SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 ( Amendment No. ) Filed by the registrant [ X ] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ X ] Definitive proxy statement [ ] Definitive additional materials [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SCHEDULE 14A | |
INFORMATION REQUIRED IN PROXY STATEMENT | |
SCHEDULE 14A INFORMATION | |
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 ( Amendment No. ) | |
Filed by the registrant [ X ] | |
Filed by a party other than the registrant [ ] | |
Check the appropriate box: | |
[ ] Preliminary proxy statement | [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[ X ] Definitive proxy statement | |
[ ] Definitive additional materials | |
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 | |
MECHANICAL TECHNOLOGY INCORPORATED | |
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) | |
Payment of filing fee (Check the appropriate box): | |
[ X ] No fee required | |
[ ] Fee computed on table below per Exchange Act rules 14a-6(i)(4) and 0-11. | |
pursuant to Exchange Act rule 0-11: | |
[ ] Fee paid previously with preliminary materials. | |
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | |
| |
MECHANICAL TECHNOLOGY INCORPORATED
__________________________________
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(5) Total fee paid:
______________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing,
(1) Amount previously paid:
______________________________________________________________
(2) Form, schedule or registration statement no.:
______________________________________________________________
(3) Filing party:
______________________________________________________________
(4) Date filed:
______________________________________________________________
MECHANICAL TECHNOLOGY INCORPORATED
968 ALBANY-SHAKER ROAD LATHAM,
30 SOUTH PEARL STREET
ALBANY, NEW YORK 12110
12207
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Mechanical Technology Incorporated will be held at the offices of First Albany Companies Inc., 30 South Pearl Street,Desmond Hotel, Northway Exit 4, 660 Albany-Shaker Road, Albany, New York (directions enclosed),12211 on Wednesday, April 16, 1997,24, 2001, at 10:00 A.M. local time (refreshments will be served at 9:15 A.M.) for the following purposes:
1. Election of Directors.
3. Ratification of the Company to hold office until the next
Annual Meetingappointment of Shareholders of the Company.
2. To vote on the approval of Coopers & LybrandPricewaterhouseCoopers LLP as the auditors of the Company.
3. To consider and transact such
4. Such other business as may properly come before the meeting or any adjournment thereof.
Shareholders of record at the close of business on March 3, 1997,5, 2001 are entitled to notice of and to vote at the meeting or any adjournment.meeting. The Proxy Statement and Annual Report of the Company for the fiscal year ended September 30, 1996,2000 are enclosed.
Whether or not you expect to attend the meeting in person, kindly mark, sign,
date and return the enclosed Proxy in the envelope provided so that your
stock will be represented. Your Proxy is revocable up to the time it is
voted, and you may vote in person at the Annual Meeting even though you have
previously submitted your Proxy.
By Order of the Board of Directors
John Recupero Latham, New York
Secretary March 17, 1997
Catherine S. Hill | Albany, New York |
Secretary | March 19, 2001 |
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO MARK, DATE, SIGN, AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE
MECHANICAL TECHNOLOGY INCORPORATED
968 ALBANY-SHAKER ROAD
LATHAM,
30 SOUTH PEARL STREET
ALBANY, NEW YORK 12110
12207
PROXY STATEMENT
March 17, 1997
This Proxy Statement, first being mailed to shareholders on approximately March 17, 1997,19, 2001, is furnished in connection with the solicitation by the Board of Directors of proxies to be voted at the Annual Meeting of Shareholders of Mechanical Technology Incorporated to be held on April 16, 1997,24, 2001, and at any adjournment thereof.
A proxy is enclosed for usethereof, at the meeting.Desmond Hotel, Northway Exit 4, 660 Albany-Shaker Road, Albany, New York.
The shares represented by properly completed proxies received prior to the vote will be voted FOR 1) the election of directors; 2) ratifying appointment of auditors; and 3) approval of amendment to the Company's Certificate of Incorporation, unless specific instructions to the contrary are given or an abstention from voting is indicated by the shareholder. The proxy may be revoked at any time before it is exercised. If a shareholder specifies in this proxy how it
is to be voted on a matter as to which a choice is indicated, the proxy will
be voted in accordance with such specification. If no specification is made,
the proxy will be voted for the election of the nominees listed therein and
for approval of the auditors.
OUTSTANDING SHARES AND VOTING RIGHTS
All holders of Common Stock of record at the close of business on March 3,
1997, are entitled to notice of and to vote at the Annual Meeting of
Shareholders to be held on April 16, 1997, at the offices of First Albany
Companies Inc., 30 South Pearl Street, Albany, New York.
At the close of business on March 3, 1997,5, 2001 the Company had outstanding 5,899,20135,475,585 shares of Common Stock, which is the only class of securities entitled to vote at the
meeting.Stock. Each share of Common Stock entitles the holder thereof to one vote on the matters to be voted upon by such shareholders. A majority of the outstanding shares, present in person or by proxy, will constitute a quorum at the meeting. Abstentions and broker non-votes are counted for purposes of determining whether a quorum is present but do not affect the outcome of the election. A plurality vote is required for the election of Directors. A vote of the majority of all outstanding shares entitled to vote thereon is necessary to approve the amendment to the Company's Certificate of Incorporation and the affirmative vote of a majority of the votes cast is necessary to approve all other actions. Votes will be tabulated by inspectors of election appointed in accordance with the applicable provisions of the New York Business Corporation Law.
ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders, ninethree Directors are to be elected, each to hold office until the next Annual Meetingexpiration of Shareholdershis or her term and until a successor shall be elected and shall qualify. The Directors serve staggered terms.
Alan Goldberg, Walter Robb and Beno Sternlicht are nominated to serve three-year terms; Dale Church, Edward Dohring and David Eisenhaure are in the first year of three-year terms; George McNamee and Dennis O'Connor are in the second year of three-year terms. Management's nominees for Director,Directors, together with certain information concerning them, are on the following pages. In the event that any of such nominees shall become unavailable for any reason, it is intended that proxies will be voted for substitute nominees designated by management.
The number of shares voted "for" the election of each person nominated for
election as
CERTAIN INFORMATION REGARDING NOMINEES
Mr. Goldberg, 55, a Director as well as the number of shares as to which authoritysince 1996, is withheld from the proxies to vote for any individual nominee or for all of
management's nominees as a group and the number of shares held for customers
by brokers (or their nominees) and represented at the meeting but not voted
with respect to the election of Directors, will be tabulated by inspectors of
election appointed in accordance with the applicable provisions of the New
York Business Corporation Law. The nominees for election as Director
receiving a plurality of the votes which are cast at the meeting with respect
to the election of Directors will be elected. Thus, except that such action
may reduce the number of shares which are voted "for" the election of any
person nominated for election as a Director and may reduce the number of
votes which are cast at the meeting with respect to the election of
Directors, neither a shareholder's withholding of authority from the proxies
to vote his shares for any individual nominee or for all of management's
nominees as a group, nor the failure of brokers to vote, with respect to the
election of Directors, shares held by them (or their nominees) for customers,
will otherwise affect the vote required for the election of Directors; the
nine nominees for election receiving the greatest number of votes will be
elected, without regard to the actual number of shares voted (or not voted)
for each or the total number of votes cast for all nominees.
YEAR FIRST
PRINCIPAL OCCUPATION BECAME A
NAME AGE OR EMPLOYMENT DIRECTOR
- ---------------------- --- ----------------------------- ---------
Dale W. Church 57 Lawyer, Private practice -
R. Wayne Diesel 51 Chief Executive Officr 1994
of the Company
Edward A. Dohring 63 President, SVG Lithography -
Systems, Inc.
Alan P. Goldberg 51 President & Co-Chief Executive 1996
Officer, First Albany Companies, Inc. George C. McNamee 50("FAC") where he has been the President since 1993, Co-Chief Executive Officer since 1994 and a Director since 1985 (see "Securities Ownership of Certain Beneficial Owners", below). He has served as Chairman of the Board of Trustees of the 1996
CompanyAlbany Institute of History and Art, and as Director and Chairman & Co-Chiefof the Center for Economic Growth and Director of the Albany Symphony Orchestra. He serves on the Board of Directors of SatCon Technology Corporation and Beacon Power Corporation.
