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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
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: 1-9511
THE COAST DISTRIBUTION SYSTEM, INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-2490990
(State of Incorporation) (I.R.S. Employer
Identification No.)
350 Woodview Avenue, Morgan Hill, California 95037
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (408) 782-6686
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, par value $.001 per share American Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
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 a 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]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of March 17, 1999, was approximately $10,229,000 (based upon the
closing price for shares of the Registrant's Common Stock as reported by the
Nasdaq National Market for the last trading date prior to that date). Shares of
Common Stock held by each officer, director and holder of 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
On March 17, 1999, approximately 4,829,640 shares of the Registrant's Common
Stock, par value $.001 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE.
NONE
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Thomas R. McGuire.................. 55 Chairman of the Board,
Chief Executive Officer and Director
Sandra A. Knell.................... 41 Executive Vice President - Finance,
Chief Financial Officer and Secretary
Jeffrey R. Wannamaker.............. 38 Executive Vice President and President of the
Distribution Division of the Company
David A. Berger.................... 45 Executive Vice President
Dennis A. Castagnola............... 51 Executive Vice President and President of
the DTS Products Division of the Company
Louis B. Sullivan.................. 74 Director
John E. Turco...................... 68 Director
Ben A. Frydman..................... 52 Director
Robert S. Throop................... 61 Director
John W. Casey...................... 55 Director
</TABLE>
Thomas R. McGuire is a founder of the Company and for more than five
years has been Chairman of the Board and Chief Executive Officer of the Company.
From 1981 until August 1985 he also served as the Company's Chief Financial
Officer and Secretary.
Sandra A. Knell has been the Company's Executive Vice President -
Finance, Chief Financial Officer and Secretary since August 1985. From 1984
until she joined the Company, Mrs. Knell was an Audit Manager, and for the prior
four years was a senior and staff accountant, with Grant Thornton (formerly
Alexander Grant & Co.). Mrs. Knell is a Certified Public Accountant.
Jeffrey R. Wannamaker, who joined the Company in 1984, has been
Executive Vice President - Operations since 1995. From 1991 and until his
promotion to Executive Vice President, Mr. Wannamaker held the position of
Senior Vice President - Branch Operations of the Company. Prior to that time he
held various other management positions with the Company. In 1997, Mr.
Wannamaker was appointed as President of the Company's Coast Distribution
Division which markets and supplies products to RV and boating After-Market
Customers.
David A. Berger served as Executive Vice President - Marketing from May
1988 until September 1993. Due to the growth of the Company's marine products
sales, in September 1993 the Company's marketing department was restructured
into two separate departments, one for marine products and the other for R.V.
products, and Mr. Berger was placed in charge of marketing for the Company's
marine products division. From August 1986 to May 1988, Mr. Berger was Senior
Vice President - Purchasing of the Company. For the prior 14 years he held
various management positions with C/P Products Corp., a distributor of
recreation vehicle parts and accessories acquired by the Company in 1985.
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Dennis A. Castagnola was appointed to his current position of Senior
Vice President-Proprietary Products in May 1994, in which he directs the
Company's Proprietary Products program. From September 1993 until May 1994, he
served as Senior Vice President - R.V. Sales and Marketing. For the prior 19
years, he held various positions with the Company, including Vice
President/Division Manager of the Company's Portland, Oregon Distribution
Center. In 1997, Mr. Castagnola was appointed as President of the Company's new
DTS Division which markets and supplies proprietary products to RV and boating
manufacturers and to customers in markets other than the RV and boating
After-Market.
Louis B. Sullivan has served as a director since 1977, and has been a
rancher and private investor since March 1984.
John E. Turco has served as a director since 1977, and has been a
private investor since 1988, investing primarily in agricultural businesses.
Ben A. Frydman has served as a director sine 1988. Mr. Frydman is, and
for more than five years has been, engaged in the private practice of law, as a
member and shareholder of Stradling Yocca Carlson & Rauth, a Professional
corporation, which provided legal services to the Company in 1997.
Robert S. Throop has served as a director since 1995. Until his
retirement in late 1996, and for more than five years prior thereto, Mr. Throop
was the Chairman and Chief Executive Officer of Anthem Electronics, Inc.
