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FORM 10-K/A1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/ X / Annual Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934 (No Fee Required) For the fiscal year ended
October 29, 1999
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: 1-9232
VOLT INFORMATION SCIENCES, INC.
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(Exact name of registrant as specified in its charter)
New York 13-5658129
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
560 Lexington Avenue, New York, New York 10022-2928
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 704-2400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the common stock held by non-affiliates of the
Registrant as of January 13, 2000 (based on the closing price on The New York
Stock Exchange on that date) was approximately $160,000,000 (based on the number
of shares outstanding on that date exclusive of all shares held beneficially by
executive officers and directors and their spouses and the Registrant's Savings
Plan and Employee Stock Ownership Plan, without conceding that all such persons
or plans are "affiliates" of the Registrant).
The number of shares of common stock outstanding as of January 13, 2000 was
15,063,405.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
WILLIAM SHAW, 75, a founder of the Company, has been President, Chairman of the
Board and Chief Executive Officer of the Company since its formation and has
been employed in executive capacities by the Company and its predecessors since
1950. He has served as a director of the Company since its formation in 1957. He
is also a director of Autologic Information International, Inc., a 59%
publicly-held subsidiary of the Company ("Autologic").
JEROME SHAW, 73, also a founder of the Company, has been Executive Vice
President and Secretary of the Company since its formation and has been employed
in executive capacities by the Company and its predecessors since 1950. He has
served as a director of the Company since its formation in 1957. He is also a
director of Autologic.
STEVEN A. SHAW, 40, has been a Vice President of the Company since April 1997
and has been employed by the Company in various capacities since November 1995.
For more than five years prior thereto, he operated a number of privately-held
telecommunication services companies, of which he still owns most of the equity
interest. He has served as a director of the Company since August 1998.
IRWIN B. ROBINS, 65, has been a Senior Vice President of the Company since
September 1985 and has been employed in executive capacities by the Company
since 1980. He has served as a director of the Company since 1981. Mr. Robins
has advised the Company that he intends to retire at a mutually convenient time
during fiscal 2000 but will stand for re-election as a director of the Company
at the Company's 2000 Annual Meeting of Shareholders.
JAMES J. GROBERG, 71, has been a Senior Vice President and the Principal
Financial Officer of the Company since September 1985 and was also employed in
executive capacities by the Company from 1973 to 1981. He has served as a
director of the Company since 1987. He is also a director of Autologic.
HOWARD B. WEINREICH, 57, has been General Counsel of the Company since September
1985 and has been employed in executive capacities by the Company since 1981.
JACK EGAN, 50, has been Vice President - Corporate Accounting and Principal
Accounting Officer since January 1992 and has been employed in executive
capacities by the Company since 1979.
DANIEL G. HALLIHAN, 51, has been Vice President - Accounting Operations since
January 1992 and has been employed in executive capacities by the Company since
1986.
LUDWIG M. GUARINO, 48, has been Treasurer of the Company since January 1994 and
has been employed in executive capacities by the Company since 1976.
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MARK N. KAPLAN, 70, has been a director of the Company since April 1991. Mr.
Kaplan is of counsel in the law firm of Skadden, Arps, Slate, Meagher & Flom
LLP. He is also a director of Grey Advertising Inc., DRS Technologies, Inc.,
Refac Technology Development Corporation, American Biltrite, Inc., Congoleum
Corporation and MovieFone, Inc.
WILLIAM H. TURNER, 60, has been a director of the Company since August 1998. He
has been Chairman of PNC Bank, New Jersey since September 1999. From August 1997
to August 1999, he was President of PNC Bank, New Jersey. From October 1996 to
July 1997, Mr. Turner was President and Chief Executive Officer of Franklin
Electronic Publishers, Inc. From February 1991 to September 1996, he was Vice
Chairman of The Chase Manhattan Bank and its predecessor, Chemical Banking
Corporation. Mr. Turner is also a director of Standard Motor Products, Inc. and
Franklin Electronic Publishers, Inc.
William Shaw and Jerome Shaw are brothers. Steven A. Shaw is the son of Jerome
Shaw. There are no other family relationships among the directors or executive
officers of the Company.
