SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KA
(MARK ONE)
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1996
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/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 33-62684
EVANS SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Texas 74-1613155
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(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
720 Avenue F North, Bay City, Texas 77414
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code: (409) 245-2424
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Securities registered under Section 12(b) of the Exchange Act:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock, $.01 par value NASDAQ- NMS
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Securities registered pursuant to Section 12(g) of the Exchange Act:
None
Indicate by check mark whether the registrant: (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
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/
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of filing. (See definition of affiliate in Rule 405). As of December 24,
1996, the aggregate market value was $7,242,691.
The number of shares of the Registrant's Common Stock outstanding at
December 24, 1996 was 2,888,572, exclusive of treasury shares or shares to be
issued in the 5% stock dividend discussed in Part II, item 5 hereof.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
MANAGEMENT
The executive officers and directors of the Company are as follows:
NAME PRINCIPAL OCCUPATION AGE
- ------------------------ -------------------------------- -------
J.L. Evans, Sr. Chairman of the Board, 57
President and Chief
Executive Officer of the
Company
David L. Deerman Vice Chairman of the Board and 55
President of Chem-Way
Systems
Carl W. Schafer President of the Atlantic 60
Foundation
Charles N. Way Vice President and Chief 54
Financial Officer of the
Company
Darlene E. Jones Treasurer and Administrative 38
Manager for the Company
Maybell H. Evans Secretary for the Company 57
Peter J. Losavio, Jr. Instructor in the College of 47
Business Administration at
Louisiana State University
James B. Grover President of EDCO 44
Environmental Systems
J.L. EVANS, SR. has been a member of the Company's Board of Directors
since August, 1968. Mr. Evans is also the Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Evans founded the Company in 1968
and has served in this capacity since that time. He was born in Flint, Texas, in
1939 and subsequently moved to Woodsboro, Texas, where he graduated from
Woodsboro High School in 1957. Mr. Evans attended San Antonio Community College
where he majored in Business Administration. From 1954 to 1960, Mr. Evans owned
and operated a gasoline service station. From 1960 to 1968, Mr. Evans was
employed by Amoco Oil Company where he held various sales and managerial
positions. In 1985, he was awarded top salesman for the Kansas City Region.
Because the region comprised several states, the honor bestowed upon Mr. Evans
was very prestigious. Additionally, in 1992, Mr. Evans was selected as a
Regional Finalist for the Entrepreneur of the Year Award granted annually by
Ernst & Young and Merrill Lynch.
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<PAGE>
DAVID L. DEERMAN has been a member of the Company's Board of Directors
since December, 1992. Mr. Deerman is also the Vice Chairman of the Board and
President of Chem-Way Systems, a subsidiary of the Company. He has held this
position since 1990. Mr. Deerman joined the Company in 1984 as Vice President of
The Way Energy, Inc. He was born in Bay City, Texas, in 1941. Mr. Deerman
graduated from high school in Angleton, Texas, in 1959. He attended Lamar
University in 1964 where he received a B.B.A. degree in Marketing. He
subsequently attended graduate school where his curriculum included courses in
management. Mr. Deerman was employed by International Harvester Company of
Houston, Texas, from 1964 to 1965 where his responsibilities included sales
promotion. From 1965 to 1978, Mr. Deerman was employed by Gulf Oil Company in
Texas and Oklahoma where he served successively as Analytical Coordinator,
Marketing Supervisor, Product Supply Coordinator, and Operations Manager. He
assisted in the development of Ashley Real Estate and Land Development Company
in Austin, Texas, from 1978 to 1981. Mr. Deerman served as a manager of the
South Hampton Refining Company in Silsbee, Texas, from 1981 to 1984, before
joining the Company.
CARL W. SCHAFER has been a member of the Company's Board of Directors
since December, 1992. Mr. Schafer was born in Chicago, Illinois in 1936 and
obtained his primary and secondary education in Illinois. He received his B.A.
