[GRAPHIC OMITTED]
April 22, 1998
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of Technical
Chemicals & Products, Inc. (the "Company"), which will be held at the Doubletree
Guest Suites Hotel, 555 N.W. 62nd Street, Fort Lauderdale, Florida 33309, on
Friday, May 22, 1998, at 10:00 a.m., local time.
The notice of meeting and proxy statement on the following pages covers the
formal business of the meeting. Whether or not you expect to attend the meeting,
please sign, date, and promptly return your proxy in the enclosed envelope to
assure your shares will be represented at the meeting. If you decide to attend
the annual meeting and vote in person, you will, of course, have that
opportunity.
The continuing interest of the shareholders in the business of the Company
is gratefully acknowledged. We hope many will attend the meeting.
Sincerely,
/S/
Jack L. Aronowitz
President, Chief Executive Officer
and Chairman of the Board of Directors
- -------------------------------------------------------------------------------
TECHNICAL CHEMICALS & PRODUCTS, INC.- P.O. Box 8726 - Fort Lauderdale, Florida
33310 - (954)979-0400 - (954)979-0009 3341 S.W. 15th St. (W. McNab Rd.)
- - Pompano Beach, Florida 33069
- -------------------------------------------------------------------------------
<PAGE>
TECHNICAL CHEMICALS & PRODUCTS, INC.
3341 S.W. 15th Street
Pompano Beach, Florida 33069
--------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 22, 1998
The Annual Meeting of Shareholders of Technical Chemicals & Products, Inc.
will be held at the Doubletree Guest Suites Hotel, 555 N.W. 62nd Street, Fort
Lauderdale, Florida 33309, on Friday, May 22, 1998, at 10:00 a.m., local time,
for the following purposes:
- To elect two Class III directors for a three-year term expiring in 2001;
and
- To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 17, 1998
as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting.
Shareholders are requested to vote, date, sign and promptly return the
enclosed proxy in the envelope provided for that purpose, WHETHER OR NOT THEY
INTEND TO BE PRESENT AT THE MEETING.
By Order of the Board of Directors,
/S/
Martin Gurkin, Ph.D.
Secretary
Pompano Beach, Florida
April 22, 1998
<PAGE>
TECHNICAL CHEMICALS & PRODUCTS, INC.
--------------------------------------
PROXY STATEMENT
ANNUAL MEETING AND PROXY SOLICITATION INFORMATION
This proxy statement is first being sent to shareholders on or about April
23, 1998, in connection with the solicitation of proxies by the Board of
Directors of Technical Chemicals & Products, Inc. (the "Company"), to be voted
at the Annual Meeting of Shareholders to be held on Friday, May 22, 1998, and at
any adjournment thereof (the "Meeting"). The close of business on April 17,
1998, has been fixed as the record date of the determination of shareholders
entitled to notice of and to vote at the Meeting. At the close of business on
the record date, the Company had outstanding 10,015,036 shares of $.001 par
value common stock ("Common Stock"), entitled to one vote per share.
Shares represented by duly executed proxies in the accompanying form
received by the Company prior to the Meeting will be voted at the Meeting. If
shareholders specify in the proxy a choice with respect to any matter to be
acted upon, the shares represented by such proxies will be voted as specified.
If a proxy card is signed and returned without specifying a vote or an
abstention on any proposal, it will be voted according to the recommendation of
the Board of Directors on that proposal. The Board of Directors recommends a
vote FOR the election of the directors listed on the proxies. The Board of
Directors knows of no other matters that may be brought before the Meeting.
However, if any other matters are properly presented for action, it is the
intention of the named proxies to vote on them according to their best judgment.
Shareholders who hold their shares through an intermediary must provide
instructions on voting as requested by their bank or broker. A shareholder who
signs and returns a proxy may revoke it at any time before it is voted by taking
one of the following three actions: (i) giving written notice of the revocation
to the Secretary of the Company; (ii) executing and delivering a proxy with a
later date; or (iii) voting in person at the Meeting.
Approval of the election of directors will require a plurality of the votes
cast at the Meeting, provided a quorum is present. Votes cast by proxy or in
person at the Meeting will be tabulated by one or more inspectors of election
appointed at the Meeting, who will also determine whether a quorum is present
for the transaction of business. Abstentions and broker non-votes will be
counted as shares present in the determination of whether shares of the
Company's common stock represented at the Meeting constitute a quorum. With
respect to matters to be acted upon at the Meeting, abstentions and broker
non-votes will not be counted for the purpose of determining whether a proposal
has been approved.
