Harvey Grossblatt

About Harvey Grossblatt

Harvey B. Grossblatt (age 77 as of the 2024 proxy record date) is President, Chief Executive Officer, and a director of UUU; he has served as CEO since August 2004 and as a director since 1996, after prior roles as CFO (1983–2004), Secretary/Treasurer (1988–2004), and COO (2003–2004) . He is not an independent director and beneficially owns 110,402 shares (4.77% of outstanding; 2,312,887 shares outstanding at the 2025 special meeting record date), aligning him meaningfully with equity holders . His cash bonus opportunity is formulaic and tied to company pre-tax net income above a 4% of shareholder equity threshold, with tiered percentages on incremental pre-tax profit; historically, pay has been predominantly cash with limited equity prior to 2025 .

Past Roles

External Roles

No external public company directorships or committee roles for Mr. Grossblatt are disclosed in the latest proxy biographies .

Fixed Compensation

Executive cash pay remains the dominant element of compensation; CEO base salary is contractual.

Additional fixed/benefit elements:

• Employment agreement base salary set at $350,000 since April 1, 2007; agreement effective originally April 1, 2002; current term through July 31, 2025 .
• Benefits include life, health and disability insurance, medical reimbursement, automobile allowance, and company retirement plan contributions .
• 401(k) plan: company match up to 4% with immediate vesting; no additional discretionary contributions in FY 2024 .

Director compensation (non-employee):

• $10,000 annual cash fee; payable in cash or shares; CEO received no additional pay for board service in FY 2024 .
• FY 2024 director compensation totals: Luskin $10,000; Seff $10,000; Bormel $10,000 .

Performance Compensation

Bonuses and equity incentives.

• Annual CEO bonus plan (formulaic): Bonuses are paid only when pre-tax net income exceeds 4% of beginning shareholders’ equity; payout equals 3% of pre-tax income above threshold up to $1M, 4% from $1–2M, 5% from $2–3M, 6% from $3–4M, and 7% over $4M. Total shareholder return is considered qualitatively but not used as a payout metric .

Equity awards and 2025 Plan:

• 2025 Stock Incentive Plan (subject to shareholder approval) authorizes issuance of up to 1,000,000 shares through options, RSUs, SARs, restricted stock, and performance awards; designed to support performance, recruiting, retention, and incentives .
• On August 27, 2025, the Board approved option grants to Mr. Grossblatt of 50,000 shares at a $3.40 strike, 10-year term; vesting occurs on the date stockholders approve the issuances, exercisable upon NYSE American and stockholder approvals .
• Similar options of 25,000 shares each at $3.40 were approved for the CFO and independent directors, subject to approvals; aggregate proposed issuances (including officers and directors) up to 200,000 shares, equating to ~7.96% dilution on adoption .

Tax and plan provisions:

• Plan contemplates RSUs and performance awards with standard U.S. federal tax treatment; awards intended to comply with or be exempt from Section 409A; tax withholding permitted via share delivery/withholding .

Equity Ownership & Alignment

Additional alignment/pressure considerations:

• Historically, the company did not provide equity-based compensation; 2025 Plan introduces options/RSUs, increasing long-term equity alignment going forward .
• Proposed equity issuances to insiders could dilute existing shareholders by up to ~7.96% if fully issued (200,000 shares vs. record-date outstanding), potentially influencing future insider sale dynamics .

Pledging/hedging and ownership guidelines: Not disclosed in the cited materials .

Section 16(a) compliance: All required insider ownership/change reports were timely filed for FY 2024, per the company’s review .

Employment Terms

Key terms from CEO employment agreement:

• Agreement effective April 1, 2002 (as amended); current term expires July 31, 2025 .
• Base salary: $350,000 since April 1, 2007 .
• Bonus: Paid only when pre-tax net income exceeds 4% of shareholder equity; tiered 3%–7% formula on incremental pre-tax income; Board pre-determines the equity threshold percentage (4% for FY 2023 and FY 2024) .
• Benefits: Life/health/disability insurance, medical reimbursement, auto allowance, and retirement plan contributions .
• Non-compete: Prohibits competition during the term and any subsequent period during which compensation is paid following termination .

