SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-631
WEBFINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 56-2043000
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 East 52nd Street, 21st Floor
New York, New York
10022
(Address and zip code of principal executive offices)
877-431-2942
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
TITLE OF CLASS
COMMON STOCK, $.001 PAR VALUE
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]
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [X] No [ ]
Aggregate market value of Common Stock held by non-affiliates of the
Registrant as of March 23, 2000 was $8,057,900, which value, solely for the
purposes of this calculation, excludes shares held by Registrant's officers,
directors, and their affiliates. Such exclusion should not be deemed a
determination by Registrant that all such individuals are, in fact, affiliates
of the Registrant. The number of shares of Common Stock issued and outstanding
as of March 23, 2000 was 4,349,996.
DOCUMENTS INCORPORATED BY REFERENCE
Definitive proxy statement to be filed pursuant to Regulation 14A in
connection with the 2000 Annual Meeting of Stockholders, Part III.
<PAGE>
WEBFINANCIAL CORPORATION AND SUBSIDIARIES
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
At the annual meeting of stockholders held November 4, 1998 (the "1998
Meeting"), the stockholders of the Company voted to eliminate the Company's
staggered board system. Commencing at the June 15, 1999 Annual Meeting (the
"1999 Meeting"), with respect to directors whose terms expired at the 1999
Meeting, and continuing at the annual meetings of stockholders held in 2000 and
2001, each director whose term is expiring (and any new nominees for director)
shall be elected for one-year terms only.
On February 16, 1999 and March 1, 1999, respectively, N. Hunter Wyche and
J. David Rosenberg resigned from the Board of Directors (the "Board"). At a
meeting on April 20, 1999, the Board appointed James Benenson, Jr. to fill the
vacancy left by Mr. Rosenberg. In addition, Harold Smith informed the Board that
he would not stand for reelection at the annual meeting to be held in 2000. The
Board declined to nominate a director to stand for election in Mr. Smith's place
and voted to reduce the number of directors from seven to five. Such reduction
does not shorten Mr. Smith's term, which expires at the annual meeting in 2000.
As a result of the foregoing, at the 1999 Annual Meeting, the Board consisted of
one director in the class expiring at the 1999 Meeting, one director in the
class whose term expires at the annual meeting in 2000 and three directors in
the class whose terms expire at the annual meeting in 2001. Additionally, as
described above, the director elected at the annual meeting in 2000 and all
directors elected at annual meetings following the annual meeting in 2000, shall
be elected for one-year terms only.
The name of, principal occupation of and certain additional information
about each of the five current directors are set forth below.
DIRECTORS AND EXECUTIVE OFFICERS
NAME AND AGE OCCUPATION AND OTHER DIRECTORSHIPS
Jack L. Howard (38) Mr. Howard has served as a director of the Company
(term expires 2000) since 1996 and Vice President, Secretary, Treasurer and
Chief Financial Officer of the Company since December
1997. Mr. Howard has been a registered principal of
Mutual Securities, Inc., a stock brokerage firm, since
prior to 1993. Mr. Howard has also been the Acting
President and Chief Financial Officer of Gateway
Industries, Inc. since September 1994. Mr. Howard is a
director of the following publicly held companies:
Gateway Industries, Inc. and Pubco Corporation.
James Benenson, Jr. (64) Mr. Benenson has been Chairman of Vesper Company since
(term expires 2000) 1979 and of Arrowhead Holdings Corporation since 1983.
Prior to such time, Mr. Benenson served in various
capacities with F. Eberstadt & Co., Walker, Hart & Co.
and James Benenson & Co. Mr. Benenson has served as a
director of the Company since 1999, when he was
appointed by the Company's Board of Directors to fill
the vacancy created by the resignation of J. David
Rosenberg.
<PAGE>
Warren G. Mr. Lichtenstein has served as a director of the
Lichtenstein (34) Company since 1996 and President and Chief Executive
(term expires 2001) Officer of the Company since December 1997. Mr.
Lichtenstein has been the Chairman of the Board,
Secretary and the Managing Member of Steel Partners,
L.L.C. ("Steel LLC"), the general partner of Steel
Partners II, L.P. since January 1, 1996. Prior to such
time, Mr. Lichtenstein was the Chairman and a director
of Steel Partners, Ltd., the general partner of Steel
Partners Associates, L.P., which was the general
partner of Steel Partners II, L.P. since 1993 and prior
to January 1, 1996. Mr. Lichtenstein has also served as
President and director of Marsel Mirror and Glass
Products, Inc. ("Marsel"), a subsidiary of Gateway
Industries, Inc. ("Gateway"), from Marsel's inception
in July 1995 until shortly after the acquisition of its
business by Gateway in November 1995, and continued as
a director until its disposition in December 1996.
