<PAGE> 1
FORM 10-K/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended .........................................June 30, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________________ to ______________________.
Commission File Number 0-5896
JACO ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
New York 11-1978958
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
145 Oser Avenue, Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (516) 273-5500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.10 per share
(Title of Class)
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 Common Stock held by non-affiliates of
the Company, computed by reference to the closing price on September 20, 1996
was $22,722,237.
Number of shares outstanding of each class of Common Stock, as of
September 20, 1996: 3,888,221 shares (excluding 87,500 shares of treasury
stock).
DOCUMENTS INCORPORATED BY REFERENCE:
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company, their
ages, and their positions and terms of office with the Company are set forth
below.
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Joel H. Girsky 57 Chairman of the Board, President, Treasurer, and
Director
Charles B. Girsky 62 Executive Vice President and Director of the
Company
Jeffrey D. Gash 43 Vice President, Finance of the Company
Stephen A. Cohen 59 Director
Edward M. Frankel 58 Director
</TABLE>
Joel H. Girsky has been a Director and executive officer of
the Company since it was founded in 1961. He also is a Director of Nastech
Pharmaceutical Company, Inc. of Hauppauge, New York, and Frequency Electronics,
Inc. of Uniondale, New York. Messrs. Joel H. Girsky and Charles B. Girsky are
brothers.
Charles B. Girsky became an executive officer of the Company
on August 2, 1985 and has been its Executive Vice President since January 1988.
Since April, 1984, he has been President of Distel, Inc., a wholly-owned
subsidiary of the Company since August 1985. He was a founder, Director, and the
President of the Company from 1961 through January 1983, and was elected a
Director of the Company again in 1986. Messrs. Charles B. Girsky and Joel H.
Girsky are brothers.
Jeffrey D. Gash became Vice President of Finance of the
Company in January, 1989, and was Controller of the Company for more than five
years prior thereto. He has also served in similar capacities with the Company's
subsidiaries.
Stephen A. Cohen has been a Director of the Company since
1970. Since August, 1989, he has practiced law as a member of Morrison Cohen
Singer & Weinstein, LLP, general counsel to the Company. For more than five
years prior thereto, he was engaged in the practice of law as a member of the
firm of Friedlander, Gaines, Cohen & Rosenberg, former general counsel to the
Company.
Edward M. Frankel became a Director of the Company in May,
1984. For more than five years, he has been President of Vitaquest
International, Inc., a regional distributor of vitamins and health and beauty
products, and its predecessor entities.
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OTHER KEY EMPLOYEES
The Company also considers the following individuals to be key
to its operations:
Denis Haggerty, Vice President of marketing -- Passives. Mr.
Haggerty, who is 63 years old, oversees marketing of passive components and has
been employed by the Company for approximately 30 years.
Morton J. Denson, Vice President of Marketing -- Actives. Mr.
Denson, who is 62 years old, oversees marketing of active components and has
been employed by the Company for over 9 years.
Herbert Entenberg, Vice President of Management and
Information Systems and Secretary. Mr. Entenberg has been employed by the
Company for over 16 years. Mr. Entenberg, who is 62 years old, oversees
management information systems and operations and is responsible for developing
and implementing the Company's inventory control system.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the Company's three most
recently ended fiscal years, the compensation paid or accrued to the President
of the Company and to the executive officers and other key employees of the
Company, other than the President, whose aggregate annual salary and bonus for
the Company's last fiscal year exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------- ------------------- -------
Name and Other Restricted All Other
Principal Annual Stock Options/ LTIP Compensation
Position Year Salary($) Bonus($) Compensation($) Awards($) SARs (#) Payouts($) ($)(2)
- -------- ---- --------- -------- --------------- --------- -------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joel H. Girsky, 1994 250,000 76,000 -- -- 81,400 -- 62,519
