UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ADVANCED MACHINE VISION CORPORATION
(Name of Issuer)
Class A Common Stock
(Title of Class of Securities)
00753B 10 4
(CUSIP Number)
Alan Steel, 2067 Commerce Drive, Medford, Oregon 97504
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
February 9, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SEC 1746 (12-91)
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 00753B 10 4
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rodger A. Van Voorhis
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
49,000
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,508,333
OWNED BY EACH ----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
49,000
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,508,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,557,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
- --------------------------------------------------------------------------------
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
Item 1. Security and Issuer.
- -----------------------------
This report relates to the Class A Common Stock, no par value (the
"Stock"), of ADVANCED MACHINE VISION CORPORATION, a California corporation (the
"Issuer"). The Issuer's principal executive offices are located at 3709 Citation
Way #102, Medford, OR 97504.
Item 2. Identity and Background.
- ---------------------------------
(a) The person filing this statement is Rodger A. Van Voorhis.
(b) The principal business address of Mr. Van Voorhis is 4217 West Fifth
Avenue, Eugene, OR 97402.
(c) Mr. Van Voorhis' principal occupation is President of Ventek, Inc., a
subsidiary of the Issuer, which is engaged in the business of manufacturing
automated visual defect recognition equipment, and the principal executive
offices of which are located at 4217 West Fifth Avenue, Eugene, OR 97402.
(d) Mr. Van Voorhis has not, during the last five years, been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Mr. Van Voorhis was not, during the last five years, a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws.
(f) Mr. Van Voorhis is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
- -----------------------------------------------------------
On February 9, 1999, the Issuer and Veneer Technology, Inc. ("Veneer"), a
corporation owned equally by Mr. Van Voorhis and three other persons, effected a
restructuring of certain debt owed by the Issuer to Veneer. The debt was
originally issued in connection with the Issuer's July 24, 1996 acquisition of
the assets and business of Ventek, Inc. ("Ventek") from Veneer (the
"Acquisition").
In connection for the Acquisition, the Issuer issued the following
securities: (i) a 6.75% $1,000,000 note due July 23, 1999; (ii) a 6.75%
$2,250,000 note due July 23, 1999 convertible into Stock at $2.25 per share; and
(iii) a $1,125,000 note and stock appreciation rights payable (a) by issuance of
up to 1,800,000 shares of Stock or, at the Issuer's option, in cash on July 23,
1999, or (b) solely in cash in the event the Issuer's Stock is delisted from the
Nasdaq Stock Market. Additionally, Veneer received a Class I Warrant to purchase
1,000,000 shares of Stock for $2.25 per share.
In the debt restructuring, $750,000 of the $1,000,000 Note was prepaid and
the maturity date of the remaining $250,000 of the $1,000,000 note and the
$2,250,000 note were changed to July 23, 2000. The Issuer issued 1,800,000
shares of restricted Stock to Veneer in full payment of the $1,125,000 note. The
restricted Stock cannot be transferred or traded until January 1, 2000. The
Class I Warrant was cancelled.
Also on February 9, 1999, the Issuer issued 350,000 shares of restricted
Stock to Veneer in consideration for past services and to retain as employees
the four Veneer shareholders. The shares were issued under the Issuer's 1997
Restricted Stock Plan. The shares cannot be transferred or traded unless Veneer
pays the Issuer $1.25 per share between February 1, 2000 and January 31, 2001.
Absent such payment within this time frame, the shares will be forfeited and
returned to the Issuer.
Item 4. Purpose of Transaction.
- --------------------------------
See Item 3. above. In addition to the Stock included in Item 5. below,
Veneer has the right to receive up to an additional 666,667 shares of Stock
through conversion of the $2,250,000 note issued in connection with the
Acquisition.
Item 5. Interest in Securities of the Issuer.
- ----------------------------------------------
(a) Mr. Van Voorhis is the beneficial owner of 2,557,333 shares of Stock of
the Issuer, constituting 19.4% of such class. The shares included in beneficial
ownership consist of:
Shares owned directly 49,000
Shares owned by affiliates of Mr. Van Voorhis:
Whamdyne LLC ("Whamdyne") - shares outstanding 25,000
Veneer - shares outstanding 2,150,000
- shares currently issuable
pursuant to $2,250,000 note 333,333
---------
Total 2,557,333
=========
(b) Mr. Van Voorhis shares the power to vote, direct the vote of, dispose
of, and direct the disposition of 2,508,333 of the shares described in (a)
above. Mr. Van Voorhis shares voting power with Douglas Hickman, Kenneth Winder
and Thomas Thompson. These four individuals were the former owners of Ventek.
The $2,250,000 note and Stock described in (a) above (other than the 49,000
shares owned directly by Mr. Van Voorhis) are owned by Whamdyne or Veneer, which
limited liability company and corporation, respectively, are owned equally by
the four individuals. The principal business address of Messrs. Hickman, Winder
and Thompson is 4217 West Fifth Avenue, Eugene OR 97402.
