<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
[AMENDMENT NO................]
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
[ ] Confidential, For Use of the Commission Only (as Permitted
by Rule 14a-6(e)(2))
Superior Surgical Mfg. Co., Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
---------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined:
---------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------
2) Form Schedule or Registration Statement No.:
------------------
3) Filing Party:
------------------------------------------------
4) Date Filed:
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<PAGE> 2
SUPERIOR SURGICAL MFG. CO., INC.
10099 Seminole Boulevard
P.O. Box 4002
Seminole, FL 33775-0002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders of SUPERIOR
SURGICAL MFG. CO., INC., (the "Company") will be held at the offices of the
Company, 10099 Seminole Boulevard, Seminole, Florida, on May 8, 1998 at 10 A.M.
(Local Time) for the following purposes:
1. To elect seven (7) Directors to hold office until the next
annual meeting of shareholders and until their respective
successors are duly elected or appointed and qualified;
2. To consider and vote upon a proposal to approve the
reincorporation of the Company through a merger of the
Company into its wholly-owned subsidiary, Superior Uniform
Group, Inc., a Florida corporation for the purpose of
changing the state of incorporation of the Company from New
York to Florida;
3. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to change the name of the
Company to "Superior Uniform Group, Inc."
4. To ratify the appointment of Deloitte & Touche LLP as
independent auditors for the year 1998; and
5. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The close of business on March 20, 1998 has been fixed as the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof.
By Order of the Board of Directors,
Seminole, Florida, March 27, 1998 ERROL PEGLER
Asst Secretary
- --------------------------------------------------------------------------------
IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THIS MEETING PLEASE MARK,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY. THANK YOU.
- --------------------------------------------------------------------------------
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<PAGE> 3
SUPERIOR SURGICAL MFG. CO., INC.
10099 SEMINOLE BOULEVARD
SEMINOLE, FLORIDA 33772
PROXY STATEMENT FOR 1998
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished by the Board of Directors of
Superior Surgical Mfg. Co., Inc. (the "Company") in connection with the
solicitation of proxies to be voted at the Company's 1998 Annual Meeting of
Stockholders, which will be held at 10:00 a.m. Local Time on May 8, 1998 at the
offices of the Company, 10099 Seminole Boulevard, Seminole, Florida (the
"Meeting").
Any proxy delivered pursuant to this solicitation may be revoked, at
the option of the person executing the proxy, at any time before it is
exercised by delivering a signed revocation to the Company, by submitting a
later-dated proxy, or by attending the Meeting in person and casting a ballot.
If proxies are signed and returned without voting instructions, the shares
represented by the proxies will be voted as recommended by the Board of
Directors. Shares that are not voted, either by casting a ballot in person or
by returning a signed proxy, by the stockholders or brokers entitled to vote
them, or through abstention, will not be considered in the final tabulation.
The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone by regular employees of the Company. The Company does not expect to
pay any compensation for the solicitation of proxies, but may reimburse brokers
and other persons holding stock in their names, or in the names of nominees,
for their expenses in sending proxy materials to their principals and obtaining
their proxies. The approximate date on which this Proxy Statement and enclosed
form of proxy has been first mailed to stockholders is March 27, 1998.
The close of business on March 20, 1998 has been designated as the
record date for the determination of stockholders entitled to receive notice of
and to vote at the Meeting. As of March 20, 1998, 7,852,052 shares of the
Company's common stock, par value $1.00 per share, (the "Common Stock") were
issued and outstanding. Each stockholder will be entitled to one vote for each
share of Common Stock registered in his or her name on the books of the Company
on the close of business on March 20, 1998 on all matters that come before the
Meeting.
ELECTION OF DIRECTORS
The By-Laws of the Company set the size of the Board of Directors at
not less than three (3) nor more than eight (8). The Board of Directors
currently consists of seven members. Directors hold their positions until the
Meeting at which time the term expires, after their respective successors are
elected and qualified.
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<PAGE> 4
The Board of Directors recommends that seven (7) Directors be elected
at the Meeting to hold office until the Company's annual meeting in 1999 and
until their successors shall be duly elected and qualified or until their
earlier resignation, removal from office, or death. The Board of Directors
unanimously recommends that you vote "FOR" the reelection of Gerald M.
Benstock, Alan D. Schwartz, Michael Benstock, Saul Schechter, Peter Benstock,
Manuel Gaetan, Ph.D. and Sidney Kirschner, as Directors, to serve the term as
described above. See "Management - Directors and Executive Officers" and
"Certain Transactions" for further information on such nominees. In the event
any of the nominees should be unable to serve, which is not anticipated, the
proxy committee, which consists of Directors Gerald M. Benstock, Alan D.
Schwartz and Saul Schechter, will vote for such other person or persons for the
office of Director as the Board of Directors may recommend.
Shareholders may vote for up to seven (7) nominees and the seven (7)
nominees receiving the highest number of votes shall be elected. Shareholders
may not vote cumulatively in the election of Directors.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the Directors and
executive officers and the positions they hold with the Company. Executive
officers serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Gerald M. Benstock 67 Chairman, Chief Executive Officer, Director and a
member of the Executive Committee.
Alan D. Schwartz 47 Co-President, Director and a member of the
Executive Committee.
Michael Benstock 42 Co-President, Director and a member of the
Executive Committee.
Saul Schechter 64 Executive Vice President, Director and a member
of the Executive Committee.
Peter Benstock 36 Senior Vice President and Director.
Manuel Gaetan, Ph.D. 60 Director and a member of the Audit, Stock Option
and Compensation Committees.
Sidney Kirschner 63 Director and a member of the Audit, Stock Option
and Compensation Committees.
</TABLE>
Gerald M. Benstock is the Chairman of the Board of Directors and Chief
Executive Officer of the Company. Mr. Benstock has served in these positions
for
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<PAGE> 5
more than the past 5 years, and prior to May 1, 1992, served as President
of the Company. Mr. Benstock also has served as a Director of the Company
since 1951.
Alan D. Schwartz has served as Co-President of the Company since May
1, 1992. Prior to such date, Mr. Schwartz served as Executive Vice President.
Mr. Schwartz has also served as a Director of the Company since 1981.
Michael Benstock has served as Co-President of the Company since May
1, 1992. Prior to such date, Mr. Benstock served as Executive Vice President
of the Company. Mr. Benstock has also been a Director of the Company since
1985.
Saul Schechter has served as Executive Vice President for more than
the past 5 years and has been a Director of the Company since 1957.
Peter Benstock has served as Senior Vice President since February 7,
1994, formerly Vice President of the Company since May 2, 1990. Mr. Benstock
has also been a Director of the Company since 1990.
Manuel Gaetan, Ph.D., has been a Director of the Company since
November 7, 1991. For more than five years, Dr. Gaetan has been President and
C.E.O. of Bobbin Blenheim, Inc.
Sidney Kirschner has been a Director of the Company since September
25, 1996. He has been President and Chief Executive Officer of Northside
Hospital, Inc. since 1992. Prior thereto, he served as Chairman of the Board,
President and Chief Executive Officer of National Service Industries, Inc. He
also currently serves as a director of American Brands, Inc.
No family relationships exist between the Company's Directors,
nominees and executive officers, except that Michael Benstock and Peter
Benstock are sons of Gerald M. Benstock, and Alan D. Schwartz is his
son-in-law. There are no arrangements or understandings between any Director
or nominee and any other person concerning service or nomination as a Director.
The Board has Executive, Audit, Stock Option and Compensation
Committees; it does not have a Nominating Committee. The entire Board of
Directors functions as a Nominating Committee, and the Board will consider any
written recommendations from shareholders for positions on the Board of
Directors. Nominations from shareholders should be directed in writing to the
Assistant Secretary of the Company.
The current members of the Executive Committee are Messrs. Gerald M.
Benstock, Alan D. Schwartz, Michael Benstock and Saul Schechter. The current
members of the Audit, Stock Option and Compensation Committees are Messrs
Manuel Gaetan, Ph.D. and Sidney Kirschner.
The Board of Directors held four meetings during 1997. Directors are
compensated on the basis of $1,250 quarterly and $1,000 per meeting attended;
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<PAGE> 6
Directors attending Audit or Compensation Committee meetings on a day other
than the day of the Directors' meeting receive $300 per meeting of such
Committee.
Directors who are full-time employees of the Company receive no extra
compensation for their services as Directors.
The Executive Committee is authorized to act in place of the Board of
Directors during periods between Board meetings. It met four times during the
year.
The Audit Committee held two meetings in 1997. Its principal
functions are: recommending to the Board of Directors engagement or discharge
of independent auditors; reviewing with independent auditors plans for and
results of the audit engagement; considering the degree of independence of the
auditors; considering the range of audit fees; and reviewing the scope,
adequacy and the results of the Company's internal auditing procedures and
accounting controls.
The Compensation Committee met once during the year. Its principal
function is to make recommendations to the Board of Directors with respect to
the compensation of officers and Directors.
The Stock Option Committee met once during the year. Its principal
function is to make recommendations to the Board of Directors with respect to
the granting of incentive stock options to officers and key employees.
In 1997, each incumbent Director attended a least 75% of all meetings
of the Board and of each committee for which he was a member.
See "Certain Transactions" for additional information on certain
members of management.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth, as of December 31, 1997, information
as to the beneficial ownership of the Company's Common Stock by (i) each person
known to the Company having beneficial ownership of more than 5% of the
Company's Common Stock, (ii) each Director, (iii) each executive officer and
(iv) all Directors and executive officers as a group:
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<PAGE> 7
SECURITY OWNERSHIP
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Percent of
Name and Address of Beneficial Owner Ownership(1) Class
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gerald M. Benstock and Mochelle A. Stettner, 1,248,208 (2) 15.73%
as Trustees under Will of
David L. Benstock
2331 Lehigh Parkway North
Allentown, Pennsylvania 18130
Gerald M. Benstock 987,264 (2)(3)(7) 12.39%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
Dimensional Fund Advisors, Inc. 602,700 (4) 7.59%
1299 Ocean Avenue
Santa Monica, California 90401
T. Rowe Price Associates, Inc. 456,000 (5) 5.75%
100 East Pratt Street
Baltimore, Maryland 21202
Ryback Management Corporation 497,000 (6) 6.26%
7711 Carondelet Ave., Box 16900
St. Louis, Missouri 63105
Alan D. Schwartz 183,356 (7) 2.30%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
Michael Benstock 180,222 (7) 2.26%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
Saul Schechter 168,340 (7) 2.11%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
Peter Benstock 125,435 (7) 1.58%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
Manuel Gaetan, Ph.D. 1,900 0.02%
10099 Seminole Boulevard
Seminole, Florida 33772-2539
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
Sidney Kirschner 2,000 0.03%
10099 Seminole Blvd.
Seminole, Florida 33772-2539
All Directors and Executive Officers as a Group 2,896,725 (1)(2)(3)(7) 35.89%
(7 persons)
</TABLE>
- ------------
(1) Except as otherwise indicated, all shares are individually held of record
with sole voting and investment power or held of record by relative(s) of
the named shareholder and the named shareholder has sole or shared voting
and investment power.
