SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
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(AMENDMENT NO. 2)
(ADDING ITEMS 10 -14 AND AMENDING ITEM 15 ONLY)
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, 2003
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 0-29359
GOAMERICA, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3693371
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
433 Hackensack Avenue, Hackensack, New Jersey 07601
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 996-1717
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of Each Exchange on Which Registered
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None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
- -------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
- --------------------------------------------------------------------------------
Yes: X No:
----- -----
- --------------------------------------------------------------------------------
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|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes: No: X
----- -----
The aggregate market value of the voting common equity of the registrant
held by non-affiliates (for this purpose, persons and entities other than
executive officers, directors, and 5% or more shareholders) of the registrant,
as of the last business day of the registrant's most recently completed second
fiscal quarter (June 30, 2003), was $15,770,560.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 31, 2004:
Class Number of Shares
----- ----------------
Common Stock, $0.01 par value 161,332,108
EXPLANATORY NOTE
This Amendment No. 2 on Form 10-K/A to the Annual Report on Form 10-K (the
"Annual Report") of GoAmerica, Inc. (the "Company" or "GoAmerica") filed on
March 10, 2004 with the Securities & Exchange Commission (the "SEC") is filed
solely for the purpose of including information that was to be incorporated by
reference from the Registrant's definitive proxy statement pursuant to
Regulation 14A of the Securities and Exchange Act of 1934. The Company will not
file its proxy statement for its annual meeting of stockholders within 120 days
of its fiscal year ended December 31, 2003 and is therefore amending and
restating in their entirety Items 10, 11, 12, 13 and 14 of Part III of the
Annual Report. In addition, pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934, we are including with this Amendment No. 2 certain
currently dated certifications. Except as described above, no other amendments
are being made to the Annual Report. This Form 10-K/A does not reflect events
occurring after the March 10, 2004 filing of our Annual Report or modify or
update the disclosure contained in the Annual Report in any way other than as
required to reflect the amendments discussed above and reflected below
TABLE OF CONTENTS
Item Page
---- ----
PART III 10. Directors and Executive Officers of the Registrant..................... 3
11. Executive Compensation................................................. 8
12. Security Ownership of Certain Beneficial Owners and Management......... 15
13. Certain Relationships and Related Transactions......................... 16
14. Principal Accountant Fees and Services................................. 16
PART IV 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....... 18
SIGNATURES................................................................................. 19
EXHIBIT INDEX.............................................................................. 20
2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
BOARD OF DIRECTORS
We currently have six directors. As set forth in our amended and restated
certificate of incorporation, the terms of office of the members of the Board of
Directors are divided into three classes: Class A, whose term will expire at the
2004 Annual Meeting of Stockholders; Class B, whose term will expire at the 2005
Annual Meeting of Stockholders; and Class C, whose term will expire at the 2006
Annual Meeting of Stockholders. The current Class A directors are Mark Kristoff
and Joseph Korb, the current Class B director is Daniel Luis, and the current
Class C directors are Aaron Dobrinsky, Alan Docter and King Lee. At each annual
meeting of stockholders, the successors to directors whose terms then expire
will be elected to serve from the time of election and qualification until the
third annual meeting following election. Our by-laws permit the Board of
Directors to increase or decrease the size of the Board of Directors. Any
additional directorships resulting from an increase in the number of directors
will be distributed among the three classes so that, as nearly as possible, each
class will consist of one-third of the total number of directors. This
classification of the Board of Directors may have the effect of delaying or
preventing changes in control or management of GoAmerica. The following table
provides additional information regarding the members of our Board of Directors:
SERVED AS A POSITIONS WITH
NAME AGE DIRECTOR SINCE THE COMPANY
---- --- -------------- -----------
Aaron Dobrinsky...................... 40 1996 Chairman of the Board
Daniel Luis.......................... 37 2003 Chief Executive Officer
and Director
Alan Docter.......................... 60 1996 Director
Joseph Korb.......................... 52 1996 Director
Mark Kristoff........................ 42 1998 Director
King Lee............................. 63 2003 Director
Aaron Dobrinsky founded GoAmerica in 1996 and served as our Chairman of
the Board and Chief Executive Officer from our inception in 1996 until January
2003, when he was appointed Executive Chairman. Upon completion of the
Financing, Mr. Dobrinsky ceased serving as an executive officer of the Company
and was named Chairman. Mr. Dobrinsky was named Chief Executive Officer of Arc
Communications, Inc. (a publicly traded, interactive multimedia program
developer which, upon completion of its pending merger with RoomLinX, Inc., will
be a provider of wireless high-speed Internet network solutions for the
hospitality industry) in April 2004.
