<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1995 Commission File Number 0-16482
ROADMASTER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 84-105239
------------------------------- ---------
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
250 Spring Street NW
Atlanta, Georgia 30303
------------------------------------------------------------
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (404) 586-9000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of each exchange on which registered
------------------- -----------------------------------------
Common stock, $.01 par value New York Stock Exchange
8% Convertible Subordinated
Debentures Due 2003 New York Stock Exchange
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 is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock of the Registrant held
by nonaffiliates as of March 21, 1996 was $87,233,000 based on the closing
sales price of $2.00 on the New York Stock Exchange. For purposes of this
response only, all executive officers, directors and Equitex Inc. are
"affiliates" of the Registrant.
The number of shares outstanding of the Registrant's $.01 par value
common stock at March 21, 1996 was 49,801,929.
DOCUMENTS INCORPORATED BY REFERENCES
None.
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Henry Fong, age 59, has been the President, Chief Executive Officer,
Treasurer and a director of the Company since its inception in 1987. He has also
served as a director of Roadmaster Corporation ("RMC"), the Company's principal
operating subsidiary, since August 1987. He has been the President and a
director and a significant stockholder of Equitex, a publicly held business
development company, since January 1983. Equitex is the second largest
stockholder of the Company. Since February 1991, Mr. Fong has served as the
Chairman of the Board of Directors and Treasurer of MacGregor Sports and
Fitness, Inc., a publicly held company engaged in the business of marketing and
distributing a broad range of sports, recreational and fitness products under
the MacGregor trademark. From 1959 to 1982, Mr. Fong served in various
accounting, finance and budgeting positions with the Department of the Air
Force. During the period from 1972 to 1981, he was assigned to senior
supervisory positions at the Department of the Air Force headquarters in the
Pentagon. In 1978, he was selected to participate in the Federal Executive
Development Program and in 1981, he was appointed to the Senior Executive
Service. In 1970 and 1971, he attended the Woodrow Wilson School, Princeton
University as a Princeton Fellow in Public Affairs. Mr. Fong received the Air
Force Meritorious Civilian Service Award in 1982. Mr. Fong is a certified public
accountant. In March 1994, Mr. Fong was one of twelve CEOs selected as Silver
Award winners in Financial World magazine's Corporate American "Dream Team."
Edward E. Shake, age 51, has been the Chief Operating Officer of the
Company since December 1994 and a director of the Company since May 1993. Mr.
Shake has been employed by the Company or its predecessor since 1974. He has
been the President of RMC since February 1991 and was Vice President --
Operations of RMC from April 1984 to February 1991. Mr. Shake has been a
director of RMC since January 1992. Mr. Shake served as a director of MacGregor
Sports and Fitness, Inc. from December 1991 to January 1995, and has served as a
director of the Olney Trust Bank since March 1993. Mr. Shake holds a B.S. degree
from David Lipscomb University, B.S. and M.S. degrees in engineering from the
University of Tennessee and an A.M.P. degree from Harvard University.
Louis J. Conti, age 76, has served as a director of the Company since
October 1992. He was previously a director of the Company from October 1987
until October 1990. From February 1975 to February 1994, Mr. Conti was a
director of Emerson Electric Company, a publicly held company engaged in the
manufacturing and marketing of electric products for the consumer and industrial
markets. From September 1990 to February 1994, Mr. Conti was a director of Esco
Electronics Corporation, a publicly held company engaged principally in the
manufacture of defense and commercial systems and products. From 1956 to 1982,
he was an officer of GATX Corporation ("GATX"), which provides financial,
leasing capital and transportation services, where he headed various
subsidiaries of that company. Mr. Conti also served on the Board of Directors of
GATX from 1969 to 1978. From 1983 until his retirement in 1985, Mr. Conti was
Chairman and Chief Executive Officer of Marine Transport Lines, Inc. ("MTL"), an
independent ship owner and operator. Mr. Conti also served as a director of MTL
from 1983 to 1987. From 1977 through 1985, Mr. Conti was Chairman of the Reserve
Forces Policy Board of the United States Department of Defense. Mr. Conti
retired from the U.S. Marine Corps Reserve in 1979 as a Major General.
James H. Rand, age 52, has served as a director of the Company since July
1993. Mr. Rand is Chief Executive Officer and a principal stockholder of Koch
Label Company, L.L.C., a manufacturer of paper and plastic labels for the
international beverage and food industries. Since 1986, Mr. Rand also has been
President and principal shareholder of Rand & Company, a company engaged in ship
owning and agency, real estate investment and venture capital investment. From
1993 to 1995, Mr. Rand was Chief Executive Officer of Kredietbank Global
Management, Inc., a registered investment advisory firm specializing in the
investment management of pension and other institutional accounts. From 1990 to
1991, Mr. Rand was Senior Vice President with Wright Investor's Service, a
registered investment advisor. From 1978 to 1986, Mr. Rand was an officer of
Marine Transport Lines, Inc., an independent ship owner and operator, where he
held a variety of positions, including President and Chief Operating Officer
(1979-1985) and Chairman and Chief Executive Officer (1985-1986). Mr. Rand has
since 1988 been an underwriting member of Lloyd's and since 1987 has served as a
director of Navinvest, Ltd., a private maritime investment company.
