-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FNf0yxXAu80gnOvyHVItg8S7MngazoxFpERE4QKSe8qpaK0CIQu277nDAlC2QQHF 9wEBKQk2gdvQLCIVNWFNXw== 0001011028-00-000017.txt : 20000502 0001011028-00-000017.hdr.sgml : 20000502 ACCESSION NUMBER: 0001011028-00-000017 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETSMART TECHNOLOGIES INC CENTRAL INDEX KEY: 0001011028 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133680154 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-21177 FILM NUMBER: 615780 BUSINESS ADDRESS: STREET 1: 146 NASSAU AVE CITY: ISLIP STATE: NY ZIP: 11751 BUSINESS PHONE: 5169682000 MAIL ADDRESS: STREET 1: 146 NASSAU AVE STREET 2: 146 NASSAU AVE CITY: ISLIP STATE: NY ZIP: 11751 10-K/A 1 1999 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 10-K/A Amendment No. 1 For the Year Ended December 31, 1999 Commission File No. 0-21177 NETSMART TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 13-3680154 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 146 Nassau Avenue Islip, New York 11751 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (516) 968-2000 Purpose of Amendment: To include Part III. Part III Item 10. Directors and Executive Officers of the Registrant The directors and executive officers of the Registrant are as follows: Name Age Position - ---- --- -------- James L. Conway 52 President, chief executive officer and director Edward D. Bright(1) 68 Chairman of the board and director Anthony F. Grisanti 51 Chief financial officer, treasurer and secretary John F. Phillips 59 Vice president--marketing and director Gerald O. Koop 61 Chief executive officer of Creative Socio-Medics Corp. and director Joseph G. Sicinski(1) 68 Director - ---------- (1) Member of the audit and compensation committees. Mr. James L. Conway has been our president and a director since January 1996 and our chief executive officer since April 1998. From 1993 until April 1998, he was president of S-Tech, a manufacturer of specialty vending equipment for postal, telecommunication and other industries, which, until April 1998, was a wholly-owned subsidiary of Consolidated Technology Group Ltd., now known as The Sagemark Companies Ltd. Mr. Conway is also a director of Trans Global Services, Inc., which provides technical temporary staffing services. Mr. Edward D. Bright has been our chairman of the board and a director since April 1998. In April 1998, Mr. Bright was also elected as chairman, secretary, treasurer and a director of Consolidated Technology. From January 1996 until April 1998, Mr. Bright was an executive officer of or advisor to Creative Socio-Medics Corp., our subsidiary which was acquired in June 1994. From June 1994 until January 1996, he was our chief executive officer. For more than two years prior thereto, he was a senior executive officer of Creative Socio-Medics and its former parent. Mr. Bright is also a director of Trans Global. Mr. Anthony F. Grisanti has been our treasurer since June 1994, our secretary since February 1995 and our chief financial officer since January 1996. He was chief financial officer of Creative Socio-Medics and its former parent more than five years prior thereto. Mr. John F. Phillips has been a director and vice president of our subsidiary, Creative Socio-Medics, since June 1994, and our vice president-marketing since 1996. He also served as our vice president -- marketing from June 1994 to January 1996. From January 1993 until June 1994, he was chairman of the board of Creative Socio-Medics and its former parent. Mr. Gerald O. Koop has been a director since June 1998. He has held management positions with Creative Socio-Medica for more than the past five years, most recently as its chief executive officer, a position he has held since 1996. - 1 - Mr. Joseph G. Sicinski has been a director since June 1998. He is president and a director of the Trans Global, a position he held with Trans Global and its predecessor since September 1992. Since April 1998, he has also been chief executive officer of Trans Global. The Board of Directors has created audit and compensation committees, both of which consists of Messrs. Bright, Richter and Sicinski, each of whom is a non-employee director. The audit committee has the authority to approve our audited financial statements, to meet with our independent auditors, to review with the auditors and with management any management letter issued by the auditors and generally to exercise the power normally accorded an audit