SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-K/A
(Amendment No. 1)
(adding Items 10 -14 and amending Item 15 only)
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2006
OR
|_| 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 0-29359
GOAMERICA, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3693371
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
433 Hackensack Avenue, Hackensack, New Jersey 07601
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 996-1717
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of Each Exchange on Which Registered
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None
- ----------------------------- -----------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
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(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes: |_| No: |X|
Indicate by a check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes: |_| No: |X|
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|
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):
Large Accelerated Filer: |_| Accelerated Filer |_| Non-accelerated filer |X|
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act.)
Yes: |_| No: |X|
The aggregate market value of the voting common equity of the registrant
held by non-affiliates (for this purpose, persons and entities other than
executive officers, directors, and 5% or more shareholders) of the registrant,
as of the last business day of the registrant's most recently completed second
fiscal quarter (June 30, 2006), was $5,907,224.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 24, 2007:
Class Number of Shares
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Common Stock, $0.01 par value 2,462,605
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K (the
"Annual Report") of GoAmerica, Inc. (the "Company" or "GoAmerica") filed on
March 30, 2007 with the Securities and Exchange Commission (the "SEC") is filed
solely for the purpose of including information that was to be incorporated by
reference from the Registrant's definitive proxy statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934. The Company will not file
its proxy statement for its annual meeting of stockholders within 120 days of
its fiscal year ended December 31, 2006 and is therefore amending and restating
in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Annual Report.
In addition, pursuant to Rule 13a-14(a) under the Securities Exchange Act of
1934, we are including with this Amendment No. 1 certain currently dated
certifications. Except as described above, no other amendments are being made to
the Annual Report. This Form 10-K/A does not reflect events occurring after the
March 30, 2007 filing of our Annual Report or modify or update the disclosure
contained in the Annual Report in any way other than as required to reflect the
amendments discussed above and reflected below.
TABLE OF CONTENTS
Item Page
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PART III 10. Directors and Executive Officers of the Registrant............. 1
11. Executive Compensation......................................... 5
12. Security Ownership of Certain Beneficial Owners and
Management................................................ 15
13. Certain Relationships and Related Transactions and Director
Independence.............................................. 16
14. Principal Accountant Fees and Services......................... 17
PART IV 15. Exhibits and Financial Statements.............................. 18
SIGNATURES................................................................... 19
EXHIBIT INDEX................................................................ 20
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PART III
Item 10. Directors and Executive Officers.
Board of Directors
We currently have seven directors. As set forth in our amended and
restated certificate of incorporation, the terms of office of the members of the
Board of Directors are divided into three classes: Class A, whose term will
expire at the 2007 Annual Meeting of Stockholders; Class B, whose term will
expire at the 2008 Annual Meeting of Stockholders; and Class C, whose term will
expire at the 2009 Annual Meeting of Stockholders. The current Class A directors
are Janice Dehesh and Joseph Korb, the current Class B directors are Daniel Luis
and David Lyons, and the current Class C directors are Aaron Dobrinsky, D. Sue
Decker and King Lee. At each annual meeting of stockholders, the successors to
directors whose terms then expire will be elected to serve from the time of
election and qualification until the third annual meeting following election.
Our by-laws permit the Board of Directors to increase or decrease the size of
the Board of Directors. Any additional directorships resulting from an increase
in the number of directors will be distributed among the three classes so that,
as nearly as possible, each class will consist of one-third of the total number
of directors. This classification of the Board of Directors may have the effect
of delaying or preventing changes in control or management of GoAmerica. The
following table provides additional information regarding the members of our
Board of Directors:
Served as a Positions with
Name Age Director Since the Company
- ---- --- -------------- --------------
Aaron Dobrinsky 43 1996 Chairman of the Board
Daniel R. Luis 40 2003 Chief Executive Officer
and Director
D. Sue Decker 49 2006 Director
Janice Dehesh 51 2006 Director
Joseph Korb 55 1996 Director
King Lee 66 2003 Director
David Lyons 57 2004 Director
Aaron Dobrinsky founded GoAmerica in 1996 and has served as our Chairman
of the Board since our inception in 1996. He also served as our President until
November 2000 and our Chief Executive Officer until January 2003. Since 2006, he
has served as President of Dobrinsky Advisors, Inc., a management consulting and
advisory firm providing strategic and operational guidance to start-up and
mid-stage companies in the telecommunications, technology and services
industries. Mr. Dobrinsky was an executive member of the board of directors of
RoomLinX, Inc., a provider of wireless high-speed Internet network solutions to
hotels and
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conference centers, from June 2004 through November 17, 2006, where he also
served as Chief Executive Officer from June 2004 through November 1, 2005.
Daniel R. Luis joined our Board of Directors in January 2003 at the time
he was elected our Chief Executive Officer. He previously served as our
President and Chief Operating Officer from May 2002 until January 2003. Mr. Luis
is also President and Chief Executive Officer of Wynd Communications
Corporation, which became a wholly owned subsidiary of GoAmerica in June 2000.