Dr. Robb, 72, a Director since 1997, has been a management consultant and President of Vantage Management, Inc., since 1993. Prior to that, Dr. Robb was with General Electric Company ("GE") in a number of executive positions. He was Senior Vice President for Corporate Research and Development from 1986 until his retirement on December 31, 1992, directing the GE Research and Development Center, one of the world's largest and most diversified industrial laboratories, and serving on GE's Corporate Executive Officer, First Albany
CompaniesCouncil. He has served on the Board of Directors of Plug Power Inc.
Martin J. Mastroianni 52 President, since its formation in 1997, and Chief Operating -
Officeris a Director of Cree Inc., Celgene Inc., and a number of privately owned companies.
Dr. Sternlicht, 71, a Director since 1996 and a co-founder of the Company, E. Dennis O'Connor 57 Director-New Products and 1993
Technology, Masco Corporation
Dr. Walter L. Robb 68has been President Vantage Management, -
Inc.
Dr. Beno Sternlicht 69 President,of Benjosh 1996 Management Corporation, a management firm in New York City, since 1976; President of AMEAST Corporation, a consulting and trading corporation, since 1976; and President of Arben International,LLC, a distribution and manufacturing firm for products for the furniture industry, with offices in Moscow and New York City, since 1994. He has also served as Chairman of the Board of Comfortex Corp., a window shade designer and manufacturer, from 1992 until its sale to Hunter Douglas in 1999, and currently serves as stockholder representative to the Board of Directors. Dr. Sternlicht was a Director of the Company from 1961 to 1992, and prior to 1985 held a number of positions with the Company. At the time of his departure from the Company in 1985, he served as Technical Director and Vice Chairman of the Board of Directors. Dr. Sternlicht was one of the founders of VITA Volunteers in Technical Assistance, and has served on various advisory committees of NASA, DOE and the Commerce Department under Presidents Carter, Reagan and Bush, and served as an Advisor on Energy to the People's Republic of China, Israel and India.
Management recommends that you vote FOR election of the three nominees listed above as Directors of the Company.
CERTAIN INFORMATION REGARDING NOMINEES
INCUMBENT DIRECTORS
Mr. Church, 62, a Director since 1997, has practiced law in private practice, government, and corporate environments for over 30 years with specialties in U.S. and international government contracting, developing companies, mergers and acquisitions, and joint ventures. He currently serveshas been the Chief Executive Officer of Ventures & Solutions LLC since 1996 and the Chairman and CEO of the Intelligent Inspection Corporation since 1999, and,
prior to that time, was a partner in the law firm of McDermott, Will & Emery from 1993 to 1997. He served as General Counsel to the American
Electronic
Electronics Association a Trustee of the National Security Industrial
Association, and as a director on various private corporations.from 1994 to 1998. His previous experience includes
CERTAIN INFORMATION REGARDING INCUMBENT DIRECTORS (Continued)
working for the U.S. government'sGovernment's Central Intelligence Agency and Department of Defense and as corporate counsel to establish several companies in the "Silicon Valley"Silicon Valley of California. He is a Trustee of the National Security Industrial Association and is a director of various private corporations.
Mr. Diesel was elected Chief Executive OfficerDohring, 67, a Director since 1997, became President of MTI Instruments, Inc., a majority-owned subsidiary of the Company, in February
1994 and prior to December 1996 also held the title of President. From
September 1991 to February 1994, he held various management positions with
Lawrence Group, Inc. and Lawrence Insurance Group, Inc.("LIG"), and was a
director of LIG until March 1996 (see "Securities Ownership of Certain
Beneficial Owners" in the section entitled "Additional Information", below);
since March 1996, Mr. Diesel has had no affiliation with Lawrence Group, Inc.
or any related company. He previously held senior management positions with
KeyCorp and the State of New York. Following his election as President and
Chief Executive Officer of the Company in February 1994, Mr. Diesel was also
elected Chairman of the Board and Chief Executive Officer of the
Corporation's United Telecontrol Electronics, Inc. subsidiary ("UTE");
shortly thereafter, UTE filed for bankruptcy and was liquidated as a result
of events that occurred prior to Mr. Diesel's relationship with the Company
or with UTE.on April 1, 2000. Mr. Dohring has been Vice President ofretired December 31, 1998 from Silicon Valley Group, Inc. ("SVG"), Inc. where he had been Vice President since July 1992 and President of its SVG Lithography Systems, Inc. ("SVGL") unit since October 1994. From June 1992 to October 1994, he served as President of SVG's Track Systems Division. He joined SVG from Rochester Instrument Systems, Inc., where he served as President from April 1989 to June 1992. He has also held management positions with General Signal, CVC Products, Bendix, Bell & Howell and Veeco Instruments. Mr. Goldberg is the President & Co-Chief Executive Officer and a Director of
First Albany Companies Inc. ("FAC", see "Securities Ownership of Certain
Beneficial Owners" in the section entitled "Additional Information", below).
He is Chairman of the Board of Trustees of the Albany Institute of History
and Art, Chairman of the Albany-Colonie Chamber of Commerce and a Director of
the Center for Economic Growth and the Albany Symphony Orchestra.
Mr. McNamee, Chairman of the Company's Board of Directors, is the Chairman &
Co-Chief Executive Officer and a Director of FAC (see "Securities Ownership
of Certain Beneficial Owners" in the section entitled "Additional
Information", below). Mr. McNamee is a member of the Board Directors of
MapInfo Corporation, The Meta Group, Inc., and Internet Shopping Network,
Inc. He also serves on the Board Directors of the New York State Science and
Technology Foundation, and is Chairman of the Regional Firms Advisory
Committee to the Board of the New York Stock Exchange.
Mr. Mastroianni was elected President and Chief Operating Officer of the
Company in December 1996. Prior to joining the Company, he served most
recently as Director, Transmission Power Delivery for the Electric Power
Research Institute (EPRI) where he was employed since 1992. Previously, from
1973 to 1992, he held senior management positions in the technology driven
test and measurement industries with Vacuum Components, Inc., Tenney
Engineering, Inland Vacuum Industries, Halocarbon Products, Inc., and Allied
Signal Corporation.
Mr. O'Connor has been the Director of New Products and Technology for Masco
Corporation, Taylor, Michigan, a diversified manufacturer of building and
home improvement, and other specialty products for the home and family, since
April 1984. He is a member of the Board of Directors of many companies including Tropel Corporation and Tegal Corporation, and has served as a director of Semiconductor Equipment & Materials International (SEMI) and International Disc Equipment Manufacturers Association (IDEMA). He currently serves on the Inventor's
CouncilState University of Michigan,New York Maritime College Board of Directors and is a Michigan non-profit corporation.trustee of the College.
Mr. Eisenhaure, 55, a Director since 2000, has served as President, Chief Executive Officer and Chairman of the Board of Directors of SatCon Technology Corporation ("SatCon") since 1985. Prior to founding SatCon, Mr. Eisenhaure was associated with the Charles Stark Draper Laboratory, Incorporated from 1974 to 1985, and with its predecessor, the Massachusetts Institute of Technology's Instrumentation Laboratory, from 1967 to 1974. In addition to his duties at SatCon, Mr. Eisenhaure holds an academic position at the Massachusetts Institute of Technology serving as a lecturer in the Department of Mechanical Engineering. He also serves on the Board of Directors of Beacon Power Corporation. Mr. Eisenhaure became a Director of the Company when he was selected by SatCon as its designee on the Company's Board of Directors pursuant to the agreements entered into in connection with the October 1999 transactions between SatCon and the Company whereby the Company sold its subsidiary, Ling Electronics, to SatCon and agreed to invest approximately $7 million in SatCon.
Mr. McNamee, 54, a Director and Chairman of the Company's Board since 1996, and Chief Executive Officer since April 1998. Mr. McNamee is and has been the Chairman of the Board of FAC since 1985 and its Co-Chief Executive Officer since 1994 (see "Securities Ownership of Certain Beneficial Owners", below). Mr. McNamee also serves as Chairman of the Board of Plug Power Inc., a position he has held since Plug Power was formed in 1997. He is a member of the Board of Directors of MapInfo Corporation and The Company
understands that Meta Group, Inc. He is on the Board of Directors of the New York Stock Exchange, and the New York Conservation Education Fund.
