UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A1
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee Required)
For the fiscal year ended May 31, 1996.
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No Fee Required)
Commission File Number: 1-4676
The Bethlehem Corporation
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(Name of small business issuer in its charter)
Pennsylvania 24-0525900
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25th and Lennox Streets, Easton, Pennsylvania 18045-0348
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number including Area Code: (610) 258-7111.
Securities registered under Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
ON WHICH REGISTERED
Common Stock, no par value American Stock Exchange, Inc.
Securities registered under Section 12(g) of the Exchange Act: None.
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(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 the filing requirements for the past 90 days. Yes /X/. No. / /.
Check if 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. ( )
State issuer's revenues for its most recent fiscal year: $18,078,000.
As of August 29, 1996, 1,938,520 shares of the registrant's common stock were
outstanding and the aggregate market value of such common stock held by
non-affiliates was approximately $1,995,452 based on the average of the bid
(1.9375) and asked ($2.00) prices on that date of $1.9688.
<PAGE>
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The directors are elected at the Annual Meeting of the Stockholders of
the Company and each director elected holds office until his successor is
elected and qualified. The Board currently consists of eight members. The
stockholders vote at the Annual Meeting for the election of directors. There are
no family relationships among any directors or executive officers of the
Company, except that directors Jan Gale and Ronald H. Gale are brothers.
The names of the directors, together with certain information regarding
them, are as follows:
YEAR
FIRST YEAR TERM
BECAME A WILL
NAME AGE PRINCIPAL OCCUPATION DIRECTOR EXPIRE
- ---- --- -------------------- -------- ------
Salvatore J. Zizza 50 Chairman of The Lehigh 1995 1996
Group: a public company
that is listed on the New
York Stock Exchange which
has a subsidiary in the
distribution of electrical
products and until 1991
included major interior
construction, asbestos
abatement and heavy
equipment manufacturing.
Alan H. Silverstein 47 President and Chief 1994 1997
Executive Officer of the
Company since December
1995; President and Chief
Operating Officer of the
Company since February 1994
to November 1995; from 1991
to present, President
of Earth Environmental
Services, Inc., a presently
inactive solid waste
remediation firm and
developer of solid waste
co-generation projects;
from July 1992 to February
1994, President of Universal
Envirogenics, Inc., a
rebuilder of industrial
gas plants.
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<PAGE>
James L. Leuthe 54 Chairman of the Board of 1976 1997
Directors from 1977 until
1995; President and Chief
Executive Officer of the
Company February 1979 to
November 1983; Chief
Executive Officer from
November 1983 to December
1995, and a Director since
1976; Chairman of the Board
of First Lehigh
Corporation, a bank holding
company, since 1982.
Jan P. Gale 42 Vice President since 1978 1991 1996
of UPE, an international
supplier of complete
process plants and
equipment and manufacturer
of new equipment in the
United States and Europe.
Ronald H. Gale 45 President and Chief 1990 1996
Executive Officer of
UPE since 1978.
Harold Bogatz 58 Vice President and General 1995 1996
Counsel of UPE since 1987.
O. Karl Dieckmann 83 Investment manager and 1960 1997
consultant, retired for at
least the past five years.
B. Ord Houston 83 Secretary of the Company 1976 1996
from June 1983 until 1995,
otherwise retired for at
least the last five years;
held various positions with
the Company since 1966,
most recently as Executive
Vice President.
EXECUTIVE OFFICERS
Certain information about the executive officers of the Company who are
not also directors of the Company is as follows:
POSITION(S) HELD WITH REGISTRANT
NAME AGE AND BUSINESS EXPERIENCE
- ---- --- -----------------------
Antoinette L. Martin 38 Vice President and Chief Financial
Officer of the Company since October
1994; Acting Treasurer of the Company
from January to September 1994;
Controller of the Company since
February 1992; Accounting Manager of
the Company from June 1988 to February
1992.
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<PAGE>
Anthony A. Chiarella 48 Vice President of Manufacturing of the
Company since October 1994; Plant
Manager of the Company from January
1994 to September 1994; consultant to
the Company from November to December
1993. Formerly with DeDietrich USA
Inc. from June 1987 to September 1993
as operations manager, plant manager
and Vice President of Operations.
