Attached files
| file | filename |
|---|---|
| EX-31.2 - PC GROUP, INC. | v182201_ex31-2.htm |
| EX-32.1 - PC GROUP, INC. | v182201_ex32-1.htm |
| EX-32.2 - PC GROUP, INC. | v182201_ex32-2.htm |
| EX-31.1 - PC GROUP, INC. | v182201_ex31-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
Amendment
No. 1
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
year ended December 31, 2008
OR
¨ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission
File No. 0-12991
PC
GROUP, INC.
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
11-2239561
|
|
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer
Identification
Number)
|
419
Park Avenue South, Suite 500
New
York, New York 10016
(Address
of Principal Executive Offices) (Zip Code)
(212)
687-3260
(Registrant’s
Telephone Number, Including Area Code)
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 $0.02 per share
(Title of Class)
(Title of Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes ¨ No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x
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 whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes ¨ 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. Yes x No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer”, “accelerated
filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
|
Large Accelerated Filer ¨
|
Accelerated Filer ¨
|
Non-accelerated Filer ¨
|
Smaller reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No x
As of
June 30, 2009 (i.e., the last day of registrant’s most recently completed second
quarter), the aggregate market value of the common equity held by non-affiliates
of the registrant was $3,069,533, as computed by reference to the closing sale
price on the NASDAQ Global Market of such common stock ($0.65) multiplied by the
number of shares of voting stock outstanding on June 30, 2009 held by
non-affiliates (4,722,539 shares). Exclusion of shares from the calculation of
aggregate market value does not signify that a holder of any such shares is an
“affiliate” of the Company.
The
number of shares of the registrant’s common stock outstanding at March 17, 2010
was 7,848,774 shares.
Explanatory
Note
This
Amendment No. 1 on Form 10-K/A is being filed in order to add the information
required by Items 10 through 14 of Part III, which was originally intended to be
incorporated into the Annual Report on Form 10-K for the year ended December 31,
2009, originally filed with the Securities and Exchange Commission on March 18,
2010 (“Original Filing”), by reference to the information to be included in the
registrant’s Proxy Statement for the 2010 Annual Meeting of Stockholders. Except
for the inclusion of the information described above, no other changes have been
made to the Original Filing. The Original Filing continues to apply as of the
date of the Original Filing and the registrant has not updated the disclosure
contained therein to reflect any events which occurred subsequent to the filing
of the Original Filing or to modify the disclosure contained in the Original
Filing, except to the extent of the information included
herein.
References
in this report to “PC Goup,” “Company,” “we,” “our,” and “us,” refer to PC
Group, Inc. and, if so indicated or the context requires, includes our
wholly-owned subsidiaries Twincraft, Inc. (“Twincraft”) and Silipos, Inc.
(“Silipos”).
PART
III
Item
10. Directors and Executive Officers of the
Company
(i)
When
considering whether directors have the experience, qualifications, attributes
and skills, taken as a whole, to enable the Board of Directors to satisfy its
oversight responsibilities effectively in light of the Company’s business and
structure, the Nominating/Corporate Governance Committee and the Board of
Directors focus primarily on the information discussed in each of the
directors’ individual biographies set forth below, which contains
information regarding the person’s service as a director, business experience,
and director positions held currently or at any time during the last five years.
Set forth
below are the names of the persons who are the directors of PC Group, Inc. their
ages and respective business backgrounds, including directorships of other
public companies:
Peter A. Asch, 49, became a
director of the Company on January 23, 2007, immediately following our
acquisition of Twincraft, Inc., from Mr. Asch and the other former holders of
the Twincraft capital stock. Mr. Asch serves as the President of Twincraft and
of our personal care products division, and was previously the Chief Executive
Officer of Twincraft from 1995 through 2007. Mr. Asch graduated with a B.S. in
Political Science and International Relations from Queen’s University, located
in Kingston, Ontario, in 1983.
Stephen M. Brecher, 70, has
been a member of our Board of Directors since May 1, 2006 and is Chairman of our
Audit Committee. In February 2006, he joined the certified public accounting
firm of Weiser LLP as a Senior Advisor and currently serves as Partner in charge
of the tax practice. Mr. Brecher was an independent consultant from April 2005
to January 2006 and was a principal of XRoads Solutions Group, an international
consulting firm from September 2001 to March 2005. Prior thereto, he spent 33
years at KPMG LLP, a certified public accounting firm, 26 years of which as a
tax partner specializing in international banking. Mr. Brecher is a CPA and
attorney and a member of the New York State Bar. He also served as a member of
the board of directors of Refco, Inc., a public company, from January 2006
through December 2006. The Board of Directors has identified Mr. Brecher as the
audit committee financial expert under the listing requirements of the NASDAQ
Capital Market and has determined that Mr. Brecher is independent of the Company
based on the NASDAQ Capital Market’s definition of “independence.”
Burtt R. Ehrlich, 70, has
been a member of our Board of Directors since February 13, 2001, and is a member
of our Audit Committee, our Compensation Committee and our Nominating/Corporate
Governance Committee. Mr. Ehrlich served as our Chairman of the Board of
Directors from February 2001 until November 2004. Mr. Ehrlich served as a
director of Armor Holdings, Inc., a manufacturer and supplier of military
vehicles, armed vehicles and safety and survivability products and systems to
the aerospace & defense, public safety, homeland security and commercial
markets, which was listed on The New York Stock Exchange, from January 1996
until July 2007, when it was acquired by BAE Systems plc. Mr. Ehrlich has served
as a member of the Board of Directors of Clarus Corporation, a publicly-held
company, since June 2002. Mr. Ehrlich served as Chairman and Chief Operating
Officer of Ehrlich Bober Financial Corp. (the predecessor of Benson Eyecare
Corporation) from December 1986 until October 1992, and as a director of Benson
Eyecare Corporation, which was a publicly-held company, from October 1992 until
November 1995. Mr. Ehrlich is member of the Board of Trustees of The Arbitrage
Fund, a registered investment company.
Stuart P. Greenspon, 70, has
been a member of our Board of Directors since November 8, 2005 and is a member
of our Audit Committee, our Compensation Committee and our Nominating/Corporate
Governance Committee. Mr. Greenspon has been an independent business consultant
for more than 10 years. Prior to that, he was an owner and operating officer of
Call Center Services, Inc. from 1990 to 1995 and of Pandick Technologies, Inc.
from 1982 to 1989.
David S. Hershberg, 68, was appointed a Director in
June 2008 and is a member of our Compensation Committee and our
Nominating/Corporate Governance Committee. Mr. Hershberg is a graduate of New
York University and Harvard Law School and has served in various legal and
business capacities for companies such as IBM, Shearson Lehman Brothers (Vice
Chairman) , and Viatel, Inc. (Executive Vice President, Finance and Law), in
addition to directorships at Bank Julius Baer and OutSource International. Since
2006, Mr. Hershberg has served as a consultant to companies such as Aquiline
LLC, The Solaris Group, Colchis Capital, CapIntro and Sevara Partners. From 1995
until 2006, Mr. Hershberg served as vice president and assistant general counsel
responsible for the corporate legal group at IBM.
W. Gray Hudkins, 34, became
our Chief Operating Officer effective as of October 1, 2004 and our President
and Chief Executive Officer effective January 1, 2006. He became a director of
the Company in June 2006. Mr. Hudkins served as Director of Corporate
Development for Clarus Corporation from December 2002 until September 2004, as a
principal in Kanders & Company from December 2003 until September 2004, and
as Director of Corporate Development for the Company from April 2004 until
September 2004. From February 2002 until December 2002, Mr. Hudkins served as
Manager of Financial Planning and Development for Bay Travelgear, Inc., a
branded consumer products company based in New York and Chicago. From April 2000
until February 2002, Mr. Hudkins served as an associate at Chartwell Investments
LLC, a New York based private equity firm, and from August 1999 until April
2000, Mr. Hudkins served as an associate at Saunder, Karp & Megrue L.P., a
private merchant bank based in Stamford, Connecticut. Mr. Hudkins graduated cum
laude with an A.B. in Economics and a Certificate in Germanic Language and
Literature from Princeton University in 1997.
Warren B. Kanders, 52, has
been a Director and Chairman of our Board of Directors since November 12, 2004.
From May 2007 until September 2009, Mr. Kanders served as a director of
Highlands Acquisition Corp., a publicly-held blank check company. Mr. Kanders
has served as the President of Kanders & Company, Inc. since 1990. Prior to
the acquisition of Armor Holdings, Inc., formerly a New York Stock
Exchange-listed company and a manufacturer and supplier of military vehicles,
armored vehicles and safety and survivability products and systems to the
aerospace and defense, public safety, homeland security and commercial markets,
by BAE Systems plc on July 31, 2007, Mr. Kanders served as the Chairman of the
Board of Armor Holdings, Inc. since January 1996 and as its Chief Executive
Officer since April 2003. Mr. Kanders has served as a member of the Board of
Directors of Clarus Corporation, a publicly-held company, since June 2002 and as
the Executive Chairman of Clarus Corporation’s Board of Directors since December
2002. From April 2004 until October 2006, Mr. Kanders served as the Executive
Chairman, and from October 2006 until September 2009, served as the
Non-Executive Chairman of the Board of Stamford Industrial Group, Inc., which
was an independent manufacturer of steel counterweights. From October 1992 to May 1996,
Mr. Kanders served as Vice Chairman of the Board of Benson Eyecare Corporation,
a publicly-held distributor of eye care products and services. Mr. Kanders
received a B.A. degree in Economics from Brown University.
