Form 8-K
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 3, 2010
ULTRALIFE
CORPORATION
(Exact name of registrant as
specified in its charter)
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Delaware |
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000-20852 |
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16-1387013 |
(State or other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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2000 Technology Parkway,
Newark, New York
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14513 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s telephone number,
including area code: (315) 332-7100
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(Former name or former address if changed since last report.) |
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
A. Material Compensation Arrangements for Named Executive Officers. On December 3, 2010, the
Compensation and Management Committee (the Committee) of the Board of Directors (the Board) of
Ultralife Corporation (the Company) recommended to the Board, and the Board adopted certain
material compensation arrangements for the Companys named executive officers. The Companys named
executive officers are those executive officers for whom disclosure is required in the Companys
filings with the Securities & Exchange Commission pursuant to Item 402(c) of Regulation S-K.
The material compensation arrangements for named executive officers adopted by the Board
consist of (1) a base compensation plan, (2) a short-term cash bonus incentive plan, and (3) a
long-term equity incentive plan, under which stock options were awarded. Each of these
arrangements is summarized below. The Companys compensation policies will be discussed in detail
in the Compensation Discussion & Analysis to be included in the Companys 2011 proxy statement.
1. Base Compensation Plan for Named Executive Officers
Under the base compensation plan for 2011, each of the named executive officers will receive
annual base compensation starting February 14, 2011 in the amount set forth opposite his name:
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Name |
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Title |
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Amount |
John D. Kavazanjian
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President and Chief Executive Officer
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$ |
420,000 |
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Philip A. Fain
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Chief Financial Officer and Treasurer
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$ |
250,000 |
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Peter F. Comerford
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Vice President of Administration and General Counsel
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$ |
231,000 |
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Julius M. Cirin
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Vice President of Corporate Communications
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$ |
190,000 |
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Patrick R. Hanna, Jr.
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Corporate Compliance Officer
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$ |
190,000 |
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2. Short-Term Cash Bonus Incentive Plan for Named Executive Officers
Mr. Kavazanjian would have been eligible to receive a cash bonus in an amount equal to up to
120% of his annual base compensation under the short-term cash bonus incentive plan for 2011, but
due to his retirement (as described below), he will not be receiving any cash award under that plan
for 2011.
Messrs. Fain, Comerford and Hanna will each be eligible to receive a cash award under the
short-term cash bonus incentive plan for 2011. Each will have a target bonus based on a certain
percentage of his 2011 base compensation, with Mr. Fains target bonus equal to 45% of his 2011
base compensation and Messrs. Comerfords and Hannas target bonus equal to 30% of his 2011 base
compensation. Each of Messrs. Fain, Comerford and Hanna will be eligible to receive a cash award
in an amount that could equal up to two times his target bonus. The determination as to whether
Messrs. Fain, Comerford or Hanna receives such cash awards and the amount of such cash awards
actually paid to them, if any, will be based upon whether the Company meets pre-determined targets
for its operating performance (the Performance Targets). The Companys operating performance
must exceed 80% of the Performance Targets in order
for Messrs. Fain, Comerford and Hanna to receive a short-term cash bonus incentive plan award. If
the Companys operating performance equals 100% of the applicable Performance Target, Messrs. Fain,
Comerford and Hanna will each be entitled to an incentive plan award equal to 50% of his target
bonus amount. As the Companys operating performance moves from 80% to 100% of the Performance
Targets, the short-term cash bonus incentive rewards for Messrs. Fain, Comerford and Hanna would
increase ratably from 0% to 50% of their target bonus amounts.
Further, as the Companys performance grows from 100% to 122% of
the Performance Target, the named executive officers short-term
cash bonus incentive increases ratably from 50% to 100% of their
target bonus amounts. Also, as the Companys operating
performance grows from 122% to 217% of the Performance Target, the
named executive officers short-term cash bonus incentive
increases ratably from 100% to 200% of their target bonus amounts.
Operating performance in excess of 217% of the Performance Target
results in a cap in bonus amount of 200% of each named executive
officers target bonus.
Mr. Kavazanjian is not eligible to receive a short-term bonus incentive cash award for 2011
because of his retirement as described below. Mr. Cirin, who is currently on leave from the
Company, is not eligible to receive a short-term cash bonus incentive award until such time as he
returns to full service with the Company.