Mr. O'Connor, 61, a Director since 1993, is a registered patent attorney and from 1984 until his retirement in June 2000, was the Director of New
Products and Technology for Masco Corporation, a diversified manufacturer
CERTAIN INFORMATION REGARDING INCUMBENT DIRECTORS(Continued)
of building, home improvement, and other specialty products for the home
and family. He is a director of various private corporations. Mr. O'Connor originally became a Director of the Company when he was selected by Masco Corporation as its designee on the Company's Board of Directors pursuant to agreements entered into in connection with the 1992 transaction byin which Masco sold 1,730,000 shares of the Company's Commoncommon Stock to subsidiaries of the Lawrence Insurance Group, Inc. (see "Security Ownership, a former majority shareholder of Certain Beneficial Owners"
in the section entitled "Additional Information", below); theCompany. The Lawrence Insurance Group, Inc. subsidiaries agreed to vote their shares to elect a designee of Masco to the Company's Board of
Directors so long as Masco remainsremained liable under a guarantee it had executed in connection with the Company's obligations under a line of credit.
Dr. Robb, now a management consultant and President of Vantage Management,
Inc., was until December 31, 1992 General Electric Company's("GE") Senior
Vice President for corporate research and development. He directed the GE
Research and Development Center, one of the world's largest and most
diversified industrial laboratories, and served on GE's Corporate Executive
Council. He servesThis Agreement with Masco terminated when Mr. Lawrence sold his shares to FAC in 1996. Masco remained obligated on the Board of Directors of Marquette Electronics, Cree
Research, Celgene, and Neopath. He also serves on the Advisory Council of the
Critical Technology Institute and on the Council of the National Academy of
Engineering.
Dr. Sternlicht, one of the founders ofguarantee until October 15, 1998 when the Company has been Presidentreplaced its then existing line of Benjosh Management Corporation,credit with a management firm in New York, New York,
since 1976. He previously served as a Directorline of the Companycredit from 1961 to
1992. Prior to 1985, he had held a number of positions with the Company. At
the time of his departure he served as Vice Chairman of the Board of
Directors and Technical Director.
Management recommends that you vote FOR election of the nine nominees listed
above as Directors of the Company.
KeyBank, N.A.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although
it is not involved in day-to-day operating details. Members of the Board are
kept informed of the Company's business by various reports sent to them, as
well as by operating and financial reports made at Board and Committee
meetings by the officers of the Company.
The Board of Directors held eighteleven (11) meetings during fiscal 1996.2000. All Directorsdirectors attended at least 75% of all meetings of the Board and of all Board committees on which they serve,meetings held during fiscal 1996.
2000.
The Company does not have a standing nominating committee or a committee performing similar functions.
The Audit Committee consists of Messrs. O'Connor, Church and Goldberg, each of whom is independent, as defined by the applicable listing standards of the National Association of Securities Dealers. The Audit Committee was established for the purposes of (i) recommending the selection of the Company's independent auditors; (ii) reviewing the effectiveness of the Company's accounting policies and practices, financial reporting and internal controls; (iii) reviewing any transactions that involve a potential conflict of interest; (iv) reviewing the scope of independent audit coverages and the fees charged by the independent accountants; and (v) reviewing the independence of such accountants from the Company's management. The Audit Committee also reviews other matters with respect to its accounting, auditing and financial reporting practices and procedures as it may find appropriate or may be brought to its attention. The Audit Committee met one time during fiscal 2000. On March 30, 2000, the Board of Directors has established Audit, Compensation and
Nominating Committees. Theadopted a written charter for the Audit Committee, (consistinga copy of Messrs. Landgraf,
O'Connor,which is attached as EXHIBIT 2 to this Proxy Statement.
Mr. Goldberg and Sternlicht) reviews withDr. Sternlicht serve as the independent auditors the plan and
resultsmembers of the auditing engagement includingCompany's Compensation Committee. The Compensation Committee was established to set and administer the auditors' assessment of
internal accounting controls; it also recommendspolicies that govern annual compensation for the appointmentCompany's executives. Following review and approval by the Compensation Committee of the public auditorscompensation policies, all issues pertaining to executive compensation are reported to the Board of Directors. One Audit Committee meeting was
held during fiscal 1996. The Compensation Committee (consisting of Messrs.
Apkarian, Goldberg, and Landgraf) determinesapproves compensation arrangements for officers and key employees of the Company, including but not limited to the grant of options to
purchase the Company's Common Stock pursuant to the Company's stock option plans or other plans that may be established. The Compensation Committee met one time during fiscal 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors, executive officers and holders of more than 10% of the Company's Common Stock to file with the SEC initial reports of ownership of the Company's Common Stock and other equity securities on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Officers, directors and 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on a review of the Company's records and written representations by the persons required to file such reports, all filing requirements of Section 16(a) were satisfied with respect to the Company's most recent fiscal year.
INCREASE IN
AUTHORIZED COMMON STOCK
The Board of Directors has approved, subject to the approval of shareholders, and recommends that the shareholders of the Company approve, an amendment to the Company's Certificate of Incorporation providing for an increase from 50,000,000 to 75,000,000 in the number of authorized shares of Common Stock. As of March 5, 2001, the Company had a total of 35,475,585 shares of Common Stock outstanding (including 20,250 shares held in treasury), 6,879,657 shares of Common Stock reserved for issuance upon exercise of stock options issued and issuable and 300,000 shares of Common Stock reserved for issuance upon exercise of warrants. The amendment is contained in Exhibit 1 to this Proxy Statement.
Although the Board of Directors has no immediate plans, understandings, agreements or commitments to issue additional shares of Common Stock for any purposes, the Board of Directors believes the increase in the authorized number of shares is in the best interests of the Company.
If the amendment is approved, the additional 25,000,000 authorized shares of Common Stock would be available for issuance in the future for corporate purposes, including, without limitation, financings, acquisitions, stock splits, stock dividends and employee stock incentive plans, as the Board of Directors may deem advisable. No additional action or authorization by the
shareholders would be necessary prior to the issuance of such additional shares, unless required by applicable law or the rules of any stock exchange or national securities association trading system on which the Common Stock is then listed or quoted. Shareholders will not have preemptive rights to subscribe for shares of Common Stock, unless the Company grants such rights at the time of issue.
If the Company issues any newly authorized shares, it will cause the Company's current shareholders to be diluted and could have the effect of making it more difficult for a third party to acquire, or discourage a third party from attempting to acquire, control of the Company. The Company is not aware of any attempts on the part of a third party to effect a change of control of the Company and the aggregate amount toamendment has been proposed for the reasons stated above and not for any possible anti-takeover effects it may have.
The Board of Directors recommends that shareholders vote FOR the approval of the amendment increasing the number of shares of authorized Common Stock.
APPROVAL OF AUDITORS
The Board of Directors has recommended that the appointment of PricewaterhouseCoopers LLP as independent auditors for the year ending September 30, 2001 be disbursed as incentive
compensation to Director and non-Director officer employees. Two Compensation
Committee meetings were held during fiscal 1996. The Nominating Committee
(consisting of Messrs. Diesel, Goldberg, and McNamee) considers the
performance of incumbent Directors, seeks out and interviews qualified
candidates for consideration as potential Directors, and recommends
candidates for designationratified by the full Board as the Board's nominees to stand
for election at the Annual Meeting of Shareholders and for election by the
Board to fill interim vacancies on the Board. At the present time, the
Nominating Committee has not established any procedures for consideration of
director-candidates submitted by shareholders. No meetings of the Nominating
Committee were held during Fiscal 1996.
APPROVAL OF AUDITORS
At the Annual Meeting, the shareholders will consider a proposal to ratify
the reappointment ofstockholders. PricewaterhouseCoopers LLP (and its predecessor, Coopers & Lybrand, as the auditors of the Company,
subject to the receipt of a satisfactory letter of engagement from such firm.
Coopers & LybrandLLP) have been the Company's auditors since 1978. While
approval of auditors by the shareholders is not required by the By-Laws of
the Company, management believes that it is an appropriate matter for
shareholder consideration. Should the Board's appointment of the auditors
not be ratified, other auditors will be appointed by the Board of Directors.
Representatives of Coopers & LybrandPricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so and to be available to respond to
appropriate questions.
The Board of Directors recommends that shareholders vote FOR the ratification of the appointment of Coopers & Lybrand as independent public accountants for
1997.
