UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1997 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to ____________
Commission File Number 0-828
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BIRD CORPORATION
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3082903
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1077 Pleasant Avenue, Norwood Massachusetts 02062
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(Address of principal executive offices)
(781) 551-0656
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1 per share
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(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 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 state-
ments incorporated by reference in Part III of this Form 10-K or any amend-
ment to this Form 10-K. [ ]
The aggregate market value of common stock, par value $1 per share, held by
non-affiliates as of March 3, 1998 was $910,000. As of March 3, 1998 there
were 4,161,376 shares of Bird Corporation common stock, par value $1 per
share, outstanding.
<PAGE>
The undersigned registrant hereby amends Item 11 of its Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 as set forth below:
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued for services in all capacities to the Company during each of the
last three fiscal years to each of the executive officers of the Company who
served as such during 1997. No one served as Chief Executive Officer during
1997.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------- ------------------------------
SECURITIES
OTHER UNDERLYING ALL
ANNUAL RESTRICTED STOCK OTHER
NAME AND PRINCIPAL COMPEN- STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY($) MCIP($) SATION($)(1) AWARDS SARS(#) PAYOUTS(2) SATION($)
- ------------------ ---- --------- ------- ------------ ---------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Richard C. Maloof 1997 221,106 4,781 -- -- -- -- 7,843(3) --
Vice President and 1996 216,154 129,844 -- -- 50,000 22,700 7,500(3) --
Chief Operating 1995 195,962 30,000 11,538 -- 50,000 81,938 7,500(3) --
Officer(5)
Frank S. Anthony 1997 142,490 2,311 -- -- -- -- 5,634(3) --
Vice President and 1996 139,808 48,440 -- -- 15,000 13,617 296,682(4) --
General Counsel(6) 6,864(3)
1995 135,000 12,540 -- -- -- 49,163 150,000(4) --
10,545(3)
1994 135,000 30,000 22,444 -- -- 43,870 8,496(3) --
</TABLE>
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(1) Payment in lieu of vacation. Does not include certain perquisites and
other personal benefits, the cost of which to the Company was below the dis-
closure thresholds established by the Securities and Exchange Commission.
(2) In 1995 restrictions on all stock held in escrow pursuant to the Com-
pany's Long Term Incentive Plan (the "LTIP") lapsed as a result of the Vinyl
Sale and shares were distributed to the persons named in the table. Repre-
sents the value of Common Stock allocated to each officer on the date of
restriction lapse and reimbursement for withholding taxes arising from the
lapse of restrictions on restricted stock held by each officer in accordance
with provisions of the LTIP. The LTIP is terminated.
(3) Represents contributions by the Company to the Savings Plan.
(4) Represents severance payments received in connection with the change in
control which occurred pursuant to the sale of substantially all of the
assets of the Company's vinyl siding operations to Jannock, Inc. in March
1995 (the "Vinyl Sale") and payment to a separate trust established by the
Company with a bank trustee to which amounts otherwise payable to Mr.
Anthony in excess of those permitted to be contributed to the Savings Plan
under limit imposed by the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), are contributed.
(5) Mr. Maloof was elected Chief Operating Officer in April 1994, President
in April 1995 and to the Board of Directors in December 1994. Prior to that
time, he served as Vice President and President of the Company's Roofing and
Distribution Groups.
(6) Mr. Anthony was elected Vice President in 1984 and to the Board of
Directors in 1998.
<PAGE>
The following tables provide information concerning grants during 1997 to,
and exercises of stock options and stock appreciation rights ("SARs") during
1997 by, the executive officers named in the Summary Compensation Table above
and the value of unexercised stock options and SARs held by them at December
31, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
None
<TABLE>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED AT YEAR-END($)
OPTIONS/SARS
AT YEAR-END(#)
-------------------------------------
SHARES VALUE
ACQUIRED ON REALIZED EXER- UNEXER- EXER- UNEXER-
NAME EXERCISE(#) ($)(1) CISABLE CISABLE CISABLE CISABLE
- ---- ----------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Maloof 0 0 85,000 70,000 0 0
Frank S. Anthony 0 0 22,000 12,000 0 0
</TABLE>
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(1) Based on the difference between the fair market value of the securities
underlying the options at date of exercise and the exercise price of the
options.
