UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2000
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 0-16473
SSE TELECOM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1466297
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
47823 Westinghouse Drive 94539
Fremont, California (Zip Code)
(Address of principal executive office)
Registrant's telephone number, including area code: (510) 657-7552
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par
Value $0.01
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
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 amendments to
this Form 10-K. [ ]
The aggregate market value of voting common stock held by non-affiliates of the
Registrant, based upon the closing sale price of Common Stock on December 8,
2000 as reported on the Nasdaq National Market, was approximately $3,423,000.
Shares of common stock held by each officer and director and by each person who
owns 5% or more of the outstanding Common Stock have been excluded in that such
persons may be deemed affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes. On December 8, 2000,
there were 6,257,608 shares of the Registrant's common stock issued.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART III
ITEM 10. DIRECTORS OF THE COMPANY
The following table sets forth information regarding the Company's
directors as of January 12, 2001:
NAME AGE POSITION HELD WITH THE COMPANY
Mr. Leon F. Blachowicz 61 President, Chief Executive Officer
and Director
Mr. Frank Trumbower 63 Chairman of the Board of Directors
Mr. Joseph T. Pisula 59 Director
Mr. Lawrence W. Roberts 61 Director
Mr. D. Jonathan Merriman 40 Director
Mr. Leon F. Blachowicz has served as President, Chief Executive
Officer, and Director of the Company since April 1998, the date he joined the
Company. He has also served as a member of the Nominating Committee of the Board
of Directors since April 1998. From 1995 to 1998, he was at California
Microwave, Inc. and served as Group President of the Wireless and Satellite
Communications Group. From 1989 to 1995 he was Vice President/General Manager of
Varian Associates, Microwave Products Division, a manufacturer of satellite
communication equipment. Mr. Blachowicz earned his M.A. and B.A. degrees in
Electrical Engineering from the University of Florida.
Mr. Frank Trumbower has served as our Chairman since May 1999, as a
member of our Board of Directors from 1989 to 1994 and from 1995 to 1997 and as
our President and Chief Executive Officer from 1990 to 1994. From 1990 to 1994
he also served as the President and Chief Executive Officer of DirectSat
Corporation, a Direct Broadcast Satellite (DBS) licensee partly owned by the
Company. Mr. Trumbower is currently the President of Cambridge Technology
Partners, Inc., a private venture capital firm specializing in
telecommunications and related computer technology. Mr. Trumbower currently
serves as a member of the board of directors of Cambridge Technology Group,
Inc., Cambridge Technology Partners, Inc., Cambridge Research Associates, Inc.,
Avenel Capital Management, Inc., Prinz (USA) Distributors, Inc., and Network
Storage Solutions, Inc. Mr. Trumbower received a degree from the University of
San Francisco and, as a Marshall Scholar, did graduate work in microeconomics at
the London School of Economics.
Mr. Joseph T. Pisula has served as a Director of the Company since
March 1995. He has served as a member of the Audit Committee of the Board of
Directors since 1995. Since July 2000, he has served as Chairman of iSolutions,
Inc., a company engaged in e-business consulting. From June 1998 to July 2000,
he served as President and Chief Executive Officer of TSI TelSys, Corp., a
manufacturer of high-performance digital telemetry processing and simulation
systems for ground station terminals used in the satellite remote sensing
market. From October 1996 until April 1998 he was President and Chief Executive
Officer of Network Storage Solutions, Inc., a network-attached storage appliance
manufacturer. From February 1995 to May 1996, he was President and Chief
Operating Officer of Treev Inc., (formerly, Network Image Corporation), an
enterprise client-server software company. From April 1993 to September 1994,
Mr. Pisula was Chairman and Chief Executive Officer of Digital Transmission
System Inc., a telecommunications equipment manufacturer. Mr. Pisula received
his M.A. in Business Administration from the University of Rochester and his
B.S. in Electrical Engineering from the University of Pittsburgh.
Mr. Lawrence W. Roberts has served as Director of the Company since
June 1997. He has served as a member of the Compensation and Nominating
Committees of the Board of Directors since 1997. Since 1985, he has been
President and a Director of Technology Strategies & Alliances, a strategic
investment banking firm specializing in the technology industry. Since September
2000, Mr. Roberts has been a Managing Partner of Rocket Management LLC, a
venture management and investment firm. He received his M.B.A. from the Harvard
Graduate School of Business Administration, an M.A. in International Relations
from American University and a B.A. from the University of Louisville.
Mr. D. Jonathan Merriman has served as a Director of the Company since
October 1999. Since October 2000 he has been the Chief Executive Officer of
RateXchange Corporation a company involved in the brokering of bandwidth.
