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, 1999
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
(State or other jurisdiction of
incorporation or organization)
74-2024798
(I.R.S. Employer
Identification Number)
5000 PLAZA ON THE LAKE, SUITE 250, AUSTIN, TEXAS
78746 (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 or 15(d) of the Securities 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 Report on Form 10-K or
any amendment to this Report on 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 23, 1999, (based upon the last reported price of $10.25 per share) was
approximately $29,973,050 on such date.
The number of shares of the issuer's Common Stock, par value $.01 per
share, outstanding as of December 23, 1999 was 4,326,022, of which 2,924,200
shares were held by non-affiliates.
Documents Incorporated by Reference: Portions of Registrant's Proxy
Statement relating to the 2000 Annual Meeting of Shareholders to be held in
March 2000, have been incorporated by reference herein (Part III).
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<PAGE>
The Registrant files this amendment to submit data and other financial
information which is related to Registrant's Proxy Statement relating to the
2000 Annual Meeting of Shareholders to be held in March 2000. This includes Part
III, Items 10, 11, 12 and 13.
ii
<PAGE>
PART III, Item 10
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> <C>
Mark T. Walton(1)(2) 48 Chairman of the Board and President
Ronnie L. Spradling(1) 56 Executive Vice President--New Store
Development and Director
Michael B. Perrine 36 Chief Financial Officer, Treasurer
and Secretary
E. D. Bohls(1)(2)(5) 81 Vice Chairman of the Board
Joseph E. Simpson(1)(2)(3) 66 Director
Robert C. Siddons(1)(2)(4) 57 Director
Stephen W. Gurasich, Jr.(3)(4) 51 Director
Zach McClendon, Jr.(3)(4) 62 Director
------------------------------------------------------------------------------------------------
<FN>
(1) Member of the Nominations Committee.
(2) Member of the Executive Committee
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
(4) Mr. Bohls retired as a director effective December 1, 1999.
</FN>
</TABLE>
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 29 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 32 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, who currently is
an independent investor, retired from the Board effective 12/1/99.
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.
Stephen 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 DreamWorks.
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.
1
<PAGE>
PART III. Item 11
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, 1999, September
30, 1998 and September 30, 1997, 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, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
OTHER SECURITIES
PRINCIPAL ANNUAL UNDERLYING
NAME POSITION FISCAL YEAR SALARY BONUS COMPENSATION OPTIONS
---- --------- ----------- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton President 1999 $187,945 $ 40,183 10,780(1) --
1998 181,400 125,000 -- 12,500
1997 175,000 55,500 1,100(2) --
Ronnie L. Spradling Executive Vice 1999 $160,721 $ 40,183 10,780(1) --
President 1998 155,900 125,000 -- 12,500
1997 150,000 58,300 1,100(2) --
Michael B. Perrine Chief 1999 $103,648 $ 40,183 5,454(1) --
Financial 1998 92,700 76,000 -- 12,500
Officer 1997 92,000 35,000 625(2) 5,000
<FN>
- --------------------------------------------------------------------------------
(1) Effective July 1, 1999, the Company entered into Amended and Extended
Employment Agreements with Messrs. Walton, Spradling and Perrine. The
Employment Agreements expire on June 30, 2002. In consideration of
entering into the Employment Agreements the Company agreed to pay the
amounts of $129,362; $129,362 and $54,450 to Messrs. Walton, Spradling
and Perrine, respectively, as a pre- condition for their execution of
the agreements. [see Employment Agreements]
(2) Principally 401(k) plan matching contribution.
</FN>
</TABLE>
OPTIONS GRANTED IN LAST FISCAL YEAR
There were no stock options granted by the Company to the Named
Executive Officers during the fiscal year ended September 30, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
Potential Realizable
Value at Assumed Annual
Number of Rates of Stock Price
Securities % of Total Appreciation for
Underlying Options Granted Exercise Option Term
Options to Employees in Price Expiration -----------------------
Name Granted Fiscal Year ($/Share) Date 5% 10%
---- ---------- --------------- --------- ---------- -- ---
<S> <C>
Mark T. Walton 0
Ronnie L. Spradling 0
Michael B. Perrine 0
</TABLE>
2
<PAGE>
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, 1999 by the Named Executive Officers.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1999
-------------------------------------------------------------------
NUMBER OF OPTIONS VALUE OF IN-THE-MONEY OPTIONS
-------------------------------- ------------------------------
OPTIONS VALUE
NAME EXERCISED REALIZED EXERCISEABLE UNEXERCISABLE EXERCISABLE* UNEXERCISABLE*
---- --------- -------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Mark T. Walton 0 0 18,714 14,053 $ 70,936 $17,732
Ronnie L. Spradling 0 0 40,046 19,387 $164,264 $41,068
Michael B. Perrine(1) 0 0 32,832 26,333 $129,953 $58,332
<FN>
* Based on closing price of $9.625 on September 30, 1999.
</FN>
</TABLE>
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 1999 and annual base salaries of
$200,000 for Mr. Walton, $170,000 for Mr. Spradling and $130,000 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. In the event any of these employees are (i) terminated without
"cause", (ii) or if termination is voluntary after a "change in control" as such
terms are defined in the employee agreements, such employees will be entitled to
payment of their accrued bonus amounts plus approximately three times their
annual salary.
