SEC Form 10-K/A filed by Ultralife Corporation (Amendment)

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(Mark One)                                    

OR

For the transition period from ____________ to ____________

 

(Exact name of registrant as specified in its charter)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Yes ☐ No ☒

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). Yes ☐ No ☒

 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

On June 30, 2023, the aggregate market value of the common stock held by non-affiliates as defined in Rule 405 under the Securities Act of 1933) of the registrant was approximately $46,718,255 (in whole dollars) based upon the closing price for such common stock as reported on the NASDAQ Global Market on June 30, 2023.

 

As of April 22, 2024, the registrant had 16,466,594 shares of common stock outstanding.

 

 

 

None.

 

 

 

 

 

 

 

 

ITEM 10.         DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

 

The following sets forth certain information concerning our directors as of April 24, 2023.

 

 

 

 

 

Our named executive officers are appointed annually by our Board of Directors. Our named executive officers for the year ended December 31, 2023 were:

 

 

 

There were no other individuals who meet the definition of Named Executive Officer.

 

Mr. Manna’s information is set forth above with the other directors. Certain information with respect to our other named executive officer for fiscal 2023 is presented below.

 

 

 

 

 

 

Pursuant to the General Corporation Law of the State of Delaware and our By-laws, our business, property and affairs are managed under the direction of our Board of Directors. Members of our Board of Directors are kept informed of Company business through regular discussions with our President and Chief Executive Officer and our Chief Financial Officer, Treasurer and Secretary, by reviewing materials provided to them by the Company’s management and by participating in meetings of the Board and its committees.

 

Our Board of Directors has determined that, except for Michael E. Manna, our President and Chief Executive Officer, all directors are “independent” for purposes of listing standards of The NASDAQ Global Market (“NASDAQ”) applicable to the Corporate Development and Governance Committee and the Compensation and Management Committee. In addition, our Board of Directors has determined that, except for Michael E. Manna and Bradford T. Whitmore, our Board Chair, all directors are “independent” for purposes of NASDAQ listing standards applicable to the Audit and Finance Committee. We believe that the segregation of the roles of Board Chair from that of the President and Chief Executive Officer ensures better overall governance of our Company and provides meaningful checks and balances regarding our overall performance. This structure allows our President and Chief Executive Officer to focus on our business while the Board Chair leads our Board of Directors in establishing corporate policy and enhancing our governance structure and practices. We believe this structure is appropriate for a company with our varied product portfolio addressing both commercial and defense markets.

 

Our Board of Directors has three standing committees: an Audit and Finance Committee, a Corporate Development and Governance Committee, and a Compensation and Management Committee. During 2023, our Board of Directors held four meetings and the committees of our Board of Directors held a total of thirteen meetings. During 2023, Bradford T. Whitmore served as our Board Chair. As Board Chair, Mr. Whitmore served as a non-voting ex-officio member of all our Board committees. Each director attended, in person or virtually, at least 75% of the aggregate of: 1) the total number of meetings of the Board; and 2) the total number of meetings held by all committees of the Board on which he or she served.

 

Our Board of Directors has adopted a charter for each of the three standing committees that addresses the composition and function of each committee and has also adopted Corporate Governance Principles that address the composition and function of the Board of Directors. These charters and Corporate Governance Principles are available on our website at http://investor.ultralifecorporation.com under the subheading “Corporate Governance.” Pursuant to our Corporate Governance Principles, it is our policy that directors retire from service at the annual meeting following their 70^th birthday.

 

Our Board of Directors has determined that all directors who serve on these committees are “independent” for purposes of the listing standards of NASDAQ, and that the members of the Audit and Finance Committee are also “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended. Our Board of Directors based these determinations primarily on a review of the responses of the directors to questions regarding employment, compensation history, affiliations and family and other relationships, and on follow-up discussions with directors.

 

Our Board of Directors, consisting of five members, has one director who identifies as “Female” and “African American or Black” in accordance with NASDAQ’s listing standards.

