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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 26, 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 0-8567
DATAMETRICS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 95-3545701
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
26604 Agoura Road
Calabasas, CA 91302-1954
(Address of principal executive offices)
Registrant's telephone number, including area code (818) 871-0300
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
<S> <C>
Common Stock, $0.01 par value American Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether 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 periods that 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 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. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant (based on the closing price of such stock as reported by the
American Stock Exchange on February 10, 1998) was approximately $18,279,542.
The number of shares outstanding of the Registrant's Common Stock as of
February 10, 1998 was 14,772,830.
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The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended October 26, 1997 as set forth in the pages attached hereto:
1. PART III (Including Items 10-13) Pages 2 - 9
2. Signatures Page 10
2
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Part III of the Registrant's Annual Report on Form 10-K for the fiscal year
ended October 26, 1997 is amended and restated in its entirety as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are as follows:
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<CAPTION>
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE
- ------------------- --- ------------------------- --------------
<S> <C> <C> <C>
Daniel P. Ginns 47 Chief Executive Officer, October 1996
Secretary and Chairman of
the Board of Directors
Adrien A. Maught, Jr. 48 President and a Director October 1996
Kenneth S. Polak 42 Chief Financial Officer --
and Assistant Secretary
James D. Sturgeon, Jr. 64 Chief Operating Officer --
Douglas S. Friedenberg 46 Director October 1996
James Haber 34 Director October 1996
Stephen R. Gass 49 Director January 1997
</TABLE>
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DANIEL P. GINNS has been the Chief Executive Officer, Secretary and
Chairman of the Board of Directors of the Company since October 1996. Mr. Ginns
also has served as the President of Belmont Capital Inc., a financial and
management advisory firm, for more than the past five years. Mr. Ginns is also
a Director of StarBase Corporation, a software development company traded on the
Nasdaq SmallCap Market.
ADRIEN A. MAUGHT, JR. has served as President of the Company since January
1997 and as the Chief Operating Officer and Interim Chief Financial Officer of
the Company from October 1996 to April 1997. From 1983 to 1996, Mr. Maught
served as the Vice President of the Winchester Partnership, a real estate
development partnership; and from 1991 to 1996, Mr. Maught served as the
President and Chief Executive Officer of Park Plaza, Inc., a parking and
transportation services company.
KENNETH S. POLAK has been employed by the Company for more than five years
and has served as its Chief Financial Officer since April 1997 and its Assistant
Secretary since November 1996.
JAMES D. STURGEON, JR. has been employed by the Company for more than five
years and has served as its Chief Operating Officer since April 1997.
DOUGLAS S. FRIEDENBERG has been the President of Firebird Capital
Management, an investment advisory firm, since 1993. From July 1991 through
March 1993, Mr. Friedenberg was the President of Unicorn Capital Management, a
hedge fund manager. For more than five years prior thereto, Mr. Friedenberg
managed investor portfolios for Morgan Stanley & Company. Mr. Friedenberg is a
director of Stratford Acquisition Corporation (to be renamed Novacrete
Technology Inc.), a manufacturer of additives for cement-based products that is
traded on the Nasdaq Over-the-Counter Bulletin Board.
JAMES HABER has been the sole general partner of Infiniti Investment Fund
L.P., an investment fund, since May 1991. Mr. Haber also has served as the
trading advisor of Tendencia Overseas Fund, Ltd., an investment company, since
October 1993.
STEPHEN R. GASS has been employed by Arthur A. Watson & Co., Inc., a
private insurance company, since 1976 where he currently serves as an Executive
Vice President. Since December 1997, Mr. Gass also has served as the President
of Hickory Hill Capital Management L.L.C., a capital investment company.
There are no family relationships among any of the Company's directors and
executive officers.
3
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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
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent stockholders are required by
regulations promulgated by the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) forms that they file.
With reference to transactions during the period October 28, 1996 through
October 26, 1997, to the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written representations, no
other reports were required. All Section 16(a) filing requirements applicable
to its officers, directors and greater than ten percent stockholders were
met.
4
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ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended October 29, 1995,
October 27, 1996 and October 26, 1997 ("fiscal 1997"), the compensation earned
by the current Chief Executive Officer of the Company and the four most highly
compensated executive officers of the Company at the end of fiscal 1997 (the
foregoing persons are hereinafter referred to as the "Named Executive
Officers").
