SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
--------------
AMENDMENT NO. 1
(Mark One)
[X] AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[_] AMENDMENT TO TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______
TO__________
Commission File Number 1-3410
AMERICAN BANKNOTE CORPORATION
A Delaware Corporation I.R.S. Employee ID No. 13-0460520
200 Park Avenue, New York, New York 10166-4999
Telephone number: (212) 557-9100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
Common Stock, par value $.01 per share New York Stock Exchange
Preferred Stock Purchase Rights N/A
Securities registered pursuant to Section 12(g) of the Act: None
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 and (2) has been subject to such filing 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. [ ]
At March 20, 1997, the aggregate market value of the voting stock held by
non-affiliates was $76,917,000.
At March 20, 1997, 19,849,547 shares of Common Stock were outstanding.
<PAGE>
EXPLANATORY NOTE
This Report on Form 10-K/A amends and restates in their entirety the
following Items of the Annual Report on Form 10-K of American Banknote
Corporation (the "Company) for the fiscal year ended December 31, 1996 (the
"1996 Form 10-K"):
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following sets forth certain information regarding the directors of
the Company.
<TABLE>
<CAPTION>
NAME INFORMATION CONCERNING DIRECTORS DIRECTOR SINCE AGE
---- -------------------------------- -------------- ---
<S> <C> <C> <C>
Bette B. Anderson............ Vice Chairperson since 1996 and President prior June 1994 68
thereto of Kelly, Anderson, Pethick & Associates,
Inc., a Washington based management firm.
Undersecretary of the Treasury from 1977 to
1981. Director, ITT Corporation, ITT Educational
Services, United Payors & United Providers, Inc.
and ITT Hartford Group, Inc., and serves on
various Committees of such companies. Member of
the Treasury Historical Association, a Director
of the Miller Foundation at the University of
Virginia and a member of the Advisory Council of
the Girl Scouts of America.
Dr. Oscar Arias S............ Director, Arias Foundation for Peace and Human September 1995 56
Progress. Former President of Costa Rica and 1987
Nobel Peace Prize recipient. President, International
Press Service; Director, Stockholm International
Peace Research Institute, International Center for
Human Rights and Democratic Development Institute
for International Studies at Stanford University.
Serves on the Board for the InterAction Council, the
International Negotiation Network of the Carter
Center and Transparency International. In addition,
Dr. Arias is an active member of The Commission on
Global Governance, the Inter-American Dialogue and
the Society for International Development.
2
<PAGE>
<CAPTION>
NAME INFORMATION CONCERNING DIRECTORS DIRECTOR SINCE AGE
---- -------------------------------- -------------- ---
<S> <C> <C> <C>
C. Gerald Goldsmith.......... Investor; Director, Palm Beach National Bank and July 1990 68
Trust, Nine West Group, Inc. and Innkeepers, USA.
Ira J. Hechler............... Investor; Director, Leslie Fay Companies, Inc. and February 1990 78
Concord Camera Corp.
David S. Rowe-Beddoe......... Chairman of the Board, Welsh Development Agency July 1990 59
since 1993 and Development Board for Rural Wales
since 1994; Director, Cavendish Services Ltd. and
Development Securities plc. Previously held various
senior management positions, including at Revlon,
Inc. and De La Rue plc, as an Executive Director.
Alfred Teo................... Chairman and Chief Executive Officer of Alpha June 1996 51
Industries, Inc. of the Sigma Plastics Group since
1979. Chairman and Chief Executive Officer of Red
Line Express since 1984; Hillman Eyes since 1992
and Alpha Technologies since 1990. Director of Fleet
Bank N.A., Trustee, St. Joseph's Hospital and
Stevens Institute of Technology.
Morris Weissman.............. Chairman of the Board and Chief Executive Officer of February 1990 55
the Company since July 1990 and Chief Operating
Officer since July 1995; Chairman of the Board and
Chief Executive Officer of United States Banknote
Company L.P. ("USBC") from 1986 through July
1990 and Vice Chairman and Director of USBC's
predecessor from 1976 to 1986. Director of the
Convenience and Safety Corporation and a Trustee of
the Jackie Robinson Foundation and the Business
Council for the United Nations.
