SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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[ ] Definitive Additional Materials
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Ultralife Batteries, Inc.
-------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
--------------
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(1) Amount Previously Paid:
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(4) Date Filed:
ULTRALIFE BATTERIES, INC.
2000 TECHNOLOGY PARKWAY
NEWARK, NEW YORK 14513
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 7, 1999
Notice is hereby given that the 1999 Annual Meeting of Stockholders (the
"Meeting") of Ultralife Batteries, Inc. (the "Company") will be held Tuesday on
December 7, 1999 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 22, 1999 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 LLP 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
Arthur M. Lieberman
Chairman of the Board of Directors
Dated: October 25, 1999
================================================================================
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.
2000 TECHNOLOGY PARKWAY
NEWARK, NEW YORK 14513
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 7, 1999
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 1999 Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, December 7, 1999 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 22, 1999
are entitled to notice of, and to vote at, the annual meeting of stockholders.
As of October 22, 1999, there were 11,211,536 shares of the Company's stock, par
value $.10 per share ("Common Stock"), outstanding, each entitled to one vote
per share at the Meeting1.
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 27,
1999.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors currently has 7 directors, 6 of whom are running
for reelection and one of whom, John D. Kavazanjian, was elected by the Board of
Directors on August 25, 1999 to fill the vacancy left by Martin Rosansky who
resigned from the Board of Directors on June 6, 1999. 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
Arthur Lieberman 64 Mr. Lieberman has been a director since March 1991
and Chairman of the Board since January 1999. 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.
- ----------
1 Prior to subtraction of 27,250 treasury shares and 322,700 shares out of
700,000 shares owned by Ultralife Taiwan, Inc., a Taiwanese venture of which the
Company owns approximately 46%.
Name Age Present Principal Occupation and Employment History
John D. Kavazanjian 48 Mr. Kavazanjian was elected as the Company's
President and Chief Executive Officer effective July
12, 1999 and as a Director on August 25, 1999. Prior
to joining the Company, Mr. Kavazanjian worked for
Xerox Corporation from 1994 in several capacities,
most recently as Corporate Vice President, Chief
Technology Officer, Document Services Group. From
1992 until 1994 he was the Senior Vice President,
Operations for Kendal Square Research Corporation, a
high performance computer manufacturer. From 1991 to
1992 he was the Chief Operating Officer for Network
Computing, Inc. From 1982 to 1990 he worked for Data
General Corporation, most recently as Vice
President, PC/Peripheral Business Unit
Joseph C. Abeles 84 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.
Joseph N. Barrella 53 Mr. Barrella, a founder of the Company, has been a
director since March 1991, was President from March
1991 through December 1998, was the Company's Chief
Operating Officer from October 1992 through November
1996, and has been its Senior Vice President
Business Development since December 1998. 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 25 years. He holds a number of patents
relating to lithium battery designs and has authored
several publications relating to battery technology.
Richard Hansen 59 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.
Bruce Jagid 59 Mr. Jagid, a founder of the Company, has been a
director since March 1991. Mr. Jagid was the
Company's Chairman from March 1991 until January
1999 and its Chief Executive Officer from January
1992 until January 1999. Mr. Jagid has over 25 years
experience in the technical and business aspects of
the energy conversion field. Mr. Jagid was a founder
of 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 ID
Systems, Inc. and THQ, Inc. Mr. Jagid holds numerous
patents in the area of battery technology and has
authored several publications on the subject.
Carl H. Rosner 70 Mr. Rosner, a director of the Company since January
1992, is the Chairman of IGC. Mr. Rosner has been
Chairman of IGC since its formation and was
President and Chief Executive Officer until May 31,
1999.
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 thirteen (13) times during the fiscal year
ended June 30, 1999. Messrs. Abeles, Barrella, and Rosner attended all 13
meetings. Mr. Rosansky attended all 11 meetings held while he was a director.
Mr. Lieberman and Mr. Jagid missed 1 meeting, and Mr. Hansen missed 3 meetings.
Mr. Kavazanjian was not a director during fiscal year 1999.
Each board member receives a $750 monthly retainer as well as $750 for
each board meeting attended, other than telephonic meetings. 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
-2-
the date of grant. Effective February 24, 1999, the Board revised the
compensation so that the $750 paid monthly and for each board meeting attended
is not paid to Directors who are also employed by the Company. In addition, the
Board agreed to pay Mr. Lieberman $35,000 for acting as Chairman of the Board
for the period from January 26, 1999 through December 7, 1999, and at the rate
of $15,000 per annum thereafter.
