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SECURITIES AND UNITED STATES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
AMENDMENT TO ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 29, 1996 Commission file number 0-24170
SIGMA CIRCUITS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 77-0107167
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
393 Mathew Street, Santa Clara, California 95050
(Address of principal executive offices, including zip code)
(408) 727-9169
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001
Par Value
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 and 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 any amendment to this Form 10-K/A. x
The approximate aggregate market value of the Common Stock held by non-
affiliates of the Registrant, based upon the last sale price of the Common Stock
reported on the Nasdaq National Market was $16,664,575 as of September 13, 1996.
The number of shares outstanding of the Registrant's of common stock, $.001
par value, was 4,000,740 at September 13, 1996.
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Sigma Circuits, Inc.
INDEX
Page No.
Item 10. Directors and Executive Officers of the Registrant 1
Item 11. Executive Compensation 3
Item 12. Security Ownership of Certain Beneficial Owners and Management 5
Item 13. Certain Relationships and Related Transactions 6
SIGNATURES 7
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Part III of Sigma Circuits, Inc.'s Form 10-K Report for the fiscal year ended
June 29, 1996, is hereby amended to read in full as follows:
ITEM 10 - Directors and Executive Officers of the Registrant
(a.) Directors. Set forth below is information regarding directors and
executive officers of the Company.
<TABLE>
<S> <C> <C>
Name Age Position
B. Kevin Kelly 42 President, Chief Executive
Officer and Director
Philip S. Bushnell 45 Senior Vice President, Finance
and Administration, Chief
Financial Officer, Secretary
and Director
Robert P. Cummins(1)(2) 42 Chairman of the Board
Thomas J. Bernard(1)(2) 64 Director
William W. Boyle 61 Director
</TABLE>
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Mr. Kelly has served as President and Chief Executive Officer and a
Director since October 1992. Prior to joining Sigma, Mr. Kelly held the
position of Vice President of Operations at Lundahl Astro Circuits Inc., a high
volume manufacturer of printed circuit boards from December 1991 to October
1992. Prior to that time, from December 1990 to December 1991, Mr. Kelly was a
founder and President of Vitesse Engineering, a supplier of electrical test
fixtures for the printed circuit board industry. From March 1988 to December
1990, Mr. Kelly was Vice President of Sales and Operations at West Coast
Circuits, Inc., a quick-turn manufacturer of printed circuit boards.
Mr. Bushnell has served as Senior Vice President, Finance and
Administration since January 1994. From August 1992 until January 1994, Mr.
Bushnell served as Vice President, Finance. He was elected Secretary and Chief
Financial Officer in October 1992 and has been a Director since June 1993. From
July 1987 to August 1992, Mr. Bushnell was employed in various finance positions
with the Company. Prior to joining Sigma, Mr. Bushnell held various finance
positions at Varian Associates, a diversified electronics company from 1978
until 1986.
Mr. Cummins has been a Director since April 1986 and Chairman of the Board
since August 1992. Mr. Cummins is currently the President, Chief Executive
Officer and a Director of Cyberonics, Inc., a medical device company. He was a
general partner of Vista Partners, L.P., a venture capital partnership which he
joined in 1984 until it entered dissolution under Delaware law in December 1994.
Vista Partners L.P. was the general partner of Vista II, L.P., a principal
stockholder of the Company. Mr. Cummins was also Vice President and a director
of Vista Ventures, Inc., a venture capital advisory firm.
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Mr. Bernard has been a Director since April 1995. Mr. Bernard is currently
the President of Wireless Infrastructure Products with QUALCOMM Inc., a digital
wireless communications company. From 1986 until his retirement in May 1994,
Mr. Bernard served with QUALCOMM Inc. as Senior Vice President and General
Manager of OmniTRACS. Prior to that he served as Executive Vice President and
General Manager of the M/A-COM Telecommunication Division of M/A-COM LINKABIT, a
manufacturer of telecommunications interconnects. Mr. Bernard also serves as a
director of a privately held company.
Mr. Boyle has been a Director since May 1996. Mr. Boyle has been the Vice
President of Finance and Chief Financial Officer of Cubic Corporation, a
aerospace and defense contractor, since 1983. Prior to that he served as
Assistant Treasurer of Occidental Petroleum, a petroleum company.
