SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-K/A-1
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 25, 1997
---------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
-------------- --------------
Commission file number 0-5485
----------
ENVIRODYNE INDUSTRIES, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2677354
- --------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 Harger Road, Suite 190, Oak Brook, Illinois 60523
- ----------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 571-8800
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Warrants to Purchase Common Stock
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 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 March 20, 1998, the aggregate market value of the voting
stock held by non-affiliates of the registrant was $110,656,890.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes X No
----- -----
As of March 20, 1998, there were 14,812,334 shares outstanding
of the registrant's Common Stock, $.01 par value.
<PAGE>
<PAGE>
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------- --------------------------------------------------
Directors and Officers. The directors of the Company, their
----------------------
ages, principal occupations and certain other information with
respect to the directors are provided below.
<TABLE>
<CAPTION>
Name Age Principal Occupation
- --------------------- ----- ----------------------------------------------------------
<S> <C> <C>
Robert N. Dangremond 55 Mr. Dangremond has been a principal with Jay Alix &
Associates, a consulting and accounting firm specializing
in corporate restructurings and turnaround activities,
since August 1989. Since December 1997, Mr. Dangremond has
held the position of Chief Financial Officer of Zenith
Electronics Corporation, a manufacturer of televisions
("Zenith"). Previously beginning in August 1995, Mr.
Dangremond has held the positions of interim Chief
Executive Officer and President of Forstmann & Company,
Inc. ("Forstmann"), a producer of clothing fabrics. Mr.
Dangremond was Chairman of the Board, President and Chief
Executive Officer of AM International, Inc. ("AMI"), a
provider of graphics arts equipment, supplies and services,
from February 1993 to September 1994. Mr. Dangremond is
also a director of AMI and Forstmann. Mr. Dangremond has
served as a director of the Company since 1993.
Mr. Dangremond's appointments as Chief Financial Officer
of Zenith, as interim Chief Executive Officer and President
of Forstmann and as Chairman of the Board, President and
Chief Executive Officer of AMI, were made in connection
with turnaround consulting services provided by Jay Alix
& Associates. On May 17, 1993, AMI filed a petition under
Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code"), and on September 29, 1993, a plan of
reorganization was confirmed with respect to AMI. On
September 22, 1995, Forstmann filed a petition under
Chapter 11 of the Bankruptcy Code. In July 1997, Forstmann
consummated a plan of reorganization and emerged from
bankruptcy.
F. Edward Gustafson 56 Mr. Gustafson has been Chairman of the Board, President and
Chief Executive Officer of the Company since March 1996 and
a director of the Company since 1993. Mr. Gustafson was
Executive Vice President and Chief Operating Officer of the
Company from May 1989 to March 1996 and President of
Viskase Corporation, a wholly-owned subsidiary of the
Company, from February 1990 to August 1994. Mr. Gustafson
has also served as Executive Vice President and Chief
Operating Officer of D.P. Kelly & Associates, L.P., a
management services and private investment firm, since
November 1988.
On January 7, 1993, Envirodyne and its major domestic
subsidiaries filed petitions under Chapter 11 of the
Bankruptcy Code. On December 31, 1993, Envirodyne and the
debtor subsidiaries consummated a plan of reorganization
and emerged from bankruptcy. Mr. Gustafson is Executive
Vice President of Emerald Acquisition Corporation
("Emerald"), the former parent company of Envirodyne. On
August 20, 1993, Emerald filed a petition under Chapter 11
of the Bankruptcy Code. In March 1998, the bankruptcy
petition was dismissed by the Bankruptcy Court.
Gregory R. Page 46 Mr. Page has been President of the Red Meat Group of
Cargill, Inc. ("Cargill"), a multinational trader and
processor of foodstuffs and other commodities, since August
1995. From 1994 to August 1995, Mr. Page was President of
Cargill's Worldwide Beef Operations. From 1992 to 1994, Mr.
Page was President of Cargill's North American Beef
Operations. Mr. Page has served as a director of the
Company since 1993.
Mark D. Senkpiel 45 Mr. Senkpiel has been Senior Vice President of Trust
Company of the West, an investment management firm, since
January 1996. Previously, Mr. Senkpiel was for more than
five (5) years Investment Director of the Investment
Management Division of Allstate Corporation, a property,
liability and life insurance company. Mr. Senkpiel has
served as a director of the Company since 1993.