</TABLE>
3
<PAGE>
The following sets forth certain information regarding the executive
officers of the Company who are not also directors.
<TABLE>
<CAPTION>
NAME INFORMATION CONCERNING EXECUTIVE OFFICERS AGE
---- ----------------------------------------- ---
<S> <C> <C>
John T. Gorman Has served as Executive Vice President and Chief Financial Officer of the 52
Company since 1990. Mr. Gorman was Executive Vice President and Chief
Financial Officer of USBC from 1983 to 1990 and Senior Vice President of
Finance of USBC's predecessor from 1978 to 1983.
Harvey J. Kesner Has served as Executive Vice President of the Company since June 1996 39
and as General Counsel and Secretary of the Company since 1991.
Mr. Kesner was an attorney in private practice for more than five years
prior thereto.
Ward A.W. Urban Has served as Treasurer of the Company since August 1993 and as Vice 36
President and Assistant Secretary since June 1995. Mr. Urban was
employed as an Assistant Vice President in the leveraged finance
department of Citibank, N.A. since August 1988.
Patrick J. Gentile Has served as an executive officer since September 1996 and as Vice 38
President of the Company since June 1995, as Comptroller since 1989
and has been a continuous employee of the Company's predecessors
since 1986.
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers, 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 Securities and Exchange
Commission and the New York Stock Exchange. Officers, directors and greater than
10% stockholders are required by regulations promulgated by the Securities and
Exc ange Commission to furnish the Company with copies of all forms they file
pursuant to Section 16(a) of the Exchange Act.
Based solely on review of the copies of such forms furnished to the Company
and written representations from the Company's executive officers and Directors,
the Company believes that during the year ended December 31, 1996 all persons
subject to the reporting requirements of Section 16(a) filed the required
reports on a timely basis except as follows: one late Form 4 by Mr. Teo
reporting ownership changes reported on Form 5 filed February 1997 and one late
Form 4 reporting sales by Mr. Weissman's spouse during 1996 reported on Form 4
filed May 1997.
4
<PAGE>
Item 11. Executive Compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information for the three years
ended December 31, 1996, 1995 and 1994, regarding the compensation of the Chief
Executive Officer of the Company and each of the other four most highly
compensated executive officers of the Company who were serving at the end of the
last completed year and whose compensation exceeded $100,000 for such year
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ---------------------
OTHER RESTRICTED PAYOUTS
ANNUAL STOCK LTIP ALL OTHER
NAME AND COMPENSATION AWARD(S) PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS($) ($)(1) ($)(2) OPTIONS(#) ($) ($)(3)
- ------------------ ---- ---------- -------- ----------- ---------- ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Morris Weissman 1996 750,000 1,217,000 -- 292,500 626,000 -- 19,488
Chairman and Chief 1995 750,000 - -- -- 250,000 -- 19,040
Executive Officer 1994 750,000 183,750 -- 183,750 -- -- 21,918
John T. Gorman 1996 244,723 250,000 32,500 90,600 -- 19,871
Executive Vice 1995 234,168 40,000 -- -- -- -- 15,938
President and Chief 1994 234,168 132,200 -- -- 20,000 -- 17,224
Financial Officer
Harvey J. Kesner 1996 195,000 200,000 -- 32,500 56,500 -- 10,717
Executive Vice President 1995 173,824 30,000 -- -- -- -- 7,500
General Counsel and 1994 151,440 60,000 -- -- 15,000 -- 7,500
Secretary
Ward A.W. Urban 1996 125,000 81,000 -- 12,188 15,700 -- 9,958
Vice President, Treasurer
and Asst. Secretary
Patrick J. Gentile 1996 111,667 66,125 -- 12,188 16,500 -- 9,755
Vice President and
Corporate Comptroller
<FN>
----------
(1) The value of each of the named executive officer's perquisites did not
exceed the threshold for disclosure established under the Securities and
Exc ange Commission's proxy rules.