Mr. Luis joined Wynd in 1994 and has held his current positions with Wynd since
1998.
D. Sue Decker joined our Board of Directors in June 2006 upon the
retirement of Alan Docter from the Company's Board of Directors. Since February
2005, Ms. Decker has served as President of Blue House Consulting, LLC, a firm
providing strategic planning, product and marketing counsel to clients in the
United States and Europe. From 1998 to 2005, Ms. Decker served as General
Manager for AT&T's relay services division, where she was responsible for
managing telecommunication services focused on the deaf and hard of hearing
market, including traditional relay, operator services for deaf consumers,
Internet relay and video relay service. Ms. Decker is also a member of the Board
of Associates at Gallaudet University in Washington, D.C., the world leader in
liberal arts education and career development for deaf and hard of hearing
undergraduate students and internationally recognized for its graduate programs.
Janice Dehesh joined GoAmerica's Board of Directors in September 2006,
upon the retirement of Mark Kristoff from the Company's Board of Directors.
Since 2004, Ms. Dehesh has run her own wireless/telecommunications consulting
firm, Dehesh International. From 1987 to 2004, she served in several executive
roles at QUALCOMM. Most recently, as a Vice President of Business Development,
Ms. Dehesh developed and implemented marketing programs to accelerate the
adoption of QUALCOMM's Code Division Multiple Access (CDMA) products and
services through strategic partnerships on a worldwide basis. Previously, Ms.
Dehesh served as Vice President of Information Technology at QUALCOMM and helped
create the company's worldwide telecommunications and computing infrastructure.
Joseph Korb joined GoAmerica in 1997 as Executive Vice President and has
been a director since October 1996. From May 2002 to March 2004, Mr. Korb served
as our Executive Vice Chairman, having served as our President from November
2000 until May 2002. Mr. Korb is currently a principal in three privately held
companies that specialize in software solutions and services for embedded
systems.
King Lee joined our Board of Directors in January 2003. Mr. Lee currently
serves as the Managing Partner of Resource Capitalists, LLC, a management
consulting firm. During his career he has served as the chief executive officer
of a number of companies, both public and private. Mr. Lee has spent the last
thirteen years investing in turnaround companies, and during that same period
Mr. Lee was also the co-founder of Wynd Communications Corp., which became a
wholly-owned subsidiary of GoAmerica in June 2000. Mr. Lee served on the board
of directors of Wynd Communications Corp. until its acquisition by us. Mr. Lee
also serves on the boards of directors of several privately held companies.
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David Lyons joined our Board of Directors in October 2004. Mr. Lyons is
currently a Principal of Den Ventures, LLC, which provides outsourced business
management services to the medical and communications industries. Mr. Lyons is
also a managing partner of the Nacio Investment Group, LLC, which holds an
interest in Nacio Systems, Inc., a managed hosting company that provides
outsourced infrastructure and communication services for mid-size businesses.
From 1998 to 2000, Mr. Lyons served as Vice President of Acquisitions for
Expanets, Inc., a national provider of converged communications solutions
founded by NorthWestern Corporation that acquired numerous local communications
and data networking companies, as well as Lucent Technology's Growing and
Emerging Markets (GEM) division. Previously, he was Chairman, CEO of Amnex,
Inc., President of Walker Telephone Systems, Inc., and practiced corporate and
securities law with the firm of Certilman Haft in New York City.
Committees and Meetings of the Board
The Board of Directors held 10 meetings during 2006. During this period,
each incumbent member of the Board of Directors attended or participated in at
least 75% of the aggregate of (i) the total number of meetings of the Board of
Directors (held during the period for which such person has been a director) and
(ii) the total number of meetings held by all Committees of the Board on which
each such director served (during the periods such director served). The Board
of Directors has three standing committees: the Audit Committee, the
Compensation Committee and the Nominating Committee.
The Compensation Committee approves salaries and incentive compensation
for our executive officers and key employees, administers and grants awards
under the Company's 1999 Stock Plan and 2005 Equity Compensation Plan and
administers the terms of outstanding options and restricted stock awards. The
Compensation Committee is currently comprised of King Lee (who serves as
Chairman), Jan Dehesh and David Lyons. The Compensation Committee held one
meeting during 2006.
The Audit Committee's responsibilities include: (i) evaluating and the
engagement of the Company's independent auditors; (ii) reviewing and reporting
on the results and scope of their audit findings; (iii) reviewing the Company's
periodic reports filed with the Securities and Exchange Commission; and (iv)
monitoring, on a periodic basis, the internal controls of the Company. The Audit
Committee is currently comprised of King Lee (who serves as Chairman), Sue
Decker and David Lyons. The Audit Committee held four meetings during 2006. The
Company's Board of Directors has determined that King Lee constitutes an "audit
committee financial expert", as such term is defined by the SEC.
The Nominating Committee's responsibilities include recommending to the
Board of Directors qualified individuals to serve on the Company's Board of
Directors. The Nominating Committee will not consider any nominees recommended
by the Company's security holders. The Nominating Committee is currently
comprised of King Lee (who serves as Chairman), Sue Decker and David Lyons. The
Nominating Committee met twice during 2006.
Each of Messrs. Lee and Lyons and Ms. Decker and Ms. Dehesh has been
determined to be "independent" within the meaning of SEC and Nasdaq regulations.
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Executive Officers
The following table identifies the current executive officers of the Company:
Capacities in In Current
Name Age Which Serving Position Since
- ---- --- ------------- --------------
Daniel R. Luis ........... 40 Chief Executive Officer 2003
Donald G. Barnhart (1) ... 50 Chief Financial Officer 2004
Jesse Odom (2) ........... 41 Chief Technology Officer 2000
Wayne D. Smith (3)........ 48 Executive Vice President, 2005
General Counsel and Secretary
- ----------
(1) Donald Barnhart joined GoAmerica in 1999 and became its Vice President and
Controller in 2000. He was appointed Chief Financial Officer in March
2004. Prior to joining GoAmerica, Mr. Barnhart held various finance
positions with Bogen Communications (a telecommunications manufacturer)
and operated his own accounting and consulting firm. Mr. Barnhart is a CPA
in New Jersey.
(2) Jesse Odom joined GoAmerica in 1996 as Vice President of Network
Operations. He was appointed Chief Technology Officer in November 2000.
(3) Wayne Smith joined GoAmerica in May 2002 as Vice President, General
Counsel and was appointed corporate Secretary in November 2003. He was
appointed Executive Vice President, General Counsel and Secretary in March
2005. Prior to joining GoAmerica, Mr. Smith held a variety of legal and
staff positions with Viacom Inc. (a diversified entertainment company)
from 1985 to 2001, most recently serving as Vice President, Corporate
Counsel.
For a description of Mr. Luis's business background, see "Board of
Directors". None of our executive officers is related to any other executive
officer or to any director of the Company. Our executive officers are elected
annually by the Board of Directors and usually serve until their successors are
duly elected and qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our directors, officers, and stockholders who
beneficially own more than 10% of any class of our equity securities registered
pursuant to Section 12 of the Exchange Act, to file initial reports of ownership
and reports of changes in ownership with respect to our equity securities with
the Securities and Exchange Commission. All reporting persons are required to
furnish us with copies of all reports that such reporting persons file with the
SEC pursuant to Section 16(a). Based on our review of the copies of such forms
received by us or written representations from such reporting persons, each such
reporting person filed all of their respective reports pursuant to Section 16(a)
on a timely basis during 2006.
-4-
Code of Ethics
GoAmerica maintains a code of ethics applicable to its directors,
executive officers and other senior financial personnel. A copy of this code of
ethics is posted on our website, accessible at
http://www.goamerica.com/Company_info/ethics_execs.php.
Item 11. Executive Compensation
Compensation Discussion and Analysis
General
During 2006, the SEC substantially revised the disclosures that we are
required to make with respect to executive compensation. As part of the SEC's
revised executive compensation discussion requirements, issuers must provide a
"Compensation Discussion and Analysis" in which issuers explain the material
elements of their compensation of executive officers by describing the
following:
o the objectives of the issuer's compensation programs;
o the conduct that the compensation programs are designed to reward;
o the elements of the compensation program;
o the rationale for each of the elements of the compensation program;
o how the issuer determines the amount (and, where applicable, the
formula) for each element of the compensation program; and
o how each element and the issuer's decisions regarding that element
fit into the issuer's overall compensation objectives and affect
decisions regarding other elements of the compensation program.
Our overall compensation policies are monitored by the Compensation
Committee of our Board of Directors. The duties and responsibilities of the
Compensation Committee, which consists entirely of independent directors of the
Board, are to:
o administer the employee benefit plans of the Company designated for
such administration by the Board;
o establish the compensation of the Company's Chief Executive Officer
(subject to the terms of any existing employment agreement);
o with input from the Company's Chief Executive Officer, establish or
recommend to the Board the compensation of the Company's other
executive officers (subject to the terms of any existing employment
agreements); and
o monitor the Company's overall compensation policies and employment
benefit plans.
-5-
Daniel Luis, our Chief Executive Officer, participates in determinations
regarding the compensation and design of our benefit programs for all employees,
including our other executive officers. However, he does not participate in
determining his own compensation.
Our Compensation Objectives and the Focus of Our Compensation Rewards
We believe that an appropriate compensation program should draw a balance
between providing rewards to executive officers while at the same time
effectively controlling compensation costs. We reward executive officers in
order to attract highly qualified individuals, to retain those individuals in a
highly competitive marketplace for executive talent and to motivate them to
perform in a manner that maximizes our corporate performance.
