<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SHEFSKY & FROELICH LTD.,
Suite 2500, 444 N. Michigan Ave., Chicago, IL 60611 Attn: Dennis B. O'Boyle
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
Universal Automotive Industries, Inc.
11859 South Central Avenue
Alsip, Illinois 60803
(708) 293-4050
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
To The Stockholders of Universal Automotive Industries, Inc.:
The Annual Meeting of Stockholders of Universal Automotive Industries,
Inc. (the "Company") will be held on Monday, June 1, 2000, at 10:00 a.m., at the
Radisson Hotel Lincolnwood, 4500 West Touhy Avenue, Lincolnwood, Illinois, for
the following purposes:
1. To elect six Directors to serve until the next annual meeting of
stockholders or until their successors are elected or qualified;
2. To ratify the appointment of Altschuler, Melvoin and Glasser LLP as the
Company's independent auditors for 2000; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only Stockholders of record as of the close of business on April 17,
2000, will be entitled to notice of and to vote at the meeting or at any
adjournment thereof. A copy of Universal Automotive Industries, Inc. Annual
Report to Stockholders for the year ended December 31, 1999 is enclosed.
By Order of The Board of Directors:
Jerome J. Hiss
Secretary
Chicago, Illinois
May 10, 2000
YOUR VOTE IS IMPORTANT
REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OF
STOCKHOLDERS, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED FOR
MAILING IN THE UNITED STATES. YOUR PROMPT RESPONSE WILL ASSURE THAT A QUORUM IS
PRESENT AT THE MEETING AND SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION
OF PROXIES.
<PAGE> 3
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
11859 South Central Avenue
Alsip, Illinois 60803
-----------------------------
PROXY STATEMENT
------------------------------
PROXY SOLICITATION AND GENERAL INFORMATION
This proxy statement (the "Proxy Statement") is furnished to the
holders (the "Stockholders") of shares of common stock of Universal Automotive
Industries, Inc., a Delaware corporation, in connection with the solicitation of
proxies by our Board of Directors (the "Board of Directors") for use at the
annual meeting of Stockholders (the "Meeting") to be held on Monday, June 1,
2000, at 10:00 a.m., at the Radisson Hotel Lincolnwood, 4500 West Touhy Avenue,
Lincolnwood, Illinois, and any adjournment thereof. Our bylaws (the "Bylaws")
require the Directors to call and hold an annual meeting of stockholders each
year. We mailed this Proxy Statement and the enclosed proxy to our Stockholders
on or about May 10, 2000. Stockholders who wish to attend the meeting should
contact us at (708) 293-4050.
Only Stockholders of record at the close of business on April 17, 2000
(the "Record Date") will be entitled to notice of and to vote at the Meeting. On
the Record Date, 6,914,310 shares of our common stock, par value $.01 per share
(the "Common Stock"), having one vote each, were issued and outstanding. A
majority of the outstanding shares of Common Stock, represented at the Meeting
in person or by proxy, will constitute a quorum.
We will bear all costs associated with the solicitation of proxies,
including the cost of preparing, printing and mailing this Proxy Statement and
the reimbursement of brokerage firms and other record holders of shares of
Common Stock for their expenses in forwarding proxy materials to beneficial
owners of such shares. Following the original solicitation of proxies by mail,
proxies may be solicited by our officers and employees by telephone, facsimile,
telegraph or in person. Such officers and employees will not be additionally
compensated for soliciting proxies.
Shares represented by properly executed proxies in the accompanying
form received by the Board of Directors prior to the Meeting will be voted at
the Meeting. Shares not represented by properly executed proxies will not be
voted. If a Stockholder specifies a choice with respect to any matter to be
acted upon, the Shares represented by that proxy will be voted as specified. If
the Stockholder does not specify a choice, in an otherwise properly executed
proxy, with respect to any proposal referred to therein, the Shares represented
by that proxy will be voted with respect to that proposal in accordance with the
recommendations of the Board of Directors described herein. A Stockholder who
signs and returns a proxy in the accompanying form may revoke it by: (i) giving
written notice of revocation to us before the proxy is voted at the Meeting;
(ii) executing and delivering a later-dated proxy; or (iii) attending the
Meeting and voting the shares in person.
The affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the Meeting is required for the
election of Directors and the ratification of the independent auditors. With
regard to the election of Directors, votes may be cast in favor or withheld;
votes that are withheld will be excluded entirely from the vote and will have no
effect. Broker non-votes (shares not voted by brokers due to the absence of
instructions from street name holders) on a matter are not considered voted or
as present or represented on that matter and will have no effect on the outcome
of the election of Directors. Unless the context otherwise requires, the terms
"we," "us" or "our" includes Universal Automotive Industries, Inc. and its
direct and indirect subsidiaries, including its predecessor, Universal
Automotive, Inc.
<PAGE> 4
ELECTION OF DIRECTORS
The Board of Directors has nominated the six persons named below for
election as Directors at the Meeting to serve until the 2000 Meeting of
Stockholders and until their elected successors are qualified. The Bylaws
provide that the Board of Directors shall consist of seven directors. At the
present time, our Board consists of six persons. The Board of Directors may
increase or decrease this number from time to time. All of the nominees below
are presently serving as members of the Board of Directors. Each nominee has
consented to have his name appear as a nominee in this Proxy Statement and to
serve as a Director if elected. Should any nominee become unable to serve as a
Director, shares of Common Stock represented at the Meeting by valid proxies may
be voted for the election of such substitute nominee(s) as may be designated by
the Board of Directors. The Board of Directors has no reason to believe that any
nominee will be unable to serve as a Director.
The following information is provided concerning the nominees for
election as Directors:
<TABLE>
<CAPTION>
====================================================================================================================
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Arvin Scott 43 1986 Mr. Scott has served as our President and Chief Executive
Officer since March 1996. Mr. Scott served as our Executive
Vice President from October 1994 to March 1996 and served as
our Vice President from 1986 to October 1994. Mr. Scott
joined us in 1981 as a purchaser of automotive aftermarket
replacement parts for distribution in the Chicago jobber
market. From 1984 to 1986, Mr. Scott served as Vice President
of an unaffiliated Chicago-based warehouse distributor, of
which he was a 50% owner. Mr. Scott oversees the distribution
of the UBP Universal Brake Parts line and our manufacturing
operations.
- --------------------------------------------------------------------------------------------------------------------
Yehuda Tzur 47 1981 Mr. Tzur, our founder, has served as our Chairman of the
Board of Directors since October 1994. From 1981 to March
1996, Mr. Tzur served as our President and Chief Executive
Officer. Mr. Tzur oversees our administrative functions and
our wholesale commodities operations.
- --------------------------------------------------------------------------------------------------------------------
Sami Israel 58 1984 Mr. Israel has served as our Vice President since October
1994 and served as our Treasurer from 1984 to October 1994.
Mr. Israel has been a Director since 1984. Mr. Israel manages
our shipping and receiving operations from our headquarters
located in Alsip, Illinois.
- --------------------------------------------------------------------------------------------------------------------
Sol S. Weiner 81 1995 Mr. Weiner is a private investor and currently is a Director
of Comtech Telecommunications, Inc.
- --------------------------------------------------------------------------------------------------------------------
Sheldon Robinson 73 1995 Mr. Robinson is an owner and President of Associated
Financial Consultants, Inc. and Robinson Financial Group,
Inc., which companies sell insurance and investment products.
Mr. Robinson has been in the insurance business since 1963.
- --------------------------------------------------------------------------------------------------------------------
Dennis L. Kessler 61 1997 Mr. Kessler is President of Kessler Management Consulting,
LLC. Prior to February 1998, Mr. Kessler was Co-President of
Fel-Pro Incorporated which manufactures and distributes
gaskets, engine parts and industrial chemicals. Mr. Kessler
served in various capacities with Fel-Pro since 1964.
====================================================================================================================
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
NAMED ABOVE.