(2) Amounts shown for 1996 consist of the market value on the date of grant of
180,000, 20,000, 20,000, 7,500 and 7,500 shares of restricted stock
granted effective April 25, 1996 to Messrs. Weissman, Gorman, Kesner,
Urban and Gentile, respectively, under the Long Term Performance Plan.
Restrictions on the total number of shares subject to the grant will lapse
on the fifth anniversary of the date of grant. In addition, 25% or more of
the grant may lapse per annum if the Company achieves certain earning
levels in the years 1996-1999. As a result of achieving the 1996
performance criteria, all restrictions lapsed on 25% of the 1996 shares.
The total number of shares granted are entitled to the right to vote and
5
<PAGE>
receive dividends, when and if dividends are paid on the Common Stock.
Under the Long Term Performance Plan, upon the grantee's death, retirement
or disability, the restrictions will lapse on a pro-rata basis based upon
the portion of the restricted period which has elapsed and the remainder
will be forfeited. All such restrictions will immediately lapse upon a
"change in control."
The amount shown for 1994 represents 91,875 shares of restricted stock
valued at $2.00 per share awarded on March 27, 1995 representing 50% of
Mr. Weissman's 1994 bonus under the Executive Incentive Plan. Restrictions
lapse on one-third of the shares upon each of the first three
anniversaries of the date of award. All such restrictions will immediately
lapse upon Mr. Weissman's death, retirement, disability, termination or
upon a "change in control" of the Company. Shares are held pursuant to a
grantor trust subject to claims of the Company's creditors until the date
restrictions on the shares lapse. Dividends are paid on these shares as,
when and if dividends are paid on the Common Stock.
As of December 31, 1996, the number and potential value of the aggregate
restricted stockholdings of each of the Named Executive Officers were as
follows (prior to determination of achievement of the criteria for lapse
of any restrictions): Mr. Weissman (241,250 shares with a value of
$1,115,781); Mr. Gorman (20,000 shares with a value of $92,500); Mr.
Kesner (20,000 shares with a value of $92,500); Mr. Urban (7,500 shares
with a value of $34,688); and Mr. Gentile (7,500 shares with a value of
$34,688).
Awards under the Long Term Performance Plan, Executive Incentive Plan and
1990 Stock Option Plan are subject to anti-dilution provisions.
(3) Amounts shown consist of contributions to the Company's defined
contribution Retirement Plan ($7,500 for each of Messrs. Weissman, Gorman
and Kesner, $7,000 for Mr. Urban and $6,231 for Mr. Gentile), premiums
paid with respect to life insurance ($11,988 for Mr. Weissman, $8,746 for
Mr. Gorman and $592 for Mr. Gentile) and other tax payments for the Named
Executive Officers ($3,625 for Mr. Gorman, $3,217 for Mr. Kesner, $2,958
for Mr. Urban and $2,932 for Mr. Gentile).
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. Weissman serves pursuant to an employment agreement with the Company
with a term ending on December 31, 1999. The term of Mr. Weissman's agreement is
subject to automatic extension unless advance notice of non-renewal is given.
Mr. Weissman's agreement provides for his engagement as Chairman and Chief
Executive Officer of the Company. The agreement provides for a base salary of
$750,000, with no guaranteed bonus. Mr. Weissman participates in the Executive
Incentive Plan and receives an annual bonus equal to 6% of his annual base
salary in 1994 (adjusted in each subsequent year by compounding the 1994 base
salary by 1.07) multiplied by the number of percentage points by which "ROE" (as
defined below) exceeds 10% up to a maximum annual bonus equal to 200% of base
salary (as adjusted).
ROE is defined as the fraction the numerator of which is equal to the
Company's pre-tax income (including income from minority holdings, joint
ventures, dividends from investments and like income) before extraordinary
charges or similar one-time non-recurring losses or reserves not in the ordinary
course plus depreciation and amortization, and the denominator of which is
calculated as a simple average of the average monthly common equity (beginning
of month common equity plus end of month common equity divided by two) for the
calendar year.
