Canisco Resources, Inc.
300 Delaware Avenue, Suite 714
Wilmington, DE 19801
(302) 777-5050
Ted Mansfield
Direct Dial Number: (302) 777-5050
Facsimile: (302) 777-5409
E-Mail: [email protected]
July 27, 2000
VIA EDGAR
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Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington, D.C. 20549
RE: Canisco Resources, Inc.
Amendment No. 1 to Form 10-K
SEC File No. 0-12293
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Ladies and Gentlemen:
On behalf of Canisco Resources, Inc. (the "Registrant"),
transmitted hereby via EDGAR is the Registrant's Amendment No. 1 to the
Annual Report on Form 10-K for the period ending March 31, 2000 (the "10-K").
Very truly yours,
/s/ Ted Mansfield
Ted Mansfield
For CANISCO RESOURCES, INC.
This Amendment No. 1 amends and supplements the Annual Report on Form 10-K
for the period ending March 31, 2000, filed by Canisco Resources, Inc., a
Delaware corporation (the "Company").
ITEM 10
DIRECTORS OF THE COMPANY
The following table sets forth information concerning the incumbent directors
of the Company at July 14, 2000.
Marvin Davis (1)(2) Age 62 1996 to present, President, CEO and
Chairman of Datamax, a manufacturer of bar
code printers for the automatic
identification device market. 1987 to 1996,
President of Grisanti, Galef and Goldress
Corporation, a consulting firm for troubled
businesses. Currently a member of the board
of directors of Crown Craft, Z Axis
Corporation, Veridian Partners, Reliacast,
and a member of the Board of Advisors for
Angus & Coote.
Dale L. Ferguson Age 65 Retired since 1996. 1974 through 1996, an
employee of the Company. Director of the
Company since 1974.
Teddy Mansfield Age 38 1996 to present, President of Mansfield
Industrial Coatings, Inc, an industrial
painting company. 1993 to 1996, Vice
President of Mansfield Industrial Coatings.
Thomas P. McShane (1)(2) Age 46 1987 to present, President of McShane
Group, Inc., a financial and management
consulting firm located in Timonium, MD.
Director of the Company since 1991.
W. Lawrence Petcovic (1) Age 55 July 1999 to present, Vice President of
Human Resources of Fypon Limited, a
manufacturer of molded millwork. November
1998 to July 1999, Vice President of Human
Resources at Creditrust Inc., a purchaser
of credit card charged-off receivables.
1996 to November 1998, Vice President,
Training of Chevy Chase Bank. 1994 to 1996,
business consultant for L.P. Associates,
Columbia, MD. Director of the Company since
1981.
(1) Members of the Compensation Committee
(2) Members of the Audit Committee
The terms of office of all of the above directors will expire at the next
annual meeting of the Company and have indicated their intention to resign
prior to the Company's next annual meeting, upon the closing of the
investment described in Item 13, which is subject to approval by the
Company's stockholders. The following table details shares held by a
director or officer and their respective spouses and certain relatives
(excluding adult children).
Shared
Sole Voting Voting and Shares
and Investment Investment Subject of Aggregate Percentage
Name Power Power Options Total of Class
Marvin Davis -0- -0- -0- -0- -0-
Teddy Mansfield 156,000 -0- 60,000 216,000 8.31%
Michael J. Olson(1) 37,619 -0- 15,000 52,619 2.07%
Dale L. Ferguson 19,000 30,000 -0- 49,000 1.93%
Thomas P. McShane 18,300 -0- -0- 18,300 0.72%
W. Lawrence Petcovic 10,886 -0- -0- 10,886 0.43%
All Directors and 241,805 30,000 75,000 346,805 13.30%
Executive Officers
as a Group (6 Persons)
(1) Executive officer who is not a director.
Information Regarding Current Executive Officers
The following table identifies Canisco's current executive officers, sets
forth their ages, principal occupation or employment of each during the past
five years, positions and offices held with Canisco and the terms served as
such.
Name Age Principal Occupation or Employment
Teddy Mansfield 38 See information regarding directors.
