SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 022318
APS HOLDING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0306940
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
15710 JOHN F. KENNEDY BLVD., SUITE 700
HOUSTON, TEXAS 77032-2347
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(713) 507-1100
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE SECURITIES EXCHANGE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
$.01 PAR VALUE CLASS A COMMON STOCK NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE SECURITIES EXCHANGE
ACT: NONE
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 the 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.[ ]
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 [ ]
There were 13,790,110 shares of the Registrant's Class A Common Stock
outstanding as of the close of business on May 1, 1998. The aggregate market
value of the Registrant's Class A Common Stock held by non-affiliates was
$10,664,316 (based upon the price of $1.13 on May 1, 1998 as reported on the OTC
bulletin board system).
DOCUMENTS INCORPORATED BY REFERENCE - NONE
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of the APS Holding Corporation ("APS Holding") and its
subsidiaries (collectively referred to as the "Company") are elected annually
and hold office until the next annual meeting of stockholders and until their
successors are duly elected and qualified. The Company's executive officers
serve at the discretion of the Board of Directors.
DIRECTORS
The following table sets forth, for the nominees, information regarding
their names, ages as of May 25, 1998, principal occupations and other
directorships in certain companies held by them and the length of continuous
service as a director of the Company.
PRINCIPAL OCCUPATION AND
NOMINEES DIRECTORSHIPS AGE DIRECTOR SINCE
-------- ------------- --- --------------
Hubbard C. Howe Mr. Howe served as President and 69 1991
Chief Executive Officer of the
Company between March 1997 and
January 1998, and has been
Chairman of the Board of the
Company since August 1992. Mr.
Howe was Chairman of the Board and
Chief Executive Officer of
Remington Arms Company, Inc.
("RAC") from December 1993 until
December 1997. He currently
remains on the Board of RAC. Mr.
Howe is a principal and a
professional employee of Clayton,
Dubilier & Rice, Inc., a private
investment company ("CD&R"), and a
general partner of Clayton &
Dubilier Associates IV Limited
Partnership ("Associates"), the
general partner of the Clayton &
Dubilier Private Equity Fund IV
Limited Partnership, an investment
partnership managed by CD&R ("Fund
IV"). Mr. Howe is a Director of
Riverwood International
Corporation, and its parents, RIC
Holding, Inc. and Riverwood
Holding, Inc., a corporation which
is an investment partnership
managed by CD&R in which CD&R has
an investment.
Wiley N. Caldwell Mr. Caldwell was President of W.W. 71 1993
Grainger, Inc., an industrial
supply company, from prior to 1991
to July 1992 and was a director of
such company until April 1993.
Mr. Caldwell is also a director of
Consolidated Papers, Inc. and
Kewaunee Scientific Corp.
Michael J. Dubilier Mr. Dubilier was a professional 42 1989
employee of CD&R from prior to
1991 until 1994 and is currently a
general partner in Dubilier CRM
Fund I, a private investment
partnership managed by Dubilier &
Company (not affiliated with CD&R).
<PAGE>
Donald J. Gogel Mr. Gogel has been a principal of 49 1989
CD&R from prior to 1991 and
President since 1997. Mr. Gogel
is also a professional employee of
CD&R and a general partner of
Associates. Mr. Gogel is also a
director of Turbochef, Inc.
H. Jack Meany Mr. Meany has been Chairman of the 75 1990
Board, President and Chief
Executive Officer of Farr Company
since April 1994. Mr. Meany is a
director of BWIP, Inc., a
corporation in which an investment
partnership managed by CD&R
formerly had an investment.
Jerry K. Myers Mr. Myers has been Chairman of the 57 1996
Board of MEDCOR, Inc. since
December 1995 and serves as a
partner of CroBern Management
Partnership. Prior to joining
CroBern, Mr. Myers was President
and Chief Executive Officer of
Steelcase, Inc., which he joined
prior to 1991. Mr. Myers is also
a director of DigiTrace Care
Services, Inc.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below are the names, ages and present positions of the executive
officers of APS Holding as of May 25, 1998.