with distinction from the University of Rochester in 1958. He served with the
U.S. Bureau of the Budget as a budget examiner (1961-1964), a legislative
analyst (1964-1966), deputy director of budget preparation (1966-1968), director
of budget preparation (1968-1969), and as staff assistant to the U.S. House of
Representatives Appropriations Committee (1969). He served with Princeton
University as director of the budget (1969-1972), treasurer (1972-1976),
financial vice president, treasurer and chief financial officer (1976-1987). He
served as a principal of Rockefeller and Company, Inc. from 1987 to 1990. He is
currently president of the Atlantic Foundation, Princeton, New Jersey. He served
as co-chairman of the New Jersey Governor's Task Force on improving New Jersey's
Economic and Regulatory Climate from 1982 to 1983 and is currently a trustee or
director of Roadway Express, Inc., Wainoco Oil Corporation, Nutraceutix, Inc.,
Electronic Clearing House, Inc., the Paine Webber and Guardian Groups of Mutual
Funds, Harbor Branch Institution, Inc., the Jewish Guild for the Blind, the
Johnson Atelier and School of Sculpture, and Hidden Lakes Gold Mines, Ltd. He is
a member of the advisory council of Domain Partners and a member of the
International Advisory Council of William Sword and Company, Inc.
CHARLES N. WAY has been a member of the Company's Board of Directors
since March, 1982. Mr. Way is also the Vice President and Chief Financial
Officer of the Company. He has served in this capacity since 1980. Mr. Way
joined the Company in June of 1979. He was born in Houston, Texas, in 1942 and
graduated from Jessie H. Jones High School in 1961. He received a B.B.A. degree
in Accounting from Texas A&M University in 1966. He was employed with Texaco,
Inc. From 1966 to 1968 where he served as an accountant. From 1968 to 1973, Mr.
Way served as an Accounting Division Manager with Tenneco Oil Company. From 1973
to 1976, he was employed as a Controller with News, Inc. And Subsidiaries. From
1976 to 1979, Mr. Way owned and operated All-Ways Automotive Tire Service in
Houston, Texas.
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<PAGE>
DARLENE E. JONES has been a member of the Company's Board of Directors
since December, 1992. Ms. Jones is also the Treasurer and serves as the
Administrative Manager for the Company. She has held these positions since 1993.
Ms. Jones was born in San Antonio, Texas, in 1958, and graduated from Bay City
High School in 1976. She then attended and graduated in 1980 from Southwestern
University where she received a B.S. degree in Biology/Chemistry. Subsequently,
Ms. Jones completed course work involving computer systems technology. She
joined the company in 1980.
MAYBELL H. EVANS has been a member of the Company's Board of Directors
since August, 1968. Ms. Evans has been also served as the Company's Secretary
since its inception. Ms. Evans was born in Holliday, Texas in 1939 and graduated
from Sweeny High School, Sweeny, Texas in 1957. She joined the Company full time
in 1968 managing accounts receivable, collections, and corporate affairs.
PETER J. LOSAVIO, JR. has been a member of the Company's Board of
Directors since May, 1993. Mr. Losavio was born in Baton Rouge, Louisiana in
1949 and graduated from Baton Rouge High School in 1967. He received his B.S.
degree from Tulane University in 1970, majoring in chemistry, and a masters
degree in chemistry from Tulane University in New Orleans in 1973. He graduated
from Louisiana State University Law School in Baton Rouge, Louisiana in 1975 and
received a masters of laws in taxation from the University of Florida in 1976.
Mr. Losavio is a Board Certified Tax Attorney. He became a licensed and
certified public accountant in Louisiana in 1979. He completed the certified
financial planning program offered by the College for Financial Planning in
Denver, Colorado in 1987. From 1980 to present, Mr. Losavio has been an
instructor in the College of Business Administration at Louisiana State
University, teaching corporate tax, partnership taxation, Sub S, estate
planning, and tax practices and procedures. Mr. Losavio has been a co-author and
lecturer for various continuing education programs sponsored by the Society of
Louisiana Certified Public Accountants and National Business Institute. He was a
speaker at the 1990 Louisiana Advanced Tax Workshop. From 1990 to present, he
has been a member of the Ad Hoc Advisory Committee to the Commissioner of
Securities for the State of Louisiana. From 1980 to present, he has been an
assistant bar examiner. In 1980, he was Chairman of the Tax Committee for the
Society of Louisiana Certified Public Accountants.