STOCK OPTION PLANS
EMPLOYEE STOCK OPTION PLANS. The Company's executive officers currently
participate in the 1992 Option Plan. Prior to the approval of the 1992
Option Plan by the Company's stockholders on May 27, 1993 the Company's
executive officers participated in the Company's 1982 Option Plan, which was
terminated by the Board on May 27, 1993. To the extent options or stock
appreciation rights granted under the 1982 Option Plan remain outstanding,
such options and stock appreciation rights are governed by the terms
of the 1982 Option Plan. The following is a general description of the 1992
Option Plan and the 1982 Option Plan (together, the "Plans").
The Plans permit the grant of options that qualify as incentive stock options
under Section 422 of the Internal Revenue Code, non-qualified stock options
and stock appreciation rights. Options and rights to purchase up to 450,000
Common Shares, plus any unused Common Shares under the 1982 Option Plan, may
be granted under the 1992 Option Plan. The 1982 Option Plan had permitted the
issuance of 900,000 Common Shares, as adjusted, pursuant to options and rights
granted under such plan. Any Common Shares subject to an option or right
granted under the 1992 Option Plan which expires or is terminated without
being exercised in full may again be subject to an option or right.
The 1992 Option Plan is administered by a committee of non-employee members
of the Board (the "Committee"). Within specified guidelines, the Committee
has the authority under the 1992 Option Plan to determine the terms and con-
ditions under which options and rights may be granted and generally to
interpret, construe and implement the provisions of the 1992 Option Plan.
<PAGE>
Options or rights under the 1992 Option Plan may be granted to officers and
other selected key employees of the Company and its subsidiaries and to any
other person who is determined by the Committee to contribute to the success
of the Company or any subsidiary.
The exercise price of any option granted under the Plans may not be less
than the fair market value of the Common Shares subject to the option on the
date the option is granted (or, in the case of an incentive stock option
granted to an employee who owns more than 10% of the outstanding Common
Shares, 110% of such fair market value). The maximum term of an option
granted under the 1992 Option Plan is 15 years, and the maximum term of an
option granted under the 1982 Option Plan is 10 years. Each optionee (except
non- employee director optionees under the 1982 Option Plan) must remain in
the continuous employ of the Company for one year after the date of grant of
an option under the Plans before exercising any part of the option.
The Agreement and Plan of Merger dated as of January 12, 1998 (the "Merger
Agreement") among CertainTeed Corporation, BI Expansion II Corp., and the
Company provides that immediately following the Effective Date, the 1992
Option Plan will be terminated and that no further rights or options may be
granted under the 1992 Option Plan subsequent to the date of the Merger
Agreement.
NON-EMPLOYEE DIRECTORS OPTION PLAN. The Non-Employee Directors Option Plan
was approved by the Company's stockholders on May 27, 1993. The following is
a general description of the Non-Employee Directors Option Plan. Options
granted under the Non-Employee Directors Option Plan are non-statutory
options not intended to qualify under Section 422 of the Internal Revenue
Code. An aggregate of 100,000 Common Shares are available for grants under
the Non-Employee Directors Option Plan. Common Shares subject to options
which terminate unexercised will be available for future option grants.
The Non-Employee Directors Option Plan automatically provides annual grants
of options to each Director who is serving on the Board at the time of such
grant and who is not also an employee of the Company or any subsidiary. The
exercise price of options granted under the Non-Employee Directors Option
Plan are equal to the fair market value of Common Shares subject thereto on
the date of grant. Options are exercisable in full one year after the date
of grant.
