SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 1O-KSB/A
(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended December 31, 1998
OR
| | TRANSITION REPORT UNDER 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: 0-21489
INTERNATIONAL DISPENSING CORPORATION
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(Name of Small Business Issuer in Its Charter)
Delaware 13-3856324
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2500 Westchester Avenue, Suite 317, Purchase, New York 10577
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(Address or Principal Executive Offices) (Zip Code)
(914) 251-0336
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section l2(b) of the Exchange Act: None
Securities registered under Section l2(g) of the Exchange Act:
Common Stock, $.001 par value per share
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(Title of Class)
Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or l5(d) of the Exchange Act during the past 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 |_|
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. |X|
The registrant did not have any revenues for the fiscal year ended December
31, 1998.
The aggregate market value of the registrant's voting stock held by
non-affiliates computed by reference to the average bid and asked price of such
stock as of March 19, 1999 as reported on the National Association of Securities
Dealers OTC Bulletin Board was approximately $5,469,654. (Aggregate market value
has been estimated solely for the purposes of this report. For the purpose of
this report it has been assumed that all officers and directors of the
registrant are affiliates of the registrant. The statements made herein shall
not be construed as an admission for determining the affiliate status of any
person.)
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APPLICABLE ONLY TO CORPORATE REGISTRANTS
There were 9,566,668 shares of Common Stock outstanding as of March 19,
1999.
Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
Documents Incorporated by Reference: None
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ITEM 10. Executive Compensation.
Summary Compensation Table
The following table sets forth for the three (3) fiscal years ended
December 31, 1998, information concerning the compensation paid or accrued to
the Chief Executive Officer of the Company and the one other person serving as
an executive officer of the Company whose salary and bonus for fiscal 1998
exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------- --------------------------------------------
Name and Principal Fiscal Salary Bonus Other Annual Restricted Securities All Other
Position year ($) ($) Compensation Stock Underlying Compensation
($)(1) Award($) Options (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Jon Silverman .................... 1998 $180,000 - - - 100,000 $4,430(2)
Chairman, CEO and ................ 1997 $187,500 - - - -- $4,000(2)
President ........................ 1996 $144,000 - - - -- --
Jeffrey D. Lewenthal ............. 1998 $144,000 - - - 50,000 --
Chief Financial Officer, ......... 1997 $ 96,000(3) - - - -- --
Executive Vice President ......... 1996 -- - - - -- --
of Business Development,
Treasurer and Secretary
<FN>
- ----------
(1) The aggregate amount of perquisites and other personal benefits paid to
each of Mr. Silverman and Mr. Lewenthal did not exceed the lesser of
(i) 10% of such officer's total annual salary and bonus for any given
fiscal year and (ii) $50,000. Thus, such amounts are not reflected in
the table.
(2) Represents the premiums paid on a $1,000,000 term life insurance policy
as to which Mr. Silverman may designate the beneficiary.
(3) Jeffrey D. Lewenthal's employment with the Company began on March 1997.
The figure represents the compensation Mr. Lewenthal received from the
Company for the period of his employment with the Company in 1997.
</FN>
</TABLE>
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Option Grants in Fiscal Year Ended December 31, 1998
The following table sets forth certain information concerning options
granted during the fiscal year ended December 31, 1998 pursuant to the 1998
Stock Option Plan to the executive officers listed in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Percent Of Total Exercise
Number of Securities Options Granted to Or Base
Underlying Options Employees In Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date
- ----------------- -------------------- ------------------- -------- ----------
<S> <C> <C> <C> <C>
Jon Silverman 100,000(1) 64.5% $1.595 4/2/2008
Jeffrey Lewenthal 50,000(2) 32.3% $1.595 4/2/2008
<FN>
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(1) The terms of grant of such options provided that options to purchase
33,333 shares of common stock of the Company would become exercisable
on April 2, 1999, options to purchase an additional 33,333 shares of
common stock of the Company would become exercisable on April 2, 2000
and options to purchase the remaining 33,334 shares of common stock of
the Company would become exercisable on April 2, 2001. Pursuant to the
amendment dated March 15, 1999 to Mr. Silverman's employment agreement
with the Company, the vesting schedule and the length of time such
options may be exercised upon termination of Mr. Silverman's employment
with the Company were changed. See "Employment and Non-Compete
Agreements" below.
(2) Of these options, options to purchase 16,666 share of common stock of
the Company will become exercisable on April 2, 1999, options to
purchase an additional 16,666 shares of common stock of the Company
will become exercisable on April 2, 2000 and options to purchase the
remaining 16,667 shares of common stock of the Company will become
exercisable on April 2, 2001.
</FN>
</TABLE>
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Aggregated Option Exercises in Fiscal Year Ended December 31, 1998 and Fiscal
Year End Option Values
None of the executive officers listed in the Summary Compensation Table
exercised any option during the fiscal year ended December 31, 1998. The
following table sets forth certain information with respect to options to
purchase common stock of the Company held by the foregoing executive officers on
December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-The-Money
Unexercised Options on 12/31/98 Options on 12/31/98 ($)
Name (#) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
Jon Silverman 0/100,000 0/0
Jeffrey Lewenthal 0/50,000 0/0
</TABLE>
Employment and Non-Compete Agreements
The Company has entered into an employment agreement with Jon Silverman,
dated as of January 17, 1997, which expires on December 31, 1999 (the "Silverman
Employment Agreement"). Pursuant to such agreement, Mr. Silverman receives a
base salary of $180,000. In addition, if Mr. Silverman is insurable, the Company
is obligated to pay the premium on a $1,000,000 term life insurance policy, to
which Mr. Silverman will designate the beneficiary. Under the agreement, Mr.