Marsel filed for protection under Chapter 11 of the
United States Bankruptcy Code shortly following
Gateway's disposition of its interest in Marsel. Mr.
Lichtenstein is a director of the following publicly
held companies: Gateway Industries, Inc., PLM
International, Inc., Tech-Sym Corporation, CPX Corp.,
ECC International Corp. and Saratoga Beverage Group,
Inc.
Earle C. May (81) Mr. May was elected a director of the Company by the
(term expires 2001) Board of Directors on July 22, 1997. Mr. May has been
an executive officer of May Management, Inc., an
investment management firm, since prior to 1993.
Joseph L. Mullen (52) Mr. Mullen has served as a director of the Company
(term expires 2001) since 1995. Since January 1994, Mr. Mullen has served
as Managing Partner of Li Moran International, a
management consulting company, and has functioned as a
senior officer overseeing the merchandise and marketing
departments for such companies as Leewards Creative
Crafts Inc., Office Depot of Warsaw, Poland and
WebFinancial Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater-than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company believes that all such reports required to be filed during the fiscal
year ended December 31, 1999 ("Fiscal 1999"), were filed on a timely basis. The
Company 's belief is based solely on its review of Forms 3, 4, and 5 and
amendments thereto furnished to the Company during, and with respect to, Fiscal
1999 by persons known to be subject to Section 16 of the Exchange Act. To the
Company's knowledge, based solely on its review of the copies of such reports
furnished to the Company, during its fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater-than 10% beneficial owners were satisfied.
<PAGE>
Item 11. EXECUTIVE COMPENSATION
CASH AND OTHER COMPENSATION
The following table sets forth all the compensation earned for services
rendered in all capacities, during the fiscal years indicated, by the person who
served as chief executive officer of the Company and the other most highly
compensated executive officer during 1999 (collectively, the "Named
Executives"). No other executive officer received annual compensation at the
rate of $100,000 or more during the most recent fiscal year.
Long-term
Compensation
Awards
------
Name and
Principal Position Year Options/SARs(#)
- ------------------ ---- --------------
Warren G. Lichtenstein 1999 0
President and Chief executive officer 1998 211,145
1997 16,313
Jack L. Howard 1999 0
Vice President and 1998 123,645
Chief financial officer 1997 16,313
<PAGE>
STOCK OPTIONS
No stock options or stock appreciation rights were granted to the Named
Executives during 1999.
The following table shows aggregate option exercise of the Named
Executives during the year (there were no stock appreciation rights granted or
exercised) and the number and value of options held as of December 31, 1999 by
the Named Executives.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
shares acquired
from stock Dollar value Number of Unexercised Value of Unexercised
option exercise realized on Options In-the-Money Options
Name during the year exercise($) at Fiscal Year-End(#) at Fiscal Year-End($)(1)
- ---------------------- --------------- ---------- -------------------- --------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Warren G. Lichtenstein 0 0 208,708 18,750 1,298,164 116,625
Jack L. Howard 64,250 1,125,650 63,208 12,500 393,154 77,750
<FN>
(1) The value of in-the-money options assumes the closing sales price of the
Common Stock underlying the options as of December 31, 1999 ($6.22).
</FN>
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS
Compensation Committee Interlock and Insider Participation. The Company had
no compensation committee or other Board committee performing equivalent
functions during 1999. Each member of the Board, including Messrs. Lichtenstein
and Howard, the Company's Named Executive Officers, has participated in
deliberations concerning executive officers' compensation.
DIRECTOR COMPENSATION
Each of the three directors who are not officers of the Company has elected
to receive his retainer fee of $18,000 per year and meeting fee compensation
ranging from $375 to $1,125 per meeting in the form of grants of common stock,
to be paid at the time of the annual meeting. The value of the shares granted is
the fair market value at the time of the grant. Directors who are not officers
do not receive annual or per meeting compensation.
<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 2000 regarding
the beneficial ownership of the Common Stock by each person known by the Company
to own beneficially more than 5% of the Common Stock, by each director and
executive officer, individually, and by all directors and executive officers as
a group.
