<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
PERCEPTRON, INC.
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(Name of Registrant as Specified in Its Charter)
THOMAS S. VAUGHN, ESQ.
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
* PRELIMINARY COPIES *
(DEFINITIVE PROXY STATEMENT INTENDED TO BE RELEASED OCTOBER 23, 2000)
[PERCEPTRON LETTERHEAD]
October , 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held on Monday, December 4, 2000, at 9:00 a.m., local time, at 47827 Halyard
Drive, Plymouth, Michigan 48170.
The attached notice of the meeting and Proxy Statement describe the items
of business to be transacted: (a) the election of seven directors, (b) the
approval of an amendment to the Company's Directors Stock Option Plan to permit
non-employee Directors to purchase shares of Common Stock in exchange for all or
a portion of the cash fees payable to them for serving as directors of the
Company (the "Directors Plan Amendment"), (c) the approval of an amendment to
the Company's Bylaws to remove the prohibition on the Board of Directors of the
Company amending the Bylaws so as to affect the number of directors in order to
give the Board of Directors the right to set the number of directors for the
Company at less than seven or more than eleven (the "Bylaws Amendment"), and (d)
such other business as may properly come before the meeting or any adjournment
thereof.
The enclosed Proxy Statement offers a more complete description of the
Directors Plan Amendment and the Bylaws Amendment. The Board of Directors
encourages you to read the Proxy Statement carefully.
THE BOARD OF DIRECTORS BELIEVES IT IS IMPORTANT THAT THE DIRECTORS PLAN
AMENDMENT AND THE BYLAWS AMENDMENT BE ADOPTED, AND WE NEED YOUR VOTE.
After the formal business session, there will be a report to the
shareholders on the progress of the Company along with a discussion period. I
look forward to seeing you at the Annual Meeting and hope you will make plans to
attend. Whether you plan to attend the meeting, I urge you to sign, date and
return your proxy in the addressed envelope enclosed for your convenience so
that as many shares as possible may be represented at the meeting. No postage is
required if the envelope is mailed in the United States. Returning the proxy
will not affect your right to attend the meeting or your right to vote in
person.
Sincerely,
/s/ ALFRED A. PEASE
Alfred A. Pease
Chairman of the Board of Directors,
President
and Chief Executive Officer
<PAGE> 3
[PERCEPTRON LOGO]
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PERCEPTRON, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 4, 2000
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The Annual Meeting of Shareholders of Perceptron, Inc., a Michigan
corporation, will be held on Monday, December 4, 2000, at 9:00 a.m., local time,
at 47827 Halyard Drive, Plymouth, Michigan 48170 for the following purposes:
1. To elect seven directors to serve until the 2001 Annual Meeting of
Shareholders.
2. To approve and adopt an amendment to the Company's Directors Stock
Option Plan to permit non-employee Directors to purchase shares of
Common Stock in exchange for all or a portion of the cash fees payable
to them for serving as directors of the Company (the "Directors Plan
Amendment").
3. To approve and adopt an amendment to the Company's Bylaws to remove the
prohibition on the Board of Directors of the Company amending the Bylaws
so as to affect the number of directors in order to give the Board of
Directors the right to set the number of directors for the Company at
less than seven or more than eleven (the "Bylaws Amendment").
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on October 13, 2000,
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting. A certified list of shareholders entitled to vote at
the meeting will be available for examination by any shareholder during the
meeting at the corporate offices at 47827 Halyard Drive, Plymouth, Michigan
48170.
By the Order of the Board of Directors
/s/ THOMAS S. VAUGHN
Thomas S. Vaughn, Secretary
47827 Halyard Drive
Plymouth, Michigan 48170
October , 2000
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THE VOTE OF EVERY SHAREHOLDER IS IMPORTANT, AND YOUR COOPERATION IN
PROMPTLY RETURNING YOUR MARKED, DATED AND SIGNED PROXY WILL BE APPRECIATED. THE
PROXY IS REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING. YOUR PROXY WILL, HOWEVER, HELP TO ASSURE A QUORUM AND TO
AVOID ADDED PROXY SOLICITATION COSTS.
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<PAGE> 4
-------------------------
PROXY STATEMENT
-------------------------
PERCEPTRON, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 9:00 A.M. ON DECEMBER 4, 2000
-------------------------
INTRODUCTION
This Proxy Statement and the accompanying form of proxy, which were first
mailed to shareholders on approximately October , 2000, are furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
(the "Board") of Perceptron, Inc. (the "Company") for use at the Annual Meeting
of Shareholders of the Company (the "Annual Meeting") to be held at the
corporate offices of the Company on Monday, December 4, 2000, at 9:00 a.m.,
local time, and at any adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders and in this Proxy
Statement. The corporate offices of the Company are located at 47827 Halyard
Drive, Plymouth, Michigan, 48170, and the Company's telephone number is (734)
414-6100.
Only holders of record of the Company's Common Stock, $0.01 par value (the
"Common Stock") at the close of business on October 13, 2000 (the "Record Date")
will be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. Shareholders of record on the Record Date are entitled to
one vote per share on any matter that may properly come before the Annual
Meeting. As of the Record Date, there were [8,173,001] shares of
Common Stock outstanding and entitled to vote. The presence, either in person or
by properly executed proxy, of the holders of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum at the Annual
Meeting. See "Further Information -- Share Ownership of Management and Certain
Shareholders" for a description of the beneficial ownership of the Common Stock.
Directors, officers and other employees of the Company may solicit, without
additional compensation, proxies by any appropriate means, including personal
interview, mail, telephone, courier service and facsimile transmissions.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries which are record holders of the Company's Common Stock
to forward proxy soliciting material to the beneficial owners of such shares and
the Company will reimburse such record holders for their reasonable expenses
incurred in connection therewith. The cost of soliciting proxies, including the
preparation, assembling and mailing of the Notice of Meeting, Proxy Statement,
form of proxy and any other soliciting material, as well as the cost of
forwarding such material to the beneficial owners of Common Stock, will be borne
by the Company.
Shares represented by a duly executed proxy, unless previously revoked,
will be voted at the Annual Meeting in accordance with the instructions of the
shareholder thereon if the proxy is received by the Company before the close of
business on December 1, 2000. Shares represented by a proxy received after
December 1, 2000 will be voted if the proxy is received by the Company in
sufficient time to permit the necessary examination and tabulation of the proxy
before the vote of shareholders is taken. A proxy also gives Messrs. Pease,
Garber and Vaughn discretionary authority to vote all shares of Common Stock
represented by the proxy on any other matter that is properly presented for
action at the meeting; however, the Board of Directors does not intend to
present any other matters at the Annual Meeting. Any proxy given pursuant to
this solicitation may be revoked by the person giving it at any time before it
is voted. Proxies may be revoked by (i) filing with the Secretary of the
Company, at or before the Annual Meeting, a written notice of revocation bearing
a later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at the
Company's corporate offices at or before the Annual Meeting, or (iii) attending
the Annual Meeting and voting in person (although attendance at the Annual
Meeting will not in and of itself constitute a revocation of a proxy).
<PAGE> 5
Abstentions, and withheld votes with respect to the election of directors,
are counted only for purposes of determining whether a quorum is present at the
2000 Annual Meeting. Broker non-votes are not counted for any purpose. Directors
are elected by a plurality of the votes cast, so that only votes cast "for"
directors are counted in determining which directors are elected. Approval of
the proposal to amend the Company's Bylaws requires a majority vote of all
outstanding shares of Common Stock. Approval of the proposal to amend the
Directors Stock Option Plan requires a majority of the votes cast on the matter.
For purposes of determining the number of votes cast with respect to the
proposals to amend the Company's Bylaws and the Directors Stock Option Plan,
only those cast "for" or "against" are included, and abstentions and broker
non-votes are not counted for this purpose.
