UNIQUE MOBILITY, INC.
425 Corporate Circle
Golden, Colorado 80401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 19, 1997
The annual meeting of shareholders of Unique Mobility, Inc. will be held on
August 19, 1997, at 10:00 a.m., Denver Time at the Westin Hotel Tabor Center,
1672 Lawrence 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 March 31, 1998.
3. To consider and vote upon a proposal to increase the number of shares
available for grant and the maximum number of shares that may be
granted to any one employee under the 1992 Stock Option Plan as further
described in the accompanying Proxy Statement.
4. 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
June 30, 1997. 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
July 9, 1997
/s/ 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 AUGUST 19, 1997
This proxy statement is being mailed on or about July 9, 1997, 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 August 19, 1997. The last Annual Meeting of
Shareholders was held on March 20, 1996.
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 June 30, 1997, will be
entitled to vote at the meeting. As of that date there were 13,355,435 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, other than the
election of directors, shall be approved if the votes cast in favor of the
proposal exceed the votes cast opposing the proposal. 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. Cumulative voting is not allowed in the
election of directors or for any other purposes.
<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 on the vote. 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 will have no effect on the vote.
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.
<PAGE>
Officer or
Position with the Director
Name Age Company Since Business Experience(1)
Ray A.
Geddes 64 Chairman of the President from 1991 through 1995,
Board and Chief Chairman of the Board of Directors
Executive Officer; and Chief Executive Officer since
Member of Executive 1984.
Committee and
Compensation and
Benefits Committee 1981
Frank
Hodsoll 58 Director and Consultant to industry and
Member of government since 1992; Deputy
Compensation and Director for Management, United
Benefits Committee, States Office of Management and
Stock Option Budget (Washington, D.C.) from 1991
Committee and Audit through 1992; Executive Associate
Committee 1993 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.
Rankin 53 Director, President President and Chief Operating
and Chief Officer since January 1996;
Operating Officer 1992 Executive Vice President -
Operations from 1992 through 1995;
General Manager - Deere Tech
Services, a division of Deere and
Company (Moline, IL), a
manufacturer of agricultural,
construction and consumer
equipment from 1986 through 1992.
H. J.
Young 67 Director and Member Senior Counselor, Kearns and West
of Executive (Washington, D.C.) an international
Committee, Audit public relations firm since 1994;
Committee, Stock Senior Vice President, Edison
Option Committee Electric Institute (Washington,
and Compensation D.C.) from 1982 through 1994
and Benefits
Committee 1994
J. B.
Richey 60 Director, Member of President, Invacare Technologies
the Audit Committee, and Senior Vice President-Total
and Stock Option Quality Management since 1992,
Committee 1995 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.
Lee A.
Iacocca 72 Director 1997 Chairman of the Board of Directors
and Chief Executive Officer, EV
Global Motors Company, since March
1997; Consultant to Chrysler
Corporation from 1992 through 1994;
Chairman of the Board of Directors
and Chief Executive Officer,
Chrysler Corporation from 1978
through 1992; member of the Board
of Directors of Chrysler
Corporation from 1992 through 1993
<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 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.
In connection with the stock exchange between the Company and EV Global Motors
Company ("EVG") described under "Certain Relationships and Related Transactions,
the Company has nominated Mr. Iacocca to the Company's Board of Directors and
EVG is expected to nominate Mr. Geddes to EVG's Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING NOMINEES
MANAGEMENT
The executive officers of the Company are:
Name Age Position
Ray A. Geddes 64 Chairman of the Board of Directors and
Chief Executive Officer
William G. Rankin 53 Director, President and Chief
Operating Officer
Donald A. French 41 Treasurer, Controller and Chief
Financial Officer
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. Mr. Geddes is also the
Chairman of the Board of Directors of Taiwan UQM Electric Co., Ltd. ("Taiwan
UQM"), a Taiwan-based corporation of which Unique owns 39%, and a director of
EVG. 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 i
Treasurer and a member of the board of directors of the Electric Vehicle
Association of the Americas and a member of The Society of Automotive Engineers.
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. Mr. Rankin is also a Director of
Taiwan UQM. 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.
<PAGE>
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.
Section 16(a) Beneficial Ownership Reporting Compliance
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, the Boston Stock Exchange
and the Pacific Stock Exchange. The Company is required to report in this
statement any failure to file timely reports during fiscal 1996 and the five
months ended March 31, 1997. Based on its review of Form 3 and Form 4 filings,
the Company believes all such required reports were timely filed during fiscal
1996 and the five months ended March 31, 1997.
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 the year ended March 31, 1997 and each
of the preceding three fiscal years ended October 31:
<TABLE>
Summary Compensation Table
Long-term
Compensation
Awards
Number of
Securities
Name of Underlying
Individual Fiscal Annual Options Other
and Position Year Compensation Granted Compensation
Salary Bonus
<S> <C> <C> <C> <C> <C>
Ray A. Geddes, 1997(3) $166,622 $ -0- 78,000 $17,762 (3)
Chairman and 1996 $162,533 $ -0- 98,926 $17,870 (1)
Chief Executive 1995 $152,375 $ -0- -0- $16,975 (1)
Officer 1994 $151,556 $ -0- 150,000 $17,107 (1)
William G.
Rankin, 1997(3) $141,198 $ -0- 127,459 $ 7,610 (3)
Directors, and 1996 $136,873 $ -0- 80,478 $ 6,978 (2)
Chief Operat- 1995 $123,960 $ -0- -0- $ 7,128 (2)
ing Officer 1994 $123,300 $ -0- 100,000 $ 6,600 (2)
Donald A. French,
Treasurer 1997(3) $101,206 $ -0- 94,541 $ 6,117 (3)
Controller, and 1996 $ 97,519 $ -0- 59,355 $ 5,572 (2)
Chief Financial 1995 $ 91,424 $ -0- -0- $ 5,714 (2)
Officer 1994 $ 90,933 $ -0- 50,000 $ 5,714 (2)
</TABLE>
<PAGE>
(1) Represents matching contributions to the Company's 401(k) Savings Plan and
Company paid car allowance.
(2) Represents matching contributions to the Company's 401(k) Savings Plan.
(3) Based on the period April 1, 1996, through March 31, 1997.
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.
<TABLE>
Option Grants During the Five Months
Ended March 31, 1997 and Fiscal 1996
Potential
Realizable
Value at
Percentage Assumed
of Total Annual Rates
Number of Options of Stock
Securities Granted to Price
Name of Underlying Employees Exercise Expira- Appreciation
Individual Fiscal Options in Fiscal Price Per tion for the
and Position Year Granted(1) 1997 Share Date Option Term
5%(2) 10%(3)
<S> <C> <C> <C> <C> <C> <C> <C>
Ray A. Geddes
Chairman and
Chief Execu- 1997(4) 78,000 15.6 $ 3.31 1-01-07 $162,491 $411,783
tive Officer 1996 98,926 19.8 $ 4.13 12-07-05 $267,439 $651,641
William G.
Rankin
Director,
President and
Chief Operat- 1997(4) 127,459 25.5 $ 3.31 1-01-07 $265,524 $672,891
ing Officer 1996 80,478 16.1 $ 4.13 12-07-05 $209,431 $531,121
Donald A.
French
Treasurer,
Controller,
and Chief
Financial 1997(4) 94,541 18.9 $ 3.31 1-01-07 $196,949 $499,108
Officer 1996 59,355 11.9 $ 4.13 12-07-05 $154,462 $390,981
</TABLE>
(1) Represents options granted pursuant to the 1992 Stock Option Plan. The
options granted vest as to one-third of the aggregate number of underlying
shares on January 2, 1998, January 2, 1999 and January 2, 2000,
respectively. Additionally, the options are subject to forfeiture and have
limitations as to marketability.
(2) The market capitalization of the Company, as determined by multiplying the
outstanding number of shares of common stock at fiscal 1997 year end by the
potential realizable share value achieved by applying the price
appreciation methodology utilized in this table, would be approximately $77
million versus a market capitalization of approximately $47 million at
March 31, 1997.
<PAGE>
Accordingly, the potential realizable value at assumed annual rates of
stock price appreciation over the ten-year term to all shareholders is
approximately $30 million assuming no increase in the number of shares of
common stock outstanding over the ten-year term.
(3) The market capitalization of the Company, as determined by multiplying the
outstanding number of shares of common stock at fiscal 1997 year end by the
potential realizable share value achieved by applying the price
appreciation methodology utilized in this table, would be approximately
$123 million versus a market capitalization of approximately $47 million
at March 31, 1997. Accordingly, the potential realizable value at assumed
annual rates of stock price appreciation over the ten-year term to all
shareholders is approximately $76 million assuming no increase in the
number of shares of common stock outstanding over the ten-year term.
