SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A2
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended
December 31, 1994
Commission File Number 0-3704
NAI TECHNOLOGIES, INC.
A New York Corporation IRS Employer I.D. No. 11-
1798773
1000 Woodbury Road, Woodbury, New York 11797-2530
Telephone No. (516) 364-4433
Securities Registered Pursuant to Section 12 (g) of the
Act:
Common Stock, Par Value $0.10 Per Share
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, 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 the 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)
As of March 19, 1995, 7,195,567 common shares were outstanding and the aggregate
market value of the common shares (based on the average bid and asked price of
these shares on The NASDAQ Stock Market as of March 29, 1995) of NAI
Technologies, Inc. held by non-affiliates was approximately $15 million.
Documents Incorporated by Reference: None.
Page 1 of 42 Pages
Exhibit Index on Page 13
EXPLANATORY NOTE
This Form 10-K/A2 is being filed by NAI Technologies, Inc., a
New York corporation (the "Company"), as an amendment to its Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (the "Form 10-K") to
include the information required by Items 10 (Directors and Executive Officers
of the Registrant), 11 (Executive Compensation) and 12 (Security Ownership of
Certain Beneficial Owners and Management) and related exhibits which were not
included in such Form 10-K. The information required by these items was intended
to be incorporated by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days after the fiscal year ended December 31, 1994 (or May 1, 1995).
The Company will not be filing its definitive proxy statement within that time
period.
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Item 10. Directors and Executive Officers of the Registrant.
DIRECTORS OF THE COMPANY
The current members of the Board of Directors of the Company, together
with certain information furnished to the Company by each such person, are set
forth below.
Years Served
Name and Age as a Director Biographical Summary
- ------------ ------------- --------------------
Robert A. Carlson, 62 8 Mr. Carlson is President and Chief
Executive Officer of the Company.
From December 1987 until December
1989, he was President and Chief
Operating Officer of the Company.
Richard A. Schneider, 42 3 Mr. Schneider is Executive Vice
President, Treasurer and Secretary
of the Company. He was elected a
director of the Company on February
11, 1993. From October 1988 until
December 1992, he served as Vice
President - Finance, Treasurer and
Secretary of the Company.
Stephen A. Barre, 56 6 Mr. Barre is Chairman and Chief
Executive Officer of Servo
Corporation of America, a
communications and defect detection
company.
C. Shelton James, 55 6 Mr. James is Chairman of the Board
and Chief Executive Officer of
Elcotel Inc., a public
communications company. He also is
President and a director of
Fundamental Management Corporation,
an investment management company,
and is on the board of directors of
Harris Computer Systems Inc., SK
Technologies and CPSI Inc.
Walter Lipkin, 69 42 Mr. Lipkin is retired. He was a co-
founder of the Company and served as
a Vice President or Senior Vice
President and Treasurer from 1954
through 1989.
John M. May, 67 16 Mr. May is an independent
consultant. From 1975 to 1987, he
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was Vice President and Director of
Tower, Perrin, Inc., a management
consulting firm. He is also a
director of Olsten Corporation, a
provider of temporary employee and
health care services.
Robert D. Rosenthal, 45 10 Mr. Rosenthal is President, Chief
Executive Officer and a Director of
First Long Island Investors, Inc., a
diversified investment and financial
services company. He also is Co-
Chairman and Co-Chief Executive
Officer of the New York Islanders, a
franchise in the National Hockey
League.
EXECUTIVE OFFICERS OF THE COMPANY
The current executive officers of the Company are as follows:
Robert A. Carlson, 62, is the President and Chief Executive Officer of
the Company. From December 1987 until December 1989, he was President and Chief
Operating Officer of the Company.
