SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- - - - - - - - - - -
FORM 10-K/A
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 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 0-12588
Salient 3 Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware 23-2280922
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P.O. Box 1498, Reading, Pennsylvania 19603
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 856-5500
Securities registered pursuant to Section 12 (g) of the Act:
Class A Common Stock, par value $1.00 per share
(Title of Class)
Class B Common Stock, par value $1.00 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. X
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The names, ages and present positions of the directors and executive
officers of the Company as well as other relevant information are set forth
below:
<TABLE>
Year In Which
First Became
Name Age Position With Company Director
---- --- --------------------- -------------
<S> <C> <S> <C>
John W. Boyer, Jr. . . . . . . 71 ----- 1984
Timothy S. Cobb . . . . . . . . 58 Chairman of the Board, President 1993
and Chief Executive Officer
Dennis F. Foster . . . . . . . . 59 ----- 1998
Thomas F. Hafer . . . . . . . 51 Senior Vice President, General Counsel ------
and Secretary
Robert E. LaBlanc . . . . . . 66 ----- 1997
Donald E. Lyons . . . . . . . 70 ----- 1989
Paul H. Snyder . . . . . . . . . 53 Senior Vice President and Chief 1995
Financial Officer
Dennis F. Strigl . . . . . . . . 53 ----- 1998
Donald K. Wilson, Jr. . . . . 64 ----- 1990
</TABLE>
Mr. Boyer retired in May 1993 as Chairman of Philadelphia Suburban
Corporation whose principal subsidiary, Philadelphia Suburban Water Company,
is a regulated water utility. Mr. Boyer served in various senior executive
positions with that company since 1981. He is a director of The Rittenhouse
Trust Company. Mr. Boyer is a Class I director whose term expires at the
Annual Meeting in 2001.
Mr. Cobb has been Chairman of the Board since July 1995, Chief Executive
Officer of the Company since March 1994 and President and Chief Operating
Officer of the Company since October 1993. He served as President of
Gilbert/Commonwealth, Inc., then a subsidiary of the Company, from January
1991 to September 1993 and as President of GAI-Tronics, a subsidiary of the
Company, from June 1988 to December 1990. Mr. Cobb is a Class III director
whose term expires at the Annual Meeting in 2000.
Mr. Foster became Vice Chairman of ALLTEL Communications, Inc., which
provides telecommunications and information services, when it merged with
360 Degree Communications Company, formerly Sprint Corporation's cellular and
wireless division. Mr. Foster had been President and Chief Executive
Officer of 360 Degree Communications Company since January 1996. Mr. Foster
joined Sprint in 1992 as Senior Vice President of operations for its local
telecommunications division and became President and Chief Operating Officer
of its cellular and wireless division in March 1993. Prior to joining
Sprint, Mr. Foster held management positions in the areas of marketing,
regulatory and corporate strategic planning, as well as operational
assignments with AT&T and GTE. He serves on the board of ALLTEL
Corporation, NiSource Corporation, The National Board of Junior Achievement
and is a trustee of the University of Findlay in Ohio. Mr. Foster is a
Class I director whose term expires at the Annual Meeting in 2001.
<PAGE>
Mr. Hafer was appointed Vice President of the Company in September 1995
and Senior Vice President in February 1997. He has served as General
Counsel and Corporate Secretary of the Company since February 1994. Mr.
Hafer served as President of Green Hills Management Company, a division of
the Company, from September 1993 until July 1997. He served as Vice
President of Green Hills Management Company from February 1991 through
September 1993.
Mr. LaBlanc has served as President of Robert E. LaBlanc Associates,
Inc., an information technologies consulting and investment banking firm,
since 1981. Prior to that, he was Vice Chairman of Continental Telecom,
Inc., a major telecommunications services company now merged with GTE. Mr.
LaBlanc began his career in the former Bell System and served as
telecommunications analyst and general partner with Salomon Brothers, Inc.,
before joining Continental. Mr. LaBlanc is a Class III director whose term
expires at the Annual Meeting in 2000.
For five years prior to his retirement in 1987, Mr. Lyons served as
Chief Executive Officer and President of the Power Systems Group of
Combustion Engineering, Inc., a supplier of technology, equipment and
services to the power and process industries. Mr. Lyons served as Chairman
of the Board of CANISCO Resources, Inc. from 1996 to 1999. He also chaired
the Atomic Industrial Forum in Washington, D.C. and served on the Advisory
Board of the Institute of Nuclear Power Operations. Mr. Lyons is a Class I
director whose term expires at the Annual Meeting in 2001.
Mr. Snyder was appointed Vice President of the Company in September 1995
and Senior Vice President in February 1997. He has been Chief Financial
Officer of the Company since August 1995. He served as Vice President and
Chief Financial Officer of The Dreyfus Corporation from August 1994 until
joining the Company. For more than five years prior to joining Dreyfus, Mr.
