Exhibit 10.3
 
Notice of Award of Conditional Restricted Stock Units
Ultralife Corporation (the “Company”)--Tax ID: 16-1387013

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Michael D. Popielec (“Grantee”)   RSU Grant Number: 0001
6741 Falcons Point
Victor, NY 14564
   

 

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RSU Grant Number: 0001
 
Plan: 
July 26, 2004, Stockholder Approval June 10, 2004;
as amended January 29, 2013, Stockholder Approval
June 4, 2013 (the “Plan”)

 

 
Effective January 29, 2013, you have been granted an award of One Hundred Twenty
Thousand (120,000) Conditional Restricted Stock Units of Ultralife (the “Award”)
at the price and on the terms and conditions stated in the attached Restricted
Stock Unit Agreement (the “Agreement”).

This Award shall vest as follows:

(a) Thirty thousand (30,000) shares of the Company’s common stock (the “Stock”)
shall vest on the later of January 1, 2014 or the date when the Stock first
reaches a closing price of $4.00 per share for fifteen (15) trading days in a
thirty (30) trading-day period;
(b) Thirty thousand (30,000) shares of Stock shall vest on the later of  January
1, 2014 or the date when the Stock first reaches a closing price of $5.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period;
(c) Thirty thousand (30,000) shares of Stock shall vest on the later of  January
1, 2015 or the date when the Stock first reaches a closing price of $4.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period; and
(d) Thirty thousand (30,000) shares of Stock shall vest on the later of January
1, 2015 or the date when the Stock first reaches a closing price of $5.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period.

Further, the provisions of Sections 6(b)(iii), 6(c)(iii), 6(d)(ii) and 6(f)(ii)
of Grantee’s Employment Agreement dated December 6, 2010, by and between the
Grantee and the Company (“Grantee’s Employment Agreement”) shall be applicable
to the Award and are incorporated herein by reference.  In the event of any
conflict between or among the provisions of the foregoing sections of Grantee’s
Employment Agreement and the Plan, and/or this Agreement, the provisions of
Grantee’s Employment Agreement shall prevail.
 
 
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By your signature and the Company’s signature below, you and the Company agree
that, except as specifically provided above with respect to certain provisions
of the Grantee’s Employment Agreement, this Award is granted under and governed
by the terms and conditions of the Plan and the Agreement, and is subject to
stockholder approval of amendment of the Plan.

 

/s/ Philip A. Fain   June 4, 2013 Ultralife Corporation   Date             /s/
Michael D. Popielec   June 6, 2013 Michael D. Popielec   Date      

 

 
 
 
 
 
 
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ULTRALIFE CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
 
This Restricted Stock Unit Agreement, dated June 4, 2013 (this “Agreement”), is
made by and between Ultralife Corporation, a Delaware corporation (the
“Company”), and Michael D. Popielec, the President and Chief Executive Officer
of the Company (the “Grantee”)(Company and Grantee, each a “Party,” and
together, the “Parties”).
 
WHEREAS, the Board of Directors of the Company (the “Board”) on July 26, 2004,
adopted, and the stockholders of the Company in a Consent of Stockholders dated
June 10, 2004 approved, the Company’s 2004 Amended and Restated Long-Term
Incentive Plan (the “Plan”), and
 
WHEREAS, on January 29, 2013, subject to subsequent stockholder approval, the
Board approved an amendment to the Plan to (a) authorize the issuance of awards
of Restricted Stock Units; (b) increase from 200,000 to 800,000, the limitation
under the Plan on the number of shares of the Company’s common stock (the
“Stock”) that may be used for awards other than stock options or stock
appreciation rights; and (c) increase from 50,000 to 150,000, the limitation
under the Plan on the number of shares of Stock that may be awarded to an
individual during a calendar year (collectively, the “Amendment”); and
 
WHEREAS, the Board, as provided in the Plan, considers the Grantee to be an
eligible person as contemplated by the Plan and has determined that it would be
in the best interests of the Company to grant this award of Restricted Stock
Units;
 
NOW, THEREFORE, the Parties hereto, intending to be legally bound hereby, agree
as follows:
 
1.  
Grant of Conditional Restricted Stock Units.

 
Subject to the terms and conditions of the Plan and this Agreement, the Company
hereby grants to the Grantee an award of Restricted Stock Units with respect to
120,000 shares of Stock (the “Award”). The grant of the Award under this
Agreement is conditioned upon the approval of the Amendment by the stockholders
of the Company on or before December 31, 2013. The Grantee has no right to
receive shares of Stock pursuant to this Agreement prior to such approvals or
consents. This Agreement shall be automatically cancelled and shall immediately
become null and void if the foregoing conditions are not fulfilled by December
31, 2013.
 
