UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the Fiscal Year Ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-20757
TRAVIS BOATS & MOTORS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2024798
State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
5000 Plaza on the Lake, Suite 250, Austin, Texas 78747
(Address of principal executive offices)
Registrant's telephone number, including area code: (512) 347-8787
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities and
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that 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 or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [__]
The aggregate market value of the voting stock (which consists solely
of shares of Common Stock) held by non-affiliates of the Registrant as of
January 26, 1998, (based upon the last reported price of $23.00 per
share) was approximately $56,187,229 on such date.
The number of shares of the issuer's Common Stock, par value $.01 per
share, outstanding as of January 26, 1998 was 4,228,471 of which
2,442,923 shares were held by non-affiliates.
<PAGE>
PART III
Item 10. Directors and Executive Officers
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 will stand for reelection at
the 2000 annual stockholders meeting. Messrs. Spradling, Gurasich and
McClendon are currently Class B directors and are to 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 Class B directors elected at the 1998
annual stockholders' meeting will hold office until the 2001 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 following table sets forth certain information with respect to
each director and each executive officer of the Company:
Name Age Position
Mark T. Walton(1)(2) 46 Chairman of the Board and President
Ronnie L. Spradling(1) 54 Executive Vice President--New Store
Development and Director
Michael B. Perrine 34 Chief Financial Officer, Treasurer
and Secretary
E. D. Bohls(1)(2) 79 Vice Chairman of the Board
Joseph E. Simpson(1)(2)(3) 64 Director
Robert C. Siddons(1)(2)(4) 55 Director
Steven W. Gurasich,Jr.(3)(4) 49 Director
Zach McClendon, Jr.(3)(4) 60 Director
(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 27 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 30 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 served as Chairman of the Board of Capitol Commerce
Reporter, Inc., a public records research company, from 1986 through
1997. In addition, he has served as Vice President and as a director of
Americana Enterprises, a private real estate development joint venture,
since 1975. Mr. Bohls is currently an independent investor.
Joseph E. Simpson has served as a director of the Company since
1979. He served as President and as a director of Capitol Commerce
Reporter, Inc., a records research company, from 1986 through 1997. Mr.
Simpson is currently an independent investor.
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, 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.
Compliance with Section 16(a) of the Exchange Act
During the fiscal year ended September 30, 1997, 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, except as noted below. Mr. Robert C.
Siddons failed to file a Form 4 reflecting the sale of 20,000 shares of
Common Stock in June 1997. Mr. Zach McClendon, Jr. failed to file a Form
4 reflecting the purchase of 7,600 shares of Common Stock in June 1997.
Item 11. Executive Compensation
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,
1997, September 30, 1996 and September 30, 1995, with respect the
Company's President, Mr. Walton, the Executive Vice President, Mr.
Spradling, and the Chief Financial Officer, Mr. Perrine (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, 1997.
<TABLE>
<CAPTION>
Long-TermCompensation
OTHER SECURITIES
Principal Fiscal ANNUAL UNDERLYING
Name Position Year Salary Bonus COMPENSATION OPTIONS
- ------------------- ------------ ------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton President 1997 $175,000 $55,500 $1,100(2) --
1996 129,250 45,034 4,177(2)
1995(1) 108,000 45,000 -- 20,267
Ronnie L. Executive 1997 $150,000 $58,300 $1,100(2)
Spradling Vice 1996 96,900 45,034 1,578(2) --
President 1995(1) 69,000 45,000 -- 46,933
Michael B. Chief 1997 $90,000 $35,000 $625(2) 5,000
Perrine Financial 1996 71,085 27,500 625(2) --
Officer 1995 57,600 17,500 -- 66,667
</TABLE>
(1) Fiscal year 1995 was a nine-month period; dollar amounts shown have
been annualized.
(2) Principally 401(k) plan matching contribution.
Compensation of Directors
Directors who are not officers and employees of or consultants to
the Company 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 is not received, and $3,000
per year in the case of the Executive Committee. Directors' expenses for
attending meetings are reimbursed by the Company.
Options Granted in Last Fiscal Year
The following table sets forth information concerning stock options
granted by the Company to the Named Executive Officers during the fiscal
year ended September 30, 1997.