The terms
of all directors expire at the time of the next annual meeting of shareholders
of the Company. There are no family relationships among the directors and/or
executive officers identified in Paragraph (ii) of this Item 10.
|
|
(ii)
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The
following table sets forth the name, age and position of each of our
executive officers as of April 21,
2010:
|
|
Name
|
Age
|
Position
|
||
|
W.
Gray Hudkins
|
34
|
President
and Chief Executive Officer, and Director
|
||
|
Peter
A. Asch
|
49
|
President
of Twincraft, Inc., President of our personal care products division, and
Director
|
||
|
Kathleen
P. Bloch
|
55
|
Vice
President, Chief Operating Officer and Chief Financial
Officer
|
Information
about the business backgrounds of Messrs. Hudkins and Asch is set forth in
paragraph (i) of this Item 10. Ms. Bloch’s business background is as
follows:
Kathleen P. Bloch, age 55,
was appointed Chief Operating Officer of the Company on October 8,
2008. Since September 4, 2007, Ms. Bloch has served, and continues to
serve, as the Company’s Chief Financial Officer, Vice President and
Secretary. Prior to joining the Company in September 2007, Ms. Bloch
was employed by The Silverman Group, of Short Hills, New Jersey, from January
2007 until September 2007. For 10 years prior thereto, she was employed by
Silver Line Building Products Corporation, a leading, privately held
manufacturer of vinyl windows. She served as Chief Financial Officer from 1999
until 2006, when the company was acquired by Andersen Corporation, a leading
manufacturer of windows. Ms. Bloch received a Master of Business Administration
in 1990 from LaSalle University, Philadelphia, Pennsylvania, and a Bachelor of
Science in Accounting in 1978.
|
|
(iii)
|
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors and executive officers and any persons who beneficially own more
than 10% of our capital stock to file with the Commission (and, if such
security is listed on a national securities exchange, with such exchange),
various reports as to ownership of such capital stock. Such persons are
required by Commission regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely upon reports and
representations submitted by the directors, executive officers and holders
of more than 10% of our capital stock, all Forms 3, 4 and 5 showing
ownership of and changes of ownership in our capital stock during 2009
were timely filed with the Commission and the NASDAQ Global
Market.
|
|
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(iv)
|
The
Company has adopted a code of ethics that applies to its Chief Executive
Officer and Chief Financial Officer, who are the Company’s principal
executive officer and principal financial and accounting
officer. The code of ethics may be accessed at
www.pcgrpinc.com, our Internet website, by clicking on “About Our
Company,” and selecting “Corporate Governance.” The Company intends to
disclose future amendments to, or waivers from, certain provision of its
code of ethics, if any, on the above website within four business days
following the date of such amendment or
waiver.
|
Item
11. Executive Compensation
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
The
Compensation Committee of the Board of Directors (the “Compensation Committee”)
assists the Board of Directors in establishing compensation packages for the
Company’s executive officers and non-employee directors and administering the
Company’s incentive plans. The Compensation Committee is generally responsible
for setting and administering the policies which govern annual salaries of
executive officers, raises and bonuses and certain awards of stock options,
restricted stock awards and other awards, under the Company’s incentive plans
and otherwise, and, where applicable, compliance with the requirements of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”) and
such responsibility is generally limited to the actions taken by the
Compensation Committee, although at times the full Board of Directors has
determined annual salaries of executive officers, raises and, where the Company
has determined that compliance with the provisions of IRC Section 162(m) is not
required, bonuses as well as grants of stock options and common stock without
having first received recommendations from the Compensation Committee. From time
to time, the Compensation Committee reviews our compensation packages to ensure
that they remain competitive with the compensation packages offered by
similarly-situated companies and continue to incentivize management and align
management’s interests with those of our Stockholders.
The
Compensation Committee is comprised of three directors. Each member of the
Compensation Committee meets the independence requirements specified by the
NASDAQ Capital Market and by Section 162(m) of the Internal Revenue
Code.
Executive
Compensation Philosophy
The
general philosophy of our executive compensation program is to attract and
retain talented management while ensuring that our executive officers are
compensated in a way that advances the interests of our Stockholders. In
pursuing these objectives, the Compensation Committee believes that it is
critical that a substantial portion of each executive officer’s compensation be
contingent upon our overall performance. The Compensation Committee is also
guided by the principles that our compensation packages must be competitive,
must support our overall strategy and objectives, must provide significant
rewards for outstanding financial performance while establishing clear
consequences for underperformance and must align management’s interests with the
interests of shareholders by linking compensation with performance. Annual
bonuses and long-term awards for our executive officers should take into account
not only objective financial goals, but also individual performance goals that
reinforce our core values, which include leadership, accountability, ethics and
corporate governance. It is the Compensation Committee’s responsibility to
determine the performance goals for the performance-based compensation payable
to our named executive officers in compliance with section 162(m) of the IRC,
subject to ratification by the Board of Directors. Subject to this limitation,
the Compensation Committee may also make recommendations to the Board of
Directors with respect to non-chief executive officer compensation and, either
alone or with the other independent members of our Board of Directors, to
determine and approve our Chief Executive Officer’s compensation.
In
determining the compensation packages for our executive officers and
non-employee directors, the Compensation Committee and the Board of Directors
have evaluated the history and performance of the Company, previous compensation
practices and packages awarded to the Company’s executive officers and
non-employee directors, and compensation policies and packages awarded to
executive officers and non-employee directors at similarly-situated
companies.
Use
of Outside Consultants
The
Compensation Committee has the authority to retain and terminate any independent
compensation consultant and to obtain independent advice and assistance from
internal and external legal, accounting and other advisors. In 2009, the
Compensation Committee did not engage any such consultants.
Compensation
Program Components
Our
executive compensation program emphasizes company performance, individual
performance and an increase in stockholder value over time in determining
executive pay levels. Our executive compensation program consists of three key
elements: (i) annual base salaries; (ii) a performance-based annual bonus; and
(iii) periodic grants of stock options, restricted stock and performance shares.
The Compensation Committee believes that this three-part approach best serves
our and our Stockholders’ interests by motivating executive officers to improve
our financial position, holding executives accountable for the performance of
the organizations for which they are responsible and by attracting key
executives into our service. Under our compensation program, annual compensation
for executive officers is composed of a significant portion of pay that is “at
risk” − specifically, the annual bonus, stock options, restricted stock and
performance shares.
Annual
Cash Compensation
Base Salary. In reviewing and
approving the base salaries of our executive officers, the Compensation
Committee considers the scope of work and responsibilities, and other
individual-specific factors; the recommendation of the Chief Executive Officer
(except in the case of his own compensation); compensation for similar positions
at similarly-situated companies; and the executive’s experience. Except where an
existing agreement establishes an executive’s salary, the Compensation Committee
reviews executive officer salaries annually at the end of the year and
establishes the base salaries for the upcoming year. In 2009, the salaries for
the Company’s named executive officers were established pursuant to their
respective employment agreements.
Performance-Based Annual
Bonus. With regard to the compensation of the named executive officers
subject to section 162(m) of the IRC, the Compensation Committee establishes the
performance goals and then certifies the satisfaction of such performance goals
prior to the payment of the performance-based bonus compensation. In reviewing
and approving the annual performance-based bonus for our executive officers, the
Compensation Committee may also consider an executive’s contribution to the
overall performance of the Company as well as annual bonuses awarded to persons
holding similar positions at similarly-situated companies. Bonuses may be paid
under the 2007 Annual Incentive Plan, or otherwise at the discretion of the
Compensation Committee or the Board of Directors.
Equity-Based
Compensation
Executive
officers of the Company and other key employees who contribute to the growth,
development and financial success of the Company are eligible to be awarded
stock options, shares of restricted common stock, bonuses of shares of common
stock, and performance shares of common stock under our 2005 and 2007 Stock
Incentive Plans and the 2007 Annual Incentive Plan. Awards under these plans
help relate a significant portion of an employee’s long-term remuneration
directly to stock price appreciation realized by all our Stockholders and aligns
an employee’s interests with those of our Stockholders. The Compensation
Committee believes equity-based incentive compensation aligns executive and
stockholder interests because (i) the use of a multi-year lock-up schedule for
equity awards encourages executive retention and emphasizes long-term growth,
and (ii) paying a significant portion of management’s compensation in our equity
provides management with a powerful incentive to increase stockholder value over
the long-term. In connection with the Company’s prior acceleration of the
vesting and issuance of certain stock options, the Company required the
optionees who do not have employment agreements with the Company to execute
lock-up, confidentiality and non-competition agreements as a condition to the
acceleration of such stock options. Such lock-up, confidentiality and
non-competition agreements executed with the Company’s employees provide the
Company with added protection. In addition, the lock-up restrictions serve as an
employee retention mechanism since the lock-up restrictions will be extended for
an additional five-year period in the event an employee terminates his/her
employment with the Company while any of such lock-up restrictions are still in
effect. The Compensation Committee determines appropriate individual long-term
incentive awards in the exercise of its discretion in view of the above criteria
and applicable policies. In 2009, the Company did not grant any awards of
restricted stock or options under any of the plans to any of its executive
officers.
Perquisites
and Other Personal and Additional Benefits
Executive
officers participate in other employee benefit plans generally available to all
employees on the same terms as similarly situated employees.
