UNIQUE MOBILITY, INC.
425 Corporate Circle
Golden, Colorado 80401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 20, 1996
The annual meeting of shareholders of Unique Mobility, Inc. will be held on
March 20, 1996 at 10:00 a.m., Denver Time at the Hyatt Regency Denver,1750
Welton Street, Denver, Colorado 80202 for the following purposes:
1. To elect a Board of six (6) directors to serve for the ensuing year and
thereafter until their successors are duly elected and qualified.
2. To consider and vote upon a proposal to ratify the appointment of KPMG
Peat Marwick LLP to act as independent auditors of the Company for the
fiscal year ending October 31, 1996.
3. To transact such other business as may properly come before the
meeting.
The record date for the Annual Meeting of Shareholders has been fixed at January
29, 1996. Only shareholders of record at the close of business on that date
will be entitled to notice of and to vote at the meeting.
By order of the Board of Directors
February 2, 1996 "Elaine J. England"
Elaine J. England, Secretary
YOUR VOTE IS IMPORTANT. All shareholders, whether or not they expect to attend
the Annual Meeting, are requested to complete, date, sign and mail the enclosed
proxy, which is solicited by the Board of Directors. The enclosed envelope may
be used for that purpose. If you attend the meeting, you may vote in person
even though you have given a proxy.
<PAGE>
PROXY STATEMENT
UNIQUE MOBILITY, INC.
425 Corporate Circle
Golden, Colorado 80401
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 20, 1996
This proxy statement is being mailed on or about February 6, 1996 to the
shareholders of Unique Mobility, Inc. in connection with the solicitation by the
Board of Directors of the enclosed form of proxy for the Annual Meeting of
Shareholders to be held on March 20, 1996. The last Annual Meeting of
Shareholders was held on February 20, 1995.
If the enclosed proxy is properly signed and returned to the Company, the shares
represented by the proxy will be voted at the meeting. If a shareholder
indicates in his proxy a choice with respect to any matter to be voted upon, the
shares will be voted in accordance with the shareholder's choice. If no choice
is indicated, the shares will be voted "for" each of the proposals. A
shareholder giving a proxy may revoke it at any time before it is voted by
giving written notice to the Secretary of the Company, by executing a proxy
bearing a later date or by attending the meeting and voting in person.
PERSONS MAKING THE SOLICITATION
This proxy is solicited on behalf of the Board of Directors of the Company. The
solicitation will be made predominantly by mail. The expense of such
solicitation will be borne by the Company and will include reimbursement paid to
brokerage firms and others for their expenses in forwarding solicitation
material regarding the meeting to beneficial owners. Further solicitation of
proxies may be made by telephone or oral communication with some shareholders
of the Company following the original solicitation. All such further
solicitation will be made by regular employees of the Company, who will not be
additionally compensated therefor, or by the Company's transfer agent, in which
case the cost, which is not expected to exceed $1,000, will be borne by the
Company.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders of record at the close of business on January 29, 1996, will be
entitled to vote at the meeting. As of that date there were 10,716,172 shares
of the Company's $.01 par value common stock outstanding, each share being
entitled to one vote. The Company has no other classes of voting securities.
The Company's articles of incorporation provide that one-third of the
outstanding shares of the common stock entitled to vote, represented in person
or by proxy, shall constitute a quorum at any shareholders' meeting. Each
proposal contained herein to be voted upon at the meeting shall be approved if
the votes cast in favor of the proposal exceed the votes cast opposing the
proposal. Cumulative voting is not allowed in the election of directors
or for any other purposes. In the election of directors, that number of
candidates equaling the number of directors to be elected, having the highest
number of votes cast in favor of their election, are elected to the Board of
Directors.
<PAGE>
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals except the election of directors and will be counted as present for
purposes of determining the existence of a quorum regarding the item on which
the abstention is noted. Abstentions on the proposals other than election of
directors to be voted on at the meeting will have no effect. Under the rules
of the American Stock Exchange (AMEX), brokers who hold shares in street name
have the authority to vote on certain items, including the election of
directors, when they have not received instructions from beneficial owners.
With respect to other proposals, AMEX rules provide that no broker may vote
shares held for beneficial owners without specific instructions from such
beneficial owners. Under applicable Colorado law, a broker non-vote will have
no effect on the outcome of the matters to be voted on at the meeting.
ELECTION OF DIRECTORS
Pursuant to the bylaws of the Company, the Board of Directors shall consist of
not fewer than three directors. The Board of Directors currently consists of
six members. The Board of Directors has set the number of directors at six and
has nominated six candidates to stand for election to the Board of Directors.
Proxies may not be voted for more than six persons. The Board of Directors is
not classified, and each director serves for a term of one year and thereafter
until his successor is duly elected and qualified.
At the Annual Meeting, the shareholders will elect six members to the Board of
Directors. In the absence of instructions to the contrary, the proxy holders
will vote the shares represented by proxy in favor of the nominees listed below.
The Company expects each of the nominees listed below to be able to serve as a
director. If any nominee should become unavailable, however, it is intended
that the proxy holders will vote for a substitute designated by management.
The following table contains information concerning the members of the Board of
Directors of the Company who are standing for election at this meeting:
<PAGE>
Officer or
Position with Director
Name Age the Company Since Business Experience (1)
Ray A. Chairman of the Board 1981 President from 1991 through
Geddes 63 and Chief Executive 1995, Chairman of the Board
Officer; Member of of Directors and Chief
Executive Committee Executive Officer since
and Compensation and 1984.
