<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K/A No. 1
(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
Commission File Number: 0-18858
KAISER VENTURES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-0594733
- ------------------------------- -----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3633 E. Inland Empire Blvd. Suite 850
Ontario, Ca 91764
- ------------------------------------------
(Address of principal executive offices and
zip code)
Registrant's telephone number, including area code: (909) 483-8500
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class which Registered
- ------------------------------- -------------------------------
Common Stock ($.03 par value) Nasdaq Stock Market(SM)
______________________________
Securities 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 check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405 of this chapter) 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. Yes X No
--- ---
The aggregate market value of the registrant's Common Stock, $.03 par value,
held by non-affiliates of the registrant was approximately $48,400,535 based
upon the average of the bid and ask prices of registrant's Common Stock on the
Nasdaq Stock Market(SM) at March 23, 1999, or $9.50 per share.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
--- ---
At March 23, 1999, 10,699,354 shares of the registrant's Common Stock, $.03 par
value, were outstanding, including 136,919 shares deemed outstanding but
reserved for issuance to the general unsecured creditors of Kaiser Steel
Corporation.
Documents Incorporated By Reference: None.
<PAGE>
Part III of the 10-K Report previously anticipated to be incorporated
by reference from the Company's Proxy for its 1999 Annual meeting is set forth
herein. Accordingly, the Company's 10-K Report for the year ended December 31,
1998, is hereby amended by the inclusion of the following information:
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
The following information pertains to the current members of the Board of
Directors.
Name and Age Principal Occupation and Other Directorships
=============================== ==============================================
E. Stoddard (48) Mr. Stoddard was appointed Chief Executive
Officer of the Company in June 1988, and has
held such position and/or the position of
Chairman of the Board since such date. Prior
to joining the Company in 1988, he was an
attorney in private practice in Denver,
Colorado. Mr. Stoddard is Chairman of the
Board of Directors of Mine Reclamation
Corporation and also serves on the Board of
Directors of Penske Motorsports, Inc.
("PMI"). The Company currently owns
approximately 11.73% of the issued and
outstanding shares of PMI's common stock (see
"Related Transactions" below).
Ronald E. Bitonti (66) Mr. Bitonti is Chairman of the Benefits
Committee for the VEBA and was Chairman of
the Reorganized Creditors' Committee formed
during the Kaiser Steel Corporation ("KSC")
bankruptcy until dissolution of this
committee in 1991. From 1985 to 1991, Mr.
Bitonti served as International
Representative for the United Steelworkers of
America. Mr. Bitonti retired from KSC in 1981
and has been a director since November 1991.
Todd G. Cole (78) Mr. Cole was Chief Executive Officer of CIT
Financial Corporation before starting his
present career as a consultant and corporate
director. From 1992 to 1996 he was managing
director of SH&E, Inc., the oldest consulting
firm specializing in aviation, in charge of
its Miami office. In his consulting role he
served as president and chief financial
officer of Frontier Airlines, Inc., D.I.P.
(1986-1989) and vice-chairman of Eastern Air
Lines, Inc., D.I.P. (1989-1991). He serves on
the Board of Directors of Arrow Air, Inc.
(certificated scheduled and charter air cargo
carrier), Avborne, Inc. (aircraft and
component overhaul), Hawaiian Airlines, Inc.
(certificated passenger and cargo carrier),
International Business Network for World
Commerce and Industry, Ltd. (Bermuda-based
internet service), and NAC Re Corporation
(international property and casualty
reinsurance). Mr. Cole has been a director
since November 1989.
2
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<TABLE>
<CAPTION>
Name and Age Principal Occupation and Other Directorships
=============================== ==========================================================================
<S> <C>
Gerald A. Fawcett (66) Mr. Fawcett was President and Chief Operating
Officer of the Company from January 1996
until his retirement from full time duties on
January 15, 1998. He was appointed to the
Company's Board on January 15, 1998, and
currently serves as Vice Chairman of the
Board. Mr. Fawcett started his employment
with the former Kaiser Steel Corporation in
1951 holding various positions in the steel
company, ultimately becoming Division
Superintendent of the Cold Rolled and Coated
Products Division. After a five year
consulting business working with domestic and
overseas steel industry clients, Mr. Fawcett
joined the Company in 1988 as Senior Vice
President and became Executive Vice President
in October 1989. He is also Vice Chairman of
the Board of Mine Reclamation Corporation,
and of the Board of the Inland Valley Federal
Credit Union.