We view executive compensation as having three key elements:
o a current cash compensation program consisting of salary and cash
bonus incentives;
o long-term equity incentives reflected in grants of stock options
and/or restricted stock awards; and
o other benefits and perquisites.
These programs aim to provide our executives with an overall competitive
compensation package that seeks to align individual performance with our
long-term business objectives.
We annually review our mix of short term performance incentives versus
longer term incentives. We do not have set percentages of short term versus long
term incentives. Instead, we look to provide a reasonable balance of those
incentives.
During 2006 we did not rely upon consultants to set our salaries, to
establish salary ranges or to provide advice regarding other compensation
matters. We compare our salaries and other elements of compensation against the
salaries and other compensation measures of other public companies in our
industry by reviewing the proxy statements of such other companies. However, we
do not prepare formal benchmarking studies.
Specific Elements of Our Compensation Program
We have described below the specific elements of our compensation program
for executive officers.
Salary. We pay salaries to our Named Officers in order to fairly
compensate them for their day-to-day responsibilities in managing our
business. Each of our Named Officers has an employment agreement with the
Company, which is described under "Employment Agreements with Executive
Officers." Each employment agreement provides for a specified increase in
base salary as of the end of the Company's first fiscal quarter for which
the Company reports (or would have been able to report but for
extraordinary charges that are not expected to recur) EBITDA profitability
as determined by the Company's independent auditors.
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Bonus. Bonuses are designed to motivate executives by rewarding
their individual performance and contribution to the Company's financial
performance. None of the Named Officers received a bonus for 2006.
Long-Term Incentive Compensation. We provide long-term incentives to
our executive officers through our 2005 Equity Compensation Plan. We refer
to this as our Stock Option Plan. Our Stock Option Plan permits the grant
of stock options and restricted stock awards. Stock options were
previously granted to our Named Officers. In addition, restricted stock
awards were previously granted to our Named Officers to reward performance
and in accordance with their respective employment agreements. No stock
options or restricted stock awards were granted to the Named Officers in
2006. The Compensation Committee may grant additional stock options or
restricted stock awards to the Named Officers in the future in its
discretion.
Other Elements of Compensation for Executive Officers. In order to
attract and retain qualified executives, we provide executives with
retirement benefits through our 401(k) plan and the use of automobiles.
Details of the values of these benefits and perquisites may be found in
the narratives to the summary compensation table.
Employment Agreements.
See "Employment Agreements with Executive Officers" for a description of
our employment agreements with our executives.
Compliance with Sections 162(m) and 409A of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code denies a deduction to any
publicly held corporation for compensation paid to certain "covered employees"
in a taxable year to the extent that compensation exceeds $1,000,000 for a
covered employee. Certain performance-based compensation that has been approved
by our shareholders is not subject to this limitation. As a result, stock
options granted under our Stock Option Plan are not subject to the limitations
of Section 162(m). However, restricted stock awards under our Stock Option Plan
generally will not be treated as performance-based compensation. Restricted
stock award grants made to date under the Stock Option Plan have not been at
levels that, together with other compensation, approached the $1,000,000 limit.
Also, since we retain discretion over cash bonuses, those bonuses also will not
qualify for the exemption for performance-based compensation. Since none of the
Company's executive officers had compensation in excess of $1,000,000 for 2006,
Section 162(m) was not applicable.
It is also our intention to maintain our executive compensation
arrangements in conformity with the requirements of Section 409A of the Internal
Revenue Code, which imposes certain restrictions on deferred compensation
arrangements. We are in the process of reviewing and modifying, as necessary,
our deferred compensation arrangements since the enactment of Section 409A in
2004 in order to remain compliant with provisional guidance issued by the
Internal Revenue Service under Section 409A.
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Summary of Cash and Certain other Compensation
The following table sets forth, for the year ended December 31, 2006, a
summary of the compensation earned by our Chief Executive Officer, our Chief
Financial Officer and our two other most highly compensated executive officers.
We refer to the executive officers named in this table as the "Named Officers."
None of the Named Officers received a bonus, stock award or stock option grant
during 2006. The Company does not have any pension plan or any deferred
compensation plan.
