SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
UNIFLEX, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) 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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials:
<PAGE>
/ / 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.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
[LOGO]
UNIFLEX, INC.
383 West John Street, Hicksville, NY 11802
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 23, 1998
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of UNIFLEX,
INC., a Delaware corporation (the "Company"), will be held at the American Stock
Exchange, 86 Trinity Place, 13th Floor, New York, New York 10006, on Tuesday,
June 23, 1998 at 10:00 A.M., for the following purposes:
1. To elect three members of the Board of Directors for the
ensuing three years; and
2. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Only stockholders of record at the close of business on May 12, 1998, will
be entitled to notice of and to vote at the Annual Meeting.
If you do not expect to attend the Annual Meeting, please sign and mail
promptly the enclosed proxy in order that your shares may be voted. A return
envelope is provided for your convenience.
By Order of the Board of Directors
HERBERT BARRY, Chairman
Dated: Hicksville, New York
May 22, 1998
<PAGE>
UNIFLEX, INC.
383 West John Street - Hicksville, NY 11802
--------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
June 23, 1998
--------------------------
This Proxy Statement is furnished to the stockholders of UNIFLEX, INC.
(the "Company"), in connection with the solicitation by the Board of Directors
of the Company of Proxies for the Annual Meeting of Stockholders to be held at
the American Stock Exchange, 86 Trinity Place, 13th Floor, New York, New York
10006, on Tuesday, June 23, 1998 at 10:00 A.M. At the Annual Meeting, the
stockholders will be asked to (1) elect three members of the Board of Directors
for the ensuing three years and (2) to consider and act upon such other business
as may properly come before the Annual Meeting or any adjournments thereof. This
Proxy Statement is being mailed on or about May 22, 1998.
Shares represented by Proxies, in the accompanying form of Proxy, which
are properly executed, duly returned and not revoked, will be voted in
accordance with the instructions contained therein. If no specification is
indicated on the Proxy, the shares represented thereby will be voted (i) for the
election of three members of the Board of Directors for the ensuing three years
(Robert K. Semel, Kurt Vetter and Steven Wolosky) and (ii) to consider and act
upon such other business as may properly come before the Annual Meeting or any
adjournments thereof. The execution of a Proxy will in no way affect a
stockholder's right to attend the Annual Meeting and vote in person. Any Proxies
executed and returned by a stockholder may be revoked at any time thereafter if
written notice of revocation is given to the Secretary of the Company prior to
the vote to be taken at the Annual Meeting, or by execution of a subsequent
Proxy which is presented to the Annual Meeting; or if the stockholder attends
the Annual Meeting and votes by ballot, except as to any matter or matters upon
which a vote shall have been cast pursuant to the authority conferred by such
Proxy prior to such revocation. Broker "non-votes" and the shares as to which a
stockholder abstains are included for purposes of determining whether a quorum
of shares is present at a meeting. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial
<PAGE>
owner. Broker "non-votes" are not included in the tabulation of the voting
results on the election of directors or issues requiring approval of a majority
of the votes cast and, therefore, do not have the effect of votes in opposition
in such tabulations.
All expenses in connection with this solicitation will be borne by the
Company. It is expected that solicitations will be made primarily by mail, but
regular employees or representatives of the Company may also solicit Proxies by
telephone, telegraph or in person, without additional compensation. The Company
will, upon request, reimburse brokerage houses and persons holding shares in the
names of their nominees for their reasonable expenses in sending solicitation
material to their principals.
VOTING SECURITIES
The voting securities of the Company outstanding on May 12, 1998 consisted
of 4,126,152 shares of common stock entitling the holders thereof to one vote
per share. Stockholders of record as at that date are entitled to notice of and
to vote at the Annual Meeting. A majority of the outstanding shares present in
person or by proxy is required for a quorum.
The following table sets forth the holdings as of May 12, 1998 of the
Directors of the Company, the Chief Executive Officer and the four other most
highly compensated Executive Officers of the Company, of all Directors and
Executive Officers as a group, and of those persons who, to the knowledge of
management, owned beneficially more than 5% of the outstanding shares of common
stock outstanding which such shares represented on that date.
