<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 1-14116
CONSUMER PORTFOLIO SERVICES, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0459135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 ADA, IRVINE, CALIFORNIA 92618
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (714) 753-6800
Securities registered pursuant to section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Rising Interest Subordinated
Redeemable Securities due 2006 New York Stock Exchange
10.50% Participating Equity
Notes due 2004 New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
Indicate by check mark whether the registrant (1) 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 / /
Indicate by check mark if there is no disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K 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. / /
The aggregate market value on April 28, 1997 (based on the $7.44 average of
closing bid and asked prices on Nasdaq Stock Market on that date) of the voting
stock beneficially held by non-affiliates of the registrant was $71,081,221. The
number of shares of the registrant's Common Stock outstanding on April 28, 1997
was 14,299,442.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Preliminary Note -- This amendment filed April 30, 1997 includes information
required by Part III of this report on Form 10-K. The information required by
Parts I, II and IV has been previously filed, and is not changed by this
amendment.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors of the Company appears below. Information
regarding executive officers appears in Part I of this report, under the heading
"Executive Officers of the Registrant."
Name Age Position
---- --- --------
Charles E. Bradley, Sr. 67 Chairman of the Board of Directors
Charles E. Bradley, Jr. 37 President, Chief Executive Officer, and Director
William B. Roberts 59 Director
John G. Poole 54 Vice Chairman of the Board of Directors
Robert A. Simms 58 Director
Thomas L. Chrystie 63 Director
CHARLES E. BRADLEY, SR. has been the Chairman of the Board of the Company
since its formation in March 1991. Mr. Bradley is one of the founders of
Stanwich Partners, Inc. ("Stanwich"), a Connecticut investment firm which
acquires controlling interests in companies in conjunction with the existing
operating management of such companies, and has been President, a director
and a shareholder of that company since its formation in 1982. He is also
President and director of Reunion Industries, Inc., a publicly held company
which manufactures precision plastic products and provides engineered
plastics services. Mr. Bradley also served as President and a director of
CPS Holdings, Inc., the Company's former parent corporation, from August 1989
until its merger into the Company in December 1995. He currently is a
director of DeVlieg-Bullard, Inc., Chatwins Group, Inc., Texon Energy Corp.,
General Housewares Corp., NAB Asset Corporation (38% of whose outstanding
shares of voting stock are held by the Company), Zydeco Exploration, Inc.,
Sanitas, Inc. and Audits and Surveys Worldwide, all of which are
publicly-held corporations or are required to file periodic reports under
Section 13 or 15(d) of the Securities Exchange Act of 1934. Mr. Bradley is
the father of Charles E. Bradley, Jr.
CHARLES E. BRADLEY, JR. has been the President and a director of the
Company since its formation in March 1991. In January 1992, Mr. Bradley was
appointed Chief Executive Officer of the Company. From March 1991 until
December 1995 he served as Vice President and a director of CPS Holdings,
Inc. From April 1989 to November 1990, he served as Chief Operating Officer
of Barnard and Company, a private investment firm. From September 1987 to
March 1989, Mr. Bradley, Jr. was an associate of The Harding Group, a private
investment banking firm. Mr. Bradley, Jr. is currently serving as a director
of NAB Asset Corporation, Chatwins Group, Inc., Texon Energy Corporation,
Thomas Nix Distributor, Inc., and CARS USA, Inc. Charles E. Bradley, Sr. is
his father.
WILLIAM B. ROBERTS has been a director of the Company since its formation
in March 1991. Since 1981, he has been the President of Monmouth Capital
Corp., an investment firm which specializes in management buyouts. Mr.
Roberts serves on the board of directors of Atlantic City Racing Association,
a publicly-held corporation, which owns and operates a race track.
JOHN G. POOLE has been a director of the Company since November 1993 and
its Vice Chairman since January 1996. He was a co-founder of Stanwich in
1982 and has been a director, vice president and shareholder of that company
since its formation. Mr. Poole is a director of Reunion Industries, Inc.,
Sanitas, Inc., Chatwins Group, Inc., and DeVlieg-Bullard, Inc. Mr. Poole
served as a director and Vice President of CPS Holdings, Inc. from 1993 to
1995.
