<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment Number 2 to Form 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Fiscal Year Ended Commission File Number
December 31, 1993 0-4671
ISOMET CORPORATION
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State of Incorporation IRS Employer Identification
New Jersey No. 22-1591074
Address of Principal Executive Offices
5263 Port Royal Road
Springfield, Virginia 22151
Company's Telephone Number: (703) 321-8301
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock
Par Value $1.00
1,905,590 Shares Were
Outstanding on January 31, 1994
Indicate by check mark whether the Company (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 Company 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 regulations S-K is not contained herein, and will not be
contained, to the best of registrant 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. [x]
On January 31, 1994, the approximate aggregate market value of the
voting stock held by non-affiliates of the Company was $1,015,064.
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The Company hereby amends the following portion of the Company's Form 10-K
for the fiscal year ended December 31, 1993:
PART III
ITEM X DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
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The following table sets forth certain information regarding each
director and nominee.
<TABLE>
<CAPTION>
POSITION WITH
NOMINEE AGE THE CORPORATION SINCE
- ------- --- --------------- -----
<S> <C> <C> <C>
Leon Bademian 62 Executive Vice President 1981
Operations and Director
Lee R. Marks 58 Secretary, Director 1987
Thomas P. Meloy, Jr., Ph.D. 68 Director 1977
Jerry W. Rayburn 53 Executive Vice President 1977
Finance, Treasurer and
Director
Henry Zenzie 64 President, Director 1968
</TABLE>
Business Experience
- -------------------
The principal occupation of each director and nominee for the last five
years and directorship held by each such person is as follows:
Leon Bademian is Executive Vice President, Operations and Technical
Director of the Corporation.
Lee R. Marks is a member of the law firm of Ginsburg, Feldman and Bress,
Chartered.
Jerry W. Rayburn is Executive Vice President, Finance and Treasurer of the
Corporation.
Thomas P. Meloy, Jr., Ph.D. is Benedum Professor, West Virginia University
Henry Zenzie is President of the Corporation. He is also a private
investor in Henry Zenzie & Company, Princeton, NJ. Prior to joining the
Corporation as President in 1981, Mr. Zenzie was Senior Vice President of
Prescott, Ball and Turben, New York, NY from 1978.
There are no family relationships between any director, executive officer
or director nominee.
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Certain Relationships and Related Transactions
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The law firm of Ginsburg, Feldman and Bress, Chartered, of which Lee R.
Marks, a Director and Nominee Director of the Corporation, is a member, received
fees in fiscal 1993 for legal services rendered to the Corporation. It is
anticipated that Ginsburg, Feldman and Bress will continue to provide legal
services to the Corporation, to be billed at the law firm's usual hourly rates,
in 1994.
Meetings and Committees of the Board of Directors
- -------------------------------------------------
The Board of Directors held three meetings in the fiscal year ended
December 31, 1993. One Director, Dr. Meloy, did not attend one of the meetings.
The Board of Directors has no standing audit, nominating, compensation or
similar committee.
ITEM XI MANAGEMENT/RENUMERATION
-----------------------
(a) The following information is furnished with respect to the President of the
Corporation and the other five executive officers of the Corporation. The
executive officers of the Corporation are the highest paid employees of the
Corporation for the fiscal year ended December 31, 1993.
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(b) Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
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Annual Compensation Awards Payouts
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Annual Restricted Securities Other
Name and Compen- Stock Underlying LTIP Compen-
Principal Salary Bonus/(1)/ sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Henry Zenzie 1993 78,177 -0- -0- -0- -0- -0- -0-
President 1992 84,021 -0- -0- -0- -0- -0- -0-
1991 84,854 -0- -0- -0- -0- -0- -0-
Jerry Rayburn 1993 132,264 2,645 -0- -0- 15,000 -0- -0-
Executive Vice 1992 151,347 3,027 -0- -0- -0- -0- -0-
President of 1991 152,601 3,052 -0- -0- -0- -0- -0-
Finance and
Treasurer
Leon Bademian 1993 132,264 2,645 -0- -0- 15,000 -0- -0-
Executive Vice 1992 151,347 3,027 -0- -0- -0- -0- -0-
President of 1991 152,601 3,052 -0- -0- -0- -0- -0-
Operations
Robert Bonner 1993 76,934 1,539 -0- -0- 3,500 -0- -0-
Vice President 1992 85,105 1,702 -0- -0- -0- -0- -0-
1991 84,310 1,686 -0- -0- -0- -0- -0-
Frank Hamby 1993 76,934 1,539 -0- -0- 3,500 -0- -0-
Vice President 1992 85,105 1,702 -0- -0- -0- -0- -0-
1991 84,310 1,686 -0- -0- -0- -0- -0-
Delmar Radar 1993 76,934 1,539 -0- -0- 3,500 -0- -0-
Vice President 1992 85,105 1,702 -0- -0- -0- -0- -0-
1991 84,310 1,686 -0- -0- -0- -0- -0-
</TABLE>
/(1)/ This amount represents Corporation's annual contribution to 401(k) plan.
