UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
No. 2
(Mark One)
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999 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: 0-22529
inTEST Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2370659
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(State or other Jurisdiction (I.R.S. Employer Identification No.)
Incorporation or Organization)
2 Pin Oak Lane, Cherry Hill, NJ 08003
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: 856-424-6886
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, par
value $.01 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) 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 and non-voting common equity held by
non-affiliates of the Registrant computed by reference to the closing price of
such stock on March 22, 2000 as quoted on the Nasdaq National Market system
was $90,354,167.
The number of shares outstanding of the Registrant's Common Stock, as of March
22, 2000 is 8,582,827.
<PAGE>
inTEST Corporation is filing this Form 10-K/A No. 2 to amend and restate the
information set forth in Item 11 of its 10-K/A filed on April 26, 2000.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation paid by us for services rendered during the years ended December
31, 1997, 1998 and 1999, to our chief executive officer and five most highly
compensated executive officers whose total annual salary and bonus exceeded
$100,000 during the year ended December 31, 1999 (each a "named executive
officer"):
Summary Compensation Table
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<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
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Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options(#) Compensation
------------------------- ---- -------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Alyn R. Holt 1999 $251,582 $ -- $ 5,602(1) -- $ 69,565(2)
Chairman 1998 226,238 -- 53,264(1) -- 65,661(2)
1997 198,010 -- 53,675(1) -- 137,117(2)
Robert E. Matthiessen 1999 $181,994 $67,288(3) $ 5,602(4) -- $ 66,208(5)
President, Chief Executive 1998 171,576 -- 5,320(4) -- 53,778(5)
Officer and Director 1997 135,914 -- 8,577(4) -- 6,240(5)
Douglas W. Smith 1999 $155,260 $67,388(3) $ 8,630(6) -- $ 4,998(7)
Executive Vice President, 1998 56,250(8) -- - -- 3,874(7)
Chief Operating Officer 1997 - -- - -- -
and Director
William M. Stone(9) 1999 $142,193 $15,384 $ 5,227(10) -- $ 13,188(11)
President and Chief 1998 113,166 -- 5,213(10) 46,250(12) 7,674(11)
Executive Officer of 1997 55,682 -- 2,961(10) 11,562(13) 2,231(11)
Temptronic Corporation
and Director
Daniel J. Graham 1999 $136,850 $ -- $ 7,882(14) -- $ 6,888(15)
Vice Chairman, Senior Vice 1998 126,704 -- 12,862(14) -- 7,132(15)
President and Director 1997 112,040 -- 19,088(14) -- 32,077(15)
Hugh T. Regan, Jr. 1999 $128,492 $30,000(3) $ 5,602(16) -- $ 5,996(17)
Treasurer, Secretary and 1998 118,974 -- 2,533(16) 50,000(18) 6,240(17)
Chief Financial Officer 1997 95,400 -- 2,348(16) -- 6,240(17)
</TABLE>
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<PAGE>
(1) Includes $5,602, $5,320 and $4,931 for group health insurance in 1999,
1998 and 1997, respectively; $24,059 and $9,728 for company paid personal
travel in 1998 and 1997, respectively; $22,688 for the annual lease value
of an automobile for Alyn R. Holt in 1998 and $30,896 for the lease of
automobiles for Alyn R. and Connie E. Holt in 1997; and $1,197 and $6,720
for use of company staff time for personal matters in 1998 and 1997,
respectively.
(2) Includes $4,636, $4,847 and $4,847 for premiums paid on life insurance
for Mr. Holt in 1999, 1998 and 1997, respectively; $4,750, $4,750 and
$4,750 for matching contributions to Mr. Holt's 401(k) Plan account in
1999, 1998 and 1997, respectively; and $60,179, $56,064 and $127,520 for
serving as a director of inTEST Limited and inTEST Kabushiki Kaisha in
1999, 1998 and 1997, respectively.
(3) Paid in March 2000.
(4) Includes $3,646 for the annual lease value of an automobile for Mr.
Matthiessen in 1997; and $5,602, $5,320 and $4,931 for group health
insurance in 1999, 1998 and 1997, respectively.
