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U.S. Securities and Exchange Commission
Washington, D.C. 20549
--------------------------
FORM 10-K/A
(Mark One)
[X] AMENDMENT NO. 1 TO THE ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File No. 0-10634
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MINING SERVICES INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
UTAH 87-0351702
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8805 SOUTH SANDY PARKWAY
SANDY, UTAH 84070-6408
(Address of principal executive offices, zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (801) 233-6000
---------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
-------------- -----------------------------------------
COMMON STOCK, $0.001 PAR VALUE NASDAQ NATIONAL MARKET
Check 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
--- ---
Check 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 the Form 10-K filed by the Company on
March 30, 2000 or any amendment to such Form 10-K. [ ]
Based on the closing sales price of April 25, 2000, the aggregate market
value of the Common Stock held by non-affiliates was $7,340,073 (3,188,099
shares estimated to be held by non-affiliates). Shares of the Common Stock held
by each officer and director and by each person who may be deemed to be an
affiliate of the registrant have been excluded.
The number of shares outstanding of the registrant's par value $0.001
Common Stock as of April 25, 2000 was 7,314,260.
---------------------------
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AMENDMENT NO. 1
The Registrant hereby amends its Annual Report on Form 10-K for the fiscal
year ended December 31, 2000, previously filed with the Commission (the "Annual
Report") solely for the purpose of including Part III, Items 10 through 13, as a
part of this amendment.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) INFORMATION REGARDING THE BOARD OF DIRECTORS.
Nathan L. Wade, 72, was appointed Chairman of the Board of Directors on
January 21, 2000. Mr. Wade has been a Director of the Company since June 1989.
Since 1953 Mr. Wade has been a Director and principal owner of Nate Wade
Subaru., a Salt Lake City, Utah automobile dealership for new and used
automobiles.
M. Garfield Cook, 59, was appointed to the Board of Directors on April 4,
2000 and on April 25, 2000 was appointed as Co-Chairman of the Board. From 1972
to 1989 Mr. Cook was President and Chief Executive Officer of IRECO Chemicals,
an industrial explosives company with about 1700 employees serving in the
natural resource industry worldwide. He has served on the boards of a number of
corporations involved in the explosives and mining industry. He is also a past
Chairman of the Institute of Makers of Explosives in Washington, D.C. From 1988
to 1995 Mr. Cook was Chairman of Non-Invasive Medical Technology Corporation
(NMT) involved in developing and producing specialized medical treatment devices
and supplies, and from 1991 to 1995 he also served as Chairman of In-Line
Diagnostics Corporation (IDC), an affiliate of NMT. Mr. Cook has been a private
investor since 1995 and has served in executive positions with several civic
organizations in Salt Lake City. Mr. Cook is a 1966 graduate of the University
of Utah with a B.S. degree in Physics
Dr. John T. Day, 60, has been President and Chief Executive Officer of the
Company since April 1993. He was one of the founders of the Company and from
1979 to 1993 was Executive Vice President with responsibility for plant design,
operations, equipment design and construction, and new product development. Dr.
Day was appointed a member of the Board of Directors on November 10, 1986 and
was appointed the Chief Executive Officer of the Company in 1993. Dr. Day
obtained a B.S. degree in Chemical Engineering from the University of Utah in
1964 and obtained a Sc.D. degree from MIT in 1972.
Dr. Lex L. Udy, 66, was Vice Chairman of the Board of Directors from April
1993 to April 2000. He was a founder of the Company and has served as a Director
since 1979. From 1979 to 1984 he was Vice President of Research of the Company
with responsibility for new product and patent development and field test
operations. From 1985 to 1993 he was President and Chief Executive Officer of
the Company. Dr. Udy obtained a B.S. degree in Physics from the University of
Utah in 1955 and a Ph.D. from the University of Utah in Metallurgy in 1960. Upon
his retirement on March 31, 1999, Dr. Udy became an outside technical consultant
to the Company.
Stephen Fleischer, 44, has been a Director of the Company since December
1997. Since 1993, Mr. Fleischer has been involved in purchasing, restructuring
and financing (including public financing) under-valued companies for his own
account. From 1990 to 1993, Mr. Fleischer was managing director, Energy
Division, Westinghouse Credit Corporation. Previously, he was Vice President of
the Bank of New England and also for The First National Bank of Chicago. Mr.
Fleischer obtained a B.A. degree in Spanish and Business Administration from
Gonzaga University in 1977.