Richard A. Schneider, 42, is the Executive Vice President, Treasurer and
Secretary of the Company. From October 1988 until December 1992, he served as
Vice President - Finance, Treasurer and Secretary of the Company.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires officers, directors and beneficial owners of more than
10% of the Company's Common Stock to file reports of ownership and changes in
their ownership of the equity securities of the Company with the Securities and
Exchange Commission. Based solely on a review of the reports and representations
furnished to the Company during the last fiscal year by such persons, the
Company believes that each of these persons is in compliance with all applicable
filing requirements. Under Section 16(b) of the Exchange Act, such persons also
are required to disgorge to the Company any profit realized by any purchase and
sale, or any sale and purchase, of equity securities of the Company within any
period of less than six months. Pursuant thereto, Mr. Schneider was required to
disgorge profits totalling $5,980 based on the sale of 1,000 shares and the
purchase of 1,000 shares of the Company's Common Stock one day short of the
required six month waiting period in fiscal 1994.
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Item 11. Executive Compensation.
EXECUTIVE COMPENSATION
The following table sets forth all plan and non-plan compensation
awarded to, earned by or paid to the Company's Chief Executive Officer and each
of the executive officers of the Company other than the Chief Executive Officer
whose total annual salary and bonus exceeded $100,000 for each of the Company's
last three fiscal years (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
OTHER
ANNUAL RESTRICTED SECURITIES
COMPEN- STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($)(1) ($) SARS (#) ($) ($)
- --------------------------- ----- ----------- ---------- ------- ---- --------- ---- -----------
Robert A. Carlson - 1994 $275,000 -- -- -- 138,983(5) -- $ 66,324(2)
President and Chief 1993 260,000 $ 68,790 -- -- 64,347 -- 69,652(2)
Executive Officer 1992 226,000 113,300 -- -- 122,919 -- 64,539(2)
Richard A. Schneider - 1994 149,000 -- -- -- 94,389(5)
Executive Vice 1993 138,000 27,380 -- -- 23,442 -- 12,426(3)
President, Treasurer 1992 118,000 36,970 -- -- 30,147 -- 13,993(3)
and Secretary -- 14,622(3)
Frank Tortorelli - 1994 144,895 -- -- -- 75,136(5) -- 5,298(4)
President, Military 1993 n/a -- -- -- -- -- --
Systems Group (6) 1992 n/a -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
(1) The aggregate amount of all perquisites and other personal benefits paid
to any Named Executive is not greater than either $50,000 or 10% of the
total of the annual salary and bonus reported for such Named Executive.
(2) Includes $51,266, $59,122 and $59,022 of life insurance premiums paid on
term life and split dollar policies by the Company on behalf of Mr.
Carlson in each of the years 1992, 1993 and 1994, respectively, as well
as $8,273, 7,909 and $7,302 of matching contributions made by the
Company under the 401(k) deferred compensation plan and $5,000, $2,621
and $0 of matching contributions made by the Company under the profit
sharing portion of such plan for the benefit of Mr. Carlson for each of
the years 1992, 1993 and 1994, respectively.
(3) Includes $6,781, $7,637 and $7,603 of life insurance premiums paid on
term life and split dollar policies by the Company on behalf of Mr.
Schneider in each of the years 1992, 1993 and 1994, respectively, as
well as $4,341, $4,166 and $4,823 of matching contributions made by the
Company under the 401(k) deferred compensation plan and $3,500, $2,190
and $0 of matching contributions made by the Company under the profit
sharing portion of such plan for the benefit of Mr. Schneider for each
of the years 1992, 1993 and 1994, respectively.
(4) Includes $818 of life insurance premiums paid on a term life policy by
the Company on behalf of Mr. Tortorelli in 1994, as well as $4,480 of
matching contributions made by the Company under the 401(k) deferred
compensation plan and $0 of contributions made by the Company under the
profit sharing portion of such plan for the benefit of Mr. Tortorelli
for 1994.
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(5) Options to acquire shares of the Company Common Stock that were granted
in fiscal year 1994. At the same time, options for Mr. Carlson
(102,951), Mr. Schneider (54,996) and Mr. Tortorelli (39,336) were
canceled.
(6) Mr. Tortorelli became an executive officer of the Company in fiscal
1994.