Daniel Luis joined our Board of Directors in January 2003 at the time he
was elected our Chief Executive Officer. He previously served as our President
and Chief Operating Officer from May 2002 until January 2003. Mr. Luis is also
President and Chief Executive Officer of Wynd Communications Corp., which became
a wholly owned subsidiary of GoAmerica in June 2000. Mr. Luis joined Wynd in
1994 and has held his current positions with Wynd since 1998.
Alan Docter joined our Board of Directors in October 1996 at the time of
his initial investment in GoAmerica. Since 1990, Mr. Docter has been an
early-stage investor in technology companies, including M.A.I.D. plc (now
BrightStation), ViaWeb (sold to Yahoo!), Butterfly V.L.S.I. Ltd. (sold to Texas
Instruments) and Invino Corp. (sold to Youth Stream Media Networks). Mr. Docter
has served as President of Continental Mining and Metallurgical Corporation
since 1991 and as President of CMMC Ventures, Inc. since 1999. He has also
served as Vice Chairman of Considar, Inc., an international metals trading
company, since 1995. Mr. Docter serves on the boards of directors of a number of
privately held companies.
Joseph Korb joined GoAmerica in 1997 as Executive Vice President and has
been a director since October 1996. In May 2002, Mr. Korb was appointed as our
Executive Vice Chairman, Strategy and Strategic Alliances. He also served as our
President from November 2000 until May 2002. Upon completion of the Financing,
he remained a director while ceasing to serve as an executive officer of the
Company. Mr. Korb currently serves as a board member and Vice President of the
Portable Computing and Communications Association, an industry trade
association.
Mark Kristoff joined our Board of Directors in June 1998. Since 1991, Mr.
Kristoff has been President and Chief Operating Officer of Considar, Inc., an
international metals trading company. Since 1990, Mr. Kristoff also has been an
early-stage investor in many technology companies and serves on the boards of
directors of a number of privately held companies.
King Lee joined our Board of Directors in January 2003. Mr. Lee currently
serves as the Chief Executive Officer of Bravanta, Inc. During his career he has
served as the chief executive officer of a number of companies both public and
private. Mr. Lee has spent the last ten years investing in turnarounds and
during that same period he was also the co-founder of Wynd Communications
Corporation, which became a wholly owned subsidiary of GoAmerica in June 2000.
He also served on the board of directors of Wynd Communications Corporation
until its acquisition by GoAmerica. Mr. Lee serves on the boards of directors of
a number of privately held companies.
Committees and Meetings of the Board
The Board of Directors held 16 meetings during 2003. During this period,
each incumbent member of the Board of Directors attended or participated in at
least 75% of the aggregate of (i) the total number of meetings of the Board of
Directors (held during the period for which such person has been a director) and
(ii) the total number of meetings held by all Committees of the Board on which
each such director served (during the periods such director served). The Board
of Directors has three standing committees: the Audit Committee, the
Compensation Committee and the Nominating Committee.
The Compensation Committee approves salaries and incentive compensation
for our executive officers and key employees, administers and grants awards
under the Company's 1999 Stock Plan and administers the terms of outstanding
options. The Compensation Committee is currently comprised of Messrs. Docter,
Kristoff and Lee, with Mr. Docter serving as Chairman. The Compensation
Committee held two meetings during 2003.
The Audit Committee's responsibilities include: (i) evaluating and the
engagement of the Company's independent auditors; (ii) reviewing and reporting
on the results and scope of their audit findings; (iii) reviewing the Company's
periodic reports filed with the Securities and Exchange Commission; and (iv)
monitoring, on a periodic basis, the internal controls of the Company. The Audit
Committee is currently comprised of Messrs. Docter, Kristoff and Lee, with Mr.
