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, 1997.
/ / 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
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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. /X/
State issuer's revenues for its most recent fiscal year: $17,916,000.
As of August 22, 1997, 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 $2,027,074 based on the average of the bid and
asked price on that date of $2.00.
<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:
<TABLE>
<CAPTION>
Year First Became
NAME AGE PRINCIPAL OCCUPATION a Director
- ---- --- -------------------- ---------------------
<S> <C> <C> <C>
Salvatore J. Zizza 51 Chairman of the Board of 1995
Directors since 1995; Chairman
(from 1991 to July 1997) and
Executive Vice President and
Treasurer (since July 1997) of
The Lehigh Group, a public
company listed on the New York
Stock Exchange with subsidiaries
in the distribution of electrical
products
Alan H. Silverstein 48 President and Chief Executive 1994
Officer of the Company since
December 1995; President and
Chief Operating Officer of the
Company from February 1994 to
November 1995; from July 1992
to February 1994, President of
Universal Envirogenics, Inc., a
rebuilder of industrial gas plants
James L. Leuthe 55 Chairman of the Board of First 1976
Lehigh Corporation, a bank
holding company, since 1982;
from 1977 until 1995 held
various positions with the
Company, including most
recently President and Chief
Executive Officer
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Year First Became
NAME AGE PRINCIPAL OCCUPATION a Director
- ---- --- -------------------- ---------------------
<S> <C> <C> <C>
Jan P. Gale 43 Vice President since 1978 of 1991
UPE, an international supplier of
complete process plants and
equipment and manufacturer of
new equipment in the United
States and Europe
Ronald H. Gale 46 President and Chief Executive 1990
Officer of UPE since 1978
Harold Bogatz 59 Vice President and General 1995
Counsel of UPE since 1987;
Secretary of the Company since
1996
O. Karl Dieckmann 84 Investment manager and 1960
consultant, retired for at least the
past five years
B. Ord Houston 84 Secretary of the Company from 1976
June 1983 to December 1995,
otherwise retired for at least the
last five years; held various
positions with the Company since
1966, most recently as Executive
Vice President
</TABLE>
Item 10. EXECUTIVE COMPENSATION.
The following table summarizes compensation information for the
Company's President and Chief Executive Officer and Clarence T. Lind, the only
other executive officer of the Company whose compensation exceeded $100,000 for
the fiscal year ended May 31, 1997. The table presents for such individuals
information with respect to compensation paid or accrued by the Company for
services rendered during the fiscal years ended May 31, 1995, 1996 and 1997.
Messrs. Silverstein and Lind are collectively referred to herein as the "Named
Executive Officers."
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Fiscal Year Compensation Long Term Compensation
--------------------------------------- ------------------------------
Stock
Name and Other Annual Option All Other
Principal Position Year Salary Bonus Compensation(s) Awards Compensation(1)
- ---------------------- ------------- -------- -------- ------------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Silverstein 1997 $140,441 $83,570 $ 7,295(3) -- 11,925
President and Chief 1996 118,655 46,850 7,295(3) -- 11,925
Executive Officer(2) 1995 110,000 30,698 5,472(3) -- 11,925
Clarence T. Lind
Vice President of 1997 99,000 25,907 4,369(3) -- 672
Sales, Marketing and 1996 90,000 26,350 4,369(3) 20,000 672
Technology(4)
</TABLE>
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(1) Represents life insurance premiums paid by the Company.
(2) Mr. Silverstein was elected President and Chief Operating Officer of
the Company in February 1994 and was appointed Chief Executive Officer
of the Company on December 12, 1995.
(3) Represents lease and insurance payments made by the Company with
respect to use of an automobile.
(4) Mr. Lind was elected Vice President of Sales, Marketing and Technology
of the Company on December 12, 1995.
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted during the 1997 Fiscal Year to any Named
Executive Officers.
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<PAGE>
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, 1997. No stock options were exercised by any Named Executive Officer during
the 1997 Fiscal Year.
AGGREGATED FISCAL YEAR-END OPTION VALUES
Number of Value of Unexercised
Unexercised Options in-the-Money Options
at May 31, 1997 at May 31, 1997 ($)(1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
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Alan H. Silverstein 260,000/0 234,375/0
Clarence T. Lind 3,334/16,666 1,250/0
James L. Leuthe 334/125,000 0/7,813
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(1) On May 31, 1997, the last reported sale price of the Common Stock, as
reported by the American Stock Exchange, was $1.875 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. In the past the Company has granted options to
certain directors.
EMPLOYMENT AGREEMENTS
Alan H. 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>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of September 26, 1997, information
regarding ownership of the outstanding Common Stock of the Company by (i) all
persons who are known to the Company to be the beneficial owner of more than 5%
of the Common Stock; (ii) each director and Named Executive Officer (as such
term is hereinafter defined); and (iii) all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
Percentage of
Name and Address of Beneficial Owner* Shares Owned Beneficially(1) Outstanding Shares
- ---------------------------------------------- --------------------------------- ------------------------
<S> <C> <C>
Universal Process 2,181,600(2)(3) 58.4%
Equipment, Inc.
