<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
{Mark One}
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: January 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition from _________________________________ to
Commission File number: 0-13063
AUTOTOTE CORPORATION
--------------------
(Exact name of registrant as specified in its charter)
Delaware 81-0422894
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
750 Lexington Avenue, New York, New York 10022
----------------------------------------------
(Address of principal executive offices)
(Zip Code)
(212)-754-2233
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports 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
--- --
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of March 11, 1996:
Class A Common Stock: 31,456,164
Class B Common Stock: None
Page 1 of 14
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER INFORMATION
QUARTER ENDED JANUARY 31, 1996
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Balance Sheets as of January 31, 1996 (Unaudited)
and October 31, 1995 3
Statements of Operations for the Three Months Ended
January 31, 1996 and 1995 (Unaudited) 4
Statements of Cash Flows for the Three Months Ended
January 31, 1996 and 1995 (Unaudited) 5
Notes to Consolidated Financial Statements
(Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
2
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JANUARY 31, OCTOBER 31,
1996 1995
---------------------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents...................................... $ 7,009 4,991
Restricted cash................................................ 527 1,282
Accounts receivable, net....................................... 19,467 21,700
Inventories.................................................... 8,932 12,497
Unbilled receivables........................................... 8,638 4,166
Prepaid expenses, deposits and other current assets............ 3,180 3,121
--------- --------
Total current assets................................. 47,753 47,757
--------- --------
Property and equipment, at cost..................................... 184,375 186,005
Less accumulated depreciation.................................. 71,571 67,745
--------- --------
Net property and equipment........................... 112,804 118,260
--------- --------
Goodwill, net of amortization....................................... 25,536 26,986
Operating right, net of amortization................................ 17,598 17,848
Other assets and investments........................................ 29,408 30,170
--------- --------
$ 233,099 241,021
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current installments of long-term debt......................... $ 11,166 10,772
Accounts payable............................................... 16,545 16,448
Accrued liabilities............................................ 22,135 23,783
Income taxes payable........................................... 2,739 1,878
--------- --------
Total current liabilities............................ 52,585 52,881
--------- --------
Deferred income taxes............................................... 5,651 5,807
Accrued litigation settlement....................................... 6,800 --
Other long-term liabilities......................................... 3,458 3,984
Long-term debt, excluding current installments...................... 125,687 126,492
Long-term debt, convertible subordinated debentures................. 40,000 40,000
--------- --------
Total liabilities.................................... 234,181 229,164
--------- --------
Stockholders' equity (deficit):
Preferred stock, par value $1.00 per share, 2,000
shares authorized, none outstanding............................ -- --
Class A common stock, par value $0.01 per share,
99,300 shares authorized, 30,942 and 30,520 shares
outstanding at January 31, 1996 and October 31, 1995,
respectively................................................... 310 306
Class B non-voting common stock, par value $0.01 per
share, 700 shares authorized, none outstanding................. -- --
Additional paid-in capital..................................... 142,027 140,050
Accumulated deficit............................................ (143,270) (129,469)
Treasury stock, at cost........................................ (102) (295)
Translation adjustment......................................... (47) 1,265
--------- --------
Total stockholders' equity (deficit)................. (1,082) 11,857
--------- --------
$ 233,099 241,021
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
QUARTERS ENDED JANUARY 31, 1996 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------------
<S> <C> <C>
Operating revenues:
Wagering systems....................................................... $29,568 28,976
Wagering equipment and other sales..................................... 13,738 2,141
------- ------
43,306 31,117
------- ------
Operating expenses (exclusive of depreciation and amortization):
Wagering systems....................................................... 18,847 16,747
Wagering equipment and other sales..................................... 8,698 1,496
------- ------
27,545 18,243
------- ------
Total gross profit............................................. 15,761 12,874
------- ------
Selling, general and administrative expenses................................ 8,170 7,695
Depreciation and amortization............................................... 9,436 7,717
