UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 2)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1997
or
[ ] 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 1-11956
HEARTLAND TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-1487580
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
547 WEST JACKSON BOULEVARD, CHICAGO, ILLINOIS 60661
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 294-0497
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
COMMON STOCK AMERICAN STOCK EXCHANGE
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 (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant, computed by reference to the last reported
sales price of the Registrant's common stock on the American Stock Exchange as
of March 25, 1998 ($17 per share), was approximately $25.8 million. On that date
there were 1,671,238 shares outstanding. For purposes of this computation it is
assumed that non-affiliates of the Registrant are all holders other than
directors and executive officers of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
NYFS08...:\65\63765\0003\306\10KA297D.WPD
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 on Form 10-K/A to the Annual Report on Form 10-K of
Heartland Technology, Inc. (the "Company"), amends and restates in their
entirety Items 10, 11, 12 and 13 of Part III.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The Board of Directors is divided into three classes. The directors of each
class are elected by the holders of common stock at the annual meeting of
stockholders in the year in which the term of such class expires and will serve
thereafter for three years. The terms of office expire for Class I Directors in
2000, for the Class II Director in 1998 and for Class III Directors in 1999.
Name and Age Principal Occupation, Business
- ------------ Experience and Directorships
-------------------------------
Alan Andreini, 51.......................... Director of the Company (Class I)
(since September 1997); President and
Chief Operating Officer (since May
1997), InterWorld Corporation
(internet software), New York, New
York; Executive Vice President
(1994-1997) and Senior Vice President
(1986-1994), Comdisco, Inc.
(technology services), Rosemont,
Illinois. Mr. Andreini also serves as
a director of Comdisco, Inc. and
Youth Services International, Inc.
Robert S. Davis, 83........................ Director of the Company (Class I)
(since October 1988); Member of the
compensation committee and chairman
of the audit committee of the Board
of the Company; Self-employed
consultant (for more than the past
five years); Senior Vice President
(1978-79), St. Paul Companies
(insurance), St. Paul, Minnesota.
Edwin Jacobson, 69.........................President and Chief Executive Officer
(since September 1990); Director of
the Company (Class III) (since
November 1985); Member of the
executive and investment committees
of the Board of the Company;
President and Chief Executive Officer
of CMC Heartland Partners (since
September 1990), Chicago Illinois
(real estate) (a general partnership
of which the Company is the managing
general partner); Chairman of the
Executive Committee (since June 1992)
and President and Chief Executive
Officer (1994-1997), Avatar Holdings
Inc. (real estate, water and
wastewater utilities operations),
Coral Gables, Florida. Mr. Jacobson
also serves as a director of Avatar
Holdings Inc.
2
<PAGE>
Name and Age Principal Occupation, Business
- ------------ Experience and Directorships
------------------------------
John R. Torell III, 58..................... Director of the Company (Class III)
(since September 1997); Chairman
(since 1990), Torell Management Inc.
(financial advisory), New York, New
York; Special Director (since 1994),
the Zilkha & Company Group of
Companies (merchant banking), New
York, New York; Chairman and Chief
Executive Officer (1990-1994),
Fortune Bancorp (banking), Tampa,
Florida; Chairman, President and
Chief Executive Officer (1988-1989),
CalFed, Inc. (banking), Los Angeles,
California; President (1982-1988),
Manufacturers Hanover Corporation
(banking), New York, New York. Mr.
Torell also serves as a director of
American Home Products Corporation,
Claremont Technology Group, Inc.,
Paine Webber Group Inc., and Volt
Information Sciences, Inc.
Ezra K. Zilkha, 72......................... Director of the Company (Class II)
(since October 1988); Chairman of the
Board of the Company; Member of the
executive committee and chairman of
the investment committee and the
compensation committee of the Board
of the Company; President (since
1956), Zilkha & Sons, Inc. (private
investments), New York, New York;
President (since March 1991), 3555
Intermediate Corp. (investment
holding company); Chairman (December
1984 - May 1990; March 1991 -
September 1993), Union Holdings Inc.
(industrial holding company), New
York, New York. Mr. Zilkha also
serves as a director of The Newhall
Land and Farming Company.
EXECUTIVE OFFICERS
The following table sets forth certain information with regard to the executive
officers of the Company (other than Edwin Jacobson, who also serves as a
director of the Company).
Name and Age Principal Occupation, Business
- ------------ Experience and Directorships
-------------------------------
Lawrence S. Adelson, 48.................... Vice President and General Counsel
(since October 1988) of the Company;
General Counsel (since June 1990),
CMC Heartland Partners (real estate)
(a general partnership of which the
Company is the managing general
partner); Vice President and General
Counsel (1988-1995), Chicago
Milwaukee Corporation (investment
company); General Counsel
(1985-1989), CMC Real Estate
Corporation.
