FORM 10-K/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from ............... to ...............
Commission file number 1-649
READING COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Pennsylvania 23-6000773
(State of incorporation) (I.R.S. Employer Identification No.)
30 South Fifteenth Street
13th Floor
Philadelphia, Pennsylvania 19102
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number: 215-569-3344
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.01 par value
(Title of class)
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]
As of March 28, 1995, 4,961,186 shares of Class A Common Stock and
12,218 shares of Common Stock were outstanding and the aggregate market value of
voting stock held by nonaffiliates of the Registrant was approximately
$23,259,880.
<PAGE>
Part III, Items 10-13 are amended in their entirety as set forth herein.
PART III
Item 10. Directors and Executive Officers of the Registrant
<TABLE>
<CAPTION>
Name Age Position
- - ---- --- --------
<S> <C> <C>
James J. Cotter(1) 57 Chairman of the Board, Chairman of the Executive
Committee of the Board and a Director
S. Craig Tompkins 44 President and a Director
Joseph L. Castle II(2) 62 Chairman of the Audit and Finance Committee of the
Board and a Director
Edward L. Kane(1)(3) 57 Director
Gerard P. Laheney 57 Director
Ralph B. Perry III(1)(3) 59 Chairman of the Nominating Committee of the Board
and a Director
Ronald I. Simon(2) 56 Director
John W. Sullivan(1) 60 Director
Albert J. Tahmoush(2) 73 Director
Charles S. Groshon 41 Vice President
Eileen M. Mahady 29 Controller
Robert F. Smerling 60 President, Reading Cinemas of Puerto Rico, Inc.
James A. Wunderle 43 Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Treasurer
</TABLE>
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(1) Member of the Executive Committee. The Executive Committee is appointed
annually by the Board of Directors and exercises the authority of the
Board of Directors in the management of the business and affairs of the
Company between meetings of the Board of Directors. The Executive
Committee is responsible for recommending to the Board of Directors
remuneration for senior management and officers of the Company,
recommending adoption of compensation plans and the granting of options
under the Company's stock option plan. The Executive Committee held one
meeting in 1994.
(2) Member of the Audit and Finance Committee. The Audit and Finance
Committee is appointed annually by the Board of Directors to recommend
the selection of independent auditors, review the scope and results of
the annual audit, review financial results and status, review and
assess the adequacy of the Company's accounting practices, financial
controls and reporting systems and assess the financial planning
functions of the Company. During 1994, the Audit and Finance Committee
held one meeting.
(3) Member of the Nominating Committee. The Nominating Committee is
appointed annually by the Board of Directors to recommend to the Board
of Directors nominees to be elected to the Board of Directors by the
shareholders or by the Board of Directors in the case of vacancies
which occur between meetings of the shareholders. The Nominating
Committee held one meeting in 1994.
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<PAGE>
Mr. Cotter has been Chairman of the Board of Directors since December
1991, Chairman of the Company's Executive Committee since March 1992 and a
director since September 1990. Mr. Cotter is the principal executive officer of
the Company. Mr. Cotter has been Chairman of the Board of Craig Corporation
("Craig") since 1988, and a director since 1985. Mr. Cotter has been a director
and the Chairman of the Board of Citadel Holding Corporation ("Citadel") since
1991. From October 1991 to June 1992, Mr. Cotter also served as the acting
Chairman of Citadel's wholly-owned subsidiary, Fidelity Federal Bank, FSB
("Fidelity"), and served as a director of Fidelity until December 1993. Mr.
Cotter has been a director and Chief Executive Officer of Townhouse Cinemas
Corporation (motion picture exhibition) since 1987, Executive Vice President and
a director of The Decurion Corporation (motion picture exhibition) since 1969
and a director of Stater Bros. Holdings, Inc. and its predecessors (retail
grocery chain) since 1987. From 1988 through January 1992, Mr. Cotter also
served as the President and a director of Cecelia Packing Corporation (a citrus
grower and packer), a company wholly owned by Mr. Cotter. Mr. Cotter is also a
director and Executive Vice President of Pacific Theatres, Inc. ("Pacific"), a
wholly-owned subsidiary of The Decurion Corporation.
