UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
[X] For the fiscal year ended December 31, 1995
OR
[ ] For the transition period from ____________ to ____________
Commission file number 0-7152
DEVCON INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
Florida
59-0671992
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)
1350 E. Newport Center Dr. Suite 201, Deerfield Beach, FL
33442
(Address of principal executive offices) (Zip
Code)
(954) 429-1500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 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 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
As of March 25, 1996, the number of shares of the registrant's
Common Stock outstanding was 4,464,510. The aggregate market value
of the Common Stock held by nonaffiliates of the registrant as of
March 25, 1996 was approximately $17,624,162, based on a closing
price of $9.13 for the Common Stock as reported on the NASDAQ
National Market System on such date. For purposes of the foregoing
computation, all executive officers, directors and 5 percent
beneficial owners of the registrant are deemed to be affiliates.
Such determination should not be deemed to be an admission that
such executive officers, directors or 5 percent beneficial owners
are, in fact, affiliates of the registrant.
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/A or any amendment to this Form 10-K/A. [
X ]
The following items of the Registrant's Form 10-K for the year
ended December 31, 1995 are hereby amended to read in their
entirety as follows:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The directors and executive officers of the Company are as follows:
[CAPTION]
<TABLE>
<S> <C> <C>
Name Age Position(s) Held with the
Company
Donald L. Smith, Jr . . 74 Chairman of the Board, President
and
Chief Executive Officer
Richard L. Hornsby. . . 60 Executive Vice President and
Director
Henry C. Obenauf. . . . 66 Vice President-Engineering
Walter B. Barrett . . . 38 Vice President-Finance, Chief
Financial Officer and Treasurer
Donald L. Smith, III. . 43 Vice President-Construction
Operations
Robert L. Kester. . . . 76 Director
Robert A. Steele. . . . 80 Director
</TABLE>
Donald L. Smith, Jr., a co-founder of the Company, has served as
its Chairman of the Board, President and Chief Executive Officer
since its formation in 1951.
Richard L. Hornsby was appointed the Company's Executive Vice
President in March 1989. Mr. Hornsby served as Vice President of
the Company from August 1986 to February 1989. From September 1981
until July 1986 he was Financial Manager of R.O.L., Inc. and
L.O.R., Inc., companies primarily engaged in various private
investment activities. He has been a director of the Company since
1975 and served as Vice President-Finance from 1972 to 1977.
Henry C. Obenauf was appointed Vice President-Engineering of the
Company in March 1989, after having served as Vice President of the
Company since 1977. Mr. Obenauf has been employed by the Company
for over 21 years.
Walter B. Barrett has served as Vice President-Finance, Chief
Financial Officer and Treasurer since May 1991. Prior to that and
from August 1985 he served as Treasurer and Chief Financial Officer
of James A. Cummings, Inc., a large South Florida general
contractor.
Donald L. Smith, III, was appointed Vice President-Construction
Operations for the Company in December 1992. Prior to that and from
March 1992, he served as Assistant Vice President of Construction
Operations-South Florida and Caribbean of the Company. Mr. Smith
joined the Company in 1976 and has served in various supervisory
and managerial positions with the Company since that time.
Robert L. Kester, a director of the Company since 1972, is a
private investor and is Chairman of the Board of Big Sky Western
Bank in Big Sky, Montana. Mr. Kester retired from active employment
with Florida Coast Bank of Pompano Beach, Florida after its
acquisition by Barnett Bank of Florida in 1984.
Robert A. Steele, a director of the Company since May 1989, has
been Chairman of the Board, Chief Executive Officer and a principal
shareholder of SFM Leasing Company, Inc. and RAMS Leasing Company,
Inc. since 1972. Both companies were engaged in the heavy truck and
equipment leasing business. Currently, these companies are
primarily engaged in various investment activities. Mr. Steele has
also been managing partner of Steele Associates, Ltd. since 1981
and SFM Realty Associates since 1985, both of which are primarily
engaged in various investment activities.
Donald L. Smith, III is the son of Donald L. Smith, Jr., the
Company's Chairman, President and Chief Executive Officer. Aside
from the foregoing, there are no family relationships between any
directors or executive officers of the Company. Certain other
children of Donald L. Smith, Jr., are employed by the Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own
more than 10 percent of the Company's Common Stock, to file with
the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock.
Officers, directors and greater than 10 percent shareholders are
required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no
other reports were required, during the fiscal year ended December
31, 1995 all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners
were complied with.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth compensation awarded to, earned by
or paid to the Company's Chief Executive Officer and each of the
other three executive officers of the Company who had an annual
salary and bonus in 1995 in excess of $100,000 (collectively, the
"Named Executive Officers"). The Company has not granted any
restricted stock awards or stock appreciation rights.
