UNITED MERCHANTS AND MANUFACTURERS, INC.
1650 Palisade Avenue
Teaneck, New Jersey 07666
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of
Stockholders of United Merchants and Manufacturers, Inc. will be
held at the Company's offices, 1650 Palisade Avenue, Teaneck, New
Jersey, on Thursday, November 16, 1995, at 2:00 P.M., for the
following purposes:
1. To elect a Board of seven Directors to serve for the
ensuing year and until their successors are elected and
qualified.
2. To elect two directors to serve as the representatives
of the 10% Cumulative Preferred Stock, Series 1, until the next
annual meeting of the stockholders;
3. To consider and act upon the selection of KPMG Peat
Marwick LLP as auditors for the fiscal year ending June 30, 1996.
4. To transact such other business as may be properly
brought before the meeting or any adjournment thereof.
Holders of record of the Common Stock of the Company at the
close of business on September 22, 1995 will be entitled to vote
at the meeting or any adjournment thereof with respect to all
proposals other than Proposal 2. The holders of record of the
10% Cumulative Preferred Stock, Series 1 at the close of business
on September 22, 1995 will be entitled to vote at the meeting or
any adjournment thereof only with respect to proposal 2.
Edward D. Taffet
Secretary
Dated: October 16, 1995
<PAGE>
UNITED MERCHANTS AND MANUFACTURERS, INC.
1650 Palisade Avenue
Teaneck, New Jersey 07666
PROXY STATEMENT
This proxy statement and the accompanying proxy card are
being furnished in connection with the solicitation of proxies by
the Board of Directors of United Merchants and Manufacturers,
Inc., a Delaware corporation (the "Company"), for the Annual
Meeting of Stockholders to be held on Thursday, November 16,
1995, at 2:00 P.M., at the Company's offices, 1650 Palisade
Avenue, Teaneck, New Jersey and any adjournment or postponement
thereof.
Whether or not you plan to attend the Annual Meeting, please
sign and return the enclosed proxy in the accompanying
postage-paid, addressed envelope. Each proxy executed and
returned by a stockholder may be revoked at any time thereafter
except as to any matter or matters upon which, prior to such
revocation, a vote will have been cast pursuant to the authority
conferred by such proxy. If you attend the meeting you may, if
you wish, vote in person, thereby cancelling any proxy previously
given. Alternatively, you may revoke your proxy by notifying the
Secretary of the Company in writing prior to the Annual Meeting
or by signing a later-dated proxy. The Board of Directors of the
Company is not soliciting proxies with respect to the election of
directors by the holders of Cumulative Preferred Stock.
Only holders of record of the Common Stock of the Company at
the close of business on September 22, 1995 will be entitled to
vote with respect to all proposals other than Proposal 2 as set
forth on the attached Notice of Annual Meeting. The holders of
10% Cumulative Preferred Stock, Series 1 ("Cumulative Preferred
Stock") at the close of business on September 22, 1995 will be
entitled to vote at the meeting or any adjournment thereof only
with respect to proposal 2 as set forth on the attached Notice of
Annual Meeting. As of that date, there were outstanding and
entitled to vote 17,845,055 shares of Common Stock, the only
class of voting securities of the Company. Each share of Common
Stock is entitled to one vote on all matters properly brought
before the meeting other than Proposal 2. The presence in person
or by proxy of the holders of a majority in interest of the
Common Stock shall constitute a quorum for matters to be voted on
by the Common Stock.
The mailing address of the Company is 1650 Palisade Avenue,
Teaneck, New Jersey 07666.
<PAGE>
All properly executed proxies delivered pursuant to this
solicitation and not revoked will be voted at the Annual Meeting
in accordance with the directions given. Regarding the election
of directors under Proposal 1, in voting by proxy, holders of the
Common Stock may vote in favor of all nominees, withhold their
votes as to all nominees or withhold their votes as to specific
nominees. With respect to the ratification of the appointment of
KPMG Peat Marwick LLP as independent auditors, holders of the
Common Stock may vote in favor of the proposal, against the
proposal or may abstain from voting. Holders of the Common Stock
should specify their choices on the enclosed form of proxy. If
no specific instructions are given with respect to the matters to
be acted upon, the shares represented by a signed proxy will be
voted FOR the election of all nominees and FOR the proposal to
ratify the appointment of KPMG Peat Marwick LLP as independent
auditors. The affirmative vote of the majority of common shares
present, or represented, and entitled to vote at the meeting is
required for approval of all matters under Proposals 3 and 4.
