<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TRAVIS BOATS & MOTORS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
TRAVIS BOATS & MOTORS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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TRAVIS BOATS & MOTORS, INC.
----------------
Notice of Annual Meeting of Shareholders
March 26, 1997
----------------
To the Shareholders of Travis Boats & Motors, Inc.:
Notice is hereby given that the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of Travis Boats & Motors, Inc. (the "Company") will be held
on March 26, 1997, at 11:00 a.m. Central Standard Time, at the Omni Hotel,
which is located at 701 Brazos Street, Austin, Texas, for the purpose of
considering and acting upon the following matters:
(1) To elect two directors to hold office in accordance with the
Company's Bylaws;
(2) To ratify the appointment of Ernst & Young, LLP as the Company's
independent accountants and auditors for the 1997 fiscal year; and
(3) To consider and act upon any matter incident to the foregoing
purposes and transact such other business as may properly come before the
meeting or any adjournments thereof.
The record date for the meeting has been established to be February 17,
1997. Only shareholders of record at the close of business on that date will
be entitled to notice of and to vote at, the Annual Meeting or any
adjournments thereof. You are cordially invited to attend the Annual Meeting.
Shareholders wishing to attend the Annual Meeting should bring proper
identification and evidence of their ownership of shares in the Company's
voting securities.
EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE STILL REQUESTED TO
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED,
STAMPED ENVELOPE. IF YOU ATTEND, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN
THOUGH YOU HAVE SENT IN YOUR PROXY.
By Order of the Board of Directors
/s/ Michael B. Perrine
-------------------------------------
Michael B. Perrine, Secretary
February 21, 1997
<PAGE>
TRAVIS BOATS & MOTORS, INC.
13045 RESEARCH BLVD.
AUSTIN, TEXAS 78750
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
----------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished by the Board of Directors of Travis Boats
& Motors, Inc., a Texas corporation (the "Company"), in connection with the
solicitation of proxies on behalf of the Company for use at the Annual Meeting
of Shareholders to be held Wednesday, March 26, 1997 (the "Meeting") at the
Omni Hotel, 701 Brazos Street, Austin, Texas and at any adjournment thereof.
When properly executed proxies in the accompanying form are received, the
shares represented thereby will be voted at the meeting in accordance with the
directions noted thereon. If no direction is indicated, such shares will be
voted for the election of the directors and the appointed auditors, as set
forth in the Notice of Annual meeting attached to this Proxy Statement.
Management does not intend to present any business for a vote at the Meeting
other than the matters set forth in the accompanying Notice of Annual Meeting,
and it has no information that others will do so. If other matters requiring
the vote of the shareholders properly come before the Meeting, it is the
intention of the persons named in the attached form of proxy to vote the
proxies held by them in accordance with their judgment on such matters.
Any shareholder giving a proxy has the power to revoke that proxy at any
time before it is voted. A proxy may be revoked by filing with the Secretary
of the Company either a written revocation or a duly executed proxy bearing a
date subsequent to the date of the proxy being revoked. Any shareholder may
attend the Meeting and vote in person, whether or not such shareholder has
previously submitted a proxy.
In addition to soliciting proxies by mail, officers and regular employees of
the Company may solicit the return of proxies personally or by telephone.
Brokerage houses and other custodians, nominees and fiduciaries may be
requested to forward solicitation material to the beneficial owners of stock.
The Company will bear the cost of preparing, printing, assembling and
mailing the Notice of Annual Meeting, this Proxy Statement, the enclosed form
of proxy and any additional material, as well as the cost of forwarding
solicitation material to and soliciting proxies from the beneficial owners of
stock.
This Proxy Statement and the accompanying form of proxy are first being sent
or given to the Company's shareholders on or about February 21, 1997.
VOTING SECURITIES
The record date for determining shareholders entitled to notice of and to
vote at the Meeting is the close of business on February 17, 1997. On that
date there were 4,136,506 issued and outstanding shares of the Company's $.01
par value Common Stock ("Common Stock"), held of record by 37 persons. The
Common Stock is the Company's only class of voting securities outstanding.
Each share of the Company's Common Stock is entitled to one vote for the
election of directors and in any other matter that may be acted upon at the
Meeting. The Company's Articles of Incorporation do not permit cumulative
voting.
