<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
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PERCEPTRONICS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
<TABLE>
<S> <C> <C>
(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:
------------------------------
</TABLE>
[ ] 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>
PERCEPTRONICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on September 11, 1998
To The Stockholders:
The Annual Meeting of Stockholders of Perceptronics, Inc. (the
"Company") will be held at the Company's offices located at 21010 Erwin
Street, Woodland Hills, California, on September 11, 1998, at 10:00 a.m. for
the following purposes:
1. To elect seven directors to serve until the next Annual Meeting of
Stockholders or until their successors are duly elected and qualified.
The Board of Directors' nominees are Dr. Gershon Weltman, Steven P.
Corda, Dr. Amos Freedy, Michael L. Laney, Dr. John Lyman, Robert
Parker and Stanley B. Schneider; and
2. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business, July 20, 1998,
as the record date for determination of stockholders entitled to notice of
and to vote at the Annual Meeting.
EVEN THOUGH YOU MAY EXPECT TO BE PERSONALLY PRESENT AT THE MEETING,
PLEASE BE SURE THAT THE ENCLOSED PROXY CARD IS PROPERLY COMPLETED, DATED,
SIGNED AND RETURNED WITHOUT DELAY IN THE ACCOMPANYING ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
GERSHON WELTMAN
Secretary
July 29, 1998
<PAGE>
PERCEPTRONICS, INC.
21010 Erwin Street
Woodland Hills, California 91367
--------------
PROXY STATEMENT
--------------
GENERAL INFORMATION
SOLICITATION, REVOCATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Perceptronics, Inc. (the "Company"), for
use at the Annual Meeting of Stockholders to be held at 10:00 a.m. on
September 11, 1998, at the Company's offices located at 21010 Erwin Street,
Woodland Hills, California, and at any and all adjournments thereof. It is
anticipated that this Proxy Statement and accompanying proxy will first be
mailed to stockholders on or about July 30, 1998.
The accompanying proxy, if properly executed and returned, will be voted
as specified by the stockholder or, if no vote is indicated, the proxy will
be voted FOR the Board's nominees for director. As to any other matter of
business which may be brought before the Meeting, a vote may be cast pursuant
to the accompanying proxy in accordance with the judgment of the persons
voting the same, but management does not know of any such other matter of
business. A stockholder may revoke his proxy at any time prior to the voting
of shares by voting in person at the Meeting or by filing with the Secretary
of the Company a duly executed proxy bearing a later date or an instrument
revoking the proxy.
The costs of solicitation of proxies will be paid by the Company. In
addition to soliciting proxies by mail, the Company's officers, directors and
other regular employees, without additional compensation, may solicit proxies
personally or by other appropriate means. Banks, brokers, fiduciaries and
other custodians and nominees who forward proxy soliciting material to their
principals will be reimbursed their customary and reasonable out-of-pocket
expenses.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record of the Company's Common Stock as of the
close of business on July 20, 1998 will be entitled to vote at the Meeting.
On July 20, 1998, there were outstanding 5,154,041 shares of Common Stock,
which constituted all of the outstanding voting securities of the Company,
each of which is entitled to one vote per share. A majority of the shares
entitled to vote, represented in person or by proxy, constitutes a quorum at
the Meeting. Abstentions and broker non-votes are counted as present for
purposes of determining the existence of a quorum. Abstentions are counted
in tabulations of the votes cast on proposals presented to the stockholders
(other than the election of directors), but broker non-votes are not counted
in determining whether a proposal has been approved. Abstentions and broker
non-votes have no effect on the outcome of the election of directors.
<PAGE>
In the election of directors only, each stockholder has the right to
cumulate his votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares he is
entitled to vote, or to distribute his votes on the same principle among as
many candidates as he sees fit. No stockholder is entitled to cumulate votes
unless the name of the candidate or candidates for whom such votes would be
cast has been placed in nomination prior to the voting and any stockholder
has given notice at the meeting prior to the voting of such stockholder's
intention to cumulate his votes. See "Stockholder Proposals." The
candidates receiving the highest number of affirmative votes, up to the
number of directors to be elected, will be elected directors.