The
Company maintains a qualified 401(k) plan that provides for a Company
contribution based on a matching schedule of a maximum of the lower of (i) 25%
of each given employee’s annual 401(k) contribution, or (ii) 4% of each given
employee’s annual salary. On February 9, 2009, the Company
terminated its 401(k) match.
The
Company also provides named executive officers with perquisites and other
personal benefits that the Company and the Compensation Committee believe are
reasonable and consistent with its overall compensation program to better enable
the Company to attract and retain superior employees for key positions. The
Compensation Committee periodically reviews the levels of perquisites and other
personal benefits provided to named executive officers.
Accounting
and Tax Considerations
Section
162(m) of the IRC generally disallows a tax deduction to public corporations for
compensation, other than performance-based compensation, over $1,000,000 paid
for any year to an individual who, on the last day of the taxable year, was (i)
the Chief Executive Officer or (ii) among the four other highest compensated
executive officers whose compensation is required to be reported in the Summary
Compensation Table contained herein. Compensation programs generally will
qualify as performance-based if (1) compensation is based on pre-established
objective performance targets, (2) the programs’ material features have been
approved by Stockholders, and (3) there is no discretion to increase payments
after the performance targets have been established for the performance period.
The Compensation Committee desires to maximize deductibility of compensation
under Section 162(m) of the IRC to the extent practicable while maintaining a
competitive, performance-based compensation program. However, the Compensation
Committee also believes that it must reserve the right to award compensation
which it deems to be in the best interests of our Stockholders but which may not
be tax deductible under Section 162(m) of the IRC.
Post-Employment
and Other Events
Retirement,
death, disability and change-in-control events trigger the payment of certain
compensation to the named executive officers that is not available to all
salaried members. Such compensation is discussed under the headings “Employment
Agreements” and “Potential Payments Upon Termination or Change in
Control.”
Role
of Executive Officers in Compensation Decisions
The
Compensation Committee determines the total compensation of our Chief Executive
Officer and oversees the design and administration of compensation and benefit
plans for all of the Company’s employees. Our Chief Executive Officer has met
with the Compensation Committee to present topical issues for discussion and
education as well as specific recommendations for review. The Chairman of the
Board of Directors and the Chief Executive Officer may attend a portion of many
Compensation Committee meetings. The Compensation Committee also obtains input
from our legal, finance and tax advisors, as appropriate.
Summary
The
Compensation Committee believes that the total compensation package has been
designed to motivate key management to improve the operations and financial
performance of the Company, thereby increasing the market value of our Common
Stock.
Summary
Compensation Table
The
following summary compensation table sets forth information concerning the
annual and long-term compensation earned by the Company’s chief executive
officer and other senior executive officers who served as such during the year
ended December 31, 2009.
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Award
($)
|
Option
Award
($) (1)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||
|
W.
Gray Hudkins,
|
2009
|
$ | 100,000 | (2) | $ | $ | $ | 20,384 | (3) | $ | 120,384 | |||||||||||||||
|
President
and
|
2008
|
300,000 | − | − | − | 22,875 | 322,875 | |||||||||||||||||||
|
Chief
Executive Officer
|
2007
|
300,000 | − | − | − | 7,750 | 307,750 | |||||||||||||||||||
|
Kathleen
P. Bloch,
|
2009
|
250,000 | 361 | (4) | 250,361 | |||||||||||||||||||||
|
Vice
President, Chief
|
2008
|
250,000 | − | − | − | 2,875 | 252,875 | |||||||||||||||||||
|
Operating
Officer and
Chief Financial Officer |
2007
|
76,923 | (5) | − | − | − | − | 76,923 | ||||||||||||||||||
|
Peter
A. Asch,
|
2009
|
294,000 | (6) | - | 20,141 | (7) | 314,141 | |||||||||||||||||||
|
President,
Twincraft, Inc.
|
2008
|
291,193 | − | − | - | 22,815 | 314,008 | |||||||||||||||||||
|
2007
|
271,385 | − | − | 603,837 | 21,514 | 896,736 | ||||||||||||||||||||
|
(1)
|
The
amounts in the “Option Awards” column reflect grant date fair value
computed in accordance with FASB ASC Topic 718. The models
include factors and estimates utilizing the Black-Sholes option-pricing
model, and they are more fully discussed in Note 15, Stock Options, to our
consolidated financial statements included in Item 8 of our Annual Report
on Form 10-K for the year ended December 31,
2009.
|
The fair
value of stock based awards is calculated through the use of option price
models. For options granted to named executives in 2007, the factors
used in these models are a fair value of $4.20 per share on the date of the
grant, the stated option exercise price of $4.20 per share, the term of the
option period which was seven years, the annualized volatility estimated to be
72.94 percent, and a discount rate based upon the bond equivalent yield of
4.81%. This computation, which is in accordance with FASB ASC Topic
718, yields a fair value per share of approximately $3.02.
|
(2)
|
Mr.
Hudkins’ base compensation under his employment agreement is $300,000 per
year. Effective January 1, 2009, Mr. Hudkins agreed to forego a
portion of his salary and to receive a salary of $100,000 from the Company
for fiscal year 2009. See “Employment Agreements – W. Gray
Hudkins” below.
|
|
(3)
|
“All
Other Compensation” amount shown for Mr. Hudkins in 2009 consists of $384
in matching contributions under the Company’s 401(k) defined contribution
retirement plan and $20,000 in non-accountable expense allowance pursuant
to Mr. Hudkins’ employment
agreement.
|
|
(4)
|
“All
Other Compensation” amount shown for Ms. Bloch in 2009 consists of $361 in
matching contributions under the Company’s 401(k) defined contribution
retirement plan.
|
|
(5)
|
Ms.
Bloch joined the Company on September 4,
2007.
|
|
(6)
|
Mr.
Asch joined the Company on January 23, 2007, in connection with the
Twincraft acquisition.
|
|
(7)
|
“All
Other Compensation” amount shown for Mr. Asch in 2009 includes $141 in
contributions under the Company’s 401(k) defined contribution retirement
plan and $20,000 in non-accountable expense allowance pursuant to Mr.
Asch’s employment agreement. Mr. Asch’s employment agreement
expired on January 23, 2010, but Mr. Asch continues to be employed as an
at-will employee by the Company on substantially the same terms as those
contained in his prior employment agreement relating to base compensation
and benefits.
|
Employment
Agreements
W.
Gray Hudkins
On
October 9, 2007, the Company entered into a new employment agreement with W.
Gray Hudkins, the Company’s President and Chief Executive Officer, replacing his
prior employment agreement with the Company which expired on September 30, 2007.
Under the new employment agreement, Mr. Hudkins’ base compensation is $300,000
per year, subject to increase as the Compensation Committee and the Board of
Directors may determine from time to time. Mr. Hudkins is eligible for
participation, at the discretion of the Compensation Committee and the Board of
Directors, in the Company’s 2005 Stock Incentive Plan and 2007 Stock Incentive
Plan, and to receive other benefits generally available to the Company’s
executives, and to the maintenance of a $1 million life insurance policy payable
to beneficiaries named by Mr. Hudkins. The term of the agreement is three years,
with a one-year renewal option, subject to the right of either party to
terminate the employment on notice. Mr. Hudkins has a right to six months’
severance if his employment is terminated by the Company without cause, or if
the Company declines to renew the agreement for the one-year renewal term. The
agreement contains certain confidentiality, non-competition, and
non-solicitation provisions. Effective January 1, 2009, Mr. Hudkins agreed to
forego a portion of his salary and to receive a salary of $100,000 from the
Company for fiscal year 2009. On August 5, 2009, in recognition of Mr. Hudkins’
agreement to forego a portion of his salary, the Company agreed for 2009 to
require Mr. Hudkins to devote only such business time and energies to the
business and affairs of the Company as the Company and Mr. Hudkins would agree
is necessary and appropriate.
Kathleen
P. Bloch
On
September 4, 2007, the Company entered into an employment agreement with
Kathleen P. Bloch, the Company’s Vice President, Chief Operating Officer and
Chief Financial Officer. The employment agreement has a term of three years,
subject to termination without cause at the discretion of either party. Ms.
Bloch receives base compensation at the rate of $250,000 per year, and is
eligible for discretionary bonuses as determined by the Compensation Committee
from time to time. At the commencement of her employment on September 4, 2007,
Ms. Bloch received a restricted stock award of 75,000 shares of common stock
under the Company’s 2007 Stock Incentive Plan, which will vest in full upon the
later to occur of (i) the Company’s achievement of trailing 12-month EBITDA of
$25,000,000, and (ii) the Company’s common stock having a closing price of
$15.00 for five trading days in any period of 10 consecutive trading days. The
award will expire if it has not vested within 10 years, or if Ms. Bloch is no
longer an employee of the Company. “EBITDA” is defined in the employment
agreement and the related restricted stock award agreement to mean earnings
(excluding non-recurring events in the discretion of the Board of Directors)
before interest, taxes, depreciation and amortization in any four consecutive
calendar quarters, as reflected in the Company’s Quarterly Reports on Form 10-Q
or Annual Report on Form 10-K, as applicable, commencing with the quarter
beginning October 1, 2007. In the event of a divestiture of a business unit of
the Company, EBITDA for any such period of four quarters that includes the date
of the divestiture shall be the greater of (i) the actual EBITDA for the
relevant four quarters, and (ii) the sum of (A) the actual EBITDA through the
date of divestiture and (B) the actual EBITDA from the date of divestiture less
EBITDA attributable to the divested portion of the business plus an amount equal
to 20% of the purchase price paid to the Company in the
divestiture.
