UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
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:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
CYBEROPTICS CORPORATION
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(Name of Registrant as Specified In Its Charter)
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1) Amount previously paid:
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CYBEROPTICS CORPORATION
5900 Golden Hills Drive
Minneapolis, MN 55416
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 18, 2001
To the Shareholders of
CYBEROPTICS CORPORATION:
The Annual Meeting of Shareholders of CyberOptics Corporation (the
"Company") will be held on Friday, May 18, 2001, at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, Minnesota 55402, at 12:00 p.m. for the following
purposes:
1) To elect eight directors; and
2) To consider such other matters as may properly come
before the meeting or any adjournments thereof.
Only holders of record of Common Stock at the close of business on
April 3, 2001, will be entitled to receive notice of and to vote at the meeting.
Shareholders who do not expect to attend the meeting in person are urged to fill
in, date, sign and promptly return the proxy in the enclosed envelope. If you
later desire to revoke your proxy, you may do so at any time before it is
exercised.
By Order of the Board of Directors
/s/ Thomas Martin
Thomas Martin
SECRETARY
Minneapolis, Minnesota
April 10, 2001
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IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY
In order that there may be a proper representation at the meeting,
you are urged, whether you own one share or many, to promptly complete,
sign and mail your proxy.
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CYBEROPTICS CORPORATION
5900 Golden Hills Drive
Minneapolis, MN 55416
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON MAY 18, 2001
The accompanying proxy is solicited on behalf of the Board of Directors
of CyberOptics Corporation (the "Company") for use at the Annual Meeting of
Shareholders to be held May 18, 2001, at 12:00 p.m. at the Marquette Hotel, 710
Marquette Avenue, Minneapolis, Minnesota 55402, and at any adjournments thereof.
The cost of solicitation, including the cost of preparing and mailing the Notice
of Annual Meeting of Shareholders and this Proxy Statement, will be paid by the
Company. Representatives of the Company may, without cost to the Company,
solicit proxies for the management of the Company by means of mail, telephone or
personal calls.
Shares of the Company's common stock, no par value (the "Common
Stock"), represented by proxies in the form solicited will be voted in the
manner directed by a shareholder. If no direction is made, the proxy will be
voted for the election of the nominees for director named in this Proxy
Statement and in the discretion of the proxies with respect to any other matters
properly brought before the meeting. Shares voted as a "withhold vote for" one
or more directors will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum at the meeting and as
unvoted, although present and entitled to vote, for purposes of the election of
the directors with respect to which the shareholder has abstained. If a broker
submits a proxy that indicates the broker does not have discretionary authority
to vote certain shares, those shares will be counted as shares that are present
and entitled to vote for purposes of determining the presence of a quorum at the
meeting, but will not be considered as present and entitled to vote with respect
to the matters voted on at the meeting.
Proxies may be revoked at any time before being exercised by delivery
to the Secretary of the Company of a written notice of termination of the
proxies' authority or a duly executed proxy bearing a later date.
Only holders of record of Common Stock at the close of business on
April 3, 2001, will be entitled to receive notice of and to vote at the meeting.
On April 3, 2001, the Company had 7,965,631 shares of Common Stock outstanding.
Each outstanding share is entitled to one vote on all matters presented at the
meeting.
So far as the management of the Company is aware, no matters other than
those described in this Proxy Statement will be acted upon at the Annual
Meeting. In the event that any other matters properly come before the Annual
Meeting calling for a vote of shareholders, the persons named as proxies in the
enclosed form of proxy will vote in accordance with their best judgment on such
other matters.
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 2000, is being furnished to each shareholder with this Proxy
Statement. This Proxy Statement is being mailed to shareholders on or about
April 10, 2001.
PROPOSAL--ELECTION OF DIRECTORS
NOMINEES
Eight persons have been nominated for election at the Annual Meeting:
Michael A. Bowes, Steven K. Case, Alex B. Cimochowski, Kathleen P. Iverson,
Erwin A. Kelen, Irene M. Qualters, Steven M. Quist and Michael M. Selzer, Jr.
Each nominee is currently a director of the Company. All nominees elected at the
Annual Meeting will serve until the next annual meeting or until their earlier
death, resignation, removal, or disqualification. The persons named in the
accompanying Proxy intend to vote the Proxies held by them in favor of the
nominees named below as directors, unless otherwise directed. The affirmative
vote of a majority of the voting shares represented at the meeting is required
for the election of each director. Should any nominee for director become
unavailable for any reason, the Proxies will be voted in accordance with the
best judgment of the persons named therein. The Board of Directors has no reason
to believe that any candidate will be unavailable.
1
The following information is furnished with respect to each nominee as
of March 31, 2001:
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE FOR PAST FIVE YEARS SINCE
------------ --------------------------------------- -----
Steven K. Case Chairman of the Company since September 1995 and January 1984
Age 52 Chairman and Chief Executive Officer of Avanti
Optics Corporation since June 2000; President of the
Company from 1984 until February 1998; adjunct
Professor of Electrical Engineering at the
University of Minnesota since 1978 and member of
University Industry Advisory Board.
