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]
For the fiscal year ended
............................................................June 30, 1998
[ ] 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 23, 1998
was $10,527,674.
Number of shares outstanding of each class of Common Stock, as of
September 23, 1998: 3,661,221 shares (excluding 404,500 shares of treasury
stock).
DOCUMENTS INCORPORATED BY REFERENCE:
NONE
PART III
Item 10. Directors and Executive Officers of the Company.
The directors and executive officers of the Company, their
ages, their positions and terms of office with the Company are set forth below.
Name Age Title
Joel H. Girsky 59 Chairman of the Board, President, Treasurer, and Director
Charles B. Girsky 64 Executive Vice President and Director
Stephen A. Cohen 61 Director
Edward M. Frankel 60 Director
Joseph F. Hickey, Jr. 40 Director
Jeffrey D. Gash 45 Vice President, Finance
Herbert Entenberg 64 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.
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 employed by Cleary Gull Reiland and McDevitt
Inc., an investment banking firm located in Milwaukee, Wisconsin. Since 1997, he
has been the managing director at Cleary Gull Reiland and McDevitt Inc.
syndication department.
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.
2
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 of the Company, other than the President, whose
aggregate annual salary and bonus for the Company's last fiscal year exceeded
$100,000:
SUMMARY COMPENSATION TABLE
Annual Compensation Awards Payouts
Name and Other
Principal Annual
Position Year Salary($) Bonus($) Compensation($)
- -------- ---- --------- -------- ---------------
Joel H. Girsky, 1996 325,000 387,000 -
Chairman of the Board, 1997 325,000 210,000 -
President, and Treasurer(1) 1998 325,000 81,000 -
Charles B. Girsky, 1996 225,000 96,535 -
Executive Vice President(3) 1997 225,000 73,475 -
1998 225,000 41,000 -
Jeffrey D. Gash, 1996 96,000 42,595 -
Vice President, Finance(4) 1997 104,808 25,000 -
1998 125,000 33,100 -
Herbert Entenberg 1996 102,560 20,188 -
Vice President of 1997 102,560 10,481 -
Management and 1998 109,920 30,694 -
Information Systems,
and Secretary
Long-Term Compensation
Awards Payouts
Name and Restricted All Other
Principal Stock Options/ LTIP Compensation
Position Year Awards($) SARs (#) Payouts($) ($)(2)
- -------- ---- --------- -------- --------------- ---------
Joel H. Girsky, 1996 -- -- -- 84,301
Chairman of the Board, 1997 150,000** 15,399 -- 73,924
President, and Treasurer(1) 1998 -- -- -- 77,196
Charles B. Girsky, 1996 -- 15,000 -- 5,608
Executive Vice President(3) 1997 150,000** 25,000 -- 4,976
1998 -- -- -- 6,719
Jeffrey D. Gash, 1996 -- 5,000 -- 1,841
Vice President, Finance(4) 1997 60,000** 10,000 -- 2,004
1998 -- -- -- 3,920
Herbert Entenberg 1996 -- 2,500 -- 3,197
Vice President of 1997 30,000** 5,000 -- 3,343
Management and 1998 -- -- -- 4,926
Information Systems,
and Secretary
3
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(1) Mr. Joel Girsky entered into a four-year employment agreement with the
Company, effective as of July 1, 1997, to serve as the Company's Chairman
and President. The employment agreement will automatically renew for
additional one year periods on each anniversary date, until such time that
the Company or Mr. Joel Girsky delivers written notice to the other party
not less than 90 days prior to an anniversary date, declining such renewal.
In the event that a notice of non-renewal is delivered by either party, Mr.
Girsky's employment agreement shall continue for a period of three years
following the anniversary date which follows immediately after the date
that such notice is delivered. Pursuant to the agreement, Mr. Joel Girsky
received a base salary of $325,000 for the fiscal year ended June 30, 1998
and shall receive a base salary of $325,000 for each fiscal year ending
June 30, thereafter. In addition, he is entitled to receive a cash bonus
equal to four percent (4%) of the Company's earnings before income taxes
for each fiscal year in which such earnings are in excess of $1,000,000, or
six percent (6%) of the Company's earnings before income taxes for such
fiscal year if such earnings are in excess of $2,500,000 up to a maximum
annual cash bonus of $720,000. If the Company's earnings before income
taxes are in excess of $12,000,000 for any such fiscal year, Mr. Girsky may
also receive common stock options of the Company as negotiated by Mr.
Girsky and the Company at such time. Mr. Girsky or his estate, as the case
may be, is entitled to receive a payment of $1,500,000 if he dies or
becomes permanently disabled during the term of the employment agreement.