If voting for directors is conducted by cumulative voting, the persons
named on the enclosed proxy will have discretionary authority to cumulate and
distribute votes among the nominees with respect to which authority was not
withheld or, if the proxy either was not marked or was marked for all
nominees, among all nominees. In any case, the proxies may be voted for less
than the entire number of nominees if any situation arises which, in the
opinion of the proxy holders, makes such action necessary or desirable.
ELECTION OF DIRECTORS
The seven directors to be elected at the Annual Meeting will hold office
until the next Annual Meeting of Stockholders and until the election of their
respective successors. All proxies received by the Board of Directors will
be voted for the nominees listed below if no direction to the contrary is
given. In the event that any nominee is unable or declines to serve, an event
that is not anticipated, the proxies will be voted for the election of any
nominee who may be designated by the Board of Directors.
Set forth below is information concerning the nominees for director:
DR. GERSHON WELTMAN (age 61) served as President and a Director of the
Company from 1969 until 1982, when he became Chief Executive Officer and
Chairman of the Board. Dr. Weltman was an original founder of the Company in
1969. Prior to that, Dr. Weltman was a member of the engineering faculty at
the University of California, Los Angeles, where he taught human factors
engineering and other courses, and an independent consultant to industry in
the areas of human factors and biomedical engineering. At Perceptronics, in
addition to his executive role, Dr. Weltman has served as scientific and/or
technical director for a large number of R&D programs. His work has focused
on developing innovative computer-based simulators for individual and team
training. Dr. Weltman is currently serving his second two-year term on the
U.S. Army Science Board, a group that advises the U.S. Army on scientific and
technological issues. Dr. Weltman received a Ph.D. degree in engineering in
1962 from the UCLA.
MR. STEVEN P. CORDA (age 36) has over 14 years experience in the
telecommunications industry. For the past two years he has held the position
of Assistant Director, New Ventures, at Hughes Electronics Corporation. His
responsibilities include developing new business opportunities within the
Hughes Electronics business units, focusing on the rapidly evolving global
telecommunications landscape. Before joining Hughes, Mr. Corda was the
General Manager, Satellite Systems and Services, for Binariang Sdn. Bhd., a
multi-service
2
<PAGE>
telecommunications provider in Malaysia from 1995 to 1996. From 1994 to
1995, Mr. Corda managed international business development efforts at US
WEST, Inc., the parent company of Binariang Sdn. Bhd. Before joining US
WEST, Inc., Mr. Corda was a systems engineer at Hughes Aircraft Company from
1984 to 1994. Mr. Corda holds a BSEE degree from Michigan Technological
University and a MSEE from the University of Southern California. He is
currently pursuing an Executive MBA degree at the Anderson School, UCLA.
DR. AMOS FREEDY (age 59) is an original founder of Perceptronics. He is
currently the Managing Director of American Medical Laboratories, Ltd., of
Tel Aviv, Israel, a position he has held for the past year. Dr. Freedy was a
Director and executive officer of Perceptronics from 1969 to 1995. He held
the positions of President and Chief Operating Officer of Perceptronics from
1984 until he retired from the Company in 1995. Dr. Freedy specializes in
robotics and the practical applications of artificial intelligence
technology, and was also the first director of Perceptronics' ongoing,
successful R&D program in the area of High Level Architecture software for
simulator networking. Dr. Freedy received a PhD in engineering in 1969 from
UCLA.
