<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the Quarterly period ended June 30,1999.
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from to .
--------- --------
Commission File Number 0-12728
INTEGRAL VISION, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2191935
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
38700 Grand River Avenue,
Farmington Hills, Michigan 48335
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 471-2660
Former name, former address and former fiscal year,
if changed since last report:
MEDAR, INC.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days. YES X NO
--- ---
The number of shares outstanding of the registrant's Common Stock, no par value,
stated value $.20 per share, as of July 31, 1999 was 9,024,901.
1
<PAGE> 2
Part 1. Financial Information
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
Integral Vision, Inc. and Subsidiary
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
---------------------------------------------
(Unaudited)
<S> <C> <C>
Assets
Current Assets
Cash $ 3,930 $ 566
Accounts receivable, less allowance of $400,000 2,372 2,838
Inventories 3,158 4,381
Costs and estimated earnings in excess of billings on 234 199
incomplete contracts
Current maturities of notes from sale of welding division 1,290
Other current assets 386 533
Current assets of welding division sold June 30, 1999 14,877
---------------------------------------------
Total Current Assets 11,370 23,394
Property, Plant and Equipment
Land and land improvements 363 363
Building and building improvements 3,732 3,732
Production and engineering equipment 2,654 2,605
Furniture and fixtures 868 847
Vehicles 200 254
Computer equipment 3,294 2,845
---------------------------------------------
11,111 10,646
Less accumulated depreciation 6,919 6,086
---------------------------------------------
4,192 4,560
Other Assets
Capitalized computer software development costs, net
of amortization 4,386 4,353
Patents, net of amortization 273 351
Notes from sale of welding division, less unamortized
discount and current maturities 4,797
Other 135 467
---------------------------------------------
9,591 5,171
Noncurrent assets of welding division sold June 30,
1999 6,688
---------------------------------------------
$ 25,153 $ 39,813
=============================================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
Consolidated Balance Sheets - Continued
Integral Vision, Inc. and Subsidiary
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
-----------------------------------------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 4,274 $ 5,559
Employee compensation 320 489
Purchase adjustment payable 3,753
Accrued and other liabilities 1,945 1,227
Deferred revenue and other credits 2,067
Current maturities of long term debt 13,478
-----------------------------------------------
Total Current Liabilities 12,359 20,753
Long-Term Debt, less current maturities 8,199
Stockholders' Equity
Common stock, without par value, stated value $.20
per share; 15,000,000 shares authorized;
9,024,901 shares issued and outstanding 1,805 1,805
Additional paid-in capital 31,187 31,187
Retained-earnings deficit (19,471) (21,628)
Notes receivable from officers (580) (580)
Accumulated translation adjustment (147) 77
-----------------------------------------------
Total Stockholders' Equity 12,794 10,861
-----------------------------------------------
$ 25,153 $ 39,813
===============================================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
Consolidated Statements of Operations
Integral Vision, Inc. and Subsidiary
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
1999 1998
---------------------------------------------
(Unaudited)
<S> <C> <C>
Net revenues $ 2,409 $ 3,565
Direct cost of goods sold 2,574 1,396
---------------------------------------------
Gross margin (165) 2,169
Other costs and expenses:
Marketing 682 512
General and administrative 216 343
Engineering and development:
Expenditures 1,099 1,079
Allocated to cost of sales and capitalized software (170) (233)
---------------------------------------------
929 846
---------------------------------------------
Total costs and expenses 1,827 1,701
---------------------------------------------
Operating income (loss) (1,992) 468
Interest expense 237 224
---------------------------------------------
Income (loss) from continuing operations before income taxes (2,229) 244
Provision (credit) for income taxes (700) 83
---------------------------------------------
Income (loss) from continuing operations (1,529) 161
Income (loss) from discontinued welding operations, less
applicable income taxes of $-0- and $-0- in the quarter ended
June 30, 1999 and 1998, respectively and $-0- and $(83) in
the six months ended June 30, 1999 and 1998, respectively 136 (59)
Gain on disposal of discontinued Welding division, less
applicable income taxes of $1,200 5,526
Extraordinary charge for early retirement of debt less
applicable income tax credit $200 (583)
---------------------------------------------
NET INCOME $ 3,550 $ 102
=============================================
Basic and diluted earnings per share:
Income (loss) from discontinuing operations $ (0.17) $ 0.02
Income (loss) from discontinued Welding operations 0.01 (0.01)
Gain on disposal of Welding division 0.61 -
Extraordinary charge (0.06) -
=============================================
Net income $ 0.39 $ 0.01
=============================================
Weighted average number of shares of common stock and common
stock equivalents, where applicable 9,025 9,046
=============================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
Consolidated Statements of Operations
Integral Vision, Inc. and Subsidiary
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1999 1998
---------------------------------------------
(Unaudited)
<S> <C> <C>
Net revenues $ 4,107 $ 5,159
Direct cost of goods sold 4,577 4,730
---------------------------------------------
Gross margin (470) 429
Other costs and expenses:
Marketing 1,251 1,150
General and administrative 543 709
Engineering and development:
Expenditures 2,279 2,658
Allocated to cost of sales and capitalized software (509) (984)
---------------------------------------------
1,770 1,674
Product restructuring and other charges - Note C 4,231
---------------------------------------------
Total costs and expenses 3,564 7,764
---------------------------------------------
Operating income (loss) (4,034) (7,335)
Interest expense 482 459
---------------------------------------------
Income (loss) from continuing operations before income taxes (4,516) (7,794)
Provision (credit) for income taxes (700) 83
---------------------------------------------
Income (loss) from continuing operations (3,816) (7,877)
Income (loss) from discontinued welding operations, less
applicable income taxes of $-0- and $-0- in the quarter ended
June 30, 1999 and 1998, respectively and $-0- and $(83) in
the six months ended June 30, 1999 and 1998 respectively 1,030 (1,950)
Gain on disposal of discontinued Welding division, less
applicable income taxes of $1,200 5,526
Extraordinary charge for early retirement of debt less
applicable income tax credit of $200 (583)
=============================================
NET INCOME (LOSS) $ 2,157 $ (9,827)
=============================================
Basic and diluted earnings per share:
Income (loss) from continuing operations $ (0.42) $ (0.87)
Income (loss) from discontinued Welding operations 0.11 (0.22)
Gain on disposal of Welding division 0.61 -
Extraordinary charge (0.06) -
=============================================
Net income (loss) $ 0.24 $ (1.09)
=============================================
Weighted average number of shares of common stock and common
stock equivalents, where applicable 9,025 9,025
=============================================
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
Condensed Consolidated Statements of Cash Flows
Integral Vision, Inc. and Subsidiary
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1999 1998
--------------------------------------------
(Unaudited)
<S> <C> <C>
Operating activities
Net income (loss) $ 2,157 $ (9,827)
Adjustments to reconcile income (loss) to net cash
provided by continuing operations:
Depreciation and amortization 813 981
Discontinued operations (1,030) 1,950
Gain on disposal of segment of business (5,526)
Extraordinary loss on extinguishment of debt 583
Restructuring charges 5,633
Changes in operating assets and liabilities, net of
effect of business sold 3,436 (1,767)
--------------------------------------------
Net cash (used) provided by continuing operations 433 (3,030)
Investing activities
Net book value of business assets sold 31,570 5,018
Notes receivable in connection with asset sale (6,087)
Purchase of property, plant and equipment, net of
disposals 174 126
Investment in capitalized computer software costs (606) (53)
Reduction in other assets 364 251
--------------------------------------------
25,415 5,342
Financing activities
Decrease in long term debt and current maturities (22,260) (2,640)
Effect of exchange rate changes on cash (224) 37
--------------------------------------------
Increase (decrease) in cash 3,364 (291)
Cash at beginning of period 566 831
============================================
Cash at end of period $ 3,930 $ 540
============================================
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Integral Vision, Inc. and Subsidiary
June 30, 1999
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended June 30, 1999
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant Company
and Subsidiaries' annual report on Form 10-K for the year ended December 31,
1998.
