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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1999
Commission File Number: 0-24108
SARNIA CORPORATION
(Exact name of registrant as specified in its charter)
NOT APPLICABLE
(Former name of registrant if changed since last report)
Virginia 54-1215366
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6850 Versar Center
Springfield, Virginia 22151
(Address of principal executive offices, including zip code)
(703) 642-6800
(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, NO PAR VALUE
(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
--- ---
The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant computed as of September 1, 1999 was
approximately $2,155,136.
The number of shares of Common Stock outstanding as of September 1, 1999
was 4,572,545.
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Sarnia Corporation (the "Company"), is filing this Amendment No. 1 on
Form 10-K/A (this "Amendment") to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999 (the "Original Report") in order to provide
the information required by Part III of the Form 10-K (Items 10, except for
Executive Officers which is included in Part I of the Original Report, 11, 12
and 13), which information was omitted from the Original Report as provided in
General Instruction G(3) of the instructions to Form 10-K. This Amendment to
the Original Report speaks as of the original date of filing of the Original
Report.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table provides a summary of the Company's directors as of
November 30, 1999.
Name Age & Class Business Experience And Other Information
- ---- ----------- -----------------------------------------
Benjamin M. Rawls 58 III Chairman of the Board of Sarnia
Term expires Corporation since 1994; Chairman of the
in 1999 Board of Versar, Inc. since 1993 and
President and Chief Executive Officer
of Versar since 1991; a director of
Versar since 1991 and a director of
Sarnia since 1991.
James N. Schwarz 54 III Partner, Patton Boggs LLP since September
Term Expires 1998; Partner, Ginsburg, Feldman and
in 1999 Bress from 1996 to August 1998; Sr. Vice
President, General Counsel and Corporate
Secretary of Steuart Petroleum Company
from 1991 to 1995; Director of the
Company since May 1996.
Michael Markels, 73 I Chairman of the Board, President and
Jr. Term Expires Chief Executive Officer of Ocean Farming,
in 2000 Inc. since 1995; Co-founder, Director of
Versar, Inc. since 1969 and Chairman
Emeritus of Versar, Inc. since 1993. A
director of Sarnia since 1982.
Thomas Hotz 39 I Partner of HMG Realty Advisors since
Term Expires 1999; Partner of Magnum Capital Partners,
in 2000 L.L.C. from 1996 to 1999; Managing
Director of Julien J. Studley, Inc., a
national real estate firm, from 1989
to 1995. A director of Sarnia since June
1994.
Gerald T. Halpin 76 II President of WEST*GROUP MANAGEMENT, LLC.,
Term Expires a real estate development and construc-
in 2000 tion firm, and its predecessor since
1970. A director of Sarnia since June
1994.
There is no arrangement or understanding between any director or executive
officer and any other person pursuant to which he was selected as a director or
an officer. The Company's Articles of Incorporation were amended in May 1994
to increase the Board of Directors to five members and "classify" the directors
into three classes (I, II and III), with directors in each class serving three-
year terms and with one or two directors standing for election in any one year.
The executive officers of the Company are elected at the annual meeting of the
Board of Directors and hold office until their successors have been elected and
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qualified. No family relationship currently exists among any of the executive
officers and directors of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon copies of reports furnished to us, the Company believes that
all reports required to be filed by persons subject to Section 16 of the
Securities Exchange Act of 1934, and the rules and regulations thereunder, have
been timely filed.
ITEM 11. EXECUTIVE COMPENSATION.
Cash Compensation
The following table sets forth information on compensation paid by Sarnia
for services rendered in all capacities during the three fiscal years ended
June 30, 1999, to the Company's Chief Executive Officer, and the one other
executive officer who received compensation (collectively, the "Named Executive
Officers"). Two other executive officers, Lawrence W. Sinnott and Pamela J.
John received no compensation from the Company.
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation
-------------------
Name, Principal Position Salary Bonus Other Annual All Other
and Compensation Compensation
Fiscal Year $ $ $ $
======================== ============ ======= ============ ============
Charles I. Judkins, Jr.
