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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB/A
(AMENDMENT NO. 2)
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission File Number 0-20618
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RAILAMERICA, INC.
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(Name of small business issuer in its charter)
DELAWARE 65-0328006
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(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification Number)
301 Yamato Road, Suite 1190
Boca Raton, Florida 33431
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 994-6015
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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
--- ---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. ( )
The registrant's revenues for the fiscal year ended December 31, 1996
were $25,658,241.
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of May 16, 1997 computed by reference to the high/ask and
low/bid prices of registrant's common stock reported on NASDAQ on such date was
$32,000,000.
The number of shares outstanding of registrant's Common Stock, $.001
par value per share, as of May 16, 1997 was 8,428,229.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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ITEM 10. EXECUTIVE COMPENSATION
BOARD OF DIRECTORS COMPENSATION
During 1995, each director of the Company who was not an employee of
the Company received a retainer of $1,000 per month and was paid $500 per Board
meeting attended and $400 for each additional day spent on Company business. All
directors are reimbursed for reasonable out-of-pocket expenses associated with
travel to Board meetings and other Company business.
Effective March 1, 1996, the compensation for directors that are not
employees of the Company changed to a retainer of $2,000 per month, and will be
paid $500 for each Board meeting attended and $400 for each committee meeting
attended ($600 for the Chairman).
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN. The Board of Directors of
the Company has adopted, effective January 1, 1995, the 1995 Non-Employee
Director Stock Option Plan (the "Directors Plan"), under which 250,000 shares of
common stock have been reserved for issuance. Pursuant to the Directors Plan,
directors of the Company who are not also employees of the Company
("Non-Employee Directors") are granted options to purchase Common Stock. The
Directors Plan is administered by the Compensation Committee, the members of
which are also participants therein. Subject to the provisions of the Directors
Plan, the Compensation Committee has sole discretionary authority to construe,
interpret and apply the terms of the Directors Plan, to determine all questions
thereunder, and to adopt and amend rules and regulations for the administration
thereof as it may deem desirable.
Under the terms of the Directors Plan, each Non-Employee Director will
be granted an option to purchase 50,000 shares of common stock on the date such
person is first elected to become a director of the Company. The term of the
Directors Plan is ten years from the effective date, after which no further
options will be granted thereunder. Options granted under the Directors Plan
expire ten years from the date of grant. The exercise price per share of each
option granted under the Directors Plan will be the fair market value of the
Common Stock on the date prior to the date the option is granted. Options
granted under the Directors Plan vest over a period of three years at the rate
of one-third annually on each anniversary date of the grant, provided the
Non-Employee Director to whom the options are granted continues to serve as a
director on each such vesting date.
As of the date hereof, options to purchase 10,000 shares of the
Company's Common Stock have been granted to Donald D. Redfearn under the
Directors Plan, at an exercise price of $3.50 per share, options to purchase
50,000 shares of the Company's Common Stock have been granted to Charles
Swinburn under the Directors Plan at an exercise price of $4.19 per share,
options to purchase 50,000 shares of the Company's Common Stock have been
granted to Richard Rampell under the Directors Plan at an exercise price of
$4.81 per share and options to purchase 50,000 shares of the Company's Common
Stock each have been granted to Robert Toia and Douglas
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Nichols at an exercise price of $3.50 per share.
EXECUTIVE COMPENSATION
The Company entered into employment agreements with each of Messrs.
Gary O. Marino and John H. Marino effective as of March 1, 1994. Under Gary
Marino's employment arrangement, which provided that he serve as Chief Executive
Officer of the Company, he received a base salary of $150,000 from March 1, 1994
through August 31, 1994, $175,000 from September 1, 1994 through December 31,
1994 and $200,000 per year as of January 1, 1995. Mr. Marino's base salary is
subject to increase in accordance with the Consumer Price Index, as well as any
additional increases in the discretion of the Board of Directors. Commencing
January 1, 1996 and January 1, 1997, Gary Marino's base salary was increased to
$210,000 and $250,000, respectively. Mr. Marino is also entitled to a $642
monthly car allowance, subject to annual increase in accordance with the
Consumer Price Index. Under the arrangement, Gary Marino is entitled to such
benefits (including medical, dental, disability and life insurance) as the
Company typically provided to its senior executive officers. The arrangement
also provides that Mr. Marino receive an annual cash payment in lieu of
participating in a retirement benefits plan.
