SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended June 30, 1998
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____ to _____
0-19263
(Commission File No.)
SUPREMA SPECIALTIES, INC.
(Exact name of registrant as specified in its charter)
New York 11-2662625
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
510 East 35th Street, Paterson, New Jersey 07543
(Address of principal executive offices including zip code)
Registrant's Telephone Number, including area code: (973) 684-2900
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;
Share Purchase Rights
(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
<PAGE>
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant as of October 9, 1998 was approximately
$12,197,000.
As of October 9, 1998, there were 4,561,894 shares of the registrant's Common
Stock outstanding.
Documents Incorporated by Reference: None
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Company
The current directors and executive officers of the Company are follows:
Name Age Position
---- --- --------
Mark Cocchiola 42 Chairman of the Board, Chief
Executive Officer and President
Paul Lauriero 47 Executive Vice President
and Director
Steven Venechanos 39 Chief Financial Officer
and Secretary
Thomas Egan 57 Senior Vice President
Anthony Distinti 79 Vice President
Marco Cocchiola 74 Director
Dr. Rudolph Acosta, Jr. 43 Director
Paul DeSocio 56 Director
William C. Gascoigne 45 Director
Mark Cocchiola has been President and a director of the Company since its
inception in 1983 and Chairman of the Board and Chief Executive Officer since
February 1991. Mark Cocchiola is the son of Marco Cocchiola.
Paul Lauriero has been a director of the Company since its inception in
1983 and Executive Vice President since February 1991. Mr. Lauriero was employed
by the Company in various capacities from its inception in 1983. Mr. Lauriero is
the brother-in-law of Mark Cocchiola.
Steven Venechanos has been employed by the Company since April 1994 and
became Chief Financial Officer and Secretary of the Company in April 1995. From
June 1990 until joining the Company, he was employed in a variety of positions
at Breed Technologies, a manufacturer of airbag sensors.
Thomas Egan has been Vice President of the Company since May 1993 and
Senior Vice President since June 1995. From May 1992 through May 1993, he was
Sales Manager of Blue Ridge Farms, a salad manufacturer. From October 1990
through May 1992, Mr. Egan was President of TEF Sales Corp., a sales and
marketing consulting firm specializing in the cheese importing business.
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<PAGE>
Anthony Distinti has been Vice President of the Company since November
1997. Mr. Distinti who has been an independent business consultant for more than
the past five years, has been employed in the food industry most of his life in
various capacities. He has more than forty years experience in human resources.
Marco Cocchiola has been a director of the Company since February 1991 and
Operations Manager since the Company's inception in 1983. Mr. Cocchiola was
Secretary of the Company from February 1991 to June 1993. Marco Cocchiola is the
father of Mark Cocchiola.
Rudolph Acosta, Jr., M.D. has been a director of the Company since August
1993. He has been engaged in the private practice of medicine since August 1986.
Paul DeSocio has been a director of the Company since August 1993. He has
been the President and a director of Autoprod, Inc., a manufacturer of food
packaging machinery since May 1989. From 1980 through May 1989, Mr. DeSocio was
a Vice President of Autoprod, Inc.
William C. Gascoigne has been a director of the Company since November
1996. He has served as a Vice President of Summit Bank since January 1989. From
November 1983 through January 1989, Mr. Gascoigne was a Vice President of First
Fidelity Bank.
The Company's directors are elected at the annual meeting of stockholders
to hold office until the annual meeting of stockholders for the ensuing year or
until their successors have been duly elected and qualified.
Officers are elected annually by the Board of Directors and serve at the
discretion of the Board.
Section 16(a) Beneficial Ownership Reporting Compliance
During the fiscal year ended June 30, 1998 the Company believes that all
transactions required to be reported by its executive officers or directors on
either Form 4 or Form 5 were reported except that Messrs. Mark Cocchiola,
Lauriero, and Egan failed to timely report the stock options granted to them
under the Company's 1991 Stock Option Plan and the repricing of certain options
in January 1998 and Mr. Venechanos failed to timely report stock options granted
to him under the Company's 1991 Stock Option Plan in September 1997 and January
1998 and the repricing of certain options in January 1998. In addition, Mr.
