10-K/A 1 d53364_10k-a.txt AMENDMENT TO ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2002 Commission File Number 0-25148 Global Payment Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 11-2974651 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 425B Oser Avenue, Hauppauge, New York 11788 (Address of principal offices) (Zip Code) Registrant's telephone number, including Area Code: 631-231-1177 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock 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, and (2) has been subject to such filing requirements for the past 90 days. |X| 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. |_| Indicate by check mark whether the registrant is an accelerated filer (as defined in exchange Act Rule 12b-2). |_| Yes |X| No The aggregate market value of voting stock held by nonaffiliates of registrant as of January 24, 2003 was approximately $25,100,000. The Company had 5,542,416 shares of Common Stock outstanding as of January 24, 2003. DOCUMENTS INCORPORATED BY REFERENCE None. INTRODUCTION This Form 10-K/A amends the registrant's Form 10-K for the fiscal year ended September 30, 2002 by deleting the information contained in Items 10, 11, 12 and 13 of Part III of such form and substituting the following for such Items. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Current Members of the Board of Directors The current directors of the Company, their respective Classes and terms of office and biographical information is as set forth below. Director Age Class Term Expires at -------- --- ----- --------------- Richard E. Gerzof 58 I 2005 Annual Meeting Stephen Katz 59 II 2003 Annual Meeting Martin H. Kern 61 II 2003 Annual Meeting Henry B. Ellis 53 III 2004 Annual Meeting Biographical Information Richard E. Gerzof has been a director of the Company since its inception in 1988. Mr. Gerzof has been a partner of Sun Harbor Manor, a nursing home, since 1974. He has also been a licensed real estate broker since 1982 and was a partner or principal in Sonom Realty Co., a property management and construction firm, from 1974 through 1992. He has also been a partner in the Frank's Steaks Restaurant chain since 1993. Stephen Katz has been Chairman of the Board of Directors since September 1996 and Chief Executive Officer and a director of the Company since May 1996. Mr. Katz served as Vice Chairman of the Board of Directors from May 1996 until September 1996. From September 1984 until September 1995 Mr. Katz was Chairman of the Board and Chief Executive Officer, and from September 1984 until September 1993 was President, of Nationwide Cellular Service, Inc., then a publicly traded reseller of cellular telephone services. Since 1992 Mr. Katz has been Chairman of the Board and Chief Executive Officer of Cellular Technical Services Company, Inc., a publicly held company engaged in developing software for the cellular telephone industry. Martin H. Kern has been a director of the Company since November 1997. Since 1988 Mr. Kern has been President of Diversified Resources Inc., a management consulting firm specializing in turnarounds and the marketing of consumer products. Prior thereto and for more than five years he was Executive Vice President of The Great Atlantic & Pacific Tea Co., Inc. ("A&P"), and also served as Chairman of the Board/President of Super Market Service Corp. and President of Supermarket Distributing Corp., both A&P operating subsidiaries. Henry B. Ellis has been a director of the Company since July 1996. Since 1992 Mr. Ellis has been President and Chief Executive Officer of Bassett California Company, a family-owned real estate holding company located in El Paso, Texas. From June 1992 to February 1994 Mr. Ellis served as Chairman of -2- the Board and Chief Executive Officer of Grayson County State Bank, located in Sherman, Texas. Since 1992 Mr. Ellis has served as a member of the Board of Directors of Bluebonnet Savings Bank, a savings and loan institution located in Dallas, Texas. Since February 2001 Mr. Ellis has also served as a member of the Board of Directors of Cellular Technical Services Company, Inc. Information about Non-Director Executive Officers The following table sets forth certain information with respect to the non-director executive officers of the Company. Officers are elected annually by the Board of Directors and serve at the discretion of the Board. Name Age Position Thomas McNeill .... 40 Vice President, Chief Financial Officer and Secretary Thomas Oliveri .... 44 Vice President, Chief Operating Officer Thomas McNeill has been Secretary of the Company since March 1997 and Vice President and Chief Financial Officer of the Company since September 1997. From October 1996 to September 1997 he served as Controller of the Company. From March 1995 through October 1996 Mr. McNeill was Director of Finance for Bellco Drug Corp., a pharmaceutical distribution company. From January 1991 through August 1992 he was Controller and from August 1992 to May 1994 he was Vice President of Operations, for the Marx & Newman Co. division of the United States Shoe Corporation, a manufacturer and distributor of women's footwear. Thomas Oliveri has been Vice President, Chief Operating Officer of the Company since November 2000 and was Vice President, Operations from March 1999 to October 2000. He was Director of Operations of the Company from January 1999 to February 1999. From May 1998 to November 1998 he served as Director of Operations for Bennett X-Ray. From December 1995 to May 1998, he served as plant manager and then as general manager of the Cybex division of Lumex, Inc. From May 1993 to November 1995 he served as manager of technical services and then plant manager within the Lumex division of Lumex, Inc. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who own more than ten percent of the Company's Common Stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock of the Company. To the Company's knowledge, based solely on a review of such reports furnished to the Company with respect to its most recent fiscal year, the Company believes that during or with respect to the fiscal year ended September 30, 2002 all reports under Section 16(a) have been timely filed, except that Mr. Katz filed a Form 5 which disclosed a sale of stock in 1998 which should have been reported on a Form 4 in that year. -3- ITEM 11. EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION Summary Compensation Table The following table summarizes the compensation earned for the last three fiscal years by the Company's Chief Executive Officer and all other executive officers whose salary and bonus exceeded $100,000 for the 2002 fiscal year (the "Named Executive Officers"), for services in all capacities to the Company during its 2002, 2001 and 2000 fiscal years.
