SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
CYBEROPTICS CORPORATION
- --------------------------------------------------------------------------------
(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.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
CYBEROPTICS CORPORATION
5900 Golden Hills Drive
Minneapolis, MN 55416
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 19, 2000
To the Shareholders of
CYBEROPTICS CORPORATION:
The Annual Meeting of Shareholders of CyberOptics Corporation (the
"Company") will be held on Friday, May 19, 2000, at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, Minnesota 55402, at 12:00 p.m. for the following
purposes:
1) To elect eight directors;
2) To approve an amendment to the Company's 1998 Stock
Incentive Plan to increase the number of shares of
Common Stock reserved for issuance thereunder by
250,000 shares; and
3) To consider such other matters as may properly come
before the meeting or any adjournments thereof.
Only holders of record of Common Stock at the close of business on
April 4, 2000, will be entitled to receive notice of and to vote at the meeting.
Shareholders who do not expect to attend the meeting in person are urged to fill
in, date, sign and promptly return the proxy in the enclosed envelope. If you
later desire to revoke your proxy, you may do so at any time before it is
exercised.
By Order of the Board of Directors
Thomas Martin
SECRETARY
Minneapolis, Minnesota
April 7, 2000
---------------------------------------
IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY
In order that there may be a proper representation at the meeting, you are
urged, whether you own one share or many, to promptly complete,
sign and mail your proxy.
---------------------------------------
<PAGE>
CYBEROPTICS CORPORATION
5900 Golden Hills Drive
Minneapolis, MN 55416
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON MAY 19, 2000
The accompanying Proxy is solicited on behalf of the Board of Directors
of CyberOptics Corporation (the "Company") for use at the Annual Meeting of
Shareholders to be held May 19, 2000, at 12:00 p.m. at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, Minnesota 55402, and at any adjournments thereof.
The cost of solicitation, including the cost of preparing and mailing the Notice
of Annual Meeting of Shareholders and this Proxy Statement, will be paid by the
Company. Representatives of the Company may, without cost to the Company,
solicit Proxies for the management of the Company by means of mail, telephone or
personal calls.
Shares of the Company's common stock, no par value (the "Common
Stock"), represented by proxies in the form solicited will be voted in the
manner directed by a shareholder. If no direction is made, the proxy will be
voted for the election of the nominees for director named in this Proxy
Statement, for the amendment to the 1998 Stock Incentive Plan, and in the
discretion of the proxies with respect to any other matters properly brought
before the meeting. Shares voted as a "withhold vote for" one or more directors
will be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting and as unvoted, although
present and entitled to vote, for purposes of the election of the directors with
respect to which the shareholder has abstained. If a broker submits a proxy that
indicates the broker does not have discretionary authority to vote certain
shares, those shares will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum at the meeting, but
will not be considered as present and entitled to vote with respect to the
matters voted on at the meeting.
Proxies may be revoked at any time before being exercised by delivery
to the Secretary of the Company of a written notice of termination of the
proxies' authority or a duly executed proxy bearing a later date.
Only holders of record of Common Stock at the close of business on
April 4, 2000, will be entitled to receive notice of and to vote at the meeting.
On April 4, 2000, the Company had 5,092,504 shares of Common Stock outstanding.
Each outstanding share is entitled to one vote on all matters presented at the
meeting.
So far as the management of the Company is aware, no matters other than
those described in this Proxy Statement will be acted upon at the Annual
Meeting. In the event that any other matters properly come before the Annual
Meeting calling for a vote of shareholders, the persons named as proxies in the
enclosed form of proxy will vote in accordance with their best judgment on such
other matters.
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1999, is being furnished to each shareholder with this Proxy
Statement. This Proxy Statement is being mailed to shareholders on or about
April 7, 2000.
PROPOSAL I--ELECTION OF DIRECTORS
NOMINEES
Eight persons have been nominated for election at the Annual Meeting:
Michael A. Bowes, Steven K. Case, Alex B. Cimochowski, Kathleen P. Iverson,
Erwin A. Kelen, Irene M. Qualters, Steven M. Quist and Michael M. Selzer, Jr.
Each nominee except Mr. Bowes is currently a director of the Company. All
nominees elected at the Annual Meeting will serve until the next annual meeting
or until their earlier death, resignation, removal, or disqualification. The
persons named in the accompanying Proxy intend to vote the Proxies held by them
in favor of the nominees named below as directors, unless otherwise directed.
The affirmative vote of a majority of the voting shares represented at the
meeting is required for the election of each director. Should any nominee for
director become unavailable for any reason, the Proxies will be voted in
accordance with the best judgment of the persons named therein. The Board of
Directors has no reason to believe that any candidate will be unavailable.
<PAGE>
The following information is furnished with respect to each nominee as
of March 17, 1999:
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE FOR PAST FIVE YEARS SINCE
------------ --------------------------------------- -----
Steven K. Case Chairman of the Company since September January 1984
Age 51 1995; President of the Company from
1984 until February 1998; adjunct
Professor of Electrical Engineering at
the University of Minnesota since 1978
and member of University Industry
Advisory Board.
