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Steelcloud Inc – ‘10-K/A’ for 10/31/99

On:  Wednesday, 4/5/00, at 5:08pm ET   ·   For:  10/31/99   ·   Accession #:  912057-0-16333   ·   File #s:  0-24015, 333-48177   ·   Correction:  This Filing’s “Filed as of” Date was Corrected and “Changed as of” 6/23/04 by the SEC on 6/23/04. ®

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/05/00  Steelcloud Inc                    10-K/A®    10/31/99    1:23K                                    Merrill Corp/FA

Amendment to Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amendment to Annual Report                            10     45K 


Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
2Item 10. Directors and Executive Officers
4Item 11. Executive Compensation
8Item 12. Security Ownership of Certain Beneficial Owners and Management
9Item 13. Certain Relationships and Related Transactions
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 5, 2000 REGISTRATION NO. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED: OCTOBER 31, 1999 COMMISSION FILE NUMBER: 0-24015 ------------------------ DUNN COMPUTER CORPORATION (Exact Name of Registrant as Specified in its Charter) [Download Table] VIRGINIA 54-1890464 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification Number) 1306 SQUIRE COURT DULLES, VIRGINIA 20166 (Address of principal executive office) (Zip Code) 703-450-0400 Registrant's telephone number, including area code: ------------------------ SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NONE ------------------------ SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT: COMMON STOCK, PAR VALUE $.001 PER SHARE ------------------------ (Title of class) Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the issuer 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 there is no disclosure of delinquent filers in response to Item 405 of Regulation K contained in this form, and no disclosure will 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. / / The aggregate market value of the voting and non-voting common equity held by non-affiliates computed at $2.63 per share, the closing price of the Common Stock on January 31, 2000, was $16,933,384. The number of shares of the issuer's Common Stock outstanding as of January 31, 2000 was 9,419,509. DOCUMENTS INCORPORATED BY REFERENCE NONE -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS Set forth below is certain information regarding the directors, including the nominees, and executive officers of the Company: [Enlarge/Download Table] --------------------------------------------------------------------------------------------------------- NAME AGE POSITION --------------------------------------------------------------------------------------------------------- Thomas P. Dunne 58 Chairman of the Board, Chief Executive Officer, and President --------------------------------------------------------------------------------------------------------- John D. Vazzana 56 Executive Vice President, Chief Financial Officer, Director --------------------------------------------------------------------------------------------------------- Claudia N. Dunne 40 Vice President, Director --------------------------------------------------------------------------------------------------------- VADM E. A. Burkhalter, Jr. USN 70 Director --------------------------------------------------------------------------------------------------------- Daniel Sinnott 65 Director --------------------------------------------------------------------------------------------------------- Benjamin Krieger 65 Director --------------------------------------------------------------------------------------------------------- All Directors are elected to staggered three-year terms. Each Director holds office until a successor is elected and qualified unless the Director dies, resigns, or is removed from office. Executive officers hold office until their successors are chosen and qualified, subject to earlier removal by the Board of Directors. There are currently six Directors on the Company's Board of Directors. Set forth below is a biographical description of each executive officer and Director of the Company: THOMAS P. DUNNE has been Chairman, Chief Executive Officer and President of Dunn since he founded the company in 1987. As a Class III director, the current term of Mr. Dunne on the Board of Directors is until the first annual meeting after fiscal year 2000. From 1982 to 1987, Mr. Dunne was the Director of Sales of Syntrex, Inc., a corporation that supplies computer hardware and software to the legal profession. Prior thereto, Mr. Dunne spent 12 years with the computer division of Perkin Elmer Corporation, where he held several positions, including Director of North American Sales. Mr. Dunne also served in the United States Army for two years where he was a Senior Instructor with the Army Electronics Command. Mr. Dunne is married to Claudia N. Dunne, the Vice President of the Company. JOHN D. VAZZANA has been a Class I Director of Dunn since 1994 and was Executive Vice President and Chief Financial Officer until his resignation effective August 31, 1999. From 1992 to 1994, Mr. Vazzana was the Chief Executive Officer of Hitchler Industry; a manufacturer of plastic lumber made from recycled plastic. From 1986 to 1992, Mr. Vazzana was founder and Chief Executive Officer of NRM Steelastic, a company engaged in the manufacture of capital equipment for the tire industry. Prior thereto, Mr. Vazzana was Executive Vice President of C3, Inc., a federal computer systems integrating company, which he joined in 1974. CLAUDIA N. DUNNE, a co-founder of Dunn, has been Vice President and a Class I Director of Dunn since its inception. From 1985 to 1987, Ms. Dunne was a Federal Proposal Manager for Syntrex, Inc. From 1983 to 1985, Ms. Dunne was Proposal Manager for Harris and Paulson, which also sold minicomputers and proprietary time and accounting software for law firms. Ms. Dunne is married to Thomas P. Dunne, the President of the Company.