The principal occupation, position and office of Mr. Hickman during the
last five years (including the dates of each and the name and address of each
employer) was as follows: Research and Development Engineer of Ventek, Inc.,
4217 West Fifth Avenue, Eugene, OR 97402, 1991 to present.
The principal occupation, position and office of Mr. Winder during the last
five years (including the dates of each and the name and address of each
employer) was as follows: Field Service Engineer of Ventek, Inc., 4217 West
Fifth Avenue, Eugene, OR 97402, 1991 to present.
The principal occupation, positions and offices of Mr. Thompson during the
last five years (including the dates of each and the name and address of each
employer) were as follows: Vice President of Engineering of Ventek, Inc., 4217
West Fifth Avenue, Eugene, OR 97402, 1991 to present.
Neither Mr. Hickman, Winder nor Thompson have, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Neither Mr. Hickman, Winder nor Thompson have, during the last
five years, been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which he was subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws. Messrs.
Hickman, Winder and Thompson are citizens of the United States.
(c) See Item 3. above.
(d) Messrs. Van Voorhis, Hickman, Winder and Thompson share equally the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the securities described in (a) above.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to
Securities of the Issuer.
- ----------------------------------
49,000 shares of Stock are owned directly by Mr. Van Voorhis. 25,000 shares
of Stock beneficially owned by Mr. Van Voorhis are actually owned by Whamdyne,
which is 25% owned by Mr. Van Voorhis. 2,483,333 shares of Stock are owned or
issuable to Veneer (also 25% owned by Mr. Van Voorhis) including 333,333 shares
pursuant to that portion of a note which is currently convertible. The
$2,250,000 Convertible Note and $1,125,000 Note related to 1,800,000 shares and
the Restricted Stock Agreement related to 350,000 shares were previously filed
with the Securities and Exchange Commission as exhibits to the Issuer's Forms
8-K dated July 24, 1996 and February 9, 1999, respectively.
Item 7. Material to be Filed as Exhibits.
- ------------------------------------------
Three exhibits are filed herewith. Exhibit A is the $2,250,000 Convertible
Note (as amended) dated July 24, 1996 between the Issuer and Veneer. Exhibit B
is the $1,125,000 Note (as amended) dated July 24, 1996 between the Issuer and
Veneer. Exhibit C is the Restricted Stock Agreement dated February 9, 1999
between the Issuer and Veneer.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 12, 1999 /s/ Rodger A. Van Voorhis
-----------------------------------
Rodger A. Van Voorhis
<PAGE>
EXHIBIT A
$2,250,000 CONVERTIBLE NOTE BETWEEN THE ISSUER AND VENTEK
CONVERTIBLE NOTE
$2,250,000 Date: July 24, 1996
On July 24, 1996, ARC Capital, a California corporation ("Maker"), Ventek,
Inc., an Oregon corporation ("Ventek") and the stockholders of Ventek entered
into an Asset Purchase Agreement pursuant to which Maker acquired certain assets
of Ventek from the stockholders. The purchase price of the Ventek assets
purchased from the stockholders partly consists of this Convertible Note on the
following terms and conditions.
FOR VALUE RECEIVED, Maker hereby promises to pay to the order of Ventek,
Inc. or its successor ("Payee") the principal sum of TWO MILLION TWO HUNDRED AND
FIFTY THOUSAND Dollars ($2,250,000) in lawful money of the United States of
America, together with interest on the unpaid principal balance according to the
terms and subject to the conditions set forth in this Convertible Note (this
"Note").
1. INTEREST
This Note shall bear interest at the rate of 6.75% per annum. Interest on
the principal balance of this Note from time to time outstanding will be
computed on the basis of a 365-day year and actual days elapsed from the date of
this Note until converted or paid in accordance with this Note. In no event
shall the interest rate exceed the maximum allowable by Oregon or any other
applicable law.
2. PAYMENT
Interest in the amount of $37,968 will be payable quarterly in arrears.
Principal will be paid in one installment on July 23, 1999 ("Maturity Date").
All payments will be made by Maker to Payee at such place as Payee shall
designate by written notice to the undersigned.
3. PREPAYMENT
The Maker may, at its option and upon 15 days prior written notice to the
Payee, prepay the principal amount hereof in whole at any time.
4. CONVERSION OF NOTE
Prior to the Maturity Date, but only on the terms set forth in Exhibit I,
the Payee will be entitled to convert all of the Note, at the principal amount
thereof, into shares of Class A Common Stock ("ARC Stock") of the Maker, at the
price of $2.25 per share (the "Conversion Price"). Notwithstanding the
requirements for conversion in Exhibit I, Payee may convert any portion of the
Note after receiving a prepayment notice as provided in Section 3. No payment or
adjustment will be made on conversion of the Note for interest accrued thereon.
