SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
FORM 10-KSB
Annual Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1997
Commission File Number 1-13752
SMITH-MIDLAND CORPORATION
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(Name of Small Business Issuer in its Charter)
Delaware 54-1727060
- ------------------------------- ------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Route 28, P.O. Box 300, Midland, Virginia 22728
(Address of Principal Executive Offices) (Zip Code)
(540) 439-3266
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Name of Each Exchange on
Title of Each Class Which Registered
- ------------------- ------------------------
Common Stock, $.01 par value per share Boston Stock Exchange
Redeemable Common Stock Purchase Warrants Boston Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.01 par value per share
--------------------------------------
(Title of Class)
Redeemable Common Stock Purchase Warrants
-----------------------------------------
(Title of Class)
<PAGE>
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will 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 ]
The Issuer's net sales and revenues for its most recent fiscal year are
$12,005,000.
The aggregate market value of the shares of Common Stock, held by
non-affiliates, based upon the average of the closing bid and asked prices for
such stock on March 26, 1998, was approximately $3,879,000. As of March 26,
1998, the Company had outstanding 3,044,798 shares of Common Stock, $.01 par
value per share.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-KSB
Annual Report in which
Document Document is Incorporated
- -------- ------------------------
Definitive Proxy Statement for the Part III
Registrant's Annual Meeting of Stockholders
for the fiscal year ended December 31, 1997,
to be filed pursuant to Regulation 14A.
<PAGE>
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
<TABLE>
<CAPTION>
Director Or
Executive
Name Age Officer Since Position
- ---- --- ------------- --------
<S> <C>
Rodney I. Smith 59 1970 Chief Executive Officer, President
And Chairman of the Board of
Directors
Ashley Smith 35 1994 Vice President of Sales and
Marketing and Director
Wesley A. Taylor 50 1994 Vice President of Administration
and Director
Andrew Kavounis 72 1995 Director
Bernard R. Patriacca 54 1995 Director
Robert McElhinney 53 1997 Vice President of Finance and
Chief Financial Officer
</TABLE>
Background
The following is a brief summary of the background of each Director and
executive officer of the Corporation:
Rodney I. Smith. Chairman of the Board of Directors, Chief Executive Officer and
President. Rodney I. Smith co-founded the Corporation in 1960 and became its
President and Chief Executive Officer in 1965. He has served on the Board of
Directors and has been its Chairman since 1970. Mr. Smith is the principal
developer and inventor of the Corporation's proprietary and patented products.
Mr. Smith is the past President of the National Precast Concrete Association.
Mr. Smith has served on the Board of Trustees of Bridgewater College in
Bridgewater, Virginia since 1986.
Ashley Smith. Vice President of Sales and Marketing and Director. Mr. Smith has
served as Vice President of Sales and Marketing of the Corporation since 1990
and as a Director since December 1994. Mr. Smith holds a Bachelor of Science
degree in Business Administration from Bridgewater College. Mr. Ashley Smith is
the son of Mr. Rodney I. Smith.
Wesley A. Taylor. Vice President of Administration and Director. Wesley Taylor
has served as Vice President of Administration of the Corporation since 1989 and
as a Director since December 1994, and previously held positions as Controller
and Director of Personnel and Administration. Mr. Taylor holds a Bachelor of
Arts degree from Northwestern State University.
<PAGE>
Andrew Kavounis. Director. Mr. Kavounis has served as a Director of the
Corporation since December 1995. Mr. Kavounis has been the President of Core
Development Co., Inc., a privately held construction and development concern,
since 1991. From 1989 to 1991, Mr. Kavounis was the Executive Vice President of
the Leadership Group, a Maryland based builder and developer. Prior to that
time, Mr. Kavounis spent 37 years as an executive at assorted construction and
development companies, which included a position as the National Vice President
of Ryland Homes, a privately held company, in which capacity he was directly
responsible for the construction of 17,000 homes annually, nationwide. Mr.
Kavounis received a Bachelor of Science degree in Chemical Engineering from
Presbyterian College, a Bachelor of Science degree in Civil and Mechanical
Engineering from Wofford College, and a Master's degree in Business
Administration from the University of South Carolina.
Bernard R. Patriacca. Director. Mr. Patriacca has served as a Director of the
Corporation since December 1995. Since May 1994, Mr. Patriacca has served as
Vice President and co-founder of Errands Etc., Inc., a privately held business
providing personal services. From January 1994 to May 1994, Mr. Patriacca served
as the Vice President of Finance and Administration for Sky Rock Services Corp.,
a privately held service business. From 1992 through March 1993, Mr. Patriacca
served as the Chief Financial Officer for Boston Coach, a privately held
limousine service company. From 1991 to 1992 and from March 1993 to January
1994, Mr. Patriacca served as an independent financial consultant. Mr. Patriacca
served from 1973 to 1991 in various capacities, including as Senior Vice
President and Chief Financial Officer for Dunkin' Donuts Incorporated, a
privately held food service company ("Dunkin' Donuts"). Since April 1997, Mr.