The Company's By-laws provide that directors of the Company shall
be elected (Proposal 1) by a plurality of votes cast at the
Annual Meeting. Thus, abstentions and broker non-votes will not
be included in vote totals and will have no effect on the outcome
of the vote.
Pursuant to the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation"), holders of
Cumulative Preferred Stock may elect two directors to the
Company's Board of Directors if at any time the equivalent of six
or more full quarterly dividends (whether or not consecutive)
payable of the Cumulative Preferred Stock is past due. Due to
the Company's failure to pay dividends on the Cumulative
Preferred Stock for at least six consecutive quarters, on the
terms and subject to the conditions set forth in the Certificate
of Incorporation, holders of Cumulative Preferred Stock are
entitled to elect two directors at the Annual Meeting. See
"Election of Directors by Holders of Cumulative Preferred Stock."
This proxy statement and the accompanying proxy card are
first being mailed by the Company on or about October 16, 1995 to
the Company's stockholders. The cost of solicitation of proxies
will be borne by the Company.
The Annual Report to Stockholders of the Company for the
fiscal year ended June 30, 1995, including financial statements
as of June 30, 1995 and for the year then ended, is being mailed
herewith to each stockholder of record.
2
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Principal Holders of Voting Securities
The following are the only persons known to the Company who
beneficially owned, as of September 22, 1995, more than five
percent of the Common Stock of the Company.
Name and address Number of Percent
of beneficial owner Shares of Class (2)
- ------------------- ------ ------------
Uzi Ruskin 1,165,519 (1) 6.53
1650 Palisade Avenue, Teaneck, N.J. (including
07666 and Monzoral, Inc., 538 Next 1,000,000 shares
Day Hill Drive, Englewood, N.J. 07631 owned by Monzoral,
Inc.)
Kingsbridge Holdings Ltd. 1,263,700 (1) 7.08
36 Glaernisch Strasse,
Zurich 8002, Switzerland
Saturn Corporation 2.27
36 Glaernisch Strasse,
Zurich 8002, Switzerland
Buckingham Investment Ltd. 4,077,047 (1) 22.85
48 Beethovenstrasse
Zurich 8002, Switzerland
- ---------------
(1) According to Amendment No. 12 to Schedule l3D of the
group comprising Uzi Ruskin (Chairman, President, Chief
Executive Officer and a Director of the Company),
Monzoral, Inc. ("Monzoral"), Menachem Atzmon, Saturn
Corporation ("Saturn"), Kingsbridge Holdings Ltd.
("Kingsbridge"), and Buckingham Investment Ltd.
("Buckingham"), dated August 16, l991, on that date
Monzoral beneficially owned and had the sole voting and
dispositive power with respect to 1,000,000 shares, or
5.60%, of the Company's Common Stock, Mr. Ruskin
beneficially owned and had the sole voting and
dispositive power with respect to 1,165,519 shares, or
6.53%, of the Company's Common Stock (including the
1,000,000 shares owned by Monzoral, which is a
corporation wholly owned by Mr. Ruskin), Kingsbridge
beneficially owned and had sole voting and dispositive
power with respect to 1,263,700 shares, or 7.08%, of the
Company's Common Stock, Saturn beneficially owned and
had the sole voting and dispositive power with respect
to 405,500 shares, or 2.27% of the Company's Common
Stock (although, as the sole common stockholder of
Kingsbridge, Saturn may be deemed to beneficially own
3
<PAGE>
the shares owned by Kingsbridge as well), and Buckingham
beneficially owned and had the sole voting and
dispositive power with respect to 4,077,047 shares, or
22.85% of the Company's Common Stock. As the sole
director of Saturn, Kingsbridge and Buckingham, Mr.
Atzmon may be deemed to have beneficial ownership and
voting and dispositive power with respect to the shares
owned by Saturn, Kingsbridge and Buckingham. Such
Amendment No. 12 also states that pursuant to Rule
13d-5(b)(1) under the Securities Exchange Act of 1934,
as amended, each of the members of such group is deemed
to have beneficial ownership, for purposes of Section
13(d) and 13(g) of the Exchange Act, of all Company
equity securities owned by the other members of the
group.