ADDITIONAL INFORMATION
The Company shall provide without charge to each shareholder of the Company
upon the written request of such shareholder a copy of the Company's annual
report on Form 10-K, without exhibits but including the
<PAGE>
financial statements and the financial statement schedules, required to be
filed with the Securities and Exchange Commission pursuant to Rule 13a-1 under
the Securities Exchange Act of 1934, as amended, for the Company's most recent
fiscal year. The Company also shall provide without charge by first class or
other equally prompt means within one business day of receipt of a written or
oral request from a person to whom this proxy statement is delivered a copy of
any and all information that has been incorporated herein by reference.
Shareholders should address such requests to Michael B. Perrine, Chief
Financial Officer, 13045 Research Boulevard, Austin, Texas 78750.
ELECTION OF DIRECTORS
The Company's Bylaws provide that the affairs of the Company shall be
conducted by a Board of Directors composed of seven members and empower the
Board to increase or decrease the number of directors by resolution adopted by
a majority of the Board. The Board in its discretion and in accordance with
such authority has fixed its size at seven members. The Board of Directors is
divided into three classes, designated as Class A, Class B and Class C. The
members of each class of directors serve for staggered three-year terms.
Messrs. Bohls and Simpson are currently Class A directors and are to stand for
reelection at the 1997 annual stockholders' meeting. Messrs. Spradling,
Gurasich and McClendon are currently Class B directors and will stand for
election at the 1998 annual stockholders' meeting. Messrs. Walton and Siddons
are currently Class C directors and will stand for election at the 1999 annual
stockholders' meeting. The directors elected at the 1997 annual stockholders'
meeting will hold office until the 2000 annual stockholders' meeting or until
such director's successor shall be elected or appointed. The affirmative vote
of a plurality of holders of the outstanding shares of Common Stock
represented at a meeting at which a quorum is present is required to elect
each director nominee.
The persons whose names are set forth as proxies in the enclosed form of
proxy will vote all shares over which they have control "FOR" the election of
the Board of Directors' nominees unless otherwise directed. Although the Board
of Directors of the Company does not contemplate that either of the nominees
will be unable to serve, if such a situation should arise prior to the
Meeting, the appointed proxies will use their discretionary authority pursuant
to the proxy and vote in accordance with their best judgment. The affirmative
vote of a plurality of holders of the outstanding shares of Common Stock
represented at a meeting at which a quorum is present is required to elect
each director nominee.
NOMINEES FOR DIRECTOR
E. D. Bohls has served as Vice Chairman of the Board of the Company since
1995 and previously served as Chairman of the Board of the Company from 1979
to 1995. He has served as Chairman of the Board of Capitol Commerce Reporter,
Inc., a public records research company, since 1986. In addition, he has
served as Vice President and as a director of Americana Enterprises, a private
real estate development joint venture, since 1975.
Joseph E. Simpson has served as a director of the Company since 1979. He has
served as President and as a director of Capitol Commerce Reporter, Inc., a
records research company, since 1986.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF BOTH OF THE
INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to each
director and each executive officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Mark T. Walton(1)(2)................. 45 Chairman of the Board and President
Ronnie L. Spradling(1)............... 53 Executive Vice President--New Store
Development and Director
Chief Financial Officer, Treasurer and
Michael B. Perrine................... 33 Secretary
E. D. Bohls(1)(2).................... 78 Vice Chairman of the Board
Joseph E. Simpson(1)(2)(3)........... 63 Director
Robert C. Siddons(1)(2)(4)........... 54 Director
Steven W. Gurasich, Jr.(3)(4)........ 48 Director
Zach McClendon, Jr.(3)(4)............ 59 Director
</TABLE>
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(1) Member of the Nominations Committee.
(2) Member of the Executive Committee
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
Mark T. Walton has served as President and as a director of the Company
since 1980 and as Chairman of the Board since 1995. From 1979 to 1980, Mr.
Walton served as the General Manager of the Company's Austin store. Mr. Walton
has over 26 years of retail boating experience.
Ronnie L. Spradling has served as Executive Vice President of the Company
since 1989 and as the Executive Vice President of New Store Development since
1994. Mr. Spradling became a director in 1995. Mr. Spradling previously served
as the General Manager of Falcon Marine, Inc. (a subsidiary of the Company),
located in Midland, Texas from 1982 to 1988. Mr. Spradling has over 29 years
of experience in boat retailing operations.
