<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JULY 31, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM______________ TO ___________________
COMMISSION FILE NUMBER 0-10964
MAXWELL TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-2390133
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9275 SKY PARK COURT
SAN DIEGO, CALIFORNIA 92123
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858) 279-5100
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: COMMON
STOCK, PAR VALUE $.10 PER SHARE
NAME OF EACH EXCHANGE ON WHICH REGISTERED: NASDAQ NATIONAL MARKET ("NASDAQ")
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
===============================================================================
<PAGE>
The Registrant amends its Annual Report on Form 10-K for the fiscal year ended
July 31, 1999 by the addition of the following material.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Board of Directors of the Company is divided into three classes,
with the terms of office of each class ending in successive years. The term of
the director currently serving in Class I expires with the 1999 Annual Meeting
of Shareholders scheduled for January 28, 2000. The directors in Class II and
Class III will continue in office until their terms expire at the 2000 and 2001
Annual Meeting of Shareholders, respectively. The members of the Board of
Directors of the Company are set forth below.
<TABLE>
<CAPTION>
PERIOD SERVED AS A DIRECTOR,
POSITIONS AND OTHER RELATIONSHIPS
WITH THE COMPANY, AND BUSINESS
NAME AND AGE EXPERIENCE
- ------------------------ -----------------------------------------
<S> <C>
Kenneth F. Potashner, 42 Mr. Potashner has served as a director
(Class I) since April, 1996 and as Chairman
since April, 1997. From the time he
joined the Company in April, 1996 until
November, 1998, he served Maxwell as
President, Chief Executive Officer and
Chief Operating Officer. In November,
1998, Mr. Potashner was named chief
executive officer of S3 Incorporated,
a manufacturer of embedded graphics
accelerator chips. From 1991 through
1994, he was Vice President, Product
Engineering, for Quantum Corporation.
From 1994 to April of 1996, he served
as Executive Vice President, Operations,
of Conner Peripherals.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PERIOD SERVED AS A DIRECTOR,
POSITIONS AND OTHER RELATIONSHIPS
WITH THE COMPANY, AND BUSINESS
NAME AND AGE EXPERIENCE
- ------------------------ -----------------------------------------
<S> <C>
Mark Rossi, 43 Mr. Rossi was appointed a director of the
(Class II) Company in November, 1997 and elected to a
full term at the Company's Annual Shareholder's
Meeting in January, 1998. Mr. Rossi is a Senior
Managing Director of Cornerstone Equity
Investors, L.L.C., a New York-based private
equity firm with assets under management in
excess of $1 billion. Prior to the formation of
Cornerstone Equity Investors in 1996, Mr. Rossi
was President of Prudential Equity Investors,
Inc. Mr. Rossi's industry focus is on technology-
related and telecommunications companies. He is a
member of the Board of Directors of True
Temper, Inc. and MCMS, Inc. as well as several
privately-held companies.
Jean Lavigne, 61 Mr. Lavigne was appointed a director of the
(Class II) Company in August, 1999. Mr. Lavigne is Vice
President and Country President in France for
Motorola, Inc., and he is President and Chief
Executive Officer of Motorola, S.A. Prior to
joining Motorola, Mr. Lavigne was with Digital
Equipment Corporation ("DEC") in Europe where
he was responsible for Interconnect Technology
and served as a member of DEC's European
Government Affairs Team.
Karl M. Samuelian, 67 Mr. Samuelian has been a director of the
(Class III) Company since 1967 and served as Secretary
from that time until June, 1996. From 1978 to
June, 1980, he also held the office of Chairman
of the Board of the Company. For more than five
years, Mr. Samuelian has been a shareholder in
the law firm of Parker, Milliken, Clark, O'Hara &
Samuelian, A Professional Corporation, and a
partner in the predecessor law partnership.
Carlton J. Eibl, 39 Mr. Eibl was appointed a director in July, 1998
(Class III) and named Chief Executive Officer and President
of the Company in November, 1999. From February
1999 until he formally joins the Company on
December 1, 1999, Mr. Eibl served as President and
Chief Operating Officer of Stratagene Corporation,
a privately-held biotechnology company. Prior
thereto, Mr. Eibl held various executive positions
with Mycogen Corporation, a diversified agribusiness
and biotechnology company. Mr. Eibl joined Mycogen
in 1993 as Executive Vice President and General
Counsel. In 1995, he took on additional responsibility
for finance. Later that year was appointed president
and Chief Operating Officer and in 1997 he became
Chief Executive Officer.
