-----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, IeOW1ehDcShaT2KW8+taztaOuIGr3mvoHquOmd0mBebLka8cVVAqZVAiGD3199qU MG+2JQqNIVBbIvmwgGwftQ== 0000067383-98-000005.txt : 19980428 0000067383-98-000005.hdr.sgml : 19980428 ACCESSION NUMBER: 0000067383-98-000005 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980427 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICRO GENERAL CORP CENTRAL INDEX KEY: 0000067383 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 952621545 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-08358 FILM NUMBER: 98601957 BUSINESS ADDRESS: STREET 1: 14711 BENTLEY CIRCLE CITY: TUSTIN STATE: CA ZIP: 92780-7226 BUSINESS PHONE: 714-731-0557 MAIL ADDRESS: STREET 1: 14711 BENTLEY CIRCLE CITY: TUSTIN STATE: CA ZIP: 927807226 FORMER COMPANY: FORMER CONFORMED NAME: MODULEARN INC DATE OF NAME CHANGE: 19810813 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K/A Amendment No. 1 to Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 Commission File No.0-8358 MICRO GENERAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 95-2621545 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 14711 Bentley Circle Tustin, California 92780 (Address of principal executive offices)(Zip Code) Registrant's Telephone Number, Including Area Code: (714) 731-0557 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.05 par value 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 ] As of December 31, 1997, the aggregate market value of the voting stock held by non-affiliates of the registrant was $985,052. As of December 31, 1997, the registrant had 1,949,666 shares of common stock, $.05 par value outstanding. The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the fiscal year ended December 31, 1997, as set forth in the pages attached hereto: Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned thereunto duly authorized. Dated: April 27, 1998 MICRO GENERAL CORPORATION By: /s/ Linda Morton -------------------------- Linda Morton, Corporate Secretary Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ELECTION OF DIRECTORS Proposal 1 As of December 31, 1997, the Company's Board of Directors consisted of Messrs. Cahill, Foley, Olenik, Pickup, Pistilli, and Strunk. Certain information concerning the current Board of Directors is set forth below.
Director Principal Occupation Age -------- -------------------- --- John J. Cahill Independent Consultant 65 William P. Foley, II Chairman of the Board and 53 Chief Executive Officer of Fidelity National Financial, Inc. George E. Olenik President and Chief Executive 66 Officer of Pick Systems Richard H. Pickup Senior Vice President 62 Wedbush Morgan Securities Thomas E. Pistilli President, Chief Executive Officer, 55 Chief Financial Officer and Director of the Company Carl A. Strunk Executive Vice President, 60 Chief Financial Officer of CKE Restaurants, Inc.
JOHN J. CAHILL Mr. Cahill has served as a director of the Company since February 1995. He served as President and CEO of Rockaway Corporation (a New York Stock Exchange company prior to its acquisition by Ascom/Hasler) from 1974 to 1989. On April 1, 1998, Mr. Cahill resigned from the Board of Directors. WILLIAM P. FOLEY, II Mr. Foley has served as a director of the Company since June 1994. He is the Chairman of the Board and Chief Executive Officer of Fidelity National Financial, Inc. and has been since its formation in 1984. He was President of Fidelity National Title Insurance Company ("Fidelity Title") 1984 through December 1994. Mr. Foley is also currently serving as the Chairman of the Board and Chief Executive Officer of CKE Restaurants, Inc., Rally's Hamburgers, Inc., Star Buffet, Inc., GB Foods, and Checkers Drive-In Restaurants Inc. Mr. Foley is also currently serving as a director at Dataworks Corporation. GEORGE E. OLENIK Mr. Olenik has served as a director of the Company since December 1989. Mr. Olenik is currently the CEO of Pick Systems Inc., Irvine, California. Prior to joining Pick Systems Inc. he served as an analyst consultant for Inco Venture Capital Management. He formerly served as President and board member of Micro Five Corp., Costa Mesa, California. RICHARD H. PICKUP Mr. Pickup was appointed to the board in December 1996. Mr. Pickup is currently a Senior Vice President of the New York Stock Exchange Member Firm of Wedbush Morgan Securities. For the past 35 years, he has been involved with major ownership of numerous public companies. THOMAS E. PISTILLI Mr. Pistilli has served as the President, Chief Executive Officer, Chief Financial Officer, and Director since November 1994. Prior