MATTERS TO COME BEFORE THE MEETING
PROPOSAL 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to elect a board of seven
directors to hold office, in accordance with the Bylaws of the Company, until
the 2001 annual meeting and until the election and qualification of their
successors, or until their resignation or removal. The following table sets
forth information regarding the nominees for election to the Company's Board of
Directors. The shares represented by properly executed proxies will be voted in
accordance with the specifications made therein. PROXIES WILL BE VOTED "FOR" THE
ELECTION OF SUCH NOMINEES UNLESS THE SPECIFICATION IS MARKED ON THE PROXY
INDICATING THAT AUTHORITY TO DO SO IS WITHHELD. If a nominee is unable to serve
or, for good cause, will not serve, the proxy confers discretionary authority to
vote with respect to the election of any person to the Board. The nominees
receiving a plurality of votes cast at the Annual Meeting will be elected to the
Board of Directors. Shares may not be voted cumulatively for the election of
directors.
The nominees named below have been selected by the Board of Directors of
the Company. The following information with regard to business experience has
been furnished by the respective nominees for director.
<TABLE>
<CAPTION>
POSITION, PRINCIPAL OCCUPATIONS
NAME AND AGE AND OTHER DIRECTORSHIPS
------------ -------------------------------
<S> <C>
David J. Beattie, 58.............. Mr. Beattie has been a director of the Company since 1997.
Mr. Beattie has been Chief Operating Officer of
McNaughton -- McKay Electric Company ("MME") since September
2000 and prior to that time, from February 1997 to September
2000, was Senior Vice President, Sales and Marketing of such
company, where he is responsible for all sales and marketing
activities, strategic planning, engineering and related
services. He has been employed by MME since 1978 in various
capacities including Chief Engineer, Sales Manager and Vice
President. MME is a distributor of industrial automation
products and services. Mr. Beattie served as a director of
Trident Systems, Inc. prior to its acquisition by the
Company in April 1997.
Kenneth R. Dabrowski, 57.......... Mr. Dabrowski has been a director of the Company since 1999.
Mr. Dabrowski has been a Senior Lecturer at Massachusetts
Institute of Technology since June, 1999. Mr. Dabrowski was
Vice President, Quality and Process Leadership, Ford
Automotive Operations of Ford Motor Company from September
1996 to January 1999 where he had global responsibility for
corporate and supplier quality and customer satisfaction and
prior to that time was Vice President, Commercial Truck
Vehicle Center for Ford Motor Company from September 1994 to
September 1996.
</TABLE>
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<TABLE>
<CAPTION>
POSITION, PRINCIPAL OCCUPATIONS
NAME AND AGE AND OTHER DIRECTORSHIPS
------------ -------------------------------
<S> <C>
Philip J. DeCocco, 62............. 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.
W. Richard Marz, 57............... Mr. Marz has been a director of the Company since 2000. Mr.
Marz has been Executive Vice President, Geographic Markets
of LSI Logic Corporation, a semiconductor manufacturer,
since May 1996 and prior to that time, from September 1995
to May 1996, was Senior Vice President, Sales and Marketing,
North America of such company.
Robert S. Oswald, 59.............. Mr. Oswald has been a director of the Company since 1996.
Mr. Oswald has been Chairman, President and Chief Executive
Officer of Robert Bosch Corporation, 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. Mr. Oswald
serves as a director and member of the management board of
Robert Bosch, Gmbh and a director of Robert Bosch
Corporation.
Alfred A. Pease, 54............... Mr. Pease has been a director of the Company since 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.
Terryll R. Smith, 50.............. Mr. Smith has been a director of the Company since 1996. Mr.
Smith has been President and Chief Executive Officer of NASA
Environmental Technologies Inc. a water purification
company, since January 2000. From December 1998 to August
1999, Mr. Smith was President and Chief Executive Officer of
picoNetworks, an integrated circuits and software services
company. From February 1996 to March 1998, Mr. Smith was
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.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors is responsible for direction of the overall affairs
of the Company. Directors of the Company are elected to serve until their
successors are elected. The Board of Directors and each committee thereof meet
formally from time to time and also take action by consent resolutions. During
the fiscal year ended June 30, 2000, the Board of Directors met a total of five
times and took action by consent resolution on one occasion. All of the current
directors who are standing for re-election attended at least 75% of the total
meetings of the Board of Directors, and of any committee on which they served,
held during the period in fiscal year 2000 in which they served as directors or
members of any such committees.
The Board of Directors has delegated certain authority to an Audit
Committee, a Management Development, Compensation and Stock Option Committee and
an Executive and Nominating Committee to assist it in executing its duties. The
composition and principal functions of each Committee are as follows:
Audit Committee. The Audit Committee is currently comprised of three
outside members of the Board of Directors: Messrs. Dabrowski, Oswald and Smith.
The primary responsibility of the Audit Committee is to
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<PAGE> 7
oversee the Company's financial reporting process on behalf of the Board of
Directors and report the results of its activities to the Board of Directors.
The principal functions of the Audit Committee are the following: (i) review and
nominate the accounting firm to be appointed as the Company's independent
certified public accountants; (ii) review the nature and extent of all services
provided to the Company by such accountants and evaluates their fees and the
effects of such services upon their independence; (iii) review the scope,
purpose and procedures of the audit; (iv) review the audited financial
statements and the proposed footnotes to be included in the Company's Annual
Report on Form 10-K and report annually to the Board of Directors whether the
Audit Committee recommends to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for filing
with the Securities and Exchange Commission; (v) review with such accountants
its experience, findings and recommendations upon completion of the audit; (vi)
review the adequacy of the Company's internal accounting procedures and
controls; and (vii) review and reassess annually the adequacy of the Audit
Committee's charter. The Audit Committee held three meetings in fiscal year
2000.
Management Development, Compensation and Stock Option Committee. The
Management Development, Compensation and Stock Option Committee ("Management
Development Committee") is currently comprised of three members of the Board of
Directors: Messrs. Beattie, DeCocco, and Marz. Mr. Marz was appointed to the
Management Development Committee in September 2000. The principal functions of
the Committee are to review the Company's compensation programs, to establish
the compensation programs for the Company's executive officers, and to review
and approve annual bonuses to be paid to such executive officers and to
administer the Company's Stock Option Plans. The Committee met three times in
fiscal year 2000.
Executive and Nominating Committee. The Executive and Nominating Committee
is currently comprised of three members: Messrs. Pease, Beattie and Smith. The
Committee is generally authorized to act on behalf of the Board of Directors
between meetings of the Board. The Committee's duties also include recommending
to the Board of Directors the nominees to stand for election as directors at
each annual meeting of shareholders and recommending to the Board of Directors
the directors to serve on the standing committees of the Board. Recommendations
by shareholders of possible director nominees may be addressed to the Executive
and Nominating Committee of the Board of Directors in care of the Secretary of
the Company and will be forwarded to the Committee for consideration. The
Committee did not meet in fiscal year 2000.
PROPOSAL 2 -- AMENDMENT TO THE DIRECTORS STOCK OPTION PLAN
PROPOSED AMENDMENT TO THE DIRECTORS PLAN
The Company proposes to amend the Directors Stock Option Plan (the
"Directors Plan") to permit non-employee Directors to purchase shares of Common
Stock through the Directors Plan in exchange for all or a portion of the cash
fees payable to them for serving as a director of the Company ("Directors Stock
Purchase Plan Option") (the "Directors Plan Amendment"). The Board of Directors
believes that the Directors Stock Purchase Plan Option will assist the Company
in its efforts to attract and retain highly qualified outside directors. The
Directors Stock Purchase Plan Option is also being proposed to further align
non-employee Directors interests and the interests of the Company's shareholders
by encouraging non-employee Directors to acquire shares of Common Stock. See
"Compensation of Directors and Executive Officers -- Directors."
