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SEC 1913 (02-02)

47827 Halyard Drive
Plymouth, Michigan 48170-2461
(734) 414-6100 Facsimile: (734) 414-4700

Dear Perceptron Shareholder:

You are cordially invited to attend the 20092010 Annual Meeting of Shareholders of Perceptron, Inc. (“Company”) to be held on Tuesday, November 17, 2009,16, 2010, at 9:00 a.m., local time, at 47827 Halyard Drive, Plymouth, Michigan 48170.

The attached notice of the meeting and Proxy Statement describe the items of business to be transacted:

     (a) The election of eight directors,

     (b) The ratification of the selection of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal 2010,2011, and

     (c) Such other business as may properly come before the meeting or any adjournment thereof.

The Board of Directors encourages you to read the Proxy Statement carefully. We have also made available a copy of our Annual Report for fiscal year 2009.2010. We encourage you to read the Annual Report, which includes information about our business and products, as well as our audited financial statements.

After the formal business session at the Annual Meeting of Shareholders, there will be a report to the shareholders on the progress of the Company along with a discussion period. I look forward to seeing you at the Annual Meeting and hope you will make plans to attend. Whether or not you plan to attend the meeting, I urge you to sign, date and return the accompanying proxy in the enclosed postage-paid envelope enclosed for your convenience so that as many shares as possible may be represented at the meeting. No postage is required if the envelope is mailed in the United States.

     A certified list of shareholders entitled to vote at the meeting will be available for examination by any shareholder during the meeting at the corporate offices at 47827 Halyard Drive, Plymouth, Michigan 48170.

     A copy of the 20092010 Annual Report for the fiscal year ended June 30, 20092010 and Proxy Statement accompanies this notice.

     The vote of every shareholder is important, and your cooperation in promptly voting via the Internet, by phone or by returning your marked, dated and signed proxy will be appreciated. The proxy is revocable and will not affect your right to vote in person if you attend the meeting. Your proxy will, however, help to assure a quorum and to avoid added proxy solicitation costs.

     Our standard compensation arrangements for our Board of Directors who are not our employees (the “Eligible Directors”) are:

     The annual cash retainers identified above are paid quarterly on September 1, December 1, March 1 and June 1. All Eligible Directors, other than the non-executive Board Chair, for meetings after August 15, 2008, receive $1,250 for each Board meeting attended. In addition, directors are reimbursed for their out-of-pocket expenses incurred in attending Board and committee meetings.

Committee has only awarded non-qualified stock options under the 2004 Stock Plan. The exercise price for a non-qualified stock option will be not less than 100% of the fair market value of Common Stock on the date of grant. Fair market value means, for purposes of determining the value of Common Stock on the grant date, the closing sale price of the Common Stock on The Nasdaq Stock Market’s Global Market (“Nasdaq Global Market”) on the grant date. On January 21, 2008,No stock grants were made to Eligible Directors in fiscal 2010 under the date he was appointed the non-executive Chairman of the Board, Mr. Marz received effective February 1, 2008, non-qualified stock options to purchase 50,000 shares, vesting one-fourth on each of the first four anniversaries of the date of grant. On January 2, 2009, each Eligible Director received non-qualified stock options to purchase 8,000 shares, vesting one-fourth on each of the first four anniversaries of the date of grant.2004 Stock Plan. The exercisability of such options under the 2004 Stock Plan is accelerated in the event of the occurrence of certain changes in control of the Company. See “Compensation of Executive Officers — Potential Payments Upon Termination or Change in Control.” In addition, such options become immediately exercisable in the event that the Eligible Director’s service on the Board is terminated by the Company, he is not re-nominated by the Company to serve on the Board or, if re-nominated, is not re-elected, or voluntarily resigns from the Board at the request of the Company. All options granted under the 2004 Stock Plan are exercisable for a period of ten years from the date of grant, unless earlier terminated due to the termination of the Eligible Director’s service as a director of the Company.

     The 2004 Stock Plan also permits Eligible Directors to purchase shares of Common Stock through the 2004 Stock Plan in exchange for all or a portion of the cash fees payable to them for serving as a director of the Company (“Directors Stock Purchase Rights Option”). By December 31 of each year, a director must make his or her election to purchase shares of Common Stock in exchange for all or a portion of a director’s fees payable from December 1 of that year to December 1 of the next year.

