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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
AMENDMENT #1
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
/ / 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 0-9725
AURORA ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 75-1539534
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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2030 MAIN STREET, SUITE 1120, IRVINE, CALIFORNIA 92714
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 660-1232
Securities registered pursuant to Section 12(b) of the Act:
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<CAPTION>
Title of each class Name of each exchange on which registered:
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<S> <C>
Common Stock, $.03 Par Value American Stock Exchange
9 1/4% Senior Subordinated Notes, Due 1996 American Stock Exchange
Series A and Series B
7 3/4% Convertible Subordinated American Stock Exchange
Debentures, Due 2001
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Securities registered pursuant to Section 12(g) of the Act: NONE
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 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 on December 29, 1995 based on the closing price of the Common
Stock on the American Stock Exchange was approximately $16,341,272.
Indicated below is the number of shares outstanding of each class of the
registrant's Common Stock, as of December 29,1995.
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<CAPTION>
Title of Each Class of Common Stock Number of Outstanding
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<S> <C> <C>
Common Stock, $.03 par value 7,923,041
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DOCUMENTS INCORPORATED BY REFERENCE
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<CAPTION>
Document Part of the Form 10-K
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<S> <C>
Proxy Statement for the 1996 Annual Part III
Meeting
of Stockholders
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PART III
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
compensation paid by the Company to the Named Executive Officers during fiscal
1995, 1994 and 1993:
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<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
FISCAL ----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION (1)
--------------------------- ------ --------- ------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Jim C. Cowart, 1995 $168,080 $ 742 66,000 (3) $ 4,126
Chairman of the Board 1994 124,519 60,000 20,000 4,324
and Chief Executive 1993 -- -- -- 462
Officer
David A. Lahar, 1995 $166,238 $ 742 66,000 (3) $ 3,775
President 1994 124,519 60,000 20,000 2,794
1993 -- -- -- 462
Robert G. Allison, (2) 1995 $240,885 $16,747 16,000 (3) $ 4,126
Chief Operating Officer 1994 240,000 60,000 127,000 4,363
and Executive Vice 1993 13,500 -- -- 23,482
President
John P. Grazer, 1995 $143,322 $ 1,425 66,000 (3) $ 4,893
Chief Financial Officer and 1994 133,384 50,000 20,000 3,406
Senior Vice President, 1993 55,154 45,462 80,000 32,000
Finance & Administration
Harold Haagsma, 1995 $145,000 $58,875 16,000 (3) $ 5,387
President, Asset Recovery 1994 123,616 32,639 20,000 3,916
Services, a division of 1993 85,543 32,933 -- 1,821
AEG
William H. McMahon, Jr., 1995 $167,231 $71,139 40,000 (3) $ 5,020
President, Century Division, 1994 61,385 15,250 35,000 --
a division of AEG 1993 -- -- -- --
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(1) The amounts disclosed in this column consist only of Company
contributions under the Company's 401(k) plan.
(2) Mr. Allison resigned from the Company effective September 1, 1995.
Mr. Allison's options expire, unless earlier exercised, on September
30, 1996.
(3) During May 1995, the compensation and stock option committee of
the board of directors offered each optionee the opportunity to
surrender for cancellation his or her outstanding options and replace
such outstanding options with non-qualified stock options to acquire
eighty percent (80%) of the number of shares of the Company's Common
Stock as canceled, at a price per share equal to twenty-five cents
($0.25) over the closing price of the Company's Common Stock on May 15,
1995.
2
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OPTION GRANTS IN FISCAL 1995
The following table sets forth certain information relating to stock
option grants made by the Company during the last fiscal year to the Named
Executive Officers. The Company did not grant any stock appreciation rights
during the last fiscal year.
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<CAPTION>
INDIVIDUAL GRANTS
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PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH)(1) DATE
------------------ ------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Jim C. Cowart 16,000 (1) 1.42% $3.625 12/12/2004
50,000 4.42% $3.38 05/15/2004
David A. Lahar 16,000 (1) 1.42% $3.625 12/12/2004
50,000 4.42% $3.38 05/15/2004
Robert G. Allison (2) 85,600 (1) 7.57% $3.625 10/15/2003
16,000 (1) 1.42% $3.625 12/12/2004
John P. Grazer 64,000 (1) 5.66% $3.625 06/09/2003
16,000 (1) 1.42% $3.625 12/12/2004
50,000 4.42% $3.38 05/15/2004
Harold Haagsma 50,000 (1) 4.42% $3.625 09/30/1997
16,000 (1) 1.42% $3.625 10/15/2003
William H. McMahon, Jr. 28,000 (1) 2.48% $3.625 05/25/2004
12,000 (1) 1.06% $3.625 12/12/2004
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(1) During May 1995, the compensation and stock option committee
of the board of directors offered each optionee the opportunity to
surrender for cancellation his or her outstanding options and replace
such outstanding options with non-qualified stock options to acquire
eighty percent (80%) of the number of shares of the Company's Common
Stock as canceled, at a price per share equal to twenty-five cents
($0.25) over the closing price of the Company's Common Stock on May
15, 1995.