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<PAGE>
VOTING SECURITY OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Name and Address Amount and Nature
of of Beneficial Percent
Beneficial Owner Ownership(1) of Class(2)
- --------------------------------------------------------------------------------
Herbert Barry 470,490(3) 11.4%
383 W. John Street
Hicksville, NY 11802
Warner J. Heuman 463,270(4,9) 11.1%
383 W. John Street
Hicksville, NY 11802
Erich Vetter 302,999(9) 7.2%
383 W. John Street
Hicksville, NY 11802
Robert K. Semel 433,950(5) 10.5%
383 W. John Street
Hicksville, NY 11802
Kurt Vetter 152,680(6,9) 3.7%
383 W. John Street
Hicksville, NY 11802
Martin Brownstein 201,256(9) 4.9%
383 W. John Street
Hicksville, NY 11802
Martin Gelerman 8,500(9) *
445 Broad Hollow Road
Melville, NY 11747
Steven Wolosky 10,500(9) *
505 Park Avenue
New York, New York 10022
Lee Cantor 79,098(7) 1.9%
383 W. John Street
Hicksville, NY 11802
CMNY Capital, L.P. 305,158(8) 7.4%
135 East 57th Street
New York, NY 10022
All Directors and Executive 2,122,743(9) 49.8%
Officers as a group (9
persons)
- --------------------
* Less than 1%
(1) Except as noted, shares are owned individually and of record.
-4-
<PAGE>
(2) Calculations assume that all stock options held by directors and executive
officers and exercisable within 60 days after May 12, 1998 have been
exercised.
(3) Includes 34,914 shares held individually and of record by Betty Lou Barry,
Herbert Barry's wife.
(4) Includes 60,000 shares owned individually and of record by Elaine Heuman,
Warner J. Heuman's wife, and 26,490 shares owned by his children.
(5) Includes 150 shares held individually and of record by Fran Semel, Robert
K. Semel's wife, as custodian for her son.
(6) Includes 9,300 shares held individually and of record by Stephanie Vetter,
Kurt Vetter's wife.
(7) Includes 51,282 shares owned jointly with Melissa Cantor, Lee Cantor's
wife, and 7,344 shares held individually and of record by Melissa Cantor.
(8) Includes 54,912 shares owned by CMCO, Inc., an affiliate of CMNY Capital,
L.P. and 2,946 shares owned by Robert Davidoff. Mr. Davidoff is a general
partner of CMNY Capital, L.P.
(9) Includes shares issuable upon the exercise of currently exercisable stock
options as follows: Warner J. Heuman - 60,000 shares; Kurt Vetter - 300
shares; Erich Vetter - 60,000 shares; Martin Gelerman - 4,500 shares;
Martin Brownstein - 10,000 shares; Steven Wolosky - 4,500 shares; Lee
Cantor - 300 shares.
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<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Article Sixth, Paragraph 1 of the Certificate of Incorporation of the
Company, and Article II, Section 2 of its Amended and Restated By-Laws provide
for the organization of the Board of Directors into three classes. All Directors
are chosen for a full three-year term to succeed those whose terms expire. It is
therefore proposed that three Directors be elected to serve until the Annual
Meeting of Stockholders to be held in 2001 and until their successors are
elected and qualified.
If no contrary instructions are indicated, it is intended that the
accompanying Proxies will be voted for the election of Robert K. Semel, Kurt
Vetter and Steven Wolosky, the three nominees. The Company does not expect that
any of the nominees listed will be unavailable for election, but if that should
occur before the Annual Meeting, the Proxies may be voted in favor of the
remaining nominees and may also be voted for a substitute nominee or nominees.
The following table sets forth the ages, occupations, terms of office and family
relationships of the Directors and Executive Officers of the Company.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY*
<TABLE>
<CAPTION>
Nature of Any
Term of Family
Present and Office as Relationship With
Prior Positions Director Other Directors or
Name Age With Company Expires Executive Officers
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Herbert Barry 61 Chairman of the 2000 None
Board, Chief
Executive Officer
since January
1995; President
1971 to January
1995; Director
since 1968.
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Nature of Any
Term of Family
Present and Office as Relationship With
Prior Positions Director Other Directors or
Name Age With Company Expires Executive Officers
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert K. Semel 60 President, Chief 1998 None
Operating Officer
since January
1995; Executive
Vice President
December 1990 to
January 1995;
Secretary since
April 1993;
Director since
December 1990.