Benefits Committee
Michel A. 48 Director and Member of 1995 Finance Director; Special
Bell Compensation and Projects Alcan Aluminium
Benefits Committee and Limited (Montreal) since
Stock Option Committee 1994; Vice President
Finance, Alcan Pacific
Limited (Tokyo), a wholly
owned subsidiary of Alcan
Aluminium Limited, from
1986 through 1994.
Frank 57 Director and Member of 1993 Consultant to industry and
Hodsoll Compensation and government since 1992;
Benefits Committee and Deputy Director for
Audit Committee Management, United States
Office of Management and
Budget (Washington, D.C.)
from 1991 through 1992;
Executive Associate
Director and Chief
Financial Officer, United
States Office of Management
and Budget from 1989
through 1991; Chairman,
National Endowment for the
Arts from 1981 through
1989.
William G. 52 Director, President and 1992 President and Chief
Rankin Chief Operating Officer Operating Officer since
January 1996; Executive
Vice President - Operations
from 1992 through 1995;
General Manager - Deere
Tech Services, a division
of Deere and Company
(Moline, IL), a manufac-
turer of agricultural,
construction and consumer
equipment from 1986
through 1992.
H. J. 66 Director and Member of 1994 Senior Counselor, Kearns
Young Executive Committee, and West (Washington, D.C.)
Audit Committee and an international public
Stock Option Committee relations firm since 1994;
Senior Vice President,
Edison Electric Institute
(Washington, D.C.) from
1982 through 1994.
J. B. 59 Director, Member of the 1995 President, Invacare
Richey Audit Committee, Technologies and Senior
Compensation and Vice President-Total
Benefits Committee, and Quality Management since
Stock Option Committee 1992, Senior Vice
President and General
Manager-North American
Operations, Invacare
Corporation, from 1989 to
1992 and Senior Vice
President-Product
Development, Invacare
Corporation, from 1984 to
1992. Director, Invacare
Corporation, Steris
Corporation and Royal
Appliance Manufacturing
Company.
(1) Business experience shown is for the last five years unless otherwise
indicated.
<PAGE>
No family relationship exists between any director, executive officer,
significant employee or person nominated or chosen by the Company to become a
director or executive officer.
There are no arrangements or understandings between any director and any other
person pursuant to which any director was nominated as a director except as
follows:
The Company has executed a note and warrant purchase agreement with affiliates
of Advent International Corporation ("Advent Group") and Techno-Venture U.S.A.,
Inc. (Techno) whereby the Company has agreed to nominate and recommend for
election to the Company's Board of Directors one person designated by the Advent
Group and Techno for so long as warrants convertible into not less than 5
percent of the Company's common stock are outstanding. The Advent Group and
Techno have waived their right pursuant to this agreement.
The Company has executed a stock purchase with Invacare Corporation whereby the
Company has agreed to nominate and recommend for election to the Company's Board
of Directors one person designated by Invacare for so long as Invacare owns at
least 100,000 shares of the Company's common stock and is not in default of
certain agreements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING NOMINEES
During the fiscal year ended October 31, 1995 the Board of Directors held
meetings on eleven occasions. Each incumbent director attended or participated
in more than seventy-five percent of the meetings of the Board and board
committees on which he served during the period he was a director, except for
Mr. Bell who attended or participated in four meetings, or 67 percent of the
six meetings held by the Board of Directors since his election as a Director.
Participation at meetings was sometimes by telephone, which is authorized under
Colorado law. The votes of each director are recorded in the minutes for each
matter considered by the Board of Directors. None of the directors listed above
has been involved during the last five years in any legal proceedings that are
material to an evaluation of the ability or integrity of that person to act as
a director of the Company.
The Board of Directors has an Executive Committee, Audit Committee, Compensation
and Benefits Committee and a Stock Option Committee. The Company does not have
a Nominating Committee. The Executive Committee, which makes policy
recommendations to the Board of Directors, consists of two directors and held no
meetings during fiscal 1995.
The Audit Committee, which reviews the annual audit performed by the Company's
independent auditors, consists of three directors and met once in fiscal 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation and Benefits Committee currently consists of three
directors (Messrs. Geddes, Bell and Hodsoll) and the Stock Option Committee
currently consists of three outside directors (Messrs. Bell, Young and Richey).
The purpose of the Compensation and Benefits Committee is to determine
compensation and benefits for executive officers of the Company (except stock
options). The Compensation and Benefits Committee held one meeting regarding
fiscal 1995. The purpose of the Stock Option Committee is to administer the
Company's Stock Option Plans and make recommendations to the Board of Directors
on the grant of stock options. The Stock Option Committee met two times
regarding fiscal 1995. For the purpose of Securities and Exchange Commission
Regulation S-K Item 402 (k), the Compensation and Benefits Committee and Stock
Option Committee were together the relevant board committee.
Mr. Geddes is Chairman of the Board and Chief Executive Officer.
<PAGE>
Mr. Bell, who serves on the Compensation and Benefits Committee and the Stock
Option Committee is an employee of Alcan Aluminium Limited which owns
approximately 13 percent of the Company's common stock.
Mr. Costello, who served on the Stock Option Committee through December 8, 1995,
the date of his resignation from the Board of Directors, is an employee of the
Advent Group, which owns approximately 11 percent of the Company's common stock.
Mr. Richey, who serves on the Stock Option Committee, is an employee of Invacare
Corporation which owns approximately one percent of the Company's common stock.
Transactions with Alcan
In 1988, the Company completed agreements with Alcan International Limited, the
research and development subsidiary of Alcan, to develop electric drive
technology for general use in land vehicle propulsion systems. This work was
completed in 1991. Separately, Alcan purchased from the Company 322,921 shares
of the Company's common stock, constituting approximately 7.5 percent of the
Company's then outstanding common stock.
