<PAGE>
BATTERIES BATTERIES, INC.
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 17, 1999
---------------------
To the Stockholders of Batteries Batteries, Inc.:
The Annual Meeting of Stockholders of Batteries Batteries, Inc., a Delaware
corporation (the "Company"), will be held at the offices of the Company's
Advanced Fox Cellular Accessories Division, 1840 County Line Road, Huntington
Valley, Pennsylvania, on Wednesday, November 17, 1999, at 10:00 A.M., Eastern
Time, for the following purposes:
(1) To elect six Directors of the Company, each of whom is to hold office
until the next Annual Meeting of Stockholders and until the due election and
qualification of his or her successor.
(2) To ratify the selection of Arthur Andersen LLP as the auditors for
fiscal year 1999.
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on October 1, 1999
will be entitled to notice of, and to vote at, the meeting or any adjournments
thereof.
If you cannot personally attend the meeting, it is requested that you
promptly fill in, sign, and return the proxy submitted to you herewith.
By order of the Board of Directors
/s/ Christopher McConnell
----------------------------------
CHRISTOPHER F. McCONNELL
Chairman of the Board
Dated: October 25, 1999
<PAGE>
BATTERIES BATTERIES, INC.
PROXY STATEMENT FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON NOVEMBER 17, 1999
GENERAL INFORMATION
Introduction. This proxy statement is being furnished in connection with
the solicitation of proxies by the Board of Directors of Batteries Batteries,
Inc., a Delaware corporation (the "Company"), to be voted at the Annual Meeting
of Stockholders (the "Meeting") scheduled to be held at the offices of the
Company's subsidiary Advanced Fox Cellular, Inc., 1840 County Line Road,
Huntington Valley, Pennsylvania, on Wednesday, November 17, 1999, at 10:00 A.M.,
Eastern Time, and at any adjournments thereof.
The address of the Company's executive offices is Building 1EB, Chimney
Rock Road, Bound Brook, New Jersey 08805 and its telephone number is (732)
764-0619. This proxy statement and the accompanying proxy are first being
distributed to the stockholders of the Company on or about October 25, 1999.
Voting Securities and Record Date. Only stockholders of record as of the
close of business on October 1, 1999 are entitled to notice of and to vote at
the Meeting or any adjournment thereof. On that date, the Company had
outstanding 5,132,231 shares of Common Stock, par value $.01 per share (the
"Common Stock"). The presence in person or by proxy of the holders of a majority
of such shares shall constitute a quorum for the transaction of business at the
Meeting. Each share is entitled to one vote and, accordingly, holders of the
Common Stock are entitled to cast a total of 5,132,231 votes at the Annual
Meeting. Cumulative voting rights do not exist with respect to the election of
Directors.
Revocability and Voting of Proxies. Each form of proxy which is properly
executed and returned to the Company will be voted in accordance with the
directions specified thereon, or, if no directions are specified, will be voted
FOR the election as Directors of the persons named herein under the caption
"Election of Directors" and FOR ratification of the selection of Arthur Andersen
LLP as auditors for fiscal year 1999. Any stockholder giving a proxy may revoke
it at any time before it is exercised. Such revocation may be effected by voting
in person or by proxy at the Meeting, by returning to the Company prior to the
Meeting a proxy bearing a later date, or by otherwise notifying the Secretary of
the Company in writing prior to the Meeting.
Solicitation of Proxies. The cost of soliciting proxies will be borne by
the Company. In addition to the use of the mails, proxies may be solicited,
personally or by telephone or telegraph, by officers, Directors and regular
employees of the Company, who will not be specially compensated for this
purpose. The Company will also request record holders of Common Stock who are
securities brokers, custodians, nominees and fiduciaries to forward soliciting
material to the beneficial owners of such stock, and will reimburse such
brokers, custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses in forwarding soliciting material.
