UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 0-27222
____________________
CFC INTERNATIONAL, INC.
(Exact name of Registrant as specified in its
charter)
Delaware 36-3434526
(State or other jurisdiction of (I.R.S.
Employer Identification
incorporation or organization) Number)
500 STATE STREET, CHICAGO HEIGHTS, ILLINOIS 60411
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (708)
891-3456
____________________
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act
Title of Each Class
Common Stock, par value $.01 per share
____________________
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 of 15(d) of the
Securities Exchange Act of 1934 during the preceding 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
Indicate by 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. x
The aggregate market value of the voting stock of the registrant
held by stockholders who were not affiliates (as defined by
regulations of the Securities and Exchange Commission) of the
registrant was approximately $18,743,303 at April 25, 1997 (based on
the closing sale price on the Nasdaq National Market on April 25,
1997, as reported by The Wall Street Journal). At April 25, 1997,
the registrant had issued and outstanding an aggregate of 3,990,670
shares of common stock.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
Set forth below are the names of the non-employee directors of
the Company, their ages at April 25, 1997, and summaries of their
business experience and biographical information. Information
regarding Roger F. Hruby, Robert J. DuPriest and Dennis W.
Lakomy, who are also officers of the Company, is included under
"Executive Officers" below.
William G. Brown, age 54, has been a director of the Company
since August 1995. Mr. Brown currently is a partner of Bell,
Boyd & Lloyd, Chicago, Illinois, counsel to the Company. He is
also a Director of the MYR Group Inc., Medicus Systems
Corporation, Managed Care Solutions, Inc., and Dovenmuehle
Mortgage, Inc.
Richard Pierce, age 58, became a director of the Company in
August 1995. Before becoming a director, Mr. Pierce served as an
Advisory Director of the Company in 1991. He currently is the
Managing Director of the Chicago office of Russell Reynolds
Associates, Inc., an executive recruiting firm, which he joined
in 1976.
David D. Wesselink, age 54, became a director of the Company in
August 1995. Before becoming a director, Mr. Wesselink served
as an Advisory Director of the Company since 1992. He has been
Chief Financial Officer of Advanta Corporation, a consumer credit
company, since 1993. Prior thereto, he served in several
capacities with Household International, a consumer and
commercial financial services company, including Chief Financial
Officer, Treasurer and Vice President, Research and Development.
Executive Officers
Set forth below are the names of the executive officers of the
Company and its subsidiaries, their ages at December 31, 1996,
the positions they hold with the Company or its subsidiaries, and
summaries of their business experience. Executive officers of
the Company are elected by and serve at the discretion of the
Board of Directors of the Company.
Name Age Position
Roger F. Hruby 61 Chairman of the Board of
Directors and Chief Executive
Officer
Robert J. DuPriest 55 President, Chief Operating
Officer and Director
Dennis W. Lakomy 51 Vice President, Chief Financial
Officer, Secretary,
Treasurer and Director
David C. Beeching 56 Vice President of Sales &
Marketing - Holographics
Glenn L. Ford 51 Vice President of Manufacturing
William A. Herring 49 Senior Vice President of
Operations
Robert E. Jurgens 54 Senior Vice President of Sales &
Marketing
Craig D. Newswanger 42 Vice President of Research &
Development-Holographics
David M. Plomin 31 Director of Research &
Development
Jeffrey E. Norby 40 Controller
Peter C. McGillivray 51 Managing Director - United
Kingdom Operations
Masayoshi Yozu 54 Managing Director - Japan
Operations
Roger F. Hruby, Chairman of the Board and Chief Executive
Officer, was the President and Chief Operating Officer of the
Company's predecessor, Bee Chemical, from 1977 until the sale of
that company to Morton Thiokol, Inc., in 1985, at which time Mr.