Pursuant to the Alcan General Agreement, prior to the issuance of any equity
securities to any person, the Company must first extend to Alcan the preemptive
right to purchase 16.7 percent of the shares proposed to be issued on the same
terms and conditions offered to any other purchaser. Preemptive rights can be
exercised by Alcan for a period of three months after any issuance or sale of
equity securities, except that Alcan's preemptive right arising upon the
conversion or exercise of notes and warrants acquired by the Advent Group and
Techno can be exercised for a period of one year. In addition, for so long as
any of the Company's shares are held by Alcan, Alcan had a right of first
refusal until March 25, 1995 to purchase any private placement equity
securities to be issued or sold by the Company to third parties who will become
the beneficial owner of more than five percent of any class of the Company's
equity securities. See also "Security Ownership of Certain Owners and
Management" below.
Mr. Geddes, who holds or has the right to acquire 805,512 shares of the
Company's common stock, has granted Alcan a right of first refusal to purchase
any such shares to be sold or transferred by him in any public or private sale
for so long as any of the Company's shares are held by Alcan or its affiliates;
provided however, that such right of first refusal shall not be applicable in
the case of a third party offer for all of the issued and outstanding shares of
the Company provided that Alcan participates in such transaction, and upon the
redemption of all of the issued and outstanding common stock of the Company in
connection with the liquidation or dissolution of the Company following the sale
of all or substantially all of the assets of the Company.
In fiscal 1994, the Company and Alcan completed an Assignment Agreement which
superseded a prior license agreement in its entirety. The Assignment Agreement
shall remain in effect until all patents issued or applied for prior to December
31, 1992 have either lapsed, expired or otherwise terminated. Pursuant to the
Assignment Agreement, Alcan assigned to the Company all of its rights, title and
interests in all technology developed, prior to the date of the Assignment
Agreement, by or on behalf of Alcan pursuant to written contracts between Alcan
and the Company.
The Company has agreed to offer to Alcan a right of first refusal to acquire any
and all intellectual and proprietary property related to permanent magnet motors
and the associated controls (the "PM Technology") prior to consummating an
assignment or sale of any PM Technology.
<PAGE>
The Assignment Agreement further provides that Unique shall pay to Alcan
royalties on revenue derived from the manufacture and sale of products or
processes embodying PM Technology at a royalty rate substantially less than the
royalty rate under the prior license agreement, subject to reduction for patent
expense offsets, if any.
The Company has agreed to diligently prosecute its patents in the United States,
Canada, the European patent office countries and such other countries as may be
agreed upon by the parties. For so long as Alcan beneficially owns at least
five percent of the Company's common stock, it shall be obligated to pay
one-half of the patent application and maintenance fees (including reasonable
attorney's fees related thereto) associated with the PM Technology in an amount
not to exceed the aggregate amount of royalty revenue derived from the PM
Technology. Each party has the right, but not the obligation, to bring legal
action against third party infringements.
Transactions with Advent
In 1992, the Company completed agreements with the Advent Group and Techno for
the private placement of $1.2 million of Secured Subordinated Convertible Term
Notes. The notes bore interest at 8 percent per year and were secured by
substantially all of the Company's assets. In 1993, the Advent Group and Techno
converted all of the notes into 666,666 shares of the Company's common stock.
Coincident to the issuance of the notes, the Company granted to the Advent Group
and Techno warrants to acquire 790,000 shares of the Company's common stock at
the lower of the average market price of the Company's common stock for the
thirty-day period immediately prior to exercise or $2.40 per share, which expire
in August 1999. The warrant agreement was amended in 1993 to permit the
cashless conversion of the warrants into common stock based on the spread
between the market price of the common stock on the date of exercise and the
$2.40 per share exercise price of the warrants and the term of the warrants was
reduced from seven years to five years.
In addition, the Company has agreed to use its best efforts to have a
representative of the Advent Group and Techno elected to the Company's Board of
Directors. Mr. Dennis R. Costello, Senior Vice President of Advent
International Corporation, served on the Company's Board of Directors during
fiscal 1995 pursuant to this provision, prior to his resignation on December 8,
1995. The Advent Group and Techno have waived their right pursuant to this
provision for Fiscal 1996 and, accordingly, no Advent Group nominee is standing
for election in this proxy.
The Company has granted the Advent Group and Techno certain rights to register
the common stock issuable upon exercise of the warrants, the existence of which
rights, if exercised, could impair the Company's ability to raise capital
through the placement of additional equity securities in the future. The
Company has agreed that, if required and upon the request of the then holders
of at least twenty percent of the total outstanding warrants held by the Advent
Group and Techno, the Company will file a registration statement with the
Securities and Exchange Commission ("SEC") with respect to the securities
underlying the warrants and deliver a prospectus with respect to such securities
to all holders of the warrants as required by Section 10(a)(3) of the 1933 Act.
In addition, if the Company at any time files a registration statement with the
SEC, the Company, at its expense, will offer holders of common stock (or
warrant holders intending to exercise warrants into) not less than five percent
of the registrable shares held by the Advent Group and Techno the opportunity
to register the securities underlying the warrants. Such registration rights
are not applicable, however, to a registration statement filed by the Company
on Form S-4, Form S-8 or any other inappropriate form. The price payable upon
exercise of these warrants and the number of shares covered thereby are subject
to adjustment under certain circumstances.
<PAGE>
Pursuant to the note and warrant purchase agreements with the Advent Group and
Techno, prior to the issuance of any equity securities to any person, the
Company must first extend to the Advent Group and Techno the preemptive right
to purchase 15.2 percent of the shares proposed to be issued on the same terms
and conditions offered to any other purchaser. The preemptive rights can be
exercised by the Advent Group and Techno for a period of three months after
any issuance or sale of equity securities. The Advent Group and Techno did
not acquire any shares of the Company's common stock upon the exercise of
preemptive rights during fiscal 1995. See also "Security Ownership of Certain
Owners and Management" below.
