SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
CHAPTER 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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-25297
ECOMETRY CORPORATION
(Exact name of registrant as specified in its charter)
Florida 65-0090038
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1615 South Congress Avenue, 33445-6368
Delray Beach, Florida (Zip Code)
(Address of Principal Executive Offices)
(Registrant telephone number, including area code): (561) 265-2700
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value Per Share (Nasdaq National Market)
(Title of each 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. [X]
As of March 27, 2002, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $34,658,702 based on
the closing price on that date of $2.79 per share. As of that date, there were
12,422,474 shares of the registrant's Common Stock outstanding.
ECOMETRY CORPORATION AND SUBSIDIARIES
ANNUAL REPORT ON FORM 10-K/A
INDEX
PART III
Item 10. Biographical Information Regarding Directors and Executive Officers........ 1
Item 11. Executive Compensation..................................................... 3
Item 12. Security Ownership of Certain Beneficial Owners and Management............. 5
Item 13. Certain Relationships and Related Transactions............................. 6
PART III
Item 10. BIOGRAPHICAL INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
Set forth below is biographical information for each member of the
Company's Board of Directors.
ALLAN J. GARDNER, age 56, a co-founder of the Company, has served in a
variety of capacities during his tenure with the Company. From April 1999 to the
present, Mr. Gardner has served as Chief Technology Officer. In addition, from
December 1988 until the present, Mr. Gardner has served as a director of the
Company, serving as Co-Chairman of the Board from May 1996 to February 2000.
From December 1988 to April 1996, Mr. Gardner served as Vice President and
Secretary. From January 1997 to April 1999, Mr. Gardner served as Executive Vice
President -- Advanced Technologies. During his tenure with the Company, Mr.
Gardner has also been the chief architect of the Company's software products.
From 1980 to 1988, Mr. Gardner was President of BSA Incorporated ("BSA"), a
catalog management software company. BSA was acquired by Acxiom Corp. in 1986.
Mr. Gardner served on Acxiom's Board of Directors from 1986 to 1988. Since 1966,
Mr. Gardner has worked in the data processing industry, and since 1980
exclusively in the direct marketing segment of the non-store marketing industry.
WILBURN W. SMITH, age 62, a co-founder of the Company, has served in a
variety of capacities during his tenure with the Company. From November 1996 to
the present, Mr. Smith has served as Executive Vice President -- Sales. From
December 1988 to the present, he has served as a director of the Company,
serving as Co-Chairman of the Board from May 1996 to February 2000 and as
Chairman of the Board since March 2001. From December 1988 to April 1996, Mr.
Smith served as President and Treasurer of the Company. Since his tenure with
Bell Labs, now known as Lucent Technologies, in the early 1960s, Mr. Smith has
worked exclusively in the direct marketing industry. Prior to his tenure with
the Company, Mr. Smith was a founder of Brooks Smith Associates, the predecessor
company of BSA, and owned and managed several other direct marketing companies.
FRANCIS H. ZENIE, age 67, became a director of the Company in December
1998. From 1981 to September 1996, Mr. Zenie served as President, Chief
Executive Officer and a director of Zymark Corporation, a provider of laboratory
automation solutions. Mr. Zenie presently serves as a director of a number of
privately held companies, including CogniToy LLC, Process Packaging & Control,
Inc., Sensors for Medicine and Science, Inc., Cohesive Technologies, Inc.,
Decision Management International, Inc. and serves as Chairman of VelQuest
Corporation.
JAMES J. FELCYN, JR., age 59, became a director of the Company in
February 1999. From July 1994 to January 2000, Mr. Felcyn served as the Vice
President -- Finance and Administration, Chief Financial Officer and Treasurer
of Citrix Systems, Inc., a publicly traded software company. Mr. Felcyn is a
Certified Public Accountant and also serves on the Board of Directors of Optio
Software, Inc., which is traded on Nasdaq. Mr. Felcyn also served as a director
of a number of privately held companies, including Emergin, Inc., Silverback
Technology, Inc. and DataCore Software Corporation.
ROBERT C. KNEIP, age 54, became a director of the Company in May 2000.
Dr. Kneip has served as President and Chief Executive Officer of Wackenhut
Resources, Inc. since October 1996. From April 1988 until January 2000, Dr.
Kneip served as the Senior Vice President, Corporate Planning and Development of
The Wackenhut Corporation. Since he joined The Wackenhut Corporation in 1982,
Dr. Kneip has held various positions in The Wackenhut Corporation, including
Director, Power Generating Services; Director, Contracts Management; Vice
President, Contracts Management; and Vice President, Planning and Development.