ROBERT A. SIMMS has been a director of the Company since April 1995. He
has been the Chairman and Chief Executive Officer of Simms Capital
Management, Inc. since 1984. He is also a director of New York Bancorp,
Arrhythmia Research Technology, Inc. and the National Football Foundation and
Hall of Fame. Mr. Simms also serves on the Board of Overseers of Rutgers
University and was formerly a partner in Bear Stearns & Co.
THOMAS L. CHRYSTIE has been a director of the Company since April 1995. He
has been self-employed as an investor since 1988. His previous experience
includes 33 years at Merrill Lynch & Co. in various capacities including
heading Merrill Lynch's investment banking, capital markets and merchant
banking activities. In addition, he served as Merrill Lynch & Co.'s Chief
Financial Officer. He is also a director of Titanium Industries, Eonyx
Corporation and Wyoming Properties.
2
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors, certain officers, and persons holding more than
ten percent of the Company's common stock are required to report, within
certain periods, their initial ownership of and any subsequent transactions
in any of the Company's equity securities. Based solely upon reports
furnished to the Company and written representations and information provided
to the Company by the persons required to make such filings, all such
individuals have satisfied such filing requirements in full, except that
Robert Simms, a director, in October 1996 filed late two reports (each
relating to one transaction); Eugene Warner, then an officer and Richard
Trotter, an officer, each filed late one report (each report relating to one
transaction); and Mark Creatura and James Stock, officers, each filed late
their initial reports. All transactions and holdings of which the
Company has knowledge have now been reported.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth all cash compensation earned during (i) the
fiscal year ended December 31, 1996, (ii) the nine-month period ended
December 31, 1995, and (iii) the fiscal year ended March 30, 1995, by the
Company's Chief Executive Officer and by its four most highly compensated
other executive officers (the "named executive officers") who were serving as
executive officers at December 31, 1996. Information is presented for those
specified periods, rather than for three full years, because the Company in
1995 changed the end of its fiscal year from March 31 to December 31.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Compensation for Long Term
period shown Compensation Awards
- ---------------------------------------------------------------------------------------------------------
Name and Principal Position Period Ended Salary Bonus(1) Options/SARs(2)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHARLES E. BRADLEY, JR. December 1996 381,250 72,500 200,000
Chief Executive Officer December 1995 237,500 217,500 8,400
March 1995 250,000 225,000 150,000
- ---------------------------------------------------------------------------------------------------------
NICHOLAS P. BROCKMAN December 1996 117,039 12,500 12,600
Senior Vice President, Asset Recovery December 1995 80,372 33,750 0
March 1995 99,226 46,636 32,000
- ---------------------------------------------------------------------------------------------------------
WILLIAM L. BRUMMUND, JR. December 1996 117,039 13,500 5,000
Senior Vice President, Systems December 1995 80,372 33,750 7,600
March 1995 99,226 49,612 32,000
- ---------------------------------------------------------------------------------------------------------
JEFFREY P. FRITZ December 1996 154,938 16,250 5,000
Senior Vice President, Finance December 1995 91,903 48,750 7,600
March 1995 104,834 52,416 32,000
- ---------------------------------------------------------------------------------------------------------
CURTIS K. POWELL December 1996 124,500 15,000 75,000
Senior Vice President, Marketing December 1995 81,000 41,250 47,600
March 1995 51,080 10,000 50,000
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Bonus for each period is the bonus paid to date with respect to that
period. Bonus compensation paid in May 1996 was awarded based on performance
in the twelve-month period ended March 1996, and is therefore allocated 25%
to the year ended December 1996 and 75% to the nine-month period ended
December 1995. The Company expects to pay bonus compensation in May 1997
with respect to the nine-month period ended December 1996. The amount of
such compensation cannot be determined as of the date of this report, and is,
accordingly, not reported in this table.
(2) Number of shares that may be purchased upon exercise of options that were
granted in the period shown.
