UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
Filed by
the Registrant
x
Filed by
a Party other than the Registrant
¨
Check the
appropriate box:
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Preliminary Proxy
Statement
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Confidential, for
Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive Proxy
Statement
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Definitive Additional
Materials
o
Soliciting Material under Rule
14a-2
Integral
Vision, Inc.
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(Name
of the Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
x
No fee required.
o
Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities
to which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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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)
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Proposed maximum aggregate value
of transaction:
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o
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.
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(1)
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Amount Previously
Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To the
Shareholders of Integral Vision, Inc.:
Notice is
hereby given that the Annual Meeting of Shareholders of Integral Vision, Inc., a
Michigan corporation, will be held at the corporate offices, 49113 Wixom Tech
Drive, Wixom, Michigan 48393, on Wednesday, October 13, 2010 at 4:00 p.m. local
time for the following purposes, all of which are more completely set forth in
the accompanying proxy statement.
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1.
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To
elect five Directors;
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2.
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To
consider and vote upon a proposal to amend our Amended and Restated
Articles of Incorporation to effect a one (1) for ten (10) reverse stock
split of our Common Stock;
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3.
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To
consider and vote upon a proposal to ratify the Amendment and Restatement
of Integral Vision, Inc. 2008 Equity Incentive Plan;
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4.
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To
ratify the appointment of Rehmann Robson as the Company’s independent
registered public accounting firm for the fiscal year ending December 31,
2010;
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5.
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To
grant management the authority to adjourn, postpone or continue the Annual
Meeting; and
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6.
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To
transact such other business as may properly come before the
meeting.
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In
accordance with the Bylaws of the Company and a resolution of the Board of
Directors, the record date for the meeting has been fixed at August 23, 2010.
Only Shareholders of record at the close of business on that date will be
entitled to vote at the meeting.
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By
Order of the Board of Directors
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Max
A. Coon
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Secretary
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Wixom,
Michigan
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August
__, 2010
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YOUR VOTE IS
IMPORTANT
YOU ARE
URGED TO DATE AND SIGN THE PROXY FORM, INDICATE YOUR CHOICE WITH RESPECT TO THE
MATTERS TO BE VOTED UPON, AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES MAY
BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF
ADDITIONAL PROXY SOLICITATION. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.
PROXY
STATEMENT
This statement is furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Integral Vision, Inc. (the “Company”) for use at the Annual Meeting of
Shareholders of the Company to be held on October 13, 2010 at 4:00 p.m., or any
adjournments thereof, at the principal executive offices of the Company, located
at 49113 Wixom Tech Drive, Wixom, Michigan 48393. This Proxy Statement is being
mailed on or about September 3, 2010 to all holders of record of common stock of
the Company as of the close of business on August 23, 2010.
PURPOSE
OF THE MEETING
The purpose of this Annual Meeting of
Shareholders shall be to elect Directors, to consider and vote upon a proposal
to amend our Amended and Restated Articles of Incorporation to effect a one (1)
for ten (10) reverse stock split of our Common Stock, to consider and vote upon
a proposal to ratify the Amendment and Restatement of Integral Vision, Inc. 2008
Equity Incentive Plan, to ratify the appointment of Rehmann Robson as the
Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2010, to grant management the authority to adjourn, postpone
or continue the Annual Meeting, and to transact such other business as may
properly come before the meeting.
VOTING
Common Stock with no par value and
Series A Convertible Preferred Stock are the only voting stocks of the Company.
Only holders of record at the close of business on August 23, 2010 are entitled
to vote. In the case of Common Stock, holders are entitled to one (1) vote for
each share held. As of August 23, 2010, the Company had 35,657,409
common shares
outstanding and no preferred shares outstanding. Holders of stock entitled to
vote at the meeting do not have cumulative voting rights with respect to the
election of Directors.
All shares represented by proxies
shall be voted "FOR" each of the matters recommended by management unless the
Shareholder, or his duly authorized representative, specifies otherwise or
unless the proxy is revoked. Any Shareholder who executes the proxy referred to
in this statement may revoke it before it is exercised, provided written notice
of such revocation is received at the office of the Company in Wixom, Michigan
at least twenty-four (24) hours before the commencement of the meeting, or
provided the grantor of the proxy is present at the meeting and, having been
recognized by the presiding officer, announces such revocation in open meeting.
All Shareholders are encouraged to date and sign the proxy form, indicate their
choice with respect to the matters to be voted upon and return it to the
Company.
Directors are elected by plurality
vote, meaning that the five persons receiving the most votes at the meeting,
assuming a quorum is present, are elected as directors of the Company. Most
corporate governance actions other than elections of directors are approved by a
majority of the votes cast, however, the proposal to amend our Amended and
Restated Articles of Incorporation to effect a one (1) for ten (10) reverse
stock split of our Common Stock will require the affirmative vote of the holders
of a majority of the outstanding shares of common stock of the Company. Although
state law and the articles of incorporation and bylaws of the Company are silent
on the issue, it is the intent of the Company that proxies received which
contain abstentions or broker non-votes as to any matter will be included in the
calculations as to the presence of a quorum, but will not be counted as votes
cast in such matter in the calculation as to the needed majority
vote.
ELECTION
OF DIRECTORS
It
is the intention of the persons named in the proxy to vote for election of the
following nominees to the Board of Directors to hold office until the next
Annual Meeting or until their successors are elected. In the event any nominee
should be unavailable, which is not anticipated, the shares may, in the
discretion of the proxy holders, be voted for the election of such persons as
the Board of Directors may submit. Directors are elected for a term of one (1)
year and until their successors are elected and qualified. Although the
Company’s Board of Directors will be composed of five members, the bylaws of the
Company allow for up to nine directors. In the event qualified individuals are
identified after the Annual Meeting of Shareholders, up to four additional
directors could be appointed at such later date by the Board.
The following information is
furnished concerning the nominees, all of whom have been nominated by the Board
of Directors and are presently Directors of the Company.
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Served as
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Name
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Title
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Age
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Director Since
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Charles
J. Drake
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Chairman
of the Board
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70
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1978
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and
Chief Executive Officer
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of
Integral Vision, Inc.
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Max
A. Coon
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Secretary
and
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75
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1978
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Vice
Chairman of the
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Board
of Integral Vision, Inc.
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Vincent
Shunsky
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Treasurer
and Director
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61
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1978
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of
Integral Vision, Inc.
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William
B. Wallace
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Director
of Integral Vision, Inc.
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65
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1990
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Mark
R. Doede
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Director,
President, Chief Operating
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52
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2009
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Officer,
and Chief Financial Officer
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of
Integral Vision, Inc.
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The Board believes that the directors
and nominees have an appropriate balance of knowledge, experience, attributes,
skills and expertise as a whole to ensure the Board appropriately fulfills its
oversight responsibilities and acts in the best interests of the shareholders.
Each nominated director brings a strong background and set of skills to the
Board, giving the Board as a whole competence and experience in a wide variety
of areas, but particularly in technology, international business, growth and
finance, which are the most critical areas for the Company at this point in
time.
Mr. Drake has been a Director of the
Company since 1969, served as President from 1973 to 1998, has been Chairman of
the Board since 1983 and Chief Executive Officer since 1998. Mr. Drake worked as
an operations research analyst at Ford Motor Company before joining the Company
in 1969 as Vice President of Engineering. Mr. Drake served as a director of
Maxco, Inc., then a Nasdaq listed company, from 1982 to 2004. Mr. Drake brings
extensive experience in international business to the Board, having traveled
extensively to Japan, Korea, China, Taiwan, Germany, and England for the purpose
of establishing business relationships. In addition to establishing long term
relationships with companies in Germany, Switzerland, France, and Japan in the
1970’s and 1980’s, Mr. Drake established a joint venture in China in 1993 with
Shanghai Welding Machine Company, purchased and operated Integral Vision, Inc.
Vision, Ltd., a machine vision company located in Bedford, England from which
our present name comes, sold the rights to the Company’s optical disc inspection
business to Datarius, an Austrian company, in 2002, and sold the rights to our
vision inspection for packaging products in 2001 to Dimaco located in Belgium.
Mr. Drake has extensive knowledge of the display industry, having presented at
numerous investors conferences on the display industry beginning in 1999. Mr.
Drake has extensive experience with the financial community having guided the
company through an initial public offering in 1983, subsequent public offerings
in 1985 and 1994, and various private offerings from 1997 to the present. Mr.
Drake is a graduate of the University of Michigan with a Bachelor of Science
Degree in Industrial and Systems Engineering and a Masters in Business
Administration.
Mr. Coon
has been Secretary and a Director of the Company since 1978 and has been Vice
Chairman since 1983. Mr. Coon is the President and Chairman of the Board of
Maxco, Inc. (“Maxco”) and has served in those roles since 1969. Maxco was a
NASDAQ listed public company until June 2007 when it was taken private. Maxco
was a diversified wholesale distributor/converter and manufacturer. Its products
and services were used for general construction, automotive, toolmaking, and
flexible packaging industries. Mr. Coon brings experience in operations,
developing value in manufacturing companies, and has extensive experience in
executive management and compensation through Maxco’s purchase, ownership, and
eventual sale of companies like Planet Corporation, Progressive Machinery
Corporation, Ersco Corporation, Finishmaster, Inc., and Atmosphere Annealing,
Inc. as well as other companies that were under the Maxco umbrella at one time
or another. Mr. Coon, in his role as President and Chairman of Maxco,
systematically looked for opportunities to strengthen the Company’s financial
base through acquisitions or investments in developing companies that showed
significant potential for growth and capital appreciation He also served as a
Director of Spartan Motor Company Inc. in Jackson, Michigan, a NASDAQ listed
public company, from 1990 to 1997. Spartan Motor Company, Inc. is known as a
leading niche market engineer and manufacturer in the heavy duty custom vehicles
marketplace. Mr. Coon is a graduate of Michigan State University and is a
Michigan Certified Public Accountant and practiced as such from 1957 to
1971.