Hruby also became its Chief Executive Officer. Mr. Hruby also
organized the formation of Bee Chemical's Japanese joint venture
in 1970 and supervised its growth from a start-up venture to a
significant manufacturing company with sales in excess of $40
million. In 1986, Mr. Hruby formed the Company, which purchased
Bee Chemical's specialty transferable solid coatings division
from Morton Thiokol and has been Chairman of the Board, Chief
Executive Officer, and until June, 1995, President of the Company
since the date of its incorporation. Mr. Hruby has been involved
in the specialty chemical industry since 1958. Mr. Hruby earned
a bachelors degree in chemistry from North Central College and a
Masters of Business Administration from the University of
Chicago.
Robert J. DuPriest, President, Chief Operating Officer and a
director of the Company, joined the Company in 1990 as Vice
President and Chief Operating Officer, was named President in
June, 1995, and was elected a director of the Company in August,
1995. Prior to joining the Company, Mr. DuPriest served from
1985 in successive management positions with Rank Video Services
of America, where he was responsible for worldwide operations and
joint ventures. Mr. DuPriest earned a bachelors degree from
American University.
Dennis W. Lakomy, Vice President, Chief Financial Officer,
Secretary, Treasurer and a director of the Company, joined Bee
Chemical in 1975 and served as Vice President and Controller of
that company from 1982 until co-founding CFC with Mr. Hruby in
1986. Mr. Lakomy was elected a director of the Company in
August, 1995. Mr. Lakomy earned a bachelors degree in accounting
from Loyola University of Chicago and a Masters of Business
Administration from the University of Chicago.
William A. Herring, Senior Vice President of Operations of the
Company, joined the Company in June, 1996. Prior to joining the
Company, Mr. Herring served from 1992 as Vice President -
Manufacturing and Technology with Central Products Company, where
he was responsible for three manufacturing locations and five
distribution centers. Mr. Herring earned a bachelors and a
masters degree from the University of Missouri in Chemical
Engineering.
Robert E. Jurgens, Senior Vice President of Sales and Marketing,
joined the Company in June, 1987. Prior to joining the Company,
Mr. Jurgens served in successive senior management positions with
White Graphic Systems. Mr. Jurgens began his career with White
Graphics Systems in 1966 in sales and design. Mr. Jurgens earned
a bachelors degree from Indiana University.
Glenn L. Ford, Vice President, joined the Company in 1990 as
Director of Operations and since 1992 has served as Vice
President of Operations. Prior to that time, Mr. Ford had
various positions in manufacturing with Tandy Magnetics, serving
as General Manager of Tandy Magnetics from 1987 to 1990. Mr.
Ford earned a B.S. in Management from San Jose State University.
David C. Beeching joined CFC Applied Holographics as Vice
President of Sales and Marketing in 1992. Prior thereto, he
served a Director of Marketing and Vice President of The Rank
Organization PLC.
Craig D. Newswanger formed Advanced Dimensional Displays in 1984,
which was merged into Applied Holographics PLC in 1989. In 1992,
following the formation of CFC Applied Holographics, he was named
Vice President, Research and Development - Holographics, of the
Company.
David M. Plomin joined the Company in 1988 and has held several
managerial positions, including manager of technical services,
quality assurance, production, and embossing, and in 1995 was
promoted to Director of Research and Development. Mr. Plomin
earned a bachelors degree from Knox College and a Masters of
Business Administration from Governors State University.
Jeffrey E. Norby joined the Company in 1995 as Controller. Prior
to that time he held several managerial positions in
administration and accounting with Newell, Inc. and Chicago
Bullet Proof Company. He is a Certified Public Accountant and
earned a Masters of Business Administration from the University
of Illinois.
Peter C. McGillivray has been Managing Director of CFC's United
Kingdom Operations since 1988. Prior thereto, Mr. McGillivray
served as a sales representative for British Cellulose Lacquers,
which was acquired by Bee Chemical Company and later included as
part of the ongoing business purchased by the Company.