Patriacca has served as a director of Video Update, Inc., a publicly traded
chain of retail video stores. Since January 1992, Mr. Patriacca has served as a
director of ENCON Systems, Inc., a publicly traded full-service energy
management company. Mr. Patriacca received a Bachelor of Science degree in
Accounting from Northeastern University and a Master's degree in
Financing/Accounting from Northeastern University, and he is a Certified Public
Accountant.
Robert McElhinney. Vice President of Finance and Chief Financial Officer. Mr.
McElhinney was appointed as Vice President of Finance and Chief Financial
Officer in August 1997. From 1995 to 1997, he was the Chief Financial Officer
and General Manager of ABC Photo & Imaging Services in Manassas, Virginia. From
1993 to 1995, Mr. McElhinney served as the Director of Finance and Corporate
Secretary of Ten Hoeve Bros., Inc of Carlstadt, New Jersey where he oversaw 13
corporate branches. Mr. McElhinney was the Controller at Rutgers Express, Inc.
from 1991 to 1993 and from 1980 to 1991 he served as the Chief Financial Officer
and General Manager of National Roofing, Inc. of Millington, New Jersey. Mr.
McElhinney received his Bachelor of Arts degree in Accounting from Rutgers
University and his Masters degree in Accounting from Thomas Edison College.
Compliance with Section 16(A)
Section 16(a) ("Section 16(a)") of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires executive officers and Directors and
persons who beneficially own more than ten percent (10%) of the Corporation's
Common Stock to file initial reports of ownership on Form 3 and reports of
changes in ownership on Form 4 with the Securities and Exchange
<PAGE>
Commission (the "Commission") and any national securities exchange on which the
Corporation's securities are registered. Executive officers, Directors and
greater than ten percent (10%) beneficial owners are required by the
Commission's regulations to furnish the Corporation with copies of all Section
16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Corporation and written representations from the executive officers and
Directors, the Corporation believes that all Section 16(a) filing requirements
applicable to its executive officers, Directors and greater than ten percent
(10%) beneficial owners were satisfied, except for the Form 3 filing due for Mr.
Wesley Taylor upon the grant of stock options which was filed May 1, 1998 , the
Form 4 filings due for Mr. Ashley Smith due upon the purchase of 850 shares of
common stock and the grant of stock options which was filed May 1, 1998 and the
Form 4 filing due for Mr. Rodney Smith due upon the purchase of 4,000 shares of
common stock which was filed May 1, 1998.
ITEM 10. Executive Compensation
The following table sets forth the compensation paid by the Company for
services rendered for the last three completed fiscal years to the executive
officers of the Company whose cash compensation exceeded $100,000 during that
year:
<TABLE>
<CAPTION>
Long Term Compensation
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Annual Compensation Awards Payouts
---------------------------------- ----------------------- --------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------------------------------------------------------------------------------------------------------------
Other All
Annual Restricted Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Awards SARs Payouts sation
Position Year $ $ $ $ (#) $ $
--------- ---- ------- ------ ------- -------- ------ ------- -------
<S> <C>
Rodney I. Smith, 1997 170,503 81,500 - - - - -
President, Chief 1996 175,000 - - - - - 5,028(1)
Executive Officer 1995 84,675 - - - - - -
and Chairman of
the Board.
</TABLE>
(1) Mr. Smith received approximately $419 per month from the Corporation to
cover automobile and dining expenses.
Employment Agreements
The Corporation has entered into an employment agreement with Mr. Rodney I.
Smith, which provides for an annual base salary of $175,000. The present term of
the agreement continues until December 31, 1999, and is thereafter automatically
renewed for successive one year periods unless Mr. Smith or the Corporation
gives the other party three months prior written notice of non-renewal. Bonuses
and salary increases may be granted by the Compensation Committee of the Board
of Directors, as it so determines from time to time. Mr. Smith also is entitled
to receive benefits offered
<PAGE>
to the Corporation's employees generally. If terminated without cause, Mr. Smith
is entitled to receive as severance pay an amount equal to twenty-four (24)
months of his base salary, less taxes, other required withholdings and any
amounts owed to the Company, payable in accordance with the Company's standard
payroll procedures. In addition, the employment agreement precludes Mr. Smith
from competing with the Corporation during his employment and for at least one
year thereafter, and from disclosing confidential information. The Corporation
is the owner of and the beneficiary of three key person life insurance policies
on Mr. Smith totaling $1,400,000.