In addition, Gary Marino's employment arrangement provides that he be
issued an aggregate of 50,000 shares of the Company's Common Stock upon the
execution of a formal employment agreement. All of these shares were issued to
Mr. Marino in July 1995 upon his execution of a written employment agreement.
Pursuant to Mr. Marino's employment agreement, Mr. Marino was also granted
non-qualified options to purchase an aggregate of 350,000 shares of Common Stock
of the Company at varying exercise prices and exercise dates. Options for 87,500
shares of Common Stock at an exercise price of $3.10 and 87,500 shares of Common
Stock at an exercise price of $3.40 were immediately exercisable by Mr. Marino
upon execution of his written employment agreement. Additional options for
87,500 shares of Common Stock became exercisable under the agreement on March 1,
1996 at an exercise price of $3.75 and options for 87,500 shares of Common Stock
became exercisable under the agreement on March 1, 1997 at an exercise price
equal of $4.15 per share. All such options have ten year terms from the date
they become exercisable. The agreement has an initial term expiring on March 1,
1998, and is subject to automatic one year renewal terms, unless either party
notifies the other of non-renewal 180 days prior to the expiration of the
current term. In the event Mr. Marino's employment is terminated without cause
pursuant to a change in control of the Company, Mr. Marino is entitled to
receive as of the date of termination a lump sum equal to 150% of his total
compensation in the 12 months prior to the date of termination. The agreement
contains certain non-competition provisions applicable to Mr. Marino should he
resign from the Company or be terminated with cause.
John Marino's employment agreement provided for him to serve as
President of the Company and its transportation and distribution subsidiaries.
Under this agreement, Mr. Marino received a base salary of $120,000 per year for
March 1, 1994 through August 31, 1994, $135,000 from September 1, 1994 through
December 31, 1994 and $150,000 per year commencing January 1, 1995. Mr. Marino's
base salary is subject to increase in accordance with
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the Consumer Price Index, as well as any additional increases in the discretion
of the Board of Directors. Commencing January 1, 1996 and January 1, 1997, John
Marino's base salary was increased to $154,200 and $158,828, respectively. Mr.
Marino is also entitled to a $642 per month car allowance, subject to annual
increase in accordance with the Consumer Price Index. Under the agreement, John
Marino is entitled to such benefits (including medical, dental, disability and
life insurance) as the Company typically provide for its senior executive
officers. The agreement also provides that Mr. Marino receive annual cash
payments in lieu of participating in a retirement benefits plan. The agreement
has an initial term ending March 1, 1998, and is subject to automatic one year
renewal terms, unless either party notifies the other of non-renewal 180 days
prior to the expiration of the current term. In the event that Mr. Marino's
employment is terminated without cause pursuant to a change in control of the
Company, he is entitled to receive as of the date of termination a lump sum
equal to 150% of his total compensation in the 12 months prior to the date of
termination. The agreement contains certain non-competition provisions
applicable to Mr. Marino should he resign from the Company or be terminated with
cause.