 

 

The composition and the functions of our three standing committees of our Board of Directors are set forth below. Our Board of Directors appoints members of the committees and designates chairs of those committees from among those individuals elected at our annual meetings of stockholders.

 

 

 

The current members of the Audit and Finance Committee are Thomas L. Saeli (Chair), Janie Goddard and Robert W. Shaw II. This committee selects our independent registered public accounting firm and has oversight responsibility for reviewing the scope and results of the independent registered public accounting firm’s annual audit of our financial statements and the quality and integrity of those financial statements. Further, the Audit and Finance Committee reviews the qualifications and independence of the independent registered public accounting firm. The Audit and Finance Committee meets with our Chief Financial Officer and Treasurer, our Corporate Controller and the independent registered public accounting firm to review matters relating to internal accounting controls, our accounting practices and procedures and other matters relating to our financial condition and has the power to engage outside counsel and other outside experts. The Audit and Finance Committee also reviews and monitors areas of financial and cybersecurity risk that could have a material impact on our Company. The Audit and Finance Committee met four times during 2023.

 

Our Board of Directors has determined that each of the members of the Audit and Finance Committee is “financially literate” in accordance with NASDAQ's listing standards. In addition, our Board of Directors has determined that Mr. Saeli qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.

 

 

The current members of the Corporate Development and Governance Committee are Janie Goddard (Chair), Thomas L. Saeli and Robert W. Shaw II. This committee works with management to develop corporate strategy and to identify and evaluate acquisition opportunities, reviews the performance and compensation of our directors annually, makes annual recommendations to our Board of Directors for nominations for election to the Board of Directors and committee assignments and for the compensation of our directors, and manages the annual evaluation of the performance of our President and Chief Executive Officer and our Board Chair. The Corporate Development and Governance Committee met five times during 2023.

 

The Corporate Development and Governance Committee identifies potential nominees for director based on its own research for appropriate candidates as well as on recommendations received by directors or from stockholders as described below. The Corporate Development and Governance Committee has the authority to retain an executive search firm to assist in the identification of potential director nominees. The evaluation process and the factors considered in undertaking that evaluation are set forth under the caption “Stockholder Recommendations and Standards for Director Nominations” below.

 

The Corporate Development and Governance Committee also has overall responsibility for assessing and managing our exposure to risks associated with the conduct of our business.

 

 

The current members of the Compensation and Management Committee are Robert W. Shaw II (Chair), Janie Goddard and Thomas L. Saeli. The Compensation and Management Committee has ultimate responsibility for determining the compensation of officers appointed by our Board of Directors, granting stock options and other equity awards and otherwise administering our equity compensation plans, and approving and administering any other compensation plans or agreements. The Compensation and Management Committee has the authority to retain outside experts in making compensation determinations. The Ultralife Corporation 2014 Long-Term Incentive Plan (“2014 LTIP”) is administered by the Compensation and Management Committee. In addition, if approved by the Company’s stockholders, the proposed Ultralife Corporation Long-Term Incentive Plan (the “New LTIP”) will be administered by the Compensation and Management Committee. The Compensation and Management Committee met four times during 2023.

 

 

As noted above, the Corporate Development and Governance Committee considers and establishes procedures regarding recommendations for nomination to our Board of Directors, including nominations submitted by stockholders. Such recommendations, if any, should be sent to our Corporate Secretary, Attn: Philip A. Fain, Ultralife Corporation, 2000 Technology Parkway, Newark, New York 14513. Any recommendations submitted to the Corporate Secretary should be in writing and should include any material the stockholder considers appropriate in support of that recommendation but must include the information that would be required under the rules of the SEC in a proxy statement soliciting proxies for the election of such candidate and a signed consent of the candidate to serve as a director, should he or she be elected. The Corporate Development and Governance Committee evaluates all potential candidates in the same manner, regardless of the source of the recommendation.