Recommendations. The Board of Directors recommends that the shareholders
vote FOR the election of the six nominees for Director and FOR the ratification
of the selection of Arthur Andersen LLP as the auditors for fiscal year 1999.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth as information with respect to the
beneficial ownership as of October 1, 1999 of shares of Common Stock of each
stockholder of the Company known by management of the Company to own
beneficially more than 5% of the outstanding shares of Common Stock:
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
- ------------------- ------------------ -----------
Stephen Rade ...................... 820,000 15.5%
3915 Somers Drive
Huntington Valley, PA 19006
- ----------
(1) As used herein, the term beneficial ownership with respect to a security
is defined by Rule 13d-3 under the Exchange Act as consisting of sole or
shared voting power (including the power to vote or direct the vote
and/or sole or shared investment power (including the power to dispose or
direct the disposition)) with respect to the security through any
contract, arrangement, understanding, relationship, or otherwise,
including a right to acquire such power(s) during the next 60 days after
October 1, 1999. Unless otherwise noted, beneficial ownership consists of
sole ownership, voting, and investment power with respect to all shares
of Common Stock shown as beneficially owned by them.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
The by-laws of the Company provide that the Company's business and affairs
shall be managed by its Board of Directors. The by-laws provide that the number
of directors shall not be less than three. Within the foregoing limits, the
Board of Directors may from time to time fix the number of directors. The Board
of Directors has fixed the current number of directors on the Board at six.
Vacancies on the Board of Directors may be filled by a majority of the remaining
members of the Board of Directors, though less than a quorum, or the
shareholders, and each person so appointed shall be a director until the next
succeeding annual meeting of shareholders and until his or her successor shall
have been elected and qualified.
The Board of Directors does not have a standing nominating committee to
nominate candidates for the Board of Directors. Rather, the Board of Directors
performs such function. The Board of Directors unanimously nominated Stephen
Rade, Bradley T. MacDonald, Barbara M. Henagan, Allan S. Kalish, Robert W.
Tauber and Christopher F. McConnell for directors at the Board of Directors
meeting on May 26, 1999. Each nominee is currently serving as a director of the
Company.
The Board of Directors recommends the election of the six nominees for
Director listed below. The Directors to be elected are to hold office until the
next Annual Meeting of Stockholders and until their respective successors are
elected and shall have qualified. If for any reason any of the nominees shall
become unavailable for election, proxies will be voted for a substitute nominee
designated by the Board; however, the Board has no reason to believe that this
will occur. Directors of the Company are elected by a plurality of the votes
cast at a meeting of stockholders.
INFORMATION ABOUT NOMINEES AND EXECUTIVE OFFICERS.
The following table contains certain information with respect to the
nominees for the Board of Directors and the executive officers of the Company.
<TABLE>
<CAPTION>
FIRST
BECAME A
NAME POSITION AGE DIRECTOR
- ---- -------- --- --------
<S> <C> <C> <C>
Christopher F. McConnell .......... Chairman of the Board, Director 46 1998
Stephen Rade ...................... President, Chief Executive Officer 62 1996
and Director
Bradley T. McDonald (1) ........... Director 52 1999
Barbara M. Henagan (1)(2) ......... Director 40 1999
Allan S. Kalish (2) ............... Director 74 1998
Robert W. Tauber .................. Director 74 1996
Ronald E. Badke ................... Chief Financial Officer 53 N/A
</TABLE>
- ----------
(1) Member of the Audit Committee of the Board of Directors. The Audit
Committee recommends an outside auditor for the year and reviews the
financial statements and progress of the Company.
(2) Member of the Compensation and Stock Option Committee. The Compensation
and Stock Option Committee meets on an as-needed basis between meetings
of the Board of Directors to discuss matters related to compensation and
Company stock option grants.
Mr. McConnell is the current Chairman of the Board. In 1984, Mr. McConnell
founded CFM Technologies, Inc. and served as its President and Chief Executive
Officer until 1990 when he was named its Chairman of the Board. Prior to
founding CFM Technologies, Inc., Mr. McConnell held various positions with Dow
Chemical. He has a MBA from Harvard Business School.
3
<PAGE>
Mr. Rade has been President and CEO since June 1998. Prior to being named
President, he was Vice President since April 1996 and Executive Vice President
since September 1996. Prior to such time, he was the President and director of
Advanced Fox Antenna, Inc., which Mr. Rade founded in 1990 and which was
acquired by the Company in April 1996.