Mr. Tompkins has been President and a director of the Company since
March 1993. Mr. Tompkins is President and a director of Craig and has served in
such positions since March 1, 1993. Prior thereto, Mr. Tompkins was a partner in
the law firm of Gibson, Dunn & Crutcher for more than five years. Mr. Tompkins
has been a director of Citadel since May 1993, became Vice Chairman in August
1994, and Secretary, Treasurer and Principal Accounting Officer in September
1994. Mr. Tompkins has served as a director of G&L Realty Corp., a New York
Stock Exchange listed REIT, since December 1993.
Mr. Castle has been a director of the Company since January 1981 and is
Chairman of the Company's Audit and Finance Committee. He is Chairman, Chief
Executive Officer and a director of Castle Energy Corporation which owns a
77,000 barrel-per-day oil refinery in Lawrenceville, Illinois, a 49,500
barrel-per-day oil refinery in Santa Fe Springs, California, a 77-mile pipeline
in Rusk County, Texas and has interests in approximately 350 producing oil and
gas wells. From 1973 to December 1980, Mr. Castle was a court-appointed trustee
of the Company. Mr. Castle is also a director of Comcast Corporation, Charming
Shoppes, Inc., Independence Capital Management, Inc. and Mark Centers Trust.
Mr. Kane has been a director of the Company since 1989. Mr. Kane is
Chairman, Chief Executive Officer and a director of Altis Outpatient Services,
Inc., which owns and operates ambulatory surgical centers. In February 1995 Mr.
Kane became Vice President of SunSurgery Corporation, a subsidiary of Sun
Healthcare Group, Inc. Mr. Kane served as President of the Company from
December 1991 through January 1993 and was President of Craig from January 1988
through January 1993. From 1970 until March 1989, Mr. Kane was a member of
Haskins, Nugent, Newnham, Kane & Zvetina, a professional law corporation. Mr.
Kane is a director of Craig and BDI Investment Corporation.
Mr. Laheney has been a director of the Company since November 1993.
Mr. Laheney has been Vice President of The Partners Financial Group, Inc.
since December 1993 and President of Aegis Investment Management Company, an
investment advisory firm specializing in international investment portfolio
management since January 1, 1994. Mr. Laheney was Vice President of Dean
Witter Reynolds from April 1990 until December 1993. He was Vice President,
Investments of Prudential Bache Securities Inc. from July 1985 to April
1990. He is also a director of Craig.
Mr. Perry has been a director of the Company since December 1988, and
is Chairman of the Nominating Committee. Mr. Perry is a member in the Los
Angeles, California law firm of Graven Perry Block Brody & Qualls, a
professional corporation. Since 1985 Mr. Perry has also been a director of
Craig, Fidelity, and Gateway Investments, Inc. (a licensed broker/dealer wholly
owned by Citadel) and served as a director of Citadel from 1985 through
April 1993.
Mr. Simon has been a director of the Company since March 1989. He has
served as the President of Ronald I. Simon Inc., a financial consulting company,
since 1974 and Chairman of the Board of Sonant Corporation since April 1, 1993.
Mr. Simon was the Managing Director-Chief Financial Officer of Henley Group,
Inc., an owner and manager of diverse businesses and other assets, from January
1986 through March 1990.
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<PAGE>
Mr. Sullivan has been a director of the Company since January 1981.
Mr. Sullivan was Chairman of the Board of the Company from April 1986
through December 1991. He was Chief Executive Officer of the Company from
January 1981 to October 1986 and was President from January 1981 until April
1986. Mr. Sullivan is engaged in real estate development. He is also a director
of Castle Energy Corporation.
Mr. Tahmoush has been a director of the Company since January 1981.
From March 1977 until his retirement in August 1985, he was Chairman, President
and Chief Executive officer of Frank B. Hall & Co., Inc., an insurance broker.
He is also a director and Deputy Chairman of UBAF Arab American Bank.