MR. MICHAEL L. LANEY (age 52) has been Vice President and Chief
Financial Officer of Distinguished Appliances, Inc. (dba Dacor), a
manufacturer and distributor of high-end kitchen appliances, for
approximately one year. Prior to joining Dacor, Mr. Laney was a principal in
Laney and Associates, a consulting firm. From 1994 to 1997, Mr. Laney served
as Senior Vice President of Operations for Warner Bros. Feature Animation,
where he founded the division which produced the films SPACE JAM, released in
1997, and QUEST FOR CAMELOT, released in 1998. From 1992 to 1994, Mr. Laney
worked for The Walt Disney Company as Vice President of their Feature
Animation division. In addition to his expertise in the entertainment field,
Mr. Laney has a broad background as a financial and operations executive in
the aerospace, electronics and manufacturing industries, having worked for
both public and private companies. Mr. Laney also serves as a facilitator for
the American Management Association teaching courses for the President's
Association. Mr. Laney was an Assistant Professor of Accounting and taught
for many years at California State University, Northridge, California. He
holds an MBA degree from UCLA and a BS degree with honors from California
State University, Northridge.
DR. JOHN LYMAN (age 77) has been a Director of the Company since 1969,
and served as Chairman of the Board of Directors from 1969 until 1982. From
1969 to 1997 Dr. Lyman served as a consultant on management and new program
development to the Company. In 1994, Dr. Lyman retired as a Professor
Emeritus from UCLA where he was a Professor of Engineering and Applied
Science and Professor of Psychology since 1950. He is a founding member and
past president of the Human Factors Society and the Biomedical Engineering
Society. Dr. Lyman received a PhD in psychology in 1957 from UCLA.
MR. STANLEY B. SCHNEIDER (age 62) has been a Director of the Company
since 1972. Mr. Schneider is a Certified Public Accountant and has been a
partner in the Los Angeles accounting firm of Gursey, Schneider and Company
for more than five years. Mr. Schneider is also a director of the Golden
West Baseball Co., Golden West Broadcasters, Inc., Chicago Pizza & Brewery,
Inc., Jerry's Famous Deli, Inc., The Autry Museum of Western Heritage and
P.A.T.H. Mr. Schneider received a B.A. degree in 1958 from UCLA.
3
<PAGE>
MR. ROBERT PARKER (age 69) has been a Director of the Company since
1992. Mr. Parker is President and Chief Operating Officer of The Flyer Group,
Inc., a manufacturer of high-performance military scout vehicles, a position
he has held for the past two years. He is also President of Outstanding
Futures, Inc., a consulting firm, a position he has held for the past eight
years. In 1990, Mr. Parker retired as Executive Vice President of LTV
Aerospace and Defense Company, where he had served more than a dozen years in
senior management capacities, including president of its missile division. As
a recognized authority on research, science and engineering for the defense
industry, Mr. Parker has served on the Defense Science Board since 1985. This
advisory panel, appointed by the U.S. Secretary of Defense, provides
independent scientific evaluations of advanced defense systems. Mr. Parker
also serves on the Advisory Board of Directors for the Association of the
U.S. Army, on the Land Warfare Committee, and as a director of the American
Defense Preparedness Association. From 1973 to 1977, he was principal deputy
director of defense research and engineering in the U.S. Department of
Defense. Mr. Parker received a MS degree in 1956 from UCLA.
INFORMATION CONCERNING BOARD AND COMMITTEE MEETINGS
The Company's Board of Directors held three meetings during the fiscal
year ended March 31, 1998. Stanley Schneider did not attend one of such
meetings. The members of the Audit Committee are Dr. John Lyman and Stanley
Schneider. The Audit Committee is responsible for periodically reviewing the
financial condition, and the results of audit examinations, of the Company
with its independent accountants. The Audit Committee did not meet during
the last fiscal year. The responsibilities of the Compensation Committee
include reviewing and recommending to the Board the compensation, bonuses and
employee benefits of senior management. The Compensation Committee did not
meet during the last fiscal year. The Company does not have a nominating
committee.
DIRECTORS' COMPENSATION
Directors are not paid fees for attending Board of Directors or
committee meetings, but they are reimbursed their out-of-pocket expenses for
attending such meetings.