2
<PAGE> 5
CERTAIN INFORMATION REGARDING
THE BOARD OF DIRECTORS
In 1999, the Board of Directors held four meetings, at which all
Directors were present. The Board of Directors presently has a Compensation
Committee, an Audit Committee and a Nominating Committee. The Compensation
Committee is responsible for reviewing, determining and establishing the
salaries, bonuses and other compensation of our executive officers. Because our
executive officers' employment agreements presently control the compensation
paid to such executive officers, the Compensation Committee met only once during
1999. The Audit Committee is responsible for recommending independent auditors,
reviewing with the independent auditors the scope and results of the audit
engagement, establishing and monitoring our financial policies and control
procedures, reviewing and monitoring the provision of non-audit services by our
independent auditors and reviewing all potential conflict of interest
situations. The Audit Committee met two times during 1999. The Compensation
Committee and Audit Committee are each presently comprised of Mr. Robinson, Mr.
Weiner and Mr. Kessler, none of whom has ever been an officer or employee. Mr.
Weiner is Chairman of the Audit Committee and Mr. Robinson is Chairman of the
Compensation Committee. The Nominating Committee consists of Mr. Scott
(Chairman) and Messrs. Kessler, Tzur and Israel. The Nominating Committee
nominates candidates for election to the Board of Directors. The Nominating
Committee did not meet during 1999.
EXECUTIVE OFFICERS
The following sets forth information with respect to our executive
officer who is not a director. Such officer is elected annually by the Directors
and serves until his successor is elected and qualified or until his death,
resignation or removal by the Directors:
Jerome J. Hiss, 49, has served as our Chief Financial Officer since
August 1996 and Secretary and Assistant Treasurer since September 1996. He is a
Certified Public Accountant and a 1972 graduate of the University of Notre Dame
(B.B.A). From 1983 to August 1996, Mr. Hiss was employed at ANTEC Corporation,
serving initially as controller of the manufacturing business and later as a
corporate division controller. Prior to 1983, Mr. Hiss was employed by Household
International and the public accounting firm of Deloitte & Touche.
SHARE OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our Common Stock as of April 17, 2000 by (i) each
Director who beneficially owns Common Stock, (ii) each Executive Officer named
in the Summary Compensation Table, (iii) each person that is known by us to
beneficially own more than 5% of the outstanding shares of Common Stock, and
(iv) all Directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name (1) Beneficially Owned Shares Outstanding
- -------- ------------------ ------------------
<S> <C> <C>
Yehuda Tzur................................................... 1,104,600 (2) 15.9%
Arvin Scott................................................... 1,036,350 (3) 14.8%
Sami Israel................................................... 1,004,000 (4) 14.5%
Sheldon Robinson.............................................. 130,000 (5) 1.9%
Sol S. Weiner................................................. 115,000 (6) 1.7%
Reuben Gabay.................................................. 799,000 (7) 11.6%
Dennis L. Kessler............................................. 103,000 (8) 1.5%
Jerome J. Hiss................................................ 7,560 (9) *
Robert Geras.................................................. 350,000 5.1%
Finova Mezzanine Capital, Inc................................. 1,125,000 (10) 14.0%
All directors, and officers as a group (7 persons)............ 3,500,510 (11) 49.3%
</TABLE>
- ------------------------
* less than one percent
(1) The address of each of Messrs. Tzur, Scott, Israel, Gabay and Hiss are
11859 South Central Avenue, Alsip, Illinois 60803. The address of
Messrs. Robinson and Weiner are 6633 N. Sacramento, Chicago, Illinois
60645 and 101 Hamilton, Evanston, Illinois 60202, respectively. The
address of Mr. Kessler is 170 Lakeside Place, Highland Park, Illinois
60035. The address of Mr. Geras is 2127 Valley Road, Northbrook,
Illinois 60062. The address of Finova Mezzanine Capital, Inc. is 500
Church Street, Suite 200, Nashville, Tennessee 37219.
(2) Includes 37,600 shares issuable upon the exercise of options which are
currently exercisable.