Under the Directors Stock Purchase Plan Option, non-employee Directors may
elect to use all or a portion of their annual directors fees payable in cash to
purchase Common Stock. By December 31 of each year, a director must make his or
her election to purchase shares of Common Stock in exchange for all or a portion
of directors fees payable from December 1 of that year to December 1 of the next
year. Directors had until March 17, 2000 in which to elect to purchase shares of
Common Stock in exchange for all or a portion of directors fees payable
beginning December 1, 1999 through December 1, 2000. A director's election for
the period December 1, 1999 to December 1, 2000 will not be effective unless the
Directors Plan Amendment is approved by the shareholders of the Company at the
Annual Meeting. If the Directors Plan Amendment is not
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<PAGE> 8
approved by the shareholders, the directors who elected to purchase shares of
Common Stock will be paid in cash the directors fees the director elected to use
to purchase shares of Common Stock.
Directors fees are payable in cash on March 1, June 1, September 1 and
December 1 of each year. On each of these dates, the Company will determine the
number of shares of the Common Stock each Director who has elected to
participate in the Directors Stock Purchase Plan Option has earned on that date.
This determination will be made by dividing all director's fees payable on each
of those dates which the Director has elected to exchange for Common Stock, by
the fair market value of the Common Stock on that date. Any portion of the
director's fees payable on each of those dates which the Director has not
elected to receive in Common Stock will be paid to the Director in cash. The
fair market value of the Common Stock will be determined by using the average of
the closing sales price of the Common Stock on The Nasdaq Stock Market, Inc.'s
National Market for the five consecutive trading days on The Nasdaq Stock
Market, Inc.'s National Market immediately preceding the date of determination.
The Company will issue share certificates for all shares of Common Stock
purchased in a calendar year by December 15th of such year unless a director
requests to receive his or her share certificate at any time during the year by
sending written notice to the Company.
If a director participating in the Directors Stock Purchase Plan Option
dies, becomes disabled, or ceases to be a director of the Company for any
reason, the amount of such director's accrued cash compensation that has not yet
been issued in the form of Common Stock will be paid to such director or his or
her executor or other legal representative and his or her right to receive
further shares of Common Stock under the Directors Stock Purchase Plan Option
will terminate.
Only directors who are not employed by the Company or any subsidiary of the
Company and who are not serving as Chairman of the Board are eligible to
participate in the Directors Plan. There currently are and, following the Annual
Meeting, there will be six directors eligible to participate in the Directors
Plan including Messrs. Beattie, Dabrowski, DeCocco, Marz, Oswald and Smith.
Neither the Chairman of the Board, the executive officers named in the Summary
Compensation Table, nor any other officers or team members of the Company, are
eligible to participate in the Directors Plan.
REQUIRED VOTE
Approval of the proposed amendment to the Directors Plan requires a
majority of the votes cast on the matter. PROXIES WILL BE VOTED "FOR" THE
APPROVAL OF THE AMENDMENT TO THE DIRECTORS PLAN UNLESS OTHERWISE INDICATED ON
THE PROXY.
THE DIRECTORS STOCK OPTION PLAN
The Directors Plan was approved by the Board of Directors on February 9,
1995 and was amended on May 15, 1995 and approved by the shareholders of the
Company on June 23, 1995. The Directors Plan has been amended on occasion
thereafter. Most recently the Directors Plan Amendment was approved by the Board
of Directors on December 1, 1999. The Directors Plan Amendment is being
submitted to the shareholders for approval at the Annual Meeting.
Under the terms of the Directors Plan, eligible non-employee directors are
granted options under the Directors Plan in addition to their meeting fees. See
"Further Information -- Compensation of Directors and Executive
Officers-Directors".
The Directors Plan currently provides for the issuance of options to
purchase up to the 325,500 shares of Common Stock to non-employee directors of
the Company. Of the 325,500 shares available under the Directors Plan, as of
October 13, 2000, 155,000 shares are available for future grants and purchases,
140,500 are reserved for outstanding grants under the Directors Plan, 6,970 are
reserved for issuance under the Directors Stock Purchase Plan Option and the
remainder have been issued upon exercise of stock options previously granted
under the Directors Plan. Shares of Common Stock subject to any unexercised
portion of a terminated, forfeited, canceled or expired option under the
Directors Plan may be used again for subsequent grants under such plan. In the
event the option price of an option granted under the Directors Plan is tendered
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<PAGE> 9
through the retention by the Company of shares underlying the option or by
payment of the exercise price with shares of Common Stock previously acquired by
the optionee under the Directors Plan, then such shares may also be used for
subsequent grants of options under the Directors Plan.
Each eligible director who is elected or appointed to the Board of
Directors receives an Initial Option to purchase 15,000 shares of Common Stock
on the date of his or her first election or appointment (an "Initial Option").
In addition, each non-employee 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 (an
"Annual Option"). In 1999, each eligible Director who was elected at the 1999
Annual Meeting was provided with an option to purchase an additional 10,000
shares of Common Stock in lieu of the Annual Option.
The exercise price of options granted and the purchase price for purchases
of Common Stock made under the Directors Plan will be equal to the average
closing price of the Common Stock on The Nasdaq Stock Market Inc.'s National
Market for the last five consecutive trading days immediately preceding the
grant date or date of determination. As of the close of business on October 13,
2000, the price per share of Common Stock as quoted on The Nasdaq Stock Market
Inc's National Market was $ . The option exercise price is payable in
cash, by certified check, bank draft or money order, by delivery to the Company
of previously acquired shares of Common Stock having a fair market value equal
to the option exercise price, through a cashless exercise procedure whereby the
optionee instructs his or her broker to deliver to the Company sufficient cash
to pay the exercise price and applicable exercise and employment withholding
tax, for options issued prior to June 5, 1998, through the retention of shares
from the option being exercised having a fair market value equal to the option
exercise price (plus tax withholding, if applicable), or by any combination of
the foregoing.
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
331/3% of the shares subject to the option. All options granted under the Plan
are exercisable for a period of ten years from the date of grant, unless earlier
terminated.
If a non-employee director's term of office terminates for any reason,
including such director becoming an Employee (as defined in the Directors Plan)
of the Company, other than such director's election or appointment as Chairman
of the Board, prior to the date the option or portion thereof becomes
exercisable, such option or portion thereof shall terminate. If the non-employee
director's term of office terminates because such director is elected or
appointed as Chairman of the Board and the director is not an Employee or does
not become an Employee as a result of such election or appointment, then such
director shall not be eligible for further automatic grants of options so long
as he or she serves as Chairman, but his or her options granted prior to his or
her election as Chairman will not terminate and will continue to become
exercisable in full after one year, in the case of Initial Options, or in
33 1/3% annual increments, in the case of Annual Options. Thereafter, if such
Chairman becomes an Employee of the Company or ceases to be a director, prior to
the date his or her options become exercisable, such options or portion thereof
which are not then exercisable shall terminate.
To the extent that an option is exercisable and is unexercised on the date
of the non-employee director's term of office terminates for any reason,
including such director becoming an Employee of the Company, other than such
director's election or appointment as Chairman of the Board, the option will
terminate on the earlier of (i) the expiration date of the option or (ii) three
months after such non-employee director's termination; provided, however, that
the exercise period in the foregoing clause (ii) will be extended to one year
after termination if termination is due to the non-employee director's death or
disability. To the extent an option or any portion thereof is exercisable and
unexercised on the date a non-employee director's term of office as a
non-employee director is terminated due to the non-employee director's election
or appointment as Chairman (and the non-employee director is not an Employee or
does not become an Employee as a result of such election or appointment), the
option will terminate on the earlier of (i) the expiration date of the option or
(ii) three months after such non-employee director becomes an Employee or ceases
to be a Director; provided, however, that the exercise period in the clause (ii)
will be extended to one year after the
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non-employee director ceases to be a director if such termination is due to the
non-employee director's death or disability.