     Directors fees are payable in cash on March 1, June 1, September 1 and December 1 of each year. On each of these dates, we determine the number of shares of Common Stock each Director who has elected to participate in the Directors Stock Purchase Rights Option has earned on that date. This determination is made by dividing all director’s fees payable on each of those dates which the Director has elected to exchange for Common Stock, by the fair market value of the Common Stock on that date. Any portion of the director’s fees payable on each of those dates which the Director has not elected to receive in Common Stock will be paid to the Director in cash. The fair market value of the Common Stock will be determined by using the closing sale price of the Common Stock on the Nasdaq Global Market on the grant date. We will issue share certificates for all shares of Common Stock purchased in a calendar year by December 15^th of such year unless a director requests by written notice to receive his or her share certificate at any time during the year.

     The Company’s Board consists of seven independent directors, including the Chairman of the Board, Mr. Marz, and one management director, Mr. Rittenour, the President and Chief Executive Officer of the Company. The Board is responsible for direction of the overall affairs of the Company. The Board has established three standing committees, being the Audit Committee, the Management Development, Compensation and Stock Option Committee and the Nominating and Corporate Governance Committee, as further detailed below. Each of the committees is comprised solely of independent directors, and each committee has a different chair. The Company believes that it is beneficial to have a non-executive Chairman who is responsible for leading the Board. The Company also believes that its predominantly independent Board, mixed with the experience of its management director, constitutes a leadership structure that is most appropriate for the Company and its shareholders at this time because it supports strategy development and execution and facilitates information flow between senior management and the Board. The Board retains the authority to modify this structure to best address the Company’s unique circumstances as and when appropriate.

     Our directors are elected to serve until their successors are elected. The Board, and each committee thereof, meetmeets formally from time to time and also taketakes action by consent resolutions. During the fiscal year ended June 30, 2009,2010, the Board met a total of eightseven times. All of the current directors who are standing for re-election attended at least 75%100% of the total meetings of the Board, and of any committee on which they served, held during the period in fiscal 20092010 in which they served as directors or members of any such committees. Our policy is that each director is strongly encouraged to attend the Annual Meeting of Shareholders if reasonably possible. All of the directors, except one, attended the 20082009 Annual Meeting of Shareholders.

     The Board has delegated certain authority to an Audit Committee, a Management Development, Compensation and Stock Option Committee and a Nominating and Corporate Governance Committee to assist it in executing its duties. The Board has adopted charters for each of these Committees. The charters are available on our website atwww.perceptron.com. The Board determined that all of the directors, other than Mr. Rittenour, are “independent directors” as defined in Marketplace Rule 4200(a)(15) of The Nasdaq Stock Market, Inc. (“Nasdaq”). Mr. Marz has served as non-executive Chairman of the Board since January 2008 and presides over meetings of the Board of Directors and independent directors.

     The composition and principal functions of each Committee are as follows:

     Audit Committee.The Audit Committee is currently comprised of three outside members of the Board: Messrs. Ratigan, who serves as Chairman, Beattie and Smith. Mr. Beattie was appointed to the Audit Committee in November 2008 when he replaced Mr. Oswald. The Board determined that all of the members of the Audit Committee are independent as required by the rules of the Securities and Exchange Commission (“SEC”) and Nasdaq listing standards for audit committee members. In addition, the Board determined that Mr. Ratigan qualified as an “audit committee financial expert” as defined by applicable SEC rules and that each of the Audit Committee members satisfies all other qualifications for Audit Committee members set forth in the applicable Nasdaq rules. The Audit Committee held sixfive meetings in fiscal 2009.2010.

     On August 6, 2007November 18, 2009 the Board approved and adopted the Audit Committee’s revised charter. The Audit Committee’s primary responsibilities include the following:

     Management Development, Compensation and Stock Option Committee.The Management Development, Compensation and Stock Option Committee (“Management Development Committee”) is currently comprised of three outside members of the Board: Messrs. DeCocco, who serves as Chairman, Beattie and Dabrowski. Mr. Dabrowski was appointed to the Management Development Committee in November 2008 when he replaced Mr. Marz.