Steven M. Quist Chief Executive Officer since March 2000 and June 1991
Age 55 President of the Company since February 1998;
President of Rosemount Inc. ("Rosemount"), a
subsidiary of Emerson Electric Co., and an employee
of Rosemount from 1970 until joining the Company.
Director of Rimage Corporation and Data I/O
Corporation.
Alex B. Cimochowski+ President and owner of Four Peaks Technologies, May 1984
Age 61 Inc., a printing company, since November 1996;
independent business consultant from September 1995
to November 1996; Chief Executive Officer of Delphax
Systems from November 1988 to September 1995;
President of Edgecore Technology, Inc. from
September 1983 to April 1988 and consultant thereto
from April 1988 to November 1988.
Kathleen P. Iverson+ Vice President/General Manager, Complete Point May 1998
Age 44 Solutions, of Rosemount since December 2000; Vice
President/General Manager, Worldwide Temperature, of
Rosemount from January 1996 to December 2000; Vice
President-Finance of Rosemount from 1992 to January
1996.
Erwin A. Kelen * President of Kelen Ventures since 1990; President of February 1995
Age 65 Datamyte Corporation, a subsidiary of Allen Bradley
Co., from 1984 until 1990. Director of Printronix,
Inc., Insignia Systems, Inc. and Computer Network
Technologies, Inc.
Irene M. Qualters + Vice President, Research Information Service, Merck June 1999
Age 51 & Company, Inc. since 1999; President of Cray
Research, a subsidiary of Silicon Graphics, Inc.,
and Senior Vice President of Silicon Graphics, Inc.
from 1997 to 1998; Vice President of Silicon
Graphics, Inc. from 1996 to 1997; Senior Vice
President of Cray Research from 1995 until its
acquisition by Silicon Graphics, Inc. in 1996; Vice
President-Software Division of Cray Research from
1992 to 1995.
Michael M. Selzer, Jr. * President, Chief Executive Officer and Director of June 1999
Age 48 Urologix, Inc, a medical device manufacturer, since
January 1999; Vice President and General
Manager-Neurostimulation Business of Medtronic,
Inc., a medical device manufacturer, from 1994 until
December 1998; Vice President-Components and
Research Group of Medtronic, Inc. from 1992 to 1994;
Vice President and General Manager-Micro-Rel
Division of Medtronic, Inc. from 1987 to 1992.
Director of MedAmicus, Inc.
Michael A. Bowes Chief Operating Officer of Shopcreator Developments, May 2000
Age 44 Ltd. and consultant to the Company since April 2000;
Vice President and General Manager, SMT Systems, of
CyberOptics Corporation from April 1999 to April
2000; Founder and Managing Director of Kestra Ltd.
from 1996 to 1999; Managing Director of Visionware
Ltd. from 1993 until 1995 and General Manager from
1991 until 1993.
+ Member of Audit Committee
* Member of Compensation Committee
COMPENSATION OF DIRECTORS
Directors who are not also employees receive directors' fees of $1,000
per meeting attended. Until 1999, directors who were not also employees also
received an option to purchase 18,000 shares vesting over a period of four years
upon their initial election to the Board of Directors, or upon shareholder
approval of the Stock Option Plan for Nonemployee Directors in 1993 and 1997, if
they were directors on the dates of approval. Mr. Cimochowski received options
in 1993 and 1997, Mr. Kelen received options in 1995 and 1997, and Ms. Iverson
received options in 1998 under this arrangement.
In 1999, the Stock Option Plan for Nonemployee Directors was amended to
provide for the grant to each nonemployee director of an option to purchase
4,500 shares, which are exercisable from the date of grant, at each annual
meeting at which they are elected or reelected, commencing with the annual
meeting at which previous options are fully vested. Mr. Bowes, Ms. Qualters and
Mr. Selzer received an option to purchase 4,500 shares under the amended plan in
2000.
COMMITTEES/MEETINGS
Except for its Compensation Committee and Audit Committee, the Company
does not have any standing committees, including any nominating committee, of
the Board of Directors. The Audit Committee, which consists of Ms. Iverson, Ms.
Qualters and Mr. Cimochowski, has the responsibilities set forth in the charter
attached to this proxy statement as Exhibit A. The Compensation Committee, which
consists of Mr. Kelen and Mr. Selzer, administers the Company's stock benefit
plans and determines compensation policy and levels for the Company's executive
officers. During the fiscal year ended December 31, 2000, the Board of Directors
of the Company met ten times and acted one time by writing in lieu of meeting,
the Compensation Committee met four times and acted two times by writing in lieu
of meeting and the Audit Committee met four times. Every nominee for director,
except Ms. Qualters who missed four board meetings, attended at least 75 percent
of the meetings of the Board and the Board Committees for which such nominee was
a member.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON STOCK
REPRESENTED AT THE MEETING IS REQUIRED FOR THE ELECTION OF EACH DIRECTOR. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
EXECUTIVE OFFICERS
In addition to Dr. Case and Mr. Quist, the current executive officers
of the Company include:
William J. Farmer, 51, started as Asia-Pacific Regional Sales Manager
with the Company in July 1994, was appointed Director of Product Development in
January 1996, served as Vice President-Product Development from February 1997
until May 1998, as Vice President, General Manger--OEM Sensors from May 1998 to
December 2000 and as Senior Vice President since December 2000. From November
1991 until joining the Company, Mr. Farmer was a research engineer with Sharp
Corporation in Japan.