Gary Gibbons (50) Mr. Gibbons has been the principal and owner
of the Coleridge Group, a registered
investment advisor, since 1987. In such
capacity he represents a variety of clients
by providing financial and investment advice,
including the management of investment
portfolios. Mr. Gibbons is the financial and
investment advisor for VEBA. In addition,
from 1989 to 1991 Mr. Gibbons held various
positions with Houlihan Lokey Howard and
Zukin Investment Management, Inc., with his
final position being that of Managing
Director. Mr. Gibbons is currently a director
of The Industrial Development Authority of
the County of Maricopa, the State of
Arizona's largest industrial development
authority. Mr. Gibbons has been a director of
the Company since April 1998.
Reynold C. MacDonald (80) Mr. MacDonald served as Chairman of the Board
for Acme Metals Company from 1986 until 1992
and continues with Acme as a member of the
board. Acme is currently in a Chapter 11
bankruptcy proceeding. From 1983 to 1986, Mr.
MacDonald was director of and consultant to
Interlake, Inc., a metals fabrication and
materials handling company. He retired as
Chairman and Chief Executive Officer of
Interlake in 1983. He also served as a
director of ARAMARK Group, Inc. from November
1988 to February 1999.
William J. Morgan (44) Mr. Morgan is the President, a Director, and
a major shareholder of Pacholder Associates,
Inc. ("PAI"), a registered investment
advisor. Mr. Morgan has been with PAI since
1984. Mr. Morgan also serves on the Board of
Directors of the following public companies:
ICO, Inc. (an oil field service company),
USF&G Pacholder Fund, Inc. (a closed end
mutual fund), Duckwall-ALCO Stores, Inc. (a
discount retail chain), Smith Corona Corp.
(office products manufacturer), and
Premiumware, Inc. (apparel manufacturer). Mr.
Morgan is also the Vice President and a
Director of Winton Associates, Inc., a
broker/dealer that is a subsidiary of PAI.
Mr. Morgan has been a director of the Company
since September 1994.
</TABLE>
3
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Name and Age Principal Occupation and Other Directorships
=============================== =============================================
Charles E. Packard (55) Mr. Packard has served since 1986 as a member
of the Board of Directors, Executive Vice
President, and Chief Financial Officer for
the Arnel Development Company, a real estate
investment, development, and management
company in Costa Mesa, California. Since
1977, Mr. Packard has also served as Vice
President and Chief Financial Officer of
Arnel Financial, where he supervises the
financial and administrative areas of 20
corporate entities, collectively referred to
as "Arnel & Affiliates." Mr. Packard also
serves on the board of directors of several
non-profit organizations. Mr. Packard has
been a director since November 1991.
Thomas S. Rabone (68) Mr. Rabone was engaged in public relations
with Barclay and Associates from 1987 to
1993. He is a KSC retiree and a Benefits
Committee member of the VEBA. Mr. Rabone was
a member of the Retiree Subcommittee of the
KSC Creditors' Committee. Currently he is a
member of the San Bernardino County Board of
Education. He has been a director since
November 1988.
Lyle B. Stevenson (71) Mr. Stevenson is Co-Chairman of the Benefits
Committee for the VEBA. He was also a member
of the KSC Reorganized Creditor's Committee
and the Retiree Subcommittee of the KSC
Creditors' Committee. Mr. Stevenson retired
from KSC in 1981 after holding several
management positions. He has been a director
since November 1991.
Marshall F. Wallach (56) Mr. Wallach has served as President of The
Wallach Company, a Denver, Colorado based
investment banking firm, since 1984. Prior to
forming The Wallach Company, Mr. Wallach
managed the corporate finance department and
established the mergers and acquisitions
department of Boettcher & Company, a regional
investment bank in Denver, Colorado. Mr.
Wallach serves on the boards of several non-
profit organizations and privately-owned
corporations. He has been a director since
November 1991
Board and Committee Meetings
The Board of Directors has established an Audit Committee, a Human
Relations Committee (formerly called the Compensation and Benefits Committee),
and a Finance Committee. Ad hoc committees are established from time-to-time by
the Board. Mr. Stoddard serves as an ex-officio member of all committees.
The Audit Committee, currently composed of Messrs. Packard (Chairman),
MacDonald, and Rabone, generally reviews the activities of the Company's
independent accountants and the results of the examination made by these
professionals in connection with the Company's financial statements and a review
of internal accounting controls. The Audit Committee held two meetings in 1998.
The Human Relations Committee, which currently is composed of Messrs.