The expense of preparing, printing and mailing proxy materials to
shareholders of the Company will be borne by the Company. In addition to
solicitations by mail, regular employees of the Company may solicit proxies on
behalf of the Board of Directors in person or by telephone. The Company will
reimburse brokerage houses and other nominees for their expenses in forwarding
proxy material to beneficial owners of the Common Stock.
The executive offices of the Company are located at 3341 S.W. 15th Street,
Pompano Beach, Florida 33069. The Company's telephone number is (954) 979-0400.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes of
directors. The Company's Articles of Incorporation provide that at each annual
election, directors shall be chosen by class for a term of three years, to
preserve, as evenly as practicable, the division of directors into classes. The
current terms of the three classes of directors expire in 1999 (Class I
directors), 2000 (Class II directors) and 1998 (Class III directors). Two
director nominees are to be elected at the Meeting as a Class III director for a
term ending in 2001, or until their respective successors shall have been
elected and qualified.
The Board of Directors has nominated Kathryn R. Harrigan and Martin Gurkin
to each stand for election at the Meeting for the Class III director seats. See
"Management-Directors and Executive Officers" for information regarding Ms.
Harrigan and Mr. Gurkin. The nominees' current terms will expire on the date of
the Meeting. Unless otherwise indicated, votes will be cast pursuant to the
accompanying proxy FOR the election of Ms. Harrigan and Mr. Gurkin. Should Ms.
Harrigan or Mr. Gurkin become unable or unwilling to accept nomination or
election for any reason, it is intended that votes will be cast for a substitute
nominee designated by the Board of Directors, which has no reason to believe Ms.
Harrigan or Mr. Gurkin will be unable or unwilling to serve if elected.
<PAGE>
SECURITY AND OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 6, 1998 with
respect to the Common Stock owned by (1) any person who is known to the Company
to be the beneficial owner of more than five percent of any class of the
Company's voting securities, (2) each director and director nominee of the
Company, (3) each executive officer named in the Summary Compensation Table and
(4) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Name and Address of Beneficial Owner(a) Ownership(b) Percent
<S> <C> <C> <C>
Jack L. Aronowitz ..................... 4,561,666(c) 43.4%
Capital Group Companies, Inc.
Capital Research and Management Company
333 South Hope Street, 52nd Floor
Los Angeles, California 90071....... 600,000 6.0%
Martin Gurkin........................... 34,534(d) *
Colin A. Morris......................... 11,700(d) *
Stuart R. Streger....................... 17,667(e) *
Kathryn R. Harrigan..................... 1,000(e) *
Clayton Rautbord........................ 1,200(d) *
Noel Buterbaugh......................... 0 *
All directors and executive
Officers as a group (7 persons)......... 4,631,767 43.8%
<FN>
_______________________
(a) The business address for Messrs. Aronowitz, Gurkin, Morris, Streger,
Rautbord, Buterbaugh, and Ms. Harrigan is 3341 S.W. 15th Street,
Pompano Beach, FL 33069.
(b) Beneficial ownership of shares, as determined in accordance with
applicable Securities and Exchange Commission rules, includes shares
as to which a person has or shares voting power and/or investment power.
(c) Includes 500,000 shares that may be acquired upon exercise of a
currently exercisable warrant and 370,000 shares as to which
Mr. Aronowitz holds a voting proxy.
(d) Includes options that are currently exerciseable in the following amounts:
Mr. Gurkin - 34,334; Mr. Morris - 10,000; and Mr. Rautbord - 1,000.
(e) Represents shares that may be acquired upon exercise of currently
outstanding stock options.
* Less than 0.5%
</FN>
</TABLE>
<PAGE>
MANAGEMENT
Directors and Executive Officers
Set forth below is certain information as of April 22, 1998, concerning the
Company's executive officers, current directors, and nominees for director.
