10-K405/A 1 visionics020397_10ka.txt VISIONICS CORPORATION FORM 10-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A ANNUAL REPORT (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2001 ------------------------------------------------------- [ ] 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: 0-18856 --------------------------------------------------------- VISIONICS CORPORATION (Exact name of registrant as specified in its charter) Delaware 41-1545069 -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5600 Rowland Road, Minnetonka, Minnesota 55343 (952) 932-0888 --------------------------------------------------- -------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None -------------------- Securities registered pursuant to Section 12(g) of the Act: common stock, $.01 par value -------------------- common stock purchase rights -------------------- 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 filing requirements for the past 90 days. [X] Yes [ ] 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] Indicate the number of shares of each of the issuer's classes of Common Stock, as of the latest practicable date. common stock, $.01 par value December 31, 2001 - 28,799,140 shares ---------------------------- ------------------------------------- (Class) (Outstanding) The aggregate market value of common stock held by non-affiliates as of December 31, 2001: $374,670,520 DOCUMENTS INCORPORATED BY REFERENCE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information regarding the Company's executive officers and members of its Board of Directors. There are no family relationships between any director or officer. Name Age Position ---- --- -------- Joseph J. Atick(1) 37 Chairman, President and Chief Executive Officer C. McKenzie Lewis III(1)(2)(3) 55 Director George Latimer(2)(3) 66 Director John E. Haugo(2)(3) 66 Director John E. Lawler(1)(2)(3) 52 Director Jason Choo 30 Director Robert F. Gallagher 46 Chief Financial Officer (1) Member of Nominating Committee. (2) Member of Compensation and Personnel Committee. (3) Member of Audit Committee. The following discussion sets forth the business experience and background of each of the persons identified above. Joseph J. Atick. Dr. Atick was appointed to the Board of Directors of the Company effective with the merger between Digital Biometrics, Inc. and Visionics Corporation on February 16, 2001 and was appointed Chairman of the Board of Directors of the Company on July 26, 2001. He has served as Chief Executive Officer of the Company since February 16, 2001 and as President of the Company since March 23, 2001. Dr. Atick has served as Chief Executive Officer of Visionics Technology Corporation since 1994. C. McKenzie Lewis III. Mr. Lewis has served as a director of the Company since 1994 and served as Chairman of the Board of Directors of the Company from October 28, 1996 through December 14, 1999. From 1986 to 1996, Mr. Lewis served as Chief Executive Officer and President and a director of Computer Network Technology Corporation, a developer and manufacturer of high performance extended channel networking systems. Mr. Lewis has over 26 years experience in the computer and data communications industry. Mr. Lewis is currently Managing Partner of Sherpa Partners, LLC, a Minnesota-based Venture Capital Fund. George Latimer. Mr. Latimer has served on the Company's Board of Directors since 1990. He is a Distinguished Visiting Professor of Urban Studies at Macalester College, St. Paul, Minnesota. From November 1995 through December 1997, Mr. Latimer served as Chief Executive Officer of the National Equity Fund, a financing syndication for affordable housing in Chicago, Illinois. From July 1993 to November 1995, Mr. Latimer served as Director, Office of Special Actions, U.S. Department of Housing and Urban Development ("HUD"). From February 1993 to July 1993, Mr. Latimer was employed as a consultant to HUD. From 1990 to 1993, Mr. Latimer was Dean of Hamline University School of Law in St. Paul, Minnesota. From 1976 to 1990, Mr. Latimer served as the Mayor of St. Paul, Minnesota. 1 John E. Haugo. Dr. Haugo has served on the Company's Board of Directors since February 1998. Dr. Haugo has served as a director of Pointshare Corporation since August 2000. He was Chairman and Chief Executive Officer of MedServe Link, Inc. from January 1998 to August 2000, at which time it was acquired by Pointshare. Dr. Haugo was Vice President and General Manager of the Serving Software Group Business Unit of HBO and Company from September 1994 to March 1997. From April 1986 until September 1994, prior to its acquisition by HBO, Dr. Haugo was founder, President, Chairman and Chief Executive Officer of Serving Software, Inc. a provider of health care scheduling and resource management systems. From January 1976 to January 1981 he served as Chief Executive Officer of Minnesota Educational Computing Corporation. John E. Lawler. Mr. Lawler has served on the Company's Board of Directors since December 1999. Mr. Lawler has been President of East/West Financial Services, Inc., a diversified financial management and business consulting firm, since November 1987. He is also a co-founder of Sterling Wealth Management, Inc., a registered investment advisor and has served on its Board since October 1999. He currently serves as its Chief Executive Officer and Chairman of the Board. From November 1984 to March 1988, Mr. Lawler served as Executive Vice President of The Kamber