(2) Gerald M. Benstock and the trusts under will of David L. Benstock may be
deemed "associates" as that term is defined in the rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended. Mr.
Benstock and his sister are co-trustees and remaindermen of the trusts
under will of David L. Benstock (their father); the extent of their
beneficial interest in or ownership of the Company Common Shares owned by
the trusts is indeterminable at present. None of the shares held by Mr.
Benstock and his sister as trustees are included in the listing for Mr.
Benstock.
(3) Includes 74,240 shares held of record by Mr. Benstock's wife and 82,950
shares held by two trusts in which Mr. Benstock is the trustee and has
sole investment power.
(4) According to a Schedule 13G filed with the Commission, Dimensional Fund
Advisors, Inc. ("Dimensional"), a registered investment advisor, is
deemed to have beneficial ownership of 602,700 shares; all such shares are
held in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end investment company, or the DFA Investment Trust Company, a
Delaware investment trust, or the DFA Group Trust and the DFA Participating
Group Trust, investment vehicles for qualified employee benefit plans, all
of which Dimensional Fund Advisors, Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares, has sole
voting power with respect to 421,000 shares and sole investment power with
respect to all the shares.
(5) According to a Schedule 13G filed with the Commission, these securities are
owned by various individual and institutional investors including the T.
Rowe Price Mutual Funds, which owns 456,000 shares, which T. Rowe Price
Associates, Inc. (Price Associates) serves as investment adviser
with sole investment power as to all of the securities and no power to vote
the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
-7-
<PAGE> 9
(6) According to a Schedule 13G filed with the Commission, Ryback Management
Corporation ("Ryback"), a registered investment advisor, is deemed to have
beneficial ownership of 497,000 shares; all such shares are held in the
portfolio of Lindner Growth Fund, a registered investment company. Ryback
has sole power to vote and sole disposition power for all shares.
(7) The share ownership given for each of the above includes options, some
expiring in 1999, 2000, 2001 and the balance in 2002, as follows: Mr.
G. M. Benstock - 30,250 shares; Mr. Schwartz - 26,000 shares; Mr. M.
Benstock - 26,000 shares; Mr. Schechter - 29,000 shares; and Mr. P.
Benstock - 21,250.
COMPENSATION OF EXECUTIVE OFFICERS
The following table is a summary of the compensation paid or accrued by the
Company for the last three fiscal years, for services in all capacities to the
Chief Executive Officer and the four other executive officers of the Company
who were most highly compensated in the last year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------- LONG TERM
OTHER ANNUAL COMPENSATION OTHER
NAME AND BONUS COMPENSATION AWARDS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) ($)(1) ($)(2) OPTIONS (3)(#) ($) (4)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald M. Benstock, 1997 $201,500 $ 80,000 $11,750 6,600 shares $282,140
Chairman and CEO 1996 201,500 67,000 6,085 8,850 shares 284,400
1995 201,500 - 6,085 8,200 shares 286,317
Alan D. Schwartz, 1997 230,000 92,000 735 7,250 shares -
Co-President 1996 215,543 80,000 735 9,750 shares -
1995 210,000 - 735 9,000 shares -
Michael Benstock, 1997 217,500 92,000 735 7,250 shares -
Co-President 1996 200,244 80,000 735 9,750 shares -
1995 195,000 - 735 9,000 shares -
Saul Schechter, 1997 196,500 79,000 735 6,000 shares -
Executive Vice 1996 187,680 55,000 735 8,000 shares -
President 1995 184,000 - 735 9,000 shares -
</TABLE>
-8-
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Peter Benstock, 1997 140,000 75,000 735 7,250 shares -
Senior Vice 1996 120,683 65,000 735 8,000 shares -
President 1995 117,000 - 735 6,000 shares -
</TABLE>
- ----------
(1) Cash bonus payments pursuant to an officers bonus pool as determined by
the Compensation Committee and described further in the Report of
the Compensation Committee and Stock Option Committee beginning on page
of the Proxy Statement.
(2) Automobile allowance provided to executive officers.
(3) Options granted in 1995, 1996 and 1997 were for a period of five years
expiring on August 3, 2000, February 8, 2001 and February 6, 2002
respectively, issued under the Company's 1993 Incentive Stock Option
Plan.
(4) The Company paid these net premiums under a Split-Dollar Life Insurance
Agreement on behalf of Gerald M. Benstock for the benefit of the
Benstock Family Insurance Trust. On January 14, 1991, the Company entered
into a Split-Dollar Life Insurance Agreement (the "Agreement") with
the Benstock Family Insurance Trust, Michael Benstock and Alan D.
Schwartz, Trustees (the "Trust"), pursuant to which the Company has
agreed to advance certain sums to the Trust, without interest, to be used
to pay the premiums on a life insurance policy obtained from
Confederation Life Insurance Company in the amount of $10,000,000 on the
lives of Gerald M. Benstock and M. Joan Benstock, his spouse. In 1993,
an additional $2,000,000 was added to the trust under an insurance policy
from Massachusetts Mutual Life Ins. Co. on the life of Gerald M.
Benstock. The Trust was established and the policies obtained for estate
planning purposes. Under the terms of the Agreement, the Company is
obligated to advance that portion of the premium relating to Mr.
Benstock, individually, so long as such premiums are payable under the
policy. As of December 31, 1997, the Company had advanced $282,140 in
aggregate for 1997 to the Trust. The Trust has assigned to the Company
its interest in the policy as security for repayment of advances.
Advances are repayable only upon (1) the death of the survivor of Mr.
Benstock and his spouse, (2) the surrender of the policy by the Trust, or
(3) the termination of the Agreement prior to the death of Mr. Benstock
and his spouse.
The following table details stock option grants made by the Company to the
Chief Executive Officer and the four other most highly compensated executive
officers of the Company.
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<PAGE> 11
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term (1)
Individual Grants
(a) (b) (c) (d) (e) (f) (g)
- ----------------------------------------------------------------------------------------------------------
% of
# of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#) (2) Year ($/Sh.) Date 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald M. Benstock 6,600 4.8% $15.125 2/6/2002 127,405 160,769
Alan D. Schwartz 7,250 5.3% 13.75 2/6/2002 127,229 160,548
Michael Benstock 7,250 5.3% 13.75 2/6/2002 127,229 160,548
Saul Schechter 6,000 4.4% 13.75 2/6/2002 105,293 132,867
Peter Benstock 7,250 5.3% 13.75 2/6/2002 127,229 160,548
</TABLE>
- ----------
(1) Based on five year option term and annual compounding. The 5% and 10%
calculations are set forth in compliance with the Security and Exchange
Commission rules. The Company does not necessarily believe that the
appreciation calculations in compliance with the rules are indicative of
future stock option values.
(2) The grants described in this column were granted by the Company in 1997
pursuant to the Company's 1993 Stock Option Plan. The executive
officers are considered for stock option grants by the Stock Option
Committee on the same basis as all other employees of the Company. The
grants are exercisable until February 6, 2002.
The following table details aggregated stock option exercises in 1997
and stock option values as of December 31, 1997 for unexercised stock options
held by the Chief Executive Officer and the four other most highly compensated
executive officers of the Company.
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<PAGE> 12
AGGREGATED STOCK OPTION EXERCISES IN 1997
AND STOCK OPTION VALUES AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES ACQUIRED OPTIONS AT FY-END (#) MONEY OPTIONS AT FY-END ($)(1)
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE EXERCISABLE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald M. Benstock - - 6,600 5,775
- - 8,850 41,816
- - 8,200 34,235
- - 6,600 5,775
Alan D. Schwartz - - 7,250 16,313
- - 9,750 56,063
- - 9,000 47,250
Michael Benstock - - 7,250 16,313
- - 9,750 56,063
- - 9,000 47,250
Saul Schechter - - 6,000 13,500
- - 8,000 46,000
- - 9,000 47,250
- - 6,000 13,500
Peter Benstock - - 7,250 16,313
- - 8,000 46,000
- - 6,000 31,500
</TABLE>
- ----------
(1) At fiscal year end December 31, 1997, the closing stock price was
$16.00 per share on the American Stock Exchange. The numbers shown
reflect the value of unexercised options accumulated between 1994
and 1997. The stock options described are options granted under the
Company's 1993 Stock Option Plan.
Since 1942, the Company has had a retirement plan (the "Basic Plan") which has
been qualified under the Internal Revenue Code. The Basic Plan is a "defined
benefit"
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<PAGE> 13
plan, with benefits normally beginning at age 65, is non-contributory
by an employee, and the Company's contributions are not allocated to the
account of any particular employee. All employees of the Company (except
employees included in a retirement plan negotiated as part of a union contract)
are eligible to participate in the Basic Plan. The Company also commenced
effective November 1, 1994, the Superior Surgical Mfg. Co., Inc. Supplemental
Pension Plan (the "Supplemental Plan") available to certain eligible employees
of the Company. Retirement benefits available under the Supplemental Plan are
based on the same provisions as in the qualified plan but ignore the salary
limitations imposed by the Internal Revenue Service ($160,000 in 1997).
Accordingly, all eligible employees, regardless of earnings, will receive
exactly the same formula distribution upon retirement. The following table
shows estimated annual retirement benefits for the Basic Plan and Supplemental
Plan (the "Plan") combined, which are payable to employees of the Company upon
retirement in specified compensation and years of service classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
TOTAL YEARS OF SERVICE AT RETIREMENT (AGE 65 IN 2003)
---------------------------------------------------------
REMUNERATION 10 15 20 25 OR MORE
---------------------------------------------------------
<S> <C> <C> <C> <C>
(1998)
$125,000 $13,745 $20,618 $ 27,490 $ 34,363
150,000 16,995 25,493 33,990 42,488
175,000 20,245 30,368 40,490 50,613
200,000 23,495 35,243 46,990 58,738
225,000 26,745 40,118 53,490 66,863
250,000 29,995 44,993 59,990 74,988
300,000 36,495 54,743 72,990 91,238
350,000 42,995 64,493 85,990 107,488
400,000 49,495 74,243 98,990 123,738
450,000 55,995 83,993 111,990 139,988
500,000 62,495 93,743 124,990 156,238
</TABLE>
The above table shows a projected annual single life annuity with
annual retirement benefits which would accrue for various periods of employment
at various compensation levels, assuming constant earnings in all future years,
continuous employment until age 65, and no change in 1997 Covered Compensation
Level. The Plan provides benefits based on years of service and earnings above
and below the covered
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<PAGE> 14
Compensation Base. The normal monthly retirement benefit is 17.5% of an
employee's average monthly compensation during the highest paid five years of
the ten years immediately preceding retirement up to his Covered Compensation
Base plus 32.5% of such average monthly compensation in excess of his Covered
Compensation Base, reduced in the event such employee has less than 25 years of
service. An employee's compensation includes over-time pay, commissions and any
bonus received and therefore includes executive officers compensation as
described in Salary and Bonus in the Summary Compensation Table shown above. Of
the five most highly compensated executive officers, Mr. G. Benstock and Mr.
