-----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, VrgojyggknvDqfZK9D+lMCvya0FfPTOSN3Tw02HRqIpq7Ysn0tel1turFTLYBYBn F7l0Fgkv1fAHk7yD3dY/Rw== 0000950135-99-000359.txt : 19990129 0000950135-99-000359.hdr.sgml : 19990129 ACCESSION NUMBER: 0000950135-99-000359 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALILEO CORP CENTRAL INDEX KEY: 0000711425 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 042526583 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-11309 FILM NUMBER: 99515473 BUSINESS ADDRESS: STREET 1: PO BOX 550 STREET 2: GALILEO PARK CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083479191 MAIL ADDRESS: STREET 1: GALILEO PARK STREET 2: PO BOX 550 CITY: STURBRIDGE STATE: MA ZIP: 01566 FORMER COMPANY: FORMER CONFORMED NAME: GALILEO ELECTRO OPTICS CORP DATE OF NAME CHANGE: 19920703 10-K/A 1 GALILEO CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended: SEPTEMBER 30, 1998 Commission File Number: 0-11309 GALILEO CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 04-2526583 (State of Incorporation) (IRS Employer Identification No.) GALILEO PARK, P. O. BOX 550, STURBRIDGE, MASSACHUSETTS 01566 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (508) 347-9191 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.01 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 [ ] As of January 26, 1999, 10,082,265 shares of the Registrant's Common Stock were outstanding, and the aggregate market value of such shares held by non-affiliates of the Registrant on such date was $39.0 million. Page 1 of 11 2 This Amendment No. 1 to the Annual Report on Form 10-K has been filed by the Registrant to amend the following sections as described: PART III, Item 10. DIRECTORS OF THE REGISTRANT AND EXECUTIVE OFFICERS OF THE REGISTRANT is replaced with the following: ELECTION OF DIRECTORS The following table indicates the names, experience and length of service of all directors of the Company. Pursuant to the Securities Purchase Agreement between the Company and Andlinger Capital XIII LLC, the Company elected three individuals selected by Andlinger Capital XIII LLC to the Board of Directors and has agreed to nominate three designees (subject to adjustment) of Andlinger Capital XIII LLC for election as directors of the Company as long as Andlinger Capital XIII LLC continues to hold not less than 2,000,000 shares of Common Stock of the Company (subject to certain adjustments). The directors selected by Andlinger Capital XIII LLC are Mr. Andlinger, Mr. Ball and Mr. Magida.
BUSINESS EXPERIENCE DURING PAST FIVE DIRECTOR NAME AND AGE YEARS AND OTHER DIRECTORSHIPS SINCE Gerhard R. Andlinger ........... Chairman and Chief Executive Officer 1999 (68) of Andlinger & Company, Inc., a private investment company. Charles E. Ball ................ Principal of Andlinger & Company, Inc. 1999 (48) and an employee of ANC Management Corp., a management company affiliated with Andlinger & Company. John F. Blais, Jr. ............. President of Optical Filter Corporation, 1998 (60) one of the Company's subsidiaries. Todd F. Davenport .............. President and Founder of Cardiant Medical 1998 (48) Corporation from April, 1995 to the present, and President of St. Jude Medical, Inc., (International Division) from 1992 to 1995. Robert D. Happ ................. Former regional managing partner of 1955 (58) KPMG Peat Marwick LLP, a public accounting firm, from which he retired in 1994. Mr. Happ is also a director of CAI Wireless Systems, Inc., and CS Wireless Systems, Inc., both of which are owners and operators of wireless cable TV systems, and a Trustee of Cambridgeport Mutual Holding Company, a mutual bank holding company. Stephen A. Magida .............. Self-employed attorney since May 1994. Prior 1999 (55) thereto, Mr. Magida had been a partner of Dechert Price & Rhoads, attorneys. W. Kip Speyer .................. President and Chief Executive Officer of the 1998 (50) Company. Mr. Speyer is also President of Leisegang Medical, Inc., one of the Company's subsidiaries.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company's executive officers and directors and persons who own beneficially more than 10% of the Company's Common Stock are required under Section 16(a) of the Securities Exchange Act of 1934 to file reports of ownership and changes in ownership of Company securities with the Securities and Exchange Commission. One report covering the purchase of 2,000 shares of Common Stock by Allen E. Busching was filed after the time such filing was required. 