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 September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-6867
LYNTON GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 13-2688055
(State or other jurisdiction I.R.S. Employer
of incorporation or Identification
organization) Number)
9 Airport Road
Morristown Municipal Airport
Morristown, New Jersey 07960
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (973)292-9000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($.30 par value)
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. [ ]
As of December 31, 1997, the aggregate market value of the Common
Stock held by non-affiliates of the Registrant (1,075,486 shares) was
approximately $1,209,922 (based upon the average bid and asked prices
of such stock on December 18, 1997, the most recent date on which bid
and ask prices were available). The number of shares outstanding of
the Common Stock ($.30 par value) of the Registrant as of the close
of business on December 31, 1997 was 6,394,872.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
<PAGE>
EXPLANATORY NOTE
Lynton Group, Inc. is filing this Amendment No. 1 on Form 10-K/A to
the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997 solely for the purpose of filing the Part III
information.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Set forth below are the present directors and executive officers of
the Company. Note that there are no other persons who have been nominated
or chosen to become directors nor are there any other persons who have been
chosen to become executive officers. Directors are elected to serve until
the next annual meeting of stockholders and until their successors have
been elected and have qualified. Officers are appointed to serve until the
meeting of the Board of Directors following the next annual meeting of
stockholders and until their successors have been elected and qualified.
Present
Position Has Served as
Name Age and Offices Director Since
Christopher Tennant 47 President, Chief 1985
Executive Officer
and Director
Paul R. Dupee, Jr. 54 Chairman of the Board 1996
and Director
David Harland 47 Vice President of 1998
Business Development,
Deputy Chief Executive
Officer and Director
Richard Hambro 52 Director 1989
James G. Niven 52 Director 1989
Nigel D. Pilkington 46 Director 1996
Ian J. Borrowdale 58 Vice President --
of International
Operations and
Chief Operating
Officer
Paul A. Boyd 35 Principal Financial --
Officer, Secretary
and Treasurer
CHRISTOPHER TENNANT has been a Director of the Company since November
1985 and became President and Chief Executive Officer in May 1989 upon the
Company's acquisition of Lynton Group Limited. From 1985 to 1988, Mr.
Tennant also was the Company's Treasurer and Chief Financial Officer. For
more than the last five years, Mr. Tennant has served as Managing Director
of Lynton Group Limited, the Company's wholly-owned subsidiary.
PAUL R. DUPEE, JR. has been a Director of the Company since April 1996
and was appointed Chairman of the Board in January 1998. From September
1983 to November 1996, Mr. Dupee was Vice-Chairman of the Board of
Directors and a Director of Celtics, Inc., the corporate general partner
of Boston Celtics Limited Partnership which owns and operates the Boston
Celtics professional basketball team of the National Basketball
Association. Since 1986, Mr. Dupee has been a private investor.
DAVID HARLAND has been a Director of the Company since January 1998.
In addition, he has been Vice President of Business Development and Deputy
Chief Executive Officer since January 1998. From 1991 through 1997, Mr.
Harland was with Fairway Group PLC ("Fairway Group"), initially as managing
director of its subsidiary, GLS Fairway, and then its Chairman as well as
becoming director of finance and development of Fairway Group. He also
presently serves as a director of two UK publicly quoted companies,
Mayflower Corporation PLC and Wyefield Group PLC.
RICHARD HAMBRO has been a Director of the Company since May 1989. He
was Chairman of the Board from May 1989 to February 1994 and from January
1997 to January 1998, and Co-Chairman from February 1994 to January 1997.
Since 1988, Mr. Hambro has been an Executive Director of J.O. Hambro &
Company Limited, a London based investment banking firm. From 1978 to
1986, he was a Director of Hambros Bank in London. Mr. Hambro has also
served as a Director and Chairman of Lynton Group Limited since 1982. He
also presently serves as a director of various other closely held companies
and non-U.S. public companies.
JAMES G. NIVEN has been a Director of the Company since May 1989.
From February 1994 to January 1997, he was also Co-Chairman of the Board.
Since 1982, he has been a general partner of Pioneer Associates Company, a
venture capital investment company. He is currently a Senior Vice
President of Sotheby's. Mr. Niven is a director of Lincoln Snacks
Company, Tatham Offshore, Inc. and HealthPlan Services. He is also a member
of the Board of Managers of Memorial Sloan-Kettering Cancer Center, and a
trustee of the Museum of Modern Art and the National Center for Learning
Disabilities, Inc.
