SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Ultralife Batteries, Inc.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies: _____
(2) Aggregate number of securities to which transaction applies: ______
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule: 0-11:______
(4) Proposed maximum aggregate value of transaction:______
(5) Total fee paid:_______
[ ] Fee paid previously with preliminary materials.
[ ] 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 by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ULTRALIFE BATTERIES, INC.
1350 ROUTE 88 SOUTH
P.O. BOX 622
NEWARK, NEW YORK 14513
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 8, 1998
Notice is hereby given that the 1998 Annual Meeting of Stockholders (the
"Meeting") of Ultralife Batteries, Inc. (the "Company") will be held on December
8, 1998 at 10:30 A.M. at the offices of The Chase Manhattan Bank, 410 Park
Avenue, 5th floor, The Board Room, New York, New York for the following
purposes:
1. To elect directors for a term of one year and until their successors
are duly elected and qualified.
2. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Only stockholders of record of common stock, par value $.10 per share, of
the Company at the close of business on October 23, 1998 are entitled to receive
notice of, and to vote at and attend the Meeting. At least 10 days prior to the
Meeting, a complete list of stockholders entitled to vote will be available for
inspection by any stockholder, for any purpose germane to the Meeting, during
ordinary business hours, at Share & Blejec, P.C. 317 Madison Avenue, Suite 1421,
New York, NY 10017 attn: Paul Share, Esq.. If you do not expect to be present
you are requested to fill in, date and sign the enclosed Proxy, which is
solicited by the Board of Directors of the Company, and to promptly return it in
the enclosed envelope. In the event you decide to attend the Meeting in person,
you may, if you desire, revoke your proxy and vote your shares in person.
By Order of the Board of Directors
Bruce Jagid
Chairman of the Board of Directors
and Chief Executive Officer
Dated: October 26, 1998
================================================================================
IMPORTANT
Regardless of whether or not you plan to attend the meeting, you are urged to
complete, sign and return the enclosed proxy in the envelope provided, which
requires no postage if mailed in the United States.
================================================================================
ULTRALIFE BATTERIES, INC.
1350 ROUTE 88 SOUTH
P.O. BOX 622
NEWARK, NEW YORK 14513
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 8, 1998
INFORMATION CONCERNING SOLICITATION AND VOTING
This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Ultralife Batteries, Inc. (the "Company")
for use at the 1998 Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, December 8, 1998 at 10:30 A.M. and any adjournments thereof. The
Meeting will be held at the offices of The Chase Manhattan Bank, 410 Park
Avenue, 5th floor, The Board Room, New York, New York.
When a proxy is returned properly signed, the shares represented thereby
will be voted in accordance with the stockholder's directions. If the proxy is
signed and returned without choices having been specified, the shares will be
voted for the election as directors of the persons named herein. If for any
reason any of the nominees for election as directors shall become unavailable
for election, discretionary authority may be exercised by the proxies to vote
for substitutes proposed by the Board of Directors of the Company. A stockholder
giving a proxy has the right to revoke it at any time before it is voted by
filing with the Secretary of the Company a written notice of revocation, or a
duly executed later-dated proxy, or by requesting return of the proxy at the
Meeting and voting in person.
Only stockholders of record at the close of business on October 23, 1998
are entitled to notice of, and to vote at, the annual meeting of stockholders.
As of October 23, 1998, there were 10,511,536 shares of the Company's stock, par
value $.10 per share ("Common Stock"), outstanding, each entitled to one vote
per share at the Meeting.
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, some of the
officers, directors and regular employees of the Company, without extra
remuneration, may solicit proxies personally or by telephone, telefax or similar
transmission. The Company will reimburse record holders for expenses in
forwarding proxies and proxy soliciting material to the beneficial owners of the
shares held by them.
The approximate date on which the enclosed form of proxy and this proxy
statement are first being sent to stockholders of the Company is October 26,
1998.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors currently has 7 directors all of whom are running
for reelection. Directors are elected by a plurality of the votes cast by the
stockholders of the Company at a stockholders meeting at which a quorum of
shares is represented. Each director shall serve until the next annual
stockholders meeting and until the successor of such directors shall have been
elected and qualified. The names of, and certain information with respect to,
the persons nominated for election as directors are presented on the following
pages.
Name Age Present Principal Occupation and Employment History
Bruce Jagid 58 Mr. Jagid, a founder of the Company, has been a
director and the Company's Chairman since March 1991
and its Chief Executive Officer since January 1992.
Mr. Jagid has over 25 years experience in the
technical and business aspects of the energy
conversion field. Together with Mr. Rosansky, Mr.
Jagid founded Power Conversion, Inc. ("PCI") in
1970, where he was the President until January 1989.
PCI was sold to Hawker Siddely PLC in 1986. Mr.
Jagid is a director of several private companies and
THQ, Inc. Mr. Jagid holds numerous patents in the
area of battery technology and has authored several
publications on the subject.
Name Age Present Principal Occupation and Employment History
Martin Rosansky 60 Mr. Rosansky, a founder of the Company, has been a
director since March 1991 and the Company's Vice
Chairman since January 1992. Mr. Rosansky, a
co-founder of PCI in 1970, has 30 years experience
in the engineering, design and production of battery
and fuel-cell systems. He was Chairman of the Board,
Secretary and Treasurer at PCI from 1970 to January
1989, when he left PCI to pursue private investment
activities. Mr. Rosansky is a director of several
private companies. Mr. Rosansky holds numerous
patents and has authored several publications in the
field of battery technology.