Peter A. Asch
On
January 23, 2007, in connection with the Twincraft acquisition, Twincraft, which
is now a wholly-owned subsidiary of the Company, entered into an employment
agreement with Mr. Asch, who serves as president of Twincraft. This agreement
was for a term of three years and provided for initial base compensation of
$294,000 per year (subject to increase at the discretion of the Company’s Board
of Directors), plus annual discretionary bonuses. The agreement also provided
that Mr. Asch would receive a non-accountable expense allowance at the rate of
$20,000 per year, payable monthly. In addition, under the employment agreement,
Mr. Asch received a stock option award under the Company’s 2005 Stock Incentive
Plan to purchase 200,000 shares of the Company’s common stock having an exercise
price equal to $4.20 per share, of which (i) 66,666 vested on January 23, 2009;
(ii) 66,666 vested on January 23, 2010; and (iii) 66,667 vest on January 23,
2011. Mr. Asch’s employment agreement expired on January 23, 2010, but Mr. Asch
continues to be employed as President of Twincraft as an at-will employee by the
Company on substantially the same terms as those contained in the employment
agreement relating to base compensation and benefits.
Grants
of Plan-Based Awards
There
were no awards to named executive officers in 2009 under the Company’s 2005 and
2007 Stock Incentive Plans.
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth information concerning stock options and stock awards
held by the named executive officers at December 31, 2009:
|
OPTION AWARDS
|
STOCK AWARDS
|
||||||||||||||||||||||||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock that
have not
Vested ($)
|
Market
Value o
Shares or
Units of
Stock That
Have Not
Vested ($)
|
Equity
Incentive
Plan
Awards;
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($)
|
||||||||||||||||||||||||||
|
W.
Gray Hudkins
|
50,000 | (1) | — | — | $ | 4.89 |
11/8/15
|
— | — | — | — | ||||||||||||||||||||||||
| 137,500 | (1) | — | — | 6.52 |
6/23/15
|
— | — | — | — | ||||||||||||||||||||||||||
| 150,000 | (1) | — | — | 7.50 |
11/12/14
|
— | — | — | — | ||||||||||||||||||||||||||
| 275,000 | (2) | ||||||||||||||||||||||||||||||||||
|
Kathleen
P. Bloch
|
— | — | — | — |
—
|
— | — | 75,000 | (3) | ||||||||||||||||||||||||||
|
Peter
A. Asch
|
200,000 | (4) | — | 4.20 |
1/23/11
|
— | — | — | — | ||||||||||||||||||||||||||
|
(1)
|
On
December 20, 2005, the Company accelerated the vesting date of unvested
options to December 31, 2005. Thus, the options of Mr. Hudkins became
fully vested on December 31, 2005.
|
|
(2)
|
Represents
a restricted stock award to Mr. Hudkins under the 2005 Stock Incentive
Plan which vests upon a change of control, or upon the Company’s achieving
$10 million EBITDA in any trailing four-quarter period commencing with the
period beginning January 1, 2007.
|
|
(3)
|
Represents
a restricted stock award to Ms. Bloch under the 2007 Stock Incentive Plan
which vests upon the Company’s achieving $25 million EBITDA in any
trailing four-quarter period commencing with the period beginning October
1, 2007, and the fair market value of the Company’s stock is not less than
$15.00 in any five consecutive trading
days.
|
|
(4)
|
Stock
options issued under the 2005 Stock Incentive Plan granted to Mr. Asch in
connection with the Company’s purchase of Twincraft on January 23, 2007.
The options vest in three equal consecutive annual tranches commencing
January 23, 2009.
|
Option
Exercises and Stock Vested During Fiscal 2009
There
were no options exercised by any of the Company’s named executive officers, and
no vesting of stock award held by the Company’s named executive officers, in the
year ended December 31, 2009.
Pension
Benefits — Fiscal 2009
There
were no pension benefits earned by the Company’s named executive officers in the
year ended December 31, 2009.
Nonqualified
Defined Contribution and Other Nonqualified Deferred Compensation
Plans
The
Company does not have any nonqualified defined contribution or other
nonqualified deferred compensation plans covering its named executive
officers.
Potential
Payments Upon Termination or Change of Control
The
information below reflect the amount of compensation to each of the named
executive officers of the Company in the event of termination of such
executive’s employment under the following circumstances: voluntary termination
by the executive, termination for cause by the Company, termination without
cause by the Company, termination following a change of control, and termination
on account of disability or death of the executive. The amounts shown assume
that such termination was effective as of December 31, 2009, and thus include
amounts earned through such time and estimates of the amounts which would be
paid out to the executives upon their termination under the circumstances
indicated. The actual amounts to be paid out can only be determined at the time
of such executive’s separation from the Company.
Payments Made Upon
Termination. Regardless of the manner in which a named executive
officer’s employment terminates, he or she may be entitled to receive amounts
earned during his term of employment.
Payments Made Upon a Change of
Control. Named executive officers may be entitled to additional amounts
if he or she is terminated following a change of control. Generally, pursuant to
the named executive officers’ employment agreements, a change of control is
deemed to occur in the event that:
|
|
·
|
the
current members of the Board of Directors cease to constitute a majority
of the Board of Directors;
|
|
·
|
the
Company shall have been sold by either (i) a sale of all or substantially
all its assets, or (ii) a merger or consolidation, other than any merger
or consolidation pursuant to which the Company acquires another entity, or
(iii) a tender offer, whether solicited or unsolicited;
or
|
|
·
|
any
party, other than the Company, is or becomes the “beneficial owner” (as
defined in the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), directly or indirectly, of voting securities representing 50% or
more of the total voting power of the
Company.
|
W.
Gray Hudkins
In the
event Mr. Hudkins voluntarily terminates his employment with the requisite 90
days notice or if his employment is terminated by the Company with cause, he is
not entitled to any compensation payments following the date of
termination.
If Mr.
Hudkins’ employment is terminated by the Company without cause, Mr. Hudkins
would be entitled to receive his base salary then in effect ($300,000 as of
December 31, 2009) for a period of six (6) months ($150,000) plus six (6) months
non-accountable expense allowances ($10,000). If Mr. Hudkins’ employment
agreement expires without renewal, he would be entitled to receive his base
salary then in effect ($300,000 as of December 31, 2009) for a period of six (6)
months ($150,000) plus six (6) months non-accountable expense allowance
($10,000). If the Company elects, it may continue to pay base salary to Mr.
Hudkins for an additional six months, provided he continues to comply with the
terms and conditions of the non-competition and non-solicitation provisions in
his employment agreement.
In the
event of a change of control, Mr. Hudkins would immediately vest in 275,000
shares of restricted stock awards granted to him under the 2005 Incentive Stock
Award Plan. At December 31, 2009, based upon the closing common stock market
price of $0.32, these awards would be worth $88,000. All lock-up agreements with
respect to common stock acquirable upon exercise of Mr. Hudkins’ options would
automatically expire upon a change of control.
Upon the
event of his death or disability, Mr. Hudkins’ estate would be entitled to
receive base compensation for the remainder of the month for which death or
disability occurred, which would not exceed $25,000. Upon Mr. Hudkins’ death,
his beneficiary would receive the proceeds of a $1 million life insurance
policy.
Kathleen
P. Bloch
If Ms.
Bloch’s employment is terminated by the Company with or without cause, or if she
voluntarily terminates her employment with the requisite two-weeks notice, she
is not entitled to any compensation payments following the date of termination.
In addition, Ms. Bloch is not entitled to any potential payments upon a change
of control. Upon the event of her death or disability, Ms. Bloch’s estate would
be entitled to receive base compensation for the remainder of the month for
which death or disability occurred, which would not exceed $20,834.
Peter
A. Asch
If Mr.
Asch’s employment is terminated by the Company with or without cause, or if he
voluntarily terminates his employment with the requisite two-weeks notice, he is
not entitled to any compensation payments following the date of termination. In
addition, Mr. Asch is not entitled to any potential payments upon a change of
control. Upon the event of his death or disability, Mr. Asch’s estate would be
entitled to receive base compensation for the remainder of the month for which
death or disability occurred, which would not exceed $24,500.
Director
Summary Compensation Table
The
following table summarizes the compensation paid to our non-employee directors
for the fiscal year ended December 31, 2009:
|
Name(1)
|
Fees
Earned or
Paid
in Cash
($)
|
Total
($)
|
||||||
|
Warren
B. Kanders (2)
|
$ | _ | $ | _ | ||||
|
Stephen
M. Brecher
|
25,000 | 25,000 | ||||||
|
Burtt
R. Ehrlich
|
25,000 | 25,000 | ||||||
|
Stuart
P. Greenspon
|
15,000 | 15,000 | ||||||
|
David
S. Hershberg
|
15,000 | 15,000 | ||||||
|
(1)
|
W.