Steven M. Quist Chief Executive Officer since March June 1991
Age 54 2000 and President of the Company since
February 1998; President of Rosemount
Inc. ("Rosemount"), a subsidiary of
Emerson Electric Co., and an employee
of Rosemount from 1970 until joining
the Company.
Alex B. Cimochowski+ President and owner of Four Peaks May 1984
Age 60 Technologies, Inc., a printing company,
since November 1996; independent
business consultant from September 1995
to November 1996; Chief Executive
Officer of Delphax Systems from
November 1988 to September 1995;
President of Edgecore Technology, Inc.
from September 1983 to April 1988 and
consultant thereto from April 1988 to
November 1988.
Kathleen P. Iverson+ Vice-President and General Manager of May 1998
Age 43 Worldwide Temperature, a division of
Rosemount, since September 1997; Vice
President Worldwide Temperature of
Rosemount from January 1996 to
September 1997; Vice President--Finance
of Rosemount from 1992 to January 1996.
Erwin A. Kelen* President of Kelen Ventures since 1990; February 1995
Age 64 President of Datamyte Corporation, a
subsidiary of Allen Bradley Co., from
1984 until 1990. Director of
Printronix, Inc., Insignia Systems,
Inc. and Computer Network Technologies,
Inc.
Irene M. Qualters+ Vice President, Research Information June 1999
Age 50 Service, Merck & Company, Inc. since
1999; President of Cray Research, a
subsidiary of Silicon Graphics, Inc.,
and Senior Vice President of Silicon
Graphics, Inc. from 1997 to 1998; Vice
President of Silicon Graphics, Inc.
from 1996 to 1997; Senior Vice
President of Cray Research from 1995
until its acquisition by Silicon
Graphics, Inc. in 1996; Vice
President-Software Division of Cray
Research from 1992 to 1995.
Michael M. Selzer, Jr.* President, Chief Executive Officer and June 1999
Age 47 Director of Urologix, Inc, a medical
device manufacturer, since January
1999; Vice President and General
Manager--Neurostimulation Business of
Medtronic, Inc., a medical device
manufacturer, from 1994 until December
1998; Vice President--Components and
Research Group of Medtronic, Inc. from
1992 to 1994; Vice President and
General Manager--Micro-Rel Division of
Medtronic, Inc. from 1987 to 1992.
Michael A. Bowes Chief Operating Officer of Shopcreator Nominee
Age 43 Developments, Ltd. and consultant to
the Company since April 2000; Vice
President and General Manager, SMT
Systems, of CyberOptics Corporation
from April 1999 to April 2000; Founder
and Managing Director of Kestra Ltd.
from 1996 to 1999; Managing Director of
Visionware Ltd. from 1993 until 1995;
General Manager of Visionware Ltd. from
1991 until 1993.
- --------------
+ Member of and/or nominee to Audit Committee
* Member of and/or nominee to Compensation Committee
2
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not also employees receive directors fees of $1,000
per meeting attended. Until 1999, directors who were not also employees also
received an option to purchase 12,000 shares vesting over a period of four years
upon their initial election to the Board of Directors, or adoption of the Stock
Option Plan for Nonemployees in 1993, if they were directors on such adoption.
Mr. Cimochowski and Mr. Kelen received options in 1993 and 1995, and Ms. Iverson
received and option in 1998 under such arrangement. In 1999, the Stock Option
Plan for Nonemployees was amended to provide that each director receives an
option to purchase 3,000 shares, which are exercisable from the date of grant,
at each annual meeting at which they are elected or reelected, commencing with
the annual meeting at which previous options are full vested. Ms. Qualters and
Mr. Selzer received options to purchase 3,000 shares under the amended plan in
1999.
COMMITTEES/MEETINGS
Except for its Compensation Committee and Audit Committee, the Company
does not have any standing committees, including any nominating committee, of
the Board of Directors. The Audit Committee, which consisted of Ms. Iverson and
Ms. Qualters during 1999, and to which Mr. Cimochowski was appointed as the
third member in February 2000, reviews the Company's arrangements with its
auditors, the substance of the audit and interested party transactions. The
Compensation Committee, which consisted of Mr. Kelen and Mr. Selzer, administers
the Company's stock benefit plans and determines compensation policy and levels
for the Company's executive officers. During the fiscal year ended December 31,
1999, the Board of Directors of the Company met five times and acted four times
by writing in lieu of meeting, the Compensation Committee met two times and
acted three times by writing in lieu of meeting and the Audit Committee met two
times. Every nominee for director attended at least 75 percent of the meetings
of the Board and the Board Committees for which such nominee was a member.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON STOCK
REPRESENTED AT THE MEETING IS REQUIRED FOR THE ELECTION OF EACH DIRECTOR. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
EXECUTIVE OFFICERS
In addition to Dr. Case and Mr. Quist (described above), the current
executive officers of the Company include:
Richard G. Ballintine, 53, has been Vice--Finance and Information
Systems of the Company since April 1998. Prior to joining the Company, Mr.