On April 1 of each year, each non-employee director of the Company has
automatically received stock options to purchase 2,000 shares of Common Stock
under the Company's 1988 Directors' Stock Option Plan, except for Julius
Uhlaner, a former director, who received options for 4,000 shares. The
options have a term of five years after the date of grant (subject to earlier
termination in certain events) and are fully exercisable at the time of
grant. The exercise price is 100% of the fair market value of the Common
Stock on the date of grant ($.11 on April 1, 1997).
4
<PAGE>
EXECUTIVE OFFICERS
The following information is provided with respect to the Company's
current executive officers. Officers serve at the discretion of the Board of
Directors.
DR. GERSHON WELTMAN (age 61) has served as Chief Executive Officer and
Chairman of the Board since 1982. See "Election of Directors."
MR. THOMAS J. LUBACZEWSKI (age 51) is Senior Vice President, Training
Systems and Chief Operating Officer with specific responsibility for training
system programs at the Company. He was appointed Chief Operating Officer in
January 1997. Prior to joining the Company in 1984, Mr. Lubaczewski served
as a Lieutenant Colonel in the U.S. Army, where he directed development and
use of command training simulators in the Army's simulation center in Ft.
Leavenworth, Kansas.
DR. RICHARD E. VESTEWIG (age 51) joined the Company in 1987 and has
served as Senior Vice President Software Systems since 1996. He is
responsible for the management of software systems, including ongoing work on
interactive simulation protocols and HLA/R.I. prototype application
development, and knowledge-based process management software. Prior to
joining the Company, he was employed at Honeywell Systems and Research
Center, where he led development of voice recognition and CGI programs. He
holds a Ph.D. from the University of Michigan and a B.A. from Yale University.
MR. ROBERT E. ANDERSON (age 56) was appointed Senior Vice President
Finance and Chief Financial Officer in August 1997. During the preceding
year, Mr. Anderson worked for the Company in a financial consulting capacity.
Mr. Anderson previously served as a consultant to Parnelli Jones Inc. from
January 1996 to August 1997 and as Director of Finance for Whittaker
Corporation from May 1993 to September 1995. From 1984 to 1992, Mr. Anderson
served as Director of Finance for TransTechnology Corporation. He is a CPA
and holds an MBA degree from Pepperdine University.
5
<PAGE>
EXECUTIVE COMPENSATION
The following tables provide information concerning the compensation of
the Chief Executive Officer and each other executive officer whose total
salary and bonus exceeded $100,000 in the fiscal year ended March 31, 1998
(the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-term
Compensation Compensation
--------------- ---------------------
Name and Fiscal Securities Underlying All Other
Principal Position Year Salary(1) Bonus Options (#) Compensation
------------------ ---- --------- ----- ---------------------- ------------
<S> <C> <C> <C> <C> <C>
Dr. Gershon Weltman, 1998 $162,741 -0- 45,000 $17,433(2)
Chief Executive Officer 1997 108,537 -0- -0- 17,433(2)
1996 177,442 -0- -0- 20,561(2)
Thomas Lubaczewski, Senior Vice 1998 125,297 10,000 20,000 -0-
President and Chief Operating 1997 107,494 -0- -0- -0-
Officer 1996 97,764 -0- -0- -0-
Richard E. Vestewig, 1998 101,826 -0- 15,000 -0-
Senior Vice President 1997 91,464 -0- -0- -0-
1996 89,125 -0- -0- -0-
</TABLE>
- ---------------------------------
(1) Includes amounts deferred under to the Company's 401(K) Plan and payments
for vacation in lieu of time off.
(2) Represents premiums for life and disability insurance for the benefit of
Dr. Weltman.
