UNIROYAL TECHNOLOGY CORPORATION
Suite 900
Two North Tamiami Trail
Sarasota, Florida 34236
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Uniroyal Technology Corporation
will be held at the offices of Uniroyal Optoelectronics, LLC, #501 Sabal Park
Distribution Center, 3401 Cragmont Drive, Tampa, Florida on February 23, 1999 at
11:00 a.m., Eastern Standard Time, for the following purposes:
1. To elect eight directors for a term of one year, to be elected
by holders of common stock;
2. 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 26, 1999; and
3. To approve an amendment to the 1992 Non-Qualified Stock Option
Plan for directors of the Company.
4. To approve an amendment to the 1995 Non-Qualified Stock Option
Plan for directors of the Company.
5. To transact such other business as may properly come before
the meeting and any adjournment of the meeting.
The Board of Directors has fixed the close of business on January 4,
1999 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting. A complete list of stockholders entitled to vote
at the meeting will be available for examination by any stockholder, for any
purpose germane to the meeting, on and after February 12, 1999, during ordinary
business hours at the office of the Secretary of the Company, Two North Tamiami
Trail, Suite 900, Sarasota, Florida.
WHETHER OR NOT YOU PLAN TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IN THE UNITED STATES. PROMPT
RETURN OF THE PROXY WILL ASSURE A QUORUM AND SAVE THE COMPANY UNNECESSARY
EXPENSE.
OLIVER J. JANNEY
Secretary
Dated: January 15, 1999
<PAGE>
UNIROYAL TECHNOLOGY CORPORATION
Suite 900
Two North Tamiami Trail
Sarasota, Florida 34236
PROXY STATEMENT
This proxy statement and the accompanying form of proxy are being
furnished to the stockholders of Uniroyal Technology Corporation, a Delaware
corporation (the "Company"), on or about January 15, 1999 in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders to be held on February 23, 1999 at 11:00 a.m.,
Eastern Standard Time, at Uniroyal Optoelectronics, LLC, #501 Sabal Park
Distribution Center, 3401 Cragmont Drive, Tampa, Florida, and any adjournment
thereof. Any stockholder who executes and delivers a proxy may revoke it at any
time prior to its use by (i) giving written notice of revocation to the
Secretary of the Company, (ii) executing a proxy bearing a later date, or (iii)
appearing at the meeting, giving notice of revocation of the proxy and voting in
person.
Unless otherwise specified, all shares represented by effective proxies
will be voted by the proxy holder in favor of (i) the eight nominees as
directors; (ii) ratification of the selection of Deloitte & Touche LLP to serve
as the independent public accountants for the Company for the fiscal year ending
September 26, 1999; and (iii) adoption of amendments to the 1992 and 1995
Non-Qualified Stock Option Plans for directors of the Company. The Board of
Directors does not know of any other business to be brought before the meeting,
but, as to any such other business, proxies will be voted upon any such matters
in accordance with the judgment of the person or persons acting under the
proxies.
The cost of soliciting proxies will be borne by the Company. Original
solicitation of proxies by mail may be supplemented by telephone or telegram, by
personal solicitation by directors, officers or other regular employees of the
Company, who will not receive additional compensation for such services; the
cost of any such solicitation is expected to be nominal. Brokerage houses,
nominees, custodians and fiduciaries will be requested to forward soliciting
material to beneficial owners of stock held of record by them, and the Company,
upon request, will reimburse such persons for their reasonable out-of-pocket
expenses in doing so.
Only holders of record of outstanding shares of the common stock, $.01
par value per share ("Common Stock"), of the Company at the close of business on
January 4, 1999, are entitled to notice of, and to vote at the meeting. Each
stockholder is entitled to one vote for each share held on the record date.
There were 12,361,302 shares of Common Stock outstanding and entitled to vote on
January 4, 1999.
When a quorum is present at the meeting, the vote of the holders of a
majority of the stock having voting power present in person or by proxy shall
decide the action proposed in each matter listed in the accompanying Notice of
Annual Meeting of Stockholders except the election of directors, who are elected
by a plurality of all votes cast. Abstentions and broker "non-votes" will be
counted as present in determining whether the quorum requirement is satisfied. A
"non-vote" generally occurs when a nominee holding shares for a beneficial owner
does not vote on a proposal because the nominee has not received instructions as
to such proposal from the beneficial owner and does not have discretionary
powers as to such proposal. The aggregate number of votes entitled to be cast by
all stockholders present in person or represented by proxy at the meeting,
whether those stockholders vote "For" or "Against" or abstain from voting, will
be counted for purposes of determining whether a quorum is present. Abstentions
from voting by stockholders and broker "non-votes" are not counted for purposes
of determining whether a proposal has been approved.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of November 30, 1998, by (a) each person
known to the Company to be the beneficial owner of more than five percent of the
Common Stock, (b) all directors and nominees, (c) the Chief Executive Officer
and the other four most highly compensated executive officers of the Company and
(d) all directors and executive officers of the Company as a group:
<PAGE>
<TABLE>
At November 30, 1998
<CAPTION>
Common Stock
Name and Address of Beneficial Owner (1) Number of Shares Owned (2) Percent of Class (3)
- -------------------------------------- ----------------------- -----------------
<S> <C> <C>
Dr. Thomas J. Russell 1,810,705 12.76%
2 N. Tamiami Trail, Suite 1200
Sarasota, FL 34236
Pioneering Management Corp. 1,237,500 8.72%
60 State Street
Boston, MA 02109
Enforcement Counsel for Superfund 1,054,832 7.43%
United States Environmental Protection Agency
401 M Street, N.W., Mail Code LE 134-5
Washington, D.C. 20460
Dimensional Fund Advisors I 834,400 5.88%
1299 Ocean Avenue
Santa Monica, CA 90401
Howard R. Curd 995,346 (4) 7.01%
John A. Porter 667,695 (5) 4.71%
Robert L. Soran 486,342 (6) 3.43%
George J.Zulanas, Jr. 300,733 (7) 2.12%
Roland H. Meyer 188,374 (8) 1.33%
Oliver J. Janney 151,413 (9) 1.07%
Martin J. Gutfreund 110,604 (10) -11
Richard D. Kimbel ` 84,870 (12) -11
Curtis L.Mack 24,673 (13) -11
Peter C.B. Bynoe - 20,500 (14) -11
All directors and executive officers of the
Company as a group 3,030,550 (15) 21.36%
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors and persons who
own more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes of ownership with the
Securities and Exchange Commission (the "S.E.C.") and the Nasdaq National
Market. Officers, directors and greater than ten-percent beneficial owners are
required by S.E.C. regulations to furnish the Company with copies of all reports
that they file with the S.E.C. pursuant to Section 16(a) of the Exchange Act.
Based solely on a review of the copies of such forms furnished to the Company,
the Company believes that during fiscal 1998 its officers, directors and greater
than ten-percent beneficial owners complied with all applicable Section 16(a)
filing requirements, except that Mr. Thomas Russell, a ten-percent owner and
former director, reported a stock option exercise and gift of common stock after
he had ceased to be a director approximately five months late.
