SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 17, 1998
(Date of earliest event reported)
GAINSCO, INC.
(Exact name of registrant as specified in its charter)
Texas 001-09828 75-1617013
_________________ ________________ __________________
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
500 Commerce Street, Fort Worth, Texas 76102
________________________________________ _________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(817)336-2500
ITEM 5. OTHER EVENTS.
On April 20, 1998, the Registrant, GAINSCO, INC., issued a press
release concerning a change of management in which Joseph D. Macchia
resigned as an officer and director and was replaced (a) as Chairman
of the Board by Joel C. Puckett, a director of the Registrant since
1979, and (b) as President, Chief Executive Officer and as a
management nominee for election to the Board of Directors at the
Registrant's May 18 annual meeting of shareholders by Glenn W.
Anderson. The Registrant also announced that it expected to report an
operating loss in its first quarter earnings release scheduled for May
13, 1998, due to claim reserve strengthening currently under review,
and that this will significantly impact prior indications of 1998
operating results. A copy of the press release containing these
announcements is filed herewith as an exhibit and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
No financial statements or pro forma financial statements are
required to be filed as a part of this report. The following is a
list of exhibits filed as part of this Current Report on Form 8-K:
Exhibit
No. Exhibit
_______ _________________________________________________________
99.1 Press Release dated April 20, 1998 issued by the Registrant.
99.2 Letter Agreement dated April 17, 1998 between the Registrant
and Glenn W. Anderson.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
GAINSCO, INC.
By: /s/ Joel C. Puckett
____________________________
Joel C. Puckett, Chairman of
the Board
Dated: April 21, 1998
GAINSCO, INC.
EXHIBIT INDEX
NUMBER AND DESCRIPTION OF EXHIBITS *
Exhibit
No. Exhibit
____ __________________________________________________________
1 None.
2 None.
4 None.
16 None.
17 None.
20 None.
23 None.
24 None.
27 None.
99.1 Press Release dated April 20, 1998 issued by the Registrant.
99.2 Letter Agreement dated April 17, 1998 between the Registrant
and Glenn W. Anderson.
_______________________
* Exhibits not listed are inapplicable.
EXHIBIT 99.1
Gainsco Founder Retires, New CEO on Board; First Quarter Loss Expected
FORT WORTH, Texas, April 20 /PRNewswire/ -- GAINSCO, INC. (NYSE:
GNA) today announced that Joseph D. Macchia has retired and resigned
as Chairman, President and Chief Executive Officer and a director.
Joel C. Puckett, a director of the Company since 1979, was named as
the new Chairman of the Board.
Glenn W. Anderson will be the new President and Chief Executive
Officer. Mr. Anderson, a 1974 graduate of Stanford University, comes
to the Company from USF&G Corporation where he had most recently
served as Executive Vice President and as President of the Commercial
Insurance Group of United States Fidelity & Guaranty Company. Mr.
Puckett, the new Chairman of the Board, commented that Mr. Anderson's
achievements in the insurance industry promise new and positive
directions for the Company in the years to come, and that Mr. Anderson
would replace Mr. Macchia as a management nominee for election to the
Board of Directors at the Company's May 18 annual meeting of the
shareholders.
Mr. Puckett, the new Chairman of the Board, commented that Mr.
Macchia was the founder of the Company and has led the Company through
its initial growth and initial public offering to its current status
as a New York Stock Exchange-listed company. Mr. Macchia was credited
with being the driving force behind the Company's excellent record of
quality service to general agents and customers and its development
into a leader in its segments of the insurance business with strong
capitalization and underwriting capabilities.
The Company further announce that it expects to report an
operating loss in its first quarter earnings release scheduled for May
13, 1998, due to claim reserve strengthening currently under review.
While further reinforcing GAINSCO's already strong balance sheet, this
action will significantly impact prior indications of 1998 operating
results.
GAINSCO, INC. is a vertically integrated property and casualty
insurance holding company specializing in underwriting excess and
surplus lines. Its insurance companies are all rated "A+" by A. M.
Best. GAINSCO's insurance service subsidiaries offer premium
financing programs and computer software systems for general agents.
Statements made in this release that are not strictly historical
may be forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve certain risks and
uncertainties that could cause actual results to differ materially
from those contained in the forward-looking statements. Important
factors include, but are not limited to, (i) heightened competition,
including price competition from existing competitors, from newly
formed competitors and from the entry into GAINSCO's markets of
standard insurance companies which historically have not competed in
the Company's specialty markets, (ii) contraction of the markets for
the Company's various lines of business, (iii) development and
performance of new speciality programs, (iv) ongoing level of claims
and claims-related expenses, (v) adequacy of claim reserves, and (vi)
general economic conditions. Please refer to the Company's SEC
filings for further information.
SOURCE, GAINSCO, INC.