Group, a public relations firm in Washington D.C. From March 1982 to October 1984, Mr. Lawler served as a Senior Vice President and Chief Financial Officer with Gray and Company, an advertising, public relations and lobbying firm. From January 1975 to March 1982, Mr. Lawler served as Chief of the Office of Finance of the U.S. House of Representatives in Washington, D.C. Jason Choo. Mr. Choo was appointed to the Board of Directors of the Company effective with the merger on February 16, 2001 having served on the board of Visionics Technology Corporation since 1998. He has served as Managing Director of Lonsdale Group, Ltd., an investment company, since 1998 and has served as Managing Director of EB Holdings Pte Ltd, also a private investment company, for more than five years. In addition, he currently serves as Chairman of iCentric Software Limited, an enterprise software developer based in Singapore. Robert F. Gallagher. Mr. Gallagher serves as the Company's Vice President and Chief Financial Officer, a position he as held since November 2000. From December 1997 to July 2000, Mr. Gallagher was employed with TSI Incorporated as Vice President and Chief Financial Officer. Mr. Gallagher was the Controller of TSI Incorporated for more than five years prior to December 1997. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and officers and the holders of 10 percent or more of the Company's common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of equity securities of the Company. Based on the Company's review of copies of such reports received by it, or written representations from reporting persons, the Company believes that during fiscal year 2001 its directors and executive officers filed all reports on a timely basis. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth certain information concerning compensation paid by the Company for the last three fiscal years to its Chief Executive Officers and each other executive officer whose cash compensation exceeded $100,000 in fiscal year 2001 (collectively, the "Named Officers"). 2 SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS ------ ANNUAL COMPENSATION SECURITIES NAME AND ----------------------- UNDERLYING ALL OTHER PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION ------------------------------------------ ------ ---------- --------- --------- -------------- Joseph J. Atick(1) 2001 $236,776 $ 50,000 -- $ 6,618 (5) President and Chief Executive 2000 201,605 -- -- 6,560 (5) Officer 1999 155,690 10,000 -- 4,182 (5) Robert F. Gallagher (2) 2001 136,044 18,000 75,000 -- Chief Financial Officer James C. Granger(3) 2001 9,167 -- 94,066 (6) Former President and Chief 2000 208,333 -- 100,000 4,998 (7) Executive Officer 1999 197,918 100,000 -- 4,995 (7) John J. Metil(4) 2001 99,791 -- 125,000 130,810 (8) Former President, Chief Executive 2000 178,334 18,500 150,000 4,998 (7) Officer, Executive Vice President 1999 162,917 82,500 -- 5,000 (7) Chief Operating Officer and Chief Financial Officer
------------------------------------------ (1) Mr. Atick served as Chief Executive Officer of the Company since February 16, 2001 and as President since March 23, 2001. (2) Mr. Gallagher has served as Chief Financial Officer since November 6, 2000. (3) Mr. Granger served as President and Chief Executive Officer of the Company from January 1, 1997 through October 18, 2000. (4) Mr. Metil served as Chief Executive Officer of the Company from October 18, 2000 through February 15, 2001. Mr. Metil served as President from October 18, 2000 through March 23, 2001, as Executive Vice President of the Company from November 1, 1998 through October 18, 2000 and as Chief Operating Officer and Chief Financial Officer from April 1, 1997 through October 18, 2000. (5) Represents profit sharing pension amount paid by the Company to the 401(k) plan. (6) Represents $5,249 Company match, paid in shares of the Company's common stock, of employee 401(k) contributions and $88,817 of consulting pay. (7) Represents Company match, paid in shares of the Company's common stock, of employee 401(k) contributions. (8) Represents $5,249 Company match, paid in shares of the Company's common stock, of employee 401(k) contributions and $125,561 of consulting pay. 3 STOCK OPTION GRANTS IN FISCAL YEAR 2001
POTENTIAL REALIZABLE VALUE AT ASSUMED NUMBER OF ANNUAL RATES OF STOCK SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(3) OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ------------------------ NAME GRANTED(1) FISCAL YEAR ($/SHARE)(2) DATE 5% 10% ----------------------- ------------ ----------------- -------------- ----------- ---------- ---------- Robert F. Gallagher 75,000 11% $6.188 11/16/07 $188,935 $440,300 John J. Metil 125,000 19% 6.000 10/31/07 305,325 711,538
------------------------- (1) Subject to acceleration at the discretion of the Compensation Committee or upon the death or disability of the optionee, each option becomes cumulatively exercisable with respect to 33 1/3 percent of the shares covered on each of the first three anniversaries of the grant date. (2) Fair market value per share on the date of grant in accordance with the terms of the stock option plans. (3) The 5 percent and 10 percent assumed rates of appreciation are mandated by the rules of the Securities and Exchange Commission and do not represent the Company's estimate or projection of the future market price of the Company's common stock. AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001 AND FISCAL YEAR END OPTION VALUES