The Directors Plan provides that (i) in the event of a termination by the
Company of a director's membership on the Board or failure to renominate the
director for election to the Board, or voluntary resignation by the director
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 the options under the
Directors Plan, any portion of an option granted under the Directors Plan that
is then not exercisable will become immediately exercisable. For purposes
hereof, a "Change in Control" will 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 such other corporation 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 team members of the Company) becoming a
beneficial owner, directly or indirectly, of securities of the Company
representing more than 50% of either the then outstanding Common Stock or the
combined voting power of the Company's then outstanding voting securities.
Options granted under the Directors Plan are not transferable except by
will or by the laws of descent and distribution, and may be exercised during a
non-employee director's lifetime only by such non-employee director.
The Directors Plan is administered by the Management Development Committee.
The Management Development Committee is authorized to construe the provisions of
the Directors Plan, but will have no discretion with respect to the terms of
grants made automatically under the Directors Plan, except to the extent such
discretion would not result in the Directors Plan failing to qualify for the
exemption provided under Securities and Exchange Commission Rule 16b-3.
AMENDMENT OR TERMINATION
The Board may terminate the Directors Plan, the granting of options under
the Directors Plan, or the Directors Stock Purchase Plan Option at any time. No
new grants will be made under the Directors Plan or purchases will be made under
the Directors Stock Purchase Option under such Plan after February 9, 2005
unless the shareholders of the Company agree to extend the expiration date of
the Directors Plan. The Board of Directors may at any time and from time to
time, amend or modify the Directors Plan; provided, however, no amendment or
modification may be made to the Directors Plan without the approval of the
shareholders to the extent that Rule 16b-3 requires such amendment or
modification to be approved by the shareholders of the Company. Unless otherwise
permitted under Rule 16b-3, the Directors Plan may not be amended more than once
in any six month period other than to comply with changes in the Code. No
amendment or termination will affect any option previously granted to a non-
employee director without the consent of such non-employee director.
FEDERAL INCOME TAX CONSEQUENCES
Under the Code as now in effect, upon the exercise of an option granted
under the Directors Plan, an optionee will recognize ordinary income equal to
the difference between the option price and the fair market value of the Common
Stock at the time of exercise. When the optionee disposes of shares acquired by
the exercise of an option, the amount received in excess of the fair market
value on the date of exercise will be treated as long or short-term capital
gain, depending on the holding period of the shares. Payment of the option price
for shares of Common Stock by surrender of shares of Common Stock previously
owned by the
7
<PAGE> 11
optionee will not give rise to a recognized gain on the shares surrendered. To
the extent the number of new shares received upon the exercise of an option
exceeds the number of shares surrendered upon the exercise of such option, the
fair market value of the additional shares on the date the option is exercised,
reduced by the amount of any cash paid by the optionee upon the exercise of the
option, will be taxable to the optionee as ordinary income in the year the
option is exercised. The optionee's basis and holding period for the number of
newly-acquired shares equal to the number of surrendered shares will carry over
from the surrendered shares on a share-for-share basis. The optionee's basis in
the remaining shares will equal the fair market value of the shares on the
exercise date, and the optionee's holding period will begin on the day after the
date on which the optionee's tax basis is determined. If the option price of an
option is tendered through the retention by the Company of shares of Common
Stock underlying the option being exercised, the optionee will recognize
ordinary income in the year of exercise equal to the difference between the fair
market value on the date of exercise of the Common Stock retained by the Company
and the exercise price of such options. The optionee's basis for the newly
acquired shares will be equal to the fair market value of the shares on the
exercise date, and the optionee's holding period will begin on the day after the
date of exercise. To the extent ordinary income is recognized by the optionee,
the Company may deduct a corresponding amount as compensation.
Under the Code as now in effect, a director will recognize ordinary income
at each quarterly director fee payment date equal to the fair market value of
the shares a director earns at such payment date based upon the value of the
shares at each such payment date. Generally, the fair market value of the shares
earned will equal the cash directors fee the director elected to use to purchase
the shares earned. A director's basis in the shares will be equal to the amount
of ordinary income that the director recognizes. If the directors sells or
otherwise disposes of the shares purchased, any gain or loss that he or she may
experience upon the sale or other disposition will be treated as short-term or
long-term capital gain or loss, depending upon how long he or she held the
shares. The amount of short-term or long-term capital gain or loss that a
director will recognize when he or she sells or otherwise disposes of his or her
shares will be equal to the difference between their basis in the shares and the
amount he or she realized on the sale or other disposition. The Company will be
entitled to take a compensation deduction for federal income purposes equal to
the amount of ordinary income the director recognizes.
STOCK OPTIONS GRANTED AND SHARES PURCHASED UNDER THE DIRECTORS PLAN
The following table lists each person named in the Summary Compensation
Table under "Further Information -- Compensation of Directors and Executive
Officers -- Summary Compensation Table" below, all director nominees, all
current executive officers as a group, all current directors and director
nominees (other than executive officers) as a group, each associate of the
foregoing persons, each other person who received or is to receive at least five
percent of the options under the Directors Plan, and all current team members of
the Company (other than executive officers) as a group, indicating the number
and weighted average exercise price of options granted under the Directors Plan
to each of the foregoing, as of October 13, 2000, and options which would be
granted under the Directors Plan to each of the foregoing if they continued
8
<PAGE> 12
in their present position with the Company (or if a director nominee, served as
a director of the Company) for the remaining term of the Directors Plan through
February 9, 2005.
<TABLE>
<CAPTION>
OPTION SHARES FUTURE POSSIBLE
GRANTED UNDER OPTION SHARE
DIRECTORS PLAN WEIGHTED AVERAGE GRANTS UNDER
NAME AND PRINCIPAL POSITION (1) EXERCISE PRICE DIRECTORS PLAN
--------------------------- -------------- ---------------- ---------------
<S> <C> <C> <C>
Alfred A. Pease, President, Chief Executive Officer
and Chairman of the Board, Director Nominee...... 0 0 0
John J. Garber, Vice President/Chief Financial
Officer.......................................... 0 0 0
Harry Rittenour, Senior Vice
President -- Industrial Businesses Segment....... 0 0 0
Dean J. Massab, former Vice President -- Automotive
Business Segment................................. 0 0 0
David J. Beattie, Director Nominee................. 26,500(1) $18.29 15,000(2)
Kenneth R. Dabrowski, Director Nominee............. 15,000(1) $ 3.27 15,000(2)
Philip J. DeCocco, Director Nominee................ 28,000(1) $20.28 15,000(2)
W. Richard Marz, Director Nominee.................. 15,000(1) $ 3.59 12,000(2)
Robert S. Oswald, Director Nominee................. 28,000(1) $20.28 15,000(2)
Terryll R. Smith, Director Nominee................. 28,000(1) $20.28 15,000(2)
All Current Executive Officers as a Group (4
persons)......................................... 0 0 0
All Current Directors (other than Executive
Officers) as a Group (6 persons)................. 140,500(1) $16.31 87,000(2)
All Current Team Members (other than Executive
Officers) as a Group............................. 0 0 0
</TABLE>
-------------------------
(1) Consists of Initial Options of 15,000 shares of Common Stock each to Messrs.
Beattie, Dabrowski, DeCocco, Marz, Oswald and Smith, Options granted at the
1999 Annual Meeting of 10,000 shares of Common Stock each to Messrs.
Beattie, DeCocco, Oswald and Smith and Annual Options of 1,500 shares of
Common Stock to Mr. Beattie and 3,000 shares of Common Stock each to Messrs.
DeCocco, Oswald and Smith. Initial Options held by Messrs. Beattie,
Dabrowski, DeCocco, Oswald and Smith are fully exercisable or become
exercisable within 60 days of October 13, 2000. 4,334 of Mr. Beattie's and
5,834 of Messrs. DeCocco, Oswald and Smith's Annual Options, respectively,
are presently exercisable or become exercisable within 60 days of October
13, 2000.
(2) Consists of five annual grants of an option to purchase 3,000 shares of
Common Stock to five current directors and four annual grants of an option
to purchase 3,000 shares of Common Stock to Mr. Marz.
