SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
(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, 1995
OR
( ) 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
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Commission File Number 0-14328
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ZING TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
New York 13-2650621
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(State or other jurisdiction or (I.R.S. Employer
organization) Identification No.)
115 Stevens Avenue, Valhalla, NY 10595
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (914) 747-7474
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
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:
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The aggregate market value of the voting stock held by non-affiliates of
the Registrant, computed by reference to the average of bid and asked price of
the stock as of October 2, 1995 was $25,282,573.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) 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 of this Form 10-K. [ ]
The number of shares of common stock, $.01 par value, outstanding as of
October 2, 1995 was 2,597,497.
DOCUMENTS INCORPORATED BY REFERENCE:
None
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The names and ages of all Directors of the Company and nominees therefor, their
positions with the Company, their term of office and their business background
are set forth below:
Director of
Name, Age, Principal Occupation, Other Directorships Zing Since
- ---------------------------------------------------- -----------
JOHN F. CATRAMBONE, 55, has been President and Chairman of the 1986
Board of Omnirel Corporation, a manufacturer of power hybrid
semiconductor devices since 1985. Omnirel has been a subsidiary
of the Company since June 1991.
MARTIN S. FAWER, 61, became Chief Financial Officer and Treasurer 1984
in February 1988. From October 1984 to January 1988 Mr. Fawer was
Treasurer of the Company. He is also a director and serves as the
Chief Financial Officer and Treasurer of Transition Analysis
Component Technology, Inc. and Omnirel, both subsidiaries of the
Company. For more than five years, Mr. Fawer has been a principal
of Fawer and Kupczyk, P.C. and its predecessors, certified public
accountants.
LAURENCE W. HIGGITT, 48, has been employed by Stephen Rose & Partners, 1985
Limited, investment bankers, in London, England since 1984 and has
been on its Board of Directors since 1985. Prior to 1984, he was a
fund manager for Lazard Brothers & Co. Ltd., merchant bankers, London,
England.
DEBORAH J. SCHRADER, 48, has been Secretary of the Company since its 1969
incorporation. She is also the Secretary and a director of Transition
Analysis Component Technology, Inc., a subsidiary of the Company. She
is the wife of Robert E. Schrader.
ROBERT E. SCHRADER, 51, is the founder of the Company and has been 1969
President and Chief Executive Officer since its incorporation in 1969.
Prior to organizing the Company, Mr. Schrader was an account executive
with a division of Lafayette Radio Corporation, a district sales
manager of Arrow Electronics, Inc. and held purchasing manager
positions with two electronic equipment manufacturers. He is also a
director and vice-president of Transition Analysis Component Technology,
Inc. and Omnirel Corporation, each a subsidiary of the Company. He is
the husband of Deborah J. Schrader.
HENRY A. SINGER**, 57, has been a member of the law firm of Morrison 1988
Cohen Singer & Weinstein, LLP and its predecessor for more than the
past five years. Morrison Cohen Singer & Weinstein, LLP serves as
general counsel to the Company.
_____________________
** See "Compensation Committee Interlocks and Insider Participation" for a
discussion of the legal fees received by Mr. Singer's firm since June 30, 1994.
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The Company's Board of Directors divides the Board into two classes, with
regular two-year staggered terms. Messrs. Singer, Catrambone and Higgitt will
be up for reelection at the next annual meeting of shareholders.
No director is a director of any company with a class of securities
registered pursuant to Section 12 of the Act or of any company registered as an
Investment Company under the Investment Company Act of 1940. Other than Robert
E. Schrader and Deborah J. Schrader, who are married to each other, there is no
family relationship among any of the members of the Board of Directors or the
officers of the Company.
In June 1990, the Securities and Exchange Commission filed a civil suit
against Henry A. Singer alleging that in August and November of 1987 he
purchased shares of common stock of a company listed on the New York Stock
Exchange based upon material non-public information. In July 1990, Mr. Singer
denied these allegations except that he admitted the fact of his purchase of the
shares of such company and the sale for a profit of approximately $34,000 in
April 1988. In November 1992, Mr. Singer and the Commission settled the civil
action, and, without admitting or denying the allegations in the complaint, Mr.
Singer consented to the entry of a final judgment of permanent injunction
against his violating securities laws in future trading of any securities. In
connection therewith, Mr. Singer paid $34,050, representing the profits from the
transaction described in the complaint, together with interest thereon, as well
as a civil money penalty in the same amount.