</TABLE>
(See also Item 4.1 - "Executive Officers of the Registrant," Part I, SUPRA)
ITEM 11. EXECUTIVE COMPENSATION
3
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COMPENSATION OF DIRECTORS
Each director of the Company (other than Mr. Potashner and Mr. Eibl
who receive no compensation other than that received as officers of the
Company) receives compensation of $6,250 per quarter and $1,000 per Board and
Committee meeting attended ($500 per Board or Committee telephonic meeting in
which such director participates).
The Board has adopted, and is submitting for shareholder approval at
the next annual shareholder meeting, the Maxwell Technologies, Inc. 1999
Director Stock Option Plan (the "Director Option Plan") which authorizes the
granting of ten-year options to purchase an aggregate of 100,000 shares of
the Company's Common Stock to non-employee directors of the Company during
the ten-year term of the Director Option Plan which expires in 2009. This
plan succeeds a similar director stock option plan that expired in 1999.
Under the Director Option Plan, each eligible director automatically receives
options to purchase 10,000 shares of Company Common Stock on the first
business day following such director's initial Annual Shareholders' Meeting
of the Company, and options to purchase 3,000 shares following subsequent
Annual Shareholders' Meetings. The option price per share is the fair market
value based on the public trading price of such shares on the date of grant.
Options granted to directors vest in full on the first anniversary of the
date of grant.
The Company maintains the Maxwell Technologies, Inc. 1994 Director
Stock Purchase Plan (the "Director Purchase Plan"), under which directors,
other than those who are full-time employees of the Company, have the
opportunity to purchase directly from the Company shares of Common Stock at
100% of the public trading price of the shares. An aggregate of 100,000
shares have been authorized for purchase by directors under the plan. The
Director Purchase Plan authorizes purchases by eligible directors from and
after January 1, 1995, the effective date of the plan, until the earlier of
ten years thereafter or the issuance of all shares authorized for purchase.
As of July 31, 1999, 47,826 shares remain available for purchase under the
Director Purchase Plan.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information
concerning the compensation earned by the two individuals who served as the
Company's Chief Executive Officer during fiscal 1999 and its four other most
highly compensated executive officers (the "Named Executive Officers") whose
total salary and bonus for fiscal 1999 exceeded $100,000, for services
rendered to the Company and its subsidiaries in all capacities during that
fiscal year.
4
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION (1) STOCK OPTION
---------------------------- RESTRICTED GRANTS (4) ALL OTHER
NAME AND POSITION YEAR SALARY BONUS OTHER(2) STOCK AWARDS(3) (NO. OF SHARES) COMPENSATION (5)
----------------- ---- ------ ----- -------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth F. Potashner (6) 1999 $339,062 $181,875 $5,142 $ -0- -0- $ 50,000
Chief Executive Officer, 1998 469,877 495,009 4,038 -0- 200,000 170,000
Chairman of the Board, 1997 400,004 400,000 2,850 190,000 50,000 361,031
Director
Thomas L. Horgan (6) 1999 260,841 156,416 6,600 -0- 227,890 -0-
Chief Executive Officer, 1998 192,123 86,051 3,000 -0- 2,000 50,000
President, Director 1997 180,083 81,630 -0- -0- 9,000 19,254
Gregg L. McKee 1999 207,795 85,664 4,486 -0- 24,000 -0-
Vice President 1998 197,242 108,724 8,286 -0- 2,000 35,439
1997 167,990 82,617 -0- -0- 10,000 49,863
John D. Werderman 1999 185,782 94,610 4,625 -0- 24,000 50,000
Vice President 1998 170,160 68,065 5,495 -0- 12,000 17,598
1997 121,162 38,166 -0- -0- 59,000 37,475
Walter P. Robertson 1999 177,085 94,475 3,217 -0- 24,000 -0-
Vice President 1998 175,349 83,400 7,153 -0- 2,000 -0-
1997 165,713 69,228 -0- -0- 69,000 -0-
Ted Toch (7) 1999 182,211 101,628 430 -0- 24,000 10,286
Vice President 1998 10,096 8,413 -0- -0- 80,000 -0-
</TABLE>
- --------
(1) Amounts shown include cash compensation earned and received by
executive officers as well as amounts earned but deferred at the
election of those officers under the Company's Savings Plan and
Deferred Compensation Plan.