ELECTION OF DIRECTORS
Nominees for Director
<TABLE>
<CAPTION>
====================================================================================================================
NAME AGE POSITION DIRECTOR SINCE
====================================================================================================================
<S> <C> <C> <C>
Peter C.B. Bynoe 47 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Thomas E. Constance 62 Director 1998
- --------------------------------------------------------------------------------------------------------------------
Howard R. Curd 59 Chairman of the Board, Chief 1992
Executive Officer and Director
- --------------------------------------------------------------------------------------------------------------------
Richard D. Kimbel 54 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Curtis L. Mack 56 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Roland H. Meyer 71 Director 1992
- --------------------------------------------------------------------------------------------------------------------
John A. Porter 55 Director 1994
- --------------------------------------------------------------------------------------------------------------------
Robert L. Soran 55 President, Chief Operating Officer 1993
and Director
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Peter C.B. Bynoe is Chairman of the Audit Committee and a member of
the Executive Committee of the Board of Directors. Mr. Bynoe is Chairman of
Telemat Ltd., a project management and financial services consulting firm he
founded. He is also a partner in the Chicago law firm of Rudnick & Wolfe. Mr.
Bynoe also formerly served as the Executive Director of the Illinois Sports
Facilities Authority, a joint venture of the City of Chicago and the State of
Illinois created to build a new Comiskey Park for the Chicago White Sox. Mr.
Bynoe is also a director of Jacor Communications, which owns approximately 170
radio stations across the United States. Mr. Bynoe was formerly the co-owner
and Managing General Partner of the National Basketball Association's Denver
Nuggets. Mr. Bynoe is also an Overseer of Harvard University.
Thomas E. Constance is a member of the Compensation, Option, Trust
Fund and Executive Committees of the Board of Directors. Mr. Constance is a
Senior Partner of Kramer, Levin, Naftalis & Frankel LLP, a law firm in New York
City. He was a partner of Shea & Gould from 1971 to 1994 and served as
Chairman of the Executive Committee of that firm. Mr. Constance serves as a
Trustee of Lions Eye Bank, North Shore Hospital, the M.D. Sass Foundation, and
St. Vincent's Services. He also serves on the Advisory Boards of Barrington
Capital, L.P. and Atwood Richards Inc.
Howard R. Curd was appointed Chief Executive Officer of the Company as
of September 21, 1992. Mr. Curd is also a member of the Executive Committee of
the Board of Directors. Mr. Curd is also a director of KeySpan Energy
Corporation.
Richard D. Kimbel, MBA, is a member of the Audit, Compensation, Trust
Funds and Executive Committees of the Board of Directors. Mr. Kimbel had been
employed as an engineer by certain predecessors of the Company and the Company
from 1962 until June 1994; he served as Manager of Human Resources for the
Ensolite and Uniroyal Adhesives and Sealants divisions of the Company from June
1994 until June 1997. Mr. Kimbel is currently a special projects consultant to
the Company. From 1983 to 1986 and from 1989 to June 1994, Mr. Kimbel was
President of the United Rubber Workers, Local 65. Mr. Kimbel also served as an
executive board officer of the United Rubber Workers International Union from
1984 to 1987.
Curtis L. Mack is Chairman of the Trust Funds Committee and a member
of the Executive Committee of the Board of Directors. Mr. Mack is an attorney
specializing in labor law. Mr. Mack is currently a partner in Mack, Haygood &
McLean, a law firm based in Atlanta, Georgia. Mr. Mack was formerly a partner
in Mack & Bernstein, a law firm based in Atlanta, Georgia, from 1983 to 1994.
Mr. Mack taught labor and employment law at the University of Florida Law
School in 1973-1974; he was General Counsel of the Florida Public Employees
Relations Commission from 1974 to 1975, and he was Chairman of the Agency from
1975 to 1976; from 1976 to 1981 he was Regional Director of the National Labor
Relations Board in Atlanta, Georgia. Presently Mr. Mack is an adjunct professor
at the University of Michigan Law School, and also serves on the Advisory Board
to the School of Social Science at Michigan State University. Mr. Mack has
served as Special Assistant Attorney General for the State of Georgia since
1989 and as Chairman of the Human Relations Commission of the City of Atlanta
since 1989.
Roland H. Meyer is Chairman of the Compensation Committee and the
Option Committee and a member of the Executive Committee of the Board of
Directors. Mr. Meyer was elected Vice Chairman of American National Can
Company, a leading manufacturer of metal, glass and plastic packaging products,
in 1987. He was elected Chief Operating Officer of American National Can in
1988 and President in 1989. Mr. Meyer served as President and Chief Operating
Officer of American National Can until his retirement in June 1992. Mr. Meyer
was a director of Allied Van Lines from 1987 to 1992 and was a director and
Vice Chairman of the Can Manufacturers Institute, Inc. from 1985 to 1994. Mr.
Meyer is currently a director of American National Can and is a member of
American National Can's Executive Committee. Mr. Meyer also served for various
periods as a director of certain subsidiaries of American National Can. Mr.
Meyer is also a director, Vice Chairman and Chairman of the Executive
Committee of First Commercial Bank of Tampa and a director of the Catholic
Education Foundation, Inc. of the Diocese of St. Petersburg, Florida.
John A. Porter is a member of the Audit and Executive Committees of the
Board of Directors. Mr. Porter is a director of MCI Worldcom Inc., one of the
largest telecommunications companies in the world. He was Chairman of the Board
of Directors of LDDS Communications, Inc. ("LDDS") from 1988 until its merger
with Metromedia Communications in 1993 and was Vice Chairman of the Board from
1993 to 1997. He served as President and Chief Executive Officer of Telephone
Management Corporation from 1987 until it was merged with LDDS in August 1988.
Mr. Porter also serves as Chairman of the Board of Directors of Phillips &
Brooks/Gladwin, Inc., a manufacturer of pay telephone enclosures and equipment;
Chairman of the Board of Directors and Chief Executive Officer of Industrial
Electric Manufacturing Inc. a manufacturer of electrical power distribution
products; and a director of Inktomi, Inc., a San Mateo, California provider of
Internet services consisting of search engine and caching to Internet service
providers worldwide. Mr. Porter was previously the President and sole
shareholder of PM Restaurant Group, Inc., which filed a petition under Chapter
11 of the U.S. Bankruptcy Code in March 1995. Subsequent to March 1995, Mr.
Porter sold all of his shares in PM Restaurant Group, Inc.
Robert L. Soran was elected President and Chief Operating Officer of
the Company as of September 21, 1992. Mr. Soran is also a member of the
Executive Committee of the Board of Directors. Mr. Soran was President and
Chief Executive Officer of Tropicana Products Inc., a fruit beverage processor,
from 1986 until September 1991.
The Board of Directors held six meetings during fiscal 1998. The
average attendance by directors at these meetings was 95%, and all incumbent
nominees attended at least 75% of the Board and committee meetings that they
were scheduled to attend.
Among the committees of the Board of Directors are an Audit Committee,
a Compensation Committee, an Executive Committee, an Option Committee and a
Trust Funds Committee. The Board of Directors does not have a Nominating
Committee.
The Audit Committee recommends to the Board the selection of
independent accountants to audit the annual financial statements of the Company,
reviews the annual financial statements and meets with the Company's Chief
Financial Officer and independent accountants to review the scope and results of
the audit of the financial statements and other matters regarding the Company's
accounting, financial reporting and internal control systems. During fiscal 1998
the Audit Committee met four times. The members of the committee are Messrs.
Bynoe (Chairman), Kimbel and Porter.