Previously Mr. Merriman was the Senior Managing Director in charge of the Equity
Capital Markets Group at First Security Van Kasper and Company, an investment
banking and brokerage firm, and oversaw the research, institutional sales,
equity trading, syndicate, and derivatives trading departments. He was also a
member of
Van Kasper's management, executive and commitment committees as we as the Van
Kasper Advisors investment committee. He received a B.A. degree in psychology
from Dartmouth College and an M.B.A. from New York University's Graduate School
of Business.
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a)
of the Securities Exchange Act of 1934 requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Based on this review of the copies of such forms received
by it, the Company believes that all filing requirements applicable to its
officers, directors, and greater than ten-percent beneficial owners were
complied with.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows for the fiscal years ended September 30,
2000, September 25, 1999, and September 26, 1998, compensation awarded or paid
to, or earned by, the Company's Chief Executive Officer and its other four most
highly compensated executive officers (the "Named Executive Officers"):
Long-term
Annual Compensation Compensation
---------------------- ------------
Securities
Underlying All Other
Name and Principal Position Salary Bonus Options Compensation
Year ($) ($) (#) ($)
---- ------- ------ ------ --------
Leon F. Blachowicz 2000 259,609 46,500 50,000 3,513 (1)
President and Chief 1999 235,000 100,000 75,000 3,058 (1)
Executive Officer 1998 88,576 (2) - 150,000 623 (3)
Michael B. Wytyshyn 2000 192,510 - 10,000 3,579 (4)
Executive Vice President 1999 184,995 35,000 100,000 3,933 (4)
Business Development 1998 60,479 (2) - - 1,972 (5)
Myron B. Gilbert 2000 154,060 11,000 25,000 3,579 (4)
Executive Vice President 1999 136,864 20,000 50,000 2,925 (4)
Operations 1998 32,694 (2) - - 623 (3)
George M. Walley 2000 175,062 11,040 70,000 4,124 (4)
Executive Vice President 1999 137,088 4,595 10,000 7,933 (5)
Product Development 1998 18,000 (2) 5,000 30,000 60 (3)
James J. Commendatore 2000 162,401 30,000 35,000 3,006 (4)
Chief Financial Officer 1999 117,113 (2) 10,000 50,000 2,679 (4)
1998 - - - -
------------
(1) Includes employee insurance and imputed interest on employee loans.
(2) Employed for less than a full year.
(3) Includes employee insurance.
(4) Includes employee insurance, 401k benefits, and imputed interest on
employee loans.
(5) Includes employee insurance, 401k benefits, imputed interest on employee
loans and a temporary housing allowance of $6,400.
STOCK OPTION GRANTS AND EXERCISES
The Company may grant options to its executive officers under its 1997
Equity Participation Plan or its 1992 Stock Option Plan. Percentage of total
options as set forth below was calculated based on option to purchase an
aggregate of 1,271,325 shares of common stock granted under our plans. The
potential realizable value as set forth below was calculated based on the
five-year term of the option and assumed rates of stock appreciation of 5% and
10% compounded annually from the date the options were granted to their
expiration date based on the fair market value of the Common Stock on the date
of grant. Options are granted to purchase Common Stock at exercise prices no
less than 100% of the market value of the stock on the grant date. Options
generally vest in a series of annual installments beginning from the vesting
start date and extending through the next four years of service. The stock
option agreements provide that options granted to all employees will vest upon
any "change in control" of the Company, as defined by the agreements.
The following tables show for the fiscal year ended September 30, 2000,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Values at Assumed
Annual Rates of Stock
% of Total Price Appreciation
Number of Options For Option Term
Securities Granted to (5 Years)
Underlying Employees Price Expiration ----------------------
Name Options Fiscal Year Per Share Date 5% ($) 10% ($)
------------------------------ ---------- ----------- --------- ---------- ------- --------
Leon F. Blachowicz 50,000 3.93% $2.15 10/25/04 30,083 66,113
Michael B. Wytyshyn 10,000 0.79% $5.75 04/13/05 15,886 35,104
Myron B. Gilbert 15,000 1.18% $5.75 04/13/05 23,830 52,656
10,000 0.79% $2.15 10/25/04 6,016 13,223
George M. Walley 40,000 3.15% $5.75 04/13/05 63,545 140,417
30,000 2.36% $2.15 10/25/04 18,050 39,668
James J. Commendatore 20,000 1.57% $5.75 04/13/05 31,772 70,209
15,000 1.18% $2.15 10/25/04 9,025 19,834
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Shares Number of Unexercised in-the-Money Options
Acquired Value Options at Fiscal Year End at Fiscal Year End (2)
on Exercise Realized ---------------------------- ----------------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
---- --- ------- ----------- ------------- ----------- -------------
Leon F. Blachowicz - - 93,750 181,250 14,719 69,656
Michael B. Wytyshyn - - 25,000 85,000 11,813 35,438
Myron B. Gilbert 12,500 118,750 0 62,500 0 11,100
George M. Walley 10,000 66,973 7,500 92,500 10,125 36,750
James J. Commendatore - - 12,500 72,500 8,250 32,400
-----------
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on the date of exercise minus the exercise price.
