SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
|_| Preliminary Proxy Statement
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|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Cognex Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement,)
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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pursuant to Exchange Act Rule 0-11:
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4. Proposed maximum aggregate value transaction:
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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 number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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Set forth the amount on which the filing fee is calculated and state how
it was determined.
COGNEX CORPORATION
NOTICE OF SPECIAL MEETING IN LIEU OF
THE 2001 ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 2001
To the Stockholders:
A Special Meeting of the Stockholders of COGNEX CORPORATION in lieu of the
2001 Annual Meeting will be held on Thursday, April 26, 2001, at 10:00 a.m. at
the offices of Hutchins, Wheeler & Dittmar, A Professional Corporation, Suite
3101, 101 Federal Street, Boston, Massachusetts, for the following purposes:
1. To expand the Board of Directors to six members and to elect three
Directors, two to serve for terms of three years, and one to serve for
a term of one year, all as more fully described in the accompanying
Proxy Statement.
2. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on March 9, 2001, as
the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
Anthony J. Medaglia, Jr., CLERK
Natick, Massachusetts
March 23, 2001
COGNEX CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cognex Corporation (the Corporation") for
use at the Special Meeting of Stockholders in Lieu of the 2001 Annual Meeting to
be held on Thursday, April 26, 2001, at the time and place set forth in the
notice of the meeting, and at any adjournments thereof. The approximate date on
which this Proxy Statement and form of proxy are first being sent to
stockholders is March 23, 2001.
If the enclosed proxy is properly executed and returned, it will be voted
in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Clerk of the Corporation at any time before the proxy is
exercised.
The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for
transaction of business. The election of a nominee for Director will be decided
by plurality vote. Both abstentions and broker non-votes" are counted as present
for the purposes of determining the existence of a quorum for the transaction of
business. However, for purposes of determining the number of shares voting on a
particular proposal, abstentions and broker non-votes" are not counted as votes
cast or shares voting.
The Corporation will bear the cost of the solicitation. It is expected that
the solicitation will be made primarily by mail, but regular employees or
representatives of the Corporation (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
telegraph and in person and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to their principals
at the expense of the Corporation.
The Corporation's principal executive offices are located at One Vision
Drive, Natick, Massachusetts 01760, telephone number (508) 650-3000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on March 9, 2001, are
entitled to notice of and to vote at the meeting. On that date the Corporation
had outstanding and entitled to vote 43,477,675 shares of Common Stock, par
value $.002 per share. Each outstanding share of the Corporation's Common Stock
entitles the record holder to one vote.
ELECTION OF DIRECTORS
Pursuant to Massachusetts law, the Board of Directors is divided into three
classes, with each class as nearly equal in number as possible. One class is
elected each year for a term of three years. It is proposed that Robert J.
Shillman and Anthony Sun, whose terms expire at this meeting, be elected to
serve terms of three years and that Patrick Alias be elected to serve a term of
one year, and in each case until their successors are duly elected and qualified
or until they sooner die, resign or are removed. The Board of Directors is being
expanded from five to six members.
The persons named in the accompanying proxy will vote, unless authority is
withheld, to expand the Board of Directors to six members and to elect the
nominees named below. If such nominees should become unavailable for election,
which is not anticipated, the persons named in the accompanying proxy will vote
for such substitutes as the Board of Directors may recommend. Should management
not recommend a substitute for any nominee, the proxy will be voted for the
election of the remaining nominees. The nominees are not related to the other or
to any Executive Officer of the Corporation or its subsidiaries.
YEAR FIRST
ELECTED A POSITION WITH THE CORPORATION OR PRINCIPAL
NAME OF NOMINEE AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
- --------------- --- -------- -------------------------------------
NOMINATED FOR A TERM ENDING
IN 2004:
Robert J. Shillman ................... 54 1981 Since 1981, President, Chief Executive Officer and Chairman of the Board
of the Corporation.
Anthony Sun .......................... 48 1982 Since 1979, general partner of Venrock Associates, a venture
capital partnership. Mr. Sun also serves as a Director of Komag,
Inc., Phoenix Technologies Ltd., and several private companies.