Clarence T. Lind 59 Vice President of Sales, Marketing and
Technology of the Company since
December 1995; Manager of Sales and
marketing of the Company from June to
December 1995. Formerly with the Hull
Corporation from 1986 to 1995 as Vice
President of Sales and Marketing.
Linda J. Wright 46 Vice President of Administration of
the Company since December 1995;
Executive of the Company with
responsibility for administration and
acquisitions from June 1995 to
December 1995. Formerly with Ryan
McGinn, Inc., a Washington, D.C.
public affairs firm, from 1991 to June
1995 as Vice President and Bankstar,
NA as President and CEO from 1988 to
1990.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Commission. Officers, directors and
greater then 10% shareholders are required by the Commission's regulations to
furnish the Company with copies of all Section 16(a) forms they file.
The Form 3 Initial Statement of Beneficial Ownership of Securities for
each of Anthony Chiarella and Antoinette L. Martin was filed late. Both Mr.
Chiarella and Ms. Martin became Reporting Persons on September 29, 1994 and
the Form 3 for each of them was filed on January 10, 1996.
One Form 4 Statement of Change in Beneficial Ownership of Securities
for Alan H. Silverstein relating to the grant of options to purchase 10,000
shares to Mr. Silverstein pursuant to the Company's Directors' Stock Option Plan
("Directors Option Plan") was filed late. Mr. Silverstein was granted the
options on April 12, 1994 and the Form 4 was filed on January 10, 1996.
Item 10. EXECUTIVE COMPENSATION.
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the year ended December 31, 1993, during
the five month transition period ended May 31, 1994 and the fiscal years ended
May 31, 1995 and May 31, 1996 to the Company's Chief Executive Officer and to
each of the Company's executive officers whose total salary and bonus exceeded
$100,000 during the fiscal year ended May 31, 1996 (the "Named Executive
Officers").
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------------- --------------------------------------------------
STOCK ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL OPTION COMPEN-
POSITION YEAR SALARY BONUS COMPENSATION(S) AWARDS SATION(1)
- -------- ---- ------ ----- --------------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
James L. Leuthe 1996 -- -- -- -- $672
Former Chairman and
Chief Executive
Officer(2)
Alan H. Silverstein 1996 118,655 46,850 7,295(4) -- 11,925
President and Chief 1995 110,000 30,698 5,472(4) -- 11,925
Executive Officer(5) 1994(3) 36,667 -- 1,824(4) 260,000 224
Clarence T. Lind 1996 90,000 26,350 4,369(4) 20,000 672
Vice President of
Sales, Marketing and
Technology(6)
</TABLE>
(1) Represents life insurance premiums paid by the Company.
(2) Mr. Leuthe was not compensated for his services during the Company's
fiscal year ended December 31, 1993, the transition period ended May
31, 1994, the Company's fiscal year ended May 31, 1995 or the Company's
fiscal year ended May 31, 1996. Mr. Leuthe resigned as Chairman of the
Board and Chief Executive Officer on December 12, 1995.
(3) Includes compensation received during the transition period January 1
to May 31, 1994.
(4) Includes lease payments and cost of insurance made by the Company with
respect to use of an automobile.
(5) Mr. Silverstein was elected President and Chief Operating Officer of
the Company in February 1994. Prior to that time, Mr. Silverstein
served as a consultant to the Company. Mr. Silverstein was appointed
Chief Executive Officer of the Company on December 12, 1995.
(6) Mr. Lind was elected Vice President of Sales, Marketing and Technology
of the Company on December 12, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted
during the fiscal year ended May 31, 1996 under the Company's stock option plans
to the Named Executive Officers.
<TABLE>
<CAPTION>
Number of Percentage of
Securities Total Options
Underlying Granted to Per Share
Name Options Granted Employees Exercise Price Expiration Date
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Clarence T. Lind 5,000 3.3% $2.50 12/21/05
15,000 10.0% $2.00 03/27/06
</TABLE>
AGGREGATED FISCAL YEAR-END OPTIONS
The following table sets forth certain information regarding unexercised
stock options held by each of the named executive officers as of May 31, 1996.
No stock options were exercised by any such officer during the fiscal year ended
May 31, 1996.