James E. Solomon, 50, was appointed to the Board of Directors in March
2000. He is managing partner at Red Rock Investors, LLC, a venture capital firm.
Mr. Solomon specializes in maximizing value to mid-size companies. He was
formerly a financial manager at Exxon Corporation from 1972 to 1980. From 1980
to 1983 Mr. Solomon was Vice President of Farm Management Company, one of the
world's
<PAGE>
largest agricultural companies. Mr. Solomon is a Certified Public Accountant and
currently serves as an Adjunct Professor at the Graduate School of Business at
the University of Utah.
James W. Sight, 44, was appointed a director on April 4, 2000. Mr. Sight
graduated from the Wharton School of Finance in 1977. Mr. Sight is an investor
and financial consultant. He currently serves on the Boards of Directors of
United Recycling Industries and two companies registered under Section 12 of the
Securities Exchange Act of 1934, as amended: US Home (NYSE), Westmoreland Coal
(AMEX).
There were nine (9) regular meetings of the Board of Directors held during
1999. All of the Directors attended all of the meetings or were present via
teleconferencing.
The Company has standing audit and compensation committees of the Board of
Directors. The audit committee periodically makes recommendations concerning the
engagement of the Company's independent public accountant and reviews the
results and independence of the accountants and the scope, adequacy and results
of the internal auditing procedures. The Company's audit committee consists of
Nathan L. Wade, Stephen Fleischer and James Solomon. Functions of the
compensation committee include making recommendations concerning Director and
Executives salaries and bonuses and overseeing the Company's stock option and
other benefit plans. The compensation committee consists of Nathan L. Wade,
Stephen Fleischer and James Solomon.
In addition to the standing committees of the Board of Directors, an
independent litigation committee was implemented by the Board of Directors so
that the Company could independently investigate claims made against certain
directors of the Company. The Company filed a Form 8-K with the Securities and
Exchange Commission on January 20, 2000 to report the commencement of a legal
action styled as BLA Investment Irrevocable Trust (the "Trust"), by and through
Bryan Bagley and Lisa Higley, Trustees, Plaintiffs, vs. Mining Services
International Corporation, a Utah Corporation, and John T. Day, Lex Udy, Nathan
L. Wade and Stephen Fleischer (collectively, the " Defendant Directors"). The
action states claims against both the Company as well as the Defendant
Directors. The members of the litigation committee are James Solomon and
Garfield Cook.
During 1999 the non-employee directors received $7,200 payable in monthly
payments of $600.00. In addition, Mr. Fleischer received $11,000 for attendance
at board meetings including reimbursement of expenses and Mr. Wade received
$7,000 for attendance at board meetings and reimbursement of expenses. Though
Dr. Udy was retired as an executive officer in March 1999, his compensation is
disclosed below with the Executive Officers' Compensation. The other
non-employee directors became directors in 2000.
(b) INFORMATION REGARDING EXECUTIVE OFFICERS:
In addition to Dr. Day, certain information is furnished with respect to
the following executive officers of the Company:
Richard M. Clayton, 59, was first employed by the Company from 1981 to
1983. Mr. Clayton joined the Company again in 1986 as Director of Marketing and
was appointed Vice President in 1991. Prior to joining the Company, Mr. Clayton
held key management and marketing positions with Texaco Petroleum Corporation
and Nitrate Services Corporation, an explosives company.
David P. Reddick, 44, has been employed by the Company since 1985 as
Director of Operations. In 1991 Mr. Reddick was appointed Vice President. Prior
to joining the Company, Mr. Reddick was associated with Cyprus Minerals in
operations management. Mr. Reddick obtained a B.S. degree in Resource Economics
from the University of California at Berkeley.
Duane W. Moss, 52, has been employed by the Company since December 1994 as
Chief Financial Officer and General Counsel. Mr. Moss was appointed Secretary of
the Company in 1999. Prior to joining the Company, Mr. Moss was a self-employed
financial and legal consultant and from 1989 to 1992 was the
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Secretary, Treasurer and Chief Financial Officer of Alta Gold Co. Early in his
career, Mr. Moss was a Certified Public Accountant and senior tax professional
with Arthur Andersen & Co. Mr. Moss obtained a Juris Doctorate in 1976 and a
B.A. degree in Accounting in 1973 from the University of Utah.
Douglas W. Later, 47, has been employed by the Company since September 1998
as Assistant to the President. Due to the retirement of Dr. Lex L. Udy, Dr.