Mr. Shunsky has been a Director and
Treasurer of the Company since 1978. Mr. Shunsky served as a Director, Treasurer
and Vice President of Maxco from 1983 to 2005. Mr. Shunsky brings an extensive
corporate financial background and training as well as knowledge of the public
and private capital markets to the Board. During Mr. Shunsky’s time with Maxco,
he was involved in Maxco’s merger and acquisition activities, private and public
financing transactions and financial reporting and SEC matters. Mr. Shunsky
served a central role in the public and private offerings of Maxco, Medar, Inc,
and Finishmaster, Inc., as well as the acquisition and sale of Maxco’s numerous
subsidiaries such as Progressive Machinery Corporation, Ersco Corporation,
Finishmaster, Inc., Atmosphere Annealing, Inc., The Triquet Paper Company, Image
Arts, Inc., Akemi Plastics, Inc., Pak-Sak Industries, Inc., and others. He is
presently the Managing Principal of Corporate Planning and Consulting, LLC
(CPC). Mr. Shunsky is a graduate of Walsh College and became a Certified Public
Accountant in 1974. He has served on the boards of three public corporations,
including FinishMaster, Inc. from 1990 to 1996, Maxco as referenced above, and
the Company, as well as non-profit organizations.
Mr.
Wallace has been a Director of the Company since 1990. Mr. Wallace earned a
Bachelor of Science Degree in Business Administration from Wayne State
University in Detroit, Michigan and is licensed to practice as a Certified
Public Accountant. Mr. Wallace has received at least 40 hours annually of
continuing professional education in a wide-ranging number of topics (including,
but not limited to, Audit Committee and Boards of Directors) since 1967 as a
requirement of his bi-annual CPA license renewal. He is also an Accredited
Senior Appraiser in the field of Business Valuation, as certified by the
American Society of Appraisers, and has received the Accredited in Business
Valuation credential from the American Institute of CPA’s. Mr. Wallace was a
Partner with Ernst & Young and was employed there from 1967 through 1987; is
Senior Managing Director and Founder of Equity Partners Ltd., an investment
banking firm from 1988 to the present; is a managing member and incorporator of
North Star Home Lending, LLC from 2002 to the present; was one of the five (5)
incorporators that obtained a federal bank charter and served on the Board of
Directors and as an officer of North Star Financial Holdings, Inc. from 2002 to
2010; and was a Board Member and Chairman of the Audit Committee of Nstar
Community Bank from 2005 to 2010. In addition, Mr. Wallace, as a result of
Equity Partners, Ltd. acquisition activities, had an ownership interest in and
served on the Board of Directors of a number of privately-held manufacturing and
distribution companies. Mr. Wallace brings extensive experience with investment
banking activities and business valuation matters, as well as significant
experience as a Director and adds significant financial expertise to our
Board.
Mr. Doede has been a Director of the
Company since 2009. Mr. Doede joined the Company in 1980 as an Applications
Engineer and has served in various engineering, operating, and administrative
positions. He was appointed Vice President of Engineering in 1989, was appointed
Vice President and Chief Operating Officer of the Welding Products Group in
1996, was appointed President and Chief Operating Officer in 1998, and assumed
the role of acting Chief Financial Officer in 2002. Mr. Doede brings product
development and operating experience to our Board having supervised the
development of the resistance welding and vision product lines from 1989 to
1998, including coordinating the activities of product development groups in
Ohio, Bedford, England, and the Company’s headquarters in Farmington Hills,
Michigan. Mr. Doede brings operating experience to our Board having been the
head of the Resistance Welding Group from 1996 to 1998 when it was sold, having
coordinated the ISO 9001 certification program for the entire US operations of
the Company, and being responsible for all operations of the Company since 1998.
Mr. Doede brings international experience to the Board having traveled
extensively in the 1990’s to establish business relationships in South America
and various European countries, participating in the sale of the Company’s
subsidiary in Bedford, England, and being responsible for financial and
contractual transactions with the Company’s partners in Asia and Europe. Mr.
Doede is a graduate of Lawrence Institute of Technology, now known as Lawrence
Technological University, with a Bachelor of Science degree in Electrical
Engineering and serves on the Electrical and Computer Engineering Industrial
Advisory Board for the university.
During the fiscal year ended December
31, 2009, there were a total of two (2) meetings of the Board of Directors as
well as numerous actions taken with the unanimous written consent of the
directors. Max A. Coon and Vincent Shunsky were present at fewer than 50% of the
meetings held during the period.
We are quoted on the Over-The Counter
Bulletin Board system, which does not require director independence. However,
based on the requirements of NASDAQ Listing Rule 5605(a)(2), our Board has
determined that Mr. Coon, Mr. Shunsky, and Mr. Wallace, three of the five
current directors nominated for re-election at the Annual Meeting, are
“independent”.
The Chairman of the Board, Mr. Drake,
presides at meetings of the Board. The Chairman of the Board is also currently
our Chief Executive Officer. The Board believes that combining the Chairman and
Chief Executive Officer positions is the most effective leadership structure for
the present size of the Company and the Board given Mr. Drake’s in-depth
knowledge of the our industry, technology, international marketplace, and
ability to implement strategic initiatives. The Board does not have a
specifically designated lead independent director, but believes that the
committees consisting of only independent directors provide sufficient balance
and oversight for our present size.
The Board of Directors has
established a Compensation Committee whose members are Max A. Coon and Vincent
Shunsky, each of who are independent directors within the meaning of NASDAQ
Listing Rule 5605(a)(2). The Compensation Committee is responsible for
establishing compensation for the Company’s Chief Executive Officer, approving
executive compensation levels of all other executives and authorizing the levels
and timing of bonus payments. In addition, this committee is responsible for
administering the Company’s Stock Compensation Plans and the new Equity
Incentive Plan, including designating the recipients and terms of specific
grants. The Compensation Committee acted one (1) time during the year ended
December 31, 2009 to establish compensation criteria and levels.
The Board of Directors has
established an Audit Committee whose members are William Wallace and Vincent
Shunsky, each of whom are independent directors based on the requirements of
NASDAQ Listing Rule 5605(a)(2). The Audit Committee oversees the Company’s
financial reporting process on behalf of the Board of Directors. Management has
the primary responsibility for the financial statements and the reporting
process including the systems of internal controls.
Management
is responsible for identifying, assessing, and managing the material risks we
face. The Board of Directors as a whole and through its committees has
responsibility for the oversight of risk management. The Board of Directors
exercises these responsibilities as part of its meetings and through its
committees examining specific components of the business risk as part of their
responsibilities. The Compensation Committee oversees the management of risk
relating to executive compensation plans and arrangements, and the Audit
Committee oversees risk in financial controls and reporting. The Board as a
whole oversees risks associated with product and market development. The Board
and each of its committees has the ability to engage outside legal and
professional advisors as required in connection with overseeing their oversight
responsibilities.
Director
Nominations
The Company does not have a standing
nominating committee. Because of the small size of the Company and the technical
nature of the industry in which the Company operates, the Board believes it is
appropriate for the duties of identifying nominees for election to the Board of
Directors to be performed by the full board, whose members are identified above.
No charter has been adopted for the nominating committee. Because the common
stock of the Company is traded on the Over the Counter Bulletin Board, the
Company is not subject to the listing requirements of any securities exchange or
the Nasdaq Stock Market regarding the independence of the members of the Board
of Directors performing duties regarding the nomination of director candidates.
Nevertheless, Max Coon, William Wallace and Vincent Shunsky are independent as
defined in the listing standards of the Nasdaq Stock Market.
The Board of Directors does not have
a written policy with respect to Board diversity; however, the Board’s goal is
to assemble a Board that brings to the Company a diversity of knowledge, skills
and expertise derived from high quality business and professional
experience.
The Board of Directors will consider
director nominees recommended by shareholders. A shareholder who wishes to
recommend a person or persons for consideration as a nominee for election to the
Board of Directors must send a written notice by mail, c/o Investor Relations,
Integral Vision, Inc., 49113 Wixom Tech Drive, Wixom, Michigan 48393, that sets
forth: (1) the name, address (business and residence), date of birth and
principal occupation or employment (present and for the past five years) of each
person whom the shareholder proposes to be considered as a nominee; (2) the
number of shares of the common stock of the Company beneficially owned (as
defined by section 13(d) of the Securities Exchange Act of 1934) by each such
proposed nominee; (3) any other information regarding such proposed nominee that
would be required to be disclosed in a definitive proxy statement to
shareholders pursuant to section 14(a) of the Securities Exchange Act of 1934;
and (4) the name and address (business and residence) of the shareholder making
the recommendation and the number of shares of the common stock of the Company
beneficially owned (as defined by section 13(d) of the Securities Exchange Act
of 1934) by the shareholder making the recommendation. The Company may require
any proposed nominee to furnish additional information as may be reasonably
required to determine the qualifications of such proposed nominee to serve as a
director of the Company. Shareholder recommendations will be considered only if
received no less than 120 days before the date of the proxy statement sent to
shareholders in connection with the previous year’s annual meeting of
shareholders.
The Board of Directors will consider
any nominee recommended by a shareholder in accordance with the preceding
paragraph under the same criteria as any other potential nominee. The Board of
Directors believes that a nominee recommended for a position on the Company’s
Board of Directors must have an appropriate mix of director characteristics,
experience, diverse perspectives and skills. For a new potential board member,
the Board of Directors will in the first instance consider the independence of
the potential member and the appropriate size of the board and then the
qualifications of the proposed member. Qualifications of a prospective nominee
that may be considered by the Board of Directors include:
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Personal
integrity and high ethical
character;
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Professional
excellence;
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Accountability
and responsiveness;
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Absence
of conflicts of interest;
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Fresh
intellectual perspectives and ideas;
and
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Relevant
expertise and experience and the ability to offer advice and guidance to
management based on that expertise and
experience.
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The Company did not receive, by
December 26, 2009, any recommended nominee from any shareholder.
Audit Committee and Committee
Report
.
The Board of Directors has adopted a
Charter to govern the operations of its Audit Committee. A copy of this Charter
is included as an exhibit to the Company’s proxy statement. The Charter requires
that the Audit Committee shall be comprised of at least two directors, each of
whom is independent of management and the Company. As stated above, because the
common stock of the Company is traded on the Over the Counter Bulletin Board,
the Company is not subject to the listing requirements of any securities
exchange or the Nasdaq Stock Market regarding the independence of the members of
the Audit Committee. However, the Charter requires that each member of the Audit
Committee be independent as defined in the listing standards of the Nasdaq Stock
Market.
The Audit Committee oversees the
Company’s financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the
reporting process including the systems of internal controls. In fulfilling its
oversight responsibilities, the committee reviewed the audited financial
statements to be included in the Company’s Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The committee reviewed with the
independent auditors, who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not just the
acceptability, of the Company’s accounting principles and such other matters as
are required to be discussed with the committee under generally accepted
auditing standards. Also, the committee has discussed with the independent
auditors the matters required to be discussed by the statement on Auditing
Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section
380),1 as adopted by the Public Company Accounting Oversight Board in Rule
3200T. In addition, the committee has discussed with the independent auditors
the auditors’ independence from management and the Company including the matters
described in the written disclosures and letter required to be furnished by the
independent auditors in accordance with the applicable requirements of the
Public Company Accounting Oversight Board.