Michael D. Wetle, 43, has been a Senior Vice President--Semiconductor
Products since December 2000 and was Vice President and General
Manager--Semiconductor Products from August 1999 to December 2000. From May 1998
to August 1999, Mr. Wetle was Vice President and General Manager of the SMT
Systems Group. Mr. Wetle was Vice President of Marketing for Danaher Controls,
an industrial controls company from 1996 until joining the Company. Prior to
that, Mr. Wetle was on the Corporate Sponsorship Program at Emerson Electric
(1988-96) where he served in various capacities including Strategic Planning,
Marketing, and General Management.
Dr. Bruce E. Batten, 50, has been Vice President and General
Manager--Electronic Assembly Sensors since December 2000. From August 1999 to
December 2000, he was Vice President--SMT Systems Global Sales and Customer
Engineering of the Company, and from August 1998 to August 1999 was Vice
President and General Manager--Industrial Measurement Group of the Company. Dr.
Batten was Vice President--Sales and Marketing with Kovex Corporation, a
developer of precision 3D surface inspection and measurement instrumentation,
from 1997 until joining the Company and served as Vice President and General
Manager--Confocal Optics Business Unit for Noran Instruments, Inc., a
Thermospectra company, from 1990 to 1997.
Scott G. Larson, 40, started as Controller with the Company in October
1995, was promoted to Director of Financial Reporting in February 2000, and was
promoted to Vice President--Finance and Chief Financial Officer in August 2000.
Mr. Larson was Controller of Medisys, Inc., a publicly traded medical device
company, from 1991 until joining the Company.
3
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT OF THE BOARD OF DIRECTORS
The Company's executive compensation policies are recommended and
administered by the Compensation Committee of the Board of Directors. The
Compensation Committee is currently composed of two independent, outside
directors.
The principal objective of the Company's compensation policy is to
increase shareholder value by providing an incentive to officers and employees
to maximize the Company's performance. The Committee annually reviews
compensation surveys for officer positions in the electronics industry to
provide a basis for comparison of the compensation levels of the Company's
management. Although the Committee has discretion to set executive compensation
at levels warranted by external, internal and individual circumstances, it has
traditionally set the salaries of executive officers at or slightly below
industry averages and provided for significant variable compensation through
stock options and cash bonuses. The form of compensation provided to members of
management varies based on their position and their ability to influence
performance.
The Company's executive officer compensation program can be separated
into several elements: base salary, annual cash incentive compensation,
long-term incentive compensation in the form of stock options, and various
benefits, including medical and retirement savings plans generally available to
employees.
BASE SALARY
The Company's policy is to set the base salaries of its executives at
or slightly below industry average. Mr. Quist's base salary during 2000 was set
by the Committee at the beginning of the fiscal year at $215,000, which the
Committee believes continues to place his salary slightly below the median of
salaries for chief executive officers in the electronics industry at similarly
sized companies. Such salary represented a $5,000 increase over Mr. Quist's base
salary for 1999.
CASH INCENTIVE COMPENSATION
The Compensation Committee establishes an executive bonus plan
annually. The bonus plan assigns to each executive, based upon the Committee's
determination of the size of bonus appropriate for the position held by the
executive, a target dollar amount bonus objective and the proportions of the
bonus objective that may be received by achievement of company financial goals,
asset management goals, and individual performance goals. The Committee creates
a matrix of multipliers for the portion of the bonus based on Company financial
performance as a function of increase in net income before interest and income
taxes ("NIBIT") and revenue. For any given increase in NIBIT and revenue, the
matrix will dictate a multiplier (which is equal to 1 at 25% growth in revenue
and 16% operating profit) that is applied to the Company financial performance
portion of base dollar amount bonus objective to determine the bonus awarded.
For executives, the Committee, with input from the executive, also assigns
specific individual performance goals and asset management goals that will
result in payment of a bonus if achieved.
Eighty percent of Mr. Quist's bonus was based on achievement of the
financial performance objectives and twenty percent upon individual performance
and asset management objectives, with a targeted bonus of $85,000. The Company
far exceeded its budgeted performance for the 2000 fiscal year, resulting in a
financial performance multiplier for all employees of 2 times their targeted
bonus. Mr. Quist received a bonus of $143,225, representing $136,000 due in
accordance with the financial performance matrix and $7,225 for achievement of
individual performance and asset management objectives.