Mr. Weissman's agreement also contains provisions for the continuation of
payments in the event of disability or death in addition to maintenance of
certain life insurance and participation in Company benefit plans. Upon
termination in the event of his permanent disability, until the earlier to occur
of (i) recovery from such disability, (ii) the date employment under the
employment agreement was scheduled to terminate or (iii) death, Mr. Weissman is
entitled to receive 75% of the then effective
6
<PAGE>
base salary and the pro rata amount of the bonus he would have received for the
year in which he became permanently disabled based on the number of days he was
not disabled and during the time he receives 75% of his base salary all other
benefits he would have received but for the termination of employment due to
disability.
In the event Mr. Weissman's employment with the Company is terminated by
the Company (other than for cause) or is terminated by Mr. Weissman for "good
reason," Mr. Weissman is entitled to receive a lump sum payment equal to the
greater of his "total direct compensation" (as defined) for 1994 or his
"estimated total direct compensation" (as defined) then in effect, as if his
employment agreement had remained in effect for the entire term or, if following
a "change in control," the greater of such amount or $5,000,000, plus the value
of his unexercised options and maintenance of certain benefits for the remainder
of the term of the agreement.
On July 24, 1996, Mr. Gorman's employment agreement was amended and
extended with a term ending on August 31, 1999. The term of Mr. Gorman's
agreement is subject to automatic extension unless advance notice of non-renewal
is given. Mr. Gorman's agreement provides for his engagement as Chief Financial
Officer of the Company. The agreement provides for a base salary of $250,000
with no guaranteed bonus. For 1996, Mr. Gorman's agreement provides for an
annual bonus in accordance with the Company's Challenge 2000 Program. The bonus
can range from 0-100% of base salary based upon the level of achievement of
corporate and personal goals.
In addition to the annual bonus, Mr. Gorman is entitled to participate in
all other benefits made available to executive officers of the Company,
including, a long-term incentive award as determined by the Compensation
Committee.
Mr. Gorman's employment agreement contains provisions for the continuation
of payments in the event of non-renewal by the Company, disability or death in
addition to maintenance of certain life insurance and participation in Company
benefit plans. The employment agreement entitles Mr. Gorman to certain payments
upon termination (other than for cause). Upon termination in certain
circumstances, including for "good reason", Mr. Gorman is entitled to a lump sum
cash payment in an amount equal to two times base salary plus bonus then in
effect plus the value of unexercised options held and maintenance of certain
benefits for an eighteen month period. Upon termination other than for cause,
death or disability, the agreement provides that the Company will retain Mr.
Gorman as a consultant for a term of 18 months at 150% of his base salary then
in effect.
Messrs. Kesner, Urban and Gentile participate in the Challenge 2000
program under which they are entitled to bonuses which can range from 0-100% of
base salary for Mr. Kesner, 0-75% for Mr. Urban and 0-75% for Mr. Gentile. In
addition, Mr. Kesner's employment is subject to an agreement which provides for
payment upon termination of employment, disability or death, in addition to
maintenance of certain life insurance and participation in all other benefits
made available to executive officers, in a lump sum amount of one times base
salary then in effect, and, upon termination for "good reason", one times base
salary plus bonus, plus the value of unexercised options held and maintenance of
certain benefits for an eighteen-month period.