Snyder served as Senior Vice President and Chief Financial Officer of Mellon
PSFS. Mr. Snyder is a Class II director whose term expires at the Annual
Meeting in 2002.
Mr. Strigl has served as President and Chief Executive Officer of Bell
Atlantic Mobile since 1991 and as Group President and Chief Executive
Officer of Bell Atlantic Global Wireless Group since 1997. He joined Bell
Atlantic Mobile in 1989, serving as Vice President-Product Management for
Network Services and later as Vice President-Operations and Chief Operating
Officer, and a member of the Board of Directors of New Jersey Bell. Mr.
Strigl is a director of General Magic Incorporated, Grupo Iusacell S.A. de
C.V., Anadigics, Inc. and the Cellular Telecommunications Industry
Association, serving as Chairman of the latter for 1996-1997. Mr. Strigl is
a Class III director whose term will expire at the Annual Meeting in 2000.
Mr. Wilson is currently a partner of Green, Wilson, & Associates,
management consultants, in Hartford, Connecticut. From 1994 until the end
of 1998, Mr. Wilson was a consultant with American Phoenix Corporation of
Connecticut , an insurance brokerage company. In 1994, he retired as
Executive Vice President of The Hartford Steam Boiler Inspection and
Insurance Company, which he had served in various capacities since 1962 and
which is engaged in insurance underwriting, investments and engineering. He
is also a director of Mechanics Savings Bank in Hartford, Connecticut and
Spencer Turbine Company in Windsor, Connecticut. Mr. Wilson is a Class II
director whose term expires at the Annual Meeting in 2002.
<PAGE>
Item 11. Executive Compensation and Other Information
Summary of Cash and Certain Other Compensation
The following table shows, for fiscal 1999, 1998 and 1997, the cash compensation
paid by the Company, as well as other compensation paid, accrued or awarded for
those years, to the Company's Chief Executive Officer and to each of the
remaining most highly compensated Executive Officers whose total annual salary
and bonus exceeded $100,000 in fiscal 1999 (collectively, the "Executive
Officers").
<TABLE>
Summary Compensation Table
Long-Term Compensation
Awards
-----------------------
Annual Restricted Securities
Name and Compensation Stock Underlying All Other
Principal Position Year ($)Salary ($)Bonus ($)Awards(1) Options (2) ($)Compensation
------------------ ---- --------- -------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
T. S. Cobb. . . . . . . 1999 390,000 0 0 0 28,723 (3)
President & Chief 1998 390,000 150,000 209,000 55,000 29,113
Executive Officer 1997 390,000 0 540,000 100,000 29,300
T. F. Hafer. . . . . . . 1999 215,000 0 0 0 23,723 (3)
Sr. Vice President, General 1998 205,000 60,000 83,600 18,700 24,113
Counsel & Secretary 1997 195,000 19,500 208,875 34,000 24,300
P. H. Snyder. . . . . . . 1999 220,000 0 0 0 23,723 (3)
Sr. Vice President & 1998 210,000 60,000 83,600 22,000 24,113
Chief Financial Officer 1997 200,000 20,000 208,875 40,000 24,300
</TABLE>
____________
(1) All restricted stock is Class B Common Stock and will vest and be
distributed at the end of ten years, at the end of the three year
period following the award if certain earnings per share goals are met
for that period, or upon a change in control at the discretion of the
Board. Any dividends on the stock will be held by the Company and
distributed when the stock vests. The aggregate value at the end of
fiscal 1999 of the 80,500 shares of restricted stock held by Mr. Cobb
was $563,500, $212,100 for the 30,300 shares held by Mr. Snyder and
$212,100 for the 30,300 shares held by Mr. Hafer.
(2) Options cannot be exercised for at least two years from the date of
grant. The exercise price is the fair market value of the stock on the
date of grant.
(3) Includes: (a) for Mr. Cobb, Mr. Snyder, and Mr. Hafer, Company
contributions of $11,200 to each of their accounts under the Company's
Retirement Savings Plan and $2,523 to each of their accounts in the
Company's Stock Purchase Program; (b) for Mr. Cobb, Mr. Snyder and Mr.
Hafer, taxable expense reimbursements of $15,000, $10,000 and $10,000,
respectively.
<PAGE>
Stock Options
No stock options were granted to Executive Officers during 1999.
Aggregate Option Exercises and Year-End Values
The following table shows stock options exercised by Executive Officers
during 1999, including the aggregate value of any gains on the date of
exercise. In addition, this table includes the number of shares covered by
both exercisable and non-exercisable stock options as of December 31, 1999.
Also reported are the values for "in-the-money" options which represent the
positive spread between the exercise price of outstanding stock options and
the year-end price of Company Class A Common Stock.
