Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective November 17, 2016, the Board appointed David L. Watza
as President and Chief Executive Officer of the Company.
Mr. Watza succeeds W. Richard Marz, who was appointed as interim
President and Chief Executive Officer of Perceptron in January 2016. Mr. Marz will continue in his role as Chairman of the Board
of Perceptron.
On November 17, 2016, the Company issued a press release announcing
Mr. Watza’s’s appointment. Attached hereto and incorporated by reference as Exhibit 99.1 is the press release relating
to such announcement. Such information, including Exhibit 99.1 attached hereto under Item 9.01, shall not be deemed “filed”
for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Mr. Watza, 50, has been Senior Vice President, Finance, Chief Financial
Officer, Treasurer and Assistant Secretary of the Company since October 2015. Mr. Watza will continue to serve as the Chief Financial
Officer, Treasurer and Assistant Secretary of the Company. Prior to joining the Company, Mr. Watza served as Vice President of
Corporate Development of TriMas Corporation (NASDAQ: TRS), with responsibility for acquisitions, divestures, and Treasury operations.
Mr. Watza joined TriMas in 2005, holding positions of increasing responsibility and professional growth including Vice President
Finance, Business Planning & Analytics, responsible for strategic planning, annual operating planning and forecasting, and
corporate information technology; division Finance Officer for Trimas Australia Holdings Ltd.; and division Finance Officer for
Cequent Performance Products. Mr. Watza possesses more than 25 years of finance experience in engineered products and manufacturing
businesses with responsibilities in accounting, finance and information technology. He earned his Bachelor of Business Administration
at the University of Michigan.
Under the terms of the Offer Letter between Mr. Watza and the Company,
Mr. Watza’s annual base salary will be $325,000. He will be eligible to participate in the Company’s fiscal 2017 incentive
plans, prorated between his term as Senior Vice President, Finance and his term as President and Chief Executive Officer. His bonus
potential level under the Company’s Fiscal 2017 Executive Short Term Incentive Plan and Long Term Incentive Plan will be
targeted at 60% and 30% of his annual salary, respectively. Mr. Watza is entitled to receive medical, executive life and disability
insurance coverage and other benefits available generally to senior management of the Company and a monthly car allowance of $850.
The foregoing description of the Offer Letter is not complete and is qualified in its entirety by reference to the Offer Letter,
a copy of which is attached as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.
On November 17, 2016, the Management Development, Compensation and
Stock Option Committee awarded Mr. Watza a non-qualified option to purchase 100,000 shares of the Company’s Common Stock,
under the Company’s 2004 Stock Incentive Plan, with a grant date effective December 1, 2016. The option will be issued on
the current form of Non-Qualified Stock Option Agreement for Officers. The option will become exercisable in three equal annual
installments beginning December 1, 2017 at an exercise price equal to the fair market value of the Company’s Common Stock
as of December 1, 2016.
The Company and Mr. Watza also entered into the First Amendment
to Severance Agreement (the “Severance Agreement Amendment”) on November 17, 2016, which amended the Severance Agreement,
dated October 19, 2015, between the Company and Mr. Watza. The Severance Agreement Amendment provides for certain additional severance
benefits, including one times, rather than one-half times, his base salary, reimbursement for COBRA coverage expenses and continuation
of welfare benefits (other than health benefits) for one year, rather than six months, following his termination of employment
and, if termination is six months prior to or within two years following certain changes in control of the Company, his severance
benefits will be two times, rather than one times, his base salary, and reimbursement for COBRA coverage expenses and continuation
of his welfare benefits (other than health benefits) for two years, rather than one year, following his termination of employment.
The foregoing description of the Severance Agreement Amendment is not complete and is qualified in its entirety by reference to
the Severance Agreement Amendment, a copy of which is attached as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated
herein by reference.