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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
CZECH INDUSTRIES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.05 PER SHARE
(Title of Class of Securities)
232838 30 0
(CUSIP Number)
August de Roode
Eastbrokers Beteiligungs AG
Schlickgasse 1
1090 Vienna, Austria
43-1-317 27 00
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 1, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
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CUSIP No. 232838 30 0
_______________________________________________________________________________
1) Name of Reporting Person: VCH Vermogensverwaltung und Holding Ges.m.b.H.
S.S. or I.R.S. Identification No. of Above Person: Not applicable
_______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (a)[ ]
(b)[ ]
_______________________________________________________________________________
3) SEC Use Only
_______________________________________________________________________________
4) Source of Funds OO
_______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)[ ]
_______________________________________________________________________________
6) Citizenship or Place of Organization: Austria
_______________________________________________________________________________
7) Sole Voting Power: 71,500*
Number of
Shares ________________________________________________________________
Beneficially 8) Shared Voting Power:
Owned by
Each ________________________________________________________________
Reporting 9) Sole Dispositive Power: 71,500*
Person
With ________________________________________________________________
10) Shared Dispositive Power:
_______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
211,500* shares of Common Stock
_______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
_______________________________________________________________________________
13) Percent of Class Represented by Amount in Row (11):
7.4% of Common Stock, based on 2,871,000* shares of Common
Stock issued and outstanding at August 1, 1996. See Item 5
herein.
_______________________________________________________________________________
14) Type of Reporting Person CO
_______________________________________________________________________________
*All share figures have been adjusted to reflect a one-for-five reverse split
of the common stock effective September 10, 1996.
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CUSIP No. 232838 30 0
_______________________________________________________________________________
1) Name of Reporting Person: August Andre de Roode
S.S. or I.R.S. Identification No. of Above Person: Not applicable
_______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (a)[ ]
(b)[ ]
_______________________________________________________________________________
3) SEC Use Only
_______________________________________________________________________________
4) Source of Funds OO
_______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)[ ]
_______________________________________________________________________________
6) Citizenship or Place of Organization: Austria
_______________________________________________________________________________
7) Sole Voting Power: 140,000*
Number of
Shares ________________________________________________________________
Beneficially 8) Shared Voting Power:
Owned by
Each ________________________________________________________________
Reporting 9) Sole Dispositive Power: 140,000*
Person
With ________________________________________________________________
10) Shared Dispositive Power:
_______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
211,500* shares of Common Stock
_______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
_______________________________________________________________________________
13) Percent of Class Represented by Amount in Row (11):
7.4% of Common Stock, based on 2,871,000* shares of Common Stock
issued and outstanding at August 1, 1996. See Item 5 herein.
_______________________________________________________________________________
14) Type of Reporting Person IN
_______________________________________________________________________________
*All share figures have been adjusted to reflect a one-for-five reverse split
of the common stock effective September 10, 1996.
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ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, $.05 par value of Czech
Industries, Inc. ("Common Stock"), a Delaware corporation, having its principal
executive offices at 15245 Shady Grove Road, Suite 340,
Rockville, Maryland 20850 (the "Company" or the "Issuer").
All share figures set forth herein reflect the one-for-five reverse split
of the Company's Common Stock which became effective on September 10, 1996.
ITEM 2. IDENTITY AND BACKGROUND.
CORPORATE SECURITYHOLDER
(a) This statement is being filed by VCH Vermogensverwaltung und
Holding Ges.m.b.H., an Austrian corporation ("VCH"),
(b) The address of the principal executive office of VCH is
Turkenstrasse 25/26, 1090 Vienna, Austria.
(c) The principal business of VCH: VCH was formed to be a holding
company and has no operations.
(d) During the last five years, VCH has not been convicted in a
criminal proceeding.
(e) During the last five years, VCH has not been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and is not subject to a judgment, decree or final
order enjoining future violations of, prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
EXECUTIVE OFFICERS AND DIRECTORS OF, AND PERSONS CONTROLLING, VCH AND AUGUST
ANDRE DE ROODE, INDIVIDUALLY
AUGUST ANDRE DE ROODE
(a) This statement is being filed by August Andre de Roode, a
director and the principal shareholder of VCH, and by August
Andre de Roode, individually.
(b) Mr. de Roode's business address is Schlickgasse 1, A-1090 Vienna,
Austria.
(c) Mr. de Roode's principal occupation is as chief executive officer
for the Issuer. The principal address at which such employment
is conducted is Schlickgasse 1,
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A-1090 Vienna, Austria. In connection with the transactions
described in this Schedule 13D, Mr. de Roode was one of three
principal shareholders of Eastbrokers Beteiligungs AG. As a
result of the Issuer's acquisition of Eastbrokers, Mr. de Roode
has been appointed to serve as a member of the board of directors
of the Issuer and has been named the chief executive officer of
the Issuer.