Mr. Semel is also
a director of
Pentech
International,
Inc.
Kurt Vetter 54 First Vice 1998 Erich Vetter-father
President -
Engineering since
January 1995;
Vice President-
Engineering 1971
to January 1995;
Director since
1970.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Nature of Any
Term of Family
Present and Office as Relationship With
Prior Positions Director Other Directors or
Name Age With Company Expires Executive Officers
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Steven Wolosky 42 Director since 1998 None
February 1994.
For more than the
past five years,
Mr. Wolosky has
been a partner of
Olshan Grundman
Frome &
Rosenzweig LLP,
counsel to the
Company. Mr.
Wolosky is also a
director of Total
Entertainment
Restaurant Corp.,
a Nasdaq Stock
Market company
and Assistant
Secretary of WHX
Corporation, a
New York Stock
Exchange listed
company.
Warner J. Heuman 73 Chairman Emeritus 2000 Lee Cantor -
since January son-in-law
1995; Chairman of
the Board, 1971
to January 1995;
Director since
1968.
Erich Vetter 75 Secretary, 1975 1999 Kurt Vetter - son
to April 1993;
Director since
1968.
Martin Brownstein 56 Senior Vice 1999 None
President since
January 1995;
Vice President-
Advertising
Specialty Sales
1977 to January
1995; Director
since June 1991.
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Nature of Any
Term of Family
Present and Office as Relationship With
Prior Positions Director Other Directors or
Name Age With Company Expires Executive Officers
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Martin Gelerman 61 Director since 2000 None
August 1993.
Since February
1997, Mr.
Gelerman has been
President, Human
Resource
Consulting Group,
and Director,
Corporate
Development, of
Lloyd Creative
Staffing Inc.
From 1990 to
October 1996, Mr.
Gelerman was
Senior Vice
President of The
Olsten Corporation.
Lee Cantor 38 Vice President - (1) Warner J. Heuman -
Sales since father-in-law.
January 1995;
Vice President -
Advertising
Specialty Sales,
January 1993 to
January 1995;
Sales Manager,
1988 to 1995.
</TABLE>
- -------------------
* The Directors of the Company, by virtue of certain family relationships
and aggregate stockholdings, may be considered control persons of the
Company.
(1) Mr. Cantor is not a director of the Company.
None of the Directors or Executive Officers has been involved in material
legal proceedings during the last five years in which he has been a party
adverse to or has had a material interest adverse to the Company.
The Company has a standing Audit Committee, currently
comprised of Erich Vetter, Martin Gelerman and Steven Wolosky (with
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<PAGE>
Warner J. Heuman serving as an alternate). The Audit Committee met on three
occasions during the fiscal year ended January 31, 1998. The Audit Committee
reviews, analyzes and makes recommendations to the Board of Directors with
respect to the Company's compensation and accounting policies, controls and
statements and coordinates with the Company's independent public accountants.
The Company does not have a standing Nominating Committee or a committee which
serves nominating functions nor does the Company have a standing Compensation
Committee.
The Board of Directors held three meetings during the fiscal year ended
January 31, 1998. From time to time, the members of the Board of Directors act
by unanimous written consent pursuant to the laws of the State of Delaware.
The Board of Directors recommends a vote FOR this Proposal.