to joining the Company Mr. Pistilli served as a management consultant to the Company for approximately two years. Mr. Pistilli is the former President and CEO of International Mailing Systems, Inc. (Ascom/Hasler), Shelton Connecticut, where he served in that capacity for 11 years. Mr. Pistilli, a Certified Public Accountant, was previously employed by KPMG Peat Marwick LLP for 7 years. CARL A. STRUNK Mr. Strunk has served as a director of the Company since June 1994. Since February 1997, Mr. Strunk has been Executive Vice-President and Chief Financial Officer of CKE Restaurants, Inc. Mr. Strunk joined Fidelity National Financial, Inc. In February 1992 as Executive Vice- President. He was named Executive Vice-President and Chief Financial Officer of Fidelity National Financial, Inc. in March 1992 and served in this capacity until September 1997 when he became Executive Vice President-Finance. Prior to his employment with Fidelity National Financial, Inc., Mr. Strunk was President of Land Resources Corporation from 1986 to 1991. Mr. Strunk is a Certified Public Accountant. Structure and Function of the Board of Directors During the last fiscal year, the Company's Board of Directors held a total of 4 regular meetings or otherwise took action by written consent. The Board of Directors has no separate nominating or compensation committees, but does have Audit and Stock Option Committees. The Audit Committee consults with the Company's independent auditors concerning their engagement and audit plan, and thereafter concerning the auditor's report and management letter. The Audit Committee, with the assistance of the independent auditors, also monitors the adequacy of the Company's internal accounting controls. Messrs. Cahill, Foley, Olenik, Pickup and Strunk, none of whom is an employee of the Company, were members of the Audit Committee during fiscal 1997. During the last fiscal year, the Audit Committee held 1 meeting. The Stock Option Committee is appointed by the Board of Directors. During the last fiscal year, five of the directors attended in excess of 75% of each of the meetings of the Board and each committee, if any, of which he was a member. Key Employees In addition to Mr. Pistilli, the Company has 3 additional key employees Robert F. Baker, John J. Horbal and Linda I. Morton. Mr. Baker joined the Company as Vice President of Sales and Marketing in January 1997. Prior to joining the Company, Mr. Baker was a Vice- President with Better Homes and Garden Real Estate since 1989. Before taking the position with Better Homes and Gardens Real Estate, Mr. Baker also served in various senior sales management positions with Ascom/Hasler, Scriptomatic, and Pitney Bowes. Mr. Horbal joined the Company as Vice President-Research & Development in January 1995. In June 1995, Mr. Horbal was named Vice President of Engineering. Prior to joining the Company, Mr. Horbal was with Ascom/Hasler and Better Packages, Shelton, Connecticut, for 25 years serving as Director of Engineering, Director of Research and Development, and Chief Engineer. Ms. Morton was elected Corporate Secretary in June 1991. She joined the Company in September 1983 and has served in various management accounting positions. She is currently serving as Controller of the Company. Item 11. Executive Compensation REPORT OF THE BOARD OF DIRECTORS ON ANNUAL COMPENSATION The Board of Directors is composed of outside directors, with the exception of the CEO, and is responsible for setting and administering the policies which govern both annual compensation and stock ownership programs. The annual compensation programs of the Company are based on performance. Micro General's employee annual compensation is comprised of a base salary coupled with a management bonus and stock options the amounts of which are determined based on the achievement of specific goals. The Company adopted a management bonus plan for fiscal year 1997 which provided for bonuses in the form of cash to be paid to officers and other key employees of the Company based upon the fiscal year 1997 performance of the Company and each participant's individual performance. The Board determined that no management bonuses were to be paid for fiscal 1997. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS Cash Compensation The following table sets forth certain information concerning the cash renumeration paid by the Company to the CEO for services rendered during the three most recent fiscal years. No other executive officers of the Company received cash compensation in excess of $100,000 during fiscal year 1997.