Michael J. Olson 46 Vice President, Secretary/Treasurer and
Chief Financial Officer of Cannon Sline,
Inc. since 1986. Named Acting Chief
Financial Officer of Nuclear Support
Services, Inc. in January, 1995. Named
Chief Financial Officer, Vice President and
Secretary/Treasurer of the Company in April
1995 Mr. Olson has an employment contract
with the Company.
(1) Jimmie L. Huitt, Jr., an employee of McShane Group, Inc., served as
President and Chief Executive Officer of the Company from September 7,
1999 until December 20, 1999, when Mr. Mansfield was appointed by the
Board. Mr. Huitt, 49, has been a stockholder and principal of McShane
Group, Inc., a financial and management consulting firm, since 1998, and
prior to that was a Director of Princeton Associates, a management
consulting firm. Mr. Trallo was terminated as President and Chief
Executive Officer by the Company's Board of Directors effective
September 7, 1999. Mr. Trallo remains an employee of the Company.
Compliance with Section 16A
For the 2000 fiscal year, no late Form 4 filings were submitted.
ITEM 11 EXECUTIVE COMPENSATION
COMPENSATION OF CURRENT EXECUTIVE OFFICERS
The following table sets forth information concerning all compensation paid
or accrued by Canisco and its subsidiaries in respect to the three fiscal
years for 1998, 1999 and 2000 to or for each of the executive officers of
Canisco:
Summary Compensation Table
Fiscal Year Compensation Long-Term Compensation
Awards Securities
Other
Name and Fiscal Salary Bonus compensation Underlying
Principal Position Year ($) ($) ($)(1) Option/SARs(#)
Ralph A. Trallo 2000 225,000 -0- 7,351 -0-
President, Chief 1999 185,000 48,100 134,794(2) -0-
Executive Officer 1998 185,000 115,000 47,590(3) -0-
and Director;
Also President and
CEO of Cannon Sline
Teddy Mansfield 2000 120,000 50,000 -0- -0-
President, Chief
Executive Officer and
Director
Michael J. Olson 2000 130,000 -0- 5,926 -0-
Vice President, 1999 105,000 27,300 37,819(2) -0-
Secretary/Treasurer 1998 105,000 85,000 7,820(3) -0-
and Chief Financial
Officer
(1) Included in Other Compensation are automobile allowances and excess
life insurance benefits provided by the Company and the value of
discretionary bonuses paid in stock.
(2) At the request of the Compensation Committee, Mr. Trallo and Mr. Olson
agreed to terminate the 1985 Long Term Compensation Plan between
themselves and Oliver B. Cannon & Son, Inc. (the former name of the
Company's Cannon Sline, Inc. subsidiary). Mr. Trallo and Mr. Olson
each took stock in lieu of the cash due on termination of the plan,
issued at fair market value.
(3) Mr. Trallo and Mr. Olson were awarded discretionary bonuses in 1998.
Their bonuses were in the form of Company stock issued at fair market
value.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
Number of
securities Value of
underlying unexercised
unexercised in-the-money
Shares options/SARs options/SARs
acquired on at FY end (#) at FY end ($)
exercise (#) Value exercisable/ exercisable/
Name unexercisable realized ($) unexercisable/(1)
Ralph A. Trallo 0 0 95,000(2) $ 0 / 0
Michael J. Olson 0 0 65,000(3) $ 0 / 0
(1) Options include those granted under the Company's Stock Option
Programs, the Directors Stock Option Program, and the Company's Stock
Appreciation Plan.
(2) Mr. Trallo's options include 25,000 shares under the Company's Stock
Option Programs and the Director's Stock Option Program and 70,000
shares under the Company's Stock Appreciation Plan.
(3) Mr. Olson's options include 15,000 shares under the Company's Stock
Option Programs and 50,000 shares under the Company's Stock
Appreciation Plan.
ITEM 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company currently has 2,536,565 shares of common stock outstanding. In
addition 103,875 shares are reserved for issuance upon the exercise of
currently outstanding options held by employees and directors and 110,000
shares are reserved for the exercise of warrants held by Teddy L. and Dean
Mansfield, who are both part of the management of one of the Company's
subsidiaries, and by others.
