eaco10ka.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-K/A
(Amendment
No. 1)
x ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended January 2,
2008
o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission
File No. 000-14311
EACO
CORPORATION
(Exact
name of Registrant as specified in its charter)
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Florida
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59-2597349
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(State
of Incorporation)
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(I.R.S.
Employer Identification)
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1500
North Lakeview Avenue
Anaheim,
California 92807
(Address
of Principal Executive Offices)
Registrant's
telephone number, including area code: (714) 876-2490
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
(Title
of Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. YES o NO x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. YES o NO x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Sections 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 o
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. o
Indicate
by check mark whether registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company x
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). o
The
aggregate market value of the Company’s common stock (the “Common Stock”), based
upon the closing sale price of the registrant's Common Stock on June 28, 2008,
held by non-affiliates of the Company was approximately $195,500.
As of
March 31, 2008, 3,906,801 shares of Common Stock of the Company were
outstanding.
Documents
Incorporated by Reference
Portions
of the Company’s 2007 Annual Report to Shareholders are incorporated by
reference into Part II of this Annual Report on Form 10-K.
EXPLANATORY
NOTE
EACO
Corporation (the “Company”) is filing this Amendment No. 1 on Form 10-K/A
(this “Amendment”) to its Annual Report on Form 10-K for the year ended January
2, 2008, originally filed on April 4, 2008 (the “Original Report”), for the sole
purpose of including the information required by Part III of Form 10-K.
Accordingly, Items 10, 11, 12, 13, and 14 of Part III of our Original Report are
replaced in their entirety with the information provided herein. This Form
10-K/A does not amend, update or change any other items or disclosure in the
Original Report or reflect events that occurred after the date of the Original
Report. Therefore, this Amendment should be read in conjunction with our
Original Report and our other filings made with the Securities and Exchange
Commission (“SEC”) subsequent to the filing of the Original Report.
We have
also included as an exhibit the certification required under Section 302 of
the Sarbanes-Oxley Act of 2002. Because no financial statements are contained
within this Amendment, we are not including a certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
PART
III
Item
10. Directors, Executive Officers and Corporate
Governance
Executive
Officers and Directors
Glen F.
Ceiley currently serves as Chairman of the Board and Chief Executive Officer of
the Company. Stephen Catanzaro, Jay Conzen and William L. Means also
currently serve as directors of the Company.
Stephen
Catanzaro, 55, is the Controller of Allied Business Schools, Inc. (home study
course schools), a position he has held since April 2004. Before that, Mr.
Catanzaro was the Chief Financial Officer of V&M Restoration, Inc., a
restoration company, from September 2002 to February 2004, and the Chief
Financial Officer of Bisco, an international distributor of electronic
components, from September 1995 to March 2002. Bisco is an affiliate
of the Company. Mr. Catanzaro has served as a director of the Company since he
was first elected by the Company’s shareholders at the 1999 Annual
Meeting.
Glen F.
Ceiley, 62, is the Company’s Chief Executive Officer and Chairman of the Board,
positions he has held since 1999. Mr. Ceiley also serves as President
and Chief Executive Officer of Bisco, a position he has held since
1973. In addition, Mr. Ceiley is a former director of Data I/O
Corporation, a publicly-held company engaged in the manufacturing of electronic
equipment. Mr. Ceiley has served as director of the Company since he
was appointed to the Company’s Board of Directors (the “Board”) in February 1998
and thereafter elected by the shareholders at the 1998 Annual
Meeting.
Jay
Conzen, 61, is the President of Old Fashioned Kitchen, Inc. (a national food
distributor), a position he has held since April 2003. Before that
Mr. Conzen was the principal of Jay Conzen Investments (investment advisor) from
October 1992 to April 2003. In addition, Mr. Conzen served as a
consultant to the Company from August 1999 until January 2001, and from October
2001 to April 2003. Mr. Conzen has served as a director of the
Company since he was appointed to the Company’s Board in February 1998 and
thereafter elected by the shareholders at the 1998 Annual Meeting.
