##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-KSB/A
 Amendment No. 1
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2005
 or
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 000-27376
 
 ELCOM INTERNATIONAL, INC.
 (Name of small business issuer in its charter)
 DELAWARE
    
    04-3175156(State or other jurisdiction of
    
    (I.R.S. EmployerIncorporation or organization)
    
    Identification No.)10 OCEANA WAY, NORWOOD, MASSACHUSETTS
    
    02062(Address of principal executive offices)
    
    (Zip Code)
 (781) 440-3333
 Securities Registered pursuant to Section 12(b) of the Exchange Act:   Securities Registered pursuant to Section 12(g) of the Exchange Act:
 
 þ o
 o
 o þ
    o þ




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TABLE OF CONTENTS  PART IIIItem 9. Directors and Executive Officers of the Company; Compliance With Section 16(a) of the Exchange ActItem 10. Executive CompensationItem 11. Security Ownership of Certain Beneficial Owners and ManagementItem 12. Certain Relationships and Related TransactionsItem 13. ExhibitsItem 14. Principal Accounting Fees and ServicesSIGNATURESEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO    Table of Contents  Explanatory Note
  
 PART III
 
 Item 9. Directors and Executive Officers of the Company; Compliance With Section 16(a) of the Exchange Act
  NAME
    
    AGE
    
    POSITIONRobert J. Crowell
    
    54
    
    Class III Director, Chairman of the Board of Directors and Former Chief Executive OfficerJohn E. Halnen
    
    39
    
    Class I Director, President and Chief Executive OfficerLaurence F. Mulhern
    
    51
    
    Chief Financial Officer and SecretaryRichard J. Harries, Jr. (1)(2)(3)
    
    68
    
    Class II Director of the CompanyJohn Ortiz (1) (2)
    
    82
    
    Class I Director of the CompanyWilliam W. Smith (1) (2) (3)
    
    55
    
    Class III Director and Vice Chairman of the Board of DirectorsSean P. Lewis
    
    40
    
    Class II Director of the Company
 
 (1)
    
    Member of the Compensation Committee.(2)
    
    Member of the Audit Committee.(3)
    
    Member of Nominating Committee.  Robert J. Crowell
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John Halnen
 Laurence F. Mulhern,
 Richard J. Harries, Jr.
 John W. Ortiz
 William W. Smith
 Sean P. Lewis
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Audit Committee
  Code of Ethics
  Section 16(a) Beneficial Ownership Reporting Compliance
   
 Item 10. Executive Compensation
  Summary Compensation Table
 Long-TermCompensationAwardsShares ofAnnual
    
    Common StockCompensation(1)
    
    Underlying
    
    All OtherName and Principal Position (1)
    
    Year
    
    Salary
    
    Bonus
    
    Option Grants
    
    CompensationRobert J. Crowell
    
    
    2005
    
    
    $
    41,000
    
    
    
    
    
    
    
    
    
    
    $
    27,300Chairman of the Board of Directors and
    
    
    2004
    
    
    $
    164,000
    
    
    $
    34,000
    
    
    
    850,000
    
    
    $
    350Former Chief Executive Officer (2)
    
    
    2003
    
    
    $
    487,000
    
    
    
    
    
    
    
    400,000
    
    
    $
    250John E. Halnen
    
    
    2005
    
    
    $
    191,000
    
    
    
    
    
    
    
    
    
    
    $
    200President and Chief Executive Officer (3)
    
    
    2004
    
    
    $
    204,000
    
    
    $
    8,000
    
    
    
    600,000
    
    
    
    2003
    
    
    $
    281,000
    
    
    $
    11,000
    
    
    
    275,000
    
    
    
    Laurence F. Mulhern
    
    
    2005
    
    
    $
    121,000
    
    
    
    
    
    
    
    
    
    
    $
    200Chief Financial Officer and
    
    
    2004
    
    
    $
    69,000
    
    
    
    
    
    
    
    600,000
    
    
    
    Secretary (4)
    
    
    2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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##### Table of Contents



(1)
    
    No Named Executive Officer received perquisites or other personal benefits in excess of the
lesser of $50,000 or 10% of such individuals salary plus annual bonus unless otherwise
indicated herein.(2)
    