Stevenson (Chairman), Bitonti, Cole, Fawcett, and Gibbons, has general
responsibility for all
4
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employee compensation and benefit matters, including recommendations to the full
Board on compensation arrangements of officers and directors, benefit plans,
stock options and other stock related grants. The Human Relations Committee held
five meetings in 1998.
The Finance Committee, which is currently composed of Messrs. Wallach
(Chairman), Gibbons, MacDonald, and Morgan, has general responsibility for the
Corporation's annual operating budget and capital plan, changes in the Company's
capital structure, and the Company's credit facilities such as lines of credit,
loans, and other forms of indebtedness. The Finance Committee held one meeting
in 1998.
The Board does not have a standing committee to nominate candidates to the
Board of Directors. The Board designated the Human Relations Committee as the
ad hoc nominating committee for 1998 and for 1999.
The Board of Directors held eight meetings in 1998. All directors of the
Company attended at least 75% of the meetings of the Board and 75% of the
meetings of the committees on which they served during 1998.
Executive Officers
The current executive officers of the Company are:
Name Age Position with the Company
---- --- -------------------------
Richard E. Stoddard 48 President, Chairman of the Board and Chief Executive
Officer
James F. Verhey 51 Executive Vice President - Finance and Chief
Financial Officer
Lee R. Redmond, III 46 Sr. Vice President - Real Estate
Terry L. Cook 43 Sr. Vice President, General Counsel and Corporate
Secretary
Pamela M. Catlett 33 Vice President - Corporate Relations
Anthony Silva 36 Vice President Resource Development and
Environmental Services
Richard E. Stoddard was appointed Chief Executive Officer of the Company in
June 1988, and has held such position and/or the position of Chairman of the
Board since such date. With the retirement of Gerald A. Fawcett as President
and Chief Operating Officer of the Corporation effective January 15, 1998, Mr.
Stoddard also became President of the Company. In addition, he serves as
Chairman of the Board of Directors and Executive Committee of Mine Reclamation
Corporation. Prior to joining the Company in 1988, he was an attorney in
private practice in Denver, Colorado. Mr. Stoddard also serves on the Board of
Directors of Penske Motorsports, Inc. ("PMI"). The Company currently owns
approximately 11.73% of the issued and outstanding shares of PMI's common stock
(see "Related Transactions" below).
James F. Verhey joined the Company and was appointed Vice President-Finance
and Chief Financial Officer in August 1993, appointed Senior Vice President-
Finance in January 1996, and appointed Executive Vice President of the Company
in January 1998. In addition to his duties with the Company, Mr. Verhey was
appointed Vice President of Finance and Chief Financial Officer of Mine
5
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Reclamation Corporation in February 1995. From July 1992 to joining the
Company, Mr. Verhey was the Chief Financial Officer of OESI Power Corp., a
Portland, Oregon based geothermal company. From June 1991 to July 1992, Mr.
Verhey served as President of Mithryn Energy, Inc. From August 1987 to June
1991, Mr. Verhey was President of two subsidiaries of Luz International, Ltd.
("Luz"), a developer of large-scale solar electric generating stations. Both
Luz and the two subsidiaries filed voluntary petitions in bankruptcy under
Chapter 11 after Mr. Verhey left the companies. Both filings were ultimately
converted to Chapter 7 liquidations. Luz and its subsidiaries have no
relationship with the Company. Mr. Verhey is a certified public accountant and
spent several years with Price Waterhouse in Los Angeles, California.
Lee R. Redmond III joined the Company and was appointed Vice President -
Real Estate for the Company in June 1994, and was appointed Senior Vice
President-Real Estate in January 1996. Prior to joining the Company, Mr.
Redmond was in charge of Birtcher Real Estate, Ltd's Riverside office as a
principal. Birtcher is a major U.S. real estate development, construction and
investment firm. In that position Mr. Redmond developed and managed substantial
industrial and office space. Before joining Birtcher in 1989, Mr. Redmond was
regional director of the Inland Empire for O'Donnell, Armstrong & Partners of
Irvine, California, a regional real estate developer. At O'Donnell he was
responsible for all land acquisitions and development in the California counties
of Riverside and San Bernardino. He is also a member of several national and
local professional and economic development organizations.
Terry L. Cook joined the Company and was appointed General Counsel and
Corporate Secretary in August 1993 and became a Senior Vice President in January
1996. Mr. Cook was appointed General Counsel and Corporation Secretary of Mine
Reclamation Corporation in February 1995. Prior to joining the Company, Mr.
