UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A
SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rules
14a-6(e)(2) and 14c-5(d)(2))
[x] Definitive Proxy/Information Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Unique Mobility, Inc.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
<PAGE>
UNIQUE MOBILITY, INC.
425 Corporate Circle
Golden, Colorado 80401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 11, 1999
The annual meeting of shareholders of Unique Mobility, Inc. will be held on
August 11, 1999, at 10:00 a.m., Denver Time at the Hyatt Regency Denver Hotel,
1750 Welton Street, Denver, Colorado 80202 for the following purposes:
1. To elect a Board of six (6) directors to serve for the ensuing year
and thereafter until their successors are duly elected and qualified.
2. To consider and vote upon a proposal to ratify the appointment of KPMG
LLP to act as independent auditors of the Company for the fiscal year
ending March 31, 2000.
3. To consider and vote upon a proposal to increase the number of shares
available for grant under the Unique Mobility, Inc. 1992 Stock Option
Plan.
4. To consider and vote upon a proposal to amend the articles of
incorporation to authorize a new class of 10,000,000 shares of
preferred stock.
5. 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 23, 1999. 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
June 25, 1999
/s/ Linnea Gillman
___________________________________
Linnea Gillman, Corporate 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 11, 1999
This proxy statement is being mailed on or about June 25, 1999, 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 11, 1999. The last Annual Meeting of
Shareholders was held on September 14, 1998.
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 predominately 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 Corporate Investor Communications, Inc., in which
case the cost, which is not expected to exceed $5,500, will be borne by the
Company.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders of record at the close of business on June 23, 1999, will be
entitled to vote at the meeting. As of that date there were 16,568,522 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. The proposals to ratify
the appointment of auditors and to increase the number of
<PAGE>
shares under the Incentive and Non-Qualified Stock Option Plan 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.
The proposal to amend the articles of incorporation must be approved by the
holders of two-thirds of the outstanding shares.
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 votes to
ratify the appointment of auditors and to increase the number of shares under
the Incentive and Non-Qualified Stock Option Plan and will be counted as votes
against the proposal to amend the articles of incorporation. 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 the 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, except that it will be
counted as a vote against the proposal to amend the articles of incorporation.
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
seven 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>
<TABLE>
<CAPTION>
Officer or
Position with Director
Name Age the Company Since Business Experience
<S> <C> <C> <C> <C>
Ray A. Geddes 66 Chairman of the Board and Chief 1981 President from 1991 through 1995,
Executive Officer; Member of Chairman of the Board of Directors and
Executive Committee and Chief Executive Officer since 1984.
Compensation and Benefits Committee
Frank Hodsoll 61 Director and Member of Compensation 1993 Consultant to industry and government
and Benefits Committee, Stock since 1992; Deputy Director for
Option Committee and Audit Committee Management, United States Office of
Management and Budget (Washington, D.C.)
from 1991 through 1992.
William G. 55 Director, President and Chief 1992 President and Chief Operating Officer
Rankin Operating Officer since January 1996; Executive Vice
President - Operations from 1992 through
1995.
H.J. Young 69 Director and Member of Executive 1994 Senior Counselor, Kearns and West
Committee and Audit Committee. (Washington, D.C.) an international
public relations firm since 1994; Senior
Vice President, Edison Electric Institute
(Washington D.C.) from 1982 through 1994.
J.B. Richey 62 Director, Member of the Executive 1995 President, Invacare Technologies and
Committee, Audit Committee and Senior Vice President-Total Quality
Stock Option Committee Management since 1992. Director,
Invacare Corporation, Steris Corporation
and Royal Appliance Manufacturing Co.
Michael G. 48 Director and Vice President - 1998 Vice President Electronics Manufacturing
Franklin Electronics Manufacturing since May 1998; President Franklin
Manufacturing Company since 1985.
</TABLE>
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 Agreement 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' common stock and is not in default of certain agreements.
Pursuant to this Agreement the Company has nominated Mr. Richey to the
Company' Board of Directors.
Pursuant to the Share Exchange Agreement by which the Company acquired all
of the stock of Franklin Manufacturing Company, the Company agreed to
appoint Mr. Franklin to the Company's Board of Directors and to nominate
him to the Board of Directors at each shareholder meeting during the term
of his employment agreement, which expires on April 30, 2001.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING NOMINEES.
During the fiscal year ended March 31, 1999 the Board of Directors held meetings
on fourteen occasions. Each incumbent director attended or participated in more
than seventy-five percent of the meetings of the Board and board committees on
which he served during the period he was a director. Participation at meetings
was sometimes by telephone, which is authorized under Colorado law. The votes of
each director are recorded in the minutes for each matter considered by the
Board of Directors. None of the directors listed above has been involved during
the last five years in any legal proceedings that are material to an evaluation
of the ability or integrity of that person to act as a director of the Company.
