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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended June 30, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number
0-4041
HATHAWAY CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-0518115
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8228 Park Meadows Drive
Littleton, Colorado 80124
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 799-8200
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common Stock
(no par value)
Common Stock (No Par Value)
(Title of Class)
The check mark below indicates 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 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.
The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average bid and asked prices of such
stock, as of August 29, 1996 was: $10,936,000.
The number of shares outstanding of the registrant's only class of common stock,
as of August 29, 1996, was: 4,235,817.
Documents incorporated by reference:
Portions of the Registrant's definitive Proxy Statement dated September 19, 1996
are incorporated by reference in Part III of this Report. The Registrant's
Fiscal Year 1996 Annual Report is incorporated by reference in Parts I and II of
this Report.
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Hathaway Corporation
Form 10-K
For the Year Ended June 30, 1996
Table of Contents
Form 10-K Page
Item No. Description Number
- -------- ----------- ------
Part I.
Item 1. Business............................................................................................ 1
Item 2. Properties.......................................................................................... 4
Item 3. Legal Proceedings................................................................................... 5
Item 4. Submission of Matters to a Vote of Security Holders................................................. 5
Part II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters............................... 5
Item 6. Selected Financial Data............................................................................. 6
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................................... 6
Item 8. Financial Statements and Supplementary Data......................................................... 6
Report of Independent Public Accountants............................................................ 7
Item 9. Disagreements on Accounting and Financial Disclosure................................................ 8
Part III.
Item 10. Directors and Executive Officers of the Registrant.................................................. 8
Item 11. Executive Compensation.............................................................................. 8
Item 12. Security Ownership of Certain Beneficial Owners and Management...................................... 8
Item 13. Certain Relationships and Related Transactions...................................................... 8
Part IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..................................... 8
Signatures.......................................................................................... 14
Financial Statement Schedule........................................................................ 15
i
PART I
Item 1. Business.
INTRODUCTION
Hathaway Corporation (the Company) was organized under the laws of Colorado in
1962. At the end of fiscal year 1996 (ended June 30, 1996), the Company had two
wholly-owned subsidiaries, Hathaway Systems Corporation (HSC) and subsidiaries
and Computer Optical Products, Inc. As used herein, the "Company" refers to
both the Company and its wholly-owned subsidiaries. The Company's executive
offices are located at 8228 Park Meadows Drive, Littleton, Colorado 80124.
PRINCIPAL BUSINESSES
The Company is engaged in the business of designing, manufacturing and selling
advanced electronic instrumentation products to the worldwide power and process
industries, as well as motion control products to a broad spectrum of customers
throughout the world.
Power and Process Instrumentation. Power monitoring and control systems are
comprised of systems and instrumentation used to monitor and control the
operations of power generating, transmission and distribution facilities of
electric utility and process control companies, to provide the means to remotely
monitor and control power utility substations, and to test circuit breakers and
calibrate instruments used by electric utility and process control companies.
HSC operates three product divisions - Hathaway Systems (located in Denver,
Colorado), Hathaway Automation Technology (located in Seattle, Washington), and
Hathaway Process Instrumentation (located in Dallas, Texas). HSC also operates
three subsidiaries - Hathaway, Inc. (located in Toronto, Canada), Hathaway
Systems Limited (HSL) and Hathaway Instruments Limited (HIL). Both HSL and HIL
are located in the United Kingdom. The subsidiaries and divisions of HSC are
engaged in the development, manufacturing and marketing of power monitoring and
control systems and process instrumentation.
The power instrumentation products group manufactures fault and disturbance
monitoring and circuit breaker testing systems which provide a graphic waveform
record of the performance of electric power systems during periods of recovery
from faults and disturbances. These fault recording systems are sold primarily
to electric utility companies who use the data obtained to assure the proper
operation and reliability of the power system. The group also manufactures
Remote Terminal Units (RTUs) for Supervisory Control and Data Acquisition
(SCADA) systems and Energy Management Systems (EMS). RTUs are located in power
substations or on utility poles and electronically report power system
measurements and status to a central computer system. The primary mission of
these systems is to present the state of the power system to power dispatch
personnel, and to allow them to remotely effect changes in its configuration or
operation to maintain efficient and continuous delivery of power.