Ballintine served in various capacities with Rosemount Inc., the last two years
as Vice President--Finance. From December 1993 to September 1995, he was Vice
President-- Finance for Rosemount Aerospace Inc., a subsidiary of BF Goodrich
Co.
William J. Farmer, 50, started as Asia-Pacific Regional Sales Manager
with the Company in July 1994, was appointed Director of Product Development in
January 1996 and served as Vice President--Product Development from February
1997 until May 1998 when he was elected Vice President, General Manger--OEM
Sensors. From November 1991 until joining the Company, Mr. Farmer was a research
engineer with Sharp Corporation in Japan.
Michael D. Wetle, 42, has been Vice President and General Manager of
the Semiconductor Group of the Company since August 1999. From May 1998 to
August 1999, Mr. Wetle was Vice President and General Manager of the SMT Systems
Business. Mr. Wetle was Vice President of Marketing for Danaher Controls, an
industrial controls company from 1996 until joining the Company. Prior to that,
Mr. Wetle was on the Corporate Sponsorship Program at Emerson Electric (1988-96)
where he served in various capacities including Strategic Planning, Marketing,
and General Management. Mr. Wetle was also an Associate at Chase Investment Bank
(1986-88) and was on the Executive Program at Honeywell Inc (1981-84).
Dr. Bruce E. Batten, 49, has been Vice President--SMT Systems Global
Sales and Customer Engineering of the Company since August 1999. Prior to August
1999, he was Vice President and General Manager--Industrial Measurement Group of
the Company since August 1998. Dr. Batten was Vice President--Sales and
Marketing with Kovex Corporation, a developer of precision 3D surface inspection
and measurement instrumentation, from 1997 until
3
<PAGE>
joining the Company and served as Vice President and General Manager--Confocal
Optics Business Unit for Noran Instruments, Inc., a Thermospectra company, from
1990 to 1997.
Michael S. Willey, 53, has been Senior Vice President and General
Manager of the SMT Systems Group of the Company since February 2000. Mr. Willey
was Senior Vice President of sales and marketing of Detector Electronics, a
manufacturer of optical-based intrumentation, from 1996 until joining the
Company. Prior to that, Mr. Willey was President of the Gas Analytical Division
of Rosemount Analytical, Vice President of Worldwide Corporate Accounts of
Fisher - Rosemount Process Group and Vice President of Marketing of Fisher -
Rosemount Systems Division (1989-1996) all of which are divisions of Emerson
Electric Co.
PROPOSAL II -- APPROVAL OF THE AMENDMENT TO THE
COMPANY'S STOCK OPTION PLAN
INTRODUCTION
On February 11, 2000, the Company's Board of Directors approved,
subject to shareholder approval, an amendment to the Company's 1998 Stock
Incentive Plan (the "1998 Plan") that will increase the number of shares
reserved for issuance under awards granted thereunder by 250,000 shares. The
1998 Plan, like the Company's Restated Stock Option Plan, is intended to assist
in attracting, retaining and providing an incentive to employees, management
personnel and other personnel capable of assuring the future success of the
Company.
Although the 1998 Plan originally reserved a total of 250,000 shares
for issuance under awards (including options) granted under the 1998 Plan, at
March 31, 2000 there remained only 8,300 shares available for future grant.
Stock options have increasingly become an essential ingredient in the
compensation packages for both executive and technical personnel. Without the
ability to grant additional options, the Board of Directors of the Company does
not believe that it would have the appropriate tools to attract and retain these
personnel. The Board of Directors is recommending the amendment to the 1998 Plan
to provide enough authorization to cover anticipated option grants for the next
several years.
SUMMARY OF THE 1998 PLAN
The 1998 Plan is administered by the Compensation Committee of the
Board (the "Committee"). The Committee has the authority to select the
individuals to whom awards are granted, to determine the types of awards to be
granted and the number of shares of Common Stock covered by such awards, to set
the terms and conditions of such awards, to determine whether the payment of any
amounts received under any award shall or may be deferred, and to establish
rules for the administration of the 1998 Plan.
Although the 1998 Plan permits the granting of a variety of different
types of awards, including stock appreciation rights (SARs), restricted stock
and restricted stock units, performance awards, and dividend equivalents, all of
the awards granted under the 1998 Plan have been stock options. The Committee
may grant incentive stock options meeting the requirements of Section 422 of the
Code, and stock options that do not meet such requirements (non-qualified stock
options). Awards may be granted for no cash consideration or for such minimal
cash consideration as may be required by applicable law. Awards may provide that
upon the grant or exercise thereof the holder will receive cash, shares of
Common Stock or other securities, awards or property, or any combination
thereof, as the Committee shall determine.