Joseph N. Barrella 52 Mr. Barrella, a founder of the Company, has been a
director and the Company's President since March
1991 and the Company's Chief Operating Officer from
October 1992 through November 1996, and its Chief
Technology Officer since November, 1996. Prior
thereto, Mr. Barrella spent seven years as Director
of Engineering at PCI, from May 1984 to January
1991. Mr. Barrella has been involved in the
development and manufacture of lithium batteries for
more than 20 years. He holds a number of patents
relating to lithium battery designs and has authored
several publications relating to battery technology.
Joseph C. Abeles 83 Mr. Abeles, a founder of the Company, has been a
director and Treasurer since March 1991. Mr. Abeles,
formerly a director of PCI, is a private investor
and currently serves as a director of a number of
companies, including Intermagnetics General
Corporation ("IGC") and Bluegreen Corporation
(formerly Patten Corporation). In 1951 he founded
Kawecki Chemical Co. and served as Chairman and CEO
of Kawecki Berylco Industries from 1969 to 1978.
Arthur Lieberman 63 Mr. Lieberman has been a director since March 1991.
Mr. Lieberman is a founder, and since 1981 has been
the senior partner of Lieberman & Nowak, a legal
firm specializing in intellectual property law which
for many years has represented clients in the
battery industry and related fields. Lieberman &
Nowak has represented the Company in connection with
certain intellectual property matters.
Carl H. Rosner 69 Mr. Rosner, a director of the Company since January
1992, is the Chairman, and Chief Executive Officer
of IGC. Mr. Rosner has been Chairman of IGC since
its formation and President and Chief Executive
Officer since 1984.
Richard Hansen 58 Mr. Hansen has been a director since July 1993. Mr.
Hansen has been President and Chief Executive
Officer of Pennsylvania Merchant Group Ltd, an
investment banking and venture capital firm, since
1987 and is a director of Computone Corporation.
The Board of Directors has unanimously approved the above-named nominees for
directors. The Board of Directors recommends a vote FOR all of these nominees.
BOARD OF DIRECTORS
The Board of Directors has met eight (8) times during the fiscal year
ended June 30, 1998. Messrs. Abeles, Barrella, Jagid, and Rosner attended all
eight meetings, Mr. Rosansky missed one meeting, Mr. Lieberman missed three
meetings, and Mr. Hansen missed four meetings. Mr. Shikiar attended all three
meetings held while he was a director.
Each board member receives a $750 monthly retainer as well as $750 for
each board meeting attended. In addition, each director receives an option, at
the end of each calendar quarter to purchase 1,500 shares of Common Stock. This
option is granted to each director on the last day of the calendar quarter; it
vests immediately with a term of five years from the date of grant and is
granted at an exercise price equal to the closing price of the Common Stock on
the date of grant.
-2-
On June 25, 1998, the Board of Directors approved a resolution pursuant to
which the options granted to directors as of the last day of the eight quarters
from June 30, 1993 through May 31 1994 at exercise prices ranging from $11.75 to
$17.50 per share were replaced with an option for an equal number of shares at
the closing price of the shares on June 25, 1998 ($8.25). The replacement option
is immediately vested and expires on June 30, 2003. The replacement option was
for 12,000 shares, except in the case of Joseph Abeles who had previously
exercised options for 3,000 shares and whose replacement option was therefore
for 9,000 shares, and Richard Hansen, who was not a director on June 30, 1993
and whose replacement option was therefore for 10,500 shares.
COMMITTEES OF THE BOARD
The Board has established three standing committees to assist it in
carrying out its responsibilities: the Compensation and Stock Option Committee,
the Audit Committee and the Executive Committee.
The members of the Compensation and Stock Option Committee are Joseph C.
Abeles, Carl H. Rosner and Richard Hansen. The Compensation and Stock Option
Committee has general responsibility for recommending to the Board remuneration
for the Chairman and Vice Chairman and determining the remuneration of other
officers elected by the Board; granting stock options and otherwise
administering the Company's stock option plans; and approval and administration
of any other compensation plans or agreements. This committee held no formal
meetings, but acted by unanimous consent on several occasions and had informal
discussions from time to time during the fiscal year ended June 30, 1998.
The members of the Audit Committee are Joseph C. Abeles, Carl H. Rosner
and Richard Hansen. This committee has oversight responsibility for reviewing
the scope and results of the independent auditors' annual examination of the
Company's financial statements; meeting with the Company's financial management
and the independent auditors to review matters relating to internal accounting
controls, the Company's accounting practices and procedures and other matters
relating to the financial condition of the Company; and recommending to the
Board of Directors the appointment of the independent auditors. This committee
held one formal meeting as part of a regular board meeting and had informal
discussions from time to time during the fiscal year ended June 30, 1998.
The members of the Executive Committee are Joseph Abeles, Arthur
Lieberman, Martin Rosansky and Bruce Jagid. This committee is responsible for
overseeing such matters as the Board of Directors determines from time to time.
This committee held no formal meetings, but had informal discussions from time
to time during the fiscal year ended June 30, 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information regarding the beneficial
ownership of shares of the Company's Common Stock as of September 30, 1998 by
(i) each person known by the Company to beneficially own more than five percent
of the outstanding shares of Common Stock, (ii) each director of the Company,
and (iii) all directors and officers of the Company as a group. Except as
otherwise indicated, the persons named in this table have sole voting power with
respect to all shares of Common Stock owned based upon information provided to
the Company by the directors, officers and principal stockholders and their
addresses are the address of the Company.
