SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
STAR TECHNOLOGIES, INC.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
8855193-10-8
(CUSIP Number of Class of Securities)
Robert E. Healing, Esq., General Electric Company
3135 Easton Turnpike, Fairfield, Connecticut 06431, 203-373-2211
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 16, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
<PAGE>
SCHEDULE 13D
CUSIP No. 8855193-10-8
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
General Electric Company, A New York Corporation
I.R.S. #14-0689340
2. Check the Appropriate Box if a Member of a Group
(a) [ ] (b) [ ]
3. SEC Use Only
4. Source of funds
Not applicable.
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [X]
6. Citizenship or Place of Organization
New York, U.S.A.
Number of Shares Beneficially Owned by Each Reporting Person With:
7. Sole Voting Power
624,339 shares*
8. Shared Voting Power
0
9. Sole Dispositive Power
624,339 shares*
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
624,339 shares*
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[x]
13. Percent of Class Represented by Amount in Row (11)
3.1%
14. Type of Reporting Person
CO
* Excludes 1,986,200 shares of Common Stock into which shares of Senior
Preferred Stock owned by the Reporting Person are convertible under the
terms of the Senior Preferred Stock, since the Senior Preferred Stock is
subject to an irrevocable call option granted by the Reporting Person to
Star Technologies, Inc. which precludes conversion during the term of the
option. See Items 4 and 5 herein.
<PAGE>
ITEM 1. Security and Issuer
-------------------
This Amendment No. 2 to Schedule 13D (the "Amendment") relates to the
Common Stock, par value $.01 per share (the "Common Stock"), of Star
Technologies, Inc., a Delaware corporation (the "Company"). The principal
executive offices of the Company are located at 515 Shaw Road, Sterling,
Virginia 22170.
ITEM 2. Identity and Background.
------------------------
This Amendment is filed by General Electric Company, a New York corporation
("GE"). GE is a New York corporation with its principal executive offices
located at 3135 Easton Turnpike, Fairfield, Connecticut 06431. GE engages in
providing a wide variety of industrial, commercial and consumer products and
services.
ITEM 2(a), (b) and (c)
For information with respect to the identity and background of
each director and executive officer of GE, see Schedule I attached hereto.
This Amendment is being filed while GE is in the process of verifying
information required herein from their respective executive officers and
directors. If GE obtains information which would cause a change in the
information contained herein, another amendment will be filed that will set
forth such change in information.
ITEM 2(d) and (e)
Except as set forth below, during the last five years neither GE, nor, to
the best of its knowledge, any of its directors or executive officers has been
(i) convicted in any criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to federal or
state securities laws or finding any violation with respect to such laws.
1. United States ex rel. Taxpayers Against Fraud and Chester L. Walsh v.
----------------------------------------------------------------------
General Electric Company.
-------------------------
On November 15, 1990, an action under the federal False Claims Act, 31
U.S.C. subscection 3729-32, was filed under seal against General Electric
Company ("GE") in the United States District Court for the Southern District of
Ohio. The qui tam action, brought by an organization called Taxpayers Against
Fraud and an employee of GE's Aircraft Engines division ("GEAE"), alleged that
GEAE, in connection with its sales of F110 aircraft engines and support
equipment to Israel, made false statements to the Israeli Ministry of Defense
<PAGE>
(MoD), causingMoD to submit false claims to the United States Department of
Defense under the Foreign Military Sales Program. Senior GE management became
aware of possible misconduct in GEAE's Israeli F110 program in December 1990.
Before learning of the sealed qui tam suit, GE immediately made a voluntary
disclosure to the Departments of Defense and Justice, promised full cooperation
and restitution, and began an internal investigation. In August 1991, the
federal court action was unsealed, and the Department of Justice intervened and
took over responsibility for the case.
On July 22, 1992, after GE had completed its investigation and made a
complete factual disclosure to the U.S. government as part of settlement
discussions, the United States and GE executed a settlement agreement and filed
a stipulation dismissing the civil action. Without admitting or denying the
allegations in the complaint, GE agreed to pay $59.5 million in full settlement
of the civil fraud claims. Also on July 22, 1992, in connection with the same
matter, the United States filed a four count information charging GE with
violations of 18 U.S.C. section 287 (submitting false claims against the United
States), 18 U.S.C. section 1957 (engaging in monetary transactions in criminally
derived property), and 15 U.S.C. subsection 78m(b)(2)(A) and 78ff(a) (inaccurate
books and records), and 18 U.S.C. section 371 (conspiracy to defraud the United
States and to commit offenses against the United States). The same day, GE and
the United States entered a plea agreement in which GE agreed to waive
indictment, plead guilty to the information, and pay a fine of $9.5 million. GE
was that day sentenced by the federal court in accordance with the plea
agreement.