3. Long-Term Incentive Plan for Named Executive Officers
The Long-Term Incentive Plan (LTIP) of the Company consists of three components:
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(1) |
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stock options, |
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(2) |
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performance-vested restricted shares, and |
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(3) |
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time-vested restricted shares. |
For 2011, however, the Committee granted only stock options to certain of its named executive
officers. For the reasons stated above, Messrs. Kavazanjian and Cirin did not receive an award
under the Companys LTIP. The Board granted options to purchase shares of the Companys common
stock under the Companys LTIP to Messrs. Fain, Comerford and Hanna. These options have a
seven-year term, vest over a three-year period in equal installments, and have an exercise price of
$6.9061 per share. Mr. Fain received an option to purchase 25,000 shares, Mr. Comerford received
an option to purchase 20,000 shares, and Mr. Hanna received an option to purchase 10,000 shares.
B. John D. Kavazanjian Retires as President and Chief Executive Officer. Pursuant to the terms of
that certain Addendum to his Employment Agreement with the Company dated May 24, 2010, John D.
Kavazanjian, the Companys President and Chief Executive Officer has notified the Company of his
decision to retire from the Company effective February 7, 2011. Mr. Kavazanjian will cease being
the Companys President and Chief Executive Officer on December 30, 2010 when Michael D. Popielec
will assume those positions (see below). Upon his retirement, Mr. Kavazanjian will be entitled to:
(i) the continuation of his salary for a period of twelve months, (ii) the cash value of any unused
paid time off consistent with the Companys paid time off policy, (iii) all of his equity awards
which will remain exercisable through their original expiration dates and (iv) the continuation of
health benefits for him, his spouse and dependent children for a period of twelve months. Mr.
Kavazanjian will also make himself available to act in a consulting capacity, at no additional cost
to the Company, for up to ten hours per month, as requested by the Company, through February 7,
2012. The Company will reimburse Mr. Kavazanjian for all reasonable expenses he incurs as a result
of his consultation.
C. Michael D. Popielec Appointed as President and Chief Executive Officer. On December 6, 2010,
the Company and Michael D. Popielec entered into an Employment Agreement which provides that,
effective December 30, 2010, Mr. Popielec will become the Companys President and Chief Executive
Officer, succeeding John D. Kavazanjian. Mr. Popielec was most recently employed by Carlisle Companies Inc. of Charlotte, North Carolina as its Group President, Applied Technologies,
in 2008 and 2009 and as its Group President, Diversified Components, from 2005 to 2007. Carlisle
is a manufacturer of construction materials, specialty wheels and power transmission equipment.
Prior to that, from 2003 to 2005, Mr. Popielec held various positions at Danka Business Systems,
PLC, an office equipment company in St. Petersburg, Florida, and for 17 years prior to that held
various positions at General Electric Company, headquartered in Fairfield, Connecticut, including
President and Chief Executive Officer of GE Power Controls, Industrial Systems in Europe from 2000
to 2002. After his tenure at Carlisle Companies, Inc., Mr. Popielec
was engaged in special projects and consulting to both public and
private companies. Mr. Popielec received his B.S. in Mechanical Engineering from Michigan State University
in 1985.
In connection with Mr. Popielecs appointment as the Companys President and Chief Executive
Officer, the Company set his annual base salary at $450,000.
Mr. Popielec is also eligible to receive a cash
bonus outside the Companys short-term cash bonus incentive plan if the Company exceeds certain quantitative and qualitative performance metrics to be agreed
upon no later than January 31 of the year for which the bonus applies. Satisfaction of 80% to 99%
of the bonus plan metrics will result in bonus ranges from 20% to 100% of Mr. Popielecs target
bonus. Satisfaction of 100% to 125% of the bonus plan metrics will result in bonus ranges from
100% to 140% of Mr. Popielecs target bonus. In no event will the bonus exceed 140% of Mr.
Popielecs target bonus. For 2011 and each year thereafter, Mr. Popielecs target bonus shall not
be less than 75% of his 2011 base salary.