<PAGE>
The Compensation Committee reviews management's recommendations with
respect to salary and incentive compensation of executive officers and other key
employees, as well as the Company's benefit plans and arrangements other than
stock option plans, and makes recommendations to the Board with respect to such
plans. During fiscal 1998 the Compensation Committee met three times. The
members of the Compensation Committee are Messrs. Meyer (Chairman), Kimbel and
Constance.
The Option Committee administers all of the stock option plans of the
Company. The members of the Option Committee are Messrs. Meyer (Chairman) and
Constance. The Option Committee met once during fiscal 1998.
The Trust Funds Committee reviews the Company's handling of trust funds
under its employee benefits plans. During fiscal 1998 the Trust Funds Committee
met twice. The members of the Trust Funds Committee are Messrs. Mack (Chairman),
Kimbel and Constance.
Compensation of Directors
Each director who is not an officer of the Company receives an annual
fee (the "Annual Retainer Fee") of $25,000, plus $1,000 for each meeting of the
Board of Directors attended, $2,500 per annum for service on a committee (except
the chairman of a committee, who receives $3,000 per annum) and $500 to $1,000
for each committee meeting attended, depending upon whether the committee
meeting is held in conjunction with a meeting of the Board of Directors,
independent of a meeting of the Board of Directors or by teleconference. Each
director receives reimbursement of his expenses incurred in attending each
meeting of the Board of Directors or of a committee.
Directors who are not officers of the Company may elect to apply up to
the entire amount of their Annual Retainer Fees and committee retainer fees in
exchange for options to purchase Common Stock pursuant to the 1992 Non-Qualified
Stock Option Plan (the "1992 Non-Qualified Plan"). The 1992 Non-Qualified Plan
provides that Common Stock underlying each option issued pursuant to such Plan
may be purchased for 100% of the market price of the Common Stock on the date of
grant. Although the amount of the Annual Retainer Fee is initially paid for the
option, such amount also constitutes 50% of the consideration payable for the
underlying Common Stock. When the Director exercises the option, the additional
50% of the purchase price of the Common Stock must be paid in cash by the
Director. If the Director does not timely exercise the option to purchase the
Common Stock, the Annual Retainer Fee applied to acquire the option will be
forfeited by the Director. In addition, each director of the Company has
received options to purchase shares of Common Stock under the 1995 Non-Qualified
Stock Option Plan (the "1995 Non-Qualified Plan"). No director who is not an
officer of the Company may receive options to purchase more than an aggregate of
10,000 shares of Common Stock in any calendar year under all of the Company's
Stock Option Plans. The Company is recommending amendments to the 1992
Non-Qualified Plan and the 1995 Non-Qualified Plan. The proposed amendments are
described on pages 19-26 of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
Mr. Kimbel, who serves as a member of the Compensation Committee, has
been employed by the Company and certain of its predecessor companies since
1962. Mr. Kimbel had been employed as an engineer by certain of the Predecessor
Companies and the Company from 1962 until June 1994, when he became Manager of
Human Resources for the Ensolite and Uniroyal Adhesives and Sealants divisions
of the Company; he is currently a consultant to the Company on special projects.
No executive officer of the Company served on the board of directors or
compensation committee of any entity which has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.
Executive Officers of the Company
Officers of the Company are appointed to serve until the meeting of the
Board of Directors following the next annual meeting of stockholders or until
their respective successors have been duly elected and qualified. Any officer of
the Company may be removed, pursuant to the Company's By-Laws, with or without
cause, by a vote of a majority of the entire Board of Directors. Any officer of
the Company may resign at any time upon notice to the Company. The following
table sets forth the name, age and position of each executive officer of the
Company:
<TABLE>
<CAPTION>
====================================================================================================================
NAME AGE POSITION
====================================================================================================================
<S> <C> <C>
Howard R. Curd 59 Chairman of the Board of Directors and
Chief Executive Officer
- --------------------------------------------------------------------------------------------------------------------
Robert L. Soran 55 Director, President and Chief Operating Officer
- --------------------------------------------------------------------------------------------------------------------
George J. Zulanas, Jr. 54 Vice President, Chief Financial Officer and
Treasurer
- --------------------------------------------------------------------------------------------------------------------
Oliver J. Janney 52 Vice President, General Counsel and Secretary
- --------------------------------------------------------------------------------------------------------------------
Martin J. Gutfreund 57 Vice President, Human Resources and
Administration
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The business experience of Messrs. Curd and Soran is described above
under "Election of Directors Nominees for Director".
Messrs, Zulanas, Janney and Gutfreund were elected to the positions set
forth above as of September 21, 1992.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Report of the Compensation Committee
Role of the Compensation Committee
As was earlier described in the section on committees of the Board of
Directors, the Compensation Committee is responsible for administering the
compensation program for the executive officers of the Company.
Compensation Philosophy
The Company's compensation philosophy with respect to the compensation
of the Company's executive officers consists of the following core principles:
o Base salary should be competitive in order to attract and retain
well-qualified executives.
o Incentive compensation should be directly related to achieving
specified levels of corporate financial performance. A
significant part of the executive officers' compensation
should be at risk, based upon the success of the Company.
o Long-term stock ownership of the Company's Common Stock by the
Company's executive officers creates a valuable link between the
Company's management and stockholders. Stock ownership gives
management strong incentives to properly balance the need for
short-term profits with long-term goals and objectives and to
develop strategies that build and sustain stockholder returns.
Executive Compensation Program
The Company's executive compensation program contains three components
which are intended to reflect the Company's compensation philosophy.
Base Salary. Base salary and adjustments to base salary are set by
employment agreements with Messrs Curd, Soran, Zulanas and Janney. The base
salaries for executive officers are targeted at the upper quartiles of the
competitive market. For this purpose, the Compensation Committee reviews and
considers the salary ranges of executive officers in comparable positions at
companies comparable to the Company in various industries. The Compensation
Committee's practice is to review the base salary of each executive officer
annually, at which time the executive officer's base salary may be increased
based upon the executive officer's individual performance and contributions to
the Company.
<PAGE>
Annual Bonus. The Company's executive officers, as well as a number of
other key employees of the Company, are eligible for an annual cash bonus
pursuant to the Company's Management Incentive Plan (the "MIP"). Target annual
bonus amounts for the executive officers are established at the beginning of the
fiscal year by the Compensation Committee. For this purpose, the Compensation
Committee reviews and considers bonus amounts awarded to officers of companies
in comparable positions in various industries comparable in size to the Company
and also considers Company performance and the achievement of each executive
officer in his area of responsibility and the resulting contribution to overall
corporate performance. Total payments into the MIP Plan for all participants,
including executive officers, were $821,000 for fiscal 1993, approximately
$515,000 for fiscal 1994, approximately $1,200,000 for fiscal 1995,
approximately $687,000 for fiscal 1996, approximately $1,680,000 for fiscal
1997, and approximately $1,948,000 for fiscal 1998.
Long Term Incentives. The executive officers of the Company and 47
other current members of management and other key employees have been granted
stock options pursuant to the Company's 1992 Stock Option Plan (the "1992 Stock
Option Plan"). In addition, 105 current members of management and other key
employees have been granted options under the Company's 1994 Stock Option Plan
(the "1994 Stock Option Plan"). The 1992 Stock Option Plan and 1994 Stock Option
Plan are intended to provide opportunities for stock ownership by management and
other key employees, which will increase their proprietary interest in the
Company and, consequently, their identification with the interests of the
stockholders of the Company. In addition, the executive officers have purchased
stock on their own as a demonstration of their commitment to the Company. Stock
options granted under the 1992 and 1994 Stock Option Plans have exercise prices
equal to the fair market value of the Company's Common Stock on the dates of
grant. The stock options have a ten-year term, except certain stock options
granted for three-year terms. A deferred compensation plan was instituted for
the executive officers in fiscal 1995; this improves the Company's short-term
cash flow. A split-dollar life insurance plan was also instituted, to facilitate
executive officers' saving for retirement. Effective October 1, 1998, the Board
of Directors approved a defined contribution retirement plan for certain
executives; benefits under such plan are conditional on an executive's being
employed by the Company until retirement.
