- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-12317
------------------------
[LOGO]
(Exact name of registrant as specified in its charter)
DELAWARE 75-1558550
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5080 SPECTRUM DRIVE,
SUITE 400E,
DALLAS, TEXAS 75248 75248
(Address of principal executive
offices) (Zip Code)
------------------------
Registrant's telephone number, including area code: (214) 386-0020
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- -------------------------------------- ----------------------------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(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 ____
The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing price of the Common Stock on June 8, 1995 as
reported by the National Market Segment of the Nasdaq Stock Market, was
approximately $127,813,738. Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding Common Stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
The number of outstanding shares of the registrant's Common Stock on June 8,
1995 was 14,428,812.
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. / /
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART III
Part III is amended and restated in its entirety to reflect the following:
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
REGISTRANT
The table below sets forth information about each director of the Company:
NAME AGE POSITION WITH THE COMPANY
- -------------------------------- --- ----------------------------------------------------------------
Michael H. Anderson............. 56 Chairman of the Board of Directors, President and Chief
Executive Officer
William H. Dougherty............ 64 Director
Carol F. Dressler............... 49 Director
William O. Hunt................. 61 Vice Chairman of the Board of Directors
Paul J. Palmer.................. 63 Director
Mr. Anderson has been Chairman of the Board, President and Chief Executive
Officer of Hogan since August 1993. He was president and chief executive officer
of Hogan from June 1992 to August 1993. Prior to joining Hogan, Mr. Anderson
served as executive vice president of NEC Technologies, Inc. (March 1989 to
February 1992) and president of Nixdorf Computer Corp. (February 1982 to March
1989).
Mr. Dougherty has been a director of Hogan since 1994 and currently serves
as Chair of the Compensation Committee. A private investor since January 1994,
he was Group Executive Vice President and Chief Financial Officer of KeyCorp
from March 1989 to December 1993. Prior to joining KeyCorp, Mr. Dougherty served
in various positions with banking organizations, including President of NCNB
Corp. and Vice Chairman of Southeast Bank, N.A. He has also served as Vice
Chairman and Chief Financial Officer of Coca-Cola Bottling Co. Consolidated, and
as a director of NCNB Corp., North Carolina National Bank, Southeast Bancorp,
Southeast Bank, N.A., and Coca-Cola Bottling Co. Consolidated.
Ms. Dressler has been a director of Hogan since 1992 and currently serves as
Chair of the Options Committee. She is Executive Director, Executive Education,
for the Graduate School of Business of Stanford University. Prior to assuming
this position, she was Associate Vice President of the Stanford University
Office of Development from July 1988 to October 1993.
Mr. Hunt has been a director of Hogan since 1982, has served as Vice
Chairman of the Board since August 1993 and is Chair of the Audit Committee. He
was Chairman of the Board of Hogan from August 1990 to August 1993. From
December 1992 to the present, he has served as Chairman of the Board, President
and Chief Executive Officer of Intellicall, Inc. a company engaged in the
business of providing products and services to pay telephone networks on a
worldwide basis. Prior to joining Intellicall, from July 1989 to July 1992, he
was Chief Executive Officer of Alliance Telecommuni-cations Corporation, a
company engaged in the manufacture and service of wireless communications
systems. Mr. Hunt also serves as a director of The Allen Group, Inc., Dr Pepper
Bottling Company of Texas, and American Homestar Corporation.
Mr. Palmer has been a director of Hogan since 1993. An Executive Consultant
since June 1992, he was Vice President of International Business Machines
Corporation from March 1982 to June 1992. He serves as Chairman of the Board of
Novasoft Systems, Inc., and as a director of XLI, Inc.
The table below sets forth information about each officer of the Company:
NAME AGE POSITION WITH THE COMPANY
- -------------------------------------- --- ----------------------------------------------------------
David R. Bankhead..................... 45 Senior Vice President and Chief Financial Officer
James J. Dellamore.................... 38 Senior Vice President, Development and Services
W. Daniel Johnson..................... 53 Senior Vice President, Corporate Development
R. Edwin Pearce....................... 41 Senior Vice President, General Counsel and Secretary
Paul J. Zoukis........................ 41 Senior Vice President, Marketing and Sales
Sarah M. Button....................... 33 Controller
2
Mr. Bankhead joined the Company in October 1993 as Senior Vice President of
Finance and Chief Financial Officer. From 1984 to October 1993, Mr. Bankhead was
with CYBERTEK Corporation and served in various positions including Senior Vice
President and Chief Operating Officer, Vice President and Chief Financial
Officer and Controller.
