<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-2
/ / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number 0-20206
PERCEPTRON, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2381442
(State or other jurisdiction) (I.R.S. Employer
of incorporation or organization) Identification No.)
47827 Halyard Drive
Plymouth, Michigan 48170
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (313) 414-6100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $0.01 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant, based upon the closing sale price of the
Common Stock on March 14, 1997, as reported by The Nasdaq Stock Market was
approximately $254,000,000 (assuming, but not admitting for any purpose, that
all directors and executive officers of the registrant are affiliates).
The number of shares outstanding of the registrant's Common stock as of
March 14, 1997, was 7,694,628.
<PAGE> 2
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table lists the members of the Board of Directors and
executive officers of the Company. The directors shall serve until the 1997
Annual Meeting of Shareholders or until the election and qualification of their
successors or until their resignation or removal. The officers listed below
were appointed by the Board of Directors and serve in the capacities indicated.
Executive officers are normally appointed annually by the Board of Directors
and serve at the pleasure of the Board.
POSITION, PRINCIPAL OCCUPATIONS AND
NAME AND AGE OTHER DIRECTORSHIPS
- ------------------------ ------------------------------------------------------
Dwight D. Carlson, 53 .. Mr. Carlson has been a director of the Company since
1981, when he founded the Company. Since February
1996, Mr. Carlson has served as Vice Chairman of the
Board of Directors. From 1981 to February 1996, Mr.
Carlson was President and Chief Executive Officer of
the Company. Mr. Carlson also serves as Chairman of
the Board of Michigan Future, Inc., a Michigan
non-profit corporation addressing competitiveness
issues in the State of Michigan; Chairman of the Auto
Body Consortium, a nonprofit company engaged in
research to improve manufacturing processes in the
automotive industry; a director of Industrial
Technology Institute of Michigan, a non-profit
corporation focused on research to enhance Michigan's
economy; and a director of the National Coalition for
Advanced Manufacturing, a non-profit corporation whose
purpose is to develop cooperation between industry,
government and academia in advanced manufacturing and
industrial modernization. Mr. Carlson is also a
member of the Visiting Committee of the National
Institute of Standards and Technology.
Philip J. DeCocco, 59 .. Mr. DeCocco has been a director of the Company since
1996. Mr. DeCocco has been President of Sturges
House, Inc., a company founded by Mr. DeCocco, since
1983. Sturges House, Inc. offers executive recruiting
and management consulting services in human resources,
strategic planning, executive development and
organization design and development to various
companies, including the Company.
Robert S. Oswald, 55 ... Mr. Oswald has been a director of the Company since
1996. Mr. Oswald has been Chairman, President
and Chief Executive Officer of Bosch Corporation
("Bosch"), a manufacturer of automotive components and
systems, since July 1996 and prior to that time, from
January 1994 to June 1996 was President and Chief
Executive Officer of such company. From October 1990
to December 1993, Mr. Oswald was President of the
Original Equipment Manufacturer's Division of Bosch.
Mr. Oswald serves as a director of Robert Bosch, Gmbh,
Associated Fuel Pump Systems Corporation and Bosch.
Alfred A. Pease, 51 .... Mr. Pease has been a director of the Company since
February 1996 and Chairman of the Board since
July 1996. Since February 1996, Mr. Pease has been
President and Chief Executive Officer of the Company.
From November 1993 to February 1996, Mr. Pease was
President and founder of Digital Originals, Inc., a
manufacturer of digital imaging products and related
software. From December 1990 to October 1993, Mr.
Pease served as Product Line Director of Advanced
Micro Devices, Inc., a manufacturer of semi-conductor
products.
Harry T. Rein, 52 ...... Mr. Rein has been a director since 1985. Since 1987,
he has been Managing General Partner and founder
of Canaan Partners, a venture capital firm. Mr. Rein
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also serves as a director of Anadigics, Inc. and a
director of various private corporations.
Paul E. Rice, 53 ...... Mr. Rice has been a director of the Company since
1989. Since 1984, he has been Administrator of
the Alternative Investments Division, Bureau of
Investments, Michigan Department of Treasury. Mr. Rice
currently serves on the advisory boards of numerous
investment funds and is also a director of various
private corporations.