Internal Revenue Code Section 162(m). Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), which became effective in 1994,
generally disallows a tax deduction to public companies for compensation over $1
million paid to the corporation's chief executive officer and each of the four
other most highly compensated executive officers. Certain exceptions are
provided for non-discretionary, performance-related compensation. The
Compensation Committee considers it unlikely that the compensation level of any
executive officer in 1999 would exceed the limit under Section 162(m). The
Compensation Committee will review the effects of Section 162(m), from time to
time, as it reviews changes in the design of compensation plans, to the extent
it deems appropriate.
Chief Executive Officer's Performance
The Compensation Committee has reviewed the compensation of the Chief
Executive Officer and has found the level appropriate in comparison with persons
holding similar positions in comparable companies and in light of favorable
developments at the Company during fiscal 1998, including the following:
acquisition by the Company, its officers and directors and certain other persons
of the 17 percent of the Company's common stock held by the Pension Benefit
Guaranty Corporation, increase in the Company's sales by 6 percent and earnings
before interest and taxes by 117 percent, continued strengthening of the
Company's key operating margins, refinancing of long-term debt resulting in
ongoing savings on interest expense of approximately $2 million per year,
continued acquisition program to increase earnings and broaden the product mix,
negotiation of a joint venture with Emcore Corporation to expand the Company's
business into high brightness light emitting diodes (LEDs) to enhance the
Company's prospects for growth, maximization of profitability of the automotive
businesses of the Company pending the completion of their divestiture, and
increasing the visibility of the Company's common stock in the market. All of
these developments have contributed to an increase in the price of the Company's
stock by 110% during the 1998 fiscal year.
ROLAND H. MEYER, CHAIRMAN
THOMAS E. CONSTANCE
RICHARD D. KIMBEL
<PAGE>
Summary Compensation Table
The following table sets forth the cash and other compensation paid by
the Company in respect of the fiscal year ended September 27, 1998, to the Chief
Executive Officer and the other four most highly compensated officers of the
Company. Certain of the executive officers of the Company also received certain
other compensation, including automobile allowances. The amount of such other
compensation received by each of these officers was less than the lesser of
$50,000 or 10% of his respective cash compensation as set forth in the Salary
and Bonus columns of this table.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------=========================
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------------------------------------------=========================
=================================== ============= ================= ================ ========================
<S> <C> <C> <C> <C>
Name and Principal Position Securities Underlying
Fiscal Year Salary Bonus Options
($) ($) (#)
=================================== ============= ================= ================ ========================
=================================== ------------- ----------------- ---------------- ========================
Howard R. Curd 1998 550,262 500,000 184,053
Chairman of the Board and Chief 1997 538,805 301,165 81,755
Executive Officer 1996 523,640 147,279 10,000
=================================== ------------- ----------------- ---------------- ========================
Robert L. Soran 1998 452,219 350,000 168,242
President & Chief 1997 442,712 247,454 66,275
Operating Officer 1996 430,107 117,208 10,000
=================================== ------------- ----------------- ---------------- ========================
George J. Zulanas, Jr 1998 228,971 180,000 97,432
Vice President, 1997 224,158 125,293 46,010
Chief Financial Officer & 1996 217,776 58,393 0
Treasurer
=================================== ------------- ----------------- ---------------- ========================
Oliver J. Janney 1998 223,977 175,000 81,621
Vice President, 1997 219,314 122,585 30,530
General Counsel & 1996 213,141 59,612 0
Secretary
=================================== ============= ================= ================ ========================
Martin J. Gutfreund 1998 145,409 95,014 12,500
Vice President, 1997 120,000 67,074 0
Human Resources and 1996 120,000 33,751 0
Administration
=================================== ============= ================= ================ ========================
</TABLE>
The Company has a salary administration program and the MIP for certain
management employees. The Board of Directors will consider any changes in
compensation for executive officers, including changes to the salary
administration program and the MIP, except for adjustments required pursuant to
employment agreements.
<PAGE>
Compensation Pursuant to Other Programs; Stock Option Plan
In addition to the salary administration program and MIP, in order to
retain and attract quality management, the Company maintains a compensation
program that includes stock option plans and benefit programs such as disability
and health insurance and death benefits. Stock options for key employees are
granted by the Option Committee, and the Compensation Committee reviews the
other benefit programs. The Option Committee has delegated to the Vice
President, Human Resources and Administration the authority to grant limited
stock options to key employees other than executive officers following written
approval by the Chief Executive Officer and the Chief Operating Officer of the
Company.
The options granted in the last fiscal year to the Chief Executive
Officer and the four most highly compensated executive officers of the Company
other than the Chief Executive Officer are set forth in the following table:
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
===================================================================================================================================
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreci-ation for Option
Term
Individual Grants
===================================================================================================================================
============================== =============== ======================= ============== ============== ================ =============
Number of
Securities % of Total Options
Underlying Granted to Employees Exercise
Options in Fiscal Year Price Expiration 5% 10%
Name Granted ($/Share) Date ($) ($)
======================= =============== ======================= ============== ============== ================ ================
======================= --------------- ----------------------- -------------- -------------- ---------------- ================
<S> <C> <C> <C> <C> <C> <C>
Howard R. Curd 5,000 1% $7.000 3/09/01 5,517 11,585
179,053 30% $9.625 8/20/08 1,194,093 2,823,331
======================= --------------- ----------------------- -------------- -------------- ---------------- ================
Robert L. Soran 5,000 1% $7.000 3/09/01 5,517 11,585
163,242 27% $9.625 8/20/08 1,018,387 2,580,794
====================== --------------- ----------------------- -------------- -------------- ---------------- ================
George J. Zulanas, Jr. 97,432 16% $9.625 8/20/08 589,767 1,494,585
===================== --------------- ----------------------- -------------- -------------- ---------------- ================
Oliver J. Janney 81,621 14% $9.625 8/20/08 494,061 1,252,047
====================== =============== ======================= ============== ============== ================ ================
Martin J. Gutfreund 12,500 2% $9.625 8/20/08 18,694 39,823
===================== =============== ======================= ============== ============== ================ ================
</TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
=====================================================================================================================
Shares Number of Securities Value of Unexercised
Acquired in Underlying Unexercised In-the-Money Options at
Exercise (#) Value Realized Options at September 27, September 27,1998 (16)
($) 1998 ($)
=====================================================================================================================
=====================================================================================================================
<S> <C> <C> <C> <C>
Name Exercisable/ Exercisable/
Unexercisable Unexercisable
=====================================================================================================================
=============================================================---------------------------=============================
Howard R. Curd 79,053 190,875 310,455/260,808 1,771,650/495,453
=============================================================---------------------------=============================
Robert L. Soran 63,242 157,634 265,000/229,517 1,513,438/397,736
=============================================================---------------------------=============================
George J. Zulanas, Jr. 47,432 117,842 136,364/143,442 776,196/290,438
=============================================================---------------------------=============================
Oliver J. Janney 31,621 75,495 113,636/112,151 646,305/192,271
=====================================================================================================================
Martin J. Gutfreund 15,811 36,365 68,181/12,500 388,092/0
=====================================================================================================================
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
Transactions with Directors
Thomas E. Constance, a director of the Company, is a Senior Partner of
the law firm of Kramer, Levin, Naftalis & Frankel LLP, which performed legal
services for the Company during fiscal year 1998.