The Company has no independent knowledge of the completeness
or accuracy of the information contained in the aforesaid
document.
(2) Based on 17,845,055 shares outstanding as of September
22, 1995. There are no options outstanding as of
September 22, 1995.
Cumulative Preferred Stock
Pursuant to the Certificate of Incorporation, holders of
Cumulative Preferred Stock may elect two directors to the
Company's Board of Directors if at any time the equivalent of six
or more full quarterly dividends (whether or not consecutive)
payable of the Cumulative Preferred Stock is past due. Due to
the Company's failure to pay dividends on the Cumulative
Preferred Stock since its issuance, on the terms and subject to
the conditions set forth in the Certificate of Incorporation,
holders of Cumulative Preferred Stock are entitled to elect two
directors at the annual meeting. See "Election of Directors by
Holders of Cumulative Preferred Stock."
At the Record Date there were issued and outstanding 450,000
shares of Cumulative Preferred Stock. The presence in person or
by proxy of the holders of a majority of the total number of
shares of Cumulative Preferred Stock then outstanding shall
constitute a quorum for matters to be voted on by the holders of
the Cumulative Preferred Stock then outstanding at the Annual
Meeting. In the event that there does not exist a quorum of the
holders of Cumulative Preferred Stock at the Annual Meeting,
action will be taken by the holders of Common Stock with respect
to all proposals other than Proposal 2 set forth on the Notice of
Annual Meeting attached hereto, and the holders of a majority of
the shares of Cumulative Preferred Stock present, in person or by
proxy, at the meeting may adjourn the meeting until such time as
a quorum for their election of directors shall exist or until
such time as it is reasonably determined by the Secretary that a
quorum will not be represented at such meeting.
4
<PAGE>
At the Annual Meeting every holder of Cumulative Preferred
Stock entitled to vote has the right to vote, in person or by
proxy, the number of shares owned, for two directors from among
those persons who are nominated by the holders of Cumulative
Preferred Stock at the Annual Meeting. According to the
Certificate of Incorporation, provided there is a quorum of the
holders of Cumulative Preferred Stock, the two nominees receiving
the votes of the holders of a majority of the Cumulative
Preferred Stock present in person or by proxy at the meeting will
be elected and any directors so elected shall serve until their
successor shall have been duly elected and qualified or until the
right of the holders of Cumulative Preferred Stock to vote as a
class in the election of directors shall have been divested as
provided in the Certificate of Incorporation.
As of the Record Date the Company knows of no beneficial
owners of more than five percent of the outstanding shares of
Cumulative Preferred Stock other than Foothill Capital Corp., c/o
Security Pacific National Trust Co., 2 Rector Street, New York,
New York 10006 which is the record holder of 95,185 shares or
21.15% of the Company's Cumulative Preferred Stock.
I. ELECTION OF DIRECTORS BY HOLDERS OF COMMON STOCK
Seven directors are to be elected at the meeting. It is the
intention of the persons named in the accompanying proxy to vote
each proxy executed and returned by a stockholder for the
election of each of the persons listed below as a director of the
Company unless authority to do so is withheld on such proxy. All
directors will serve until the next Annual Meeting of
Stockholders and until his or her successor has been elected and
qualified.
Should any candidate for director become unavailable for any
reason, such proxies will be voted for the alternate candidate,
if any, chosen by the Board of Directors. All the nominees are
currently directors of the Company. The nominees for director
have consented to serve if elected and the Company has no reason
to believe that any of the nominees will be unable to serve.
The following information concerning the nominees has been
furnished by the nominees. Unless otherwise indicated, such
persons have held the positions described below for more than
five years.