NAME AGE POSITION
Bettina M. Whyte......... 49 President & Chief Executive Officer
David C. Barbeau......... 50 Senior Vice President
John L. Hendrix.......... 49 Senior Vice President & Chief Financial
Officer
E. Eugene Lauver......... 51 Senior Vice President & Secretary
Charles M. Popik......... 48 Senior Vice President
Michael L. Preston....... 53 Senior Vice President
BETTINA M. WHYTE was elected President and Chief Executive Officer of the
Company on February 4, 1998. She is a principle with Jay Alix & Associates, a
leading professional services firm in the area of corporate turnarounds and
restructuring. Ms. Whyte was with Price Waterhouse LLP from 1990 to 1997 and was
National Director of Business Turnaround Services when she left them to join Jay
Alix & Associates in April 1997. She has spent more than fifteen years leading
turnarounds of under-performing and financially troubled companies.
DAVID C. BARBEAU has been Senior Vice President of Distribution Operations
since January 1993. He had been Vice President, Treasurer and Chief Financial
Officer prior to 1993.
JOHN L. HENDRIX has been Senior Vice President - Finance and Chief Financial
Officer since March 1997. He joined the Company in October 1996 as Vice
President - Finance and Chief Financial Officer. From prior to 1993 until
joining the Company he held various positions, most recently Senior Vice
President, Chief Financial Officer, Treasurer, and Secretary, with Kay-Bee Toy
Stores, a national retail organization.
E. EUGENE LAUVER has been Senior Vice President, Secretary and General
Counsel of APS Holding since September 1997. He held the position of Vice
President, Secretary and General Counsel since prior to 1993.
CHARLES M. POPIK has been Senior Vice President - Purchasing since April
1998. He previously served as Vice President - Purchasing since March 1995. From
prior to 1993 until joining the Company he held various purchasing positions,
most recently Vice President of Purchasing, with Parts Depot Company, L.P., a
distributor of automotive parts.
MICHAEL L. PRESTON has been Senior Vice President - Sales/Product Management
since April 1998. He previously served as Senior Vice President of Sales &
Business Development since January 1993. He had been Vice President of New
Market Development since prior to 1993.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who own more than 10% of the
Class A Common Stock to file with the Commission initial reports of ownership
and reports of changes in ownership of such Common Stock. Executive officers,
directors and greater than 10% stockholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms that
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with during the fiscal year ended January 31, 1998, except
that Forms 5 reporting the grant of options in March 1997 to each of Messrs.
Barbeau, Hendrix, Lauver, Preston, Clarence Gabriel, Jr., former Senior Vice
President and Ralph Nemeth, former Senior Vice President have not been timely
filed.
ITEM 11. EXECUTIVE COMPENSATION.
COMPENSATION OF DIRECTORS
During fiscal 1998, members of the Board of Directors who were not
employees of the Company or CD&R ("Non-Employee Directors") received $1,000 for
each board meeting attended and an annual retainer of $20,000. The chairman of
the Audit Committee and the chairman of the Compensation Committee each received
an additional $2,000 annual retainer for chairing such committees. All directors
are reimbursed for reasonable travel and lodging expenses incurred to attend
meetings.