</TABLE>
For information regarding executive officers of the
Company, see information set forth under "Executive Officers
of the Registrant" in Part I of this report.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance.
-------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than 10% of the
Company's outstanding Common Stock to file reports of ownership and
changes in ownership of Common Stock with the Securities and
Exchange Commission, NASDAQ and the Company. Based upon a review of
relevant filings and written representations from the Company's
officers, directors, and persons who own more than 10% of the
Company's Common Stock, the Company believes that all required
filings by such persons with respect to the year ended December 25,
1997 have been made on a timely basis except that each of the
following reporting persons failed to file one report each with
respect to four transactions on a timely basis: Mr. Malcolm I.
Glazer and Mr. Avram A. Glazer.
ITEM 11. EXECUTIVE COMPENSATION
- ------- ----------------------
Summary of Cash and Certain Other Compensation of Executive
-----------------------------------------------------------
Officers. The Summary Compensation Table below provides certain
- --------
summary information concerning compensation by the Company for
1997, 1996 and 1995 for services rendered by the Company's Chief
Executive Officer and each of the other executive officers of the
Company whose total annual salary and bonus exceeded $100,000 in
1997.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Long-Term
Annual Compensation Compensation Awards
--------------------------------- --------------------------
Other Annual Restricted All Other
Name and Salary Bonus Compensation Stock Award Options Compensation
Principal Position Year ($)(1) ($)(2) ($)(3) ($)(4) (#) ($)
- ----------------------- ------ --------- -------- ------------ -------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson 1997 465,231 -- 48,786 -- -- 18,517 (5)
Chairman of the Board, 1996 435,692 -- 69,662 126,875 145,000 16,108
President and Chief 1995 390,000 -- 67,772 -- -- 12,472
Executive Officer
Stephen M. Schuster 1997 170,150 35,200 4,669 -- -- 7,350 (6)
Vice President, General 1996 163,325 43,894 6,259 -- 22,900 7,096
Counsel and Secretary 1995 157,050 42,404 23,159 -- -- 7,154
Gordon S. Donovan 1997 150,542 31,400 4,804 -- -- 7,254 (7)
Vice President, Chief 1996 134,042 31,776 3,035 -- 19,500 5,664
Financial Officer, 1995 121,156 33,520 -- -- 19,500 5,257
Treasurer and Assistant
Secretary
- -------------------------------------------------------
<FN>
(1) The salary set forth above for Mr. Gustafson for 1996 does not
include $193,000 paid to D.P. Kelly & Associates, L.P. under the
Amended and Restated Management Services Agreement dated December
31, 1993. See "Certain Relationships and Related Transactions."
(2) Mr. Donovan's bonus for 1995 includes $6,250 earned under the
Company's Long-Term Growth Plan ("LTGP") with respect to that
fiscal year. Bonuses under the LTGP are determined based on the
Company's overall financial performance for the fiscal year in
which an award is made. Bonuses under the LTGP are paid at the
conclusion of the second year following the year for which the
bonus is earned and are subject to forfeiture if the participant's
employment with the Company is terminated for any reason other
than death, retirement or other specified circumstances prior to
payment.
(3) Pursuant to his Employment Agreement, dated March 27, 1996 (the
"Employment Agreement"), Mr. Gustafson receives a cash payment of
$30,000 in lieu of a Company automobile. In 1996, Mr. Gustafson
had personal use of a Company automobile for a portion of the year
and, pursuant to his Employment Agreement, was paid cash in lieu
of a Company automobile for the remainder of the year, which use
and cash payment was valued at $24,604. In 1997, Mr. Gustafson
received a cash payment of $30,000. In 1995, Mr. Gustafson had
personal use of a Company automobile at an aggregate incremental
cost to the Company of $28,984. In addition, in 1996 and 1995 the
Company paid country club dues on behalf of Mr. Gustafson in an
amount equal to $38,054 and $12,062, respectively.
(4) Pursuant to his Employment Agreement Mr. Gustafson was granted
35,000 restricted shares of the Company's Common Stock with a
value of $126,875. Such shares are nontransferable and are subject
to forfeiture until March 27, 1999. See "Employment Agreements and
Change-in-Control Arrangements." The Company does not currently,
and does not expect in the near future to, pay dividends on shares
of its Common Stock. Neither Mr. Gustafson nor any of the other
persons named in the Summary Compensation Table holds any other
restricted shares of Common Stock.
