee believes are critical to the Company's long-term
progress. These objectives include, but are not limited to,
progress on the Company's current business plan's objectives and
staff development.
Bonus. The Compensation Committee annually determines
whether to pay bonuses and approves executive bonuses based
upon the achievement of earnings and development objectives the
Compensation Committee believes are critical to the Company's
long-term progress. Bonuses are payable to executive officers,
managers and key employees based upon the recommendation of the
Chief Executive Officer. The Compensation Committee approves the
Chief Executive Officer's share of the bonus pool. No bonuses
were paid with respect to fiscal 1999 results.
Stock Options. The Company's current stock option plans
include executive officers, managers and key employees. In the
past, substantially all of the Company's employees have been
designated as key employees. Stock options are granted to new
employees on their hiring date on the recommendation of Company
officers to the Compensation Committee. In addition, Company
officers periodically recommend to the Compensation Committee,
for its approval at regular Board of Directors' meetings, stock
option grants to employees based on merit. Options outstanding
under current plans fully vest in a period from one and a half to
four years and expire in five to seven years.
Retirement. The Company sponsors a 401(k) plan for its
employees, including executive officers, under which the Company
partially matches employee contributions at a proportion set by
the Company. The Compensation Committee approves the corporate
matching formula for all employees.
Chief Executive Compensation. Mr. Christenson's
compensation for the fiscal years 1997 through 1999 is shown in
the summary compensation table above. The Compensation Committee
increased Mr. Christenson's base salary to $156,000 effective
June 1, 1998. The Compensation Committee believes that Mr.
Christenson has managed the Company extremely well and has made
progress on the Company's business plan objectives.
Bruce C. Huber David Malmberg P.R. Peterson
BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Performance Graph
The Securities and Exchange Commission requires that the
Company include in this Proxy Statement a line graph presenting
comparing cumulative, five-year stockholder returns on an indexed
basis with a broad market index and either a nationally-
recognized industry standard or an index of peer companies
selected by the Company. The Company has chosen the use of the
Nasdaq Stock Market (U.S. Companies) Index as its broad market
index and the Nasdaq Non-Financial Stocks Index. The table below
compares the cumulative total return as of the end of each of the
Company's last five fiscal years on $100 invested as of October
31, 1994, on the Nasdaq Stock Market (U.S. Companies) Index and
the Nasdaq Non-Financial Stocks Index, assuming the reinvestment
of all dividends.
<TABLE>
FISCAL YEAR ENDING
-----------------------------------------------------------------------
10/31/94 10/31/95 10/31/96 10/31/97 10/31/98 10/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PPT Vision, Inc. $ 100.00 $ 357.69 $ 389.42 $ 395.19 $ 297.11 $ 150.00
Nasdaq Stock Market
(U.S. Companies) Index $ 100.00 $ 134.65 $ 158.93 $ 209.16 $ 234.09 $ 390.84
Nasdaq Non-Financial
Stocks Index $ 100.00 $ 134.00 $ 155.14 $ 199.22 $ 222.49 $ 389.38
</TABLE>
Proposal #2
PROPOSAL TO APPROVE THE PPT VISION, INC.
2000 STOCK OPTION PLAN
Introduction
On December 22, 1999 the Company's Board of Directors
adopted the PPT Vision, Inc. 2000 Stock Option Plan (the "2000
Plan"), subject to approval of the 2000 Plan by the Company's
shareholders. The purpose of the 2000 Plan is to provide a
continuing, long-term incentive to selected eligible officers and
key employees of the Company and of any subsidiary corporation of
the Company, to provide a means of rewarding outstanding
performance and to enable the Company to maintain a competitive
position to attract and retain key personnel necessary for
continued growth and profitability.
Summary of the Plan
Number of Shares. The maximum number of shares of common
stock reserved and available under the 2000 Plan for awards is
500,000 shares (subject to adjustment in the event of possible
future stock splits or similar changes in the common stock).
Shares of common stock covered by expired or terminated stock
options may be used for subsequent awards under the 2000 Plan.