EXECUTIVE COMPENSATION
The Summary Compensation Table summarizes the compensation paid to the
Company's Chief Executive Officer and each of its four other most highly
compensated executive officers (collectively, the "Named Executives") for the
previous three fiscal years for the Company and its subsidiaries.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
FISCAL
YEAR SECURITIES ALL OTHER
NAME AND ENDING SALARY BONUS OTHER ANNUAL UNDERLYING COMPENSATION
PRINCIPAL POSITION JANUARY ($)(1) ($) COMPENSATION OPTIONS(#) ($)(2)
------------------ ------- ------ ----- ------------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Mark S. Hoffman (3) 1998 $ 87,692 -0- $ 1,920 -0- $717,020(4)
President & Chief 1997 360,000 -0- 11,520 2,000 4,292
Executive Officer 1996 354,375 -0- 11,520 16,155 4,755
Michael L. Preston 1998 183,000 $30,000 8,940 10,000 18,334
Senior Vice President 1997 182,500 81,012 8,940 2,000 3,133
1996 176,375 65,512 8,940 8,340 4,691
David C. Barbeau 1998 188,500 37,800 8,940 10,000 19,523
Senior Vice President 1997 182,500 90,138 8,910 2,000 3,039
1996 176,375 72,350 8,940 8,460 3,536
Clarence Gabriel, Jr. 1998 140,308 150,000(11) 191,463(7) 10,000 -0-
Senior Vice President (5) 1997 53,846 74,000 21,513(9) -0- -0-
1996 -0- -0- -0- -0- -0-
Ralph Nemeth 1998 202,750 28,420 76,921(8) 10,000 -0-
Senior Vice President(6) 1997 67,436 50,000 68,472(10) -0- -0-
1996 -0- -0- -0- -0- -0-
</TABLE>
(1) Includes, where applicable, amounts electively deferred by each Named
Executive under the APS, Inc. Partnership Plan (the "Savings Plan") and
the APS, Inc. Executive 401(k) Deferral Plan (the "Deferral Plan").
(2) Amounts listed in this column represent the Company's contributions to the
Savings Plan and the Deferral Plan (exclusive of amounts deferred at the
election of the Named Executive) on behalf of the Named Executive, and
premium for up to $50,000 of life insurance as well as distributions from
the Deferral Plan to the Named Executive.
(3) Mr. Hoffman resigned his position as President and Chief Executive Officer
effective March 3, 1997. Mr. Howe became President and Chief Executive
Officer on March 3, 1997 and resigned those positions on January 18, 1998.
Mr. Howe was not compensated by the Company for such services.
(4) Includes stock appreciation rights exercised May 28, 1997.
(5) Mr. Gabriel joined APS, Inc. October 28, 1996 and resigned September 26,
1997.
(6) Mr. Nemeth joined APS, Inc. September 30, 1996 and resigned April 3, 1998.
(7) Includes relocation expense of $185,670.92.
(8) Includes relocation expense of $67,920.61.
(9) Includes relocation expense of $19,090.55.
(10) Includes relocation expense of $65,471.62.
(11) Amount represents payment made in connection with termination.
<PAGE>
OPTION GRANTS
The following table contains information concerning the grant of stock
options under the Company's 1993 Stock Option Plan and the 1990 Stock Option
Plan to the Named Executives during the Company's last fiscal year.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEE IN EXERCISE POTENTIAL REALIZABLE VALUE AT ASSUMED
OPTIONS FISCAL YEAR PRICE ANNUAL RATES OF STOCK PRICE
NAME GRANTED (#) 1998 ($/SH) EXPIRATION DATE APPRECIATION FOR OPTION TERM (1)
---- ----------- ---- ------ ---- --------------------------------
0%($) 5%($) 10%($)
----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Mark S. Hoffman -0- -0- -0- -0- -0- -0- -0-
Michael L. Preston 10,000 4.0 9.87 Mar. 25, 2007 -0- $62,072 $157,302
David C. Barbeau 10,000 4.0 9.87 Mar. 25, 2007 -0- 62,072 157,302
Clarence Gabriel, Jr. 30,000 11.9 9.87 Dec. 25, 1997 -0- -0- -0-
Ralph Nemeth 30,000 11.9 9.87 Jul. 02, 1998 -0- -0- -0-
</TABLE>
(1) The amounts shown under these columns are the result of calculations at 0%
and at the 5% and 10% rates required by the Securities and Exchange
Commission and are not intended to forecast future appreciation of the
Company's stock price.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning the value of
unexercised options held by each of the Named Executives at January 31, 1998.
None of the Named Executives exercised any stock options in fiscal year 1997.