(d) During the last five years, Mr. de Roode has not been convicted
in a criminal proceeding.
(e) During the last five years, Mr. de Roode has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction and is not subject to a judgment, decree
or final order enjoining future violations of, prohibiting or
mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) Mr. de Roode is a citizen of The Netherlands.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The 211,500 shares of Common Stock of the Company which are the subject of
this Schedule 13D were acquired as a result of the acquisition of Eastbrokers
Beteiligungs AG ("Eastbrokers") by the Company pursuant to a certain Stock
Purchase Agreement dated June 14, 1996 (the "Agreement ). Both VCH and
Mr. de Roode exchanged their shares of Eastbrokers for shares of the Company.
ITEM 4. PURPOSE OF THE TRANSACTION.
The 211,500 shares of Common Stock of the Company referenced herein were
acquired for investment purposes.
Pursuant to the Agreement, August Andre de Roode may be issued additional
consideration for the sale of his shares of Eastbrokers. Such additional
consideration shall be issued in the event Eastbrokers earns Net Profits, as
defined in the Agreement, aggregating US $4 million or more (net of any loss
incurred for the fiscal year ending December 31, 1996) for the two fiscal years
ending December 31, 1998. Further, Mr. de Roode may be issued additional shares
of Common Stock of the Company depending upon the net proceeds received from
the possible future sale of the Hotel Fortuna a.s. and the timing of such sale.
Pursuant to the Agreement, the Company also issued options ("Options") to
acquire 34,000 shares of Common Stock to Mr. de Roode. The Options are
non-qualified stock options. The exercise price of the Options is $10.00. The
Options may not be exercised until the expiration of six months from the date
of August 1, 1996, and the Options are no longer exercisable five
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years from the date of August 1, 1996. The Options are subject to a number of
restrictions, including continued employment, and shall not be transferred
other than by will or by the laws of descent and distribution. The Options are
exercisable, during the grantee's lifetime, only by the grantee or by the legal
guardian or legal representative of the grantee. The Company has agreed to file
a Form S-8 Registration Statement under the Securities Act of 1933 (the "Act")
with respect to the shares of common stock subject to the Options. Any fees or
expenses arising out of or resulting from the filing of such registration
statement will be the responsibility of the Company. In the event such
registration statement cannot be filed or is not effective with respect to such
shares at the time the Options are exercised, the Company will require that any
offer and sale of such shares be exempt from the registration provisions of the
Act.
To the best knowledge of the undersigned, the board of directors is
considering selling its interest in the Hotel Fortuna a.s. at some time in the
foreseeable future as favorable market conditions prevail.
Pursuant to the Agreement, and effective August 1, 1996, the board of
directors was reduced from nine directors to eight with one seat remaining
temporarily vacant. Dr. Michael Sumichrast, Ph.D., Martin A. Sumichrast, Petr
Bednarik, Randall F. Greene and Peter Schmid are continuing as directors of the
Company and August A. de Roode and Wolfgang Kossner have joined the board.
Messrs. Kossner, de Roode and Schmid have the right to designate the
individual to fill the vacant seat on the board. Dr. Michael Sumichrast will
remain as Chairman of the Board, August A. de Roode has become the Chief
Executive Officer, Peter Schmid has become the President, Martin A. Sumichrast
will remain as the Chief Financial Officer and an Executive Vice President and
Wolfgang M. Kossner has become an Executive Vice President.
The business of the Company, at the parent level, is to operate income
generating businesses located in Eastern and Central Europe. The business of
Eastbrokers' subsidiaries is to provide investment banking and brokerage
services to Eastern and Central European clients and, to a lesser extent, US
clients. The business of the Company's subsidiary, the Hotel Fortuna a.s., is
to manage the Hotel Fortuna.
The Company reported that it has been advised by the NASDAQ Stock Market,
Inc. that in NASDAQ's view, the Company's acquisition of Eastbrokers has
resulted in a change of control of the Company. Based upon this, NASDAQ has
indicated that, in order to maintain its listing, the Company must meet all of
the criteria for initial listing on the SmallCap Market System. The Company
believes that the acquisition of Eastbrokers does not trigger the need to meet
initial listing requirements and requested a hearing before the NASDAQ Listing
Qualifications Committee (the "Committee"). This hearing took place on August
29, 1996 and the Company has been advised by NASDAQ that, although the
Committee determined that the Company needed to meet the initial listing
criteria in order to maintain its listing, the Committee has granted a
temporary exception to these criteria as to enable the Company to implement
a one-for-five reverse split. On September 10, 1996, the Company held a
special meeting of stockholders at which the reverse split was approved.