Stephen P. Bradley, age 55, has served as a director of the Company since
March 1994. Professor Bradley is the William Ziegler Professor of Business
Administration and the Senior Associate Dean for Faculty Development at the
Harvard Business School. He is currently the Faculty Chairman of the Executive
Program in Competition and Strategy and teaches Competition and Strategy in the
MBA and executive programs. He is a past Chairman of the Managerial Economics
Area at the school. Professor Bradley received his B.E. in Electrical
Engineering from Yale University in 1963, where he was elected to TAU BETA PI,
and his M.S. and Ph.D. in Operations Research from the University of California,
Berkeley, in 1965 and 1968, respectively. Prior to coming to Harvard, he was
with the Center for Exploratory Studies of the IBM Corporation. Professor
Bradley is a member of the board of directors of the Controlled Risk Insurance
Company, Ltd., associate editor of Interfaces, and a past member of the
editorial board of the Harvard Business Review.
John D. Phillips, age 53, has served as a director of the Company since
December 1994. Mr. Phillips has been President, Chief Executive Officer and a
director of Metromedia since November 1995. Metromedia is the successor by
merger to Actava. From April 1994 to November 1995, Mr. Phillips was President,
Chief Executive Officer and a director of Actava. From February 1989 to
September 1993, Mr. Phillips was a director of Resurgens Communications Group
Inc. ("Resurgens"), the Chief Executive Officer thereof from May 1989 to
September 1993 and Chairman of its Board of Directors from June 1989 to
September 1993. In 1993, Resurgens merged with Metromedia Communications
Corporation and LDDS Communications, Inc. in a transaction that created the
fourth largest long-distance company in the country. From 1985 to 1988, Mr.
Phillips was Chairman and Chief Executive Officer of Advanced Telecommunications
Corporation.
Clay C. Long, age 60, has served as a director of the Company since
December 1994. Mr. Long is, and has been for more than five years, the Chairman
and founding partner of the Atlanta, Georgia law firm of Long, Aldridge &
Norman. In addition to serving as Chairman of that firm, Mr. Long engages in a
full-time legal practice specializing in corporate mergers and acquisitions. Mr.
Long currently serves as the Chairman of the Board of Trustees of the Georgia
Conservancy and as a board member of the Metropolitan Atlanta Community
Foundation. By appointment of the Governor of the State of Georgia, Mr. Long
serves as a board member of Jekyll Island Authority and holds numerous other
legal, business and community service positions and directorships. Mr. Long has
a B.A. degree from Birmingham-Southern College, attended Kings College,
University of London on a Rotary Foundation Fellowship and received his law
degree from Harvard Law School.
Michael P. Marshall, age 53, has served as a director of the Company since
December 1994. Mr. Marshall is a private investor. Mr. Marshall is, and has been
for more than five years, Chairman, President and a majority stockholder, and
currently is the sole stockholder, of Marshall & Co., a holding company for
various investment banking and securities related businesses. In March 1989, the
securities brokerage and investment banking business of Marshall & Co. was
acquired by Wheat First Securities, Inc. Mr. Marshall was a managing director in
the Atlanta, Georgia office of Wheat First Securities, Inc. from March 1989
through August 1989. Mr. Marshall was Chairman or Co-Chairman of Resurgens from
September 1989 to September 1993. Mr. Marshall has a B.A. degree in finance from
the University of Georgia.
Carl E. Sanders, age 70, has served as a director of the Company since
December 1994. Mr. Sanders is and has been Chief Partner of the Atlanta, Georgia
law firm of Troutman Sanders (or its predecessor firm) since 1967 and was
Governor of the State of Georgia from 1963 to 1966. He was Chairman of the Rules
Committee of the 1964 Democratic National Convention, a member of the Executive
Committee of the National Governors Conference, and Chairman of the Southern
Regional Education Board. He was Chairman of the Southern Governors Conference
in 1965. Prior to becoming Governor, he served one term in the Georgia House of
Representatives and three terms in the Georgia State Senate. He was President
Pro Tem of the State Senate from 1960 to 1963. He also serves as a member of the
board of directors of Carmiko Cinemas, Inc., First Union Corporation of Georgia,
Matria Healthcare, Inc., Learning Technologies, Ltd., Norrell Corporation and
Metromedia. He is a member of the Atlanta Committee for the Olympic Games as
well as the National Science Center Foundation. In November, 1989, the Emperor
and Government of Japan bestowed upon Governor Sanders the Order of the Sacred
Treasure, Gold and Silver Award, for significant contributions in promoting
friendly relations between the United States and Japan. Governor Sanders is a
graduate of the University of Georgia, where he also received his Juris Doctor
Degree.