ADDITIONAL INFORMATION
auditors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table setstables set forth information with respect to the compensation and stock option grants for services to the Company and its subsidiaries, during the Company's fiscal year ended September 30, 19962000 (and during the Company's two prior fiscal years), of each person who served as Chief Executive Officer during such year, and of all other persons who served as executive officers of the Company and its subsidiaries during such year whose total annual compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------
Annual Long-Term
Compensation Compen-
sation
- -------------------------------------------------------------------------------
Name & Principal Fiscal Salary Bonus Other Restricted All
Position Year Annual Stock Other
Compen- Awards(1) Compen-
sation sation
- -------------------------------------------------------------------------------
R. Wayne Diesel 1996 $200,000 $ - - $ - $ 8,000(2)
President & CEO 1995 $190,764 $ - - $ 12,500 $ 4,452(2)
1994 $129,744 $ - - $ 12,500 $ -
- -------------------------------------------------------------------------------
Stephen Sullivan 1996 $130,310 $ - - $ - $ 4,840(2)
President, Ling 1995 $139,617 $ - - $ - $ 5,306(2)
Electronics, Inc. 1994 $118,927 $ - - $ - $ 4,838(2)
- -------------------------------------------------------------------------------
Douglas McCauley 1996 $110,807 $ 7,000 - $ - $ -
Vice-President 1995 $100,152 $ 5,000 - $ 625 $ 1,669(2)
Technology Group 1994 $105,000 $ - - $ 6,250 $ 4,200(2)
- -------------------------------------------------------------------------------
Stephen T. Wilson 1996 $107,903 $10,000 - $ - $ 2,620(2)
Chief Financial 1995 $ 60,846 $ - - $ - $ -
Officer 1994 $ - $ - - $ - $ -
- -------------------------------------------------------------------------------
Denis P. Chaves 1996 $ 99,167 $37,000 - $ - $ 3,966(2)
Vice-President, 1995 $ 95,000 $10,000 - $ 625 $ 3,800(2)
LAB and Advanced 1994 $ 93,500 $ 7,500 - $ - $ 3,800(2)
Products Divisions
- -------------------------------------------------------------------------------
(1) This column shows the market value on the date of grant of shares
SUMMARY COMPENSATION TABLE | |||||
ANNUAL COMPENSATION | LONG-TERM COMPENSATION | ||||
NAME AND POSITION OF PRINCIPAL | FISCAL YEAR | SALARY | BONUS | SECURITIES UNDERLYING OPTIONS (#) | ALL OTHER COMP |
Dr. William P. Acker, President & Chief Technology Officer(1) | 2000 | $ 50,481 | $ - | 175,000 | $ - |
Dr. Judith A. Barnes, Vice President & Chief Marketing Officer(1) | 2000 | $100,962 | $62,500 | 140,000 | $ - |
James T. Bunch, Vice President of Business Development(1) | 2000 | $ 45,769 | $10,000 | 75,000 | $ - |
Denis P. Chaves, Vice President & General Manager MTI Instruments, Inc. | 2000 1999 1998 | $160,000 $160,000 $133,481 | $25,000 $30,000 $33,500 | 30,000 90,000 90,000 | $ 6,154(3) $ 6,523(3) $ 5,793(3) |
Catherine S. Hill, Vice President of Corporate Development(1) | 2000 | $ 86,539 | $ - | 140,000 | $ - |
George C. McNamee, Chief Executive Officer (2) | 2000 1999 1998 | $ - $ - $ - | $ - $ - $ - | 30,000 90,000 None | $ - $ - $ - |
Cynthia A. Scheuer, Vice President & Chief Financial Officer | 2000 1999 | $115,037 $103,849 | $10,000 $10,000 | 40,000 45,000 | $ 4,561(3) $ 4,235(3) |
Acker joined the Company's Restricted Stock Incentive
Plan. The Plan expiredCompany as President and Chief Technology Officer on December 31, 1994. The restrictionsJune 19, 2000.
Dr. Barnes joined the Company as Vice President and Chief Marketing Officer on these
shares lapseMarch 7, 2000.
Mr. Bunch joined the Company as Vice President of Business Development on a scheduled basisJune 26, 2000.
Ms. Hill joined the Company as determined by the BoardVice President of Directors at
the time of grant or upon death. The recipient has voting and dividend rights
to the shares from the date of award. The aggregate holdings/value of shares
of Restricted Stock, as to which the restrictions have not lapsed,Corporate Development on September 30, 1996 (basedMarch7, 2000.
OPTION GRANTS IN FISCAL 2000
Individual Grants Name Number of Shares Underlying Options Granted Percentage of Total Options Granted to Employees Exercise Price (per share) Expiration Date Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term1 5%($)10%($) Dr. William P. Acker 175,0002 21.58% $10.650 06/19/2010 $1,172,102 $2,970,338 Dr. Judith A. Barnes 105,0003 35,0004 12.95% 4.32% $21.917 $12.963 03/07/2010 06/20/2010 $1,447,244 $ 285,322 $3,667,600 $ 723,061 James T. Bunch 75,0005 9.25% $11.475 06/26/2010 $ 541,242 $1,371,615 Denis P. Chaves 30,0006 3.70% $21.625 03/30/2010 $ 407,995 $1,033,940 Catherine S. Hill 105,0003 35,0004 12.95% 4.32% $21.917 $12.963 03/07/2010 06/20/2010 $1,447,244 $ 285,322 $3,667,600 $ 723,061 George C. McNamee 30,0007 3.70% $20.917 04/01/2010 $ 394,631 $1,000,073 Cynthia A. Scheuer 30,0006 10,0008 3.70% 1.23% $21.625 $12.963 03/30/2010 06/20/2010 $ 407,995 $ 81,520 $1,033,940 $ 206,589
_______________
FISCAL YEAR-END OPTION VALUES
Option Exercises and Option Values.The following table sets forth information concerning the number and value of unexercised options to purchase Common Stock of the Company held by the Named Executive Officers of the Company who held such options at September 30, 2000.
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
Number of Securities Underlying Unexercised Options atFiscal Year End (#) | Value of Unexercised In-the-Money Optionsat Fiscal Year End ($)(1) | |||||
Name | Shares Acquired On Exercise (#) | Value Real ($) |
Exercisable |
Unexercisable |
Exercisable |
Unexercisable |
Dr. William P. Acker | - | - | 43,750 | 131,250 | $ 7,131 | $ 21,394 |
Dr. Judith A. Barnes | - | - | 26,250 | 113,750 | $ - | $ - |
James T. Bunch | - | - | - | 75,000 | $ - | $ - |
Denis P. Chaves | 22,500 | $121,318 | 129,825 | 170,625 | $1,256,466 | $1,320,016 |
Catherine S. Hill | - | - | 101,250 | 113,750 | $ 406,585 | $ - |
George C. McNamee | - | - | 120,000 | - | $ 706,295 | $ - |
Cynthia A. Scheuer | 45,000 | $ 61,006 | - | 107,500 | $ - | $ 627,596 |
REPORT OF THE COMPENSATION COMMITTEE REPORTOF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION POLICIES FOR OFFICERS.
The Company's compensation program forCompensation Committee reviews and evaluates individual executive officers and employee directors currently consistsdetermines the compensation for each executive officer. In general, compensation is designed to attract, retain and motivate a superior executive team, reward individual performance, relate compensation to Company goals and objectives and align the interests of an annualthe executive officers with those of the Company's stockholders.
Compensation for the Named Executive Officers during Fiscal 2000 included salary and bonus. Base salary was determined by reviewing the previous levels of base salary, base salaries paid by comparable companies to executives with similar responsibilities, perceived level of individual performance and the overall performance of the Company. No specific weight was given to any of these factors in the evaluation of base salaries because each of these factors was considered significant and the relevance of each varies depending on an officer's responsibilities.
For fiscal 2000, bonus payments which are primarily designed to reward performance.
Foramounts were based on the Named Executive Officers' specific contributions made during the year 1996, the Committee used the following criteria in making
compensation decisions for executive officers:
* Company and individual affiliate financial performance.
* Implementation of programs to improve working capital
and cash flow, and to diversifytoward the Company's product
offeringsgoals established at the beginning of the year. Bonus amounts are paid in cash generally during the first quarter after year-end. Stock options are also granted to executive officers based upon their specific responsibilities.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(Continued)
The Compensation Committee believes that with current salary, bonus and strengthen its technology resources.
* Resolutionstock option grants, which generally vest over a four-year period, the executive team is properly motivated to achieve the short and long-term goals of major outstanding issues with the U.S.
