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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
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[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-20686
UNIROYAL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0341868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 N. Tamiami Trail, Suite 900,
Sarasota, FL 34236
(Address of principal executive offices) (Zip Code)
(941) 361-2100
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number
of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Total number of shares of outstanding stock as of April 28, 1997
Common stock 13,356,517
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PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
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UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
March 30, September 29,
1997 1996
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Current assets:
Cash and cash equivalents (including restricted cash and
cash equivalents of $764 at September 29, 1996) $ 78 $ 2,023
Trade receivables (less estimated reserve for
doubtful accounts of $358 at March 30, 1997 and
$369 at September 29, 1996) 30,426 25,094
Inventories (Note 2) 36,785 33,170
Prepaid expenses and other current assets 1,484 1,507
Deferred income taxes 7,408 7,408
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Total current assets 76,181 69,202
Property, plant and equipment - net 66,622 63,984
Property, plant and equipment held for sale 11,578 10,832
Note receivable 5,000 5,000
Reorganization value in excess of amounts allocable
to identifiable assets - net 7,911 8,288
Deferred income taxes 2,429 1,485
Other assets 11,488 11,995
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TOTAL ASSETS $ 181,209 $ 170,786
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UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 30, September 29,
1997 1996
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Current liabilities:
Current portion of long-term debt $ 603 $ 659
Trade accounts payable 18,171 16,549
Accrued expenses:
Compensation and benefits 9,737 10,166
Interest 3,058 2,861
Taxes, other than income 1,735 1,939
State income taxes 237 259
Other 5,452 7,621
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Total current liabilities 38,993 40,054
Long-term debt 91,248 72,116
Other liabilities 14,547 15,117
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Total liabilities 144,788 127,287
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Commitments and contingencies (Note 5)
Stockholders' equity (Note 4):
Preferred stock
Series B - 35 shares issued and outstanding at September 29, 1996
(redemption value of $150,000 per share); par value $0.01;
1,000 shares authorized - 5,250
Series C - par value $0.01; 450 shares authorized - -
Common stock - par value $0.01; 35,000,000 shares
authorized: 13,307,360 and 13,233,912 shares issued or to
be issued, respectively 134 133
Additional paid-in capital 52,516 52,517
Deficit (16,229) (14,401)
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36,421 43,499
Less treasury stock at cost - 50,843 shares - -
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Total stockholders' equity 36,421 43,499
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 181,209 $ 170,786
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See notes to condensed consolidated financial statements.
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UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended Six Months Ended
----------------------------- ------------------------------
March 30, March 31, March 30, March 31,
1997 1996 1997 1996
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Net sales $ 51,466 $ 53,492 $ 97,493 $ 100,168
Costs and expenses:
Costs of goods sold 40,789 43,612 77,236 81,862
Selling and administrative 7,117 7,533 13,620 14,422
Amortization of reorganization value in
excess of amounts allocable to
identifiable assets 189 192 377 384
Depreciation and other amortization 2,072 2,500 4,110 4,987
Reorganization professional fees
subsequent to effective date 30 230 130 378
Excess facility expense 43 413 54 649
Strike settlement and training expense - 158 - 808
------------ ------------ ------------ ------------
Income (loss) before interest and income taxes 1,226 (1,146) 1,966 (3,322)
Interest expense (2,469) (2,619) (4,669) (5,168)
------------ ------------ ------------ -------------
Loss before income taxes (1,243) (3,765) (2,703) (8,490)
Income tax benefit (Note 3) 394 1,288 875 3,009
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Net loss $ (849) $ (2,477) $ (1,828) $ (5,481)
============ ============ ============ =============
Net loss per common share and
common stock equivalent (Note 6) :
Primary and fully diluted $ (0.06) $ (0.19) $ (0.14) $ (0.42)
============ ============ ============ =============
Average number of shares used in
computation 13,253,796 13,146,906 13,241,205 13,130,591
============ ============ ============ =============
See notes to condensed consolidated financial statements.
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UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Six Months
Ended Ended
March 30, March 31,
1997 1996
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OPERATING ACTIVITIES:
Net loss $ (1,828) $ (5,481)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 4,110 4,987
Deferred tax benefit (944) (3,188)
Amortization of reorganization value in excess of
amounts allocable to identifiable assets 377 384
Amortization of Senior Secured Notes discount 55 48
Amortization of refinancing and debt issuance costs 201 242
Other 103 170
Changes in assets and liabilities:
(Increase) decrease in trade receivables - net (5,332) 94
Increase in inventories (3,615) (2,271)
Decrease in prepaid expenses and other assets 141 50
Increase (decrease) in accounts payable 1,622 (346)
(Decrease) increase in other accrued expenses (2,627) 447
(Decrease) increase in other liabilities (570) 974
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Net cash used in operating activities (8,307) (3,890)
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INVESTING ACTIVITIES - Purchases of property, plant and
equipment (Note 7) (7,328) (3,328)
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FINANCING ACTIVITIES:
Repurchase of Senior Secured Notes (243) -
Other increase in debt 19,183 6,993
Preferred stock redeemed (5,250) -
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Net cash provided by financing activities 13,690 6,993
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Net decrease in cash (1,945) (225)
Cash and cash equivalents at beginning of period 2,023 291
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Cash and cash equivalents at end of period $ 78 $ 66
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See notes to condensed consolidated financial statements.
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<PAGE>
UNIROYAL TECHNOLOGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months and Six Months Ended
March 30, 1997 and March 31, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The interim Condensed Consolidated Financial Statements of Uniroyal
Technology Corporation and its wholly owned subsidiaries UTCMI Corp.
and ULC Corp. (the "Company") are unaudited and should be read in
conjunction with the Company's audited financial statements and notes
thereto for the fiscal years ended September 29, 1996, October 1, 1995,
and October 2, 1994. The Company's fiscal year ends on the Sunday
following the last Friday in September.
Certain reclassifications were made to the prior year financial
statements to conform to current period presentations. In the opinion
of the Company, all adjustments necessary for a fair presentation of
such Condensed Consolidated Financial Statements have been included.
Such adjustments consist only of normal recurring items. Interim
results are not necessarily indicative of results for a full year. The
interim Condensed Consolidated Financial Statements and notes thereto
are presented as permitted by the Securities and Exchange Commission
and do not contain certain information included in the Company's annual
Financial Statements and notes thereto.
2. INVENTORIES
Inventories consisted of the following (in thousands):
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March 30, September 29,
1997 1996
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Raw materials and supplies $ 20,573 $ 17,058
Work in process 3,177 4,400
Finished goods 13,035 11,712
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Total $ 36,785 $ 33,170
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3. INCOME TAXES
The provisions for income tax benefit for the three months and six
months ended March 30, 1997 and March 31, 1996 were calculated through
the use of the estimated annual income tax rates based on annualized
income (loss).
4. STOCKHOLDERS' EQUITY
On December 16, 1996 the Company redeemed 15 shares of Series B
Preferred Stock for $2,250,000. On February 4, 1997 the Company
redeemed the remaining 20 shares of Series B Preferred Stock for
$3,000,000.
On December 18, 1996, the Board of Directors designated a new series of
preferred stock of the Company termed Series C Junior Participating
Preferred Stock, $.01 par value ("Series C Preferred") and reserved 450
shares of the Series C Preferred for issuance. At the same time, the
Board of Directors declared a dividend of a right to acquire 1/100,000
of a share of Series C Preferred to the holder of each share of common
stock (the "Rights") under a Shareholder Rights Plan. The Rights will
trade with the common stock and be detachable from the common stock and
exercisable only in the event of an acquisition of or grant of the
right to acquire 15% or more of the common stock by one party or common
group or a tender offer or exchange offer to acquire 15% or more of the
common stock.
During the three months ended December 29, 1996, the Board of Directors
declared a dividend of $105,000 for the period July 1, 1996 through
September 30, 1996 on the Series B Preferred Stock equal to 8% per
annum of the redemption price for the shares of Series B Preferred
Stock ($150,000 per share). Pursuant to the Company's Amended and
Restated Certificate of Incorporation, the dividends were paid by the
delivery of 32,796 shares of the Company's common stock. Such dividends
were charged to additional paid-in capital.
Effective January 1, 1997 the Board of Directors declared a dividend of
$98,000 for the period October 1, 1996 through December 31, 1996 on the
Series B Preferred Stock equal to 8% per annum of the redemption price
for the outstanding shares of Series B Preferred Stock ($150,000 per
share). Pursuant to the Company's Amended and Restated Certificate of
Incorporation, the dividends were paid by the delivery of 33,136 shares
of the Company's common stock. Such dividends were charged to
additional paid-in capital.
On February 4, 1997 the Board of Directors declared a dividend of
$17,000 on the 20 shares of Series B Preferred Stock redeemed on
February 4, 1997 equal to 8% per annum of the redemption price for the
shares of Series B Preferred Stock ($150,000 per share). Pursuant to
the Company's Amended and Restated Certificate of Incorporation, the
dividends were paid by the delivery of 7,516 shares of the Company's
common stock. Such dividends were charged to additional paid-in
capital.
5. COMMITMENTS AND CONTINGENCIES
Bankruptcy Proceedings
Notwithstanding the confirmation and effectiveness of the Plan of
Reorganization (the "Plan") of the Company's predecessors (the
"Predecessor Companies"), the United States Bankruptcy Court for the
Northern District of Indiana, South Bend Division (the "Bankruptcy
Court") continues to have jurisdiction to, among other things, resolve
disputed prepetition claims and to resolve other matters that may arise
in connection with or relate to the Predecessor Companies' Plan. The
Company has resolved, through negotiation or through dismissal by the
Bankruptcy Court, approximately $38,000,000 in disputed claims. A total
of 9,861,986 shares of the Company's common stock have been issued to
the holders of unsecured claims against the Predecessor Companies in
settlement of the allowed unsecured claims against the estates of the
Predecessor Companies and to the Company's ESOP. The Company retained
50,843 shares of common stock which are included in treasury stock. The
remaining shares are being held pending resolution of certain retiree
medical claims.