Note B - Sale of Welding Division
On June 30, 1999, the Company sold it's welding division for cash and certain
deferred payments. The accompanying financial statements reflect the transaction
as the disposal of a business segment. As such, comparative amounts in prior
period financial statements have been restated to exclude welding division
assets, liabilities and operations.
The deferred payments associated with the sale include subordinated notes and
other amounts. The notes bear interest at an agreed upon floating rate and are
payable quarterly over four years. For financial reporting purposes the notes
have been discounted to provide an interest rate appropriate to the risk
characteristics of the obligations. Other deferred payments are based on
achievement of certain sales levels during the period January 1, 1999 to
December 31, 2000. No financial statement recognition will be given these other
payments until earned.
Note C - Restructuring of Operations
Early in the second quarter of 1998, management completed an evaluation of
competitive conditions and product offerings in the vision and welding
divisions. A charge of $6,973,000 was recorded as of March 31, 1998 to give
effect to the impairment of assets identified in this review. The charge
consisted of $5,268,000 related to capitalized software development costs,
$1,402,000 related to inventory (included in direct costs of sales) and $303,000
of other accruals. $5,633,000 of this charge is included with continuing
operations and $1,340,000 is included with discontinued operations.
Note D - Comprehensive Income
Total comprehensive income (loss) was $3,762,000 and $90,000 for the three month
period ended June 30, 1999 and 1998 respectively, and $2,357,000 and
$(9,990,000) for the six month periods ended June 30, 1999 and 1998,
respectively.
7
<PAGE> 8
Note E - Inventories
Inventories are stated at the lower of first-in, first-out cost or market, and
the major classes of inventories at the dates indicated were as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
---------------------------------------
(In thousands)
<S> <C> <C>
Raw materials $ 1,873 $ 2,033
Work-in-process 766 593
Finished goods 519 1,755
---------------------------------------
$ 3,158 $ 4,381
=======================================
</TABLE>
Note F - Costs and Estimated Earnings in Excess of Billings on Incomplete
Contracts
Revenues on long-term contracts are recognized using the percentage of
completion method. The effects of changes to estimated total contract costs are
recognized in the period determined and losses, if any, are recognized fully
when identified. Costs incurred and earnings recognized in excess of amounts
billed are classified under current assets as costs and estimated earnings in
excess of billings on incomplete contracts. Long-term contracts include a
relatively high percentage of engineering costs and are generally less than one
year in duration.
Activity on long-term contracts is summarized as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------------------------------
(In thousands)
<S> <C> <C>
Contract costs to date $ 12 $ 12
Estimated contract earnings 340 305
--------------------------------------
352 317
Less billings to date 118 118
--------------------------------------
Costs and estimated earnings in excess of billings on
incomplete contracts $ 234 $ 199
======================================
</TABLE>
8
<PAGE> 9
Note G - Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------------------------------
(In thousands)
<S> <C> <C>
Deferred tax liabilities:
Deductible software development costs, net of amortization $ 1,315 $ 1,808
Tax over book depreciation 93 498
Percentage of completion 80 508
--------------------------------------
Total deferred tax liabilities 1,488 2,814
Deferred tax assets:
Net operating loss carry forwards 7,469 9,489
Credit carry forwards 1,326 1,097
Reserve for warranty 61 61
Other 219 339
--------------------------------------
Total deferred tax assets 9,075 10,986
Valuation allowance for deferred tax assets 7,587 8,172
--------------------------------------
Net deferred tax assets 1,488 2,814
--------------------------------------
Net deferred tax liabilities $ -0- $ -0-
======================================
</TABLE>
The reconciliation of income taxes computed at the U.S. federal statutory rates
to income tax expense for the six months ended June 30 is as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------------
(In thousands)
<S> <C> <C>
Tax at U.S. statutory rates $ 835 $ (3376)
Change in valuation allowance (585) 3326
Other 50 50
-------------------------------------
$ 300 $ -0-
=====================================
</TABLE>
9
<PAGE> 10
Note H - Earnings per Share
The following table sets forth the computation of basic and diluted earnings per
share.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1999 1998 1999 1998
(In thousands except share and per share amounts)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Numerator:
Net income (loss) for basic and
diluted earnings per share: $ 3,550 $ 102 $ 2,157 $ (9,827)
Denominator:
Denominator for basic earnings
per share - weighted-
average shares 9,025,000 9,025,000 9,025,000 9,025,000
------------------- ------------------ ----------------- --------------------
Basic and diluted income (loss)
per share $ .39 $ .01 $ .24 $ (1.09)
============================================================================
</TABLE>
Warrants to purchase common stock and employee stock options outstanding during
the period were not included in the computation of diluted income per share
because the inclusion of these options were not material.
For additional disclosures regarding stock options and warrants see Note I.
Note I - Stock Options and Warrants
At June 30, 1999, there were options outstanding to purchase 564,800 shares of
common stock at prices ranging from $1.75 to $9.25 per share and warrants
outstanding to purchase 1,400,000 shares at $6.86 per share.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO JUNE 30, 1998
Net revenues from continuing operations decreased $1.2 million to $2.4 million
in the second quarter of 1999 from $3.6 million in the second quarter of 1998.
Net revenues in total, which included $1.5 million of revenues from the sale of
patent technology in the second quarter of 1998 were otherwise comparable in
total between the periods. Revenues from sales of disc inspection systems
decreased $100,000 and revenues from sales of software and other products were
up $400,000, exclusive of the $1.5 million patent sales revenue.
Costs of goods sold increased as a percentage of sales to 107% from 39% in the
second quarter of 1998. The negative gross margin in 1999 results from material
costs in relation to sales prices of products and sales at levels too low to
support levels of fixed overhead and other fixed costs during the period. In
1998, gross margins were positively effected by the sale of patent technology
which had no recorded costs.
Costs and expenses are comparable between the periods with some increased costs
in marketing as the Company continues to support the expansion of sales of
existing products and entries into new markets with new or existing products.
Savings in general and administrative were achieved during the quarter as a
continuation of cost reductions generally realized during late 1998 and early
1999.