STOCK OPTIONS
The table below summarizes the options granted to the Named Executives
in 1994 and their potential realizable values.
OPTION/SAR GRANTS IN 1994
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
- ----------------------------------------------------------------------------------------- -----------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------ ------------ -------------- ------- ----- ------- ---------
Robert A. Carlson -
President and Chief 36,032 7% $6.25 10 years $141,627 $358,911
Executive Officer 102,951(2) 21% $5.25 5 years $149,330 $329,979
Richard A. Schneider -
Executive Vice President 39,393 8% $4.74 10 years $117,431 $297,587
Treasurer and Secretary 54,996(2) 11% $5.25 5 years $ 79,772 $176,273
Frank Tortorelli -
President, Military Systems 35,800 7% $5.25 10 years $118,201 $299,542
Group 39,336(2) 8% $5.25 5 years $ 57,057 $126,080
- --------
(1) Option price compounded annually at 5% and 10% over the ten year term
minus the exercise price times the number of shares subject to the
option.
(2) Such options were granted on May 26, 1994 in connection with the
cancellation of options granted for the same number of shares at earlier
dates. Such options become exercisable at a rate of 25% per year on the
anniversary date of the grant. All such options expire after the fifth
anniversary of the date of grant.
-6-
The table below summarizes the exercise of stock options during 1994
for the Named Executives.
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND FY-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------------------------ ------------------ -------------------- ----------------
Robert A. Carlson -
President and
Chief Executive
Officer 10,140 $34,223 47,579/166,906 $336/$0
Richard A. Schneider -
Executive Vice
President,
Treasurer and Secretary -0- $0 7,768/87,559 $86/$0
Frank Tortorelli -
President, Military
Systems Group -0- $0 4,056/58,392 $0/$0
- --------
(1) Market price at December 31, 1994 minus exercise price times the number
of shares underlying the unexercised options.
-7-
PENSION PLAN AND SUPPLEMENTAL RETIREMENT PLAN
Certain Company employees including the Named Executives are covered by
the Company's non-contributory Employees Pension Plan (the "Pension Plan").
Effective January 4, 1994, current accruals were frozen under the Pension Plan.
The Company also has a non-qualified Supplemental Retirement Plan in effect
which covers certain Company employees including the Named Executives other than
Mr. Tortorelli.
Typical retirement benefits as in effect on December 31, 1994 are shown
in the table below:
ESTIMATED ANNUAL NORMAL RETIREMENT PENSION AND
SUPPLEMENTAL BENEFITS FOR VARIOUS COMBINATIONS OF
SPECIFIED COMPENSATION AND YEARS OF CREDITED SERVICE
YEARS OF CREDITED SERVICE AT RETIREMENT
REMUNERATION 10 15 20 25 30 35
------------ ------ ------ ------ ------ ------ ----
$ 50,000 $ 4,610 $ 6,915 $ 9,220 $ 8,125 $ 13,830 $ 13,830
75,000 7,485 11,228 14,970 14,888 22,455 22,455
100,000 10,360 15,540 20,720 22,075 31,080 31,080
125,000 13,235 19,853 26,470 29,263 39,705 39,705
150,000 16,110 24,165 32,220 36,450 48,330 48,330
175,000 18,985 28,478 37,970 43,638 56,955 56,955
200,000 21,860 32,790 43,720 50,825 65,580 65,580
225,000 24,735 37,103 49,470 58,013 74,205 74,205
250,000 25,982 38,972 51,963 59,122 77,945 77,945
300,000 25,982 38,972 51,963 59,122 77,945 77,945
400,000 25,982 38,972 51,963 59,122 77,945 77,945
The benefits shown in the table above have been computed on an
actuarial basis and are not subject to any deduction for social security or
other offset amounts. The compensation covered by the Pension Plan includes the
amounts shown in columns (c), (d) and (e) of the Summary Compensation Table.
