UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1996.
Commission file number: 0-20206
PERCEPTRON, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2381442
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23855 Research Drive,
Farmington Hills, Michigan 48335-2643
(Address of principal executive offices)
(810) 478-7710
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of common
stock as of October 31, 1996 was:
Common Stock, $0.01 par value 7,111,079
Class Number of shares
<PAGE>
PERCEPTRON, INC. AND SUBSIDIARIES
INDEX
PART 1. Financial Information
ITEM 1 Financial Statements
Condensed Consolidated Balance Sheets -- September 30, 1996
and December 31, 1995
Condensed Consolidated Statements of Income -- Three and
Nine Months ended September 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows -- Nine
Months ended September 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. Other Information
ITEM 4 Submission of Matters to a Vote of Security Holders
ITEM 6 Exhibits and Reports on Form 8-K
<PAGE>
PART 1 -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PERCEPTRON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
1996 1995
------------- -----------
ASSETS
Current assets:
Cash and cash equivalents $15,227,000 $14,990,000
Accounts receivable, net of
reserves of $191,000 and
$35,000 16,480,000 14,292,000
Inventory, net of reserves of
$761,000 and $700,000 5,884,000 4,114,000
Prepaid expenses and deferred
tax asset 725,000 2,658,000
---------- ----------
Total current assets 38,316,000 36,054,000
---------- ----------
Property and equipment:
Leased equipment 318,000 318,000
Machinery and equipment 9,001,000 7,696,000
Furniture and fixtures 466,000 492,000
Leasehold improvements 95,000 95,000
Construction in progress - building 3,614,000 0
Less accumulated depreciation
and amortization (6,656,000) (6,074,000)
---------- ----------
Total property and equipment 6,838,000 2,527,000
---------- ----------
Total assets $45,154,000 $38,581,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,142,000 $ 2,116,000
Accrued expenses 4,470,000 3,823,000
Accrued compensation and stock
option expense 1,912,000 2,284,000
---------- ----------
Total current liabilities 7,524,000 8,223,000
---------- ----------
Commitments and Contingencies ---- ----
Shareholders' equity:
Preferred stock, no par value,
1,000,000 shares authorized,
none issued ---- ----
Common stock, $.01 par value;
19,000,000 shares authorized,
7,084,000 and 6,723,000 issued
and outstanding at September 30,
1996 and December 31, 1995,
respectively 71,000 67,000
Cumulative translation adjustments (792,000) (474,000)
Additional paid-in capital 31,378,000 29,876,000
Retained earnings 6,973,000 889,000
---------- ----------
Total shareholders' equity 37,630,000 30,358,000
---------- ----------
Total liabilities and
shareholders' equity $45,154,000 $38,581,000
========== ==========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
<PAGE>
PERCEPTRON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1996 1995 1996 1995
-------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Net sales $12,856,000 $9,311,000 $33,581,000 $23,903,000
Cost of sales 4,716,000 3,488,000 13,088,000 9,224,000
---------- --------- ---------- ----------
Gross profit 8,140,000 5,823,000 20,493,000 14,679,000
Selling, general and admini-
strative expense 2,928,000 2,246,000 8,194,000 6,609,000
Engineering, research and
development expense 1,475,000 1,194,000 4,194,000 3,300,000
---------- ---------- ---------- ----------
Income from operations 3,737,000 2,383,000 8,105,000 4,770,000
Interest income, net 248,000 133,000 587,000 393,000
---------- ---------- ---------- ---------
Income before provision for
federal income taxes 3,985,000 2,516,000 8,692,000 5,163,000
Provision for federal income
taxes 1,196,000 0 2,608,000 0
---------- ---------- ---------- ----------
Net income $ 2,789,000 $ 2,516,000 $ 6,084,000 $ 5,163,000
========== ========== ========== ==========
Net income per weighted average
share $ .36 $ .34 $ .80 $ .72
========== ========== ========== ==========
Weighted average common and
common equivalent shares 7,679,565 7,310,319 7,600,415 7,186,967
========== ========== ========== ==========
The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>
<PAGE>
PERCEPTRON, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
-----------------------------------
1996 1995
------------- -------------
Cash flows from operating activities:
Net income $ 6,084,000 $ 5,163,000
------------ ------------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 582,000 518,000
Changes in operating assets and
liabilities:
Accounts receivable (2,403,000) (409,000)
Inventory (1,770,000) (1,695,000)
Prepaid expenses and other
current assets 1,933,000 (248,000)
Accounts payable (974,000) 458,000
Accrued expenses 275,000 289,000
---------- ----------
Total adjustments (2,357,000) (1,087,000)
---------- ----------
Net cash provided by operating
activities 3,727,000 4,076,000
---------- ----------
Cash flows used in investing activities:
Capital expenditures (4,893,000) (1,406,000)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of short-term
debt ---- 988,000
Proceeds from exercise of options and
other 1,506,000 493,000
Repayment of short term debt ---- (1,275,000)
---------- ----------
Net cash provided by financing
activities 1,506,000 206,000
---------- ----------
Effect of exchange rates on cash and
cash equivalents (103,000) 26,000
Net increase in cash and cash
equivalents 237,000 2,902,000
Cash and cash equivalents, beginning
of period 14,990,000 7,917,000
---------- ----------
Cash and cash equivalents, end of
period $15,227,000 $10,819,000
========== ==========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
<PAGE>
PERCEPTRON, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Notes 1. Financial Statement Presentation
Information for the three and nine months ended September 30, 1996
and 1995 is unaudited, but includes all adjustments, consisting of normal
recurring adjustments, which the management of Perceptron, Inc.
("Perceptron" or the "Company") considers necessary for fair presentation of
financial position, results of operations and cash flows. In accordance
with the instructions for the completion of the Quarterly Report on Form
10Q, certain information and footnote disclosures necessary to comply with
generally accepted accounting principles have been condensed or omitted.
Prior year amounts for engineering, research, and development and selling,
general, and administrative expenses have been reclassified to conform to
the 1996 presentation.
These financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
which contains a summary of Perceptron's accounting principles and other
footnote information. The results of operations for any interim period are
not necessarily indicative of the results of operations for a full year.
Note 2. Three-for-Two-Stock Split
The Company's Board of Directors announced a three-for-two stock
split of the Company's Common Stock which was effected in the form of a
stock dividend payable on November 30, 1995 to shareholders of record on
November 20, 1995. All reported historical information has been adjusted
accordingly to reflect the impact of this stock split.
Note 3. Inventory
Inventory is stated at the lower of cost or market. The cost of
inventory is determined by the first in, first out (FIFO) method.
Inventory, net of reserves, is comprised of the following:
September 30, December 31,
1996 1995
------------ ------------
Component parts $4,126,000 $3,022,000
Work in process 1,204,000 641,000
Finished goods 554,000 451,000
--------- ---------
Total $5,884,000 $4,114,000
========= =========
Note 4. Net Income Per Share
Net income per common and common equivalent share is calculated
based upon the weighted average number of shares of Common Stock
outstanding, adjusted for the dilutive effect of stock options and warrants,
using the treasury stock method.
Note 5. Commitments and Contingencies
The Company may, from time to time, be subject to legal proceedings
and claims. Litigation involves many uncertainties. Management is
currently unaware of any significant pending litigation affecting the
Company, other than the indemnification matter and the complaint discussed
in the following paragraphs.
The Company has been informed that certain of its customers have
received allegations of possible patent infringement involving processes and
methods used in the Company's products. One such customer is currently
engaged in litigation relating to such matter. This customer has notified
various companies, including the Company from which it has purchased such
<PAGE>
equipment, that it expects the suppliers of such equipment to indemnify such
customer, on a pro-rata basis, for expenses and damages, if any, incurred in
this matter. Management believes, however, that the processes used in the
Company's products were independently developed without utilizing any
previously patented process or technology. Because of the uncertainty
surrounding the nature of any possible infringement and the validity of any
such claim or any possible customer claim for indemnity, it is not possible
to estimate the ultimate effect, if any, of this matter on the Company's
financial position.
On March 13, 1996, a complaint was filed naming the Company as a
defendant along with two other co-defendants, in an action alleging that the
Company's TriCam sensor violates a patent held by the plaintiff and seeking
preliminary and permanent injunctions and damages. Management believes that
its TriCam sensor was independently developed without utilizing any
previously patented process or technology and intends to vigorously defend
its position.
Note 6. Credit Facilities
The Company has unsecured bank credit facilities of $4.0 million US
and 1.0 million DM, which may be used to finance working capital needs and
equipment purchases or capital leases. Any borrowings for working capital
needs will bear interest at the bank's prime rate (8.25% as of November 5,
1996) and any borrowings to finance equipment purchases will bear interest
at the bank's prime rate plus 1/2%. These credit facilities expire on May
31, 1997 unless canceled earlier by the Company or the bank. At September
30, 1996, the Company had no outstanding liabilities under these facilities.