Litigation
Uniroyal Retiree Benefits, Inc. ("URBI"), an organization that is
unaffiliated with the Company, administers a medical, prescription drug
and life insurance program for certain retired employees of the
Predecessor Companies and certain affiliates of the Predecessor
Companies. This program is funded by the Company in accordance with the
terms of an agreement entered into by and between the predecessors of
URBI and the Company in connection with the Predecessor Companies'
Plan. The Company had disputes with URBI concerning the eligibility of
certain participants in URBI's medical plan and the level of payments
due. URBI had filed a complaint with the United States District Court
for the Northern District of Indiana, South Bend Division, claiming the
Company had breached its agreement relating to funding URBI's
operations. The case was transferred to the Bankruptcy Court. The
Company filed counterclaims against URBI claiming breach of contract,
fraud, negligent misrepresentation, unjust enrichment, declaratory
judgment and clarification or reformation of contract. The Bankruptcy
Court ruled in favor of URBI with respect to certain matters and in
favor of the Company with respect to other matters. The Company filed
an appeal from the Bankruptcy Court's December 20, 1995 ruling with the
United States District Court for the Northern District of Indiana,
South Bend Division.
On February 13, 1997 the Company entered into a settlement agreement
with URBI which was approved by the Bankruptcy Court on February 25,
1997. The settlement agreement settles and resolves all previous claims
asserted or assertable, resolves all issues and disputes with respect
to intention, effect and interpretation of the original agreement, and
provides a future formula pursuant to which the Company will make
payments to URBI in order for URBI to provide medical, drug, and life
benefits to the participants. The agreement remains in effect until
there are no participants or eligible lives (as defined in the
agreement).
The Company is also engaged in litigation arising from the ordinary
course of business. Management believes the ultimate outcome of such
litigation will not have a material adverse effect upon the Company's
results of operations, cash flows or financial position.
Environmental Factors
The Company is subject to a wide range of federal, state and local laws
and regulations designed to protect the environment and worker health
and safety. The Company's management emphasizes compliance with these
laws and regulations. The Company has instituted programs to provide
guidance and training and to audit compliance with environmental laws
and regulations at Company owned or operated facilities. The Company's
policy is to accrue environmental and cleanup-related costs of a
non-capital nature when it is probable both that a liability has been
incurred and that the amount can be reasonably estimated.
Claims arising in connection with real property owned by the Company
are not affected by a settlement agreement entered into in connection
with the Predecessor Companies' Plan with the United States
Environmental Protection Agency, the United States Department of the
Interior, and the States of Wisconsin and Indiana. In connection with
the acquisition of a manufacturing facility in South Bend, Indiana, the
Company assumed costs of remediation of soil and ground water
contamination which the Company estimates will cost not more than
$1,000,000 over a five-to-seven year period. The Company has placed
$1,000,000 in an escrow account to be used for such remediation in
accordance with the terms of the purchase agreement. As of March 30,
1997 the Company had incurred approximately $59,000 of remediation
costs in respect of such facility.
The Company has established a reserve for clean-up costs, including
environmental remediation costs, related to the sale of the Company's
Ensolite Division and the Company's exit from its Mishawaka, Indiana
leased manufacturing facility. The Company estimates that all such
clean-up costs will total approximately $250,000; however, the ultimate
cost will depend on the extent of contamination found as the project
progresses. The Company expects the clean-up to be substantially
completed within Fiscal 1997.
Based on information available as of March 30, 1997, the Company
believes that the costs of known environmental matters either have been
adequately provided for or are unlikely to have a material adverse
effect on the Company's operations, cash flows or financial position.
6. (LOSS) INCOME PER COMMON SHARE
The computations of primary and fully diluted (loss) income per common
share for the three months and six months ended March 30, 1997 and
March 31, 1996 are based on the weighted average number of common
shares issued and outstanding (or to be issued pursuant to the
Predecessor Companies' Plan) less the average number of shares held in
treasury for the period. Primary and fully diluted loss per common
share for the three months and six months ended March 30, 1997 and
March 31, 1996 does not include the assumed conversion of the then
outstanding Preferred Stock nor the exercise of the warrants and the
employee stock options since their inclusion would have been
anti-dilutive. The convertible preferred stock issued to the PBGC, the
warrants and stock options are considered to be common stock
equivalents (see Note 4 for information regarding the redemption of the
Series B Preferred Stock).
7. STATEMENT OF CASH FLOWS
Supplemental disclosures of cash flow information are as follows (in
thousands):
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Six Months Six Months
Ended Ended
March 30, March 31,
1997 1996
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Income tax payments $ 60 $ 70
Interest payments 4,563 4,879
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The purchases of property, plant and equipment and net cash used in
financing activities for the six months ended March 30, 1997 and March
31, 1996 does not include $77,000 and $846,000, respectively, related
to property held under capitalized leases.
Net cash used in financing activities for the six months ended March
30, 1997 and March 31, 1996 does not include the dividends paid on the
Series B Preferred Stock, since they were paid with the issuance of
73,448 and 57,573 shares, respectively, of the Company's common stock.
During the second quarter of Fiscal 1996 the Company made a matching
contribution to its 401(k) Savings Plan. The contribution was made to
the 401(k) Savings Plan by the re-issuance of the 52,369 common
shares of treasury stock and the issuance of 8,279 additional
common shares. No contribution was made during the six months ended
March 30, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Second Quarter Fiscal 1997 Compared with
the Second Quarter Fiscal 1996
Net Sales. The Company's net sales decreased in the second quarter of Fiscal
1997 by approximately 4% ($2,026,000) to $51,466,000 from $53,492,000 in the
second quarter of Fiscal 1996. During Fiscal 1996 the Company sold its Ensolite
specialty foams division ("Ensolite Sale"). Included in the second quarter of
Fiscal 1996 are net sales of Ensolite of approximately $6,015,000. Excluding
such sales from the prior period amounts, net sales of the Company's continuing
businesses increased by approximately 8% in the second quarter of Fiscal 1997
compared to the second quarter of Fiscal 1996. The increase is attributable to
increased net sales for both the High Performance Plastics and Coated Fabrics
Segments as the result of unit volume increases. The increases were partially
offset by decreased net sales in the Specialty Adhesives Segment due to a
relocation to a newer facility which resulted in a temporary halting of
production.
Net sales by the High Performance Plastics Segment increased in the second
quarter of Fiscal 1997 by approximately 8% ($2,322,000) to $32,470,000 from
$30,148,000 in the second quarter of Fiscal 1996. The increase was principally
due to increases in unit volume of both Royalite(R) thermoplastic products and
Polycast(R) acrylic products.
Net sales by the Coated Fabrics Segment increased in the second quarter of
Fiscal 1997 by approximately 27% ($3,868,000) to $18,011,000 from $14,143,000 in
the second quarter of Fiscal 1996. This is principally due to increased sales to
the automotive industry for a new coated vinyl product for door panels
introduced in late Fiscal 1995.
Net sales of the Specialty Adhesives Segment decreased in the second quarter of
Fiscal 1997 by approximately 89% ($8,216,000) to $985,000 from $9,201,000 in the
second quarter of Fiscal 1996. During Fiscal 1996 the Company sold its Ensolite
specialty foams division. Included in the second quarter of Fiscal 1996 are net
sales of Ensolite of approximately $6,015,000. Excluding such sales from the
prior period amounts, net sales of the Specialty Adhesives Segment decreased by
approximately 69% in the second quarter of Fiscal 1997 compared to the second
quarter of Fiscal 1996. The decrease is due to the halt in production of the
Company's adhesives and sealants products during the second quarter of Fiscal
1997 while the Company relocated its Specialty Adhesives Segment, as well as
certain other Company operations, to its South Bend, Indiana facility.
Income (Loss) Before Interest and Income Taxes. Income before interest and
income taxes for the second quarter of Fiscal 1997 was $1,226,000, compared to a
loss before interest and income taxes of $1,146,000 before for the second
quarter of Fiscal 1996.
The High Performance Plastics Segment's income before interest and income taxes
for the second quarter of Fiscal 1997 increased to $2,963,000 from $2,271,000 in
the second quarter of Fiscal 1996. The increase was primarily due to increased
sales of Royalite thermoplastic sheet and Polycast acrylic products. Also, the
increase was due to lower production levels at Polycast in Fiscal 1996 due to
employee retraining time and an inventory rationalization initiative which led
to a temporary higher cost structure. In addition, during the second quarter of
Fiscal 1996 the Company increased the reserve for estimated back pay and related
employment taxes and retraining costs by $158,000 due to settlement of a strike
by Polycast employees.
The Coated Fabrics Segment's loss before interest and income taxes decreased in
the second quarter of Fiscal 1997 to $5,000 from a loss before interest and
income taxes of $1,943,000 in the second quarter of Fiscal 1996 primarily due to
the 27% increase in sales. Also contributing to the significant decrease in the
loss was the impact of the Company's decision in September 1996 to dispose of
the segment's Port Clinton, Ohio manufacturing operation. As a result of that
decision, in Fiscal 1996 the Company established reserves associated with
long-lived assets to be disposed of in accordance with SFAS No. 121. In
accordance with SFAS No. 121, during the second quarter of Fiscal 1997 the
Company did not incur depreciation expense on the long-lived assets to be
disposed.
The Specialty Adhesives Segment's loss before interest and income taxes
increased in the second quarter of Fiscal 1997 to $1,451,000 from a loss before
interest and income taxes of $1,282,000 in the second quarter of Fiscal 1996.
The increase in the loss was primarily due to decreased net sales in the second
quarter of Fiscal 1997 as a result of the relocation of the Specialty Adhesives
Segment's manufacturing operations to the South Bend, Indiana facility.
