CONFORMED COPY
FORM 10-KSB/A
(AMENDMENT NO. 1 - FILED APRIL 29, 1998)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC. 20549
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the twelve month period ending December 31, 1997
Commission file number: 0-28348
DBS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1124675
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
100 SHORELINE HWY., SUITE 190 A, MILL VALLEY CA 94941
(Address of principal executive offices) (Zip Code)
(415) 380-8055
(Registrant's telephone number, including area code)
FORMER ADDRESS: 495 MILLER AVENUE, MILL VALLEY CA 94941
(Former name, former address and former fiscal year, if changed since last
report)
Securities registered pursuant to Section 12(b) of the Act: None
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 such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for at least 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-KSB or any
amendment to this Form 10-KSB. X
As of March 31, 1998 the aggregate market value for the 4,245,147 shares
of the common stock, par value $.0004 per share, held by non-affiliates was
approximately $11,143,511.
The number of shares outstanding of registrant's only class of common
stock, as of March 31, 1998 was 5,910,236 shares of its common stock, par value
$.0004 per share.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Company's definitive Proxy Statement for the Company's
Annual Meeting of Stockholders to be held on May 12, 1998 are incorporated by
reference into Part III.
Exhibit Index is located at Page 13
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ITEM 10. EXECUTIVE COMPENSATION
(A) CASH COMPENSATION
The following table provides certain summary information for the year
ended December 31, 1997, concerning compensation in excess of $100,000 paid or
accrued by the Company and its subsidiary to or on behalf of the Company's
executives and/or employees.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION{(1)}
OPTIONS{(2)}
Fred W. Thompson 1997 $180,000{(3)} $ 6,705 185,000
Chief Executive Officer 1996 $180,000{(4)} $ 4,245 319,375{(5)}
1995{(6)} $ 30,000 $ 2,577 4,500
1995 $ 72,000 $ 6,521 0
E.A. James Peretti 1997 $155,000 $ 3,732 150,000
CEO GEMS 1996 $155,000 $ 971 375,000
Randall Smith 1997 $125,000 $ 2,385 75,000
Executive VP GEMS 1996 $125,000 $ 2,216 131,875{(5)}
</TABLE>
(1) Consists entirely of payment of insurance premiums.
(2) Common stock of DBS Industries, Inc.
(3) $80,000 paid in cash, $100,000 deferred pursuant to his employment
agreement.
(4) $72,000 paid in cash, $108,000 deferred pursuant to his employment
agreement.
(5) Includes 6,875 shares granted in April 1996 with vesting commencing as of
December 31, 1995.
(6) For the transition period from August 1, 1995 to December 31, 1995.
Mr. Thompson entered into an employment agreement with the Company on April
18, 1996 effective January 1, 1996. His annual salary under the agreement is
$180,000, and includes non-qualified stock options to purchase 312,500 shares
of the Company's common stock. Pursuant to the agreement, the Company paid
$80,000 of Mr. Thompson's salary and the remaining portion has been deferred
until certain financing requirements of the Company have been achieved. The
Company has maintained a key person insurance policy on Mr. Thompson's life in
the face amount of $2,000,000, and is the sole beneficiary of such policy. The
Company also entered into employment contracts with E.A. James Peretti, CEO of
GEMS, and Randall Smith, Executive VP of GEMS and Chief Engineer. Mr.
Peretti's agreement includes an annual salary of $155,000 and non-qualified
stock options to purchase 375,000 shares of common stock. Mr. Smith's
agreement includes an annual salary of $125,000 and non-qualified stock options
to purchase 125,000 shares of common stock.
(B) COMPENSATION PURSUANT TO STOCK OPTION PLAN
The Company has established a 1996 Stock Option Plan (the "Plan") to serve
as a vehicle to attract and retain the services of key employees and to help
such key employees realize a direct proprietary interest in the Company. The
Plan provides for the grant of non-statutory and incentive stock options. The
exercise price of any incentive stock option granted under the Plan may not be
less than 100% of the fair market value of the common stock of the Company on
the date of grant. The fair market value for which an option may be granted
incentive stock options in any calendar year may not exceed $100,000. Shares
subject to options under the Plan may be purchased for cash. Unless otherwise
provided by the Board, an option granted under the Plan is exercisable for a
term of ten years (or for a shorter period up to ten years). The Plan is
administered by the Board of Directors and its Compensation Committee, which
has discretion to determine optionees, the number of shares to be covered by
<PAGE>
each option, the exercise schedule, and other terms of the options. The Plan
may be amended, suspended, or terminated by the Board, but no such action may
impair rights under a previously granted option. Each option is exercisable
only so long as the optionee remains employed by the Company. No option is
transferable by the optionee other than by will or the laws of descent and
distribution.
During fiscal 1997 there was a substantial decrease in the market price of
the Company's Common Stock due, in part, to regulatory delays including a delay
in the approval of E-Sat's LEO satellite license application. As a result, the
Compensation Committee repriced stock options in February and December of 1997.
