SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission File Number 1-13427
STRATESEC INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 22-2817302
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7544 Fullerton Court
Springfield, Virginia 22153
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 912-9993
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Exchange
Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X . NO .
Indicate by check mark 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. [x]
The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant as of March 29, 2000 (computed by reference to
the closing price of such stock on the American Stock Exchange) was $14,382,149.
As of March 29, 2001 there were 10,272,964 shares of the registrant's
Common Stock outstanding.
Part III
Item 9. Directors and Executive Officers of the Registrant.
Officers and Directors
The following sets forth certain information regarding each of the
Company's officers and directors:
Wirt D. Walker, III, age 55, has served as Chief Executive Officer of
the Company since January 1999; he has served as a director of the Company since
1987, and as Chairman of the Board of Directors since 1992. Since 1982, Mr.
Walker has served as a director and the Managing Director of KuwAm Corporation,
a private investment firm. He is the Chairman and Chief Executive Officer of
Aviation General, Incorporated, a publicly traded holding company with two
wholly-owned subsidiaries: Commander Aircraft Company, which manufactures,
markets and provides support services for its line of single engine, high
performance Commander aircraft and provides consulting, brokerage and
refurbishment services for piston aircraft, and Strategic Jet Services, Inc.,
which provides consulting, brokerage and refurbishment services for jet
aircraft.
Kamran Hashemi, age 47, has served as Chief Executive Officer of the
Government Services division and as a director since December 2000. Prior to
joining the Company, Mr. Hashemi served as President of Security Systems
Integration, Incorporated from 1998 to 2000. From 1983 to 1998, he was employed
by Radian, Inc., as Director, Physical Security Equipment Group, from 1988 to
1998, and as Project Engineer, from 1983 to 1987.
Barry W. McDaniel, age 52, has served as Chief Executive Officer of the
Commercial Services division since December 2000, and as a director since
January 1999. Prior to joining the Company, Mr. McDaniel was employed by BDM
International from 1989 to 1996, most recently as Vice President of Material
Distribution and Management Systems. From 1989 to 1992 he was Vice President,
Business Development and Operations for the Systems and Communications Group.
Mr. McDaniel was previously employed, from 1988 to 1989, by Proxim, a real-time
systems integration company as Vice President, Government Systems Integration.
From 1970 to 1987, he was employed by the U.S. Government with his last
assignment as a member of the Senior Executive Service (SES), serving as Deputy
Director of Readiness for the United States Army Materiel Command.
Charles W. Archer, age 55, has served as a director since March 1998.
Mr. Archer has been Vice President, Strategic Development for Litton/PRC since
January 1999. Mr. Archer served as the Company's President and Chief Executive
Officer from March 1998 to January 1999. Prior to 1998, Mr. Archer was employed
for twenty-seven years by the Federal Bureau of Investigation. During his tenure
with the F.B.I., Mr. Archer held a variety of management positions involving
large integrated technology projects and finance. From 1996 to 1997, he was an
Assistant Director of the F.B.I., in charge of its Criminal Justice Information
Services Division, the F.B.I.'s largest division.
Robert B. Smith, Jr., age 64, has served as a director of the Company
since 1995. Mr. Smith has been a private investor since 1984, and has been a
director of Sunshine Mining Company, a New York Stock Exchange listed silver
mining company, since 1993. He has been a trustee for the Dalkon Shield
Claimants Trust, a public interest trust created to compensate those damaged by
the Dalkon Shield, since 1989. Mr. Smith was formerly Chief Counsel and Staff
Director of the Senate Government Operations Committee.
Lt. General James A. Abrahamson, USAF (Retired), age 67, has served as
a director of the Company since December 1997. General Abrahamson is the
Chairman and CEO of International Air Safety, LLC. He served as Chairman of the
Board of Directors of Oracle Corporation from 1992 to 1995 and held various
executive positions and served as a member of the board of Hughes Aircraft
Company from 1989 to 1992. General Abrahamson was formerly Commissioner of the
White House Commission on Aviation Safety and Security (Gore Commission). Prior
to 1989, General Abrahamson served in the United States Air Force. During his
tenure with the Air Force he held a variety of positions, including Director of
Development of the F-16 International Fighter, Director of NASA's Space Shuttle
Program and Director of President Reagan's Strategic Defense Initiative ("Star
Wars" Program).
Emmit J. McHenry, age 57, has served as a director of the Company since
March 2000. Mr. McHenry is the founder, President and CEO of NetCom Solutions
International, Inc., an international telecommunications, engineering,
consulting, and technical services company. Prior to founding NetCom Solutions
International in 1995, Mr. McHenry was a founder of Network Solutions, Inc., the
internet domain services provider. In the past, Mr. McHenry has held management
positions with IBM, Connecticut General, Union Mutual, and Allstate Insurance
Company. He is an active member of the State Department's Advisory Committee for
International Communications and Information Policy and serves as a Commissioner
for the Fairfax County Economic Development Authority. He is also a director of
James Martin Government Intelligence and Global Technology, L.L.C.
Other Officers
R. Michael Lagow, age 42, has served as Executive Vice President since
January 2000. Mr. Lagow served in various executive positions with the company
from 1993 through 1999. Prior to joining the Company, Mr. Lagow was employed as
National Sales Manager of Control Systems International, a security systems
company, from 1991 to 1993. Prior to 1993, Mr. Lagow served as Vice President,
Network Security Corporation, developing and managing new markets for that
company.