    The Company and Mr. Crowell entered into a new employment agreement as of December 21, 2005
(the 2005 Crowell Agreement) which replaced Mr. Crowells previous employment agreement with
the Company. The 2005 Crowell Agreement provides that Mr. Crowell is entitled to receive a
reduced annual salary of $72,000 for his services as the Companys Chairman of the Board with
a minimum commitment of one day (or eight hours over multiple days) per week to the Companys
business. Prior to the Crowell 2005 Agreement, Mr. Crowell was employed pursuant to an
Amended and Restated Employment Agreement entered into on June 20, 2002, which was amended,
effective as of April 16, 2004 (the 2002 Crowell Agreement). See Employment Contracts,
Executive Profit Performance Bonus Plan and  Option Grants in 2005. In order to assist
the Company in conserving cash, Mr. Crowell voluntarily reduced his cash compensation at
various times since 2001, including 2004 and 2005. Such reductions amounted to approximately
$353,000 in 2005, $246,000 in 2004, and $257,000 in 2003. The Company reinstated Mr. Crowells
cash compensation to $72,000 per annum in accordance with the 2005 Crowell Agreement,
effective December 21, 2005, and paid Mr. Crowell for vacation time accrued under the 2002
Crowell Agreement. In April 2003, Mr. Crowell received a $187,000 repayment of certain
deferred base compensation amounts, which he invested in the Companys Debentures. Mr.
Crowell also received withholding and estimated income taxes of $32,000, which were paid to
the appropriate tax authorities. These amounts ($219,000) are included in the Summary
Compensation Table above in the 2003 line. Mr. Crowell also invested an additional $263,000
of cash in the Companys Debentures (see Item 12. Certain Relationships and Related
Transactions). During 2005, Mr. Crowell loaned the Company $120,000 pursuant to a Secured
Promissory Note (see Transactions with Management). As of December 31, 2005, Mr. Crowell
has a net aggregate of base compensation reductions of $785,000, which may be paid to Mr.
Crowell pursuant to an Accrued Salary Payment Agreement between the Company and Mr. Crowell,
entered into on December 21. 2005 (see Employment Contracts), which amounts are not
included in the Summary Compensation Table above. In March of 2004, Mr. Crowell received
150,000 shares of the Companys Common Stock as a bonus in lieu of a grant of a stock option
covering 150,000 shares of Common Stock, which options were not available to be granted in
March as required under the 2002 Crowell Agreement. On January 12, 2006, Mr. Crowell was
granted an option to acquire 800,000 shares of Company common stock at a price of $0.09 per
share, which option becomes exercisable with respect to 400,000 shares on the first
anniversary of grant and the remaining portion vests on the second anniversary of grant. The
2002 Crowell Agreement originally provided for annual base compensation of $525,000, much of
which was deferred as described herein through April 16, 2004, when the annual base
compensation was reduced to $364,000. All other compensation represents premiums paid by the
Company for term life insurance and group term life insurance ($27,300 for 2005), see
Employment Contracts. As described elsewhere herein, in conjunction with a change in
control of the Company, Mr. Crowell has resigned his positions with the Company effective
April 21, 2006.(3)
    
    The Company and Mr. Halnen entered into a new employment agreement as of December 21, 2005
(the 2005 Halnen Agreement) which replaced Mr. Halnens previous employment agreement with
the Company. Mr. Halnen was appointed Chief Executive Officer of the Company as of December
21, 2005, and had been the President of the Company since his appointment in November 2000.
Mr. Halnen was also the Chief Operating Officer of the Company since June 2001. On June 4,
2003, Mr. Halnen was appointed as a Director of the Company. On June 20, 2002, the Company
and Mr. Halnen entered into an Employment Agreement, which was amended on March 9, 2004 (the
2002 Halnen Agreement). See Employment Contracts, Executive Profit Performance Bonus
Plan and  Option Grants in 2005. The 2005 Halnen Agreement provides for a reduced annual
base compensation of $212,000. The 2002 Halnen Agreement had provided for annual base
compensation of $225,000 plus an annual bonus opportunity of $75,000, payable quarterly. In
order to assist the Company in conserving cash, Mr. Halnen voluntarily reduced his cash base
and bonus compensation at various times since 2001, including 2004 and 2005. Such reductions
were approximately $113,000 in 2005, $90,000 in 2004, and $107,000 in 2003. In April 2003,
Mr. Halnen received a $60,000 repayment of certain deferred base compensation and bonuses,
which he invested in the Companys Debentures. Mr. Halnen also received $39,000 of
withholding and estimated income taxes, which were paid to the appropriate tax authorities.
These amounts ($99,000) are included in the Summary Compensation Table above in the 2003 line
(see Item 12. Certain Relationships and Related Transactions). As of December 31, 2004, Mr.
Halnen has a net aggregate of base and bonus compensation reductions of $265,000, which may be
paid to Mr. Halnen depending on the success of future operations, which is not included in the
Summary Compensation Table above. On January 12, 2006, Mr. Halnen was granted an option to
acquire 800,000 shares of Company common stock at a price of $0.09 per share, which option
becomes exercisable with respect to 400,000 shares on the first anniversary of grant and the
remaining portion vests on the second anniversary of grant. All other 5