Effective June 30, 1996 the net assets and substantially all operations of HIL
were transferred to HSL. Since September, 1992 HIL, located in Hoddesdon,
England, had been responsible for the design, manufacture and sale of fault
location instruments to power utility companies located throughout the world.
In connection with the asset transfer, substantially all operations of HIL will
be combined with the operations of HSL. The consolidation of the operations of
HSL and HIL is aimed at reducing costs and enhancing productivity and
efficiency.
To further increase productivity and efficiency and gain additional cost
savings, the Company decided in the first quarter of 1997 to consolidate its
U.S. power products manufacturing operations located in Denver and Seattle into
one manufacturing facility located in Seattle. The consolidation of the U.S.
power manufacturing operations will take place in the second quarter of fiscal
1997.
The process instrumentation products group manufactures and markets monitoring
systems which provide either visual annunciation and/or printed messages
whenever a monitored "point" changes from an existing state. These systems are
called visual annunciators and sequential event recorders (SER's). Visual
annunciators and SER's are sold to electric utility companies and the process
industry in general. Visual annunciators provide both visual and audible alert
signals whenever a process variable goes into an alarm state. SER's provide a
printed message whenever a monitored "point" changes state.
1
The group also manufactures and sells combined annunciator/SER systems with
distributed architecture (which significantly reduces installation costs) for
power plant applications and is engaged in the design, manufacture and sale of
power transducers which are sold to the process and power utility industries, as
well as calibrators and signal conditioning products which are sold to the
process industry.
In order to gain cost savings and efficiencies, as of June 30, 1996 the Company
had decided to combine the operations of Hathaway, Inc and Hathaway Process
Instrumentation. Accordingly, all operations of Hathaway, Inc. will be moved to
Dallas, Texas in fiscal 1997.
The Company has three joint venture investments in China - Zibo Kehui Electric
Company Ltd. (Kehui), Hathaway Si Fang Protection and Control Company (Si Fang),
and Hathaway Power Monitoring Systems Company, Ltd. (HPMS). The Company holds
a 25% interest in Kehui and Si Fang and a 40% interest in HPMS. The Company's
joint venture interests in Kehui and Si Fang were acquired in fiscal 1994. The
Company's joint venture interest in HPMS was acquired in the first quarter of
fiscal 1996 upon approval of the joint venture by the Chinese government. Kehui
designs, manufactures and sells cable and overhead fault location, SCADA systems
and other test instruments within the China market and the Company will sell
these products outside of China. Si Fang designs, manufactures and sells a new
generation of digital protective relays, control equipment and instrumentation
products for substations in power transmission and distribution systems. HPMS
will design, manufacture and sell, under a license from the Company,
instrumentation products designed by the Company, to electric power companies in
China.
Motion Control Instrumentation. The Company's motion control products include
direct current (brush and brushless) motors, optical encoders, servo amplifiers
and fiber optic encoders which suit a wide range of applications in the
industrial, medical, military and aerospace sectors. The products are also used
by manufacturers of analytical instruments and computer peripherals.
The Company's motion control business is organized into two divisions and one
subsidiary: Hathaway Motion Control Division, Hathaway Motors and Instruments
Division and Computer Optical Products, Inc., respectively.
The Hathaway Motion Control Division provides brushless direct current motors,
servo amplifiers and related system components to industrial, medical,
automotive and military/aerospace markets in a diverse range of applications.
The Hathaway Motors and Instruments Division in Tulsa, Oklahoma, manufactures
precision direct-current fractional horsepower motors with .8" to 4.0"
diameters and certain motor components. Industrial equipment and military
products are the major application for the motors. This division also supplies
spare parts and replacement equipment for general purpose instrumentation
products.
Optical encoders are manufactured by Computer Optical Products, Inc., in
Chatsworth, California. An optical encoder determines the speed of various
mechanical parts within computer printers and plotters and analytical
instruments. In plotters, the encoder is used to control the position of the x
and y axis pins. The primary markets for the optical encoders are industrial,
medical and computer peripheral manufacturers.
