SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 10-K/A
Amendment No. 1
For the Year Ended December 31, 1998
Commission File No. 0-23382
TRANS GLOBAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1544008
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1393 Veterans Memorial Highway
Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 724-0006
Indicate by a 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. [ ]
Purpose of Amendment: To include Part III.
<PAGE> 1
Part III
Item 10. Directors and Executive Officers of the Registrant
Our directors and executive officers are as follows:
Name Age Position
Joseph G. Sicinski 67 President, chief executive officer and director
Edward D. Bright1 67 Chairman of the board and director
Glen R. Charles 45 Chief financial officer, treasurer and secretary
Frank Vincenti 46 Vice President
Donald Chaifetz 66 Director
James L. Conway1 50 Director
Seymour Richter1 62 Director
1 Member of the audit and compensation committees.
Mr. Joseph G. Sicinski has been our president and a director and president and a
director of our predecessor since September 1992 and our chief executive officer
since April 1998. For more than eight years prior thereto, he was executive vice
president of corporate marketing for Interglobal Technical Services, Inc., which
was engaged in providing technical temporary staffing services. Mr. Sicinski is
also a director of Netsmart Technologies, Inc., a publicly-held company that
markets medical information systems. Consolidated Technology Group Ltd., our
largest stockholder, is the largest stockholder of Netsmart.
Mr. Edward D. Bright has been our chairman of the board and a director since
April 1998. In April 1998, Mr. Bright was also elected as chairman, secretary,
treasurer and a director of Consolidated Technology and chairman and a director
of Netsmart. From January 1996 until April 1998, Mr. Bright was an executive
officer of or advisor to Creative Socio-Medics Corp., a subsidiary of Netsmart
which was acquired in June 1994. From June 1994 until January 1996, he was
Netsmart's chief executive officer. For more than two years prior thereto, he
was a senior executive officer of Creative Socio-Medics and its former parent.
Mr. Glen R. Charles has been our chief financial officer and treasurer and chief
financial officer and treasurer of our predecessor since November 1994 and our
secretary since April 1998. From 1992 to November 1994, he was engaged in the
private practice of accounting.
Mr. Frank Vincenti has been our vice president since June 1998. From 1997 until
May 1998, he was regional vice president for Actuim, Inc., an information
technology company. For eleven years prior thereto he was vice president of CDI
Corporation, technical temporary staffing and information technology company.
Mr. Donald Chaifetz has been a director since April 1998. Mr. Chaifetz is a
principal of Maldon Co., Inc., an importing company. Mr. Chaifetz has been in
the importing business for more than the past five years. He is also a director
of Consolidated Technology.
Mr. James L. Conway has been a director since June 1998. He is president and a
director of Netsmart, positions he has held since January 1996. He has been
Netsmart's chief executive officer since April 1998. From 1993 until April 1998,
he was president of S-Tech, a manufacturer of specialty vending equipment for
postal, telecommunication and other industries, which, until April 1998, was a
wholly-owned subsidiary of Consolidated Technology. From 1997 until April 1998,
Mr. Conway was also president of other subsidiaries of Consolidated Technologies
engaged in manufacturing.
<PAGE> 2
Mr. Seymour Richter has been a director since April 1998. Since April 1999, Mr.
Richter has been a consultant to Consolidated Technology. From April 1998 until
April 1999, he was president, acting chief executive officer and a director of
Consolidated Technology. From July 1995 until April 1998, Mr. Richter was
employed by Patterson Travis Operating Account, Inc., a private company that
makes investments for its own account. For more than five years prior thereto,
he was the chief executive officer of Touch Base Ltd., an independent selling
organization in the apparel industry. Mr. Richter is also a director Netsmart.
The Board of Directors created audit and compensation committees, both of which
consists of Messrs. Bright, Conway and Richter, each of whom is a non-employee
director. The audit committee has the authority to approve our audited financial
statements, to meet with the Company's independent auditors, to review with the
auditors and with management any management letter issued by the auditors and to
generally exercise the power normally accorded an audit committee of a public
corporation. In addition, any transactions between us or our subsidiaries, on
the one hand, and any officer, director or principal stockholder or any
affiliate of any officer, director or principal stockholder, on the other hand,
requires the prior approval of the audit committee.
The compensation committee serves as the stock option committee pursuant to our
stock option plans. In addition, it reviews and approves any changes in
compensation for our executive officers.
Directors are elected for a term of one year.
None of the Companys officers and directors are related.
The Company's certificate of incorporation includes certain provisions,
permitted under Delaware law, which provide that a director of the Company shall
not be personally liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for any transaction from which
the director derived an improper personal benefit, or (iv) for certain conduct
prohibited by law. The Certificate of Incorporation also contains broad
indemnification provisions. These provisions do not affect the liability of any
director under Federal or applicable state securities laws.