2. Her Majesty's Inspectorate of Pollution v. IGE Medical Systems Limited
----------------------------------------------------------------------
(St. Albans Magistrates Court, St. Albans, Hertsfordshire, England,
Case No. 04/00320181)
In April, 1994, General Electric Medical System's U.K. subsidiary, IGE
Medical Systems Limited (IGEMS) discovered the loss of a radioactive barium
source at the Radlett, England facility. The lost source, used to calibrate
nuclear camera detectors, emits a very low level of radiation. IGEMS immediately
reported the loss as required by the U.K. Radioactive Substances Act. An ensuing
investigation, conducted in cooperation with government authorities, failed to
locate the source. On July 21, 1994, Her Majesty's Inspectorate of Pollution
(HMIP) charged IGEMS with violating the Radioactive Substances Act by failing to
comply with a condition of registration. The Act provides that a registrant like
IGEMS, which "does not comply with a limitation or condition subject to which
(it) is so registered ... shall be guilty of (a criminal) offense." Condition 7
of IGEMS' registration states that it "shall so far as is reasonably practicable
prevent ... loss of any registered source."
At the beginning of trial on February 24, 1995, IGEMS entered a guilty plea
and agreed to pay a fine of 5,000(Pounds) and assessed costs of 5,754(Pounds).
The prosecutor's presentation focused primarily on the 1991 change in internal
ITEMS procedures and, in particular, the source logging procedure. The
prosecutor complimented ITEMS' investigation and efforts to locate the source
and advised the court that ITEMS had no previous violations of the Radioactive
<PAGE>
Substances Act. He also told the court that the Radlett plant had been
highlighted as an exemplary facility to HMIP inspectors as part of their
training. In mitigation, ITEMS emphasized the significant infrastructure and
expense undertaken by ITEMS to provide security for radiation sources and the
significant effort and expense incurred in attempting to locate the missing
source.
ITEM 2(f)
All of the executive officers and directors of GE are U.S. citizens, except
that Paolo Fresco, an executive officer and director of GE, is an Italian
citizen, and Claudio X. Gonzalez, a director of GE, is a citizen of Mexico.
ITEM 3. Source and Amount of Funds and Other Consideration
--------------------------------------------------
Not applicable.
ITEM 4. Purpose of Transaction
----------------------
As of August 16, 1996, GE entered into three written agreements with the
Company which are attached as exhibits to this Amendment (Exhibits 1 to 3
attached hereto). The agreements relate to the Company's Series B Senior
Preferred Stock, $.01 par value ("Series B Preferred Stock" or "Series B") and
Series C Senior Preferred Stock, $.01 par value ("Series C Preferred Stock" or
"Series C"). Prior to August 16, 1996, there were 59,584 shares of Series B
Preferred Stock and 39,723 shares of Series C Preferred Stock outstanding, all
of which were owned by GE.
Pursuant to a Stock Purchase Agreement dated August 16, 1996 (the "Stock
Purchase Agreement"), GE sold 47,667 shares of Series B Preferred Stock and
31,778 shares of Series C Preferred Stock to the Company for an aggregate
purchase price of $2,400,000. Pursuant to the Stock Purchase Agreement, GE (i)
waived any and all breaches by the Company of any covenants, agreements or
obligations that may have occurred under the Preferred Stock Purchase Agreement,
dated as of May 31, 1990 ("Preferred Stock Purchase Agreement") and (ii)
surrendered any rights it had under the Preferred Stock Purchase Agreement and
the Certificate of Designation for the Series B and Series C shares, including
any claim with respect to the payment of any dividend on the shares repurchased.
As of August 16, 1996, GE and the Company entered into Amendment No. 1 to
the Preferred Stock Purchase Agreement ("Amendment No. 1") pursuant to which the
parties eliminated certain rights of GE and covenants and obligations of the
Company, including, among others, eliminating (i) the Company's obligations to
provide certain financial statements and other reports to GE, (ii) certain
inspection rights of GE, (iii) certain limits on the conduct of business and
amount of indebtedness, and (iv) certain limits on the ability of the Company to
issue capital stock. Pursuant to Amendment No. 1, the parties also eliminated
the exclusive right of Series B and Series C shareholders to elect two members
<PAGE>
of the Company's Board of Directors and also eliminated the exclusive right of
Series B and Series C shareholders to elect a majority of the Board of Directors
of the Company upon the occurrence of certain breaches of the Preferred Stock
Purchase Agreement.