FISCAL YEAR 1998 OPTION GRANTS
<TABLE>
<CAPTION>
% of Total
Number of Securities Options Granted Exercise
Underlying Options to Employees in Price Per Expiration
Name Granted (1) Fiscal Year Share (2) Date
- ------------------- ------------------ --------------- --------- ------------
<S> <C> <C> <C> <C>
Dr. Gershon Weltman 40,000 23% $.47 3/9/03
5,000 3 .18 9/30/02
Thomas J. 15,000 9 .47 3/9/03
Lubaczewski 5,000 3 .18 9/30/02
Richard E. Vestewig 10,000 6 .47 3/9/03
5,000 3 .18 9/30/02
</TABLE>
- -------------------------
(1) The options which expire March 9, 2003, are 100% vested and the options
which expire September 30, 2002 vest in 20% installments beginning on the
grant date. The options are subject to earlier termination in the event of
termination of employment, death and certain corporate events. Under the
terms of the Company's Stock Option Plans, the Stock Option Committee may
modify the terms of outstanding options, including the exercise price and
vesting schedule.
(2) Fair market value of the Common Stock on the grant date.
6
<PAGE>
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options Held at In-the-Money Options
Name Fiscal Year-End at Fiscal Year-End(1)
--------------- ------------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Dr. Gershon Weltman 53,800 4,200 $2,340 $1,360
Thomas J. Lubaczewski 28,800 5,200 1,770 1,530
Richard E. Vestewig 20,800 5,200 1,984 1,646
</TABLE>
- -------------------------
(1) Represents the difference between the aggregate market value on March 31,
1998 ($.52 per share) and the aggregate exercise price.
There were no options exercised by officers during fiscal 1998.
Under the terms of the Company's Stock Option Plans, in the event of the
dissolution or liquidation of the Company, or any reorganization, merger or
consolidation in which the Company is not the surviving corporation, or the
sale of substantially all of the Company's assets or of more than 80% of its
outstanding stock to another corporation or entity, all outstanding options
will become fully exercisable 30 days prior to the effective date of any such
transaction unless the options are assumed by the surviving or successor
corporation.
EMPLOYMENT AGREEMENTS
Dr. Gershon Weltman is employed pursuant to a five-year Employment
Agreement with the Company which automatically renews for one-year periods
unless notice is given by either party at least thirty days prior to August 1
of each year. The Agreement provides for a minimum annual base salary of
$168,000, which is adjusted annually for increases in the Consumer Price
Index for Los Angeles. In the event Dr. Weltman becomes permanently disabled
during the term of the Agreement, he will be entitled to a minimum monthly
disability benefit of approximately $8,000. If Dr. Weltman dies during the
term of the Agreement, the Company will be entitled to a lump sum payment of
$500,000 and his beneficiary a lump sum payment of $750,000. The Company is
funding the disability and death benefits payable to Dr. Weltman with
insurance policies. Dr. Weltman has the right to terminate his employment in
the event of a change in control (as defined in the Agreement) of the Company
if he determines in his sole discretion that such change would impair his
ability to effectively discharge his duties or if his position is
down-graded. If Dr. Weltman terminates his employment because of such a
change of control, he will be entitled to receive in each of the three years
following termination of employment an amount equal to 60%, 50% and 40%,
respectively, of his base annual salary plus bonus, if any, for the year
immediately preceding such termination payable in 36 monthly installments.
During the term of his employment and
7
<PAGE>
during any period in which he receives severance benefits, Dr. Weltman may
not directly or indirectly engage or participate in any business that is in
competition with the Company.
Thomas Lubaczewski is employed in the capacity of Senior Vice President
and Chief Operating Officer pursuant to a three-year Employment Agreement
dated January 1, 1997, which provides for a minimum base salary of $124,800
and a minimum $20,000 annual bonus that is contingent upon the Company
achieving certain profit levels. As a signing incentive, he was issued
50,000 shares of common stock valued at $5,500. The agreement provides for
annual stock option grants based on the Company's profitability. If his
employment is terminated by the Company for reasons other than death,
disability, criminal misconduct or gross neglect of duties, Mr. Lubaczewski
is entitled to receive severance payments over twelve months based on an
amount equal to 50%, 75% or 100% of his compensation for the preceding fiscal
year, should the termination occur in the first year, second year or third
year, respectively, of the agreement term.