(4) Represents the five-month period beginning November 1, 1996 and ending on
March 31, 1997.
<TABLE>
Aggregate Option Exercises During the Five Months Ended
March 31, 1997 and Fiscal Year 1996 and
Option Values at March 31, 1997 and the End of Fiscal Year 1996
Value of
Number of Securities Unexercised
Underlying Unexer- in-the-money
cised Options at Options at
Number of Fiscal Year End Fiscal Year End
Name of Shares
Individual Fiscal Acquired Value Exer- Unexer- Exer- Unexer-
and Position Year on Exercise Realized cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C> <C>
Ray A. Geddes,
Chairman and
Chief Executive 1997 7,000 $21,000 306,911 243,951 $155,492 $24,375
Officer 1996 -0- -0- 330,936 148,926 $304,803 $49,463
William G.
Rankin,
Director,
President and
Chief Operat- 1997 -0- -0- 323,616 247,778 $192,040 $39,831
ing Officer 1996 -0- -0- 330,124 113,811 $388,362 $40,239
Donald A.
French
Treasurer,
Controller and
Chief Financial 1997 13,105 $41,590 173,947 134,111 $ 36,808 $29,544
Officer 1996 13,395 $40,185 137,495 76,022 $ 91,471 $29,678
</TABLE>
<PAGE>
Compensation and Benefits Committee and
Stock Option Committee Report on Executive Compensation
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. Young, Geddes,
and Hodsoll.
The Stock Option Committee administers the 1992 Stock Option Plan and determines
how many options will be granted to executive officers and other employees of
the Company as a group. The Stock Option Committee currently consists of
Messrs. Hodsoll, Richey and Young.
The Compensation and Benefits Committee determines all elements of executive
compensation except grants of stock options. Mr. Geddes does not participate
in deliberations regarding 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.
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:
<PAGE>
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.
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 Committee last met in fiscal 1996 to evaluate the performance
of the Chief Executive Officer for fiscal 1996 and has not evaluated the
performance of the CEO for the five month transition period ended March 31,
1997. Accordingly, this report covers the CEO's performance evaluation for
fiscal 1996.
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:
<PAGE>
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 existing commercial markets and the high investment, high risk
market for mass produced vehicle traction drives for the automotive sector.
During fiscal 1996, the Company initiated discussions with several
prospective strategic alliance partners and entered into a strategic alliance
with Northrop Grumman Corporation and Invacare Corporation. The Company also
continued to participate actively in its strategic alliance with 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 and conventional starters and alternators through
a Taiwanese joint venture company, Taiwan UQM. Further, the Company
successfully extended its agreement with KYMCO which allowed the Company to
defer its previously required investments in Taiwan UQM until the first
quarter of fiscal 1997. In addition, the Company continued its relationship
with Pininfarina, leading to the successful development and demonstration of
the Ethos 3 EV vehicle to automotive manufacturers around the world.
The capitalization and financial resources available to the Company as
measured against targeted objectives. The Company completed two offerings
of its common stock under Regulation S during fiscal 1996 which resulted in
net proceeds to the Company of $3,909,379. From these proceeds, the Company
exercised its option to maintain its 39 percent ownership interest in Taiwan
UQM. In addition, the Company generally maintained an adequate
capitalization and possessed adequate financial resources to support
operations throughout fiscal 1996.
The number and quality of sponsored development programs and their
contribution to the technical objectives of the Company. The Company achieved
lower levels of revenue from sponsored development programs during fiscal
1996. However, this reduction was attributable, in great part, to the
Company's focus on accepting contracts which, upon completion of the
development activity, have product manufacturing opportunities.
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 1996 as a result of internally funded, and sponsored research
and development activities. 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.
Based on these factors, the Compensation and Benefits Committee elected to renew
the employment contract of the Chief Executive Officer for an additional
three-year term, increase the Chief Executive Officer's salary five (5)
percent to $172,793 and grant the Chief Executive Officer options to acquire
78,000 shares of the Company's common stock at the prevailing market price on
the date of grant under the 1992 Stock Option Plan.
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.
<PAGE>
The Company has executed employment agreements with two executive officers and
Mr. Geddes. The employment agreements provide for the payment of severance
benefits to the 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 1996 the Stock Option Committee granted options to acquire 500,000
shares of common stock to employees of the Company, of which options to acquire,
300,000 shares of common stock, or 60 percent, were granted to executive
officers as a group. In addition, the Company granted options to acquire 90,000
shares of common stock to consultants. All options granted during fiscal 1996
to employees and 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:
Jack Young
Ray A. Geddes
Frank Hodsoll
The Stock Option Committee of the Board of Directors:
Frank Hodsoll
J. B. Richey
Jack Young
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>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation and Benefits Committee currently consists of three
directors (Messrs. Geddes, Young and Hodsoll) and the Stock Option Committee
currently consists of three outside directors (Messrs. Hodsoll, 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 during
fiscal 1997. 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 one time during
fiscal 1997.
Mr. Geddes is Chairman of the Board and Chief Executive Officer.
Mr. Young is a consultant to Kearns & West, a public relations firm retained by
the Company periodically. In fiscal 1997, the Company paid $14,974 to this firm
for consulting services.
Mr. Richey, who serves on the Stock Option Committee, is an officer and director
of Invacare, which owns .97 percent of the Company's common stock. 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 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.
<PAGE>
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.
Employment Agreements
The Company has entered into Employment Agreements with Messrs. Geddes, Rankin
and French pursuant to which each has agreed to serve in his present capacity
for a term expiring December 31, 1999. The Employment Agreements provide that
Messrs. Geddes, Rankin and French will receive an annual base salary of
$172,793, $146,428 and $108,612, respectively. Messrs. Geddes and Rankin also
receive the use of an automobile. Messrs. Geddes, Rankin and French may receive
bonuses and stock options and were granted 78,000, 127,459 and 94,541 options,
respectively, upon execution of the employment agreements.
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 on Messrs. Geddes, Rankin and French payable
to their designees in an amount equal to three times the annual compensation
payable to each executive.
Pursuant to the Employment Agreements, Messrs. Geddes, Rankin and French 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, Rankin and
French, 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.
<PAGE>
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 Directions, 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 of the Company are not entitled to
additional compensation for their service as directors.
There were no option grants to Directors of the Company during the five-month
transition period ended March 31, 1997.
The following table sets forth information concerning remuneration to directors
of the Company during fiscal 1996:
Number of
Securities
Underlying Share of
Options Price Expiration Common Stock
Name of Director Granted(3) Per Share Date Awarded
Ray A. Geddes(1) - - - -
Frank Hodsoll 16,000 $4.38 3-19-06 -
H. J. Young 16,000 $4.38 3-19-06 -
J. B. Richey(2) - - - -
William G. Rankin(1) - - - -
Michel A. Bell(3) - - - -
(1) Serves without compensation in his capacity as an officer of the Company.
(2) Serves without compensation in his capacity as a representative of Invacare
Corporation.
(3) Served without compensation in his capacity as a representative of Alcan
until his resignation on September 15, 1996.
All directors who were eligible to receive compensation as a director for the
term of service beginning March 20, 1996, elected to receive stock options in
lieu of cash payments.
<PAGE>
Performance Graph
The following graph represents 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 1992 through 1996
and the five-month transition period ended March 31, 1997:
Graph plotting the following data:
<TABLE>
Indexed Returns Years Ending
Base Oct96-
Company/Index Period Oct92 Oct93 Oct94 Oct95 Oct96 Mar97
<S> <C> <C> <C> <C> <C> <C> <C>
Unique Mobility, Inc. 100 254.78 509.56 326.44 234.84 294.59 230.89
Electrical Equipment 50 100 111.65 136.82 143.83 182.88 267.29 289.78
S&P 500 Index 100 109.93 126.29 131.18 165.75 205.57 215.42
</TABLE>
SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
The following table shows the ownership of the Company's $0.01 par value common
stock by (i) beneficial owners of 5 percent or more of the Company's common
stock, (ii) each director and nominee director, (iii) the Chief Executive
Officer and each other executive officer whose annual salary and bonus exceeds
$100,000 and (iv) all directors and executive officers as a group, as of July
3, 1997. Unless otherwise noted, each shareholder exercises sole voting and
investment power with respect to the shares beneficially owned:
<PAGE>
Number of
Common Shares Percent of
Name of Shareholder Beneficially Owned Class (1 )
Ray A. Geddes(2) 883,512 6.35%
William G. Rankin 575,724 4.13%
Donald A. French 342,199 2.50%
Frank Hodsoll 50,000 .04%
Jack Young 47,333 .04%
J. B. Richey(3) - - %
EV Global Motors Company(4) 1,701,925 12.24%
Lee A. Iacocca(5) 1,701,925 12.24%
Directors and Executive
Officers as a Group (6 persons) 3,600,693 23.34%
(1) Calculated separately for each holder on the basis of the actual number of
outstanding shares as of July 3, 1997. 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 document have
been issued as of such date.