Mr. Dellamore joined Hogan Systems in 1984 and was appointed to his present
position in November 1992. Prior to assuming his current position, he held
various technical and management positions in product development and services.
Mr. Johnson joined Hogan Systems, Inc. in January 1992 as Senior Vice
President of Human Resources and was appointed to his present position in
November 1992. From 1987 to 1991 Mr. Johnson was engaged in private investments
and consulting. From 1983 to 1987 Mr. Johnson served as Vice President of Human
Resources for UCCEL Corporation and prior to that held a variety of Human
Resource positions with General Electric Company.
Mr. Pearce joined the Company in May 1984 as Vice President Legal Services
and General Counsel and was appointed to his present position in October 1990.
From 1981 to 1984 Mr. Pearce was engaged in private law practice in Dallas,
Texas.
Mr. Zoukis joined the Company in April 1992 as Senior Vice President of
Marketing and Planning and was appointed to his new position in April 1994. From
1989 to 1991 Mr. Zoukis served as Vice President of Marketing at G.E.
Information Services where he served in a variety of marketing positions between
1980 and 1989.
Ms. Button joined Hogan Systems in 1992 as European Controller and was
appointed to her present position in April 1995. Prior to joining the Company,
she was employed by Price Waterhouse in the United Kingdom.
There are no family relationships among directors or executive officers of
the Company.
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee and the Options Committee (the "Committees")
collectively are responsible for structuring the Company's executive
compensation program. The Committees' primary mission is to structure an
executive compensation strategy and administer a range of policies and programs
designed to reflect the Company's fundamental philosophy of aligning the
interests of executives with the interests of shareholders by creating a
performance-oriented environment that rewards performance that is related to the
goals of the Company. The program is also designed to ensure the competitiveness
of executive compensation so that the Company can attract, motivate, and retain
executive talent with outstanding qualifications and experience in the highly
competitive software, data processing and services marketplace. Recommendations
of the Compensation Committee are ultimately considered and approved by the
Board of Directors. No member of the Committees, composed of the individuals
listed below this report, is an employee of the Company. The Company has, from
time to time, retained independent compensation consultants to advise the
Company on various compensation matters.
The Committees periodically meet throughout the year as necessary. The
Compensation Committee annually evaluates the competitiveness of the executive
compensation program, taking into consideration the individual performance of
the Company's executives, the operating results of the Company and external
sources of compensation information.
In their considerations, the Committees do not assign quantitative relative
weights to different factors or follow mathematical formulae. Rather, the
Committees exercise discretion and judgment after considering factors deemed
relevant.
3
The key components of the executive compensation program are:
- base salary;
- executive bonus (in years when the Company's performance warrants such an
award); and
- stock option grants.
BASE SALARY
The Compensation Committee's policy is to establish base salary levels that
are intended to be consistent with (i) competitive practice, (ii) skills and
experience required, and (iii) the level of responsibility and the performance
of the individual executive.
The Compensation Committee reviews executive base salaries annually and
makes adjustment based on competitive trends and the performance of the
individual executive.
EXECUTIVE BONUS
The purpose of the executive bonus program is to provide a link between
executive compensation and the attainment of annually defined Company and
individual objectives. As a result, bonus awards are made when the Company's and
the individual's performance warrants an award.
In the past, the Company has set various performance goals and revenue
targets that varied from year to year. For fiscal year 1995, these goals were
the attainment of operating income targets and designated earnings per share
levels. Executive bonus payments are dependent upon the Company's attainment of
such performance goals. A target award opportunity is established for each
executive based on the executive's level of responsibility, position, salary
level and potential contribution to the success of the Company, and
considerations of competitive compensation. The executive's actual award
opportunity is determined by the Board of Directors on recommendation by the
Compensation Committee at the end of the fiscal year based on the Company's
operating income. Payments are a percentage of base salary paid from a bonus
pool.
Typically at the beginning of each fiscal year, the Board of Directors,
acting on the recommendation of the Compensation Committee, and in consultation
with management of the Company, establishes target levels of earnings per share
and qualitative performance for the Company as a whole for the current fiscal
year. These targets are based on selected levels of earnings per share, giving
consideration to the historical results for the Company, as well as a percentage
growth in operating income over the prior year's actual performance. These
targets reflect external standards of financial performance that are related to
the annual business plans of the operating groups or the Company as a whole.