Transactions with Invacare
In December 1995, the Company completed a stock purchase agreement with Invacare
Corporation (Invacare) pursuant to which, in January 1996, Invacare acquired
129,032 shares of the Company's common stock at $3.88 per share. The stock
purchase agreement provides that contingent upon the execution of a mutually
acceptable supply agreement with respect to the sale of products by Unique to
Invacare, Invacare shall make a second purchase of stock at such time as the
production engineering of the initial product for Invacare is completed. The
second purchase of stock, which shall be effected at the then prevailing market
price of the Company's common stock, will be in the approximate amount of 50
percent of the mutually agreed investment to be made by the Company for the
production tooling, capital equipment and product launching costs related to the
manufacture of products for sale to Invacare.
The Company has further agreed to use its best efforts to have a representative
of Invacare elected to the Company's Board of Directors. Mr. J. B. Richey,
Senior Vice President-Total Quality Management and Director of Invacare
Corporation, was appointed to the Company's Board of Directors on December 8,
1995, pursuant to this provision, and is a management nominee in these proxy
materials.
MANAGEMENT
The executive officers of the Company are:
Name Age Position
Ray A. Geddes 63 Chairman of the Board of Directors and
Chief Executive Officer
Donald A. French 40 Treasurer, Controller and Chief Financial
Officer
William G. Rankin 52 Director, President and Chief Operating
Officer
Craig S. Cambier 42 Vice President-Engineering
Ray A. Geddes, a director since 1981, joined the Company as Chairman of the
Board, Chief Executive Officer and Treasurer in 1984. From 1991 through 1995,
Mr. Geddes held the additional office of President. Prior to joining the
Company, Mr. Geddes was an independent consultant to the automotive industry
from 1974 through 1984. For twelve years prior to that, Mr. Geddes was
employed by Ford Motor Company in various management capacities including
Executive Vice President of Ford's Italian Automobile Group where he was
responsible for the production and marketing of the Ford Pantera sports car and
Program Manager for the production, marketing, and field support activities for
several specialty vehicles, including the Shelby Mustang, Ford Cobra and Ford
GT sports racing car. Mr. Geddes holds a Masters in Business Administration
and Juris Doctor Degree from the University of Michigan. He is Treasurer and
a member of the board of the Electric Vehicle Association of the Americas and
a member of The Society of Automotive Engineers.
Donald A. French, Treasurer, Controller and Chief Financial Officer, joined the
Company in 1987. Mr. French served as Corporate Secretary from 1987 through
1988. Prior to joining the Company, Mr. French was a practicing Certified
Public Accountant from 1985 to 1986. Prior to that Mr. French served as Vice
President and General Manager of Gaechter, Inc., an importer and distributor of
apparel and eyewear from 1983 to 1984. From 1981 to 1982, Mr. French served as
Supervisor of Financial Accounting for Husky Oil Company, a multinational oil
and gas company.
William G. Rankin, President and Chief Operating Officer since January 1996,
Executive Vice President - Operations and member of the Board of Directors from
1994 through 1995, joined the Company in 1992. Prior to joining the Company,
Mr. Rankin held a variety of management positions with Deere and Company, a
manufacturer of agricultural, construction, and consumer equipment. From 1986
to 1992, Mr. Rankin served as General Manager of Deere Tech Services, a division
of Deere and Company which developed, installed and marketed computer integrated
manufacturing technologies; from 1982 through 1986, as Manager of Computer-Aided
Manufacturing Services; and from 1976 through 1982, as Manager of Materials
Management Research and Planning.
Craig S. Cambier joined the Company in 1989 as Vice President of Electronics.
In 1992, Mr. Cambier assumed the additional duties of Vice President-
Engineering. In 1993, Mr. Cambier assumed the position of Vice President -
Research and Technology. In August 1995, Mr. Cambier was appointed Vice
President-Engineering. Prior to joining the Company, Mr. Cambier was the
President of Cambier Circuit Concepts, a consulting company and supplier of
power electronics. From 1986 through 1988, Mr. Cambier served as an
Applications Engineer - Power Semiconductors for the Siemens Power Semiconductor
Division of Siemens AG, a multinational manufacturer of electronics.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation earned by the
Chief Executive Officer and any other executive officer whose total annual
salary and bonus exceeded $100,000 for each of the last three fiscal years:
<TABLE>
Summary Compensation Table
<CAPTION>
Long-term
Compensation
Awards
Name of Annual Number of
Individual Fiscal Compensation Securities Underlying Other
and Position Year Salary Bonus Options Granted Compensation
<S> <C> <C> <C> <C> <C>
Ray A. Geddes,
Chairman and 1995 $152,375 $ -0- -0- $16,975 (2)
Chief Executive 1994 $151,556 $ -0- -0- $17,107 (2)
Officer 1993 $143,949 $ -0- -0- $ 7,701 (1)
William G.
Rankin
Director,
President and 1995 $123,960 $ -0- -0- $ 7,128 (1)
Chief Operating 1994 $123,300 $ -0- -0- $ 6,600 (1)
Officer 1993 $120,000 $ -0- -0- $ 7,250 (1)
</TABLE>
(1) Represents matching contributions to the Company's 401(k) Savings Plan.
(2) Represents matching contributions to the Company's 401(k) Savings Plan and
Company paid car allowance.
The foregoing compensation tables do not include certain fringe benefits made
available on a non-discriminatory basis to all Company employees such as group
health insurance, dental insurance, long-term disability insurance, vacation
and sick leave.
