SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-K/A
(Amendment No. 1 to Form 10-K)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
or
[ ] 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 0-25036
VIDEONICS, INC.
(Exact name of Registrant as specified in its charter)
California 77-0118151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1370 Dell Ave., Campbell, California 95008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 866-8300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without par value Nasdaq SmallCap Market
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 the 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. [ ]
At March 31, 2000, the aggregate market value of Common Stock held by
non-affiliates of the Registrant was approximately $5,990,424
As of March 31, 2000, there were 5,898,974 shares of the Registrant's
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
Items 10, 11, 12 and 13 of Part III of the Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, of Videonics Inc. (the "Company" or
the "Registrant") previously filed with the Securities and Exchange
Commission ("SEC") are hereby amended and
restated to read in their entirety as follows:
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
The executive officers and directors of the Company as of December 31,
1999 are as follows:
<CAPTION>
Director /
Name Age Position Officer Since
---- --- -------- -------------
<S> <C> <C> <C>
Michael L. D'Addio 55 Chairman of the 1986
Board, Chief
Executive Officer
and Director
Jeffrey A. Burt 47 V.P. Operations 1992
Gary L. Williams 33 V.P. Finance, 1999
Chief Financial
Officer and Secretary
Carl E. Berg 61 Director 1987
Mark C. Hahn 50 Director 1986
N. William Jasper, Jr. 52 Director 1993
</TABLE>
Michael L. D'Addio, a co-founder of the Company, has served as Chief
Executive Officer and Chairman of the Board of Directors since the Company's
inception in July 1986. In addition Mr. D'Addio served as the Company's
President from July 1986 until November 1997. From May 1979 through November
1985 Mr. D'Addio served as President, Chief Executive Officer and Chairman of
the Board of Directors of Corvus Systems, a manufacturer of small computers and
networking systems. Mr. D'Addio holds an A.B. degree in Mathematics from
Northeastern University.
Jeffrey A. Burt has served as Vice President of Operations of the Company
since April 1992. From August 1991 to March 1992, Mr. Burt served the Company as
its Materials Manager. Prior to that time, from October 1990 until July 1991,
Mr. Burt acted as a consultant to the Company in the area of materials
management. From May 1989 to October 1990, Mr. Burt served as the Director of
Manufacturing of On Command Video. Mr. Burt holds a B.A. degree in Economics
from the University of Wisconsin at Whitewater.
Gary L. Williams has served the Company as its Vice President of Finance,
Chief Financial Officer and Secretary since February 1999. From February 1995 to
January 1999, Mr. Williams served as the Company's Controller. From July 1994 to
January 1995, he served as Controller for Western Micro Technology, a publicly
traded company in the electronics distribution business. From January 1990 to
June 1994, Mr. Williams worked in public accounting for Coopers
2
<PAGE>
& Lybrand LLP. Mr. Williams is a Certified Public Accountant and has a Bachelors
Degree in Business Administration, with an emphasis in Accounting from San Diego
State University.
Carl E. Berg, a co-founder of the Company, has served on the Company's
Board of Directors since June 1987. Mr. Berg is currently, Chief Executive
Officer, President and a director for Mission West Properties. Mr. Berg is also
a member of the Board of Directors of Integrated Device Technology, Inc.,
Valence Technology, Inc., and Systems Integrated Research.
Mark C. Hahn, a co-founder of the Company, has served as Director since the
Company's inception in July 1986. From February 1996 to November 1999, Mr. Hahn
served as the Company's Chief Technical Officer. From July 1986 to February
1996, Mr. Hahn served as the Company's Vice President of Research and
Development. Prior to co-founding the Company, Mr. Hahn served as Vice President
of Research and Chief Technologist of Corvus Systems from May 1979 to February
1986. Mr. Hahn holds a B.S. degree in Electrical Engineering from Princeton
University and a M.S. degree in Electrical Engineering from Stanford University.
N. William Jasper, Jr. joined the Board of Directors of the Company in
August 1993. Since 1983, Mr. Jasper has been the President and Chief Operating
Officer of Dolby Laboratories, Inc.
Section 16(a) beneficial ownership reporting compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Commission initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than ten percent shareholders are required by Commission regulation
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports and amendments thereto furnished to the Company and written
representations from the reporting persons that no other reports were required,
the Company believes that all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with during the year ended December 31, 1999.
