-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S6FjA/xIciF91QNlbymAQt81qKT/QynA3EiUR4Jcs3d9nlDrpNoXek9jSb6QsPYK 8razt1SDp9YeX6yBWzSLEg== 0001021435-02-000006.txt : 20020430 0001021435-02-000006.hdr.sgml : 20020430 ACCESSION NUMBER: 0001021435-02-000006 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAPHON CORP/DE CENTRAL INDEX KEY: 0001021435 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133899021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21683 FILM NUMBER: 02626875 BUSINESS ADDRESS: STREET 1: 400 COCHRANE CIRCLE CITY: MORGAN HILL STATE: CA ZIP: 95037 BUSINESS PHONE: 4087763232 MAIL ADDRESS: STREET 1: 40O COCHRANE CIRCLE CITY: MORGAN HILL STATE: CA ZIP: 95037 FORMER COMPANY: FORMER CONFORMED NAME: UNITY FIRST ACQUISITION CORP DATE OF NAME CHANGE: 19960823 10-K/A 1 gojoka1.txt 10-K AMENDMENT V6 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A-1 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001 Commission file number: 0-21683 GRAPHON CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-3899021 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 11711 Southeast 8th Street, Suite 215 Bellevue, Washington 98004 (Address of principal executive offices) Registrant's telephone number: (425) 818-1400 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.0001 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 [ ] 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. ( ) The aggregate market value of the voting stock of registrant held by non-affiliates of the registrant as of March 25, 2002 was approximately $4,476,700. Number of shares of Common Stock outstanding as of March 25, 2002: 17,384,580 shares of Common Stock. 1 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT EXECUTIVE OFFICES AND DIRECTORS OF THE REGISTRANT Set forth below is information concerning each of our directors and executive officers as of March 29, 2002.
Name Age Position Robert Dilworth 60 Chairman of the Board of Directors and Chief Executive Officer (Interim) William Swain 61 Chief Financial Officer and Secretary George Phillips 59 Vice President, Worldwide Sales and Marketing August P. Klein 65 Director Michael Volker 53 Director
Robert Dilworth has served as one of our directors since July 1998 and was appointed Chairman in December 1999. In January 2002, Mr. Dilworth was appointed Interim Chief Executive Officer upon the termination, by mutual agreement, of our former Chief Executive Officer, Walter Keller. From 1987 to 1998 he served as the Chief Executive Officer and Chairman of the Board of Metricom, Inc., a leading provider of wireless data communication and network solutions. Prior to joining Metricom, from 1985 to 1988, Mr. Dilworth served as President of Zenith Data Systems Corporation, a microcomputer manufacturer. Earlier positions included Chief Executive Officer and President of Morrow Designs, Chief Executive Officer of Ultramagnetics, Group Marketing and Sales Director of Varian Associates Instruments Group, Director of Minicomputer Systems at Sperry Univac and Vice President of Finance and Administration at Varian Data Machines. Mr. Dilworth is also a director of eOn Communications, Mobility Electronics, Transcept Corporation, Yummy Interactive and Get2Chip.com, Inc. William Swain has served as our Chief Financial Officer and Secretary since March 2000. Mr. Swain was a consultant from August 1998 until February 2000, working with entrepreneurs in the technology industry in connection with the start-up and financing of new business opportunities. Mr. Swain was Chief Financial Officer and Secretary of Metricom Inc., from January 1988 until June 1997, during which time he was instrumental in private financings as well as Metricom's initial public offering and subsequent public financing activities. He continued as Senior Vice President of Administration with Metricom from June 1997 until July 1998. Prior to joining Metricom, Mr. Swain held top financial positions with leading companies in the computer industry, including Morrow Designs, Varian Associates and Univac. Mr. Swain