SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/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, 1995.
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____ to _____.
Commission File Number 0-21662
DATAGUARD RECOVERY SERVICES, INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-1064606
(State or other jurisdiction of (I.R.S. Identification No.)
Employer incorporation or organization)
10301 Linn Station Road
P.O. Box 37144
Louisville, Kentucky 40233-7144
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (502)426-3434
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 _____.
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 aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 22, 1996: Common stock -- $1,475,440.
The number of shares of the registrant's common stock outstanding as of March
22, 1996 -- 5,029,770 shares.
REFERENCE
Portions of the Corporation's Definitive Proxy Statement are incorporated by
reference into Part III of this Form 10-KSB.
Dataguard Recovery Services, Inc. (the "Corporation") hereby amends its
annual report on Form 10-KSB for the year ended December 31, 1995 to add the
information required by Items 9 through 12 of Part III of Form 10-KSB.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
The following information is furnished as of March 22, 1996, with respect
to each of the Corporation's directors and executive officers. The Corporation's
four directors hold office for a one-year term expiring at the Corporation's
next annual meeting of shareholders or until their successors are elected and
qualified.
<TABLE>
<CAPTION>
Name Age Position with the Corporation
<S> <C> <C>
Richard W. Smith 42 President and Director
James P. Buren 57 Executive Vice President -
Technology and Director
John P. Snyder 57 Secretary and Director
John A. Brenzel 55 Director
</TABLE>
Richard W. Smith has been President and a director of the Corporation
since its inception in September 1984. Mr. Smith previously served as
General Manager of PDW Computer Systems, Inc., which markets computer
systems.
James P. Buren has been Executive Vice President-Technology and a
director of the Corporation since its inception in September 1984. From
1980 to 1984, Mr. Buren was President and sole shareholder of Buren &
Company, Inc., a data processing consulting firm.
John P. Snyder has been a director of the Corporation since November
1984 and Secretary since 1985. During the past five years, Mr. Snyder has
served as President and Chairman of EPI Corporation, which currently operates
20 nursing homes.
John A. Brenzel, a director of the Corporation since November 1984, is a
business consultant. From January 1991 until June 1994, Mr. Brenzel was
President and Chief Executive Officer of Commonwealth Bank & Trust Company,
Middletown, Kentucky. From 1984 to 1990, he was Chairman and Chief Executive
Officer of Shelby County Trust Bank, Shelbyville, Kentucky.
Richard W. Smith and James P. Buren are the Corporation's two executive
officers.
Section 16(a) of the Exchange Act requires the Corporation's executive
officers and directors and persons who beneficially own more than 10% of the
Corporation's Common Stock (collectively, "Reporting Persons") to file
reports of ownership and changes in ownership of the Common Stock with the
Securities and Exchange Commission. Reporting Persons are required by SEC
regulations to furnish the Corporation with copies of all Section 16(a) forms
that they file. Based solely on its review of the copies of such forms
received or written representations from certain Reporting Persons that no
Form 5s were required, the Corporation believes that during fiscal 1995, all
the Reporting Persons complied with all applicable filing requirements,
except that EPI Corporation, John P. Snyder, Max G. Baumgardner, J. Ben
Cress, Robert H. Loeffler, Grace W. Wilkins, James E. Buchart and Henry
Schumpf each filed a Form 4 report with respect to one transaction by EPI
Corporation in May 1995 after the Form 4 was due. Mr. Buchart's Form 4 also
covered a transaction by him which would not otherwise have been reportable
but for the transactions by EPI Corporation.
Item 10. Executive Compensation.
The following table sets forth the cash compensation earned by the
Corporation's two executive officers for each of the last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Name and Other Annual Compensation
Principal Position Year Salary Bonus Compensation Stock Options#
<S> <C> <C> <C> <C> <C>
Richard W. Smith, 1995 $103,500 $ 28,437 $6,000 50,000
President (Chief 1994 99,000 366 6,000 0
Executive Officer) 1993 99,000 0 6,000 0
James P. Buren, 1995 $ 93,000 $ 14,788 $6,000 35,000
Executive Vice- 1994 89,000 0 6,000 0
President 1993 89,000 6,335 6,000 0
</TABLE>
The Corporation currently does not have a retirement plan for its
officers and employees.
Stock Options
The following table sets forth as of December 31, 1995 the value of
unexercised options granted to the Corporation's chief executive officer and
executive vice-president pursuant to the Corporation's 1988 Stock Option Plan
(the "1988 Plan"). In 1995, no options were exercised by either officer
under the 1988 Plan. The average of the closing bid and asked price of the
Common Stock on December 31, 1995 was $.66 per share.
<TABLE>
<CAPTION>
Number of Shares Subject Value of
to Unexercised Options Unexercised
Name Exercisable Unexercisable In-the-Money Options
<S> <C> <C> <C>
Richard W. Smith 18,673 50,000 $ 788.54
James P. Buren 15,738 35,000 $ 539.50
</TABLE>
Director Compensation
Under the 1988 Plan, nonemployee directors first elected after May 15,
1989 are awarded options for 5,000 shares of Common Stock on the May 15th
following election to the Board by the Corporation's shareholders, and each
nonemployee director in office on May 15, 1989 or May 15th of any succeeding
year automatically receives an option for 1,000 shares of Common Stock. The
exercise price for options granted to nonemployee directors is the fair
market value of the Common Stock on the date of grant, and options for
approximately one-third of the shares become exercisable on May 15th of each
of the first three years following grant. Options granted to nonemployee
directors have a term of ten years.
In 1995, Mr. Brenzel and Mr. Snyder each received the annual grant of
options for 1,000 shares of Common Stock. The option exercise price was
$0.63 per share. No options were exercised in 1995.