3
<PAGE>
<TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the total compensation earned by the Chief
Executive Officer and each of the executive officers of the Company whose salary
and bonus for fiscal year 1999 exceeded $100,000 for services rendered in all
capacities for the years ended December 31, 1999, 1998, and 1997.
<CAPTION>
Summary Compensation Table
Annual Long-Term
Compensation (1) Compensation
---------------- ------------ All Other
Name and Salary Bonus Option/ Compensation
Principal Position Year ($) ($) SARs (#) ($)
- ------------------ ---- --- --- -------- ---
<S> <C> <C> <C> <C> <C>
Michael L. D'Addio 1999 $150,000 0 0 0
Chief Executive Officer 1998 $150,000 0 0 0
1997 $130,667 0 0 0
Jeffrey A. Burt 1999 $133,462 0 0 0
Vice President of 1998 $122,693 0 30,000 (2) 0
Operations 1997 $110,000 0 30,000 (2) $30,200 (3)
Gary L. Williams 1999 $118,697 0 50,000 0
Vice President of 1998 $94,085 0 22,504 (5) 0
Finance, CFO & 1997 $86,020 0 16,504 (6) 0
Secretary (4)
<FN>
(1) Except for annual compensation reported below, there is no other annual compensation to report.
(2) Includes repriced options to purchase 30,000 shares of Common Stock.
(3) Amounts represent gain recognized on exercise of nonstatutory stock options issued under the Company's 1987 Stock Option Plan.
(4) Mr. Williams was appointed Vice President of Finance and Chief Financial Officer in February 1999.
(5) Includes repriced options to purchase 16,504 shares of Common Stock.
(6) Includes repriced options to purchase 10,504 shares of Common Stock.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
The following tables set forth as to the Chief Executive Officer and each
of the other executive officers named in the Summary Compensation Table, certain
information with respect to options to purchase shares of Common Stock of the
Company as of and for the year ended December 31, 1999.
<CAPTION>
Option/SAR Grants in 1999
Number of % of Total Potential Realizable
Securities Options/ Value at Assumed Annual
Underlying SARs Exercise Rates of Stock Price
Option/ Granted to or Base Appreciation for
SARs Employees Price Option Term (3)
Granted In ($/per Exp. --------------------------------
Name (#) (1) 1999 (2) Share) Date 0% ($) 5% ($) 10% ($)
- --------------------- -------- -------- ------ ----- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey A. Burt 25,000 7.2% $0.78 2/17/09 0 $12,304 $31,143
Gary L. Williams 50,000 14.4% $0.78 2/17/09 0 $24,608 $62,286
<FN>
(1) Options granted in this table have exercise prices equal to the fair market value of the Company's Common Stock on the date of
grant. All such options typically become exercisable at a rate of 1/8 after the first full six months of employment, and 1/8
every six months thereafter for a total four year vesting period following the date of grant.
(2) The Company granted options to purchase a total of 348,124 shares of Common Stock to employees and Directors in 1999.
(3) Potential realizable value assumes that the stock price increases from the date of grant until the end of the option term (10
years) at the annual rate specified (0%, 5%, 10%). Annual compounding results in total appreciation of 63% (at 5% per year) and
159% (at 10% per year). The 5% and 10% assumed rates of appreciation (over the deemed fair market value at the grant date) are
mandated by the rules of the Securities and Exchange Commission and do not represent the Company's estimate or projection of
the future growth of the price of the Company's Common Stock.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
Aggregated Option/SAR Exercises in 1999
and Fiscal Year-End Option/SAR Values
Shares Number of Securities Value of Unexercised
Acquired on Value Underlying Unexercised In-the-Money Options/SARs
Exercise Realized Options/SARs at Year-End at Year-End(1)
Name # $ Exercisable Unexercisable Exercisable Unexercisable
- -------------------- --------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michael L. D'Addio - - - - - -
Jeffrey A. Burt - - 56,375 25,625 $11,321 2,078
Gary L. Williams - - 22,691 49,813 $594 4,156
<FN>
(1) Calculated on the basis of the closing price of $0.88 on December 31, 1999, minus the exercise price.