Gray Hudkins, the Company’s President and Chief Executive Officer, and
Peter A. Asch, the President of Twincraft, Inc., are not included in this
table. Messrs. Hudkins and Asch are employees of the Company and receive
no additional compensation for their services as directors. The
compensation for Mr. Hudkins and Mr. Asch as employees of the Company is
shown in the Summary Compensation Table and other tables in “Executive
Compensation” showing compensation of named executive officers. Mr. Asch
was not an employee or director of the Company prior to January 23,
2007.
|
|
(2)
|
Warren
B. Kanders, the Company’s Chairman, does not receive compensation in his
role as a director of the Company. Mr. Kanders is a principal of Kanders
& Company, which receives consulting fees from the Company. See
“Certain Relationships and Related Transactions”
below.
|
In 2010,
the non-management directors of the Company other than Mr. Kanders, will each
receive cash in the amount of $15,000 which is payable in quarterly installments
during the course of the year. In addition, the Chairs of the Compensation
Committee and the Audit Committee will each be paid an additional $10,000 in
2010 to serve as the Chairs of such committees, which will be payable in
quarterly installments during the course of the year.
COMPENSATION
COMMITTEE REPORT
The
Company’s Compensation Committee of the Board of Directors (the “Compensation
Committee”) has submitted the following report for inclusion in this filing on
Form 10-K/A:
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis contained in this filing on Form 10-K/A with management. Based on
the Compensation Committee’s review of and the discussions with management with
respect to the Compensation Discussion and Analysis, the Compensation Committee
has recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2009 for filing with the SEC.
|
MEMBERS
OF THE COMPENSATION
|
|
|
COMMITTEE
|
|
|
Burtt
R. Ehrlich (Chairman)
|
|
|
Stuart
P. Greenspon
|
|
|
David
S. Hershberg
|
Compensation
Committee Interlocks and Insider Participation
During
2009, none of the members of our Compensation Committee, (i) served as an
officer or employee of the Company or its subsidiaries, (ii) was formerly an
officer of the Company or its subsidiaries or (iii) entered into any
transactions with the Company or its subsidiaries, other than stock option
agreements and restricted stock awards. During 2009, none of our executive
officers (i) served as a member of the Compensation Committee (or other board
committee performing equivalent functions or, in the absence of any such
committee, the board of directors) of another entity, one of whose executive
officers served on our Compensation Committee, (ii) served as director of
another entity, one of whose executive officers served on our Compensation
Committee, or (iii) served as member of the compensation committee (or other
board committee performing equivalent functions or, in the absence of any such
committee, the board of directors) of another entity, one of whose executive
officers served as a director of the Company.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth, as of April 21, 2010, certain information regarding
beneficial ownership of our common stock by (a) each person or entity who is
known to us owning beneficially 5% or more of our common stock, (b) each of our
directors, (c) each of our named executive officers and (d) all named executive
officers and directors as a group. Unless otherwise indicated, each of the
Stockholders shown in the table below has sole voting and investment power with
respect to the shares beneficially owned. Unless otherwise indicated, the
address of each person named in the table below is c/o 419 Park Avenue South,
Suite 500, New York, New York 10016. As used in this table, a beneficial owner
of a security includes any person who, directly or indirectly, through contract,
arrangement, understanding, relationship or otherwise has or shares (i) the
power to vote, or direct the voting of, such security or (ii) investment power
which includes the power to dispose, or to direct the disposition of, such
security. In addition, a person is deemed to be the beneficial owner of a
security if that person has the right to acquire beneficial ownership of such
security within 60 days after the date of this filing on Form
10-K/A.
|
Common
Stock
Beneficially
Owned
|
Percent
(1)
|
|||||||
|
Warren
B. Kanders,
Chairman
of the Board of Directors
One
Landmark Square
Stamford,
CT 06901
|
3,857,105 | (2) | 40.22 | % | ||||
|
David
M. Knott
485
Underhill Blvd.
Syosset,
NY 11791
|
1,716,112 | (3) | 17.94 | % | ||||
|
York
Credit Opportunities Fund, LP
c/o
York Capital Management
767
Fifth Avenue, 17th
Floor
New
York, NY 10153
|
1,052,631 | (4) | 11.83 | % | ||||
|
Wynnefield
Capital Management, LLC
450
7th
Avenue, Suite 509
New
York, NY 10123
|
903,056 | (5) | 10.37 | % | ||||
|
Peter
A. Asch,
Director
and President of Twincraft, Inc.
2
Tigan Street
Winooski,
VT 0540
|
775,572 | (6) | 9.72 | % | ||||
|
White
Rock Capital Management, LP
3131
Turtle Creek Blvd.
Dallas,
TX 75219
|
700,000 | (7) | 8.92 | % | ||||
|
Ashford
Capital Management, Inc.
P.O.
Box 4172
Wilmington,
DE 19807
|
631,579 | (8) | 7.45 | % | ||||
|
Stephen
M. Brecher,
Director
|
52,500 | (9) | * | |||||
|
Burtt
R. Ehrlich,
Director
|
222,805 | (10) | 2.80 | % | ||||
|
Stuart
P. Greenspon,
Director
|
214,877 | (11) | 2.71 | % | ||||
|
David
S. Hershberg,
Director
|
15,000 | (12) | * | |||||
|
W.
Gray Hudkins,
Director,
President and Chief Executive Officer
|
418,529 | (13) | 5.08 | % | ||||
|
Kathleen
P. Bloch,
Vice
President, Chief Operating Officer and Chief Financial
Officer
|
53,629 | (14) | * | |||||
|
Directors
and executive officers as a group
(8
persons)
|
5,610,017 | (15) | 53.78 | % | ||||
|
*
Less than 1%
|
||||||||
|
(1)
|
The
applicable percentage of beneficial ownership is based on 7,848,774 shares
of common stock outstanding as of April 13, 2010, plus, with respect to
particular persons, shares of common stock that may be acquired upon
exercise or conversion of warrants, options or rights which are currently
exercisable or exercisable within 60 days of the date of this filing on
Form 10-K/A, including conversion of the Company’s outstanding 5%
convertible subordinated notes due December 7, 2011 (the
“Notes”).
|
|
(2)
|
Includes
1,506,856 shares presently issued and outstanding held by Langer Partners,
LLC, 200,000 shares presently issued and outstanding held by Kanders &
Company, Inc. (“Kanders & Company”) and 409,050 common shares
presently issued and outstanding held by Mr. Kanders; 515,000 shares
acquirable upon the exercise of options held by Langer Partners, LLC;
669,044 shares acquirable upon conversion of $3,118,880 in principal
amount of the Notes held by Mr. Kanders as trustee for members of his
family; 457,155 shares acquirable upon conversion of $2,131,120 in
principal amount of Notes held by Mr. Kanders individually; and 100,000
shares acquirable upon exercise of options held by Kanders & Company.
Mr. Kanders, who is the Chairman of our Board of Directors, is the sole
voting member and sole manager of Langer Partners, LLC, and the sole
stockholder of Kanders & Company. Does not include 500,000 shares
awarded to Mr. Kanders as a restricted stock award under the Company’s
2005 Stock Incentive Plan (the “2005 Plan”), which award is not presently
vested and which is not expected to vest within 60 days after the date
hereof.
|
|
(3)
|
Includes
1,716,112 shares issuable upon conversion of $8,000,000 in principal
amount of Notes held by Mr. Knott and related entities controlled by Mr.
Knott. Based on information in the Schedule 13G, as amended, filed on
February 14, 2007 by Mr. Knott and certain affiliates, Mr. Knott shares
voting power with respect to certain of such shares with an
affiliate.
|
|
(4)
|
Represents
1,052,631 shares acquirable upon conversion of $5,000,000 in principal
amount of Notes held by York Credit Opportunities Fund, LP. The share
ownership is based solely upon the Notes issued to York Credit
Opportunities Fund, L.P. Based on information in the Schedule 13G, as
amended, filed on February 16, 2010 by York Credit Opportunities Fund,
LP.
|
|
(5)
|
Includes
17,000 shares held by Wynnefield Partners Small Cap Value, LP.; 14 ,000
shares held by Wynnefield Partners Small Value Offshore Fund, Ltd.; and
14,000 shares held by Wynnefield Partners Small Cap Value LP1. Also,
includes 343,222 shares acquirable upon conversion of $1,600,000 in
principal amount of Notes held by Wynnefield Small Cap Value Offshore
Fund, Ltd., 214,514 shares acquirable upon conversion of $1,000,000 in
principal amount of Notes held by Wynnefield Partners Small Cap Value, LP,
and 300,320 shares acquirable upon conversion of $1,400,000 in principal
amount of Notes held by Wynnefield Partners Small Cap Value LP I
(collectively, the “Wynnefield Entities”). Messrs. Nelson Obus and Joshua
Landes are the co-managing members of these three funds or the companies
that own these funds and have the shared power to vote and dispose of the
shares of our common stock issuable upon conversion of the Notes owned by
the Wynnefield Entities. The share ownership is based solely upon Notes
issued to the Wynnefield Entities.
|
|
(6)
|
Includes
133,333 shares, but excludes 66,667 shares, acquirable by Mr. Asch under
options which vest in three equal annual consecutive tranches commencing
on January 23, 2009.
|
|
(7)
|
Includes
475,000 shares held by White Rock Capital Management, L.P. (“White Rock
Capital”); 175,000 shares held by White Rock Capital (TX), Inc. (“White
Rock, Inc.”) for the account of an institutional client; and 50,000 shares
held by Thomas U. Barton, Joseph U. Barton and an employee of White Rock,
Inc. The general partner of White Rock Management is White Rock, Inc.
