-----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, FDYRSk2UWsoKyVNDpaowFpYra3oZT2HgEzFPXoAopty762FX/M/dkeCC6JL7PImH ILEDraJjUUlKy8n+sZcxxg== 0001019056-04-000107.txt : 20040128 0001019056-04-000107.hdr.sgml : 20040128 20040128171416 ACCESSION NUMBER: 0001019056-04-000107 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20040128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL DATACOMM INDUSTRIES INC CENTRAL INDEX KEY: 0000040518 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 060853856 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08086 FILM NUMBER: 04549931 BUSINESS ADDRESS: STREET 1: ROUTE 63 CITY: MIDDLEBURY STATE: CT ZIP: 06762 BUSINESS PHONE: 2035741118 MAIL ADDRESS: STREET 1: P O BOX 1299 CITY: MIDDLEBURY STATE: CT ZIP: 06762-1299 10-K/A 1 general_10ka.txt FORM 10K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2003 Commission File number 1-8086 GENERAL DATACOMM INDUSTRIES, INC. --------------------------------- (Exact name of registrant as specified in its charter) Delaware 06-0853856 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6 Rubber Avenue, Naugatuck, Connecticut 06770 --------------------------------------------- (Address of principal executive offices) (203) 729-0271 -------------- (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, $.01 par value 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 [ ] NO [X] 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 the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the voting stock of the Registrant held by non-affiliates as of December 15, 2003: $5,744,137 Number of shares of Common Stock and Class B Stock outstanding as of December 15, 2003: 3,303,872 Shares of Common Stock 664,978 Shares of Class B Stock Applicable only to Registrants involved in bankruptcy proceeding during the preceding five years. Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the Court. Yes [X] No [ ] DOCUMENTS INCORPORATED BY REFERENCE: None GENERAL DATACOMM INDUSTRIES, INC. INDEX TO FORM 10-K/A - AMENDMENT NO. 1 Part III Page - -------- ---- Item 10. Directors and Executive Officers of the Registrant..............3 Item 11. Executive Compensation..........................................5 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.....................11 Item 13. Certain Relationships and Related Transactions.................13 Explanatory Note: This Form 10-K/A Amendment is being filed to complete Item 10 as to Directors and add Items 11, 12 and 13. 2 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Name Position Age - ---- -------- --- Howard S. Modlin Chairman of the Board of Directors, 72 Chief Executive Officer, President and Secretary William G. Henry Vice President, Finance and Administration 54 and Chief Financial Officer George M. Gray Vice President, Engineering and Manufacturing 53 George Best Vice President, Sales and Marketing 61 Lee M. Paschall Director 81 John L. Segall Director 77 Aletta P. Richards Director 51 - ------------------------- Mr. Howard S. Modlin, Chairman of the Board and Chief Executive Officer was elected to such position in November 2001 following the death of Charles P. Johnson, the Company's founder. Mr. Modlin was also elected President in April 2003. Mr. Modlin is an attorney and President of the firm of Weisman Celler Spett & Modlin P.C., and has been Secretary, a Director and counsel to the Company since its formation. Mr. William G. Henry, Vice President, Finance and Administration and Chief Financial Officer, joined the Company as Corporate Controller in January 1984, was appointed an officer of the Company in June 1989, was elected Vice President in February 1996, was promoted to Vice President, Finance and Chief Financial Officer in February 1999 and to his present positions in April, 2003. Mr. George M. Gray, Vice President, Engineering and Manufacturing, has held positions of major responsibility within the Company since September 18, 2000 and has served in executive capacities since September 15, 2003, the effective date of its Plan of Reorganization. Mr. George Best, Vice President, Sales and Marketing, has held positions of major responsibility within the Company since April 22, 2001 and has served in executive capacities since September 15, 2003, the effective date of its Plan of Reorganization. Mr. Lee M. Paschall has been a Director of the Company since 1981. He is a consultant, former Chairman and President of American Satellite Company from 1981 to 1985, and a telecommunications consultant between August 1978 and August 1981. Prior thereto he was a Lieutenant General, United States Air Force. He is a director of Thales Communications, Inc. He is designated the Audit Committee "financial expert" of the Company. 