ADDITIONAL INFORMATION
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") of the Company (Mr. Herbert Barry, the Chairman of the Board and Chief
Executive Officer of the Company) and the four most highly compensated executive
officers of the Company other than the CEO whose salary and bonus exceeded
$100,000 with respect to the fiscal year ended January 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
-------------------- --------------
All Other
Name and Other Annual Options Compensation
Principal Position YEAR SALARY($) BONUS($) Compensation($)(1) (#) ($)(2)
- ----------------------------- ---- --------- -------- ------------------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Herbert Barry 1998 605,800 71,961 -- -- 1,900
Chairman of the Board, 1997 599,000 160,155 -- -- 1,900
Chief Executive Officer 1996 383,000 62,000 -- -- 1,788
Robert K. Semel 1998 300,000 175,136 54,361 -- 1,900
President, 1997 275,000 237,465 55,895 -- 1,900
Chief Operating Officer 1996 250,000 162,650 49,593 -- 1,788
Martin Brownstein 1998 462,500 12,500 -- -- 1,900
Senior Vice President- 1997 380,000 12,000 -- 15,000 1,900
Advertising Specialty 1996 457,000 11,000 -- -- 1,788
Sales
Lee Cantor 1998 217,000 10,000 -- -- 1,900
Vice President- 1997 253,000 9,188 -- -- 1,900
Sales 1996 225,500 8,188 -- -- 1,788
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
-------------------- --------------
All Other
Name and Other Annual Options Compensation
Principal Position YEAR SALARY($) BONUS($) Compensation($)(1) (#) ($)(2)
- ----------------------------- ---- --------- -------- ------------------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Kurt Vetter 1998 169,435 18,000 -- -- 1,900
First Vice President- 1997 150,697 17,500 -- -- 1,900
Engineering 1996 143,700 16,500 -- -- 1,788
</TABLE>
- -------------------
(1) Consists of payments of $24,161, $21,195 and $14,293 relating to
automobile and insurance expenses in 1998, 1997 and 1996, respectively,
and the discharge of indebtedness relating to the purchase of the
Company's common stock of $30,200, $34,700 and $35,300 in 1998, 1997 and
1996, respectively. See "Certain Relationships and Related Transactions."
(2) Amounts shown reflect Company contributions to 401(k) Plan.
-11-
<PAGE>
The following table sets forth certain information regarding stock option
exercises by each of the Executive Officers named in the Summary Compensation
Table during the fiscal year ended January 31, 1998 and unexercised stock
options held by such Executive Officers as of January 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Options at Options at
January 31, January 31,
1998(#) 1998 ($)(1)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#)(2) Realized($) Unexercisable Unexercisable
- ---- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Herbert Barry 15,000 81,800 0/0 0/0
Erich Vetter 9,000 49,080 60,000 352,500/0
Robert K. Semel 90,000 505,800 15,000/0 88,125/0
Kurt Vetter -- -- 300/0 1763/0
Martin Brownstein 15,000 87,613 10,000/5,000 58,750/29,375
Warren J. Heuman 9,000 51,330 60,000/0 352,500/0
Lee Cantor 12,000 73,690 300/0 1,763/0
</TABLE>
- -----------------
(1) On January 31, 1998, the last reported sales price of the Company's Common
Stock as reported by the American Stock Exchange was $5.8750 per share.
(2) Adjusted to give effect to a 50% stock dividend paid in October 1996.
-12-
<PAGE>
BOARD OF DIRECTORS COMPENSATION
The Company pays each non-employee Director a fee of $500 for each Board
of Directors' meeting attended.
LONG-TERM INCENTIVE AND PENSION PLANS.
The Company does not have any long-term incentive or defined benefit
pension plans.
STOCK OPTION PLANS
The Company adopted the 1993 Stock Option Plan (the "Plan"), which
provides for the granting of options to purchase up to 360,000 shares of the
Company's common stock to employees of the Company. The exercise price for
incentive stock options can be no less than the fair market value of the
Company's common stock at the date of grant with the exception of an employee
who, prior to the granting of the option, owns stock representing more than 10%
of the voting rights for which the exercise price can be no less than 110% of
the fair market value of the Company's common stock at the date of grant. The
Plan is administered by the Stock Option Committee (the "Committee") of the
Board of Directors. The Committee determines when the options are exercisable
and the term of the option, up to ten years.
Pursuant to separate stock option agreements, the Company has granted to
eighteen officers and directors options to purchase a total of 1,122,000 shares
of the Company's common stock at prices ranging from $.33 to $.92 per share.
Such options expire at various dates through December 31, 2000. Options to
purchase 126,000 shares remain unexercised at January 31, 1998.
In 1996 the Company adopted the Outside Directors' Stock Option Plan (the
"Outside Directors Plan"), which was subsequently approved by the stockholders.
There are 60,000 shares of the Company's common stock reserved for issuance
under the Outside Directors Plan. Pursuant to the Outside Directors Plan, each
current Outside Director (Messrs. Gelerman and Wolosky) initially received an
option to purchase 4,500 shares of Common Stock and as long as shares of Common
Stock remain available for the grant of options under the Outside Directors'
Plan, each year on the date of the Company's annual meeting of stockholders,
each Outside Director shall be granted an option to purchase 4,500 shares of
Common Stock. Options granted under the Outside Directors' Plan are exercisable
in three equal installments beginning on the first anniversary of the date of
grant and subject to such terms and conditions as are determined by the Board of
Directors at grant.