NOMINATED FOR A TERM ENDING
IN 2002:
Patrick Alias ........................ 55 Since 1991, Executive Vice President of the Corporation.
SERVING A TERM ENDING
IN 2003:
Jerald Fishman ....................... 55 1998 Since 1971, held various management positions at, and since 1997,
President and Chief Executive Officer of Analog Devices, Inc. Mr.
Fishman also serves as a member of the Board of Directors of Analog
Devices, Inc. and Xilinx, Inc.
Reuben Wasserman ..................... 71 1990 Since 1985, an independent consultant serving high tech corporations,
venture capital firms, and served on numerous Boards. Prior to 1985
was Vice President of Strategic Planning for Gould, Inc. Also, a
director of AMR, Inc., and Business Advisor to Andover Controls
Corporation.
SERVING A TERM ENDING
IN 2002:
William Krivsky ...................... 71 1985 Since 1994, Principal of Kellogg, Krivsky & Buttler, Inc. From 1986 to
1994, Executive Vice President of Bird Corporation, a manufacturer and
distributor of building materials and products and a provider of
environmental services. Previously, he had served as CEO of Velcro
Industries, N.V. Mr. Krivsky also serves as a Director of Hitchiner
Manufacturing.
2
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 2000, there were five meetings of the Board of Directors of
the Corporation. All of the Directors attended at least 75% of the aggregate of
(i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings held by committees of the Board of Directors on which they
served. The Board of Directors does not have a nominating committee. Each
non-employee Director received compensation in the amount of $7,000 for the
fiscal year plus an additional $1,750 for each meeting attended. Each
non-employee Director who served on a committee of the Board of Directors in
2000 received an annual fee of $2,000 per committee on which he served. In
addition to such fees, the Corporation paid each Director an additional $5,000
in 2000.
The Board of Directors has a Compensation/Stock Option Committee whose
members are Jerald Fishman and Anthony Sun, Chairman. The Compensation/Stock
Option Committee determines the compensation to be paid to key officers of the
Corporation and administers the Corporation's Stock Option Plans. The
Compensation/Stock Option Committee met on a total of five occasions in 2000.
The Corporation also has an Audit Committee whose present members are
Reuben Wasserman, Jerald Fishman, and William Krivsky, Chairman. The Audit
Committee reviews with the Corporation's independent auditors the scope of the
audit for the year, the results of the audit when completed and the independent
auditor's fee for services performed. The Audit Committee also recommends
independent auditors to the Board of Directors and reviews with management
various matters related to its internal accounting controls. During fiscal 2000
there were two meetings of the Audit Committee.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table shows as of February 23, 2001, any person who is known
by the Corporation to be the beneficial owner of more than five percent of any
class of voting securities of the Corporation. For purposes of this Proxy
Statement, beneficial ownership is defined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934 and means generally the power to vote or
dispose of the securities, regardless of any economic interest therein.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------ --------- --------
Robert J. Shillman 6,129,674(1) 14.10%
Cognex Corporation
One Vision Drive
Natick, MA 01760
T. Rowe Price Associates, Inc. 5,589,325(2) 12.80 %
100 E. Pratt Street
Baltimore, MD 21202
J & W Seligman & Co., Inc. 3,731,420(2) 8.60 %
100 Park Avenue
New York, NY 10017
Wellington Management Company, LLP 2,853,300(2) 6.58%
75 State Street
Boston, MA 02109
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(1) Includes 700 shares held by Mr. Shillman's wife, and 4,500 shares held by
Mr. Shillman's children. Mr. Shillman disclaims beneficial ownership of
such shares. Includes also 253,400 shares which Mr. Shillman has the right
to acquire upon the exercise of outstanding options exercisable currently
or within 60 days.
(2) According to Schedule 13G filed with the Securities and Exchange Commission
(the Commission") reporting information as of December 31, 2000.