The committee discussed with the
Company’s independent auditors the overall scope and plans for their audit. The
committee meets with the independent auditors, with and without management
present, to discuss the results of the examinations, their evaluations of the
Company’s internal controls, and the overall quality of the Company’s financial
reporting. The committee held four meetings during the year ended December 31,
2009.
In reliance on the reviews and
discussions referred to above, the committee recommended to the Board of
Directors (and the board has approved) that the audited financial statements be
included in the Annual Report on Form 10-K for the year ended December 31, 2009
for filing with the Securities and Exchange Commission.
For the year ended December 31, 2009, the Board of Directors appointed an Audit
Committee established in accordance with section3(a)(58)(A) of the Exchange Act
whose members were William B. Wallace and Vincent Shunsky. It is the opinion of
the Board of Directors that the members of the Audit Committee are each
independent under the above definition. In addition, the Board of Directors has
determined that both William B. Wallace and Vincent Shunsky meet the definition
of an “audit committee financial expert” as defined in Item 401(d)(5)(ii) of
Regulation S-K.
Director
Compensation
Mr. Wallace earns $200 per meeting
and $800 per month for his responsibilities as the Audit Committee Chairperson.
Vincent Shunsky earns $200 per meeting and $600 per month. None of our other
directors receive any fees or other compensation for acting as
directors.
Communications
with the Board of Directors
Shareholders and other interested
parties may communicate with the Board of Directors, including the independent
directors, by sending written communication to the directors c/o the Chairman of
the Board, 49113 Wixom Tech Drive, Wixom, Michigan 48393. All such
communications will be reviewed by the Chairman, or his designate, to determine
which communications will be forwarded to the directors. All communications will
be forwarded except those that are related to Company products and services, are
solicitations, or otherwise relate to improper or irrelevant topics, as
determined in the sole discretion of the Chairman, or his
designate.
The Chairman shall maintain and
provide copies of all such communications received and determined to be
forwarded to the Board of Directors in advance of each of its meetings. In
addition, the Chairman will indicate to the board the general nature of
communications that were not determined to be forwarded and such communications
will be held until each board meeting to be reviewed by any interested
director.
The
Company does not require directors standing for election at an annual meeting of
Shareholders to attend such meeting. All but two of the Company’s
directors attended the Company’s annual meeting of its Shareholders held on May
20, 2009.
EXECUTIVE
OFFICERS
The following table sets forth information concerning the Executive Officers of
the Company.
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Present Position with the
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Company and Principal
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Served as
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Name
|
|
Occupation
|
|
Age
|
|
Officer Since
|
|
|
|
|
|
|
|
Charles
J. Drake
|
|
Chairman
of the Board
|
|
70
|
|
1978
|
|
|
and
Chief Executive Officer
|
|
|
|
|
|
|
of
Integral Vision, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Mark
R. Doede
|
|
President,
Chief Operating
|
|
52
|
|
1989
|
|
|
Officer
and Chief Financial
|
|
|
|
|
|
|
Officer
of Integral Vision, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Jeffery
Becker
|
|
Senior
Vice President
|
|
49
|
|
2007
|
|
|
of
Integral Vision, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
Blowers
|
|
Chief
Technical Officer
|
|
42
|
|
2002
|
|
|
of
Integral Vision, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Paul
M. Zink
|
|
Vice
President of Applications
|
|
44
|
|
2007
|
|
|
Engineering
of Integral Vision, Inc.
|
|
|
|
|
All of the foregoing officers of the
Company have been engaged in the principal occupations specified above for the
previous five years except as follows:
Mr. Becker was appointed Senior Vice
President in May 2007. Mr. Becker served as a Sales Engineer from 2005 to 2007.
Prior to 1999, Mr. Becker worked for the Company in various capacities,
including spending extensive time in China for the Company. From 1999 to 2005
Mr. Becker was not employed by the Company or involved in any activities
associated with our business. We rehired Mr. Becker in 2005 because of our prior
relationship with him, especially his extensive experience with
China.
Mr. Paul Zink was appointed Vice
President Applications Engineering in May 2007. Prior to that time, Mr. Zink
served as Director Vision Applications from November 1998, Manager Vision
Engineering from March 1995 to 1998, Software Supervisor from June 1993 to 1995
and Software Engineer from March 1991 to 1993.
EXECUTIVE
COMPENSATION
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee of the
Board of Directors consists of Max A. Coon and Vincent Shunsky. Mr. Coon,
although an officer of the Company, is also an officer and director of Maxco,
Inc., is paid by Maxco, Inc. and receives no compensation from the Company. Mr.
Coon holds $134,012 of Class 3 notes and earned interest of $2,979 and $10,739
in 2008 and 2009, respectively. Charlevoix Drive Properties, LLC, of which Max
A. Coon is the managing member, holds $125,000 of Class 2 notes and $152,106 of
Class 3 notes and earned interest of $39,318 and $26,570 in 2009 and 2008,
respectively. See Note C – Long Term Debt and Other Financing of the Notes to
Financial Statements included in Item 8 of this Form 10-K. Mr. Shunsky, although
an officer of the Company, receives no compensation from the Company other than
a director fee of $600 per month and $200 per meeting. The Compensation
Committee acted one (1) time during the year ended December 31, 2009 to
establish compensation criteria and levels. The Compensation Committee does not
have a charter.
Overview
and Philosophy
The Committee is responsible for
developing and making recommendations to the Board with respect to the Company’s
executive compensation policies. In addition, the Compensation Committee,
pursuant to authority delegated by the Board, determines on an annual basis the
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company. The Chief Executive Officer has been granted
the authority to grant bonuses to other executive officers of the Company up to
a pre-approved amount.
The objectives of the Company’s
executive compensation program are to:
|
-
|
Support
the achievement of desired Company
performance.
|
|
-
|
Provide
compensation that will attract and retain superior talent and reward
performance.
|
|
-
|
Align
the executive officers’ interests with the success of the Company by
placing a portion of pay at risk, with payout dependent upon corporate
performance, and through the granting of equity
incentives.
|
The executive compensation program
provides an overall level of compensation opportunity that is competitive with
companies of comparable size and complexity. The Compensation Committee will use
its discretion to set executive compensation where, in its judgment, external,
internal or an individual’s circumstances warrant it.
Compensation
Committee Report
The Committee has reviewed and
discussed the Compensation Discussion and Analysis required by Item 402(b) of
Regulation S-K with the management of the Company. Based on such review and
discussion, the Committee recommended to the Board of Directors that such
discussion and analysis be included herein.
As stated above, the Committee
consists of Max A. Coon and Vincent Shunsky.
Executive
Officer Compensation Program
The Company’s executive officer
compensation program is composed of base salary, bonus, long-term incentive
compensation in the form of equity, and various benefits, including medical and
employee savings plans, generally available to employees of the
Company.
Base
Salary
Base salary levels for the Company’s
executive officers are competitively set relative to other comparable companies.
In determining salaries, the Committee also takes into account individual
experience and performance. Due to the Company’s circumstances, base salary
levels for certain of the Company’s executive officers were unchanged from the
prior year.
Stock
Option Program
The stock option program is the
Company’s long-term incentive plan for executive officers and key employees. The
objectives of the program are to align executive and shareholder long-term
interests by creating a strong and direct link between executive pay and
shareholder return, and to enable executives to develop and maintain a
significant, long-term stock ownership position in the Company’s common
stock.
In May 2008, the 2008 Equity
Incentive Plan (“Plan”) allowing the issuance of equity based incentives on up
to 4,828,000 shares of the Company’s common stock was approved by shareholders.
The Plan is designed to promote the interests of the Company and its
shareholders by providing a means by which the Company can grant equity-based
incentives to eligible employees of the Company or any Subsidiary as well as
non-employee directors, consultants, or advisors who are in a position to
contribute materially to the Company’s success (“Participants”). The Plan
permits the Compensation Committee of the Company’s Board of Directors to grant
Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, and
Shares.
In May 2009, the 2008 Equity
Incentive Plan was modified by shareholders to allow the issuance of up to
7,328,000 shares of the Company’s common stock.
In May 2004, a stock option plan
allowing the issuance of options on up to 1,000,000 shares of the Company’s
common stock was approved by the Shareholders. This stock option plan provides
for the grant of both options intended to qualify as "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code, as amended, and
non-statutory stock options which do not qualify for such treatment. The stock
option plan authorizes a committee of directors to award executive and key
employee stock options, as well as options to directors and non-employees who
are in a position to materially benefit the Company. Stock options are granted
at an option price equal to the fair market value of the Company’s common stock
on the date of grant, have ten-year terms and can have exercise restrictions
established by the committee, provided that the Compensation Committee of the
Board of Directors is authorized to approve modifications to the option price
and other terms of stock options at or subsequent to their
issuance.
Stock option plans, each authorizing
options on 500,000 shares of our common stock on substantially the same terms,
were approved by our shareholders in 1999 and 1995.
Employee
Savings Plan
Effective July 1, 1986, the Company adopted a 401(k) Employee Savings Plan. The
401(k) is a “cash or deferred” plan under which employees may elect to
contribute a certain portion of their compensation which they would otherwise be
eligible to receive in cash. The Company has agreed to make a matching
contribution of 20% of the employees’ contributions of up to 6% of their
compensation. In addition, the Company may make a profit sharing contribution at
the discretion of the Board. All full time employees of the Company who have
completed six months of service are eligible to participate in the plan.
Participants are immediately 100% vested in all contributions. The plan does not
contain an established termination date and it is not anticipated that it will
be terminated at any time in the foreseeable future.
Benefits
The Company provides medical benefits to the executive officers that are
generally available to Company employees. Additionally, executive officers may
be provided with other benefits, such as life insurance and an automobile
allowance.
See the
Summary Compensation Table below for further detail.
Chief
Executive Officer
Charles J. Drake has served as the
Company’s Chief Executive Officer since 1978. His base salary for the 2009
fiscal year was $160,000. The bonus paid to Mr. Drake for 2009 was $80,000. Due
to the Company’s circumstances, Mr. Drake’s salary was unchanged from the prior
year.
