SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 3 to Form 10-K)
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 30, 1995
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
_____ to _____.
0-17541
(Commission File No.)
PRESSTEK, INC.
(Exact name of registrant as specified in its charter)
Delaware 02-0415170
(State or other juris- (I.R.S. Employer
diction of incorporation or Identification No.)
organization)
8 Commercial Street, Hudson, New Hampshire 03051
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (603) 595-7000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 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 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|
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The aggregate market value of the registrant's Common Stock held by
non-affiliates as of March 12, 1996 was approximately $1,279,000,000.
As of March 12, 1996 there were 15,074,246 shares of the registrant's Common
Stock outstanding.
Documents Incorporated by Reference: None
<PAGE>
PART I
Item 3. Legal Proceedings.
In April 1995 the Company commenced an action against Agfa-Gevaert, N.V.
("Agfa") in the U.S. District Court for the District of New Hampshire alleging
that Agfa violated provisions of a confidentiality agreement and a manufacturing
agreement (the "Manufacturing Agreement") between the parties and
misappropriated certain trade secrets of the Company. In June 1995, Agfa
commenced an arbitration proceeding against the Company in the International
Chamber of Commerce in which it sought arbitration of the disputes between the
parties arising from the Manufacturing Agreement and also sought to have the
trade secret issues determined in arbitration. In its request for arbitration
Agfa, among other things, charged the Company with breaches of the Manufacturing
Agreement, good faith and fair dealing, and sought damages in an amount alleged
to be $2,000,000.
On October 15, 1996, the Company was notified that an arbitration panel of
the International Chamber of Commerce issued its Award in the arbitration
between the Company and Agfa. The Award directs Agfa to transfer to the Company
Agfa's U.S. Patent No. 5,378,580 including its underlying applications, return
to the Company all copies of confidential information that the Company provided
to Agfa, and pay the Company's legal expenses in the arbitration in the amount
of $769,140. Agfa has complied with the financial terms of the Award and has
assigned to the Company the foregoing patent and underlying applications. Agfa
has agreed to return to the Company the confidential material as required by the
Award. The arbitrators rejected the request for affirmative relief sought by
Agfa.
The Company has been advised that the Securities and Exchange Commission
(the "Commission") has entered a formal order of private investigation with
respect to certain activities by certain unnamed persons and entities in
connection with the securities of the Company. In that connection, the Company
has received subpoenas duces tecum requesting it to produce certain documents
and certain of its officers, directors and employees have recceived subpoenas
requesting them to give testimony before the staff of the Commission and the
Company and said officers, directors and employees have complied with the
requests. The Company has not been advised by the Staff of the Commission that
the Staff intends to recommend to the Commission that it initiate a proceeding
against the Company in connection with the foregoing investigation.
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On June 28, 1996 Tonia Alfonso and Dick Ruestman filed a class action
lawsuit in the United States District Court, District of New Hampshire, against
the Company, Robert Howard and Lawrence Howard, who are both directors of the
Company, Richard Williams and Robert Verrando, who are both officers and
directors of the Company, Cabot Heritage Corp.,("Heritage"), Cabot Market Letter
("Market"), Carlton Lutts, Timothy Lutts and Robert Lutts (Carlton Lutts,
Timothy Lutts and Robert Lutts are sometimes hereinafter collectively referred
to as the "Lutts Defendants") and Cabot Money Management ("CabotMM"). The
plaintiffs allege that the defendants engaged in a plan and scheme and unlawful
courses of conduct to artificially inflate, maintain and otherwise manipulate
the value of the Company's common stock in order to cause individual defendants
to profit from their sales of the Company's common stock and to induce
plaintiffs' and other members of the purported class to purchase securities of
the Company at artificially inflated prices. The plaintiffs also allege that (i)
all defendants except CabotMM violated Section 10(b) ("Sect. 10(b)") of the
Securities Exchange Act of 1934, (the "Exchange Act") and Rule 10b-5 ("Rule
10b-5") promulgated thereunder, (ii) that all individual defendants and Heritage
violated Section 20(a) ("Sect. 20(a)") of the Exchange Act and (iii) that all
defendants except CabotMM committed common law fraud and deceit. The basis for
the action against the Company and its officers and directors include, among
other things, the Company's alleged issuance of false and misleading reports or
failure to disclose material facts including a misstatement of earnings in the
Company's financial statements for the quarter ended March 30, 1996, the failure
to disclose to the public certain alleged adverse information concerning the
Company's patents and its proprietary technology including that certain United
States patents previously issued to the Company were the subject of a
reexamination or reissuance procedure by the U.S. Patent Office and that the
Company was facing formidable competition as a result of technological advances
made by other companies and the failure to disclose that the investigation into
trading in the securities of the Company being conducted by the Securities and
Exchange Commission (the "SEC Investigation") included the service of a subpoena
upon the Lutts Defendants. The plaintiffs also allege that the Company conspired
with the Lutts Defendants to have false reports issued about the Company in
order to drive up the market price of the Company's common stock. The plaintiffs
seek unspecified compensatory damages, attorney and accountant fees and other
costs and expenses incurred by the plaintiffs in connection with the action and
the imposition of a constructive trust on, and disgorgement of, profits made by
defendants who were allegedly unjustly enriched as a result of the purported
artificial inflation of the Company's common stock.