2.  
Vesting and Termination.

 
Except as otherwise provided by Section 3(c) and subject to the certification of
the achievement of the applicable Stock performance requirements by the
Compensation and Management Committee of the Board (the “Compensation
Committee”) before shares are issued, this Award shall vest as follows:
 
 
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(a) Thirty thousand (30,000) shares of Stock shall vest on the later of  January
1, 2014 or the date when the Stock first reaches a closing price of $4.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period;

(b) Thirty thousand (30,000) shares of Stock shall vest on the later of  January
1, 2014 or the date when the Stock first reaches a closing price of $5.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period;

(c) Thirty thousand (30,000) shares of Stock shall vest on the later of  January
1, 2015 or the date when the Stock first reaches a closing price of $4.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period; and

(d) Thirty thousand (30,000) shares of Stock shall vest on the later of January
1, 2015 or the date when the Stock first reaches a closing price of $5.00 per
share for fifteen (15) trading days in a thirty (30) trading-day period.

This Award and the Restricted Stock Units thereunder shall terminate and become
null and void to the extent not previously vested as of December 30, 2020 of the
date of grant of the Award.

3.  
Restrictions.

(a) The restrictions set forth in this Section 3 shall apply to the Award until
the Compensation Committee certifies the achievement of the applicable Stock
performance goals and the Restricted Stock Units vest.  The Grantee shall not
have a beneficial ownership interest in, or any of the rights and privileges of
a stockholder as to, the Restricted Stock Units, including the right to receive
dividends and the right to vote the shares of Stock to be issued upon the
vesting and payment of the Restricted Stock Units until such Restricted Stock
Units vest and shares of Stock are issued and transferred to the Grantee in
accordance with the terms of this Agreement.

(b) An account established by the Company on behalf of the Grantee shall be
credited with the amount of any dividends that would have been paid on the
shares of Stock to be issued upon vesting and payment of the Restricted Stock
Units as if such shares were actually held by the Grantee (“Dividend
Equivalents”).   Such Dividend Equivalents shall be subject to the same vesting
conditions applicable to the Restricted Stock Units to which they relate, and
upon the vesting of a share of Restricted Stock Units, the Dividend Equivalents
related to such share shall be paid to the Grantee in cash, without earnings
thereon.   Notwithstanding the foregoing, the Grantee shall not be entitled to
delivery of the shares of Stock underlying the Restricted Stock Units or to the
Dividend Equivalents related to such shares until the Restricted Stock Units
have vested and the shares of Stock have been issued.   The Restricted Stock
Units may not be sold, transferred, assigned, pledged, or otherwise encumbered
or disposed of until vested; all of the unvested Restricted Stock Units shall be
forfeited and all rights of the Grantee to such unvested Restricted Stock Units
shall terminate without further obligation on the part of the Company under the
circumstances set forth in Section 3(c).

 
 
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(c)            (i)        Required Employment.  Except as set forth in this
Section 3(c), in order to earn and vest the Restricted Stock Units, the Grantee
must at the time of vesting remain employed as an active, regular, full-time
employee of the Company through the applicable vesting date.

(ii) Termination without Business Reasons or Constructive Termination.  In the
event that the Grantee is Terminated without Business Reasons or incurs a
Constructive Termination, the Grantee is entitled to the vesting and payment of
all or any portion of the Restricted Stock Units in accordance with the
provisions of Section13 below.

(iii) Termination without Business Reasons or a Constructive Termination within
one year following a Change in Control. In the event of a Termination without
Business Reasons or a Constructive Termination within one year following a
Change in Control, all unvested Restricted Stock Units shall immediately vest
and be paid to the Grantee in accordance with the provisions of Section 13
below.