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 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 after
informal discussions on several occasions during the fiscal year ended June 30,
1999.
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, 1999.
The members of the Executive Committee are Joseph Abeles, Arthur Lieberman
and John Kavazanjian. Messrs. Jagid and Rosansky sat on this committee until
January 1999. 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, 1999.
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, 1999 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 and certain named
executive officers of the Company, and (iii) all directors and executive
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.
Number of Shares Percent
Name Beneficially Owned Beneficially Owned (14)
---- ------------------ -----------------------
State of Wisconsin Investment Board (1) 1,077,000 9.91%
Intermagnetics General Corporation ("IGC")(2) 1,015,586 9.32%
Ultralife Taiwan, Inc.(3) 700,000 6.44%
Joseph Abeles (4) 316,000 2.89%
Joseph Barrella (5) 343,000 3.11%
Bruce Jagid (6) 739,400 6.49%
Richard Hansen (7) 44,500 *
John Kavazanjian(8) 51,500 *
-3-
Number of Shares Percent
Name Beneficially Owned Beneficially Owned (14)
---- ------------------ -----------------------
Arthur Lieberman (9) 131,500 1.21%
Carl Rosner (10) 39,833 *
Roger O'Brien(11) 33,000 *
James Sullivan(12) 44,900 *
All directors and officers as a group (12 persons) (13) 1,765,533 14.94%
- ----------
*Less than 1%
1. With an address at121 East Wilson Street, Madison, Wisconsin 53707. Based
on amendment No. 3 to Form 13 G Filed February 2, 1999.
2. With an address at 450 Old Niskayuna Rd., Latham, NY 12210-0461. Includes
833 shares and options to purchase 39,000 shares which may be exercised
within 60 days beneficially owned by Mr. Carl H. Rosner. Mr. Rosner is the
Chairman 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.
3. With an address at 5F, 6 Li-Shin Road, Science-Based Industrial Park,
Hsinchu, Taiwan, Republic of China. The Company owns approximately 46% of
this venture and has the right to nominate half of the Directors.
4. Includes 36,000 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 1,014,086 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
5. Includes 166,000 shares subject to options which may be exercised within
60 days.
6. Includes 529,000 shares subject to options which may be exercised within
60 days. Includes 3,000 shares held in trust for Mr. Jagid's children of
which he disclaims beneficial ownership.
7. Includes 37,500 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.
8. Includes options to purchase 51,500 shares by Mr. Kavazanjian.
9. Includes 39,000 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.
10. Includes 39,000 options to purchase shares which may be exercised within
60 days. Does not include 975,753 shares owned by IGC. Mr. Rosner is the
Chairman 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.
11. Includes options to purchase 20,000 shares by Mr. O'Brien.
12. Includes options to purchase 28,000 shares by Mr. Sullivan.
13. Includes 954,000 shares subject to options which may be exercised within
60 days. Does not include 975,753 shares owned directly by IGC, of which
Mr. Rosener is the Chairman and Mr. Abeles a Director, and does not
include 700,000 shares owned by Ultralife Taiwan, Inc., a Taiwanese
venture of which the Company owns 46%.
14. Based on 11,211,536 issued shares less 27,250 treasury share and less
322,700 shares out of 700,000 shares owned by Ultralife Taiwan, Inc., a
venture of which the Company owns approximately 46% and has the right to
nominate half of the Directors.
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.
Executive 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, 1999, 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) Messrs. Comerford, Dix , Fischer and O'Brien were late in
filing a Form 3 regarding their status as a reporting persons (2) Mr. O'Brien
was late in reporting a purchase made on March 26, 1999 and an option granted in
June 1999; (3) Mr. Sullivan was late in reporting 5 purchases made on October 1,
1998, in reporting an option granted during February 1998, an option granted
during June 1998 and an option granted in June 1999; (4) Mr. Rosansky was late
in reporting an option granted on March 31, 1999.
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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'Brien 51 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. 59 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, as Vice President and then as
Vice-President Corporate Planning and
Administration. Prior thereto he worked for Exxon
Enterprises as Director of Finance and
Administration.
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.
Peter Comerford 42 Mr. Comerford was named Vice President of
Administration and General Counsel on July 1, 1999.
He joined the Company in May of 1997 as Senior
Corporate Counsel and was appointed Director of
Administration and General Counsel in December of
that year. Prior to joining the Company, Mr.
Comerford was a practicing attorney for some
fourteen years having worked primarily in municipal
law departments including the City of Niagara Falls,
New York where he served as the Corporation Counsel.