5
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Shares of Common
Stock of the
Company
Beneficially
Owned as of
Sept. 22, 1995
(3) (4)
Principal Occupation Director -------------------
Name Age or Employment Since Number %
---- --- -------------------- -------- --------- -----
S. Arnold Hickox.... 74 Consultant. Formerly 1984 600 *
President of Manufac-
turers Hanover Commer-
cial Corporation
Sidney O. Margolis (1) 69 Executive Vice Presi- 1983 105 *
(Administration) and
Assistant Secretary
of the Company
Robert D. Mathews... 67 Consultant (2) 1993 119 *
Judith A. Nadzick (1) 47 Executive Vice Presi- 1987 500 *
dent, Chief Financial
Officer and Assistant
Secretary of the Company
Uzi Ruskin (1)...... 50 Chairman, President, 1980 1,165,519 (5) 6.53
Chief Executive and
Chief Operating Officer
of the Company (2)
Robert J. Swartz (1) 69 Financial Consultant (2) 1991 0 -
Hardof Wolf......... 59 Private Investor 1991 0 -
* Less than 0.01%
6
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- ----------------
(1) Messrs. Margolis, Ruskin and Swartz and Ms. Nadzick are
also directors of Victoria Creations, Inc., a
majority-owned, publicly-held subsidiary of the
Company. Mr. Swartz is also a director of Standard
Motor Products, Inc. and Bed Bath & Beyond, Inc.
(2) During the last five years: Mr. Mathews was an
Executive Vice President of the Company until March
1993 and served as a Director of the Company until
August 1991; Mr. Ruskin also served as Chairman of
Victoria Creations, Inc., a majority-owned,
publicly-held subsidiary of the Company from April 1987
to November 1989 and since October 1993; Mr. Swartz was
a Senior Partner at KPMG Peat Marwick until March 1991,
at which time he retired.
(3) As used in this table and elsewhere in this proxy
statement "beneficial ownership" means the sole or
shared power to vote or direct the voting of shares of
Common Stock and/or the sole or shared investment power
with respect thereto (i.e. the power to dispose of or
direct the disposition of such shares). The shares
owned and the percentage ownership as shown in this
table reflect the 17,845,055 shares outstanding as of
September 22, 1995. There are no options outstanding
as of September 22, 1995.
(4) Except as otherwise indicated in these footnotes, such
persons hold sole voting and investment power with
respect to the shares shown in this column.
(5) Included in the number of shares listed as beneficially
owned by Mr. Ruskin are 165,519 shares owned directly
and of record by Mr. Ruskin, and 1,000,000 shares
owned by Monzoral, Inc., a corporation wholly-owned by
Mr. Ruskin (Mr. Ruskin has sole power to vote and
invest these shares). As of September 22, 1995, the
shares beneficially owned by Mr. Ruskin constituted
6.53% of the outstanding shares of the Common Stock of
the Company. Such number of shares does not include,
and Mr. Ruskin disclaims any beneficial ownership of,
5,746,247 shares owned by Saturn, Kingsbridge and
Buckingham which, as a member of a "group" (as such
term is used in Rule l3d-5 under the Exchange Act)
which includes such companies, Mr. Ruskin may, for
purposes of Sections l3(d) and l3(g) of the Exchange
Act, be deemed to beneficially own. See "Principal
Holders of Voting Securities" above.
7
<PAGE>
As of September 22, 1995, the Company's officers and
directors as a group (9 persons) beneficially owned 1,166,843
shares (6.54% of the shares outstanding based on 17,845,055
shares outstanding as of September 22, 1995) of the Common Stock
of the Company.
The Board of Directors has designated from among its members
an Executive Committee, which consists of Messrs. Ruskin
(Chairman), Hickox and Swartz. During the Company's fiscal year
ended June 30, 1995, the Executive Committee held no meetings.
The Executive Committee reviews corporate policy, business and
organizational matters for the purpose of advising and making
recommendations to the Board. The Board of Directors has also
designated from among its members an Audit Committee which
consists of Messrs. Hickox (Chairman) and Swartz. During the
fiscal year ended June 30, 1995, the Audit Committee held four
(4) meetings. The Audit Committee has the duty and authority to
oversee the auditing and accounting functions and procedures of
the Company, and to report and make recommendations to the Board
of Directors with respect to such matters. The Board of
Directors has also designated from among its members a
Compensation Committee which consists of Messrs. Swartz
(Chairman), Hickox and Ruskin. During the fiscal year ended June
30, 1995, the Compensation Committee held no meetings. The Board
of Directors has not designated a standing Nominating Committee
or any other committee performing similar functions.
During the fiscal year ended June 30, 1995, there were eight
(8) meetings of the Board of Directors. Each director attended
at least 75% of the aggregate of all meetings of the Board and
committees of the Board on which he or she served.