Schechter have the maximum years of service credited and Mr. Schwartz, Mr. M.
Benstock and Mr. P. Benstock have 23, 19 and 15 years service respectively
credited under the Plan. The Basic Plan was amended as of November 1, 1989.
Prior to the amendment, the Basic Plan provided benefits based on years of
service and earnings in excess of the Covered Compensation Base (the wage
bases on which maximum Social Security taxes are payable). Benefits accrued to
November 1, 1989, under the Basic Plan prior to the recent amendment would be
paid, if higher than the sums set forth above.
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
The information contained in this section and the following
"Performance Graph" are not deemed to be "soliciting material" or to be "filed"
with the Commission or subject to Regulation 14A under the Securities Exchange
Act of 1934, or to the liabilities of Section 18 of the Securities Exchange Act
of 1934.
The following report was prepared by independent Directors Sidney
Kirschner and Manuel Gaetan, Ph.D., as the members of the Company's
Compensation Committee and Stock Option Committee:
Annual compensation (other than stock option grants) for the executive
officers of the Company are determined by the Compensation Committee of the
Company. Stock option grants will be made pursuant to the Company's 1993
Incentive Stock Option Plan, at the discretion of the Stock Option Committee,
to the Company's officers and other key employees. The usual components of the
annual compensation paid to all of the Company's executive officers are (i)
base salary; (ii) a cash bonus awarded pursuant to an informal bonus pool
arrangement for Company officers as established by the Compensation Committee;
(iii) allocations of contributions made by the Company to the respective
accounts of the executive officers under its pension plans; (iv) stock option
grants awarded by the Stock Option Committee; (v) a car allowance; and (vi) for
the Chief Executive Officer, advances pursuant to the Split Dollar Insurance
arrangement described in footnote 4 of the Summary Compensation Table of this
Proxy Statement. Each of these components of annual compensation are
determined based upon a variety of factors, most of which are subjective.
The base salaries of the Chief Executive Officer and all other
executive officers of the Company are determined each year by the Compensation
Committee based on factors and criteria consisting of comparison of similarly
situated officers of similar companies, comparison of similarly situated
officers of companies of similar size in the locale of the Company, years of
service, assigned responsibilities, individual performance, growth of the
Company, profitability of the Company and
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<PAGE> 15
increases in the cost of living. In this connection, each year the Compensation
Committee determines, after consultation with the Chief Executive Officer and
other executive officers, an overall goal by which the aggregate amount of base
salary increases for all employees of the Company, including the Chief Executive
Officer and all other executive officers are not generally exceeded. Within
such overall goal, individual allocations are then made within each department
of the Company such that the aggregate base salaries paid to each member of that
department generally comply with the target levels for that department.
Generally, the same allocations within the same overall goal is made by the
Compensation Committee with respect to the Chief Executive Officer and the other
executive officers of the Company.
During the first quarter of each fiscal year of the Company, the
Compensation Committee establishes the guidelines for an informal bonus pool in
which the Chief Executive Officer, all executive officers and all corporate
managers are entitled to participate with a bonus, based upon varying
percentages of the base salaries of all executive officers and all corporate
managers of the Company, linked to annual pre-tax earnings as a percentage of
annual net sales on a graduated basis. Individual allocations are then made by
the Compensation Committee with respect to all executive officers of the
Company, including the Chief Executive Officer. Criteria and factors for the
individual allocations are based on responsibilities, individual performance
and direct and indirect contribution to the profitability of the Company.
Inasmuch as each of the Company's pension plans cover all full-time
employees (as defined in the Plan) of the Company, awards to all the executive
officers under such plan are made on the same basis as are awards of all other
participants.
Stock option grants to all executive officers and other key employees
of the Company, including the Chief Executive Officer, are made at the
discretion of the Stock Option Committee pursuant to the Company's Stock Option
Plan. Factors and criteria used by the Stock Option Committee in the award of
stock options included individual responsibilities, individual productivity,
individual performance, direct and indirect contribution to the profitability of
the Company. Any benefits derived from each stock option granted under the Stock
Option Plan is directly attributable to any future increase in the value of the
Company's common stock.
The automobile allowance awarded to each of the 4 most highly
compensated executive officers of the Company has remained similar for the last
3 fiscal years of the Company. The automobile allowance is relatively minimal
and is the same for each such executive officer. The allowance awarded to the
Chief Executive Officer recognizes the title, function and responsibilities of
the Chief Executive Officer and the manner in which he represents the Company.
Except with respect to the car allowance and the advances made annually
to the split dollar insurance arrangement on behalf of the Chief Executive
Officer, all other annual compensation awarded to the Chief Executive Officer
was done on a similar basis, and with similar factors and criteria, as employed
with respect to all other executive officers of the Company.
BY: Manuel Gaetan, Ph.D., and Sidney Kirschner
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<PAGE> 16
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE RETURN* AMONG SUPERIOR SURGICAL MFG.
CO., INC., S&P 500 INDEX AND S&P TEXTILE APPAREL MANUFACTURERS INDEX**
The following graph, based on data provided by Standard & Poor, shows
changes in the value of $100 invested at December 31, 1992 of: (a) shares of
Company common stock; (b) the S&P 500 index; and (c) the S&P Textile Apparel
Manufacturers Index. Total shareholder returns from each investment can be
calculated from the year-end investment values shown in the table beneath the
graph provided below.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Superior Surgical Mfg. Co., Inc. 100 79 63 50 73 89
S&P 500 Index 100 110 112 153 189 252
S&P Textile Apparel Manuf. Index 100 76 74 83 114 123
</TABLE>
- -----------
* Total return assumes reinvestment of dividends and is adjusted
for a 4 for 1 stock split of the Company's stock in June, 1992.
** Fiscal year ending December 31st.
Note: The stock price performance shown on the graph above is not
necessarily indicative of future price performance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee and the Stock
Option Committee are Sidney Kirschner and Manuel Gaetan, Ph.D. Neither
individual has at any time been an officer of the Company.
CERTAIN TRANSACTIONS
As authorized by Section 726 of the Business Corporation Law of the
State of New York, the Company maintains insurance to indemnify it and its
Directors and officers from certain liabilities to the extent permitted by law;
such insurance is in the face amount of $10,000,000 with Federal Insurance
Company, under contract dated August 27, 1997 at an annual premium of $84,375.
No sums have been paid or sought under any such indemnification insurance.
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<PAGE> 17
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors, officers and holders of more than 10% of the Company's
Common Stock to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
any other equity securities of the Company. To the Company's knowledge, based
solely upon a review of the forms and reports filed with the Company by such
persons, all such Section 16(a) filing requirements were complied with in 1997.
PROPOSAL TO APPROVE THE REINCORPORATION
OF THE COMPANY FROM NEW YORK TO FLORIDA
INTRODUCTION
In February 1998, the Board of Directors recommended and approved a
plan to change the Company's state of incorporation from New York to Florida
(the "Reincorporation"). The Reincorporation will be effected by merging the
Company into Superior Uniform Group, Inc., a Florida corporation ("Superior
Florida"), pursuant to an Agreement and Plan of Merger to be entered into
between the Company and Superior Florida (the "Merger Agreement"). A copy of
the Merger Agreement form is set forth as Exhibit "A" to this Proxy Statement.
At the time of the Reincorporation, Superior Florida will be a wholly owned
subsidiary of the Company incorporated in Florida for purposes of effecting the
Reincorporation. Upon consummation of the Reincorporation, Superior Florida
will continue to exist as the surviving corporation of the merger and its name
will be "Superior Uniform Group, Inc."
REASONS FOR THE REINCORPORATION
The Company was originally incorporated in New York in 1922 because
the Company's principal offices and operations were then located in that state.
In 1979, the Company relocated its corporate headquarters and principal offices
to Florida. The move was undertaken because the Company had acquired several
divisions located in the southeast, had its manufacturing plants in the
southeast, and because it believed Florida provided an improved business
environment. Accordingly, the Board of Directors now recommends that the
Company's state of incorporation also be changed to Florida. The Board of
Directors believes that the Florida Business Corporation Act (the "FBCA"), a
comprehensive, modern and flexible statute based on the Revised Model Business
Corporation Act, will meet the Company's needs, including providing the ability
to grant options to the Company's directors, officers and employees, and that
incorporation in the State of Florida will reduce the cost, formality and
uncertainty of doing business. For a comparison of the FBCA and the New York
Business Corporation Law (the "NYBCL"), see "Comparison of New York and Florida
Corporate Laws." In addition to the flexibility provided by the FBCA, the
Reincorporation will conform the Company's legal residence to its principal
place of business, which the Board of Directors believes may have certain
advantages. For example, it could enable the Company to have a more
significant voice in the legislative process with respect to corporate
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<PAGE> 18
and other Florida laws directly affecting it. In addition, legal services can be
provided more efficiently by local counsel versed in Florida law. Finally, a
corporation's state of incorporation is likely to be a litigation forum from
time to time, and litigation at a distance from the Company's principal offices
can result in significant inconveniences and added expense to the Company. For
these reasons, the Board of Directors recommends the Reincorporation.
THE MERGER
The Reincorporation will be effected through a merger (the "Merger")
of the Company with and into Superior Florida, with Superior Florida being the
surviving corporation. The terms and conditions of the Merger are set forth in
the Merger Agreement form included as Exhibit "A" to this Proxy Statement. The
summary of the terms and conditions of the Merger set forth below is qualified
by reference to the full text of the Merger Agreement. Upon consummation of the
Merger, Superior Florida will continue to exist and its name will remain
Superior Uniform Group, Inc., and the Company will cease to exist. The
Reincorporation will change the legal domicile of the Company, but will not
result in a change in the principal offices, business, management,
capitalization, assets or liabilities of the Company. By operation of law,
Superior Florida will succeed to all of the assets and assume all of the
liabilities of the Company and the Company's various divisions, including
Fashion Seal, Appel, Worklon, Martin's Uniforms and Sope Creek will continue
manufacturing a wide range of products. The Board of Directors of Superior
Florida will be comprised of the directors of the Company at the time of the
Merger, and the persons who are currently serving as executive officers of the
Company will continue to serve in the same capacities for Superior Florida.
After the Merger, the rights of shareholders and the Company's
corporate affairs will be governed by the FBCA and by the articles of
incorporation and bylaws of Superior Florida, instead of the NYBCL and the
certificate of incorporation and bylaws of the Company. A comparison of the
material provisions of the NYBCL and the FBCA is set forth below under the
caption "Comparison of New York and Florida Corporate Laws." With regard to
the articles of incorporation and bylaws of Superior Florida, the Board of
Directors believes that all material provisions of such articles of
incorporation and bylaws are similar in all material respects to the
certificate of incorporation and bylaws of the Company. A copy of the articles
of incorporation of Superior Florida is set forth as Exhibit "B" to this Proxy
Statement. The certificate of incorporation and bylaws of the Company, as well
as the bylaws of Superior Florida, are available for inspection by stockholders
of the Company at the principal offices of the Company located at 10099
Seminole Boulevard, Seminole, FL 33775.
