SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Amendment Includes Part III - Items 10 through 13, which were previously
incorporated by reference to the Issuer's Proxy Statement)
(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, 1995, OR
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to _____________
Commission File No. 1-8356
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DVL, INC.
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-2892858
- - ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
24 River Road, Bogota, New Jersey 07603
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 487-1300
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
----------------------------- -----------------------
Common Stock, $1.00 par value National Association of
Securities Dealers, Inc.
Securities registered pursuant to Section 12(g) of the Act: None
----
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 information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of voting stock held by non-affiliates of the Registrant,
based upon the closing sale price of the stock as reported on the National
Association of Securities Dealers, Inc. Over-The-Counter Bulletin Board on March
27, 1996: $3,229,501.
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At March 27, 1996, 13,510,850 shares of the Registrant's Common Stock were
outstanding.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
- - ------------------------------------------
The directors of DVL, Inc. (the "Company") consist of three
(3) independent directors and one (1) director who is also an
executive officer as follows:
Director
Name Age Since Office(s)
---- --- -------- ---------
Director and Executive
Officer
- - ----------------------
Alan E. Casnoff 52 1991 President and Director
Independent Directors
- - ----------------------
Herbert L. Golden 88 1979 Director
Myron Rosenberg 67 1973 Director
Frederick E.
Smithline 64 1982 Chairman of the Board
Directors are currently elected to serve until the next annual
meeting of stockholders and until their successors have been
elected and have qualified.
ALAN E. CASNOFF has served as President since November 1994,
a director since October 1991 and as Executive Vice President from
October 1991 through October 1994. Since June 1992, Mr. Casnoff
has served as Of Counsel to the law firm of Fox, Rothschild,
O'Brien & Frankel, Philadelphia, Pennsylvania. From November 1990
to October 1991, Mr. Casnoff served as a consultant to the Company
and from 1971 to October 1991, as Secretary of the Company. Since
May 1991, Mr. Casnoff has served as a director of Kenbee
Management, Inc. ("Kenbee"). Mr. Casnoff also served as Executive
Vice President of Kenbee from January 1992 to November 1994 and has
served as President of Kenbee since November 1994. In addition,
since 1977, Mr. Casnoff has been a Partner of P&A Associates, a
private real estate development firm. From 1969 to October 1990,
Mr. Casnoff was associated with the law firm of Saul, Ewing, Remick
& Saul, Philadelphia, Pennsylvania, previous legal counsel to the
Company and Kenbee.
HERBERT L. GOLDEN has served as a director of the Company
since 1979. From January 1979 to November 1991, Mr. Golden served
as a senior consultant to Bankers Trust Company, New York, New
York. Mr. Golden is currently retired.
FREDERICK E. SMITHLINE has served as Chairman of the Board of
the Company since 1990 and as a director since 1982. Since
September 1989, Mr. Smithline has been of Counsel to the law firm
of Epstein, Becker & Green, P.C., New York, New York.
1
MYRON ROSENBERG has served as a director of the Company since
1973. Mr. Rosenberg is currently Executive Vice President of
Rosenthal & Rosenthal, Inc., New York, New York, a commercial
finance concern, and has been employed by Rosenthal & Rosenthal,
Inc. since 1961.
In addition, Joel Zbar is Chief Operating Officer, Chief
Financial Officer and Treasurer of the Company and Robert W.
LoSchiavo is Vice President, Secretary and General Counsel of the
Company.
JOEL ZBAR (age 39) has served as the Company's Chief Operating
Officer since November 1994, as Chief Financial Officer of the
Company since January 1993, and as Treasurer of the Company since
1988. Mr. Zbar also serves as Chief Operating Officer, Chief
Financial Officer and Treasurer of Kenbee Management, Inc.
("Kenbee"). In November 1993, the Securities and Exchange
Commission (the "Commission") commenced an administrative
proceeding against Mr. Zbar in connection with certain events
related to the 1990 stock offering and price decline. Without
admitting or denying the allegations of the complaint, Mr. Zbar has
agreed and the Commission has consented to the issuance of a cease
and desist order. Such order does not affect the ability of Mr.