Summary
Compensation Table
The following table sets forth the
cash and non-cash compensation for each of the last two fiscal years awarded to
or earned by the Chief Executive Officer of the Company and to the other
executive officers whose compensation for the 2009 fiscal year exceeded
$100,000:
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Options
($)
|
1
|
|
All Other
Compensation
($)
|
|
|
Total
|
|
Charles
J. Drake
|
|
2009
|
|
|
160,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
15,410
|
3
|
|
|
255,410
|
|
Chief
Executive Officer
|
|
2008
|
|
|
160,000
|
|
|
|
80,000
|
|
|
|
300,000
|
|
|
|
168,216
|
|
|
|
18,113
|
3
|
|
|
726,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark
R. Doede
|
|
2009
|
|
|
120,000
|
|
|
|
36,000
|
|
|
|
18,560
|
|
|
|
|
|
|
|
13,265
|
4
|
|
|
187,825
|
|
President
& Chief Operating Officer
|
|
2008
|
|
|
120,000
|
|
|
|
36,000
|
|
|
|
55,200
|
|
|
|
40,453
|
|
|
|
15,592
|
4
|
|
|
267,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffery
J. Becker
|
|
2009
|
|
|
117,439
|
2
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
10,865
|
5
|
|
|
140,306
|
|
Senior
Vice President
|
|
2008
|
|
|
104,665
|
2
|
|
|
12,000
|
|
|
|
|
|
|
|
85,531
|
|
|
|
10,384
|
5
|
|
|
212,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
Blowers
|
|
2009
|
|
|
117,000
|
|
|
|
33,000
|
|
|
|
|
|
|
|
|
|
|
|
10,869
|
6
|
|
|
160,869
|
|
Chief
Technical Officer
|
|
2008
|
|
|
117,000
|
|
|
|
33,000
|
|
|
|
|
|
|
|
97,306
|
|
|
|
10,388
|
6
|
|
|
257,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
M. Zink
|
|
2009
|
|
|
117,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
9,725
|
7
|
|
|
126,725
|
|
Vice
President of Applications
|
|
2008
|
|
|
117,000
|
|
|
|
-
|
|
|
|
|
|
|
|
65,380
|
|
|
|
11,453
|
7
|
|
|
193,833
|
|
1
|
These
amounts reflect the aggregate grant date fair value, assuming no risk of
forfeiture, of awards granted during 2008. These amounts have been
calculated in accordance with Accounting Standards Codification topic 718,
“
Stock
Compensation” as issued by the Financial Accounting Standards Board. The
Company uses the Black-Scholes option-pricing model to estimate the fair
value of stock options granted. The Company determines the fair value of
stock awards using the closing stock price on the date of grant. The
assumptions used in the valuation of stock-based awards are discussed in
Note I to the Financial Statements as presented in our Annual Report on
Form 10-KA for the year ended December 31, 2009. The dollar amounts listed
includes an aggregate of $46,582 from the re-pricing of options in
February of 2008.
|
2
|
Includes
$20,439 and $19,665 of commissions in 2009 and 2008,
respectively.
|
3
|
Includes
term life insurance premiums of $300 in 2009 and
2008.
|
4
|
Includes
term life insurance premiums of $346 in 2009 and
2008.
|
5
|
Includes
term life insurance premiums of $252 and $253 in 2009 and 2008
respectively.
|
6
|
Includes
term life insurance premiums of $337 in 2009 and
2008.
|
7
|
Includes
term life insurance premiums of $327 and $323 in 2009 and 2008
respectively.
|
Options
Exercised During Fiscal Year
There were no options exercised during
the fiscal year by executive officers named in the Summary Compensation Table
above.
Grants
of Plan Based Awards During Fiscal Year 2009
The following table lists plan based
awards granted to executive officers named in the Summary Compensation Table
above:
|
|
|
|
|
Grants of Plan Based Awards during Fiscal Year 2009
|
|
Name
|
|
Grant
Date
|
|
|
Estimated
Future
Payout
Target (#)
|
|
|
Stock
Award
|
|
|
Stock
Options
|
|
|
Option
Exercise
Price
($)
|
|
|
Grant Date
Fair
Value ($)
|
|
Mark
R. Doede
|
|
1/1/2009
|
1
|
|
|
116,000
|
2
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,560
|
|
1
This
stock award was issued from the 2008 Equity Incentive Plan.
2
Grant
terms restrict the sale of stock awarded until all Class 2 Notes are repaid.
This restriction was removed May 5, 2010.
Outstanding
Equity Awards at Fiscal Year-End 2009
The following table lists unexercised
options as of December 31, 2009 for the executive officers named in the Summary
Compensation Table above.
|
|
|
|
|
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
at
FY-End
(#)
|
|
|
|
|
|
|
|
Equity Incentive Plan
Awards
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
Market
value of
unearned
shares ($)
|
6
|
|
Number of
unearned
shares (#)
|
|
Charles
J. Drake
|
|
|
500,000
|
|
|
|
|
|
|
0.17
|
|
|
5/15/2018
|
|
|
37,000
|
7
|
|
|
1,000,000
|
|
|
|
|
500,000
|
|
|
|
|
|
|
0.30
|
|
|
9/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark
R. Doede
|
|
|
50,000
|
|
|
|
|
|
|
0.14
|
|
|
8/1/2011
|
|
|
11,100
|
7
|
|
|
300,000
|
|
|
|
|
50,000
|
|
|
|
|
|
|
0.24
|
|
|
3/12/2012
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
0.15
|
|
|
5/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
33,000
|
|
|
|
|
|
|
0.13
|
|
|
1/20/2018
|
|
|
|
|
|
|
|
|
|
|
|
117,500
|
|
|
|
117,500
|
|
|
|
0.26
|
4
|
|
2/14/2018
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
0.15
|
3
|
|
4/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
116,000
|
|
|
|
|
|
|
|
0.17
|
|
|
5/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffery
J. Becker
|
|
|
33,000
|
|
|
|
|
|
|
|
0.13
|
|
|
1/20/2018
|
|
|
|
|
|
|
|
|
|
|
|
65,000
|
|
|
|
65,000
|
|
|
|
0.26
|
1
|
|
2/14/2018
|
|
|
|
|
|
|
|
|
|
|
|
57,000
|
|
|
|
|
|
|
|
0.22
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
|
|
|
|
|
|
0.17
|
|
|
5/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
232,000
|
|
|
|
25,000
|
|
|
|
0.30
|
|
|
9/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
Blowers
|
|
|
30,000
|
|
|
|
|
|
|
|
0.14
|
|
|
8/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
0.15
|
|
|
5/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
33,000
|
|
|
|
|
|
|
|
0.13
|
|
|
1/20/2018
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
0.26
|
2
|
|
2/14/2018
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
0.15
|
3
|
|
4/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
0.22
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
142,000
|
|
|
|
|
|
|
|
0.17
|
|
|
5/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
208,000
|
|
|
|
35,000
|
|
|
|
0.30
|
|
|
9/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
M. Zink
|
|
|
25,000
|
|
|
|
|
|
|
|
0.15
|
|
|
5/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
0.13
|
|
|
1/20/2018
|
|
|
|
|
|
|
|
|
|
|
|
77,500
|
|
|
|
77,500
|
|
|
|
0.26
|
5
|
|
2/14/2018
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
4,000
|
|
|
|
0.15
|
3
|
|
4/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
82,000
|
|
|
|
|
|
|
|
0.17
|
|
|
5/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
0.30
|
|
|
9/16/2018
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1
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These
stock options were issued in September, 2008 in exchange for options
originally granted on various dates with a weighted average exercise price
of $0.60.
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2
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These
stock options were issued in September, 2008 in exchange for options
originally granted on various dates with a weighted average exercise price
of $0.70.
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3
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These
stock options were issued in September, 2008 in exchange for options
originally granted on October 22, 1999 with an exercise price of
$1.065.
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4
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These
stock options were issued in September, 2008 in exchange for options
originally granted on various dates with a weighted average exercise price
of $0.87.
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5
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These
stock options were issued in September, 2008 in exchange for options
originally granted on various dates with a weighted average exercise price
of $0.83.
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6
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These
shares were valued at the closing price of $0.037 on April 23,
2009.
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7
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Shares
do not vest until outstanding Class 2 Notes are paid. This restriction was
removed May 5, 2010.
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The
option exchanges have been calculated in accordance Accounting Standards
Codification topic 718 using the Black-Scholes option-pricing model. Refer to
Note I - Share Based Compensation of the Financial Statements as presented in
the 10-K for the year ended December 31, 2009 for more information.
Non-Employee
Director Compensation Table - 2009
The
following table sets forth the cash compensation paid to non- employee directors
of the Company for the last fiscal year. No directors received any non-cash
compensation. For compensation paid to employee directors, Charles J. Drake and
Mark R. Doede, refer to the Summary Compensation table above.
Name
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Fees
Earned
($)
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Vincent
Shunsky
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7,200
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William
Wallace
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11,400
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Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company’s Directors and Executive
Officers or beneficial owners of over 10% of any class of the Company’s equity
securities to file certain reports regarding their ownership of the Company’s
securities or any changes in such ownership.
Based
solely upon our review of copies of such reports (and amendments thereto) which
we have received during the year ended December 31, 2009, and written
representations of the persons required to file said reports, we believe that
all reporting persons complied with these reporting requirements during fiscal
year 2009 except for the following late reports: Mr. Max A. Coon was late filing
Form 4’s for a January 8, 2009 and a July 1, 2009 transaction. Mr. Mark Doede
was late filing Form 4 for a January 1, 2009 transaction.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
information as of July 31, 2010 about the shareholders who we believe are the
beneficial owners of more than five percent (5%) of our outstanding common
stock, as well as information about ownership of our common stock by each of our
directors, our chief executive officer, our chief financial officer, our other
three most highly compensated executive officers and our directors and named
executives as a group. Except as described below, we know of no person that
beneficially owns more than 5% of our outstanding common stock. Except as
otherwise noted below, each person or entity named in the following table has
the sole voting and investment power with respect to all shares of our common
stock that he, she or it beneficially owns. Except as otherwise noted below, the
address of each person or entity named in the following table is c/o Integral
Vision, Inc., 49113 Wixom Tech Drive, Wixom, Michigan 48393.
Austin
W. Marxe
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Common
Stock
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5,450,000
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13.88
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%
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David
M. Geenhouse (1)
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153
East 53rd Street, 55th Floor
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New
York, NY 10022
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Bonanza
Master Fund, LTD (2)
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Common
Stock
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4,970,600
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13.93
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%
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300
Crescent Court, Suite 1740
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Dallas,
TX 75201
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J.