Dr. Kneip started flexible staffing services by establishing OASIS Outsourcing,
Inc., a majority owned subsidiary of The Wackenhut Corporation in 1996 and
continues to be a major force in The Wackenhut Corporation's development of the
staffing services business. Prior to joining The Wackenhut Corporation, Dr.
Kneip was employed by the Atomic Energy Commission, the Nuclear Regulatory
Commission and Dravo Utility Constructors, Inc. He received a B.A. (Honors) from
the University of Iowa, and an M.A. and Ph.D. from Tulane University.
1
EXECUTIVE OFFICERS
Set forth below is biographical information for each of the Company's
executive officers who is not currently a director.
JOHN A. MARRAH, age 40, has served as the President of the Company
since July 2000 and as Chief Operating Officer since November 1999. Since
September 2000, Mr. Marrah has served as a director of Asset Software
Corporation, a wholly owned subsidiary of the Company. From November 1997 until
November 1999, Mr. Marrah served as the Senior Vice President of World Wide
Sales and Services for Workgroup Technology Corporation. From January 1996 until
November 1997, Mr. Marrah was Chief Operating Officer of XDB Systems, Inc., and
from February 1994 until January 1996, Mr. Marrah served as Vice President of
World Wide Sales of that company. Prior to 1995, Mr. Marrah served in various
sales-related positions for a number of companies, including Information
Dimensions, Inc., Oracle Corporation and Versant Object Technology.
MARTIN K. WEINBAUM, age 40, has served as the Company's Vice President
- -- Finance and Chief Financial Officer since January 1997, and the Company's
Secretary and Treasurer since May 1996. Since September 2000, Mr. Weinbaum has
served as a director of Asset Software Corporation, a wholly owned subsidiary of
the Company. Since October 1997, Mr. Weinbaum served as a director of the
Company's subsidiaries located in the United Kingdom and Australia until their
sale and disposal in 2001. From October 1994 to March 1995, Mr. Weinbaum served
as Controller of MediBar Medical Industries, a diagnostic medical services
provider located in Boca Raton, Florida. From January 1994 to October 1994, Mr.
Weinbaum served as the Chief Financial Officer of Interactive Technologies
Company, a pet food wholesale company located in Fort Lauderdale, Florida. From
November 1989 to December 1993, Mr. Weinbaum served as the Vice President --
Finance and Chief Financial Officer of Aspen Marine Group/Hawk Marine Power, a
high performance engine and boat manufacturer with locations in Greenback,
Tennessee and North Miami, Florida. From 1984 to 1988, Mr. Weinbaum, who is a
Certified Public Accountant, engaged in public accounting with the firms of
Levitsky & Berney, P.C. and Coopers & Lybrand.
JOY CRENSHAW, age 40, has served as the Company's Vice President of
Client Services since May 2000. From August 1997 to May 2000, Ms. Crenshaw
served as the Director of Installations. From July 1995 through July 1997, Ms.
Crenshaw served as the Manager of Product Control.
2
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION TABLES
The following table summarizes the aggregate compensation for each of
the years ended December 31, 1999, 2000 and 2001 paid to the Company's Chief
Executive Officer (the "CEO") and the Company's four most highly compensated
executive officers other than the CEO in 2001. The CEO and such other executive
officers are sometimes referred to herein as the "Named Executives."
SUMMARY COMPENSATION TABLE
Long-term
Annual Compensation (1) Compensation
--------------------------------- ------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options (#) Compensation
- ------------------ ---- -------- -------- ----------- ------------
Gary G. Hegna 2001 $200,000 -- -- $ 5,581(3)
Former Chief Executive Officer (2) 2000 $297,916 $ 38,700 150,000 --
1999 $262,500 $147,796 -- --
Allan J. Gardner 2001 $250,000 -- -- --
Chief Technology Officer 2000 $250,000 $ 28,200 42,500 --
1999 $250,000 $107,188 -- --
Wilburn W. Smith 2001 $250,000 -- -- --
Executive Vice President - Sales 2000 $250,000 $ 25,800 42,500 --
1999 $250,000 $108,088 -- --
John A. Marrah (4) 2001 $220,000 -- -- $ 10,279(5)
President and Chief Operating Officer 2000 $208,333 $ 21,120 50,000 $ 51,440(5)
1999 $ 26,515 -- 200,000 --
Martin K. Weinbaum 2001 $150,558 -- -- --
Vice President -Finance and Chief 2000 $129,873 $ 18,000 110,000 --
Financial Officer 1999 $114,604 $ 56,475 -- --
Joy Crenshaw (6) 2001 $115,133 -- -- --
Vice President - Client Services 2000 $ 98,267 $ 6,600 52,000 --
1999 $ 67,900 -- 4,000 $ 935(7)
- ------------
(1) The column for "Other Annual Compensation" has been omitted because
there is no compensation required to be reported in such column. The
aggregate amount of perquisites and other personal benefits provided to
each Named Executive is less than 10% of the total annual salary and
bonus of such officer.
