def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant þ
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Preliminary Proxy Statement |
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Confidential, For Use of the Commission Only (as permitted by 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional materials |
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Soliciting Material Pursuant To § 240.14a-12 |
SUPERCONDUCTOR TECHNOLOGIES INC.
(Name of Registrant as Specified in Its Charter)
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NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 18,
2009
To Our Stockholders:
The Annual Meeting of Stockholders (our Annual
Meeting) of Superconductor Technologies Inc. will be
held on Monday, May 18, 2009, at 11:00 a.m., local
time, at our offices at 460 Ward Drive, Santa Barbara,
California 93111 for the following purposes, as more fully
described in the accompanying Proxy Statement:
1. To elect two Class 2 directors to hold office
until our 2012 Annual Meeting of Stockholders or until their
successors are elected and qualified;
2. To ratify the appointment of Stonefield Josephson, Inc.
as our independent registered public accounting firm for
2009; and
3. To transact such other business as may properly come
before our Annual Meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on
April 3, 2009 are entitled to notice of and to vote at our
Annual Meeting. A list of stockholders as of this date will be
available during normal business hours for examination at our
offices by any stockholder for any purpose relevant to our
Annual Meeting for a period of ten days prior to the meeting.
All stockholders are urged to attend our Annual Meeting in
person or vote by proxy. YOUR VOTE IS IMPORTANT. WHETHER OR
NOT YOU EXPECT TO ATTEND OUR ANNUAL MEETING IN PERSON, PLEASE
SIGN AND SUBMIT YOUR PROXY AS SOON AS POSSIBLE SO THAT YOUR
SHARES CAN BE VOTED AT OUR ANNUAL MEETING IN ACCORDANCE WITH
YOUR INSTRUCTIONS. The proxy is revocable at any time prior
to its exercise and will not affect your right to vote in person
in the event you attend our Annual Meeting.
By Order of the Board of Directors,
Jeffrey A. Quiram
President and Chief Executive Officer
Santa Barbara, California
April 17, 2009
TABLE OF CONTENTS
ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 18, 2009
460 Ward Drive
Santa Barbara, California
93111-2310
(805) 690-4500
INTRODUCTION
This Proxy Statement contains information related to the
solicitation of proxies by and on behalf of the Board of
Directors of Superconductor Technologies Inc. (our
Board) for use in connection with our Annual
Meeting of Stockholders to be held on Monday, May 18, 2009,
beginning at 11:00 a.m., local time, at our offices located
at 460 Ward Drive, Santa Barbara, California 93111,
and at any and all adjournments or postponements thereof (our
Annual Meeting). At our Annual Meeting,
stockholders will be asked to consider and vote upon the
following proposals: (i) the election of two
Class 2 directors to hold office until our 2012 Annual
Meeting of Stockholders or until their successors are elected
and qualified; (ii) the ratification of the appointment of
Stonefield Josephson, Inc. as our independent registered public
accounting firm for 2009; and (iii) the transaction of such
other business as may properly come before our Annual Meeting.
This Proxy Statement and the accompanying proxy card are being
mailed to stockholders on or about April 17, 2009.
Important
Notice Regarding Availability of Proxy Materials for the 2009
Annual Meeting of Stockholders to be Held on May 18,
2009
Our Proxy Statement, Annual Report on
Form 10-K,
and proxy card are available on the Internet at
http://www.proxyvote.com
and at the SEC Filings section under the
Investors tab on our corporate website at
http://www.suptech.com.
INFORMATION
CONCERNING SOLICITATION AND VOTING
Record
Date
Only holders of record of our voting stock at the close of
business on April 3, 2009 (the Record
Date) are entitled to notice of our Annual Meeting and
to vote at our Annual Meeting. As of the Record Date, we had
18,705,028 shares of our voting common stock issued and
outstanding.
Revocability
of Proxies
Any proxy given pursuant to this solicitation may be revoked by
the person giving it at any time before its use by delivering to
our Secretary, at or before the taking of the vote at our Annual
Meeting, a written notice of revocation or a duly executed proxy
bearing a later date or by attending our Annual Meeting and
voting in person.
Voting
and Solicitation
Each share of common stock is entitled to one vote on all
matters presented at our Annual Meeting. Stockholders do not
have the right to cumulate their votes in the election of
directors.
Shares of common stock represented by properly executed proxies
will, unless such proxies have been previously revoked, be voted
in accordance with the instructions indicated thereon. In the
absence of specific instructions to the contrary, properly
executed unrevoked proxies will be voted: (i) FOR the
election of the two
nominees for Class 2 director and (ii) FOR the
ratification of the selection of Stonefield Josephson, Inc. as
our independent registered public accounting firm for 2009. No
other business is expected to come before our Annual Meeting.
Should any other matter requiring a vote of stockholders
properly arise, the persons named in the enclosed form of proxy
will vote such proxy in accordance with the recommendation of
our Board.
If you will not be able to attend our Annual Meeting to vote in
person, please vote your shares by completing and returning the
accompanying proxy card or by voting electronically via the
Internet or by telephone. To vote by mail, please mark, sign and
date the accompanying proxy card and return it promptly in the
enclosed postage paid envelope. To vote by Internet, go to
www.proxyvote.com and to vote by telephone, call
1-800-690-6903,
and follow the instructions to cast your vote. For voting by
Internet or telephone, you will need to have your
12-digit
control number, located on your proxy card. Please do not return
the enclosed paper ballot if you are voting by Internet or
telephone.
We intend to solicit proxies primarily by mail. However,
directors, officers, agents and employees may communicate with
stockholders, banks, brokerage houses and others by telephone,
e-mail, in
person or otherwise to solicit proxies. We have no present plans
to hire special employees or paid solicitors to assist in
obtaining proxies, but reserve the option to do so. All expenses
incurred in connection with this solicitation will be borne by
us. We request that brokerage houses, nominees, custodians,
fiduciaries and other like parties forward the soliciting
materials to the underlying beneficial owners of our common
stock. We will reimburse reasonable charges and expenses in
doing so.
Quorum;
Abstentions; Broker Non-Votes
The required quorum for the transaction of business at our
Annual Meeting is a majority of the votes eligible to be cast by
holders of shares of our common stock issued and outstanding on
the Record Date. Shares that are voted FOR or
AGAINST a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at our Annual Meeting with
respect to such matter.
We believe that abstentions should be counted for purposes of
determining the presence or absence of a quorum for the
transaction of business and the total number of votes cast with
respect to a proposal (other than the election of directors). In
the absence of controlling precedent to the contrary, we intend
to treat abstentions in this manner. Accordingly, abstentions
will have the same effect as a vote against a proposal (other
than the election of directors).
Broker non-votes are shares held in street name for which a
broker returns a proxy card but indicates that instructions have
not been received from the beneficial owners or other persons
entitled to vote and for which the broker does not have
discretionary voting authority. We count broker non-votes for
the purposes of determining the presence or absence of a quorum
for the transaction of business, but not for purposes of
determining the number of votes cast with respect to the
particular proposal on which the broker has expressly not voted.
