U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
[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 0-7336
RELM WIRELESS CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 59-3486297
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7100 Technology Drive, West Melbourne, Florida 32904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (321) 984-1414
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. [ ]
EXPLANATORY NOTE
Pursuant to Rule 12b-15 of the Securities and Exchange Act of 1934, as
amended, RELM Wireless Corporation hereby files this Amendment No. 1 on Form
10-K/A to include in Part III, Items 10 - 13 of its Annual Report on Form 10-K
for the year ending December 31, 2001.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the Company are as follows:
Name Age Position
---- --- --------
Donald F. U. Goebert........................65 Chairman of the Board
David P. Storey.............................49 President and Chief Executive Officer
and Director
William P. Kelly............................45 Executive Vice President Finance and
Chief Financial Officer
Buck Scott .................................72 Director
Robert L. MacDonald (1).....................74 Director
Ralph R. Whitney Jr. (1)....................66 Director
James C. Gale (1)(2)........................51 Director
George N. Benjamin, III (1)(2)..............64 Director
1) Member of the audit committee.
2) Member of the compensation committee.
Each director holds his office until the next annual meeting of the
shareholders unless he resigns or is removed or disqualified. Officers are
elected by the board of directors and any number of offices may be held by the
same person.
The business experience of our executive officers and directors is set
forth below:
Donald F. U. Goebert has been our Chairman of the Board (and a director
of our predecessor) since March 1968. He was the President of our predecessor
from March 1968 to October 1988, and our President and Chief Executive Officer
from April 1993 to December 1997. He has been President of Chester County Fund,
Inc., a commercial real estate company, since 1968. Mr. Goebert is a director of
Investors Insurance Group, Inc., a commercial insurance company.
David P. Storey has been our President and Chief Executive Officer
since July 2000, after serving as our Chief Operating Officer from June 1998 to
July 2000. From November 1994 to June 1998, he was Senior Vice President of
Manufacturing of ANTEC Corp. a communications electronics company.
William P. Kelly has been our Vice President - Finance and Chief
Financial Officer since July 1997 and our Secretary since June 2000. From
October 1995 to June 1997, he was Vice President and Chief Financial Officer of
our subsidiary, RELM Communications, Inc. From January 1993 to October 1995, he
was the Financial Director of Harris Corp. Semiconductor Sector.
Buck Scott has been a director (and a director of our predecessor)
since 1980. Mr. Scott has been a private investor since January 1995. Mr. Scott
was the President of Electrical Energy Enterprises, Inc., a distributor of
electrical power equipment, from 1991 through 1994.
1
Robert L. MacDonald has been a director since February 1991. He is
retired. From 1953 to 1993, he was a director of Financial Aid Wharton Graduate
Division and Lecturer in Management, Wharton School, University of Pennsylvania.
Ralph R. Whitney Jr. has been a director since January 1992. Since
January 1971, Mr. Whitney has been the President and Chief Executive Officer of
Hammond Kennedy Whitney & Co., Inc., an investment banking company. Mr. Whitney
serves as a director in IFR Systems, Inc., a manufacturer of test equipment for
the military, Baldwin Technology Co., Inc., a manufacturer of printing press
equipment, First Technology, PLC, a manufacturer and supplier of electronic
optical sensors, Reinhold Industries, Inc., a manufacturer of composite
components in the aerospace, defense and commercial lighting industries, and
DURA Automotive Systems, Inc., a manufacturer of automobile windows, seat and
door assemblies.
James C. Gale has been a director since October 1993. Since September
1998, Mr. Gale has been a Managing Director of Sanders Morris Harris, an
investment banking company. From 1991 to 1998, Mr. Gale was a Managing Director
of Gruntal & Co., L.L.C., an investment banking and management company. Mr. Gale
is a director of Latshaw Enterprises, Inc., a manufacturer of power and
electrical cables, eResearch Technology, Inc., a provider of clinical research
support, and Amarin Corporation plc., a specialty pharmaceutical company.
George N. Benjamin, III has been a director since January 1996. He has
been the President and CEO of Keystone Networks, Inc. an optical network
developer since November, 1999, and was the President and CEO of BICC Cables
Corp., N.A., a manufacturer of electrical wires and cable, from August 1998
through June 1999. He has been the Consultant and Partner in Trig Systems, LLC,
a management and consulting company, since July 1987, President and CEO of Tie
Communications, Inc., a provider of telecommunication products, software and
services, from April 1992 to November 1995, and Group Vice President of The
Marmon Group, Inc., a management consulting company, prior to April 1992.