Messrs. Thomas U. Barton and Joseph U. Barton are the shareholders of
White Rock, Inc. and have the shared power to vote and dispose of the
shares of common stock held by White Rock Management. Based upon
information in the Schedule 13G filed on April 14, 2010 by White Rock
Management, L.P.
|
|
(8)
|
Includes
631,579 shares issuable upon conversion of $3,000,000 in principal amount
of Notes held by Ashford Capital Management, Inc. Based solely upon
information in the Schedule 13G, as amended, filed on February 12, 2010 by
Ashford Capital Management, Inc.
|
|
(9)
|
Consists
of 52,500 shares acquirable under options awarded to Mr. Brecher. Does not
include 7,500 shares awarded to Mr. Brecher as a restricted stock award
under the 2005 Plan, which award is not presently vested and which is not
expected to vest within 60 days after the date
hereof.
|
|
(10)
|
Includes
111,376 options granted to Mr. Ehrlich. Does not include 7,500 shares
awarded to Mr. Ehrlich as a restricted stock award under the 2005 Plan,
which award is not presently vested and which is not expected to vest
within 60 days after the date hereof.
|
|
(11)
|
Includes
52,500 shares acquirable upon exercise of options granted to Mr.
Greenspon, and 32,177 shares issuable upon conversion of a Note held by
Mr. Greenspon in the principal amount of $150,000. Does not include (i)
41,903 shares held by his wife, Ms. Camilla Trinchieri, as to which Mr.
Greenspon disclaims beneficial ownership, or (ii) 7,500 shares awarded to
Mr. Greenspon as a restricted stock award under the 2005 Plan, which award
is not presently vested and is not expected to vest within 60 days after
the date hereof.
|
|
(12)
|
Includes
15,000 shares acquirable upon exercise of options granted to Mr.
Hershberg.
|
|
(13)
|
Includes
337,500 shares acquirable upon exercise of options granted to Mr. Hudkins.
Does not include 275,000 shares awarded to Mr. Hudkins as a restricted
stock award under the 2005 Plan, which award is not presently vested and
is not expected to vest within 60 days after the date hereof. Includes
53,629 shares issuable upon conversion of a Note in the principal amount
of $250,000 held by Mr. Hudkins.
|
|
(14)
|
Includes
53,629 shares issuable upon conversion of a Note in the principal amount
of $250,000 held by Ms. Bloch. Does not include a restricted stock award
of 75,000 shares of common stock granted to Ms. Bloch under the Company’s
2007 Stock Incentive Plan, which award is not presently vested and will
vest in full upon the later to occur of (i) the Company’s achievement of
trailing 12-month EBITDA of $25,000,000, and (ii) the Company’s common
stock having a closing price of $15.00 for five trading days in any period
of 10 consecutive trading days. The award would expire if it has not
vested on or before September 4, 2017, or if Ms. Bloch is no longer an
employee of the Company at the time of vesting.
|
|
(15)
|
Includes
2,567,883 shares acquirable upon exercise of stock options and warrants,
or conversion of Notes, held by such
persons.
|
Item
13. Certain Relationships and Related Transactions
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Consulting Agreement with Kanders
& Company. On November 12, 2004, the Company entered into
a consulting agreement (the “Consulting Agreement”) with Kanders & Company,
Inc., the sole stockholder of which is Warren B. Kanders, the Company’s Chairman
of the Board of Directors, and who is the sole manager and voting member of
Langer Partners, LLC (“Langer Partners”), the Company’s largest
stockholder. The Consulting Agreement provides that Kanders &
Company will act as the Company’s non-exclusive consultant to provide the
Company with strategic consulting and corporate development services for a term
of three years. Kanders & Company and Mr. Kanders are required to devote
only as much time to the Company’s business as they deem appropriate. Pursuant
to the Consulting Agreement, Kanders & Company is entitled to an annual fee
of $300,000 and may receive separate compensation for assistance, at the
Company’s request, with certain transactions or other matters to be determined
by the Board of Directors from time to time. During 2009, Kanders
& Company continued to render consulting services to the Company and the
Company continued to pay for such services in accordance with the terms of the
expired Consulting Agreement, as approved by the Board of
Directors. The Company expects to negotiate a new consulting
agreement with Kanders & Company during 2010. The Company has also
agreed to provide Kanders & Company with indemnification protection, which
survives the termination of the Consulting Agreement for six years, and extends
to any actual or wrongfully attempted breach of duty, neglect, error, or
misstatement by Kanders & Company alleged by any claimant.
5% Convertible Subordinated
Notes. On December 8, 2006, the Company sold $28,880,000 of the Company’s
5% Convertible Notes due December 7, 2011 (the “Notes”) in a private placement.
Warren B. Kanders, the Company’s Chairman of the Board of Directors, purchased
$2,000,000 of the Notes, and Stuart P. Greenspon, a director of the Company,
purchased $150,000 of the Notes. The number of shares of common stock issuable
on conversion of the Notes, as of December 31, 2009, is 6,195,165, subject to
adjustment for stock splits, stock dividends and certain issuances of common
stock hereafter at prices less than the current conversion price, and the
conversion price as of such date was $4.6617. During the year ended December 31,
2008, Mr. Kanders purchased $3,250,000 of the Notes and W. Gray Hudkins,
President and Chief Executive Officer, and Kathleen P. Bloch, the Company’s
Chief Operating Officer and Chief Financial Officer, each purchased $250,000 of
the Notes from prior Note holders.
Lease Agreement — Winooski,
Vermont. On January 23, 2007, in connection with the acquisition by the
Company of Twincraft, Inc. (“Twincraft”) from four individuals, including Peter
A. Asch, President of Twincraft and one of the Company’s directors and a nominee
for election as a director, Twincraft entered into a lease agreement (the
“Winooksi Lease”) with Asch Partnership, a Vermont general partnership, the
principals of which are the father and uncle of Mr. Asch. Pursuant to the
Winooski Lease, Twincraft leases approximately 90,500 square feet of space in
Winooski, Vermont, for use as a manufacturing facility. The Winooski Lease runs
for seven years, commencing January 23, 2007 (the “Initial Term”) and is subject
to an additional seven year term at Twincraft’s option (the “Extended Term”).
Base rent during year one of the Initial Term was $362,000 per annum, is
$452,500 in the lease year commencing January 23, 2008, and remains $452,500 per
annum for the remaining five years of the Initial Term. Additionally, Twincraft
has an option to purchase the property covered by the Winooski Lease for
$4,000,000 during the third through seventh years of the Initial Term, and at
fair market value during the Extended Term. Twincraft is also responsible for
payments to cover taxes and operating expenses relating to the Winooksi
Lease.
Lease Agreement — Essex,
Vermont. On January 23, 2007, in connection with the Twincraft
acquisition, Twincraft entered into an amendment to its existing sublease
agreement dated October 1, 2003 (the “Essex Lease”) with Asch Enterprises, LLC
(“Asch Enterprises”), a Vermont limited liability company, the principal of
which is Mr. Asch. Pursuant to the Essex Lease, Twincraft leases approximately
76,000 square feet in Essex, Vermont, for use as a warehouse facility. The term
of the Essex Lease expires on October 1, 2010. Base rent during the term of the
Essex Lease is $303,600 per annum. In the event Asch Enterprises exercises its
option under the prime lease to purchase the property covered by the Essex
Lease, Asch Enterprises will pay Twincraft 25% of the rent paid by Asch
Enterprises to the over-landlord of the Essex Lease subsequent to the closing of
the Twincraft acquisition. Twincraft is also responsible for payments to cover
taxes and operating expenses relating to the Essex Lease.
Insurance Commissions and Advisory
Fees. In connection with the Company’s provision of health insurance and
related employee benefits, the Company retained, on April 11, 2008, the advisory
services of Krauter & Company, of New York, New York, an insurance broker
that employs Garrison Hudkins, who is a brother of W. Gray Hudkins. For the year
ending December 31, 2009, Krauter & Company earned insurance brokerage
commissions and advisory fees of approximately $30,000 out of the insurance
premiums paid by the Company with respect thereto. A portion of such commissions
and advisory fees may be directly or indirectly paid to Garrison Hudkins. The
Company believes the price and other terms of such insurance coverage and the
fees for advisory services are no less favorable than could be obtained from an
unrelated party. Effective February 1, 2010, the Company terminated the services
of Krauter & Company.
Review of Transactions with Related
Persons. The transactions described above involving Mr. Asch
was the result of arm’s length negotiations which were closed prior to his
becoming a director or a stockholder of the Company. The transaction with
respect to the Notes was a private placements of unregistered convertible debt
securities, and the rates and terms of the transactions were set by the Board of
Directors based on its estimates of the rates and other terms that would enable
the Company to raise the targeted amount of funds, and after arms-length
negotiations with certain purchasers of the Notes. The Board of Directors
consulted with an independent investment banker who acted as a placement agent
in connection with the private placements. Mr. Kanders purchased less than 7% of
Notes. The Consulting Agreement with Kanders & Company, was approved by the
Board of Directors immediately prior to Mr. Kanders’ joining the Board of
Directors and was based upon a review of compensation paid by other public
companies for the kinds of services to be rendered under the Consulting
Agreement. The Board of Directors has a general practice of requiring directors
interested in a transaction not to participate in deliberations or to vote upon
transactions in which they have an interest, and to be sure that transactions
with directors, executive officers and major shareholders are on terms that
align the interests of the parties to such agreements with the interests of the
Stockholders.
Consulting Agreement between
W. Gray Hudkins and
Kanders & Company. The Company’s President and Chief Executive
Officer and a director of the Company provides certain consulting services to
Kanders & Company, the sole stockholder of which is Warren B. Kanders, the
Company’s Chairman of the Board of Directors, and who is the sole manager and
voting member of Langer Partners, LLC, the Company’s largest
stockholder.