</FN>
</TABLE>
<TABLE>
Ten-Year Option/SAR Repricing
Market Length of
Number of Price of Exercise Original
Securities Stock at Price at Option Term
Underlying Time of Time of Remaining at
Option/SARs Repricing Repricing New Date of
Repriced or or or Exercise Repricing or
Name Date Amended Amendment Amendment Price Amendment
- ---------------------- ---- ------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey A. Burt 6/24/98 30,000 $1.50 $5.00 $1.50 9 years 56 days
8/19/97 30,000 $5.00 $7.50 $5.00 8 years 177 days
Gary L. Williams 6/24/98 10,504 $1.50 $5.00 $1.50 9 years 56 days
6/24/98 6,000 $1.50 $4.50 $1.50 9 years 56 days
8/19/97 10,504 $5.00 $7.50 $5.00 8 years 177 days
</TABLE>
6
<PAGE>
Employment Agreements
The Company has entered into Key Employee Agreements with Mr. Burt and Mr.
Williams to provide for the acceleration of option vesting under certain
circumstances upon a change in control as defined in those agreements.
Remuneration of Non-Employee Directors
The Company does not compensate non-employee directors who are also major
shareholders, such as Mr. Berg, for their services. Other non-employee
directors, such as Mr. Jasper, receive $500 for each board meeting attended. In
addition, non-employee directors (other than non-employee directors who are also
major shareholders), serving on the Company's Board of Directors on August 31st
of each year will be granted nonstatutory stock options to purchase 4,504 shares
of the Company's Common Stock. During 1999, Mr. Jasper received options to
purchase 4,504 shares of the Company's Common Stock representing director's
options for 1999.
Report of the Compensation Committee With Respect to Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee") was
established on October 27, 1994. The functions of the Committee are to make
recommendations to the Board concerning salaries and incentive compensation for
the Company's executive officers.
The Company's executive compensation program has been designed to (i)
attract and retain executives capable of leading the Company to meet its
business objectives and to motivate them to enhance long-term shareholder value
through compensation that is comparable to the levels offered by other companies
in similar industries; (ii) motivate key executive officers to achieve strategic
business initiatives and reward them for their achievement; and (iii) align the
interests of executives with the long-term interests of the Company's
shareholders through award opportunities resulting in the ownership of the
Company's Common Stock. Annual compensation for the Company's executive officers
may consist of three elements: cash salary, cash incentive bonus, and stock
option grants. Stock option grants provide an incentive which focuses the
executive's attention on managing the Company from the perspective of an owner
with an equity stake in the business. These stock options will generally provide
value to the recipient only when the price of the Company's stock increases
above the option grant price.
The Committee recognizes that the salary paid to Mr. D'Addio, the
Company's Chief Executive Officer, is substantially below that paid to others in
comparable positions of similar companies. The Committee increased the annual
salary of Mr. D'Addio, the Company's CEO to $150,000 in 1997 from $92,000. The
Committee recognizes that Mr. D'Addio's current salary is still significantly
below the salary of CEO's in comparable public companies, however, Mr. D'Addio
declined any additional increase.
During 2000, it is anticipated that the Committee will conduct annual
performance reviews comparing actual Company progress against annual plans.
Elements of such plans, including progress on product development, sales and
marketing, expense control and organizational development, may be considered.
7
<PAGE>
Carl E. Berg
N. William Jasper Jr.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
The Compensation Committee consists of Messrs. Berg and Jasper, neither of
whom is employed by the Company. There are no Compensation Committee interlocks
between the Company and other entities involving the Company's executive
officers and Board members who serve as executive officers of such entities.
8
<PAGE>
<TABLE>
Performance Measurement Comparison
The following graph compares the annual percentage change in the
cumulative shareholder return of the Common Stock of the Company, with CRSP
Total Return Index for the Nasdaq Stock Market (Domestic Companies) and the CRSP
Total Return Index for the Nasdaq Electronic Component Companies, for the period
beginning December 31, 1995 and ending December 31, 1999. The graph assumes that
$100.00 was invested on December 31, 1995.