Mr. MacDonald is the Chairman of the Board and Chief Executive Officer of
HealthRite, a position he has held since January, 1998. Prior thereto, he was
appointed as Program Director of the U.S. Olympic Coin Program of the Atlanta
Centennial Olympic Games. Mr. MacDonald was employed previously by HealthRite as
its Chief Executive Officer from September, 1996 to August, 1997. From 1991
through 1994, Mr. McDonald was Deputy Director and Chief Financial Officer of
the Retail, Food and Hospitality and Recreation Business for the United States
Marine Corps.
Ms. Henagan is or has been the Chairman of the Board or member of the board
of numerous public and private companies including Travis International,
Futronix Corporation, US Precision Glass, Paramount Cards, HWC Distribution
Corp, the former Central Sprinkler Corporation, Hampton Industries, V-Span Inc.
and General Bearing Corporation. Additionally, since 1986, Ms. Henagan has been
a partner in Bradford Ventures, Ltd., a private investment firm and currently
holds the position of Senior Managing Director. Bradford Ventures, Ltd. Provides
equity growth capital to middle market manufacturing and distributing companies.
Mr. Kalish is the owner of Kalish & Associates, a consulting firm
specializing in marketing, advertising and public relations, which he founded in
1986. Kalish & Associates serves advertisers, marketers and advertising agencies
throughout the country, including three New York Stock Exchange companies. Prior
to founding Kalish & Associates, Mr. Kalish managed Kalish & Rice, Inc., one of
the largest advertising agencies in Philadelphia. Mr. Kalish served as a member
of the Board of Directors of Checkpoint Systems, Inc., a New York Stock Exchange
company, from 1993 to 1997.
Mr. Tauber had been a consultant to the Company from February 1997 through
April 1998. From April 1996 until February 1997 he was a Vice President of the
Company. Prior to that time, he was President and a director of Tauber
Electronics, Inc. which was founded in 1975 and was acquired by the Company in
April 1996.
Mr. Badke has been the Chief Financial Officer of the Company since
November 1995. Previously, Mr. Badke was the Chief Financial Officer for Natures
Elements, Inc and was a Senior Vice President of Shoe-Town, Inc.
BOARD AND COMMITTEE MEETINGS
During the year ended December 31, 1998, the Board of Directors held 9
meetings, including those in which matters were adopted by unanimous written
consent. The Board has an Audit Committee and a Compensation and Stock Option
Committee.
The Audit Committee of the Board of Directors presently consists of Mr.
MacDonald and Ms. Henagan. During 1998, the Audit Committee was composed of Mr.
Meehan, a former director. It held two meetings during 1998. The duties and
responsibilities of the Audit Committee include, among other things, review of
the Company's financial statements, consideration of the nature and scope of the
work to be performed by the Company's independent auditors, discussion of the
results of such work, the receipt from such auditors of their letters to
management which evaluate (as part of their annual audit of the Company's
financial statements) the internal accounting control systems of the Company and
meeting with representatives of management to discuss particular areas of the
Company's operations.
Mr. Kalish and Ms. Henagan are the present members of the Compensation and
Stock Option Committee. Mr. Kalish took office during 1998 and Ms. Henagan was
appointed in 1999. Its principal duties are the administration of the Company's
Stock Option Plan (the "Option Plan") and the review and determination of the
executive officers' compensation program. The Committee held two meetings during
1998.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for the years ended December 31, 1998, 1997
and 1996, the compensation for services rendered in all capacities to the
Company and subsidiaries by the Chief Executive Officer and the four highest
paid executive officers who received compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
POSITION YEAR SALARY($) BONUS($) OTHER ANNUAL COMPENSATION ($)
- -------------------------------- ------ ---------------- ---------------- ------------------------------
<S> <C> <C> <C> <C>
Stephen Rade, 1998 150,000 200,000(1) -0-
President 1997 150,000 200,000(1) -0-
and Director .................. 1996 190,057 157,825(1) -0-
Ronald E. Badke, 1998 135,000 -0-
Chief Financial 1997 135,000 -0-
Officer ....................... 1996 114,515 15,000 -0-
Warren H. Haber,
Former Chairman
of the Board 1998 (2) (2) (2)
and Chief 1997 (2) (2) (2)
Executive Officer ............. 1996 (2) (2) (2)
Robert W. Tauber, 1998 36,923 -0- -0-
Vice President 1997 128,269 -0- -0-
and Director .................. 1996 177,865 -0- -0-
William S. Sapp 1998 92,972 -0- -0-
President, 1997 103,953(3) -0- -0-
Battery Network, Inc. ......... 1996 -0- -0- -0-
</TABLE>
- ----------
(1) Bonus paid pursuant to an agreement relating to the acquisition of
Advanced Fox.