(5) Includes $4,050 paid for life insurance, $4,581 contributed to the
Envirodyne Retirement Income Plan and $9,886 contributed to the
Envirodyne Parallel Non-Qualified Thrift Plan.
(6) Includes $419 paid for life insurance, $4,581 contributed to the
Envirodyne Retirement Income Plan and $2,350 contributed to the
Envirodyne Parallel Non-Qualified Thrift Plan.
(7) Includes $362 paid for life insurance, $4,073 contributed to the
Envirodyne Retirement Income Plan and $2,819 contributed to the
Envirodyne Parallel Non-Qualified Thrift Plan.
</TABLE>
Stock Option Exercises and Holdings. The following table provides
-----------------------------------
information concerning the exercise of stock options during the fiscal
year ended December 25, 1997 and the fiscal year-end value of stock
options with respect to each of the persons named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in 1997 and December 25, 1997 Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value 12/25/97 (#) 12/25/97 ($)
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ------------------------------ ----------- ---------- ---------------- -----------------
<S> <C> <C> <C> <C>
F. Edward Gustafson........... -- -- 11,666/58,334 40,831/204,169
Stephen M. Schuster........... -- -- 30,483/15,267 64,309/40,076
Gordon S. Donovan............ -- -- 26,000/13,000 54,844/34,125
</TABLE>
<PAGE>
<PAGE>
Compensation of Directors. Each director who is not an officer
-------------------------
of the Company received an annual retainer of $20,000 in 1997 and
a fee of $1,000 for each attended meeting of the Board of
Directors. Chairmen of committees of the Board of Directors
received an annual retainer of $1,500 in 1997. Directors also
received a fee for each attended meeting of a committee of the
Board of Directors of $1,000 ($500 in the case of committee
meetings occurring immediately before or after meetings of the full
Board of Directors). In addition, during 1997 Messrs. Dangremond,
Page and Senkpiel each received a fee of $20,000 for serving on a
special committee of the board of directors. Directors who are
officers of the Company do not receive compensation in their
capacity as directors. Pursuant to Envirodyne Industries, Inc. 1993
Stock Option Plan, as amended, on the date of the 1997 Annual
Meeting of Stockholders, non-employee directors were granted a
stock option to purchase 1,000 shares of Common Stock at an option
exercise price equal to the fair market value of the Common Stock
on the date of grant. Pursuant to the Non-Employee Directors'
Compensation Plan, non-employee directors may elect to receive
their director fees in the form of shares of Common Stock. The
number of shares received is based on the average of the closing
bid and asked price of the Common Stock on the business day
preceding the date the Common Stock is issued. All of the non-
employee directors have elected to receive their director fees in
the form of shares of Common Stock.
Employment Agreements and Change-in-Control Arrangement. On
-------------------------------------------------------
March 27, 1996, the Company entered into an Employment Agreement
with Mr. F. Edward Gustafson. Pursuant to the Employment Agreement,
Mr. Gustafson agreed to serve as Chairman of the Board, President
and Chief Executive Officer of the Company, and the Company agreed
to use its best efforts to cause Mr. Gustafson to be elected as a
director of the Company, during the term of the Agreement. The
initial term of the Employment Agreement is three (3) years,
provided, however, that on March 26, 1997 and each subsequent
anniversary thereof, the term of the Employment Agreement will be
automatically extended for a period of one (1) year unless the
Company or Mr. Gustafson gives written notice to the other at least
thirty (30) days prior to the anniversary date that the term shall
not be so extended.
Under the Employment Agreement, Mr. Gustafson will receive an
initial annual base salary of at least $450,000 and $30,000 per
year in lieu of a Company-provided automobile. Mr. Gustafson's base
salary will be increased by the Compensation and Nominating
Committee of the Board of Directors each year in a manner
consistent with increases in base salary for other senior officers
of the Company. In addition, the Employment Agreement provides that
with respect to the fiscal year ended December 25, 1997, Mr.