On June 30, 1999, the Company sold its welding division and realized an after
tax gain of $5.7 million. The cash proceeds of the sale were used on that day,
in part, to repay outstanding indebtedness of the Company. As charges were
incurred in relation to the early repayment of certain of the indebtedness, in
conformity with accounting principles these charges were recognized as
extraordinary charges, net of tax.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO JUNE 30, 1998
Net revenues from continuing operations decreased by $1.1 million to $4.1
million in the period of six months ended June 30, 1999 from $5.2 million in the
period of six months ended June 30, 1998. Net revenues which included $1.5
million of revenues from the sale of patent technology in 1998 were other wise
up $400,000 between the periods. Revenues from sales of disc inspection systems
increased $100,000 and revenues from sales of software and other products were
up $300,000 exclusive of the $1.5 million patent sales revenue.
Costs of goods sold increased as a percentage of sales to 111% from 92% in the
period of six months ended June 30, 1998. The negative gross margin in 1999
results from high material costs in relation to sales prices of products and
sales levels too low to support levels of fixed overhead and other fixed costs
during the period. In 1998, gross margins were positively effected by the sale
of patent technology that had no recorded costs.
Costs and expenses are comparable between the periods with a significant
decrease in the levels of expenditures for engineering and development expenses
reflecting staff reductions implemented late in the first quarter of 1998.
On June 30, 1999, the Company sold its welding division and realized an after
tax gain of $5.7 million. The cash proceeds of the sale were used on that day,
in part, to repay outstanding indebtedness of the Company. As charges were
incurred in relation to the early repayment of certain indebtedness, in
conformity with accounting principals these charges were recognized as
extraordinary charges, net of tax.
11
<PAGE> 12
Liquidity and Capital Resources
The Company used the cash proceeds from the sale of the welding division to pay
all funded indebtedness on June 30, 1999. The sale transaction requires that the
Company re-pay sale proceeds to the buyer to the extent that certain assets were
not maintained at agreed upon levels at the date of the closing of the
transaction. This asset purchase adjustment is estimated to be $3.75 million and
has been reflected as a current liability at June 30, 1999. Payment of the
liability is to be made no later than September 29, 1999.
Management is currently negotiating with a bank for financing that when combined
with other resources is expected to be sufficient to liquidate this liability.
It is expected that available borrowing capacity under the proposed line not
used to fund the asset purchase adjustment, the receipt of deferred payments
under the asset purchase agreement and operating cash flow will be sufficient to
support cash flow needs over the next twelve months.
Product Restructuring Charges
During the first quarter of 1998 in response to the financial conditions that
arose due to heavy investments necessary to complete certain projects under
development and unexpected low levels of orders and sales, management terminated
15% of the Company's employees with combined salaries totaling 20% of total
compensation. As these terminations severely constrained resources available for
product support, it was quickly followed by an extensive review of product
offerings. This review determined that the Company would concentrate its efforts
going forward towards products for the inspection of DVD discs, products based
on VisionBlox technology and certain higher margin and better selling welding
products. Other products including those related to compact disc production and
certain other products that were selling poorly or at low margins or which were
no longer supportable in the software configurations in use were identified for
phase out or abandonment. These products had recorded software development costs
totaling $5.3 million which was charged off to operations. In addition, reserves
totaling $1.4 million to reduce the cost of inventory related to these products
to estimated realizable value were established. Finally, in connection with a
decision to offer for sale one of the Company's buildings, a reserve in the
amount of $300,000 to cover the costs to carry the building until the estimated
sale date was established.
The charges related to inventory ($1.4 million) were recorded as part of direct
cost of sales and the charges related to software development costs and the
building reserve (totaling $5.6 million) were reflected as product restructuring
and other charges with other costs and expenses in the consolidated statements
of operations in the first quarter of 1998. $5.7 million of this charge is
included with continuing operations and $1.3 million is included with
discontinued operations.
12
<PAGE> 13
Impact of Year 2000
Management has determined that the Company will be required to modify or replace
certain portions of its internal software and hardware so that those systems
will properly utilize dates beyond December 31, 1999. Management presently
believes that with modifications or replacements of existing software and
certain hardware, the Year 2000 issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 issue could have a material impact on the operations of the Company.
For its own information technology, management expects to fully complete
software replacement, including testing and implementation, no later than
September 30, 1999. Once testing is complete, the operating equipment will be
ready for immediate use. The testing and implementation of all software is
expected to be fully completed by September 30, 1999.
The Company will utilize both internal and external resources to reprogram or
replace, test and implement the software and operating equipment for Year 2000
modifications. The total cost of the Year 2000 project is estimated at $400,000,
and is being funded through operating cash flows. To date, the Company has
incurred approximately $350,000 ($50,000 expensed and $300,000 capitalized for
new systems and equipment) related to both its Year 2000 project and ordinary
business expenditures that also addresses the Year 2000 issue.
Management believes it has an effective program in place to resolve the Year
2000 issue in a timely manner. As noted above, the Company has not yet completed
all necessary phases of the Year 2000 program. In the event that the Company
does not complete any additional phases, the Company could be unable to
effectively manufacture and ship certain products. In addition, disruptions in
the economy generally resulting from Year 2000 issues could also materially
adversely affect the Company. The amount of potential liability and lost revenue
cannot be reasonably estimated at this time.
Quantitative and Qualitative Disclosures about Market Risks
The Company is exposed to market risk stemming from changes in foreign exchange
rates, interest rates and prices of inventory purchased for assembly into
finished products. Changes in these factors could cause fluctuations in earnings
and cash flows. In the normal course of business, exposure to interest rates is
managed by fixing the interest rates on the Company's long term debt whenever
possible. The Company does not generally enter into long-term purchase contracts
but instead purchases inventory to fill specific sales contracts thereby
minimizing risks with respect to inventory price fluctuations.
Foreign Exchange Rates - The Company's location outside the US is in the United
Kingdom. This is a sales office with net non-current assets that are not
significant. On a consolidated basis the Company denominates sales in the
following currencies:
- Japanese Yen
- Pound Sterling
- French Francs
In Management's opinion, as the currencies of Western Europe and the UK are
generally stable; there is no significant exposure to losses due to currency
fluctuations. However, because the Yen has not been stable over the past several
years, the Company does enter into forward sales contracts equal to the future
amount of the Yen to be received at the time the order is accepted. These
hedging transactions are on an order by order basis and at no time are they
speculative in nature. At June 30, 1999, the fair market value of market risk
sensitive instruments or potential for near-term losses of earnings or cash
flows for such instruments was not material.