The death and disability benefit may be funded by insurance policies
maintained by the Company. In the event of Mr. Girsky's cessation of
employment with the Company, upon his request, the Company is obligated to
transfer such policies 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 shall receive deferred compensation which accrues at the rate of
$50,000 per year, and becomes payable in a lump sum at the later of (i) Mr.
Girsky's attainment of age 60 (which event shall occur in Fiscal 1999), or
(ii) his cessation of employment, with or without cause, at any time. In
the event of a change in control, Mr. Girsky will receive two hundred and
ninety-nine percent of the average of his base salary plus cash bonus for
the previous five years, to the extent that such payment does not equal or
exceed three times Mr. Girsky's base amount, as computed in accordance with
Section 280G(d)(4) of the Internal Revenue Code of 1986. Additionally, upon
a change of control, under certain circumstances, Mr. Girsky's employment
agreement may be assigned by the Company or any such successor or surviving
corporation upon sixty days prior written notice to Mr. Girsky.
(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 1998 for the Named
Executives were as follows: Mr. Joel Girsky -- $19,247, Mr. Charles Girsky
-- $3,574, Mr. Gash -- $2,025 and Mr. Entenberg -- $2,154. 401(k) matching
contributions for Fiscal 1998 for the Named Executives were as follows: Mr.
Joel Girsky -- $1,000, Mr. Charles Girsky -- $1,039, Mr. Gash -- $1,373 and
Mr. Entenberg -- $1,256. Premiums paid on group term life insurance for
Fiscal 1998 for the Named Executives were as follows: Mr. Joel Girsky --
$1,350, Mr. Charles Girsky -- $2,106, Mr. Gash -- $522 and Mr. Entenberg --
$1,516. The taxable portion of split dollar life insurance policies for Mr.
Joel Girsky was $5,599 for Fiscal 1998. $50,000 deferred compensation was
accrued in Fiscal 1998 in connection with Mr. Joel Girsky's employment
agreement with the Company.
4
(3) Mr. Charles Girsky entered into a four-year employment agreement with the
Company, effective as of July 1, 1998, to serve as the Company's Executive
Vice President. The employment agreement will automatically renew for
additional one year periods on each anniversary date, until such time that
the Company or Mr. Charles Girsky delivers written notice to the other
party not less than 90 days prior to an anniversary date, declining such
renewal. In the event that a notice of non-renewal is delivered by either
party, Mr. Girsky's employment agreement shall continue for a period of
three years following the anniversary date which follows immediately after
the date that such notice is delivered. Pursuant to the agreement, Mr.
Girsky will receive a base salary of $225,000 for the fiscal year ending
June 30, 1999, and shall receive a base salary of $225,000 for each fiscal
year ending June 30, thereafter. In addition, he is entitled to receive a
cash bonus equal to two percent (2%) of the Company's earnings before
income taxes for each fiscal year in which such earnings are in excess of
$1,000,000, or three percent (3%) of the Company's earnings before income
taxes for such fiscal year if such earnings exceed $2,500,000 up to a
maximum annual cash bonus of $360,000. If the Company's earnings before
income taxes are in excess of $12,000,000 for any such fiscal year, Mr.
Girsky may receive the number of common stock options of the Company as
shall be negotiated by Mr. Girsky and the Company at that time. Mr. Girsky
or his estate, as the case may be, is entitled to receive a payment of
$1,000,000 if he dies during the term of the employment agreement. The
death benefit may be funded by a 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 is 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 the event of
a change in control, Mr. Girsky will receive two hundred and fifty percent
of the average of his base salary plus cash bonus for the previous five
years, to the extent that such payment does not equal or exceed three times
Mr. Girsky's base amount, as computed in accordance with Section 280G(d)(4)
of the Internal Revenue Code of 1986. Additionally, upon a change of
control, under certain circumstances, Mr. Girsky's employment agreement may
be assigned by the Company or any such successor or surviving corporation
upon sixty days prior written notice to Mr. Girsky.
(4) Mr. Jeffrey D. Gash entered into a four-year employment agreement with the
Company, effective as of July 1, 1998, to serve as the Company's Vice
President of Finance. The employment agreement will automatically renew for
additional one year periods on each anniversary date, until such time that
the Company or Mr. Gash delivers written notice to the other party not less
than 90 days prior to an anniversary date, declining such renewal. In the
event that a notice of non-renewal is delivered by either party, Mr. Gash's
employment agreement shall continue for a period of three years following
the anniversary date which follows immediately after the date that such
notice is delivered. Pursuant to the agreement, Mr. Gash will receive a
base salary of $125,000 for the fiscal year ending June 30, 1999, and shall
receive a base salary of $125,000 for each fiscal year ending June 30,
thereafter. In addition, he is entitled to receive a cash bonus as
determined by the Board of Directors and the President of the Company. Mr.