N. Hunter (3)
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Common
Stock
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8,725,579
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20.97
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%
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Industrial
Boxboard Corporation
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2249
Davis Court
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Hayward,
CA 94545
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John
R. Kiely, III (4)
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Common
Stock
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9,142,170
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22.13
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%
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17817
Davis Road
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Dundee,
MI 48131
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Charles
J. Drake (5)
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Common
Stock
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6,645,709
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17.31
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%
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Max
A. Coon (6)
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Common
Stock
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1,727,173
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4.74
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%
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Mark
R. Doede (7)
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Common
Stock
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1,443,255
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3.92
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%
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Jeffery
B. Becker (8)
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Common
Stock
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883,742
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2.42
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%
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Andrew
Blowers (9)
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Common
Stock
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1,261,111
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3.42
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%
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Paul
M. Zink (10)
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Common
Stock
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765,053
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2.10
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%
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Vincent
Shunsky (11)
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Common
Stock
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24,253
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*
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William
B. Wallace
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Common
Stock
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0
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*
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All
Directors and Officers as a Group (8 persons) (12)
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Common
Stock
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12,750,296
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30.19
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%
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*
Beneficial ownership does not exceed
1%
.
(1)
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Austin
W. Marxe and David M. Greenhouse are the principal owners of AWM, SSTA and
MG. AWM is the general partner of and investment adviser to the Special
Situations Cayman Fund, L.P. SSTA is the general partner of and investment
adviser to the Special Situations Technology Fund, L.P. and the Special
Situations Technology Fund II, L.P. MG is the general partner of and
investment adviser to the Special Situations Private Equity Fund, L.P.
Through their control of AWM, SSTA and MG, Messrs. Marxe and
Greenhouse share voting and investment control over the portfolio
securities of each of the funds listed below. The total beneficial
ownership of Messrs. Marxe and Greenhouse
includes:
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(i)
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105,000
shares of common stock and warrants for the purchase of 204,325 shares
which expire on September 15, 2013, held by Special Situations Technology
Fund, L.P.;
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(ii)
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645,000
shares of common stock and warrants for the purchase of 1,255,135 shares
which expire on September 15, 2013 held by Special Situations Technology
Fund II, L.P.;
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(iii)
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350,000
shares of commons stock and warrants for the purchase of 681,081 shares
which expire on September 15, 2013 held by Special Situations Cayman Fund,
L.P.; and
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(iv)
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750,000
shares of common stock and warrants for the purchase of 1,459,459 shares
which expire on September 15, 2013 held by Special Situations Private
Equity Fund, L.P.
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(2)
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The
total beneficial ownership includes 4,970,600 shares of common stock
currently held but does not include warrants for the purchase of 3,000,000
shares which expire on September 15, 2013 and are subject to a 4.99%
blocker clause.
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(3)
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The
total beneficial ownership J.N. Hunter
includes:
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(i)
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263,846
shares of common stock held directly by J.N. Hunter in the J.N. Hunter
IRA;
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(ii)
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187,846
shares held by the Industrial Boxboard Company, of which Mr. Hunter
and his spouse are the sole general
partners;
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(iii)
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2,343,272
shares held by the Industrial Boxboard Corporation Profit Sharing Plan and
Trust, of which Mr. Hunter and his spouse are the sole
trustees;
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(iv)
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5,237,484
shares issuable upon the conversion of convertible notes held by the
Industrial Boxboard Corporation Profit Sharing Plan and Trust which
matured on September 1, 2010; and
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(v)
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693,131
shares issuable upon the exercise of warrants held by the Industrial
Boxboard Corporation Profit Sharing Plan and Trust which expire September
15.2012;
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but does
not include 3,845,373 shares issuable on the conversion of convertible notes and
exercise of warrants held by the Industrial Boxboard Corporation Profit Sharing
Plan and Trust which are subject to blocker clauses as follows:
Shares
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Issued
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Expire
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Type and Price
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Blocker %
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432,567
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1/8/09
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9/1/10
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Convertible
Note @ $0.15 per share
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4.90
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372,033
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7/1/09
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9/1/10
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Convertible
Note @ $0.15 per share
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4.90
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400,707
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1/1/10
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9/1/10
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Convertible
Note @ $0.15 per share
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4.90
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115,068
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2/24/09
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2/24/13
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Warrant
@ $0.15 per share
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9.90
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28,767
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2/24/09
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2/24/13
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Warrant
@ $0.15 per share
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9.90
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57,535
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4/10/09
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4/10/13
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Warrant
@ $0.15 per share
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9.90
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14,384
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4/10/09
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4/10/13
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Warrant
@ $0.15 per share
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9.90
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285,252
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4/10/09
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4/10/13
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Warrant
@ $0.15 per share
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9.90
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22,603
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6/4/09
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6/4/13
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Warrant
@ $0.15 per share
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9.90
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28,767
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7/3/09
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7/3/13
|
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Warrant
@ $0.15 per share
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4.90
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65,753
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7/28/09
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7/28/13
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Warrant
@ $0.15 per share
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4.90
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45,205
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8/28/09
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8/28/13
|
|
Warrant
@ $0.15 per share
|
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4.90
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349,518
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7/3/09
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7/3/13
|
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Warrant
@ $0.15 per share
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4.90
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376,705
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10/8/09
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10/8/13
|
|
Warrant
@ $0.15 per share
|
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4.90
|
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699,041
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2/1/10
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2/1/14
|
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Warrant
@ $0.15 per share
|
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4.90
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551.469
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3/23/10
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3/23/14
|
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Warrant
@ $0.15 per share
|
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4.90
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154,110
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7/23/10
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7/23/14
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Warrant
@ $0.15 per share
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4.90%
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(5)
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The
total beneficial ownership for John R. Kiely, III
includes:
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(i)
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2,211,988
shares of common stock held
directly;
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(ii)
|
156,281
shares of common stock issuable upon the exercise of warrants which expire
July 30, 2011 and are held
directly;
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(iii)
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2,622,032
shares of common stock issuable upon the conversion of convertible notes
which matured September 1, 2010 and are held by John R. Kiely, III in his
personal living trust;
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(iv)
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191,733
shares of common stock issuable upon the exercise of warrants which expire
January 2, 2012 and are held by John R. Kiely, III in his personal living
trust;
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(v)
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1,291,693
shares held by John R. and Margaret Lee Kiely Revocable Trust, of which
John R. Kiely, III is the sole
trustee;
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(vi)
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2,410,465
shares issuable upon the conversion of convertible notes held by the John
R. and Margaret Lee Kiely Revocable Trust, which mature on September 1,
2010;
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(vii)
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67,730
shares and 180,048 shares of common stock issuable upon the exercise of
warrants which expire July 30, 2011 and January 2, 2012, respectively, and
are held by the John R. and Margaret Lee Kiely Revocable Trust;
and
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(viii)
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10,200
shares held by Michael H. Kiely Trust, of which John R. Kiely is the
co-trustee.;
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but does
not include 2,762,638 shares issuable on the conversion of convertible notes and
exercise of warrants held by the John R. and Margaret Lee Kiely Revocable Trust
(Revocable Trust), by John R. Kiely, III in his personal trust (Personal Trust),
or held jointly in a trust of which Michael H. Kiely and John R. Kiely are
co-trustees (Joint Trust), all of which are subject to a blocker clauses as
follows:
Shares
|
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Issued
|
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Expire
|
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Type and Price
|
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Held By
|
|
Blocker %
|
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|
|
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158,027
|
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7/1/09
|
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9/1/10
|
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Convertible
Note @ $0.15 per share
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Revocable
Trust
|
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4.90
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170,207
|
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1/1/10
|
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9/1/10
|
|
Convertible
Note @ $0.15 per share
|
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Revocable
Trust
|
|
4.90
|
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|
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|
184,467
|
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7/3/09
|
|
7/3/13
|
|
Warrant
@ $0.15 per share
|
|
Revocable
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
198,817
|
|
10/8/09
|
|
10/8/13
|
|
Warrant
@ $0.15 per share
|
|
Revocable
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
368,938
|
|
2/1/10
|
|
2/1/14
|
|
Warrant
@ $0.15 per share
|
|
Revocable
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
291,054
|
|
3/23/10
|
|
3/23/14
|
|
Warrant
@ $0.15 per share
|
|
Revocable
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
172,127
|
|
7/1/09
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
185,393
|
|
1/1/10
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
246,575
|
|
2/18/10
|
|
2/18/14
|
|
Warrant
@ $0.15 per share *
|
|
Joint
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
139,161
|
|
7/3/09
|
|
7/3/13
|
|
Warrant
@ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
149,985
|
|
10/8/09
|
|
10/8/13
|
|
Warrant
@ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
278,322
|
|
2/1/10
|
|
2/1/14
|
|
Warrant
@ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
219,565
|
|
3/23/10
|
|
3/23/14
|
|
Warrant
@ $0.15 per share
|
|
Personal
Trust
|
|
4.90
|
(6)
|
The
total beneficial ownership for Mr. Drake
includes:
|
|
(i)
|
4,787,803
shares of common stock currently held;
and
|
|
(ii)
|
1,857,906
options to purchase common stock which are immediately
exercisable.
|
(7)
|
The
total beneficial ownership for Mr. Coon
includes:
|
|
(i)
|
929,072
shares of common stock held
directly;
|
|
(ii)
|
34,467
shares of common stock issuable upon the conversion of convertible notes
which mature September 1, 2010 and are held directly by Max A.
