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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Filed by a Party other than the Registrant o
Filed by a Party other than the Registrant o
Check the appropriate box:
| o | Preliminary Proxy Statement | |||
| o | Confidential, For Use of the Commission Only (as permitted by 14a-6(e)(2)) | |||
| þ | Definitive Proxy Statement | |||
| o | Definitive Additional materials | |||
| o | Soliciting Material Pursuant To § 240.14a-12 |
SUPERCONDUCTOR TECHNOLOGIES INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
þ
No fee required.
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of securities to which transaction applies:
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securities to which transaction applies:
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or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
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NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 11,
2011
To Our Stockholders:
The Annual Meeting of Stockholders (our “Annual
Meeting”) of Superconductor Technologies Inc. will be
held on Wednesday, May 11, 2011, 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 1 directors to hold office
until our 2014 Annual Meeting of Stockholders and until their
successors are elected and qualified;
2. To ratify the appointment of Marcum LLP as our
independent registered public accounting firm for 2011; and
3. To transact such other business as may properly come
before our Annual Meeting or any adjournment(s) or
postponement(s) thereof.
Only stockholders of record at the close of business on
April 4, 2011 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 Annual
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 7, 2011
Important
Notice Regarding Availability of Proxy Materials for the 2011
Annual Meeting of Stockholders to be Held on May 11, 2011
Annual Meeting of Stockholders to be Held on May 11, 2011
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.
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ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 11, 2011
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 Wednesday, May 11,
2011, 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 1 directors to hold office until our 2014 Annual
Meeting of Stockholders and until their successors are elected
and qualified; (ii) the ratification of the appointment of
Marcum LLP as our independent registered public accounting firm
for 2011; 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 7, 2011.
INFORMATION
CONCERNING SOLICITATION AND VOTING
Record
Date
Only holders of record of our common stock at the close of
business on April 4, 2011 (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
33,023,687 shares of our 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 our 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 1 directors,
and (ii) FOR the ratification of the selection of Marcum
LLP as our independent registered public accounting firm for
2011. 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
proxy card 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
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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 the holders of a majority of the stock issued
and outstanding on the Record Date and entitled to vote at our
Annual Meeting, present in person or by proxy.
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.
If your shares of common stock are held by a bank, broker or
other nominee, please follow the instructions you receive from
your bank, broker or other nominee to have your shares of common
stock voted. If your shares are held by a broker, the broker
will ask you how you want your shares to be voted. If you give
the broker instructions, then your shares will be voted as you
direct. If you do not give instructions, then for the
ratification of the independent registered public accounting
firm, the broker may vote your shares in its discretion, but for
the election of directors the broker may not be entitled to vote
your shares at all.
Deadline
for Receipt of Stockholder Proposals for 2012 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 2012 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 9, 2011 in order to be considered for inclusion in
our proxy materials.
Stockholders intending to present a proposal at our 2012 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 stockholder’s 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 10th day following the day on
which such notice of the date of the meeting was mailed or such
public disclosure was made.
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PROPOSAL ONE
ELECTION OF CLASS 1 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 and until
their successors have been duly elected and qualified.
Class 1 directors will be elected at our Annual
Meeting. The nominees for election as the
Class 1 directors are Mr. Quiram and
Mr. Kaplan. Each Class 1 director will serve
until our 2014 Annual Meeting of Stockholders and until his
successor is elected and qualified. Assuming the nominees are
elected, we will have six directors serving as follows:
|
Class 1 directors: Jeffrey A. Quiram, Martin A.
Kaplan
|
Terms expire at our 2014 annual meeting of stockholders. | |
|
Class 2 directors: Lynn J. Davis, Dennis
J. Horowitz
|
Terms expire at our 2012 annual meeting of stockholders. | |
|
Class 3 directors: John D. Lockton, David W.
Vellequette
|
Terms expire at our 2013 annual meeting of stockholders. |
The accompanying proxy card grants the proxy holder the power to
vote the proxy for substitute nominees in the event that any
nominee becomes unavailable to serve as a
Class 1 director. Management presently has no
knowledge that any nominee will refuse or be unable to serve as
a Class 1 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. Quiram
and “For” Mr. Kaplan.