Note 7. Foreign Exchange Contracts
The Company has implemented a limited hedging program to minimize
the impact of foreign currency fluctuations. As the Company exports
products, it generally enters into limited hedging transactions relating to
the accounts receivable arising as a result of such shipment. These
transactions involve the use of forward contracts. At September 30, 1996,
the Company had entered into forward contracts covering $558,000 US (850,000
DM). These contracts mature on various dates through December 1996. The
fair market value of the contracts at September 30, 1996 was $557,000,
resulting in a net payable of $1,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Net sales. The Company's net sales increased by 38% from $9.3
million in the third quarter of 1995 to $12.9 million in the third quarter
of 1996. The increase of $3.6 million in net sales is primarily
attributable to sales to domestic automotive customers of $6.7 million, up
by $1.1 million from the same quarter last year, and international
automotive sales of $5.6 million, up by $2.1 million from the same quarter
last year. The remainder of the net sales increase is due to non-automotive
customer deliveries.
New order bookings during the third quarter of 1996 totaled $7.9
million compared to $9.9 million in the third quarter of 1995. The decrease
of $2.0 million is attributable to a decline in orders of $3.0 million
during the third quarter of 1996 from European and Asian customers, at $2.2
million in 1996 from $5.2 million in 1995, partially offset by an increase
in orders by domestic automotive customers of $5.7 million, up by $1.0
million on a comparative basis over $4.7 million in the third quarter of
1995.
New order bookings for the four month period ended October 31, 1996
amounted to $12.8 million versus $12.6 million in the four month period of
1995.
<PAGE>
New order bookings are dependent on the timing of customer re-
tooling programs, and accordingly may vary significantly from quarter to
quarter. The amount of new order bookings during any particular period is
not necessarily indicative of the future operating performance of the
Company.
Gross profit. Gross profit increased from $5.8 million in the third
quarter of 1995 to $8.1 million in the third quarter of 1996. Gross profit
as a percentage of net sales increased from 62.5% in the third quarter of
1995 to 63.3% in the third quarter of 1996. The increase is due primarily
to manufacturing efficiencies generated on the higher sales volume.
Selling, general and administrative expense. Selling, general and
administrative expenses increased from $2.2 million in the third quarter of
1995 to $2.9 million in the third quarter of 1996. This change is due
principally to increased personnel and related expenses to support the 1996
operating activity. As a percentage of sales, selling, general and
administrative expenses decreased from 24.1% in the third quarter of 1995,
to 22.8% in the third quarter of 1996, due primarily to the higher sales
base.
Engineering, research and development expense. Engineering,
research and development expenses increased from $1.2 million in the third
quarter of 1995, to $1.5 million in the third quarter of 1996, due primarily
to increased personnel. As a percentage of net sales, engineering, research
and development expense decreased from 12.8% in the third quarter of 1995 to
11.5% in the third quarter of 1996, due primarily to the higher sales base.
Interest income, net. Interest income increased from $133,000 in
the third quarter of 1995, to $248,000 in the third quarter of 1996, due
primarily to higher cash balances and related investing activities.
Income before provision for federal income taxes. During the third
quarter of 1995, the Company had income before provision for federal income
taxes of $2.5 million, representing 27.0% of net sales, as compared to
income before provision for federal income taxes of $4.0 million,
representing 31% of net sales, in the third quarter of 1996.
Provision for federal income taxes. For U.S. federal income tax
reporting purposes, as of December 31, 1995, net operating loss
carryforwards were available in the approximate amount of $3.6 million.
Investment tax and research and development credits of $860,000 were also
available to benefit future reported U.S. taxable earnings. The Company
also had, as of December 31, 1995, tax loss carryforwards available at
foreign subsidiaries of approximately $4.0 million. Because of the
availability of these tax loss carryforwards, there was no provision for
federal income taxes during 1995.
For financial reporting purposes, because the Company anticipated
utilizing certain of these carryforwards and credits in 1996, a deferred tax
asset was recorded as of December 31, 1995, representing the estimated tax
benefit of these items. For the three months ended September 30, 1996, the
Company recorded a $1.2 million provision for federal income taxes,
representing an estimated effective tax rate of 30%.
Net income. During the third quarter of 1995, the Company had net
income of $2.5 million representing 27.0% of net sales, as compared to net
income of $2.8 million representing 21.7% of net sales in the third quarter
of 1996.
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Net sales. The Company's net sales increased by 40% from $23.9 million in
the first nine months of 1995 to $33.6 million in the first nine months of
1996. The increase of $9.7 million in net sales is attributable primarily
to sales to domestic automotive customers of $20.9 million, up $5.1 million
from $15.8 million in the same period last year. International automotive
sales for the first nine months of 1996 totaled $10.7 million, up $2.8
million from $7.9 million in the same nine month period last year.
Quarterly fluctuations in these geographic segments are due primarily to the
<PAGE>
timing of customer delivery requirements. The remainder of the net sales
increase is due to non-automotive customer deliveries.
New order bookings for the nine months ended September 30, 1996
totaled $33.2 million compared to $28.9 million in the comparable period of
1995. The increase of $4.3 million is attributable to a $4.2 million
increase in orders from domestic automotive customers up to $23.2 million
for the first nine months of 1996 from $19.0 million in 1995, and an
increase of $0.1 million from European and Asian automotive customers, up to
$10.0 million for the first nine months of 1996 from $9.9 million in 1995.
New order bookings for the ten month period ended October 31, 1996
totaled $38.0 million, a 20% increase over the prior year's ten month period
amount of $31.6 million.
New order bookings are dependent on the timing of customer re-
tooling programs, and accordingly may vary significantly from quarter to
quarter. The amount of new order bookings during any particular period is
not necessarily indicative of the future operating performance of the
Company.
Backlog at September 30, 1996 totaled $15.8 million compared to
$16.3 million at September 30, 1995 and $16.3 million at December 31, 1995.
The level of order backlog at any particular time is not necessarily
indicative of the future operating performance of the Company.
Gross profit. Gross profit increased from $14.7 million in the
first nine months of 1995 to $20.5 million in the first nine months of 1996.
Gross profit as a percentage of net sales decreased from 61.4% in the first
nine months of 1995 to 61.0% in the first nine months of 1996. The decrease
is due primarily to the lower gross profit percentage associated with one
specific sale by the Company of a new product, which was integrated into
equipment acquired from an original equipment manufacturer ("OEM") and sold
as a complete system during the first quarter of 1996. The Company may, in
the future, sell this product to OEM's who will in turn resell these systems
after integrating them into their equipment. The decrease is also due to
lower gross profit percentages on new products which are not being
manufactured in significant quantities at this time.
Selling, general and administrative expense. Selling, general and
administrative expenses increased from $6.6 million in the first nine months
of 1995 to $8.2 million in the first nine months of 1996. This change is
due principally to increased personnel and related expenses to support the
1996 operating activity. As a percentage of sales, selling, general and
administrative expenses decreased from 27.6% in the first nine months of
1995, to 24.4% in the first nine months of 1996, due primarily to the higher
sales base.
Engineering, research and development expense. Engineering,
research and development expenses increased from $3.3 million in the first
nine months of 1995, to $4.2 in the first nine months of 1996, due primarily
to increased personnel. As a percentage of net sales, engineering, research
and development expense decreased from 13.8% in the first nine months of
1995 to 12.5% in the first nine months of 1996 due primarily to the higher
sales base.
Interest income, net. Interest income increased from $393,000 in
the first nine months of 1995, to $587,000 in the first nine months of 1996,
due to higher cash balances and related investing activities.
Income before provision for federal income taxes. During the first
nine months of 1995, the Company had income before provision for federal
income taxes of $5.2 million, representing 21.6% of net sales, as compared
to income before provision for federal income taxes of $8.7 million,
representing 25.9% of net sales, in the first nine months of 1996.
Provision for federal income taxes. For U.S. federal income tax
reporting purposes, as of December 31, 1995, net operating loss
carryforwards were available in the approximate amount of $3.6 million.
<PAGE>
Investment tax and research and development credits of $860,000 were also
available to benefit future reported U.S. taxable earnings. The Company
also had, as of December 31, 1995, tax loss carryforwards available at
foreign subsidiaries of approximately $4.0 million. Because of the
availability of these tax loss carryforwards, there was no provision for
federal income taxes during 1995.
For financial reporting purposes, because the Company anticipated
utilizing certain of these carryforwards and credits in 1996, a deferred tax
asset was recorded as of December 31, 1995, representing the estimated tax
benefit of these items. For the nine months ended September 30, 1996, the
Company recorded a $2.6 million provision for federal income taxes,
representing an estimated effective tax rate of 30%.
