UNIROYAL TECHNOLOGY CORPORATION
Suite 900
Two North Tamiami Trail
Sarasota, Florida 34236
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Uniroyal Technology Corporation
will be held at the Hyatt Sarasota, 1000 Boulevard of the Arts, Sarasota,
Florida on February 6, 1998 at 11:00 a.m., Eastern Standard Time, for the
following purposes:
1. To elect eight directors for a term of one year, to be elected
by holders of common stock;
2. To consider and take action upon the ratification of the
selection of Deloitte & Touche LLP to serve as the independent
public accountants for the Company for the fiscal year ending
September 27, 1998; and
3. To transact such other business as may properly come before
the meeting and any adjournment of the meeting.
The Board of Directors has fixed the close of business on December 15,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting. A complete list of stockholders entitled to vote
at the meeting will be available for examination by any stockholder, for any
purpose germane to the meeting, on and after January 27, 1998, during ordinary
business hours at the office of the Secretary of the Company, Two North Tamiami
Trail, Suite 900, Sarasota, Florida.
WHETHER OR NOT YOU PLAN TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IN THE UNITED STATES. PROMPT
RETURN OF THE PROXY WILL ASSURE A QUORUM AND SAVE THE COMPANY UNNECESSARY
EXPENSE.
OLIVER J. JANNEY
Secretary
Dated: January 5, 1998
UNIROYAL TECHNOLOGY CORPORATION
Suite 900
Two North Tamiami Trail
Sarasota, Florida 34236
PROXY STATEMENT
This proxy statement and the accompanying form of proxy are being
furnished to the stockholders of Uniroyal Technology Corporation, a Delaware
corporation (the "Company"), on or about January 5, 1998 in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders to be held on February 6, 1998 at 10:00 a.m.,
Eastern Standard Time, at the Hyatt Sarasota, 1000 Boulevard of the Arts,
Sarasota, Florida, and any adjournment thereof. Any stockholder who executes and
delivers a proxy may revoke it at any time prior to its use by (i) giving
written notice of revocation to the Secretary of the Company, (ii) executing a
proxy bearing a later date, or (iii) appearing at the meeting, giving notice of
revocation of the proxy and voting in person.
Unless otherwise specified, all shares represented by effective proxies
will be voted by the proxy holder in favor of (i) the eight nominees as
directors; and (ii) ratification of the selection of Deloitte & Touche LLP to
serve as the independent public accountants for the Company for the fiscal year
ending September 27, 1998. The Board of Directors does not know of any other
business to be brought before the meeting, but, as to any such other business,
proxies will be voted upon any such matters in accordance with the judgment of
the person or persons acting under the proxies.
The cost of soliciting proxies will be borne by the Company. Original
solicitation of proxies by mail may be supplemented by telephone or telegram, by
personal solicitation by directors, officers or other regular employees of the
Company, who will not receive additional compensation for such services; the
cost of any such solicitation is expected to be nominal. Brokerage houses,
nominees, custodians and fiduciaries will be requested to forward soliciting
material to beneficial owners of stock held of record by them, and the Company,
upon request, will reimburse such persons for their reasonable out-of-pocket
expenses in doing so.
Only holders of record of outstanding shares of the Common Stock, $.01
par value per share ("Common Stock"), of the Company at the close of business on
December 15, 1997, are entitled to notice of, and to vote at the meeting. Each
stockholder is entitled to one vote for each share held on the record date.
There were 12,754,139 shares of Common Stock outstanding and entitled to vote on
December 15, 1997.
When a quorum is present at the meeting, the vote of the holders of a
majority of the stock having voting power present in person or by proxy shall
decide the action proposed in each matter listed in the accompanying Notice of
Annual Meeting of Stockholders except the election of directors, who are elected
by a plurality of all votes cast. Abstentions and broker "non-votes" will be
counted as present in determining whether the quorum requirement is satisfied. A
"non-vote" generally occurs when a nominee holding shares for a beneficial owner
does not vote on a proposal because the nominee has not received instructions as
to such proposal from the beneficial owner and does not have discretionary
powers as to such proposal. The aggregate number of votes entitled to be cast by
all stockholders present in person or represented by proxy at the meeting,
whether those stockholders vote "For" or "Against" or abstain from voting, will
be counted for purposes of determining whether a quorum is present. Abstentions
from voting by stockholders and broker "non-votes" are not counted for purposes
of determining whether a proposal has been approved.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of November 30, 1997, by (a) each person
known to the Company to be the beneficial owner of more than five percent of the
Common Stock, (b) all directors and nominees, (c) the Chief Executive Officer
and the other four most highly compensated executive officers of the Company and
(d) all directors and executive officers of the Company as a group:
At November 30, 1997
Name and Address of Common Stock
Beneficial Owner(1) Number of Percent of
Shares Owned (2) Class (3)