CORPORATE
GOVERNANCE AND BOARD MEETINGS AND COMMITTEES
Corporate
Governance Policies and Practices
The following is a summary of our corporate governance policies
and practices:
| • | 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 under the rules of the SEC and NASDAQ. | |
| • | We have a Code of Business Conduct and Ethics for all of our employees, including our Chief Executive Officer and Chief Financial Officer. If we amend any provision of our Code of Business Conduct and Ethics that applies to our Chief Executive Officer or Chief Financial 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 or Chief Financial Officer (or any persons performing similar functions), we will disclose those amendments or waivers on our website at www.suptech.com/Investors/Corporate Governance/Amendments and Waivers to the Code of Conduct within four business days following the date of the amendment or waiver. | |
| • | Our Audit Committee reviews and approves all related-party transactions. | |
| • | 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, |
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| without management participation, all hotline activity reports concerning accounting, internal controls or auditing matters. |
Board
Leadership Structure and Role in Risk Oversight
Our Board’s current policy is to separate the role of
Chairman of our Board and Chief Executive Officer. Our Board
believes that this structure combines accountability with
effective oversight. This structure also allows us to benefit
from the experience and knowledge of our Chairman, who has been
on our board since 2002, while reflecting the responsibilities
and contributions of our Chief Executive Officer. In addition,
we believe that the independence of our Chairman provides
additional oversight over the decisions of our management and
places additional control in the hands of our independent
directors.
Our Board is actively involved in overseeing our risk management
through our Audit Committee. Under its charter, our Audit
Committee is responsible for inquiring of management and our
independent auditors about significant areas of risk or exposure
and assessing the steps management has taken to minimize such
risks. Our Board’s role in risk oversight has not affected
our Board’s determination that the separation of roles of
Chairman and Chief Executive Officer is most appropriate for our
company.
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
except for one attended our 2010 Annual Meeting of Stockholders.
Board
Meetings and Committees
During 2010, each of our directors attended at least 75% of the
aggregate 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 2010. Our Board
has four 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 Corporate Development Committee (our
“Corporate Development Committee”), a
Compensation Committee (our “Compensation
Committee”) and a Governance and Nominating Committee
(our “Nominating Committee”). Our Audit
Committee, Corporate Development 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 them with the SEC. Our Audit Committee met
eight times during 2010. The current members of our Audit
Committee are Messrs. Horowitz (Chairman), Lockton, Davis
and Vellequette.
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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.”
Corporate
Development Committee
Our Corporate Development Committee assists our Board in
fulfilling its responsibilities to our stockholders relative to
the review, evaluation and approval of certain strategic
transactions. Our Corporate Development Committee met two times
during 2010. The current members of our Corporate Development
Committee are Messrs. Vellequette (Chairman), Kaplan and
Horowitz.
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 or other equity awards to be granted to executive
officers, within a range associated with the individual
executive’s salary level, and presents this to our
Compensation Committee for its review and approval.
Our Compensation Committee uses available data to review and
compare our compensation levels to market compensation levels,
taking into consideration the other companies’ size, the
industry, and the individual executive’s 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. No compensation consultant was
engaged to provide advice or recommendations on our executive or
director compensation for 2010.
Our Compensation Committee also reviews the compensation of
directors and recommends to our Board the amounts and types of
cash to be paid and equity awards to be made to our directors.
Our Compensation Committee met four times during 2010. 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 will only delegate its authority to the extent
consistent with our certificate of incorporation and bylaws and
applicable laws, regulations and listing standards.
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 2010).
The Stock Option Committee met one time during 2010. 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
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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. Lockton (Chairman), Kaplan, and Vellequette. Our
Nominating Committee met four times in 2010. 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 candidate’s 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.
Our Nominating Committee has no predefined minimum criteria for
selecting Board nominees, although it believes that (i) all
directors should share qualities such as: an ability to make
meaningful contributions to our board; independence; strong
communication and analytical skills; and a reputation for
honesty and ethical conduct; and (ii) independent directors
should share qualities such as: experience at the corporate,
rather than divisional level, in multi-national organizations as
large as or larger than us; and relevant, non-competitive
experience. Our Nominating Committee does not have a formal
policy with respect to diversity. However, our Nominating
Committee and our Board believe that it is important that we
have Board members whose diversity of skills, experience and
background are complementary to those of our other Board
members. In considering candidates for our Board, our Nominating
Committee considers the entirety of each candidate’s
credentials. 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 directors who are also our employees do not receive
additional compensation for their service on our Board. 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. Each director receives a $5,000 annual retainer for
service as a member of our four standing committees. In
addition, on the date of each annual meeting of stockholders,
each director other than our Chairman of the Board receives an
equity grant of 10,000 shares of our common stock, and our
Chairman of the Board receives a grant of 15,000 shares. In
addition to the foregoing equity grants, new directors receive
an initial grant of 25,000 shares of our common stock on
the date that they join our Board. Initial equity grants vest in
three
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equal installments, on each anniversary of the grant date, and
annual grants vest in two equal installments, on each
anniversary of the grant date. Our Board provides an additional
$15,000 annual retainer (which is paid bi-annually) as
compensation for service as chairman of our Audit Committee and
an additional $10,000 annual retainer for service as chairman of
each of our Corporate Development Committee (beginning in 2011),
Compensation Committee and Nominating Committee.