It is estimated that Messrs. Carlson, Schneider and Tortorelli, who
have ten, six and three years of credited service, respectively, will receive
each year at normal retirement age the following total aggregate annual amounts
under the Pension Plan and the non-qualified Supplemental Retirement Plan:
$160,213, $66,818 and $3,124, respectively.
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
The Company has entered into Executive Termination Agreements with
Messrs. Carlson, Schneider, Tortorelli and four other employees, which provide
for severance benefits in the event employment terminates within one year
following a change in control of the Company unless termination is on account of
death, or for cause. The agreements are renewable annually at the option of the
Company. The agreements provide severance benefits which include an amount equal
to two times annual base salary for Messrs. Carlson, Schneider and Tortorelli
(the number of years or portions thereof until Mr. Carlson's sixty-fifth
birthday times annual base salary for Mr. Carlson) and one times annual base
salary for the four other employees.
DIRECTOR COMPENSATION
During 1994, each director who was not also an officer of the Company
was paid an annual retainer of $9,000 plus a uniform fee of $1,000 for each
Board and committee meeting attended in person. During 1995, each director who
is not also an officer of the Company will be paid an annual retainer of $9,000
plus a uniform fee of $1,000 for each Board and committee meeting attended in
person. During 1994, directors who were also officers of the Company received no
remuneration for attendance at Board and committee meetings. No such
compensation is contemplated to be paid during 1995 either.
-8-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1994, the members of the
Compensation Committee were John M. May (Chairman), Walter Lipkin and Robert D.
Rosenthal. During fiscal year 1994 and formerly, none of such persons was an
officer of the Company or any of its subsidiaries or had any relationship with
the Company other than serving as a director of the Company, except that Mr.
Lipkin served as a Vice President or Senior Vice President and Treasurer of the
Company from 1954 through 1989. In addition, during the fiscal year ended
December 31, 1994, no executive officer of the Company served as a director or a
member of the compensation committee of another entity, one of whose executive
officers served as a director or on the Compensation Committee of the Company.
-9-
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information concerning persons or groups
who are known by the Company to be the beneficial owners of more than 5% of the
Company Common Stock as of March 7, 1995. The information in the table below is
based upon information furnished to the Company by such persons and statements
filed with the Securities and Exchange Commission.
NUMBER OF SHARES OF PERCENT OF
COMPANY COMMON COMPANY
NAME AND ADDRESS OF BENEFICIAL OWNER STOCK BENEFICIALLY OWNED(1) COMMON STOCK
- ------------------------------------ --------------------------- ------------
Lindner Fund Inc.
7711 Carondelet Avenue
Box 16900
St. Louis, MO 63105(2) . . . . . . . . . . . . . . 405,600 5.65%
C.L. King & Associates
Nine Elk Street
Albany, NY 12207(3) . . . . . . . . . . . . . . . . 451,451 6.29%
Pioneering Management Corporation
60 State Street
Boston, MA 02114(4) . . . . . . . . . . . . . . . . 451,500 6.29%
Fundamental Management Corporation
201 South Biscayne Boulevard
Suite 1450
Miami, FL 33131(5). . . . . . . . . . . . . . . . . 385,636 5.38%
- --------
(1) To the knowledge of the Company, beneficial owners named in the above
table have sole voting power with respect to the shares listed opposite
their names.
(2) These shares are reportedly owned by Lindner Fund Inc., an investment
company registered under the Investment Company Act of 1940, of which
Ryback Management Corporation is the investment company adviser
registered under Section 203 of the Investment Advisers Act of 1940.
(3) These shares are reportedly owned by a passive investor. C.L. King &
Associates is the investment company adviser of such investor and is
registered under Section 203 of the Investment Advisers Act of 1940.
(4) These shares are reportedly owned by a passive investor. Pioneer
Management Corporation is the investment company adviser of such
investor and is registered under Section 203 of the Investment Advisers
Act of 1940.