Agreements with Executives
Mr. Curd, Chairman of the Board and Chief Executive Officer of the
Company, is employed pursuant to an agreement which was amended and restated as
of April 25, 1995. The agreement provides for a base salary of $480,300. Mr.
Curd's base salary is subject to adjustment annually during the term of the
agreement based on changes in the U.S. Consumer Price Index for all Urban
Consumers, U.S. City Average (the "CPI"). Pursuant to this provision, Mr. Curd's
base salary was increased by 1.69%, effective September 1, 1998. Mr. Curd is
also entitled to receive a bonus pursuant to the MIP at the end of each fiscal
year. Mr. Curd's employment agreement provides for a three-year base term
subject to automatic one-year extensions on each anniversary date of the
agreement unless such agreement is terminated by either party. In addition, Mr.
Curd is entitled to receive the base salary that he would have received for the
balance of the term of the agreement plus an amount equal to two years' salary
as severance upon termination of his employment by the Company.
Mr. Soran, President and Chief Operating Officer of the Company, is
employed pursuant to an agreement which was amended and restated as of April 25,
1995. The agreement is for a two-year term subject to automatic annual one-year
extensions on each anniversary date of the agreement unless such agreement is
terminated by either party. Mr. Soran's employment agreement provides for a base
salary of $395,000. Mr. Soran's base salary is subject to adjustment annually
during the term of the agreement based on changes in the CPI. Pursuant to this
provision, Mr. Soran's base salary was increased by 1.69%, effective September
1, 1998. Mr. Soran is also entitled to receive a bonus pursuant to the MIP at
the end of each fiscal year, as determined by the Board of Directors. In
addition, Mr. Soran is entitled to receive the base salary that he would have
received for the balance of the term of the agreement plus an amount equal to
one year's salary as severance upon termination of his employment by the
Company.
Mr. Zulanas, Vice President, Treasurer and Chief Financial Officer of
the Company, is employed pursuant to an agreement which was amended and restated
as of April 25, 1995. The agreement is for a two-year term subject to annual
one-year automatic extensions on each anniversary date of the agreement unless
such agreement is terminated by either party. Mr. Zulanas' employment agreement
provides for a base salary of $200,000. Mr. Zulanas' base salary is subject to
adjustment annually during the term of the agreement based on changes in the
CPI. Pursuant to this provision, Mr. Zulanas' base salary was increased by
1.69%, effective September 1, 1998. Mr. Zulanas is also entitled to receive a
bonus pursuant to the MIP at the end of each fiscal year, as determined by the
Board of Directors. In addition, Mr. Zulanas is entitled to receive the base
salary that he would have received for the balance of the term of the agreement
plus an amount equal to one year's salary as severance upon termination of his
employment by the Company.
Mr. Janney, Vice President, Secretary and General Counsel of the
Company, is employed pursuant to an agreement which was amended and restated as
of April 25, 1995. The agreement provides for a base salary of $195,500. Mr.
Janney's base salary is subject to adjustment annually during the term of the
agreement based on changes in the CPI. Pursuant to this provision, Mr. Janney's
base salary was increased by 1.69%, effective September 1, 1998. Mr. Janney is
also entitled to receive a bonus pursuant to the MIP at the end of each fiscal
year. Mr. Janney's employment agreement provides for a two-year base term
subject to automatic one-year extensions on each anniversary date of the
agreement unless such agreement is terminated by either party. In addition, Mr.
Janney is entitled to receive his base salary for the balance of the term of the
agreement plus an amount equal to one year's salary as severance upon
termination of his employment by the Company.
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph is a comparison of the five-year cumulative total
return among the Company, the Standard & Poor's 500 Composite Index and the
Standard & Poor's Chemical Index.
<TABLE>
<CAPTION>
TOTAL SHAREHOLDER RETURNS - DIVIDENDS REINVESTED
- ------------------------------------ -------------------------------------------------- -----------
Annual Return Percentage
Years Ending
==================================== =========== ============ ============ ============ -----------
Company/Index Sept. 94 Sept. 95 Sept. 96 Sept. 97 Sept. 98
==================================== =========== ============ ============ ============ -----------
<S> <C> <C> <C> <C> <C>
Uniroyal Technology Corp. -32.8 36.06 -21.87 42.00 107.04
- ------------------------------------ ----------- ------------ ------------ ------------ -----------
S&P 500 Index 3.69 29.74 20.33 40.45 9.05
- ------------------------------------ ----------- ------------ ============ ============ -----------
Chemicals (Specialty) - 500 -3.96 28.59 7.74 12.97 -21.36
- ------------------------------------ ----------- ------------ ============ ============ -----------
- ------------------------------------ --------------------------------------------------------------- ------------
Indexed Returns - Years Ending
==================================== ============ =========== ============ ============ ============ ------------
Company/Index Sept. 93 Sept. 94 Sept. 95 Sept. 96 Sept. 97 Sept. 98
==================================== ============ =========== ============ ============ ============ ------------
Uniroyal Technology Corp. 100 67.20 91.43 71.43 101.43 210.00
- ------------------------------------ ------------ ----------- ------------ ------------ ------------ ------------
S&P 500 Index 100 103.69 134.53 161.88 227.36 247.92
- ------------------------------------ ------------ ----------- ------------ ------------ ------------ ------------
Chemicals (Specialty) - 500 100 96.04 123.50 133.06 150.32 118.22
- ------------------------------------ ------------ ----------- ------------ ------------ ------------ ------------
</TABLE>
Source: Standard & Poor's Compustat
This comparison of five-year cumulative returns assumes that $100 was invested
on September 28, 1993 in Common Stock, the S&P 500 Composite Index and the S&P
Chemicals (Specialty) Index. No dividends were paid on the Common Stock.
<PAGE>
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal year ending
September 26, 1999, subject to approval by the stockholders. The Board of
Directors recommends that such appointment be ratified.
Representatives of Deloitte & Touche LLP will be present at the meeting
and will have the opportunity to make a statement, if they desire to do so, and
respond to appropriate questions.
APPROVAL AND ADOPTION OF AMENDMENTS TO
THE 1992 NON-QUALIFIED STOCK OPTION PLAN
The Company's 1992 Non-Qualified Stock Option Plan (the "1992 Plan") was adopted
by the Board of Directors on December 2, 1992, and was amended on December 14,
1993. The 1992 Plan became effective upon its approval at the 1994 annual
meeting of the Company's stockholders. The 1992 Plan was further amended by the
Board of Directors effective December 11, 1996. The 1992 Plan permits eligible
directors of the Company to elect to receive options to purchase Common Stock in
lieu of their annual Board of Directors and committee retainers. The number of
shares subject to such options is based upon a formula contained in the 1992
Plan but cannot exceed certain maximum limits specified in the 1992 Plan, which
are described below.