On June 28, 1996 Bill Berke ("Berke") filed a class action lawsuit in the
United States District Court, District of New Hampshire, against the Company,
Richard Williams, Glenn DiBenedetto, the Company's Chief Financial Officer,
Lawrence
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Howard, Robert Howard, Robert Verrando, Bert DePamphilis (a director of the
Company), Harold Sparks (a director of the Company) and BDO Seidman LLP, the
Company's independent auditors. The plaintiff alleges that the defendants
violated Sect. 10(b) and Rule 10b-5 by issuing financial statements for the
fiscal year ended December 30, 1995 and the fiscal quarter ended March 30, 1996
and corresponding financial press releases that overstated net income in the
Statements of Operations for those periods as a result of the improper
application of certain accounting principles relating to the tax benefits
received upon exercise of certain stock options previously granted by the
Company. The plaintiff seeks unspecified damages and reimbursement of the
plaintiff's costs and expenses incurred in connection with the action.
On July 9, 1996 Sidney Gellman and Robert Ehrenreich filed a class action
lawsuit in the United States District Court, District of New Hampshire, against
the Company and Robert Verrando, Richard Williams, Robert Howard, Lawrence
Howard, Glenn DiBenedetto, Bert DePamphilis, Frank Pensavecchia, the Company's
Senior V.P.-Engineering, Harold Sparks and John Dreyer (a director of the
Company), the Lutts Defendants, Heritage and CabotMM. The plaintiffs' allege
that the Company and the individual officers and directors named as defendants
violated Sect. 10(b) and Rule 10b-5, that the individual officer and director
defendants and CabotMM violated Sect. 20(a) and committed acts of common law
negligent misrepresentation and fraud by causing an artificial inflation in the
price of the Company's common stock and helping maintain such increase at a time
when certain of the Company's officers and directors were selling such stock by,
among other things, failing to adequately disclose certain alleged adverse
information concerning certain Company patents and its proprietary technology,
failing to timely disclose claims made against the Company by Agfa-Gevaert, N.V.
in an arbitration proceeding, failing to disclose stock sales by certain of the
defendants at alleged artificially increased prices while they were in
possession of material non-public information concerning the Company, issuing a
misleading financial statement that overstated earnings for the quarter ended
March 30, 1996 and failing to adequately disclose the scope of the SEC
Investigation. The plaintiffs also allege that the Lutts Defendants, Heritage
and CabotMM violated Sect. 10b and Rule 10b-5. The plaintiffs' seek unspecified
compensatory damages and reimbursement for costs and expenses incurred in
connection with the action.
On July 10, 1996 Joseph C. Barton filed a class action lawsuit in the
United States District Court, Southern District of New York against the Company,
Robert Howard, Lawrence Howard, Richard Williams, Robert Verrando, Glenn
DiBenedetto, Frank Pensavecchia, Harold Sparks, Bert DePamphilis, Market,
CabotMM, Heritage and Carlton Lutts. The plaintiff alleges that the defendants
violated Sect. 10(b) and Rule 10b-5 and Sect. 20(a) by
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issuing false and misleading information concerning the Company's financial
results for its quarter ended March 30, 1996, and by failing to disclose that
the SEC had broadened the scope of the SEC Investigation and that adverse
competitive factors undermined the Company's PEARL(R) technology. The plaintiff
also claims that certain of the defendants sold shares of the Company's common
stock at artificially high prices while in possession of material non-public
information regarding the Company. The plaintiff is seeking to recover
unspecified compensatory damages together with interest, costs of the action and
such other extraordinary, equitable and/or injunctive relief as permitted by law
or equity.
On July 12, 1996 F. Brock Walter ("Walter") filed a class action lawsuit in
the United States District Court, District of New Hampshire, against the same
defendants as the lawsuit filed by Berke on June 28, 1996. The Walter suit
contains the same allegations against the defendants as those contained in the
Berke action. Walter seeks to recover unspecified damages against the defendants
and the costs and expenses of the action.
