SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended: August 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number 0-5940
TEMTEX INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 75-1321869
- - ------------------------------ ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5400 LBJ Freeway, Suite 1375, Dallas, Texas 75240
- - ------------------------------------------- ---------
(Address of principal executive offices) Zip Code
Company's telephone number, including area code: 972/726-7175
Securities Registered Pursuant to Section 12(b) of the act:
None
Securities Registered Pursuant to Section 12(g) of the act:
Common Stock, par value $0.20 per share
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(Title of Class)
Indicate by check mark whether the registrant (a) 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
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. YES [ X ] NO [ ]
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. [ X ]
As of November 13, 1996, the aggregate market value of the voting
stock held by nonaffiliates of Temtex Industries, Inc. was
$7,268,628.
As of August 31, 1996 there were 3,467,141 shares of common stock,
par value $0.20 per share, of Temtex Industries, Inc. outstanding.
<PAGE>
INTRODUCTORY STATEMENT
The undersigned Registrant hereby amends and restates, in its entirety,
Item 11 (Executive Compensation) of its Annual Report on Form 10-K
relating to its fiscal year ended August 31, 1996, previously filed
with the Securities and Exchange Commission on November 26, 1996 (the
"Original Filing"). This Form 10-K/A modifies the performance graph
previously included as part of the Original Filing to cause all indices
included thereon to begin at comparable values. No other information
or data contained in the Original Filing is altered by this Form 10-K/A.
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<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table provides certain disclosure of all compensation
awarded to, earned by or paid to the chief executive officer of the
Company and to each of the Company's two most highly compensated
executive officers (other than the chief executive officer) whose
total salary and bonus exceed $100,000. The Company had no other
executive officer whose base salary and bonus exceed $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
---------------------------
Long Term Compensation
------------------------
Annual Compensation Awards Payouts
-------------------- ------------------ ---------
Other Securities All
Annual Restricted Underlying LTIP Other
Name and Compen- Stock Options Pay- Compen-
Principal Fiscal Salary Bonus sation Awards /SARs outs sation
Position Year ($) ($) ($) ($) (#) ($) ($)
- - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E.R. Buford 1994 195,000 150,000 N/A -0- -0- -0- N/A
Chief Executive Officer 1995 205,300 -0- N/A -0- -0- -0- N/A
and President 1996 213,500 -0- N/A -0- -0- -0- N/A
________________________________________________________________________________________________________________________
James E. Upfield 1994 145,000 25,000 N/A -0- -0- -0- N/A
Chairman of 1995 150,000 -0- N/A -0- -0- -0- N/A
the Board 1996 150,000 -0- N/A -0- -0- -0- N/A
________________________________________________________________________________________________________________________
R. N. Stivers 1994 102,500 30,000 N/A -0- -0- -0- N/A
Chief Financial 1995 107,800 -0- N/A -0- -0- -0- N/A
Officer and Vice 1996 112,000 -0- N/A -0- -0- -0- N/A
President-Finance
________________________________________________________________________________________________________________________
</TABLE>
Other annual compensation did not exceed the lesser of either
$50,000 or 10% of total salary as disclosed in the Summary
Compensation Table.
EMPLOYMENT CONTRACT AGREEMENTS
The Company entered into three-year employment contracts with Mr.
E. R. Buford and Mr. R. N. Stivers (the "Executives") as of June 7,
1994. Under the terms of the agreements, Mr. Buford receives an
annual base salary of at least $201,300 and Mr. Stivers receives a
base salary of at least $105,000. During the term of the agreements,
the Company may increase the base salary of the Executives. The
Executives will also be eligible to participate in the regular
employee benefit program now or hereafter established by the Company.
On each anniversary of these agreements, the term shall be extended
for an additional period of one year unless the Board of Directors
elects, at the directors' meeting following the annual
stockholders' meeting, not to extend the agreements.
The agreements may be terminated by the Company without cause upon
thirty days prior written notice. In the event of termination
without cause, the Company shall for a period of two and one-half
years continue to pay Mr. Buford and for a period of one year
continue to pay Mr. Stivers their base salaries effective at the
time of termination.
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<PAGE>
If the Executives are involuntarily terminated, other than for
cause, in contemplation of, or within three years following, a
change of control, the Company shall pay the Executives (i) a lump
sum severance payment equal to two and one-half times the
Executives base salary in effect at the time of involuntary
termination, payable as a lump sum, and (ii) continuation of all
employee benefits, executive benefits and perquisites or benefits
reasonably equivalent thereto, for a period of two and one-half
years.
SELECT MANAGEMENT EMPLOYEE SECURITY PLAN
Except for the Company's Select Management Employee Security Plan,
the Company does not have any plans that could be deemed long-term
incentive plans or defined benefit or actuarial plans under which
benefits are determined primarily by reference to final
compensation. The Select Management Employee Security Plan (the
"Security Plan") provides certain death and retirement benefits to
key employees of the Company. During the fiscal year ended August
31, 1996, ten (10) employees were participating in the Security
Plan (including the three named executive officers in the Summary
Compensation Table above). The Company's Compensation Committee
has discretion to select additional employees (not more frequently
than annually) to participate in the Security Plan.