The Company maintains standing audit, executive and compensation committees
of the Board of Directors but does not maintain a nominating committee. Each
committee was created on July 31, 1985. The members of the audit committee are
John F. Catrambone, Laurence W. Higgitt, Henry A. Singer and Martin S. Fawer.
The audit committee, which met once during the fiscal year ended June 30, 1995
(the "1995 Fiscal Year") is responsible for assuring that management fulfills
its financial reporting responsibilities and will meet periodically with
representatives of management and with the Company's independent auditors. The
members of the compensation committee during the 1995 Fiscal Year were Laurence
W. Higgitt and Henry A. Singer. In September, 1995, Martin S. Fawer was
appointed to the compensation committee. The compensation committee, which met
once during the 1995 Fiscal Year, is responsible for reviewing levels and
methods of executive compensation and making recommendations to the Board. The
members of the executive committee are Robert E. Schrader, Deborah J. Schrader
and Martin S. Fawer. The executive committee, which met three times during the
1995 Fiscal Year, is responsible for acting as required when the full board is
unavailable for deliberation. The Company also maintains a stock option
committee, whose members during the 1995 Fiscal Year were Robert E. Schrader and
Henry A. Singer. The stock option committee did not meet during the 1995 Fiscal
Year. It has responsibility to designate optionees under the Company's 1982 In-
centive Stock Plan, the exercise price of the options, the date of grant and
period of the options, and other terms and conditions. None of the members of
the stock option committee is eligible to receive options while serving in such
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capacity. The Board of Directors met three times during the 1995 Fiscal Year.
All of the directors attended at least 75% of the Board's meetings, except for
Mr. Higgitt and Mrs. Schrader, each of whom attended two of the three meetings.
Executive Officers
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Position with Company and Business
Name Age Experience During Past Five Years
- ---- --- ----------------------------------
Robert E. Schrader*
Deborah J. Schrader*
Martin S. Fawer*
John F. Catrambone*
Malcolm Baca 54 Vice President and Treasurer of the Company's
TACTech subsidiary since 1987.
_____________________
* See "Directors" above.
Based upon an examination of Forms 3, 4 and 5 furnished to the registrant
in respect of the 1995 Fiscal Year, no persons have failed timely to file any of
the foregoing forms in respect of transactions in such year or in respect of a
prior year.
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ITEM 11. EXECUTIVE COMPENSATION.
Summary of Cash and Certain Other Compensation
The following table shows, for the three most recently ended fiscal years,
the cash compensation paid or accrued for those years to the Chief Executive
Officer of the Company and to each of the four most highly compensated executive
officers of the Company other than the Chief Executive Officer whose aggregate
annual salary and bonus paid in compensation for services rendered in all the
capacities in which they served exceeded $100,000 for the Company's last fiscal
year (the "Named Executives"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
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Annual Compensation Awards Payouts
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Securities
Name and Other Restricted Underlying All Other
Principal Annual Stock Options/ LTIP Compensation(2)
Position Year(1) Salary($) Bonus($) Compensation($) Awards($) SARs(#) Payouts($) ($)
- -------- ------- --------- -------- --------------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C>
Robert E. Schrader 1995 150,000 1,800
President, Chief Executive 1994 162,500 1,800
Officer and Chairman of the 1993 220,600 1,481
Board
John F. Catrambone(3) 1995 207,500 100,000 3,714
President of Omnirel 1994 207,504 50,000 3,054
Corporation 1993 163,625 2,043
Malcolm Baca 1995 168,788 1,044
Vice President and Treasurer 1994 161,479 1,044
of TACTech 1993 111,754 783
Martin S. Fawer 1995 75,000 389,996(4)
Chief Financial Officer and 1994 99,450
Treasurer 1993 75,126
<FN>
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(1) On May 19, 1993 the Company's Board of Directors voted to change the
Company's fiscal year end to June 30 from September 30. Information for the
1993 Fiscal Year is for the nine months ended June 30, 1993.
(2) The amounts reflect the following payments of annual life insurance
premiums in the 1994 Fiscal Year and the 1995 Fiscal Year: $1,481, $1,800 and
$1,800, respectively, on behalf of Mr. Robert E. Schrader; $2,043, $3,054 and
$3,714, respectively, on behalf of Mr. John Catrambone; and $783, $1,044 and
$1,044, respectively, on behalf of Mr. Malcolm Baca.