Lee serving as Chairman. The Audit Committee held four meetings during 2003. The
Company's Board of Directors has determined that King Lee constitutes an "audit
committee financial expert", as such term is defined by the SEC. Mr. Lee has
also been determined to be "independent" within the meaning of SEC and Nasdaq
regulations
The Nominating Committee's responsibilities include recommending to the
Board of Directors qualified individuals to serve on the Company's Board of
Directors. The Nominating Committee will not consider any nominees recommended
by the Company's security holders. The Nominating Committee is currently
comprised of Messrs. Dobrinsky, Docter and Kristoff.
EXECUTIVE OFFICERS
The following table identifies the current executive officers of the
Company:
CAPACITIES IN IN CURRENT
NAME AGE WHICH SERVING POSITION SINCE
- ---- --- ------------- --------------
Daniel R. Luis....................... 37 Chief Executive Officer 2003
Donald G. Barnhart (1)............... 46 Vice President, Chief Financial Officer 2004
Jesse Odom (2)....................... 38 Chief Technology Officer 2000
(1) Donald Barnhart joined GoAmerica in 1999 and became its Vice President
and Controller in 2000. He was appointed Chief Financial Officer upon
completion of the Financing. Prior to joining GoAmerica, Mr. Barnhart
held various finance positions with Bogen Communications and operated his
own accounting and consulting firm. Mr. Barnhart is a CPA in New Jersey.
(2) Jesse Odom joined GoAmerica in 1996 as Vice President of Network
Operations. He was appointed Chief Technology Officer in November 2000.
Prior to joining GoAmerica, Mr. Odom served as Vice President of Network
Engineering at American International Ore Corporation from 1991 to 1996.
None of our executive officers is related to any other executive officer
or to any director of the Company. Our executive officers are elected annually
by the Board of Directors and usually serve until their successors are duly
elected and qualified.
SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our directors, officers, and stockholders who
beneficially own more than 10% of any class of our equity securities registered
pursuant to Section 12 of the Exchange Act, to file initial reports of ownership
and reports of changes in ownership with respect to our equity securities with
the Securities and Exchange Commission. All reporting persons are required to
furnish us with copies of all reports that such reporting persons file with the
SEC pursuant to Section 16(a). Based on our review of the copies of such forms
received by us or written representations from such reporting persons, each such
reporting person filed all of their respective reports pursuant to Section 16(a)
on a timely basis during 2003.
CODE OF ETHICS
GoAmerica has implemented a code of ethics applicable to its directors,
executive officers and other senior financial personnel. The Company will
furnish (free of charge) a copy of this code of ethics to any person who
requests a copy either by calling Investor Relations at (201) 996-1717 or by
submitting a written request to Investor Relations at GoAmerica, Inc., 433
Hackensack Avenue, Hackensack, New Jersey 07601.