Upon the effectiveness of the Merger, each share of Common Stock will
be automatically converted into one share of the common stock, par value $0.001
per share, of Superior Florida (the "Florida Common Stock"). Each outstanding
certificate representing shares of Common Stock will continue to represent the
same number of shares of Florida Common Stock and such certificate will be
deemed for all corporate purposes to evidence ownership of shares of Florida
Common Stock. IT WILL NOT BE NECESSARY FOR SHAREHOLDERS TO EXCHANGE THEIR
EXISTING STOCK
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<PAGE> 19
CERTIFICATES FOR STOCK CERTIFICATES OF SUPERIOR FLORIDA. The Florida Common
Stock will continue to be listed on the American Stock Exchange ("AMEX"),
without interruption, and the AMEX will consider the delivery of existing stock
certificates of the Company as constituting good delivery of shares of Superior
Florida in stock transactions effected after the Merger. The stock symbol "SGC"
will remain unchanged, subject to AMEX approval.
Following the Merger, the Company's compensation plans will be
continued by Superior Florida, including but not limited to the Company's 1993
Stock Option Plan, the options granted pursuant to such plans will
automatically be converted into options to purchase the same number of shares
of Florida Common Stock at the exercise price and upon the same terms and
conditions as set forth in the options. The Company's other employee benefit
plans and arrangements will also be continued by Superior Florida upon the same
terms and conditions.
Consummation of the Merger is subject to approval by two-thirds of the
holders of the Company's outstanding shares of Common Stock. The Merger is
expected to become effective as soon as practicable after shareholder approval
is obtained and all other conditions to the Merger have been satisfied,
including the receipt of all consents, orders and approvals necessary for
consummation of the Merger and the listing of the shares of the Florida Common
Stock on the AMEX. Prior to its effectiveness, however, the Merger may be
abandoned by the Board of Directors if, for any reason, the Board of Directors
determines that consummation of the Merger is no longer advisable.
Appraisal rights are not available to shareholders of the Company with
respect to the proposed Merger.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
A holder of Common Stock will not recognize gain or loss in respect of
his or her Common Stock as a result of the Reincorporation. His or her basis in
a share of Florida Common Stock will be the same as his or her basis in the
corresponding share of the Company's Common Stock held immediately prior to the
Reincorporation. His or her holding period in a share of Florida Common Stock
will include the period during which he or she held the corresponding share of
the Company's Common Stock, provided he or she held the corresponding share as
a capital asset at the time of the Reincorporation.
Although the Company does not anticipate that state or local income
tax consequences to stockholders will vary from the federal income tax
consequences described above, stockholders should consult their own tax
advisors as to the tax effect of the Reincorporation under applicable state and
local tax laws.
In addition, neither the Company nor Superior Florida will recognize
gain or loss as a result of the Reincorporation, and Superior Florida generally
will succeed, without adjustment, to the tax attributes of the Company.
Because the Company is based in Florida, it is already qualified to transact
business in Florida and pays Florida corporate income tax. Accordingly,
changing the state of
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<PAGE> 20
incorporation of the Company is not expected to affect the amount of corporate
income and other taxes payable.
This discussion should not be considered as tax or investment advice,
and the tax consequences of the merger may not be the same for all
shareholders. Shareholders should consult their own tax advisors to know their
individual Federal, state, local and foreign tax consequences.
DESCRIPTION OF CAPITAL STOCK AND VOTING RIGHTS
The following statements are brief summaries of certain provisions
relating to the capital stock of Superior Florida that are contained in its
articles of incorporation. The provisions described below, including those
regarding voting rights, are substantially the same as the provisions relating
to the capital stock of the Company contained in its current certificate of
incorporation. The summary below is qualified in its entirety by reference to
the full text of the articles of incorporation of Superior Florida included as
Exhibit "B" to this Proxy Statement.
Common Stock. Holders of Florida Common Stock will be entitled to
one vote per share on each matter that is submitted to shareholders for
approval. Shareholders of Superior Florida will not have cumulative voting
rights. Holders of Florida Common Stock are entitled to receive dividends and
other distributions when, as and if declared by the Board of Directors of
Superior Florida out of funds legally available thereof, subject to the
preferential rights of the holders of any outstanding shares of preferred
stock, par value .001 per share (the "Preferred Stock"), of Superior Florida.
Shareholders of Superior Florida will have no preemptive or other rights to
subscribe for additional shares of Florida Common Stock or other securities of
Superior Florida.
Preferred Stock. Superior Florida will be authorized to issue up to
300,000 shares of Preferred Stock. Although Superior Florida has no present
plans to issue any shares of Preferred Stock, such shares of Preferred Stock
may be issued from time to time in one or more classes or series with such
designations, powers, preferences, rights, qualifications, limitations and
restrictions as may be fixed by the Board of Directors.
VOTE REQUIRED FOR APPROVAL
The merger requires the approval of the holders of two-thirds of the
outstanding shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REINCORPORATION.
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<PAGE> 21
COMPARISON OF NEW YORK AND FLORIDA CORPORATE LAWS
Set forth below is a brief comparison of some of the material
provisions of the NYBCL and the FBCA. With regard to the articles of
incorporation and bylaws of Superior Florida, the Board of Directors believes
that all material provisions of such articles of incorporation and bylaws are
similar in all material respects to the certificate of incorporation and bylaws
of the Company. The statements set forth under this heading with respect to
the NYBCL and the FBCA and the respective organizational charters of the
Company and Superior Florida are brief summaries thereof and do not purport to
be complete. The statements relating to the NYBCL and the FBCA are subject to
the detailed provisions of such statutes and the case law and other legal
interpretations relating to such statutes. The information relating to the
respective organizational charters are qualified in their entireties by such
documents, copies of which are available from the Company. A copy of Superior
Florida's articles of incorporation is also attached hereto as Exhibit "B".
Dividend Rights
Under the NYBCL, a corporation is prohibited from making a
distribution to shareholders if, after giving effect thereto: (i) such
corporation would be made insolvent, (ii) the declaration, payment or
distribution would be contrary to any restrictions contained in the
corporation's certificate of incorporation, (iii) such corporation's net assets
remaining after such declaration, payment or distribution is less than its
stated capital. Under the FBCA, a Florida corporation may make distributions
to shareholders as long as, after giving effect to such distribution, (1) the
corporation would be able to pay its debts as they become due in the usual
course of business, and (2) the corporation's total assets would not be less
than the sum of its total liabilities plus (unless the articles of
incorporation permit otherwise, which Superior Florida's articles of
incorporation do not) the amount that would be needed if the corporation were
to be dissolved at the time of the distributions to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are superior
to those receiving the distribution. Under the FBCA, a corporation's redemption
of its own capital stock is deemed to be a distribution.
Directors
Number
Under the NYBCL, the number of directors of a corporation may be (i)
fixed by the bylaws or (ii) by action of the shareholders or the board of
directors under the specific provisions of a bylaw adopted by the shareholders.
If the number is not fixed, there must be a minimum of one director. The FBCA
provides that the board of directors must consist of one or more individuals,
with the number specified or fixed in accordance with the articles of
incorporation or bylaws. The bylaws of both the Company and Superior Florida
state that the board of directors shall be not less
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<PAGE> 22
than three nor more than eight, as the board may, by resolution of a majority of
the entire board, from time to time determine.
Removal
The NYBCL provides that any or all of the directors may be removed
with or without cause by vote of the shareholders. In addition, the certificate
of incorporation or the specific provisions of the bylaws adopted by the
shareholders may provide for removal for cause by action of the board, except
in the case of any director elected by cumulative voting or by the holders of
the shares of any class or series, when so entitled by the provisions of the
certificate of incorporation. The FBCA provides that shareholders may remove
one or more directors with or without cause unless the articles of
incorporation provide that directors may be removed only for cause. The FBCA
further provides that a director generally may be removed only if the number of
votes cast to remove him exceed the number of votes cast not to remove him.
Neither the certificate of incorporation of the Company nor Superior Florida's
articles of incorporation contain any provisions with regard to the removal of
directors.
Vacancy
The NYBCL provides that vacancies occurring in the board for any
reason except the removal of directors without cause may be filled by vote of
the board, unless the certificate of incorporation or bylaws provide otherwise.
The FBCA provides that a vacancy on the board of directors generally may be
filled by an affirmative vote of a majority of the remaining directors or by
the shareholders, unless the articles of incorporation provide otherwise.
Neither the certificate of incorporation of the Company nor Superior Florida's
articles of incorporation contain any provisions with regard to vacancies on
the board of directors.
Ability to Grant Options to Employees and Directors
The NYBCL prohibits the issue of options and rights to purchase capital
stock of a corporation to directors, officers or employees of the corporation or
any subsidiary or affiliate as an incentive to service or continued service
unless authorized at a meeting of shareholders by the vote of a majority of the
votes cast at the meeting or authorized by and consistent with a plan adopted by
such vote of shareholders. The FBCA does not include any requirement for
obtaining shareholder approval for the issuance of such options or rights.
Fiduciary Duties of Directors
Under the NYBCL, directors owe a fiduciary duty to the corporation and
its shareholders and must perform their duties in good faith and with that
degree of care which an ordinarily prudent person in a like position would use
under similar circumstances. Directors must give reasonable attention to the
corporation's business. New York law presumes that, without evidence to the
contrary, in making a business decision, directors are acting in good faith and
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<PAGE> 23
exercising honest judgment. In taking action, directors may consider, among
other things, both the long-term and short-term interests of the corporation
and its shareholders. In addition, directors may consider the effects that the
corporation's actions may have in the short-term or in the long-term upon: (i)
the prospects for potential growth, development, productivity and profitability
of the corporation, (ii) the corporation's current employees, (iii) the
corporation's retired employees and other beneficiaries who are entitled to
receive retirement benefits, (iv) the corporation's customers and creditors,
and (v) the ability of the corporation to provide, as a going concern, goods,
services, employment opportunities and employment benefits to contribute to the
community in doing business. In performing his duties, a director shall be
entitled to rely upon information, opinions, reports or statements, including
financial statements and other financial data, in each case prepared and/or
presented by: (i) officers of the corporation, (ii) legal counsel, public
accountants and other professionals, and (iii) a committee of the corporation.
Under the FBCA, a director shall discharge his duties as a director,
including his duties as a member of a committee (a) in good faith; (b) with the
care an ordinarily prudent person in a like position would exercise under
similar circumstances; and (c) in a manner he reasonably believes to be in the
best interests of the corporation. In discharging his duties, a director is
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by: (a)
one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented; (b)
legal counsel, public accountants, or other persons as to matters the director
reasonably believes are within the person's professional or expert competence;
or (c) a committee of the board of directors of which he is not a member if the
director reasonably believes the committee merits confidence. A director is not
acting in good faith if he has knowledge concerning the matter in question that
makes reliance otherwise permitted unwarranted. In addition, the FBCA provides
that directors, in discharging their duties to the corporation may, in addition
to considering the effect of any corporate action on the shareholders and the
corporation, consider the social, economic, legal or other effects of the
corporate action on employees, suppliers and customers of the corporation or
its subsidiaries and the communities in which the corporation and its
subsidiaries operate.
