U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-KSB/A
(Mark One)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
or
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 0-21467
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DRIVERSSHIELD.COM CORP.
(Formerly First Priority Group
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(Name of small business issuer in its charter)
NEW YORK 11-2750412
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 East Bethpage Road
Plainview, New York 11803
-------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (516) 694-1010
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock par value $.015 per share
Preferred Stock Purchase Rights par value $.01 per share
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
|_|
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. |_|
State the issuer's revenues for its most recent fiscal year $14,451,000
The aggregate market value of the issuer's voting stock held by
non-affiliates of the issuer as of April 30, 2001, based upon the closing price
on the date thereof is 8,979,870.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of April 30, 2001, the issuer had outstanding a total of 10,696,988
shares.
DOCUMENTS INCORPORATED BY REFERENCE:
Part III of this Form 10-KSB is hereby incorporated by reference to the
Definitive Proxy or Definitive Information Statement issued by the Company for
the Notice of the Annual Meeting of Shareholders.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
THE REMAINING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.
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Part III
Item 9. Executive Officer and Directors
Each member of our board of directors serves for staggered three-year
terms and until his or her successor is duly elected and qualified. Our
executive officers and directors are as follows:
Name Age Position
- ---- --- --------
Barry Siegel ............................ 50 Chairman of the Board, Secretary, Chief Executive Officer
Barry J. Spiegel ........................ 52 Director, President of Automotive Discounts and Services
Division (driversshield.com ADS Corp)
Gerald M. Zutler ........................ 62 President and Chief Operating Officer
Philip B. Kart .......................... 51 Chief Financial Officer and Principal Accounting Officer
Kenneth J. Friedman ..................... 57 Director
R. Frank Mena ........................... 42 Director
Barry Siegel has served as one of our directors and our Secretary since we
were incorporated. He has served as our Treasurer since January 1998, as our
Chief Executive Officer and Chairman of the Board since November 1997.
Previously, he served as our Chairman of the Board, Co-Chief Executive Officer,
Treasurer, and Secretary from August 1997 through November 1997. From October
1987 through August 1997, he served as our Co-Chairman of the Board, Co-Chief
Executive Officer, Treasurer, and Secretary. He has served for more than five
years as Treasurer and Secretary of National Fleet Service, Inc., now known as
driversshield.com FS Corp., one of our wholly-owned subsidiaries.
Barry J. Spiegel has served as President of driversshield.com ADS Corp.
since September 1996. He served as President of American International Insurance
Associates, Inc. from January 1996 through August 1996. For more than five years
prior to August 1996, Mr. Spiegel served as Senior Vice President at American
Bankers Insurance Group, Inc.
Gerald M. Zutler has served as our President and Chief Operating Officer
since March 1998. Between 1997 and 1998, Mr. Zutler was a private consultant.
From 1993 through 1996, Mr. Zutler was President of Lockheed Martin Canada.
Philip Kart has served as Chief financial Officer since October 2000. From
February 1998 through September 2000, he was Vice President and Chief financial
Officer of Forward Industries, Inc., a Nasdaq SmallCap listed company, and prior
to that, from March 1993 to December 1997, Chief Financial Officer of Ongard
Systems, Inc. Mr. Kart has also held financial management positions with
Agrigenetics Corporation, Union Carbide and was with the accounting firm Price
Waterhouse Coopers. Mr. Kart is a CPA.
Kenneth J. Friedman has served as a director of drriversshield.com Corp
since October 1998. Mr. Friedman has for more than five years served as
President of the Primary Group, Inc., an executive search consultant.
R. Frank Mena has served as our director since May 1999. Mr. Mena is both
a technologist and developer by background. He was a founder, Executive Vice
President and Chief Technology Officer of Cheyenne Software. He currently acts
as a consultant in the computer systems industry.
Compensation of Directors
We do not pay our directors for serving on our board. Our 1995 Stock
Incentive Plan does, however, provide that when they are elected to the board
and every anniversary thereafter as long as they serve, our non-employee
directors are to be granted non-statutory stock options to purchase 15,000
shares of our stock.