Government.
Company.
The Budget Reconciliation Act of 1993 amended the Internal Revenue Code to add Section 162(m), which bars a deduction to any publicly held corporation for compensation paid to a "covered employee" in excess of $1 million per year. The Compensation Committee does not believe that this law will impact the Company because the current level of compensation for each of the Company's executive officers is well below the $1 million salary limitation. The Compensation Committee will continue to evaluate the impact of such provisions and take such actions as it deems appropriate.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Diesel was appointedCOMPENSATION
George C. McNamee became Chief Executive Officer effective February 1994 and prior to December 1996, also
held the title of President. He was recruited from outside the Company and
had previously held senior management positions inon April 15, 1998. Mr. McNamee receives no salary or bonus from the insurance and banking
industries, and with New York State. The compensation package offered Mr.
Diesel took into consideration his experience and expertise; the size,
diversity and needsCompany; however, he does receive stock options as a member of the business;Board of Directors of the Company.
Compensation Committee | |
Mr. Alan P. Goldberg | |
Dr. Beno Sternlicht |
EMPLOYMENT AGREEMENTS
Dr. Judith A. Barnes, Vice President and compensation levels at companiesChief Marketing Officer will receive 100% of comparable size and industry. The compensation package included: (1) aher base salary effective February 4, 1994; (2) the potential for cash incentive
bonuses based on performance;6 months if we terminate her employment without cause. For fiscal year 2000, her base annual salary was $175,000.
Dr. William P. Acker, President and (3) stock grants underChief Technological Officer will receive 100% of his base salary and benefits for one year if we terminate him without cause. For fiscal year 2000, his base annual salary was $175,000.
Ms. Catherine S. Hill, Vice President of Corporate Development will receive 100% of her base salary for 6 months if we terminate her employment without cause. For fiscal year 2000, her base annual salary is $150,000.
DIRECTORS' COMPENSATION
Directors who are not salaried officers or employees receive fees of $750 for each Board of Directors meeting attended. Directors are also are reimbursed for travel expenses incurred in attending meetings.
DIRECTORS' COMPENSATION(Continued)
On March 18, 1999, the Company's Restricted Stock Incentive Plan. ForBoard of Directors adopted a director stock option program, pursuant to which on the period October 1, 1994 through
September 30, 1996 there were no changes to his annual compensation and no
cash incentive bonuses were paid. The Committee did, however, take actiondate of each Annual Meeting of Stockholders of the Company commencing with the Annual Meeting in November 1996 to accelerate the vesting of 23,000 shares held by Mr. Diesel1999, provided that were still subject to restrictions under the Restricted Stock Incentive
Plan;he or she is serving as a result, all restrictions underdirector immediately following the Plandate of such Annual Meeting of Stockholders, each non-employee director will be granted a nonstatutory stock option to purchase 10,000 shares of the Company's Common Stock. These nonstatutory stock options will be immediately exercisable and will have lapsed asexercise prices equal to allthe closing price of the Company's Common Stock on the NASDAQ National Market on the date of grant.
During Fiscal 2000, the Company granted stock options to purchase shares held by Mr. Diesel.
Compensation Committee
Stanley I. Landgraf, Chairman
Harry Apkarian
Alan P. Goldberg
of the Company's Common Stock to each member of the Board of Directors. The stock option exercise price was $20.92 per share, and these stock options were immediately exercisable upon grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors ("Committee") approves all of the policies under which compensation is paid or awarded to the Company's officers and employee directors. The Committee, consistsin fiscal 2000, consisted of two
non-employee Directors (Mr. LandgrafMr. Goldberg and Mr. Goldberg) and one employee
Director (Mr. Apkarian). Mr. Lawrence A. Shore, formerly a Director of the
Company who was not re-elected at the Company's 1996 Annual Meeting of
Shareholders on May 16, 1996, also served on the Compensation Committee while
he was a member of the Board.
Mr. Shore and Mr. Apkarian are both former Chief Executive Officers of the
Company. Mr. Shore had served as the Company's Chief Executive Officer from
July 1992 until February 1993. Mr. Apkarian was Chief Executive Officer of
the Company from 1961 until 1991 and was Chairman of the Board of Directors
from 1984 until his resignation from this position in August 1993. Mr.
Apkarian does not vote on matters pertaining to his own compensation.
Dr. Sternlicht.
Mr. Goldberg is Co-Chief Executive Officer of FAC. (See "Securities Ownership of Certain Beneficial Owners" and "Certain Relationships and Related Transactions")
AUDIT FEES
The Company was billed the following fees by PWC during fiscal 2000:
Audit fees | $ 95,415 |
All other fees | 75,645 |
Total | $171,060 |
These other services are considered compatible with the auditors' independence.
AUDIT COMMITTEE REPORT
In connection with the preparation and filing of the Company's Annual Report on Form 10-K for the year ended September 30, 2000, the Audit Committee (i) reviewed and discussed the audited financial statements with the Company's management, (ii) discussed with PricewaterhouseCoopers LLP ("PWC"), the Company's independent auditors, the matters required to be discussed by Statement of Auditing Standards 61 (as modified or supplemented) and (iii) received the written disclosures and the letter from PWC required by
AUDIT COMMITTEE REPORT(Continued)
Independence Standards Board Standard No.1 (as modified or supplemented) and discussed the independence of PWC with PWC. Based on the review and discussions referred to above, among other things, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended September 30, 2000.
Mr. Goldberg is the President and Co-Chief Executive Officer of FAC and is therefore not considered independent. The Company's Board of Directors considers Mr. Goldberg's membership on the committee is essential in order to represent the best interests of the Company and its shareholders because of his significant experience with corporate financial matters.
AUDIT COMMITTEE | |
E. DENNIS O'CONNOR | |
ALAN P. GOLDBERG | |
DALE W. CHURCH |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At September 30, 2000, First Albany Companies, Inc. ("FAC") (see "Security Ownershipowned approximately 34% of Certain Beneficial Owners", below)the Company's common stock. George McNamee, a Director and Chief Executive Officer of the Company, is Chairman of the Board of Directors, Co-Chief Executive Officer and a shareholder of FAC. Alan Goldberg, a Director of the Company, is a Director, President and Co-Chief Executive Officer and a shareholder of FAC.
Transactions among related parties are as fair to the Company as obtainable from unaffiliated third parties.
On December 27, 2000, the Company entered into a Put and Call with FAC to provide independent credit support for repayment of its $25.2 million indebtedness to KeyBank, N.A. ("FAC Credit Enhancement"). During fiscal 1996,The FAC Credit Enhancement provides FAC with the option, if the price of Plug Power stock falls to $4 per share, to either purchase 6.3 million Plug Power shares pledged as collateral on the loan or take an assignment of KeyBank, N.A.'s rights under the Credit Agreement, as amended. The FAC Credit Enhancement may be triggered if the Company defaults on its obligations to KeyBank, N.A. The FAC Credit Enhancement expires on April 27, 2001, and may be renewed by the Company and FAC on a monthly basis upon mutually agreeable terms. If the Company defaults, the proceeds from the FAC Credit Enhancement will be used to pay KeyBank, N.A. $25.2 million. If the FAC Credit Enhancement expires prior to November 3, 2001, the loan is immediately due and payable. After November 3, 2001, upon expiration of the FAC Credit Enhancement, if Plug Power stock is trading below $20 per share, the loan is immediately due and payable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS(Continued)
On December 27, 2000, the Company entered into two bridge loan agreements with FAC. The first loan was for $945 thousand and was used to pay the purchase price for the FAC Credit Enhancement. The Company has pledged 200,000 shares of Plug Power common stock as collateral for that loan.
The second loan is for $5 million, $3 million of which was used to make a principal loan repayment to KeyBank, N.A. and the remaining $2 million will be used for working capital. The Company pledged 1 million shares of Plug Power common stock as collateral. Both loans bear interest at the Prime Rate (9.5% at December 27, 2000) and both interest and principal are due on January 3, 2002. Upon mutual agreement of FAC and the Company, the loans may be converted to equity prior to maturity.
In April 2000, the Company entered into a management services agreement with First Albany Corporation, a wholly-owned subsidiary of FAC, acted as placement agentto provide certain services on a month-to-month basis. Under this agreement, FAC bills services to the Company (phone, network, postage, etc.) on a cost reimbursement basis. Billings under these agreements amounted to approximately $30 thousand for 2000.