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compensation represents premiums paid by the Company for group term life insurance ($200 for
2005), see Employment Contracts.(4)
    
    Mr. Mulhern re-joined the Company in June 2004 as Chief Financial Officer and Secretary. Mr.
Mulhern also held those or similar positions with the Company from July 1993 until his
resignation as Chief Financial Officer in October 1999, and his resignation as Secretary in
March 2000. Mr. Mulherns arrangement with the Company originally provided for base
compensation of $120,000 per year and that Mr. Mulhern work three days per week. Mr.
Mulherns arrangement was amended as of February 6, 2006 to provide for annual compensation of
$150,000 and that Mr. Mulhern work four days per week. Prior to re-joining the Company, Mr.
Mulhern worked as an independent consultant to the Company from December 2003 through May 2004
and was paid fees totaling $52,000, which are not included in the Summary Compensation Table
above. All other compensation represents premiums paid by the Company for group term life
insurance ($200 for 2005). Stock Option Plans
  Overview of the Plans
   6




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7




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The Director Plan.
 The 1993 Stock Option Plan.
 The Computerware Stock Option Plan.
 The 1996 Stock Option Plan.
 The 1997 Stock Option Plan.
 The 2000 Stock Option Plan.
 The 2001 Stock Option Plan.
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The 2002 Stock Option Plan.
 The 2004 Stock Option Plan.
 The 2005 Stock Option Plan.
 Change of Control Feature
  Option Grants
   Fiscal Year-End Option Value Table
  9




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Number of Securities
    
    Value of UnexercisedUnderlying
    
    In The MoneyShares
    
    
    
    
    
    Unexercised Options at
    
    Options AtAcquired on
    
    Value
    
    December 31, 2005
    

December 31, 2005(1)(2)Exercise
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableRobert J. Crowell
    
    
    
    
    
    
    
    
    
    
    3,877,822
    
    
    
    
    
    
    
    
    
    
    
    John E. Halnen
    
    
    
    
    
    
    
    
    
    
    2,025,499
    
    
    
    
    
    
    
    
    
    
    
    Laurence F. Mulhern
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
 
 (1)
    
    Options are in-the-money if the fair market value of the Common Stock exceeds the exercise
price.(2)
    
    Represents the total gain which would be realized if all in-the-money options beneficially
held at December 31, 2005 were exercised, determined by multiplying the number of shares
underlying the options by the difference between the per share option exercise price and
$0.075, the closing sale price per share of the Companys Common Stock on the OTCBB Market on
December 30, 2005, the last day of trading in 2005. Executive Profit Performance Bonus Plan
 th
    10




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Employment Contracts
 Crowell Agreements
    11




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Halnen Agreements
    12




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Item 11. Security Ownership of Certain Beneficial Owners and Management
 EQUITY COMPENSATION PLAN INFORMATION
  Number of securities
    
    
    
    
    
    Number of securities remainingto be issued
    
    Weighted-average
    
    available for future issuanceupon exercise of
    
    exercise price of
    
    under equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan Category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column (a))(a)
    
    (b)
    
    (c)Equity compensation plans
approved by security holders
    
    
    15,503,337
    (1)(2)
    
    $
    1.14
    
    
    
    18,259,087
    (2)(3)Equity compensation plans
not approved by security
holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    15,503,337
    