Michael B. Perrine has served as Chief Financial Officer since 1991 and as
Treasurer and Secretary of the Company since 1992. From 1986 to 1991, he
served as a loan officer in the Commercial Banking Division of NationsBank,
N.A. Mr. Perrine is responsible for developing and implementing the Company's
corporate structure.
E. D. Bohls has served as Vice Chairman of the Board of the Company since
1995 and previously served as Chairman of the Board of the Company from 1979
to 1995. He has served as Chairman of the Board of Capitol Commerce Reporter,
Inc., a public records research company, since 1986. In addition, he has
served as Vice President and as a director of Americana Enterprises, a private
real estate development joint venture, since 1975.
Joseph E. Simpson has served as a director of the Company since 1979. He has
served as President and as a director of Capitol Commerce Reporter, Inc., a
records research company, since 1986.
Robert C. Siddons has served as a director of the Company since 1979. He has
served as President of Frank Siddons Insurance Agency, a family-owned
insurance agency, since 1987. In addition, he has served as President of the
Texas Builders Insurance Company, a commercial lines insurance company, since
1987.
Steven W. Gurasich, Jr. has served as director of the Company since July
1996. For over the past 20 years, Mr. Gurasich has served in various
capacities, including most recently as Chairman of the Board of GSD&M
Advertising, Austin, Texas, an advertising firm, handling such accounts as
Southwest Airlines, Wal-Mart, MasterCard, Coors Light and Pearle Vision.
Zach McClendon, Jr. has served as a director of the Company since July 1996.
Mr. McClendon is the co-founder of the predecessor to SeaArc Marine, Inc., a
manufacturer of various types of boats and marine products,
3
<PAGE>
and now serves as the Chairman of the Board of its parent company, SeaArk
Boats, Inc. In addition, Mr. McClendon serves as the Chairman of the Board of
Union Bank and Trust Company, a subsidiary of First Union Financial
Corporation, and as Chairman of the Board of Drew Cottonseed Oil Mill, Inc., a
manufacturer of polystyrene products.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of February 15, 1997 by (i) each director of
the Company, (ii) each Named Executive Officer, (iii) each person known or
believed by the Company to own beneficially 5% or more of the Common Stock and
(iv) all directors and executive officers as a group. Unless otherwise
indicated, each person has sole voting and dispositive power with respect to
such shares.
<TABLE>
<CAPTION>
PERCENT
NUMBER OF BENEFICIALLY
NAME OF BENEFICIAL OWNER SHARES(1)(2) OWNED
------------------------ ------------ ------------
<S> <C> <C>
E. D. Bohls(3).................................... 660,627 16.0%
Robert C. Siddons(4).............................. 434,068 10.5%
Mark T. Walton(5)................................. 371,521 9.0%
Joseph E. Simpson................................. 326,524 7.9%
Ronnie L. Spradling(6)............................ 242,030 5.8%
Steve Gurasich(7)................................. 13,333 *
Zach McClendon(8)................................. 13,333 *
Michael B. Perrine(9)............................. 20,800 *
All executive officers and directors as a group
(eight persons)(10).............................. 2,092,236 49.93%
</TABLE>
- --------
* Less than 1%
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock
shown as beneficially owned by them. Beneficial ownership as reported in
the above table has been determined in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
based on information furnished by the persons listed, and represents the
number of shares of Common Stock for which a person, directly or
indirectly, through any contract, management, understanding, relationship
or otherwise, has or shares voting power, including the power to vote or
direct the voting of such shares, or investment power, including the power
to dispose or to direct the disposition of such shares, and includes
shares which may be acquired upon the exercise of options within 60 days
following February 21, 1997. The percentages are based upon 4,136,506
shares outstanding. Except as otherwise noted below, the address of each
holder of 5% or more of the Common Stock is 13045 Research Boulevard,
Austin, Texas 78750.
(2) Does not include options granted to Mark T. Walton, Ronnie L. Spradling
and Michael B. Perrine to purchase 16,214, 37,546 and 53,334 shares of
Common Stock, respectively, which are not exercisable until more than 60
days after February 21, 1997.
(3) Includes 148,412 shares owned by Mr. Bohls' son, James Bohls, with respect
to which Mr. E. D. Bohls controls the voting rights. Mr. E. D. Bohls
disclaims beneficial ownership of such shares. Also includes 50,816 shares
held by trusts for the benefit of James Bohls' children of which James
Bohls serves as trustee, but all voting rights have been retained by Mr.
