10-K/A 1 niag10ka.txt FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ----------------------- FORM 10-K/A FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 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 0-22206 NIAGARA CORPORATION ------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 59-3182820 -------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 667 Madison Avenue, New York, New York 10021 -------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 317-1000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Name of Each Exchange Title of Each Class on which Registered ------------------- ------------------- Common Stock, par value $.001 per share The Nasdaq National Market 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. [ ] As of June 30, 2003, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $11,874,715 (assumes the registrant's officers, directors and all stockholders holding 5% or more of outstanding shares are affiliates). Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes __ No _X_ . There were 8,238,517 shares of the registrant's Common Stock outstanding as of April 23, 2004. Documents Incorporated by Reference: None. This filing amends the previously filed Annual Report on Form 10-K of Niagara Corporation ("Niagara") for the fiscal year ended December 31, 2003 (the "Form 10-K"). As stated in the Form 10-K, certain Items comprising Part III thereof would be filed by amendment or incorporated by reference from Niagara's Proxy Statement for its 2004 Annual Meeting of Stockholders. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Directors Certain information with respect to the directors of Niagara is set forth below. Michael J. Scharf, 61, has been the Chairman of the Board, President and Chief Executive Officer of Niagara since its inception in 1993. He has also served as the Chairman of the Board and Chief Executive Officer of Niagara LaSalle Corporation ("Niagara LaSalle") and LaSalle Steel Company ("LaSalle") since the dates of their acquisition by Niagara and Niagara LaSalle, respectively, and currently holds various other positions with such subsidiaries. Since March 1999, Mr. Scharf has also been the Chairman of the Board and a director of Niagara LaSalle (UK) Limited ("Niagara UK"), a subsidiary of Niagara which acquired certain U.K. steel bar businesses during May 1999, and since April 2003 he has been Niagara UK's Secretary. Since August 1994, Mr. Scharf has been a director of Maxcor (see below), and until August 1997, was also a Vice President of Maxcor and its Secretary and Treasurer. Mr. Scharf received an A.B. degree from Princeton University and an M.B.A. from the Harvard Business School. Gilbert D. Scharf, 55, has been the Secretary and a director of Niagara since its inception, and until March 1998, was also a Vice President of Niagara and its Treasurer. He has also served as a director of Niagara LaSalle and LaSalle since the dates of their acquisition by Niagara and Niagara LaSalle, respectively. Since August 1994, Mr. Scharf has been Chairman of the Board, President and Chief Executive Officer of Maxcor Financial Group Inc., a holding company with operating subsidiaries in the financial services industry ("Maxcor"), and currently holds the same positions with Euro Brokers Investment Corporation, a financial services company and subsidiary of Maxcor, as well as of a number of its subsidiaries. Mr. Scharf received a B.A. degree from Duke University. Frank Archer, 67, has been a director of Niagara since May 1998. Mr. Archer has been the President and a director of Niagara LaSalle since its formation in 1986 and the President and a director of LaSalle since April 1997 when it was acquired by Niagara LaSalle. Mr. Archer received a Certificate in Tool and Die Design from the Cleveland Engineering Institute and an Associates degree from John Carroll University. He also attended the Advanced Management Program at the Harvard Business School. Gerald L. Cohn, 75, has been a director of Niagara since its inception. Mr. Cohn is a private investor who, since 1968, has been involved in the financing and acquisition of companies, including AgMet, Inc., a refiner of precious metals and a recycler of ferrous and non-ferrous metals, Cadillac Cable Corp., a multi-plant manufacturer of copper and aluminum building wire, Pepco, Inc., a ferrous and non-ferrous metal recycler and ferrous stevedoring and shipping company, and DVI, Inc., a health service finance company of which Mr. Cohn is also a director. He is also a director of Diametrics Medical, Inc. and Scripps Research Institute. Mr. Cohn attended Penn State University. He is a member of the Board's Audit Committee and the Chairman of its Compensation Committee. Andrew R. Heyer, 46, has been a director of Niagara since its inception. Since February 2000, Mr. Heyer has been a Managing Director of Trimaran Fund Management, L.L.C., the investment advisor to Trimaran Fund II, L.L.C., a private equity fund. Since July 1998, Mr. Heyer has also been a member of the Investment Committee of Trimaran Advisors, L.L.C, the investment advisor to Caravelle Investment Fund, L.L.C. and Caravelle Investment Fund II, L.L.C., each of which is a collateralized debt obligation fund. Since June 2001, Mr. Heyer has been a Vice Chairman, and from August 1995 through June 2001, he was a Managing Director and co-head of the Leveraged Finance Group, of CIBC World Markets Corp., an investment banking firm. Since August 1995, Mr. Heyer has also been co-head of CIBC Argosy Merchant Banking Funds. He is also a director of Hain Celestrial Food Group, Inc. and Reddy Ice Holdings, Inc. Mr. Heyer received a B.S. degree and an M.B.A. from