<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
VECTOR AEROMOTIVE
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
VECTOR AEROMOTIVE CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1996
---------------------
To the Shareholders:
The annual meeting of the shareholders of VECTOR AEROMOTIVE CORPORATION
will be held at the Marriott at Sawgrass, 1000 TPC Boulevard, Ponte Vedra Beach,
Florida on Wednesday, the 22nd day of May 1996, at 10:30 Eastern Daylight Time,
for the following purposes:
1. To elect a board of five directors;
2. To consider and act upon a proposal to amend the Company's 1994
Omnibus Stock Plan to increase the total number of Common Shares of the
Company authorized to be issued thereunder from 1,000,000 to 2,500,000;
3. To consider and act upon a proposal to ratify the appointment of
BDO Seidman as independent auditors for the Company for the fiscal year
1996; and
4. To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 25, 1996,
as the record date for the determination of shareholders entitled to notice of
and to vote at such meeting and any adjournment thereof.
All shareholders are cordially invited to attend the meeting. However, if
you cannot attend the meeting in person, please sign, date and return promptly
the enclosed proxy in the envelope provided. Any proxy may be revoked at any
time before it is voted.
By order of the Board of Directors,
/s/ D. Peter Rose
------------------
D. Peter Rose,
President
April 29, 1996
<PAGE> 3
VECTOR AEROMOTIVE CORPORATION
---------------------
PROXY STATEMENT
---------------------
PERSONS MAKING THE SOLICITATION
The accompanying proxy is solicited by the Board of Directors of VECTOR
AEROMOTIVE CORPORATION, a Nevada corporation (the "Company") which has its
principal executive offices at 7601 Centurion Parkway South, Jacksonville,
Florida 32256. The approximate date on which this Proxy Statement and the
accompanying proxy were first sent or given to shareholders was April 29, 1996.
The cost of preparing, assembling and mailing this Proxy Statement and each
accompanying proxy is to be borne by the Company. The Company may, upon request,
reimburse banks, brokerage houses and other institutions for their expenses in
forwarding proxy material to their principals. Directors, officers and regular
employees of the Company may, for no additional compensation, solicit proxies
personally from shareholders if proxies are not received promptly.
VOTING SECURITIES
Holders of record of the Company's Common Shares at the close of business
on April 25, 1996, are entitled to notice of, and to vote at, the meeting. As of
the record date, there were 53,446,691 Common Shares issued, outstanding and
entitled to vote. Proxies are solicited to give all shareholders of record on
the books of the Company at the close of business on the record date an
opportunity to vote on matters that come before the meeting. On all matters
properly presented to the meeting, the holders of the Common Shares will vote
together, as a single class, with each share entitled to one vote. Cumulative
voting is not permitted by the Company's Articles of Incorporation.
ITEM 1. ELECTION OF DIRECTORS
NOMINEES FOR ELECTION OF DIRECTORS
A board of five directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
following nominees, each of whom currently serves as a director of the Company:
D. Peter Rose, Sudjaswin E.L., Michael J. Kimberley, Richard J. Aprahamian and
George J. Fencl. In the event any nominee becomes unable to serve as a director
as of the time of the meeting, proxies will be voted in favor of any substitute
nominee designated by the current Board of Directors. Each director holds office
until the next annual meeting and until his successor is elected and qualified.
The names of the Company's executive officers and directors, together with
certain other information, is set forth below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------------- --- --------------------
<S> <C> <C>
D. Peter Rose.............................................. 50 President, Director
Sudjaswin E.L.............................................. 36 Director
Michael J. Kimberley....................................... 57 Director
Richard J. Aprahamian...................................... 58 Director
George J. Fencl............................................ 53 Director
</TABLE>
D. PETER ROSE. Mr. Rose has served as a director and President of the
Company since April 1995. Mr. Rose joined the Company as General Manager in
February 1995. From April 1994 to February 1995, he was a private consultant in
the automobile industry. From 1983 through April 1994 he served in various
executive positions, including President of Active Control Systems, Inc. and
Director with TRW, Inc.