The Board of Directors has an Executive Committee, Audit Committee, Compensation
and Benefits Committee and a Stock Option Committee. The Company does not have a
Nominating Committee. The Executive Committee, which makes policy
recommendations to the Board of Directors, consists of three directors and did
not hold any meetings during fiscal 1999.
The Audit Committee, which reviews the annual audit performed by the Company'
independent auditors, consists of three directors and met one time during fiscal
1999.
See also "Compensation and Benefits Committee and Stock Option Committee Report
on Executive Compensation" below.
MANAGEMENT
The executive officers of the Company are:
Name Age Position
Ray A. Geddes 66 Chairman of the Board of Directors and
Chief Executive Officer
William G. Rankin 55 Director, President and Chief Operating
Officer
Donald A. French 43 Treasurer and Chief Financial Officer
Michael G. Franklin 48 Director, Vice President-Electronics
Manufacturing
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 a
Director of Taiwan UQM Electric Co., Ltd. ("Taiwan UQM"), a Taiwan-based
corporation of which Unique owns 38%, and co-managing director of Unique
Mobility Europa GmbH ("UQM Europa")a Germany based corporation of which Unique
owns 33%. 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
<PAGE>
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 Master of Business Administration and
Juris Doctor Degree from the University of Michigan. He is 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 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.
Donald A. French, Treasurer and Chief Financial Officer, joined the Company in
1987. Mr. French served as Corporate Secretary from 1987 through 1988 and
Controller from 1987 through 1998. 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.
Michael G. Franklin, Vice President Electronics Manufacturing, member of the
Board of Directors and President, Franklin Manufacturing Company, joined the
Company in 1998. Mr. Franklin founded and has served as President and Director
of Franklin Electronics Company, a distributor of electronics components since
1983 and Franklin Manufacturing Company, a manufacturer of electronic and wire
harness assemblies since 1985. From 1980 through 1983 Mr. Franklin served as
Regional Product Specialist for the Connector Division of Panduit Corporation
and from 1977 through 1980 as a Regional Sales Representative for Amp., Inc.
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,
the Chicago Stock Exchange and the Pacific Stock Exchange. The Company is
required to report in this statement any failure to file timely reports during
fiscal 1999. Based on its review of Form 3, Form 4 and Form 5 filings, the
Company believes that all required reports were filed timely during fiscal 1999.
<PAGE>
Executive Compensation
The following table sets forth information concerning compensation earned by the
Chief Executive Officer and any other executive officer whose total annual
salary and bonus exceeded $100,000 for the years ended March 31, 1999 and 1998,
the five month transition period ended March 31, 1997 and the year ended October
31, 1996:
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
Ray A. Geddes, 1999 $196,033 $ -0- 89,262 $32,887 (1)
Chairman and 1998 $174,953 $ -0- 149,731 $31,266 (1)
Chief Executive 1997(3) $166,622 $ -0- 78,000 $32,415 (1)
Officer 1996 $162,533 $ -0- 98,926 $17,870 (1)
William G. Rankin, 1999 $165,991 $ -0- 77,224 $19,656 (1)
Director, President 1998 $148,248 $ -0- 96,377 $13,968 (2)
and Chief Operating 1997(3) $141,198 $ -0- 127,459 $11,124
Officer 1996 $136,873 $ -0- 80,478 $ 6,978 (2)
Donald A. French 1999 $129,792 $ -0- 60,521 $19,556 (1)
Treasurer and 1998 $111,321 $ -0- 74,892 $13,110 (1)
Chief Financial 1997(3) $101,206 $ -0- 94,541 $10,164 (2)
Officer 1996 $ 97,519 $ -0- 59,355 $ 5,572 (2)
Michael G. Franklin,
Director and Vice-
President Electronics
Manufacturing 1999(4) $129,231 $ -0- 174,710 $13,804 (1)
(1) Represents matching contributions to the Company's 401(k) Savings Plan,
Company paid car allowance, certain professional fees, and key man life
insurance premiums.
(2) Represents matching contributions to the Company's 401(k) Savings Plan and
key man life insurance premiums.
(3) Based on the period April 1, 1996, through March 31, 1997.
(4) Represents base salary from May 1, 1998, the date Mr. Franklin joined the
company, through March 31, 1999 and includes compensation paid to Deborah
Franklin, wife of Mr. Franklin.
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
paid time off.
<PAGE>
Option Grants During Fiscal 1999
Potential
Realizable
Value of
Percentage Assumed
of Total Annual Rates
Number of Options of Stock
Securities Granted to Price
Name of Underlying Employees Exercise Expira- Appreciation
Individual Options in Fiscal Price Per tion for the
and Position Granted (1) 1999 Share Date Option Term
5%(3) 10%(4)
Ray A. Geddes
Chairman and
Chief Executive
Officer 89,262 13.7% $4.38 3-22-09 $245,877 $ 623,102
William G. Rankin
Director, President
And Chief Operating
Officer 77,224 11.9% $4.38 3-22-09 $212,718 $ 539,069
Donald A. French
Treasurer and
Chief Financial
Officer 60,521 9.3% $4.38 3-22-09 $166,709 $ 422,472
Michael G. Franklin
Director and Vice-
President Electronics
Manufacturing (2) 100,000 15.4% $7.75 4-30-08 $487,393 $1,235,150
74,710 11.5% $4.38 3-22-09 $205,793 $ 521,520
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 each of the next three annual anniversary dates following the
date of grant. Additionally, the options are subject to forfeiture and have
limitations as to marketability.