Net income. During the first nine months of 1995, Perceptron had
net income of $5.2 million representing 21.6% of net sales, as compared to
net income of $6.1 million representing 18.1% of net sales in the first nine
months of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents as of September 30, 1996
totaled $15.2 million, as compared with $15.0 million as of December 31,
1995. This increase was due primarily to net income and proceeds from stock
options exercised during the period offset by cash outlays to fund increased
receivables and inventory levels, capital expenditures and reduced current
liabilities.
The Company has unsecured credit facilities totaling $4.0 million
U.S. and 1.0 million DM. These facilities may be used to finance working
capital needs and equipment purchases or capital leases. Any borrowings for
working capital needs will bear interest at the bank's prime rate (8.25% as
of November 5, 1996) and any borrowings to finance equipment purchases will
bear interest at the bank's prime rate plus 1/2%. The credit facilities
expire on May 31, 1997 unless canceled earlier by the Company or the bank.
As of September 30, 1996 and December 31, 1995, Perceptron had no short-term
or long-term debt under these facilities.
The Company's working capital increased to $30.8 million at
September 30, 1996, from $27.8 million at December 31, 1995. Accounts
receivable increased from $14.3 million as of December 31, 1995 to $16.5
million as of September 30, 1996 primarily as a result of increased sales.
The increase of approximately $1.8 million in inventory is due primarily to
an increase in component parts inventory to support the 1996 production
plan. The decrease of $0.7 million in current liabilities is due primarily
to the payments of 1995 performance bonuses and decreased accounts payable.
Prepaid and deferred tax asset has been reduced $1.9 million due primarily
to the federal income tax provision established for the nine months.
The Company does not believe that inflation has had any significant
impact on historical operations, and does not expect any significant near-
term inflationary impact.
On March 28, 1996, the Company exercised its option to purchase, for
approximately $5.4 million, certain land and a new facility it had
previously agreed to lease. Construction of this facility, which will be
financed by the Company, began in April 1996. The building is expected to
be completed by December 1996 at a total cost, with improvements, of $6.0
million. Through September 30, 1996, $3.6 million in progress payments have
been recorded on the new facility.
The Company believes that available cash on hand and existing credit
facilities will be sufficient to fund its currently anticipated 1996 cash
flow requirements.
<PAGE>
PART II -- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on July 12,
1996 at which the following action was taken:
1. The Shareholders elected the following persons as the
Company's Board of Directors, and the results of the vote on
this matter were as follows:
Broker
Name For Against Abstained Non-Votes
- ---- --- ------- --------- ---------
Dwight D. Carlson 5,567,023 10,480 0 1,296,892
Philip J. DeCocco 5,516,480 61,023 0 1,296,892
Paul L. McDermott 5,567,023 10,480 0 1,296,892
Robert S. Oswald 5,567,023 10,480 0 1,296,892
Alfred A. Pease 5,567,023 10,480 0 1,296,892
Harry T. Rein 5,565,023 12,480 0 1,296,892
Paul E. Rice 5,565,023 12,480 0 1,296,892
Louis R. Ross 5,565,023 12,480 0 1,296,892
Terryll R. Smith 5,521,875 55,628 0 1,296,892
2. The Shareholders approved an amendment to the 1992 Stock
Option Plan to increase the shares of Common Stock available
for grant under such plan by 250,000 shares and to restrict
the number of shares of Common Stock which may be granted to
any salaried employee in any fiscal year to 200,000. As to
this proposal, 4,206,691 shares voted "for", 1,318,534
shares voted "against", 51,078 shares "abstained", and
1,298,092 were broker non-votes.
3. The Shareholders approved an amendment to the Company's
Directors Stock Option Plan to increase the shares of Common
Stock available for grant under such plan by 63,000 shares.
As to this proposal 4,271,224 shares voted "for", 1,252,440
shares voted "against", 52,639 shares "abstained", and
1,298,092 were broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
10.53 Amended and Restated 1992 Stock Option Plan
10.54 Amended and Restated Employee Stock Purchase Plan
10.56 Amended and Restated Directors Stock Option Plan
11. Statement re: computation of earnings per share
27 Financial Data Schedule
(B) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Perceptron, Inc.
(Registrant)
Date: November 5, 1996 By: /S/ Alfred A. Pease
--------------------------
Alfred A. Pease, President
and Chief Executive Officer
Date: November 5, 1996 By: /S/ John G. Zimmerman
--------------------------
John G. Zimmerman,
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 5, 1996 By: /S/Paul J. Tripodi
--------------------------
Paul J. Tripodi, Controller
(Principal Accounting Officer)
PERCEPTRON, INC.
1992 Stock Option Plan
(Amended and Restated October 31, 1996)
SECTION 1. Purpose
The purpose of the Perceptron, Inc. 1992 Stock Option Plan (this
"Plan") is to encourage Employees (as defined in Section 7) of Perceptron,
Inc. (the "Company") to acquire Common Stock of the Company ("Stock")
through Incentive Stock Options (as hereinafter defined) and to permit the
Company to grant Non-qualified Options (as hereinafter defined) to key
persons, including Employees of the Company. It is believed that this Plan
will encourage Employees to have a greater financial investment in the
Company through ownership of its Common Stock, will further stimulate their
efforts on the Company's behalf, will tend to maintain and strengthen their
desire to remain with the Company, and generally will be in the interest of
the Company and its shareholders. Options granted under this Plan may be of
two types: (a) options designed to comply with Section 422A of the Internal
Revenue Code of 1986, as amended ("Incentive Stock Options"); and (b) other
options ("Non- qualified Options"). Except where otherwise indicated, the
provisions of this Plan shall apply to both Incentive Stock Options and
Non-qualified Options.
SECTION 2. Administration
2.1 Administration by Committee. This Plan shall be
administered by a Committee of the Board of Directors (the "Committee"), as
determined by resolution of the Board of Directors. The Board of Directors
of the Company shall select the members of the Committee and may, from time
to time, appoint members of the Committee in substitution for or in addition
to members previously appointed. Vacancies on the Committee, however
caused, shall be filled by appointment by the Board of Directors.
Notwithstanding the foregoing and Section 2.2 below, effective May 21, 1993,
the President of the Company shall be authorized to grant options under the
terms of the Plan to key Employees, who are not officers or directors of the
Company for purposes of Section 16(b) of the Securities Exchange Act of
1934, as amended. The Committee shall designate the maximum number of
shares of Stock available under the Plan which may be subject to options
granted by the President, which number may be revised from time to time by
the Committee.
2.2 Powers. The Committee shall have full and final authority
to administer this Plan on behalf of the Company. Subject to the provisions
of this Plan, this authority includes but is not limited to the power to:
(a) determine the persons to whom options shall be
granted;
(b) determine the number of shares to be covered by
options granted to each such person;
(c) determine the price to be paid for the shares upon
the exercise of each option:
(d) prescribe the period within which options may be
exercised:
(e) grant options conditionally or unconditionally; and
(f) prescribe the form or forms of the Stock Option
Agreements evidencing the grant of options under this Plan.
2.3 Additional Powers. The Committee may establish, from time
to time, such regulations, provisions and procedures, within the terms of
this Plan, as, in the opinion of the Committee, may be advisable in the
administration and interpretation of this Plan. The Committee shall keep
minutes of its meetings. A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or the acts approved in writing by a majority of
the Committee, shall be the acts of the Committee.
SECTION 3. Eligibility
3.1 Eligible Persons. Only Employees shall be eligible to be
granted Incentive Stock Options under this Plan. Employees and other
persons shall be eligible to be granted Non-qualified Options under this
Plan. No member of the Committee may receive an option under this Plan.
3.2 Relevant Factors. The Committee shall grant options to
those persons who, in the opinion of the Committee, are capable of
contributing to the successful performance of the Company.
3.3 Restrictions. No Employee owning stock possessing more than
10% of the total combined voting power of all classes of stock of the
Company, determined on the date on which the option is granted, shall be
eligible for the grant of an Incentive Stock Option unless the exercise
price for such option is at least 110% of the fair market value on the date
of grant of the shares subject to the option, and the option is not
exercisable more than five years after the date of grant.
SECTION 4. Granting of Options
4.1 Shares Available for Options. The Board of Directors shall
reserve for purposes of this Plan, out of the authorized but unissued Stock
or out of shares of Stock held in the Company's Treasury, or partly out of
each, a total of 1,814,286 shares of Stock, after taking into account the
Company's reverse stock split effected on May 5, 1992 and stock split
effected November 30, 1995, (or the number and kind of shares of Stock or
other securities which, in accordance with Section 8 of this Plan, shall be
substituted for such shares or to which such shares shall be adjusted).
4.2 Effect of Expiration, Termination or Surrender. In the
event that an option granted under the Plan expires or is terminated
unexercised as to any shares covered by such option, such shares shall
thereafter be again available for the granting of options under this Plan.