Charles E. Sanders, age 47, has served as the Company's Principal
Accounting Officer since November 1995. Mr. Sanders has also served as the
Company's Vice President and Secretary since 1993. Mr. Sanders has been
Executive Vice President -- Administration and Treasurer of RMC since August
1994 and prior to that was Vice-President -- Treasurer of RMC from September
1990 to August 1994. Mr. Sanders has a B.S. degree in accounting from Southern
Illinois University. Mr. Sanders has been employed by the Company or its
predecessor since 1971.
Jeff L. Hinton, age 32, has served as the Company's Director of Plans,
Programs and Corporate Development since November 1995. From December 1994 to
November 1995, Mr. Hinton served as Chief Financial Officer of the Company. From
August 1993 to December 1994, Mr. Hinton served as the Company's Director for
Financial Planning and Analysis and Business Development. From October 1992 to
August 1993, Mr. Hinton was the Company's Manager of Internal Audit. From
September 1989 to October 1992, Mr. Hinton held various positions with Northern
Telecom, Ltd., a telecommunications equipment manufacturer, most recently as a
Manager in the Internal Audit Services Group. Mr. Hinton is a certified public
accountant and holds an M.B.A. degree from Vanderbilt University and a B.S.
degree in Accounting from David Lipscomb University.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who beneficially own more than ten percent of
the Common Stock to file initial reports of ownership of the Company's
securities and reports of changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Persons subject to these reporting requirements
are also required by SEC regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on a review of copies of the SEC
reporting forms furnished to the Company and written representations from the
Company's executive officers and directors, the Company believes that during
fiscal 1995, all such executive officers and directors of the Company made all
required Section 16(a) filings on a timely basis.
<PAGE> 3
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation received
by the Company's Chief Executive Officer and its three other executive officers
in 1995 for services rendered in all capacities (including service as a director
or as an officer or director of the Company's subsidiaries) during the Company's
last three years during which the Named Executive Officer was an executive
officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION
----------------------------- ------------------------------------------
OTHER RESTRICTED
NAME AND ANNUAL STOCK
PRINCIPAL POSITION BONUS COMPEN- AWARD(S) OPTIONS/ ALL OTHER
AT DECEMBER 31, 1995 YEAR SALARY ($)(2) SATION ($) SARS (#) COMPENSATION
-------------------- ---- ------- ------- ------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry Fong................................. 1995 600,000(4) 0 -- 0 (5) 0 (6) 1,515,584(3)
President and Chief Executive Officer 1994 71,154 0 -- 1,453,125 750,000 1,208,500(7)
1993 35,000(4) 0 -- 0 0 143,667(8)
Edward E. Shake............................ 1995 450,000(4) 0 -- 0 (5) 0 (6) 490,819(9)
Chief Operating Officer 1994 228,520 67,000 -- 1,089,844 281,250 372,532(10)
1993 195,200(4) 168,000 -- 0 0 293,541(11)
Jeff L. Hinton(12)......................... 1995 119,833 0 -- 0 0 (6) 101,027(13)
Director of Plans, Programs and Corporate 1994 70,333 10,500 -- 0 20,000 65,886(14)
Development 1993 -- -- -- -- -- --
Charles E. Sanders(15)..................... 1995 111,000 0 -- 0 0 100,441(16)
Vice-President and Secretary 1994 -- -- -- -- -- --
1993 -- -- -- -- -- --
</TABLE>
- ---------------
(1) The amounts shown do not include certain indirect compensation, the value
of which for each officer did not exceed the lesser of $50,000 or 10% of
the aggregate compensation for such officer.
(2) No amounts were earned by any of the Named Executive Officers in 1995 under
the Company's Annual Bonus Plan due to the failure to meet Bonus targets.
(3) Includes aggregate payment of $292,670 representing further partial payment
for services rendered in 1993 in connection with the successful completion
of the offerings for the Company's Convertible Subordinated Debentures (the
"Debenture Offering") and its Senior Subordinated Notes (the "Notes
Offering") and the acquisition of the Flexible Flyer division of Par
Industries, Inc. (the "Flexible Acquisition"). Payment of the foregoing
amounts was not deferred at the election of the named officer. See
footnotes 7 and 8. Also includes the payment of $595,000 for services
rendered in connection with activities leading to the acquisition of the
Sports Subsidiaries. Also includes payment of a one-time award of $510,000
approved by the Company's Board of Directors in 1994. Payment of the
deferred amounts were not deferred at the election of the named officer.