(2) For years 1998, 1997, and 1996 the services of Mr. Haber were provided
pursuant to the Company's agreement with Founders Management Services,
Inc. The agreement provided that Founders Management Services, Inc. would
be paid $150,000 per year for consulting services rendered by Mr. Haber.
(3) Mr. Sapp was the President of Battery Network, Inc., a principal
subsidiary of the Company.
EMPLOYMENT AGREEMENTS
In April 1996, the Company entered into employment agreements with each of
Messrs. Rade and Tauber. The agreements provide for Mr. Rade to receive a salary
of $150,000 per annum during the three-year term and for Mr. Tauber to receive a
salary of $150,000 during the first year and $120,000 during the second year.
Mr. Tauber's agreement terminated on April 11, 1998. Mr. Rade's agreement
obligates the Company to continue his compensation for the term of the agreement
in the event of a termination of the officer's employment by the Company without
cause. Messrs. Tauber and Rade have agreed not to compete with the Company or
solicit any employees of the Company for a period of five years, subject to a
shorter period should the Company breach the agreement. Applicable law may
reduce the time period of the covenant not to compete. Mr. Rade, following his
election as President and Chief Executive Officer, has continued to work under
his existing contract.
5
<PAGE>
Mr. Ronald E. Badke is being compensated pursuant to his employment
agreement, which expired on March 31, 1999 at an annual salary of $135,000 with
provision for an annual bonus of up to 25% of the base salary subject to the
achievement of certain goals.
DIRECTORS
The Company does not pay a fee to its directors. It reimburses those
directors who are not employees of the Company for their expenses incurred in
attending meetings.
STOCK OPTIONS
The Company's Stock Option Plan (the "Plan") relates to 600,000 shares of
its Common Stock and authorizes the Board of Directors or a Stock Option
Committee appointed by the Board to grant incentive stock options and
non-incentive stock options to officers, key employees, directors, and
independent consultants, with directors who are not employees and consultants
eligible only to receive non-incentive stock options.
The following table sets forth the details about the options granted
during 1998 to the executive officers named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
PERCENT OF APPRECIATION
NUMBER OF SHARES TOTAL OPTIONS EXERCISE FOR OPTION TERM
UNDERLYING OPTIONS GRANTED IN PRICE PER EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
- ----------------------- -------------------- --------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stephen Rade .......... 25,000 5.5% $1 3/8 07/31/03 $9,497 $20,986
Robert Tauber ......... 5,000 1.1% $1 7/8 09/25/03 $2,575 $ 5,723
</TABLE>
The following table sets forth the number of shares which underlie
unexercised options held at December 31, 1998, by the executive officers named
in the Summary Compensation Table. None of those persons exercised options
during 1998.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING
UNEXERCISED OPTIONS AT
FISCAL YEAR END (1)
------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------------- ------------- --------------
<S> <C> <C>
Stephen Rade ............ 12,500 12,500
Ronald E. Badke ......... 56,668 8,332
Robert Tauber ........... 51,667 3,333
William S. Sapp ......... 16,905 -0-
</TABLE>
- ----------
(1) None of the outstanding options held by the named individuals were
in-the-money on December 31, 1998.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation of all of the Company's executive officers has been
determined by long term agreements negotiated prior to their employment. The
Compensation and Stock Options Committee (the "Committee") is authorized to
review and make recommendation to the Board as to the compensation in cash or
other forms for its executive officers. Its compensation policy will be to
provide for base salaries which are comparable to the compensation paid to
executive officers of equivalent competency and
6
<PAGE>
responsibilities by companies of comparable size and capitalization both in and
out of the battery and cellular distribution industry. The Committee also
intends to provide for the payment of cash bonuses or grants of stock options
to executive officers as awards based on the attainment of favorable operating
results by the Company.