Compliance With Section 16(a) of The Exchange Act
Section 16(a) of the Securities Exchange Act of 1934
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 and changes in
ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by SEC regulations 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, the Company believes that during fiscal 1995 all
filing requirements were complied with by officers, directors and
greater than ten percent beneficial owners.
8
<PAGE>
Executive Compensation
The following table sets forth all compensation earned by
the Company's chief executive officer and each of the Company's
four other most highly compensated executive officers for
services rendered in all capacities to the Company for the years
indicated (1).
Summary Compensation Table
Year
Name and Ended
Principal Position June 30 Salary Bonus
------------------ ------- ------ -----
Uzi Ruskin (2) 1995 $500,000 $ 0
Chairman, President, Chief 1994 500,000 0
Executive Officer and Chief 1993 500,000 0
Operating Officer
Sidney O. Margolis (3) 1995 250,000 50,000
Executive Vice President 1994 250,000 0
(Administration) and 1993 250,000 0
Assistant Secretary
Judith A. Nadzick (4) 1995 205,000 50,000
Executive Vice President, 1994 205,000 0
Chief Financial Officer and 1993 205,000 0
Assistant Secretary
Norman R. Forson (5) 1995 185,000 45,000
Senior Vice President 1994 185,000 0
and Comptroller 1993 185,000 0
Edward D. Taffet (6) 1995 155,000 55,000
Senior Vice President, 1994 155,000 0
General Counsel and 1993 125,000 0
Secretary
- ------------------
(1) The Company does not have a Long-Term Incentive Plan,
therefore, no long-term compensation was earned or awarded
during the years shown in the table.
(2) Mr. Ruskin and the Company entered into an employment
agreement in July 1982 which, as amended, expires December
31, 1997, pursuant to which he serves as Chairman,
President, Chief Executive and Chief Operating Officer of
the Company at an annual rate, effective January 1986, of
$500,000.
9
<PAGE>
(3) Mr. Margolis and the Company entered into an employment
agreement in March 1985 which, as amended, expires December
31, 1995, pursuant to which he serves as Executive Vice
President (Administration) and Assistant Secretary of the
Company at an annual rate, effective June 1989, of $250,000.
(4) Ms. Nadzick and the Company entered into an employment
agreement in March 1985 which, as amended, expires
December 31, 1995, pursuant to which she serves as Executive
Vice President, Chief Financial Officer and Assistant
Secretary of the Company at an annual rate, effective
January 1992, of $205,000.
(5) Mr. Forson and the Company entered into an agreement in
January 1993 whereby he serves as Senior Vice President and
Comptroller of the Company at an annual rate of $185,000.
In the event the Company terminates his employment, other
than for cause, he will receive, as severance, one month's
salary and benefits for each year of employment with the
Company.
(6) Mr. Taffet and the Company entered into an employment
agreement in January 1992 which, as amended, expires
December 31, 1995, pursuant to which he serves as Senior
Vice President, General Counsel and Secretary of the Company
at an annual rate of $155,000.
The employment agreements of Messrs. Ruskin, Margolis and
Taffet and Ms. Nadzick contain certain provisions which will not
become operative unless any person acquires beneficial ownership
of more than fifty (50%) percent of the outstanding shares of
voting capital stock of the Company ("change in control"). In
such event the employee shall have six (6) months from such
change in control to terminate his or her employment with the
Company, in which case the Company shall pay to the employee a
lump sum amount equal to the salary then remaining to be paid
pursuant to his or her employment contract for the unexpired term
thereof. (The payments referred to above are limited by the
terms of the agreements in accordance with the provisions of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended.)
Stock Options/SAR's
The Company has never granted stock appreciation rights.
The Company has never adjusted or amended the exercise price of a
stock option. During the year ended June 30, 1995, no stock
options were granted nor were any stock options exercised. At
June 30, 1995, no stock options were outstanding.
10
<PAGE>
Pension Plan Table
The following table sets forth the estimated annual benefits
payable on retirement to employees in the indicated remuneration and
years of service classifications under the Company's pension plan:
Average of Last Ten
Years' Earnings (1)
Prior to Retirement Total of Years of Credited Service
- ------------------- --------------------------------------
10 20 30 35
-------- -------- -------- --------
$100,000 $ 9,793 $ 19,587 $ 29,380 $ 34,277
150,000 15,418 30,833 46,255 53,964
200,000 21,043 42,087 63,130 73,652
250,000 26,668 53,337 80,005 93,339
300,000 32,229 64,587 96,880 112,957
350,000 37,918 75,836 113,755 120,000 (2)
- ------------
(1) Subject to the compensation limitation of Section 401(e)(17) of
the Internal Revenue Code.