In the event that an option granted under the Plan is exercised on or after
October 21, 1994 by the delivery of shares of Common Stock previously
acquired upon the exercise of Options issued under the Plan or through the
retention of options procedure as described in Section 5.3 below, the shares
of Common Stock so delivered to the Company and underlying such retained
options shall thereafter be again available for the granting of options
under this Plan.
4.3 Term of Options. Subject to the provisions of this Section
4.3, the Committee shall have full discretion to determine the period during
which an option may be exercised. In no event shall any option granted
under this Plan, by its terms, (i) expire more than ten years from the date
on which it was granted, or (ii) be exercisable by any person subject to
Section 16(b) of the Securities Exchange Act of 1934 any sooner than six
months after the date of grant. No Incentive Stock Option shall be
exercisable by any Employee who has not been in the continuous employ of the
Company for a period of one year from the date of grant.
4.4 Option Price. The Committee shall, in its discretion,
establish, at the time at which any option is granted, the purchase price of
each share of stock covered by such option; provided, however, that the
option price of an option shall not be less than 100% of the fair market
value of the shares covered by the option on the date such option is
granted. The option price will be subject to adjustment in accordance with
the provisions of Section 8 of this Plan. For purposes of this Plan, the
fair market value of each share shall be deemed to be:
(a) the average of the closing sales prices of the
Stock on the principal securities exchange on which the Stock may at the
time be listed (or, if there have been no sales on such exchange on any day,
the average of the closing high bid and low asked prices on such exchange at
the end of such day) for the five (5) consecutive trading days on such
exchange immediately preceding the date of grant of the option; or
(b) if the Stock is not listed on a securities
exchange, the average of the closing sales prices of the Stock on The Nasdaq
Stock Market (or, if there have been no sales on The Nasdaq Stock Market on
any such day, the average of the closing high bid and low asked prices on
The Nasdaq Stock Market at the end of such day) for the five (5) consecutive
trading days on The Nasdaq Stock Market immediately preceding the date of
grant of the option; or
(c) if the Stock is not listed on any domestic stock
exchange or The Nasdaq Stock Market, the average of the mean between the
closing high bid and low asked price as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") (or, if not so
reported, by the system then regarded as the most reliable source of such
quotations) for the five (5) consecutive trading days on NASDAQ or other
such system immediately preceding the date of grant of the option; or
(d) if none of the foregoing clauses apply, the fair
value as determined in good faith by the Committee.
4.5 Non-Transferability of Options. Options granted under this
Plan shall not be transferable by the optionee otherwise than by will, or if
the optionee dies intestate, by the laws of the descent and distribution of
the jurisdiction of domicile of the optionee at the time of his or her
death, and such options shall be exercisable during his or her lifetime only
by the optionee. If the optionee is declared legally incompetent, the
optionee's duly appointed personal representative may exercise any options
which the optionee was eligible to exercise at the time when the optionee
was declared incompetent, to the extent provided in Section 6 of this Plan.
4.6 Limitations on Grants of Incentive Stock Options. The
aggregate fair market value of the underlying shares (determined as of the
date of grant) as to which Incentive Stock Options granted on or after
February 23, 1993 under the Plan (including a plan of a subsidiary) may
first be exercised by an optionee during any calendar year shall not exceed
$100,000. To the extent that an option intended to constitute an Incentive
Stock Option shall violate the foregoing $100,000 limitation, the portion of
the option that exceeds the $100,000 limitation shall be deemed to
constitute a Non-qualified Stock Option.
4.7 Written Confirmation of Grants. Each option granted under
this Plan shall be confirmed by a Stock Option Agreement which shall be
executed by the Company and by the person to whom the option is granted.
Each Stock Option Agreement shall clearly state whether the option granted
thereunder (or any portion thereof) constitutes an Incentive Stock Option or
a Non-qualified Stock Option.
4.8 Restriction on Grant. Effective on and after February 14,
1996, no optionee who is a salaried employee shall be eligible to receive
aggregate option grants under this Plan, in any fiscal year of the Company,
to purchase more than 200,000 shares of the Stock.
SECTION 5. Exercise of Options
5.1 Exercise. Each option granted under this Plan shall be
exercisable on such date or dates and during such period and for such number
of shares as shall be provided in the Stock Option Agreement evidencing such
option. In the event of options exercisable in installments, the right to
purchase shares shall be cumulative so that when the right to purchase any
shares has accrued under any such option, such shares or any part thereof
may be purchase at any time thereafter until the expiration or termination
of the option.
5.2 Notice of Exercise. An optionee electing to exercise an
option granted under this Plan shall give written notice to the Company.
Such notice shall state the number of full shares (no fractional shares may
be purchased) to which the election applies.
5.3 Purchase of Shares. The option price of each share
purchased pursuant to the exercise of an option shall be paid in full in
cash or in shares of Common Stock at the time of purchase; or, in the case
of non-qualified stock options or in the case of Incentive Stock Options
issued on or after May 21, 1993, the option exercise price may be paid by
delivery to the Company of a properly executed exercise notice, acceptable
to the Company, together with irrevocable instructions to the participant's
broker to deliver to the Company sufficient cash to pay the exercise price
and any applicable income and employment withholding taxes, in accordance
with a written agreement between the Company and the brokerage firm
("cashless exercise" procedure); or, in the case of non-qualified stock
options or in the case of Incentive Stock Options issued on or after October
21, 1994, the option exercise price may be paid through the retention by the
Company of then exercisable options issued to the Optionee under the Plan
(the "retained options"), with the value of the retained options equal to
the difference between the fair market value of the shares underlying the
retained options (determined as of the date of exercise of the options), and
the exercise price of such options ("retention of options" procedure); or,
in the case of Incentive Stock Options, may be paid in three installments as
hereinafter provided; or, a combination of the foregoing. In the event of
payments in installments, 50% of the purchase price shall be paid on the
date of exercise and on such date the exercising Employee shall execute and
deliver to the Company such Employee's promissory note making such Employee
personally liable to pay the balance of the purchase price in two
installments on the first and second anniversaries of the date of exercise.
Such promissory note shall bear interest at a rate determined by the
Committee and shall be secured by a pledge of the Stock being purchased.
Until the optionee has been issued a certificate or certificates for the
shares so purchased, he or she shall possess no rights of a record holder
with respect to any such shares. In the event that an optionee exercises
both an Incentive Stock Option and a Non-qualified Stock Option, separate
share certificates shall be issued for shares acquired pursuant to the
Incentive Stock Option and for shares acquired pursuant to the Non-qualified
Stock Option. Options retained by the Company under the retention of
options procedure shall expire and be of no further force and effect as of
the date retained.
5.4 Prior Incentive Stock Options. Each Incentive Stock Option
granted under this Plan, by its terms, shall not be exercisable while there
is outstanding any Incentive Stock Option previously granted to the same
individual by the Company. An Incentive Stock Option shall be treated as
outstanding until such option is exercised in full or expires solely by
reason of lapse of time. Notwithstanding the foregoing, no Incentive Stock
Option granted on or after February 23, 1993 shall be subject to the
foregoing sequential exercise rule.
5.5 Delivery and Registration of Stock. The Company shall not
be required to deliver any shares of Stock under this Plan prior to (i) the
admission of such shares to listing on any stock exchange on which such
shares may then be listed and (ii) the completion of such registration or
other qualification of such shares under any federal, state or local law,
rule or regulation as the Committee shall determine to be necessary or
advisable.
SECTION 6. Termination of Employment
6.1 General. If the employment by the Company of any optionee
who is an Employee shall terminate for any reason, other than by death or
total and permanent disability, any option which such optionee is entitled
to exercise on the date of such termination shall be exercisable by the
optionee at any time on or before the earlier of the expiration date of the
option or three months after the date of such termination, but only to the
extent of the accrued right to purchase at the date of such termination.
6.2 Disability. If the employment of any optionee who is an
Employee shall be terminated because of total and permanent disability of
such optionee, the option shall be exercisable by the optionee at any time
on or before the earlier of the expiration date of the option or one year
after the date of such termination of employment, but only to the extent of
the accrued right to purchase at the date of such termination.
6.3 Death. If any optionee shall die while employed by the
Company and, if at the date of death, the optionee shall be entitled to
exercise an option, such option may be exercised by any person who acquires
the option by bequest or inheritance or by reason of the death of the
optionee, or by the executor or administrator of the estate of the optionee,
at any time before the earlier of the expiration date of the option or one
year after the date of death of the optionee, but only to the extent of the
accrued right to purchase at the date of death.
SECTION 7. Employment, Rights, as a Shareholder and Benefit Plans
Neither this Plan nor any action taken hereunder shall give any
Employee any right to be retained in the employ of the Company or any rights
as a shareholder of the Company prior to the issuance or transfer of shares
of Stock to his or her name. Awards under this Plan are discretionary and
are not a part of regular salary. Awards may not be used in determining the
amount of compensation for any purpose under the benefit plans of the
Company. For purposes of this Plan, "Employee" means full time or part time
employees of the Company and its subsidiaries, who are executives,
managerial or other salaried employees, including officers, whether or not
directors of the Company.