Long-Term Annual Compensation Compensation ------------------- ------------ Securities Name and Principal Underlying Position Year Salary Bonus Options ---- ------ ----- ------- Stephen Katz ................................. 2002 $175,000 -- 50,000 Chairman of the Board and Chief 2001 152,000 $30,000 300,000 Executive Officer 2000 150,000 -- -- Thomas McNeill ............................... 2002 158,000 -- 30,000 Vice President, Chief Financial 2001 140,000 40,000 20,000 Officer 2000 115,000 -- 15,000 Thomas Oliveri ............................... 2002 175,000 -- 30,000 Vice President, Chief Operating 2001 155,000 40,000 25,000 Officer 2000 135,000 -- 20,000
-4- Option Grants in Last Fiscal Year (Individual Grants)
Potential Realizable Value at Assumed Annual Rates of % of Total Stock Price Appreciation for Number of Securities Options Granted Exercise Option Underlying Options to Employees in Price Expiration Term Name Granted Fiscal Year ($/Share) Date At 5% At 10% Stephen Katz ..... 50,000(1) 15.6% $3.60 12/05/08 $73,000 $171,000 Thomas Oliveri ... 30,000(1) 9.3% $3.60 12/05/08 $44,000 $102,000 Thomas McNeill ... 30,000(1) 9.3% $3.60 12/05/08 $44,000 $102,000
---------- (1) The option was awarded at the fair market value of the Company's Common Stock at December 5, 2001, the date of the award, and becomes exercisable in cumulative annual installments of 25% per year on each of the first four anniversaries of the grant date. Aggregated Fiscal Year End Option Values
Shares Number of Securities Value of Unexercised Acquired Underlying Unexercised In-the-Money Options on Options at September 30, Exercise Value September 30, 2002 2002(1) Name (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable Stephen Katz ..... 0 $0 300,000 50,000 $1,005,000 $141,500 Thomas McNeill ... 0 0 45,125 51,375 38,910 137,280 Thomas Oliveri ... 0 0 32,625 58,875 43,050 129,150
---------- (1) The closing price of the Company's Common Stock as reported on the Nasdaq National Market on September 30, 2002 was $6.43 per share. Value is calculated by multiplying (a) the difference between the closing price and the option exercise price by (b) the number of shares of Common Stock underlying the option. -5- Compensation of Directors Messrs. Ellis and Gerzof were each granted 19,000 stock options for services rendered as directors during the 2002 fiscal year. Mr. Kern was granted 5,000 stock options and paid $13,900 for services rendered as director during the 2002 fiscal year. Employment Agreements Effective September 1, 2001 the Company entered into an agreement with Stephen Katz providing for his employment as the Company's Chief Executive Officer and Chairman of the Board. The agreement provides for a two-year term, with an automatic extension for an additional one-year term beyond the initial two-year term unless and until either the Company or Mr. Katz provides 90 day advance written notice of a desire to terminate the agreement. The agreement provides for a salary at a rate of $175,000 per year and may be increased to a maximum of $225,000 should certain goals, as determined by the Board of Directors, be attained. The agreement also provides for participation in employee benefit plans, the use of an automobile and other fringe benefits. Effective July 1, 2001 the Company entered into an agreement with Thomas Oliveri providing for his employment as Vice President and Chief Operating Officer for a three-year term. The agreement provides for a salary at a rate of $175,000 per year and bonuses and stock options as determined by the Board of Directors. The agreement also provides for participation in employee benefit plans and other fringe benefits. If terminated under a change of control event, he would be entitled to earn up to 1.5 times his salary. Effective May 1, 2000 the Company entered into an agreement with Thomas McNeill providing for his employment as Vice President and Chief Financial Officer for a two-year term, with an automatic extension for an additional one-year term unless and until either the Company or Mr. McNeill provides 180 day advance written notice of a desire to terminate the agreement. The agreement provides for a salary at a rate of $158,000 per year and bonuses and stock options as determined by the Board of Directors. The agreement also provides for participation in employee benefit plans, the use of an automobile and other fringe benefits. If terminated under a change of control event, he would be entitled to earn up to 1.25 times his salary. Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee of the Company's Board of Directors are Henry B. Ellis, Richard E. Gerzof and Martin H. Kern, each of whom is a non-employee director. No member of the Compensation Committee has a relationship that would constitute an interlocking relationship with executive officers or directors of another entity. -6- ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of December 31, 2002, certain information as to the Common Stock ownership of each of the Company's directors, each of the Named Executive Officers, all executive officers and directors as a group and all persons known by the Company to be the beneficial owners of more than five percent of the Company's Common Stock. Unless otherwise noted, the Company believes that each person named in the table below has sole voting and investment power with respect to all shares of Common Stock beneficially owned by such person.
