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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
AMENDMENT NO. 1 TO ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
Commission File Number: 33-76930
TELEBANC FINANCIAL CORPORATION
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(Exact name of registrant as specified
in its charter)
Delaware 13-3759196
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(State or other jurisdiction of (IRS Employer
incorporation organization) Identification No.)
1111 North Highland Street 22201
Arlington, Virginia -----
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(Address of principal executive office) (Zip Code)
(703) 247-3700
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(Registrant's telephone number, including area code)
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names, ages, positions and the
offices held in the Company by each of the executive officers and directors of
the Company as of April 1, 1996:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES
---- --- ---------------------
<S> <C> <C>
David A. Smilow 34 Chairman of the Board and Chief Executive Officer
Mitchell H. Caplan 38 Director of the Company and President
Aileen Lopez Pugh 28 Executive Vice President and Chief Financial Officer/Treasurer
David R. DeCamp (1)(2) 36 Director of the Company
Mark Rollinson (1) 59 Director of the Company
Arlen W. Gelbard (3) 38 Director of the Company
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</TABLE>
(1) Member of the compensation committee of the Company.
(2) Member of the audit and compliance committees of the Company.
(3) In February 1996, Mr. Gelbard was appointed by the Board of Directors
to complete the unexpired term of Mr. Don Christensen, who resigned
from the Board in September 1995.
DAVID A. SMILOW, has served as Chairman of the Board and Chief
Executive Officer of the Company since March 1994. Since January 1994, Mr.
Smilow has served as Chairman of the Board of TeleBank. Prior to January 1994,
Mr. Smilow served as President of TeleBank. Since 1992, Mr. Smilow has been a
director and treasurer of Arbor Capital Partners, Inc. ("Arbor Capital"), a
registered investment adviser and broker-dealer subsidiary of MET Holdings.
From 1987 to 1989, Mr. Smilow was an associate at Goldman Sachs in the Mortgage
Capital Markets Group.
MITCHELL H. CAPLAN has served as a Director and President of the
Company since January 1994. Since January 1994, Mr. Caplan has served as Vice
Chairman of the Board, President and Chief Executive Officer of TeleBank. Mr.
Caplan was a co-founder of Arbor Capital and has served as its Vice President
and a director since 1992. From 1990 until December 1993, Mr. Caplan was a
member of the law firms of Danziger & Caplan and Zuckerman & Gore, where he
represented and advised private and public commercial institutions, including
MET Holdings.
AILEEN LOPEZ PUGH has served as Executive Vice President and Chief
Financial Officer/Treasurer of the Company and TeleBank since August 1994.
Prior to joining management of the Company and TeleBank, Ms. Pugh served as a
director from 1993 to 1994. From December 1993 to May 1994, she served as a
consultant to MET Holdings in connection with the organization of the Company
and its initial public offering. From 1989 through 1992, Ms. Pugh, a certified
public accountant, was an auditor with KPMG Peat Marwick.
DAVID R. DECAMP has served as a director of the Company since March
1994 and as a director of TeleBank since 1992. Since 1988, Mr. DeCamp has been
employed as a commercial real estate broker with Cassidy & Pinkard, Inc. Mr.
DeCamp is the Chairman of the audit and compliance committees of the Company
and TeleBank.
MARK ROLLINSON has served as a director of the Company since March
1994 and as a director of TeleBank since 1992. He is a self-employed attorney
based in Leesburg, Virginia. Mr. Rollinson serves as Chairman of the
compensation committee of the Company and Telebank.
ARLEN W. GELBARD was appointed to serve as a director of the Company
in February 1996. Mr. Gelbard is a member of the law firm of Hofheimer Gartlir
& Gross, LLP, New York, New York where he has specialized in transactional real
estate, lending, leasing, foreclosures and workouts since 1982. Mr. Gelbard is
a member of the New York State Bar Association and American Bar Association.