Liability of Directors
Under the NYBCL, a corporation's certificate of incorporation may
eliminate or limit the personal liability of directors to the corporation or
its shareholders for damages in connection with any breach of duty in such
capacity, provided that no such provision may eliminate or limit: (i) the
liability of any director if a judgment or other final adjudication adverse to
him establishes that his acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of any law or that he personally
gained in fact a financial profit or other advantage to which he was not
legally entitled, (ii) liability which arises from injury suffered by persons
as a result of a declaration of a
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<PAGE> 24
dividend or other distribution, a purchase of the corporation's shares, a
distribution of assets after dissolution, the making of a loan, any of which is
effected in violation of the NYBCL or (iii) the liability of any director for
any act or omission prior to the adoption of a provision limiting or eliminating
such director's liability.
The FBCA generally provides that a director is not personally liable
for monetary damages to the corporation or any other person for any act or
omission as a director unless the director breached or failed to perform his
duties as a director and such breach or failure (1) constitutes a violation of
criminal law, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful, (2)
constitutes a transaction from which the director derived an improper personal
benefit, (3) results in an unlawful distribution, (4) in a derivative action or
an action by a shareholder, constitutes conscious disregard for the best
interests of the corporation or willful misconduct or (5) in a proceeding other
than a derivative action or an action by a shareholder, constitutes
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.
Neither the Company's certificate of incorporation nor Superior
Florida's articles of incorporation contain any provisions with regard to the
limitation of a directors' liabilities.
Indemnification of Directors and Officers
The NYBCL provides in general that a corporation may indemnify any
director or officer made, or threatened to be made, a party to an action or
proceeding (a "Proceeding") (other than one by or in the right of the
corporation to procure a judgment in its favor), whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
corporation served in any capacity at the request of the corporation, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney fees actually and necessarily incurred. In order to receive such
indemnification, the person must have acted in good faith, for a purpose which
he reasonably believed to be in, or in the case of service for any other
corporation or partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to the best interests of the corporation, and in
addition, in criminal actions or proceedings, such person had no reasonable
cause to believe that his conduct was unlawful. The NYBCL permits similar
indemnification in the case of actions by or in the right of the corporation,
provided that indemnification is not permitted in respect of (i) a threatened
action or a pending action which is settled or otherwise disposed of, or (ii)
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation, unless and only to the extent that the court in
which the action was brought, or if no action was brought, any court of
competent jurisdiction, determines upon application that, in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
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<PAGE> 25
indemnity for such portion of the settlement amount and expenses as such court
deems proper. In any case, the NYBCL provides that the indemnification
permitted under the NYBCL is not exclusive of any other rights to which a
director or officer seeking indemnification or advancement of expenses may be
entitled. No indemnification may be provided to a director or officer under the
NYBCL if a judgment or other final adjudication adverse to the director or
officer establishes that his acts were committed in bad faith or were the
result of active and deliberate dishonesty and were material to the cause of
action, or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
Under the FBCA, a corporation may generally indemnify its officers,
directors, employees and agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement of any proceedings (other than
derivative actions), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in derivative actions, except that indemnification may be made only
for (1) expenses (including attorneys' fees) and certain amounts paid in
settlement, and (2) in the event the person seeking indemnification has been
adjudicated liable, amounts deemed proper, fair and reasonable by the
appropriate court upon application thereto. The FBCA provides that to the
extent that such persons have been successful in defense of any proceeding,
they must be indemnified by the corporation against expenses actually and
reasonably incurred in connection therewith. Additionally, the FBCA provides
that, unless a corporation's articles of incorporation provide otherwise, if a
corporation does not so indemnify such persons, they may seek, and a court may
order, indemnification under certain circumstances even if the board of
directors or shareholders of the corporation have determined that the persons
are not entitled to indemnification.
Neither the Company's certificate of incorporation nor Superior
Florida's articles of incorporation contain any provisions with regard to the
indemnification of directors.
Voting Rights
Unless otherwise provided in the certificate of incorporation, the
NYBCL and the FBCA provide that every shareholder of record shall be entitled
at every meeting of shareholders to one vote for every share owned of record on
the record date for determining shareholders entitled to notice of and to vote
at the meeting of shareholders. Neither the certificate of incorporation of the
Company nor the articles of incorporation of Superior Florida contain any
provisions which alter this right.
Under the NYBCL, directors are elected by plurality of votes cast by
shareholders entitled to vote, unless otherwise required by the certificate of
incorporation. Whenever corporate action is to be taken by vote of
shareholders, it must be authorized by a majority of votes cast at
shareholders' meetings by
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<PAGE> 26
holders entitled to vote thereon, unless the NYBCL or the certificate of
incorporation states otherwise. Under the FBCA, directors are generally elected
by a plurality of the votes cast by the shareholders entitled to vote at a
shareholders' meeting at which a quorum is present, unless a greater number of
affirmative votes is required by the articles of incorporation. With respect to
matters other than the election of directors, unless a greater number of
affirmative votes is required by the FBCA or a Florida corporation's articles of
incorporation, if a quorum exists, action on any matter generally is approved by
the shareholders if the votes cast by the holders of the shares represented at
the meeting and entitled to vote on the matter favoring the action exceed the
votes cast opposing the action.
Neither the certificate of incorporation of the Company nor the
articles of incorporation of Superior Florida contain any special provisions
relating to the voting rights of the holders of common stock. However, both
the certificate of incorporation of the Company and articles of incorporation
of Superior Florida give the board of directors the power to create series of
preferred stock and to provide for voting rights for the holders of such
series. Such rights may include the right to more than one vote per share.
Quorum for Shareholder Meetings.
Under the FBCA, unless otherwise provided in a corporation's articles
of incorporation, a majority of shares entitled to vote on a matter constitutes
a quorum for a meeting of shareholders, but in no event may a quorum consist of
less than one-third of the shares entitled to vote on such matter. Under the
NYBCL, the statutory quorum is a majority of shareholders entitled to vote.
This may be decreased by the certificate of incorporation or bylaws, but not
below one-third of shareholders entitled to vote. Neither the certificate of
incorporation or bylaws of the Company nor the articles of incorporation or
bylaws of Superior Florida contain provisions which would modify the statutory
provisions.
Action by Written Consent of Shareholders.
The FBCA provides that unless otherwise provided in the articles of
incorporation, actions which would be required or permitted to be taken at an
annual or special meeting of shareholders may be taken by the written consent of
the holders of shares constituting not less than the minimum number of shares
that would be necessary to take such action at a meeting of shareholders. The
NYBCL provides that shareholder action may be taken by written consent of the
holders of all outstanding shares entitled to vote thereon or, if the
certificate of incorporation so permits, by the holders of outstanding shares
having not less than the minimum number of shares that would be necessary to
take such action at a meeting of shareholders. Neither the certificate of
incorporation of the Company nor the articles of incorporation of Superior
Florida contain any provision which would modify the statutory provisions.
Call of Special Meetings of Shareholders
The NYBCL permits special meetings of the shareholders to be called by
the board of directors and such persons who may be authorized to do so by the
certificate of incorporation or the bylaws. At any such special meeting, only
such business may be transacted which is related to the purpose or purposes set
forth in the written notice provided to shareholders. Under the FBCA, special
meetings
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of a Florida corporation's shareholders may be called by its board of directors,
by the persons authorized to do so in its articles of incorporation or bylaws,
by holders of not less than 10% of all votes entitled to be cast on any issue
proposed to be considered at the special meeting, unless a greater percentage
not to exceed 50% is required by the articles of incorporation.
The certificate of incorporation of the Company and the articles of
incorporation of Superior Florida provide that a special meeting of the
shareholders may be called by the Chairman of the Board or Directors, by the
President, or by the Board of Directors, and shall be called by the President
or the Secretary at the request in writing of a majority of the Directors.
Amendment to Charter Documents
Under the NYBCL, amendments or changes to the certificate of
incorporation may be authorized by vote of the board of directors, followed by
vote of the holders of a majority of all outstanding shares entitled to vote
thereon at a meeting of the shareholders. In addition, the holders of shares of
a class or series are entitled to vote and to vote as a class or series and the
amendment shall be authorized by vote of the holders of a majority of all
outstanding shares of the class or series when a proposed amendment would: (i)
exclude or limit such shareholders' right to vote on any matter, (ii) change
such shareholders' shares to reduce the par value, (iii) change such shares
into a different number of shares of the same class, or into the same or a
different number of shares of any one or more classes or any series thereof,
(iv) fix, change or abolish the designation of any authorized class, any of the
relative rights, preferences or limitations, including any provisions in
respect of any undeclared dividends, whether or not cumulative or accrued, or
the redemption of any shares, or any sinking fund for the redemption or
purchase of any shares or any preemptive rights to acquire shares or other
securities (v) provide that their shares may be converted into shares of any
other class or into shares of any other series of the same class, (vi) alter
the terms or conditions upon which their shares are convertible or change the
shares issuable upon conversion of their shares, if such action would adversely
affect such holder's rights or (vii) subordinate their rights, by authorizing
shares having preferences which would be in any respect superior to their
rights. For amendments involving mergers, see "Approval of Merger and Asset
Sales."
Under the FBCA, an amendment to a Florida corporation's articles of
incorporation must be approved by the corporation's shareholders, except that
certain immaterial amendments specified in the FBCA may be made by the board of
directors. Unless a specific section of the FBCA or a Florida corporation's
articles of incorporation require a greater vote, an amendment to a Florida
corporation's articles of incorporation generally must be approved by a
majority of the votes entitled to be cast on the amendment.
Neither the certificate of incorporation of the Company nor the
articles of incorporation of Superior Florida contain any provisions regarding
amendments to charter documents.
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Approval of Merger and Asset Sales
Under the NYBCL, the board of directors, upon adopting a plan of merger
or consolidation, must submit such plan to a vote of shareholders. Notice of the
meeting to adopt the plan and an outline of the plan must be given to each
shareholder of record, as of the record date, whether or not such shareholder is
entitled to vote. The plan must be adopted at the meeting of shareholders by
vote of the holders of two-thirds of all outstanding shares entitled to vote
thereon, unless the certificate of incorporation expressly provides for majority
vote. Notwithstanding any provision in the corporation's certificate of
incorporation, the holders of shares of a class or series of the corporation's
stock, shall be entitled to vote and to vote as a class if the plan contains any
provision entitling the holders of such shares to vote and vote as a class
thereon. In such case, in addition to the authorization of the merger or
consolidation by vote of the holders of two-thirds of all outstanding shares,
the merger or consolidation shall be authorized by a vote of the holders of a
majority of all outstanding shares of each such class or series. Notwithstanding
shareholder authorization, the board of directors may abandon the plan of merger
or consolidation at any time prior to the filing of the certificate of merger or
consolidation with the New York Secretary of State, but only pursuant to a
provision for such abandonment contained in the plan. No shareholder
authorization, from either the parent corporation or the subsidiary corporation
is required when a parent corporation merges any subsidiary corporation into
itself.