(2) Market value of underlying securities based on the closing price of the
Company's Common Stock on September 29, 1999 (last trading day prior to
September 30, 2000) on the Nasdaq National Market system of $2.66 minus the
exercise price.
EMPLOYMENT AGREEMENTS
In April 1998 the Company entered into an employment agreement with Mr.
Blachowicz to serve as its President and Chief Executive Officer. Mr. Blachowicz
received a base salary of $235,000 per year. In addition, Mr. Blachowicz is
entitled to receive an annual bonus, a portion of which is guaranteed, payable
in cash and/or stock options with a target range of sixty percent (60%) of base
salary upon the Company's achieving certain pre-established goals determined by
the Board. In addition, the Company committed to grant Mr. Blachowicz an option
to purchase an aggregate of 250,000 shares of its Common Stock of which 150,000
shares were granted upon execution of the agreement.
In May 1998 the Company entered into an employment agreement with Mr.
Wytyshyn to serve as its Executive Vice President of Business Development. Mr.
Wytyshyn received an annual base salary of $185,000 per year. In addition, Mr.
Wytyshyn is entitled to receive an annual bonus payable in cash and/or stock
options with a target range of fifty percent (50%) of base salary upon the
Company's achieving certain pre-established goals determined by the Board. In
addition, the Company committed to grant Mr. Wytyshyn an option to purchase an
aggregate of 100,000 shares of its Common Stock of which 75,000 shares were
granted upon execution of the agreement.
In May 1998, the Company entered into an employment agreement with Mr.
Gilbert to serve as its Executive Vice President of Operations. Mr. Gilbert
received an annual base salary of $125,000 per year. In addition, Mr. Gilbert is
entitled to receive an annual bonus payable in cash and/or stock options with a
target range of forty percent (40%) of base salary upon the Company's achieving
certain pre-established goals determined by the Board. In addition, the Company
granted Mr. Gilbert an option to purchase an aggregate of 50,000 shares of its
Common Stock.
In November 1998, the Company entered into an employment agreement with
Mr. Commendatore to serve as its Executive Vice President and Chief Financial
Officer. Mr. Commendatore received an initial annual base salary of $145,000 per
year. In addition, Mr. Commendatore is entitled to receive an annual bonus
payable in cash and/or stock options with a target range of forty percent (40%)
of base salary upon the Company's achieving certain pre-established goals
determined by the Board. In addition, the Company granted Mr. Commendatore an
option to purchase an aggregate of 50,000 shares of its Common stock.
In February 1999, the Company entered into an employment agreement with
Mr. Walley to serve as its Executive Vice President of Product Development. Mr.
Walley received an initial annual base salary of $138,000 per year. In addition,
Mr. Walley is entitled to receive an annual bonus payable in cash and /or stock
options with a target range of forty percent (40%) of base salary upon the
Company's achieving certain pre-established goals determined by the Board. In
addition, the Company agreed to pay a temporary mortgage allowance of up to
$1,600 a month for up to six months from the date of the agreement.
In July 2000, the Company entered into an employment agreement with Mr.
Mossman to serve as its Executive Vice President of Sales and Marketing. Mr.
Mossman received an initial annual base salary of $160,000 per year. In
addition, Mr. Walley is entitled to receive an annual bonus payable in cash and
/or stock options with a target range of forty percent (40%) of base salary upon
the Company's achieving certain pre-established goals determined by the Board.
The first year management bonus, for fiscal year 2000, is guaranteed at 40% of
base salary, prorated for months employed in the balance of the fiscal year..
The second year management bonus, fiscal year 2001, is guaranteed at the 40% of
then base salary. In addition, the Company agreed to pay Mr. Mossman a $25,000
signing bonus and granted him a non-secured interest free loan of $40,000 for a
term of two years.