(2) As of June 30, 1995, the maximum annual pension pursuant to the
terms of the Plan and the Employees Retirement Income Security
Act of 1974, as amended, is $120,000.
The Company has a defined benefit pension plan which is
non-contributory. Each of the individuals named in the above table is
a participant in the plan. The amounts expensed for the plan on
account of individual participants are not and cannot readily be
separately or individually calculated by the regular independent
actuaries for the plan, and are accordingly omitted from the foregoing
table. During the Company's 1995 fiscal year, the Company accrued
$1,586,000 as pension expense with regard to its pension plan.
Generally, benefits are computed based on 0.563% of the first $25,920
(for age 65 in 1995) plus 1.125% of the balance of the average of the
last ten years' earnings prior to retirement multiplied by the number
of years of credited service (maximum of 35 years), with payments for
life (100 months certain). The compensation taken into account under
the plan can not exceed a maximum amount established each year,
adjusted for changes in cost of living. The maximum amount for 1995
(effective July 1, 1995) is $150,000. As of June 30, 1995, the
approximate credited service under the plan for Mr. Ruskin was 15
years; for Mr. Margolis was 34 years; for Ms. Nadzick was 12 years;
for Mr. Forson was 9 years and for Mr. Taffet was 10 years.
11
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Compensation of Directors
Each director of the Company, who is not an employee of the
Company, receives an annual fee of $15,000 for serving on the Board
plus $600 for each Board meeting attended. In addition, Mr. Hickox
receives $10,000 a year as Chairman of the Audit Committee plus $500
for each meeting of that committee attended. Mr. Swartz, as
Chairman of the Compensation Committee, receives $750 for each
meeting of that committee attended. Other committee members receive
$500 for each committee meeting attended. Directors who are
employees of the Company receive no additional compensation for
serving on the Board or committees thereof.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee of the Board of
Directors of the Company are Mr. Robert Swartz, Chairman, and Mr. S.
Arnold Hickox, each of whom is a non-employee director. Mr. Uzi
Ruskin, Chairman, President and Chief Executive Officer and Chief
Operating Officer of the Company, is also a member of the Committee.
Messrs. Ruskin and Swartz are directors and serve on the audit and
compensation committees of Victoria Creations, Inc., the Company's
majority-owned subsidiary. See also "Transactions with and
Indebtedness of Management." The Committee is free from
interlocking or other relationships that might be considered a
conflict of interest.
Report of Board Compensation Committee
on Executive Compensation
The Compensation Committee's policy is to design compensation
packages that will attract and retain key executives for the Company
and that will motivate those employees to improve corporate
performance and returns to stockholders. In designing compensation
packages, the Committee takes into consideration, among other
factors, compensation levels and practices of competitive companies
in similar business sectors and of general industry as applicable.
The compensation packages also recognize individual contributions
and achievements as well as business results.
The salary for Mr. Ruskin, Chief Executive Officer of the
Company, was established by contract January 1, 1986 based on
compensation levels and practices of competitive companies in
similar businesses.
Salaries for executive officers are determined periodically by
evaluating the performance of the individuals reviewed and their
contribution to the performance of the Company, their
responsibilities and compensation practices at other companies.
Financial results as well as appropriate non-financial measures are
considered.
by: Compensation Committee of the Board of Directors
Robert Swartz, Chairman S. Arnold Hickox Uzi Ruskin
12
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Performance Graph
The following provides a comparison with the stated indices
of the yearly percentage change in the Company's cumulative total
stockholder return on its common stock for a five year period
ended June 30, 1995.