The Merger Agreement provides that immediately following the Effective Date,
the Non-Employee Directors Option Plan will be terminated and that no further
options may be granted thereunder subsequent to the date of the Merger
Agreement.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Employment Contracts.
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Mr. Anthony entered into a one-year employment contract with the Company,
commencing April 1, 1995, at the same annual rate of compensation ($135,000
plus a bonus of 35% of such amount if Management Incentive Compensation
Program ("MICP") targets are obtained) and with the same fringe benefit
package (participation in the Company's Savings Plan and customary health
insurance and life insurance benefits) as he received prior to the Vinyl
Sale. As a result of the "change in control" which was deemed to have
occurred as a result of the Vinyl Sale, Mr. Anthony became entitled to
severance benefits. Pursuant to the terms of his employment contract, Mr.
Anthony received $150,000 as a partial severance payment and agreed to defer
the payment of the balance thereof until the expiration of his employment
contract. Pursuant to the terms of his contract, the balance of Mr. Anthony's
severance payment, approximately $315,000, was paid on March 31, 1996.
<PAGE>
On April 1, 1996 Mr. Anthony's employment contract automatically converted
to an oral employment agreement on the same terms, terminable by either
party upon 60 days' notice.
Termination of Employment and Change in Control Arrangements.
- ------------------------------------------------------------
The Company's 1982 Option Plan, 1992 Option Plan and 1992 Non-Employee
Directors Option Plan provide for accelerated benefits, and the Executive
Severance Contract (as defined below) provides for severance payments,
following the occurrence of a "change in control" of the Company. For
purposes of these plans and such contract, a "change in control" is deemed
to have occurred if, among other things, any person is or becomes the
beneficial owner of securities of the Company representing 30% or more of
the combined voting power of the securities of the Company then outstanding
or in the event of a merger or consolidation of the Company with another
corporation resulting in either (i) the stockholders of the Company,
immediately prior to the merger or consolidation, not beneficially owning,
immediately after the merger or consolidation, shares of the surviving entity
representing 50% or more of the combined voting power of the securities of the
surviving entity then outstanding or (ii) the members of the Board, immediately
prior to the merger or consolidation, not constituting, immediately after the
merger or consolidation, a majority of the Board of Directors of the sur-
viving entity.
Executive Severance Contract.
- ----------------------------
The Company has entered into a severance agreement with Richard C. Maloof,
the Company's President and Chief Operating Officer, dated as of October 14,
1984, as amended, April 1, 1986, May 24, 1990 and August 21, 1995, February
17, 1997, and January 12, 1998 (as so amended, the "Executive Severance
Contract") the terms of which provide for severance benefits to be paid to
Mr. Maloof in the event that his employment with the Company is terminated
subsequent to a "change in control" of the Company. Severance benefits are
payable if, after a "change in control," (i) the employment of Mr. Maloof
is terminated either by the Company (other than for "Disability" or "Cause")
or by Mr. Maloof for "Good Reason" (which term includes, but is not limited
to a substantial alteration in the nature of Mr. Maloof's responsibilities
from those in effect immediately prior to a "change in control") or (ii) Mr.
Maloof negotiates in good faith an employment agreement with a person to whom
substantially all of the Company's Common Shares are sold providing for his
employment commencing on the date of sale on such terms and conditions not
less generous than those on which he is then employed by the Company
(regardless of whether or not any such employment agreement is ever executed).
The Company has acknowledged that a "Change in Control" occurred under the
Executive Severance Contract as a result of the Vinyl Sale.
If the right to receive severance benefits is triggered under the Executive
Severance Contract, Mr. Maloof will be entitled to receive severance pay in
the amount of two times the sum of (i) Mr. Maloof's then current annual base
salary and (ii) the amount of any bonus paid (which for severance purposes,
includes any distributions made under the terms of the LTIP in 1995 and 1996
and bonuses awarded to Mr. Maloof by the Compensation Committee). Mr. Maloof
would also receive an amount equal to a pro rata portion of all contingent
bonus awards to which Mr. Maloof might be entitled in the year of termination.