-3-
Number of Shares Percent
Name Beneficially Owned Beneficially Owned
---- ------------------ ------------------
Intermagnetics General
Corporation (1) 1,009,586 9.60%
Joseph Abeles (2) 272,500 2.59%
Joseph Barrella (3) 327,000 3.08%
Bruce Jagid (4) 658,400 6.02%
Richard Hansen (5) 38,500 0.37%
Arthur Lieberman (6) 134,500 1.28%
Martin Rosansky (7) 180,500 1.71%
Carl Rosner (8) 1,009,586 9.60%
All directors and officers
as a group (13 persons) (9) 2,742,486 24.04%
1. With an address at 450 Old Niskayuna Rd., Latham, NY 12210-0461. Includes
833 shares and options to purchase 33,000 shares which may be exercised
within 60 days beneficially owned by Mr. Carl H. Rosner. Mr. Rosner is the
Chairman and Chief Executive Officer of Intermagnetics General Corporation
("IGC"). Therefore, IGC may be deemed to share voting and investment power
with respect to the shares and shares issuable upon the exercise of options
held by Mr. Rosner. IGC disclaims beneficial ownership of the shares and
shares issuable upon the exercise of options owned by Mr. Rosner.
2. Includes 30,000 shares subject to options which may be exercised within 60
days, 12,000 shares owned by Abeles Associates Inc. and 25,000 shares held
by Mr. Abeles' spouse, as to which Mr. Abeles disclaims beneficial
ownership. Excludes 1,009,586 shares beneficially owned by IGC. Mr. Abeles
is a director of lGC and therefore may be deemed to share voting and
investment power with respect to the shares held by IGC. Mr. Abeles
disclaims beneficial ownership of the shares owned by IGC
3. Includes 138,000 shares subject to options which may be exercised within 60
days.
4. Includes 448,000 shares subject to options which may be exercised within 60
days. Includes 5,000 shares held in trust for Mr. Jagid's children of which
he disclaims beneficial ownership.
5. Includes 31,500 shares subject to options which may be exercised within 60
days. Includes 2,000 shares owned by minor children of Mr. Hansen which he
disclaims beneficial ownership. Does not include shares held by
Pennsylvania Merchant Group Ltd as a market-maker. Mr. Hansen is President
and Chief Executive Officer of Pennsylvania Merchant Group Ltd and
therefore may be deemed to share voting and investment power.
6. Includes 53,000 shares subject to options which may be exercised within 60
days and 52,500 shares held by the Arthur M. Lieberman P.C. profit sharing
plan.
7. Includes 88,000 shares subject to options which may be exercised within 60
days.
8. Includes 33,000 options to purchase shares which may be exercised within 60
days and 975,753 shares owned by IGC. Mr. Rosner is the Chairman and Chief
Executive Officer of IGC and therefore may be deemed to share voting and
investment power with respect to the shares held by IGC. Mr. Rosner
disclaims beneficial ownership of the shares owned by IGC.
9. Includes 920,900 shares subject to options which may be exercised within 60
days.
Section 16(a) Reporting
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company during the fiscal year ended June 30,
1998, all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with,
except as follows: (1) all of the Directors were late reporting their quarterly
grant of an option for 1,500 shares on June 30, 1998 and a transaction on June
25, 1998 whereby certain options were cancelled and replaced by an option for
the same number of shares at the June 25, 1998 closing price; (2) each of Joseph
Barrella, Frederick Drulard, Bruce Jagid, Stanley Lewin, Martin Rosansky, Daniel
Schoenly, James Sullivan and John Welsh were late in reporting the grant of an
option on June 25, 1998; and (3) Uri Soudak was late reporting the exercise of
an option and the sale of the shares received in December, 1997.
-4-
EXECUTIVE COMPENSATION
The names of, and certain information with respect to the Company's
executive officers who are not also directors, are presented on the following
pages.
Name Age Present Principal Occupation and Employment History
Roger O'Brian 50 Mr. O'Brien became Chief Operating Officer of the
Company on July 7, 1998. He was an independent
managerial consultant based in the Rochester, New
York area from 1997 to 1998 where he provided
advisory and implementation services addressing
marketing and sales, strategic planning and
organizational development. From 1991 to 1996, Mr.
O'Brien was President, Chief Executive Officer and
a major shareholder of Holotek, LTD, a high
technology laser system design and manufacturing
company based in Rochester, New York. From 1988 to
1990, he was Vice President of Sun Microsystems,
Inc., where he directed the budgeting, financial
analysis and reporting, corporate tax and
accounting and SEC reporting functions. Mr. O'Brien
has also held executive positions with Tenneco,
Bell and Howell/Columbia Partners, Exxon
Corporation and Xerox Corporation.
Frederick F. 58 Mr. Drulard joined the Company in July 1996 and
Drulard became Director of Corporate Planning and
Administration in October of 1996. He became Vice
President of Finance and Chief Financial Officer in
October 1997. From January 1994 through July 1996
he was an independent consultant and a Senior
Associate for Greenbush & Associates, a financial
consulting company. Prior thereto starting in 1986
he worked for IGC, most recently as Vice-President
Corporate Planning and Administration.