Amortization of reorganization value in excess of amounts allocable to
identifiable assets in the second quarter of Fiscal 1997 and Fiscal 1996 was
$189,000 and $192,000, respectively.
Not allocated to the segments in the second quarter of Fiscal 1997 was
approximately $92,000 of miscellaneous expense. There were no such amounts in
the second quarter of Fiscal 1996.
Interest Expense. Interest expense in the second quarter of Fiscal 1997
decreased to $2,469,000 from $2,619,000 in the second quarter of Fiscal 1996.
The decrease is primarily due to the interest income earned by the Company on
the $5,000,000 11.75% note issued by RBX, Inc. as part of the Ensolite Sale in
June 1996.
Income Tax Benefit. Income tax benefit in the second quarter of Fiscal 1997 was
$394,000 as compared to $1,288,000 in the second quarter of Fiscal 1996. The
provisions for income tax benefit were calculated through the use of the
estimated income tax rates based on annualized income (loss).
First Two Fiscal Quarters 1997 Compared with
the First Two Fiscal Quarters 1996
Net Sales. The Company's net sales decreased in the first two quarters of Fiscal
1997 by approximately 3% ($2,675,000) to $97,493,000 from $100,168,000 in the
first two quarters of Fiscal 1996. During Fiscal 1996 the Company sold its
Ensolite specialty foams division. Included in the first two quarters of Fiscal
1996 are net sales of Ensolite of approximately $11,449,000. Excluding such
sales from the prior period amounts, net sales of the Company's continuing
businesses increased by approximately 10% in the first two quarters of Fiscal
1997 compared to the first two quarters of Fiscal 1996. This increase is
attributable to increased net sales in all three segments of the Company.
Net sales by the High Performance Plastics Segment increased in the first two
quarters of Fiscal 1997 by approximately 5% ($2,628,000) to $57,774,000 from
$55,146,000 in the first two quarters of Fiscal 1996. The increase was
principally due to increased volume at both Royalite and Polycast.
Net sales by the Coated Fabrics Segment increased in the first two quarters of
Fiscal 1997 by approximately 18% ($4,930,000) to $32,849,000 from $27,919,000 in
the first two quarters of Fiscal 1996. This increase is principally due to
increased net sales in the automotive industry resulting from the Company's new
coated vinyl product line introduced in late Fiscal 1995 which is being used for
door panel applications.
Net sales of the Specialty Adhesives Segment decreased in the first two quarters
of Fiscal 1997 by approximately 60% ($10,233,000) to $6,870,000 from $17,103,000
in the first two quarters of Fiscal 1996. During Fiscal 1996 the Company sold
its Ensolite specialty foams division. Included in the first two quarters of
Fiscal 1996 are net sales of Ensolite of approximately $11,449,000. Excluding
such sales from the prior period amounts, net sales of the Specialty Adhesives
Segment increased by approximately 22%. The increase is attributable to
increased net sales of the Company's adhesives and sealants products used
primarily in the commercial roofing industry.
Income (Loss) Before Interest and Income Taxes. Income before interest and
income taxes for the first two quarters of Fiscal 1997 was $1,966,000, compared
to a loss before interest and income taxes of $3,322,000 for the first two
quarters of Fiscal 1996.
The High Performance Plastics Segment's income before interest and income taxes
for the first two quarters of Fiscal 1997 increased approximately 39% to
$4,308,000 from $3,104,000 in the first two quarters of Fiscal 1996. The
increase was primarily attributable to increased sales of Royalite thermoplastic
sheet and Polycast acrylic products. The increase was also due to the
establishment of the $808,000 reserve in Fiscal 1996 for estimated back pay and
related employment taxes and employee retraining costs in settlement of a strike
by Polycast employees as well as a planned inventory reduction which lowered
production levels in the second quarter of Fiscal 1996 and led to a temporary
higher cost structure.
The Coated Fabrics Segment's loss before interest and income taxes decreased in
the first two quarters of Fiscal 1997 to $1,082,000 from $3,870,000 in the first
two quarters of Fiscal 1996 primarily due to increased sales. Also contributing
to the decrease was the impact of the Company's decision effective in Fiscal
1996 to dispose of the segment's Port Clinton, Ohio manufacturing operation. As
a result of that decision, in Fiscal 1996 the Company established reserves
associated with long-lived assets to be disposed of in accordance with SFAS No.
121. In accordance with SFAS No. 121 during the first two quarters of Fiscal
1997 the Company did not incur depreciation expense on the long-lived assets to
be disposed.
The Specialty Adhesives Segment's loss before interest and income taxes
decreased in the first two quarters of Fiscal 1997 to $666,000 from $2,172,000
in the first two quarters of Fiscal 1996. The decrease is primarily due to
increased sales in the first two quarters of Fiscal 1997 compared to the first
two quarters of Fiscal 1996. Also contributing to the decrease was the reduction
of reserves established in connection with the Ensolite Sale based on the
Company's performance under the toll manufacturing agreement with Rubatex as
well as the reduction of reserves established to clean up and exit the
Mishawaka, Indiana manufacturing facility and move to the Company's South Bend,
Indiana manufacturing facility based on the refinement of management's estimates
of such costs.
Amortization of reorganization value in excess of amounts allocable to
identifiable assets in the first two quarters of Fiscal 1997 and Fiscal 1996 was
$377,000 and $384,000, respectively.
Not allocated to the segments in the first two quarters of Fiscal 1997 was
approximately $217,000 of miscellaneous expense. There were no such amounts in
the first two quarters of Fiscal 1996.
Interest Expense. Interest expense in the first two quarters of Fiscal 1997
decreased to $4,669,000 from $5,168,000 in the first two quarters of Fiscal
1996. The decrease is primarily due to the interest income earned by the Company
on the $5,000,000 11.75% note issued by RBX, Inc. as part of the Ensolite Sale
in June 1996.
Income Tax Benefit. Income tax benefit in the first two quarters of Fiscal 1997
was $875,000 as compared to $3,009,000 in the first two quarters of Fiscal 1996.
The provisions for income tax benefit were calculated through the use of the
estimated income tax rates based on annualized income (loss).
Liquidity and Capital Resources
For the first two quarters of Fiscal 1997, operating activities used $8,307,000
of cash as compared to $3,890,000 used during the first two quarters of Fiscal
1996. The increase in cash used in operating activities for the Fiscal 1997
period is primarily attributable to the increases in accounts receivable and
inventories and the timing of payment of accrued expenses.
Net cash used in investing activities for the first two quarters of Fiscal 1997
was $7,328,000 as compared to $3,328,000 used during the first two quarters of
Fiscal 1996. Net cash was used to purchase property, plant and equipment during
the comparative periods. The increase in expenditures for property, plant and
equipment during the first two quarters of Fiscal 1997 was primarily due to
retrofitting the South Bend, Indiana facility to accommodate the Company's
adhesives and sealants business. The Company does not have any significant
specific commitments for the purchase of property, plant and equipment.
Net cash provided by financing activities was $13,690,000 during the first two
quarters of Fiscal 1997 as compared to $6,993,000 provided during the first two
quarters of Fiscal 1996. The Company redeemed the remaining 35 shares of the
Series B Preferred Stock at par value of $5,250,000 during the first two
quarters of Fiscal 1997. The principal source of cash during the first two
quarters of Fiscal 1997 and Fiscal 1996 was borrowings under the Company's
revolving line of credit.
The Company had approximately $78,000 in cash and cash equivalents on March 30,
1997 as compared to approximately $2,023,000 at September 29, 1996. Working
capital at March 30, 1997 was $37,188,000 compared to $29,148,000 at September
29, 1996. The Company had $19,571,000 of outstanding borrowings under its
$25,000,000 revolving credit facility (subject to a borrowing base limitation of
approximately $24,244,000 at March 30, 1997). The principal uses of cash during
the first two quarters of Fiscal 1997 were to pay the semi-annual interest
payment on the Company's Senior Secured Notes and to redeem the remaining
outstanding shares of its Series B Preferred Stock. The Company believes that
cash from its operations and its ability to borrow under the revolving credit
facility mentioned above provide it sufficient liquidity to finance its existing
level of operations and meet its debt service obligations. However, there can be
no assurance that the Company's operations together with amounts available under
the revolving credit facility will continue to be sufficient to finance its
existing level of operations and meet its debt service obligations. The
Company's ability to meet its debt service and other obligations depends upon
its future performance, which in turn, is subject to general economic conditions
and to financial, business and other factors, including factors beyond the
Company's control. If the Company is unable to generate sufficient cash flow
from operations, it may be required to refinance all or a portion of its
existing debt or obtain additional financing. There can be no assurance that the
Company will be able to obtain such refinancing or additional financing. The
Company believes that it currently has sufficient liquidity to finance its
existing level of operations.
Effects of Inflation
The markets in which the Company sells products are competitive. In particular,
the Company has generally encountered effective resistance to price increases in
connection with its sales of coated fabrics to the automotive industry and its
sales of acrylics to the aerospace industry. Thus, in an inflationary
environment the Company may not in all instances be able to pass through to
consumers general price increases; the Company's operations may be materially
impacted if such conditions were to occur. The Company has not in the past been
adversely impacted by general price inflation.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
(a) The Company knows of no material pending legal proceedings to
which the Company or any of its subsidiaries is a party or of
which any of their property is the subject other than routine
litigation incidental to the Company's business.
(b) No legal proceedings were terminated during the second quarter
ended March 30, 1997, other than routine litigation incidental
to the Company's business, except that in February 1997 the
Company settled the litigation pending since 1994 with
Uniroyal Retirement Benefits, Inc. ("URBI") in the United
States District Court for the Northern District of Indiana,
South Bend Division. The settlement provided for the Company
to continue to provide funding for URBI but at a reduced
funding level that reflects URBI's current operations.