OPTION AND SAR GRANTS
The following table sets forth all options granted to executive officers by
the Company during the year ended December 31, 1996. All such options were
granted under the 1991 Stock Option Plan. No stock appreciation rights (SARs)
were granted by the Company during the year ended December 31, 1996. All
options were for the purchase of shares of the Common Stock.
3
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR - INDIVIDUAL GRANTS
% of Total
Options Granted Exercise Potential Realizable Value
to Employees in or at Assumed Annual Rates
Options Granted Year Ended Base Price Expiration of Stock Price
Name (No. of Shares) December 31, 1996 ($/Share) Date Appreciation for Option Term
5% 10%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles E. Bradley, Jr. 200,000 39.0% $8.875 March 31, 2006 $1,109,340 $2,807,304
- -----------------------------------------------------------------------------------------------------------------------------
Nicholas P. Brockman 12,600 2.5% 8.875 March 31, 2006 69,888 176,860
- -----------------------------------------------------------------------------------------------------------------------------
William L. Brummund, Jr. 5,000 1.0% 8.875 March 31, 2006 27,733 70,183
- -----------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Fritz 5,000 1.0% 8.875 March 31, 2006 27,733 70,183
- -----------------------------------------------------------------------------------------------------------------------------
Curtis K. Powell 75,000 14.6% 8.875 March 31, 2006 416,002 1,052,739
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUE TABLE
The following table sets forth, as of December 31, 1996, the number of
unexercised options held by each executive officer named in the preceding
table, the number of shares subject to then exercisable and unexercisable
options held by such persons and the December 31, 1996 value of all
unexercised options held by such persons. Each option referred to in the
table was granted under the Company's 1991 Stock Option Plan at an option
price per share equal to the fair market value per share on the date of grant.
<TABLE>
<CAPTION>
Number of Number of Unexercised Value of Unexercised
Name Shares Value Options at In-the-Money
Acquired on Realized December 31, 1996 Options at December 31, 1996(1)
Exercise Exercisable/Unexercisable Exercisable/Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles E. Bradley, Jr. 70,000 $677,950 249,040/131,200 $821,805/$755,050
- -----------------------------------------------------------------------------------------------------------------------------
Nicholas P. Brockman 54,000 467,500 18,200/81,400 159,250/533,025
- -----------------------------------------------------------------------------------------------------------------------------
William L. Brummund, Jr. 40,000 265,000 31,200/81,400 273,000/516,875
- -----------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Fritz 20,000 140,000 52,200/81,400 455,000/516,875
- -----------------------------------------------------------------------------------------------------------------------------
Curtis K. Powell 20,000 110,250 9,300/143,300 37,200/470,075
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Valuation is based on the last sales price on December 31, 1996 of $11.25
per share, as reported by Nasdaq.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee of the Board of Directors during the fiscal year
ended December 31, 1996 comprised Thomas L. Chrystie, William B. Roberts and
Robert A. Simms. None of the members of the Compensation Committee are
present or former employees of the Company.
DIRECTOR COMPENSATION
During the year ended December 31, 1996, the Company paid director
compensation of $125,000 to Mr. Bradley, Sr., for his service as Chairman of
the Board of Directors, and $75,000 to Mr. Poole for his service as
Vice-Chairman of the Board of Directors. Mr. Bradley, Jr., President of the
Company, received no additional compensation for his service as a director.
The remaining directors, Messrs. Chrystie, Roberts and Simms, received a
retainer of $1,000 per month and an additional fee of $500 per meeting.
BONUS PLAN
The named executive officers, as well as other officers of the Company,
participate in a management bonus plan pursuant to which such employees are
entitled to earn cash bonuses, if the Company achieves certain net income
levels or goals established by the Board of Directors. The amount of bonus
payable to each officer is determined by the Board of Directors in its
discretion
4
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the number and percentage of shares of the
Company's Common Stock (its only class of voting securities) owned
beneficially as of March 31, 1997 (i) by each person known to the Company to
own beneficially more than 5% of the outstanding Common stock, (ii) by each
director and named executive officer of the Company, and (iii) by all
directors and executive officers of the Company as a group. Except as
otherwise indicated, and subject to applicable community property and similar
laws, each of the persons named has sole voting and investment power with
respect to the shares shown as beneficially owned by such persons. The
address of Messrs. Bradley, Jr., Brockman, Fritz, Brummund and Powell is c/o
Consumer Portfolio Services, Inc., 2 Ada, Irvine, CA 92618.