SECTION 8. Changes in Capital Structure
In the event of changes in the outstanding Stock by reason of Stock
dividends, Stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant changes in the
capital structure of the Company, an appropriate adjustment shall be made by
the Committee in the number of shares and kind of stock for which options
may be or may have been granted under the Plan, to the end that the
proportionate interests shall be maintained as before the occurrence of such
event.
SECTION 9. Amendment, Suspension or Termination
9.1 Suspension or Termination. The Committee may suspend this
Plan or any part thereof at any time or may terminate the Plan in its
entirety. Awards shall not be granted after Plan termination. Options
granted prior to the suspension or termination of this Plan may not be
cancelled solely because of such suspension or termination, except with the
consent of the optionee.
9.2 Amendment. The Board of Directors shall have the right to
suspend, terminate or amend this Plan at any time, provided that the
approval of the shareholders shall be required for any amendment which:
(a) increases the total number of shares which may be
issued and sold pursuant to options granted under this Plan;
(b) decreases the minimum option price;
(c) alters the class of employees eligible for grants
of options;
(d) increases the maximum term of options granted under
this Plan;
(e) reduces the period of time after the date of grant
during which an employee must remain in the employ of the Company in order
to exercise an option;
(f) increases the term of this Plan;
(g) withdraws the administration of this Plan from a
Committee of directors; or
(h) otherwise materially increases the benefits
accruing to participants under the Plan.
SECTION 10. Effective Date and Duration
This Plan shall become effective beginning April 21, 1992, 1992,
subject to the approval of the shareholders of the Company as required by
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and
Section 422A of the Code. No options may be granted under this Plan
subsequent to April 20, 2002.
PERCEPTRON, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Amended and Restated October 31, 1996)
1. Purpose. The purpose of the Perceptron, Inc. Employee Stock
Purchase Plan (the "Plan") is to promote the best interests of Perceptron,
Inc. (the "Company") and its shareholders by encouraging employees of the
Company and its subsidiaries to acquire a proprietary interest in the
Company, thus identifying their interests with those of shareholders and
encouraging the employees to make even greater efforts on behalf of the
Company. The Plan is intended to constitute an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code").
2. Certain Definitions. As used in this Plan, the term
"subsidiary" of the Company means any "subsidiary corporation" as defined in
Section 424(f) of the Code; the term "employee" means an individual with an
"employment relation- ship" with the Company or any subsidiary as defined in
Regulation 1.421-7(h) of the Income Tax Regulations; the term "employment"
means employment with the Company, or a subsidiary of the Company; and the
term "Purchase Period" means a six month offering period commencing each
January 1 and July 1.
3. Stock. The stock subject to option and purchase under the
Plan shall be the Common Stock of the Company (the "Common Stock"). The
total amount of Common Stock on which options may be granted under the Plan
shall not exceed 150,000 shares, after taking into account the Company's
stock split effective November 30, 1995, subject to adjustment in accordance
with Section 12 of the Plan. Shares of Common Stock subject to any
unexercised portion of a terminated, cancelled or expired option granted
under the Plan may again be used for option grants under the Plan.
4. Administration. The Plan shall be administered by a
Committee (the "Committee") of the Board of Directors ("Board"). The
Committee may prescribe rules and regulations from time to time for the
administration of the Plan and may decide questions which may arise with
respect to its interpretation or application. The decisions of the
Committee in interpreting the Plan shall be final, conclusive and binding on
all persons, including the Company, its subsidiaries, employees and
optionees. The Committee, from time to time, shall grant to eligible
employees on a uniform basis, options to purchase Common Stock pursuant to
the terms and conditions of the Plan. In the event of insufficient shares
during a Purchase Period, the Committee shall allocate the right to purchase
shares to each participant in the same proportion that such participant's
total current base salary paid by the Company for the Purchase Period bears
to the total of such base salaries paid by the Company to all participants
during the same period. All excess funds withheld, as a result of
insufficient shares, shall be returned to the participant employees.
5. Participants. Except as provided in Section 6 of the Plan,
any employee who is in the employ of the Company or any subsidiary of the
Company on the offering dates (i) whose customary employment with the
Company or a subsidiary is more than 20 hours per week, (ii) who works more
than five months a year and (iii) who have been employed by the Company or a
subsidiary for at least six months, is eligible to participate in the Plan
in accordance with its terms.
6. Ownership and Purchase Limitations. Notwithstanding
anything herein to the contrary, no employee shall be entitled to
participate in an offering under the Plan if such employee, immediately
after a grant under this Plan, would, in the aggregate, own, and/or hold
options to purchase, shares of Common Stock equal to or exceeding five
percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of its subsidiary corporations. The
rules of Section 424(d) of the Code shall apply for the purpose of
determining such stock ownership. With respect to individual employees,
Section 424(d) of the Code provides that an employee shall be considered as
owning the stock owned directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors, and lineal
descendants. No employee shall be granted an option under the Plan which,
together with options granted under all employee stock purchase plans
(qualified under Section 423 of the Code) of the Company and its
subsidiaries permits the employee to accrue option rights to purchase shares
in any calendar year in excess of $25,000 of fair market value of such
shares (determined at the time an option is granted). For purposes of this
Plan, the "grant date" shall be the first day of each Purchase Period, as
defined in Section 2 of the Plan.
7. Option Price. The exercise price of each option granted
under the Plan shall be equal to the "Discount" multiplied by the fair
market value per share of the Common Stock on the grant date. The term
"Discount" shall mean a percentage not less than 85%. The Discount shall be
85% unless otherwise determined by the Committee in its sole discretion on
or before the grant date. For purposes of this Plan, the the fair market
value per share shall be deemed to be:
(a) the average of the closing sales prices of the
Common Stock on the principal securities exchange on which the Common Stock
may at the time be listed (or, if there have been no sales on such exchange
on any day, the average of the closing high bid and low asked prices on such
exchange at the end of such day) for the five (5) consecutive trading days
on such exchange immediately preceding the grant date; or
(b) if the Common Stock is not listed on a securities
exchange, the average of the closing sales prices of the Common Stock on The
Nasdaq Stock Market (or, if there have been no sales on The Nasdaq Stock
Market on any such day, the average of the closing high bid and low asked
prices on The Nasdaq Stock Market at the end of such day) for the five (5)
consecutive trading days on The Nasdaq Stock Market immediately preceding
the grant date; or
(c) if the Common Stock is not listed on any domestic
stock exchange or The Nasdaq Stock Market, the average of the mean between
the closing high bid and low asked price as reported by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") (or,
if not so reported, by the system then regarded as the most reliable source
of such quotations) for the five (5) consecutive trading days on NASDAQ or
other such system immediately preceding the grant date; or
(d) if none of the foregoing clauses apply, the fair
value as determined in good faith by the Committee.
8. Payment for Option Shares.
(a) Shares Under Option. An eligible employee may
elect to participate in an offering by delivering to the Company an election
to participate and a payroll deduction form within a certain period of time,
which period shall be designated by the Committee prior to each offering
date (the "Election Period") and which election shall become irrevocable as
to the applicable Purchase Period at the end of the Election Period. An
eligible employee's election to participate and payroll deduction form from
the preceding Election Period automatically shall carry over to the next
Election Period unless affirmatively revoked in writing by the employee. An
employee who elects to participate may not authorize payroll deductions
which, in the aggregate, are more than ten percent (10%) of the employee's
after-tax base salary (not including overtime and bonus payments). Only
whole shares of Common Stock may be purchased under the Plan.
(b) A participating employee may not authorize payroll
deductions for less than an entire Purchase Period. An employee may suspend
payroll deductions during a Purchase Period at any time, and all funds
withheld prior to such suspension, which have not yet been applied to the
purchase of Common Stock, shall, at the employee's election, be used to
exercise the option on the Purchase Date to the extent payroll deductions
were made prior to such suspension or be returned by the Company to the
employee as soon as practicable.
(c) Payroll deductions shall commence on the first
payroll date in the Purchase Period and shall continue until the last
payroll date in the Purchase Period; provided, however, that unless an
election is revoked, such election shall continue into successive six month
Purchase Periods.
(d) A participating employee's option shall be deemed
to have been exercised at the close of business on the last business day of
the Purchase Period, to the extent of the payroll deductions withheld during
such Purchase Period, which shall be the earlier of (i) the last day in the
six month period following the grant date or (ii) the date on which the
Purchase Period is terminated pursuant to Section 13.