(b.) Executive Officers. The information with respect to the executive
officers required under this item is incorporated herein by reference to Part I,
Item 4 of this report.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Offices, directors and greater than
ten percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 29, 1996, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with.
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ITEM 11 - Executive Compensation
Compensation of Directors
In accordance with Company policy, all members of the Board of Directors
are eligible for reimbursement for their expenses incurred in connection with
attendance at Board meetings. In addition, each non-employee director of the
Company received annual compensation of $5,000 for their service as Board
members during fiscal 1996.
On December 31, 1995, Mr. Cummins and Mr. Bernard, the only non-employee
directors incumbent at the time, were each automatically granted an option to
purchase 3,000 shares of the Company's Common Stock in accordance with the
Company's 1994 Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"). On April 24, 1996, the date Mr. Boyle was first elected to the Board of
Directors, Mr. Boyle was automatically granted an option to purchase 10,000
shares of the Company's Common Stock pursuant to the Directors' Plan.
Compensation of Executive Officers
The following table shows for the fiscal years ending June 30, 1996, 1995
and 1994, compensation awarded or paid to, or earned by the Company's Chief
Executive Officer and its two other most highly compensated executive officers
whose salary and bonus compensation exceeded $100,000 (the "Named Executive
Officers"):
<TABLE>
Summary Compensation Table
<S> <C> <C> <C> <C> <C>
Long Term
Compensation
Annual Compensation Awards
All Other Annual Securities
Name and Principal Bonus Compensation Underlying
Position Year Salary($) ($)(1) ($)(2) Options(3)
B. Kevin Kelly 1996 $199,039 $75,872 $9,150 80,000
President, 1995 $175,006 $15,500 $8,766 53,526
Chief Executive 1994 $175,006 $50,000 $8,838 124,938
Officer and
Director
Philip S. Bushnell 1996 $143,500 $57,110 $9,150 60,000
Senior Vice 1995 $125,000 $ 7,750 $8,838 41,268
President 1994 $116,918 $25,000 $8,838 51,342
Finance and
Administration
Chief Financial
Officer, Secretary
and Director
John M. Rottenburg 1996 $193,172 $36,214 $9,150 30,000
Former Vice 1995 $ 40,385 $ -- $1,800 70,000
President, 1994 $ -- $ -- $ -- --
Operations
</TABLE>
(1) Bonuses awarded to Messrs. Kelly and Bushnell in fiscal 1994 were in
connection with the successful completion of the Company's initial public
offering. The amounts were paid over the first half of fiscal 1995. Bonuses
awarded to Messrs. Kelly and Bushnell in fiscal 1995 were paid in the first
quarter of fiscal 1996.
(2) Consists of automobile allowance and premiums for health insurance
benefits.
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(3) These options become exercisable in 54 equal monthly installments beginning
with the seventh month from the date of grant.
Douglas B. Crerar joined the Company in January 1996 and would have earned
in excess of $100,000 for the fiscal year ended June 30, 1996 had he worked for
the Company for the entire fiscal year.
Stock Option Grants And Exercises
The Company has granted options to its executive officers under its 1988
Stock Option Plan (the "Plan"), adopted in May 1988 and amended in October 1993,
March 1994, June 1995 and September 1995.
At June 29, 1996, options (net of canceled or expired options) covering an
aggregate of 1,082,563 shares of the Company's Common Stock had been granted
under the Option Plan, and only 139,469 shares (plus any shares that might in
the future be returned to the Option Plan as a result of cancellations or
expiration of options) remained available for future grant under the Option
Plan. The Board of Directors voted in September 1995 to amend the Option Plan,
subject to stockholder approval, to increase the number of shares of Common
Stock authorized for issuance under the Option Plan by 200,000, bringing the
total shares authorized for issuance under the Option Plan to 1,300,000.
Option Grants in Last Fiscal Year
The following table sets forth each grant of stock options made during the
fiscal year ended June 29, 1996 to each of the Named Executive Officers:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
for Option Term
Individual Grants ($)(3)
Number of Percentage of
Securities Total Options Exercise Market
Underlying Granted in Price Price
Options Fiscal ($/ ($/ Expiration 0% 5% 10%
Name(1) Granted(1) 1995(2) Share) Share) Date
B. Kevin 80,000 13.1% $6.25 $6.25 11/1/2005 $314,447 $796,871
Kelly
Philip S.