Gustafson would be eligible to receive a bonus based on a
percentage of his base salary depending on the Company's
performance based on earnings before interest, taxes and
depreciation and amortization ("EBITDA"). Because the Company did
not achieve the minimum goal for EBITDA, Mr. Gustafson did not
receive a bonus for fiscal year 1997. Mr. Gustafson will be
eligible to receive an annual bonus for future fiscal years of the
Company based on such financial performance or other performance-
related criteria as established by the Compensation and Nominating
Committee, after consultation with Mr. Gustafson. Mr. Gustafson is
also entitled to participate in any employee benefit plans in
effect for, and to receive other fringe benefits provided to, other
executive officers.
Pursuant to and upon execution of the Employment Agreement,
Mr. Gustafson was granted two (2) stock options, each to purchase
35,000 shares of Common Stock. One (1) stock option becomes
exercisable in cumulative annual increments of one-third commencing
on the first anniversary of the date of grant. The other stock
option becomes exercisable in cumulative annual increments of one-
third commencing on the second anniversary of the date of grant. In
addition, Mr. Gustafson was granted a stock option to purchase up
to 75,000 shares of Common Stock depending on the financial
performance of the Company based on EBITDA for fiscal year 1996.
The Company did not achieve the minimum goal for EBITDA. Therefore,
no portion of this stock option became exercisable or will become
exercisable in the future. Lastly, Mr. Gustafson was granted 35,000
restricted shares of Common Stock which may not be transferred, and
are subject to forfeiture, until March 27, 1999.
If Mr. Gustafson's employment is terminated by the Company for
Cause, as defined in the Employment Agreement, or by Mr. Gustafson
other than for Good Reason or Disability, as defined in the
Employment Agreement, Mr. Gustafson will be paid all Accrued
Compensation, as defined in the Employment Agreement, through the
date of termination of employment. If Mr. Gustafson's employment
with the Company is terminated by the Company for any reason other
than for Cause, death or Disability, or by Mr. Gustafson for Good
Reason, (i) Mr. Gustafson will be paid all Accrued Compensation
plus 200% of his base salary and the prorated amount of annual
bonus that would have been payable to Mr. Gustafson with respect to
the fiscal year in which Mr. Gustafson's employment is terminated,
provided that the performance targets have been actually achieved
as of the date of termination (unless such termination of
employment follows a Change in Control, as defined in the
Agreement, in which case Mr. Gustafson will receive a bonus equal
to 50% of his base salary regardless of the Company's performance),
(ii) Mr. Gustafson will continue to receive life insurance,
medical, dental and hospitalization benefits for a period of
twenty-four (24) months following termination of employment, and
(iii) all outstanding stock options and restricted shares of Common
Stock will become immediately exercisable, vested and
nonforfeitable.
Pursuant to the Employment Agreement, Mr. Gustafson is
generally prohibited during the term of the Agreement, and for a
period of two (2) years thereafter, from competing with the
Company, soliciting any customer of the Company or inducing or
attempting to persuade any employee of the Company to terminate his
or her employment with the Company in order to enter into
competitive employment. For purposes of the Employment Agreement,
the Company includes Envirodyne Industries, Inc. and any of its
subsidiaries over which Mr. Gustafson exercised, directly or
indirectly, any supervisory, management, fiscal or operating
control during the term of the Employment Agreement.
In May 1996, the Compensation and Nominating Committee of the
Board of Directors approved the Envirodyne Industries, Inc.
Severance Pay Policy (the "Policy") which covers all permanent,
full-time, salaried executives and administrative personnel
employed by the Company at its corporate office, including Mr.
Gordon S. Donovan and Mr. Stephen M. Schuster. Mr. Donovan and Mr.
Schuster are eligible for severance benefits as set forth in the
Policy upon the occurrence of one of the following events (an
"Event"): (i) involuntary separation of employment from the Company
for any reason other than death, disability or willful misconduct,
(ii) voluntary separation of employment from the Company (a)
following a reduction in base compensation or incentive bonus
opportunity from that in effect on the day immediately before the
effective date of a Change in Control, as defined in the Policy, or
office consolidation or elimination, or (b) following a reduction
in the person's principal responsibilities from those in effect on
the day immediately before the effective date of a Change in
Control, as defined in the Policy, or office consolidation or
elimination. Upon the occurrence of an Event and subject to the
Company obtaining a general release, Mr. Donovan and Mr. Schuster
would receive severance pay equal to the equivalent to twenty-four
(24) months' salary (at the highest annual rate in effect during
the three-year period prior to separation of employment) plus a
target bonus under the Management Incentive Plan in effect at the
time of separation. In addition, Mr. Donovan and Mr. Schuster would
continue to receive medical, life and dental insurance benefits in
effect at the time of separation of employment for a period of time
following such separation depending on form of payment of the
severance pay elected (e.g., lump sum or installment) and whether
he is covered by another employer's plan. The Policy may be amended
or terminated at any time by the Company except that in the event
that a Change in Control or elimination or consolidation of all or
part of the corporate office occurs during the term of the Policy,
the Policy will be automatically extended for a period of twenty-
four (24) months following the effective date of the Change in
Control or office consolidation or elimination.