(iv) Termination Due to Disability.  In the event that the Grantee is Terminated
due to Disability, the Grantee is entitled to the vesting and payment of all or
any portion of the Restricted Stock Units in accordance with the provisions of
Section 13 below.

(v) Voluntary Termination or Involuntary Termination for Business Reasons. In
the event of a Voluntary Termination of the Grantee or an Involuntary
Termination of the Grantee for Business Reasons, unvested Restricted Stock Units
shall automatically be terminated as of the date of such Termination.

(vi) Death.     In the event of the death of the Grantee, the beneficiaries or
heirs of the Grantee shall be entitled to receive all or any portion of the
Restricted Stock Units in accordance with the provisions of Section 13 below.

(vii) Definitions.  For purposes of this Section 3(c),  “Termination without
Business Reasons,” “Constructive Termination,” “Change in Control,”
“Disability,” “Voluntary Termination” and “Involuntary Termination for  Business
Reasons” shall each have the meaning given such terms in the Employment
Agreement dated December 6, 2010, by and between the Grantee and the Company
(“Grantee’s Employment Agreement”).  “Termination” and words of similar import
shall mean a separation of service within the meaning given such term by Section
409A (as hereafter defined).

4.  
Payment of Restricted Stock Units.

 
On each vesting date applicable to the Restricted Stock Units, all restrictions
applicable to the Restricted Stock Units vesting on that date shall lapse and a
stock certificate for a number of shares of Stock equal to the number of vested
shares, free of all restrictions, shall be issued or delivered to the Grantee as
soon as administratively feasible thereafter, but no later than 90 days
thereafter or the end of the calendar year in which the Restricted Stock Units
vest.  The Company shall not be required to deliver any fractional share of
Stock but shall pay in cash, in lieu thereof, the fair market value (measured as
of the vesting date) of such fractional share to the Grantee.
 
 
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5.  
Regulatory Approvals and Listing.

 
(a) The obligation of the Company to deliver Stock shall be subject to the
condition that if at any time the Board shall determine in its  discretion that
the listing, registration or qualification of the Stock upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the Restricted Stock Units or the issue of shares of Stock
thereunder, the Company shall not be required to deliver such shares of Stock
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Board.  The issuance of shares of Stock to the Grantee pursuant to the vesting
of Restricted Stock Units is subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof.

(b) Before the Company issues shares of Stock to the Grantee pursuant to the
vesting of any Restricted Stock Units, the Company shall have the right to
require that the Grantee make such provision, or furnish the Company such
authorization, necessary or desirable so that the Company may satisfy its
obligation, under applicable income tax laws, to withhold for income or other
taxes due upon or incident to such vesting and payment.  The Grantee may
elect  (hereinafter a “Withholding Election”) with respect to the vesting of
Restricted Stock Units either:  (i) to have the Company withhold, from the Stock
to be issued pursuant to such vesting and payment, such number of such shares of
Stock which, or (ii) to surrender to the Company such number of shares of Stock
already owned  by the Grantee (which may be shares of Stock received upon such
vesting and payment) which, at their Fair Market Value on the date as of which
the payment of the Restricted Stock Units is taxable for federal income tax
purposes (the “Tax Date”), shall be sufficient to satisfy the Company’s minimum
withholding obligation with respect to the vesting and payment of the Award.

(c) If the Fair Market Value on the Tax Date of the number of shares of Stock
required to be withheld or surrendered pursuant to a Withholding Election
exceeds the Company’s minimum withholding obligation with respect to the
payment, a fractional share of Stock shall not be issued for the excess, but an
amount equal to the excess shall be paid to the Grantee by the Company in cash
as soon as reasonably practicable after the amount of such excess is determined
by the Company. A Withholding Election may be made applicable with respect to a
particular vesting and payment of Restricted Stock Units, to all previously
granted awards of Restricted Stock Unit, or to all awards of Restricted Stock
Units to be granted in the future. A Withholding Election by an individual who
is not subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), may be made continuing until revoked by such
person. For persons who are subject to Section 16(b) of the Exchange Act, any
such Withholding Election and any Award of Restricted Stock Units to which the
Withholding Election applies also shall meet the following requirements:

(1) The Withholding Election, once made, shall be irrevocable.