NIGEL D. PILKINGTON has been a Director of the Company since December
1996. Since 1991, Mr. Pilkington has been an executive director of
Consulta Limited, an investment management organization. Prior thereto and
from 1983 to 1991, he was with CS First Boston Group ("CSFB"), initially as
a manager of the equity division in London and then as managing director of
the European equity sales and trading of CSFB in London. Mr. Pilkington is
also a non-executive director of Blakeney Management Limited, Oryx Fund
Limited and Oryx (India) Fund Limited.
IAN J. BORROWDALE has been Vice President of International Operations
of the Company since January 1991 and Chief Operating Officer since May
1995. Mr. Borrowdale is a director of European Helicopters Limited and
was, from 1987 to 1988, its technical director and, from 1988 to 1990, its
Managing Director. Prior thereto and from 1981 to 1987, Mr. Borrowdale was
employed as the technical director of McAlpines Helicopters Limited, a
United Kingdom helicopter maintenance organization.
PAUL A. BOYD has been Principal Financial Officer, Secretary and
Treasurer of the Company since January 1997 having been Financial
Controller of Lynton Group Limited, the Company's wholly-owned subsidiary,
since March 1994. Prior thereto, and from 1989 to 1994, he was employed by
Dollar Air Services Limited as Chief Accountant.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, during the
fiscal year ended September 30, 1997, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial
owners were complied with except that Task (USA) Inc. failed to file one
report relating to one transaction.
Item 11. Executive Compensation
The following summary compensation table sets forth information
concerning the annual and long-term compensation for services in all
capacities to the Company for the fiscal years ended September 30, 1997,
1996 and 1995, of those persons who were, at September 30, 1997 (i) the
chief executive officer and (ii) the other most highly compensated
executive officers of the Company, whose annual base salary and bonus
compensation was in excess of $100,000 (the named executive officers):
Summary Compensation Table
Annual
Compensation
Name and Principal Fiscal
Position Year Salary Bonus
Christopher Tennant 1997 $149,715(1) $0
President and Chief 1996 $144,000(1) $50,000(2)
Executive Officer 1995 $144,000(1) $0
Ian J. Borrowdale 1997 $157,478 $0
Vice President 1996 $143,784 $0
of International 1995 $127,227 $0
Operations and
Chief Operating
Officer
Long-Term
Compensation
Awards
Name and Principal Fiscal Options All Other
Position Year (shares) Compensation
Christopher Tennant 1997 0 $36,000(3)
President and Chief 1996 0 $10,000(4)
Executive Officer 1995 0 $ 8,323(4)
Ian J. Borrowdale 1997 32,000 $ 5,654(4)
Vice President 1996 0 $ 5,423(4)
of International 1995 0 $ 5,000(4)
Operations and
Chief Operating
Officer
______________________
(1) In addition, Lynton International Limited ("Lynton International"), a
company wholly-owned by Mr. Tennant, was paid $51,000, $46,000 and
$48,000 during fiscal 1997, 1996 and 1995, respectively, for office
space in London rented to the Company. At September 30, 1995, the
Company also had a non-interest bearing receivable from Lynton
International in the amount of $191,308. This amount was written off
in fiscal 1996 pursuant to a resolution of the Board of Directors.
(2) Mr. Tennant was awarded a cash bonus earned for fiscal 1996, $25,000
of which was paid in December 1996 and $25,000 of which was paid in
July 1997.
(3) Represents $11,000 contributed by the Company under the Company's
savings plan and certain expenses of Mr. Tennant in the sum of $25,000
which were paid by the Company.
(4) Represents amounts contributed by the Company under the Company's
savings plans.
Stock Options Granted in Fiscal 1997
The following table sets forth information concerning individual
grants of stock options made during fiscal 1997 to each of the persons
named in the Summary Compensation Table.
Options Granted in Fiscal 1997
Number of Percent of Total
Securities Options Granted
Underlying to Exercise or
Options Employees in Base Price
Name Granted Fiscal Year ($/Sh)
Christopher Tennant 640,000 91.0% $.50
Ian J. Borrowdale 32,000 4.5% $.50
Market
Price
on
Date of Expiration
Name Grant(1) Date
Christopher Tennant $80,000 8/15/2002
Ian J. Borrowdale $ 4,000 8/15/2002
_______________________
(1) Based on the average of the closing bid and asked prices of the Company's
Common Stock on the most recent date on which bid and asked prices were
available on or prior to the date of grant. The actual value, if any, an
optionee will realize upon exercise of an option will depend on the excess
of the market value of the Common Stock over the exercise price on the
date the option is exercised.