3
<PAGE> 6
(3) Includes 110,600 shares issuable upon the exercise of options which are
currently exercisable.
(4) Includes 527,050 shares owned by Mr. Israel's spouse and children and
3,000 shares issuable upon the exercise of options which are currently
exercisable.
(5) Includes 15,000 shares issuable upon the exercise of options which are
currently exercisable and 100,000 shares owned by a general partnership
managed by Mr. Robinson.
(6) Includes 8,000 shares issuable upon the exercise of options which are
currently exercisable and 6,000 shares owned by Mr. Weiner's spouse.
(7) Includes 411,500 shares owned by Mr. Gabay's spouse and children.
(8) Includes 3,000 shares issuable upon the exercise of options which are
currently exercisable.
(9) Includes 7,560 shares issuable upon the exercise of options which are
currently exercisable.
(10) Represents exercisable warrants to purchase 1,125,000 shares pursuant
to terms of the Company's Subordinated Debenture.
(11) Includes 185,760 shares issuable upon the exercise of options which are
currently exercisable.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
total annual compensation we paid to the Chief Executive Officer and each of the
other executive officers ("Named Executive Officers") whose total cash
compensation for the year ended December 31, 1999 exceeded $100,000:
<TABLE>
<CAPTION>
=========================================================================================================================
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUSES NUMBER OF OPTIONS COMPENSATION
- --------------------------- ---- ------ ------- ----------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Yehuda Tzur........................... 1999 $190,000 --- 30,000 ---
Chairman of the Board 1998 $178,365 --- 26,000 (A) ---
1997 $175,000 --- 10,000 (A) ---
- -------------------------------------------------------------------------------------------------------------------------
Arvin Scott........................... 1999 $200,000 --- 40,000 ---
President and Chief Executive Officer 1998 $178,365 --- 116,000 (A) and (B) ---
1997 $175,000 --- 10,000 (A) ---
- -------------------------------------------------------------------------------------------------------------------------
Sami Israel........................... 1999 $139,050 --- 5,000 ---
Vice President and Treasurer 1998 $137,596 --- 5,000 ---
1997 $135,000 --- --- ---
- -------------------------------------------------------------------------------------------------------------------------
Jerome J. Hiss........................ 1999 $106,000 --- 12,000 ---
Chief Financial Officer and Secretary 1998 $104,413 $18,000 12,600 (A) ---
1997 $ 97,500 --- 1,000 (A) ---
- -------------------------------------------------------------------------------------------------------------------------
(A) Holders of nonqualified options issued in 1997 were provided the option of holding the nonqualified options bearing
a strike price of $5.00 or canceling and replacing them with qualified options for 60% of the number of shares
subject to the nonqualified options. Consequently, Messrs. Scott, Tzur and Hiss elected to convert 10,000,10,000
and 1,000 nonqualified options, respectively, and replace them with 6,000, 6,000 and 600 qualified options,
respectively.
(B) Of Mr. Scott's nonqualified options issued in 1995 bearing a strike price of $1.00, 44,000 nonqualified options
were canceled and replaced with qualified options to purchase 60,000 shares at 110% of fair market value at the
date of such grant.
=========================================================================================================================
</TABLE>
4
<PAGE> 7
OPTION TABLES
The following table sets forth certain information with respect to
options granted during the year ended December 31, 1999 under our Stock Option
Plan (as hereinafter defined). We did not grant any stock appreciation rights
during the year.
Option Grants in 1999
<TABLE>
<CAPTION>
====================================================================================================================
Potential Realized Value at
Assumed Annual Rates of
Individual Grants Stock Price Appreciation for
Option Term
- --------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options Granted Exercise
Underlying to Employees In Price Expiration
Name Options Granted Fiscal Year (per Share) Date 5% ($) 10% ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Yehuda Tzur 30,000 9.9% $2.41 3/04/09 40,729 107,680
- --------------------------------------------------------------------------------------------------------------------
Arvin Scott 40,000 13.2% $2.41 3/04/09 54,305 143,573
- --------------------------------------------------------------------------------------------------------------------
Sami Israel 5,000 1.6% $2.41 3/04/09 6,788 17,947
- --------------------------------------------------------------------------------------------------------------------
Jerome J. Hiss 12,000 4.0% $2.19 3/04/09 18,932 45,712
- --------------------------------------------------------------------------------------------------------------------
====================================================================================================================
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises during the
year ended December 31, 1999 by the Named Executive Officers and the value of
such officers unexercised stock options as of December 31, 1999.