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ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION
Set forth below is certain information for the two fiscal years
ended December 31, 1995 and 1994 relating to compensation received by the
Company's Chief Executive Officer and all executive officers of the Company
other than the Chief Executive Officer (collectively the "Named Executive
Officers") whose total annual salary and bonus for the fiscal year ended
December 31, 1995 exceeded $100,000 for services rendered in all capacities.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
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SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($)(a) BONUS ($) OPTIONS (#) COMPENSATION ($)(b)
- ------------------ ---- ------------- --------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
David A. Smilow, Chairman
and Chief Executive Officer of
the Company and Chairman of
of Telebank 1995 $205,000 $150,000 --- $15,000
1994 180,000 75,000 (c) 105,365 15,000
Mitchell H. Caplan, President of
the Company and Vice Chairman,
President and Chief Executive 1995 205,000 150,000 --- 15,000
Officer of TeleBank 1994 180,000 125,000 (c) 105,365 15,000
Aileen Lopez Pugh, Executive Vice
President and CFO/Treasurer 1995 75,000 60,000 5,000 13,500
of the Company and TeleBank(d) 1994 18,735 10,000 5,000 ---
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</TABLE>
(a) Salary earned from the Company and TeleBank.
(b) Dollar value of contributions by TeleBank to each officer's account in
the Company's Employee Stock Option Plan.
(c) Mr. D. Smilow's and Mr. Caplan's 1994 bonuses reflect $75,000 for
bonuses not paid until the first quarter of 1995 as they were
contingent upon successful completion of the restructuring of an asset.
Mr. Caplan also received a $50,000 bonus from Telebank in 1994 upon
becoming President.
(d) Ms. Pugh joined the Company and Telebank in August 1994.
STOCK OPTIONS
Option Grants. The following table contains information with respect
to grants of stock options for Common Stock to the sole Named Executive Officer
who received options during 1995. All such grants were made under the Company's
1994 Stock Option Plan. The Company does not have any stock appreciation rights
("SARs").
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS (a) OPTION TERM (b)
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% OF TOTAL OPTIONS
NUMBER OF GRANTED
SECURITIES UNDERLYING TO EMPLOYEES EXERCISE OR BASE EXPIRATION
NAME OPTIONS GRANTED (#) IN FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
- ---- ------------------- ---------------- -------------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Aileen Lopez Pugh 5,000 15.6% $5.50 2/15/05 $17,295 $3,8428
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</TABLE>
(a) Option grants were made on February 15, 1995 with 20% immediately
exercisable and 20% becoming exercisable in each subsequent year
through 1999.
(b) The dollar amounts under these columns are the result of calculations
at the 5% and 10% assumed annual growth rates mandated by the
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, in the Company's Common Stock price.
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Option Exercises and Holdings. The Named Executive Officers did not
exercise any stock options during 1995. The following table presents
information with respect to outstanding options held by the Named Executive
Officers at year-end 1995. There are no outstanding SARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at Money Options
FY-End (#) at FY-End ($) (1)
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Shares Acquired Value Realized
Name on Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David A. Smilow --- --- 42,146 63,219 $ 43,388 $ 65,082
Mitchell H. Caplan --- --- 42,146 63,219 43,388 65,082
Aileen Lopez Pugh --- --- 4,000 6,000 7,125 12,250
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</TABLE>
(1) Based on last reported sale price of the Company's Common Stock on
December 31, 1995 of $7.75 per share and applicable per share exercise
price for the options. For each of Messrs. Smilow and Caplan, 42,617
options were granted on April 28, 1994 with an exercise price of
$6.125, with the remainder having an exercise price equal to $7.125.
The options expire in April 2004 and were granted with 20% immediately
exercisable and 20% becoming exercisable in each subsequent year. As
for Ms. Pugh, the Company has granted a total of 10,000 options with
5,000 options granted on April 28, 1994 with an exercise price of
$6.125, and 5,000 options granted on February 15, 1995 with an exercise
price of $5.50. The options expire in April 2004 and February 2005,
respectively. All option grants for Ms. Pugh were granted with 20%
immediately exercisable and 20% becoming exercisable in each subsequent
year.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive $750 for each Company
board and committee meeting attended, and non-employee directors of TeleBank
receive $750 for each TeleBank board or committee meeting attended. In
addition, non-employee directors are reimbursed for travel costs and other
out-of-pocket expenses incurred in attending such meeting. Annual directors'
fees are capped at $3,000 per board member of the Company and $12,000 per board
member of TeleBank.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the
beneficial ownership of the Company's Common Stock as of April 1, 1996 by (i)
any person known to the Company to be the beneficial owner of more than 5% of
any class of the Company's voting securities, (ii) each director and person
nominated to be a director, (iii) the Chief Executive Officer and the Named
Executive Officers, and (iv) all directors and executive officers as a group.
Except as otherwise noted, each beneficial owner has sole investment and voting
power with respect to the listed shares.