     On November 12, 2007, the Board approved and adopted the Management Development Committee’s revised charter. The Management Development Committee’s primary responsibilities include the following:

Twelve employees are currently under the purview of the Management Development Committee, including all of the executive officers named in the Summary Compensation Table included herein. Mr. Rittenour participates in meetings of the Management Development Committee and makes recommendations with respect to the annual compensation of employees under the Committee’s purview. The Management Development Committee reviews and approves the compensation of employees under its purview other than Mr. Rittenour. The Management Development Committee separately determines the compensation of Mr. Rittenour in executive session. Pursuant to its charter, the Management Development Committee is authorized to retain any compensation consultants or other advisors as it deems appropriate to assist in compensation matters. The Management Development Committee has the sole authority to hire and fire ourany compensation consultant. Since 2008, the Management Development Committee has periodically engaged Sullivan Cotter and Associates, Inc. (“Sullivan Cotter”) to serve as an independent compensation consultant to the Management Development Committee regarding annual profit sharing and director and executive compensation matters. Sullivan Cotter performed limited work at the direction and under the supervision of the Management Development Committee during fiscal 2009.2010. The Management Development Committee held ninethree meetings in fiscal 2009.2010.

     Nominating and Corporate Governance Committee.The Nominating and Corporate Governance Committee (“Nominating Committee”) is currently comprised of three outside members of the Board: Messrs. Dabrowski, who serves as Chairman, DeCocco and Oswald. Mr. Oswald was appointed to the Nominating Committee in November 2008 when he replaced Mr. Marz. The Board determined that all members of the Nominating Committee are independent as required by the Nasdaq listing standards for nominating committee members.

     On November 12, 2007, the Board approved and adopted the Nominating Committee’s revised charter. The Nominating Committee’s primary responsibilities include the following:

     The Nominating Committee may use various methods to identify director candidates, including recommendations from existing Board members, management, shareholders, professionals and other sources outside the Company, which could include third party search firms. The Nominating Committee will evaluate and screen the list of potential nominees and narrow the list to individuals they believe best satisfy the needs of the Company, with a strong preference given to the continuation of the current Board members. The Nominating Committee will conduct interviews and gather additional information concerning the individuals.individuals, as they deem appropriate. Based on the foregoing, the Nominating Committee will recommend to the Board the number of members of the Board to be elected at the next annual meeting of shareholders of the Company and the persons to be nominated for election to the Board. Director candidates need not possess any specific minimum qualifications. Rather, a candidate’s suitability for nomination and election to the Board will be evaluated in light of the portfolio of skills, experience, perspective and background required for the effective functioning of the Board. While the Company does not have a formal written diversity policy, the Nominating Committee considers diversity of director nominees in terms of background, experience, skill set and expertise in matters relating to the Company’s business in an effort to promote balanced deliberation and consideration of matters presented to the Board. Among the desired qualities that the Nominating Committee will consider are: (i) high ethical character; (ii) practical intelligence and judgment, an inquiring mind and a good range of problem solving skills; (iii) independence; (iv) ability to work in a collaborative culture; (v) high-level leadership experience and personal achievement; (vi) sufficient personal commitment and time to devote to responsibilities as a director; and (vii) capacity and desire to represent the balanced best interests of the shareholders as a whole.

     The Nominating Committee will consider candidates recommended by shareholders using the same procedures and standards utilized for evaluating candidates recommended by other sources except that the Nominating Committee will not consider a director nominee proposed by a shareholder if (i) the shareholder does not submit the required information timely (see “Shareholder Proposals and Nominees for 20102011 Annual Meeting — Shareholder Nominees”); (ii) the shareholder or group of shareholders proposing the director nominee do not beneficially own, in the aggregate, more than 5% of the Company’s Common Stock, with the Common Stock used to satisfy this requirement owned for at least one year prior to the date of the recommendation, or (iii) the shareholder proposes as the nominee himself or herself, or an affiliate or affiliated party. See “Shareholder Proposals and Nominees for 20102011 Annual Meeting — Shareholder Nominees” for a description of the procedures to be used by shareholders to submit recommendations of possible director nominees to the Nominating Committee. The Nominating Committee held fourthree meetings in fiscal 2009.2010.