(2) Amounts in this column consist of matching contributions made by the
Company under its Savings Plan. They do not include the dollar value of
certain perquisites and other personal benefits, securities or property
the recipient received as personal benefits. Although such amounts
cannot be determined precisely, the Company has concluded that the
aggregate amount thereof does not exceed as to any of the named
individuals the lesser of $50,000 and 10% of the total salary and bonus
paid to such individual for fiscal 1999.
(3) Mr. Potashner was awarded 10,000 shares of restricted stock in fiscal
1997, which restricted shares vest 25% one year after grant and each
month thereafter an additional 1/48 of the total number of shares
granted become vested. Mr. Potashner has full voting power and dividend
rights with respect to all of the restricted stock. At July 31, 1999,
Mr. Potashner held a total of 98,437 shares of such restricted stock
having a value based on the closing price of the Company's Common Stock
on that date of $2,559,362.
(4) Options shown in this column are options to purchase shares of Common
Stock of Maxwell Technologies, Inc. granted under the Company's 1995
Stock Option Plan. Several individuals in the table also received
options in fiscal 1997 to purchase common stock in the Company's
operating subsidiaries as follows: Mr. Potashner - 100,000 shares in
each of Maxwell Energy Products, Inc. ("Energy Products"), I-Bus, Inc.
("I-Bus"), Maxwell Technologies Systems Division, Inc. ("Systems") and
Maxwell Information Systems, Inc. ("Information Systems"); Mr. Horgan -
33,750 shares in Pure Pulse Technologies, Inc. ("PurePulse") and 37,500
shares in each of Energy Products, I-Bus, Systems and Information
Systems; Mr. McKee - 125,000 shares in Energy Products, 22,500 shares
in PurePulse and 25,000 shares in each of I-Bus, Systems and
Information Systems; Mr.
5
<PAGE>
Werderman - 25,000 shares in Energy Products, 100,000 shares in I-Bus,
25,000 shares in Information Systems, 22,500 shares in PurePulse and
50,000 shares in Systems; Mr. Robertson - 100,000 shares in Systems,
22,500 shares in PurePulse and 25,000 shares in each of Energy Products,
I-Bus and Information Systems. In fiscal 1998 Mr. Toch was granted
options to purchase 100,000 shares of common stock in PurePulse. Mr.
Potashner received options in fiscal 1996 to purchase 150,000 shares of
PurePulse common stock.
(5) For Mr. Potashner, represents amounts paid or accrued in fiscal 1997
for relocation expenses including certain carrying and sale-related
costs for his former residence, and related tax offset payments; and in
fiscal 1998 and fiscal 1999 for certain non-qualified retirement
benefits. For Mr. Horgan, the fiscal 1998 amount is a loan from the
Company made at point of hire, which was forgivable two years
after Mr. Horgan's fiscal 1996 hire date. For Mr. Werderman, the fiscal
1999 amount is a loan from the Company made at point of hire,
which was forgivable two years after Mr. Werderman's fiscal 1997 hire
date. For Mr. Horgan for fiscal 1996, Mr. McKee for fiscal years 1998
and 1999, Mr. Werderman for fiscal years 1998 and 1997 and Mr. Toch for
fiscal year 1999, the amounts are reimbursements of relocation expenses
(including reimbursement of brokerage commissions on the sale of a
residence). During fiscal 1999 Mr. Werderman received a loan of $50,000
from the Company which is forgivable if Mr. Werderman remains employed
with the Company through August 31, 2000.
(6) In November, 1998, Mr. Potashner stepped down from his positions of
Chief Executive Officer, President and Chief Operating Officer and
continues as Chairman, with an on-going executive role with the
Company. In April, 1999, Mr. Horgan was appointed Chief Executive
Officer, President and Chief Operating Officer. Mr. Horgan resigned
from these positions in November, 1999.