(2) Includes options to acquire 3,718 shares of common stock to Deborah
Franklin, wife of Mr. Franklin. Mr. Franklin disclaims beneficial ownership
of the options granted to Mrs. Franklin.
(3) The market capitalization of the Company, as determined by multiplying the
outstanding number of shares of common stock at fiscal 1999 year end by the
potential realizable share value achieved by applying the price
appreciation methodology utilized in this table, would be approximately
$117 million versus a market capitalization of approximately $72 million at
March 31, 1999. Accordingly, the potential realizable value at assumed
<PAGE>
annual rates of stock price appreciation over the ten-year term to all
shareholders is approximately $45 million assuming no increase in the
number of shares of common stock outstanding over the ten-year term.
(4) The market capitalization of the Company, as determined by multiplying the
outstanding number of shares of common stock at fiscal 1999 year end by the
potential realizable share value achieved by applying the price
appreciation methodology utilized in this table, would be approximately
$187 million versus a market capitalization of approximately $72 million at
March 31, 1999. Accordingly, the potential realizable value at assumed
annual rates of stock price appreciation over the ten-year term to all
shareholders is approximately $115 million assuming no increase in the
number of shares of common stock outstanding over the ten-year term.
Aggregate Option Exercises During Fiscal Year 1999
and Option Values at the End of Fiscal Year 1999
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 Acquired Value Exer- Unexer- Exer- Unexer-
and Position on Exercise Realized cisable cisable cisable cisable
Ray A. Geddes,
Chairman and
Chief Executive
Officer 218,462 $461,085 356,310 215,083 $ 38,568 $ 34,736
William G.
Rankin, Director,
President and
Chief Operating
Officer 21,000 $ 49,640 540,033 183,962 $440,770 $ 52,643
Donald A. French
Treasurer and
Chief Financial
Officer 27,900 $ 65,291 273,608 141,963 $114,778 $ 39,242
Michael G. Franklin
Director and Vice-
President Electronics
Manufacturing (1) -0- -0- -0- 174,710 $ -0- $ 4,483
(1) Includes data for Deborah Franklin, wife of Mr. Franklin. Mr. Franklin
disclaims beneficial ownership of the shares held by Mrs. Franklin.
<PAGE>
Compensation and Benefits Committee and
Stock Option Committee Report on Executive Compensation1
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. Iacocca,
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 Iacocca.
The Compensation and Benefits Committee determines all elements of executive
compensation except grants of stock options. Mr. Geddes 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, and all
employees generally, is based on beliefs and principles designed to align
compensation with business strategy, company values, and management initiatives.
The program:
o 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.
o Integrates compensation programs with both the Company's annual and
long-term strategic planning processes.
o Supports a performance-oriented environment that rewards performance with
respect to Company goals.
o 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.
<PAGE>
All employees may participate in the following benefit plans upon the attainment
of certain entrance requirements:
o Unique Mobility Health Benefit Plan
o 401(K) Savings Plan of Unique Mobility, Inc.
o 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:
o Unique Mobility, Inc. 1992 Stock Option Plan
o 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 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 considered the performance of the Chief
Executive Officer, without the Chief Executive Officer present for fiscal 1999.
Accordingly, this report covers the CEO's performance evaluation for fiscal
1999.
The Chief Executive Officer's performance is evaluated based principally on the
following criteria:
o The achievement of the Company's long-term business goals and objectives
during the immediately preceding one year period.
o The achievement of specified individual and overall Company objectives
during the immediately preceding one year period.
o 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
<PAGE>
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:
o The number and quality of strategic alliances and acquisitions 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. In addition, the Company has adopted a strategy
to grow through acquisition of companies whose operations or markets are
synergistic with the Company's operations. During fiscal 1999 the Company
initiated discussions with several prospective strategic alliance partners
and formed Unique Mobility Europa GmbH, a strategic alliance with Energy
Conversion Devices, Inc. and EV Global Motors Company directed toward the
introduction of a commercial all electric fleet vehicle. 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, the establishment of manufacturing
operations for such systems, and the manufacture of conventional starters
and alternators through Taiwan UQM Electric Co., Ltd. In addition, the
Company completed the acquisition of Franklin Manufacturing Company which
expanded the Company's manufacturing capability and revenue base.