The Security Plan provides for benefits to be paid to each
participant for a period of ten (10) years after retirement (or to
the beneficiary or estate of a participant for a period of ten (10)
years following the date of death of a participant) in an amount
during each such year equal to approximately 50% of the
participant's salary at the date of retirement or death. All
required benefit payments are provided by individual life
insurance, retirement insurance or annuity type policies which the
Company's Compensation Committee has deemed appropriate. Pursuant
to the Security Plan, the Company makes all contributions to fund
the aggregate amount of insurance premiums required to purchase and
maintain all applicable insurance or annuity type policies.
Any participant in the Security Plan who ceases to be an employee
of the Company prior to attaining the age of fifty (50) and ten
(10) years of employment and before normal retirement date may
elect to purchase his insurance policy for one-third of its cash
value on the date of termination. Any participant who ceases to be
employed after attaining age fifty (50) and ten (10) years of
service but before normal retirement will be assigned his insurance
policy without any payment being required.
STOCK OPTION PLAN FOR KEY EMPLOYEES
In 1990, the Company adopted the 1990 Stock Plan for Key Employees
of Temtex Industries, Inc. and its Subsidiaries (the "1990 Plan").
The 1990 Plan provides for the grant of stock options, including
"incentive stock options" within the meaning of Section 422a of the
Internal Revenue Code of 1986 and "non-qualified stock options"
which do not constitute incentive stock options, the grant of stock
appreciation rights in connection therewith, and the allotment of
shares of restricted stock, to key employees of the Company.
The 1990 Plan is intended to attract, retain and provide incentives
for eligible key employees. The 1990 Plan is administered by a
committee of the Board of Directors not eligible to receive awards
under the 1990 Plan. Presently the Compensation Committee
administers the Plan. Such committee has authority, in its
discretion, to determine the individuals to whom, and the time or
times at which restricted stock will be allotted or options or
stock appreciation rights will be granted, the number of shares to
be subject to each allotment of restricted stock, stock options and
appreciation rights, the option price for the duration of each
option and other matters in connection with the administration of
the 1990 Plan and the grant of awards thereunder. The exercise
price of any option granted under the 1990 Plan may not be less
than the fair market value of the Common Stock at the date of
grant. Options and stock appreciation rights may be granted and
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<PAGE>
restricted stock allotted under the 1990 Plan from time to time
until December 31, 1999, on which date such 1990 Plan will
terminate, unless it is sooner terminated as provided therein.
The stockholders at the annual meeting held March 7, 1995, approved
a proposal increasing the shares eligible for issuance pursuant to
the 1990 Plan from 95,000 shares to 195,000 shares of Common Stock
and the aggregate number of options (including stock appreciation
rights) or shares of restricted stock which may be issued to any
one employee in any fiscal year shall not exceed 25,000.
OPTION GRANTS DURING 1996 FISCAL YEAR
There were no stock options granted to the Company's executive
officers named in the Summary Compensation Table during fiscal year
1996.
- - -----------------------------------------------------------------
The following table includes the number of shares received upon
exercise, or if no shares were received, the number of securities
with respect to which the options were exercised, the aggregate
dollar value realized upon exercise and the total value of
unexercised options held at the end of the last completed fiscal
year for each of the Company's executive officers named in the
Summary Compensation Table.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
-----------------------------------------------------
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised In-
Underlying Unexercised the-Money
Options/SARs at FY-End Options/SARS at
(#) FY-End ($)
----------------------- ------------------
Shares Acquired Value Realized Exercisable / Exercisable /
Name on Exercise (#) ($) Unexercisable Unexercisable
- - ------- ---------------- -------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
E. R. Buford -0- -0- Exercisable 50,000 $122,000
Exercisable 5,000 -0- (1)
Unexercisable 15,000 -0- (1)
J. E. Upfield -0- -0- -0- -0-
R. N. Stivers -0- -0- Exercisable 10,000 $ 24,400
Exercisable 2,500 -0- (1)
Unexercisable 7,500 -0- (1)
</TABLE>
(1) The Company's stock price at August 31, 1996 was below the
option price.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
In 1990, the Company also adopted the Outside Director Stock Option
Plan (the "Outside Director Plan"). The Outside Director Plan is
intended to encourage more extensive ownership of the Common Stock,
to provide incentives and to attract and retain eligible outside
directors of the Company. Under the Outside Director Plan, 30,000
shares of Common Stock were reserved. The Outside Director Plan is
presently administered by the Board of Directors. The Board of
Directors has authority, in its discretion, to determine the
outside directors to whom, and the time or times in which, options
will be granted, the number of shares to be subject to each option,
and the purchase price of the shares covered by each option. The
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<PAGE>
exercise price of any option granted under the Outside Director
Plan may not be less than the fair market value of the Common Stock
at the date of the grant. Options granted under the Outside
Director Plan are non-qualified options for federal income tax
purposes.