Thus, a broker non-vote will not affect the outcome of the
voting on a proposal requiring solely a majority of shares voted.
Deadline
for Receipt of Stockholder Proposals for 2010 Annual Meeting of
Stockholders
Pursuant to
Rule 14a-8
of the Securities and Exchange Commission
(SEC), proposals by eligible stockholders
that are intended to be presented at our 2010 Annual Meeting of
Stockholders must be received by our Corporate Secretary at
Superconductor Technologies Inc., 460 Ward Drive,
Santa Barbara, California 93111 not later than
December 18, 2009 in order to be considered for inclusion
in our proxy materials.
Stockholders intending to present a proposal at our 2010 Annual
Meeting of Stockholders must comply with the requirements and
provide the information set forth in our amended and restated
bylaws. Under our bylaws, a stockholders proposal must be
timely received, which means that a proposal must be delivered
to or mailed to our Secretary not less than 90 days prior
to the meeting; provided that if less than 100 days notice
or prior public disclosure of the meeting is given to
stockholders, then notice by a stockholder, to be timely
received, must be received by our Secretary not later than the
close of business on the tenth day following the day on which
such notice of the date of the meeting was mailed or such public
disclosure was made.
2
PROPOSAL ONE
ELECTION
OF CLASS 2 DIRECTORS
Our Board currently consists of six directors divided into three
classes Class 1 (Mr. Quiram and
Mr. Kaplan), Class 2 (Mr. Horowitz and
Mr. Davis) and Class 3 (Mr. Vellequette and
Mr. Lockton) with the directors in each class
holding office for staggered terms of three years each or until
their successors have been duly elected and qualified.
Class 2 directors will be elected at our Annual
Meeting. The nominees for election as the
Class 2 directors are Mr. Horowitz and
Mr. Davis. Each Class 2 director will serve until
our 2012 Annual Meeting of Stockholders or until his successor
is elected and qualified. Assuming the nominees are elected, we
will have six directors serving as follows:
Class 1: Jeffrey A. Quiram, Martin A. Kaplan
Class 2: Lynn J. Davis, Dennis J. Horowitz,
Class 3: John D. Lockton, David W. Vellequette
The accompanying proxy card grants to the holder the power to
vote the proxy for substitute nominees in the event that any
nominee becomes unavailable to serve as a
Class 2 director. Management presently has no
knowledge that any nominee will refuse or be unable to serve as
a Class 2 director for the prescribed term.
Required
Vote
Directors are elected by a plurality of the shares
voted. Plurality means that the nominee with the largest number
of votes is elected, up to the maximum number of directors to be
chosen (in this case, two directors). Stockholders can either
vote for the nominee or withhold authority to vote
for the nominee. However, shares that are withheld will have no
effect on the outcome of the election of directors. Broker
non-votes also will not have any effect on the outcome of the
election of the directors.
Board
Recommendation
Our Board Recommends a Vote For
Mr. Davis and For
Mr. Horowitz.
CORPORATE
GOVERNANCE AND BOARD MEETINGS AND COMMITTEES
Corporate
Governance Policies and Practices
The following is a summary of our corporate governance policies
and practices:
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Our Board has determined that all of our directors, other than
Mr. Quiram, are independent as defined by the rules of the
SEC and The NASDAQ Stock Market (NASDAQ). Our
Audit Committee, Compensation Committee and Governance and
Nominating Committee each consists entirely of independent
directors.
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We have a Code of Business Conduct and Ethics for all of our
employees, including our Chief Executive Officer, Chief
Financial Officer and Principal Accounting Officer. If we amend
any provision of our Code of Business Conduct and Ethics that
applies to our Chief Executive Officer, Chief Financial Officer
or Principal Accounting Officer (or any persons performing
similar functions), or if we grant any waiver (including an
implicit waiver) from any provision of our Code of Business
Conduct and Ethics to our Chief Executive Officer, Chief
Financial Officer or Principal Accounting Officer (or any
persons performing similar functions), we will disclose those
amendments or waivers on our website at www.suptech.com
under tabs Investors, Corporate Governance, and Amendments and
Waivers to the Code of Conduct within four business days
following the date of the amendment or waiver.
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Our Boards current policy is to separate the roles of
Chairman of our Board and Chief Executive Officer.
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Our Audit Committee reviews and approves all related-party
transactions.
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As part of our Code of Business Conduct and Ethics, we have made
a whistleblower hotline available to all employees
for anonymous reporting of financial or other concerns. Our
Audit Committee receives directly, without management
participation, all hotline activity reports concerning
accounting, internal controls or auditing matters.
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Stockholder
Communications with Directors
Stockholders who want to communicate with our Board or with a
particular director or committee may send a letter to our
Secretary at Superconductor Technologies Inc., 460 Ward Drive,
Santa Barbara, California 93111. The mailing envelope
should contain a clear notation indicating that the enclosed
letter is a Board Communication or Director
Communication. All such letters should state whether the
intended recipients are all members of our Board or just certain
specified individual directors or a specified committee. The
Secretary will circulate the communications (with the exception
of commercial solicitations) to the appropriate director or
directors. Communications marked Confidential will
be forwarded unopened.
Attendance
at Annual Meetings of Stockholders
We expect that all of our Board members attend our Annual
Meetings of Stockholders in the absence of a showing of good
cause for failure to do so. All of the members of our Board
attended our 2008 Annual Meeting of Stockholders.
Board
Meetings and Committees
During 2008, each of our directors attended at least 75% of
(i) the total number of Board meetings and (ii) the
total number of meetings of the committees on which the director
served.
Board
of Directors
Our Board held a total of seven meetings during the year ended
December 31, 2008. Our Board has three standing
committees an Audit Committee established in
accordance with section 3(a)(58)(A) of the Securities
Exchange Act of 1934 (our Audit Committee), a
Compensation Committee (our Compensation
Committee) and a Governance and Nominating Committee
(our Nominating Committee). Our Audit
Committee, Compensation Committee and Nominating Committee each
have a charter, which is available at the Corporate
Governance section under the Investors tab on
our website at www.suptech.com.
Audit
Committee
The principal functions of our Audit Committee are to hire our
independent public auditors, to review the scope and results of
the year-end audit with management and the independent auditors,
to review our accounting principles and our system of internal
accounting controls and to review our annual and quarterly
reports before filing with the SEC. Our Audit Committee met
eight times during 2008. The current members of our Audit
Committee are Messrs. Horowitz (Chairman), Lockton, Davis
and Vellequette.
Our Board has determined that all members of our Audit Committee
are independent as defined under the rules of the
SEC and the listing standards of NASDAQ. Our Board has
determined that Mr. Vellequette is an audit committee
financial expert.