<TABLE>
<CAPTION>
Amount & Nature of
Name & Address of Beneficial Percent of
Beneficial Owner Ownership (1) Class
----------------- ------------------ ----------
<S> <C> <C>
Charles E. Bradley, Sr. . . . . . . . . . . . . . . . . . . . 2,895,137(2) 19.5%
Stanwich Partners, Inc., 62 Southfield Avenue,
Stamford, CT 06902
William B. Roberts. . . . . . . . . . . . . . . . . . . . . . 1,233,982 8.5%
Monmouth Capital Corp., 126 East 56th Street, 12th Floor
New York, NY 10022
John G. Poole . . . . . . . . . . . . . . . . . . . . . . . . 276,360(3) 2.0%
Stanwich Partners, Inc., 62 Southfield Avenue,
Stamford, CT 06902
Thomas L. Chrystie. . . . . . . . . . . . . . . . . . . . . . 100,000(4) *
P.O. Box 640
Wilson, WY 83014
Robert A. Simms . . . . . . . . . . . . . . . . . . . . . . . 227,144(5) 1.6%
55 Railroad Ave., Plaza Suite
Greenwich, CT 06830
Charles E. Bradley, Jr. . . . . . . . . . . . . . . . . . . . 1,572,920(6) 10.8%
Nicholas P. Brockman. . . . . . . . . . . . . . . . . . . . . 90,600 *
William L. Brummund, Jr.. . . . . . . . . . . . . . . . . . . 89,600 *
Jeffrey P. Fritz. . . . . . . . . . . . . . . . . . . . . . . 90,600 *
Curtis K. Powell. . . . . . . . . . . . . . . . . . . . . . . 19,300 *
All officers and directors as a group (sixteen persons). . . 6,128,969(7) 39.1%
Sun Life Insurance Company of America(8). . . . . . . . . . . 1,013,332 7.1%
One Sun America Center, Los Angeles, CA 90067
Robert T. Gilhuly and Kimball J. Bradley, Trustees. . . . . . 1,058,818(9) 7.4%
c/o Cummings & Lockwood
Two Greenwich Plaza, Box 2505, Greenwich, CT 06830
</TABLE>
- ------------------------
* Less than 1%
(1) Includes the following shares which are not currently outstanding
but which the named individuals have the right to acquire currently or
within 60 days of March 31, 1997 upon exercise of options: Charles E.
Bradley, Sr. - 600,000 shares; William B. Roberts - 200,000 shares;
Thomas L. Chrystie - 30,000 shares; Robert A. Simms - 30,000 shares;
Charles E. Bradley, Jr. -267,640 shares; Jeffrey P. Fritz - 50,600
shares; William L. Brummund, Jr. - 49,600 shares; Nicholas P. Brockman -
36,600 shares; Curtis K. Powell - 19,300 shares; and all directors and
officers as a group (16 persons) - 1,406,666 shares. The shares
described in this note are deemed to be outstanding for the purpose of
computing the percentage of outstanding Common
5
<PAGE>
Stock owned by such persons individually and by the group, but are not
deemed to be outstanding for the purpose of computing the percentage of
ownership of any other person.
(2) Includes 207,490 shares owned by the named person's spouse as to
which he has no voting or investment power; and 600,000 shares that
Mr. Bradley, Jr., has the presently exercisable right to acquire from
Mr. Bradley, Sr.
(3) Includes 2,000 shares held by Mr. Poole as custodian for his
children.
(4) Includes 70,000 shares held by the Thomas L. Chrystie Living Trust.
(5) Includes 16,944 shares owned by Mr. Simms' spouse as to which he has
no voting or investment power.
(6) Includes 211,738 shares held by a trust of which Mr. Bradley is the
beneficiary, as to which he has no voting or investment power. Also
includes, in addition to the 267,640 shares referred to in footnote 1,
600,000 shares that Mr. Bradley, Jr. has the presently exercisable right
to acquire from Mr. Bradley, Sr.
