SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-K/A
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 (FEE REQUIRED) For the fiscal year
ended December 31, 2000
OR
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 1-4324
ANDREA ELECTRONICS CORPORATION
(Exact name of registrant as specified in its charter)
New York 11-0482020
- ------------------------------------------------------------------ ----------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.)
45 Melville Park Road, Melville, New York 11747
- ---------------------------------------------------------------- ------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 631-719-1800
----------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ----------------------------------------------------- ----------------------------------------------------------------
Common Stock, par value $.50 per share American Stock Exchange
Securities registered under Section 12(g) of the Exchange Act: None
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. ( )
As of April 27, 2001, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $25,128,256 (based
on the closing sale price on the American Stock Exchange).
The number of shares outstanding of the registrant's Common Stock as
of April 27, 2001, was 14,774,357.
Item 11 to the Annual Report on Form 10-K of Andrea Electronics
Corporation for the year ended December 31, 2000, as filed with the Securities
and Exchange Commission on March 30, 2001 and as amended on April 2, 2001 and
April 30, 2001, is hereby amended.
ITEM 11. DIRECTOR FEES AND EXECUTIVE COMPENSATION
DIRECTOR FEES
During 2000, directors who are not officers or employees of the Company were
each paid $1,000 for physical attendance at meetings of the Board.
EXECUTIVE COMPENSATION
The following table sets forth information for the last three fiscal years
relating to compensation earned by the Co-Chief Executive Officers and the
other most highly compensated executive officers who received salary and
bonuses over $100,000 during the year ended December 31, 2000.
BONUS ($) STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) (1) (#)
-------------------------------------------- ---------------- --------------- ------------- -- ----------------
John N. Andrea, Co-Chairman and Co-Chief
Executive Officer 2000 207,410 150,000 125,000
1999 208,505 150,000 150,000
1998 203,846 150,000 150,000
Douglas J. Andrea, Co-Chairman and Co-
Chief Executive Officer 2000 206,350 50,000 125,000
1999 208,505 150,000 150,000
1998 203,846 150,000 150,000
Christopher P. Sauvigne, President and Chief
Operating Officer 2000 211,718 75,000 125,000
1999 208,409 75,000 125,000
1998 (2) 19,230 16,849 250,000
Richard A. Maue, Senior Vice President,
Chief Financial Officer and Corporate 2000 145,528 0 70,000
Secretary
1999 (3) 93,815 27,115 25,000
(1) Total bonus received by each of John N. Andrea, Douglas J. Andrea, and
Christopher P. Sauvigne was the minimum bonus payment pursuant to his
employment agreement. See "Employment Agreements and Change in Control
Arrangements."
(2) Christopher P. Sauvigne, age 41, joined the Company on November 20, 1998.
From 1982 until joining the Company, Mr. Sauvigne was employed by Arthur
Andersen LLP, where he served in various capacities, the last of which
was as Partner. See "Employment Agreements and Change in Control
Arrangements" for information regarding Mr. Sauvigne's employment
agreement with the Company.
(3) Richard A. Maue, age 31, joined the Company in April 1997 and served as
Vice President, Controller, Treasurer and Corporate Secretary until
November 4, 1999. Since November 4, 1999, Mr. Maue has served as the
Company's Senior Vice President, Chief Financial Officer and Corporate
Secretary. See "Employment Agreements and Change in Control
Arrangements" for information regarding Mr. Maue's employment
agreement with the Company.
The Company granted stock options covering an aggregate of 445,000 shares of
Common Stock during year 2000 to the named executive officers as indicated in
the above table.