o The capitalization and financial resources available to the Company as
measured against targeted objectives. The Company completed an offering of its
common stock under Regulation D during fiscal 1999 sufficient to finance the
acquisition of Franklin Manufacturing Company. In addition, the Company secured
bank lines of credit sufficient to support its expanded operations and term bank
equipment lines sufficient to expand manufacturing capacity at the company's
Unique Power Products and Franklin Manufacturing units.
o The number and quality of sponsored development programs and their
contribution to the technical objectives of the Company. Although revenue
from sponsored development programs declined during fiscal 1999, the
quality of programs executed during fiscal 1999 met the Company's objective
of directing such activities toward the development of products and
technology that have near term commercialization potential.
o Technology advances and enhancements arising during the measurement period
from internally funded research and development activities. The Company
developed products which extended its high voltage product line during
fiscal 1999 as a result of cost-shared and sponsored research and
development activities. In addition, the Company was granted a U.S. patent
covering the packaging of an electromechanical brake inside a motor and
filed for patent coverage on the control signal output enabling the
electronic control of its gearless brushless direct drive electric motor.
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.
In addition, the Compensation and Benefits Committee conducted a survey of the
compensation paid to the Chief Executive Officer, Chief Operating Officer and
<PAGE>
Chief Financial Officer of six publicly-traded companies of similar market
capitalization and operating within similar markets. The results of this
analysis indicated that the base compensation of the aforementioned executive
officers was substantially below the median compensation level of the executive
officers of the peer group of companies studied.
Based on the compensation survey and the factors discussed above, the
Compensation and Benefits Committee elected to increase the Chief Executive
Officer's salary twenty-five (25) percent to $229,317 and grant the Chief
Executive Officer options to acquire 89,262 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 and compensation levels relative to the surveyed
group of peer companies.
The Company has executed employment agreements with three 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. 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 1999 the Stock Option Committee considered three stock option
grants and recommended for grant options to acquire 650,000 shares of common
stock to employees of the Company, of which options to acquire, 401,717 shares
of common stock, or 61.8 percent, were granted to executive officers as a group.
The Company did not grant any options to acquire shares of common stock to
consultants during fiscal 1999. All options granted during fiscal 1999 to
employees 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:
Ray A. Geddes
Frank Hodsoll
Lee Iacocca
The Stock Option Committee of the Board of Directors:
Frank Hodsoll
J. B. Richey
Lee Iacocca
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation and Benefits Committee currently consists of three
directors (Messrs. Geddes, Iacocca and Hodsoll) and the Stock Option Committee
currently consists of three outside directors (Messrs. Hodsoll, Iacocca 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 considered executive
compensation during fiscal 1999. 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
considered stock option grants three times during fiscal 1999.
Mr. Geddes is Chairman of the Board and Chief Executive Officer.
Mr. Richey, who serves on the Stock Option Committee, is an officer and director
of Invacare, which owns .08 percent of the Company's common stock. In December
1995, the Company completed a stock purchase agreement with Invacare Corporation
pursuant to which, in January 1996, Invacare acquired 129,032 shares of the
Company's common stock at $3.88 per share. In addition, in August 1997 the
Company completed an exclusive worldwide license and supply agreement with
Invacare covering the commercial use of UQM products in the field of medical
and health care products.
The Company has further agreed to use its best efforts to have a representative
of Invacare elected to the Company's board of directors for so long as Invacare
owns more than 100,000 shares of the Company's common stock. Mr. J. B. Richey,
Senior Vice President-Total Quality Management and Director of Invacare
Corporation, was appointed to the Company's Board of Directors in 1995 pursuant
to this provision, and is a management nominee in these proxy materials.
EV Global Motors Company beneficially owns 978,864 shares or 5.91 percent of the
Company's common stock. In addition, EVG owns a 19 percent interest in UQM
Europa, a German corporation of which Mr. Geddes is co-managing director, and in
which the Company holds a 33 percent interest. Mr. Iacocca, who serves on the
Compensation and Benefit Committee and Stock Option Committee, is an officer and
director of EVG. The Company owns 400,000 shares of EVG common stock and
Mr. Geddes, the Company's Chairman and Chief Executive Officer, holds options to
acquire 5,000 shares of EVG common stock.
In June 1999, Unique acquired an approximately 9.5 percent participation in a
$5.225 million loan from EVG to Windermere Eco Development Limited, a Bahamian
company ("WED") for $500,000 in cash. WED is an environmentally sensitive
development on Windermere Island in the Bahamas. The entire loan is convertible
into approximately 50.4 percent of the total outstanding equity of WED.
Therefore, if EVG converts the loan, Unique will have the right to receive
approximately 4.82 percent of the equity of WED.
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
<PAGE>
for a term expiring December 31, 1999. The Employment Agreements provide that
Messrs. Geddes, Rankin and French will receive an annual base salary of
$229,317, $194,041 and $152,073, respectively. In addition, the Company has
entered into an Employment Agreement with Mr. Franklin expiring April 30, 2001.