The Maker is not required to issue fractional shares of ARC Stock upon
conversion of the Note and, in lieu thereof, will pay a cash adjustment based
upon the closing market price of the ARC Stock on the last business day prior to
the date of conversion.
(a) If the Maker (i) pays a dividend or makes a distribution on its ARC
Stock in shares of its Stock; (ii) subdivides its outstanding shares of ARC
Stock into a greater number of shares, or; (iii) combines its outstanding shares
of ARC Stock into a smaller number of shares; then the conversion privilege and
the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Payee may receive the number of shares of ARC Stock which
he would have owned immediately following such action if he had converted the
Note immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend and immediately after the effective date in the case of a
subdivision or combination.
(b) Upon conversion, Payee understands and agrees that the ARC Stock to be
issued to Payee, or the Subsidiary Stock (as defined below) to be issued upon
the exercise of the Stock Sale Option pursuant to Section 5 below, will contain
the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares may not be sold or transferred
in the absence of such registration or an exemption therefrom under said
Act.
(c) Upon receipt of the shares of ARC Stock, Payee shall be entitled to
piggyback registration rights with respect to such shares as set forth in and
pursuant to Section 5.4(c) of the Asset Purchase Agreement.
5. STOCK SALE OPTION
Upon conversion of the Note into ARC Stock and concurrent with or after an
initial public offering ("IPO") of the common stock of one or more of, or any
combination of, its SRC VISION, Inc., ARC Netherlands, Inc. and Ventek, Inc.
subsidiaries (individually or collectively, "Subsidiary"), but only if such IPO
occurs during the term of the Note, Payee shall have the option to sell to Maker
up to 1,000,000 shares of ARC Stock converted to date for consideration
consisting of Subsidiary common stock ("Subsidiary Stock") owned by Maker. The
number of shares of Subsidiary Stock to be paid for ARC Stock shall be
determined as follows:
(a) The total market value ("TMV") of ARC Stock to be sold to Maker shall
be determined by multiplying the number of shares of ARC Stock times the average
of the closing price of ARC Stock, as quoted by NASDAQ, for the 30 trading days
ending on the IPO date.
(b) The TMV shall be divided by 70% of the per share IPO price of
Subsidiary Stock before discounts, fees, underwriting costs, etc.
6. DEFAULT AND REMEDIES, SENIORITY AND OFFSET
(a) Events of Default. An Event of Default hereunder shall mean a default
in the payment of any installment of principal and interest hereof, as and when
due and payable, and be continuing for a period of 15 days following written
notice thereof by Payee to Maker.
(b) Remedies. At any time after the occurrence of an Event of Default, the
Payee may, by written notice sent to the Maker by registered or certified mail,
return receipt requested, declare the entire amount of this Note to be forthwith
due and payable, whereupon this Note shall become forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived. Upon acceleration by Payee, Payee shall be entitled to all
remedies available to it at law or in equity.
(c) Security Interest. The payment of the Note is hereby secured by that
certain Pledge and Security Agreement by and among ARC Capital, Ventek and Solin
& Associates, P.C. ARC Subsidiary, Inc.
(d) Junior to Ilverton. This Note is junior in right of payment to that
certain Note in the principal amount of $3,400,000 dated April 17, 1996, issued
by Maker and originally payable to Ilverton International Inc.; provided,
however, that the junior status of this Note shall not impair or alter the
priority of Payee's security interests in the personal property described in the
Pledge and Security Agreement of even date herewith by and among ARC Capital,
ARC Subsidiary, Inc., Ventek, and Solin & Associates P.C. nor shall it relieve
Maker of its obligations to make payments to Payee in accordance with the terms
of paragraph 2 herein.
(e) Offset. This Note is subject to reduction by operation of Section 7.2
of the Asset Purchase Agreement dated July 24, 1996, by and among Maker, Ventek
and Ventek, Inc., which provides for the right of offset.
7. MISCELLANEOUS
(a) Elements of Risk. Payee recognizes that the amount due pursuant to this
Note, and the securities that may be issued upon conversion of the Note, involve
a high degree of risk in that (i) the Maker is an early stage company; (ii)
there can be no assurances that the Maker will sustain profitability or generate
sufficient cash flows to repay the Note; (iii) Payee may not be able to
liquidate the ARC Stock (or Subsidiary Stock) received upon possible conversion
of the Note; (iv) transferability of the ARC Stock (or Subsidiary Stock)
received upon possible conversion of the Note may be extremely limited; and (v)
in the event of a disposition of the ARC Stock (or Subsidiary Stock) received
upon possible conversion of the Note and exercise of the Stock Sale Option
pursuant to Section 5 of this Note, Payee could sustain the loss of his entire
investment. Payee further recognizes that there can be no assurance that a
Subsidiary IPO will ever take place.