2 3 PART III, Item 11. EXECUTIVE COMPENSATION is replaced with the following: EXECUTIVE COMPENSATION The Compensation Committee Report on Executive Compensation set forth below describes the Company's compensation policies applicable to executive officers and the Committee's basis for Mr. Hanley's compensation as Chief Executive Officer for the fiscal year ended September 30, 1998. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee of the Board of Directors, which consists of the nonemployee directors, determines the compensation of all executive officers of the Company, administers the Company's Stock Option Plan, including the grant of stock options thereunder, and acts on other compensation matters. The Committee reviews the compensation of all executive officers at least once a year. The Company's executive compensation contains the following three elements: base salary, bonus earned under the Company's Variable Pay Plan and periodic stock option grants. In setting base salary compensation for executive officers, the Committee may review publicly available executive compensation surveys of technology oriented manufacturing companies with annual sales comparable to those of the Company. The Committee considers making an adjustment to the base salary of each executive officer based upon the relationship of current compensation to the comparable compensation levels reported in the surveys and a subjective judgement on the officer's performance during the last year. In fiscal year 1998, Mr. Hanley and the other executive officers voluntarily reduced their base salaries by 20%, effective July 27, 1998, in view of the financial performance of the Company. Consequently, Mr. Hanley's base salary was reduced from $220,000 to $176,000. These voluntary salary reductions were accepted by the Compensation Committee. The Variable Pay Plan for executive officers is part of a variable pay plan in effect for all of the Company's employees. Under this plan, executive officers are compensated based on the earnings per share results of the Company versus the earnings per share goal in the Company's Operating Plan for the fiscal year. Specifically, the Chief Executive Officer's variable pay bonus is determined by multiplying his base salary by the following two factors: first, his participation rate percentage, which was 50% of his base salary for 1998, and second, the pay-out percentage, which is determined by a formula specified in the Plan based on the Company's actual earnings per share versus the earnings per share in the Company's Operating Plan for fiscal year 1998. The participation rate times the payout percentage times base compensation equals the Variable Pay Plan bonus. For fiscal year 1998, because the Company did not meet the earnings per share objective contained in its 1998 Operating Plan, Mr. Hanley and the other executive officers did not receive a variable pay bonus. In fiscal year 1998, the Committee granted a stock option to purchase 10,000 shares of Common Stock of the Company to Mr. Riedel. In granting this stock option, the Committee took into account the level of Mr. Riedel's base salary and the number of stock options previously granted to him and currently held by the other officers. The Company has no specific plan or formula for determining the frequency of grants or number of options granted. By the Compensation Committee, William T. Burgin Allen E. Busching Kenneth W. Draeger Robert D. Happ 3 4 SUMMARY COMPENSATION TABLE The following table sets forth certain compensation information for the Chief Executive Officer of the Company and each of the other executive officers of the Company whose salary and bonus exceeded $100,000 for the fiscal year ended September 30, 1998:
LONG-TERM COMPENSATION AWARDS ------------ ANNUAL COMPENSATION SECURITIES ------------------- UNDERLYING ALL OTHER NAME AND SALARY BONUS OPTIONS COMPENSATION(1) PRINCIPAL POSITION YEAR ($) ($) (#) ($) ------------------ ---- ------ ----- ----------- -------------- William T. Hanley ............................ 1998 213,318 -- -- 12,043 President and Chief Executive Officer 1997 189,252 -- 60,000 14,130 1996 180,000 113,400 25,000 13,686 Gregory Riedel(2) ............................ 1998 145,404 -- 10,000 3,679 Vice President, Finance and 1997 118,285 17,000 30,000 2,700 Chief Financial Officer Josef W. Rokus ............................... 1998 116,333 -- -- 12,476 Vice President, Corporate Development 1997 104,619 18,000 10,000 13,821 and Secretary 1996 100,000 37,800 -- 12,051