The Employment Agreement provides that Mr. Franklin shall receive an annual base
salary of $140,000. Messrs. Geddes, Rankin, French and Franklin also receive the
use of an automobile and may receive bonuses and stock options. Messrs. Geddes,
Rankin, French and Franklin were granted options to acquire 89,262, 77,224,
60,521 and 174,710 shares of common stock, respectively during fiscal 1999.
Messrs. Geddes, Rankin, and French's Employment Agreements provide that 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. Mr. Franklin's
Agreement provides that if employment is terminated without cause during the
term of the Agreement, that Mr. Franklin's salary under the Agreement shall
continue for the remaining term of the Agreement.
The employment agreements further provide that the Company shall maintain at its
expense, life insurance coverage on Messrs. Geddes, Rankin, French and Franklin
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, French and
Franklin 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, and Mr. Franklin for a term of three years, will not become
affiliated with any person, firm or corporation whose business is similar to or
in competition with the Company. Messrs. Geddes, Rankin and French have agreed
that for a period of one year after termination of their Employment Agreement,
and in the case of Mr. Franklin, for a term of three years, to not 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. This plan
was amended in 1999. Pursuant to this Amendment, Directors of the Company who
are not officers may elect to receive an annual retainer of $15,000 in cash or
the grant of options to acquire that number of shares of the Company's common
stock that is equivalent to $15,000 as determined by utilizing the Black-Scholes
option pricing model on the date of grant. Directors electing option grants in
lieu of cash compensation may elect option exercise periods ranging from three
years to ten years, and must elect to receive options at least six months prior
to the anticipated grant date in accordance with the terms of the Unique
Mobility, Inc. Stock Option Plan for Non-Employee Directors. Directors are also
reimbursed for ordinary and necessary expenses of attending meetings. In
addition, directors upon their initial election to the Board of Directors, are
awarded 2,000 shares of the Company's common stock at a purchase price of $0.01
per share. Directors who are full-time officers of the Company are not entitled
to additional compensation for their service as directors.
The following table sets forth information concerning remuneration to directors
of the Company during fiscal 1999:
Number of
Securities
Underlying Shares of
Options Price Expiration Common Stock
Name of Director Granted Per Share Date Awarded
Ray A. Geddes(1) - - - -
Frank Hodsoll 16,000 $5.06 9-13-08 -
H. J. Young 16,000 $5.06 9-13-08 -
J. B. Richey 16,000 $5.06 9-13-08 -
Lee A. Iacocca 16,000 $5.06 9-13-08 -
William G. Rankin(1) - - - -
Michael G. Franklin(1) - - - -
(1) Serves without compensation in his capacity as an officer of the Company.
All directors who are eligible to receive compensation as a director for the
term of service beginning September 14, 1998, elected to receive stock options
in lieu of cash payments.
<PAGE>
Performance Graph2
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 1994 through 1999:
Graphical depiction of the following data:
INDEXED RETURNS
Base Years Ending
Period
Company / Index Mar94 Mar95 Mar96 Mar97 Mar98 Mar99
UNIQUE MOBILITY INC 100 73.14 65.73 53.70 124.99 65.75
S&P 500 COMP-LTD 100 115.57 152.67 182.93 270.74 320.72
ELECTRICAL EQUIPMENT-500 100 112.76 159.49 201.69 333.95 407.61
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
June 16, 1999. 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) 917,422 5.42%
William G. Rankin 565,477 3.31%
Donald A. French 341,649 2.03%
Frank Hodsoll 54,000 .03%
Jack Young 63,333 .04%
J. B. Richey(3) 23,333 .01%
EV Global Motors Company(4) 978,864 5.91%
Michael G. Franklin 108,333 .65%
Lido A. Iacocca (5) 986,197 5.95%
Director and Executive
Officers as a Group (8 persons) 3,059,744 17.08%
(1) Calculated separately for each holder on the basis of the actual number of
outstanding shares as of June 16, 1999. 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 (0.08%). 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
Certain transactions between the Company and members of the Compensation and
Stock Option Committee's of the Company's Board of Directors are described above
under "Compensation Committee Interlocks and Insider Participation".
SELECTION OF AUDITORS
At the meeting, the shareholders will be called upon to ratify the appointment
of independent auditors to serve for fiscal 2000.
THE BOARD OF DIRECTORS AND THE MANAGEMENT OF THE COMPANY RECOMMEND THAT THE
SHAREHOLDERS VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG 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 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
<PAGE>
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. In April,
1993, February 1995 and August 1997, the shareholders approved amendments to the
plan increasing the number of shares available for issuance under the plan by
one million shares on each occasion, thereby raising the aggregate number of
shares available for grant under the plan to its current level of four million
shares.
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.