Under the NYBCL, a sale, lease, exchange or other disposition of all or
substantially all of the assets of the corporation, if not made in the usual or
regular course of business conducted by the corporation, shall be authorized
only by the following procedure: (i) the board of directors must authorize the
proposed sale, lease, exchange or other disposition and direct its submission to
a vote of shareholders, (ii) notice of meeting shall be given to each
shareholder of record, whether or not entitled to vote, and (iii) the
shareholders must approve such sale, lease, exchange or other disposition and
may fix, or may authorize the board to fix, any of the terms and conditions
thereof and the consideration to be received by the corporation therefor, by a
vote at a meeting of shareholders of the holders of two-thirds of all
outstanding shares entitled to vote thereon, unless the certificate of
incorporation expressly provides for majority vote. Notwithstanding shareholder
approval, the board may abandon the proposed sale, lease, exchange or other
disposition without further action by the shareholders, subject to the rights,
if any, of third parties under any contract.
Under the FBCA, after adopting a plan of merger, the board of
directors of each corporation party to the merger shall submit the plan of
merger for approval by its shareholders. For a plan of merger to be approved:
(a) the board of directors must recommend the plan of merger to the
shareholders, unless the board of directors determines that it should make no
recommendation because of conflict of interest or other special circumstances
and communicates the basis for its determination to the shareholders with the
plan, and (b) the shareholders entitled to vote must approve the plan by each
class entitled to vote on the plan by a majority of all the votes entitled to
be cast on the plan by that class,
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unless the FBCA, the articles of incorporation, or the board of directors
requires a greater vote or a vote by classes.
With regard to the sale of assets, the FBCA provides that a
corporation may sell, lease, exchange, or otherwise dispose of all, or
substantially all, of its property (with or without the good will), otherwise
than in the usual and regular course of business, on the terms and conditions
and for the consideration determined by the board of directors, if the board of
directors proposes and its shareholders of record approve the proposed
transaction by a majority of all the votes entitled to be cast on the
transaction, unless the FBCA, the articles of incorporation, or the board of
directors requires a greater vote or a vote by voting groups.
Neither the certificate of incorporation of the Company or articles of
incorporation of Superior Florida contain any provisions regarding shareholder
approvals of mergers and asset sales.
Rights of Appraisal
Under the NYBCL, a shareholder has a right to dissent to any plan of
merger or consolidation or any sale, lease, exchange or other disposition of
all or substantially all of the assets of the corporation, provided that this
right exists only when the shareholder was entitled to vote on the proposed
corporate action unless the NYBCL provides otherwise. In order to dissent, a
shareholder must file with the corporation, before the meeting of shareholders
at which the action is submitted to a vote, or at such meeting but before the
vote, written objection to the action. The objection shall include a notice of
his election to dissent, his name and residence address, the number and classes
of shares as to which he dissents and a demand for payment of the fair value of
his shares if the action is taken. Upon consummation of the corporate action,
the shareholder shall cease to have any of the rights of a shareholder except
the right to be paid the fair value of his shares.
Shareholders who properly dissent to any merger or consolidation under
the NYBCL also have the right to receive payment of the fair value of their
shares, if such shareholders were entitled to vote and did not assent to any
plan of merger or consolidation to which the corporation is a party, except
where such shareholders are (i) holders of shares of the parent corporation in
a merger of a parent corporation and a subsidiary corporation, (ii) holders of
shares of the parent corporation in a merger or consolidation of domestic and
foreign corporations, or (iii) holders of shares in a surviving corporation.
Notwithstanding the foregoing, shareholders of a surviving corporation do have
the right to receive payment for their shares if the merger or consolidation
alters or abolishes any preferential rights, redemption or sinking fund rights,
preemptive rights or excludes or limits the rights of such holders to vote on
any matter.
Furthermore, a shareholder has a right to receive payment of the fair
value of his shares in the case of any sale, lease, exchange or other
disposition of all or substantially all of the assets of a corporation which
requires
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<PAGE> 30
shareholder approval, provided that shareholders do not have the right
to receive such payment in a transaction wholly for cash where the
shareholders' approval thereof is conditioned upon the dissolution of the
corporation and the distribution of substantially all of the corporation's net
assets to the shareholders is made in accordance with their respective
interests within one year after the date of such transaction.
Under the FBCA, a shareholder of a Florida corporation, with certain
exceptions, has the right to dissent from, and obtain payment for the fair
value of his or her shares in the event of (1) a merger or consolidation to
which the corporation is a party, (2) a sale or exchange of all or
substantially all of the corporation's property other than in the usual and
ordinary course of business, (3) the approval of a control share acquisition,
(4) a statutory share exchange to which the corporation is a party as the
corporation whose shares will be acquired, (5) an amendment to the articles of
incorporation if the shareholder is entitled to vote on the amendment and the
amendment would adversely affect the shareholder and (6) any corporate action
taken to the extent that the articles of incorporation provide for dissenters'
rights with respect to such action. The FBCA provides that unless a
corporation's articles of incorporation provide otherwise, which Superior
Florida's articles of incorporation do not, a shareholder does not have
dissenters' rights with respect to a plan of merger, share exchange or proposed
sale or exchange of property if the shares held by the shareholder are either
registered on a national securities exchange, or designated as a national
market system on an interdealer quotation system by the National Association of
Securities Dealers, Inc., or held of record by 2,000 or more shareholders.
Anti-Takeover Provisions
Section 912 of the NYBCL applies to a broad range of business
combinations between a New York corporation and an interested shareholder. The
NYBCL defines a "business combination" to include mergers, consolidations,
sales, leases, exchanges of shares, mortgages, pledges, securities
reclassifications and other transactions. An "interested shareholder" is
defined as any person who (i) is the beneficial owner, directly or indirectly,
of twenty percent or more of the outstanding voting stock of a corporation or
(ii) is an affiliate or an associate of such corporation and at any time within
the five-year period immediately prior to the date in question was a beneficial
owner, directly or indirectly, of twenty percent or more of the then
outstanding voting stock of such corporation. The NYBCL prohibits a corporation
from engaging in a business combination with an interested shareholder for a
period of five years following such interested shareholder's stock acquisition
date except under limited circumstances, including when (i) such business
combination or the purchase of stock made by such interested shareholder on
such interested shareholder's stock acquisition date is approved by the board
of directors of such corporation prior to such interested shareholder's stock
acquisition date, (ii) such business combination is approved by the affirmative
vote of the holders of a majority of the outstanding voting stock not
beneficially owned by such interested shareholder or any affiliate or associate
of such interested shareholder at a meeting called for such purpose no
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<PAGE> 31
earlier than five years after such interested shareholder's stock acquisition
date.
Section 912 does not apply (i) to any business combination of a New
York corporation that does not have a class of voting stock registered with the
Securities and Exchange Commission pursuant to Section 12 of the Exchange Act
("Registered Voting Stock"), unless the certificate of incorporation provides
otherwise, or under certain circumstances, such as (ii) to any business
combination of a domestic corporation whose amendment certificate of
incorporation provides that Section 912 applies, which did not have a class of
Registered Voting Stock on the effective date of such amendment, and which is a
business combination with an interested shareholder (as defined therein) whose
stock acquisition date is prior to the effective date of such amendment, or
(iii) to any business combination of a domestic corporation the original
certificate of incorporation or an amended bylaws of which contains a provision
expressly electing not to be governed by Section 912, or (iv) to any business
combination of a domestic corporation with an interested shareholder of such
corporation who became an interested shareholder inadvertently. The
certificate of incorporation of the Company does not contain any such
provisions.
The FBCA contains an affiliated transaction statute that provides that
certain transactions involving a corporation and a shareholder owning 10% or
more of the corporation's voting shares (an "affiliated shareholder") must
generally be approved by the affirmative vote of the holders of two-thirds of
the voting shares other than those owned by the affiliated shareholder. The
actions covered by the statute include, with certain exceptions, (1) mergers
and consolidations to which the corporation and the affiliated shareholder are
parties, (2) sales or other dispositions of substantial amounts of the
corporation's assets to the affiliated shareholder, (3) issuances by the
corporation of substantial amounts of its securities to the affiliated
shareholder, (4) the adoption of any plan for the dissolution of the
corporation proposed by or pursuant to an arrangement with the affiliated
shareholder, (5) any reclassification of the corporation's securities which has
the effect of substantially increasing the percentage of the outstanding voting
shares of the corporation beneficially owned by the affiliated shareholder and
(6) the receipt by the affiliated shareholder of certain loans or other
financial assistance from the corporation. These special shareholder approval
requirements do not apply in any of the following circumstances: (a) if the
transaction was approved by a majority of the corporation's disinterested
shareholders, (b) if the corporation did not have more than 300 shareholders of
record at any time during the previous three years, (c) if the affiliated
shareholder has been the beneficial owner of at least 80% of the corporation's
outstanding voting shares for the past five years, (d) if the affiliated
shareholder is the beneficial owner of at least 90% of the corporation's
outstanding voting shares, exclusive of those acquired pursuant to a
transaction not approved by a majority of disinterested directors or (e) if the
consideration received by the shareholder in connection with the transaction
satisfies the "fair price" provisions of the statute. This section applies to
any Florida corporation unless the original articles of incorporation or an
amendment to the articles of incorporation or bylaws contain a provision
expressly electing not to be governed
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by this statute. Such an amendment to the articles of incorporation or bylaws
must be approved by the affirmative vote of the majority of disinterested
shareholders and is not effective until 18 months after approval. Superior
Florida's articles of incorporation and bylaws do not contain a provision
electing not to be governed by the statute.
In addition, the FBCA contains a control share acquisition statute
which provides that a person who acquires shares in an issuing public
corporation in excess of certain specified thresholds will generally not have
any voting rights with respect to such shares unless the voting rights are
approved by a majority of the shares entitled to vote, excluding interested
shares. This statute does not apply to acquisitions of shares of a corporation
if, prior to the pertinent acquisition of shares, the acquisition is approved
by the board of directors or the corporation's articles of incorporation or
bylaws provide that the corporation shall not be governed by the statute. This
statute also permits a corporation to adopt a provision in its articles of
incorporation or bylaws providing for the redemption by the corporation of such
acquired shares in certain circumstances. Unless otherwise provided in the
corporation's articles of incorporation or bylaws prior to the pertinent
acquisition of shares, in the event that such shares are accorded full voting
rights by the shareholders of the corporation and the acquiring shareholder
acquires a majority of the voting power of the corporation, all shareholders who
did not vote in favor of according voting rights to such acquired shares are
entitled to dissenters' rights to receive the fair value of their shares as
provided in the FBCA. Superior Florida's articles of incorporation and bylaws do
not contain any provisions with respect to this statute.
Rights of Inspection
Under the NYBCL, every shareholder of record, upon at least five days
written demand, shall have the right to examine in person or by agent or
attorney, during normal business hours, certain books and records, including the
corporation minutes of the proceedings of its shareholders, a record of
shareholders, balance sheets and profit and loss statements. The shareholder
must request the inspection for a purpose which is in the interest of the
corporation or reasonably related to his status as a shareholder.