7
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth for each of the Named Executive Officers: (a) the
number of options granted during 1996; (b) the percent such number is of the
total options granted to all employees in 1996; (c) the exercise price per
share; (d) the expiration date; and (e) the potential realizable value of such
options at certain assumed rates of stock price appreciation.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------
% of POTENTIAL REALIZABLE VALUE AT
Total ASSUMED ANNUAL RATES OF
Options STOCK PRICE APPRECIATION FOR
Options Granted to EXERCISE OPTION TERM(2)
Granted Employees Price EXPIRATION ---------------------------------------
(#)(1) in 1996 ($/sh) DATE 0%($) 5%($) 10%($)
--------- -------- --------- ------ ---------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Morris Weissman 150,000 13.8% $1.65 2/5/06 $ -- $155,651 $394,451
Morris Weissman 476,000 43.9% $2.25 3/6/06 $ -- $673,546 $1,706,898
John T. Gorman 20,000 1.8% $1.375 2/5/06 $ -- $17,295 $43,828
John T. Gorman 70,600 6.5% $2.25 3/6/06 $ -- $99,900 $253,166
Harvey J. Kesner 20,000 1.8% $1.375 2/5/06 $ -- $17,295 $43,828
Harvey J. Kesner 36,500 3.4% $2.25 3/6/06 $ -- $51,648 $130,886
Ward A. W. Urban 10,000 0.9% $1.375 2/5/06 $ -- $ 8,647 $21,914
Ward A. W. Urban 5,700 0.5% $2.25 3/6/06 $ -- $ 8,066 $20,440
Patrick J. Gentile 10,000 0.9% $1.375 2/5/06 $ -- $ 8,647 $21,914
Patrick J. Gentile 6,500 0.6% $2.25 3/6/06 $ -- $ 9,198 $23,308
<FN>
- -----------------
(1) Options granted under the 1990 Employee Stock Option Plan. One-third of the
options vest and become fully exercisable upon each of the first three
anniversaries of the date of grant, except that all such options immediately
vest upon the holder's death while still employed or termination of
employment in connection with a change in control and are subject to
anti-dilution provisions. Payment of the purchase price of shares acquired
upon the exercise of options generally may be in cash, by check, or by
delivery of shares of Common Stock, or by other permitted methods, including
broker-assisted "cashless exercise" methods.
(2) The amounts set forth are based on assumed appreciation of 0% and the 5% and
10% rates as prescribed by the Securities and Exchange Commission rules and
are not intended to forecast future appreciation, if any, of the stock
price. The Company did not use an alternate formula for a grant date
valuation as it is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or volatile
factors. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the future performance of the stock. There can be
no assurance that the amounts reflected in this table will be achieved.
</FN>
</TABLE>
8
<PAGE>
OPTION EXERCISES AND FISCAL YEAR END VALUES
The following table sets forth for each of the Named Executive Officers: (a)
the number of shares of Common Stock acquired upon the exercise of options
during 1996; (b) the value realized from options exercised during 1996; (c) the
number of options held as of December 31, 1996, both exercisable and
unexercisable; and (d) the value of such options as of that date.
No named executive officer exercised any options during the last fiscal year.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUE AT LAST FISCAL YEAR END
Number of Value of Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Shares Year End # Year-End
Acquired Value Exercisable(1)/ $ Exercisable(1)/
Name on Exercise Realized Unexercisable Unexercisable
- ---- ------------ -------- ---------------- --------------
<S> <C> <C> <C> <C>
Morris Weissman....... -- -- 116,666/792,667 $286,957 /$1,983,001
John T. Gorman........ -- -- 40,000/90,600 $100,600 / $232,675
Harvey J. Kesner...... -- -- 0/56,500 $0 / $151,688
Ward A. W. Urban...... -- -- 0/15,700 $0 / $ 46,038
Patrick J. Gentile.... -- -- 0/16,500 $0 / $ 47,938
<FN>
- ----------
(1) AMOUNTS SHOWN EXCLUDE PERFORMANCE WARRANTS HELD BY MESSRS. WEISSMAN AND
GORMAN UNDER THE COMPANY'S PERFORMANCE WARRANT PLAN IN THE AMOUNTS OF
139,500 AND 16,000, RESPECTIVELY. ALL OF SUCH PERFORMANCE WARRANTS ARE
PRESENTLY EXERCISABLE THROUGH JULY 26, 2006 AT AN EXERCISE PRICE OF
$0.011 PER SHARE, SUBJECT TO ANTI-DILUTION PROVISIONS. THE AGGREGATE
VALUE OF UNEXERCISED IN-THE-MONEY PERFORMANCE WARRANTS AT 1996 FISCAL
YEAR END WAS $643,653 AND $73,824 FOR MESSRS. WEISSMAN AND GORMAN,
RESPECTIVELY.