------- ------
Operating loss................................................. (1,845) (2,538)
------- ------
Other deductions (income):
Interest expense....................................................... 3,662 2,849
Litigation settlement.................................................. 6,800 --
Other deductions (income).............................................. 292 (108)
------- ------
10,754 2,741
------- ------
Loss before income tax expense................................. (12,599) (5,279)
Income tax expense.......................................................... 1,202 652
------- ------
Net loss....................................................... $(13,801) (5,931)
======= ======
Loss per common share....................................................... $ (0.45) (0.21)
======= ======
Weighted average number of common shares outstanding........................ 30,905 28,810
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTERS ENDED JANUARY 31, 1996 AND 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
--------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss....................................................................... $(13,801) (5,931)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization........................................ 9,436 7,717
Loss on disposal of building......................................... 454 --
Change in deferred income taxes...................................... (150) 2,259
Litigation settlement................................................ 6,800 --
Non-cash interest charges............................................ 554 --
Changes in operating assets and liabilities, net of effects of
acquisitions......................................................... 1,279 (2,192)
Other................................................................ 362 157
------- -------
Total adjustments............................................... 18,735 7,941
------- -------
Net cash provided by operating activities........................................... 4,934 2,010
------- -------
Cash flows from investing activities:
Capital expenditures........................................................... (338) (2,832)
Expenditures for equipment under wagering systems contracts.................... (2,420) (3,323)
Proceeds from sale of building................................................. 987 --
Increase in other assets and other liabilities................................. (441) (2,145)
Purchase of companies, net of cash acquired.................................... -- (15,826)
------- -------
Net cash used in investing activities............................................... (2,212) (24,126)
------- -------
Cash flows from financing activities:
Net borrowings under revolving credit facility................................. 760 22,895
Proceeds from issuance of long-term debt....................................... 538 233
Payments on long-term debt..................................................... (1,587) (366)
Net proceeds from issuance of common stock..................................... -- 163
------- -------
Net cash used by financing activities............................................... (289) 22,925
------- -------
Effect of exchange rate changes on cash............................................. (415) --
------- -------
Increase in cash and cash equivalents............................................... 2,018 809
Cash and cash equivalents, beginning of period...................................... 4,991 6,110
------- -------
Cash and cash equivalents, end of period............................................ $ 7,009 6,919
======= =======
Supplemental cash flow information:
Cash paid during the period for:
Interest....................................................................... $ 3,449 1,400
======= =======
Income taxes................................................................... $ 237 --
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1996
(UNAUDITED)
1) CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of January 31, 1996 and the
consolidated statements of operations for the three month periods ended January
31, 1996 and 1995, and consolidated statements of cash flows for the three
months then ended have been prepared by the Company, without audit. In the
opinion of management, all adjustments necessary to present fairly the financial
position of the Company at January 31, 1996, and the results of its operations
and cash flows for the three months ended January 31, 1996 and 1995 have been
made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1995 Annual Report on Form 10-K. The results
of operations for the period ended January 31, 1996 are not necessarily
indicative of the operating results for the full year.
Certain items in the prior year's financial statements have been
reclassified to conform with the current year presentation.
2) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
JANUARY 31, OCTOBER 31,
1996 1995
--------------------------
(IN THOUSANDS)
<S> <C> <C>
Parts............ $4,466 4,667
Work-in-process.. 2,399 4,724
Finished goods... 1,776 2,541
------ ------
8,641 11,932
Ticket paper..... 291 565
------ ------
Total............ $8,932 12,497
====== ======
</TABLE>
Work-in-process includes costs for equipment expected to be sold. Costs
incurred for equipment associated with specific wagering system contracts not
yet placed in service are classified as construction in progress in property and
equipment.