     Shareholders desiring to communicate with the Board or any individual director may send communications to the Board in writing by mail addressed to the Board of Directors or an individual director, c/o Vice President, General Counsel & Secretary, Perceptron, Inc., 47827 Halyard Drive, Plymouth, MI 48170 or by e-mail addressed toboardofdirectors@perceptron.comdgeiss@perceptron.com.

     We have adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies to the Company’s directors, executive officers and other employees. The Code of Ethics is available on our website at www.perceptron.com.www.perceptron.com. Shareholders may also obtain a written copy of the Code of Ethics, without charge, by sending a written request to the Investor Relations Department, Perceptron, Inc., 47827 Halyard Drive, Plymouth, Michigan 48170. We will disclose any amendments to, or waivers from, the provisions of the Code of Ethics applicable to the directors or executive officers on the Company’s website.

     Certain information relating to corporate governance matters can be viewed atwww.perceptron.com. There we make available, free of charge, our (i) charters for the Audit Committee, Management Development, Compensation and Stock Option Committee and Nominating and Corporate Governance Committee and (ii) Code of Ethics. We intend to post additional information on this website from time to time as the Board adopts or revises policies and procedures. The information found on our website is not part of this or any report we file with, or furnishesfurnish to, the SEC.

     In accordance with its revised charter, which was approved and adopted by the Board on August 6, 2007,November 18, 2009, the Audit Committee provides assistance to the Board in fulfilling its responsibility to the shareholders, potential shareholders and investment community relating to corporate accounting, reporting practices of the Company and the quality and integrity of the accounting policies, internal controls and financial reports of the Company. In doing so, it is the responsibility of the Audit Committee to maintain free and open communication between the Board, the Company’s independent registered public accounting firm and the financial management of the Company.

     The Company’s management is primarily responsible for the preparation, presentation and integrity of the Company’s financial statements. The Company’s independent registered public accounting firm, Grant Thornton LLP, is responsible for performing an independent audit of the Company’s financial statements and expressing an opinion as to the conformity of the financial statements with generally accepted accounting principles.

     The Audit Committee received from the independent registered public accounting firm and reviewed a formal written statement describing all relationships between the firm and the Company that might bear on the firm’s independence consistent with the applicable requirements of Public Company Accounting Oversight Board (PCAOB) Rule 3526 (Communication with Audit Committees Concerning Independence), as may be modified or supplemented, discussed with the auditors any relationships that may impact their objectivity and independence and satisfied itself as to the auditors’ independence.

     The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as may be amended or supplemented, as adopted by the PCAOB in Rule 3200T, and, with and without management present, discussed and reviewed the results of the independent registered public accounting firm’s examination of the financial statements.

     The Audit Committee reviewed and discussed with management and the independent registered public accounting firm the audited financial statements of the Company as of and for the fiscal year ended June 30, 2009,2010, including the quality of accounting principles and significant judgments affecting the financial statements and the results of Grant Thornton LLP’s independent audit described above.

     The members of the Audit Committee are not engaged in the practice of auditing or accounting. In performing its functions, the Audit Committee necessarily relies on the work and assurances of the Company’s management and the independent registered public accounting firm.

     Based on the above-mentioned reviews and discussions with management and the independent registered public accounting firm and in light of its role and responsibilities, the Audit Committee recommended to the Board that the Company’s audited financial statements as of and for each of the last three years ended June 30, 20092010 be included in the Company’s Annual Report on Form 10-K for the year ended June 30, 20092010 for filing with the Securities and Exchange Commission. Further, the Audit Committee approved the engagement of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ended June 30, 2010.2011.