("Anthem"), which is a national distributor of semiconductor and computer
products. Mr. Throop is also a director of Arrow Electronics, Inc., the
corporate parent of Anthem, and the Manitowoc Company.
John W. Casey has served as a director since August 1998. From 1980 and
until his retirement in 1994, Mr. Casey was President and Chief Executive
Officer of Shurflo Pump Mfg. Company ("Shurflo"), which is engaged in the
manufacture and sale of pumps used in pumping and circulating water or other
liquids in a variety of products and equipment, including recreational vehicles
and soft drink dispensing machines. Mr. Casey serves as a director of Shurflo,
the Deschutes Basin Land Trust and the RV/MHI Heritage Foundation, Inc.
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ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth compensation received for the three
fiscal years ended December 31, 1998, by the Company's Chief Executive Officer,
and the other executive officers whose aggregate cash compensation for services
rendered to the Company in all capacities in 1998 exceeded $100,000
(collectively, the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL ------------------------------------------ UNDERLYING
POSITION YEAR SALARY($) BONUS(1) OPTIONS(#)
- ------------------------- ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Thomas R. McGuire 1998 $248,276 $20,000 -0-
Chairman of the Board 1997 248,303 -0- 47,500
and Chief Executive Officer 1996 263,532 59,250 -0-
Sandra A. Knell 1998 143,366 13,500 50,000
Chief Financial Officer 1997 134,039 -0- 20,000
and Executive Vice 1996 121,192 30,500 -0-
President
Jeffrey R. Wannamaker 1998 160,193 16,500 50,000
Executive Vice President 1997 134,039 -0- 20,000
and President of 1996 121,192 30,500 -0-
Distribution Division
David A. Berger 1998 112,116 10,000 20,000
Executive Vice President 1997 106,542 -0- 20,000
1996 102,248 30,500 -0-
Dennis A. Castagnola 1998 112,116 10,000 20,000
Executive Vice President 1997 108,437 -0- 12,500
and President of the 1996 94,313 22,100 -0-
DTS Division
</TABLE>
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(1) Bonuses were awarded under annual incentive compensation plans.
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OPTION GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
PERCENT OF OF OPTIONS AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING ALL EMPLOYEES EXERCISE OPTION TERM(4)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------------
NAME GRANTED(1) YEAR(2) ($/SHARE)(3) DATE 5% 10%
---- ---------- ------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Thomas R. McGuire -0- 0.0% N/A N/A $ -0- $ -0-
Sandra A. Knell 50,000 28.9 3.1875 1/07/08 100,000 254,000
Jeffrey R. Wannamaker 50,000 28.9 3.1875 1/07/08 100,000 254,000
David A. Berger 20,000 11.6 3.1875 1/07/08 40,000 101,600
Dennis A. Castagnola 20,000 11.6 3.1875 1/07/08 40,000 101,600
</TABLE>
- ----------------------
(1) These options vest in five equal annual installments of 20% of the
shares covered by such options. Each option is subject to termination in
the event of the optionee's cessation of employment with the Company.
(2) Options to purchase an aggregate of 173,000 shares were granted to all
employees in fiscal 1998, including the Named Officers. Each
non-employee director received options to purchase 2,000 shares in 1998.
(3) The exercise price may be paid in cash, in shares of the Company's
Common Stock valued at fair market value on the date of exercise, or
through a cashless exercise procedure.
(4) There is no assurance that the values that may be realized on exercise
of such options will be at or near the values estimated in the table,
which arbitrary compounded rates of growth of the price of the Company's
stock of 5% and 10% per year.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
There were no option exercises by any of the Named Officers in 1998. In
addition, none of the Named Officers held any in-the-money options as of
December 31, 1998.
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COMPENSATION COMMITTEE INTERLOCKS
In fiscal 1998, the members of the Compensation Committee were Louis B.
Sullivan, Robert S. Throop, and John E. Turco, each of whom is a non-employee
director of the Company.
DIRECTOR'S COMPENSATION
Directors who also are Company employees receive no compensation for
serving as directors. Non-employee directors are paid a retainer of $6,000 per
year and receive $1,500 for each Board of Directors' meeting attended and are
reimbursed for the out-of-pocket expenses incurred in attending those meetings.