Also includes an aggregate of $117,914 with respect to a split dollar life
insurance policy for Mr. Fong representing the premiums paid for the term
life insurance portion of such policy and the "loan value" of the premiums
paid for the non-term life insurance portion of such policy.
(4) Includes $30,000 for Mr. Fong and $30,000 for Mr. Shake in 1994, and
$35,000 for Mr. Fong and $35,200 for Mr. Shake in 1993 for their services
as directors of the Company and its subsidiaries. Effective October 1994,
the Company revised its director compensation policy such that only non-
employee directors are eligible to receive compensation for their service
as directors.
(5) Represents the value of restricted stock granted to the named officer
pursuant to the KESIP. Shares vest on the fifth anniversary of the date of
grant, subject to certain accelerated vesting rights, including in the
event of a Change in Control of the Company. On December 31, 1995, Mr. Fong
and Mr. Shake held 375,000 and 281,250 shares, respectively, of restricted
stock valued at $890,625 and $667,969, respectively, based on the closing
sales price of the Common Stock on the New York Stock Exchange on the last
business day prior to such date.
(6) Represents options granted to the named officer under the KESIP. Twenty
percent (20%) of the total options granted vested as of the date of grant
and twenty percent (20%) vest on each anniversary of the initial date of
grant.
(7) Consists of partial payments for services rendered in 1993 in connection
with the successful completion of the Debenture Offering, the Notes
Offering and the Flexible Acquisition. Payment of the foregoing amount had
not been deferred at the election of the named officer. See footnotes 3 and
8. Excludes $595,000 payable to the named officer, subject to conditions
subsequent, for services rendered in connection with activities leading to
the acquisition of the Sports Subsidiaries. As of December 31, 1994, such
payment was contingent on the assimilation of the Sports Subsidiaries into
the Company. Also excludes a one-time award of $510,000 approved by the
Company's Board of Directors in 1994 and payable in 1995, which was subject
to the named officer's continued employment at such time, for services to
be performed by Mr. Fong in 1995 and beyond. Payment of the deferred
amounts were not deferred at the election of the named officer.
(8) Includes $66,667 earned in 1992 in connection with activities leading to a
recapitalization of the Company's financial structure, but not paid until
1993. In 1993, Mr. Fong earned $2,120,685 for services rendered in
connection with the successful completion of the Debenture Offering, the
Notes Offering and the Flexible Flyer Acquisition. Of such sum, $77,000 was
paid in 1993. Payment of the remaining amount was not deferred at the
election of the named officer. See footnotes 3 and 7.
(9) Includes payment of $262,500 representing final payment for services in
1993 in connection with the successful completion of the Notes Offering.
Also includes payment of a one-time award of $100,000 approved by the
Company's Board of Directors in 1994. Also includes $60,000 representing
final payment for activities leading to the acquisition of the Sports
Subsidiaries. Payment of the deferred amounts were not deferred at the
election of the named officer. Also includes $1,500 representing the
Company's matching contribution under its 401(k) Plan and $3,752
representing the Company's 1995 ESOP contribution on behalf of Mr. Shake.
Such latter amount includes the market value of 1,000 shares of Common
Stock and cash of $1,603 allocated to Mr. Shake's account for the purchase
of shares pursuant to the ESOP. For each period indicated, all of Mr.
Shake's ESOP shares are fully vested pursuant to the terms of the ESOP.
Also includes $3,600 of premiums paid for a term life insurance policy for
Mr. Shake. Also includes an aggregate of $56,467 with respect to a split
dollar life insurance policy for the named executive officer representing
the premiums paid for the term life insurance portion of such policy and
the "loan value" of the premiums paid for the non-term life insurance
portion of such policy.
(10) Includes $367,500 awarded in 1994 for the named officer's services in
negotiating the Company's 1994 revolving credit facility. Also includes
$1,421 representing the Company's matching contribution under its 401(k)
Plan and $3,611 representing the market value of 996 shares allocated to
Mr. Shake pursuant to the ESOP. Excludes a onetime award of $100,000
approved by the Company's Board of Directors in 1994, which was paid in
1995, for services performed by Mr. Shake, which are expected to benefit
the Company in 1995 and beyond. Also excludes $60,000 payable to the Named
Executive Officer, subject to conditions subsequent, for activities leading
to the acquisition of the Sports Subsidiaries into the Company. As of
December 31, 1994, such payment was contingent on the assimilation of the
Sports Subsidiaries into the Company. See footnote 9. Payment of the
deferred amounts were not deferred at the election of the named officer.