<TABLE>
<CAPTION>
====================================================================================================================
Number of Unexercised Value of Unexercised In-the-Money
Options at 12/31/99 Options at 12/31/99
- --------------------------------------------------------------------------------------------------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Yehuda Tzur -- -- 37,600 43,400 $9,203 $13,555
- --------------------------------------------------------------------------------------------------------------------
Arvin Scott -- -- 110,600 81,400 $40,986 $34,585
- --------------------------------------------------------------------------------------------------------------------
Sami Israel -- -- 3,000 7,000 $2,226 $3,339
--------------------------------------------------------------------------------------------------------------------
Jerome J. Hiss -- -- 7,560 17,040 $6,267 $10,054
====================================================================================================================
</TABLE>
COMPENSATION OF DIRECTORS
Each Director who is not an officer or employee receives a fee of $2,500
per quarter and is reimbursed for out-of-pocket expenses incurred in connection
with attending meetings of the Board of Directors. During 1999, Messrs. Weiner,
Robinson and Kessler each received $10,000 in directors fees and each received
an option to purchase 1,000 shares of Common Stock at a price of $2.19 per share
which option is exercisable immediately.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of Sol
S. Weiner, Sheldon Robinson and Dennis Kessler, none of whom have ever been an
officer or employee of the Company.
5
<PAGE> 8
EMPLOYMENT AGREEMENTS
Each of Messrs. Tzur, Scott and Israel are parties to employment
agreements with us, all of which extend to May 2000, unless terminated sooner in
accordance with the provisions of such agreements, as amended, and which provide
for the renewal thereof for successive periods of one year at our option. The
employment agreements of each of such individuals currently provide for an
annual base salary of $135,000 and periodic bonuses. Pursuant to the terms of
the employment agreements, as amended, the officers' compensation thereunder is
subject to periodic adjustment by the Board of Directors, or a committee
thereof.
The foregoing employment agreements contain certain non-competition
covenants pursuant to which Messrs. Tzur, Scott and Israel are prohibited from
owning (subject to limited exceptions) or providing certain services to
businesses similar to or in competition with our business, so long as each of
such individuals is employed pursuant to such employment agreements, and for a
period of one-year thereafter.
We have provided Mr. Hiss a benefit equal to one year's base compensation
in the event of a change in control where there is a loss of employment, or, to
the extent employment is retained, an amount equal to the shortfall between base
compensation and actual base compensation from us under new ownership or with
another employer.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
Presently, all compensation decisions relating to the salaries of the
Named Executive Officers are governed by employment agreements between each of
Mr. Tzur, Scott and Israel and us, which agreements provide for the payment of
annual base salaries of $135,000, subject to increases or decreases, to each of
such individuals in amount as determined by either the Board of Directors or the
Compensation Committee, and periodic bonuses. Because the Named Executive
Officers' employment agreements presently control the compensation paid to such
executive officers, the Compensation Committee did not formulate policies with
respect to the Named Executive Officers' compensation during 1999.