Compensation Committee Interlocks and Insider Participation.
-----------------------------------------------------------
The Compensation and Nominating Committee of the Board of Directors
consists of Messrs. Dangremond and Page, each of whom is a
non-employee director of the Company. Mr. Page is the President of
the Red Meat Group of Cargill, Inc. In fiscal year 1997, Viskase
Corporation, a wholly-owned subsidiary of the Company, had sales of
$21,825,000 made in the ordinary course to Cargill, Inc. and its
affiliates.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
---------------------------------------------------
MANAGEMENT
----------
The following table sets forth the beneficial ownership of
Common Stock as of April 1, 1998 of (a) each person or group of
persons known to the Company to beneficially own more than 5% of
the outstanding shares of Common Stock, (b) each director and
nominee for director of the Company, (c) each executive officer of
the Company listed in the Summary Compensation Table below, and (d)
all executive officers and directors of the Company as a group. All
information is taken from or based upon ownership filings made by
such persons with the Commission or upon information provided by
such persons to the Company.
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class (1)
- --------------------------- ---------------------- ------------
Zapata Corporation........... 5,877,304 39.67%
P.O. Box 4240
Houston, Texas 77210
Donald P. Kelly.............. 2,194,501 (2)(3) 14.69%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
F. Edward Gustafson.......... 1,607,275 (3)(4) 10.81%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Volk Enterprises, Inc........ 1,300,000 8.77%
1230-1232 South Avenue
Turlock, California 95380
Elliott Associates, L.P...... 1,136,950 (5) 7.67%
Martley International, Inc.
Westgate International, L.P.
712 Fifth Avenue, 36th Floor
New York, New York 10019
Robert N. Dangremond......... 20,636 (6) *
Gordon S. Donovan............ 49,852 (7) *
Gregory R. Page.............. 19,865 (6) *
Stephen M. Schuster.......... 99,030 (8) *
Mark D. Senkpiel............. 34,686 (6)(9) *
All directors and executive
officers of the Company
as a group (7 persons)....... 2,303,440 (10) 15.40%
_________________________
* Less than 1%.
(1) Beneficial ownership is calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder. Accordingly, the "Number of Shares
Beneficially Owned" and the "Percent of Class" shown for each
person listed in the table are based on the assumption that
both stock options which are exercisable currently or within
60 days of April 1, 1997 and warrants to purchase Common Stock
("Warrants") which are all currently exercisable, held by such
person, have been exercised. Unless otherwise indicated, the
persons listed in the table have sole voting and investment
power over those securities listed for such person.
(2) The ownership indicated includes Warrants to purchase 119,809
shares owned by Mr. Kelly.
(3) The ownership indicated includes 70,287 shares and Warrants to
purchase 4,405 shares owned by D.P. Kelly & Associates, L.P.
("DPK"), of which Mr. Kelly and Mr. Gustafson are principals
and officers. The general partner of DPK is C&G Management
Company, Inc. ("C&G Management"), which is owned by Mr. Kelly
and Mr. Gustafson. The ownership indicated also includes
1,300,000 shares owned by Volk Enterprises, Inc. ("Volk").
Volk is controlled by Volk Holdings L.P., whose general
partner is Wexford Partners I L.P. ("Wexford Partners"). The
general partner of Wexford Partners is Wexford Corporation,
which is owned by Mr. Kelly and Mr. Gustafson. Mr. Kelly and
Mr. Gustafson share voting and investment power over the
shares and Warrants owned by DPK and Volk. However, Mr. Kelly
and Mr. Gustafson each disclaim beneficial ownership of shares
and Warrants owned by DPK and Volk except to the extent of
their respective pecuniary interest in such entities.
