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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1997
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 no. 0-23477
ICON CMT CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3603128
- ------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Harbor Blvd., Weehawken, New Jersey 07087
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 601-2000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Stock, par value $.001 per share
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 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 Common Stock of the Registrant
held by non-affiliates of the Registrant on March 27, 1998 was $109,536,468.
Such aggregate market value is computed by reference to the average of the high
and low bid price of the Common Stock on such date.
The number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date: 15,025,285 shares of Common
Stock as of the close of business on March 27, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information (ages as of May
1, 1998) concerning each of the Company's directors and Executive Officers:
Name Age Position
---- --- --------
Scott A. Baxter.............. 35 President, Chief Executive Officer and
Chairman of the Board of Directors
Richard M. Brown............. 49 Vice President-Information Technologies,
Secretary and Director
Scott Harmolin............... 38 Senior Vice President, Chief Technology
Officer and Director
Kenneth J. Hall.............. 40 Senior Vice President, Chief Financial
Officer and Treasurer
Susan A. Massaro............. 42 Senior Vice President-Professional Services
Frank C. Cicio, Jr........... 43 Senior Vice President-Sales and Business
Development
Anthony R. Scrimenti......... 44 Senior Vice President-Communications
Services
David L. Goret............... 34 Vice President -- Business Affairs, General
Counsel and Assistant Secretary
Robert J. Thalman, Jr........ 45 Vice President -- Strategic Marketing
Michael J. Gold.............. 34 Vice President -- Corporate Development
Samuel A. Plum............... 53 Director
Wayne B Weisman.............. 42 Director
Scott A. Baxter, a founder of the Company, has been the President,
Chief Executive Officer and Chairman of the Board of Directors of the Company
since its inception in 1991. From June 1987 to February 1991, Mr. Baxter was an
account executive at Sun. From 1984 to 1987, Mr. Baxter was an account executive
at Data General Corporation ("Data General").
Richard M. Brown, a founder of the Company, has been the Vice
President -- Information Technologies, Secretary and a Director of the Company
since its inception in 1991. From November 1986 to February 1991, Mr. Brown was
President of Custom Applied System Techniques Inc., a consulting firm that
specialized in computer systems.
Scott Harmolin, a founder of the Company, has served as Senior Vice
President, Chief Technology Officer and Director of the Company since its
inception in 1991. From November 1986 to February 1991, Mr. Harmolin was Vice
President of Custom Applied System Techniques Inc., a consulting firm that
specialized in computer systems.
Kenneth J. Hall has served as the Company's Senior Vice President,
Chief Financial Officer and Treasurer since April 1997. From February 1996 to
March 1997, he was the Chief Financial Officer of Global DirectMail Corp, an
international direct marketer of computer products and office supplies. Prior to
such time, Mr. Hall was employed by the National Football League Properties,
Inc. as Vice President of Finance and Administration and Chief Financial Officer
from 1992 to 1995 and Director of Finance from 1990 to 1991. Mr. Hall's
experience also includes management positions with Price Waterhouse LLP and
Coopers & Lybrand LLP.
Susan A. Massaro has served as the Company's Senior Vice President
- -- Professional Services since March 1996. From January 1979 to March 1996, Ms.
Massaro worked for Data General, a computer hardware and software manufacturer,
where she held many technical and business management positions, including the
U.S. Director of Professional Services, Eastern U.S. Director of Systems
Engineering, Northeast Technical Services Manager, and various Systems
Engineering consultant and management positions. Prior to joining Data General,
Ms. Massaro held Programmer/Analyst positions at LeCroy Research Systems, a test
and measurement instrumentation manufacturer, and STC Systems, a business
application solutions provider and integrator. Ms. Massaro is the spouse of
Anthony R. Scrimenti.
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<PAGE>
Frank C. Cicio, Jr. has served as Icon's Senior Vice President --
Sales and Strategic Business Development since February 1997. Mr. Cicio served
from July 1993 to February 1997 as Executive Vice President of Sales and
Marketing of Logic Works Incorporated, a computer software company. Prior to
joining Logic Works, Mr. Cicio was Director of Strategic Alliances at Bachman
Information, a computer software company, and served in various capacities at
MAI Systems, a manufacturer of application software and hardware products for
the retail, distribution and financial markets, beginning as an engineering
project manager in 1977 and rising to General Manager of the North American
Industry Business Unit in 1989.