Under no circumstances shall the amount be less than what Mr. Maloof would
have received had the calculation been made in 1996. The Company estimates
that if the right to receive severance benefits under the Executive Severance
Contract is triggered, Mr. Maloof would be entitled to receive approximately
$870,000, including the approximately $135,000 Mr. Maloof will receive
pursuant to the MICP (discussed below).
Incentive Compensation Program.
- ------------------------------
In the event that the Offer is consummated, Mr. Maloof will receive a bonus
of approximately $135,000 and Mr. Anthony will receive a bonus of approxi-
mately $50,000 pursuant to the 1998 MICP.
<PAGE>
Stock Option Plans and Non-Employee Directors Option Plan.
- ---------------------------------------------------------
Under the Plans, the vesting of all options to purchase Common Shares
outstanding but not yet exercisable will be accelerated upon a "change in
control." Each optionee will have, for a period of thirty (30) days after
the change in control occurs, the right (the "Cash-Out Right"), with respect
to all or a part of the shares subject to the options or stock appreciation
rights of such person, to receive an amount in cash in lieu of such
optionee's right to exercise all options in full, equal to the product of
(i) the number of shares as to which the employee exercises the Cash-Out
Right and (ii) the amount by which the purchase price of each such share
under the applicable option or stock appreciation right is exceeded by the
greater of (x) the fair market value of such shares on the date the employee
exercises the Cash-Out Right or (y) the highest purchase price paid or
offered per share in any bona fide transaction related to the "change in
control" of the Company at any time during the preceding 60-day period (as
determined by the Compensation Committee of the Board). In addition, if the
employment of any employee terminates after the expiration of the applicable
waiting period for the exercise of an option or right granted to such
employee under the Plans, such employee may for up to three months after the
date of termination (or for up to one year if termination is on account of
long-term disability) exercise such option or right. The Plans provide for a
similar one-year period to exercise options or rights subsequent to the death
of an employee occurring while in the employ of the Company or of any
subsidiary or within any period after termination of employment during which
such employee has the right to exercise such options or rights.
DIRECTORS' COMPENSATION
Mr. Vecchiolla received compensation from April 1, 1995 at the rate of
$100,000 per year for serving as Chairman of the Board and of the Executive
Committee. His compensation was voluntarily reduced to an annual rate of
$60,000 on January 1, 1996. On May 1, 1996, the Board reinstated his salary
at $100,000 per year. On May 23, 1996, Mr. Vecchiolla was granted a non-
qualified option to purchase up to 50,000 shares of Common Stock at an
exercise price of $4.375. Mr. Vecchiolla's salary was reduced to $36,000 per
year, starting June 1, 1997. Mr. Vecchiolla resigned as a Director on
December 11, 1997, and all payments to him as Director ceased as of December
31, 1997. During 1997, other non-employee members of the Board received an
annual retainer of $7,000, a fee of $750 for each Board meeting attended
($375 for a telephonic Board meeting) and a fee of $750 for each committee
meeting attended ($375 for a telephonic committee meeting). The chairmen of
the Audit and Compensation Committees received an annual retainer of $1,000.
Expenses incurred in attending meetings are reimbursed.
Effective October 1, 1997, Directors are paid an annual retainer of $7,000.
They no longer receive compensation for attending Board and Committee meetings
nor does the Chairman of the Compensation Committee or the Audit Committee
receive any additional fee.
Pursuant to the Non-Employee Directors Option Plan, non-employee directors
are also entitled to receive each year a non-qualified stock option to
acquire 2,500 shares of the Company's Common Stock (provided that the
maximum number of shares subject to options granted to any director may not
exceed 30,000 shares). Such options are granted on the date of the annual
meeting each year and become exercisable in full one year later. During 1997,
each non-employee director was granted such an option to purchase 2,500
Common Shares at an exercise price of $4.50 per share.