Under the FBCA, a shareholder is entitled to inspect and copy the
articles of incorporation, bylaws, certain board and shareholder resolutions,
certain written communications to shareholders, a list of the names and
business addresses of the corporation's directors and officers, and the
corporation's most recent annual report, during regular business hours if the
shareholder gives at least five business days, prior written demand to the
corporation. In addition, a shareholder of a Florida corporation is entitled to
inspect and copy certain other books and records of the corporation during
regular business hours if the shareholder gives at least five business days'
prior written demand to the corporation and (1) the shareholder's demand is
made in good faith and for a proper purpose, (2) the demand describes with
particularity its purpose and the
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<PAGE> 33
records to be inspected or copied and (3) the requested records are directly
connected with such purpose. The FBCA also provides that a corporation may deny
certain demand for inspection if such demand was made for an improper purpose or
if the demanding shareholder has, within two years preceding such demand, sold
or offered for sale any list of shareholders of the corporation or any other
corporation, has aided or abetted any person in procuring a list of shareholders
for such purpose or has improperly used any information secured through any
prior examination of the records of the corporation or any other corporation.
Liquidation Rights
The holders of the Company's Common Stock and the Florida Common Stock
of Superior Florida have substantially the same rights on liquidation,
dissolution or winding up.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE
OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO
SUPERIOR UNIFORM GROUP, INC.
In the event that Proposal No. 2 is not approved by the shareholders,
and the Company, therefore, does not undergo the Reincorporation, then the
Board of Directors proposes and recommends to the shareholders for their
approval an amendment to the Company's present Certificate of Incorporation to
change the name of the Company to Superior Uniform Group, Inc. If Proposal No.
2 is approved and the Reincorporation is undertaken, then this Proposal No. 3
will be moot as the Company will undergo a name change as a result of its
merger into its wholly-owned Florida subsidiary, Superior Uniform Group, Inc.
The name Superior Surgical Mfg. Co., Inc. dates back to the Company's
founding in 1926 at which time the Company's business was 100% healthcare.
Since that time, and especially since going public in 1968, the Company has,
through a number of acquisitions, changed its direction. Because of the growth
in the Company's product lines and expansion into the employee identification
uniform business, the name Superior Surgical Mfg. Co., Inc. no longer describes
the Company. Accordingly, the Board of Directors believes that the name
Superior Uniform Group, Inc. will provide the Company with a corporate identity
that is more appropriate to its current business.
Under the New York Business Corporation Law, the change in the
Company's name must be made by amendment to the Certificate of Incorporation
and must be approved by the holders of a majority of the outstanding shares of
Company's Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE
COMPANY TO SUPERIOR UNIFORM GROUP, INC.
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<PAGE> 34
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has, subject to ratification by the Company's
shareholders, appointed Deloitte & Touche LLP, independent certified public
accountants, to audit the financial statements of the Company for the year
ending December 31, 1998; said firm has served as the Company's auditors for
more than 30 years. The appointment was made on the recommendation of the
Audit Committee.
The Company expects representatives of Deloitte & Touche LLP to be
present at and available to respond to appropriate questions at the Annual
Meeting. Representatives of Deloitte & Touche LLP will have the opportunity to
make a statement if they so desire.
Stockholder ratification of the Company's independent certified public
accountants is not required by the Company's By-Laws or otherwise. The Board
of Directors has elected to seek such ratification as a matter of good
corporate practice and unanimously recommends a vote "FOR" such ratification of
the appointment of Deloitte & Touche LLP, independent certified public
accountants, to serve as the Company's auditors for the year 1998. If the
shareholders do not ratify this appointment, the Audit Committee will consider
recommending to the Board of Directors the appointment of other auditors.
OTHER BUSINESS
Management of the Company does not know of any other business that may
be presented at the Meeting. If any matter not described herein should be
presented for stockholder action at the Meeting, the persons named in the
enclosed Proxy will vote the shares represented thereby in accordance with
their best judgment.
STOCKHOLDER PROPOSALS FOR
PRESENTATION AT THE 1999 ANNUAL MEETING
If a shareholder desires to present a proposal for action at the annual
meeting of shareholders to be held in 1999, and such proposal conforms to the
rules and regulations of the Securities and Exchange Commission and is in
accordance with other federal laws as well as the laws of the State of New
York, such proposal must be received by the Company by November 30, 1998, to be
included in the Company's Proxy Statement and proxy for such 1999 meeting.
By Order of the Board of Directors
ERROL PEGLER
Assistant Secretary
Dated: March 27, 1998
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<PAGE> 35
Exhibit "A"
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger (this "Plan of Merger") made as of the
6th day of February, 1998, by and between Superior Surgical Mfg. Co., Inc., a
New York corporation ("Superior New York"), and Superior Uniform Group, Inc., a
Florida corporation ("Superior Florida") (Superior New York and Superior
Florida being sometimes collectively referred to as the "Constituent
Corporations").
W I T N E S S E T H:
WHEREAS, Superior New York has authorized capital stock consisting of
fifty million (50,000,000) shares of common stock, par value $1.00 per share
("NY Common Stock"), of which one 7,977,652 shares are issued and outstanding
and none of which are held as treasury shares, and three hundred thousand
(300,000) shares of preferred stock, $1.00 per share, of which none are issued
and outstanding; and
WHEREAS, Superior Florida has authorized capital stock consisting of
fifty million (50,000,000) shares of common stock, par value $.001 per share
("Florida Common Stock"), of which one hundred (100) shares are issued and
outstanding, and three hundred thousand (300,000) shares of preferred stock,
$.001 per share, of which none are issued and outstanding; and
WHEREAS, the Board of Directors of each of the Constituent
Corporations deems it advisable and to the advantage and welfare of their
respective Constituent Corporations and shareholders that Superior New York
merge with and into Superior Florida, with Superior Florida being the surviving
corporation (the "Surviving Corporation"), pursuant to the provisions of
Section 907 of the Business Corporation Law of the State of New York (the
"NYBCL") and Section 607.1104 of the Florida Business Corporation Act (the
"FBCA");
NOW, THEREFORE, in consideration of the mutual agreements, and subject
to the consents and approvals, contained in this Plan of Merger, the
Constituent Corporations hereby agree as follows:
1. MERGER. At the Effective Time, as hereinafter defined, Superior New York
will be and it hereby is merged with and into Superior Florida (the "Merger").
This Plan of Merger constitutes a plan of merger pursuant to Section 907 of the
NYBCL and Section 607.1104 of the FBCA, to be carried out in the manner, on the
terms and subject to the conditions herein set forth.
2. EFFECTIVE TIME. This Plan of Merger will become effective immediately
upon the later filing of this Agreement and Plan of Merger with the Secretary
of State of New York in accordance with the NYBCL and the filing of the
articles of merger with the Secretary of State of Florida (the "Articles of
Merger"). Such date and time is herein referred to as the "Effective Time."
<PAGE> 36
3. SURVIVING CORPORATION. At the Effective Time, the separate existence of
Superior New York will cease, and Superior Florida, as the surviving
corporation of the Merger, will continue to exist under and be governed by the
laws of the State of Florida. The name of the Surviving Corporation will be
Superior Uniform Group, Inc.
4. RIGHTS AND LIABILITIES OF SUPERIOR FLORIDA. At and after the Effective
Time, as more fully set forth in Section 607.1106 of the FBCA and Section 907
of the NYBCL, the Surviving Corporation will succeed to and possess, without
further act or deed, all of the estate, rights, privileges, powers, and
franchises, both public and private, and all of the property, real, personal
and mixed, of the Constituent Corporations; all debts due either of the
Constituent Corporations will be vested in the Surviving Corporation; all
claims, demands, property, rights, privileges, powers and franchises and every
other interest of either of the Constituent Corporations will be the property
of the Surviving Corporation; the title to any real property of either of the
Constituent Corporations will not revert or be in any way impaired by reason of
the Merger, but will be vested in the Surviving Corporation; all rights of
creditors and all liens upon any property of either of the Constituent
Corporations will be preserved unimpaired, limited in lien to the property
affected by such lien at the Effective Time; and all debts, liabilities and
duties of the Constituent Corporations will thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by the Surviving
Corporation.
5. ARTICLES OF INCORPORATION. The articles of incorporation of Superior
Florida, as existing at the Effective Time, shall be the articles of
incorporation of the Surviving Corporation until altered, amended or repealed
as provided therein or as provided by law.
6. BYLAWS. The Bylaws of Superior Florida, as existing at the Effective
Time, will continue in force as the Bylaws of the Surviving Corporation until
altered, amended or repealed as provided therein or as provided by law.
7. DIRECTORS AND OFFICERS. The directors and officers of Superior New York
immediately prior to the Merger will be the directors and officers of the
Surviving Corporation, to hold office until their respective successors have
been elected and shall qualify, or as otherwise provided in the Bylaws of the
Surviving Corporation.
8. RETIREMENT OF OUTSTANDING FLORIDA COMMON STOCK. At the Effective Time,
each of the 100 shares of Florida Common Stock presently issued and outstanding
shall be retired, and no shares of Florida Common Stock or other securities of
Superior Florida shall be issued in respect thereof.
9. CONVERSION OF OUTSTANDING NY COMMON STOCK. At the Effective Time, each
outstanding share of NY Common Stock, and all rights in respect thereof, shall
by operation of law and without further action on the part of the former
holders, automatically be converted into and become the right to receive one
(1) share of Florida Common Stock, validly issued, fully paid and
non-assessable, and each certificate representing shares of NY Common Stock
shall for all purposes be deemed to evidence the ownership of the same number
of shares of Florida Common Stock as are set forth in the certificate. After
the Effective Date, each holder of an
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<PAGE> 37
outstanding certificate representing shares of NY Common Stock may, at such
shareholder's option, surrender the same to Superior Florida's registrar and
transfer agent for cancellation, and each such holder shall be entitled to
receive in exchange therefor a certificate evidencing the ownership of the same
number of shares of Florida Common Stock as are represented by Superior New
York's certificate surrendered to Superior Florida's registrar and transfer
agent.
10. STOCK OPTIONS, WARRANTS AND CONVERTIBLE DEBT. At the Effective Time,
each stock option, stock warrant, convertible debt instrument and other right
to subscribe for or purchase shares of NY Common Stock shall be converted into
a stock option, stock warrant, convertible instrument or other right to
subscribe for or purchase the same number of shares of Florida Common Stock and
each certificate, agreement, note or other document representing such stock
option, stock warrant, convertible debt instrument or other right to subscribe
for or purchase shares of NY Common Stock shall for all purposes be deemed to
evidence the ownership of a stock option, stock warrant, convertible debt
instrument or other right to subscribe for or purchase shares of Florida Common
Stock.