The Board and management believe the Company should continue to provide
incentives to the employees to promote the interests of the Company and its
shareholders by providing the opportunity to acquire ownership in the Company
through the grant of stock options. Historically, the Company has granted stock
options to all employees of the Company, as a group, who have remained in the
employ of the Company at least six months, approximately once each twelve to
eighteen months. In addition, the Company periodically grants stock options to
selected employees and prospective employees as an incentive to recruit or
retain qualified individuals.
Prior to fiscal 1999 the Company employed up to seventy-two employees, with
average employment levels fluctuating between twenty-five and fifty employees.
As a result of the acquisition of Aerocom Industries, Inc. in January, 1998 and
Franklin Manufacturing, Inc. in April, 1998, as well as internal growth in all
of the Company's operating units, the total number of company employees has
risen to 185 as of May 31, 1999. In March, 1999 the Company granted options to
acquire 500,000 shares of common stock to a total of 108 employees, who had been
employed by the Company for a period of at least six months, in all operating
units of the Company. At May 31, 1999, 380,035 shares of common stock were
available for grant under the 1992 Option Plan.
The Board of Directors has determined by resolution Dated June 14, 1999, to
amend the 1992 Option Plan to increase the number of shares available for grant
under the 1992 Option Plan from 4 million shares to 5 million shares.
The 1992 Option Plan is construed, interpreted and administered by a committee
appointed by the Board of Directors. Presently this committee is the Stock
Option Committee of the Board of Directors which consists of three outside
directors. Committee members are not eligible 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
<PAGE>
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.
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 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
<PAGE>
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.
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 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 with
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
<PAGE>
for the sole benefit of family member, 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 exercise 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.
Federal Income Tax Consequences of the Exercise of Options.
Non-Qualified Options. When a Non-Qualified Option is granted, there are no
income tax consequences for the Company or the Option holder. When a
Non-Qualified Option is exercised, in general, the Option holder recognizes
compensation equal to the excess of the fair market value of the Stock on the
date of exercise over the Option price. If, however, the Option holder exercises
the Non-Qualified Option within six months after it was granted and if the sale
of the Stock at a profit would subject the Option holder to liability under
Section 16(b) of the Securities Exchange Act of 1934 ("Section 16(b)"), the
Option holder will recognize compensation income equal to the excess of (1) the
fair market value of the Stock on the earlier of the date that is six months
after the date of exercise or the date the Option holder can sell the Stock
without Section 16(b) liability over (2) the Option price. The Option holder can
make an election under Section 83(b) of the Code to measure the compensation as
of the date the Non-Qualified Option is exercised. The compensation recognized
by the Option holder is subject to tax withholding. The Company is entitled to a
deduction equal to the compensation recognized by the Option holder for the
Company's taxable year that ends with or within the taxable year in which the
Option holder recognized the compensation assuming the amount is an ordinary and
necessary business expense, is reasonable compensation, is not an excess
parachute payment, and is not limited by the $1 million cap on deductible
compensation.
Incentive Options. The Option holder does not recognize compensation and the
Company is not entitled to a deduction upon the grant or the exercise of an
Incentive Option. The Option holder, however, must treat the excess of the fair
market value of the Stock on the date the Incentive Option is exercised over the
Option price as an item of adjustment for purposes of the alternative minimum
tax. If the Option holder makes a "disqualifying disposition" of the Stock
(described below) in the same taxable year the Incentive Option was exercised,
there are no alternative minimum tax consequences.
If the Option holder disposes of the Stock after the Option holder has held the
Stock for the full statutory holding period (at least two years after the date
<PAGE>
the Incentive Option was granted and one year after the Incentive Option was
exercised) (the "Incentive Option Holding Period"), the amount the Option holder
receives upon the disposition over the Option price is treated as long-term
capital gain. The Company is not entitled to a deduction.
If the Option holder makes a "disqualifying disposition" by disposing of the
Stock before it has been held for the Incentive Option Holding Period, the
Option holder recognizes compensation equal to the excess of (1) the fair market
value of the Stock on the date the Incentive Option was exercised or, if less,
the sale price received for the Stock over (2) the Option price. At present the
Company is not required to withhold income or other taxes. The Company is
entitled to a deduction equal to the compensation recognized by the Option
holder for the Company's taxable year that ends with or within the taxable year
in which the Option holder recognized the compensation if the amount is an
ordinary and necessary business expense, is reasonable compensation, is not an
excess parachute payment, and is not limited by the $1 million cap on deductible
compensation.
Withholding. The Option Plan provides that Option holders are responsible for
making appropriate arrangements with the Company to provide for any required
withholding. The Company is not obligated to deliver shares of Stock upon the
exercise of a Non-Qualified or an Incentive Option until all applicable federal,
state, local income and other tax withholding requirements have been satisfied.