(11) Includes payment of $259,019 earned in 1993 in connection with the
successful completion of the Debenture Offering and the Flexible
Acquisition. Also includes $1,852 representing the Company's matching
contribution under its 401(k) Plan and $6,617 representing the market value
of 1,963 shares allocated to Mr. Shake pursuant to the ESOP. Also includes
$26,053 in interest forgiven on a loan from the Company to Mr. Shake
described under "Certain Relationships and Related Transactions." Excludes
$262,500 earned in 1993 in connection with the successful completion of the
Notes Offering payable by the Company on or before December 31, 1995,
subject to compliance with various debt covenants and internal cash
management practices. Payment of the deferred amount was not deferred at
the election of the named officer.
(12) Mr. Hinton became an executive officer of the Company upon his appointment
as Vice President and Chief Financial Officer in 1994. In 1995, Mr. Hinton
was appointed as Director of Plans, Programs and Corporate Development and
resigned as Chief Financial Officer of the Company. Accordingly, only
compensation information for 1994 and 1995 for Mr. Hinton is reported.
(13) Includes payment of a one-time award of $70,000 approved by the Company's
Board of Directors in 1994. See footnote 14. Also includes payment of
$27,000 for activities leading to the acquisition of the Sports
Subsidiaries. See footnote 14. Payment of the deferred amounts were not
deferred at the election of the named officer. Also includes $3,752
representing the Company's 1995 ESOP contribution on behalf of Mr. Hinton.
Such amount includes the market value of 714 shares and cash of $1,145
allocated to Mr. Hinton's account for purchase of shares pursuant to the
ESOP. Excludes $23,617 representing payments to Mr. Hinton in 1996 in
connection with his relocation to the Company's executive office. See
"Certain Relationships and Related Transactions."
(14) Includes $62,120 awarded in 1994 for Mr. Hinton's services in negotiating
the Company's 1994 revolving credit facility. Includes $3,566 representing
the market value of 983 shares allocated to Mr. Hinton pursuant to the
ESOP. Excludes $27,000 payable to the named officer, subject to conditions
subsequent, for activities leading to the acquisition of the Sports
Subsidiaries. As of December 31, 1994, such payment was contingent on the
assimilation of the Sports Subsidiaries into the Company. Also excludes a
one-time award of $70,000 approved by the Company's Board of Directors in
1994, which was paid in 1995, for services performed by Mr. Hinton, which
are expected to benefit the Company in 1995 and beyond. Payment of the
deferred amounts were not deferred at the election of the named officer.
See footnote 13.
(15) Mr. Sanders became an executive officer of the Company upon his appointment
as Principal Accounting Officer of the Company in 1995. Accordingly, only
compensation information for 1995 for Mr. Sanders is reported.
(16) Includes a one-time award of $80,000 approved by the Company's Board of
Directors in 1994, payable in 1995, subject to the named officer's
continued employment at such time, for services to be performed by Mr.
Sanders, in 1995 and beyond, which are expected to benefit the Company.
Payment of the deferred amounts were not deferred at the election of the
named officer. Also includes $15,000 for services in connection with
activities leading to the acquisition of the Sports Subsidiaries. As of
December 31, 1994, such amount was contingent on the assimilation of the
Sports Subsidiaries. Also includes $1,110 representing the Company's
matching contributions under its 401(k) Plan and $3,752 representing the
Company's 1995 ESOP contribution on behalf of Mr. Sanders. Such latter
amount includes the market value of 925 shares and cash of $1,487 allocated
to Mr. Sanders' account for the purchase of shares pursuant to the ESOP.
<PAGE> 4
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options or stock appreciation rights were granted in 1995 to the
Company's Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
The following table sets forth certain information concerning unexercised
options held at December 31, 1995 by the Named Executive Officers listed in the
Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE FY-END(#) FY-END($)(2)
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Henry Fong....................... -- -- 540,000/450,000 214,800/0
Edward E. Shake.................. 35,000 58,450 568,661/334,137 464,688/166,829
Charles E. Sanders............... 15,000 21,300 30,000/34,000 21,190/21,190
Jeff L. Hinton................... 15,000 25,050 17,000/15,000 8,055/2,685
</TABLE>
- ---------------
(1) Options herein includes stock warrants.
(2) Based on the closing sales price for the Common Stock as reported on the New
York Stock Exchange on December 29, 1995 of $2.375 per share.
PENSION PLAN
The Roadmaster Corporate Retirement Benefit Plan for Salaried Employees
(the "Pension Plan"), a noncontributory defined benefit plan, was amended
effective December 31, 1989 to provide that no hours of service, years of credit
service, compensation increase or other service performed after December 31,
1989 would be counted for any purpose under the Pension Plan, so that all
benefit accruals under the Pension Plan would cease effective as of December 31,
1989 and all participants in the Pension Plan would be fully vested in their
accrued benefits effective as of December 31, 1989.
Mr. Shake and Mr. Sanders are the only executive officers eligible to
participate in the Pension Plan. Benefits provided under the Pension Plan for
Mr. Shake and Mr. Sanders are frozen at $7,503 and $4,048 per year,
respectively. Such benefits are payable at age 65 (normal retirement age).
