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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, 2003 as set forth in the pages attached
hereto:
PART III
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Item 9. Directors, Executive Officers, Promoters and
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Control Persons; Compliance With Section 16(a) of
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the Exchange Act.
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Item 10. Executive Compensation.
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Item 11. Security Ownership of Certain Beneficial Owners
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and Management.
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Item 12. Certain Relationships and Related Transactions.
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Item 14. Principal Accountant Fees and Services.
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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 28, 2004
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|
SERVOTRONICS, INC.
AMENDMENT NO. 1
TO
FORM 10-KSB FOR YEAR ENDED
DECEMBER 31, 2003
Item 9. Directors, Executive Officers and Control Persons; Compliance
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With Section 16(a) of the Exchange Act.
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(a) Directors. The table below sets forth certain information
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regarding the directors of Servotronics, Inc. (the "Company"), each of whom was
elected at the Company's 2003 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 82 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 82 Director of the Company since 1967;
self-employed attorney since 1988.
Nicholas D. Trbovich, Jr. 43 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 68 Chairman of the Board of Directors,
President and Chief Executive Officer of
the Company since 1959.
The Board has designated Dr. William H. Duerig as the Company's "Audit Committee
financial expert" in accordance with the SEC rules and regulations. The Board
has determined that Dr. Duerig is independent pursuant to Section 121A of the
listing Standards of the American Stock Exchange.
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(b) Executive Officers. The following is a listing of the
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Company's executive officers:
Position with the Company
and Principal Occupation
and Business Experience
Name Age for Past Five Years
---- --- --------------------------------
Dr. Nicholas D. Trbovich 68 See table under "Directors."
Nicholas D. Trbovich, Jr. 43 See table under "Directors."
Raymond C. Zielinski 59 Vice President since 1990;
Director of Manufacturing of the
Company from 1983 to 1990.
Lee D. Burns 62 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
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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
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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
Audit Committee of the Board are paid a yearly Audit Committee fee of $2,500
plus a per-meeting fee of $450 and reimbursement of actual expenses for
attendance at Audit Committee meetings.
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Compensation Table. The following table shows the compensation
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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
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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................. 2003 $359,579 -- -- 50,000 $34,886
Chairman, President and 2002 347,419 $15,000 -- -- 45,620
CEO 2001 337,301 30,000 -- 45,000 44,002
Raymond C. Zielinski..................... 2003 $134,263 -- -- 9,000 $ 3,409
Vice President 2002 129,308 $ 6,500 -- -- 4,414
2001 120,423 10,000 -- 8,000 12,269
Nicholas D. Trbovich, Jr................. 2003 $139,446 -- -- 27,000 $13,848
Director, Vice President 2002 129,308 $ 6,500 -- -- 19,885
2001 120,423 10,000 -- 24,000 14,699
Lee D. Burns............................. 2003 $122,809 -- -- 9,000 $12,569
Treasurer, Secretary and CFO 2002 118,532 $ 6,500 -- -- 712
2001 110,327 10,000 -- 8,000 6,834
(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 2003. Discretionary payments authorized for 2004 will be
included in the compensation table for 2004 to the extent they are paid
in that year. The Board of Directors has made no commitment for
incentive payments in subsequent years.
(2) The values of perquisites and other personal benefits are not shown on
the table because the aggregate amount of such compensation (if any)
for each year shown did not exceed 10% of the Named Officer's annual
salary and bonus for that year.
(3) All Other Compensation for 2003 includes (i) an allocation of 1,378
share, 940 shares, and 1,020 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, 2003 (the date of the allocation) at the closing price on
the American Stock Exchange on that date of $3.10 per share; (ii)
$4,350, $494, $118, and $747 to Dr. Trbovich, Mr. Zielinski, Mr.
Trbovich, Jr. and Mr. Burns, respectively, for life insurance; and
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(iii) $26,265, $10,570, and $11,822 paid to Dr. Trbovich, Mr. Trbovich,
Jr. and Mr. Burns, respectively, for untaken vacation pursuant to a
policy that is generally applicable to all employees of the Company;
these amounts reflect accrued vacation earned and expensed by the
Company prior to when the payments were received.
Option Grants. The following tables give information with
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respect to stock options granted to, exercised or owned by the Named Officers
during 2003.
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OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
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Number of Percent of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees Exercise of Expiration
Name of Officer Granted (#) in Fiscal Year Base Price ($/Sh) Date
--------------- ----------- -------------- ----------------- ----
--------------------------- ---------------- ---------------- ------------------ -------------
Dr. Nicholas D. Trbovich... 50,000 (1) 45.9% $2.045 4/10/13
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Raymond C. Zielinski....... 9,000 (2) 8.3% $2.045 4/10/13
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Nicholas D. Trbovich, Jr... 27,000 (1) 24.8% $2.045 4/10/13
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Lee D. Burns............... 9,000 (2) 8.3% $2.045 4/10/13
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(1) Exercisable on October 11, 2003
(2) Exercisable on April 11, 2004
Option Exercises and Fiscal Year End Values. No Named Officer
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exercised options during 2003. The following table shows information with
respect to the value of unexercised options held by the Named Officers as of
December 31, 2003. Valuation calculations for unexercised options are based on
the closing price ($2.90) of a Share on the American Stock Exchange on December
31, 2003.