Amount and Nature Percentage of Name and Address Of Beneficial Outstanding Shares Ownership Owned Stephen Katz ..................................... 738,800(1) 12.6% c/o Global Payment Technologies, Inc. 20 East Sunrise Highway, Suite 201 Valley Stream, NY 11581 Odyssey Financial Company ........................ 335,000 6.0% c/o Stephen Katz 20 East Sunrise Highway, Suite 201 Valley Stream, NY 11581 Richard E. Gerzof ................................ 385,208(2) 6.9% 161 Sportsman Avenue Freeport, NY 11520 William H. Wood .................................. 315,700 5.7% 621 Farr Shores Drive Hot Springs, AR 71913 Thomas McNeill ................................... 55,625(3) 1.0% c/o Global Payment Technologies, Inc. 425B Oser Avenue Hauppauge, NY 11788 Henry B. Ellis ................................... 52,593(4) * 303 Texas Avenue #15 El Paso, Texas 79901
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Amount and Nature Percentage of Name and Address Of Beneficial Outstanding Shares Ownership Owned Thomas Oliveri ................................... 40,125(5) * c/o Global Payment Technologies, Inc. 425B Oser Avenue Hauppauge, NY 11788 Martin H. Kern ................................... 36,875(6) * c/o Global Payment Technologies, Inc. 20 East Sunrise Highway, Suite 201 Valley Stream, NY 11581 All directors and executive officers as a group (6 persons) ...................................... 1,309,226(7) 21.7%
---------- * Less than 1% (1) Includes 312,500 shares issuable upon exercise of currently exercisable stock options and 335,000 shares owned of record by Odyssey Financial Company, a partnership of which Mr. Katz is Managing General Partner. (2) Includes 35,208 shares issuable upon exercise of currently exercisable options. (3) Includes 52,625 shares issuable upon exercise of currently exercisable options. (4) Includes 35,708 shares issuable upon exercise of currently exercisable options. (5) Includes 40,125 shares issuable upon exercise of currently exercisable options. (6) Includes 24,375 shares issuable upon exercise of currently exercisable options. (7) Includes 500,541 shares issuable upon exercise of currently exercisable options. -8- EQUITY COMPENSATION PLAN INFORMATION The table below sets forth certain information as of the Company's fiscal year ended September 30, 2002 regarding the shares of the Company's common stock available for grant or granted under stock option plans that (i) were adopted by the Company's stockholders and (ii) were not adopted by the Company's stockholders.
Number of securities remaining available for future Number of securities to be Weighted-average issuance under equity issued upon exercise of exercise price of compensation plans (excluding outstanding options, warrants outstanding options, securities in the first column of and rights warrants and rights this table) ----------------------------- -------------------- --------------------------------- Equity Compensation 1,058,600 $4.53 304,550 plans approved by security holders Equity Compensation Not Applicable Not Applicable Not Applicable plans not approved by security holders
-9- ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company leases approximately 1,541 square feet in Valley Stream, New York, from a company in which Stephen Katz, Chairman of the Board of Directors and Chief Executive Officer of the Company, is a part owner. The lease, which expires August 31, 2004, provides for an annual base rental of $33,000. The Company has the right to cancel the lease after February 28, 2003. The facility houses certain executive functions of the Company. The Company believes that the terms of the lease are fair and reasonable and as favorable to it as could be obtained from unaffiliated third parties. SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amended Annual Report on Form 10-K/A to be signed on its behalf by the undersigned thereunto duly authorized. GLOBAL PAYMENT TECHNOLOGIES, INC. By: /S/ Thomas McNeill ------------------ Name: Thomas McNeill Title: Vice President, Chief Financial Officer 10 I, Stephen Katz, certify that: 1. I have reviewed this annual report on Form 10-K of Global Payment Technologies, Inc. ("GPT"); 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a 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 annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. GPT's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for GPT and have: a) designed such disclosure controls and procedures to ensure that material information relating to GPT, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of GPT's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. GPT's other certifying officer and I have disclosed, based on our most recent evaluation, to GPT's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect GPT's ability to record, process, summarize and report financial data and have identified for GPT's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in GPT's internal controls; and 6. GPT's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 27, 2003 S/ Stephen Katz --------------- Chairman of the Board and CEO 11 I, Thomas McNeill, certify that: 1. I have reviewed this annual report on Form 10-K of Global Payment Technologies, Inc. ("GPT"); 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a 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 annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. GPT's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for GPT and have: b) designed such disclosure controls and procedures to ensure that material information relating to GPT, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of GPT's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. GPT's other certifying officer and I have disclosed, based on our most recent evaluation, to GPT's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect GPT's ability to record, process, summarize and report financial data and have identified for GPT's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in GPT's internal controls; and 6. GPT's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 27, 2003 S/ Thomas McNeill ----------------- Vice President and CFO 12