Anthony R. Scrimenti has served as the Company's Senior Vice
President -- Communications Services since November 1997 and was its Chief
Information Officer from August 1994 to November 1997. From October 1993 to
August 1994, Mr. Scrimenti was employed by Novell, Inc., a networking software
manufacturer, as a senior systems consultant. From January 1986 to October 1993,
Mr. Scrimenti was employed by Data General, a computer hardware and software
manufacturer, in various capacities, including as Manager, Network Services. Mr.
Scrimenti is the spouse of Ms. Massaro.
David L. Goret has served as the Company's General Counsel since
February 1996 and Vice President --Business Affairs since February 1997. From
July 1992 to January 1996, Mr. Goret served as Vice President --Business Affairs
and General Counsel of Interfilm, Inc., a public company that he co-founded,
that produced interactive motion pictures. From May 1991 to July 1992, Mr. Goret
served as director of Business Affairs for Controlled Entropy Entertainment, an
entertainment production company. From October 1989 to July 1992, Mr. Goret
served as Director of Business Affairs for Tour-Toiseshell, Inc., the production
company of the Teenage Mutant Ninja Turtles live shows. Mr. Goret was an
attorney at Haythe & Curley from September 1988 to October 1989. Mr. Goret is
admitted to practice in New York and New Jersey.
Robert J. Thalman, Jr. has served as the Company's Vice President of
Strategic Marketing since January 1997. Prior to joining Icon, Mr. Thalman spent
16 years with Turner Broadcasting System, where he oversaw strategic marketing
for both international (1991-1996) and domestic (1986-1990) network
distribution.
Michael J. Gold has served as the Company's Vice President --
Corporate Development since August 1997. From October 1996 to May 1997, Mr. Gold
was the Chief Executive Officer of Tumble Interactive Media, Inc., an
interactive media agency. From May 1993 to February 1996, he was the President
and founder of Beyond Fitness, a multimedia fitness-information services
company. From August 1986 to April 1993, Mr. Gold was employed by AT&T and Bell
Laboratories in various capacities, including Manager, New Business Development
in the electronic commerce area and District Manager, Sales.
Samuel A. Plum has been a Managing General Partner of the general
partner SCP Private Equity Partners, L.P. ("SCP"), a private equity investment
fund, since its inception in August 1996 and was a Managing Director of
Safeguard Scientifics Inc., an information technology company, from 1993 to
1996. From February 1989 to January 1993, Mr. Plum served as President of
Charterhouse Inc. and Charterhouse North America Securities, Inc., the U.S.
investment banking and broker-dealer arms, respectively, of Charterhouse PLC, a
merchant bank in the U.K. From 1973 to 1989, Mr. Plum served in various
capacities at the investment banking division of PaineWebber, Inc. and Blyth
Eastman Dillon & Co., Inc.
Wayne B. Weisman has been a Partner of the general partner of SCP, a
private equity investment fund, since its inception in August 1996. He has been
Vice President of CIP Capital, L.P., a licensed Small Business Investment
Company, since its formation in 1990. From January 1992 to May 1994, Mr. Weisman
was an Executive Vice President of Affinity Biotech, Inc., a healthcare
technology company, and Vice President and General Counsel of its successor,
IBAH, Inc., a clinical trials management company. He formerly practiced law with
the Philadelphia firm of Saul, Ewing, Remick & Saul. Mr. Weisman is a director
of Microleague Multimedia, Inc. and CinemaStar Luxury Theaters, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock
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and other equity securities of the Company. The Company was not a reporting
Company during the fiscal year ended December 31, 1997, and there were no late
or delinquent filings.