No compensation is paid for attending meetings of Committees of the Board of
Directors on which directors serve. Pursuant to the Company's 1993 Employee
Stock Option Plan, each year each non-employee director is automatically granted
an option to purchase 2,000 shares of Company stock at an exercise price that is
equal to the fair market value of the shares on the date of grant. These options
become fully exercisable six months after the date of grant. Upon joining the
Board, each new non-employee director receives an option to purchase 2,000
shares, which becomes exercisable in full one year after the date of grant.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based on its review of copies of reporting forms and certifications of
the Company's directors and executive officers, the Company believes that all
filing requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its directors and executive officers in the year ended December
31, 1998 were satisfied.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 17, 1999, information
regarding the ownership of the Company's outstanding common stock by each person
known to management to own, beneficially or of record, more than five percent
(5%) of the common stock and by each director and the Named Officers of the
Company and all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ----------------------- --------
<S> <C> <C>
Thomas R. McGuire 657,829(2) 13.9%
1982 Zanker Road
San Jose, CA 95112
Dimensional Fund Advisors Inc. 404,600(3) 8.3%
1299 Ocean Avenue
Santa Monica, CA 90401
John E. Turco 222,192(4) 4.6%
Louis B. Sullivan 130,470(4) 2.7%
John W. Casey 9,000(4) *
Ben A. Frydman 13,000(4) *
Robert S. Throop 15,000(4) *
Sandra A. Knell 92,465(5) 1.9%
Jeffrey R. Wannamaker 72,490(5) 1.5%
David A. Berger 60,831(5) 1.2%
Dennis A. Castagnola 21,246(5) *
All directors and officers
as a group (10 persons) 1,315,523(6) 25.7%
</TABLE>
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* Less than 1%.
(1) Except as otherwise noted below, the persons named in the table have sole
voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where
applicable.
(2) Does not include an aggregate of 50,016 shares held in trust for the
benefit of Mr. McGuire's adult children, as to which Mr. McGuire disclaims
beneficial ownership. Includes 34,750 shares subject to outstanding stock
options exercisable during the 60-day period ending May 17, 1999.
(3) In a report filed with the Securities and Exchange Commission, Dimensional
Fund Advisors, Inc., a registered investment advisor ("DFA"), has reported
that all 404,600 shares are held in portfolios of DFA Investment
Dimensions Group, Inc., a registered open ended investment company or in
series of the DFA Investment Trust Company, a Delaware business trust , or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans for which DFA serves as investment
manager. DFA disclaims beneficial ownership of all such shares.
(4) Includes shares subject to outstanding stock options, as follows: Mr.
Sullivan -- 12,000 shares; Mr. Turco -- 12,000 shares; Mr. Frydman --
12,000 shares; and Mr. Throop -- 10,000 shares.
(5) Includes shares subject to outstanding stock options exercisable during
the 60-day period ending May 17, 1999, as follows: Ms. Knell -- 54,500
shares; Mr. Wannamaker -- 54,500 shares; Mr. Berger -- 42,500 shares; and
Mr. Castagnola -- 16,750 shares.
(6) Includes 251,000 shares subject to outstanding stock options exercisable
during the 60-day period ending May 17, 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Amendment to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: April 28, 1999 THE COAST DISTRIBUTION SYSTEM, INC.
By: /s/ SANDRA A. KNELL
------------------------------------
Sandra A. Knell,
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment on Form 10K/A has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ THOMAS R. MCGUIRE* Chairman of the Board of Directors, Chief April 28, 1999
- ------------------------------------ Executive Officer and Director
Thomas R. McGuire
/s/ SANDRA A. KNELL Executive Vice President (Principal April 28, 1999
- ------------------------------------ Financial and Principal Accounting Officer)
Sandra A. Knell
/s/ JOHN E. TURCO* Director April 28, 1999
- ------------------------------------
John E. Turco
Director April __, 1999
- ------------------------------------
Louis B. Sullivan
/s/ ROBERT S. THROOP* Director April 28, 1999
- ------------------------------------
Robert S. Throop
/s/ BEN A. FRYDMAN Director April 28, 1999
- ------------------------------------
Ben A. Frydman
Director April __, 1999
- ------------------------------------
John W. Casey
*By: /s/ SANDRA A. KNELL April 28, 1999
-------------------------------
Sandra A. Knell,
Attorney-in-Fact
</TABLE>
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