SUDJASWIN E.L. Mr. Sudjaswin has served as a director of the Company since
December 1993, in accordance with an agreement between V'Power Corporation
("VPC") and the Company which provides that
<PAGE> 4
VPC has the right to nominate one member to the Board of Directors. See "Certain
Relationships." Since November 1993, Mr. Sudjaswin has served as the President
and as a managing director of VPC. Mr. Sudjaswin also serves as a managing
director of Automobili Lamborghini SpA ("Lamborghini").
MICHAEL J. KIMBERLEY. Mr. Kimberley has served as a director of the
Company since May 1994. Since April 15, 1994, Mr. Kimberley has served as a
managing director of Lamborghini. From January 1992 to April 1994, he was the
Executive Vice President of General Motors Overseas Corporation for Malaysia.
From 1969 through December 1991, he was employed in various executive positions
by Group Lotus plc, the manufacturer of Lotus sports cars, and certain of its
affiliated companies.
RICHARD J. APRAHAMIAN. Mr. Aprahamian has served as a director of the
Company since December 1994, and as Secretary of the Company since May 1994. Mr.
Aprahamian has engaged in the private practice of law since 1972, and is
currently a shareholder and director in the law firm of Aprahamian & Ducote,
P.C. in Los Angeles, California.
GEORGE J. FENCL. Mr. Fencl has been a director of the Company since
December 1994. He also served as a director of the Company from August 1992 to
May 1994. From 1984 to the present, he has been a self-employed consultant and
private investor.
BOARD COMMITTEES
The Compensation Committee is a committee of the Board of Directors which
is responsible for establishing the compensation payable to the Company's
executive officers. The Compensation Committee also administers the Company's
various stock option plans. As of the date hereof, the members of the
Compensation Committee are Messrs. Sudjaswin and Kimberley. In December 1994, a
Special Committee of the Board of Directors was established to be responsible
for reviewing proposed transactions between the Company and its affiliates. The
members of the Special Committee are Messrs. Aprahamian and Fencl.
During calendar year 1995, the Board of Directors held nine meetings and
acted by unanimous written consent in lieu of a meeting on seven occasions. All
of the Company's directors attended at least 75% of the Board meetings. During
1995, the Compensation Committee held one meeting, which was attended by all of
its members.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual and
long-term compensation for services in all capacities to the Company for the
three years ended December 31, 1995, the two individuals who served as chief
executive officer of the Company during 1995 (the "Named Officers"). No
executive officer of the Company received annual salary and bonus exceeding
$100,000 in 1995.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL SECURITIES
COMPENSATION(1) UNDERLYING
FISCAL --------------- OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY # SHARES
- ------------------------------------------------------------ ------ --------------- ------------
<S> <C> <C> <C>
D. Peter Rose............................................... 1995 $ 88,816 70,000
President(2)
Robert A. Braner............................................ 1995 -- 95,000
President and Chief Executive Officer(3) 1994 -- 150,000
1993 114,348 --
</TABLE>
- ---------------
(1) Excludes certain perquisites not exceeding 10% of salary.
(2) Mr. Rose was elected President of the Company in April 1995. Compensation
includes all compensation paid to Mr. Rose during 1995. Prior to 1995, Mr.
Rose was not an employee of the Company.
(3) Mr. Braner was President and Chief Executive Officer of the Company through
March 1995.
2
<PAGE> 5
(4) During fiscal year 1993, the Company accrued salary payable to Mr. Braner in
the amount of $114,348. Of such amount, $46,848 was paid during 1993 fiscal
year, and the remaining $67,500 was paid during the 1994 fiscal year.
No employee of the Company receives any additional compensation for his
services as a director. Non-employee directors receive no salary for their
services as such. The Board of Directors has authorized payment of reasonable
travel and other out-of-pocket expenses incurred by non-employee directors in
attending meetings of the Board of Directors.
Currently the Company does not have any written employment agreements with
its executive officers.
Option Grants Table. The following table sets forth information on grants
of stock options (all of which are presently exercisable) during the year ended
December 31, 1995 to the Named Officers.