The exercise price per share under any stock option, and the grant
price of other awards under the 1998 Plan, may not be less than 100% of the fair
market value of the Common Stock on the date of the grant of such option or
other award. Determinations of fair market value under the 1998 Plan are made in
accordance with methods and procedures established by the Committee.
Any employee, officer, consultant or independent contractor of the
Company and its affiliates selected by the Committee is eligible to receive an
award under the 1998 Plan. During the past two years, the Company has granted
options to virtually all full-time employees. No person who is an employee of
the Company at the time of grant may be granted any award or awards under the
1998 Plan, the value of which awards are based solely on an increase in the
4
<PAGE>
value of the shares after the date of grant of such awards, of more than 100,000
shares in the aggregate in any calendar year. The foregoing annual limitation
specifically includes the grant of any "performance-based awards" within the
meaning of Section 162(m) of the Code.
No award granted under the 1998 Plan may be assigned, transferred,
pledged or otherwise encumbered by the individual to whom it is granted,
otherwise than by will or the laws of descent and distribution, except that the
Committee may permit the designation of a beneficiary. Each award is
exercisable, during such individual's lifetime, only by such individual or, if
permissible under applicable law, by such individual's guardian or legal
representative.
The Board of Directors may amend, alter or discontinue the 1998 Plan at
any time, provided that shareholder approval must be obtained for any such
action that would (1) cause Rule 16b-3 under the Exchange Act to become
unavailable with respect to the 1998 Plan; (2) violate the rules or regulations
of the Nasdaq National Market, any other securities exchange or the National
Association of Securities Dealers, Inc. applicable to the Company; or (3) cause
the Company to be unable, under the Code, to grant incentive stock options under
the 1998 Plan. The Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the 1998 Plan or any award agreement in the
manner and to the extent it shall deem desirable to carry the 1998 Plan into
effect. The Committee may waive any condition of, or rights of the Company under
any outstanding award, prospectively or retroactively, but the Committee may not
amend or terminate any outstanding award, prospectively or retroactively,
without the consent of the holder or beneficiary of the award.
The grant of an option or SAR is not expected to result in any taxable
income to the recipient. The holder of an incentive stock option generally will
have no taxable income upon exercising the incentive stock option (except that a
liability may arise pursuant to the alternative minimum tax), and the Company
will not be entitled to a tax deduction when an incentive stock option is
exercised. Upon exercising a non-qualified stock option, the optionee must
recognize ordinary income equal to the excess of the fair market value of the
shares of Common Stock acquired on the date of exercise over the exercise price,
and the Company will be entitled at that time to a tax deduction in the same
amount. Upon exercising a SAR, the amount of any cash received and the fair
market value on the exercise date of any shares of Company Common Stock received
are taxable to the recipient as ordinary income and deductible by the Company.
The tax consequence to an optionee upon a disposition of shares acquired through
the exercise of an option or SAR will depend on how long the shares have been
held and upon whether such shares were acquired by exercising an incentive stock
option or by exercising a non-qualified stock option or SAR. Generally, there
will be no tax consequence to the Company in connection with disposition of
shares acquired under an option, except that the Company may be entitled to a
tax deduction in the case of a disposition of shares acquired under an incentive
stock option before the applicable incentive stock option holding periods set
forth in the Code have been satisfied.
Under the 1998 Plan, the Committee may permit participants (other than
Non-Employee Directors) receiving or exercising awards, subject to the
discretion of the Committee and upon such terms and conditions as it may impose,
to surrender shares of the Company's Common Stock (either shares received upon
the receipt or exercise of the award or shares previously owned by the optionee)
or other property to the Company to satisfy federal and state tax obligations.
In addition, the Committee may grant, subject to its discretion and such rules
as it may adopt, a bonus to a participant in order to provide funds to pay all
or a portion of federal and state taxes due as a result of the receipt or
exercise of (or lapse of restrictions relating to) an award. The amount of any
such bonus will be taxable to the participant as ordinary income, and the
Company will have a corresponding deduction equal to such amount (subject to the
usual rules concerning reasonable compensation).
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF THE
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING AND ENTITLED TO VOTE IS NECESSARY
FOR APPROVAL OF THE AMENDMENT TO THE OPTION PLAN DESCRIBED ABOVE. PROXIES WILL
BE VOTED IN FAVOR OF SUCH PROPOSAL UNLESS OTHERWISE INDICATED. THE BOARD
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS VOTE FOR THE PROPOSAL TO AMEND THE
STOCK OPTION PLAN AS DESCRIBED ABOVE.
5
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT OF THE BOARD OF DIRECTORS
The Company's executive compensation policies are recommended and
administered by the Compensation Committee of the Board of Directors. The
Compensation Committee is currently composed of two independent, outside
directors.