6
<PAGE> 9
COMPARATIVE PERFORMANCE GRAPH
The graph set forth below compares cumulative total shareholder return on
our Common Stock with the cumulative total return of the companies listed on the
Nasdaq Stock Market (U.S. Companies) ("Nasdaq Market Index") and an industry
group consisting of publicly-traded companies included in our Standard
Industrial Classification Code (SIC Code 5013 - Motor Vehicle Supplies & New
Parts) (the "Industry Index") for the period from January 1, 1994 to December
31, 1999. The comparison assumes the investment of $100 in Common Stock, the
Nasdaq Market Index and the Industry Index on January 1, 1994 and the
reinvestment of all dividends. The shareholder return of each of the companies
in the Industry Index has been weighted according to market capitalization at
the beginning of each measurement period. Although most of the companies
included in the Industry Index engage in the distribution of brake parts, such
companies also engage in other lines of business.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
-----------------------------------------------------------------------------------------
COMPANY/INDEX/MARKET 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999
<S> <C> <C> <C> <C> <C> <C>
Universal Auto 100.00 115.00 20.63 18.44 11.25 23.13
Motor Vehicle Supplies & Parts 100.00 103.38 111.92 119.44 114.30 86.35
NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 490.46
</TABLE>
STOCK OPTION PLAN
We maintain the Universal Automotive Industries, Inc. Share Option Plan
(the "Stock Option Plan") for the benefit of our key employees, non-employee
directors, advisors, independent contractors and such other persons as the Board
of Directors
7
<PAGE> 10
believes valuable to us ("Eligible Persons"). Options granted under the Stock
Option Plan may be either incentive stock options ("ISO") under Section 422 of
the Code or nonstatutory options (an option which is not intended to be an
"incentive stock option," as defined in Section 422 of the Code). Options to
purchase an aggregate of 576,676 shares of Common Stock are outstanding under
the Stock Option Plan.
The Stock Option Plan, which was adopted by the Board of Directors on
October 13, 1994 and approved by our stockholders on October 13, 1994, is
intended to encourage ownership of Common Stock by Eligible Persons, in order to
attract such persons or to encourage such persons to serve or continue to serve
with us, and to provide additional incentives for such persons to promote our
success. There are a total of 700,000 shares of Common Stock reserved for
issuance under the Stock Option Plan. The Board of Directors, which may delegate
its authority to a committee, administers the Stock Option Plan.
No ISO shall be granted after the expiration of the earlier of ten years
from the date of adoption and approval of the Stock Option Plan by the Board and
its stockholders. The fair market value of shares of Common Stock with respect
to which ISOs are exercisable for the first time by any Eligible Person during
any calendar year shall not exceed $100,000.
The exercise price per share for shares underlying each nonstatutory
option shall be determined by the Board of Directors, which has the power to
determine eligibility to receive options and terms of any options granted,
including the exercise price, the number of shares subject to such nonstatutory
option, the vesting schedule and the exercise period. The exercise price per
share for shares underlying all ISOs granted under the Stock Option Plan must be
at least equal to the fair market value of a share of Common Stock on the date
of the grant. With respect to any participant who owns stock possessing more
than 10% of the voting power of our outstanding capital stock, the exercise
price per share for shares underlying any ISO granted must equal at least 110%
of the fair market value of a share of Common Stock covered by such ISO on the
grant date and the ISO shall terminate not more than five years from the grant
date.
ISOs shall terminate not more than ten years from the date of grant.
Nonstatutory options shall terminate not more than eleven years from the date of
grant. All options granted under the Stock Option Plan may be exercised over a
period of time after such person leaves our employment or after death. All
options granted under the Stock Option Plan are non-transferable.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that our Directors, Executive Officers and persons who own more than
10% of the outstanding shares of the Common Stock file with the Securities and
Exchange Commission certain reports relating to their ownership of Common Stock
and changes in such ownership. We are required to identify in this Proxy
Statement any persons subject to this requirement who failed to file any such
report on a timely basis. Based solely on a review of the copies of such reports
furnished to us, all such reports were filed on a timely basis.
CERTAIN TRANSACTIONS
We maintain key man term life insurance policies which we purchased
through the insurance agency of which Sheldon Robinson, a director, is an owner,
covering the life of Mr. Scott in the amount of $6,000,000 and Mr. Tzur in the
amount of $1,000,000, the proceeds of which would be payable to us. We paid
premiums of approximately $9,000 for these policies in 1999.