3
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following information is furnished as of February 23, 2001, with
respect to Common Stock of the Corporation beneficially owned within the meaning
of Rule 13d-3 by all Directors of the Corporation and nominees, and by all
Directors and Executive Officers of the Corporation as a group. Unless otherwise
indicated, the individuals named held sole voting and investment power over the
shares listed below.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP OF CLASS
- ---- --------- --------
Robert J. Shillman ................................................................ 6,129,674(1)(2) 14.10%
Anthony Sun ...................................................................... 228,288(1) *
Patrick Alias ..................................................................... 116,329(1) *
Jerald Fishman ................................................................... 21,000(1) *
Richard Morin .................................................................... 16,601(1) *
Reuben Wasserman .................................................................. 16,500(1) *
William Krivsky .................................................................. 13,465(1) *
All Directors and Executive Officers as a group (7 persons) ...................... 6,541,857(1)(3)
- ---------------
* Less than 1%
(1) Includes the following shares which the specified individual has the right
to acquire upon the exercise of outstanding options, exercisable currently
or within 60 days: Mr. Shillman, 253,400 shares; Mr. Sun, 86,000 shares;
Mr. Alias, 112,400 shares; Mr. Fishman, 21,000 shares; Mr. Morin, 16,250;
Mr. Wasserman, 16,500 shares; and Mr. Krivsky, 10,000 shares.
(2) See Footnote (1) under Principal Holders of Voting Securities".
(3) Includes 515,550 shares which certain Directors and Executive Officers have
the right to acquire upon the exercise of outstanding options, exercisable
presently or within 60 days.
THE MATERIAL IN THE FOLLOWING REPORT AND THE PERFORMANCE GRAPH ON PAGE 6
ARE NOT SOLICITING MATERIAL," ARE NOT DEEMED FILED WITH THE COMMISSION AND ARE
NOT TO BE INCORPORATED BY REFERENCE IN ANY FILING OF THE CORPORATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, WHETHER MADE BEFORE OR AFTER THE DATE HEREOF AND IRRESPECTIVE OF ANY
GENERAL INCORPORATION LANGUAGE IN ANY SUCH FILING.
COMPENSATION/STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Corporation's executive compensation program is administered by the
Compensation/Stock Option Committee (the Committee"), which determines executive
officer compensation annually. The Committee is composed of independent
directors who are not employees of the Corporation and its determinations with
respect to compensation for a fiscal year are made at the beginning of the
fiscal year.
In its deliberations, the Committee considers (i) the levels of
responsibility associated with each executive's position, (ii) the past
performance of the individual executive, (iii) the extent to which any
individual, departmental or Corporation-wide goals have been met, (iv) the
overall competitive environment and the level of compensation necessary to
attract and retain talented and motivated individuals in key positions, and (v)
the recommendations of appropriate officers of the Corporation.
The Corporation's compensation program utilizes a combination of base
salaries, annual bonuses and stock option awards.
4
In determining the base salaries paid to the Corporation's executive
officers for the year ended December 31, 2000, the Committee considered, in
particular, their levels of responsibility, salary increases awarded in the
past, and the executive's experience and potential.
The Committee views annual bonuses as a vehicle for rewarding executives
for meeting performance objectives. The Committee establishes individual and
corporate performance targets each year. Executive officers are eligible to
receive annual cash bonuses upon achievement of such pre-determined performance
targets. The annual bonuses for the fiscal year ended December 31, 2000 reflect
the achievement of predetermined targets related to the Corporation's operating
income, other company metrics and individual goals.
The Corporation's stock option program is intended to reward the
participating executives for their efforts in building shareholder value and
improving corporate performance over the long term. The stock option program
also promotes the retention of talented executives. In determining the number of
options granted to executive officers, the Committee takes into consideration
options granted to such executives in previous years and the potential value
which may be realized upon exercise of the options as a result of appreciation
of the Corporation's stock during the option term.
The Internal Revenue Code limits the deduction a public company is
permitted for compensation paid to the chief executive officer and to the four
most highly compensated executive officers, other than the chief executive
officer. Generally, amounts paid in excess of $1 million to a covered executive,
other than performance-based compensation, cannot be deducted. In order to
qualify as performance-based compensation under the tax law, certain
requirements must be met, including approval of the performance measures by the
stockholders. In its deliberations, the Committee considers ways to maximize
deductibility of executive compensation, while retaining the discretion the
Committee considers appropriate to compensate executive officers at levels
commensurate with their responsibilities and achievements.