The repricing was done in an effort to retain the Company's quality employees
and directors who had lost a significant portion of their financial interest in
the Company because their options were "out of the money." In February 1997,
the Company completed the first stock option repricing program for the
Company's directors and employees in which stock options for 1,119,646 shares
of Common Stock, originally issued with exercise prices ranging from $1.60 to
$6.00 per share, were reissued with an exercise price of $1.4375 per share,
which approximated the fair market value on the date of repricing. In December
1997, the Company completed a second stock option repricing program for the
Company's employees (including employee directors) in which stock options for
approximately 1,135,726 shares of Common Stock, originally issued with an
exercise price of $1.4375, were reissued with exercise prices ranging from
$0.531 to $0.584 per share, which approximated the fair market value on the
date of repricing. The Company maintained the original vesting schedules.
The Company intends to file one or more registration statements on Form S-8
under the Securities Act to register shares of common stock subject to stock
options that will permit the resale of such shares, subject to vesting
restrictions with the Company.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The General Corporation Law of the State of Delaware permits indemnifi-
cation of directors, officers, and employees of corporations under certain
conditions subject to certain limitations. Article XII of the Company's
certificate of incorporation states that the Company may provide indemnification
of its agents, including its officers and directors, for breach of duty to the
Company to the maximum extent permitted by the General Corporation Law.
Article VI of the Bylaws provide that the Company shall, to the maximum extent
and in the manner permitted in the Corporations Laws, indemnify each of its
agents, including its Officers and Directors, against expenses, judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding arising by reason of the fact any such person is
or was an agent of the Company.
OPTION GRANTS IN THE YEAR ENDED DECEMBER 31, 1997
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
NAME 1997 YEAR ($/SH) DATE
Fred W. Thompson 185,000 25% $0.584 12/31/02
President, CEO
E.A. James Peretti 150,000 20% $0.531 12/31/07
CEO GEMS
Randall Smith 75,000 10% $0.531 12/31/07
Exec. VP GEMS
<PAGE>
FISCAL YEAR-END OPTION VALUE *
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARS at FY End (#) Options/SARS at FY End ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Options at December 31, 1997 Options at December 31, 1997
Fred W. Thompson 169,971 / 347,029 $82,969 / $82,969
President, CEO
E.A. James Peretti 225,000 / 300,000 $119,475 / $159,300
CEO GEMS
Randall Smith 105,074 / 133,676 $55,795 / $70,982
Exec. VP GEMS
* Includes options which were repriced in February and December 1997. (See Item
10(b).)
COMPENSATION OF DIRECTORS
The Company reimburses directors for expenses incurred in connection with
attending Board meetings but does not pay director's fees or other compensation
for services rendered as a director. In lieu of fees the Company grants to
each director options to purchase 37,500 shares of Common Stock for each year
of service successfully completed, under a non-qualified stock option plan as
approved by a shareholder vote in 1996.
<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 Annual Report on Form
10-KSB/A to be signed on its behalf by the undersigned, duly authorized.
Date: April 24, 1998 DBS INDUSTRIES, INC.
By: FRED W. THOMPSON
Fred W. Thompson, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, which include the
Principal Executive Officer, the Principal Financial Officer and a majority of
the Board of Directors on behalf of the Registrant and in the capacities and on
the dates indicated.
NAME TITLE DATE
FRED W. THOMPSON
Fred W. Thompson President, Director, April 24, 1998
Principal Executive Officer
E.A. JAMES PERETTI
E.A. James Peretti Director April 24, 1998
MICHAEL T. SCHIEBER
Michael T. Schieber Director, Secretary April 27, 1998
JEROME W. CARLSON
Jerome W. Carlson Director April 27, 1998
H. TATE HOLT
H. Tate Holt Director April 24, 1998
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant
to Section 12 of the Act.
EXHIBIT 21.1
SUBSIDIARIES OF DBS INDUSTRIES, INC.
Global Energy Metering Service, Inc.
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE 10-KSB
FOR THE PERIOD ENDED DECEMBER 31, 1997 FOR DBS INDUSTRIES, INC. AND IS
QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 383,054
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 502,319
<PP&E> 73,277
<DEPRECIATION> 47,828
<TOTAL-ASSETS> 1,785,543
<CURRENT-LIABILITIES> 913,504
<BONDS> 0
0
0
<COMMON> 2,373
<OTHER-SE> 872,039
<TOTAL-LIABILITY-AND-EQUITY> 1,785,543
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,682,277
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 308,094
<INCOME-PRETAX> 3,149,717
<INCOME-TAX> 80,800
<INCOME-CONTINUING> 4,831,994
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,068,917
<EPS-PRIMARY> 0.523
<EPS-DILUTED> 0.492
</TABLE>