Mr. Groshon has been Vice President of the Company since December 1988.
He was an internal auditor with the Company from August 1984 until December
1988, and a staff accountant prior thereto.
Ms. Mahady has been Controller of the Company since April 1990.
Prior to joining the Company, she was a senior auditor with Ernst & Young.
Mr. Smerling was retained in November 1993 to serve as President of
Reading Cinemas, Inc. Mr. Smerling is President of Reading Cinemas of Puerto
Rico, Inc. ("RCPR"). He served as president of Loews Theatre Management
Corporation, a subsidiary of Sony Corporation, from May 1990 until November
1993. From March 1989 through April 1990 Mr. Smerling was self-employed. Mr.
Smerling also serves as President and Chief Executive Officer of City Cinemas
Corp. ("City Cinemas"), a motion picture exhibitor located in New York City,
New York. Mr. Smerling has over 35 years experience in the motion picture
exhibition industry.
Mr. Wunderle has been Chief Operating Officer since February 1990 and
Executive Vice President, Treasurer, and Chief Financial Officer since December
1988. He was Vice President of Finance, Chief Financial Officer and Treasurer
from January 1987 to December 1988 and prior thereto was Treasurer since March
1986.
S. Craig Tompkins was elected President of the Company and to the Board
of Directors of the Company effective March 1, 1993. On that same date that he
was elected to the positions with the Company, Mr. Tompkins was elected by the
Directors of Craig as the President and as a member of the Board of Directors of
that corporation. Although the terms of Mr. Tompkins' employment with the
Company and with Craig are independent of one another, Mr. Tompkins has advised
the Company that he would not have accepted the positions with the Company if he
had not been elected that same day to his current positions at Craig and that it
was his understanding, based upon negotiations with the Chairman of the Board of
the Company and of Craig, that, subject to the approval of the Directors of the
Company and of Craig, he would be serving in similar capacities at both the
Company and Craig. The Company has been advised by Craig that Craig has no
agreement or understanding with Mr. Tompkins with respect to his serving as an
officer or director of the Company either in his individual capacity or on
behalf of Craig. Mr. Tompkins' understanding with the Company concerning the
terms of his employment anticipates that he will serve as a director of the
Company in addition to serving as President.
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<PAGE>
Item 11. Executive Compensation
I. SUMMARY COMPENSATION TABLE
The following table shows, for the years ending December 31, 1994,
1993, and 1992, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to each of the most highly
compensated executive officers of the Company whose compensation exceeded
$100,000 in all capacities in which they served:
<TABLE>
<CAPTION>
Long Term
Annual Compensation Awards
------------------------------------------- ------------
Other Annual
Salary Bonus Compensation Options
Name and Principal Position Year ($) ($) ($)** (#)
- - --------------------------- ------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
James J. Cotter * 1994 $150,000
Chairman of the Board of 1993 150,000
Directors 1992 150,000 265,232
S. Craig Tompkins *** 1994 $180,000
President 1993 150,000 17,500
Robert F. Smerling**** 1994 175,000
President, Reading 1993 20,192 15,000
Cinemas of Puerto
Rico, Inc.
James A. Wunderle 1994 120,000 $50,000
Executive Vice President, 1993 115,000 50,000
Chief Operating Officer, 1992 115,000 40,000
Chief Financial Officer
and Treasurer
</TABLE>
* Since December 1991, Mr. Cotter has been the principal executive
officer of the Company and may therefore be considered to have acted
in a capacity similar to the chief executive officer of the Company
since that time.
** In accordance with Company practice, Mr. Cotter has received a fee
for his services as Chairman of the Board of Directors of $150,000
per annum since December 1991.
*** Mr. Tompkins was retained as President effective March 1, 1993.
Amount set forth for 1993 reflects salary for the period March 1
through December 31, 1993.
**** Mr. Smerling was retained by the Company effective November 17, 1993.
Amount set forth reflects salary for 1993.
Directors who are not employees of the Company receive an annual
retainer of $18,000, except for the chairman of each Board committee who
receives an additional annual retainer of $2,000. The Chairman of the Board of
Directors receives an annual retainer of $150,000. No separate fees are paid for
meetings of the Board or committee meetings.