Item 2. Changes in Securities
None.
Item 3. Default upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On March 28, 1997, the Company held its annual meeting of
stockholders in New York, New York. A total of 12,885,307
shares of capital stock of the Company were entitled to vote
at the meeting. Of this amount, no votes were present in
person and 10,994,399 were represented by proxy. The number of
shares that were present at the meeting constituted a quorum
for the transaction of all business that was to be considered
at the meeting. At that time certain proposals were submitted
to a vote by the stockholders.
Proposal number 1 was to elect eight directors for a term of
one year to be elected by holders of common stock. The
following directors were elected:
<TABLE>
<CAPTION>
Voted For Withheld
--------- ---------
<S> <C> <C> <C>
Peter C.B. Bynoe 8,213,252 2,781,147
Howard R. Curd 8,217,500 2,776,899
Richard D. Kimbel 8,221,052 2,773,347
Curtis L. Mack 8,212,967 2,781,432
Roland H. Meyer 8,224,567 2,769,832
John A. Porter 8,224,939 2,769,460
Thomas J. Russell 8,224,867 2,769,532
Robert L. Soran 8,217,236 2,777,163
</TABLE>
Proposal number 2 was to consider and take action upon the
ratification of the selection of Deloitte & Touche LLP to
serve as the independent public accountants for the Company
for the fiscal year ending September 28, 1997. The following
summarizes the results of the vote:
<TABLE>
<CAPTION>
Voted For Voted Against Abstained
---------- ------------- ---------
<S> <C> <C> <C>
10,923,950 41,177 29,272
</TABLE>
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
1. Settlement agreement dated as of February 13, 1997 by and
between Uniroyal Technology Corporation and Uniroyal
Retiree Benefits, Inc.
2. By-laws of Uniroyal Technology Corporation as amended and
restated to March 28, 1997.
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: May 9, 1997 By: /s/ George J. Zulanas
----------- ----------------------
George J. Zulanas, Jr.
Vice President, Treasurer and
Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
<PAGE>
Exhibit 1.
AMENDED AND RESTATED
SETTLEMENT AGREEMENT
THIS AMENDED AND RESTATED SETTLEMENT AGREEMENT (this "Agreement") is made
this 13th day of February, 1997 by and between UNIROYAL TECHNOLOGY CORPORATION,
a Delaware corporation having an office at 2 North Tamiami Trail, Suite 900,
Sarasota, Florida 34236 ("UTC"), and UNIROYAL RETIREE BENEFITS, INC., an Indiana
nonprofit corporation having an office at 202 Lincolnway East, Mishawaka,
Indiana 46544 ('URBI").
WHEREAS, numerous disputes and issues have arisen between the parties
regarding their respective duties and obligations under the agreement dated
July, 1992 (the "Original Agreement") between the Official Retiree Committee and
the debtors in the jointly administered chapter 11 cases styled as In re U.E.
Systems, Inc., et al., Case No. 91-32791-HCD (Bankr. N.D. Ind.); and
WHEREAS, UTC and URBI desire to settle and resolve their disputes on
amicable terms, avoid the expense, delay and risk of continued litigation, and
replace their respective duties and obligations under the Original Agreement
with the duties and obligations set forth below;
NOW THEREFORE, in consideration of the premises and the agreements
hereinafter contained, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, UTC and URBI hereby covenant and
agree as follows:
1. Defined Terms. Capitalized terms used herein shall have the meanings set
forth below:
(a) "Annual Adjustment Percent" means (i) one hundred twenty five
percent (125%) of the percentage increase in the Index for the twelve (12)
months immediately preceding the Record Date for any Plan Year that commences on
or before October 1, 2002, and (ii) one hundred percent (100%) of the percentage
change in the Index for the twelve (12) months immediately preceding the Record
Date for any Plan Year that commences after October 1, 2002.
(b) "Annual Statement" means the schedule to be submitted by URBI to
UTC with respect to each Plan Year setting forth, as of the Record Date for such
Plan Year (i) the name, address, birth date, and social security number of each
(A) Under-65 Participant, (B) Over-65 Participant, and (C) Eligible Life, and
(ii) the amount of URBI's reserves as of the Record Date (excluding prepaid
items and cash on hand for current month operating expenses).
(c) "Approval Order" means (i) the order to be entered by the
Bankruptcy Court in the First Lawsuit, in substantially the form attached hereto
as Exhibit A-1, (A) determining that the judgments previously entered in the
First Lawsuit have been satisfied and released, (B) authorizing and directing
the release to UTC of (I) all funds deposited by UTC with the Bankruptcy Court
pursuant to an order entered in the First Lawsuit on February 2, 1996, and (II)
all interest thereon, and (C) dismissing the First Lawsuit with prejudice, (ii)
the order to be entered by the Bankruptcy Court in the Second Lawsuit, in
substantially the form attached hereto as Exhibit A-2 (A) approving the
Agreement and (B) authorizing and directing the parties to comply with the
Agreement and (iii) the order of the United States District Court for the
Northern District of Indiana, South Bend Division, remanding the First Lawsuit
back to the Bankruptcy Court for disposition, in substantially the form attached
hereto as Exhibit A-3.
(d) "Bankruptcy Court" means the United States Bankruptcy Court for
the Northern District of Indiana, South Bend Division.
(e) "Base Year" means the Plan Year that commenced on October 1, 1996
and terminates on September 30, 1997.
(f) "Chapter 11 Cases" means the jointly administered chapter 11 cases
pending before the Bankruptcy Court and styled as In re U.E. Systems, Inc., et
al, Case No. 91-32791-HCD.
(g) "Debtors" means the debtors in the Chapter 11 Cases.
(h) "Dependent" means a person who (i) is lawfully married to a
Retiree as of the Record Date, or (ii) was lawfully married to a Retiree on the
date such Retiree died; or (iii) is a natural child of a Retiree, a legally
adopted child of a Retiree, or a stepchild of a Retiree who is claimed as a
dependent on the Retiree's federal income tax return for the preceding calendar
year, and in each case, who, as of the Record Date, is (A) less than nineteen
(19) years of age, (B) nineteen (19) years of age or older, but less than
twenty-five (25) years of age, and is a full-time student, or (C) legally
permanently disabled.
(i) "Effective Date" means the first business day after the date on
which action may be taken to enforce the Approval Order pursuant to Federal Rule
of Civil Procedure 62, unless otherwise agreed by the parties in writing.
(j) "Eligible Life" means a Retiree who, as of the Record Date, is
alive, and for whom URBI is providing life insurance.
(k) "Escrow Account" means the account established by URBI pursuant to
paragraph 7 of the Original Agreement.
(l) "First Lawsuit" means the adversary proceeding styled as Uniroyal
Retiree Benefits, Inc. v. Uniroyal Technology Corporation, No. 95-3008-HCD.
(m) "Index" means the general Medical Care component of the Consumer
Price Index for All Urban Consumers, U.S. City Average, as published by the
Bureau of Labor Statistics of the United States Department of Labor, or in the
event such index ceases to be published, any substantially similar successor
index.
(n) "Over-65 Participant" means a Participant who, as of the Record
Date, is sixty-five (65) years old or older.
(o) "Participant" means any Retiree or Dependent (A) who is alive on
the Record Date, (B) on whose behalf premiums have been paid to participate as
of the Record Date in the medical benefits plan then provided by URBI, (C) for
whom effective as of the Record Date, coverage has been provided under the
medical benefits plan then provided by URBI, and (D) to whom the annualized cost
of participation is not less than ninety percent (90%) of the annualized cost to
other Participants of the same age as such Retiree or Dependent who have
available to them the maximum level of medical benefits then being provided by
URBI to Participants of such age.
(p) "Plan" means the Third Amended Plan of Reorganization For Polycast
Technology Corporation and Its Affiliated Debtors, as amended and confirmed by
order of the Bankruptcy Court dated August 19, 1992.
(q) "Plan Year" means a twelve (12) month period commencing on
October 1 of one year and expiring on September 30 of the following calendar
year.
(r) "Record Date" means, with respect to any Plan Year, the August 1
immediately preceding the commencement of such Plan Year.
(s) "Retiree" means any person who retired prior to November 13, 1991
from employment with any of the Debtors, Uniroyal Plastics Company, Inc., or
Uniroyal, Inc., (in each case, to the extent the Debtors or Uniroyal Plastics
Company, Inc. assumed responsibility for the provision of retiree medical or
prescription drug benefits to such person at any time after such person's
retirement), excluding any person who was a salaried employee of Uniroyal, Inc.
or Uniroyal Plastics Company, Inc., who retired on or before October 31, 1986.
(t) "Second Lawsuit" means the adversary proceeding styled as Uniroyal
Retiree Benefits, Inc. v. Uniroyal Technology Corporation, No. 95-3142-HCD.
(u) "Under-65 Participant" means a Participant who, as of the Record
Date, is under sixty five (65) years of age.
2. Purpose and Effect. (a) The parties have entered into this Agreement in
order to (i) settle and resolve all rights and claims asserted or assertable in
the First Lawsuit and the Second Lawsuit, (ii) resolve all issues and disputes
(whether or nor previously raised) between the parties with respect to the
intention, effect, and interpretation of the Original Agreement, (iii) provide a
feasible formula pursuant to which UTC will make payments to URBI in order for
URBI to provide (A) medical and drug benefits to Participants, and (B) life
insurance benefits for all Eligible Lives, and (iv) clarify, amend and restate
the rights and obligations of the parties to each other as contemplated by
paragraph 18 of the Original Agreement.