the Wharton School of the University of Pennsylvania. He is the Chairman of the Board's Audit Committee. Douglas T. Tansill, 65, has been a director of Niagara since March 1998. Since January 2000, Mr. Tansill has been a private investor and financial consultant. From November 2000 to January 2002, Mr. Tansill was an Advisor to UBS Warburg, an investment banking firm. From December 1994 through August 1998, Mr. Tansill was a Managing Director, and from August 1998 through November 2000, he was an Advisory Director, in the Investment Banking Division at Paine Webber Incorporated, an independent national securities firm. He is also a director of INVESTools, Inc. Mr. Tansill received a B.A. degree from Trinity College and an M.B.A. from the Harvard Business School. He is a member of the Board's Audit and Compensation Committees. The Board of Directors has determined that each of Messrs. Heyer and Tansill qualifies as (i) an independent director under Nasdaq's listing standards and (ii) an "audit committee financial expert" as such term is defined in rules adopted by the Securities Exchange Commission (the "SEC"), with each having acquired the required attributes of an "audit committee financial expert" through his extensive experience in investment banking (25 and 30 years, respectively), education and service on the audit committees of other companies. Executive Officers Set forth below is certain information with respect to each of the executive officers of Niagara who is not also a director of Niagara. Marc J. Segalman, 45, has been the Executive Vice President and General Counsel of Niagara since January 2002, and from September 1997 through January 2002, he was a Vice President of Niagara and its General Counsel. Mr. Segalman has also been an Executive Vice President and the General Counsel of Niagara LaSalle and LaSalle since March 2000. From October 1987 through August 1997, Mr. Segalman practiced law in the mergers and acquisitions group of Skadden, Arps, Slate, Meagher & Flom LLP where he represented Niagara in connection with various matters, including its acquisitions of Niagara LaSalle and LaSalle. Mr. Segalman received an A.B. degree from Dartmouth College and a J.D. degree from the Boston University School of Law. David Sinclair, 34, has been Vice President for Information Technology of Niagara, Niagara LaSalle and LaSalle since January 2002. From June 1999 through January 2002, he was the Director of Information Technology for Niagara LaSalle and LaSalle. From August 1997 through December 1998, Mr. Sinclair was the Manager of Internet Development for QAD, Inc., a vendor of enterprise resource planning software. Mr. Sinclair received a B.S. degree in Business Administration from the State University of New York at Buffalo. Anthony J. Verkruyse, 45, has been the Vice President, Treasurer and Chief Financial Officer of Niagara since July 2003, the Vice President-Finance of Niagara LaSalle and LaSalle since July 2001 and the Treasurer of Niagara LaSalle and LaSalle since July 2003. From May 1993 through June 2001, he was a Vice President and the Secretary and Treasurer of Huntco Inc., a processor of flat-rolled steel, and from October 1999 through June 2001, he was Huntco's Chief Financial Officer. In February 2002, Huntco and its subsidiaries filed a petition for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy Code. From May 1980 through June 1991, Mr. Verkruyse practiced public accounting in the audit and tax departments of Price Waterhouse LLP, an international accounting firm. Mr. Verkruyse received a B.S. degree in Business Administration from the University of Missouri-Columbia. Mark Nowadly, 43, has been Niagara's Corporate Controller since July 2003, and from June 1999 through June 2003, he was the Assistant to Niagara's Chief Financial Officer. From January 1992 through May 1999, Mr. Nowadly was the Systems Manager for Niagara LaSalle. Mr. Nowadly received a B.S. degree from the Wharton School of the University of Pennsylvania. Michael J. Scharf and Gilbert D. Scharf are brothers. There are no other family relationships among Niagara's directors or executive officers. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended requires Niagara's directors, officers and persons who beneficially own more than 10% of a registered class of Niagara's equity securities ("10% stockholders") to file with the SEC initial reports of ownership and changes in ownership in Niagara's equity securities and to furnish Niagara with copies of all such forms. Based solely on its review of copies of such forms received by it, and written representations that no other reports were required, Niagara believes that, other than the filing of a Statement of Changes in Beneficial Ownership by Michael Scharf with respect to one transaction on November 19, 2003 which was filed late (by one day), all such Section 16(a) filing requirements applicable to its directors, officers and 10% stockholders with respect to Niagara's fiscal year ended December 31, 2003 were complied with on a timely basis. Code of Ethics Niagara's Board of Directors has adopted a Code of Ethics that applies to all officers of Niagara and its subsidiaries, including Niagara's Chief Executive Officer, Chief Financial Officer and Corporate Controller. A copy of this Code of Ethics is attached as an exhibit to this Form 10-K/A. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table summarizes compensation paid by Niagara and its subsidiaries during each of the last three fiscal years to its Chief Executive Officer and its four other most highly compensated executive officers as of December 31, 2003 (collectively, the "Named Executive Officers").