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY OF COMPENSATION IN 2003, 2002 AND 2001
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to
each person who served as the Company's Chief Executive Officer at any time
during 2003, regardless of compensation level, and each other executive officer
of the Company whose aggregate cash compensation in 2003 approximated $100,000
or more at the end of 2003 (collectively, the "Named Executives"), for the years
ended December 31, 2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
- ------------------------------------- ----------- ----------------------------------------- ---------------- ---------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
----------------------------------------- ---------------- ---------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OTHER ANNUAL SECURITIES ALL OTHER
COMPEN-SATION UNDERLYING
(6) OPTIONS COMPEN-SATION
($) ($) ($) (#) ($)
- ------------------------------------- ----------- ------------- ------------ -------------- ---------------- ---------------
Aaron Dobrinsky............... 2003 98,253(2) -- -- -- 3,900(3)
Executive Chairman of the Board; 2002 225,000 -- -- 306,251 3,900(3)
former Chief Executive Officer 2001 225,000 --(4) -- 236,037(4) 3,333(3)
(until January 2003)
Joseph Korb................... 2003 98,603(5) -- -- -- 3,834(3)
Executive Vice Chairman, Strategy 2002 225,000 -- -- 306,250 3,834(3)
and Strategic Alliances; former 2001 225,000 78,679(6) -- -- 4,036(3)
President (until May 2002)
Daniel R. Luis................ 2003 179,706(7) -- -- -- 3,351(3)
Chief Executive Officer since 2002 214,571 -- -- 641,251 3,351(3)
January 2003; former President 2001 174,134 -- -- -- --
and Chief Operating Officer (from
May 2002 to January 2003)
Francis J. Elenio (8)......... 2003 115,275(8) -- -- -- 2,900(3)
Chief Financial Officer, 2002 185,296 -- -- 250,350 3,513(3)
Treasurer and Secretary 2001 180,000 10,000(9) -- 120,000(9) --
Donald G. Barnhart............ 2003 154,884 -- -- -- --
Chief Financial Officer 2002 120,865 -- -- 101,250 --
Since March 2004; 2001 109,172 12,500(13) -- 17,500(13) --
Principal Financial Officer
(from September 2003 to March 2004)
Jesse Odom.................... 2003 164,613(10) -- -- -- 3,351(3)
Chief Technology Officer 2002 185,296 -- -- 250,350 7,235(3)
2001 180,000 40,000(11) 190,625(12) 30,000(11) 5,980(3)
(1) Except as otherwise indicated, the bonus awards were earned in the year
indicated and were paid in the following year.
(2) Mr. Dobrinsky ceased receiving his base salary effective June 23, 2003.
(3) Represents the dollar value of automobile lease payments paid by or on
behalf of the Company for the benefit of the executive.
(4) Mr. Dobrinsky's 2001 fiscal year bonus consisted of options to purchase
236,037 shares of Common Stock having an above-market exercise price of
$1.89 on the date of grant in 2002.
(5) Mr. Korb ceased receiving his base salary effective June 23, 2003.
(6) Such bonus amount was paid during 2001.
(7) Mr. Luis deferred approximately $35,000 of his base salary until 2004.
(8) Mr. Elenio resigned as Chief Financial Officer of the Company effective
August 15, 2003.
(9) Mr. Elenio's 2001 fiscal year bonus consisted of $10,000 cash and options
to purchase 120,000 shares of Common Stock having a fair market value of
$1.89 per share on the date of grant in 2002.
(10) Mr. Odom deferred approximately $15,000 of his base salary until 2004.
(11) Mr. Odom's 2001 fiscal year bonus consisted of $40,000 cash and options to
purchase 30,000 shares of Common Stock having a fair market value of $1.89
per share on the date of grant in 2002.
(12) Represents the dollar value of the difference between the exercise price
($1.0625) of options to purchase 50,000 shares of the Company's Common
Stock and the fair market value ($4.88) of the Common Stock on the
exercise date.
(13) Mr. Barnhart's 2001 fiscal year bonus consisted of $12,500 cash and
options to purchase 7,500 shares of common stock having a fair market
value of $1.89 per share on the date of grant in 2002.
OPTION GRANTS IN 2003
There were no stock options granted to Named Executives during 2003.
EQUITY COMPENSATION PLANS
The following table provides certain information as of December 31,
2003 with respect to each of our equity compensation plans:
- --------------------------- ---------------------------- -------------------------- --------------------------------
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER
ISSUED UPON EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
PLAN CATEGORY (A) (B) (C)
- --------------------------- ---------------------------- -------------------------- --------------------------------
Equity compensation plans
approved by security
holders 6,156,400 $1.32 4,659,789
Equity compensation plans
not approved by security
holders -- -- --
Total (1) 6,156,400 $1.32 4,659,789
(1) Excludes warrants to purchase 500,00 shares at $16.00 per share, issued in
connection with strategic alliances. Also excludes warrants exercisable at
$0.15 per share granted in connection with the Financing. No shareholder
vote was required with respect to the $16.00 warrants or with respect to
certain of the $0.15 warrants
On August 3, 1999, we adopted the GoAmerica Communications Corp. 1999
Stock Option Plan. This plan provided for the granting of options to purchase
shares of common stock. No further options will be granted under the GoAmerica
Communications Corp. 1999 Stock Option Plan.