Zbar to perform his duties for DVL.
ROBERT W. LOSCHIAVO (age 38) has served as Vice President of
the Company since January 1990, as Secretary of the Company since
October 1991 and as General Counsel since December 1991. Mr.
LoSchiavo also serves as Vice President, General Counsel and
Secretary of Kenbee.
2
ITEM 11. EXECUTIVE COMPENSATION
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The following table discloses the compensation awarded to or earned by,
during the Company's last three fiscal years,
the Chief Executive Officer and the two (2) other most highly compensated
executive officers as of the end of fiscal 1995 whose
annual salary plus other forms of compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
--------------------------
All Other
Annual Compensation
Long-Term Compensation Compensation
-------------------
- - ----------------------------------- ------------
Other
Cash Annual(2) Restricted
Performance(3) LTIP
Name Year Salary Bonus Compensation Stock Awards
Units Payouts
---- ---- ------ ----- ------------ ------------
- - ----------- -------
Alan E. Casnoff 1995 $314,002 --- $15,000 None
0 $ 7,500 (4) None
President 1994 339,810(1) --- None None
0 None None
since November 1994 1993 340,636(1) --- None None
50,000 None None
Joel Zbar 1995 250,000 --- 7,500 None
100,000 23,469 (4) None
Treasurer, Chief 1994 250,000 --- None None
0 None None
Financial Officer 1993 226,000 $13,000 None None
50,000 None None
and Chief Operating
Officer
Robert W. LoSchiavo 1995 160,260 --- 7,500 None
18,750 7,219 (4) None
Vice President, 1994 144,530 --- None None
0 None None
Secretary and 1993 119,189 5,000 None None
15,000 None None
General Counsel
[FN]
- - ----------------------
(1) Does not include payments made to a corporation partially owned and
controlled by Mr. Casnoff which provided
management assistance for two properties in Philadelphia, Pennsylvania
owned by affiliated partnerships for
which such corporation received $9,187.50 and $12,000 in 1994 and 1993,
respectively. During 1994, Mr. Casnoff
was appointed President of the Company and as part of the Company's ongoing
efforts to reduce overhead, Mr.
Casnoff's salary was reduced by $35,000.
(2) Other Annual Compensation represents the value of 100,000 shares, 50,000
shares and 50,000 shares of the
Company's common stock issued in 1995 to Messrs. Casnoff, Zbar and
LoSchiavo, respectively.
(3) The Performance Units granted under the Company's Performance Unit Plan are
SAR's for purposes of Item 402 of
Regulation S-K of the Commission.
(4) Mr. Zbar exercised 50,000 performance units and Mr. LoSchiavo exercised
18,750 performance units in 1995
realizing $23,469 and $7,219, respectively. Mr. Casnoff surrendered 50,000
performance units in consideration
of the issuance to him of 50,000 shares of the Company's common stock which
shares the Company valued at $7,500.
[/FN]
3
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND OFFICERS
- - ----------------------------------------------------------
The following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of April
1, 1996, by (a) each person known by the Company to own
beneficially more than 5% of such stock, (b) each director of the
Company and (c) all directors and officers of the Company as a
group. Unless otherwise indicated, the shares listed in the table
are owned directly by the individual and the individual has sole
voting and investment power with respect to such shares.
Name of Beneficial Amount and Nature of % of
Owner Beneficial Ownership Class*
------------------ -------------------- ------
Alan E. Casnoff 200,000 (1) 2.5%
Herbert L. Golden 56,600 0.7%
Myron Rosenberg 163,854 (2) 2.0%
Frederick E. Smithline 57,550 (3) 0.7%
All directors and officers
as a group (8 persons) 603,004 4.46%
[FN]
- - -------------------------
*Each named person and all executive officers, directors and
nominees for director, as a group, are deemed to be the beneficial
owners of securities that may be acquired within 60 days through
the exercise of options, warrants or exchange or conversion rights.
Accordingly, the number of shares and percentage set forth opposite
each shareholder's name in the above table under the columns
captioned "Amount and Nature of Beneficial Ownership" include
shares of Common Stock issuable upon exercise of presently
exercisable warrants, convertible debentures and stock options, of
which there are none at this time. The shares of Common Stock so
issuable upon such exercise, exchange or conversion by any such
shareholder are not included in calculating the number of shares or
percentage of Common Stock beneficially owned by any other
shareholder.