 

 

The Corporate Development and Governance Committee reviews the credentials of potential director candidates, including those recommended by stockholders, in making a determination whether to conduct a full evaluation of a candidate. The Corporate Development and Governance Committee considers the composition, size and diversity of the existing Board of Directors, along with other factors such as any anticipated vacancies due to retirement or other reasons and the Company’s need for a person with specific skills, experiences or attributes, in making its determination to conduct a full evaluation of a candidate. As part of the full evaluation process, the Corporate Development and Governance Committee may conduct interviews, obtain additional background information and conduct reference checks of candidates. The Corporate Development and Governance Committee may also ask the candidate to meet with management and other members of our Board of Directors.

 

In evaluating a director candidate, our Board of Directors, with the assistance of the Corporate Development and Governance Committee, considers a variety of factors that would qualify the candidate to serve as a director. The criteria for selection to our Board of Directors, as described in our Corporate Governance Principles, include character and leadership skills; general business acumen and executive experience; knowledge of strategy, finance and relations between business and government; and internal business operations – all to ensure an active and diverse Board of Directors whose members work well together and possess the collective knowledge and expertise required to meaningfully contribute as directors. Our Corporate Development and Governance Committee reviews the qualifications of director candidates with those of our current directors to augment and complement the skills, experiences and attributes of our current Board members. The Company is committed to a Board of Directors comprised of individuals with diverse backgrounds, skills and experiences.

 

 

Our policy is that all our directors, absent special circumstances, should participate in our Annual Meetings of Stockholders, either in person or telephonically. All directors participated in last year’s Annual Meeting of Stockholders.

 

 

Our Corporate Governance Principles require our independent directors to meet in executive session regularly by requiring them to have at least four regularly scheduled meetings per year without management present. Our independent directors met in executive session four times during 2023. In addition, our standing committees meet in executive session on a regular basis.

 

 

Stockholders interested in communicating directly with our Board of Directors as a group or individually must request the opportunity to do so in writing to our Corporate Secretary, Attn. Philip A. Fain, Ultralife Corporation, 2000 Technology Parkway, Newark, New York 14513. The Corporate Secretary will review all such correspondence and forward to our Board of Directors a summary of that correspondence and copies of any correspondence that, in his opinion, deals with the functions of the Board of Directors or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by us that are addressed to members of the Board of Directors and request copies of any such correspondence. Any concerns relating to accounting, internal controls or auditing matters will be brought to the attention of the Audit and Finance Committee and handled in accordance with the procedures established by the Audit and Finance Committee with respect to such matters.

 

 

Our management team is responsible for assisting the Corporate Development and Governance Committee in its assessment of our exposure to risks associated with the conduct of business. We have an enterprise risk management process to identify, assess and manage the most significant risks facing our Company. Our Corporate Development and Governance Committee has overall responsibility to regularly review management’s risk management process, including the policies and guidelines used by management to identify, assess and manage our exposure to risk on an on-going basis. Our Audit and Finance Committee has oversight responsibility for financial risks and other risks that could have a material impact on our Company. Our management reviews these financial risks with our Audit and Finance Committee regularly and reviews the risk management process, as it affects financial risks, with our Audit and Finance Committee on an on-going basis. Based upon this risk assessment and management process, the Board may recommend changes to the operations of the Company to reduce risk.

 

 

 

We have a Code of Ethics applicable to all employees, including our named executive officers and all members of our Board of Directors. Our Code of Ethics includes the elements of a code of ethics specified in Item 406 of Regulation S-K and also complies with NASDAQ’s requirements for a code of conduct. Stockholders can find a link to this Code of Ethics on our website at http://investor.ultralifecorporation.com under the subheading “Corporate Governance.”