In order to optimize the profitability of the motor/encoder assemblies, the
Company also manufactures encoder-compatible precision direct-current fractional
horsepower motors from in its Computer Optical Products, Inc. facility. The 1"
to 4" diameter motors are sold separately or are combined with optical encoders
for sale as an assembly. The primary markets are computer peripheral
manufacturers, instrumentation and industrial equipment manufacturers and
military applications.
The Fiberoptics Division of Computer Optical Products designs, manufactures and
markets fiber optic-based encoders with characteristics suited for industrial,
aerospace and military environments. Fiber optical encoders are immune to radio
frequency interference and electromagnetic pulses and will tolerate temperatures
to 300(degree)C. Applications include airborne navigational systems, anti-lock
braking transducers, missile flight surface controls and high temperature
process control equipment.
2
AVAILABILITY OF RAW MATERIALS
All parts and materials used by the company are in adequate supply. No
significant parts or materials are acquired from a single source.
SEASONALITY OF THE BUSINESS
The Company's business is not of a seasonal nature.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company considers all of its operations to be in one industry segment -
electronic instrumentation.
PRODUCT DISTRIBUTION AND OTHER INFORMATION
Product Distribution and Principal Markets. In addition to its own marketing and
sales force, the Company has developed a worldwide network of independent sales
representatives and agents to market its various product lines.
Historically, the principal market for the Company's products has been the power
and process industries. Since fiscal year 1991, however, with the acquisition
of subsidiaries, development of new products and the expansion of existing
products to other industrial applications, the Company has penetrated a variety
of markets. The Company faces competition in all of its markets, although the
number of competitors varies depending upon the product. The Company believes
there are only a small number of competitors in the power and process markets,
but there are numerous competitors in the motion control market. The Company
believes it is the world's leading manufacturer of electric power fault
recording equipment, with approximately 30% of the world market in the last
fiscal year. No clear market share data is available for the Company's other
product areas. Competition involves primarily product performance and price,
although service and warranty are also important.
Two significant changes in the power industry have recently had an impact on the
domestic and European power instrumentation markets. In October of 1992, the
Energy Policy Act of 1992 became law in the United States and is causing
increased competition among the domestic electric utility companies. The Act
requires power companies to transmit competitors' power across their own power
networks and allows them to compete with each other for sales to major customers
across the United States. In March of 1990, the government owned utility company
in the United Kingdom was privatized in order to increase competition throughout
the United Kingdom power industry (a major foreign market of the Company). The
Energy Policy Act in the United States and privatization in the United Kingdom
has led to downsizing and cost reductions by most utility companies and,
accordingly, a reduction in demand for power instrumentation products. It is
uncertain how long this trend will continue, but the Company believes that
utilities will have to increase purchases of instrumentation that protect and
monitor their systems in order to maintain the high quality of power provided to
the consumer. The Company is developing new technology that will allow power
companies to automate their systems, which will both reduce the cost of
operation and improve the reliability of the power supply.
Government Sales from Continuing Operations. Approximately $63,000 of the
Company's backlog from continuing operations as of June 30, 1996 consisted of
contracts with the United States Government. The Company's contracts with the
government contain a provision generally found in government contracts which
permits the government to terminate the contract at its option. When the
termination is attributable to no fault of the Company, the government would, in
general, have to pay the Company certain allowable costs up to the time of
termination, but there is no compensation for loss of profits.
Sales to Large Customers. During fiscal 1996, no single customer accounted for
more than 10% of the Company's consolidated revenue from continuing operations.
Export Sales from Continuing Domestic Operations and Foreign Operations. The
information required by this item is set forth in pages 13 and 17 of the
Company's 1996 Annual Report and is incorporated herein by reference.
3
Sales Backlog. The backlog of the Company's continuing operations at June 30,
1996 consisted of sales orders totaling approximately $10,094,000. The Company
expects to ship goods filling $9,982,000 of those purchase orders within fiscal
1997. This compares to a backlog from continuing operations of $8,878,000 at
June 30, 1995, of which $8,314,000 was scheduled for shipment is fiscal 1996.