Masayoshi Yozu joined Admiral Coated Products in Japan in 1968 to
set up their branch office. In 1988 Admiral Coated Products was
acquired by the Company and Mr. Yozu became Managing Director of
CFC's Japanese Operations. Mr. Yozu earned a business degree
from Ritsumeikan University.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The directors and certain officers of the Company are required to
report their transactions in the Common Stock to the
Securities and Exchange Commission within a specified period
following a transaction. During 1996, the directors and officers
filed all such reports within the specified time period.
ITEM 11. EXECUTIVE COMPENSATION
The following table provides certain summary information
concerning the compensation paid or accrued during the year ended
December 31, 1996 to the Company's Chief Executive Officer and to
each of the other executive officers of the Company who received
compensation in excess of $100,000 during the last fiscal year
(the "Named Executive Officers"). The Company does not have a
restricted stock award program or a long-term incentive plan.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
Other Securities
Annual
Underlying All Other
Name and Principal Salary Bonus
Compensation Options/SARs Compensation
Position Year ($) ($)
($) (#) ($)*
Roger F. Hruby
Chairman of the Board 1996285,000 28,500 24,000(1)
3,000
and Chief Executive 1995285,000 28,500
3,000
Officer 1994282,08828,500 3,000
Robert J. DuPriest 1996181,50018,1506,727(2) 10,000 3,000
President and Chief 1995165,000 51,150 523(2)
3,000
Operating Officer 1994165,000 16,500 3,300
Dennis W. Lakomy
Vice President, Chief 1996165,375 16,537
3,000
Financial Officer, 1995157,500 15,750
3,000
Treasurer and Secretary1994157,500 15,750
3,150
_________________________
* Reflects matching contributions made by the Company pursuant to
the Company's contributory retirement savings plan, which
covers eligible employees who qualify as to age and length of
service. Under the plan, the Company makes matching
contributions equal to 50% of the first 4% of the employees'
income that the employee contributes.
(1) A $1 million life insurance policy on Mr. Hruby is paid
for by the Company, with Mr. Hruby's estate as the beneficiary.
The amount shown above is the premium paid for such policy.
(2) In connection with Mr. DuPriest's exercise of options
covering 31,414 shares of Common Stock on November 24, 1995,
the Company loaned him $81,838 for the payment of taxes on the
gain realized upon the exercise of those options. The Company
loaned Mr. DuPriest another $28,715 to pay the final estimated
taxes due on January 15, 1996. The loan accrues no interest
and is due on January 31, 2001. The amount shown above
represents taxable income from imputed interest in accordance
with Internal Revenue Service requirements.
The following table sets forth individual grants of stock options
made to the Named Executive Officers during 1996.
Potential
Realizable
Value at
Assumed
Percent of Total Annual Rates
of Stock
Options Granted Exercise
Price Appreciation for
Date of Options to Employees or BaseExpiration
for Option Term (s)
Grant Granted in Fiscal Year Price
(1) Date 5% 10%
Roger F. Hruby
Robert J. DuPriest3/1/9610,000 13.8%$10.87 3/1/06 $68,392 $173,320
Dennis W. Lakomy
____________________
(1) Under the Stock Option Plan, the exercise price must be
the fair market value of the Common Stock on the date of grant
and the options granted generally become exercisable as to one-
fourth of the grant on each of the first, second, third, and
fourth anniversary of the date of grant.
(2) These amounts represent certain assumed annual rates of
appreciation calculated from the exercise price, as required by
the rules of the Securities and Exchange Commission. Actual
gains, if any, on stock option exercises and Common Stock
holdings are dependent on the future performance of the Common
Stock. There can be no assurance that the amounts reflected in
this table will be achieved.