(2) Mr. Allison resigned from the Company effective September 1, 1995.
Mr. Allison's options expire, unless earlier exercised, on
September 30, 1996.
COMPENSATION OF DIRECTORS
Each non-employee director receives $2,500 for each quarter in which
such person serves as a director of the Company. Officers of the Company do
not receive any fees for serving on the Board of Directors. Non-employee
directors are automatically granted nonqualified stock options to purchase
25,000 shares of Common Stock upon election to the Board of Directors and
options to purchase 5,000 shares of Common Stock on the date of each annual
meeting of the Company's stockholders when such non-employee director has
served on the Board of Directors for the immediately preceding 181 consecutive
days, has agreed to serve as a director upon such re-election and is re-elected
to the Board of Directors. All directors are entitled to reimbursement for
expenses incurred for attendance at each meeting.
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EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Jim C. Cowart. Mr. Cowart and the Company entered into an employment
letter effective as of May 18, 1995, pursuant to which he currently serves as
Chairman of the Board and Chief Executive Officer of the Company. Under the
employment letter, Mr. Cowart receives an annual base salary and an incentive
bonus based upon certain financial performance targets of the Company. If the
Company terminates Mr. Cowart's employment without cause (as defined in the
letter), Mr. Cowart's compensation and option vesting will continue for twelve
(12) months. In the event of a change of control of the Company, Mr. Cowart's
stock options vest immediately, and his compensation will continue for a period
of two years.
David A. Lahar. Mr. Lahar and the Company entered into an employment
letter effective as of May 18, 1995, pursuant to which he currently serves as
President of the Company. Under the employment letter, Mr. Lahar receives an
annual base salary and an incentive bonus based upon certain financial
performance targets of the Company. If the Company terminates Mr. Lahar's
employment without cause (as defined in the letter), Mr. Lahar's compensation
and option vesting will continue for twelve (12) months. In the event of a
change of control of the Company, Mr. Lahar's stock options vest immediately,
and his compensation will continue for a period of two years.
John P. Grazer. Mr. Grazer and the Company entered into an employment
letter effective as of May 18, 1995, pursuant to which he currently serves as
Senior Vice President - Finance and Administration and Chief Financial Officer
of the Company. Under the employment letter, Mr. Grazer receives an annual
base salary and an incentive bonus based upon certain financial performance
targets of the Company. If the Company terminates Mr. Grazer's employment
without cause (as defined in the letter), Mr. Grazer's compensation and option
vesting will continue for twelve (12) months. In the event of a change of
control of the Company, Mr. Grazer's stock options vest immediately, and his
compensation will continue for a period of two years.
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
General. Harvey B. Cash and William H. Watkins, Jr. served on the
Compensation and Stock Option Committee of the Board of Directors during the
last fiscal year. Neither Mr. Cash nor Mr. Watkins are current or former
officers or employees of the Company.
During fiscal 1995, Jim C. Cowart (Chairman of the Board and Chief
Executive Officer of the Company) served as a director and member of the
compensation committee of the Board of Directors of B/E Aerospace, Inc. Amin
J. Khoury, a director of the Company, is Chairman of the Board and Chief
Executive Officer of B/E Aerospace, Inc.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table and notes thereto set forth certain information
with respect to the beneficial ownership of the Company's Common Stock as of
December 31, 1995 by (i) each of the "Named Executive Officers", (ii) each
director of the Company, (iii) each beneficial owner of more than 5% of the
Company's Common Stock and (iv) all executive officers and directors of the
Company as a group. Except as otherwise indicated, each of the stockholders
named below has sole voting and investment power with respect to the shares of
Common Stock beneficially owned:
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AMOUNT AND
NATURE PERCENT OF
CLASS OF OF BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER STOCK OWNERSHIP (1) SHARES
------------------------------------ ------------ -------------- -----------
<S> <C> <C> <C>
Robert G. Allison** Common Stock 75,750 (2) ***
Harvey B. Cash* Common Stock 55,000 (3) ***
Jim C. Cowart*/** Common Stock 321,880 (4) 3.92%
John P. Grazer** Common Stock 41,232 (5) ***
Harold Haagsma** Common Stock 57,351 (6) ***
Amin J. Khoury* Common Stock 40,000 (7) ***
David A. Lahar*/** Common Stock 303,011 (8) 3.69%
William H. McMahon, Jr.** Common Stock 15,266 (9) ***
William H. Watkins, Jr.* Common Stock 37,000 (10) ***
Dimensional Fund Advisors Inc. Common Stock 512,069 (11) 6.46%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Hathaway & Associates LTD Common Stock 500,000 (12) 6.31%
119 Rowayton Avenue
Rowayton, CT 06853
Directors and Executive Officers Common Stock 870,740 (13) 10.00%
as a group (8 persons)
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* Director
** Named Executive Officer
*** Less than one percent
(1) Sole voting and investment power unless otherwise indicated,
subject to community property laws where applicable. Shares of Common
Stock that were not outstanding but that could be acquired through the
exercise of stock options, warrants or convertible debentures
within 60 days of December 31, 1995 are deemed outstanding for the
purpose of computing the percentage of outstanding shares beneficially
owned by a particular person. However, such shares are not deemed
outstanding for the purpose of computing the percentage of outstanding
shares beneficially owned by any other person.