(b) Upon the occurrence of the Effective Date and the performance by
the parties of all obligations to be performed on or before the Effective Date,
the Original Agreement and all rights and obligations thereunder, shall be
superseded in their entirety and replaced with this Agreement and the rights and
obligations created hereby. With the exception of the obligations set forth in
paragraphs 6(a) and 9 hereof, which shall become valid and enforceable upon the
execution of this Agreement by the parties, this Agreement shall be null and
void and of no force or effect until the occurrence of the Effective Date and
the performance by the parties of all duties to be performed on or before the
Effective Date.
(c) Nothing contained herein shall constitute an admission by either
of the parties of the truth, validity or propriety of any of the allegations
made in the First Lawsuit or the Second Lawsuit.
3. Base Year Payments. (a) On or before the tenth (10th) day of each month
of the Base Year that commences after the occurrence of the Effective Date, UTC
shall pay to URBI the amount of $178,898.17.
(b) The amount to be paid by UTC to URBI with respect to the Base Year
has been calculated on the basis of the following head-count information, which
(with the exception of the information contained in paragraph 3(b)(iii), which
the parties acknowledge to be incorrect, but is being stipulated to and used by
the parties for purposes of this Agreement) the parties hereby stipulate and
agree is true, accurate and complete:
(i) As of the Record Date for the Base Year there are a total of
five hundred twelve (512) Under-65 Participants;
(ii) As of the Record Date for the Base Year there are a total of
seven hundred sixty eight (768) Over-65 Participants; and
(iii)As of the Record Date for the Base Year there are a total of
one thousand six hundred seventy (1,670) Eligible Lives.
(c) The amount of each monthly payment to be made by UTC pursuant to
paragraph 3(a) above is calculated by taking one-twelfth (1/12th) of the sum of
the following amounts:
(i) The amount of $2,602.00 multiplied by the number of Under-65
Participants specified in paragraph 3(b)(i);
(ii) The amount of $606.50 multiplied by the number of Over-65
Participants specified in paragraph 3(b)(ii);
(iii)The amount of $74.11 multiplied by the number of Eligible
Lives specified in paragraph 3(b)(iii); and
(iv) The amount of $175.78 multiplied by the sum of (A) the
number of Under-65 Participants specified in paragraph 3(b)(i), plus (B) the
number of Over-65 Participants specified in paragraph 3(b)(ii).
(d) On the Effective Date, UTC shall pay to URBI the difference
between (i) $894,490.85, and (ii) the total amount paid by UTC to URBI during
the months of October, November and December 1996 and January and February 1997.
4. Subsequent Plan Year Payments. (a) On or before the tenth (10th) day of
each month of each Plan Year after the Base Year, UTC shall pay to URBI an
amount equivalent to one-twelfth (1/12th) of the sum of the following amounts:
(i) The amount by which the number of Under-65 Participants for
the prior Plan Year was multiplied, increased (or decreased, if applicable) by
the Annual Adjustment Percent and multiplied by the number of Under-65
Participants as of the Record Date;
(ii) The amount by which the number of Over-65 Participants for
the prior Plan Year was multiplied, increased (or decreased, if applicable) by
the Annual Adjustment Percent and multiplied by the number of Over-65
Participants as of the Record Date;
(iii)The amount of $74.11 multiplied by the number of Eligible
Lives as of the Record Date; and
(iv) The amount of $175.78 multiplied by the sum of (i) the
number of Over-65 Participants as of the Record Date, plus (ii) the number of
Under-65 Participants as of the Record Date.
(b) With respect to each Plan Year, the amount UTC is to pay per month
pursuant to paragraph 4(a) above shall be reduced by an amount equivalent to
one-twelfth (1/12th) of the amount by which URBI's reserves (excluding prepaid
items and cash on hand for current month operating expenses) exceed $1,200,000
as of the Record Date for such Plan Year. In no event shall the provisions of
this subparagraph require URBI to make a net payment to UTC.
(c) For purposes of illustration, Exhibit B hereto contains examples
of funding calculations under this paragraph 4.
5. Computation of Participants and Eligible Lives. (a) URBI shall submit to
UTC on or before the September 1 immediately preceding the commencement of each
Plan Year an Annual Statement with respect to each Plan Year. An officer of URBI
shall certify that, to the best of his knowledge and belief, the information
contained in each Annual Statement is true, accurate and complete by executing
an acknowledgment substantially in the form attached hereto as Exhibit C with
respect to each Annual Statement. Notwithstanding any other provision hereof to
the contrary, UTC shall have no obligation to make monthly payments to URBI
during any Plan Year after the Base Year until thirty (30) days after the
submission of an Annual Statement to UTC. The foregoing sentence shall only
operate to delay, but not excuse, UTC's obligation to make monthly payments to
URBI under this Agreement.
(b) Not more than twenty (20) days after UTC's receipt of an Annual
Statement, UTC shall submit to URBI objections with respect to the inclusion of
any person on the Annual Statement as an Under-65 Participant, Over-65
Participant, or Eligible Life. Such objections shall be in writing, shall state
with specificity their basis, and shall be accompanied by an acknowledgment
substantially in the form attached hereto as Exhibit D. If no such objection is
timely made by UTC, the information contained in the Annual Statement shall be
binding for purposes of calculating UTC's payment obligations with respect to
such Plan Year.
(c) The parties shall work together in good faith to resolve amicably
any objections made by UTC pursuant to paragraph 5(b). Except as the parties may
otherwise agree in writing, objections not resolved by agreement within ten (10)
business days after such objections are received by URBI shall be submitted to
binding arbitration to be conducted in South Bend, Indiana pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. The
non-prevailing party shall pay the costs of the arbitration; provided, that if
neither party shall prevail entirely, the arbitrator shall allocate the cost to
both URBI and UTC in inverse proportion to their respective degree of success in
the arbitration.
(d) Pending the resolution of any objections submitted by UTC with
respect to an Annual Statement, the information contained in the Annual
Statement shall be utilized to calculate the amount of UTC's monthly payments to
URBI hereunder. UTC may recoup the amount of any overpayments resulting from the
operation of the preceding sentence from subsequent monthly payments until such
overpayments are fully recovered.
6. Additional UTC Payment. (a) Upon the execution of this Agreement by the
parties, UTC shall deliver to URBI's counsel, the law firm of Botkin Leone &
Eslinger, the amount of Five Hundred Thousand Dollars ($500,000.00), such amount
to be held in escrow by Botkin Leone & Eslinger, to be distributed (together
with all interest accrued thereon) (i) to the Escrow Account upon the occurrence
of the Effective Date, or (ii) to UTC, if the Effective Date has not occurred by
February 28, 1997, in which case the Effective Date shall not occur unless or
until the $500,000 is otherwise paid to URBI in cash or readily available funds.
(b) On the Effective Date, URBI shall certify to UTC the amount of the
funds held in the Escrow Account as of the Effective Date immediately prior to
the receipt of the payment made pursuant to paragraph 6(a) above.
(c) URBI may use the funds paid into the Escrow Account or any funds
held therein or transferred therefrom for URBI's continuing operations as URBI
deems appropriate. UTC shall have no continuing interest in or rights to the
Escrow Account or any funds held therein or paid or transferred therefrom.
7. Mutual Releases. (a) Except as specifically provided herein, UTC, on
behalf of itself and any and all of its affiliates, subsidiaries, stockholders,
predecessors, directors, officers, employees, representatives, agents, advisors,
successors and assigns, past and present (each, a "UTC Party"), jointly and
severally, shall, as of the Effective Date, fully and irrevocably release, waive
and forever discharge (and hereby does so release, waive and discharge) URBI and
any and all of its affiliates, subsidiaries, predecessors, directors, officers,
employees, representatives, agents, advisors, successors and assigns, past and
present (each, a "URBI Party"), from and against any and all manner of rights,
claims, demands, actions, causes of action, losses, obligations, agreements,
damages, costs, expenses and liabilities of every kind and nature whatsoever at
law or in equity, known or unknown and whether or not discoverable, which any
UTC Party ever may have had, currently has, or hereafter may have, against any
URBI Party arising out of or in any way relating to the Original Agreement.
(b) Except as specifically provided herein, URBI, on behalf of itself
and each URBI Party, jointly and severally, shall, as of the Effective Date,
fully and irrevocably release, waive and forever discharge (and hereby does so
release, waive and discharge) each UTC Party from and against any and all manner
of rights, claims, demands, actions, causes of action, losses, obligations,
agreements, damages, costs, expenses, and liabilities of every kind and nature
whatsoever at law or in equity, known or unknown and whether or not
discoverable, which any URBI Party ever may have had, currently has, or
hereafter may have, against any UTC Party arising out of or in any way relating
to the Original Agreement.
8. Termination of Certain Obligations. (a) The first time there are no
Participants as of the Record Date, UTC's obligation to make payments under this
Agreement shall cease and terminate; provided, that UTC shall continue to make
payments in respect of Eligible Lives until there are no remaining Eligible
Lives as of any Record Date; and provided further, that UTC's obligation to make
payments shall not cease and terminate if the cause for the lack of Participants
as of a Record Date is in any way related to UTC's failure to make the full
payments required by this Agreement.
(b) This Agreement shall terminate when there are neither any Eligible
Lives nor any Participants. Any funds held by URBI at the termination of this
Agreement shall be used for such purposes and in such manner as URBI in its
discretion shall determine consistent with its non-profit, tax exempt status.
9. Obtaining the Approval Order. Prior to the occurrence of the Effective
Date, UTC and URBI shall work together cooperatively and take all actions
necessary or appropriate to file and, to the extent applicable, obtain the entry
of the Approval Order in substantially the form attached hereto as Exhibits A-1,
A-2 and A-3.
10. Enactment of National Health Care Program. In the event that a national
health care program is enacted which provides or makes available to Participants
benefits comparable or superior to those then being provided by URBI, the
parties shall enter into good faith discussions regarding the appropriateness or
necessity of any modifications or amendments to this Agreement.
