10-K/A 1 d10ka.txt AMENDMENT NO 1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM 10-K/A (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934. For The Fiscal Year Ended: March 31, 2001 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: 0-26245 ESPS, Inc. (Exact name of registrant as specified in its charter) Delaware 23-2762324 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1300 Virginia Drive, Suite 125, Ft. Washington, PA 19034 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (215) 619-6000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value 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. [_] The aggregate market value of the voting stock held by nonaffiliates of the registrant as of June 27, 2001 (based on the closing price of $1.02 as quoted by Nasdaq National Market as of such date) was approximately $17,934,987. As of June 27, 2001, 17,583,321 shares of the registrant's Common Stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE--NONE TABLE OF CONTENTS

EXPLANATORY NOTE This amendment on Form 10-K/A (the "Amendment") amends the Registrant's Annual Report on Form 10-K filed by the Registrant on July 3, 2001 (the "Annual Report"), and is being filed solely to amend and restate in its entirety Part III of the Annual Report. The Amendment does not amend or alter the information set forth in Parts I, II or IV of the Annual Report. 2 PART III Item 10. Directors and Executive Officers of the Registrant. Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Liquent. Officers, directors and ten-percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on its review of the copies of such reports received by us and written representations from certain reporting persons that no Forms 5 were required for those persons, we believe that during the fiscal year ended March 31, 2001, all filing requirements applicable to its officers, directors and ten-percent shareholders were satisfied except the following Form 3's which were filed late. -------------------------------------------------------------------------------- Name Date of Date filed Days event Late -------------------------------------------------------------------------------- Kenneth Kaisen 4/14/00 6/9/00 46 -------------------------------------------------------------------------------- Margaret A. Archdeacon 5/24/00 6/9/00 6 -------------------------------------------------------------------------------- Kevin Buxton 5/24/00 6/9/00 6 -------------------------------------------------------------------------------- Norman E. Corn 6/1/00 8/10/00 60 -------------------------------------------------------------------------------- Frances Moscoe 6/2/00 8/10/00 59 -------------------------------------------------------------------------------- William J. Miller 9/8/00 9/25/00 7 -------------------------------------------------------------------------------- Eric Haskell 9/8/00 9/25/00 7 -------------------------------------------------------------------------------- Henry A. Hill 10/23/00 11/10/00 8 -------------------------------------------------------------------------------- Hugh A. Tammassia 1/23/01 2/9/01 7 -------------------------------------------------------------------------------- John C. Gregitis 2/26/01 5/1/01 54 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Compensation of Directors In general, Directors who are not employees of Liquent receive a fee of $1,000 for attendance at each regular meeting of the Board of Directors, and are also reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings. Non-employee Directors are also eligible to receive annual stock option grants under our 1995 Incentive Stock Option Plan. Mr. Hollenbeck does not receive a fee of $1,000 for attendance at regular meetings of the Board of Directors or stock option grants. Directors who are employees are not compensated for their service on the Board of Directors or any committee thereof. 3 Item 11. Executive Compensation. The following table sets forth information concerning the compensation for services in all capacities to the Company for the fiscal years ended March 31, 2001, 2000 and 1999, of those persons who at March 31,2001 were (I) the Chief Executive Officer, (ii) each of the four other most highly compensated executive officers of the Company in office who earned more than $100,000 in salary and bonus in fiscal 2001 (collectively, the "Named Executive Officers"), and a former executive officer of the Company who was not employed by the Company on March 31, 2001. Summary Compensation Table --------------------------