The Company's expenditures on engineering and development for continuing
operations were $3,722,000 in fiscal 1996, $3,616,000 in fiscal 1995 and
$4,111,000 in fiscal 1994. Of these expenditures, no material amounts were
charged directly to customers.
The Company currently maintains inventory levels adequate for its short-term
needs based upon present levels of production. The Company considers the
component parts of its different product lines to be readily available and
current suppliers to be reliable and capable of satisfying anticipated needs.
No pollution or other types of emission result from the Company's operations and
it is not anticipated that the Company's proposed operations will be affected by
Federal, State or local provisions concerning environmental controls.
As of the end of fiscal 1996, the Company had approximately 382 full-time
employees.
Patents, Trademarks, Licenses, Franchises, and Concessions. The Company holds
several patents and trademarks regarding components used by the various
subsidiaries; however, none of these patents and trademarks are considered to be
of major significance.
Executive Officers. The Executive Officers of the Company are:
Mr. Eugene E. Prince, 64, has been President of the Company since October 1975,
was appointed Chief Executive Officer in September 1976, and was appointed
Chairman of the Board of Directors in January 1981.
Mr. Richard D. Smith, 49, has been the Company's Treasurer and Chief Financial
Officer since June 1983. From June 1983 until March 1986, Mr. Smith was the
Company's Secretary, and from March 1986 to January 1990 he was the Company's
Assistant Secretary. Since January 1990, Mr. Smith has resumed the
responsibilities of Secretary. Mr. Smith also served as the Company's Vice
President of Finance from June 1983 until August 1993. In August 1993, Mr. Smith
was made an Executive Vice President of the Company. In August 1996, Mr. Smith
became a Director of the Company.
Each of the above officers is elected for a term of one year.
Item 2. Properties.
The Company's corporate administration offices, the corporate office of HSC and
the principal office and main plant facility of the Hathaway Systems Division of
HSC is located at 8228 Park Meadows Drive, Littleton, Colorado, and contains
31,152 square feet. The lease expires in October 1996 and has an option to
renew for an additional five-year term.
The Hathaway Automation Technology Division of HSC leases 16,155 square feet of
office and manufacturing facility at 7661 South 180th Street, Kent, Washington.
The four-year lease term commenced July 1, 1995 and expires June 30, 1999.
The Process Instrumentation Division leases 28,585 square feet of office and
manufacturing space at 1840 Hutton Drive, Carrollton, Texas. This lease expires
on February 28, 1999.
Hathaway, Inc. leases 16,189 square feet of office and manufacturing/warehouse
space located at 370 Tapscott Road, Scarborough, Ontario, Canada. The lease
expires on January 31, 1997.
Hathaway Systems Limited has leased 17,300 square feet of administration, sales,
engineering and manufacturing space at Wildflower Way/Apollo Road in Belfast for
a 20-year term which expires in 2012.
4
During fiscal 1993, HIL took over Hathaway Systems Limited's office lease on
Brewery Road in Hoddesdon, Hertfordshire, England. This lease for 2,800 square
feet expires in 2007. Although substantially all operations of HIL were moved
to Belfast as of June 30, 1996, this facility will be maintained as a branch
sales office.
The Motors and Instruments Division has a lease for approximately 7,650 square
feet of office and manufacturing space located at 10816 East Newton Street,
Tulsa, Oklahoma. The current lease term expires December 31, 1996. Management
believes this lease can be renewed on terms and conditions similar to the
current lease.
The Motion Control Division leases 12,555 square feet of office and
manufacturing space located at 10002-B East 43rd Street South, Tulsa, Oklahoma.
The two-year lease term commenced August 1, 1995 and expires July 31, 1997, with
an option to renew on similar terms for three more years.
Computer Optical Products, Inc. leases one facility in Chatsworth, California.
In May 1994, the subsidiary entered into a three-year lease commencing June 1,
1994 with two one-year renewal options. The 10,560 square feet at 9305/09 Eton
Avenue houses Computer Optical Products, including the Fiberoptics Division.