The principal objective of the Company's compensation policy is to
increase shareholder value by providing an incentive to officers and employees
to maximize the Company's performance. The Company sets the salaries of its
executive officers at or slightly below industry averages and provides
significant variable compensation through stock options and, to a lesser extent,
through cash bonuses. The form of compensation provided to members of the
Company's management varies based on their position and their ability to
influence performance.
The Compensation Committee has discretion to set executive compensation
at levels warranted by external, internal and individual circumstances. The
Committee has solicited through Mr. Quist, and reviewed annually, compensation
surveys for officer positions in the electronics industry. Although such data
provides a base for comparison, it is not necessarily used as the basis for the
compensation actually awarded.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program can be separated
into several elements: base salary, annual cash incentive compensation,
long-term incentive compensation in the form of stock options, and various
benefits, including medical and retirement savings plans generally available to
employees.
BASE SALARY
The Company's policy is to set the base salaries of its executives at,
or slightly below, industry average. Dr. Case's base salary during 1999 was set
by the Committee at the beginning of the fiscal year at $180,000, which the
Committee believes places his salary at, or slightly below, the median of
salaries for chairpersons in the electronics industry at similarly sized
companies. Such salary represented a $5,000 increase over Dr. Case's base salary
for 1998. Mr. Quist's base salary during 1999 was set by the Committee at the
beginning of the fiscal year at $210,000, which the Committee believes continues
to place his salary approximately at the median of salaries for chief executive
officers in the electronics industry at similarly sized companies. Such salary
represented a $10,000 increase over Mr. Quist's base salary for 1998.
CASH INCENTIVE COMPENSATION
The Compensation Committee establishes an executive bonus plan
annually. The bonus plan assigns to each executive, based upon the Committee's
determination of the size of bonus appropriate for the position held by the
executive, a base dollar amount bonus objective and proportions of the bonus
objective that may be received by achievement of company financial goals, asset
management goals, and individual performance goals. Sales positions, for
example, which more directly influence revenue attainment and have a higher
component of variable compensation, also have a proportionately larger base
dollar amount bonus objective. The Committee creates a matrix of multipliers for
the portion of the bonus based on company financial performance as a function of
net income before interest and income taxes ("NIBIT") and revenue. For any given
increase in NIBIT, the matrix will dictate a multiplier that is applied to the
company financial performance portion of base dollar amount bonus objective to
determine the bonus awarded. For 1999, the Committee specifically excluded any
contribution from acquired business in making these determinations. For
executives, the Committee, with input from the executive, also assigns specific
individual performance goals and asset management goals that will result in
payment of a bonus if achieved.
For both Dr. Case and Mr. Quist, 80% of the bonus for 1999 was based on
company performance, 10% on asset management goals, and 10% on individual
objectives. Dr. Case had a $80,000 and Mr. Quist had a $85,000 bonus objective
for the year. The Company exceeded its asset management goals, significantly
improving inventory and receivables management, and Dr. Case and Mr. Quist
therefore received $8,000 and $8,500 for this component of their
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bonuses. Both Dr. Case and Mr. Quist achieved a majority of their individual
performance goals and therefore received bonus payments of $4,800 and $6,500
respectively based on such goals. Because of lower revenue resulting from slower
growth in the surface mount technology industry during 1999, the matrix
multiplier was only .25 and Dr. Case and Mr. Quist received an additional
$16,000 and $17,000 based on achievement of Company financial goals.
STOCK INCENTIVE COMPENSATION
The Company provides long-term incentive to its executive officers
primarily through its Restated Stock Option Plan and its 1998 Stock Incentive
Plan (collectively, the "Option Plans"). Under the Option Plans, the
Compensation Committee awards stock options to executive officers based on the
number of options and shares currently held by the executive and also on
performance factors similar to those used to determine salaries and annual cash
incentives. The Compensation Committee has not fixed, or predetermined, the
amount of shares to be available for option grants in any year. The Committee
has, however, reviewed industry statistics regarding the appropriate size of the
Option Plan in terms of outstanding shares and the appropriate size of grants to
executive officers and to employees as a whole.
Stock options are granted to encourage an executive to seek the same
objectives as shareholders, to retain executives through vesting and to lower
the overall cash cost of compensation. The Company's options generally vest over
a period of four years and expire after five years. All options are granted with
an exercise price equal to fair market value on the date of grant.
Dr. Case and Mr. Quist received options to purchase 40,000 shares and
25,000 shares, respectively, in 1999. The size of the option grants to each such
officer reflect (i) Dr. Case's continued willingness to accept a significant
portion of his overall compensation in the form of equity incentives, and (ii)
the value and size of other options held by such executives on the date of
grant. Options granted during 1998 to other executives were principally to
provide additional incentive, with reference to industry statistics on the
appropriate size of the stock-based incentive.
BENEFITS
The Company provides medical and retirement savings benefits to
executive officers on terms generally available to employees. No executive
officer received perquisites in excess of 10% of salary during 1999.