     The Management Development Committee currently consists of Messrs. Beattie, Dabrowski and DeCocco. Mr. Dabrowski was appointed to the Management Development Committee n November 2008 when he replaced Mr. Marz. During fiscal 2009,2010, no member of the Management Development Committee served as an officer or employee of the Company or any of its subsidiaries nor had any member of the Management Development Committee formerly served as an officer of the Company or any of its subsidiaries. See “Proposal 1 — Election of Directors”. During fiscal 2009,2010, none of our executive officers served on the board of directors or on the

     As provided in its charter, the Audit Committee selects our independent registered public accounting firm, reviews the scope of the annual audit and approves all audit and non-audit services permitted under applicable law to be performed by the independent registered public accounting firm. The Audit Committee has evaluated the performance of Grant Thornton LLP (“Grant Thornton”) and has selected them as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ended June 30, 2010.2011. Grant Thornton has served as our independent accountants since March 8, 2002. You are requested to ratify the Audit Committee’s appointment of Grant Thornton. Representatives of Grant Thornton are expected to be present at the annual meeting and will be given the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from shareholders present at the meeting.

     A majority of the votes cast at the annual meeting is required for ratification. However, by Nasdaq and SEC rules, selection of the Company’s independent registered public accounting firm is the direct responsibility of the Audit Committee. Therefore, if shareholders fail to ratify the selection, the Audit Committee will seek to understand the reasons for such failure and will take those views into account in this and future appointments. Even if the current selection is ratified by shareholders, the Audit Committee reserves to itself the right to appoint a different independent registered public accounting firm at any time during the fiscal year if the Audit Committee determines that such change would be in the best interests of the Company and its shareholders.

     Additional information regarding the Company’s independent registered public accounting firm can be found on page 26.

     Approval of the ratification of the Company’s independent auditors requires a majority of the votes cast on the matter. For purposes of determining the number of votes cast with respect to the ratification of the Company’s independent auditors, only those cast “for” or “against” are included, and abstentions and broker non-votes are not counted for this purpose.

     PROXIES WILL BE VOTED “FOR” THE RATIFICATION OF THE COMPANY’S INDEPENDENT AUDITORS UNLESS OTHERWISE INDICATED ON THE PROXY.

     The following table sets forth information with respect to beneficial ownership of the Common Stock by each person known by us to be the beneficial owner of more than five percent of our outstanding Common Stock. The number of shares reported is as of the dates indicated in the footnotes below. The percentage of class is based on 8,901,4638,988,233 shares of Common Stock outstanding on September 25, 2009.24, 2010. The information as to each person has been furnished by each such person.

     The following table sets forth information with respect to beneficial ownership of the Common Stock by each of our directors and director nominees, the persons named in the Summary Compensation Table and by all our directors and executive officers as a group as of September 25, 2009,24, 2010, unless otherwise indicated. The information as to each person has been furnished by such person and, except as where otherwise indicated, each person has sole voting power and sole investment power with respect to all shares beneficially owned by such person.

     Under the securities laws of the United States, our directors, executive (and certain other) officers, and any persons holding more than ten percent of the Common Stock are required to report their ownership of the Common Stock and any changes in that ownership to the SEC. Directors, officers and greater than ten percent shareholders are required by the SEC to furnish us with copies of all Section 16(a) reports they file. Specific due dates for these reports have been established and we are required to report in this proxy statement any failure to file by these dates during our last fiscal year. To our knowledge, all of these filing requirements were satisfied during our last fiscal year by our officers, directors and ten percent shareholders. In making this statement, we have relied solely on the written representations of our directors, officers and ten percent shareholders and copies of the reports that have been filed with the SEC.

     The executive officers listed below were appointed by the Board and serve in the capacities indicated. Executive officers are normally appointed annually by the Board and serve at the pleasure of the Board.

     The following table sets forth certain information as to compensation paid by us for services rendered in all capacities to the Company and its subsidiaries during fiscal 2010 and 2009 to (i) to person’s serving as our Chief Executive Officer, at any time during fiscals 2009 and 2008, (ii) our Chief Financial Officer and (iii) our executive officers (theas of June 30, 2010 (collectively, the “named executive officers” or “NEOs”). Please see below for additional narrative disclosure of the Company’s compensation philosophy, practices and fiscal 20092010 compensation decisions.

     The following narrative disclosure is intended to provide additional information and place in perspective the compensation information contained in the Summary Compensation Table that precedes this discussion and in the Outstanding Equity Awards at 2010 Fiscal Year-End Table that follows this discussion.