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 FROM FOUR MILLION TO FIVE MILLION SHARES.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO PROVIDE FOR AUTHORIZED PREFERRED STOCK
The management of the Company has adopted an aggressive business plan to grow
the Company including an expansion of its manufacturing operations, strategic
alliances to access new markets and acquisitions. In order to facilitate
execution of the foregoing objectives, management and the Board of Directors
propose that the shareholders authorize a class of preferred stock. Management
believes that the ability to issue preferred stock, with preferences and
designations as authorized by the Board of Directors, will enhance the Company's
ability to complete and finance potential acquisitions, by providing additional
flexibility in designing a financing package that meets the needs of the target
company's owners, thereby improving the likelihood that potential transactions
will not only be completed, but be completed such that the post acquisition
financial results are accretive to the Company's operating performance.
Likewise, Management believes that its ability to negotiate and complete
strategic alliances with leading companies worldwide will be similarly enhanced
by the flexibility of structuring an investment consistent with the business
objectives of potential strategic partners. The availability of preferred stock
for issuance, without the delay and expense of obtaining the approval of
shareholders at a special meeting, will afford the Company advantages in acting
upon transactions in the future where the issuance of preferred stock would be
desirable.
The Company currently has no plans to issue preferred stock.
<PAGE>
As of the date of this proxy statement, the company has 50,000,000 shares of
$0.01 par value common stock authorized, of which 16,568,522 shares are
outstanding and 4,209,762 shares are reserved for issuance under the Company's
stock options and warrants. The Company has no other classes of common stock or
preferred stock authorized.
The Board of Directors has unanimously approved and proposes for shareholder
approval an amendment to the Company's Articles of Incorporation to authorize a
new class of capital stock consisting of 10,000,000 shares of preferred stock,
$.01 par value (the "Preferred Stock"), with such relative rights, preferences
and designations as may be determined by the Board in its sole discretion upon
the issuance of any shares of the Preferred Stock. The proposal to authorize a
new class of Preferred Stock is intended to provide shares of Preferred Stock
for issuance from time to time as may be required or various purposes. The
shares of Preferred Stock could be issued from time to time by the Board in its
sole discretion without further approval or authorization by the shareholders,
in one or more series, each of which series could have any particular
distinctive designations as well as relative rights and preferences as
determined by the Board. The relative rights and preferences that may be
determined by the Board in its discretion from time to time, include but are not
limited to the following:
1. the rate of dividend and whether the dividends are to be cumulative and the
priority, if any, of dividend payments relative to other series in the class;
2. whether the shares of any such series may be redeemed, and if so, the
redemption price and the terms and conditions of redemption;
3. the amount payable with respect to such series in the event of voluntary or
involuntary liquidation and the priority, if any, of each series relative to
other series in the class with respect to amounts payable upon liquidation and
sinking fund provision, if any, for the redemption or purchase of the shares of
that series;
4. the terms and conditions, if any, on which the shares of a series may be
converted into or exchanged for shares of any class, whether common or
preferred, or into shares of any series of the same class, and if provision is
made for conversion or exchange, the times, prices, rates, adjustments and other
terms;
5. any voting rights for such shares.
The existence of authorized but unissued shares of Preferred Stock could have
anti-takeover effects because the Company could issue Preferred Stock with
special dividend or voting rights that could discourage potential bidders.
The authorization of the Preferred Stock will give the Company's Board of
Directors the ability, without shareholder approval, to issue shares of
Preferred Stock with rights and preferences determined by the Board of Directors
in the future. As a result, the Company may issue shares of Preferred Stock that
have dividend, voting and other rights superior to those of the Common Stock, or
that convert into shares of Common Stock, without the approval of the holders of
Common Stock. This could result in the dilution of the voting rights, ownership
and liquidation value of current shareholders.
<PAGE>
Required Vote; Board Recommendation
The affirmative vote of a majority of the outstanding shares of Common Stock is
required to approve the authorization of the Preferred Stock. The Board Of
Directors Unanimously Recommends That The Shareholders Vote In Favor of The
Proposal To Approve The Authorization Of The Preferred Stock.
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 the
next Annual Meeting of Shareholders to be held in August 2000 must be received
by the Company no later than March 31, 2000 in order to be considered for
inclusion.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not aware of
any other matters to be presented for action at the meeting, nor has it been
advised that others will present any other matters. If any other matters do
properly come before the meeting, the proxy holders intend to vote the proxies
held by them in accordance with their best judgment on such matters.
ANNUAL REPORT
Upon the receipt of a written request from any shareholder, the Company will
mail, at no charge to the shareholder, a copy of the Company's 1999 Annual
Report on Form 10-K, including the financial statements and schedules required
to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1
under the Exchange Act, for the Company's most recent fiscal year. Written
requests for such Report should be directed to:
Secretary
Unique Mobility, Inc.
425 Corporate Circle
Golden, Colorado 80401
Phone (303) 278-2002
The Company's Annual Report on Form 10-K is also available at the web site that
the Securities and Exchange Commission maintains at http://www.sec.gov.