(5) Includes $1,279, $1,490 and $1,490 for premiums paid on life insurance
for Mr. Matthiessen in 1999, 1998 and 1997, respectively; $4,750, $4,750
and $4,750 for matching contributions to Mr. Matthiessen's 401(k) Plan
account in 1999, 1998 and 1997, respectively; and $60,179 and $47,538 for
serving as a director of inTEST Limited and inTEST Kabushiki Kaisha in
1999 and 1998, respectively.
(6) Represents amount paid for group health insurance in 1999.
(7) Includes $1,248 and $124 for premiums paid on life insurance for Mr.
Smith in 1999 and 1998, respectively; and $3,750 and $3,750 for matching
contributions to Mr. Smith's 401(k) Plan account in 1999 and 1998,
respectively.
(8) Represents salary paid from August 3, 1998, the date Mr. Smith was
elected as an officer of inTEST.
(9) Represents salary paid to Mr. Stone by Temptronic Corporation in periods
preceding the acquisition of Temptronic by inTEST.
(10) Includes $5,227, $5,213 and $2,961 for group health insurance for Mr.
Stone in 1999, 1998 and 1997, respectively.
(11) Includes $571, $644 and $485 for premiums paid on life insurance for Mr.
Stone in 1999, 1998 and 1997, respectively; $4,540 and $3,346 for
matching contributions to Mr. Stone's 401(k) Plan account in 1999 and
1998, respectively; and $8,077, $3,684 and $1,746 for the value of shares
of Temptronic Corporation's common stock allocated to Mr. Stone's account
in the Temptronic Equity Participation Plan in 1999, 1998 and 1997,
respectively.
(12) Represents options to purchase 50,000 shares of Temptronic Corporation
common stock which were converted to options to purchase 46,250 shares of
inTEST Corporation upon the acquisition of Temptronic by inTEST.
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<PAGE>
(13) Represents options to purchase 12,500 shares of Temptronic Corporation
common stock which were converted to options to purchase 11,562 shares of
inTEST Corporation upon the acquisition of Temptronic by inTEST.
(14) Includes $5,375 and $10,750 for the annual lease value of an automobile
for Mr. Graham in 1998 and 1997, respectively; and $7,882, $7,487 and
$6,938 for group health insurance in 1999, 1998 and 1997, respectively.
(15) Includes $2,138, $2,382 and $2,382 for premiums paid on life insurance
for Mr. Graham in 1999, 1998 and 1997, respectively; $4,750, $4,750 and
$4,750 for matching contributions to Mr. Graham's 401(k) Plan account in
1999, 1998 and 1997, respectively; and $24,945 for serving as a director
of inTEST Limited in 1997.
(16) Includes $5,602, $2,533 and $2,348 for group health insurance for Mr.
Regan in 1999, 1998 and 1997, respectively.
(17) Includes $1,246, $1,490 and $1,490 for premiums paid on life insurance
for Mr. Regan in 1999, 1998 and 1997, respectively; and $4,750, $4,750
and $4,750 for matching contributions to Mr. Regan's 401(k) Plan account
in 1999, 1998 and 1997, respectively.
(18) Includes (i) the grant of options to purchase 20,000 shares of common
stock and (ii) the repricing of options to purchase 30,000 shares.
Stock Options
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We did not grant any stock options during the year ended December 31, 1999
to the named executive officers.
Exercise of Options
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The following table sets forth information regarding the exercise of stock
options and the value of any unexercised stock options of each of the named
executive officers, who exercised or held options, during the fiscal year
ended December 31, 1999:
Aggregated Option Exercises in 1999 and December 31, 1999 Option Values
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<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money Options at
Acquired Options At 12/31/99 12/31/99 (1)
on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Hugh T. Regan, Jr. 0 $ 0 16,000 34,000 $199,000 $436,000
William M. Stone 4,625(2) 26,200(3) 9,250 43,937 128,945 640,507
</TABLE>
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<PAGE>
(1) Based upon the closing price for our common stock as reported on the
Nasdaq National Market System on December 31, 1999 of $18.00 less the
exercise price.
(2) Mr. Stone exercised options to purchase 5,000 shares of Temptronic
Corporation on September 29, 1999. Upon the merger of Temptronic and
inTEST, the 5,000 shares of Temptronic Corporation converted to 4,625
shares of inTEST Corporation.
(3) Based upon an independent valuation of $5.25 per share for the common
stock of Temptronic as of September 30, 1999, less the exercise price.