 

Our Code of Ethics emphasizes our commitment to conducting business in a legal and ethical manner and encourages prompt and confidential reporting of any suspected violations of law or the Code of Ethics. As part of our Code of Ethics, directors and employees are expected to make business decisions and to take actions based upon the best interests of our Company and not based upon personal relationships or benefits. In conjunction with our Code of Ethics, our General Counsel conducts an annual training session with our Board of Directors with emphasis on all facets of compliance with new and existing regulations and best practices. Any potential conflict of interest, and any transaction or relationship involving our officers or directors that could give rise to a conflict of interest, must be reviewed and resolved by our Corporate Development and Governance Committee.

 

 

Pursuant to our Insider Trading Compliance Policy, the Company’s directors, officers and employees are prohibited from engaging in short sales of Ultralife securities or from buying or selling put options, call options or other derivatives of Ultralife securities.

 

 

ITEM 11.         EXECUTIVE COMPENSATION

 

 

Our Corporate Development and Governance Committee presently uses cash compensation to attract and retain qualified candidates to serve on our Board of Directors. Our practice is to survey our peer group companies, generally consisting of like-sized micro-cap companies and/or public companies in our industry, periodically to ascertain whether our overall director compensation is appropriate and balanced. If we perceive that there has been a major change in our Company or the market, we may survey more frequently as directed by the Corporate Development and Governance Committee. In setting director compensation, our Corporate Development and Governance Committee considers the amount of time that directors spend fulfilling their duties to us, the skill-level required by members of our Board of Directors, and based on publicly available data, the compensation paid to directors in similar-sized organizations in our industry. Our program is designed to deliver annual director compensation at the median levels of director compensation for companies in similar industries and of similar size. Our annual director compensation period runs from July 1 to June 30.

 

 

Each non-employee director will receive an annual cash retainer of $70,040, except for the Board Chair, who will receive an annual cash retainer of $103,000, for the period July 1, 2023 through June 30, 2024, the same as the amounts paid to our non-employee directors for the period July 1, 2022 through June 30, 2023. These retainers are paid quarterly in cash. In addition, each director who is a member of a Board committee receives an additional cash retainer for such committee service.

 

Annual retainers for Board committee service for the period July 1, 2023 to June 30, 2024 were as follows:

 

 

Annual retainers for Board committee service for the period July 1, 2022 to June 30, 2023 were as follows:

 

 

 

Annual retainers for both committee members and committee chairs are paid quarterly in cash. For Board and committee service during the fiscal year ended December 31, 2023, we paid our non-employee directors an aggregate $435,427.

 

Our non-employee directors have stock ownership guidelines that require them to maintain ownership of at least $40,000 of our common stock. Newly elected directors have two years from their election to the Board to achieve the stock ownership requirement. Currently, all our non-employee directors, except for Ms. Goddard who joined the Board on February 21, 2023 and has two years from that date to achieve the stock ownership requirement, meet the stock ownership guidelines. Refer to the Executive Officer Compensation section contained herein for stock ownership guidelines for our named executive officers.

 

 

The table below summarizes the compensation paid by us to our non-employee directors for their service for the fiscal year ended December 31, 2023. Pursuant to our Corporate Governance Principles, it is our policy that directors retire from service at the annual meeting following their 70^th birthday. Accordingly, Ranjit C. Singh retired at our 2023 Annual Meeting of Stockholders. Janie Goddard joined our Board on February 21, 2023 and was subsequently elected a director at our 2023 Annual Meeting of Stockholders

 

 

 

 

 

 

 

 

Michael E. Manna, our current President and Chief Executive Officer, was ineligible to receive compensation for his service as a director because he is also an employee. Refer to the Summary Compensation Table for the compensation of our named executive officers.

 

 

We have determined that Mr. Manna and Mr. Fain were our named executive officers for 2023 and that Mr. Popielec, the Company’s former CEO and President, from January 1, 2022 to November 22, 2022, Mr. Manna commencing November 22, 2022, and Mr. Fain were our named executive officers for 2022.