     Our executive compensation program consists of five components:

     Base Salary.The Management Development Committee recognizes the importance of a competitive compensation structure in retaining and attracting valuable senior executives. Executive salary levels are reviewed and established annually. The salaries received by our executives generally reflect their levels of responsibility, our profitability and other factors, such as assessments of individual performance and market practices.

     Our approach to NEO base salaries is to ensure that they are competitive so that they are effective in attracting and retaining a high quality executive team. Similarly, in designing our employee benefit programs and severance and change in control benefits, we strive to offer benefits consistent with the general practice of comparable companies.

     In fiscal 2009,2010, the Management Development Committee approved a 30.4%did not increase in Mr. Rittenour’sthe base salary as a result of a market practices study developed by Sullivan Cotter, the compensation consultant retained by the Committee.Harry T. Rittenour, our President and Chief Executive Officer, or our other executive officers. The size of the increase was based upon the Management Development Committee’s viewCommittee deferred consideration of the contributionincreases of Mr. Rittenour during the prior fiscal year and competitive market pay considerations. There were no base salary increases for the other NEOsuntil it had an opportunity to better evaluate progress in implementing our long-term business strategy approved earlier in fiscal 2009.2010.

     Annual Profit Sharing/Non-Equity Incentive Plan. Our executive officers are eligible for annual cash profit sharing incentive opportunities. Generally, at the beginning of each fiscal year, the Management Development Committee develops a profit sharing plan applicable to all team members, including the Chief Executive Officer of the Company, the other NEOs and our other executives.

     For fiscal 2009,2010, the Management Development Committee did not adopt any profit sharing plan.adopted the 2010 Annual Incentive Compensation Plan (the “2010 Annual Incentive Plan”), which applied to Mr. Rittenour, the other NEOs, our other executives and director-level employees, and the Fiscal Year 2010 Profit Sharing Plan, which applied to all team members of the Company, other than those included in the 2010 Annual Incentive Plan. Because our fiscal 2010 revenue was below the applicable revenue threshold, and we incurred an operating loss, no bonuses were payable for fiscal 2010 to Mr. Rittenour or the other executive officers in fiscal 2010 under these plans.

     No discretionary bonuses were paid to Mr. Rittenour or the other executive officers in fiscal 2009.2010.

     In the case of our annual profit sharing incentive, each of our team members, including the NEOs and other executives, havehas a set target percentage of their base salary that can be earned as an annual cash profit sharing incentive for achievement of Company-wide performance metrics.

     2010Fiscal 2011 Annual Incentive Plan

     For fiscal 2010,2011, the Management Development Committee adopted the 2010Fiscal 2011 Annual Incentive Compensation Plan (the “Annual“2011 Annual Incentive Plan”), which applies to Mr. Rittenour, the other NEOs, our other executives and director-level employees, and the Fiscal Year 20102011 Profit Sharing Plan, which applies to all team members of the Company, other than those included in the 2011 Annual Incentive Plan.

     Under the 20102011 Annual Incentive Plan, (the “Annual Incentive Plan”), the Company’s director-level team members, officers and named executive officers can earn annual incentive cash compensation as follows: seventy percent (70%) based upon performance against pre-established financial targets.targets; twenty percent (20%) based upon achievement of two individual performance criteria that are aligned with the Company’s strategic objectives; and the final ten percent (10%) of any bonus is at the discretion of the Management Development Committee. The financial targets and individual performance criteria include threshold, target and maximum

     After completion of fiscal 2011, the Management Development Committee will determine the extent to which the specified goals relating to the financial targets have been achieved and will determine the actual amounts to be paid.

     The Management Development Committee reserves the right, in its sole discretion and absolute discretion, to change the eligibility for participation under the Annual Incentive Plan, to revise, eliminate or otherwise modify any performance targets, to modify any participant’s target bonus, or otherwise to increase, decrease or eliminate any incentive payouts to any participant under the Annual Incentive Plan, regardless of the level of performance targets that have been achieved, including to provide for no incentive payout to a participant even though one or more performance targets have been achieved.

     No other stock grants were made to Mr. Rittenour, or the other executive officers or any other team member in fiscal 2009.2010.