The Company's management believes the above described facilities are adequate to
meet the Company's current and foreseeable needs. All facilities described
above are operating at or near full capacity, except as noted.
Item 3. Legal Proceedings.
The Company has been named as a defendant in certain actions that have arisen
out of the ordinary course of business. Management, based upon the advice of the
Company's legal counsel, believes the actions are without merit and will not
have a significant adverse effect on the Company's consolidated financial
position.
Item 4. Submission of Matters to Vote of Security Holders.
No matter was submitted to a vote of the security holders of the Company during
the fourth quarter of fiscal 1996.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
Hathaway Corporation's common stock is traded on the National Association of
Securities Dealers Automated Quotation System (NASDAQ) National Market System
under the symbol HATH. The number of holders of record of the Company's common
stock as of the close of business on August 29, 1996 was 732.
The following table sets forth, for the periods indicated, the high and low
prices of the Company's common stock on the NASDAQ National Market System, as
reported by NASDAQ.
Price Range
Dividends -----------
Per Share High Low
--------- ---- ---
FISCAL 1995
First Quarter $0.12 $4.13 $3.13
Second Quarter --- 3.88 2.75
Third Quarter --- 3.13 2.25
Fourth Quarter --- 3.13 2.38
FISCAL 1996
First Quarter $0.10 $3.13 $2.50
Second Quarter --- 2.88 1.88
Third Quarter --- 2.56 1.81
Fourth Quarter --- 4.00 1.69
5
The Bid and Asked quotations as published by NASDAQ reflect interdealer prices
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
Item 6. Selected Financial Data.
The following table summarizes data from the Company's annual financial
statements for the years 1992 through 1996 and notes thereto; the Company's
complete annual financial statements and notes thereto for the current fiscal
year appear in the 1996 Annual Report. See Item 1 in the Business section of
this report and Notes 2 and 3 to Consolidated Financial Statements in the 1996
Annual Report for discussion of acquisitions and dispositions of business
operations.
For the fiscal years ended 1996 1995 1994 1993 1992
-------- -------- -------- --------- ---------
(In thousands, except per share data)
Net income (loss) from continuing
operations................................... $(1,013) $ 842 $ 955 $ 23 $ 2,064
Net income (loss) from operations of
divested segment and divested operation...... --- --- 885 958 (323)
Gain on sale of segment....................... --- --- 4,023 --- ---
Net income (loss)............................. (1,013) 842 5,863 981 1,741
Net revenues from continuing operations....... 35,411 39,838 43,028 45,741 42,806
Fully diluted earnings (loss) per share:
Continuing operations........................ (0.24) 0.19 0.19 --- 0.45
Operations of divested segment and
divested operation......................... --- --- 0.18 0.21 (0.07)
Sale of segment.............................. --- --- 0.81 --- ---
Net income (loss)............................ (0.24) 0.19 1.18 0.21 0.38
Cash dividends:
Per share.................................... 0.10 0.12 0.205 --- ---
Total amount paid............................ 426 536 992 --- ---
Total assets at June 30....................... 21,139 23,312 24,432 28,326 27,763
Total long-term debt at June 30............... 1,777 2,144 2,298 5,819 6,953
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The information required by this item is set forth in pages 4 through 6 of the
Company's 1996 Annual Report and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is included in pages 7 through 20 of the
Company's 1996 Annual Report and is incorporated herein by reference.
6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hathaway Corporation:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in Hathaway Corporation's 1996 Annual
Report incorporated by reference in this Form 10-K, and have issued our report
thereon dated July 31, 1996. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. The supplemental Schedule II is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Denver, Colorado,
July 31, 1996.
7
Item 9. Disagreements on Accounting and Financial Disclosure.
The Company has not changed its accounting or auditing firm during the past 24
months, nor has it had any material disagreements with its accountants or
auditors regarding any accounting or financial statement disclosure matters.
PART III
The information required by Part III is included in the Company's Proxy
Statement, and is incorporated herein by reference.
Item 10. Directors and Executive Officers of the Registrant.