Louis R. Ross, 65 .... Mr. Ross has been a director of the Company since
1996. Mr. Ross owns and operates Ross
Consulting Inc., a company which provides consulting
services in quality management, manufacturing and
investments. Mr. Ross retired in January 1996 as Vice
Chairman and Chief Technical Officer of Ford Motor
Company ("Ford") and a member of Ford's Office of
Chief Executive and its Board of Directors. Mr. Ross
was a member of Ford's Board of Directors and Ford's
Office of Chief Executive since 1985, and Vice
Chairman since 1993. From October 1991 to January
1993, he served as Executive Vice President and Chief
Technical Officer of Ford, and from May 1989 to
October 1991, he was Executive Vice President
International Automotive Operations of Ford.
Terryll R. Smith, 47... Mr. Smith has been a director of the Company since
1996. Since February 1996, Mr. Smith has been
Group Vice President, Sales and Marketing of Advanced
Micro Devices, Inc. ("AMD"), a manufacturer of
integrated circuits. From January 1994 to February
1996, Mr. Smith was Group Vice President, Applications
Solutions Products of AMD. From October 1992 to
January 1994, Mr. Smith was Vice President,
International Sales and Marketing and from March 1989
to October 1992, was Vice President, European Sales,
Marketing and Operations of AMD.
Neil E. Barlow, 41..... Mr. Barlow is Executive Vice President -
International and has been an Executive Vice
President of the Company in various capacities since
January 1990. Prior to that, he had held various
positions at the Company including Director of
Manufacturing and Managing Director of the Company's
European subsidiaries for more than five years.
John G. Zimmerman, 56.. Mr. Zimmerman has been Vice President and Chief
Financial Officer of the Company since August
1996. Prior to that time, he was, from 1994 to 1996,
Group Vice President and Chief Financial Officer of
Sandy Corporation, a training, communications and
consulting corporation primarily focused in the
automotive industry, and from, 1990 to 1993, was
Senior Vice President, Finance and Treasurer of
Software Alternatives, Inc, a company which provides
software applications and solutions for businesses.
Software Alternatives, Inc. filed a Chapter 11
bankruptcy petition in June 1992, which was dismissed
in 1993.
3
<PAGE> 4
ITEM 11. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
------------------------------------------------
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
(the "1995 Stock Split"). All reported historical information contained in
Item 11 and Item 12 has been adjusted accordingly to reflect the impact of the
1995 Stock Split.
DIRECTORS
All of the members of the Board of Directors who are not employed by the
Company receive $1,000 for each Board meeting attended. In addition, directors
are reimbursed for their out-of-pocket expenses incurred in attending Board and
committee meetings. Directors, other than directors who are serving on the
Stock Option Committee, are also eligible to participate in the Company's Stock
Option Plan (the "1992 Plan").
All of the members of the Board of Directors who are not employed by the
Company (other than the Chairman of the Board) (the "Eligible Directors")
participate in the Directors Stock Option Plan (the "Directors Plan"). On
February 9, 1995, each of Messrs. Rein and Rice were granted an option to
purchase 15,000 shares of Common Stock ("Initial Option") with an exercise
price of $12.83. Any additional Eligible Director who is first elected or
appointed after February 9, 1995 will receive an Initial Option to purchase
15,000 shares of Common Stock on the date of his or her election or
appointment. In addition, each Eligible Director who has been a director for
six months before the date of each Annual Meeting of Shareholders held during
the term of the Directors Plan automatically will be granted, as of the date of
such Annual Meeting, an option to purchase an additional 1,500 shares of Common
Stock (an "Annual Option"). The Directors' Plan expires on February 9, 2000.
The exercise price of options granted under the Directors Plan is the last
reported sale price per share of the Company's Common Stock as quoted on The
Gnostic Stock Market's National market on the date of grant. Each option
granted under the Directors Plan as an Initial Option becomes exercisable in
full on the first anniversary of the date of grant. Options granted as Annual
Options become exercisable in three annual increments of 33- % of the shares
subject to the option. The exercisability of such options is accelerated in
the event of the occurrence of certain changes in control of the Company. All
options granted under the Plan are exercisable for a period of ten years from
the date of grant, unless earlier terminated due to the termination of the
Eligible Director's service as a director of the Company.
