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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB/A
AMENDMENT TO FORM 10-KSB
Filed Pursuant to
THE SECURITIES EXCHANGE ACT OF 1934
SERVOTRONICS, INC.
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(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Annual Report on Form
10-KSB for the year ended December 31, 1997 as set forth in the pages attached
hereto:
PART III
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Item 9. Directors and Executive Officers of the
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Registrant.
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Item 10. Executive Compensation.
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Item 11. Security Ownership of Certain Beneficial
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Owners and Management.
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Item 12. Certain Relationships and Related
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Transactions.
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Pursuant to the requirements 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.
SERVOTRONICS, INC.
Dated: April 29, 1998
By /s/ Lee D. Burns
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Lee D. Burns
Treasurer and Secretary
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SERVOTRONICS, INC.
AMENDMENT NO. 1
TO
FORM 10-KSB FOR YEAR ENDED
DECEMBER 31, 1997
Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) DIRECTORS. The table below sets forth certain information
regarding the directors of Servotronics, Inc. (the "Company"), each of whom was
elected at the Company's 1997 Annual Meeting of Shareholders. The term of office
of each director is until the next Annual Meeting of Shareholders and until his
successor is elected and shall have qualified.
Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
- ---- --- -------------------
Dr. William H. Duerig 76 Director of the Company
since 1990; Physicist and
Senior Program Manager
for Kearfott Guidance &
Navigation Corporation
for more than five years
prior to retirement in
1993.
Donald W. Hedges 76 Director of the Company
since 1967; self-employed
attorney since 1988.
Nicholas D. Trbovich, Jr. 37 Director of the Company
since 1990; Vice
President of the Company
since 1990; Director of
Corporate Development of
the Company from 1987 to
1990.
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Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
- ---- --- -------------------
Dr. Nicholas D. Trbovich 62 Chairman of the Board of
Directors, President and
Chief Executive Officer
of the Company since
1959.
(b) EXECUTIVE OFFICERS. The following is a listing of the
Company's executive officers:
Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
- ---- --- -------------------
Dr. Nicholas D. Trbovich 62 See table under
"Directors."
Nicholas D. Trbovich, Jr. 37 See table under
"Directors."
Raymond C. Zielinski 53 Vice President since
1990; Director of
Manufacturing of the
Company from 1983 to
1990.
Lee D. Burns 56 Treasurer and Secretary
of the Company since
1991; Controller and
Assistant Treasurer of
the Company from 1978 to
1991.
Nicholas D. Trbovich, Jr. is the son of Dr. Nicholas D.
Trbovich. There are no other family relationships between any of
the directors or executive officers of the Company.
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Item 10. EXECUTIVE COMPENSATION.
DIRECTORS' FEES. Under the Company's standard compensation
arrangements with directors who are not employees, they are paid a yearly
director's fee of $9,000 plus a per meeting fee of $400 and reimbursement of
actual expenses for attendance at Board meetings. Directors who are also
employees do not receive the director's and/or meeting fees.
COMPENSATION TABLE. The following table shows the compensation
paid by the Company to each executive officer of the Company whose total salary
and bonus from the Company and its subsidiaries exceeded $100,000 during any of
the last three fiscal years.
<TABLE>
ANNUAL COMPENSATION
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<CAPTION>
Other
Annual All Other
Name and Compen- Compen-
Principal Position Year Salary Bonus sation(1) sation(2)
- ------------------ ---- ------ ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Dr. Nicholas D. Trbovich 1997 $290,529 $45,000 $28,027 $ 34,380
Chairman, President and 1996 258,872 20,000 26,458 17,612
CEO 1995 257,368 20,000 27,118 13,204
<FN>
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(1) Includes $26,145, $24,660 and $24,661 in 1997, 1996 and 1995, respectively,
for untaken vacation pursuant to a policy that is generally applicable to
all employees of the Company; these amounts reflect accrued vacation earned
and expensed by the Company over several years and prior to the year
payment was received.
(2) All Other Compensation for 1997 includes (i) an allocation of 1,950.426
shares of Common Stock of the Company under the Servotronics, Inc. Employee
Stock Ownership Plan valued as of November 30, 1997 (the date of the
allocation) at the closing price on the American Stock Exchange on that
date of
</TABLE>
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$11-1/4 per share; and (ii) $3,861 for life insurance, but excludes
(iii) based on actuarially determined formulas designed to achieve,
among other things, benefit parity, $165,000 which the Company accrued
in 1996, but did not pay, for a pension-related deferred compensation
program for the benefit of Dr. Trbovich.
The "Bonus" column of the compensation table above includes
discretionary incentive payments authorized by the Board of Directors and paid
in the year indicated in the table. Discretionary payments authorized for 1998
will be included in the compensation table for 1998 to the extent they are paid
in that year. The Board of Directors has made no commitment for incentive
payments in subsequent years.
EMPLOYMENT AGREEMENT. Dr. Trbovich has an employment agreement
with the Company pursuant to which he is entitled to receive minimum direct
compensation of $285,000 per annum or such greater amount as the Company's Board
of Directors may determine. In the event of Dr. Trbovich's death or total
disability during the term of the employment agreement, he or his estate is
entitled to receive 50% of the compensation he is receiving from the Company at
the time of his death or disability during the remainder of the term of the
employment agreement. Also, in the event of (i) a breach of the agreement by the
Company, (ii) a change in control of the Company, as defined, or (iii) a change
in the responsibilities, positions or geographic office location of Dr.