SUMMARY COMPENSATION TABLE
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All Other
Salary Compensation Total
Name and Principal Position ($) ($) ($)
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Daniel R. Luis...................... 200,000 14,632 214,632
Chief Executive Officer
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Donald G. Barnhart.................. 165,000 14,220 179,220
Chief Financial Officer since March
2004; Principal Accounting Officer
since September 2003
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Jesse Odom......................... 165,000 14,220 179,220
Chief Technology Officer
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Wayne D. Smith..................... 165,000 14,220 179,220
Executive Vice President, General
Counsel and Secretary
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In the table above:
o "all other compensation" includes the following:
o for Mr. Luis: $9,000 for the use of an automobile and a
contribution of $5,632 to the Company's 401(k) Plan on behalf
of Mr. Luis to match a pre-tax elective deferral contribution
(included under "Salary") made by Mr. Luis to that Plan;
o for Mr. Barnhart: $9,000 for the use of an automobile and a
contribution of $5,220 to the Company's 401(k) Plan on behalf
of Mr. Barnhart to
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match a pre-tax elective deferral contribution (included under
"Salary") made by Mr. Barnhart to that Plan;
o for Mr. Odom: $9,000 for the use of an automobile and a
contribution of $5,220 to the Company's 401(k) Plan on behalf
of Mr. Odom to match a pre-tax elective deferral contribution
(included under "Salary") made by Mr. Odom to that Plan;
o for Mr. Smith: $9,000 for the use of an automobile and a
contribution of $5,220 to the Company's 401(k) Plan on behalf
of Mr. Smith to match a pre-tax elective deferral contribution
(included under "Salary") made by Mr. Smith to that Plan;
Grants of Plan Based Awards
None of the Named Officers was granted a stock option or stock award
during 2006.
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Outstanding Equity Awards at December 31, 2006
The following table sets forth, for each of the Named Officers,
information regarding stock options and stock awards outstanding at December 31,
2006. All of the outstanding options held by the Named Officers at December 31,
2006 were exercisable.
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Option Awards Stock Awards
- --------------------------------------------------------------------------------
Market
Number of Number of Value of
Securities Shares or Shares or
Underlying Units of Units of
Unexercised Option Stock Stock That
Options Exercise Option That Have Have Not
(#) Price Expiration Not Vested Vested
Name Exercisable ($) Date (#) ($)
(a) (b) (e) (f) (g) (h)
- --------------------------------------------------------------------------------
1,523 84.00 12/30/2008
1,978 167.20 3/30/2010
625 600.00 11/20/2010
Daniel R. 1,688 151.20 1/16/2012 53,333 435,197
Luis 2,500 43.20 5/28/2012
3,828 23.20 12/15/2012
4,375 16.00 4/6/2014
- --------------------------------------------------------------------------------
150 104.80 8/2/2009
350 401.60 1/5/2010
125 162.48 3/29/2011
Donald G. 94 151.20 1/16/2012 36,667 299,203
Barnhart 250 26.40 7/28/2012
1,016 23.20 12/15/2012
3,422 16.00 4/6/2014
- --------------------------------------------------------------------------------
3,375 104.80 8/2/2009
375 151.20 1/16/2012
Jesse Odom 3,129 23.20 12/15/2012 36,667 299,203
3,422 16.00 4/6/2014
- --------------------------------------------------------------------------------
375 43.20 5/28/2012
Wayne D. 1,094 23.20 12/15/2014 36,667 299,203
Smith 3,047 16.00 4/6/2014
- --------------------------------------------------------------------------------
In the table above, we are disclosing:
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o in column (b), the number of shares of our common stock underlying
unexercised stock options that were exercisable as of December 31,
2006;
o in columns (e) and (f), respectively, the exercise price and
expiration date for each stock option that was outstanding as of
December 31, 2006;
o in column (g), the number of shares of our common stock covered by
stock awards that were not vested as of December 31, 2006; and
o in column (h), the aggregate market value as of December 31, 2006 of
the stock awards referenced in column (g).
In calculating market values in the table above, we have multiplied the
closing market price of our common stock on December 29, 2006, the last trading
day in 2006 - $8.16 - by the applicable number of shares of common stock
underlying the Named Officers' unvested stock awards. One half of the unvested
stock awards in the table above vest on November 8, 2007 and the remaining stock
awards vest on November 8, 2008.
Options Exercised and Stock Awards Vested
None of the Named Officers exercised any stock options during 2006. The
following table sets forth, for each of the Named Officers, information
regarding stock awards that vested during 2006. The phrase "value realized on
vesting" represents the number of shares of common stock set forth in column (d)
multiplied by the market price of our common stock on the date on which the
Named Officer's stock award vested.
-------------------------------------------------------
Stock Awards
-------------------------------------------------------
Value
Realized
Number of on
Shares Vesting
Name Acquired on ($)
(a) Vesting (#)(d) (e)
-------------------------------------------------------
Daniel R. Luis 26,667 85,751
-------------------------------------------------------
Donald G. Barnhart 18,333 58,954
-------------------------------------------------------
Jesse Odom 18,333 58,954
-------------------------------------------------------
Wayne D. Smith 18,333 58,954
-------------------------------------------------------
Employment Agreements with Executive Officers
Mr. Luis is a party to an amended and restated agreement with the Company,
effective as of November 8, 2005, under which he now serves as our Chief
Executive Officer at an initial
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base salary of $200,000. Mr. Barnhart is a party to an amended and restated
agreement with the Company, effective as of November 8, 2005, under which he
serves as the Company's Chief Financial Officer at an initial base salary of
$165,000. Mr. Odom is a party to an amended and restated agreement with the
Company, effective as of November 8, 2005, under which he serves as the
Company's Chief Technology Officer at an initial base salary of $165,000. Mr.