Stanley Lewin 66 Mr. Lewin has been a Vice President of the Company
since October 1991. Mr. Lewin has over 13 years
experience in the lithium battery business. Prior
to joining the Company, Mr. Lewin served in various
engineering and managerial positions at Power
Conversion Inc. ("PCI") from 1977 to September
1991. At PCI he was responsible for overall plant
operations including manufacturing and production.
While at PCI, Mr. Lewin was directly responsible
for the establishment of battery manufacturing
facilities in New Jersey, Puerto Rico and in the
People's Republic of China.
James Sullivan 61 Mr. Sullivan has been the Company's Vice
President-Sales, since July 1996. From March 1995
through July 1996 he was President of C.C.
Communications, Inc., an advertising agency in New
Jersey, and in charge of market development for
Holt Lloyd International, a car care products
company in the UK. Prior to that, from November
1976 through November 1994, Mr. Sullivan was
Vice-President in charge of sales with additional
responsibilities for engineering and product
development, for PCI., a manufacturer of lithium
batteries.
John Welsh 62 Mr. Welsh has been the Company's Vice President of
European Operations and Managing Director of
Ultralife Batteries (UK) Ltd since November 1995.
Mr. Welsh has over 20 years experience of managing
companies in the UK, USA and Germany. From August
1988 until January 1995 he was Marketing and then
Divisional Manager for Hoppecke Batteries in
Germany which developed and manufactured high rate
lithium manganese dioxide batteries, and from
February 1995 to October 1995 he was Marketing
Manager for industrial nickel cadmium batteries at
FRIWO Silberkraft, also in Germany. Prior to
joining Hoppecke Mr. Welsh worked for 15 years for
Semikron, a German manufacturer of power semi
conductors. He was Managing Director of Semikron UK
from February 1972 until December 1980 and
President of Semikron Inc. Hudson NH until July
1987.
John Fischer 46 Mr. Fischer was appointed Vice President of Primary
Manufacturing on August 31, 1998. Prior to joining
the Company, he was with Forbes Products, Inc., a
manufacturer of imprinted vinyl business products
where he held several positions including Vice
President of Manufacturing. From 1987 to 1988 he
was Materials Manager for CVC Products and was with
General Railway Signal from 1979 to 1987 where he
held several managerial positions in production.
-5-
The individuals named in the following tables include, as of June 30,
1998, the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company ("Named Executive Officers").
The following table sets forth information concerning the annual and
long-term compensation of the Named Executive Officers for all services in all
capacities to the Company and its subsidiary during the Company's fiscal years
ended June 30, 1998, 1997 and 1996.
Summary Compensation Table
Long Term Compensation
---------------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------------------------------------------
Securities
Name and Other Annual Restricted Underlying LTIP All Other
Principal Compensation ($) Stock Options/SARs Payouts Compensation
Position Year Salary ($) Bonus ($) (1) Awards ($) (#) ($) ($)
---------- ---- ----------- --------- ------------ ------------ ------------- ------- -------------
Bruce Jagid 1998 $307,692 $150,000 $35,373 $0 93,000 0 $0
Chief Executive 1997 275,000 0 36,542 0 56,000 0 0
Officer 1996 273,654 0 33,278 0 6,000 0 0
Joseph Barrella 1998 164,769 15,000 33,670 0 68,000 0 0
President and 1997 155,000 0 36,288 0 6,000 0 0
Chief 1996 149,808 0 30,649 0 6,000 0 0
Technology
Officer
Stanley Lewin 1998 116,838 10,000 14,084 0 10,000 0 0
Vice President of 1997 110,000 -- 13,537 0 0 0 0
Technology 1996 110,000 -- 11,692 0 0 0 0
James Sullivan 1998 113,578 15,000 14,018 0 10,000
Vice President 1997 99,846 -- 11,508 35,000
Sales (2)
Uri Soudak 1998 157,115 -- 14,186 0 20,000
COO (3) 1997 95,769 -- 8,604 0 100,000
(1) The amounts reported in this column are catagorized in the following
table.
(2) Mr. Sullivan joined the Company on July 26, 1996.
(3) Mr. Soudak joined the Company on November 1, 1996 and his employment
terminated on July 7, 1998.
Bruce Joseph Stanley James Uri
Jagid Barrella Lewin Sullivan(1) Soudak (2)
----- -------- ----- ----------- ----------
Insurance 1998 $8,018 $8,018 $8,018 $8,018 $8,018
Insurance 1997 7,513 7,513 7,513 7,008 5,008
Insurance 1996 6,499 6,499 6,499 (1) (2)
Automobile 1998 11,029 8068 4,146 6,000 8,169
Automobile 1997 11,029 8,500 4,374 4,500 3,596
Automobile 1996 11,029 8,400 5,193 (1) (2)
Directors Fees 1998 14,250 14,250 0 0 0
Directors Fees 1997 15,750 15,750 0 0 0
Directors Fees 1996 15,750 15,750 0 (1) (2)
401 K Plan 1998(3) 2,076 3,334 1,920 0(1) 3,975
401-K Plan 1997 2,250 2,250 1,650 0(1) 0(2)
(1) Mr. Sullivan joined the Company on July 26, 1996.
(2) Mr. Soudak joined the Company on November 1, 1996 and his employment
terminated on July 7, 1998.
(3) Represents the Company's matching grants to the employees' 401-K Plan
accounts for fiscal years ended June 30, 1998 and 1997. There were no
matching 401K grants by the Company to any of the above prior to fiscal
year ended June 30, 1997.