Section 16(a) Beneficial Ownership Reporting Compliance
During 1998, Consolidated and SIS Capital did not file Form 5 pursuant to
Section 16(a) of the Securities Exchange Act of 1934 with respect to their
ownership of certain securities, and Messrs. Edward D. Bright, Donald Chaifetz
and Seymour Richter filed their Form 3, which was due in April 1998, in June
1998.
Item 11. Executive Compensation
Set forth below is information with respect to compensation paid or accrued by
the Company for 1998, 1997 and 1996 to its chief executive officer, the only
officer whose salary and bonus for 1998 exceeded $100,000.
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
(Awards)
Options, SARs
Name and Principal Position Year Salary Bonus (Number)
Joseph G. Sicinski CEO (from
April 1998) and president 1998 $267,173 $48,800 60,000
1997 243,000 96,000 90,000
1996 195,500 -- 199,999
Lewis S. Schiller, CEO1
(prior to April 1998) 1998 -- -- --
1997 -- -- 25,000
1996 -- -- 92,499
</TABLE>
1 Mr. Schiller resigned as an officer and director in April 1998. Mr. Schiller
has received no compensation from us. During 1998, Consolidated Technology
reported that Mr. Schiller's compensation for 1998 included salary of $138,000
and other annual compensation of $3.5 million, which represented $1.2 million
paid to him and his designated family members for his ownership in one of
Consolidated Technology's subsidiaries which was sold in 1998, $1.9 million for
the purchase of his contract rights by the Company and $350,000 for other
payments due pursuant to a settlement agreement with Mr. Schiller. In 1997,
Consolidated Technology paid Mr. Schiller $616,000 in salary and $358,000 in
other annual compensation, which represented commissions paid to him on
Consolidated Technology's investment activities. In 1996, Consolidated paid Mr.
Schiller salary of $286,000.
In October 1997, Mr. Joseph G. Sicinski entered into a five-year employment
agreement with the Company pursuant to which he received annual compensation of
$260,000, subject to an annual cost of living increase. In addition, he is
entitled to a bonus of 5% of the Company's income before taxes, all non-cash
adjustments and all payments to Consolidated, provided, that such bonus shall
not exceed 200% of his annual salary. The Company also provides Mr. Sicinski
with an automobile which he may use for personal use.
The following table sets forth information concerning options granted during the
year ended December 31, 1998 pursuant to our long-term incentive plans. No SARs
were granted.
<TABLE>
<S> <C> <C> <C> <C> <C>
Option Grants in Year Ended December 31, 1998
Potential
% of Total Realizable
Number of Options Granted Value at
Shares Granted to Assumed Annual
Underlying Employees Exercise of Stock Price
Options in Fiscal Price Per Expiration Appreciation
Name Granted Year Share Date 5%($) 10%($)
Joseph G. Sicinski 60,000 27.9% $1.251 6/2/03 $14,400 $41,400
Lewis S. Schiller -- -- -- -- -- --
</TABLE>
<PAGE> 4
1 These options were granted on June 3, 1998 at an exercise price of $4.00,
which was the fair market value on such date. On November 23, 1998, these
options were repriced at $1.25 per share, which was the fair market value on
such date.
On November 23, 1998, the compensation committee approved the repricing of the
stock options to purchase 215,000 shares of common stock held by employees,
including options held by Mr. Sicinski. The grant of the new option and
cancellation of the old option were based on our projected profitable operations
for 1998, notwithstanding the decline in the stock price. Set forth below is
information concerning the repricing of options during the period that.
Option Repricing Table
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Number of
Securities Market Price of
Underlying Stock at Time Exercise Price
Options of Repricing or at Time of New Exercise Length of Original Term
Name Date Repriced or Amendment Repricing or Price Remaining at Date of
Amended Amendment Repricing or Amendment
Joseph G. Sicinski 11/23/98 60,000 $1.25 $ 4.00 $1.25 Four years, seven months
- ------------------------- ----------- --------------- ----------------- ---------------- -------------- ----------------------------
Joseph G. Sicinski 3/18/96 41,666 6.75 12.75 6.75 Five years, five months
- ------------------------- ----------- --------------- ----------------- ---------------- -------------- ----------------------------
</TABLE>
The following table sets forth information concerning the exercise of options
and warrants during the year ended December 31, 1998 and the year-end value of
options held by our officers named in the Summary Compensation Table. No stock
appreciation rights ("SARs") have been granted.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value
<TABLE>
<S> <C> <C> <C> <C>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options1 at Fiscal Options at Fiscal
Year End Year End2
Shares Acquired Value Exercisable/ Exercisable/
Name Upon Exercise Realized Unexercisable Unexercisable
Joseph G. Sicinski -- -- 358,664/76,669 $30,000/--
Lewis S. Schiller -- -- 158,333/--3 --
</TABLE>
<PAGE> 5
1 The number of shares of common stock subject to options includes shares of
common stock issuable upon exercise of warrants. For purposes of this table,
options which became exercisable on January 1, 1999 are treated as exercisable
on December 31, 1999.