Benefits provided under the Pension Plan are in addition to normal Social
Security retirement benefits and maximum benefits under the Pension Plan
currently are limited to $115,641 for each participant.
EMPLOYMENT AGREEMENTS
In connection with the acquisitions of the Sports Subsidiaries, Henry Fong
and Edward E. Shake each entered into five year employment agreements with the
Company. Certain provisions of such Employment Agreements are discussed below.
The Agreements are subject to automatic renewal for additional one year terms
unless terminated by either party upon thirty days written notice prior to the
end of the initial or successive terms.
The Employment Agreements for Mr. Fong and Mr. Shake provide that for all
services rendered under such agreements, the Company will pay Mr. Fong and Mr.
Shake a salary of $600,000 per year and $450,000 per year, respectively. In
addition, the Company will provide Mr. Fong and Mr. Shake with such other
benefits as may, from time to time, be approved by the Board of Directors. Mr.
Fong and Mr. Shake are required to devote their full time, attention and
energies to the business of the Company, except that Mr. Fong may continue to
serve as President and a director of Equitex and may pursue such other business
investments (other than as an employee) as he shall elect as long as such duties
and pursuits do not interfere with his duties to the Company and are not in
competition, either directly or indirectly, with the activities of the Company.
Mr. Fong and Mr. Shake have agreed to certain covenants with respect to
confidential information of the Company and have agreed that during the term of
their respective employment and for a period of twenty-four months thereafter,
irrespective of the manner or reason for termination of their employment, that
they will not engage in, supervise, assist or own any interest in any entity
engaged in substantially the same business as the Company in the geographic
areas in which the Company operates.
The Employment Agreements may be terminated "for cause" by the affirmative
vote of a majority of the Board of Directors entitled to vote thereon. "Cause"
is generally defined as (i) conviction with respect to any felony; (ii) a
willful refusal by the employee to perform material duties and responsibilities
required in connection with his employment; (iii) a breach by the employee of
any covenant, warranty, representation or condition in his Employment Agreement;
(iv) substantial disability for a specified period or (v) any misappropriation,
theft or embezzlement of funds of the Company or any other act of fraud or
deceit.
Each Employment Agreement may be terminated without cause by the
affirmative vote of two-thirds of the members of the Company's entire Board of
Directors if the Company is "profitable" and by the affirmative vote of a
majority of the Board if the Company is not "profitable." For purposes of the
Employment Agreements, the Company shall be deemed to be profitable if the most
current audited consolidated financial statements of the Company and its
subsidiaries for the preceding fiscal year reflect positive net income from
continuing operations calculated in accordance with generally accepted
accounting principles.
In the event Mr. Fong's Employment Agreement is terminated without cause
while the Company is profitable, the Company is obligated to continue to pay Mr.
Fong all compensation payable under his Employment Agreement during the
remainder of its then current term. In the event Mr. Shake's Employment
Agreement is terminated without cause while the Company is profitable, the
Company is obligated to continue to pay Mr. Shake all compensation payable under
his Employment Agreement for the longer of the remainder of its then current
term or twenty-four months.
DIRECTORS' FEES AND COMPENSATION
All directors are reimbursed for all expenses incurred in attending board
and committee meetings. Each director who is not an employee of the Company also
is paid: (i) an annual retainer of $20,000, payable in equal monthly
installments; (ii) $1,000 for each Board meeting attended and (iii) $1,000 per
committee meeting attended for committee meetings conducted on a date different
from the date of a meeting of the Board of Directors. In addition, each
nonemployee director is eligible, pursuant to the Company's Directors Restricted
Stock Plan, to receive each year that number of shares of Common Stock having a
Fair Market Value of $10,000 upon annual reelection to the Board.
DIRECTORS' RESTRICTED STOCK PLAN
In October 1994, the Board of Directors adopted a new multi-year Directors'
Restricted Stock Plan (the "DRSP") for its outside directors as a means of
encouraging ownership of the Company's Common Stock and to more closely align
the interests of its outside directors with the interests of the Company's
stockholders in general. The DRSP is intended to be a self-administering plan
which permits the participation of all non-employee directors. The DRSP provides
that during the term of such plan, each individual who is elected to serve as a
non-employee director will, on the day immediately following the non-employee
director's election to the Board, be granted restricted stock having a value on
such date of $10,000. The number of shares to be granted is calculated by
dividing $10,000 by the Fair Market Value (as defined) of the Common Stock on
the date of grant. Annual grants in the same amount will be made each time an
individual is elected or re-elected to serve as a non-employee director. Shares
generally vest upon the last day of the director's term for which shares were
awarded; provided, however, that all unvested shares will become one hundred
percent (100%) vested upon the death, disability or retirement of the
participant or upon the effective date of a Change in Control (as defined) of
the Company. A total of 87,500 shares are available for grant under the DRSP, of
which 22,400 shares have been granted as of the date of the Record Date. Each
director was awarded 3,200 shares on June 15, 1995.
