-----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, E29FMDMn3ytQ2i8Iq3i2jjrmN3kpnrmogQQppaasZq3T3yFNwDaqRPaUDHZXMj43 l6+7y26rPEEQ5ZVMzrLQlw== 0000052971-97-000002.txt : 19971029 0000052971-97-000002.hdr.sgml : 19971029 ACCESSION NUMBER: 0000052971-97-000002 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971028 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACO ELECTRONICS INC CENTRAL INDEX KEY: 0000052971 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 111978958 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-05896 FILM NUMBER: 97701917 BUSINESS ADDRESS: STREET 1: 145 OSER AVE CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 5162735500 MAIL ADDRESS: STREET 1: 145 OSER AVE CITY: HAUPPAUGE STATE: NY ZIP: 11788 10-K/A 1 JACO ELECTRONICS, INC. AMMENDMENT TO FORM 10-K FORM 10-K/A AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended ...............................................................June 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ____________________ to __________________ Commission File Number 0-5896 JACO ELECTRONICS, INC. (Exact name of registrant as specified in its charter) New York (State or other jurisdiction of incorporation or organization) 11-1978958 (I.R.S. Employer Identification No.) 145 Oser Avenue, Hauppauge, New York 11788 -------------------------------------------------------------- -------- (Address of principal executive offices) (Zip Code) Company's telephone number, including area code: (516) 273-5500 --------------------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.10 per share (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. [X] The aggregate market value of Common Stock held by non-affiliates of the Company, computed by reference to the closing price on September 22, 1997 was $25,140,827. Number of shares outstanding of each class of Common Stock, as of September 22, 1997: 3,888,221 shares (excluding 87,500 shares of treasury stock). DOCUMENTS INCORPORATED BY REFERENCE: None.
PART III Item 10. Directors and Executive Officers of the Registrant The directors and executive officers of the Company, their ages, and their positions and terms of office with the Company are set forth below. Name Age Title Joel H. Girsky 58 Chairman of the Board, President, Treasurer, and Director Charles B. Girsky 63 Executive Vice President and Director of the Company Stephen A. Cohen 60 Director Edward M. Frankel 59 Director Joseph F. Hickey, Jr 39 Director Jeffrey D. Gash 44 Vice President, Finance of the Company Herbert Entenberg 63 Vice President of Management and Information Systems and Secretary
- --------------- Joel H. Girsky has been a Director and executive officer of the Company since it was founded in 1961. He also is a director of Nastech Pharmaceutical Company, Inc. of Hauppauge, New York, and Frequency Electronics, Inc. of Uniondale, New York. Messrs. Joel H. Girsky and Charles B. Girsky are brothers. Charles B. Girsky became an executive officer of the Company on August 2, 1985 and has been its Executive Vice President since January 1988. Since April, 1984, he has been President of Distel, Inc., a wholly-owned subsidiary of the Company since August, 1985. He was a founder, Director, and the President of the Company from 1961 through January, 1983, and was elected a Director of the Company again in 1986. Messrs. Charles B. Girsky and Joel H. Girsky are brothers. Stephen A. Cohen has been a Director of the Company since 1970. Since August, 1989, he has practiced law as a member of Morrison Cohen Singer & Weinstein, LLP, general counsel to the Company. For more than five years prior thereto, he was engaged in the practice of law as a member of the firm of Friedlander, Gaines, Cohen & Rosenberg, former general counsel to the Company. Edward M. Frankel became a Director of the Company in May, 1984. For more than five years, he has been President of Vitaquest International, Inc., a distributor of vitamins and health and beauty products, and its predecessor entities. Joseph F. Hickey, Jr. became