Threshold and maximum levels of operating income are then established around
these targets in order to create a range of operating income that will be used
to measure the potential award opportunity under the annual incentive award
plan.
To determine the actual award to be granted to an executive, an assessment
is then made of the executive's position, salary level and individual
performance, including contributions in a number of specific areas, such as
creativity, leadership, decision making and financial and general management.
This assessment ensures that individual awards reflect an executive's specific
contributions to the success of the Company. Actual awards made to executives
are based upon recommendations made by the Compensation Committee, subject to
the approval of the Board of Directors, which may revise the Compensation
Committee's award recommendations at its discretion.
STOCK OPTION GRANTS
Stock option grants are administered by the Options Committee. Stock option
grants constitute the Company's principal long-term incentive vehicle.
4
The Company has periodically granted stock options in order to provide
certain of its executives with a competitive total compensation package and
reward them for their contribution to the Company's long-term performance. These
grants are designed to align the executive's interest with that of the
shareholders and to strengthen the link between executive compensation and
long-term Company performance.
All options granted have an option price that is not less than 100 percent
of the fair market value of the stock on the date of grant. The term of the
options, vesting increments, and the dates after which they become exercisable
are established by the Options Committee of the Company, subject to the terms of
the Company's stock option plans. The Options Committee works with the Board and
Compensation Committee to grant options which are consistent with the principles
of the Company's compensation guidelines and practices.
In determining the number of shares to be granted to an executive, the
Options Committee considers recommended grants from management, and makes an
assessment of the executive's position, salary level and individual performance,
including contributions in a number of specific areas, such as creativity,
leadership, decision making and financial and general management. This
assessment ensures that individual grants reflect an executive's specific
contributions to the success of the Company. All grants made to executives must
be approved by the Options Committee.
FISCAL YEAR 1995 EXECUTIVE COMPENSATION
Michael H. Anderson was hired as the Company's President and Chief Executive
Officer in June 1992 with a three-year employment contract, which established a
minimum base salary level subject to annual increases as determined in the
discretion of the Board of Directors of the Company. In July 1994, the agreement
was amended to provide for a new three-year term with automatic renewals. See
"EMPLOYMENT AGREEMENTS." After consideration of the factors described above
under "Base Salary," the Board of Directors established a base annual salary of
$298,750 for Mr. Anderson for the 1995 fiscal year.
For the 1995 fiscal year, Mr. Anderson received an annual bonus award of
$223,000, which was made on the basis of the compensation philosophy described
above under "Executive Bonus" and reflects (i) fiscal year 1995 performance that
was consistent with operating income targets and (ii) qualitative factors such
as leadership and team building. The other executive officers' annual bonus
awards were based upon the same considerations applicable to Mr. Anderson, as
described above. With respect to each of the executive officers noted in the
Summary Compensation Table, option awards were granted during the 1995 fiscal
year.
The base salaries of Messrs. Dellamore, Johnson, Pearce, and Zoukis for the
1995 fiscal year were determined based upon the factors described above in "Base
Salary." See "Summary Compensation Table."
SUMMARY
The Compensation Committee, in its judgment, has set compensation levels
that reflect each executive's contribution toward the Company's fiscal year 1996
objectives and believes that the executive compensation program, as implemented,
aligns the financial opportunity for the executive with increased value to
shareholders.
COMPENSATION COMMITTEE
William H. Dougherty, Chair
William O. Hunt
Paul J. Palmer
OPTIONS COMMITTEE
Carol F. Dressler, Chair
William M. Doran
Paul J. Palmer
5
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From August 9, 1990 to August 1993, William O. Hunt effectively served in an
executive officer capacity in connection with his service as Chairman of the
Board of Directors. William M. Doran is a partner with the firm of Morgan, Lewis
& Bockius, counsel to Hogan. No other member of the Committee has any
interlocking relationship with any other corporation that requires specific
disclosure under this heading.
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation for the
past three years paid to each of the five most highly compensated directors or
executive officers of the Company whose aggregate current remuneration exceeded
$100,000 (the "named executive officers").