President and Chief Executive Officer
---------------------------------------
1999 $ 41,429 $ 6,000 0 0
1998 44,596 5,000 0 0
1997 35,096 0 0 0
=======================================
William G. Denbo
Vice President and General Manager
---------------------------------------
1999 $ 72,500 $15,000 0 $855 (2)
1998 71,159 7,500 0 833 (2)
1997 71,265 (1) 6,000 0 603 (2)
=======================================
(1) The salary for fiscal year 1997 reflects payments for 27 pay periods
instead of 26 due to a change in financial reporting by the Company.
This change did not have any effect on the total salary received by
Mr. Denbo for the calendar year 1997.
(2) The amounts shown in this column for Mr. Denbo consist of payments for
insurance premiums on term life insurance.
No stock options were granted during the fiscal year ended June 30,
1999.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
---------------------------------------------------
(a) (b) (c) (d) (e)
Shares Value Number of Securities Value of Unexercised
Name Acquired on Realized Underlying Unexercised In-the-Money
Exercise ($) Options/SARS at Options/SARs at
(#) 6/30/99 6/30/99 Exercisable/
(#) Unexercisable (1)
Exercisable/
Unexercisable
- ------------ ------------ -------- --------------------- --------------------
Charles I.
Judkins 0 0 50,000/0 $24,000/0
William G.
Denbo 0 0 25,000/25,000 $12,000/$12,000
- -------------------------------------------------------------------------------
(1) On June 30, 1999, the closing price of the Company's Common Stock was
$0.48.
Directors Compensation
Directors who are not employees of Samia are normally paid an annual fee
of $1,000 plus an attendance fee of $500 for each meeting of the Board of
Directors and its committees. In addition, under the Sarnia 1994 Stock Option
Plan on each anniversary date of the plan (December 1), each director who is
not an employee of the Company and who on such anniversary date is a member of
the Board, is to be granted a non-qualified stock option with an exercise price
equal to the then current fair market value to purchase either (1) 25,000
shares of common stock if such director has served at least one year on the
Board and has not yet been awarded an option under the Plan provisions
providing for option grants to non-employee directors, or (2) an option to
purchase 500 shares of common stock if such director has already received an
award under the Plan provisions providing for option grants to non-employee
directors. All such options are fully vested and exercisable as of the date of
grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Principal Shareholders
The table below sets forth, as of November 1, 1999 the only persons known
by the Company to be the beneficial owners of more than 5% of the outstanding
shares of Common Stock.
Amount and Nature of
Name and Address of Beneficial Ownership
Beneficial Owner (1) Percent of Class of Stock
- ---------------------------- -------------------- -------------------------
Dr. Michael Markels, Jr. (2) 773,232 16.9%
6850 Versar Center
Springfield, VA 22151
Dr. Robert L. Durfee (3) 834,374 18.2%
6850 Versar Center
Springfield, VA 22151
Gerald T. Halpin (2) 673,250 13.7%
1600 Anderson Rd.
Mclean, VA 22102
Charles I. Judkins, Jr. (2) 325,514 7.1%
6850 Versar Center
Springfield, VA 22151
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Amount and Nature of
Name and Address of Beneficial Ownership
Beneficial Owner (1) Percent of Class of Stock
- ---------------------------- -------------------- -------------------------
Benjamin M. Rawls (2) 301,537 6.6%
6850 Versar Center
Springfield, VA 22151
Versar, Inc. Employee Savings
and Stock Ownership Plan (4) 331,093 7.2%
- --------------------
(1) For purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13d-3 under the Securities and
Exchange Act of 1934, as amended, under which, in general, a person
is deemed to be beneficial owner of a security if he or she has or
shares the power to vote or direct the voting of the security or the power
to dispose or to direct the disposition of the security, or if he or she
has the right to acquire beneficial ownership of the security within 60
days of November 1,1999.
(2) For a description of the nature of the beneficial ownership of Dr.
Markels, Messrs. Judkins and Rawls, see "Security Holdings of Management".
The information with respect to shares of Common Stock held by Dr.
Markels, Messrs. Judkins and Rawls is based upon filings with the
Securities and Exchange Commission.
(3) Dr. Durfee's beneficial ownership of shares includes 34,000 shares owned
by adult children of Dr. Durfee as to which he shares voting and
investment power and 187,500 shares Dr. Durfee has the right to acquire
upon conversion of shares of the Company's Series A Cumulative Convertible
Preferred Stock ("Preferred Stock") held by him. The information with
respect to shares of Common Stock held by Dr. Durfee is based upon
filings with the Securities and Exchange Commission.