The Payee acknowledges that he has (x) prior investment experience,
including investment in non-listed and non-registered securities, or he has
employed the services of an investment advisor, attorney or accountant to read
all of the documents furnished or made available by the Maker to evaluate the
merits and risks of entering into this Note and receiving ARC Stock upon
conversion of the Note or Subsidiary Stock upon the exercise of the Stock Sale
Option pursuant to Section 5 of this Note, and (y) that he recognizes the highly
speculative nature of this transaction and is able to bear the economic risk he
hereby assumes.
The Payee hereby represents that he has been furnished by the Maker during
the course of this transaction with all information regarding the Maker which he
had requested or desired to know; that all documents which could be reasonably
provided have been made available for his inspection and review; that he has
been afforded the opportunity to ask questions of and receive answers from duly
authorized officers of the Maker concerning the terms and conditions of the
Note, and any additional information which he had requested.
(b) Notices. Unless otherwise specified herein, all notices and other
communications given or made pursuant to this Note shall be in writing and shall
be deemed to have been duly given if sent by telecopy or by registered or
certified mail, return receipt requested, postage and fees prepaid, or otherwise
actually delivered to the address of the party to whom the notice is addressed
as set forth below:
If to Maker:
ARC Capital
Attn: President
2067 Commerce Drive
Medford, OR 97504
FAX: (541) 779-6838
If to Payee:
Ventek, Inc. (or its successor)
4217 W. Fifth Avenue
Eugene, OR 97402
FAX: (541) 344-3780
Maker and Payee may each from time to time change its address for receiving
notice by giving written notice thereof in the manner set forth above.
(c) Amendment; Waiver. This Note shall be binding upon and inure to the
benefit of Maker and Payee and their respective successors, heirs, assigns, and
personal representatives. No provision of this Note may be waived unless in
writing signed by Payee, and waiver of any one provision of this Note shall not
be deemed to be a waiver of any other provision.
(d) Attorneys' Fees. If there occurs an Event of Default, the undersigned
promises to pay all reasonable costs and expenses of collection and attorneys'
fees and court costs incurred by the holder hereof on account of such
collection, whether or not suit is filed in relation thereto.
(e) Severability. Whenever possible, each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Note shall be or become prohibited or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note.
(f) Headings. The section and subsection headings contained in this Note
are included for convenience only and form no part of the agreement between the
parties.
(g) Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of Oregon.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed by its
duly authorized officer as of the day and year first above written.
ARC CAPITAL
By: /s/ Alan R. Steel
-------------------------------------
Alan R. Steel
Chief Financial Officer
<PAGE>
EXHIBIT I
to Convertible Note Dated July 24, 1996
The Payee's right to convert the Note into ARC Stock shall be subject to
the achievement of certain sales and earnings objectives for the ARC Subsidiary
(as defined in that certain Asset Purchase Agreement dated July 24, 1996,
between the Company and Ventek) during the following periods: (i) from the date
of this Note to December 31, 1996, (ii) calendar 1997, and (iii) calendar 1998.
Upon achievement of both the sales and earnings objectives in any of the three
periods, or cumulatively at the end of the second period, Payee shall have the
right to convert up to one-third, or two thirds in case only the cumulative
objectives are met at the end of the second period, of the principal amount of
the Note into ARC Stock. If the period or cumulative sales and earnings
objectives are not met in any single period, the right to convert the related
increments shall cease to exist until the Maturity Date, at which time Payee may
exercise his option to convert such one-third increment and any other portion of
the Note not previously converted.
The Ventek sales and earnings objectives are as follows:
Period Sales Earnings
- ---------------------------------------------- ----------- ----------
From the date of the Note to December 31, 1996 $ 2,500,000 $ 723,875
Calendar 1997 6,000,000 2,250,750
Calendar 1998 9,000,000 3,660,750
If the sales and earnings objectives are achieved, the right to convert
shall commence on the date of completion of the audit of the related period
performed by Maker's independent public accountants, but not later than 90 days
from the end of such period. For purposes of determining sales and earnings, the
following definitions apply.
1. Sales: The sales price of goods and services shipped determined in
accordance with generally accepted accounting principles. The
percentage-of-completion revenue recognition method shall not be used for
purposes of computing sales.
2. Earnings: Income before taxes based on income determined in accordance
with generally accepted accounting principles applied on a consistent basis,
after deduction as expenses of doing business of (i) a 3% of sales management
fee, and (ii) interest and goodwill expenses arising from Maker's acquisition of
Ventek.
<PAGE>
AMENDMENT TO $2,250,000 NOTE
THIS AMENDMENT TO $2,250,000 NOTE (the "Note") ("Amendment") is made and
entered into on the 9th day of February 1999 by and among Advanced Machine
Vision corporation, a California corporation ("Maker"), Veneer Technology, Inc.,
an Oregon corporation ("Veneer") and Rodger A. Van Voorhis, Douglas Hickman,
Kenneth Winder and Thomas Thompson, (collectively, the "Shareholders"), with
reference to the following:
WHEREAS, the Maker issued the Note on July 24, 1996 in connection with its
acquisition of the assets and business of Ventek, Inc. ("Ventek") pursuant to an
Asset Purchase Agreement by and among the Maker, Ventek and the Shareholders;
WHEREAS, it is in the best interests of the parties to amend the Note to
extend the Maturity Date by one year.
