<PAGE>
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-K/A
(AMENDMENT NO. 1)
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[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
[ ] 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: 2-98277C
THE COLONEL'S INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-3262264
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
620 SOUTH PLATT ROAD, MILAN, MICHIGAN 48160
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (734) 439-4200
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
----------------------------- ----------------------
<S> <C> <C>
Common Stock, $0.01 par value Nasdaq SmallCap Market
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
<PAGE>
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 _____ No __X___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ____
Number of shares outstanding of the registrant's Common Stock, $0.01 par
value (excluding shares of treasury stock) as of April 28, 1999: 24,518,326
The aggregate market value of the registrant's voting stock held by non-
affiliates of the registrant based on the closing price on the Nasdaq
SmallCap Market on April 28, 1999: $4,564,773.70.
===========================================================================
<PAGE>
The Colonel's International, Inc. (the "Company") files this Amendment
No. 1 to Form 10-K for the purpose of supplying the information required by
Part III of the Form 10-K. Capitalized terms used but not defined in this
Amendment No. 1 have the meanings ascribed to them in the Form 10-K filed by
the Company with the Securities and Exchange Commission on March 31, 1999.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
BOARD OF DIRECTORS. The Company's Board of Directors currently
consists of six members (in alphabetical order): J. Daniel Frisina, Ted M.
Gans, Mark German, Donald R. Gorman, Mark D. Stevens and Donald J.
Williamson. Ben C. Parr resigned from the Board of Directors on April 20,
1999.
J. DANIEL FRISINA (50). Mr. Frisina is a Director of the Company and a
Director of three of the Company's subsidiaries: The Colonel's Rugged Liner,
Inc. ("CRL"), The Colonel's, Inc. ("The Colonel's") and The Colonel's Brainerd
International Raceway, Inc. ("BIR"). Mr. Frisina's principal occupation is
Director of Global Development for Shyi Tan Enterprises, a Taiwanese
manufacturer of autobody parts. He has previously served as a consultant for
Cheng Hong Legion Co., Ltd. (from 1992 to 1996). He was also the Chairman of
the Board of the Autobody Parts Association, an association that represents
the interests of the distributors, suppliers and manufacturers of
alternative collision replacement parts. He served as President of The
Colonel's from 1988 through 1991. He served as Treasurer and Chief
Financial Officer of Brainerd, the Company's predecessor, during 1995. Mr.
Frisina serves on the Audit Committee and the Nominating Committee of the Board
of Directors.
TED M. GANS (63). Mr. Gans is a Director of the Company and a
Director of The Colonel's Truck Accessories, Inc. ("CTA"), CRL and BIR. Mr.
Gans' principal occupation since 1965 has been as the President and Director of
Ted M. Gans, P.C., a law firm in Bloomfield Hills, Michigan, of which he is
the sole owner. Mr. Gans also serves as a Director of Williamson Lincoln
Mercury, Inc.; Patsy Lou Williamson Buick-GMC, Inc.; Williamson Chevrolet-
Geo Cadillac, Inc.; and Williamson Chrysler Plymouth Jeep, Inc. All four of
these companies are wholly owned by Patsy L. Williamson. Mr. Gans serves on
the Executive Committee, the Audit Committee, the Compensation Committee and
the Nominating Committee of the Board of Directors.
MARK GERMAN (43). Mr. German currently serves as the President and a
Director of the Company and the President and a Director of CRL. Mr.
German is the former president and majority shareholder of the Rugged Liner
Companies. Mr. German serves on the Executive Committee and the Nominating
Committee of the Board of Directors.
2
<PAGE>
DONALD R. GORMAN (67). Mr. Gorman is a Director of the Company. Mr.
Gorman is the owner and President of P.G. Products, Inc., of Cincinnati,
Ohio, which formerly was one of the Company's major customers. Mr. Gorman
serves on the Compensation Committee and the Nominating Committee of the
Board of Directors.