3 Mr. John L. Segall has been a Director of the Company since 1994. He is a consultant, former Vice Chairman of GTE from 1991 to 1994 and former Vice Chairman of Contel Corp. from 1989 to 1994. Ms. Aletta P. Richards has been a Director of the Company since September 15, 2003 and is the director designee on behalf of the Trustee under the Indenture governing the Debentures issued under the Company's Plan of Reorganization. During the past five years she has been Corporate Credit Manager of Sanmina Corporation, one of the Company's creditors which received Debentures in settlement of its claims in the Chapter 11 proceedings. Audit Committee The Audit Committee is comprised of two directors who are not officers or employees of the Company (Lee M. Paschall and John L. Segall). The Audit Committee had one formal meeting during the 2003 fiscal year and had additional meetings subsequent to year end to discuss the decision by the former independent accountants not to stand for retention, to select the new independent accountants (Eisner LLP) and to review and approve the fiscal 2003 financial statements. Board of Directors During fiscal 2003, the Board of Directors had five ( 5) formal meetings. All of the Directors attended 100% of such meetings. The Company does not have a nominating or compensation committee. Stock Option Committee The Company has a Stock Option Committee consisting of Messrs. Lee Paschall and John Segall. Such Committee, which had one (1) meeting during fiscal 2003 on September 30, 2003, determines which executive officers and directors of the Company shall be granted stock options under its stock option plans. 4
Item 11. EXECUTIVE COMPENSATION The following Summary Compensation Table sets forth the compensation paid or awarded for the fiscal years ended September 30, 2003, 2002 and 2001 to the Company's Chief Executive Officer and the four (4) next most highly compensated executive officers whose compensation for the fiscal year ended September 30, 2003 exceeded $l00,000: SUMMARY COMPENSATION TABLE -------------------------- Annual Compensation(1) --------------- Name and Fiscal #Options All Other Principal Position Year Salary Bonus Granted Other Compensation - ------------------ ---- ---------- ------ ------- -------- ---------- Howard S. Modlin(2) 2003 -- -- -- -- $ 376,600 Chairman of the 2002 -- -- -- -- -- Board of Directors 2001 -- -- -- -- -- and Chief Executive Officer William G. Henry(3) 2003 $ 180,744 -- 35,250 $ 7,900 -- Vice President, Finance and 2002 174,835 -- -- 7,166 -- Administration 2001 170,311 -- -- 5,132 -- and Chief Financial Officer George Gray(3) 2003 $ 166,475 -- 35,000 $ 6,900 -- Vice President, Engineering and 2002 166,475 -- -- 6,900 -- Manufacturing 2001 161,105 -- -- 6,900 -- George Best(3) 2003 $ 142,693 -- 25,000 $ 36,100 -- Vice President, Sales and Marketing 2002 143,068 -- -- 41,322 -- 2001 55,829 -- 10,000 14,372 --
(l) There are no restricted stock awards, stock appreciation rights or deferred long-term incentive payouts. (2) Mr. Modlin has served without salary or bonus since he assumed such positions in November 2001 following the death of the Company's founder and Chairman, Charles P. Johnson. The Company is paying the annual premium on a $5,000,000 life insurance policy on Mr. Modlin's life at an approximate annual cost of $45,400 in fiscal 2003 not included in All Other 5 Compensation as the Company is the owner of said policy which is collateral security for the obligations owed the Company's senior lenders. The amount set forth for Mr. Modlin in 2003 as All Other Compensation reflects the fair market value of the grant of 459,268 shares of Class B Stock to him on September 30, 2003 pursuant to the Company's 2003 Stock and Bonus Plan. (3) Mr. Henry became Vice President, Finance and Administration in April 2003. He was elected Vice President Finance and Chief Financial Officer in fiscal 1999. Messrs. Gray and Best became executive officers on September 15, 2003. Reference is made to Notes 16 and 17 in the Notes to Consolidated Financial Statements in Item 8 of this Report on Form 10-K for description of subsequent events, related party transactions and loans made by Messrs. Modlin and Segall to the Company on December 30, 2003. Board Compensation Committee Report All matters concerning executive compensation for the Chief Executive Officer and other executive officers are considered by the Company's entire Board of Directors since there is no separate Compensation Committee. The salary levels are intended to be consistent with competitive practice and level of performance. In determining the total compensation to be paid to the executive officers other than the Chief Executive Officer who has served without salary or bonus since elected November 2001, the Board considers management's recommendation based upon past salary levels, industry surveys, experience, capability, normal salary increase levels in past years and the Company's and respective individual's performances during the last fiscal year, including the