(2) Mr. Geddes' address is 425 Corporate Circle, Golden, Colorado 80401.
(3) Mr. Richey is an affiliate of Invacare Corporation which owns 129,032
shares (.97%). Mr. Richey disclaims beneficial ownership of Invacare
Corporation's shares.
(4) EV Global Motors Company's address is 10880 Wilshire Boulevard, Suite
1400, Los Angeles, California 90024.
(5) Mr. Iacocca is an affiliate of EV Global Motors Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lee Iacocca, a nominee for director, is an affiliate of EVG, a newly formed
corporation that has agreed to exchange 400,000 shares of EVG common stock for
200,000 shares of the Company's common stock. After such acquisition, EVG will
beneficially own approximately 12.2 percent of the Company's common stock.
Ray A. Geddes, Chairman of the Company, is expected to become a director of EVG.
The Company is performing development work for EVG regarding an electric drive
system for bicycles. EVG is a party to a memorandum of understanding with the
Company and Taiwan UQM to market electric scooters throughout the Western
Hemisphere.
Other relationships and related transactions are disclosed in "Compensation
Committee Interlocks and Insider Participation" above.
<PAGE>
SELECTION OF AUDITORS
At the meeting, the shareholders will be called upon to ratify the appointment
of independent auditors to serve for fiscal 1998.
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.
ADOPTION OF AMENDMENT TO THE 1992 STOCK OPTION PLAN
The Board of Directors and the shareholders approved the Unique Mobility, Inc.
1992 Option Plan ("1992 Option Plan") effective February 21, 1992. On April 16,
1993, the Board of Directors and shareholders approved an amendment to the 1992
Option Plan increasing the number of shares available for issuance under the
plan pursuant to the grant of incentive or non-qualified stock options from one
million shares to two million shares of common stock. On February 18, 1994,
the shareholders approved an amendment to the 1992 Option Plan that limits the
number of shares subject to options that may be granted to any individual to
500,000 shares. On February 20, 1995, the shareholders approved an amendment
to the 1992 Option Plan increasing the number of shares available for issuance
under the 1992 Option Plan from two million shares to three million shares of
common stock.
The Board of Directors and management of the Company believe that the
recruitment and retention of qualified employees is essential to the success of
the Company and will be enhanced by providing incentive to the employees to
promote the interests of the Company and thereby more closely align their
interests with those of the Company's shareholders. In addition, the Company
has benefitted from the services rendered by individuals who are not employees
of the Company ("consultants") and the Board and management believe that it is
important to the success of the Company to provide incentive to the Company's
consultants. Presently, 34 employees and consultants are eligible to
participate in the plan.
The Board and management believe the Company should continue to provide
incentives to employees and consultants to promote the interests of the Company
and its shareholders. To this end, the Board has established a target ownership
position for the Company's employees as a group at 25 percent of the fully
diluted common shares. This is not a specific target, but rather a general
goal of the Company's Board of Directors. At the date of this proxy statement,
incentive and non-qualified options to acquire 3,373,000 shares of the Company's
common stock have been granted to employees of the Company pursuant to the 1992
Option Plan and its predecessor plans. To date, options to acquire 720,432
shares of common stock have been exercised by employees of the Company at an
average exercise price of $1.13 per share and resulted in cash proceeds to the
Company of $814,713. In addition, options to acquire 2,451,456 shares of
common stock remain outstanding at exercise prices ranging from $0.50 to $8.13
per share of common stock and represent 14.25 percent of the Company's fully
diluted common stock. At July 3, 1997, 509,599 shares of the Company's common
stock were available for the grant of options under the 1992 Option Plan. If
all of the shares currently available for grant under the 1992 Option Plan are
awarded to employees of the Company, the ownership position of the Company's
employees as measured by the aggregate number of options previously granted to
employees of the Company, together with the remaining shares available for
grant under the 1992 Option Plan, would be 21.92 percent of the fully
diluted common shares of the Company.
<PAGE>
The employment agreement of Ray Geddes provides that the Company will seek
shareholder approval to increase the limit on the number of options that can b
granted to any individual from the existing 500,000 share limit and grant
Mr. Geddes an additional option to acquire 50,000 shares at an exercise price
equal to the fair market value of the stock on the date of grant. The Company
intends to grant such option if the shareholders approve the proposed amendmen
to the 1992 Option Plan.
The Board has, therefore, determined by resolutions dated June 30, 1997, to
amend the 1992 Option Plan to increase the number of authorized shares from
three million to four million and to increase the maximum number of shares tha
may be granted to an individual during the term of the 1992 Option Plan from
500,000 to 1,000,000.
The 1992 Option Plan is construed, interpreted and administered by a committee
appointed by the Board of Directors. Presently the committee is the Stock
Option Committee of the Board of Directors. Committee members are not eligibl
for the grant of options to acquire common stock of the Company under the 1992
Option Plan.
Under the 1992 Option Plan, any shares subject to an option that is not
exercised are available for grants of future options. However, shares that are
withheld to pay taxes are not available for grant of future options. The 1992
Option Plan provides that the number of shares of stock subject to the plan
will be adjusted in the event of stock splits, stock dividends,
reclassifications, or recapitalizations. If the Company pays a dividend in
stock of another corporation or in other property, it will set aside a
proportionate part for delivery to holders of outstanding options upon the
exercise of such options. If there are other changes involving the stock, the
Committee may, in its discretion, make appropriate changes in the shares of
stock subject to the 1992 Option Plan and to outstanding options. If the
Company issues subscription rights to its shareholders, rights will be reserved
for the number of shares subject to outstanding options upon the exercise of
such options. The 1992 Option Plan also provides that if the Company is merged,
consolidated, or a party to a reorganization or if more than 50 percent of its
voting stock is acquired, the Committee may make appropriate adjustments to the
outstanding options, provide for their assumption by a successor corporation,
or provide that they must be exercised within 30 days after notice and that,
at the end of the 30 day period, they will terminate. The 1992 Option Plan
provides that in case of a change in control of the Company, all outstanding
options will become fully vested. A change in control will occur if, during
any period of two consecutive years, the individuals who were members of the
Board at the start of such period and new members whose nominations were
approved by two-thirds of the directors in office at the start of the period or
whose nomination was approved by such two-thirds majority no longer constitute
a majority of the Board.
The Committee has the sole and absolute discretion to determine the employees
and consultants to whom options will be granted, the number of shares subject
to the option grant, the option price, the vesting of the option, the term of
the option, and certain other terms of the option. An option granted to an
individual who is subject to the "short swing" profit restrictions of Section
16(b) of the Securities Exchange Act of 1934 may not be exercised before the
date that is six months after the date the option was granted.
<PAGE>
The 1992 Option Plan provides for the grant of incentive stock options
("Incentive Options") within the meaning of Section 422 of the Code and options
that are not described in Section 422 of the Code ("Non-Qualified Options").
Incentive Options and Non-Qualified Options will hereafter be referred to
collectively as Options.
Options granted to employees may be either Incentive Options or Non-Qualified
Options or a combination of the two kinds of options. Consultants may be
granted only Non-Qualified Options.
The maximum term of an Option is ten years. The option price is determined by
the Committee. However, in the case of an Incentive Option, the Option price
must be at least equal to the fair market value of the stock on the date the
Incentive Option is granted. The fair market value of the stock on July 2,
1997, was $6.38. There are other restrictions on Incentive Options. If the
Incentive Option holder owns more than 10 percent of the Company's stock, the
Incentive Option price must be at least 110 percent of the fair market value
of the stock on the date of grant and the maximum term of the Incentive Option
is five years. Moreover, the fair market value (determined at the time the
Incentive Option is granted) of the shares of stock with respect to which
an Incentive Option first becomes exercisable in a calendar year cannot exceed
$100,000.