During November 1999, FAC/Equities, a division of First Albany Corporation, a wholly-owned subsidiary of FAC, was paid approximately $353 thousand for financial advisory and investment banking services in connection with the sale of Ling Electronics, Inc. and Ling Electronics, Ltd. ("Ling") to SatCon Technology Corporation ("SatCon").
FAC/Equities was a private placementco-manager in the Plug Power Inc. ("Plug Power") initial public offering ("IPO"). George C. McNamee is the Chairman and Co-Chief Executive Officer of 1,333,333 sharesFAC, the Chairman and Co-Chief Executive Officer of the Company's Common Stock, pursuant to which the Company
raised approximately $1.9 million of additional capital (net of expenses of
the offering), for which First Albany Corporation, was paid a fee.
During fiscal 1996, FAC purchased 909,091 sharesthe Chairman of the Company's Common
Stock from the New York State Superintendent of Insurance as the court-
ordered liquidator of United Community Insurance Company ("UCIC"). In
connection with this purchase, FAC also acquired certain rights to an
obligation ("Term Loan") due from the same finance company ("FCCC") to whom
the Company was obligated under the Note Payable, due December 31, 1996; at
September 30, 1996, the Note Payable had an outstanding principal balance of
$3.0 millionBoard and accrued interest of $1.1 million. FCCC is in default of its
Term Loan to UCIC. FAC, as the owner of the rights to the Term Loan, filed
suit seeking payment. Collateral for the FCCC Term Loan includes the
Company's Note Payable to FCCC. FAC has exercised its rights to the
collateral securing the Term Loan, including the right to obtain payment on
the Note Payable directly from the Company. The Company and FAC have entered
into an agreement dated as of December 27, 1996 under which the Company
issued to FAC 1.0 million shares of Common Stock in full satisfaction
of the Note Payable. On December 27, 1996, the last sale price of the
Company's Common Stock, as reported by NASDAQ, was $2.00 per share.
Until his resignation from such positions in March 1996, Mr. R. Wayne Diesel, Chief Executive Officer of Mechanical Technology, and a Director ofis currently the Company, was a memberChairman of the Board of Directors of Lawrence Insurance Group, Inc.Plug Power. In addition, Dr. Walter L. Robb, a director of Mechanical Technology, is a director of Plug Power and Dr. Beno Sternlicht, a director of Mechanical Technology, was a director of Plug Power until just before the Plug Power IPO in 1999 and is presently a consultant to Plug Power.
Prior to making its investment in Beacon Power Corporation ("Beacon Power"), the Company made a one time $1.2 million bridge loan to Beacon Power in April 2000. This bridge loan was converted to equity as part of a $6 million investment. In connection with this bridge loan, the Company received approximately $5 thousand in interest income. Mechanical Technology owns approximately 9.2% of Beacon Power, after its IPO and servedthe Company's exercise of warrants on December 20, 2000, and Alan Goldberg is the Company's representative on the Compensation CommitteeBeacon Power Board of Directors. In addition, SatCon performs funded research and development and sells power electronic boards and components to Beacon Power.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS(Continued)
Plug Power purchases electronic components from SatCon for its residential fuel cell systems. Mechanical Technology owns approximately 13.0% of SatCon's outstanding stock and has the Lawrence Insurance Group, Inc. Board; Mr.
Albert W. Lawrence, formerlyright to appoint two members to SatCon's Board of Directors. Alan Goldberg is the Company's current representative on the SatCon board.
David B. Eisenhaure, a Director of the Company, who was not re-elected
at the Company's 1996 Annual Meeting of Shareholders on May 16, 1996, is President, Chief Executive Officer and Chairman of the Board of Lawrence Insurance Group, Inc. (see "Security
OwnershipDirectors of Certain Beneficial Owners").
EMPLOYMENT AGREEMENTS
TheSatCon. On October 21, 1999, the Company hascreated a strategic alliance with SatCon. SatCon acquired Ling from the Company and the Company agreed to invest approximately $7 million in SatCon. This investment was done in two stages.
In consideration for the acquisition of Ling and the Company's investment, the Company received 1,800,000 shares of SatCon's common stock and warrants to purchase an agreement with Mr. Diesel which provides that Mr. Diesel
will receive an annual base salaryadditional 100,000 shares of $200,000 and is eligible to receive
incentive compensation at the discretionSatCon's common stock.
As a part of the Compensation Committee. Per
this agreement, Mr. Diesel was awarded an initial grant underSatCon transaction, the Company issued to SatCon warrants to purchase 108,000 and 192,000 shares of the Company's Restricted Stock Incentive Planstock on October 21, 1999 and January 31, 2000, respectively. The warrants are immediately exercisable at $12.56 per share and expire on October 21, 2003 and January 31, 2004, respectively. The estimated fair value of 10,000 shares; in December 1994,these warrants at the
Committee awarded Mr. Diesel an additional 25,000 shares under such Plan. The
agreement also states that if Mr. Diesel is removed from the position of
President
dates issued were $4.94 and CEO$16.38 per share, respectively, using a Black-Scholes option pricing model and assumptions similar to those used for reasons other than cause during his first three years
of employment, the Company will pay him severance payments equivalent to a
maximum of one year's base salary plus insurance benefits.
The Company has an agreement with Mr. Mastroianni which provides that Mr.
Mastroianni will receive an annual base salary of $150,000. Per this
agreement, Mr. Mastroianni was awarded initial stock options undervaluing the Company's Incentive Stock Option Plan for 30,000 shares; in addition Mr.
Mastroianni will receive additional stock options for up to 120,000 shares if
defined profit targets are exceeded for fiscal 1997. The agreement also
states that if Mr. Mastroianni is removed from the position of President for
reasons other than cause during his first three years of employment, the
Company will pay him severance payments equivalent to a maximum of one year's
base salary.
options.
The Company also has an agreementreceived warrants to purchase 36,000 and 64,000 shares of SatCon common stock on October 21, 1999 and January 31, 2000, respectively. The warrants are immediately exercisable at $8.80 per share and expire on October 21, 2003 and January 31, 2004, respectively.
Prior to becoming Vice President of Corporate Development, Catherine Hill's law firm, Catherine S. Hill, PLLC, served as general counsel to the Company. Billings for 2000 totaled approximately $141 thousand.
Ms. Hill also received 30,000 stock options during 2000 with Mr. Apkarian terminatinga Black Scholes value of approximately $446 thousand.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Below is a line graph comparing the percentage change in the cumulative total shareholder return on the Company's common stock, based on the market price of the Company's common stock, with the total return of companies included within the Standard & Poor's (S&P)500 Composite Index and the companies included within the S&P Technology Sector Composite Index for a five year period commencing October 1, 1995 and ending September 30, 1997 or upon Mr. Apkarian's retirement, whichever occurs first. This
agreement provides that Mr. Apkarian will continue as an employee2000. The calculation of total cumulative return assumes a $100 investment in the Company's common stock, the S&P 500 Composite Index and a
Directorthe S&P Technology Sector Composite Index on October 1, 1995, the first day of the Company at an annual salary of $130,000. The agreement also
provides an annual bonus of $10,000 which he will use to purchase $250,000 of
term life insurance. Upon his retirement, an annual pension supplement of
$50,000 will be paid until September 30, 1997, and if Mr. Apkarian dies
during this period, a survivor's benefit payment of $25,000 per year will be
paid to his spouse, if then living, for the remainder of the payment period.
In addition, the agreement provides for the payment of club dues and the use
of a Company automobile for which Mr. Apkarian pays 50% of the lease
payments.
DIRECTORS COMPENSATION
Directors who are not officers or employees receive Director's fees of $750
for each Board meeting attended. Directors also are reimbursed for travel
expenses incurred in attending meetings.
Company's fiscal year.