NOW THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereby agree as follows:
1. In Paragraph 2 of the Note, "July 23, 1999" is changed to "July 23,
2000."
2. No other provision or term of the Note is hereby changed.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
ADVANCED MACHINE VISION CORPORATION
By: /s/ Alan R. Steel
-----------------------------------
Alan R. Steel
Vice President, Finance and CFO
VENEER TECHNOLOGY, INC.
By: /s/ Rodger A. Van Voorhis
-----------------------------------
Rodger A. Van Voorhis
President
SHAREHOLDERS
/s/ Douglas Hickman
--------------------------------------
Douglas Hickman
/s/ Kenneth Winder
--------------------------------------
Kenneth Winder
/s/ Thomas Thompson
--------------------------------------
Thomas Thompson
/s/ Rodger A. Van Voorhis
--------------------------------------
Rodger A. Van Voorhis
<PAGE>
EXHIBIT B
NOTE
$1,125,000 Date: July 24, 1996
On July 24, 1996, ARC Capital, a California corporation ("Maker" or "ARC
Capital"), Ventek, Inc. ("Payee") and the shareholders of Payee (the
"Shareholders") entered into an Asset Purchase Agreement pursuant to which Maker
acquired substantially all of the assets of Payee from Payee (the "Asset
Purchase Agreement"). The purchase price of the Payee assets includes this note.
FOR VALUE RECEIVED, Maker hereby promises to pay to the order of Payee the
principal sum of ONE MILLION, ONE HUNDRED AND TWENTY-FIVE THOUSAND Dollars
($1,125,000) without interest according to the terms and subject to the
conditions set forth in this note (the "Note").
I. PAYMENT IN ONE INSTALLMENT
The principal of the Note will be paid in one installment on July 23, 1999
(the "Maturity Date"). All payments will be made by Maker to Payee at such place
as Payee shall designate by written notice to the undersigned.
II. PAYMENT IN CASH OR STOCK
On the Maturity Date, the Maker will be entitled, in its sole discretion,
to satisfy the Note in cash or in Class A Common Stock of Maker ("Class A
Stock"); provided, however, that if at the Maturity Date the Class A Stock is
not traded on the Nasdaq Small Cap, NYSE, NMS, Nasdaq National Market, American
Stock Exchange or similar stock exchange, then Payee shall have the right, in
its sole discretion, to choose to receive payment under the Note in cash, if
such decision is approved by a majority of the holders of the outstanding
obligations due under the Note, with payment being made to the Payee at its
address set forth herein, within five business days of the Maturity Date.
III. PAYMENT IN STOCK
(1) If, in its sole discretion, Maker elects to pay the Note in Class A
Stock, the number of shares of Class A Stock to be issued to Payee shall equal
the principal sum of the Note divided by the Fair Market Value of the Class A
Stock at the Maturity Date; provided, however, that the entire principal sum
shall be satisfied, irrespective of the Fair Market Value of the Class A Stock,
by the issuance by Maker of one million and eight hundred thousand (1,800,000)
shares of Class A Stock. Example calculations of the amounts owed under this
subparagraph (1) are set forth in Exhibit A attached hereto.
(2) Notwithstanding anything to the contrary contained herein, under no
circumstances shall Maker be required to issue more than an aggregate of
1,800,000 shares of Class A Stock.
(3) The maximum of 1,800,000 shares that may be issued under this Note
and/or the payment in cash, is further subject to reduction by operation of
Section 7.2 of the Asset Purchase Agreement which provides for a right of
offset.
(4) This Note is junior in right of payment to that certain note in the
principal amount of $3,400,000 dated April 17, 1996, issued by ARC Capital and
originally payable to Ilverton International, Inc.; provided, however, that the
junior status of this Note shall not impair or alter the priority of Payee's
security interests in the personal property described in the Pledge and Security
Agreement of even date herewith by and among ARC Capital, ARC Subsidiary, Inc.,
Ventek, Inc. and Solin & Associates P.C. nor shall it relieve Maker of its
obligations to make payments to Payee in accordance with the terms of Articles
1, 2 and 3 herein.
(5) "Fair Market Value" shall mean the closing market price of the Class A
Stock on the last business day on or immediately prior to the Maturity Date.
(6) The Maker is not required to issue fractional shares of Class A Stock
upon payment of the Note and, in lieu thereof, will pay a cash adjustment based
upon the closing market price of the Class A Stock on the last business day on
or prior to the Maturity Date.