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Item 10. Executive Compensation
The following table summarizes the compensation we paid or compensation
accrued for services rendered for the years ended December 31, 1998, 1999, and
2000, for our Chief Executive Officer and each of the other most highly
compensated executive officers who earned more than $100,000 in salary and bonus
for the year ended December 31, 2000:
Summary Compensation Table
Annual Compensation
Securities
Underlying
Name and Position(s) Year Salary ($) Options (#) Bonus ($)
- -------------------- ---- ---------- ----------- ---------
Barry Siegel 2000 $276,492 200,000 $0
Chairman of the Board of Directors, 1999 $215,385 1,100,000 $0
Treasurer, Secretary and Chief Executive Officer 1998 $279,423 500,000 $0
Gerald Zutler 2000 $145,540 150,000 $0
President 1999 $137,211 415,000 $0
1998 $ 98,340 0 $0
Barry J. Spiegel 2000 $122,154 150,000 $0
President, driversshield.com ADS Corp. 1999 $104,249 330,000 $0
1998 $104,499 250,000 $0
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
We are party to an employment agreement with Barry Siegel that commenced
on July 1, 1998, and expires on December 31, 2001. Mr. Siegel's annual salary is
$300,000. His employment agreement provides that following a change of control
(as defined in the agreement), we will be required to pay Mr. Siegel (1) a
severance payment of 300% of his average annual salary for the past five years,
less $100, (2) the cash value of his outstanding but unexercised stock options,
and (3) other perquisites should he be terminated for various reasons specified
in the agreement. The agreement specifies that in no event will any severance
payments exceed the amount we may deduct under the provisions of the Internal
Revenue Code.
We are party to an employment agreement with Gerald M. Zutler that
commenced on July 1, 1998, and expires on June 30, 2001. Mr. Zutler's annual
salary is $150,000. His employment agreement contains a change in control
provision that mirrors that in Mr. Siegel's employment agreement, except that
the applicable percentage for severance payment purposes is 200%. Mr. Zutler
also participates in our Corporate Compensation Program.
We are party to an employment agreement with Barry J. Spiegel that
commenced on July 1, 1998, and expires on June 30, 2001. Mr. Spiegel's annual
salary is $130,000 per annum. Mr. Spiegel also participates in our Corporate
Compensation Program. His employment agreement provides that following a change
in control (as defined in the agreement), all stock options previously granted
to him will immediately become fully exercisable.
In early 1999, each of the above-mentioned executives voluntarily agreed
to a reduction in his annual salary, with the other terms of his employment
agreement remaining unaffected. Mr. Siegel's salary was reduced by $100,000, Mr.
Zutler's by $15,000, and Mr. Spiegel's by $30,000. In consideration for these
salary reductions, we granted Mr. Siegel, Mr. Zutler, and Mr. Spiegel options to
purchase 100,000, 15,000, and 30,000 shares of our common stock, respectively.
In 2000 the salaries of the above-mentioned executives were returned to their
original levels.