COMPARISON OF FIVE5 YEAR CUMULATIVE TOTAL RETURN
AMONG MECHANICAL TECHNOLOGY INCORPORATED, (MKTY),THE S&P 500 INDEX
AND THE S&P HIGH TECH COMPOSITETECHNOLOGY SECTOR INDEX (1)
S&P
Measurement Period S&P High Tech
(Fiscal Year Covered) MKTY 500 Index Index
- --------------------- ------ --------- ---------
Measurement Pt-9/30/91 $ 100 $ 100 $ 100
FYE 9/30/92 $ 100 $ 111 $ 102
FYE 9/30/93 $ 70 $ 125 $ 123
FYE 9/30/94 $ 3 $ 130 $ 143
FYE 9/30/95 $ 45 $ 169 $ 226
FYE 9/30/96 $ 70 $ 203 $ 277
(1) Assumes that $100 was invested on September 30, 1991 in Mechanical
Technology Inc. Common Stock, the S&P 500 and the S&P High Tech composite
Index, and that all dividends were reinvested.
[GRAPH APPEARS HERE]
Measurement Period | S&P | S&P Technology | |
(Fiscal Year Covered) | MKTY | 500 Index | Sector Index |
FYE 10/01/95 | 100 | 100 | 100 |
FYE 9/30/96 | 170 | 120.34 | 122.85 |
FYE 9/30/97 | 280 | 169.01 | 199.52 |
FYE 9/30/98 | 570 | 184.30 | 225.89 |
FYE 9/30/99 | 4267.50 | 235.54 | 394.81 |
FYE 9/30/00 | 3892.50 | 266.83 | 471.73 |
ADDITIONAL INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 3, 1997 in respect of
each person known by the Company to be the beneficial owner of more than 5%
of its outstanding Common Stock.
Amount of
Beneficial Percent
Name Address Ownership of Class
- ------------------ -------------------- ------------ --------
First Albany
FAC, 30 South Pearl St. 2,035,698(A) 34.5%
Companies Inc.Street, Albany, N.Y. 12207
Lawrence Insurance 500 Fifth Avenue 820,909(B) 13.9%
Group, Inc. New York, N.Y. 10110
(A) On May 7, 1996, First Albany Companies Inc. ("FAC") purchased 909,09112207, are beneficial owners of 11,882,433 shares, or approximately 34%, of the Company's Common Stock previously owned by United Community
Insurance Company ("UCIC", a subsidiary of Lawrence Insurance Group, Inc.
("LIG") which is undergoing a court-ordered liquidation). According to the
Schedule 13D Amendment No. 3, dated May 8, 1996, filed by FAC with respect to
the purchase of these shares, FAC paid $1.50 per share (a total of
$1,363,637) for the shares previously owned by UCIC; also according to FAC's
Schedule 13D Amendment No. 3, the funds for its purchaseoutstanding common stock of the 909,091
shares previously owned by UCIC came from working capital. In addition, in
connection with FAC's purchase of the shares previously owned by UCIC, FAC
was granted an irrevocable proxy to vote those shares at the Company's Annual
Meeting of Shareholders held on May 16, 1996.
The purchase by FAC of the shares previously owned by LIG's UCIC subsidiary,
when combined with shares previously purchased by FAC in open-market
transactions, gave FAC ownership of 1,035,698 shares of the Company's Common
Stock (approximately 29% of the then outstanding shares), and resulted in FAC
becoming the Company's largest shareholder.
At the Company's Annual Shareholders' Meeting held on May 16, 1996 Messrs.
George C. McNamee and Alan P. Goldberg, Co-Chief Executive Officers of FAC,
were elected to the Company's Board of Directors. Incumbent Directors Albert
W. Lawrence and Lawrence A. Shore (who were among the nominees for re-
election to the Board proposed in the Proxy Statement for the Meeting
prepared by the Company's management but whose re-election was opposed by FAC
in its Proxy Statement for solicitation of proxies in opposition to
management's solicitation) were not re-elected to the Board, and accordingly
their terms as Directors of the Company expired at the Meeting; all other
incumbent Directors (i.e., Messrs. R. Wayne Diesel, Harry Apkarian, Stanley
I. Landgraf, and E. Dennis O'Connor), whose re-election was supported by FAC
in its Proxy Statement, were re-elected to the Board.
At its organizational meeting following the Shareholders' Meeting, the newly-
constituted Board elected George C. McNamee as its Chairman, and re-elected
R. Wayne Diesel as President and Chief Executive Officer. In addition, the
Board voted to increase the number of Directors from 6 to 7, and elected Dr.
Beno Sternlicht, a co-founder of the Company, to fill the newly-created
position.
As a result of the foregoing share purchases and elections, a change in
control of the Company may be deemed to have occurred.
As discussed more fully under "Compensation Committee Interlocks and Insider
Participation", above, FAC acquired certain rights to the Term Loan due from
FCCC (the finance company to whom the Company is obligated under the Note
Payable), and the Company and FAC have entered into an agreement dated as of
December 27, 1996 under which the Company issued to FAC 1.0 million shares
of Common Stock in full satisfaction of the Note PayableCompany. Messrs. McNamee and Goldberg may be deemed the beneficial owners of at least a portion of the shares owned by FAC. However, Messrs. McNamee and Goldberg disclaim such beneficial ownership.
(B) 363,636 of these shares are owned of record by United Republic Insurance
Company ("URIC"), and the balance are owned of record by wholly-owned
subsidiaries of URIC as follows: Global Insurance Company - 349,068 shares;
and Senate Insurance Company - 108,205 shares. 78.6% of the outstanding stock
of URIC is owned by Lawrence Insurance Group, Inc. ("LIG"); the remaining
21.4% is owned by United Community Insurance Company, another subsidiary of
LIG which is under the control of the Superintendent of Insurance of the
State of New York and is undergoing a court ordered liquidation. While the
shares of the Company's Common Stock owned by URIC and its subsidiaries are
still held of record as set forth previously, the SEC Form 10-Q Report of LIG
for the quarter ended March 31, 1996 discloses that LIG disposed of those
shares during that quarter by selling them to Lawrence Group, Inc.; to date,
however, no transfer of such shares on the Company's records has been made,
nor has such a transfer been requested.
According to the April 22, 1996 Proxy Statement of Lawrence Insurance Group,
Inc. for its May 23, 1996 Annual Meeting of Stockholders, Lawrence Group,
Inc. is the beneficial owner of approximately 93% of the outstanding shares
of the common stock of Lawrence Insurance Group, Inc. The Company understands
that Albert W. Lawrence (formerly a Director of the Company) is, along with
Barbara C. Lawrence, his wife, the owner of 100% of the common stock of
Lawrence Group, Inc.; as a result, Mr. and Mrs. Lawrence may be deemed to be
the beneficial owners of the shares of the Company's Common Stock held of
record by URIC and its subsidiaries and referred to in the preceding
paragraph.
In May 1996 Lawrence Group Inc. filed a legal action against the Company and
FAC, challenging certain actions taken by the Company's Board of Directors in
connection with its approval under Section 912 of the New York Business
Corporation Law of FAC's purchase of the 909,091 shares of the Company's
Common Stock previously owned by UCIC. Management believes the action is
without merit, and is vigorously defending the matter; a motion to dismiss
the complaint has been filed and is pending.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect toregarding the beneficial
ownership of sharesour common stock as of December 31, 2000 for:
Shares Beneficially Owned(1) | |||
Name of Beneficial Owner | Number(2) | Percent | |
First Albany Companies Inc. | 11,882,433 | 33.55% | |
Dr. William P. Acker | 68,750 | (3) | * |
Dr. Judith A. Barnes | 26,250 | (4) | * |
James T. Bunch | - | * | |
Denis P. Chaves | 152,325 | (5) | * |
Dale W. Church | 328,500 | (6) | * |
Edward A. Dohring | 193,689 | (7) | * |
David B. Eisenhaure | 333,000 | (8) | * |
Alan P. Goldberg | 12,904,851 | (9),(12) | 36.43 |
Catherine S. Hill | 106,350 | (10) | * |
George C. McNamee | 13,440,549 | (9),(11),(12) | 37.93 |
E. Dennis O'Connor | 349,500 | (13) | * |
Dr. Walter L. Robb | 198,300 | (13) | * |
Cynthia A. Scheuer | 61,875 | (14) | * |
Dr. Beno Sternlicht | 934,018 | (7), (15) | 2.63 |
All present Directors and Officers as a group (13 persons) | 17,063,199 | 46.18 | |
*
Dale W. Church -0- *
R. Wayne Diesel 35,000(3) *
Edward A. Dohring -0- *
Alan P. Goldberg 2,097,364(4) 35.6%
Stanley I. Landgraf 1,000 *
Douglas McCauley 8,000(2) *
George C. McNamee 2,135,698(4) 36.2%
Martin J. Mastroianni -0- *
E. Dennis O'Connor -0- *
Dr. Walter L. Robb 9,000 *
Dr. Beno Sternlicht 126,250(5) 2.1%
Stephen Sullivan 5,000(2) *
Stephen T. Wilson -0- *
All present Directors and 2,663,215(2),(3),(4),(5) 45.1%
Officers as a group (12 persons)
- -------------------------------------
* Percentage is less than 1.0% of the outstanding Common Stock.