Other than the issuance of stock options, the Corporation did not pay its
directors for attendance at regularly scheduled board meetings in 1995. The
Corporation has not determined its director compensation policy for 1996.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 22, 1996
with respect to the shares of Common Stock owned (i) by each person known to
the Corporation to own beneficially more than 5% of the outstanding shares of
Common Stock (ii) by each of the Corporation's directors and executive officers,
and (iii) by all directors and officers as a group. As of March 22, 1996,
there were 5,029,770 outstanding shares of Common Stock, which is the
Corporation's only class of voting shares.
<TABLE>
<CAPTION>
Directors and Number Percent
Executive Officers of Shares(1) of Class(2)
<S> <C> <C>
John P. Snyder
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,990,532(3) 38.2%
Richard W. Smith
10301 Linn Station Rd.
P. O. Box 37144
Louisville, KY 40233 174,750(4) 3.5%
James P. Buren
10301 Linn Station Rd.
P. O. Box 37144
Louisville, KY 40233 171,657(5) 3.4%
John A. Brenzel
3501 Graham Rd.
Louisville, KY 40207 142,538(6) 2.8%
All current directors
and officers as a
group (4 persons) 2,479,477 47.2%
5% Beneficial Owners
H. Joseph Schutte
1410 Hadleigh Place
Louisville, KY 40222 333,336(7) 6.5%
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,948,732(8) 37.6%
</TABLE>
<TABLE>
<CAPTION>
Number Percent
5% Beneficial Owners of Shares(1) of Class(2)
<S> <C> <C>
EPI Corporation,
John P. Snyder,
Max G. Baumgardner,
James E. Buchart,
J. Ben Cress,
Robert H. Loeffler,
Henry A. Schumpf,
Grace W. Wilkins
9707 Shelbyville Rd.
Louisville, KY 40223 2,291,432(8)(9) 43.6%
</TABLE>
(1) Based on information furnished to the Corporation by the named
person, and information contained in filings with the Securities and
Exchange Commission (the "Commission"). Under the rules of the
Commission, a person is deemed to beneficially own shares over which
the person has or shares voting or investment power or has the right
to acquire beneficial ownership within 60 days. Except as otherwise
noted, each person or entity named in the table has sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned.
(2) Shares of Common Stock subject to options or warrants that are or
will become exercisable within 60 days or are subject to issuance
upon the conversion of the Corporation's Series A Preferred Stock
("Series A Preferred") have been deemed outstanding for computing the
percentage of class of the listed person or the group, but are not
deemed outstanding for computing the percentage of class for any
other person.
(3) Includes 1,948,732 shares of Common Stock beneficially owned by EPI
Corporation. (See footnote 8.) Mr. Snyder is President, a director,
and largest single shareholder of EPI Corporation. Mr. Snyder shares
voting and investment power with respect to, and disclaims beneficial
ownership of, the shares owned by EPI Corporation, which are included
once in the shares beneficially owned by all directors and officers
as a group. Mr. Snyder's total also includes 5,000 shares subject to
currently exercisable stock options, 20,000 shares issuable upon the
conversion of 2,500 shares of Series A Preferred, and 5,000 shares
issuable upon the exercise of warrants.
(4) Includes 18,673 shares subject to currently exercisable stock options
and 1,000 shares owned individually by Mr. Smith's wife.
(5) Includes 15,738 shares subject to currently exercisable stock
options.
(6) Includes 5,000 shares subject to currently exercisable stock options.
(7) Includes 53,336 shares issuable upon the conversion of 6,667 shares
of Series A Preferred and 13,334 shares issuable upon the exercise of
warrants.
(8) Includes 120,000 shares issuable upon the conversion of 15,000 shares
of Series A Preferred and 30,000 shares issuable upon the exercise of
warrants.
(9) Includes 1,948,732 shares of Common Stock beneficially owned by EPI
Corporation, for which the named individuals, as directors of EPI
Corporation, share voting and investment power. The individual
members of this group together own the majority of shares of EPI
Corporation. Also includes 60,000 shares issuable upon the
conversion of 7,500 shares of Series A Preferred, 15,000 shares
issuable upon the exercise of warrants, 5,000 shares issuable upon
the exercise of options, 13,000 shares held as custodian or trustee
for children, and 6,000 shares held by spouses and children for which
beneficial ownership is disclaimed.
Item 12. Certain Relationships and Related Transactions.
In 1992, EPI Corporation, which beneficially owns 41.5% of the Common Stock
outstanding, loaned $300,000 to the Corporation to finance the Corporation's
purchase of certain equipment to be installed in its computer center. On
January 17, 1995, EPI provided an additional $500,000 in credit under the
loan to assist the Corporation in financing the purchase of certain assets of
Societe Twinsys, SA, a French disaster recovery company. The loan bears
interest at an annual rate of 1.5% above the "prime rate" as published in The
Wall Street Journal. The current interest rate is 9.75%. The term of the
loan is 90 days and has been renewed for additional 90-day terms through
April 10, 1996. In connection with the loan, the Corporation granted a
second mortgage on its property located on Linn Station Road to EPI
Corporation. The preexisting first mortgage is held by a commercial bank.
The Corporation also issued 30,000 shares of Common Stock to EPI Corporation
when the loan was originally made in 1992, and has issued 2,000 shares of
common stock per $100,000 outstanding principal balance of the loan upon each
renewal of the loan for an additional 90-day term. John P. Snyder, a director
of the Corporation, is President, a director and the largest shareholder
of EPI Corporation.
SIGNATURES
Pursuant to the requirements 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.
DATAGUARD RECOVERY SERVICES, INC.
Date: May 9, 1996
By /s/ Richard W. Smith
Richard W. Smith, President
