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1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT NUMBER 1
(MARK ONE)
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
FOR THE FISCAL YEAR ENDED SEPTEMBER, 30, 1994
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
COMMISSION FILE NUMBER 1-7335
LEE PHARMACEUTICALS
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(Name of small business issuer in its charter)
CALIFORNIA 95-2680312
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1444 SANTA ANITA AVENUE, SOUTH EL MONTE, CALIFORNIA 91733
- --------------------------------------------------- -----
(Address of principal executive offices) (Zip code)
ISSUER'S TELEPHONE NUMBER: (818) 442-3141
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SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT
Name of Each Exchange
Title of Each Class on Which Registered
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Common stock, par value $.10 American Stock Exchange, Inc.
per share
SECURITIES REGISTERED UNDER SECTION 12 (g) OF THE EXCHANGE ACT: NONE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year: $11,915,000 Gross
As of the close of business on November 30, 1994 the aggregate market value of
Lee Pharmaceuticals common stock held by nonaffiliates was $2,523,990.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. Common stock, par value $.10;
4,135,162 shares outstanding as of the close of business on November 30, 1994.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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2
The registrant hereby amends Items 10 & 11.
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3
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth information with respect to renumeration paid
by the Company to the executive officers of the Company with total annual salary
and bonus of at least $100,000 for services in all capacities while acting as
officers and directors of the Company during the fiscal years ended September
30, 1994, 1993 and 1992.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
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ANNUAL COMPENSATION COMPENSATION AWARDS
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Name and Other Annual All Other
Principal Position Year Salary ($) Compensation ($) Options (#) Compensation ($)
- ------------------ ---- ---------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Dr. Henry L. Lee, 1994 137,932 3,028(1) 55,000(4) 231(5)
Chairman 1993 249,544 9,174(1) 22,177(5)
1992 242,143 9,045(1) 10,981(5)
Ronald G. Lee, 1994 206,244 3,884(2) 55,000(4) 1,909(6)
President & Director 1993 225,852 5,464(2) 24,464(6)
1992 221,830 4,806(2) 11,546(6)
Theo. H. Dettlaff, Vice 1994 185,791 55,000(4) 2,728(7)
President, President 1993 209,480 25,569(7)
of Consumer Pro- 1992 200,642 7,188(3) 13,846(7)
ducts Division &
Director
<FN>
(1) Includes reimbursement of medical and dental expense not covered by the
Company's insurance plan of $1,294 and a non-cash fringe benefit of
$1,734 in 1994, $8,116 and $1,058 in 1993 and $6,297 and $2,748 in 1992,
respectively.
(2) Includes reimbursement of medical and dental expense not covered by the
Company's insurance plan of $713 and a non-cash fringe benefit of $3,171
in 1994, $4,383 and $1,081 in 1993 and $1,329 and $3,477 in 1992,
respectively.
(3) Includes a non-cash fringe benefit of $7,188 in 1992.
(4) The Company granted 55,000 stock options on January 24, 1994 which had an
option price of $1.44 at the date of grant.
(5) Amount represents the fair market value of Company shares purchased
and/or forfeitures in the Company's Employee Stock Ownership Plan and
Trust.
(6) Amount represents the fair market value of Company shares purchased
and/or forfeitures in the Company's Employee Stock Ownership Plan and
Trust of $349 in 1994, $22,177 in 1993 and $10,981 in 1992 and life
insurance policy with an annual premium of $1,560 in 1994, $2,287 in 1993
and $565 in 1992.
(7) Amount represents the fair market value of Company shares purchased
and/or forfeitures in the Company's Employee Stock Ownership Plan and
Trust of $311 in 1994, $22,177 in 1993 and $10,981 in 1992 and life
insurance policy with an annual premium of $2,417 in 1994, $3,392 in 1993
and $2,865 in 1992.
Each of the directors of the Company who is not employed by the Company
receives a director's fee of $750 for each quarter and $500 for each
meeting of the Board of Directors attended.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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<TABLE>
<CAPTION>
% of Total
Options Granted
Options to employees in Exercise of Base Expiration
Name Granted (#) Fiscal Year Price ($/Share) Date
- ---- ----------- ----------- --------------- ----
<S> <C> <C> <C> <C>
Henry L. Lee 55,000 27 1.44 1/23/99
Ronald G. Lee 55,000 27 1.31 1/23/99
Theo. H. Dettlaff 55,000 27 1.31 1/23/99
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Unexercised
Options at
Fiscal Year End (#)
Exercisable/
Name Unexercisable
- ---- -------------
<S> <C>
Henry L. Lee 78,667/74,333
Ronald G. Lee 78,667/74,333
Theo. H. Dettlaff 78,667/74,333
</TABLE>
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4
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
The Company established an Employee Stock Ownership Plan and Trust ("Plan")
effective December 1, 1985. The Plan is a tax-qualified employee stock
ownership plan which is designed to invest primarily in the common stock of the
Employer for the benefit of the employees and their beneficiaries.
The benefits provided by the Plan are paid for entirely by the Employer.
The Employer contributions are used to purchase the common stock of the
Employer, which is credited to the individual accounts maintained for each
participant. In addition to providing an opportunity for employees to
participate in the Employer's growth through stock ownership and to provide
funds for employees' retirement, the Plan is designed to be available as a
technique of corporate finance to the Employer.