VALUE OF UNEXERCISED NUMBER OF SECURITIES IN-THE-MONEY OPTIONS SHARES UNDERLYING UNEXERCISED AT FISCAL YEAR END(1) ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END ----------------------------- NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---------------------- ------------- ---------- ----------- ------------- ------------ ------------- Robert F. Gallagher -- $ -- -- 75,000 $ -- $ 426,900 James C. Granger 533,330 1,768,185 3 66,667 25 492,000 John J. Metil 85,000 348,288 165,000 225,000 1,513,633 1,473,000
-------------------------- (1) Market value of underlying securities at fiscal year end minus the exercise price TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL ARRANGEMENTS During fiscal 1997, the Board of Directors of the Company adopted a change of control plan for the benefit of executive officers. Upon a change of control of the Company, an executive officer will, upon termination of his employment, be entitled to payment of an amount equal to such officer's base salary immediately prior to the change of control, payable on or before the 30th day following the termination of such officer's employment. An officer is not entitled to such payment if he is offered employment following a change of control by the successor to the Company or its business, provided such employment is comparable to his employment with the Company and is at a base salary level comparable to, or greater than, that paid by the Company. In the event the employment of an officer is not terminated, or such officer is offered employment by the successor and is employed, but such employment is terminated within a period of one year following the change of control, the officer shall be entitled to payment of an amount equal to his base salary, less compensation actually paid during the period in which he was employed by the Company or a successor entity subsequent to the change of control. The change of control payment is limited to an amount not to exceed the safe harbor under Section 280G of the Internal Revenue Code. 4 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of December 31, 2001, the number of shares of the Company's common stock beneficially owned by (i) each person known to be the beneficial owner of five percent or more of the total issued and outstanding shares of the Company's common stock, (ii) each director, (iii) each of the Named Officers appearing in the Summary Compensation Table above and (iv) all officers and directors as a group. Any shares reflected in the following table which are subject to an option or a warrant are deemed to be outstanding for the purpose of computing the percentage of the Company's issued and outstanding common stock owned by the option or warrant holder but are not deemed to be outstanding for the purpose of computing the percentage of the Company's issued and outstanding common stock owned by any other person. Except as otherwise indicated, each beneficial owner has sole voting and investment power over the outstanding shares of which he has beneficial ownership.
Shares Beneficially Owned(1) ------------------------------- Name of Beneficial Owner/Group Number Percent ------------------------------ ------ ------- Lonsdale Group Ltd.(2) 1,036,452 3.6 Jason Choo(2) 2,690 * Joseph J. Atick 1,687,905 5.9 George Latimer(3) 49,452 * John E. Lawler(4) 25,101 * C. McKenzie Lewis III(5) 133,031 * John E. Haugo(6) 78,452 * Robert F. Gallagher(7) 25,364 * All officers and directors as a group of seven persons 3,038,447 10.5 James C. Granger -- -- John J. Metil(8) 62,280 *
* Indicates an amount less than one percent (1) The securities "beneficially owned" by a person are determined in accordance with the definition of "beneficial ownership" set forth in the regulations of the Securities and Exchange Commission and, accordingly, may include securities owned by or for, among others, the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power or has the right to acquire within 60 days. The same shares may be beneficially owned by more than one person. (2) Mr. Choo serves as Managing Director of Lonsdale Group, Ltd. (3) Includes 19,452 shares of common stock beneficially owned by Mr. Latimer and options for the purchase of an aggregate of 30,000 shares of common stock. (4) Includes 6,101 shares of common stock beneficially owned by Mr. Lawler and options for the purchase of an aggregate of 19,000 shares of common stock. (5) Includes 48,031 shares of common stock beneficially owned by Mr. Lewis and options for the purchase of an aggregate of 85,000 shares of common stock. (6) Includes 33,452 shares of common stock beneficially owned by Mr. Haugo and options for the purchase of an aggregate of 45,000 shares of common stock. 5 (7) Includes 364 shares of common stock beneficially owned by Mr. Gallagher and options for the purchase of an aggregate of 25,000 shares of common stock. (8) Consists of 62,280 shares of common stock beneficially owned by Mr. Metil. There are no arrangements known to the Company which at a later date may result in a change in control of the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. 6 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS FORM 10-K/A TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN MINNETONKA, MINNESOTA, ON THIS 28TH DAY OF JANUARY 2002. VISIONICS CORPORATION --------------------- (REGISTRANT) /s/ Robert F. Gallagher ----------------------- Robert F. Gallagher Chief Financial Officer 7