The exercise price of each option is the fair market value for each share
of Common Stock subject to an option. Fair Market Value means the closing sales
price of the Common Stock as quoted on the
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<PAGE>
American Stock Exchange on the date of grant of any option. The term of each
option is 10 years from the date of grant. The Outside Directors' Plan also
provides for the earlier termination of options in the event an Outside
Director's membership on the Board of Directors terminates.
EMPLOYMENT AGREEMENTS
Mr. Herbert Barry is employed under an employment agreement expiring
January 31, 2001 which provides for Mr. Barry to be paid (i) a current annual
base salary of $122,000 with yearly increases of $12,000, (ii) a sum equal to 1%
of all of the Company's sales subject to certain limitations and (iii) regular
commissions computed in accordance with the Company's usual practice on all
sales which he generates. In addition, Mr. Barry receives a profit incentive
cash bonus based upon the consolidated pre-tax profits of the Company. The
employment agreement is subject to two two year renewals at the end of the
current term or any renewal thereof at the option of Mr. Barry. The employment
agreement also provides that in the event of a Change of Control (as such term
is defined in the employment agreement) that results in his termination, Mr.
Barry is entitled to receive a severance payment equal to the product of 2.99
times the average total annual compensation of any kind paid to Mr. Barry by the
Company during the Company's last five full fiscal years prior to the date of
termination of employment.
Mr. Robert K. Semel is employed under an employment agreement expiring
January 31, 2001 which provides for (i) annual compensation of $300,000 until
January 31, 1998 and provides for increases in annual compensation in each of
the remaining years of his employment agreement, (ii) a profit incentive bonus
based upon the consolidated pre-tax profits of the Company and (iii) a sales
incentive bonus based upon the consolidated net sales of the Company, subject to
certain limitations, in excess of $30 million (other than net sales for which
Mr. Herbert Barry is not entitled to an override commission) of the Company. The
employment agreement is subject to two two year renewals at the end of the
current term or any renewal thereof at the option of Mr. Semel. The employment
agreement also provides that in the event of a Change of Control (as such term
is defined in the employment agreement) that results in his termination, Mr.
Semel is entitled to receive a severance payment equal to the product of 2.99
times the average total annual compensation of any kind paid to Mr. Semel by the
Company during the Company's last five full fiscal years prior to the date of
termination of employment.
The Company has an employment agreement with Martin Brownstein that
expired on January 31, 1998 and was renewed for a period of one year. The
employment agreement initially provided for Mr. Brownstein to be paid (a)
commissions at the Company's standard commission rates then in effect on all
sales of the Company's
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<PAGE>
products which he generates plus (b) commissions (the "Override Commissions")
equal to 1% of the Company's sales to companies listed in the Advertising
Specialty Institute Directory up to and including $1,500,000 and 1 1/4% of all
such sales in excess of $1,500,000. Upon the renewal of Mr. Brownstein's
employment agreement, the Override Commissions provision was eliminated.
The Company has an employment agreement with Lee Cantor that expired on
October 31, 1997 but was automatically renewed for a one year period. The
employment agreement is subject to an automatic one year renewal at the end of
the current term or any renewal thereof unless either the Company or Mr. Cantor
gives a termination notice at least 90 days prior to the expiration of the then
current term. Pursuant to the provisions of the employment agreement, Mr. Cantor
is paid a salary of $475 per week and commissions at the Company's standard
commission rates then in effect on all sales of the Company's products which he
generates.
The Company has an employment agreement with Kurt Vetter that expired on
January 31, 1997, but which has been extended for a period of one year,
providing for Mr. Vetter to be paid $160,000 during fiscal 1998.
In addition, the Company has entered into deferred compensation, and
amended and restated employment, consulting and non-competition agreements with
each of Warner J. Heuman and Erich Vetter dated as of April 28, 1991, which
provide that after termination of the employment agreement, each shall be
engaged as a consultant for a period of seven years thereafter. Mr. Erich Vetter
retired in February 1993 and Mr. Warner Heuman retired in January 1995. In
addition, each shall be entitled to deferred compensation benefits for the
balance of his lifetime, and certain death and other fringe benefits. Each of
Messrs. Heuman and Vetter has received an aggregate payment of $101,800 for each
of 1998, 1997 and 1996 pursuant to such agreements. See "Certain Relationships
and Related Transactions."
