U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
(Mark One)
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-15799
GBI CAPITAL MANAGEMENT CORP.
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(Exact name of Registrant as specified in Its charter)
Florida 65-070248
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(State or other jurisdiction of incorporation or (I.R.S. Employer
organization Identification No.)
1055 Stewart Avenue, Bethpage, New York 11714
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(Address of Principal Executive Offices) (Zip Code)
(516) 470-1000
(Issuer's Telephone Number, Including Area Code
The Registrant hereby amends the following items, financial statements, exhibits
or other portions of its Annual Report on Form 10-K for the fiscal year ended
September 30, 2000 as set forth in the pages attached hereto:
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth the names, ages and positions of our
current directors, each of whom, with the exception of Kenneth Sperber, became a
director and was appointed to the position indicated upon the completion of our
merger with Gaines, Berland Inc. (now known as GBI Capital Partners, Inc.) on
August 24, 1999. Our directors are elected annually and serve until the next
annual meeting of stockholders.
Name Age Position
---- --- -------
Joseph Berland 60 Chairman of the Board, Chief Executive Officer
Richard J. Rosenstock 49 President, Chief Operating Officer, Director
Mark Zeitchick 35 Executive Vice President, Director
Vincent Mangone 35 Executive Vice President, Director
Benjamin D. Pelton 49 Director
Steven A. Rosen 55 Director
Kenneth Sperber 60 Director
Joseph Berland is the co-founder of GBI Capital Partners. He has served
as Chairman of the Board and Chief Executive Officer of GBI Capital Partners
since October 1983.
Richard Rosenstock joined GBI Capital Partners in 1986. He has served
as a director of GBI Capital Partners since January 1994. He has served as an
executive vice president of GBI Capital Partners from January 1994 until May
1998, at which time he became president of GBI Capital Partners.
Mark Zeitchick joined GBI Capital Partners in October 1993 and since
September 1995 he has served as an executive vice president.
Vincent Mangone joined GBI Capital Partners as a registered
representative in October 1993 and since September 1995 he has served as
executive vice president of GBI Capital Partners.
Benjamin D. Pelton is an attorney and has been a partner in the law
firm of Pelton, Balland, Young, Demsky, Baskin & O'Malie, P.C. since 1978.
Steven A. Rosen is a dentist and has been the owner and senior officer
of Unique Dental Care, a corporation which operates a multi-professional dental
practice, for more than the past five years.
Kenneth Sperber is a property manager for Warehouse Property
Management, Inc. and has been since March 1997. From 1991 through July 1996, he
was general manager of Elmhurst Dairy. Mr. Sperber was elected a director of the
Company in June 2000.
Other Executive Officers
Diane Chillemi, 42 years old, became our Chief Financial Officer upon
completion of our merger with GBI Capital Partners on August 24, 1999. Ms.
Chillemi joined GBI Capital Partners in February 1997 as its Director of Finance
and since July 1997 she has served as its Chief Financial Officer. She served as
an accounting manager at CT Legal Information Services, a service provider to
the legal community, from September 1996 until February 1997, was a consultant
to GBI Capital Partners from May 1996 until September 1996, and was a financial
services manager with Darby Group Co., Inc., a manufacturer and distributor of
generic drugs and medical supplies, from July 1984 until March 1996.
Key Employees
David Thalheim, 46 years old, became our Administrator and the
Administrator of GBI Capital Partners upon completion of our merger with GBI
Capital Partners on August 24, 1999. Since January 1991, Mr. Thalheim has been
the President of Imperial International Group, Inc., which has rendered
consulting services to GBI Capital Partners since 1993. From 1977 through 1990,
Mr. Thalheim served as Vice President and then President of Thalheim
Expositions, Inc., an independent trade show and exposition management company.
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Michael Avella, 46 years old, joined GBI Capital Partners as its chief
compliance officer in March 1994. Since May 1995 he has been the chief
information technology officer and since September 1996 has been Vice President
and Chief Operating Officer of GBI Capital Partners.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers, directors and persons who beneficially own more
than ten percent of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. These
reporting persons are also required to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, for the fiscal year
ended September 30, 2000, no person who is a director, officer or beneficial
owner of more than ten percent of the Company's outstanding Common Stock or any
other person subject to Section 16 of the Exchange Act failed to file on a
timely basis, reports required by Section 16(a) of the Exchange Act.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth the compensation paid by us during the
fiscal periods August 25, 1999 to September 30, 2000 (approximately 13 months)
and September 1, 1998 to August 24, 1999, for the Company's chief executive
officer and to our other four most highly compensated executive officers whose
compensation exceeded $100,000 for those fiscal periods.