As of December 10, 1998, options to purchase 90,942 shares of Common
Stock were outstanding under the 1992 Plan, at exercise prices of $1.47 to
$3.1562 per share. All of such outstanding options are currently exercisable
(except options to purchase 2,040 shares of Common Stock) and expire over
periods ending not later than May 5, 2008. From the inception of the 1992 Plan
through December 10, 1998, 29,868 shares of Common Stock had been issued
pursuant to the exercise of options granted under the 1992 Plan.
On December 17,1998, the Board of Directors unanimously adopted an
amendment to the 1992 Plan, which, subject to approval of the stockholders,
would increase the 1992 Plan's limit on the maximum number of shares of Common
Stock that may be covered by all outstanding options granted to a non-employee
director under all Company stock option plans during a year to 30,000 shares
(and for grants under the 1992 Plan, if less, the number of shares that could be
purchased under such options with the director's maximum retainer for the
calendar year, as currently provided by the 1992 Plan).
The Board of Directors approved this amendment to increase such limit
on the maximum number of shares covered by options granted to directors under
the Company's stock option plans to ensure that the Company can continue to
grant options to eligible directors under its stock option plans at levels
determined appropriate by the Company and provide incentives to retain as
directors persons of training, experience and ability, encouraging their sense
of proprietorship and stimulating their active interests in the Company's
development and financial success. If approved by the stockholders, the 1992
Plan's limit on the maximum number of shares of Common Stock that may be subject
to all outstanding options granted to a non-employee director annually, would be
increased from 10,000 shares to 30,000 shares.
If this proposal is adopted, the 1992 Plan would be amended so that the
first sentence of Section 3(c) would read as follows:
"Notwithstanding any provision herein to the contrary, no Director
shall be granted any Option in any annual period which, if considered
together with all other outstanding and unexercised options granted by
the Company hereunder or pursuant to any other Company plan during such
annual period ("Outstanding Options"), would entitle such Director to
purchase more than the lesser of (i) the number of shares purchasable
with the maximum retainer earned or to be earned by such Director in
the calendar year in which a Grant Date occurs and (ii) 30,000 shares
of Stock ("Option Maximum")."
The affirmative vote of the holders of a majority of the shares of
outstanding Common Stock entitled to vote at the Annual Meeting and present in
person or by proxy is required to approve this proposal to amend the 1992 Plan.
The Board of Directors unanimously recommends a vote "FOR" this
Proposal to amend the 1992 Plan to increase the maximum number of shares for
which a non-officer director may receive options annually under 1992 Plan,
together with all outstanding options granted to such director under all other
Company stock option plans in such annual period, from 10,000 to 30,000 shares.
This proposal summarizes the essential features of the 1992 Plan, as
amended as described by this proposal. This summary is qualified in its entirety
by reference to the full text of the 1992 Plan, as so amended, which will be
made available to any stockholder of the Company requesting a copy in writing.
Conversion of Retainers into Options
The 1992 Plan offers directors who are not officers of the Company or a
subsidiary of the Company the opportunity to receive up to 100 percent of their
annual Board of Directors and committee retainers in the form of options to
purchase shares of Common Stock. Eligible directors, upon adoption of the 1992
Plan or upon becoming an eligible director thereafter, have an opportunity to
elect to receive options under the 1992 Plan in lieu of their cash retainer for
service on the Board of Directors or its committees. A director's election to
receive options under the 1992 Plan in lieu of his or her cash retainer becomes
effective thirty days after the director is first eligible to participate in the
1992 Plan, or, if a director does not make an election during such initial
thirty-day period, beginning in the calendar year immediately following the
Company's receipt of the director's election to receive options under the 1992
Plan. After a director's election to receive options under the 1992 Plan in lieu
of his or her annual cash retainers is effective, the election will remain in
effect for all later years of service until such election is revoked by the
director. Such revocation is effective beginning in the calendar year
immediately following receipt of the director's notice of such revocation by the
Company.
The 1992 Plan contains the following formula for determining the number
of shares subject to such an option:
Dollar amount of director's retainer to be converted
divided by
50% of the fair market value of a share of Common Stock
on the date the option is granted
The 1992 Plan also contains the following maximum limits on the number
of shares of Common Stock that can be purchased under options granted to
directors:
* no director may receive an option under the 1992 Plan on any
grant date to purchase more than 10,000 shares, and
* a director may not receive an option under the 1992 Plan in
any annual period that, together with all other outstanding
stock options granted by the Company to the director (whether
or not under the 1992 Plan) during such annual period, would
entitle such director to purchase more than the lesser of (i)
the number of shares purchasable with the maximum retainer
earned or to be earned by such director in the calendar year
in which the grant date occurs and (ii) 30,000 shares.
To the extent that a director has elected to receive an option under the 1992
Plan to purchase more than the maximum number of shares permitted under the
foregoing limitations, the director will receive the balance of the retainer
fees in cash.
Terms of Options
An option granted under the 1992 Plan generally gives a director the
right to purchase shares covered by the option at an exercise price equal to 50
percent of the fair market value of such shares on the date the option is
granted for a period beginning nine months, and ending ten years, after such
date of grant. If the director's service on the Board of Directors terminates
due to disability or death, the director or, following the director's death, his
or her estate or a person who acquires the right to exercise the option by
bequest or inheritance can exercise his or her options, to the extent
exercisable on the date of such termination, for a period of one year following
such termination. If a director's continuous service on the Board of Directors
terminates for any other reason, the director can exercise his or her options
within ninety days following such termination, to the extent the options were
exercisable on the date of such termination. In no event, however, may an option
be exercised after its scheduled expiration. The 1992 Plan does not generally
allow directors to transfer their options (other than by will or the laws of
descent and distribution following the director's death); however, the Board of
Directors does have discretion under the 1992 Plan to permit a director to
transfer his or her options to immediate family members, or a trust or similar
vehicle solely for their benefit, or such other persons or entities permitted by
the Board of Directors in its discretion.
Shares of Common Stock that may be delivered under the 1992 Plan may be
either authorized and unissued shares or treasury shares. Shares of Common Stock
subject to any expired or canceled unexercised options cease to be authorized
for delivery under the 1992 Plan.
A director may pay the exercise price of an option granted under the
1992 Plan in cash or by check or money order.
The 1992 Plan generally defines the "fair market value" of a share of
Common Stock to be the highest closing price of a share of Common Stock on a
national exchange or the Nasdaq National Market or, if not so listed, the
closing price of a share of Common Stock in the New York over-the-counter market
as reported by the National Association of Securities Dealers, Inc., in each
case, for the applicable date, or the next preceding date on which there was a
reported sale.
Changes in Capital
The 1992 Plan provides the Board of Directors with discretion to make
proportionate adjustments in the maximum number of shares of Common Stock which
may be sold or awarded to any director and the number and price of shares
covered by outstanding options to reflect changes in capitalization affecting
the Common Stock, such as a stock dividend, stock split, recapitalization,
merger, consolidation, split-up, combination, exchange of shares, or other forms
of reorganization or changes affecting the Common Stock.
Amendment and Termination
The Board of Directors has reserved the right under the 1992 Plan to
amend, suspend or terminate the plan. However, the 1992 Plan provides that the
Board of Directors must obtain the approval of the stockholders, if required to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or
the Code, to increase the aggregate number of shares that may be issued under
the plan (except for adjustments described under "Changes in Capital" above),
modify materially the requirements for eligibility to participate in the 1992
Plan, or increase materially the benefits accruing to directors under the 1992
Plan. However, any such amendment or termination cannot impair the vested rights
of directors under their outstanding options without their written consent. If
not terminated earlier by the Board of Directors, the 1992 Plan will terminate
ten years following the initial effective date of the 1992 Plan, and no options
can be granted under the 1992 Plan after such termination.