(1) (a) Excludes 461 shares of the Company's Common Stock held
by Mr. Casnoff's adult son, as to which shares Mr. Casnoff
disclaims beneficial ownership.
(b) Includes 26,000 shares of the Company's common stock
owned by a corporation, partially owned and controlled by Mr.
Casnoff.
(2) Includes 4,300 shares held by Mr. Rosenberg's wife, of
which Mr. Rosenberg disclaims beneficial ownership.
(3) Includes 550 shares held by Mr. Smithline and his brother
as tenants-in-common and 6,000 shares held by Mr. Smithline's wife,
of which 6,000 shares Mr. Smithline disclaims beneficial ownership.
[/FN]
4
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers and persons who own
more than ten percent of a registered class of the Company's equity
securities, to file with the 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 ten percent shareholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required during the two
fiscal years ended December 31, 1995, all Section 16(a) filing
requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with.
The Company has employment contracts with Messrs. Zbar and
LoSchiavo pursuant to which they are paid current annual salaries
at the rate per annum of $250,000 and $150,000, respectively. The
employment contracts with Messrs. Zbar and LoSchiavo provide for
certain payments if the employment term is terminated without cause
or is not renewed at the end of the term in amounts equal to six
(6) months salary. The employment contracts with Messrs. Zbar and
LoSchiavo expire on October 31, 1996 and December 31, 1996,
respectively. In addition, the Board of Directors has authorized
the Company to make certain termination payments to Mr. Casnoff
upon a change of control in the Company in an amount equal to six
(6) months salary over a period of three (3) months.
Directors who are not officers or employees of the Company
presently receive a directors fee of $1,500 per month plus $500 for
each Audit Committee meeting of the Board of Directors attended.
Directors who are officers or employees of the Company receive no
compensation for their services as directors or attendance at any
Board of Directors Committee meeting.
INDEBTEDNESS OF MANAGEMENT
No officers, directors or stockholders of the Company have
obtained loans and loan commitments in excess of $60,000.
STOCK BASED COMPENSATION
On November 15, 1990, the Board adopted the Company's 1990
Performance Unit Plan (the "Plan") for the purpose of providing
long-term incentives to Company employees who are largely
responsible for the management, growth and protection of the
Company's business.
The Plan authorized the grant of performance units, considered
to be stock appreciation rights, only to directors and officers,
who are also employees of the Company or any subsidiary thereof,
who are in a position to make substantial contributions to the
management, growth and success of the business of the Company or
any subsidiary thereof, as determined by the Board, or a committee
thereof, as the case may be.
5
In March 1996, as a condition to a proposed loan transaction,
current and former employees who received performance units agreed
to exchange them for grants of options to purchase a number of
shares equal to the amount of outstanding performance units owned
by each individual under a proposed Non-Qualified Stock Option Plan
requiring stockholder approval. In the event the proposed Non-Qualified Stock
Option Plan is not approved by stockholders, the
performance unit grants will not be effected.
The number of performance units reserved for issuance under
the Plan, as amended, is 900,000, 673,131 of which were outstanding
as of April 30, 1996.
Under the Plan, the holder of performance units is entitled to
receive upon exercise of such units an amount equal to the Fair
Market Value (as defined in the Plan) of a performance unit at the
time of exercise plus all dividends declared with respect to a
single share of the Company's Common Stock from the date of
exercise minus the Fair Market Value of a performance unit at the
time of grant, multiplied by the total number of performance units
being exercised by the holder.
Under the Plan, the Fair Market Value of a performance unit
means an amount equal to the fair market value of a share of Common
Stock as determined by the Board of Directors, or a committee
thereof, either (a) by determining the average of the closing
prices for the Company's Common Stock for the twenty most recent
trading days (or for such other period as may be agreed upon
between the Company and the holder) on the New York Stock Exchange
("NYSE") or such other national securities exchange (including the
NASDAQ system) on which the Company's Common Stock may then be
publicly traded or (b) in the event no such market exists, pursuant
to such other reasonable method as may be adopted by the Board of
Directors or the committee, as the case may be, in good faith for
such purpose.