In May 1993, the Company engaged James E. McGrath to serve as Chairman of
the Board of the Company. Mr. McGrath was paid $5,000 per month for his
services as Chairman of the Board, through July 12, 1996. Mr. McGrath was
granted non qualified stock options to purchase 120,000 shares of Common Stock,
all of which were immediately exercisable at an exercise price of $3.71 per
share, which was the fair market value of the Common Stock on the date such
options were granted. Such options expire on the earlier of May 21, 2003 or
one year following Mr. McGrath's death. By April 15 of the year following an
exercise of Mr. McGrath's option, Mr. McGrath will receive a payment equal to
the difference between Mr. McGrath's actual federal income tax liability for
the calendar year in which an exercise of Mr. McGrath's option occurs and the
amount Mr. McGrath's federal income tax liability for the calendar year of such
exercise would have been if Mr. McGrath's option had been an incentive stock
option rather than a non qualified stock option, the shares received upon
exercise of the option had been sold at the date of exercise at the exercise
price and such shares had been held for more than one year at that date (the
"Tax Differential Payment"), plus an amount required for the payment to be
received on a After-Tax Basis. After-Tax Basis means the amount of the Tax
Differential Payment supplemented by a further payment so that the sum of the
two payments, after deduction of all federal, state and local taxes resulting
from the receipt of such two payments, shall be equal to the Tax Differential
Payment. Of the stock options granted to Mr. McGrath to purchase 120,000
shares of Common Stock, options to purchase 26,944 shares were exercised in
1996, and no options were outstanding at April 25, 1997. On February 4, 1997,
the Company paid Mr. McGrath $173,957 representing the Tax Differential
Payment due Mr. McGrath related to the options he exercised in 1996.
4
<PAGE> 5
EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information as to compensation paid
by the Company for services rendered in all capacities to the Company and its
subsidiaries during the fiscal years ended December 31, 1994, 1995, and 1996 to
(i) the Company's Chief Executive Officer, (ii) the Company's executive
officers at December 31, 1996 (other than the Chief Executive Officer) whose
aggregate annual salary and bonus exceeded $100,000 and (iii) two former
executive officers, who during portions of the fiscal year ended December 31,
1996 were classified as executive officers for purposes of the Commission's
regulations, whose aggregate annual salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Name and Annual Compensation Awards
---------------------- Other Annual ------------ All Other
Principal Position Year Salary ($) Bonus ($) Compensation(1) Options (#) Compensation ($)
- -------------------------- ---- ---------- ---------- --------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease, 1994 _ _ _ _ _
President, Chief 1995 _ _ _ _ _
Executive Officer and 1996 $175,000 $104,778 $42,120(3) 200,000 $51,177(4)
Chairman of the Board(2)
Neil E. Barlow 1994 125,000 82,508 -- -- 7,108(5)
Executive Vice 1995 132,500 89,524 -- -- 5,958(6)
President - 1996 141,800 77,299 _ _ 9,098(7)
International
Dwight D. Carlson, 1994 146,000 88,354 -- 12,059(5)
Vice Chairman of the Board 1995 155,000 129,156 _ -- 12,380(6)
of Directors; Former 1996 155,000 94,026 _ _ 12,510(7)
President and Chief
Executive Officer(8)
James A. Ratigan 1994 125,000 82,508 18,878(10) _ 25,810(5)
Former Executive Vice 1995 132,500 89,524 _ _ 6,958(6)
President and 1996 116,750 47,508 _ _ 7,954(7)
Chief Financial
Officer(9)
</TABLE>
(1) Perquisites and other personal benefits were provided to all of the
persons named in the Summary Compensation Table. Disclosure of such
amounts is not required because such amounts were less than 10% of the
total annual salary and bonuses reported for each of the respective
individuals for each period presented.
(2) Mr. Pease became President and Chief Executive Officer in February 1996
and Chairman of the Board in May 1996.
(3) Includes payment of certain tax "gross up" amounts of $42,120 for certain
taxable income received by Mr. Pease in 1996 as described under "All Other
Compensation."
(4) "All Other Compensation" includes reimbursements for temporary housing,
moving, travel and other expenses related to Mr. Pease's relocation to
Michigan.