(2) The Withholding Election must be made either (A) during one of the ten-day
periods beginning on the third business day following the date of release of the
 
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Company’s quarterly and annual summary statements of sales and earnings and
ending on the twelfth business day following such date, or (B) at least six
months prior to the Tax Date for the Restricted Stock Unit vesting and payment
to which such Withholding Election applies.
 
(3) The Withholding Election may not be implemented until at least six months
after the date of grant of the Restricted Stock Units to which the Withholding
Election applies.

(4) The Board shall have sole discretion to consent to or disapprove any
Withholding Election made by such an individual who is an employee, and if the
Board disapproves such a Withholding Election, shares of Stock shall not be
issued to the Grantee upon the vesting and payment of any Restricted Stock Units
to which the disapproved Withholding Election applies until the Grantee shall
have complied with the requirements, if any, which the Board may have adopted
pursuant to the first sentence of this paragraph for satisfying the withholding
obligation with respect to such vesting and payment. The Board by resolution may
approve in advance all Withholding Elections made by individuals subject to
Section 16(b) of the Exchange Act who are employees, provided the resolution
expressly reserves to the Board the right both to disapprove any such
Withholding Election and to revoke its advance approval.

(5) The Board may adopt such rules, forms and procedures as it considers
necessary or desirable to implement an employee’s Withholding Election, which
rules, forms and procedures shall be binding upon all employees, and which shall
be applied uniformly to all employees similarly situated.

6.  
Grantee’s Securities Law Representations.

 
The Grantee hereby represents and warrants to the Company: (a) that the Stock
subject to the Award is being acquired for purposes of investment and not with a
view to distribution thereof; (b) that if the Grantee is or becomes an affiliate
of the Company (as defined in regulations promulgated by the Securities and
Exchange Commission) prior to the time of any proposed resale of shares acquired
upon the vesting and payment of the Restricted Stock Units, or if such shares
are not registered under the Securities Act of 1933, as amended (the “Securities
Act”), the Grantee will comply with all applicable conditions of the Securities
Act and the rules and regulations promulgated thereunder in effecting such
resale; and (c) that the Grantee shall not dispose of any shares of such Stock
in any manner that is, or may involve the Company in, a violation of any federal
or state securities law, including the Securities Act. The Board may require
that the share certificates be inscribed with a legend restricting transfer in
accordance with applicable securities law requirements.

7.  
Consent to Transfer Personal Data.

 
By accepting this Award, the Grantee voluntarily acknowledges and consents to
the collection, use, processing and transfer of personal data as described in
this Section.  The Grantee is not obliged to consent to such collection, use,
processing and transfer of personal data, however, failure to provide the
consent may affect the Grantee’s ability to participate in the Plan.  The
Company holds certain personal information about the Grantee, that may include
his name, home address and telephone number, date of birth, social
 
 
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security number or other employee identification number, salary grade, hire
data, salary, nationality, job title, any shares of Stock held in the Company,
or details of all awards of stock options and Restricted Stock Units, or any
other entitlement to shares of Stock awarded, canceled, purchased, vested, or
unvested, for the purpose of managing and administering the Plan (the
“Data”).  The Company may transfer the Data to any third parties assisting the
Company in the implementation, administration and management of the Plan as
necessary for such implementation, administration and management of the
Grantee’s participation in the Plan. These recipients of the Data may be located
throughout the world, including the United States.  The Grantee authorizes them
to receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing the Grantee’s
participation in the Plan, including any requisite transfer of such Data as may
be required for the administration of the Plan or the subsequent holding of
shares of Stock on the Grantee’s behalf to a broker or other third party with
whom the Grantee may elect to deposit any shares of Stock acquired pursuant to
the Plan.  The Grantee may, at any time, review the Data, require any necessary
amendments to it or withdraw the consents herein in writing by contacting the
Company; however, withdrawing consent may affect the Grantee’s ability to
participate in the Plan.
 