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LONG-TERM COMPENSATION
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ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- -----------------------------------------
OTHER
ANNUAL RESTRICTED SECURITIES LONG-TERM
COMPEN- STOCK UNDERLYING INCENTIVE ALL OTHER
NAME AND PRINCIPAL SATION AWARD(S) OPTIONS/ PLAN COMPEN-
POSITION(S) YEAR SALARY ($) BONUS($) ($)(3) ($) SARs(#) PAYOUTS($) SATION ($)
- -------------------- ------ ----------- --------- --------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daniel P. Ginns 1997 261,035(1) 24,000 27,000(4) -- 700,000 -- --
Chief Executive
Officer, Secretary 1996 17,500 -- -- -- 15,000 -- --
and Chairman of the 1995 -- -- -- -- -- -- --
Board of Directors
Adrien A. Maught, Jr. 1997 219,901(2) 21,500 7,500(4) -- 500,000 -- --
President and a 1996 13,500 -- -- -- 15,000 -- --
Director 1995 -- -- -- -- -- -- --
Kenneth S. Polak 1997 103,389 -- -- -- 1,750 -- --
Chief Financial 1996 99,224 -- -- -- 5,000 -- --
Officer and
Assistant Secretary 1995 97,120 1,123 -- -- 2,000 -- --
James D. Sturgeon, Jr. 1997 123,882 -- -- -- 1,750 -- --
Chief Operating 1996 118,646 -- -- -- 10,000 -- --
Officer 1995 111,911 1,583 -- -- 4,000 -- --
William J. Foti 1997 72,681 -- 27,143(5) -- 1,750 -- --
Vice President 1996 89,383 -- 67,772 -- 10,000 -- --
1995 86,244 1,221 50,270 -- 4,000 -- --
</TABLE>
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(1) Includes related party payments of $72,250 for fees paid to Belmont Capital
Inc. for consulting services prior to becoming an employee of the
Company.
(2) Includes related party payments of $45,750 for fees paid to Belmont Capital
Inc. for consulting services prior to becoming an employee of the
Company.
(3) Does not include perquisites to each of the Named Executive Officers that
did not exceed the lesser of $50,000 or 10% of the total salary and bonus
for such officer.
(4) Directors fees.
(5) Other annual compensation to Mr. Foti represents commissions on sales
orders booked. Mr. Foti's employment with the Company ended in June
1997.
5
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STOCK OPTION GRANTS IN FISCAL 1997
The following table sets forth information regarding the grant of
stock options during fiscal 1997 to the Named Executive Officers:
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<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS(1) AT ASSUMED ANNUAL
--------------------------------------------------------------- RATES OF STOCK
PERCENT OF PRICE
TOTAL OPTIONS APPRECIATION FOR
NUMBER OF GRANTED TO EXERCISE OPTION TERM($)
OPTIONS EMPLOYEES IN PRICES PER EXPIRATION --------------------
NAME GRANTED FISCAL 1997 SHARE($) DATE(2) 5% 10%
- --------------------- ------------ --------------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Daniel P. Ginns 700,000(2) 51.50% $2.00 11/13/2001 $ 0(4) $9,170(4)
Adrien A. Maught, Jr. 500,000(2) 36.78 2.00 11/13/2001 0(4) 6,550(4)
James D. Sturgeon, Jr. 1,750(3) 0.13 1.50 03/31/2002 725 1,603
Kenneth S. Polak 1,750(3) 0.13 1.50 03/31/2002 725 1,603
William J. Foti 1,750(3) 0.13 1.50 03/31/2002 725 1,603
</TABLE>
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(1) No stock appreciation rights were granted to any of the Named Executive
Officers or other employees of the Company in fiscal 1997.
(2) Warrants became exercisable upon their grant on November 13, 1996.
(3) Exercisable after one year.
(4) Market price of the Common Stock at time of grant was $1.25 per share based
on the closing price as reported by the American Stock Exchange on November
13, 1996.
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND OCTOBER 26, 1997 OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during fiscal 1997 and
unexercised options held at the end of fiscal 1997.