An Option holder may exercise the Option by written notice to the Company
specifying the number of shares as to which the Option is being exercised and
payment of the Option price. The Option price may be paid (1) in cash or by
certified or cashier's's check, (2) by the surrender of shares of the Company's
common stock already owned by the Option holder, (3) with the proceeds of a
loan from the Company, or (4) through delivery of shares received on exercise
of the Option to a broker.
The Option holder may pay the Option price by surrendering a number of shares
of the Company's common stock that he already owns and that have a fair market
value equal to the Option price. However, the Option holder may not surrender
shares of stock that have not been held for at least six months.
The Company, in its sole discretion, may make a loan to an Option holder to
permit him to pay the exercise price. In general, the term of the loan will
not be longer than five years; the loan will be secured by a pledge of all or
portion of the stock purchased; the loan will bear interest at a rate determined
by the Committee; it will be repaid in equal quarterly installments of
principal and interest; and if the Option holder terminates employment with the
Company, the loan will become immediately due and payable in full.
The Option holder may direct the Company to issue the certificate for the stock
pursuant to the exercise of the Option to a broker who will sell a portion of
the Stock to pay the exercise price or make a loan to the Option holder to
enable the Option holder to pay the Option price.
The 1992 Option Plan also provides that Option holders who are subject to the
withholding of state and federal income tax as the result of the exercise of a
Non-Qualified Option may satisfy the income tax withholding obligation through
the withholding of a portion of the stock to be received upon exercise of the
Option.
Although the maximum term of an Option is generally ten years, the 1992 Option
Plan provides that an Option will terminate prior to its stated term (the
"Option Period") upon termination of employment, retirement or death.
<PAGE>
If the employment of an Option holder who is an employee terminates for cause,
the Option will be void for all purposes. If an employee Option holder retires
from the Company after attaining age 65, he (or if he dies, his successors) may
exercise the Option for a period of three months after his retirement to the
extent the Option was vested at the time of his retirement and so long as the
Option has not expired by its terms. If an employee Option holder terminates
employment before age 65, he may exercise the Option for a period of three
months after his termination to the extent the Option was vested at the time
of his termination and so long as the Option has not expired by its terms. If
an employee Option holder dies while employed or in the three-month period
described in the preceding sentence, his successors may exercise the Option
within fifteen months following his death to the extent that the Option was
vested at the time of his death and so long as the Option has not expired by
its terms.
If the services of a consultant Option holder terminate during the Option
period other than for cause or on account of death, the Option may be exercised
during the remainder of the Option Period to the extent that the Option had
become exercisable at the date of termination of services. If the services of
a consultant Option holder are terminated for cause, the Option will be null
and void. If a consultant Option holder dies during the Option Period, the
Option holder's successors may exercise the Option for a period of fifteen
months after the Option holder's death to the extent the Option was vested at
the time of the Option holder's death and so long as the Option has not
expired by its terms.
The 1992 Option Plan was amended, effective February 13, 1997, to provide that
an option holder may transfer a Non-Qualified option to family members, a trust
for the sole benefit of family members, or a partnership of which family
members or trusts for their benefit are the only partners. Incentive Options
are not transferable except by
will or the laws of descent and distribution. As consideration for the grant
of an Option, an employee Option holder agrees to remain in the employ of the
Company for at least one year after the date of the grant, and a consultant
Option holder agrees to abide by all of the terms and conditions of his
agreement with the Company.
The Board may amend, modify, suspend or terminate the 1992 Option Plan but no
such action will impair any Option previously granted under the 1992 Option
Plan or deprive any Option holder of any shares of Stock that he acquired
through or as a result of the 1992 Option Plan. Unless the 1992 Option Plan
is sooner terminated by the Board, it will expire on February 20, 2002. No
amendment or modification of the 1992 Option Plan will become effective without
shareholder approval if such approval is required to enable the 1992 Option
Plan to meet applicable statutory or regulatory requirements or if the Company,
on the advice of counsel, determines that such approval is otherwise
necessary or desirable. Option holders may not sell stock received on exercis
if the sale of all stock received under Employee Benefit Plans of the Company
shall exceed 10 percent of the total trading volume of the stock on the date of
sale by the option holder on any stock exchange or on the over-the-counter
market.
The Option holder does not realize compensation and the Company is not entitled
to a deduction upon the exercise of an incentive option. However, an Option
holder may be subject to the alternative minimum tax in the year that an
Incentive Option is exercised if the Stock is not disposed of in the same tax
year. To the extent that the fair market value of the stock (determined at the
date of exercise) acquired through the exercise of an Incentive Option exceeds
the exercise price, the Option holder must recognize an item of adjustment tha
may be sufficient in amount to subject the Option holder to the alternative
minimum tax.
If the Option holder holds stock acquired through the exercise of Incentive
Options for the full holding period (as specified by the Code), the Option
holder will recognize a capital gain or loss at the time of the sale of the
stock based on the difference between his Option price and the sales price of
the stock. There is no tax effect to the Company from the sale of such stock.
<PAGE>
Upon exercise of a Non-Qualified Option or the premature disposition of stock
acquired through the exercise of an Incentive Option, the Company will be
entitled, for federal income tax purposes, to a tax deduction and the Option
holder will realize compensation, subject to withholding.
In general, the amount of such deduction and income will be equal to the amount
by which the fair market value of the shares acquired on the date the
Non-Qualified Option is exercised exceeds the Option price of the shares
acquired.
The amount of such deduction and compensation in the case of an Incentive
Option will be equal to the difference between the fair market value of the
shares on the date the Option was exercised (or, if less, the amount received
on the sale of the stock) and the Option price.
Any difference between the basis of the stock (the Option price plus any
compensation recognized) and amount realized upon a subsequent sale of such
shares will be treated as a short-term or long-term capital gain or loss,
depending on the length of the period such shares are held prior to sale.
The accounting treatment for Options is different from the Federal income tax
treatment for the Company. The grant of an Option does not affect net income
so long as the Option price is greater than or equal to the quoted market price
of the stock on the date of grant. Options granted at a price less than the
quoted market price of the stock on the date of grant are deeded to be
compensatory and reduce net income of the Company during the vesting period of
such Options.
MANAGEMENT AND THE BOARD OF DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE FOR
THE AMENDMENT TO THE 1992 OPTION PLAN TO INCREASE THE NUMBER OF SHARES
AVAILABLE FOR GRANT UNDER THE PLAN FROM 3 MILLION TO 4 MILLION SHARES, AND TO
INCREASE THE MAXIMUM NUMBER OF SHARES THAT MAY BE GRANTED TO AN INDIVIDUAL
DURING THE TERM OF THE PLAN FROM 500,000 TO 1,000,000 SHARES.
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.
Proposals to be included in the proxy statement prepared in connection with th
next Annual Meeting of Shareholders to be held in March 1998 must be received
by the Company no later than October 31, 1997, 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.
<PAGE>
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.
/s/ Elaine J. England
Elaine J. England, Secretary
<PAGE>
ATTACHMENT ONE
UNIQUE MOBILITY, INC.
1992 STOCK OPTION PLAN
amended and restated, effective February 13, 1997
<PAGE>
UNIQUE MOBILITY, INC.
1992 STOCK OPTION PLAN
SECTION 1
Introduction
1.1 Establishment. Unique Mobility, Inc., a Colorado
corporation (hereinafter referred to, together with its Affiliated
Corporations (as defined in subsection 2.1(a)) as the "Company"
except where the context otherwise requires), hereby establishes
the Unique Mobility, Inc. 1992 Stock Option Plan (the "Plan") for
certain employees of the Company and certain consultants to the
Company.
1.2 Purposes. The purposes of the Plan are to provide those
who are selected for participation in the Plan with added
incentives to continue in the long-term service of the Company and
to create in such persons a more direct interest in the future
success of the operations of the Company by relating incentive
compensation to increases in shareholder value, so that the income
of the those participating in the Plan is more closely aligned with
the income of the Company's shareholders. The Plan is also
designed to provide a financial incentive that will help the
Company attract, retain and motivate the most qualified employees
and consultants.
1.3 Effective Date. The initial effective date of the Plan
was February 21, 1992 (the "Effective Date"). The Plan was
amended, as of April 16, 1993, to increase the number of authorized
shares to two million; as of January 1, 1993, to provide that the
maximum number of shares that may be subject to options granted to
any individual during the term of the Plan may not exceed 500,000
shares; as of February 20, 1995, to increase the number of
authorized shares to three million; and, as of February 13, 1997,
to permit the transfer of certain Options in specified
circumstances. This Plan and each Option granted hereunder is
conditioned on and shall be of no force or effect until approval of
the Plan and any amendment to the Plan by the holders of a majority
of the shares of voting stock of the Company cast at a duly held
shareholders meeting at which a quorum is present and voting (by
proxy or in person) where shareholder approval is required or
otherwise necessary or desirable as provided in Section 11 below.