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<TABLE>
<CAPTION>
TITLE AMOUNT AND NATURE OF PERCENTAGE OF
OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS OUTSTANDING
- -------- ----------------------- -------------------- -----------------
<S> <C> <C> <C>
Common MET Holdings Corporation 1,299,500 63.4%
Stock 405 Park Avenue, Suite 1104
New York, NY 10022 (a)
David A. Smilow 105,365 (b) 1.0%
Mitchell H. Caplan 105,365 (c) 1.0%
David R. DeCamp 6,000 (d) *
Mark Rollinson 7,000 (e) *
Arlen W. Gelbard --- *
Aileen Lopez Pugh 32,100 (f) *
Directors and Executive Officers as a group
(7 individuals) 268,830 (g) 12.9%
TeleBanc Employee Stock Ownership Plan 67,273 3.3 %
Wellington Management Company 172,000 (h) 8.2%
75 State Street
Boston, MA 02109
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</TABLE>
* Less than 1%.
(a) MET Holdings is the predecessor savings and loan holding company of
Metropolitan Bank for Savings, F.S.B. ("Metropolitan Bank"). MET Holdings
organized the Company so that it could become, in March 1994, the holding
company for Metropolitan Bank as part of the Company's initial public
offering of debt and equity securities in 1994. Metropolitan Bank was
renamed "TeleBank" in March 1996, and is a wholly owned subsidiary of the
Company.
(b) Comprised solely of options to acquire 105,365 shares of Common Stock, of
which 63,219 are exercisable within sixty days of April 1, 1996. Mr.
Smilow also holds significant ownership positions in the outstanding
securities of MET Holdings. See "Security Ownership of the Company's Parent
by Management."
(c) Comprised solely of options to acquire 105,365 shares of Common Stock, of
which 63,219 are exercisable within sixty days of April 1, 1996. Mr.
Caplan also holds significant ownership positions in the outstanding
securities of MET Holdings. See "Security Ownership of the Company's Parent
by Management."
(d) Includes options to acquire 5,000 shares of Common Stock, of which are
exercisable within sixty days of April 1, 1996.
(e) Includes options to acquire 5,000 shares of Common Stock, of which 4,000
are exercisable within sixty days of April 1, 1996.
(f) Includes options to acquire 25,000 shares of Common Stock, of which 9,000
are exercisable within sixty days of April 1, 1996.
(g) Includes options to acquire 250,730 shares of Common Stock, of which
145,438 are exercisable within sixty days of April 1, 1996.
(h) Based on information provided by the beneficial owners as of December 31,
1995.
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SECURITY OWNERSHIP OF THE COMPANY'S PARENT BY MANAGEMENT
The following table sets forth certain information as of December
31, 1995 with respect to the beneficial ownership by the management of the
Company of equity securities of the Company's parent, MET Holdings. MET
Holdings has two classes of equity securities, Class A Common Stock and Class B
Common Stock. Unless otherwise required by law, the Class B Common Stock is
non-voting.
<TABLE>
<CAPTION>
NAME EQUIETY SECURITY OWNED PERCENT OF CLASS
- ---- ---------------------- ----------------
<S> <C> <C>
David A. Smilow 3,968 (Class A Common Stock) (a) 39.9 %
1,641 (Class B Common Stock) (a) 26.5
Mitchell H. Caplan 1,235 (Class A Common Stock) (b) 12.4
1,253 (Class B Common Stock) (b) 20.2
Directors and Executive Officers 5,203 (Class A Common Stock) 52.4
of the Company as a group 2,894 (Class B Common Stock) 46.7
(10 individuals)
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</TABLE>
(a) Includes 1,586 shares of Class A Common Stock and 980 shares of Class B
Common Stock, with respect to which Mr. D. Smilow shares beneficial
ownership with his wife and children.
(b) Includes 645 shares of Class A Common Stock and 655 shares of Class B
Common, with respect to which Mr. Caplan shares beneficial ownership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's policy is to not enter into any transactions with
officers, directors or 5% shareholders or other affiliates of the Company
unless the terms are as favorable to the Company as those generally available
from unaffiliated third parties. Transactions between the Company and it
affiliates will require approval by a majority of the Company's disinterested
directors.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TELEBANC FINANCIAL CORPORATION
/s/ Aileen Lopez Pugh
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Aileen Lopez Pugh
Executive Vice President -- Chief Financial Officer
May 14, 1998
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