(7) Includes an aggregate of 1,406,666 shares which are not currently
outstanding, but which may be acquired by officers and directors of the
company within 60 days of March 31, 1997.
(8) Information included herein in reliance solely upon a report on
Schedule 13G filed by the named person on March 7, 1996.
(9) These shares are held in trusts of which the beneficiaries are
Charles E. Bradley, Sr.'s adult children, including, among others,
Charles E. Bradley, Jr., (as to 211,738 shares) and Kimball J. Bradley
(as to 211,802 shares).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
From January 1, 1992 through December 31, 1995 the Company retained
Stanwich Partners, Inc. ("Stanwich"), a corporation of which Charles E.
Bradley, Sr. and John G. Poole are principal shareholders, to provide
consulting services for compensation at the rate of $350,000 per year.
Effective January 1, 1996, upon expiration of the prior agreement, the
Company and Stanwich agreed to continue the consulting arrangement for an
additional three-year period, at a reduced rate of compensation of $75,000
per year. The current rate was arrived at by negotiation between Stanwich
and the independent directors of the Company. Such negotiations took into
account the prior rate of compensation, the services performed by Stanwich in
the past, and the expectation that a reduced level of consulting service
would be required as the Company matured. Under both the current and prior
agreements, Stanwich agreed to provide such level of consulting services
relating to strategic business and tax planning and investment analysis as
the Company reasonably may request. No fixed, minimum or maximum number of
hours of service is or was specified.On January 3, 1996, the Company and
Stanwich (an affiliate of the Company) entered into an agreement pursuant to
which Stanwich provides consulting services on a non-exclusive basis for a
three year period ended December 31, 1998 for fee of $75,000 per year.
In January 1997, the Company acquired 80% of the outstanding shares of
the capital stock of Stanwich Leasing, Inc. ("SLI") for an aggregate purchase
price of $100,000. SLI's selling shareholders included Charles E. Bradley,
Sr. and John G. Poole, each of whom is an officer, director and shareholder
of the Company and who received, respectively, $45,000 and $15,000 of the
purchase price. Messrs. Bradley, Sr. and Poole, the founders of SLI,
purchased their SLI shares in 1996 for $450 and $150, respectively. SLI and
its 80% owned subsidiary, PIC Leasing Corp. ("PIC"), are in the business of
leasing equipment and containers to others. At December 31, 1996, SLI and
PIC together had approximately $2.0 million of assets under lease, and a book
value of $37,000. Approximately 6% of the assets under lease were leased to
corporate lessees with which Messrs. Bradley, Sr. and Poole are affiliated.
SLI is indebted in the amount of $500,000 to a company of which Messrs.
Bradley, Sr. and Poole are the indirect majority owners. This debt
constitutes the purchase price for SLI's acquisition of PIC in 1996. The
purchase price for SLI was determined by negotiation between the Company and
SLI's selling shareholders. The transaction was approved by the Company's
disinterested directors, consisting of Messrs. Chrystie, Roberts and Simms.
The remaining 20% of SLI not acquired by the Company is held by Charles E.
Bradley, Jr., who is the President and a director of the Company.The Company
has purchased 80% of the outstanding stock of Stanwich Leasing, Inc. ("SLI")
from Charles E. Bradley, Sr., Chairman of the Board of Directors and a
principal stockholder, and John G. Poole, a director of the Company, for a
purchase price of $100,000. The transaction was considered and approved by
the independent members of the Board of Directors of the Company, namely
Messrs. Chrystie, Roberts and Simms.
The agreements and arrangements described above were not entered into
between parties negotiating or dealing on an arm's length basis, but were
entered into by the Company with the parties who personally benefited from
such transactions and who had a control or fiduciary relationship with the
Company.
6
<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 amendment to Form
10-K report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSUMER PORTFOLIO SERVICES, INC.
(Registrant)
/s/ Jeffrey P. Fritz Date: April 30, 1997
- --------------------
Jeffrey P. Fritz
Senior Vice President and Chief Financial Officer
7