(5) These shares are reportedly owned of record by several limited
partnerships formed under the laws of the State of Florida for the
purpose of investing in securities of public company issuers, of which
Fundamental Management Corporation is the sole managing general partner.
C. Shelton James, a director of the Company, is the President of
Fundamental Management Corporation. Excludes 14,793 shares of Company
Common Stock owned by Mr. James as to which shares Fundamental
Management Corporation disclaims beneficial ownership.
-10-
Shares of Company Common Stock beneficially owned as of March 7, 1995
by each director, nominee for director and executive officer of the Company and
by all directors and executive officers of the Company as a group are set forth
in the following table. This table is based upon information furnished to the
Company by such persons and statements filed with the Securities and Exchange
Commission.
BENEFICIAL OWNERSHIP OF SHARES(1)
---------------------------------
NUMBER OF SHARES OF PERCENT OF
COMPANY COMMON STOCK COMPANY
NAME BENEFICIALLY OWNED(2) COMMON STOCK(3)
- ------------------------------------------ --------------------- ------------
Robert A. Carlson ............................ 100,467 1.40%
Stephen Barre ................................ 17,654 *
C. Shelton James(4)........................... 14,793 *
Walter Lipkin ................................ 123,846 1.72%
John M. May .................................. 47,489 1.08%
Robert D. Rosenthal .......................... 69,700 *
Richard A. Schneider ......................... 16,812 *
Frank Tortorelli ............................. -0- *
All directors and officers
as a group (8 persons) ..................... 390,761 5.43%
- --------
* Less than 1%
(1) Directors and executive officers have sole voting power and sole
investment power with respect to the shares listed opposite their names.
(2) Excludes options exercisable within 60 days of March 7, 1995 for such
persons as follows: Mr. Carlson, 68,327; Mr. Barre, 3,120; Mr. James,
7,401; Mr. Lipkin, 3,120; Mr. May, 3,120; Mr. Rosenthal, 3,120; Mr.
Schneider, 9,833; Mr. Tortorelli, 6,084; and all directors and officers
as a group, 104,125.
(3) The percentages of Company Common Stock outstanding are based on
7,195,567 shares outstanding on March 7, 1995.
(4) Excludes 385,636 shares of Company Common Stock owned of record by
several limited partnerships of which Fundamental Management
Corporation, an investment company of which Mr. James is President, is
the sole managing general partner, as to which shares Mr. James shares
voting and dispositive power.
-11-
S I G N A T U R E S
--------------------
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. 2 to Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
NAI TECHNOLOGIES, INC.
By: Richard A. Schneider
--------------------------
Richard A. Schneider
DATE: April 26, 1995 Executive Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 2 to Annual Report on Form 10-K has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
date indicated.
Signature Title Date
- --------- ----- ----
Robert A. Carlson
- --------------------- President, Chief Executive April 26, 1995
(Robert A. Carlson) Officer and Director
(Chief Executive Officer)
Stephen Barre
- --------------------- Director April 26, 1995
(Stephen Barre)
C. Shelton James
- --------------------- Director April 26, 1995
(C. Shelton James)
Walter Lipkin
- --------------------- Director April 26, 1995
(Walter Lipkin)
John M. May
- --------------------- Director April 26, 1995
(John M. May)
Robert Rosenthal
- --------------------- Director April 26, 1995
(Robert Rosenthal)
Richard A. Schneider
- --------------------- Executive Vice President, April 26, 1995
(Richard A. Schneider) CFO, Treasurer, Secretary
and Director (Chief Financial
and Accounting Officer)
-12-
INDEX TO EXHIBITS
Page
Exhibit (10)
(a) Executive Termination Agreement, dated as of February 9, 1995, with
Mr. Carlson 14
(b) Executive Termination Agreement, dated as of February 9, 1995, with
Mr. Schneider 18
(c) Executive Termination Agreement, dated as of February 9, 1995, with
Mr. Tortorelli 22
(d) Registration Rights Agreement, dated as of April 12, 1995, with The Bank
of New York and Chemical Bank 26
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