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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED OR [X] TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM JANUARY 1, 1999 TO JUNE 30, 1999.
COMMISSION FILE NUMBER: 0-20206
PERCEPTRON, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2381442
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
47827 Halyard Drive
Plymouth, Michigan 48170-2461
(734) 414-6100
(Registrant's telephone number, including area code)
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
RIGHTS TO PURCHASE PREFERRED STOCK
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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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 voting stock held by non-affiliates of the
registrant, based upon the closing sale price of the Common Stock on September
15, 1999, as reported by The Nasdaq Stock Market, was approximately $32,600,000
(assuming, but not admitting for any purpose, that all directors and executive
officers of the registrant are affiliates).
The number of shares of Common Stock, $0.01 par value, issued and outstanding as
of September 15, 1999, was: 8,169,152.
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ITEM 11: COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
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") receive an
annual retainer of $10,000, paid quarterly in the amount of $2,500. All Eligible
Directors who serve on more than one committee of the Board of Directors receive
$2,000 for each committee in excess of one on which he serves. All Eligible
Directors receive $1,250 for each Board meeting attended. In addition, directors
are reimbursed for their out-of-pocket expenses incurred in attending Board and
committee meetings. Directors are also eligible to participate in the Company's
1992 Stock Option Plan (the "1992 Plan").
All Eligible Directors participate in the Directors Stock Option Plan (the
"Directors Plan"). Any Eligible Director who is first elected or appointed after
February 9, 1995 will receive an option to purchase 15,000 shares of Common
Stock on the date of his or her election or appointment ("Initial Option"). 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 3,000 shares of Common Stock except
in 1999 (an "Annual Option"). In 1999, each Eligible Director received an option
to purchase an additional 10,000 shares of Common Stock. The Directors Plan
expires on February 9, 2005. The exercise price of options granted under the
Directors Plan is equal to the average closing price of the Company's Common
Stock as quoted on The Nasdaq Stock Market's National Market for the last five
trading days of the month in which the date of grant of the option occurs. 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 1/3% 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.
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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 six-month transition period ended June 30, 1999 and
fiscal years ended December 31, 1996, 1997, and 1998 to (i) the Company's Chief
Executive Officer, and (ii) the Company's executive officers at June 30, 1999
(other than the Chief Executive Officer) whose aggregate annual salary and bonus
are expected to exceed $100,000 for the 1999 calendar year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------------------------- ------------
Name and Other Annual All Other
Principal Position Year Salary($) Bonus($) Compensation($)(1) Options(#) Compensation($)
------------------ ---- --------- -------- ------------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease 1996 175,000 104,778 42,120 (3) 200,000 51,177 (4)
President, Chief 1997 214,000 37,878 20,821 (3) 30,000 29,925 (5)
Executive Officer 1998 230,000 0 0 -- 6,800 (6)
and Chairman of the 1999 115,000 0 0 25,000 5,000 (8)
Board (2)
John J. Garber 1999 60,615 15,000 (9) 0 35,000 391 (8)
Vice President Finance
and Chief Financial
Officer (9)
Dean J. Massab 1998 123,788 0 0 30,000 5,153 (6)
Vice President 1999 68,023 0 0 -- 2,825 (8)
Automotive
Business Unit (10)
Frank H. W. Schoenwitz 1998 132,917 25,000 (11) 133,025 (12) 33,000 82,595 (6)(7)
Vice President 1999 72,500 0 65,705 (12) -- 7,168 (8)
European Business
Unit (11)
</TABLE>
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(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 July 1996.
(3) Includes payment of certain tax "gross up" amounts of $42,120 and $20,821
for certain taxable income received by Mr. Pease in 1996 and 1997 as
described under "All Other Compensation."
(4) "All Other Compensation" includes reimbursements for temporary housing,
moving and travel expenses related to Mr. Pease's relocation to Michigan in
1996 totaling $22,925 and reimbursements for closing costs in the amount of
$28,252 related to the sale of Mr. Pease's former residence in 1996.
(5) "All Other Compensation" includes (i) $23,396 of reimbursements for closing
costs relating to Mr. Pease's purchase of a new residence in 1997
following his relocation to Michigan; (ii) $4,750 in contributions made by
the Company to Mr. Pease's account under the Company's 401(k) Plan with
respect to the fiscal year ended December 31, 1997; and (iii) the dollar
value of any life insurance premiums paid by the Company in the fiscal year
ended December 31, 1997 with respect to term life insurance for the benefit
of Mr. Pease of $1,779.
(6) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of the named executive officers under the
Company's 401(k) Plan with respect to the fiscal year ended December 31,
1998 as follows: Mr. Pease $5,000; and Mr. Massab $4,750; and (ii) the
dollar value of any life insurance premiums paid by the Company in the
fiscal year ended December 31, 1998 with respect to term life insurance
for the benefit of the named executives as follows: Mr. Pease $1,800; Mr.
Massab $403; and Mr. Schoenwitz $3,613.