ANNUAL COMPENSATION
(A) (B)
OTHER ANNUAL ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- ----------------------------------- --------- ----------- ----------- ----------------- ----------- -------------
Michael H. Anderson ............... 1995 $ 298,750 $ 223,000 -- 75,000 $ 10,489
Chairman of the Board, 1994 $ 285,000 $ 223,000 -- -- 13,391
President and Chief 1993 $ 195,102 $ 128,750 -- 500,000 43,874
Executive Officer
James J. Dellamore ................ 1995 $ 148,750 $ 75,000 -- 75,000 $ 6,380
Senior Vice President 1994 $ 135,000 $ 75,000 -- -- 6,922
Development and 1993 $ 107,500 $ 37,500 -- 71,000 4,300
Services
W. Daniel Johnson ................. 1995 $ 156,875 $ 75,000 -- 40,000 $ 6,237
Senior Vice President 1994 $ 150,000 $ 75,000 -- -- 2,674
Corporate Development 1993 $ 133,500 $ 65,400 -- 100,000 --
R. Edwin Pearce ................... 1995 $ 156,875 $ 80,000 -- 40,000 $ 6,886
Senior Vice President, 1994 $ 150,000 $ 80,000 -- -- 7,932
Secretary and General 1993 $ 145,002 $ 52,000 -- 72,000 5,800
Counsel
Paul J. Zoukis .................... 1995 $ 159,167 $ 90,000 -- 75,000 $ 6,916
Senior Vice President 1994 $ 150,000 $ 90,000 -- -- 13,861
Marketing and Sales 1993 $ 128,583 $ 65,000 -- 150,000 103,631
<FN>
- ------------------------
(A) Does not include amounts expended by Company that may have a value as a
personal benefit to the named executive officer. The value of such benefits
with respect to each executive officer named is less than 10% of his total
salary and bonus reported herein.
(B) The Company contributed the following amounts, during the 1995 fiscal year,
under the Savings and Profit Sharing Plan with respect to the following
named executive officers: Michael H. Anderson $6,310.32, James J. Dellamore
$5,950.00, W. Daniel Johnson $4,725.24, R. Edwin Pearce $6,247.83, and Paul
J. Zoukis $6,276.99. The Company contributed the following amounts, during
the 1995 fiscal year, under Split Dollar Insurance policies with respect to
the following senior executive officers: Michael H. Anderson, $4,179.00,
James J. Dellamore, $430.00, W. Daniel Johnson, $1,512.00, R. Edwin Pearce,
$639.00, and Paul J. Zoukis, $639.00. Split dollar insurance represents the
actuarial value of the benefit to the employee of the current year's
insurance premium paid by the Company in excess of that required to fund
the death benefit under the policy. Cumulative net life insurance premiums
paid are recovered by the Company at death, retirement or termination.
6
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the details regarding the stock options
granted to the named executive officers in fiscal year 1995. In addition, there
are shown hypothetical gains that would exist for the respective options.
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
---------------------------------- VALUE AT ASSUMED RATES
NUMBER OF OF STOCK PRICE
SHARES OF PERCENT OF TOTAL APPRECIATION FOR OPTION
COMMON STOCK OPTIONS GRANTED EXERCISE TERM(2)
UNDERLYING TO EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME OPTIONS GRANTED FISCAL YEAR 1995 PER SHARE DATE 5% 10%
- ----------------------------- --------------- ----------------- ----------- ---------- ----------- -----------
Michael H. Anderson.......... 75,000 12.4 $ 5.50 03/22/05 $ 259,419 $ 657,419
James J. Dellamore........... 75,000 12.4 $ 5.50 03/22/05 $ 259,419 $ 657,419
W. Daniel Johnson............ 40,000 6.6 $ 5.50 03/22/05 $ 138,357 $ 350,623
R. Edwin Pearce.............. 40,000 6.6 $ 5.50 03/22/05 $ 138,357 $ 350,623
Paul J. Zoukis............... 75,000 12.4 $ 5.50 03/22/05 $ 259,419 $ 657,419
<FN>
- ------------------------
(1) All options disclosed in this table vest in equal annual installments for
each individual or grant on the first through the fourth anniversary of
such grants.