Compensation
Committee
Our Compensation Committee reviews and approves salaries,
bonuses and other benefits payable to the executive officers and
administers our management incentive plan. Our Compensation
Committee makes all compensation decisions with respect to our
Chief Executive Officer and makes recommendations to our Board
regarding non-equity compensation and equity awards to our other
named executive officers (set forth below under Executive
Compensation Summary Compensation Table) and
all other elected officers. In doing so, with respect to named
executive officers other than the Chief Executive Officer, our
Compensation Committee generally receives a recommendation from
our Chief Executive Officer and other officers as appropriate.
Our Chief Executive Officer also generally recommends the number
of options to be granted to executive officers, within a range
associated with the individual executives salary level,
and presents this to our Compensation Committee for its review
and approval.
Our Compensation Committee uses data from the Radford Executive
Survey, a nationally recognized executive compensation survey,
to review and compare our compensation levels to market
compensation levels,
4
taking into consideration the other companies size, the
industry, and the individual executives level of
responsibility, as well as anecdotal data regarding the
compensation practices of other employers. We do not annually
benchmark our executive compensation against a defined peer
group, since we believe that defining such a group is difficult
and would not materially affect our decisions. Our Compensation
Committee does not generally hire an outside consulting firm to
assist with compensation, as we believe that the value of doing
so is exceeded by the costs.
Our Compensation Committee also reviews the compensation of
directors and recommends to our Board the amount of cash to be
paid and the amounts and types of equity awards to be made to
our directors.
Our Compensation Committee met twice during 2008. The current
members of our Compensation Committee are Messrs. Davis
(Chairman), Horowitz and Kaplan. Our Board has determined that
all members of our Compensation Committee are
independent as defined under the rules of the SEC
and the listing standards of NASDAQ.
Our Compensation Committee created the Stock Option Committee
(our Stock Option Committee) consisting of
two members our Compensation Committee Chairman and
the Chief Executive Officer. The purpose of our Stock Option
Committee is to facilitate the timely granting of stock options
in connection with hiring, promotions and other special
situations, and therefore our Stock Option Committee meets only
periodically as certain events occur. Our Stock Option Committee
is empowered to grant options to non-executive employees up to a
preset annual aggregate limit (120,000 shares for 2008).
Our Stock Option Committee made six grants during 2008 totaling
102,000 shares. Our Compensation Committee supervises these
grants and retains exclusive authority for all executive officer
grants and the annual employee grants. The current members of
our Stock Option Committee are Messrs. Davis (Chairman) and
Quiram.
Governance
and Nominating Committee
Our Nominating Committee is responsible for overseeing and, as
appropriate, making recommendations to our Board regarding,
membership and constitution of our Board and its role in
overseeing our affairs. Our Nominating Committee is responsible
for proposing a slate of directors for election by the
stockholders at each annual meeting and for proposing candidates
to fill any vacancies. Our Nominating Committee is also
responsible for the corporate governance practices and policies
of our Board and its committees. The current members of our
Nominating Committee are Messrs. Kaplan (Chairman),
Lockton, and Vellequette. Our Nominating Committee met twice in
2008. Our Board has determined that all members of our
Nominating Committee are independent as defined
under the rules of the SEC and the listing standards of NASDAQ.
Our Nominating Committee manages the process for evaluating
current Board members at the time they are considered for
re-nomination. After considering the appropriate skills and
characteristics required on our Board, the current makeup of our
Board, the results of the evaluations, and the wishes of our
Board members to be
re-nominated,
our Nominating Committee recommends to our Board whether those
individuals should be
re-nominated.
Our Nominating Committee periodically reviews with our Board
whether it believes our Board would benefit from adding a new
member(s), and if so, the appropriate skills and characteristics
required for the new member(s). If our Board determines that a
new member would be beneficial, our Nominating Committee
solicits and receives recommendations for candidates and manages
the process for evaluating candidates. All potential candidates,
regardless of their source (including candidates recommended by
security holders), are reviewed under the same process. Our
Nominating Committee (or its chair) screens the available
information about the potential candidates. Based on the results
of the initial screening, interviews with viable candidates are
scheduled with Nominating Committee members, other members of
our Board and senior members of management. Upon completion of
these interviews and other due diligence, our Nominating
Committee may recommend to our Board the election or nomination
of a candidate.
Candidates for independent Board members have typically been
found through recommendations from directors or others
associated with us. Our stockholders may also recommend
candidates by sending the candidates name and resume to
our Nominating Committee under the provisions set forth above
for communication with our Board. No such suggestions from our
stockholders were received in time for our Annual Meeting.
5
Our Nominating Committee has no predefined minimum criteria for
selecting Board nominees, although it believes that all
independent directors should share qualities such as:
independence; experience at the corporate, rather than
divisional level, in multi-national organizations as large as or
larger than we are; relevant, non-competitive experience; and
strong communication and analytical skills. In any given search,
our Nominating Committee may also define particular
characteristics for candidates to balance the overall skills and
characteristics of our Board and our perceived needs. However,
during any search, our Nominating Committee reserves the right
to modify its stated search criteria for exceptional candidates.
NON-EMPLOYEE
DIRECTOR COMPENSATION
Summary
of Compensation
Our Board maintains a written compensation policy for our
non-employee directors. Each director other than our Chairman of
the Board receives an annual cash retainer of $20,000, and our
Chairman of the Board receives an annual cash retainer of
$40,000. The annual cash retainer is paid bi-annually and
requires that the director attend at least 75% of our Board
meetings. In addition, on the date of each annual meeting of
stockholders, each director other than our Chairman of the Board
receives a grant of 10,000 options to purchase our common stock,
and our Chairman of the Board receives a grant of 15,000
options. In addition to the foregoing option grants, new
directors receive an initial grant of 25,000 options to purchase
our common stock on the date that they join our Board. All
options granted vest in three equal installments, on each
anniversary of the grant date. Our Board provides an additional
$10,000 annual retainer (which is paid bi-annually) as
compensation for service as chairman of each of our Audit
Committee, Compensation Committee and Nominating Committee.
Non-employee directors do not receive compensation from us other
than as a director or as committee member. There are no family
relationships among our directors and executive officers.