COMPENSATION OF ROBERT J. SHILLMAN, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND CHAIRMAN
The Committee established the compensation of Robert J. Shillman, the
President, Chief Executive Officer and Chairman of the Board of Directors of the
Corporation for the fiscal year ended December 31, 2000, using the same criteria
that were used to determine the compensation of other executive officers as
described above. In establishing Mr. Shillman's compensation for the fiscal year
ended December 31, 2000, the Committee considered his level of responsibility,
salary increases awarded in the past, and the significant role that Mr. Shillman
has played in setting the strategic direction of the Corporation. Mr. Shillman's
base compensation was increased approximately 2.9% in general recognition of his
level of responsibility and his individual efforts for the benefit of the
Corporation. Mr. Shillman's annual bonus of $558,000, for the fiscal year ended
December 31, 2000, was based upon the achievement by the Corporation of
pre-determined targets with respect to operating income and is intended to
reward Mr. Shillman for his role in the achievement of that objective. Mr.
Shillman was also granted options for the purchase of 60,000 shares at $18.125
per share. It should be noted that the Corporation's operating income for the
year ended December 31, 2000 increased 152% over operating income for the year
ended December 31, 1999.
The foregoing report has been approved by all members of the Committee.
COMPENSATION/STOCK OPTION
COMMITTEE
ANTHONY SUN, CHAIRMAN
JERALD FISHMAN
5
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
COGNEX CORPORATION
$
[PERFORMANCE GRAPH]
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LEGEND
Symbol CRSP Total Returns Index for: 12/1995 12/1996 12/1997 12/1998 12/1999 12/2000
- ------ ----------------------------- ------- ------- ------- ------- ------- -------
Cognex Corporation 100.0 53.2 78.4 57.6 112.2 63.7
Nasdaq Stock Market (US Companies) 100.0 123.0 150.7 212.5 394.9 237.6
Nasdaq Computer and Data Processing Stocks 100.0 123.4 151.6 270.5 594.4 274.9
SIC 7370 - 7379 US & Foreign
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/29/1995.
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6
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Messrs. Fishman and Sun served as members of the Compensation/Stock Option
Committee during fiscal 2000. On June 30, 2000, the Corporation became a
Limited Partner in Venrock Associates III, L.P., a venture capital fund. The
Company has invested $4,375,000 in the partnership as of December 31, 2000 and
has committed to a total investment of up to $25,000,000 over a ten-year period.
Mr. Sun is affiliated with Venrock Associates III, L.P.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Corporation's Chief Executive Officer and each of the named
executive officers whose total annual salary and bonus exceeded $100,000 for all
services rendered in all capacities to the Corporation and its subsidiaries for
the Corporation's three fiscal years ended December 31, 2000.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION STOCK OPTIONS ALL OTHER
--------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) (SHARES) COMPENSATION(2)
- ------------------------- ----- --------- --------- ---------- --------------
Robert J. Shillman ..................... 2000 $309,998 $558,000 60,000 $ 690
President & CEO 1999 301,142 504,000 97,400 1,151
1998 300,404 0 196,000 1,391
Patrick Alias ....................... 2000 233,000 291,250 40,000 944
World Wide Sales & 1999 214,823 247,250 15,200 1,151
Marketing, Executive 1998 214,715 0 162,000 1,440
Vice President
Richard Morin ......................... 2000 163,000 122,500 17,000 690
Chief Financial Officer, 1999 135,000 81,400 102,000 721
Vice President, and
Treasurer
Glenn Wienkoop(3) ..................... 2000 101,574 0 0 265
MVSD Executive Vice 1999 277,869 310,500 0 1,151
President & Chief 1998 277,548 0 294,800 1,440
Operating Officer
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(1) Salary and bonus amounts are presented in the year earned. The payment of
such amounts may have occurred in other years.
(2) Amounts included are for insurance premiums paid by the Corporation for the
benefit of the named executive officer.