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<PAGE>
Aggregated Fiscal Year-End Option Values
Number of Unexercised Value of Unexercised
Options at May 31, in-the-money options at
1996 May 31, 1996(1)
Exercisable/ Exercisable/
NAME UNEXERCISABLE UNEXERCISABLE
Alan H. Silverstein 260,000/0 405,625/0
Clarence T. Lind 0/20,000 0/8,700
(1) On May 31, 1996, the last reported sales price of the Company's Common
Stock, as reported by the American Stock Exchange, was $2.56 per share.
COMPENSATION OF DIRECTORS
Directors are not compensated for their services as a director but are
entitled to reimbursement of expenses incurred in connection with their
attendance at all meetings.
The Company maintains the Directors Option Plan for Directors. Under
the Directors Option Plan: (i) each person who was a director of the Company on
March 21, 1991 received an option for 10,000 shares under the Directors Option
Plan and (ii) each individual who became a director of the Company after March
21, 1991 and prior to December 12, 1995 was granted an option for 10,000 shares.
The exercise price of each option granted under the Directors Option Plan is the
greater of $3.15 per share or 100% of the fair market value of a share of the
Company's Common Stock on the date the option is granted. No option granted
under the Directors Option Plan may be exercised during the six months after its
grant; thereafter, the option becomes exercisable in full. Options are not
assignable. No option may be exercised after six years from the date of grant.
Directors Salvatore Zizza and Harold Bogatz, who first became directors
on December 12, 1995, were granted an option for 10,000 shares on December 12,
1995 pursuant to the 1994 Stock Option Plan. Also, Directors Dieckman, Houston,
R. Gale, J. Gale and Leuthe were granted an option for 500 shares on December
12, 1995 pursuant to the 1994 Stock Option Plan. The option granted was at
$2.875 per share, the fair market value on that date. No option granted under
the 1994 Stock Option Plan may be exercised during the six months after its
grant; thereafter these options become exercisable as to 33-1/3 percent of the
Shares covered by the Option on the first anniversary of the date the Option was
granted and as to an additional 33-1/3 percent of the shares covered by the
Option on each of the following two (2) anniversaries of such date of grant.
EMPLOYMENT AGREEMENTS
Mr. Alan Silverstein, President and Chief Executive Officer, is
employed by the Company pursuant to an agreement (the "Employment Agreement")
dated February 1, 1994. The Employment Agreement provides for a five year term,
with automatic renewal for successive terms of two years, subject to a mutual
right, exercisable within 120 days prior to the expiration of any term, not to
renew the Employment Agreement. The salary paid to Mr. Silverstein for the first
year under the Employment Agreement is $110,000 increasing to $165,000 in the
fifth year. Mr. Silverstein is entitled to a quarterly bonus based on the
earnings of the Company, with a minimum guaranteed bonus for the first 18 months
of $30,000.
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<PAGE>
Mr. Salvatore J. Zizza, Chairman of the Board of the Company, renders
certain financial advisory services under an agreement with the Company. See
"Certain Transactions," Item 12 of this report.
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<PAGE>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
HOLDERS OF MORE THAN FIVE PERCENT BENEFICIAL OWNERSHIP
The following table sets forth, as of September 16, 1996, information
regarding all persons who are known to the Company to be the beneficial owner of
more than 5% of the Company's outstanding Common Stock.
PERCENT OF
NAME AND ADDRESS OF SHARES OWNED OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY SHARES(1)
- ---------------- ------------ ---------
James L. Leuthe 348,791(1) 16.8%
25th & Lennox Streets
Easton, PA 18045
Universal Process 2,181,600(2)(3)(4) 58.4
Equipment, Inc.
P.O. Box 338
Roosevelt, NJ 08555
Robert F. Bacigalupo 50,901(5) 7.7
2433 S. Oakley Avenue
Chicago, IL 60608
(1) Of this total, 52,281 shares are owned by Nikki, Inc., a corporation in
which Mr. Leuthe is an officer, director and the sole stockholder, 161,343
shares are owned by Mr. Leuthe, 10,000 shares are purchasable by Mr. Leuthe upon
exercise of options granted under the Directors Option Plan, 167 shares are
purchasable upon exercise of options granted under the 1994 Stock Option Plan
and 125,000 shares are purchasable pursuant to an option granted by the Company
on March 26, 1996. This total does not include 640 shares owned by Mr. Leuthe's
children, of which he disclaims beneficial ownership.