Non-employee
Director Compensation Table
The following table summarizes the compensation paid to our
non-employee directors for 2008:
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Fees Earned or
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Paid in Cash
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Option Awards
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Total
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Name
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($)
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($)(1)
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($)
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John D. Lockton
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42,000
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9,745
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51,745
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Lynn J. Davis
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31,000
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7,340
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38,340
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Dennis J. Horowitz
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31,000
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7,967
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38,967
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Martin A. Kaplan
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30,000
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7,266
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37,266
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David W. Vellequette
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21,000
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4,784
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25,784
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(1) |
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The amounts reflect the dollar amount recognized for financial
statement reporting purposes for 2008, in accordance with FAS
123(R), of awards of options to purchase the following numbers
of shares of our Common Stock in 2006, 2007 and 2008,
respectively, as follows: Mr. Lockton, 4,800 shares,
600 shares and 15,000 shares; Mr. Davis,
4,500 shares, 600 shares and 10,000 shares;
Mr. Horowitz, 6,700 shares, 600 shares and
10,000 shares; Mr. Kaplan, 4,100 shares,
1,000 shares and 10,000 shares; and
Mr. Vellequette, 0 shares, 2,500 shares and
12,500 shares. Assumptions used in the calculation of these
amounts are included in Note 6 to our audited financial
statements included in our 2008 Annual Report on Form
10-K filed
with the SEC, excluding assumed forfeitures. |
6
DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding
those individuals currently serving as our directors (or
nominated to serve as a director) and executive officers as of
April 3, 2009:
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Name
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Age
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Position
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John D. Lockton(1)(3)
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71
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Chairman of the Board
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Lynn J. Davis(1)(2)(4)
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62
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Director
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Dennis J. Horowitz(1)(2)
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62
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Director
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Martin A. Kaplan(2)(3)
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71
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Director
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David W. Vellequette(1)(3)
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52
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Director
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Jeffrey A. Quiram(4)
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48
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President, Chief Executive Officer and Director
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William J. Buchanan
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60
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Controller (Principal Financial Officer and Principal Accounting
Officer) and Assistant Secretary
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Robert B. Hammond, Ph.D.
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61
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Senior Vice President, Chief Technical Officer
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Robert L. Johnson
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58
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Senior Vice President, Operations
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Terry A. White
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57
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Vice President, Worldwide Sales
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Adam L. Shelton
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42
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Vice President, Product Management and Marketing
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Thomas R. Giunta
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48
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Vice President, Engineering
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(1) |
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Member of our Audit Committee. |
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Member of our Compensation Committee. |
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Member of our Governance and Nominating Committee. |
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Member of our Stock Option Committee. |
John D. Lockton has served on our Board since 1997
and was named Chairman of our Board in 2001. In 2008, he retired
from IPWireless, Inc., where he was a founder and its initial
Chairman. IPWireless, Inc. is a wireless internet access and IP
telephony service provider of 3G technology. From 1991 to 1998,
he was President, Chief Executive Officer and a director of
International Wireless Communications, Inc.
(IWC), an operator of cellular systems, and
in 1998 he served IWC as Vice-Chairman and a director. From 1990
to 1991 he was Managing Partner of Corporate Technology
Partners, a joint venture with Bell Canada Enterprises. In 1988,
Mr. Lockton founded Cellular Data, Inc., a cellular
wireless data technology company, and Star Associates, Inc., a
cellular radio RSA company. He founded and was a director of
Interactive Network, Inc., a wireless-based television company,
and was Chairman of that companys Board of Directors until
1994. From 1983 to 1987 Mr. Lockton was Executive Vice
President of Pacific Bell (now part of SBC Communications). From
1980 to 1983 he was President of Warner Amex (now Time Warner)
Cable Television, Inc. From 1968 to 1980 Mr. Lockton held
various senior positions at Dun & Bradstreet.
Mr. Lockton holds a B.A. from Yale University (Phi Beta
Kappa), an L.L.B. from Harvard Law School, and an Executive
M.B.A. from Columbia University.
Lynn J. Davis has served on our Board since
2005. In 2006 he retired as President, Chief
Operating Officer and director of August Technology, a
manufacturer of inspection equipment for the semiconductor
fabrication industry, which he joined in 2005. From 2002 to
2004, he was a partner at Tate Capital Partners Fund, LLC, a
private investment firm he co-founded. Prior to Tate,
Mr. Davis was an employee of ADC Telecommunications for
28 years, serving in 14 management positions, including
Corporate President, Group President and Chief Operating
Officer. He is also a member of the Board of Directors of
Flexsteel Industries Inc., a furniture manufacturer.
Mr. Davis holds a B.S. in electrical engineering from Iowa
State University and an M.B.A. from the University of Minnesota.
Dennis J. Horowitz has served on our Board since
1990. Mr. Horowitz is currently President of DH Partners, a
consulting Company that helps Chinese and American companies
develop businesses in many locations, especially Mexico. In
2005, he retired as Chairman of the Board of Wolverine Tube,
Inc., a manufacturer and distributor of copper and copper alloy
tube, of which he had been the Chairman and CEO since 1998. From
1994 to 1997, he served as Corporate Vice President and
President of the Americas of AMP Incorporated, an
interconnection device
7
company. From 1993 to 1994, Mr. Horowitz served as
President and Chief Executive Officer of Philips Technologies, a
Philips Electronics North America company. From 1990 to 1993, he
served as President and Chief Executive Officer of Philips
Components, Discrete Products Division. From 1988 to 1990, he
served as President and Chief Executive Officer of Magnavox
CATV, and from 1980 to 1988 was involved in the general
administration of North American Philips Corporation.
Mr. Horowitz holds an M.B.A. and a B.A. in economics from
St. Johns University.
Martin A. Kaplan has served on our board since
2002. Since 2000, Mr. Kaplan has served as
Chairman of the Board of JDS Uniphase, Inc., a
telecommunications equipment company. Mr. Kaplan also
currently serves as a director of Tekelec. In a career spanning
forty years, Mr. Kaplan served as Executive Vice-President
of Pacific Telesis Group, which became a subsidiary of SBC
Communications in 1997, from 1986 until 2000, as President,
Network Services Group of Pacific Bell, and its successor,
Pacific Telesis, and in various other senior management
positions. Mr. Kaplan earned a B.S. in engineering from
California Institute of Technology.
David W. Vellequette has served on our Board since
2007. Mr. Vellequette currently serves as Chief Financial
Officer of JDS Uniphase, Inc., a telecommunications equipment
company, a position he has held since 2005. He joined JDS
Uniphase as Vice President and Operations Controller in 2004.
From 2002 to 2004, he served as Vice President of Worldwide
Sales and Service Operations at Openwave Systems, Inc., an
independent provider of software solutions for the mobile
communications and media industries. From 1992 to 2002,
Mr. Vellequette served as Corporate Controller of StrataCom
Corporation which was acquired by Cisco Systems, Inc. in 1996,
and subsequently, as Vice President of Finance of Cisco Systems,
the worldwide leader in networking for the Internet. From 1984
to 1992, Mr. Vellequette was Corporate Controller at Altera
Corporation, a supplier of programmable silicon solutions to the
electronics industry. Mr. Vellequette began his finance
career as an auditor with Ernst & Young. He holds a
B.S. in Accounting from the University of California, Berkeley,
and is a CPA.
Jeffrey A. Quiram has served on our Board, and has
been our President and Chief Executive Officer, since 2005. From
1991 to 2004, Mr. Quiram served ADC Telecommunications in a
variety of management roles, including Vice President of its
wireless business unit. Mr. Quiram has a B.S. in
Quantitative Methods and Computer Science from College of St.
Thomas, and an M.B.A. from University of Minnesota.