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(7) "All Other Compensation" includes reimbursements for temporary housing,
moving and travel expenses related to Mr. Schoenwitz's relocation to
Germany and reimbursements for closing costs in 1998 totaling $78,982.
(8) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of the named executive officers under the Company's
401(k) Plan with respect to the six-month transition period ended June 30,
1999 as follows: Mr. Pease $5,000; and Mr. Massab $2,624; (ii) the dollar
value of any life insurance premiums paid by the Company in the six-month
transition period ended June 30, 1999 with respect to term life insurance
for the benefit of the named executives as follows: Mr. Garber $391; Mr.
Massab $201; and Mr. Schoenwitz $2,168; and (iii) reimbursements of moving
costs related to Mr. Schoenwitz's relocation to Germany of $5,000.
(9) Mr. Garber received a signing bonus when he became Vice President -
Finance and Chief Financial Officer in February 1999.
(10) Mr. Massab became Vice President - Automotive Business Unit in June 1998.
(11) Mr. Schoenwitz received a signing bonus when he became Vice President -
European Business Unit in February 1998.
(12) "Other Annual Compensation" for 1998 includes, $85,807 of tax "gross up"
amounts, $31,503 of educational allowance, $9,946 of housing allowance and
$5,769 of medical allowance. "Other Annual Compensation" for 1999
includes, $34,255 of tax "gross up" amounts, $12,592 of educational
allowance, $11,935 of housing allowance and $6,923 of medical allowance.
GRANTS OF OPTIONS
The following table sets forth certain information concerning individual grants
of stock options to each of the persons named in the Summary Compensation Table
made during the six-month transition period ended June 30, 1999. All grants
described in the following table were made under the Company's 1992 Stock Option
Plan and contain the Option Acceleration Provision (as defined under "Item 11 --
Compensation of Directors and Officers -- Executive Officers -- Termination of
Employment and Change of Control Arrangements").
OPTION GRANTS IN TRANSITION PERIOD
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Individual Grants Annual Rates of
-------------------------------------- Stock Price
Number of Percent of Total Appreciation for
Securities Options Granted To Exercise or Option Term(3)
Underlying Option Employees In Base Price Expiration --------------------
Name Granted(#) Fiscal Year(1) ($/Sh) Date(2) 5%($) 10%($)
- ------------------------ ----------------- -------------------- ------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease 25,000(4) 35.7 6.20 12/31/08 114,786 274,589
John J. Garber 35,000(5) 50.0 5.24 02/28/09 126,586 310,138
Dean J. Massab 0 0 -- -- -- --
Frank H. W. Schoenwitz 0 0 -- -- -- --
</TABLE>
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(1) Options to purchase a total of 70,000 shares of Common Stock were granted
to team members in the six-month transition period ended June 30, 1999.
(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 ten 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) Consists of 12,500 of nonqualified options and 12,500 of incentive stock
options. Nonqualified options become exercisable in two annual installments
of 6,250 shares of Common Stock beginning January 1, 2000. The Incentive
Stock Options become exercisable in two annual installments of 6,250 shares
of Common Stock beginning on January 1, 2002.
(5) Consists of 35,000 of incentive stock options. The Incentive Stock Options
become exercisable in four annual installments of 8,750 shares of Common
Stock beginning March 1, 2000.
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EXERCISE AND VALUE OF OPTIONS
The following table sets forth certain information concerning exercises of stock
options during the six-month transition period ended June 30, 1999 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 June 30, 1999 on
an aggregated basis.
AGGREGATED OPTION EXERCISES IN TRANSITION PERIOD
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at Fiscal Year-End(#) at Fiscal Year-End ($)(1)
Acquired on Value -------------------------- -------------------------
Name Exercise(#) Realized($)(2) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease ........... 0 0 157,500 97,500 0 0
John J. Garber ........... 0 0 0 35,000 0 0
Dean J. Massab ........... 0 0 14,502 51,998 0 0
Frank H.W. Schoenwitz...... 0 0 7,500 25,500 0 0
</TABLE>
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(1) Represents the total gain which would have been realized if all such
options had been exercised on June 30, 1999.
(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.
EMPLOYMENT AGREEMENTS
Mr. Pease serves in his present capacity pursuant to the terms of an employment
agreement. 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 1999
is $230,000 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.
In the event Mr. Pease's employment is terminated without cause, all remaining
unexercisable options for shares of Common Stock granted to him in 1996 will
become immediately exercisable. In 1996, Mr. Pease was granted options to
purchase 200,000 shares of Common Stock under the 1992 Plan. These options
become exercisable in cumulative annual installments of 25% beginning February
14, 1997 and expire on February 14, 2006.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Payments due to Mr. Pease upon termination of his 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").
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment to its Transition
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
PERCEPTRON, INC.
(Registrant)
By: /S/ Alfred A. Pease
------------------------------------
Alfred A. Pease, Chairman, President
and Chief Executive Officer
Date: November 2, 1999
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