No options were granted to Messrs. Geddes or Rankin during Fiscal 1995.
<PAGE>
<TABLE>
Aggregated Option Exercises In Fiscal Year 1995
and Option Values at the End of Fiscal Year 1995
<CAPTION>
Number of Unexercised
Securities Underlying in-the-money
Number of Unexercised Options at Options at
Name of Shares Fiscal Year End Fiscal Year End
Individual Acquired Value Exer- Unexer- Exer- Unexer-
and Position On Exercise Realized cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C>
Ray A. Geddes,
Chairman and
Chief Executive
Officer -0- -0- 247,603 133,333 139,936 -0-
William G. Rankin,
Director, President
and Chief Operating
Officer -0- -0- 274,412 89,045 196,322 -0-
</TABLE>
Compensation and Benefits Committee and Stock Option Committee Report
on Executive Compensation (1)
This report combines reports of both the Compensation and Benefits Committee and
the Stock Option Committee.
The Compensation and Benefits Committee of the Board of Directors is responsible
for establishing Company policy regarding executive compensation. The
Compensation and Benefits Committee currently consists of Messrs. Bell, Geddes,
and Hodsoll.
The Stock Option Committee administers the 1992 Stock Option Plan and determines
how many options will be granted to executive officers. The Stock Option
Committee currently consists of Messrs. Bell, Richey and Young.
The Compensation and Benefits Committee determines all elements of executive
compensation except grants of stock options. The 1992 Stock Option Plan is
qualified under Securities and Exchange Commission Rule 16b-3 and as such must
be administered by a committee of persons who are not eligible to receive
options under the plan. As a result, Mr. Geddes does not participate in the
grant of options to executive officers or other employees of the Company. Mr.
Geddes also does not participate in Compensation and Benefit Committee
deliberations and recommendations as to his own compensation.
(1) The report of the Compensation and Benefits Committee and the Stock Option
Committee of the Board of Directors shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
<PAGE>
Policy
The Company's compensation program for its Chief Executive Officer is based on
beliefs and principles designed to align compensation with business strategy,
company values, and management initiatives. The program:
Rewards the Chief Executive Officer for long-term strategic management and the
enhancement of shareholder value by cash remuneration and by delivering
appropriate ownership in the Company through the grant of options.
Integrates compensation programs with both the Company's annual and longer-term
strategic planning processes.
Supports a performance-oriented environment that rewards performance with
respect to Company goals.
Attracts and retains key executives critical to the long-term success of the
Company.
The Company's Compensation package for employees generally and executive
officers in particular consists of both cash remuneration and equity based
compensation. The Company maintains a variety of benefit programs which are
designed to allow the Company to attract and retain talented individuals in a
variety of disciplines. All employees may participate in the following benefit
plans upon the attainment of certain entrance requirements:
Unique Mobility Health Benefit Plan
401(K) Savings Plan of Unique Mobility, Inc.
Unique Mobility, Inc. Stock Purchase Plan (not available to Mr. Geddes)
In addition, employees may be eligible for participation in the following
benefit plans at the discretion of the Company's Board of Directors:
Unique Mobility, Inc. 1992 Stock Option Plan
Unique Mobility, Inc. Employee Stock Bonus Plan
The Board of Directors believes that equity based compensation is critical to
the Company's ability to attract and retain qualified employees. The Company's
equity based compensation plans are designed to encourage and create ownership
in the Company's common stock, not only by executive officers, but by all
employees generally. The Board believes that the equity based plans of the
Company meet the objective of aligning key employees' long-range interests with
those of shareholders by providing key employees with the opportunity to build
a meaningful stake in the Company. The principal Company plans used to
facilitate this objective are the 1992 Stock Option Plan and the Employee
Stock Purchase Plan. Under the 1992 Stock Option Plan, employees are granted
the right to acquire shares of the Company's common stock at a fixed price
over a term not to exceed ten years. To further the Company's goal of
encouraging equity ownership, all options granted under the 1992 Stock Option
Plan since October 1994 provide that option holders may not sell stock received
through employee benefit programs if the sale of such stock exceeds 10% of the
total trading volume of the stock on the date of sale by the option holder on
any stock exchange and in the over-the-counter market. The 1992 Stock Option
Plan also provides for incremental vesting of stock options and restricts
trading by option holders to specified periods throughout the Company's fiscal
year.
<PAGE>
Performance Evaluation of Chief Executive Officer
The Compensation and Benefits Committee meets at least once with respect to
each fiscal year, without the Chief Executive Officer present, to evaluate his
performance.
The Chief Executive Officer's performance is evaluated based principally on the
following criteria:
The achievement of the Company's long-term business goals and objectives during
the immediately preceding one year period.
The achievement of specified individual and overall Company objectives during
the immediately preceding one year period.
The performance of the Company's common stock during the preceding one year
period.
In view of the Company's stage of development, the measure of achievement
against goals and objectives tends to be subjective and the performance of the
Company's common stock in the marketplace tends to be based on factors other
than the widely-recognized financial performance measures of product sales, net
profits and dividends. Accordingly, the Committee has relied in its review of
the Chief Executive Officer's compensation on the following objective measures
of performance against goals and objectives, which are listed below in
descending order of importance:
The number and quality of strategic alliances initiated and/or completed as
measured against targeted goals. It is the Company's plan to form strategic
alliances with one or more major companies in order to develop products and
commercialize developed products as a means of accelerating the Company's growth
in the high investment, high risk market for mass produced vehicle traction
drives in the automotive sector. During fiscal 1995, the Company initiated
discussion with several prospective strategic alliance partners and entered
into a strategic alliance with the Pininfarina Group of Turin, Italy. The
Company also continued to participate actively in its strategic alliance with
Kwang Yang Motor Co., Ltd. (Kymco) for the development and commercialization of
an electric propulsion system for application to motor scooters and the
establishment of manufacturing operations for such systems through a Taiwanese
joint venture company, Taiwan UQM Electric Co., Ltd. (Taiwan UQM). Further, the
Company successfully completed an agreement with KYMCO in fiscal 1995 which
allows the Company to defer its previously required investments in Taiwan UQM
until the third quarter of fiscal 1996. Pursuant to its relationship with
Pininfarina, the Company launched the construction of a demonstration vehicle
incorporating the Company's Caliber EV 53 traction drive system.