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(c) Option/SAR Grants in Last Fiscal Year Table
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (1)
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(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options/
Underlying SARs Granted
Options/ To Employees Exercise
SARs in Fiscal Year or Base
Granted /(2)/ Price Expiration
Name (#) ($/Sh) Date 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerry W. Rayburn 15,000 33% $1.52 1/12/2003 37,139 59,137
Leon Bademian 15,000 33% $1.52 1/12/2003 37,139 59,137
Robert Bonner 3,500 8% $1.52 1/12/2003 8,666 13,799
Frank Hamby 3,500 8% $1.52 1/12/2003 8,666 13,799
Delmar R. Rader 3,500 8% $1.52 1/12/2003 8,666 13,799
</TABLE>
/(1)/ Values above are potential realizable values at the end of the ten (10)
year term assuming the 5% and 10% specified compounded rates of increases
in the price of the Corporation's Common Stock over the 10 year period.
The figures are not present values of the assumed increases, but are
noted in constant or future dollars. By use of the 5% and 10% stock
appreciation assumptions, the Corporation does not represent or imply
that such appreciation may be reasonably expected, or that such assumed
rates of appreciation are reasonable. These assumptions regarding
appreciation were used in compliance with legal requirements.
/(2)/ Options to acquire common stock of the Corporation.
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(d) Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Value Table:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Underlying Value of
Unexercised Unexercised In-
Options/SARs at FY- the-Money
End (#) Options/SARs at
FY-End ($)/(1)/
Shares Acquired Exercisable/
on Exercise Value Unexercisable Exercisable/
(#) Realized Unexercisable
Name ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Henry Zenzie -0- -0- 10,000/30,000/(2)/ -0-/-0-
Jerry W. Rayburn -0- -0- 5,000/40,000/(2)(3)/ -0-/-0-
Leon Bademian -0- -0- 5,000/40,000/(2)(3)/ -0-/-0-
Robert Bonner -0- -0- 1,166/2,334/(4)/ -0-/-0-
Frank Hamby -0- -0- 1,166/2,334/(4)/ -0-/-0-
Delmar R. Rader -0- -0- 1,166/2,334/(4)/ -0-/-0-
</TABLE>
/(1)/ Closing price on December 31, 1993 was less than the exercise price for
both exercisable and unexercisable option shares and therefore no
"in-the-money" value resulted on these option shares.
/(2)/ 30,000 of these option shares may be exercised in whole or in part at any
time only (i) following the death of the director, or (ii) if the
director ceases for any reason to be a member of the Corporation's Board
of Directors, or (iii) if the Corporation's Board of Directors for good
cause permits such exercise; or (iv) there is a change of ownership or
effective control in the Corporation within the meaning of Section 280G
of the United States Internal Revenue Code.
/(3)/ 10,000 of these option shares may be exercised on the following basis:
50% of the shares may be exercised on January 12, 1995; and 100% of the
shares may be exercised on January 12, 1996.
/(4)/ 2,334 of these option shares may be exercised on the following basis: 50%
of the shares may be exercised on January 12, 1995; and 100% of the
shares may be exercised on January 12, 1996.
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(e) Long-Term Incentive Plans - Awards in Last Fiscal Year
None. The Corporation does not maintain any long-term incentive plan.
(f) Defined Benefit or Actuarial Plan Disclosure
PENSION PLAN TABLE
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None. The Corporation does not maintain any defined benefit or actuarial
plan.
(g) Compensation of Directors
Standard Arrangements: The Corporation does not pay director's fees.