-6-
The following table sets forth information concerning options granted to the
Named Executive Officers during the Company's fiscal year ended June 30, 1998
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM (1)
- - ------------------------------------------------------------- ---------------------------------------------------------
0% Stock 5% Stock 5% Dollar 10% Stock 10% Dollar
Shares %(22) Price Exp Date Price (23) Price Gain (24) Price Gain (24)
----------- ------- ----- -------- ---------- ----- --------- ----- ---------
Bruce Jagid 1,500 (2) 0.2% 17.88 9/30/02 17.88 22.81 $ 7,409 29.12 $16,863
Chief 1,500 (3) 0.2% 17.00 12/31/02 17.00 21.70 7,046 27.69 16,037
Executive 1,500 (4) 0.2% 14.88 3/31/98 14.88 18.98 6,158 24.23 14,033
Officer 1,500 (5) 0.2% 8.50 6/30/98 8.50 10.85 3,525 13.85 8,025
15,000 (6) 2.1% 8.25 6/25/98 8.25 10.53 34,200 13.44 77,850
15,000 (7) 2.1% 8.25 6/25/98 8.25 10.53 34,200 13.44 77,850
15,000 (8) 2.1% 8.25 6/25/98 8.25 10.53 34,200 13.44 77,850
15,000 (9) 2.1% 8.25 6/25/98 8.25 10.53 34,200 13.44 77,850
15,000 (10) 2.1% 8.25 6/25/98 8.25 10.53 34,200 13.44 77,850
12,000 (16) 1.6% 8.25 6/25/98 8.25 10.53 27,360 13.44 62,280
- - -
Joe Barrella 1,500 (2) 0.2% 17.88 9/30/02 17.88 22.81 7,409 29.12 16,863
President & 1,500 (3) 0.2% 17.00 12/31/02 17.00 21.70 7,046 27.69 16,037
Chief 1,500 (4) 0.2% 14.88 3/31/98 14.88 18.98 6,158 24.23 14,033
Technology 1,500 (5) 0.2% 8.50 6/30/98 8.50 10.85 3,525 13.85 8,025
Officer 5,000 (11) 0.7% 11.00 7/1/97 11.00 14.04 15,200 17.92 34,600
5,000 (12) 0.7% 11.00 7/1/97 11.00 14.04 15,200 17.92 34,600
5,000 (13) 0.7% 11.00 7/1/97 11.00 14.04 15,200 17.92 34,600
5,000 (14) 0.7% 11.00 7/1/98 11.00 14.04 15,200 17.92 34,600
5,000 (15) 0.7% 11.00 7/1/97 11.00 14.04 15,200 17.92 34,600
5,000 (6) 0.7% 8.25 6/25/98 8.25 10.53 11,400 13.44 25,950
5,000 (7) 0.7% 8.25 6/25/98 8.25 10.53 11,400 13.44 25,950
5,000 (8) 0.7% 8.25 6/25/98 8.25 10.53 11,400 13.44 25,950
5,000 (9) 0.7% 8.25 6/25/98 8.25 10.53 11,400 13.44 25,950
5,000 (10) 0.7% 8.25 6/25/98 8.25 10.53 11,400 13.44 25,950
12,000 (16) 1.6% 8.25 6/25/98 8.25 10.53 27,360 13.44 62,280
Stan Lewin 2,000 (11) 0.3% 11.00 7/1/97 11.00 14.04 6,080 17.92 13,840
Vice 2,000 (12) 0.3% 11.00 7/1/97 11.00 14.04 6,080 17.92 13,840
President 2,000 (13) 0.3% 11.00 7/1/97 11.00 14.04 6,080 17.92 13,840
Technology 2,000 (14) 0.3% 11.00 7/1/97 11.00 14.04 6,080 17.92 13,840
2,000 (15) 0.3% 11.00 7/1/98 11.00 14.04 6,080 17.92 13,840
2,000 (6) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
2,000 (7) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
2,000 (8) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
2,000 (9) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
2,000 (10) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
Jim Sullivan 2,000 (6) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
Vice 2,000 (7) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
President 2,000 (8) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
Sales 2,000 (9) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
2,000 (10) 0.3% 8.25 6/25/98 8.25 10.53 4,560 13.44 10,380
Uri Soudak 4,000 (17) 0.6% 16.81 10/6/97 16.81 21.45 18,560 27.38 42,280
Chief 4,000 (18) 0.6% 16.81 10/6/97 16.81 21.45 18,560 27.38 42,280
Operating 4,000 (19) 0.6% 16.81 10/6/97 16.81 21.45 18,560 27.38 42,280
Officer 4,000 (20) 0.6% 16.81 10/6/97 16.81 21.45 18,560 27.38 42,280
4,000 (21) 0.6% 16.81 10/6/97 16.81 21.45 18,560 27.38 42,280
-7-
1. There is no assurance that the value realized by an employee will be at or
near the amount estimated using this model. These amounts rely on assumed
future stock price movements that cannot be predicted accurately.