Smith is a party to an agreement with the Company, dated as of November 8, 2005,
under which he serves as the Company's Executive Vice President, General Counsel
and Secretary at an initial salary of $165,000. The Compensation Committee may
award any or all of the Named Executives additional bonus payments or option
grants in its discretion. The current term of each agreement is for two years;
each such agreement provides for an annual salary review and a specified
increase in base salary as of the end of the Company's first fiscal quarter in
2006 or thereafter for which the Company reports (or would have been able to
report but for extraordinary charges that are not expected to recur) EBIDTA
profitability as determined by the Company's independent auditors. In the event
any of Messrs. Luis, Barnhart, Odom or Smith is terminated without cause,
resigns for good reason (including after a change in control) or, in the case of
Mr. Luis, is not reelected to the Company's Board of Directors, he shall be
entitled to receive enhanced severance; specifically, an amount equal to one
year's base salary. In the event of non-renewal of an agreement with a Named
Officer, the Named Officer will be entitled to receive an amount equal to six
months of base salary. Each of Messrs. Luis, Odom, Barnhart and Smith also
receives up to $500 per month in automobile allowances and will be reimbursed
for additional automobile expenses incurred in connection with his duties. Each
employment agreement also contains certain invention assignment and
confidentiality provisions and requires that the Company maintain standard
directors and officers insurance of no less than $10 million.
Compensation of Directors
The following table sets forth certain information regarding the
compensation we paid to our directors, other than Daniel R. Luis, during 2006.
None of the directors received a stock option grant during 2006.
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Fees
Earned or All
Paid in Stock Other
Cash Awards Compensation Total
Name ($) ($) ($) ($)
(a) (b) (c) (g) (j)
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Aaron Dobrinsky 37,000 80,400 3,498 120,898
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D. Sue Decker 10,417 40,200 877 51,494
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Janice Dehesh 833 40,200 516 41,549
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Joseph Korb 26,500 80,400 0 106,900
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King Lee 34,000 80,400 0 114,400
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David Lyons 28,000 50,250 113 78,363
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In the table above:
o when we refer to "Fees Earned or Paid in Cash", we are referring to
all cash fees that we paid or were accrued in 2006, including annual
retainer fees, committee and/or chairmanship fees and meeting fees;
o when we refer to "stock awards," we are referring to the dollar
amount recognized by us for financial statement purposes in
accordance with FAS 123R;
o the aggregate number of option awards outstanding for each director
at December 31, 2006 were: for Mr. Dobrinsky, 8,065; for Ms. Decker,
0; for Ms. Dehesh, 0; for Mr. Korb, 6,828; for Mr. Lee, 4,258; and
for Mr. Lyons, 10,000; and the aggregate number of restricted stock
awards outstanding for each director at December 31, 2006 were: for
Mr. Dobrinsky, 20,000 shares; for Ms. Decker, 10,000 shares; for Ms.
Dehesh, 10,000 shares; for Mr. Korb, 20,000 shares; for Mr. Lee,
20,000 shares and for Mr. Lyons, 12,500 shares; and
o the amounts included as "all other compensation" were paid to
reimburse the respective directors for travel expenses incurred in
connection with their Board service.
Non-employee directors serving on our Board of Directors receive a $5,000
per quarter retainer and per meeting fees of $1,250 for each in-person Board
meeting attended, and $750 for each telephonic Board meeting attended. Each
Committee member receives $500 for each Board Committee meeting attended, except
when a Committee meeting is held reasonably contiguous to a Board meeting. Each
Committee Chairman receives an additional $1,500 per quarter if the Committee
which he or she chairs has met during that quarter. In addition, Aaron Dobrinsky
receives a quarterly fee of $2,500 for serving as our Chairman of the Board.
Each director is reimbursed by us for reasonable expenses they incur in
connection with their participation in our Board meetings.
On November 7, 2006, we granted restricted stock awards covering a total
of 92,500 shares of our Common Stock to non-employee members of our Board of
Directors for serving on our Board (10,000 shares to each of Ms. Decker and Ms.