Leon F. Fiorentino, 73.....................Vice President - Finance, Secretary
and Treasurer (since September 1990)
of the Company; Vice President -
Finance (1991-1995), Treasurer (1982-
1995), and Secretary (1984-1995) of
Chicago Milwaukee Corporation
(investments).
3
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and any persons who own more than ten percent of the
Company's common stock to file forms reporting their initial beneficial
ownership of the Company's common stock and subsequent changes in that ownership
with the Securities and Exchange Commission and the American Stock Exchange.
Officers, directors and greater than ten-percent beneficial owners are also
required to furnish the Company with copies of all such Section 16(a) forms they
file. Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that during the 1997 fiscal year all
Section 16(a) filing requirements were complied with.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE*
The following table sets forth information in respect of the compensation for
1997, 1996 and 1995 of the Company's Chief Executive Officer and the other
executive officers of the Company whose total salary and bonus in 1997 exceeded
$100,000 (sometimes collectively referred to as the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation
-------------------
All Other
Name and Principal Compensation
Position Year Salary ($) Bonus ($) ($) (1)
- -------- ---- ---------- --------- --------
<S> <C> <C> <C> <C>
Edwin Jacobson 1997 139,583 0 1,599
President and Chief 1996 90,000 0 0
Executive Officer 1995 90,000 0 0
Leon F. Fiorentino 1997 150,000 25,000 4,750
Vice President - 1996 126,500 0 4,246
Finance, Secretary 1995 41,812 0 1,527
and Treasurer
- ----------------
</TABLE>
* The Named Executive Officers also provide services to CMC Heartland
(the general partnership of which the Company and Heartland are general
partners). Since 1997, CMC Heartland has paid the full compensation of
such Named Executive Officers for services rendered by such person to
the Company and CMC Heartland. CMC Heartland has been reimbursed by the
Company pursuant to a certain Facilities Agreement for the cost
allocated to the Company with respect to the services such persons have
rendered to the Company. Therefore, the table sets forth compensation
awarded to, earned by or paid to the Named Executive Officers that has
been allocated to the Company.
(1) "All Other Compensation" for 1997 consists of contributions for Mr.
Jacobson and Mr. Fiorentino made by CMC Heartland under CMC Heartland's
Group Savings Plan, a salary reduction plan qualified under Sections
401(a) and (k) of the Internal Revenue Code of 1986, as amended, to
match 1997 pre-tax elective deferrals contributions (included under
Salary) made to such plan.
4
<PAGE>
EMPLOYMENT AGREEMENT
Edwin Jacobson, the Company's President and Chief Executive Officer provides
services to the Company in such capacities pursuant to an employment agreement,
dated June 29, 1993, as amended, for a term ending on May 30, 2002. The
employment agreement provides for an annual base salary of $175,000, all or a
portion of which may be deferred at Mr. Jacobson's election. During the term of
the employment agreement, Mr. Jacobson has the right to continue his employment
with CMC Heartland and to pursue other employment and business activities not in
competition with the activities of the Company (after prior notice of such
activities has been delivered to the Chairman of the Executive Committee of the
Board of Directors of the Company), and is not obligated to devote his full
business time to the activities of the Company. Mr. Jacobson is, however,
required to devote an amount of time to the activities of the Company determined
by the Board of Directors to be required of him to accomplish the business
objectives of the Company. On June 1, 1997, the employment agreement was amended
to increase Mr. Jacobson's base salary from $90,000 to the current $175,000 per
year.
Mr. Jacobson's employment agreement provides for certain payments to be made in
the event of his employment is terminated prior to the end of its term. If Mr.
Jacobson's employment is terminated by his death, the Company will pay his
designated beneficiary (or if there is none, to his estate) an amount equal to
the amount, if any, by which $150,000 exceeds the proceeds payable to his
designated beneficiary (or estate) pursuant to any life insurance policy
covering his life maintained by the Company. If Mr. Jacobson's employment is
terminated by the Company for "Cause" or by Mr. Jacobson for other than "Good
Reason", the Company will pay him his base salary through the date of
termination. If Mr. Jacobson's employment is terminated either by the Company
other than for "Cause" or other than on account of Mr. Jacobson's "permanent
disability" or by Mr. Jacobson for "Good Reason", then the Company will continue
to pay him base salary through May 30, 2002, will pay him all his other damages
that he may be entitled to receive as a result of such termination, and will
maintain until May 30, 2002, for his benefit all employee benefit plan and
programs in which he was entitled to participate. The terms "Cause", "Good
Reason" and "permanent disability" are defined in the employment agreement.
On January 2, 1998, the Compensation Committee granted Mr. Jacobson options to
purchase 50,000 shares of common stock of the Company and stock appreciation
rights (payable in cash) with respect to 25,000 shares, pursuant to the
Company's 1997 Incentive and Capital Accumulation Plan. The options and rights
have an exercise price of $16.625 per share (the closing stock price on the date
of grant), fully vest on May 30, 1998, and expire not later than January 2,
2008.