The Shares reported in the following two tables may be deemed to be
beneficially owned under Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended,
but the inclusion of the shares in this table does not constitute an
admission of beneficial ownership.
The following table shows information as of July 14, 2000, with respect to
each person with beneficial ownership of more than 5% of the Company's
outstanding common stock.
Shares Percentage
Name and Address Beneficially Owned of Class Owned
ROI Capital Management, Inc.
17 East Sir Francis Drake Boulevard
Suite 225
Larkspur, CA 94939 183,100(1) 7.22%
Teddy L. Mansfield
3251 E. Kingsfield Road
Pensacola, FL 32514 156,000(2) 6.15%
Joe C. Quick
83 Almond Avenue
Hershey, PA 17022 147,516(3) 5.82%
Ralph A. Trallo
2363 Sanibel Blvd.
St. James City, FL 33956 138,321(4) 5.45%
(1) A Schedule 13G filed with the Securities and Exchange Commission on
February 15, 2000 by ROI Capital Management, Inc. ("ROI"), Mitchell J.
Soboleski ("Soboleski") and Mark T. Boyer ("Boyer") states that ROI is
deemed to be the beneficial owner of 183,100 shares of Canisco common
stock pursuant to separate arrangements whereby it acts as investment
adviser and has certain rights with respect to dividends and proceeds
from the sale of such common stock and Soboleski and Boyer are deemed
to be the beneficial owners of such number of shares pursuant to their
ownership interest in ROI.
(2) 150,000 of these shares were part of the purchase consideration paid by
the Company for the acquisition of Mansfield Industrial Coatings, Inc.
which occurred on April 22, 1998. Mr. Mansfield also received warrants
to purchase 60,000 shares at a price of $2 5/8 per share as part of the
acquisition consideration. None of such warrants are currently
exercisable and therefore have not been included.
(3) The shares shown include 84,490 shares over which Mr. Quick exerts sole
voting and investment power. Mr. Quick shares voting and investment
power over the remaining shares which are held by his spouse or certain
relatives (excluding adult children).
(4) The shares shown include 113,321 shares over which Mr. Trallo exerts
sole voting and investment power and 25,000 shares subject to stock
options owned by Mr. Trallo.
ITEM 13
TRANSACTION WITH KENNY INDUSTRIAL SERVICES, L.L.C.
On June 28, 2000, the Company, Parent and Canisco Acquisition, Inc. ("Merger
Subsidiary") entered into an Agreement and Plan of Merger (as amended, the
"Merger Agreement") in accordance with the terms and subject to the
conditions of which (1) Parent caused Merger Subsidiary to commence the Offer
for any and all outstanding Shares at a price of $1.00 per Share, net to the
seller in cash, without interest thereon, and (2) Merger Subsidiary will be
merged with and into the Company (the "Merger"). As a result of the Offer
and the Merger, the Company would become an indirect wholly owned subsidiary
of Parent. The Offer is scheduled to expire at 12:00 Midnight, New York City
time, on Friday, August 11, 2000, unless the Offer is extended in accordance
with the Merger Agreement and applicable law.
The Merger Agreement provides that, promptly after the purchase of a majority
of the outstanding Shares pursuant to the Offer, Parent shall be entitled to
designate directors (the "Purchaser Designees") on the Board of Directors of
the Company (the "Board") as will give Parent representation proportionate to
its ownership interest. The Company has agreed, upon the request of Parent,
to use its reasonable best efforts promptly either to increase the size of
the Board or secure the resignation of such number of directors, or both, as
is necessary to enable the Purchaser Designees to be elected or appointed to
the Board and to cause the Purchaser Designees to be so elected or appointed.
In addition, the Company has agreed to cause the Purchaser Designees to
constitute the same percentage as is on the Board of (i) each committee of
the Board, (ii) each board of directors of each subsidiary of the Company and
(iii) each committee of each such board.
Participation of Current Directors in Retirement Programs
Dale Ferguson received $50,000 in fiscal year 1999 pursuant to the Company's
Founders Retirement Plan.