Pioneering Management Corp. 1,256,500 8.01%
60 State Street
Boston, MA 02109
Enforcement Counsel
for Superfund 1,054,832 6.73%
United States Environmental
Protection Agency
401 M Street, N.W.
Mail Code LE 134-5
Washington, D.C. 20460
Thomas J. Russell 1,834,820 (4) 11.70%
Howard R. Curd 1,052,692 (5) 6.71%
John A. Porter 662,695 (6) 4.23%
Robert L. Soran 474,874 (7) 3.03%
George J. Zulanas, Jr. 307,107 (8) 1.96%
Roland H. Meyer 183,374 (9) 1.17%
Oliver J. Janney 167,889 (10) 1.07%
Martin J. Gutfreund 123,935 (11) (12)
Richard D. Kimbel 74,751 (13) (12)
Curtis L. Mack 32,013 (14) (12)
Peter C.B. Bynoe 20,500 (15) (12)
All directors and executive
officers of the Company
as a group 4,934,650 (16) 31.47%
- --------
<FN>
(1) The address for all directors and executive officers is care of the
Company, Two North Tamiami Trail, Suite 900, Sarasota, Florida 34236.
(2) Information contained in the table reflects "beneficial ownership" as
defined in Rule 13d-3 under the Securities Exchange Act of 1934. This table is
based on information supplied by directors, officers and beneficial owners of
ten percent or more of the Common Stock and Forms 13D and 13G filed with the
Securities and Exchange Commission by beneficial owners of 5% or more of the
Common Stock. Unless otherwise indicated, the stockholders identified in this
table have sole voting and investment power with respect to the shares
beneficially owned by them.
(3) Applicable percentages are based on 15,679,950 shares of Common Stock
outstanding, which include shares issued and to be issued pursuant to the Plan
of Reorganization of certain predecessors of the Company, shares of Common Stock
issued as stock dividends on preferred stock, shares issued in the private
placement on May 31, 1994, shares issued pursuant to exercises of options
under the Company's stock option plans, shares issuable pursuant to currently
exercisable options under the Company's stock option plans, and shares issuable
pursuant to outstanding warrants.
(4)Includes 34,115 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1992 Non-Qualified Stock Option
Plan and 1995 Non-Qualified Stock Option Plan.
(5) Includes 389,508 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans, 76,300
shares of Common Stock issuable pursuant to warrants and 632 shares of Common
Stock in the Company's Savings Plan.
(6) Includes 32,695 shares of Common Stock
issuable pursuant to currently exercisable options granted under the Company's
1992 Non-Qualified Stock Option Plan and 1995 Non-Qualified Stock Option Plan.
(7) Includes 328,242 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans and 632
shares of Common Stock in the Company's Savings Plan. Does not include 65,000
shares of Common Stock held in trust for a family member nor 35,000 held by
family members residing in Mr. Soran's house, as to which Mr. Soran disclaims
beneficial ownership.
(8) Includes 183,796 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans and 3,311
shares of Common Stock in the Company's Savings Plan.
(9) Includes 47,374 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1992 Non-Qualified Stock Option
Plan and 1995 Non-Qualified Stock Option Plan.
(10) Includes 145,257 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans and 632
shares of Common Stock in the Company's Savings Plan.
(11) Includes 83,992 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans and 14,244
shares of Common Stock in the Company's Savings Plan.
(12) Less than one percent.
(13) Includes 40,603 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's stock option plans, 227 shares
of Common Stock in the Company's Savings Plan and 321 shares of Common Stock in
the Company's Employee Stock Ownership Plan.
(14) Consists of Common Stock issuable pursuant to currently exercisable
options granted under the Company's 1992 Non-Qualified Stock Option Plan and
1995 Non-Qualified Stock Option Plan.
(15) Includes 15,000 shares of Common Stock issuable pursuant to currently
exercisable options granted under the Company's 1995 Non-Qualified Stock Option
Plan.
(16) Includes 1,332,595 shares of Common Stock issuable pursuant to
currently exercisable options granted under the Company's stock option plans.
</FN>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors and persons who
own more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes of ownership with the
Securities and Exchange Commission (the "S.E.C.") and the Nasdaq National
Market. Officers, directors and greater than ten-percent beneficial owners are
required by S.E.C. regulations to furnish the Company with copies of all reports
that they file with the S.E.C. pursuant to Section 16(a) of the Exchange Act.
Based solely on a review of the copies of such forms furnished to the Company,
the Company believes that during fiscal 1997 its officers, directors and greater
than ten-percent beneficial owners complied with all applicable Section 16(a)
filing requirements.