COMPENSATION COMMITTEE INTERLOCKS
The members of the Board's Stock Option, Compensation, and Organizational
Development Committee (the "Compensation Committee") are Herbert I. Corkin,
Charles S. Bird, III, and Antonio J. Lorusso, Jr. Mr. Lorusso is Chairman
of the Compensation Committee. None of these individuals is or was formerly
an officer of the Company, and no "compensation committee interlocks" existed
during the last fiscal year.
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for compensation decisions with
respect to senior management of the Company, as well as for organizational
development and succession planning within the Company.
The Compensation Committee's compensation philosophy and policies applicable
to executive officers emphasize pay for performance and increased stockholder
value within a framework of compensation levels comparable to companies of
similar size. Base salary, annual MICP awards, and long-term incentive awards
are structured to provide total compensation levels for executive officers
that are intended to be below competitive compensation amounts when operating
results are at or below acceptable levels and above average levels when
results are outstanding or other targets or personal goals are achieved.
The Compensation Committee has used outside consulting assistance for plan
design and consultant and independent survey data in setting compensation
levels and has relied, in the case of officers other than the Chief Executive
Officer, on recommendations of the Chief Executive Officer which are reviewed
and modified where appropriate by the Committee.
In recent years, long-term awards have primarily taken the form of stock
option grants, which are designed to align the interests of executives with
those of the stockholders and reward executives when stockholder value
increases. Stock options are granted at an exercise price equal to the
market price of the Company's Common Stock on the date of grant.
Salaries for the Chief Executive Officer and other executive officers are
based in part upon a range of salaries for each office developed from a
survey of compensation practices at competitive companies. During 1997, Mr.
Maloof's base salary was decreased from $225,000 annually to $208,125
annually and Mr. Anthony's base salary was decreased from $145,000 annually
to $134,125 annually. In December 1997, Messrs. Maloof's and Anthony's base
salaries were reinstated at $225,000 and $145,000, respectively.
One of the principal elements of variable compensation for senior executive
officers is found in the annual MICP awards. In 1997, the possible pay out
for 1997 was set at 60% of base salary in the case of the President, 35% of
base salary in the case of the Vice President, and between 20% and 30% of
base salary in the case of other members of the corporate staff and other
key members of the Company. In 1997, awards to management were tied to
achievement of goals with respect to increased cash flow and profitability
on an equal 50/50 basis.
The Committee believes that the combination of salary and bonus rewards was
appropriate based upon the task imposed upon management to simultaneously
operate the business in a very competitive environment and to entertain
prospective merger proposals.
Based on current compensation levels and the present structure of the
Company's executive compensation programs, the Committee believes that the
compensation payable to executives will not be subject to the limitation on
deductibility imposed by the Omnibus Budget Reconciliation Act of 1993. If
such limitation should become applicable in the future, the Committee and
the Company will determine whether any changes in the Company's compensation
programs are advisable.
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common Stock
of the Company for the last five fiscal years with the cumulative total
returns of the Russell 2000 index and the Value Line Building Materials
Industry Index, assuming an investment of $100 in the Company's Common Stock
and each index at the close of trading on December 31, 1992 and the reinvest-
ment of all dividends. The total stockholder return data for the Russell 2000
Index and the Value Line Building Materials Index is provided by Value Line
Institutional Services.
<TABLE>
<CAPTION>
BIRD CORPORATION
Total Cumulative Shareholder Return for
Five-Year Period Ending December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
December 31... 1992 1993 1994 1995 1996 1997
- ----------------------------------------------------------------------------
Bird Corporation 100.00 73.97 75.63 40.85 45.82 35.33
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Russell 2000 100.00 118.91 116.55 149.70 174.30 213.00
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VL Building Materials 100.00 129.20 96.42 134.25 150.44 178.86
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</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
BIRD CORPORATION
By: /s/ Frank Anthony
---------------------------------
Frank Anthony
Clerk
Date: April 28, 1998
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