6
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
JANUARY 31, 1996
(UNAUDITED)
3) DEBT
On January 26, 1996, the Company entered into an Amended and Restated
Credit Agreement (the "Amended and Restated Senior Bank Credit Facility") with
lenders (the "Lenders") to the Company's previous senior bank credit facility
pursuant to which current commitments of each Lender under the previous senior
bank credit facility, totaling $135 million, were continued as the Amended and
Restated Senior Bank Credit Facility. This facility provides for: 1) a $55
million term loan (the "A Term Loan"), 2) a $5 million term loan (the "B Term
Loan"), and 3) a $75 million revolving credit facility (the "Revolver"), which
includes a $25 million sublimit for letters of credit, and contains various
financial and other covenants. See Note 10 to Consolidated Financial Statements
for the year ended October 31, 1995 included in the Company's 1995 Annual Report
on Form 10-K.
On January 31, 1996, the Company made scheduled payments of $0.5
million on the A Term Loan and $0.5 million on the B Term Loan.
As of January 31, 1996, the Company had approximately $3.2 million
available for borrowing under its Revolver, with $1.8 million in outstanding
letters of credit and $129 million in outstanding borrowings.
4) CAPITAL STOCK
In November 1995, the Company entered into an agreement with holders of
its 5.5% Convertible Subordinated Debentures whereby the holders would receive
unregistered shares of Class A Common Stock in lieu of cash for interest
payments due in August 1995 and February 1996 in the amount of $1,100,000 each.
In November 1995, the Company issued 422,500 shares of Class A Common Stock in
payment of the interest due in August 1995. In March 1996, the Company issued
513,869 shares of Class A Common Stock in payment of the interest due in
February 1996.
On January 26, 1996, pursuant to the Amended and Restated Senior Bank
Credit Facility, the Company issued to the Lenders warrants to purchase an
aggregate of 525,000 shares of Class A Common Stock at an exercise price of
$1.25 per share. See Note 10 to Consolidated Financial Statements for the year
ended October 31, 1995 included in the Company's 1995 Annual Report on
Form 10-K.
7
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
JANUARY 31, 1996
(UNAUDITED)
4) CAPITAL STOCK, CONTINUED
The Company does not currently meet the continued listing requirements
for National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") National Market issuers. As a result, NASDAQ informed the Company, in
a letter dated February 21, 1996, that it is reviewing the Company's eligibility
for continued listing on the NASDAQ National Market. It is the Company's
intention to pursue maintaining its current NASDAQ National Market listing.
5) LITIGATION
A) The Company and certain of its officers and directors were named
defendants in a number of lawsuits commenced in February 1995 as class actions
in the United States District Court for the District of Delaware. These
lawsuits were consolidated into one class action in June 1995 (the "Class
Action"). On March 5, 1996, the parties to the Class Action reached an
agreement in principle to settle all claims related to the Class Action without
any admission of liability on the part of any defendant. This settlement is
subject to the execution of certain agreements and court approval, as to which
there can be no assurances.
Pursuant to the terms of the settlement, the plaintiffs would receive
$7.5 million in cash and shares of preferred stock to be issued by the Company
having an aggregate value of $4.25 million. Insurance companies providing
directors and officers insurance will contribute approximately $6.5 million of
the cash portion of the settlement (with $1.25 million of that amount in the
form of a loan to the Company with the payment terms subject to negotiation).
Accordingly, the Company has accrued a charge of $6.5 million to reflect this
anticipated settlement and $0.3 million for anticipated related legal fees in
the accompanying consolidated financial statements.
B) The Company and its subsidiary Autotote Systems, Inc. ("ASI") were
defendants in a 1994 arbitration claim in Singapore by Multivest (PTE) Limited
("Multivest"). The claim, which sought damages in the amount of $250 million for
an alleged breach of contract by ASI in connection with a joint venture with
Multivest, was dismissed on October 12, 1995, and Multivest was ordered to pay
the Company US $120,000 for costs and expenses incurred and Singapore $62,235 as
reimbursements for money paid by the Company for expenses of the arbitration
panel. On February 29, 1996, ASI was awarded approximately US $772,000 on its
counterclaim against Multivest. Because of current uncertainties about the
collectability of the awards, the Company has not recognized the awards in its
financial statements.