Coon;
|
|
(ii)
|
17,059
shares held by Max A. Coon IRA;
|
|
(iii)
|
541,096
shares of common stock issuable upon the conversion of convertible notes
which mature September 1, 2010 and are held by Charlevoix Drive
Properties, LLC of which Mr. Coon is a
member;
|
|
(iv)
|
205,479
shares of common stock issuable upon the exercise of warrants which expire
September 15, 2012 and are held by Charlevoix Drive Properties, LLC of
which Mr. Coon is a member;
|
but does
not include 1,151,601 shares issuable on the conversion of convertible notes and
exercise of warrants held by Max Coon or held by Charlevoix Drive Properties,
LLC, all of which are subject to a blocker clauses as follows:
Shares
|
|
Issued
|
|
Expire
|
|
Type and Price
|
|
Held By
|
|
Blocker %
|
|
|
|
|
|
|
|
|
|
|
|
503,452
|
|
1/2/08
|
|
9/1/10
|
|
Convertible
Note @ $0.25 per share
|
|
Max
Coon
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
19,860
|
|
1/8/09
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Max
Coon
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
37,127
|
|
1/1/10
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Max
Coon
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
72,147
|
|
1/8/09
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
40,067
|
|
7/1/09
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
43,160
|
|
1/1/10
|
|
9/1/10
|
|
Convertible
Note @ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
77,055
|
|
7/3/09
|
|
7/3/13
|
|
Warrant
@ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
83,048
|
|
10/8/09
|
|
10/8/13
|
|
Warrant
@ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
154,110
|
|
2/1/10
|
|
2/1/14
|
|
Warrant
@ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
|
|
|
|
|
|
|
|
|
|
|
121,575
|
|
3/23/10
|
|
3/23/14
|
|
Warrant
@ $0.15 per share
|
|
Charlevoix
Drive Properties
|
|
4.90
|
(8)
|
The
total beneficial ownership for Mr. Doede
includes;
|
|
(i)
|
341,500
shares of common stock currently held;
and
|
|
(iii)
|
1,101,755
options to purchase common stock which are immediately
exercisable.
|
(9)
|
The
total beneficial ownership for Mr. Becker
includes:
|
|
(i)
|
24,200
shares of common stock currently held;
and
|
|
(ii)
|
859,542
options to purchase common stock which are immediately
exercisable;
|
(10)
|
The
total beneficial ownership for Mr. Blowers
includes:
|
|
(i)
|
55,050
shares of common stock currently held;
and
|
|
(ii)
|
1,206,061
options to purchase common stock which are immediately
exercisable;
|
|
but
does not include 64,000 options to purchase common stock which become
exercisable January 1, 2011.
|
|
|
(11)
|
The
total beneficial ownership for Mr. Zink
includes:
|
|
(i)
|
15,800
shares of common stock currently held;
and
|
|
(ii)
|
749,253
options to purchase common stock which are immediately
exercisable.
|
(12)
|
The
total beneficial ownership includes 22,253 shares of common stock held
directly by Vincent Shunsky and 2,000 shares held by Mr. Shunsky’s
IRA.
|
(13)
|
The
total beneficial ownership includes 6,192,737 shares of common stock
currently held by our officers and directors; options to purchase
5,774,517 shares held by five officers which they are eligible to exercise
immediately; and 781,042 shares of common stock issuable on the conversion
or exercise of convertible notes and warrants held by Max Coon and
Charlevoix Properties, LLC as detailed in note 7 above. Total beneficial
ownership does not include options to purchase 64,000 shares held by one
officer which he is eligible to exercise January 1, 2011 or 1,151,601
shares of common stock issuable on the conversion or exercise of
convertible notes and warrants held by Max Coon and Charlevoix Drive
Properties, LLC as detailed in note 7
above.
|
PROPOSED
AMENDMENT TO EFFECT A ONE (1) FOR TEN (10) REVERSE STOCK SPLIT OF
THE
COMPANY’S COMMON STOCK
We
believe it is in the best interests of the Company and its shareholders to adopt
an amendment to the Company’s Amended and Restated Articles of Incorporation
authorizing a reverse stock split of our outstanding shares of common
stock. The proposed amendment to our Amended and Restated Articles of
Incorporation is attached to this proxy statement as follows (the
“Amendment”).
Amendment
to the Articles of Incorporation
of
Integral
Vision, Inc.
The
following is hereby added as a new paragraph of the Amended and Restated
Articles of Incorporation:
Effective
upon the filing of this Certificate of Amendment with the Michigan Department of
Energy, Labor and Economic Growth (the “Effective Time”), the shares of Common
Stock issued and outstanding immediately prior to the Effective Time shall be
combined and reclassified into a smaller number of shares such that each ten
shares of issued Common Stock immediately prior to the Effective Time are
reclassified into one share of Common Stock. Notwithstanding the immediately
preceding sentence, no fractional shares shall be issued. The Company will round
up fractional shares to the nearest whole share. Each stock
certificate that, immediately prior to the Effective Time, represented shares of
Common Stock that were issued and outstanding immediately prior to the Effective
Time shall, from and after the Effective Time, automatically and without the
necessity of presenting the same for exchange, represent that number of whole
shares of Common Stock after the Effective Time into which the shares of Common
Stock formerly represented by such certificate shall have been
reclassified.
If the
Amendment is approved, the number of issued and outstanding shares of common
stock would be reduced by an exchange ratio of one (1) share for every ten (10)
shares currently outstanding (the “Exchange Ratio”), and the current authorized
number of shares of our common stock would remain at 90 million, without further
approval of our shareholders. The reverse stock split would become effective
upon filing the Amendment with the Michigan Department of Energy, Labor and
Economic Growth which is anticipated to occur promptly following the Meeting, if
approved.
Purpose
of the Reverse Split
After
careful consideration, the Board of Directors decided to recommend a one for ten
reverse stock split and not to subject the authorized shares to the reverse
split so we did not have to have a separate action to increase the number of
authorized shares after the reverse stock split. The Company was
delisted from the Nasdaq Capital Market in 2001 and trading in our common stock
has since been conducted on the OTC Bulletin Board. Among other
things, one hurdle to our ability to regain listing on the Nasdaq Capital Market
is the requirement that the closing bid price for our common stock must exceed
$4.00 per share. By potentially increasing our stock price, the
reverse stock split may increase the possibility that our stock could again be
listed on the Nasdaq Capital Market. The Company also believes that the
anticipated increase in the price per share as a result of the reverse split
will encourage greater interest in our common stock among members of the
financial community and the general investing public. We believe that brokerage
firms may be reluctant to recommend lower priced stock to their clients, which
may be due in part to a perception that lower-priced securities are less
promising as investments, are less liquid in the event that an investor wishes
to sell its shares, or are less likely to be followed by securities research
firms and therefore to have less third-party analysis of the company available
to investors. We believe that the reduction in the number of issued and
outstanding shares of our common stock caused by the Reverse Stock Split,
together with the anticipated increase stock price immediately following and
resulting from the Reverse Stock Split may encourage interest and trading in our
common stock and thus possibly create a more liquid market for the Company’s
shareholders, thereby resulting in a broader market for our common stock than
that which currently exists.
However,
the possibility exists that shareholder liquidity may be adversely affected by
the reduced number of shares outstanding if the reverse split is effected,
particularly if the price per share of the Company’s common stock begins a
declining trend after the reverse split is effected. There can be no assurance
that the reverse split will achieve any of the desired results. There can also
be no assurance that the price per share of the Company’s common stock
immediately after the reverse split will increase proportionately with the
reverse split, or that any increase will be sustained for any period of
time. The Company is not aware of any present efforts by anyone to
accumulate its common stock, and the proposed reverse split is not intended to
be an anti-takeover device nor is it part of a broader plan to take the Company
private.
Effects
of Reverse Split on Common Stock
One
principal effect of the reverse split would be to decrease the number of
outstanding shares of our common stock. Except for de minimus adjustments that
may result from the treatment of fractional shares as described below, the
reverse split will not have any dilutive effect on our shareholders since each
shareholder would hold the same percentage of our common stock outstanding
immediately following the reverse split as such shareholder held immediately
prior to the reverse split. The relative voting and other rights that accompany
the shares of common stock would not be affected by the reverse split. Although
the reverse split will not have any dilutive effect on our shareholders (other
than de minimus adjustments that may result from the treatment of fractional
shares), the proportion of shares owned by our shareholders relative to the
number of shares authorized for issuance will decrease because our Amended and
Restated Articles of Incorporation will maintain the current authorized number
of shares of common stock at 90 million.. The proposed Amendment will
not otherwise alter or modify the rights, preferences, privileges or
restrictions of the common stock. The following table illustrates the
effect of the proposed reverse stock split on the shares of common stock
outstanding and the shares of common stock committed for issuance as of July 31,
2010:
Type of Equity
(as of July 31, 2010)
|
|
Pre Articles
Amendment
|
|
|
Post Articles
Amendment
|
|
|
|
|
|
|
|
|
Common
Stock Issued & Outstanding
|
|
|
35,675,409
|
|
|
|
3,567,541
|
|
Committed
for Stock Options
|
|
|
6,260,000
|
|
|
|
626,000
|
|
Committed
for Warrants
|
|
|
15,470,544
|
|
|
|
1,547,054
|
|
Committed
for Convertible Debt
|
|
|
23,233,132
|
|
|
|
2,323,313
|
|
Authorized
and un-committed
|
|
|
9,360,915
|
|
|
|
81,936,092
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
90,000,000
|
|
|
|
90,000,000
|
|
The
common stock authorized before and after the reverse stock split will be
90,000,000 shares.
The
Reverse Stock Split, if implemented, would not change the number of authorized
shares of our common stock, which is 90,000,000, under our articles of
incorporation. Therefore, because the number of issued and
outstanding shares of our common stock would decrease, the number of shares
remaining available for issuance would increase. As explained in more
detail below, these additional shares of common stock would be available for
issuance from time to time for corporate purposes such as purchase of assets,
sales of stock or securities convertible into common stock and raising
additional capital. We do not have any current plans for the use of
the increased number of authorized but unissued shares, but we believe that the
availability of the additional shares will provide us with the flexibility to
meet business needs as they arise, to take advantage of favorable opportunities
and to respond to a changing corporate environment.
The
increased reserve of shares available for issuance may be used to facilitate
public or private financings. If sufficient operating funds cannot be
generated by operations, we may need to, among other things, issue and sell
unregistered common stock, or securities convertible into common stock, in
private transactions. Such transactions might not be available on
terms favorable to us, or at all. We may sell common stock at prices
less than the public trading price of the common stock at the time, and we may
grant additional contractual rights to purchase not available to other holders
of common stock, such as warrants to purchase additional shares of common stock
or anti-dilution protections.
In
addition, the increased reserve of shares available for issuance may be used for
our equity incentive plans for grants to our employees, consultants and
directors. Our Board of Directors believes that it is critical to
provide incentive to our officers and employees, to increase our revenues and
profitability, and as a result, our market value, through equity incentive
awards. Such equity incentive plans may also be used to attract and retain
employees or in connection with potential acquisitions as we grant options to
the employees of the acquired companies. Our Board of Directors
believes that our ability to achieve our growth strategy may be impaired without
additional shares of authorized common stock that could be used to provide such
equity incentives.
The
availability of additional shares of common stock is particularly important in
the event that our Board of Directors needs to undertake any of the foregoing
actions on an expedited basis and therefore needs to avoid the time (and
expense) of seeking stockholder approval in connection with the contemplated
action. If this proposal is approved by the stockholders and the
Reverse Stock Split is effected, our Board of Directors does not intend to
solicit further stockholder approval prior to the issuance of any additional
shares of common stock, except as may be required by applicable law or
rules.