Under the terms of the temporary exception, the Company needed to maintain a
bid price of $3.00 or more during the 10 trading days
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commencing September 11, 1996. By letter dated September 30, 1996, NASDAQ
advised the Company that it has complied with all requirements necessary for
continued listing on the NASDAQ SmallCap Market.
The foregoing only purport to be summaries of certain portions of the
Agreement and related documents and of the potential present plans or proposals
of the Company. Reference is made to the copy of the Agreement and such related
documents for the full terms and conditions thereof and to the Company's Current
Report on Form 8-K dated August 1, 1996.
While the Reporting Persons (and their affiliates) have no present plans
or proposals which relate to or would result in the acquisition or disposition
by any person of securities of the Issuer, the investments in the Issuer by the
Reporting Persons (and their affiliates) will be periodically reviewed and at
any time the amount of such investments may be increased, through open market
purchases or otherwise, or decreased. Except as set forth in this Item and as
may otherwise be set forth in this Schedule 13D, the reporting Persons (and
their affiliates) do not at the present time have any plans or proposals which
relate to or would result in:
(1) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(2) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(3) A sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(4) Any change in the present Board of Directors or management of the
Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the Board;
(5) Any material change in the present capitalization or dividend
policy of the Issuer;
(6) Any other material change in the Issuer's business or corporate
structure;
(7) Changes in the Issuer's Certificate of Incorporation, by-laws or
instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person;
(8) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered
national securities association;
(9) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
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(10) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b)
VCH VERMOGENSVERWALTUNG UND HOLDING GES.M.B.H.
As of the date hereof, VCH is the record and beneficial owner of 71,500
shares of Common Stock of the Company, over which it has sole voting power and
sole power to dispose. Said shares represent 2.5% of the issued and outstanding
shares of such Common Stock of the Company, based on 2,871,000 shares issued
and outstanding at August 1, 1996 (as adjusted for the reverse split).
AUGUST ANDRE DE ROODE
As of the date hereof, August Andre de Roode, as a director and the
principal shareholder of VCH, is the indirect beneficial owner of 71,500 shares
of Common Stock of the Company, over which he has sole voting power and sole
power to dispose. Said shares represent 2.5% of the issued and outstanding
shares of such Common Stock of the Company, based on 2,871,000 shares issued
and outstanding at August 1, 1996 (as adjusted for the reverse split). August
Andre de Roode, individually, is the record and beneficial owner of 140,000
shares of Common Stock of the Company, over which he has sole voting power and
sole power to dispose. Said shares represent 4.9% of the issued and outstanding
shares of such Common Stock of the Company, based on 2,871,000 shares issued
and outstanding at August 1, 1996 (as adjusted for the reverse split).
Collectively, Mr. de Roode has the sole power to direct the vote and sole power
to dispose of 211,500 or 7.4% of the shares of Common Stock of the Company.
(c) Other than the transactions described herein, none of the
Reporting Persons has effected any transaction in the securities of the Company
during the past sixty (60) days.
(d) August Andre de Roode, the principal stockholder of VCH, has the
right to receive or the power to direct the receipt of dividends from, or
proceeds from the sale of, the securities of the Company held by VCH. Mr. de
Roode, individually, has the right to receive and the power to direct the
receipt of dividends from, or proceeds for the sale of, the securities of the
Company held in his name.
(e) Not applicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Pursuant to the Agreement, Mr. de Roode agreed that for the three year
period following the closing of the transaction, he will vote his shares, or any
shares over which he has direct or indirect voting control, in favor of any
recommendation of the board of directors relating to certain material events.
Also, in respect of any vacancy created by the resignation, removal or
expiration of term of Dr. Michael Sumichrast, Martin A. Sumichrast, Randall F.
Greene and Ing. Petr Bednarik or any successor to such persons, Mr. de Roode
will vote his shares, or any shares over which he has direct or indirect voting
control, in favor of the person designated by the majority of the above
mentioned directors.