Bushnell 60,000 9.9% $6.25 $6.25 11/1/2005 $235,835 $597,653
John M.
Rottenburg 30,000 4.9% $6.25 $6.25 11/1/2005 $117,918 $298,827
</TABLE>
(1) These options become exercisable in 54 equal monthly installments beginning
with the seventh month from the date of grant.
(2) Based on a total of 608,150 options granted during the fiscal year ended
June 29, 1996.
(3) The potential realizable value is based on the term of the option at the
time of grant (ten years). Assumed stock price appreciation of five percent and
ten percent used pursuant to rules promulgated by the Commission. The potential
realizable value is calculated by assuming that the market price per share
appreciates at the indicated rate for the entire term of the option and that the
option is exercised at the exercise price and sold on the last day of its term
at the appreciated price.
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Aggregated Options Exercises in Last Fiscal Year and June 29, 1996 Option Values
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
June 29, 1996(#) June 29, 1996($)(2)
Shares Value
Acquired on Realized
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
B. Kevin
Kelly -- $ -- 90,675 189,138 $589,388 $1,229,397
Philip S.
Bushnell 17,266 $108,565 10,279 117,263 $ 66,814 $ 762,210
John M.
Rottenburg 10,375 $ 57,736 -- -- $ -- $ --
</TABLE>
(1) Based on the fair market value of the Company's Common Stock on the dates
of exercise minus the exercise price.
(2) Based on the closing price of the Company's Common Stock on June 28, 1996
($6.50 per share) minus the exercise price.
ITEM 12 - Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of September 30, 1996 by: (i) each director;
(ii) each of the executive officers named in the Summary Compensation Table;
(iii) all directors and executive officers of the Company as a group; and (iv)
all those known by the Company to be beneficial owners of more than five percent
of its Common Stock.
<TABLE>
<S> <C> <C>
Beneficial Ownership
Principal Stockholders,
Directors and Executive Officers(1) Number Percent
Citation Circuits, Inc.
1950 West Fremont Street
Stockton, CA 95203 378,786 9.5%
Fortuna Investment Partners, Ltd.(2)
100 Wilshire Blvd., 15th Floor
Santa Monica, CA 90401 219,800 5.5%
B. Kevin Kelly(3) 124,910 3.0%
Philips S. Bushnell(4) 66,512 1.7%
Douglas B. Crerar(5) 7,000 0.1%
Robert P. Cummins(6) 42,750 1.1%
Thomas J. Bernard(7) 17,750 0.4%
William H. Boyle(8) 5,833 0.1%
All directors and executive officers
as a group (6 Persons)(9) 264,755 6.3%
</TABLE>
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(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the footnotes to this
table and subject to the community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares shown as beneficially owned by him. Percentage of
beneficial ownership is based on 4,004,497 shares of Common Stock outstanding as
of September 30, 1996, adjusted as required by rules promulgated by the SEC.
(2) Based solely on information obtained from filings made on Schedule 13D with
the Securities and Exchange Commission.
(3) Includes 116,596 shares issuable upon exercise of options exercisable
within 60 days of September 30, 1996.
(4) Includes 24,999 shares issuable upon exercise of options exercisable within
60 days of September 30, 1996.
(5) Represents shares issuable upon exercise of options exercisable within 60
days of September 30, 1996.
(6) Includes 12,750 shares issuable upon exercise of options exercisable within
60 days of September 30, 1996.
(7) Includes 12,750 shares issuable upon exercise of options exercisable within
60 days of September 30, 1996.
(8) Includes 179,928 shares issuable upon exercise of options exercisable
within 60 days of September 30, 1996. See Notes (3) through (7) above.
ITEM 13 - Certain Relationships and Related Transactions
The Company's Bylaws provide that the Company shall indemnify its directors
and may indemnify its officers, employees and other agents to the fullest extent
not prohibited by Delaware law. The Company is also empowered under its Bylaws
to enter into indemnification contracts with its directors and officers and to
purchase insurance on behalf of any person it is required or permitted to
indemnify. Pursuant to this provision, the Company has entered into indemnity
agreements with each of its directors and executive officers.