The Board of Directors has approved unsecured loans to each of Yehuda
Tzur, Chairman and Arvin Scott, President and Chief Executive Officer for terms
not exceeding five years. As of December 31, 1999, amounts of $115,000 and
$122,262 were due from Messrs. Tzur and Scott, respectively. The loans are due
December 31, 2000 and bear interest at prime.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee,
has appointed, subject to stockholder ratification, the firm of Altschuler,
Melvoin and Glasser LLP, certified public accountants, as our independent
auditors for 2000. If the shareholders do not ratify the appointment of
Altschuler, Melvoin and Glasser LLP, the Board of Directors will reconsider its
appointment, if so recommended by the Audit Committee.
A representative of Altschuler, Melvoin and Glasser LLP is expected to be
present at the Meeting. Such representative will have the opportunity to make a
statement if he desires to do so and will be available to respond to appropriate
shareholder questions.
8
<PAGE> 11
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
ALTSCHULER, MELVOIN AND GLASSER LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
2000.
DATE FOR RECEIPT OF PROPOSALS
In order for stockholder proposals to be included in the proxy materials
for the Company's 2001 Meeting of Stockholders, any such proposal must be
received by the Company at its executive offices not later than January 2, 2001
and meet all other applicable requirements for inclusion therein.
OTHER BUSINESS
The Board of Directors is not aware of any other matter to come before
the Meeting. However, if any such matter does come before the Meeting which
requires the vote of the Stockholders, it is the intention of the persons named
in the enclosed Proxies to vote the shares of Common Stock represented thereby
in accordance with the recommendations of our management and their judgment on
such matter.
ANNUAL REPORT ON FORM 10-K
A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1999 WILL BE PROVIDED FREE OF CHARGE TO STOCKHOLDERS UPON WRITTEN REQUEST
DIRECTED TO UNIVERSAL AUTOMOTIVE INDUSTRIES, INC., 11859 SOUTH CENTRAL AVENUE,
ALSIP, ILLINOIS 60803, ATTENTION: JEROME HISS.
By order of the Board of Directors,
Jerome J. Hiss, Secretary
Chicago, Illinois
May 10, 2000
9
<PAGE> 12
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
11859 South Central Avenue
Alsip, Illinois 60803
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Yehuda Tzur and Jerome Hiss, and each
of them, as Proxies, with the power to appoint their substitutes, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the Shares of Common Stock of Universal Automotive Industries, Inc. (the
"Corporation") held of record by the undersigned on April 17, 2000, at the
Annual Meeting of Stockholders when convened on June 1, 2000, or any adjournment
thereof.
1. ELECTION OF DIRECTORS--PROPOSAL to elect six Directors to hold office until
the next Annual Meeting of Stockholders, or otherwise as provided in the
Corporation's Certificate of Incorporation (check one box):
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as withheld in the to vote for all of the
space provided below) nominees listed below
NOMINEES: Mr. Yehuda Tzur, Mr. Arvin Scott, Mr. Sami Israel, Mr. Sol S. Weiner,
Mr. Sheldon Robinson and Mr. Dennis L. Kessler
(INSTRUCTIONS To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
Continued on the reverse side
<PAGE> 13
2. SELECT AUDITOR--PROPOSAL to concur in the selection of Altschuler, Melvoin
and Glasser LLP as the Corporation's independent auditor for the fiscal year
ending December 31, 2000 (check one box); and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. OTHER BUSINESS--in their discretion, the Proxies are authorized to transact
any other business as may properly come before the Meeting, or any adjournment
thereof.
This proxy when properly executed will be voted in the manner directly
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR Proposals 1 and 2.
--------------------------------------
Signature Date
--------------------------------------
Signature Date
NOTE: Sign exactly as name appears
above. If joint tenant, both should
sign. If attorney, executor,
administrator, trustee or guardian,
give full title as such. If a
corporation, please sign corporate
name by President or authorized
officer. If a partnership, sign in
full partnership name by authorized
person.
Please promptly initial, date, sign and return the card using the addressed
envelope. Please contact Jerome Hiss at (708) 293-4050 with any questions
regarding the above.