Stock Options Exercised in Fiscal 1997;
Fiscal Year-End Values
The following table set forth certain information as to each exercise
of stock options during the fiscal year ended September 30, 1997 by the
persons named in the Summary Compensation Table and the fiscal year-end
value of unexercised options:
Aggregated Option Exercises in Fiscal 1997 and Year-End Option Value
Number of Securities
Shares Underlying Unexercised
Acquired Options at 9/30/97
On Value
Exercise Realized Exercisable Unexercisable
Christopher Tennant -0- -0- 640,000 -0-
Ian J. Borrowdale -0- -0- 48,667 -0-
Aggregated Option Exercises in Fiscal 1997 and Year-End Option Value
Value of Unexercised
In-the-Money Options
at 9/30/97(1)
Exercisable Unexercisable
Christopher Tennant $560,000 -0-
Ian J. Borrowdale $ 28,000 -0-
_______________________
(1) Realizable values are reported net of the option exercise price but
before any income taxes that the executive may have to pay. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock as well as the option holder's
continued employment. The amounts reflected in this table may never be
obtained.
Compensation of Directors
Since inception, no director has received any cash compensation for
his services as such. However, in fiscal 1997, the Company recognized an
expense of $48,000, $12,000 per non-employee director, for the payment of
directors fees. At September 30, 1997, services provided by the Company to
such directors totaling approximately $33,000 were applied to this accrual.
However, no cash payments have been made for any of the remaining amounts
due.
In the past, directors have been and will continue to be reimbursed
for reasonable expenses incurred on behalf of the Company.
Employment Contracts
Christopher Tennant, President and Chief Executive Officer of the
Company, is employed pursuant to an employment agreement expiring March 31,
1998 at an annual base salary of $180,000 plus annual cost-of-living
adjustments. The term of the agreement may be extended for an additional
three years under certain conditions relating to a merger or change of
control of the Company. In addition, the agreement provides for the
payment of bonus compensation based upon certain financial performance
levels being achieved.
Compensation Committee Interlocks and Insider Participation
In February 1994, the Board of Directors formed a Compensation
Committee, the current members of which are Richard Hambro, Paul R. Dupee,
Jr. and Nigel D. Pilkington. Mr. Hambro and Mr. Dupee served thereon
throughout the fiscal year ended September 30, 1997 while Mr. Pilkington
was appointed to the Compensation Committee in December 1996. Prior to
December 1996, James G. Niven, a director of the Company, also served on
the Compensation Committee. Since January 1998, Mr. Dupee has been Chairman
of the Board. From February 1994 to January 1997, Mr. Hambro and Mr. Niven
were Co-Chairman of the Board of Directors, and from January 1997 to
January 1998, Mr. Hambro was sole Chairman. Messrs. Dupee, Hambro and
Niven received no compensation during fiscal 1997 for service in such
capacities. Prior to February 1994, Mr. Hambro also served as Chairman of
the Board from May 1989 to February 1994. Mr. Pilkington is a non-officer
director and is not an employee or former or current officer of the Company
or any of its subsidiaries. See Part III, Item 13 for information on
certain transactions involving the foregoing persons.
During the fiscal year ended September 30, 1997, no executive officer
of the Company served as a director or a member of the Compensation
Committee (or other board committee performing equivalent functions) of
another entity one of whose executive officers served on the Compensation
Committee or the Board of Directors of the Company.
Stock Option Plan
In August 1993, the Board of Directors of the Company adopted the 1993
Stock Option Plan (the "1993 Plan") for employees, officers, consultants or
directors of the Company or its subsidiaries to purchase up to 250,000
shares of Common Stock of the Company. Stockholder approval was obtained
in June 1994. Options granted under the 1993 Plan may either be "incentive
stock options" as defined in Section 422 of the Internal Revenue Code, or
non-statutory stock options. Under the terms of the 1993 Plan,
participants may receive options to purchase Common Stock in such amounts
and for such prices as may be established by the Board of Directors or the
committee appointed by the Board, provided, however, that any incentive
stock options granted under the 1993 Plan shall be granted at no less than
100% of the fair market value of the Common Stock of the Company at the
time of grant. As of September 30, 1997, options to acquire 23,335 shares
of Common Stock have been granted under the 1993 Plan and 226,665 options
were available for future grant.