(7) If the Maker (i) pays a dividend or makes a distribution on its Class A
Stock in shares of its Stock; (ii) subdivides its outstanding shares of Class A
Stock into a greater number of shares or; (iii) combines its outstanding shares
of Class A Stock into a small number of shares; then the right to payment and
the Payment Price in effect immediately prior to such action shall be adjusted
so that the Payee may receive the number of shares of Class A Stock which he
would have owned immediately following such action if the Note had been paid
immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend and immediately after the effective date in the case of a
subdivision or combination.
(8) Upon payment of the Note with Class A Stock, Payee understands and
agrees that the Class A Stock to be issued to Payee will contain the following
legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares may not be sold or transferred
in the absence of such registration or an exemption therefrom under said
Act.
(9) Upon receipt of the shares of Class A Stock, Payee shall be entitled to
piggyback registration rights with respect to such shares as set forth in and
pursuant to Section 5.4(c) of the Asset and Purchase Agreement.
IV. NONTRANSFERABILITY OF RIGHT TO PAYMENT
The right to receive payment of the Note is transferable by the Payee only
to the Shareholders.
V. DEFAULT AND REMEDIES
(1) Events of Default. An Event of Default hereunder shall mean a default
in the payment of any of the principal as and when due and payable, and be
continuing for a period of 15 days following written notice thereof by Payee to
Maker.
(2) Remedies. At any time after the occurrence of an Event of Default the
Payee may, by written notice sent to the Maker by registered or certified mail,
return receipt requested, declare the entire amount of this Note to be forthwith
due and payable, whereupon this Note shall become forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived. Upon acceleration by Payee, Payee shall be entitled to all
remedies available to it at law or in equity.
VI. SECURITY FOR OBLIGATION
The payment of the Note is hereby secured by that certain Pledge and
Security Agreement by and among ARC Capital and ARC Subsidiary, Inc. on the one
hand and Ventek, Inc. and Solin & Associates P.C. on the other hand, of even
date herewith.
VII. MISCELLANEOUS
(1) Elements of Risk. Payee recognizes that the amount due pursuant to this
Note involves a high degree of risk in that (i) the Maker is an early stage
company; (ii) there can be no assurances that the Maker will sustain
profitability or generate sufficient cash flows to repay the Note.
The Payee acknowledges that be has (x) prior investment experience,
including Investment in non-listed and nonregistered securities, or be has
employed the services of an investment advisor, attorney or accountant to read
all of the documents furnished or made available by the Maker to evaluate the
merits and risks of entering into this Note and receiving Class A Stock upon
payment of the Note and (y) that he recognizes the highly speculative nature of
this transaction and is able to bear the economic risk he hereby assumes.
The Payee hereby represents that he has been furnished by the Maker during
the course of this transaction with all information regarding the Maker which he
had requested or desired to know; that all documents which could be reasonably
provided have been made available for his inspection and review; that he has
been afforded the opportunity to ask questions of and receive answers from duly
authorized officers of the Maker concerning the terms and conditions of the
Note, and any additional information which he had requested.
(2) Notice. Unless otherwise specified herein, all notices and other
communications given or made pursuant to this Note shall be in writing and shall
be deemed to have been duly given if sent by telecopy or by registered or
certified mail, return receipt requested, postage and fees prepaid, or otherwise
actually delivered to the address of the party to whom the notice is addressed
as set forth below:
If to Maker:
ARC Capital
Attn: President
2067 Commerce Drive
Medford, OR 97504
(FAX): (541) 779-6838
If to Payee:
Ventek, Inc.
Attn: Vice President - Operations
4217 W. 5th Avenue
Eugene, OR 97402
Maker and Payee may each from time to time change its address for receiving
notice by giving written notice thereof in the manner set forth above.
(3) Amendment; Waiver. This Note shall be binding upon and inure to the
benefit of Maker and Payee and their respective successors, heirs, assigns, and
personal representatives. No provision of this Note may be waived unless in
writing signed by Payee, and waiver of any one provision of this Note shall not
be deemed to be a waiver of any other provision.
(4) Attorney's Fees. If an Event of Default occurs, the undersigned
promises to pay all reasonable costs and expenses of collection and attorneys'
fees and court costs incurred by the holder hereof on account of such
collection, whether or not suit is filed in relation thereto.
(5) Severability. Whenever possible, each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Note shall be or become prohibited or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note.
(6) Headings. The section and subsection headings contained in this Note
are included for convenience only and form no part of the agreement between the
parties.
(7) Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of Oregon.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed by its
duly authorized officer as of the date and year first above written.
ARC CAPITAL
By: /s/ Alan R. Steel
-----------------------------------
Alan R. Steel
Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT A
to $1,125,000 Note
The following calculations are examples of the amounts in cash and in Class
A common stock (the "Class A Stock") of ARC Capital, a California corporation
("ARC"), that would be owed under (1) the $1.125,000 note dated July 24, 1996
(the "Note") between ARC and Ventek, Inc., an Oregon corporation ("Ventek"), and
(2) the stock appreciation rights agreement dated July 24, 1996 between ARC anad
Ventek (the "SAR Agreement"). All capitalized terms not defined herein shall
have the meaning set forth in the Note and the SAR Agreement.