a Director of the Company on May 28, 1997. Since February 1, 1991, he has been a managing director of Cleary Gull Reiland and McDervitt Inc., an investment banking firm located in Milwaukee, Wisconsin. Jeffrey D. Gash became Vice President of Finance of the Company in January, 1989, and was Controller of the Company for more than five years prior thereto. He has also served in similar capacities with the Company's subsidiaries. Herbert Entenberg has served as Vice President of Management and Information Systems and Secretary since 1988. Mr. Entenberg oversees management information systems and operations of the Company and is responsible for developing and implementing the Company's inventory control system. Item 11. Executive Compensation The following table sets forth, for the Company's three most recently ended fiscal years, the compensation paid or accrued to the President of the Company and to the executive officers and a former key employee of the Company, other than the President, whose aggregate annual salary and bonus for the Company's last fiscal year exceeded $100,000:
SUMMARY COMPENSATION TABLE Annual Compensation Name and Other Princpal Annual Position Year Salary($) Bonus($)Compensation($) Joel H. Girsky, 1995 300,000 193,000 -- Chairman of the Board 1996 325,000 387,000 -- President, and Treasurer(1) 1997 325,000 210,000 -- Charles B. Girsky, 1995 206,720 42,073 -- Executive Vice President 1996 225,000 96,535 -- 1997 225,000 73,475 -- Jeffrey D. Gash, 1995 96,347 10,000 -- Vice President, Finance 1996 96,000 42,595 -- 1997 104,808 25,000 -- Herbert Entenberg Vice President of 1995 102,816 16,155 -- Management and 1996 102,560 20,188 -- Information Systems, 1997 102,560 10,481 -- and Secretary Denis Haggerty* 1995 90,348 36,964 -- Vice President, Marketing 1996 90,000 58,389 27,651(3) 1997 71,539 40,510 -- SUMMARY COMPENSATION TABLE Long-Term Compensation Awards Payouts Name and Restricted All Other Principal Stock Options/ LTIP Compensation Position Year Awards($) SARs(#) Payouts($) ($)(2) Joel H. Girsky, 1995 -- -- -- 72,100 Chairman of the Board 1996 -- -- -- 84,301 President, and Treasurer(1) 1997 150,000** 15,399 -- 73,924 Charles B. Girsky, 1995 -- -- -- 3,947 Executive Vice President 1996 -- 15,000 -- 5,608 1997 150,000** 25,000 -- 4,976 Jeffrey D. Gash, 1995 -- -- -- 1,806 Vice President, Finance 1996 -- 5,000 -- 1,841 1997 60,000** 10,000 -- 2,004 Herbert Entenberg Vice President of 1995 -- -- -- 3,538 Management and 1996 -- 2,500 -- 3,197 Information Systems, 1997 30,000** 5,000 -- 3,343 and Secretary Denis Haggerty* 1995 -- -- -- 11,029 Vice President, Marketing 1996 -- 5,000 -- 11,302 1997 -- -- -- 5,881
- ----------------------- (1) Mr. Joel Girsky entered into a four-year employment agreement with the Company, effective as of July 1, 1993, to serve as the Company's Chairman, President and Treasurer. Pursuant to the agreement, Mr. Girsky received a base salary of $250,000 for the fiscal year ended June 30, 1994, $300,000 for the fiscal year ended June 30, 1995, and $325,000 for the fiscal years ended June 30, 1996 and June 30, 1997. In addition, he was entitled to receive a cash bonus equal to four percent (4%) of the Company's earnings before income taxes for each year in which such earnings are in excess of $1,000,000, and six percent (6%) of the Company's earnings before income taxes for each year in which such earnings were in excess of $2,500,000. Mr. Girsky or his estate, as the case may be, was entitled to receive a payment of $500,000 if he dies or becomes permanently disabled during the term of the employment agreement. The death and disability benefit is funded by a "key man" life insurance policy maintained by the Company. In the event of Mr. Girsky's cessation of employment with the Company, upon his request, the Company was obligated to transfer such policy to Mr. Girsky. Thereafter, the Company would have no further liability for the payment of such benefit or the premiums on such policy. In addition, pursuant to the terms of the