13
<PAGE> 14
PART II
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
The Annual Meeting of the Company was held on June 28, 1999. The matters voted
upon and the results of the vote follow:
1. Approve the sale of the assets of the welding division
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
- ----------------------------- ----------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C>
5,280,912 62,360 12,700 2,951,276
</TABLE>
2. Approve change of Company's name to Integral Vision, Inc.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
- ----------------------------- ----------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C>
5,277,230 57,530 21,212 2,951,276
</TABLE>
3. Authorize adjournment of meeting in certain circumstances
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
- ----------------------------- ----------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C>
7,695,346 297,547 314,355 0
</TABLE>
4. Election of Directors
<TABLE>
<CAPTION>
FOR ABSTAIN
-------------------------------------- -------------------------------------
<S> <C> <C>
Max A. Coon 8,214,650 92,598
Richard R. Current 8,223,600 83,648
Charles J. Drake 8,223,040 84,208
Stephen Sharf 8,223,240 93,598
Vincent Shunsky 8,213,650 93,598
William B. Wallace 8,223,650 83,598
</TABLE>
5. Approve stock option plan for issuance of up to 500,000 shares for option
granted
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES
- ----------------------------- ----------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C>
4,817,903 459,377 78,692 2,951,276
</TABLE>
6. Other business (None)
14
<PAGE> 15
ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ----------------------------------
<S> <C>
3.1 Articles of Incorporation, as amended.
3.2 Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the
registrant's Form 10-K for the year ended December 31, 1994, SEC file
0-12728, and incorporated herein by reference).
4.1 Note and Warrant Purchase Agreement (filed as Exhibit 4.1 to the
registrants Form 8-K dated July 15, 1997, SEC file 0-12728, and
incorporated herein by reference).
4.3 Form of Medar, Inc. Common Stock Purchase Warrant Certificate (filed as
Exhibit 4.3 to registrants Form 8-K dated July 15, 1997, SEC file
0-12728, and incorporated herein by reference).
10.1 Amendment to Medar, Inc. Incentive Stock Option Plan dated May 10, 1993
(filed as Exhibit 10.3 to the registrant's Form 10-K for the year ended
December 31, 1993, SEC File 0-12728, and incorporated herein by
reference).
10.2 Non-qualified Stock Option Plan (filed as Exhibit 10.3 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.3 Medar, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
file 0-12728, and incorporated herein by reference).
10.4 Form of Confidentiality and Non-Compete Agreement Between the Registrant
and its Employees (filed as Exhibit 10.4 to the registrant's Form 10-K
for the year ended December 31, 1992, SEC File 0-12728, and incorporated
herein by reference).
10.5 Integral Vision, Inc. 1999 Employee Stock Option Plan
10.16* Patent License Agreement dated October 4, 1995 by and between Medar,
Inc. and Square D Company (filed as Exhibit 10.24 to the registrant's
Form 10-Q for the quarter ended September 30, 1995, SEC File 0-12728,
and incorporated herein by reference).
10.32 Asset Sale Purchase Agreement between Medar, Inc. and Weltronic (filed
as exhibit to the registrants Preliminary Schedule 14A - Rule 14A-101
dated May 6, 1999 and incorporated herein by reference.)
27 Financial Data Schedule
(b) Reports on Form 8-K. On May 3, 1999, a Form 8-K was filed to report
event under Item 5. No financial statements were included in the report.
*The Company has been granted confidential treatment with respect to
certain portions of this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
/S/CHARLES J. DRAKE
8/12/99
- ------------------------------------------------------------------------
Charles J. Drake
President & Chairman of the Board
Integral Vision, Inc.
(Principal Executive Officer)
/S/RICHARD R. CURRENT
8/12/99
- ------------------------------------------------------------------------
Richard R. Current
Executive Vice President & Chief Financial Officer
Integral Vision, Inc.
(Principal Financial & Accounting Officer)
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
3.1 Articles of Incorporation, as amended.
3.2 Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the
registrant's Form 10-K for the year ended December 31, 1994, SEC file
0-12728, and incorporated herein by reference).
4.1 Note and Warrant Purchase Agreement (filed as Exhibit 4.1 to the
registrants Form 8-K dated July 15, 1997, SEC file 0-12728, and
incorporated herein by reference).
4.3 Form of Medar, Inc. Common Stock Purchase Warrant Certificate (filed as
Exhibit 4.3 to registrants Form 8-K dated July 15, 1997, SEC file
0-12728, and incorporated herein by reference).
10.1 Amendment to Medar, Inc. Incentive Stock Option Plan dated May 10, 1993
(filed as Exhibit 10.3 to the registrant's Form 10-K for the year ended
December 31, 1993, SEC File 0-12728, and incorporated herein by
reference).
10.2 Non-qualified Stock Option Plan (filed as Exhibit 10.3 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.3 Medar, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
file 0-12728, and incorporated herein by reference).
10.4 Form of Confidentiality and Non-Compete Agreement Between the Registrant
and its Employees (filed as Exhibit 10.4 to the registrant's Form 10-K
for the year ended December 31, 1992, SEC File 0-12728, and incorporated
herein by reference).
10.5 Integral Vision, Inc. 1999 Employee Stock Option Plan
10.16* Patent License Agreement dated October 4, 1995 by and between Medar,
Inc. and Square D Company (filed as Exhibit 10.24 to the registrant's
Form 10-Q for the quarter ended September 30, 1995, SEC File 0-12728,
and incorporated herein by reference).
10.32 Asset Sale Purchase Agreement between Medar, Inc. and Weltronic (filed
as exhibit to the registrants Preliminary Schedule 14A - Rule 14A-101
dated May 6, 1999 and incorporated herein by reference.)
27 Financial Data Schedule
(b) Reports on Form 8-K. On May 3, 1999, a Form 8-K was filed to report
event under Item 5. No financial statements were included in the report.
*The Company has been granted confidential treatment with respect to
certain portions of this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
</TABLE>
15
<PAGE> 1
Exhibit Form 10K
Integral Vision, Inc.
Quarter Ended June 30,1999
Commission File number 0-12728
3.1 Articles of Incorporation, as amended
<PAGE> 2
C&S 510 (10/98)
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES - CORPORATION, SECURITIES
AND LAND DEVELOPMENT BUREAU
- --------------------------------------------------------------------------------
Date Received (FOR BUREAU USE ONLY)
Mar 27, 1996 This document is effective on the date filed,
unless a subsequent effective date within
90 days after received date is stated in the
document.
================================================================================
Name
Warren, Cameron, Faust & Asciutto P.C. EFFECTIVE DATE:
- --------------------------------------
Address
P.O. Box 26067
- --------------------------------------
City State Zip Code
Lansing MI 48909
================================================================================
Document will be returned to the name and
address you enter above. If left blank
document will be mailed to the registered office.
RESTATED ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT CORPORATIONS
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, the undersigned
corporation executes the following Articles:
- --------------------------------------------------------------------------------
1. The present name of the corporation is: Medar Inc.
2. The identification number assigned by the Bureau is: 105-593
-----------------------
3. All former names of the corporation are: New Medar, Inc.
4. The date of filing the original Articles of Incorporation was: January 6,
1978
- ------------------------------------------------------------------------------
The following Restated Articles of Incorporation supersede the Articles
of Incorporation as amended and shall be the Articles of Incorporation
for the corporation:
ARTICLE I
- --------------------------------------------------------------------------------
The name of the corporation is: Medar, Inc.
- --------------------------------------------------------------------------------
ARTICLE II
- --------------------------------------------------------------------------------
The purpose or purposes for which the corporation is formed are:
To engage in any activity within the purposes for which corporations may be
organized under the Business Corporation Act of Michigan.