Information required by this item is set forth in the sections entitled
"Election of Directors" (page 2), "Executive Officers" (page 3) and "Compliance
with Section 16(a) of the Securities Exchange Act of 1934" (page 10) in the
Company's Proxy Statement and is incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this item is set forth in the section entitled
"Executive Compensation" (pages 5 through 8) in the Company's Proxy Statement
and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is set forth in the section entitled
"Security Ownership of Certain Beneficial Owners and Management" (pages 4 and 5)
in the Company's Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
Since July 1, 1995, the Company has not entered into any material related party
transactions.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
I. FINANCIAL STATEMENTS. The information required by this item and detailed
below is included in the 1996 Annual Report (pages 7 through 20) and is
incorporated herein by reference.
Consolidated Balance Sheets as of June 30, 1996 and June 30, 1995.
Consolidated Statements of Operations for each of the years in the three-year
period ended June 30, 1996.
Consolidated Statements of Cash Flows for each of the years in the three-year
period ended June 30, 1996.
Consolidated Statements of Stockholders' Investment for each of the years in the
three-year period ended June 30, 1996.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
8
II. FINANCIAL STATEMENT SCHEDULES
The following financial statement schedule is included in this report:
Schedule Subject
---------------- -------------------------------------
II Valuation and Qualifying Accounts
Financial statement schedules, other than those listed above, are omitted
because they are either not applicable or not required, or because the
information sought is included in the Consolidated Financial Statements or the
Notes thereto within the 1996 Annual Report.
III. EXHIBITS
Exhibit Index, regarding exhibits filed in accordance with Item 601, is at Page
10, hereof.
IV. REPORTS ON FORM 8-K.
The registrant did not file any reports on Form 8-K during the fourth quarter of
fiscal year 1996.
9
EXHIBIT INDEX
Exhibit No. Subject Page
- ----------- -------
3.1 Restated Articles of Incorporation. *
3.2 Amendment to Articles of Incorporation, dated September *
24, 1993.
3.3 By-laws of the Company adopted August 11, 1994. *
4 Rights Agreement between Hathaway Corporation and Bank of *
America National Trust and Savings Association, dated
June 15, 1989. Incorporated by reference to the Company's
1989 Annual Report and Form 10-K for the fiscal year
ended June 30, 1989.
10.1 Amendment No. 1 to Warrant to Purchase Common Stock of *
Hathaway Corporation granted to Household Commercial
Financial Services, Inc., dated as of June 15, 1987.
Incorporated by reference to Exhibit 10c(iii) to the
Company's 1989 Annual Report and Form 10-K for the fiscal
year ended June 30, 1989.
10.2 Amendment No. 1 to Warrant to Purchase Common Stock of *
Hathaway Corporation granted to Ford Motor Credit
Company, dated as of June 15, 1987. Incorporated by
reference to Exhibit 10c(iv) to the Company's 1989 Annual
Report and Form 10-K for the fiscal year ended June 30,
1989.
10.3 Severance Agreement dated June 15, 1989 between Hathaway *
Corporation and Eugene E. Prince. Incorporated by
reference to Exhibit 10n(i) to the Company's 1989 Annual
Report and Form 10-K for the fiscal year ended June 30,
1989.
10.4 Severance Agreement dated June 15, 1989 between Hathaway *
Corporation and Richard D. Smith. Incorporated by
reference to Exhibit 10n(ii) to the Company's 1989 Annual
Report and Form 10-K for the fiscal year ended June 30,
1989.
10.5 Lease Agreement between Circuits and Systems Design *
Limited and Department of Economic Development (Northern
Ireland) dated April 7, 1992. Incorporated by reference
to Exhibit 10(iii)D to the Company's 1992 Annual Report
and Form 10-K for the fiscal year ended June 30, 1992.
10.6 The Hathaway Corporation Amended 1980 Non-Incentive Stock *
Option Plan. Incorporated by reference to the Company's
Form S-8 filed August 3, 1981.
10.7 The 1983 Incentive and Non-Qualified Stock Option Plan *
dated September 22, 1983. Incorporated by reference to
the Company's Form S-8 filed May 10, 1984.
10.8 Amendment to the 1983 Incentive and Non-Qualified Stock *
Option Plan dated January 4, 1989. Incorporated by
reference to the Company's Form S-8 filed October 25,
1990.