In December 1999, our Board of Directors adopted the GoAmerica, Inc. 1999
Stock Plan (the "Plan") as a successor plan to the GoAmerica Communications
Corp. 1999 Stock Option Plan, pursuant to which 4,800,000 additional shares of
our common stock have been reserved for issuance to selected employees,
non-employee directors and consultants. In May 2001, our shareholders approved
an increase in the maximum number of shares issuable under the Plan from
4,800,000 to 10,624,743 shares.
Under the terms of the Plan, a committee of our Board of Directors may
grant options to purchase shares of our common stock to our employees and
consultants at such prices as may be determined by the committee. The Plan
provides for award grants in the form of incentive stock options and
non-qualified stock options. Options granted under the Plan generally vest over
4 years and expire after 10 years.
AGGREGATED OPTION EXERCISES IN 2003 AND YEAR-END OPTION VALUES
The following table presents information regarding the number of stock
options held by the Named Executives at December 31, 2003 and the value of
in-the-money stock options held by such persons at December 31, 2003. The
calculation of the value of unexercised options is based upon a market price of
$0.37 per share, representing the closing sale price of one share of the
Company's common stock on December 31, 2003. Frank Elenio was the only Named
Officer who exercised stock options during 2003. Mr. Elenio exercised options
covering 250,350 shares of the Company's Common Stock. The value realized with
respect to such option exercise (the aggregate number of options exercised
multiplied by the difference between the market price on the date of exercise
and the exercise price) was approximately $45,000.
NUMBER OF SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END (#) OPTIONS AT FISCAL YEAR-END ($)
----------------------------------------------- ----------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Aaron Dobrinsky 397,359 197,861 147,023 73,209
Joseph Korb 427,069 119,182 148,015 44,097
Daniel R. Luis 694,601 276,682 257,002 102,376
Donald Barnhart (1) 109,211 49,539 16,043 14,120
Jesse Odom 442,922 107,428 163,881 39,748
Francis J. Elenio 352,500 60,000
(1) Mr. Barnhart was elected as Chief Financial Officer of the Company
effective March 10, 2004.
COMPENSATION OF DIRECTORS
Historically, non-employee (or "independent") directors serving on our
Board of Directors received annual compensation of $20,000 either in cash or
Company securities equivalents. In addition, each independent director, upon
initial election to the Board of Directors prior to 2003, received options to
purchase up to 64,000 shares of the Company's Common Stock. In January 2003,
Messrs. Docter and Kristoff each received $15,000 as compensation for 2002.
Additionally, in January 2003, the Board of Directors voted to amend the
compensation of the Board of Directors for 2003. Under such changes,
non-employee directors serving on our Board of Directors are entitled to receive
a $5,000 per quarter retainer and per meeting fees of $1,000 for each in person
Board meeting attended, and $500 for each telephonic Board meeting attended.
Each committee member is entitled to receive $500 for each Board Committee
meeting attended. Additionally, each independent director received 300,000 stock
options in 2003 (and upon a new director's election to the Board) and will be
entitled to receive 75,000 stock options annually each subsequent year that each
such director remains on the Board. All future option grants shall have an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant and generally shall vest at a rate of one-third per year from
the date of grant. Each director will be reimbursed by the Company for his or
her reasonable expenses incurred in connection with his or her participation in
our Board meetings. In July 2003, all three of the independent directors elected
to defer receipt of all fees for the balance of the year and until the
completion of the Financing.