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/ Linnea Gillman
Linnea Gillman, Secretary
<PAGE>
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Unique Mobility, Inc., 425 Corporate Circle, Golden, Colorado 80401
The undersigned hereby appoints Ray A. Geddes and Donald A. French as proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and vote, as designated below, all the shares of common stock of
Unique Mobility, Inc. held of record by the undersigned on June 23, 1999 at the
Annual Meeting of Shareholders to be held on August 11, 1999 or any adjournment
thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW:
1. TO ELECT SIX DIRECTORS TO THE COMPANY'S BOARD OF DIRECTORS TO HOLD OFFICE
UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS
ARE ELECTED. Ray A. Geddes Frank Hodsoll William G. Rankin H.J. Young J. B.
Richey Michael G. Franklin
ELECTION OF DIRECTORS FOR all nominees listed above WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary above) nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name above.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS
OF THE COMPANY.
FOR AGAINST ABSTAIN
3. PROPOSAL TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR GRANT UNDER THE
UNIQUE MOBILITY, INC. 1992 STOCK OPTION PLAN FROM FOUR MILLION TO FIVE
MILLION SHARES.
FOR AGAINST ABSTAIN
4. PROPOSAL TO AMEND THE ARTICLE OF INCORPORATION TO AUTORIZE A NEW CLASS OF
$10 MILLION SHARES OF PREFERRED STOCK.
FOR AGAINST ABSTAIN
5. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. The Board of Directors is
not aware of any other matters to be presented at the meeting for approval
by the shareholders.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NAMED NOMINEES AND FOR PROPOSALS 2, 3 AND 4.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated , 1999
Signature
Please mark, sign, date and return the proxy
card promptly using the enclosed envelope. Signature, if held jointly
<PAGE>
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
UNIQUE MOBILITY, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is UNIQUE MOBILITY, INC.
SECOND: The following amendment to the Articles of Incorporation was
adopted on June 14, 1999, as prescribed by the Colorado Business Corporation
Act, by a vote of the shareholders. The number of shares voted for the amendment
was sufficient for approval.
THIRD: (A) The first sentence of Article IV of the Corporation's Articles
of Incorporation shall be amended to read in its entirety as follows:
(a) The total number of shares of stock that the Corporation shall have
authority to issue is 60,000,000, divided into the following classes:
(i) 50,000,000 shares of Common Stock, par value $.01 per share; and
(ii) 10,000,000 shares of preferred stock, par value $.01 per share.
Each holder of Common Stock shall be entitled to one vote for each
share of such stock held, on all matters presented to stockholders.
(B) The following paragraph (b) shall be added to Article IV of the
Corporation's Articles of Incorporation:
(b) Preferred Stock. The Board of Directors is authorized, subject to any
limitations prescribed by law, to provide from time to time for the
issuance of the shares of preferred stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish the characteristics of each series, including the following:
(i) the number of shares of that series, which may subsequently be
increased or decreased (but not below the number of shares of that series
then outstanding) by resolution of the Board of Directors, and the
distinctive designation thereof;
(ii) the voting powers, full or limited, if any, of the shares of that
series and the number of votes per share;
(iii) the rights in respect of dividends on the shares of that series,
whether dividends shall be cumulative and, if so, from which date or dates
and the relative rights or priority, if any, of payment of dividends on
shares of that series and any limitations, restrictions or conditions on
the payment of dividends;
(iv) the relative amounts, and the relative rights or priority, if any, of
payment in respect of shares of that series, which the holders of the
shares of that series shall be entitled to receive upon any liquidation,
dissolution or winding up of the Corporation;
(v) the terms and conditions (including the price or prices, which may vary
under different conditions and at different redemption dates), if any, upon
which all or any part of the shares of that series may be redeemed, and any
limitations, restrictions or conditions on such redemption;
(vi) the terms, if any, of any purchase, retirement or sinking fund to be
provided for the shares of that series;
(vii) the terms, if any, upon which the shares of that series shall be
convertible into or exchangeable for shares of any other class, classes or
series, or other securities, whether or not issued by the Corporation;
(viii) the restrictions, limitations and conditions, if any, upon issuance
of indebtedness of the Corporation so long as any shares of that series are
outstanding; and
(ix) any other preferences and relative, participating, optional or other
rights and limitations not inconsistent with law, this Article Fourth or
any resolution of the Board of Directors pursuant to this Article Fourth.
FOURTH: Except as amended hereby, the provisions of the Articles of
Incorporation, as heretofore amended, shall remain in full force and effect.
UNIQUE MOBILITY, INC.
By:/s/Donald A. French
Donald A. French
<PAGE>
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 11,
1999.
AMENDMENT
1. The first sentence of section 4.1 shall be amended in its entirety to
provide as follows:
"A total of five 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. Except as amended by this Amendment, the Plan shall continue in full force
and effect.
IN WITNESS WHEREOF, this Amendment has been executed this 14th day of June,
1999, to be effective as of August 11, 1999.
UNIQUE MOBILITY, INC.
By:/s/Donald A. French
Donald A. French, Treasurer
<PAGE>