Non-employee directors do not receive compensation from us other
than as a director or as committee member. There are no family
relationships among our directors and executive officers.
Non-employee
Director Compensation Table
The following table summarizes the compensation paid to our
non-employee directors for 2010:
|
Fees Earned or |
||||||||||||
|
Paid in Cash |
Stock Awards |
Total |
||||||||||
|
Name
|
($) | ($)(1) | ($) | |||||||||
|
John D. Lockton
|
46,917 | 39,300 | 86,217 | |||||||||
|
Lynn J. Davis
|
35,000 | 26,200 | 61,200 | |||||||||
|
Dennis J. Horowitz
|
40,000 | 26,200 | 66,400 | |||||||||
|
Martin A. Kaplan
|
38,083 | 68,200 | 106,283 | |||||||||
|
David W. Vellequette
|
30,000 | 26,200 | 56,200 | |||||||||
| (1) | The amounts in this column represent the aggregate grant date fair value of the shares of restricted common stock calculated in accordance with Accounting Standards Codification (“ASC”) 718, under the assumptions included in Note 5 to our audited financial statements for the year ended December 31, 2010 included in our Annual Report on Form 10-K filed on March 21, 2011. As of December 31, 2010: (i) Mr. Lockton had 32,000 options to purchase common stock and 22,500 unvested shares of restricted common stock; (ii) Mr. Davis had 21,400 options to purchase common stock and 15,000 unvested shares of restricted common stock; (iii) Mr. Horowitz had 30,500 options to purchase common stock and 15,000 unvested shares of restricted common stock; (iv) Mr. Kaplan had 23,210 options to purchase common stock and 40,000 unvested shares of restricted common stock; and (v) Mr. Vellequette had 15,000 options to purchase common stock and 15,000 unvested shares of restricted common stock. |
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 4, 2011:
|
Name
|
Age
|
Position
|
||||
|
Martin A. Kaplan(2)(3)(4)
|
73 | Chairman of the Board | ||||
|
Lynn J. Davis(1)(3)(5)
|
64 | Director | ||||
|
Dennis J. Horowitz(1)(2)(3)
|
64 | Director | ||||
|
John D. Lockton(1)(4)
|
73 | Director | ||||
|
David W. Vellequette(1)(2)(4)
|
54 | Director | ||||
|
Jeffrey A. Quiram(5)
|
50 | President, Chief Executive Officer and Director | ||||
|
William J. Buchanan
|
62 | Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
|
Robert B. Hammond, Ph.D.
|
63 | Senior Vice President, Chief Technical Officer | ||||
|
Robert L. Johnson
|
60 | Senior Vice President, Operations | ||||
|
Terry A. White
|
59 | Vice President, Worldwide Sales | ||||
|
Adam L. Shelton
|
44 | Vice President, Product Management and Marketing | ||||
|
Thomas R. Giunta
|
50 | Vice President, Engineering | ||||
7
Table of Contents
| (1) | Member of our Audit Committee. | |
| (2) | Member of our Corporate Development Committee. | |
| (3) | Member of our Compensation Committee. | |
| (4) | Member of our Governance and Nominating Committee. | |
| (5) | Member of our Stock Option Committee. |
Each of our directors, including each of our current nominees,
was nominated based on the assessment of our Nominating
Committee and our Board that he has demonstrated: an ability to
make meaningful contributions to our Board; independence; strong
communication and analytical skills; and a reputation for
honesty and ethical conduct. Our Board consists of, and seeks to
continue to include, persons whose diversity of skills,
experience and background are complementary to those of our
other directors.
Martin A. Kaplan has served on our board since
2002 and was named Chairman of the Board in October 2010. Since
2000, Mr. Kaplan has served as Chairman of the Board of JDS
Uniphase, Inc., a telecommunications equipment company. 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 served as a director of
Redback Networks from 2004 until 2007 when it was acquired by
Ericsson and of Tekelec from 2003 until 2010. Mr. Kaplan
earned a B.S. in engineering from California Institute of
Technology. Our Board has determined that Mr. Kaplan is
qualified to serve as a director because he has extensive
business leadership and technical experience in
telecommunications.
Lynn J. Davis has served on our Board since
2005. He served as President, Chief Operating Officer
and director of August Technology, a manufacturer of inspection
equipment for the semiconductor fabrication industry from 2005
to 2006. 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. Our Board has determined that
Mr. Davis is qualified to serve as a director because he
has extensive knowledge in various management roles in the
telecommunications industry, including manufacturing, sales and
marketing. In addition, as a venture capitalist, Mr. Davis
has worked with smaller companies and brings a valuable
entrepreneurial approach to management and compensation issues.