    
    $
    1.14
    
    
    
    18,259,087
 
 (1)
    
    Includes shares of Common Stock to be issued upon the exercise of options outstanding as of
December 31, 2005 under the following Company Stock Option Plans: The Director Plan, 229,999;
The 1993 Stock Option Plan, 1,518,369; The 1996 Stock Option Plan, 1,560,468; The 1997 Stock
Option Plan, 2,397,066; The 2000 Stock Option Plan, 2,629,985; The 2001 Stock Option Plan,
1,974,400; The 2002 Stock Option Plan, 1,568,050; and The 2004 Stock Option Plan, 3,625,000.(2)
    
    All outstanding options are subject to adjustments for stock splits, stock dividends,
recapitalizations, and other similar transactions or events. 13




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(3)
    
    Reflects options covering shares of Common Stock which may be issued, under the following
Company Stock Option Plans: The 1996 Stock Option Plan, 65,492; The 1997 Stock Option Plan,
123,430; The 2000 Stock Option Plan, 110,015; The 2001 Stock Option Plan, 355,650; The 2002
Stock Option Plan, 229,500; The 2004 Stock Option Plan, 2,375,000; and The 2005 Stock Option
Plan, 15,000,000. During January of 2006 options covering 500,000 and 15,000,000 shares of
common stock were issued under The 2004 Stock Option Plan and The 2005 Stock Option Plan,
respectively.  PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
  Directors and Executive Officers and
    
    Number of Shares
    
    Percentage ofOther Beneficial Owners(2)
    
    Beneficially Owned (1)
    
    Common Stock (1)Class I Director  Term expires at the 2008 Annual MeetingJohn E. Halnen (3)
    
    
    3,663,256
    
    
    
    *John W. Ortiz (4)
    
    
    110,833
    
    
    
    *Class II Director  Term expires at the 2006 Annual MeetingRichard J.
Harries, Jr. (4)
    
    
    110,833
    
    
    
    *Sean P. Lewis (5)
    
    
    26,666,666
    
    
    
    6.6
    %Class III Directors  Term expires at the 2007 Annual MeetingRobert J. Crowell (6)
    
    
    19,811,101
    
    
    
    4.9
    %William W. Smith (7)
    
    
    14,214,115
    
    
    
    3.5
    %Named Executive OfficerLaurence F. Mulhern (8)
    
    
    603,000
    
    
    
    *All Directors And Executive Officers as a Group (7 Persons)(9)
    
    
    65,179,804
    
    
    
    15.9
    %Smith & Williamson Investment Management Limited and
Smith & Williamson Nominees Limited(10)
    
    
    255,698,722
    
    
    
    63.6
    %
 
 *
    
    Less than 1%.(1)
    
    In accordance with Securities and Exchange Commission rules, each beneficial owners holdings
have been calculated assuming full exercise of all outstanding options and warrants to acquire
Common Stock, regardless of the option price, which are exercisable by such owner within 60
days after April 17, 2006, while assuming no exercise of outstanding options and warrants
covering Common Stock held by any other person.(2)
    
    For purposes hereof, the address of the Companys Directors and executive officers is the
same as that of the Company: 10 Oceana Way, Norwood, Massachusetts 02062.(3)
    
    Mr. Halnen is a Director and President, and as of December 21, 2005 Chief Executive Officer
of the Company. Mr. Halnens Common Stock ownership is comprised of 1,636,957 shares owned
directly as a result of the conversion of Company debentures, 800 shares held in an Individual
Retirement Account, and 2,025,499 shares which he has the right to acquire within 60 days of
April 17, 2006 through the exercise of stock options. See Item 10. Executive Compensation
and Item 12. Certain Relationships and Related Transactions.(4)
    
    This number represents shares of Common Stock which can be acquired through the exercise of
options that are exercisable by the owner within 60 days of April 17, 2006. 14




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(5)
    
    Mr. Lewis was appointed as a Director of the Company on March 23, 2006 at the request of
Smith & Williamson Investment Limited. Mr. Lewis Common Stock ownership is comprised of
13,333,333 shares held in the name of Smith & Williamson Nominees Limited for his benefit and
of 13,333,333 shares held in the name of Smith & Williamson Nominees Limited for the benefit
of his wife. In both cases, Smith & Williamson Nominees Limited has a revocable right to vote
and dispose of these shares. See Item 12. Certain Relationships and Related Transactions.(6)
    