11. Eligibility. Nothing contained in this Agreement shall limit or in any
way restrict the eligibility of any Retiree or Dependent to participate in any
medical benefit or prescription drug plan or program provided by URBI, and UTC
acknowledges that it does not have the right to determine whether individual
Retirees or Dependents may participate in any such plan or program. No election
of a Retiree or Dependent to opt out of participation in a benefit program
provided by URBI, the Debtors, Uniroyal Plastics Company, Inc., or Uniroyal,
Inc. shall affect the eligibility of such Retiree or Dependent to participate in
any benefit program provided by URBI.
12. Benefits Plans Responsibility. URBI shall have the exclusive right to
and responsibility for the design, implementation and administration of all of
its benefits programs, including medical, prescription, drug and life insurance
benefits, for Retirees and Dependents and the discretion as to how funds paid by
UTC are allocated among the various benefit programs of URBI.
13. Provision of Certain Information to URBI; Meetings With Senior
Management. (a) Concurrently with the filing of all reports by or on behalf of
UTC with the Securities and Exchange Commission and with the issuance of all
press releases by or on behalf of UTC regarding material transactions, UTC shall
provide copies of such reports and releases to URBI.
(b) At the request of URBI, senior management of UTC shall meet with
URBI in South Bend, Indiana, up to twice per calendar year.
14. Notices. All notices and communications required or permitted to be
given under this Agreement (including, without limitation, Annual Statements and
any objections thereto) shall be deemed to have been duly given three (3) days
after mailing if in writing and delivered personally or mailed first-class,
postage prepaid, to the following addresses:
If to UTC:
President
Uniroyal Technology Corporation
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236
with a copy to:
General Counsel
Uniroyal Technology Corporation
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236
and
Thomas E Lauria, Esq.
White & Case
200 South Biscayne Boulevard
Miami, Florida 33131
If to URBI:
President
Uniroyal Retiree Benefits, Inc.
202 Lincolnway East
P. O. Box 1266
Mishawaka, Indiana 46544
with a copy to:
Charles S. Leone, Esq.
Botkin, Leone & Eslinger
105 E. Jefferson Boulevard
Suite 400
South Bend, Indiana 46601
All payments required to be made by UTC hereunder shall be addressed to:
President
Uniroyal Retiree Benefits, Inc.
220 Lincolnway East
P. O. Box 1266
Mishawaka, Indiana 46544
Either party may change the address to which any notice, communication or
payment is to be directed to it by giving written notice to the other in the
manner provided in this Paragraph 14.
15. Remedies. The parties acknowledge that they shall have all legal and
equitable remedies available for breach of this Agreement.
16. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements, and understandings between the
parties relating to the subject matter hereof, and no representation, promise,
inducement or statement of intention relating to the transactions contemplated
by this Agreement has been made by either party which is not set forth in this
Agreement, and neither party shall be bound by or liable for any such
representation, promise, inducement or statement of intention not so set forth.
17. Governing Law. This Agreement shall be governed by the laws of the
State of New York, excluding the conflict-of-laws provisions thereof.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
19. Assignment. This Agreement shall not be assignable by either party
hereto without the consent of the other, which consent shall not be unreasonably
withheld.
20. Amendment and Waiver. This Agreement may be amended, superseded or
canceled and any of the terms hereof may be waived, only by a written instrument
specifically referring to this Agreement and specifically stating that it
amends, supersedes or cancels this Agreement or waives any of its terms,
executed by both parties (or, in the case of a waiver, by the party waiving
compliance). The failure of either party at any time or times to require
performance of any provisions of this Agreement shall in no manner affect the
right of such party at a later time to enforce the same. No waiver by either
party of any breach of any provision of this Agreement in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of such breach, or a waiver of any breach of any other provision.
21. Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any person.
22. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
UNIROYAL TECHNOLOGY CORPORATION
By: /s/ HOWARD R. CURD
------------------
Howard R. Curd, Chairman and CEO
UNIROYAL RETIREE BENEFITS, INC.
By: /s/ EARL BURKHART
-----------------
Earl Burkhart, President
<PAGE>
Exhibit 2.
BY-LAWS
OF
UNIROYAL TECHNOLOGY CORPORATION
(a Delaware corporation)
AS AMENDED AND RESTATED TO MARCH 28, 1997
I. ARTICLE
Stockholders
1. SECTION Annual Meetings. The annual meeting of stockholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held each year at such date and time,
within or without the State of Delaware, as the Board of Directors shall
determine.
1. SECTION Special Meetings. Special meetings of stockholders for the
transaction of such business as may properly come before the meeting may be
called by order of a simple majority of the Board of Directors or the Chairman
of the Board of Directors acting on his own initiative, and shall be held at
such date and time, within or without the State of Delaware, as may be specified
by such order.
1. SECTION Notice of Meetings. Written notice of all meetings of the
stockholders, stating the place, date and hour of the meeting and the place
within the city or other municipality or community at which the list of
stockholders may be examined, shall be mailed or delivered to each stockholder
not less than 10 nor more than 60 days prior to the meeting. Notice of any
special meeting shall state in general terms the purpose or purposes for which
the meeting is to be held.
1. SECTION Adjournments. Any meeting of stockholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days or if after the adjournment a new date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
1. SECTION Stockholder Lists. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least 10 days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, either at a place within the city where the meeting is
to be held, which place shall be specified in the notice of the meeting, or, if
not so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, the list required by this section or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
1. SECTION Quorum. Except as otherwise provided by law or the Corporation's
Certificate of Incorporation, a quorum for the transaction of business at any
meeting of stockholders shall consist of the holders of record of a majority of
the issued and outstanding shares of the capital stock of the Corporation
entitled to vote at the meeting, present in person or by proxy. At all meetings
of the stockholders at which a quorum is present, all matters, except as
otherwise provided by law or the Certificate of Incorporation, shall be decided
by the vote of the holders of a majority of the shares entitled to vote thereat
present in person or by proxy. If there be no such quorum, the holders of a
majority of such shares so present or represented may adjourn the meeting from
time to time, without further notice, until a quorum shall have been obtained.
When a quorum is once present it is not broken by the subsequent withdrawal of
any stockholder. Solely for purposes of the Corporation's annual meeting of
stockholders to be held in 1994, a quorum for the transaction of business at
such meeting shall consist of the holders of record of forty percent (40%) of
the issued and outstanding shares of the capital stock of the Corporation
entitled to vote at the meeting, present in person or by proxy.
1. SECTION Organization. Meetings of stockholders shall be presided over by
the Chairman, if any, or if none or in the Chairman's absence the Vice Chairman,
if any, or if none or in the Vice Chairman's absence the President, if any, or
if none or in the President's absence a Vice President, or, if none of the
foregoing is present, by a chairman to be chosen by the stockholders entitled to
vote who are present in person or by proxy at the meeting. The Secretary of the
Corporation, or in the Secretary's absence an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present, the presiding officer of the meeting shall appoint any
person present to act as secretary of the meeting.
(a) SECTION Voting; Proxies; Required Vote. At each meeting of
stockholders, every stockholder shall be entitled to vote in person or by proxy
appointed by instrument in writing, subscribed by such stockholder or by such
stockholder's duly authorized attorney-in-fact (but no such proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period), and, unless the Certificate of Incorporation provides otherwise,
shall have one vote for each share of stock entitled to vote registered in the
name of such stockholder on the books of the Corporation on the applicable
record date fixed pursuant to these By-Laws. At all elections of directors the
voting may but need not be by ballot and a plurality of the votes cast there
shall elect. Except as otherwise required by law or the Certificate of
Incorporation, any other action shall be authorized by a majority of the votes
cast.
(a) Any action required or permitted to be taken by the stockholders of the
corporation must be effected at a duly called annual or special meeting of such
holders and may not be effected by any consent in writing by such holders.
(a) Where a separate vote by a class or classes, present in person or
represented by proxy, shall constitute a quorum entitled to vote on that matter,
the affirmative vote of the majority of shares of such class or classes present
in person or represented by proxy at the meeting shall be the act of such class,
unless otherwise provided in the Corporation's Certificate of Incorporation.
1. SECTION Notifications of Nominations and Proposed Business. Any
stockholder may nominate one or more persons for election as directors at a
meeting or propose business to be brought before a meeting, or both, only if
such stockholder has given timely notice in proper written form of his intent to
make such nomination or nominations or to propose such business. To be timely, a
stockholder's notice must be delivered or mailed and received by the Secretary
of the Corporation not less than 120 calendar days in advance of the date of the
Company's proxy statement released to stockholders in connection with the
previous year's annual meeting of stockholders, except that if no annual meeting
was held in the previous year or the date of the annual meeting has been changed
by more than 30 calendar days from the date contemplated at the time of the
previous year's proxy statement, a proposal shall be received by the Secretary
of the Corporation a reasonable time before the solicitation is made, prior to
such meeting. To be in proper written form, a stockholder's notice to the
Secretary shall set forth:
(i) the name and address of the stockholder who intends to make the
nominations or propose the business and, as the case may be, of the person or
persons to be nominated or of the business to be proposed;
(ii) a representation that the stockholder is a holder of record of
stock of the corporation entitled to vote at such meeting and, if applicable,
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice;
(iii) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder;
(iv) such other information regarding each nominee or each matter of
business to be proposed by such stockholder as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had the nominee been nominated, or intended to be nominated,
or the matter been proposed, or intended to be proposed by the Board of
Directors; and
(v) if applicable, the consent of each nominee to serve as director of
the corporation if so elected.
The chairman of the meeting may refuse to acknowledge the nomination
or any person or the proposal of any business not made in compliance with the
foregoing procedure.
1. SECTION Inspectors. The Board of Directors, in advance of any meeting,
may, but need not, appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not so
appointed, the person presiding at the meeting may, but need not, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the directors
in advance of the meeting or at the meeting by the person presiding thereat.