Distinti failed to timely file a Form 3 upon becoming an executive officer of
the Company in November 1997 and failed to timely report the grant of stock
options to him in January 1998.
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<PAGE>
Item 11. Executive Compensation
The following table discloses for the fiscal years ended June 30, 1998,
1997 and 1996, compensation awarded during such fiscal years to Mark Cocchiola,
the Company's Chief Executive Officer, Paul Lauriero, the Company's Executive
Vice President, Thomas Egan, the Company's Senior Vice President and Steven
Venechanos, the Company's Chief Financial Officer (the "Named Executives"), who
are the only executive officers of the Company whose salary and bonus exceeded
$100,000 during the fiscal year ended June 30, 1998 ("fiscal 1998").
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
---------------------------- ----------------------
Securities All Other
Name and Principal Underlying Compensation
Position Year Salary ($) Bonus ($) Options (#) ($)*
- -------------------- ---- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Mark Cocchiola, 1998 250,000 175,852 175,000(1) 17,674
Chairman of the Board, 1997 250,000 87,711 50,000 17,743
Chief Executive 1996 250,000 -- 50,000 17,742
Officer, and
President
Paul Lauriero 1998 250,000 175,852 155,000(2) 17,674
Executive Vice 1997 250,000 87,711 50,000 17,743
President 1996 250,000 -- 30,000 17,742
Thomas Egan 1998 125,000 -- 55,000(3) 6,600
Senior Vice 1997 105,769 -- 25,000 6,600
President 1996 100,000 -- 0 6,600
Steven Venechanos 1998 101,250 -- 100,000(4) 6,000
Chief Financial Officer 1997 86,729 -- 50,000 22,153
and Secretary 1996 77,499 -- 25,000 6,000
</TABLE>
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(1) Includes a total of 100,000 options that were previously granted in the
fiscal years ended June 30, 1996 and 1997 and were repriced in fiscal 1998.
(2) Includes a total of 80,000 options that were previously granted in the
fiscal years ended June 30, 1996 and 1997 and were repriced in fiscal 1998.
(3) Includes a total of 30,000 options that were previously granted in the
fiscal years ended June 30, 1994 and 1997 and were repriced in fiscal 1998.
(4) Includes a total of 50,000 options that were previously granted in the
fiscal years ended June 30, 1996 and 1997 and were repriced in fiscal 1998.
- ----------
* Consists of automobile allowance, medical insurance premium reimbursement
and compensation paid in lieu of vacation.
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<PAGE>
The following table discloses information concerning options granted in
fiscal 1998 to the Named Executives.
<TABLE>
<CAPTION>
Option Grants in Fiscal Year Ended June 30, 1998
Individual Grants
--------------------------------------------------------------
Number of
Securities Percent of Potential Realizable
Underlying Total Options Value at Assumed Annual
Options Granted to Exercise Rates of Stock Price
Granted Employees in Price Expiration Appreciation for Option
Name (#)(1) Fiscal Year ($/Sh) Date Term (1)(2)
- -------------- ---------- ------------- -------- ---------- --------------------------
5% ($) 10% ($)
------ -------
<S> <C> <C> <C> <C> <C> <C>
Mark Cocchiola 75,000 13.2 3.25 1/20/03 67,344 148,812
50,000 8.8 3.25 3/18/02 36,600 79,152
50,000 8.8 3.25 11/28/00 24,360 50,936
Paul Lauriero 75,000 13.2 3.25 1/20/03 67,344 148,812
50,000 8.8 3.25 3/18/02 36,600 79,152
30,000 5.3 3.25 11/28/00 14,616 30,562
Thomas Egan 25,000 4.4 3.25 1/20/03 22,448 49,604
25,000 4.4 3.25 3/18/02 18,300 39,576
5,000 0.9 3.25 7/15/98 405 810
Steven 25,000 4.4 3.25 1/20/03 22,448 49,604
Venechanos 25,000 4.4 3.25 9/08/02 20,670 45,202
25,000 4.4 3.25 3/18/02 18,300 39,576
25,000 4.4 3.25 10/10/00 11,911 24,944
</TABLE>
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1) The options granted to Messrs. Cocchiola and Lauriero were exercisable in
full from the date of grant. The options granted to Mr. Egan and Mr.