     Options granted to Messrs. Rittenour, Hoefing, Eckhoff and LowryMr. Price in fiscal 20092010 become exercisable in four equal annual installments, beginning one year from theirthe date of initial grant, at an exercise price equal to the fair market value of the Common Stock on the date of theirthe initial grant. In addition, any portion of thesethe options that is not exercisable becomes exercisable immediately upon a Change in Control of the Company as described under “Compensation of Executive Officers — Potential Payments Upon Termination or Change in Control”.

     The NEOs have all entered into our standard executive agreement not to compete, restricting the executive’s right to compete with us for the longer of twelve months following the termination of employment or the period post-termination during which we are required to make payments to the executive, and standard employee proprietary information and inventions agreement, containing confidentiality provisions and a two-year post-termination restriction on soliciting our employees. We have the right to cease all further payments under the

program for the executive team. Further, the Management Development Committee does consider the amount of compensation expense required to be recorded in determining the size of stock option grants to the Chief Executive Officer and the aggregate grants made to the remainder of the executive team and team members generally.

     The following table provides information with respect to unexercised options held by the NEOs as of June 30, 2009.2010.

been employed at the end of the applicable bonus period, and continuation of Company-provided health, welfare and automobile benefits for one year or, if earlier, the date of death. Under the terms of Messrs. Eckhoff, Hoefing, Lowry and Lowry’sPrice’s severance agreements, in the event their employment is terminated without “Cause” (provided such termination constitutes a “separation from service” under Code Section 409A), they will be paid an amount of severance equal to six months of their current annual base salary, as in effect immediately prior to their termination, a prorated portion of any bonus they would have earned for the year of termination had they been employed at the end of the applicable bonus period, and continuation of Company-provided health, welfare and automobile benefits for six months or, if earlier, the date of death. All severance payments and benefits will be paid or provided over the period during which we are required to provide the benefit.

     The severance agreements also provide that, if the employment of our executive officers areis terminated for any reason other than death, disability or Cause (provided such termination constitutes a “separation from service” under Code Section 409A), or they resign for “Good Reason”, six months prior to or within two years after a “Change in Control”, in lieu of the severance described in the prior paragraph, Mr. Rittenour will be entitled to an amount of severance equal to two times his current annual base salary, as in effect immediately prior to his termination, a prorated portion of his target bonus for the year of termination, based on the number of days worked in the year of termination, continuation of Company-provided health benefits until Mr. Rittenour becomes eligible for Medicare benefits or, if earlier, the date of death, automobile benefits for one year or, if earlier, date of death, other welfare benefits for two years and continued coverage under director and officer liability insurance policies for six years, and Messrs. Eckhoff, Hoefing, Lowry and LowryPrice will be entitled to an amount of severance equal to one times their current annual base salary, as in effect immediately prior to their termination, a prorated portion of their target bonus for the year of termination, based on the number of days worked in the year of termination, continuation of Company-provided health, welfare and automobile benefits for one year or, if earlier, the date of death and continued coverage under director and officer liability insurance policies for six years. Base salary and bonus severance payments will be paid in a lump sum at the time of termination of employment and other benefits will be provided over the period during which we are required to provide the benefit. To the extent that any severance payments would not be exempt from Code Section 409A and the Executive is determined to be a “specified employee” as defined under Code Section 409A, then such payments will be suspended for six months from the date of the Executive’s termination of employment. Suspended payments will be paid in a lump-sum, plus interest at the prime rate, plus two percent, at the end of the suspension period. The special severance expires three years from the date of the severance agreement, except that such expiration date shall be extended for consecutive one year periods, unless, at least 180 days prior to the expiration date, we notify the executive in writing that we are not extending the term of these provisions.

     The NEOs have all entered into our standard executive agreement not to compete, restricting the executive’s right to compete with us for the longer of twelve months or the period in which we are required to make payments to the executive, and standard employee proprietary information and inventions agreement, containing confidentiality provisions and a two-year restriction on soliciting our employees. We have the right to cease all further payment under the NEOs severance agreements in the event that the NEO violates the executive non-competition agreement. The NEOs must sign a standard release to receive payments under the severance agreements, including standard non-disparagement provisions.

     Payments under the severance agreements, when aggregated with any other “golden parachute” amounts (defined under Code Section 280G as compensation that becomes payable or accelerated due to a Change in

Control of the Company or, if, in the event of a Change in Control, such options are not assumed by the person surviving the Change in Control or purchasing the assets in the Change in Control.