holds a Bachelors degree in Business Administration from California State University of Los Angeles and is a Certified Public Accountant in the State of California. George Phillips has served as our Vice President, Worldwide Sales since October 2000 and was appointed Vice President, Worldwide Sales and Marketing in January 2002. Previously, Mr. Phillips served as Vice President, Worldwide Sales at HotJobs Software Group, which merged with Resumix, Inc., where Mr. Phillips was Vice President, North American Sales and region vice president, since 1997. Prior to Resumix, Mr. Phillips was vice president of sales at Covalent Systems Corporation from 1983 through 1997. Mr. Phillips has also held various sales and marketing positions 2 with Fafco, Inc. and Xerox Corporation. Mr. Phillips holds a Bachelors degree in Psychology and Economics from Brigham Young University. August P. Klein has served as one of our directors since August 1998. Mr. Klein has been, since 1995, the founder, Chief Executive Officer and Chairman of the Board of JSK Corporation. From 1989 to 1993, Mr. Klein was founder and Chief Executive Officer of Uniquest, Inc., an object-oriented application software company. From 1984 to 1988, Mr. Klein served as Chief Executive Officer of Masscomp, Inc., a developer of high performance real time mission critical systems and UNIX-based applications. Mr. Klein has served as Group Vice President, Serial Printers at Data Products Corporation and President and Chief Executive Officer at Integral Data Systems, a manufacturer of personal computer printers. From 1957 to 1982, he was General Manager of the Retail Distribution Business Unit and Director of Systems Marketing at IBM. Mr. Klein is a director of QuickSite Corporation and has served as a trustee of the Computer Museum in Boston, Massachusetts since 1988. Mr. Klein holds a B.S. in Mathematics from St. Vincent's College. Michael Volker has served as one of our directors since July 2001. Mr. Volker has been, since 1996, Director of the Industry Liaison Office, which has primary responsibility for the transfer of technology at Simon Fraser University. From 1996 to 2001, Mr. Volker was Chairman of the Vancouver Enterprise Forum, a non-profit organization dedicated to the development of British Columbia's technology enterprises. From 1991 to 1996, Mr. Volker was Chief Executive Officer and Chairman of the Board of Directors of RDM Corporation, a publicly-listed company Mr. Volker founded in 1987. RDM is a developer of specialized hardware and software products for both Internet electronic commerce and paper payment processing. From 1988 to 1992, Mr. Volker was Executive Director of BC Advances Systems Institute, a hi-tech research institute, and currently continues as a Trustee of BC as well a member of various charitable and educational boards. Prior to 1988, Mr. Volker had been active in various early stage businesses as a founder, investor, director and officer. Mr. Volker holds a Master of Applied Science and a Professional Engineer designation from the University of Waterloo. All executive officers serve at the discretion of the Board of Directors. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, as well as those persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the SEC. These persons are required by SEC rule to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms, or written representations from certain reporting persons that no such forms were required, we believe that during the year ended December 31, 2001, all filing requirements applicable to our officers, directors and greater than 10% owners of our common stock were complied with except that Robert Dilworth was not timely in his filing of one monthly report of one transaction. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth information for the fiscal years ended December 31, 2001, 2000 and 1999 concerning compensation we paid to our Chief 3 Executive Officer and our other executive officers whose total annual salary and bonus exceeded $100,000 for the year ended December 31, 2001.