- -0- 04/20/98
/CONTACT: Richard Buxton, Vice President, or Fred Roberts, Manager
IR, both of GAINSCO, INC., 817-336-2500, email address:
[email protected]/
/Web site: http://www.gainsco.com/
(GNA)
EXHIBIT 99.2
GAINSCO, INC.
500 COMMERCE STREET
FORT WORTH TX 76102
April 17, 1998
Glenn W. Anderson
1230 Algonquin Road
Crownsville, Maryland 21032
Dear Glenn:
This letter outlines the general parameters of your proposed
employment relationship with Gainsco as its President and Chief
Executive Officer. It is the intent of the Gainsco's Board of
Directors to nominate you to stand for election as a director of
Gainsco as soon as practicable. The terms of this offer and other
customary provisions will be reflected in an employment agreement to
be entered into by and between you and Gainsco within thirty (30) days
of notice of your acceptance of this offer.
The initial term of your employment with Gainsco will be forty
eight (48) months commencing on the date of your acceptance hereof,
and will be automatically renewed for an additional one-year period
which will be appended to the term of the agreement at the completion
of each year throughout its three year term, unless either party
terminates the employment relationship by delivering written notice to
the other at least thirty (30) days prior to the expiration of the
initial term or, if applicable, the then current renewal term. The
employment relationship may, however, be terminated for cause at any
time. During the term of your employment and for a reasonable time
thereafter, you will agree to refrain from competing with Gainsco (and
its subsidiaries and other affiliates) in the business areas in which
it has engaged during your employment.
Upon your acceptance of this offer you will be paid a bonus of
$50,000. During the initial four-year term of your employment with
Gainsco, you will be paid an annual base cash salary of $340,000.00
payable in installments at Gainsco's payroll periods. The salary may
be adjusted upwardly on each anniversary date of your employment in an
amount to be determined by Gainsco's Board of Directors. During the
term of your employment agreement, you will also be eligible to
participate in Gainsco's Executive Bonus Plan. During the first year
of employment, Gainsco will guarantee you a minimum cash bonus of
$260,000.00, which will be payable in accordance with the Plan's terms
at the end of your first full year of employment. Should your
employment be terminated other than for gross negligence or willful
misconduct by Gainsco prior to the expiration of the initial four-year
term of your employment, you will be paid as consideration for a
separation and release agreement a cash amount equal to 36 months of
salary at 150% of your then current monthly rate of compensation.
Gainsco will grant to you a non-qualified stock option with
respect to a number of shares of Gainsco common stock which would
allow you to realize a profit of five million dollars upon the
doubling of a mutually agreed upon closing price occurring within the
week following Gainsco's public announcement your acceptance of this
offer. If any time after the grant of such options and within five
(5) days of the announcement of Gainsco's 2nd quarter results, the
price of Gainsco common stock drops below the mutually agreed upon
stock price Gainsco will cancel and reissue options based on the
mutually agreed upon stock price. Such option will have a term of
five (5) years from date of grant and will be fully vested at the time
of grant.
In the event that a Change In Control occurs, you will receive
the same severance package applicable to Gainsco's other executive
officers.
Throughout the term of your employment, Gainsco will pay you a
car allowance of $700.00 per month. You will, however, be responsible
for paying all expenses incurred in connection with the vehicle's
operation. In addition, Gainsco will procure on your behalf, a term
life insurance policy in the face amount of $1,0000,000.00 payable to
the beneficiary of your choice subject to your satisfaction of
ordinary underwriting requirements. Further, Gainsco will pay
initiation fees and monthly dues in accordance with Gainsco's current
club policy for its executives. You will, however, be responsible for
payment of all monthly charges incurred; provided, however, you may
submit receipt for reimbursement for business related expenses.
Gainsco will reimburse you for your reasonable relocation costs,
including the costs incurred in selling your current residence but
will not reimburse you for any loss of equity. Gainsco will pay
reasonable costs of procuring temporary housing and out-of-pocket
expenses. We will negotiate a reasonable cap for relocation costs.
Gainsco will also calculate and pay to you an income tax gross-up for
the additional taxable income recognized by you as a result of taxable
moving expense payments.
As noted above, those terms which are immediately effective upon
notice of your acceptance of this offer, as well as other pertinent
terms, will be memorialized in a formal, written employment agreement
which will be effective between you and Gainsco as of the date you
accept this agreement. Your acceptance will be effective upon
Gainsco's receipt of a facsimile transmission of your signature on the
acceptance line provided below. This offer may be withdrawn by
Gainsco at any time prior to receipt of notice of your acceptance and
this offer will automatically expire unless accepted by you before
5:00 p.m. Central Daylight Time, Friday, April 17, 1998.
Sincerely,
/s/ Robert J. McGee
_____________________________
For Gainsco, Inc.
Accepted by:
/s/ Glenn W. Anderson 4-17- 12:18 P.M.
______________________ ________________
Glenn W. Anderson Date
cc: Joel C. Puckett