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Other Arrangements: On January 11, 1993, the Board of Directors approved
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the grant of incentive stock options under the 1992 Isomet Corporation
Incentive Stock Option Plan to certain employees of the Corporation. The
directors receiving such options under this grant were as follows: (i) Leon
Bademian, 15,000 option shares; (ii) Jerry W. Rayburn, 15,000 option
shares; (iii) Frank Hamby, 3,500 option shares; (iv) Robert Bonner, 3,500
option shares; and (v) Delmar R. Rader, 3,500 option shares. The option
exercise price for these qualified shares is $1.52 per share (the fair
market value of the shares on the date of grant). The options expire on
January 12, 2003 and are exercisable according to the following formula: 33
1/3% of the shares may be exercised on January 12, 1994; 66 2/3% of the
shares may be exercised on January 12, 1995; and 100% of the shares may be
exercised on January 12, 1996.
(h) Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
EMPLOYMENT CONTRACTS: None. The Corporation has no employment contracts.
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CHANGE-IN-CONTROL ARRANGEMENTS.
------------------------------
(1) Effective as of June 1, 1988, the Corporation entered into change
of control employment agreements, identical in their terms and conditions,
with two of its executive vice presidents, Leon Bademian and Jerry W.
Rayburn (the "Agreement(s)"). The term of each Agreement ran for five
years commencing with the effective date of a change in control as defined
in the Agreements. If either the Corporation or the executive terminated
the executive's employment during this five year period, the executive was
entitled to severance pay in varying amounts determined by when and which
party terminated the employment and based upon the executive's salary for
the year immediately preceding the date of the change in control, subject
to increases for cost of living. Each executive's salary for the periods
covered by the Agreements was also based upon that executive's salary for
the year immediately preceding the date of the change in control and
subject to cost of living increases. The Agreements contained covenants
restricting each executive from engaging in competing businesses or certain
conduct with the Corporation's vendors; requiring the executive to return
all Corporation-owned materials and equipment; and prohibiting the
disclosure of confidential information of the Corporation. The Agreements
required the executive to assist the Corporation in acquiring intellectual
property rights in any invention the executive may have made or conceived
while employed by the
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Corporation. The Agreements provided for injunctive relief as well as
other remedies for breach. Effective as of June 1, 1994, the Corporation
and each executive mutually agreed to cause each respective Agreement
together with each respective Original Severance Agreement (as defined
below) to be terminated in consideration of the Corporation and each
executive entering into each respective New Severance Agreement (as defined
below).
(2) Effective as of June 2, 1988, the Corporation's Board of Directors
approved the grant of non-qualified stock options to purchase common stock
to certain officers and directors of the Corporation as follows: (i) Henry
Zenzie, 30,000 option shares; (ii) Leon Bademian, 30,000 option shares;
(iii) Jerry W. Rayburn, 30,000 option shares; and (iv) Lee Marks, 7,500
option shares. The exercise price for all options granted was $1.75 per
share. These non-qualified stock option shares terminate ten years from
the date of grant and may be exercised in whole or in part at any time only
(i) following the death of the director, or (ii) if the director ceases for
any reason to be a member of the Corporation's Board of Directors, or (iii)
if the Corporation's Board of Directors for good cause permits such
exercise; or (iv) there is a change of ownership or effective control in
the Corporation within the meaning of Section 280G of the United States
Internal Revenue Code.
TERMINATION OF EMPLOYMENT ARRANGEMENTS.
--------------------------------------
(1) Effective as of December 20, 1978, the Corporation entered into
severance employment agreements, identical in their terms and conditions,
with two of its executive vice presidents, Leon Bademian and Jerry W.
Rayburn (the "Original Severance Agreement(s)"). The terms of each
Original Severance Agreement provided that (i) in the event of a change in
control as defined in the Original Severance Agreement within four years of
the effective date of the Original Severance Agreement (i.e., before
December 20, 1982, which date has passed), the executive was entitled to
continue his employment with the Corporation or receive severance pay equal
to six months' compensation based upon his then salary and (ii) in the
event the Corporation terminated the executive's employment with the
Corporation for any reason, the executive was entitled to receive severance
pay equal to six months' compensation based upon his then salary but not
less than $21,000.00. Based upon the foregoing, the executive was not
entitled to severance pay in the event he voluntarily terminated his
employment with the Corporation. Effective as of June 1, 1994, the
Corporation and each executive mutually agreed to cause each respective
Original Severance Agreement together with each respective Agreement (as
defined above) to be terminated in consideration of the Corporation and
each executive entering into each respective New Severance Agreement (as
defined below).