- --------------------------------------------------------------------------------
<PAGE> 3
5. COMPLETE SECTION (a) IF THE RESTATED ARTICLES WERE ADOPTED BY THE UNANIMOUS
CONSENT OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF
DIRECTORS; OTHERWISE, COMPLETE SECTION (b). DO NOT COMPLETE BOTH.
- --------------------------------------------------------------------------------
a. These Restated Articles of Incorporation were duly adopted on the
--- day of
Signed this day of , 19 .
--------------------------- --------------------------
--------------------------- --------------------------
(Signatures of Incorporators; Type or Print Name Under Each Signature)
- --------------------------------------------------------------------------------
b. X These Restated Articles of Incorporation were duly adopted on the
--- 27th day of March, _1999___ in accordance with
the provisions of Section 642 of the Act and: (check one of the
following)
/X/ were duly adopted by the Board of Directors without a vote
of the shareholders. These Restated Articles of
Incorporation only restate and integrate and do not further
amend the provisions of the Articles of Incorporation as
heretofore amended and there is no material discrepancy
between those provisions and the provisions of these
Restated Articles.
/ / were duly adopted by the shareholders. The necessary number
of shares as required by statute were voted in favor of
these Restated Articles.
/ / were duly adopted by the written consent of the shareholders
having not less than the minimum number of votes required by
statute in accordance with Section 407(1) of the Act.
Written notice to shareholders who have not consented in
writing has been given. (Note: Written consent by less than
all of the shareholders is permitted only if such provision
appears in the Articles of Incorporation.)
/ / were duly adopted by the written consent of all the
shareholders entitled to vote in accordance with Section
407(2) of the Act.
Signed this 27th day of March, 1996
By: Charles J. Drake
----------------------------------------------------------
(Signature of an authorized officer or agent)
----------------------------------------------------------
(Type or Print Name)
<PAGE> 4
ARTICLE III
- --------------------------------------------------------------------------------
The total authorized shares:
Common shares 15,000,000
------------------------
Preferred shares 400,000
---------------------
3. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows: See Attached Addendum 1
- --------------------------------------------------------------------------------
ARTICLE IV
- --------------------------------------------------------------------------------
1. The address of the registered office is:
38700 Grand River Avenue, Farmington Hill , Michigan 48335
-------------------------------------------
(Street Address) (City) (ZIP Code)
2. The mailing address of the registered office, if different than above:
, Michigan
-------------------------------------------------- ------------
(Street Address or P.O. Box) (City) (ZIP Code)
3. The name of the resident agent is: Max A. Coon
-----------------------------------
- --------------------------------------------------------------------------------
ARTICLE V (OPTIONAL. DELETE IF NOT APPLICABLE.)
- --------------------------------------------------------------------------------
Any action required or permitted by the Act to be taken at an annual or special
meeting of shareholders may be taken without a meeting, without prior notice,
and without a vote, if consents in writing, setting forth the action so taken,
are signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote on the action were present and
voted. The written consents shall bear the date of signature of each shareholder
who signs the consent. No written consents shall be effective to take the
corporate action referred to unless, within 60 days after the record date for
determining shareholders entitled to express consent to or to dissent from a
proposal without a meeting, written consents dated not more than 10 days before
the record date and signed by a sufficient number of shareholders to take the
action are delivered to the corporation. Delivery shall be to the corporation's
registered office, its principal place of business, or an officer or agent of
the corporation having custody of the minutes of the proceedings of its
shareholders. Delivery made to a corporation's registered office shall be by
hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who would have
been entitled to notice of the shareholder meeting if the action had been taken
at a meeting and who have not consented in writing.
- --------------------------------------------------------------------------------
ARTICLE VII (ADDITIONAL PROVISIONS, IF ANY, MAY BE INSERTED HERE; ATTACH
ADDITIONAL PAGES IF NEEDED.)
- --------------------------------------------------------------------------------
See attached addendum 2
- --------------------------------------------------------------------------------
<PAGE> 5
Name of person or organization Preparer's name and business
remitting fees: telephone number:
------------------------------ ------------------------------
( )
------------------------------ ------------------------------
- --------------------------------------------------------------------------------
INFORMATION AND INSTRUCTIONS
1. The Articles of Incorporation cannot be restated until this form, or a
comparable document, is submitted.
2. Submit one original of this document. Upon filing, the document will be
added to the records of the Corporation, Securities and Land Development
Bureau. The original will be returned to your registered office address,
unless you enter a different address in the box on the front of this
document.
Since this document will be maintained on optical disk media, it is
important that the filing be legible. Documents with poor black and white
contrast, or otherwise illegible, will be rejected.
3. This document is to be used pursuant to sections 641 through 643 of Act
284, P.A. of 1972, for the purpose of restating the Articles of
Incorporation of a domestic profit corporation. Restated articles of
incorporation are an integration into a single instrument of the current
provisions of the corporation's Articles of Incorporation, along with any
desired amendments to those articles.
4. Item 2 - Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 5 - Restated Articles of Incorporation submitted before the first
meeting of the Board of Directors may be adopted by all of the
incorporators by completing Item 5(a). Restated Articles of Incorporation
which do not amend the Articles of Incorporation may be adopted by the
Board of Directors without a vote of the shareholders by completing Item
5(b). Restated Articles of Incorporation which amend the Articles of
Incorporation require adoption by the shareholders by completing Item 5(b).
6. The duration of the corporation should be stated in the restated Articles
of Incorporation only if it is not perpetual.
7. For nonprofit charitable corporations, if restated articles change the term
of existence to other than perpetual, Attorney General Consent should be
obtained at the time of dissolution.
8. This document is effective on the date endorsed "filed" by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated.
9. This document must be signed by: (COMPLETE Item 5(a) or 5(b), BUT NOT BOTH)
Item 5(a): must be completed and signed by a majority of the incorporators.
Item 5(b): must be completed and signed by an authorized officer or agent.
10. FEES: Make remittance payable to the State of Michigan. Include corporation
name and identification number on check or money order.
<TABLE>
<S> <C>
NONREFUNDABLE FEE ....................................................................................... $10.00
TOTAL MINIMUM FEE ....................................................................................... $10.00
ADDITIONAL FEES DUE FOR INCREASED AUTHORIZED SHARES ARE:
each additional 20,000 authorized shares or portion thereof ............................................ $30.00
maximum fee per filing for first 10,000,000 authorized shares .......................................... $5,000.00
each additional 20,000 authorized shares or portion thereof in excess of 10,000,000 shares.............. $30.00
maximum fee per filing for authorized shares in excess of 10,000,000 shares............................. $200,000.00
</TABLE>
<TABLE>
<CAPTION>
To submit by mail: To submit in person:
<S> <C>
Michigan Department of Consumer & Industry Services 6546 Mercantile Way
Corporation, Securities & Land Development Bureau Lansing, MI 48911
Corporation Division Telephone: (517) 334-6302
7150 Harris Drive
P.O. Box 30054 Fees may be paid by VISA or Mastercard when
Lansing, Michigan 48909 delivered in person to our office.
</TABLE>
- --------------------------------------------------------------------------------
To submit electronically: (517) 334-8048
*To use this service complete a MICH-ELF application to provide your
VISA or Mastercard number. Include your assigned Filer number on your
transmission. To obtain an application for a filer number, contact
(517) 334-6327 or visit our WEB site at http://www.cis.state.mi.us/corp/.