STOCK INCENTIVE COMPENSATION
The Company provides long-term incentive to its executive officers
primarily through its Restated Stock Option Plan and its 1998 Stock Incentive
Plan (collectively, the "Option Plans"). Under the Option Plans, the
Compensation Committee may make discretionary awards of stock options to
executive officers based on the number of options and shares currently held by
the executive and also on performance factors similar to those used to determine
salaries and annual cash incentives. The Compensation Committee has not fixed,
or predetermined, the
4
amount of shares to be available for option grants in any year. The Committee
has, however, reviewed industry statistics regarding the appropriate size of the
Option Plan in terms of outstanding shares and the appropriate size of grants to
executive officers and to employees as a whole. The Company's options generally
vest over a period of four years and expire five to seven years after the date
of grant. All options are granted with an exercise price equal to fair market
value on the date of grant.
Because of the magnitude of grants he received in 1998 and 1999, Mr.
Quist did not receive options in 2000. Options granted during 2000 to other
executives were principally to replace options that had been exercised or
expired, with reference to industry statistics on the appropriate size of
outstanding stock-based incentives.
BENEFITS
The Company provides medical and retirement savings benefits to
executive officers on terms generally available to employees. No executive
officer received perquisites in excess of 10% of salary during 2000.
SUMMARY
The Compensation Committee believes that the compensation program for
executive officers during the 2000 year achieved the principal objectives for
which it was designed.
Erwin A. Kelen
Michael M. Selzer, Jr.
5
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
the last three fiscal years awarded to or earned by the President and Chief
Executive Officer of the Company and each of the four most highly compensated
executive officers of the Company who received cash compensation from the
Company during the year ended December 31, 2000 exceeding $100,000.
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ----------------------- ---------
RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) OPTIONS(#) PAYOUTS SATION(2)
----------------------- ------ ---------- ---------- -------------- ----------- ---------- --------- -----------
Steven K. Case 2000 $137,884(3) $104,400(3) $ 6,515
Chairman & Director 1999 179,230 28,800 $ 8,438(4) 60,000 9,480
1998 181,000(5) 15,000 3,446
Steven M. Quist 2000 214,134 143,225 4,922
Chief Executive Officer, 1999 208,462 32,000 37,500 2,180
President & Director 1998 172,000(6) 75,000 $195,000 150,000
William J. Farmer 2000 134,189 68,800 22,500 6,837
Senior Vice President 1999 123,446 11,900 9,633
1998 119,000(5) 6,000 2,688
Michael D. Wetle 2000 194,423 203,400 43,590(7) 2,119
Senior Vice President 1999 159,701 34,609 59,741(7) 22,500 2,348
1998 80,000(6) 6,000 57,740(7) 45,000
Bruce E. Batten 2000 139,134 48,612 4,820
Vice President 1999 130,577 24,375 7,500 4,200
1998 46,154(6) 9,000 26,250
--------------------
(1) Amounts in the column represent the dollar value of grants of
restricted stock. Mr. Quist is the only named executive officer who
has received restricted stock. Mr. Quist received a 15,000 share
restricted stock award that was 20% vested on the date of grant and
vests with respect to an additional 20% on each of the next four
anniversaries of the grant date.
(2) Consists of Company contributions for such officers to a 401K plan and
travel bonus reimbursement.
(3) From July 1, 2000 to December 31, 2000, Dr. Case devoted approximately
half his work time to the affairs of the Company.
(4) Represents payout of accrued and unused vacation time.
(5) Includes one payroll period during 1998 in excess of a full years'
payroll.
(6) Mr. Quist, Mr. Wetle and Mr. Batten each commenced employment in 1998
and the numbers therefore represent salary for a partial year.
(7) Includes in 2000, payout of accrued and unused vacation time and
forgiveness of a loan for relocation costs. Includes in 1998 and 1999,
reimbursement of cost of relocation to Minnesota and California.
6
STOCK OPTIONS
The Company maintains a Restated Stock Option Plan, a 1998 Stock
Incentive Plan and a Stock Option Plan for Nonemployee Directors. The Company
may grant stock options to executive officers and other employees and
consultants of the Company under the Restated Stock Option Plan and the 1998
Stock Incentive Plan. The following table sets forth information with respect to
options granted to the named executive officers in 2000:
OPTION GRANTS IN 2000
POTENTIAL REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR OPTION
OPTIONS GRANTED TO TERM (1)
GRANTED EMPLOYEES IN EXERCISE EXPIRATION -----------------------------
NAME (#) 2000 PRICE ($/SH) DATE 5% ($) 10% ($)
-------------------- --------- -------------- -------------- ------------ ------------ -----------
Mr. Farmer 22,500 6.86% 24.83 5/19/05 154,352 341,077
-------------------
(1) These amounts represent the realizable value of the subject options
from the date of grant until termination, without discounting to
present value, assuming appreciation in the market value of the Common
Stock from the market price on the date of grant at the rates
indicated. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock, and overall
stock market conditions. The amounts reflected in this table may not
necessarily be achieved.