Dennis J. Horowitz has served on our Board since
1990. Mr. Horowitz is currently, and has been since 2005,
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 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 was a director of
Technitrol Inc from 2005 to 2006. Mr. Horowitz holds an
M.B.A. and a B.A. in economics from St. John’s University.
Our Board has determined that Mr. Horowitz is qualified to
serve as a director because his leadership and business skills,
along with his long-term involvement with us as a director,
contribute an in-depth knowledge of our operations and a sense
of strategic continuity to our Board.
John D. Lockton has served on our Board since 1997
and was Chairman of our Board from 2001 until October 2010. From
1998 until his retirement in 2008, Mr. Lockton served as a
founder and was initial chairman of IPWireless, Inc., a wireless
internet access and IP telephony service provider of 4G
technology. From 1991 to 1998, he was President, Chief Executive
Officer and a director of International Wireless Communications,
Inc., an operator of cellular systems. From 1990 to 1991 he was
Managing Partner of Corporate Technology Partners, a joint
8
Table of Contents
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 company’s Board of Directors until 1994. From 1983 to
1987 Mr. Lockton was Executive Vice President of Pacific
Bell (now part of AT&T). From 1980 to 1983 he was President
of Warner Amex (now Warner) Cable Television, Inc. From 1968 to
1980 Mr. Lockton held various senior positions at
Dun & Bradstreet, including President of
Dun & Bradstreet International and President of
Moody’s Investors Service. Mr. Lockton is a graduate
of Yale University (Phi Beta Kappa), Harvard Law School, and
holds an Executive M.B.A. from Columbia University. Our Board
has determined that Mr. Lockton is qualified to serve as a
director because he has extensive knowledge in
telecommunications, both as a director and in management
positions with various operational responsibilities.
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 and 2002,
Mr. Vellequette held positions of increasing responsibility
at Cisco Systems, first as Corporate Controller of StrataCom
Corporation (acquired by Cisco in 1996) and from 2000 as
Vice President of Finance. From 1984 to 1992,
Mr. Vellequette was Corporate Controller of 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. Our Board has determined that Mr. Vellequette
is qualified to serve as a director because he has extensive
knowledge about public and financial accounting matters.
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. Our Board
has determined that Mr. Quiram is qualified to serve as a
director because he has extensive knowledge about product
development, business planning, and complex manufacturing. In
addition, he has extensive knowledge about our corporate
operations and market activities from serving as our Chief
Executive Officer.
William J. Buchanan has been our Chief Financial
Officer since May 2010. Mr. Buchanan joined us in 1998 and
served as our Controller from 2000 to May 2010. 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 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. He served
as our Vice President of Technology, and Chief Technical
Officer, from August 1990 to December 1992. 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
9
Table of Contents
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.
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 dean’s 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 Motorola’s 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 4, 2011 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
|
3,269,345 | (1) | 9.9 | % | ||||
|
3/F, Block B, Tongfang Information
Harbor, 11 Langshan, Nanshan Dist., Shenzhen, China 518057 |
||||||||
|
Kopp Investment Advisors, LLC
|
5,794,372 | (2) | 17.5 | % | ||||
|
7701 France Avenue South, #500
Edina, MN 55435 |
||||||||
|
Jeffrey A. Quiram
|
554,237 | 1.7 | % | |||||
|
William J. Buchanan
|
175,635 | * | ||||||
|
Robert L. Johnson
|
201,710 | * | ||||||
|
Robert B. Hammond
|
247,187 | * | ||||||
|
Adam L. Shelton
|
239,364 | * | ||||||
|
Thomas R. Giunta
|
179,249 | * | ||||||
|
Terry A. White
|
