U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1
[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
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ______________.
Commission File No. 0-12575
ARIZONA INSTRUMENT CORPORATION
(Name of small business issuer as specified in its charter)
Delaware 86-0410138
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1912 West 4th Street, Tempe, Arizona 85281
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (602) 470-1414
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 par value
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. [X] Yes [ ] No
[X] Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B 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.
The issuer's revenues for its fiscal year ended December 31, 1999, were
$9,052,505.
As of March 22, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $5,782,000, based on the closing sale price
of $4.375 per share, as reported on the NASDAQ SmallCap Market. The aggregate
market value is computed with reference to the average bid and asked prices.
Shares of Common Stock held by each officer and director and by each person who
owns 10% or more of the outstanding Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily conclusive.
As of April 12, 2000, 1,371,399 shares of Common Stock ($.01 par value) were
outstanding.
<PAGE>
Arizona Instrument Corporation (the "Company") hereby amends its Report on
Form 10-KSB for the year ended December 31, 1999, by adding thereto Items 9, 10,
11, and 12, as set forth below.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Set forth below are the name and business address of each director and
executive officer of Arizona Instrument, the present principal occupation or
employment of each such person, and the name, principal business and address of
the corporation or other organization in which such occupation or employment of
each such person is conducted. Also set forth below are the material
occupations, positions, offices and employment of each such person and the name,
principal business and address of any corporation or other organization in which
any material occupation, position, office or employment of each such person was
held during the last five years. Messrs. Emerson, Hays, Schwartz and Zylstra are
directors of Arizona Instrument. Each person listed below is a citizen of the
United States. None of the people listed below has been convicted in a criminal
proceeding during the past five years (excluding traffic violations or similar
misdemeanors). None of the people listed below has been a party to any judicial
or administrative proceeding during the past five years (except for matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining the person from future violations of, or
prohibiting, activities subject to federal or state securities laws, or a
finding of any violation of federal or state securities.
Name and Business Address Principal Occupations
- ------------------------- ---------------------
S. Thomas Emerson, Ph.D. President and CEO of Arizona Technology
1912 West Fourth Street Incubator, located at 1435 North Hayden
Tempe, Arizona 85281 Road, Scottsdale, Arizona 85257,a
(602) 470-1414 partnership that mentors promising young
Age: 59 technology companies. Dr. Emerson was
Chairman of Xantel Corporation, located at
3710 East University Drive, Phoenix,
Arizona 85034, a private company engaged in
computer communications, from August 1992
to January 1998.
George G. Hays Chairman of the Board of Directors,
1912 West Fourth Street President and Chief Executive Officer of
Tempe, Arizona 85281 Arizona Instrument. Mr. Hays joined Arizona
(602) 470-1414 Instrument in March 1997, as Vice President
Age: 44 of Finance, Chief Financial Officer and
Vice President of Manufacturing of Arizona
Instrument. In November 1997, Mr. Hays was
elected President and Chief Executive
Officer of Arizona Instrument. In January
1998, Mr. Hays was elected Chairman of the
Board of Directors. Prior to joining
Arizona Instrument, Mr. Hays was President
and founder of Hays Financial Group, Inc.,
located at 6227 East Sunnyside Drive,
Scottsdale, Arizona 85245, an investment
banking firm since 1986. Mr. Hays is still
President of Hays Financial Group, Inc.
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<PAGE>
Name and Business Address Principal Occupations
- ------------------------- ---------------------
Harold D. Schwartz President of Chez & Schwartz, Incorporated,
1912 West Fourth Street located at 161 East Chicago Avenue,
Tempe, Arizona 85281 Chicago, Illinois 60611, a marketing and
(602) 470-1414 sales consulting firm, since 1973. Mr.
Age: 74 Schwartz currently serves on the Board of
Directors of Cobra Electronics Corporation,
a public company.
Steven G. Zylstra President and CEO of Pittsburgh Technology
2000 Technology Drive Council, a technology trade association and
Pittsburgh, Pennsylvania 15219 President and CEO of Southwestern
(412) 687-0200 Pennsylvania Industrial Resource Center, an
Age: 46 economic development entity. From 1995 to
2000, Mr. Zylstra served as Director of
Business Development for Simula
Technologies, Inc., (initially a division
of, and subsequently a subsidiary of Simula
Government Products, Inc.) located at 10016
South 51st Street, Phoenix, Arizona 85044.
Simula specializes in the development and
production of high-tech transportation
seating and safety systems, composite
technologies, and ballistic armor systems.