Chairman of the Board, 1995 300,000 193,000 -- -- -- -- 72,100
President, and Treasurer(1) 1996 325,000 387,000 -- -- -- -- 84,301
Charles B. Girsky, 1994 181,000 17,997 -- -- -- -- 3,783
Executive Vice President 1995 206,720 42,073 -- -- -- -- 3,947
of the Company 1996 225,000 96,535 -- -- 15,000 -- 5,608
Jeffrey D. Gash, 1994 96,000 10,000 -- -- 4,033 -- 1,663
Vice President, Finance of 1995 96,347 10,000 -- -- -- -- 1,806
the Company 1996 96,000 42,595 -- -- 5,000 -- 1,841
Denis Haggerty, 1994 90,000 31,377 -- -- 3,667 -- 11,165
Vice President 1995 90,348 36,964 -- -- -- -- 11,029
Marketing 1996 90,000 58,389 27,651(3) -- 5,000 -- 11,302
</TABLE>
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<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------- ------------------- -------
Name and Other Restricted All Other
Principal Annual Stock Options/ LTIP Compensation
Position Year Salary($) Bonus($) Compensation($) Awards($) SARs (#) Payouts($) ($)(2)
- -------- ---- --------- -------- --------------- --------- -------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Morton J. Denson, 1994 114,998 19,887 -- -- -- -- 8,891
Vice President of 1995 115,440 37,955 -- -- -- -- 8,957
Marketing 1996 114,998 50,000 -- -- 2,500 -- 9,330
Herbert Entenberg, 1994 102,560 4,363 -- -- 3,667 -- 3,436
Vice President of 1995 102,816 16,155 -- -- -- -- 3,538
Management and 1996 102,560 20,188 -- -- 2,500 -- 3,197
Information Systems,
and Secretary
</TABLE>
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(1) Mr. Joel Girsky entered into a four-year employment agreement with the
Company, effective as of July 1, 1993, to serve as the Company's Chairman,
President and Treasurer. Pursuant to the agreement, Mr. Girsky shall
receive a base salary of $250,000 for the fiscal year ended June 30, 1994,
$300,000 for the fiscal year ended June 30, 1995, and $325,000 for the
fiscal years ended June 30, 1996 and June 30, 1997. In addition, he is
entitled to receive a cash bonus equal to four percent (4%) of the
Company's earnings before income taxes for each year in which such
earnings are in excess of $1,000,000, and six percent (6%) of the
Company's earnings before income taxes for each year in which such
earnings are in excess of $2,500,000. Mr. Girsky or his estate, as the
case may be, is entitled to receive a payment of $500,000 if he dies or
becomes permanently disabled during the term of the employment agreement.
The death and disability benefit is funded by a "key man" life insurance
policy maintained by the Company. In the event of Mr. Girsky's cessation
of employment with the Company, upon his request, the Company is obligated
to transfer such policy to Mr. Girsky. Thereafter, the Company would have
no further liability for the payment of such benefit or the premiums on
such policy. In addition, pursuant to the terms of the employment
agreement, Mr. Girsky is to receive deferred compensation which accrues at
the rate of $50,000 per year, and becomes payable in a lump sum at the
later of (i) Mr. Girsky's attainment of age 60, or (ii) his cessation of
employment, with or without cause by the Company at any time after July 1,
1993. In the event of a change in control resulting in termination of Mr.
Girsky's employment, Mr. Girsky will receive between $450,000 and
$600,000, depending on the date of termination.
(2) Includes auto expenses, 401(k) matching contributions by the Company,
premiums paid on group term life insurance, taxable portion of split
dollar life insurance policies and deferred compensation accrued in
connection with Mr. Joel Girsky's employment agreement with the Company,
as described in footnote (1) above. Auto expenses for fiscal 1996 for the
Named Executives were as follows: Mr. Joel Girsky -- $23,686, Mr. Charles
Girsky -- $2,110, Mr. Gash -- $724, Mr. Entenberg -- $2,001, Mr. Haggerty
-- $9,600 and Mr. Denson -- $7,200. 401(k) matching contributions for
fiscal 1996 for the Named Executives were as follows: Mr. Joel Girsky --
$988, Mr. Charles Girsky -- $1,041, Mr. Gash -- $1,035, Mr. Entenberg --
$957, Mr. Haggerty -- $1,140 and Mr. Denson -- $1,217. Premiums paid on
group term life insurance for fiscal 1996 for the Named Executives were as
follows: Mr. Joel Girsky -- $1,575, Mr. Charles Girsky $2,457, Mr. Gash --
$82, Mr. Entenberg -- $239, Mr. Haggerty -- $562 and Mr. Denson -- $913.
The taxable portion of split dollar life insurance policies for Mr. Joel
Girsky was $8,052 for fiscal 1996. $50,000 deferred compensation was
accrued in fiscal 1996 in connection with Mr. Joel Girsky's employment
agreement with the Company.