(e) The Company retains the right to designate an
exclusive broker to handle the Common Stock transactions under the Plan. As
soon as practicable after the end of the Purchase Period, the Company shall
deliver to each employee or a designated brokerage account, through a
certificate or electronic transfer, the shares of Common Stock that such
employee has purchased. Unless otherwise determined by the Committee, any
amount that has been deducted and withheld in excess of the option price
automatically shall be paid by check to the participating employee promptly
following the end of the Purchase Period in which withheld.
(f) Unless otherwise determined by the Committee, no
interest shall accrue or be paid on any amounts paid by payroll deduction by
any participating employee.
9. Non-Transferability. No option shall be transferable by an
employee other than by will or the laws of descent and distribution, and an
option shall be exercised during an employee's life time only by an
employee.
10. Restriction on Transfers of Shares. Shares issued pursuant
to the exercise of an option under the Plan may not be disposed of by the
employee until the expiration of one (1) year after the exercise date. Such
restriction on transfer may be waived by the Committee in the event of
extreme hardship, as determined by the Committee in its sole discretion.
11. Termination of Employment, Unpaid Leave of Absence or
Layoff. If a participating employee ceases to be employed by the Company
for any reason (with or without severance pay), including but not limited
to, voluntary or forced resignation, retirement, death, layoff, or if an
employee is on an unpaid leave of absence for more than 60 days, or during
any period of severance, payroll deductions with respect to such employee
shall cease and all funds withheld prior to such termination, which have not
yet been applied to the purchase of Common Stock, shall, at the employee's
election, be used to exercise the option on the Purchase Date to the extent
payroll deductions were made prior to such termination or be returned by the
Company to the employee (or his or her estate or heirs) as soon as
practicable.
12. Adjustments. In the event of changes in the outstanding
Common Stock by reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in the capital structure of the Company, an appropriate
adjustment shall be made by the Committee in the number of shares and kind
of stock or other securities for which options may be or may have been
granted under the Plan, and the exercise price related thereto, to the end
that the proportionate interests shall be maintained as before the
occurrence of such an event. Any of the foregoing adjustments may provide
for the elimination of any fractional share which might otherwise become
subject to any option.
13. Change of Control.
(a) After any merger of one or more corporations into
the Company in which the Company shall be the surviving corporation or any
share exchange in which the Company is a constituent corporation, each
participant shall, at no additional cost, be entitled upon the exercise of
an option, to receive (subject to any required action by shareholders), in
lieu of the number of shares of Common Stock for which such option shall
then be exercisable, the consideration which such participant would have
been entitled to receive pursuant to the terms of the agreement of merger or
share exchange if at the time of such merger or share exchange such
participant had been a holder of record of a number of shares of Common
Stock equal to the number of shares then underlying the option. In
addition, if any person or entity becomes the beneficial owner of more than
fifty percent (50%) of the number of shares then issued and outstanding,
whether in connection with such merger or share exchange or otherwise, or
upon any sale by the Company of all or substantially all of its assets, the
Committee shall have the right to terminate the Purchase Period as of such
date, and, if so terminated, each participant shall be deemed to have
exercised, immediately prior to such merger, share exchange, acquisition or
sale of assets, his or her option to the extent payroll deductions were made
prior thereto. Comparable rights shall accrue to each participant in the
event of successive mergers or consolidations of the character described
above.
(b) Notwithstanding anything contained herein to the
contrary, upon the dissolution or liquidation of the Company or upon any
merger or share exchange in which the Company is not the surviving
corporation (other than a merger with a wholly-owned subsidiary of the
Company formed for the purpose of changing the Company's corporate domicile
where the Plan is assumed by the survivor), the Purchase Period for any
option granted under this Plan shall terminate as of the date of the
aforementioned event, and each participant shall be deemed to have
exercised, immediately prior to such dissolution, liquidation, merger or
share exchange, his or her option to the extent payroll deductions were made
prior thereto.
(c) The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined by the Committee
in its sole discretion. Any such adjustment may provide for the elimination
of any fractional share which might otherwise become subject to an option.
14. Termination and Amendment. The Board may terminate the
Plan, or the granting of options under the Plan, at any time. No option
shall be granted under the Plan after May 14, 2005.
The Board may amend or modify the Plan at any time and from time to
time, but no amendment or modification shall disqualify the Plan under
Section 423 of the Code, or Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as amended from time to time (or any
successor rule), without shareholder approval.
No amendment, modification, or termination of the Plan shall in any
manner affect any option granted under the Plan without the consent of the
participant holding the option.
15. Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on the
exercise of an option as may be required to satisfy the requirements of Rule
16b-3 of the Exchange Act, as amended from time to time (or any successor
rule).
16. Rights Prior to Delivery of Shares. No participant shall
have any rights as a shareholder with respect to shares covered by an option
until the issuance of a stock certificate or electronic transfer to the
employee or the employee's brokerage account of such shares. No adjustment
shall be made for dividends or other rights with respect to such shares for
which the record date is prior to the date the certificate is issued or the
shares electronically delivered to a brokerage account.
17. Securities Laws. Anything to the contrary herein
notwithstanding, the Company's obligation to sell and deliver stock pursuant
to the exercise of an option is subject to such compliance with federal and
state laws, rules and regulations applying to the authorization, issuance or
sale of securities as the Company deems necessary or advisable. The Company
shall not be required to sell and deliver stock unless and until it receives
satisfactory assurance that the issuance or transfer of such shares will not
violate any of the provisions of the Securities Act of 1933 or the Exchange
Act, or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder or those of any stock exchange on which the stock may
be listed and the provisions of any state laws governing the sale of
securities, or that there has been compliance with the provisions of such
acts, rules, regulations and laws.
The Board may impose such restrictions on any shares of Common Stock
acquired pursuant to the exercise of an option under the Plan as it may deem
advisable, including, without limitation, restrictions (a) under applicable
federal securities laws, (b) under the requirements of any stock exchange or
other recognized trading market upon which such shares of Common Stock are
then listed or traded, and (c) under any blue sky or state securities laws
applicable to such shares. No shares shall be issued until counsel for the
Company has determined that the Company has complied with all requirements
under appropriate securities laws.
18. Approval of Plan. The Plan shall be subject to the approval
of the holders of at least a majority of the Common Stock of the Company
present and entitled to vote at a meeting of shareholders of the Company
held within 12 months after adoption of the Plan by the Board. If not
approved by shareholders within such 12-month period, the Plan and any
options granted hereunder shall become void and of no effect.
19. Effect on Employment. Neither the adoption of the Plan nor
the granting of an option pursuant to it shall be deemed to create any right
in any employee to be retained or continued in the employment of the
Company, parent or a subsidiary.
20. Use of Proceeds. The proceeds received from the sale of
shares pursuant to the Plan shall be used for corporate purposes by the
Company.
BOARD OF DIRECTORS APPROVAL: 5/15/95, 6/23/95, 10/31/96
SHAREHOLDER APPROVAL: 6/23/95
PERCEPTRON, INC.
DIRECTORS STOCK OPTION PLAN
(As Amended and Restated October 31, 1996)
I. GENERAL PROVISIONS
1.1 Purpose. The purpose of the Perceptron, Inc. Directors
Stock Option Plan ("Plan") is to promote the best interests of the Company
and its stockholders by attracting and motivating highly qualified
individuals to serve as Directors.
1.2 Definitions. As used in this Plan, the following terms have
the meaning described below:
(a) "Agreement" means the written agreement that sets
forth the terms of a Participant's Option.
(b) "Board" means the Board of Directors of the
Company.
(c) "Chairman" means the Chairman of the Board of
Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Committee" means a Committee of the Board of the
Company, appointed by the Board.
(f) "Common Stock" means shares of the Company's
authorized Common Stock.
(g) "Company" means Perceptron, Inc.
(h) "Director" means a member of the Company's Board of
Directors.
(i) "Disability" means total and permanent disability,
as defined in Code Section 22(e).
(j) "Effective Date" means February 9, 1995.
(k) "Eligible Director" means a Director who is not an
Employee or the Chairman of the Board of the Company.
(l) "Employee" means an employee of the Company or its
Subsidiaries, who has an "employment relationship" with the Company or its
Subsidiaries, as defined in Treasury Regulation 1.421-7(h), and the term
"employment" means employment with the Company or its subsidiaries.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time and any successor thereto.
(n) "Expiration Date" means the date set forth in the
Agreement relating to an Option on which the right to exercise such Option
shall expire, except as otherwise provided in Article III below. Unless
otherwise provided in the Agreement, the Expiration Date for an Option shall
be the tenth anniversary of its Grant Date.
(o) "Fair Market Value" means, for purposes of
determining the value of Common Stock, the last reported sale price, as of
the date of determination, on the principal domestic stock exchange where
such Common Stock is traded, or, if not then listed on a domestic stock
exchange, NASDAQ National Market or if the Common Stock is not listed on any
domestic stock exchange or NASDAQ National Market, the mean between the
closing high bid and low asked price as reported by the National Association
of Securities Dealers Automated Quotation System (or, if not so reported, by
the system then regarded as the most reliable source of such quotations) as
of the date of determination. In the event that there were no Common Stock
transactions on such date, the Fair Market Value shall be determined as of
the immediately preceding date on which there were Common Stock
transactions.