William
L. Means, 64, is the Vice President of Information Technology of Bisco, a
position he has held since 2001. Before that, Mr. Means was Vice
President of Corporate Development of Bisco from 1997 to 2001. Mr.
Means has served as director of the Company since he was first elected by the
Company’s shareholders at the 1999 Annual Meeting.
None of
our officers or directors has been convicted in any criminal proceeding during
the past five years or has been party to any judicial or administrative
proceeding during the past five years that resulted in a judgment, decree or
final order enjoining him from future violations of, or prohibiting activities
subject to, federal or state securities laws or a finding of any violation of
federal or state securities law or commodities law. Similarly, no bankruptcy
petitions have been filed by or against any business or property of any of our
directors or officers, nor has any bankruptcy petition been filed against a
partnership or business association in which these persons were general partners
or executive officers. None of directors, executive officers,
affiliates of the Company, or any owner of record or beneficial owner of more
than five percent of the Company’s voting securities, or any of their
associates, is a party adverse to the Company or has a material interest adverse
to the Company.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”), requires
certain officers of the Company and its directors, and persons who beneficially
own more than ten percent of any registered class of the Company’s equity
securities, to file reports of ownership in such securities and changes in
ownership in such securities with the SEC and the Company.
Based
solely on a review of the reports and written representations provided to the
Company by the above referenced persons, the Company believes that during fiscal
year 2007 all filing requirements applicable to its reporting officers,
directors and greater than ten percent beneficial owners were timely satisfied
except for 13 delinquent Form 4 filings by Glen Ceiley resulting in 26
transactions being untimely reported.
Financial
Code of Ethical Conduct
The
Company has adopted a financial code of ethics applicable to the Company’s
senior executive and financial officers. You may receive, without
charge, a copy of the Financial Code of Ethical Conduct by contacting our
Corporate Secretary at 1500 N. Lakeview Avenue, Anaheim, California
92807.
Corporate
Governance
Audit
Committee
The Audit
Committee’s basic functions are to assist the Board in discharging its fiduciary
responsibilities to the shareholders and the investment community in the
preservation of the integrity of the financial information published by the
Company, to maintain free and open means of communication between the Company’s
directors, independent auditors and financial management, and to ensure the
independence of the independent auditors. The Board has adopted a
written charter for the Audit Committee which is attached as Appendix A to the
Company’s 2007 Information Statement, as filed with the Securities and Exchange
Commission (the “SEC”) on July 7, 2007. The Audit Committee charter
is not available on the Company’s website. Currently, the members of
the Audit Committee are Directors Catanzaro, Conzen (Chairman) and
Means.
Audit Committee Financial
Expert: The Company does not currently have an audit committee
financial expert. The Company believes that the members of the Board
have demonstrated that they are capable of understanding generally accepted
accounting principles and financial statements, analyzing and evaluating the
Company’s financial statements, and understanding internal controls and
procedures for financial reporting. In addition, the Company believes that
retaining a director who would qualify as an audit committee financial expert
would be costly and burdensome and is not warranted under the
circumstances.
Audit Committee Pre-Approval
Policies and Procedures: The Audit Committee is required to
pre-approve all auditing services and permissible non-audit services, including
related fees and terms, to be performed for the Company by its independent
auditor, subject to the de minimus exceptions for non-audit services described
under the Exchange Act, which are approved by the Audit Committee prior to the
completion of the audit. In fiscal year 2007, the Audit Committee pre-approved
all services performed for the Company by the auditor.
Item
11. Executive Compensation
Executive
Officer and Director Compensation
Compensation
Discussion and Analysis
The
Executive Compensation Committee (the “Committee”), currently consisting of
Directors Ceiley and Means, uses the following objectives as guidelines for its
executive compensation decisions:
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·
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to
provide a compensation package that will attract, motivate and retain
qualified executives;
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·
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to
ensure a compensation mix that focuses executive behavior on the
fulfillment of annual and long-term business objectives;
and
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·
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to
create a sense of ownership in the Company that causes executive decisions
to be aligned with the best interests of the Company’s
shareholders.