Mr. Comerford has a B.A. from the State University
of New York at Buffalo, an M.B.A. from Canisus
College and a J.D. from the University of San Diego
School of Law.
Eric Dix 41 Mr. Dix joined the Company as Vice President
Technology in February 1999. Before then Mr. Dix
worked for Micron Communications Corporation from
October 1996, as Technical Marketing Manager and as
Director, Battery Operations. From June 1995 until
October 1996, Mr. Dix was Vice President, Marketing
for Moltech Corporation, a lithium rechargeable
battery company. From August 1993 until June 1995
Mr. Dix worked for Valence Technology, Inc., a
developer of lithium rechargeable batteries. From
December 1989 until July 1993 Mr. Dix was Senior
Director of Technology of Tandy Magnetic Media
division of Tandy Electronics (previously Memorex).
From May 1983 until December 1989 Mr. Dix worked at
Control Data Corporation in several positions, most
recently as Director of Engineering. Mr. Dix has an
MBA from Santa Clara University and a B.S. Chemistry
from the University of Northern Iowa.
The individuals named in the following tables include, as of June 30,
1999, the Company's Chief Executive Officers and the three other most highly
compensated executive officers of the Company ("Named Executive Officers"). All
other executive officers of the Company during the fiscal year ended June 30,
1999 earned less than $100,000 for that year.
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The following table sets forth information concerning the annual and
long-term compensation of the Named Executive Officers for all services in all
capacities to the Company and its subsidiary during the Company's fiscal years
ended June 30, 1999, 1998 and 1997:
Summary Compensation Table
Long Term Compensation
----------------------------------------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------------------------------------------------------------------
Securities
Name and Other Annual Restricted Stock Underlying LTIP All Other
Principal Position Year Salary($) Bonus($) Compensation($) Awards ($) Options/ SARs Payouts($) Compensation
- ------------------ ---- -------- ------- ------------- ---------------- ------------- --------- ------------
(1) (#) ($)
Bruce Jagid 1999 $311,947 $ 0 $38,819 $0 6,000 $ 0 $0
Former Chief 1998 307,692 150,000 35,373 0 93,000 0 0
Executive 1997 275,000 0 36,542 0 56,000 0 0
Officer(2) 0
Joseph Abeles 1999 0 0 14,250 0 6,000 0 0
Acting Chief 1998 0 0 14,250 0 15,000 0 0
Executive 1997 0 0 14,250 0 6000 0 0
Officer (3)
Joseph Barrella 1999 170,389 0 37,593 0 6,000 0 0
Senior Vice 1998 164,769 15,000 33,670 0 68,000 0 0
President 1997 155,000 0 36,288 0 6,000 0 0
Business
Development
Roger O'Brien 1999 146,154 0 8,886 0 150,000 0 0
Chief Operating
Officer (4)
James Sullivan 1999 124,500 0 8,543 0 30,000 0 0
Vice President 1998 113,578 15,000 14,018 0 10,000 0 0
Sales 1997 99,846 0 11,508 0 35,000 0 0
(1) The amounts reported in this column are categorized in the following
table.
(2) Mr. Jagid resigned as Chief Executive Officer of the Company on January
26, 1999
(3) Mr. Abeles served as Acting Chief Executive Officer of the Company from
the resignation of Mr. Jagid on January 26, 1999 until Mr. John
Kavazanjian joined the Company in that position on July 12, 1999. Mr.
Abeles received no compensation for so acting. During that period Mr.
Abeles received only the compensation received by all directors described
above.
(4) Mr. O'Brien joined the Company on July 8, 1998
Bruce Joseph Joseph Roger James
Jagid Abeles(1) Barrella O'Brien (2) Sullivan
----- --------- -------- ----------- --------
Insurance 1999 $8,502 $0 $8,509 $2,886 $2,543
Insurance 1998 8,018 0 8,018 0 8,018
Insurance 1997 7,513 0 7,513 0 7,008
Automobile 1999 9,190 0 8,517 6,000 6,000
Automobile 1998 11,029 0 8,068 0 6,000
Automobile 1997 11,029 0 8,500 0 4,500
Directors Fees 1999 14,250 14,250 10,125 0 0
Directors Fees 1998 14,250 14,250 14,250 0 0
Directors Fees 1997 15,750 15,750 15,750 0 0
401(k) Plan 1999(3) 6,877 0 5,942 0 0
401(k) Plan 1998 2,076 0 3,334 0 0
401(k) Plan 1997 2,250 0 2,250 0 0
(1) Mr. Abeles served as Acting Chief Executive Officer of the Company from
the resignation of Mr. Jagid on January 26, 1999 until Mr. John
Kavazanjian joined the Company in that position on July 12, 1999. Mr.