Potential payments (estimated as of March 31, 2024):

• Non-renewal: Severance ~$370,000; health benefits ~$74,000; additional 401(k) contributions ~$122,000 .
• Resignation for Good Reason: Severance ~$353,000; health benefits ~$74,000; additional 401(k) contributions ~$122,000; potential tax gross-up ~$351,000 .
• Termination following Change in Control: Lump sums include base salary/bonus for balance of term plus 3x last 12 months’ base salary and bonus, subject to 2.99x cap of average five-year taxable comp; estimated severance ~$1,053,000; health benefits ~$74,000; additional 401(k) contributions ~$122,000; potential tax gross-up ~$799,000 .
• Death/Disability: Continuation/severance features include base salary (for term or one year minimum for death; term for disability) less insurance benefits; health benefits for up to three years (or cash equivalent) and 401(k) contribution equivalents; amounts summarized in company estimates (including references to ~$411,000 plus specified benefits in death scenarios) .

Clawbacks/tax gross-ups:

• Explicit excise tax gross-up amounts are included in estimated payouts under certain scenarios—shareholder-unfriendly design (potential $351,000 or $799,000) .
• No separate clawback policy is disclosed in the cited proxy materials .

Board Governance and Service

• Board service: Director since 1996; current term ends 2026; not independent (as CEO) .
• Committee roles: Audit Committee members were Bormel (Chair), Seff, Luskin; Compensation Committee members were Luskin (Chair), Seff, Bormel—Mr. Grossblatt is not listed on either committee .
• Board activity: Board convened three times in FY 2024; all incumbent directors attended at least 75% of board and committee meetings .
• Leadership structure: No Chairman elected; per bylaws, the President serves as CEO when no Chairman is elected; independent directors provide oversight via committees and executive sessions as needed .

Dual-role implications:

• CEO-director combination concentrates authority; independence mitigated by committee structure with independent chairs and members; however, absence of a separate Chair or Lead Independent Director is not addressed in the proxy, which can be a governance consideration for some investors .

Related Party Transactions and Red Flags

• Company reimbursed inventory purchases and other expenses charged to credit cards of Mr. Grossblatt and certain immediate family members (~$1,699,000 in FY 2024; ~$1,748,000 in FY 2023); Mr. Grossblatt received travel mileage and other credit card benefits; peak outstanding balances to him during the fiscal year were ~$276,000 (FY 2024) and ~$217,000 (FY 2023); no amounts outstanding at year-end .
• Equity authorization and potential dilution: 2025 proposals seek to increase authorized common shares to 220,000,000, authorize 25,000,000 preferred shares, create a Class B common stock, and approve a 1,000,000-share equity plan and specific insider option grants; these actions increase financial flexibility but introduce dilution and potential anti-takeover effects .
• Convertible notes: Seeking stockholder approval for conversion of notes that could exceed 19.99% of pre-transaction outstanding shares under NYSE American rules, with rationale to manage financing flexibility; potential dilution noted .
• Tax gross-ups present in potential severance—often viewed as shareholder-unfriendly .

Director Compensation (Board Service)

Say-on-Pay & Shareholder Feedback

• Advisory say-on-pay vote provided annually; Board recommended “FOR” approval; specific approval percentages for FY 2024 not disclosed in the cited materials .

Investment Implications

• Alignment and dilution: Historically cash-heavy CEO pay with a formulaic profit-based bonus indicates a clear linkage to profitability; introduction of the 2025 equity plan and CEO option grant adds longer-term alignment but also increases potential dilution, with insider issuances up to ~7.96% and plan reserve of 1,000,000 shares, plus additional share authorizations and convertible note conversion capacity .
• Retention and change-in-control economics: Significant CIC protections (up to ~3x salary+bonus, capped at 2.99x average compensation) plus health and retirement contribution continuations, and potential tax gross-ups, reduce retention risk but may be viewed as generous by governance-focused investors—particularly the gross-up provisions .
• Governance risk: CEO-director dual role without a disclosed independent Chair/Lead Independent Director, related-party credit card practices (though reimbursed), and expansive new authorization proposals (preferred stock and dual-class authorization) may weigh on governance quality assessments and could influence trading around governance catalysts .
• Trading signals: Approval/implementation of the 2025 Plan and insider options (vesting on stockholder approval) can act as timing catalysts; increased authorized shares and note conversions create supply overhang risk; monitor special meeting outcomes and subsequent Form 4 filings for potential exercise/sale activity .

Appendix: References to Key Disclosures

• Director biography/age/tenure; independence; past roles
• Compensation tables; benefits; bonus formula; 401(k) plan
• Employment agreement; severance/CIC terms; estimated payouts; tax gross-ups
• Director compensation; committees; attendance; governance structure
• Beneficial ownership; outstanding shares; >5% holders
• 2025 Special Meeting proposals; equity plan; insider option grants; dilution