Later was appointed to manage the research and development activities of the
Company and the manufacturing of its packaged explosives products. From 1989 to
1998 Dr. Later was president of Mountain States Analytical, a testing and
research laboratory. Dr. Later has eighteen years experience in the chemicals
industry and management of operations. He received his bachelor's degree in
Chemistry in 1978 and a Ph.D. in analytical chemistry in 1982 from Brigham Young
University.
Wade L. Newman, CPA, 41, has been employed by the Company since February
1999 as the Company's Controller. Mr. Newman was Vice President and CFO,
Secretary and Treasurer of Recovery Corporation from 1991 to 1999 and was with
Ernst & Young from 1985 to 1991 having served as a Manager in the audit
department. Mr. Newman received a Bachelor's degree in Accounting from Brigham
Young University in 1985.
(c) SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
stock, to file reports of initial ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC"). Executive officers, directors
and persons who own more than ten percent of the Company's stock, are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company noted that all required forms, including amendments
thereto, were timely filed during the past fiscal year, except Forms 4 were not
timely filed for (1) Dr. John T. Day regarding a charitable gift of Common Stock
of the Company for 8,000 shares made on or about December 30, 1999, (2) Mr.
Duane W. Moss regarding a charitable gift made by him of 3,200 shares made on or
about December 31, 1999 and (3) Mr. Nathan L. Wade regarding a purchase of 2,000
shares by his wife on or about September 9, 1999 and a disposition from trust of
136 shares on or about November 25, 1999. In each of the three cases regarding
Form 4, a Form 5 was filed to correct the untimely filings. The failure to
timely file was due to extended travel of the executives coupled with procedural
oversight. The Company issues monthly reminders to each executive and director
of the Company to help ensure timely filing of reports promulgated under Section
16(a) of the Exchange Act.
ITEM 11: EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and long-term
compensation for services in all capacities to the Company and its affiliates
paid to (i) the Chief Executive Officer and (ii) the other most highly
compensated executive officers of the Company (the "Named Executive Officers").
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes compensation received by the Named Executive
Officers of the Company for the three fiscal years ended December 31, 1999, 1998
and 1997.
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Other Annual All Other
Salary Bonus Compensation Compensation
Name and Position Year $ $(1) $(2) $(3)
- ------------------------ ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Dr. John T. Day 1999 175,000 100,000 19,123 7,477
President and Chief 1998 120,000 132,000 20,601 3,600
Executive Officer 1997 120,000 125,500 16,049 3,600
Dr. Lex L. Udy 1999 52,154 100,000 43,720 1,538
Director and 1998 120,000 88,000 13,391 3,600
Consultant after 1997 120,000 80,000 10,691 3,700
retirment in 3/99
Duane W. Moss 1999 100,000 10,000 4,550 3,087
CFO, General 1998 80,000 10,000 6,110 2,255
Counsel and 1997 77,150 27,500 3,915 2,255
Secretary
</TABLE>
(1) Includes all cash and non-cash bonuses paid on a discretionary basis by the
Board of Directors as recommended by the Compensation Committee. In the
case of Dr. Day, the grant of a $100,000 bonus was not paid in 1999, but
the right to payment is solely in the discretion of Dr. Day. In the case of
Dr. Udy, the $100,000 bonus was paid in cash or benefits as follows:
$32,426 was paid in 1999 and the balance was paid in January 2000.
(2) Includes life and disability insurance premiums and tax services paid on
behalf of Dr. Day and medical reimbursement payments and personal mileage
on company-owned vehicles on the part of the Named Executive Officers.
Included in Dr. Udy's other Annual Compensation are board of director fees
and consultant fees earned after retirement in March 1999.
(3) Includes matching contributions made by the company on behalf of the Named
Executive Officers pursuant to the Mining Services International Profit
Sharing 401(k) Plan (the "Plan").
OPTION GRANTS IN LAST FISCAL YEAR
No individual grants of stock options or stock appreciation rights were
made to the Named Executive Officers during the fiscal year ended December 31,
1999.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTION/SAR VALUE
The following table sets forth the aggregate value of unexercised options
to acquire shares of the Common Stock held by the Named Executive Officers on
December 31, 1999 and the value realized upon the exercise of options by the
Named Executive Officers during the fiscal year ended December 31, 1999. There
are no stock appreciation rights issued under the Plan.