Gash or his estate, as the case may be, is entitled to receive a payment of
$750,000 if he dies during the term of the employment agreement. The death
benefit may be funded by a life insurance policy maintained by the Company.
In the event of Mr. Gash's cessation of employment with the Company, upon
his request, the Company is obligated to transfer such policy to Mr. Gash.
Thereafter, the Company would have no further liability for the payment of
such benefit or the premiums on such policy. In the event of a change in
control, Mr. Gash will receive two hundred percent of the average of his
base salary plus cash bonus for the previous five years, to the extent that
such payment does not equal or exceed three times Mr Gash's base amount, as
computed in accordance with Section 280G(d)(4) of the Internal Revenue Code
of 1986. Additionally, upon a change of control, under certain
circumstances, Mr. Gash's employment agreement may be assigned by the
Company or any such successor or surviving corporation upon sixty days
prior written notice to Mr. Gash.
5
** On June 9, 1997, the Board of Directors awarded an aggregate of 65,000
shares of Common Stock of the Company under the Restricted Stock Plan to
the Named Executives of the Company as follows: 25,000 shares of Common
Stock to Joel Girsky, 25,000 shares of Common Stock to Charles Girsky,
10,000 shares of Common Stock to Jeffrey Gash and 5,000 shares of Common
Stock to Herbert Entenberg. These grants were subject to the approval of
the Restricted Stock Plan by the Company's shareholders, which approval was
received on December 9, 1997. The awards vest in one-quarter increments
annually. Accordingly, as of June 30, 1998, the following portions of the
aforementioned awards were vested: 6,250 shares of Common Stock awarded to
each of Joel Girsky and Charles Girsky, 2,500 shares of Common Stock
awarded to Jeffrey Gash and 1,250 shares of Common Stock awarded to Herbert
Entenberg. The value of the aggregate restricted stock holdings of these
individuals at June 30, 1998 was as follows: $125,000 for Joel H. Girsky,
$125,000 for Charles B. Girsky, $50,000 for Jeffrey D. Gash and $25,000 for
Herbert Entenberg. These figures are based upon the fair market value per
share of the Common Stock at year end, minus the exercise or base price of
such awards. The closing sale price for the Company's Common Stock as of
June 30, 1998 on the NASDAQ National Market System was $6.00.
The following tables set forth information concerning number and value of
unexercised options held by each of the persons described in the Summary
Compensation Table on page 3 at the end of Fiscal 1998.
AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Value of Unexercised
Shares Number of Unexercised In-the-Money
Acquired Option/SARs at Option/SARs at
on Value FY-End (#) FY-End ($)(1)
---------------------------- --------------------------------
Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
Joel H. Girsky -- -- 96,799 0 92,796 -
Charles B. Girsky -- -- 40,000 0 - -
Jeffrey D. Gash -- -- 19,033 0 4,598 -
Herbert Entenberg -- -- 11,167 0 4,510 -
- -------------------------------
(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, 1998 on the NASDAQ National Market System was $6.00.
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 provided 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. No option may be
granted after January 1, 1998 under the Outside Directors' Plan.
6
Employment Contracts and Termination of Employment
and Change-In-Control Arrangements
The Company's employment agreements with Messrs. Joel Girsky,
Charles Girsky and Jeffrey Gash are 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 4,798 shares of Common Stock, currently exercisable options to
purchase an additional 26,399 shares of Common Stock and options to purchase an
additional 7,500 shares of Common Stock which become exercisable on September
16, 1999. As of December 9, 1997, Mr. Cohen ceased serving as a member of the
Company's Compensation Committee.
Joseph F. Hickey, Jr., a Director of the Company is a managing director at
Cleary Gull Reiland and McDevitt Inc. ("Cleary"). Cleary co-managed the
Company's offering of Common Stock in 1995 and is a market maker of the
Company's Common Stock. Mr. Hickey currently owns 1,000 shares of Common Stock,
currently exercisable options to purchase an additional 12,933 shares of Commmon
Stock, and Cleary owns warrants to acquire 17,500 shares of Common Stock. As of
December 9, 1997, Mr. Hickey became a member of the Company's Compensation
Committee.
7
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 22, 1998 by (i) 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 (iv) all of the Company's Directors and executive
officers, 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 564,139(3) 15.0%
Charles B. Girsky
Executive Vice President and
Director 311,774(4) 8.4%
Stephen A. Cohen
Director 31,197(5) **
Edward M. Frankel
Director 26,39(6) **
Joseph F. Hickey, Jr. 31,433(7) **
Director
Jeffrey D. Gash
Vice President, Finance 29,565(8) **
Herbert Entenberg
Vice President of Management
and Information Systems,
and Secretary 16,167(9) **
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, WI 53202 641,700(10) 17.6%
Advisory Research Inc.
