U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-5703
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SIEBERT FINANCIAL CORP.
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(Name of small business issuer in its charter)
NEW YORK 11-1796714
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
885 THIRD AVENUE, NEW YORK, NEW YORK 10022
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (212) 644 - 2400
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Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
NONE NONE
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Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $25,867,283
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As of April 27, 1998, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $9,575,000 based on the
closing price of the Common Stock on the Nasdaq SmallCap Market on that date.
As of April 27, 1998, there were 20,993,640 shares of Common Stock outstanding.
<PAGE>
EXPLANATORY NOTE
This Form 10-KSB/A1 is being filed by Siebert Financial Corp., a New York
corporation (the "Company"), as an amendment to its Annual Report on Form 10-KSB
for the year ended December 31, 1997, filed March 31, 1998, to include certain
additional information into items 9,10,11 and 12 of Part III of such Form that
was previously proposed to be incorporated by reference into Siebert Financial
Corp.'s definitive proxy statement for its 1998 annual meeting of shareholders
to be filed by the registrant pursuant to Regulation 14A.
The financial and other information contained in Part III herein with respect to
the Company has been adjusted where applicable to give effect to the 4 for 1
stock split effective April 7, 1998.
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<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
(a) Identification of Directors
The directors of the Company are:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Muriel F. Siebert 65 Chair, President and Director
Nicholas P. Dermigny 40 Executive Vice President,
Chief Operating Officer and
Director
Patricia L. Francy 53 Director
Jane H. Macon 51 Director
Monte E. Wetzler 61 Director
</TABLE>
Certain information regarding each director's business experience is
set forth below.
MURIEL F. SIEBERT has been Chair, President and a director of Siebert
since 1967 and the Company since November 8, 1996. The first woman member of the
New York Stock Exchange on December 28, 1967, Ms. Siebert served as
Superintendent of Banks of the State of New York from 1977 to 1982. She is a
director of the New York State Business Council, the National Women's Business
Council, the International Women's Forum and the Boy Scouts of Greater New York.
NICHOLAS P. DERMIGNY has been Executive Vice President and Chief
Operating Officer of Siebert since joining the firm in 1989 and the Company
since November 8, 1996. Prior to 1993, he was responsible for the retail
division of the Company. Mr. Dermigny became a director of the Company on
November 8, 1996.
PATRICIA L. FRANCY is Treasurer and Controller of Columbia University.
She previously served as the University's Director of Finance and Director of
Budget Operations and has been associated with the University since 1969. Ms.
Francy became a director of the Company on March 11, 1997.
JANE H. MACON is a partner with the law firm of Fulbright & Jaworski
L.L.P., San Antonio, Texas. Ms. Macon has been associated with the firm since
1983. Ms. Macon became a director of the Company on November 8, 1996.
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<PAGE>
MONTE E. WETZLER is a partner with the New York law firm of Brown
Raysman Millstein Felder & Steiner, LLP and chairman of its corporate
department. From 1988 until October 31, 1996, Mr. Wetzler was a partner with the
New York law firm of Whitman Breed Abbott & Morgan, chairman of its corporate
department and a member of its executive committee. Mr. Wetzler became a
director of the Company on November 8, 1996.
The Board of Directors has standing Audit and Compensation Committees
consisting of Ms. Francy, Ms. Macon and Mr. Wetzler with Ms. Siebert serving as
a non-voting member.
Directors are elected by the shareholders at each annual meeting or, in
the case of a vacancy, appointed by the directors then in office, to serve until
the next annual meeting or until their successors are elected and qualified.
Pursuant to the Company's bylaws, its officers are chosen annually by the Board
of Directors and hold office until their respective successors are chosen and
qualified.
ITEM 10. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION OF THE COMPANY
The following table sets forth certain information with respect to
compensation awarded to, earned by or paid to (a) the Company's Chief Executive
Officer and (b) each of the four most highly compensated executive officers of
the Company as of the 1997 year end (other than the Chief Executive Officer)
whose total annual salary and bonus exceeded $100,000, in each case for the
preceding three fiscal years. In 1997, 1996 and 1995, there were only two such
persons.
SUMMARY COMPENSATION TABLE
Name and Principal Position Year Salary ($) Bonus($)
- --------------------------- ---- ---------- --------
Muriel F. Siebert 1997 $ 150,000 $ --
Chair and President 1996 150,000 2,975,000
1995 108,000 3,017,000
Nicholas P. Dermigny 1997 125,000 187,500
Executive Vice President 1996 125,000 205,000
and Chief Operating Officer 1995 125,000 175,000
Daniel Iesu 1997 50,000 65,000
Secretary 1996 50,000 53,250
1995 47,692 42,500
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<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its subsidiaries are
paid a fee at an annual rate of $10,000. On March 11, 1997, each of the
non-employee directors of the Company received an option to purchase 40,000
shares of Common Stock at an exercise price of $2.313 per share expiring on the
fifth anniversary of the date of grant. Officers and employees of the Company or
its subsidiaries receive no remuneration for their services as directors. The
Company indemnifies its directors to the extent permitted by applicable law.