Albert V. Graves, age 34, has served as Vice President of Finance since
June 1998. Prior to joining the Company, Mr. Graves was employed by Anadac
Corporation, most recently as its Corporate Controller. Previously, Mr. Graves
was employed from 1994 to 1998 as Accounting Manager at Titan Corporation, a
government contractor, and from 1991 to 1994 as Accounting Supervisor at
Technical Resources, Inc., a bio-medical and environmental consulting firm. Mr.
Graves has also served as an Accountant for Electronic Data Systems (EDS), and
Crestar Bank.
Item 10. Executive Compensation.
Summary Compensation Table
The following table shows certain information concerning the
compensation of each of the Company's most highly compensated executive officers
for services rendered in all capacities to the Company for the fiscal years
ended 2000, 1999 and 1998(the "Named Executive Officers").
Annual Compensation Long-Term Compensation
Securities
Underlying Other Annual
Awarded Options Compensation
Year Salary Bonus (in shares) (1)
--------------------------------------------------------------------
Wirt D. Walker, III......................... 2000 -- -- 35,000 $133,500 (2)
Chairman and Chief Executive Officer 1999 -- -- 65,000 $136,000 (2)
and Director 1998 -- -- 50,000 $148,680 (2)
Barry W. McDaniel............................. 2000 $150,000 -- 60,000 $7,500
President, Chief Executive Officer, 1999 $150,000 -- 90,000 $7,500
Commercial Services Division 1998 $132,692 -- 50,000
and Director
Ronald C. Thomas............................. 2000 $121,540 -- -- $18,000 (2)
Executive Vice President (3) 1999 $145,000 $3,000 25,000 $2,600
1998 $156,496 -- 65,000 $10,000
R. Michael Lagow............................. 2000 $125,000 -- 40,000 --
Executive Vice President 1999 $105,000 $21,000 65,000 --
1998 $ 90,000
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(1) Amounts paid as director fees unless otherwise indicated.
(2) Includes consulting fees paid.
(3) Mr. Thomas served as Executive Vice-President of the Company until
September30, 2001, after which he entered into a consulting agreement with
the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of May 2, 2001 certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to be the beneficial owner of more than 5% of
the Company's voting securities, (ii) each of the Company's directors, (iii)
each of the Named Executive Officers, and (iv) all executive officers and
directors of the Company as a group.
Number Percent
of Shares (6) of Total
KuwAm Corporation 204,562 2.0%
2600 Virginia Avenue, N.W.
Washington, D.C. 20037 (1)
NetCom Solutions International, Inc. 700,000 7.0%
Wirt D. Walker, III (2)(3) 683,153 6.8%
Kamran Hashemi (4) 2,000,000 19.9%
Barry W. McDaniel (3) 95,000 *
Ronald C. Thomas (3) 133,164 1.3%
Albert Van Graves (3) 63,333 *
R. Michael Lagow (3) 43,333 *
Mishal Yousef Saud Al Sabah (3)(5) 250,326 2.5%
Emmit J. McHenry (3)(6) 705,000 7.0%
Robert B. Smith, Jr. (3) 25,000 *
James A. Abrahamson (3) 25,000 *
Charles W. Archer (3) 25,000 *
All Officers and Directors as a Group
(11 persons) (7) 4,048,309 40.4%
-----------------------
* Less than one percent
(1) KuwAm Corporation is a Washington, D.C. based private investment firm. The
shareholders of KuwAm include Wirt D. Walker, III, the Chairman of the
Board of director of the Company, and Mishal Yousef Saud Al Sabah, a
director of the Company. Mr. Walker is also the Managing Director of KuwAm
and Mr. Al Sabah is the Chairman of KuwAm.
(2) Consists of 405,785 shares held by Mr. Walker, 28,000 shares held by Mr.
Walker's son and 50,000 shares owned by a trust for Mr. Walker's son, of
which Mr. Walker is the trustee.
(3) Includes shares issuable upon exercise of options that are exercisable
within 60 days, as follows: Mr. Walker, 65,000 shares; Mr. McDaniel, 80,000
shares; Mr. Al Sabah, 25,000 shares; Mr. McHenry, 5,000 shares; Mr. Smith,
Jr., 25,000 shares; Lt. Gen. Abrahamson, 25,000 shares; Mr. Archer, 25,000
shares; Mr. Van Graves, 63,333 shares; Mr. Lagow, 43,333 shares, and Mr.
Thomas, 26,667 shares.
(4) Consists of shares acquired by Mr. Hashemi through the acquisition of
Security Systems Integration, Incorporated, of which Mr. Hashemi was the
founder, President and CEO.
(5) Consists of 222,266 shares held by Fifth Floor Company for General Trading
and Contracting, of which Mr. Al Sabah is a principal, and 3,060 shares
owned by Mr. Al Sabah's son.
(6) Includes shares held by NetCom Solutions International, Inc., of which Mr.
McHenry is the founder, President and CEO.
(7) At May 3, 2001, executive officers and directors of the Company as a group
held options to purchase an aggregate of 920,000 shares of Common Stock,
representing approximately 62.4% of outstanding options at that date. The
numbers set forth in this table include an aggregate of 383,333 shares
underlying options that are currently exercisable within 60 days of such
date.
Item 12. Certain Relationships and Related Transactions.
In December 2000, the Company entered into a lease agreement with Mr.
Kamran Hashemi, an officer, director and shareholder of the Company, for the
lease of a building in Springfield, VA that the Company uses as its principal
offices. The terms of the lease, which provide a monthly lease payment of
$10,000, are as favorable as terms that would be available from unrelated
parties.
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.
STRATESEC INCORPORATED
By: /s/WIRT D. WALKER, III
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Wirt D. Walker, III
Chairman and Director