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following summary compensation table specifies the components of
the compensation packages of the Company's Chief Executive Officer and four
other most highly compensated executive officers (the "named executive
officers") for the fiscal years ended December 31, 1997 and December 31, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long term compensation
Compensation(a) awards
--------------- ------
Number of
Shares
Underlying All other
Fiscal Salary Bonus Options compensation
Name and principal position Year ($) ($) (#) ($)
--------------------------- ------ ----- ------- ----- ----
<S> <C> <C> <C> <C>
Scott A. Baxter.................................. 1997 185,000 120,000 -- 1,275
Chief Executive Officer and President 1996 176,981 120,000 109,091 --
Richard M. Brown................................. 1997 173,807 40,000 -- 1,361
Vice President -- Information Technologies 1996 157,077 35,000 -- 5,376
and Secretary
Frank C. Cicio, Jr............................... 1997 171,539 50,000 109,091 --
Senior Vice President -- Sales and Business 1996 -- -- -- --
Development
Scott Harmolin................................... 1997 173,807 40,000 -- 1,286
Senior Vice President and Chief 1996 157,577 35,000 -- 5,820
Technology Officer
Robert J. Thalman, Jr............................ 1997 169,615 40,000 32,727 --
Vice President -- Strategic Marketing 1996 -- -- -- --
- -----------
</TABLE>
(a) Does not indicate supplementary compensation amounts less than the greater
of 10% of the named executive officer's salary and bonus or $50,000.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option
grants made to the named executive officers for the year ended December 31,
1997:
<TABLE>
<CAPTION>
Potential realizable
Number Percent of value at assumed
of total options annual rates of stock
securities granted to price valuation for
underlying employees Per share option term
options in exercise Expiration ---------------------
Name granted fiscal year price date 5% 10%
---- ------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Frank C. Cicio, Jr.......... 109,091 21.3% $6.02(a) 2/17/07 $1,120,000 $2,173,000
Robert J. Thalman, Jr....... 32,727 6.4 6.02(a) 1/15/07 336,000 652,000
</TABLE>
- --------------
(a) Reflects the repricing of such options in June 1997 when the exercise
price of such options was reduced from $14.27 to $6.02 per share.
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FISCAL YEAR-END VALUE OF UNEXERCISED OPTIONS
The following table contains information concerning the value of
unexercised options (which includes the value of such options after giving
effect to the repricing of such options in June 1997) of the named executive
officers at December 31, 1997:
<TABLE>
<CAPTION>
Number of securities
underlying unexercised Value of unexercised in-
options the-money options
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C>
Scott A. Baxter.............................. -- 109,091 -- $368,000
Frank C. Cicio, Jr........................... -- 109,091 -- 434,000
Robert J. Thalman, Jr........................ -- 32,727 -- 130,000
</TABLE>
EMPLOYMENT AGREEMENTS
In December 1995, the Company entered into five-year employment
agreements with Messrs. Baxter, Brown and Harmolin. In May 1997, each of the
agreements was amended to extend the employment term until May 2002. The
agreements provide for Mr. Baxter to serve as the Company's Chief Executive
Officer and President, for Mr. Brown to serve as the Company's Vice President --
Information Technologies and Secretary and for Mr. Harmolin to serve as the
Company's Senior Vice President and Chief Technology Officer at a minimum annual
base salary of $185,000, $180,000 and $180,000, respectively. Mr. Baxter's
agreement also provides for the payment of a guaranteed quarterly bonus in the
amount of $30,000, and Mr. Brown's and Mr. Harmolin's agreements each provide
for the payment of a guaranteed quarterly bonus in the amount of $10,000. Each
also receives additional salary increases and bonuses as the Board of Directors
may grant, as well as those benefits generally provided to other executive
officers of the Company, and an automobile allowance. In the event of
termination of employment of any of such executives following a change of
control (as defined in such employment agreements) of the Company, the Company
has agreed to pay the respective executive severance in an amount equal to 2.99
multiplied by his base amount (as defined in section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code")). Each executive has also agreed
not to compete against the Company during the term of his employment, and not to
solicit or perform services for any customers or solicit any employee of the
Company during the term of his employment and for a period of 12 months after
the termination of his employment.
In February and March 1997, the Company entered into employment
agreements with Messrs. Cicio and Hall, respectively, pursuant to which they are
employees-at-will. The agreements provide for each to be paid a minimum annual
base salary of $200,000 and a performance-based bonus. If either is terminated
without cause, he is entitled to receive his salary compensation otherwise
payable for a period of six months; provided, however, that if the Company has
extended such employee's related non-compete agreement, then such employee is
entitled to receive his salary compensation otherwise payable for a period of 12
months. Messrs. Cicio and Hall were each granted an option to purchase 109,091
and 87,273 shares of Common Stock, respectively.
AGREEMENTS WITH EMPLOYEES
Each employee of the Company is required to enter into an agreement
with the Company pursuant to which such person agrees (i) to assign to the
Company any inventions relating to such person's employment conceived during
such person's employment by the Company, (ii) not to disclose confidential
information to third parties, (iii) not to engage in any business that is
competitive with the Company during the term of such person's employment, (iv)
not to hire any employee of the Company during such person's employment and for
a period of 12 months following the termination of such person's employment and
(v) not to perform services for any customer of the Company for a period of 12
months following the termination of such person's employment. The agreement also
provides that the employee is an "at will" employee and that either the Company
or the employee may terminate employment with the Company at any time with or
without cause.