<TABLE>
<CAPTION>
Individual Grants
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Exercise Price Appreciation for
Options Employees in Price Expiration Option Term (1)
Name Granted Fiscal Year ($/Share) Date 5% 10%
- ---------------- ---------- ------------ --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton 0 N/A N/A N/A N/A N/A
Ronnie L. 0 N/A N/A N/A N/A N/A
Spradling
Michael B. 5,000 14.9% $10.50 3/11/2007 $33,010 $83,671
Perrine
</TABLE>
_________________
(1) These amounts are calculated based on certain assumed rates of
annual compound stock price appreciation from the date the option
was granted to the end of the option term. Actual gains, if any, on
stock option exercises and Common Stock holdings are dependent on
the future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected in
this table will be achieved. These calculations assume a fair
market value of $10.50 per share of Common Stock at the date of
grant.
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, 1997 by the Named Executive Officers.
<TABLE>
<CAPTION>
At September 30, 1997
Number of Unexercised
Options Value of In-the-Money Options
Options
Name* Exercised* Exercisable Unexercisable Exercisable* Unexercisable*
- -------------- ---------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Mark T. Walton 0 8,106 12,161 $122,603 $183,935
Ronnie L. 0 18,774 28,159 $283,957 $425,905
Spradling
Michael B. 0 26,667 45,000 $436,348 $688,671
Perrine(1)
</TABLE>
* Based on closing price of $20.375 September 30, 1997.
Employment Agreements
The Company is the beneficiary of employment agreements with TBC
Management, Ltd. (an affiliated partnership of the Company) and each of
Mark T. Walton, Ronnie L. Spradling and Michael B. Perrine, providing,
among other things, for three-year terms commencing in July 1996 and
annual base salaries of $175,000 for Mr. Walton, $150,000 for Mr.
Spradling and $90,000 for Mr. Perrine, respectively. In addition, Messrs.
Walton, Spradling and Perrine have agreed to contractual confidentiality
and noncompete provisions in their respective employment agreements,
which will extend beyond termination of their employment for any reason.
In the event any of these employees are terminated without ''cause,'' as
such term is defined in the employee agreements, such employees will be
entitled to payment of approximately three times their annual salary.
The employment agreements also provide that, if the consolidated
income of Travis Boats before income tax expenses and non-recurring audit
adjustments (the ''Pre-tax Income'') reflects growth in excess of 20%
over the previous fiscal year, Messrs. Walton and Spradling will each
receive a bonus of 2% of the Pre-tax Income and Mr. Perrine will receive
a bonus of 1% of the Pre-tax Income. If the Pre-tax Income does not
reflect growth of 20%, the bonus for each individual will be determined
by the Board of Directors.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Robert C. Siddons, Steven W.
Gurusich, Jr. and Zach McClendon, Jr. Mr. Robert C. Siddons served as
the President of the Company from 1979 through 1985. Mr. Zach McClendon,
Jr. is an indirect majority owner and the Chairman of the Board of SeaArk
Boats, Inc. In fiscal year 1997, the Company purchased $2.4 million of
boats from SeaArk, Inc. The Company anticipates that this relationship
will continue at the same level of activity in fiscal year 1998. No
member of the current Compensation Committee serves as an executive
officer of the Company, or as a director of any entity, an executive
officer of which serves on the Compensation Committee or as a director of
the Company.
Item 12. 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 December 31, 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.
Percent
Number of Beneficially
Name of Beneficial Owner Shares(1)(2) Owned
- ------------------------- ------------ ----------------
E. D. Bohls(3) 506,027 12.0%
Robert C. Siddons(4) 360,130 8.5%
Mark T. Walton(5) 375,574 8.9%
Joseph E. Simpson 249,000 5.9%
Ronnie L. Spradling(6) 251,417 5.9
Steven W. Gurasich, Jr.(7) 13,333 *
Zach McClendon, Jr.(8) 20,933 *
Michael B. Perrine(9) 9,134 *
Wasatch Advisors, Inc.(10) 464,025 11.0%
Fleet Financial Group, Inc.(11) 217,600 5.1%
Downtown Associates, L.P.(12) 233,225 5.5%
Downtown Associates III, L.P.