 

As a smaller reporting company under the Securities Exchange Act of 1934, as amended, we are providing executive compensation information in accordance with the scaled disclosure requirements of Regulation S-K. As a result, a Compensation Disclosure and Analysis and certain other disclosures are not included.

 

 

 

The following table sets forth information concerning the compensation earned by or awarded to our named executive officers for their services in all capacities to us during 2023 and 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

Our executive compensation program is evaluated and approved each year by our Compensation and Management Committee. Annual total compensation for our named executive officers is comprised of the following key components:

 

 

Our executive compensation program is structured to align the interests of our named executive officers with those of our stockholders by rewarding performance that achieves successful execution of our business strategy, grows our business and increases stockholder value. Our executive compensation program is designed to incentivize our named executive officers to achieve strong financial, operational and strategic performance and to provide a link between the compensation earned by our executives and the creation of long-term sustainable value. The Compensation and Management Committee establishes specific annual, long-term and strategic goals and seeks to reward our named executive officers for performance that meets or exceeds those goals. In addition, we expect our named executive officers to work toward achievement of these goals while maintaining the highest ethical standards.

 

 

The Corporate Development and Governance Committee evaluates the performance of the President and Chief Executive Officer and presents its evaluation annually to the Compensation and Management Committee for recommendation annually for base salary adjustment, if any, to the Board of Directors for approval. The President and Chief Executive Officer evaluates the performance of Mr. Fain, our Chief Financial Officer, Treasurer and Secretary, and presents his evaluation and recommendation annually for a base salary adjustment, if any, to the Compensation and Management Committee, which, in turn, may recommend acceptance of or adjustment to such base salary recommendation to the Board of Directors. If adjustments to base salaries are recommended and approved, the adjustments are made to be effective for a period ranging from twelve months from the date of the last salary adjustment.

 

In October 2022, the Board of Directors, at the recommendation of the Compensation and Management Committee, approved a base salary increase of 3.0% for Mr. Popielec ($531,761 to $547,715) and 3.0% for Mr. Fain ($338,713 to $348,875). On November 22, 2022, upon his appointment as President and Chief Executive Officer, the Board of Directors upon recommendation of the Compensation and Management Committee, approved a base salary of $375,000 for Mr. Manna. His salary as President, Battery & Energy Products prior to his appointment as President and Chief Executive Officer had been $253,000. In October 2023, the Board of Directors, at the recommendation of the Compensation and Management Committee, approved a base salary increase of 3.0% for Mr. Manna ($375,000 to $386,249) and 3.0% for Mr. Fain ($348,875 to $359,341). The salary increases were approved by the Compensation and Management Committee based on a number of factors including individual and Company performance.

 

 

Our Compensation and Management Committee establishes a STIP each fiscal year to provide our named executive officers an opportunity to earn an annual cash award in addition to their base salaries. The STIP is designed to place “at risk” a significant portion of the annual total cash compensation of our named executive officers to incentivize them to achieve our short-term financial objectives while making progress toward our longer-term goals. Generally, the STIP target levels are set such that, assuming achievement of pre-established performance metrics, the combined annual base salary and STIP award for our named executive officers will be at or near the 50^th percentile for named executive officers at the companies in our peer group.

 

 

For 2023, the STIP target bonus levels for Messrs. Manna and Fain were 60% and 50% of their respective base salaries. For Messrs. Manna and Fain, the performance goals to be achieved to be awarded the STIP targeted bonus for 2023 were consolidated operating profit and consolidated revenue goals of $7.7 million and $156.5 million, respectively, as measured pursuant to generally accepted accounting principles. The STIP award was structured with a 70% weighting on the consolidated operating profit goal and a 30% weighting on the respective revenue goal. Achievement of less than 75% of the consolidated operating profit and less than 90% of the revenue goals would result in no award being earned with respect to that metric. Achievement of the target goals would result in an 90% payment of the target bonus levels with respect to that metric. Achievement of over 100% to 111% of the consolidated operating profit goal and achievement of over 100% to 111% of the revenue goal would result in an award ranging from 90% to 100% of the target award with respect to the metric for which such performance levels had been achieved. Achievement of over 111% to 125% of the consolidated operating profit goal and over 111% to 125% of the revenue goal would result in an award ranging from 101% to 135% of the target award with respect to the metric for which such performance levels had been achieved. Our named executive officers were eligible for a partial award if one of the two metrics was achieved.