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VICE ADMIRAL E. A. BURKHALTER, JR., USN (RET.) has been a Class II Director of Dunn since January 1997. Mr. Burkhalter is currently the President of Burkhalter Associates, Inc.; a consulting firm providing services in the areas of international and domestic strategy, management policy and technology applications, for both government and industry. Mr. Burkhalter spent 40 years as a member of the United Stated Navy, during which time he held several positions, including Director of Strategic Operations for the Chairman of the Joint Chiefs of Staff. He is currently the Chairman of the Attorney General's Policy Advisory Panel for Law Enforcement Technology, a member of the Director of Central Intelligence (DCI) Military Advisory Panel and an advisor to the Defense Intelligence Agency. He is also an Officer and Director of the Navy Submarine League. DANIEL SINNOTT has been a Class II Director of Dunn since January, 1997. Mr. Sinnott is currently a consultant with Worldwide Internet Solutions, Inc. ("WIZnet"). WIZnet provides electronic catalogs and adaptive recognition search technology and facilitates electronic commerce linking buyers and sellers via secure mail. From 1995 until March 1998, Mr. Sinnott was Chief Executive Officer of WIZnet. In 1991 Mr. Sinnott was a founder of Sinnott Bruno & Company ("SB&C"). SB&C is a management consulting firm providing advisory services to executive and management organizations that are in the emerging transition stages of development. Mr. Sinnott worked full time with SB&C from 1991 until joining WIZnet in 1995. BENJAMIN KRIEGER was appointed by the Board of Directors as a Class III Director of Dunn to fill a vacancy created by the resignations of Jorge and Oscar Fuster in November 1998. Mr. Krieger is currently a Partner with Corporate Development International (CDI). CDI specializes in the Pulp & Paper, Packaging, Graphic Arts and Distribution Industries. Prior to his current employment, Mr. Krieger was President, CEO and a Director of Ris Paper Company. Mr. Krieger began his career with Mead Corporation which he was promoted through the Company during his 25 year tenure. Mr. Krieger also serves on the Board of Directors for Intraco Systems, Inc. and Donside, USA. COMMITTEES OF THE BOARD The Company's Board of Directors has an Audit Committee, comprised of three outside Directors. In fiscal year 1999, the Audit Committee met 2 times. The Audit Committee reviews and approves the scope of the annual audit undertaken by the Company's independent certified public accountants and meets with them on a regular basis to review the progress and results of their work as well as any recommendations they may make. The Company's Board of Directors also has a Compensation Committee, comprised two outside Directors and Thomas P. Dunne. In fiscal year 1999, the Compensation Committee met 2 times. All of the members of each committee attended at least 75% of the meeting held by each committee on which he served.
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COMPENSATION OF DIRECTORS Dunn has not paid, and the Company does not presently propose to pay, compensation to any Director for acting in such capacity, except for nominal sums for attending Board of Directors meetings and reimbursement for reasonable expenses in attending those meetings. In January 1997, Dunn granted each of its two outside Directors a stock option to purchase 20,000 shares of Dunn's common stock at an exercise price of $4.15 per share. The Company believes the exercise price of $4.15 per share was the fair market value at the time of the grants. In January 1999, Dunn granted each two of its outside Directors, Daniel Sinnott and VADM Burkhalter stock options to purchase an additional 10,000 shares of Dunn's common stock at an exercise price of $5.375 per share. The Company believes the exercise price of $5.375 per share was the fair market value at the time of the grants. In June 1999, Dunn granted two of its outside Directors, Daniel Sinnott and VADM Burkhalter stock options to purchase an additional 10,000 shares of Dunn's common stock at an exercise price of $2.03 per share. The Company believes the exercise price of $2.03 per share was the fair market value at the time of the grants. All of the options granted to the outside directors were pursuant to the Company's 1997 Stock Option Plan. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") requires the Company's officers and directors, and persons who own more than 10% of the Company's common stock to file reports of ownership and changes in ownership of the Company's common stock with the Securities and Exchange Commission and Nasdaq. Based solely on a review of the copies of such reports and written representations from the reporting persons that no other reports were required, the Company believes that during the fiscal year ended October 31, 1998, its executive officers, directors and greater than ten percent shareholders filed on a timely basis all reports due under Section 16(a) of the Exchange Act, with the following exception: George D. Fuster who served as President of IDP and a Director of Dunn until November 23, 1998 and D. Oscar Fuster who served as Executive Vice President of IDP and a Director of Dunn until November 23, 1998 should both have filed Forms 4 and 5 and, to the Company's knowledge, are presently delinquent in doing so. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth certain information regarding compensation paid by the Company during each of the last three fiscal years to the Company's Chief Executive Officer and to each of the Company's executive officers who were paid in excess of $100,000 ("Named Officers"). SUMMARY COMPENSATION TABLE SUMMARY COMPENSATION TABLE [Enlarge/Download Table] NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) NUMBER OF OPTIONS --------------------------- ---- ---------- --------- GRANTED ------- ANNUAL COMPENSATION LONG-TERM -------------------- COMPENSATION ------------ Thomas P. Dunne.......................... 1997 $240,000 -0- -0- Chairman, Chief Executive 1998 $240,000 -0- -0- Officer and President 1999 $240,000 -0- -0- John D. Vazzana.......................... 1997 $240,000 -0- -0- Executive Vice President, Chief 1998 $240,000 -0- -0- Financial Officer, and Director 1999 * $160,000 -0- -0- * Resigned as Executive Vice President and Chief Financial Officer effective August 31, 1999.