Cook was a partner in the Denver office of the national law firm McKenna & Cuneo
specializing in business, corporate, and securities matters. Prior to his
joining McKenna & Cuneo in July 1988, Mr. Cook was an attorney in private
practice as a partner in a Denver, Colorado law firm.
Pamela M. Catlett became Vice President-Corporate Relations for the Company
in January, 1996. Prior to such position, since December 1992 she was the
Company's Director of Investor and Community Relations. Prior to joining the
Company from 1987 to 1992 she was the manager of corporate communications for
Willdan Associates, a California-based municipal engineering and planning firm.
Anthony Silva was appointed Vice President Resource Development and
Environmental Services in January 1998. In this position, Mr. Silva is
responsible for the oversight of the remediation of the site of the former
Kaiser Steel Corporation steel mill. Prior to this position, from December 1993
to October 1996, Mr. Silva was Vice President and Managing Principal with the
Park Corporation, an environmental consulting and water resources firm providing
technical expertise and long-term strategic environmental planning to industrial
and oil and gas companies. Prior to 1993, he was also the National Oil & Gas
Exploration & Production Business Development Director for Delta Environmental
Consultants and the Exploration & Production Manager for an independent oil and
gas company. Mr. Silva serves on the Board of Directors for the non-profit
Environmental Professionals Organization (EPO). Mr. Silva recently served as a
chairperson of the California Department of Toxic Substances Control's Site
Mitigation Update Advisory Group (Remedy Selection/Standards Planning Subgroup),
which was updating and improving the California Health and Safety Code.
6
<PAGE>
Item 11. EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ending December 31, 1998,
1997, and 1996, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued in those years, to the Company's President
and Chief Executive Officer, and the four other most highly compensated
executive officers of the Company in office at the end of fiscal year 1998,
whose total cash compensation exceeded $100,000 during fiscal year 1998 (the
"Named Executive Officers") in all capacities in which they served:
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------------------
Other
Annual Restricted Securities All Other
Name and Compen- Stock Underlying LTIP Compen-
Principal Position Year Salary(1) Bonus(2) sation(3) Awards(4) Options Payouts sation(5)
- -------------------------------- ---- ---------- ---------- --------- ----------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard E. Stoddard 1998 $302,120 $ 45,318 $0 $ 0 0 $0 $49,314
Chairman of the Board, 1997 $291,200 $131,040 $0 $40,000 0 $0 $46,848
President and CEO 1996 $280,000 $123,200 $0 $81,067 200,000 $0 $42,759
Gerald A. Fawcett (6) 1998 $ 66,167 $ 0 $0 $ 0 0 $18,615
Vice Chairman 1997 $208,000 $ 93,600 $0 $40,000 0 $0 $30,324
1996 $200,000 $ 88,000 $0 $69,333 40,000 $0 $20,174
James F. Verhey 1998 $193,592 $ 29,250 $0 $ 0 0 $0 $29,664
Executive Vice President-Finance 1997 $161,200 $ 72,540 $0 $20,000 0 $0 $23,320
& CFO 1996 $155,000 $ 68,200 $0 $42,733 100,000 $0 $18,772
Lee R. Redmond, III 1998 $167,245 $ 16,725 $0 $ 0 0 $0 $26,765
Sr. Vice President-Real 1997 $161,200 $ 72,540 $0 $20,000 0 $0 $23,320
Estate 1996 $155,000 $ 68,200 $0 $42,733 100,000 $0 $ 8,294
Terry L. Cook 1998 $167,245 $ 25,087 $0 $ 0 0 $0 $26,765
Sr. Vice President, General 1997 $161,200 $ 72,540 $0 $20,000 0 $0 $23,320
Counsel and Secretary 1996 $155,000 $ 68,200 $0 $42,733 100,000 $0 $18,772
Anthony Silva(7) 1998 $110,000 $ 22,000 $0 $ 0 25,000 $0 $11,470
Vice President Resource
Development & Envir. Services
</TABLE>
(1) A portion of the salary for each executive officer for 1996 and 1997 was in
the form of restricted stock subject to vesting requirements imposed by the
Board of Directors. The restricted stock portion of an officer's salary is
also included in the "Restricted Stock Awards" column above, together with
the portion of each officer's bonus received as restricted stock for any
applicable year.
(2) Bonuses are paid in January for the preceding calendar year. No restricted
stock was awarded as a part of the executive officer bonuses for 1998.