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<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT
OPTIONS AT OCTOBER 26, 1997 (#) OCTOBER 26, 1997($)
SHARES ACQUIRED VALUE ------------------------------- ----------------------------
NAME ON EXERCISE (#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------- ------------------- ------------ -------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel P. Ginns 0 0 703,750 11,250 6,563 19,688
Adrien A. Maught, Jr. 0 0 503,750 11,250 6,563 19,688
James D. Sturgeon, Jr. 0 0 56,250 9,500 70,000 3,063
Kenneth S. Polak 0 0 13,124 7,751 0 3,063
</TABLE>
6
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DIRECTORS COMPENSATION
In October 1996, the Board of Directors consisted of the following
members: Adrien A. Maught, Jr., Douglas S. Friedenberg, James Haber and Daniel
P. Ginns. Stephen R. Gass became a director in January 1997. As Chairman of
the Board, Mr. Ginns received an annual retainer fee of $27,000 in fiscal 1997
and will receive an annual retainer fee of $32,000 in fiscal year 1998. All
other directors received annual retainer fees of $7,500 in fiscal 1997 and will
receive annual retainer fees of $12,500 in fiscal year 1998. In fiscal 1997,
each director was issued 10,000 shares of Common Stock in addition to the above
retainer fees. In fiscal year 1998, the Company issued to each director 10,000
shares of Common Stock in addition to the above retainer fees for fiscal year
1998.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
In January 1997, the Company entered into employment agreements with
Mr. Ginns as Chief Executive Officer of the Company, and Mr. Maught as President
of the Company. Each of these agreements currently terminates on December 31,
2002, but automatically renews on July 1 of each year so that the remaining term
of each agreement will not be less than four and one-half years. Under these
agreements, Mr. Ginns and Mr. Maught are paid an initial annual base salary of
$240,000 and $215,000, respectively. For each calendar year commencing with the
calendar year beginning January 1, 1998, the base salary under these agreements
is adjusted by the greater of 3% or a percentage equal to the percentage change
in the Consumer Price Index for the year then ended from the prior calendar
year. In addition to the base salary, the Compensation Committee of the Board of
Directors may, in its sole discretion, pay a performance-based bonus to Mr.
Ginns or Mr. Maught in any year during the term of their respective agreements.
The Company has the right to terminate Mr. Ginns' or Mr. Maught's
employment without cause at any time; provided, however, that Mr. Ginns and Mr.
Maught each shall be entitled to payment of his base salary for a period equal
to the greater of one year from the date of termination or the remainder of the
employment agreement; and the Company shall continue to provide to each such
executive (and each member of his immediate family) all benefits provided by the
employment agreement. In addition, upon termination in connection with a
certain change in control of the Company, Mr. Ginns and Mr. Maught each shall be
entitled to a cash payment equal to the lesser of three years' base salary or
the maximum amount which would not result in any portion of such payment being
subject to the excise tax under Section 4999 of the Internal Revenue Code.
In connection with these employment agreements, the Company granted
Mr. Ginns and Mr. Maught warrants to purchase up to 700,000 and 500,000 shares,
respectively, of the Company's Common Stock at a purchase price of $2.00 per
share. All of these warrants are immediately exercisable and have a term of five
years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, Messrs. Haber, Friedenberg and Gass served on the
Compensation Committee of the Company's Board of Directors. No member of the
Compensation Committee was or is an officer or employee of the Company. Mr.
Gass is an Executive Vice President and stockholder of Arthur A. Watson & Co.,
Inc., a private insurance company. During fiscal 1997, the Company paid
$371,225 and $450,000 to Arthur A. Watson & Co., Inc. for liability and medical
insurance, respectively. There were no Compensation Committee interlocks or
insider participation during fiscal 1997.
7
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of February 10, 1998, the number and
percentage ownership of the Company's Common Stock by each director of the
Company, certain executive officers and by all officers and directors of the
Company as a group. To the Company's knowledge, except as set forth below, no
person or entity owns 5% or more of the Company's Common Stock. Except as
otherwise indicated, and subject to applicable community property and similar
laws, each of the persons named has sole voting and investment power with
respect to the shares of Common Stock shown as beneficially owned.
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<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF
NAME AND ADDRESS(1) OWNERSHIP OUTSTANDING SHARES
- -------------------------------------- ------------------------------------ --------------------------------
<S> <C> <C>
Directors
James Haber 1,327,225(2) 9.0%
Douglas S. Friedenberg 986,496(3) 6.7
Daniel P. Ginns 725,625(4) 4.9
Adrien A. Maught, Jr. 525,625(5) 3.6
Stephen R. Gass 38,750(6) *
James D. Sturgeon, Jr. 70,363(7) *
Kenneth S. Polak 20,956(8) *
William J. Foti 27,561 *
All Officers and Directors as a group(8) 3,786,761 25.6%
</TABLE>
- ---------------------
* Less than 1%.
(1) The addresses of all persons listed is c/o Datametrics Corporation, 26604
Agoura Road, Calabasas, California 91302-1954.
(2) Included in the amount are 125,625 shares of Common Stock which Mr. Haber
has sole voting and investment power. The remaining shares are owned
beneficially through various investment funds. Includes 100,000 shares
subject to warrants presently exercisable which have an exercise price of
$2.00 and expire on February 5, 2002. Includes 5,625 shares subject to
non-qualified stock options which have an exercise price of $1.25 and
expire on October 8, 2001. Excludes 9,375 shares subject to non-qualified
stock options which have an exercise price of $1.25 and expire on October
8, 2001.