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Stock Options
We have awarded the following options under our 1995 Incentive Stock Plan
stock during the last fiscal year to the executive officers named in the summary
compensation table:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Number of % of Total
Securities Underlying Options/SARs Granted to Exercise of Base Expiration
Name Options/SARs Granted Employees in Fiscal Year Price ($/Share) Date
- ---- -------------------- ------------------------ --------------- ----
Barry Siegel 200,000 14.9% $0.34 12/27/05
Gerald M. Zutler 150,000 11.2% $0.31 12/27/05
Barry J. Spiegel 150,000 11.2% $0.31 12/27/05
- ----------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE TABLE
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquired Value Options/SARs at FY-End Options/SARs at FY-End
Name on Exercise (#) Realized ($) (Exercisable/Unexercisable) (Exercisable/Unexercisable)
- ---- --------------- ------------ --------------------------- ---------------------------
Barry Siegel 899,999 $3,142,997 366,667/133,333 $19,500/0
Gerald M. Zutler None - 465,000/100,000 $19,125/0
Barry J. Spiegel 163,333 $570,500 233,333/83,333 $19,125/0
Item 11. Principal Shareholders
The following table provides information about the beneficial ownership of
our common stock as of December 31, 2000. We have listed each person who
beneficially owns more than 5% of our outstanding common stock, each of our
directors and executive officers identified in the summary compensation table,
and all directors and executive officers as a group. Unless otherwise indicated,
each of the listed shareholders has sole voting and investment power with
respect to the shares beneficially owned.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Name and Address of Amount and Nature of Percentage of
Title of Class Beneficial Owner Beneficial Owner Common Stock (1)
- -------------- ---------------- ---------------- ----------------
Common Stock Michael Karpoff and 907,052 (2) 8.4%
Patricia Rothbardt
32 Gramercy Park South
New York, NY 10010
(1) The percentages have been calculated in accordance with Instruction 3 to
Item 403 of Regulation S-B.
(2) Includes options to purchase 100,000 shares exercisable within 60 days.
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SECURITY OWNERSHIP OF MANAGEMENT
Name and Address of Amount and Nature of Percentage of
Title of Class Beneficial Owner Beneficial Owner Common Stock (1)
- -------------- ---------------- ---------------- ----------------
Common Stock Barry Siegel 2,284,400 (2)(3)(4) 20.6%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Lisa Siegel c/o Siegel 2,284,400 (2)(3)(4) 20.6%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Gerald M. Zutler 666,000 (5) 5.97%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Barry J. Spiegel 967,842 (6) 8.85%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Philip Kart 25,000 (9) .23%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Kenneth J. Friedman 155,000 (7) 1.43%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock R. Frank Mena 78,000 (8) .72%
c/o driversshield.com Corp.
51 East Bethpage Road
Plainview, NY 11803
Common Stock Directors & Officers as a 4,188,242 35.0%
group
- --------------------------------------------------------------------------------
(1) The percentages have been calculated in accordance with Instruction 3 to
Item 403 of Regulation S-B.
(2) Includes 3,334 shares held by Barry Siegel as custodian for two nephews
and 67 shares held directly by Barry Siegel's wife, Lisa Siegel. Both
Barry and Lisa Siegel disclaim beneficial ownership of shares held by the
other.
(3) Includes options held by Barry Siegel to purchase 366,667 shares of common
stock exercisable within 60 days.
(4) Includes exercisable options held by Lisa Siegel to purchase 33,333 shares
of common stock within 60 days.
(5) Includes options to purchase 465,000 shares of common stock exercisable
within 60 days.
(6) Includes options to purchase 233,333 shares of common stock exercisable
within 60 days.
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(7) Includes options to purchase 45,000 shares of common stock exercisable
within 60 days.
(8) Includes options to purchase 78,000 shares of common stock exercisable
within 60 days.
(9) Includes options to purchase 25,000 shares of common stock exercisable
within 60 days.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
driversshield.com Corp
By: /s/ Barry Siegel
---------------
Barry Siegel
Chairman of the Board of Directors,
Treasurer, Secretary,
Chief Executive Officer
Date: April 30, 2001
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Barry Siegel Date: April 30, 2001
-----------------------
Barry Siegel
Chairman of the Board of Directors,
Treasurer, Secretary,
Chief Executive Officer,
Principal Accounting Officer
By: /s/ Barry J. Spiegel Date: April 30, 2001
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Barry J. Spiegel
President
Driver's Shield, Inc.
Director
/s/ Philip Kart
-----------------------
Philip Kart Date: April 30, 2001
Chief Financial Officer
By: /s/ Kenneth J. Friedman Date: April 30, 2001
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Kenneth J. Friedman
Director
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By: /s/ R. Frank Mena Date: April 30, 2001
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R. Frank Mena
Director