MARK D. STEVENS (56). Mr. Stevens is a Director of the Company and
from February 1997 until May 1998 was the President of the Company. From
June 1997 until May 1998, Mr. Stevens was also the Company's Chief
Executive Officer. Mr. Stevens is currently the General Manager of Patsy
L. Williamson Buick-GMC, Inc., an automotive dealership company wholly
owned by Patsy L. Williamson, a position he has held since 1993. From 1986
to 1996, Mr. Stevens served as the Sales Manager for Blain Buick-GMC Truck,
Inc. Mr. Stevens also serves as the Secretary of various automotive
dealerships owned by Patsy L. Williamson. Mr. Stevens serves on the
Executive Committee of the Board of Directors.
DONALD J. WILLIAMSON (65). Mr. Williamson is a Director and the
Chairman of the Board and Chief Executive Officer of the Company. He is
also a Director of each of the Company's four subsidiaries. From November
1995 until February 1997 he was the President, Chief Executive Officer and
a Director of the Company. Between February 1997 and May 1998, Mr.
Williamson served as a consultant to the Company. He is the founder of The
Colonel's. Mr. Williamson serves on the Executive Committee of the Board
of Directors.
EXECUTIVE OFFICERS. As mentioned above, Mr. German is the
President and Mr. Williamson is the Chairman of the Board and Chief
Executive Officer of the Company. Three additional executive officers
are:
RICHARD S. SCHOENFELDT (43). Mr. Schoenfeldt is the Vice President-
Finance, Chief Financial Officer, Treasurer and Assistant Secretary of the
Company. Since 1994, he has served as controller and Chief Financial
Officer of The Colonel's. From 1991 through 1994, he was Controller of The
Colonel's and from 1987 through 1991 he was Operations Manager of The
Colonel's Plastics Division. From 1980 to 1986, he served as the Director
of Operations for Alcolite Products, Inc., an OEM plastic injection
molding, blow molding and thermoforming manufacturer. Mr. Schoenfeldt also
serves as a Director and the Chief Financial Officer of CTA, as a Director
and the Chief Financial Officer of The Colonel's, and as a Director and the
Chief Financial Officer of BIR.
WILLIAM SINGLETERRY (54). Mr. Singleterry is the Vice President of
Marketing and Development of the Company. He also serves as a Director and
the President of The Colonel's. Since 1991, Mr. Singleterry has served as
the Director of Operations for the Bumper Division of The Colonel's. Prior
to that time, he was the Regional Sales Manager. From 1982 to 1989, he
3
<PAGE>
served as General Manager for Auto Body Connection, a bumper manufacturer
and distributor.
JOHN CARPENTER (60). Mr. Carpenter is the President of CTA. He
joined CTA in July 1996. Mr. Carpenter was formerly the National
Distributor Sales Manager of Durakon Industries (1981 to 1986). Mr.
Carpenter is a member of the Board of Directors of TCAA (Truck Cap and
Accessory Association). He formerly was the National Marketing Manager for
Homestead Products (1987 to 1988). From 1988 to 1996, Mr. Carpenter was
involved in the real estate business.
LEGAL PROCEEDINGS. The Company does not believe that any of its
directors, executive officers, promoters or control persons are involved in
legal proceedings within the meaning of Item 401(f) of SEC Regulation S-K.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's Directors, officers and persons who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and NASDAQ.
Directors, officers and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the best of the Company's knowledge, no Director, officer or
beneficial owner of more than 10% of the Company's outstanding Common Stock
failed to file on a timely basis any report required by Section 16(a) of
the Exchange Act with respect to the year ended December 31, 1998, except
that Mr. Stevens did not timely report (1) a sale of 700 shares of Common
Stock on May 15, 1998 and (2) an automatic grant to him under the LTIP of
options to purchase 665 shares of Common Stock on September 1, 1998. Mr.
Stevens was unaware of this grant. Mr. Stevens has filed a Form 5 to reflect
these transactions.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Summary. The following Summary Compensation Table shows
certain information concerning the compensation earned during each of the
three fiscal years in the period ended December 31, 1998, of the Chief
Executive Officer of the Company and each executive officer of the Company
whose salary and bonus for 1998 exceeded $100,000. Two persons served as
Chief Executive Officer of the Company in 1998. Donald J. Williamson
served as Chairman of the Board and Chief Executive Officer of the Company
beginning in May. Mark D. Stevens served as President and Chief Executive
Officer until May. Also, in May 1998, Mark German was appointed President
of the Company.