Dehesh, an aggregate of 20,000 shares to each of Messrs. Dobrinsky, Korb and
Lee, and an aggregate of 12,500 shares to Mr. Lyons). A total of 15,000 of the
restricted stock awards granted to Messrs. Dobrinsky, Korb and Lee vest as
follows: 5,000 shares vested on January 2, 2007, 5,000 shares vest on January 2,
2008 and 5,000 shares vest on January 2, 2009. A total of 5,000 of the
restricted stock awards granted to Messrs. Dobrinsky, Korb and Lee vest as
follows: 1,667 shares vest on January 2, 2008, 1,667 shares vest on January 2,
2009 and 1,666 shares vest on January 2, 2010. A total of 7,500 of the
restricted stock awards granted to Mr. Lyons vest as follows: 2,500 shares
vested on January 2, 2007, 2,500 shares vest on January 2, 2008 and 2,500 shares
vest on January 2, 2009. The
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remaining 5,000 of the restricted stock awards granted to Mr. Lyons vest as
follows: 1,667 shares vest on January 2, 2008, 1,667 shares vest on January 2,
2009 and 1,666 shares vest on January 2, 2010. Ms. Decker's restricted stock
awards vest as follows: 3,333 shares vest on June 1, 2007, 3,333 shares vest on
June 2, 2008 and 3,334 shares vest on June 1, 2009. Ms. Dehesh's restricted
stock awards vest as follows: 3,333 shares vest on September 4, 2007, 3,333
shares vest on September 2, 2008 and 3,334 shares vest on September 1, 2009. We
also granted restricted stock awards covering a total of 30,000 shares of our
Common Stock to two former directors who now serve as consultants to the
Company.
Mr. Dobrinsky is a party to an agreement with the Company, effective as of
May 6, 2002 and amended as of March 10, 2004, under which he now serves as the
Company's Chairman of the Board, receiving director compensation equal to the
Company's independent directors but receiving no salary. Mr. Korb is party to an
agreement with the Company, dated as of March 10, 2004, under which he receives
director compensation equal to the Company's independent directors but receives
no salary. Mr. Dobrinsky is eligible to be a beneficiary of a term life
insurance policy in his name, in the face amount of up to $1.0 million, for
which the Company would pay the premiums.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of King Lee (who serves as
Chairman), Jan Dehesh and David Lyons. None of these individuals is or was at
any time an officer or employee of the Company. During 2006, Messrs. Alan Docter
and Mark Kristoff (both currently retired) also served as members of the
Compensation Committee. Messrs. Docter and Kristoff were never employees or
officers of the Company.
No executive officer of the Company has served as a director or member of
the Compensation Committee (or other committee serving an equivalent purpose) of
any other entity, one of whose executive officers served as a director or member
of the Compensation Committee of the Company. No interlocking relationship
exists between our Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the information
provided under the caption "Compensation Discussion and Analysis" set forth
above. Based on that review and those discussions, the Compensation Committee
recommended to our Board that such "Compensation Discussion and Analysis" be
included in this Annual Report on Form 10-K.
King Lee (Chairperson)
Janice Dehesh
David Lyons
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Item 12. Security Ownership of Certain Beneficial Owners and Management.
Common Stock
The following table sets forth certain information, as of April 1, 2007,
with respect to holdings of the Company's Common Stock by each of the Company's
directors and Named Officers, and all directors and current executive officers
as a group. The Company does not believe that any person beneficially owns more
than 5% of the total number of shares of Common Stock outstanding as of such
date, based on currently available Schedules 13D and 13G filed with the SEC.
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership(1) of Class(2)
- ------------------------ ----------------------- -----------
Directors and Named Executives:
Donald Barnhart............................. 63,213 (3) 2.6
Aaron Dobrinsky............................. 59,390 (4) 2.4
D. Sue Decker............................... 10,000 (5) *
Janice Dehesh............................... 10,000 (6) *
Joseph Korb................................. 31,215 (7) 1.3
King Lee.................................... 24,746 (8) 1.0
Daniel R. Luis.............................. 98,816 (9) 4.0
David Lyons................................. 20,000 (10) *
Jesse Odom.................................. 65,301 (11) 2.7
Wayne D. Smith.............................. 59,641 (12) 2.4
All directors and executive officers as a
group (10 persons).......................... 442,322 (13) 18.0%
- ----------
* Less than one percent.
(1) Except as set forth in the footnotes to this table and subject to
applicable community property law, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by such stockholder.
(2) Applicable percentage of ownership is based on an aggregate of 2,462,605
shares of Common Stock outstanding on April 1, 2007, plus any stock
options and warrants held by each such holder which are exercisable as of
April 1, 2007 or become exercisable within 60 days after such date.
(3) Includes approximately 5,416 shares of Common Stock underlying options
which are exercisable as of April 1, 2007 or become exercisable within 60
days after such date and an aggregate of 36,667 shares subject to
restricted stock awards which had not vested as of April 1, 2007.
(4) Includes five shares held for the benefit of Mr. Dobrinsky's minor
children. Mr. Dobrinsky has voting and dispositive power with respect to
such shares. Also includes 8,065 shares of Common Stock underlying options
which are exercisable as of April 1, 2007 or within 60
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days after such date and an aggregate of 15,000 shares subject to
restricted stock awards which had not vested as of April 1, 2007.
(5) Represents shares of Common Stock subject to restricted stock awards which
had not vested as of April 1, 2007.
