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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-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 0-7336
RELM WIRELESS CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 04-2225121
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7505 Technology Drive, West Melbourne, Florida 32904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 984-1414
Indicate by check mark if 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. [ ]
Documents Incorporated by Reference:
None. Part III information contained herein.
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<PAGE>
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Identification of Directors.
<TABLE>
<CAPTION>
Name Age Positions and Term of Office Directorships
---- --- ---------------------------- -------------
<S> <C> <C> <C>
Donald F.U. Goebert 63 President, Chester County Fund, Inc. since 1968; Investors Insurance
Chairman of the Board of Directors and a Director Group, Inc.
of the Company and its predecessor since March
1968; President of the Company's predecessor from
March 1968 to October 1988 and President and CEO
of the Company from April 1993 to December 1997.
Richard K. Laird 52 President and CEO of the Company since December
1997; Executive Vice President and Chief Operating
Officer of Antec Corp. (communications
electronics) from January 1994 to December 1996;
Chairman and CEO of Keptel Inc. (communications
electronics) 1983 to January 1994. Director since
December 1997.
Buck Scott 70 Private investor since January 1995; President of
Electrical Energy Enterprises, Inc. from 1991
through 1994. Director of Company and its
predeces or since 1980.
Robert L. MacDonald 72 Retired, Director of Financial Aid Wharton
Graduate Division and Lecturer in Management,
Wharton School, University of Pennsylvania 1953 to
March 1993. Director of Company since February
1991.
Ralph R. Whitney, Jr. 65 President and CEO of Hammond Kennedy Whitney & IFR Systems, Inc.;
Co., Inc. (private investor) since January 1971; Excel Industries,
Director of Company since January 1992. Inc.; Baldwin
Technologies Inc.;
Control Devices,
Inc.; Selas
Corporation of
America
James C. Gale 50 Managing Director of Sanders, Morris and Mundy Latshaw Enterprises,
from September 1998 to present. Managing Director Inc.; Premium
of Gruntal & Co., LLC (investment banking and Research Worldwide
management) from 1991 to September 1998. Director Ltd.
of Company since October 1993.
George N. Benjamin, III 62 CEO of Keystone Networks since November 1999;
President and CEO of BICC-NA from September
1998 to July 1999; President, BICC Brand-Rex
Co. and Vice President, BICC Cables Corp. from
June 1997 to July 1999; Management Consultant and
Partner in Trig Systems, LLC since July 1987;
President and CEO of Tie Communications, Inc.
from April 1992 to November 1995; Director
since January 1996.
</TABLE>
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(b) Identification of Executive Officers.
<TABLE>
<CAPTION>
Name Age Positions and Term of Office Directorships
---- --- ---------------------------- -------------
<S> <C> <C> <C>
Richard K. Laird 52 President and CEO of the Company since December
1997; Executive Vice President and Chief Operating
Officer of Antec Corp. (communications
electronics) from January 1994 to December 1996;
Chairman and CEO of Keptel Inc. (communications
electronics) 1983 to January 1994. Director since
December 1997.
William P. Kelly 43 Vice President Finance and Chief Financial Officer
of the Company since July 1997; Vice President
Finance and Chief Financial Officer of the
Company's subsidiary RELM Communications, Inc.
from October 1995 to June 1997; Financial Director
of Harris Corp. Semiconductor Sector (semiconductor
manufacturer) from January 1993 to
October 1995.
David Storey 47 Executive Vice President and Chief Operating
Officer of the Company since June 1998; Senior
Vice President of Manufacturing of Antec Corp.
(communications electronics) from January 1994 to
June 1998.
</TABLE>
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than 10% of
the Company's Common Stock (collectively, the "Reporting Persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies of these reports. These
reports are also filed with The NASDAQ. Based on the Company's review of the
copies of these reports received by it, and from written representations
received from the Reporting Persons, the Company believes that all filings
required to be made by the Reporting Persons for the period January 1, 1999
through December 31, 1999 were made on a timely basis except:
o Richard K. Laird failed to file four Form 4 reports on time which
involved one sale transaction in Company common stock in December 1999.
The sale transaction of securities was reported on Form 5 in February
2000.
o William P. Kelly failed to file two Form 4 reports on time which
involved two sale transactions in Company common stock in December
1999. The sale transactions of securities were reported on Form 5 in
February 2000.
o David P. Storey failed to file two Form 4 reports on time which
involved four sale transactions in Company common stock in December
1999. The sale transactions of securities were reported on Form 5 in
February 2000.