William J. Buchanan has been with us since 1998
and has served as our Controller since 2000. For 16 years
prior to joining us, he was a self-employed private investor and
investment advisor. For the nine years prior to that, he served
in various executive and accounting positions with Applied
Magnetics Corp and Raytheon Co. Mr. Buchanan holds a B.A.
in Economics from California State University, Fresno.
Robert B. Hammond, Ph.D., has served as our Senior
Vice President and Chief Technical Officer since 1992.
Dr. Hammond served as our Vice President of Technology, and
Chief Technical Officer, until August 1990. He has also served
as our Secretary from October 1999 to 2002. From May 1991 to
December 1991, and July 1992 to December 1992, he served as our
Acting Chief Operating Officer. From December 1987 to August
1990, he served as our Program Manager. Dr. Hammond also
serves on our Technical Advisory Board. For over eleven years
prior to joining us, he was at Los Alamos National Laboratory, a
group that performs research, development, and pilot production
of solid-state electronics and optics, most recently as Deputy
Group Leader of Electronics Research and Development.
Dr. Hammond received his Ph.D. and M.S. in applied physics
and his B.S. in physics from the California Institute of
Technology.
Robert L. Johnson has been our Senior Vice
President, Operations since 2004. Mr. Johnson joined us in
2000 as Vice President of Wireless Manufacturing. From 1996 to
2000, Mr. Johnson was the Director and General Manager of
Schlumberger ATE. From 1990 to 1996, he served as Vice President
and General Manager of Harman International Industries.
Mr. Johnson studied industrial engineering at Arizona State
University.
Terry A. White has been our Vice President
Worldwide Sales since 2005. From 2003 to 2005, Mr. White
was Vice President of Worldwide Sales for Mahi Networks, a
telecom company. From 2002 to 2003, Mr. White was Vice
President of Global Sales at Turnstone Systems. Prior to that
position and from 1992 to 2001, he held various positions at ADC
Telecommunications, most recently as Senior Vice President of
BIA Sales. Mr. White has been employed in sales management
for more than 20 years. Mr. White holds a B.A. from
Kennesaw College.
8
Adam L. Shelton has been our Vice President,
Product Management and Marketing since 2006. From 2005 to 2006,
Mr. Shelton was the Senior Director of Marketing for
Motorola. From 2003 to 2005, he was the Senior Director of
Marketing for Advanced Fibre Communications (AFC), now Tellabs.
Mr. Shelton also held various management and executive
management positions with Mahi Networks, ATU Communications and
Bell Canada. Mr. Shelton graduated with deans honors
as a Civil Engineering Technologist from Seneca College in
Toronto, Canada.
Thomas R. Giunta has served as our Vice President
Engineering since March 2008. From 2004 to 2008 Mr. Giunta
held senior management positions in Motorolas IP Video
Solutions and Motorola Wireline Networks organizations. From
2002 to 2004, he served as vice president, switching development
engineering at Ciena Corporation. In addition, he previously
served in senior leadership and senior engineering/product
development and management roles at Mahi Networks, Advanced
Fibre Communications, Fujitsu Network Communications and
Alcatel. Mr. Giunta holds an M.B.A. from the W.P. Carey
School of Business at Arizona State University and B.S. in
Computer Science from Florida International University.
VOTING
SECURITIES OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our
common stock as of April 3, 2009 by (i) each person
known by us to be the beneficial owner of more than 5% of our
outstanding common stock, (ii) each of our directors,
(iii) each of our executive officers named in the table
under Executive Compensation Summary
Compensation Table, and (iv) all of our directors and
executive officers as a group. Except as otherwise indicated in
the footnotes to the table, (i) the persons and entities
named in the table have sole voting and investment power with
respect to all shares beneficially owned, subject to community
property laws where applicable, and (ii) the address of
each person is
c/o Superconductor
Technologies Inc., 460 Ward Drive, Santa Barbara,
California 93111.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Name
|
|
Shares(3)
|
|
Percentage Ownership
|
|
Xiaoxiong Zhang
|
|
|
3,101,361
|
(1)
|
|
|
16.6
|
%
|
3/F, Block B, Tongfang Information
|
|
|
|
|
|
|
|
|
Harbor, 11 Langshan, Nanshan Dist.,
|
|
|
|
|
|
|
|
|
Shenzhen, China 518057
|
|
|
|
|
|
|
|
|
Kopp Investment Advisors, LLC
|
|
|
1,002,200
|
(2)
|
|
|
5.4
|
%
|
7701 France Avenue South, #500
|
|
|
|
|
|
|
|
|
Edina, MN 55435
|
|
|
|
|
|
|
|
|
Jeffrey A. Quiram
|
|
|
426,900
|
|
|
|
2.3
|
%
|
William J. Buchanan
|
|
|
113,470
|
|
|
|
*
|
|
Robert L. Johnson
|
|
|
130,573
|
|
|
|
*
|
|
Robert B. Hammond
|
|
|
177,750
|
|
|
|
*
|
|
Adam L. Shelton
|
|
|
162,036
|
|
|
|
*
|
|
Thomas R. Giunta
|
|
|
101,499
|
|
|
|
*
|
|
Terry A. White
|
|
|
232,454
|
|
|
|
1.2
|
%
|
John D. Lockton
|
|
|
19,800
|
|
|
|
*
|
|
Dennis J. Horowitz
|
|
|
22,534
|
|
|
|
*
|
|
Lynn J. Davis
|
|
|
12,409
|
|
|
|
*
|
|
Martin A. Kaplan
|
|
|
17,964
|
|
|
|
*
|
|
David W. Vellequette
|
|
|
5,834
|
|
|
|
*
|
|
All executive officers and directors as a group (12 persons)
|
|
|
1,423,223
|
|
|
|
7.6
|
%
|
|
|
|
* |
|
Less than 1%. |
|
(1) |
|
Based on information reported in a joint Schedule 13G/A
filed with the SEC on August 18, 2008, by China Poly Group,
Ltd. (China Poly Group), Hunchun Baoli
Communications Co., Ltd. (Baoli), Baoli
Investment Group Ltd. (Baoli Investment), and
Xiaoxiong Zhang (Mr. Zhang). Each of
China Poly Group, Baoli and |
9
|
|
|
|
|
Baoli Investment is a limited liability company organized under
the laws of the Peoples Republic of China. Mr. Zhang
is the majority and controlling shareholder of China Poly Group.