SUMMARY
The Compensation Committee believes that the compensation program for
executive officers during the 1999 year achieved the principal objectives for
which it was designed.
Erwin Kelen
Michael M. Selzer, Jr.
7
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
the last three fiscal years awarded to or earned by the President and Chief
Executive Officer of the Company and each executive officer of the Company who
received cash compensation from the Company during the year ended December 31,
1999 exceeding $100,000.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUT
--------------------------------------- ------------------------- --------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARDS(1) OPTIONS(#) PAYOUTS SATION(2)
- -------------------- ------ -------- ------- -------- ---------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven K. Case 1999 $179,230 $28,800 $ 8,438(3) 40,000 $ 9,480
- --------------
Chairman & Director 1998 181,000(4) 15,000 3,446
1997 160,000 45,000 33,935(3) 80,000 2,993
Steven M. Quist 1999 208,462 32,000 25,000 2,180
- ---------------
President & Director 1998 172,000(5) 75,000 $ 195,000 100,000
William J. Farmer 1999 123,446 11,900 9,633
- -----------------
Vice President & 1998 119,000(4) 6,000 2,688
General Manager
- --OEM Sensors 1997 110,000 18,750 25,000 2,238
Michael D. Wetle 1999 159,701 34,609 59,741(6) 15,000 2,348
- ----------------
Vice President & 1998(5) 80,000 6,000 57,740(6)
General Manager--
Semiconductor Group
Bruce E. Batten 1999 130,577 24,375 5,000 4,200
- ---------------
Vice President--Global 1998(5) 46,154 9,000 17,500
Sales & Customer
Engineering
Richard G. Ballintine 1999 106,691 7,400 1,185
- ---------------------
Vice President & 1998(5) 72,692 4,000 7,500
General Manager
- --Finance &
Information Systems
</TABLE>
- -------------------
(1) Amounts in the column represent the dollar value of grants of restricted
stock. Mr. Quist is the only named executive officer who has received
restricted stock. Mr. Quist received a 10,000 share restricted stock award
that was 20% vested on the date of grant and vests with respect to an
additional 20% on each of the next four anniversaries of the grant date.
(2) Consists of company contributions for such officers to a 401K plan and
travel bonus reimbursement.
(3) Represents payout of accrued and unused vacation time.
(4) Includes one payroll period during 1998 in excess of a full years'
payroll.
(5) Mr. Quist, Mr. Wetle, Dr. Batten and Mr. Ballintine each commenced
employment in 1998 and the numbers therefore represent salary for a
partial year.
(6) Consists of the costs of relocation of Mr. Wetle to Minnesota upon
commencement of his employment and to California in connection with
assumption of duties at Hama Sensors, Inc.
STOCK OPTIONS
The Company maintains a Restated Stock Option Plan, a 1998 Stock Incentive
Plan and a Stock Option Plan for Nonemployee Directors. The Company may grant
stock options to executive officers and other employees and consultants of the
Company under the Restated Stock Option Plan and the 1998 Stock Incentive Plan.
The following table sets forth information with respect to options granted to
the named executive officers in 1999:
8
<PAGE>
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR OPTION
OPTIONS GRANTED TO TERM(1)
GRANTED EMPLOYEES IN EXERCISE EXPIRATION -----------------------------
NAME (#) 1999 PRICE($/SH) DATE 5%($) 10%($)
- -------------------- ------- ------------ ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dr. Case 40,000 12.84% $11.75 3/16/04 $ 599,852 $ 756,940
Mr. Quist 25,000 8.03 11.75 3/16/04 478,488 761,912
Mr. Wetle 15,000 4.82 17.06 8/13/04 416,907 663,855
Dr. Batten 5,000 1.61 17.06 8/13/04 138,969 221,285
</TABLE>
- -------------------
(1) These amounts represent the realizable value of the subject options from
the date of grant until termination, without discounting to present value,
assuming appreciation in the market value of the Common Stock from the
market price on the date of grant at the rates indicated. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Common Stock, and overall stock market conditions. The amounts
reflected in this table may not necessarily be achieved.
The following table sets forth information with respect to options
exercised during 1999 and held by the officers named in the Summary Compensation
Table as of December 31, 1999:
AGGREGATED OPTION EXERCISES IN 1999 AND OPTION VALUES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS AT MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 1999(1) DECEMBER 31, 1999(2)
ON VALUE ------------------------------- -------------------------------
NAME EXERCISE REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ---------- ------------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Case -- -- 104,750 103,250 $ 894,313 $ 1,088,938
Mr. Quist -- -- 31,000 106,000 268,250 1,062,000
Mr. Farmer 625 $ 5,625 30,312 20,938 453,273 298,602
Mr. Wetle -- -- 7,500 37,500 85,313 412,493
Dr. Batten -- -- 2,500 20,000 36,405 270,615
Mr. Ballintine -- -- 1,875 5,625 21,328 63,984
</TABLE>
- -------------------
(1) All of such options are exercisable at a price equal to the fair market
value of the Common Stock on the date of grant.