(3) Does not include the dollar value of perquisites and other personal
benefits. The aggregate amount of perquisites and other personal benefits
received by each executive officer did not exceed the lesser of $50,000 or
10% of the total annual salary and bonus reported for such executive
officer.
(4) Restricted stock, subject to vesting, was granted to Messrs. Stoddard,
Fawcett, Verhey, Redmond and Cook in January 1997, as part of their
respective bonuses for the preceding calendar year. These stock awards are
being reported in 1996, as it was a reflection of the Board's determination
of the executive's compensation for the calendar year preceding the grant.
This column also includes the value of restricted stock received as a part
of an officer's salary for 1996 and 1997.
(5) Officers of the Company are eligible to participate in the Company's 401(k)
Savings Plan, Money Purchase Plan and Supplemental Executive Retirement Plan
(collectively "Plans"). During 1998, the Company made contributions of
$49,314 to the Plans for the account of Mr. Stoddard, $29,664 for the
account of Mr. Verhey, $26,765 for the account of Messrs. Cook and Redmond,
and $8,615 for the account of Mr. Fawcett.
(6) Mr. Fawcett retired as President and Chief Operating Officer of the Company
as of January 15, 1998, and was appointed as Vice Chairman of the Board.
Mr. Stoddard assumed the duties of President of the Company as of such date.
(7) Mr. Silva did not become an executive officer of the Company until January
1998.
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Option Grants in 1998
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1998 to each of the
named Executive Officers:
<TABLE>
<CAPTION>
Percent of Total
Options Granted
Shares Underlying to Employees in Exercise Expiration
Name Option Granted Fiscal Year Price Date
<S> <C> <C> <C> <C>
Richard E. Stoddard 0 0% N/A N/A
James F. Verhey 0 0% N/A N/A
Lee R. Redmond 0 0% N/A N/A
Terry L. Cook 0 0% N/A N/A
Anthony Silva 25,000 61% $10.34 01/13/2008
</TABLE>
Aggregated Option Exercises in 1998
and Option Values at December 31, 1998
The following table summarizes options exercised during the fiscal year
ended December 31, 1998, by the executive officers named in the Summary
Compensation Table, and the value of their unexercised options as of December
31, 1998:
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Acquired on Options at 12/31/98 at 12/31/98
Name Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- -------- -------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Richard E. Stoddard 0 $0 126,037/169,563 $358,000/$0
James F. Verhey 0 $0 86,250/83,750 $ 74,000/$0
Lee R. Redmond, III 0 $0 67,501/87,499 $ 74,000/$0
Terry L. Cook 0 $0 85,625/84,375 $ 74,000/$0
Anthony Silva 0 $0 3,000/34,000 $ 0/$0
</TABLE>
(1) Stock price as of December 31, 1998 was $8.78 per share (average of bid and
ask prices).
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Mr. Stoddard is employed pursuant to a contract which was amended effective
January 15, 1998. The agreement provides for an annual base salary (which is
currently $302,120) adjusted annually by the annual increase in the consumer
price index. Mr. Stoddard has agreed to accept up to $40,000 of his annual base
salary in restricted common stock vesting over the period of time established by
the Board of Directors. The contract provides that Mr. Stoddard's employment
may be terminated at anytime upon twelve (12) months prior written notice,
together with payment of severance. In accordance with his past and current
employment contracts, and based upon the attainment of certain criteria, Mr.
Stoddard may be awarded annual bonuses based upon his then-existing salary. His
base salary and bonuses may be a combination of cash and restricted stock
shares.
Effective as of June 17, 1996, Messrs. Cook, Verhey and Redmond entered
into employment contracts with the Company. Effective as of January 15, 1998,
Mr. Verhey's employment contract was amended to reflect his additional
responsibilities and duties in becoming Executive Vice President of the
8
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Company. His annual base salary was increased to $193,592. Annual base salaries
of $167,245, were paid to each of Messrs. Cook and Redmond in 1998. Effective as
of January 15, 1998, Mr. Silva entered into an employment contract with the
Company. Mr. Silva's annual base salary was $110,000 for 1998. Subject to the
payment of severance compensation, the employment of Messrs. Cook, Silva,
Redmond and Verhey can be terminated at any time without cause. In accordance
with their employment contract they each may be awarded annual bonuses based on
their then existing salaries.
