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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB/A
AMENDMENT TO FORM 10-KSB
Filed Pursuant to
THE SECURITIES EXCHANGE ACT OF 1934
SERVOTRONICS, INC.
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(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-KSB for
the year ended December 31, 2002 as set forth in the pages attached hereto:
PART III
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Item 9. Directors, Executive Officers, Promoters and Control Persons;
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Compliance With Section 16(a) of the Exchange Act.
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Item 10. Executive Compensation.
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Item 11. Security Ownership of Certain Beneficial Owners and Management.
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Item 12. Certain Relationships and Related Transactions.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
SERVOTRONICS, INC.
Dated as of: April 29, 2003
By: /s/ Lee D. Burns
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Lee D. Burns
Treasurer and Secretary
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the 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
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SERVOTRONICS, INC.
AMENDMENT NO. 1
TO
FORM 10-KSB FOR YEAR ENDED
DECEMBER 31, 2002
Item 9. Directors, Executive Officers and Control Persons; Compliance With
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Section 16(a) of the Exchange Act.
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(a) DIRECTORS. The table below sets forth certain information
regarding the directors of Servotronics, Inc. (the "Company"), each of whom was
elected at the Company's 2002 Annual Meeting of Shareholders. The term of office
of each director is until the next Annual Meeting of Shareholders and until his
successor is elected and shall have qualified.
Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
---- --- ---------------------------------
Dr. William H. Duerig 81 Director of the Company since 1990;
Physicist and Senior Program Manager for
Kearfott Guidance & Navigation Corporation
for more than five years
prior to retirement in 1993.
Donald W. Hedges 81 Director of the Company since 1967;
self-employed attorney since 1988.
Nicholas D. Trbovich, Jr. 42 Director of the Company since 1990;
Vice President of the Company since 1990;
Director of Corporate Development of the
Company from 1987 to 1990;
Director of e.Autoclaims.
Dr. Nicholas D. Trbovich 67 Chairman of the Board of Directors,
President and Chief Executive Officer of
the Company since 1959.
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(b) EXECUTIVE OFFICERS. The following is a listing of the Company's
executive officers:
Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
---- --- --------------------------------
Dr. Nicholas D. Trbovich 67 See table under "Directors."
Nicholas D. Trbovich, Jr. 42 See table under "Directors."
Raymond C. Zielinski 58 Vice President since 1990;
Director of Manufacturing of
the Company from 1983 to 1990.
Lee D. Burns 61 Treasurer, Secretary and
Chief Financial Officer of the
Company since 1991; Controller
and Assistant Treasurer of the
Company from 1978 to 1991.
Nicholas D. Trbovich, Jr. is the son of Dr. Nicholas D. Trbovich.
There are no other family relationships between any of the directors or
executive officers of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Based solely
on its review of reports filed pursuant to Section 16(a) of the Securities
Exchange Act or representations from directors and executive officers required
to file such reports, the Company believes that all such filings required of its
officers and directors were timely made.
Item 10. Executive Compensation.
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DIRECTORS' FEES. Under the Company's standard compensation
arrangements with directors who are not employees, they are paid a yearly
director's fee of $10,000 plus a per meeting fee of $650 and reimbursement of
actual expenses for attendance at Board meetings. Directors who are also
employees do not receive the director's and/or meeting fees. Members of the
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Audit Committee of the Board are paid a yearly Audit Committee fee of $1,500
plus a per-meeting fee of $450 and reimbursement of actual expenses for
attendance at Audit Committee meetings other than Audit Committee meetings held
on the same day as a Board meeting.
COMPENSATION TABLE. The following table shows the compensation paid by
the Company to each executive officer of the Company whose total salary and
bonus from the Company and its subsidiaries exceeded $100,000 during any of the
last three fiscal years (the "Named Officers").
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
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Awards
Other Securities
Annual Underlying All Other
Name and Compen- Options Compen-
Principal Position Year Salary Bonus (1) sation (2) (No. of Shares) sation (3)
------------------ ---- ------ --------- ----------- --------------- ----------
Dr. Nicholas D. Trbovich................. 2002 $347,419 $15,000 $ 35,827 -- $11,306
Chairman, President and 2001 337,301 30,000 29,484 45,000 18,344
CEO 2000 328,875 -- 31,250 37,800 11,069
Raymond C. Zielinski..................... 2002 $129,308 $ 6,500 -- -- $6,651
Vice President 2001 120,423 10,000 $ 4,846 8,000 8,786
2000 118,478 -- -- 7,500 4,790
Nicholas D. Trbovich, Jr................. 2002 $129,308 $ 6,500 $ 15,192 -- $14,787
Director, Vice President 2001 120,423 10,000 7,633 24,000 18,410
2000 108,596 -- 54,508 18,400 7,551
Lee D. Burns............................. 2002 $118,532 $ 6,500 -- -- $3,017
Treasurer, Secretary and CFO 2001 110,327 10,000 -- 8,000 6,834
2000 105,379 -- $ 29,172 7,500 4,239
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(1) The "Bonus" column of the compensation table above includes
discretionary incentive payments authorized by the Board of Directors
and paid in the year indicated in the table. No bonuses were paid in
the year 2000. Discretionary payments authorized for 2003 will be
included in the compensation table for 2003 to the extent they are
paid in that year. The Board of Directors has made no commitment for
incentive payments in subsequent years.