(2) Represents the difference between the closing price of the Common Stock as
reported on the Nasdaq National Market ("Nasdaq") on December 31, 1999,
and the exercise price of the options.
(3) Represents the difference between the option exercise price and the
closing price of the Company's Common Stock as reported by Nasdaq on the
date of exercise.
LONG-TERM INCENTIVE PLAN AWARDS/EMPLOYMENT AGREEMENTS
Other than its Restated Stock Option Plan and the 1999 Stock Incentive
Plan, the Company does not maintain any long-term incentive plans, nor does it
have any employment agreements with any of the executive officers named in the
Summary Compensation Table.
9
<PAGE>
SHAREHOLDER RETURN
The graph set forth below compares the cumulative total shareholder
return on the common stock of the Company from January 1, 1995 through December
31, 1999 with the cumulative total return on a broad market index (the Nasdaq
NMS Index) and a peer group index (the Nasdaq Computer and Data Processing
Index). In each case, the cumulative return is calculated assuming an investment
of $100 on January 1, 1995, and reinvestment of all dividends.
CYBEROPTICS
STOCK PERFORMANCE CHART DATA
Nasdaq
Computer
Nasdaq & Data
Date NMS Processing CyberOptics
---- --- ---------- -----------
12/30/94 $100.00 $100.00 $100.00
3/31/95 $108.95 $112.56 $141.94
6/30/95 $124.62 $133.42 $327.42
9/29/95 $139.63 $145.74 $438.71
12/29/95 $141.33 $152.28 $512.90
3/29/96 $147.95 $159.42 $370.97
6/28/96 $160.01 $177.21 $200.00
9/30/96 $165.70 $180.75 $174.19
12/31/96 $173.89 $187.95 $172.79
3/31/97 $164.46 $174.46 $217.74
6/30/97 $194.59 $223.71 $203.23
9/30/97 $277.52 $244.65 $435.48
12/31/97 $213.07 $230.90 $293.55
3/31/98 $249.36 $304.97 $348.39
6/30/98 $256.21 $337.94 $185.48
9/30/98 $231.37 $317.49 $130.64
12/31/98 $300.25 $412.23 $180.64
3/31/99 $335.86 $495.85 $167.74
6/30/99 $367.49 $515.96 $208.06
9/30/99 $375.85 $532.96 $207.26
12/31/99 $542.43 $871.27 $354.84
10
<PAGE>
SHARES OUTSTANDING
The following table sets forth information pertaining to the ownership
of the Company's Common Stock by each person known by the Company to
beneficially own 5% or more of the Company's Common Stock, by each director, by
each officer named in the Summary Compensation Table, and by all officers and
directors as a group as of March 20, 2000:
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- -------------------------- --------
Kopp Investment Advisors, Inc. 1,083,975 21.3%
7701 France Avenue South
Suite 500
Edina, MN 55435 (3)
Robert Fleming, Inc. 668,430 13.1%
320 Park Avenue, 11th Floor
New York, NY 10022 (4)
Dimensional Fund Advisors, Inc. 308,200 6.1%
1299 Ocean Avenue
Santa Monica, CA 90401 (5)
Steven K. Case 428,388 8.2%
5900 Golden Hills Drive
Minneapolis, MN 55416 (2)
Michael A. Bowes 7,500 *
Alex B. Cimochowski (6) 23,371 *
Kathleen P. Iverson 3,400 *
Erwin A. Kelen 65,000 1.3%
Irene M. Qualters 3,000 *
Steven M. Quist (7) 71,250 1.4%
Michael M. Selzer 3,300 *
Richard G. Ballintine 3,052 *
Bruce E. Batten -- *
William J. Farmer 27,680 *
Michael D. Wetle 1,000 *
All executive officers and
directors as a group (13 persons) 639,490 11.9%
- -------------------
*Less than 1%
(1) Includes 132,250 shares for Dr. Case, 7,500 shares for Mr. Bowes, 21,000
shares for Mr. Cimochowski, 3,000 shares for Ms. Iverson, 51,000 shares
for Mr. Kelen, 3,000 shares for Ms. Qualters, 52,145 shares for Mr. Quist,
3,000 shares for Mr. Selzer, 25,937 shares for Mr. Farmer, 1,000 shares
for Mr. Wetle, and 299,832 shares for all officers and directors as a
group, purchasable upon exercise of options exercisable within 60 days of
March 20, 2000.
(2) Includes 50,000 shares in trust for family members for which Dr. Case is a
trustee, and 650 shares held for daughter under UTMA.
11
<PAGE>
(3) Based on Schedule 13D filing dated December 7, 1999. Includes 342,500
shares over which the holder has sole voting power, 190,000 shares over
which the holder has sole power of disposition and 893,975 shares over
which the holder has shared power of disposition.