E. D. Bohls.
(4) Includes 19,202 shares held by family trusts over which Mr. Siddons
exercises sole voting and investment control.
(5) Includes 4,053 shares subject to options exercisable within 60 days of
February 21, 1997, 301,000 shares held in a family limited partnership,
over which Mr. Walton has sole voting control, and 3,268 shares owned and
held in trust for Mr. Walton's children, for which the voting rights
reside with Mr. Walton.
(6) Includes 9,387 shares subject to options exercisable within 60 days of
February 21, 1997.
(7) Includes 13,333 shares subject to options exercisable within 60 days of
February 21, 1997.
4
<PAGE>
(8) Includes 13,333 shares subject to options exercisable within 60 days of
February 21, 1997.
(9) Includes 13,333 shares subject to options exercisable within 60 days of
February 21, 1997.
(10) See Notes (5), (6), (7), (8) and (10). Includes 53,439 shares subject to
options exercisable within 60 days of February 21, 1997.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met five times during fiscal year 1996. During such
twelve-month period, each incumbent director of the Company attended 75% or
more of the aggregate number of (a) meetings of the Board of Directors held
during his tenure and (b) meetings held by committees of the Board on which he
served.
COMMITTEES
Executive Committee. The Executive Committee is currently comprised of Mark
T. Walton, Robert C. Siddons, Joseph E. Simpson and E. D. Bohls, and possesses
all of the powers of the Board of Directors between meetings of the Board,
except for certain matters that may not be delegated under the Company's
Bylaws. The Executive Committee met three times during fiscal year 1996.
Compensation Committee. The duties of the Compensation Committee include the
approval of officers' salaries and administration of the Company's 1995
Incentive Plan. The Compensation Committee is comprised of "disinterested"
directors, as defined under Section 16 of the 1934 Act, and currently consists
of Messrs. Siddons, Gurasich and McClendon. The Compensation Committee met two
times during fiscal year 1996.
Nominations Committee. The Nominations Committee is responsible for
recommending to the Board of Directors those persons who will be nominated as
the Board of Director's nominees for positions on the Board of Directors. The
Nominations Committee is comprised of Messrs. Walton, Spradling, Bohls,
Simpson, and Siddons. The Nominations Committee met three times during fiscal
year 1996. The Nominations Committee will consider nominations made by
shareholders. Nominations made by a shareholder must be made by giving notice
of such in writing to the Secretary of the Company before the later to occur
of (i) 60 days prior to the date of the meeting of shareholders called for the
election of directors or (ii) 10 days after the Board of Directors first
publishes the date of such meeting. Such notice shall include all information
concerning each nominee under the 1934 Act. Such notice shall also include a
signed consent of each nominee to hold office until the next Annual Meeting or
until his successor is elected or appointed.
Audit Committee. The Audit Committee annually recommends to the Board of
Directors the appointment of independent certified accountants as auditors for
the Company, discusses and reviews fees for the prospective annual audit,
reviews the results with the auditors, reviews the Company's compliance with
its existing accounting and financial policies, reviews the adequacy of the
financial organization of the Company and considers comments by auditors
regarding internal controls and accounting procedures and management's
response to those comments. Messrs. Simpson, Gurasich and McClendon currently
serve on this Committee. This Committee met three times in fiscal year 1996.
COMPENSATION OF DIRECTORS
Prior to July 1996, the Company paid directors' fees of $1,500 per month to
each director, whether or not such director was an officer or employee of the
Company. In July 1996 the Company amended its policy to provide that directors
who are not officers and employees of or consultants to the Company will
receive annual compensation of $10,000, plus $2,000 annually for each
committee on which such director serves, excluding the Nominations Committee,
for which compensation will not be received, and $3,000 per year in the case
of the Executive Committee. Directors' expenses for attending meetings are
reimbursed by the Company. Mr. Gurasich and Mr. McClendon, who became
directors of the Company in July 1996, also received options to purchase
13,333 shares of the Company's common stock at an exercise price of $9.00 per
share.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
compensation awarded to, earned by or paid for services rendered to the
Company in all capacities during the fiscal years ended September 30, 1996,
September 30, 1995 and December 31, 1994, with respect to the Company's
President, Mr. Walton and the Executive Vice President, Mr. Spradling
(collectively, the "Named Executive Officers"). No other executive officers of
the Company received annual compensation (including salary and bonuses earned)
which exceeded $100,000 during the fiscal year ended September 30, 1996.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION OPTIONS
---- ------------------ ----------- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton.......... President 1996 $129,250 $45,034 $ 4,177(2) --
1995(1) 108,000 45,000 -- 20,267
1994 84,325 22,200 12,720(3) --
Ronnie L. Spradling..... Executive Vice 1996 $ 96,900 $45,034 $ 1,578(2) --
President 1995(1) 69,000 45,000 -- 46,933
1994 72,750 35,276 3,360(3) --
</TABLE>
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(1) Fiscal year 1995 was a nine-month period; dollar amounts shown have been
annualized.