Collectively, China Poly Group, Baoli and Baoli Investment are
the beneficial owners of 3,101,361 shares of which
(i) China Poly Group has shared voting power with respect
to 2,148,296 shares and shared dispositive power with
respect to 2,501,361 shares; (ii) Baoli has shared
voting and dispositive power with respect to
2,148,296 shares; (iii) Baoli Investment has shared
dispositive power with respect to 600,000 shares; and
(iv) Mr. Zhang has shared voting power with respect to
2,148,296 shares and shared dispositive power with respect
to 3,101,361 shares. China Poly Group holds
353,065 shares directly and Baoli Investment holds
600,000 shares directly; such shares are subject to an
Irrevocable Proxy and Voting Agreement pursuant to which we hold
all voting rights in such shares. In addition, China Poly Group,
Baoli and Baoli Investment collectively own 611,523 shares
of our Series A Preferred Stock. Subject to the terms and
conditions of the Series A Preferred Stock and to customary
adjustments to the conversion rate, each share of our
Series A Preferred Stock is convertible into ten shares of
our common stock so long as the number of shares of our common
stock beneficially owned by the holder and related parties
following such conversion does not exceed 9.9% of our
outstanding common stock. As a result, none of China Poly
Groups Series A Preferred Stock is currently
convertible. |
|
(2) |
|
Based on information reported in a Schedule 13F Holdings
Report filed with the SEC on February 2, 2009 and amended
February 12, 2009, Kopp Investment Advisors, LLC
(KIA) has sole voting authority with respect
to all such shares. According to the Schedule 13F, KIA has
Defined investment discretion with respect to
807,500 shares and Other investment discretion
with respect to 194,700 shares.. |
|
(3) |
|
Includes shares issuable upon the exercise of stock options that
are exercisable within 60 days of April 3, 2009 as
follows: Mr. Quiram, 166,771 shares; Mr. Buchanan
20,704 shares; Mr. Johnson 18,118 shares;
Mr. Hammond 19,728 shares; Mr. Shelton,
66,265 shares; Mr. Giunta, 19,750 shares;
Mr. White, 117,505 shares; Mr. Lockton,
19,800 shares; Mr. Horowitz, 22,134 shares;
Mr. Davis, 12,409 shares; Mr. Kaplan,
15,044 shares; Mr. Vellequette, 5,834 shares; and
all executive officers and directors as a group,
504,056 shares. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934,
our directors, executive officers and significant stockholders
(defined by statute as stockholders beneficially owning more
than 10% of our common stock) are required to file with the SEC
and us reports of ownership, and changes in ownership, of our
common stock. Based solely on a review of the reports, and on
written representations by certain directors and executive
officers, received by us, all of our executive officers,
directors and significant stockholders complied with all
applicable filing requirements under Section 16(a) during
2008.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table sets forth the base salary and other
compensation of our named executive officers with respect to
2008, 2007 and 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
|
(f)
|
|
(g)
|
|
|
|
|
|
|
(c)
|
|
(d)
|
|
Stock
|
|
Option
|
|
All Other
|
|
(h)
|
(a)
|
|
(b)
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)(3)
|
|
($)
|
|
Jeffrey A. Quiram
|
|
|
2008
|
|
|
|
315,000
|
|
|
|
|
|
|
|
43,687
|
|
|
|
71,257
|
|
|
|
108,923
|
|
|
|
538,867
|
|
Director, President, Chief
|
|
|
2007
|
|
|
|
315,650
|
|
|
|
100,000
|
|
|
|
75,000
|
|
|
|
|
|
|
|
110,885
|
|
|
|
601,535
|
|
Executive Officer
|
|
|
2006
|
|
|
|
310,961
|
|
|
|
|
|
|
|
31,313
|
|
|
|
|
|
|
|
135,326
|
|
|
|
477,600
|
|
Robert B. Hammond
|
|
|
2008
|
|
|
|
246,330
|
|
|
|
|
|
|
|
17,475
|
|
|
|
30,368
|
|
|
|
6,323
|
|
|
|
300,496
|
|
Senior Vice President,
|
|
|
2007
|
|
|
|
248,442
|
|
|
|
24,000
|
|
|
|
30,000
|
|
|
|
|
|
|
|
1,290
|
|
|
|
303,732
|
|
Chief Technical Officer
|
|
|
2006
|
|
|
|
244,087
|
|
|
|
|
|
|
|
12,525
|
|
|
|
|
|
|
|
1,290
|
|
|
|
257,902
|
|
Adam L. Shelton
|
|
|
2008
|
|
|
|
240,000
|
|
|
|
|
|
|
|
6,553
|
|
|
|
75,212
|
|
|
|
50,605
|
|
|
|
372,370
|
|
Vice President Product
|
|
|
2007
|
|
|
|
240,000
|
|
|
|
24,000
|
|
|
|
11,250
|
|
|
|
38,250
|
|
|
|
46,532
|
|
|
|
360,032
|
|
Management and Marketing
|
|
|
2006
|
|
|
|
170,440
|
|
|
|
75,000
|
|
|
|
4,697
|
|
|
|
28,697
|
|
|
|
39,745
|
|
|
|
318,569
|
|
10
|
|
|
(1) |
|
The amounts in column (e) reflect the following 2006
restricted stock awards: Mr. Quiram, 100,000 shares;
Mr. Hammond, 40,000 shares; and Mr. Shelton,
15,000 shares. There were no restricted stock awards in
2007 or 2008 to our named executive officers. The values in the
table are those recognized for financial statement reporting
purposes in accordance with FAS 123(R), under the
assumptions included in Note 6 to our audited financial
statements included in our 2008 Annual Report on
Form 10-K
filed with the SEC, excluding assumed forfeitures. |
|
(2) |
|
The amounts in column (f) reflect the awards of options to
purchase the following numbers of shares of our common stock:
Mr. Shelton, 55,000 shares in 2006 and
44,991 shares in 2008; Mr. Quiram, 86,735 shares
in 2008; and Mr. Hammond, 38,545 shares in 2008. The
values in the table are those recognized for financial statement
reporting purposes in accordance with FAS 123(R), under the
assumptions included in Note 6 to our audited financial
statements included in our 2008 Annual Report on
Form 10-K
filed with the SEC, excluding assumed forfeitures. |
|
(3) |
|
The amounts shown in column (g) reflect the value
attributable to term life insurance premiums and company 401K
matching for each named executive officer as well as other
perquisites described below. Each named executive officer is
responsible for paying income tax on such amounts. The aggregate
dollar amount of perquisites or other personal benefits for
Mr. Hammond is less than $10,000. Pursuant to the terms of
their employment agreements, Mr. Quiram received $104,456,
$110,435 and $135,326 in 2008, 2007 and 2006, respectively, for
travel expenses from his home in Minnesota, the lease of an
apartment near our Santa Barbara headquarters, the lease of
an automobile, and special indemnity payments to cover the taxes
resulting from the payment or reimbursement of such travel and
housing expenses; and Mr. Shelton received $46,253, $46,197
and $39,745 in 2008, 2007 and 2006, respectively, for travel
expenses for travel from his home in California to our
headquarters. |
Narrative
Disclosure To Summary Compensation Table
Employment
Agreement
We entered into an employment agreement with Mr. Quiram in
2005, which was amended in 2007. The employment agreement
provides for the following:
|
|
|
|
|
Appointment as our President, Chief Executive Officer and a
member of our Board;
|
|
|
|
A base salary, which has been $315,000 per year since 2006;
|
|
|
|
A bonus of up to 100% of his base salary based upon achievement
of annual performance goals to be developed by our Compensation
Committee and Mr. Quiram;
|
|
|
|
Accelerated vesting of all his equity grants in the event of an
Involuntary Termination or Change of Control (both as defined in
his employment agreement);
|
|
|
|
A severance payment equal to one years salary and
continued benefits for one year in the event of Involuntary
Termination;
|
|
|
|
In the event of a Change of Control, whether or not he is
terminated, Mr. Quiram is entitled to (i) payment of
two times his annual base salary, (ii) 24 months of
benefits coverage, and (iii) accelerated vesting of all of
his outstanding equity grants;
|
|
|
|
Payment or reimbursement of travel expenses from his present
home in Minnesota and the lease of an apartment for
Mr. Quiram near our Santa Barbara headquarters; and a
special indemnity payment for any taxes resulting from the
payment or reimbursement of such expenses; and
|
|
|
|
Lease of an automobile.