(3) The salary amounts for Mr. Catrambone in each of 1993, 1994 and 1995
include (i) $16,875, $22,500 and $22,500, respectively, representing interest
imputed at 9% per annum on the $250,000 interest free loan provided by the
Company to Mr. Catrambone for the purchase of the Company's common stock, and
(ii) a contractually required annual bonus of $60,000. See "Employment
Contracts and Termination of Employment and Change-of-Control Agreements" below.
(4) This reflects the value of the Zing stock acquired by Mr. Fawer upon his
exercise of his 41,857 Warrants, less the exercise price paid by Mr. Fawer.
</TABLE>
The above amounts do not include certain personal benefits, which do not
exceed, as to any executive officer identified above, 10% of his total Annual
Compensation.
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GRANTS OF WARRANTS
During the 1995 Fiscal Year no warrants, options or Stock Appreciation Rights
were granted to any Named Executive.
<TABLE>
AGGREGATED WARRANT EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END WARRANT VALUES
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Shares Option/SARs at Option/SARs at
Acquired FY-End (#) FY-End ($)
on Value --------------------------- ------------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable(1) Unexercisable
- ---- ----------- ----------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
John F. Catrambone 3,000 33,292
Martin S. Fawer 41,857 389,996
<FN>
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(1) Based on the fair market value per share of the Common Stock of
$12,4375, which was the closing bid price of the Common Stock as reported by the
National Association of Securities Dealers, Inc. on June 30, 1995.
</TABLE>
COMPENSATION OF DIRECTORS
The Company pays each director who is not an officer or employee of the
company (other than Henry A. Singer) $4,000 per year for his services as a
director plus $250 for each Board of Directors meeting attended and for each
Committee meeting attended if not held on the same day as a Board meeting. Mr.
Singer does not receive such fee, since the firm of which he is a partner is
paid its customary legal fees for Mr. Singer's attendance and participation.
See "Compensation Committee Interlocks and Insider Participation," below.
- ---
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
John Catrambone has an employment agreement with the Company's Omnirel
subsidiary. The five year agreement, expiring in June of 1996, provides for a
base salary of $125,000 per year, a guaranteed bonus of $60,000 per year and an
incentive bonus linked to a set of performance criteria determined annually by
Omnirel's Board of Directors and subject to percentage limitations of Mr.
Catrambone's base salary (80% for 1995). Mr. Catrambone was also loaned
$300,000 by the Company in connection with the purchase of Omnirel by the
Company, such loan was made to support Mr. Catrambone's annual guaranteed bonus.
The Company has guaranteed the base compensation payments under such employment
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agreement to Mr. Catrambone and pays the $60,000 annual bonus, which is used by
Mr. Catrambone to repay such loan. The Company also loaned Mr. Catrambone
$250,000, without interest, to purchase shares of the Company's common stock.
Such loan, which is due in June, 2001, is secured by the stock so purchased by
Mr. Catrambone. Through September 30, 1995, Mr. Catrambone sold 14,500 shares
of the Company's common stock and pursuant to his agreement with the Company, he
paid down his $250,000 loan by approximately $80,000. During the end of
calendar year 1994 and the beginning of calendar year 1995, the Company
negotiated with Mr. Catrambone and key employees of Omnirel with respect to
terminating Omnirel's existing Management Incentive Plan ("MIP") and revising
the ownership structure of Omnirel. In March, 1995, the MIP was cancelled and
the MIP participants received in exchange for their MIP interests (on a pro rata
basis to their participation in the MIP) options to purchase 61,818 shares of
Omnirel common stock exercisable at $8.00 per share. In addition Mr. Catrambone
exchanged 2,000 existing options exercisable at $6.50 per share and 18,872.4
shares of Omnirel common stock owned by him for 72,182 new ten year options for
Omnirel stock exercisable at $8.00 per share. These options were issued
pursuant to a new non-qualified stock option exchange plan. The purpose of
these transactions was to exchange for management's existing rights and
securities, securities of equal value to that which management and Mr.
Catrambone gave up while at the same time creating longer term incentives for
Omnirel management to grow its business. In March, 1995, 45,000 options to
purchase Omnirel stock exercisable at $10.00 per share were granted to new and
old members of Omnirel management to further incentivize management. Such
45,000 options were granted pursuant to a new non-qualified stock option plan.
Malcolm Baca has an employment agreement with the Company's TACTech
subsidiary. The term of Mr. Baca's employment is set to expire on May 1, 1997.