ELECTION OF DIRECTORS
Nominees for Director
====================================================================================================================
NAME AGE POSITION DIRECTOR SINCE
====================================================================================================================
Peter C.B. Bynoe 46 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Howard R. Curd 58 Chairman of the Board, Chief 1992
Executive Officer and Director
- --------------------------------------------------------------------------------------------------------------------
Richard D. Kimbel 53 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Curtis L. Mack 55 Director 1992
- --------------------------------------------------------------------------------------------------------------------
Roland H. Meyer 70 Director 1992
- --------------------------------------------------------------------------------------------------------------------
John A. Porter 54 Director 1994
- --------------------------------------------------------------------------------------------------------------------
Thomas J. Russell 66 Director 1994
- --------------------------------------------------------------------------------------------------------------------
Robert L. Soran 54 President, Chief Operating Officer 1993
and Director
- --------------------------------------------------------------------------------------------------------------------
Peter C.B. Bynoe is Chairman of the Audit Committee and a member of the
Executive Committee of the Board of Directors. Mr. Bynoe is Chairman and Chief
Executive Officer of Telemat Ltd., a project management and financial services
consulting firm he founded. He is also a partner in the Chicago law firm of
Rudnick & Wolfe. Mr. Bynoe also formerly served as the Executive Director of the
Illinois Sports Facilities Authority, a joint venture of the City of Chicago and
the State of Illinois created to build a new Comiskey Park for the Chicago White
Sox. Mr. Bynoe is also a director of Jacor Communications, which owns
approximately 170 radio stations across the United States. Mr. Bynoe was
formerly the co-owner and Managing General Partner of the National Basketball
Association's Denver Nuggets. Mr. Bynoe is also an Overseer of Harvard
University.
Howard R. Curd was appointed Chief Executive Officer of the Company as of
September 21, 1992. Mr. Curd is also a member of the Executive Committee of the
Board of Directors. Mr. Curd was Chief Executive Officer, President (from
September 1991), Chairman of the Board and a director of The Jesup Group, Inc.,
the parent of certain predecessors of the Company, from 1981 until March 1993.
He is also a director of Emcore Corporation, a U.S.-based international compound
semiconductor equipment and material manufacturer.
Richard D.Kimbel is a member of the Audit, Compensation, Trust Funds and
Executive Committees of the Board of Directors. Mr. Kimbel was employed as an
engineer by certain predecessors of the Company and the Company from 1962 until
June 1994; he served as Manager of Human Resources for the Ensolite and Uniroyal
Adhesives and Sealants divisions of the Company from June 1994 until August
1997. He is currently a special projects consultant to the Company. From 1983 to
1986 and from 1989 to June 1994, Mr. Kimbel was President of the United Rubber
Workers, Local 65. Mr. Kimbel also served as an executive board officer of the
United Rubber Workers International Union from 1984 to 1987.
Curtis L Mack is Chairman of the Trust Funds Committee and a member of the
Executive Committee of the Board of Directors. Mr. Mack is an attorney
specializing in labor law. Mr. Mack is currently a partner in Mack, Haygood &
McLean, a law firm based in Atlanta, Georgia. Mr. Mack was formerly a partner in
Mack & Bernstein, a law firm based in Atlanta, Georgia, from 1983 to 1994. Mr.
Mack taught labor and employment law at the University of Florida Law School in
1973-1974; he was General Counsel of the Florida Public Employees Relations
Commission from 1974 to 1975, and he was Chairman of the Agency from 1975 to
1976; from 1976 to 1981 he was Regional Director of the National Labor Relation
Board in Atlanta, Georgia. Presently Mr. Mack is an adjunct professor at the
University of Michigan Law School, and also serves on the Advisory Board to the
School of Social Science at Michigan State University. Mr. Mack has served as
Special Assistant Attorney General for the State of Georgia since 1989 and as
Chairman of the Human Relations Commission of the City of Atlanta since 1989.
Roland H. Meyer is Chairman of the Compensation Committee and the Option
Committee and a member of the Executive Committee of the Board of Directors. Mr.
Meyer was elected Vice Chairman of American National Can Company, a leading
manufacturer of metal, glass and plastic packaging products, in 1987. He was
elected Chief Operating Officer of American National Can in 1988 and President
in 1989. Mr. Meyer served as President and Chief Operating Officer of American
National Can until his retirement in June 1992. Mr. Meyer is currently a
director of American National Can and is a member of American National Can's
Executive Committee. Mr. Meyer also served for various periods as a director of
certain subsidiaries of American National Can. Mr. Meyer is a director and Vice
Chairman of First Commercial Bank of Tampa.