The following table sets forth compensation awarded to the Chief
Executive Officer of the Company and other executive officers (the "Executive
Officers") who, for the fiscal year ended December 31, 1996, received total
salary and bonus payments in excess of $100,000. Except as set forth below, no
executive officer of the Company had a salary and bonus during the year ended
December 31, 1996 that exceeded $100,000 for services rendered in all capacities
to the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Other
Name & Annual Long-Term Compensation
Principal Position Year Salary Bonus Compensation All Other Compensation
- ------------------ ---- ------ ----- ------------ -------------------------
<S> <C> <C> <C> <C> <C>
Gary O. Marino
Chairman 1996 $230,000(1) -- $30,567(2) --
(Chief Executive Officer)
1995 $200,000 $124,034(4) -- --
1994 $169,379 $140,000 -- --
John H. Marino
(Vice Chairman) 1996 $154,200 -- $31,561(3) --
1995 $150,000 $37,650(5) 15,000 --
1994 $137,584 $ 30,000 -- --
Donald D. Redfearn
(Executive Vice President) 1996 $113,750 -- -- --
1995 -- -- -- $ 72,000(6)
1994 -- -- -- $164,986(7)
</TABLE>
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(1) Includes $20,000 payment in lieu of his participation in a retirement
benefits plan.
(2) Includes payment of medical, dental, disability and life insurance benefits
of $20,857, car allowance of $7,710 and group 401(k) plan contributions of
$1,000.
(3) Includes payment of medical, dental, disability and life insurance benefits
of $7,431, car allowance of $7,710 and group 401(k) plan contributions of
$1,000, as well as $15,420 pursuant to a deferred compensation plan.
(4) Includes a bonus of 50,000 shares of the Company's Common Stock granted
pursuant to Mr. Marino's employment agreement, which bonus was valued at $93,750
as of the date of execution of the agreement in July 1995. Also includes a bonus
of $30,284 which was paid to Mr. Marino in 1996 based upon the performance of
the Company for the year ended December 31, 1995.
(5) Represents a bonus paid to Mr. John Marino in 1996 based upon the
performance of the Company and its transportation subsidiaries for the year
ended December 31, 1995.
(6) Represents fees during 1995 for consulting services provided by
Mr. Redfearn and Jenex Financial Corporation ("Jenex"), a Company in which he
was an executive officer and a principal shareholder, for the benefit of the
Company and its subsidiaries. Mr. Redfearn received no compensation as an
officer of the Company in 1995.
(7) Includes $15,036 provided to Mr. Redfearn for directors' and consulting
fees and $70,479 and 40,274 shares of the Company's common stock (valued at
$1.75 per share) received by Jenex in connection with assisting the Company
with finding financing for the acquisition of Kalyn in 1994. Mr. Redfearn
received no compensation as an officer of the Company in 1994.
NONQUALIFIED DEFERRED COMPENSATION TRUST
Effective January 3, 1997, the Company adopted certain nonqualified
deferred compensation plans and established a trust to which the Company will
make contributions under the Plans (the "Trust"). In connection with the
foregoing, the Company executed Nonqualified Deferred Compensation Agreements
(the "Deferred Compensation Agreements") with Gary O. Marino, the Company's
Chairman of the Board, President and Chief Executive Officer, and John Marino,
the Company's Vice Chairman of the Board, pursuant to which such individuals may
defer a percentage of their respective compensation and contribute such amount
to their retirement pay. Any amount of compensation or bonus deferred by the
employee shall be transferred to the Trust and thereafter be invested and
reinvested by trustee and paid to the employee in accordance with the Trust and
the Deferred Compensation Agreement. In addition to each employee's requested
deferral, the Company shall transfer to the Trust for the employee's benefit
each calendar year at least $20,000, which amounts shall be invested and
reinvested by the trustee in accordance with the Trust and the Deferral
Compensation Agreements. In January 1997, the Company contributed an aggregate
of $21,000 to the Trust on behalf of Gary O. Marino which represented amounts
deferred by Mr. Marino under his employment agreement for 1995 and 1996. In
addition, in January 1997, the Company contributed an aggregate of $30,420 to
the Trust on behalf of John H. Marino, which represented amounts deferred by Mr.
Marino under his employment agreement for 1995 and 1996.