 

Based on our 2023 financial performance, Messrs. Manna and Fain earned STIP awards for 2023 of $278,214 and $215,694, respectively, which were paid in March 2024.

 

For 2022, the STIP target bonus levels for Messrs. Popielec, Fain and Manna were 75%, 50% and 50% of their respective base salaries. For Messrs. Popielec and Fain, the performance goals to be achieved to receive the STIP targeted bonus for 2022 were consolidated operating profit and consolidated revenue goals of $7.3 million and $139.2 million, respectively, as measured pursuant to generally accepted accounting principles. For Mr. Manna, the performance goals to be achieved to receive the STIP target bonus were consolidated operating profit and Battery & Energy Products revenue goals of $7.3 million and $118.2 million, respectively, as measured pursuant to generally accepted accounting principles. The STIP award was structured with a 70% weighting on the consolidated operating profit goal and a 30% weighting on the respective revenue goal. Achievement of less than 75% of the consolidated operating profit and less than 90% of the revenue goals would result in no award being earned with respect to that metric. Achievement of the target goals would result in an 80% payment of the target bonus levels with respect to that metric. Achievement of over 100% to 112.5% of the consolidated operating profit goal and achievement of over 100% to 112.5% of the revenue goal would result in an award ranging from 81% to 100% of the target award with respect to the metric for which such performance levels had been achieved. Achievement of over 112.5% to 150% of the consolidated operating profit goal and over 112.5% to 125% of the revenue goal would result in an award ranging from 101% to 120% of the target award with respect to the metric for which such performance levels had been achieved. Our named executive officers were eligible for a partial award if one of the two metrics was achieved.

 

Based on our 2022 financial performance, Messrs. Popielec, Fain and Manna earned STIP awards for 2022 of $85,631, $36,362, and $31,283, respectively, which were paid in April 2023. In addition, at the recommendation of the Compensation and Management Committee, the Board of Directors approved discretionary bonuses of $30,000 and $20,000 for Mr. Popielec and Mr. Fain, respectively, which were paid in February 2022 for their roles in the 2021 acquisition and integration of Excell Battery Group.

 

 

Stock options and other equity awards are used to align the interests of our named executive officers with those of our stockholders by incentivizing our named executive officers to achieve long-term growth and sustainable stockholder value.

 

Refer to “Outstanding Equity Awards” below for stock options granted during 2023 and 2022. There were no other equity-based awards granted to our named executive officers during 2023 and 2022.

 

 

We provide a tax-qualified 401(k) plan to all active employees that provides for both employer and employee contributions. Under this plan, employees may contribute a portion of their eligible cash compensation to the plan. For 2023 and 2022, the Company matched 100% on the first 3% and 50% on the next 2% of an employee’s eligible contributions.

 

 

We provide our named executive officers with certain perquisites and other personal benefits which are consistent with the objectives of our overall compensation program to better enable us to attract and retain superior employees for key positions. The Compensation and Management Committee periodically reviews the levels of such perquisites and other personal benefits to ensure they remain at appropriate levels. The aggregate incremental costs of the perquisites and other personal benefits provided to our named executive officers are included in the “All Other Compensation” column of the Summary Compensation Table above with components detailed in an accompanying note.

 

 

 

The following table sets forth information concerning the number of shares underlying exercisable and non-exercisable stock option awards outstanding at December 31, 2023 for our named executive officers.