(6) Represents shares of Common Stock subject to restricted stock awards which
had not vested as of April 1, 2007.
(7) Includes 6,828 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or become exercisable within 60 days after
such date and an aggregate of 15,000 shares subject to restricted stock
awards which had not vested as of April 1, 2007.
(8) Includes 4,258 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or within 60 days after such date and an
aggregate of 15,000 shares subject to restricted stock awards which had
not vested as of April 1, 2007. Also includes 584 shares held by the Lee
Living Trust, of which Mr. Lee is a co-trustee, but not a beneficiary.
(9) Includes 16,516 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or become exercisable within 60 days after
such date and an aggregate of 53,333 shares subject to restricted stock
awards which had not vested as of April 1, 2007.
(10) Includes 7,500 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or within 60 days after such date and an
aggregate of 10,000 shares subject to restricted stock awards which had
not vested as of April 1, 2007.
(11) Includes 10,301 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or become exercisable within 60 days after
such date and an aggregate of 36,667 shares subject to restricted stock
awards which had not vested as of April 1, 2007.
(12) Includes 4,516 shares of Common Stock underlying options which are
exercisable as of April 1, 2007 or become exercisable within 60 days after
such date and an aggregate of 36,667 shares subject to restricted stock
awards which had not vested as of April 1, 2007.
(13) Includes an aggregate of 63,400 shares of Common Stock underlying options
which are exercisable as of April 1, 2007 or become exercisable within 60
days after such date and an aggregate of 238,334 shares subject to
restricted stock awards which had not vested as of April 1, 2007.
See the Company's Annual Report filed with the Securities and Exchange
Commission on March 30, 2007 for the information required by Item 201(d) of the
SEC's Regulation S-K.
Item 13. Certain Relationships and Related Transactions, and
Director Independence
Each of Messrs. Lee and Lyons and Ms. Decker and Ms. Dehesh has been
determined to be "independent" within the meaning of SEC and Nasdaq regulations.
Accordingly all of the members of the Company's Compensation, Nominating and
Audit Committees are independent.
There have been no related party transactions requiring disclosure under
the SEC's rules since January 1, 2006.
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The Audit Committee of the Board of Directors has adopted written
procedures governing related party transactions. These procedures require the
Audit Committee to review all related party transactions in advance. In general,
the Audit Committee reviews related party transactions on a quarterly basis. By
"related party transaction," we mean a transaction between the Company or any of
its subsidiaries, on the one hand, and an executive officer, director or
immediate family member of an executive officer or a director, on the other
hand.
Item 14. Principal Accountant Fees and Services
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and
the Audit Committee's charter, all audit and audit-related work and all
non-audit work performed by the Company's independent accountants,
WithumSmith+Brown P.C. ("WithumSmith"), is approved in advance by the Audit
Committee, including the proposed fees for such work. The Audit Committee is
informed of each service actually rendered.
Audit Fees. Audit fees billed or expected to be billed to the Company by
WithumSmith for the audit of the financial statements included in the Company's
Annual Reports on Form 10-K, reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-Q and reviews of other regulatory filings
of the Company with the Securities and Exchange Commission, for the years ended
December 31, 2006 and 2005 totaled approximately $133,756 and $132,000,
respectively.
Audit-Related Fees. The Company was billed approximately $530 and $22,000
by WithumSmith for assurance and related services rendered by WithumSmith during
the fiscal years ended December 31, 2006 and 2005, respectively, that are not
reported under the immediately preceding paragraph.
Tax Fees. The Company was billed $0 and $0 by WithumSmith for tax
services, during the fiscal years ended December 31, 2006 and 2005,
respectively.
All Other Fees. The Company was billed $0 and $0 by WithumSmith for the
fiscal years ended December 31, 2006 and 2005 for other services.
Other Matters. The Audit Committee of the Board of Directors has
considered whether the provision of the Audited-Related Fees, Tax Fees and All
Other Fees are compatible with maintaining the independence of the Company's
principal accountant.
Applicable law and regulations provide an exemption that permits certain
services to be provided by the Company's outside auditors even if they are not
pre-approved. The Company has not relied on this exemption at any time since the
Sarbanes-Oxley Act was enacted.
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PART IV
Item 15. Exhibits and Financial Statements.
(a)(3) Exhibits.
31.1 Certification of the Chief Executive Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification of Chief Financial Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
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SIGNATURES
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 the
Registrant's Annual Report on Form 10-K to be signed on its behalf by the
undersigned, thereunto duly authorized this 30th day of April, 2007.
GOAMERICA, INC.
By: /s/ Daniel R. Luis
----------------------------
Daniel R. Luis,
Chief Executive Officer
/s/ Donald G. Barnhart
----------------------------
Donald G. Barnhart,
Chief Financial Officer
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EXHIBIT INDEX
31.1 Certification of the Chief Executive Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification of Chief Financial Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
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