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401(k) PLAN
In January 1993 the Company adopted a tax-qualified employee savings
and retirement plan (the "401(k) Plan") covering the Company's employees.
Pursuant to the 401(k) Plan, employees may elect to reduce their current
compensation by up to the lesser of 10% of eligible compensation or the
statutorily prescribed annual limit ($9,500 in 1997) and have the amount of such
reduction contributed to the 401(k) Plan. The trustees under the 401(k) Plan, at
the direction of each participant, invest the assets of the 401(k) Plan. The
401(k) Plan is intended to qualify under Section 401 of the Code so that
contributions by employees to the 401(k) Plan, and income earned on plan
contributions, are not taxable to employees until withdrawn.
PROFIT SHARING PLAN
The Company has a profit sharing plan covering substantially all
full-time employees. Contributions by the Company to the profit sharing plan
amounted to $129,000 and $28,000 in 1994 and 1996, respectively. There were no
contributions to the profit sharing plan during 1995 and the year ended December
31, 1997.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not entitled to receive
any fees for serving as directors. All directors are reimbursed for
out-of-pocket expenses related to their service as directors. Under the
Company's 1995 Stock Option Plan (the "1995 Option Plan"), non-employee
directors will be entitled to receive formula grants of stock options.
Currently, an option to purchase 3,273 shares is automatically granted
to each non-employee director when he or she is elected or appointed to the
Board (the "Initial Grant"), and an option to purchase an additional 2,182
shares is automatically granted immediately following each annual meeting of
stockholders at which directors are elected after the Initial Grant (the
"Subsequent Grant") where such person is re-elected as a director of the
Company. Such options have not yet been issued to Messrs. Plum and Weisman. The
director's right to exercise all of the shares of the Initial Grant will vest
immediately upon grant. Each Subsequent Grant of options will vest immediately
upon grant. The option price per share of Common Stock granted to non-employee
directors will be 100% of the fair market value of the Common Stock at the date
of grant. Each option granted to non-employee directors will be exercisable for
ten years after the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company did not have a compensation committee during the fiscal
year ended December 31, 1996; its function was performed by the Board of
Directors. Messrs. Baxter, Brown and Harmolin, as the three members of the Board
of Directors, each participated in deliberations concerning executive officer
compensation. In June 1997, the Company established a Compensation Committee and
an Audit Committee. The members of the Compensation Committee are Messrs.
Baxter, Brown, Harmolin and Weisman and the members of the Audit Committee,
which was reconstituted upon completion of the Company's initial public
offering, are Messrs. Baxter, Harmolin and Weisman.
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<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding ownership
of the Common Stock as of May 1, 1998 by (i) each person or entity who owns of
record or beneficially five percent or more of the Company's Common Stock, (ii)
each director and executive officer of the Company and (iii) all directors and
executive officers of the Company as a group. To the knowledge of the Company,
each of such stockholders has sole voting and investment power as to the shares
shown unless otherwise noted. Unless otherwise noted, the address of each
beneficial owner named below is the Company's corporate address.
Number of
Beneficial Owner Shares(a) Percent
---------------- --------- -------
Scott A. Baxter(b)................................. 2,203,636 14.6%
Richard M. Brown................................... 2,181,818 14.5
Scott Harmolin..................................... 2,181,818 14.5
Kenneth J. Hall(c)................................. 26,800 *
Susan A. Massaro(d)................................ 10,728 *
Frank C. Cicio, Jr.(e)............................. 27,273 *
Anthony R. Scrimenti(f)............................ 13,091 *
David L. Goret(g).................................. 8,546 *
Robert J. Thalman, Jr.(h).......................... 10,909 *
Michael J. Gold(i)................................. 3,636 *
Samuel A. Plum(j)(k)............................... 2,499,639 15.8
Wayne B. Weisman................................... -- --
SCP Private Equity Partners L.P.(j)(l)............. 2,499,639 15.8
Paul Tudor Jones, II(m)............................ 875,040 5.8
Mellon Ventures, L.P.(n)........................... 830,220 5.5
MVMA, Inc.(n)(o)................................... 830,220 5.5
All directors and executive officers as
a group (12 persons)(p).......................... 9,165,711 57.3%
* Less than 1%.