Mr. Dobrinsky is a party to an agreement with the Company, effective as of
May 6, 2002 and amended as of March 10, 2004, under which he now serves as the
Company's Chairman of the Board, receiving director compensation equal to the
Company's independent directors but receiving no salary. The Compensation
Committee approved a decrease in Mr. Dobrinsky's base salary; from $225,000 to
$200,000 effective January 20, 2003. Mr. Dobrinsky voluntarily reduced his base
salary to $100,000 as of May 16, 2003, and on June 15, 2003, the Compensation
Committee approved a decrease in Mr. Dobrinsky's base salary to $0 effective
June 23, 2003. Mr. Korb was a party to an agreement with the Company, effective
as of May 6, 2002, under which he most recently served as the Company's
Executive Vice Chairman, Strategy and Strategic Alliances at an initial base
salary of $225,000. Mr. Korb's employment agreement was terminated as of March
10, 2004 upon completion of the Financing, with the Company agreeing to use
commercially reasonable efforts to nominate him for re-election to the Company's
Board of Directors at the 2004 Annual Meeting. The Compensation Committee
approved a decrease in Mr. Korb's base salary to $200,000 effective January 20,
2003. Mr. Korb voluntarily reduced his base salary to $100,000 as of May 16,
2003, and on June 15, 2003, the Compensation Committee approved a decrease in
Mr. Korb's base salary to $0 effective June 23, 2003. Mr. Korb shall receive
director compensation equal to the Company's independent directors. Mr. Luis is
a party to an agreement with the Company, effective as of May 6, 2002 under
which he now serves as our Chief Executive Officer at an initial base salary of
$225,000, subject to annual adjustment. On December 16, 2002, the Compensation
Committee approved a decrease in Mr. Luis' base salary to $200,000 effective
January 20, 2003. Mr. Luis elected to defer approximately $35,000 of his 2003
salary until completion of the Financing. Mr. Odom is a party to an agreement
with the Company, effective as of May 6, 2002 under which he serves as the
Company's Chief Technology Officer at an initial base salary of $180,000. The
Compensation Committee approved a decrease in Mr. Odom's base salary to $165,000
effective January 20, 2003. Mr. Odom elected to defer approximately $15,000 of
his 2003 salary until completion of the Financing. The Compensation Committee
may award any or all of the above individuals additional bonus payments or
option grants in its discretion. Mr. Elenio was a party to an agreement with the
Company, effective as of May 6, 2002, under which he served as the Company's
Chief Financial Officer, Treasurer and Secretary at an initial base salary of
$180,000. The Compensation Committee approved a decrease in Mr. Elenio's base
salary to $165,000 effective January 20, 2003 and approved a decrease in Mr.
Elenio's base salary to $150,000 effective June 23, 2003. Mr. Elenio resigned
from the Company as of August 15, 2003.
The initial term of each such agreement was for three years. Mr.
Dobrinsky's amended employment agreement does not provide currently for a term
extension but may renew for one-year periods thereafter. The Compensation
Committee has authorized amendments to the Company's employment agreements with
Messrs. Luis and Odom, which have been agreed to in principal and are currently
being prepared; such amendments will include extending the terms of employment
through May 2006. The Compensation Committee also authorized the execution of a
new employment agreement with Mr. Barnhart, which is filed as an exhibit to this
Form 10-K/A. In the event any of Messrs. Dobrinsky, Luis, Odom or Barnhart is
terminated without cause, resigns for good reason or, in the case of Mr.
Dobrinsky, is not reelected to the Company's Board of Directors, he is currently
entitled to receive severance in accordance with the Company's severance policy
for executive officers in effect at the time of termination, calculated at their
respective base salary as of specific dates. Mr. Dobrinsky will also receive up
to $800 per month in automobile allowances and will be reimbursed for additional
automobile expenses incurred in connection with his duties. Each of Messrs.
Luis, Odom and Barnhart will also receive up to $500 per month in automobile
allowances and will be reimbursed for additional automobile expenses incurred in
connection with their duties. In addition, Mr. Dobrinsky is eligible to be a
beneficiary of a term life insurance policy in his name, in the face amount of
up to $1.0 million, for which the Company would pay the premiums. Each
employment agreement also contains certain invention assignment and
confidentiality provisions and also requires that the Company maintain standard
directors and officers insurance of no less than $10.0 million.
The Company requires all employees to sign an agreement pursuant to which
they agree to maintain the confidentiality of our proprietary information, to
assign any inventions to us, and to agree not to solicit our customers,
suppliers or employees away from us.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Docter
(Chairman), Kristoff and Lee. None of these individuals are or were at any time
officers or employees of the Company. No executive officer of the Company has
served as a director or member of the Compensation Committee (or other committee
serving an equivalent purpose) of any other entity, one of whose executive
officers served as a director or member of the Compensation Committee of the
Company.