(p) "Grant Date" means the date on which the Option was
automatically awarded pursuant to Section 2.1.
(q) "Nonqualified Stock Option" means an Option that is
not intended to meet the requirements of Section 422 of the Code.
(r) "Option" means a Nonqualified Stock Option to
purchase Common Stock granted under this Plan.
(s) "Participant" means each of the Directors of the
Company participating in the Plan from time to time.
(t) "Plan" means the Perceptron, Inc. Directors Stock
Option Plan, the terms of which are set forth herein, and any amendments
hereto.
(u) "Rule 16b-3" means Rule 16b-3 under the Exchange
Act, as in effect from time to time.
1.3 Administration. To the extent permitted by Rule 16b-3, the
Plan shall be administered by the Committee. The Committee shall interpret
the Plan, prescribe, amend, and rescind rules and regulations relating to
the Plan, and make all other determinations necessary or advisable for its
administration. The decision of the Committee on any question concerning
the interpretation of the Plan or its administration with respect to any
Option granted under the Plan shall be final and binding upon all
Participants.
1.4 Stock. The total number of shares of Common Stock available
for grants under the Plan shall not, in the aggregate, exceed 175,500 shares
of Common Stock, after taking into account the Company's stock split
effected November 30, 1995, as adjusted from time to time in accordance with
Article IV. Shares subject to any unexercised portion of a terminated,
forfeited, cancelled or expired Option granted hereunder shall be available
for subsequent grants under the Plan. In the event that an option granted
under the Plan is exercised by the delivery of shares of Common Stock
previously acquired upon the exercise of Options issued under the Plan or
through the retention of options procedure as described in Section 2.6
below, the shares of Common Stock so delivered to the Company or underlying
such retained options shall be available for subsequent grants under the
Plan.
II. STOCK OPTIONS FOR ELIGIBLE DIRECTORS
2.1 Automatic Grants of Options.
(a) Initial Grant. Each Eligible Director who is
serving on the Board on the Effective Date of the Plan shall be granted an
Option to purchase 15,000 shares of the Company's Common Stock on the
Effective Date. Any Eligible Director who is first elected or appointed to
such position after the Effective Date shall receive an Option to purchase
15,000 shares of the Company's Common Stock on the date of his or her
election or appointment. A person who receives an Initial Grant of an
option under this Section 2.1(a) which becomes fully exercisable as provided
in Section 2.5 or Article III may not receive a subsequent Initial Grant
under this Section 2.1(a). For instance, an Eligible Director who receives
an Initial Grant and leaves the Board two years after such Initial Grant,
may not receive an additional Initial Grant if he or she is subsequently
re-elected or reappointed to the Board. A person who first becomes an
Eligible Director following service as an Employee or Chairman of the Board
of the Company shall not be entitled to receive an Initial Grant upon
becoming an Eligible Director.
(b) Subsequent Grants. During the term of the Plan, an
Eligible Director who has been a Director for at least six months before the
date of an Annual Meeting of Stockholders, automatically shall be granted,
as of the date of such Annual Meeting, an additional Option to purchase
1,500 shares of the Company's Common Stock. A Participant may hold more
than one Option under the Plan.
2.2 Option Agreement. Each Option granted pursuant to this
Article II shall be evidenced by an Agreement that shall specify the
exercise price, the term of the Option, date or dates on which the Option
becomes exercisable, the number of shares to which the Option relates, and
other such provisions as the Committee shall determine. The terms of the
Plan shall govern in the event any provision of any Agreement conflicts with
any term in this Plan as constituted on the Grant Date.
2.3 Option Price. The purchase price per share of Common Stock
for an Option granted pursuant to this Article II shall be equal to the Fair
Market Value per share of Common Stock on the Grant Date.
2.4 Duration of Options. The Expiration Date of each Option
granted pursuant to this Article II shall be the tenth anniversary of its
Grant Date, except as otherwise provided in Article III.
2.5 Exercise of Shares Subject to Option.
(a) Options granted under Section 2.1(a) shall become
exercisable in full on the first anniversary of the Grant Date.
(b) Options granted under this Section 2.1(b) shall
become exercisable according to the following schedule: one-third of the
Option shall become exercisable on the first, second and third anniversaries
of the Grant Date of each Option.
(c) Once exercisable, such Options may be exercised at
any time and from time to time until the Expiration Date of such Options,
unless earlier terminated pursuant to Article III.
2.6 Payment for Option Shares. The purchase price for shares of
Common Stock to be acquired upon exercise of an Option granted hereunder
shall be paid in full at the time of exercise in any of the following ways:
(a) in cash, (b) by certified check, bank draft or money order, (c) by
delivery to the Company of previously-acquired shares of the Common Stock
with a Fair Market Value (determined as of the date of exercise of the
Option) equal to the exercise price; (d) by delivery to the Company of a
properly executed exercise notice, acceptable to the Company, together with
irrevocable instructions to the Participant's broker to deliver to the
Company sufficient cash to pay the exercise price and any applicable income
and employment withholding taxes, in accordance with a written agreement
between the Company and the brokerage firm ("cashless exercise" procedure);
(e) through the retention by the Company of then exercisable options issued
to the Participant under the Plan (the "retained options") with a value
equal to the option price of the shares purchased pursuant to the exercise
of the Option, with the value of the retained options equal to the
difference between the Fair Market Value of the shares of Common Stock
underlying the retained options (determined as of the date of exercise of
the Option) and the exercise price of such Option ("retention of options"
procedure); or (f) by any combination of the foregoing. Options retained by
the Company under the retention of options procedure shall expire and be of
no further force and effect as of the date retained.
2.7 No Discretion. Notwithstanding any provision in the Plan to
the contrary, the Committee shall have no discretion with respect to the
terms of grants made pursuant to this Article II, except to the extent such
discretion would not result in the grant or the Plan failing to qualify for
the exemption provided under Rule 16b-3.
III. TERMINATION
3.1. Prior to Exercisability. Except as provided in Article IV,
if a Participant's term of office as an Eligible Director is terminated for
any reason (including the Participant becoming an Employee), other than the
Participant's election or appointment as Chairman, prior to the date that an
Option or a portion thereof first becomes exercisable, such Option or
portion thereof which is not then exercisable shall terminate and all rights
thereunder shall cease. If a Participant's term of office as an Eligible
Director terminates due to the Participant's election or appointment as
Chairman (and the Participant is not an Employee or does not become an
Employee as a result of such election or appointment), the Participant will
not be eligible for further automatic grants of Options under the Plan so
long as he or she serves as Chairman, but his or her Options granted prior
to the date of his or her election or appointment as Chairman shall not
terminate and shall continue to become exercisable as provided in Section
2.5 above. If thereafter such Chairman becomes an Employee, or ceases to be
a Director, prior to the date his or her Options or a portion thereof first
becomes exercisable, such Options or portion thereof which are then not
exercisable shall terminate and all rights thereunder shall cease.
3.2 After Exercisability. To the extent an Option or any
portion thereof is exercisable and unexercised on the date a Participant's
term of office as an Eligible Director is terminated for any reason
(including the Participant becoming an Employee), other than the
Participant's election or appointment as Chairman, the Option shall
terminate on the earlier of (i) the Expiration Date of the Option, and (ii)
three months after such termination; provided, however, that the exercise
period in clause (ii) shall be extended to one year after termination if the
termination is due to the Participant's death or Disability. To the extent
an Option or any portion thereof is exercisable and unexercised on the date
a Participant's term of office as an Eligible Director is terminated due to
the Participant's election or appointment as Chairman (and the Participant
is not an Employee or does not become an Employee as a result of such
election or appointment), the Option shall terminate on the earlier of (i)
the Expiration Date of the Option, and (ii) three months after such
Participant becomes an Employee or ceases to be a Director; provided,
however, that the exercise period in clause (ii) shall be extended to one
year after the Participant ceases to be a Director if such termination is
due to the Participant's death or Disability. Notwithstanding the foregoing
two sentences, in the event an Option would otherwise expire during any
period during which affiliates of the Company are prohibited from disposing
of Common Stock in order to comply with applicable accounting and Securities
and Exchange Commission rules, regulations, policies, guidelines or other
similar requirements so as to permit the Company to account for a then
completed or contemplated business combination under pooling of interest,
the exercise period in clause (ii) of the foregoing two sentences shall be
extended to the tenth business day following the expiration of any such
period in which such dispositions are prohibited.
3.3 Post-Termination Exercise. During the period from the
Participant's termination until the termination of the Option, the
Participant, or the person or persons to whom the Option shall have been
transferred by will or by the laws of descent and distribution, may exercise
the Option only to the extent that such Option was exercisable on the date
of the Participant's termination.