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
Other than Messrs. Gelerman and Wolosky, all of the members of the
Board of Directors were officers or former officers of the Company during the
fiscal year ended January 31, 1998 and participated in the decisions of the
Company's Board of Directors concerning executive officer compensation. However,
each Director abstained from decisions concerning his own compensation.
-15-
<PAGE>
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
General
The Board of Directors determines the cash and other incentive
compensation, if any, to be paid to the Company's Executive Officers and key
employees.
Compensation Philosophy
The Board of Directors' executive compensation philosophy is to base
management's pay, in part, on the achievement of the Company's annual and
long-term performance goals by (a) setting levels of compensation designed to
attract and hold superior executives in a competitive business environment, (b)
providing incentive compensation that varies directly with the Company's
financial performance and individual initiative and achievement, (c) linking
compensation to the Company's annual and long-term performance, (d) evaluating
the competitiveness of executive compensation programs based upon information
drawn from a variety of sources, and (e) establishing salary levels and bonuses
intended to be consistent with competitive practice and level of responsibility,
with salary increases and bonuses reflecting competitive trends, the overall
financial performance of the Company, the performance of the individual
executive and the contractual arrangements that may be in effect with the
individual executive. Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), prohibits a publicly held corporation, such as the
Company, from claiming a deduction on its federal income tax return for
compensation in excess of $1 million paid for a given fiscal year to the chief
executive officer (or person acting in that capacity) at the close of the
corporation's fiscal year and the four most highly compensated officers of the
corporation, other than the chief executive officer, at the end of the
corporation's fiscal year. The $1 million compensation deduction limitation does
not apply to "performance-based compensation." The Company has not yet
established a policy with regard to Section 162(m) of the Code since the Company
has not paid compensation in excess of $1 million per annum to any employee.
Salaries
Salaries for the Company's Executive Officers are determined by the terms
of their employment contracts which are based upon the factors described in the
"Compensation Philosophy" paragraph above. Annual salary adjustments are
determined consistent with the Company's compensation policy, by the terms of
the employment contracts and by evaluating the competitive marketplace, the
performance of the Company, the performance of the executive particularly with
respect to the ability to manage growth of the Company or to generate sales of
the Company's products, length of
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<PAGE>
service to the Company and any increased responsibilities assumed
by the executive.
Annual Bonuses and Incentive Compensation
The Company from time to time considers the payment of bonuses to its
Executive Officers although no formal plan currently exists. Bonuses would be
determined based, first, upon the level of achievement by the Company of its
strategic and operating goals and, second, upon the level of personal
achievement by participants. The achievement of personal goals includes the
actual performance of the Company for which the Executive Officer has
responsibility as compared to the planned performance thereof, the ability to
manage and motivate reporting employees and the achievement of assigned
projects. Bonuses are determined annually after the close of each fiscal year.
In connection with increased net sales and stockholders' equity for the fiscal
year ended January 31, 1998, the Company awarded bonuses to Messrs. Brownstein,
Cantor and Kurt Vetter in the amounts of $12,500, $10,000 and $18,000,
respectively. Pursuant to the terms of his employment agreement, Mr. Semel was
awarded a bonus of $175,136.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Barry's compensation during the fiscal year ended January 31, 1998 was
based upon the terms of his employment agreement which is weighted heavily
toward performance criteria. Mr. Barry received a base salary of $122,000 for
the fiscal year ended January 31, 1998 and his total compensation was a result
of the increase in sales of the Company during the fiscal year. Net sales for
the fiscal year ended January 31, 1998 were Company records. Net sales were
$37,999,000, compared to $34,466,000 for the fiscal year ended January 31, 1997,
an increase of 10.3%. Net income was $1,496,000 compared to $1,917,000 for the
year ended January 3, 1997, a decrease of 21.9%. The Company's financial success
and Mr. Barry's compensation is attributable to Mr. Barry's leadership in
providing strategic direction to the Company, in positioning the Company to take
advantage of emerging growth opportunities, in developing and maintaining an
effective management team for the Company and in communicating and implementing
a strong corporate culture and vision within and outside the Company.