SUMMARY COMPENSATION TABLE
Annual Long-Term All Other
Compensation Compensation Compensation
Fiscal ------------------------------ ------------- -------------
Name and Principal Position Year Salary ($) Bonus ($) Options (#)
--------------------------------------- ------ ---------- ----------- -------------
Joseph Berland 2000 130,000 1,780,372(1) 100,000 297,734(2)
Chairman of the Board and Chief 1999 233,058 56,404 407,838(3)
Executive Officer
Richard J. Rosenstock 2000 130,000 1,780,372(1) 236,746(2)
President and Chief Operating Officer 1999 217,672 63,761 100,000 407,838(3)
Mark Zeitchick 2000 130,000 2,482,017(1) 278,394(2)
Executive Vice President 1999 0 221,622 100,000 960,837(4)
Vincent Mangone 2000 130,000 2,482,017(1) 278,510(2)
Executive Vice President 1999 0 221,622 100,000 958,041(5)
Diane Chillemi 2000 144,519 50,000 15,000 0
Chief Financial Officer 1999 92,692 47,513 0 0
(Footnotes on following page)
3
(1) Represents bonuses paid under the Company's Annual Incentive Bonus Plan
and Special Performance Bonus Plan for fiscal 2000 as follows:
Annual Incentive ($) Special Performance ($)
-------------------- -----------------------
Berland 821,128 959,244
Rosenstock 821,128 959,244
Mangone 821,128 1,660,889
Zeitchick 821,128 1,660,889
(2) Represent commissions earned from customer accounts for which the named
officer is a designated account representative, together with override
commissions earned during the period August 25, 1999 through September
30, 1999 in the following amounts: Berland- $39,881, Rosenstock -
$39,841, Mangone- $67,925 and Zeitchick - $67,925.
(3) Represents override commissions.
(4) Represents $108,534 of commissions earned from customer accounts for
which Mr. Zeitchick is a designated account representative and $852,303
of override commissions.
(5) Represents $105,738 of commissions earned from customer accounts for
which Mr. Mangone is a designated account representative and $852,303
of override commissions.
Compensation Arrangements for Current Executive Officers and Key Employee
Messrs. Berland, Rosenstock, Zeitchick and Mangone currently are
employed by us pursuant to five-year employment agreements entered into on
August 24, 1999. These agreements may be terminated by the employee upon 30
days' notice to us. Each of these officers receive an annual base salary of
$120,000, subject to periodic increases at the discretion of our board of
directors or our Compensation Committee. The employment agreements provide that
each person is entitled to participate in our various incentive compensation
plans and provided for the grant of stock options to purchase 100,000 shares of
our common stock upon the consummation of our merger with GBI Capital Partners.
The employment agreements prohibit the employee from competing with us for one
year after employment terminates unless termination is by the employee for good
reason or if his employment is terminated by us without cause. The employment
agreements also provide that in the event of a change of control of our company,
other than with approval by our board of directors, each person shall be
entitled to receive a severance payment equal to all compensation due him under
the remaining term of his employment agreement in a lump sum payment.
During fiscal 2000, Diane Chillemi received a salary at the rate of
$135,000 per year and was awarded a bonus of $50,000.
David Thalheim, our Administrator, is a key employee and he
beneficially owns 8.3% of our outstanding common stock. Mr. Thalheim is employed
by us under a five-year employment agreement entered into on August 24, 1999.
This agreement is substantively identical to the employment agreements which we
have with Messrs. Berland, Rosenstock, Zeitchick and Mangone and which are
described above. In accordance with his agreement, on August 24, 1999 he was
granted ten-year options to purchase 100,000 shares of common stock at an
exercise price of 4.0625, vesting in four annual installments of 24,615 shares
on each of August 24, 1999, 2000, 2001, and 2002, and in a fifth installment of
1,540 shares on August 24, 2003. In fiscal 2000, Mr. Thalheim received a salary
of $130,000, a bonus of $821,128 under the Annual Incentive Bonus Plan and
$24,109 in commissions earned from customer accounts for which he is a
designated account representative. In addition, Mr. Thalheim's firm, Imperial
International Group, Inc., as the designee of Mr. Thalheim and a consultant to
GBI Capital Partners, received $750,793 under the Special Performance Bonus Plan
and additional fees of $36,557 for the period August 25, 1999 to September 30,
1999.
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Compensation Arrangements for Directors
Our directors receive no cash compensation for serving as directors,
although they are reimbursed for their costs incurred in attending meetings of
the board of directors or of the committees on which they serve. On December 20,
2000, each of Steven Rosen, Kenneth Sperber and Benjamin Pelton, our three
non-employee directors, were granted ten-year options to purchase 20,000 shares
of common stock at an exercise price of $2.125 per share, which options vested
immediately.