In addition, the Company's Certificate of Incorporation provides that, to
the fullest extent permitted by Delaware law, the Company's directors will not
be liable for monetary damages for breach of the directors' fiduciary duty of
care to the Company or its stockholders. This provision in the Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of non-
monetary relief would remain available under Delaware law. Each director will
continue to be subject to liability for breach of the director's duty of loyalty
to the Company or its stockholders, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal benefit and for
improper distributions to stockholders. This provision also does not affect a
director's responsibilities under any other laws, such as the federal securities
laws or state or federal environmental laws.
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On July 1, 1995, the Company entered into a consulting agreement with Mr.
Cummins which provides for a monthly payment of $2,500 to Mr. Cummins in
exchange for certain consulting services. The agreement had a term of one year.
On September 30, 1995, the Company acquired substantially all of the assets
and assumed certain liabilities of Citation Circuits, Inc., Citation
Enterprises, Inc. and Citron Inc. (collectively, Citation Companies"), all of
which were owned by Mr. Brockl and were engaged in the manufacture and sale of
PCBs and backplane assemblies. The purchase price of $16,544,000 was paid in
cash of $9,952,000 (financed through bank term loans, see Note 6 of Notes to
Financial Statements), 378,786 shares of Common Stock with a fair market value
of $2,500,000 and two 12% subordinated notes due in June 1997 totaling
$4,092,000, of which $1,500,000 is convertible to 200,000 shares of Common
Stock. In the event of a public offering of Common Stock meeting certain
defined criteria, the $1,500,000 note is due upon the closing the of the
offering, and the $2,592,000 note is due December 1996.
In connection with the Citation Acquisition, Mr. Brockl became an employee
of the Company. Mr. Brockl is no longer an employee of the Company. Mr.
Brockl's annual salary was $150,000 as an employee of Sigma and he received an
option to purchase 60,000 shares of Common Stock at an exercise price of $6.875
per share. Upon termination of Mr. Brockl's employment, he was granted
severance pay equal to three months salary. Mr. Brockl also entered into a
noncompetition agreement with the Company pursuant to which Mr. Brockl has
agreed not to complete with the Company for a period of two years from the date
of his termination as either an employee of, or consultant to, the Company.
In October 1995, the Company entered into change-in-control severance
agreements (the "Severance Agreement") with Mr. Kelly and Mr. Bushnell.
Pursuant to the Severance Agreements, if employment of Mr. Kelly or Mr. Bushnell
is either involuntarily terminated by the Company without cause, or voluntarily
terminated by resignation of Mr. Kelly or Mr. Bushnell for good reason within 12
months following a change-in-control, then the terminated executive will be
entitled to severance compensation and benefits, including a lump sum payment of
18 months of base salary for Mr. Kelly and 12 months of base salary for Mr.
Bushnell (an aggregate amount equal to $300,000 for Mr. Kelly and $150,000 for
Mr. Bushnell, subject to salary adjustments), payment of health benefit premiums
for 18 months for Mr. Kelly and 12 months for Mr. Bushnell, a severance bonus
(equal to the bonus that would have been payable had the executive worked the
entire year, pro rated by the number of days worked), and acceleration of
vesting of all outstanding stock options. As set forth in more detail in the
Severance Agreements: a "change-in-control" transaction is defined as any
capital transaction or reorganization in which ownership of more than 50% of the
Company's voting shares changes; "cause" is defined as conviction of a crime or
participation in fraud against the Company or gross unfitness to serve as
determined by the Board of Directors. "Good reason" is a reduction in
compensation, benefits or responsibilities.
The Company believes that the foregoing transactions were in its best
interests. As a matter of policy these transactions were, and all future
transactions between the Company and any of its officers, directors or principal
stockholders will be, approved by a majority of the disinterested members of the
Board of Directors, will be on terms no less favorable to the Company than could
be obtained from unaffiliated third parties and will be in connection with bona
fide business purposes of the Company.
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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 on the 27th day of
October 1995.
SIGMA CIRCUITS, INC.
By: /s/ Philip S. Bushnell
Philip S. Bushnell
Senior Vice President, Finance
and Administration and Chief
Financial Officer
(duly authorized representative)
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