<TABLE>
<CAPTION>
Year First
Became a
Name Position(s) Age Director
<S> <C> <C> <C>
Jack L. Aronowitz President, Chief Executive Officer, and
Chairman of the Board of Directors (Class I
- term expiring in 1999) 58 1992
Noel Buterbaugh Director (Class I - term expiring in 1999) 65 1998
Martin Gurkin, Ph.D Senior Vice President, Chief Operating 65 1996
Officer and Director(Class III - nominee
for a term expiring in 2001)
Kathryn R. Harrigan, M.B.A., Director (Class III - nominee for a term 46 1996
D.B.A expiring in 2001)
Clayton Rautbord Director (Class II - term expiring in 2000) 70 1996
Stuart R. Streger, C.P.A Vice President and Chief Financial Officer 47
Colin A. Morris Vice President, Transdermal Manufacturing 57
and Chief Operating Officer of the
Pharmetrix Division
Robert G. Bachkosky Vice President of Marketing 44
Gregory G. Candelmo Vice President of Sales 36
</TABLE>
JACK L. ARONOWITZ, the founder of the Company, has been President and
Chairman of the Board of Directors since January 1992 and Chief Executive
Officer since January 1996. Prior to founding the Company, Mr. Aronowitz served
as Executive Vice President, Technical Director and Director of Operations of
TechniMed Corporation from May 1985 to October 1991 and as President from
January 1983 to April 1985. TechniMed was engaged in the medical diagnostic and
biochemical businesses. Mr. Aronowitz has been involved in the development and
commercialization of medical diagnostic products for over 35 years. Mr.
Aronowitz is the President of the Florida Institute of Chemists.
NOEL BUTERBAUGH has been a Director of the Company since April 1998. He
replaced Dr. Stephen Dresnick who resigned from the TCPI Board as a result of
increased corporate responsibilities related to his recent promotion to
President and Chief Executive Officer of FPA Medical Management, Inc. (Nasdaq:
FPAM). Mr. Buterbaugh is President and Chief Executive Officer of BioWhittaker,
Inc., which was acquired by Cambrex Corporation (NYSE: CBM) in 1997. He has been
with BioWhittaker since the early 1950's and became its President in 1979.
BioWhittaker is a major supplier of cell cultures and related scientific
products to the biotechnology industry and the leading supplier worldwide of
these biological products to the medical and clinical diagnostics industry. He
is also a Director of First Frederick Financial Corp., the holding company for
First Bank of Frederick (Nasdaq BB: FFMD).
MARTIN GURKIN, Ph.D. has been Senior Vice President, Chief Operating
Officer and a Director of the Company since January 1996. Prior to joining the
Company, Dr. Gurkin served as Vice President of ISCO, Inc., a company engaged in
the manufacture of scientific analytical instrumentation, from October 1989 to
December 1995. Prior to joining ISCO, Inc., Dr. Gurkin was employed in various
capacities for over 17 years by E. M. Science (an affiliate of E. Merck KGAA), a
company engaged in the manufacturing of laboratory reagents and chromatography
supplies.
KATHRYN R. HARRIGAN, M.B.A., D.B.A., has been a Director of the Company
since 1996. Ms. Harrigan has been a professor at Columbia Business School since
1981 and was named the Henry L. Kravis Professor of Business Leadership at
Columbia Business School in 1993. Since 1994, Professor Harrigan has served on
the Board of Directors of Cambrex Corporation (NYSE: CBM), a company engaged in
the international specialty chemicals business. She is also a Director of Johns
Manville Corp. (NYSE: JM), an international building and filtration products
company, as well as a Director or advisor of various other privately held
companies.
CLAYTON L. RAUTBORD has been a Director of the Company since August 1996.
Mr. Rautbord is presently the Secretary and Treasurer of Wenk Aviation Insurance
Corporation. From 1980-1989, he was the founder and President of Photo
Con-X-Ion, Inc., a manufacturer of photographic chemicals, and was the President
and CEO of APECO, a company listed on the NYSE, from 1963-1974. Mr. Rautbord has
previously served on the boards of Ozark Airlines, Metropolitan Bank of Chicago,
Amalgamated Bank of Chicago, and Euclid Equipment Company of Long Island, New
York. In addition to TCPI's Board of Directors, Mr. Rautbord also serves on the
Board of Directors of Albany Bank and Trust Company in Chicago.
STUART R. STREGER, C.P.A. has been Vice President and Chief Financial
Officer of the Company since April 1996. Prior to joining TCPI, Mr. Streger
served as Chief Financial Officer of Carfel, Inc., an auto parts manufacturer
and after-market distribution company from September 1994 to March 1996. From
August 1993 to September 1994, he was Chief Financial Officer of Chick Master
International, a global manufacturer and distributor of poultry equipment. From
August 1980 to August 1993, Mr. Streger was Chief Financial Officer of Rosco
Laboratories, Inc., a worldwide distributor and manufacturer of television and
film production products. From 1973 to 1977, Mr. Streger was employed as a
senior auditor and served in many other capacities with the accounting firm of
KPMG Peat Marwick LLP.