244,942 | * | ||||||
|
John D. Lockton
|
62,000 | * | ||||||
|
Dennis J. Horowitz
|
50,900 | * | ||||||
|
Lynn J. Davis
|
41,400 | * | ||||||
|
Martin A. Kaplan
|
71,130 | * | ||||||
|
David W. Vellequette
|
35,000 | * | ||||||
|
All executive officers and directors as a group (12 persons)
|
2,102,754 | 6.4 | % | |||||
| * | Less than 1%. |
10
Table of Contents
| (1) | The number of shares includes 2,627,361 shares of common stock held by China Poly Group Ltd. (“China Poly Group”), Hunchun Baoli Communications Co., Ltd. (“Hunchun Baoli”), Baoli Investment Group Ltd. (“Baoli Investment”), and Mr. Xiaoxiong Zhang (“Mr. Zhang”) and certain of their affiliates (collectively, “BAOLI”), and (and subject to the assumptions noted below), 641,984 shares of common stock issuable upon conversion of our Series A Preferred Stock (“Preferred Stock”) within 60 days. Of such shares, 600,000 shares held by Baoli Investment and 353,065 shares held by affiliates continue to be subject to an Irrevocable Proxy and Voting Agreement pursuant to which the shares must be voted in proportion to the other shares voting on an issue. BAOLI owns 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” (as defined in Rule 13d-3(d)(i) under the Exchange Act) by the holder and related parties following such conversion does not exceed 9.9% of our outstanding common stock. Assuming that a conversion by BAOLI would have neither the purpose nor effect of changing or influencing control over us, then not more than 64,198 shares of BAOLI’s Series A Preferred Stock is currently convertible (representing 641,984 shares of our common stock). Under Rule 13d-3(d)(i) if the conversion by BAOLI would have such a purpose or effect, then none of BAOLI’s Series A Preferred Stock is currently convertible. Each of China Poly Group, Hunchun Baoli and Baoli Investment is a company organized under the laws of the People’s Republic of China. Mr. Zhang is the majority and controlling shareholder of BAOLI. We are aware that BAOLI filed a joint Schedule 13G/A with the SEC on September 3, 2010, stating that, as of December 31, 2009, it is the beneficial owner of a total of 2,636,895 shares. In accordance with Item 403 of the SEC Regulation SK, we have not used the total stated in such 13G/A because it appears to differ in various respects from our records. | |
| (2) | Based solely on information reported in a Schedule 13D/A filed with the SEC on October 8, 2010 and Form 4 filed with the SEC on February 14, 2011 by Kopp Investment Advisors, LLC (“KIA”), Kopp Holding Company, LLC (“KHCLLC”), and LeRoy C. Kopp (“Mr. Kopp”), KIA is the beneficial owner of and has sole voting authority with respect to 4,534,400 of such shares and shared dispositive power with respect to 1,259,972 of such shares. | |
| (3) | Includes shares issuable upon the exercise of stock options that are exercisable within 60 days of April 4, 2011 as follows: Mr. Quiram, 217,745 shares; Mr. Buchanan 44,273 shares; Mr. Johnson 44,760 shares; Mr. Hammond 45,003 shares; Mr. Shelton, 106,283 shares; Mr. Giunta, 56,029 shares; Mr. White, 140,009 shares; Mr. Lockton, 32,000 shares; Mr. Horowitz, 30,500 shares; Mr. Davis, 21,400 shares; Mr. Kaplan, 23,000 shares; Mr. Vellequette, 15,000 shares; and all executive officers and directors as a group, 776,002 shares. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers and significant
stockholders (defined by statute as stockholders beneficially
owning more than 10% of our common stock) to file with the SEC
initial reports of beneficial ownership, and reports of changes
in beneficial ownership, of our common stock. Directors,
executive officers and significant stockholders are required by
SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely on a review of
the copies of Forms 3, 4 and 5 (and amendments thereto)
filed with the SEC and submitted to us, and on written
representations by certain directors and executive officers
received by us, we believe that all of our executive officers,
directors and significant stockholders complied with all
applicable filing requirements under Section 16(a) during
2010. However, on September 3, 2010, Mr. Zhang
Xiaoxiong filed a late Form 5 for fiscal 2009 to report
gifts made on November 23, 2009.