IV. ADJUSTMENTS AND CHANGE IN CONTROL
4.1 Adjustments and Change in Control. In the event of changes
in the outstanding Common Stock by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in the capital structure of the Company,
an appropriate adjustment shall be made by the Board in the number of shares
and kind of stock or other securities for which Options may be or may have
been granted under the Plan, and the Option price related thereto, to the
end that the proportionate interests shall be maintained as before the
occurrence of such an event.
Any of the foregoing adjustments may provide for the elimination of
any fractional share which might otherwise become subject to any Option.
4.2 Change in Control. Notwithstanding the provisions of
Articles II and III, (i) in the event of a termination by the Company of the
Participant's membership on the Board or failure to renominate the
Participant for election to the Board, or voluntary resignation by the
Participant from the Board at the request of the Board, following a Change
in Control of the Company, or (ii), in the event of a Change in Control, if
one of the corporations surviving the Change in Control or the person
purchasing the Company's assets in the Change in Control does not assume
this option, any portion of an option granted under the Plan that is then
not exercisable shall become immediately exercisable. For purposes hereof,
a "Change in Control" shall be deemed to have occurred in the event of (i) a
merger involving the Company in which the Company is not the surviving
corporation (other than a merger with a wholly-owned subsidiary of the
Company formed for the purpose of changing the Company's corporate
domicile); (ii) a share exchange in which the shareholders of the Company
exchange their stock in the Company for stock of another corporation (other
than a share exchange in which all or substantially all of the holders of
the voting stock of the Company, immediately prior to the transaction,
exchange, on a pro rata basis, their voting stock of the Company for more
than 50% of the voting stock of such other corporation); (iii) the sale of
all or substantially all of the assets of the Company; or (iv) any person or
group of persons (as defined by Section 13(d) of the Exchange Act) (other
than any employee benefit plan or employee benefit trust benefitting the
employees of the Company) becoming a beneficial owner, directly or
indirectly, of securities of the Company representing more than fifty (50%)
percent of either the then outstanding Common Stock, or the combined voting
power of the Company's then outstanding voting securities.
V. MISCELLANEOUS
5.1 Partial Exercise. The Committee shall permit, and shall
establish procedures for, the partial exercise of Options under the Plan.
5.2 Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on the
exercise of an Option as may be required to satisfy the requirements of Rule
16b-3.
5.3 Rights Prior to Issuance of Shares. No Participant shall
have any rights as a stockholder with respect to shares covered by an Option
until and only to the extent that the Option is exercised.
5.4 Non-Assignability. No Option shall be transferable by a
Participant except by will or the laws of descent and distribution. During
the lifetime of a Participant, an Option shall be exercised only by the
Participant. No transfer of an Option by will or the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of the will or
such evidence as the Company may deem necessary to establish the validity of
the transfer and the acceptance by the transferee of the terms and
conditions of the Option.
5.5. Securities Laws.
(a) Anything to the contrary herein notwithstanding,
the Company's obligation to sell and deliver Common Stock pursuant to the
exercise of an Option is subject to such compliance with federal and state
laws, rules and regulations applying to the authorization, issuance or sale
of securities as the Company deems necessary or advisable. The Company
shall not be required to sell and deliver Common Stock unless and until it
receives satisfactory assurance that the issuance or transfer of such shares
shall not violate any of the provisions of the Securities Act of 1933 or the
Exchange Act, or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder or those of the National Association of
Securities Dealers, Inc. or any stock exchange on which the Common Stock may
be listed, the provisions of any state laws governing the sale of
securities, or that there has been compliance with the provisions of such
acts, rules, regulations and laws.
(b) The Committee may impose such restrictions on any
shares of Common Stock acquired pursuant to the exercise of an Option as it
may deem advisable, including, without limitation, restrictions (i) under
applicable federal securities laws, (ii) required by the NASDAQ Stock Market
(including, without limitation, with respect to securities traded on the
NASDAQ National Market or the NASDAQ Small Cap Market) or any stock exchange
or other recognized trading market upon which such shares of Common Stock
are then listed or traded, and (iii) under any blue sky or state securities
laws applicable to such shares. No shares shall be issued until counsel for
the Company has determined that the Company has complied with all
requirements under appropriate securities laws.
5.6 Termination and Amendment.
(a) The Board may terminate the Plan, or the granting
of Options under the Plan, at any time. No new grants shall be made under
the Plan after February 9, 2000.
(b) The Board may amend or modify the Plan at any time
and from time to time; provided, however, that no amendment or modification
may be made to the Plan without the approval of the shareholders of the
Company to the extent that Rule 16b-3 requires such amendment or
modification to be approved by shareholders of the Company.
(c) No amendment, modification or termination of the
Plan shall adversely affect any Option granted under the Plan without the
consent of the Participant holding the Option.
5.8 Effect on Services. Neither the adoption of the Plan nor
the granting of any Option pursuant to the Plan shall be deemed to create
any right in any individual to be retained as a Director.
5.9 Use of Proceeds. The proceeds received from the sale of
Common Stock pursuant to the Plan shall be used for general corporate
purposes of the Company.
5.10 Approval of Plan. The Plan shall be subject to the approval
of the holders of at least a majority of the shares of Common Stock present
and entitled to vote at a meeting of Stockholders of the Company held within
12 months after adoption of the Plan by the Board. Any Option granted under
the Plan prior to such stockholder approval, shall be conditioned upon
receipt of such approval, and may not be exercised in whole or in part
unless the Plan has been approved by the stockholders as provided herein.
If not approved by stockholders within 12 months after approval by the
Board, the Plan shall be rescinded, and any Options granted under the Plan
shall be void retroactive to the Grant Date.
THIS AMENDED AND RESTATED DIRECTORS' STOCK OPTION PLAN is hereby
executed on this the 31st day of October, 1996.
PERCEPTRON, INC.
By:
----------------------------
Its:
----------------------------
BOARD APPROVAL: February 9, 1995, June 5, 1996,
October 31, 1996
SHAREHOLDER APPROVAL: June 23, 1995, July 12, 1996
PERCEPTRON, INC. AND SUBSIDIARIES
EXHIBIT 11, STATEMENT RE: COMPUTATION OF PER
SHARE EARNINGS
<TABLE>
<CAPTION>
Earnings Per Share Earnings Per Share
Three Months Ended September 30, Nine Months Ended September 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<C> <S> <S> <S> <S>
A. Net Income $ 2,789,000 $ 2,516,000 $ 6,084,000 $ 5,163,000
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding 7,046,350 6,588,899 6,897,885 6,503,915
Effect of the issuance of
stock options and assumed
exercise of stock options
at prices which are lower
than the average market
price of the common shares
during the period, using
the treasury stock method 633,215 721,420 702,530 683,052
---------- ---------- ---------- -----------
B. Weighted average number of
common shares and common
equivalent shares for primary
earnings per share 7,679,565 7,310,319 7,600,415 7,186,967
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding 7,046,350 6,588,899 6,897,885 6,503,915
Effect of the issuance of
stock options and assumed
exercised of stock options
at prices which are lower
than the market price of the
common shares at the end of
the period, using the
treasury stock method 533,980 685,596 632,506 761,337
---------- --------- --------- ---------
C. Weighted average number of
common shares and common
equivalent shares for fully
diluted earnings per share 7,580,330 7,274,495 7,530,391 7,265,252
---------- ---------- ---------- ----------
Primary earnings per share
(A/B) $ .36 $ .34 $ .80 $ .72
========== ========== ========== ==========
Fully diluted earnings per
share (A/C) $ .37 $ .35 $ .81 $ .71
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary
financial information extracted from
Percepton, Inc.'s financial statements
for the period ended September 30, 1996
and is qualified in its entirety by
reference to such financial statements
<MULTIPLIER> 1
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,227,000
<SECURITIES> 0
<RECEIVABLES> 16,671,000
<ALLOWANCES> 191,000
<INVENTORY> 5,884,000
<CURRENT-ASSETS> 38,316,000
<PP&E> 13,494,000
<DEPRECIATION> 6,656,000
<TOTAL-ASSETS> 45,154,000
<CURRENT-LIABILITIES> 7,524,000
<BONDS> 0
<COMMON> 71,000
0
0
<OTHER-SE> 37,559,000
<TOTAL-LIABILITY-AND-EQUITY> 45,154,000
<SALES> 33,581,000
<TOTAL-REVENUES> 33,581,000
<CGS> 13,088,000
<TOTAL-COSTS> 13,088,000
<OTHER-EXPENSES> 12,388,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (587,000)
<INCOME-PRETAX> 8,692,000
<INCOME-TAX> 2,608,000
<INCOME-CONTINUING> 6,084,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,084,000
<EPS-PRIMARY> .80
<EPS-DILUTED> .81
</TABLE>