Option Grants
The following table represents the stock options granted in the fiscal
year ended September 30, 2000, to the Company's executive officers identified in
the Summary Compensation table above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential
Percent of Realizable Value
Total at Assumed
Number of Options Annual Rates of
Securities Granted to Exercise Stock Price
Underlying Employees Price of Appreciation for
Options in Fiscal Options Expiration Option Term(1) ($)
Name of Executive Granted (#) Year (%) ($) Date 5% 10%
-------------------------- -------------- ----------- ---------- ----------- ----------------------
Diane Chillemi 15,000(2) 1.4 3.00 12/12/09 28,301 71,718
(1) The above information concerning five per cent and ten per cent assumed
annual rates of compounded stock price appreciation is mandated by the
Securities and Exchange Commission. There is no assurance provided to
any executive officer or to any other optionee that there will be
appreciation of the stock price over the option term or that the
optionee will realize any gains with respect to the options.
(2) These options become exercisable as to 5,000 shares on each of December
13, 2000, 2001, and 2002.
The following table sets forth the fiscal year end option values of
outstanding options at September 30,2000, and the dollar value of unexercised,
in-the-money options for the Company's executive officers identified in the
Summary Compensation table above.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
Number of Securities Underlying Unexercised Options Dollar Value of Unexercised
at Fiscal Year End: in-the-Money Options at
Fiscal Year End
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Shares
Acquired
on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise Realized (#) (#) ($) ($)
-------- -------- ---------- ------------- -------------- ----------- --------------
Joseph Berland 44,754 55,246 -0- -0-
Richard J. 44,754 55,246 -0- -0-
Rosenstock
Mark Zeitchick 49,230 50,770 -0- -0-
Vincent Mangone 49,230 54,770 -0- -0-
Diane Chillemi 5,000 10,000 -0- -0-
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Annual Incentive Bonus Plan
On August 23, 1999 our stockholders adopted the Annual Incentive Bonus
Plan, which is a performance-based compensation plan for our executive officers
and other key employees. The plan is administered by our Compensation Committee
and is intended to comply with the regulations issued under Section 162(m) of
the Internal Revenue Code. Under this plan, bonuses are paid to participants
selected by our Compensation Committee if performance targets established by our
Compensation Committee are met within the specified performance periods. For the
fiscal year ended September 30, 2000, our Compensation Committee has determined
that participating employees will participate in a bonus pool equal to a
percentage of our net income before taxes and before the accrual of compensation
payable under this plan provided that the Company achieves a specified return on
equity before taxes at the end of the fiscal year. The maximum award payable
annually to any participant under this plan is limited to a percentage of the
bonus pool created and is subject to the maximum limit of $5,000,000 for any
person. Our Compensation Committee determined that the participants in this plan
for fiscal 2000 would be Messrs. Berland, Rosenstock, Zeitchick, Mangone and
Thalheim, who received bonuses in fiscal 2000 disclosed elsewhere in this
report. These same persons have been selected to participate in this plan for
fiscal 2001.
Special Performance Incentive Plan
On August 23, 1999 our stockholders adopted our Special Performance
Incentive Plan. The Special Performance Incentive Plan is similar in nature to
the Annual Incentive Bonus Plan in seeking to provide performance-based
compensation within the meaning of Section 162(m) of the Internal Revenue Code.
Executive officers and key employees selected by our Compensation Committee may
receive bonuses upon reaching performance targets established by our
Compensation Committee within specific performance periods, which performance
targets may be based upon one or more selected business criteria. For each of
the five fiscal years ending September 30, 2000 through 2004, the Compensation
Committee has determined that participants are entitled to receive an incentive
award that is based on the percentage of the retail and institutional brokerage
commissions generated by our company provided that specified commission levels
are achieved. Awards are payable monthly, based on the average monthly retail
and institutional commissions to such date. However, final awards reflecting the
performance for the last month of the fiscal year and the fiscal year overall
are not paid until all financial results for the year are reconciled and the
Compensation Committee has approved and certified that the established
performance requirements have been achieved. The maximum award payable for any
fiscal year to any participant is $5,000,000. At the present time, our
Compensation Committee has determined that Messrs. Berland, Rosenstock,
Zeitchick, Mangone and Thalheim shall participate in this plan.
1999 Performance Equity Plan
On August 23, 1999, our stockholders adopted the 1999 Performance
Equity Plan covering 3,000,000 shares of our common stock, under which officers,
directors, key employees and consultants of the Company are eligible to receive
incentive or non-qualified stock options, stock appreciation rights, restricted
stock awards, deferred stock, stock reload options and other stock based awards.