(2) Includes 1,450,000 shares issuable pursuant to an option granted to UPE by
the Company on December 22, 1993 and 350,000 shares issuable pursuant to an
option granted to UPE by the Company on March 26, 1996.
(3) According to information provided to the Company by UPE, Ronald H. Gale and
Jan Gale are officers, directors and principal stockholders of UPE, and each may
be deemed to beneficially own the shares owned by UPE. In addition to shares
they beneficially own through UPE, Ronald H. Gale individually owns 72,000
shares of Common Stock and has the right to purchase 10,000 shares upon the
exercise of options granted under the Directors Option Plan and options to
purchase 167 shares granted pursuant to the 1994 Stock Option Plan. Jan Gale
individually owns 70,000 shares and has the right to purchase 10,000 shares upon
the exercise of options granted under the Directors Option Plan and options to
purchase 167 shares granted pursuant to the 1994 Stock Option Plan. Each
individual disclaims beneficial ownership of the shares individually owned by
the other.
(4) Information obtained from Amendment No. 1 to Schedule 13D which was filed
with the Securities and Exchange Commission on or about December 23, 1993.
(5) Of this total, 140,901 shares are owned by Mr. Bacigalupo and 10,000 shares
are purchasable upon the exercise of options granted under the Director Option
Plan. This total does not include 2,331 shares owned by Mr. Bacigalupo's wife,
1,000 shares held in trust for the benefit of his son and 5,000 shares held in
trust for the benefit of his mother. Mr. Bacigalupo is
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<PAGE>
the trustee of the two trusts, and he disclaims beneficial ownership of these
8,331 shares.
BENEFICIAL OWNERSHIP BY MANAGEMENT AND DIRECTORS
The following table sets forth, as of September 16, 1996, information
regarding the ownership of the outstanding Common Stock of the Company for each
director and each Named Executive Officer and all directors and executive
officers of the Company as a group.
Name of Beneficial Shares Owned Percent of
Owner Beneficially Outstanding Shares
- ------------------------------------ ------------- -------------------
James L. Leuthe(1)(2) 348,791 16.8%
Alan H. Silverstein (3) 93,334 4.6
O. Karl Dieckmann (2) 42,853 2.2
Ronald H. Gale (2) (4) 2,263,767 60.4
Jan Gale (2) (4) 2,261,767 60.3
B. Ord Houston (2) 20,032 1.0
Salvatore J. Zizza (5) 178,334 8.4
Harold Bogatz (6) 3,334 *
Clarence T. Lind 4,000 *
All directors and executive 3,034,612 72.4%
officers as a group (12 persons)
- ------------------
* Less than 1.0%.
(1) Reference is made to "Security Ownership of Certain Beneficial Owners and
Management - Holders of More Than Five Percent Beneficial Ownership."
(2) Includes 10,000 shares issuable pursuant to options exercisable within 60
days of the date hereof pursuant to the terms of the 1991 Directors Option Plan
and options to purchase 167 shares granted pursuant to the 1994 Stock Option
Plan.
(3) Consists of 83,334 shares issuable pursuant to options granted under the
terms of the 1994 Stock Option Plan and 10,000 shares issuable pursuant to
options granted under the Directors Option Plan exercisable within 60 days of
the date hereof.
(4) Includes 2,181,600 shares beneficially owned by UPE, in which the individual
is an officer, director and principal shareholder. See "Security Ownership of
Certain Beneficial Owners and Management - Holders of More Than Five Percent
Beneficial Ownership."
(5) Consists of shares issuable pursuant to options exercisable within 60 days
of the date hereof pursuant to the terms of the 1994 Stock Option Plan and
175,000 shares issuable pursuant to an option granted by the Company on March
26, 1996 exercisable within 60 days of the date hereof.
(6) Consists of shares issuable pursuant to options exercisable within 60 days
of the date hereof pursuant to the terms of the 1994 Stock Option Plan.
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<PAGE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CERTAIN TRANSACTIONS
Ronald H. Gale and Jan Gale are directors and stockholders of the
Company and are officers, directors and principal stockholders of UPE, a
corporation which is a stockholder of the Company. UPE and/or Ronald H. Gale
and/or Jan Gale are also majority stockholders or otherwise affiliated with
other companies that engage in transactions with the Company. UPE and related
entities purchased processing equipment manufactured by the Company as well as
utilized the Company's remanufacturing services. The approximate total revenues
derived from sales to UPE and related parties were $1.1 million for the fiscal
year ended May 31, 1996 and $2.4 million for the fiscal year ended May 31, 1995.