(2) Principally 401(k) plan matching contribution.
(3) Board of Directors' fees.
OPTIONS GRANTED IN LAST FISCAL YEAR
The Company did not grant any options to the Named Executive Officers during
the fiscal year ended September 30, 1996.
STOCK OPTION EXERCISES AND HOLDINGS
The following table shows information regarding stock option exercises and
unexercised options held as of the end of the fiscal year ended September 30,
1996 by the Named Executive Officers.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1996
-----------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS OPTIONS
------------------------- ---------------------------
OPTIONS
NAME* EXERCISED* EXERCISABLE UNEXERCISABLE EXERCISABLE* UNEXERCISABLE*
----- ---------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Mark Walton............. 0 4,053 16,214 $28,878 $115,525
Ronnie L. Spradling..... 0 9,387 37,546 $66,882 $267,515
</TABLE>
- --------
* Based on closing price of $12.375 on September 30, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reinsurance Arrangements. The Company, through June 28, 1996, sold extended
service contracts to its customers. The obligations of the Company under these
contracts were transferred to Ideal Insurance Company, Ltd. ("Ideal") pursuant
to an agreement between the Company and Ideal dated as of January 1, 1994.
Ideal reinsures these risks with Amerisure Property & Casualty, Ltd.
("Amerisure"), a company wholly owned by certain principal stockholders of the
Company, with Messrs. E. D. Bohls, Siddons, Walton and Simpson owning an
aggregate of approximately 76%. These contracts are administered by First
Extended Service Corporation ("FESC") and are reinsured under a stop-loss
policy issued to Amerisure by FFG Insurance Co. ("FFG"), an affiliate of FESC.
In conjunction with these arrangements, the Company paid an agreed amount for
each extended service contract which is insured and, in the event of claims
under any extended service contracts, Amerisure
6
<PAGE>
reimburses the repair facility for the amount of covered claims. Amerisure
and/or FFG are financially responsible for any repairs required pursuant to
the extended service contract. Amerisure is a separate legal entity from the
Company. The Company terminated its relationship with Amerisure effective
June 28, 1996 with respect to future extended service contracts. The Company is
currently using traditional insurance, utilizing an unrelated third party and
the Company is evaluating whether to form a wholly owned subsidiary to provide
the services provided by FESC. To provide for the risks associated with the
extended service contracts sold by the Company prior to June 28, 1996,
Amerisure intends to retain cash reserves in an amount it believes will
reasonably be adequate to cover any of Amerisure's obligations. Moreover,
Amerisure has obtained the above described stop-loss policy from FFG. For the
fiscal years ended December 31, 1994, September 30, 1995 and September 30,
1996, the Company received net payments of approximately $350,000, $448,000
and $350,000, respectively, through the sale of extended service contracts.
Over the same period, Amerisure received an aggregate of approximately
$850,000, all of which it has reserved against losses with respect to extended
service contracts sold to the Company's customers. All of Amerisure's business
resulted from the Company's sale of extended service contracts. Amerisure's
underwriting losses and aggregate reinsurance costs will not be determinable
until the end of each of the five-year extended service contracts sold prior
to June 28, 1996. The Company is not affiliated with Ideal, FESC or FFG.
Employment Arrangements. Executive management, store management and
corporate administrative employees are employed by TBC Management, Ltd., a
Texas limited partnership (the "Partnership"). The Partnership, in turn, has
entered into a Management Agreement with the Company and its subsidiaries and
invoices each company monthly for management services rendered. The general
partner and 1.0% owner of the Partnership is the Company. The sole limited
partner and 99.0% owner of the Partnership is TBC Management, Inc. (the
"Delaware Company"), a Delaware company wholly owned by Travis Boats. The
operations of the Partnership are accounted for on a consolidated basis with
those of the Company. The Delaware Company's income results from distributions
of the Partnership and is accordingly taxed under Delaware law. These
arrangements allow the Company more easily to allocate costs among the various
store locations and to reduce Texas franchise taxes.