employment agreement, Mr. Girsky was to receive deferred compensation which accrued at the rate of $50,000 per year, and became payable in a lump sum at the later of (i) Mr. Girsky's attainment of age 60, or (ii) his cessation of employment, with or without cause, by the Company at any time after July 1, 1993. In the event of a change in control resulting in termination of Mr. Girsky's employment, Mr. Girsky would have received between $450,000 and $600,000, depending on the date of termination. Mr. Joel Girsky and the Company intend to enter into a new employment agreement during the fiscal year ending June 30, 1998. (2) Includes auto expenses, 401(k) matching contributions by the Company, premiums paid on group term life insurance, taxable portion of split dollar life insurance policies and deferred compensation accrued in connection with Mr. Joel Girsky's employment agreement with the Company, as described in footnote (1) above. Auto expenses for fiscal 1997 for the Named Executives were as follows: Mr. Joel Girsky -- $16,871, Mr. Charles Girsky -- $3,322, Mr. Gash -- $624, Mr. Entenberg -- $2,154 and Mr. Haggerty -- $4,800. 401(k) matching contributions for fiscal 1997 for the Named Executives were as follows: Mr. Joel Girsky -- $1,000, Mr. Charles Girsky -- $952, Mr. Gash -- $1,298, Mr. Entenberg -- $950 and Mr. Haggerty -- $519. Premiums paid on group term life insurance for fiscal 1997 for the Named Executives were as follows: Mr. Joel Girsky -- $450, Mr. Charles Girsky $702, Mr. Gash -- $82, Mr. Entenberg -- $239 and Mr. Haggerty -- $562. The taxable portion of split dollar life insurance policies for Mr. Joel Girsky was $5,603 for fiscal 1997. $50,000 deferred compensation was accrued in fiscal 1997 in connection with Mr. Joel Girsky's employment agreement with the Company. (3) Includes information regarding value realized (market value on date of exercise less exercise price) on stock options previously granted under the Company's option plans and exercised during fiscal 1996 by Mr. Haggerty. * Effective December 31, 1996, Mr. Haggerty ceased serving as an officer of the Company. ** Subject to approval of the Restricted Stock Plan by the Company's shareholders. Stock Options The following tables set forth information concerning the grant of stock options made during Fiscal 1997 to each of the persons described in the Summary Compensation Table on page 3 and the number and value of unexercised options held by them at the fiscal year-end.
OPTION/SAR GRANTS IN LAST FISCAL YEAR Individual Grants(1) Percent of Potential Realizable Value Total at Assumed Annual Rates Options/SAR's of Stock Price Appreciation Options/ Granted to For Option Term (2) SARs Employees Exercise or Granted in Fiscal Base Price Expiration Name (#) Year ($/Sh) Date 5%($) 10%($) ----------------------------------------------------------------------------------------------------------------- Joel H. Girsky 15,399 11% $ 7.00 June 8, 2002 $29,781 $65,809 Charles B. Girsky 25,000 19% $ 7.00 June 8, 2002 $48,349 $106,839 Jeffrey D. Gash 10,000 7% $ 7.00 June 8, 2002 $19,340 $42,739 Herbert Entenberg 5,000 4% $ 7.00 June 8, 2002 $ 9,670 $21,368 Dennis Haggerty* -- -- -- -- -- --
(1) The options in the table were granted on June 9, 1997 under the Company's 1993 Non-Qualified Stock Option Plan and have exercise prices equal to the fair market value of the Common Stock on the date of grant. The options become exercisable one year from the date of grant. (2) The potential realizable value assumes that the stock price increases from the date of grant until the end of the option term (5 years) at the annual rate of 5% and 10%. The assumed annual rates of appreciation are computed in accordance with the rules and regulations of the Securities and Exchange Commission. No assurance can be given that the annual rates of appreciation assumed for the purposes of the table will be achieved, and actual results may be lower or higher. * Effective December 31, 1996, Mr. Haggerty ceased serving as an officer of the Company.
AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES Value of Unexercised Shares Number of Unexercised In-the-Money Acquired Option/SARs at Option/SARs at on Value FY-End (#) FY-End ($)(1) Exercise(#) Realized($) -------------------------- ---------------------- Exercisable Unexercisable Exercisable Unexercisable Joel H. Girsky -- -- 81,400 15,399 189,662 2,926 Charles B. Girsky -- -- 15,000 25,000 -- 4,750 Jeffrey D. Gash -- -- 9,033 10,000 9,397 1,900 Herbert Entenberg -- -- 6,167 5,000 8,874 950 Dennis Haggerty* -- -- 5,000 -- -- --
- -------------------------------- (1) Based on the fair market value per share of the Common Stock at year end, minus the exercise or base price on "in-the-money" options. The closing sale price for the Company's Common Stock as of June 30, 1997 on the NASDAQ National Market System was $7.19. * Effective December 31, 1996, Mr. Haggerty ceased serving as an officer of the Company. Compensation of Directors Pursuant to the Company's 1993 Stock Option Plan for Outside Directors (the "Outside Directors Plan"), the Company's outside directors (directors who are not employees of the Company) were each granted options on December 31, 1993 to purchase 14,667 shares of Common Stock. In addition, the Outside Directors Plan provides that each outside director shall also be granted on each December 31 subsequent to December 31, 1993 stock options to purchase 2,933 shares of Common Stock. All options granted under the Outside Directors' Plan are immediately exercisable, and the exercise price per share of each option is equal to the fair market value of the shares of Common Stock on the date of grant. Employment Contracts and Termination of Employment and Change-In-Control Arrangements The Company's employment agreement with Mr. Joel Girsky is described in the footnotes to the Summary Compensation Table on page 3 of this Form 10-K/A, Amendment No.1. Compensation Committee Interlocks and Insider Participation Stephen A. Cohen, a Director of the Company, is a member of Morrison Cohen Singer & Weinstein, LLP, general counsel to the Company. Mr. Cohen currently owns 4,789 shares of Common Stock and options to purchase an additional 23,466 shares of Common Stock. Mr. Cohen is one of the two members of the Company's Compensation Committee, the committee responsible for determining and administering the Company's compensation policies for the remuneration of the Company's senior management. Item 12. Security Ownership of Certain Beneficial Owners and Management The following table sets forth the number and percentage of shares of Common Stock owned as of October 14, 1997; (i) by each director of the Company, (ii) all persons who, to the knowledge of the Company, are the beneficial owners of more than 5% of the outstanding shares of Common Stock, (iii) each of the executive officers and a former key employee named in the Summary Compensation Table, and (iv) all of the Company's directors, executive officers and such former key employee, as a group. Each person named in the table has sole investment power and sole voting power with respect to the shares of Common Stock set forth opposite such person's name, except as otherwise indicated.
Percentage of Number of Shares Common Stock Name of Beneficial Owner Beneficially Owned(1) Outstanding(2) - ------------------------- --------------------- --------------- Joel H. Girsky President, Treasurer and Director 547,540(3) 13.6% Charles B. Girsky Executive Vice President and Director of the Company 287,274(4) 7.2% Stephen A. Cohen Director 28,255(5) ** Edward M. Frankel Director 23,466(5) ** Joseph F. Hickey, Jr 18,500(6) ** Director Jeffrey D. Gash Vice President, Finance 19,565(7) ** Herbert Entenberg Vice President of Management and Information Systems, and Secretary 11,167(8) ** Denis Haggerty Vice President of Marketing 5,000(9) ** T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, MD 21202 350,000(10) 9.0% Heartland Advisors, Inc. 790 North Milwaukee Street Milwaukee, WI 53202 590,700(11) 15.2% Liberty Investment Management, Inc. 2502 Rocky Point Drive, Suite 500 Tampa, Fl 33607 203,300(12) 5.2% State Retirement and Pension System of Maryland 301 West Preston Street, Room 901A Baltimore, MD 21201 195,000(13) 5.0% Wellington Trust Company, NA 75 State Street Boston, MA 02109 195,000(14) 5.0% Wellington Management Company, LLP 75 State Street Boston, MA 02109 384,000(15) 9.9% All Directors, executive officers and former key employee as a group (9 persons) 940,767(16) 22.8%