P.O. Box 338
Roosevelt, NJ 08555
Ronald H. Gale 2,263,934(4)(5) 60.4
Jan Gale 2,261,934(4)(5) 60.3
James L. Leuthe 338,958(6)(10) 16.4
Robert F. Bacigalupo 140,901(7) 7.2
2433 S. Oakley Avenue
Chicago, IL 60608
Alan H. Silverstein 260,000(8) 11.8
Salvatore J. Zizza 184,667(9) 8.7
O. Karl Dieckmann 33,020(10) 1.7
B. Ord Houston 10,199(10) (11)
Harold Bogatz 6,667(12) (11)
Clarence T. Lind 7,334(13) (11)
All directors and executive officers as a 3,192,381(14) 73.4%
group (12 persons)
</TABLE>
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* Unless otherwise noted the address of the Beneficial Owner is c/o the
Company, 25th & Lennox Streets, Easton, Pennsylvania 18045.
(1) All persons identified below as holding options are deemed to be beneficial
owners of shares of Common Stock subject to such options by reason of their
right to acquire such shares within 60 days after September 26, 1997.
(2) Includes 1,800,000 shares subject to options. See "Certain
Relationships and Transactions."
(3) Does not include shares owned by Ronald H. Gale and Jan P. Gale.
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<PAGE>
(4) Includes 10,334 shares subject to options.
(5) Includes 2,181,600 shares beneficially owned by UPE, of which the individual
is an officer, director and principal stockholder.
(6) Of this total, 52,281 shares are owned by Nikki, Inc., a corporation of
which Mr. Leuthe is an officer and director and the sole stockholder, 161,343
shares are owned by Mr. Leuthe and 125,334 shares are subject to options. This
total does not include 640 shares owned by Mr. Leuthe's adult children, as to
which he disclaims beneficial ownership.
(7) This total does not include 2,331 shares owned by Mr. Bacigalupo's wife and
6,000 shares held in trust for the benefit of family members as to which Mr.
Bacigalupo acts as trustee. Mr. Bacigalupo disclaims beneficial ownership of
these 8,331 shares.
(8) Consists of 260,000 shares subject to options.
(9) Consists of 184,667 shares subject to options.
(10) Includes 334 shares subject to options.
(11) Less than 1.0%.
(12) Consists of 6,667 shares subject to options.
(13) Includes 3,334 shares subject to options.
(14) Includes 2,408,006 shares subject to options.
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<PAGE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Ronald H. Gale and Jan Gale are directors and Shareholders of the
Company and are officers, directors and principal stockholders of UPE, a
principal Shareholder of the Company. UPE and/or Ronald H. Gale and/or Jan Gale
are also majority shareholders or otherwise affiliated with other companies that
engage in transactions with the Company. UPE and related entities have purchased
process equipment manufactured by the Company and have utilized the Company's
remanufacturing services. The approximate total revenues derived from sales to
UPE and related parties was $76,000 for the fiscal year ended May 31, 1997. The
Board of Directors believes that the terms of such sales were at least as
favorable to the Company as could have been obtained from unaffiliated third
parties.
On March 26, 1996, the Company granted an option to purchase 350,000
shares of Common Stock to UPE at an exercise price of $1.8125 per share. Such
option was issued in consideration for guarantees by UPE of borrowings by the
Company from the CIT Group and Sterling Commercial Capital in July 1995. The
financing from the CIT Group consists of a three year $5 million maximum line of
credit and term loan facility, secured by a third lien position on Company owned
real estate and a first lien on substantially all other owned assets of the
Company. The grant of such option is subject to shareholder approval.
The Board of Directors has authorized the issuance to UPE of 350,000
shares of Common Stock in consideration for a 50% ownership interest in certain
resale inventory, which consists primarily of heat transfer equipment owned by
UPE. The Company has an independent appraisal stating that the inventory has a
retail sales value in excess of $1,500,000. The issuance of such shares is
subject to shareholder approval.
From time to time in the ordinary course of business, UPE advances
funds to the Company to enable the Company to meet certain temporary cash
requirements. The interest rate on the advances is prime rate (Chase Bank New
York) plus 1%. In August 1996, UPE advanced $250,000 to the Company. UPE
advanced an additional $250,000 to the Company in October 1996. As of September
29, 1997, both advances remained outstanding.
On February 28, 1997, the Company purchased a complete two stage
environmental thermal process system in Alberta, Canada. In order to effect the
acquisition of the equipment, the Company borrowed $225,000 from UPE at an
interest rate of prime rate (Chase Bank, New York) plus 2.5%. This loan will be
repaid from the proceeds of the sale of the specific equipment purchased.
As of June 1, 1996, the Company began a three year profit sharing
arrangement with UPE. This arrangement was agreed upon as consideration for
UPE's role in introducing the Company to Third Millenium Products, Inc.
("Millenium"), assisting in negotiating the acquisition of the assets of the
American Furnace Division of Millenium by Bethlehem Advanced Materials
Corporation ("BAM"), a wholly-owned subsidiary of the Company, and UPE's role in
originating, negotiating, developing and assisting in the marketing of the Tower
Filter Process product line. Under this arrangement, which expires in May 1999,
UPE is entitled to receive 25% of the pre-tax profits of BAM and the Tower
Filter Press product line.
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 29, 1997 By:/S/ Alan H. Silverstein
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Alan H. Silverstein
President and Chief
Executive Officer
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