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The
Committee determined that there would be no executive compensation in 2007 for
the Company’s executive officer.
General
Compensation Policies
In
general, base salary levels are set at the minimum levels believed by the
Company’s executive officers to be sufficient to attract and retain qualified
executives when considered with the other components of the Company’s
compensation structure.
The
Committee adjusts salary levels for executive officers based on achievement of
specific annual performance goals, including personal, departmental and overall
Company goals depending upon each officer’s specific job responsibilities. The
Committee also uses its subjective judgment, based upon such criteria as the
executive’s knowledge of and importance to the Company’s business, willingness
and ability to accomplish the tasks for which he or she was responsible,
professional growth and potential, the Company’s operating earnings and an
evaluation of individual performance, in making salary decisions. Compensation
paid to executive officers in prior years is also taken into
account. No particular weighting is applied to these
factors.
The
Committee may determine that the Company’s financial performance and individual
achievements merit the payment of annual bonuses. The Company
instituted a bonus program for management of the Company beginning in 2003,
based on a percentage of the earnings from operations of the
Company.
The
Committee determines stock option grants to the executive
officers. The Committee determines annual stock option grants to
other employees based on recommendations of the Chief Executive
Officer. Stock options are intended to encourage key employees to
remain employed by the Company by providing them with a long term interest in
the Company’s overall performance as reflected by the market price of the
Company’s Common Stock. No stock option grants were made in fiscal
year 2007.
The
Committee will consider any federal income tax limitations on the deductibility
of executive compensation in reaching compensation decisions and will seek
shareholder approval where such approval will eliminate any limitations on
deductibility.
Summary
Compensation
The
following table sets forth compensation information for the named executive
officers in fiscal years 2007 and 2006.
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Name
and Principal Position
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Year
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Salary
($)
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All
Other Compensation
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Total
($)
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Edward
B. Alexander
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2007
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$ |
0 |
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$ |
0 |
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$ |
0 |
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President1
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2006
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80,000 |
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0 |
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80,000 |
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Glen
F. Ceiley
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2007
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0 |
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12,000 |
2 |
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12,000 |
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Chief
Executive Officer
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2006
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0 |
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12,000 |
2 |
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12,000 |
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1 Mr.
Alexander served as the Company’s President until April 2006.
2
Reflects fees paid to Mr. Ceiley in his capacity as a director of the
Company. The fees earned in 2007 are also reflected in the section
below entitled “Director Compensation.”
Due to
the current nature of the Company’s operations and related results from the last
two years, the Executive Compensation Committee and Mr. Ceiley have agreed that
the position of Chief Executive Officer is not justified in receiving any salary
or benefits from the Company. This structure is reviewed periodically
by the Executive Compensation Committee and will be reviewed again, should the
Company’s operations or results change.
Outstanding
Equity Awards at Fiscal Year-End
None of
the Company’s named executive officers received or were granted option awards to
purchase the Company’s Common Stock in fiscal year 2007. Further,
there were no outstanding equity awards held by the Company’s named executive
officers at the end of fiscal year 2007.
Retirement
Benefits
The
Company does not offer a retirement plan for executive officers or employees,
but during fiscal year 2006, the Company provided for participation in its
401(k) for all employees, including executive officers. The Company’s 401(k)
Plan was terminated at the end of fiscal year 2006.
Director
Compensation
In order
to attract and retain highly qualified directors through an investment interest
in the Company’s future success, the Company enacted, in l985, a non-qualified
Stock Option Plan for Non-Employee Directors (the “Directors’ Plan”), which was
used to compensate directors until January 2002. Due to the
expiration of the Directors’ Plan in 2002, the Company paid $10,000 cash to each
director in 2007 as compensation for his services. In addition,
directors who are not employees of the Company receive a fee of $500 for each
Board meeting attended. No fees are awarded to directors for
attendance at meetings of the Audit or Executive Compensation Committees of the
Board.