8
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
The following discussion addresses the financial condition of the
Company as of January 31, 1996 and the results of operations for the three month
period ended January 31, 1996, compared to the same period last year. This
discussion should be read in conjunction with the Management's Discussion and
Analysis section for the fiscal year ended October 31, 1995 ("fiscal 1995")
included in the Company's 1995 Annual Report on Form 10-K.
FIRST QUARTER FISCAL 1996 COMPARED TO FIRST QUARTER FISCAL 1995
REVENUE ANALYSIS
Revenues increased 39% or $12.2 million to $43.3 million in the first
quarter of the fiscal year ended October 31, 1996 ("fiscal 1996") from $31.1
million in the first quarter of fiscal 1995. The increase is primarily
attributable to higher equipment sales which increased to $13.7 million from
$2.1 million. The additional equipment sales include the delivery of systems by
the Company's Tele Control lottery unit to several German lottery contract sites
as well as an increase in other international equipment sales. Reflecting the
change in Tele Control's revenue mix from primarily service to primarily sales
as a result of those deliveries, Tele Control's service revenue declined $1.2
million, and, accordingly, service revenue for the Company as a whole rose only
2% to $29.6 million for the first quarter of fiscal 1996. In April 1995, the
Company's Connecticut off-track betting subsidiary opened its Sports Haven/TM/
simulcast/multi-entertainment facility, which improved its first quarter fiscal
1996 revenues by $1.0 million or 13% compared to the first quarter of fiscal
1995. The Company's domestic simulcasting business unit improved revenues $0.8
million or 31% in the first quarter of fiscal 1996 compared to the first quarter
of fiscal 1995 due to system efficiencies available from digital compression of
simulcast signals and increased capacity arising from the January 1995
acquisition of transponders from IDB. In the North American pari-mutuel market,
increased revenue from existing customers and new installations was offset, in
large part, by sales lost to severe winter weather conditions that included snow
on the East Coast, and rain and flooding on the West Coast and in West Virginia.
EXPENSE ANALYSIS
The total gross margin of $15.8 million for the first quarter in fiscal
1996 improved $2.9 million, or 22% compared to the first quarter of fiscal 1995.
Reflecting the delivery of systems by the Company's Tele Control lottery unit,
equipment gross margins strengthened to 36.7% in the first quarter of 1996 from
30.1% in the comparable period of 1995; service gross margins decreased to 36.3%
from 42.2% in the same periods.
9
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS - (CONTINUED)
Selling, general and administrative expenses include marketing, sales,
administrative, engineering and software development, finance, legal and other
expenses. Selling, general and administrative expenses increased $0.5 million or
6% to $8.2 million in the first quarter of fiscal 1996 from $7.7 million in the
first quarter of fiscal 1995. Expense reductions resulting from fiscal 1995
restructuring activities and other cost reduction programs of approximately $1.0
million in the first quarter of 1996 were offset by a $0.2 million increase in
engineering and software development expenses, and increased expenses for legal
compliance, litigation and compensation costs.
Depreciation and amortization expenses increased 22% to $9.4 million in
the first quarter of 1996 compared to $7.7 million in the first quarter of
fiscal 1995. The increase was primarily due to the January 1995 acquisition of
the simulcasting assets of IDB, capital additions for North America's pari-
mutuel video gaming operations, new terminals and software installed at the
Connecticut State Lottery, and the increased investment in the new Sports
Haven/TM/ facility in April 1995.
Interest expense increased $0.8 million or 29% to $3.7 million in the
first quarter of 1996, primarily reflecting a $0.4 million increase due to
higher interest rates and a $0.4 million increase due to additional borrowings
incurred to finance fiscal 1995 capital additions in North American pari-mutuel
and video gaming operations, the first quarter fiscal 1995 acquisitions, and
increases in other assets and investments, principally software systems
development costs.