(2) Mr. Hegna resigned as Chairman and CEO effective March 1, 2001.
(3) Represents cash payment for moving expenses incurred by Mr. Hegna.
(4) Mr. Marrah joined the Company in November 1999.
(5) Represents cash payment for moving expenses incurred by Mr. Marrah.
(6) Ms. Crenshaw became an officer the Company in May 2000.
(7) Represents cash payments under the Company's Profit Sharing Plan.
3
The following table sets forth information concerning the value
realized by the Named Executives upon exercise of stock options during the
fiscal year ended December 31, 2001, and the value of unexercised stock options
held by the Named Executives at December 31, 2001.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1)
Number of Securities Underlying Value of Unexercised
Unexercised Options At Fiscal In-The-Money Options at Fiscal
Shares Year-End (#) Year-End ($)
Acquired ------------------------------------ ------------------------------
on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ------------- ------------- ------------- -------------
Gary G. Hegna -- -- 394,120 -- -- --
Allan J. Gardner -- -- 10,625 31,875 -- --
Wilburn W. Smith -- -- 10,625 31,875 -- --
John A. Marrah -- -- 112,500 137,500 -- --
Martin K. Weinbaum -- -- 89,736 100,593 -- --
Joy Crenshaw -- -- 17,389 41,038 -- --
- --------------------
(1) No stock appreciation rights are held by any of the Named Executives.
COMPENSATION OF DIRECTORS
As compensation for serving on the Board, directors who are not also
employees of the Company receive an annual fee of $20,000. In addition, upon
appointment to the Board, each non-employee director receives an initial grant
of options to purchase 15,000 shares of Common Stock pursuant to the Company's
1998 Stock Option Plan, and options to purchase an additional 5,000 shares of
Common Stock each year thereafter. Additionally, Francis H. Zenie, James J.
Felcyn, Jr. and Robert C. Kneip, the non-employee directors, each received a fee
of $20,000 as compensation for their participation on a Special Committee formed
to review and evaluate options for a sale of our company.
OTHER EXECUTIVE COMPENSATION
On November 8, 2001, the company entered into retention agreements with
John Marrah and Martin K. Weinbaum. The purpose of the retention agreements was
to ensure that the company would benefit from their knowledge and experience
prior to and during the process of a potential strategic transaction involving
the company. The retention agreements award Mr. Marrah and Mr. Weinbaum a
one-time bonus equal to $250,000 and $75,000, respectively, if they are employed
by the company (or the surviving corporation) on the date on which a strategic
transaction is completed or if they are involuntarily terminated, other than for
cause, prior to the consummation of a strategic transaction.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee, which was formed in 1999,
currently consists of Robert C. Kneip and Francis H. Zenie. There were no
interlocks with other companies within the meaning of the SEC's proxy rules
during 2001.
4
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 29, 2002
regarding the beneficial ownership of Common Stock by (i) each shareholder known
to the Company to beneficially own more than five percent (5%) of the
outstanding shares of Common Stock; (ii) each director of the Company; (iii)
each executive officer of the Company named in the Summary Compensation Table
which appears elsewhere in this Form 10-K/A; and (iv) all directors and
executive officers as a group. The percentage of beneficial ownership for each
person or entity in the table is based on 12,422,474 shares of Common Stock
outstanding as of March 29, 2002, including for each person or entity any shares
of Common Stock which may be acquired by such person or entity within 60 days
upon exercise of outstanding options, warrants or other rights to acquire shares
of Common Stock.
Shares Beneficially Owned
---------------------------
Name and Address of Beneficial Owner(1) Number Percent
- --------------------------------------- --------- -------
Allan J. Gardner (2) .................... 2,196,250(3) 17.6%
Wilburn W. Smith (2) .................... 2,171,250(3) 17.4%
John A. Marrah (4) ...................... 114,000 *
Martin K. Weinbaum (5) .................. 107,263 *
Joy Crenshaw (6) ........................ 18,905 *
James J. Felcyn, Jr. (7) ................ 15,000 *
Francis H. Zenie (8) .................... 15,000 *
Robert C. Kneip (9) ..................... 8,750 *
Bear, Stearns. (10) ..................... 762,450 6.1%
Syngistix, Inc. (11) .................... 4,367,500 35.0%
All directors and executive officers as a
group (8 persons) (12) ............... 4,646,418 36.5%
- ---------------------
* Less than 1% of outstanding shares.
