-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cb50gWG/DejsRvOK4FZVtZE12583s3YeXMJco4PgmCeKJwA2Mo1Q4IJSeS7A8ZxC vObcLSnYuefGuPRtUTDG8A== 0000085149-00-000004.txt : 20000426 0000085149-00-000004.hdr.sgml : 20000426 ACCESSION NUMBER: 0000085149-00-000004 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEBFINANCIAL CORP CENTRAL INDEX KEY: 0000085149 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 562043000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-00631 FILM NUMBER: 608437 BUSINESS ADDRESS: STREET 1: 150 EAST 52ND STREET 21ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2128131500 MAIL ADDRESS: STREET 1: 150 EAST 52ND ST STREET 2: 21ST FL CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: ROSES HOLDINGS INC DATE OF NAME CHANGE: 19970826 FORMER COMPANY: FORMER CONFORMED NAME: ROSES STORES INC DATE OF NAME CHANGE: 19920703 10-K/A 1 WEBFINANCIAL CORPORATION SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-631 WEBFINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 56-2043000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 150 East 52nd Street, 21st Floor New York, New York 10022 (Address and zip code of principal executive offices) 877-431-2942 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(g) of the Act: TITLE OF CLASS COMMON STOCK, $.001 PAR VALUE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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] Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ] Aggregate market value of Common Stock held by non-affiliates of the Registrant as of March 23, 2000 was $8,057,900, which value, solely for the purposes of this calculation, excludes shares held by Registrant's officers, directors, and their affiliates. Such exclusion should not be deemed a determination by Registrant that all such individuals are, in fact, affiliates of the Registrant. The number of shares of Common Stock issued and outstanding as of March 23, 2000 was 4,349,996. DOCUMENTS INCORPORATED BY REFERENCE Definitive proxy statement to be filed pursuant to Regulation 14A in connection with the 2000 Annual Meeting of Stockholders, Part III. WEBFINANCIAL CORPORATION AND SUBSIDIARIES Item 10. DIRECTORS AND EXECUTIVE OFFICERS DIRECTORS At the annual meeting of stockholders held November 4, 1998 (the "1998 Meeting"), the stockholders of the Company voted to eliminate the Company's staggered board system. Commencing at the June 15, 1999 Annual Meeting (the "1999 Meeting"), with respect to directors whose terms expired at the 1999 Meeting, and continuing at the annual meetings of stockholders held in 2000 and 2001, each director whose term is expiring (and any new nominees for director) shall be elected for one-year terms only. On February 16, 1999 and March 1, 1999, respectively, N. Hunter Wyche and J. David Rosenberg resigned from the Board of Directors (the "Board"). At a meeting on April 20, 1999, the Board appointed James Benenson, Jr. to fill the vacancy left by Mr. Rosenberg. In addition, Harold Smith informed the Board that he would not stand for reelection at the annual meeting to be held in 2000. The Board declined to nominate a director to stand for election in Mr. Smith's place and voted to reduce the number of directors from seven to five. Such reduction does not shorten Mr. Smith's term, which expires at the annual meeting in 2000. As a result of the foregoing, at the 1999 Annual Meeting, the Board consisted of one director in the class expiring at the 1999 Meeting, one director in the class whose term expires at the annual meeting in 2000 and three directors in the class whose terms expire at the annual meeting in 2001. Additionally, as described above, the director elected at the annual meeting in 2000 and all directors elected at annual meetings following the annual meeting in 2000, shall be elected for one-year terms only. The name of, principal occupation of and certain additional information about each of the five current directors are set forth below. DIRECTORS AND EXECUTIVE OFFICERS NAME AND AGE OCCUPATION AND OTHER DIRECTORSHIPS Jack L. Howard (38) Mr. Howard has served as a director of the Company (term expires 2000) since 1996 and Vice President, Secretary, Treasurer and Chief Financial Officer of the Company since December 1997. Mr. Howard has been a registered principal of Mutual Securities, Inc., a stock brokerage firm, since prior to 1993. Mr. Howard has also been the Acting President and Chief Financial Officer of Gateway Industries, Inc. since September 1994. Mr. Howard is a director of the following publicly held companies: Gateway Industries, Inc. and Pubco Corporation. James Benenson, Jr. (64) Mr. Benenson has been Chairman of Vesper Company since (term expires 2000) 1979 and of Arrowhead Holdings Corporation since 1983. Prior to such time, Mr. Benenson served in various capacities with F. Eberstadt & Co., Walker, Hart & Co. and James Benenson & Co. Mr. Benenson has served as a director of the Company since 1999, when he was appointed by the Company's Board of Directors to fill the vacancy created by the resignation of J. David Rosenberg. Warren G. Mr. Lichtenstein has served as a director of the Lichtenstein (34) Company since 1996 and President and Chief Executive (term expires 2001) Officer of the Company since December 1997. Mr. Lichtenstein has been the Chairman of the Board, Secretary and the Managing Member of Steel Partners, L.L.C. ("Steel LLC"), the general partner of Steel Partners II, L.P. since January 1, 1996. Prior to such time, Mr. Lichtenstein was the Chairman and a director of Steel Partners, Ltd., the general partner of Steel Partners Associates, L.P., which was the general partner of Steel Partners II, L.P. since 1993 and prior to January 1, 1996. Mr. Lichtenstein has also served as President and director of Marsel Mirror and Glass Products, Inc. ("Marsel"), a subsidiary of Gateway Industries, Inc. ("Gateway"), from Marsel's inception in July 1995 until shortly after the acquisition of its business by Gateway in November 1995, and continued as a director until its disposition in December 1996. Marsel filed for protection under Chapter 11 of the United States Bankruptcy Code shortly following Gateway's disposition of its interest in Marsel. Mr. Lichtenstein is a director of the following publicly held companies: Gateway Industries, Inc., PLM International, Inc., Tech-Sym Corporation, CPX Corp., ECC International Corp. and Saratoga Beverage Group, Inc. Earle C. May (81) Mr. May was elected a director of the Company by the (term expires 2001) Board of Directors on July 22, 1997. Mr. May has been an executive officer of May Management, Inc., an investment management firm, since prior to 1993. Joseph L. Mullen (52) Mr. Mullen has served as a director of the Company (term expires 2001) since 1995. Since January 1994, Mr. Mullen has served as Managing Partner of Li Moran International, a management consulting company, and has functioned as a senior officer overseeing the merchandise and marketing departments for such companies as Leewards Creative Crafts Inc., Office Depot of Warsaw, Poland and WebFinancial Corporation. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater-than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. The Company believes that all such reports required to be filed during the fiscal year ended December 31, 1999 ("Fiscal 1999"), were filed on a timely basis. The Company 's belief is based solely on its review of Forms 3, 4, and 5 and amendments thereto furnished to the Company during, and with respect to, Fiscal 1999 by persons known to be subject to Section 16 of the Exchange Act. To the Company's knowledge, based solely on its review of the copies of such reports furnished to the Company, during its fiscal year ended December 31, 1999, all Section 16(a) filing requirements applicable to its officers, directors and greater-than 10% beneficial owners were satisfied. Item 11. EXECUTIVE COMPENSATION CASH AND OTHER COMPENSATION The following table sets forth all the compensation earned for services rendered in all capacities, during the fiscal years indicated, by the person who served as chief executive officer of the Company and the other most highly compensated executive officer during 1999 (collectively, the "Named Executives"). No other executive officer received annual compensation at the rate of $100,000 or more during the most recent fiscal year. Long-term Compensation Awards ------ Name and Principal Position Year Options/SARs(#) - ------------------ ---- -------------- Warren G. Lichtenstein 1999 0 President and Chief executive officer 1998 211,145 1997 16,313 Jack L. Howard 1999 0 Vice President and 1998 123,645 Chief financial officer 1997 16,313 STOCK OPTIONS No stock options or stock appreciation rights were granted to the Named Executives during 1999. The following table shows aggregate option exercise of the Named Executives during the year (there were no stock appreciation rights granted or exercised) and the number and value of options held as of December 31, 1999 by the Named Executives. AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
Number of shares acquired from stock Dollar value Number of Unexercised Value of Unexercised option exercise realized on Options In-the-Money Options Name during the year exercise($) at Fiscal Year-End(#) at Fiscal Year-End($)(1) - ---------------------- --------------- ---------- -------------------- -------------------- Exercisable Unexercisable Exercisable Unexercisable ----------- ------------- ----------- ------------- Warren G. Lichtenstein 0 0 208,708 18,750 1,298,164 116,625 Jack L. Howard 64,250 1,125,650 63,208 12,500 393,154 77,750 (1) The value of in-the-money options assumes the closing sales price of the Common Stock underlying the options as of December 31, 1999 ($6.22).