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(2) Comprises amounts paid for untaken vacation pursuant to a policy that
is generally applicable to all employees of the Company; these amounts
reflect accrued vacation earned and expensed by the Company prior
to when the payments were received.
(3) All Other Compensation for 2002 includes (i) an allocation of 1,436,
1,013, and 1,175 shares for Dr. Trbovich, Mr. Zielinski and Mr.
Trbovich, Jr., respectively, of common stock of the Company under the
Servotronics, Inc. Employee Stock Ownership Plan valued as of November
30, 2002 (the date of the allocation) at the closing price on the
American Stock Exchange on that date of $3.90 per share; and (ii)
$4,191, $2,702, $9,664 and $3,017 to Dr. Trbovich, Mr. Zielinski, Mr.
Trbovich, Jr. and Mr. Burns, respectively, for life insurance and
health care benefits, but excludes $18,250 of a taxable life insurance
related benefit for Dr. Trbovich.
STOCK OPTIONS. No stock options were granted to or exercised
by the Named Officers during 2002. The following table gives
information with respect to stock options owned by the Named Officers
at the end of 2002.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of
Number of Unexercised
Shares Unexercised Securities In-The-Money
Acquired Underlying Options at Options at
on Value Fiscal Year-End: Fiscal Year End:
Name of Officer Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
--------------- -------- -------- ------------------------- -------------------------
Dr. Nicholas D. Trbovich - -- 120,600/0 N/A
Raymond C. Zielinski - -- 21,300/0 N/A
Nicholas D. Trbovich, Jr. - -- 60,800/0 N/A
Lee D. Burns - -- 21,300/0 N/A
EMPLOYMENT AGREEMENT. Dr. Trbovich has an employment agreement with
the Company pursuant to which he is entitled to receive minimum direct
compensation of $353,395 per annum, or such greater amount as the Company's
Board of Directors may determine, and lifetime health and life insurance
benefits. In the event of Dr. Trbovich's death or total disability during the
term of the employment agreement, he or his estate is entitled to receive 50% of
the compensation he is receiving from the Company at the time of his death or
disability during the remainder of the term of the employment agreement. Also,
in the event of (i) a breach of the agreement by the Company, (ii) a change in
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control of the Company, as defined, or (iii) a change in the responsibilities,
positions or geographic office location of Dr. Trbovich, he is entitled to
terminate the agreement and receive a payment of 2.99 times his average annual
compensation from the Company for the preceding five years. If this provision is
invoked by Dr. Trbovich and the Company makes the required payment, the Company
will be relieved of any further liability under the agreement notwithstanding
the number of years covered by the agreement prior to termination. In the event
the agreement is not extended by the Company beyond the scheduled expiration
date (September 30, 2007), as such date may be extended, Dr. Trbovich will be
entitled to a severance payment equal to nine months' salary and benefits.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
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(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following
table lists the persons that owned beneficially, as of April 12, 2003, more than
5% of the outstanding shares of common stock of the Company, based on the
Company's records. Unless otherwise stated, each person has sole voting and
investment power with respect to the shares of common stock indicated as
beneficially owned by that person.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
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Servotronics, Inc. Employee
Stock Ownership Trust (2) 841,774 (2) 33.8%
1110 Maple Street
P.O. Box 300
Elma, New York 14059
Dr. Nicholas D. Trbovich 506,311 (3) 19.4%
1110 Maple Street
P.O. Box 300
Elma, New York 14059
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Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
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Harvey Houtkin (4) 238,803 (4) 9.6%
160 Summit Avenue
Montvale, New Jersey 07645
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(1) Percent of class is based upon 2,492,901 shares of common stock
outstanding as of April 12, 2003 plus, in the case of Dr. Trbovich,
the shares underlying his stock options, all of which are presently
exercisable.
(2) The trustees of the Servotronics, Inc. Employee Stock Ownership
Trust--Nicholas D. Trbovich, Jr., Lee D. Burns and Raymond C.