4 (1) Mr. Brennan joined Liquent in October 1995 and resigned as President and Chief Executive Officer on April 24, 2000. Mr. Brennan resigned as Chairman of the Board of ESPS on June 29, 2000. (a) On October 23, 2000, Henry Hill joined Liquent as Senior Vice President, Client Services. As an incentive for him to take the position, he was awarded a $30,000 sign on bonus, an $18,000 draw guarantee and $8,000 in a relocation bonus. All of Mr. Hill's other Annual Compensation is grossed-up for tax liabilities (normally not provided to employees). Liquent currently gives signing bonuses to the majority of new executives. (b) Perquisites include a car allowance of $3,295 for all executives except Mr. Dool who received $3,954. (c) A recruiting bonus of $2,000 was paid to Mr. Corn. (d) Mr. Brennan purchased and sold 217,030 shares of common stock at $0.08 via the same-day-sale cashless method. Mr. Brennan recognized $848,126 of taxable income on the transaction. Mr. Brennan purchased 231,561 shares of common stock at $0.08 on July 14, 2000. (e) Mr. Sager purchased and sold 43,000 shares of common stock at $0.07 via the same-day-sale cashless method. Mr. Sager recognized $149,203 of taxable income on the transaction. (f) Represents employer matching contributions to the Company 401 (k) Plan. (g) On June 29, 2000, Mr. Brennan terminated his employment with the Company. As a part of this termination, he was paid a severance equal to six months' salary at his pay rate on April 24, 2000. The following table contains information regarding options granted in the fiscal year ended March 31, 2001 to the Named Executive Officers. The potential realizable value over the terms of the options is based on assumed rates of stock appreciation in compliance with the rules of the SEC and do not represent our estimate of future stock price. Actual gains, if any, on stock option exercises will be dependent on the future performance of ESPS common stock. For the fiscal year ended March 31, 2001, we granted options to acquire up to an aggregate of 3,528,284 shares to employees and directors, all under the 1995 stock incentive plan and all at an exercise price equal to not less than the fair market value of our common stock on the date of grant as determined in good faith by the board of directors. Optionees may pay the exercise price by cash or check, promissory note, delivery of already-owned shares of our common stock or by a cashless exercise procedure. Options under the 1995 stock incentive plan generally vest over four years with 25% of the shares vesting on the first anniversary of the grant date, and the remaining option shares vesting 6.25% in every calendar quarter after the first anniversary of the grant date. We may modify the standard vesting schedule. 16,667 options granted to Mr. Sager during the fiscal year ended March 31, 2001 had immediate vesting. 5

(1) Mr. Brennan terminated employment on June 29, 2000. (2) Mr. Sager was granted 16,667 options at $3.88, expiration date of 5/1/05 and 100,000 options at $3.88, expiration date of 6/30/05. The following table presents information regarding the value realized upon exercise of options during the fiscal year ended March 31, 2001 and the number and value of unexercised options held by the executive officers named in the summary compensation table above. Aggregated Option Exercises in the Last Fiscal Year And FY-End Option Values

(1) Value Realized represents the fair market value of the shares of common stock underlying the options on the date of exercise less the aggregate exercise price of the option. (2) Value presented is based upon (i) the difference between the fair value of the Company's common stock on March 30, 2001 ($1.8438 per share) and (ii) the exercise price of unexercised-in-the-money options. (3) Mr. Brennan terminated employment on June 29, 2000. 6 Item 12. Security Ownership of Certain Beneficial Owners and Management. The following table presents stock ownership information, as of May 31, 2001, with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock, each director and each Named Executive Officer and all current directors and executive officers as a group.

7 * Represents less than 1% of our outstanding common stock. (1) Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days are deemed to be outstanding and to be beneficially owned by the person holding such options or convertible notes for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. (2) Options Exercisable are options currently exercisable or exercisable within 60 days of May 31, 2001. (3) Mr. Brennan joined Liquent in October 1995 and terminated employment on June 29, 2000. (4) Mr. Brennan's shares owned is based on information filed on Form 4's. Item 13. Certain Relationships and Related Transactions. On April 14, 2000, Kenneth R. Kaisen was appointed to the Liquent Board of Directors. Mr. Kaisen currently is the Vice President, Information Management and Chief Information Officer for the Industry Solutions Operations organization within Xerox Corporation. Mr. Kaisen's appointment took place shortly after Xerox entered a long-term, multi-million dollar technology development and reseller agreement with Liquent that included the creation of a Xerox seat on our board of directors and Xerox participation on our Technical Advisory Board. On June 5, 2000, the Company loaned to Jeffrey Sager, the Company's Vice President, Content Technologies, $100,000 in connection with Mr. Sager's purchase of a personal residence. The loan is evidenced by a promissory note which bears interest at a rate of 5 percent and is secured by all of the tangible assets that Mr. Sager owns. The amount due under the note is payable in full on the earliest to occur of (i) June 5, 2002, (ii) voluntary termination by either party, (iii) termination of Mr. Sager for cause or (iv) early payment by Mr. Sager. 8 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized. LIQUENT, Inc. July 9, 2001 By: /s/ R. Richard Dool R. Richard Dool President and Chief Executive Officer /s/ CHRISTOPHER MESHGINPOOSH Christopher Meshginpoosh Chief Financial Officer (Principal Financial and Accounting Officer) 9

ESPS INC 10-K/A