Linda J. Shepherd Controller, Chief Accounting Officer, and
1912 West Fourth Street Secretary. Ms. Shepherd has been an
Tempe, Arizona 85281 accountant for Arizona Instrument since
(602) 470-1414 1984. In mid 1997, Ms. Shepherd became the
Age: 48 Controller and Chief Accounting Officer of
Arizona Instrument, and in mid 1998,
assumed the position of Corporate Secretary
for Arizona Instrument.
COMPLIANCE WITH SECTION 16(a) REPORTING REQUIREMENTS
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than 10% of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the SEC. Specific
due dates for these reports have been established and the Company is required to
disclose any failure to file by these dates. All of these filing requirements
were satisfied during the year ended December 31, 1999. In making these
disclosures, the Company has relied solely on written representation of its
directors and executive officers and copies of the reports that they have filed
with the Commission.
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<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, with respect to the years ended December 31,
1997, 1998 and 1999, compensation awarded to, earned by or paid to all
individuals serving as the Company's Chief Executive Officer during fiscal 1999,
and each of the Company's other executive officers who were serving as an
executive officer at December 31, 1999, and whose salary and bonus aggregated at
least $100,000 for services rendered to the Company during fiscal 1999.
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------
Annual Compensation Awards Payouts
--------------------------- ----------------------- --------
Other Securities
Annual Restricted Underlying All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary($) Bonus sation($) Awards(#) SARs(#)(1)(3) Payouts($) sation($)
- ------------------ ---- --------- ----- --------- --------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George G. Hays, 1999 165,000 50,000 29,400(6)(2) 0 0 0 1,454(4)
President and Chief 1998 165,000 6,300 5,400(2) 0 45,000 0 1,338(4)
Executive Officer 1997 113,749 0 4,050(2) 0 15,000 0 1,228(4)
Walfred R. Raisanen, 1999 93,496 0 0 0 0 0 0
Vice President of 1998 195,984 0 0 0 0 0 5,736(4)
Engineering(5) 1997 166,740 29,250 0 0 0 0 4,981(4)
</TABLE>
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(1) All share amounts are adjusted to reflect the 1 for 5 reverse stock split
effective February 16, 1999.
(2) Automobile allowance.
(3) Consists entirely of stock options.
(4) Life insurance premium payments.
(5) Mr. Raisanen left his employment with the Company on February 26, 1999. He
resigned from the Board of Directors on March 15, 1999.
(6) Monthly expense allowance of $2,000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No stock options or stock appreciation rights were granted during the
fiscal year ended December 31, 1999, to the executive officers named in the
Summary Compensation Table.
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<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES TABLE
The following table sets forth information with respect to the executive
officers named in the Summary Compensation Table concerning option exercises
during the fiscal year ended December 31, 1999, and the number and value of
options outstanding as of December 31, 1999. The Company has no outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in-the-
Shares Options at Money Options at
Acquired Value Fiscal Year-End (#)(1) Fiscal Year End ($)
on Realized --------------------------- ---------------------------------
Name Exercise(#) ($) Exercisable Unexercisable Exercisable(2) Unexercisable(2)
- ---- ----------- --- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
George G. Hays 0 0 36,000 24,000 0 0
Walfred R. Raisanen 0 0 16,000 4,000 0 0
</TABLE>
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(1) All share amounts are adjusted to reflect the 1 for 5 reverse stock split
effective February 16, 1999.
(2) Value as of December 31, 1999 is based upon the closing sale price of
$3.75 as reported on the Nasdaq SmallCap Market for December 31, 1999,
minus the exercise price, multiplied by the number of shares underlying the
options.
EMPLOYMENT/CHANGE OF CONTROL ARRANGEMENTS
Effective November 5, 1992, the Company entered into a five-year employment
agreement with Walfred R. Raisanen pursuant to which Mr. Raisanen agreed to
serve as Vice President of Research and Development for a base annual salary of
$120,000, which was adjusted annually for cost-of-living increases. In 1999, the
Company decided not to renew Mr. Raisanen's employment agreement. Mr. Raisanen
terminated his employment with the Company on February 26, 1999. He resigned
from the Board of Directors on March 15, 1999.
The Company's 1991 Option Plan provides that options granted to any
executive officer or director of the Company will become immediately exercisable
and vested in full upon the occurrence, before the expiration or termination of
such option, of (a) delivery of written notice of a stockholders' meeting at
which the stockholders will consider a proposed merger, sale of assets or other
reorganization of the Company, (b) the acquisition by any person of securities
representing 25% or more of the total number of votes entitled to be cast for
the election of directors of the Company, (c) commencement of a tender offer for
the stock of the Company, or (d) failure, at any annual or special meeting of
stockholders following an election contest, of any of the persons nominated by
the Company to win election seats on the board of directors.