If this
proposal is approved, the additional authorized but un-issued shares of common
stock may generally be issued from time to time for such proper corporate
purposes as may be determined by our Board of Directors, without further action
or authorization by our stockholders, except for some limited circumstances
where stockholder approval is required by law or the listing standards of any
stock exchange on which our common stock may be listed at such
time.
Potential
Anti-Takeover or Dilutive Effect
The
purpose of maintaining our authorized common stock at a proportionately higher
level than would be available if the number of authorized shares was reduced by
the Reverse Stock Split ratio is to facilitate our ability to raise additional
capital to support our operations, not to establish any barriers to a change of
control or acquisition of the company. The common shares that are
authorized but unissued provide our Board of Directors with flexibility to
effect, among other transactions, public or private refinancings, acquisitions,
stock dividends, stock splits and the granting of equity incentive
awards. However, these authorized but unissued shares may also be
used by the Board of Directors, consistent with and subject to its fiduciary
duties, to deter future attempts to gain control of us or make such actions more
expensive and less desirable. The Amendment is not being recommended
in response to any specific effort of which we are aware to obtain control of
the Company, nor does the Board of Directors have any present intent to use the
authorized but unissued common stock to impede a takeover
attempt.
In
addition, the issuance of additional shares of common stock for any of the
corporate purposes listed above could have a dilutive effect on earnings per
share and the book or market value of our outstanding common stock, depending on
the circumstances, and would likely dilute a shareholder’s percentage voting
power in the company.
Effect
on Outstanding Stock Option Plans
The
Company presently has two (2) active stock option plans under which new stock
options can be granted, the 2004 Employee Stock Option Plan and the Integral
Vision, Inc. 2008 Equity Incentive Plan. Under the terms
of the plans, when the reverse split becomes effective, the number of shares
available for grant by each plan will be decreased in accordance with the
Exchange Ratio.
Effect
on Outstanding Stock Options
As of
July 31, 2010, the Company had 6,260,000 options to purchase Common Stock
outstanding. Under the terms of the options, when the reverse split
becomes effective, the number of shares covered by each option will be decreased
and the conversion or exercise price per share will be increased in accordance
with the Exchange Ratio.
Effect
on Outstanding Warrants
As of
July 31, 2010, the Company had warrants for the purchase of approximately
15,470,544 shares of Common Stock outstanding. Under the terms of the
warrants, when the reverse split becomes effective, the number of shares covered
by each warrant will be decreased and the exercise price per share will be
increased in accordance with the Exchange Ratio.
Effect
on Outstanding Class 3 Convertible Notes
As of
July 31, 2010, the Company had Class 3 Notes convertible into approximately
23,233,132 shares of Common Stock outstanding. Under the terms of the
Class 3 Notes, when the reverse split becomes effective, the conversion price
per share of Common Stock will be increased in accordance with the Exchange
Ration causing the number of shares available on conversion to be decreased in
accordance with the Exchange Ratio.
No
Effect on Legal Ability to Pay Dividends
The
Company does not believe the reverse split will have any effect with respect to
future distributions, if any, to the Company’s shareholders. The
Company has never declared or paid any cash dividends on our Common
Stock. We currently intend to retain any earnings for use in
our operations and expansion of our business and therefore do not anticipate
paying any cash dividends in the foreseeable future.
Payment
for Fractional Shares; Book Entry Form of Shares
The
Company will appoint Registrar and Transfer Company to act as exchange agent for
holders of common stock in connection with the reverse split. The Company will
not issue fractional shares with respect to the reverse split, but will instruct
the Company’s transfer agent to round up any fractional share to the nearest
whole share. Some of the Company’s outstanding common stock is registered in the
names of clearing agencies and broker nominees. Because the Company does not
know the number of shares held by each beneficial owner for whom the clearing
agencies and broker nominees are record holders, the Company cannot predict with
certainty the number of fractional shares that will result from the reverse
split or the total number of additional shares that will be issued as a result
of rounding up fractional shares. However, the Company does not expect that the
amount will be material. As of the Record Date, the Company had
approximately 322 holders of record of the Company’s common stock and
approximately 1,200 beneficial holders. The Company does not expect the reverse
split to result in a significant reduction in the number of record holders. The
Company presently does not intend to seek any change in its status as a
reporting company for federal securities law purposes, either before or after
the reverse split. Some of our shareholders of record hold their
shares of common stock in certificate form. On or after the effective date of
the reverse split, the Company will mail a letter of transmittal to each such
shareholder. Each such shareholder will be able to obtain a new stock
certificate evidencing its post-reverse-split shares if it sends the exchange
agent its old stock certificate(s), together with the properly executed and
completed letter of transmittal, and such evidence of ownership of the shares as
the Company may require. Such shareholders will not receive a new stock
certificate for post-reverse-split shares unless and until their old
certificates are surrendered. Such shareholders should not forward their
certificates to the exchange agent until they receive the letter of transmittal
and they should only send in their certificates with the letter of transmittal.
Shareholders who hold shares in street name through a nominee (such as a bank or
broker) will be treated similarly as shareholders of record, and nominees will
be instructed to effect the reverse split for their beneficial holders. However,
nominees may have different procedures and shareholders holding shares in street
name should contact their nominees.
Shareholders
will not have to pay any service charges in connection with the exchange of
their Certificates unless they have lost their certificate in which case a
$45.00 lost certificate processing fee and a surety bond, whose price is
dependant on the number of shares on the certificate, will be
required.
Federal
Income Tax Consequences of a Reverse Stock Split
The
following is a summary of certain material federal income tax consequences of a
reverse stock split and does not purport to be a complete discussion of all of
the possible federal income tax consequences of a reverse stock split and is
included for general information only. Further, it does not address
any state, local or foreign income or other tax consequences. For
example, the state and local tax consequences of the reverse stock split may
vary significantly as to each stockholder, depending upon the state in which
such stockholder resides. Also, it does not address the tax
consequences to holders in light of their individual circumstances or to the
holders that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding companies, foreign
entities, nonresident alien individuals, partnerships, limited liability
companies and other tax-transparent entities, broker-dealers, holders subject to
the alternative minimum tax provisions of the Internal Revenue Code, holders who
hold their stock as part of a hedge, wash sale, appreciated financial position,
straddle, conversion transaction, synthetic security or other risk reduction
transaction or integrated investment, holders who have acquired their stock upon
exercise of employee options or otherwise as compensation and tax-exempt
entities. The discussion is based on the provisions of the United
States federal income tax law as of the date hereof, which is subject to change
retroactively as well as prospectively. This summary also assumes
that the old shares were, and the new shares will be, held as a “capital asset,”
as defined in the Internal Revenue Code (generally, property held for
investment). The tax treatment of a stockholder may vary depending
upon the particular facts and circumstances of such
stockholder. Accordingly, each stockholder is urged to consult with
such stockholder’s own tax advisor with respect to the tax consequences of the
reverse stock split beyond the discussion included herein.
Subject
to the discussion below concerning the treatment of fractional shares, no gain
or loss should be recognized by a stockholder upon such stockholder’s exchange
of old shares for new shares pursuant to the reverse stock split and the
aggregate tax basis of the new shares received in the reverse stock split,
including any fraction of a new share deemed to have been received, will be the
same as the stockholder’s aggregate tax basis in the old shares that are
exchanged. Subject to the discussion below concerning the treatment
of fractional shares, each stockholder’s holding period for the new shares will
include the period during which each stockholder held its old shares surrendered
in the reverse stock split. The Company itself would not realize any taxable
gain or loss as a result of a reverse stock split.
The
Internal Revenue Service, however, may take the position that the receipt of an
additional portion of a share in lieu of fractional shares is a distribution and
the discussion in this paragraph assumes such treatment. Such
distribution is taxable as a dividend to the extent that we have earnings or
profits as determined for federal income tax purposes, in which case a
stockholder would recognize dividend income equal to the fair market value of
the additional fraction of a share received. To the extent that the
fair market value of the additional fraction of a share received by each of the
stockholders is greater than the Company’s earnings and profits, such excess
would be treated first as a return of each stockholder’s basis in such
stockholder’s old shares and the amount in excess of basis would be taxable
capital gain. To the extent old shares have been held by a
stockholder for more than one year, such gain should be long-term capital
gain. In general, each stockholder would have a basis in such
additional fraction of a share equal to its fair market value and a holding
period that begins on the day after the additional fraction of a share is
received. Stockholders should consult their own tax advisors
regarding the tax consequences to them of the receipt of additional shares
including the calculation of basis and holding period.
Our view
regarding the tax consequence of the reverse stock split is not binding on the
Internal Revenue Service or the courts.
Approval
Required
The
affirmative vote of the holders of a majority of the outstanding shares of
common stock of the Company is required for the approval of this proposed
Amendment. Both abstentions and broker non-votes will have the effect
of a negative vote. Unless otherwise directed by a shareholder’s proxy, the
persons named as proxy voters in the accompanying proxy will vote FOR this
Amendment. The approval of this proposal is not a condition to the approval of
any other proposals submitted to the shareholders.
The Board of Directors recommends a
vote FOR this proposal to amend our Amended and Restated Articles of
Incorporation
.
PROPOSED
AMENDMENT OF 2008 EQUITY INCENTIVE PLAN
NOTE: IF
THE REVERSE STOCK SPLIT IS APPROVED BY THE SHAREHOLDERS, SHARES AVAILABLE FOR
ISSUE UNDER THE PROPOSED AMENDMENT OF THE INTEGRAL VISION, INC., 2008 EQUITY
INCENTIVE PLAN WILL DECREASE IN ACCORDANCE WITH THE EXCHANGE RATIO.
The
Company’s Board of Directors adopted the Integral Vision Inc. 2008 Equity
Incentive Plan, effective March 24, 2008, contingent on shareholder approval,
which was obtained at the 2008 annual shareholders meeting. The
Company’s Board of Directors adopted the Amendment and Restatement of Integral
Vision, Inc., 2008 Equity Incentive Plan (together the “Plan”), effective March
24, 2009, contingent on shareholder approval, which was obtained at the 2009
annual shareholders meeting.
The Plan
is designed to promote the interests of the Company and its shareholders by
providing a means by which the Company can grant equity-based incentives to
eligible employees of the Company or any Subsidiary as well as non-employee
directors, consultants, or advisors who are in a position to contribute
materially to the Company’s success (“Participants”) Presently, there are
approximately 12 participants. The Plan permits the Compensation
Committee of the Company’s Board of Directors ("Compensation Committee") to
grant Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock,
and Shares. A copy of the Plan, as amended and restated effective
March 24, 2009, was filed as Exhibit 10.6 to the Company’s Definitive Schedule
14A, filed April 6, 2009.