The following table sets forth information with respect to options
exercised during 2000 and held by the officers named in the Summary Compensation
Table as of December 31, 2000:
AGGREGATED OPTION EXERCISES IN 2000 AND OPTION VALUES AS OF DECEMBER 31, 2000
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS AT MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 2000 (1) DECEMBER 31, 2000 (2)
ON VALUE ------------------------------- -------------------------------
NAME EXERCISE REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------- ----------- ------------ ------------ -------------- ------------- ---------------
Dr. Case 98,375 $ 3,184,988 138,625 75,000 515,197 467,850
Mr. Quist 31,565 416,796 66,310 107,625 339,941 579,265
Mr. Farmer 45,468 1,024,005 22,032 31,875 188,173 66,606
Mr. Wetle 28,125 563,514 -- 39,375 -- 233,100
Dr. Batten 3,750 59,531 5,625 24,375 41,603 187,153
-------------------
(1) All of such options are exercisable at a price equal to the fair market
value of the Common Stock on the date of grant.
(2) Represents the difference between the closing price of the Common Stock
as reported on the Nasdaq National Market ("Nasdaq") on December 31,
2000, and the exercise price of the options.
(3) Represents the difference between the option exercise price and the
closing price of the Company's Common Stock as reported by Nasdaq on
the date of exercise.
LONG-TERM INCENTIVE PLAN AWARDS/EMPLOYMENT AGREEMENTS
Other than its Restated Stock Option Plan and the 1998 Stock Incentive
Plan, the Company does not maintain any long-term incentive plans, nor does it
have any employment agreements with any of the executive officers named in the
Summary Compensation Table.
7
CERTAIN TRANSACTIONS
AVANTI OPTICS CORPORATION. On August 7, 2000, the Company entered into
an organization agreement with Avanti Optics Corporation ("Avanti"), a newly
formed entity for which Steven K. Case, the Chairman of the Company, serves as
Chairman and Chief Executive Officer and for which Erwin A. Kelen, a director of
the Company, serves as a director. Avanti was formed to pursue the development
of products for the photonics markets: markets the board of directors of the
Company determined not to currently pursue. Steven K. Case and his family
members acquired 13,500,000 shares, or approximately 65% of the outstanding
shares, of Avanti for $1,350,000 cash. Since July 2000, Dr. Case has devoted
approximately half his work time to the affairs of Avanti and half to the
Company, and his compensation from the Company has been reduced to half his
compensation prior to the formation of Avanti.
In accordance with the Organization Agreement, the Company contributed
$190,000 of cash, the right to hire certain Company employees, title to
equipment the Company had used in photonics research, a potential business
agreement with a telecommunications company for a photonics inspection system,
and a license to use certain intellectual property the Company had developed for
the electronics markets for use by Avanti in the development marketing and sale
of products for the photonics markets. In return for these contributions (valued
at a total of $380,000), the Company received 3,800,000 shares of the common
stock of Avanti (19% of the outstanding shares) and certain rights to apply
technology developed by Avanti to electronics products. The Company also agreed
to partially fund development of a photonics inspection system that Avanti was
pursuing in return for rights to the technology that was developed. The Company
provided Avanti with a total of $224,516 of funding under this arrangement in
2000, but terminated funding when the development effort was terminated. The
Organization Agreement also provides the Company with a right of first refusal
to purchase its pro rata portion of any future private sale of Avanti securities
and registration rights relating to the Avanti common stock that the Company
holds. The Company exercised its right of first refusal with respect to the sale
of an additional 200,000 shares by Avanti in September 2000, purchasing an
additional 33,250 shares. Pursuant to a related Stockholders' Agreement, the
Company has rights of first refusal and cosale rights with respect to shares of
Avanti held by Dr. Case, Mr. Kelen, and another Avanti shareholder.
The Company also entered into a facilities agreement under which Avanti
occupied office space at the Company's facilities in Minneapolis, Minnesota
until February 2001. Avanti paid the Company a total of $17,500 for use of these
facilities during 2000.
The Company believes that the agreements with Avanti are in the best
interest of the Company and its shareholders and are on terms at least as
favorable as could have been obtained from unaffiliated parties.
LOAN. In 1999, the Company advanced a total of $150,000 to Michael D.
Wetle, an officer of the Company, in connection with his relocation from
Minneapolis to San Francisco. So long as Mr. Wetle remains an employee, $30,000
of the loan is forgiven in each calendar year as compensation to Mr. Wetle.
8
SHAREHOLDER RETURN
The graph set forth below compares the cumulative total shareholder
return on the common stock of the Company from January 1, 1996 through December
31, 2000 with the cumulative total return on a broad market index (the Nasdaq
NMS Index) and a peer group index (the Nasdaq Computer and Data Processing
Index). In each case, the cumulative return is calculated assuming an investment
of $100 on January 1, 1996, and reinvestment of all dividends.