Certain Federal Income Tax Consequences
The following is a brief summary of certain significant United States
federal income tax consequences, under the Code, as in effect on the date of
this summary, applicable to the Company and directors in connection with the
grant and exercise of options under the 1992 Plan. This summary is not intended
to be exhaustive, and, among other things, does not describe state, local or
foreign tax consequences, or the effect of gift, estate or inheritance taxes.
The value of a director's retainer converted into an option under the
1992 Plan is not immediately includible in the director's taxable income or
deductible by the Company. The grant of an option under the 1992 Plan to such a
director will not result in taxable income to the director or an income tax
deduction for the Company. Options granted under the 1992 Plan are not intended
to be "incentive stock options" under Section 422 of the Code. Accordingly, the
exercise of an option under the 1992 Plan generally results in immediate
recognition of taxable ordinary income by the director and a corresponding tax
deduction for the Company in the amount by which the fair market value of the
shares of Common Stock purchased, on the date of such exercise, exceeds the
aggregate option price. Any appreciation or depreciation in the fair market
value of such shares after the date of such exercise will generally result in a
capital gain or loss to the director at the time he or she disposes of such
shares.
As of December 10, 1998, the following directors hold outstanding
options to purchase Common Stock under the 1992 Plan:
Thomas E. Constance 2,040 shares
Richard D. Kimbel 13,460 shares
Curtis L. Mack 20,373 shares
Roland H. Meyer 37,374 shares
John A. Porter 22,695 shares
All directors and nominees for directors as a group 95,942 shares
APPROVAL AND ADOPTION OF AMENDMENTS TO
THE 1995 NON-QUALIFIED STOCK OPTION PLAN
The Company's 1995 Non-Qualified Stock Option Plan (the "1995 Plan")
was adopted by the Board of Directors on April 25, 1995. The 1995 Plan became
effective as of February 14, 1996, the date it was approved by the Company's
stockholders. The 1995 Plan was further amended by the Board of Directors
effective December 11, 1996. On an annual basis, the 1995 Plan automatically
grants to eligible directors of the Company options to purchase Common Stock.
As of December 10, 1998, options to purchase 134,300 shares of Common
Stock were outstanding under the 1995 Plan at exercise prices of $2.625 to
$9.375 per share. All of such outstanding options are currently exercisable
(except options to purchase 5,000 shares of Common Stock) and expire over
periods ending not later than May 5, 2001. From the inception of the 1995 Plan
through December 10, 1998, 30,700 shares of Common Stock have been issued
pursuant to the exercise of options granted under the 1995 Plan.
On December 17, 1998, the Board of Directors unanimously adopted an
amendment to the 1995 Plan which, subject to approval of the stockholders, would
increase the number of shares subject to options automatically granted to each
eligible director annually under the 1995 Plan from 5,000 shares to 17,500
shares. The Board of Directors approved this amendment to increase the number of
shares covered by options granted each year to directors under the 1995 Plan to
ensure that the Company can continue to grant options to eligible directors
under the 1995 Plan at levels determined appropriate by the Company and provide
incentives to retain as directors persons of training, experience and ability,
encouraging their sense of proprietorship and stimulating their active interests
in the Company's development and financial success.
If this proposal is adopted, the 1995 Plan would be amended so that the
first sentence of Section 3(b) would read as follows:
"Upon the later of adoption of the Plan or 30 days after an individual
shall initially become a Director or shall be reelected as a Director
(the "Grant Date"), such individual shall be granted an Option to
purchase 10,000 Shares in the case of initial grants upon adoption of
this Plan, 5,000 Shares in the case of other grants prior to the 1999
annual meeting of the stockholders and 17,500 Shares in the case of any
grants thereafter."
The affirmative vote of the holders of a majority of the shares of
outstanding Common Stock entitled to vote at the Annual Meeting and present in
person or by proxy is required to approve this proposal to amend the 1995 Plan.
The Board of Directors unanimously recommends a vote "FOR" this
Proposal to amend the 1995 Plan to increase the number of shares of Common Stock
that can be purchased under options granted annually to each eligible director
from 5,000 to 17,500 shares.
This proposal summarizes the essential features of the 1995 Plan, as
amended as described by this proposal. This summary is qualified in its entirety
by reference to the full text of the 1995 Plan, as so amended, which will be
made available to any stockholder of the Company requesting a copy in writing.
Terms of Options
Thirty days after individuals are elected or re-elected as directors of
the Company each year, the 1995 Plan automatically grants to each such eligible
director an option to purchase 17,500 shares of Common Stock. An option granted
under the 1995 Plan gives a director the right to purchase shares covered by his
or her option at an exercise price equal to the fair market value of such shares
on the date the option is granted for a period beginning nine months after the
grant date, and ending three years from such grant date. If the director's
service on the Board of Directors terminates due to disability or death, the
director or, following the director's death, his or her estate or a person who
acquires the right to exercise the option by bequest or inheritance, can
exercise his or her options, to the extent exercisable on the date of such
termination for a period of one year following such termination. If a director's
continuous service on the Board of Directors terminates for any other reason,
the director can exercise his or her options within ninety days following such
termination, to the extent the options were exercisable on the date of such
termination. In no event, however, may an option be exercised after its
scheduled expiration. The 1995 Plan does not generally allow directors to
transfer their options (other than by will or the laws of descent and
distribution following the director's death); however, the Board of Directors
does have discretion under the 1995 Plan to permit a director to transfer his or
her options to immediate family members, or a trust or similar vehicle solely
for their benefit, or such other persons or entities permitted by the Board of
Directors in its discretion.
Shares of Common Stock that may be delivered under the 1995 Plan may be
either authorized and unissued shares or treasury shares. Shares of Common Stock
subject to any expired or canceled exercised options cease to be authorized for
delivery under the 1995 Plan.
A director may pay the exercise price of an option granted under the
1995 Plan in cash or by certified check or delivery of shares of Common Stock
already owned by such director with a fair market value equal to the exercise
price paid.
The 1995 Plan generally defines the "fair market value" of a share of
Common Stock to be the highest closing price of a share on a national exchange
or the Nasdaq National Market or, if not so listed, the closing price of a share
in the New York over-the-counter market as reported by the National Association
of Securities Dealers, Inc., in each case, for the applicable date, or the next
preceding date on which there was a reported sale.
Changes in Capital
The 1995 Plan provides the Board of Directors with discretion to make
proportionate adjustments in the maximum number of shares of Common Stock which
may be sold or awarded to any director and the number and price of shares
covered by outstanding options to reflect changes in capitalization affecting
the Common Stock, such as a stock dividend, stock split, recapitalization,
merger, consolidation, split-up, combination, exchange of shares, or other forms
of reorganization or changes affecting the Common Stock. Amendment and
Termination
The Board of Directors has reserved the right under the 1995 Plan to
amend, suspend or terminate the plan. However, the 1995 Plan provides that the
Board of Directors must obtain the approval of the stockholders, if required to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or
the Code, to increase the aggregate number of shares that may be issued under
the plan (except for adjustments described under "Changes in Capital" above),
modify materially the requirements for eligibility to participate in the 1995
Plan, or increase materially the benefits accruing to directors under the 1995
Plan. However, any such amendment or termination cannot impair the vested rights
of directors under their outstanding options without their written consent. If
not terminated earlier by the Board of Directors, the 1995 Plan will terminate
ten years following the initial effective date of the 1995 Plan, and no options
can be granted under the 1995 Plan after such termination.