2 The determination of "in the money" options at December 31, 1998, is based on
the closing price of the common Stock on the Nasdaq SmallCap Market on December
31, 1998, which was $1.75.
3 Does not include warrants held by DLB, Inc., which is owned by Mr. Schiller's
wife. Mr. Schiller disclaims beneficial ownership in DLB or in any securities
owned by DLB. Warrants held by Mr. Schiller include warrants issued to him by us
and warrants transferred to him by SIS Capital.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Set forth below is information as of April 26, 1999, as to each person owning of
record or known by us, based on information provided to us by the persons named
below, to own beneficially at least 5% of our common stock, each director, each
officer named in the Summary Compensation Table and all officers and directors
as a group.
Percent of Outstanding
Name and Address1 Shares Common Stock
SIS Capital Corp. 1,529,9942 40.1%
Consolidated Technology Group Ltd.
160 Broadway
New York, NY 10038
Joseph G. Sicinski 633,6633 16.6%
1393 Veterans Memorial Highway
Hauppauge, New York 11788
Edward D. Bright 20,000-4 *
James L. Conway 12,000-5 *
Donald Chaifetz 10,000-4 *
Seymour Richter 10,000-4 *
All directors and officers as a group
(seven individuals) 762,329-6 20%
* Less than 1%.
1 Unless otherwise indicated, each person has the sole voting and sole
investment power and direct beneficial ownership of the shares. Each person is
deemed to beneficially own shares of common stock issuable upon exercise of
options or warrants which are exercisable on or within 60 days after the date as
of which the information is provided.
2 Represents shares of common stock owned by SIS Capital, a wholly-owned
subsidiary of Consolidated Technology. In February 1999, SIS Capital transferred
to escrow 1,150,000 shares of our common stock, which are to be delivered to us
in May 1999 unless Consolidated Technology elects to make certain payment to us
as described under "Item 13. Certain Relationships and Related Transactions."
<PAGE> 6
3 Includes 358,664 shares of common stock issuable upon exercise of outstanding
warrants and options held by Mr. Sicinski.
4 Represents shares of common stock issuable upon exercise of outstanding
options held by each of such persons.
5 Includes 10,000 shares of common stock issuable upon exercise of outstanding
options held by Mr. Conway.
6 Footnotes 3, 4 and 5 are incorporated by reference. The number includes 76,666
shares of common stock issuable upon exercise of outstanding options held by two
other officers.
Item 13. Certain Relationships and Related Transactions
On February 25, 1999, we entered into an agreement with Consolidated Technology
Group Ltd. and its wholly-owned subsidiary, SIS Capital Corp., pursuant to which
SIS Capital is to transfer to us 1,150,000 shares of the our common stock which
are owned by SIS Capital in satisfaction of (i) Consolidated's Technology's
obligations to pay the redemption price of $2,100,000 payable with respect to
the Consolidated Series G 2% Cumulative Redeemable Preferred Stock owned by us
together with accrued dividends of approximately $140,000 and (ii) Consolidated
Technology's obligations to pay us $325,952 in respect of advances made by us to
certain of Consolidated Technology's subsidiaries. The agreement, as amended,
also gives Consolidated Technology the right to retain the 1,150,000 shares if
Consolidated Technology pays the redemption price of $2,100,000 together with
the accrued dividends and the $325,952 due to us from Consolidated Technology by
April 30, 1999. The 1,150,000 shares are being held in escrow pending the
election by Consolidated Technology to make such payment.
SIS Capital is presently our largest stockholder, owning 1,529,994 shares of
common stock, which represents approximately 40.1% of our common stock. If the
1,150,000 shares of common stock are transferred, SIS Capital will own 379,994
shares, or approximately 14.2% of our common stock. Consolidated Technology will
have certain registration rights with respect to these shares.
We had a management services agreement with Consolidated Technology pursuant to
which we paid Consolidated Technology a monthly fee of $10,000 per month prior
to February 1998 and $15,000 per month thereafter. This agreement was terminated
in April 1998. During 1998, we paid Consolidated Technology $55,000 pursuant to
this agreement.
In connection with the April 1998 resignations of Mr. Lewis S. Schiller as chief
executive officer and a director, Mr. E. Gerald Kay as a director and Ms.
Grazyna Wnuk as secretary, we exchanged general releases with such persons.
<PAGE> 7
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.
TRANS GLOBAL SERVICES, INC.
Dated: April 27, 1999 By
Joseph G. Sicinski, President and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
/s/* President, Chief Executive
Joseph G. Sicinski Officer and Director (Principal
Executive Officer)
/s/* Chief Financial Officer
Glen R. Charles (Principal Financial and
Accounting Officer)
/s/* Director By*
Edward D. Bright Joseph G.Sicinski
Attorney-in-Fact
April 27, 1999
/s/* Director
James L. Conway
/s/* Director
Donald Chaifetz
/s/* Director
Seymour Richter