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(2) Mr. Allison resigned from the Company effective September 1,
1995. Includes (i) currently exercisable stock options to purchase
74,799 shares of the Company's Common Stock and (ii) 951 shares of
Common Stock owned by Mr. Allison. Mr. Allison's options expire,
unless earlier exercised, on September 30, 1996.
(3) Includes (i) currently exercisable stock options to purchase 35,000
shares of the Company's Common Stock and (ii) 20,000 shares of Common
Stock owned by Mr. Cash.
(4) Includes (i) 280,000 shares of Common Stock issuable upon
exercise of certain warrants granted to Mr. Cowart, (ii) 853 shares of
Common Stock issuable upon conversion of the Company's 7-3/4%
Convertible Subordinated Debentures due 2001 (the "Convertible
Debentures"), (iii) currently exercisable stock options to purchase
4,000 shares of the Company's Common Stock and (iv) 37,027 shares of
Common Stock owned by Mr. Cowart.
(5) Includes (i) currently exercisable stock options to purchase 39,200
shares of the Company's Common Stock and (ii) 2,032 shares of Common
Stock owned by Mr. Grazer.
(6) Includes (i) currently exercisable stock options to purchase 57,200
shares of the Company's Common Stock and (ii) 151 shares of Common
Stock owned by Mr. Haagsma.
(7) Includes (i) currently exercisable stock options to purchase 35,000
shares of the Company's Common Stock and (ii) 5,000 shares of Common
Stock owned by Mr. Khoury.
(8) Includes (i) 280,000 shares of Common Stock issuable upon
exercise of certain warrants granted to Mr. Lahar, (ii) 853 shares
of Common Stock issuable upon conversion of the Company's 7-3/4%
Convertible Subordinated Debentures due 2001 (the "Convertible
Debentures"), (iii) currently exercisable stock options to purchase
4,000 shares of the Company's Common Stock and (iv) 18,158 shares of
Common Stock owned by Mr. Lahar.
(9) Includes (i) currently exercisable stock options to purchase 12,800
shares of the Company's Common Stock and (ii) 2,466 shares of Common
Stock owned by Mr. McMahon.
(10) Includes (i) currently exercisable stock options to purchase 35,000
shares of the Company's Common Stock and (ii) 2,000 shares of Common
Stock owned by Mr. Watkins.
(11) Based on information set forth in Amendment No. 2 to Schedule
13G, dated February 16, 1995, filed with the SEC by Dimensional Fund
Advisors Inc., an investment adviser registered with the SEC ("DFAI").
DFAI reported that it has sole voting power with respect to 246,207
shares of Common Stock, officers of DFAI serve as officers of DFA
Investment Dimensions Group Inc., a registered open-end management
investment company, in which capacity they have sole power to vote
120,962 shares of Common Stock, and officers of DFAI serve as officers
of The Investment Trust Company, a registered open-end management
investment company, in which capacity they have sole power to vote
33,475 shares of Common Stock. DFAI reported that it has sole
dispositive power with respect to 400,644 shares of Common Stock.
(12) Based on information received by the Company from the Vickers
Corporation Reports, dated December 28, 1995.
(13) Includes 783,906 shares of Common Stock issuable upon exercise of
stock options, warrants and convertible debentures.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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<S> <C>
AURORA ELECTRONICS, INC.
January 26, 1996 By: /s/ John P. Grazer
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John P. Grazer,
Senior Vice President-Finance and Administration
and Chief Financial Officer (Principal Accounting
and Financial Officer)
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7