(4) Of the 331,093 shares of Common Stock held by the Versar, Inc., Employee
Savings and Stock Ownership Plan (the "ESSOP"), 331,093 shares are
allocated to individual ESSOP participants' accounts and are voted
by the Trustees. The ESSOP Trustees have investment power over all
shares of Common Stock held by the ESSOP. The ESSOP Trustees are Michael
Markels, Jr., Benjamin M. Rawls and James C. Dobbs. Each disclaims
beneficial ownership of the Common Stock held by the ESSOP. The
information with respect to shares of Common Stock held by the ESSOP is
based upon filings with the Securities and Exchange Commission and a
report by the Company's stock transfer agent.
Security Holdings of Management
The following table sets forth certain information regarding the ownership
of Sarnia's Common Stock and preferred stock by the Company's directors, the
Company's Chief Executive Officer and one other executive officer who is named
in the Summary Compensation Table herein and the Company's directors and
executive officers as a group, as of November 1, 1999.
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Individual or Group Shares of Common Stock Beneficially
------------------- Owned as of
November 1, 1999 (1)
-----------------------------------
Class and Number Percent
--------------------- -----------
Michael Markels, Jr. (2) Common 773,232 16.9%
Preferred 0 0%
Gerald T. Halpin (3) Common 673,250 13.7%
Preferred 10,000 33.3%
Thomas Hotz (4) Common 50,500 1%
Preferred 0 0%
Benjamin M. Rawls (5) Common 301,537 6.6%
Preferred 3,000 10.0%
Charles I. Judkins, Jr. (6) Common 325,514 7.1%
Preferred 3,000 10.0%
William G. Denbo (7) Common 33,738 *
Preferred 0 0%
James N. Schwarz (8) Common 20,000 *
Preferred 0 0%
All directors and executive Common 2,856,889 62.5%
officers as a group (8 persons) Preferred 16,000 53.3%
- --------------------
* Less than 1%
(1) For the purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule l3d-3 under
the Securities Exchange Act of 1934, as amended, under which, in
general, a person is deemed to be the beneficial owner of a security
if he or she has or shares the power to vote or to direct the voting
of the security or the power to dispose or to direct the disposition
of the security, or if he or she has the right to acquire beneficial
ownership of the security within 60 days of November 1, 1999.
(2) Includes 331,500 shares owned by adult children of Dr. Markels as to
which he shares voting and investment power and 25,000 shares which
Dr. Markels has the right to acquire upon the exercise of options.
Dr. Markels is a Trustee of the Versar ESSOP and as such he has
shared investment power over 331,093 shares, none of which are
included in the above table. Dr. Markels disclaims beneficial
ownership of the shares held by the Versar ESSOP.
(3) Includes 625,000 shares Mr. Halpin has the right to acquire upon
conversion of shares of the Company's Preferred stock.
(4) Includes 25,000 shares which Mr. Hotz has the right to acquire upon
the exercise of options.
(5) Includes 50,000 shares Mr. Rawls has the right to acquire upon the
exercise of options and 187,500 shares Mr. Rawls has the right to
acquire upon the conversion of shares of the Company's Preferred
Stock. Mr. Rawls is a Trustee of the Versar ESSOP and as such he
has shared investment power over 331,093 shares, none of which are
included in the above table. Mr. Rawls disclaims beneficial
ownership of the shares held by the Versar ESSOP.
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(6) Includes 50,000 shares Mr. Judkins has the right to acquire upon the
exercise of options and 187,500 shares Mr. Judkins has the right to
acquire upon the conversion of shares of the Company's Preferred
Stock.
(7) Includes 33,738 shares Mr. Denbo has the right to acquire upon the
exercise of options.
(8) Includes 20,000 shares Mr. Schwarz has the right to acquire upon the
exercise of options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None
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 be signed on its
behalf by the undersigned, thereunto duly authorized.
SARNIA CORPORATION
(Registrant)
/s/ Charles I. Judkins, Jr.
----------------------------------
Charles I. Judkins, Jr.
President & CEO
December 17, 1999
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