- --------------------------------------------------------------------------------
<PAGE> 6
ADDENDUM 1 ATTACHED TO AND MADE A PART OF CERTIFICATE OF
AMENDMENT TO THE ARTICLES OF INCORPORATION OF MEDAR, INC.
(a) Shares of preferred stock may be issued from time to time in one or
more series, each such series to have such distinctive designation or title and
to include such number of shares as may be fixed and determined by the Board of
Directors prior to the issuance of any shares thereof. Each such series may
differ from every other series already outstanding, as may be determined from
time to time by the Board of Directors prior to the issuance of any shares
thereof, in any or all of the following respects:
(i) The rate of dividend which the preferred stock of any such series
shall be entitled to receive and whether such series shall be entitled to
receive a dividend and whether such dividend shall be cumulative or
non-cumulative.
(ii) The amount per share which the preferred stock of any such series
shall be entitled to receive in case of the redemption thereof or in case of a
voluntary liquidation distribution or sale of assets, dissolution or winding up
of the Corporation, or in case of the involuntary liquidation, distribution or
sale of assets, dissolution or winding up of the Corporation;
(iii) The relative rights, if any, of the holders of preferred stock
of any such series to vote the same, and the extent, terms and conditions of
such voting rights.
(iv) The right, if any, of the holders of preferred stock of any such
series to convert the same into other classes of stock, and the terms and
conditions of such conversion.
(v) The terms of the sinking fund or redemption of purchase account,
if any, to be provided for the preferred stock of any such series.
The description and terms of the preferred stock of each series shall be
fixed and determined by the Board of Directors by appropriate resolution or
resolutions at or prior to the time of the authorization of the issue of the
original shares of each such series, shall be summarized in the certificates
therefor, and a Certificate containing the resolution of the Board establishing
and designating the series and prescribing the relative rights and preferences
thereof shall be filed with the Corporations and Securities Bureau, Michigan
Department of commerce, and when filed shall constitute an amendment to the
Articles of Incorporation. All shares of preferred stock shall be of equal rank,
and shall be identical in all respects except in respect of the particulars that
may be fixed by the Board of Directors.
<PAGE> 7
ADDENDUM 2 ATTACHED TO AND MADE A PART OF CERTIFICATE OF
AMENDMENT TO THE ARTICLES OF INCORPORATION OF MEDAR, INC.
To the full extent that the laws of the State of Michigan, as they exist on
the date hereof or as they may hereafter be amended, permit the limitation or
elimination of the liability of Directors or Officers, no Director or Officer of
the Corporation shall be personally liable to the Corporation or its
stockholders for damages for breach of any duty owed to the Corporation or its
stockholders. Neither the amendment or repeal of this Article nor the adoption
of any provision of the Articles of Incorporation which is inconsistent with
this Article shall apply to or have any effect on the liability or alleged
liability of any Director or Officer of the Corporation for or with respect to
any act or omission of such Director or Officer occurring prior to such
amendment, repeal or adoption.
<PAGE> 8
C&S 515 (10/98)
- --------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES - CORPORATION, SECURITIES
AND LAND DEVELOPMENT BUREAU
- --------------------------------------------------------------------------------
Date Received (FOR BUREAU USE ONLY)
This document is effective on the date filed,
unless a subsequent effective date within
90 days after received date is stated in the
document.
================================================================================
Name
Warren Cameron Faust & Asciutto, P.C. (J.L. Cameron) EFFECTIVE DATE:
- -------------------------------------------------------
Address
P.O. Box 26067
- -------------------------------------------------------
City State Zip Code
Lansing MI 48909
================================================================================
Document will be returned to the name and
address you enter above. If left blank
document will be mailed to the registered office.
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC PROFIT AND NONPROFIT CORPORATIONS
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:
- --------------------------------------------------------------------------------
1. The present name of the corporation is: Medar, Inc.
2. The identification number assigned by the Bureau is: 105-593
----------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. Article I of the Articles of Incorporation is hereby amended to read
as follows:
The name of the corporation is: Integral Vision, Inc.
- --------------------------------------------------------------------------------
<PAGE> 9
COMPLETE ONLY ONE OF THE FOLLOWING:
- --------------------------------------------------------------------------------
4. (FOR AMENDMENTS ADOPTED BY UNANIMOUS CONSENT OF INCORPORATORS BEFORE THE
FIRST MEETING OF THE BOARD OF DIRECTORS OR TRUSTEES.)
The foregoing amendment to the Articles of Incorporation were duly adopted on
the day of , 19 , in accordance with the provisions of the Act by the
unanimous consent of the incorporator(s) before the first meeting of the Board
of Directors or Trustees.
Signed this day of , 19
- ------------------------------------ ------------------------------------
(Signature) (Signature)
- ------------------------------------ ------------------------------------
(Type or Print Name) (Type or Print Name)
- ------------------------------------ ------------------------------------
(Signature) (Signature)
- ------------------------------------ ------------------------------------
(Type or Print Name) (Type or Print Name)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. (FOR PROFIT AND NONPROFIT CORPORATIONS WHOSE ARTICLES STATE THE
CORPORATION IS ORGANIZED ON A STOCK OR ON A MEMBERSHIP BASIS.)
The foregoing amendment to the Articles of Incorporation was duly adopted on the
28th day of June, 1999, by the shareholders if a profit corporation, or by the
shareholders or members if a nonprofit corporation (check one of the following)
X at a meeting the necessary votes were cast in favor of the amendment.
___ by written consent of the shareholders or members having not less
than the minimum number of votes required by statute in accordance with
Section 407(1) and (2) of the Act if a nonprofit corporation, or Section
407(1) of the Act if a profit corporation. Written notice to
shareholders or members who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders or
members is permitted only if such provision appears in the Articles of
Incorporation.)
___ by written consent of all the shareholders or members entitled to vote
in accordance with section 407(3) of the Act if a nonprofit corporation,
or Section 407(2) of the Act if a profit corporation.
___ by the board of a profit corporation pursuant to section 611(2).
- ------------------------------------ ------------------------------------
Profit Corporations Nonprofit Corporations
Signed this 29th day of June, 1999 Signed this day of , 19
By By
---------------------------------- ----------------------------------
(Signature of an authorized (Signature of President,
officer or agent) Vice-President, Chairperson or
Vice-Chairperson)
Richard R. Current, Vice President
- ------------------------------------ ------------------------------------
(Type or Print Name) (Type or Print Name)
(Type or Print Title)
- --------------------------------------------------------------------------------
<PAGE> 10
- --------------------------------------------------------------------------------
6. (FOR A NONPROFIT CORPORATION WHOSE ARTICLES STATE THE CORPORATION IS
ORGANIZED ON A DIRECTORSHIP BASIS.)
The foregoing amendment to the Articles of Incorporation was duly adopted on the
day of , 19 , by the directors of a nonprofit corporation whose
articles of incorporation state it is organized on a directorship basis (check
one of the following)
at a meeting the necessary votes were cast in favor of the amendment.