John A. Porter is a member of the Audit and Executive Committees of the
Board of Directors. Mr. Porter is a director of Worldcom, Inc., a major long
distance telephone carrier. He was Chairman of the Board of Directors of LDDS
Communications, Inc. ("LDDS") from 1988 until its merger with Metromedia
Communications in 1993 and was Vice Chairman of the Board from 1993 to 1997. He
served as President and Chief Executive Officer of Telephone Management
Corporation from 1987 until it was acquired by LDDS in August 1988. Mr. Porter
also serves as Chairman of the Board of Directors and Chief Executive Officer of
Phillips & Brooks/Gladwin, Inc., a manufacturer of pay telephone enclosures and
equipment; a director of Intelligent Electronics Inc., a distributor of computer
products; and Chairman of the Board of Directors and Chief Executive Officer of
Industrial Electric Manufacturing Inc. Mr. Porter is the President and sole
shareholder of PM Restaurant Group, Inc., which filed a petition under Chapter
11 of the U.S. Bankruptcy Code in March 1995.
Thomas J. Russell is a member of the Compensation, Option, Trust Funds and
Executive Committees of the Board of Directors. Dr. Russell currently serves as
a director of Adidas AG, a German-based international sporting goods
manufacturer; and as a director and Chairman of the Board of Emcore Corporation,
a U.S.-based international compound semiconductor equipment and material
manufacturer. He founded Bio/Dynamics, Inc. in 1961 and managed the company
until its acquisition by IMS International, Inc. in 1973, following which he
served as president of that company's Life Sciences Division. From 1984 he
served as a director and subsequently as chairman of IMS until its acquisition
by Dunn & Bradstreet in 1988. From 1988 to 1992 he served as chairman of Applied
Bioscience International, Inc., and served as a director of that company until
1996.
Robert L. Soran was elected President and Chief Operating Officer of the
Company as of September 21, 1992. Mr. Soran is also a member of the Executive
Committee of the Board of Directors. Mr. Soran was President and Chief Executive
Officer of Tropicana Products Inc., a fruit beverage processor from 1986 until
September 1991.
The Board of Directors held eight meetings during fiscal 1997. The
average attendance by directors at these meetings was 94%, and all incumbent
nominees attended at least 75% of the Board and committee meetings that they
were scheduled to attend.
Among the committees of the Board of Directors are an Audit Committee,
a Compensation Committee, an Executive Committee, an Option Committee and a
Trust Funds Committee. The Board of Directors does not have a Nominating
Committee.
The Audit Committee recommends to the Board the selection of
independent accountants to audit the annual financial statements of the Company,
reviews the annual financial statements and meets with the Company's Chief
Financial Officer and independent accountants to review the scope and results of
the audit of the financial statements and other matters regarding the Company's
accounting, financial reporting and internal control systems. During fiscal 1997
the Audit Committee met twice. The members of the committee are Messrs. Bynoe
(Chairman), Kimbel and Porter.
The Compensation Committee reviews management's recommendations with
respect to salary and incentive compensation of executive officers and other key
employees, as well as the Company's benefit plans and arrangements other than
Stock Option Plans, and makes recommendations to the Board with respect to such
plans. During fiscal 1997 the Compensation Committee met once. The members of
the Compensation Committee are Messrs.
Meyer (Chairman), Kimbel and Russell.
The Option Committee administers all of the stock option plans of the
Company. The members of the Option Committee are Messrs. Meyer (Chairman)
and Russell. The Option Committee met twice during fiscal 1997.
The Trust Funds Committee reviews the Company's handling of trust funds
under its employee benefits plans. During fiscal 1997 the Trust Funds Committee
did not meet. The members of the Trust Funds Committee are Messrs. Mack
(Chairman), Kimbel and Russell.
Compensation of Directors
Each director who is not an officer of the Company receives an annual
fee (the "Annual Retainer Fee") of $18,000, plus $1,000 for each meeting of the
Board of Directors attended, $2,500 per annum for service on a committee (except
the chairman of a committee, who receives $3,000 per annum) and $500 to $1,000
for each committee meeting attended, depending upon whether the committee
meeting is held in conjunction with a meeting of the Board of Directors,
independent of a meeting of the Board of Directors or by teleconference. Each
director receives reimbursement of his expenses incurred in attending each
meeting of the Board of Directors or of a committee.
Directors who are not officers of the Company may elect to apply up to
the entire amount of their Annual Retainer Fees and committee retainer fees in
exchange for options to purchase Common Stock pursuant to the 1992 Non-Qualified
Stock Option Plan (the "1992 Non-Qualified Plan"). The 1992 Non-Qualified Plan
provides that Common Stock underlying each option issued pursuant to such Plan
may be purchased for 100% of the market price of the Common Stock on the date of
grant. Although the amount of the Annual Retainer Fee is initially paid for the
option, such amount also constitutes 50% of the consideration payable for the
underlying Common Stock. When the Director exercises the option, the additional
50% of the purchase price of the Common Stock must be paid in cash by the
Director. If the Director does not timely exercise the option to purchase the
Common Stock, the Annual Retainer Fee applied to acquire the option will be
forfeited by the Director. In addition, each director of the Company has
received options to purchase shares of Common Stock under the 1995 Non-Qualified
Stock Option Plan. No director who is not an officer of the Company may receive
options to purchase more than an aggregate of 10,000 shares of Common Stock in
any calendar year under all of the Company's Stock Option Plans.
