FORM 10-K/A
Amendment No. 1
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended July 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-21695
MANCHESTER EQUIPMENT CO., INC.
(Exact name of Registrant as specified in its charter)
New York 11-2312854
--------- ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I. D. Number)
160 Oser Avenue
Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 435-1199
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
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Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days: YES [X] NO [ ]
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of October 21, 1997 was $15,194,231 (3,241,436 shares at a closing
sale price of $4.6875).
As of October 21, 1997, 8,525,000 shares of Common Stock ($.01 par value) of the
Registrant were issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
ITEM 11. Summary Compensation
The following table sets forth a summary of the compensation paid or
accrued by the Company during the fiscal years ended July 31, 1997 and 1996 to
the Company's Chief Executive Officer and the other executive officers whose
compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
Common Stock
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation(6) Options Compensation
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Barry R. Steinberg..... 1997 $550,000 - $59,252(1) - -
President and CEO 1996 $271,800 $1,816,439 $59,210(1) - -
Joel G. Stemple........ 1997 $450,000 - $33,050(2) - -
Executive VP and 1996 $251,800 $1,669,193 $29,000(2) - -
Secretary
Joseph Looney.......... 1997 $125,489 $47,500 $7,610 70,000(5) -
Chief Financial 1996 $31,250 $10,000 $1,275 - -
Officer(3)
William F. Scheibel, Jr 1997 $128,956 $22,500 $8,266 70,000(5) -
Chief Technology 1996 $96,157 $17,500 $4,250 - -
Officer(4)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes $50,000 of premiums paid by the Company for a whole life insurance
policy in the name of Mr. Steinberg having a face value of $2,600,000 and
under which his daughters, on the one hand, and the Company, on the other
hand, are beneficiaries and share equally in the death benefits payable
under the policy.
(2) Includes $25,000 of premiums paid by the Company for a whole life insurance
policy in the name of the executive officer having a face value of
$1,300,000 and under which his spouse and the Company are beneficiaries and
are entitled to $600,000 and $700,000, respectively, of the death benefits
payable under the policy.
(3) Began employment with the Company on May 2, 1996.
(4) Began employment with the Company on September 7, 1995.
(5) See Option Grant Table below for the exercise price and vesting terms of
Messrs. Looney's and Scheibel's options.
(6) Includes in fiscal 1997 employer matching contributions to the Company's
defined contribution plan of $6,252, $6,675, $2,510, and $3,166 for Messrs.
Steinberg, Stemple, Looney and Scheibel, respectively. Other than as set
forth above, no restricted stock awards, stock appreciation rights or
long-term incentive plan awards (all as defined in the proxy regulations
promulgated by the Securities and Exchange Commission) were awarded to,
earned by, or paid to the Named Executive Officers during the fiscal year
ended July 31, 1997.
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<PAGE>
Barry R. Steinberg has agreed with the Company that his annual base
salary for services rendered to the Company in his current positions as
President and Chief Executive Officer shall be $550,000 in each of the fiscal
years ending July 31, 1997 and 1998. Mr. Steinberg has agreed that he will not
be eligible to receive any bonus in fiscal 1997 and that any bonus payable for
fiscal 1998 will require the approval of a majority of the independent directors
of the Company. The Company will continue to make available to him the car
allowance and deferred compensation benefits that he is currently receiving. Mr.
Steinberg will also be able to participate in other benefits that the Company
makes generally available to its employees, such as medical and other insurance,
and Mr. Steinberg will be able to participate under the Company's stock option
plan. In the event Mr. Steinberg's employment with the Company were terminated,
he would not be precluded from competing with the Company.
The Company has an employment agreement with Joel G. Stemple, Ph.D.,
under which Dr. Stemple receives a base salary of $450,000 in each of the fiscal
years ending July 31, 1997 and 1998. Under the employment agreement, Dr. Stemple
is not eligible to receive any bonus in fiscal 1997 and any bonus payable to Dr.
Stemple for fiscal 1998 must be approved by a majority of the independent
directors of the Company. Under the employment agreement, the Company provides
Dr. Stemple with an automobile and certain deferred compensation benefits and
provides Dr. Stemple with medical and other benefits generally offered by the
Company to its employees. Dr. Stemple also is able to participate in the
Company's stock option plan. The employment agreement is terminable by either
party on 90 days' prior notice. In the event the Company so terminates Dr.