---
by written consent of all directors pursuant to Section 525 of the Act.
---
Signed this day of , 19
By
-------------------------------------------
(Signature of President, Vice-President,
Chairperson or Vice-Chairperson)
-------------------------------------------------------
(Type or Print Name) (Type or Print Title)
- --------------------------------------------------------------------------------
<PAGE> 11
C&S 515
Name of Person or Organization Preparer's Name and Business
Remitting Fees: Telephone Number:
Warren Cameron Faust & Asciutto, P.C. Josephine L. Cameron
(517) 349-8600
- --------------------------------------------------------------------------------
INFORMATION AND INSTRUCTIONS
1. The amendment cannot be filed until this form, or a comparable document, is
submitted.
2. Submit one original of this document. Upon filing, the document will be
added to the records of the Corporation, Securities and Land Development
Bureau. The original will be returned to your registered office address,
unless you enter a different address in the box on the front of this
document.
Since this document will be maintained on optical disk media, it is
important that the filing be legible. Documents with poor black and white
contrast, or otherwise illegible, will be rejected.
3. This Certificate is to be used pursuant to the provisions of section 631 of
Act 284, P.A. of 1972 or Act 162, P.A. of 1982, for the purpose of amending
the Articles of Incorporation of a domestic profit corporation or nonprofit
corporation. Do not use this form for restated articles.
4. Item 2 - Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 3 - The article(s) being amended must be set forth in its entirety.
However, if the article being amended is divided into separately
identifiable sections, only the sections being amended need be included.
6. For nonprofit charitable corporations, if an amendment changes the term of
existence to other than perpetual, Attorney General Consent should be
obtained at the time of dissolution.
7. This document is effective on the date endorsed "filed" by the Bureau. A
later effective date, no more than 90 days after the date of delivery,
may be stated as an additional article.
8. Signatures:
PROFIT CORPORATIONS:
1) Item 4 must be completed and signed by at least a majority of the
Incorporators listed in the Articles of Incorporation.
2) Item 5 must be completed and signed by an authorized officer or
agent of the corporation.
NONPROFIT CORPORATIONS:
1) Item 4 must be completed and signed by all of the incorporators
listed in the Articles of Incorporation.
2) Item 5 or 6 must be completed and signed by either the president,
vice-president, chairperson or vice-chairperson.
9. NONREFUNDABLE FEE: Make remittance payable to the State of Michigan. Include
corporation name and identification number on check or money
order.................................................................$10.00
ADDITIONAL FEES DUE FOR INCREASED AUTHORIZED SHARES OF PROFIT CORPORATIONS
ARE:
each additional 20,000 authorized shares or portion thereof...........$30.00
maximum fee per filing for first 10,000,000 authorized shares......$5,000.00
each additional 20,000 authorized shares or portion thereof in excess of
10,000,000 shares.....................................................$30.00
maximum fee per filing for authorized shares in excess of 10,000,000
shares.......................................................... $200,000.00
----------------------------------------------------------------------------
TO SUBMIT BY MAIL: TO SUBMIT IN PERSON:
Michigan Department of Consumer & 6546 Mercantile Way
Industry Services Corporation, Lansing, MI 48911
Securities & Land Development Bureau Telephone: (517) 334-6302
Corporation Division
7150 Harris Drive
P.O. Box 30054 Fees may be paid by VISA or
Lansing, Michigan 48909 Mastercard when delivered in
person to our office.
----------------------------------------------------------------------------
To submit electronically: (517) 334-8048
*To use this service complete a MICH-ELF application to provide your VISA or
Mastercard number. Include your assigned Filer number on your transmission.
To obtain an application for a filer number, contact (517) 334-6327 or
visit our WEB site at http://www.cis.state.mi.us/corp/.
----------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 10.5
INTEGRAL VISION, INC.
1999 EMPLOYEE STOCK OPTION PLAN
1. Purpose. This Employee Stock Option Plan (the "Plan") is intended to
further the growth and development of INTEGRAL VISION, INC. (the "Company") by
affording an opportunity to eligible officers and key employees of the Company
and its subsidiaries, as well as nonemployee directors, consultants or advisors,
who are in a position to contribute materially to the prosperity of the Company,
to purchase shares of its common stock. It is further intended that options
issued pursuant to the Plan may be either nonqualified stock options or
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Stock Offering. The Board of Directors of the Company are authorized
to offer and sell stock pursuant to this Plan. The aggregate amount of stock
which may be sold and delivered under the Plan, against payment therefor, shall
not exceed five hundred thousand (500,000) shares. In the event that any
outstanding option under the Plan expires or is terminated for any reason prior
to the end of the period during which options may be granted, the shares of
common stock allocable to the unexercised or canceled portion of such Plan may
again be subjected to an option under the Plan.
3. Designation of Participants and Administration of Plan. The Board of
Directors, or not less than two (2) Board Members appointed from time to time by
the Board of Directors, shall act as a Committee to administer the Plan. The
employees eligible to participate in the Plan shall be the officers and any
other key employees of the Company and its subsidiaries as the Board of
Directors may designate. Directors who are not also employees of the Company,
consultants and advisors are not eligible to receive incentive stock options,
but may be granted nonqualified stock options.
4. Unauthorized Employees. In no event shall an incentive stock option
be granted to any individual who, immediately before such option is granted,
owns (as defined in Section 422 and 425(d) of the Internal Revenue Code of 1986,
as amended) stock possessing more than ten percent (10%) of the total combined
voting power or value of all classes of stock of the Company or of its parent or
subsidiary corporation, unless the option price to such individual is no less
than 110% of the fair market value of the stock at the time the option is
granted and such option by its terms is not exercisable after the expiration of
five years from the date such option is granted.
5. Effective Date of Plan. The Plan is effective on the date of
ratification by a vote of the holders of a majority of the common stock of the
Company after adoption by the Board of Directors. The Company shall not be
required to issue any stock hereunder, however, until the approvals required by
the proper public authorities have been obtained, if any, and the Board of
Directors shall have been advised by counsel for the Company that all other
applicable legal requirements have been complied with.
<PAGE> 2
6. Termination of Plan. The Plan shall remain in effect until and shall
terminate upon the expiration of ten (10) years from the date the Plan is
adopted. The Plan may be terminated at an earlier date by action of the Board of
Directors. Termination of the Plan shall not affect the rights of beneficiaries
under options granted to purchase common stock under the Plan prior to
termination or to complete payment for and to receive any pledged shares, and
all such options shall continue in force and operation after termination of the
Plan, except as they may be terminated in accordance with the terms of the Plan.
The Board of Directors of the Company may from time to time suspend or
discontinue the Plan with respect to any shares as to which options have not
been granted.
7. Offering to Designated Beneficiaries. Beneficiaries designated by
the committee shall be granted options to purchase stock. Option periods shall
be fixed by the committee (subject to the provisions of paragraph 4), but shall
not exceed ten (10) years.
8. Exercise of Options. Options may be exercised in whole or in part
from time to time, but in no event may any option be exercised after ten (10)
years from the date on which such option is granted (subject to the provisions
of paragraph 4).