SECTION 2
Definitions
2.1 Definitions. The following terms shall have the meanings
set forth below:
<PAGE>
(a) "Affiliated Corporation" means any corporation or
other entity (including but not limited to a partnership) which is
affiliated with Unique Mobility, Inc. through stock ownership or
otherwise and is treated as a common employer under the provisions
of Sections 414(b) and (c) of the Code, and, for purposes of
Incentive Stock Options granted pursuant to the Plan, means any
parent or subsidiary of the Company as defined in Section 424 of
the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(d) "Committee" means a committee consisting of members
of the Board who are empowered hereunder to take actions in the
administration of the Plan. Members of the Committee shall be
appointed from time to time by the Board, shall serve at the
pleasure of the Board and may resign at any time upon written
notice to the Board. The Committee shall be so constituted that it
satisfies the requirement of "disinterested administration" imposed
by Securities and Exchange Commission Rule 16b-3, as it may be
amended from time to time.
(e) "Eligible Employees" means those employees
(including, without limitation, officers and directors who are also
employees) of the Company, whose judgment, initiative and efforts
are important to the Company for the management and growth of its
business. For purposes of the Plan, an employee is an individual
whose wages are subject to the withholding of federal income tax
under Section 3401 of the Code.
(f) "Eligible Independent Contractors" means those
consultants and other individuals who provide services to the
Company and whose judgment, initiative and effort are important to
the Company for the management and growth of its business. For
purposes of the Plan, an independent contractor is an individual
whose wages are not subject to the withholding of federal income
tax under Section 3401 of the Code.
(g) "Fair Market Value" shall be the average of the bid
and asked prices on the over-the-counter market on the 20 trading
days preceding the date on which the determination of fair market
value is made. If the Stock is not traded on the over-the-counter
market, Fair Market Value determined in good faith by the Committee
using all relevant data and information reasonably available to the
Committee.
<PAGE>
(h) "Incentive Stock Option" means any Option designated
as such and granted in accordance with the requirements of Section
422 of the Code.
(i) "Non-Qualified Option" means any Option other than
an Incentive Stock Option.
(j) "Option" means a right to purchase Stock at a stated
price for a specified period of time.
(k) "Option Holder" means an Eligible Employee or
Eligible Independent Contractor designated by the Committee from
time to time during the term of the Plan to receive one or more
Options under the Plan.
(l) "Option Price" means the price at which shares of
Stock subject to an Option may be purchased, determined in
accordance with subsection 6.2(b).
(m) "Share" means a share of Stock.
(n) "Stock" means the common stock, $0.01 par value, of
the Company.
2.2 Gender and Number. Except when otherwise indicated by
the context, the masculine gender shall include the feminine
gender, and the definition of any term herein in the singular shall
also include the plural.
SECTION 3
Plan Administration
3.1 In General. The Committee shall be responsible for the
administration of the Plan. The Committee shall determine the form
or forms of the agreements with Option Holders which shall evidence
the particular provisions, terms, conditions, rights and duties of
the Company and the Option Holders with respect to Options granted
pursuant to the Plan, which provisions need not be identical except
as may be provided herein. The Committee may from time to time
adopt such rules and regulations for carrying out the purposes of
the Plan as it may deem proper and in the best interests of the
Company. The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any agreement
entered into hereunder in the manner and to the extent it shall
deem expedient and it shall be the sole and final judge of such
expediency. No member of the Committee shall be liable for any
action or determination made in good faith. The determinations,
interpretations and other actions of the Committee pursuant to the
provisions of the Plan shall be binding and conclusive for all
purposes and on all persons.
<PAGE>
3.2 Eligible Employees. In accordance with the provisions of
the Plan, the Committee shall, in its sole discretion, select
Option Holders from among Eligible Employees to whom Options will
be granted, the number of Shares subject to each Option and any
other terms and conditions of each Option as the Committee may deem
necessary or desirable and consistent with the terms of the Plan.
3.3 Eligible Independent Contractors. In accordance with the
provisions of the Plan, the Committee shall, in its sole
discretion, select Option Holders from among Eligible Independent
Contractors to whom Options will be granted, the number of shares
subject to each Option and any other terms and conditions of each
Option as the Committee may deem necessary or desirable and
consistent with the terms of the Plan.
SECTION 4
Stock Subject to the Plan
4.1 Number of Shares. A total of three million Shares are
authorized for issuance under the Plan in accordance with the
provisions of the Plan and subject to such restrictions or other
provisions as the Committee may from time to time deem necessary.
This authorization may be increased from time to time by approval
of the Board and by the shareholders of the Company if, in the
opinion of counsel for the Company, such shareholder approval is
required. Shares that may be issued upon the exercise of Options
shall be applied to reduce the maximum number of Shares remaining
available for use under the Plan. The Company shall at all times
during the term of the Plan and while any Options are outstanding
retain as authorized and unissued Stock, or as treasury Stock, at
least the number of Shares from time to time required under the
provisions of the Plan, or otherwise assure itself of its ability
to perform its obligations hereunder.
4.2 Unused and Forfeited Stock. Any Shares that are subject
to an Option under this Plan that are not used because the terms
and conditions of the Option are not met, including any Shares that
are subject to an option that expires or is terminated for any
reason shall automatically become available for use under the Plan.
Any Shares that are withheld by the Company pursuant to
Section 12.2 and any Shares that are used to pay the Option Price
shall not become available for the grant of Options under the Plan.
<PAGE>
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the
Company shall at any time increase or decrease the number of its
outstanding Shares or change in any way the rights and privileges
of such Shares by means of the payment of a stock dividend or any
other distribution upon such Shares payable in Stock, or through a
stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in
relation to the Stock that is affected by one or more of the above
events, the numbers, rights and privileges of the following shall
be increased, decreased or changed in like manner as if they had
been issued and outstanding, fully paid and nonassessable at the
time of such occurrence: (i) the Shares of Stock as to which
Options may be granted under the Plan and (ii) the Shares then
subject to each outstanding option.
4.4 Dividend Payable in Stock of Another Corporation, Etc.
If the Company shall at any time pay or make any dividend or other
distribution to the holders of Stock payable in securities of
another corporation or other property (except money or Stock), a
proportionate part of such securities or other property shall be
set aside and delivered to any Option Holder then holding an Option
for the particular type of Stock for which the dividend or other
distribution was made, upon exercise thereof. Prior to the time
that any such securities or other property are delivered to an
Option Holder in accordance with the foregoing, the Company shall
be the owner of such securities or other property and shall have
the right to vote the securities, receive any dividends payable on
such securities, and in all other respects shall be treated as the
owner. If securities or other property that have been set aside by
the Company in accordance with this Section are not delivered to an
Option Holder because an Option is not exercised, then such
securities or other property shall remain the property of the
Company and shall be dealt with by the Company as it shall
determine in its sole discretion.
4.5 Other Changes in Stock. If there shall be any change,
other than as specified in Sections 4.3 and 4.4, in the number or
kind of outstanding Shares of Stock or of any stock or other
securities into which the Stock shall be changed or for which it
shall have been exchanged, and if the Committee shall in its
discretion determine that such change equitably requires an
adjustment in the number or kind of Shares subject to outstanding
Options or which have been reserved for issuance pursuant to the
Plan but are not then subject to an Option, then such adjustments
shall be made by the Committee and shall be effective for all
purposes of the Plan and on each outstanding Option that involves
the particular type of stock for which a change was effected.
<PAGE>
4.6 Rights to Subscribe. If the Company shall at any time
grant to the holders of its Stock rights to subscribe pro rata for
additional Shares thereof or for any other securities of the
Company or of any other corporation, there shall be reserved with
respect to the Shares then subject to an Option held by any Option
Holder of the particular class of Stock involved, the Stock or
other securities which the Option Holder would have been entitled
to subscribe for if immediately prior to such grant the Option
Holder had exercised his entire Option. If, upon exercise of any
such Option, the Option Holder subscribes for the additional Stock
or other securities, the Option Holder shall pay to the Company the
price that is payable by the Option Holder for such Stock or other
securities.