Option Exercises and Year-End Valuation
The following table provides certain information with respect to
the Named Executive Officers concerning the exercise of options
and/or stock appreciation rights (SARs) during 1996 and
unexercised options and SARs held on December 31, 1996:
AGGREGATE 1996 OPTION/SAR EXERCISES AND VALUES
Number of Securities Value of
Unexercised
Underlying Unexercised In-the-
Money Options/
Shares Acquired Value Options/SARs at
12/31/96 SARs at 12/31/96*
on Exercise Realized Exercisable
Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($)
($)
Roger F. Hruby
Robert J. DuPriest 10,000 3,750
Dennis W. Lakomy
____________________
* This column indicates the aggregate amount, if any, by which
the market value of the Common Stock on December 31, 1996
exceeded the options exercise price and is based on the closing
per share sale price of the Common Stock on such date of $11.25
as quoted on the Nasdaq National Market.
Director's Compensation
Directors of the Company who are not employees of the Company are
paid $1,500 for each board meeting attended and $750 each board
committee meeting attended which is not held on the same day as a
board meeting, but are not paid an annual retainer. Directors of
the Company who are also employees of the Company are not paid
any compensation for serving as directors.
Upon the closing of the Company's initial public offering of
Common Stock (the IPO), each of the Company's non-employee
directors, Messrs. Brown, Pierce and Wesselink, were
automatically granted, pursuant to the CFC International, Inc.
Director's Stock Option Plan, a one-time option covering 10,000
shares of Common Stock. Each of the options has a term of ten
years and a per share exercise price of $9.50. The options
become exercisable as to one-fourth of the grant on each of the
first, second, third, and fourth anniversary of the date of
grant.
Compensation Committee Interlocks and Insider Participation
Until August 1995, Mr. Hruby, the Company's Chief Executive
Officer, approved the terms of the compensation of the Company's
executive officers. In August 1995, the Company's Board of
Directors formed a Compensation Committee, which is currently
comprised of Messrs. Hruby and Brown and chaired by Mr. Pierce,
which determines the compensation of the Company's executive
officers in the future.
William G. Brown, a director of the Company, is a partner of the
law firm of Bell, Boyd & Lloyd. The Company has utilized, and
anticipates that it will continue to utilize, the services of
such firm.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of March 24, 1997, certain
information regarding the beneficial ownership of the Company's
Common Stock by each person known by the Company to be the
beneficial owner of 5% or more of the outstanding Common Stock,
by each director, nominee for director, and Named Executive
Officer (as defined below), and by all directors and executive
officers as a group. As of such date, there were 112 record
holders and approximately 1,200 beneficial holders of Common
Stock.
Shares Beneficially
Owned
Name (1) Number
Percent
Roger F. Hruby (2)
2,528,640 63.4
Robert J. DuPriest 89,509
2.2
Dennis W. Lakomy 317,537
8.0
William G. Brown (3) 158,769
4.0
Richard Pierce 1,000
*
David D. Wesselink 1,000
*
RFH Investments, LP (4) 999,160 25.1
Stein Roe & Farnham, Incorporated (5) 318,200 8.0
One South Wacker Drive
Chicago, Illinois 60606
All directors and executive officers as a group
(7 persons) (2) (3) 2,549,752 63.9
________________________
* Represents less than 1% of the outstanding Common Stock.
(1) The address of all of the persons named or identified
above (other than Stein Roe & Farnham, Incorporated) is c/o
CFC International, Inc., 500 State Street, Chicago Heights,
Illinois 60411.
(2) Includes 999,160 shares of Common Stock owned by RFH
Investments, LP, a limited partnership of which Mr. Hruby is
the managing general partner (and of which all of the partners
are members of Mr. Hruby's immediate family or trusts for the
benefit of such family members), but does not include 523,404
shares of Class B Common Stock owned by RFH Investments, LP.