Mr. Baca's agreement entitled him to a salary of $120,000 per annum, plus five
percent (5%) of TACTech's collected revenues in each year, except that on
revenues attributable to another commissioned member of TACTech's management,
Mr. Baca's commission is two and one-half percent (2 1/2%). Effective as from
the middle of the fiscal year ended June 30, 1995, all commissions to Mr. Baca
are subject to his required contribution of one-half of one percent (1/2%) of
TACTech's collected revenues to a bonus pool fund for the benefit of non-
commissioned members of management, which contribution is matched by TACTech.
Mr. Baca does not participate in such bonus pool fund. In addition to other
customary terms, pursuant to the agreement, Mr. Baca's compensation is subject
to a $350,000 per annum maximum. The annual maximum is subject to increase
based upon the National Consumer Price Index. In the event Mr. Baca is
terminated without good cause, TACTech is obligated to continue to pay
compensation to Mr. Baca through April 30, 1997.
Mr. Schrader does not have an employment agreement with the Company and his
compensation is set by the Compensation Committee subject to the approval of the
Board of Directors. In connection with the 1993 sale of the Company's high
reliability electronic component distribution and value-added businesses to
Arrow Electronics, Inc., Mr. Robert E. Schrader entered into a Consulting and
Non-Competition Agreement with Arrow. As a consequence of such agreement, Mr.
Schrader does not devote his full time to the Company. Pursuant to the terms of
his agreement with Arrow, Mr. Schrader is required to devote up to five business
days per quarter to the business of Arrow.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the 1995 Fiscal Year were
Laurence W. Higgitt and Henry A. Singer. In September, 1995, Martin S. Fawer
was elected to the Compensation Committee. Henry A. Singer, a director of the
Company during the 1995 Fiscal Year, is a partner of Morrison Cohen Singer &
Weinstein, LLP, counsel to the Company. Such firm was paid $246,550 for legal
services rendered to the Company for the 1995 Fiscal Year of which $5,200 was
paid in respect of Mr. Singer's attendance at Board and Committee meetings.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Ownership of Certain Beneficial Owners
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The following table sets forth, as at November 1, 1995 information
concerning the beneficial ownership of voting securities of the Company by each
person who is known by management to own beneficially more than 5% of any class
of such securities:
Name and Address Amount Benefi- Percent of
Title of Class of Beneficial Owner cially Owned Class
- -------------- ------------------- -------------- ----------
Common Robert E. Schrader 1,152,711 44.4%
72 Haight Cross Road
Chappaqua, NY 10514
Common Jesse Greenfield 227,350 8.3%
3765 Wild Plum Ct.
Boulder, Co. 80434*
_______________
* Information with respect to the beneficial interest of the holder is
based on the most recent Schedule 13D or Schedule 13G delivered to
the Company by such holder and not on the basis of any independent
information with respect to such holdings which the Company may
possess.
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Security Ownership of Management
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The following table sets forth, as at November 1, 1995, information
concerning the beneficial ownership of voting securities of the Company by all
current directors individually, by the Chief Executive Officer and the executive
officers of the Company whose total annual salary and bonus exceeded $100,000 in
the 1994 Fiscal Year, and by all directors and officers as a group:
Amount of
Common Stock Percent
Beneficially Owned of Class
------------------ --------
John F. Catrambone 87,000 (1) 3.3%
Martin S. Fawer 89,736 3.5%
Laurence W. Higgitt 3,000 (1) *
Henry A. Singer 3,000 (1) *
Deborah J. Schrader 0 0%
Robert E. Schrader 1,152,711 44.4%
Malcolm Baca 0 0%
All Officers and Directors as a Group
(7 persons, including two such persons
who own no shares individually) 1,335,447 (2) 51.4%
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(*) Represents less than 1% of the shares outstanding.
(1) Includes 3,000 shares which may be acquired upon exercise of warrants.
Mr. Singer's warrants are held for the benefit of his firm, Morrison
Cohen Singer & Weinstein, LLP.
(2) Includes 9,000 shares which may be acquired upon exercise of warrants.
ITEM 13. CERTAIN TRANSACTIONS.
The Company paid Morrison Cohen Singer & Weinstein, LLP, of which
Henry A. Singer (a Director of the Company) is a partner, $246,550 for legal
services rendered to the Company in the 1995 Fiscal Year of which $5,200 was
paid in respect of Mr. Singer's attendance at Board and Committee Meetings.
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Signature
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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.
ZING TECHNOLOGIES, INC.
By: /s/ Martin S. Fawer
---------------------------------------
Name: Martin S. Fawer
Title: Treasurer and Chief Financial Officer
Dated: November 10, 1995
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