Abeles received no compensation for so acting. During that period Mr.
Abeles received only the compensation received by all directors described
above.
(2) Mr. O'Brien joined the Company on July 8, 1998.
(3) Represents the Company's matching grants to the employees' 401(k) Plan
accounts for fiscal years ended June 30, 1999, 1998 and 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, 1999:
Option/SAR Grants in Last Fiscal Year
Potential
Realizable Value at Assumed Annual Rates of
Individual Grants Stock Price Appreciation for Option Term (1)
- ---------------------------------------------------------------------------- -------------------------------------------------
Shares % Price Exp Date 0% Stock 5% Stock 5% 10% Stock 10%
------ - ----- --------
Dollar Dollar
(16) (17) Price Price Gain(18) Price Gain (18)
----- ----- ----- ----- ---------
Bruce Jagid 1,500 (2) 0.4% $6.00 9/30/03 $6.00 $7.66 $2,490 $9.66 $5,490
Former Chief 1,500 (3) 0.4% 5.19 12/31/03 5.19 6.62 2,149 8.36 4,759
Executive Officer 1,500 (4) 0.4% 5.06 3/31/04 5.06 6.46 2,096 8.15 4,631
1,500 (5) 0.4% 5.50 6/30/04 5.50 7.02 2,280 8.86 5,040
Joseph C. Abeles 1,500 (2) 0.4% 6.00 9/30/03 6.00 7.66 2,490 9.66 5,490
Former Acting Chief 1,500 (3) 0.4% 5.19 12/31/03 5.19 6.62 2,149 8.36 4,759
Executive Officer 1,500 (4) 0.4% 5.06 3/31/04 5.06 6.46 2,096 8.15 4,631
1,500 (5) 0.4% 5.50 6/30/04 5.50 7.02 2,280 8.86 5,040
Joseph N. Barrella 1,500 (2) 0.4% 6.00 9/30/03 6.00 7.66 2,490 9.66 5,490
Vice President 1,500 (3) 0.4% 5.19 12/31/03 5.19 6.62 2,149 8.36 4,759
Business Development 1,500 (4) 0.4% 5.06 3/31/04 5.06 6.46 2,096 8.15 4,631
1,500 (5) 0.4% 5.50 6/30/04 5.50 7.02 2,280 8.86 5,040
Roger O'Brien 20,000 (6) 5.8% 8.38 7/7/04 8.38 11.23 57,100 14.85 129,500
Chief Operating 20,000 (7) 5.8% 8.38 7/7/04 8.38 11.23 57,100 14.85 129,500
Officer 20,000 (8) 5.8% 8.38 7/7/04 8.38 11.23 57,100 14.85 129,500
20,000 (9) 5.8% 8.38 7/7/04 8.38 11.23 57,100 14.85 129,500
20,000 (10) 5.8% 8.38 7/7/04 8.38 11.23 57,100 14.85 129,500
10,000 (11) 2.9% 5.50 6/30/05 5.50 7.37 18,700 9.74 42,400
10,000 (12) 2.9% 5.50 6/30/05 5.50 7.37 18,700 9.74 42,400
10,000 (13) 2.9% 5.50 6/30/05 5.50 7.37 18,700 9.74 42,400
10,000 (14) 2.9% 5.50 6/30/05 5.50 7.37 18,700 9.74 42,400
10,000 (15) 2.9% 5.50 6/30/05 5.50 7.37 18,700 9.74 42,400
James Sullivan 6,000 (11) 1.7% 5.50 6/30/05 5.50 7.37 11,220 9.74 25,440
Vice President 6,000 (12) 1.7% 5.50 6/30/05 5.50 7.37 11,220 9.74 25,440
Sales 6,000 (13) 1.7% 5.50 6/30/05 5.50 7.37 11,220 9.74 25,440
6,000 (14) 1.7% 5.50 6/30/05 5.50 7.37 11,220 9.74 25,440
6,000 (15) 1.7% 5.50 6/30/05 5.50 7.37 11,220 9.74 25,440
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, 1998.
3. Vested on the date of grant, December 31, 1998.
4. Vested on the date of grant, March 31, 1999.
5. Vested on the date of grant, June 30, 1999.
6. Granted July 7, 1998, vests July 7, 1999.
7. Granted July 7, 1998, vests July 7, 2000.
8. Granted July 7, 1998, vests July 7, 2001.
9. Granted July 7, 1998, vests July 7, 2002.
10. Granted July 7, 1998, vests July 7, 2003.
11. Granted June 30, 1999, vests June 30, 2000.
12. Granted June 30, 1999, vests June 30, 2001.
13. Granted June 30, 1999, vests June 30, 2002.
14. Granted June 30, 1999, vests June 30, 2003.
15. Granted June 30, 1999, vests June 30, 2004.
16. 346,000 total number of options were granted to employees.