Downtown Associates, L.L.C.
The Sweet Water Trust
The Phaedrus Foundation
Ronald Juvonen
Philip Timon
Alfred Loomis, III
All executive officers and 1,785,548 42.2%
directors as a group
(eight persons)(13)
_______________________
* 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 January 28,
1998. The percentages are based upon 4,228,471 shares outstanding.
Except as otherwise noted below, the address of each holder of 5% or
more of the Common Stock is 5000 Plaza on the Lake, Suite 250, Austin,
Texas, 78746.
(2) Does not include options granted to Mark T. Walton, Ronnie L.
Spradling and Michael B. Perrine to purchase 12,161, 28,159 and 40,000
shares of Common Stock, respectively, which are not exercisable within
60 days after January 28, 1998.
(3) Includes 130,912 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
30,816 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 25,264 shares held by family trusts over which Mr. Siddons
exercises sole voting and investment control.
(5) Includes 8,106 shares subject to options exercisable within 60 days of
January 28, 1998, 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 18,774 shares subject to options exercisable within 60 days
of January 28, 1998.
(7) Includes 13,333 shares subject to options exercisable within 60 days
of January 28, 1998.
(8) Includes 13,333 shares subject to options exercisable within 60 days
of January 28, 1998.
(9) Includes 1,666 shares subject to options exercisable within 60 days of
January 28, 1998.
(10) The address of Wasatch Advisors, Inc. is 68 South Main, Salt Lake
City, Utah 84101.
(11) The address of Fleet Financial Group, Inc. is One Federal Street,
Boston, Massachusetts 02110.
(12) Voting power and dispositive power is shared among each of the
shareholders listed. The address of Downtown Associates, L.P.,
Dowtown Associates III, L.P., Downtown Associates, L.L.C., Ronald
Juvonen, Philip Timon and Alfred Loomis, III is 920 East Baltimore
Pike, Kennett Square, Pennsylvania 19348. The address of the Sweet
Water Trust and the Phaedrus Foundation is 36 West 44th Street, New
York, New York 10036.
(13) See Notes (5), (6), (7), (8) and (9). Includes 55,212 shares subject
to options exercisable within 60 days of January 28, 1998.
Item 13. Certain Relationships and Related Transactions
SeaArk Boats, Inc. In fiscal year 1997, the Company purchased $2.4
million of boats from SeaArk Boats, Inc. ("SeaArk"). SeaArk is wholly-
owned by UniGrace, Inc., which in turn is wholly-owned by McClendon
Resources. McClendon Resources is wholly-owned by Zach McClendon, a
Director of the Company, and his children. Mr. McClendon serves as the
Chairman of the Board of SeaArk, UniGrace, Inc. and McClendon Resources.
The Company anticipates that this relationship will continue at the same
level in year 1998.
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 and directors 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 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. 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 three fiscal years ended September 30, 1996, September
30, 1995, and December 31, 1994, 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.
As noted above, no further amounts were paid to Amerisure after June 28,
1996. 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. E. D. Bohls, Jesse Cox, Robert D. Siddons,
Joseph E. Simpson, Ronnie L. Spradling and Mark T. Walton, all of whom
are stockholders, 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 of
such indebtedness.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
TRAVIS BOATS & MOTORS, INC.
_____/S/____
By:
Mark T. Walton
Chairman of the Board and President
Date: January 27, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature Title Date
/S/ MARK T. WALTON
Mark T. Walton Chairman of the Board, President and January 27, 1998
Director (Principal Executive Officer )
/S/ RONNIE L. SPRADLING
Ronnie L. Spradling Executive Vice President-New Store January 27, 1998
Development and Director
/S/ MICHAEL B. PERRINE
Michael B. Perrine Chief Financial Officer, Secretary January 27, 1998
and Treasurer (Principal Financial
and Accounting Officer )
/S/ E. D. BOHLS
E. D. Bohls Vice Chairman of the Board January 27, 1998
and Director
/S/ ROBERT C. SIDDONS
Robert C. Siddons Director January 27, 1998
/S/ JOSEPH E. SIMPSON
Joseph E. Simpson Director January 27, 1998