4.7 General Adjustment Rules. No adjustment or substitution
provided for in this Section 4 shall require the Company to issue
a fractional Share under any Option agreement and the total
substitution or adjustment with respect to each Option agreement
shall be limited by deleting any fractional Share. In the case of
any such substitution or adjustment, the Option Price per Share in
each such Option agreement shall be equitably adjusted by the
Committee to reflect the greater or lesser number of shares of
Stock or other securities into which the Stock subject to the
Option may have been changed.
4.8 Determination by the Committee, Etc. Adjustments under
this Section 4 shall be made by the Committee, whose determinations
with regard thereto shall be final and binding.
SECTION 5
Participation
5.1 Eligible Employees. The Committee, in its sole and
absolute discretion, shall select those Eligible Employees to be
Option Holders in the Plan. Eligible Employees shall be selected
from the employees of the Company who are performing services in
the management, operation and growth of the Company, and
contribute, or are expected to contribute, to the achievement of
long-term corporate objectives. Eligible Employees may be granted
from time-to-time one or more Options; provided, however, that the
grant of each such Option shall be separately approved by the
Committee, and receipt of one such Option shall not result in
automatic receipt of any other Option. Upon determination by the
Committee that an Option is to be granted to an Eligible Employee,
written notice shall be given to such person, specifying the terms,
conditions, rights and duties related thereto.
<PAGE>
5.2 Eligible Independent Contractors. The Committee, in its
sole and absolute discretion, shall select those Eligible
Independent Contractors to be Option Holders in the Plan. Eligible
Independent Contractors shall be selected from the consultants and
other individuals who are providing services to the Company with
respect to the operation and growth of the Company, and contribute,
or are expected to contribute, to the achievement of long-term
corporate objectives. Eligible Independent Contractors may be
granted from time-to-time one or more Options; provided, however,
that the grant of each such Option shall be separately approved by
the Committee, and receipt of one such Option shall not result in
automatic receipt of any other Option. Upon determination by the
Committee that an Option is to be granted to an Eligible
Independent Contractor, written notice shall be given to such
person, specifying the terms, conditions, rights and duties related
thereto.
SECTION 6
Stock Options
6.1 Grant of Options to Eligible Employees and Eligible
Independent Contractors. Coincident with or following designation
for participation in the Plan, an Eligible Employee and an Eligible
Independent Contractor may be granted one or more Options. The
Committee in its sole discretion shall designate whether an option
is to be considered an Incentive Stock Option or a Non-Qualified
Option. Incentive Stock Options may be granted only to Eligible
Employees. The Committee may grant both an Incentive Stock Option
and a Non-Qualified Option to the same Eligible Employee at the
same time or at different times. Incentive Stock Options and Non-Qualified
Options, whether granted at the same or different times, shall be deemed to
have been awarded in separate grants and shall be clearly identified, and
in no event shall the exercise of one Option affect the right to exercise
any other Option or affect the number of Shares for which any other Option
may be exercised. The maximum number of Shares that may be subject to
Options granted to any Eligible Employee or Eligible Independent Contractor
during the term of the Plan shall be 500,000 Shares.
<PAGE>
6.2 Option Agreements. Each Option granted under the Plan
shall be evidenced by a written Option agreement, which shall be
entered into by the Company and the Option Holder to whom the
Option is granted, and which shall contain the following terms and
conditions, as well as such other terms and conditions, not
inconsistent herewith, as the Committee may consider appropriate in
each case.
(a) Number of Shares. Each Option agreement shall state
that it covers a specified number of Shares, as determined by the
Committee.
(b) Price. Each Option granted pursuant to the Plan
shall have an Option Price that determined by the Committee and set
forth in the Option agreement. An Incentive Stock Option shall
have an Option Price that is equal to or greater than the Fair
Market Value of the Stock on the date the Option is granted.
(c) Duration and Exercise of Options. Each Option
agreement shall state the period of time, as determined by the
Committee within which the option may be exercised by the Option
Holder (the "Option Period") . The Option Period must end, in all
cases, not more than ten years from the date an Option is granted.
Each Option agreement shall also state the periods of time, if any,
as determined by the Committee, when incremental portions of each
Option may be exercised. Each Option agreement covering an Option
granted to an Option Holder who is subject to Section 16(b) of the
Securities Exchange Act of 1934 shall provide that such Option may
not be exercised until at least 6 months after the date the Option
was granted.
(d) Eligible Employees: Termination of Employment,
Death, Retirement, Etc. Each Option agreement shall provide as
follows with respect to the exercise of the Option:
(i) If the employment of the Option Holder by the
Company is terminated within the Option Period for cause,
as determined by the Company, the Option shall thereafter
be void for all purposes. As used in this subsection
6.2(d), "cause" shall mean a gross violation, as
determined by the Company, of the Company's established
policies and procedures, provided that the effect of this
subsection 6.2(d) shall be limited to determining the
consequences of a termination and that nothing in this
subsection 6.2(d) shall restrict or otherwise interfere
with the Company's discretion with respect to the
termination of any employee.
<PAGE>
(ii) If the Option Holder retires from employment by
the Company or an Affiliated Corporation within the
Option Period but after attaining age 65, the Option may
be exercised by the Option Holder (or, in the case of his
death, by those entitled to do so under his will or by
the laws of descent and distribution) within three months
following his retirement (if otherwise within the Option
Period), but not thereafter. In any such case, the
Option may be exercised only as to the Shares as to which
the Option had become exercisable on or before the date
of the Option Holder's retirement from employment or
death.
(iii) If the Option Holder dies within the
Option Period, while employed by the Company or an
Affiliated Corporation or within the three-month period
referred to in (iv) below, the Option may be exercised by
those entitled to do so under his will or by the laws of
descent and distribution within fifteen months following
his death (if otherwise within the Option Period), but
not thereafter. In any such case the Option may be
exercised only as to the Shares as to which the Option
had become exercisable on or before the date of the
Option Holder's death.
(iv) If the employment of the Option Holder by the
Company is terminated (which for this purpose means that
the Option Holder is no longer employed by the Company or
by an Affiliated Corporation) within the Option Period
for any reason other than for cause, retirement after
attaining age 65, or death, the Option may be exercised
by the Option Holder within three months following the
date of such termination (if otherwise within the Option
Period), but not thereafter. In any such case, the
Option may be exercised only as to the Shares as to which
the Option had become exercisable on or before the date
of termination of employment.
(e) Eligible Independent Contractors: Termination of
Services, Death. Each Option agreement shall provide as follows
with respect to the exercise of the Option:
<PAGE>
(i) If the services of the Option Holder terminate
within the Option Period other than on account of cause
or the Option Holder's death, the Option may be exercised
during the remainder of the Option Period. In any such
case, the Option may be exercised only as to the Shares
as to which the Option had become exercisable on or
before the date of termination of services.
(ii) If the services of the Option Holder terminate
within the Option Period for cause, as determined by the
Company, the Option shall thereafter be void for all
purposes. If the agreement between the Company and an
Independent Contractor provides for termination of the
agreement for "cause," the term "cause" for purposes of
this subsection shall have the same meaning as in such
agreement.
(iii) If the Option Holder dies during the
Option Period, the Option may be exercised by those
entitled to do so under the Option Holder's will or by
the laws of descent and distribution for fifteen months
after the Option Holder's death (if otherwise in the
Option Period) , but not thereafter. In any such case,
the Option may be exercised only as to the Shares as to
which the Option had become exercisable on or before the
date of the Option Holder's death.
(f) Transferability. Each Option agreement shall
provide that the Option granted therein is not transferable by the
Option Holder except by will or pursuant to the laws of descent and
distribution, and that such Option is exercisable during the Option
Holder's lifetime only by him, or in the event of disability or
incapacity, by his guardian or legal representative; provided
however, that, during the Option Holder's lifetime, the Option
Holder may transfer a Non-Qualified Option to a member of the
Option Holder's immediate family, a trust of which members of the
Option Holder's immediate family are the only beneficiaries, or a
partnership of which members of the Option Holder's immediate
family or trusts for the sole benefit of the Option Holder's
immediate family are the only partners. Immediate family means the
Option Holder's spouse, children, stepchildren, grandchildren,
parents, grandparents, siblings (including half brothers and
sisters), and individuals who are family members by adoption.
During the Option Holder's lifetime, the Option Holder may not
transfer an Incentive Option under any circumstance.