Silverman also is entitled to customary benefits and perquisites.
The Silverman Employment Agreement may be terminated by the Company sooner
than December 31, 1999 in the case of his "disability" or "for cause" (as such
terms are defined in the agreement). If Mr. Silverman's employment is terminated
for any reason he shall receive his basic salary through the effective date of
termination. If his employment is terminated due to his disability or without
cause by the Company or if Mr. Silverman leaves the employ of the Company for
"good reason" (defined in the agreement to include, among other things, a change
in control of the Company or the removal of Mr. Silverman from his position as
the Chairman of the Board, President and Chief Executive Officer), then Mr.
Silverman shall also be entitled to receive in cash within 10 days after such
termination an amount equal to the greater of (i) one year's basic salary at the
highest rate paid to him during the term of his employment under the agreement
or (ii) the basic salary that would have been paid to him had the term of
employment ended on December 31, 1999 calculated at the highest rate paid to him
during the term of his employment under the agreement.
On March 15, 1999 the Company and Mr. Silverman entered into an agreement
to amend the Silverman Employment Agreement (the "Silverman Amendment").
Pursuant to the Silverman Amendment,
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Mr. Silverman will continue to serve as the Chairman of the Company, but ceased
being the President and Chief Executive Officer of the Company, effective on the
date of the Silverman Amendment. The Silverman Amendment also provides that of
the options to purchase shares of common stock of the Company previously granted
to Mr. Silverman, options to purchase an aggregate of 33,333 shares shall become
exercisable on April 2, 1999 and options to purchase an aggregate of 33,334 of
such shares shall become exercisable on December 30, 1999; provided in each case
that Mr. Silverman is still employed by the Company. If they become exercisable,
the foregoing options may be exercised until December 31, 2004 whether or not
the employment of Mr. Silverman by the Company has terminated. Options to
purchase the remaining 33,333 shares (of the options to purchase 100,000 shares
previously granted to Mr. Silverman) shall become null and void and may not be
exercised at any time after the termination of Mr. Silverman's employment with
the Company. As a result of the foregoing changes in the terms of the options
previously granted to Mr. Silverman, all of such options shall be non-qualified
stock options rather than incentive stock options.
The Company and Gary Allanson have entered into an employment agreement,
dated as of March 15, 1999, which expires on March 14, 2001 (the "Allanson
Employment Agreement"). The term of the Allanson Employment Agreement may be
extended for one or two years upon written notice given by the Company to Mr.
Allanson prior to June 14, 2000. Pursuant to the Allanson Employment Agreement,
Mr. Allanson serves as the President and Chief Executive Officer of the Company
and receives an annual salary of $240,000. In addition, if Mr. Allanson is
insurable, the Company is obligated to pay the premium on a $1,000,000 term life
insurance policy, to which Mr. Allanson will designate the beneficiary. Under
the Allanson Employment Agreement, Mr. Allanson is also entitled to customary
benefits and perquisites.
Under the Allanson Employment Agreement, if Mr. Allanson's employment is
terminated for disability, for cause or upon his death, Mr. Allanson or his
estate will receive his base salary and other benefits through the date of
termination. If Mr. Allanson voluntarily terminates his employment with the
Company for "good reason" (defined in the Allanson Employment Agreement to
include, among other things, a change in control of the Company or the removal
of Mr. Allanson from his position as the President and Chief Executive Officer),
Mr. Allanson is entitled to receive his base salary and other benefits through
the 180th day after the date of termination. If Mr. Allanson's employment is
terminated by the Company without cause, the Company is obligated to pay Mr.
Allanson his base salary and provide Mr. Allanson and Mr. Allanson's family with
hospital, major medical and dental insurance equivalent to the insurance
provided on the date of termination, through the end of the term of the Allanson
Employment Agreement then in effect on the date of termination.
Compensation of Directors
The Director Option Plan effective as of April 2, 1998 provides that a
non-employee director who is not an incumbent director will be granted an option
to purchase 5,000 shares of common stock of the
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Company on the date such person first becomes a director. And, after such
initial grant, such person will be automatically granted an option to purchase
an additional 5,000 shares of common stock of the Company on the date of such
person's reelection as a director, if by such date the person shall have served
as a director for at least six months. Pursuant to the Director Option Plan,
Claude Lee and Jay Rosen were each granted an option to purchase 5,000 shares of
common stock of the Company at an exercise price of $1.595 per share, when they
were elected as directors of the Company on July 9, 1998.
In addition to the foregoing, non-employee directors of the Company are
reimbursed for reasonable travel and lodging expenses incurred in attending
meetings of the Board of Directors and any committees on which they may serve.
Directors do not presently receive any fees for attendance or participation at
Board or committee meetings.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: April 7, 1999 INTERNATIONAL DISPENSING CORPORATION
By:/s/ Gary Allanson
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Gary Allanson President and
Chief Executive Officer
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