Certain Federal Income Tax Consequences
The following is a brief summary of certain significant United States
federal income tax consequences, under the Code, as in effect on the date of
this summary, applicable to the Company and directors in connection with the
grant and exercise of options under the 1995 Plan. This summary is not intended
to be exhaustive, and, among other things, does not describe state, local or
foreign tax consequences, or the effect of gift, estate or inheritance taxes.
The grant of an option under the 1995 Plan to a director will not
result in taxable income to the director or an income tax deduction for the
Company. Options granted under the 1995 Plan are not intended to be "incentive
stock options" under Section 422 of the Code. Accordingly, the exercise of an
option under the 1995 Plan generally results in immediate recognition of taxable
ordinary income by the director and a corresponding tax deduction for the
Company in the amount by which the fair market value of the shares of Common
Stock purchased, on the date of such exercise, exceeds the aggregate option
price. Any appreciation or depreciation in the fair market value of such shares
after the date of such exercise will generally result in a capital gain or loss
to the director at the time he or she disposes of such shares.
As of December 10, 1998, the following directors hold outstanding
options to purchase Common Stock under the 1995 Plan:
Peter C. B. Bynoe 20,000 shares
Thomas E. Constance 5,000 shares
Howard R. Curd 20,000 shares
Richard D. Kimbel 20,000 shares
Curtis L. Mack 9,300 shares
Roland H. Meyer 20,000 shares
John A. Porter 20,000 shares
Robert L. Soran 20,000 shares
All directors and nominees for directors as a group 134,300 shares
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated
above which are to be brought before the meeting. However, if any such other
matters should be presented for consideration and voting, it is the intention of
the persons named in the proxy to vote on such matters in accordance with their
judgment.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the 2000 annual
meeting must be forwarded in writing and received at the principal executive
offices of the Company not later than October 26, 1999, directed to the
attention of the Secretary, for consideration for inclusion in the Company's
proxy statement for the Annual Meeting of Stockholders to be held in 2000. Any
such proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
OLIVER J. JANNEY
Secretary
January 15, 1999
- --------
1 The address for all directors and executive officers is c/o the Company,
Two North Tamiami Trail, Suite 900, Sarasota, Florida 34236.
2 Information contained in the table reflects "beneficial ownership" as
defined in Rule 13d-3 under the Securities Exchange Act of 1934.
This table is based on information supplied by directors, officers and
beneficial owners of ten percent or more of the Common Stock and Forms
13D and 13G filed with the Securities and Exchange Commission by
beneficial owners of 5% or more of the Common Stock. Unless otherwise
indicated, the stockholders identified in this table have sole voting and
investment power with respect to the shares beneficially owned by them.
3 Applicable percentages are based on 14,190,018 shares of Common
Stock outstanding, which include shares issued and to be issued pursuant
to the Plan of Reorganization of certain predecessors of the Company,
shares of Common Stock issued as stock dividends on preferred stock,
Common Stock issued in the private placement on May 31, 1994, Common
Stock issued pursuant to exercises of options under the Company's stock
option plans, shares issuable pursuant to currently exercisable
options under the Company's stock option plans, and shares issuable
pursuant to outstanding warrants, but exclude treasury shares.
4 Includes 186,591 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock option
plans, 76,300 shares of Common Stock issuable pursuant to warrants and
18,166 shares of Common Stock in the Company's Savings Plan.
5 Includes 37,695 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1992 Non-Qualified
Stock Option Plan and 1995 Non-Qualified Stock Option Plan.
6 Includes 265,000 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock option
plans and 951 shares of Common Stock in the Company's Savings Plan. Does
not include 65,000 shares held in trust for a family member nor 35,000
held by family members residing in Mr. Soran's household, as to which
Mr. Soran disclaims beneficial ownership.
7 Includes 136,364 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock
option plans and 7,463 shares of Common Stock in the Company's Savings
Plan.
8 Includes 52,374 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1992 Non-Qualified
Stock Option Plan and 1995 Non-Qualified Stock Option Plan.
9 Includes 113,636 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock option
plans and 951 shares of Common Stock in the Company's Savings Plan.
10 Includes 68,181 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock option
plans and 14,623 shares of Common Stock in the Company's Savings Plan.
11 Less than one percent.
12 Includes 29,450 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans, 346
shares of Common Stock in the Company's Savings Plan and 321 shares of
Common Stock in the Company's Employee Stock Ownership Plan.
13 Consists of Common Stock issuable pursuant to currently exercisable
options granted under the Company's 1992 Non-Qualified Stock Option
Plan and 1995 Non-Qualified Stock Option Plan.
14 Includes 15,000 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1995 Non-Qualified Stock
Option Plan.
15 Includes 928,964 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans.
16 The values are based on the closing price of the Common Stock on the
Nasdaq National Market on September 25, 1998, which was $9.1875 per
share.
UNIROYAL TECHNOLOGY CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints HOWARD R. CURD, ROBERT L. SORAN, and
OLIVER J. JANNEY, and each of them with power of substitution, to represent and
to vote on behalf of the undersigned all of the shares of Uniroyal Technology
Corporation (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held at Uniroyal Optoelectronics, LLC, #501
Sabal Park Distribution Center, 3401 Cragmont Drive, Tampa, Florida on Tuesday,
February 23, 1999, at 11:00 a.m. (local time), and at any adjournment or
adjournments of the meeting, hereby revoking all proxies given prior to this
proxy with respect to such stock upon the following proposals more fully
described in the notice of and proxy statement for the meeting (receipt of which
is hereby acknowledged).
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 and 4.
UNIROYAL TECHNOLOGY CORPORATION
P.O. BOX 11155
NEW YORK, NY 10203-0155
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1), (2), (3) and (4).
The undersigned hereby votes at the Annual Meeting of Stockholders of
Uniroyal Technology Corporation on February 23, 1999, AS FOLLOWS:
1. ELECTION OF DIRECTORS
G FOR all nominees listed below G WITHHOLD AUTHORITY to
vote for all nominees listed below
Nominees: Howard R. Curd, Robert L. Soran, Peter C. B. Bynoe, Thomas E.
Constance, Richard D. Kimbel, Curtis L. Mack, Roland H. Meyer, and John A.
Porter.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. PROPOSAL TO APPROVE DELOITTE & TOUCHE LLP AS THE COMPANY'S AUDITORS
FOR THE 1999 FISCAL YEAR.
___ FOR ___ AGAINST ___ ABSTAIN
3. PROPOSAL TO AMEND THE 1992 NON-QUALIFIED STOCK OPTION PLAN FOR DIRECTORS.
___ FOR ___ AGAINST ___ ABSTAIN
4. PROPOSAL TO AMEND THE 1995 NON-QUALIFIED STOCK OPTION PLAN FOR DIRECTORS.
___ FOR ___ AGAINST ___ ABSTAIN
3. In their discretion upon such other matters as may properly come before
the meeting.
___ I plan to attend the Change of Address or
annual meeting Comments Mark Here
Please sign exactly as your name appears to the left and below. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give
full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
Dated: , 1999
Signature
Signature, if held jointly
Please return in the enclosed postage-paid envelope.
Votes must be indicated (x) in Black or Blue ink.