(7) Mr. Toch was hired as an executive officer in fiscal year 1998.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows information on grants of options to
purchase stock of the Company pursuant to the 1995 Stock Option Plan to those
Named Executive Officers who received options during fiscal 1999. Pursuant to
Securities and Exchange Commission rules, the table also shows the value of
the options at the end of the ten year option terms if the stock price were
to appreciate annually by 5% and 10%, respectively. These assumed values may
not reflect actual value at the times indicated.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
PERCENTAGE OF STOCK PRICE
TOTAL OPTIONS APPRECIATION FOR
GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED (1) FY 1999 (2) (PER SHARE) DATE 5% 10%
- ---------------- ----------- ------------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Horgan 227,890 34.16% 25.00 05/21/2009 $2,654,948 $7,602,229
Gregg L. McKee 24,000 3.60% 22.50 05/21/2009 339,603 860,621
John D. Werderman 24,000 3.60% 22.50 05/21/2009 339,603 860,621
Walter P. Robertson 24,000 3.60% 22.50 05/21/2009 339,603 860,621
Ted Toch 24,000 3.60% 22.50 05/21/2009 339,603 860,621
</TABLE>
- ----------
(1) These options are either incentive stock options or non-qualified stock
options and were granted at a purchase price no less than the fair
market value of the underlying Company Common Stock based on the
closing trading price of such stock on the date of grant. The options
have a term of ten years. The increments in which the options are
exercisable are determined by the committee that administers the plan.
(2) Total options include options covering 24,000 shares of Company Common
Stock granted in fiscal 1999 to directors of the Company under the
Director Stock Option Plan.
7
<PAGE>
FISCAL YEAR END OPTION VALUES
Shown below is information on each Named Executive Officer with
respect to (i) the value of stock options exercised by such person in fiscal
1999, measured in terms of the closing price of the Company's Common Stock on
the date of exercise, and (ii) the value of unexercised options to purchase
the Company's Common Stock held by such person granted in fiscal 1999 and
prior years under the Company's 1995 or 1985 Stock Option Plans, measured in
terms of the closing price of the Company's Common Stock on July 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
ACQUIRED JULY 31, 1999 (1) JULY 31, 1999 (1)
ON EXERCISE VALUE ---------------------------- ----------------------------
NAME (NO. OF SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- --------------- ---------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth F. Potashner 97,923 $2,342,790 58,495 194,662 $580,942 $932,951
Thomas L. Horgan -0- -0- 56,243 230,647 805,418 489,222
Gregg L. McKee 21,276 386,195 15,324 41,400 202,650 335,175
John D. Werderman 14,000 396,500 10,000 56,000 62,925 437,325
Walter P. Robertson 14,400 306,628 13,572 49,028 164,043 506,419
Ted Toch -0- -0- 24,000 80,000 70,488 248,472
</TABLE>
- ----------
(1) Does not include options held by the Named Executive Officers to
purchase shares of common stock in five of the Company's operating
subsidiaries under the stock option plans of such subsidiaries. All
options held by these individuals under such subsidiary stock option
plans were granted in fiscal 1997, except for options to purchase
150,000 shares of common stock of the Company's PurePulse Technologies,
Inc. subsidiary granted to Mr. Potashner in fiscal 1996, and 100,000
shares of common of the Company's PurePulse Technologies, Inc.
subsidiary granted to Mr. Toch in fiscal 1998, and are described in
footnote (4) to the Summary Compensation Table. With the exception of
Mr. Potashner's and Mr. Toch's PurePulse options, of which 90,000 and
25,000 shares, respectively, were exercisable, 50% of such subsidiary
options described in said footnote (4) were exercisable within 60 days
of July 31, 1999. No public market exists for the common stock of any
of the Company's subsidiaries. For purposes of the above table, no
value has been attributed to the subsidiary stock options.