<TABLE>
<CAPTION>
PERCENT OF TOTAL MARKET PRICE
OPTIONS GRANTED EXERCISE OR OF
OPTIONS GRANTED TO EMPLOYEES BASE PRICE COMMON SHARES EXPIRATION
NAME SHARES IN YEAR ($/SHARE) ON GRANT DATE DATE
- -------------------------- --------------- ---------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
D. Peter Rose............. 70,000 5% $ .38 $ .54 August 28, 2005
Robert A. Braner.......... 95,000 11% $ .38 $ .54 August 28, 2005
</TABLE>
Fiscal Year-End Options/Option Values Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
D. Peter Rose.................................... 70,000 -- $25,900 --
Robert A. Braner................................. 245,000 -- $68,150 --
</TABLE>
- ---------------
(1) The dollar value is calculated by determining the difference between $.75
per share, the closing bid price of the Common Shares on December 31, 1995,
and the exercise price of the options and warrant.
CONFLICTS OF INTEREST
Two of the Company's directors, Messrs. Sudjaswin and Kimberley, have
relationships with Lamborghini. Mr. Kimberley serves as a managing director of
Lamborghini, and Mr. Sudjaswin is also a managing director of Lamborghini. The
Company has identified and established mutually beneficial business
relationships with Lamborghini and its American affiliate, Automobili
Lamborghini U.S.A. ("Lamborghini U.S.A."). To date, these arrangements include
joint development, and manufacture by Lamborghini, of the engine for the Vector
M12 automobile and the sublease of a facility by the Company from Lamborghini
U.S.A. for the Company's executive offices.
STOCK OPTION AND OTHER PLANS
The Company adopted an Incentive Stock Option Plan in 1988, a second
Incentive Stock Option Plan in 1990 and a third Incentive Stock Option Plan in
1992 (collectively, the "Incentive Plans"). The Incentive Plans cover an
aggregate of 290,000 shares. No options have been issued under the Incentive
Plans. The Incentive Plans are administered by the Compensation Committee of the
Board of Directors. The Incentive Plans provide that no option may be granted at
an exercise price less than the fair market value of the Common Shares of the
Company on the date of grant. Options granted under the Incentive Plans are
intended to qualify under Section 422A of the Internal Revenue Code as
"incentive stock options."
The Company adopted a Non-Qualified Stock Option Plan in 1988, a second
Non-Qualified Stock Option Plan in 1990 and a third Non-Qualified Stock Option
Plan in 1992 (collectively, the "Non-Qualified Plans"). The Non-Qualified Plans
are also administered by the Compensation Committee of the Board of Directors
and cover a total of 370,000 shares. As of March 31, 1996, 222,000 options were
outstanding under
3
<PAGE> 6
the Non-Qualified Plans, and 94,000 options had been exercised. The
Non-Qualified Plans provide that options may be granted at exercise prices not
less than 50% of the fair market value of the Common Shares of the Company on
the date of grant.
The 1994 Omnibus Stock Plan (the "Omnibus Plan") was adopted in May 1994.
The purpose of the Omnibus Plan is to provide a vehicle under which a variety of
equity-based awards can be granted to employees, Non-Affiliated Individuals (as
defined in the Omnibus Plan), and non-employee directors of the Company in order
to promote the Company's development and success. The Omnibus Plan permits the
award of non-qualified stock options, incentive stock options, restricted
shares, performance units, performance shares, share appreciation rights, and
other forms of awards, including deferrals of earned awards, as approved by the
Compensation Committee of the Board of Directors.
A maximum of 1,000,000 Common Shares are currently reserved and available
for grants under the Omnibus Plan. During 1995, options for 834,000 Common
Shares were issued under the Omnibus Plan. For further information concerning
the Omnibus Plan, including the proposed amendment of the Omnibus Plan to
increase the number of Common Shares issuable pursuant thereto from 1,000,000 to
2,500,000, see Item 2. AMENDMENT OF 1994 OMNIBUS STOCK PLAN.