18 North Stetson Street, Suite 5780
Two Prudential Plaza
Chicago, IL 60601 278,900(11) 7.6%
Goldman Sachs Group, LP
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004 275,300(12) 7.5%
Liberty Investment Management, Inc.
2502 Rocky Point Drive, Suite 500
Tampa, Fl 33607 203,300(13) 5.6%
Wellington Management Company, LLP
75 State Street
Boston, MA 02109 359,000(14) 9.8%
All Directors and executive officers
as a group (7 persons) 1,010,674(15) 25.0%
8
- --------
** Less than 1%.
1 Includes shares of Common Stock issuable pursuant to options and warrants
exercisable within sixty (60) days from the date hereof. Also includes
shares of Common Stock awarded under the Restricted Stock Plan.
2 Based upon (i) 3,653,521 shares of Common Stock issued and outstanding
(excluding 412,200 shares of treasury stock), plus, if appropriate, (ii)
the number of 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 and warrants exercisable within sixty
(60) days from the date hereof.
3 Includes 96,799 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Non-Qualified Plan and 25,000
Shares of Common Stock awarded under the Restricted Stock Plan. Does not
include 100,000 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Non-Qualified Plan which are
not exercisable within sixty (60) days from the date hereof.
4 Includes 243,077 shares of Common Stock owned by the Girsky Family Trust,
40,000 shares of Common Stock acquirable pursuant to the exercise of
options granted under the Company's 1993 Non-Qualified Plan and 25,000
shares of Common Stock awarded under the Restricted Stock Plan.
5 Includes 26,399 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Stock Option Plan for Outside
Directors. Does not include 7,500 shares of Common Stock acquirable
pursuant to the exercise of non-qualified stock options granted to Mr.
Cohen by the Company, which are not exercisable within sixty (60) days
hereof.
6 Includes 26,399 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Stock Option Plan for Outside
Directors. Does not include 7,500 shares of Common Stock acquirable
pursuant to the exercise of non-qualified stock options granted to Mr.
Frankel by the Company, which are not exercisable within sixty (60) days
hereof.
7 Includes 2,933 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Stock Option Plan for Outside
Directors and 10,000 shares of Common Stock acquirable pursuant to the
exercise of non-qualified stock options granted to Mr. Hickey by the
Company. Includes 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.
8 Includes 19,000 shares of Common Stock acquirable pursuant to the exercise
of options granted under the Company's 1993 Non-Qualified Plan and 10,000
shares of Common Stock awarded under the Restricted Stock Plan.
9 Consists of 11,167 shares of Common Stock acquirable pursuant to the
exercise of options granted under the Company's Non-Qualified Plan and
5,000 shares of Common Stock awarded under the Restricted Stock Plan.
10 These securities are held in investment advisory accounts of Heartland
Advisors, Inc. Based upon Amendment No. 3 to Schedule 13G filed with the
S.E.C. on February 3, 1998.
11 David B. Heller, President and controlling shareholder of Advisory
Research, Inc., shares power to vote or to direct the vote of, and to
dispose or direct the disposition of these shares. Based upon a Schedule
13G filed with the S.E.C. on February 13, 1998.
9
12 The Goldman Sachs Group, L.P. ("GS Group") is the Parent Holding Company of
Goldman, Sachs & Co. ("Goldman Sachs"). GS Group and Goldman Sachs share
dispositive power as to these shares and share voting power as to 158,800
of these shares. GS Group and Goldman Sachs each expressly disclaim
beneficial ownership of the Common Stock beneficially owned by (i) managed
accounts and (ii) certain investment limited partnerships, of which a
subsidiary of GS Group or Goldman Sachs is the general partner or managing
general partner, to the extent partnership interests in such partnerships
are held by persons other than GS Group, Goldman Sachs or their affiliates.
Based upon a Schedule 13G filed with the S.E.C. on February 17, 1998.
13 Based upon a Schedule 13G filed with the S.E.C. on July 24, 1997.
14 According to the Schedule 13G filed with the SEC on February 10, 1998,
these securities are owned by clients of Wellington Management Company, LLP
("WMC") for which WMC serves as investment advisor. Those clients have the
right to receive, or the power to direct the receipt of, dividends from, or
the proceeds from the sale of, such securities.
15 Includes 250,197 shares of Common Stock acquirable pursuant to the exercise
of options and warrants and 65,000 shares of Common Stock awarded under the
Restricted Stock Plan.
Item 13. Certain Relationships and Related Transactions.
During the fiscal year ended June 30, 1998, 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 Company believes, the
current rental rate is at its fair market value.
10
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act ot 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JACO ELECTRONICS, INC.
By: Jeffrey D. Gash
------------------------------------------------
Jeffrey D. Gash Vice President - Finance
Date: October 28, 1998