(a) Pursuant to Rule 13d-3, includes shares of Common Stock that may be
purchased within 60 days of May 1, 1998 upon exercise of outstanding
options.
(b) Includes 21,818 shares of Common Stock that may be issued upon exercise of
options.
(c) Includes 21,819 shares of Common Stock that may be issued upon exercise of
options.
(d) Includes 10,728 shares of Common Stock that may be issued upon exercise of
options.
(e) Includes 27,273 shares of Common Stock that may be issued upon exercise of
options.
(f) Includes 13,091 shares of Common Stock that may be issued upon exercise of
options.
(g) Includes 8,546 shares of Common Stock that may be issued upon exercise of
options.
(h) Includes 10,909 shares of Common Stock that may be issued upon exercise of
options.
(i) Includes 3,636 shares of Common Stock that may be issued upon exercise of
options.
(j) The address for the beneficial owner is 800 The Safeguard Building, 435
Devon Park Drive, Wayne, Pennsylvania 19087.
(k) Includes 1,660,440 shares of Common Stock and currently exercisable
warrants to purchase 839,199 shares of Common Stock, each held of record
by SCP which Mr. Plum may be deemed to beneficially own. Mr. Plum is a
general partner of the general partner of SCP. Mr. Plum disclaims
beneficial ownership of such securities.
(l) Includes warrants to purchase 839,199 shares of Common Stock. (footnotes
continued on next page)
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<PAGE>
(m) The address for the beneficial owner is c/o Tudor Investment Corporation,
40 Rowes Wharf, Boston, Massachusetts 02110. Includes 477,827 shares of
Common Stock and warrants to purchase 23,784 shares of Common Stock
beneficially owned by Tudor BVI Futures, Ltd. ("Tudor BVI") 77,191 shares
of Common Stock and warrants to purchase 3,862 shares of Common Stock
beneficially owned by The Raptor Global Fund L.P. ("Raptor L.P."), 109,521
shares of Common Stock and warrants to purchase 5,437 shares of Common
Stock beneficially owned by The Raptor Global Fund Ltd. ("Raptor Ltd.")
and 168,990 shares of Common Stock and warrants to purchase 8,428 shares
of Common Stock beneficially owned by Tudor Arbitrage Partners L.P.
("TAP"). Mr. Jones is also the Chairman and indirect principal equity
owner of the general partner of TAP. As a result, Mr. Jones may be deemed
to be the beneficial owners of the shares of Common Stock beneficially
held by Tudor BVI, Raptor L.P., Raptor Ltd. and TAP. Mr. Jones disclaims
beneficial ownership of shares of Common Stock beneficially owned by such
entities.
(n) The address for the beneficial owner is Plymouth Meeting Executive Campus,
610 West Germantown Pike, Suite 200, Plymouth Meeting, Pennsylvania 19462.
(o) MVMA, Inc. ("MVMA") is the general partner of the general partner of
Mellon Ventures L.P. ("Mellon Ventures"). MVMA disclaims beneficial
ownership of shares of Common Stock owned by Mellon Ventures.
(p) Includes shares of Common Stock that may be issued upon exercise of
options to purchase 117,820 shares of Common Stock and warrants to
purchase 839,199 shares of Common Stock. Mr. Plum disclaims beneficial
ownership of 1,660,440 shares of Common Stock and warrants to purchase
839,199 shares of Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On August 30, 1995, the Company made loans of $50,000 to Messrs.
Baxter, Brown and Harmolin. Interest accrues at an annual rate of 7%. The loans
including accrued interest are due on demand.
On March 19, 1997, Tudor BVI , as agent and holder on behalf of itself
and each of Raptor L.P., Raptor Ltd. and TAP, loaned to the Company an aggregate
principal amount of $1.0 million pursuant to a convertible note bearing interest
at a rate of 10% per annum. In consideration for such loan, the Company granted
to such lenders a warrant to purchase an aggregate of 41,511 shares of Common
Stock at an exercise price of $6.02 per share. On May 30, 1997, such lenders
converted the $1.0 million note and $20,000 of accrued but unpaid interest
thereon into an aggregate of 10,200 shares of Series B Preferred Stock.
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SIGNATURE
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.
Dated: April 30, 1998
ICON CMT CORP.
By: /s/ Scott A. Baxter
---------------------------------
Scott A. Baxter, President, Chief
Executive Officer and Chairman
of the Board
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