9. Option Price. The option price shall be not less than 100% of the
fair market value of the stock at the time the option is granted (subject to the
provisions of paragraph 4). The fair market value per share shall be the closing
price of the common stock on the Over The Counter Market on the day the option
is granted, as reported by the National Association of Security Dealers,
Automatic Quotation System (NASDAQ), or if no sale of the Company's common stock
shall have been made on that day, on the next preceding day on which there was a
sale of such stock. If the stock is listed upon an established stock exchange or
exchanges, fair market value shall be deemed to be the highest closing price of
the common stock on such stock exchange or exchanges on the day the option is
granted. Subject to the foregoing, the Committee in fixing the option price
shall have full authority and discretion and be fully protected in doing so.
10. Non-Transferability. Beneficiaries' rights under the Plan are
wholly personal and no assignment or transfer of a beneficiary's rights and
interests in the Plan will be permitted or recognized other than at death. An
option is exercisable during the lifetime of the beneficiary to whom the option
was granted only by such beneficiary.
11. Limit on Annual Eligibility. A participant in the Plan shall not be
granted or be entitled to exercise, in any calendar year, incentive stock
options on which the aggregate fair market value of the stock (determined at the
date the option is granted) exceeds the annual limit established by Section 422
of the Internal Revenue Code of 1986, as amended.
12. Payment. Upon exercise of any option granted hereunder, payment in
full shall be made at the time of such exercise for all shares then being
purchased; except, however, that the committee may in its discretion permit the
issuance of stock upon such plan of partial payment as it deems reasonable.
13. Offset. The Company shall be authorized to apply the payment of any
amount due to it under this Plan, to any compensation or other amount due from
the Company or subsidiary to the beneficiary.
<PAGE> 3
14. Termination of Employment. In the event that an optionee who has
been granted an incentive stock option shall cease to be employed by the
Company, his option shall terminate at the expiration of three (3) months from
such cessation. If any cessation of employment is due to permanent and total
disability the optionee shall have the right to exercise his option at any time
within twelve (12) months after leaving employment.
15. Stock Dividends or Recapitalization; Merger or Acquisition.
(a) If any stock dividend is declared upon the common stock, or if
there is any recapitalization of the Company with respect to its
common stock, resulting in a split-up or combination or exchange
or shares, the number and kind of shares then subject to options
granted to beneficiaries under the Plan shall be proportionately
and appropriately adjusted, without any change in the aggregate
purchase prices to be paid therefore. In the alternative, in the
discretion of the committee, the option price may be appropriately
adjusted without change in the number of shares subject to such
options.
(b) Subject to any required action by the stockholders, if the Company
shall be the surviving corporation in any merger or consolidation,
any option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of common
stock subject to the option would have been entitled. However, a
dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving
corporation, shall cause every unexercised option outstanding
hereunder to terminate unless the surviving corporation
specifically agrees that the options shall apply to shares in such
surviving corporation or its parent or subsidiary and the
difference between the option price and the fair market value of
the new option shares immediately following the transaction does
not exceed the difference between the option price and the fair
market value of the old option shares immediately before the
transaction.
16. Fractional Shares. No fractional shares of stock shall be issued
upon the exercise of any option, and in case a participating beneficiary shall
become entitled to any interest in a fractional share, by reason of a stock
dividend or otherwise, the Company shall either (a) sell the same and credit the
proceeds of the sale to the beneficiary or (b) credit to the beneficiary a cash
sum equal to the market value of such fractional share interest on the date when
such stock dividend was paid for or such fractional share interest was otherwise
created.
<PAGE> 4
17. Administration and Amendment of Plan. The Option Committee of the
Board of Directors shall have the power to interpret the provisions of the Plan,
to make regulations, and to formulate administrative provisions for carrying it
out, and to make such changes in the Plan and in the regulations and
administrative provisions as, from time to time, the committee deems proper and
in the best interest of the Company; provided, it may not increase the number of
shares authorized for the Plan, nor reduce the option price below the minimum
price provided in the Plan. Without limiting the generality of the foregoing,
the committee shall have the power in its discretion to make such changes in the
Plan as to termination of the options granted to designated beneficiaries as the
committee may deem advisable because of changes in the law while the Plan is in
effect or for any other reason; provided, further, no change in an option
already granted to an beneficiary shall be made without the written consent of
the beneficiary concerned. No member of the committee or the Board of Directors
shall be liable for any action or determination made in good faith. All actions
of the committee shall be final.
18. Other Provisions. The option agreements authorized under the Plan
shall contain such other provisions as the committee shall deem advisable.
19. Application of Funds. The proceeds received by the Company from the
sale of common stock pursuant to options, except as otherwise provided herein,
will be used for general corporate purposes.
20. Indemnification and Exculpation.
(a) Each person who is or shall have been a member of the Board of
Directors or the Option Committee shall be indemnified and held
harmless by the Company against and from any and all loss, cost,
liability, or expense that may be imposed upon or reasonably
incurred by him, in connection with or resulting from any claim,
action, suit, or proceeding to which he may be or become a party
or in which he may be or become involved by reason of any action
taken or failure to act under the Plan and against and from any
and all amount paid by him in settlement thereof (with the
Company's written approval) or paid by him in satisfaction of a
judgment in any such action, suit, or proceeding, except a
judgment in favor of the Company based upon a finding of his lack
of good faith; subject, however, to the condition that upon the
institution of any claim, action, suit, or proceeding against him,
he shall in writing give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to
handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other right to which
such person may be entitled as a matter of law or otherwise, or
any power that the Company may have to indemnify him or hold him
harmless.
<PAGE> 5
(b) Each member of the Board, the Option Committee and each officer
and employee of the Company shall be fully justified in relying or acting in
good faith upon any information furnished in connection with the administration
of the Plan by any appropriate person or persons other than himself. In no event
shall any person who is or shall have been a member of the Board, the Option
Committee, or an officer or employee of the Company be held liable for any
determination made or other action taken or any omission to act in reliance upon
any such information, or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.
Plan adopted by the Board of Directors on May 26, 1999
Plan approved by the Shareholders on June 30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,930
<SECURITIES> 0
<RECEIVABLES> 2,772
<ALLOWANCES> 400
<INVENTORY> 3,158
<CURRENT-ASSETS> 11,370
<PP&E> 11,111
<DEPRECIATION> 6,919
<TOTAL-ASSETS> 25,153
<CURRENT-LIABILITIES> 12,359
<BONDS> 0
0
0
<COMMON> 1,805
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25,153
<SALES> 2,409
<TOTAL-REVENUES> 2,409
<CGS> 2,574
<TOTAL-COSTS> (165)
<OTHER-EXPENSES> 1,827
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237
<INCOME-PRETAX> 2,229
<INCOME-TAX> (700)
<INCOME-CONTINUING> (1,529)
<DISCONTINUED> 136
<EXTRAORDINARY> (583)
<CHANGES> 0
<NET-INCOME> 3,550<F1>
<EPS-BASIC> .39
<EPS-DILUTED> .39
<FN>
<F1>Net income includes gain from asset sale of $5,526,000.
</FN>
</TABLE>