To date, Messrs. Dabrowski and Oswald, non-employee Directors of the
Company, have elected to participate in the Directors Stock Purchase Plan
Option. If the Directors Plan Amendment is approved, these Directors will each
receive 3,435 shares of Common Stock, at a weighted average purchase price of
$4.00, by December 15, 2000 based upon services rendered through September 30,
2000.
PROPOSAL 3 -- AMENDMENT TO THE COMPANY'S BYLAWS
PROPOSED AMENDMENT TO THE COMPANY'S BYLAWS
It is proposed that the Company's Bylaws be amended to remove the
prohibition on the Board of Directors of the Company amending the Bylaws so as
to affect the number of directors (the "Bylaws Amendment"). Currently, the
Bylaws give the Board the authority to set the number of directors of the
Company between seven and eleven. The effect of the proposed amendment is to
permit the Board of Directors to set the number of directors for the Company at
less than seven or more than eleven without shareholder approval. The Bylaws
Amendment does not prohibit the shareholders from independently establishing the
size of the Board.
9
<PAGE> 13
The Board of Directors believes that the most important factors in
determining the composition of the Board are the skills and experience that
potential board members bring to the Company. They further believe that new
board members should be added to the Board only if they have skills and
experience which will assist the Company in achieving its long-term strategic
goals. The Board recognizes that board size is one factor that needs to be taken
into consideration in determining board composition. However, the proper number
of board members depends on a variety of factors that may change over time. The
Board believes that it is in the best position to make that determination in an
efficient, timely manner. Requiring shareholder approval of the decision to
reduce the Board below seven or increase it above eleven is viewed by the Board
as time consuming and inefficient.
Since the Company's public offering in 1992, it has typically had between
seven and nine directors. From time to time in the past, as a result of the
death or resignation of a Director between annual meetings of shareholders, the
Company, for limited periods, has had less than seven members of the Board of
Directors. The current Bylaw provision puts unnecessary pressure on the Board to
fill vacancies and could result in the Board filling a vacancy with an
individual who did not bring the level or type of skills or experience which the
Board believed appropriate at that time.
The current Bylaws were adopted prior to the Company's public offering in
1992 and the existing provision reflects concerns of the Company's shareholders
when it was privately held. The Board believes that the proposed Amendment to
this Bylaw provision makes it more appropriate for a publicly-traded company.
The proposed amendment to the By-Laws consists of the deletion of the
following italicized language:
ARTICLE X
AMENDMENT OF BYLAWS
Shareholders or the Board of Directors of the corporation shall have the
power at any regular or special meeting of shareholders or Board to
alter, amend, add to, rescind or repeal the By-Laws of the corporation
by the affirmative vote of a majority of the outstanding shares of stock
of the corporation entitled to vote at such meeting, or by a majority of
the Directors in office, including any vacancies, at the time of the
meeting of the Board at which such change is sought to be adopted,
provided that the Directors may not amend the By-Laws so as to affect
the qualifications, classification or term of office or number of
directors, or the rights of any class of shareholders and further,
provided that notice of such alteration, amendment, repeal or adoption
of new By-Laws be contained in the notice of such meeting.
REQUIRED VOTE
Approval of the proposed amendment to the Company's Bylaws requires a
majority vote of the outstanding shares of Common Stock. PROXIES WILL BE VOTED
"FOR" THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S BYLAWS UNLESS OTHERWISE
INDICATED ON THE PROXY.
10
<PAGE> 14
FURTHER INFORMATION
EXECUTIVE OFFICERS
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.
<TABLE>
<CAPTION>
POSITION, PRINCIPAL OCCUPATIONS AND
NAME AND AGE OTHER DIRECTORSHIPS
------------ -----------------------------------
<S> <C>
Alfred A. Pease, 54............... President and Chief Executive Officer since February 1996.
Mr. Pease's business experience is described under "Proposal
1 -- Election of Directors."
John J. Garber, 58................ Mr. Garber has been Vice President -- Finance and Chief
Financial Officer of the Company since February 1999. Prior
to that, he was, from September 1991 to February 1999, the
Chief Financial Officer of Newcor, Inc., whose principal
business is the precision machining of components for the
automotive, medium and heavy duty truck and agricultural
industries.
Harry T. Rittenour, 54............ Mr. Rittenour has been Senior Vice President -- Industrial
Businesses Segment of the Company since May 2000. Prior to
that, he was Vice President -- Quality Assurance from
January 1997 until May 2000. From 1993 to January 1997, Mr.
Rittenour was the Branch Director, Office of the Chief of
Naval Operations in Washington, D.C.
Wilfred J. Corriveau, 47.......... Mr. Corriveau has been Senior Vice President -- Automotive
Business Segment of the Company since September 2000. Prior
to that, he was, from February 1996 to September 2000, the
Director of the Global Automotive Business of Rockwell
Automation and from February 1994 to February 1996, the
Manager of Rockwell Automation's Pittsburgh operations,
whose principal business is the manufacture of automation
systems and services.
</TABLE>
SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to beneficial
ownership of the Common Stock by each person known by management of the Company
to be the beneficial owner of more than five percent 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 [8,173,001]
shares of Common Stock outstanding on October 13, 2000. The information as to
each person has been furnished by such person and, except as where
11
<PAGE> 15
otherwise indicated, each person has sole voting power and sole investment power
with respect to all shares beneficially owned by such person.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNER OF CLASS
------------------- ------------------- --------
<S> <C> <C>
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401............................ 585,700(1) 7.2
Resource Management, Inc. more commonly known as Maxus
Investment Group, Gelfand Maxus Asset Management Inc.,
Frederick D. DiSanto, Denis J. Amato, and Richard A.
Barone
1301 E. Ninth Street, Suite 3600
Cleveland, Ohio 44114..................................... 514,400(2) 6.3
Royce & Associates, Inc., Royce Management Co. and
Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019 706,900(3) 8.7
T. Rowe Price Associates, Inc., T. Rowe Price Small-Cap
Value Fund, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202................................. 651,600(4) 7.9
Wellington Management Company, LLP and Wellington Trust
Company, NA
75 State Street
Boston, Massachusetts 02109............................... 759,700(5) 9.3
</TABLE>
-------------------------
(1) Based upon their statement on Schedule 13G filed with the Securities and
Exchange Commission on February 3, 2000 and dated February 4, 2000,
Dimensional Fund Advisors Inc. has sole power to vote and dispose of 585,700
shares of Common Stock. Further, based upon its statement on Schedule 13G,
the shares of Common Stock are beneficially owned by investment companies,
trusts and accounts which are advised by Dimensional Fund Advisors Inc and
none of which own more than 5% of the shares of Common Stock. Dimensional
Fund Advisors Inc. disclaims beneficial ownership of such shares of Common
Stock.
(2) Based upon their statement on Schedule 13D dated on September 21, 1999 and
filed with the Securities and Exchange Commission on September 23, 1999,
Maxus Investment Group has sole power to vote and dispose of 69,000 shares
of Common Stock, and shared power to vote and dispose of 445,400 shares of
Common Stock with Gelfand Maxus Asset Management, Inc. and Richard A.
Barone. In addition, Frederick D. DiSanto, Denis J. Amato and Richard A.
Barone have the sole power to vote and dispose of 4,000, 4,000 and 61,000
shares of Common Stock, respectively. Further, based upon their statement on
Schedule 13D, 445,400 of the shares are beneficially owned by investment
clients of Gelfand Maxus Asset Management, Inc.
(3) Based upon their statement on Schedule 13G dated and filed with the
Securities and Exchange Commission on February 9, 2000, Royce & Associates,
Inc. ("Royce") has sole power to vote and dispose of 704,200 shares of
Common Stock and Royce Management Company ("RMC") has sole power to vote and
dispose of 2,700 shares of Common Stock. Further, based upon their statement
on Schedule 13G, Charles M. Royce may be deemed to be a controlling person
of Royce and RMC, and as such may be deemed to beneficially own the shares
of Common Stock beneficially owned by Royce and RMC.