In accordance with all the agreements, subsequent to the fiscal year of
initial employment, annual base salary is to be determined by the Company's
Board of Directors. In addition, if any of the named executive officers is
terminated without cause, (a) within the first twelve month period from the
effective date of the employment agreements, the executive shall be entitled to
receive, and shall receive continuing compensation
substantially equivalent to their then current compensation for a period of
twelve months from the date of termination, payable in monthly installments
during the twelve month period following termination, (b) within the second
twelve month period from the effective date, the executive shall receive
continuing compensation for a period of nine months from the date of
termination, payable in monthly installments during the twelve month period
following termination; and (c) within the third twelve month period from the
effective date, the executive shall receive continuing compensation for a period
of six months from the date of termination, payable in monthly installments
during the twelve month period following termination. If any of the named
executive officers are terminated upon a change in control, such termination
shall be termination without cause. All executive officers have agreed not to
(i) compete with the Company for the six (6) month period following termination
or during the period in which he receives such salary continuation payments,
whichever is longer or (ii) during the term of their agreements, or at any time
during the two year period thereafter, divulge, furnish or make accessible to
anyone other than the Company, the directors and officers of the Company, unless
otherwise in the regular course of the business of the Company, any knowledge of
confidential information.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of January 12, 2001 by: (i) each for
director; (ii) each of the executive officers named in the Summary Compensation
Table; (iii) all executive officers and directors of the Company as a group; and
(iv) all those known by the Company to be beneficial owners of more than five
percent of its Common Stock. The address for each director, and executive
officer named in the table is 47823 Westinghouse Drive, Fremont, California
94539; the address for Alcatel Telspace, S.A. is 5 Rue Noel Pons, 92734 Nanterre
Cedex, France; and the address for Cannell Capital Management is 600 California
Street, San Francisco, California 94108.
Beneficial Ownership (1)
------------------------
Number Percent
Beneficial Owner of Shares of Total
--------------------------------------------- ----------- ---------
Directors and Executive Officers :
Leon F. Blachowicz (2).............................. 170,000 2.8
Frank S. Trumbower (3).............................. 551,176 9.1
D. Jonathan Merriman(4)............................. 3,333 *
Joseph T. Pisula(5)................................. 13,332 *
Lawrence W. Roberts (6)............................. 9,332 *
Myron B. Gilbert (7)................................ 65,000 1.1
Daryl L. Mossman 5,700 *
James J. Commendatore (8)........................... 39,512 *
George M. Walley (9)................................ 38,422 *
Directors and Executive Officers as a Group 882,475 14.6
(nine persons) (10).................................
Five Percent Stockholders:
Alcatel Telspace, S.A............................... 625,000 10.4
Cannell Capital Management (11)..................... 700,000 11.6
-------------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "SEC"). Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by them. Percentage of beneficial ownership is based on 6,032,985
shares of Common Stock outstanding as of January 12, 2001, adjusted as
required by rules promulgated by the SEC.
(2) Includes 125,000 shares subject to options exercisable within 60 days of
January 12, 2001.
(3) Includes 8,333 shares subject to options exercisable within 60 days of
January 12, 200. The number of shares also includes 192,827 shares owned by
Mr. Trumbower's spouse, as to which Mr. Trumbower disclaims beneficial
ownership, and 16,667 shares held by Prescap Limited Partnership of which
Mr. Trumbower is a general partner. Also,
(4) Includes 3,333 shares subject to options exercisable within 60 days of
January 12, 2001.
(5) Includes 13,332 shares subject to options exercisable within 60 days of
January 12, 2001.
(6) Includes 3,334 shares subject to options exercisable within 60 days of
January 12, 2001.
(7) Includes 15,000 shares subject to options exercisable within 60 days of
January 12, 2001.
(8) Includes 28,750 shares subject to options exercisable within 60 days of
January 12, 2001.
(9) Includes 17,500 shares subject to options exercisable within 60 days of
January 12, 2001.
(10) Includes the Directors and Executive Officers named in the table.
(11) Based on a Schedule 13G filed January 12, 2000, J. Carlo Cannell D/B/A
Cannell Capital Management has shared dispositive power and shared voting
power with respect to 700,000 shares of the Company's Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SSE TELECOM, INC.
Dated: January 29, 2001 /s/ LEON F. BLACHOWICZ
--------------------------
Leon F. Blachowicz
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 on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ FRANK S. TRUMBOWER Chairman of the Board January 29, 2001
---------------------------
Frank Trumbower
/s/ LEON F. BLACHOWICZ Director and January 29, 2001
----------------------- Chief Executive Officer
Leon F. Blachowicz (Principle Executive Officer)
/s/ JAMES J. COMMENDATORE Chief Financial Officer January 29, 2001
------------------------- (Principle Finance and
James J. Commendatore Accounting Officer)
/s/ JOSEPH T. PISULA Director January 29, 2001
---------------------
Joseph T. Pisula
/s/ OLIN L. WETHINGTON Director January 29, 2001
-----------------------
Olin L. Wethington
/s/ LAWRENCE W. ROBERTS Director January 29, 2001
-----------------------
Lawrence W. Roberts
/s/ D. JONATHAN MERRIMAN Director January 29, 2001
-------------------------
D. Jonathan Merriman