10.9 The 1989 Incentive and Non-Qualified Stock Option Plan *
dated August 10, 1989. Incorporated by reference to the
Company's Form S-8 filed October 25, 1990.
10.10 The 1991 Incentive and Non-Statutory Stock Option Plan *
dated September 19, 1991. Incorporated by reference to
the Company's Form S-8 filed January 8, 1992.
10.11 Joint Venture Agreement between Zibo Kehui Electric *
Company and Hathaway Instruments Limited, for the
establishment of Zibo Kehui Electric Company Ltd., dated
July 25, 1993. Incorporated by reference to Exhibit 10.15
to the Company's Form 10-K for the fiscal year ended June
30, 1994.
10
Exhibit No. Subject
- ----------- -------
10.12 Employment Agreement between Hathaway Corporation and *
Eugene E. Prince, dated July 1, 1993. Incorporated by
reference to Exhibit 10.17 to the Company's Form 10-K for
the fiscal year ended June 30, 1994.
10.13 Employment Agreement between Hathaway Corporation and *
Richard D. Smith, dated July 1, 1993. Incorporated by
reference to Exhibit 10.18 to the Company's Form 10-K for
the fiscal year ended June 30, 1994.
10.14 Loan and Security Agreement dated August 2, 1993 between *
Hathaway Corporation, certain subsidiaries of Hathaway
Corporation and Marine Midland Business Loans, Inc.
Incorporated by reference to Exhibit 10.18 to the
Company's Form 10-K for the fiscal year ended June 30,
1993.
10.15 Loan Facility Agreement dated August 2, 1993 between CSD *
Hathaway Limited and Forward Trust Limited. Incorporated
by reference to Exhibit 10.19 to the Company's Form 10-K
for the fiscal year ended June 30, 1993.
10.16 Reimbursement Agreement dated August 2, 1993 between CSD *
Hathaway Limited and Marine Midland Business Loans, Inc.
Incorporated by reference to Exhibit 10.20 to the
Company's Form 10-K for the fiscal year ended June 30,
1993.
10.17 Promissory Note from Richard D. Smith to Hathaway *
Corporation, dated October 26, 1993. Incorporated by
reference to Exhibit 10.23 to the Company's Form 10-K for
the fiscal year ended June 30, 1994.
10.18 Joint Venture Contract between Si Fang Protection and *
Control Company Limited and Hathaway Corporation for the
establishment of Beijing Hathaway Si Fang Protection and
Control Company, Ltd., dated March 2, 1994. Incorporated
by reference to Exhibit 10.26 to the Company's Form 10-K
for the fiscal year ended June 30, 1994.
10.19 Assignment and Assumption of Lease Agreement, Letter *
Agreement, Collateral Assignment and Amendment to Lease
Agreement between Trammel Crow Company No. 91, Petula
Associates, Ltd., Symantec Corporation and Hathaway
Systems Corporation-Beta Products Division, dated June 1,
1994. Incorporated by reference to Exhibit 10.27 to the
Company's Form 10-K for the fiscal year ended June 30,
1994.
10.20 Joint Venture Contract between Wuhan Electric Power *
Instrument Factory, Beijing Huadian Electric Power
Automation Corporation and Hathaway Corporation for the
establishment of Hathaway Power Monitoring Systems
Company, Ltd., dated June 12, 1995. Incorporated by
reference to Exhibit 10.29 to the Company's Form 10-K for
the fiscal year ended June 30, 1995.
10.21 Technology License Contract between Wuhan Electric Power *
Instrument Factory and Beijing Huadian Electric Power
Automation Corporation on behalf of Hathaway Power
Monitoring Systems Company, Ltd. and Hathaway
Corporation, dated June 12, 1995. Incorporated by
reference to Exhibit 10.30 to the Company's Form 10-K for
the fiscal year ended June 30, 1995.
10.22 Supplementary Agreement between Wuhan Electric Power *
Instrument Factory, Beijing Huadian Electric Power
Automation Corporation and Hathaway Corporation, dated
August 30, 1995. Incorporated by reference to Exhibit
10.31 to the Company's Form 10-K for the fiscal year
ended June 30, 1995.