Eligibility and Administration. Officers and regular full-
time executive, administrative, professional, production and
technical employees of the Company and its subsidiaries,
directors and consultants are eligible to be granted stock
options under the 2000 Plan. Approximately 76 officers and other
key employees and three non-employee directors are currently
eligible to participate in the 2000 Plan. The 2000 Plan is
administered by the Board of Directors or by a Committee
appointed by the Board, consisting of at least two directors, all
of whom are "Outside Directors" and "Non-Employee Directors" as
defined in the 2000 Plan. The Committee has the power to
determine when and to whom options will be granted, the term of
each option, the number of shares covered by it and other terms
and conditions of each option. The Committee also has the power
to construe and interpret the 2000 Plan, and establish and amend
any rules and regulations it deems necessary or desirable for the
proper administration of the 2000 Plan
Stock Options. The Committee may grant stock options that
qualify as "incentive stock options" under the Internal Revenue
Code or as "non-qualified stock options" in such form and upon
such terms as the Committee may approve from time to time. Stock
options granted under the 2000 Plan may be exercised during their
respective terms as determined by the Committee. There is an
annual cap of 50,000 on the number of shares granted to an
optionee. Further, there is a cap each calendar year of $100,000
per optionee on the aggregate fair market value of the common
stock underlying an incentive stock option that is exercisable
for the first time.
Term of Options. For employees who hold more than 10% of
the voting power of the Company, the term of an incentive stock
options may not be greater than ten years. For employees who do
not hold more than 10% of the voting power of the Company, the
term of an incentive stock option may not be greater than seven
years. The term for any non-qualified stock option may not be
greater than a period of ten years and one day from the date of
grant.
Exercise Price. The exercise price per share purchasable
under an incentive stock option shall not be less than 110% of
fair market value of the Company's common stock on the date the
option is granted if granted to an employee who holds more than
ten percent (10%) of the Company's voting power. If granted to
an employee who do not hold more than 10%, the exercise price
shall not be less than 100% of such fair market value. The
exercise price per share purchasable under a non-qualified stock
option may not be less than 85% of fair market value of the
common stock of the Company on the date the option is granted.
Payment. The Company accepts payment for the exercise of
each option in cash, or at the discretion of the Company, by
delivery of common stock of the Company already owned by the
optionee or by delivery of a promissory note. Any tax
withholding requirements associated with the exercise of an
option may be satisfied by a withholding of common stock from the
shares that would otherwise be deliverable.
Restrictions. An option may only be exercised by the
optionee to whom granted during his or her lifetime. Options
under the 2000 Plan are not assignable or transferable, except by
will or the laws of descent and distribution. However, the
Committee may, in its discretion, allow exercise of an option by
a person other than an optionee or allow transfer of the option.
There is no express limitation on the duration of the 2000
Plan, except for the requirement of the Internal Revenue Code of
1986, as amended, that all incentive stock options must be
granted within ten years from the date the Plan is approved by
the shareholders.
Federal Income Tax Consequences. The following description
of federal income tax consequences is based on current statutes,
regulations and interpretations. The description does not
include state or local income tax consequences. In addition, the
description is not intended to address specific tax consequences
applicable to an individual participant who receives an award.
An optionee will not realize taxable compensation income
upon the grant of an incentive stock option. In addition, an
optionee generally will not realize taxable compensation income
upon the exercise of an incentive stock option if he or she
exercises it as an employee or within three months after
termination of employment (or within one year after termination
if the termination results from a permanent and total
disability). The amount by which the fair market value of the
shares purchased exceeds the aggregate option price at the time
of exercise is treated as alternative minimum taxable income for
purposes of the alternative minimum tax.
If stock acquired pursuant to an incentive stock option is
not disposed of prior to the date two years from the option grant
date or prior to one year from the option exercise date, any gain
or loss realized upon the sale of such shares will be
characterized as capital gain or loss. If the applicable holding
periods are not satisfied, then any gain realized in connection
with the disposition of such stock will generally be taxable as
compensation income in the year in which the disposition
occurred, to the extent of the difference between the fair market
value of such stock on the date of exercise and the option
exercise price. The Company is entitled to a tax deduction to
the extent, and at the time, that the participant realizes
compensation income. Capital gains resulting from property held
for more than 12 months will be taxed at a maximum rate of 20%.
Capital gains resulting from property held for less than one year
will be treated as short-term capital gains and taxed at the
individual's applicable ordinary income tax rate.