The capitalization and financial resources available to the Company as measured
against targeted objectives. The Company completed an offering of its common
stock under Regulation S during the fourth quarter of fiscal 1995 which resulted
in net proceeds to the Company of $1,950,554. In addition, the Company
generally maintained an adequate capitalization and possessed adequate financial
resources to support operations throughout fiscal 1995.
The number and quality of sponsored development programs and their contribution
to the technical objectives of the Company. The Company achieved the highest
level of revenue from sponsored development programs in its history during
fiscal 1995.
Technology advances and enhancements arising during the measurement period from
internally funded research and development activities. The Company successfully
extended its high voltage and low voltage product offerings during fiscal 1995
as a result of its internally funded research and development activities,
including the development and introduction of the Caliber EV 53 micro-processor
based traction drive system. The Compensation and Benefits Committee also
reviewed other technological advances that are not the subject of patents and
that the Company chooses not to make public at this time because they are
confidential business information, the disclosure of which would have an adverse
effect on the Company.
<PAGE>
Based on these factors, the Compensation and Benefits Committee would have
awarded a salary increase and a bonus to the Chief Executive Officer but the
Chief Executive Officer elected to voluntarily forego salary increases during
fiscal 1995 reflecting his belief that the Company's financial liquidity should
be improved prior to an award of additional compensation. For the same reason,
no bonus or stock options were awarded in fiscal 1995 to Mr. Geddes.
Additional Information
The compensation of the executive officers other than the Chief Executive
Officer is set by the Compensation and Benefits Committee and Stock Option
Committee based on the recommendations of the Chief Executive Officer, who
evaluates subjectively and objectively their performance against assigned
responsibilities and tasks. As was the case with Mr. Geddes, no salary
increases, bonuses or stock options were awarded to any of the executive
officers in fiscal 1995.
The Company has executed employment agreements with three executive officers and
Mr. Geddes. The employment agreements provide for the payment of severance
benefits to executive officers if the executive is terminated "without cause",
(as such term is defined in the employment agreements)(see also "Employment
Agreements" below). The Compensation and Benefits Committee believes it
advisable to provide compensation to executive managers upon termination of
employment to encourage the executive to commit his services for the longer
duration of the Employment Agreements. The Compensation and Benefits Committee
established the salaries in the employment agreements applying the criteria
discussed above, and the employment agreements themselves were not a factor in
determining salaries.
During fiscal 1995 the Stock Option Committee granted options to acquire 100,000
shares to consultants of the Company. No options were granted to executive
management as a group during fiscal 1995. All options granted during fiscal
1995 to consultants are exercisable at an amount equal to the fair market value
of the Company's common stock on the date of grant.
The Compensation and Benefits Committee of the Board of Directors:
Michel A. Bell
Ray A. Geddes
Frank Hodsoll
The Stock Option Committee of the Board of Directors:
Michel A. Bell
J. B. Richey
Jack Young
<PAGE>
Performance Graph(2)
The following graph presents the yearly percentage change in the cumulative
total return on the common stock of Unique Mobility, Inc., the group of
companies comprising the S&P Electrical Equipment Index, and those companies
comprising the S&P 500 Index for the five year period from 1991 through 1995:
GRAPHICAL DEPICTION OF THE FOLLOWING DATA:
INDEXED RETURNS
YEARS ENDING
COMPANY/INDEX OCT 90 OCT 91 OCT 92 OCT 93 OCT 94 OCT 95
UNIQUE MOBILITY, INC 100 125.60 320.00 640.01 410.00 294.96
S & P 500 INDEX 100 133.50 146.79 168.72 175.25 221.58
ELECTRICAL EQUIPMENT 100 133.86 149.48 183.20 192.59 244.93
(2) The stock price performance graph depicted above shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
<PAGE>
Employment Agreements
The Company has entered into Employment Agreements with Messrs. Geddes and
Rankin pursuant to which each has agreed to serve in his present capacity for a
term expiring December 31, 1996. The Employment Agreement provides that
Messrs. Geddes and Rankin will receive an annual base salary of $152,375 and
$123,960, respectively. Mr. Geddes also receives the use of an automobile.
Messrs. Geddes and Rankin may receive bonuses and stock options and were granted
150,000 and 100,000 options, respectively, upon execution of the employment
agreements. In addition, the other two executive officers of the Company have
entered into employment agreements in substantially the same form as Messrs.
Geddes and Rankin.
If employment is terminated by the Company without cause during or after the
term of the agreement (after three months' notice) or upon retirement after age
65, the officer shall receive one month's salary for each year of full-time
employment, but not less than 12 months' salary and not more than 24 months'
salary. If the officer terminates employment, he shall receive three months'
salary, unless the Company is in default, which shall be considered termination
by the Company without cause. On a termination by the Company following a
change of control of the Company, the officer shall have the option of receiving
all amounts remaining due in the agreement or twice the payment due on a
termination by the Company in the absence of a change of control. If an
officer dies during employment, his estate shall receive three months
compensation.