Zielinski--direct the voting of unallocated shares. The participants
in the related plan have the right to direct the voting of shares
which have been allocated to their respective accounts; if a
participant does not direct the vote, the trustees may direct the vote
of that participant's shares. As of April 12, 2003, approximately
371,171 shares have been allocated to the accounts of participants and
approximately 470,603 shares (18.9% of the shares outstanding) remain
unallocated.
(3) This amount includes (i) 32,309 shares held by a charitable foundation
for which Dr. Trbovich serves as a trustee; (ii) an option to acquire
120,600 shares; (iii) approximately 41,596 shares allocated to Dr.
Trbovich's account under the Servotronics, Inc. Employee Stock
Ownership Plan; and (iv) approximately 3,084 shares beneficially owned
by certain of Dr. Trbovich's children (as to which Dr. Trbovich
disclaims beneficial interest). This amount does not include the
shares beneficially owned by certain of Dr. Trbovich's other
relatives.
(4) Based on a statement on Schedule 13G, as last amended on February 13,
2003, filed by Mr. Houtkin with the Securities and Exchange
Commission. According to Mr. Houtkin's statement, he has sole voting
and investment power with respect to 190,000 shares and shared voting
and investment power with respect to 48,803 shares. Mr. Houtkin
disclaims beneficial ownership in additional shares owned by other
members of his family.
(b) SECURITY OWNERSHIP OF MANAGEMENT. The following table sets forth,
as of April 12, 2003, information as to the beneficial ownership of shares of
common stock of the Company held by each director and by all directors and
officers as a group (each individual listed in the following table has sole
voting and investment power with respect to the shares of common stock indicated
as beneficially owned by that person, except as otherwise indicated):
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Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
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Dr. Nicholas D. Trbovich 506,311 (2) 19.4%
Nicholas D. Trbovich, Jr. 95,500 (3) 3.7%
Donald W. Hedges 36,586 (4) 1.5%
Dr. William H. Duerig 35,443 (5) 1.4%
All directors and executive
officers as a group 1,129,391 (6)(7) 44.24%
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(1) Percent of class is based upon 2,492,901 shares of common stock
outstanding as of April 12, 2003 plus the number of shares subject to
stock options held by the indicated person or group.
(2) See note (3) to the table in "Security Ownership of Certain Beneficial
Owners."
(3) This amount includes 60,800 shares which Mr. Trbovich, Jr. has the
right to acquire under stock options which are currently exercisable
and approximately 19,886 shares allocated to Mr. Trbovich, Jr.'s
account under the Servotronics, Inc. Employee Stock Ownership Plan.
Does not include shares held by the Servotronics, Inc. Employee Stock
Ownership Trust (the "ESOT") as to which Mr. Trbovich, Jr. serves as
one of three trustees. See note (6) below and the table in "Security
Ownership of Certain Beneficial Owners."
(4) This amount includes 31,850 shares which Mr. Hedges has the right to
acquire under stock option plans all of which are currently
exercisable. Mr. Hedges has sole voting and investment power with
respect to 4,261 shares and shared voting and investment power with
respect to 475 shares.
(5) This amount includes 31,850 shares which Dr. Duerig has the right to
acquire under a stock option plan all of which are currently
exercisable. Dr. Duerig has sole voting with respect to 3,593 shares.
(6) Includes unallocated shares held by the ESOT over which certain
officers, as trustees of the ESOT, may be deemed to have voting power,
as well as shares allocated to the accounts of all officers as a group
under the related plan. See the table in "Security Ownership of
Certain Beneficial Owners" and note (2) thereto.
(7) See notes (2) through (5) above.
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(c) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY
COMPENSATION PLANS.
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EQUITY COMPENSATION PLAN INFORMATION
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Number of securities
Number of securities remaining available for
to be issued upon Weighted-average future issuance under
exercise of outstanding exercise price of equity compensation
options, warrants outstanding options, plans (excluding securities
and rights warrants and rights reflected in column (a))
Plan category (a) (b) (c)
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Equity compensation
plans approved by
security 125,000 $4.38 225,000
holders................
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Equity compensation
plans not approved
by security holders........... 194,200 $6.057 76,600
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319,200 $5.40 301,600
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Total.................................
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Item 12. Certain Relationships and Related Transactions.
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During 2002, Dr. Trbovich's son, Nicholas D. Trbovich, Jr., served as
an officer and director of the Company and received the compensation disclosed
in the Summary Compensation Table in Item 10. See also, the discussion under
"Employment Agreement" in Item 10. Michael D. Trbovich, also a son of Dr.
Nicholas D. Trbovich, received remuneration of $72,827 which includes fringe
benefits for health insurance, life insurance and an amount paid for untaken
vacation. He did not receive a benefit (i.e.: a no-cost allocation of Company
shares) from the Company's ESOP.
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