In summary, under the terms of their respective past and current employment
contracts, each executive officer (including those not identified herein as
Named Executive Officers), in the event of a "material change", including a
change of control, pursuant to or in anticipation of which the executive officer
is terminated, is eligible to have the Company pay him or her an amount equal to
one year's then-current salary plus his average annual bonus, payable in one
lump sum or, at his or her option, over such period as he or she may determine.
In addition, the Company will continue to pay his or her benefits for one year.
Should the Company terminate his or her employment without cause, and a material
change has not occurred, the Company will pay to the terminated executive an
amount equal to one year's then-current salary. Should an executive officer
voluntarily terminate his or her employment, the Company will not be obligated
to pay him or her any additional compensation, other than the compensation due
and owing up to the date of termination.
A "material change" involving the Company is defined in each executive
employment contract. A "material change" is typically defined as the following:
(a) any sale, merger, or other acquisition of all or substantially all of the
Company with or by another entity where the shareholders of the Company at the
time of the sale, merger or other acquisition do not own or control at least 51%
of the voting power of such entity immediately after the time of the sale,
merger, or other acquisition; (b) any acquisition of common stock by a person or
"group" (as defined in Section 13(d) of the Securities Exchange Act of 1934),
resulting in the "beneficial ownership" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) by that person or group of more than (i) 25% of
the capital stock of the Company accompanied by a change of more than 50% of the
directors of the Company within one year after such event; or (ii) 35% of the
capital stock of the Company with or without such change; or (c) a distribution
to any one or more shareholders of the Company of an aggregate of net assets
with a cumulative value that exceeds the greater of (i) $20,000,000 or (ii) 20%
of the net equity of the Company at the time of the distribution (whether by
dividend or repurchase of stock).
Under the terms of the employment contract with each executive officer, the
Company may grant stock options and other stock-related incentives from time-to-
time to an executive officer.
Director Compensation
Directors who are also employees of the Company receive no fees for serving
as directors. All non-employee directors receive a fee of $750 for each Board
or Committee meeting attended as well as a $10,000 per year retainer/i/. A non-
employee director serving as a Committee Chairman receives an additional $2,000
per year retainer. In accordance with the Bylaws of the Company, director
compensation is established periodically by resolution of the Board of
Directors.
The Kaiser Ventures Inc. 1995 Stock Plan, as amended, ("Plan") provides for
the grant of options to directors of the Company. Any non-employee individual
first elected or appointed to the Board during the Plan term received a non-
qualified stock option to purchase 5,000 shares of the Company's common stock at
the fair market value at the time of becoming a director and an annual grant of
a non-qualified stock option to
__________________________
/i/ Gary E. Gibbons has currently waived all rights as a director to receive
cash compensation and stock options.
9
<PAGE>
purchase 1,500 shares at fair market value. Thus, each non-employee director
completing at least six months in office after the 1999 Annual Meeting will vest
in a non-qualified stock option to purchase 1,500 shares of the Company's common
stock at the fair market value as of the date of the Annual Meeting.
The following table summarizes the annual director stock option grants
since January 1, 1996:
<TABLE>
<CAPTION>
Grant Date Fair Market Value Per Share
<S> <C>
June 17, 1996 $10.50
June 23, 1997 $10.05
June 30, 1998 $11.80
</TABLE>
The Company does not have a retirement compensation plan for non-employee
directors.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who own more than 10% of
the Common Stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of the Company.
To the Company's knowledge, based solely on a review of copies of reports
provided by such individuals to the Company and written representations of such
individuals that no other reports were required, during the fiscal year ended
December 31, 1998, all Section 16(a) filing requirements applicable to its
directors, officers, and greater that 10% beneficial owners were complied with.
(REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
10
<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of April 29, 1999, unless otherwise
noted, the number of shares of the Company's common stock the Company believes
to be owned by (i) each person known by the Company to own of record or
beneficially five percent (5%) or more of such stock; (ii) each director; (iii)
each executive officer; and (iv) all officers and directors as a group. The
table does not include the 136,919 shares reserved but not yet distributed to
the Class 4A unsecured creditors of KSC, since such shares are not yet deemed
outstanding or eligible to vote for purposes of the Annual Meeting.