fact it was in Chapter 11 under the Bankruptcy Act between November 2, 2001 and September 15, 2003. Compensation of Directors The Board of Directors has served since November 2, 2001 without receiving any fees for their service. Reference is made to Item 13 and Notes 16 and 17 in the Notes to Consolidated Financial Statements in Item 8 of this Report on Form 10-K for description of transactions with Board members during the past fiscal year and subsequent to the end thereof. Stock Option Plans Under the terms of the Company's Stock Option Plans in effect prior to 2003, the Company has reserved a total of 338,707 shares of Common Stock as of November 28, 2003 adjusted for the one for ten reverse split effected on September 16, 2003. Officers and key employees under those plans selected by the Chairman of the Board or the Stock Option Committee, as the case may be, may be granted incentive stock options at an exercise price equal to or greater than the fair market value per share on the date of grant and non-incentive stock options at an exercise price equal to, greater than or less than the fair market value per share on the date of grant. While individual options can be issued under various provisions, options cannot be exercised during the first year, generally vest in increments of 25% per year over a four-year period and expire within ten years for outstanding options granted under the older plans. The Chairman or the Stock Option Committee, as the case may be, determines the number of stock options to be granted to any person, subject to the limitations on incentive stock options in Section 422A of the Internal Revenue Code of l986, as amended ("Code"). 6 As part of the Chapter 11 Plan of Reorganization the Company adopted a 2003 Stock and Bonus Plan reserving 459,268 shares of Class B Stock and 459,268 shares of Common Stock for grant by the Stock Option Committee of the Board of Directors. The Plan provides for outright stock grants, conditional stock grants and non-incentive stock options. On September 30, 2003 the Stock Option Committee granted 459,268 shares of Class B stock to Howard S. Modlin and 25,000 shares of Common Stock to each of Messrs Lee Paschall and John Segall. The Committee also granted an aggregate of 36,661 options to purchase Common Stock to 35 employees including 10,250 to William G. Henry and 10,000 to George Gray at $4.00 per share. Such options are not exercisable during the first year and thereafter vest in increments of 25% over a four year period and expire within five years. The Committee also granted an aggregate of 194,900 options to purchase Common Stock at $.01 a share to all 112 employees of the Company including 25,000 options to each of William G. Henry, George Best and George Gray which are exercisable through March 31, 2006. Stock Options Granted In Last Fiscal Year The following table is a summary of all stock options granted pursuant to the Company's Stock Option Plans during the period October 1, 2002 through September 30, 2003 for the persons named in the Summary Compensation Table. There are no stock appreciation rights under the Plans. In addition, the table shows the potential gain that could be realized if the fair market value of the Company's Common Stock were to appreciate at a 5% or 10% annual rate through their respective expiration periods.
Potential Realizable Value % of Total Options at Assumed Annual Rates Granted to Exercise of Stock Appreciation for # Options Employees in or Base Price Option Term Name Granted Last Fiscal Year Per Share Expiration Date 5% 10% ---- ------- ---------------- --------- ------------------ ---------- ---------- Howard S. Modlin -- -- -- -- -- -- William G. Henry 10,250 4.4% $ 4.00 September 29, 2008 $ 6,212 $ 18,573 25,000 10.8% $ 0.01 March 31, 2006 $ 101,700 $ 114,381 George Best 25,000 10.8% $ 0.01 March 31, 2006 $ 101,700 $ 114,381 George Gray 10,000 4.3% $ 4.00 September 29, 2008 $ 6,061 $ 18,123 25,000 10.8% $ 0.01 March 31, 2006 $ 101,700 $ 114,381
7 Reference is made to Notes 14 and 17 of the Notes to Consolidated Financial Statements contained in Item 8 of this Report on Form 10-K and above in this Item 11 for discussion on grant of 459,268 shares of Class B stock to Howard S. Modlin and 25,000 shares of Common Stock granted to each of Lee M. Paschall and John Segall on September 30, 2003 under the 2003 Stock and Bonus Plan. Aggregated Option Exercises in Last Fiscal Year And Fiscal Year-End Option Values No shares of Common Stock were acquired on exercise during the fiscal year ended September 30, 2003 by any of the named executive officers. The following table sets forth the number of unexercised options outstanding at September 30, 2003 and the value of unexercised in-the-money options at September 30, 2003 for the persons named in the Summary Compensation Table. Such value is based on the fair market value of the options.