(3) Mr. Wienkoop resigned effective May 12, 2000.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 2000 to
the named executive officers. Pursuant to applicable regulations of the
Commission, the following table also sets forth the hypothetical value which
might be realized with respect to such options based on assumed rates of stock
appreciation of 5% and 10% compounded annually from date of grant to the end of
the option terms.
INDIVIDUAL GRANTS
----------------------
PERCENTAGE
OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO EXERCISE ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES OR BASE PRICE APPRECIATION FOR
OPTIONS IN FISCAL PRICE EXPIRATION OPTION TERM(1)
----------------------
NAME GRANTED 2000 (PER SHARE) DATE 5% 10%
- ----- ---------- ---------- ----------- --------- --------- ----------
Robert J. Shillman 60,000(2) 1.98% $18.125 12/21/15 1,173,334 3,455,257
President & CEO
Patrick Alias 40,000(3) 1.32% $18.125 12/21/15 782,223 2,303,505
World Wide Sales &
Marketing, Executive
Vice President
Richard Morin 17,000(4) .56% $18.125 12/21/15 332,445 978,990
Chief Financial Officer,
Vice President, and
Treasurer
- ------------------
(1) These values are based on assumed rates of appreciation only. Actual gains,
if any, on shares acquired on option exercises are dependent on the future
performance of the Corporation's Common Stock. There can be no assurance
that the values reflected in this table will be achieved.
(2) Options have a fifteen year term and vest 100% on April 27, 2005.
(3) Options have a fifteen year term and vest 100% on January 1, 2003.
(4) Options have a fifteen year term and vest at the rate of 50% per year over a
two year period commencing April 27, 2005.
8
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND 12/31/00 OPTION VALUES
The following table provides information on option exercises and on the
value of the named executive officers' unexercised options at December 31, 2000.
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT 12/31/00 OPTIONS AT 12/31/00(1)
-------------------------- -------------------------
NAME ON EXERCISE REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------ ---------- ---------- ---------- ------------ ---------- ------------
Robert J. Shillman ............. 200,000 $9,055,625 118,400 375,000 $1,085,462 $2,453,693
President & CEO
Patrick Alias .................. 112,400 4,464,826 82,400 262,400 1,185,112 2,144,056
World Wide Sales &
Marketing, Executive
Vice President
Richard Morin ................... 5,000 167,810 3,500 110,500 0 68,085
Chief Financial Officer,
Vice President and
Treasurer
Glenn Wienkoop .................. 38,960 1,406,787 0 0 0 0
MVSD Executive Vice
President & Chief
Operating Officer
- ---------------
(1) Value of unexercised stock options represents difference between the
exercise prices of the stock options and the closing price of the
Corporation's Common Stock on NASDAQ National Market System on December 29,
2000.
(2) Value realized on exercise represents difference between the exercise prices
of the stock options and the trading price of the Corporation's Common Stock
on NASDAQ National Market System on the date of exercise.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as
independent auditors to examine the consolidated financial statements of the
Corporation and its subsidiaries for the fiscal year ended December 31, 2001.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the meeting and will have the opportunity to make a statement if he or she so
desires and to respond to appropriate questions. The engagement of
PricewaterhouseCoopers LLP was approved by the Board of Directors at the
recommendation of the Audit Committee of the Board of Directors.
9
REPORT OF THE AUDIT COMMITTEE(1)
The following is the report of the Audit Committee with respect to the
Corporation's audited financial statements for the fiscal year ended December
31, 2000.
The Audit Committee has reviewed and discussed the Corporation's audited
financial statements with management. The Audit Committee has discussed with
PricewaterhouseCoopers, LLP, the Corporation's independent accountants, the
matters required to be discussed by Statement of Auditing Standards No. 61,
COMMUNICATION WITH AUDIT COMMITTEES which provides that certain matters related
to the conduct of the audit of the Corporation's financial statements are to be
communicated to the Audit Committee. The Audit Committee has also received the
written disclosures and the letter from PricewaterhouseCoopers LLP required by
Independence Standards Board Standard No. 1 relating to the accountant's
independence from the Corporation, has discussed with PricewaterhouseCoopers LLP
their independence from the Corporation, and has considered the compatibility of
non-audit services with the accountant's independence.