4
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------- ------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
- ------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Donald J. Williamson 1998 $510,000<F1> $1,051,000<F2> $ 0 0
Chairman of the Board, 1997 $520,000<F1> $ 6,000 $ 0 0
President, Chief Executive 1996 $510,000<F1> $ 0 $ 6,841 0
Officer and Director
Mark German 1998 $ 85,000 $ 0 $ 0 0
President and Director
Mark D. Stevens 1998 $ 0 $ 0 $ 0 665
President, Chief Executive 1997 $ 0 $ 0 $ 0 5,000
Officer and Director
William Singleterry 1998 $152,884 $ 6,000 $ 0 0
Vice President of 1997 $153,234 $ 6,000 $ 0 5,000
Development 1996 $ 97,369 $ 0 $ 100 0
John Carpenter 1998 $118,777 $ 0 $ 0 0
President of CTA 1997 $112,029 $ 0 $ 0 0
1996 $ 46,629 $ 0 $ 0 0
Richard Schoenfeldt 1998 $102,696 $ 106,000 $ 0 0
Vice President - Finance 1997 $ 96,697 $ 6,000 $ 0 5,000
and Chief Financial Officer 1996 $ 58,946 $ 0 $ 0 0
<FN>
____________________________
<F1> Amounts reported include amounts paid for Mr. Williamson's services to
the Company and its subsidiaries.
<F2> See "Item 13 -- Certain Relationships and Related Transactions."
</FN>
</TABLE>
STOCK OPTIONS
Pursuant to the automatic grant provisions of the Company's Long-Term
Incentive Plan (the "LTIP"), Messrs. Frisina, Gans, Gorman and Parr each
5
<PAGE>
received options to purchase a total of 1,300 shares of Common Stock and
Mr. Stevens received options to purchase 665 shares during 1998. No other
officers or directors of the Company received stock option grants during
1998. No officers or directors of the Company exercised any of their
outstanding options during 1998.
<TABLE>
FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END <F1>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Donald J. Williamson 0 0 $ 0 $ 0
Mark German 0 0 $ 0 $ 0
Mark D. Stevens 5,665 0 $ 0 $ 0
William Singleterry 5,000 0 $ 0 $ 0
John Carpenter 0 0 $ 0 $ 0
<FN>
____________________________
<F1> None of the foregoing options are considered "in the money" because
their exercise prices were higher than the market value as of December
31, 1998 ($5.125 per share of Common Stock).
</FN>
</TABLE>
COMPENSATION OF DIRECTORS
No compensation was paid to any Director of the Company for services
rendered in such capacity during 1998. Directors who are not full-time
employees may be reimbursed for expenses incurred in attending meetings of
the Board of Directors and committees thereof.
PENSION PLAN
The Company does not have a pension plan, a defined benefit plan or an
actuarial plan.
6
<PAGE>
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company does not have any employment agreements, termination-of-
employment agreements or change-in-control agreements with any executive
officer. However, The Colonel's and John Carpenter entered into an
employment agreement dated July 15, 1996. Effective January 1, 1997, this
agreement was transferred to CTA and Mr. Carpenter is now employed as CTA's
President. Under the agreement, which has a five year term, Mr. Carpenter
is paid a $100,000 annual salary in equal weekly installments. In
addition, Mr. Carpenter is paid a bonus of $0.10 for each bedliner sold by
CTA, payable monthly. The agreement may be terminated by either party for
just cause. In addition, CTA could terminate the agreement without cause,
in which case CTA would be required to pay Mr. Carpenter three months'
salary plus any accrued but unpaid salary and bonus as of the date of
termination. The agreement also contains Mr. Carpenter's covenant not to
compete for a period of two years from the date of the termination of his
employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1998, Messrs. Gans, Gorman and Parr were the
members of the Compensation Committee of the Board of Directors. No other
Directors or executive officers of the Company took part in deliberations
concerning the compensation of executive officers of the Company during
fiscal 1998. Neither Mr. Gans, Mr. Gorman nor Mr. Parr has any employment
relationship with the Company or any of its subsidiaries. However, Mr.