The Company's 1991 Option Plan further provides that subject to the above
provisions, in the event a merger or similar reorganization that the Company
does not survive, a sale of all or substantially all of the assets of the
Company, or the dissolution and liquidation of the Company, shall cause every
option outstanding under the 1991 Option Plan to terminate, to the extent not
then exercised, except to the extent that any surviving entity agrees to assume
the 1991 Option Plan and/or the obligations under any such option.
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<PAGE>
Effective January 1, 1998, the Company entered into an employment agreement
with George G. Hays pursuant to which Mr. Hays agreed to serve as President and
Chief Executive Officer. The agreement provides for a base annual salary of
$165,000, subject to merit increases, plus an annual incentive bonus of at least
30% of annual salary based on an incentive bonus plan administered by the Board
of Directors. Mr. Hays is also entitled to participate in any benefit
arrangements available to executive officers of the Company. Upon termination of
the employment agreement without cause, Mr. Hays is entitled to receive an
amount equal to the compensation due him over the balance of the term of the
employment agreement, and to participate in applicable benefit programs for the
balance of the term of the employment agreement. The agreement terminates on
March 31, 2000, and will automatically renew for additional one-year terms until
notice of non-renewal by the Company. This agreement replaces Mr. Hays' previous
employment agreement with the Company dated April 1, 1997, pursuant to which he
was employed as Vice President and Chief Financial Officer. In 1999, the Company
amended and renewed Mr. Hays' employment agreement and extended it through March
31, 2001.
COMPENSATION OF DIRECTORS
Nonemployee directors are currently paid $1,000 plus expenses per board or
committee meeting attended. Pursuant to the 1991 Stock Option Plan, non-employee
directors are automatically granted options exercisable for 500 shares at the
market price on the date of grant upon joining the Board and on each January 1
thereafter. The options become exercisable six months after grant and expire two
years after termination of Board service. In addition, the Company granted to
each outside director, options to acquire an additional 1,500 shares at the
market price on January 1, 1999.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 12, 2000,
except as otherwise indicated, concerning the beneficial ownership of Arizona
Instrument's common stock by (1) each person or group known by Arizona
Instrument to beneficially own more than 5% of the outstanding shares of common
stock; (2) each director of Arizona Instrument; (3) Arizona Instrument's Chief
Executive Officer and the one other executive officer of Arizona Instrument; and
(4) all of Arizona Instrument's directors and executive officers as a group.
Shares of Common Stock Beneficially Owned (1)
Number Percent of
Name and Address (2) of Shares Common Stock
- -------------------- --------- ------------
George G. Hays (3) 66,418 4.6%
S. Thomas Emerson (3) 13,500 1%
Harold D. Schwartz (3) 48,370 3.5%
Steven G. Zylstra (3) 7,120 0.5%
Herbert W. Morgan, III (2) 111,439 8.1%
Linda K. Shepherd (3) 4,196 0.3%
All directors and executive
officers as a group (5 persons) (3) 139,604 9.6%
- ----------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. In accordance with SEC rules, shares that may be acquired upon
exercise of stock options that are currently exercisable or that become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionee. Except as indicated by the footnote, and subject to
community property laws where applicable, the persons or entities named in
the table above have sole voting and investment power with respect to all
shares of common stock shown as beneficially owned by them.
(2) The address of each of the beneficial owners identified is c/o Arizona
Instrument Corporation, 1912 West 4th Street, Tempe, Arizona 85281, except
the address for Herbert W. Morgan, III is 6037 East Jenan Drive,
Scottsdale, Arizona 85254.
(3) Includes shares issuable upon exercise of options that are currently
exercisable or become exercisable within 60 days of April 12, 2000, as
applicable for each of the following individuals:
Hays 60,000 shares
Emerson 9,500 shares
Schwartz 6,000 shares
Zylstra 7,000 shares
Shepherd 4,000 shares
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<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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<PAGE>
SIGNATURES
Pursuant to the requirements of 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.
ARIZONA INSTRUMENT CORPORATION
Date: April 28, 2000 By: /s/ GEORGE G. HAYS
-------------------------------------
George G. Hays
President and Chairman of the Board
(Principal Executive Officer)
By: /s/ LINDA J. SHEPHERD
-------------------------------------
Linda J. Shepherd
(Chief Accounting Officer)
By: /s/ STEVEN G. ZYLSTRA
-------------------------------------
Steven G. Zylstra
Director
By: /s/ S. THOMAS EMERSON, Ph.D.
-------------------------------------
S. Thomas Emerson, Ph.D.
Director
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