The following tables set forth certain information with
respect to performance units granted under the Plan to, and
performance units exercised by (i) the executive officers of the
Company listed in the Cash Compensation Table and (ii) all current
executive officers of the Company as a group, during fiscal 1995.
All performance units granted are vested and fully exercisable.
6
PERFORMANCE UNIT GRANTS IN FISCAL YEAR ENDED DECEMBER
31, 1995
==============================================================
Individual Grants Potential
Realizable
at
Assumed Annual Alternative to
Rates
of Stock (f) and (g):
Price
Appreciation Grant Date Value
for
Term
------------------------------------------------
- - -------------------- ----------------
Percent of
Total
Performance
Performance Units Granted Exercise
Units to Employees or Base
Grant Date
Granted in Fiscal Price Expiration
Present
(#)Year 1995 ($/Sh) Date 5% ($)
10% ($) Value ($)
Name (b) (c) (d) (e) (f)
(g) (h)
---- ----------- ------------- -------- ---------- ------
------- ----------
Alan E. Casnoff 0 0 $ 0 None N/A
N/A $ 0
Robert W. LoSchiavo 18,750 15.8 .39 None N/A
N/A 0
Joel Zbar 50,000 42.1 .39 None N/A
N/A 0
Joel Zbar 50,000 42.1 .29 None N/A
N/A 0
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AGGREGATED PERFORMANCE UNITS EXERCISED AND SURRENDERED
IN FISCAL YEAR ENDED DECEMBER 31, 1995
PERFORMANCE UNIT VALUES
=============================================================================
Number of Value of
Unexercised Unexercised
Performance Performance
Units at Fiscal Units at Fiscal
Year-End Year-End
Performance (#) ($)
Units --------------- ---------------
Exercised
or Value
Surrendered Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- - ------------------- ----------- -------- ------------- -------------
Ben S. Read, Jr. 50,000 $ -0- (1) 198,131 / 0 0/0
Alan E. Casnoff 50,000 7,500(2) 300,000 / 0 0/0
Robert W. LoSchiavo 18,750 7,219 15,000 / 0 0/0
Joel Zbar(2) 50,000 23,469 150,000 / 0 0/0
All others(3) 130,000 -0- 10,000 / 0 0/0
[FN]
- - --------------------------------------
(1) Mr. Read surrendered 50,000 performance units to the Company in
consideration of the Company's settlement of a legal matter in
which Mr. Read was personally named. As Mr. Read was under no
legal obligation to surrender these units, the Company considers
the value realized to be $0.
(2) Mr. Casnoff surrendered 50,000 performance units to the Company
in consideration of the issuance to him of 50,000 shares of the
Company's common stock which shares the Company valued at $7,500.
(3) Certain former officers of the Company whose employment terminated
during 1995 surrendered a total of 130,000 performance units to
the Company as part of their termination agreements.
[/FN]
8
In April, 1995 the Board of Directors authorized the issuance
of up to 450,000 shares of the Company's common stock as a special
incentive bonus. 50,000 of such shares were issued to each of
Messrs. Smithline, Rosenberg and Golden, 100,000 to Mr. Casnoff,
50,000 each to Messrs. Zbar and LoSchiavo and 25,000 to other
officers of the Company. In addition, Mr. Casnoff was issued
50,000 shares in exchange for his surrender of 50,000 performance
units.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the
Company is comprised of the independent directors, Messrs. Golden,
Rosenberg and Smithline. The purpose of the Compensation Committee
is to review compensation of the executive officers of the Company
to determinate if such compensation is in line with similar
organizations and to recommend and provide appropriate incentives
to key employees.
During 1995, in connection with the Company's efforts to
reduce overhead and expenses the Company did not replace certain
executive officer level positions which were vacated during 1995.
Instead, the responsibilities of those positions were merged into
the duties of the remaining executive officers without an increase
in compensation.
This report was furnished by Messrs. Golden, Rosenberg and
Smithline, all members of the Compensation Committee.