(4) Based on Schedule 13G filed February 9, 2000. All shares held with shared
voting and shared power of disposition.
(5) Based on Schedule 13G filed February 3, 2000. All shares held with sole
voting and sole power of disposition.
(6) Includes 1,650 shares owned by Mr. Cimochowski's spouse, the beneficial
ownership of which Mr. Cimochowski disclaims.
(7) Includes 4,000 shares subject to a restricted stock agreement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Company's directors and officers,
and any beneficial owner of more than 10% of a class of equity securities of the
Company, are required to report their ownership of the Company's equity
securities and any changes in such ownership to the Securities and Exchange
Commission (the "Commission") and the securities exchange on which the equity
securities are registered. Specific due dates for these reports have been
established by the Commission, and the Company is required to disclose in this
Proxy Statement any delinquent filing of such reports and any failure to file
such reports during the fiscal year ended December 31, 1999.
During 1999, Ms. Iverson filed late one report with respect to a single
transaction in 1998, and Mr. Selzer and Ms. Iverson filed late their initial
reports of beneficial ownership (reporting only options granted by the Company).
Based upon information provided by officers and directors of the Company, all
other officers, directors and 10% shareholders otherwise filed all reports on a
timely basis in the 1999 fiscal year.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company has selected PricewaterhouseCoopers LLP as its independent
accountants for its fiscal year ending December 31, 2000. Representatives of
PricewaterhouseCoopers LLP, the successor to Coopers & Lybrand L.L.P and which
together have served as the Company's independent accountants since July 1994,
are expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE NEXT ANNUAL MEETING
Any shareholder wishing to include a proposal in the Company's proxy
solicitation materials for its next annual meeting of shareholders must submit
such proposal for consideration in writing to the Secretary of the Company at
its principal executive offices, 5900 Golden Hills Drive, Minneapolis, MN 55416,
no later than December 8, 2000.
Pursuant to the Company's Bylaws, in order for business to be properly
brought before the next annual meeting by a shareholder, or in order for a
nominee for director to be considered at such annual meeting, the shareholder
must give written notice of such shareholder's intent to bring a matter before
the annual meeting, or nominate the director, no later than December 8, 2000.
Each such notice must set forth certain information with respect to the
shareholder who intends to bring such matter before the meeting and the business
desired to be conducted, as set forth in greater detail in the Company's Bylaws.
Management will use discretionary authority to vote against any
shareholder proposal, or director nominee not made by management, presented at
the next annual meeting if: (i) such proposal or nominee has been properly
omitted from the Company's proxy materials under federal securities laws; (ii)
notice of such proposal or nominee was not submitted to the Secretary of the
Company at the address listed above by December 8, 2000; or (iii) the proponent
has not solicited proxies in compliance with federal securities laws from the
holders of at least the percentage of the Company's voting shares required to
carry the proposal or elect the nominee.
12
<PAGE>
GENERAL
The Board of Directors of the Company does not know of any matters
other than those described in this Proxy Statement that will be acted upon at
the Annual Meeting. In the event that any other matters properly come before the
meeting calling for a vote of shareholders, the persons named as proxies in the
enclosed form of proxy will vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF
DIRECTORS
Thomas Martin
SECRETARY
Dated: April 7, 2000
13
<PAGE>
[LOGO] CYBEROPTICS
"MAKING LIGHT WORK FOR INDUSTRY!"
CYBEROPTICS CORPORATION
2000 ANNUAL SHAREHOLDERS MEETING
MAY 19, 2000
[LOGO] CYBEROPTICS
"MAKING LIGHT WORK FOR INDUSTRY!" PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE
ANNUAL MEETING ON MAY 19, 2000.
The undersigned hereby appoints Steven K. Case and Steven M. Quist, and each of
them, with power to appoint a substitute, to vote all shares the undersigned is
entitled to vote at the Annual Meeting of Shareholders of CyberOptics
Corporation, to be held on May 19, 2000, and any adjournments thereof, as
specified on the reverse side on the matters referred to, and, in their
discretion, upon any other matters which may be brought before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C>
1. Election of directors: 01 Steven K. Case 04 Alex B. Cimochowski 07 Irene M. Qualters [ ] Vote FOR [ ] WITHHOLD
02 Steven M. Quist 05 Kathleen P. Iverson 08 Michael M. Selzer all nominees AUTHORITY
03 Michael A. Bowes 06 Erwin A. Kelen (except as to vote for
marked) all nominees
_________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR A SPECIFIC NOMINEE, WRITE THE | |
NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) |_________________________________________|
2. Approval of Amendment to 1998 Stock Incentive Plan [ ] For [ ] Against [ ] Abstain
3. To vote with discretionary authority on any other matter that may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL OF THE DIRECTORS NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
Address Change? Mark Box [ ] Indicate changes below: Date __________________________
_________________________________________
| |
| |
|_________________________________________|
Signature(s) in Box
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
</TABLE>