(1) All Other Compensation in 1998 includes Company matching funds under the Company's 401(k) Plan, vacation and paid absence allowance payouts and the Company portion of split dollar life insurance premiums as follows:
VACATION AND LIFE 401(K) PLAN PAID ABSENCE INSURANCE NAME OF CONTRIBUTIONS ALLOWANCES PREMIUMS OFFICER ($) ($) ($) ------- ------------- ------------ --------- William T. Hanley..................... 3,555 -- 8,487 Gregory Riedel........................ 3,403 -- 276 Josef W. Rokus........................ 2,613 1,385 8,479
(2) Mr. Riedel joined the Company on December 9, 1996. 4 5 OPTION GRANTS IN FISCAL YEAR 1998 The following table sets forth certain information concerning options granted to executive officers of the Company in fiscal year 1998:
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(2) ------------------------------------------------------ ----------------------------------- % OF TOTAL SECURITIES OPTIONS UNDERLYING GRANTED TO EXERCISE OR OPTIONS EMPLOYEES IN BASE PRICE GRANTED(#) FISCAL YEAR ($/SHARE) EXPIRATION 0% 5% 10% Name (1) 1998 DATE ($) ($) ($) ---- ---------- ------------ ----------- ---------- ----- --------- -------- Gregory Riedel........ 10,000 4.7% 4.625 8/06/08 0 29,086(3) 73,711(3)
_______________ (1) One grant of 10,000 shares was made to Mr. Riedel on August 6, 1998. Options become exercisable as to 25% of the shares annually beginning one year after grant. (2) Based upon the last trading price ($3.625) of the Company's Common Stock on September 30, 1998, the dollar amounts under these columns are the result of calculations at the 5% and 10% rates prescribed by the rules of the Securities and Exchange Commission and, therefore, are not intended to forecast possible future appreciation, if any, in the price of the Common Stock. No gain to the optionee is possible without an increase in the price of the Common Stock, which will benefit all shareholders proportionately. (3) In order to realize the potential values set forth in the 5% and 10% columns of this table, the per share price of the Common Stock would be $7.53 and $12.00, or 63% and 159% above the exercise price, respectively. 5 6 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES The following table provides information as to options exercised by each of the named executive officers in fiscal year 1998 and the value of the remaining options held by each such executive officer at year-end, measured using the last trading price ($3.625) of the Company's Common Stock on September 30, 1998:
NO. OF SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED, OPTIONS HELD AT IN-THE-MONEY OPTIONS AT SHARES FISCAL YEAR-END FISCAL YEAR-END ACQUIRED ON VALUE ------------------------------- ---------------------------- EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE NAME (#) ($) (#) (#) ($) ($) ---- ----------- -------- ----------- ------------- ----------- ------------- William T. Hanley........ -- -- 71,250 63,750 -- -- Gregory Riedel........... -- -- 7,500 32,500 -- -- Josef W. Rokus........... -- -- 18,250 8,750 -- --
PENSION PLAN TABLE The following table shows the estimated annual benefits payable under the Company's Pension Plan:
YEARS OF SERVICE ------------------------------------------------------------ REMUNERATION 15 20 25 30 35 ------------ ------- ------- ------- ------- ------- $125,000 ............ $27,300 $36,400 $45,500 $51,750 $58,000 150,000 ............ 33,300 44,400 55,500 63,000 70,500 175,000 ............ 35,700 47,600 59,500 67,500 75,500 200,000 ............ 35,700 47,600 59,500 67,500 75,500 225,000 ............ 35,700 47,600 59,500 67,500 75,500 250,000 ............ 35,700 47,600 59,500 67,500 75,500 300,000 ............ 35,700 47,600 59,500 67,500 75,500 400,000 ............ 35,700 47,600 59,500 67,500 75,500 450,000 ............ 35,700 47,600 59,500 67,500 75,500 500,000 ............ 35,700 47,600 59,500 67,500 75,500