Certain Borrowings. On August 31, 1995, the Company borrowed $300,000 from
Amerisure. The Company executed a promissory note in favor of Amerisure for
the principal amount of $300,000, repayable at an interest rate of prime plus
0.25% per annum. The note has been paid in full.
The Company borrowed a total of $150,000 from Joseph E. and Pat Simpson.
Joseph E. Simpson is a director and principal stockholder of the Company. The
Company borrowed $100,000 on October 11, 1994, and executed an unsecured
promissory note for that amount. On January 31, 1995, the $100,000 note was
renewed and extended until January 1, 1996. On March 31, 1995, the Company
borrowed an additional $50,000 and executed a promissory note for that amount.
Both notes were renewed and extended into one $150,000 note on August 31,
1995. The renewed and extended note provided for quarterly interest payments
at an interest rate equal to the prime minus 0.25%, with the principal balance
payable in full on October 1, 1996. The renewed and extended note has been
paid in full.
The Company borrowed $175,000 from Capital Commerce Reporter, Inc., a
company owned by Joseph E. Simpson and E. D. Bohls, directors and principal
stockholders of the Company. The loan was evidenced by two unsecured
promissory notes, for $100,000 and $75,000. The notes were originally executed
on August 10, 1994 and were renewed and extended on December 31, 1994 and on
August 31, 1995. The renewed and extended notes provided for quarterly
payments of interest only at a rate equal to the prime rate minus 0.25%, with
the principal balance payable in full on October 1, 1996. These loans provided
working capital to the Company at a lower cost than was available through its
other existing banking relationships. The notes have been paid in full.
E. D. Bohls, Jesse Cox, Robert D. Siddons, Joseph E. Simpson, Ronnie L.
Spradling and Mark T. Walton, all of whom are stockholders and officers or
directors of the Company, have each executed a personal guaranty of certain
indebtedness of the Company. It is anticipated that such guaranties will be
released upon refinancing or repayment of such indebtedness.
7
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the percentage change in the Company's
cumulative total shareholder return on its Common Stock with the cumulative
total return on the published Standard & Poor's 500 Stock Index and the
cumulative total return on the Nasdaq Retail Trade Index. The graph covers the
period between the effective date of the Company's initial public offering on
June 28, 1996 and the last trading day in the fiscal year ended September 30,
1996.
COMPARISON OF 3 MONTH CUMULATIVE TOTAL RETURN
AMONG TRAVIS BOATS & MOTORS, INC., THE S & P 500 INDEX
AND THE NASDAQ RETAIL TRADE INDEX
LOGO
PERFORMANCE GRAPH APPEARS HERE
Research Total Return--Data Summary
TRVS
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------
6/28/96 9/30/96
<S> <C> <C> <C>
TRAVIS BOATS & MTRS INC TRVS 100 138
S & P 500 1500 100 103
NASDAQ RETAIL TRADE INAR 100 106
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of disinterested members of
the Board of Directors. No member of the Compensation Committee is a current
or former employee or officer of the Company.
The goals of the Company's compensation policies are to attract, retain and
motivate the best possible executives and to recognize both individual
performance and the Company's performance. To accomplish these goals, the
Company's executive compensation combines annual base salaries, bonuses based
on Company performance and stock options.
Base Salary. The base salaries for Mark T. Walton, Ronnie L. Spradling and
Michael B. Perrine were established in employment agreements between these
executive officers and TBC Management, Ltd. The employment agreements provide
for three-year terms commencing June 28, 1996 and annual base salaries of
8
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$175,000 for Mr. Walton, $150,000 for Mr. Spradling and $90,000 for Mr.
Perrine. To determine the base salaries of the Company's officers, the
Compensation Committee considers each officer's responsibilities, experience
and performance, as well as salary levels of similar companies.
Bonuses. Under the terms of the employment agreements, the Company's
executive officers are eligible for annual bonus based on the Company's
consolidated income before income tax expenses and non-recurring audit
adjustments (the "Pre-tax Income"). If the Pre-tax Income growth exceeds 20%,
over the previous fiscal year, Messrs. Walton and Spralding will each receive
a bonus of 2.0% of the Pre-tax Income and Mr. Perrine will receive a bonus of
1.0% of the Pre-tax Income. If the growth of Pre-tax Income is less than 20%,
the bonus for each officer is determined by the Board of Directors based on
the Company's performance and the individual officer's contributions to the
Company's performance.