CyberOptics Corporation
Stock Performance Chart Data
[PLOT POINTS CHART]
Nasdaq Computer
and Data CyberOptics
Date Nasdaq NMS Processing Corporation
---- ---------- ---------- -----------
12/29/1995 100.00 100.00 100.00
3/29/1996 104.68 104.70 72.33
6/28/1996 113.21 116.36 38.99
9/30/1996 117.26 118.69 33.96
12/31/1996 123.04 123.40 33.69
3/31/1997 116.36 114.57 42.45
6/30/1997 137.68 146.87 39.62
9/30/1997 160.96 160.64 84.91
12/31/1997 150.69 151.68 57.23
3/31/1998 176.36 200.39 67.92
6/30/1998 181.23 221.97 36.16
9/30/1998 163.53 208.26 25.47
12/31/1998 212.51 270.59 35.21
3/31/1999 238.33 326.36 32.71
6/30/1999 260.71 339.49 40.57
9/30/1999 267.20 353.55 40.41
12/31/1999 394.94 594.50 69.18
3/31/2000 443.30 587.88 106.76
6/30/2000 385.43 480.37 174.53
9/29/2000 354.70 444.54 69.11
12/29/0000 237.68 275.05 63.91
9
SHARES OUTSTANDING
The following table sets forth information pertaining to the ownership
of the Company's Common Stock by each person known by the Company to
beneficially own 5% or more of the Company's Common Stock, by each director, by
each officer named in the Summary Compensation Table, and by all officers and
directors as a group as of March 1, 2001:
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ----------------------- --------
Leroy C. Kopp and
Kopp Investment Advisors, Inc.
7701 France Avenue South, Ste 500
Edina, MN 55435 (2) 1,705,512 21.4%
J.P. Morgan Chase & Co.
270 Park Avenue
New York, NY 10017 (3) 774,604 9.7%
Steven K. Case
5900 Golden Hills Drive
Minneapolis, MN 55416 (5) 521,857 6.4%
Michael A. Bowes 4,500 *
Alex B. Cimochowski (6) 35,056 *
Kathleen P. Iverson 4,905 *
Erwin A. Kelen 90,500 1.1%
Irene M. Qualters 9,000 *
Steven M. Quist (7) 135,709 1.7%
Michael M. Selzer 9,450 *
Bruce E. Batten 5,625 *
William J. Farmer 42,395 *
Michael D. Wetle -- *
All executive officers and
directors as a group (13 persons) 866,188 10.3%
-------------------
*Less than 1%
(1) Includes 153,625 shares for Dr. Case, 4,500 shares for Mr. Bowes,
31,500 shares for Mr. Cimochowski, 4,500 shares for Ms. Iverson, 76,500
shares for Mr. Kelen, 9,000 shares for Ms. Qualters, 113,185 shares for
Mr. Quist, 9,000 shares for Mr. Selzer, 5,625 shares for Dr. Batten,
31,407 shares for Mr. Farmer and 440,342 shares for all officers and
directors as a group, purchasable upon exercise of options exercisable
within 60 days of March 1, 2001.
(2) Based on Schedule 13D/A filed August 22, 2000. Includes 129,000 held by
Leroy Kopp or family foundations or trusts he controls, 489,250 shares
over which Kopp Investment Advisers, Inc. ("KIA") has sole voting
power, 270,000 shares over which KIA has sole power of disposition and
1,290,212 shares over which KIA has shared power of disposition.
(3) Based on Schedule 13G/A filed February 12, 2001. Includes 770,804
shares over which the holder has sole voting power.
(4) Based on Schedule 13G filed February 2, 2001. All shares held with sole
voting and sole power of disposition.
(5) Includes 15,000 shares in trust for family members for which the holder
is a trustee.
(6) Includes 2,475 shares owned by Mr. Cimochowski's spouse, the beneficial
ownership of which Mr. Cimochowski disclaims.
(7) Includes 2,000 shares subject to a restricted stock agreement.
10
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Company's directors and officers,
and any beneficial owner of more than 10% of a class of equity securities of the
Company, are required to report their ownership of the Company's equity
securities and any changes in such ownership to the Securities and Exchange
Commission (the "Commission") and the securities exchange on which the equity
securities are registered. Specific due dates for these reports have been
established by the Commission, and the Company is required to disclose in this
Proxy Statement any delinquent filing of such reports and any failure to file
such reports during the fiscal year ended December 31, 2000.
During 1999, Ms. Iverson reported late a purchase of 5 shares by a
minor son. Based upon information provided by officers and directors of the
Company, all other officers, directors and 10% shareholders otherwise filed all
reports on a timely basis in the 2000 fiscal year.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Company's Board of Directors is composed of
the following nonemployee directors: Kathleen P. Iverson, Irene M. Qualters and
Alex B. Cimochowski. All of the members of the Audit Committee are independent
for purposes of the Nasdaq listing requirements. The Audit Committee operates
under a written charter adopted by the Board of Directors, a copy of which is
attached to this Proxy Statement as Exhibit A. The Audit Committee recommends to
the Board of Directors the appointment of the Company's independent accountants.
Management is responsible for the Company's internal controls and the
financial reporting process. The Company's independent accountants are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and to issue a report on the Company's financial statements. The Audit
Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
management and the independent accountants. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Audit
Committee has reviewed and discussed the consolidated financial statements with
management and the independent accountants. The Audit Committee discussed with
the independent accountants matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committees).