<PAGE> 5
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Conti and Mr. Rand served on the Compensation Committee for 1995. The
Company had no compensation committee interlocks or insider participation on the
Compensation Committee.
<PAGE> 6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of April 18, 1996, certain information
concerning ownership of Common Stock by: (i) each person who is known by the
Company to own beneficially more than 5% of the Common Stock, (ii) each director
individually, (iii) the Company's Chief Executive Officer and each other
executive officer listed in the Summary Compensation Table (collectively, a
"Named Executive Officer"), and (iv) all directors and executive officers of the
Company as a group. The determinations of "beneficial ownership" of Common Stock
are based upon Rule 13d-3 under the Exchange Act. Such rule provides that shares
will be deemed "beneficially owned" where a person has, either solely or in
conjunction with others, the power to vote or to direct the voting of shares
and/or the power to dispose, or to direct the disposition of, shares or where a
person has the right to acquire any such power within 60 days after the date
such "beneficial ownership" is determined.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) OF CLASS
- ------------------- ------------ --------
<S> <C> <C>
Equitex, Inc(2).......................................................... 5,105,437 10.3%
Henry Fong(3)(4)......................................................... 7,087,242 13.8%
Edward E. Shake(5)(6).................................................... 1,240,190 2.5%
Charles E. Sanders(5)(7)................................................. 138,122 *
Jeff L. Hinton(8)(9)..................................................... 36,697 *
Louis J. Conti(10)(11)................................................... 78,200 *
James H. Rand(11)(12).................................................... 28,200 *
Stephen P. Bradley(11)(13)............................................... 28,200 *
John D. Phillips(11)(14)(15)............................................. 19,197,200 38.5%
Clay C. Long(11)(16)..................................................... 58,200 *
Michael P. Marshall(11)(17).............................................. 28,200 *
Carl E. Sanders(11)(18).................................................. 38,200 *
Metromedia International Group, Inc.(19)................................. 19,169,000 38.5%
All executive officers and directors as a group (11 persons)(20)......... 27,958,651 53.6%
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated, the named individual or entity has sole voting
and investment power with respect to all shares shown as beneficially owned
by such person. For each beneficial owner, the number of shares outstanding
and the percentage of stock ownership includes the number of common and
common equivalent shares (including options and warrants exercisable within
60 days) owned by such individual or entity.
(2) The address of Equitex, Inc. is 7315 E. Peakview Avenue, Englewood,
Colorado 80111.
(3) The address of Mr. Fong is 2401 PGA Boulevard, Suite 280F, Palm Beach
Gardens, Florida 33410.
(4) Henry Fong is the President and a director and 5% shareholder of Equitex,
Inc. ("Equitex"). Includes all 5,105,437 shares of Common Stock owned by
Equitex, as to which Mr. Fong disclaims beneficial ownership. Investment
and voting power is exercised on behalf of Equitex by the investment
committee of Equitex's board of directors, which is composed of Mr. Fong
and two outside directors. Includes 240,000 shares of Common Stock issuable
pursuant to warrants exercisable within 60 days and 300,000 shares issuable
pursuant to options exercisable within 60 days. Includes 375,100 shares
held directly by Mr. Fong, of which shares 375,000 are restricted and
subject to forfeiture. Also includes 1,066,705 shares issuable pursuant to
warrants exercisable within 60 days held by a revocable trust for the
benefit of Mr. Fong's minor children and as to which Mr. Fong disclaims
beneficial ownership. Mr. Fong's right to revoke such trust is subject to
conditions precedent which have not occurred.
(5) The address of Mr. Shake and Mr. Sanders is 4730 East Radio Tower Lane,
Olney, Illinois 62450.
(6) Includes 456,161 shares issuable pursuant to warrants exercisable within 60
days and 112,500 shares issuable pursuant to options exercisable within 60
days. Includes 23,892 shares in the Company's 1990 Employee Stock Ownership
Plan and Trust (the "ESOP") and 401(k) Plan allocated to Mr. Shake, as of
the last plan report date. Also includes 90,400 shares of Common Stock as
to which Mr. Shake has shared investment and voting power. Also includes
557,237 shares held directly by Mr. Shake as to which Mr. Shake has sole
voting and investment power, of which shares 281,250 are restricted and
subject to forfeiture.
(7) Includes 22,000 shares issuable pursuant to warrants exercisable within 60
days and 8,000 shares issuable pursuant to options exercisable within 60
days. Includes 19,022 shares in the Company's ESOP and 401(k) Plan
allocated to Mr. Sanders as of the last Plan report date. Includes 17,100
shares of Common Stock as to which Mr. Sanders has shared investment and
voting power. Also includes 72,000 shares held directly by Mr. Sanders as
to which Mr. Sanders has sole voting and investment power.