COLIN A. MORRIS has been Vice President of Transdermal Manufacturing since
February 1997. He has operating responsibilities for TCPI's portfolio of
transdermal drug delivery products and related contract services, and directs
all activities at the Company's R&D facility in Menlo Park, California, operated
by its Pharmetrix Division. In addition, Mr. Morris is involved in the ongoing
development of the Company's TD Glucose Monitoring System. Prior thereto, he
helped transition Noven Pharmaceuticals (Nasdaq: NOVN), which operates one of
the most advanced transdermal R&D and manufacturing facilities in the world,
from the development stage to global commercialization as Vice President of
Operations and later as Vice President of Corporate Planning. Mr. Morris also
has held senior-level positions with Rhone-Poulenc Rorer, Inc. as Senior
Director of World Wide Engineering, Director of Process Engineering with
Sterling Drug, Inc., and international and domestic positions with Johnson &
Johnson.
ROBERT G. BACHKOSKY joined the Company as Vice President of Marketing and
Business Development in August 1997. Mr. Bachkosky directs the global marketing
programs for TCPI's expanding portfolio of diagnostic products used by consumers
and healthcare professionals. He has more than 20 years of experience in sales
and marketing of medical diagnostic, scientific and general healthcare products.
During the past 12 years, Mr. Bachkosky held various senior level positions with
Boehringer-Mannheim Corporation in Indianapolis, Indiana, and most recently was
responsible for market development of "Point of Care" products to Latin America
and Canada. His additional healthcare experience includes Cordis Laboratories,
Curtin Matheson Scientific, and employment as a Medical Technologist for Greater
Southeast Community Hospital in Washington, D.C.
GREGORY J. CANDELMO is the Company's Vice President of Sales. Prior to
joining TCPI in 1998, he was North American Director of Sales and Marketing for
GDS Diagnostics. Previously, he was with Boehringer-Mannheim Corporation from
1991 to 1997 where he served in various sales management positions that included
Diagnostic Systems Director of Sales, Lab Diagnostics Regional Business Manager,
AccuData System Product and Marketing Manager, and Diabetes Care Division
Regional Sales Manager. Mr. Candelmo also held sales management and field sales
positions with Behring Diagnostics, CooperBiomedical/Techicon Instruments and
Proctor and Gamble.
There is no family relationship between any executive officer or director
of the Company.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
During 1997, the Company's Board of Directors held four meetings. Each
incumbent director attended each meeting.
During 1997, the Company had a Compensation Committee (which also served as
the administrator for the Company's 1992 Incentive Stock Option Plan) and an
Audit Committee, and established a Board Organization Committee. The
Compensation Committee consisted of non-employee directors Mr. Rautbord, Ms.
Harrigan and Dr. Dresnick. The Compensation Committee recommends to the Board of
Directors base salary levels, bonuses and stock option grants for the Chief
Executive Officer and reviews compensation levels of other officers of the
Company. The Compensation Committee also reviews and makes recommendations with
respect to the Company's existing and proposed compensation plans.
The members of the Audit Committee are Mr. Rautbord and Ms. Harrigan. The
duties of the Audit Committee are to recommend to the Board of Directors the
selection of independent certified public accountants, to meet with the
Company's independent certified accountants to review the scope and results of
the audit and to consider various accounting and auditing matters related to the
Company, including its system of internal controls and financial management
practices.
In 1997, The Company's Board Organization and Governance Committee
consisted of Ms. Harrigan, Dr. Dresnick and Mr. Rautbord. This Committee is
responsible for corporate governance and also serves as the Nominating
Committee.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company is paid an annual fee of $5,000.
Each non-employee director acting as a Committee Chair receives an additional
$500 per year. In addition, each non-employee director receives $500 for each
Committee and Board meeting attended, provided that the Committee meeting is
other than on a day when a Board Meeting is held. Non-employee directors are
also reimbursed for their travel expenses to meetings of the Board of Directors.