Meetings and Committees of the Board of Directors
The Board of Directors has a Compensation Committee and an Audit Committee. The
Company does not have an Executive Committee or Nominating Committee. The Board
of Directors held five meetings in fiscal 1999 and each of the directors
attended at least 75 percent of the aggregate number of meetings of the Board of
Directors and committees (if any) on which he served.
Messrs. Gale and Benjamin served as members of the Compensation Committee during
1999. The primary function of the Compensation Committee is to review and
determine compensation for the principal executive officers of the Company. The
Compensation Committee also administers the Company's 1996 Stock Option Plan for
Non-Employee Directors (the "1996 Directors Plan") and the Company's 1997 Stock
Option Plan (the "1997 Plan") and grants option awards under those plans. The
Compensation Committee did not hold any meetings during 1999.
Messrs. Scott, MacDonald, Whitney and Gale served as members of the Audit
Committee during 1999. The primary function of the Audit Committee is to review
the scope and results of the annual audit, to monitor internal accounting
procedures and to address certain other questions of accounting policy. The
Audit Committee held two meetings during 1999.
Compensation of Directors
During 1999, the Company paid to each of its non-employee directors meeting fees
of $1,000 for attendance at each Board meeting and $500 for attendance at each
meeting of any committee of the Board of Directors which is not held in
conjunction with a meeting of the Board. Beginning with the 1997 fiscal year, as
a result of approval by the shareholders of the 1996 Director Plan, compensation
for non-employee directors was modified to provide for the grant of stock
options in lieu of a quarterly retainer for service as a director. Pursuant to
the terms of the 1996 Director Plan, beginning in 1997, a grant of a stock
option for the purchase of 5,000 shares is made to each non-employee director on
the
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date of each annual meeting of shareholders at which such person is elected
or reelected as a director (or if such annual meeting has not been held by June
30 of such year such grant is made as of such June 30 to each such person who
has been a non-employee director for at least three months). Such options are
granted at an exercise price equal to the fair market value of the Common Stock
on the date of grant, become fully exercisable eleven months after the date of
the grant or, if earlier, upon a change of control as defined in the 1996
Director Plan and expire five years from the date of the grant or earlier in the
event service as a director ceases. Such options were granted to the Company's
non-employee directors as of June 30, 1998 at an exercise price of $3.06 per
share and as of June 14, 1999 at an exercise price of $2.88 per share.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth certain information regarding compensation paid
during each of the last three years to Messrs. Laird, Storey and Kelly, who
served as the Company's President and Chief Executive Officer, Executive Vice
President and Chief Operating Officer, and Vice President Finance and Chief
Financial Officer, respectively, during 1999. No other executive officer of the
Company was paid salary and bonus compensation which exceeded $100,000 during
1999 (collectively, the "Named Executive Officers.")
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Number of
Other Annual Securities All Other
Name and Principal Salary Bonus Compensation Underlying Compensation
Position Year ($) ($) ($)(1) Options(#) ($)
-------- ---- --- --- ------ ----------- ---
<S> <C> <C> <C> <C> <C> <C>
Richard K. Laird 1999 $200,000 - - 150,000
President and CEO (2) 1998 232,692 - - 100,000
1997 11,538 - - 100,000
David P. Storey 1999 227,770 - - 145,000
Executive Vice President 1998 98,904 - - 100,000
and 1997 - - - -
Chief Operating Officer
William P. Kelly 1999 117,200 - - 75,000
Vice President Finance 1996 115,535 - - -
and Chief Financial 1997 96,746 - - -
Officer
</TABLE>
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(1) The named executive officers did not receive any other annual
compensation not categorized as salary or bonus except for perquisites
and other personal benefits which in the aggregate did not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported
for such named executive officer.
(2) Under the terms of Mr. Laird's employment, he was granted options under
the Company's 1997 Stock Option Plan for the purchase of 100,000 shares
of Common Stock upon the commencement of his employment and is to be
granted options for additional increments of 50,000 shares six months,
twelve months, eighteen months and twenty-four months thereafter. Such
options will be granted at the then current market value of the shares.