(1)To the best of the Company's knowledge, based on information reported by
such Directors and officers or contained in the Company's shareholder
records. Except ascommon stock.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to Shareholders accompanies this Proxy Statement. The Company's Annual Report on Form 10-K for the year ended September 30, 1996,2000, as filed with the Securities and Exchange Commission, may be obtained by addressing a written request to the Investor Relations Department at the Company's corporate headquarters, (968 Albany-Shaker Road, Latham, NY 12110).
30 South Pearl Street, Albany, New York 12207.
PROPOSALS OF SECURITYHOLDERS
Proposals by security holders intended
If a shareholder intends to be presentedpresent a proposal at the Company's Annual Meeting of Shareholders to be held in 1998 must be received by2002 and seeks to have the Company
before October 10, 1997, in order to qualify for inclusionproposal included in the Company's Proxy Statement relating to that meeting.
meeting, pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, the proposal must be received by the Company no later than the close of business on November 19, 2001. If a shareholder wishes to present a matter at the Company's Annual Meeting of Shareholders to be held in 2002 that is outside of the processes of Rule 14a-8, the proposal must be received by the Company no later than the close of business on December 24, 2001. After that date, the proposal will be considered untimely and the Company's proxies will have discretionary voting authority with respect to such matter. Any proposals, as well as any related questions, should be directed to the Secretary of the Company.
OTHER MATTERS
Management does not know of any matters which will be brought before the meeting other than those specifically set forth in the notice thereof. If any other matter properly comes before the meeting, however, it is intended that the shares represented by proxies will be voted with respect thereto in accordance with the best judgment of the persons voting them.
In June 1996 the Board of Directors adopted amendments to the Company's By-
Laws relating to the indemnification of the Company's officers and
Directors against claims asserted against them in their capacities as such.
As amended, the By-Laws require the Company to indemnify its Directors and
officers against such claims to the fullest extent permitted by the New
York Business Corporation Law ("BCL"), obligate the Company to advance such
persons the costs of their defense against such claims, and contain other
provisions designed to ensure for such persons the maximum protection
possible against such claims. Prior to these amendments, the By-Laws
contained only limited indemnity protection for such persons. In addition
to indemnification by the Company under these By-Law provisions, the
Company continues to maintain indemnification insurance covering all
officers and Directors of the Company and its subsidiaries, as permitted by
BCL Section 726. The current policy has an annual premium cost of $86,000,
and is written by Continental Casualty Company and Royal Indemnity Company.
All expenses incurred in connection with this solicitation of proxies will be borne by the Company.
By Order of the Board of Directors | |
Catherine S. Hill | |
Secretary |
Albany, New York
March 5, 2001
EXHIBIT 1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
MECHANICAL TECHNOLOGY INCORPORATED
Under Section 807
of the Business Corporation Law of
the State of New York
Mechanical Technology Incorporated (hereinafter called the "Company"), organized and existing under and by virtue of the Business Corporation Law of the State of New York, does hereby certify as follows:
The Board of Directors of the Company has approved, subject to the approval by the shareholders, an amendment to the Certificate of Incorporation of the Company. The shareholders of the Company duly approved said proposed amendment at the Annual Meeting of Shareholders held on April 24, 2001. The resolution setting forth the amendment is as follows:
RESOLVED: That the Board of Directors John Recupero
Secretary
Latham, New York
March 17, 1997
IN WITNESS WHEREOF, the Company has caused its corporate seal to be affixed hereto and this Certificate of Amendment to be signed by its Chief Executive Officer this 24th day of April, 2001.
MECHANICAL TECHNOLOGY INCORPORATED |
By:_______________________________ |
George C. McNamee |
Chief Executive Officer |
Appendix 1
4. The aggregate number of shares which the Corporation shall have authority to issue shall be seventy-five million (75,000,000) shares, par value $1.00 per share.
EXHIBIT 2
MECHANICAL TECHNOLOGY INCORPORATED
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial reports and other financial information provided by the Corporation to any governmental body or the public; the Corporation's systems of internal controls regarding finance, accounting and legal compliance that management and the Board have established; and the Corporation's auditing, accounting and financial reporting processes generally. Consistent with this function, the Audit Committee should encourage continuous improvement of, and should foster adherence to, the Corporation's policies, procedures and practices at all levels. The Audit Committee's primary duties and responsibilities are to:
The Audit Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV. of this Charter.
The Audit Committee shall be comprised of three or more directors as determined by the
Board, each of whom shall be independent directors, and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. He/she may not be considered "independent" if, among other things, he/she has:
All members of the Committee shall have a working familiarity with basic finance and accounting practices and be able to read and understand fundamental financial statements (balance sheet, income statement and cash flow statement). At least one member of the Committee shall have accounting or related financial management expertise. Committee members may enhance their familiarity with finance and accounting by participating in educational programs.
The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board or until their successors shall be duly elected and qualified. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.
The Committee shall meet at least four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet at least annually with management, and the independent accountants in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. In addition, the Committee or at least its Chair should meet with the independent accountants and management quarterly to review the Corporation's financials consistent with IV.3 below.
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
Independent Accountants
Financial Reporting Processes
Process Improvement
Legal Compliance
Appendix A - Proxy Card
MECHANICAL TECHNOLOGY INCORPORATED
968 Albany-Shaker Road Latham,
30 South Pearl Street Albany, New York 12110
12207
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby revokes any proxy heretofore given to vote such shares, and hereby ratifies and confirms all that said proxies may do by virtue hereof.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE SHAREHOLDER. IF AUTHORITY TO VOTE FOR ITEM 1, ELECTION OF DIRECTORS, IS NOT SPECIFICALLY WITHHELD, THE PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN THE PROXY STATEMENT. IF NO CHOICE IS SPECIFIED WITH RESPECT TO ITEMITEMS 2 AND 3, THE PROXY WILL BE VOTED FOR THIS
PROPOSAL.
THESE PROPOSALS.
The undersigned hereby appoints George C. McNamee and R. Wayne Diesel,Alan Goldberg, or either of them, as proxies to vote all the stock of the undersigned with all the powers which the undersigned would possess if personally present at the Annual Meeting of the Shareholders of Mechanical Technology Incorporated, to be held at the offices of First Albany Companies Inc.The Desmond hotel (Northway Exit 4), 30 South Pearl Street,660 Albany-Shaker Road, Albany, New York, at 10:00 a.m. on April 16, 1997,24, 2001, or any adjournment thereof, as follows:
1.ELECTION
1.ELECTION OF DIRECTORS:
FOR ALLTHE THREE NOMINEES LISTED BELOWÿ WITHHOLD AUTHORITY
(exceptÿ
(except as marked to the contrary below)to vote for allboth nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Dale W. Church BELOW.
Three Year Term:Alan P. Goldberg E. Dennis O'Connor
R. Wayne Diesel George C. McNamee Dr. Walter L. Robb Edward A. Dohring Martin J. Mastroianni Dr. Beno Sternlicht
2.PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
INCREASING FROM 50,000,000 TO 75,000,000 THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
FORÿAGAINSTÿABSTAINÿ
3.PROPOSAL TO APPROVE THE REAPPOINTMENT OF COOPERS & LYBRANDPRICEWATERHOUSECOOPERS LLP AS AUDITORS.
FORÿAGAINSTÿABSTAIN
3.INÿ
IN THEIR DISCRETION, UPON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
Date___________,1997 ___________________________________________
Please sign exactly as name appears on
this proxy. When shares are held by joint
tenants, both should sign. When signing as
attorney, executor, administrator, trustee,
or guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized person.
_____________________________________________
Please provide Social Security Number or Tax
Identification Number
Attendance at Meeting:
No____ Yes____ Number attending____
Date,2001 | |
Please sign exactly as name appears on this proxy. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. | |
Attendance at Meeting: NO! YES! NUMBER ATTENDING! | Please provide Social Security Number or Tax Identification Number |