STOCK OPTION PLAN
The Company's 1997 Stock Option Plan (the "Stock Option Plan") was
adopted by the Board of Directors in March 1997 and approved by the shareholders
on December 1, 1997. The Stock Option Plan permits the issuance of either
options intended to qualify as incentive stock options ("Incentive Stock
Options") under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), or options not intended to so qualify ("Nonstatutory Stock
Options"). The aggregate fair market value of Common Stock for which a
participant is granted Incentive Stock Options that first become exercisable
during any given calendar year will be limited to $100,000. To the extent such
limitation is exceeded, an option will be treated as a Nonstatutory Stock
Option.
The Stock Option Plan provides for the grant of options to purchase up
to 2,100,000 shares of Common Stock to employees of the Company and its
subsidiaries. The Stock Option Plan is administered by a committee of the Board
of Directors consisting of Patricia L. Francy, Jane H. Macon and Monte E.
Wetzler (the "Committee") that selects persons to receive awards under the Stock
Option Plan, determines the amount of each award and the terms and conditions
governing such award, interprets the Stock Option Plan and any awards granted
thereunder, establishes rules and regulations for the administration of the
Stock Option Plan and takes any other action necessary or desirable for the
administration of the Stock Option Plan. The Stock Option Plan may be amended by
the Board of Directors as it deems advisable; PROVIDED, HOWEVER, that no
amendment will become effective unless approved by affirmative vote of the
Company's shareholders if such approval is necessary for the continued validity
of the Stock Option Plan or if the failure to obtain such approval would
adversely affect the compliance of the Stock Option Plan under any applicable
rule or regulation. No amendment may, without the consent of a participant,
impair such participant's rights under any option previously granted under the
Stock Option Plan.
The price for which shares of Common Stock may be purchased upon the
exercise of an option will be the fair market value of such shares on the date
of the grant of such option; PROVIDED, HOWEVER, that an Incentive Stock Option
granted to an employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company shall have a
purchase price for the underlying shares equal to 110% of the fair market value
of the Common Stock on the date of grant. An option may be granted for a term
not to exceed ten years from the date such option is granted. An Incentive Stock
Option awarded to an
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<PAGE>
employee who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company may not, in any event, be
exercisable after the expiration of five years from the date such Incentive
Stock Option is granted. All options will be exercisable in accordance with the
terms and conditions set forth in the option agreements evidencing the grant of
such options. Except under limited circumstances involving termination of
employment due to retirement or death or disability, a participant may not
exercise any option granted under the Stock Option Plan within the first year
after the date of the grant of such option.
Full payment of the purchase price for shares of Common Stock purchased
upon the exercise, in whole or in part, of an option granted under the Stock
Option Plan must be made at the time of such exercise. The Stock Option Plan
provides that the purchase price may be paid in cash or in shares of Common
Stock valued at their fair market value on the date of purchase. Alternatively,
an option may be exercised in whole or in part by delivering a properly executed
exercise notice, together with irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds necessary to pay the
purchase price and applicable withholding taxes, and any other documents that
the Committee deems necessary.
During a participant's lifetime, options granted under the Stock Option
Plan will be exercisable only by such participant. Furthermore, any options
granted under the Stock Option Plan may not be transferred, other than by will
or by the laws of descent and distribution. Notwithstanding the foregoing, a
participant may transfer a Nonstatutory Stock Option granted under the Stock
Option Plan to his or her spouse, children and/or grandchildren, or to one or
more trusts for the benefit of such family members, if the agreement evidencing
such option so provides and the participant does not receive any consideration
for the transfer.