8
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the five year cumulative
total return to shareholders on the Company's Common Stock with the five year
cumulative total return on the NASDAQ and a peer group of comparable companies
identified therein.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG MAXWELL TECHNOLOGIES, INC., NASDAQ, AND INDUSTRY PEER GROUP
YEARS ENDING JULY 31, 1994-1999
[PERFORMANCE GRAPH]
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE ON EXECUTIVE
COMPENSATION
As described in more detail below, the Company's executive compensation
consists of three principal components-base salary and annual incentive
compensation as determined by the Compensation Committee of the Board of
Directors and stock option awards as determined by the Stock Option Committee of
the Board of Directors. During fiscal 1999, the Compensation Committee also
acted as the Stock Option Committee.
The compensation policies of the Company are designed to set its
executive compensation, including salary and short-term and long-term incentive
programs, at a level consistent with amounts paid to executive officers of
companies of similar size and business orientation and consistent with
marketplace requirements to attract and retain management personnel with the
experience and background to drive the commercialization of the
9
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Company's technologies. In this regard, the compensation policies of the
Company are particularly designed to link executive officer bonus
compensation to the Company's performance in the short-term and to emphasize
compensation from equity, primarily employee stock options, for long-term
incentives.
The three principal components of the Company's executive compensation
are as follows:
(1) BASE SALARY. Base salary is intended to be set at a level consistent
with amounts paid to executive officers of companies of comparable size
and business areas and generally reflective of the performance of the
Company and the individual. Salaries for executive officers are
reviewed on an annual basis. Base salary (and annual incentive bonus
compensation) during fiscal 1999 for Mr. Potashner and Mr. Horgan, each
of whom was Chief Executive Officer for part of the year, were set
forth in their respective employment agreements discussed below. Mr.
Eibl's base salary and annual bonus incentive for the balance of the
current fiscal year after he formally joins the Company as President
and Chief Executive Officer on December 1, 1999 is set forth in his
employment agreement described below.
(2) ANNUAL INCENTIVE COMPENSATION. The Company fell slightly short of the
revenue and earnings per share target in fiscal 1999 for target bonus
payout to executive officers, and other than for the CEO, bonuses of
just under 50% of base compensation were paid. The determination of the
exact percentage was at the discretion of the CEO. Pursuant to their
respective employment contracts described below and based on the
percentage of the revenue and earnings targets achieved, for fiscal
1999, Mr. Potashner received a bonus of $181,875, or just under 100% of
his base compensation, prorated for the time he served in the Chief
Executive Officer capacity, and Mr. Horgan received $156,416, or just
under 100% of his base compensation, prorated for the time he served in
the Chief Executive Officer capacity. For fiscal 1999, the Compensation
Committee adopted a bonus plan for executive officers similar to that
in fiscal 1998, with a range of new revenue and earnings per share
performance targets established.
(3) LONG TERM INCENTIVE COMPENSATION/STOCK OPTIONS. The Company's long-term
incentive program consists of a stock option program pursuant to which
the Chief Executive Officer and other executive officers (as well as
other key employees) are periodically granted stock options at the then
fair market value of the Company's Common Stock. In addition, the
Company adopted a program in early fiscal 1997 for the one-time award
to executives of stock options in the Company's operating subsidiaries.
These option programs are designed to reward and retain executive
officers over the long-term and to link the value of the incentive to
increases in the value of the subsidiaries and in the Company's stock
price over time, benefiting shareholders as a whole.
Dated: November 29, 1999
COMPENSATION AND STOCK OPTION COMMITTEE
Carlton J. Eibl
Karl M. Samuelian
Mark Rossi
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the Compensation Committee consisted of Messrs.
Samuelian, Rossi and Eibl, and the current members of such committee are Messrs.
Samuelian and Rossi.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
MR. EIBL. In November 1999, the Company entered into an Employment
Agreement ("Agreement") with Carlton J. Eibl pursuant to which Mr. Eibl is to
become the President and Chief Executive Officer of the Company effective
December 1, 1999. The Agreement requires Mr. Eibl to perform duties associated
with the office of chief executive of the Company plus other duties or positions
as the Board of Directors may require. The Agreement provides for a base salary
of $425,000 per year, reviewed annually, with an annual bonus opportunity
targeted at 100% of base salary, to be determined by the Board of Directors.