Number of Value of Unexercised Number of Shares Value Unexercised Options In-the-Money Options at Acquired on Exercise Realized at September 30, 2003 September 30, 2003 -------------------- -------- --------------------- ------------------- Exercisable/ Exercisable/ Name Unexercisable Unexercisable - ---- ------------- ------------- Howard S. Modlin -- -- -- -- William G. Henry -- -- 35,251/10,250 $ 27,000/$0 George Gray -- -- 27,250/10,750 $ 27,000/$0 George Best -- -- 30,000/5,000 $ 27,000/$0
Employee Retirement Savings and Deferred Profit Sharing Plan Under the retirement savings provisions of the Company's Employee Retirement Savings and Deferred Profit Sharing Plan (the "Plan"), established under Section 401(k) of the Code in fiscal 1987, U.S. employees are generally eligible to contribute to the Plan after three (3) months of continuous service in amounts determined by the Plan. The Company previously contributed an additional 50% of the employee contribution up to certain limits, not to exceed 2% of total eligible compensation, which contributions terminated in 2001. Employees become fully vested in the Company's contributions after three (3) years of continuous service, death, disability or upon reaching age 65. The Plan year for the Retirement Savings 401(k) portion of the Plan coincides with the calendar year, and the Company's contribution was paid in the following calendar year if the participant was employed on December 31 of the Plan year. 8 The deferred profit sharing provisions of the Plan include retirement and other related benefits for substantially all of the Company's full-time employees. Contributions under the Plan are funded annually if made and are based upon a formula measuring profitability in relation to revenues. Additional amounts may be contributed at the discretion of the Company. Contributions to the Plan are allocated to each participant based upon individual earnings in proportion to the earnings of all participants. There were no contributions made for deferred profit sharing for fiscal 2003. Directors Fees Directors currently receive no fees and prior to November 2001 received $1,200 for each meeting which they attend and an annual fee of $8,000. Prior to November 2001, members of the Audit Committee received an annual fee of $2,250. Under a plan adopted by the Board of Directors in 1982, non-employee directors have the opportunity to elect to defer receipt of all or a portion of their fees that are paid plus interest thereon. On October l0, l995, March 5, 1998 and October 21, 1999 the non-employee directors were each granted non-statutory stock options to purchase 5,000, 4,500 and 6,000 shares of the Company's Common Stock at $l2.3l per share, $3.75 per share and $2.69 per share, respectively, the fair market values on such dates. All such options become exercisable in three equal annual installments on the first, second and third anniversaries of date of grant and the exercise prices have been adjusted to $123.125 per share, $37.50 per share and $26.895 per share, respectively, for the one for ten reverse split effective September 16, 2003. See Notes 14 and 17 of the Notes to Consolidated Financial Statements contained in Item 8 of this Report on Form 10-K and above in this Item 11 for discussion of stock grants to Messrs. Modlin, Paschall and Segall on September 30, 2003. 9 Comparison of Five-Year Cumulative Total General DataComm Industries, Inc., Standard & Poors 500 And Value Line Computer & Peripherals Index (Performance Results Through 9/30/03) [GRAPHIC CHART OMITTED]
- ------------------------------------------------------------------------------------------------------------- 1998 1999 2000 2001 2002 2003 - ------------------------------------------------------------------------------------------------------------- General DataComm Industries, Inc. 100.00 93.77 173.01 4.33 1.50 11.99 - ------------------------------------------------------------------------------------------------------------- Standard & Poors 500 100.00 126.30 141.44 102.49 80.27 98.06 - ------------------------------------------------------------------------------------------------------------- Computer & Peripherals 100.00 252.26 562.00 272.51 235.46 416.98 - -------------------------------------------------------------------------------------------------------------
* Assumes $100 invested at the close of trading on September 30, 1998 in General DataComm Industries, Inc. common stock, Standard & Poors 500 and Computer - Peripherals Peer Group. Cumulative total return assumes reinvestment of dividends. Source: Value Line, Inc. Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions contained herein. 10 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth information as of November 28, 2003 with respect to the beneficial ownership of the Corporation's Class B Stock and Common Stock by all persons known by the Corporation to own more than 5% of the Corporation's outstanding Class B Stock or Common Stock who are deemed to be such beneficial owners of the Corporation's Class B Stock or Common Stock under Rule 13d-3. The Percent of Class and Percent of All Classes presented are based upon shares outstanding at November 28, 2003. Class B Stock is convertible into Common Stock at any time on a share-for-share basis.