Additionally, the Company and GE entered into a Stock Option Agreement,
dated August 16, 1996 ("Stock Option Agreement"), under which GE granted the
Company an irrevocable option (the "Option") to purchase GE's remaining Series B
and Series C shares, consisting of 11,917 shares of Series B and 7,945 shares of
Series C (including all rights to any accrued and unpaid dividends), at any time
between August 16, 1996 and August 16, 1999, for an aggregate purchase price of
$600,000. Under the Stock Option Agreement, GE has agreed not to convert into
Common Stock the Series B or Series C shares which are subject to the Option or
to grant any other rights to any person to buy or acquire any of its Series B or
Series C shares during the term of the Option.
Under the Company's Restated Certificate of Incorporation, as amended in
connection with the three above-referenced agreements entered into on August 16,
1996, each of the Series B and Series C shares owned by GE, subject to the
Option, is convertible into 100 shares of Common Stock at a conversion price of
$1.00 per share of Common Stock, subject to certain adjustment provisions, and,
except as otherwise required by law, each Series B and Series C share has the
right to one vote for each share of Common Stock into which such share could be
converted, voting together with the holders of Common Stock with respect to any
matter upon which holders of Common Stock have the right to vote. (As noted
above, such amended voting rights eliminated the exclusive class voting rights
of the Series B and Series C shares to elect two directors of the Company, or a
majority of the Board of Directors under certain circumstances.) As also noted
above, under the Stock Option Agreement, during the term of the Option, GE
agreed not to convert its Series B and Series C shares into Common Stock or to
grant any other rights to any person to buy or otherwise acquire any of such
shares.
The above transactions were consummated in connection with the resolution
of an arbitration claim by the Company against GE. In August 1996, GE paid the
Company $9.4 million, the amount, including interest, awarded to the Company in
March 1996 on its claim against GE. The payment from GE arose from a demand for
arbitration that the Company filed against GE in January 1995. Following a
hearing on the Company's demand, a three-member panel of the American
Arbitration Association found in favor of the Company.
GE paid the award in connection with the Stock Purchase Agreement, pursuant
to which the Company repurchased 80% of the Company's Series B and Series C
Preferred Stock held by GE. The Company paid GE $2.4 million for such Series B
and Series C shares which had an aggregate redemption price of $13.0 million,
including 100% of cumulative, undeclared dividends that totaled in excess of
$5.0 million. In the Stock Option Agreement, GE granted to the Company a
<PAGE>
three-year option to repurchase the remaining 20% of the Series B and Series C
Preferred Stock at the same per share price that the Company paid in the August
1996 repurchase.
The remaining Series B and Series C shares accrue dividends at the rate of
10% per annum from August 16, 1996 (subject to the terms of the Stock Option
Agreement).
Except as set forth above, GE has no plans or proposals which relate to or
would result in the types of transactions set forth in subparagraphs (a) through
(j) of Item 4.
ITEM 5. Interest in Securities of the Issuer
------------------------------------
(a) GE continues to beneficially own the 624,339 shares of Common Stock of
the Company which it owned prior to August 16, 1996. As a result of the
transactions described above in Item 4, GE disclaims beneficial ownership of the
aggregate of 1,986,200 shares of Common Stock into which GE's remaining Series B
and Series C shares are convertible under the terms of the Company's Restated
Certificate of Incorporation, as amended, since, under the terms of the Stock
Option Agreement, GE has agreed that it will not effect such a conversion during
the term of the Option. The 624,339 shares of Common Stock beneficially owned by
GE constitute 3.1% of the 19,841,924 shares of Common Stock outstanding as of
December 31, 1996 as reported in the Company's quarterly report on Form 10-Q for
the quarter ended December 31, 1996. Neither GE, nor, to the best of its
knowledge, any of its executive officers or directors, beneficially owns any
other securities of the Company or have a right to acquire any additional
securities of the Company.