 

										Equity Incentive
										Plan Awards:
		Number of				Number of				Number of
		Securities				Securities				Securities
		Underlying				Underlying				Underlying
		Unexercised				Unexercised				Unexercised				Option			Option
		Options (#)				Options (#)				Options (#)				Exercise			Expiration
Name		Exercisable				Unexercisable				Unearned				Price ($)			Date
Michael E. Manna			8,500				-				-				9.8514		4/18/2025
			10,000				-				-				8.2523		7/23/2026
			10,000				-				-				8.4476		9/6/2026
			11,000				-				-				6.5062		4/22/2027
			8,334				4,166(1)				-				6.9694		10/20/2028
			4,167				8,333(2)				-				5.4533		10/19/2029
			-				12,500(3)								4.0737		2/21/2030
			-				23,000(4)								6.8354		12/7/2030
Philip A. Fain			20,000				-				-				5.7075		4/19/2024
			20,000				-				-				9.8514		4/18/2025
			25,000				-				-				8.2523		7/23/2026
			20,000				-				-				6.5062		4/22/2027
			13,334				6,666(5)				-				6.9694		10/20/2028
			6,667				13,333(6)				-				5.4533		10/19/2029
			-				18,400(7)								6.8354		12/7/2030

 

 

 

 

 

 

 

 

There were no other equity awards outstanding at December 31, 2023 for our named executive officers.

 

 

The following table sets forth information concerning the exercise of stock option awards for the year ended December 31, 2023 for our named executive officers.

 

 

 

 

 

 

 

 

As of December 31, 2022, we had an Employment Agreement dated December 6, 2010 with Michael D. Popielec (the “Employment Agreement”), our former President and Chief Executive Officer. Under the terms of the Employment Agreement, Mr. Popielec was given sixty days advance notice of his involuntary termination by the Company’s Board of Directors on November 22, 2022, at which time he relinquished his position as President and Chief Executive Officer and as a member of the Board of Directors, with his employment ending on January 20, 2023.

 

In connection with the termination of his employment, Mr. Popielec was entitled to receive the following severance benefits under the terms of the Employment Agreement with the total cost of approximately $779,000 comprising a one-time charge reflected in the Company’s 2022 fourth quarter results:

 

 

 

 

 

 

The foregoing description of the termination benefits provided by Mr. Popielec’s Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed as Exhibit 10.40 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 15, 2011.

 

There are no employment agreements in place for Mr. Manna or for Mr. Fain. Mr. Manna and Mr. Fain have executed Employee Confidentiality Non-Disclosure, Non-Compete, Non-Disparagement and Assignment Agreement in our standard form.

 

 

The only arrangement that we maintain that provides for retirement benefits is our tax-qualified defined contribution 401(k) plan. The material terms of our tax-qualified defined contribution 401(k) plan are summarized above under the heading “Retirement Benefits.”         

 

All potential payments and benefits payable by us to our named executive officers in the event of various circumstances involving either a termination of employment or change in control are determined pursuant to the 2014 LTIP. On June 18, 2018, the Compensation and Management Committee unanimously approved a resolution for full vesting of all outstanding unvested stock options and other equity awards upon the occurrence of a “Change in Control” (as defined by the 2014 LTIP). On October 18, 2018, the Compensation and Management Committee unanimously approved a modification to the retirement policy whereby a named executive officer upon retirement and signing the Company’s non-compete agreement and fully complying with the same will retain any and all unexpired stock options until the relevant option term has expired.