(g) Consideration for Grant of Option. Each Option
agreement held by an Option Holder shall contain the Option
Holder's agreement to remain in the employment or service of the
Company, at the pleasure of the Company, for a continuous period of
at least one year after the date of such Option agreement, at the
salary rate or other compensation in effect on the date of such
agreement or at such changed rate as may be fixed, from time to
time, by the Company. Nothing in this paragraph shall offset or
impair the Company's right to terminate the services of any
employee. An Option agreement between the Company and an Eligible
Independent Contractor shall contain the Option Holder's agreement
to comply with all of the terms and conditions or specified terms
and conditions of the agreement between the Option Holder and the
Company.
<PAGE>
(h) Exercise, Payments, Etc. Each Option agreement
shall provide that the method for exercising the Option granted
therein shall be by delivery to the Corporate Secretary of the
Company of written notice specifying the number of Shares with
respect to which such Option is exercised and payment of the Option
Price. Such notice shall be in a form satisfactory to the
Committee and shall specify the particular Option (or portion
thereof) that is being exercised and the number of Shares with
respect to which the option is being exercised. The exercise of
the Option shall be deemed effective upon receipt of such notice by
the Corporate Secretary and payment to the Company. The purchase
of such Stock shall take place at the principal offices of the
Company upon delivery of such notice, at which time the Option
Price of the Stock shall be paid in full. A properly executed
certificate or certificates representing the Stock shall be issued
by the Company and delivered to the Option Holder except where
payment is made pursuant to subparagraph (E) below in which case
the certificate shall be delivered to the broker.
The Option Price shall be paid by any of the
following methods or any combination of the following methods, as
the Committee shall determine in its sole discretion:
(A) in cash;
(B) by certified or cashier's check payable to
the order of the Company;
(C) by delivery to the Company of certificates
representing the number of Shares then owned by the
Option Holder, the Fair Market Value of which equals the
Option Price of the Stock purchased pursuant to the
Option, properly endorsed for transfer to the Company;
provided however, that no Option may be exercised by
delivery to the Company of certificates representing
Stock, unless such Stock had been held by the Option
Holder for more than six months;
(D) by delivery to the Company of a promissory
note, which shall be in a principal amount equal to the
Option Price plus any federal and state income tax
required to be withheld; which shall be full recourse and
secured by all or a portion of the Stock acquired
pursuant to the exercise of the Option; which shall bear
interest at a rate determined by the Committee, but not
lower than the rate required to avoid the imputation of
interest under the Code; which shall provide for level
quarterly payments of interest and principal over its
term; which shall become payable in full upon the first
to occur of the fifth anniversary of the date the Option
is exercised, failure to pay any payment of principal and
interest within five days after it is due or termination
of the Option Holder's employment or service for any
reason; and which shall contain such other terms and
conditions including the provision of security in
addition to the Stock that the Company, in its sole
discretion, deems necessary or appropriate;
<PAGE>
(E) by delivery to the Company of a properly
executed notice of exercise together with irrevocable
instructions to a broker to deliver to the Company
promptly the amount of the proceeds of the sale of all or
a portion of the Stock or of a loan from the broker to
the Option Holder necessary to pay the exercise price.
(i) Date of Grant. An Option shall be considered as
having been granted on the date specified in the grant resolution
of the Committee.
(j) Withholding.
(i) Non-Qualified Options. Each Option agreement
covering Non-Qualified Options shall provide that, upon
exercise of the Option, the Option Holder shall make
appropriate arrangements with the Company to provide for
the amount of additional withholding required by Sections
3102 and 3402 of the Code and applicable state income tax
laws, including payment of such taxes through delivery of
shares of Stock or by withholding Stock to be issued
under the Option, as provided in Section 12.
(ii) Incentive Options. If an Option Holder makes
a disposition (as defined in Section 424(c) of the Code)
of any Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to the expiration of two
years from the date on which the Incentive Stock Option
was granted or prior to the expiration of one year from
the date on which the Option was exercised, the Option
Holder shall send written notice to the Company at its
principal office in Englewood, Colorado (Attention:
Corporate Secretary) of the date of such disposition, the
number of shares disposed of, the amount of proceeds
received from such disposition and any other information
relating to such disposition as the Company may
reasonably request. The Option Holder shall, in the
event of such a disposition, make appropriate
arrangements with the Company to provide for the amount
of additional withholding, if any, required by Sections
3102 and 3402 of the Code and applicable state income tax
laws.
<PAGE>
6.3 Restrictions on Incentive Stock Options.
(a) Initial Exercise. Notwithstanding any other
provision of the Plan, the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are
exercisable for the first time by an Option Holder in any calendar
year, under the Plan or otherwise, shall not exceed $100,000. For
this purpose, the Fair Market Value of the Shares shall be
determined as of the date of grant of the Option.
(b) Ten Percent Shareholders. Incentive Stock Options
granted to an Option Holder who is the holder of record of 10% or
more of the outstanding Stock of the Company shall have an Option
Price equal to 110% of the Fair Market Value of the Shares on the
date of grant of the Option. The Option Period for any such Option
shall not exceed five years.
6.4 Shareholder Privileges. No Option Holder shall have any
rights as a shareholder with respect to any Shares covered by an
Option until the Option Holder becomes the holder of record of such
Stock, and no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date
preceding the date such Option Holder becomes the holder of record
of such Stock, except as provided in section 4.
SECTION 7
Reorganization or Change of Control
<PAGE>
7.1 Reorganization. If the Company is merged or consolidated
with another corporation or the Company is a party to a
reorganization (other than a merger, consolidation or
reorganization in which the Company is the continuing corporation
and which does not result in any reclassification or change of
outstanding Shares), or if all or substantially all of the assets
or more than 50% of the outstanding voting stock of the Company is
acquired by any other corporation, business entity or person (other
than a sale or conveyance in which the Company continues as a
holding company of an entity or entities that conduct the business
or businesses formerly conducted by the Company), or in case of a
reorganization (other than a reorganization under the United States
Bankruptcy Code) or liquidation of the Company, the Committee
shall, as to the Plan and outstanding Options, either (i) make
appropriate provision for the adoption and continuation of the Plan
by the acquiring or successor corporation and for the protection of
any such outstanding Options by the substitution on an equitable
basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be
issuable with respect to the Stock, provided that no additional
benefits shall be conferred upon the Option Holders holding such
Options as a result of such substitution, and the excess of the
aggregate Fair Market Value of the Shares subject to Options
immediately after such substitution over the Option Price thereof
is not more than the excess of the aggregate Fair Market Value of
the Shares subject to such Options immediately before such
substitution over the Option Price thereof, and provided further
that any such substitution made with respect to Incentive Stock
Options shall comply with Section 424(a) of the Code, or (ii) upon
written notice to the Option Holders, provide that all unexercised
Options must be exercised within thirty (30) days of the date of
such notice or they will be terminated. If alternative (i) is
implemented, the Committee may, at its sole discretion, provide
that Options may be exercisable in full without regard to the
applicable exercise periods set forth in the Option agreements and
if alternative (ii) is implemented, Options shall be exercisable in
full without regard to the applicable exercise periods set forth in
the Option agreements.
7.2 Change of Control. In the event of a change in control
of the Company, as defined below, all Options shall become
exercisable in full, without regard to applicable exercise periods
set forth in the Option agreements. For purposes of the Plan, a
"change in control" shall be deemed to have occurred if during any
period of two consecutive years, individuals who at the beginning
of such period constitute the Board (and any new director whose
election by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority thereof.
<PAGE>
SECTION 8
Rights of Employees and Independent
Contractors; Option Holders
8.1 Employment. Nothing contained in the Plan or in any
Option granted under the Plan shall confer upon any Option Holder
any right with respect to the continuation of his employment by or
service with the Company, or interfere in any way with the right of
the Company, subject to the terms of any separate employment
agreement or other contract to the contrary, at any time to
terminate such Option Holder or to increase or decrease the
compensation of the Option Holder from the rate in existence at the
time of the grant of an Option. Whether an authorized leave of
absence, or absence in military or government service, shall
constitute a termination of employment shall be determined by the
Committee at the time.
8.2 Nontransferability. No right or interest of any Option
Holder in an Option granted pursuant to the Plan shall be
assignable or transferable during the lifetime of the Option
Holder, either voluntarily or involuntarily, or be subjected to any
lien, directly or indirectly, by operation of law, or otherwise,
including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of an Option Holder's death, an Option
Holder's rights and interests in Options shall, to the extent
provided in Section 6, be transferable by testamentary will or the
laws of descent and distribution, and payment of any amounts due
under the Plan shall be made to, and exercise of any Options may be
made by, the Option Holder's legal representatives, heirs or
legatees. If in the opinion of the Committee a person entitled to
exercise rights with respect to the Plan is disabled from caring
for his affairs because of mental condition, physical condition or
age, such rights shall be exercised by such person's guardian,
conservator or other legal personal representative upon furnishing
the Committee with evidence satisfactory to the Committee of such
status. Notwithstanding the foregoing an Option Holder may
transfer a Non-Qualified Option to the extent provided in section
6.