(4) Based upon their statement on Schedule 13G filed with the Securities and
Exchange Commission on February 8, 2000 and dated February 14, 2000, T. Rowe
Price Associates, Inc. has sole power to dispose
12
<PAGE> 16
of, and T. Rowe Price Small-Cap Value Fund, Inc. has sole power to vote, 651,600
shares of Common Stock.
(5) Based upon its statement on Schedule 13G dated February 9, 2000 and filed
with the Securities and Exchange Commission on February 11, 2000, Wellington
Management Company, LLP has shared power to vote 359,700 shares and shared
power to dispose of 759,700 shares of Common Stock. Further, based upon its
statement on Schedule 13G, virtually all of Wellington Management Company's
accounts involve outside persons who have the right to receive or direct the
receipt of dividends from, or the proceeds from the sale of, securities in
such accounts with respect to the Common Stock. However, no such person's
rights relate to more than five percent of the Common Stock.
BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to beneficial
ownership of the 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 October 13, 2000, 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>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------------- ----------------------- ----------------
<S> <C> <C>
David J. Beattie(2)(3)..................................... 19,334 *
Kenneth R. Dabrowski(2)(4)................................. 26,000 *
Philip J. DeCocco(2)(5).................................... 21,334 *
W. Richard Marz(2)......................................... -- *
Robert S. Oswald (2)(6).................................... 30,834 *
Alfred A. Pease(2)(7)...................................... 238,900 .
Terryll R. Smith(2)(8)..................................... 20,834 *
John J. Garber(9).......................................... 13,629 *
Harry T. Rittenour(10)..................................... 27,450 *
Dean Massab(11)............................................ -- *
Directors and executive officers as a group
(9 persons)(3)(4)(5)(6)(7)(8)(9)(10).....................
</TABLE>
-------------------------
* Less than 1% of class
(1) To the best of the Company's knowledge, based on information reported by
such directors and officers or contained in the Company's shareholder
records. The address for Messrs. Beattie, Dabrowski, DeCocco, Marz, Oswald,
Pease, Smith, Garber, Rittenour, and Massab is 47827 Halyard Drive,
Plymouth, Michigan 48170.
(2) Serves as a member of the Board of Directors of the Company.
(3) Represents options to purchase 19,334 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(4) Includes options to purchase 15,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(5) Includes options to purchase 20,834 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(6) Includes options to purchase 20,834 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(7) Includes options to purchase 235,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
13
<PAGE> 17
(8) Represents options to purchase 20,834 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(9) Includes options to purchase 10,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(10) Includes options to purchase 27,250 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
13, 2000.
(11) Dean Massab resigned as Senior Vice President Automotive Business Segment
in March 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
Rittenour failed to file on a timely basis one report relating to his
appointment as an executive officer of the Company. 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.
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") will
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 shall 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"). Each
Eligible Director who was elected at the 1999 Annual Meeting received an Option
to purchase 10,000 shares of Common Stock in lieu of the Annual 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 (an
"Annual Option"). The Directors Plan expires on February 9, 2005. 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 Nasdaq Stock
Market Inc.'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 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. See "Proposal 2 -- Amendment to the
Directors Stock Option Plan" for a description of the proposed amendment to the
Directors Stock Option Plan.
14
<PAGE> 18
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 year June 30, 2000, six-month transition period
ended June 30, 1999 and fiscal year ended December 31, 1998 to (i) the Company's
Chief Executive Officer, (ii) the Company's executive officers at June 30, 2000
(other than the Chief Executive Officer) whose aggregate annual salary and bonus
exceeded $100,000 and (iii) former executive officers, who during portions of
the fiscal year ended June 30, 2000, were classified as executive officers for
purposes of the Commission's regulations, whose aggregate annual salary and
bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- ------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(#) COMPENSATION($)
------------------ ---- --------- -------- ------------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease........... 1997 214,000 37,878 20,821(3) 30,000 29,925(4)
President, Chief
Executive 1998 230,000 0 0 -- 6,800(5)
Officer and Chairman of 1999(2) 115,000 0 0 25,000 5,000(6)
the Board 2000 245,000 137,552 0 25,000 7,050(7)
John J. Garber............ 1999(2) 60,615 15,000(8) 0 35,000 391(6)
Vice President and Chief 2000 164,000 87,714 0 5,000 4,659(7)
Financial Officer(8)
Harry T. Rittenour........ 2000 119,521 61,304 0 20,000 2,383(7)
Senior Vice President
Industrial Businesses
Segment(9)
Dean J. Massab............ 1998 123,788 0 0 30,000 5,153(5)
Former Senior Vice 1999(2) 68,023 0 0 -- 2,825(6)
President Automotive 2000 115,974 0 0 30,000 4,090(7)
Business Segment(10)
</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) The information reported for 1999 reflects the six-month transition period
ended June 30, 1999.
(3) Includes payment of certain tax "gross up" amounts of $20,821 for certain
taxable income received by Mr. Pease in 1997 as described under "All Other
Compensation".
(4) "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.
(5) "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
15
<PAGE> 19
respect to term life insurance for the benefit of the named executives as
follows: Mr. Pease $1,800; and Mr. Massab $403.
(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 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; and
Mr. Massab $201.
(7) "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 June 30, 2000 as follows:
Mr. Pease $5,250; Mr. Garber $2,625; Mr. Rittenour $1,200 and Mr. Massab
$3,687; (ii) the dollar value of any life insurance premiums paid by the
Company in the fiscal year ended June 30, 2000 with respect to term life
insurance for the benefit of the named executives as follows: Mr. Pease
$1,800; Mr. Garber $2,034; Mr. Rittenour $1,183; and Mr. Massab $403.
(8) Mr. Garber received a signing bonus when he became Vice
President -- Finance and Chief Financial Officer in February 1999.
(9) Mr. Rittenour became Senior Vice President -- Industrial Businesses Segment
in May 2000.
(10) Mr. Massab became Vice President -- Automotive Business Unit in June 1998
and resigned as Senior Vice President -- Automotive Business Segment in
March 2000.
GRANTS OF OPTIONS
The following table sets forth certain information concerning individual
grants of stock options to each of the persons named in the Summary Compensation
Table made during the fiscal year ended June 30, 2000. All grants described in
the following table were made under the Company's 1992 Stock Option Plan and
contain the Option Acceleration Provision (as defined under "Further
Information -- Compensation of Directors and Officers -- Executive Officers --
Termination of Employment and Change of Control Arrangements").
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
-------------------------------------- STOCK PRICE
NUMBER OF PERCENT OF TOTAL APPRECIATION FOR
SECURITIES OPTIONS GRANTED TO EXERCISE OR OPTION TERM(3)
UNDERLYING OPTION EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#) FISCAL YEAR(1) ($/SH) DATE(2) 5%($) 10%($)
---- ----------------- ------------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease........... 25,000(4) 6.66 3.99 9/2/09 83,474 191,970
John J. Garber............ 5,000(5) 1.33 3.99 9/2/09 16,695 38,394
Harry T. Rittenour........ 10,000(6) 2.66 3.99 9/2/09 33,390 76,788
Harry T. Rittenour........ 10,000(7) 2.66 3.94 5/31/10 27,783 67,564
Dean J. Massab............ 30,000(8) 7.99 3.99 9/2/09 100,171 230,364
</TABLE>
-------------------------
(1) Options to purchase a total of 375,625 shares of Common Stock were granted
to team members in the fiscal year ended June 30, 2000.
(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.
16
<PAGE> 20
(4) Consists of 12,500 of nonqualified options and 12,500 of incentive stock
options. Nonqualified options become exercisable in two installments of
6,250 shares of Common Stock on September 3, 2000. The Incentive Stock
Options become exercisable in two annual installments of 6,250 shares of
Common Stock beginning on September 3, 2002.