17. Fair market value of stock at date of grant.
18. Fair market value of stock at end of actual option term assuming annual
compounding at the stated rate, less the option price.
-7-
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, 1999 and the number and value at June 30,
1999 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 $0 527,000/110,000 $0/$0
Joseph Abeles 0 $0 34,500/0 $0/$0
Joseph Barrella 0 $0 152,500/35,000 $0/$0
Roger O'Brien 0 $0 20,000/130,000 $0/$0
James Sullivan 0 $0 28,000/72,000 $0/$0
(1) Market value of Company's common stock at exercise or year-end, minus the
exercise price.
The Company has no long-term incentive plan. Consequently, there have
been no qualifying awards during the fiscal year ended June 30, 1999. 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 which, Mr. Jagid's base salary
was $200,000 per year. By an amendment, 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 $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.
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.
On January 26, 1999 Mr. Jagid retired as Chief Executive Officer of the
Company. Mr. Jagid will continue to receive salary under Mr. Jagid's 1994
Agreement as amended until June 30, 2000.
-8-
Since January 20, 1994, Mr. Barrella has been an "at-will" employee.
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.
Effective February 1999, the Company increased Mr. Barrella's compensation to
offset the fact that as an employee/director he was no longer receiving monetary
compensation provided to outside directors.
In connection with the Company hiring Mr. John D. Kavazanjian as the
Company's President and Chief Executive Officer effective July 12, 1999, the
Company agreed to pay him $300,000 per annum. Additionally the Company granted
Mr. Kavazanjian an option to purchase 500,000 shares of its common stock for $5
3/16 per share until July 12, 2005. The option vests 50,000 shares at issue and
90,000 shares on July 12, 2000, 2001, 2002, 2003 and 2004. The Company agreed
that if it terminated Mr. Kavazanjian during the first three years of
employment, except for cause, he will be entitled to one year's severance and
any options which otherwise would vest at the next annual date will vest.
In addition to the above compensation, each board member receives a $750
monthly retainer as well as $750 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 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, $89,422 for
calendar year 1997 and $120,164 for calendar year 1998.
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.
-9-
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.
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.
Compensation and Stock Option Committee
Joseph C. Abeles
Carl H. Rosner
Richard Hansen
-10-
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 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,
1999 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.
[Graph depicted as a Bar Chart]
12/30/94 6/30/95 12/29/95 6/28/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99
-------- ------- -------- ------- -------- ------- -------- ------- -------- -------
ULBI 100 114 150 89 54 73 106 53 32 34
US NASDAQ 100 125 141 160 174 195 213 256 300 367
Elect. Components 100 178 166 188 286 309 300 307 464 551
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, 2000.
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.
-11-
Copies of the Company's Annual Report on Form 10-K for the year ended June
30, 1999, as filed with the SEC, will be furnished without charge to beneficial
stockholders or stockholders of record on October 22, 1999, upon request. Please
contact: Corporate Secretary, Ultralife Batteries, Inc., 2000 Technology
Parkway, Newark, New York, 14513, Telephone (315) 332-7100.
October 25, 1999 By Order of the Board of Directors
Arthur M. Lieberman
Chairman of the Board of Directors
PROXY
ULTRALIFE BATTERIES, INC.
Annual Meeting of Shareholders o December 7, 1999
Proxy solicited on behalf of the Board of Directors
The undersigned hereby appoints each of Arthur Lieberman and John Kavazanjian 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 7, 1999 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.
(Continued and to be signed on the reverse side)
|X| Please mark your votes as in this example using dark ink only.
WITHHOLD
FOR AUTHORITY
all nominees to vote for all nominees
listed at right listed at right.
1. ELECTION OF DIRECTORS |_| |_|
(INSTRUCTION: To withhold authority to vote for any individual nominee, check
the box to vote "FOR" all nominees and strike a line through the nominee's name
in the list at right.)
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.
Nominees: Joseph Abeles
Joseph Barrella
Richard Hansen
Bruce Jagid
John D. Kavazanjian
Arthur Lieberman
Carl H. Rosner
_____________________________________________ Date: _____________________, 1999
SIGNATURE
_____________________________________________ Date: _____________________, 1999
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.