11
Exhibit No. Subject Page
- ----------- ------- ----
10.23 Management Incentive Bonus Plan for the fiscal year *
ending June 30, 1996. Incorporated by reference to
Exhibit 10.28 to the Company's Form 10-K for the fiscal
year ended June 30, 1995.
10.24 Management Incentive Bonus Plan for the fiscal year
ending June 30, 1997.
13 1996 Annual Report.
21 List of Subsidiaries. 12
22 Definitive Proxy Statement, dated September 19, 1996 for *
the Registrant's 1996 Annual Meeting of Shareholders.
23 Consent of ARTHUR ANDERSEN LLP. 13
27 Financial Data Schedule
- -----------
* These documents have been filed with the Securities and Exchange
Commission, and are incorporated herein by reference.
- --------------------------------------------------------------------------------
SUBSIDIARIES OF HATHAWAY CORPORATION
1) Hathaway Systems Corporation, a Colorado corporation.
2) Computer Optical Products, Inc., a Colorado corporation.
3) Hathaway, Inc., a Canadian corporation.
4) Hathaway Systems Limited, a Northern Ireland corporation.
5) Hathaway Instruments Limited, a United Kingdom corporation.
12
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated July 31, 1996 incorporated by reference in this Form 10-K, into the
Company's previously filed Registration Statement on Form S-8 (No. 2-73235) of
the Hathaway Corporation Amended 1980 Non-Incentive Stock Option Plan dated
August 3, 1981, into the Registration Statement on Form S-8 (No. 2-90687) of the
1983 Incentive and Non-Qualified Stock Option Plan of Hathaway Corporation dated
May 10, 1984, into the Registration Statement on Form S-8 (No. 3344998) of the
1992 Employee Stock Purchase Plan of Hathaway Corporation dated January 8, 1992,
into the Registration Statement on Form S-8 (No. 33-37473) of the 1989 Incentive
and Non-Qualified Stock Option Plan of Hathaway Corporation dated October 25,
1990, and into the Registration Statement on Form S-8 (No. 3344997) of the 1991
Incentive and Non-Statutory Stock Option Plan of Hathaway Corporation dated
January 8, 1992.
ARTHUR ANDERSEN LLP
Denver, Colorado,
September 19, 1996.
13
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.
HATHAWAY CORPORATION
By /s/ Eugene E. Prince
-----------------------------
Eugene E. Prince
President, Chief Executive
Officer and Chairman of the
Board of Directors
Date: September 19, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Eugene E. Prince President, Chief Executive September 19, 1996
- ------------------------------ Officer, and Chairman of the
Eugene E. Prince Board of Directors
/s/ Richard D. Smith Executive Vice President, September 19, 1996
- ------------------------------ Treasurer, Secretary,
Richard D. Smith Chief Financial Officer
(Chief Accounting Officer)
and Director
/s/ George J. Pilmanis Director September 19, 1996
- ------------------------------
George J. Pilmanis
/s/ Marvin J. Fein Director September 19, 1996
- ------------------------------
Marvin J. Fein
/s/ Chester H. Clarridge Director September 19, 1996
- ------------------------------
Chester H. Clarridge
/s/ Graydon D. Hubbard Director September 19, 1996
- ------------------------------
Graydon D. Hubbard
14
HATHAWAY CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Balance at Charged to Deductions Balance at
Beginning of Costs and from End of
Period Expenses Reserves` Period
- ------------------------------------------------------------------------------------------------------------
Year Ended June 30, 1996:
Reserve for bad debts ................... $ 305,000 $ 87,000 $71,000 $ 321,000
- ------------------------------------------------------------------------------------------------------------
Year Ended June 30, 1995:
Reserve for bad debts ................... 394,000 46,000 135,000 305,000
- ------------------------------------------------------------------------------------------------------------
Year Ended June 30, 1994;
Reserve for bad debts ................... 463,000 158,000 227,000 394,000
- ------------------------------------------------------------------------------------------------------------
15