(1) Unless otherwise indicated, the address of each of the parties listed
is 1615 South Congress Avenue, Delray Beach, Florida 33445-6368.
(2) Includes 21,250 shares of common stock subject to options exercisable
within 60 days.
(3) Expected to be contributed to SG Merger Corp. prior to the SG Merger
(as defined in Item 13), if applicable.
(4) Includes 112,500 shares of common stock subject to options which are or
become exercisable within 60 days.
(5) Includes 107,263 shares of common stock subject to options which are or
become exercisable within 60 days.
(6) Includes 18,905 shares of common stock subject to options which are or
become excisable within 60 days.
(7) Includes 15,000 shares of common stock subject to options which are or
become exercisable within 60 days.
(8) Includes 15,000 shares of common stock subject to options which are or
become exercisable within 60 days.
(9) Includes 8,750 shares of common stock subject to options which are or
become exercisable within 60 days.
(10) According to a Schedule 13D filed by Bear, Stearns & Co. Inc. and The
Bear Stearns Companies Inc., the parent company of Bear, Stearns & Co.
Inc., each such reporting entity may be deemed to beneficially own the
same 762,450 shares of common stock. According to the Schedule 13D, the
principal place of business of Bear, Stearns & Co. Inc. is 245 Park
Avenue, New York, NY 10167.
(11) According to a Schedule 13D filed by Syngistix, Inc. ("Syngistix"). The
Schedule 13D indicates that Syngistix may be deemed to beneficially own
the same 4,367,500 shares of Common Stock as held by the Messrs. Smith
and Gardner. Pursuant to the terms of the merger agreement among the
Company, Citrus Merger Corp. ("Citrus"), Syngistix and, with respect to
Section 7.6(b)(1) thereof only, Core Technology Fund IV, LLC dated
January 25, 2002 (the "Syngistix Merger Agreement") and the Amendment
dated January 25, 2002 to the SG Merger Agreement (as defined in Item
13). According to Schedule 13D, the principal place of business of
Syngistix is 5340 Quebec Street, Suite 300, Englewood, CO 80111.
(12) Includes 319,918 shares of common stock subject to options which are or
become exercisable within 60 days.
5
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MERGER
On October 25, 2001, the Company entered into a merger agreement (the
"SG Merger Agreement") with SG Merger Corp. ("SG Merger"), a newly formed
company organized by Wilburn W. Smith and Allan J. Gardner, officers and board
members of the Company. SG Merger will be merged with and into the Company, with
the Company as the surviving corporation (the "Merger"). Pursuant to the terms
and subject to the conditions of the SG Merger Agreement, each share of common
stock, $0.01 par value per share, of the Company ("Common Stock") outstanding at
the effective time of the Merger (other than shares held by SG Merger and
Messrs. Smith and Gardner) will be converted into the right to receive $2.70 in
cash. The transaction is subject to a number of conditions, including that the
proposed merger with Syngistix (the "Syngistix Merger") is not completed and
approval of the Merger by holders of a majority of the common stock of the
Company not held by SG Merger and Messrs. Smith and Gardner, and other customary
conditions. Pursuant to the terms of the SG Merger Agreement, if the Syngistix
Merger is completed, the Company will be required to pay SG Merger (whose sole
shareholders are Messrs. Smith and Gardner) a termination fee of $1,679,100. The
SG Merger and the Syngistix Merger are described in greater detail in the Form
10-K filed with the SEC by the Company on March 8, 2002.
6
SIGNATURES
Pursuant to the requirements of 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.
ECOMETRY CORPORATION
(Registrant)
By: /s/ Wilburn W. Smith
-------------------------------------
Wilburn W. Smith
Chairman of the Board
Date: April 4, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf by the Registrant
and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Martin K. Weinbaum Vice President--Finance, Chief April 4, 2002
- -------------------------------------------- Financial Officer, Secretary and
Martin K. Weinbaum Treasurer (Principal Financial
and Accounting Officer)
/s/ Allan J. Gardner Chief Technology Officer and April 4, 2002
- -------------------------------------------- Director
Allan J. Gardner
/s/ Wilburn W. Smith Executive Vice President -- Sales April 4, 2002
- -------------------------------------------- and Chairman
Wilburn W. Smith
/s/ Francis H. Zenie Director April 4, 2002
- --------------------------------------------
Francis H. Zenie
/s/ Robert C. Kneip Director April 4, 2002
- --------------------------------------------
Robert C. Kneip
/s/ James J. Felcyn, Jr. Director April 4, 2002
- --------------------------------------------
James J. Felcyn, Jr.
7