Such bonus will be based on financial and non-financial performance targets set
by the Board of Directors. The Agreement provides for the grant of special,
non-qualified options to purchase 294,030 shares of the Company's common stock
at an exercise price of $8.75 per share, with four year vesting at the rate of
1/48 of the total number of shares per month commencing with December, 1999, as
long as Mr. Eibl is with the Company.
Under the Agreement, Mr. Eibl will become immediately vested in all
the options, and receive payments equal to twice his annual salary then in
effect, in the event a "change of control" occurs and either his compensation
or responsibilities are reduced or the Company's principal place of business
is moved outside of San Diego County. A "change of control" is defined as the
acquisition by a person or group of a majority of the Company's stock by
direct purchase or through merger, the liquidation or sale of substantially
all of the assets of the Company or a change in the majority of the members
of the Board of Directors other than through membership changes determined by
the Board itself. If Mr. Eibl is terminated without cause prior to the second
anniversary date of the Agreement, he will be paid two times his annual base
salary in effect on the date of termination and his stock options will
continue to vest until the second anniversary date of the Agreement. If the
termination occurs after the second anniversary date of the Agreement, he
will receive the average of the total annual compensation (annual base salary
plus bonuses earned) for the preceding two years. If Mr. Eibl voluntarily
resigns or is terminated for cause, he will be paid only such salary and
accrued vacation pay as is then due him.
MR. HORGAN. The Company entered into an Employment Agreement with
Mr. Horgan upon his appointment as President and Chief Executive Officer in
April, 1999. Mr. Horgan resigned from his positions with the Company in
November, 1999, and under the Employment Agreement, he will receive a total
of $700,000, representing an amount equal to twice his annual salary then in
effect. In addition, Mr. Horgan will continue to vest in a portion of the
stock options covering 227,890 shares granted to him pursuant to the
Employment Agreement. Such options vest at the rate of 1/48 of the total
shares each month commencing with April, 1999, and will continue to vest at
that rate through April, 2001, after which the vested options must be
exercised within 60 days or they will expire.
MR. POTASHNER. In March, 1996, the Company entered into an
Employment Contract ("Contract") with Kenneth F. Potashner pursuant to which
Mr. Potashner became the President and Chief Executive Officer of the Company
effective April 26, 1996. In November, 1998, Mr. Potashner stepped down from
his position as Chief Executive Officer and agreed with the Board to continue
as Chairman, as well as, for a period of time, in an active, although less
than full time, executive role with the Company. Mr. Potashner has received
an annual base salary of $250,000 for the period in which he has continued in
such executive role. Mr. Potashner currently holds a total of 98,437 shares
of restricted stock granted under the Contract and options under the
Company's 1995 Stock Option Plan for a total of 351,594 shares. Both the
restricted shares and the options are
11
<PAGE>
subject to four-year vesting schedules. Vesting will continue during the
period in which Mr. Potashner is active with the Company in an executive,
consulting or other role. In addition, Mr. Potashner is entitled to
non-qualified retirement benefits payable in installments following the
termination of his employment equal, in the aggregate, to 10% of the total of
his annual salary and target bonus each year under the Contract. A total of
$240,000 has been earned under this provision through the end of fiscal 1999.
Under the Contract, Mr. Potashner will be immediately fully vested in
the restricted shares and stock options in the event that a "change of control"
occurs and certain other conditions are met. A "change of control" is defined as
the acquisition by a person or group of a majority of the Company's stock by
direct purchase or through a merger, the liquidation or sale of substantially
all of the assets of the Company or a change in a majority of the members of the
Board of Directors other than through membership changes determined by the Board
itself.
OTHER PROGRAMS
In September, 1998, the Board adopted a policy involving the purchase
by the Company of shares of Company common stock from officers and directors.
Under the policy, such individuals may tender shares on selected days during the
Company's open trading windows, and if the Compensation Committee of the Board
determines that purchases of such shares are then in the best interest of the
Company, the Company will buy such shares at a price $.25 below the closing
trading price on that day. No individual may sell shares to the Company under
the policy in excess of 50% of his total share ownership at the time the policy
was adopted.
12
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by (i) each director and
nominee for director of the Company, (ii) the Chief Executive Officer and each
of the other four most highly compensated executive officers of the Company, and
(iii) all directors and executive officers of the Company as a group. The
Company knows of no person (or group of affiliated persons) who beneficially
owns more than five percent of the outstanding shares of Common Stock.