Stockholder value to base
year 1990 as of June 30 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
UM&M 100% 77% 65% 31% 31% 23%
S&P 500 100% 107% 122% 138% 140% 177%
Peer Group 100% 109% 103% 124% 139% 140%
Transactions with and Indebtedness of Management
The Company entered into a Stock Purchase Agreement (the
"Purchase Agreement"), dated as of August 18, 1982, with
Monzoral, N.V., predecessor to Monzoral, Inc. ("Monzoral"), a
corporation wholly owned by Mr. Ruskin, pursuant to which the
Company agreed to sell to Monzoral one million shares (the
"Shares") of Common Stock at a price of $5.00 per share for an
aggregate purchase price of $5,000,000, $4,000,000 payable with
notes of Monzoral bearing interest, on the unpaid principal
amount, equal to 70% of the average investment yield for the most
recent auction of United States Treasury Bills with maturities of
52 weeks. (On June 1, 1995, the rate for such bills was 5.54% a
year.) Interest is payable at the time of principal payments.
The purchase price for the Shares was equal to the closing price
of the Common Stock of the Company on the New York Stock Exchange
on August 17, 1982. The Purchase Agreement was approved by the
Company's shareholders on November 12, 1982. On August 19, 1992,
the Board of Directors of the Company approved an amendment to
the Purchase Agreement, extending the maturity dates of the
aforementioned notes to fifteen (15) years after the date of each
respective note.
The Purchase Agreement required that Monzoral purchase the
Shares in four annual installments of 250,000 shares commencing
on July 1, 1983. At each purchase, Monzoral paid the Company a
cash amount equal to $1.00 times the number of Shares purchased
and delivered to the Company its note in an amount equal to $4.00
times the number of Shares purchased. Each note is secured by
the Shares purchased, with Shares to be released from pledge to
the extent the note is paid. It is not expected that Monzoral's
net worth will materially exceed the value of the Shares
purchased. On May 16, 1983, Monzoral purchased the first
installment of 250,000 shares, on March 28, 1984, Monzoral
13
<PAGE>
purchased the second installment of 250,000 shares, on May 7,
1985, Monzoral purchased the third installment of 250,000 shares
and on March 10, 1986, Monzoral purchased the fourth installment
of 250,000 shares. Pursuant to the aforementioned amendment to
the Purchase Agreement, Monzoral's notes are due fifteen (15)
years after the date of each respective purchase. As of June 30,
1995, Monzoral's indebtedness to the Company under the notes was
$4,000,000 principal and $1,873,000 accrued interest.
The Purchase Agreement, as amended, also provides that upon
the termination of Mr. Ruskin's employment after a change in
control (as defined above) of the Company, Monzoral may elect to
sell to the Company any or all of the Shares it purchased. Such
sale would be for an amount in cash per Share equal to the
greater of (i) the highest price per share paid by the person
acquiring control, or (ii) the mean between the high and low
selling prices of such stock on the New York Stock Exchange
Composite Tape on the date of termination.
II. ELECTION OF DIRECTORS BY HOLDERS OF
CUMULATIVE PREFERRED STOCK
At the meeting, two directors are to be elected to the
Company's Board of Directors by the holders of the Cumulative
Preferred Stock, voting as a class, as a result of the fact that
the Company has not declared or paid dividends on the Cumulative
Preferred Stock since its issuance. The Certificate of
Incorporation permits the holders of Cumulative Preferred Stock
to elect two directors to serve for a term expiring (subject to
the earlier payment, or declaration and setting aside for
payment, of all past due dividends on all Cumulative Preferred
Stock) at the next annual meeting of stockholders.
In recognition of the role of these two new directors as
representatives of the holders of the Cumulative Preferred Stock,
the Board of Directors believes it to be in the best interests of
those holders for the Board not to nominate, recommend or suggest
possible choices for the two new director positions, and for the
holders of the Cumulative Preferred Stock to act independently.
Accordingly, the Board of Directors of the Company has not
nominated persons to stand for election at the Annual Meeting as
representatives of the holders of the Cumulative Preferred Stock
on the Board of Directors.
THE BOARD OF DIRECTORS HAS NOT NOMINATED ANYONE FOR ELECTION
AS A DIRECTOR TO THE POSITIONS ON THE BOARD OF DIRECTORS THAT MAY
BE FILLED BY THE HOLDERS OF CUMULATIVE PREFERRED STOCK. THE
BOARD OF DIRECTORS IS NOT SOLICITING PROXIES FOR THE ELECTION OF
THESE TWO DIRECTORS.