Item
14. Principal Accounting Fees and Services
PRINCIPAL
ACCOUNTING FEES AND SERVICES
Aggregate
fees for professional services rendered for the Company by BDO Seidman, LLP for
the years ended December 31, 2009 and 2008 were:
|
2009
|
2008
|
|||||||
|
Audit
Fees
|
$ | 273,000 | $ | 326,053 | ||||
|
Audit
Related Fees
|
32,769 | 96,170 | ||||||
|
Tax
Fees
|
32,500 | 103,633 | ||||||
|
Total
|
$ | 338,269 | $ | 525,856 | ||||
Audit Fees. The Audit Fees
for the years ended December 31, 2009 and 2008, respectively, were for
professional services rendered for the audit of our consolidated financial
statements for such years, and for the review of our unaudited interim
consolidated financial statements included in our quarterly reports on Form 10-Q
for 2009 and 2008. In addition, Audit Fees for such years also include fees for
services rendered to us by BDO Seidman, LLP for statutory audits and review of
documents filed with the Commission.
Audit Related Fees. The Audit
Related Fees for the year ended December 31, 2009 were related to the
divestitures of various businesses during 2009. The Audit Related Fees for the
year ended December 31, 2008 were for accounting services related to the
allocation of purchase price and review of the pro forma financial
information of businesses acquired in 2008.
Tax Fees. Tax Fees as of the
years ended December 31, 2009 and 2008 were for services related to tax
compliance, including the preparation of tax returns and claims for refund, tax
planning and advice, including assistance with and representation in tax audits
and appeals, and advice related to asset disposals and mergers and
acquisitions.
All Other Fees. There were no
other fees incurred for the years ended December 31, 2009 and 2008.
Auditor Independence. The
Audit Committee has considered the non-audit services provided by BDO Seidman,
LLP and determined that the provision of such services had no effect on BDO
Seidman, LLP’s independence from the Company.
Audit Committee Pre-Approval Policy
and Procedures. The Audit Committee must review and pre-approve all audit
and non-audit services provided by BDO Seidman, LLP, our independent registered
public accounting firm, and has adopted a Pre-approval Policy which requires all
audit and non-audit services to be approved by the Audit Committee before
services are rendered. In conducting reviews of audit and non-audit services,
the Audit Committee will determine whether the provision of such services would
impair the accountants’ independence. The Audit Committee will only pre-approve
services which it believes will not impair our accountants’ independence. The
term of any pre-approval is twelve months from the date of pre-approval, unless
the Audit Committee specifically provides for a different period. Any proposed
services exceeding pre-approved fee ranges or limits must be specifically
pre-approved by the Audit Committee.
Each
pre-approval request shall be accompanied by detailed back-up documentation
regarding the specific services to be provided. The pre-approval request shall
identify whether the proposed services was initially recommended by the auditor.
Each pre-approval request for any non-audit service must be accompanied by a
statement of the accountants (which may be in writing or given orally to the
Audit Committee) as to whether, in the accountants’ view, the request or
application is consistent with the Commission’s rules on auditor
independence.
For the
fiscal years ended December 31, 2009 and 2008, the Audit Committee has not
waived the pre-approval requirement for any services rendered by BDO Seidman,
LLP.
PART
IV
Item
15. Exhibits and Financial Statement Schedules
2.
Exhibits
|
Exhibit
No.
|
Description of Exhibit
|
|
|
3.1
|
Agreement
and Plan of Merger dated as of May 15, 2002, between Langer, Inc., a New
York corporation, and Langer, Inc., a Delaware corporation (the surviving
corporation), incorporated herein by reference to Appendix A of our
Definitive Proxy Statement for the Annual Meeting of Stockholders held on
June 27, 2002, filed with the Securities and Exchange Commission on May
31, 2002.
|
|
|
3.2
|
Certificate
of Incorporation, incorporated herein by reference to Appendix B of our
Definitive Proxy Statement for the Annual Meeting of Stockholders held on
June 27, 2002, filed with the Securities and Exchange Commission on May
31, 2002.
|
|
|
3.3
|
Certificate
of Amendment to the Certificate of Incorporation, incorporated herein by
reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed
on July 28, 2009.
|
|
|
3.4
|
By-laws,
incorporated herein by reference to Appendix C of our Definitive Proxy
Statement for the Annual Meeting of Stockholders held on June 27, 2002,
filed with the Securities and Exchange Commission on May 31,
2002.
|
|
|
4.1
|
Specimen
of Common Stock Certificate, incorporated herein by reference to our
Registration Statement of Form S-1 (File No. 2- 87183).
|
|
|
10.1†+
|
Consulting
Agreement between Langer, Inc. and Kanders & Company, Inc., dated
November 12, 2004.
|
|
|
10.2+
|
Option
Agreement between Langer, Inc. and Kanders & Company, Inc., dated
February 13, 2001, incorporated herein by reference to Exhibit (d)(1)(G)
to the Schedule TO (File Number 005-36032).
|
|
|
10.3
|
Registration
Rights Agreement between Langer, Inc. and Kanders & Company, Inc.,
dated February 13, 2001, incorporated herein by reference to Exhibit
(d)(1)(I) to the Schedule TO (File Number 005-36032).
|
|
|
10.4
|
Indemnification
Agreement between Langer, Inc. and Kanders & Company, Inc., dated
February 13, 2001, incorporated herein by reference to Exhibit (d)(1)(J)
to the Schedule TO (File Number 005-36032).
|
|
|
10.5+
|
The
Company’s 2001 Stock Incentive Plan incorporated herein by reference to
Exhibit 10.18 of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.
|
|
|
10.6
|
Langer
Group Retirement Plan, restated as of July 20, 1979 incorporated by
reference to our Registration Statement of Form S-1 (File No.
2-87183).
|
|
|
10.7
|
Agreement,
dated March 26, 1992, and effective as of March 1, 1992, relating to our
401(k) Tax Deferred Savings Plan, incorporated by reference to our Form
10-K for the fiscal year ended February 29, 1992.
|
|
|
10.8
|
Registration
Rights Agreement, dated May 6, 2002, among Langer, Inc., Benefoot, Inc.,
Benefoot Professional Products, Inc., and Dr. Sheldon Langer, incorporated
herein by reference to Exhibit 10.1 of our Current Report on Form 8-K,
filed with the Securities and Exchange Commission on May 13,
2002.
|
|
Exhibit
No.
|
Description of Exhibit
|
|
|
10.9
|
Stock
Purchase Agreement, dated as of September 22, 2004, by and among Langer,
Inc., LRC North America, Inc., SSL Holdings, Inc., and Silipos, Inc.,
incorporated herein by reference to Exhibit 2.1 of our Current Report on
Form 8-K filed with the Securities and Exchange Commission on October 6,
2004.
|
|
|
10.10
|
Note
and Warrant Purchase Agreement, dated September 30, 2004, by and among
Langer, Inc., and the investors named therein, incorporated herein by
reference to Exhibit 4.1 of our Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 6, 2004.
|
|
|
10.11
|
Form
of Warrant to purchase shares of the common stock of Langer, Inc.,
incorporated herein by reference to Exhibit 4.3 of our Current Report on
Form 8-K filed with the Securities and Exchange Commission on October 6,
2004.
|
|
|
10.12†+
|
Stock
Option Agreement between Langer, Inc. and W. Gray Hudkins, dated November
12, 2004.
|
|
|
10.13†+
|
Restricted
Stock Agreement between Langer, Inc. and W. Gray Hudkins, dated November
12, 2004.
|
|
|
10.14†
|
Stock
Option Agreement between Langer, Inc. and Kanders & Company, Inc.
dated November 12, 2004.
|
|
|
10.15†
|
Patent
License Agreement, including amendment no. 1 thereto, between Applied
Elastomerics, Inc. and SSL Americas, Inc., dated effective November 30,
2001, incorporated herein by reference to Exhibit 10.41 of our Annual
Report on Form 10-K for the year ended December 31, 2004, filed with the
Securities and Exchange Commission on March 30, 2005.
|
|
|
10.16
|
Assignment
and Assumption Agreement, dated as of September 30, 2004, by and between
SSL Americas, Inc. and Silipos, Inc., incorporated herein by reference to
Exhibit 10.42 of our Annual Report on Form 10-K for the year ended
December 31, 2004, filed with the Securities and Exchange Commission on
March 30, 2005.
|
|
|
10.17
|
License
Agreement, dated as of January 1, 1997, by and between Silipos, Inc. and
Gerald P. Zook, incorporated herein by reference to Exhibit 10.43 of our
Annual Report on Form 10-K for the year ended December 31, 2004, filed
with the Securities and Exchange Commission on March 30,
2005.
|
|
|
10.18
|
Copy
of Sublease between Calamar Enterprises, Inc. and Silipos, Inc., dated May
21, 1998; First Amendment to Sublease between Calamar Enterprises, Inc.
and Silipos, Inc., dated July 15, 1998; and Second Amendment to Sublease
between Calamar Enterprises, Inc. and Silipos, Inc., dated March 1, 1999,
incorporated herein by reference to Exhibit 10.45 of our Annual Report on
Form 10-K for the year ended December 31, 2004, filed with the Securities
and Exchange Commission on March 30, 2005.
|
|
|
10.19 +
|
Form
of Amendment to Stock Option Agreement, incorporated herein by reference
to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on
December 27, 2005.
|
|
|
10.20
+
|
Form
of Amendment to Restricted Stock Award Agreement, incorporated herein by
reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K
filed on December 27, 2005.
|
|
|
10.21
|
Form
of Note Purchase Agreement dated as of December 7, 2006, among the Company
and the purchasers of the Company’s 5% Convertible Notes Due December 7,
2011, including letter amendment dated as of December 7, 2006, without
exhibits, incorporated herein by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed on December 14,
2006.
|
|
Exhibit
No.
|
Description of Exhibit
|
|
|
10.22
|
Form
of the Company’s 5% Convertible Note Due December 7, 2011, incorporated
herein by reference to Exhibit 10.2 of the Company’s Current Report on
Form 8-K filed on December 14, 2006.
|
|
|
10.23
|
Registration
Rights Agreement dated as of January 23, 2007, by and between the Company,
Peter A. Asch, Richard D. Asch, A. Lawrence Litke, and Joseph M. Candido,
incorporated herein by reference to Exhibit 10.1 of the Company’s Current
Report on Form 8-K filed on January 29, 2007.
|
|
|
10.24 +
|
Employment
Agreement dated January 23, 2007, between Twincraft, Inc. and Peter A.
