On May 19, 2008, the Compensation Committee of CyberOptics Corporation approved and Dr. Steven K. Case, the Chairman, Kathleen P. Iverson, the Chief Executive Officer and President, and Jeffrey Bertelsen, the Chief Financial Officer signed, severance pay agreements. The agreements provide for severance payments to the executive if the executive is terminated without cause, or the executive resigns for good reason, within two years after a change in control of CyberOptics. For such purposes, a change in control is defined as a change requiring disclosure under the proxy rules in federal securities laws, an acquisition by a person or group of more than 40% of the voting shares of CyberOptics, a change in a majority of the directors of CyberOptics other than by succession, an acquisition through merger in which CyberOptics is not the surviving corporation, or a purchase of substantially all of the assets of CyberOptics.

Under the agreements, Dr. Case and Ms. Iverson would be entitled to a payment equal to twice the average compensation they had received during the three years prior to the change in control, and Mr. Bertelsen would be entitled to six months of such average compensation. The payments are subject to the limitation that they not cause any “excess parachute payment” as defined in Section 280G of the Internal Revenue Code, as amended. Consistent with Section 409A of the Code, the agreements provide that the payments would be made on the first day of the seventh month following termination of employment.

Ms. Iverson’s agreement also incorporates provisions of her existing offer letter obligating CyberOptics to pay her one year’s salary in the event she is terminated by CyberOptics without cause at any time other that during such two year period after a change in control.

The annual meeting of shareholders of CyberOptics Corporation was held at 3:00 p.m. on Monday, May 19, 2008. Shareholders holding 7,886,742 shares, or approximately 94% of the outstanding shares, were represented at the meeting by proxy or in person. Matters submitted at the meeting for vote by the shareholders were as follows:

The following nominees were elected to serve as members of the Board of Directors until the annual meeting in 2009 or until such time as a successor may be elected: