ULTRALIFE BATTERIES, INC.
1350 ROUTE 88 SOUTH
P.O. BOX 622
NEWARK, NEW YORK 14513
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 9, 1997
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
"Meeting") of Ultralife Batteries, Inc. (the "Company") will be held on
Tuesday, December 9, 1996 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 amend the Company's 1992 Stock Option Plan by increasing the number
of shares covered from 1,150,000 shares to 1,650,000 shares.
3. 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 28 1997 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 stockholders entitled to vote will be available for
inspection by any stockholder, for any purpose germane to the Meeting, during
ordinary business hours, at Share & Blejec, P.C. 317 Madison Avenue, Suite 1421,
New York, NY 10017 attn: Paul Share, Esq.. If you do not expect to be present
you are requested to fill in, date and sign the enclosed Proxy, which is
solicited by the Board of Directors of the Company, and to promptly return it in
the enclosed envelope. In the event you decide to attend the Meeting in person,
you may, if you desire, revoke your proxy and vote your shares in person.
By Order of the Board of Directors
Bruce Jagid
Chairman of the Board of Directors
and Chief Executive Officer
Dated: October 28, 1997
================================================================================
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.
================================================================================
<PAGE>
ULTRALIFE BATTERIES, INC.
1350 ROUTE 88 SOUTH
P.O. BOX 622
NEWARK, NEW YORK 14513
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 9, 1996
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 1997 Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, December 9, 1997 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, and "FOR"
Proposal 2 described below. 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 28, 1997
are entitled to notice of, and to vote at, the annual meeting of stockholders.
As of October 28, 1997, there were 7,978,336 shares of the Company's stock, par
value $.10 per share ("Common Stock"), outstanding, each entitled to one vote
per share at the Meeting.
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, some of the
officers, directors and regular employees of the Company, without extra
remuneration, may solicit proxies personally or by telephone, telefax or similar
transmission. The Company will reimburse record holders for expenses in
forwarding proxies and proxy soliciting material to the beneficial owners of the
shares held by them.
The approximate date on which the enclosed form of proxy and this proxy
statement are first being sent to stockholders of the Company is October 29,
1997.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors currently has 8 directors. However one of them, Mr.
Stuart Shikiar has chosen not to run for re-election for personal reasons and
the Company has opted not to fill the vacancy at this time. Directors are
elected by a plurality of the votes cast by the stockholders of the Company at a
stockholders meeting at which a quorum of shares is represented. Each director
shall serve until the next annual stockholders meeting and until the successor
of such directors shall have been elected and qualified. The names of, and
certain information with respect to, the persons nominated for election as
directors are presented on the following pages.
Name Age Present Principal Occupation and Employment History
Bruce Jagid 57 Mr. Jagid, a founder of the Company, has been a
director and the Company's Chairman since March 1991
and its Chief Executive Officer since January 1992.
Mr. Jagid has over 25 years experience in the
technical and business aspects of the energy
conversion field. Together with Mr. Rosansky, Mr.
Jagid founded Power Conversion, Inc. ("PCI") in 1970,
where he was the President until January 1989. PCI was
sold to Hawker Siddely PLC in 1986. Mr. Jagid is a
director of several private companies and THQ, Inc.
Mr. Jagid holds numerous patents in the area of
battery technology and has authored several
publications on the subject.
<PAGE>
Name Age Present Principal Occupation and Employment History
Martin Rosansky 59 Mr. Rosansky, a founder of the Company, has been a
director since March 1991 and the Company's Vice
Chairman since January 1992. Mr. Rosansky, a
co-founder of PCI in 1970, has 30 years experience in
the engineering, design and production of battery and
fuel-cell systems. He was Chairman of the Board,
Secretary and Treasurer at PCI from 1970 to January
1989, when he left PCI to pursue private investment
activities. Mr. Rosansky is a director of several
private companies. Mr. Rosansky holds numerous patents
and has authored several publications in the field of
battery technology.
Joseph N. Barrella 51 Mr. Barrella, a founder of the Company, has been a
director and the Company's President since March 1991
and the Company's Chief Operating Officer from October
1992 through November 1996, and its Chief Technology
Officer since November, 1996. Prior thereto, Mr.
Barrella spent seven years as Director of Engineering
at PCI, from May 1984 to January 1991. Mr. Barrella
has been involved in the development and manufacture
of lithium batteries for more than 20 years. He holds
a number of patents relating to lithium battery
designs and has authored several publications relating
to battery technology.
Joseph C. Abeles 82 Mr. Abeles, a founder of the Company, has been a
director and Treasurer since March 1991. Mr. Abeles,
formerly a director of PCI, is a private investor and
currently serves as a director of a number of
companies, including Intermagnetics General
Corporation ("IGC") and Bluegreen Corporation
(formerly Patten Corporation). In 1951 he founded
Kawecki Chemical Co. and served as Chairman and CEO of
Kawecki Berylco Industries from 1969 to 1978.
Arthur Lieberman 62 Mr. Lieberman has been a director and the Company's
Secretary since March 1991. Mr. Lieberman is a
founder, and since 1981 has been the senior partner of
Lieberman & Nowak, a legal firm specializing in
intellectual property law which for many years has
represented clients in the battery industry and
related fields. Lieberman & Nowak has represented the
Company in connection with certain intellectual
property matters.
Carl H. Rosner 68 Mr. Rosner, a director of the Company since January
1992, is the Chairman, and Chief Executive Officer of
IGC. Mr. Rosner has been Chairman of IGC since its
formation and President and Chief Executive Officer
since 1984.
Richard Hansen 57 Mr. Hansen has been a director since July 1993. Mr.
Hansen has been President and Chief Executive Officer
of Pennsylvania Merchant Group Ltd, an investment
banking and venture capital firm, since 1987 and is a
director of Computone Corporation.
The Board of Directors has unanimously approved the above-named nominees for
directors. The Board of Directors recommends a vote FOR all of these nominees.
BOARD OF DIRECTORS
The Board of Directors has met eight (8) times during the fiscal year ended
June 30, 1997. Messrs Abeles, Barrella, Jagid, Rosner and Shikiar attended all
eight meetings; Mr. Rosansky missed one meeting, Mr. Lieberman missed two
meetings and Mr. Hansen missed three meetings.
Each board member receives a $750 monthly retainer as well as $750 for each
board meeting attended. In addition, each director receives an option, at the
end of each calendar quarter to purchase 1,500 shares of Common Stock. This
option is granted to each director on the last day of the calendar quarter; it
vests immediately with a term of five years from the date of grant and is
granted at an exercise price equal to the closing price of the Common Stock on
the date of grant.
-2-
<PAGE>
COMMITTEES OF THE BOARD
The Board has established two standing committees to assist it in carrying
out its responsibilities: the Compensation and Stock Option Committee and the
Audit Committee.
The members of the Compensation and Stock Option Committee are Joseph C.
Abeles, Carl H. Rosner and Arthur Lieberman. The Compensation and Stock Option
Committee has general responsibility for recommending to the Board remuneration
for the Chairman and Vice Chairman and determining the remuneration of other
officers elected by the Board; granting stock options and otherwise
administering the Company's stock option plans; and approval and administration
of any other compensation plans or agreements. This committee held no formal
meetings, but acted by unanimous consent on several occasions and had informal
discussions from time to time during the fiscal year ended June 30, 1997.
The members of the Audit Committee are Joseph C. Abeles, Carl H. Rosner and
Stuart Shikiar. 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, 1997.
PROPOSAL 2
APPROVAL OF AMENDMENT OF 1992 STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES COVERED
PROPOSED AMENDMENT
At the meeting there will be presented to the shareholders Proposal 2, a
proposal to approve and ratify an increase of 500,000 shares in the number of
shares of Common Stock of the Company available under the Company's 1992 Stock
Option Plan (the "1992 Plan").
The Company has three stock option plans, the 1992 Plan, the 1991 Stock
Option Plan, the 1995 Chief Executive Officer Stock Option Plan (the "1995
Plan") as well as options granted under certain employment and compensation
arrangements outside of any stock option plan. The 1992 Plan was adopted by the
Board of Directors on October 1992 and approved by the written consent of
Shareholders of the Company owning a majority of the then outstanding shares of
the Company during November, 1992. As originally adopted, the 1992 Plan provided
for the issuance of up to 400,000 shares of Common Stock upon the exercise of
options granted thereunder. The number of shares reserved for issuance under the
1992 Plan was increased by 250,000 shares to a total of 650,000 shares at a
meeting of the Board of Directors on July 22, 1993, and approved by the
shareholders at the 1993 Annual Meeting, and further increased by 500,000 shares
to a total of 1,150,000 shares at a meeting of the Board of Directors on June
29, 1995 and approved by the shareholders at the 1995 Annual Meeting. Since no
additional options could then be granted under the 1992 Plan, on May 14, 1997,
the Board of Directors adopted an amendment to the 1992 Plan which, subject to
Shareholder approval, increased the number of shares of the Company's common
stock issuable upon exercise of options under the 1992 Plan by 500,000 shares,
to a total of 1,650,000 shares. At October 15, 1997, options to purchase an
aggregate of 1,138,200 shares of Common Stock were outstanding under the 1992
Plan. At October 15, 1997 options to purchase 148,550 shares of Common Stock
have been exercised under the 1992 Plan.
The Board of Directors believes that the prospects of the Company are
contingent in part on the Company's ability to attract and retain highly
qualified employees, consultants and non-employee directors. The Company
periodically has granted options under the 1992 Plan to various key employees
and non-employee directors. The proposed increase in shares subject to the 1992
Plan is thus essential to the Company's efforts to retain key executive and
other personnel.
VOTE REQUIRED FOR APPROVAL
Approval of the amendment to the 1992 Plan requires the affirmative vote of
the holders of a majority of the shares present by person or by proxy at the
meeting. The Board of Directors recommends a vote "FOR" Proposal 2.
-3-
<PAGE>
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 October 15, 1997 by (i)
each person known by the Company to beneficially own more than five percent of
the outstanding shares of Common Stock, (ii) each director of the Company, and
(iii) all directors and officers of the Company as a group. Except as otherwise
indicated, the persons named in this table have sole voting power with respect
to all shares of Common Stock owned based upon information provided to the
Company by the directors, officers and principal stockholders and their
addresses are the address of the Company.
Number of Shares Percent
Name Beneficially Owned Beneficially Owned
---- ------------------ ------------------
Intermagnetics General Corporation
450 Old Niskayuna Rd.
Latham, NY 12210-0461 (1) 1,003,586 12.54%
Joseph Abeles (2) 266,500 3.33%
Joseph Barrella (3) 316,000 3.90%
Bruce Jagid (4) 574,400 7.10%
Richard Hansen (5) 32,500 0.41%
Arthur Lieberman (6) 134,500 1.68%
Martin Rosansky (7) 169,500 2.10%
Carl Rosner (8) 1,003,586 12.54%
Stuart Shikiar (9) 97,000 1.21%
All directors and officers as a
group (16 persons) (10) 1,710,400 19.40%
(1) Includes 833 shares and options to purchase 27,000 shares which may be
exercised within 60 days beneficially owned by Mr. Carl H. Rosner. Mr.
Rosner is the Chairman, and Chief Executive Officer of Intermagnetics
General Corporation ("IGC"). Therefore, IGC may be deemed to share voting
and investment power with respect to the shares and shares issuable upon
the exercise of options held by Mr. Rosner. IGC disclaims beneficial
ownership of the shares and shares issuable upon the exercise of options
owned by Mr. Rosner.
(2) Includes 24,000 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 1,003,586 shares beneficially owned by IGC. Mr. Abeles
is a director of lGC and therefore may be deemed to share voting and
investment power with respect to the shares held by IGC. Mr. Abeles
disclaims beneficial ownership of the shares owned by IGC.
(3) Includes 127,000 shares subject to options which may be exercised within 60
days.
(4) Includes 394,500 shares subject to options which may be exercised within 60
days. Includes 5,000 shares held in trust for Mr. Jagid's children of which
he disclaims beneficial ownership.
(5) Includes 25,500 shares subject to options which may be exercised within 60
days. Includes 2,000 shares owned by minor children of which Mr. Hansen
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.
-4-
<PAGE>
(6) Includes 47,000 shares subject to options which may be exercised within 60
days and 52,500 shares held by the Arthur M. Lieberman P.C. profit sharing
plan.
(7) Includes 77,000 shares subject to options which may be exercised within 60
days.
(8) Includes 27,000 options to purchase shares which may be exercised within 60
days and 975,753 shares owned by IGC. Mr. Rosner is the Chairman, and Chief
Executive Officer of IGC and therefore may be deemed to share voting and
investment power with respect to the shares held by IGC. Mr. Rosner
disclaims beneficial ownership of the shares owned by IGC.
(9) Includes 27,000 shares subject to options which may be exercised within 60
days. Does not include 164,800 shares held in customer accounts over which
Mr. Shikiar has investment power, but for which he disclaims beneficial
ownership. Excludes 975,753 shares beneficially owned by IGC. Mr. Shikiar
is a director of IGC and therefore may be deemed to share voting and
investment power with respect to the shares held by Mr. Shikiar. Mr.
Shikiar disclaims beneficial ownership of the shares owned by IGC.
(10) Includes 838,000 shares subject to options which may be exercised within 60
days.
Section 16(a) Reporting
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company during the fiscal year ended June 30,
1997, 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) each director was late in reporting an option granted on
June 30, 1997; (2) Richard Hansen was late in filing a report covering 5 related
transactions; (3) Mr. Jagid was late filing one report covering 2 related sales
in December 1995 and another report covering an option (with 5 vesting dates)
granted in March 1996; (4) Messrs Lewin, Schoenly Sullivan, Soudak and Welsh
were late in filing a report covering 10 related transaction (a surrender of one
option with 5 vesting dates and a simultaneous grant of one option with 5
vesting dates) and (5) Mr. Sullivan was late in filing a report covering one
transaction in December 1996
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
Uri Soudak 53 Mr. Soudak joined the Company in November, 1996 as
its Chief Operating Officer reporting to its Chief
Executive Officer. Prior to joining the Company,
Mr. Soudak worked for Israel Aircraft Industries
from 1991, most recently serving as its Corporate
Head of R&D and Business Development. From 1988
until 1991 Mr. Soudak was President of
Microeltronics Company, an Israeli maker of
electronics equipment. From 1985 through 1987 Mr.
Soudak was President of Elco Robotics Company, an
Israeli make of vision guidance systems for
robots.
Frederick F. Drulard 57 Mr. Drulard joined the Company' in July 1996 and
became Director of Corporate Planning and
Administration in October of 1996. He became Vice
President-Finance and Administration in October
1997. From January 1994 through July 1997 he was an
independent consultant and as a Senior Associate
for Greenbush & Associates, a financial consulting
company. Prior thereto starting in 1986 he worked
for IGC, most recently as Vice-President Corporate
Planning and Administration.
-5-
<PAGE>
Stanley Lewin 65 Mr. Lewin has been a Vice President of the Company
since October 1991. Mr. Lewin has over 13 years
experience in the lithium battery business. Prior
to joining the Company, Mr. Lewin served in various
engineering and managerial positions at Power
Conversions Inc. ("PCI") from 1977 to September
1991. At PCI he was responsible for overall plant
operations including manufacturing and production.
While at PCI, Mr. Lewin was directly responsible
for the establishment of battery manufacturing
facilities in New Jersey, Puerto Rico and in the
People's Republic of China.
Daniel K. Schoenly 61 Mr. Schoenly has been the Company's Vice President
of Manufacturing since March 1997. Before then he
held the position of Vice President, Manufacturing
Primary Batteries since May 1994. From January 1990
to May 1994, Mr. Schoenly was the Vice President of
Technical Materials, Inc., a subsidiary of Brush
Wellman Inc. Prior thereto, from 1982 to January
1990, Mr. Schoenly held various positions at Brush
Wellman Inc. Both Brush Wellman Inc. and Technical
Materials, Inc. manufacture engineered materials.
James Sullivan 60 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, in charge of market development for Holt
Lloyd International, a car care products company in
the UK. Prior to that, from November 1976 through
November 1994, Mr. Sullivan was Vice-President in
charge of sales with additional responsibilities
for engineering and product development, for PCI, a
manufacturer of lithium batteries.
John Welsh 61 Mr. Welsh has been the Company's Vice President of
European Operations and Managing Director of
Ultralife Batteries (UK) Ltd since November 1995.
Mr. Welsh has over 20 years experience of managing
companies in the UK, USA and Germany. From August
1988 until January 1995 he was Marketing and then
Divisional Manager for Hoppecke Batteries in
Germany which developed and manufactured high rate
lithium manganese dioxide batteries, and from
February 1995 to October 1995 he was Marketing
Manager for industrial nickel cadmium batteries at
FRIWO Silberkraft, also in Germany. Prior to
joining Hoppecke Mr. Welsh worked for 15 years for
Semikron, a German manufacturer of power semi
conductors. He was Managing Director of Semikron UK
from February 1972 until December 1980 and
President of Semikron Inc. Hudson NH until July
1987.
The individuals named in the following tables include, as of June 30, 1997,
the Company's Chief Executive Officer and the two other most highly compensated
executive officers of the Company ("Named Executive Officers"). Total salary and
bonus of each other executive officer of the Company did not exceed $100,000.
The following table sets forth information concerning the annual and
long-term compensation of the Named Executive Officers for all services in all
capacities to the Company and its subsidiary during the Company's fiscal years
ended June 30, 1997, 1996 and 1995.
-6-
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
-------------------------
Annual Compensation Awards Payouts
----------------------------------------- ---------- ----------
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Position Year Salary($) Bonus($) Compensation($) Awards($) Options/ SARs($) Payouts ($) Compensation ($)
- ------------------ ---- --------- -------- --------------- --------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce Jagid 1997 $275,00 $ 0 $36,542 $0 56,000 0 $0
Chief Executive 1996 273,654 0 33,278 0 6,000 0 0
Officer 1995 208,076 111,200 35.545 0 106,000 0 0
Joseph Barrella 1997 155,000 0 36,288 0 6,000 0 0
President and 1996 149,808 0 30,649 0 6,000 0 0
Chief 1995 139,966 15,000 31,002 0 6,000 0 0
Technology
Officer
Stanley Lewin 1997 110,000 0 13,537 0 0 0 0
Vice President of 1996 110,000 0 11,692 0 0 0 0
Technology 1995 101,539 0 13,854 0 0 0 0
</TABLE>
(1) The amounts reported in this column are summarized on the following table:
Bruce Joseph Stanley
Jagid Barrella Lewin
Insurance 1997 $7,513 $7,513 $7,513
Insurance 1996 6,499 6,499 6,499
Insurance 1995 10,267 7,656 8,872
Automobile 1997 11,029 8,500 4,374
Automobile 1996 11,029 8,400 5,193
Automobile 1995 11,028 9,096 4,982
Directors Fees 1997 15,750 15,750 0
Directors Fees 1996 15,750 15,750 0
Directors Fees 1995 14,250 14,250 0
The following table sets forth information concerning options granted to the
Named Executive Officers during the Company's fiscal year ended June 30, 1997
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Potential
Realizable Value at Assumed Annual Rates of
Individual Grants Stock Price Appreciation for Option Term (1)
- ------------------------------------------------------ ----------------------------------------------------------------------------
% of Total
Number Options/SARs
Securities Granted to
Underlying Employees Exercise or
Options/ SARs in Fiscal Base Price 0% Stock 5% Stock 5% Stock 10% Stock 10% Dollar
Name Granted (#) Year(11) ($/sh)(12) Expiration Date Price Price Gain(8) Price Gain (14)
- ---- ----------- -------- ---------- --------------- ----- ----- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce Jagid 1,500 (2) 0.5% $11.62 Sep.30, 2001 $11.62 $14.83 $4,815 $18.71 $10,635
Chief 1,500 (3) 0.5% $8.63 Dec 31, 2001 $8.63 $11.01 $3,570 $13.90 $7,905
Executive 1,500 (4) 0.5% $9.75 Mar 31, 2002 $9.75 $12.44 $4,035 $15.70 $8,925
Officer 1,500 (5) 0.5% $11.63 Jun 30, 2002 $11.63 $14.84 $4,815 $18.73 $10,650
10,000(6) 3.1% $8 7/8 Feb. 27, 2007 $8 7/8 $14.46 $55,850 $23.02 $141,450
10,000(7) 3.1% $8 7/8 Feb. 27, 2007 $8 7/8 $14.46 $55,850 $23.02 $141,450
10,000(8) 3.1% $8 7/8 Feb. 27, 2007 $8 7/8 $14.46 $55,850 $23.02 $141,450
10,000(9) 3.1% $8 7/8 Feb. 27, 2007 $8 7/8 $14.46 $55,850 $23.02 $141,450
10,000(10) 3.1% $8 7/8 Feb. 27, 2007 $8 7/8 $14.46 $55,850 $23.02 $141,450
Joseph Barrella 1,500(2) 0.5% $11.62 Sep.30, 2001 $11.62 $14.83 $4,815 $18.71 $10,635
President & 1,500(3) 0.5% $8.63 Dec.31, 2001 $8.63 $11.01 $3,570 $13.90 $7,905
Chief 1,500(4) 0.5% $9.75 Mar. 31, 2002 $9.75 $12.44 $4,035 $15.70 $8,925
Technology 1,500(5) 0.5% $11.63 Jun.30, 2003 $11.63 $14.84 $4,815 $18.73 $10,650
Officer
Stanley Lewin 0 0% 0 ----- $0 $0 $0 $0 $0
</TABLE>
-7-
<PAGE>
(1) There is no assurance that the value realized by an employee will be at or
near the amount estimated using this model. These amounts rely on assumed
future stock price movements that cannot be predicted accurately.
(2) Vested on the date of grant, September 30, 1996.
(3) Vested on the date of grant, December 31, 1996.
(4) Vested on the date of grant, March 31, 1997.
(5) Vested on the date of grant, June 30, 1997.
(6) Granted February 28, 1997, vests February 28, 1998.
(7) Granted February 28, 1997, vests February 28, 1999.
(8) Granted February 28, 1997, vests February 28, 2000.
(9) Granted February 28, 1997, vests February 28, 2001.
(10) Granted February 28, 1997, vests February 28, 2002.
(11) 325,000 total number of options were granted to employees.
(12) Fair market value at date of grant.
(13) Fair market value of stock at end of actual option term, assuming annual
compounding at the stated rate, less the option price.
The following table sets forth certain information concerning the number of
shares of Common Stock acquired upon the exercise of stock options during the
Company's fiscal year ended June 30, 1997 and the number and value at June 30,
1997 of unsecured stock options to purchase shares of Common Stock held by the
Named Executive Officers.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Value of
Shares Value Number Unexercised Unexercised in the Money
Acquired on Realized Options/SARs at FY-End (#) Options/SARs at FY-End ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ ---- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Bruce Jagid 12,500 $68,750 380,500/170,000 $493,700/$175,000
Joseph Barrella 0 $0 31,000/0 $54,200/$0
Stanley Lewin 5,000 $51,875 28,000/22,000 $36,800/$28,900
</TABLE>
(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, 1997. Also, the
Company has no employee pension plans to which it makes contributions, except as
described below under "401(k) Plan".
Employment Arrangements
Effective March 1, 1994, the Company and Mr. Bruce Jagid entered into an
employment agreement ("1994 Agreement"). Under the terms of the 1994 Agreement,
Mr. Jagid's base salary was $200,000 per year. By an amendment to the 1994
Agreement, effective August 24, 1995 ("1995 Amendment"), Mr. Jagid's base salary
was increased to $250,000 per year, effective retroactively to March 1, 1995. In
accordance with the terms of the 1994 Agreement, the Company paid Mr. Jagid a
bonus in the amount of $111,200 during the year ended June 30, 1995. Effective
March 1, 1996, Mr. Jagid's salary was increased to $275,000 per year. Effective
March 1, 1997 Mr. Jagid's salary was increased to $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
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<PAGE>
options, once vested, will remain exercisable until expiration, notwithstanding
the subsequent termination of Mr. Jagid's employment. Such option was ratified
at the Company's December 7, 1995 annual stockholders' meeting.
The original term of Mr. Jagid's 1994 Agreement was three years expiring on
February 28, 1997. The 1995 Amendment extended the term by three years, so as to
terminate on February 28, 2000. Unless terminated for cause, upon expiration of
the agreement, Mr. Jagid will receive severance at the rate of one month's
salary for each year of employment with the Company, not to exceed three months,
prorated for partial years worked.
On February 28, 1997, Mr. Jagid was granted an option under the Company's
1992 Stock Option Plan to purchase 50,000 shares at $8 7/8 per share, the
closing price on such date. Such Option expires on February 27, 2007, and will
vest with respect to 10,000 shares on February 28, of each of 1998, 1999, 2000,
2001 and 2002.
The Company entered into an employment agreement dated January 18, 1991
with Mr. Joseph N. Barrella (the "Agreement"). The Agreement was amended as of
December 21, 1992 (the "Amendment"). The Agreement and the Amendment provide
that Mr. Barrella will serve as President, at an annual salary of $110,000 for
1991 and 1992, $125,000 for 1993, $135,000 for 1994, $145,000 for 1995 and
$155,000 for 1996. Subsequent to January 20, 1994, Mr. Barrella became an
"at-will" employee. The Agreement and Amendment provide that the Company will
provide to Mr. Barrella in addition to his compensation, (i) reimbursement for
an apartment in the Rochester, New York area to a maximum of $6,000 per year,
(ii) a leased automobile with a cost not to exceed $700 per month, and (iii)
granted Mr. Barrella an "incentive" Option to acquire 100,000 shares of Common
Stock of the Company under the Company's 1992 Stock Option Plan (discussed
below). The Company and Mr. Barrella have agreed that after December, 1996, Mr.
Barrella will no longer be reimbursed for an apartment in the Rochester, New
York area. Effective July 1, 1997 Mr. Barrella's salary was increased to
$165,000 per annum.
In addition to the above compensation, each board member receives a $750.00
monthly retainer as well as $750.00 for each board meeting attended. In
addition, commencing June 30, 1993, each director receives an option, at the end
of each calendar quarter to purchase 1,500 shares of the Company's common stock.
This option is granted to each director on the last day of the calendar quarter;
it vests immediately with a term of five years from the date of grant and is
granted at a purchase price equal to the closing price of the Common Stock on
the date of grant.
DESCRIPTION OF OPTION PLANS AND NON-PLAN OPTIONS
1991,1992 and 1995 Stock Option Plans. The Company has three stock option
plans and a number of options granted not pursuant to any plan. The plans,
include the Company's 1991 Stock Option Plan ("1991 Plan") the Company's 1992
Stock Option Plan (the "1992 Plan") and the Company's 1995 Chief Executive
Officer Stock Option Plan (the "1995 Plan"). The 1991 and 1992 Plans expire in
2001 and 2002 respectively, and currently cover a maximum of 100,000 and
1,150,000 shares respectively (subject to the adoption of proposal 2 which will
increase the maximum for the 1992 Plan to 1,650,000 shares). The 1991 and 1992
Plans are administered by the Compensation and Stock Option Committee (the
"Committee") which consists of Arthur Lieberman, Carl H. Rosner and Joseph C.
Abeles. Subject to the express provisions of the 1991 and 1992 Plans, the
Committee has the authority to interpret the Plans, to prescribe, amend, and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of stock agreements thereunder and to make all other determinations
necessary or advisable for the administration of the Plan.
Key employees and consultants of the Company (including employees and
consultants who are also directors of the Company) are eligible to receive
options under the 1991 and 1992 Plans. Key employees are eligible to receive
incentive stock options ("ISOs") under the 1992 Plan, and non-qualified stock
options ("NQSOs") under the 1991 and 1992 Plans. Consultants are eligible to
receive only NQSOs under either Plan. The 1991 and 1992 Plans confer discretion
on the Committee to select key employees and consultants to receive options. The
Committee determines the exercise price of the option granted, except that the
exercise price may not be less than 100% of the fair market value of the shares
for an ISO under the 1992 Plan, or 85% of the fair market value of the shares
for a NQSO, on the date of grant.
The Committee determines the term of the option, except that no option may
have a term of more than ten years. No ISO granted to a Control Person may have
a term of more than five years. The Committee also determines whether an option
is exercisable in installments and whether the exercise price may be paid in
Common Stock, including Common Stock acquired pursuant to the option being
exercised.
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<PAGE>
The 1992 Plan provides for an automatic grant on the last day of each
calendar quarter starting on June 30, 1993, to each director on such grant date,
of a five-year NQSO to purchase 1,500 shares of Common Stock at an exercise
price equal to the closing price of the stock on the date of grant.
Options granted to key employees, consultants and directors may be
exercised, prior to termination of employment in the case of the 1991 Plan, and
under the 1992 Plan within 90 days following the termination of an employee's
employment or a consultant's consulting relationship with the Company or a
director's term of office with the Company (unless the director continues to be
an employee or consultant of the Company). The Committee shall have the
discretion to provide that upon termination of an employee's employment or a
consultant's consulting relationship as a result of retirement, disability or
death, such grantee or his or her legal representative may exercise any
outstanding and then exercisable installments of his or her options for a period
not to exceed: (i) one year from the date of such termination in the case of
death or permanent and total disability, and (ii) three months from the date of
such termination in the case of retirement or other disability. In no event are
options exercisable beyond their stated terms.
All options granted under the 1991 and 1992 Plans become exercisable upon a
"change in control" as defined in the 1991 and 1992 Plans. The 1992 Plan
provides that in the event of changes in corporate structure which in the
judgment of the Committee materially affect the value of shares, the Committee
may determine the appropriate adjustment to the number and class of shares and
the exercise price per share for any outstanding option.
As of June 30, 1997, NQSOs to purchase an aggregate of 91,500 shares of
Common Stock had been granted under the 1991 Plan, all at an exercise price of
$4.00 per share. During the fiscal year ended June 30, 1997, no options were
granted and options to purchase 5,625 were exercised and no options to purchase
shares were canceled under the 1991 Plan. At present the Company does not intend
to grant any further options under the 1991 Plan.
As of June 30, 1997, options to purchase an aggregate of 1,288,000 shares
of Common Stock had been granted under the 1992 Plan at exercise prices ranging
from $6.38 to $24.50 per share. Of such amounts, during the fiscal year ended
June 30, 1997, options to purchase 325,000 shares have been granted at prices
ranging from $8.63 to $14.75 per share, options to purchase 7,000 shares have
been exercised at prices ranging from $8.75 to $9.00 per share and options to
purchase 102,000 shares have been canceled.
The Company granted to each of Mr. Barrella, Mr. Jagid, the Company's Chief
Executive Officer, and Mr. Rosansky, the Company's Vice Chairman, options under
the 1992 Plan to purchase 6,000 shares during the fiscal years ended June 30,
1997, 1996 and 1995, respectively, as a director of the Company.
Pursuant to the 1995 Plan, which was adopted by the Stockholders of the
Company, at the 1995 Annual meeting of Stockholders, Bruce Jagid was granted an
option to purchase 100,000 shares of the Company's Common Stock at $14.25 per
share. These options vest at a rate of 20,000 shares on March 1, 1996, 1997,
1998 1999 and 2000. Under the terms of the 1995 Option, once the right to
purchase a number of shares vests, it remains vested until the options
expiration on March 1, 2001, notwithstanding any subsequent termination of Mr.
Jagid's employment. None of these options have been canceled or exercised.
NON-PLAN OPTIONS
As of June 30, 1994, options to purchase an aggregate of 375,000 shares of
Common Stock were outstanding under various arrangements other than the 1991
Plan, the 1992 Plan or the 1995 Plan ("non-plan options"). No non-plan options
to purchase shares were issued or canceled during the fiscal year ended June 30,
1997. Non-plan options to purchase 17,500 shares were exercised, at a price of
$4.00 per share during the fiscal year ended June 30, 1997. Mr. Lewin exercised
a non-plan option to purchase 5,000 shares and Mr. Jagid exercised a non-plan
option to purchase 12,500 shares during the fiscal year ended June 30, 1997.
During the fiscal year ended June 30, 1993, Mr. Jagid was granted non-plan
options to purchase 300,000 shares of Common Stock, of which 75,000 are at an
exercise price of $4.00 per share which vest over two years and 225,000 are at
an exercise price of $9.75 per share which vest over five years. During the
fiscal year ended June 30, 1994, Mr. Jagid was granted non-plan options to
purchase 150,000 shares of Common Stock ("the 1994 Option") at an exercise price
of $11.00 per share which vest over five years. See "Employment Arrangements"
for further details regarding the options granted to Mr. Jagid.
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<PAGE>
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 six consecutive months 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 20% be withheld by the Company and contributed
to their account under the 401(k) Plan. The 401(k) Plan permits, but does not
require, additional contributions for non-highly compensated employees to the
401(k) Plan by the Company.
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 approximately $32,000 as of December 31, 1996
with respect of calendar year 1996. The Company's contribution is expected to be
higher with respect to calendar year 1997 both because of the higher maximum
percentage of salary which it will match under the Plan, and because a
significantly higher number of employees qualify for matching contributions.
All 401(k) contributions are placed in a trust fund to be invested at the
trustee's discretion, except that the Company may designate that the funds be
placed and held in specific investment accounts managed by an investment manager
other than the trustee. Amounts contributed to employee accounts by the Company
or as compensation reduction payments, and any earnings or interest accrued on
employee accounts, are not subject to federal income tax until distributed to
the employee, and may not be withdrawn (absent financial hardship) until death,
retirement or termination of employment.
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
CONCERNING EXECUTIVE COMPENSATION
OVERVIEW
Compensation determinations are made by the Company's Compensation and
Stock Option Committee. The Company seeks to provide executive compensation that
will support the achievement of the Company's financial goals while attracting
and retaining talented executives and rewarding superior performance.
The Company seeks to provide an overall level of compensation to the
Company's executives that is competitive within the Company's industry and with
other companies of comparable size and complexity. Compensation in any
particular case may vary from the industry average on the basis of annual and
long-term Company performance as well as individual performance. The
Compensation and Stock Option Committee will exercise its discretion to set
compensation where, in its judgment, external, internal or individual
circumstances warrant it.
In general, the Company compensates its executive officers through a
combination of salary and stock option awards. Additionally, the Company's
executives are eligible to participate in or receive benefits under an employee
benefit plan made available by the Company to its executives and/or employees.
SALARY
Of the primary elements of executive compensation set forth above, salary
is the least affected by the Company's performance; although it is very much
dependent on individual performance. The Company believes that salaries paid to
its executives are competitive with industry norms. The salary levels and annual
increases of all executive officers of the Company must be approved by the
Compensation and Stock Option Committee. Salary levels for executives are
determined by progress made in the operational and functional areas for which
they are responsible as well as the overall profitability of the Company.
Executives' salaries are reviewed annually. The timing and amount of any
increase to executives are both dependent upon (i) the performance of the
individual and, to a lesser extent, (ii) the financial performance of the
Company.
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<PAGE>
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 awards plan 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. Upon review of such
criteria and upon the favorable recommendation of the Compensation and Stock
Option Committee, Mr. Jagid's salary has been increased to $300,000 effective
March 1, 1997.
Compensation and Stock Option Committee
Joseph C. Abeles
Carl H. Rosner
Arthur Lieberman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation and Stock Option Committee,
consisting of Messrs. Abeles, Rosner and Lieberman, deliberate on issues
concerning executive compensation. Mr. Abeles acts as the Company's Treasurer.
Mr. Abeles is a director of IGC and a member of IGC's Compensation Committee.
Mr. Rosner is the Chairman, and Chief Executive Officer of IGC and is a member
of the Company's Compensation and Stock Option Committee.
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<PAGE>
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,
1997 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.
[OBJECT OMITTED]
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, 1998.
A representative of Arthur Andersen LLP, the Company's principal
accountant, plans to be present at the Meeting, will have the opportunity to
make a statement, and is expected to be available to respond to questions.
Copies of the Company's Annual Report and form 10-K for the year ended June
30, 1997, as filed with the SEC, will be furnished without charge to beneficial
stockholders or stockholders of record on October 1, 1997, upon request. Please
contact: Corporate Secretary, Ultralife Batteries, Inc., 1350 Route 88 South,
Post Office Box 622, Newark, New York, 14513, Telephone (315) 332-7100.
October 28, 1997 By Order of the Board of Directors
Bruce Jagid
Chairman of the Board of Directors
and Chief Executive Officer
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<PAGE>
PROXY ULTRALIFE BATTERIES, INC
Annual Meeting of Shareholders - December 9, 1997
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints each of Bruce Jagid and Joseph Barrella as the
undersigned's proxy, with full power of substitution, to vote all the
undersigned's shares of common stock in Ultralife Batteries, Inc. (the
"Company") at the Annual Meeting of Stockholders of the Company to be held on
December 9, 1997 at 10:30 A.M. local time, at the offices of Chase Manhattan
Bank, 410 Park Avenue, New York, New York, or at any adjournment, on the matters
described in the Notice of Annual Meeting and Proxy Statement and upon such
other business as may properly come before such meeting or any adjournments
thereof, hereby revoking any proxies heretofore given.
PROPOSAL 1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote for all or
the following nominees:
-------------------------------------------------------------------------------
(Nominees: Bruce Jagid, Joseph Abeles, Joseph Barrella, Richard Hansen, Arthur
Lieberman, Martin Rosansky, Carl H. Rosner)
PROPOSAL 2. AMENDMENT OF 1992 STOCK OPTION PLAN - To increase number of
Shares Covered.
FOR |_| AGAINST |_| ABSTAIN |_|
(continued and to be signed on reverse side)
<PAGE>
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 and FOR Proposal
2.
DATED:__________________1997
____________________________
Signature
____________________________
Signature if Held Jointly
Sign exactly as set forth
herein. If signed as
executor, administrator,
trustee or guardian,
indicate the capacity in
which you are acting.
Proxies by corporations
should be signed by a duly
authorized officer and bear
corporate seal.
Please Sign and Return the Proxy Card Promptly in Enclosed Envelope