Venechanos vest in three annual installments commencing one year from the
original date of grant of the options. The table includes 100,000, 80,000,
30,000 and 50,000 options that had been previously granted to Messrs. Mark
Cocchiola, Lauriero, Egan and Venechanos, respectively, in prior fiscal
years that were repriced on January 20, 1998 to $3.25 per share.
(2) The potential realizable value columns of the table illustrate values that
might be realized upon exercise of the options immediately prior to their
expiration, assuming the Company's Common Stock appreciates at the
compounded rates specified over the term of the options. These numbers do
not take into account provisions of options providing for termination of
the option following termination of employment or nontransferability of the
options and do not make any provision for taxes associated with exercise.
Because actual gains will depend upon, among other things, future
performance of the Common Stock, there can be no assurance that the amounts
reflected in this table will be achieved.
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<PAGE>
The following table sets forth information concerning the number of options
owned by the Named Executives and the value of unexercised stock options held by
the Named Executives as of June 30, 1998. No stock options were exercised by the
Named Executives during fiscal 1998.
<TABLE>
<CAPTION>
Aggregate Year-End Option Values
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Options at
June 30, 1998 June 30, 1998($)(1)
Shares ----------------------- ------------------------------
Acquired on Value Rea- Exerci- Unexer- Exerci- Unexer-
Name Exercise (#) lized ($) sable cisable sable cisable
- ---- ------------ ---------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Mark -- -- 225,000 -- 122,000 --
Cocchiola
Paul -- -- 205,000 -- 112,000 --
Lauriero
Thomas Egan -- -- 23,333 41,667 17,667 20,834
Steve Venechanos -- -- 44,666 48,334 22,903 29,163
</TABLE>
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(1) Year-end values for unexercised in-the-money options represent the positive
spread between the exercise price of such options and the fiscal year end
market value of the common stock. An Option is "in-the-money" if the fiscal
year end fair market value of the Common Stock exceeds the option exercise
price. The last sale price (the fair market value) of the Common Stock on
June 30, 1998 was $3.75 per share.
Employment Agreements
Each of Mark Cocchiola and Paul Lauriero has entered into an employment
agreement with the Company that currently expires in April 1999. Each agreement
provides for the full-time employment of the executive at an annual salary of
$250,000, subject to adjustment for cost of living increases, and an annual
bonus equal to 5% of the Company's pre-tax profits in excess of $650,000.
Messrs. Mark Cocchiola and Lauriero waived their rights to annual bonuses in the
fiscal year ended June 30, 1996, received bonuses of $87,711 each in fiscal 1997
and received bonuses of $175,852 each in fiscal 1998. Each agreement provides
that the executive will not compete with the Company during the term of his
employment and for a period of one year following termination thereof by either
the Company or the executive for any reason. Each of the agreements also
provides that if employment of the executive is terminated under certain
circumstances, including a "change of control," he will be entitled to receive
severance pay equal to the higher of (i) $150,000 ($450,000 in the event of a
change of control) or (ii) the total compensation paid to him by the Company
during the 12 month period (36 month period in the event of a change of control)
prior to the date of termination.
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<PAGE>
Compensation of Directors
Non-employee directors receive compensation in the amount of $500 for each
meeting attended in person and $250 for each meeting attended by telephone
conference call for serving on the Board of Directors. Directors are reimbursed
for all out-of-pocket expenses incurred in attending Board meetings.
In addition, under the Company's 1991 Stock Option Plan (the "Plan"),
non-employee directors (other than directors who become members of a stock
option committee appointed by the Board of Directors pursuant to the Plan) are
eligible to be granted nonqualified stock options ("NSOs"). The Board of
Directors, or the stock option committee (the "Committee"), if one is appointed
by the Board, has discretion to determine the number of shares subject to each
NSO (subject to the number of shares available for grant under the Plan), the
exercise price thereof (provided such price is not less than 100% of the fair
market value of the underlying shares on the date of grant), the term thereof
(but not in excess of 10 years from the date of grant) and the manner in which
the option becomes exercisable (amounts, intervals and other conditions).