<TABLE>
<CAPTION>
Number of Percent of
Common Shares Issued and
Name and Address of Beneficially Outstanding
Beneficial Owner Owned(1) Shares(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
New Kaiser Voluntary Employees 3,387,937 30.0%
Beneficiary Association Trust (3), (7)
(VEBA)
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Pension Benefit Guaranty Corporation(4) 2,100,966 18.6%
(PBGC)
2020 K Street, N.W.
Washington, DC 20006
Dimensional Fund Advisors, Inc.(5) 740,500 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Richard E. Stoddard, CEO, President & Chairman 188,534 1.7%
Gerald A. Fawcett, Vice Chairman 176,368 1.6%
James F. Verhey, Executive Vice President & CFO 113,530 1.0%
Terry L. Cook, Sr. Vice President & General Counsel 112,530 1.0%
Lee R. Redmond III, Sr. Vice President - Real Estate 88,880 *
Pamela M. Catlett, Vice President - Corporate Relations 48,227 *
Anthony Silva, VP Development & Environmental Services 9,250 *
Ronald E. Bitonti, Director(3) 14,348 *
Todd G. Cole, Director 19,000 *
Gary E Gibbons, Director(6) 0 N/A
Reynold C. MacDonald, Director 19,000 *
William J. Morgan, Director(4) 11,000 *
Charles E. Packard, Director 14,000 *
Thomas S. Rabone, Director(3) 14,286 *
Lyle B. Stevenson, Director(3) 14,000 *
Marshall F. Wallach, Director 20,000 *
All officers and directors as a group 863,053 7.6%
(15 persons) (1):
- ------------------------------
* Indicates ownership of less than one percent.
</TABLE>
11
<PAGE>
(1) The table above contains options exercisable within 60 days of April 29,
1999 in the following amounts: Richard E. Stoddard 161,475 shares; Gerald
A. Fawcett 122,083 shares; James F. Verhey 107,500 shares; Terry L. Cook
107,500 shares; Lee R. Redmond 85,001 shares; Pamela Catlett 46,800
shares; Anthony Silva 9,250 shares; Ronald E. Bitonti - 14,000 shares; Todd
G. Cole 15,668 shares; Reynold C. MacDonald 7,500 shares; William J.
Morgan - 11,000 shares; Charles E. Packard - 14,000 shares; Thomas S. Rabone
- 14,000 shares; Lyle B. Stevenson - 14,000 shares; Marshall F. Wallach
14,000 shares; all officers and directors as a group (15 persons) - 743,777
shares.
(2) Does not include 136,919 shares deemed outstanding for financial reporting
purposes, but not yet distributed to the Class 4A unsecured creditors of the
KSC bankruptcy estate. Percentages were determined as if all the options
specified in Note (1) above have been exercised.
(3) Messrs. Bitonti, Rabone, and Stevenson are administrative committee members
of the VEBA. The shares held by all officers and directors as a group
exclude shares held by the VEBA.
(4) William J. Morgan is the president, a director, and a major shareholder of
Pacholder Associates, Inc., a registered investment advisor. Pacholder
Associates, Inc. has a contract with the PBGC pursuant to which it has full
and complete investment discretion with respect to the 2,100,966 shares of
the Company's stock owned by the PBGC, including the power to vote such
shares. Such shares are excluded from the ownership of Mr. Morgan.
Similarly, the shares held by Mr. Morgan are excluded from the number of
shares owned by the PBGC.
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 740,500 shares of Kaiser
Ventures Inc. stock as of December 31, 1998, 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 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.
(6) Gary E. Gibbons is the principal and owner of the Coleridge Group Financial
Group, a registered investment advisor. Pursuant to a contract between Mr.
Gibbons and the VEBA, Mr. Gibbons has full and complete investment
discretion over the 3,387,937 shares owned by the VEBA, including the power
to vote such shares and thus such shares are excluded from the ownership of
Mr. Gibbons. Mr. Gibbons disclaims any ownership interest in such shares.
Mr. Gibbons owns no shares or stock options in the Company.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, as a result of the Organization Agreement dated November 22,
1995, among Penske Motorsports, Inc. ("PMI"), PSH Corp., and the Company, as
amended (the "Organization Agreement"), entered into various agreements, in
connection with the transfer of property for the California Speedway, a
motorsports facility. The Company currently owns approximately 11.73% of the
issued and outstanding shares of PMI's common stock. Pursuant to such
agreements: (i) the Company and PMI agreed to cause certain services to be
provided to each other, including the Company providing sewer treatment services
for the California Speedway; (ii) PMI agreed to reimburse the Company for
certain costs incurred in the preparation of the site of the California
Speedway; (iii) the Company agreed to indemnify Michigan International Speedway,
Inc. and The California Speedway Corporation, subsidiaries of PMI, against
certain environmental liabilities; (iv) the Company, PSH Corp., and PMI entered
into a Shareholders Agreement; and (v) PMI agreed to reimburse the Company,
among others,
12
<PAGE>
for certain pre-development expenses incurred by the Company and others in
connection with the California Speedway.