|
Change of
Control Agreements
We also have change of control agreements with
Messrs. Hammond and Shelton. These change of control
agreements generally provide that, if the employees
employment is terminated within twenty-four months of a
11
Change of Control (as defined in the change of
control agreements) either (i) by us for any reason other
than death, Cause or Disability (as both
terms are defined in the change of control agreements) or
(ii) by the employee for Good Reason (as
defined in the change of control agreements), then the
terminated employee will be entitled to a severance benefits
salary continuation payments and continuation of health/life
insurance benefits for 18 months and accelerated vesting
for all outstanding unvested stock options and similar equity
securities held by the employee. Any payments or distributions
made to or for the benefit of the named employees under these
change of control agreements will be reduced, if necessary, to
an amount that would result in no excise taxes being imposed
under Internal Revenue Code Section 4999.
Bonuses
We maintain a bonus plan for executive officers and selected
other members of senior management. At the beginning of each
year, our Compensation Committee establishes a performance
target and assigns each named executive officer an annual target
bonus amount based on a percentage of his base salary. The
financial objectives established by our Compensation Committee
for 2008 were not met, and therefore no bonuses were paid for
2008.
Equity
Grants
For 2008, we made the following grants of stock options to our
named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
Number of Options
|
|
Exercise Price
|
|
Jeffrey A. Quiram
|
|
|
2/20/2008
|
(1)
|
|
|
36,735
|
|
|
$
|
5.12
|
|
|
|
|
2/20/2008
|
(2)
|
|
|
50,000
|
|
|
$
|
5.12
|
|
Robert B. Hammond
|
|
|
2/20/2008
|
(1)
|
|
|
18,545
|
|
|
$
|
5.12
|
|
|
|
|
2/20/2008
|
(2)
|
|
|
20,000
|
|
|
$
|
5.12
|
|
Adam L. Shelton
|
|
|
2/20/2008
|
(1)
|
|
|
20,991
|
|
|
$
|
5.12
|
|
|
|
|
2/20/2008
|
(2)
|
|
|
24,000
|
|
|
$
|
5.12
|
|
|
|
|
(1) |
|
These stock options vest over three years: 33% after one year
and ratably, monthly, for the remaining two years. |
|
(2) |
|
These stock options vest over two years: 50% after one year and
ratably, monthly, for the remaining one year. |
Outstanding
Equity Awards at Fiscal Year End
The following table sets forth certain information with respect
to outstanding equity grants on December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
|
Options (#)
|
|
Options (#)
|
|
Exercise
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Price
|
|
Date
|
(a)
|
|
(1)(b)
|
|
(2)(c)
|
|
($)(e)
|
|
(f)
|
|
Jeffrey A. Quiram
|
|
|
120,000
|
|
|
|
|
|
|
|
6.90
|
|
|
|
5/25/2015
|
|
|
|
|
|
|
|
|
86,735
|
|
|
|
5.12
|
|
|
|
2/20/2018
|
|
Robert B. Hammond
|
|
|
|
|
|
|
38,545
|
|
|
|
5.12
|
|
|
|
2/20/2018
|
|
Adam L. Shelton
|
|
|
36,667
|
|
|
|
18,333
|
|
|
|
4.03
|
|
|
|
4/24/2016
|
|
|
|
|
|
|
|
|
44,991
|
|
|
|
5.12
|
|
|
|
2/20/2018
|
|
|
|
|
(1) |
|
These options are fully vested. |
|
(2) |
|
We granted options to purchase a total of 55,000 shares to
Mr. Shelton in 2006. All remaining shares were granted in
2008. We did not grant options to our named executive officers
in 2007. Mr. Sheltons 2006 options vest 25% after one
year and ratably, monthly, for the remaining three years. The
2008 option grants vest over either two or three years as noted
above under Narrative Disclosure to Summary Compensation
Table Equity Grants. |
12
PROPOSAL TWO
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
Our Audit Committee has selected Stonefield Josephson, Inc., an
independent registered public accounting firm, to audit our
financial statements for 2009. Our Audit Committee is submitting
its selection to our stockholders for ratification. Stonefield
Josephson, Inc. has served as our auditor since 2006 and has no
financial interest of any kind in us except the professional
relationship between auditor and client. A representative of
Stonefield Josephson is expected to attend the Annual Meeting,
will be afforded an opportunity to make a statement if he or she
desires to do so, and will be available to respond to
appropriate questions by stockholders.
Required
Vote
Proposal Two requires the affirmative vote of a majority of
the votes cast on the proposal. Stockholders may vote
for or against the proposal, or they may
abstain from voting on the proposal. Abstentions and broker
non-votes will not have any effect on the outcome of this
proposal. In the event the stockholders do not approve this
proposal, our Audit Committee will reconsider the appointment of
Stonefield Josephson, Inc. as our independent auditors.
Board
Recommendation
Our Board Recommends a Vote For this
Proposal.
AUDIT
COMMITTEE REPORT
The information contained in this Audit Committee Report
shall not be deemed incorporated by reference in any filing
under the Securities Act of 1933 or the Securities Exchange Act
of 1934, whether made before or after the date hereof and
irrespective of any general incorporation language in any such
filing (except to the extent that we specifically incorporate
this information by reference) and shall not otherwise be deemed
soliciting material or filed with the
SEC or subject to Regulation 14A or 14C, or to the
liabilities of Section 18 of the Securities Exchange Act of
1934 (except to the extent that we specifically incorporate this
information by reference).
Our Audit Committee reviews our financial reporting process on
behalf of our Board. Management has the primary responsibility
for the financial statements and the reporting process,
including the system of internal controls. Our Audit Committee
has reviewed and discussed the audited financial statements with
management. In addition, our Audit Committee has discussed with
the independent auditors the matters required to be discussed by
Statements on Auditing Standards No. 61, as amended.
Our Audit Committee has also received the written disclosures
and the letter from the independent accountants required by
applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountants
communications with the audit committee concerning independence,
and has discussed with Stonefield Josephson, Inc. its
independence, including whether their provision of other
non-audit services to us is compatible with maintaining its
independence.