Name and Principal Fiscal Other Position Year Salary Bonuses Compensation Total - ---------------- ------ ---------- ------- ------------ ---------- Thomas E. Pistilli 1997 $ 150,000 -0- $ 7,800 $ 157,800 President & 1996 150,000 -0- 7,800 157,800 Chief Executive 1995 146,539 -0- 7,000 146,539 Officer
- ------------- The Company during 1997 paid fees of $3,000 per meeting to all non- employee directors for attending board meetings. With the first meeting in 1998, fees of $1,500 per meeting will be paid to all non-employee directors for attending board meetings. Stock Performance Pursuant to recent SEC regulations, listed below is the performance of the cumulative total return to shareholders (stock price appreciation) during the previous 5 years in comparison to returns on the NASDAQ Stock market index and Nasdaq Computer Manufacturers Stock index. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS AMONG MICRO GENERAL CORPORATION, NASDAQ STOCK MARKET (U.S. COMPANIES) AND NASDAQ COMPUTER MANUFACTURERS STOCKS [PERFORMANCE GRAPH APPEARS HERE]
NASDAQ Measurment Period MICRO NASDAQ STOCK COMPUTER (Fiscal Year Covered) GENERAL MARKET (U.S. MANUFACTURERS Peer Group CORPORATION COMPANIES) ST0CKS - -------------------- ----------- ------------ ------------- Measurement Pt-12/31/92 $100.0 $100.0 $100.0 FYE 12/31/93 124.4 114.8 94.8 FYE 12/31/94 151.1 112.2 104.1 FYE 12/31/95 106.7 158.6 195.2 FYE 12/31/96 124.4 195.2 220.0 FYE 12/31/97 102.6 239.6 266.3
NOTES: A. The lines represent annual index levels. B. The index level for all series was set to $100.0 on 12/31/92. Stock Option Plans In October 1981, the Company established its Incentive Stock Option Plan (the "ISO Plan"), which was approved by the Company's shareholders at the July 7, 1982 annual meeting of shareholders and amended and restated by the Company's shareholders at the August 23, 1983, May 22, 1986, June 18, 1992 and May 8, 1995 annual meetings of shareholders. The ISO Plan provides for the granting of "incentive stock options" (within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended) to employees of the Company and is administered by the Stock Option Committee (the "Option Committee"), which is appointed by the Board. The purpose of the ISO Plan is to provide employees with additional incentive by offering them a greater interest in the continued success of the Company through increased stock ownership. The 1991 Stock Plan ("1991 Plan")consists of 220,000 authorized shares of Common Stock of the Company and will terminate on October 7, 2001 by its terms and the 1995 Stock Option Plan ("1995 Plan") consists of 200,000 authorized shares of Common Stock of the Company and will terminate on February 9, 2005. Each option terminates on the fifth anniversary of its grant or at such earlier time as the Option Committee may determine. The Option Committee makes recommendations to the Board, for its approval, as to whom options are granted, the number of shares covered by each option, the time or times at which such options are granted and exercisable and the purchase price of Common Stock covered by the option (which is not less than the fair market value of such stock on the date of grant of such option). The option holder must remain in the continuous employ of the Company from the date of the grant to and including the date of exercise or all or a portion of the options granted, and no option is exercisable more than three months after termination of an optionee's employment with the Company unless termination of employment occurs by reason of disability or death. As of March 31, 1998, there were options outstanding under the 1991 and 1995 Plan in respect to an aggregate of 208,000 shares of Common Stock with an average exercise price per share of $1.95 and there were 20 participants in the ISO Plan. STOCK OPTION SUMMARY REPORT Total Number of Common Shares Outstanding at March 31, 1996.......... 1,949,666 Total Number of Common Shares Authorized to be Granted as Options.... 420,000 Percentage of Total Common Shares Outstanding Authorized............. 21.5% Total Number of Options Granted to Date Under Current Authorization.. 208,000 Percentage of Total Authorized....................................... 49.52% Total Number of Options Granted in Fiscal 1997....................... 78,000 Total Number of Options Granted to Thomas Pistilli, CEO in Fiscal 1996 5,000 Percentage of Total Number of Options Granted to CEO in Fiscal 1996... 6.41%
OPTION GRANT TABLE Options Granted in Calendar Year 1997
Potential Realized Value at Assumed Annual Rates of Stock Price Appreciation |---------------Individual Grants-----------------------------| |---for Option Term--| (a) (b) (c) (d) (e) (f) (g) % OF TOTAL EXERCISE OPTIONS OPTIONS GRANTED OR BASE GRANTED(#) TO EMPLOYEES IN PRICE EXPIRATION NAME (A)(B)(C) CALENDAR YEAR ($/SH) DATE 5%($) 10%($) - -------------- ---------- --------------- -------- ---------- -------- --------- T. Pistilli 5,000 6.41% $1.31 8/26/2001 $1.38 $1.44
(A) All shares were granted under the Company's 1991 Incentive Stock Option Plan which is administered by the Company's Stock Option Committee. (B) Options are exercisable starting 12 months after the grant date with 1/3 of the shares covered thereby becoming exercisable at that time and with an additional 1/3 of the option shares becoming exercisable on each successive anniversary date, with full vesting occurring on the occurring on the third anniversary date. Any unaccrued options terminate when the grantee's relationship with the Company is terminated for any reason. (C) The options have an exercise term of 4 years, subject to earlier termination in certain events related to termination of employment. OPTION EXERCISES AND YEAR-END VALUE TABLE Aggregate Option Exercises in CALENDAR Year 1997 and CALENDAR Year-End Option Value
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED SHARES OPTIONS AT IN-THE-MONEY ACQUIRED ON VALUE 12/31/97 OPTIONS AT 12/31/97 EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/ NAME (#) ($)(A) UNEXERCISABLE UNEXERCIABLE - ------------------ ----------- --------- ------------- -------------------- Thomas E. Pistilli -0- -0- 38,000/24,000 ($36,625)/($17,488)
(A) Market Value of shares acquired at exercise date minus the exercise price of options. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT PRINCIPAL HOLDERS OF VOTING SECURITIES The following table sets forth certain information regarding the beneficial ownership of the Company's Common Stock as of March 20, 1998, by (i) each of the current directors of the Company, (ii) by each person known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock, and (iii) all current directors and executive officers of the Company as a group. Except as may be indicated in the footnotes to the table, each of such persons has the sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to applicable community property laws.
