UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
[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, 1998
[ ] 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
December 24, 1998, (based upon the last reported price of $19.75 per
share) was approximately $56,779,631 on such date.
The number of shares of the issuer's Common Stock, par value $.01 per
share, outstanding as of December 24, 1998 was 4,287,063 of which
2,874,914 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 2001 annual stockholders meeting. Messrs. Walton and Siddons are
currently Class C directors and will stand for election at the 1999
annual stockholders' meeting. 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) 47 Chairman of the Board and President
Ronnie L. Spradling(1) 55 Executive Vice President--New Store
Development and Director
Michael B. Perrine 35 Chief Financial Officer, Treasurer
and Secretary
E. D. Bohls(1)(2) 80 Vice Chairman of the Board
Joseph E. Simpson(1)(2)(3) 65 Director
Robert C. Siddons(1)(2)(4) 56 Director
Steven W. Gurasich,Jr.(3)(4) 50 Director
Zach McClendon, Jr.(3)(4) 61 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 28 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 31 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
1998. 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 1998. 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, 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, 1998.
<TABLE>
<CAPTION>
Long-Term Compensation
OTHER SECURITIES
Principal Fiscal ANNUAL UNDERLYING
Name Position Year Salary Bonus COMPENSATION OPTIONS
- ------------------- ------------ ------- ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton President 1998 $181,400 $125,000 -- 12,500
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 1998 $155,900 $125,000 -- 12,500
Spradling Vice 1997 150,000 58,300 $1,100(2)
President 1996 96,900 45,034 1,578(2) --
1995(1) 69,000 45,000 -- 46,933
Michael B. Chief 1998 $92,700 $76,000 -- 12,500
Perrine Financial 1997 90,000 35,000 $625(2) 5,000
Officer 1996 71,085 27,500 625(2) --
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 $3,000
per year in the case of the Executive Committee. Directors' expenses for
attending meetings are reimbursed by the Company.
Options Granted in Last Fiscal Year
The following table sets forth information concerning stock options
granted by the Company to the Named Executive Officers during the fiscal
year ended September 30, 1998.
<TABLE>
<CAPTION>
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year ($/Share) Date
- ---------------- ---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Mark T. Walton 12,500 12.4% $22.50 1/12/2008
Ronnie L. 12,500 12.4% $22.50 1/12/2008
Spradling
Michael B. 12,500 12.4% $22.50 1/12/2008
Perrine
</TABLE>
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, 1998 by the Named Executive Officers.
<TABLE>
<CAPTION>
At September 30, 1998
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 16,214 16,553 $166,194 $ 41,543
Ronnie L. 0 37,546 21,887 $384,847 $ 96,217
Spradling
Michael B. 25,000 33,332 20,833 $341,653 $ 85,413
Perrine(1)
</TABLE>
* Based on closing price of $15.50 September 30, 1998.
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 $181,400 for Mr. Walton, $155,900 for Mr.
Spradling and $92,700 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 1998, the Company purchased $4.8 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 13. Certain Relationships and Related Transactions
SeaArk Boats, Inc. In fiscal year 1998, the Company purchased $4.8
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.
<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 28, 1999
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 28, 1999
Director (Principal Executive Officer )
/S/ RONNIE L. SPRADLING
Ronnie L. Spradling Executive Vice President-New Store January 28, 1999
Development and Director
/S/ MICHAEL B. PERRINE
Michael B. Perrine Chief Financial Officer, Secretary January 28, 1999
and Treasurer (Principal Financial
and Accounting Officer )
/S/ E. D. BOHLS
E. D. Bohls Vice Chairman of the Board January 28, 1999
and Director
/S/ ROBERT C. SIDDONS
Robert C. Siddons Director January 28, 1999
/S/ JOSEPH E. SIMPSON
Joseph E. Simpson Director January 28, 1999