(3) Includes 220,004 shares subject to warrants which are presently
exercisable. Of such warrants 120,004 warrants have an exercise price of
$1.50 and expire on November 25, 2001 and 100,000 warrants have an exercise
price of $2.00 and expire on February 5, 2002. Includes 5,625 shares
subject to non-qualified stock options which have an exercise price of
$1.25 and expire on October 8, 2001. Excludes 9,375 shares subject to non-
qualified stock options which have an exercise price of $1.25 and expire on
October 8, 2001. Also included in the amount are 158,125 shares of
common stock which Mr. Friedenberg has sole voting and investment power.
The remaining shares are owned beneficially through various investment
funds.
(4) Includes 700,000 shares subject to warrants which are presently
exercisable, have an exercise price of $2.00 and expire on November 13,
2001. Includes 5,625 shares subject to non-qualified stock options which
have an exercise price of $1.25 and expire on October 8, 2001. Excludes
9,375 shares subject to non-qualified stock options which have an exercise
price of $1.25 and expire on October 8, 2001.
(5) Includes 500,000 shares subject to warrants which are presently
exercisable. These warrants have an exercise price of $2.00 and expire on
November 13, 2001. Includes 5,625 shares subject to non-qualified stock
options which have an exercise price of $1.25 and expire on October 8,
2001. Excludes 9,375 shares subject to non-qualified stock options which
have an exercise price of $1.25 and expire on October 8, 2001.
(6) Includes 3,750 shares subject to non-qualified stock options which have an
exercise price of $1.4375 and expire on January 31, 2002. Excludes 11,250
shares subject to non-qualified stock options which have an exercise price
of $1.4375 and expire on January 31, 2002.
(7) Includes 60,375 shares subject to qualified stock options. Of such options
40,000 options have an exercise price of $1.25 and expire on March 7, 1999,
10,000 options have an exercise price of $2.8750 and expire on December 17,
1998, 3,000 options have an exercise price of $2.125 and expire on February
22, 2000, 5,625 options have an exercise price of $2.125 and expire on
8
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December 14, 2000 and 1,750 options have an exercise price of $1.50 and
expire on March 31, 2002. Excludes 5,375 shares subject to qualified stock
options. Of such options, 1,000 options have an exercise price of $2.125
and expire on February 22, 2000 and 4,375 options have an exercise price of
$2.125 and expire on December 14, 2000.
(8) Includes 18,187 shares subject to qualified stock options. Of such
options, 2,500 options have an exercise price of $2.8750 and expire on
December 17, 1998, 9,625 options have an exercise price of $2.6875 and
expire on April 8, 1998, 1,500 options have an exercise price of $5.75 and
expire on February 22, 2000, 2,812 options have an exercise price of
$7.8750 and expire on December 14, 2000 and 1,750 options have an exercise
price of $1.50 and expire on March 31, 2002. Excludes 2,688 shares subject
to qualified stock options. Of such options, 500 options have an exercise
price of $5.75 and expire on February 22, 2000 and 2,188 options have an
exercise price of $7.875 and expire on December 14, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1997, the Company paid consulting fees in the amount of
$118,000 to Belmont Capital Inc., an entity of which Mr. Ginns is the President
and the sole stockholder. These payments were made prior to Messrs. Ginns and
Maught's employment with the Company which commenced on January 3, 1997.
In addition, during fiscal 1997, the Company paid $371,225 and
$450,000 for liability and medical insurance, respectively, to Arthur A. Watson
& Co., Inc., an entity of which Mr. Gass is an Executive Vice President and
stockholder. The Company paid no more than it would have paid to another
insurance company.
9
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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.
DATAMETRICS CORPORATION
Date: February 20, 1998 By: /s/ Daniel P. Ginns
________________________________________
Daniel P. Ginns, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Daniel P. Ginns Chief Executive Officer, Secretary and Chairman of February 20, 1998
- ----------------------------- the Board of Directors
Daniel P. Ginns
/s/ Adrien A. Maught, Jr. President, Chief Operating Officer and Director February 20, 1998
- -----------------------------
Adrien A. Maught, Jr.
/s/ Kenneth S. Polak Chief Financial Officer and Assistant Secretary February 20, 1998
- ----------------------------- (Principal Financial and Accounting Officer)
Kenneth S. Polak
/s/ Douglas S. Friedenberg Director February 20, 1998
- -----------------------------
Douglas S. Friedenberg
/s/ James Haber Director February 20, 1998
- -----------------------------
James Haber
/s/ Stephen R. Gass Director February 20, 1998
- -----------------------------
Stephen R. Gass
</TABLE>
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