The shares of Common Stock shown above as beneficially owned
by Mr. Hruby also include 538,670 shares of Common Stock which
Messrs. DuPriest and Lakomy and members of Mr. Brown's family
beneficially owned immediately after the IPO, which they still
hold, and for which Mr. Hruby holds an irrevocable voting
proxy. In addition to the Common Stock set forth in the table
above, Mr. Hruby owns an option to purchase 534 shares of the
Company's Voting Preferred Stock. (For a discussion of the
options terms, see Certain Transactions and Proposal to Amend
the Company's Certificate of Incorporation Relating to the
Number of Authorized Shares of Voting Preferred Stock and the
Replacement Option.)
(3) Includes 157,067 shares of Common Stock which are owned by
the William Gardner Brown 1993 GST Trust, a trust for the
benefit of Mr. Brown's family and of which Mr. Brown is not a
beneficiary nor is he, or a member of his immediate family, a
trustee.
(4) RFH Investments, LP also owns 523,404 shares of Class B
Common Stock, which is substantially equivalent to the Common
Stock in all respects except that the Class B Common Stock
generally is not entitled to vote on any matters submitted to
a vote of the Company's stockholders.
(5) The number of shares of Common Stock shown as beneficially
owned is derived from a Schedule 13G dated February 12, 1997,
filed with the Securities and Exchange Commission by the
listed stockholder.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1995, the Company granted to Mr. Hruby an option to
purchase, at an exercise price of $500 per share, 534 shares of
its Voting Preferred Stock, par value $.01 per share, subject to
antidilutive adjustments. The holders of Voting Preferred Stock
will be entitled to (i) 1,000 votes per share on all matters to
be voted upon by stockholders; (ii) quarterly dividends at an
annual rate equal to the prime rate of LaSalle Northwest National
Bank, Chicago in effect as of the prior December 31, applied to
the per share purchase price (initially $500) of the Voting
Preferred Stock; and (iii) a liquidation preference equal to the
per share purchase price (initially $500) plus any accumulated
and unpaid dividends. The Voting Preferred Stock has no pre-
emptive, conversion, redemption, or exchange rights. Mr. Hruby's
option is currently exercisable, terminates upon his death, and
is not transferable.
In connection with Mr. DuPriest's exercise of options covering
31,414 shares of Common Stock on November 24, 1995, the Company
loaned him $81,838 for the payment of a portion of the taxes on
the gain realized upon the exercise of those options.
Additionally, on January 15, 1996, the Company loaned Mr.
DuPriest an additional $28,715 for the payment of the remainder
of the taxes on the gain realized upon the exercise of those
options. In the event Mr. DuPriest sells any shares of Common
Stock received pursuant to the exercise of those options prior to
the maturity of these loans, he will be obligated to repay the
loans from the proceeds, net of applicable taxes, received from
such sale. No interest accrues under either loan and both mature
on January 31, 2001.
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this amendment to this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 25, 1997.
CFC INTERNATIONAL, INC.
By: /s/ ROGER F. HRUBY
Roger F. Hruby
Chairman of the Board of
Directors
and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this amendment to this report has been signed below by the
following persons on behalf of the registrant and in the
capacities indicated on April 25, 1997.
Signature Title
Principal Executive Officer:
/s/ ROGER F. HRUBY Chairman of the Board of
. Directors and
Roger F. Hruby Chief Executive Officer
Principal Financial Officer:
/s/ DENNIS W. LAKOMY Vice President, Chief Financial
. Officer, Secretary
Dennis W. Lakomy Treasurer, and Director
Principal Accounting Officer:
/s/ JEFFREY E. NORBY Controller
.
Jeffrey E. Norby
Signature Title
A Majority of the Directors:
/s/ ROGER F. HRUBY Director
.
Roger F. Hruby
/s/ WILLIAM G. BROWN Director
.
William G. Brown
/s/ ROBERT J. DU PRIEST Director
.
Robert J. Du Priest
/s/ DENNIS W. LAKOMY Director
.
Dennis W. Lakomy
/s/ RICHARD PIERCE Director
.
Richard Pierce
/s/ DAVID D. WESSELINK Director
.
David D. Wesselink