All employees who had completed at least a six-month period of service with
the Employer as of the effective date of this Plan (December 1, 1985) became
participants in the Plan as of such date. Every other employee will become a
participant in the Plan as of the first day of the month coinciding with or next
following the date upon which he completes a six-month period of service
provided that he is employed by the Employer on such date.
The Employer makes contributions only on behalf of the participants who are
employed by it on the last day of each Plan year, September 30. Contributions
made on behalf of the employees will not be taxable to them until the time
benefits are actually paid to them.
Effective October 1, 1989, the Plan consists of two (2) parts: Plan A, a
stock bonus plan, and Plan B, a money purchase pension plan. The Company's
Board of Directors determines the amount to be contributed annually to Plan A up
to a maximum of fifteen percent (15%) participant compensation for the Plan year
(October 1 through September 30). The contribution under Plan B is a non-
discretionary amount equal to ten percent (10%) of participant compensation for
the Plan year. The contribution by the Company to the Trust for any single Plan
year cannot exceed twenty-five percent (25%) of the total compensation paid to
Plan participants for the year.
Company contributions are allocated to each Participant's Company
Contribution Account in the proportion that his compensation for the Plan year
bears to the total compensation paid to all participants for the Plan year.
Forfeitures which arise under Plan A are allocated to the accounts of the other
participants at the end of the Plan year during which the forfeitures arise due
to termination of employment in the same manner as Company contributions are
allocated. Forfeitures which arise under Plan B are used to offset the
Company's required contribution under Plan B.
The term "vested" as applied in the context of employee benefit plans
refers to that portion of a participant's accounts which has become
nonforfeitable because the participant has accrued a certain number of period-
of-service credits. If a participant reaches normal retirement age (age 65),
becomes permanently disabled, dies or retires at age 65, his interest in his
accounts becomes immediately 100% vested, i.e. nonforfeitable.
The Plan has been amended to conform with the requirements of the Tax
Reform Act of 1986 and effective October 1, 1989, the vesting schedule of the
Plan is as follows:
PERIOD OF SERVICE VESTED PERCENTAGE
Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 years 100%
The following tabulation shows the interest in the Plan and vesting
percentages of the officers who are named in the Cash Compensation Table and all
executive officers as a group as of September 30, 1994.
<TABLE>
<CAPTION>
INTEREST IN THE PLAN
SHARES OF CASH VESTED
NAME COMMON STOCK AMOUNT PERCENTAGE
<S> <C> <C> <C>
Henry L. Lee 66,286 $ 9,058 100%
Theo. H. Dettlaff 64,937 $ 9,100 100%
Ronald G. Lee 63,878 $ 8,850 100%
Michael L. Agresti 28,900 $ 4,046 100%
All executive officers 224,001 $31,054 100%
as a group (4 persons)
</TABLE>
Effective July 1, 1993, the plan was amended for a second time. On
June 30, 1993 Plan B was canceled; therefore, all participants became 100%
vested, in Plan B only, effective July 1, 1993. No contribution was made to
Plan A or B for the period October 1, 1993 through September 30, 1994.
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5
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the only person who, as of December 31,
1994, was known to the Company to be beneficial owner of more than five percent
of the Company's Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE
TITLE OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWERSHIP OF CLASS
<S> <C> <C> <C>
Common Stock Dr. Henry L. Lee 543,787 shares (1) 13%
1444 Santa Anita Avenue
South El Monte, CA 91733
<FN>
(1) Includes 52,000 shares of the Company's common stock which Dr. Lee holds as
trustee for the benefit of certain family members. He has the right to vote
such shares but otherwise disclaims beneficial ownership. Also, includes 78,667
shares subject to options exercisable at or within 60 days after December 31,
1994 and 66,286 shares held under the Company's Employee Stock Ownership Plan
and Trust ("Plan").
</TABLE>
The following table sets forth the ownership of the Company's Common Stock
by its directors and its officers and directors as a group.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE PERCENTAGE
TITLE OF CLASS BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C> <C>
Common Stock Dr. Henry L. Lee 543,787(2)(3) 13%
Common Stock Ronald G. Lee 152,745(2)(3) 4%
Common Stock Theo. H. Dettlaff 143,636(2)(3) 3%
Common Stock Michael L. Agresti 82,352(2)(3) 2%
Common Stock Dennis F. Holt 5,000(3) *
Common Stock Dr. Charles R. Plott 5,000(3) *
Common Stock William M. Caldwell IV 5,000(3) *
All officers and directors
as a group (7 persons) 937,520(2)(3) 21%
<FN>
(2) Includes shares held under the Plan.
(3) Includes shares subject to options exercisable at or within 60 days after
December 31, 1994.
* less than 1%
</TABLE>
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6
SIGNATURES
In accordance with 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.
LEE PHARMACEUTICALS
Date: April 13, 1995 By: Henry L. Lee, Jr.
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Henry L. Lee, Jr.
Chairman of the Board
(Principal Executive Officer)
Date: April 13, 1995 By: Michael L. Agresti
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Michael L. Agresti
Vice President - Finance
(Principal Financial and Accounting
Officer)
