<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
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FORM 10-K/A
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(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: DECEMBER 31, 1999
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _____________ to
_____________.
For the fiscal year ended: DECEMBER 31, 1999
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Commission File Number: 1- 5513
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TRIDEX CORPORATION
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0682273
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
61 WILTON ROAD
WESTPORT, CT 06880
(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 226-1144
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------------------- -----------------------------------------
COMMON STOCK, WITHOUT PAR VALUE NASDAQ
Securities registered pursuant to Section 12(g) of the Act: NONE
- --------------------------------------------------------------------------------
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K as set
forth in the pages attached hereto:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS
SETH M. LUKASH, 54, has been a senior executive officer of the Company
since 1977 and has been a Director since 1979. He has served as Chairman of the
Board of Directors of the Company since November 1988, Chief Executive Officer
since August 1987 and President and Chief Operating Officer since June 1989. In
addition, Mr. Lukash has assumed the responsibilities of Chief Financial Officer
of the Company since the departure of the Company's former CFO in February 2000.
Mr. Lukash previously served as President of the Company from September 1983 to
August 1988 and as Chief Operating Officer from September 1983 to August 1987.
PAUL J. DUNPHY, 80, has been a Director of the Company since 1989.
Mr. Dunphy has been a management consultant from 1988 until the present. Mr.
Dunphy was Chairman of the Board, Chief Executive Officer and President of
Towle Manufacturing Company from 1985 through 1988 and was Executive Vice
President of Anchor Hocking, a glass and metal manufacturer, from 1970
through 1984. Mr. Dunphy is a Director of Midwest Fabricating Co. and Four
Johns Corporation. He is also a member of the Board of Trustees of Mt. Ida
College, the President's Advisory Council of Bentley College and the
Executive Advisory Board for Ohio University.
GRAHAM Y. TANAKA, 52, has been a Director of the Company since 1988.
Mr. Tanaka has been President of Tanaka Capital Management, Inc., an investment
management firm, since 1986. From 1980 to 1986, Mr. Tanaka served as Chairman of
Milbank, Tanaka & Associates. He is also President of The Tanaka Funds, Inc. Mr.
Tanaka is a director of TransAct Technologies Incorporated ("TransAct"), a
manufacturer of transaction based printers which was a subsidiary of the Company
through March 31, 1997. Mr. Tanaka is also a member of the Board of Directors of
the Japanese American National Museum.
THOMAS R. SCHWARZ, 63, has been a Director of the Company since 1995.
Mr. Schwarz was Chairman of Grossman's Inc., a retailer of building materials,
from 1990 to 1994, when he retired. Mr. Schwarz was President, Chief Operating
Officer and a director of Dunkin' Donuts Incorporated, a food service company,
from 1980 to 1990. He is the Chairman of the Board of Directors of TransAct and
a director of Lebhar-Friedman Publishing Company, Yorkshire Restaurants and
Foilmark, Inc., a manufacturer of hot stamping equipment and supplies. He is a
Trustee of the Tanaka Growth Fund. Mr. Schwarz was a board member of The
Timberland Company, an overseer of WGBH Educational Foundation, Inc. (New
England Public
<PAGE>
Broadcasting), the David Littman Foundation, The Walnut Hill School and
co-chairman of the Inner City Scholarship Fund.
DENNIS J. LEWIS, 45, has been a Director of the Company since 1997.
Mr. Lewis was President of Ultimate Technology Corporation ("Ultimate"),
formerly a wholly owned subsidiary of the Company, from its acquisition by
the Company in 1993 until September 30, 1998. Prior to the acquisition, Mr.
Lewis served as Ultimate's President, Chief Executive Officer and Director
since 1988. Mr. Lewis founded Serv Tech, Inc., a computer sales and
engineering company, and served as its Chairman and Chief Executive Officer
from 1981 to 1983. Mr. Lewis has held senior management positions related to
the sales, engineering and service of computer peripherals with Add
Electronics, RG Engineering, Naum Brothers and Digital Equipment Corporation.
During 1999, Mr. Lewis was a director of Walgem, Inc., was a director of U.S.
Tech, Inc., and was the President and Chief Executive Officer of Innovative
Solutions Corporation.
INFORMATION CONCERNING NON-DIRECTOR EXECUTIVE OFFICERS
THOMAS T. MOUNTS, II, 44, joined Progressive Software, Inc.