DIRECTOR COMPENSATION
The Company's compensation program for nonemployee directors provides that each
nonemployee director receive an annual retainer of $18,000, payable in quarterly
installments, and receive $1,000 for each Board meeting physically attended.
Nonemployee directors also receive $1,000 for each committee meeting physically
attended. Prior to July 1997, nonemployee directors received a $12,000 annual
retainer and $750 per Board or committee meeting. Employees of the Company
receive no additional compensation for serving as a director. The Company also
reimburses directors for meeting expenses.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors was established in February
1997. The members of the committee serving at any time during 1997 were Robert
Davis and Ezra Zilkha.
5
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning ownership of
shares of the Company's common stock: (i) by persons who are known by the
Company to be beneficial owners of more than 5% of the outstanding shares of the
Company's common stock; (ii) by each director of the Company; (iii) by each
Named Executive Officer; and (iv) by all directors and executive officers of the
Company as a group. As of March 31, 1998, there were 1,671,238 shares of the
Company's common stock outstanding.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name of Beneficial Owner Beneficial Ownership (1) of Class
- ------------------------ ------------------------ --------
<S> <C> <C>
Ezra K. Zilkha 102,500 (2) 6.1%
767 Fifth Avenue
New York, NY 10153
KeyCorp 496,780 (3) 29.7%
127 Public Square
Cleveland, OH 44114
MSR Capital Partners 106,000 (4) 6.3%
One Embarcadero Center
San Francisco, CA 94111
Jerold S. Solovy 125,000 (5) 7.5%
c/o Jenner & Block
One IBM Plaza
Chicago, IL 60611
Alan Andreini 0 0.0%
Robert S. Davis 2,000 *
Leon F. Fiorentino 0 0.0%
Edwin Jacobson 82,000 (6) (7) 4.8%
John R. Torell III 15,000 *
All directors and executive officers 201,500 (6) 11.7%
as a group (consisting of 7 persons)
- --------------------------------
</TABLE>
* Constitutes less than one percent.
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to such securities.
(2) Based on a Schedule 13D, dated January 17, 1996, and to the Company's
knowledge, Mr. Zilkha is a member of a "group" consisting of himself,
The Zilkha Foundation, Inc. and Zilkha & Sons, Inc. Mr. Zilkha directly
owns and has sole voting and investment power over all shares except
for: 1,500 shares owned by his wife, as to which he shares voting and
investment power; 15,000 shares owned by The Zilkha Foundation, Inc., as
to which Mr. Zilkha may be deemed to share voting and dispositive power
with the other directors and officers of
6
<PAGE>
the foundation; and 24,500 shares owned by Zilkha & Sons, Inc., as to
which Mr. Zilkha may be deemed to be the beneficial owner.
(3) Based on a Schedule 13G, dated February 14, 1997, KeyCorp is the parent
holding company for the two subsidiaries -- Key Trust Company-Ohio (a
bank) and Spears, Benzak, Salomon & Farrell (a registered investment
advisor) -- that own the securities. Voting and investment power over
all of the securities is shared.
(4) Based on a Schedule 13D, dated January 16, 1996.
(5) Based on a Schedule 13G, dated February 26, 1998.
(6) Includes 50,000 shares which Mr. Jacobson has the right to acquire
within 60 days through the exercise of stock options. The number of
shares that all directors and officers as a group have the right to
acquire within 60 days is 50,000. In each case the percent of the class
is calculated on the basis that such shares are deemed outstanding. No
voting or investment power exists with respect to such shares prior to
acquisition.
(7) Includes 2,000 shares owned by Mr. Jacobson's spouse, as to which Mr.
Jacobson shares voting and investment power.
ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
Edwin Jacobson, a director of the Company and its President and Chief Executive
Officer, also serves as the President and Chief Executive Officer of Heartland
and CMC Heartland. The Company is the general partner of Heartland and the
managing general partner of CMC Heartland (with Heartland being the other
general partner of CMC Heartland).
The Company also owns the Class B limited partnership interest in Heartland.
The Company has a management agreement with CMC Heartland pursuant to which CMC
Heartland is required to pay the Company an annual management fee of $425,000.
The Company has a facilities agreement with Heartland pursuant to which
Heartland makes available to the Company office space, equipment and personnel.
The Company reimbursed CMC Heartland approximately $228,000 in 1997 for the
allocated costs pursuant to the agreement.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
HEARTLAND TECHNOLOGY, INC.
(Registrant)
By: Leon F. Fiorentino
----------------------------
Leon F. Fiorentino
Vice President-Finance, Treasurer and Secretary
Date: April 30, 1998
8