The options granted and to be granted will become exercisable in
increments of 25% of the option on the first, second, third and fourth
year anniversaries of the date of the grant. In the event of a change
in control, as defined in the option agreements, 50% of any otherwise
unvested options shall become vested and exercisable. Mr. Laird shall
also be eligible to receive a bonus of up to 50% of his salary upon
attaining earnings per share and/or share price goals or other
performance criteria to be mutually agreed upon with the Board of
Directors.
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Stock Option Grants
The following table contains information concerning the grant of stock options
under the Company's 1997 Stock Option Plan to the executive officers named in
the Summary Compensation Table above (the "Named Officers") during 1999.
Option Grants in 1999
Individual Grants
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Number of Annual Rates of Stock
Securities Percent of Total Exercise Price Appreciation for
Underlying Options Granted or Base Option Term (3)
Options Granted to Employees in Price Expiration ----------------------
Name (#)(1) 1999 ($/Sh) Date(2) 5%($) 10%($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard K. Laird 50,000 13.5% $3.00 03/15/09 $42,000 $ 92,000
50,000 13.5% $2.63 06/01/09 $37,000 $ 81,000
50,000 13.5% $4.25 12/01/09 $59,000 $131,000
David P. Storey 145,000 39.2% $3.13 08/09/09 $124,000 $278,000
William P. Kelly 75,000 20.3% $3.13 08/09/09 $64,000 $144,000
</TABLE>
- -------------------
(1) These are options granted under the 1997 Stock Option Plan. Options
with respect to 64,000 shares are incentive stock options ("ISOs")
under ss.422 of the Internal Revenue Code of 1986, as amended, and
options with respect to 36,000 shares are non-qualified stock options.
The options are exercisable with respect to increments of 25% of the
optioned shares (prorated among the ISOs and the non-qualified options)
as of the first, second, third and fourth anniversaries of the option
grant date. These options were granted at fair market value on the date
of the grant.
(2) The term of the options is ten (10) years from the date of grant unless
terminated earlier due to termination of employment, disability or
death.
(3) The potential realizable value of the options granted in 1999 was
calculated by multiplying those options by the excess of (a) the
assumed market value of Common Stock, if the market value of Common
Stock were to increase 5% or 10% in each year of the options' 5-year
term over (b) the base price shown. This calculation does not take into
account any taxes or other expenses which might be owed. The 5% and 10%
appreciation rates are set forth in the Securities and Exchange
Commission rules and no representation is made that the Common Stock
will appreciate at these assumed rates or at all.
The Company does not currently have (and has not previously had) any plan
pursuant to which any stock appreciation rights ("SARs") may be granted.
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<PAGE>
Stock Option Exercises and Holdings
The following table sets forth information relating to options exercised during
1999 by each of the Named Officers and the number and value of options held on
December 31, 1999 by such individuals.
Aggregated Option Exercises in 1999 and Option Values at December 31, 1999
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Underlying Value of Unexercised
on Value Unexercised In-the-Money Options at
Exercise Realized Options at Dec. 31, 1999 (#) Dec. 31, 1999 ($)(1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- --- --- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard K. Laird (2) 0 0 75,000 275,000 $20,313 $92,188
David P. Storey (2) 0 0 25,000 220,000 $ 1,625 $ 4,875
William P. Kelly 0 0 2,500(3) 75,000(2) 0 0
</TABLE>
- ---------------
(1) Total value of unexercised options is based upon the difference between
the last sales price of the Company's Common Stock on the NASDAQ on
December 31, 1999, which was $3.125 per share, and the exercise price
of the options, multiplied by the number of option shares.
(2) Options granted under the 1997 Stock Option Plan.
(3) Options granted under the Company's 1988 Stock Plan.
Compensation Committee Interlocks and Insider Participation
During 1999, the Compensation Committee of the Company's Board of Directors was
composed of independent, outside directors, Messrs. Gale (Chairman) and
Benjamin. As noted above, the Company's compensation program for its executives
is administered by the Board of Directors with the advice and counsel of the
Compensation Committee. As a result, Mr. Laird provides input to the
deliberations by the Committee and the Board concerning executive compensation.
Mr. Laird did not vote as a member of the Board in the Board action which
affected his compensation.
Neither of the compensation committee members is or has been an officer or
employee of the Company or any of its subsidiaries. In addition, neither Gale
nor Benjamin has, or has had, any relationship with the Company which is
required to be disclosed under "Certain Relationships and Related Transactions."