Information for the officers and directors is as of September 30, 1999. The
address for each individual is 9275 Sky Park Court, San Diego, CA 92123.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
OWNED (1)(2)(3)
NAME AND ADDRESS OF ---------------------
BENEFICIAL OWNER NUMBER PERCENT
- ------------------------------------------ ------ --------
<S> <C> <C>
Kenneth F. Potashner...................... 234,796 2.4%
Thomas L. Horgan ......................... 80,046 *
Gregg L. McKee............................ 18,600 *
John Werderman............................ 28,572 *
Walter P. Robertson....................... 38,786 *
Ted Toch.................................. 24,000 *
Carlton J. Eibl............................ 2,000 *
Mark Rossi................................ 6,000 *
Karl M. Samuelian......................... 23,774 *
Jean Lavigne ............................. -0- *
All directors and executive officers as
a group (13 persons).................... 503,149 5.1%
</TABLE>
- ----------
*Less than one percent.
(1) Information with respect to beneficial ownership is based on
information furnished to the Company by each shareholder included in
the table or included in filings with the Securities and Exchange
Commission. The Company understands that each individual person has
sole voting and investment power for shares beneficially owned by him,
subject to community property laws where applicable.
(2) Shares of Common Stock subject to options which are currently
exercisable or exercisable within 60 days of September 30, 1999, are
deemed outstanding for computing the percentage of the person holding
such options but are not deemed outstanding for computing the
percentage of any other person. Percentage of ownership is based on
9,560,171 shares of Common Stock outstanding on September 30, 1999.
(3) Shares of Common Stock beneficially owned include options exercisable
within 60 days of September 30, 1999 to purchase 77,492 shares granted
to Mr. Potashner, 75,233 shares granted to Mr. Horgan, 15,324 shares
granted to Mr. McKee, 23,000 shares granted to Mr. Werderman, 24,186
shares granted to Mr. Robertson, 24,000 shares granted to Mr. Toch, and
23,334 shares granted to Mr. Samuelian, 6,000 shares granted to Mr.
Rossi and options to purchase 305,969 shares granted to all directors
and officers as a group.
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January, 1999, the Company loaned Kenneth F. Potashner, its Chairman
and former Chief Executive Officer, a total of $2,000,000 to assist in the
payment of income taxes accruing on restricted stock previously granted to Mr.
Potashner. The loan is evidenced by a full recourse promissory note and secured
by the pledge of 50,000 shares of common stock of the Company. The promissory
note is payable in full on or before the second anniversary of the date of such
note and bears interest on the outstanding balance at the rate of 5% per annum.
In August, 1999, the Company loaned Richard Balanson, a Vice
President, a total of $120,000. As long as he remains employed by the
Company, 50% of the loan is forgivable 18 months after Mr. Balanson's fiscal
2000 hire date and the balance of which is forgivable 36 months after such
date.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(3) LIST OF EXHIBITS.
4.1 Rights Agreement dated November 5, 1999 between Registrant and
ChaseMellon Shareholders Services, LLC, as Rights Agent -
Exhibit 1 to the Registrant's Form 8-A filed November 18, 1999
is hereby incorporated by reference.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California, on this 29th day of November, 1999.
MAXWELL TECHNOLOGIES, INC.
By: /s/ CARLTON J. EIBL
--------------------------------------
Carlton J. Eibl
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ CARLTON J. EIBL Chief Executive Officer, November 29, 1999
- ------------------------- President and Director
Carlton J. Eibl
/s/ KENNETH F. POTASHNER Chairman of the Board, Director November 29, 1999
- -------------------------
Kenneth F. Potashner
/s/ VICKIE L. CAPPS Vice President-Finance and November 29, 1999
- ------------------------- Administration, Treasurer
Vickie L. Capps and Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ MARK ROSSI Director November 29, 1999
- -------------------------
Mark Rossi
/s/ KARL M. SAMUELIAN Director November 29, 1999
- -------------------------
Karl M. Samuelian
Director
- -------------------------
Jean Lavigne
</TABLE>
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