Each inspector, if any, before entering upon the discharge of his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question or matter determined by such
inspector or inspectors and execute a certificate of any fact found by such
inspector or inspectors.
I. ARTICLE
Board of Directors
1. SECTION General Powers. The business, property and affairs of the
Corporation shall be managed by, or under the direction of, the Board of
Directors.
(a) SECTION Qualification; Number; Term; Remuneration. Each director
shall be at least 18 years of age. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The number
of directors initially constituting the entire Board shall be one. Following the
initial appointment of six additional directors by such sole director, the
number of directors constituting the entire Board shall be seven or such larger
number as may be fixed from time to time by action of the stockholders or Board
of Directors, one of whom may be selected by the Board of Directors to be its
Chairman. The use of the phrase "entire Board" herein refers to the total number
of directors which the Corporation would have if there were no vacancies.
(a) Unless otherwise provided in the Corporation's Certificate of
Incorporation, Directors who are elected at an annual meeting of stockholders
shall hold office until the next annual meeting of stockholders and until their
successors are elected and qualified or until their earlier resignation,
disqualification, removal or death. Directors who are elected in the interim to
fill vacancies and newly created directorships shall hold office until the next
election of the class for which such directors shall have been chosen and until
their successors are elected and qualified or until their earlier resignation,
disqualification, removal or death.
(a) Directors may be paid their expenses, if any, of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
(a) One of the directors of the Corporation may serve as an "active"
director of the Corporation and may spend as much as twenty-five percent (25%)
of his available time working with the officers of the Corporation on business
strategy and such other areas of concern as the Board of Directors, in its
discretion, may designate.
1. SECTION Quorum and Manner of Voting. Except as otherwise provided by
law, a majority of the entire Board shall constitute a quorum. A majority of the
directors present, whether or not a quorum is present, may adjourn a meeting
from time to time to another time and place without notice. Except as otherwise
provided in the Certificate of Incorporation or these By-Laws, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, but in a case of an equality of
votes, the Chairman of the Board shall have a second or deciding vote.
1. SECTION Places of Meetings. Meetings of the Board of Directors may be
held at any place within or without the State of Delaware, as may from time to
time be fixed by resolution of the Board of Directors, or as may be specified in
the notice of meeting.
1. SECTION Annual Meeting. Following the annual meeting of stockholders,
the newly elected Board of Directors shall meet for the purpose of the election
of officers and the transaction of such other business as may properly come
before the meeting. Such meeting may be held without notice immediately after
the annual meeting of stockholders at the same place at which such stockholders'
meeting is held.
1. SECTION Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as the Board of Directors shall from time
to time by resolution determine, provided that meetings of the Board of
Directors shall be held not fewer than six (6) times during any fiscal year and
provided further that during the Corporation's 1993 fiscal year, the Board of
Directors shall meet a minimum of ten (10) times, with not more than one hundred
twenty (120) days between any two consecutive meetings. Notice need not be given
of regular meetings of the Board of Directors held at times and places fixed by
resolution of the Board of Directors.
1. SECTION Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, if any, by the Vice
Chairman of the Board, if any, by the President or by any three directors then
in office.
1. SECTION Telephone Meetings Permitted. Unless otherwise restricted by the
Certificate of Incorporation or by these By-Laws, members of the Board of
Directors, or any committee designated by the Board, may participate in a
meeting of the Board or of such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this by-law shall constitute presence in person at such
meeting.
1. SECTION Notice of Meetings. A notice of the place, date and time and the
purpose or purposes of each meeting of the Board of Directors shall be given to
each director by mailing the same at least three days before the special
meeting, or by telegraphing or telephoning the same or by delivering the same
personally not later than twenty-four hours before the time set for the meeting.
1. SECTION Organization. At all meetings of the Board of Directors, the
Chairman, if any, or if none or in the Chairman's absence or inability to act,
the Vice Chairman, if any, or, in the Vice Chairman's absence or inability to
act a chairman chosen by the directors, shall preside. The Secretary of the
Corporation shall act as secretary at all meetings of the Board of Directors
when present, and, in the Secretary's absence, the presiding officer may appoint
any person to act as secretary.
(1) SECTION Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because such person's or
persons' votes are counted for such purpose, if: the material facts as to the
person's relationship or interest and as to the contract or transaction are
disclosed or are known to the Board or the committee, and the Board or committee
in good faith authorizes the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or the material facts as to the person's
relationship or interest as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or the contract or transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified by the Board, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction.
1. SECTION Resignation. Unless otherwise provided in these By-Laws or the
Corporation's Certificate of Incorporation, any director may resign at any time
upon written notice to the Corporation and such resignation shall take effect
upon receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. At or prior to the annual meeting of stockholders held in
fiscal year 1994, any or all of the directors may be removed at any time, but
only for cause and only by the affirmative vote of a majority of the Board of
Directors or by holders of at least two-thirds of the outstanding shares of
stock entitled to vote for the election of directors cast at a meeting of the
stockholders called for that purpose. Subsequent to the annual meeting of
stockholders held during fiscal year 1994, any or all of the directors may be
removed at any time, with or without cause, by a vote of the stockholders
entitled to elect such director or directors. Except as may otherwise be
provided by law, cause for removal shall be construed to exist only if:
(x) the Director whose removal is proposed
(1) has been convicted of a felony by a court of competent jurisdiction and
such conviction is no longer subject to direct appeal,
(1) has engaged in fraudulent or dishonest conduct, or gross abuse of
authority or discretion, with respect to the Corporation, and
(1) has been declared of unsound mind by order of a court of competent
jurisdiction, and such declaration is no longer subject to direct appeal, or has
committed an action which constitutes intentional misconduct or knowing
violation of law if such action in either event results both in an improper
substantial personal benefit and a material injury to the Corporation.
and (y) removal would be in the best interests of the Corporation.
1. SECTION Vacancies. Unless otherwise provided in the Certificate of
Incorporation or these By-Laws (and with respect to the addition of two
additional directors to be elected by the holders of the Series A Preferred
Stock and Series B Preferred Stock as provided in the Certificate of
Incorporation), vacancies on the Board of Directors, whether caused by
resignation, death, disqualification, removal, an increase in the authorized
number of directors or otherwise, may be filled by the affirmative vote of a
majority of the remaining directors, although less than a quorum, or by a sole
remaining director, or at a special meeting of the stockholders called for such
purpose.
1. SECTION Action by Unanimous Written Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
1. SECTION Compensation of Directors. The Board of Directors or any
committee it may designate shall have the authority to fix the compensation, if
any, of directors.
I. ARTICLE
Committees
1. SECTION Appointment. From time to time the Board of Directors by a
resolution adopted by a majority of the entire Board may appoint any committee
or committees for any purpose or purposes, to the extent lawful, which shall
have powers as shall be determined and specified by the Board of Directors in
the resolution of appointment; provided, however, that the Board of Directors
shall appoint an executive committee, an audit committee and a compensation
committee and shall delegate such powers and authority to such committees as the
Board of Directors deems necessary and proper and as is customary in similar
publicly held corporations.
1. SECTION Procedures, Quorum and Manner of Acting. Each committee shall
fix its own rules of procedure, and shall meet where and as provided by such
rules or by resolution of the Board of Directors. Except as otherwise provided
by law, the presence of a majority of the then appointed members of a committee
shall constitute a quorum for the transaction of business by that committee, and
in every case where a quorum is present the affirmative vote of a majority of
the members of the committee present shall be the act of the committee. Each
committee shall keep minutes of its proceedings, and actions taken by a
committee shall be reported to the Board of Directors.
1. SECTION Action by Unanimous Written Consent. Any action required or
permitted to be taken at any meeting of any committee of the Board of Directors
may be taken without a meeting if all the members of the committee consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the committee.
1. SECTION Term; Termination. In the event any person shall cease to be a
director of the Corporation, such person shall simultaneously therewith cease to
be a member of any committee appointed by the Board of Directors.
I. ARTICLE
Officers
1. SECTION Election and Qualifications. The Board of Directors shall elect
the officers of the Corporation, which shall include a Chairman of the Board, a
Chief Executive Officer, a President and a Secretary, and may include, by
election or appointment, one or more Vice Presidents (any one or more of whom
may be given an additional designation of rank or function), a Treasurer and
such Assistant Secretaries, such Assistant Treasurers and such other officers as
the Board may from time to time deem proper; provided, however, that Howard R.
Curd shall be elected to serve as the Corporation's Chief Executive Officer.
Each officer shall have such powers and duties as may be prescribed by these
By-Laws and as may be assigned by the Board of Directors or the President. Any
two or more offices may be held by the same person except the offices of
President and Secretary.
1. SECTION Term of Office and Remuneration. The term of office of all
officers shall be until the next annual meeting of the Board of Directors and
until their respective successors have been elected and qualified, but any
officer may be removed from office, either with or without cause, at any time by
the vote of a majority of the entire Board of Directors. Any vacancy in any
office may be filled for the unexpired portion of the term by the Board of
Directors. The remuneration of all officers of the Corporation may be fixed by
the Board of Directors or in such manner as the Board of Directors shall
provide.
1. SECTION Resignation; Removal. Any officer may resign at any time upon
written notice to the Corporation and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified in the
resignation.
1. SECTION Chairman of the Board. The Chairman of the Board of Directors,
if there be one, shall preside at all meetings of the Board of Directors and
shall have such other powers and duties as may from time to time be assigned by
the Board of Directors.
1. SECTION Chief Executive Officer. The Chief Executive Officer of the
Corporation shall have such duties as customarily pertain to that office. The
Chief Executive Officer shall have general management and supervision of the
property, business and affairs of the Corporation and over its other officers;
may appoint and remove assistant officers and other agents and employees, other
than officers referred to in Section 1 of this Article IV; and may execute and
deliver in the name of the Corporation powers of attorney, contracts, bonds and
other obligations and instruments.