INCOME TAXES
Income tax expense was $1.2 million in the 1996 period as compared to
an expense of $0.7 million in the 1995 period. Income tax expense principally
reflects foreign tax expense, since no tax benefit has been recognized on
domestic operating losses.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $4.9 million for the
first three months of fiscal 1996, of which $2.9 million is attributed to
current period operations, and $0.6 million results from non-cash interest
charges. The balance is attributable to $2.2 million in improved collection of
accounts receivable and a $3.5 million reduction of inventories, partially
offset by a $4.4 million increase in unbilled receivables and reductions of
other current liabilities, primarily $0.4 million paid against restructuring
reserves. At January 31, 1996, the Company had cash and cash equivalents of $7.0
million as compared to $5.0 million at October 31, 1995. The litigation
settlement discussed in Note 5(a) to Consolidated Financial Statements above did
not have any effect on cash flows during the quarter.
10
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - (CONTINUED)
Net cash used in investing activities was $2.2 million for the first
quarter of fiscal 1996. Utilizing cash provided by operating activities, the
Company invested in contract expenditures and software systems development
costs. Additionally, the Company received approximately $1.0 million principally
from the sale/leaseback of its administration and development facility in
Newark, Delaware. The net proceeds from this transaction were used to reduce
borrowings under the Company's previous senior bank credit facility.
Net cash used by financing activities consisted primarily of borrowings
of $2.5 million and repayments of $1.7 million under the Revolver in addition to
scheduled repayments of $1.0 million on the Company's term loans. Additionally,
under an agreement with the holders of its 5.5% Convertible Subordinated
Debentures, the Company issued 422,500 unregistered shares of Class A Common
Stock in lieu of cash for interest payments during the first quarter of fiscal
1996.
The Company's wagering system contracts are capital intensive,
requiring substantial initial cash outlays which are recouped over time from
cash flows from the contracts. The amounts of the Company's future capital
expenditures for wagering systems equipment will depend on the Company's ability
to enter into service contracts with new customers and renewal of existing
contracts with systems upgrades. Each new customer may require the manufacture
and assembly of a new wagering system unless the dates of operations and
requirements of a new wagering facility allow an existing system to be used at
such facility. Under some circumstances, the Company may be required to begin
development of wagering systems prior to award of a contract in a competitive
bidding situation. Expenditures related to sales of the Company's wagering
equipment are generally funded, in part, by customer advance payments.
As described in Note 3 to Consolidated Financial Statements above,
the Company had approximately $3.2 million available to borrow under its Amended
and Restated Senior Bank Credit Facility at January 31, 1996. The Company
believes that its cash resources at that date and its forecasted cash flows from
operations provide sufficient liquidity to meet scheduled payments and
anticipated capital expenditures in the current fiscal year arising from current
commitments. The Company believes that additional financing and/or asset sales
will be required to meet its scheduled payments and capital requirements in
subsequent fiscal years. The Company is currently exploring financing and asset
sales alternatives while simultaneously developing programs to reduce its level
of ongoing expenditures. The Company will be required to evaluate its capital
outlays and commitments in light of the availability and timing of additional
financing, which currently remains uncertain.
11
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
QUARTER ENDED JANUARY 31, 1996
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A) The Company and certain of its officers and directors were named
defendants in a number of lawsuits commenced in February 1995 as class actions
in the United States District Court for the District of Delaware. These lawsuits
were consolidated into one class action in June 1995 (the "Class Action"). On
March 5, 1996, the parties to the Class Action reached an agreement in principle
to settle all claims related to the Class Action without any admission of
liability on the part of any defendant. This settlement is subject to the
execution of certain agreements and court approval, as to which there can be no
assurances.