Gans is a Director of the Company and practices law with Ted M. Gans, P.C.
During the past year, the Company and The Colonel's retained Ted M. Gans,
P.C. for certain legal services and it is anticipated that the Company may
retain Ted M. Gans, P.C. to render certain legal services during the
current year.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors currently
consists of Messrs. Gans and Gorman.
The basic compensation philosophy of the Company is to provide
competitive salaries. The Company's executive compensation policies are
designed to achieve two primary objectives:
- Attract and retain well-qualified executives who will lead the
Company and achieve and inspire superior performance;
- Provide incentives for the achievement of long-term financial
goals.
7
<PAGE>
Executive compensation consists primarily of two components: base
salary and benefits; and amounts paid (if any) under the Company's Long-
Term Incentive Plan (the "LTIP"). Each component of compensation is
designed to accomplish one or both of these compensation objectives.
The participation of specific executive officers and other key
employees in the Company's LTIP is recommended by the Board's Compensation
Committee and all recommendations (including the level of participation)
are reviewed, modified (to the extent appropriate) and approved by the
Board.
BASE SALARY
To attract and retain well-qualified executives, it is the
Compensation Committee's policy to establish base salaries at levels and
provide benefit packages that are considered to be competitive. Base
salaries of executive officers are determined by the Board of Directors on
an individual basis. In determining the base salary for an executive
officer, the Compensation Committee will recommend to the full Board for
approval a base salary for the officer determined by the Compensation
Committee taking into consideration factors including: (1) the
individual's performance, (2) the individual's contributions to the
Company's success, (3) the level and scope of the individual's
responsibilities, (4) the individual's tenure with the Company and in his
or her position and (5) pay practices for similar positions by comparable
companies.
LONG-TERM INCENTIVE PLAN
The LTIP is used primarily to grant stock options. However, the LTIP
also permits grants of restricted stock, stock awards, stock appreciation
rights and tax benefit rights if determined to be desirable to advance the
purposes of the LTIP. These grants and awards are referred to as
"Incentive Awards." By combining in a single plan many types of incentives
commonly used in long-term incentive compensation programs, the LTIP
provides significant flexibility to the Compensation Committee to tailor
specific long-term incentives that would best promote the objectives of the
LTIP and in turn promote the interests of the Company's shareholders.
Directors, executive officers and other key employees of the Company
and its subsidiaries are eligible to receive Incentive Awards under the
LTIP. A maximum of 4,000,000 shares of Common Stock (subject to certain
antidilution adjustments) are available for Incentive Awards under the
LTIP. Of the 4,000,000 shares authorized for Incentive Awards under the
LTIP, only one-half can be awarded as restricted stock.
The LTIP is administered by the Compensation Committee, which is
comprised of non-employee Directors, none of whom participates or is
8
<PAGE>
eligible to participate in any long-term incentive plan of the Company or
its subsidiaries, except for nondiscretionary stock option grants based
upon a specified formula, and if the Board so determines, each of whom must
be an "outside director" as defined in the rules issued pursuant to Section
162(m) of the Internal Revenue Code. The Compensation Committee makes
determinations, subject to the terms of the LTIP, as to the persons to
receive Incentive Awards, the amount of Incentive Awards to be granted to
each person, the terms of each grant and all other determinations necessary
or advisable for administration of the LTIP.
The LTIP was approved by the shareholders of Brainerd, the Company's
predecessor, on November 21, 1995. During fiscal 1998, Messrs. Frisina,
Gans, Gorman and Parr, as non-employee Directors of the Company, each
received automatic stock option grants covering a total of 1,300 shares of
Common Stock, and Mr. Stevens, also as a non-employee director, received
options covering a total of 665 shares of Common Stock.
SECTION 162(m)
Section 162(m) of the Internal Revenue Code provides that publicly
held corporations may not deduct compensation paid to certain executive
officers in excess of $1 million annually, with certain exemptions. The
Company has examined its executive compensation policies in light of
Section 162(m) and the regulations adopted by the Internal Revenue Service
to implement that section. It is not expected that any portion of the
Company's deduction for employee remuneration will be disallowed in 1999 or
in future years by reason of actions expected to be taken in 1999.