The Company also has 667,500 warrants outstanding to purchase Common Shares
at $.21875 per share. These warrants were issued in October 1993 to certain
former directors and officers of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Common Shares as of March 31, 1996, by (i) each person who is known
to the Company to be the beneficial owner of more than 5% of any class of the
Company's voting securities, which is composed solely of Common Shares, (ii)
each director, (iii) the Company's President, and (iv) all executive officers
and directors as a group. Beneficial ownership of Common Shares has been
determined for this purpose in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934. Except as otherwise noted, and except as community
property laws apply, the Company believes that each person has sole voting,
dispositive and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS(1) SHARES OF CLASS
- -------------------------------------------------------------------- ----------- --------
<S> <C> <C>
D. Peter Rose(2).................................................... 70,000(3) *
Sudjaswin E.L.(4)(5)................................................ 95,000(6) *
Michael J. Kimberley(4)............................................. 95,000(7) *
George J. Fencl(4).................................................. 223,236(8) *
Richard J. Aprahamian(4)............................................ 65,000(9) *
Setdco Engineering Corporation(10).................................. 5,000,000 9.4
V'Power Corporation(5).............................................. 143,333,333(11) 90.1
Hutomo Mandala Putra(5)............................................. 143,333,333(11) 90.1
All Executive Officers and Directors as a Group (5 persons)......... 548,236(12) 1.0
</TABLE>
- ---------------
* Less than 1%.
(1) Except as noted, the address for all persons listed is 7601 Centurion
Parkway South, Jacksonville, Florida 32256.
(2) President and Director.
(3) Includes 70,000 shares acquirable upon exercise of presently exercisable
stock options.
(4) Director.
(5) Pursuant to the terms of a Share Purchase Agreement between VPC and the
Company dated January 14, 1994, VPC designated Mr. Sudjaswin as its
representative on the Company's Board of Directors. Mr. Sudjaswin disclaims
beneficial ownership of the shares owned by VPC. VPC is a Bahamian
corporation which is beneficially owned by Hutomo Mandala Putra. The
address of VPC is Wisma Kyoei Prince 25th Floor , Jl. Jend. Sudirman Kav.
3-4, Jakarta 10220, Indonesia, and Hutomo
4
<PAGE> 7
Mandala Putra's address is Wisma Antara, Jl. Medan Merdeka Selatan No. 17,
Jakarta 10110, Indonesia.
(6) Includes 95,000 shares acquirable upon exercise of presently exercisable
stock options.
(7) Includes 95,000 shares acquirable upon exercise of presently exercisable
stock options.
(8) Includes 150,000 shares acquirable upon exercise of presently exercisable
warrant and 65,000 shares upon exercise of presently exercisable stock
option.
(9) Includes 65,000 shares acquirable upon exercise of presently exercisable
stock options.
(10) The address of Setdco Engineering Corporation is Wisma Kyoei Prince, 25th
Floor, Jln. Jend Sudirman Kav. 3-4, Jakarta 10220, Indonesia. Setdco is a
Bahamian corporation owned by Mr. Setiawan Djody and certain of his family
members.
(11) Includes 106,000,0000 shares acquirable upon exercise of presently
exercisable options.
(12) Excludes the Common Shares beneficially owned by VPC, as to which the
officers and directors disclaim beneficial ownership. However, if the
ownership of such shares is attributed to one or more officers and
directors of the Company, then as of such date officers and directors as a
group would beneficially own a total of 143,881,569, or 90.1%, of the
Company's issued and outstanding Common Shares.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Shares and other equity securities of the
Company. Officers, directors and greater than ten percent shareholders are
required by regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Except as described below, to the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and certain
representations provided to the Company, all Section 16(a) filing requirements
applicable to the Company's officers, directors and greater than ten percent
beneficial owners were complied with during the year ended December 31, 1995.
During 1995, VPC and Mr. Putra filed late their Form's 4 with respect to the
transactions contemplated by the January 6, 1995 Purchase Agreement (as defined
below).
CERTAIN RELATIONSHIPS
The Company currently subleases approximately 7,000 square feet of office
space in Jacksonville, Florida from Lamborghini U.S.A. on a month-to-month basis
at a rental rate of $7,176 per month.
Automobili Lamborghini SpA and the Company have entered into an agreement
whereby they have co-developed, and Lamborghini manufactures, the engine for the
M12 vehicle. In addition, the Company is paying to Lamborghini the cost of the
Company's tooling used to manufacture the engine. The Company also agreed to
purchase a minimum number of engines through 1997 for a predetermined price
(subject to increases in cost of production). In addition, in January 1996,
Lamborghini loaned $200,000 to the Company which was repaid in February 1996.
Effective as of January 6 and December 29, 1995, the Company entered into
two separate Share Purchase Agreements (the "Purchase Agreements") and
Registration Rights Agreements (the "Registration Agreements") with VPC.