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<PAGE> 6
(5) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of each of the named executive officers under
the Company's 401(k) Plan with respect to the fiscal year ended December
31, 1994 as follows: Mr. Barlow $3,675, Mr. Carlson $4,620 and Mr. Ratigan
$2,310; (ii) the dollar value of any life insurance premiums paid by the
Company in the fiscal year ended December 31, 1994 with respect to term
life insurance for the benefit of each of the named executives as follows:
Mr. Barlow $414, Mr. Carlson $3,075 and Mr. Ratigan $842; (iii) the
dollar value of any disability insurance premiums paid by the Company in
the fiscal year ended December 31, 1994 in excess of the Company's standard
disability coverage for the benefit of each of the following named
executives: Mr. Barlow $3,019 and Mr. Carlson $4,364; and (iv) temporary
housing; moving, travel and other expenses related to Mr. Ratigan's
relocation to Michigan totaling $22,658.
(6) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of each of the named executive officers under the
Company's 401 (k) Plan with respect to the fiscal year ended December 31,
1995 as follows: Mr. Barlow $2,100, Mr. Carlson $4,620 and Mr. Ratigan
$4,620; (ii) the dollar value of any life insurance premiums paid by the
Company in the fiscal year ended December 31, 1995 with respect to term
life insurance for the benefit of each of the named executives as follows:
Mr. Ratigan $2,338, Mr. Carlson $3,396, and Mr. Barlow $838; (iii) the
dollar value of any disability insurance premiums paid by the Company in
the fiscal year ended December 31, 1995 in excess of the Company's
standard disability coverage for the benefit of each of the following
named executives: Mr. Barlow $3,020 and Mr. Carlson $4,364.
(7) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of each of the named executive officers under the
Company's 401 (k) Plan with respect to the fiscal year ended December 31,
1996 as follows: Mr. Barlow $4,565, Mr. Carlson $4,750 and Mr. Ratigan
$4,750; (ii) the dollar value of any life insurance premiums paid by the
Company in the fiscal year ended December 31, 1996 with respect to term
life insurance for the benefit of each of the named executives as follows:
Mr. Barlow $1,513, Mr. Carlson $3,396 and Mr. Ratigan $3,204; (iii) the
dollar value of any disability insurance premiums paid by the Company in
the fiscal year ended December 31, 1995 in excess of the Company's
standard disability coverage for the benefit of each of the following
named executives: Mr. Barlow $3,020 and Mr. Carlson $4,364.
(8) Mr. Carlson retired as President and Chief Executive Officer in February
1996 and became Vice Chairman in May 1996.
(9) Mr. Ratigan resigned as Executive Vice President and Chief Financial
Officer of the Company in August 1996.
(10) Includes payment of certain tax "gross up" amounts of $18,878 for certain
taxable income received by Mr. Ratigan in 1994 as described under "All
Other Compensation."
GRANTS OF OPTIONS
The following table sets forth certain information concerning individual
grants of stock options to each of the persons named in the Summary
Compensation Table made during the fiscal year ended December 31, 1996. All
grants described in the following table were made under the Company's 1992
Stock Option Plan and contain the Option Acceleration Provision (as defined
under "Item 11- Compensation of Directors and Officers- Executive
Officers-Termination of Employment and Changes of Control Arrangements.")
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OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
Individual Grants
- -----------------------------------------------------------------------------------
Percent of Potential Realizable Value
Total At Assumed Annual Rates Of
Number Of Options Stock Price Appreciation
Securities Granted For Option Term (3)
Underlying To Employees Exercise Or ---------------------------
Option In Fiscal Year Base Price Expiration
Name Granted (#) (1) ($/Sh) Date (2) 5%($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease......... 182,980(4) 53.90% $20.63 2/14/2006 $2,374,000 $6,016,382
----------------------------------------------------------------------------------
17,020(5) 5.00% $23.50 2/14/2006 251,556 637,400
----------------------------------------------------------------------------------
Neil E. Barlow.......... -0- -0- -- -- -- --
----------------------------------------------------------------------------------
Dwight D. Carlson....... -0- -0- -- -- -- --
----------------------------------------------------------------------------------
James A. Ratigan........ -0- -0- -- -- -- --
----------------------------------------------------------------------------------
</TABLE>
(1) Options to purchase a total of 339,300 shares of Common Stock were
granted to team members in the fiscal year ended December 31, 1996.