No director who is an employee of the Company receives separate compensation for
services rendered as a director.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company, during
the fiscal years ended December 31, 1997, 1996 and 1995 to the officers whose
names appear in the table below. No restricted stock awards, long-term incentive
plan payouts or other types of compensation other than the compensation
identified in the chart below were paid to these officers. No other executive
officer of the Company earned a total annual salary and bonus during 1997, 1996
and 1995 in excess of $100,000.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Compensation
-------------------------------------------------------------------------
Securities
Name and Other Annual Underlying
Principal Position Year(a) Salary($) Bonus($) Compensation($) Options(#)
<S> <C> <C> <C> <C> <C> <C>
Jack L. Aronowitz 1997 $151,938 -- $24,644(b) --
President, Chief 1996 144,703 -- 13,937(b)
Executive Officer and 1995 137,813 -- 17,209(b)(c)
Chairman of the Board
Martin Gurkin 1997 131,156 $25,000 3,236(b) 11,000
Senior Vice President and 1996 88,042 -- 2,157(b)
Chief Operating Officer
and Director
Colin Morris 1997 117,208 10,000 1,418(b) 30,000
Vice President 1996 -- -- --
Stuart R. Streger 1997 127,625 35,000 2,126(b) 11,000
Vice President and 1996 81,654 -- 886(b)
Chief Financial Officer
<FN>
(a) No amounts are shown for Messrs. Gurkin and Streger for 1995, and Mr.
Morris for 1996 and 1995 because they were not employed by the Company
at that time.
(b) Includes the cost of an automobile and/or health insurance.
(c) Does not include $256,920 paid as a dividend by the Company to Mr.
Aronowitz soon after the Company's initial public offering. The
dividend represented Mr. Aronowitz's pro rata share of the Company's
retained earnings that were distributed to all of the Company's
shareholders prior to the revocation of the Company's S election and
was not intended as a form of compensation.
</FN>
</TABLE>
<PAGE>
Option Grants and Exercises; Long-Term Incentive Plans in 1997
The following table shows the grants of stock options by the Company during
the fiscal year ended December 31, 1997 to the executive officers named in
the Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants
----------------- Potential Realizable Value at
Number of Percent of Assumed Annual Rate of Stock
securities Total Price Appreciation For Option
underlying Options/Grants Term(a)
Options to Employees Exercise Expiration -----------------------------
Name Granted in Fiscal Year Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Martin Gurkin 10,000 6.43% $8.875 9/04/02 $24,250 $54,183
Martin Gurkin 1,000 0.64% $8.875 9/04/02 $2,452 $5,418
Colin Morris 6,667 4.29% $8.625 2/01/03 $19,556 $44,367
Colin Morris 6,667 4.29% $8.625 2/01/04 $23,409 $54,554
Colin Morris 6,667 4.29% $8.625 2/01/05 $27,451 $65,750
Colin Morris 10,000 6.43% $8.875 9/04/02 $24,250 $54,183
Stuart Streger 10,000 6.43% $8.875 9/04/02 $24,250 $54,183
Stuart Streger 1,000 0.64% $8.875 9/04/02 $2,452 $5,418
<FN>
(a) The potential realizable values set forth under these columns result
from calculations assuming 5% and 10% annualized stock price growth
rates from grant dates to expiration dates and are not intended to
forecast future price appreciation of the Company's Common Stock based
upon growth at these prescribed rates. The Company is not aware of any
formula which will determine with reasonable accuracy a present value
based on future unknown factors. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Company.
There can be no assurance that the amounts reflected in this table
will be achieved.
</FN>
</TABLE>
OPTION EXERCISES AND PERIOD-END VALUES
None.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, there were no interlocking relationships of the Compensation
Committee. Each member serving on the Compensation Committee was an outside
Director.
The Company and Mr. Aronowitz are parties to an exclusive, worldwide
license agreement dated January 31, 1996 ("License Agreement") under which the
Company has the right to manufacture, promote, market and sell all medical,
pharmaceutical and health care products and devices created by Mr. Aronowitz on
or before the date of the License Agreement. The License Agreement is for a term
of twenty years with automatic renewals and requires annual fees equal to the
greater of (i) 3% of net collected sales revenues from products based upon
certain technology or (ii) $10,000, with an aggregate maximum limitation of
$10,000,000. The License Agreement replaces an earlier license agreement with
similar provisions. During 1997 and 1996, Mr. Aronowitz earned approximately
$148,000 and $114,000, respectively, pursuant to the License Agreement. He
waived all licensing fees due him for the years ended December 31, 1995 and
1994.