(2) The dollar amounts under these columns assume 5% and 10% compounded annual
appreciation in Hogan Common Stock relative to the exercise price for each
option specified. These calculations and assumed realizable values are
required to be disclosed under Securities and Exchange Commission rules
and, therefore, are not intended to forecast possible future appreciation
of Hogan Common Stock or amounts that may be ultimately realized upon
exercise. Hogan did not use an alternate formula for the valuation of such
options because it is not aware of any formula which will determine with
reasonable accuracy a present value of options based upon future, unknown
or volatile factors.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to the named
executive officers concerning exercise of options during fiscal year 1995, and
the value of unexercised options held as of March 31, 1995.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES MARCH 31, 1995 MARCH 31, 1995(1)
ACQUIRED ON VALUE -------------------------- ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- ----------- ----------- ------------- -------------- --------------
Michael H. Anderson........... 0 $ 0.00 300,000 275,000 $ 500,000.00 $ 306,250.00
James J. Dellamore............ 0 $ 0.00 60,999 114,001 $ 40,582.12 $ 70,667.88
W. Daniel Johnson............. 0 $ 0.00 69,166 105,834 $ 41,665.75 $ 66,459.25
R. Edwin Pearce............... 4,000 $ 0.00 103,666 82,334 $ 58,915.75 $ 38,584.25
Paul J. Zoukis................ 0 $ 0.00 73,333 151,667 $ 48,332.87 $ 110,417.13
<FN>
- ------------------------
(1) Based on a share price of $6.25 at March 31, 1995.
7
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
shareholder return on its common stock for the last five fiscal years with the
cumulative total return of The Nasdaq Stock Market U.S. Companies Index and the
Standard and Poor's Software and Services Index for the same period.
COMPARISON OF CUMULATIVE TOTAL RETURN*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
HOGAN SYSTEMS NASDAQ U.S. S&P SOFTWARE
1990 100.00 100.00 100.00
1991 124.24 114.21 91.23
1992 124.76 145.58 118.11
1993 177.42 167.28 156.05
1994 214.14 179.82 175.09
1995 167.67 200.44 236.18
ASSUMES INITIAL INVESTMENT OF $100
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
AND IS BASED ON MARKET CAPITALIZATION
FOR FISCAL YEAR ENDED MARCH 31, 1995
EMPLOYMENT AGREEMENTS
In connection with his employment as President and Chief Executive Officer
of Hogan, on June 29, 1992, Michael H. Anderson entered into an employment
agreement with Hogan with a three (3) year term ending June 28, 1995 (the
"Agreement"). The Agreement originally provided for a minimum base salary of
$257,500 and for payment of an equal or greater amount of base salary as
determined in the discretion of the Board. The Agreement provided for a
discretionary performance bonus of up to 50 percent of his base salary in effect
at the end of each fiscal year. In addition,
8
Mr. Anderson was granted on June 28, 1992, nonstatutory options to purchase
300,000 shares of Hogan stock at an exercise price equal to the fair market
value of the stock on the date of grant. These 300,000 options vest in three
annual installments of 100,000 shares per year commencing one year from the date
of grant. Mr. Anderson was also granted nonstatutory options to purchase 200,000
shares of Hogan stock on March 25, 1993, which vest in four annual installments
of 50,000 shares per year commencing one year from the date of grant. Mr.
Anderson was also granted nonstatutory options to purchase 75,000 shares of
Hogan stock on March 22, 1995, which vest in four annual installments of 18,750
shares per year commencing one year from the date of grant. These options all
vest immediately in the event of a change in control of the Company. In July
1994, the Agreement was amended (the "1994 Amendment") to provide (i) for a new
three-year term commencing on the date of signing of the 1994 Amendment, with
automatic renewals of such three-year term scheduled to occur on each
anniversary of the 1994 Amendment, (ii) for a new minimum base salary of
$300,000 and for payment of equal or greater amount of base salary as determined
in the discretion of the Board, (iii) for a discretionary performance bonus of
up to 80 percent of his base salary in effect at the end of each fiscal year,
and (iv) for a right to payment, in the event that Mr. Anderson's employment
relationship is terminated for reasons other than cause or voluntary
termination, of an amount equal to the then current annual base salary being
paid to Mr. Anderson at the time of termination for a period of three years. The
1994 Amendment also provides Mr. Anderson with the contractual right to (A) a
pro rata payment of any executive incentive bonus for which Mr. Anderson would
have been otherwise entitled in the event of termination of employment following
a change of control of the Company, (B) participate in any supplemental
retirement plans that are established by the Company in the future, and (C) the
acceleration of any options granted to him during the term of the 1994 Amendment
in the event of any change of control of the Company.