(2) Options expire on the date indicated, or, if earlier, one year after the
optionee's death or permanent disability or three months after the
optionee's termination of employment.
(3) Represents the value of such options at the end of its 10 year term
(without discounting to present value) assuming the market prices of the
Common Stock appreciates from the grant date at an annually compounded
rate of 5% or 10%. These amounts represent rates of appreciation only.
Actual gains, if any, will be dependent on overall market conditions and
on the future performance of the Common Stock. There can be no assurance
that the amounts reflected in this table will be achieved.
(4) Options become exercisable in cumulative annual installments of 25%
beginning February 14, 1997 and are non-qualified options. See "Item 11-
Compensation of Directors and Executive Officers-Executive
Officers-Employment Agreements."
(5) Options become exercisable in cumulative annual installments of 25%
beginning February 14, 1997 and are incentive stock options. See "Item
11- Compensation of Directors and Executive Officers-Executive
Officers-Employment Agreements."
EXERCISE AND VALUE OF OPTIONS
The following table sets forth certain information concerning exercises of
stock options during the fiscal year ended December 31, 1996 by each of the
persons named in the Summary Compensation Table and the number of and the value
of unexercised stock options held by such persons as of December 31, 1996 on an
aggregated basis.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON EXERCISE REALIZED AT FISCAL YEAR-END(#) AT FISCAL YEAR-END ($) (1)
------------ -------- ---------------------------- ----------------------------
NAME ($) (2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease .... -0- $ -0- -- 200,000 $ -0- $2,675,200
Neil E. Barlow ..... 28,693 595,878 5,186 21,610 132,700 613,100
Dwight D. Carlson .. 137,218(3) 3,825,586 5,000 103,470 148,600 3,001,000
James Ratigan ...... 43,125(4) 954,275 -0- -0- -0- -0-
</TABLE>
(1) Represents the total gain which would have been realized if all such
options had been exercised on December 31, 1996.
(2) Represents the fair market value of the shares of Common Stock relating
to exercised options, as of the date of exercise, less the exercise price
of such options.
(3) Includes 2,991 shares of Common Stock underlying stock options retained
by the Company as payment for the exercise price of 18,587 shares of
Common Stock.
(4) Includes 8,844 shares of Common Stock underlying stock options retained
by the Company as payment for the exercise price of 34,281 shares of
Common Stock.
EMPLOYMENT AGREEMENTS
Messrs. Pease and Carlson serve in their present capacities pursuant to
the terms of employment agreements. Mr. Ratigan was employed pursuant to the
terms of the employment agreement described below.
Mr. Pease's agreement provides for an annual base salary of $200,000,
subject to increase at the discretion of the Management Development and
Compensation Committee ("Management Development Committee"), benefits
comparable to the Company's other executive officers, including life,
disability and health insurance and the use of a Company leased automobile and
an annual performance bonus target level of 60% of his base salary. Mr.
Pease's base salary for 1997 is $214,000 and he will receive reimbursement of
reasonable monthly club dues. In addition, such agreement provides for the
reimbursement of temporary housing, travel and relocation expenses incurred by
Mr. Pease, including moving expenses, real estate brokerage commissions and
certain closing and loan costs associated with the sale of Mr. Pease's prior
residence and purchase of a new residence in the state of Michigan and certain
incidental expenses related to the relocation, plus a payment equal to the
income taxes payable by Mr. Pease as a result of the receipt of such
reimbursements and tax payment. In the event Mr. Pease's employment is
terminated without cause, his salary and benefits will continue for twelve
months and he will earn a pro rata portion of any bonus that would have been
earned in the year of the termination.
Mr. Pease was granted options to purchase 200,000 shares of Common Stock
under the 1992 Plan. The Options consist of non-qualified stock options for
182,980 shares of Common Stock exercisable at an exercise price of $20.625 per
share and the remainder as incentive stock options exercisable at an exercise
price of $23.50 per share. These options become exercisable in cumulative
annual installments of 25% beginning February 14, 1997 and expire on February
14, 2006. In addition, in the event Mr. Pease's employment is terminated
without cause after July 14, 1996, unexercisable options for 66,667 shares of
Common Stock held by him will become immediately exercisable.