The following table summarizes for each of the named executive officers the
number of shares covered by options granted during 2000, the percent of total
options granted to employees of the Company in 2000, the exercise price of
such options, the expiration date, and the potential realizable value of such
options assuming appreciation rates of 5% and 10% per year through the
expiration date of such options.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual rates of
Stock Price
Appreciation for
Individual Grants (2) Option Term
----------------------------------------------------------------- -----------------------
Percentage
Number of of total
securities options
underlying granted to Exercise
Date of options employees price Expiration
Name grant granted (#) in fiscal year ($/share) Date 5% (1) 10% (1)
- ------------------------ ---------- ------------- -------------- ----------- ------------- ---------- ------------
John N. Andrea 4/17/00 75,000 6.1% $6.875 4/17/10 $ 324,274 $ 822,746
8/1/00 50,000 4.1% $6.00 8/1/10 $ 188,668 $ 478,123
Douglas J. Andrea 4/17/00 75,000 6.1% $6.875 4/17/10 $ 324,274 $ 822,746
8/1/00 50,000 4.1% $6.00 8/1/10 $ 188,688 $ 478,123
Christopher P. Sauvigne 4/17/00 75,000 6.1% $6.875 4/17/10 $ 324,274 $ 822,746
8/1/00 50,000 4.1% $6.00 8/1/10 $ 188,688 $ 478,123
Richard A. Maue 4/17/00 35,000 2.8% $6.875 4/17/10 $ 151,328 $ 383,948
8/1/00 35,000 2.8% $6.00 8/1/10 $ 132,068 $ 334,686
(1) The dollar amounts represent certain assumed rates of appreciation.
Actual gains, if any, on stock option exercises and common stock holdings
are dependent upon future performance of the Company's common stock and
overall stock market conditions. There can be no assurance that the
amounts reflected in this table will be realized.
(2) Of the shares covered by each option granted, none can be purchased
during the first year following the grant; 25% can be purchased after the
first anniversary of the grant; an additional 25% can be purchased after
the second anniversary of the grant; and the remaining 50% can be
purchased after the third anniversary.
The following table summarizes for each of the named executive
officers the number of shares acquired and value realized upon exercise of
options during fiscal 2000 and the aggregate dollar value of in-the-money,
unexercised options at December 31, 2000. None of the named executive officers
exercised or held any SARs during the year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
Number of
Securities Value of
Underlying Unexercisable
Unexercised Options In-the-Money Options
Shares at Fiscal Year End at Fiscal Year End -
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable (6) Unexercisable (1)
- ---------------------------- ------------ --------------- --------------------- -----------------------
John N. Andrea - $ - 362,500 / 312,500 (2) $ - / $ -
Douglas J. Andrea 15,000 $ - 482,500 / 312,500 (3) $ 170,400 / $ -
Christopher P. Sauvigne - $ - 156,250 / 343,750 (4) $ - / $ -
Richard A. Maue - $ - 73,750 / 118,750 (5) $ - / $ -
(1) Values were based on a closing trade price for the Company's Common Stock
on December 29, 2000 of $2.10 per share.
(2) John N. Andrea was granted options to purchase 75,000 shares at a price
of $6.875 on April 14, 2000; and 50,000 shares at a price of $6.00 per
share on August 1, 2000.
(3) Douglas J. Andrea was granted options to purchase 75,000 shares at a
price of $6.875 on April 14, 2000; and 50,000 shares at a price of $6.00
per share on August 1, 2000.
(4) Christopher P. Sauvigne was granted options to purchase 75,000
shares at a price of $6.875 on April 14, 2000; and 50,000 shares at a
price of $6.00 per share on August 1, 2000.
(5) Richard A. Maue was granted options to purchase 35,000 shares at a
price of $6.875 on April 14, 2000; and 35,000 shares at a price of $6.00
per share on August 1, 2000.
(6) Of the shares covered by each option granted, none can be purchased
during the first year following the grant; 25% can be purchased after the
first anniversary of the grant; an additional 25% can be purchased after
the second anniversary of the grant; and the remaining 50% can be
purchased after the third anniversary.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
The Company entered into three-year employment agreements that
commenced on March 26, 2000 with John N. Andrea and Douglas J. Andrea, each as
Co-Chairman and Co-Chief Executive Officers of the Company. Under these
agreements, the annual base salaries of John N. Andrea and Douglas J. Andrea
are $200,000. Each agreement provides for additional short-term incentive
compensation in the form of annual cash bonuses based on the achievement of
performance goals and which shall not be less than $150,000 per annum, and
long-term incentive compensation in the form of cash or equity-based awards.