An optionee will not realize taxable compensation income
upon the grant of a non-qualified stock option, which includes
options granted to non-employee directors. When an optionee
exercises a non-qualified stock option, he or she will realize
taxable compensation income at that time equal to the difference
between the aggregate option price and the fair market value of
the stock on the date of exercise.
Registration with the SEC. The Company intends to file a
Registration Statement covering the 2000 Plan with the Securities
and Exchange Commission pursuant to the Securities Act of 1933,
after shareholder approval.
Shareholder Vote. Shareholder approval of the 2000 Plan
requires the affirmative vote of the holders of a majority of the
shares of common stock represented at the meeting and entitled to
vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL.
PROPOSAL TO APPROVE THE PPT VISION, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
(Proposal #3)
Introduction
The Board of Directors of the Company has adopted the PPT
Vision, Inc. 2000 Employee Stock Purchase Plan (the "2000
Purchase Plan") to replace the 1995 Employee Stock Purchase Plan
which by its terms expires this year. Under the terms of the
2000 Purchase Plan, all employees of the Company are eligible to
participate in the 2000 Purchase Plan, other than employees who
have been with the Company less than two weeks and employees who
own five percent (5%) or more of the Company's stock.
Summary of the Plan
Number of shares. The 2000 Purchase Plan authorizes the
issuance of up to 150,000 shares (subject to adjustment in the
event of possible future stock splits or similar changes in the
capitalization of the Company's common stock).
Administration and Amendment. The Plan shall be
administered by a Committee consisting of not less than two
members who shall be appointed by the Board of Directors. Each
member of such Committee shall be either a director, officer or
an employee of the Company. The Board of Directors may at any
time amend the Plan, except that no amendment may make changes in
options already granted that would adversely affect the rights of
any Participant.
Eligibility. Any employee of the Company who has completed
at least two weeks of service prior to the "Commencement Date" of
a phase of the 2000 Purchase Plan and who does not own five
percent (5%) or more of the Company's stock is eligible to
participate. As of January 14, 2000 approximately 109 employees
of the Company were eligible to participate.
Conditions of Purchase. Eligible employees elect to
participate in the 2000 Purchase Plan through payroll deductions
limited to 10% of a participant's base pay for the term of the
2000 Purchase Plan. As of each Commencement Date of a phase of
the 2000 Purchase Plan, an employee is granted an option for as
many full shares as he or she will be able to purchase through
the payroll deduction procedure. The option rate for employees
who participate shall be the lower of (i) 85% of the fair market
value of the shares on the Commencement Date of the phase, or
(ii) 85% of the fair market value of the shares on the
"Termination Date" of the phase, which is one year after the
Commencement Date. Exercise of the option occurs automatically
on the Termination Date of the Purchase Plan, unless a
participant has given written notice prior to such date as to an
election not to exercise. A participant may elect not to
continue to participate at any time during the term of the 2000
Purchase Plan, in which case all amounts withheld will be
refunded without interest.
Federal Income Tax Consequences. The 2000 Purchase Plan is
intended to qualify as an "Employee Stock Purchase Plan" within
the meaning of Section 423 of the Internal Revenue Code of 1954.
In order for the employee participants to have such qualified tax
treatment, the 2000 Purchase Plan must be approved by the
Company's shareholders. If the 2000 Purchase Plan so qualifies,
no income will result to a grantee of an option upon the granting
or exercise of an option, and no deduction will be allowed to the
Company. The gain, if any, resulting from a disposition of the
shares received by a Participant will be reported according to
the provisions of Section 423 of the Internal Revenue Code and
will be taxed in part as ordinary income and in part as capital
gain.
Registration with the SEC. The Company will be filing with
the SEC, pursuant to the Securities Act of 1933, as amended, a
registration statement covering the offering of shares under the
Plan, and a prospectus has been or will be delivered to each
eligible employee prior to the time when an election to
participate must be made.
Shareholder Approval. The affirmative vote of the holders
of a majority of the common stock of the Company, voting at the
meeting in person or by proxy, is required for the approval of
the 2000 Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as independent
accountants for the Company for a number of years, including the
fiscal year ended October 31, 1999. The Company has selected
PricewaterhouseCoopers to serve as the Company's independent
auditors for the year ended October 31, 2000. A representative
of PricewaterhouseCoopers LLP is expected to be present at the
Annual Meeting of Shareholders, will have an opportunity to make
a statement if he or she desires to do so, and will be available
to respond to appropriate questions.