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<PAGE> 9
Mr. Carlson's agreement provides for an annual base salary of $155,000,
benefits comparable to the Company's other executive officers, reimbursement of
reasonable monthly club dues, and an annual performance bonus target level of
$95,000. In the event of certain terminations of Mr. Carlson's employment
without cause, his salary, a $7,917 monthly bonus and his benefits will
continue for the longer of (a) the number of months following the termination
of the agreement which is equal to one month for each year Mr. Carlson was
employed by the Company or (b) March 1, 1999, and all options held by him to
the extent not then exercisable, shall become immediately exercisable. If Mr.
Carlson's employment terminates for any reason, he will earn a pro rata portion
of any bonus that would have been earned in the year of the termination.
The Company can elect to convert Mr. Carlson's employment agreement into a
consulting arrangement at any time, with Mr. Carlson receiving the same annual
base salary, bonus and perquisites as set forth above through March 1, 1999 and
the Company extending the term of his stock options so that they continue to
vest through March 1, 1999. Mr. Carlson is required to render at least sixteen
hours of consulting services per month. Upon the termination of the consulting
arrangement, Mr. Carlson will receive the same benefits he would have received,
as described above, upon termination of his employment. Mr. Carlson will also
be entitled to office space and secretarial support for one year after he is no
longer an employee of the Company and so long as he continues to serve as Vice
Chairman of the Board.
Mr. Ratigan's employment agreement provided for an annual base salary of
$132,500, subject to increase at the discretion of the Management Development
Committee, benefits comparable to the Company's other executive officers and an
annual performance bonus target level in 1996 of $72,000. Following
termination of Mr. Ratigan's employment in August 1996, he continued to receive
one-half of his salary, together with full life, disability and health
insurance benefits and a $1,585 monthly payment until August 31, 1997. A pro
rata portion of the bonus that would have been earned in the year of the
termination was paid to Mr. Ratigan in 1996.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Payments due to Messrs. Pease, and Carlson upon termination of their
employment with the Company are described above under "Item-11 - Compensation
of Directors and Executive Officers - Executive Officers - Employment
Agreements."
Agreements relating to stock options granted under the 1992 Plan to each
of the executive officers named in the Summary Compensation Table, as well as
certain other officers of the Company, also provide that such options become
immediately exercisable in the event that the optionee's employment is
terminated without cause, or there is a diminishment of the optionee's
responsibilities, following a Change of Control of the Company or, if, in the
event of a Change of Control, such options are not assumed by the person
surviving the Change of Control or purchasing the assets in the Change of
Control. A "Change of Control" is generally defined as a merger of the Company
in which the Company is not the survivor, certain share exchange transactions,
the sale or transfer of all or substantially all of the assets of the Company,
or any person or group of persons (as defined by Section 13(d) the Securities
Exchange Act of 1934, as amended) acquires more than 50% of the Common Stock
("Option Acceleration Provision").
Certain option agreements issued to officers of the Company contain a
provision accelerating the exercisability of options granted under the 1992
Plan in the event of certain terminations of employment without cause.
ITEM 12. SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to beneficial
ownership of the Company's Common Stock, $0.01 par value (the "Common Stock"),
by each person known by management of the Company to be the beneficial owner of
more than 5% of its outstanding Common Stock. The number of shares reported is
as of the dates indicated in the footnotes below. The percentage of class is
based on 7,698,836 shares of Common Stock outstanding on April 25, 1997. The
information as to each person has been furnished by such person and, except as
where otherwise
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<PAGE> 10
indicated, each person has sole voting power and sole investment power with
respect to all shares by such person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ ----------------------- ----------------
<S> <C> <C>
Pilgrim Baxter & Associates,
Harold J. Baxter and Gary L. Pilgrim
1255 Drummers Lane, Suite 300
Wayne, PA 19087 692,700(1) 9.0%
U.S. Trust Company of New York
14 W. 47th Street,
New York, New York 10036 ........... 412,131(2) 5.4%
</TABLE>
(1) Based upon their statement on Schedule 13G dated March 12, 1997. Messrs.
Baxter and Pilgrim share voting power with respect to the shares of Common
Stock.
(2) Based upon its statement on Schedule 13G dated February 14, 1996.
BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to beneficial
ownership of the Company's Common Stock by each of the directors and director
nominees, the persons named in the Summary Compensation Table and by all
directors and executive officers as a group as of April 25, 1997, unless
otherwise indicated. The information as to each person has been furnished by
such person and, except as where otherwise indicated, each person has sole
voting power and sole investment power with respect to all shares beneficially
owned by such person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------------- ----------------------- ----------------
<S> <C> <C>
Dwight D. Carlson (2) (3) ................. 73,289 *
Philip J. DeCocco(2) ...................... 500 *
Robert S. Oswald(2) ....................... - *
Alfred A. Pease(2)(4) ..................... 50,000 *
Harry T. Rein (2) (5) ..................... 16,870 *
Paul E. Rice (2) (6) ...................... 165,000 2.1%
Louis R. Ross(2) .......................... 2,000 *
Terryll R. Smith(2) ....................... - -
Neil E. Barlow(7) ......................... 15,715 *
James A. Ratigan .......................... 223 *
Directors and executive officers as a group
(10 persons) (3) (4) (5)(6)(7) ........... 323,597 4.0%
</TABLE>
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* Less than 1% of class
(1) The address for Messrs. Carlson, DeCocco, Oswald, Pease, Ratigan, Rein,
Rice, Ross, Smith and Barlow is 47827 Halyard Drive, Plymouth, Michigan
48170.
(2) Serves as a member of the Board of Directors of the Company.
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(3) Includes options to purchase 33,125 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of April 25,
1997.
(4) Includes options to purchase 50,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of April 25,
1997.
(5) Consists of 1,869 shares of Common Stock owned by Canaan Venture Partners
L.P. and 1 share of Common Stock owned by Canaan Venture Offshore
Management, N.V., with respect to which Mr. Rein shares voting and
dispositive power but disclaims beneficial ownership. Also includes
options to purchase 15,000 shares of Common Stock, which are presently
exercisable.
(6) Consists of 150,000 shares of Common Stock owned by the State Treasurer
of the State of Michigan, Custodian of Public School Employees' Retirement
System; State Employees' Retirement System; Michigan State Police
Retirement System; Judges' Retirement System; and Probate Judges'
Retirement System ("State of Michigan Pension Funds"), of which Mr. Rice
is the State Administrator. Also includes options to purchase 15,000
shares of Common Stock, which are presently exercisable and which will be
exercised at the discretion of the State of Michigan Pension Funds.
Shares of Common Stock received by Mr. Rice in connection with the
exercise of such options are required to be delivered to the State of
Michigan Pension Funds. Mr. Rice shares voting and dispositive power but
disclaims beneficial ownership of these shares.
(7) Includes options to purchase 4,688 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of April 25,
1997.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's directors,
its executive (and certain other) officers, and any persons holding more than
ten percent of the Common Stock are required to report their ownership of the
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Specific
due dates for these reports have been established and the Company is required
to report in this proxy statement any failure to file by these dates during the
Company's last fiscal year. All of these filing requirements were satisfied by
the Company's officers, directors and ten percent shareholders, except that Mr.
Oswald failed to file on a timely basis one report relating to a single
transaction in Common Stock beneficially owned by him. In making these
statements, the Company has relied on the written representations of its
directors, officers and ten percent shareholders and copies of the reports that
have been filed with the Commission.
ITEM 13. CERTAIN TRANSACTIONS
The Company is a member of the Auto Body Consortium (the "ABC"), a group
comprised of General Motors Corporation, Ford Company and Chrysler Corporation,
companies in the automotive related businesses, including the Company, and
several universities and research organizations. Dwight D. Carlson, Vice
Chairman of the Board and the former President and Chief Executive Officer, and
a director of the Company, is the Chairman of the Board of the ABC, a
non-profit corporation. In October 1995, the ABC received a $8,300,000 grant
from the Department of Commerce. In connection with industry matching
commitments for such grant, the Company has committed to spend approximately
$100,000 per year for three years, commencing in October 1995. Such commitment
can be canceled by the Company upon 60 days' notice.
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SIGNATURE
Pursuant to the requirements of Section 13 of Securities Exchange Act of
1934, the Registrant has duly caused this Amendment to its Annual Report on
Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
PERCEPTRON, INC.
April 30, 1997 /s/ Alfred A. Pease
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By: Alfred A. Pease
Its: President and Chief Executive Officer
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