("Progressive") as its President in August 1999. Prior to joining Progressive,
he most recently served as Associate Vice President of Software Engineering for
NCR Worldwide Professional Services, where he initiated the development and
deployment of software engineering programs worldwide. Throughout his five year
career with NCR, he also served as Senior Director of Manufacturing, Engineering
and Logistics for NCR Global Applications Development, and Senior
Partner/Director, Technology Consulting US for NCR Professional Services, where
he led client engagement and facilitated the design and development of
customer-specific solutions. Before joining NCR, Mr. Mounts spent 10 years at
IBM in a variety of roles, including Industry Client Executive/Market
Opportunity Manager in the IBM Consulting Group, and Enterprise Software and
Services Manager.
COMPLIANCE WITH SECTION 16(a)
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, or written representations that no other
reports were required for those persons, the Company believes that, during the
fiscal year ended December 31, 1999, the Company's Directors, Executive Officers
and persons who beneficially own more than 10% of the Company's equity
securities filed all reports required under Section 16(a) of the Securities
Exchange Act of 1934.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the four most highly compensated Executive Officers
who earned more than $100,000 in salary and bonus in 1999 for each of the last
three fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (a) LONG TERM ALL OTHER
----------------------- COMPENSATION (COMPENSA
(c)($) -TION(c)($)
SECURITIES
NAME AND FISCAL SALARY BONUS UNDERLYING
PRINCIPAL POSITION YEAR ($) (b)($) OPTIONS(#)
- --------------------------
<S> <C> <C> <C> <C> <C>
Seth M. Lukash 1999 $282,000 $ 0 0 $ 5,000
Chairman of the Board, 1998 $276,000 $ 0 0 $ 4,170
President, Chief 1997 $270,000 $135,000 80,000 $ 1,055
Executive Officer and
Chief Operating Officer
Gary H. German 1999 $157,600 $ 3,000 0 $ 22,393
Vice President, Sales 1998 $135,375 $ 11,824 0 $ 36,512
and Marketing, Ultimate 1997 $132,598 $ 12,917 45,000 $239,833
Technology Corporation
John MacWillie (d) 1999 $150,000 $ 0 25,000 $ 3,036
VP Technology & 1998 $ 96,634 $ 0 40,000 $ 1,250
Strategic Bus. Devel.,
Tridex Corporation
Daniel A. Bergeron (e) 1999 $150,000 $ 0 25,000 $ 1,786
Vice President and Chief 1998 $117,692 $ 0 60,000 $ 563
Financial Officer,
Tridex Corporation
Samuel J. Villanti (f) 1999 $145,000 $ 3,000 0 $ 2,033
President, Ultimate 1998 $ 68,265 $ 0 30,000 $ 0
Technology Corporation
</TABLE>
(a) Neither the Chief Executive Officer nor any of the other Executive
Officers named in the table received perquisites or other personal
benefits in an amount which exceeded 10% of their salary plus bonus
during 1999.
(b) The bonus amounts are payable pursuant to the Company's discretionary
incentive plan described more fully in the Report of the Compensation
and Stock Option Committee of the Board of Directors.
(c) In March 1997, Mr. German received 14,500 shares of the Company's
common stock under a Stock Incentive Compensation Agreement with the
Company. On the date of grant, the Company's common stock price was
$16.4375. Accordingly, Mr. German's compensation was $238,344. Mr.
German received an additional 7,250 shares
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in January 1998, at a price of $4.8125, for additional compensation of
$34,890, and a final 7,250 shares in January 1999, at a price of
$2.8125, for additional compensation of $20,391. All other amounts
reported in this column consist entirely of Company contributions under
the Company's 401(k) Plan.
(d) Mr. MacWillie joined the Company in May 1998 and resigned from the
Company in February 2000.
(e) Mr. Bergeron joined the Company in March 1998 as its Chief Financial
Officer and resigned from the Company in February 2000.
(f) Mr. Villanti joined the Company on October 12, 1998. He remained as
President of Ultimate until the sale of Ultimate on February 18, 2000,
and is no longer an employee of Tridex.