KEY EMPLOYEES
Other key personnel and their ages are as follows:
Harold B. Cook, age 56, has been our Vice President of Operations since
July 2000. Mr. Cook joined RELM in April 1997 as Director of Manufacturing.
Prior to joining us, Mr. Cook held the position of Director of Manufacturing
Operations at Computer Products Incorporated, Fujitsu America Inc., and Ampro
Corporation. Mr. Cook also held operations management positions at Storage
Technology Corporation and Harris Corporation. Mr. Cook holds a Bachelor's
degree in business administration and economics from Rollins College.
Thomas L. Morrow, age 50, has been our Senior Vice President and
Director - Government and Public Safety Sales and Marketing since December 1999.
From 1997 to December 1999, he was the owner of Tomorrow Sales and Marketing
Alternatives. From 1996 to 1997, he was Vice President World Wide Systems at
E.F. Johnson Company. From 1995 to 1996, he was Senior Vice President North
America Operations at Stanilite Pacific, LTD. From 1993 to 1995, he was
Territory Manager at Motorola, Inc. Mr. Morrow holds a Bachelor's degree in
marketing and international business from the University of Colorado.
2
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely on a review of Forms 3 and 4 furnished to the Company under Rule
16a-3 promulgated under the Exchange Act, with respect to fiscal 2001, the
Company is not aware of any director or officer who failed to file on a timely
basis, as disclosed in such forms, reports required by Section 16(a) of the
Exchange Act during fiscal 2001, except for Messrs. Benjamin, Gale, and Scott,
each of whom failed to file one Form 4 report disclosing one transaction.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the annual and long term compensation
during each of the last three years paid by us to Messrs. Storey and Kelly, who
served as our President and Chief Executive Officer and Executive Vice President
- - Finance, Chief Financial Officer, and Secretary, respectively, during 2001
(each a "Named Officer.") No other executive officer was paid salary and bonus
compensation by us which exceeded $100,000 during 2001.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
----------------------------------------- -----------------------------
Other Securities
Annual Underlying All Other
Name and Principal Salary Bonus Compensation Compensation Compensation
Position Year ($) ($) ($) Options (#) ($)(1)
- ------------------------------ ------ --------- --------- ------------- --------------- -----------
David P. Storey 2001 203,486 - - 245,000 7,105
President and 2000 192,385 20,833 - 55,000 3,000
Chief Executive 1999 224,982 - - 145,000 1,957
Officer
William P. Kelly 2001 129,187 - - 177,500 4,390
Executive Vice 2000 122,844 20,833 - 50,000 3,000
President - Finance, 1999 113,197 - - 75,000 3,000
Chief Financial Officer and
Secretary
(1) The amounts shown in the column titled "All Other Compensation" for
the years 1999 and 2000 include employer contributions to our 401(k) plan, and
for the year 2002 include both employer contributions to our 401(k) plan and
disability insurance premiums paid by the Company for the benefit of the Named
Officers.
3
The Named Officers did not receive any other annual compensation not
categorized as salary or bonus except for perquisites and other personal
benefits which in the aggregate did not exceed the lesser of $50,000 or 10% of
the total annual salary and bonus reported for such named officer.
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options under our 1997 Stock Option Plan to the Named Officers during 2001. In
addition, the table shows the hypothetical gains or "option spreads" that would
exist for the respective options. These gains are based on assumed rates of
annual compound stock price appreciation of 5% and 10% from the date the options
were granted over the full option term.
OPTION GRANTS IN 2001
Number of Potential Realizable
Securities Value at Assumed
Underlying Percentage of Annual Rates of Stock
Options Total Options Exercise or Price Appreciation
Granted to Employees in Base Price Expiration for Option Term
Name (#) 2001 ($/Sh) Date 5%($) 10%($)
- ---------------------- -------------- ---------------- ------------ --------- ------------- -------------
David P. Storey 245,000 46.4% $1.10 11/20/11 $169,487.10 $429,513.59
William P. Kelly 100,000 19.0% $1.00 07/18/11 $ 62,889.46 $159,374.25
77,500 14.7% $1.10 11/20/11 $ 53,613.27 $135,866.54
All options that were granted in 2001 to the Named Officers are
incentive stock options ("ISOs") under ss.422 of the Internal Revenue Code of
1986, as amended. The options are exercisable as of the date of grant. The
options were granted at fair market value on the date of the grant. The term of
the options is ten (10) years from the date of grant unless terminated earlier
due to termination of employment, disability or death.