Compensation Committee Interlocks and Insider Participation
Mr. Kimbel, who serves as a member of the Compensation Committee, has
been employed by the Company and certain of its predecessor companies since
1962. Mr. Kimbel was employed as an engineer by certain of the Predecessor
Companies and the Company from 1962 until June 1994, when he became Manager of
Human Resources for the Ensolite and Uniroyal Adhesives and Sealants divisions
of the Company; he is currently a consultant to the Company on special projects.
No executive officer of the Company served on the board of directors or
compensation committee of any entity which has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.
Transaction with Emcore Corporation
Through a technology license dated as of September 29, 1997, the
Company has acquired from Emcore Corporation ("Emcore") certain technology for
the manufacture of epitaxial wafers used in high brightness light emitting
diodes (LEDs) for lamps and display devices for license fees aggregating up to
approximately $5 million during fiscal 1998. A wholly owned subsidiary of the
Company expects to enter into a joint venture agreement with Emcore, whereby a
joint venture, to be managed by the subsidiary of the Company, will purchase
machines from Emcore and will sell and eventually manufacture epitaxial wafers,
lamps and display devices. Thomas J. Russell, the Chairman of the Board of
Directors of Emcore is a director and major stockholder of the Company, and
Howard R. Curd, the Chairman of the Board of Directors of the Company, is a
director of Emcore.
Executive Officers of the Company
Officers of the Company are appointed to serve until the meeting of the
Board of Directors following the next annual meeting of stockholders or until
their respective successors have been duly elected and qualified. Any officer of
the Company may be removed, pursuant to the Company's By-Laws, with or without
cause, by a vote of a majority of the entire Board of Directors. Any officer of
the Company may resign at any time upon notice to the Company. The following
table sets forth the name, age and position of each executive officer of the
Company:
================================================================================
NAME AGE POSITION
================================================================================
Howard R. Curd 58 Chairman of the Board of Directors and
Chief Executive Officer
- --------------------------------------------------------------------------------
Robert L. Soran 54 Director, President and Chief Operating
Officer
- --------------------------------------------------------------------------------
George J. Zulanas, Jr. 53 Vice President, Chief Financial Officer
and Treasurer
- --------------------------------------------------------------------------------
Oliver J. Janney 51 Vice President, General Counsel and
Secretary
- --------------------------------------------------------------------------------
Martin J. Gutfreund 56 Vice President, Human Resources and
n Administration
- --------------------------------------------------------------------------------
The business experience of Messrs. Curd and Soran is described above
under "Election of Directors - Nominees for Director".
Messrs, Zulanas, Janney and Gutfreund were elected to the positions set
forth above as of September 21, 1992.
COMPENSATION OF EXECUTIVE OFFICERS
Report of the Compensation Committee
Role of the Compensation Committee
As was earlier described in the section on committees of the Board of
Directors, the Compensation Committee is responsible for administering the
compensation program for the executive officers of the Company.
Compensation Philosophy
The Company's compensation philosophy with respect to the compensation
of the Company's executive officers consists of the following core principles:
o Base salary should be competitive in order to attract and retain
well- qualified executives.
o Incentive compensation should be directly related to achieving
specified levels of corporate financial performance. A
significant part of the executive officers' compensation should
be at risk, based upon the success of the Company.
o Long-term stock ownership of the Company's Common Stock by the
Company's executive officers creates a valuable link between the
Company's management and stockholders. Stock ownership gives
management strong incentives to properly balance the need for
short-term profits with long-term goals and objectives and to
develop strategies that build and sustain stockholder returns.
Executive Compensation Program
The Company's executive compensation program contains three components
which are intended to reflect the Company's compensation philosophy.
Base Salary. Base salary and adjustments to base salary are set by
employment agreements with Messrs Curd, Soran, Zulanas and Janney. The base
salaries for executive officers are targeted at the upper quartiles of the
competitive market. For this purpose, the Compensation Committee reviews and
considers the salary ranges of executive officers in comparable positions at
companies comparable to the Company in various industries. The Compensation
Committee's practice is to review the base salary of each executive officer
annually, at which time the executive officer's base salary may be increased
based upon the executive officer's individual performance and contributions to
the Company.
