U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2000
[ ] 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 0 - 14835
TRANSNATIONAL INDUSTRIES, INC.
(Name of small business issuer in its charter)
Delaware 22-2328806
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
Post Office Box 198 19317
U.S. Route 1 (Zip Code)
Chadds Ford, Pennsylvania
(Address of principal
executive offices)
Issuer's telephone number (610) 459-5200
Securities Registered Pursuant to Section 12(b) of the Exchange Act: None
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
Common Stock
($0.20 par value per share)
(Title of class)
Check whether the Issuer (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
<PAGE>
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. (_____)
The Issuer's revenues for the fiscal year ended January 31, 2000, were
$10,212,000.
The aggregate market value of the voting stock held by non-affiliates of
Registrant as of March 31, 2000 was approximately $364,386 based on the average
of bid and asked price of these shares. Shares of Common Stock held by each
executive officer and director and by each person who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates.
As of March 31, 2000, 456,760 shares of Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
Transitional Small Business Disclosure Format (check one):
Yes No X
2
<PAGE>
This filing on Form 10-KSB/A-1 amends and restates Part III, Items 9, 10, 11 and
12 of the Annual Report on Form 10-KSB of Transnational Industries, Inc. for the
fiscal year ended January 31, 2000, filed on April 28, 2000.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Pursuant to the Registrant's By-laws, the number of Directors of the Registrant
is determined by Board action, and is currently fixed at seven. There currently
exist, however, two vacancies.
The following information is submitted with respect to the current directors of
the Company. All such directors were elected as directors by the holders of
Common Stock at the Company's last annual meeting of shareholders. All directors
serve until the next annual meeting of shareholders and until their successors
have been duly elected and shall have qualified.
Director
Name Age Since
Michael S. Gostomski1,2 49 1986
Charles H. Holmes, Jr. 59 1994
Charles F. Huber1,2 70 1992
William D. Witter1,2 70 1977
Calvin A. Thompson1,2 75 1994
- ---------
1Member of Compensation Committee.
2Member of Audit Committee.
--------------------
Michael S. Gostomski joined the Company in May 1986 as Vice-President Finance,
Treasurer, and a director and became Corporate Secretary in March of 1988. In
October of 1989, he became Executive Vice-President of the Company. On May 1,
1992, he became President and Chief Executive Officer of the Company. Mr.
Gostomski resigned as an employee of the Company, while remaining as a director
of the Company, in September 1993, at which time he became Executive Vice
President of Roller Bearing Company. From 1980 to 1986, he held various
financial and management positions at Peabody International Corporation, most
recently as a Sector Vice President in charge of its engineering and
construction subsidiaries. Mr. Gostomski, who is a Certified Public Accountant,
holds B.S. and M.B.A. degrees from the University of Connecticut.
Charles H. Holmes, Jr., became a director of the Company in 1994. He has held
various operating and management positions at the Company's Spitz, Inc.,
subsidiary since 1962. Mr. Holmes has been President of Spitz since 1988. He has
been President of the Company since September 1993. Mr. Holmes holds a degree in
Business Management from Goldey Beacom College.
3
<PAGE>
Charles F. Huber became a director of the Company in February 1992 and Chairman
in 1994. He is currently a managing director of William D. Witter Associates,
Inc. He holds a B.A. degree from Princeton University.
William D. Witter became a director of the Company in 1977 and Vice-Chairman in
August of 1987. He has been President of William D. Witter Associates, Inc., an
investment management concern, since 1976. Mr. Witter holds an A.B. degree from
Yale University and an M.B.A. from Stanford Business School.
Calvin A. Thompson became a director of the Company in October 1994. He has been
a Managing Director of William D. Witter Associates, Inc. since 1982. Mr.
Thompson holds a B.S. degree in industrial engineering from Columbia University.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
Name Position Age
Charles H. Holmes, Jr. President and Chief Executive 59
Officer and President of Spitz, Inc.
Paul L. Dailey, Jr. Chief Financial Officer, Secretary and 43
Vice President-Finance of Spitz, Inc.
John A. Fogleman Vice President - Operations of 51
Spitz, Inc.
Jonathan A. Shaw Chief Operating Officer, Executive Vice
President of Company and Spitz, Inc. 43
Information with respect to Mr. Holmes is set forth below in this Item 9.
Paul Dailey joined Spitz in September of 1983 as Controller. In June of 1986 he
became Vice President - Finance for Spitz. In April 1993 he become Chief
Accounting Officer of the Company. In September 1993 he became Chief Financial
Officer and Secretary of the Company. Mr. Dailey is a certified public
accountant and holds a B.A. degree in accounting from Rutgers University.
John Fogleman became Vice President - Operations for Spitz in July of 1992. He
has held various operating and management positions at Spitz since 1972. Mr.
Fogleman holds a B.A. degree in business management from Wilmington College.