Mr. Aronowitz is also party to an employment contract with the Company.
See "-Employment Contracts."
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with Jack L. Aronowitz, as
of January 1, 1993, as amended on September 27, 1996, pursuant to which Mr.
Aronowitz serves as President of the Company. The agreement provides that Mr.
Aronowitz receive: (i) a base salary of $144,800, increased annually by 5%; and
(ii) an annual bonus of 5% of the Company's consolidated pre-tax income. The
agreement also provides that Mr. Aronowitz is entitled to health insurance, a
car allowance of $10,000 per year, other fringe benefits, and, at the Board's
discretion, further bonuses and reimbursement for various expenses. In addition,
the agreement prohibits Mr. Aronowitz (x) during and after the term of the
agreement, from disclosing confidential information relating to the Company and
(y) during the term of the agreement and for a period of two years after
termination thereof, from competing with the Company anywhere in the United
States where the Company is engaged in business or has evidenced an intention to
engage in business. Notwithstanding the foregoing, if Mr. Aronowitz's employment
is terminated by the Company for any reason other than Mr. Aronowitz having
engaged in any material act of dishonesty, disloyalty, negligence and/or fraud
which is, or may be, damaging to the Company's business, the Company must pay
Mr. Aronowitz two times his then base salary plus an amount equal to two times
the last bonus paid to or accrued for him pursuant to the agreement (three times
base salary plus bonus in the event of termination following a "change of
control," as defined in the agreement).
The Company entered into an employment agreement with Martin Gurkin, dated
as of February 26, 1996, pursuant to which Dr. Gurkin serves as a Senior Vice
President of the Company. Under the Agreement Dr. Gurkin's current base salary
is $125,000, which may be increased at the Board of Directors' discretion. The
agreement also provides that Dr. Gurkin receive a bonus based on a percent of
forecasted net sales agreed upon as the Company's annual target. Dr. Gurkin also
receives health insurance, other fringe benefits, and, at the Board of
Directors' discretion, reimbursement for various expenses. In addition, the
agreement prohibits Dr. Gurkin: (i) during and after the term of the agreement,
from disclosing confidential information relating to the Company; and (ii)
during the term of the agreement and for a period of two years after the
termination thereof, from competing with the Company anywhere in the United
States where the Company is engaged in business or has taken steps to engage in
business. Notwithstanding the foregoing, if Dr. Gurkin's employment is
terminated by the Company other than for cause (as that phrase is defined in the
agreement) or due to the death or disability of Dr. Gurkin, the Company must pay
Dr. Gurkin an amount equal to two times his then base salary as liquidated
damages.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee is pleased to present its report on executive
compensation. This report describes the components of the Company's executive
officer compensation programs and the basis on which compensation determinations
for 1997 were made with respect to the executive officers of the Company. The
1997 fiscal year was the first full year of employment with the Company for each
of the Company's executives other than the Chief Executive Officer.
The Compensation Committee believes that the objectives of executive
compensation are to attract, motivate and retain the highest quality executives,
to align the interests of these executives with those of the Company
shareholders and to motivate the Company executives to increase shareholder
value by improving corporate performance and profitability. To meet these
objectives, the Compensation Committee will seek to provide a competitive total
compensation package that enables the Company to attract and retain key
personnel; to provide variable compensation opportunities, primarily on an
annual basis, that are linked to corporate performance goals; and to provide
long-term compensation opportunities, through stock options, that align
executive compensation with value received by stockholders. The compensation
program for executive officers is comprised of the following components: base
salary, annual incentive compensation and stock options. Base salaries for
executives are determined initially by evaluating the responsibilities of the
position, the experience of the individual, internal comparability
considerations, as appropriate, the competition in the marketplace for
management talent, and the compensation practices among public companies of the
size of, or in businesses similar to, the Company.
For 1997, compensation, including salary, bonuses and stock option grants,
for the executives other than the Chief Executive Officer was set based
principally upon the factors described in the previous sentence. Compensation
for the Chief Executive Officer was set based upon the Chief Executive's
employment agreement (see "Employment Contracts").
The Compensation Committee intends to periodically review the Company's
compensation programs to ensure that pay levels and incentive opportunities are
competitive and reflect the performance of the Company. Salary adjustments
ordinarily will be determined and made at 12-month intervals.