- -------- ** Less than 1%. 1 Includes shares of Common Stock issuable pursuant to options exercisable within sixty (60) days from the date hereof. Also includes shares of Common Stock awarded under the Jaco Electronics, Inc. Restricted Stock Plan ("Restricted Stock Plan") which are subject to approval of the Restricted Stock Plan by the Company's shareholders. 2 Based upon (i) 3,888,221 shares of Common Stock issued and outstanding (excluding 87,500 shares of treasury stock), plus, if appropriate, (ii) 65,000 shares of Common Stock awarded under the Restricted Stock Plan, and/or (iii) the number of shares of Common Stock which may be acquired by the named person or by all persons included in the group pursuant to the exercise of options exercisable within sixty (60) days from the date hereof. 3 Includes 81,400 shares of Common Stock acquirable pursuant to the exercise of options granted under the Company's 1993 Non-Qualified Stock Option Plan and 25,000 shares of Common Stock awarded under the Restricted Stock Plan (which are subject to approval of the Restricted Stock Plan by the Company's shareholders). 4 Includes 243,577 shares of Common Stock owned by the Girsky Family Trust, 15,000 shares of Common Stock acquirable under the exercise of options granted under the Company's 1993 Non-Qualified Stock Option Plan and 25,000 shares of Common Stock awarded under the Restricted Stock Plan (which are subject to approval of the Restricted Stock Plan by the Company's shareholders). 5 Includes 23,466 shares of Common Stock acquirable pursuant to the exercise of options granted under the Company's 1993 Stock Option Plan For Outside Directors. 6 Includes 1,000 shares of Common Stock and 17,500 shares of Common Stock acquirable by Cleary Gull Reiland and McDevitt Inc. pursuant to warrants granted to it by the Company. The reporting person disclaims beneficial ownership of the shares of Common Stock acquirable upon the exercise of the warrants, except to the extent of his pecuniary interest therein. 7 Includes of 9,033 shares of Common Stock acquirable pursuant to the exercise of options granted under the Company's 1993 Non-Qualified Stock Option Plan and 10,000 shares of Common Stock awarded under the Restricted Stock Plan (which are subject to approval of the Restricted Stock Plan by the Company's shareholders). 8 Consists of 6,167 shares of Common Stock acquirable pursuant to the exercise of options granted under the Company's 1993 Non-Qualified Stock Option Plan and 5,000 shares of Common Stock awarded under the Restricted Stock Plan (which are subject to approval of the Restricted Stock Plan by the Company's shareholders). 9 Consists of 5,000 shares of Common Stock acquirable pursuant to the exercise of options granted under the Company's 1993 Non-Qualified Stock Option Plan. Effective December 31, 1996, Mr. Haggerty ceased to serve as an officer of the Company. 10 These securities are owned by T. Rowe Price New Horizons Fund, Inc. for which T. Rowe Price Associates, Inc. ("Price Associates") serves as investment advisor. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. Based upon Amendment No. 1 to the Schedule 13G dated February 14, 1997. 11 These securities are held in investment advisory accounts of Heartland Advisors, Inc. Based upon Amendment No. 2 to Schedule 13G dated October 7, 1997. 12 Based upon a Schedule 13G dated February 15, 1997. 13 Based upon a Schedule 13G dated February 11, 1997. 14 Based upon a Schedule 13G dated January 27, 1997. 15 Based upon a Schedule 13G dated January 24, 1997. 16 Includes 181,032 shares of Common Stock acquirable pursuant to the exercise of options and 65,000 shares of Common Stock awarded under the Restricted Stock Plan (which are subject to approval of the Restricted Stock Plan by the Company's shareholders). Item 13. Certain Relationships and Related Transactions During the fiscal year ended June 30, 1997, the Company incurred approximately $602,000 of rental expenses in connection with its main headquarters and centralized inventory distribution facility, located in Hauppauge, New York, which was paid to Bemar Realty Company ("Bemar"), the owner of such premises. Bemar is a partnership consisting of Messrs. Joel Girsky and Charles Girsky, both of whom are officers, directors and principal shareholders of the Company. The lease on the property, which is net of all expenses, including taxes, utilities, insurance, maintenance and repairs was renewed on January 1, 1996 and expires on December 31, 2003. The current rental rate is lower than the rate paid under the prior lease. During Fiscal 1996, Joel H. Girsky, the Chairman, President and Treasurer of the Company, was indebted to the Company under demand loans bearing interest at a rate of 9 3/4% per annum, the greatest amount of which indebtedness was $313,808 during such fiscal year. Such indebtedness was repaid in full on October 27, 1995. In September 1995, the Company's Board of Directors adopted a policy prohibiting the Company from making any loan or advance of money or property to, or guaranteeing the obligation of, any non-employee director of the Company and limiting the Company's ability to make such loans, advances or guarantees to employee directors and executive officers of the Company or its subsidiaries unless a majority of independent disinterested outside directors determine that such loan, advance or guarantee may reasonably be expected to benefit the Company. See also "Executive Compensation -- Compensation Committee Interlocks and Insider Participation." SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JACO ELECTRONICS, INC. Date: October 28, 1997 By: /s/ Jeffrey D. Gash ------------------- Jeffrey D. Gash, Vice President-Finance -----END PRIVACY-ENHANCED MESSAGE-----