(The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T)
<CAPTION>
Cumulative Total Return
-------------------------------------------------------------
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Videonics, Inc. 100 76 35 5 8
Nasdaq (Domestic) 100 123 151 212 394
Electronic Component
Companies 100 173 181 280 550
</TABLE>
These indices are calculated on a dividend reinvested basis. The Company
emphasizes that the performance of the Company's stock over the period shown is
not necessarily indicative of the future performance of the Company's stock.
9
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERS
The following table sets forth, as of March 31, 2000, certain information
with respect to each person known by the Company to be a beneficial owner, as
defined in Rule 13d-3 ("Rule 13d-3") promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act"), of more than 5% of the outstanding Common Stock of the Company.
Percentage of
Outstanding
Name and Address Number of Shares Common
of Beneficial Owner Beneficially Owned Stock
- ------------------- ------------------ -----
Carl E. Berg
10050 Bandley Drive
Cupertino, CA 95014 1,466,205 24%
Michael L. D'Addio
1370 Dell Avenue
Campbell, CA 95008(1) 921,762 (1) 15%
Mark C. Hahn
1370 Dell Avenue
Campbell, CA 95008 493,515 8%
(1) Includes 9,000 shares subject to stock options exercisable as of March 31,
2000 or within 60 days thereafter held by Mr. D'Addio's spouse, a Company
employee.
10
<PAGE>
MANAGEMENT
The following table sets forth certain information, as of March 31, 2000
concerning each director and each executive officer, including their beneficial
ownership as defined in Rule 13d-3, of shares of Common Stock and beneficial
ownership of Common Stock by all officers and directors as a group.
Number of Percentage of
Shares Outstanding
Name of Beneficial Owner Beneficially Owned Common Stock
- ------------------------ ------------------ ------------
Carl E. Berg 1,466,205 24%
Michael L. D'Addio 921,762 (1) 15
Mark C. Hahn 493,515 8
N. William Jasper, Jr. 40,847 (2) *
Jeffrey A. Burt 63,250 (3) 1
Gary L. Williams 32,004 (4) *
All executive officers and
directors as a group (6 persons) (5) 3,017,583 50%
* Represents less than 1%
(1) Includes 9,000 shares subject to stock options exercisable as of March 31,
2000 or within 60 days thereafter held by Mr. D'Addio's spouse, a Company
employee.
(2) Includes 9,567 shares subject to stock options exercisable as of March 31,
2000 or within 60 days thereafter.
(3) Includes 63,250 shares subject to stock options exercisable as of March 31,
2000 or within 60 days thereafter.
(4) Includes 32,004 shares subject to stock options exercisable as of March 31,
2000 or within 60 days thereafter.
(5) Includes an aggregate of 113,821 shares included pursuant to notes (1) -
(4).
11
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is no pending litigation or proceeding involving a director,
officer, employee or other agent of the Company as to which indemnification from
the Company is being sought nor is the Company aware of any pending or
threatened litigation that may result in claims for indemnification by any
director, officer, employee or other agents.
At December 31, 1999, the Company had an unsecured loan from Carl Berg, a
director and shareholder of the Company. This loan, in the amount of $1,035,000,
bears interest at 8% per year, and is due on January 16, 2001. Accrued interest
is payable at maturity. On March 22, 2000, the loan was amended to extend the
maturity date to January 16, 2002.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Amendment No. 1 to Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized,
on this 27th day of April, 2000.
VIDEONICS, INC.
By: /s/ Michael L. D'Addio
------------------------------
Michael L. D'Addio
Chief Executive Officer
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
<CAPTION>
Name and Signature Title Date
- ------------------ ----- ----
<S> <C> <C>
/s/ Michael L. D'Addio Chairman of the Board April 27, 2000
- ------------------------------ and Chief Executive Officer
Michael L. D'Addio (Principal Executive Officer)
/s/ Gary L. Williams Vice President of Finance, April 27, 2000
- ------------------------------ and Chief Financial Officer
Gary L. Williams (Principal Financial Officer
and Principal Accounting
Officer)
/s/ Carl E. Berg Director April 27, 2000
- ------------------------------
Carl E. Berg
/s/ Mark C. Hahn Director April 27, 2000
- ------------------------------
Mark C. Hahn
/s/ N. William Jasper, Jr. Director April 27, 2000
- ------------------------------
N. William Jasper, Jr.
</TABLE>
13