Long Term Annual Compensation Compensation -------------------- --------------- Number of Shares of Common Stock Name and Principal Fiscal Underlying All Other Position Year Salary Bonus Options Compensation (1) - -------- ---- ------ ----- ------- --------------- Walter Keller (2) 2001 $244,231 - 80,000 - President and Chief 2000 $176,590 $45,940 - $1,000 Executive Officer 1999 $140,000 - 150,000 - Robin Ford (3) 2001 $146,538 - 60,000 - Executive Vice President, 2000 $141,860 $30,625 - $1,000 Marketing and Sales 1999 $130,000 - 150,000 - William Swain (4) 2001 $117,785 - 135,000 $1,000 Chief Financial Officer 2000 $132,100 $28,715 245,000 $1,000 and Secretary 1999 - - - - George Phillips (5) 2001 $258,731 - 15,000 $1,000 Vice President World Wide 2000 $ 47,154 - 125,000 - Sales 1999 - - - - - --------------------------
(1) Company matching contribution to the 401(k) Plan. (2) Our employment of Walter Keller, was terminated by mutual agreement as of January 10, 2002. By agreement dated January 28, 2002, we paid Mr. Keller the sum of $337,500 in exchange for his release of any and all claims against us, including but not limited to those relating to his employment agreement dated February 7, 2001. (3) Our employment of Robin Ford, Mr. Keller's spouse, was terminated by mutual agreement as of January 10, 2002. By agreement dated January 28, 2002, we paid Ms. Ford the sum of $162,500 in exchange for her release of any and all claims against us, including but not limited to those relating to her employment agreement dated February 7, 2001. (4) Mr. Swain joined our company in March 2000. (5) Mr. Phillips joined our company in October 2000. Option Grants in Last Fiscal Year The following table shows the stock option grants made to the executive officers named in the Summary Compensation Table during the 2001 fiscal year:
Per Cent of Number of Shares of Total Options Per Common Stock Granted to Share Underlying Employees Exercise Expiration Name Options Granted (1) In Fiscal Year Price (2) Date - ---- ------------------ -------------- --------- ---------- Walter Keller 30,000 2.9% $ 1.34 (3) 50,000 4.8% $ 0.91 (3) Robin Ford 30,000 2.9% $ 1.34 (3) 30,000 2.9% $ 0.91 (3) William Swain 135,000 12.9% $ 1.34 01/02/11 4 George Phillips 15,000 1.4% $ 0.94 04/02/11 - -------
(1) Options are immediately exercisable upon issuance to the optionee. (2) Options were granted at an exercise price equal to the fair market value of our common stock, as determined by the closing sales price reported on The Nasdaq Stock Market on the date of grant. (3) Our employment of Mr. Keller and Ms. Ford was terminated by mutual agreement as of January 10, 2002. In accordance with the terms of our 1998 Stock Option/Stock Issuance Plan, granted options are subject to earlier termination following three months after the optionee's cessation of service with us. Fiscal Year-End Option Values The following table shows information with respect to unexercised stock options held by the executive officers named in the Summary Compensation Table as of December 31, 2001. No options held by such individuals were exercised during 2001.
Number of Shares of Common Stock Underlying Value of Unexercised Unexercised Options at In-the-Money Options December 31, 2001 (1) at December 31, 2001 (2) --------------------------- ----------------------------- Name Exercisable Unexercisable Exercisable Unexercisable ---- ----------- ------------- ----------- ------------- Walter Keller 230,000 - - - Robin Ford 210,000 - - - William Swain 380,000 - - - George Phillips 140,000 - - -
(1) Shares issued upon exercise of the options are subject to our repurchase, which right lapses in 33 equal monthly installments beginning three months after the date of the grant. (2) The per share exercise price of each of the unexercised stock options set forth in the table above exceeded $0.66, the fair market value of a share of our common stock as of December 31, 2001. Employment Agreements We entered into employment agreements, dated February 7, 2001, with Mr. Keller and Ms. Ford that provided for a term of two years, annual base salaries of $250,000 and $150,000, respectively, and eligibility to receive bonuses. Our employment of Mr. Keller and Ms. Ford was terminated by mutual agreement as of January 10, 2002. We paid $337,500 and $162,500 to Mr. Keller and Ms. Ford, respectively, in exchange for their release of any and all claims against us, including, but not limited to those relating to their employment agreements. Mr. Keller and Ms. Ford are husband and wife and were the cofounders of our company. 5 Compensation of Directors During the year ended December 31, 2001, directors who were not otherwise our employees were compensated at the rate of $1,000 for attendance at each meeting of our board, $500 for attendance at each meeting of a board committee, and a $1,500 quarterly retainer. Additionally, outside directors are granted stock options periodically, typically on a yearly basis. Compensation Committee Interlocks During the year ended December 31, 2001, the following officer and former officer participated in discussions concerning executive compensation: William Swain and Walter Keller. Each of the named participants recused himself in discussions concerning his own compensation. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT PRINCIPAL STOCKHOLDERS The following table sets forth certain information, as of April 19, 2002, based upon information obtained from the persons named below, with respect to the beneficial ownership of shares of our common stock held by: o each director; o each person known by us to beneficially own 5% or more of our common stock; o each executive officer named in the summary compensation table; and o all directors and executive officers as a group: Unless otherwise indicated, the address for each stockholder is c/o GraphOn Corporation, 11711 SE 8th Street, Suite 215, Bellevue, WA 98005.