Pursuant to the Purchase Agreements, VPC purchased (i) in January 1995 for an
aggregate consideration of $6,000,000, 18,333,333 Common Shares and an option to
purchase 50 million Common Shares originally exercisable at any time before
April 6, 1996, extended in 1996 to expire April 6, 1997 at a price of $.43 per
share and (ii) in January 1996 for an aggregate consideration of $5,000,000, 10
million Common Shares and an option expiring in January 1997 to purchase an
additional 50 million Common Shares at a price of $.45 per share. Pursuant to
the Registration Agreements, the Company has granted to VPC certain rights to
have all Common Shares issued or issuable under the Purchase Agreements
registered under the Securities Act of 1933, as amended. Pursuant to a Share
Purchase Agreement dated
5
<PAGE> 8
January 14, 1994, VPC also has an option to acquire 6,000,000 Common Shares at a
price of $.75 exercisable (as extended in 1996) at any time prior to April 28,
1997.
Effective as of January 5 and December 7, 1995, the Company entered into
financial consulting agreements (the "Consulting Agreements") with Broadleaf
Limited, an Irish Republic limited company ("Broadleaf"). Broadleaf had provided
certain services relating to the Purchase Agreements. In addition, Broadleaf has
agreed to perform continuing financial advisory services to the Company through
December 31, 1996. In consideration for all services rendered and to be rendered
under the Consulting Agreement, the Company has paid Broadleaf $440,000.
The Company paid $150,000 to Vector Aeromotive Indonesia, an affiliate of
VPC, for marketing and distribution services performed during 1995.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding Common Shares of the
Company present or represented by proxy and entitled to vote at the annual
meeting is required to elect the Board of Directors. Abstentions will be treated
as shares that are present for purposes of determining the presence of a quorum
but as unvoted for purposes of electing directors. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to vote
on directors, those shares will not be considered as present and entitled to
vote with respect to election of directors. The Board of Directors expects that
all Common Shares owned by VPC will be voted in favor of the election of the
director nominees. Such shares represent approximately 70% of the Common Shares
entitled to vote at the Annual Meeting.
Should any director nominee become unable or unwilling to accept nomination
or election, it is intended that the persons acting under the enclosed proxy
will vote for the election of such other person as the current Board of
Directors may designate. The Company has no reason to believe that any of the
director nominees will be unable or unwilling to serve if elected to office.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE ELECTION OF
MESSRS. ROSE, SUDJASWIN, KIMBERLEY, FENCL AND APRAHAMIAN. UNLESS OTHERWISE
DIRECTED BY A SHAREHOLDER, PROXIES WILL BE VOTED "FOR" THE ELECTION OF SUCH
NOMINEES.
ITEM 2. AMENDMENT OF 1994 OMNIBUS STOCK PLAN
Operation of Plan. The Omnibus Plan consists of three separate sub-plans,
the Employee Sub-Plan, the Non-Employee Director Sub-Plan and the Consultant
Sub-Plan. The Omnibus Plan provides a vehicle under which a variety of
equity-based awards can be granted to employees, non-employee directors and
consultants of the Company. Awards under the Omnibus Plan may consist of
non-qualified stock options, incentive stock options, restricted shares,
performance units, performance shares, share appreciation rights and other forms
of awards, including deferrals of earned awards, as approved by the Compensation
Committee of the Board of Directors
Under the Omnibus Plan, key employees are eligible to receive incentive
stock options or non-qualified stock options. The exercise price of options may
not be less than 50% of the fair market value of the underlying Common Shares on
the date of the grant; provided (i) that the exercise price of incentive stock
options may not be less than 100% (110% in the case of an employee (a "10%
stockholder") who directly or indirectly owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company) of the
fair market value of the Common Shares on the date of the grant and (ii) the
exercise price of options granted to non-employee directors must be 70% of the
fair market value of the Common Shares on the date of the grant. The term of an
option may not be greater than ten years (five years in the case of an incentive
stock option granted to a 10% stockholder) from the date of the grant. Options
may not be exercisable until six months from the date of grant, except that
options granted to consultants may not be exercised until 12 months from the
date of grant. The exercise price of options must be paid in cash or, at the
discretion of the Compensation Committee, by delivery of the optionee's full
recourse promissory note or
6
<PAGE> 9
delivery of Common Stock already owned by the participant for at least six
months and valued at its fair market value. Options expire within prescribed
periods after termination of employment.