Respectfully submitted,
Ted M. Gans
Donald R. Gorman
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
on the Company's Common Stock to the NASDAQ Domestic Index and an index of
peer companies that produce automobile replacement parts, assuming an
investment of $100.00 at the beginning of the period indicated. Because
the Company's Common Stock has been traded on the NASDAQ SmallCap Market
only since January 2, 1996, the graph covers only the period from January
2, 1996, to the end of fiscal year 1998.
The NASDAQ Domestic Index is a broad equity market index consisting of
certain domestic companies traded on the NASDAQ Stock Market. The index of
peer companies was constructed by the Company and includes the companies
listed in the footnote to the graph below. In constructing the peer index,
the return of each peer group company was weighted according to its
9
<PAGE>
respective stock market capitalization at the beginning of each period
indicated. Cumulative total stockholder return is measured by dividing:
(i) the sum of (a) the cumulative amount of dividends for the measurement
period, assuming dividend reinvestment, and (b) the difference between the
share price at the end and the beginning of the measurement period; by (ii)
the share price at the beginning of the measurement period.
COMPARISON OF CUMULATIVE
TOTAL STOCKHOLDER RETURN
[STOCK PRICE PERFORMANCE GRAPH]
<F1> The index of peer companies consists of Applied Industrial Technologies,
Inc.; Autozone Inc.; Dana Corp.; Defiance Inc.; Discount Auto Parts, Inc.;
Dura Automotive Systems, Inc.; Eaton Corporation; Federal-Mogul Corp.;
Genuine Parts; Hahn Automotive Warehouse, Inc.; Johnson Controls,
Inc.; Keystone Automotive Industries, Inc.; Lear Corporation; Mark
IV Industries, Inc.; Motorcar Parts & Accessories, Inc.; Newcor Inc.; The
Pep Boys; and Tower Automotive, Inc.
The dollar values for total stockholder return plotted in the graph above
are shown in the table below:
<TABLE>
<CAPTION>
NASDAQ PEER
DATE THE COMPANY DOMESTIC INDEX INDEX
---- ----------- -------------- -----
<S> <C> <C> <C> <C>
January 2, 1996 $ 100.00 $ 100.00 $ 100.00
December 31, 1996 69.23 122.97 116.21
December 31, 1997 103.85 150.86 142.19
December 31, 1998 78.85 212.06 138.04
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth information concerning the number of
shares of Common Stock held by each shareholder who is known to the
Company's management to be the beneficial owner of more than 5% of the
outstanding shares as of March 22, 1999:
10
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF NATURE OF
OF BENEFICIAL BENEFICIAL BENEFICIAL PERCENT OF
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP CLASS<F1>
<S> <C> <C> <C>
Donald J. Williamson<F2> 11,934,580 shares Sole voting and investment power 48.55%
620 South Platt Road 0 shares Shared voting and investment power 0.00%
Milan, MI 48160
Patsy L. Williamson<F2> 11,639,870 shares Sole voting and investment power 47.35%
620 South Platt Road 0 shares Shared voting and investment power 0.00%
Milan, MI 48160
<FN>
<F1> See note 1 to the following table.
<F2> See note 2 to the following table.
</FN>
</TABLE>
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of shares of
Common Stock, held as of March 22, 1999 by each director, each of the named
executive officers and by all directors and executive officers of the
Company as a group:
<TABLE>
<CAPTION>
NAME AMOUNT OF NATURE OF
OF BENEFICIAL BENEFICIAL BENEFICIAL PERCENT OF
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP CLASS<F1>
- --------------------- ---------- ---------- ----------
<S> <C> <C> <C>
John Carpenter 0 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
J. Daniel Frisina<F3><F4> 8,560 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Ted M. Gans<F3><F4> 8,560 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Mark German<F5> 309,876 shares Sole voting and investment power 1.26%
0 shares Shared voting and investment power <F*>
Donald R. Gorman<F3><F4> 10,185 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Ben C. Parr<F3><F4> 8,035 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Richard S. Schoenfeldt 5,000 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
William Singleterry<F6> 5,000 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Mark D. Stevens<F3> 5,665 shares Sole voting and investment power <F*>
0 shares Shared voting and investment power <F*>
Donald J. Williamson<F2><F3> 11,934,580 shares Sole voting and investment power 48.55%
0 shares Shared voting and investment power <F*>
Directors and Officers 12,295,458 shares Sole voting and investment power 50.02%
as a group 0 shares Shared voting and investment power 0.00%
<FN>
______________________________________
<F*> Does not exceed 1%.