Pursuant to an Employment Agreement dated August 1, 1996, and effective as
of such date, the Company has agreed to employ Mr. de Roode, and Mr. de Roode
has agreed to serve, as the Chief Executive Officer of the Company. The
employment agreement will expire on August 1, 1999, and will have an
additional three-year renewal option following the expiration date, unless
contrary notice is given by either party. The annual salary under the
employment agreement is $120,000. The salary will be paid by a subsidiary of
the Company and guaranteed by the Company. The salary may be increased to
reflect annual cost of living increases and may be supplemented by
discretionary merit and performance increases as determined by a compensation
committee, except that during the first three years following August 1, 1996
the salary may not exceed $150,000 without the approval of the Board of
Directors of the Company. Under the employment agreement Mr. de Roode will be
eligible to receive an annual bonus of $30,000, which will not be subject to
any performance criteria. The agreement provides, among other things, for
participation in an equitable manner in any discretionary bonuses or any
profit-sharing or retirement plan for employees or executives and for
participation in other employee benefits applicable to employees and
executives of the Company. The Agreement further provides for the use of an
automobile and other fringe benefits commensurate with his duties and
responsibilities. The Agreement also provides for benefits in the event of
disability.
Pursuant to a Restrictive Covenant executed by August A. de Roode and
dated August 1, 1996, Mr. de Roode has agreed, for the longer of three years
following August 1, 1996 or for one year following the date of his
termination of employment with the Company, not to (i) persuade or attempt to
persuade any customer or any potential customer, of the Company to cease
doing business with or not to hire the Company, (ii) solicit for himself, or
any other person other than the Company, the business of any company which is
a customer of the Company or which was its customer during the six months
prior to termination, or (iii) persuade or attempt to persuade any employee
of the Company to leave the Company's employ or to become employed by any
person other than the Company. Further, Mr. de Roode has agreed (providing
certain exceptions) for a period of six months following the termination of
employment, (i) not to perform any services for any person other than the
Company in (a) connection with investment banking or brokerage businesses in
any nation in which the Company presently conducts business, (b) connection
with any business which was conducted by the Company within one year prior to
termination, or (ii) participate in any business opportunity that falls
within the scope of
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business conducted by the Company, without first offering the opportunity to
the Company. Mr. de Roode has also agreed to keep confidential any
information (providing certain exceptions) of the Company for the longer of
three years from August 1, 1996 or one year following the date of termination
of employment.
Except as set forth in this Item and in Item 4 of this Schedule 13D, there
are no contracts, arrangements, understandings or relationships (legal or
otherwise, except the contractual and legal relationships inherent in the
relationships between or among VCH and Mr. de Roode as a result of his
position as an executive officer, director, and principal stockholder of VCH)
between or among the undersigned or any of them, or between or among the
undersigned and any other person with respect to any securities of the
Issuer, including but not limited to transfer or voting of any such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies. None of the shares of Common Stock reported herein
as beneficially owned by the undersigned are pledged or otherwise subject to
a contingency the occurrence of which would give another person voting or
investment power over such securities.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NUMBER DOCUMENT
-------------- --------
1 Stock Purchase Agreement dated June 14, 1996 between
the Company and Eastbrokers Beteiligungs AG and
Exhibits A-J is incorporated by reference from the
Company's Current Report on Form 8-K dated August 1,
1996.
2 Employment Agreement dated August 1, 1996 between the
Company and August A. de Roode, the form of such
Employment Agreement is incorporated by reference from
the Company's Current Report on Form 8-K dated August
1, 1996.
3 Stock Option Agreement dated August 1, 1996 between
the Company and August A. de Roode, the form of such
Stock Option Agreement is incorporated by reference
from the Company's Current Report on Form 8-K dated
August 1, 1996.
4 Restrictive Covenant of August A. de Roode dated
August 1, 1996, the form of such Restrictive Covenant
is incorporated by reference from the Company's
Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1996.
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SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Date: October 9, 1996 VCH VERMOGENSVERWALTUNG UND
HOLDING GES.M.B.H.
By:/s/ AUGUST ANDRE DE ROODE
-------------------------
Name: August Andre de Roode
Title: Director
/s/ AUGUST ANDRE DE ROODE
-------------------------
August Andre de Roode
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EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1 Stock Purchase Agreement dated June 14, 1996
between the Company and Eastbrokers Beteiligungs
AG and Exhibits A-J is incorporated by reference
from the Company's Current Report on Form 8-K
dated August 1, 1996.
2 Employment Agreement dated August 1, 1996 between
the Company and August A. de Roode, the form of
such Employment Agreement is incorporated by
reference from the Company's Current Report on
Form 8-K dated August 1, 1996.
3 Stock Option Agreement dated August 1, 1996
between the Company and August A. de Roode, the
form of such Stock Option Agreement is
incorporated by reference from the Company's
Current Report on Form 8-K dated August 1, 1996.
4 Restrictive Covenant of August A. de Roode dated
August 1, 1996, the form of such Restrictive
Covenant is incorporated by reference from the
Company's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1996.
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