Respectfully submitted,
KATHRYN R. HARRIGAN
CLAYTON RAUTBORD
STOCK PERFORMANCE GRAPH
The following graph shows the Company's cumulative total return to
shareholders compared to the Russell 2,000 Index and a peer group consisting of
healthcare stocks (excluding biotechnology companies) identified below as
"Hambrecht & Quist Healthcare." The graph shows cumulative total return over the
period from February 2, 1995, the first day that the Company was traded
publicly, and the end of the fiscal year 1997, based on an initial investment of
$100. Total shareholder return assumes dividend reinvestment. The stock
performance shown on the following graph is not indicative of future price
performance.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- ---------------------------- --------------------- --------------------- --------------------- ---------------------
Name February 2, 1995 December 31, 1995 December 31, 1996 December 31, 1997
- ---------------------------- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
TCPI $100 $500 $228 $284
- ---------------------------- --------------------- --------------------- --------------------- ---------------------
Russell 2000 $100 $130 $152 $186
- ---------------------------- --------------------- --------------------- --------------------- ---------------------
Hambrecht & Quist $100 $157 $174 $207
Healthcare (excluding
biotechnology)
- ---------------------------- --------------------- --------------------- --------------------- ---------------------
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the common stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
ten percent shareholders are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it,
the Company believes that during 1997, Forms 3, 4 and 5 filings appear to have
been made when due.
INFORMATION CONCERNING INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Company's Board of Directors has appointed Ernst & Young LLP as
independent certified public accountants to audit the consolidated financial
statements of the Company for the year ending December 31, 1998. Representatives
of Ernst & Young LLP are expected to be present at the Meeting with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions posed by shareholders.
PROPOSALS OF SHAREHOLDERS FOR THE NEXT ANNUAL MEETING
Proposals of shareholders intended for presentation at the 1999 annual
meeting must be received by the Company on or before December 19, 1998, in order
to be included in the Company's proxy statement and form of proxy for that
meeting.
The Company's bylaws also require advance notice to the Company of any
shareholder proposal and of any nominations by shareholders of persons to stand
for election as directors at a shareholders' meeting. Notice of shareholder
proposals and of director nominations must be timely given in writing to the
Secretary of the Company prior to the meeting at which the directors are to be
elected. To be timely, notice must be received at the principal executive office
of the Company not less than 60 days, nor more than 90 days, prior to the
meeting of shareholders; provided, however, that in the event that less than 70
days' notice prior to public disclosure of the date of the meeting is given or
made to the shareholders, notice by the shareholder, in order to be timely, must
be so delivered or received not later than the close of business on the tenth
day following the day on which such notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made,
whichever first occurs.
In addition to the matters required to be set forth by the rules of the
Securities and Exchange Commission, a shareholder's notice with respect to a
proposal to be brought before the annual meeting must set forth (a) the text of
the proposal to be presented and a brief written statement of the reasons why
such shareholder favors the proposal, (b) the name and address of such
shareholder, (c) the class and number of shares of the Company that are
beneficially owned by such shareholder on the date of such shareholder notice
and (d) any material interest of the shareholder in such proposal.
A shareholder's notice with respect to a director nomination must set forth
(a) the name of the person to be nominated, (b) the number and class of all
shares of each class of stock of the Company beneficially owned by such person,
(c) the information regarding such person required by paragraphs (a) and (d) of
Item 401 of Regulation S-K adopted by the Securities and Exchange Commission,
(d) such person's signed consent to serve as a director of the Company if
elected, (e) such shareholder's name and address and (f) the number and class of
all shares of each class of stock of the Corporation beneficially owned by such
shareholder.
The complete Bylaws provisions governing these requirements are available
to any shareholder without charge upon request from the Secretary of the
Company.
OTHER MATTERS
The Company will provide to any shareholder, upon the written request of
any such person, a copy of the Company's Annual Report on Form 10-K, including
the financial statements and the schedule thereto, for its fiscal year ended
December 31, 1997, as filed with the Securities and Exchange Commission. All
such requests should be directed to Technical Chemicals and Products, Inc.,
Corporate Communications, P.O. Box 8726, Ft. Lauderdale, Florida 33310. No
charge will be made for copies of such annual report; however, a reasonable
charge for exhibits, if requested, will be made.
By Order of the Board of Directors,
/S/
MARTIN GURKIN, Ph.D.
Secretary
Pompano Beach, Florida
April 22, 1998