(5) Consists of 5,000 of incentive stock options. The Incentive Options become
exercisable in four annual installments of 1,250 shares of Common Stock
beginning September 3, 2000.
(6) Consists of 5,000 of nonqualified options and 5,000 of incentive stock
options. Nonqualified options become exercisable in two annual installments
of 2,500 shares of Common Stock beginning September 3, 2000. The Incentive
Options become exercisable in two annual installments of 2,500 shares of
Common Stock beginning September 3, 2002.
(7) Consists of 2,500 of nonqualified options and 7,500 of incentive stock
options. Nonqualified options become exercisable in one annual installment
of 2,500 shares of Common Stock on June 1, 2001. The Incentive Options
become exercisable in three annual installments of 2,500 shares of Common
Stock beginning June 1, 2002.
(8) Consists of 15,000 of nonqualified options and 15,000 of incentive stock
options. Nonqualified options become exercisable in two annual installments
of 7,500 shares of Common Stock beginning September 3, 2000. The Incentive
Options become exercisable in two annual installments of 7,500 shares of
Common Stock beginning September 3, 2000. Mr. Massab resigned as Senior Vice
President -- Automotive Business Segment in March 2000 and therefore the
Nonqualified and Incentive Options were not exercised prior to their
expiration in June 2000.
EXERCISE AND VALUE OF OPTIONS
The following table sets forth certain information concerning exercises of
stock options during the fiscal year ended June 30, 2000 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, 2000 on an
aggregated basis.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
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($)(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Pease......... 0 0 221,250 58,750 0 0
John J. Garber.......... 0 0 8,750 31,250 0 0
Harry T. Rittenour...... 0 0 21,750 35,250 0 0
Dean J. Massab.......... 0 0 0 0 0 0
</TABLE>
-------------------------
(1) Represents the total gain which would have been realized if all such options
had been exercised on June 30, 2000.
(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
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 fiscal year 2001 is $260,000 and he will
receive reimbursement of reasonable monthly club dues. In addition, such
agreement
17
<PAGE> 21
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.
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 "Further Information -- 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").
18
<PAGE> 22
REPORT OF THE MANAGEMENT DEVELOPMENT,
COMPENSATION AND STOCK OPTION COMMITTEE
The Management Development, Compensation and Stock Option Committee of the
Board of Directors ("Management Development Committee") is responsible for the
planning, review and administration of the Company's executive compensation
program and the Company's stock-based executive compensation programs, including
the 1992 Stock Option Plan. During the year ended June 30, 2000, all members of
this Committee were non-employee directors of the Company.
The Company's objective is to provide a superior return to its
shareholders. To support this objective, the Company believes it must attract,
retain and motivate top quality executive talent. The Company's executive
compensation program is a critical tool in this process.
The Company's executive compensation program has been designed to link
executive compensation to Company performance through at-risk compensation
opportunities, providing significant reward to executives who contribute to the
Company's success. The Company's executive compensation program consists of base
salary, annual cash incentive opportunities and long-term incentives represented
by stock options.
The base salary, annual cash incentive opportunity, stock option and other
compensation terms of new executive officers are established based upon each
executive's qualifications, position and level of responsibility as compared
with the Company's other executives.
BASE SALARY
The Management Development Committee recognizes the importance of a
competitive compensation structure in retaining and attracting valuable senior
executives. Executive salary levels are reviewed and established annually. The
salaries received by the Company's executives generally reflect their levels of
responsibility, the profitability of the Company and other factors, such as
assessments of individual performance.
The Management Development Committee increased the base salary of Alfred A.
Pease, Chairman of the Board, President and Chief Executive Officer of the
Company by 13% effective January 1, 2000. This increase principally reflected
the fact that Mr. Pease's base salary had not been increased since January 1,
1998, the Company's financial performance in fiscal year 2000 and the Management
Development Committee's evaluation of Mr. Pease's contribution to the Company's
recent financial performance.
During fiscal year 2000, the Company promoted Harry T. Rittenour, an
officer of the Company, to the position of Vice President and ultimately Senior
Vice President. Mr. Rittenour received an aggregate 25% increase in base salary
during fiscal year 2000 as a result of these promotions and his performance
during the year. Other executive officers of the Company received increases in
base salary during fiscal year 2000 from 4% to 14% based upon a number of
factors including the Management Development Committee's evaluation of their
performance, the date of their last base salary increase and competitive offers
received by certain of these officers.
ANNUAL PROFIT SHARING
The Company's executive officers are eligible for annual cash incentive
opportunities. At the beginning of each year, the Management Development
Committee develops a profit sharing plan applicable to all executives of the
Company, including the Chief Executive Officer of the Company.
The Fiscal Year 2000 Profit Sharing Plan, which applied to all employees of
the Company, including Mr. Pease and the other executive officers, provided that
there would be a profit sharing payout only if the Company achieved earnings per
share ("EPS") of at least $0.10. For performance in excess of that level, $0.50
was added to the profit sharing pool for each additional dollar of pre-tax
earnings until an EPS of $0.20 was achieved. Thereafter, $0.75 was added to the
profit sharing pool for each additional dollar of pre-tax earnings until an EPS
of $0.25 was achieved. For EPS levels above $0.25, $0.50 was added to the profit
sharing pool for each additional dollar of pre-tax earnings of the Company.
19
<PAGE> 23
The actual profit sharing pool earned was divided among employees in
relation to their profit sharing potential for the year. Each employee's profit
sharing potential for the year is stated as a percentage of their base salary.
In fiscal year 2000, that level was 60% for Mr. Pease and 55% for the other
executive officers.
During fiscal year 2000, the profit sharing pool earned under the Fiscal
Year 2000 Profit Sharing Plan represented 99.7% of the employees' aggregate
profit sharing potential. Accordingly, Mr. Pease received a profit sharing
payment of 59.8% of his base salary level as of June 30, 1999 and the other
executive officers received profit sharing payments of 54.8% of their base
salary level as of June 30, 1999. This was the first profit sharing payout
received by these executives since the 1997 Management Bonus Program.
No discretionary bonuses were paid to Mr. Pease or the other executive
officers in fiscal year 2000.
STOCK OPTIONS
Stock option grants have historically been utilized by the Company as part
of its compensation program for all levels of team members, including the
Company's executives. The Company's stock option program permits team members to
buy a specific number of shares of Common Stock, in the future, at the fair
market value of such shares on the date the option is granted. Since stock
options gain value only if the price of the Common Stock increases above the
option exercise price, this use of stock option grants reflects the Company's
philosophy of linking compensation to performance. In addition, the Committee
believes that stock option grants to team members help to provide an incentive
for their continued employment and otherwise more closely align their interests
with those of the Company and its shareholders. The Company also utilizes stock
options as part of its standard compensation package developed to attract highly
qualified employment candidates to the Company.
Mr. Pease was granted options to purchase 25,000 shares of Common Stock
under the 1992 Stock Option Plan that were effective in fiscal year 2000. The
grant reflected the Management Development Committee's evaluation of Mr. Pease's
performance in fiscal year 1999 and the Company's improved prospects for fiscal
year 2000.
The Management Development Committee granted options to purchase shares of
Common Stock under the 1992 Stock Option Plan to certain of the executive
officers of the Company that were effective in fiscal year 2000. The Company's
executive officers each received grants of options to purchase between 5,000 and
30,000 shares of Common Stock. The grants generally reflected the Company's
improved prospects for fiscal year 2000. Grants at the higher level generally
reflected promotions of an officer to an executive officer position or the
assumption of increased responsibilities by an existing executive officer.
Certain grants were also in response to competitive offers.