SUMMARY COMPENSATION TABLE
[CAPTION]
<TABLE>
<S> <C> <C> <C>
Annual Compensation
Other
Annual
Compen-
Name and Fiscal sation
Principal Position Year Salary($) Bonus($) ($)(1)
Donald L. Smith, Jr. 1995 260,000 - -
Chairman of the
Board, President 1994 260,000 - -
and Chief 1993 260,000 - -
Executive Officer
Richard L. Hornsby 1995 165,000 - 9,000
Executive Vice
President 1994 165,000 - 9,000
1993 165,000 - 4,000
Walter B. Barrett 1995 117,058 5,000 5,000
Vice President-
Finance, 1994 110,227 5,000 5,000
Chief Financial
Officer and 1993 100,000 - -
Treasurer
Donald L. Smith, III 1995 98,450 10,000 5,000
Vice President- 1994 96,104 12,500 5,000
Construction
Operations 1993 82,703 1,500 -
(continued)
<S> <C> <C>
Long Term
Compensation
All
Awards Payouts Other
LTIP Compen-
Name and Options Payouts sation
Principal Position (#) ($) ($)(2)
Donald L. Smith, Jr. - - 4,800
Chairman of the Board, - - 4,800
President and - - 61,028
Chief Executive Officer
Richard L. Hornsby 30,000 - 70,636
Executive Vice President - - 70,736
- - 71,715
Walter B. Barrett 30,000 - -
Vice President-Finance, - - -
Chief Financial Officer - - -
and Treasurer
Donald L. Smith, III 30,000 - 10,418
Vice President- - - 10,558
Construction Operations - - 9,355
</TABLE>
- --------------------
(1) Does not include the dollar value of personal benefits, such
as the cost of automobiles and health insurance, the aggregate
value of which for each named executive officer was less than
10% of such executive officer's salary and bonus. Includes
$4,000 a year for Mr. Hornsby, representing a retainer paid to
all directors other than Mr. Smith and $5,000 per year for
Messrs. Hornsby, Barrett and Donald L. Smith, III for service
on a management policy committee.
(2) Represents (i) the cost of term and non term life insurance
coverage for Messrs. Smith, Hornsby, and Donald L. Smith, III
in fiscal 1993 and Messrs. Hornsby and Donald L. Smith, III in
1995 and 1994 pursuant to a split dollar life insurance policy
on the life of the executive officer and (ii) the Company's
match of a 401(k) contribution made by each named executive
officer. The Company will be reimbursed for its non term
premium payments at such time as benefits are paid under the
policies or the policies are terminated and the cash proceeds
distributed. Donald L. Smith, Jr.'s policy was cancelled in
1994.
OPTION GRANTS AND LONG-TERM INCENTIVE AWARDS
The following table sets forth certain information concerning stock
option grants to the Named Executive Officers during the 1995 year.
No stock appreciation rights or long-term incentive awards were
granted to the Named Executive Officers during 1995.
OPTION GRANTS IN LAST FISCAL YEAR
[CAPTION]
<TABLE>
<S> <C> <C> <C> <C>
Percent
of Total
Options
Number of Granted to
Securities Employees Exercise
Underlying in Fiscal or Base
Options Year Price Expiration
Name (#) (%) ($/Sh) Date
Donald L. Smith, Jr. - - - -
Richard L. Hornsby 30,000(1) 14.29 6.75 6/16/06
Walter B. Barrett 30,000(1) 14.29 6.75 6/16/06
Donald L. Smith,
III 30,000(1) 14.29 6.75 6/16/06
(continued)
<S> <C>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term
Name 5% ($) 10% ($)
Donald L. Smith, Jr. - -
Richard L. Hornsby 164,100 381,300
Walter B. Barrett 164,100 381,300
Donald L. Smith, III 164,100 381,300
</TABLE>
- --------------------
(1) Option becomes exercisable at the rate of 20% on each
anniversary of the date of grant, which was June 16, 1995.
(2) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the
options immediately prior to the expiration of their term,
assuming the specified compounded rates of appreciation on
the
Company's Common Stock over the term of the options. These
numbers do not take into account provisions providing for
termination of the option following termination of
employment,
nontransferability or vesting or the potential exercise of
options and sale of the underlying shares prior to expiration
of the term.
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as
of the end of the 1995 year. No stock appreciation rights have been
granted or are outstanding.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
[CAPTION]
<TABLE>
<S> <C> <C> <C>
Number of Securities
Underlying Unexercised
Shares Options at
Acquired Fiscal Year-End (#)
On Value
Exercise Realized Excer- Unexcer-
Name (#) ($) cisable cisable
Donald L. Smith,
Jr. - - 75,000 -
Richard L. Hornsby - - 16,125 41,250
Walter B. Barrett - - 10,000 40,000
Donald L. Smith, III - - 15,450 37,500
<continued)
<S> <C>
Value
of Unexercised
In-the-Money
Options at
Name Fiscal Year-End ($) (1)
Exer- Unexer-
cisable cisable
Donald L. Smith, Jr. 387,750 -
Richard L. Hornsby 83,366 80,663
Walter B. Barrett (2) 22,500
Donald L. Smith, III 79,877 61,275
</TABLE>
- --------------------
(1) The closing price for the Company's Common Stock as reported
on the National Association of Securities Dealers Automated
Quotation System ('NASDAQ') on December 31, 1995 was $7.50.