12
<PAGE>
<F1> PERCENTAGES: The percentages set forth in this column were calculated
on the basis of (i) 24,518,326 Common Stock outstanding as of March
22, 1999, plus (ii) 62,375 shares of Common Stock subject to options
that were exercisable on March 22, 1999 or that will become
exercisable within 60 days after March 22, 1999. Shares subject to
such options are considered to be outstanding for purposes of this
chart.
<F2> THE WILLIAMSONS: In the January 1996 mergers by which Brainerd
International, Inc. ("Brainerd"), the Company's predecessor, merged
with and into the Company and by which The Colonel's became a
wholly owned subsidiary of the Company, a total of 23,500,000 shares
of Common Stock in the Company were issued to Donald J. Williamson and
Patsy L. Williamson, proportionate to their ownership of shares of
common stock of The Colonel's. Mrs. Williamson also has options to
acquire 7,370 shares of Common Stock that were exercisable as of March
22, 1999. Mrs. Williamson resigned as a Director of the Company in
1998.
<F3> STOCK OPTION GRANTS TO DIRECTORS: Pursuant to the Company's 1995 Long-
Term Incentive Plan (the "LTIP"), the Company's Board of Directors in
February 1997 granted to each person who was then a non-employee
Director of the Company (Mrs. Williamson, Mr. Parr, Mr. Gorman, John
Darcy, Mr. Frisina and Mr. Gans) options to acquire up to 5,000 shares
of Common Stock. These stock options are currently exercisable. At
that time, the Board of Directors also granted Mr. Stevens options to
acquire 5,000 shares of Common Stock, which options are currently
exercisable.
<F4> AUTOMATIC STOCK OPTION GRANTS TO NON-EMPLOYEE DIRECTORS: Under the
LTIP, each non-employee director of the Company receives an automatic
grant of options in March and September of each year. The number of
shares subject to each option started at 500 when the LTIP was
inaugurated in 1996. Under the terms of the LTIP, for each grant
after that time the number of shares subject to each option increases
by 5% from the previous grant. When a new non-employee Director is
elected or appointed to the Board, he or she will immediately receive
an option in an amount equal to the last grant. Messrs. Frisina,
Gans, Parr and Gorman and Mrs. Williamson were each granted options to
purchase 635 shares of Common Stock on March 1, 1998, and Messrs.
Frisina, Gans, Parr, Gorman and Stevens were each granted options to
purchase 665 shares of Common Stock on September 1, 1998. All of
these options are currently exercisable.
<F5> MARK GERMAN: Mr. German is the former majority shareholder of the
Rugged Liner Companies. In these acquisitions, Mr. German was issued
a total of 413,167 shares of the Company's Common Stock. Mr. German's
father, mother and sister each were issued 13,620 shares of Common
Stock. Mr. German disclaims beneficial ownership of the shares owned
13
<PAGE>
by his family members and such shares are not included in the number
shown in the table. In March 1999, Mr. German exercised a put option
granted to him pursuant to the Rugged Liner Merger Agreement and the
Company redeemed 103,291 of his shares of Common Stock at a price of
$8.203 per share.
<F6> STOCK OPTION GRANTS TO OFFICERS: In February 1997, Mr. Singleterry was
granted options to acquire up to 5,000 shares of Common Stock. These
stock options are currently exercisable.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company and its subsidiaries are parties to certain transactions
with related parties which are summarized below. Many of the transactions
described below involve Donald and Patsy Williamson, husband and wife. Mr.
Williamson is the Chairman of the Board, the Chief Executive Officer and a
Director of the Company. Together, Mr. and Mrs. Williamson own approximately
96 percent of the outstanding shares of the Company.