Mr. Popielec will also be eligible to participate in the Companys LTIP. Pursuant to the
terms of his Employment Agreement, Mr. Popielec will be granted options to purchase shares of the
Companys Common Stock, par value $.10 per share (the Stock) as follows: (i) 50,000 shares on
December 30, 2010 with an exercise price determined on that date in accordance with the LTIP, with
equal vesting on each of December 30, 2011, December 30, 2012, December 30, 2013 and December 30,
2014; (ii) 250,000 shares on December 30, 2010 with an exercise price determined on that date in
accordance with the LTIP with equal vesting on each of December 30, 2011, December 30, 2012,
December 30, 2013 and December 30, 2014; (iii) 200,000 shares on December 30, 2010, with an
exercise price of $10 per share with vesting to begin on the date the Stock first reaches a closing
price of $10 per share for 15 trading days in a 30 trading-day period, with such vesting in equal
amounts over the four anniversary dates of that date; (iv) 200,000 shares on December 30, 2010 with
an exercise price of $15 per share with vesting to begin on the date the stock first reaches a
closing price of $15 per share for 15 trading days in a 30 trading-day period, with such vesting in
equal amounts over the four anniversary dates of that date; and (v) 50,000 shares on January 3,
2011 with an exercise price determined on that date in accordance with the LTIP with equal vesting
on each of December 30, 2011, December 30, 2012, December 30, 2013 and December 30, 2014. All such
options in items (i)(ii) and (v) shall terminate on December 30, 2017. All such options in items
(iii) and (iv) shall terminate as of the later of December 30, 2017 and five years after the
initial vesting commences, but in no event later than December 30, 2020. The options set forth at
items (ii), (iii) and (iv) are conditional and are subject to shareholder approval to increase the
number of shares available under the LTIP to accommodate these options and to also increase the
current limitation on maximum options issuable to an employee in a given year. If such approval is
not obtained, such options shall be null and void. The Company has agreed to include as an item in
the proxy for its 2011 annual meeting of shareholders amendments to the LTIP to accommodate these
changes and has agreed to recommend to its shareholders a vote FOR this item.
The Company has also agreed that Mr. Popielec shall be entitled to the following relocation
benefits: (i) rent in and commute transportation to the Rochester, New York area for up to nine
months, as needed, during 2011 for a total actual expense not to exceed $50,000; (ii) payment of
all actual reasonable relocation and moving expenses, including expenses incurred by Mr. Popielec
and his spouse for travel to the Rochester, New York area to locate living accommodations, packing
and transporting of household items to the new household and meals, lodging and travel in
connection with the move to the new household, incurred in 2011 in an aggregate amount not to exceed $60,000; and (iii) payment of all
actual reasonable current house sale/closing costs, including deed preparation, tax stamps,
reasonable attorneys fees, real estate transfer taxes and real estate commissions incurred in 2011
and 2012.
Mr. Popielec will also be entitled to receive the retirement benefits and fringe and other
personal benefits described in the Companys 2010 definitive proxy statement dated April 30, 2010
under the Sections entitled Retirement Benefits and Perquisites and Other Personal Benefits,
which sections are incorporated into this Current Report on Form 8-K by reference.
The Employment Agreement provides that Mr. Popielecs employment is at will. Mr. Popielec
is entitled to certain severance benefits if the Company terminates his employment without Business
Reasons or a Constructive Termination occurs (as those terms are defined in the Employment
Agreement), including salary continuation for a period of 18 months following the termination date,
provided, however, that such 18-month period shall be reduced to 12 months if the termination date
is on or after June 30, 2012, (ii) a pro rata amount (calculated on a per diem basis) of the
full-year bonus which Mr. Popielec would have earned for the calendar year in which the termination
of employment occurs, (iii) acceleration of vesting of all outstanding stock options and other
equity arrangements, subject to the provision, however, that the acceleration shall not cover more
than 18 months from the termination date, (iv) continuation of health benefits for Mr. Popielec,
his spouse and any dependent children for a period of 12 months after the termination date followed
by 18 months of executive-paid COBRA eligibility. In addition, if the Company terminates the
employment of Mr. Popielec within 12 months of the date of a Change in Control, without Business
Reasons or a Constructive Termination occurs (as such terms are defined in the Employment
Agreement), then Mr. Popielec shall be entitled to receive (i) salary, any unpaid bonus from the
prior year plus an amount equal to 18 months of his salary as then in effect, payable immediately
upon the termination date, (ii) one and one half times his target bonus for the calendar year in
which the termination date occurs, (iii) acceleration in full of vesting of all outstanding stock
options, all such options to remain exercisable for 18 months following the termination date, or
through the original expiration date of the stock options, if earlier, (iv) continuation of health
benefits for Mr. Popielec, his spouse and any dependent children for a period of 24 months after
the termination date. To the extent the vesting and/or accelerated payment of outstanding stock
options would subject Mr. Popielec to the imposition of tax and/or penalties under Section 409A of
the Internal Revenue Code, the vesting and/or payment of such stock options and other equity shall
be delayed to the extent necessary to avoid the imposition of such tax and/or penalties. The
Employment Agreement also provides for the continuation of certain benefits in the event Mr.
Popielecs employment is terminated for Disability (as defined in the Employment Agreement) or by
his death.
In addition to executing the Employment Agreement, Mr. Popielec has also executed an Employee
Confidentiality Non-Disclosure Non-Compete, Non-Disparagement and Assignment Agreement in the
Companys standard form.