</FN>
</TABLE>
9
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS
The following table sets forth for each of the Named Executive Officers
certain information concerning long-term cash incentive awards granted in 1996
pursuant to the Company's Executive Incentive Plan.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
Number of Performance or other Estimated Future Payouts Under Non-Stock
Shares, Units Period Until Price-Based Plans
Or Other Maturation on Threshold Target Maximum
Name Rights (#)(1) Payout ($ or #) ($ or #)(2) ($ or #)
---- ------------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Morris Weissman 25,000 Units 1996-1999 $ 50,000 $500,000 $1,000,000
John T. Gorman 3,500 Units 1996-1999 $ 7,000 $ 70,000 $ 140,000
Harvey J. Kesner 3,500 Units 1996-1999 $ 7,000 $ 70,000 $ 140,000
Ward A. W. Urban 1,500 Units 1996-1999 $ 3,000 $ 30,000 $ 60,000
Patrick J. Gentile 1,500 Units 1996-1999 $ 3,000 $ 30,000 $ 60,000
<FN>
(1) Awards consists of units under the Company's Executive Incentive Plan with
a nominal value of $2 per unit. Units will appreciate in value depending
upon the extent by which the Company's operating income exceeds 10% of ROE
(as defined) on a year-by-year or cumulative basis over the 1996-1999
period. Awards are only payable in cash in two installments in 1999 and
2000, or following a change in control, and are forfeited upon resignation
or termination prior to March 6, 1999. ROE is defined as the fraction the
numerator of which is equal to the Company's pre-tax income (including
income from minority holdings, joint ventures, dividends from investments
and like income) before extraordinary charges or similar one-time
non-recurring losses or reserves not in the ordinary course plus
depreciation and amortization, and the denominator of which is calculated
as a simple average of the average monthly common equity (beginning of
month common equity plus end of month common equity divided by two) for the
calendar year.
(2) Target award is not determinable. Amounts are based on 1996 performance.
</FN>
</TABLE>
RETIREMENT PLAN
Effective April 1, 1994, the Board of Directo s approved a supplemental
retirement plan for certain executives and management employees of the Company
(the "SERP"). In general, the SERP provides that a participant retiring at age
65 will receive a monthly retirement benefit equal to an amount determined, in
the case of the Company's senior executives, including the Named Executive
Officers, by multiplying the participant's "final average compensation" (as
defined in the SERP) by a percentage equal to 3% for each of the first ten years
plus 1.5% for each of the next twenty years, of service, or for junior level
executives, by a percentage equal to 2% for each of the first ten years, 1.5%
for each of the next ten years and 1% for each of the next ten years. The result
of the computation is decreased by a participant's Social Security Benefit and
any amounts available from the participant's pension or profit sharing plan from
the Company or its predecessors. The retirement income is to be paid at normal
or deferred retirement dates for life only with the appropriate actuarial
reduction of a joint and survivor election. Early retirement benefits are
available with a reduction of 2% for each year less than age 62.
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<PAGE>
No benefit will be provided prior to a participant achieving age 55 and 10 years
of service. All participants will receive credit for past service to the Company
or any of its wholly-owned subsidiaries. Amounts of compensation in excess of
$300,000 increased by 6% on each plan anniversary date commencing April 1, 1995,
will not be considered when calculating plan benefits. The Company has
established a grantor trust to which the Company can contribute assets that will
be held subject to claims of the Company's creditors until paid to SERP
participants and their beneficiaries. Mr. Weissman's benefit in the SERP is
calculated based upon compensation of $750,000. Mr. Weissman will be required to
provide minimum numbers of service years as provided in his agreement.