No interlocking relationship exists between our Board of Directors or
Compensation Committee and the board of directors or compensation committee of
any other company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
COMMON STOCK
The following table sets forth certain information, as of March 31, 2004,
with respect to holdings of the Company's Common Stock by (i) each person known
by the Company to beneficially own more than 5% of the total number of shares of
Common Stock outstanding as of such date, based on currently available Schedules
13D and 13G filed with the SEC, (ii) each of the Company's directors and Named
Executives, and (iii) all directors and officers as a group. Unless otherwise
indicated, the address for the individuals below is that of the Company:
GoAmerica, Inc., 433 Hackensack Avenue, Hackensack, New Jersey 07601.
AMOUNT AND NATURE OF BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS(2)
- ------------------------------------ --------- --------
(i) Certain Beneficial Owners:
Austin W. Marxe and David M. Greenhouse 20,921,244 (3) 13.8%
153 East 53rd Street, 55th Floor
New York, New York 10022
(ii) Directors and Named Executives:
Donald Barnhart ....................................... 117,815 (4) *
Aaron Dobrinsky........................................ 3,329,007 (5) 2.1%
Alan Docter............................................ 583,622 (6) *
Joseph Korb............................................ 1,452,145 (7) *
Mark Kristoff.......................................... 394,770 (8) *
King Lee............................................... 212,241 (9) *
Daniel R. Luis......................................... 697,601 (10) *
Jesse Odom............................................. 442,922 (11) *
(iii) All directors and officers as a
group (8 persons)............................ 7,230,123 (12) 4.5%
* Less than one percent.
(1) Except as set forth in the footnotes to this table and subject to
applicable community property law, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by such stockholder.
(2) Applicable percentage of ownership is based on an aggregate of 161,332,108
shares of Common Stock outstanding on March 31, 2004, plus any then
exercisable stock options and warrants held by each such holder, plus
options and warrants which will become exercisable by such holder within
60 days after March 31, 2004.
(3) According to Schedule 13G filed with the SEC on April 7, 2004, as of March
31, 2004, number of shares reported consists of 20,641,244 shares of
Common Stock and Warrants to purchase 280,000 shares of Common Stock. This
amount includes 3,401,677 shares of Common Stock and 46,144 Warrants owned
by Special Situations Cayman Fund, L.P. ("Cayman"), 3,201,457 shares of
Common Stock and 43,428 Warrants owned by Special Situations Private
Equity Fund, L.P. ("SSPE"), 478,876 shares of Common Stock and 6,496
Warrants owned by Special Situations Technology Fund, L.P. ("Technology"),
2,443,923 shares of Common Stock and 33,152 Warrants owned by Special
Situations Technology Fund II, L.P. ("Tech 2"), and 11,115,311 shares of
Common Stock and 150,780 Warrants owned by Special Situations Fund III,
L.P. ("SSF3"). Messrs. Marxe and Greenhouse are the controlling principals
of AWM Investment Company, Inc. ("AWM"), the general partner of and
investment adviser to Cayman. AWM also serves as the general partner of
MGP Advisers Limited Partnership, the general partner of and investment
adviser to SSF3. Messrs. Marxe and Greenhouse are also members of MG
Advisers L.L.C., the general partner of and investment adviser to SSPE,
and members of SST Advisers, L.L.C., the general partner of and investment
adviser to Technology and Tech 2.
(4) Includes 109,838 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(5) Includes 400 shares held for the benefit of Mr. Dobrinsky's minor
children. Mr. Dobrinsky has voting and dispositive power with respect to
such shares. Also includes 397,359 shares of Common Stock underlying
options which are exercisable as of March 31, 2004 or within 60 days after
such date.
(6) Includes 254,486 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(7) Includes 427,069shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(8) Includes 254,486 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(9) Includes 162,486 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date. Also
includes 46,755 shares held by the Lee Living Trust. Mr. Lee is a
co-trustee, but not a beneficiary, of the Lee Living Trust. Also includes
3,000 shares of Common Stock underlying warrants which are immediately
exercisable held by the Lee Living Trust.