(3) Includes information regarding value realized (market value on date of
exercise less exercise price) on stock options previously granted under
the Company's option plans and exercised during fiscal 1996 by Mr.
Haggerty.
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STOCK OPTIONS
The following tables set forth information concerning the grant of stock
options made during Fiscal 1996 to each of the persons described in the Summary
Compensation Table on page 4 and the number and value of unexercised options
held by them at the fiscal year-end.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Individual Grants(1)
- ---------------------------------------------------------------------------------------------------------------------------
Percent of Potential Realizable Value
Total at Assumed Annual Rates
Options/ of Stock Price Appreciation
SARs For Option Term(2)
Options/ Granted to ------------------
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (#) Year ($/Sh) Date 5% ($) 10%($)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joel H. Girsky 0 0% -- -- $ -- $ --
Charles B. Girsky 15,000 24% $12.75 November 8, 2000 $52,839 $116,760
Jeffrey D. Gash 5,000 8% $12.75 November 8, 2000 $17,613 $ 38,920
Denis Haggerty 5,000 8% $12.75 November 8, 2000 $17,613 $ 38,920
Morton J. Denson 2,500 4% $12.75 November 8, 2000 $ 8,807 $ 19,460
Herbert Entenberg 2,500 4% $12.75 November 8, 2000 $ 8,807 $ 19,460
</TABLE>
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(1) The options in the table were granted on November 8, 1995 under the
Company's 1993 Non-Qualified Plan and have exercise prices equal to the fair
market value of the Common Stock on the date of grant. The options become
exercisable one year from the date of grant.
(2) The potential realizable value assumes that the stock price
increases from the date of grant until the end of the option term (5 years) at
the annual rate of 5% and 10%. The assumed annual rates of appreciation are
computed in accordance with the rules and regulations of the Securities and
Exchange Commission. No assurance can be given that the annual rates of
appreciation assumed for the purposes of the table will be achieved, and actual
results may be lower or higher.
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AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Shares Option/SARs at Option/SARs at
Acquired FY-End (#) FY-End ($)(1)
on Value ---------------------------- -----------------------------
Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joel H. Girsky -- -- 81,400 -- 428,754 --
Charles B. Girsky -- -- -- 15,000 -- --
Jeffrey D. Gash -- -- 4,033 5,000 21,242 --
Dennis Haggerty 3,667 27,651 -- 5,000 -- --
Morton J. Denson -- -- -- 2,500 -- --
Herbert Entenberg -- -- 3,667 2,500 19,629 --
</TABLE>
- -------------------
(1) Based on the fair market value per share of the Common Stock at year
end, minus the exercise or base price on "in-the-money" options. The
closing sale price for the Company's Common Stock as of June 30, 1996 on
the NASDAQ National Market System was $10.125.
COMPENSATION OF DIRECTORS
Pursuant to the Company's 1993 Stock Option Plan for Outside Directors
(the "Outside Directors Plan"), the Company's outside directors (directors who
are not employees of the Company) were each granted options on December 31, 1993
to purchase 14,667 shares of Common Stock. In addition, the Outside Directors
Plan provides that each outside director shall also be granted on each December
31 subsequent to December 31, 1993 stock options to purchase 2,933 shares of
Common Stock. All options granted under the Outside Directors' Plan are
immediately exercisable, and the exercise price per share of each option is
equal to the fair market value of the shares of Common Stock on the date of
grant.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company's employment agreement with Mr. Joel Girsky is described in
the footnotes to the Summary Compensation Table on page 4 of this Proxy
Statement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Stephen A. Cohen, a Director of the Company, is a member of Morrison
Cohen Singer & Weinstein, LLP, general counsel to the Company. Mr. Cohen
currently owns 4,789 shares of Common Stock and options to purchase an
additional 20,533 shares of Common Stock. Mr. Cohen
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is one of the two members of the Company's Compensation Committee, the committee
responsible for determining and administering the Company's compensation
policies for the remuneration of the Company's senior management.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
Common Stock owned as of October 17, 1996 (i) by each director of the Company
and each nominee for director, (ii) all persons who, to the knowledge of the
Company, are the beneficial owners of more than 5% of the outstanding shares of
Common Stock, (iii) each of the executive officers and other key employees named
in the Summary Compensation Table, and (iv) all of the Company's directors,
executive officers and such other key employees, as a group. Each person named
in the table has sole investment power and sole voting power with respect to the
shares of Common Stock set forth opposite such person's name, except as
otherwise indicated.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Common Stock
Name of Beneficial Owner Beneficially Owned(1) Outstanding(2)