The following table shows stock options granted and presently
exercisable to outside directors from May 23, 1990 to August 31,
1996:
<TABLE>
<CAPTION>
Options
Granted and Value of Unexercised
Presently Option In-The-Money Options
Exercisable Price At Fiscal Year End
----------- ------- ---------------------
<S> <C> <C> <C>
Joseph V. Mariner, Jr. 2,500 $2.00 $ 4,075
2,500 $1.44 5,475
------- --------
5,000 $ 9,550
======= ========
Larry J. Parsons 2,500 $2.00 $ 4,075
2,500 $1.44 5,475
------- --------
5,000 $ 9,550
======= ========
Scott K. Upfield 2,500 $1.44 $ 5,475
======= ========
Richard W. Griner 2,500 $4.81 -0- (1)
======= ========
</TABLE>
- - ------------------------
(1) The Company's stock price at August 31, 1996 was below the
option price.
DIRECTORS' REMUNERATION
Those directors who are salaried employees of the Company receive no
additional compensation for their services as directors or as members
of committees of the Board. Cash compensation currently payable to
the other directors for services in that capacity consists of a retainer
of $2,500 per year and a fee of $750 (in addition to travel expenses)
for each day of each meeting of the Board of Directors attended. No
additional retainers are paid for serving on a committee; however, if
one or more committee meetings are held on a day other than one on
which a Board meeting is held, committee members are paid a fee of
$750 (in addition to travel expenses) for each day of such meeting or
meetings.
Directors who are not regular salaried officers or employees who
render services to the Company in a capacity or capacities other
than that of a director (for example, as consultants or attorneys)
may be compensated for such other services, and such compensation
for other services shall not, except insofar as may be specified by
the Company in particular cases, affect the cash compensation
payable to such directors in their capacities as directors and
members of committees of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James E. Upfield was, during the fiscal year, an officer of the
Company and a member of the Compensation Committee of the Board of
Directors. Mr. Upfield has engaged in certain transactions with
the Company described under the heading "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS".
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BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of
Mr. Mariner (Chairman), Mr. Parsons, Mr. James E. Upfield, Mr.
Scott K. Upfield and Mr. Richard W. Griner. The Compensation
Committee's primary function is to review the compensation awarded
to the executive officers of the Company.
In determining executive compensation, the Compensation Committee
reviews the performance of the specific executive, the operating
performance of the Company, the compensation of executives of
companies which are comparable to the Company and the performance
of the Company's Common Stock. Particular emphasis is given to the
operating results of the Company. The Company's Compensation
Committee has access to, and review reports of, independent
financial consultants who assimilate and evaluate the compensation
of executive officers employed by companies which are generally
comparable to the Company. The cumulative weight of all such
factors is then generally considered to determine whether or not a
particular executive should receive an increase in compensation, an
incentive bonus under the Company's Executive Bonus Plan, a stock
option or stock grant under the Company's Stock Option Plan for Key
Employees, or any other compensation benefits. Mr. E. R. Buford
(the Chief Executive Officer of the Company) and Mr. Roger Stivers
entered into employment agreements with the Company which fixed
their annual salaries at certain minimum levels ($201,300 per annum
for Mr. Buford and $105,000 per annum for Mr. Stivers).
The Compensation Committee believes that in order for the Company
to succeed, it must attract and retain qualified executives who can
not only perform satisfactorily on an individual basis but who can
also retain and manage a quality staff of other executive officers
and key employees. Thus, in addition to applying the criteria
generally applicable to all executive officers, in determining the
compensation of the chief executive officer the Compensation
Committee may also be influenced to a significant extent by the
overall performance of the Company's other executives and key
employees. After a review of all such factors and a report of
independent financial consultants dated February 5, 1996, which
opined that a base salary of $220,000 and total cash compensation
of $295,000 for the Chief Executive Officer would be "competitive",
the Compensation Committee recommended that the Chief Executive
Officer's base salary be increased to $216,320 per annum but did
not recommend that any bonus be paid for fiscal 1996.
Mr. Joseph V. Mariner, Jr.
Mr. James E. Upfield
Mr. Scott K. Upfield
Mr. Larry J. Parsons
Mr. Richard W. Griner
Performance Graph
The following table compares the performance of the Company's
Common Stock with certain comparable indices:
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
TEMTEX INDUSTRIES, INC......$ 100.00 $ 125.00 $ 888.00 $1,075.00 $ 469.00 $ 363.00
Dow Jones Industrial........$ 100.00 $ 110.24 $ 127.23 $ 140.10 $ 169.59 $ 211.37
Dow Jones Furnishings &
Appliances................$ 100.00 $ 107.68 $ 175.05 $ 160.58 $ 163.27 $ 188.70
</TABLE>
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<PAGE>
SIGNATURES
Pursuant to the requirements of 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 on the 24th day of February, 1997.
TEMTEX INDUSTRIES, INC.
/s/ R. N. Stivers
-----------------------------------
R. N. Stivers
Vice President-Finance, Chief
Financial Officer and Chief
Accounting Officer
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