Amount and
Nature of
Beneficial
Name and Address Ownership Percentage of Class
Warren G. Lichtenstein 1,320,613(1) 29.02%
150 East 52nd Street
New York, New York 10022
Steel Partners II, L.P. 1,090,655(2) 23.96%
150 East 52nd Street
New York, New York 10022
Jack L. Howard 110,108(3) 2.42%
182 Farmers Lane
Santa Rosa, CA 95405
Earle C. May 410,777(4) 9.03%
4550 Kruse Way #345
Lake Oswego, Oregon 97035
May Management, Inc. 385,350 8.47%
4550 Kruse Way #345
Lake Oswego, Oregon 97035
James Benenson, Jr. 61,678 1.36%
One Lexington Ave
New York, NY 10010
Joseph L. Mullen 20,361(5) *
611 Broadway Suite 801
New York, NY 10012
All directors and executive 1,923,537 42.27%
officers as a group (five persons)
*Less than 1%
----------------------
(1) Includes: (a) 2,500 shares of Common Stock owned by Mr. Lichtenstein;
(b) 227,458 shares of Common Stock issuable upon the exercise of
options within sixty days of March 31, 2000 granted to Mr.
Lichtenstein; (c) 1,068,970 shares of Common Stock owned by Steel
Partners II, L.P.; and (d) 21,685 shares of Common Stock issuable upon
the exercise of warrants within sixty days of March 31, 2000 owned by
Steel Partners II, L.P. Mr. Lichtenstein is the Managing Member of the
general partner of Steel Partners II, L.P. Mr. Lichtenstein disclaims
beneficial ownership of the shares of Common Stock owned by Steel
Partners II, L.P. (except to the extent of his pecuniary interest in
such shares of Common Stock, which is less than the amount disclosed).
<PAGE>
(2) Represents 1,068,970 shares of Common Stock and 21,685 shares of Common
Stock issuable upon exercise of warrants within sixty days of March 31,
2000.
(3) Represents 34,400 shares of Common Stock and 75,708 shares of Common
Stock issuable upon exercise of options within sixty days of March 31,
2000 granted to Mr. Howard.
(4) Includes: (a) 5,066 shares of Common Stock owned by Mr. May; (b) 20,361
shares of Common Stock issuable upon the exercise of options within
sixty days of March 31, 2000 granted to Mr. May; (c) 35,000 shares of
Common Stock owned by May Management, Inc.; and (d) 350,350 shares of
Common Stock held in customer accounts as to which May Management, Inc.
has shared dispositive power. Mr. May is the Chief Executive Officer
and a principal stockholder of May Management, Inc. and may be deemed
to be the beneficial owner of shares owned by May Management, Inc. or
as to which May Management, Inc. has shared dispositive power.
(5) Represents 20,361 shares of Common Stock issuable upon exercise of
options within sixty days of March 31, 2000 granted to Mr. Mullen.
--------------------
Except as noted in the footnotes above, (i) none of such shares is known by
the Company to be shares with respect to which the beneficial owner has the
right to acquire beneficial ownership and (ii) the Company believes the
beneficial owner listed above has sole voting and investment power with respect
to the shares shown as being beneficially owned by it.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of March 31, 1998, the Company entered into a sub-lease for office space
with Gateway Industries, Inc. ("GWAY") for use of such space as a corporate
office on a non-exclusive basis. This lease runs through March 31, 2001, but may
be terminated by either party upon 90 days notice. Warren Lichtenstein, the
Company's President, Chief Executive Officer, and Chief Accounting Officer, is
the Chairman of the Board of Directors of GWAY. Mr. Lichtenstein is also the
Managing Member of the General Partner of Steel Partners II, L.P. which owns
approximately 48% of the common stock of GWAY. Steel Partners Services, Ltd.
("SPS"), which is owned by an entity controlled by Mr. Lichtenstein, also
subleases part of the office space from GWAY. In 1998, the rent was
approximately $2,700 a month.
During the year ended December 31, 1999, the Company paid a management fee
of approximately $267,000 to SPS for certain management, consulting and advisory
services. The fee also included the Company's one-third share of rent expense
which was paid entirely by SPS during 1999. The Company believes that the cost
of obtaining the type and quality of services rendered by SPS is no less
favorable than the cost at which the Company could obtain from unaffiliated
entities.
<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 report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WebFinancial Corporation
By: /s/Jack L. Howard
---------------------------
Jack L. Howard
Vice President and Chief Financial Officer
Date: April 25, 2000