Number of Shares of Common Stock Beneficially Name and Address Beneficial Owner Owned (1) Percent of Class - --------------------------------- ---------------- ---------------- Spencer Trask & Co. 1,343,704 (2) 7.6% 535 Madison Avenue, 18th Floor New York, NY 10022 Corel Corporation 1,193,824 (3) 6.9% 1600 Carling Avenue Ottawa, Ontario K1Z 8R7, Canada Walter Keller 627,230 (4) 3.6% Robin Ford 267,712 (5) 1.5% Robert Dilworth 473,820 (6) 2.7% August P. Klein 183,260 (7) 1.1% Michael Volker 110,700 (8) * William Swain 387,000 (9) 2.2% George Phillips 140,000 (10) * All current executive officers and 1,294,780 (11) 7.1% directors as a group (5 persons) - ----------------------------------
* Denotes less than 1%. (1) As used in this table, beneficial ownership means the sole or shared power to vote, or direct the voting of, a security, or the sole or shared power to 6 invest or dispose, or direct the investment or disposition, of a security. Except as otherwise indicated, all persons named herein have sole voting power and investment power with respect to their respective shares of our common stock, except to the extent that authority is shared by spouses under applicable law, and record and beneficial ownership with respect to their respective shares of our common stock. With respect to each stockholder, any shares issuable upon exercise of all options and warrants held by such stockholder that are currently exercisable or will become exercisable within 60 days of April 19, 2002 are deemed outstanding for computing the percentage of the person holding such options, but are not deemed outstanding for computing the percentage of any other person. Percentage ownership of our common stock is based on 17,385,580 shares of our common stock outstanding as of April 19, 2002. (2) Based on information contained in a Schedule 13G filed by Kevin Kimberlin on February 15, 2002, Mr. Kimberlin is the general partner of Kevin Kimberlin Partners LP ("KKP"), and is the controlling stockholder of Spencer Trask & Co. ("STC"), which controls Spencer Trask Ventures, Inc. ("STVI"). Of such amount, KKP holds 815,801 shares of common stock and warrants to purchase 64,269 shares of common stock; STC holds 44,500 shares of common stock and warrants to purchase 216,490 shares of common stock; and STVI holds 184,807 shares of common stock and warrants to purchase 5,576 shares of common stock. Additionally, Mr. Kimberlin holds warrants to purchase 12,261 shares of common stock. (3) Based on information contained in a Schedule 13D filed by Corel Corporation on June 26, 2000. (4) Includes 27,880 shares of common stock issuable upon exercise of outstanding warrants. These shares do not include any shares held by Ms. Ford for which Mr. Keller disclaims beneficial ownership. See footnote 5 below. (5) These shares do not include any shares held by Mr. Keller for which Ms. Ford disclaims beneficial ownership. See footnote 4 above. (6) Includes 360,000 shares of common stock issuable upon the exercise of outstanding options. (7) Includes 32,500 shares of common stock issuable upon exercise of outstanding options. (8) Includes 10,000 shares of common stock issuable upon exercise of outstanding options. (9) Includes 380,000 shares of common stock issuable upon exercise of outstanding options. (10) Reflects 140,000 shares of common stock issuable upon exercise of outstanding options. (11) Includes 922,500 shares of common stock issuable upon exercise of outstanding options. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We entered no related party transactions during the year ended December 31, 2001. 7 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this Amendment to this Report to be signed on its behalf by the undersigned, thereto duly authorized. GRAPHON CORPORATION Dated: April 30, 2002 By: /s/ William Swain ------------------- Chief Financial Officer and Secretary 8 -----END PRIVACY-ENHANCED MESSAGE-----