Value is calculated by multiplying (a) the difference between
$7.50 and the option exercise price by (b) the number of
shares of Common Stock underlying the option.
(2) Exercise price exceeded closing price at December 31, 1995.
DIRECTOR COMPENSATION
The Company's directors hold office until the next annual meeting
of shareholders and until their successors have been duly elected
and qualified. The Company's officers are elected annually by the
Board of Directors and serve at the discretion of the Board. There
are no arrangements or understandings with respect to the selection
of officers or directors. The Company pays each director other than
Mr. Smith an annual retainer of $4,000. Non employee directors who
serve on the Compensation Committee or Audit Committee are paid an
annual fee of $1,000 or $500, depending on the level of
responsibility they assume.
Pursuant to the 1992 Directors' Stock Option Plan (the 'Directors'
Plan'), the Company's non-employee directors were granted options
to purchase 8,000 shares of Common Stock upon the approval of the
Directors' Plan by shareholders. A new non-employee director would
receive a similar option upon the commencement of service as a
director. In addition, each non-employee director is granted
options to purchase 1,000 shares of Common Stock after each annual
meeting of the Company, pursuant to the Directors' Plan. For
purposes of the Directors' Plan, a director is a non-employee
director if he does not receive regular compensation from the
Company or its subsidiaries other than directors fees and
reimbursement for expenses, even if such director is an officer of
a subsidiary of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee members are Robert Kester and Robert A.
Steele.
Robert A. Steele (a director and shareholder of the Company) has a
2% interest in an oceangoing bulk cement ship in which the Company
has a 98% interest.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of April 23, 1996 the number of
shares beneficially owned and the percentage of ownership of the
Company's Common Stock by (i) each person known to the Company to
own beneficially more than 5 percent of the outstanding Common
Stock, (ii) each director of the Company, (iii) each of the Named
Executive Officers, including the President and Chief Executive
Officer, and (iv) all directors and executive officers of the
Company as a group.
[CAPTION]
<TABLE>
<S> <C>
Common Stock
Name and Address Beneficially Owned (2)
Shares Percent
Donald L. Smith, Jr.(3) . . . . . . 1,263,431 27.24%
Smithcon Family Investments, Ltd.(4) 980,372 21.14%
Robert A. Steele(5) . . . . . . . . 231,000 4.98%
Robert L. Kester (6). . . . . . . . 12,600 *
Richard L. Hornsby(7) . . . . . . . 47,625 1.03%
Walter B. Barrett(8). . . . . . . . 11,600 *
Donald L. Smith, III(9) . . . . . . 94,939 2.05%
Dimensional Fund Advisors, Inc.(10) 248,900 5.37%
Quest Advisory and Charles M. Royce
Group(11) . . . . . . . . . . . . 341,700 7.37%
Tweedy, Browne Company L.P. and
TBK Partners, L.P.(12). . . . . . 364,300 7.86%
All directors and executive officers
as a group (seven persons)(13). . 1,676,195 36.14%
</TABLE>
- --------------------
* Less than 1%.
(1) Unless otherwise indicated, the address of each of the
beneficial owners is 1350 East Newport Center Drive, Suite
201, Deerfield Beach, Florida 33442.
(2) Unless otherwise indicated, each person or group has sole
voting and investment power with respect to all such shares.
(3) Includes (i) 922,058 shares held by Smithcon Family
Investments, Ltd. (such number of shares reflecting Mr.
Smith's ownership interest in such entity), a partnership
whose sole general partner is Smithcon Investments, Inc. (the
"Corporation"), a corporation that is wholly owned by Mr.
Smith, (ii) 27,942 shares beneficially held by the Corporation
and (iii) 75,000 shares issuable upon exercise of options that
are presently exercisable.
(4) See footnote (3) for description of relationship between
Smithcon Family Investments, Ltd. and Donald L. Smith, Jr.
(5) Includes 11,000 shares issuable upon exercise of options that
are presently exercisable.
(6) Includes 11,000 shares issuable upon exercise of options that
are presently exercisable.
(7) Includes 16,125 shares issuable upon exercise of options
granted by the Company that are presently exercisable and
30,000 shares issuable upon exercise of an option that is
presently exercisable, granted by Mr. Donald L. Smith, Jr., to
Mr. Hornsby to purchase shares of Mr. Smith's Common Stock at
an exercise price of $2.33 per share. Does not include 41,250
shares subject to options held by Mr. Hornsby that are not
presently exercisable.