On May 16, 1997, the Company granted options to certain of its
employees at an exercise price of $2.313 per share, including options to
purchase 200,000 shares of Common Stock to its Executive Vice President and
Chief Operating Officer and 60,000 shares of Common Stock to its Secretary. On
November 6, 1997, the Company granted options to purchase 40,000 shares of
Common Stock to its Executive Vice President and Chief Financial Officer at an
exercise price of $2.219 per share. On February 9, 1998, the Company granted
options to certain of its employees at an exercise price of $2.688 per share,
including options to purchase 40,000 shares of Common Stock to its Executive
Vice President and Chief Operating Officer and 8,000 shares of Common Stock to
its Executive Vice President and Chief Financial Officer and 8,000 shares of
Common Stock to its Secretary. All such options are exercisable at a rate of 20%
on the first, second, third, fourth and fifth anniversaries of the date of grant
and expire after the tenth anniversary of the date of grant; options to purchase
an aggregate of approximately 792,400 shares of Common Stock are currently
outstanding and held by 37 employees. Details of such grants are summarized
below:
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<PAGE>
<TABLE>
<CAPTION>
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1997 STOCK OPTION PLAN
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Name and Position Fair Value ($)(1) Number of Units
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<S> <C> <C>
Muriel F. Siebert, Chair and President 0 0
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Nicholas P. Dermigny, Executive 287,200 240,000
Vice President and Chief Operating Officer
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Richard M. Feldman, Executive 55,440 48,000
Vice President, Chief Financial Officer and Assistant
Secretary
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Daniel Iesu, Secretary 82,040 68,000
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Executive Group (4 persons) 624,680 356,000
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Patricia L. Francy 0 0
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Jane H. Macon 0 0
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Monte E. Wetzler 0 0
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Non-Executive Director Group (3 persons) 0 0
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Non-Executive Officer Employee 643,782 523,400
Group (approximately 35 persons)
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</TABLE>
RESTRICTED STOCK AWARD PLAN
The 1998 Restricted Stock Award Plan (the "Plan"), provides for awards
of not more than 15,000 shares of Common Stock, subject to adjustments for stock
splits, stock dividends and other changes in the Company's capitalization, to
key employees, to be issued either immediately after the award or at a future
date. As a result of the 4 for 1 stock split in April 1998, the 15,000 shares of
Common Stock provided for in the Plan has been adjusted to 60,000 shares. As
provided in the Plan and subject to restrictions, shares awarded may not be
disposed of by the recipients for a period of one year from the date of the
award. Cash dividends on shares awarded are held by the Company for the benefit
of the recipients, subject to the same restrictions as the award. Such dividends
(without interest) are paid to the recipients upon lapse of the restrictions.
Pursuant to the Plan, 400 shares of the Company's Common Stock was
awarded to each of 110 employees of the Company, effective January 5, 1998.
Additional awards of 400 shares were granted to each of three individuals,
effective February 20, 1998. For shares that have been issued, the market value
at the date of the awards was $2.25 and $5.75, respectively.
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(1) The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions: dividend yields ranging from 0% to 3.3% percent, expected
volatility ranging from 25% to 39% percent, risk-free interest rates ranging
from 6.20% to 6.43%, and expected lives ranging from 5 to 10 years.
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<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of April 27, 1998, certain
information with respect to beneficial ownership of the Common Stock by each
person (or group of affiliated persons) who is known to the Company to own
beneficially more than 5% of the Common Stock, by each of the Company's
directors and executive officers and by all directors and executive officers as
a group. The persons named in the table have sole voting and investment power
with respect to all shares of Common stock shown as beneficially owned by them.
Name Shares Percentage(1)
- ---- ------ ----------
Muriel F. Siebert 20,212,000 96.3%(2)
885 Third Avenue, Suite 1720
New York, New York 10022
Nicholas P. Dermigny 400 *
Richard M. Feldman 400 *
Daniel Iesu 400 *
Patricia L. Francy 40,000(3) *
Jane H. Macon 40,000(3) *
Monte E. Wetzler 40,000(3) *
Directors and executive officers 20,333,200(4) 96.9%
as a group (7 persons)
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* Less than 1%
(1) Percentages computed on the basis of 20,993,640 shares of Common Stock
outstanding as of April 27, 1998 in accordance with Rule 13d-3
promulgated under the Exchange Act.
(2) Includes 222,000 shares of Common Stock owned by the Muriel F. Siebert
Foundation, Inc. as to which shares Ms. Siebert has voting and
investment power.
(3) Consists of 40,000 shares of Common Stock which the director has the
right to acquire pursuant to a stock option grant.
(4) Includes options to purchase an aggregate of 120,000 shares of Common
Stock described in footnote 3 above.
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<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As a registered broker-dealer, the Company is subject to the Uniform
Net Capital Rule (Rule 15c3-1) promulgated by the SEC. "Net capital" is defined
as net worth (assets minus liabilities), plus qualifying subordinated
borrowings, less certain deductions. Ms. Siebert has executed subordinated notes
in favor of the Company in the principal amount of $3 million which bear
interest at rates ranging from 4% to 8%.
The foregoing relationship and transactions have been approved by the
Board or a committee of the Board or by the shareholders and, to the extent that
such arrangements are available from non-affiliated parties, are on terms no
less favorable to the Company than those available from non-affiliated parties.
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<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SIEBERT FINANCIAL CORP.
By: /s/ MURIEL F. SIEBERT
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Muriel F. Siebert
Chair and President
(principal executive officer)
Date: April 29, 1998
By: /s/ RICHARD M. FELDMAN
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Richard M. Feldman
Executive Vice President
Chief Financial Officer and
Assistant Secretary
(principal financial and
accounting officer)
Date: April 29, 1998
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