The Companys press release regarding Mr. Kavazanjians retirement and Mr. Popielecs
appointment is attached as Exhibit 99.1 to this Form 8-K.
Item 9.01
Financial Statements and Exhibits.
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Exhibit No. |
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Description |
99.1
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Press Release, dated December 8, 2010 |
Mr. Popielecs Employment Agreement will be filed as an exhibit to the Companys Annual Report
on Form 10-K for the year ended December 31, 2010.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: December 9, 2010 |
ULTRALIFE CORPORATION
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By: |
/s/ Peter F. Comerford
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Peter F. Comerford |
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Vice President of Administration and
General Counsel |
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Exhibit 99.1
Exhibit 99.1
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Company Contact
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Investor Relations |
Ultralife Corporation
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Lippert/Heilshorn & Associates, Inc. |
Philip Fain
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Jody Burfening |
(315)-332-7100
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212-838-3777 |
pfain@ulbi.com
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jburfening@lhai.com |
Ultralife Corporation Announces Retirement of John D. Kavazanjian, President and CEO
- Board Appoints Michael D. Popielec as President and CEO -
NEWARK, New York December 8, 2010 Ultralife Corporation (NASDAQ: ULBI) announced today that
its Board of Directors has appointed Michael D. Popielec president and chief executive officer,
effective December 30, 2010. Mr. Popielec replaces John D. Kavazanjian who is retiring after
serving as Ultralifes president and chief executive officer since July 1999. Following his
retirement, Mr. Kavazanjian will serve as a consultant to the company through February of 2012,
assisting in the companys development plans particularly in the energy storage market.
Mr. Popielec, 48, has 25 years experience in growing domestic and international industrial
businesses. Prior to joining Ultralife, he was group president, Applied Technologies at Carlisle
Companies, Inc., a $2.5 billion diversified global manufacturer. Prior to that, he was chief
operating officer, Americas, for Danka Business Systems, PLC. From 1985 to 2002, Mr. Popielec held
positions of increasing responsibility at General Electric Company, most recently as a GE corporate
officer and president and chief executive officer of GE Power Controls, the European arm of GE
Industrial Systems. Mr. Popielec has a B.S. in Mechanical Engineering from Michigan State
University.
Bradford T. Whitmore, Ultralifes chairman, said, On behalf of the board of directors, I want to
thank John for his many years of distinguished service. Under his leadership, Ultralife evolved
from a single product lithium battery company to a diversified business with a broadened portfolio
of energy-centric products serving military and commercial customers in the US and abroad. In
turning the reins over to Mike, John is leaving the company in strong financial shape with the
right organizational and cost structure to support continued profitable growth.
Mike brings an impressive set of leadership and operational skills to continue executing
Ultralifes growth strategy, added Whitmore. He is a seasoned executive with deep experience in
both manufacturing and sales and marketing that is valuable to Ultralife as the company further
extends its presence in international markets and pursues new commercial market opportunities,
notably those involving emerging energy storage applications.
It is my good fortune to complete my professional career as Ultralifes president and chief
executive officer, said John D. Kavazanjian. Over the past 11-plus years, I have worked with
many talented people who have contributed to the companys successful evolution and growth, and the
company is now well-positioned to further optimize returns to scale. Ultralife has never been
stronger, and I am confident that Mike has the drive and ambition to go after emerging
opportunities that will take Ultralife to its next stage of growth.
About Ultralife Corporation
Ultralife Corporation, which began as a battery company, serves its markets with products and
services ranging from portable and standby power solutions to communications and electronics
systems. Through its engineering and collaborative approach to problem solving, Ultralife serves
government, defense and commercial customers across the globe.
Headquartered in Newark, New York, the companys business segments include: Battery & Energy
Products, Communications Systems and Energy Services. Ultralife has operations in North America,
Europe and Asia. For more information, visit www.ultralifecorp.com.
This press release may contain forward-looking statements based on current expectations that
involve a number of risks and uncertainties. The potential risks and uncertainties that could cause
actual results to differ materially include: worsening global economic conditions, increased
competitive environment and pricing pressures, and the possibility of intangible asset impairment
charges that may be taken should management decide to retire one or more of the brands of acquired
companies. The Company cautions investors not to place undue reliance on forward-looking
statements, which reflect the Companys analysis only as of todays date. The Company undertakes no
obligation to publicly update forward-looking statements to reflect subsequent events or
circumstances. Further information on these factors and other factors that could affect Ultralifes
financial results is included in Ultralifes Securities and Exchange Commission (SEC) filings,
including the latest Annual Report on Form 10-K.
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