<PAGE>
SECTION 9
General Restrictions
9.1 Investment Representations. The Company may require any
person to whom an Option is granted, as a condition of exercising
such Option, to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that such
person is acquiring the Stock subject to the Option for his own
account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to
comply with Federal and applicable state securities laws. Legends
evidencing such restrictions may be placed on the certificates
evidencing the Stock.
9.2 Compliance with Securities Laws. Each Option shall be
subject to the requirement that if at any time counsel to the
Company shall determine that the listing, registration or
qualification of the Shares subject to such Option upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance or
purchase of Shares thereunder, such Option may not be exercised in
whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on
conditions acceptable to the Committee. Nothing herein shall be
deemed to require the Company to apply for or obtain such listing,
registration or qualification.
SECTION 10
Other Employee Benefits
The amount of any compensation deemed to be received by an
Option Holder as a result of the exercise of an Option shall not
constitute "earnings" with respect to which any other employee
benefits of such person are determined, including without
limitation benefits under any pension, profit sharing, life
insurance or salary continuation plan.
<PAGE>
SECTION 11
Plan Amendment, Modification and Termination
The Board may at any time terminate, and from time-to-time may
amend or modify, the Plan provided, however, that no amendment or
modification may become effective without approval of the amendment
or modification by the shareholders if shareholder approval is
required to enable the Plan to satisfy any applicable statutory or
regulatory requirements, or if the Company, on the advice of
counsel, determines that shareholder approval is otherwise
necessary or desirable.
SECTION 12
Withholding
12.1 Withholding Requirement. The Company's obligations to
deliver Shares upon the exercise of an Option shall be subject to
the option Holder's satisfaction of all applicable federal, state
and local income and other tax withholding requirements.
12.2 Withholding With Stock. At the time the Committee grants
an Option, it may, in its sole discretion, grant the Option Holder
an election to pay all such amounts of tax withholding, or any part
thereof, by electing to transfer to the Company, or to have the
Company withhold from Shares otherwise issuable to the Option
Holder, Shares having a value equal to the amount required to be
withheld or such lesser amount as may be elected by the Option
Holder. All elections shall be subject to the approval or
disapproval of the Committee. The value of Shares to be withheld
shall be based on the Fair Market Value of the Stock on the date
that the amount of tax to be withheld is to be determined (the "Tax
Date"). Any such elections by Option Holders to have Shares
withheld for this purpose will be subject to the following
restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Option Holder is an officer or director of
the Company within the meaning of Section 16 of the 1934 Act
("Section 16"), the Option Holder must satisfy the requirements of
such Section 16 and any applicable rules thereunder with respect to
the use of Stock to satisfy such tax withholding obligation.
<PAGE>
SECTION 13
Requirements of Law
13.1 Requirements of Law. The issuance of Stock and the
payment of cash pursuant to the Plan shall be subject to all
applicable laws, rules and regulations.
13.2 Governing Law. The Plan and all Option agreements
hereunder shall be construed in accordance with and governed by the
laws of the State of Colorado.
SECTION 14
Duration of the Plan
The Plan shall terminate at such time as may be determined by
the Board of Directors, and no Option shall be granted after such
termination. If not sooner terminated under the preceding
sentence, the Plan shall fully cease and expire at the close of
business on February 20, 2002. Options outstanding at the time of
the Plan termination may continue to be exercised or earned in
accordance with their terms.
Dated: February 6, 1997
UNIQUE MOBILITY, INC.
/s/ Donald A. French
By: Donald A. French
Treasurer
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TABLE OF CONTENTS
Page
SECTION 1 INTRODUCTION. . . . . . . . . . . . . . . . .1
1.1 Establishment . . . . . . . . . . . . . . . .1
1.2 Purposes. . . . . . . . . . . . . . . . . . .1
1.3 Effective Date. . . . . . . . . . . . . . . .1
SECTION 2 DEFINITIONS . . . . . . . . . . . . . . . . .1
2.1 Definitions . . . . . . . . . . . . . . . . .1
2.2 Gender and Number . . . . . . . . . . . . . .3
SECTION 3 PLAN ADMINISTRATION . . . . . . . . . . . . .3
3.1 In General. . . . . . . . . . . . . . . . . .3
3.2 Eligible Employees. . . . . . . . . . . . . .3
3.3 Eligible Independent Contractors. . . . . . .3
SECTION 4 STOCK SUBJECT TO THE PLAN. . . . . . . . . . . . .4
4.1 Number of Shares. . . . . . . . . . . . . . .4
4.2 Unused and Forfeited Stock. . . . . . . . . .4
4.3 Adjustments for Stock Split, Stock Dividend, Etc.4
4.4 Dividend Payable in Stock of Another Corporation,
Etc. . . . . . . . . . . . . . . . . . . . . . . .4
4.5 Other Changes in Stock. . . . . . . . . . . .5
4.6 Rights to Subscribe . . . . . . . . . . . . .5
4.7 General Adjustment Rules. . . . . . . . . . .5
4.8 Determination by the Committee, Etc.. . . . .5
SECTION 5 PARTICIPATION. . . . . . . . . . . . . . . . . . .5
5.1 Eligible Employees. . . . . . . . . . . . . .5
5.2 Eligible Independent Contractors. . . . . . .6
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SECTION 6 STOCK OPTIONS. . . . . . . . . . . . . . . . . . .6
6.1 Grant of Options to Eligible Employees and
Eligible Independent Contractors . . . . . . . . .6
6.2 Option Agreements . . . . . . . . . . . . . .6
6.3 Restrictions on Incentive Stock Options . . 10
6.4 Shareholder Privileges. . . . . . . . . . . 11
SECTION 7 REORGANIZATION OR CHANGE OF CONTROL. . . . . . . 11
7.1 Reorganization. . . . . . . . . . . . . . . 11
7.2 Change of Control . . . . . . . . . . . . . 11
SECTION 8 RIGHTS OF EMPLOYEES AND INDEPENDENT CONTRACTORS;
OPTION HOLDERS 12
8.1 Employment. . . . . . . . . . . . . . . . . 12
8.2 Nontransferability. . . . . . . . . . . . . 12
SECTION 9 GENERAL RESTRICTIONS. . . . . . . . . . . . 12
9.1 Investment Representations. . . . . . . . . 12
9.2 Compliance with Securities Laws . . . . . . 13
SECTION 10 OTHER EMPLOYEE BENEFITS. . . . . . . . 13
SECTION 11 PLAN AMENDMENT, MODIFICATION AND TERMINATION . . 13
SECTION 12 WITHHOLDING. . . . . . . . . . . . . . 13
12.1 Withholding Requirement . . . . . . . . . . 13
12.2 Withholding With Stock. . . . . . . . . . . 13
SECTION 13 REQUIREMENTS OF LAW. . . . . . . . . . 14
13.1 Requirements of Law . . . . . . . . . . . . 14
13.2 Governing Law . . . . . . . . . . . . . . . 14
SECTION 14 DURATION OF THE PLAN . . . . . . . . . 14
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AMENDMENT TO UNIQUE MOBILITY, INC.
1992 STOCK OPTION PLAN
RECITALS
The Board of Directors of Unique Mobility, Inc., a Colorado
corporation (the "Company"), established the Unique Mobility, Inc.
1992 Stock Option Plan (the "Option Plan") effective February 21,
1992. In Section 11 of the Option Plan, the Company reserved the
right and power to amend the Option Plan from time to time. The
Plan is amended as set forth below, to be effective as of August
19, 1997.
AMENDMENT
1. The first sentence of section 4.1 shall be amended in its
entirety to provide as follows:
"A total of four million Shares are authorized for
issuance under the Plan in accordance with the provisions
of the Plan and subject to such restrictions or other
provisions as the Committee may from time to time deem
necessary."
2. The last sentence of section 6.1 shall be amended in its
entirety to provide as follows:
"The maximum number of Shares that may be subject to
Options granted to any Eligible Employee or Eligible
Independent Contractor during the term of the Plan shall
be 1,000,000 Shares."
IN WITNESS WHEREOF, this Amendment has been executed this 30th day
of June, 1997, to be effective as of August 19, 1997.
UNIQUE MOBILITY, INC.
/s/ Donald A. French
By: Donald A. French
Treasurer