PROMISSORY NOTE FROM DONALD J. WILLIAMSON. In 1997, the Company loaned
an aggregate total of $1,044,956 to Donald J. Williamson, pursuant to two
promissory notes executed in June and September 1997, respectively. These
notes bore interest at 8% and were due in bi-annual installments beginning
in September 1998. In August of 1998, $200,000 was paid on the notes. The
remaining balance has been charged to the commission expense in lieu of Mr.
Williamson repaying the amount, in recognition of Mr. Williamson's efforts in
facilitating the sale.
In February 1999, the Company loaned $5.2 million to South Saginaw,
L.L.C., a limited liability company owned by Mr. Williamson. To
evidence this loan, Mr. Williamson signed a mortgage providing for
interest at the annual rate of 8% and calling for monthly payments of
principal and interest beginning April 1, 1999. Mr. Williamson used the
proceeds of this loan to purchase real property in Davidson, Michigan. The
Company currently is considering a proposal to acquire the real property
from Mr. Williamson in satisfaction of the loan.
LEASE OF MILAN, MICHIGAN FACILITY AND OWOSSO, MICHIGAN FACILITY. In
June of 1993, The Colonel's began leasing its former Milan, Michigan,
facility from 620 Platt Road, LLC. Donald J. Williamson and Patsy L.
Williamson are the sole members of 620 Platt Road, LLC. Rent expense to
The Colonel's for the Milan facility was $770,000 for the year ending
December 31, 1998. This lease has been canceled as a result of the December
1998 sale of the assets of The Colonel's and the Milan facility to AutoLign.
CTA leases its Owosso, Michigan facility from 620 Platt Road, LLC. Rent
expense on this lease was $240,000 for the year ending December 31, 1998.
An additional $60,000 was prepaid toward 1999 rent.
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WILLIAMSON BUICK-GMC, INC. Patsy L. Williamson owns several
automobile dealerships. The Colonel's engages in certain transactions
with these dealerships, including the purchase of automobiles, parts,
and automotive service and the lease of certain property from which rental
income is earned. During 1998, purchases of automobiles, parts and services
by The Colonel's from the Williamson dealerships were in the amount of
$191,455. CTA sold approximately $27,000 worth of bedliners to the
Williamson dealerships in 1998.
TRANSACTIONS WITH DIRECTORS. Ted M. Gans is a Director of the Company
and practices law with Ted M. Gans, P.C. During the past year, the Company
retained Ted M. Gans, P.C. for certain legal services and it is anticipated
that the Company may retain Ted M. Gans, P.C. to render certain legal
services during the current year. J. Daniel Frisina, a Director of the
Company, is Director of Global Development for Cheng Hong Legion Co., Ltd.,
which sells among other products, automotive body replacement parts to The
Colonel's as well as to other customers in the automotive crash parts
industry.
MARK GERMAN. Mark German is a Director and the President of the
Company. In March 1998, the Company and CRL entered into an agreement and
plan of merger to acquire the Rugged Liner Companies, each of which Mr.
German was the majority shareholder. In these transactions, the Company
paid an aggregate of approximately $4,230,451 in cash and issued an
aggregate of approximately $3,724,400 worth of the Company's Common Stock
to the shareholders of the Rugged Liner Companies, following the
adjustments as set forth in the agreement and plan of merger. The terms of
the transaction were arrived at pursuant to arms' length negotiations
between the Company and Mr. German. In March 1999, Mr. German exercised
a put option granted to him pursuant to the Rugged Liner Merger Agreement
and the Company redeemed 103,291 of his shares of Common Stock at a price
of $8.203 per share.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE COLONEL'S INTERNATIONAL, INC.
Dated: April 30, 1999 By: /S/ RICHARD S. SCHOENFELDT
Richard S. Schoenfeldt
Vice President-Finance and Chief
Financial Officer
(Principal Financial Officer and
Duly Authorized Representative)
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
2.1 Agreement and Plan of Merger between The Colonel's, Inc. and
Brainerd Merger Corporation and joined in by Brainerd
International, Inc. Incorporated by reference from Exhibit
A to the Proxy Statement of Brainerd International, Inc. for
the Annual Meeting of Shareholders of Brainerd
International, Inc. held on November 21, 1995.
