UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
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(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, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-27190
PARAMOUNT FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 11-3072768
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
ONE JERICHO PLAZA
JERICHO, NEW YORK 11753
(Address of Principal Executive Offices)
(516) 938-3400
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Units, each consisting of two shares of
Common Stock and two Class A Warrants
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(Title of class)
Class A Warrants, each to purchase one share of Common Stock
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(Title of class)
Common Stock, $0.04 par value per share
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(Title of class)
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
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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 the 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. [X]
The aggregate market value of the voting stock (Common
Stock) held by non-affiliates of the Registrant on April 26, 1999
was approximately $2,184,282 based on the closing sales price of
such stock on such date, as reported by the Nasdaq SmallCap
Market.
The number of shares outstanding of the Registrant's Common
Stock, as of April 26, 1999 was: 2,160,000 shares of Common
Stock, $0.04 par value.
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DOCUMENTS INCORPORATED BY REFERENCE
None.
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PARAMOUNT FINANCIAL CORPORATION
FORM 10-K/A
AMENDMENT NO. 1
TABLE OF CONTENTS
PAGE
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PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT . . . . . . . . . . . . . . . . . . . 1
ITEM 11 - EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . 2
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . 4
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS . . . . . . . . . . . . . . . . . . . . 4
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is supplied with respect to the
directors and executive officers of Paramount Financial
Corporation (the "Corporation"):
NAME AGE POSITION WITH THE CORPORATION
---- ---- -------------------------------
Glenn Nortman 41 Chief Executive Officer, Secretary
and a Director
Jeffrey Nortman 40 Chief Operating Officer and a
Director
Larry Austin 68 Director
William H. Kelly 58 Director
Certain biographical information regarding each director and
executive officer is set forth below:
Glenn Nortman is the Chief Executive Officer, Secretary and
a director of the Corporation. Prior to becoming Chief Executive
Officer in 1997, Mr. Nortman had served as the Corporation's Co-
Chief Executive Officer beginning in 1996 and as the Executive
Vice President from June 1992. Mr. Nortman runs the day-to-day
operations of the Corporation's lease finance business and
systems integration and consulting business. From 1987 to 1992,
Mr. Nortman served as the National Accounts Manager for
Pacificorp Capital, a wholly-owned computer leasing subsidiary of
PacifiCorp, the public utility in Portland, Oregon. Mr. Nortman
is the brother of Jeffrey Nortman.
Jeffrey Nortman is the Chief Operating Officer and a
director of the Corporation. Prior to becoming Chief Operating
Officer in 1997, Mr. Nortman served as the Corporation's Co-Chief
Executive Officer beginning in 1996 and as the President from the
Corporation's inception in July 1991. Mr. Nortman runs the day-
to-day operations of the Corporation's staffing services
business. From 1987 to 1991, Mr. Nortman was the Manager of
Peripheral Trading for Pacificorp Capital. Mr. Nortman is the
brother of Glenn Nortman.
Larry Austin has been a director of the Corporation since
1998. Mr. Austin is Chairman and Chief Executive Officer of Austin
Travel Corporation, the 50th largest travel management company in the
United States. In addition, he is Chairman of Austin Associates,
LLC, a group of four hundred independent travel agents to whom
Austin Travel Corporation provides contract management services,
education services and technology procurement services. Mr.
Austin also serves as a member of the Board of Directors of the Long
Island Association, WLIW/Channel 21, C.W. Post School of Business,
is President of the Long Island Philharmonic and Chairman of the
Travel Management Alliance, a $1 Billion group of travel management
companies.