8.  
Adjustment Upon Changes in Capitalization.

 
In the event of any change in the number or class of shares of Stock
outstanding, by reason of a stock dividend, stock split, subdivision or
combination of shares, a merger or consolidation in which the Company is the
surviving corporation, or any other change in capitalization, the number and
class of shares of Stock subject to the Award shall be adjusted by the Board in
any manner in which the Board, in its absolute discretion, deems appropriate.
 
9.  
No Rights of Shareholder.

 
Neither the Grantee nor any personal representative shall be, or have any of the
rights and privileges of, a shareholder of the Company with respect to any
shares payable upon the vesting of the Restricted Stock Units, in whole or in
part, prior to the payment of such shares of Stock to the Grantee.

10.  
Non-Transferability of Award.

 
During the Grantee’s lifetime, the Award shall only be payable to the Grantee
and neither the Award, nor any right hereunder, shall be transferable except by
will or the laws of decent and distribution, nor shall the Award be subject to
attachment, execution or other similar process.  In the event of any attempt by
the Grantee to alienate, assign, pledge, hypothecate or otherwise encumber or
dispose of the Award or of any right hereunder, except as provided for herein,
or in the event of the levy of any attachment, execution or similar process upon
the rights or interest hereby conferred, the Company may terminate the Award by
notice to the Grantee and it shall thereupon become null and void.

 
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11.  
Employment Not Affected.

 
Neither the granting of the Award nor its vesting and payment shall be construed
as granting to the Grantee any right with respect to continuance of employment
by the Company or any of its subsidiaries. Except as may otherwise be limited by
a written agreement between the Company or any subsidiary and the Grantee, the
right of the Company or any subsidiary to terminate at will, with or without
cause, the Grantee’s employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by the Company and
acknowledged by the Grantee.

12.  
Amendment of Award.

 
The Award may be amended, in whole or in part, by the Board at any time if it
determines, in its sole discretion, that such amendment is necessary or
advisable in the light of any addition to or change in:  (a) the Internal
Revenue Code of 1986, as amended (the “Code”), or the treasury regulations
issued thereunder or (b) any federal or state securities law or other law or
regulation, which change occurs after the grant of the Award and by its terms
retroactively applies to the Award; provided, however, that no such amendment
shall, without the Grantee’s consent, materially adversely affect the Grantee’s
rights in and to the Award.
 
13.  
Incorporation of Certain Provisions of Grantee’s Employment Agreement and the
Plan.

The provisions of Sections 6(b)(iii), 6(c)(iii), 6(d)(ii) and 6(f)(ii) of
Grantee’s Employment Agreement shall be applicable to the Award and are
incorporated herein by reference.  In the event of any conflict between or among
the provisions of the foregoing sections of Grantee’s Employment Agreement and
the Plan, and/or this Agreement, the provisions of Grantee’s Employment
Agreement shall prevail.
 
14.  
Notice.

 
Any notice to the Company provided for in this Agreement shall be addressed to
it in care of its Chief Financial Officer, and any notice to the Grantee shall
be addressed to the Grantee at the current address shown on the payroll records
of the Company or any subsidiary.  Any notice shall be deemed to be duly given
if and when properly addressed and posted by registered or certified mail,
postage prepaid.

15.  
Section 162(m).

The Award is intended to qualify for the exemption to Section 162(m) of the Code
as qualified performance-based compensation, and this Agreement shall be
administered and interpreted consistent with such intention

16.  
Section 409A.

 
The Award is intended to be exempt from or to comply with the requirements of
Section 409A of the Code and the treasury regulations promulgated and other
official guidance issued thereunder (collectively, “Section 409A”), and this
Agreement shall be administered and interpreted consistent with such intention.
 
 
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17.  
Governing Law.

 
The validity, construction, interpretation and effect of this Agreement shall
exclusively be governed by, and determined in accordance with, the laws of the
State of Delaware.
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
 
 

 
ULTRALIFE CORPORATION
                        By:
/s/ Philip A. Fain
      Name:
Philip A. Fain
                       
GRANTEE
                        By:
/s/ Michael D. Popielec
     
Michael D. Popielec
 

 
 
 
 
 

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