Jonathan Shaw became Executive Vice President and Chief Operating Officer of the
Company and Spitz in April 1999. He was Vice President - Sales and Technology
for Spitz since July of 1992. He has held various engineering and management
positions at Spitz since 1986. Mr. Shaw is a registered Professional Engineer,
holds an M.B.A. degree from Widener University and a B.S. degree in Mechanical
and Aerospace Engineering from the University of Delaware.
4
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and 10% beneficial owners of the Company's Common
Stock to file certain reports concerning their ownership of the Company's equity
securities. Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recently competed fiscal year and Forms
5 and amendments thereto furnished to the Company with respect to its most
recently completed fiscal year, and other information of which the Company is
aware, no director, executive officer or beneficial owner of 10% or more of the
Company's Common Stock failed to make a requisite filing on a timely basis.
ITEM 10. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to Charles H. Holmes, Jr.,
the Company's Chief Executive Officer. Except for Mr. Holmes, the Company did
not have any executive officer whose total annual salary and bonus exceeded
$100,000 for the last completed fiscal year.
<TABLE>
<CAPTION>
Long Term
Annual Compensation (a) Compensation
------------------------------------- -----------------------------
Securities
Underlying
Name and Options All Other
Principal Position Year Salary Bonus Granted (#) Compensation
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles H. Holmes, Jr. 2000 $ 138,555 $ 4,678 (c)
President and Chief 1999 133,090 $ 7,500 4,800 (c)
Executive Officer 1998 133,762 $ 15,000 (b) 12,000 5,062 (c)
- ----------
<FN>
(a) Perquisites and other personal benefits amounted to less than ten percent
of salary and are therefore not reported in table.
(b) In fiscal 1998, Mr. Holmes received a $5,000 annual performance bonus and
an additional $10,000 bonus awarded at the completion of the refinancing of
the Company's debt agreements.
(c) Consists entirely of Company contributions to 401(k) plan.
----------------
</FN>
</TABLE>
STOCK OPTION AND PERFORMANCE INCENTIVE PLAN
The Transnational Industries Inc. Stock Option and Performance Incentive Plan
(the "Option Plan") awards key employees whose initiative is deemed valuable for
the successful conduct and development of the Company's business. Under the
Option Plan, awards may be in various forms of stock options, stock appreciation
rights, and shares of Common Stock. The purpose of the Option Plan is to attract
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<PAGE>
and retain the best available employees for the Company and its subsidiaries and
to encourage the highest level of performance by such employees, thereby
enhancing the value of the Company for the benefit of its stockholders. The
Option Plan is also intended to motivate employees to contribute to the
Company's future growth and profitability and to reward their performance in a
manner that provides them with means to increase their holdings of Common Stock
of the Company and aligns their interest with the interest of the stockholders
of the Company. Awards are granted by the Compensation Committee of the Board of
Directors of the Company. The Option Plan provides for the awarding of up to
150,000 shares of the Company's Common Stock to employees of the Company and its
subsidiaries. Options to purchase 50,000 common shares have been granted as of
January 31, 2000.
There were no awards under the Option Plan during the fiscal year ended January
31, 2000. The following table sets forth information relating to prior option
awards to Charles H. Holmes, Jr.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Fiscal Year Ended January 31, 2000
and Fiscal Year End Option Values
- ---------------------------------------------------------------------------------------------------------
Value of
Unexercised Options (#) Unexercised in-the-money Options
at Fiscal Year End at Fiscal Year End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------------------- -----------------------------------
<S> <C> <C>
Charles H. Holmes, Jr. 8,250 / 6,750 $ 21,188 / $17,063
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Holmes effective May
1, 1995. Under the agreement Mr. Holmes is currently paid an annual base salary
of $140,000 which may be increased from time to time by the Company's Board of
Directors, plus certain fringe benefits including group insurance, supplemental
medical benefits and an automobile allowance. Mr. Holmes may also receive, at
the sole discretion of the Company's Board of Directors, additional compensation
in the form of a cash bonus or equity securities under the Option Plan. The
original term of the agreement was one year, but the agreement automatically
extends an additional one year unless otherwise terminated by either party by
October 31 of the existing term. Pursuant to such provision, Mr. Holmes's
contract automatically renewed on May 1, 2000, for the period through April 30,
2001. In the event that Mr. Holmes's employment is terminated without cause, he
will be entitled to a lump sum payment equal to twice his annual base salary and
the continuation of his fringe benefits for a period of two years. A non-renewal
of the contract term by the Company within six months prior to or three years
after a "Change in Control" will be treated as a termination without cause. A
"Change in Control" is defined as (i) a change within twelve months of a
majority of the Company's Board of Directors, (ii) a change in control of fifty
percent of the Company's voting stock, (iii) the sale of the assets of Spitz, or
(iv) any merger or consolidation of the Company's business which results in a
change in ownership of the majority of the equity of the Company. The agreement
also includes a restrictive covenant whereby Mr. Holmes agrees not to engage in
a competing business of the Company for a period of (i) three years in the event
of a termination for cause or (ii) one year in the event that his employment is
otherwise terminated.