(b) GE has sole voting power and sole dispositive power over the 624,339
shares of Common Stock beneficially owned by it. Except as described above in
Item 4, neither GE, nor, to the best of its knowledge, any of its executive
officers or directors, has the power to vote or to direct the vote or to dispose
or direct the disposition of any other securities of the Company. As described
in Item 4 above, under the Stock Option Agreement, GE has agreed not to convert
the Series B or Series C shares into Common Stock during the term of the Option.
(c) Except as disclosed in this Amendment, neither GE, nor, to the best of
its knowledge, any of its executive officers or directors, has effected any
transaction in securities of the Company during the past 60 days.
(d) No person except for GE is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
securities covered by this Amendment, except that, as described in Item 4 above,
GE has entered into the Stock Option Agreement whereby the Company can acquire
GE's remaining Series B and Series C shares, including the rights to any accrued
and unpaid dividends, whether or not declared.
<PAGE>
(e) For the reasons indicated in this Amendment, as a result of the
agreements and transactions described above in Item 4, GE ceased to be the
beneficial owner of more than 5% of the Common Stock on August 16, 1996.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to Securities of the Issuer
---------------------------
Incorporated by reference to Item 6 of the Schedule 13D filed on June 8,
1990, as previously amended. See the information set forth in Items 4 and 5
above regarding transactions and agreements entered into with the Company on
August 16, 1996, which information is incorporated herein by reference.
ITEM 7. Material to be Filed as Exhibits
--------------------------------
Exhibit 1 Stock Purchase Agreement, dated August 16, 1996,
between General Electric Company and Star Technologies,
Inc. (Incorporated by reference to Exhibit 10.26 to Star
Technologies, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended September 30, 1996 (the "9/30/96
10-Q"))(Commission File No. 0-13318).
Exhibit 2 Amendment No. 1 to Preferred Stock Purchase Agreement
dated August 16, 1996, between General Electric Company
and Star Technologies, Inc. (Incorporated by reference to
Exhibit 10.27 to the 9/30/96 10-Q.)
Exhibit 3 Stock Option Agreement dated August 16, 1996, between
General Electric Company and Star Technologies, Inc.
(Incorporated by reference to Exhibit 10.28 to the
9/30/96 10-Q).
Exhibit 4 Certificate of Amendment of Restated Certificate of
Incorporation of Star Technologies, Inc. dated August 23,
1996. (Incorporated by reference to Exhibit 3.4 to the
9/30/96 10-Q).
Exhibit 5 Original Schedule 13D, filed June 8, 1990 with Exhibits
(filed pursuant to Rule 101(a)(2)(ii) of Regulation S-T)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC COMPANY
By: R. E. Healing
Name:
Title:
Dated: June 3, 1997
<PAGE>
SCHEDULE I
GENERAL ELECTRIC COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION
- ----------------------------------------------------------------------------------------------
DIRECTORS
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
D.W. Calloway PepsiCo, Inc. Director and retired Chairman of
700 Anderson Hill Road the Board, PepsiCo, Inc.,
Purchase, NY 10577 Beverages, Snack Foods and
Restaurants,
Purchase, New York.
S.S. Cathcart 222 Wisconsin Avenue Retired Chairman of the Board,
Suite 103 Illinois Tool Works,
Lake Forest, IL 60045 Diversified Products,
Chicago, Illinois.
D.D. Dammerman General Electric Company Senior Vice President,
3135 Easton Turnpike Finance, and Chief Financial
Fairfield, CT 06431 Officer, General Electric Company
P. Fresco General Electric Company (U.S.A.) Vice Chairman of the Board and
3 Shortlands, Executive Officer, General
Hammersmith Electric Company
London, W6 8BX, England
C.X. Gonzalez Kimberly-Clark de Mexico, Chairman of the Board and Chief
S.A. de C.V. Executive Officer,
Jose Luis Lagrange 103, Kimberly-Clark de Mexico, S.A.
Tercero Piso de C.V., Consumer and Paper
Colonia Los Morales Products, Mexico City, Mexico.
Mexico, D.F. 11510,
Mexico
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
G.G. Michelson Federated Department Stores Former Member of the Board of
151 West 34th Street Directors - Federated Department
New York, NY 10001 Stores, Retailers, New York,
New York.