In addition, in July 1994, the Company entered into agreements with each of
its senior vice presidents to accelerate the vesting provisions of stock options
in the event of a change in control of the Company and to pay an amount of
severance equal to one year's base salary and a pro rata bonus payment for which
such executive officer would have been otherwise entitled in the event of such
executive officer's involuntary termination of employment following a change of
control.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information provided to Hogan as to the
beneficial ownership of Hogan Common Stock by persons holding approximately 5
percent or more of the outstanding shares of Hogan Common Stock and known
significant shareholders as of June 22, 1995. Information as to the number of
shares of Common Stock owned and the nature of ownership has been provided by
9
these individuals or derived from Schedule 13D or 13G filings and is not within
the direct knowledge of the Company. Unless otherwise indicated, the named
individuals possess sole voting and investment power with respect to the shares
listed.
NUMBER OF SHARES
OF COMMON STOCK
BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED OF TOTAL
- --------------------------------------------------------------------------- ----------------- -----------
Gregor G. Peterson (1) .................................................... 1,303,804 9.02%
904 Lakeshore Drive
P.O. Box 4450
Incline Village, NV 89450
Charles J. Brooks ......................................................... 1,016,356 7.03%
Suite 2
2016 Forest Avenue
San Jose, CA 95128
ICM Asset Management, Inc. (2) ............................................ 1,183,050 8.19%
601 W. Main Avenue
Suite 917
Spokane, WA 99201
<FN>
- ------------------------
(1) Represents: (a) 2,920 shares held directly by Mr. Peterson, (b) 1,000,268
shares held by a trust for the benefit of Mr. Peterson and his wife, (c)
240,616 shares owned by trusts of which Mr. Peterson's wife is trustee or
co-trustee with respect to which Mr. Peterson disclaims beneficial
ownership, and (d) 60,000 shares issuable upon exercise of outstanding
options granted by Hogan which are presently exercisable.
(2) Represents: (a) 39,300 shares on which ICM has sole voting power, (b)
364,700 shares on which ICM has shared voting power, and (c) 1,183,500
shares on which ICM has shared dispositive power.
The following table sets forth the beneficial ownership of Hogan Common
Stock as of June 22, 1995 by each director and nominee for director, by Hogan's
Chief Executive Officer and next four most highly compensated executive
officers, and by all of Hogan's directors and executive officers, as a group.
Information as to the number of shares of Common Stock owned and the nature of
ownership has been provided by these individuals' filings and is not within the
direct knowledge of the Company. Unless otherwise indicated, the named
individuals possess sole voting and investment power with respect to the shares
listed.
NUMBER OF SHARES
OF COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED TOTAL
- --------------------------------------------------------------------------- ----------------- -----------
William H. Dougherty (1)................................................... 106,000 *
Carol F. Dressler (2)...................................................... 18,100 *
William O. Hunt (3)........................................................ 96,200 *
Paul J. Palmer (4)......................................................... 17,000 *
Michael H. Anderson (5).................................................... 403,000 2.79%
James J. Dellamore (6)..................................................... 66,666 *
W. Daniel Johnson (6)...................................................... 77,500 *
R. Edwin Pearce (7)........................................................ 126,257 *
Paul J. Zoukis (6)......................................................... 90,000 *
All directors and current executive officers as a group (11 individuals)
(8)....................................................................... 1,020,785 7.07%
<FN>
- ------------------------
* Represents less than one percent (1%) of the total number of shares
outstanding.
10
(1) Includes 6,000 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
(2) Includes 18,000 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
(3) Includes 60,000 shares issuable upon exercise of options granted by Hogan
which were exercisable at June 22, 1995, or within 60 days thereafter.
(4) Includes 12,000 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
(5) Includes 400,000 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
(6) Represents shares issuable upon the exercise of options granted by Hogan
which were exercisable at June 22, 1995, or within 60 days thereafter.
(7) Includes 111,000 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
(8) Includes 861,166 shares issuable upon the exercise of options granted by
Hogan which were exercisable at June 22, 1995, or within 60 days
thereafter.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is party to an agreement with Xycor, Inc. ("Xycor"), a privately
held provider of data processing or software for the credit life insurance
industry, pursuant to which Hogan will sell excess computer time to Xycor for a
negotiated fee based on the amount of usage by Xycor. Gregor G. Peterson, the
beneficial owner of 9.02 percent of the Company's common stock, has a minority
ownership interest in Xycor and has an indirect material interest in this
transaction. Revenue to Hogan from this agreement during the 1995 fiscal year
equalled approximately $1.5 million, and it is anticipated that such revenues
for the 1996 fiscal year could be approximately $1.32 million. While a director
of the Company, Mr. Peterson abstained from the vote of the Board of Directors
approving this agreement.
11