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<PAGE>
COMPENSATION OF DIRECTORS
The Chairman of the Board of Directors is compensated at a rate of $60,000 per
annum and each other outside director is paid a fee of $15,000 per annum.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to the only persons known
to the Company to be the beneficial owners of more than five percent (5%) of the
outstanding Common Stock of the Company as of March 31, 2000 (except for William
D. Witter and Charles Huber, whose respective beneficial ownership is disclosed
in the immediately following table). The Common Stock is the Company's only
class of voting securities.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address Of Beneficial Ownership % of Common Stock
------------------------------------ ------------------------------------ ---------------------------
<S> <C> <C>
Penfield Limited Partnership c/o 81,760 17.9%
William D. Witter, Inc.
153 East 53rd Street
New York, NY 10022
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 2000, the number of shares of
the outstanding Common Stock of the Company beneficially owned by each of the
current directors and executive officers for whom disclosure is required to be
made under the Summary Compensation Table pursuant to Item 402(a) (2) of
Regulation S-B promulgated under the Securities Exchange Act of 1934, as
amended, individually, and by the directors and all of the Company's executive
officers as a group:
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Ownership % of Common Stock
---------------------------------- ------------------------------------- -------------------------
<S> <C> <C>
William D. Witter 246,498 1 54.0%
Charles Huber 49,500 10.8%
Michael S. Gostomski 21,290 4.7%
Charles H. Holmes, Jr. 11,500 2 2.5% 3
Calvin A. Thompson 18,400 4 4.0%
All current Directors and
executive officers as a group (8
persons) 367,693 5 76.3% 3
- ----------
<FN>
1 Includes (i) 102,813 shares of Common Stock owned by Mr. Witter's spouse
and adult children, (ii) 20,600 shares of Common Stock owned by the William
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<PAGE>
D. Witter, Inc., Profit Sharing Fund, (iii) 646 shares of Common Stock
owned by ADW Inc., (iv) 222 shares of Common Stock owned by Virginia Woods
Witter, (v) 209 shares of Common Stock owned by the Helen C. Witter Trust,
(vi) 214 shares owned by Elizabeth Tacy Witter and (vii) the 81,760 shares
of Common Stock beneficially owned by Penfield Limited Partnership and
described in the immediately preceding table. Mr. Witter disclaims a
beneficial interest in the shares of Common Stock owned by Mr. Witter's
spouse and children.
2 Includes 9,000 shares of Common Stock acquirable within sixty days upon the
exercise of Mr. Holmes's stock options.
3 Assumes the issuance by the Company of all securities issuable to such
executive officer or all directors and executive officers as a group, as
the case may be, upon the exercise of all options owned by such person or
group.
4 Includes 2,500 shares of Common Stock owned by Mr. Thompson's spouse. Mr.
Thompson disclaims a beneficial interest in the shares of Common Stock
owned by his spouse.
5 Includes a total of 25,250 shares of Common Stock acquirable within sixty
days upon the exercise of all stock options owned by the Company's
executive officers.
----------------
</FN>
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In February 2000 the Company completed a transaction whereby it purchased 45,710
shares of the Company's Common Stock from the Estate of Alan Drew for cash of
$137,130 or $3 per share. The 45,710 shares represented all of the Company's
Common Stock owned by the Estate of Alan Drew and, prior to the transaction,
amounted to 9.1% of the outstanding Common Stock of the Company. Mr. Drew was a
former director of the Company. The Company is holding the 45,710 shares in
treasury.
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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.
Dated: May 25, 2000 Transnational Industries, Inc.
By: /s/ Charles H. Holmes Jr. By: /s/ Paul L. Dailey
-------------------------------- ------------------------
Charles H. Holmes Jr. Paul L. Dailey
Director, President and Vice President and
Chief Executive Officer Chief Financial Officer
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Signature Title Date
By: /s/ Charles H. Holmes Jr.
--------------------------
Charles H. Holmes Jr. May 25, 2000
Director, President and
Chief Executive Officer
Principal Executive Officer)
By: /s/ Paul L. Dailey
--------------------------
Paul L. Dailey Vice President and May 25, 2000
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
By: /s/ Charles F. Huber
--------------------------
Charles F. Huber Chairman of the Board May 25, 2000
of Directors
By: /s/ William D. Witter
--------------------------
William D. Witter Vice-Chairman of the May 25, 2000
Board of Directors
By: /s/ Michael S. Gostomski
----------------------------
Michael S. Gostomski Director May 25, 2000
By:
----------------------------
Calvin A. Thompson Director May 25, 2000
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