The Company's independent accountants also provided to the Audit
Committee the written disclosure required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent accountants the accounting firm's
independence. The Committee also considered whether non-audit services provided
by the independent accountants during the last fiscal year were compatible with
maintaining the independent accountants' independence.
Based upon the Audit Committee's discussion with management and the
independent accountants and the Audit Committee's review of the representation
of management and the report of the independent accountants to the Audit
Committee, the Audit Committee recommended to the Board of Directors that the
audited consolidated financial statements be included in the Company's Annual
report on Form 10-K for the fiscal year ended December 31, 2000 filed with the
Securities and Exchange Commission.
Members of the Audit Committee
Kathleen P. Iverson
Irene M. Qualters
Alex B. Cimochowski
11
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company has selected PricewaterhouseCoopers LLP as its independent
accountants for its fiscal year ending December 31, 2001. Representatives of
PricewaterhouseCoopers LLP, the successor to Coopers & Lybrand L.L.P. and which
together have served as the Company's independent accountants since July 1994,
are expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions from shareholders.
AUDIT FEES
Audit fees billed or expected to be billed to the Company by
PricewaterhouseCoopers LLP for the audit of the Company's financial statements
for the fiscal year ended December 31, 2000 and for reviews of the Company's
financial statements included in the Company's quarterly reports on Form 10-Q
for the last fiscal year totaled $74,808.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not provide services to the Company
during the last fiscal year for the design and implementation of financial
information systems and the Company paid no fees for such services.
ALL OTHER FEES
Fees billed or expected to be billed to the Company by
PricewaterhouseCoopers LLP for all other non-audit services, including
tax-related services, provided during the last fiscal year totaled $113,092.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE NEXT ANNUAL MEETING
Any shareholder wishing to include a proposal in the Company's proxy
solicitation materials for its next annual meeting of shareholders must submit
such proposal for consideration in writing to the Secretary of the Company at
its principal executive offices, 5900 Golden Hills Drive, Minneapolis, MN 55416,
no later than December 7, 2001.
Pursuant to the Company's Bylaws, in order for business to be properly
brought before the next annual meeting by a shareholder, or in order for a
nominee for director to be considered at such annual meeting, the shareholder
must give written notice of such shareholder's intent to bring a matter before
the annual meeting, or nominate the director, no later than December 7, 2001.
Each such notice must set forth certain information with respect to the
shareholder who intends to bring such matter before the meeting and the business
desired to be conducted, as set forth in greater detail in the Company's Bylaws.
Management will use discretionary authority to vote against any
shareholder proposal, or director nominee not made by management, presented at
the next annual meeting if: (i) such proposal or nominee has been properly
omitted from the Company's proxy materials under federal securities laws; (ii)
notice of such proposal or nominee was not submitted to the Secretary of the
Company at the address listed above by December 7, 2001; or (iii) the proponent
has not solicited proxies in compliance with federal securities laws from the
holders of at least the percentage of the Company's voting shares required to
carry the proposal or elect the nominee.
12
GENERAL
The Board of Directors of the Company does not know of any matters
other than those described in this Proxy Statement that will be acted upon at
the Annual Meeting. In the event that any other matters properly come before the
meeting calling for a vote of shareholders, the persons named as proxies in the
enclosed form of proxy will vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF
DIRECTORS
Thomas Martin
SECRETARY
Dated: April 10, 2001
13
EXHIBIT A
CYBEROPTICS CORPORATION
AUDIT COMMITTEE CHARTER
MAY 19, 2000
The Audit Committee (the "Committee") is a committee of the Board of
Directors (the "Board") of CyberOptics Corporation (the "Company") designed to
assist the Board in monitoring (1) the integrity of the financial statements of
the Company, (2) the adequacy of the Company's internal controls, and (3) the
independence and performance of the Company's Independent Accountants.
I. ROLES AND RESPONSIBILITIES
A. MAINTENANCE OF CHARTER. The Committee shall review and reassess the
adequacy of this formal written charter on at least an annual basis.
B. FINANCIAL REPORTING. The Committee shall review and make
recommendations to the Board regarding the adequacy of the Company's
financial statements and compliance of such statements with financial
standards. In particular, and without limiting such responsibilities,
the Committee shall:
WITH RESPECT TO THE ANNUAL FINANCIAL STATEMENTS:
* Review and discuss the Company's audited financial statements with
management and with the Company's Independent Accountants prior to
their public release.
* Review an analysis prepared by management and the Independent
Accountant of significant financial reporting issues and judgments
made in connection with the preparation of the Company's audited
financial statements.
* Discuss with the Independent Accountant the matters required to be
discussed by Statement on Auditing Standards No. 61 (as may be
modified or supplemented) relating to the conduct of the audit.
* Based on the foregoing, indicate to the Board whether the Committee
recommends that the audited financial statements be included in the
Company's Annual Report on Form 10-K.