Repricing of Options
--------------------
The following table sets forth certain information concerning the
repricing of options held by any executive officer during the last ten
completed fiscal years:
Ten-Year Option Repricing Table
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<TABLE>
<CAPTION>
Length of
Number of Exercise Original
Securities Market Price Price at Option Term
Underlying Of Stock at Time of New Remaining
Repriced Time of Repricing Exercise at Date of
Name and Position Date Options Repricing (per share) Price Repricing
----------------- ------- --------- ------------ ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Hugh T. Regan, Jr., 6/30/98 30,000 $6.00 $7.50 $6.00 9 years
Treasurer, Secretary
and Chief Financial
Officer
Jerome R. Bortnem, 6/30/98 10,000 $6.00 $7.50 $6.00 9 years
Vice President of
Sales and Marketing
</TABLE>
Employment Agreements
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In connection with the acquisition of Temptronic, we agreed with William
M. Stone, Temptronic's President and Chief Executive Officer, to enter into a
new employment agreement. The new agreement has a term of three years
commencing on March 9, 2000, the date of the acquisition, and may be extended
for successive annual periods if not terminated earlier in accordance with the
terms of the agreement. The agreement provides that Mr. Stone will serve as
the President and Chief Executive Officer of Temptronic Corporation with a
base salary of $160,000 per annum, which may increase, but not decrease,
annually. Mr. Stone will receive, for each calendar year during the term of
the agreement, a bonus equal to 1% of the pre-tax profit of Temptronic, fringe
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<PAGE>
benefits and reimbursement for reasonable business expenses. In June 2000, we
agreed to amend Mr. Stone's employment agreement to recognize Mr. Stone's
contribution to Temptronic's return to profitability and intend to award to
Mr. Stone incentive stock options to purchase 60,000 shares of inTEST common
stock (vesting over four years) upon approval by our stockholders of an
amendment to the 1997 Stock Plan increasing the number of shares available for
issuance under the plan, and to pay Mr. Stone an additional bonus of $100,000,
annually, in 2000 and in each of the succeeding four calendar years.
Mr. Stone's employment under the agreement may be terminated (i) by him if
he resigns without cause, (ii) by reason of his death or disability, (iii) by
Temptronic without cause or (iv) by Temptronic for cause. If his employment
is terminated by reason of death or disability or by Temptronic without cause,
Mr. Stone will be entitled to base salary and all fringe benefits for the
remainder of the term of the agreement or one year, whichever is longer,
including: (1) all fringe benefits for any period subsequent to the
termination of employment, and (2) continued insurance coverage for Mr. Stone
and his family as broad and as is in effect at the time of the termination, at
his expense, until he reaches or would have reached age 65. In addition, upon
such termination, the incentive stock options to be issued to him upon
approval of the proposal to amend the 1997 Stock Plan would immediately vest
and the fixed bonus amounts not then paid would accelerate and become payable
within 30 days. If Mr. Stone resigns, Temptronic will have no further
liability to him for salary, bonus or other compensation or benefits from and
after the effective date of his resignation, other than payment, when
calculated, of any bonus to which he may be entitled which may have accrued
through the effective date of termination. If his employment is terminated
for cause, Temptronic will have no further obligation to Mr. Stone except
payment of salary that may have accrued through the effective date of
termination.
Compensation Committee Interlocks and Insider Participation
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The Compensation Committee consisted of Dr. Daniels and Messrs. Endres,
Holt and Slayton during 1999. Mr. Holt serves as an executive officer of
inTEST. Dr. Daniels provides us with consulting services relating to
intellectual property matters. In connection with such services, Dr. Daniels
was paid fees totaling $66,400 during 1999.
Director Compensation
---------------------
We pay our non-employee directors a quarterly retainer of $2,500, a fee of
$2,000 per board meeting and a fee of $1,000 per committee meeting that falls
on a day other than a board meeting. In addition, we reimburse non-employee
directors for travel expenses and other costs associated with attending board
or committee meetings. We do not pay additional cash compensation to our
officers who also serve as directors. However, officers who serve as
directors of our foreign subsidiaries receive compensation as approved each
year by such subsidiary's board of directors.
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<PAGE>
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
inTEST CORPORATION
By: /s/ Hugh T. Regan, Jr.
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Hugh T. Regan, Jr.,
Treasurer, Secretary and
Chief Financial Officer
Date: June 30, 2000
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