The Committee believes that the Company's stock option program, as it has
been in the past, should be used as a means to conserve cash in rewarding
executive and key employees for good or exceptional performance, the performance
of increased responsibilities, improved performance independent of operating
results, loyalty and seniority.
In the year ending December 31, 1998, the Committee did not make any
recommendations to the Board with regard to the compensation of the Chief
Executive Officer since all compensation received by the Chief Executive Officer
is currently set forth in an Employment Agreement entered into by the Chief
Executive Officer in 1996 (See "Employment Agreements" on Page 6).
The Compensation and Stock Option Committee currently has two members, Mr.
Allan S. Kalish and Ms. Barbara M. Henagan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership as of October 1, 1999 of shares of Common Stock of (a) each executive
officer, (b) each director, and (c) each stockholder of the Company known to own
beneficially more than 5% of the outstanding shares of Common Stock, as well as
all executive officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED PERCENTAGE
-------------------- -----------
<S> <C> <C>
Stephen Rade ..................... 820,000(2) 15.5%
3915 Sommers Drive
Huntingdon Valley, PA 19006
Robert W. Tauber ................. 243,333(1) 4.7%
2192 Harbour Heights Road
San Diego, CA 92109
Barbara M. Henagan ............... 233,165 4.5%
35 Valley Road
Atlanta, GA 30305
Christopher F. McConnell ......... 156,067 3.0%
1262 Farm Road
Berwyn, PA 19312
Ronald E. Badke .................. 65,000(3) 1.2%
50 Tannery Road
North Branch, NJ 08876
Allan Kalish ..................... 22,500(4) **
828 Youngsford Road
Gladwyn, PA 19035
Bradley T. MacDonald ............. 0 0
11445 Cronhill Drive
Owings Mills, MD 21117
Directors & officers as a group
(7 in total) ................... 1,540,065(5) 29.1%
</TABLE>
- ----------
(1) Includes 53,333 shares issuable upon exercise of options which are
exercisable within 60 days.
(2) Includes 25,000 shares issuable upon exercise of options which are
exercisable within 60 days.
(3) Represents 65,000 shares issuable upon exercise of options which are
exercisable within 60 days.
(4) Includes 20,000 shares issuable upon exercise of options which are
exercisable within 60 days.
(5) Includes 163,333 shares issuable upon exercise of options which are
exercisable within 60 days.
** Denotes less than 1%.
7
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. The rules of the SEC regarding the filing of such statements require that
"late filings" of such statement be disclosed in this Information Statement.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that, during the fiscal year ended December 31,
1998, its officers, directors, and greater than ten-percent beneficial owners
complied with applicable Section 16(a) filing requirements, except that: (i) Mr.
McConnell and Ms. Henagan each inadvertently failed to file a Form 3 when they
became directors of the Company; and (ii) Mr. Rade inadvertently failed to file
a Form 4 or Form 5 to report his purchase of 27,500 shares of common stock of
the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In consideration for the acquisition of Tauber and Advanced Fox, the
Company in April 1996 issued to Mr. Robert W. Tauber 300,000 shares of Common
Stock and a five year option to purchase an additional 50,000 shares at $5.00
per share and issued to Mr. Stephen Rade 660,000 shares of Common Stock; and
paid cash of $3,289,000 to an affiliate of Mr. Tauber, and $2,175,000 to Mr.
Rade. Mr. Rade also has a contingent right to receive additional cash
consideration of up to $600,000, but not more than $200,000 per year, depending
on the achievement of designated levels of pre-tax earnings by the Advanced Fox
subsidiary over the three year period ending December 31, 1998. Mr. Rade earned
$200,000, $200,000 and $157,758 based on the earnings of Advanced Fox for the
years ended December 31, 1998, December 31, 1997 and December 31, 1996,
respectively.
The principal offices of Advanced Fox, which comprise approximately 7000
square feet in Huntingdon Valley, Pennsylvania, are occupied under a five-year
lease terminating December 31, 1999 with Rare Limited Partnership, of which Mr.
Rade and his wife are the partners. The lease, as amended with respect to
additions to the facility, provides for an annual rent of $70,000 with the
tenant obligated to pay the applicable real estate taxes, and maintenance and
insurance costs. Rental payments for the twelve months ended December 31, 1998,
December 31, 1997 and December 31, 1996 were $76,000, $76,000 and $70,800,
respectively.