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<PAGE>
Mr. Tompkins is entitled to a severance payment equal to his annual
base salary and continuation of medical and insurance benefits in the event that
his employment is involuntarily terminated and no change in control of the
Company has occurred. Mr. Tompkins is entitled to a severance payment equal to
two years annual salary in the event that a change in control of the Company
occurs.
Mr. Smerling is entitled to a severance payment equal to his annual
base salary after the initial two-year term of his employment, which term
expires November 17, 1995, if he is terminated by the Company. Mr. Smerling also
may borrow up to four percent of the capitalization of the Company's theater
subsidiaries (plus interest at prime plus one percent) from the Company to
invest in stock of the Company's theater subsidiaries.
Mr. Wunderle is entitled to receive a payment equal to his annual base
salary in the event his employment is involuntarily terminated.
II. OPTION GRANT TABLE
No options were granted under the Company's 1992 Non-Qualified Stock
Option Plan during the year ended December 31, 1994 to any of the persons named
in the Summary Compensation Table above.
III. OPTION EXERCISES AND YEAR-END TABLE
The following sets forth information with respect to the options held
by the persons named in the Summary Compensation Table above as of December 31,
1994. No options were exercised by such persons during the fiscal year ended
December 31, 1994 and none of the options held by such persons at December 31,
1994 had exercise prices which were below the market price of the Company's
Class A common stock as of that date.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Unexercised Options at
12/31/94(#)
--------------------
Exercisable /
Name Unexercisable
- - ------------------------------- --------------------
<S> <C>
James J. Cotter 265,232 / 0
S. Craig Tompkins 4,375 / 13,125
Robert F. Smerling 3,000 / 12,000
James A. Wunderle 17,000 / 0
</TABLE>
Compensation Committee Interlocks and Insider Participation
The Executive Committee of the Board of Directors performs certain
functions which are equivalent to those performed by a compensation
committee. Mr. Kane is a member of the Executive Committee, and served as
President of the Company from December 1991 through January 1993. Mr. Cotter is
the principal executive officer of the Company and also a member of the
Executive Committee of the Board of Directors. Mr. Sullivan, also a member of
the Executive Committee, served as the President and Chief Executive Officer of
the Company from 1981 through 1986.
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<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
Beneficial Ownership of Common Stock and Class A Common Stock
The following tables set forth certain information regarding the Common
Stock and Class A Common Stock of the Company owned on April 21, 1995 by (i)
each person or group who is known by the Company to own beneficially more than 5
percent of the Company's Common Stock or Class A Common Stock, (ii) each of the
Company's directors and (iii) all directors and officers of the Company as a
group.
5% Beneficial Owners
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent
Name and Address of Beneficial Owner Class Ownership (1) of Class
- - ------------------------------------ ----- --------- --------
<S> <C> <C> <C>
Craig Corporation Class A 2,334,957 (2) 47.08
550 South Hope Street Common Stock
Los Angeles, California 90071
James J. Cotter Class A 333,232 (2) (3) 6.38
559 South Hope Street Common Stock
Los Angeles, California 90071
</TABLE>
Security Ownership of Management
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Beneficial Class A
Name of Beneficial Owner Ownership (1) Common Stock (1)
- - ------------------------ --------- ------------
<S> <C> <C>
Joseph L. Castle II.................................................. 8,500 (4) *
James J. Cotter...................................................... 333,232 (2)(3) 6.38
Edward L. Kane....................................................... 9,000 (2)(4)(5) *
Gerard P. Laheney.................................................... 5,000 (2)(6) *
Ralph B. Perry III................................................... 39,000 (2)(4)(7) *
Ronald I. Simon...................................................... 9,500 (4) *
Robert F. Smerling................................................... 6,500 (8) *
John W. Sullivan..................................................... 209,859 (4)(9) 4.22
Albert J. Tahmoush................................................... 7,500 (4) *
S. Craig Tompkins.................................................... 10,150 (2)(10) *
James A. Wunderle.................................................... 17,000 (11) *
All Directors and Officers As a Group (13 Persons)................... 655,241 (12) 12.35
</TABLE>
* Percentages of less than one percent have not been indicated.