(1) $5.00 FMV Example
(a) Amount owed under the Note.
If ARC pays the Note in Class A Stock, the number of shares of Class A
Stock to be issued to Ventek shall equal the principal sum of the Note
($1,125,000) divided by the Fair Market Value of the Class A Stock at Maturity
Date of the Note ($5.00), which shall equal 225,000 shares of Class A Stock:
$1,125,000
---------- = 225,000 shares
$5.00 (FMV)
(b) Amount owed under the SAR Agreement.
The SAR Agreement entitles Ventek to receive an amount payable equal to the
Fair Market Value at the Expiration Date ($5.00) of 1,800,000 shares of Class A
Stock ($9,000,000) minus $1.125,000, which shall equal $7,875,000:
(1,800,000) ($5.00) - $1,125,000 = $7,875,000
If ARC pays the amount owed under the SAR Agreement in Class A Stock,
Ventek is entitled to receive an amount payable equal to the Fair Market Value
at the Expiration Date ($5.00) of 1,800,000 shares of Class A Stock ($9,000,000)
minus $1,125,000 divided by the Fair Market Value of the Class A Stock ($5.00),
which shall equal 1,575,000 shares:
$7,875,000
---------- = 1,575,000 shares
$5.00 (FMV)
(2) $1.000 FMV Example
(a) Amount owed under the Note.
If ARC pays the Note in Class A Stock, the numder of shares of Class A
Stock to be issued to Ventek shall equal the principal sum of the Note
($1,125,000) divided by the Fair Market Value of the Class A Stock at the
Maturity Date of the Note $1.00), which shall equal 1,125,000 shares of Class A
Stock:
$1,125,000
---------- = 1,125,000 shares
$1.00 (FMV)
(b) Amount owed under the SAR Agreement.
The SAR Agreement entitles Ventek to receive an amount payable equal to the
Fair Market Value at the Expiration Date ($1.00) of 1,800,000 shares of Class A
Stock ($1,800,000) minus $1,125,000, which shall equal $675,000:
(1,800,000) ($1.00) - $1,125,000 = $675,000
If ARC pays the amount owed under the SAR Agreement in Class A Stock,
Ventek is entitled to receive an amount payable equal to the Fair Market Value
at the Expiration Date ($1.00) of 1,800,000 shares of Class A Stock ($1,800,000)
minus $1,125,000 divided by the Fair Market Value of the Class A Stock ($1.00),
which shall equal 675,000 shares:
$675,000
---------- = 675,000 shares
$1.00 (FMV)
<PAGE>
AMENDMENT TO $1,125,000 NOTE
AND STOCK APPRECIATION RIGHTS AGREEMENT
THIS AMENDMENT TO $1,125,000 NOTE (the "Note") AND STOCK APPRECIATION
RIGHTS AGREEMENT ("Agreement") ("Amendment") is made and entered into on the 9th
day of February 1999 by and among Advanced Machine Vision Corporation, a
California corporation ("Maker"), Veneer Technology, Inc., an Oregon corporation
(successor to Ventek, Inc., "Veneer") and Rodger A. Van Voorhis, Douglas
Hickman, Kenneth Winder and Thomas Thompson (collectively, the "Shareholders"),
with reference to the following:
WHEREAS, the Maker issued the Note and the Agreement on July 24, 1996 in
connection with its acquisition of the assets and business of Ventek, Inc.
("Ventek") pursuant to an Asset Purchase Agreement by and among the Maker,
Ventek and the Shareholders;
WHEREAS, it is in the best interests of the parties to amend the Note and
the Agreement.
NOW THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereby agree as follows:
1. Maker may prepay the Note in full by delivery to Veneer of 1,800,000
shares of Class A Common Stock ("Shares"), which Shares shall not be
transferable by Veneer until January 1, 2000.
2. The Shares may not be assigned or transferred while the restriction is
in effect. The certificates for Shares shall carry the following legend:
"The shares represented by this certificate are subject to the
provisions of those certain Agreements between the registered
owner, whose name appears on the face of this certificate, and
Advanced Machine Vision Corporation, dated as of February 9, 1999,
which restricts the transferability of the shares before January
1, 2000. A copy of such agreements are on file with the Secretary
of Advanced Machine Vision Corporation."
3. Upon prepayment in full of the Note by delivery of the Shares, all other
obligations of the parties pursuant to the Note and the Agreement shall cease.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
ADVANCED MACHINE VISION CORPORATION
By: /s/ Alan R. Steel
-----------------------------------
Alan R. Steel
Vice President, Finance and CFO
VENEER TECHNOLOGY, INC.