STOCK PERFORMANCE CHART
The following graph compares the yearly percentage change in
the cumulative total shareholder return on the Company's Common
Stock for each of the Company's last five fiscal years with the
Cumulative return (assuming reinvestment of dividends) of the Dow
Jones Equity Market Index and the Dow Jones Real Estate Investment
Index.
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
DVL, Inc. 100 31 67 111 25 6
Dow Jones Equity Market Index 100 91 90 100 91 130
Dow Jones Real Estate Market
Index 100 112 101 118 112 139
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- - --------------------------------------------------------
P&A Associates, a Pennsylvania general partnership of which
Mr. Casnoff, President and director of the Company, is a partner,
provided management services for certain properties located in
Philadelphia, Pennsylvania which are owned by partnerships
affiliated with the Company. During 1995 these properties were
transferred to unrelated parties and no management fees were paid
to P&A Associates. Further, since February 1992 the Company and
related entities have used a partner of Mr. Casnoff in P&A
Associates to perform legal services for the Company and affiliates
in connection with certain real estate transactions. Mr. Casnoff's
partner earned $2,775 in legal fees from the Company and affiliates
in 1995.
Certain officers and directors of the Company serve as
officers and directors of Kenbee, which was the Company's largest
debtor and previous manager, and control over which has been given
to Mr. Casnoff by virtue of certain voting trust agreements. Mr.
Casnoff, President of the Company and Kenbee, acquired sole voting
power over the shares of capital stock of R&M Holding, a Delaware
corporation and the sole stockholder of Kenbee, pursuant to the
terms of a Voting Trust Agreement, dated May 15, 1991, between R&M
Holding and Mr. Casnoff, as trustee. The shares subject to the
Agreement are owned by Roger D. Stern and Martin Wright, each a 50%
owner of the shares of capital stock of R&M Holding, and each a
former officer and director of the Company. The term of the
Agreement expires on January 1, 2000 as to 50% of the shares of
capital stock owned by Mr. Stern and on February 28, 2001 as to 50%
of the shares of capital stock owned by Mr. Wright.
Rosenthal & Rosenthal Inc., a commercial finance concern of
which Mr. Rosenberg, director of the Company, is Executive Vice
President, made a loan to the Company in 1990 in the aggregate
principal amount of $1,331,700, secured by the assignment of a
certain promissory note and mortgage executed in favor of the
Company. Regular payments of principal and interest on this loan
were made through September 1990. In 1992 the Company completed a
settlement in which this loan was exchanged for the assignment to
Rosenthal & Rosenthal, Inc. of a wraparound mortgage, certain
limited partnership units and options to acquire 600,000 shares of
the Company's common stock for $1.00 per share. Rosenthal &
Rosenthal, Inc. was also provided with a note with a face value of
$107,000 bearing interest at 10% per annum and 214,000 warrants to
purchase common stock for $1.00 per share which warrants would have
expired in April 1998. Rosenthal & Rosenthal, Inc. had an option
to return either the wraparound mortgage or the notes and warrants
within five years of the settlement. In February 1996, the
settlement agreement with Rosenthal & Rosenthal was amended
whereby the Company agreed to issue to Rosenthal & Rosenthal
warrants to purchase 800,000 shares of the Company's common stock
at $.50 per share in consideration of Rosenthal & Rosenthal's
surrender of all options to purchase common stock of the Company
for $1.00 and of the return of $107,000 of Company debentures
accompanied by 214,000 warrants to purchase the Company's common
10
stock at $1.00 per share. Rosenthal & Rosenthal's interests in the
promissory note and mortgage and in certain partnership units were
not effected by this amendment.
Since June 1992, the Company and affiliates have periodically
retained Fox, Rothschild, O'Brien & Frankel to perform certain
legal services in connection with various matters. Mr. Casnoff,
director and President, serves as Of Counsel to Fox, Rothschild,
O'Brien & Frankel. During 1995, the Company and affiliates
incurred $774 of fees for legal services rendered by this law firm.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: April 26, 1996
DVL, INC.
By:Robert LoSchiavo
_________________________
Robert LoSchiavo
Secretary
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