All employees who joined the Company prior to January 1, 1995 and who work at least 1,000 hours per year are eligible for participation in the Company's Pension Plan. Upon retirement at age 65, the Pension Plan will pay an annual pension equal to the sum of (a) 1% of the employee's average total salary during the highest five consecutive years in his last ten years of service multiplied by credited years of service and (b) 6/10 of 1% of such average total compensation in excess of the employee's Social Security-covered compensation multiplied by credited years of service (up to a maximum of 25 years). Only base salary is covered by the Pension Plan. Years of service for the persons named in the Summary Compensation Table above and eligible for participation in the Pension Plan are as follows: Mr. Hanley, 16 and Mr. Rokus, 14. 6 7 OTHER COMPENSATION ARRANGEMENTS Mr. Hanley resigned as President and Chief Executive Officer of the Company on November 18, 1998. Pursuant to a Consulting Agreement dated November 24, 1998 between Mr. Hanley and the Company, Mr. Hanley has agreed to act as a consultant to the Company for a fee of $10,000 per month for a period of twelve months. On January 1, 1999, Mr. Rokus entered into an Employment Agreement with the Company pursuant to which the Company has agreed to pay Mr. Rokus an annual salary of $130,000. The Employment Agreement terminates on December 31, 1999. In the event Mr. Rokus is terminated by the Company without cause prior to such date, the Company has agreed to pay Mr. Rokus his salary through such date. 7 8 PART III, Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT is replaced with the following: SHARE OWNERSHIP The following table sets forth certain information regarding the ownership of the Company's Common Stock as of January 26, 1999 by (i) persons known by the Company to be beneficial owners of more than 5% of its Common Stock, (ii) the directors and nominees for election as directors of the Company, (iii) the executive officers of the Company, and (iv) all executive officers and directors of the Company as a group:
SHARES OF COMMON STOCK BENEFICIALLY OWNED(1) ------------------------ BENEFICIAL OWNER SHARES PERCENT - ---------------- ------------- ------- Andlinger Capital XIII LLC .......................... 4,000,000 (2) 33%(3) 105 Harbor Drive Stamford, Connecticut 06902 Eaton Vance Management .............................. 627,958 (4) 5% 24 Federal Street Boston, Massachusetts 02110 Dimensional Fund Advisors Inc. ...................... 495,200 (4) 5% 1299 Ocean Avenue Santa Monica, California 90401 Gerhard R. Andlinger ................................ 4,000,000 (5) 33%(3) Charles E. Ball ..................................... 4,000,000 (6) 33%(3) John F. Blais, Jr. .................................. 816,652 (4) 8% Todd F. Davenport ................................... -0- 0% William T. Hanley ................................... 105,978 (7) 1% Robert D. Happ ...................................... 13,750 (8) * Stephen A. Magida ................................... 4,023,000 (9) 33%(3) Gregory Riedel ...................................... 15,104(10) * Josef W. Rokus ...................................... 26,943(11) * W. Kip Speyer ....................................... 137,906(12) 1% Stephen P. Todd ..................................... -0- 0% All executive officers and directors ................ 5,018,251(13) 41% as a group (8 persons)
- -------------------------------------------------------------------------------- * Indicates less than 1% 8 9 (1) Unless otherwise indicated, each beneficial owner has sole voting and investment power with respect to the shares listed in the table. (2) Includes 2,000,000 shares Andlinger Capital XIII LLC has the right to acquire upon exercise of a warrant. Mr. John P. Kehoe, with an address at 766 Madison Avenue, New York, New York 10021, may be deemed to have shared voting and dispository power of such shares. Mr. Kehoe disclaims beneficial ownership of such 4,000,000 shares. (3) Based on 12,082,265 shares outstanding, which includes 2,000,000 shares Andlinger Capital XIII LLC has the right to acquire upon exercise of a warrant. (4) Based on information provided by the beneficial owner. (5) Includes 4,000,000 shares (2,000,000 of which may be acquired upon exercise of a warrant) held by Andlinger Capital XIII LLC. Mr. Andlinger shares voting and dispository power for the 4,000,000 shares. (6) Includes 4,000,000 shares (2,000,000 of which may be acquired upon exercise of a warrant) held by Andlinger Capital XIII LLC. Mr. Ball may be deemed to have shared voting and