Trbovich, he is entitled to terminate the agreement and receive a payment of
2.99 times his average annual compensation from the Company for the preceding
five years. If this provision is invoked by Dr. Trbovich and the Company makes
the required
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payment, the Company will be relieved of any further liability under the
agreement notwithstanding the number of years covered by the agreement prior to
termination. In the event the agreement is not extended by the Company beyond
the scheduled expiration date (September 30, 2003), as such date may be
extended, Dr. Trbovich will be entitled to a severance payment equal to nine
months' salary and benefits.
FISCAL YEAR-END OPTION VALUES
The following table summarizes information with respect to
unexercised stock options held by Dr. Trbovich at December 31, 1997, all of
which are presently exercisable.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/97 at 12/31/97(1)
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<S> <C> <C>
37,778 $250,072
<FN>
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(1) Determined by subtracting the exercise price (approximately $2.63 per
share) from the closing price for shares of Common Stock of the Company
reported by the American Stock Exchange on December 31, 1997, which was
$9 1/4 per share.
</TABLE>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners. The
following table lists the persons that owned beneficially, as of April 6, 1998,
more than 5% of the outstanding shares of Common Stock of the Company
("Shares"), based on the Company's records. Unless otherwise stated, each person
has sole voting
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and investment power with respect to the Shares indicated as beneficially owned
by that person.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class(1)
<S> <C> <C>
Servotronics, Inc. Employee
Stock Ownership Trust(2) 906,905(2) 38.5%
1110 Maple Street
P.O. Box 300
Elma, New York 14059
Dr. Nicholas D. Trbovich 299,143(3) 12.5%
1110 Maple Street
P.O. Box 300
Elma, New York 14059
Harvey Houtkin(4) 268,500(4) 11.4%
78 Lafayette Avenue
Suffern, New York 10901
<FN>
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(1) Percent of class is based upon 2,355,478 Shares outstanding as of April 6,
1998 plus, in the case of Dr. Trbovich, the Shares subject to his stock
option.
(2) The trustees of the Servotronics, Inc. Employee Stock Ownership
Trust--Nicholas D. Trbovich, Jr., Lee D. Burns and Raymond C.
Zielinski--direct the voting of unallocated Shares. The participants in the
related plan have the right to direct the voting of Shares which have been
allocated to their respective accounts; if a participant does not direct
the vote, the trustees may direct the vote of that participant's Shares. As
of April 6, 1998, approximately 279,779 Shares have been allocated to the
accounts of participants and approximately 627,126 Shares (26.6% of the
Shares outstanding) remain unallocated.
(3) This amount includes (i) 40,376 Shares held by a charitable foundation for
which Dr. Trbovich serves as a trustee; (ii) an option to acquire 37,778
Shares; (iii) approximately 33,198 Shares allocated to Dr. Trbovich's
account under the Servotronics, Inc. Employee Stock Ownership Plan; and
(iv) approximately 3,923 Shares beneficially owned by certain of Dr.
Trbovich's children (as to which Dr. Trbovich disclaims beneficial
interest). This amount does not include the Shares beneficially owned by
certain of Dr. Trbovich's other relatives.
</TABLE>
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(4) Based on a statement on Schedule 13D, as last amended on July 17, 1997,
filed by Mr. Houtkin with the Securities and Exchange Commission. According
to Mr. Houtkin's statement, he has sole voting and investment power with
respect to 203,144 Shares and shared voting and investment power with
respect to 65,356 Shares owned by Wanshef, Inc., which is controlled by Mr.
Houtkin.
(b) Security Ownership of Management. The following table sets
forth, as of April 6, 1998, information as to the beneficial ownership of Shares
of the Company held by each director and by all directors and officers as a
group (each individual listed in the following table has sole voting and
investment power with respect to the Shares indicated as beneficially owned by
that person, except as otherwise indicated):
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class(1)
- ---------------- -------------------- --------
<S> <C> <C>
Dr. Nicholas D. Trbovich 299,143(2) 12.5%
Nicholas D. Trbovich, Jr. 32,151(3) 1.4
Donald W. Hedges 13,906(4) 0.6
Dr. William H. Duerig 12,593(5) 0.5
All directors and
executive officers
as a group 996,375.526(6)(7) 41.5
<FN>
- ----------
(1) Percent of class is based upon 2,355,478 Shares outstanding as of April 6,
1998 plus the number of Shares subject to stock options held by the
indicated person or group.
(2) See note (3) to the table in "Security Ownership of Certain Beneficial
Owners."
(3) This amount includes 18,387 Shares which Mr. Trbovich has the right to
acquire under stock options and approximately 13,763 Shares allocated to
Mr. Trbovich's account under the Servotronics, Inc. Employee Stock
Ownership Plan. Does not
</TABLE>
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include Shares held by the Servotronics, Inc. Employee Stock Ownership
Trust (the "ESOT") as to which Mr. Trbovich serves as one of three
trustees. See note (6) below and the table in "Security Ownership of
Certain Beneficial Owners."
(4) This amount includes 12,593 Shares which Mr. Hedges has the right to
acquire under a stock option. Mr. Hedges has sole voting and investment
power with respect to 838 Shares and shared voting and investment power
with respect to 475 Shares.
(5) This amount represents Shares which Dr. Duerig has the right to acquire
under a stock option.
(6) Includes unallocated Shares held by the ESOT over which certain officers,
as trustees of the ESOT, may be deemed to have voting power, as well as
Shares allocated to the accounts of all officers as a group under the
related plan. See the table in "Security Ownership of Certain Beneficial
Owners" and note (2) thereto.
(7) See notes (2) through (5) above.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During 1997, certain of Dr. Trbovich's sons were employed by the
Company and received, in the aggregate, $137,365 in compensation from the
Company.
Dr. Trbovich is the owner of certain patents and co-owner with the
Company of certain other patents which have been used by the Company on a
royalty-free and exclusive basis with Dr. Trbovich's consent.
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