committee of a public corporation. In addition, any transactions between us or our subsidiaries, on the one hand, and any officer, director or principal stockholder or any affiliate of any officer, director or principal stockholder, on the other hand, requires the prior approval of the audit committee. The compensation committee serves as the stock option committee pursuant to our stock option plans. In addition, it reviews and approves any changes in compensation for our executive officers. In April 1999, two members of the audit and compensation committees, Messrs. Edward D. Bright and Joseph G. Sicinski, purchased shares of common stock from SIS Capital pursuant to an agreement described under "Item 13 -- Certain Relationships and Related Transactions." Directors are elected for a term of one year. None of the Company's officers and directors are related. The Company's certificate of incorporation includes certain provisions, permitted under Delaware law, which provide that a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for any transaction from which the director derived an improper personal benefit, or (iv) for certain conduct prohibited by law. The Certificate of Incorporation also contains broad indemnification provisions. These provisions do not affect the liability of any director under Federal or applicable state securities laws. Item 11. Executive Compensation Set forth below is information with respect to compensation paid or accrued by the Company for 1999, 1998 and 1997 to its chief executive officer and to each other officer whose salary and bonus for 1999 exceeded $100,000. - 2 - SUMMARY COMPENSATION TABLE Annual Long-Term ------ --------- Compensation Compensation ------------ ------------ (Awards) -------- Options, SARs ------------- Name and Principal Position Year Salary Bonus(1) (Number)(2) - --------------------------- ---- ------ ------ ------------- James L. Conway, CEO and 1999 $160,000 $107,000 -- president 1998 161,563 27,000 90,000 1997 125,000 -- 89,582 Gerald O. Koop, chief 1999 140,000 172,169 -- executive officer of Creative 1998 92,700 126,305 80,000 Socio-Medics Corp. 1997 90,000 158,094 -- John F. Phillips, vice 1999 140,000 64,000 -- president - marketing 1998 112,800 70,540 80,000 1997 109,500 89,657 -- Anthony F. Grisanti, chief 1999 120,000 100,000 -- financial officer 1998 91,240 56,967 80,000 1997 87,600 73,888 -- - ---------- The bonus for Mr. Koop includes accrued commissions of $100,169. These commissions will be paid in installments through 2002. In July 1998, we entered into five-year employment agreements with Messrs. James L. Conway, John F. Phillips, Gerald O. Koop and Anthony F. Grisanti. Pursuant to these agreements, these officers receive the following base salaries: Mr. Conway - $160,000, Mr. Phillips - $140,000, Mr. Koop - $140,000, and Mr. Grisanti - $120,000. The agreements provide for an annual cost of living adjustment. The agreements provide that the executives are eligible to participate in a bonus pool to be determined annually by the Compensation Committee. The agreements also provide each of these officers with a $1,000 per month automobile allowance. In the event of the officer's dismissal or resignation or a material change in his duties or in the event of a termination of employment by the executive or by us as a result of a change of control, the officer may receive severance payments of between 24 and 36 months' compensation. A month's compensation means the then current monthly salary plus one-twelfth of the bonus for the prior year. No options were granted during 1999 to any of our officers named in the Summary Compensation Table. - 3 - Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value Number of Securities Value of Underlying Unexercised In- Unexercised the-Money Options at Fiscal Options at Fiscal Year End Year End Shares Acquired Value Exercisable/ Exercisable/ Name Upon Exercise Realized Unexercisable Unexercisable ---- ------------- -------- ------------- ------------- James L. Conway 20,000 $38,750 145,249/-- $376,375/-- Gerald O. Koop -- -- 87,984/-- 454,845/-- John F. Phillips 12,922 33,622 89,000/-- 458,875/-- Anthony F. Grisanti 10,821 28,609 85,000/-- 439,375/-- - ---------- The number of shares of Common Stock subject to options includes shares of common stock issuable upon exercise of warrants. The determination of "in the money" options at December 31, 1999, is based on the closing price of the common stock on the Nasdaq