2.2 Agreement and Plan of Reorganization among Brainerd
International, Inc. and The Colonel's Holdings, Inc.
Incorporated by reference from Exhibit D to the Proxy
Statement of Brainerd International, Inc. for the Annual
Meeting of Shareholders of Brainerd International, Inc. held
on November 21, 1995.
2.3 Amended and Restated Asset Purchase Agreement by and between
Colonel's Acquisition Corp. (later renamed AutoLign
Manufacturing Group, Inc.), The Colonel's International,
Inc., The Colonel's, Inc. and Donald J. Williamson dated
November 23, 1998. Incorporated by reference to Appendix A
to the Company's Definitive Proxy Statement filed with the
Securities and Exchange Commission on December 7, 1998.
2.4 First Amendment to Amended and Restated Asset Purchase
Agreement by and between AutoLign Manufacturing Group, Inc.
(formerly known as Colonel's Acquisition Corp.), The
Colonel's International, The Colonel's, Inc. and Donald J.
Williamson dated December 17, 1998. Incorporated by
reference to Exhibit 2(b) to the Company's Report on Form 8-
K filed with the Securities and Exchange Commission on
December 30, 1998.
2.5 Agreement and Plan of Merger by and among The Colonel's
International, Inc., The Colonel's Rugged Liner, Inc.,
Rugged Liner, Inc., Triad Management Group, Inc., Aerocover,
Inc., Ground Force, Inc., and certain shareholders of the
foregoing, dated March 13, 1998. Incorporated by reference
to Exhibit 2(a) to the Registrant's Current Report on Form
8-K dated May 8, 1998.
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2.6 First Amendment to Agreement and Plan of Merger, by and
among The Colonel's International, Inc., The Colonel's
Rugged Liner, Inc., Rugged Liner, Inc., Triad Management
Group, Inc., Aerocover, Inc., Ground Force, Inc., and
certain shareholders of the foregoing, dated April 23, 1998.
Incorporated by reference to Exhibit 2(b) to the
Registrant's Current Report on Form 8-K dated May 8, 1998.
3.1 Articles of Incorporation of the Company, as amended.
Incorporated by reference from Exhibit 3.1 to the Company's
Report on Form 10-Q for the period ended March 31, 1997.
3.2 Bylaws of the Company, as amended. Incorporated by
reference from Exhibit 3.2 to the Company's Report on Form
10-Q for the period ended March 31, 1997.
4.1 Articles of Incorporation. See Exhibit 3.1 above.
4.2 Bylaws. See Exhibit 3.2 above.
10.1 1995 Long-Term Incentive Plan, as amended. Incorporated by
reference from Exhibit A to the Company's Proxy Statement
for the 1997 Annual Meeting of Shareholders.<F*>
10.2 June 22, 1992 Title Rights Sponsorship Agreement between
Champion Auto Stores, Inc. and National Hot Rod Association,
Inc. Incorporated by reference from Brainerd International,
Inc.'s Registration Statement on Form S-1 (Registration No.
33-055876).
10.3 Loan Agreement between The Colonel's International, Inc. and
subsidiaries and Comerica Bank dated May 28, 1997.
Incorporated by reference from the Company's Report on Form
10-K for the year ended December 31, 1997.
10.4 Master Revolving Note between Comerica Bank and The
Colonel's International, Inc. and subsidiaries dated March
17, 1998. Incorporated by reference from the Company's
Report on Form 10-K for the year ended December 31, 1997.
10.5 Employment Agreement between The Colonel's, Inc. and John
Carpenter dated June 28, 1996. Incorporated by reference
from the Company's Report on Form 10-K for the year ended
December 31, 1997.<F*>
21 Subsidiaries of the Registrant. Filed as an Exhibit to the
Company's Report on Form 10-K for the year ended December 31,
1999 as filed with the Securities and Exchange Commission
on March 31, 1999.
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24 Powers of Attorney. Filed as an Exhibit to the Company's Report
on Form 10-K for the year ended December 31, 1999 as filed with
the Securities and Exchange Commission on March 31, 1999.
____________________
<F*> Management contract or compensatory plan or arrangement.
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