Directors serve until the second Annual Meeting of Shareholders of the Company
following their election. The terms of office Messrs. Irwin B. Robins, Steven A.
Shaw and Mark N. Kaplan expire at the Company's 2000 Annual Meeting of
Shareholders (which the Company anticipates will be held in April 2000), while
the terms of office of Messrs. William Shaw, Jerome Shaw, James J. Groberg and
William Turner expire at the Company's 2001 Annual Meeting of Shareholders or,
in each case, until the election and qualification of their respective
successors. Directors may only be removed by vote of the shareholders for cause.
Each executive officer is scheduled to hold office until the 2000 Annual Meeting
of Directors, which is scheduled to be held after the 2000 Annual Meeting of
Shareholders. Any executive officer may be removed by the Board of Directors
either with or without cause.
There are no understandings pursuant to which any director or executive officer
was selected as such. Messrs. William Shaw, Jerome Shaw and Irwin B. Robins are
parties to employment agreements with the Company. See "Employment Agreements"
in Item 11, Executive Compensation.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's executive
officers and directors, and persons who beneficially own more than 10% of the
Company's common stock, to file initial reports of ownership, and reports of
changes of ownership, of the Company's equity securities with the Securities and
Exchange Commission and furnish copies of those reports to the Company. Based
solely on a review of copies of the reports furnished to the Company, or written
representations that no reports were required, the Company believes that all
reports required to be filed by such persons with respect to the Company's
fiscal year ended October 29, 1999 were timely filed, except that Mr. Robins was
late in reporting a gift he made of 50 shares.
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ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services rendered in all capacities to the Company and its subsidiaries during
the fiscal years ended October 29, 1999, October 30, 1998 and October 31, 1997
of the Company's Chief Executive Officer and each of the four other executive
officers of the Company who received the highest annual compensation during the
year ended October 29, 1999.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS
----------------------- ---------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) BONUS VOLT AUTOLOGIC COMPENSATION (2)
- ------------------ ---- ---------- ----- ---- --------- ----------------
William Shaw 1999 $368,462 10,000 $1,344
President and 1998 355,000 $30,000 1,981
Chief Executive Officer 1997 355,000 30,000 1,697
Jerome Shaw, 1999 368,462 10,000 1,344
Executive Vice President 1998 355,000 30,000 1,981
1997 355,000 30,000 1,697
James J. Groberg, 1999 297,461 20,000 15,000 5,000 1,091
Senior Vice President and 1998 284,769 25,000 5,000 1,683
Chief Financial Officer 1997 263,889 15,000 1,339
Irwin B. Robins, 1999 262,500 10,000 20,000 5,000 1,091
Senior Vice President 1998 247,558 15,000 1,685
1997 232,615 15,000 1,457
Steven A. Shaw 1999 200,000 40,000 2,000 993
Vice President 1998 141,278 665
1997 90,346(3) 355
(1) Includes compensation deferred under the Company's deferred compensation
plan and under Section 401(k) of the Internal Revenue Code of 1986, as
amended.
(2) Amounts in fiscal 1999 include premiums under the Company's group life
insurance policy ($447 for William Shaw; $447 for Jerome Shaw; $194 for
James J. Groberg; $194 for Irwin B. Robins; and $224 for Steven A. Shaw) and
the market value at the date of contribution of the portion of the shares of
common stock contributed by the Company under its Employee Stock Ownership
Plan ($863 for each of the named executives officers, except that for Steven
A. Shaw the amount was $740), together with the market value at fiscal
year-end of the portion of the shares forfeited by terminated employees
under such plan, which were allocated during fiscal 1999 with respect to
fiscal 1998 to the named officers in accordance with such plan ($34 for each
of the named officers, except that for Steven A. Shaw the amount was $29).