* Review and approve the report required by the rules of the Securities
and Exchange Commission to be included in the Company's annual proxy
statement.
WITH RESPECT TO QUARTERLY FINANCIAL STATEMENTS:
* Review with management and the Independent Accountants the Company's
quarterly financial statements prior to their public release and the
filing of its Form 10-Q. The review may be conducted through the chair
person of the Committee or other member (s) of the committee
designated by the chair person.
C. INTERNAL CONTROLS. The Committee shall evaluate and report to the
Board regarding the adequacy of the Company's financial controls. In
particular, the Committee shall:
* Evaluate whether management sets the appropriate tone concerning
controls and safeguarding of company assets.
* Ensure that the Independent Accountants are aware that the Committee
is to be informed of all control problems identified.
* Review with the Company's Sr. Attorney legal matters that may have a
material impact on the financial statements.
14
* Review the effectiveness of systems for monitoring compliance with
laws and regulations relating to financial reporting, including any
issues that might implicate Section 10A of the Securities Exchange Act
of 1934.
* Receive periodic updates from management, legal counsel, and the
Independent Accountants concerning financial compliance
D. RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS. The Committee shall:
* Interview, evaluate, and make recommendations to the Board with
respect to the retention of, or replacement of, Independent
Accountants.
* Ensure receipt from Independent Accountants of a formal written
statement delineating all relationships between the Independent
Accountant and the Company, consistent with Independence Standards
Board Standard I.
* Actively engage in a dialog with the Independent Accountants with
respect to any disclosed relationships or services that may impact the
objectivity and independence of the Independent Accountants.
* Take, or recommend that the Board take, appropriate action to oversee
the independence of the Independent Accountants.
Notwithstanding the foregoing, the Independent Accountants shall be
ultimately accountable to the Board and the Committee, as representatives
of shareholders, and the Board, upon recommendation from the Committee,
shall have ultimate authority and responsibility to select, evaluate, and,
where appropriate, replace the Independent Accountant (or to nominate the
Independent Accountant to be proposed for shareholder approval in any proxy
statement).
II. MEMBERSHIP REQUIREMENTS
* The Committee shall consist of at least three directors chosen by the
Board.
* Each member of the Committee shall be able to read and understand
fundamental financial statements, including the Company's balance sheet,
income statement, and cash flow statement or will become able to do so
within a reasonable period of time after his or her appointment to the
Committee.
* At least one member of the Committee shall have past employment experience
in finance or accounting, requisite professional certification in
accounting, or comparable experience or background (such as a position as a
chief executive officer, chief financial officer or other senior officer
with financial oversight responsibilities) which results in financial
sophistication, recognized financial or accounting expertise.
* All Committee members shall be independent directors as defined in Rule
4200(a)(15) of the NASDAQ.
III. STRUCTURE
* The Committee shall appoint one of its members to act as a Chairperson,
either generally or with respect to each meeting.
* The Committee Chairperson shall review and approve an agenda in advance of
each meeting
* The Committee shall meet at least twice annually, or more frequently as
circumstances dictate.
* The Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee.
* The Committee may request any officer or employee of the Company or the
Company's outside counsel or Independent Accountant to attend a meeting of
the Committee or to meet with any members of, or consultants to, the
Committee.
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the Independent Accountant. Nor is
it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the Independent Accountant or to
assure compliance with laws and regulations and the Company's Corporate
Policies.
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[LOGO]
CYBEROPTICS
"MAKING LIGHT WORK FOR INDUSTRY!"
CYBEROPTICS CORPORATION
2001 ANNUAL SHAREHOLDERS MEETING
MAY 18, 2001
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[LOGO]
CYBEROPTICS
"MAKING LIGHT WORK FOR INDUSTRY!" PROXY
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Steven K. Case and Steven M. Quist, and each of
them, with power to appoint a substitute, to vote all shares the undersigned is
entitled to vote at the Annual Meeting of Shareholders of CyberOptics
Corporation, to be held on May 18, 2001, and any adjournments thereof, as
specified below on the matters referred to, and, in their discretion, upon any
other matters wich may be brought before the meeting:
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
(CONTINUED ON REVERSE SIDE)
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of 01 Steven K. Case 05 Kathleen P. Iverson
directors: 02 Steven M. Quist 06 Erwin A. Kelen
03 Michael A. Bowes 07 Irene M. Qualters
04 Alex B. Cimochowski 08 Michael M. Selzer, Jr.
[ ] Vote FOR [ ] WITHHOLD
all nominees AUTHORITY
(except as to vote for
marked) all nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE ____________________________
FOR A SPECIFIC NOMINEE, WRITE THE NUMBER(S) OF | |
THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) |____________________________|
2. To vote with discretionary authority on any other matter that may properly
come before the meeting
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL OF THE DIRECTORS NAMED IN PROPOSAL 1.
Address Change? Mark Box [ ] Date ___________________________________
Indicate changes below:
______________________________________________
| |
| |
|______________________________________________|
Signature(s) in Box
When shares are held by joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such. If a corporation please sign
in full corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized person.