As
amended and restated on March 24, 2009, the Plan provided for up to the
following number of Shares to be used for Awards:
(a) 7,328,000
shares, plus
(b) Any
Shares covered by an Award under the Plan or option under the 2004 Employee
Stock Option Plan that are forfeited or remain unpurchased or undistributed upon
termination or expiration of the Award or option under the Prior Plan,
plus
(c) Any
Shares exchanged by a Participant as full or partial payment to the Company of
the Exercise Price of any Award under the Plan.
Of the
Shares authorized for Awards, no Shares remained available as of May 31,
2010. As a result, the Board, pursuant to the recommendation of the
Compensation Committee, has adopted an amendment of the Plan, contingent on
shareholder approval, which makes an additional 6,672,000 Shares available for
Awards under the Plan. The amendment also eliminates the limitations
on the number of Shares available for Awards to an individual participant in a
given year. The following table lists the grants and options issued
contingent on shareholder approval of the amendment to the
Plan:
|
|
Stock Awards
|
|
|
Incentive Stock
Options
|
|
Non-Qualified Stock
Options
|
|
Grant/Exercise Price
|
|
Charles
J. Drake
|
|
|
1,342,000
|
|
|
|
875,906
|
|
|
|
$
|
0.037
|
|
Mark
R. Doede
|
|
|
|
|
|
|
477,755
|
|
|
|
$
|
0.037
|
|
Jeffry
J. Becker
|
|
|
|
|
|
|
292,542
|
|
|
|
$
|
0.037
|
|
Andrew
Blowers
|
|
|
|
|
|
|
427,061
|
|
|
|
$
|
0.037
|
|
Paul
Zink
|
|
|
|
|
|
|
253,253
|
|
|
|
$
|
0.037
|
|
Executive
Officers (as a group)
|
|
|
1,342,000
|
|
|
|
2,326,517
|
|
|
|
$
|
0.037
|
|
Other
Non-Executive Employees (as a group)
|
|
|
|
|
|
|
66,483
|
|
|
|
$
|
0.037
|
|
Advisors
(as a group)
|
|
|
|
|
|
|
|
|
100,000
|
|
$
|
0.043
|
|
A copy of
the Plan, as Amended and Restated to reflect the foregoing amendment, is set out
in Exhibit 10(7) to this Proxy Statement.
The
Board of Directors recommends a vote FOR this proposal to amend our 2008 Equity
Incentive Plan.
.
PROPOSED
RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING
FIRM
The Audit
Committee has appointed the firm of Rehmann Robson as the independent registered
public accounting firm of the Company for the year ending December 31, 2010,
subject to the ratification of the appointment by the Company’s
shareholders.
Relationship
With Independent Public Accountants
The firm
of Rehmann Robson served the Company as its independent auditors for the year
ended December 31, 2009. A representative of Rehmann Robson is
expected to be present at the Annual Meeting of Shareholders, will be available
to respond to appropriate questions, and will have the opportunity to make a
statement if he or she desires to do so.
During
the years ended December 31, 2008 and December 31, 2009, Rehmann Robson billed
the Company for its services as follows:
Audit Fees.
For aggregate
fees billed for professional services rendered for the audit of the Company’s
annual financial statements for the years ended December 31, 2008 and December
31, 2009 and the reviews of the financial statements included in the Company’s
quarterly reports filed with the Securities and Exchange Commission during the
years:
2008:
|
|
$
|
56,500
|
|
2009:
|
|
$
|
50,950
|
|
Tax Fees
. For
aggregate fees billed for professional services rendered for the preparation of
the Company’s annual tax returns for the years ended December 31, 2008 and
December 31, 2009:
2008:
|
|
$
|
3,000
|
|
2009:
|
|
$
|
3,000
|
|
All Other
Fees
.
For aggregate fees
billed for professional fees with regard to the SEC comment letter on the
registration statement and specific tax consulting projects for the years ended
December 31, 2008 and December 31, 2009:
2008:
|
|
$
|
11,000
|
|
2009:
|
|
$
|
12,950
|
|
The Audit
Committee of the Company’s Board of Directors is of the opinion that the
provision of services described above was compatible with maintaining the
independence of Rehmann Robson
.
All services
rendered to the Company by Rehmann Robson are permissible under applicable laws
and regulations, and are pre-approved by the Audit Committee. A
statement of work and associated fees for audit and tax services is negotiated
by the Audit Committee before work is begun. Professional services
outside of the statement of work are requested on an as needed
basis. These services are actively monitored (both spending level and
work content) by the Audit Committee to maintain the appropriate objectivity and
independence in Rehmann Robson’s core work, which is the audit of the Company’s
financial statements. The Company’s Board of Directors has accepted
the recommendation of the Audit Committee that the Company retain the firm of
Rehmann Robson to serve as the Company’s independent auditors for the year ended
December 31, 2010.
The
Board of Directors recommends a vote FOR this proposal to ratify the appointment
of Rehmann Robson.
SHAREHOLDER
PROPOSALS
Any
proposals which Shareholders of the Company intend to present at the next annual
meeting of the Company must be received at the Company by December 8, 2010, for
inclusion in the Company’s proxy statement and proxy form for that
meeting. Where a Shareholder making a proposal does not choose to
seek to have such proposal included in the Company’s proxy materials, such
proposal will not be considered timely for submission at the next annual meeting
unless it is received by the Company by February 22, 2011, and in such case, the
Company’s proxy will provide the management proxies with discretionary authority
to vote on such proposal without any discussion of the matter in the proxy
statement. Proposals should be directed to the attention of Investor
Relations at the offices of the Company, 49113 Wixom Tech Drive, Wixom, Michigan
48393.
DELIVERY
TO SHAREHOLDERS SHARING AN ADDRESS
Only one
copy of the notice of this proxy statement is being delivered to two or more
shareholders who share an address, unless the Company has received contrary
instructions from one or more of such shareholders. A separate copy
of the notice will be promptly delivered upon written or oral request of a
shareholder at a shared address directed to the attention of Investor Relations
at the offices of the Company, 49113 Wixom Tech Drive, Wixom, Michigan 48393,
telephone number 248-668-9230. Shareholders at a shared address who
wish to receive multiple copies of the Company’s notices in the future, or
alternatively who are receiving multiple copies and wish to receive only a
single copy, may direct their request to the attention of Investor Relations at
the forgoing address and telephone number.
OTHER
BUSINESS
The
Company’s management knows of no other matters that may come before the
meeting. However, if other matters do come before the meeting, the
proxy holders will vote in accordance with their best judgment.
The cost
of solicitation of proxies will be borne by the Company. In addition
to solicitations by use of the mails, officers and regular employees of the
Company may solicit proxies by telephone or in person.
|
By
Order of the Board of Directors
|
|
|
|
|
|
Max
A. Coon
|
|
|
Secretary
|
|
INTEGRAL
VISION, INC.
Proxy
solicited on behalf of the Board of Directors
for
Annual Meeting of Shareholders
to
be held October 13, 2010.
The
undersigned hereby constitutes and appoints Max A. Coon and Charles J. Drake,
and each or any of them, attorney and proxy for and in the names and stead of
the undersigned, to vote all stock of Integral Vision, Inc. (“Integral Vision”)
on all matters unless the contrary is indicated herein at the Annual Meeting of
Shareholders to be held at the corporate offices, 49113 Wixom Tech Drive, Wixom,
Michigan 48393 on October 13, at 4:00 p.m. local time or at any adjournments
thereof, according to the number of votes that the undersigned could vote if
personally present at said meeting. The undersigned directs that this
proxy be voted as follows on the reverse side.
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 the Proposals.
PLEASE
MARK, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY USING THE ENCLOSED
ENVELOPE.
|
Please
sign exactly as your name(s) appear(s) on the reverse side. 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.
|
HAS
YOUR ADDRESS CHANGED?
|
|
DO
YOU HAVE ANY COMMENTS?
|
|
|
|
____________________________________
|
|
______________________________________
|
____________________________________
|
|
______________________________________
|
____________________________________
|
|
______________________________________
|
____________________________________
|
|
______________________________________
|
|
|
|
|
For
All
|
|
With-
|
|
For
All
|
|
|
|
|
Nominees
|
|
|
|
Except
|
M.
Coon
|
|
V.
Shunsky
|
|
|
|
|
|
|
C.
Drake
|
|
W.
Wallace
|
|
_______
|
|
_____
|
|
______
|
M.
Doede
|
|
|
|
|
|
|
|
|
INSTRUCTION: To
WITHHOLD AUTHORITY to vote for any individual
nominee,
mark the “For All Except” box and strike a line through the Name(s)
of the
nominee(s). Your shares will be voted for the remaining
nominee(s).
2.
|
AMENDMENT
TO ARTICLES OF INCORPORATION
|
The
Company is authorized to amend its Amended and Restated Articles of
Incorporation to effect a one (1) for ten (10) reverse stock split of our common
stock.
For_______ Against_________ Abstain_________
3.
|
AUTHORITY
TO ADJOURN, POSTPONE OR CONTINUE THE ANNUAL
MEETING
|
The
management of the Company is granted the authority to adjourn, postpone or
continue the Annual Meeting.
For_______ Against_________ Abstain_________
4.
|
AMENDMENT
AND RESTATEMENT OF INTEGRAL VISION, INC. 2008 EQUITY COMPENSATION
PLAN
|
The
Company is authorized to adopt the Amendment and Restatement of Integral Vision,
Inc., 2008 Equity Compensation Plan which increases the maximum shares of its
common stock awardable by 6,672,000 shares and eliminates the limitations on the
number of Shares available for Awards to an individual participant in a given
year.
For_______ Against_________ Abstain_________
5.
|
RATIFY
THE APPOINTMENT OF REHMANN ROBSON AS
AUDITORS
|
Appoint
Rehmann Robson as auditors for the fiscal year ending December 31,
2010.
For_______ Against_________ Abstain_________
6.
|
In
their discretion, the Proxies are authorized to vote upon such other
business as may come before the
meeting.
|
Mark box
at right if an address change or comment has been noted on the reverse side of
this
card. _______
RECORD
DATE SHARES:
Please be sure to sign and date this
Proxy. DATED:
|
,
2010
|
|
|
|
Shareholder
sign here
|
|
Co-owner
sign
here
|
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