Stemple's employment, or the Company elects not to renew his employment
agreement, he is entitled to severance equal to 12 months of his then current
base salary. This severance will be payable in accordance with the Company's
customary payroll practices. Under the employment agreement, if Dr. Stemple
terminates his employment, or the Company terminates his employment for cause,
Dr. Stemple is prohibited, for a two-year period from such termination, from
competing with the Company in the eastern half of the United States.
Option Grants in the Last Fiscal Year
The following table sets forth the information with respect to grants
of stock options to purchase the Company's common stock, par value $0.01 per
share (the "Common Stock"), pursuant to the Company's Amended and Restated 1996
Incentive and Non-Incentive Stock Option Plan (the "Plan") granted to the Named
Executive Officers during the fiscal year ended July 31, 1997 and all options
outstanding to the named Executive Officers as of July 31, 1997.
<TABLE>
<CAPTION>
Individual Grants
Number of Percent of Potential Realizable
Securities Total Options Value at Assumed
Underlying Granted to Annual Rates of Stock
Options Employees in Exercise Expiration Price Appreciation
Granted Fiscal year Price Date For Option Term
Name (#) ($/sh) 5% 10%
---- ---- ------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Joseph Looney 50,000(1) 6.3% $10.00 2/03/2007 $29,000 $343,000
20,000(2) 2.5% $ 5.00 3/26/2007 - $20,000
William F. Scheibel, Jr. 50,000(1) 6.3% $10.00 2/03/2007 $29,000 $343,000
20,000(2) 2.5% $ 5.00 3/26/2007 - $20,000
</TABLE>
No options outstanding were exercised or exercisable during the fiscal
year ended July 31, 1997 or as of July 31, 1997. There were no in-the-money
exercisable or unexercisable options at July 31, 1997.
- --------------
(1) Exercisable cumulatively at the rate of 20% per annum commencing February
3, 1999.
(2) Exercisable cumulatively at the rate of 25% per annum commencing May 5,
1999.
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<PAGE>
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of October 21,
1997 (except as otherwise indicated) with respect to the number of shares of the
Company's common stock beneficially owned by each person who is known to the
Company to beneficially own more than 5% of the common stock, the number of
shares of common stock beneficially owned by each director of the Company and
each executive officer of the Company, and the number of shares of common stock
beneficially owned by all executive officers and directors of the Company as a
group. Except as otherwise indicated, each such shareholder has sole voting and
investment power with respect to the shares beneficially owned by such
shareholder.
<TABLE>
<CAPTION>
Shares Percent
Beneficially of Shares
Name and Address Owned Outstanding
<S> <C> <C>
Barry R. Steinberg(1)(3) 4,630,101 54.3%
Joel G. Stemple(1) 626,263 7.3
Joseph Looney(1) 4,700 *
William F. Scheibel, Jr.(1) -
Joel Rothlein(2) 16,500 *
George Bagetakos(1)(4) 2,500 *
Julian Sandler(1)(5) 3,500 *
All executive officers and
directors as a group
(6 persons) 5,283,564
</TABLE>
(1) Address is 160 Oser Avenue, Hauppauge, New York 11788.
(2) Address is 684 Broadway, Massapequa, New York 11758; consists of 3,300
shares held by Kressel, Rothlein & Roth, Esqs., in which Mr. Rothlein is a
partner, and 13,200 shares held by the Kressel, Rothlein & Roth Profit
Sharing Plan. Mr. Rothlein disclaims beneficial ownership of the Common
Stock owned by Kressel Rothlein & Roth, Esq., except to the extent of his
equitable interest in the firm, and of the Common Stock owned by the
Kressel Rothlein & Roth Profit Sharing Plan, except to the extent of his
beneficial interest in such plan.
(3) Excludes 29,000 shares owned by Ilene Steinberg and 29,000 shares owned by
Sheryl Steinberg, daughters of Mr. Steinberg, which shares were purchased
with the proceeds of a loan from Mr. Steinberg. As reported on Schedule
13D filed on March 24, 1997, as amended, Mr. Steinberg, Ilene Steinberg,
and Sheryl Steinberg each disclaim beneficial ownership of the common
stock owned by the others.
(4) Consists of option exercisable on December 4, 1997.
(5) Includes option to purchase 2,500 shares exercisable on December 4, 1997.
* Represents less than one tenth of one percent of outstanding shares.
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<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunder duly authorized.
Manchester Equipment Co., Inc.
Date: January 8, 1998 By: /s/ Barry R. Steinberg
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Barry R. Steinberg
President, Chief Executive Officer
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