11
Table of Contents
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table sets forth for 2010, 2009 and 2008 the base
salary and other compensation of our (i) President and
Chief Executive Officer and (ii) our other two most highly
compensated officers for 2010 (our “named executive
officers”):
|
Non-Equity |
||||||||||||||||||||||||||||
|
Stock |
Option |
Incentive Plan |
All Other |
|||||||||||||||||||||||||
|
Salary |
Awards |
Awards |
Compensation |
Compensation |
Total |
|||||||||||||||||||||||
|
Name and Principal Position
|
Year | ($) | ($)(1) | ($)(1) | ($) | ($)(2) | ($) | |||||||||||||||||||||
|
Jeffrey A. Quiram
|
2010 | 321,179 | 86,536 | 66,288 | — | 102,925 | 576,928 | |||||||||||||||||||||
|
President, Chief
|
2009 | 315,000 | 157,629 | — | — | 109,045 | 581,674 | |||||||||||||||||||||
|
Executive Officer, Director
|
2008 | 315,000 | — | 329,367 | — | 108,923 | 753,290 | |||||||||||||||||||||
|
Robert B. Hammond
|
2010 | 251,162 | 50,755 | 38,879 | — | 1,980 | 342,776 | |||||||||||||||||||||
|
Senior Vice President,
|
2009 | 246,330 | 82,322 | — | — | 6,056 | 334,708 | |||||||||||||||||||||
|
Chief Technical Officer
|
2008 | 246,330 | — | 140,367 | — | 6,323 | 393,020 | |||||||||||||||||||||
|
Adam L. Shelton
|
2010 | 244,708 | 49,450 | 37,879 | — | 42,340 | 374,377 | |||||||||||||||||||||
|
Vice President Product
|
2009 | 240,000 | 80,549 | — | — | 44,804 | 365,353 | |||||||||||||||||||||
|
Management and Marketing
|
2008 | 240,000 | — | 170,849 | — | 50,605 | 461,453 | |||||||||||||||||||||
| (1) | The Option Awards and Stock Awards amounts represent the aggregate grant date fair value of the options to purchase common stock or shares of restricted common stock (as applicable) calculated in accordance with ASC 718, under the assumptions included in Note 5 to our audited financial statements for the year ended December 31, 2010 included in our Annual Report on Form 10-K filed on March 21, 2011. | |
| (2) | The All Other Compensation amounts shown reflect the value attributable to term life insurance premiums and company 401(k) 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 $102,235, $104,578 and $104,456 in 2010, 2009 and 2008, 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 $42,040, $40,492 and $46,253 in 2010, 2009 and 2008, 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 was $315,000 per year for 2008-2009 and increased to $324,400 during 2010; | |
| • | 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 year’s salary and continued benefits for one year in the event of Involuntary Termination; |
12
Table of Contents
| • | 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 employee’s
employment is terminated within twenty-four months of a
“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 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 other 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.
Non-Equity
Incentive Compensation
We maintain a bonus plan for executive officers and selected
other members of senior management. Under the plan, our
Compensation Committee establishes financial and other pertinent
objectives for the period and assigns each executive officer an
annual target bonus amount based on a percentage of his or her
base salary, which ranges from 20% to 100%. Our Compensation
Committee also retains the authority to award discretionary
bonuses for performance in other aspects of the business not
covered by the established goals. At the beginning of 2010, our
Compensation Committee decided, based on then-current economic
conditions, to not establish financial performance targets under
this plan for 2010 and to not award cash bonuses based on
financial objectives in 2010. Our Compensation Committee did
reserve its right to award discretionary bonuses if appropriate;
however no bonuses were awarded for 2010.
Equity
Grants
For 2010, we made the following grants of restricted stock
awards and options to our named executive officers:
|
Option |
||||||||||||||||||||
|
Awards: |
Exercise |
Grant Date |
||||||||||||||||||
|
Number of |
Price |
Fair Value of |
||||||||||||||||||
|
Stock Awards: |
Shares |
of Option |
Stock & |
|||||||||||||||||
|
Number of |
Underlying |
Awards |
Option |
|||||||||||||||||
|
Name
|
Grant Date | Shares (#)(1) | Options (#)(2) | ($/Share) | Awards ($)(3) | |||||||||||||||
|
Jeffrey A Quiram
|
05/06/2010 | 33,029 | — | 0.00 | 86,536 | |||||||||||||||
| 05/06/2010 | — | 33,029 | 2.62 | 66,288 | ||||||||||||||||
|
Robert B Hammond
|
05/06/2010 | 19,372 | — | 0.00 | 50,755 | |||||||||||||||
| 05/06/2010 | — | 19,372 | 2.62 | 38,879 | ||||||||||||||||
|
Adam L Shelton
|
05/06/2010 | 18,874 | — | 0.00 | 49,450 | |||||||||||||||
| 05/06/2010 | — | 18,874 | 2.62 | 37,879 | ||||||||||||||||
| (1) | These restricted stock awards were granted to the named executive officers on May 6, 2010. | |
| (2) | These stock options were granted as part of our regular performance review process and vest based on the executive continuing to provide services to us through the applicable vesting dates. | |