Information regarding certain options granted to Executive Officers of
the Company, is set forth below:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS TO EMPLOYEES EXERCISE ($/SH) EXPIRATION
NAME YEAR GRANTED IN FISCAL YEAR PRICE DATE
- ---- ---- ------- -------------- ----- ----
<S> <C> <C> <C> <C> <C>
Gary O. Marino 1996 10,000 3% $3.625 Jan 1, 2006
John H. Marino 1996 50,000 17% $3.625 Jan 1, 2006
Donald D. Redfearn 1996 50,000 17% $5.00 Nov 1, 2006
</TABLE>
1992 STOCK OPTION PLAN
The Company maintains a 1992 Stock Option Plan which provides officers,
employees and consultants of the Company that are not directors of the Company
or 5% stockholders (directly or indirectly) of the Company, with the ability to
receive grants of incentive stock options (as defined in Section 422(b) of the
Internal Revenue Code of 1986, as amended), and provides such individuals and
non-employee directors that are not 5% stockholders with the ability to receive
non-qualified stock options. The 1992 Stock Option Plan was approved by the
Company's stockholders as of July 1, 1992, and became effective as of such date.
The Company has reserved 250,000 shares of Common Stock for the grant of options
under the 1992 Stock Option Plan, all of which have been granted and are
currently outstanding at an exercise price of $3.50 per share.
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BONUS PLAN
In May 1995, the Board of Directors adopted the Corporate Senior
Executive Bonus Plan (the "Bonus Plan") pursuant to which participants in the
Bonus Plan shall receive cash bonuses based upon the annual performance of the
Company and the its subsidiaries, commencing with the 1995 fiscal year. Bonuses
will be paid to designated individuals based on Company's performance on a
consolidated basis, the Company's subsidiaries performance or a combination of
both.
Participants in the Bonus Plan which are subsidiary-specific shall
receive cash bonuses based upon objective, auditable and performance-related
criteria relating to the Company's subsidiaries. No subsidiary-specific
participant will be paid a bonus greater than 50% of the salary earned by that
participant for the full year. Subsidiary-specific participants will be
designated by the Chief Executive Officer subject to ratification by the
Compensation Committee. Bonuses paid to participants for consolidated Company
performance will be paid from a bonus pool equal to 12% of any pre-tax
consolidated income in excess of that amount required to achieve a 12% return on
average shareholders' equity. The initial participants in the Bonus Plan to
receive awards based on consolidated Company performance were Messrs. Gary
Marino, John Marino, Jack Conser, Robert Coward, Larry Bush and Robert
Huddleston. Mr. Donald Redfearn and Mr. Rick Jany have been subsequently added
to the consolidated bonus plan. No participant will be paid a bonus based on
consolidated Company performance greater than the salary earned by that
participant for the full year.
1995 STOCK PLANS
The following plans were approved by the Company's stockholders at the
Company's 1995 Annual Meeting, in July 1995:
1995 STOCK INCENTIVE PLAN. The Board of Directors of the Company has
adopted, effective January 1, 1995, a 1995 Stock Incentive Plan (the "Stock
Incentive Plan"). Pursuant to the Stock Incentive Plan, key personnel of the
Company who have been selected as participants are eligible to receive awards of
various forms of equity-based incentive compensation, including stock options,
stock appreciation rights, stock bonuses, restricted stock awards, performance
units and phantom stock, and awards consisting of combinations of such
incentives. The Stock Incentive Plan is administered by the Compensation
Committee. Subject to the provisions of the Stock Incentive Plan, the
Compensation Committee has sole discretionary authority to interpret the Stock
Incentive Plan and to determine the type of awards to grant, when, if and to
whom awards are granted, the number of shares covered by each award and the
terms and conditions of the award. Options granted under the Stock Incentive
Plan may be "incentive stock options" ("ISOs"), within the meaning of Section
422 of the Code, or nonqualified stock options ("NQSOs"). The exercise price of
the options is determined by the Compensation Committee at the time the options
are granted, subject to a minimum price in the case of ISOs equal to the fair
market value of the Common Stock on the date of grant and a minimum price in the
case of NQSOs of the par value of the Common Stock.