1. SECTION President. The President of the Corporation may execute and
deliver in the name of the Corporation contracts and other obligations and
instruments pertaining to the regular course of the duties of said office, and
shall have such other authority and duties as from time to time may be assigned
by the Board of Directors or the Chief Executive Officer.
2. SECTION Vice President. A Vice President may execute and deliver in the
name of the Corporation contracts and other obligations and instruments
pertaining to the regular course of the duties of said office, and shall have
such other authority and duties as from time to time may be assigned by the
Board of Directors, the Chief Executive Officer or the President.
1. SECTION Treasurer. The Treasurer shall in general have all duties
incident to the position of Treasurer and such other duties as may be assigned
by the Board of Directors, the Chief Executive Officer or the President.
1. SECTION Secretary. The Secretary shall in general have all the duties
incident to the office of Secretary and such other duties as may be assigned by
the Board of Directors, the Chief Executive Officer or the President.
1. SECTION Assistant Officers. Any assistant officer shall have such powers
and duties of the officer such assistant officer assists as such officer, the
Chief Executive Officer, the President or the Board of Directors shall from time
to time prescribe.
1. SECTION Other Officers. The other officers, if any, of the Corporation
shall have such powers and duties in the management of the Corporation as shall
be stated in a resolution of the Board of Directors which is not inconsistent
with these by-laws and, to the extent not so stated, as generally pertain to
their respective offices, subject to the control of the Board. The Board may
require any officer, agent or employee to give security for the faithful
performance of the duties of such person.
i) SECTION Indemnification of Directors, Officers and Employees. A director
of the Corporation shall not be personally liable either to the Corporation or
any stockholder for monetary damages for breach of fiduciary duty as a director,
except ( for any breach of the director's duty of loyalty to the Corporation or
its stockholders, or ( for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of the law, or ( for any matter in
respect of which such director shall be liable under Section 174 of Title 8 of
the General Corporation Law of the State of Delaware or any amendment thereto or
successor provision thereto, or ( for any transaction from which the director
shall have derived an improper personal benefit. Neither amendment nor repeal of
this paragraph (a) nor the adoption of any provision of the Certificate of
Incorporation inconsistent with this paragraph (a) shall eliminate or reduce the
effect of this paragraph (a) in respect of any matter occurring, or any cause of
action, suit or claim that, but for this paragraph (a) of this Article, would
accrue or arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
(a) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to, or testifies in, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature, by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding to the full extent permitted
by law, and the Corporation may adopt By-Laws or enter into agreements with any
such person for the purpose of providing for such indemnification.
(a) To the extent that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (b) of this Article, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(a) Expenses incurred by an officer, director, employee or agent in
defending or testifying in a civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such director or officer is not entitled
to be indemnified by the Corporation against such expenses as authorized by this
Article, and the Corporation may adopt By-Laws or enter into agreements with
such persons for the purpose of providing for such advances.
(a) The indemnification permitted by this Article shall not be deemed
exclusive of any other rights to which any person may be entitled under any
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding an office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
(a) The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, employee benefit plan trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Article or otherwise.
(a) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to, or testifies in, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature, by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding to the full extent permitted
by law, and the Corporation may adopt By-Laws or enter into agreements with any
such person for the purpose of providing for such indemnification.
I. ARTICLE
Books and Records
1. SECTION Location. The books and records of the Corporation may be kept
at such place or places within or outside the State of Delaware as the Board of
Directors or the respective officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in the By-Laws and by such officer or agent as shall be
designated by the Board of Directors.
1. SECTION Addresses of Stockholders. Notices of meetings and all other
corporate notices may be delivered personally or mailed to each stockholder at
the stockholder's address as it appears on the records of the Corporation.
(a) SECTION Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date shall not be more than 60 nor less than 10 days
before the date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
(a) In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
and which record date shall be not more than 60 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
I. ARTICLE
Certificates Representing Stock
1. SECTION Certificates; Signatures. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice Chairman of the Board of Directors, or the President or
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate
may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The name of the holder of record of the shares represented thereby, with the
number of such shares and the date of issue, shall be entered on the books of
the Corporation.
1. SECTION Transfers of Stock. Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any, shares of
capital stock shall be transferable on the books of the Corporation only by the
holder of record thereof in person, or by duly authorized attorney, upon
surrender and cancellation of certificates for a like number of shares, properly
endorsed, and the payment of all taxes due thereon.
1. SECTION Fractional Shares. The Corporation may, but shall not be
required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Corporation may pay in cash the fair
value of fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a stockholder except as therein
provided.
The Board of Directors shall have power and authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates representing shares of the Corporation.
1. SECTION Lost, Stolen or Destroyed Certificates. The Corporation may
issue a new certificate of stock in place of any certificate, theretofore issued
by it, alleged to have been lost, stolen or destroyed, and the Board of
Directors may require the owner of any lost, stolen or destroyed certificate, or
his legal representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate.
I. ARTICLE
Dividends
Subject always to the provisions of law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to stockholders; the division
of the whole or any part of such funds of the Corporation shall rest wholly
within the lawful discretion of the Board of Directors, and it shall not be
required at any time, against such discretion, to divide or pay any part of such
funds among or to the stockholders as dividends or otherwise; and before payment
of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, thinks proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purpose as the Board of Directors
shall think conducive to the interest of the Corporation, and the Board of
Directors may modify or abolish any such reserve in the manner in which it was
created.
I. ARTICLE
Ratification
Any transaction, questioned in any law suit on the ground of lack of
authority, defective or irregular execution, adverse interest of director,
officer or stockholder, non-disclosure, miscomputation, or the application of
improper principles or practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the stockholders, and if so ratified
shall have the same force and effect as if the questioned transaction had been
originally duly authorized. Such ratification shall be binding upon the
Corporation and its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
I. ARTICLE
Corporate Seal
The corporate seal shall have inscribed thereon the name of the Corporation
and the year of its incorporation, and shall be in such form and contain such
other words and/or figures as the Board of Directors shall determine. The
corporate seal may be used by printing, engraving, lithographing, stamping or
otherwise making, placing or affixing, or causing to be printed, engraved,
lithographed, stamped or otherwise made, placed or affixed, upon any paper or
document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
I. ARTICLE
Fiscal Year
The fiscal year of the Corporation shall be fixed, and shall be subject to
change, by the Board of Directors. Unless otherwise fixed by the Board of
Directors, the fiscal year of the Corporation shall be the twelve month period
ending on the Sunday following the last Friday in September of each year.
I. ARTICLE
Waiver of Notice
Whenever notice is required to be given by these By-Laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
I. ARTICLE
Bank Accounts, Drafts, Contracts, Etc.
1. SECTION Bank Accounts and Drafts. In addition to such bank accounts as
may be authorized by the Board of Directors, the primary financial officer or
any person designated by said primary financial officer, whether or not an
employee of the Corporation, may authorize such bank accounts to be opened or
maintained in the name and on behalf of the Corporation as he may deem necessary
or appropriate, payments from such bank accounts to be made upon and according
to the check of the Corporation in accordance with the written instructions of
said primary financial officer, or other person so designated by the Treasurer.
1. SECTION Contracts. Except as otherwise restricted by the Certificate of
Incorporation, the Board of Directors may authorize any person or persons, in
the name and on behalf of the Corporation, to enter into or execute and deliver
any and all deeds, bonds, mortgages, contracts and other obligations or
instruments, and such authority may be general or confined to specific
instances.
1. SECTION Proxies; Powers of Attorney; Other Instruments. The Chairman,
the Chief Executive Officer, the President or any other person designated by
either of them shall have the power and authority to execute and deliver
proxies, powers of attorney and other instruments on behalf of the Corporation
in connection with the rights and powers incident to the ownership of stock by
the Corporation. The Chairman, the Chief Executive Officer, the President or any
other person authorized by proxy or power of attorney executed and delivered by
either of them on behalf of the Corporation may attend and vote at any meeting
of stockholders of any company in which the Corporation may hold stock, and may
exercise on behalf of the Corporation any and all of the rights and powers
incident to the ownership of such stock at any such meeting, or otherwise as
specified in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any other
person.
1. SECTION Financial Reports. The Board of Directors may appoint the
primary financial officer or other fiscal officer and/or the Secretary to cause
to be prepared and furnished to stockholders entitled thereto any special
financial notice and/or financial statement, as the case may be, which may be
required by any provision of law.
I. ARTICLE
Amendments
Except as provided in the Certificate of Incorporation, the Board of
Directors shall have power to adopt, amend or repeal By-Laws. By-Laws adopted by
the Board of Directors may be repealed or changed, and new By-Laws made, by the
stockholders, and the stockholders may prescribe that any By-Law made by them
shall not be altered, amended or repealed by the Board of Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Condensed
Consolidated Balance Sheet as of March 30, 1997 and the Condensed Consolidated
Statement of Operations for the six month period ended March 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000890096
<NAME> Uniroyal Technology Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-29-1996
<PERIOD-END> MAR-30-1997
<CASH> 78
<SECURITIES> 0
<RECEIVABLES> 30,784
<ALLOWANCES> 358
<INVENTORY> 36,785
<CURRENT-ASSETS> 76,181
<PP&E> 111,563
<DEPRECIATION> 33,363
<TOTAL-ASSETS> 181,209
<CURRENT-LIABILITIES> 38,993
<BONDS> 91,248
0
0
<COMMON> 134
<OTHER-SE> 36,287
<TOTAL-LIABILITY-AND-EQUITY> 181,209
<SALES> 97,493
<TOTAL-REVENUES> 97,493
<CGS> 77,236
<TOTAL-COSTS> 95,527
<OTHER-EXPENSES> 18,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,669
<INCOME-PRETAX> (2,703)
<INCOME-TAX> (875)
<INCOME-CONTINUING> (1,828)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,828)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>