The Audit Committee acts pursuant to the Audit Committee Charter, a copy of
which is attached as Appendix A" to this Proxy Statement. Each of the members of
the Audit Committee qualifies as an independent" Director under the current
listing standards of Nasdaq.
Fees charged by PricewaterhouseCoopers LLP for services rendered in
auditing the Corporation's annual financial statements for the most recent
fiscal year and reviewing the financial statements included in the Corporation's
quarterly reports on Form 10-Q for the most recent fiscal year, as well as the
fees charged by PricewaterhouseCoopers LLP for other professional services
rendered during the most recent fiscal year are as follows: Audit Fees -
$173,038; Financial Information Systems Design And Implementation Fees - $0; and
All Other Fees - $839,771.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Corporation's Board of Directors that the Corporation's
audited financial statements be included in the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000.
AUDIT COMMITTEE
William Krivsky, CHAIRMAN
Reuben Wasserman
(1) THE MATERIAL IN THIS REPORT, INCLUDING THE AUDIT COMMITTEE CHARTER, IS NOT
SOLICITING MATERIAL," IS NOT DEEMED FILED WITH THE COMMISSION AND IS NOT TO
BE INCORPORATED BY REFERENCE IN ANY FILING OF THE COMPANY UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, WHETHER MADE BEFORE OR AFTER THE DATE HEREOF AND IRRESPECTIVE OF
ANY GENERAL INCORPORATION LANGUAGE IN ANY SUCH FILING.
10
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors and persons owning more than 10% of the
outstanding Common Stock of the Corporation to file reports of ownership and
changes in ownership with the Commission. Officers, Directors and greater than
10% holders of Common Stock are required by the Commission's regulation to
furnish the Corporation with copies of all Section 16(a) forms they file.
Based solely on copies of such forms furnished as provided above, the
Corporation believes that during the year ended December 31, 2000, all Section
16(a) filing requirements applicable to its Officers, Directors and owners of
greater than 10% of its Common Stock were complied with.
DEADLINES FOR SUBMISSION OF
STOCKHOLDER PROPOSALS
Under regulations adopted by the Commission, any proposal submitted for
inclusion in the Corporation's Proxy Statement relating to the Annual Meeting of
Stockholders to be held in 2002 must be received at the Corporation's principal
executive offices in Natick, Massachusetts on or before November 23, 2001.
Receipt by the Corporation of any such proposal from a qualified stockholder in
a timely manner will not ensure its inclusion in the proxy material because
there are other requirements in the proxy rules for such inclusion.
In accordance with the provisions of Rule 14a-4(c) promulgated under the
Securities Exchange Act of 1934, if the Corporation does not receive notice of a
shareholder proposal to be raised at its 2002 Annual Meeting on or before
February 6, 2002, then in such event, the management proxies shall be allowed to
use their discretionary voting authority when the proposal is raised at the 2002
Annual Meeting.
In addition to the Commission requirements regarding stockholder proposals,
the Corporation's By-Laws contain provisions regarding matters to be brought
before stockholder meetings. If stockholder proposals, including proposals
regarding the election of Directors, are to be considered at the 2002 Annual
Meeting, notice of them whether or not they are included in the Corporation's
proxy statement and form of proxy, must be given by personal delivery or by
United States mail, postage prepaid, to the Clerk of the Corporation on or
before February 8, 2002.
OTHER MATTERS
Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However, if
any other matters properly come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their best judgment.
The cost of this solicitation will be borne by the Corporation. It is
expected that the solicitation will be made primarily by mail, but regular
employees or representatives of the Corporation (none of whom will receive any
extra compensation for their activities) may also solicit proxies by telephone,
telegraph and in person and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy material to their principals
at the expense of the Corporation.