2. Vested on the date of grant, September 30, 1997.
3. Vested on the date of grant, December 31, 1997.
4. Vested on the date of grant, March 31, 1998.
5. Vested on the date of grant, June 30, 1998.
6. Granted June 25, 1998, vests June 25, 1999.
7. Granted June 25, 1998, vests June 25, 2000.
8. Granted June 25, 1998, vests June 25, 2001.
9. Granted June 25, 1998, vests June 25, 2002.
10. Granted June 25, 1998, vests June 25, 2003.
11. Granted July 1, 1997, vests July 1, 1998
12. Granted July 1, 1997, vests July 1, 1999
13. Granted July 1, 1997, vests July 1, 2000
14. Granted July 1, 1997, vests July 1, 2001
15. Granted July 1, 1997, vests July 1, 2002
16. Vested on date of grant, June 25, 1998; granted to replace options to
purchase 12,000 shares granted to directors quarterly from June 30, 1993
through May 31, 1994 at prices ranging from $11.77 to $17,50 per share.
17. Granted 10/6/97, vests October 6, 1998, set to expire 10/6/04, but expired
upon termination of employment 07/7/98
18. Granted 10/6/97, vests October 6, 1999, set to expire 10/6/04, but expired
upon termination of employment 07/7/98
19. Granted 10/6/97, vests October 6, 2000, set to expire 10/6/04, but expired
upon termination of employment 07/7/98
20. Granted 10/6/97, vests October 6, 2001, set to expire 10/6/04, but expired
upon termination of employment 07/7/98
21. Granted 10/6/97, vests October 6, 2002, set to expire 10/6/04, but expired
upon termination of employment 07/7/98
22. Options to purchase a total of 731,200 shares were granted to employees.
23. Fair market value at date of grant.
24. Fair market value of stock at end of actual option term, assuming annual
compounding at the stated rate, less the option price.
The following table sets forth certain information concerning the number
of shares of Common Stock acquired upon the exercise of stock options during the
Company's fiscal year ended June 30, 1998 and the number and value at June 30,
1998 of unsecured stock options to purchase shares of Common Stock held by the
Named Executive Officers.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Value of
Shares Value Number of Unexercised Unexercised in the Money
Acquired on Realized Options/SARs at FY-End (#) Options/SARs at FY-End ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ ---- ------------------------- -------------------------
Bruce Jagid 0 $0 446,500/185,000 $0/$0
Joseph Barrella 0 $0 131,000/50,000 $0/$0
Stanley Lewin 0 $0 35,000/35,000 $0/$0
James Sullivan 0 $0 7,000/38,000 $0/$0
Uri Soudak 10,000 $85,560 10,000/100,000 $0/$0
(1) Market value of Company's common stock at exercise or year-end, minus the
exercise price.
(2) All of Mr. Soudak's unexercisable shares expired shortly after he left the
Company's employ on July 7, 1998.
The Company has no long-term incentive plan. Consequently, there have been
no qualifying awards during the fiscal year ended June 30, 1998. Also, the
Company has no employee pension plans to which it makes contributions, except as
described below under "401(k) Plan".
Employment Arrangements
Effective March 1, 1994, the Company and Mr. Bruce Jagid entered into an
employment agreement ("1994 Agreement"). Under the terms of the 1994 Agreement,
Mr. Jagid's base salary was $200,000 per year. By an amendment to the 1994
Agreement, effective August 24, 1995 ("1995 Amendment"), Mr. Jagid's base salary
was increased to $250,000 per year, effective retroactively to March 1, 1995. In
accordance with the terms of the 1994 Agreement, the Company paid Mr. Jagid a
bonus in the amount of $111,200 during the year ended June 30, 1995. Effective
March 1, 1996, Mr. Jagid's salary was increased to $275,000 per year. Effective
March 1, 1997 Mr. Jagid's salary was increased to
-8-
$300,000 and the Company agreed that Mr. Jagid will receive one-year's salary as
severance should his employment terminate after a change in control of the
Company.
Pursuant to the 1994 Agreement, the Company granted to Mr. Jagid an option
to purchase 150,000 shares of Common Stock at a price of $11.00 per share. This
option expires on March 1, 2000 and vests with respect to 30,000 shares on March
1, 1995, 1996, 1997, 1998 and 1999. Pursuant to the 1994 Agreement such options
will vest on each of such dates even if Mr. Jagid is no longer an employee of
the Company, since, Mr. Jagid remained employed by the Company through March 1,
1997. Such option was ratified by the stockholders of the Company at the 1996
Annual Meeting of Stockholders.
As of March 1, 1995, the Company agreed, contingent on shareholder
approval, to grant Mr. Bruce Jagid an additional option to purchase 100,000
shares of Ultralife common stock at $14.25 per share. This option vests in
20,000 share increments on March 1, 1996, 1997, 1998, 1999 and 2000 respectively
and will expire on March 1, 2001. Such options, once vested, will remain
exercisable until expiration, notwithstanding the subsequent termination of Mr.
Jagid's employment. Such option was ratified at the Company's December 7, 1995
annual stockholders' meeting.
The original term of Mr. Jagid's 1994 Agreement was three years expiring
on February 28, 1997. The 1995 Amendment extended the term by three years, so as
to terminate on February 28, 2000. Unless terminated for cause, upon expiration
of the agreement, Mr. Jagid will receive severance at the rate of one month's
salary for each year of employment with the Company, not to exceed three months,
prorated for partial years worked.