The employment agreements further provide that the Company shall maintain at its
expense, life insurance coverage in the name of Messrs. Geddes and Rankin or
their designees in an amount equal to three times the annual compensation
payable to each executive.
Pursuant to the Employment Agreements, Messrs. Geddes and Rankin have agreed to
at no time disclose to others any confidential information relating to the
business affairs of the Company for any purpose other than the conduct of the
Company's business and each has agreed to assign to the Company all right,
title and interest in any inventions and patents developed in whole or in part
by them, individually or with others, at any time during the term of the
Employment Agreements, or six months thereafter, which relate to the business of
the Company.
The Employment Agreements further provide that Messrs. Geddes and Rankin, for a
period of one year after the term of their respective Employment Agreements,
will not become affiliated with any person, firm or corporation whose business
is similar to or in competition with the Company nor, for a period of one year
after such term, induce or attempt to induce any employee of the Company to
leave the employ of the Company; nor will they induce or attempt to induce any
customer, supplier or licensee to cease doing business with the Company.
BOARD OF DIRECTORS COMPENSATION
In fiscal 1993 the Board of Directors of the Company established the Unique
Mobility, Inc. Stock Option Plan for Non-Employee Directors which is designed to
encourage directors to participate in the ownership of the Company and therefore
to more closely align their interests with those of the Company's shareholders.
The plan was approved by the Company's shareholders in February, 1994.
Directors of the Company who are not officers may elect to receive an annual
retainer of $12,000 in cash or the grant of options to acquire 16,000 shares of
the Company's common stock in accordance with the terms of the Unique Mobility,
Inc. Stock Option Plan for Non-Employee Directors, plus reimbursement for
ordinary and necessary expenses of attending meetings. In addition, directors
upon their initial election to the Board of Directors are awarded 2,000 shares
of the Company's common stock at a purchase price of $0.01 per share. Directors
who are full time officers or employees of the Company are not entitled to
additional compensation for their service as directors. Mr. Dennis R. Costello
served without compensation in his capacity as representative of the Advent
Group until his resignation on December 8, 1995. Mr. Bell serves without
compensation in his capacity as representative of Alcan. Mr. Richey serves
without compensation in his capacity as representative of Invacare.
<PAGE>
The following table sets forth information concerning remuneration to directors
of the Company during fiscal 1995:
<TABLE>
Number of
Securities
Underlying Shares of
Options Price Expiration Common Stock
Name of Director Granted(3) Per Share Date Awarded
<S> <C> <C> <C> <C>
Ray A. Geddes (1) - - -
Dennis R. Costello (2) - - - -
Sheldon Weinig (4) 16,000 $5.13 4-16-05 -
Frank Hodsoll 16,000 $5.13 4-16-05 -
H. J. Young 16,000 $5.13 4-16-05 -
J. B. Richey (3) - - - -
William G. Rankin(1) - - - -
Michel A. Bell (5) - - - -
</TABLE>
(1) Serves without compensation in his capacity as an officer of the Company.
(2) Served without compensation in his capacity as a representative of the
Advent Group. Mr. Costello resigned from the Board of Directors effective
December 8, 1995.
(3) Serves without compensation in his capacity as a representative of Invacare
Corporation.
(4) Resigned from the Board of Directors effective June 22, 1995.
(5) Serves without compensation in his capacity as a representative of Alcan.
All directors who were eligible to receive compensation as a director for the
term of service expiring March 20, 1996 elected to receive stock options in lieu
of cash payments.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships between nominee Directors and their affiliates and the
Company are described under "Compensation Committee Interlocks and Insider
Participation" above.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
The following table shows the ownership of the Company's $.01 par value common
stock by (i) beneficial owners of 5 percent or more of the Company's common
stock, (ii) each director and nominee, (iii) the Chief Executive Officer,
(iv) each executive officer whose annual salary and bonus exceeds $100,000, and
(v) all directors and executive officers as a group, as of January 29, 1996.
Unless otherwise noted, each shareholder exercises sole voting and investment
power with respect to the shares beneficially owned:
<TABLE>
Number of Percent
Common Shares of
Name of Shareholder Beneficially Owned Class (1)
<S> <C> <C>
Alcan Aluminium Limited (2) 1,401,925 13.08%
Michel A. Bell (3) - -
Adval Limited Partnership (4) 196,445 1.82%
Advent Future Limited Partnership (5) 429,719 3.93%
Adwest Limited Partnership (6) 245,556 2.26%
Advent Performance Materials
Limited Partnership (7) 245,557 2.26%
Advent Omnibus Limited Partnership (8) 110,501 1.03%
Ray A. Geddes (9) 805,512 5.28%
William G. Rankin 445,739 2.52%
Frank Hodsoll 38,000 .35%
H. J. Young 18,000 .17%
J. B. Richey (10) - -%
Directors and Executive
Officers as a Group (8 persons) 1,826,340 10.45%
</TABLE>
(1) Calculated separately for each holder on the basis of the actual number of
outstanding shares as of January 29, 1996. Assumes that shares issuable upon
exercise of options and warrants held by such person (but not by anyone else)
and exercisable within 60 days from the date of this Proxy Statement have been
issued ss of such date.
(2) Alcan's principal executive offices are located at 1188 Sherbrook Street
West, Montreal, Quebec, Canada H3A 3G2.
(3) Mr. Bell is an affiliate of Alcan, which owns 1,401,925 shares. Mr. Bell
disclaims beneficial ownership of Alcan shares.
(4) Member of The Advent Group, which beneficially owns 1,227,778 shares
(10.67%). Its address is c/o Advent International Corporation, 101 Federal
Street, Boston, MA 02110. Includes 105,335 shares issuable upon the exercise
of warrants.