The Performance Equity Plan will terminate at such time no further awards may be
granted and awards granted are no longer outstanding, provided that incentive
options may only be granted until May 26, 2009. The plan is intended to comply
with the regulations issued under Section 162(m) of the Internal Revenue Code
and is administered by our Compensation Committee. To the extent permitted under
the provisions of the plan, the Compensation Committee has authority to
determine the selection of participants, allotment of shares, price, and other
conditions of awards.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of January 15,
2001, with respect to the Common Stock ownership of (i) those persons or groups
known to beneficially own more than 5% of our voting securities, (ii) each of
our directors, (iii) each current executive officer whose compensation exceeded
$100,000 in the fiscal year ended September 30, 2000, and (iv) all of our
current directors and executive officers as a group. Beneficial ownership is
determined in accordance with Rule 13d-3 under the Securities Exchange Act of
1934. The information concerning the stockholders is based upon information
furnished to us by such stockholders or otherwise known to us. Except as
otherwise indicated, all of the shares of Common Stock are owned of record and
beneficially and the persons identified have sole voting and investment power
with respect thereto.
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Amount and Nature of Percent of Class
Name of Beneficial Owner Beneficial Ownership of Voting Securities
------------------------ -------------------- --------------------
Joseph Berland(1) 3,989,814(2) 21.2%
Richard J. Rosenstock(1) 3,989,814(2) 21.2%
Mark Zeitchick(1) 1,561,503(3) 8.3%
Vincent Mangone(1) 1,561,503(3) 8.3%
David Thalheim(1) 1,561,503(3) 8.3%
Diane Chillemi 26,917(4) *
Steven A. Rosen 40,000(5) *
Benjamin D. Pelton 40,000(5) *
Kenneth Sperber 26,500(6) *
All directors and executive 11,236,051(7) 58.8%
officers as a group (8 persons)
--------------------
* Less than 1 percent
(1) The business address for each of Messrs. Berland, Rosenstock,
Zeitchick, Mangone and Thalheim is 1055 Stewart Avenue, Bethpage, New
York 11714.
(2) Includes 44,754 shares of common stock issuable upon exercise of
currently exercisable options. Does not include 55,246 shares of common
stock issuable upon exercise of options which are not currently
exercisable and will not become exercisable within the next 60 days.
(3) Includes 49,230 shares of common stock issuable upon exercise of
currently exercisable options. Does not include 50,770 shares of common
stock issuable upon exercise of options which are not currently
exercisable and will not become exercisable within the next 60 days.
(4) Includes 5,000 shares of common stock issuable upon exercise of
currently exercisable options. Does not include 10,000 shares of common
stock issuable upon exercise of options which are not currently
exercisable and will not become exercisable within the next 60 days.
(5) Includes 40,000 shares of common stock issuable upon exercise of
currently exercisable options.
(6) Includes 20,000 shares of common stock issuable upon exercise of
currently exercisable options.
(7) Includes 292,968 shares of common stock issuable upon exercise of
currently exercisable options. See notes (2) through (6).
In connection with our merger with GBI Capital Partners, each of
Messrs. Berland, Rosenstock, Zeitchick, Mangone and Thalheim entered into
lock-up agreements which prohibit the sale or transfer of the shares of common
stock they received in the merger until August 23, 2001, without the prior
consent of our Board of Directors. In addition, Ms. Chillemi has entered into a
similar lock-up agreement except that the restricted period may be extended if
she then has any liability to GBI Capital Partners resulting from her actions.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Several members of the immediate families of some of our executive
officers and directors are employed as registered representatives of GBI Capital
Partners. As such they receive a percentage of commissions generated from
customer accounts for which they are designated account representatives and are
eligible to receive bonuses in the discretion of management. Each received the
compensation listed below in fiscal 2000 and is expected to receive in excess in
excess of $60,00 in compensation in fiscal 2001. These registered
representatives are as follows:
Officer and Fiscal 2000
Registered Representative Relationship Director Compensation
------------------------- ------------ -------------- -------------
Richard Berland Brother Joseph Berland $206,469
Oscar Sonkin Father-in-law Richard Rosenstock $114,745
Richard Sonkin Brother-in-law Richard Rosenstock $613,089
Steven Zeitchick Brother Mark Zeitchick $415,061
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant cause this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 29, 2001 GBI CAPITAL MANAGEMENT CORP.
By: /s/ Joseph Berland
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Joseph Berland, Chairman and Chief
Executive Officer
By: /s/ Richard Rosenstock
-----------------------------------
Richard Rosenstock, President
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