Name and Amount and Nature Address of of Beneficial Percent of Percent of Title of Class Beneficial Owner Ownership Class All Classes - -------------- ---------------- --------- -------- ---------- Class B Howard S. Modlin 459,943* 69.2% 11.6% Stock, General DataComm $.01 par value Naugatuck, CT 06770
- ---------------------- * The amount and percent of Class B Stock and percent of all classes do not include the following shares of Common Stock: 9,053 shares owned by Mr. Modlin's law firm; an additional 1,550 shares deemed owned based on options to purchase Common Stock which could be exercised by Mr. Modlin as follows: 500 at $123.125 per share, 450 at $37.50 per share and 600 at $26.875 per share, respectively, expiring October 9, 2005, March 4, 2008 and October 20, 2009 respectively, and 141,509 shares acquirable on conversion of a $300,000 note at $2.12 per share. The amount does not include an aggregate of 178,845 shares of Common Stock or 4.53% of the outstanding shares consisting of (i) 11,200 shares of Common Stock and 3,400 shares of Class B Stock owned by Mr. Modlin's wife, the beneficial ownership of which Mr. Modlin disclaims, and (ii) an aggregate of 164,245 shares beneficially owned by the Estate of Charles P. Johnson, the Company's former Chairman, of which Mr. Modlin is the sole executor, the beneficial ownership of which Mr. Modlin disclaims. Such shares held by the Estate of Charles P. Johnson consist of 151,367 shares of Class B Stock convertible into a like number of shares of Common Stock, 9,215 shares of Common Stock and an additional 3,663 shares of Common Stock if 20,000 shares of the Company's 9% Cumulative Convertible Exchangeable Preferred Stock are converted into Common Stock at $136.50 per share. 11 Each director and each executive officer listed in the Summary Compensation Table (on page 5) has advised the Corporation that, as of November 28, 2003 he or she owned beneficially, directly or indirectly, securities of the Corporation in the amounts set forth opposite his or her name as follows:
Shares of Shares of Common Percent Class B Stock Percent Percent of Name Stock Owned of Class Owned (1) of Class All Classes - ---- ----------- -------- --------- -------- ----------- Howard S. Modlin 152,112(2) 4.6% 459,943 69.2% 15.4% William G. Henry 36,543(3)(4) 1.1% -- -- 0.9% George Gray 30,000(4) 0.9% -- -- 0.8% George Best 27,250(4) .8% -- -- 0.7% Lee M. Paschall 26,550(5) 0.8% 577 0.1% 0.7% John L. Segall 168,159(6) 5.1% -- -- 4.2% Aletta Richards -- -- -- -- Directors and 440,614(7) 13.3% 460,520(7) 69.3% 22.7% Officers as a group (6 individuals including the above)
- --------------------------- (1) The Class B Stock is convertible into Common Stock at any time on a share-for-share basis. (2) 9,053 of these shares are owned by Mr Modlin's law firm. Pursuant to Rule 13d-3 an additional 141,509 shares are deemed owned on conversion of a $300,000 note at $2.12 per share and 1,550 shares are deemed owned based on options to purchase Common Stock which could be exercised by Mr. Modlin as follows: 500 at $123.125 per share, 450 at $37.50 per share and 600 at $26.875 per share, respectively, expiring October 9, 2005, March 4, 2008 and October 20, 2009 respectively. The total does not include an aggregate of 178,845 shares of Common Stock or 4.53% of the outstanding shares consisting of (i) 11,200 shares of Common Stock and 3,400 shares of Class B Stock owned by Mr. Modlin's wife, the beneficial ownership of which Mr. Modlin disclaims, and (ii) an aggregate of 164,245 shares beneficially 12 owned by the Estate of Charles P. Johnson, the Company's former Chairman, of which Mr. Modlin is the sole executor, the beneficial ownership of which Mr. Modlin disclaims. Such shares held by the Estate of Charles P. Johnson consist of 151,367 shares of Class B Stock convertible into a like number of shares of Common Stock, 9,215 share of Common Stock and an additional 3,663 shares of Common Stock if 20,000 shares of the Issuer's 9% Cumulative Convertible Exchangeable Preferred Stock are converted into Common Stock at $136.50 