8
<PAGE>
CERTAIN TRANSACTIONS
In December 1993, the Company borrowed a total of $124,000 from certain
officers and directors. As consideration for the loans, the Company issued
promissory notes bearing interest at 6% and five-year warrants to purchase
common stock at $.18 per share. In fiscal year 1997, $120,000 of the notes
were canceled in consideration for the exercise of the warrants. There is
one promissory note outstanding in the amount of $4,000 and an unexercised
warrant for 22,222 shares held by a former officer. The number of shares
issued to persons who were then executive officers and directors as a result
of the warrant exercise is set forth below:
<TABLE>
<CAPTION>
Name Notes Retired Common Shares Issued
---- -------------- --------------------
<S> <C> <C>
Gershon Weltman $20,000 111,111
Amos Freedy 20,000 111,111
John Lyman 20,000 111,111
Stanley B. Schneider 20,000 111,111
Paul R. Chatelier 20,000 111,111
-------
555,555
-------
-------
</TABLE>
In July 1998, Eagle Capital, Ltd., a limited partnership, purchased
444,444 shares of Common Stock and warrants exercisable for 300,000 shares of
Common Stock for $200,000 cash. The warrants are exercisable for 100,000
shares at $.75 per share until July 10, 1999, for 100,000 shares at $1.00 per
share until January 10, 1999, and for 100,000 shares at $1.50 per share until
January 10, 2000. Eagle Capital may also make a $200,000 convertible loan to
the Company on terms to be negotiated.
In March 1998, TWG, Inc. purchased 57,143 shares and warrants to
purchase 82,143 shares for $20,000 cash and a commitment to provide
additional funding. In June 1998, TWG, Inc. agreed to purchase 312,500 shares
and warrants exercisable for 312,500 shares for $125,000 cash, payable in
installments through October 1998. The warrants held by TWG, Inc. have a
five-year term and are exercisable for $.57 per share as to 369,643 shares
and $.30 per share as to 25,000 shares.
Instead of paying the exercise price in cash, all of the foregoing
warrants may be exercised for the net number of shares issuable on the basis
that a portion of the shares having a fair market value equal to the exercise
price are delivered in payment of the exercise price. The Company has also
granted the warrantholders the right to include their shares of Common Stock
in certain registration statements filed by the Company under the Securities
Act of 1933. See "Ownership of Common Stock."
9
<PAGE>
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of July 20, 1998,
with respect to ownership of the Company's Common Stock by (a) each person
who is known by the Company to own beneficially 5% or more of the Common
Stock, (b) each Named Officer, (c) each current director and nominee for
director of the Company and (d) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percentage
Name* Owned Ownership
------------------------------------ --------------- --------------
<S> <C> <C>
Dr. Gershon Weltman 300,311 (1) 5.8%
21010 Erwin Street
Woodland Hills, CA 91367
Dr. John Lyman 198,911 (2) 3.6%
Stanley B. Schneider 139,111 (3) 2.7%
Robert Parker 12,500 (4) **
Thomas J. Lubaczewski 78,800 (5) 1.5%
Dr. Richard E. Vestewig 20,800 (6) **
All Executive Officers and Directors 776,133 (7) 14.6%
as a Group (7 persons)
Dr. Amos Freedy 367,630 (8) 7.0%
Freedy Family Trust
3A Kashani Street
Tel Aviv, Israel
Steven P. Corda -0- -0-
Michael L. Laney -0- -0-
Winston Mar 764,286 (9) 3.1%
TWG, Inc.
5631 Leeds Street
Southgate, CA 90280
Eagle Capital, Ltd. 744,444 (10) 13.6%
3836 North Keeler Street
Suite 200
Chicago, Illinois 60641
</TABLE>
- ------------------------------------
* Includes addresses of 5% or more stockholders
** Less than 1%
(1) Includes 53,800 shares subject to options which are exercisable within 60
days and excludes 6,530 shares held in the Company's 401(k) Plan over which
Dr. Weltman, as trustee, has voting power.
10
<PAGE>
(2) Includes 10,000 shares subject to options which are exercisable within 60
days.