Annual Bonus. The Company's executive officers, as well as a number of
other key employees of the Company, are eligible for an annual cash bonus
pursuant to the Company's Management Incentive Plan (the "MIP"). Target annual
bonus amounts for the executive officers are established at the beginning of the
fiscal year by the Compensation Committee. For this purpose, the Compensation
Committee reviews and considers bonus amounts awarded to officers of companies
in comparable positions in various industries comparable in size to the Company
and also considers Company performance and the achievement of each executive
officer in his area of responsibility and the resulting contribution to overall
corporate performance. Total payments into the MIP Plan for all participants,
including executive officers, were $821,000 for fiscal 1993, approximately
$515,000 for fiscal 1994, approximately $1,200,000 for fiscal 1995,
approximately $687,000 for fiscal 1996 and approximately $1,680,000 for fiscal
1997.
Long Term Incentives. The executive officers of the Company and 76
other members of management and other key employees have been granted stock
options pursuant to the Company's 1992 Stock Option Plan (the "1992 Stock Option
Plan"). In addition, 136 members of management and other key employees have been
granted options under the Company's 1994 Stock Option Plan (the "1994 Stock
Option Plan"). The 1992 Stock Option Plan and 1994 Stock Option Plan are
intended to provide opportunities for stock ownership by management and other
key employees, which will increase their proprietary interest in the Company
and, consequently, their identification with the interests of the stockholders
of the Company. In addition, the executive officers have purchased stock on
their own as a demonstration of their commitment to the business. Stock options
granted under the 1992 and 1994 Stock Option Plans have exercise prices equal to
the fair market value of the Company's Common Stock on the dates of grant. The
stock options have a ten-year term, except certain stock options granted for
three-year terms. A deferred compensation plan was instituted for the executive
officers in fiscal 1995; this improves the Company's short-term cash flow. A
split-dollar life insurance plan was also instituted, to facilitate executive
officers' saving for retirement.
Internal Revenue Code Section 162(m). Section 162(m) of the Internal
Revenue Code of 1986, as amended, which became effective in 1994, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's chief executive officer and the four other most highly
compensated executive officers. Certain exceptions are provided for
non-discretionary, performance-related compensation. The Compensation Committee
considers it unlikely that the compensation level of any executive officer in
1998 would exceed the limit under Section 162(m). The Compensation Committee
will review the effects of Section 162(m), from time to time, as it reviews
changes in the design of compensation plans, to the extent it deems appropriate.
Chief Executive Officer's Performance
The Compensation Committee has reviewed the compensation of the Chief
Executive Officer and has found the level appropriate in comparison of persons
holding similar positions in comparable companies and in light of favorable
developments at the Company during fiscal 1997, including the following:
continued strengthening of the Company's key operating margins, implementation
of a substantial cost reduction program at the Company's corporate headquarters,
completion of the redemption of the Company's preferred stock to halt potential
dilution of the Company's Common Stock from stock dividends, negotiation of the
sale of substantially all of the assets of the Company's automotive coated
fabrics business on terms highly favorable to the Company to enhance shareholder
value, acquisitions of three businesses to enhance the acrylics and adhesives
businesses of the Company and completion of the relocation from the plant
formerly leased by the Company in Mishawaka, Indiana to a refurbished plant in
South Bend, Indiana, resulting in the projected elimination of a substantial
excess facility charge. All of these developments have contributed to an
increase in the price of the Company's stock by 42% during the 1997 fiscal year.
ROLAND H. MEYER, CHAIRMAN
RICHARD D. KIMBEL
THOMAS J. RUSSELL
Summary Compensation Table
The following table sets forth the cash and other compensation paid by
the Company in respect of the fiscal year ended September 28, 1997, to the Chief
Executive Officer and the other four most highly compensated officers of the
Company. Certain of the executive officers of the Company also received certain
other compensation, including automobile allowances. The amount of such other
compensation received by each of these officers was less than the lesser of
$50,000 or 10% of his respective cash compensation as set forth in the Salary
and Bonus columns of this table.
-------------------------------------------------------------------------------------=========================
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------------------------------------------=========================
=================================== ============= ================= ================ ========================
Name and Principal Position Securities Underlying
Fiscal Year Salary Bonus Options
($) ($) (#)
=================================== ============= ================= ================ ========================
=================================== ------------- ----------------- ---------------- ========================
Howard R. Curd 1997 538,805 301,165 81,755
Chairman of the Board and Chief 1996 523,640 147,279 10,000
Executive Officer 1995 508,659 189,406 79,053
=================================== ------------- ----------------- ---------------- ========================
Robert L. Soran 1997 442,712 247,454 66,275
President & Chief 1996 430,107 117,208 10,000
Operating Officer 1995 418,322 155,813 63,242
=================================== ------------- ----------------- ---------------- ========================
George J. Zulanas, Jr 1997 224,158 125,293 46,010
Vice President, 1996 217,776 58,393 0
Chief Financial Officer & 1995 211,809 75,186 47,432
Treasurer
=================================== ------------- ----------------- ---------------- ========================
Oliver J. Janney 1997 219,314 122,585 30,530
Vice President, 1996 213,141 59,612 0
General Counsel & 1995 207,043 76,574 31,621
Secretary
=================================== ============= ================= ================ ========================
Martin J. Gutfreund 1997 120,000 67,074 0
Vice President, 1996 120,000 33,751 0
Human Resources and 1995 139,689 44,696 15,811
Administration
=================================== ============= ================= ================ ========================
The Company has a salary administration program and the MIP for certain
management employees. The Board of Directors will consider any changes in
compensation for executive officers, including changes to the salary
administration program and the MIP, except for adjustments required pursuant to
employment agreements.