Amount and Nature of Percent of Beneficial Outstanding Name and Address Ownership of Common of Beneficial Owner Common Stock (1) Stock (2) - ------------------------- ---------------- ------------- Mr. Thomas E. Pistilli 60,334(1) 3.1 14711 Bentley Circle Tustin, CA 92780 Fidelity National Financial, Inc. 751,216(2)(4) 38.5 3916 State St., 3rd floor Santa Barbara, CA 93105 Mr. William P. Foley, II. 741,216(2)(4) 38.0 3916 State St., 3rd floor Santa Barbara, CA 93105 Mr Carl A. Strunk. 741,216(2)(4) 38.0 3916 State St., 3rd floor Santa Barbara, CA 93105 Richard H. Pickup 325,760(3)(4) 16.7 500 Newport Center Dr #550 Newport Beach, CA 92660 Dito Devcar Corporation 189,500(3) 9.7 3735 Howard Hughes Parkway #200 Las Vegas, NV 89109 Pickup Pension Plan 42,500(3) 2.2 500 Newport Center Dr. #550 Newport Beach, CA 92660 Dito Devcar L.P. 65,000(3) 3.3 3735 Howard Hughes Parkway #200 Las Vegas, NV 89109 John J. Cahill 11,000(5) 0.1 1040 Gulf Blvd. Belleair Shore, FL 33786 George E. Olenik 10,000(6) 0.1 2138 Port Durness Newport Beach, CA 92660 All Officers and Directors 1,414,650(7) 72.6 as a Group (9 persons)
(1) Represents 3,334 shares held of record and the right to acquire 57,000 shares pursuant to presently exercisable options . (2) Represents 731,216 shares held of record by Fidelity National Financial, Inc. Messrs. Foley and Strunk are the Chief Executive Officer and Executive Vice President-Finance respectively of Fidelity National Financial Inc and Messrs. Foley and Strunk each have the right to acquire 10,000 shares pursuant to presently exercisable options. (3) Represents 197,800 shares held of record by Mr. Pickup. Additionally, 114,500 shares held of record by Dito Devcar Corporation, 42,300 shares held by Pickup Pension Plan, and 65,000 shares held by Dito Devcar LLP. Mr. Pickup is affiliated or has direct control of the shares listed. (4) CalWest Service Corporation, a wholly owned subsidiary of Fidelity National Financial, and Dito Caree L.P.,a family charitable remainder trust controlled by Mr. Pickup, have the right, but not the obligation to purchase and/or convert an aggregate of 448,146 and 896,292 shares respectively. This right is defined in a Convertible Note Purchase agreement executed by both parties with the Company. (5) Represents 1,000 shares held of record and the right to acquire 10,000 shares pursuant to presently exercisable options . (6) Represents the right to acquire 10,000 shares pursuant to presently exercisable options . (7) Includes an aggregate of 125,000 shares which are not outstanding but which may be acquired on exercise of options held by officers and directors of the Company. Does not include an aggregate of 59,000 additional shares covered by stock options which are not currently, and within sixty days, will not be exercisable. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Micro General Corporation announced April 3, 1998 that its Board of Directors had approved a plan to acquire ACS Systems, Inc. a subsidiary of Fidelity National Financial, Inc. (NYSE:FNF). The transaction is valued at $6.9 million and will involve the issuance of approximately 4.6 million Micro General common shares, subject to a fairness opinion with respect to the value of such shares. The transaction is also subject to a definitive agreement expected to be signed by early May 1998 and subsequent Micro General shareholder approval. -----END PRIVACY-ENHANCED MESSAGE-----