In addition to options granted under the 1993 Plan, in August 1997,
the Company granted non-statutory stock options to certain officers and key
employees for a total of 704,000 shares, all of which are immediately
exercisable at $.50 per share.
Savings Plans
The Company has a voluntary savings plan covering substantially all of
its employees in the United States. The plan qualifies under Section
401(k) of the Internal Revenue Code. Pursuant to the plan, eligible
employees may elect to contribute up to 15% of their salaries to an
investment trust. Effective October 1, 1990, the Company contributes an
amount equal to 100% of the first 4% of employee contributions. In
addition, the Company has a voluntary savings plan covering eligible
employees of its subsidiaries in the United Kingdom pursuant to which
eligible employees may elect to contribute up to 17 1/2% of their salaries
to an investment trust. The Company contributes an amount equal to 100% of
the first 4% of employee contributions. During the fiscal year ended
September 30, 1997, contributions made under such savings plans by
the Company were $11,000 and $5,654 for Messrs. Tennant and Borrowdale,
respectively.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of December 15, 1997, (i) the
number of shares of Common Stock owned of record or beneficially, or both,
by each person who owned of record, or is known by the Company to have
beneficially owned, individually, or with his associates, more than 5% of
such shares then outstanding; (ii) the number of shares owned beneficially
by each Director of the Company and each executive officer of the Company
named in the Summary Compensation Table; and (iii) the number of shares
owned beneficially by all Directors and executive officers as a group. The
following information does not include any shares which may be issued upon
conversion of certain debt financing described in Item 13 below. Except as
otherwise indicated below, each of the persons listed below has sole voting
and investment power with respect to his or her shares.
Amount and Nature Percent
Name of Beneficial Owner of Beneficial Ownership of Class
Consulta Special Funds Limited 1,898,788(1) 29.7%
Paul R.Dupee, Jr. 1,348,485(2) 21.1%
Task (USA) Inc. 1,026,936(3) 16.1%
Brae Group, Inc. 410,776(4) 6.4%
Christopher Tennant 871,132(5) 12.4%
James G. Niven 434,944(6) 6.8%
Richard Hambro 345,390(7) 5.4%
Nigel D. Pilkington 1,899,288(8) 29.7%
Ian J. Borrowdale 95,214(9) 1.5%
Louis Marx, Jr. 410,776(10) 6.4%
David Harland -- --
All Executive Officers
and Directors as a Group 4,994,453(11) 70.4%
(1) The address for Consulta Special Funds Limited is St. Julian's Avenue,
Guernsey, Channel Islands.
(2) The address for Paul R. Dupee, Jr. is 10 Wilton Row, London, England.
(3) The address for Task (USA) Inc. is 30 Rockefeller Plaza, New York, New
York.
(4) The address for Brae Group, Inc. is 1101 Richmond Avenue, Houston,
Texas.
(5) Includes 220,000 shares held by Christopher Tennant, 11,132 shares
held by Lynton International Limited, a company organized under the
laws of England ("Lynton International") and 640,000 shares which Mr.
Tennant has the right to acquire within 60 days pursuant to the
exercise of stock options. Mr. Tennant is the sole shareholder of
Lynton International and, by virtue of such ownership, Mr. Tennant may
be deemed the beneficial owner of the shares held by Lynton
International.
(6) Includes 423,276 shares held by Mr. Niven, 5,000 shares owned by a
foundation for which Mr. Niven serves as a trustee and a director and
6,668 shares which Mr. Niven has the right to acquire within 60 days
pursuant to the exercise of stock options. The address for Mr. Niven
is 1334 York Avenue, New York, New York.
(7) Includes 66,667 shares held by BMB-H Investment Company Limited, a
Jersey corporation ("BMB-H") which is 25% owned and controlled by J.O.
Hambro & Company Limited, a corporation organized under the laws of
England ("J.O. Hambro"). Richard Hambro is an Executive Director of
J.O. Hambro and, by virtue of such status, may be deemed to be a
controlling person of BMB-H and beneficial owner of the shares held by
BMB-H. Mr. Hambro disclaims beneficial ownership of the shares held
by BMB-H. Also, includes 205,388 shares held by J.O. Hambro Nominees
Limited, 66,667 shares held by J.O. Hambro Investment Management Ltd.
and 6,668 shares which Mr. Hambro has the right to acquire within 60
days pursuant to the exercise of stock options.