SmallCap Market on December 31, 1999, which was $6.375. Information with respect to Mr. Conway includes warrants to purchase 23,916 shares of common stock held by Mr. Conway's wife, as to which he disclaims beneficial ownership. Item 12. Security Ownership of Certain Beneficial Owners and Management Set forth below is information as of April 28, 1999, as to each person owning of record or known by us, based on information provided to us by the persons named below, to own beneficially at least 5% of our Common Stock, each director, each officer listed in the Summary Compensation Table and all officers and directors as a group. Percent of Outstanding Name and Address(1) Shares Common Stock - ---------------- ------ ------------ John F. Phillips 198,922 5.5% 146 Nassau Avenue Islip, NY 11751 Edward D. Bright 191,422 5.3% 146 Nassau Avenue Islip, NY 11751 Gerald O. Koop 152,823 4.2% James L. Conway 152,583 4.3% Anthony F. Grisanti 75,421 2.1% Joseph G. Sicinski 32,000 * All directors and officers as a group % (seven individuals) - ---------- * Less than 1%. Unless otherwise indicated, each person has the sole voting and sole investment power and direct beneficial ownership of the shares. Each person is deemed to beneficially own shares of common stock - 4 -
issuable upon exercise of options or warrants which are exercisable on or within 60 days after the date as of which the information is provided. The number of shares owned by our directors and officers shown in the table includes shares of common stock which are issuable upon exercise of options and warrants that are exercisable at April 28, 2000 or will become exercisable within 60 days after that date. Set forth below is the number of shares issuable upon exercise of those options for each of our directors and the officers named in the summary compensation table. Name Number - ---- ------ James L. Conway 48,250 John F. Phillips 89,000 Edward D. Bright 67,500 Gerald O. Koop 87,984 Anthony F. Grisanti 5,052 Joseph G. Sicinski -- All officers and directors as a group 297,786 Mr. Conway's options and warrants include shares of common stock issuable upon exercise of warrants and shares of common stock issuable upon exercise of warrants held by his wife, as to which he disclaims beneficial ownership. All other officers and directors only hold options. Item 13. Certain Relationships and Related Transactions In March 1999, we and members of our management, together with other employees and non- affiliated investors, entered into an agreement with Consolidated Technology, its subsidiary, SIS Capital Corp. and Mr. Anthony Grisanti, as agent, pursuant to which: * The purchasers bought an aggregate of 585,750 shares of our common stock from SIS Capital for $2.015 per share in April 1999. * The purchasers have the right to buy up to 206,874 additional shares of the our common stock from SIS Capital at the same purchase price per share. * Consolidated Technology transferred to us shares of our preferred stock (including the right to receive dividends thereon) and warrants to purchase shares of our common stock, for which we issued 100,000 shares of common stock to Consolidated Technology in April 1999. The following officers and directors purchased the following number of shares of common stock from SIS Capital pursuant to this agreement: Name Number of Shares Purchase Price - ---- ---------------- -------------- John F. Phillips 75,000 $151,118 Edward D. Bright 62,500 125,931 Gerald O. Koop 34,600 69,716 James L. Conway 26,000 52,387 Anthony F. Grisanti 20,600 41,507 Joseph G. Sicinski 5,000 10,075 - 5 - 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. NETSMART TECHNOLOGIES, INC. Dated: May 1, 2000 By /s/James L. Conway ------------------------- James L. Conway, President and CEO Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/James L. Conway President, Chief Executive May 1, 2000 - ----------------------- Officer and Director (Principal James L. Conway Executive Officer) /s/Anthony F. Grisanti Chief Financial Officer May 1, 2000 - ----------------------- (Principal Financial and Anthony F. Grisanti Accounting Officer) By /s/James L. Conway Edward D. Bright Director ------------------ James L. Conway Attorney-in-Fact May 1, 2000 /s/John F. Phillips Director May 1, 2000 - ------------------------ John F. Phillips /s/Gerald O. Koop Director May 1, 2000 - ------------------------ Gerald O. Koop Director Joseph G. Sicinski - 6 - -----END PRIVACY-ENHANCED MESSAGE-----