Pursuant to the Shareholders Agreement, as amended, should PSH Corp. desire
to transfer any shares of capital stock of PMI for consideration to an unrelated
third party, PSH Corp. must first offer such shares to the Company on the same
terms and conditions as in the proposed transfer. The Shareholders Agreement
also provides that if the Company desires to transfer any shares of capital
stock of PMI for consideration to an unrelated third party, the Company must
first offer such shares to PSH Corp., at a price equal to the average closing
price of PMI's shares on Nasdaq's Stock MarketSM for the previous thirty trading
days. However, PSH Corp. has effectively assigned any right of first refusal to
International Speedway Corporation ("ISC"), a major shareholder in PSH Corp. If
ISC elects not to purchase such shares, then PSH Corp. has the right to purchase
such shares on the same terms and conditions as the proposed transfer. In
either case, if the non-transferring party elects not to purchase such shares,
then the transferring party may transfer its shares to the unrelated third
party. Under certain circumstances, the Company may distribute a portion of the
shares of PMI's common stock that it owns to its shareholders, free from the
right of first refusal.
In addition, pursuant to a Registration Rights Agreement between the
Company and PMI, PMI has granted incidental registration rights to the Company,
subject to certain limitations, each time PMI files a registration statement in
connection with the sale of its common stock.
The Organization Agreement also grants to PMI a right of first refusal to
participate in any transaction or opportunity that directly relates to the
conduct or ownership of a motorsports complex that may come to PSH Corp., the
Company, or an affiliate of either, excluding ISC and its affiliates.
Pursuant to a Sewer Services Agreement between the California Speedway and
the Company, the Company has agreed to provide sanitary sewer treatment services
for the wastewater generated by the property owned by the California Speedway at
Kaiser's wastewater treatment facility located on a parcel owned by Kaiser. In
consideration for such services, the California Speedway has agreed to pay the
Company an annual fee for $88,800 adjusted annually by increases in the Consumer
Price Index. PMI has the option to purchase the facility. After the fifth
anniversary of the Sewer Service Agreement, Kaiser may terminate the agreement
upon one year's prior written notice to the California Speedway for a good and
valid business reason exercised in good faith. The Sewer Services Agreement may
be terminated earlier for various other reasons. PMI paid the Company $92,000
under the Sewer Services Agreement during the fiscal year ended December 31,
1998.
13
<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 Amendment No. 1 to
Registrant's 1996 Form 10-K Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: April 29, 1999
KAISER VENTURES INC.
By: /s/ Richard E. Stoddard
__________________________________________
Name: Richard E. Stoddard
__________________________________________
Title: President, Chief Executive Officer
__________________________________________
and Chairman of the Board
__________________________________________
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 1 to the Registrant's 1998 Form 10-K 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>
Signature Title Date
--------- ----- ----
<S> <C> <C>
1. Principal Executive Officer
/s/ Richard E. Stoddard President, Chief Executive April 29, 1999
- --------------------------------- Officer and Chairman of the
Richard E. Stoddard Board
2. Principal Financial and
Accounting Officer
/s/ James F. Verhey Executive Vice President April 29, 1999
- --------------------------------- Finance and Chief Finance
James F. Verhey Officer
</TABLE>
14
<PAGE>
Signature Title Date
--------- ----- ----
3. Directors
/s/ Ronald E. Bitonti Director April 27, 1999
-----------------------
Ronald E. Bitonti
/s/ Todd G. Cole Director April 27, 1999
-------------------------
Todd G. Cole
/s/ Gerald A. Fawcett Vice Chairman April 27, 1999
-------------------------
Gerald A. Fawcett
/s/ Gary E. Gibbons Director April 27, 1999
-------------------------
Gary E. Gibbons
/s/ Reynold C. MacDonald Director April 27, 1999
-------------------------
Reynold C. MacDonald
/s/ William J. Morgan Director April 27, 1999
-------------------------
William J. Morgan
/s/ Charles E. Packard Director April 27, 1999
-------------------------
Charles E. Packard
/s/ Thomas S. Rabone Director April 27, 1999
-------------------------
Thomas S. Rabone
/s/ Lyle B. Stevenson Director April 27, 1999
-------------------------
Lyle B. Stevenson
/s/ Marshall F. Wallach Director April 27, 1999
-------------------------
Marshall F. Wallach
15