For federal income tax purposes, an optionee will not recognize any taxable
income at the time an option is granted. Generally, an optionee will recognize
income at the time of exercise of an option equal to the amount by which the
value of the Common Shares at the time of exercise exceeds the exercise price of
the option. The holder of an incentive stock option, however, will under certain
circumstances not recognize income until sale of the Common Shares acquired upon
exercise of the incentive stock option. The Company will generally receive a
deduction at the time the optionee recognizes income.
At April 16, 1996, the closing bid price of the Common Shares on the Nasdaq
SmallCap Market was $.71.
Option Grants. No grants of awards under the Omnibus Plan were made in
1994. In 1995, options for an aggregate of 834,000 shares were granted under the
Omnibus Plan, all at an exercise price of $.38 per share. Recipients of these
option grants were as follows:
<TABLE>
<CAPTION>
NUMBER OF
COMMON
NAME SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
D. Peter Rose, President.................................................. 70,000
Robert A. Braner, former President........................................ 95,000
Sudjaswin E.L., Director.................................................. 95,000
Michael J. Kimberley, Director............................................ 95,000
George J. Fencl, Director................................................. 65,000
Richard J. Aprahamian, Director........................................... 65,000
Directors of the Company who are not Executive Officers as a Group........ 320,000
Executive Officers of the Company as a Group.............................. 45,000
All employees of the Company, other than Executive Officers, as a Group... 254,000
</TABLE>
Proposed Amendment. Subject to the approval of the Company's shareholders
at the annual meeting, the Omnibus Plan will be amended to increase the number
of Common Shares authorized to be issued pursuant to the Omnibus Plan from
1,000,000 to 2,500,000.
VOTE REQUIRED
Approval of the amendment to the Omnibus Plan will require the affirmative
vote of a majority of the Common Shares present or represented by proxy and
entitled to vote at the annual meeting. Abstentions will be treated as shares
that are present for purposes of determining the presence of a quorum but as
unvoted for purposes of approving the amendment. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to vote
on this matter, those shares will not be considered as present and entitled to
vote with respect to this matter. The Board of Directors expects that all Common
Shares owned by VPC will be voted in favor of the election of the director
nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT OF
THE OMNIBUS PLAN.
ITEM 3. APPROVAL OF AUDITORS
Subject to shareholder ratification, the Board of Directors has reappointed
the firm of BDO Seidman, Certified Public Accountants, Orlando, Florida, as
independent auditors to make an examination of the accounts of the Company for
the fiscal year 1996.
One or more representatives of BDO Seidman are expected to be present at
the annual meeting, will have an opportunity to make a statement if they desire
to do so and will be available to respond to questions.
7
<PAGE> 10
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" SUCH RATIFICATION. UNLESS OTHERWISE DIRECTED BY A SHAREHOLDER, PROXIES
WILL BE VOTED "FOR" SUCH RATIFICATION.
OTHER MATTERS
Management does not know of any matters to be presented for action at the
meeting other than as set forth in items (1), (2) and (3) of the Notice of
Annual Meeting of Shareholders. However, if any other matters come before the
meeting, it is intended that the holders of the proxies will vote thereon in
their discretion.
REVOCABILITY OF PROXY
The giving of a proxy does not preclude the right to vote in person, should
the person giving the proxy so desire. Shareholders may revoke a proxy at any
time before it has been voted by written notice to the Secretary of the Company
or by giving notice of revocation at the Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting must be received by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting on or before December 31,
1996.
ADDITIONAL INFORMATION
The Company's Annual Report to Shareholders is being supplied to holders of
the Company's Common Shares together with this Proxy Statement. A copy of the
Company's Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission, will be furnished without charge to shareholders of record upon
written request to: Investor Relations, Vector Aeromotive Corporation, 7601
Centurion Parkway South, Jacksonville, Florida 32256.
VECTOR AEROMOTIVE CORPORATION
Jacksonville, Florida
April 29, 1996
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