The following table shows the estimated nnual benefit payable to employees
in various compensation and years of service categories based upon the senior
executive accrual rates. The estimated benefits apply to an employee retiring at
age sixty-five in 1996 who elects to receive his or her benefit in the form of a
single life annuity. These benefits would be reduced by any benefits
attributable to the Company's (and its predecessor's) contributions (and the
earnings thereon) to pension and/or profit sharing plans and social security.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------------------
REMUNERATION 10 15 20 25 30
- ------------ -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C>
$100,000........... $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000
125,000........... 37,500 46,875 56,250 65,625 75,000
150,000........... 45,000 56,250 67,500 78,750 90,000
200,000........... 60,000 75,000 90,000 105,000 120,000
250,000........... 75,000 93,750 112,500 131,250 150,000
300,000........... 90,000 112,500 135,000 157,500 180,000
337,080........... 101,124 126,405 151,686 176,967 202,248
</TABLE>
DIRECTOR COMPENSATION
Non-employee Directors presently are paid $25,000 per annum for serving as
Directors and $2,000 for each Board meeting attended in excess of four in any
fiscal year. Non-employee Directors receive $1,000 for each committee meeting
attended. An amendment (the "Amendment") to the Deferred Stock and Compensation
Plan for Non-employee Directors (the "Directors Plan") was approved by stockhold
rs at the 1996 Annual Meeting. The Amendment increased to 3,000 the number of
Common Stock equivalent awards which each director will automatically receive on
an annual basis and provides automatic grants of up to 2,000 Common Stock
equivalents to Committee chairpersons. Newly appointed directors will also
receive a one-time award of 7,500 Common Stock equivalents under the Amendment.
Upon approval of the Amendment, Messrs. Goldsmith, Hechler and Rowe-Beddoe
canceled their awards of 15,000 options issued under the terminated 1992
Directors Plan and received a one-time award of 7,500 Common Stock equivalents.
A maximum of 5,000 common stock equivalents per year for each director was
awarded under the Amendment, exclusive of the one-time awards to directors. In
all other respects the Directors Plan remains unchanged. Under the terms of the
Directors Plan, Common Stock equivalents are held in a director's deferred stock
account. Directors elected or appointed other than at an annual meeting are
awarded a pro rata amount of Common Stock equivalents. As a result of the
Amendment, 10,500, 10,500, 12,500, 12,500, 12,500 and 7,500 Common Stock
equivalents were awarded to each of Ms. Anderson, Dr. Arias and Messrs.
Goldsmith, Hechler, Rowe-Beddoe and Teo, respectively, during 1996.
Effective October 1, 1996, non-employee Directors receive $2,000 per annum
for each committee membership and $5,000 for each committee chair held. These
fees are subject to irrevocable defer al elections, whereby (in addition to any
other cash fees elected for deferral) a cash/debenture account is credited in
the amount of the fees deferred which is convertible into the
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<PAGE>
number of common shares as would equal the fees deferred in January of the year
following the credit plus accrued interest at the seven-year treasury rate. Upon
termination of services, directors receive interest plus the greater of the
value of the debenture account (in cash in 5 annual installments) or the shares
of common stock into which the debentures are convertible. The deferred accounts
are payable in cash upon a change in control or as otherwise determined by the
Compensation Committee. At year end, approximately $1,054, $4,745, $3,427,
$2,900, and $528 were accrued for Ms. Anderson and Messrs. Goldsmith, Hechler,
Rowe-Beddoe and Teo, respectively.
A Common Stock equivalent is the hypothetical equivalent of the Common Stock
that has a value on any date equal to the mean of the high and low trading
prices of the Common Stock on such date, and is adjusted to reflect stock
dividends, splits and reclassifications. In January of the year following the
year of termination of services, each director receives payment in shares of
Common Stock equal to the balance of Common Stock equivalents in his or her
deferred stock account. In the event of a change in control, Common Stock
equivalents have a value based on the highest price of the Common Stock during
the thirty days preceding such change in control and will be paid in cash or
otherwise as the Compensation Committee may prescribe.
The Company does not provide any Director retirement benefits.
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Item 12. Security Ownership Of Certain Beneficial Owners And Management.
The following table reflects the number of shares of Common stock
beneficially owned on April 15, 1997 by each Director, each of the Named
Executive Officers and by all Directors and executive officers as a group. No
other person is known to the Company to own as of such date more than 5% of any
class of equity securities of the Company.