No Company executive officer currently serves on the compensation committee or
any similar committee of another public company.
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<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The table below sets forth certain information as of April 13, 2000 regarding
the beneficial ownership, as defined in regulations of the Securities and
Exchange Commission, of Common Stock of (i) each person who is known to the
Company to be the beneficial owner of more than 5% of the outstanding shares of
the Company's Common Stock, (ii) each director of the Company and each of the
Named Officers, and (iii) all directors and executive officers as a group.
Unless otherwise specified, the named beneficial owner has sole voting and
investment power.
<TABLE>
<CAPTION>
Name of Beneficial Owner Amount Beneficially Owned Percent of Class (1)
- ------------------------ ------------------------- --------------------
<S> <C> <C>
Dimensional Fund Advisors Inc. 300,933(2) 5.9%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Special Situations Private Equity Fund, L.P., 523,077(7) 7.9%
MG Advisers L.L.C., Austin W. Marxe,
and David Greenhouse
Donald F.U. Goebert 1,411,412(3)(4) 27.7%
400 Willowbrook Lane
West Chester, PA 19382
Richard K. Laird 153,270(5)(8) 2.9%
Ralph R. Whitney, Jr. 45,469(5) *
Buck Scott 35,000(5) *
James C. Gale 35,000(5) *
George N. Benjamin, III 22,266(5) *
Robert L. MacDonald 15,000(5) *
David P. Storey 25,000(5) *
William P. Kelly 2,500(5) *
All executive officers and directors as a 1,744,917(3)(4)(6)(8) 34.3%
group (10 persons)
</TABLE>
- -----------------------------
* Less than 1%
(1) Based upon 5,090,405 outstanding shares as of April 13, 2000 and, with
respect to each holder of options exercisable, or notes convertible,
within 60 days of April 13, 2000, the shares issuable under such
instruments.
(2) According to the Schedule 13G filed by Dimensional Fund Advisors Inc.
(the "Reporting Person") dated February 9, 2000, the Reporting Person
had sole voting power and sole investment power with respect to all of
the reported shares, and all of the reported shares were owned by
advisory clients of the Reporting Person. The Reporting Person
disclaimed beneficial ownership of the reported shares.
(3) Includes 90,942 shares owned by Chester County Fund, Inc., the majority
shareholder of which is Mr. Goebert and 60,000 shares owned by a
partnership controlled by Mr. Goebert.
(4) Includes 23,366 shares held in a custodial account for the Company's
Employee Stock Purchase Program, of which Mr. Goebert is a custodian,
and 789 shares held in a Trust under the Company's 401(k)
Retirement-Investment Plan, of which Mr. Goebert is a Trustee.
(5) Share ownership of the following persons includes shares subject to
immediately exercisable options or options exercisable within 60 days
of April 13, 2000, as follows: for Mr. Laird -112,500 shares; for Mr.
Whitney -15,000 shares; for Mr. Scott -15,000 shares; for Mr. Gale
-15,000 shares; for Mr. Benjamin -19,166 shares; for Mr. MacDonald
-15,000 shares; for Mr. Storey -25,000 shares; and for Mr. Kelly -2,500
shares.
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(6) Includes an aggregate of 219,166 shares subject to immediately
exercisable options or options exercisable within 60 days of April 13,
2000 held by executive officers and directors as a group.
(7) Special Situations Private Equity Fund, L.P. (SSPEF), SSP and MG
Advisers L.L.C. ("MG"), its general partner, are deemed to have sole
power to vote or to direct the vote and to dispose or to direct the
disposition of 523,077. Austin W. Marxe ("Marxe") and David Greenhouse
("Greenhouse") are deemed to have shared power to vote or dispose of
the shares by virtue of being executive officers of MG. A Schedule 13G
filed by SSPEF, MG, Marxe and Greenhouse with the Securities and
Exchange Commission ("SEC") on April 11, 2000 is the source of this
information.
(8) Includes 15,385 shares of Common Stock of the Company issuable upon
conversion of $50,000 convertible subordinated promissory notes which
are beneficially owned by Mr. Laird.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
NONE
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RELM WIRELESS CORPORATION
(Registrant)
Date: April 28, 2000 By: /s/ Richard K. Laird
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Richard K. Laird,
President, Chief Financial Officer
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