(3) Mr. Shaw was elected Vice President of the Company in April 1997. Includes
compensation paid to Mr. Shaw for services rendered in all capacities for
the full fiscal year.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning options granted during the
Company's 1999 fiscal year to the executive officers named in the Summary
Compensation Table by the Company and Autologic, its 59% - owned subsidiary:
INDIVIDUAL OPTIONS
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POTENTIAL
REALIZABLE VALUE ASSUMING
ANNUAL RATES OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR OPTION TERM(4)
OPTION EMPLOYEES IN EXERCISE PRICE EXPIRATION -------------------------------
NAME GRANTED FISCAL YEAR(3) PER SHARE DATE 5% 10%
- ---- ---------- --------------- -------------- ---------- -------- --------
William Shaw 10,000(1) 7.7% $ 4.25 11/4/08 $ 26,728 $ 67,734
Jerome Shaw 10,000(1) 7.7% 4.25 11/4/08 26,728 67,734
James J. Groberg 15,000(2) 19.2% 16.63 3/10/09 156,830 397,439
5,000(1) 3.8% 4.25 11/4/08 13,364 33,867
Irwin B. Robins 20,000(2) 25.7% 18.56 3/25/09 233,477 397,439
5,000(1) 3.8% 4.25 11/4/08 13,364 33,867
Steven A. Shaw 2,000(1) 1.5% 4.25 11/4/08 5,346 13,917
(1) Options granted under Autologic Employees' Incentive Stock Option Plan (the
"Autologic Plan"). Each option was granted at an exercise price equal to
100% of the market value of Autologic's common stock on the date of grant,
have a ten year term and vest in five year equal annual installments,
commencing one year following the date of grant, subject to earlier
termination at specified times following termination of employment with
Volt, death or disability.
(2) Options granted under the Company's 1995 Non-Qualified Stock Option Plan
(the "Company Plan"). Each option was granted at an exercise price equal to
100% of the market value of the Company's common stock on the date of grant,
have a ten year term and vest in five year equal annual installments,
commencing one year following the date of grant, subject to earlier
termination at specified times following termination of employment, death or
disability.
(3) The percentages reflect, in the case of options granted under the Company
Plan, the percent of total options granted to all employees of the Company
during fiscal 1999 and, in the case of the Autologic Plan, the percent of
total options granted to all employees of Autologic during fiscal 1999.
(4) These values are hypothetical values using assumed compound growth rates
prescribed by the Securities and Exchange Commission and are not intended to
forecast possible future appreciation, if any, in the market price of the
Company's common stock.
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STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
There were no options to purchase common stock of the Company or Autologic
exercised during fiscal year ended October 29, 1999 by the executive officers
named in the Summary Compensation Table. The following table sets forth certain
information concerning common stock of the Company and Autologic subject to
unexercised options held at October 29, 1999 by the executive officers named in
the Summary Compensation Table.
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
(EXERCISABLE / UNEXERCISABLE) (EXERCISABLE / UNEXERCISABLE) (1)
----------------------------- ---------------------------------
William Shaw 120,000/- (2) $1,181,250/- (2)
11,000/8,000 (3) -/- (3)
Jerome Shaw 45,000/- (2) 75,001/- (2)
11,000/8,000 (3) -/- (3)
James J. Groberg 6,834/13,666 (2) 10,208/37,500 (2)
6,000/4,000 (3) -/- (3)
Irwin B. Robins 13,534/17,666 (2) 15,084/19,000 (2)
6,000/4,000 (3) -/- (3)
Steven A. Shaw 7,000/7,000 (2) 10,500/7,000 (2)
400/1,600 (3) -/- (3)
(1) Represents the closing sale price of the Company's common stock as reported
by NYSE on October 29, 1999, minus the option exercise price. None of the
options to purchase common stock of Autologic were in-the-money.
(2) Shares subject to options under the Company Plan.
(3) Shares subject to options under the Autologic Plan.
STANDARD COMPENSATION OF DIRECTORS
Each director of the Company who is not an officer or employee of the Company
receives a director's fee at the annual rate of $25,000 and is also reimbursed
for out-of-pocket expenses.