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EMPLOYMENT AGREEMENTS The Company has an employment agreement with Thomas P. Dunne. The agreement for Mr. Dunne has a term of three years commencing April 1997 and automatically renews for additional one year terms unless terminated by either the Company or the employee. The agreement provides for a $240,000 salary and a bonus at the discretion of the Company's Board of Directors. The bonus may not exceed the lesser of 5% of the Company's pre-tax income for the preceding fiscal year or $250,000. INCENTIVE STOCK OPTION PLAN Under Dunn's 1997 Stock Option Plan (the "Option Plan"), options to purchase a maximum of 2,500,000 shares of common stock of Dunn (subject to adjustments in the event of stock splits, stock dividends, recapitalizations and other capital adjustments) may be granted to employees, officers and directors of Dunn and certain other persons who provide services to Dunn. EMPLOYEE STOCK PURCHASE PLAN In August, 1998, the Board adopted an Employee Stock Purchase Plan (the "Purchase Plan") whereby employees may purchase Company stock through a payroll deduction plan. The purchase price of the stock is 85% of the market price. All employees, including officers but not directors, are eligible to participate in this plan. None of the Named Officers participated in this plan during fiscal 1999. The current executive officers are presently ineligible to participate in the plan because their stock ownership exceeds five percent of the outstanding common stock.
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RETIREMENT PLANS Dunn established a discretionary contribution plan effective May 1, 1995 (the "401(k) Plan") which was amended on May 1, 1999, for its employees who have completed one month of service with Dunn. The 401(k) Plan is administered by Merrill Lynch and permits pre-tax contributions by participants pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"), up to the maximum allowable contributions as determined by the Code. Dunn may match participants' contributions on a discretionary basis. In fiscal 1995 and 1996, Dunn contributed $0.25 for each $1.00 contributed by the employee. The Company contributed $1,800 in fiscal 1998 with respect to each of Mr. Dunne and Mr. Vazzana in connection with their participation in the 401(k) Plan. No contributions were made to any officers or employees during fiscal 1999. Effective November 1, 1995, Dunn established a defined benefit plan covering substantially all salaried employees who have completed twelve months of service with Dunn (the "Pension Plan"). The Pension Plan benefits are based on the years of service and the employee's compensation. Dunn contributes, on an annual basis, amounts sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. The assets of the Pension Plan are invested in money markets and investment-grade corporate debt and equity instruments. Dunn contributed an aggregate of approximately $250,000 for the Pension Plan years ending October 31, 1995, 1996, 1997, 1998, which amount met the minimum funding requirements under ERISA. On October 31, 1999, Dunn terminated the defined benefit plan which resulted in the immediate vesting of all participants at that time. Benefits of the plan will be distributed during fiscal year 2000. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company's Board of Directors has a Compensation Committee comprised of VADM Burkhalter, Mr. Sinnott and Mr. Dunne. Mr. Dunne is the Chief Executive Officer and Chairman of the Board of the Company. BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Company's officer compensation policy is to offer a package that includes a competitive salary, an incentive bonus based upon achievement of the Company's financial objectives and of individual performance goals, and competitive benefits. The Company also encourages broad-based employee ownership of Company stock through a stock option program in which key employees, who own less than 5% of the outstanding stock, are eligible to participate. The Company's compensation policy for officers is similar to that for other employees, and is designed to promote continued performance and attainment of corporate and personal goals. None of the executive officers are eligible for employee stock options. The Compensation Committee of the Board of Directors (comprised of two non-employee directors and the CEO) reviews and approves individual officer salaries, bonus plan financial performance goals and bonus plan allocations. The Committee also reviews guidelines for compensation, bonus, and stock option grants for all employees. Officers of the Company are paid salaries in line with their responsibilities and experience. These salaries are structured to be within the range of salaries paid by competitors in the computer and other relevant industries.