Stock Options. By including stock options as a component of its executive
compensation plan, the Company ensures that its executive officers have a
continuing stake in the Company's long-term success. All executive officers
are eligible to receive stock options pursuant to the Company's Incentive
Stock Plan. The Compensation Committee determines the number of stock options
awarded to each executive officer.
CEO Compensation. The Compensation Committee determined Mr. Walton's
compensation in accordance with the policies described above. Under the terms
of Mr. Walton's employment agreement, his annual base salary in fiscal year
1996 was $129,250. Additionally, pursuant to the terms of his employment
agreement, Mr. Walton received a bonus of $45,034 during the fiscal year ended
September 30, 1996 as compensation for services during fiscal year 1995.
Robert C. Siddons
Steven W. Gurasich, Jr.
Zach McClendon, Jr.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
During the fiscal year ended September 30, 1996, based on a review of Forms
3 and 4 furnished to the Company during its most recent fiscal year and Forms
5 furnished to the Company with respect to its most recent fiscal year, all
reporting persons of the Company were in compliance with Section 16(a) of the
Exchange Act.
AUDITORS
Ernst & Young, LLP has been engaged as independent accountants for the
purpose of issuing a report on the financial statements of the Company for the
year ended September 30, 1997. Representatives of Ernst & Young, LLP are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if they desire to do so and to respond to appropriate
questions from those attending the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
COMPANY'S AUDITORS.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the next Annual Meeting of
Shareholders must be in writing and received at the Company's executive
offices by the Secretary no later than February 15, 1998 in order to be
included in the next year's proxy statement.
9
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OTHER BUSINESS
The Board of Directors of the Company knows of no matters to be presented at
the Annual Meeting other than those described above; however, if other matters
are properly presented to the meeting for action, it is intended that the
persons named in the accompanying form of proxy, and acting thereunder, will
vote in accordance with their best judgment on such matters.
By Order of the Board of Directors
/s/ Mark T. Walton
-------------------------------------
Mark T. Walton
President
Dated February 21, 1997
Austin, Texas
10
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TRAVIS BOATS & MOTORS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder of Travis Boats & Motors, Inc. whose name appears on the
P reverse side hereof (the "Undersigned") acknowledges receipt of the Notice
of Annual Meeting of the Company on March 26, 1997 at 10:00 a.m. CST, and
attached proxy statement, and appoints Mark T. Walton and Michael B. Perrine
and each of them the attorneys of the Undersigned, with full power of
substitution, for and in the name of the Undersigned, to vote as proxies for
the Undersigned according to the number of shares of Common Stock the
R Undersigned would be entitled to vote if then personally present at the
Annual Meeting of Shareholders of the Company to be held at The Omni Hotel,
701 Brazos Street, Austin, Texas, on March 26, 1997, or at any adjournment
or adjournments thereof, and to vote all shares of Common stock of the
Company held by the Undersigned and entitled to be voted upon the matters,
O and in accordance with the instructions, on the reverse side hereof.
TRAVIS BOATS & MOTORS, INC. ANNUAL MEETING TO BE HELD ON March 26, 1997 AT
10:00 A.M. CST FOR HOLDERS AS OF FEBRUARY 17, 1997.
X PLEASE MARK YOUR VOTES AS SHARES IN YOUR NAME:
X --- IN THIS EXAMPLE
1. DIRECTORS
---------
DIRECTORS RECOMMEND: A VOTE FOR ELECTION OF THE FOLLOWING DIRECTORS: 01-E.D.
Y BOHLS; 02-JOSEPH E. SIMPSON.
____ FOR ____ AGAINST
____ FOR EXCEPT FOR THE FOLLOWING (LIST NAMES OR NUMBERS): _________________
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
P 2. AUDITORS
--------
RATIFY APPOINTMENT OF ERNST & YOUNG, LLP AS INDEPENDENT ACCOUNTANTS AND
AUDITORS FOR 1997.
____ FOR ____ AGAINST ____ ABSTAIN
R
NOTE--PROXY HOLDERS MAY VOTE IN THEIR DISCRETION ON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
-----------------------
Signature(s)
O
-----------------------
Date
-----------------------
Signature(s)
X
-----------------------
Date
Please sign exactly as name
appears hereon. Joint owners
Y should each sign. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give title as such.