Pursuant to the terms of the settlement, the plaintiffs would receive
$7.5 million in cash and shares of preferred stock to be issued by the Company
having an aggregate value of $4.25 million. Insurance companies providing
directors and officers insurance will contribute approximately $6.5 million of
the cash portion of the settlement (with $1.25 million of that amount in the
form of a loan to the Company with the payment terms subject to negotiation).
Accordingly, the Company has accrued a charge of $6.5 million to reflect this
anticipated settlement and $0.3 million for anticipated related legal fees in
the accompanying consolidated financial statements.
B) The Company and its Autotote Systems, Inc. subsidiary ("ASI") were
defendants in an arbitration claim in Singapore by Multivest (PTE) Limited
("Multivest"). The claim, which sought damages in the amount of $250 million
for an alleged breach of contract by ASI in connection with a joint venture with
Multivest, was dismissed on October 12, 1995, and Multivest was ordered to pay
the Company US $120,000 for costs and expenses incurred and Singapore $62,235 as
reimbursements for money paid by the company for expenses of the arbitration
panel. On February 29, 1996, ASI was awarded approximately US $772,000 on its
counterclaim against Multivest. Because of current uncertainties about the
collectability of the awards, the Company has not recorded such amounts in its
financial statements.
12
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
QUARTER ENDED JANUARY 31, 1996
PART II. OTHER INFORMATION - (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.45 - Employment Agreement dated February 22, 1996 between
the Registrant and William Luke. (*)
Exhibit 27 - Financial Data Schedule
(b) No Reports on Form 8-K were filed during the first quarter of fiscal
1996. A Form 8-K Report, reporting an Item 5, was filed on March 7,
1996 to extend the date to March 28, 1996 by which any proposal to
be presented at the next annual meeting of stockholders must be
received by the Secretary of the Registrant.
(*) Includes management contracts and compensation plans and
arrangements.
13
<PAGE>
AUTOTOTE CORPORATION AND SUBSIDIARIES
QUARTER ENDED JANUARY 31, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
AUTOTOTE CORPORATION
--------------------
(Registrant)
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President and
Chief Financial Officer
Dated: March 18, 1996
14
<PAGE>
EXHIBIT 10.45
February 22, 1996
Mr. William Luke
20 Rowes Wharf
Townhouse 12
Boston, MA 02110
Dear Bill:
We are very pleased to confirm our offer to you for the position of Vice
President and Chief Financial Officer with Autotote Corporation, located at 750
Lexington Avenue, 25th Floor, New York, New York 10022. This offer is
contingent upon our completion and receipt of satisfactory references.
The position remuneration is $250,000 per annum, plus you will be eligible
to participate in the company's incentive compensation program with a maximum
participation of 45% of your base salary.
As an executive with Autotote Corporation, you and your family will
participate in our Medical Insurance Plan, and you will participate in Autotote
Corporation's 401(k) and company funded Pension Plan, and receive vacation per
the standard policy.
Autotote Corporation will reimburse you, upon submission of expense report,
for COBRA costs for you and your family until such time as Autotote Corporation
Medical Insurance commences, and relocation costs which will include:
. Brokerage and legal fees for selling your present home
. Closing costs (no points)
. Cost of packing, storing and relocating household goods to the New
York Metropolitan area; and
. Temporary housing for up to six months or a maximum of $12,000.
<PAGE>
William Luke
page Two
Additionally, you will participate in the Autotote Corporation Employee
Stock Option Plan and receive options for 150,000 shares of Autotote common
stock at the average price on the date employment commences.
If your employment is terminated by Autotote other than for cause, prior to
the first anniversary of your employment, you will receive six months salary and
thereafter, one year salary.
We will look forward to your joining the Autotote team, effective February
26, 1996. Please sign and return one copy of this letter to me at the address
listed below.
Sincerely
/s/ Thomas C. DeFazio
Thomas C. DeFazio
President and Chief Operating Officer
/s/ William Luke
______________________________
William Luke
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AUTOTOTE CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
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0
0
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</TABLE>