STOCK OPTIONS
No Executive Officer named in the Summary Compensation Table was awarded
stock options during the fiscal year ended January 31, 1998. It is the
philosophy of the Board of Directors that stock options should be awarded only
to key employees of the Company to promote long-term interests between such
employees and the Company's stockholders and to assist in the retention of such
employees.
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<PAGE>
BOARD OF DIRECTORS: Herbert Barry
Martin Brownstein
Martin Gelerman
Warner J. Heuman
Robert K. Semel
Erich Vetter
Kurt Vetter
Steven Wolosky
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<PAGE>
PERFORMANCE GRAPH
The following graph compares, for each of the fiscal years indicated, the
yearly percentage change in the Company's cumulative total stockholder return on
its common stock with the cumulative total return of (a) the AMEX Market Index,
a broad equity market index, and (b) the Media General ("MG") Group Index, a
plastic packaging materials industry index, in each case assuming reinvestment
of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN AMONG UNIFLEX, INC., INDUSTRY INDEX
AND BROAD MARKET
- -------------------------------FISCAL YEAR ENDING-------------------------------
COMPANY 1993 1994 1995 1996 1997 1998
UNIFLEX INC 100 221.06 247.37 384.22 489.24 370.87
INDUSTRY INDEX 100 115.32 101.55 127.07 198.83 236.78
BROAD MARKET 100 119.40 104.21 133.57 143.76 163.98
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EMPLOYEE BENEFITS
The Company adopted a qualified profit-sharing plan in January, 1976 and
all of its employees (other than employees who are subject to a union or
collective bargaining agreement) are eligible to participate after completing
six months of continuous service and attaining age 21. The Company is not
required to make any minimum contributions and any contributions will be from
current or accumulated earnings and will not exceed the maximum amount
deductible by the Company under applicable provisions of the Internal Revenue
Code.
Participants may elect (but are not required) to contribute up to 10% of
their compensation. In general, the benefits payable to a participant from
contributions by the Company become fully vested at the earliest of (1) the
participant's normal retirement date, (2) the participant's earlier retirement
date if he has completed ten years of participation in the plan, or (3) the
participant's completion of fifteen years of service beginning on the effective
date of the plan; provided that partial vesting of benefits begins upon
completion of five years of service beginning on the effective date of the plan.
Effective February 1, 1990, the Company established a defined contribution
benefit plan pursuant to Section 401(k) of the Internal Revenue Code (the
"401(k) Plan"). Full-time employees who have completed twelve months of service
may contribute a percentage of their salaries to the 401(k) Plan, subject to
certain limits. The Company will match 20 percent of the employee's contribution
up to six percent of the employee's salary. The Company's contributions vest at
the rate of 20 percent per year of employment. During the fiscal year ended
January 31, 1998, the Company contributed $45,102 to the 401(k) Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with
the Securities and Exchange Commission ("SEC"). Such officers, directors and 10%
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons, the Company
believes that, during the fiscal year ended January 31, 1998, that there was
compliance with all Section 16(a) filing requirements applicable to its
officers, directors and 10% stockholders.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into deferred compensation and amended and
restated employment, consulting and non-competition agreements with each of
Warner J. Heuman and Erich Vetter dated as of April 28, 1991, which provide that
after termination of the employment agreement, each shall be engaged as a
consultant for a period of seven years thereafter. Mr. Erich Vetter retired in
February 1993 and Mr. Warner Heuman retired in January 1995. In addition, each
shall be entitled to deferred compensation benefits for the balance of his
lifetime, and certain death and other fringe benefits. Each of Messrs. Heuman
and Vetter has received an aggregate payment of $101,800 for 1998, 1997 and
1996, respectively, pursuant to such agreements. See "Executive
Compensation--Employment Agreements."
During the year ended January 31, 1998, the Company, in private
transactions, repurchased and retired 85,000, 10,000 and 4,004 shares of its
common stock from Kurt Vetter, Erich Vetter and Warner Heuman, respectively,
officers and/or directors of the Company for purchase prices of $423,300,
$82,500 and $28,028, respectively. The purchase price of the stock represented a
17% discount from market prices at the time of purchase. The aggregate purchase
price was partially financed by bank borrowings against the Company's credit
agreement.