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Executive officers also participate in a cash bonus plan. Each executive officer is eligible for financial performance bonuses of up to 5% of pre-tax income of the Company, not to exceed $250,000, or 104% of base salary. The Compensation Committee annually reviews and approves the compensation of Thomas Dunne. Mr. Dunne participates in the bonus plan, with his bonus tied to pre-tax income goals. His maximum possible bonus for fiscal 1999 was 104% of his base salary. Based on the Company's performance for fiscal 1999, Mr. Dunne was awarded no cash bonus for fiscal 1999. COMPENSATION COMMITTEE Thomas P. Dunne Daniel E. Sinnott VADM E.A. Burkhalter, Jr., USN (Ret.)
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information, as of the date hereof, with respect to the beneficial ownership of the common stock by each beneficial owner of more than 5% of the outstanding shares thereof, by each director, each nominee to become a director and each executive named in the Summary Compensation Table and by all executive officers, directors and nominees to become directors of the Company. [Download Table] NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING ---------------- BENEFICIALLY OWNED COMMON STOCK ------------------ BENEFICIALLY OWNED ------------------ Thomas P. Dunne (1).......................... 2,399,375(2) 25.7% John D. Vazzana (1).......................... 581,875 6.2% Claudia N. Dunne (1)......................... 2,399,375(3) 25.7% VADM E.A. Burkhalter (1)..................... 40,000(4) * Daniel Sinnott (1)........................... 40,000(4) * All Executive Officers and Directors as a 2,981,250(5) 31.6% Group...................................... ----------------- - persons less than 1% (1) The address of each of such individuals is c/o Dunn Computer Corporation, 1306 Squire Court, Sterling Virginia 21066. (2) Includes 560,000 shares of Common Stock held by Claudia Dunne, the Company's Vice President, and Mr. Dunne's wife, of which Mr. Dunne disclaims beneficial ownership. (3) Includes 1,839,375 shares of Common Stock held by Thomas Dunne, the Company's President and CEO, and Ms. Dunne's husband, of which Ms. Dunne disclaims beneficial ownership. (4) Represents shares of the Company's Common Stock underlying stock options granted pursuant to the 1997 Stock Option Plan. (5) Does not include 80,000 shares of Common Stock underlying options which are held by the Company's two outside directors.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Thomas Dunne, the Company's President, and his wife, Claudia Dunne, the Company's Vice President, acquired a building for the purpose of leasing office space to the Company. In connection with the acquisition of the building, the Company guaranteed the building's $1 million mortgage. The term of the mortgage is 25 years. The Company subsequently executed a noncancelable operating lease with Mr. and Mrs. Dunne. The Company believes that the lease agreement is on terms no less favorable to the Company than could be obtained from an unaffiliated third party. In June 1999, the building was sold by Mr. and Mrs. Dunne and the lease was assigned to the new owner, an unaffiliated third party.
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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. [Download Table] DUNN COMPUTER CORPORATION By: /s/ THOMAS P. DUNNE ----------------------------------------- Thomas P. Dunne Date: April 5, 2000 PRESIDENT AND CHIEF EXECUTIVE OFFICER Pursuant to and in accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. [Enlarge/Download Table] NAME TITLE DATE ---- ----- ---- /s/ THOMAS P. DUNNE ------------------------------------------- President, Chief Executive April 5, 2000 Thomas P. Dunne Officer and Director /s/ CLAUDIA N. DUNNE ------------------------------------------- Vice President and Director April 5, 2000 Claudia N. Dunne /s/ JOHN VAZANNA ------------------------------------------- Director April 5, 2000 John Vazanna /s/ VADM E. A. BURKHALTER ------------------------------------------- Director April 5, 2000 VADM E. A. Burkhalter USN (Ret.) /s/ DANIEL SINNOTT ------------------------------------------- Director April 5, 2000 Daniel Sinnott /s/ BENJAMIN KREIGER ------------------------------------------- Director April 5, 2000 Benjamin Kreiger

Dates Referenced Herein   and   Documents Incorporated by Reference

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This ‘10-K/A’ Filing    Date First  Last      Other Filings
Changed as of / Corrected on:6/23/04
Filed on:4/5/00110
1/31/00110-Q
For Period End:10/31/991610-K,  NT 10-K
8/31/9924
5/1/996
11/23/984
10/31/984610-K,  10-K/A,  NT 10-K
10/31/976
10/31/966
11/1/956
10/31/956
5/1/956
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