On July 16, 1996 Richard Strauss commenced a derivative suit on behalf of
the Company in the Court of Chancery of the State of Delaware, New Castle
County, against Robert Howard, Lawrence Howard, Richard Williams, Robert
Verrando, Bert DePamphilis and Harold Sparks. The plaintiff alleges that the
defendants breached the fiduciary duties they each owed to the Company and its
other shareholders and wasted corporate assets by making false and misleading
statements of fact or concealing material facts concerning the viability of the
Company's "key" patent and its proprietary interest in its PEARL(R) technology,
its failure to properly disclose the scope of the SEC Investigation, and its
misstatement of its financial results for the first quarter of 1996, and that
they used this information for their personal use by selling common stock of the
Company at artificially inflated prices. The plaintiff also alleges that these
actions by the defendants resulted in breaches of Sect. 10(b) and Rule 10b-5
which resulted in other lawsuits being commenced against the Company which will
require the Company to expend resources to defend. The plaintiff seeks to
recover against the defendants, on behalf of the Company, unspecified damages
allegedly sustained by the Company as a result of the defendants' alleged
breaches of fiduciary duty, a return to the Company of all salaries and the
value of other remuneration paid to the defendants by the Company during the
time they were in breach of their fiduciary duties, an accounting of and/or
constructive trust on the proceeds of defendants' trading activities in the
Company's common stock and recovery of costs and disbursements of the action.
On July 31, 1996, a class action lawsuit was filed by Multi-Measurements
Inc., Multi-Measurements Inc. Pension Plan, John LaReddola, Trustee, and Albert
Schlessinger, Attorney in
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<PAGE>
Fact for Andrew Schlessinger, in the United States District Court, District of
New Hampshire, against the Company, Robert Howard and Lawrence Howard, Richard
Williams and Robert Verrando, Heritage, Market, the Lutts Defendants and
CabotMM. The plaintiffs allege that the defendants engaged in a plan and scheme
and unlawful courses of conduct to artificially inflate, maintain and otherwise
manipulate the value of the Company's common stock in order to cause individual
defendants to profit from their sales of the Company's common stock and to
induce plaintiffs' and other members of the purported class to purchase
securities of the Company at artificially inflated prices. The plaintiffs also
allege that (i) all defendants except CabotMM violated Sect. 10(b) and Rule
10b-5, (ii) that all individual defendants and Heritage violated Sect. 20(a),
and (iii) that all defendants except CabotMM committed common law fraud and
deceit. The basis for the action against the Company and its officers and
directors include, among other things, the Company's alleged issuance of false
and misleading reports or failure to disclose material facts including a
misstatement of earnings in the Company's financial statements for the quarter
ended March 30, 1996, the failure to disclose to the public certain alleged
adverse information concerning the Company's patents and its proprietary
technology including that certain United States patents previously issued to the
Company were, at the request of the Company, the subject of a reexamination or
reissuance procedure in the U.S. Patent Office and that the Company was facing
substantial competition as a result of technological advances currently being
made by other companies, and the failure to disclose that the SEC Investigation
included the service of a subpoena upon the Lutts Defendants. The plaintiffs
also allege that the Lutts Defendants promoted the Company's common stock in
order to drive up the market price, without disclosing the fact that certain of
the Lutts Defendants had substantial holdings of the Company's common stock. The
plaintiffs also claim that certain of the defendants sold shares of the
Company's common stock at artificially high prices while in possession of
material non-public information regarding the Company, and that defendants acted
to curtail short-selling in the Company's common stock. The plaintiffs seek
unspecified compensatory damages, attorney and accountant fees and other costs
and expenses incurred by the plaintiffs in connection with the action and the
imposition of a constructive trust on, and disgorgement of, profits made by all
defendants except CabotMM who were allegedly unjustly enriched as a result of
the purported artificial inflation of the Company's common stock.
On September 9, 1996, a class action lawsuit was filed by Neil Fradin in
the United States District Court, District of New Hampshire, against the
Company, Richard Williams, Glenn DiBenedetto, Bert DePamphilis, Lawrence Howard,
Robert Howard, Harold Sparks, Robert Verrando and BDO Seidman, LLP. The
plaintiff alleges that the defendants violated Sect. 10(b) and Rule 10b-5 and
that the individual defendants violated Sect.
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20(a) of the Exchange Act by issuing financial statements for the fiscal year
ended December 30, 1995 and the fiscal quarter ended March 30, 1996 and
corresponding financial press releases that overstated net income in the
Statements of Operations for those periods as a result of the improper
application of certain accounting principles relating to the tax benefits
received upon exercise of certain stock options previously granted by the
Company. The plaintiff seeks unspecified damages and reimbursement of the
plaintiff's costs and expenses incurred in connection with the action.
The Company believes that the allegations against it and its officers and
directors alleged in the foregoing eight actions are without merit and the
Company intends to vigorously defend all such actions. However, the outcome of
any litigation is subject to uncertainty and a successful claim against the
Company, in any of the foregoing actions, could have a material adverse effect
on 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 amendment to this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
PRESSTEK, INC.
Dated: December 5, 1996 By: /s/ Robert E. Verrando
----------------------
Robert E. Verrando
President and Chief
Operating Officer
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