Compensation Pursuant to Other Programs; Stock Option Plan
In addition to the salary administration program and MIP, in order to
retain and attract quality management, the Company maintains a compensation
program that includes stock option plans and benefit programs such as disability
and health insurance and death benefits. Stock options for key employees are
granted by the Option Committee, and the Compensation Committee reviews the
other benefit programs. The Option Committee has delegated to the Vice
President, Human Resources and Administration the authority to grant limited
stock options to key employees other than executive officers following written
approval by the Chief Executive Officer and the Chief Operating Officer of the
Company.
The options granted in the last fiscal year to the Chief Executive
Officer and the four most highly compensated executive officers of the Company
other than the Chief Executive Officer are set forth in the following table:
OPTION GRANTS IN LAST FISCAL YEAR
====================================================================================================================================
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Term
Individual Grants
====================================================================================================================================
============================== =============== ======================= ============== ============== ================= =============
Number of
Securities % of Total Options
Underlying Granted to Employees Exercise
Options in Fiscal Year Price Expiration 5% 10%
Name Granted ($/Share) Date ($) ($)
============================== =============== ======================= ============== ============== ================= =============
============================== --------------- ----------------------- -------------- -------------- ----------------- =============
Howard R. Curd 5,000 2% $2.625 4/27/00 2,069 4,344
76,755 29% $2.875 6/03/07 138,779 351,692
============================== --------------- ----------------------- -------------- -------------- ----------------- =============
Robert L. Soran 5,000 2% $2.625 4/27/00 2,069 4,344
61,275 23% $2.875 6/03/07 110,790 280,763
============================== --------------- ----------------------- -------------- -------------- ----------------- =============
George J. Zulanas, Jr. 46,010 17% $2.875 6/03/07 83,189 210,818
============================== --------------- ----------------------- -------------- -------------- ----------------- =============
Oliver J. Janney 30,530 11% $2.875 6/03/07 55,200 139,889
============================= =============== ======================= ============== ============== ================= =============
Martin J. Gutfreund 0 --- --- --- --- ---
============================== =============== ======================= ============== ============== ================= =============
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR END OPTION VALUES
============================ =================================== ================================================
Number of Securities Underlying Value of Unexercised In-the-Money Options at
Unexercised Options at September September 28,19971
28, 1997 ($)
============================ =================================== ================================================
============================ =================================== ================================================
Name Exercisable/Unexercisable Exercisable/Unexercisable
============================ =================================== ================================================
============================ ----------------------------------- ================================================
Howard R. Curd 389,508/76,755 390,864/119,930
============================ ----------------------------------- ================================================
Robert L. Soran 328,242/61,275 329,788/95,742
============================ ----------------------------------- ================================================
George J. Zulanas, Jr. 183,796/46,010 184,792/71,891
============================ ----------------------------------- ================================================
Oliver J. Janney 145,257/30,530 144,084/47,703
============================ =================================== ================================================
Martin J. Gutfreund 83,992/0 83,008/0
============================ =================================== ================================================
No options were exercised by any executive officer during the fiscal year ended
September 28, 1997.
CERTAIN TRANSACTIONS
Agreements with Executives
Mr. Curd, Chairman of the Board and Chief Executive Officer of the
Company, is employed pursuant to an agreement which was amended and restated as
of April 25, 1995. The agreement provides for a base salary of $480,300. Mr.
Curd's base salary is subject to adjustment annually during the term of the
agreement based on changes in the U.S. Consumer Price Index for all Urban
Consumers, U.S. City Average (the "CPI"). Pursuant to this provision, Mr. Curd's
base salary was increased by 2.19%, effective September 1, 1997. Mr. Curd is
also entitled to receive a bonus pursuant to the MIP at the end of each fiscal
year. Mr. Curd's employment agreement provides for a three-year base term
subject to automatic one-year extensions on each anniversary date of the
agreement unless such agreement is terminated by either party. In addition, Mr.
Curd is entitled to receive the base salary that he would have received for the
balance of the term of the agreement plus an amount equal to two years' salary
as severance upon termination of his employment by the Company.