(4) The ownership indicated includes 35,000 shares and 35,000
shares subject to stock options and Warrants, respectively,
owned by Mr. Gustafson. The ownership indicated also includes
70,619 shares and Warrants to purchase 4,405 shares owned by
Mr. Gustafson's spouse. Mr. Gustafson does not have or share
voting or investment power over the shares and Warrants owned
by his spouse and disclaims beneficial ownership of such
shares and Warrants.
(5) Elliott Associates, L.P. ("Elliott"), Westgate International,
L.P. ("Westgate") and Martley International, Inc. ("Martley")
filed a group Schedule 13D indicating that 689,050 shares are
beneficially owned by Elliot and 447,900 shares are
beneficially owned by Westgate and Martley. Paul E. Singer
and Braxton Associates, L.P., which is controlled by Mr.
Singer, are the general partners of Elliott. Mr. Singer is
also the President of Martley and an executive officer of
Hambledon, Inc., which is the sole general partner of
Westgate. Martley is the investment manager of Westgate and
disclaims beneficial ownership of, and pecuniary interest in,
any shares. Martley's business address is 712 Fifth Avenue,
36th Floor, New York, New York 10019.
(6) The ownership indicated includes 4,000 shares subject to stock
options owned by each non-employee director.
(7) The ownership indicated includes 32,500 shares subject to
stock options owned by Mr. Donovan, 3,000 shares owned jointly
by Mr. Donovan and his spouse, with whom Mr. Donovan shares
voting and investment power over such shares, and 1,000 shares
owned by Mr. Donovan's spouse. Mr. Donovan does not have or
share voting power over the 1,000 shares owned by his spouse
but shares investment power over those shares with his spouse.
Mr. Donovan disclaims beneficial ownership of such shares.
(8) The ownership indicated includes 38,116 shares subject to
stock options owned by Mr. Schuster and 20,104 shares owned by
Mr. Schuster's spouse. Mr. Schuster does not have or share
voting or investment power over the shares owned by his spouse
and disclaims beneficial ownership of such shares.
(9) The ownership indicated includes 3,000 shares held by Mr.
Senkpiel as custodian for accounts of his minor children under
the Uniform Gifts to Minors Act. Mr. Senkpiel disclaims
beneficial ownership of such shares.
(10) See Footnotes (3), (4), (5), (6), (7) and (8).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ----------------------------------------------
During fiscal 1997, the Company purchased products in the
ordinary course and on arm's-length terms from affiliates of D.P.
Kelly & Associates, L.P. ("DPK") in the amount of $187,000. During
fiscal 1997, the Company sublet office space from DPK for which it
paid $133,000 in rent. The rent is comparable to that which would
be charged to a nonaffiliated company for use of this office space.
Donald P. Kelly, a beneficial owner of greater than 5% of the
outstanding shares of Common Stock, and Mr. Gustafson, a beneficial
owner of greater than 5% of the outstanding shares of Common Stock
and the Chairman, Chief Executive Officer and President of the
Company, are executive officers and limited partners of DPK.
In fiscal 1997, Viskase Corporation, a wholly-owned subsidiary
of the Company, had sales of $21,825,000 to Cargill, Inc. and its
affiliates, which sales were made in the ordinary course of
business. Gregory R. Page, President of the Red Meat Group of
Cargill, Inc., is a director of the Company.
<PAGE>
SIGNATURES
----------
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.
ENVIRODYNE INDUSTRIES, INC.
--------------------------
(Registrant)
By: /s/
-------------------------
F. Edward Gustafson
Chairman, Chief
Executive Officer
and President
By: /s/
--------------------------
Gordon S. Donovan
Vice President, Chief
Financial Officer
and Treasurer
Date: April 27, 1998
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on
this 27th day of April 1998.
/s/ /s/
- ------------------------------- -------------------------------
F. Edward Gustafson Gordon S. Donovan
Chairman of the Board, Chief Vice President, Chief
Executive Officer and Financial Officer and
President Treasurer
(Principal Executive Officer) (Principal Financial and
Accounting Officer)
/s/ /s/
- ------------------------------- -----------------------------
Robert N. Dangremond (Director) Gregory R. Page (Director)
/s/
- -------------------------------
Mark D. Senkpiel (Director)