In 1990, pursuant to an agreement (the "Officer Stock Purchase
Agreement") between the Company and Robert K. Semel, Mr. Semel
purchased common stock in exchange for cash and a note payable in
the principal amount of $198,000 (the "Stock Purchase Note")
bearing interest at 8.66% per annum. In accordance with the
Officer Stock Purchase Agreement, since Mr. Semel has fulfilled the
terms of his employment contract, the seven annual installments
required by the Stock Purchase Note have been forgiven annually by
the Company as additional compensation to Mr. Semel. At January
31, 1998, there was no Stock Purchase Note receivable balance. See
"Executive Compensation."
Steven Wolosky, a director of the Company, is a member of Olshan Grundman
Frome & Rosenzweig LLP, which firm has been retained by the Company as general
counsel during the last fiscal year. Fees received from the Company by such firm
during the last fiscal year did not exceed 5% of such firm's or the Company's
gross revenues.
STOCKHOLDER PROPOSALS
To the extent required by law, any stockholder proposal intended for
presentation at next year's annual stockholders' meeting must be received at the
Company's principal executive offices prior to January 20, 1999.
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<PAGE>
OTHER MATTERS
So far as it is known, there is no business other than that described
above to be presented for action by the stockholders at the forthcoming Annual
Meeting, but it is intended that Proxies will be voted upon any other matters
and proposals that may legally come before the Annual Meeting, or any
adjustments thereof, in accordance with the discretion of the persons named
therein.
The Annual Report for the fiscal year ended January 31, 1998, including
financial statements, is being mailed herewith. If, for any reason, you did not
receive your copy of the Annual Report, please advise the Company and another
will be sent to you.
By Order of the Board of Directors
HERBERT BARRY, Chairman
Dated: Hicksville, New York
May 22, 1998
The Company will furnish, without charge, a copy of its Annual Report on
Form 10-K (without exhibits) for the fiscal year ended January 31, 1998 (as
filed with the Securities and Exchange Commission) to stockholders of record as
of May 12, 1998 who make written request to Robert Gugliotta, Vice
President-Finance and Treasurer, Uniflex, Inc., 383 West John Street,
Hicksville, New York 11802.
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<PAGE>
UNIFLEX, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR ANNUAL
MEETING ON JUNE 23, 1998
The undersigned hereby appoints Barry H. Barry and Robert K. Semel and either of
them, with power in each to vote in the absence of the other, as the Proxy
Agents for the undersigned, with full power of attorney and substitution and
with all the powers the undersigned would possess if personally present, to vote
all the Common Stock of the undersigned in Uniflex, Inc. at the Annual Meeting
of Stockholders scheduled to be held on June 23, 1998 at 10:00 A.M. and at all
adjournments thereof.
(1) Election of three Directors as recommended in Management's Proxy Statement:
Nominees: Robert K. Semel, Kurt Vetter and Steven Wolosky
/ / VOTE FOR the nominees listed, except as marked to the contrary above (if
any). (To withhold your vote for any individual nominee strike a line
through the nominee's name set forth above.)
/ / VOTE WITHHELD for all nominees.
(2) In their discretion, upon such other business as may properly come before
the Annual Meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN. IF NO SUCH INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY
THE PROXY WILL BE VOTED FOR ALL NOMINEES IN PROPOSAL 1. DISCRETIONARY AUTHORITY
IS GRANTED THE PROXY AGENT AS TO OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL
MEETING. MANAGEMENT KNOWS OF NO SUCH OTHER MATTERS. RECEIPT OF THE UNIFLEX, INC.
PROXY STATEMENT IS HEREBY ACKNOWLEDGED. ALL PROXIES HERETOFORE SIGNED BY THE
UNDERSIGNED ARE HEREBY REVOKED.
Date: This ________ Day of _______ 1998
------------------------------
Signature(s) of Stockholder(s)
------------------------------
Please sign exactly as name
appears at left. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such. Corporations are
requested to sign their name by
their President or authorized
officer. All joint owners
should sign.
THIS PROXY SHOULD BE RETURNED TO:
UNIFLEX, INC. - P.O. BOX 9004 - 383 WEST JOHN ST., HICKSVILLE, NEW YORK 11802