<TABLE>
<CAPTION>
AMOUNT AND PERCENTAGE
NATURE OF OF CLASS
BENEFICIAL BENEFICIALLY
NAME AND ADDRESS OWNERSHIP(1)(2) OWNED
---------------- --------------- -----
<S> <C> <C>
Bette B. Anderson........................... 13,600 *
Dr. Oscar Arias S........................... 11,150 *
Patrick J. Gentile.......................... 7,375 *
C. Gerald Goldsmith......................... 16,200 *
John T. Gorman.............................. 178,100 (3) *
Ira J. Hechler.............................. 229,300 1.2%
Harvey J. Kesner............................ 79,459 (4) *
David S. Rowe-Beddoe........................ 15,100 *
Alfred Teo.................................. 1,896,000 9.5%
Ward A.W. Urban............................. 7,108 *
Morris Weissman............................. 1,773,536 (3)(5)(6) 8.5%
All Directors and executive officers
as a group (11 persons).................... 4,226,928 (3)(4)(5)(6) 20.0%
<FN>
- ----------------
(1) Unless otherwise indicated, each stockholder has sole voting and
investment power.
(2) Includes Common Stock issuable upon the exercise of stock options
exercisable within 60 days of April 15, 1997 in the amount of 5,500,
70,200, 18,834, 5,233 and 408,666 for Messrs. Gentile, Gorman, Kesner,
Urban and Weissman, and 508,433 for all executive officers, respectively.
Includes Director Common Stock equivalent units under the Deferred Stock
and Compensation Plan for Non-employee Directors in the amount of 13,100,
11,150, 15,100, 15,100, 15,100, and 7,500 units for Ms. Anderson, Dr. Arias
and Messrs. Goldsmith, Hechler, Rowe-Beddoe and Teo, respectively. Excludes
common shares that may be issued to Directors in connection with deferred
director fees under the Deferred Stock and Compensation Plan for
Non-employee Directors in the amount of 242, 1,091, 788, 667, and 121
shares for Ms. Anderson and Messrs. Goldsmith, Hechler, Rowe-Beddoe and
Teo, respectively.
(3) Includes Common Stock issuable upon the exercise of performance warrants
issued under the Company's Performance Warrant Plan that are exercisable
within 60 days of April 15, 1997 in the amount of 139,500 and 16,000 for
Messrs.
Weissman and Gorman and 155,500 for all executive officers, respectively.
(4) Includes 34,625 shares held in trust, as to which Mr. Kesner has
sole voting and investment power.
(5) Includes (i) 95,000 shares held by spouse as to which he disclaims
beneficial ownership and (ii) 60,000 shares as to which Mr. Weissman has
sole voting power and a right of first refusal with respect to any future
sales.
(6) Excludes 30,625 shares of Common Stock held in trust as to which Mr.
Weissman disclaims beneficial ownership, issued March 27, 1995 in lieu of a
portion of Mr. Weissman's 1994 bonus.
* Less than 1%.
</FN>
</TABLE>
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Item 13. Certain Relationships and Related Transactions.
The Company retained Kelly, Anderson, Pethick & Associates, of which Ms.
Anderson, a Director, is Vice Chairperson and an owner, for marketing and
business development ervices primarily involving the Company's government
contracts business. During 1996, the Company paid approximately $72,400 for
services performed. The Company has for many years prior to Ms. Anderson's
election as a Director utilized the services of Ms. Anderson's firm as a
government consultant.
On April 13, 1995, the Company loaned Mr. Weissman $185,750. The loan bears
interest, payable annually, at a rate equal to the rate published by Citibank,
NA as its base rate, from time to time. The loan matures on April 13, 1998. On
March 31, 1997, the amount outstanding under the loan was approximately
$215,000, which was the maximum amount outstanding to date.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN BANKNOTE CORPORATION
Registrant
By: /s/ John T. Gorman
----------------------
John T. Gorman
Executive Vice President
Chief Financial Officer
and Chief Accounting Officer
Dated: April 30, 1997
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