(1) Except as otherwise noted, each of the bonuses was paid in the subsequent year. (2) Amounts include (i) employer matching and additional contributions under the Niagara LaSalle 401(k) Retirement Savings Plan equal to a 100% match for the first 3% of employee contributions, a 50% match for the next 2% of employee contributions and an additional employer contribution equal to 2% of earnings, subject, in each case, to certain limitations, (ii) annual premiums of up to $1,740 on life insurance policies providing coverage for such officers of four times annual salary, up to a maximum of $500,000, (iii) annual premiums of up to $1,458 on long-term disability policies providing for, in the event of disability, two-thirds of monthly earnings, up to a maximum of $15,000 per month and (iv) annual premiums of up to $41 on travel accident policies providing for, in the event of death or injury to the insured while traveling, up to $250,000, and in the event of death or injury to the insured's spouse while traveling with the insured on business, $250,000. Certain perquisites and other personal benefits that aggregate in each case to less than the lesser of either $50,000 or 10% of the Named Executive Officer's annual salary and bonus have been omitted pursuant to Item 402(b)(2)(iii)(C)(1) of Regulation S-K. (3) Amount includes annual premiums of (i) $ 20,000 on approximately $ 3.5 million of supplemental life insurance coverage and (ii) $ 4,088 on long-term care policy providing for, in the event of certain disabilities, $ 300 per day up to a maximum of $ 657,000. (4) $ 25,000 of such bonus was paid in 2003. (5) Mr. Sinclair became a Vice President of Niagara during January 2002. (6) Mr. Verkruyse became a Vice President of Niagara and its Treasurer and Chief Financial Officer during July 2003. Stock Option Grants No stock options were granted to any of the Named Executive Officers during 2003. Stock Option Exercises and Fiscal Year-End Values No stock options were exercised by any of the Named Executive Officers during 2003. The following table sets forth, for each Named Executive Officer, the number of shares of Niagara Common Stock underlying the total number of stock options held by him at Niagara's December 31, 2003 fiscal year-end and the aggregate dollar value of such options as of such date.

Pension Plan Table The following table sets forth estimated annual benefits payable to Michael Scharf upon his retirement from Niagara under his Employment Agreement (see "Employment Contracts - Michael Scharf") based upon estimates of his Final Average Pay (as described below) and years of service with Niagara. PENSION PLAN TABLE Years of Service ---------------- Final Average Pay 10 15 20 ----------------- ---- ---- ----- $500,000 $125,000 $187,500 $250,000 $550,000 $137,500 $206,250 $275,000 $600,000 $150,000 $225,000 $300,000 $650,000 $162,500 $243,750 $325,000 $700,000 $175,000 $262,500 $350,000 $750,000 $187,500 $281,250 $375,000 $800,000 $200,000 $300,000 $400,000 Mr. Scharf's Employment Agreement provides that he will be entitled, commencing on the first day of the month following his termination of employment with Niagara, to receive an annual retirement benefit equal in amount to his Final Average Pay, multiplied by the product of his years of service with Niagara and 2.5%, with 50% of such annual amount to be paid to his surviving spouse during her lifetime. Final Average Pay is defined in Mr. Scharf's Employment Agreement to mean the highest average of his combined annual salary and bonus over a three-consecutive-year period during the ten-year period immediately preceding the year in which he incurs a termination of his employment with Niagara. Mr. Scharf's current Final Average Pay is $680,000. He has 10.67 years of service with Niagara as of December 31, 2003. The estimated annual benefits set forth in the Pension Plan Table are computed on a straight-life annuity basis, commencing at normal retirement age, and are not subject to any deduction for social security or other offsetting amounts. Employment Contracts Michael Scharf Niagara and Niagara LaSalle entered into an employment