- ------------------------ --------------------- --------------
<S> <C> <C>
Joel H. Girsky
President, Treasurer
and Director 522,540(3) 13.2%
Charles B. Girsky
Executive Vice President and
Director of the Company 263,274(4) 6.7%
</TABLE>
- -----------------------
** Less than 1%.
(1) Includes shares of Common Stock issuable pursuant to options exercisable
within sixty (60) days from the date hereof.
(2) Based upon (i) 3,888,221 shares of Common Stock issued and outstanding
(excluding 87,500 shares of treasury stock), plus, if appropriate, (ii)
the number of shares of Common Stock which may be acquired by the named
person or by all persons included in the group pursuant to the exercise
of options exercisable within sixty (60) days from the date hereof.
(3) Includes 81,400 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Non-Qualified Stock
Option Plan.
(4) Includes 15,000 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Non-Qualified Stock
Option Plan.
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<TABLE>
<CAPTION>
Percentage of
Number of Shares Common Stock
Name of Beneficial Owner Beneficially Owned(1) Outstanding(2)
- ------------------------ --------------------- --------------
<S> <C> <C>
Stephen A. Cohen
Director 25,322(5) **
Edward M. Frankel
Director 20,533(5) **
Jeffrey D. Gash
Vice President, Finance of
the Company 9,565(6) **
Denis Haggerty
Vice President of Marketing 5,000(7) **
Morton J. Denson
Vice President of Marketing 4,500(8) **
Herbert Entenberg
Vice President of Management
and Information Systems,
and Secretary 6,167(9) **
T. Rowe Price Associates
100 East Pratt Street
Baltimore, MD 21202 309,000(10) 7.9%
All Directors, executive officers
and other key employees
as a group (8 persons) 856,901(11) 21.2%
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended 1996, the Company incurred approximately $571,000 of
rental expenses in connection with its main headquarters and centralized
inventory distribution facility, located in Hauppauge, New York, which was paid
to Bemar Realty Company ("Bemar"), the owner of such premises. Bemar is a
partnership consisting of Messrs. Joel Girsky and Charles Girsky, both of whom
are officers, directors and principal shareholders of the Company. The lease on
the property, which is net of all expenses, including taxes, utilities,
insurance, maintenance and repairs was
- -------------------
(5) Includes 20,533 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Stock Option Plan
For Outside Directors.
(6) Includes of 9,033 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Non-Qualified Stock
Option Plan.
(7) Consists of 5,000 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Non-Qualified Stock
Option Plan.
(8) Includes 2,500 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Non-Qualified Stock Option
Plan.
(9) Consists of 6,167 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's 1993 Non-Qualified Stock
Option Plan.
(10) These securities are owned by T. Rowe Price New Horizons Fund, Inc. for
which T. Rowe Price Associates, Inc. ("Price Associates") serves as
investment advisor. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(11) Includes 160,166 shares of Common Stock acquirable pursuant to the
exercise of options.
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renewed on January 1, 1996 and expires on December 31, 2003. The current rental
rate is lower than the rate paid under the prior lease.
During fiscal 1996, Joel H. Girsky, the Chairman, President and Treasurer of
the Company, was indebted to the Company under demand loans bearing interest at
a rate of 9 3/4% per annum, the greatest amount of which indebtedness was
$313,808 during such fiscal year. Such indebtedness was repaid in full on
October 27, 1995.
In September 1995, the Company's Board of Directors adopted a policy
prohibiting the Company from making any loan or advance of money or property to,
or guaranteeing the obligation of, any non-employee director of the Company and
limiting the Company's ability to make such loans, advances or guarantees to
employee directors and executive officers of the Company or its subsidiaries
unless a majority of independent disinterested outside directors determine that
such loan, advance or guarantee may reasonably be expected to benefit the
Company. See also "Executive Compensation -- Compensation Committee Interlocks
and Insider Participation."
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JACO ELECTRONICS, INC.
Date: October 25, 1996 By: /s/ Jeffrey D. Gash
--------------------------------
Jeffrey D. Gash, Vice President-
Finance