per share. (3) Includes 10,251 shares which Mr. Henry could acquire by the exercise of stock options within sixty (60) days and 53 shares of Common Stock held in the Corporation's 401(k) Stock Fund. Does not include 50 shares of Common Stock owned directly by members of his immediate family, the beneficial ownership of which he disclaims (4) Includes 25,000 shares of Common Stock which each officer can acquire at $.01 per share through March 31, 2006. (5) Includes 1,550 shares of Common Stock which Mr. Paschall could acquire by the exercise of stock options within sixty (60) days. (6) Includes 1,550 shares of Common Stock which Mr. Segall could acquire by the exercise of stock options and 141,509 shares which could be required on conversion of a $300,000 note at $2.12 per share within sixty (60) days. (7) Includes 97,151 shares of Common Stock which persons in the group have the right to acquire by the exercise of stock options within sixty (60) days, 53 shares of Common Stock held in the Corporation's 401(k) Stock Fund, 9,053 shares of Common Stock held by the law firm of which Mr. Modlin is a member and an aggregate of 283,018 shares which Messrs. Modlin and Segall could acquire on conversion of $300,000 notes held by each of them. Does not include 3,400 shares of Class B Stock and 11,250 shares of Common Stock owned directly by members of the directors' and officers' immediate families, the beneficial ownership of which they disclaim. Also does not include 151,367 shares of Class B Stock and 12,878 shares of Common Stock beneficially owned by the Estate of Charles P. Johnson, the Company's former Chairman, of which Mr. Modlin is the sole executor, the beneficial ownership of which Mr. Modlin disclaims. Reference is made to Item 1 of this Report on Form 10-K and specifically to the discussion of Risk Factors, relating to the ability of certain persons or groups to elect designees to the Board of Directors which could result in a change in control. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Mr. Howard Modlin, Secretary and a Director of the Company since 1969 and Chairman of the Board of Directors of the Company since November 2001 and currently Chairman, President and Chief Executive Officer, is also President of the law firm of Weisman, Celler Spett & Modlin, P.C. ("WCSM") to whom the Company was indebted for legal services in excess of $2,179,000 for work performed prior to November 2001 and in settlement for which the Company issued 13 subordinated debentures.WCSM has filed a claim for $294,000 for work performed between November 2001 and September 15, 2003 which was approved and authorized by the bankruptcy court subsequent to September 30, 2003. Furthermore, the Company was indebted to Mr. Modlin for fees for company director meetings he attended prior to November 2001 for which he received subordinated debentures in the total amount of $16,400. WCSM was paid $690,000 by the Company in fiscal 2001 (none in fiscal 2002 and 2003) for services rendered. On September 30, 2003 the Stock Option Committee of the Board of Directors awarded Mr. Modlin 459,268 shares of the Corporation's Class B stock and Lee M. Paschall and John L. Segall, Directors, 25,000 shares each of the Corporation's Common Stock, all subject to registration restrictions. Refer to Note 14, "Employee Incentive Plans" of the Notes to Consolidated Financial Statements in Item 8 of this Report on Form 10-K for further discussion. Messrs. Segall and Paschall respectively received subordinated debentures in the total amount of $19,900 and $17,900 in payment for directors fees for Company director meetings they attended prior to November 2001. In addition, Mr. William G. Henry, Vice President, Finance and Administration, and Mr. George M. Gray, Vice President, Manufacturing and Engineering have filed claims in Chapter 11 bankruptcy proceedings for past services and bonuses in the amounts of $561,385 and $50,000, respectively. These claims are still pending in the bankruptcy proceedings and the amount of these claims are included in debentures in long-term