 

 

To better align the interests of our named executive officers and stockholders, the Compensation and Management Committee implemented stock ownership requirements for our named executive officers. The stock ownership requirements for our named executive officers are as follows:

 

 

For 2023, the Compensation and Management Committee established the presumed share price to be used for purposes of determining the minimum number of shares to be owned by the named executive officers. This presumed price was $7.32 per share, which was based on the volume weighted average price (“VWAP”), calculated as an amount equal to the sum of the dollar value of every transaction in our common stock for the two-year period ended December 31, 2023, divided by the total shares traded for such two-year period. Each year the Compensation and Management Committee will establish a new price per share to be used to determine the minimum number of shares required to be held which will be based on the VWAP of our common stock for the preceding two-year period. Named executive officers have three years from the date of hire or appointment as a named executive officer to achieve the required holdings, which are based on the price per share as calculated above. Additionally, our stock ownership policy requires that until the share ownership guidelines are met, named executive officers are prohibited from disposing of more than 50% of vested shares received from restricted share grants (on an after-tax basis) and 50% of shares received on exercise of stock options. Shares owned by an executive, as well as shares underlying awards of stock options and restricted stock are treated as owned by the executive for purposes of determining whether required ownership has been achieved. Mr. Fain is in compliance with the stock ownership requirement, and Mr. Manna has until November 21, 2024 to meet the share ownership guidelines.

 

 

ITEM 12.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

 

 

The table below shows certain information regarding the beneficial ownership of shares of our common stock by each person known by us to beneficially own more than five percent of the outstanding shares of our common stock, with percentages based on 16,466,594 shares issued and outstanding as of April 22, 2024.

 

 

 

 

 

 

 

 

The table below shows certain information regarding the beneficial ownership of shares of our common stock as of April 22, 2024 by (1) each of our directors, (2) each of our executive officers, and (3) all of our directors and executive officers as a group.

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes compensation plans under which our equity securities are authorized for issuance as of December 31, 2023.

 

 

 

ITEM 13.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

 

We have adopted written policies and procedures for the review and approval or ratification of any “related party transaction,” as defined by Regulation S-K, Item 404. The policy provides that each related party transaction must be reviewed by our Audit and Finance Committee. The Audit and Finance Committee reviews the relevant facts and circumstances of the transaction, including if the transaction is on terms comparable to those that could be obtained in arms-length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, taking into account the conflicts of interest and corporate opportunity provisions of our Code of Ethics, and either recommends that the Board of Directors approve or disapprove the related party transaction. We will disclose all related party transactions, as required, in our filings with the SEC. No reportable transactions occurred during 2023 and 2022, and there are currently no such proposed transactions.

 

 

Refer to the Corporate Governance section of Part III, Item 10 of this Amendment No. 1.

 

 

ITEM 14.         PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The firm of Freed Maxick CPAs P.C. served as our independent registered public accounting firm for the years ended December 31, 2023 and 2022.

 

 

Aggregate fees for professional services rendered for us for 2023 and 2022 were:

 

 

 

 

Audit fees were for professional services rendered for the audits of our consolidated financial statements and reviews of our quarterly consolidated financial statements.

 

 

Audit-related fees were for the annual audits of our 401(k) defined contribution plan.

 

 

Tax fees were attributable to the amalgamation/restructuring of our legal entity structure for Excell Battery Group in 2022.

 

Our Audit and Finance Committee has not adopted pre-approval policies and procedures for audit and non-audit services. Nevertheless, all audit, audit-related and permitted non-audit services for which our independent registered public accounting firm was engaged were reviewed and approved prior to the commencement of the services by our Audit and Finance Committee in compliance with applicable SEC requirements.

 

 

There were no other services rendered to us by Freed Maxick for 2023 and 2022 and accordingly no other fees were incurred.

 

 

 

 

 

 

No financial statements or supplemental data are filed with this Amendment No. 1 to our Form 10-K filed for the year ended December 31, 2023 on March 21, 2024 (“2023 Form 10-K”). All such financial statements and supplemental data were previously filed with the 2023 Form 10-K.

 

Auditor information:

PCAOB ID 317

 

 

See the Exhibit Index below.

 

 

 

 

 

 

* Confidential treatment has been granted as to certain portions of this exhibit.

 

† Management contract or compensatory plan or arrangement.

 

 

 

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.

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.