(8) Includes 500 shares held by the wife of Mr. Pilkington and 1,898,788
shares held by Consulta Special Funds Limited ("Consulta"). Mr.
Pilkington is a director of Consulta and may be deemed to have
beneficial ownership of such shares. Mr. Pilkington disclaims
beneficial ownership of the shares held by Consulta except to the
extent of his pecuniary interest therein. The address for Mr.
Pilkington is 20 St. James's Street, London, England.
(9) Includes 46,547 shares held by Mr. Borrowdale and 48,667 shares which
Mr. Borrowdale has the right to acquire within 60 days pursuant to the
exercise of stock options.
(10) Consists of 410,776 shares held by Brae Group, Inc. ("Brae"). Louis
Marx, Jr. owns the majority of the voting securities of Brae and may
therefore be deemed to beneficially own the shares held by Brae. The
address for Mr. Marx is 667 Madison Avenue, New York, New York.
(11) Includes 702,003 shares which present officers and directors have the
right to acquire within 60 days pursuant to the exercise of stock
options.
Item 13. Certain Relationships and Related Transactions
During fiscal 1997, the four holders of all of the then outstanding
shares of Series C Convertible Preferred Stock (the "Series C Preferred
Stock") agreed (effective retroactively to September 30, 1996) to convert
all of the Series C Preferred Stock into an aggregate of 2,053,876 shares
of Common Stock. Two of such holders were James G. Niven, a director of
the Company, and J. O. Hambro Nominees Limited, which may be deemed to be
controlled by Richard Hambro, a director of the Company.
In addition, in fiscal 1997, two holders (Paul R. Dupee, Jr. and
Consulta Special Funds Limited) of the Company's 10% Senior Subordinated
Convertible Debentures due December 31, 1998 (the "1998 Debentures") agreed
to convert the 1998 Debentures held by them (in the principal amount of
$1,065,000) into 3,227,273 shares of Common Stock (effective retroactively
to September 30, 1996). Paul R. Dupee, Jr. is Chairman of the Board and a
director of the Company. The shares held by Consulta Special Funds Limited
may be deemed to be beneficially owned by Nigel D. Pilkington, a director
of the Company.
See Part III, Item 11 for information on the employment agreement
entered into with Christopher Tennant.
Pursuant to an oral agreement, the Company rents office space in
London from Lynton International Limited, a company organized under the
laws of England which is wholly-owned by Christopher Tennant, the Company's
President, Chief Executive Officer and a Director. For the year ended
September 30, 1997, rental expense for this space was $51,000.
In December 1997, the Company acquired through Lynton Group Limited,
a wholly-owned subsidiary of the Company, all of the issued and outstanding
shares of capital stock (the "Magec Shares") of Magec Aviation Limited
("Magec") for a purchase price of 17,000,000 Pounds Sterling paid in cash.
The funds used to purchase the Magec Shares included bank financing in the
principal amount of 12,800,000 Pounds Sterling with the balance of purchase
price from debt financing obtained from certain directors and principal
stockholders of the Company, and/or their affiliates, as well as other
third parties. It is anticipated that approximately $5,900,000,
representing a substantial portion of such debt financing, will be
convertible into approximately 5,900,000 shares of the Company's Common
Stock once the Certificate of Incorporation is modified to increase the
number of authorized shares of Common Stock. The Company intends to seek
stockholder approval of such modification at its next Annual Meeting of
Stockholders. In connection with the aforesaid financing, an Option
Agreement was entered into between Magec and Westbury Properties
Corporation ("Westbury"), which may be deemed an affiliate of Paul R.
Dupee, Jr., Chairman of the Board and a director of the Company, whereby
Westbury was granted an option expiring December 23, 1999 to acquire a
certain aircraft owned by Magec for the purchase price of $6,664,000.
There are no material proceedings to which any director, officer or
affiliate of the Company, any owner of record or beneficially of more than
five percent of any class of voting securities of the Company, or any
associate of any such director, officer, affiliate of the Company, or
security holder is a party adverse to the Company or any if its
subsidiaries or has a material interest adverse to the Company or any of
its subsidiaries.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1
to its Form 10-K on Form 10-K/A to be signed on its behalf by the
undersigned, thereunto duly authorized.
LYNTON GROUP, INC.
(Registrant)
By:/s/Christopher Tennant
Christopher Tennant
President and Chief Executive Officer
Date: January 28, 1998