<PAGE>
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs Options/SARs
On Value At FY-End (#) at FY-End ($)(1)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Dr. John T. Day None None None
President and Chief
Executive Officer
Duane W. Moss None 36,566 66,415 $0.00 $0.00
(CFO and General Counsel)
</TABLE>
(1) Reflects the difference between the exercise price of the options granted
and the value of the Common Stock on December 31, 1999. The closing price
of the Common Stock on December 31, 1999, as reported by NASDAQ was $3.00
per share. The options granted are subject to risks of forfeiture and a
vesting schedule. In the case of Mr. Moss, 13,283 options may vest each
year on the anniversary date of the option grant, subject to Board of
Directors approval.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tabulation shows as of April 28, 2000 the number of shares of
the Company's common stock, par value $0.001, owned beneficially by: (a) all
persons known to be the holders of more than five percent (5%) of the Company's
voting securities, (b) Directors, (c) named Executive Officers and (d) all
Officers and Directors of the Company as a group:
<TABLE>
<CAPTION>
Amount and Natures of
Beneficial ownership (1)
------------------------
Name and Address of Beneficial Owner Shares Percent
<S> <C> <C>
E. Bryan Bagley 2,071,534(2) 27.7%
1470 Arlington Dr.
Salt Lake City, UT 84103
Dr. Lex L. Udy 560,906(3) 7.5%
4597 Ledgemont Drive
Salt Lake City, Utah 84124
Dr. John T. Day 566,304 7.6%
5 Dawn Hill
Sandy, Utah 84092
Edward N. Bagley Estate 583,280 7.8%
8987 St. Ives Drive
Los Angeles, California 90069
Nathan L. Wade 243,492(4) 3.3%
1207 South Main Street
Salt Lake City, Utah 84111
Stephen Fleischer 5,000 0.1%
2524 Maplewood Ave.
Chicago, IL 60646
</TABLE>
<PAGE>
(Table continued)
<TABLE>
<CAPTION>
Amount and Natures of
Beneficial ownership (1)
------------------------
Name and Address of Beneficial Owner Shares Percent
<S> <C> <C>
Duane W. Moss 72,310(5) 1.0%
7952 So. Siesta Drive
Sandy, UT 84093
All Officers and Directors
as a group (8 persons) 1,471,347(6) 19.7%
</TABLE>
(1) Unless otherwise indicated, each person identified in the table has sole
voting and investment power with respect to the Company's common stock
beneficially owned by such person. The total number of outstanding shares
included in the computation of percentages is 7,314,260 plus 152,981
options which are exercisable or become exercisable by executives and
directors within 60 days.
(2) Includes 1,883,287 shares held by the BLA Irrevocable Investment Trust of
which Mr. Bagley is a co-Trustee with his adult sister, Lisa Higley, who
lives in Colorado. The voting power over the Trust shares is currently
subject of a lawsuit in which the Company claims that the trust shares are
subject to a voting agreement whereby the shares are voted by the
management of the Company in proportion to the votes cast by the other
shareholders of the Company.
(3) Includes shares owned solely by Dr. Udy's wife and shares in a family
limited partnership.
(4) Includes shares held by a partnership of which Mr. Wade is a partner,
shares held in an IRA account for the benefit of Mr. Wade's spouse and
shares held by Mr. Wade's family members residing in his home; also
included are 20,000 options currently exercisable by Mr. Wade.
(5) Includes options for 36,566 shares which are presently exercisable or will
become exercisable within 60 days.
(6) Does not include shares controlled by Mr. Bagley as co-trustee of the BLA
Irrevocable Investment Trust; however, includes 152, 981 shares which are
currently exercisable or which become exercisable by the directors and
executive officers of the Company within 60 days.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 10, 1998, the Company provided John T. Day a five-year loan of $75,000
at LIBOR 30-day rate plus 1% adjusted annually on the anniversary date. Interest
is payable annually with principle due on the date of maturity. The loan is
secured with shares of Company stock owned by Dr. Day.
Dr. Udy currently has a consultant agreement with the Company for technical
services to be rendered on an "as needed" basis.
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SIGNATURES
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.
MINING SERVICES INTERNATIONAL CORPORATION
/s/ John T. Day
-----------------------------
John T. Day, President
Date: May 16, 2000
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signatures Capacity in Which Signed Date
- ------------------ ---------------------------------- ------------
/s/ Nathan L. Wade Chairman of the Board of Directors May 16, 2000
Nathan L. Wade
/s/ Lex L. Udy Director May 16, 2000
Lex L. Udy
/s/ John T. Day President, Chief Executive Officer May 16, 2000
John T. Day and Director (Principal Executive Officer)
/s/ James Solomon Director May 16, 2000
James Solomon
/s/ Duane W. Moss Chief Financial Officer, General May 16, 2000
Duane W. Moss Counsel and Secretary
/s/ Wade Newman Controller May 16, 2000
Wade Newman