<TABLE>
Aggregate Stock Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
No. of Shares Covered by Value of Unexercised
Unexercised Options In-The-Money Options
at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
------------------------ -------------------------
Shares
Acquired Value Not Not
Name on Exercise Realized Exercisable Exercisable(2) Exercisable Exercisable(2)
---- ----------- -------- ----------- -------------- ----------- --------------
<S> <S> <C> <C> <S> <S>
T. S. Cobb ---- ---- 133,961 118,039 ---- ----
T. F. Hafer ---- ---- 43,000 35,700 ---- ----
P. H. Snyder ---- ---- 52,000 32,000 ---- ----
</TABLE>
- ------------
(1) Determined by deducting the exercise price from the December 31, 1999
market price of the Company's common stock.
(2) Future exercise is subject to continued employment by the Company for at
least two years from the date the options were granted, subject to
acceleration for retirement, death, total disability, or change of
control.
Compensation Committee Interlocks
There were no Executive Development Committee interlocks in 1999.
Employment Contracts and Termination of Employment Arrangements
Throughout fiscal 1999, the Company had no formal contracts of
employment with its Executive Officers. In 1989, the Board of Directors
adopted a Benefit Equalization Plan which provides supplemental retirement
income to several retired officers of the Company and its subsidiaries. In
1997, the Board added Messrs. Cobb, Snyder and Hafer to the Plan. Payments
under the Plan will be made to those three Executive Officers only to the
extent that income from Social Security, the Company-paid portions of
Company retirement plans, and the value of any restricted stock which has
vested by the passage of time do not equal 50% of an individual's average
annual salary for the three highest paid years. In the event of a change of
control, as defined in the Plan, any payments due will be accelerated, such
payments being essentially the present value of the stream of payments which
would have been made had there been no change of control. The Plan is
unfunded and terminates for an individual upon termination of employment for
any reason other than retirement, death or disability.
<PAGE>
Director Compensation
Each Board member, other than officers of the Company, receives an
annual retainer of $18,000; committee chairmen receive an additional $5,000.
Each such director also receives $1,000 for each committee or Board meeting
attended.
In 1996 the Board adopted, and the Shareholders approved, the Directors'
Stock Option Plan. Under the terms of that plan, each non-employee Board
member may elect to receive stock options in lieu of all or a specified
portion of his annual retainer to be earned during that year.
Item 12. Beneficial Ownership of Equity Securities by Certain Persons
As of February 29, 1999, the number and percentage of equity securities of
the Company beneficially owned by (i) each of the directors, (ii) each
Executive Officer named in the Summary Compensation Table, (iii) all Executive
Officers and directors of the Company as a group and (iv) all holders of more
than five percent (5%) of the Class B Common Stock are set forth in the
following table:
<TABLE>
Class B Percentage Class A Percentage
Individuals Common Stock of Class (1) Common Stock Of Class (1)
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
J. W. Boyer, Jr. . . . . 10,155 (2) 2.0 % 6,500 *
T. S. Cobb. . . . . . . 302,239 (2)(3)(4) 44.9 --- ---
D. E. Foster . . . . . . 4,836 * --- ---
T. F. Hafer . . . . . . . 97,670 (2)(3)(4) 17.5 --- ---
R. E. LaBlanc . . . . . . 22,701 (2) 4.5 --- ---
D. E. Lyons . . . . . . . 13,583 (2) 2.6 --- ---
P. H. Snyder . . . . . . 110,839 (2)(3)(4) 19.9 --- ---
D. F. Strigl . . . . . . . 3,732 * 200 *
D. K. Wilson, Jr. . . . . 16,130 (2) 3.1 --- ---
All Executive Officers, directors
as a group (nine persons) . . 581,885 (2)(3)(4) 71.6 6,700 *
Merrill Lynch & Company (5) 179,257 35.4 154,102 2.7
</TABLE>
(1) Asterisks indicate beneficial ownership of less than 1% of the
outstanding shares of the class.
(2) Includes options held by Messrs. Boyer, Cobb, Hafer, LaBlanc, Lyons,
Snyder, and Wilson to purchase 9,345, 166,508, 51,500, 3,945, 9,345,
52,000 and 13,545 shares, respectively, of Class B Common Stock
exercisable within 60 days.
(3) Includes shares purchased through February 29, 2000 on behalf of Mr.
Cobb, Mr. Snyder and Mr. Hafer under the Company's Stock Purchase
Program and shares for Mr. Hafer from contributions to the Payroll
Stock Ownership portion of the Retirement Savings Plan.
(4) Includes awards through February 29, 2000 of 80,500 shares of
restricted stock for Mr. Cobb and 30,300 shares of restricted stock
each for Mr. Snyder and Mr. Hafer.
<PAGE>
(5) Merrill Lynch & Company, 265 Davidson Avenue, Somerset, NJ 08873 holds
through controlled nominees shares of the Company's Class B and Class
A Common Stock as trustee on behalf of present and past employees
pursuant to various employee benefit plans of the Company.
Item 13. Certain Relationships and Related Transactions
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Salient 3 Communications, Inc.
By: /s/ Thomas F. Hafer
----------------------------
Name: Thomas F. Hafer
Title: Senior Vice President, General Counsel
and Secretary
Date: April 14, 2000