ANNUAL REPORT
An Annual Report of the Company setting forth the Company's
activities and containing financial statements of the Company for
the fiscal year ended October 31, 1999 accompanies this
Notice of Annual Meeting and proxy solicitation material.
SHAREHOLDER PROPOSALS
Rule 14a-8 of the SEC permits shareholders of a company,
after timely notice to the company, to present proposals for
shareholder action in the company's proxy statement where such
proposals are consistent with applicable law, pertain to matters
appropriate for shareholder action and are not properly omitted
by company action in accordance with the proxy rules. The PPT
Vision, Inc. 2001 Annual Meeting of Shareholders is expected to
be held on or about March 9, 2001. Proxy materials for that
meeting are expected to be mailed on or about February 4, 2001.
Under SEC Rule 14a-8, shareholder proposals to be included in
the PPT Vision, Inc. proxy statement for that meeting must be
received by PPT Vision, Inc. on or before October 7, 2000.
Additionally, if PPT Vision, Inc. receives notice of a
shareholder proposal after December 23, 2000, the proposal will
be considered untimely pursuant to SEC Rules 14a-4 and 14a- 5(e)
and the persons named in proxies solicited by the Board of
Directors of PPT Vision, Inc. for its 2001 Annual Meeting of
Shareholders may exercise discretionary voting power with respect
to the proposal.
SOLICITATION
The cost of soliciting proxies, including the cost of
preparing, assembling, and mailing the proxies and soliciting
material, as well as the cost of forwarding the material to the
beneficial owners of stock, will be borne by the Company.
Directors, officers and regular employees of the Company may,
without compensation other than their regular remuneration,
solicit proxies personally or by telephone.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than 10% of a registered class of the
Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities
of the Company. These insiders are required by Securities and
Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file, including Forms 3, 4
and 5. To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, during the
fiscal year ended October 31, 1999 all Section 16(a) filing
requirements applicable to its insiders were complied with,
except that Mr. P. R. Peterson and Mr. Christenson failed to
timely file one Form 4.
OTHER BUSINESS
The management of the Company does not know of any other
business to be presented at the Annual Meeting of Shareholders.
If any matter properly comes before the meeting, however, it is
intended that the persons named in the enclosed form of proxy
will vote said proxy in accordance with their best judgment.
ALL PROXIES PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY SHAREHOLDERS. IF NO DIRECTION IS MADE, PROXIES WILL
BE VOTED IN FAVOR OF THE DIRECTORS.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Thomas G. Lovett IV
Thomas G. Lovett IV, Secretary
PROXY PPT VISION, INC.
Solicited on Behalf of the Board of Directors
for the Annual Meeting of Shareholders to be
Held on March 16, 2000
The undersigned hereby constitutes and appoints Joseph C.
Christenson and Thomas R. Northenscold, and each of them, with
power of substitution, as attorneys and proxies to appear and
vote all of the shares standing in the name of the undersigned
at the Annual Meeting of Shareholders of PPT Vision, Inc., to be
held on March 16, 2000 at 3:30 p.m. local time, in Minneapolis,
Minnesota and at any adjournment or adjournments thereof:
1. Election of Directors:
_____ FOR all nominees listed below _____ WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the FOR box and strike a line through the
nominee's name in the list below).
Joseph C. Christenson
Larry G. Paulson
Bruce C. Huber
P.R. Peterson
David Malmberg
2. TO APPROVE THE ADOPTION OF THE PPT VISION, INC. 2000 STOCK
OPTION PLAN:
FOR
AGAINST
ABSTAIN
3. TO APPROVE THE ADOPTION OF THE PPT VISION, INC. 2000
EMPLOYEE STOCK PURCHASE PLAN:
FOR
AGAINST
ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
ANY OTHER MATTERS COMING BEFORE THE MEETING.
The shares represented by this proxy will be voted in
accordance with the specifications made and in favor of the
directors nominated by management if there is no
specification.
I plan to attend the meeting ------
DATE:_____________________,2000
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Signature
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Signature if held jointly
Please sign exactly as name
appears hereon. Joint
owners should each sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such.
PLEASE RETURN PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED WITHIN THE UNITED STATES.