(8) The address of Mr. Hinton is 250 Spring Street, N.W., Suite 3 South,
Atlanta, Georgia 30303.
(9) Includes 9,000 shares issuable pursuant to warrants exercisable within 60
days and 8,000 shares issuable pursuant to options exercisable within 60
days. Includes 1,697 shares in the Company's ESOP allocated to Mr. Hinton,
as of the last plan report date. Includes 15,000 shares as to which Mr.
Hinton has shared investment and voting power.
(10) The address of Mr. Conti is 185 Barra Lane, Inverness, Illinois 60067.
(11) Includes 25,000 shares issuable pursuant to options exercisable within 60
days.
(12) The address of Mr. Rand is 300 Atlantic Street, Stamford, Connecticut
06901.
(13) The address of Mr. Bradley is Harvard Business School, Morgan Hall, 240
Soldiers Field Road, Boston, Massachusetts 02163.
(14) The address of Mr. Phillips is Metromedia International Group, Inc., 945
East Paces Ferry Road, Suite 2210, Resurgens Plaza, Atlanta, Georgia 30326.
(15) Includes all 19,169,000 shares owned by Metromedia International Group,
Inc. as to which Mr. Phillips disclaims beneficial ownership.
(16) The address of Mr. Long is Long, Aldridge & Norman, One Peachtree Center,
Suite 5300, Atlanta, Georgia 30308.
(17) The address of Mr. Marshall is c/o Metromedia International Group, Inc.,
945 East Paces Ferry Road, Suite 2210, Resurgens Plaza, Atlanta, Georgia
30326.
(18) The address of Mr. Sanders is Troutman Sanders, 600 Peachtree Street, Suite
5200, Atlanta, Georgia 30308.
(19) The address of Metromedia International Group, Inc. is 945 East Paces Ferry
Road, Suite 2210, Resurgens Plaza, Atlanta, Georgia 30326.
(20) Includes an aggregate of 2,397,366 shares issuable pursuant to warrants and
options exercisable within 60 days.
<PAGE> 7
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since its inception in 1987, the Company has engaged Equitex as a
management consultant on a nonexclusive basis for an annual fee, payable in
equal monthly installments. Such annual fee was $144,000 in 1995. This
engagement is renewable annually. Mr. Fong is the President, a director and
approximately a 5% shareholder of Equitex. Equitex is a business development
company which invests in start up or restructuring companies by providing these
companies with management consulting expertise and interim financing, often
accepting equity positions in lieu of all or part of its fees.
The Company retains office space in Englewood, Colorado which formerly
served as its executive offices. Such space is provided to the Company by
Equitex which, in turn, leases such space for $2,500 per month from a
partnership of which Mr. Fong and his wife are the sole partners. Since 1991,
the Company has paid approximately 50% of the lease, payments and costs of
telephone services. Pursuant to such cost-sharing arrangements, the Company made
payments to Equitex of $48,101 in 1995. The Company believes these terms and its
portion of the underlying lease payment to be no less favorable than those which
could be obtained from non-affiliated parties in the same area.
In connection with the exercise of warrants in February 1993 under the
November 1992 Stock Purchase Plan, the Company made loans to 21 employees to
enable such employees to exercise their warrants. Such loans included a $224,311
loan to Mr. Shake to purchase 165,387 shares of Common Stock. During 1995, the
largest principal amount owed by Mr. Shake was $224,311. Such loan was secured
by the Common Stock obtained by Mr. Shake pursuant to the warrant exercise and
currently bears interest at the rate of prime plus 2% per annum. Although such
loan was scheduled to mature on February 24, 1996, the Company has extended the
maturity date for an additional year.
In December 1994, the Board of Directors elected Mr. Hinton as Vice
President and Chief Financial Officer of the Company, which required that he
relocate to the metropolitan Atlanta, Georgia area. The Company agreed to
purchase Mr. Hinton's Indiana residence in the event such residence had not sold
within one year following his relocation and to reimburse him for his carrying
costs for such year. In December 1995, the Company purchased such residence at
its appraised value ($130,500 based on an independent appraisal). Mr. Hinton had
acquired such residence in October 1993 for a purchase price of $129,900.
Subsequent to year end, the Company also reimbursed Mr. Hinton $23,617 for his
carrying costs subsequent to his relocation ($12,119) and the payment of related
income taxes ($11,498) on such reimbursement.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment No. 1 to its report on Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized.
ROADMASTER INDUSTRIES, INC.
---------------------------
Registrant
By: /s/ CHARLES E. SANDERS Date: April 26, 1996
-------------------------------
Charles E. Sanders
Secretary, Principal Financial Officer
(Principal Financial and Accounting, Officer)