| (3) | The value of a stock award or stock option award is based on the fair market value as of the grant date of such award determined pursuant to ASC 718. Stock awards consist of restricted stock awards. The exercise price for all options granted to the named executive officers is 100% of the fair market value of the shares on the grant date. |
13
Table of Contents
Outstanding
Equity Awards at Fiscal Year End
The following table sets forth certain information with respect
to outstanding options and unvested shares of restricted stock
on December 31, 2010:
| Option Awards | Stock Awards | |||||||||||||||||||||||
|
Number of |
Market |
|||||||||||||||||||||||
|
Securities |
Number of |
Number of |
Value of |
|||||||||||||||||||||
|
Underlying |
Securities |
Shares or |
Shares or |
|||||||||||||||||||||
|
Unexercised |
Underlying |
Units of |
Units of |
|||||||||||||||||||||
|
Options (#) |
Unexercised |
Option |
Option |
Stock That |
Stock That |
|||||||||||||||||||
|
Exercisable |
Options (#) |
Exercise |
Expiration |
Have Not |
Have Not |
|||||||||||||||||||
|
Name
|
(1) | Unexercisable | Price ($) | Date | Vested | Vested ($)(6) | ||||||||||||||||||
|
Jeffrey A Quiram
|
120,000 | — | 6.90 | 5/25/2015 | — | — | ||||||||||||||||||
| 50,000 | — | 5.12 | 2/20/2018 | — | — | |||||||||||||||||||
| 34,715 | 2020 | (2) | 5.12 | 2/20/2018 | — | — | ||||||||||||||||||
| — | 33,029 | (3) | 2.62 | 5/06/2020 | ||||||||||||||||||||
| — | — | — | — | 78,815 | (4) | 119,799 | ||||||||||||||||||
| — | — | — | — | 16,515 | (5) | 25,103 | ||||||||||||||||||
| — | — | — | — | 16,514 | (3) | 25,101 | ||||||||||||||||||
|
Robert B Hammond
|
17,000 | — | 5.12 | 2/20/2018 | — | — | ||||||||||||||||||
| 20,360 | 1,185 | (2) | 5.12 | 2/20/2018 | — | — | ||||||||||||||||||
| — | 19,372 | (3) | 2.62 | 5/06/2020 | ||||||||||||||||||||
| — | — | — | — | 41,161 | (4) | 62,565 | ||||||||||||||||||
| — | — | — | — | 9,686 | (5) | 14,723 | ||||||||||||||||||
| — | — | — | — | 9,686 | (3) | 14,723 | ||||||||||||||||||
|
Adam L Shelton
|
55,000 | — | 4.03 | 4/24/2016 | — | — | ||||||||||||||||||
| 24,000 | — | 5.12 | 2/20/2018 | — | — | |||||||||||||||||||
| 19,837 | 1,154 | (2) | 5.12 | 2/20/2018 | — | — | ||||||||||||||||||
| — | 18,874 | (3) | 2.62 | 5/06/2020 | ||||||||||||||||||||
| — | — | — | — | 40,275 | (4) | 61,218 | ||||||||||||||||||
| — | — | — | — | 9,437 | (5) | 14,344 | ||||||||||||||||||
| — | — | — | — | 9,437 | (3) | 14,344 | ||||||||||||||||||
| (1) | These options are fully vested. | |
| (2) | These options fully vested on February 20, 2011. | |
| (3) | These shares will vest in three annual installments beginning May 6, 2011. | |
| (4) | These shares vested January 20, 2011. | |
| (5) | 50% of these shares vest on each of May 6, 2012 and May 6, 2013. | |
| (6) | The market value is calculated using the closing share price of our common stock of $1.52 on December 31, 2010. |
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected Marcum LLP an independent
registered public accounting firm, to audit our financial
statements for 2011. Our Audit Committee is submitting its
selection to our stockholders for ratification. Marcum LLP has
served as our auditor since October 2010 and has no financial
interest of any kind in us except the professional relationship
between auditor and client. A representative of Marcum LLP, as
well as a representative of Stonefield Josephson, Inc., which
served as our independent registered public accounting firm for
part of 2010, are expected to attend our 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.
On October 1, 2010, our then independent registered public
accounting firm, Stonefield Josephson, Inc.
(“Stonefield”) combined its practice with
Marcum LLP. Accordingly, effective October 1, 2010,
Stonefield effectively resigned as our independent registered
public accounting firm and Marcum LLP became our independent
registered public accounting firm. This change in our
independent registered public accounting firm was approved by
our Audit Committee on October 4, 2010.
The principal accountant’s reports of Stonefield on our
financial statements as of and for the years ended
December 31, 2009 and 2008 did not contain any adverse
opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the years ended December 31, 2009 and 2008 and
through October 1, 2010, the effective date of the
combination of the practices of Stonefield and Marcum LLP, there
were no disagreements with Stonefield on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which if not
resolved to Stonefield’s satisfaction would have caused it
to make reference thereto in connection with its reports on the
financial statements for such years. During the years ended
December 31, 2009 and 2008 and through October 1,
2010, there were no reportable events of the type described in
Item 304(a)(1)(v) of
Regulation S-K.