Directors who are employees (and are not members of the Committee) are eligible
to be granted incentive stock options ("ISOs") and NSOs under the Plan. The
Board or the Committee has discretion to determine the number of shares subject
to each ISO, the exercise price and other terms and conditions thereof, but
their discretion as to the exercise price, the term of each ISO and the number
of ISOs that may vest in any year, is limited by the terms of the Plan and the
Internal Revenue Code of 1986, as amended.
Compensation Committee Interlocks and
Insider Participation In Compensation Decisions
In June 1998 the Company established a Compensation Committee that is
currently composed of Dr. Rudolph Acosta and Mr. Paul Desocio. The function of
the Compensation Committee is to evaluate and determine the compensation of the
Company's executive officers pursuant to recommendations made by Mark Cocchiola,
the Company's Chief Executive Officer. During fiscal 1998, prior to the
appointment of the Compensation Committee, Mr. Mark Cocchiola and Mr. Paul
Lauriero, the Company's Executive Vice President, participated in the Board of
Directors deliberations concerning compensation of executive officers for the
Company's fiscal year ended June 30, 1998. During fiscal 1998, none of the
executive officers of the Company served on the Board of Directors or the
compensation committee of any other entity, any of whose officers served on the
Board of Directors of the Company.
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<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of October 9, 1998,
based on information obtained from the persons named below, with respect to the
beneficial ownership of shares of Common Stock by (i) each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
shares of Common Stock, (ii) each of the Named Executives, (iii) each of the
Company's directors and (iv) all executive officers and directors as a group:
Amount and Nature Percentage of
Name and Address of of Beneficial Outstanding
Beneficial Owner(1) Ownership(2) Shares Owned(3)
- ------------------- ----------------- ----------------
Mark Cocchiola 844,302(4) 17.6%
Paul Lauriero 525,619(5) 11.0
Marco Cocchiola 90,079(6) 1.9
Thomas Egan 23,333(7) *
Steve Venechanos 44,666(8) 1.0
Dr. Rudolph Acosta 3,000(9) *
Paul DeSocio -- --
William C. Gascoigne -- --
Dimensional Fund
Advisors Inc. 262,000(10) 5.7
All executive officers
and directors as a group
(nine persons) 1,530,999(4)(5)(6) 29.8
(7)(8)(9)
- ----------
* Less than one percent.
(1) Unless otherwise noted, the address of each beneficial owner is in care of
the Company.
(2) Unless otherwise noted, the Company believes that all persons referred to
in the table have sole voting and investment power with respect to all
shares of Common Stock reflected as beneficially owned by them.
(3) Calculated based on 4,561,894 shares of Common Stock outstanding at October
9, 1998. The applicable percentage is based on options to purchase Common
Stock which are
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<PAGE>
currently exercisable or become exercisable within 60 days of such date.
(4) Includes (i) exercisable options to purchase 230,000 shares(of which 5,000
options are owned by Mr Cocchiola's wife) and (ii) 6,000 shares held of
record by Mr. Cocchiola's wife.
(5) Includes (i) exercisable options to purchase 205,000 shares, (ii) 22,539
shares held of record by Mr. Lauriero's wife, and (iii) 45,079 shares held
of record by Mr. Lauriero's children.
(6) Includes exercisable options to purchase 80,000 shares.
(7) Represents exercisable options to purchase 23,333 shares.
(8) Represents exercisable options to purchase 44,666 shares.
(9) Does not include 800 shares owned by Dr. Acosta's children, with respect to
which Dr. Acosta disclaims any beneficial interest.
(10) According to a Schedule 13G filed by Dimensional Fund Advisors Inc. with
the Securities and Exchange Commission, the shares are owned by advisory
clients of Dimensional Fund Advisors Inc., an investment advisor. In the
Schedule 13G, Dimensional Fund Advisors disclaims beneficial ownership of
such securities. The address of Dimensional Fund Advisors is 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401.
Item 13. Certain Relationships and Related Transactions
Not Applicable
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<PAGE>
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.
SUPREMA SPECIALTIES, INC.
By: /s/ Mark Cocchiola
-------------------------
Mark Cocchiola, President
Dated: October 12, 1998
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