Asch, incorporated herein by reference to Exhibit 10.2 of the Company’s
Current Report on Form 8-K filed on January 29, 2007.
|
|
|
10.25 +
|
Employment
Agreement dated January 23, 2007, between Twincraft, Inc. and A. Lawrence
Litke, incorporated herein by reference to Exhibit 10.3 of the Company’s
Current Report on Form 8-K filed on January 29, 2007.
|
|
|
10.26+
|
Employment
Agreement dated January 23, 2007, between Twincraft, Inc. and Richard
Asch, incorporated herein by reference to Exhibit 10.4 of the Company’s
Current Report on Form 8-K filed on January 29, 2007.
|
|
|
10.27+
|
Consulting
Agreement dated January 23, 2007, between Twincraft, Inc. and Fifth
Element LLC, incorporated herein by reference to Exhibit 10.5 to the
Company’s Current Report on Form 8-K filed on January 29,
2007.
|
|
|
10.28
|
Lease
Agreement dated January 23, 2007, between Twincraft, Inc. and Asch
Partnership, incorporated herein by reference to Exhibit 10.6 to the
Company’s Current Report on Form 8-K filed on January 29,
2007.
|
|
|
10.29
|
Lease
dated October 1, 2003 and as amended January 23, 2006, between Twincraft,
Inc. and Asch Enterprises, LLC, incorporated herein by reference to
Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on January
29, 2007.
|
|
|
10.30
|
Stock
Purchase Agreement dated as of November 14, 2006, by and among Langer,
Inc., Peter A. Asch, Richard D. Asch, A. Lawrence Litke, and Joseph M.
Candido, incorporated herein by reference to Exhibit 10.8 to the Company’s
Current Report on Form 8-K filed on January 29, 2007.
|
|
|
10.31
|
Loan
and Security Agreement dated as of May 11, 2007, between Wachovia Bank,
National Association, and Langer, Inc., Silipos, Inc., Regal Medical,
Inc., and Twincraft, Inc., incorporated herein by reference to Exhibit
10.1 to the Company’s Current Report on Form 8-K filed on May 15,
2007.
|
|
|
10.32 +
|
Employment
Agreement dated as of July 26, 2007, between the Company and Kathleen P.
Bloch, incorporated herein by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on July 27, 2007.
|
|
|
10.33 +
|
Employment
Agreement dated as of October 1, 2007, between the Company and W. Gray
Hudkins, incorporated herein by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed on October 12, 2007.
|
|
|
10.34
|
Amendment
dated June 21, 2007, to Loan and Security Agreement dated as of May 11,
2007, between Wachovia Bank, National Association, and Langer, Inc.,
Silipos, Inc., Regal Medical, Inc., and Twincraft,
Inc., incorporated herein by reference to Exhibit 10.63 to our
Annual Report on Form 10-K for the year ended December 31, 2007, filed on
March 31, 2008.
|
|
Exhibit
No.
|
Description of Exhibit
|
|
|
10.35
|
Amendment
No. 2 dated as of October 1, 2007, to Loan and Security Agreement dated as
of May 11, 2007, between Wachovia Bank, N.A., and Langer, Inc., Silipos,
Inc., Regal Medical, Inc., and Twincraft, Inc., incorporated herein by
reference to Exhibit 10.64 to our Annual Report on Form 10-K for the year
ended December 31, 2007, filed on March 31, 2008.
|
|
|
10.36
|
Form
of Indemnification Agreement between the Company and its executive
officers and directors, incorporated herein by reference to Exhibit 10.65
to our Annual Report on Form 10-K for the year ended December 31, 2007,
filed on March 31, 2008.
|
|
|
10.37
|
Amendment
No. 3 dated as of April 16, 2008, to Loan and Security Agreement dated as
of May 11, 2007, between Wachovia Bank, N.A., and Langer, Inc., Silipos,
Inc., Regal Medical, Inc., and Twincraft, Inc., incorporated herein by
reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on
April 18, 2008.
|
|
|
10.38
|
Form
of Sublease between the Langer, Inc. as undertenant and Smile Train, Inc.,
as overtenant with respect to premises at 245 Fifth Avenue, New York,
N.Y., incorporated herein by reference to Exhibit 10.1 to our Current
Report on Form 8-K, filed on May 7, 2008.
|
|
|
10.39
|
Sale
Agreement dated June 11, 2008, among Langer, Inc., as seller and Messrs.
John Shero, Carl David Ray, and Ryan Hodge, as purchasers with respect to
the outstanding membership interests in Regal Medical Supply, LLC.,
incorporated herein by reference to Exhibit 2.1 to our Current Report on
Form 8-K, filed on June 17, 2008.
|
|
|
10.40
|
Share
Purchase Agreement, dated as of July 31, 2008, by and among Langer Canada,
Inc. and 9199-9200 Quebec, Inc., incorporated herein by reference to
Exhibit 2.1 to our Current Report on Form 8-K, filed on August
1, 2008.
|
|
|
10.41
|
Amendment
No. 4 dated October 24, 2008, to Loan and Security Agreement dated May 11,
2007, between Wachovia Bank, National Association, Langer,
Inc., Silipos, Inc., Regal Medical, Inc., and Twincraft,
Inc., incorporated herein by reference to Exhibit 10.1 to our
Current Report on Form 8-K, filed on October 30, 2008.
|
|
|
10.42
|
Asset
Purchase Agreement dated as October 24, 2008, by and between Langer, Inc.,
and Langer Acquisition Corp., incorporated herein by reference
to Exhibit 2.1 to our Current Report on Form 8-K, filed on October 30,
2008.
|
|
|
10.43
|
Agreement,
dated as of August 5, 2009, between PC Group, Inc. and W. Gray Hudkins,
incorporated
herein by reference to Exhibit 10.1 to our Quarterly Report or Form 10-Q
for the period ended June 30, 2009, filed on August 6, 2009.
|
|
|
21.1
|
Subsidiaries
of the Registrant, incorporated herein by reference to Exhibit 21.1 to our
Annual Report on Form 10-K for the year ended December 31, 2009 filed on
March 18, 2010.
|
|
|
23.1
|
Consent
of BDO Seidman, LLP, incorporated herein by reference to Exhibit 23.1 to
our Annual Report on Form 10-K for the year ended December 31, 2009 filed
on March 18, 2010.
|
|
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification by Principal Executive
Officer.
|
|
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification by Principal Financial
Officer.
|
|
|
32.1
|
Section
1350 Certification by Principal Executive Officer.
|
|
|
32.2
|
Section
1350 Certification by Principal Financial
Officer.
|
|
†
|
Incorporated
herein by reference to our Registration Statement on Form S-1 (File No.
333-120718) filed with the Securities and Exchange Commission on November
23, 2004.
|
|
+
|
This
exhibit represents a management contract or compensation
plan.
|
SIGNATURES
Pursuant
to the requirements of Section l3 or l5(d) of the Securities Exchange Act of
l934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
PC
GROUP, INC.
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
W. Gray Hudkins
|
|
|
W.
Gray Hudkins
|
|||
|
President
and Chief Executive Officer
(Principal
Executive Officer)
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
Kathleen P. Bloch
|
|
|
Kathleen
P. Bloch
|
|||
|
Vice
President and Chief Financial Officer
(Principal
Financial
Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of l934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
|
Date:
April 30, 2010
|
By:
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
Peter A. Asch
|
|
|
Peter
A. Asch
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
Stephen M. Brecher
|
|
|
Stephen
M. Brecher
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
Burtt R. Ehrlich
|
|
|
Burtt
R. Ehrlich
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
Stuart P. Greenspon
|
|
|
Stuart
P. Greenspon
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
David S. Hershberg
|
|
|
David
S. Hershberg
|
|||
|
Director
|
|||
|
Date:
April 30, 2010
|
By:
|
/s/
W. Gray Hudkins
|
|
|
W.
Gray Hudkins
|
|||
|
Director
|
EXHIBIT
LIST
|
Exhibit
No.
|
Description of Exhibit
|
|
|
31.1
|
Certification
of Principal Executive Officer
|
|
|
31.2
|
Certification
of Principal Financial Officer
|
|
|
32.1
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
32.2
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|