(Stock appreciation rights were exercised as set forth in Note 4 to the Summary
Compensation Table.)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT JANUARY 31, 1998 OPTIONS AT JANUARY 31, 1998
(#) ($)(1)
--------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Mark S. Hoffman -0- -0- -0- -0-
Michael L. Preston 13,663 27,060 -0- -0-
David C. Barbeau 13,663 27,060 -0- -0-
Clarence Gabriel, Jr. -0- -0- -0- -0-
Ralph Nemeth 6,666 23,334 -0- -0-
(1) The closing price on the NASDAQ National Market for the Class A common stock
on the last business day in fiscal year ending January 31, 1998 was $.938, which
was less than the exercise prices of such options, and the Company's Chapter 11
filing was made on February 2, 1998.
<PAGE>
PENSION PLANS
The following table shows the estimated annual benefits payable to
hypothetical participants who are entitled to the maximum benefits under the
A.P.S., Inc. Employee's Retirement Plan, a tax-qualified non-contributory
defined benefit plan maintained by the Company (the "Pension Plan"), in the
compensation and years-of-service categories indicated in the table upon
retirement at normal retirement age (65 years of age) and without regard to the
maximum limitations on such benefit imposed under the Internal Revenue Code. The
amounts shown are based upon the assumption that such benefits will be paid in
the form of a straight-life annuity.
PENSION PLAN TABLE
YEARS OF SERVICE AT OCTOBER 1, 1992
ANNUALIZED 10 20 25 30
AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF
FINAL PAY SERVICE SERVICE SERVICE SERVICE
--------- ------- ------- ------- -------
$ 50,000 $ 6,356 $12,711 $ 15,889 $ 19,067
75,000 10,106 20,211 25,264 30,317
100,000 13,856 27,711 34,639 41,567
125,000 17,606 35,211 44,014 52,817
150,000 21,356 42,711 53,389 64,067
175,000 25,106 50,211 62,764 75,317
200,000 28,856 57,711 72,139 86,567
225,000 32,606 65,211 81,514 98,817
The Pension Plan provides retirement benefits based on an employee's years
of service and such employee's average annual earnings (subject to a maximum of
$200,000 annually, as adjusted by the Internal Revenue Service for cost of
living increases after 1989) for the 60 highest consecutive months' compensation
during the 120 months prior to retirement (and if the employee has been employed
less than five years, the average of compensation during all months employed).
Annual earnings include principally salary, overtime and certain bonus or
incentive compensation awards, excluding deferred compensation, fringe benefits
and other special pay.
Effective October 1, 1992, benefits under the Pension Plan were frozen by
amendments providing that no additional credit for service or increase in
covered compensation would accrue under the Plan. Participants in the Pension
Plan became fully vested in their accrued benefit on that date.
At October 1, 1992, the credited years of service and the average annual
earnings under the Pension Plan of the Named Executives were as follows:
YEARS OF SERVICE AVERAGE ANNUAL EARNINGS
Mark S. Hoffman ---- ----
Michael L. Preston 23 years 6 months $ 173,180
David C. Barbeau 2 years 4 months 151,733
Clarence Gabriel, Jr. ---- ----
Ralph Nemeth ---- ----
<PAGE>
SEVERANCE POLICY
The Company has established a written severance policy for the benefit of
eligible salaried and hourly employees whose employment terminates as a result
of one of the reasons enumerated in the written severance policy. Eligible
employees receive severance pay based on a formula which takes into account
years of service and the base compensation of the employee at the time of
termination. The maximum amount of severance pay an employee may receive is 26
weeks' salary. An employee's salary for these purposes includes his base pay and
excludes shift premiums, overtime, bonuses, commissions or other allowances.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of May 25, 1998
(unless otherwise noted) as to the beneficial ownership of Class A Common Stock
by (i) each person known by the Company to own beneficially five percent or more
of its outstanding Class A Common Stock, (ii) each of the nominees for director,
(iii) the Company's Chief Executive Officer for the 1998 fiscal year and each of
the Company's other four most highly compensated executive officers for such
year and (iv) all current directors and executive officers as a group, based on
13,783,873 shares of Class A Common Stock outstanding on such date. Such
information includes all options which will vest within 60 days of such date.