11. CONDITIONS TO CONSUMMATION OF THE MERGER. Consummation of the Merger is
subject to the satisfaction prior to the Effective Time of the following
conditions: (a) this Plan of Merger shall have been adopted and approved by the
affirmative vote of the holders of two-thirds of the shares of NY Common Stock
outstanding on the record date fixed for determining the shareholders of
Superior New York entitled to vote thereon; (b) Superior New York and Superior
Florida shall have received all consents, orders and approvals and satisfaction
of all other requirements prescribed by law that are necessary for the
consummation of the Merger, and (c) the American Stock Exchange shall have
authorized the listing, upon the filing of a Substitution Listing Application,
of the shares of Florida Common Stock to be issued and delivered in connection
with the Merger and such authorization shall be in full force and effect on
such date.
12. APPROVAL BY SHAREHOLDERS OF SUPERIOR FLORIDA. Section 607.1104 of the
FBCA does not require approval of the Merger by the shareholder(s) of Superior
Florida.
13. TERMINATION. This Plan of Merger may be terminated and the Merger
abandoned for any reason whatsoever, by mutual consent of the Boards of
Directors of the Constituent Corporations, at any time prior to the Effective
Time, notwithstanding adoption and approval of this Plan of Merger by the
shareholders of the Constituent Corporations.
14. AMENDMENT. This Plan of Merger may be amended at any time prior to the
Effective Time by mutual consent of the Boards of Directors of the Constituent
Corporations; provided, however, that no such amendment shall adversely affect
the rights of the shareholders of Superior New York or Superior Florida
subsequent to the adoption and approval of this Plan of Merger by the
shareholders of Superior New York or Superior Florida, as the case may be.
15. INSPECTION OF PLAN OF MERGER. Executed copies of this Plan of Merger
will be on file at the principal offices of Superior Florida at 10099 Seminole
Boulevard, Seminole, FL 33772. A copy of the Plan of Merger shall be furnished
by Superior Florida, on request and without cost, to any shareholder of either
Superior New York or Superior Florida.
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<PAGE> 38
16. REMEDIES. Any rights and remedies belonging to Superior New York or
Superior Florida and arising in connection with the actions contemplated by
this Plan of Merger shall be pursued solely against Superior New York or
Superior Florida, and not against their respective officers, directors or
employees. In the event that any officer, director or employee of Superior New
York or Superior Florida becomes involved in any capacity in any action,
proceeding or investigation in connection with the Merger or this Plan of
Merger, Superior New York and/or Superior Florida shall advance to such
person(s) all reasonable legal and other expenses incurred in connection
therewith and shall also indemnify such person(s) against any losses, claims,
damages or liabilities to which such person(s) may become subject in connection
with the Merger or this Plan of Merger, except to the extent that such
indemnification is prohibited by law.
IN WITNESS WHEREOF, the foregoing Plan of Merger, which was duly
adopted by the Board of Directors of each of the Constituent Corporations, has
been executed by the chairman of the board and secretary of each of the
Constituent Corporations on and as of the date first set forth above.
SUPERIOR SURGICAL MFG. CO., INC.
a New York Corporation
By: /s/ Gerald M. Benstock
--------------------------------------
Gerald M. Benstock,
Chairman of the Board
Attest: /s/ Errol Pegler
------------------------
Errol Pegler,
Assistant Secretary
SUPERIOR UNIFORM GROUP, INC.,
a Florida Corporation
By: /s/ Gerald M. Benstock
----------------------------------------
Gerald M. Benstock,
Chairman of the Board
Attest: /s/ Errol Pegler
-------------------------
Errol Pegler,
Assistant Secretary
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<PAGE> 39
Exhibit "B"
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SUPERIOR UNIFORM GROUP, INC.
Superior Uniform Group, Inc., a corporation organized and existing
under the General Corporation Law of the State of Florida (the "Corporation"),
does hereby certify:
I. The Corporation, pursuant to the provisions of Section
607.1007 of the Florida Business Corporation Act (the "Act"), hereby adopts
these Amended and Restated Articles of Incorporation which accurately restate
and integrate the original Articles of Incorporation filed on May 27, 1997 and
all amendments thereto that are in effect to date as permitted by Section
607.1007 of the Florida Statutes.
II. Each amendment made by these Amended and Restated Articles of
Incorporation (the "Restated Articles") has been effected in conformity with
the provisions of the Act, and the Restated Articles and each amendment thereto
were duly approved and adopted by the Corporation by written consent of the
Corporation's sole incorporator dated February 3, 1998.
III. The original Articles of Incorporation and all amendments and
supplements thereto are hereby superseded by the Restated Articles, which are
as follows:
1. NAME. The name of the corporation is Superior
Uniform Group, Inc. (the "Corporation").
2. CORPORATE ADDRESS AND REGISTERED OFFICE AND AGENT.
The principal office of the Corporation is located at 10099 Seminole Boulevard,
Seminole, Florida, 33772-2539. The address of the Corporation's registered
office in the State of Florida is 10099 Seminole Boulevard, Seminole, Florida,
33772-2539. The name of its registered agent at such address is Michael
Benstock.
3. PURPOSE. The nature of the business and the purpose
for which the Corporation is formed are to engage in any lawful act or activity
for which a corporation may be organized under the Act.
4. AUTHORIZED SHARES. The total number of shares of all
classes of capital stock which the Corporation shall have the authority to
issue is fifty million, three hundred thousand (50,300,000) shares, consisting
of (i) fifty million (50,000,000) shares of common stock, $.001 value per
share (the "Common Stock"), and (ii) three hundred thousand (300,000) shares of
preferred stock, $.001 value per share (the "Preferred Stock"). The
designation, powers, preferences and relative participating, optional or other
special rights and the qualifications, limitations and restrictions thereof in
respect of each class of capital stock of the Corporation are as follows:
A. PREFERRED STOCK. Subject to the limitation
that, if the stated dividends and amounts payable on liquidation are not paid
in full, all the preferred shares shall participate ratably in the
payment of dividends including accumulations, if any, in accordance with the
sum which would be payable on such shares if all dividends were declared and
paid in full, and in any
<PAGE> 40
distribution of assets, other than by way of dividends, in accordance with the
sums which would be payable on distribution if all sums payable were discharged
in full, the designations, relative rights, preferences and limitations of each
series of the preferred shares shall be fixed from time to time by the Board of
Directors of the Corporation. Without limiting the generality of the
foregoing, the Board of Directors shall have the power (a) to fix the number of
shares to be included in any series, (b) to fix the distinctive designation of
any particular series, (c) to fix the dividend rate payable per annum in
respect of any series and whether such dividend shall be cumulative or
noncumulative, (d) to fix the amounts per share which any series shall be
entitled to receive in case of the redemption thereof in case of the voluntary
liquidation, distribution or sale of assets, dissolution or winding-up of the
Corporation, (e) to fix the right, if any, of the holders of any series of
preferred shares to convert the same into any other class of shares and the
terms and conditions of such conversion, (f) to fix the terms of the sinking
fund or purchase account, if any, to be provided for any series, and (g) to fix
the voting rights, if any.
B. COMMON STOCK. Each common share shall be
entitled to one vote per share. The common stock shall be subject to such
prior and superior rights of the holders of the preferred shares of each series
as the Board of Directors may fix as hereinbefore provided.
5. NAME AND MAILING ADDRESS OF INCORPORATOR. The name
and mailing address of the incorporator is James C. Rowe, 100 2nd Avenue South,
Suite 400N, St. Petersburg, Florida 33701.
6. MISCELLANEOUS.
A. SHAREHOLDERS' MEETINGS. Unless otherwise
prescribed by law, special meetings of the shareholders, for any purpose or
purposes, may be called by the Chairman of the Board of Directors, by the
President, or by the Board of Directors, and shall be called by the President
or the Secretary at the request in writing of a majority of the Directors.
B. BYLAWS. Provided they are not inconsistent
with the law or this Certificate of Incorporation, the Bylaws of the
Corporation may contain provisions relating to the business of the Corporation,
transfer of its shares, declaration and payment of dividends, nomination of
directors, meetings of shareholders and directors and any other matters
relating to the business and affairs of the Corporation. The Board of
Directors from time to time, may adopt, amend, repeal or supplement the Bylaws;
provided, nevertheless, that the shareholders may, at a meeting, amend or
repeal any Bylaw so adopted by the affirmative vote of a majority of the shares
issued and outstanding and entitled to vote thereon; and provided further that
the Board of Directors shall take no action in conflict with any Bylaw so
adopted by the shareholders.
C. PREEMPTIVE RIGHTS. No holder of shares of
the Corporation of any class, now or hereafter authorized, shall have any
preferential or preemptive right to subscribe for, purchase or receive any
shares of the Corporation of any class, now or hereafter authorized, or any
options or warrants for such shares, or any rights to subscribe to or purchase
such shares, or any securities convertible into or exchangeable for such shares,
which may at any time be issued, sold, or offered for sale by the Corporation.
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<PAGE> 41
APPENDIX
SUPERIOR SURGICAL MFG. CO., INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints GERALD M. BENSTOCK, SAUL SCHECHTER and ALAN D.
SCHWARTZ, or any one of them, as proxies with full power of substitution, to
represent and to vote the shares of the undersigned at the Annual Meeting of
Shareholders to be held at 10 AM (local time) on Friday, May 8, 1998, at the
offices of the Company, 10099 Seminole Blvd., Seminole, Florida, and at any
adjournment or postponement thereof, as instructed on the reverse side.
(Continued on the reverse side.)
<PAGE> 42
The Board of Directors Recommends a Vote FOR Proposals 1, 2, 3 and 4.
WITHHOLD
FOR FOR ALL
PROPOSAL 1.
To elect seven Directors as set forth in the
Proxy Statement: Gerald M. Benstock, Alan D.
Schwartz, Michael Benstock, Saul Schechter,
Peter Benstock, Manuel Gaetan and Sidney Kirschner.
Instructions: To withhold authority to vote for any individual
nominee(s), write that nominee's name in the space provided
below.
- -----------------------------
- -----------------------------
- -----------------------------
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2. To approve the reincorporation of the
Company through a merger of the Company into its
wholly-owned subsidiary, Superior Uniform Group, Inc.,
a Florida corporation for the purpose of changing the
state of incorporation of the Company from New York
to Florida.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 3. To approve an amendment to the
Company's Certificate of Incorporation to change
the name of the Company to "Superior Uniform
Group, Inc." in the event Proposal 2 is not adopted
by the shareholders.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 4. To ratify the appointment of Deloitte
& Touche LLP as the Company's independent auditors
for the year 1998.
- --------------------------------------------------------------------------------
OTHER BUSINESS. The Proxies are authorized to vote in their discretion upon
such other business as may properly come before the meeting and any
adjournment or postponement thereof.
Please check this box if you plan to attend the Annual Meeting of Shareholders:
[ ]
<PAGE> 43
This proxy when properly executed will be voted in the manner directed herein
by the undersigned. If not otherwise specified, this proxy will be voted FOR
Proposal 1, 2, 3 and 4.
- --------------------------------
Signature(s)
Note: Please sign your name exactly as it appears at left. When signing as
attorney, executor, administrator, trustee, guardian or corporate officer,
please give your full title as such.
Please sign, date and return this proxy promptly in the enclosed business reply
envelope.
Date:
-------------------