agreement with Michael Scharf dated as of January 1, 1999 (the "Employment Agreement"), providing, among other things, that he will continue to serve as the Chairman, Chief Executive Officer and President of Niagara and the Chairman and Chief Executive Officer of Niagara LaSalle for the term of the Employment Agreement. Such term will be for five years, subject to annual one-year extensions commencing on January 1, 2002 unless Niagara or Mr. Scharf provides the other with timely notice not to extend. The Employment Agreement provides that Mr. Scharf will be entitled to (i) an annual base salary ("Annual Base Salary") of not less than $480,000; (ii) a performance-based annual incentive bonus subject to the approval of Niagara's stockholders (which was approved at Niagara's 1999 Annual Meeting of Stockholders); (iii) a supplemental annual retirement benefit ("SERP") equal in amount to Mr. Scharf's Final Average Pay (as defined in the Employment Agreement), multiplied by the product of Mr. Scharf's years of service with Niagara and 2.5%, with 50% of such annual amount to be paid to Mr. Scharf's surviving spouse during her lifetime; (iv) annual grants of stock options as determined by the Compensation Committee of Niagara's Board of Directors; and (v) medical coverage and specified fringe benefits. If Mr. Scharf's employment is terminated by Niagara without Cause (as defined in the Employment Agreement) or by Mr. Scharf due to a breach of the Employment Agreement by Niagara, Niagara will (i) provide Mr. Scharf with a lump sum amount equal to the product of (A) the greater of three and the number of years remaining in the term of the Employment Agreement ("Severance Multiple"), and (B) the sum of Mr. Scharf's then current Annual Base Salary and the greater of Mr. Scharf's three-year average annual bonus and the target bonus for the year of termination; (ii) provide Mr. Scharf with a pro rata bonus for the year of termination; (iii) for the number of years equal to the Severance Multiple, provide Mr. Scharf with additional years of service credit under the SERP, continued life insurance benefits and continued exercisability of stock options; and (iv) cause all of Mr. Scharf's outstanding equity awards to vest. Mr. Scharf would also receive a gross-up payment for any excise tax payable under Section 4999 of the Internal Revenue Code of 1986, as amended. Other Named Executive Officers No Named Executive Officer other than Michael Scharf is a party to an employment agreement with Niagara or any of its subsidiaries which is currently in effect. Compensation of Directors The members of the Board of Directors are compensated in a manner and at a rate determined from time to time by the full Board. Each member of the Board of Directors, other than Michael Scharf and Frank Archer, received $25,000 as compensation for his service as a director during 2003. Niagara maintains directors and officers liability insurance which insures directors and officers of Niagara and its subsidiaries against certain liabilities by them while serving in such capacities, and reimburses Niagara for certain indemnification payments made by Niagara to directors and officers of Niagara and its subsidiaries. These policies extend through March 12, 2005 at a total annual premium of $125,780. No claims have been made under these policies. Compensation Committee Interlocks and Insider Participation The Compensation Committee of the Board of Directors is comprised of Gerald L. Cohn and Douglas T. Tansill. There are no "interlocks" as defined by the SEC with respect to any director who serves or for any part of 2003 served as a member of the Compensation Committee. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Set forth below is certain information concerning beneficial ownership of Niagara's Common Stock as of April 23, 2004 by (i) each director and executive officer of Niagara, (ii) all directors and executive officers of Niagara as a group and (iii) based on public filings made through April 23, 2004, persons known by Niagara to be the beneficial owners of 5% or more of the outstanding shares of Niagara Common Stock.