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EMPLOYMENT AGREEMENTS
The Company is a party to employment agreements dated as of May 1, 1987 with
William Shaw and Jerome Shaw. These agreements, as amended, provide for the
employment of each in his present executive capacity at an annual base salary,
which is presently $375,000 (subject to increases and additional compensation,
including bonuses, from time to time, at the discretion of the Board of
Directors). The employment term under each employment agreement continues until
the April 30 which is five years next following the giving by either the Company
or the executive of notice to terminate such employment. The agreements also
provide for service thereafter for the remainder of the executive's life as a
consultant to the Company for annual consulting fees equal to 75% for the first
ten years of the consulting period, and 50% for the remainder of the consulting
period, of his base salary as in effect immediately prior to the commencement of
the consulting period. Upon the death of the executive, the Company will pay to
his beneficiary a death benefit equal to three times his annual base salary at
the date of death if his death shall have occurred while employed as an
executive, 2.25 times his annual base salary at the end of his employment as an
executive if his death shall have occurred during the first ten years of the
consulting period or 1.5 times his annual base salary at the end of his
employment as an executive if his death shall have occurred during the remainder
of the consulting period. Each employment agreement permits the executive to
accelerate the commencement of the consulting period if a "change in control",
as defined in the agreements, of the Company shall occur or if the Company's
office where the executive presently performs his principal services shall be
relocated to a different geographical area.
The Company is also a party to an employment agreement dated as of May 1, 1987,
as amended, with Irwin B. Robins, providing for his continued employment as
Senior Vice President and head of the Company's Legal Department until April 30,
2000. Mr. Robins has advised the Company that he intends to retire at a mutually
convenient time during fiscal 2000 but intends to remain as a director of the
Company. Pursuant to the agreement, Mr. Robins is entitled to receive an annual
base salary, which is presently $270,000 (subject to increases and additional
compensation, including bonuses, from time to time, at the discretion of the
Board of Directors). The agreement also provides that, if a "change in control",
as defined in the agreement of the Company shall occur and thereafter either Mr.
Robins shall elect to terminate his employment within two years after the
occurrence of certain events which, generally are adverse changes in his
compensation, position, function or location or his employment shall be
terminated by the Company for any reason other than death, incapacity or
"cause", as defined in the agreement, Mr. Robins will be entitled to receive (a)
his regular compensation, including benefits, through the date on which his
employment terminates and (b) a lump-sum payment in an amount equal to 2.99
times his "base amount", as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended. Mr. Robins will not be obligated to seek other
employment nor mitigate the payment of the lump sum with any compensation
received from other employment.
Under the three employment agreements described above, William Shaw, Jerome Shaw
and Irwin B. Robins are prohibited from engaging in any business competitive
with the Company, competing with the Company for its customers or encouraging
employees of the Company to leave their employment. These restrictions apply for
the duration of the respective agreements and for one year thereafter if the
executive's employment shall have been terminated by the Company "for cause", as
defined in his agreement. William Shaw and Jerome Shaw will not be bound by
these restrictions after a "change in control", as defined, of the Company shall
have occurred if, during their respective consulting periods, they shall elect
to terminate their respective employment agreements and thereby relinquish any
further payments or other benefits thereunder.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
To date, all decisions regarding the compensation by the Company of executive
officers have been made by the entire Board of Directors. Accordingly, William
Shaw, Jerome Shaw, James J. Groberg, Irwin B. Robins and Steven A. Shaw, the
executive officers of the Company, named in the Summary Compensation Table,
participated in deliberations of the Company's Board of Directors concerning
executive officer compensation during the year ended October 29, 1999. Each
executive officer who is also a director does not participate in deliberations
as to his own compensation.