The potential realizable value of the options granted in 2001 was
calculated by multiplying the number of shares underlying the options by the
excess of (a) the assumed market value of our common stock, if the market value
of our common stock were to increase 5% or 10% in each year of the options'
10-year term over (b) the base price shown. This calculation does not take into
account any taxes or other expenses which might be owed. The 5% and 10%
appreciation rates are set forth in the Securities and Exchange Commission rules
and no representation is made that our common stock will appreciate at these
assumed rates or at all.
We do not currently have (and have not previously had) any plan
pursuant to which any stock appreciation rights ("SARs") may be granted.
4
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information relating to stock options
exercised during 2001 by each of the Named Officers and the number and value of
stock options held on December 31, 2001 by each of them.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR ENDED DECEMBER 31, 2001
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Value Options at In-the-Money Options at
Acquired on Realized Dec. 31, 2001 (#) Dec. 31, 2001 ($)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- -------------- ------------ --------------- --------------- ------------- ----------------
David P. Storey - - 349,500 195,500 $2,750.00 -
William P. Kelly - - 177,800 124,700 $5,000.00 $2,500.00
The total value of unexercised options is based upon the difference
between the last sales price of our common stock on the NASDAQ National Market
System on December 31, 2001, which was $1.05 per share, and the exercise price
of the options, multiplied by the number of shares underlying the options.
DIRECTOR COMPENSATION
During 2001, we paid to each of our non-employee directors meeting fees
of $1,000 for attendance at each board meeting and $500 for attendance at each
meeting of any committee of the Board of Directors which was not held in
conjunction with a meeting of the Board. During 2001, we paid $50,000 to Mr.
Goebert for his services as Chairman of the Board. Pursuant to the terms of the
1996 Non-Employee Director Stock Option Plan, each non-employee director also
receives stock options in lieu of a quarterly cash retainer for service as a
director. Also, pursuant to the terms of the Plan, a grant of a stock option for
the purchase of 5,000 shares is made to each non-employee director on the date
of each annual meeting of shareholders at which that person is elected or
re-elected as a director (or if the annual meeting has not been held by June 30
of that year the grant is made as of June 30th of that year to each of the
persons qualifying and who has been a non-employee director for at least three
months). Options are granted at an exercise price equal to the fair market value
of our common stock on the date of grant, become fully exercisable eleven months
after the date of grant, or earlier upon a change of control as defined in the
Plan, and expire five years from the date of grant or earlier in the event
service as a director ceases. On June 13, 2001, a grant of stock options for the
purchase of 5,000 shares was made to each of our non-employee directors at an
exercise price of $1.03 per share.
5
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS
We have Post-Termination Benefits Agreements with David P. Storey and
William P. Kelly, our key executives. The agreements provide an incentive for
the executives to remain in our employ should a merger, sale, change in control
or other transaction occur by providing severance compensation if the executives
are terminated within six months following such a change of control or other
transaction. If an executive is terminated within the six month period, the
executive will be entitled to receive compensation equal to such executive's
annual compensation, payable in one lump sum within five business days after the
date of termination. In addition, all stock options granted under the 1997 Stock
Option Plan shall vest as of the closing date of a change of control or other
such transaction. The post-termination agreements also subject the executives to
general confidentiality and non-disparagement provisions as well as
non-competition and non-solicitation provisions for one year following
termination. Unless we provide written notice to the executives, the
post-termination agreements will automatically terminate on October 1, 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2001, the compensation committee of our board of directors was
composed of independent, outside directors, Messrs. Gale and Benjamin
(Chairman.) As noted above, our compensation program for our executives is
administered by the board of directors with the advice and counsel of the
compensation committee.
Neither of the compensation committee members is or has been our
officer or employee or an officer or employee of any of our subsidiaries. In
addition, neither Gale nor Benjamin has, or has had, any relationship with us
which is required to be disclosed under "Certain Relationships and Related
Transactions."
6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The table below shows, as of April 18, 2002, the number of shares of
common stock beneficially owned by:
o each person whom we know beneficially owns more than 5% of the
common stock,
o each director and nominee for director,
o each Named Officer included in the Summary Compensation Table,
and
o all executive officers and directors as a group.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
------------------------------------------------------
NAME OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ---------------------------- -------------------------------- --------------------
Special Situations Private Equity Fund, 523,077 (2) 6.1%
L.P., MG Advisers L.L.C., Austin W.