(10) Includes 694,601 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(11) Includes 442,922 shares of Common Stock underlying options which are
exercisable as of March 31, 2004 or within 60 days after such date.
(12) Includes 2,746,247 shares of Common Stock underlying options and warrants
which are exercisable as of March 31, 2004 or within 60 days after such
date. Excludes Mr. Elenio's shares as he ceased serving as an executive
officer prior to March 31, 2004.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There have been no transactions involving any of Messrs. Docter, Kristoff or Lee
or any other insiders to be disclosed since January 1, 2003 under the heading
"Compensation Committee Interlocks and Insider Participation" or otherwise.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and
the Audit Committee's charter, all audit and audit-related work and all
non-audit work performed by the Company's independent accountants, WithumSmith +
Brown P.C. ("WithumSmith"), is approved in advance by the Audit Committee,
including the proposed fees for such work. The Audit Committee is informed of
each service actually rendered.
Audit Fees. Audit fees billed or expected to be billed to the Company by
WithumSmith for the audit of the financial statements included in the Company's
Annual Reports on Form 10-K, and reviews of the financial statements included in
the Company's Quarterly Reports on Form 10-Q, for the years ended December 31,
2003 and 2002 totaled approximately $75,000 and $55,000 respectively.
Audit-Related Fees. The Company was billed $10,000 and $10,707 by
WithumSmith for assurance and related services rendered by WithumSmith during
the fiscal years ended December 31, 2003 and 2002 that are reasonably related to
the performance of the audit or review of the Corporation's financial statements
and are not reported under the immediately preceding paragraph.
Tax Fees. The Company was billed an aggregate of $15,000 by WithumSmith
and other professionals for each of the fiscal years ended December 31, 2003 and
2002 for tax services, principally advice regarding the preparation of income
tax returns.
All Other Fees. The Company was billed an aggregate of $7500 and $5,000 by
WithumSmith for the fiscal years ended December 31, 2003 and 2002, respectively,
for permitted non-audit services, principally advice regarding (i) the Company's
Registration Statement on Form S-3 filed on March 10, 2004 immediately after the
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 2003, and (ii) the Company's 401(k) plan.
Other Matters. The Audit Committee of the Board of Directors has
considered whether the provision of the Audited-Related Fees, Tax Fees and all
other fees are compatible with maintaining the independence of the Company's
principal accountant.
Applicable law and regulations provide an exemption that permits certain
services to be provided by the Company's outside auditors even if they are not
pre-approved. The Company has not relied on this exemption at any time since the
Sarbanes-Oxley Act was enacted.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(3) Exhibits.
10.1 Amendment, dated as of March 10, 2004 (filed herewith), to Employment
Agreement by and between GoAmerica and Aaron Dobrinsky, dated as of May 6,
2002.
10.2 Termination Agreement, dated as of March 10, 2004 (filed herewith), to
Employment Agreement by and between GoAmerica and Joseph Korb, dated as of
May 6, 2002.
10.3 Employment Agreement, dated as of March 10, 2004, between GoAmerica and
Donald Barnhart (filed herewith)
31.1 Certification of the Chief Executive Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification of Chief Financial Officer as required by Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
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 the
Registrant's Annual Report on Form 10-K to be signed on its behalf by the
undersigned, thereunto duly authorized this 29th day of April, 2004.
GOAMERICA, INC.
By: /s/ Daniel R. Luis
------------------------------
Daniel R. Luis,
Chief Executive Officer
/s/ Donald G. Barnhart
------------------------------
Donald G. Barnhart,
Vice President, Chief Financial Officer
EXHIBIT INDEX
10.1 Amendment, dated as of March 10, 2004 (filed herewith), to Employment
Agreement by and between GoAmerica and Aaron Dobrinsky, dated as of May 6,
2002.
10.2 Termination Agreement, dated as of March 10, 2004 (filed herewith), to
Employment Agreement by and between GoAmerica and Joseph Korb, dated as of
May 6, 2002.
10.3 Employment Agreement, dated as of March 10, 2004, between GoAmerica and
Donald Barnhart (filed herewith)
31.1 Certification of the Chief Executive Officer as required by Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification of Chief Financial Officer as required by Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.