The Company renders various payroll and related services to a corporation
primarily owned by Steven A. Shaw, a Vice President and director of the Company,
for which the Company receives an amount (approximately $1,000 in fiscal 1999)
in excess of its direct costs. Such services are performed on a basis
substantially similar to those performed by the Company for, and at
substantially similar rates as is charged by the Company to, unaffiliated third
parties. In addition, the Company rents to that corporation approximately 2,500
square feet of space in its El Segundo, California facility on a month-to-month
basis at a rental of $1,500 per month, which the Company believes is the fair
market rental for such space.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of January 31, 2000 (except as
noted below), with respect to the beneficial ownership of the Company's common
stock, its only class of voting or equity securities, by (a) each person who is
known to the Company to own beneficially more than five percent of the Company's
outstanding shares of common stock, (b) each of the directors of the Company,
(c) each of the executive officers named in the Summary Compensation Table in
Item 11 and (d) executive officers and directors as a group:
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
- ------------------- ------------------------ --------------------
William Shaw 3,658,988(3)(4) 24.1%
560 Lexington Avenue
New York, NY 10022-2928
Jerome Shaw 3,198,034(3)(5) 21.2%
2401 N. Glassell Street
Orange, CA 92665
Westport Asset Management, Inc. 1,074,087(6) 6.9%
253 Riverside Avenue
Westport, CT 06880
Dimensional Fund Advisors, Inc. 981,600(7) 6.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
James J. Groberg 10,099(3) *
Irwin B. Robins 23,282(3) *
Steven A. Shaw 216,874(3) 1.4%
Mark N. Kaplan 6,000(3) *
William H. Turner 1,000 *
All Executive Officers and 7,144,435(3)(4)(5) 46.1%
Directors as a Group
(11 persons including the foregoing)
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(1) Except as noted, the named beneficial owners have sole voting and
dispositive power with respect to their beneficially owned shares. Includes
shares held for the account of executive officers under the Company's
Employee Stock Ownership Plan and the Company's Savings Plan.
(2) Asterisk indicates less than 1%. Shares reflected as owned by a person that
are not outstanding, but that are issuable upon exercise of options held by
such person that were exercisable on or within 60 days after January 31,
2000, are considered outstanding for the purpose of computing the percentage
of outstanding common stock that would be owned by the optionee if the
options were exercised, but (except for the calculation of the beneficial
ownership by all executive officers and directors as a group) are not
considered outstanding for the purpose of computing the percentage of
outstanding common stock owned by any other person. None of the named
persons are known to own shares of common stock of Autologic, the Company's
59% owned subsidiary. If the portion of the options granted by Autologic
held by Messrs. William Shaw (11,000 shares), Jerome Shaw (11,000 shares),
James J. Groberg (6,000 shares), Irwin B. Robins (6,000 shares), Steven A.
Shaw (400 shares), and all executive officers and directors of the Company
as a group (9 persons having 47,400 shares) that are exercisable within 60
days of January 31, 2000 were exercised, none of such person or group would
own at least 1% of the outstanding common stock of Autologic.
(3) Includes the following shares issuable upon the exercise of the portion of
options granted by the Company which were exercisable on or within 60 days
after January 31, 2000: William Shaw, 120,000 shares; Jerome Shaw, 45,000
shares; James J. Groberg, 28,666 shares; Irwin B. Robins, 17,666 shares;
Steven A. Shaw, 7,000 shares; Mark N. Kaplan, 3,000 shares; and all
executive officers and directors as group, 211,868 shares.
(4) Includes 99,561 shares owned of record by Mr. Shaw as sole trustee of a
trust for the benefit of his wife, as to which shares Mr. Shaw disclaims
beneficial ownership.
(5) Includes (i) 2,885,430 shares owned of record by Mr. Shaw and his wife as
trustees of a revocable trust for their benefit or as community property, as
to which they may be deemed to have shared voting and investment power
(pursuant to the terms of the trust, Mr. Shaw may demand that the shares in
trust be transferred to him at any time) and (ii) 236,250 shares owned of
record by Mr. Shaw and his wife as trustees of a trust for the benefit of
one of their children, as to which Mr. and Mrs. Shaw may be deemed to have
shared voting and investment power (the inclusion of which 236,250 shares is
not an admission of beneficial ownership of those shares by Mr. Shaw).
Excludes 6,750 shares owned of record by Mr. Shaw's wife, as to which Mr.
Shaw disclaims beneficial ownership.
(6) Based on information as of December 31, 1999 contained in a Schedule 13G
dated February 16, 2000.
(7) Based on information as of December 31, 1999 contained in a Schedule 13G
dated February 3, 2000.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to in the last paragraph under "Compensation Committee
Interlocks and Insider Participation" in Item 11, Executive Compensation.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
VOLT INFORMATION SCIENCES, INC.
Dated: February 25, 2000 By: /s/ Jack Egan
New York, New York --------------------------
Jack Egan,
Vice President
Corporate Accounting
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