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AGGREGATED OPTION/SAR EXERCISES WITH LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised Securities In-The-Money
Underlying Options at Options at
Fiscal Year-End: Fiscal Year End:
Name of Officer Exercisable/Unexercisable Exercisable/Unexercisable
--------------- ------------------------- -------------------------
Dr. Nicholas D. Trbovich... 170,600/0 $42,750/0
Raymond C. Zielinski....... 21,300/9,000 0/$7,695
Nicholas D. Trbovich, Jr. . 87,800/0 $23,085/0
Lee D. Burns............... 21,300/9,000 0/$7,695
Employment Agreement. Dr. Trbovich has an employment agreement
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with the Company pursuant to which he is entitled to receive minimum direct
compensation of $363,995 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
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, 2008), 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
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Management.
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(a) Security Ownership of Certain Beneficial Owners. The
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following table lists the persons that owned beneficially, as of April 12, 2004,
more than 5% of the outstanding shares of common stock of the Company, based on
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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) 836,971 (2) 33.6%
1110 Maple Street
P.O. Box 300 Elma, New York 14059
Dr. Nicholas D. Trbovich 557,689 (3) 20.9%
1110 Maple Street
P.O. Box 300 Elma, New York 14059
Harvey Houtkin (4) 352,088 (4) 14.1%
160 Summit Avenue
Montvale, New Jersey 07645
(1) Percent of class is based upon 2,492,901 shares of common stock
outstanding as of April 12, 2004 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, 2004, approximately 391,646
shares have been allocated to the accounts of participants and
approximately 445,325 shares (17.9% 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
170,600 shares; (iii) approximately 42,974 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 13D, as last amended on February 12,
2004, 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 162,088 shares. Mr. Houtkin disclaims beneficial
ownership in additional shares owned by other members of his family.
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(b) Security Ownership of Management. The following table sets
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forth, as of April 12, 2004, 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):
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
---------------- -------------------- ---------
Dr. Nicholas D. Trbovich 557,689 (2) 20.9%
Nicholas D. Trbovich, Jr. 124,520 (3) 4.8%
Donald W. Hedges 66,336 (4) 2.6%
Dr. William H. Duerig 65,193 (5) 2.6%
Raymond C. Zielinski 54,753 (6) 2.2%
Lee D. Burns 49,895 (7) 2.0%
All directors and executive
officers as a group 1,363,711 (8)(9) 46.46%
(1) Percent of class is based upon 2,492,901 shares of common stock
outstanding as of April 12, 2004 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 87,800 shares which Mr. Trbovich, Jr. has the
right to acquire under stock options which are currently exercisable
and approximately 20,906 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 61,600 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 61,600 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.
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(6) This amount includes 30,300 shares which Mr. Zielinski has the right to
acquire under stock options which are currently exercisable and
approximately 16,126 shares allocated to Mr. Zielinski's account under
the Servotronics, Inc. Employee Stock Ownership Plan. Does not include
shares held by the ESOT as to which Mr. Zielinski. serves as one of
three trustees. See note (8) below and the table in "Security Ownership
of Certain Beneficial Owners."
(7) This amount includes 30,300 shares which Mr. Burns has the right to
acquire under stock options which are currently exercisable and
approximately 6,423 shares allocated to Mr. Burns' account under the
Servotronics, Inc. Employee Stock Ownership Plan. Does not include
shares held by the ESOT as to which Mr. Burns serves as one of three
trustees. See note (8) below and the table in "Security Ownership of
Certain Beneficial Owners."
(8) 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.
(9) See notes (2) through (7) above.
(c) Securities Authorized for Issuance Under Equity
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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 270,000 $3.126 80,000
holders.................
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Equity compensation
plans not approved
by security holders... 194,200 $6.057 76,600
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464,200 $4.352 156,600
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Total...................
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Item 12. Certain Relationships and Related Transactions.
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During 2003, 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.
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Nicholas D. Trbovich, received remuneration of $74,852 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.
Item 14. Principal Accountant Fees and Services.
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The following table shows the fees paid or accrued by the
Company for the audit and other services provided by PricewaterhouseCoopers LLP
for fiscal 2003 and 2002.
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2003 2002
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Audit Fees (1)........ $83,750 $79,250
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Audit-Related Fees.... 0 6,000
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Tax Fees (2).......... 30,300 31,300
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All Other Fees ....... 0 0
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Total................. $114,050 $116,550
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(1) Audit fees represent fees for professional services provided in
connection with the audit of the Company's financial statements and
review of the Company's quarterly financial statements and audit
services provided in connection with other statutory or regulatory
filings.
(2) Tax fees principally included fees for tax preparation and tax
consulting services.
The Audit Committee pre-approves all audit and legally permissible non-audit
services provided by the independent accountants. The Audit Committee
pre-approved all services performed by PricewaterhouseCoopers LLP during 2003.