11
10-K REPORT
THE CORPORATION WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE CORPORATION'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
MANAGER OF INVESTOR RELATIONS, COGNEX CORPORATION, ONE VISION DRIVE, NATICK,
MASSACHUSETTS 01760.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
Anthony J. Medaglia, Jr., CLERK
Natick, Massachusetts
March 23, 2001
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APPENDIX A
COGNEX CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing:
the financial reports and other financial information provided by the
Corporation to any governmental body or the public; the Corporation's
systems of internal controls regarding finance, accounting, legal
compliance and ethics that management and the Board have established;
and the Corporation's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Audit Committee
encourages continuous improvement of, and adherence to, the
Corporation's policies, procedures and practices at all levels. The
Audit Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
system.
o Review and appraise the audit efforts of the Corporation's
independent accountants.
o Provide an open avenue of communication among the independent
accountants, financial and senior management, and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors,
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a
member of the Committee. All members of the Committee shall have a
working familiarity with basic finance and accounting practices, and at
least one member of the Committee shall have accounting or related
financial management expertise.
The members of the Committee shall be elected by the Board at the
annual organizational meeting of the Board or until their successors
shall be duly elected and qualified. Unless a Chair is elected by the
full Board, the members of the Committee may designate a Chair by
majority vote of the full Committee membership.
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III. MEETINGS
The Committee shall:
o Meet with the independent accountants and senior financial
management at least twice annually: once to review and agree
upon the scope of work to be performed in the upcoming audit
and once to review the results of the completed audit.
o Communicate each quarter with the independent accountants and
senior financial management (via telephone conference if
appropriate) to review the results of the accountants' limited
review procedures of the quarterly results of operations prior
to the public release of said information.
o Meet at any time as circumstances dictate.
IV. RESPONSIBILITIES
In meeting its purpose, the Audit Committee is expected to:
DOCUMENTS/REPORT REVIEW
1. Review and update this Charter periodically, at least
annually, as conditions dictate.
2. Review the organization's annual financial statements and any
reports or other financial information submitted to any
governmental body, or the public, including any certification,
report, opinion, or review rendered by the independent
accountants.
3. Review with financial management and the independent
accountants the Corporation's quarterly results prior to the
release of earnings. The Chair of the Committee may represent
the entire Committee for purposes of this review.
INDEPENDENT ACCOUNTANTS
4. Recommend to the Board of Directors the selection of the
independent accountants, considering independence and
effectiveness and approve the fees and other compensation to
be paid to the independent accountants. On an annual basis,
the Committee should review and discuss with the accountants
all significant relationships the accountants have with the
Corporation to determine the accountants' independence.
5. Review the performance of the independent accountants with the
Corporation's senior financial management and approve any
proposed discharge of the independent accountants when
circumstances warrant.
6. Meet with the independent auditors and financial management of
the Corporation to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and
at the conclusion thereof review such audit, including any
comments or recommendations of the independent auditors,
including any serious difficulties or disputes with management
encountered during the course of the audit.
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7. Review with the independent auditors and senior financial
personnel the adequacy and effectiveness of the accounting and
financial controls of the Corporation, and elicit any
recommendations for the improvement of such internal control
procedures or particular areas where new or more detailed
controls or procedures are desirable. Particular emphasis
should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be
deemed illegal or otherwise improper.
FINANCIAL REPORTING PROCESSES
8. In consultation with the independent accountants, review the
integrity of the organization's financial reporting processes,
both internal and external.
9. Consider the independent accountants' judgments about the
quality and appropriateness of the Corporation's accounting
principles as applied in its financial reporting.
OTHER
10. Meet with the independent accountants and management in
separate executive sessions to discuss any matters that the
Committee or these groups believe should be discussed
privately with the Audit Committee.
11. Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
12. Prepare a letter for inclusion in the annual report that
describes the Committee's composition and responsibilities,
and how they were discharged.
13. The Audit Committee shall have the power to conduct or
authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be
empowered to retain independent counsel, accountants, or
others to assist it in the conduct of any investigation.
14. The Committee will perform such other functions as assigned by
law, the Corporation's charter or bylaws, or the Board of
Directors.
15. Provide an independent, direct communication link between the
Board of Directors and the independent accountants.
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