Marxe, and David Greenhouse
153 East 53 Street, New York, NY 10022
Donald F.U. Goebert 1,416,297 (3)(4)(5) 16.5%
400 Willowbrook Lane
West Chester, PA 19382
Ralph R. Whitney, Jr. 55,469 (6) *
Buck Scott 86,165 (6) 1.0%
James C. Gale 1,156,110 (6)(7) 13.4%
George N. Benjamin, III 53,100 (6) *
Robert L. MacDonald 25,000 (6) *
David P. Storey 349,500 (6) 3.9%
William P. Kelly 177,800 (6) 2.0%
All executive officers and directors 3,319,441 35.9%
as a group (9 persons)
- ---------------
*Less than 1%
1) Based on 8,599,072 shares of common stock issued and outstanding as of
April 18, 2002. Except as otherwise indicated, the persons named in
this table have sole voting and investment power with respect to all
shares of common stock listed, which include shares of common stock
that such persons have the right to acquire beneficial ownership of
within 60 days from April 18, 2002.
2) As disclosed in the Schedule 13G filed by Special Situations Private
Equity Fund, L.P. ("Special Situations), MG Advisers L.L.C., its
general partner ("MG,"), Austin Marxe ("Marxe") and David Greenhouse
("Greenhouse"), dated April 11, 2000, Special Situations and MG are
deemed to have sole power to vote or to direct the vote and to dispose
or to direct the disposition of 523,077 shares. Marxe and Greenhouse
are deemed to have shared power to vote or dispose of the shares by
virtue of being executive officers of MG Advisors. These shares are
issuable upon conversion of an 8% Convertible Subordinated Promissory
Note due December 31, 2004 with a principal amount of $1,700,000, at an
exercise price of $3.25.
7
3) Includes 90,942 shares owned by Chester County Fund, Inc., the majority
stockholder of which is Mr. Goebert, and 60,000 shares owned by a
partnership controlled by Mr. Goebert.
4) Includes 23,366 shares held in a custodial account for our Employee
Stock Purchase Program, of which Mr. Goebert is a custodian, and 789
shares held in a Trust under our 401(k) plan, of which Mr. Goebert is a
Trustee.
5) Includes 809,154 shares held jointly with his wife, and 3,887 shares
held in the name of his wife.
6) Share ownership of the following persons includes immediately
exercisable options or warrants as follows: for Mr. Whitney - 25,000
shares; for Mr. Scott - 25,000 shares; for Mr. Gale - 25,000 shares;
for Mr. Benjamin - 25,000 shares; for Mr. MacDonald - 25,000 shares;
for Mr. Storey - 349,500 shares; and for Mr. Kelly - 177,800 shares.
7) Mr. Gale and his wife jointly own 20,000 shares of our common stock.
Additionally, Mr. Gale is managing director of Sanders Morris Harris
("SMH"), an investment banking company. Sanders Morris Harris Corporate
Management LLC ("SMH LLC"), an affiliate of SMH, manages two funds
which purchased our common stock in the rights offering which closed in
March 2002 as follows: (i) 173,888 shares are owned by Corporate
Opportunities Fund LP ("COF LP"); and (ii) 937,222 shares are owned by
Corporate Opportunities Fund (Institutional) LP ("COFI".) Mr. Gale is
Chief Investment Officer of SMH LLC. All shares are owned directly by
the funds. In the rights offering, COF LP acquired warrants to purchase
173,888 shares which are exercisable commencing on February 12, 2003,
and COFI acquired warrants to purchase 937,222 shares which are
exercisable on February 12, 2003.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We will not enter into transactions with our officers, directors or
beneficial owners of five percent (5%) or more of our common stock on terms more
favorable to them than those terms that can be obtained by an unrelated third
party in transacting business with us.
8
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.
RELM WIRELESS CORPORATION
(Registrant)
Date: April 29, 2002 By: /s/David P. Storey
-------------------------------------
David P. Storey
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and or the dates indicated.
SIGNATURES TITLE DATE
By:/s/ Donald F. U. Goebert Chairman of the Board April 29, 2002
---------------------------------
Donald F. U. Goebert
By: /s/ David P. Storey President, Chief Executive Officer April 29, 2002
-------------------------------- and Director (Principal Executive
David P. Storey Officer)
By:/s/ Willilam P. Kelly Vice President - Finance, Chief April 29, 2002
--------------------------------- Financial Officer and Secretary
William P. Kelly (Principal Financial Officer)
By: /s/ Buck Scott Director April 27, 2002
--------------------------------
Buck Scott
By: /s/ James C. Gale Director April 29, 2002
--------------------------------
James C. Gale
By: /s/ Robert L. MacDonald Director April 29, 2002
--------------------------------
Robert L. MacDonald
By: /s/ Ralph R. Whitney Jr. Director April 29, 2002
--------------------------------
Ralph R. Whitney Jr.
By: /s/ George N. Benjamin, III Director April 29, 2002
--------------------------------
George N. Benjamin, III
9