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Nominations for these two directorships will be taken at the
meeting, from holders of Cumulative Preferred Stock who are
entitled to vote thereat. Prior to the Annual Meeting, any
holder of Cumulative Preferred Stock may, upon complying with the
applicable federal regulations governing proxy solicitations,
solicit proxies for the election of individuals who will be
nominated at the Annual Meeting for either or both of the two
directors.
To the knowledge of the Company no holder of Cumulative
Preferred Stock has solicited proxies or intends to solicit
proxies for the election of the two directors to be nominated by
the holders of the Cumulative Preferred Stock at the Annual
Meeting. Written nominations received by the Secretary at the
Annual Meeting must contain the type of information about the
nominee that is required to be disclosed in solicitations for
proxies for elections of directors pursuant to Regulation 14A of
the Securities and Exchange Commission (the "SEC"), as well as
the name of the nominating stockholder and the class and number
of shares of the Company which are beneficially owned by the
stockholder.
At the Annual Meeting every holder of Cumulative Preferred
Stock entitled to vote has the right to vote, in person or by
proxy, the number of shares owned, for two directors from among
those directors which may be nominated at the Annual Meeting.
According to the Certificate of Incorporation, provided there is
a quorum of the holders of Cumulative Preferred Stock, the two
nominees receiving the votes of the holders of a majority of the
Cumulative Preferred Stock present in person or by proxy at the
meeting will be elected. As provided in the Certificate of
Incorporation, the presence in person or by proxy of the holders
of a majority of the total number of shares of Cumulative
Preferred Stock then outstanding shall constitute a quorum for
any action to be voted on by the holders of the Cumulative
Preferred Stock at the Annual Meeting. In the event that there
does not exist a quorum of the holders of Cumulative Preferred
Stock at the Annual Meeting, action will be taken by the holders
of Common Stock with respect to all proposals other than Proposal
2 set forth on the Notice of Annual Meeting attached hereto, and
the holders of a majority of the shares of Cumulative Preferred
Stock present at the meeting may adjourn the meeting until such
time as a quorum for the election of directors shall exist or
until such time as it is reasonably determined by the Secretary
that a quorum will not be represented at such meeting.
The right to elect directors will remain vested until all
dividends on the Cumulative Preferred Stock have been paid, or
declared and set apart for payment, at which time: (i) the right
shall terminate (subject to revesting in the case of any
subsequent default); (ii) the term of the directors then in
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office elected by the holders of the outstanding Cumulative
Preferred Stock as a class shall terminate; and (iii) the number
of directors constituting the Board of Directors of the Company
shall be reduced by two. Any director to be elected by the
holders of Cumulative Preferred Stock shall be required to agree,
prior to such director's election to office, to resign upon any
termination of the right of the holders of Cumulative Preferred
Stock to vote as a class for directors.
III. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as
independent auditors for the Company for the current fiscal year.
The stockholders are requested to signify their approval or
disapproval of the selection.
The Board of Directors Recommends a Vote "FOR" Approval of
the Selection of KPMG Peat Marwick LLP as the Company's Auditors
for the Current Fiscal Year.
Representatives of KPMG Peat Marwick LLP are expected to be
present at the Annual Meeting and will have the opportunity to
make a statement and to respond to appropriate questions.
As auditors of the Company, KPMG Peat Marwick LLP provide
professional services in connection with its audit function that
include the examination of the Company's consolidated financial
statements, reviews of filings with the Securities and Exchange
Commission, actuarial services, examinations of financial
statements of employee retirement plans and consultation with
respect to accounting and financial reporting matters.
Mr. Swartz, who has been a director of the Company since June
1991, was a Senior Partner at KPMG Peat Marwick until March 1991,
at which time he retired.
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IV. OTHER MATTERS
Management does not intend to bring any business before the
Annual Meeting other than as set forth above nor does it know of
any business that will be presented by others for action by
stockholders at the meeting. However, if any other business
shall properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote said
proxy in accordance with their judgment on such matters.
Stockholder Proposals
Any stockholder proposal intended to be presented at the
next Annual Meeting should be sent to the Secretary of the
Company at 1650 Palisade Avenue, Teaneck, New Jersey 07666, and
must be received on or before June 1, 1996 to be eligible for
inclusion in the Company's proxy statement and form of proxy
relating to that meeting.
The above notice and proxy statement are being sent by order
of the Board of Directors.
Edward D. Taffet,
Secretary
Dated: October 16, 1995
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