On February 28, 1997, Mr. Jagid was granted an option under the Company's
1992 Stock Option Plan to purchase 50,000 shares at $8 7/8 per share, the
closing price on such date. Such Option expires on February 27, 2007, and will
vest with respect to 10,000 shares on February 28, of each of 1998, 1999, 2000,
2001 and 2002. On June 25, 1998, Mr. Jagid was granted an option under the
Company's 1992 Stock Option Plan to purchase 75,000 shares at $8.25 per share,
the closing price on such date. Such Option expires on June 25, 2004, and will
vest with respect to 15,000 shares on June 25, of each of 1999, 2000, 2001, 2002
and 2003
The Company entered into an employment agreement dated January 18, 1991
with Mr. Joseph N. Barrella (the "Agreement"). The Agreement was amended as of
December 21, 1992 (the "Amendment"). The Agreement and the Amendment provide
that Mr. Barrella will serve as President, at an annual salary of $110,000 for
1991 and 1992, $125,000 for 1993, $135,000 for 1994, $145,000 for 1995 and
$155,000 for 1996. Subsequent to January 20, 1994, Mr. Barrella became an
"at-will" employee. The Agreement and Amendment provide that the Company will
provide to Mr. Barrella in addition to his compensation, (i) reimbursement for
an apartment in the Rochester, New York area to a maximum of $6,000 per year,
(ii) a leased automobile with a cost not to exceed $700 per month, and (iii)
granted Mr. Barrella an "incentive" Option to acquire 100,000 shares of Common
Stock of the Company under the Company's 1992 Stock Option Plan (discussed
below). The Company and Mr. Barrella have agreed that after December, 1996, Mr.
Barrella will no longer be reimbursed for an apartment in the Rochester, New
York area. Effective July 1, 1997 Mr. Barrella's salary was increased to
$165,000 per annum. On June 25, 1998, Mr. Barrella was granted an option under
the Company's 1992 Stock Option Plan to purchase 25,000 shares at $8.25 per
share, the closing price on such date. Such Option expires on June 25, 2004, and
will vest with respect to 5,000 shares on June 25, of each of 1999, 2000, 2001,
2002 and 2003.
In addition to the above compensation, each board member receives a
$750.00 monthly retainer as well as $750.00 for each board meeting attended. In
addition, commencing June 30, 1993, each director receives an option, at the end
of each calendar quarter to purchase 1,500 shares of the Company's common stock.
This option is granted to each director on the last day of the calendar quarter;
it vests immediately with a term of five years from the date of grant and is
granted at a purchase price equal to the closing price of the Common Stock on
the date of grant.
401(K) PLAN
The Company established a profit sharing plan under Sections 401(a) and
401(k) of the Code (the "401(k) Plan"), effective as of June 1, 1992 which was
amended effective as of January 1, 1994. All employees in active service which
have completed 1,000 hours of service or were participating in the 401(k) Plan
as of January 1, 1994, not otherwise covered by a collective bargaining
agreement (unless such agreement expressly provides that those employees are to
be included in the 401(k) Plan), are eligible to participate in the 401(k) Plan.
Eligible employees may direct that a portion of their compensation, up to a
maximum of 17% (in accordance with all IRS limitations in effect on January 1,
1998) be withheld by the Company and
-9-
contributed to their account under the 401(k) Plan.
In April, 1996 the Board of Directors authorized a Company matching
contribution up to a maximum of 1 1/2% of an employee's annual salary for the
calendar year ended December 31, 1996 and 3% for subsequent calendar years. The
Company made a contribution of $30,742 for calendar year 1996 and $89,422 for
calendar year 1997.
All 401(k) contributions are placed in a trust fund to be invested at the
trustee's discretion, except that the Company may designate that the funds be
placed and held in specific investment accounts managed by an investment manager
other than the trustee. Amounts contributed to employee accounts by the Company
or as compensation reduction payments, and any earnings or interest accrued on
employee accounts, are not subject to federal income tax until distributed to
the employee, and may not be withdrawn (absent financial hardship) until death,
retirement or termination of employment.
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
CONCERNING EXECUTIVE COMPENSATION
OVERVIEW
Compensation determinations are made by the Company's Compensation and
Stock Option Committee. The Company seeks to provide executive compensation that
will support the achievement of the Company's financial goals while attracting
and retaining talented executives and rewarding superior performance.
The Company seeks to provide an overall level of compensation to the
Company's executives that is competitive within the Company's industry and with
other companies of comparable size and complexity. Compensation in any
particular case may vary from the industry average on the basis of annual and
long-term Company performance as well as individual performance. The
Compensation and Stock Option Committee will exercise its discretion to set
compensation where, in its judgment, external, internal or individual
circumstances warrant it.
In general, the Company compensates its executive officers through a
combination of salary and stock option awards. Additionally, the Company's
executives are eligible to participate in or receive benefits under an employee
benefit plan made available by the Company to its executives and/or employees.
SALARY
Of the primary elements of executive compensation set forth above, salary
is the least affected by the Company's performance; although it is very much
dependent on individual performance. The Company believes that salaries paid to
its executives are competitive with industry norms. The salary levels and annual
increases of all executive officers of the Company must be approved by the
Compensation and Stock Option Committee. Salary levels for executives are
determined by progress made in the operational and functional areas for which
they are responsible as well as the overall profitability of the Company.
Executives' salaries are reviewed annually. The timing and amount of any
increase to executives are both dependent upon (i) the performance of the
individual and, to a lesser extent, (ii) the financial performance of the
Company.
STOCK OPTIONS
Stock options are designed to provide long-term incentives and rewards,
tied to the price of the Company's Common Stock. Given the vagaries of the stock
market, stock price performance and financial performance are not always
consistent. The Compensation and Stock Option Committee believes that stock
options, which provide value to the participants only when the Company's
stockholders benefit from stock price appreciation, are an appropriate
complement to the Company's overall compensation policies. Plan as well as
non-plan awards are made to executive officers of the Company. The decision to
award stock options to an executive is based upon such considerations as the
executive's position with the Company and is designed to be competitive for
individuals at that level. The Compensation and Stock Option Committee
administers the Company's stock option plans and non-plan stock options to
executives of the Company.