ITEM 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of March 26, 1998, certain information
concerning ownership of the Corporation's Common Stock by (i) each person known
by the Corporation to own of record or be the beneficial owner of more than five
percent (5%) of the Corporation's Common Stock, (ii) each of the Corporation's
Directors and Director nominees and Executive Officers, and (iii) all Directors
and Executive Officers as a group. Except as otherwise indicated, the
Stockholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Percentage of Percentage
Beneficial Owner(1) Beneficially Owned(2) of Class
------------------- --------------------- --------
<S> <C>
Rodney I. Smith(3)(4)(5) 843,298 27.70
Robert M. Rubin(6) 230,000 7.55
Ashley Smith(3)(4)(7) 92,717 3.04
Wesley A. Taylor(8) 2,700 0.09
Andrew Kavounis -0- -0-
Bernard R. Patriacca -0- -0-
Robert McElhinney -0- -0-
All directors and officers as a group 938,715 30.83
(6 persons)(2)(3)(4)(5)(6)(7)(8)
</TABLE>
(1) The address for each of Messrs. Rodney I. Smith, Ashley Smith,
Taylor, Kavounis, Patriacca, and McElhinney is c/o Smith-Midland
Corporation, Route 28, Midland, Virginia 22728. The address for Mr. Rubin
is 6060 Kings Gate Circle, Dealany Beach, Florida 33486.
(2) Pursuant to the rules and regulations of the Securities and Exchange
Commission, shares of Common Stock that an individual or group has a
right to acquire within 60 days pursuant to the exercise of options or
warrants are deemed to be outstanding for the purposes of computing the
percentage ownership of such individual or group, but are not deemed to
be outstanding for the purpose of computing the percentage ownership of
any other person shown in the table.
(3) Rodney I. Smith and Ashley Smith are father and son, respectively.
Each of Rodney I. Smith and Ashley Smith disclaims beneficial ownership
of the other's shares of Common Stock.
<PAGE>
(4) Does not include an aggregate of 116,958 shares of Common Stock held
by Jeremy Smith, Matthew Smith, and Roderick Smith, sons of Rodney I.
Smith, and brothers of Ashley Smith, and 112,713 shares held by Merry
Robin Bachetti, sister of Rodney I. Smith and aunt of Ashley Smith, for
which each of Rodney I. Smith and Ashley Smith disclaims beneficial
ownership.
(5) Includes the 100,000 shares of Common Stock that have been deposited
into an irrevocable trust (the "Trust") for the benefit of Hazel Smith,
the income beneficiary of the Trust and former wife of Rodney I. Smith,
and Mr. Smith's children. Mr. Smith is the trustee of the Trust and, as
such, may vote the shares as he deems fit. Includes the 230,000 shares of
Common Stock held by Mr. Robert M. Rubin which Mr. Smith holds an
irrevocable proxy to vote as Mr. Smith deems fit, subject to certain
limitations. This proxy expires on the first to occur of (i) ten years
from the date of the proxy or (ii) the sale by Mr. Rubin of the shares of
Common Stock subject to the proxy. The 230,000 shares of Common Stock
held by Mr. Rubin were accounted for in calculating both Mr. Smith's and
Mr. Rubin's beneficial ownership.
(6) Mr. Smith holds an irrevocable proxy to vote the 230,000 shares of
Common Stock held by Mr. Rubin. This proxy expires on the first to occur
of (i) ten years from the date of the proxy or (ii) the sale by Mr. Rubin
of the shares of Common Stock subject to the proxy. The 230,000 shares of
Common Stock held by Mr. Rubin were accounted for in calculating both Mr.
Smith's and Mr. Rubin's beneficial ownership.
(7) Includes options to purchase 3,100 shares of Common Stock of the
Corporation exercisable at $1.00 per share.
(8) Includes options to purchase 2,700 shares of Common Stock of the
Corporation exercisable at $1.00 per share.
ITEM 12. Certain Relationships and Related Transactions.
The Corporation had an unsecured note receivable from Mr. Rodney Smith, the
Corporation's President and majority shareholder, with a seven year term
accruing interest at a rate of 6% per annum. During 1996, $102,300 of the note
was reduced for the Corporation's purchase of 40,920 common shares from Mr.
Smith. On December 31, 1997, the terms of the note were changed to call the
annual payments of $45,948 beginning on December 31, 1998 and continuing through
maturity on December 31, 2002. Total interest income on this note was
approximately $39,500 and $42,300 for the year ended December 31, 1997 and 1996,
respectively.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this amendment to the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SMITH-MIDLAND CORPORATION
Date: April 30, 1998 By: /s/ Rodney I. Smith
-------------------------------------
Rodney I. Smith, President
In accordance with the Exchange Act, this amendment to the report has
been signed below by the following persons on behalf of the registrant in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
- ---- -------- ----
<S> <C>
/s/ Rodney I. Smith Chairman of the Board, April 30, 1998
- -------------------------------- Chief Executive Officer
Rodney I. Smith and President (principal
executive officer)
/s/ Robert V. McElhinney Vice President of Finance April 30, 1998
- -------------------------------- (principal finance and
Robert V. McElhinney accounting officer)
/s/ Wes Taylor Vice President of April 30, 1998
- -------------------------------- Administration and
Wes Taylor Director
/s/ Ashley Smith Vice President of Sales and April 30, 1998
- -------------------------------- Marketing and Director
Ashley Smith
/s/ Andrew Kavounis Director April 30, 1998
- --------------------------------
Andrew Kavounis
/s/ Bernard R. Patriacca Director April 30, 1998
- --------------------------------
Bernard R. Patriacca
</TABLE>