As a pre-condition to acceptance of the employment agreements, TBC
Management, Ltd., made conditional payment to Messrs. Walton, Spradling and
Perrine in the amounts of $129,362, $129,362 and $65,450, respectively. The
payment amount will be earned by the individuals ratably over the life of the
employment agreements. In the event that Messrs. Walton, Spradling or Perrine
were to voluntarily terminate their employment with the Company, except in the
event of a change in control as defined in the agreements, than such individual
shall repay, upon demand, the unearned portion of the conditional payment.
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<PAGE>
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, Spradling and Perrine will each receive a bonus of 1.5% 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.
4
<PAGE>
PART III. 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, 1999 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)(12) OWNED
------------------------ ---------------- ------------
<S> <C> <C>
Mark T. Walton(3) 358,682 7.9%
E.D. Bohls 330,176 7.3%
Robert C. Siddons(4) 302,868 6.7%
Ronnie L. Spradling(5) 245,189 5.4%
Joseph E. Simpson 204,000 4.5%
Michael B. Perrine(6) 44,399 *
Zach McClendon, Jr.(7) 20,933 *
Stephen W. Gurasich(8) 13,333 *
Wasatch Advisors, Inc.(9) 556,297 12.3%
Safeco Asset Management Company.(10) 351,500 7.8%
Downtown Associates, L.P.(11) 498,500 11.0%
Downtown Associates III, L.P.
Downtown Associates II, L.P.
Downtown Associates, L.L.C.
Downtown Foundations, L.P.
Ronald Juvonen
Philip Timon
Alfred Loomis, III
All executive officers and directors as a group (eight persons)(13) 1,519,580 33.5%
<FN>
* 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 December 31,
1999. The percentages are based upon 4,529,785 shares outstanding
(which includes, as outstanding, shares which may be acquired upon the
exercise of options within 60 days following December 31, 1999). 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.
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<PAGE>
(2) Does not include options granted to Mark T. Walton, Ronnie L. Spradling
and Michael B. Perrine to purchase 11,553; 16,887 and 23,833 shares of
Common Stock, respectively, which are not exercisable within 60 days
after December 31, 1999.
(3) Includes 21,214 shares subject to options exercisable within 60 days of
December 31, 1999, 291,000 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
(4) Includes 18,002 shares held by family trusts over which Mr. Siddons
exercises sole voting and investment control.
(5) Includes 42,546 shares subject to options exercisable within 60 days of
December 31, 1999.
(6) Includes 35,332 shares subject to options exercisable within 60 days of
December 31, 1999.
(7) Includes 13,333 shares subject to options exercisable within 60 days of
December 31, 1999.
(8) Includes 5,333 shares subject to options exercisable within 60 days of
December 31, 1999.
(9) The address of Wasatch Advisors, Inc. is 150 Social Hall Ave., Salt
Lake City, Utah 84111.
(10) The address of Safeco Asset Management Company is 601 Union Street,
Suite 2500, Seattle, WA 98101.
(11) 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., Dowtown Associates II, L.P., Downtown Associates,
L.L.C., Downtown Foundations, L.P., Ronald Juvonen, Philip Timon and
Alfred Loomis, III is 920 East Baltimore Pike, Kennett Square,
Pennsylvania 19348.
(12) See Notes (3), (5), (6), (7) and (8). Includes 117,758 shares subject
to options exercisable within 60 days of December 31, 2000.
</FN>
</TABLE>
6
<PAGE>
PART III. Item 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SEAARK BOATS, INC. In fiscal year 1999, the Company purchased approximately
$3.8 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 2000.
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.
7
<PAGE>
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, Perrine 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.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TRAVIS BOATS & MOTORS, INC.
Date: January 27, 2000 By: /s/ Mark T. Walton
- ----------------------- -----------------------
Mark T. Walton
Chairman of the Board
And President
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Mark T. Walton his true and lawful
attorney-in-fact and agent for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to the Travis Boats & Motors, Inc.
Annual Report on Form 10-K for the year ending September 30, 1999, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully, to all intents and purposes, as they
or he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, may lawfully do or cause to be done
by virtue hereof. This Power of Attorney has been signed below by the following
persons in the capacities and on the dates indicated.
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.
<TABLE>
<CAPTION>
Name Title Date Signed
- ---- ----- -----------
<S> <C> <C>
/S/ MARK T. WALTON Chairman of the Board, President and January 27, 2000
- -------------------- Director (Principal Executive Officer)
Mark T. Walton
/S/ MICHAEL B. PERRINE Chief Financial Officer, Secretary and January 27, 2000
- ------------------------- Treasurer (Principal Financial and
Michael B. Perrine Accounting Officer)
/S/ RONNIE L. SPRADLING Executive Vice President-New Store January 27, 2000
- ------------------------
Ronnie L. Spradling Development Director
Director January __, 2000
- ----------------------------
Steven W. Gurasich, Jr.
_____________________ Director January __, 2000
Zach McClendon, Jr.
/S/ ROBERT C. SIDDONS Director January 27, 2000
- ----------------------------
Robert C. Siddons
/S/ JOSEPH E. SIMPSON Director January 27, 2000
- ---------------------
Joseph E. Simpson
</TABLE>
9