     “Change in Control” for purposes of the severance agreements, the 2004 Stock Plan and the 1992 Plan is generally defined as:

     To the extent the agreement or award under the 2004 Stock Plan is subject to Code Section 409A, the event shall not be considered a Change in Control unless it is also a change in ownership, effective control or in the ownership of a substantial portion of assets of the Company, within the meaning of Code Section 409A.

     “Cause” is generally defined as the executive’s:

in the Company’s Code of Ethics and are generally discouraged by the Company. To the extent any such transactions are proposed, they would be subject to approval by the Audit Committee of the Board of Directors in accordance with the Audit Committee’s charter, applicable law and the Nasdaq Marketplace Rules, which require that any such transactions required to be disclosed in our proxy statement be approved by a committee of independent directors of our Board of Directors.

     Shareholder proposals intended to be presented at the 20102011 annual meeting which are eligible for inclusion in our proxy statement for that meeting under Rule 14a-8 promulgated under the Exchange Act, must be received by the Secretary of the Company at 47827 Halyard Drive, Plymouth, MI 48170, no later than June 4, 20109, 2011 in order to be considered for inclusion in our proxy statement relating to that meeting. In order to curtail controversy as to the date on which a proposal was received by us, it is suggested that proposals be submitted by certified mail, return receipt requested.

     Shareholder proposals intended to be presented at the 20092011 annual meeting which are not eligible for inclusion in our proxy statement for that meeting under Rule 14a-8 are considered untimely under Rule 14a-5 promulgated under the Exchange Act unless received by the Secretary of the Company at the Company’s offices no later than August 23, 20102011 and we expect the persons named as proxies for the 20102011 annual meeting to use their discretionary voting authority, to the extent permitted by law, with respect to any proposal considered untimely at the 20102011 annual meeting.

     Shareholders desiring to recommend candidates for consideration and evaluation by the Nominating and Corporate Governance Committee for the 20102011 Annual Meeting should submit such recommendations in writing to the Nominating and Corporate Governance Committee, c/o Vice President, General Counsel and Secretary, Perceptron, Inc., 47827 Halyard Drive, Plymouth, MI 48170 no later than May 15, 2010.10, 2011.

     The recommendation should be accompanied by the following: (i) the name, address, e-mail address (if any), and telephone number of the shareholder, the number of shares of the Company’s Common Stock beneficially owned by the shareholder and proof of the shareholder’s beneficial ownership of the Company’s Common Stock by one of the means set forth in Rule 14a-8(b)(2) promulgated under the Exchange Act; (ii) the name, address, e-mail address (if any) and telephone number of the proposed nominee and the number of shares of the Company’s Common Stock beneficially owned by the nominee; (iii) a detailed description of the proposed nominee’s business, professional, public, academic, scientific or technological experience and other qualifications for Board membership, including the name and address of other businesses for which the proposed nominee has provided services, or for which he or she has served as a director, in the last five years, a description of the proposed nominee’s specific experience in such position and the proposed nominee’s academic achievements; (iv) a description of any potential conflicts between the interests of the Company and its shareholders and the proposed nominee; (v) a written agreement by the proposed nominee to serve as a member of the Company’s Board if nominated and elected; and (vi) a written representation by the shareholder and the proposed nominee that the proposed nominee is not an affiliate or affiliated party with respect to the shareholder. The General Counsel will forward any recommendations to the Nominating and Corporate Governance Committee. The nominating shareholder and proposed nominee may be requested to provide additional information regarding the shareholder or the proposed nominee and to attend one or more interviews, in each case, as requested by the Board or Nominating and Corporate Governance Committee.

     See “Corporate Governance — Board of Directors and Committees” for a description of the standards used by the Nominating and Corporate Governance Committee to evaluate candidates recommended by shareholders.

     At the date of this Proxy Statement, the Board is not aware of any matters to be presented for action at the Annual Meeting other than those described above. However, if any other matters requiring a shareholder vote properly come before the meeting, it is the intention of the persons named in the accompanying proxy to vote such proxy in accordance with their best judgment, to the extent permitted by law, on such matters.