COMPENSATION COMMITTEE INTERLOCKS Compensation Committee Interlock and Insider Participation. The Company had no compensation committee or other Board committee performing equivalent functions during 1999. Each member of the Board, including Messrs. Lichtenstein and Howard, the Company's Named Executive Officers, has participated in deliberations concerning executive officers' compensation. DIRECTOR COMPENSATION Each of the three directors who are not officers of the Company has elected to receive his retainer fee of $18,000 per year and meeting fee compensation ranging from $375 to $1,125 per meeting in the form of grants of common stock, to be paid at the time of the annual meeting. The value of the shares granted is the fair market value at the time of the grant. Directors who are not officers do not receive annual or per meeting compensation. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information as of March 31, 2000 regarding the beneficial ownership of the Common Stock by each person known by the Company to own beneficially more than 5% of the Common Stock, by each director and executive officer, individually, and by all directors and executive officers as a group. Amount and Nature of Beneficial Name and Address Ownership Percentage of Class Warren G. Lichtenstein 1,320,613(1) 29.02% 150 East 52nd Street New York, New York 10022 Steel Partners II, L.P. 1,090,655(2) 23.96% 150 East 52nd Street New York, New York 10022 Jack L. Howard 110,108(3) 2.42% 182 Farmers Lane Santa Rosa, CA 95405 Earle C. May 410,777(4) 9.03% 4550 Kruse Way #345 Lake Oswego, Oregon 97035 May Management, Inc. 385,350 8.47% 4550 Kruse Way #345 Lake Oswego, Oregon 97035 James Benenson, Jr. 61,678 1.36% One Lexington Ave New York, NY 10010 Joseph L. Mullen 20,361(5) * 611 Broadway Suite 801 New York, NY 10012 All directors and executive 1,923,537 42.27% officers as a group (five persons) *Less than 1% ---------------------- (1) Includes: (a) 2,500 shares of Common Stock owned by Mr. Lichtenstein; (b) 227,458 shares of Common Stock issuable upon the exercise of options within sixty days of March 31, 2000 granted to Mr. Lichtenstein; (c) 1,068,970 shares of Common Stock owned by Steel Partners II, L.P.; and (d) 21,685 shares of Common Stock issuable upon the exercise of warrants within sixty days of March 31, 2000 owned by Steel Partners II, L.P. Mr. Lichtenstein is the Managing Member of the general partner of Steel Partners II, L.P. Mr. Lichtenstein disclaims beneficial ownership of the shares of Common Stock owned by Steel Partners II, L.P. (except to the extent of his pecuniary interest in such shares of Common Stock, which is less than the amount disclosed). (2) Represents 1,068,970 shares of Common Stock and 21,685 shares of Common Stock issuable upon exercise of warrants within sixty days of March 31, 2000. (3) Represents 34,400 shares of Common Stock and 75,708 shares of Common Stock issuable upon exercise of options within sixty days of March 31, 2000 granted to Mr. Howard. (4) Includes: (a) 5,066 shares of Common Stock owned by Mr. May; (b) 20,361 shares of Common Stock issuable upon the exercise of options within sixty days of March 31, 2000 granted to Mr. May; (c) 35,000 shares of Common Stock owned by May Management, Inc.; and (d) 350,350 shares of Common Stock held in customer accounts as to which May Management, Inc. has shared dispositive power. Mr. May is the Chief Executive Officer and a principal stockholder of May Management, Inc. and may be deemed to be the beneficial owner of shares owned by May Management, Inc. or as to which May Management, Inc. has shared dispositive power. (5) Represents 20,361 shares of Common Stock issuable upon exercise of options within sixty days of March 31, 2000 granted to Mr. Mullen. -------------------- Except as noted in the footnotes above, (i) none of such shares is known by the Company to be shares with respect to which the beneficial owner has the right to acquire beneficial ownership and (ii) the Company believes the beneficial owner listed above has sole voting and investment power with respect to the shares shown as being beneficially owned by it. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS As of March 31, 1998, the Company entered into a sub-lease for office space with Gateway Industries, Inc. ("GWAY") for use of such space as a corporate office on a non-exclusive basis. This lease runs through March 31, 2001, but may be terminated by either party upon 90 days notice. Warren Lichtenstein, the Company's President, Chief Executive Officer, and Chief Accounting Officer, is the Chairman of the Board of Directors of GWAY. Mr. Lichtenstein is also the Managing Member of the General Partner of Steel Partners II, L.P. which owns approximately 48% of the common stock of GWAY. Steel Partners Services, Ltd. ("SPS"), which is owned by an entity controlled by Mr. Lichtenstein, also subleases part of the office space from GWAY. In 1998, the rent was approximately $2,700 a month. During the year ended December 31, 1999, the Company paid a management fee of approximately $267,000 to SPS for certain management, consulting and advisory services. The fee also included the Company's one-third share of rent expense which was paid entirely by SPS during 1999. The Company believes that the cost of obtaining the type and quality of services rendered by SPS is no less favorable than the cost at which the Company could obtain from unaffiliated entities. 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. WebFinancial Corporation By: /s/Jack L. Howard --------------------------- Jack L. Howard Vice President and Chief Financial Officer Date: April 25, 2000 -----END PRIVACY-ENHANCED MESSAGE-----