(3) Includes 10,000 shares subject to options which are exercisable within 60
days.
(4) Includes 12,500 shares subject to options which are exercisable within 60
days.
(5) Includes 28,800 shares subject to options which are exercisable within 60
days.
(6) Includes 20,800 shares subject to options which are exercisable within 60
days.
(7) Includes the shares described in Notes (1) through (6) and 25,700 shares
subject to exercisable options held by an officer not named in the table.
(8) Includes 55,556 shares of Common Stock and warrants to purchase 55,556
shares of Common Stock which the Freedy Family Trust has agreed to purchase
from the Company, and 12,800 shares subject to exercisable options held by
Mr. Freedy. Mr. Freedy is a trustor and beneficiary of the Freedy Family
Trust.
(9) Includes 250,000 shares which TWG, Inc. has agreed to purchase in
installments through October 1998, and 394,643 shares subject to
exercisable warrants. TWG, Inc., the record owner of the shares, is
controlled by Winston Mar.
(10) Includes 300,000 shares subject to currently exercisable warrants.
AUDITORS OF THE COMPANY
The Company's independent certified public accountants for the fiscal
year ended March 31, 1998 were Beckman Kirkland & Whitney, which firm the
Company intends to appoint for the current fiscal year. A representative of
Beckman Kirkland & Whitney is expected to be present at the Meeting with the
opportunity to make a statement if he so desires and to respond to
appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder intending to submit to the Company a proposal for
inclusion in the Company's Proxy Statement and proxy for the 1999 Annual
Meeting must submit such proposal so that it is received by the Company no
later than April 1, 1999, and such proposal must otherwise comply with Rule
14a-8 under the Securities Exchange Act of 1934, as amended.
Pursuant to the Company's Bylaws, no business proposal will be
considered properly brought before an Annual Meeting by a stockholder, and no
nomination for the election of directors will be considered properly made at
an Annual Meeting by a stockholder, unless advance notice thereof and certain
information is provided to the Company in accordance with the Bylaws.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Stockholders calls for the
transaction of such other business as may properly come before the meeting,
the Board of Directors has no knowledge of any matters to be presented for
action by the stockholders other than as set forth above. The enclosed proxy
gives discretionary authority, however, in the event any additional matters
should be properly presented.
GERSHON WELTMAN
Secretary
July 29, 1998
11
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PERCEPTRONICS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 11, 1998
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and
appoints DR. GERSHON WELTMAN and THOMAS LUBACZEWSKI, and each of them, the
attorneys and proxies of the undersigned with full power of substitution to
appear and to vote all of the common shares of PERCEPTRONICS, INC. held of
record by the undersigned on July 20, 1998, at the Annual Meeting of
Stockholders to be held on September 11, 1998, or any adjournment thereof, as
indicated below and, in their discretion, on other matters which properly come
before the meeting.
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(1) ELECTION OF DIRECTORS:
/ / FOR all nominees listed below (except / / WITHHOLD AUTHORITY to vote for all nominees listed
as below
indicated to the contrary below)
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Dr. Gershon Weltman, Steven P. Corda, Dr. Amos Freedy, Michael L. Laney, Dr.
John Lyman, Robert Parker, Stanley B. Schneider
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
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(2) IN THEIR DISCRETION, ON OTHER MATTERS WHICH PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PERCEPTRONICS, INC. IF NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED WITH
AUTHORITY FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
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(CONTINUED FROM REVERSE SIDE)
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY IN THE ENVELOPE
PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE MEETING. THE
EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE
PRESENT AT THE MEETING.
IMPORTANT: Please sign
exactly as your name or
names appear on the share
certificates, and when
signing as an attorney,
executor, administrator,
trustee or guardian, give
your full title as such. If
the signatory is a
corporation, sign the full
corporate name by duly
authorized officer, or if a
partnership, sign in
partnership name by
authorized person.
Date: ________________, 1998
____________________________
Signature
____________________________
Signature