Options granted to Mr. Pease and the other executive officers in fiscal
year 2000 become exercisable in four equal annual installments, beginning one
year from their date of grant, at an exercise price equal to the fair market
value of the Common Stock on the date of the grant.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Board of Directors of the Company has reviewed the provisions of the
Internal Revenue Code and related regulations of the Internal Revenue Service
which restrict deductibility of executive compensation paid to any of the five
most highly compensated executive officers at the end of the fiscal year to the
extent such compensation exceeds $1,000,000 in any year.
The Board of Directors of the Company has established certain restrictions
on the granting of options under the Company's 1992 Stock Option Plan so that
compensation realized in connection with the exercise of options granted under
such plan would be exempt from the restrictions on deductibility described
above. The 1992 Stock Option Plan restricts to 200,000 the number of shares of
Common Stock that may be subject to options granted to any salaried employee in
any fiscal year. It is important to note that while this restriction allows the
Management Development Committee continuing discretion in establishing executive
officer compensation, it does limit such discretion by restricting the size of
option awards which the Management Development Committee may grant to any single
individual. The permitted size of the option awards to a
20
<PAGE> 24
single individual was established based on the Committee's determination of the
maximum number of option shares which would be required to be granted in any
fiscal year to retain or attract a chief executive officer of the Company.
The Board of Directors does not believe that other components of the
Company's compensation program are likely to result in payments to any executive
officer in any year which would be subject to the restriction on deductibility,
and therefore concluded that no further action with respect to qualifying such
compensation for deductibility was necessary at this time. The Board of
Directors will continue to evaluate the advisability of qualifying future
executive compensation programs for deductibility under the Internal Revenue
Code.
Dated: September 30, 2000
MANAGEMENT DEVELOPMENT,
COMPENSATION AND STOCK OPTION
COMMITTEE (during fiscal year 2000)
David J. Beattie
Philip J. DeCocco
21
<PAGE> 25
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total return on the
Common Stock from June 30, 1995, through June 30, 2000 with an index consisting
of returns from a peer group of companies, consisting of Cognex Corp.,
Cyberoptics Corporation, Integral Vision, Inc. (formerly Medar, Inc.), PPT
Vision, Inc. (formerly Pattern Processing Technology) and Robotic Vision Systems
Inc. (the "Peer Group Index") and The Nasdaq Stock Market Composite Index (the
"Nasdaq Composite Index"). The returns of each company in the Peer Group Index
have been weighted according to their respective stock market capitalization.
The graph assumes that the value of the investment in the Company's Common
Stock, the Peer Group Index and the Nasdaq Composite Index was $100 on June 30,
1995 and that all dividends were reinvested.
The graph displayed below is presented in accordance with Securities and
Exchange Commission requirements. Shareholders are cautioned against drawing any
conclusions from the data contained therein, as past results are not necessarily
indicative of future performance. This graph in no way reflects the Company's
forecast of future financial performance.
[GRAPH]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99 6/30/00
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
Perceptron, Inc. 100
------------------------------------------------------------------------------------------------
Peer Group 100
------------------------------------------------------------------------------------------------
NASDAQ Composite 100
------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 26
INDEPENDENT ACCOUNTANTS
The accounting firm of PricewaterhouseCoopers, LLP has been appointed by
the Board of Directors to audit the consolidated financial statements for the
Company for the fiscal year ending June 30, 2001. Representatives of
PricewaterhouseCoopers, LLP are expected to be at the Annual Meeting and to be
available to respond to appropriate questions. Such representatives will have
the opportunity to make a statement at such meeting if they desire to do so.
PROPOSALS BY SHAREHOLDERS FOR 2001 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2001 annual meeting
which are eligible for inclusion in the Company's proxy statement for that
meeting under Rule 14a-8 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), must be received by the Secretary of the
Company at 47827 Halyard Drive, Plymouth, Michigan 48170, no later than June ,
2001. In order to curtail controversy as to the date on which a proposal was
received by the Company, it is suggested that proposals be submitted by
certified mail, return receipt requested.
Shareholder proposals intended to be presented at the 2001 annual meeting
which are not eligible for inclusion in the Company's proxy statement for that
meeting under Rule 14a-8 are considered untimely under Rule 14a-5 promulgated
under the Exchange Act unless received by the Secretary of the Company at 47827
Halyard Drive, Plymouth, Michigan 48170 no later than August , 2001.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors is not aware of
any matters to be presented for action at the Annual Meeting other than those
described above. However, if any other matters should come before the meeting,
it is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their judgment on such matters.
By order of the Board of Directors,
/s/ T.S. VAUGHN
Thomas S. Vaughn, Secretary
Plymouth, Michigan
October , 2000
23
<PAGE> 27
*PRELIMINARY COPIES (DEFINITIVE COPY INTENDED TO BE RELEASED 10/23/2000)
PERCEPTRON, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PERCEPTRON, INC.
The undersigned shareholder hereby appoints ALFRED A. PEASE, JOHN J.
GARBER and THOMAS S. VAUGHN, or any one of them, the attorney and proxies of the
undersigned, with power of substitution, to vote all the shares of common stock
of Perceptron, Inc. standing in the name of the undersigned at the close of
business on October 13, 2000 at the Annual Meeting of Shareholders of the
Company to be held on Monday, December 4, 2000 at 9:00 a.m., local time, and
at any and all adjournments thereof, with all the powers the undersigned would
possess if then and there present.
The shareholder instructs the proxies to vote as specified on this
proxy on the matters described in the Proxy Statement dated October , 2000.
Proxies will be voted as instructed.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE COMPANY'S NOMINEES AS DIRECTORS (INCLUDING THE ELECTION OF ANY PERSON TO THE
BOARD OF DIRECTORS WHERE A NOMINEE NAMED IN THE PROXY STATEMENT IS UNABLE OR,
FOR GOOD CAUSE, WILL NOT SERVE), FOR THE AMENDMENT TO THE COMPANY'S DIRECTORS
STOCK OPTION PLAN AND FOR THE AMENDMENT TO THE COMPANY'S BYLAWS.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ANY OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THE UNDERSIGNED ACKNOWLEDGES
RECEIPT OF THE PROXY STATEMENT AND NOTICE OF SAID MEETING, BOTH DATED OCTOBER
, 2000.
SEE REVERSE
SIDE
(TO BE SIGNED ON REVERSE SIDE)
<PAGE> 28
[X] Please mark your
votes as in this
example
<TABLE>
<S><C>
------------------------------------------------------------------------------------------------------------------------------------
WITHHELD
FOR from all
all nominees nominees NOMINEES FOR AGAINST ABSTAIN
1. ELECTION OF 2. APPROVAL OF AN AMENDMENT TO
DIRECTORS [ ] [ ] David J. Beattie THE DIRECTORS STOCK OPTION PLAN [ ] [ ] [ ]
Kenneth R. Dabrowski
Election of directors Philip J. DeCocco To approve an amendment to the
to hold office until W. Richard Marz Perceptron, Inc. Directors Stock
the Annual Meeting Robert S. Oswald Option Plan , as described in
of Shareholders in 2001. Alfred A. Pease the Notice of Annual Meeting of
Terryll R. Smith Shareholders and Proxy Statement
dated October , 2000.
For, except vote withheld from the following nominee(s):
-----------
-------------------------------------------------------------------
(INSTRUCTION: to withhold authority to vote for any nominee, write FOR AGAINST ABSTAIN
that nominee's name in the space provided.) 3. APPROVAL OF AN AMENDMENT TO
THE BYLAWS [ ] [ ] [ ]
To approve an amendment to the
Perceptron, Inc. Bylaws, as
described in the Notice of
Annual Meeting of Shareholders
and Proxy Statement dated
October , 2000.
Brokers executing proxies should indicate the number of
shares with respect to which authority is conferred by
this Proxy if less than all shares held as nominees are to
be voted.
Dated: , 2000 Signature Signature
--------------------------- --------------------------------- ----------------------------------
Please sign exactly as your name appears. If acting as attorney, executor, trustee or in other representative capacity, sign name
and title.
PLEASE EXECUTE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE PROMPTLY.
</TABLE>