(8) Shares are owned jointly by Mr. Barrett and his wife. Includes
10,000 shares issuable upon exercise of options that are
presently exercisable. Does not include 40,000 shares issuable
upon exercise of options that are not presently exercisable.
(9) Includes (w) 37,089 shares directly owned by Mr. Smith and his
wife (x) 42,400 shares beneficially owned that are held in
trust by Donald L. Smith, III for the benefit of his minor
children, to which latter shares Mr. Smith disclaims
beneficial ownership and (y) 15,450 shares issuable upon
exercise of options that are presently exercisable. Does not
include 37,500 shares issuable upon exercise of options that
are not presently exercisable.
(10) The address for Dimensional Fund Advisors, Inc.
('Dimensional') is 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401. Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of 248,900
shares (Dimensional has sole dispositive power over all such
shares and sole voting power with respect to 207,000 of such
shares), all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and
the DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional
Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares. The
information with respect to Dimensional is based solely on a
Form 13G dated February 7, 1996.
(11) The address for Quest Advisory Corp. and Charles M. Royce is
1414 Avenue of the Americas, New York, New York 10019.
Includes 341,700 shares with respect to which Quest Advisory
Corp. has sole voting and sole dispositive power. Charles M.
Royce may be deemed to be a controlling person of Quest
Advisory Corp. and as such may be deemed to beneficially own
such shares. Mr. Royce has disclaimed beneficial ownership of
such shares. The information with respect to this group is
based solely on a Form 13G dated February 14, 1996.
(12) The address for Tweedy, Browne Company L.P. and TBK Partners,
L.P. is 52 Vanderbilt Avenue, New York, New York 10017.
Includes 304,075 shares with respect to which Tweedy, Browne
Company, L.P. has sole voting power, 3,000 shares to which TBK
Partners, L.P. has sole voting and dispositive power, and
361,300 shares to which Tweedy, Browne Company, L.P. has
shared dispositive power. Certain of the general partners of
Tweedy, Browne Company, L.P. may be deemed to have sole power
to vote certain shares owned by Tweedy, Browne Company L.P.
TBK Partners, L.P. and Tweedy, Browne Company L.P. have each
disclaimed beneficial ownership of shares held by each other.
The information with respect to Tweedy, Browne Company L.P.
and TBK Partners, Ltd. is based solely on a Form 13D, dated
January 24, 1994 and Amendment No. 1 to Form 13D, dated
February 2, 1994.
(13) Includes 45,000 shares owned by Mr. Obenauf, the Company's
Vice President--Engineering.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1989, an Antiguan subsidiary of the Company obtained a minority
interest in a partnership that acquired a manufacturer of
acoustical ceiling tiles in Matamoros, Mexico and that is engaged
in the sale, distribution and marketing of such tiles. The
subsidiary invested approximately $1.2 million in the partnership
for a 29 percent interest and two of the Company's officers and
directors, Messrs. Smith, Jr. and Hornsby, obtained an 11 percent
interest for which they paid $450,000. In January 1994, another
Antiguan subsidiary of the Company became the new general partner
of the partnership and was assigned all the rights and assumed all
the liabilities of the former Antiguan subsidiary with respect to
the partnership. In connection with an amendment of the
partnership agreement, the Antiguan subsidiary and the Company, as
applicable, contributed a note receivable of $505,000 from the
partnership into equity and contributed approximately $235,000 of
equipment to the partnership. The Antiguan subsidiary's ownership
interest in the partnership was increased to 64.47 percent. The
ownership interest of Messrs. Smith, Jr. and Hornsby was reduced to
6.47 percent.
Robert A. Steele (a director and shareholder of the Company) has a
2% interest in an oceangoing bulk cement ship in which the Company
has a 98% interest.
The Company leases a 4.4 acre parcel of real property from Mr.
Smith, pursuant to which Mr. Smith received $46,512 in annual rent
in 1995.
The Company has borrowed $4.6 million from Donald L. Smith, Jr.
One note has an outstanding balance of approximately $4.5 million,
is unsecured, bears interest at the prime interest rate and is due
in full on January 1, 1997. The other note has a balance of
$100,000, is secured by equipment, bears interest at 8 percent per
annum and is due in monthly principal installments of $10,000, plus
interest through February 1997.
The Company believes that, to the extent applicable, the foregoing
transactions were on terms no less favorable to the Company than
those that could have been obtained from independent third parties.
SIGNATURE
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, there-
unto duly authorized.
April 29, 1996 DEVCON INTERNATIONAL CORP.
By:/s/Walter B. Barrett
Walter B. Barrett
Chief Financial Officer