S. Nunn King and Spalding Partner, King and Spalding
191 Peachtree Street, N.E.
Atlanta, GA
J.D. Opie General Electric Company Vice Chairman of the Board and
3135 Easton Turnpike Executive Officer, General
Fairfield, CT 06431 Electric Company
R.S. Penske Penske Corporation Chairman of the Board and
13400 Outer Drive, West President, Penske Corporation
Detroit, MI 48239-4001
B.S. Prieskel Suite 3125 Former Senior Vice President,
60 East 42nd Street Motion Picture Associations of
New York, NY 10165 America, New York, New York.
F.H.T. Rhodes Cornell University President Emeritus, Cornell
3104 Snee Building University, Ithaca, New York
Ithaca, NY 14853
A.C. Sigler Champion International Corporation Retired Chairman of the Board
1 Champion Plaza and Chief Executive Officer,
Stamford, CT 06921 Champion International
Corporation, Paper and Forest
Products, Stamford, Connecticut.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
D.A. Warner III J.P. Morgan & Co., Inc. Chairman of the Board,
and Morgan Guaranty Trust Co. President, and Chief Executive
60 Wall Street Officer, J.P. Morgan & Co.,
New York, NY 10260 Incorporated and Morgan Guaranty
Trust Company, New York, New
York.
J.F. Welch, Jr. General Electric Company Chairman of the Board and Chief
3135 Easton Turnpike Executive Officer, General
Fairfield, CT 06431 Electric Company
</TABLE>
CITIZENSHIP
C.X. Gonzalez Mexico
P. Fresco Italy
All Others U.S.A.
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION
- ----------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
J. F. Welch, Jr. General Electric Company Chairman of the Board and Chief
3135 Easton Turnpike Executive Officer
Fairfield, CT 06431
P. Fresco General Electric Company (U.S.A.) Vice Chairman of the Board and
3 Shortlands, Hammersmith Executive Officer
London, W6 8BX, England
P. D. Ameen General Electric Company Vice President and Comptroller
3135 Easton Turnpike
Fairfield, CT 06431
J. R. Bunt General Electric Company Vice President and Treasurer
3135 Easton Turnpike
Fairfield, CT 06431
D. L. Calhoun General Electric Company Vice President -
2901 East Lake Road GE Transportation Systems
Erie, PA 16531
W. J. Conaty General Electric Company Senior Vice President - Human
3135 Easton Turnpike Resources
Fairfield, CT 06431
D. M. Cote General Electric Company Senior Vice President - GE
3135 Easton Turnpike Appliances
Fairfield, CT 06431
D. D. Dammerman General Electric Company Senior Vice President - Finance
3135 Easton Turnpike
Fairfield, CT 06431
L. S. Edelheit General Electric Company Senior Vice President -
P.O. Box 8 Corporate Research and
Schenectady, NY 12301 Development
B. W. Heineman, Jr. General Electric Company Senior Vice President -
3135 Easton Turnpike General Counsel and Secretary
Fairfield, CT 06431
J. R. Immelt General Electric Company Senior Vice-President - GE
P.O. Box 414 Medical Systems
Milwaukee, WI 53201
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME ADDRESS OCCUPATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
W. J. Lansing General Electric Company Vice President -
3135 Easton Turnpike Corporate Business Development
Fairfield, CT 06431
W. J. McNerney, Jr. General Electric Company Senior Vice President
Nela Park GE Lighting
Cleveland, OH 44122
E. F. Murphy General Electric Company Senior Vice President -
1 Newmann Way GE Aircraft Engines
Cincinnati, OH 05215
R. L. Nardelli General Electric Company Senior Vice President -
1 River Road GE Power Systems
Schenectady, NY 12345
R. W. Nelson General Electric Company Vice President -
3135 Easton Turnpike Corporate Financial Planning and
Fairfield, CT 06431 Analysis
J. D. Opie General Electric Company Vice Chairman of the Board and
3135 Easton Turnpike Executive Officer
Fairfield, CT 06431
G. M. Reiner General Electric Company Senior Vice President -
3135 Easton Turnpike Chief Information Officer
Fairfield, CT 06431
G. L. Rogers General Electric Company Senior Vice President -
1 Plastics Avenue GE Plastics
Pittsfield, MA 01201
J. W. Rogers General Electric Company Vice President -
1635 Broadway GE Motors
Fort Wayne, IN 46801
L. G. Trotter General Electric Company Vice President -
41 Woodford Avenue GE Electrical Distribution and
Plainville, CT 06062 Control
</TABLE>
CITIZENSHIP
P. Fresco Italy
All Others U.S.A.