-10-
EMPLOYEE BENEFIT PLANS
Executives of the Company are each entitled to participate in or receive
benefits under any pension plan, profit-sharing plan, life insurance plan,
health insurance plan or other employee benefit plan made available by the
Company to its executives and employees. Currently, the Company provides medical
insurance for its executive officers and has established the 401(k) Plan. All
executive officers and employees are eligible to participate in the 401(k) Plan.
CHIEF EXECUTIVE OFFICER
In reviewing the performance of the Chief Executive Officer, the
Compensation and Stock Option Committee considers the scope and complexity of
his job during the past year, progress made in planning for the future
development and growth and return on assets of the Company. Upon review of such
criteria and upon the favorable recommendation of the Compensation and Stock
Option Committee, Mr. Jagid was granted a $150,000 bonus for Fiscal Year ended
June 30, 1998 and stock options to purchase 75,000 shares .
Compensation and Stock Option Committee
Joseph C. Abeles
Carl H. Rosner
Richard Hansen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation and Stock Option Committee,
consisting of Messrs. Abeles, Rosner and Hansen, deliberate on issues concerning
executive compensation. Mr. Abeles acts as the Company's Treasurer. Mr. Abeles
is a director of IGC and a member of IGC's Compensation Committee. Mr. Rosner is
the Chairman and Chief Executive Officer of IGC and is a member of the Company's
Compensation and Stock Option Committee. Mr. Hansen is President and Chief
Executive Officer of Pennsylvania Merchants Group Ltd.
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock for the period commencing December 23, 1992 (the date of
the Company's initial public offering) through the fiscal year ended June 30,
1998 with the NASDAQ National Market Index and the NASDAQ Electrical Components
Index for the same period. The comparison assumes $100 was invested on December
23, 1992 in the Company's Common Stock and in each of the comparison groups, and
assumes reinvestment of dividends. The Company paid no dividends during the
comparison period.
[The following information was depicted as a line graph in the printed material]
ULBI US NASDAQ Elect. Components
---- --------- -----------------
12/23/92 100 100 100
6/30/93 117 91 95
12/31/93 136 98 110
6/30/94 155 122 197
12/30/94 204 138 183
6/30/95 121 157 208
12/29/95 73 170 316
6/28/96 99 190 341
12/31/96 145 209 332
6/30/97 72 251 340
-11-
OTHER MATTERS
The Board of Directors does not intend to present, and has not been
informed that any other person intends to present, any matters for action at the
Meeting other than those specifically referred to in this proxy statement. If
any other matters properly come before the Meeting, it is intended that the
holders of the proxies will act in respect thereof in accordance with their best
judgment.
In order to be eligible for inclusion in the Company's proxy materials for
the next year's annual meeting of stockholders, any stockholder proposal (other
than the submission of nominees for directors) must be received by the Company
at its principal offices not later than the close of business on July 18, 1999.
A representative of Arthur Andersen LLP, the Company's principal
accountant, plans to be present at the Meeting, will have the opportunity to
make a statement, and is expected to be available to respond to questions.
Copies of the Company's Annual Report and form 10-K for the year ended
June 30, 1998, as filed with the SEC, will be furnished without charge to
beneficial stockholders or stockholders of record on October 23, 1998, upon
request. Please contact: Corporate Secretary, Ultralife Batteries, Inc., 1350
Route 88 South, Post Office Box 622, Newark, New York, 14513, Telephone (315)
332-7100.
October 26, 1998 By Order of the Board of Directors
Bruce Jagid
Chairman of the Board of Directors
and Chief Executive Officer
-12-
PROXY ULTRALIFE BATTERIES, INC
Annual Meeting of Shareholders o December 8, 1998
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints each of Bruce Jagid and Joseph Barrella as the
undersigned's proxy, with full power of substitution, to vote all the
undersigned's shares of common stock in Ultralife Batteries, Inc. (the
"Company") at the Annual Meeting of Stockholders of the Company to be held on
December 8, 1998 at 10:30 A.M. local time, at the offices of the Chase Manhattan
Bank, 410 Park Avenue, New York, New York, or at any adjournment, on the matters
described in the Notice of Annual Meeting and Proxy Statement and upon such
other business as may properly come before such meeting or any adjournments
thereof, hereby revoking any proxies heretofore given.
PROPOSAL 1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote for
all or the following nominees:
___________________________________________
(Nominees: Bruce Jagid, Joseph Abeles, Joseph Barrella, Richard Hansen,
Arthur Lieberman, Martin Rosansky, Carl H. Rosner)
(continued and to be signed on reverse side)
Each properly executed proxy will be voted in accordance with specifications
made on the reverse side hereof. If no specifications are made, the shares
represented by this proxy will be voted FOR the listed nominees.
DATED:__________________1998
_____________________________
Signature
_____________________________
Signature if Held Jointly
Sign exactly as set forth
herein. If signed as executor,
administrator, trustee or
guardian, indicate the
capacity in which you are
acting. Proxies by
corporations should be signed
by a duly authorized officer
and bear corporate seal.
Please Sign and Return the Proxy Card Promptly in Enclosed Envelope