Our Audit Committee discussed with our independent auditors the
overall scope and plans for the respective audits. Our Audit
Committee meets with the independent auditors, with and without
management present to discuss the results of their examinations,
the evaluation of our internal controls and the overall quality
of our reporting.
Based upon the review and discussions referred to in the
foregoing paragraphs, our Audit Committee recommended to our
Board that the audited financial statements be included in our
Annual Report on
Form 10-K
for 2008 for filing with the SEC. Our Audit Committee and our
Board also have recommended, subject to stockholder approval,
the selection of our independent auditors.
AUDIT COMMITTEE
Dennis J. Horowitz (Chairman)
David W. Vellequette
John D. Lockton
Lynn J. Davis
13
FEES PAID
TO INDEPENDENT AUDITORS
Our Audit Committee regularly reviews and determines whether
specific non-audit projects or expenditures with our independent
auditor, Stonefield Josephson, Inc., potentially affects its
independence. Our Audit Committees policy is to
pre-approve all audit and permissible non-audit services
provided by Stonefield Josephson, Inc. Pre-approval is generally
provided by our Audit Committee for up to one year, as detailed
as to the particular service or category of services to be
rendered, and is generally subject to a specific budget. Our
Audit Committee may also pre-approve additional services of
specific engagements on a
case-by-case
basis.
The following table sets forth the aggregate fees billed to us
by Stonefield Josephson, Inc. for 2007 and 2008, all of which
were pre-approved by our Audit Committee:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
Audit fees(1)
|
|
$
|
236,388
|
|
|
$
|
227,849
|
|
Audit-related fees(2)
|
|
|
5,475
|
|
|
$
|
|
|
All other fees(3)
|
|
$
|
26,415
|
|
|
$
|
|
|
Total
|
|
$
|
268,278
|
|
|
$
|
227,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes fees for professional services rendered for the audit
of our annual financial statements and review of our annual
report on
Form 10-K
and for reviews of the financial statements included in our
quarterly reports on
Form 10-Q
for the first three quarters of 2008 and 2007. |
|
(2) |
|
Fees related to financial reporting or disclosure matters not
classified as audit services. |
|
(3) |
|
These fees in 2007 related to services rendered for our
S-3
registration statement. |
TRANSACTIONS
WITH RELATED PERSONS
BAOLI Investment. Under an agreement
entered into in 2007, on February 27, 2008, we issued to
Hunchun BaoLi Communication Co. Ltd. (BAOLI)
and two associated purchasers a total of
(a) 3,101,361 shares of our common stock (of which
953,065 must be voted in accordance with the votes of our other
shares, effectively giving the holder no voting power over such
shares) and (b) 611,523 shares of our Series A
Convertible Preferred Stock (convertible under certain
conditions into 6,115,230 shares of our common stock). We
received $15.0 million in cash, of which $4.0 million
was funded in 2007 and the $11.0 million balance was funded
in January 2008.
Subject to the terms and conditions of our Series A
Preferred Stock and to customary adjustments to the conversion
rate, each share of our Series A Preferred Stock is
convertible into ten shares of our common stock so long as the
number of shares of our common stock beneficially owned by the
holder and related persons following such conversion does not
exceed 9.9% of our outstanding common stock. Except for a
preference on liquidation of $.01 per share, each share of
Series A Preferred Stock is the economic equivalent of the
ten shares of common stock into which it is convertible. Except
as required by law, the Series A Preferred Stock does not
have any voting rights.
BAOLI Joint Venture. We and BAOLI have
established a joint venture to manufacture and market our
SuperLink®
interference elimination solution for the China market. Our
agreements provide that BAOLI will provide the manufacturing
expertise and financing in exchange for 55% of the equity and we
will provide an exclusive license in the China market of the
enabling technology in exchange for 45% of the equity and a
royalty on sales.
ANNUAL
REPORT TO STOCKHOLDERS
Our Annual Report on
Form 10-K
for the year ended December 31, 2008 is being mailed to our
stockholders along with this Proxy Statement.
14
OTHER
MATTERS
We know of no other matters to be submitted at our Annual
Meeting. If any other matters properly come before the meeting,
it is the intention of the persons named in the enclosed proxy
card to vote the shares they represent as our Board may
recommend.
By Order of the Board of Directors,
Jeffrey A. Quiram
President and Chief Executive Officer
Santa Barbara, California
April 17, 2009
15
DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SUPERCONDUCTOR TECHNOLOGIES INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 2009
The undersigned stockholder of SUPERCONDUCTOR TECHNOLOGIES INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated April 17, 2009,
and hereby appoints each of Jeffrey A. Quiram and William J. Buchanan, or any of them, as proxy and attorney-in-fact with full power of substitution,
on behalf and in the name of the undersigned, to represent the undersigned at the Annual Meeting of Stockholders of Superconductor Technologies Inc.
to be held on Monday, May 18, 2009 at 11:00 a.m., local time, at the offices of Superconductor Technologies Inc., located at 460 Ward Drive,
Santa Barbara, California and at any adjournment or adjournments thereof, and to vote all shares of capital stock that the undersigned would be
entitled to vote if then and there personally present, on the matters set forth on the reverse side.
[SEE REVERSE SIDE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
[BACK OF PROXY]
DETACH HERE
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[X] Please mark votes as in this example
1. TO ELECT TWO CLASS 2 DIRECTORS.
Nominees: Lynn J. Davis and Dennis J. Horowitz
|
|
|
|
|
o FOR ALL NOMINEES
|
|
o WITHHOLD ALL NOMINEES
|
|
o FOR ALL NOMINEES EXCEPT |
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the For All Nominees Except box and write that nominees name in the space provided above.)
|
|
|
|
|
|
|
2. PROPOSAL TO RATIFY THE SELECTION OF STONEFIELD JOSEPHSON, INC. AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF SUPERCONDUCTOR TECHNOLOGIES INC. FOR 2009.
|
|
FOR
o
|
|
AGAINST
o
|
|
ABSTAIN
o |
|
|
As to any other matters that may properly come before the meeting or any adjournments thereof, the proxy holders are authorized to vote in accordance with their best judgment.
|
|
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|
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
|
|
o |
|
|
|
PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE MEETING
|
|
o |
(This Proxy should be marked, dated and signed by the stockholder(s) exactly as his or her name appears hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate. If shares are held by joint tenants or as community property, both should sign.)
|
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|
Signature:
|
|
|
|
Date:
|
|
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|
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|
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|
|
Signature:
|
|
|
|
Date:
|
|
|
|
|
|
|
|
|
|
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, AND FOR THE RATIFICATION OF THE APPOINTMENT OF STONEFIELD JOSEPHSON, INC. AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF SUPERCONDUCTOR TECHNOLOGIES INC. FOR 2009, AND AS THE PROXY HOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.