PRIOR MANAGEMENT
Messrs. Warren H. Haber, the then Chairman of the Board and John L. Teeger,
the former Vice President, Secretary and Director of the Company were the sole
stockholders, officers and directors of Founders Management Services Inc.
("Founders"). Pursuant to an agreement dated as of June 6, 1995, as subsequently
amended, Founders was to provide advice and consultative services regarding
management, overall strategic planning, acquisition policy, relations with
commercial and investment banking institutions, and stockholders matters to or
on behalf of the Company. The agreement was for a term expiring in April 1999,
subject to five one-year renewal options and provided for Founders to receive a
base fee of $150,000 per annum. Founders was also to receive an additional fee
of 5% of the Company's annual pre-tax income in excess of $1,250,000. Under the
agreement, Founders was entitled to receive originating fees with respect to
acquisitions or financings for which it performed originating services -- the
fee to be that customarily charged by non-affiliated investment bankers or
professional originators for transactions of similar size and nature. To
determine the fees customarily charged, the Company was to review then current
proxy statements and investment publications and consult with nonaffiliated
investment bankers for the computation of originating fees in similar
transactions as those in which the Founders' originating services have been
employed. The amount of the fee was to be subject to the approval of a majority
of the Directors not affiliated with Founders. Founders received for its
origination and consultation services in connection with the combination with
Advanced Fox and Tauber a fee of $150,000; and in connection with the Battery
Network acquisition and related financing of $13,000,000, a fee of $240,000 and
five year
8
<PAGE>
warrants to purchase 100,000 shares of Common Stock at a price of $4.125 per
share issued to the extent of 50,000 shares each to Messrs. Haber and Teeger as
designees of Founders.
In February 1998 the Management Agreement was revised by mutual consent to
eliminate the origination and incentive fee provisions of the original
agreement, and to establish April 30, 1999 as the expiration date for the
Agreement. The revised agreement thereby limits fees paid to Founders to an
annual fee of $150,000, payable in equal monthly installments.
Since June, 1998, when Messrs. Haber and Teeger resigned as officers and
directors of the Company, Founders has provided no services to the Company and
the Company has not paid any fees to Founders. Although neither the Company nor
Founders has formally terminated the Management Agreement, both parties have
acted as if the Management Agreement has been terminated. Messrs Haber and
Teeger have filed a legal action in May, 1999 for premature termination of the
Management Agreement. Aside from the filing of the complaint, there has been no
further prosecution of the action.
PERFORMANCE GRAPH
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
COMPARATIVE ANNUAL TOTAL RETURN
BATTERIES BATTERIES, INC., RUSSELL 2000 INDEX AND PEER GROUP
(Performance Results Through 12/31/98)
4/9/96 12/31/97 12/31/98
------ -------- --------
BATTERIES BATTERIES, INC. $100.00 $ 64.14 $ 28.73
RUSSELL 2000 INDEX $100.00 $105.17 $126.93
PEER GROUP $100.00 $ 81.08 $ 67.01
Assumes $100 invested at the open of trading (4/9/96) in Batteries Batteries,
Inc. Common Stock, Russell 2000 Index and Peer Group which consists of: U.S
Office Products Company; Richy Electronics Inc., Omnipoint Corp; Kent
Electronics Corp; and Brightpoint Inc.
* Cumulative total return assumes reinvestment of dividends
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
9
<PAGE>
PROPOSAL 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
GENERAL
The Board of Directors has appointed Arthur Andersen LLP, Certified Public
Accountants, as the Company's independent public accountants for the year ending
December 31, 1999, and has directed that the selection of such auditors be
submitted for ratification by the shareholders at the Annual Meeting.
ANNUAL MEETING
In the event that the shareholders do not ratify the selection of Arthur
Andersen LLP as the Company's independent public accountants to perform audit
services for the 1999 fiscal year or if Arthur Andersen LLP declines to accept
the engagement, another accounting firm may be chosen to provide audit services
for the 1999 fiscal year.
Representatives of Arthur Andersen LLP, are expected to attend the Annual
Meeting, will be afforded an opportunity to make a statement if they desire to
do so and will be available to respond to questions from shareholders.