debt, along with other unsecured creditors at the time of the bankruptcy filing, in the Company's balance sheet. If these claims are not allowed in the bankruptcy proceedings, at such time adjustments will be made in the amount of debentures in long-term debt. On December 30, 2003, pursuant to authorization by the Board of Directors and amendment of the New Loan Agreement, the Corporation borrowed $300,000 from each of Howard S. Modlin, Chairman of the Board, and John L. Segall, a Director, for working capital purposes. The loans are for two years payable on December 29, 2005 and bear interest at the rate of 10% per annum payable monthly commencing May 1, 2004. The notes are convertible into Common Stock at a conversion price of $2.12 per share and are secured by all the assets of the Corporation behind the first lien of the Corporation's senior lenders. Any shares issued on conversion will not be registered and must be held for investment without a view to distribution. 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: January 18, 2004 General DataComm Industries, Inc. By /s/ HOWARD S. MODLIN -------------------------------------- Howard S. Modlin President and Chief Executive Officer (Principal Executive Officer) By /s/ WILLIAM G. HENRY -------------------------------------- William G. Henry Vice President, Finance and Administration and Chief Financial Officer 15 EX-31.1 3 ex31_1.txt EXHIBIT 31.1 Exhibit 31.1 ------------ CERTIFICATION I, Howard S. Modlin, Chairman of the Board, President and Chief Executive Officer of General DataComm Industries, Inc. (the Company) certify that: 1. I have reviewed this Report on Form 10-K/A (the "Report") of the Company. 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state of material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report. /s/ HOWARD S. MODLIN ----------------------------------------- Date: January 28, 2004 Howard S. Modlin Chairman of the Board, President and Chief Executive Officer 16 EX-31.2 4 ex31_2.txt EXHIBIT 31.2 Exhibit 31.2 ------------ CERTIFICATION I, William G. Henry, Vice President, Finance and Administration and Chief Financial Officer of General DataComm Industries, Inc. (the Company) certify that: 1. I have reviewed this Report on Form 10-K/A (the "Report") of the Company. 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state of material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report. /s/ WILLIAM G. HENRY ----------------------------------------- Date: January 28, 2004 William G. Henry Vice President, Finance and Administration and Chief Financial Officer 17 EX-32.1 5 ex32_1.txt EXHIBIT 32.1 Exhibit 32.1 ------------ CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Howard S. Modlin, Chairman of the Board, President and Chief Executive Officer of General DataComm Industries, Inc. (the "Company"), do hereby certify, to the best of my knowledge that: (1) The Company's Report on Form 10-K/A for the year ended September 30, 2003 being filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; This Certification accompanies this Form 10-K/A as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer. /s/ HOWARD S. MODLIN ----------------------------------------- Date: January 28, 2004 Howard S. Modlin, Chairman of the Board, President and Chief Executive Officer 18 EX-32.2 6 ex32_2.txt EXHIBIT 32.2 Exhibit 32.2 ------------ CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, William G. Henry, Vice President, Finance and Administration and Chief Financial Officer of General DataComm Industries, Inc. (the "Company"), do hereby certify, to the best of my knowledge that: (1) The Company's Report on From 10-K/A for the year ended September 30, 2003 being filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; This Certification accompanies this Form 10-K/A as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer. /s/ WILLIAM G. HENRY ----------------------------------------- Date: January 28, 2004 William G. Henry Vice President, Finance and Administration and Chief Financial Officer 19 -----END PRIVACY-ENHANCED MESSAGE-----