By: /s/ Rodger A. Van Voorhis
-----------------------------------
Rodger A. Van Voorhis
President
SHAREHOLDERS
/s/ Douglas Hickman
--------------------------------------
Douglas Hickman
/s/ Kenneth Winder
--------------------------------------
Kenneth Winder
/s/ Thomas Thompson
--------------------------------------
Thomas Thompson
/s/ Rodger A. Van Voorhis
--------------------------------------
Rodger A. Van Voorhis
<PAGE>
EXHIBIT C
ADVANCED MACHINE VISION CORPORATION
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT is made as of the 9th day of February, 1999, by and among
Advanced Machine Vision Corporation (the "Company"), Veneer Technology, Inc.
("Veneer") and Rodger A. Van Voorhis, Douglas Hickman, Kenneth Winder and Thomas
Thompson (collectively, the "Shareholders").
R E C I T A L
Pursuant to the Advanced Machine Vision Corporation 1997 Restricted Stock
Plan (the "Plan"), the Board of Directors of the Company (the "Plan Committee")
has authorized the granting to Veneer that number of restricted shares of Class
A Common Stock (the "Common Stock") of the Company specified in Paragraph 1
hereof upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. Number of Shares. Pursuant to said action of the Plan Committee, the
Company hereby grants to Veneer 350,000 shares of Common Stock of the Company
("Shares") subject to the restrictions and conditions set forth in Paragraphs 2
and 3.
2. Payment When Restrictions Lapse. Restrictions on the Shares shall lapse
upon the payment by Veneer to the Company of the amount of $1.25 per Share (the
fair market value of a Share on the date of this award) plus the amount of
applicable federal, state and local withholding taxes as required by Paragraph
3. The required payment hereunder can be made between February 1, 2000 (but not
earlier) and January 31, 2001. If payment is not made for all or a portion of
the Shares by January 31, 2001, the Shares shall be forfeited and returned to
the Company for cancellation.
3. Tax Withholding. As a condition to lapse of the restrictions on the
Shares, the Company may require Veneer to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the Shares upon their becoming nonforfeitable.
4. Nontransferability; Legend. Shares may not be assigned or transferred
while the restrictions are in effect. The certificates for Shares shall carry
the following legend:
The shares represented by this stock certificate have not been
registered under the Securities Act of 1933 in reliance upon an exemption
that the transaction does not involve any public offering. These shares may
not be sold or transferred unless a registration statement with respect
thereto has been declared effective under the Securities Act of 1933, or,
in the opinion of counsel for Advanced Machine Vision Corporation, an
exemption from registration exists.
The shares represented by this certificate are subject to the
provisions of that certain Agreement between the registered owner, whose
name appears on the face of this certificate, and Advanced Machine Vision
Corporation, dated as of February 9, 1999, which, among other things,
provides that the shares may not be assigned or transferred until certain
conditions are met. A copy of such Agreement is on file with the Secretary
of Advanced Machine Vision Corporation.
5. No Right to Employment. Nothing in this Award shall confer upon the
Shareholders any right to continue in the employ of the Company or its
subsidiaries or to continue to perform services for the Company or any
subsidiary, or shall interfere with or restrict in any way the rights of the
Company to discharge or terminate any Shareholder at any time for any reason
whatsoever, with or without good cause.
6. Dissolution of the Company. Any Shares subject to restrictions which are
not waived by the Plan Committee shall be forfeited and returned to the Company
for cancellation upon the dissolution of the Company.
7. Plan Governs. This Agreement is in all respects limited by and subject
to the express terms and provisions of that Plan, as it may be construed by the
Plan Committee. Employee hereby acknowledges receipt of a copy of the Plan.
8. Notices. All notices to the Company shall be addressed to the Chairman
of the Plan Committee of the Board of Directors of the Company at the principal
office of the Company at 3709 Citation Way #102, Medford, OR 97504 and all
notices to Veneer shall be addressed to Veneer at the address on file with the
Company or a subsidiary, or to such other address as either may designate to the
other in writing. A notice shall be deemed to be duly given if and when enclosed
in a properly addressed sealed envelope deposited, postage prepaid, with the
United States Postal Service. In lieu of giving notice by mail as aforesaid,
written notice under this Agreement may be given by personal delivery to
Employee or to the Chairman of the Plan Committee of the Board of Directors of
the Company (as the case may be).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
ADVANCED MACHINE VISION CORPORATION
By: /s/ Alan R. Steel
-----------------------------------
Alan R. Steel
Vice President, Finance and CFO
VENEER TECHNOLOGY, INC.
By: /s/ Rodger A. Van Voorhis
-----------------------------------
Rodger A. Van Voorhis
President
SHAREHOLDERS
/s/ Douglas Hickman
--------------------------------------
Douglas Hickman
/s/ Kenneth Winder
--------------------------------------
Kenneth Winder
/s/ Thomas Thompson
--------------------------------------
Thomas Thompson
/s/ Rodger A. Van Voorhis
--------------------------------------
Rodger A. Van Voorhis