William H. Kelly has been a director of the Corporation
since 1998. The Honorable William H. Kelly is a prominent member
of the Long Island community serving as Mayor of Asharoken since
1982. In addition, since 1976 Mr. Kelly has been the owner of
WHK Leasing, a high technology equipment leasing company since
1976. Mr. Kelly has served as past President of the New York
State Conference of Mayors and as Chairman Tri-County Village
Officials Association.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Corporation's directors and executive
officers, and persons who own more than 10% of a registered class
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of the Corporation's equity securities, to file with the
Securities and Exchange Commission reports of ownership and
reports of changes in ownership of Common Stock and other equity
securities of the Corporation and to furnish the Corporation with
copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such reports furnished to the
Corporation, the Corporation believes that, during the 1998
fiscal year, all filing requirements applicable to its executive
officers, directors and greater than 10% stockholders were
complied with in a timely fashion during the fiscal year ended
December 31, 1998.
ITEM 11 - EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table summarizes all compensation earned by or
paid to the Corporation's Chief Executive Officer and each of the
Corporation's other executive officers whose total annual salary
and bonus exceeded $100,000 (collectively, the "named executive
officers"), for services rendered in all capacities to the
Corporation during the fiscal years ended December 31, 1998, 1997
and 1996.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
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NAME AND FISCAL
PRINCIPAL POSITION YEAR SALARY BONUS
------------------ ------ ------ ------
Glenn Nortman . . . . . . . 1998 $340,182 $ 73,000
Chief Executive Officer 1997 332,717 0
1996 297,900 100,000
Jeffrey Nortman . . . . . . 1998 $365,112 -
Chief Operating Officer 1997 332,924 -
1996 297,900 -
Paul Vecker(6) . . . . . . 1998 $226,378 -
Senior Vice President 1997 204,095 -
and Chief 1996 184,200 -
Financial Officer
David Dinin(7) . . . . . . 1998 $252,389 -
Senior Vice President 1997 121,314 -
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NAME AND FISCAL ALL OTHER TOTAL ANNUAL
PRINCIPAL POSITION YEAR COMPENSATION COMPENSATION
------------------ ------ ------------- ------------
Glenn Nortman . . . . . . . 1998 $ 45,541(1) $458,723
Chief Executive Officer 1997 39,580(2) 472,297
1996 35,300(3) 333,200
Jeffrey Nortman . . . . . . 1998 $ 45,258(1) $410,370
Chief Operating Officer 1997 39,290(4) 372,214
1996 35,300(3) 333,200
Paul Vecker(6) . . . . . . 1998 $7,200(5) $233,578
Senior Vice President 1997 - 204,095
and Chief 1996 - 184,200
Financial Officer
David Dinin(7) . . . . . . 1998 $7,200(5) $259,589
Senior Vice President 1997 - 121,314
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(1) Represents payments of approximately $18,700 for automobile
expenses and $26,841 for country club dues for Mr. Glenn
Nortman, and approximately $18,400 for automobile expenses
and $26,858 for country club dues for Mr. Jeffrey Nortman.
(2) Represents payments of approximately $18,700 for automobile
expenses and $20,880 for country club dues and personal use.
(3) Represents payments of approximately $18,000 for automobile
expenses, $11,300 for country club dues and $6,000 for
split-dollar life insurance premiums.
(4) Represents payments of approximately $18,400 for automobile
expenses and $20,890 for country club dues and personal use.
(5) Represents automobile expenses.
(6) Mr. Vecker resigned from the Corporation on January 31,
1999.
(7) Mr. Dinin resigned from the Corporation on March 31, 1999.
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All directors of the Corporation are reimbursed for all
reasonable expenses incurred by them in acting as a director or
as a member of any committee of the Board of Directors.
EMPLOYMENT AGREEMENTS
Messrs. Glenn and Jeffrey Nortman have employment agreements
with the Corporation described below. Each of these employment
agreements automatically renews for successive one year terms
unless either the Corporation or the employee notifies the other
of its intention not to renew the employment agreement within 90
days of each anniversary date of the agreements (i.e., by October
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6 of each year such notice must be given.