During the years ended December 31, 2009 and 2008 and
through the effective date of the combination of the practices
of Stonefield and Marcum LLP, we did not consult with Marcum LLP
with respect to any of (i) the application of accounting
principles to a specified transaction, either completed or
proposed; (ii) the type of audit opinion that might be
rendered on our financial statements; or (iii) any matter
that was either the subject of a disagreement (as defined in
Item 304(a)(1)(iv) of
Regulation S-K)
or an event of the type described in Item 304(a)(1)(v) of
Regulation S-K.
The information on the change of independent registered public
accounting firm described above was reported on a
Form 8-K/A
filed with the SEC on October 27, 2010. We provided
Stonefield with a copy of the disclosures contained in such
Form 8-K/A
and requested Stonefield to furnish us with a letter addressed
to the SEC stating whether it agreed with the statements made
therein. A copy of such letter, dated October 27, 2010,
furnished by Stonefield, was filed as Exhibit 16.1 to such
Form 8-K/A.
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 will have the
effect of voting against the proposal, but 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 Marcum LLP as our
independent registered public accounting firm.
Board
Recommendation
Our Board Recommends a Vote “For” the
Ratification of the Appointment of our Independent Registered
Public Accounting Firm.
15
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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 request that
this information be treated as soliciting material or
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
our independent registered public accounting firm the matters
required to be discussed by Statements on Auditing Standards
No. 61, as amended (AICPA, Professional Standards,
Vol. 1. AU section 380) as adopted by the Public
Company Accounting Oversight Board in Rule 3200T.
Our Audit Committee has also received the written disclosures
and the letter from our independent registered public accounting
firm required by applicable requirements of the Public Company
Accounting Oversight Board regarding their communications with
the audit committee concerning independence, and has discussed
with them their independence, including whether their provision
of other non-audit services to us is compatible with maintaining
their independence.
Our Audit Committee discussed with our independent registered
public accounting firm the overall scope and plans for the
audit. Our Audit Committee meets with them, 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 2010 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Dennis J. Horowitz (Chairman)
David W. Vellequette
John D. Lockton
Lynn J. Davis
Dennis J. Horowitz (Chairman)
David W. Vellequette
John D. Lockton
Lynn J. Davis
FEES PAID
TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee regularly reviews and determines whether
specific non-audit projects or expenditures with our independent
registered public accounting firm, Marcum LLP, potentially
affects its independence. Our Audit Committee’s policy is
to pre-approve all audit and permissible non-audit services
provided by Marcum LLP. 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. and Marcum LLP for 2010 and 2009,
all of which were pre-approved by our Audit Committee:
| Year Ended December 31, | ||||||||
| 2010 | 2009 | |||||||
|
Audit fees(1)
|
$ | 267,317 | $ | 219,613 | ||||
|
All other fees(2)
|
$ | 41,398 | $ | 21,319 | ||||
|
Total
|
$ | 308,715 | $ | 240,932 | ||||
16
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| (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 2010 and 2009. | |
| (2) | These fees related to services rendered for our S-1 and S-3 registration statements. |
TRANSACTIONS
WITH RELATED PERSONS
We and Hunchun BaoLi Communication Co. Ltd.
(“BAOLI”), who beneficially owns more than 5%,
which is the required disclosure threshold, of our stock, 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, 2010 is being mailed to our
stockholders along with this Proxy Statement.
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
President and Chief Executive Officer
Santa Barbara, California
April 7, 2011
17
Table of Contents
DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SUPERCONDUCTOR TECHNOLOGIES INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 11, 2011
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 7, 2011, 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 Wednesday, May 11, 2011 at 11:00 a.m., local time,
at the offices of Superconductor Technologies Inc., located at 460 Ward Drive, Santa Barbara,
California 93111 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.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
x Please mark votes as in this example
1. TO ELECT TWO CLASS 1 DIRECTORS.
Nominees: Jeffrey A. Quiram and Martin A. Kaplan
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 nominee’s name in the space provided above.)
2. PROPOSAL TO RATIFY THE SELECTION
OF MARCUM LLP AS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM OF SUPERCONDUCTOR
TECHNOLOGIES INC. FOR 2011.
FOR
|
AGAINST | ABSTAIN | ||
o
|
o | 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.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT.
|
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
must sign and date.)
Signature:
|
Date: | |||||||
Signature:
|
Date: | |||||||
THIS PROXY, WHEN PROPERLY EXECUTED, 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 MARCUM LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF SUPERCONDUCTOR TECHNOLOGIES
INC. FOR 2011. THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE PROXIES TO VOTE AS TO ANY
OTHER MATTER THAT MAY BE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OF WHICH THE BOARD OF DIRECTORS
DID NOT HAVE NOTICE PRIOR TO
FEBRUARY 16, 2011.