Each beneficial owner has sole voting and investment power in the respect to the
listed shares unless otherwise indicated.
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENTAGE OF CLASS
- ------------------------ -------------------- -------------------
<S> <C> <C>
The Clayton & Dubilier Private Equity Fund IV
Limited Partnership (1) 4,119,298 30.0
Donald J. Gogel (2) 4,119,298(2) 30.0
Hubbard C. Howe (2)(3) 4,126,316(2)(3) 30.0
Wiley Caldwell 14,035 *
Michael J. Dubilier 15,000 *
H. Jack Meany 18,385 *
Jerry K. Myers 4,000 *
David C. Barbeau (4)(5) 55,491 *
Michael L. Preston (4)(5) 52,119 *
All executive officers and directors as a group
(11 persons(4)(5)(6)) 4,283,277 31.2
</TABLE>
* Less than 1.0%
(1) The address of The Clayton & Dubilier Private Equity Fund IV Limited
Partnership ("Fund IV") is 270 Greenwich Avenue, Greenwich, Connecticut
06830. Fund IV is an investment partnership, the general partner of which
is Associates. The general partners of Associates are Joseph L. Rice, III,
Alberto Cribiore, Donald J. Gogel, B. Charles Ames, William A. Barbe, Leon
J. Hendrix, Jr., Andrall E. Pearson and Hubbard C. Howe. Such general
partners share investment discretion with respect to securities held by
Fund IV, but disclaim beneficial ownership thereof. The information is
based on Amendment No. 1 to Schedule 13G of Fund IV, Associates and its
general partners dated February 28, 1995, filed with the Securities and
Exchange Commission (the "Commission").
(2) Includes 4,119,298 shares owned by Fund IV as to which Messrs. Gogel and
Howe share investment discretion but disclaim beneficial ownership.
(3) 7,018 of these shares are held by Gene S. Howe, the wife of Hubbard C.
Howe. Mr. Howe disclaims beneficial ownership of the shares held by Mrs.
Howe.
(4) Includes shares that the officers have a night to purchase within 60 days
pursuant to stock options as follows: Mr. Barbeau - 26,139; Mr. Preston -
26,067; and three other executive officers - 28,219.
<PAGE>
(5) The Company has financed a portion of the purchase price of 21,052 shares
for each of Messrs. Barbeau, Lauver and Preston, and the officers have
pledged such shares to the Company as collateral for such financing. See
"Certain Relationships and Related Transactions."
(6) Includes shares attributed to Messrs. Gogel and Howe. See notes (2) and
(3) above. All current executive officers and directors as a group hold
options which have vested within 60 days after May 25, 1998, to purchase
80,425 shares of Class A Common Stock, and which have been included in the
beneficial ownership figures for all executive officers and directors as a
group. No additional options will vest within 60 days after such date.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In November 1990, each of Messrs. Barbeau, Lauver and Preston purchased
21,052 shares of Class A Common Stock from the Company and financed a portion of
the purchase price through bank loans guaranteed by the Company. In December
1997, the Company paid such bank loans, and the officers became obligated to
repay such amounts to the Company. The outstanding principal amounts of such
loans, which are secured by a pledge by the officers of such shares, are $87,918
for Mr. Barbeau, $103,944 for Mr. Lauver and $100,939 for Mr. Preston. Such
loans are payable in annual installments beginning December 8, 2000 and ending
December 8, 2002 and bear interest at the prime commercial rate from time to
time charged by a commercial bank.
CD&R, of which each of Messrs. Gogel and Howe is a principal and employee,
was paid a management fee by the Company of $300,000 for the fiscal year ended
in 1998, for financial advisory and management consulting services.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
APS HOLDING CORPORATION
Date: June 1, 1998 By: /s/ JOHN L. HENDRIX
John L. Hendrix, Senior Vice President
and Chief Financial Officer