The Corporation's employment agreements with Messrs. Nortman
provide for an annual base salary of $300,000 for the first year
of the term, $330,000 each in the second year of the term and an
annual base salary of $360,000 for the third year of the term.
As part of their compensation package, Messrs. Nortman receive
the use of an automobile and certain other fringe benefits
commensurate with their duties and responsibilities. In
addition, Messrs. Nortman will be entitled to receive a severance
payment equal to 2.99 times their respective five year average
salary if, among other things, without their consent, their
duties, responsibilities or position are materially diminished,
if there is any material breach of their employment agreements by
the Corporation at any time during the term thereof of if the
Corporation experiences a "Change of Control" (as defined).
KEY-MAN AND SPLIT-DOLLAR LIFE INSURANCE
The Corporation maintains key-man/split-dollar life
insurance policies on the lives of each of Glenn and Jeffrey
Nortman. The death benefits under these policies are allocated
$1,000,000 towards the key-man component and $4,000,000 towards
the split-dollar component.
DIRECTOR OPTION PLAN
On October 1, 1995, the Board of Directors of the
Corporation adopted, and the Corporation's stockholders approved,
the Corporation's 1995 Director Option Plan (the "Director
Plan"), pursuant to which 12,500 shares of Common Stock of the
Corporation were reserved for issuance upon the exercise of
options granted to non-employee directors of the Corporation.
The purpose of the Director Plan is to encourage ownership of the
Corporation's Common Stock by non-employee directors of the
Corporation whose initial retention and then continued services
are considered essential to the Corporation's future and to
provide them with a further incentive to remain as directors of
the Corporation. To date, no such options have been granted
under the director Plan.
The Directors Plan is administered by the Board of
Directors. Directors of the Corporation who are not employees of
the Corporation or any subsidiary of the Corporation are eligible
to participate in the Plan. The Director Plan expires in August
2005. The Board of Directors may award, alter or discontinue the
Director Plan, subject to certain limitations.
Under the Director Plan, an eligible director of the
Corporation will, after having served as a director for one year,
automatically receive non-qualified stock options to purchase 500
shares of Common Stock per annum at an exercise price equal to
the fair market value of such shares at the time of grant of such
option. Each such option is immediately exercisable for a period
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of 10 years from the date of grant but generally may not be
exercised more than 90 days after the date an optionee ceases to
serve as a director of the Corporation. Options granted under
the Director Plan are not transferable by the optionee other than
by will, laws of descent and distribution or as required by law.
Common Stock may be purchased from the Corporation upon the
exercise of an option by payment in cash or cash equivalent,
through the delivery of shares of Common Stock having a fair
market value equal to the cash exercise price of the option, or
any combination of the above, subject to the discretion of the
Board of Directors.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth the number and percentage of
shares of Common Stock beneficially owned, as of April 26, 1999,
by (i) all persons known by the Corporation to be the beneficial
owner of more than 5% of the outstanding Common Stock; (ii) each
of the current directors of the Corporation; and (iii) all
directors and executive officers of the Corporation as a group.
NAME AND ADDRESS AMOUNT OF PERCENT OF
OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) COMMON STOCK
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Glenn Nortman . . . . 375,236 17.37%
Jeffrey Nortman . . . 375,236 17.37%
William H. Kelly . . 11,588 0.54%
Larry Austin . . . . 0 -
All directors and
executive officers as
a group (5 persons) 762,060 35.28%
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(1) The address of each listed person is c/o Paramount Financial
Corporation, One Jericho Plaza, Jericho, New York 11753.
(2) All share information has been adjusted to give effect to a
one-for-four stock split consummated by the Corporation in
August 1998.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since the beginning of the Corporation's fiscal year ending
December 31, 1998, there were no relationships or transactions to
be disclosed pursuant to this Item 13.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
PARAMOUNT FINANCIAL CORPORATION
Dated: April 28, 1999 By: /s/ GLENN NORTMAN
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Glenn Nortman,
Chief Executive Officer