dispository power of such shares. Mr. Ball disclaims beneficial ownership of such 4,000,000 shares. (7) Includes 77,500 shares subject to options granted to Mr. Hanley under the 1981 Employee Stock Option Plan and the 1991 Employee Stock Option Plan and 2,478 shares owned by Mr. Hanley's spouse. Mr. Hanley resigned from the Company on November 18, 1998. (8) Includes 8,750 shares subject to options granted to Mr. Happ under the 1996 Director Stock Option Plan. (9) Includes (a) 23,000 shares held of record by seven irrevocable trusts of which Mr. Magida is sole trustee for the benefit of the family members of Mr. Andlinger; and (b) 4,000,000 shares (2,000,000 of which may be acquired upon exercise of a warrant) held by Andlinger Capital XIII LLC, for which Mr. Magida shares voting and dispository power. (10) Includes 7,500 shares subject to options granted to Mr. Riedel under the 1991 Employee Stock Purchase Plan, 1,604 shares held under the Employee Stock Purchase Plan and 1,000 shares owned by Mr. Riedel's children. Mr. Riedel resigned from the Company on November 2, 1998. (11) Includes 18,250 shares subject to options granted to Mr. Rokus under the 1981 Employee Stock Option Plan and the 1991 Employee Stock Option Plan and 3,893 shares held under the Employee Stock Purchase Plan. (12) Includes 35,000 shares subject to options granted to Mr. Speyer under the 1991 Employee Stock Option Plan. (13) Includes 62,000 shares subject to options granted to officers and directors under the 1981 Employee Stock Option Plan, the 1991 Employee Stock Option Plan and the 1996 Director Stock Option Plan and 2,000,000 shares which may be acquired by Andlinger Capital XIII LLC upon exercise of a warrant. Excludes all shares and options to purchase shares held by Mr. Hanley and Mr. Riedel or their families. 9 10 PART III, Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS is replaced with the following: 1. On November 16, 1998, Mr. Speyer entered into an Employment Agreement with the Company pursuant to which Mr. Speyer agreed to become President and Chief Executive Officer of the Company. The Company has agreed to pay Mr. Speyer an annual salary of $250,000, with the opportunity to receive incentive bonus compensation up to 40% of his salary. The Employment Agreement terminates on September 30, 2001. If the Employment Agreement is terminated by the Company without cause prior to such date, the Company has agreed to pay Mr. Speyer his salary through such date, including the full amount of his bonus if all applicable goals are achieved. 2. OFC, a wholly-owned subsidiary, has sales, marketing, administrative and manufacturing facilities in Natick, Massachusetts and additional manufacturing facilities in Keene, New Hampshire. OFC leases approximately 25,000 square feet of office space from a realty trust of which the sole beneficiary is John F. Blais, Jr., the former majority stockholder of OFC and currently its president and a director of the Company. The lease, which expires in December 2006, provides for monthly payments of $19,500 subject to annual adjustment to reflect changes in the fair market value of the real estate. The Company is responsible for certain insurance, utilities and other operating costs. Rents paid to the realty trust during fiscal 1998 were approximately $179,000. 10 11 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: January 26, 1999 GALILEO CORPORATION /s/ W. Kip Speyer ------------------------------------ W. Kip Speyer, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on January 26, 1999. /s/ W. Kip Speyer ------------------------------------ W. Kip Speyer, President and Chief Executive Officer and Director (Principal Executive Officer) /s/ Stephen P. Todd ------------------------------------ Stephen P. Todd, Interim Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Gerhard R. Andlinger ------------------------------------ Gerhard R. Andlinger Chairman of the Board /s/ Charles E. Ball ------------------------------------ Charles E. Ball Director /s/ John F. Blais, Jr. ------------------------------------ John F. Blais, Jr. Director /s/ Todd F. Davenport ------------------------------------ Todd F. Davenport Director /s/ Robert D. Happ ------------------------------------ Robert D. Happ Director /s/ Stephen A. Magida ------------------------------------ Stephen A. Magida Director 11 -----END PRIVACY-ENHANCED MESSAGE-----