(2) Effective as of June 1, 1994, the Corporation entered into
severance agreements, identical in their terms and conditions, with two of
its executive vice presidents, Leon Bademian and Jerry W. Rayburn (the "New
Severance Agreement(s)"). Each respective New Severance Agreement has been
entered into in consideration of the termination by each executive and the
Corporation of each respective Original Severance Agreement (as defined
above) and each respective Agreement (as defined above). The terms of each
New Severance Agreement provide that in the event the Corporation
terminates the executive's employment with the Corporation for any reason,
the executive shall be entitled to receive severance pay equal to twelve
months' compensation based upon his then annual base salary only (i.e.,
exclusive of any bonus or other compensation), but in no event shall the
severance pay be less than the total amount of
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$123,573.00, his annual base salary in effect as of the effective date of
the New Severance Agreement(s). Based upon the foregoing, the executive
will not be entitled to severance in the event he voluntarily terminates
his employment with the Corporation (which by way of illustration but not
limitation includes death, disability, retirement or resignation). The New
Severance Agreement provides that the severance pay shall be paid in twelve
equal monthly installments commencing one month after the Corporation
terminates the executive's employment with the Corporation, provided,
however, that the Corporation can within its sole discretion prepay all or
any part of such severance pay. The New Severance Agreements also contain
covenants restricting each executive from engaging in competing businesses
or certain conduct with the Corporation's vendors; requiring the executive
to return all Corporation-owned materials and equipment; prohibiting the
disclosure of confidential information of the Corporation; and requiring
the executive to assist the Corporation in acquiring intellectual property
rights in any invention the executive may have made or conceived while
employed by the Corporation. The New Severance Agreements also provide for
injunctive relief as well as other remedies for breach.
(i) Report on Repricing of Options/SARs
None. The Corporation did not adjust or amend the exercise price of stock
options or SARs previously awarded to any of the named executive officers
during the last fiscal year.
(j) Additional Information with Respect to Compensation Committee Interlock and
Insider Participation in Compensation Decisions
In 1993, four of the Corporation's directors participated in deliberations
and decisions regarding executive officer compensation. They were Mr.
Zenzie, Mr. Bademian, Mr. Rayburn and Mr. Marks.
(k) Board Compensation Committee Report on Executive Compensation
None.
(i) Performance Graph
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ITEM XII SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK
-------------
NAME OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP/1/ OF CLASS/2/
- ---------------- -------------------------- -----------
<S> <C> <C>
Leon Bademian
Officer, Director
and Nominee 6,050/3/ .32
Jerry W. Rayburn
Officer, Director
and Nominee 5,000/4/ .26
Lee R. Marks
Officer, Director
and Nominee 9,833/5/ .51
Thomas P. Meloy, Jr.
Director and Nominee
413 Jefferson Street
Morgantown, WV 26505 141,103/6/ 7.37
Henry Zenzie
Officer, Director
and Nominee 548,088/7/ 28.61
All directors and officers
as a group (8 persons) 719,675 36.97
</TABLE>
- --------------------------------------
/1/ Unless otherwise indicated, each person has sole voting and investment
power with respect to the shares beneficially owned.
/2/ Calculated on the basis of 1,905,590 shares of Common Stock outstanding at
April 15, 1994, plus, in the case of the individual option holder, additional
shares of Common Stock deemed to be outstanding because such shares may be
acquired within 60 days of that date through the exercise of outstanding
options.
/3/ Includes 5,000 shares that Mr. Bademian has an option to acquire within 60
days of April 15, 1994.
/4/ Includes 5,000 shares that Mr. Rayburn has an option to acquire within 60
days of April 15, 1994.
/5/ Includes 7,500 shares that Mr. Marks has an option to acquire within 60
days of April 15, 1994.
/6/ Includes 10,000 shares that Mr. Meloy has an option to acquire within 60
days of April 15, 1994
/7/ Includes 10,000 shares that Mr. Zenzie has an option to acquire within 60
days of April 15, 1994. Also includes 93,060 shares as to which Mr. Zenzie, as
Nominee under certain Nominee and Option Agreements dated as of March 9, 1993,
shares investment power for a maximum term of ten (10) years, but holds no
voting powers hereto. Pursuant to these agreements, Mr. Zenzie also has an
option to immediately acquire 18,612 of such shares.
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ITEM XIII CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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None other than set forth above.
SIGNATURES
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Pursuant to the requirement of The Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment Number 2 to Form 10-K for the fiscal
year ended December 31, 1993 to be signed on its behalf by the undersigned,
thereunto duly authorized.
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ISOMET CORPORATION
(Registrant)
Date: October , 1995 By:
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Jerry W. Rayburn
Executive Vice President,
Finance and Treasurer and Director