OPTION GRANTS IN 1999
Except as set forth below, no options to purchase the Company's
common stock were granted during the fiscal year ended December 31, 1999 to
the named Executive Officers:
<TABLE>
<CAPTION>
Grant Date Value (b)
Individual Grants
----------------------------------------------------
% of Total
Options
Granted to
Employees Exercise or Expira
Options in Base Price -tion
NAME Granted(a) the Year ($/share) Date
- ---- ---------- -------- --------- ---- --------------------
<S> <C> <C> <C> <C> <C>
Daniel A. Bergeron 25,000 13.48% $2.03125 3/26/09 $17,490
John MacWillie 25,000 13.48% $2.03125 3/26/09 $17,490
</TABLE>
(a) All options were granted under the Company's 1997 Long Term Incentive
Plan (the "1997 Plan"). In general, options granted under the 1997 Plan
are at an exercise price equal to 100% of the fair market value of the
common stock on the date of grant, expire ten years from the date of
grant, and become exercisable on the first through third anniversaries
of the date of grant.
(b) The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted average assumptions: expected volatility of 43.0%;
expected life of 3 years; risk-free interest rate of 5.1%; and
common stock dividend rate of 0%.
<PAGE>
AGGREGATE OPTION EXERCISES IN 1999 AND VALUES AT DECEMBER 31, 1999
No options to purchase the Company's common stock were exercised by
the named Executive Officers during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options At In-the-Money
December 31, 1999 Options ($)(a)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Seth M. Lukash 53,332 26,668 -- --
Gary H. German 30,000 15,000 -- --
John MacWillie 15,000 55,000 -- --
Dan Bergeron 20,000 65,000 -- --
Samuel 10,000 20,000 -- --
Villanti
</TABLE>
(a) The closing price for the Company's common stock as reported by the
Nasdaq Stock Market on December 31, 1999 was $1.625. Consequently, none
of the options were in-the-money as of December 31, 1999.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial
ownership of the Company's common stock as of April 24, 2000 for each person who
is known by the Company to own beneficially more than five percent of the
Company's issued and outstanding common stock, each person who is a Director, a
nominee for Director, or an individual named in the Summary Compensation Table,
and all Directors and Executive Officers of the Company as a group. The persons
named in such table have furnished the information set forth opposite their
respective names:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(a) CLASS(b)
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
MANAGEMENT BENEFICIAL OWNERS
Seth M. Lukash 602,705 (c) 9.35%
Graham Y. Tanaka 137,516 (d) 2.15%
Paul J. Dunphy 55,500 (e) *
Thomas R. Schwarz 20,500 (e) *
Dennis J. Lewis 137,014 (f) 2.05%
Daniel A. Bergeron 0 (g) *
Gary H. German 77,256 (g) *
John MacWillie 0 (g) *
Samuel J. Villanti 10,000 (h) *
All Directors and Executive Officers
as a group (5 persons) 953,235 (i) 14.69%
OTHER BENEFICIAL OWNERS
Paul J. Smith 714,000 11.21%
85 North Hill Side Drive, North Myrtle Beach, SC 29582
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Massachusetts Mutual Life Insurance Company & Related Parties 1,085,714 (j) 15.15%
1295 State Street, Springfield, MA 01111
Dimensional Fund Advisors, Inc. 318,700 (k) 5.00%
1299 Ocean Avenue, Santa Monica, CA 90401
</TABLE>
(a) Except as otherwise indicated, each of the persons named in the table
has sole voting power and sole investment power with respect to the
shares set forth opposite his name.
(b) An asterisk denotes beneficial ownership of less than 1%.
(c) Includes 80,000 shares exercisable under the Company's 1997 Long Term
Incentive Plan (the "1997 Plan"). Mr. Lukash's address is care of the
Company at 61 Wilton Road, Westport, CT 06880.
(d) Includes 2,000 shares held of record by Mr. Tanaka's sons, and 13,000
shares issuable upon exercise of options granted under the Company's
Non-employee Directors' Stock Plan (the "Directors' Plan") which are
currently exercisable or become exercisable within 60 days.
(e) Includes 13,000 shares issuable upon exercise of options granted under
the Director's Plan which are currently exercisable or become
exercisable within 60 days.
(f) Includes 1,000 shares issuable upon exercise of options granted under
the Director's Plan which are currently exercisable or become
exercisable within 60 days.
(g) Vested options terminated immediately upon the officer's leaving the
employ of Tridex.
(h) Represents 10,000 vested options issued under the 1997 Plan which
remain exercisable until May 18, 2000 pursuant to Mr. Villanti's Stay
Bonus Agreement with the Company.