(5) Member of The Advent Group, which owns 1,227,778 shares (10.67%). Its
address is c/o Advent International Corporation, 101 Federal Street, Boston,
MA 02110. Includes 230,412 shares issuable upon the exercise of warrants.
(6) Member of The Advent Group, which owns 1,227,778 shares (10.67%). Its
address is c/o Advent International Corporation, 101 Federal Street, Boston,
MA 02110. Includes 131,667 shares issuable upon the exercise of warrants.
<PAGE>
(7) Member of The Advent Group, which owns 1,227,778 shares (10.67%). Its
address is c/o Advent International Corporation, 101 Federal Street, Boston,
MA 02110. Includes 131,668 shares issuable upon the exercise of warrants.
(8) Member of The Advent Group, which owns 1,227,778 shares (10.67%). Its
address is c/o Advent International Corporation, 101 Federal Street, Boston,
MA 02110. Includes 59,251 shares issuable upon the exercise of warrants.
(9) Mr. Geddes' address is 425 Corporate Circle, Golden, Colorado 80401.
(10) Mr. Richey is an affiliate of Invacare which owns 129,032 shares (1.2%).
Mr. Richey disclaims beneficial ownership of Invacare shares.
Under the securities laws of the United States, the Company's directors, its
executive (and certain other) officers, and any persons holding more than 10
percent of the Company's common stock are required to report their ownership of
the Company's common stock and any changes in that ownership to the Securities
and Exchange Commission, the American Stock Exchange and the Boston Stock
Exchange. The Company is required to report in this Proxy Statement any failure
to file timely reports during fiscal 1995. The Statement of Changes in
Beneficial Ownership of Securities required to be filed by July 10, 1995, by
Mr. Weinig reporting the sale of 3,000 shares of common stock on June 23, 1995,
was not filed by Mr. Weinig until August 15, 1995.
In making these statements, the Company has relied on copies of the reports
filed by Alcan, The Advent Group and the Company's officers and directors with
the Securities and Exchange Commission.
POSSIBLE FUTURE CHANGES IN CONTROL
Mr. Geddes has granted a right of first refusal on his shares in favor of Alcan.
The exercise of this right by Alcan could result in a change in control of the
Company.
SELECTION OF AUDITORS
At the meeting, the shareholders will be called upon to ratify the appointment
of independent auditors to serve for fiscal 1996.
THE BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY RECOMMEND THAT THE
SHAREHOLDERS VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK
LLP, DENVER, COLORADO who have been the independent auditors of the Company
since 1985. A representative of that firm who will be present at the meeting,
will have the opportunity to make a statement should he desire to do so and can
be expected to respond to appropriate questions. In the event the shareholders
do not ratify the appointment of KPMG Peat Marwick LLP as independent auditors,
management may reconsider its choice of independent auditors.
To be adopted, the proposal must be approved by the affirmative vote of a
greater number of votes cast for the proposal than are cast against the
proposal. If a ballot is called for, proxies in the accompanying form
appointing the persons whose names are printed therein to act will (unless the
proxy form has been marked against or authority to vote is withheld) be voted in
favor of the proposal.
PROPOSALS BY SHAREHOLDERS
In accordance with rules of the Securities and Exchange Commission, shareholders
of the Company may present proposals to the Company for inclusion in the
Company's proxy statement prepared in connection with its next regular Annual
Meeting of Shareholders.
<PAGE>
Proposals to be included in the proxy statement prepared in connection with the
next Annual Meeting of Shareholders to be held in March 1997 must be received by
the Company no later than October 31, 1996, in order to be considered for
inclusion.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not aware of
any other matters to be presented for action at the meeting, nor has it been
advised that others will present any other matters. If any other matters do
properly come before the meeting, the proxy holders intend to vote the proxies
held by them in accordance with their best judgment on such matters.
ANNUAL REPORT
In lieu of an Annual Report, the Company has provided to each shareholder
receiving this Proxy Statement, a copy of the Company's Annual Report on Form
10-K without exhibits, which is incorporated herein by reference. The Company
will provide a copy of any exhibits to the Annual Report upon payment of a fee
of $.25 per page. Requests for such copies should be made to the Secretary,
Unique Mobility, Inc., 425 Corporate Circle, Golden, Colorado 80401,
phone (303) 278-2002.
APPROVAL OF DIRECTORS
The Board of Directors of the Company has approved the contents of this proxy
statement and its mailing to the shareholders.
"Elaine J. England"
Elaine J. England, Secretary
<PAGE>
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Unique Mobility, Inc., 425 Corporate Circle, Golden, Colorado 80401
The undersigned hereby appoints Ray A. Geddes and Donald A. French as proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and vote, as designated below, all the shares of common stock of
Unique Mobility, Inc. held of record by the undersigned on January 29, 1996 at
the Annual Meeting of Shareholders to be held on March 20, 1996 or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW:
1. TO ELECT SEVEN DIRECTORS TO THE COMPANY'S BOARD OF DIRECTORS TO HOLD OFFICE
UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE
ELECTED
Ray A. Geddes Michel A. Bell Frank Hodsoll William G. Rankin
H.J. Young J. B. Richey
ELECTION OF DIRECTORS FOR all nominees listed above
(except as marked to the contrary above)
WITHHOLD AUTHORITY
to vote for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name above.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY.
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting. The Board of
Directors is not aware of any other matters to be presented at the meeting
for approval by the shareholders.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NAMED NOMINEES AND FOR PROPOSAL 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sigh in partnership name by authorized person.
Dated __________________, 1996 ______________________________________________
Signature
Please mark, sign, date and
return the proxy card promptly _____________________________________________
using the enclosed envelope. Signature, if held jointly