    Mr. Crowell is Chairman of the Board of Directors and, until December 21, 2005, was Chief
Executive Officer of the Company. Mr. Crowells Common Stock ownership is comprised of
15,758,155 shares which he owns directly (including 12,121,413 shares related to the
conversion of Company debentures and 110,000 shares held in a retirement plan account);
188,401 shares held in a revocable trust for the benefit of one of Mr. Crowells daughters,
for which Mr. Crowell serves as Trustee; 121,616 shares held by the Crowell Educational
Foundation with respect to which Mr. Crowell shares the power to vote and dispose of; and
3,742,929 shares which Mr. Crowell has the right to acquire within 60 days of April 17, 2006
through the exercise of stock options. See Item 10. Executive Compensation and Item 12.
Certain Relationships and Related Transactions.(7)
    
    Mr. Smiths Common Stock ownership is comprised of 14,090,292 shares held in a revocable
trust for the benefit of Mr. Smiths family (including 9,496,995 shares related to the
conversion of Company debentures and 4,593,287 shares related to the conversion of Mr. Smiths
loan to the Company in 2005); and 123,833 shares which Mr. Smith has the right to acquire
within 60 days of April 17, 2006 through the exercise of stock options. See Item 12. Certain
Relationships and Related Transactions.(8)
    
    Mr. Mulherns Common Stock ownership is comprised of 600,000 shares which he has the right to
acquire within 60 days of April 17, 2006 through the exercise of stock options, and 3,000
shares which he owns directly.(9)
    
    Includes 6,713,927 shares of Common Stock which the Directors and executive officers of the
Company have the right to acquire within 60 days of April 17, 2006 through the exercise of
stock options.(10)
    
    Smith & Williamson Investment Management Limited and Smith & Williamson Nominees Limited
filed a Schedule 13D on March 6, 2006, which was amended on April 5, 2006. The Common Stock
ownership presented above is based on such Schedule 13Ds and the Companys records, and
includes 7,420,991 shares related to the conversion of Company debentures, as well as
26,666,666 shares held for the benefit of Mr. Lewis and his wife. See Change in Control of
the Company below, and Item 12. Certain Relationships and Related Transactions. Change in Control of the Company
   15




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Item 12. Certain Relationships and Related Transactions
 Crowell and Smith Secured Promissory Notes
   16




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U.K. Secured Promissory Notes
   Collateral Agency and Security Agreement
  Convertible Debentures
  17




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Other Transactions
   18




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Item 13. Exhibits
      
 Item 14. Principal Accounting Fees and Services
  19




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2005
    
    
    2004Audit fees
    
    $
    82,000
    
    
    $
    66,000Audit related fees
    
    
    11,000
    
    
    
    10,000Tax services fees
    
    
    6,000
    
    
    
    4,000All other fees
    
    
    2,000
    
    
    
    2,000Total fees
    
    $
    101,000
    
    
    $
    82,000
 Audit Fees
   Audit Related Fees
   Tax Fees
   All Other Fees
    20




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SIGNATURES
  Elcom International, Inc.
(Registrant)Date:  April 19, 2006
    By:
    /s/ John E. HalnenJohn E. HalnenPresident and Chief Executive Officer  Signatures
    
    Title
    
    Date/s/ Robert J. Crowell
    
    Chairman of the Board
of Directors
    
    April 19, 2006Robert J. Crowell/s/ John E. Halnen
    
    President, Chief Executive and Director
Officer
    
    April 19, 2006John E. Halnen
    

(Principal
Executive Officer)/s/ Laurence F. Mulhern
    

Chief Financial Officer (Principal
Financial Officer)
    
    April 19, 2006Laurence F. Mulhern/s/ William W. Smith
    
    Vice Chairman and Director
    
    April 19, 2006William W. Smith/s/ Richard J. Harries Jr.
    
    Director
    
    April 19, 2006Richard J. Harries, Jr./s/ John W. Ortiz
    
    Director
    
    April 19, 2006John W. OrtizDirector
    
    April 19, 2006Sean P. Lewis
 21