The
following table sets forth the compensation of the Company’s directors for the
fiscal year ended January 2, 2008.
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Director
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Fees Earned or Paid in Cash
($)
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Total ($)
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Stephen
Catanzaro
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$ |
11,500 |
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$ |
11,500 |
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Glen
F. Ceiley
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12,000 |
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12,000 |
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Jay
Conzen
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12,000 |
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12,000 |
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William
L. Means
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12,000 |
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12,000 |
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Compensation
Committee Interlocks and Insider Participation
The
members of the Executive Compensation Committee are Directors Ceiley and
Means. During fiscal year 2007, Mr. Ceiley served as the Company’s
Chief Executive Officer and Chairman of the Board, but Mr. Ceiley did not
receive any compensation for his services as such. Mr. Ceiley has not
participated in any related party transactions required to be disclosed under
Item 404 of Regulation S-K. Mr. Means is not currently nor has he ever been an
employee or officer of the Company, and has not participated in any related
party transactions (described in Item 404 of Regulation S-K). During
fiscal year 2007, Messrs. Ceiley and Means were executive officers of Bisco and
Mr. Ceiley was the sole director of Bisco.
Compensation
Committee Report
The
Executive Compensation Committee reviewed and discussed the Compensation
Discussion and Analysis and the related compensation table with
management. Based on such review and discussion, the Committee
recommended to the Board that the Compensation Discussion and Analysis be
included in this Annual Report on Form 10-K and in the Company’s 2008
Information Statement on Schedule 14C.
Respectfully
submitted,
Glen F.
Ceiley
William
L. Means
Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Security
Ownership of Certain Beneficial Owners and Management
The table
set forth below presents certain information regarding beneficial ownership of
the Company’s Common Stock (the Company’s only voting security) as of June 11,
2008, by (i) each shareholder known to the Company to own, or have the right to
acquire within sixty (60) days, more than five percent (5%) of the Common Stock
outstanding, (ii) each named executive officer and director of the Company, and
(iii) all officers and directors of the Company as a group.
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Name of Beneficial Owner
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Amount
of Common Stock Beneficially
Owned
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Percent
of
Class(1)
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Stephen
Catanzaro
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10,713 |
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* |
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Glen
F. Ceiley(2)
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2,563,039 |
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65.5 |
% |
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Jay
Conzen(3)
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25,000 |
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* |
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William
L. Means
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14,313 |
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* |
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All
Executive Officers and Directors as a group(4)
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2,613,065 |
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66.4 |
% |
* Less
than 1%
(1) Under
the rules of the SEC, the determinations of “beneficial ownership” of the
Company’s Common Stock are based upon Rule 13d-3 under the Exchange
Act. Under Rule 13d-3, shares will be deemed to be “beneficially
owned” where a person has, either solely or with others, the power to vote or to
direct the voting of shares and/or the power to dispose, or to direct the
disposition of shares, or where a person has the right to acquire any such power
within 60 days after the date such beneficial ownership is
determined. Shares of the Company’s Common Stock that a beneficial
owner has the right to acquire within 60 days are deemed to be outstanding for
the purpose of computing the percentage ownership of such owner but are not
deemed outstanding for the purpose of computing the percentage ownership of any
other person. The percentages represent the total of the shares
listed in the adjacent column divided by 3,910,264, the number of issued and
outstanding shares of Common Stock as of June 11, 2008, plus any stock options
exercisable by such person within 60 days of June 11, 2008.
(2) Includes
(i) 1,899,201 shares held directly by Glen F. Ceiley; (ii) 1,300 shares held by
Zachary Ceiley, Mr. Ceiley’s son; and (iii) 662,538 held by the Bisco Industries
Profit Sharing and Savings Plan (the “Bisco Plan”). Mr. Ceiley has
the sole power to vote and dispose of the shares of Common Stock he owns
individually and shares the power to vote and to dispose of the shares owned by
his son and the Bisco Plan. Mr. Ceiley is the President and the sole
director of Bisco.