(1) The address of each stockholder, other than Dimensional and the Wynnefield Group (each as defined below), is c/o Niagara Corporation, 667 Madison Avenue, 11th Floor, New York, New York 10021. (2) Includes shares of Niagara Common Stock issuable upon the exercise of stock options held by the stockholder that are currently exercisable or exercisable within 60 days ("Exercisable Options"). Beneficial Ownership of Exercisable Options is as follows: Michael J. Scharf -- 900,000; Gilbert D. Scharf -- 55,000; Frank Archer -- 350,000; Andrew R. Heyer -- 55,000; Gerald L. Cohn -- 55,000; Douglas T. Tansill -- 30,000; Marc J. Segalman -- 50,000; David Sinclair -- 40,000; Mark Nowadly -- 0; Anthony J. Verkruyse -- 0; and all directors and executive officers as a group -- 1,535,000. (3) Based upon 8,238,517 shares of Niagara Common Stock outstanding as of April 23, 2004, plus any shares of Niagara Common Stock issuable upon the exercise of Exercisable Options held by the stockholder (but not by any other stockholder). (4) Includes 205,000 shares of Niagara Common Stock held by the Michael J. Scharf 1987 Grantor Income Trust and 194,500 shares of Common Stock held by the Scharf Family 1989 Trust. Michael Scharf is trustee of both of these trusts. (5) Includes 433,700 shares of Niagara Common Stock held by the Gilbert D. Scharf Living Trust, of which Gilbert Scharf is the sole trustee and 5,000 shares held by Gilbert Scharf for his son under the New York Uniform Transfer to Minor Act. (6) Information with respect to Wynnefield Partners Small Cap Value, L.P., Wynnefield Small Cap Value Offshore Fund, Ltd., Wynnefield Partners Small Cap Value, L.P. I , Wynnefield Capital Management LLC and Wynnefield Capital, Inc. (collectively, the "Wynnefield Group") and their holdings of Niagara Common Stock is based on the Wynnefield Group's Schedule 13F dated February 11, 2004. The business address of each member of the Wynnefield Group is 450 Seventh Avenue, Suite 509, New York, New York 10123. (7) Information with respect to Dimensional Fund Advisors, Inc. ("Dimensional") and its holdings of Niagara Common Stock is based on Dimensional's Schedule 13G dated February 4, 2004. The address of Dimensional is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. Equity Compensation Plan Information The following table summarizes information concerning securities authorized for issuance under Niagara's stock option plan as of December 31, 2003:

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not applicable. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. It is the policy of the Audit Committee of Niagara's Board of Directors (the "Audit Committee") to pre-approve the scope and fees of all services provided to Niagara and its subsidiaries (collectively, the "Company") by the Company's principal accountants. The Audit Committee appointed BDO Seidman LLP and its affiliates ("BDO") and Deloitte & Touche LLP and its affiliates ("Deloitte") as the Company's principal accountants for 2002 and 2003, respectively. Each such appointment was ratified by Niagara's stockholders. Set forth below is certain information with respect to the fees charged the Company by BDO and Deloitte for certain services they provided for 2002 and 2003, respectively. All such services were pre-approved by the Audit Committee. Audit Fees The aggregate fees charged the Company by BDO and Deloitte for auditing the annual financial statements of the Company, Niagara and its subsidiaries, reviewing the financial statements included in Niagara's Form 10-Q, and reviewing the regulatory reports containing such financial statements were $403,864 and $537,887, respectively. Audit-Related Fees The aggregate fees charged by BDO and Deloitte for auditing the financial statements of certain benefit plans of Niagara's subsidiaries were $31,500 and $0, respectively. Tax Fees The aggregate fees charged by BDO and Deloitte for services and advice to the Company in connection with the preparation and filing of the Company's tax returns and certain other tax advice were $109,953 and $30,384, respectively. All Other Fees BDO and Deloitte did not render any other services to Niagara or its subsidiaries during 2002 and 2003. ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (c) Exhibits 14.1 Niagara Corporation Management Code of Ethics. 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, on the 27th day of April, 2004. NIAGARA CORPORATION By: /s/ Michael J. Scharf -------------------------- Michael J. Scharf Chairman of the Board Chief Executive Officer and President 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 and in the capacities and on the dates indicated. /s/ Michael J. Scharf Chairman of the Board, ----------------------- Chief Executive Officer April 27, 2004 Michael J. Scharf and President /s/ Gilbert D. Scharf Secretary and Director April 27, 2004 ----------------------- Gilbert D. Scharf /s/ Anthony J. Verkruyse Vice President, Treasurer April 27, 2004 ----------------------- and Chief Financial Officer Anthony J. Verkruyse /s/ Frank Archer Director April 27, 2004 ----------------------- Frank Archer /s/ Gerald L. Cohn Director April 27, 2004 ----------------------- Gerald L. Cohn /s/ Andrew R. Heyer Director April 27, 2004 ----------------------- Andrew R. Heyer /s/ Douglas T. Tansill Director April 27, 2004 ----------------------- Douglas T. Tansill

NIAGARA CORP 10-K/A