The terms of such sales were at least as favorable to the Company as could have
been obtained from unaffiliated third parties.
On December 22, 1993, UPE was granted 300,000 shares of the Company's
Common Stock and an option to purchase an additional 1,450,000 shares pursuant
to an agreement (the "UPE Agreement") between the Company and UPE. Such stock
was granted in consideration of UPE's (1) services in structuring and
negotiating a settlement agreement among The Harrisburg Authority
("Harrisburg"), the Company and UPE with respect to a judgment in the amount of
$2,127,071 which Harrisburg had obtained against the Company; (ii) payments on
behalf of the Company to Harrisburg under the settlement agreement; (iii)
providing a guaranty of and surety for the Company's full and timely payment to
Harrisburg of $650,000 in specified installments; and (iv) granting to
Harrisburg security interests in certain equipment held for sale by UPE and in a
percentage of the proceeds from the sale of such equipment in the ordinary
course of UPE's business. The 300,000 shares issued to UPE were valued by the
Company at $.75 per share, or a total of $225,000. Such shares were issued
because it was the belief of UPE and the Company that, without such settlement,
the Company would be forced to declare bankruptcy, particularly since UPE and
the Company did not believe that the Company could receive financing from
another entity. The Company and UPE also considered the cost of a bankruptcy
proceeding and the likelihood that the Company would survive a Chapter 11
proceeding.
The options to purchase 1,450,000 shares were granted in exchange for
payments made by UPE on behalf of the Company to Harrisburg under the settlement
agreement instead of reimbursing UPE in cash. The rates of exchange are as
follows: three (3) shares issued for each $1.00 in payment made by UPE, up to a
total of option to purchase 450,000 shares in exchange for a total of $150,000
in payments, and after such total of $450,000 shares has been reached, two (2)
shares issued for each additional $1.50 in payment made by UPE up to a total of
options to purchase 1,000,000 additional shares in exchange for a total of
$750,000 in additional payments.
On March 26, 1996, the Company issued an option to purchase 350,000
shares of Common Stock to UPE. The option is exercisable beginning October 1,
1996 for a period of ten years from the date of the grant at an exercise price
of $1.8125. Such an option was issued in consideration of guarantees of new
sources of financing from the CIT Group and Sterling Commercial Capital in July
1995.
The Board of Directors has authorized the issuance of 350,000 shares of
the Company's Common Stock to UPE in consideration for a fifty percent interest
in certain resale inventory. The inventory has a retail sales value in excess of
$1,500,000 and consists of filtration, drying and other process equipment. The
specific inventory is currently being catalogued and the shares of Common Stock
will be issued once the cataloguing is complete. The Company will work jointly
with UPE on the marketing and selling of this inventory.
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<PAGE>
As of June 1, 1996 the Company begins a three year profit sharing
arrangement with UPE. This arrangement was agreed upon as consideration for
UPE's role in identifying, introducing, screening and negotiating the
acquisition of the assets of the American Furnace Division of Third Millennium
Products, Inc. by BAM and their role in originating, negotiating, developing and
assisting in the marketing of the Tower Filter Press product line. Under this
arrangement which expires in May, 1999, UPE is entitled to receive 25% of the
net pre-tax profits of BAM and the Tower Filter Press product line.
Beginning in July 1993 through January 1994, Alan H. Silverstein was
retained as a consultant to the Company. In that capacity he played a key
advisory role in the structure and negotiation of the final settlement agreement
with the Harrisburg Authority and the resolution of several other potential
litigation matters. Mr. Silverstein was paid $69,939 in consulting fees and
expenses for services during that time.
The Company and Salvatore J. Zizza, Chairman of the Board of the
Company, are parties to an agreement under which Mr. Zizza renders certain
financial advisory services, including those relating to proposed mergers and
acquisitions and equity and debt financing, and relations with the financial
community and investors. Mr. Zizza receives compensation in the amount of
$60,000 per annum.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE BETHLEHEM CORPORATION
Dated: September 25, 1996 By:/s/ Alan H. Silverstein
-----------------------
Alan H. Silverstein
President and Chief
Executive Officer
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