The firm of Deloitte & Touche LLP served as the Company's independent
public accountants and performed audit services for the Company's 1998 fiscal
year. Deloitte & Touche LLP was dismissed on October 25, 1999 as the Company's
independent public accountants. The dismissal of Deloitte & Touche LLP was
recommended to the Board of Directors by the Company's Audit Committee.
Deloitte & Touche LLP's accounting reports for the Company's last two fiscal
years did not contain: (i) any adverse opinion; (ii) any disclaimer of opinion;
(iii) any qualification or modification as to the uncertainty, audit scope or
accounting principle. During the Company's last two fiscal years, there were no
disagreements with Deloitte & Touche LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure
which if not resolved to Deloitte & Touche LLP's satisfaction would have caused
them to make reference to the subject matter of the disagreement in connection
with the Company's financial reports.
Representatives of Deloitte & Touche, LLP, are not expected to attend the
Annual Meeting; however, if a representative does attend the Annual Meeting they
will be afforded an opportunity to make a statement if they desire to do so and
will be available to respond to questions from shareholders.
ANNUAL REPORT
The Annual Report of the Company on Form 10K, as amended on Form 10K/A,
including financial statements, for the year ending December 31, 1998 is being
mailed to stockholders with this proxy material.
OTHER MATTERS
The Company is unaware of any matters, other than those mentioned above,
which will be brought before the Annual Meeting for action. However, if any
other matters properly come before the Annual Meeting, it is the intention of
the persons named in the accompanying form of proxy to vote such proxy in
accordance with their judgment on such matters.
Any proposals intended to be presented by stockholders at the Annual
Meeting of Stockholders to be held in 2000 must be received at the Company's
office no later than July 20, 2000 to be included in the proxy.
It is important that your proxy be returned promptly no matter how small or
large your holding may be. Stockholders who do not expect to attend in person
are urged to execute and return the enclosed form of proxy.
October 25, 1999
10
<PAGE>
BATTERIES BATTERIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints BARBARA M. HENAGAN and ALLAN S. KALISH and
either of them, with full power of substitution, as attorneys for and in the
name, place and stead of the undersigned, to vote all the shares of the Common
Stock of BATTERIES BATTERIES, INC. owned or entitled to be voted by the
undersigned as of the record date, at the Annual Meeting of Stockholders of
said Company scheduled to be held at 1840 County Line Road, Huntington Valley,
Pennsylvania, on November 17, 1999 at 10:00 A.M., Eastern Time, or at any
adjournment or adjournments of said meeting, on the following proposals as
indicated:
1. THE ELECTION OF SIX DIRECTORS OF THE COMPANY, EACH OF WHOM IS TO HOLD
OFFICE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THE DUE
ELECTION AND QUALIFICATION OF HIS OR HER SUCCESSOR.
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(EXCEPT AS MARKED TO THE CONTRARY) TO VOTE FOR ALL NOMINEES LISTED BELOW
NOMINEES: Stephen Rade, Bradley T. MacDonald, Barbara M. Henagan, Allan
S. Kalish, Robert W. Tauber, and Christopher F. McConnell.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, STRIKE A
LINE THROUGH THE NOMINEE'S NAME ABOVE)
- --------------------------------------------------------------------------------
2. TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS THE AUDITORS FOR FISCAL
YEAR 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(PLEASE SIGN ON REVERSE SIDE)
(Over)
<PAGE>
THIS PROXY IF PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN ACCORDANCE WITH
THE DIRECTIONS SPECIFIED ON THE REVERSE SIDE HEREOF. IF NO DIRECTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS NAMED ON
THE REVERSE SIDE HEREOF OR THEIR SUBSTITUTES AS DESIGNATED BY THE BOARD OF
DIRECTORS AND FOR THE RATIFICATION OF ARTHUR ANDERSEN, LLP AS THE COMPANY'S
AUDITORS.
DATED: , 1999
---------------------------------
(SIGNATURE)
---------------------------------
(SIGNATURE IF HELD JOINTLY)
Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. The
undersigned hereby revokes all
proxies heretofore given by the
undersigned to vote at said
meeting or any adjournments
thereof.
PLEASE SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS NECESSARY IF MAILED
IN THE UNITED STATES.