(i) Represents beneficial ownership of the directors and officers of the
Company as of April 24, 2000, and includes 120,000 shares exercisable
under the 1997 Plan and 40,000 shares issuable upon exercise of options
granted under the Directors' Plan which are currently exercisable or
become exercisable within 60 days.
(j) Represents shares beneficially owned by Massachusetts Mutual Life
Insurance Company, MassMutual Corporate Investors, MassMutual
Participation Investors and MassMutual Corporate Value Partners Limited
(the "MassMutual Investors") and includes warrants to purchase 800,000
shares of common stock at $2.03125.
(k) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 318,700
shares of common stock as of December 31, 1999, all of which shares are
held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to 1997, the Company made a personal loan to Seth M. Lukash,
Chairman of the Board, President, Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer and a Director of the Company. During 1999, the
highest outstanding balance of the loan to Seth M. Lukash was $125,000. The loan
is evidenced by a demand note and bears interest at an annual rate equal to the
rate charged by the Company's senior lender on its line of credit. The Company's
Board of Directors has agreed to defer payment of the principal balance of the
loan until June 2000. Interest on the loan is paid quarterly. As of April 24,
2000, the principal amount outstanding under the loan was $125,000.
On March 14, 1997, the Company accepted a note in the amount of
$801,375.00 from Seth M. Lukash in payment of the exercise price of options and
warrants. The note is a full
<PAGE>
recourse note, bearing interest payable quarterly at 7.577% and secured by a
pledge of shares acquired through the exercise of the options and warrants.
The highest amount outstanding under the note during 1999 was $801,375.00. As
of April 24, 2000, the principal balance of this note was $600,000.
Mr. Lukash will repay $350,000 of the outstanding balance of the note by
June 30, 2000.
On March 10, 1997, Mr. Lewis and Mr. German, and along with Paul Wolf,
all of whom were shareholders of Ultimate Technology Corporation ("Ultimate")
prior to its acquisition by Tridex in January 1993 (collectively, the "Ultimate
Officers") entered into a Stock Incentive Compensation Agreement (the "SIC
Agreement") which terminated the Employee Performance Compensation Agreement
entered into among the Ultimate Officers, Ultimate and the Company at the time
of the acquisition. Under the terms of the SIC Agreement, 100,000 shares of the
Company's common stock were issued to the Ultimate Officers, of which 50,000
shares were pledged to Ultimate (the "Pledged Stock") pursuant to a Pledge
Agreement, which expires upon the satisfaction of certain service obligations.
On January 2, 1998 the Company released to the Ultimate Officers 25,000 shares
from escrow. Effective September 30, 1998, Mr. Lewis voluntarily terminated his
employment with Ultimate and, in accordance with the provisions of the SIC
Agreement, forfeited 11,500 shares. The balance of the Pledged Stock was
released to Messrs. German and Wolf in January 1999.
Effective as of February 18, 2000, in connection with the sale of
Ultimate, Tridex entered into a Stay Bonus Agreement with Samuel J. Villanti.
This Agreement provides that the Company shall pay to Mr. Villanti a stay
bonus in the amount of $100,000.00, payable in one lump sum cash payment on
the earlier of (i) a Change in Control of the Company (as defined in the
Agreement), or (ii) May 18, 2001, subject to certain conditions to payment
set forth in the Agreements. The Company also awarded Mr. Villanti stock
options to purchase 30,000 shares of Company common stock, no par value,
under the 1997 Plan, exercisable in full six (6) months after the date of
grant, or upon a Change in Control of the Company, if earlier.
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TRIDEX CORPORATION
By: /s/ SETH M. LUKASH
----------------------------------------
Seth M. Lukash
Chairman of the Board, President,
Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer and
Director
Date: April 28, 2000
Pursuant to the requirements of the Securities 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/ SETH M. LUKASH Chairman of the Board, President, Chief April 28, 2000
- ------------------------------------ Executive Officer, Chief Operating Officer,
Seth M. Lukash Chief Financial Officer and Director
(Principal Executive Officer
and Principal Financial Officer)
/s/ GRAHAM Y. TANAKA Director April 28, 2000
- ------------------------------------
Graham Y. Tanaka
/s/ PAUL J. DUNPHY Director April 28, 2000
- ------------------------------------
Paul J. Dunphy
Director April 28, 2000
- ------------------------------------
Thomas R. Schwarz
Director April 28, 2000
- ------------------------------------
Dennis J. Lewis
</TABLE>