(1) Includes outstanding shares of Class A Common Stock and Class A Common
Stock issuable within 60 days of April 21, 1995 upon the exercise of
outstanding stock options. All of the stock beneficially owned by the
directors or officers is Class A Common Stock.
(2) Craig Corporation, a Delaware corporation, filed a Schedule 13D dated
June 19, 1989, as amended September 1, 1989, March 19, 1990, May 28,
1992, October 29, 1992, November 20, 1992, January 8, 1993 and
February 4, 1993, and Form 4's dated April 6, 1993 and May 10, 1993,
with the Securities and Exchange Commission (the "SEC") which stated in
part that pursuant to purchases made between May 24, 1989 and May 10,
1993, Craig acquired these shares. The filings further state that the
shares have been purchased for investment purposes. James J. Cotter,
is Chairman of the Board of the Company and Craig. S. Craig Tompkins,
is President of the Company and Craig. Edward L. Kane, Gerard P.
Laheney and Ralph B. Perry III are all members of Craig's Board of
Directors. James J. Cotter is also a principal shareholder of Craig.
Messrs. Cotter, Tompkins, Kane, Laheney and Perry all disclaim
beneficial ownership of the Company's shares held by Craig.
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<PAGE>
(3) Includes 1,000 shares held by the James J. Cotter Profit Sharing Plan.
Mr. Cotter is eligible to acquire 265,232 shares through the exercise
of his stock options.
(4) Includes 7,500 shares which may be acquired through the exercise of
stock options.
(5) Includes 1,500 shares held in a retirement account.
(6) Includes 5,000 shares which may be acquired through the exercise of
stock options.
(7) Includes 3,500 shares held in a retirement account.
(8) Includes 3,000 shares which may be acquired through the exercise of
stock options.
(9) Includes 79,920 shares owned by a foundation of which Mr. Sullivan is a
director. Mr. Sullivan has shared voting and dispositive power with
respect such shares. Excludes 136,412 shares owned by Mr. Sullivan's
wife and children as to which Mr. Sullivan disclaims beneficial
ownership.
(10) Includes 8,750 shares which may be acquired through the exercise of
stock options. Excludes 200 shares held in Mr. Tompkins' wife's
retirement plan and 500 shares held in the trust of Mr. Tompkins' minor
child as to which Mr. Tompkins disclaims beneficial ownership.
(11) Includes 17,000 shares which may be acquired through the exercise of
stock options.
(12) Includes 343,982 shares which may be acquired through the exercise of
stock options.
Item 13. Certain Relationships and Related Transactions
In accordance with the terms of Mr. Smerling's employment, in December
1993, the Board of Directors authorized a $1,000,000 loan to Mr. Smerling. The
principal relating to the fully secured loan which accrued interest at the prime
rate of interest plus one percent was repaid by Mr. Smerling on April 1, 1994.
Mr. Smerling serves as President of Reading Cinemas of Puerto Rico,
Inc. ("RCPR") and City Cinemas, a New York motion picture theater exhibitor.
City Cinemas is an affiliate of Mr. Cotter, the Company's Chairman. RCPR and
City Cinemas have entered into an Executive Sharing Agreement pursuant to which
Mr. Smerling provides services to both RCPR and City Cinemas entities and the
cost of such services is shared by the parties, if such costs cannot be
allocated directly to such parties. Prior to retaining Mr. Smerling and entering
into the Executive Sharing Agreement, the Board of Directors had determined that
City Cinemas and RCPR are not competitors and also noted that the arrangement
provided RCPR with a chief executive officer with background and experience
which Reading Cinemas could not otherwise afford based upon its present scope of
operations.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
READING COMPANY
By: /s/ James A. Wunderle
------------------------
James A. Wunderle
Executive Vice President and
Chief Operating Officer
April 28, 1995
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