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The Company has reserved 250,000 shares of Common Stock for issuance
under the Stock Incentive Plan. Options to purchase 141,000 and 105,000 shares
of the Company's Common Stock were granted January 1, 1995 and January 1, 1996,
respective under the Stock Incentive Plan. The January 1, 1995 and 1996 options
have exercise prices of $3.50 and $3.625 per share, respectively. Options to
purchase 27,500 shares of Common Stock have been exercised and options to
purchase 9,500 shares of Common Stock have expired due to certain employees
leaving the Company as of March 1, 1997.
1995 EMPLOYEE STOCK PURCHASE PLAN. The Board of Directors of the
Company has adopted, effective January 1, 1995, the 1995 Employee Stock Purchase
Plan (the "Stock Purchase Plan"), under which 250,000 shares of Common Stock are
reserved for issuance. During the first quarter of 1996, the Company implemented
the Stock Purchase Plan. The Stock Purchase Plan, which is designed to qualify
under Section 423 of the Code, is designed to encourage stock ownership by
employees of the Company. Employees of the Company other than members of the
Board of Directors and owners of 5% or more of the Company's Common Stock are
eligible to participate in the Stock Purchase Plan, with certain exceptions, if
they are employed by the Company for at least 20 hours per week and more than
five months per year. No employee is eligible to participate who, after the
grant of options under the Stock Purchase Plan, owns (including all shares which
may be purchased under any outstanding options) 5% or more of the Company's
Common Stock.
On January 1 of each year ("Enrollment Date"), the Company will grant
to each participant an option to purchase on December 31 of each such year
("Exercise Date") at a price determined as described below (the "Purchase
Price") the number of shares of Common Stock which his or her accumulated
payroll deductions on the Exercise Date will purchase at the Purchase Price. The
Purchase Price will be the lesser of (i) a percentage (not less than 85%) of the
fair market value of the Common Stock on the Enrollment Date, or (ii) a
percentage (not less than 85%) of the fair market value of the Common Stock on
the Exercise Date. As soon as practicable after any Exercise Date on which a
purchase of shares occurs, the Company will deliver to each participant, a
certificate representing the shares purchased, upon exercise of his or her
option; however, the Compensation Committee may determine to hold a
participant's certificates until the participant ceases participation in the
Stock Purchase Plan or requests delivery of the certificates.
Common Stock of the Company was issued to employees in January 1997
pursuant to the Stock Purchase Plan in an aggregate amount of 17,908 shares.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange act
of 1934, the Company has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
RAILAMERICA, INC.
By: /s/ Gary O Marino
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Gary O. Marino, Chief Executive Officer
By: /s/ Larry W. Bush
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Larry W. Bush, Controller
(Principal Accounting Officer)
Dated: May 16, 1997
In accordance with the Securities Exchange Act of 1934, this Report has
been signed below by the following persons on behalf of the Company in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Gary O. Marino Chairman, President, Chief Executive May 16, 1997
- ----------------------------- Officer and Director (Principal Financial Officer)
Gary O. Marino
/s/ John H. Marino Vice Chairman/Sr. Transportation Officer May 16, 1997
- ----------------------------- and Director
John H. Marino
/s/ Donald D. Redfearn Executive Vice President, Secretary May 16, 1997
- ----------------------------- and Director
Donald D. Redfearn
/s/ Larry W. Bush Controller May 16, 1997
- -----------------------------
Larry W. Bush
/s/ Douglas R. Nichols Director May 16, 1997
- -----------------------------
Douglas R. Nichols
/s/ Richard Rampell Director May 16, 1997
- -----------------------------
Richard Rampell
/s/ Charles Swinburn Director May 16, 1997
- -----------------------------
Charles Swinburn
/s/ John M. Sullivan Director May 16, 1997
- -----------------------------
John M. Sullivan
/s/ Robert F. Toia Director May 16, 1997
- -----------------------------
Robert F. Toia
</TABLE>
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