(3) Includes
25,000 shares issuable upon the exercise of options within 60 days of June 11,
2008.
(4) Includes
25,000 shares issuable upon the exercise of options within 60 days of June 11,
2008. The address for each officer and director is c/o Bisco
Industries, Inc., 1500 North Lakeview Avenue, Anaheim, CA 92807.
Equity
Compensation Plans
As of
January 2, 2008, the Company had no securities outstanding or authorized for
issuance under an equity compensation plans.
Item 13. Certain
Relationships and Related Transactions and Director
Independence
Certain
Relationships and Related Transactions
There
have been no transactions with any director, executive officer, or family member
thereof during fiscal year 2007. In June 2008, the Company agreed to
assign its right to purchase one property to Glen F. Ceiley, Chairman of the
Board and Chief Executive Officer of the Company. Mr. Ceiley has the
right to purchase the property for $3.13 million and, upon exercising his right,
will become the new landlord of the property with the Company being the
tenant.
Board
Independence
The Board
has determined that two of its four directors are independent, as defined by the
NASDAQ Stock Market’s Marketplace Rules. In addition to such rules,
the Board considered transactions and relationships between each director (and
his immediate family) and the Company to determine whether any such
relationships or transactions were inconsistent with a determination that the
director is independent. As a result, the Board determined that
Messrs. Ceiley and Means are not independent, as Messrs. Ceiley and Means are
employees of Bisco and members of Bisco’s steering committee. Bisco’s
steering committee handles the day to day operations of the Company, and Messrs.
Ceiley and Means are intimately involved with decision-making that directly
affects the financial statements of the Company. Bisco is an affiliate of the
Company.
Currently,
the members of the Audit Committee are Directors Catanzaro, Conzen (Chairman)
and Means. Directors Catanzaro and Conzen are “independent” as defined by the
NASDAQ Stock Market’s Marketplace Rules. Director Means is not
“independent,” as he is employed by Bisco, and is a member of Bisco’s steering
committee which handles the day to day operations of the
Company. Also, Mr. Means is intimately involved with decision-making
that directly affects the financial statements of the Company.
Item
14. Principal Accounting Fees and Services
Audit
Fees
The
aggregate fees billed by Squar Milner for the fiscal years ended January 2, 2008
and December 27, 2006 for professional services rendered for the audit of the
Company’s annual financial statements and for the reviews of the financial
statements included in the Company’s Quarterly Reports on Form 10-Q for those
fiscal years were $97,200 and $61,000, respectively.
Audit-Related
Fees
The
Company was billed no audit-related fees by Squar Milner for the fiscal years
ended January 2, 2008 and December 27, 2006.
Tax
Fees
The
aggregate fees billed by Squar Milner for the fiscal years ended January 2, 2008
and December 27, 2006 for professional services rendered for tax preparation and
consulting services were $21,300 and $11,200, respectively.
All
Other Fees
There
were no other fees billed by Squar Milner for the fiscal years ended January 2,
2008 or December 27, 2006 for services rendered to the Company, other than the
services described above.
The Audit
Committee has considered whether the provision of non-audit services is
compatible with maintaining the principal accountant’s
independence.
Audit
Committee Pre-Approval
The
section of this Form 10-K/A entitled “Audit Committee Pre-Approval Policies” is
hereby incorporated by reference.
PART
IV
Item
15. Exhibits, Financial Statement Schedules
(a) No
financial statements or schedules are filed with this report on Form
10-K/A.
(b)
The following exhibits are filed as part of this report on Form
10-K/A.
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.
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EACO
Corporation
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Date:
June 25, 2008
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/s/
Glen Ceiley
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By:
Glen Ceiley
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Its: Chief
Executive Officer
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(principal executive officer
and principal
financial officer)
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EXHIBIT
INDEX