Mr. Soran, President and Chief Operating Officer of the Company, is
employed pursuant to an agreement which was amended and restated as of April 25,
1995. The agreement is for a two-year term subject to automatic annual one-year
extensions on each anniversary date of the agreement unless such agreement is
terminated by either party. Mr. Soran's employment agreement provides for a base
salary of $395,000. Mr. Soran's base salary is subject to adjustment annually
during the term of the agreement based on changes in the CPI. Pursuant to this
provision, Mr. Soran's base salary was increased by 2.19%, effective September
1, 1997. Mr. Soran is also entitled to receive a bonus pursuant to the MIP at
the end of each fiscal year. In addition, Mr. Soran is entitled to receive the
base salary that he would have received for the balance of the term of the
agreement plus an amount equal to one year's salary as severance upon
termination of his employment by the Company.
Mr. Zulanas, Vice President, Treasurer and Chief Financial Officer of
the Company, is employed pursuant to an agreement which was amended and restated
as of April 25, 1995. The agreement is for a two-year term subject to annual
one-year automatic extensions on each anniversary date of the agreement unless
such agreement is terminated by either party. Mr. Zulanas' employment agreement
provides for a base salary of $200,000. Mr. Zulanas' base salary is subject to
adjustment annually during the term of the agreement based on changes in the
CPI. Pursuant to this provision, Mr. Zulanas' base salary was increased by
2.19%, effective September 1, 1997. Mr. Zulanas is also entitled to receive a
bonus pursuant to the MIP at the end of each fiscal year, as determined by the
Board of Directors. In addition, Mr. Zulanas is entitled to receive the base
salary that he would have received for the balance of the term of the agreement
plus an amount equal to one year's salary as severance upon termination of his
employment by the Company.
Mr. Janney, Vice President, Secretary and General Counsel of the
Company, is employed pursuant to an agreement which was amended and restated as
of April 25, 1995. The agreement provides for a base salary of $195,500. Mr.
Janney's base salary is subject to adjustment annually during the term of the
agreement based on changes in the CPI. Pursuant to this provision, Mr. Janney's
base salary was increased by 2.19%, effective September 1, 1997. Mr. Janney is
also entitled to receive a bonus pursuant to the MIP at the end of each fiscal
year. Mr. Janney's employment agreement provides for a two-year base term
subject to automatic one-year extensions on each anniversary date of the
agreement unless such agreement is terminated by either party. In addition, Mr.
Janney is entitled to receive his base salary for the balance of the term of the
agreement plus an amount equal to one year's salary as severance upon
termination of his employment by the Company.
STOCK PERFORMANCE GRAPH
The following graph is a comparison of the five-year cumulative total
return among the Company, the Standard & Poor's 500 Composite Index and the
Standard & Poor's Chemical Index.
TOTAL SHAREHOLDER RETURN
- ------------------------------------------- ------------------------------------------------------------------------
Annual Return Percentage Years Ending
=========================================== ============= =============== ============= ============= --------------
Company/Index Sept. 93 Sept. 94 Sept. 95 Sept. 96 Sept. 97
=========================================== ============= =============== ============= ============= --------------
Uniroyal Technology Corp. 25.00 -34.73 36.19 -21.88 48.00
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
S&P 500 Index 12.16 3.69 29.74 20.33 40.45
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
Chemicals (Specialty) - 500 7.32 -3.96 28.59 7.74 12.97
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
- ------------------------------------------- ------------------------------------------------------------------------
Indexed Returns - Years Ending
=========================================== ============= =============== ============= ============= --------------
Company/Index Sept. 93 Sept. 94 Sept. 95 Sept. 96 Sept. 97
=========================================== ============= =============== ============= ============= --------------
Uniroyal Technology Corp. 125.00 81.58 111.11 86.81 128.47
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
S&P 500 Index 112.16 116.29 150.89 181.56 255.00
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
Chemicals (Specialty) - 500 107.32 103.07 132.54 142.80 161.33
- ------------------------------------------- ------------- --------------- ------------- ------------- --------------
Source: Standard & Poor's Compustat
This comparison of five-year cumulative returns assumes that $100 was invested
on September 28, 1992 in Common Stock, the S&P 500 Composite Index and the S&P
Chemicals (Specialty) Index. No dividends were paid on the Common Stock.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal year ending
September 27, 1998, subject to approval by the stockholders. The Board of
Directors recommends that such appointment be ratified.
Representatives of Deloitte & Touche LLP will be present at the meeting
and will have the opportunity to make a statement, if they desire to do so, and
respond to appropriate questions.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated
above which are to be brought before the meeting. However, if any such other
matters should be presented for consideration and voting, it is the intention of
the persons named in the proxy to vote on such matters in accordance with their
judgment.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the 1999 annual
meeting must be forwarded in writing and received at the principal executive
offices of the Company not later than October 6, 1998, directed to the attention
of the Secretary, for consideration for inclusion in the Company's proxy
statement for the Annual Meeting of Stockholders to be held in 1999. Any such
proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
OLIVER J. JANNEY
Secretary
January 5, 1998