The Company entered into a two-year employment agreement that commenced on
March 26, 2000 with Richard A. Maue, as Senior Vice President and Chief
Financial Officer of the Company. The agreement provides an annual base salary
of not less than $150,000 per annum, plus additional short-term incentive
compensation in the form of annual cash bonuses, based on the achievement of
performance goals and which shall not be less than $25,000 per annum, and
long-term incentive compensation in the form of cash or equity-based awards.
The Company entered into an employment agreement with Christopher P. Sauvigne,
as President and Chief Operating Officer of the Company, that commenced on
November 20, 1998 and expires on December 31, 2002. The agreement provides an
annual base salary of not less than the greater of (i) $200,000 per annum and
(ii) the higher of the base salaries of the Co-Chief Executive Officers of the
Company, plus additional short-term incentive compensation in the form of
annual cash bonuses, based on the achievement of performance goals and which
shall not be less than $150,000 per annum, and long-term incentive
compensation in the form of cash or equity-based awards.
Under each of the aforementioned agreements, on the occurrence of a Change in
Control (as defined), the Company shall pay the Executive, or in the event of
his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be, a sum equal to the greater of (A) the payments due for the
remaining term of the agreement or (B) the product of (i)five (in the case of
John N. Andrea, Douglas J. Andrea and Christopher P. Sauvigne) and three (in
the case of Richard A. Maue) multiplied by (ii) the Executive's average annual
total compensation for the five (in the case of John N. Andrea, Douglas J.
Andrea and Christopher P. Sauvigne) and three (in the case of Richard A. Maue)
preceding taxable years, or if his employment by the Company is then less than
three years, the Executive's average annual compensation during his employment
by the Company.
In addition, under each of the aforementioned employment agreements, on the
occurrence of a Change in Control, all restrictions on any restricted stock
then held by Executive will lapse immediately, incentive stock options and
stock appreciation rights then held will become immediately exercisable, and
any performance shares or units then held will vest immediately in full, and
the Executive will be entitled to receive benefits due him under or
contributed by the Company on his behalf pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other employee
benefit plan maintained by the Company on his behalf to the extent such
benefits are not otherwise paid to him under a separate provision of the
agreement. If, during the term of the agreement, the Company terminates
Executive's employment other than for Cause (as defined), or Executive resigns
for Good Reason (as defined), the Company shall pay to him the product of (A)
a sum equal to (i) the amount of the remaining salary payments that he would
have earned if he continued his employment with the Company during the
remaining unexpired term of his employment agreement at his base salary at the
date of termination, (ii) the highest amount of bonus and any other
compensation paid to the executive, in any year, during the term of his
employment agreement times the remaining number of years of the agreement and
any fraction thereof and (iii) an amount equal to the highest amount of annual
contributions that were made on Executive' behalf, in any year, to any
employee benefit plans of the Company during the term of the agreement,
multiplied by (B) the remaining number of years of the agreement and any
fraction thereof.
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ANDREA ELECTRONICS CORPORATION
By:/s/ John N. Andrea
-------------------------------------------------
Name: John N. Andrea
Date: April 30, 2001 Title: Co-Chairman & Co-Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons in the capacities and on
the dates indicated.
/s/ John N. Andrea Co-Chairman, Co-Chief Executive April 30, 2001
- -------------------
John N. Andrea Officer and Director
/s/ Douglas J. Andrea Co-Chairman, Co-Chief Executive April 30, 2001
- ----------------------
Douglas J. Andrea Officer and Director
/s/ Christopher P. Sauvigne President and Chief Operating Chief April 30, 2001
- ----------------------------
Christopher P. Sauvigne
/s/ Richard A. Maue Senior Vice President, Chief April 30, 2001
- --------------------
Richard A. Maue Financial and Chief Accounting
Officer
/s/ Gary A. Jones Director April 30, 2001
- ------------------
Gary A. Jones
/s/ Scott Koondel Director April 30, 2001
- -----------------
Scott Koondel
/s/ Paul M. Morris Director April 30, 2001
- -------------------
Paul M. Morris
/s/ Jack Lahav Director April 30, 2001
- --------------
Jack Lahav
/s/ John Larkin Director April 30, 2001
- ---------------
John Larkin