JAMES B. GROVER has been a member of the Company's Board of Directors
since December, 1992. Mr. Grover is also the President of EDCO Environmental
Systems. He founded EDCO, Inc. In 1979, to engage in the distribution of refined
petroleum products. In 1983, EDCO became a partially-owned subsidiary of the
Company. In 1989, Mr. Grover organized EDCO Environmental Services, Inc., a
division of EDCO, and began serving as the corporation's President. In 1992,
EDCO Environmental Services, Inc. became a wholly-owned subsidiary of the
Company. It was at this time that Mr. Grover began serving the Company in the
capacity of President of EDCO Environmental Systems. Mr. Grover was born in Bay
City, Texas, in 1952, and graduated from Bay City High School in 1970. He
received a B.B.A. degree in Accounting from Texas A&M University in 1974. He
served as Second
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<PAGE>
Lieutenant at Fort Benjamin Harrison, Indiana, and received advanced training in
the United States Army Finance Officers' Basic Course in 1974. He received a
master's degree in Real Estate Economics from Texas A&M University in 1975 and
served as a graduate research assistant until 1976. After attending Texas A&M
University, Mr. Grover engaged in real estate development activities before
forming EDCO, Inc.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
annual and long-term compensation paid by the Company for services in all
capacities to the Company of (i) the Chief Executive Officer, and (ii) the other
four most highly compensated executive officers of the Company at September 30,
1996 who received compensation of at least $100,000 during Fiscal 1996
(collectively, the "Named Officers") for the fiscal years ended September 30,
1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------- ------------------------
OTHER ANNUAL RESTRICTED
NAME AND COMPENSATION STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS ($) OPTIONS(#) COMPENSATION(2)
------------------ ---- --------- -------- ------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr.
Chairman of the Board, President and 1996 $122,252 $ 37,934 $ -- -- -- (2)(3)
Chief Executive Officer........ 1995 120,000 5,381 240 -- -- (2)(3)
1994 120,000 69,112 1,423 -- -- (2)(3)
David L. Deerman
President, Chem-Way Systems and 1996 $121,171 $106,553 $ -- -- 12,000 --
Director....................... 1994 121,171 28,483 278 -- -- --
1993 121,171 9,082 1,395 -- -- --
James B. Grover
President, EDCO Environmental and 1996 $120,000 $ -- $ -- -- -- --
Director....................... 1995 124,372 91 233 -- -- --
1994 115,269 7,527 919 -- -- --
William R. Sherman
Vice President, 1996 $ 72,100 $ 40,728 $ -- -- 1,500 --
Chem-Way Systems............... 1995 72,100 11,089 -- -- -- --
1994 -- -- -- -- -- --
</TABLE>
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(1) ALTHOUGH THE OFFICERS RECEIVE CERTAIN PERQUISITES, THE VALUE OF SUCH
PERQUISITES DID NOT EXCEED FOR ANY OFFICER THE LESSER OF $50,000 OR 10%
OF THE OFFICER'S SALARY AND BONUS.
(2) IN ADDITION TO THE COMPENSATION FOR MR. EVANS SET FORTH ABOVE, HE ALSO
RECEIVES LEASE INCOME FOR THE RENTAL OF VARIOUS PROPERTIES USED BY THE
COMPANY.
(3) THE COMPANY OWNS TWO SPLIT DOLLAR LIFE INSURANCE POLICIES WHEREBY IT
PAYS THE PREMIUMS AND MR. J.L. EVANS' ESTATE WILL RECEIVE THE DEATH
BENEFIT LESS THE ACCUMULATED CASH VALUE, WHICH WOULD RETURN TO THE
COMPANY.
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<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning
Options/SARs granted during Fiscal 1996 to the Named Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE OF ASSUMED
ANNUAL RATES OF
SHARES % OF TOTAL EXERCISE STOCK PRICE
UNDERLYING GRANTED TO OR BASE APPRECIATION FOR
OPTIONS/SARS EMPLOYEES PRICE EXPIRATION OPTION TERM(2)
NAME GRANTED (#) IN FISCAL YEAR ($/SHARE)(1) DATE 5% ($) 10% ($)
- ---- ----------- -------------- ------------ ---- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr........... 20,000 20.0 6.26 9/30/01 26,981 58,105
David L. Deerman............... 18,000 18.0 5.69 9/30/01 22,072 47,533
James B. Grover................ 12,000 12.0 5.69 9/30/01 14,715 31,688
William R. Sherman............. 1,500 1.5 5.69 9/30/01 1,839 3,961
</TABLE>
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(1) The exercise price of the options granted is equal to the market value
of the Company's Common Stock on the date of grant.
(2) Potential realizable value of each grant assumes that the market prices
of the underlying security appreciates at annualized rates of 5% and
10% over the term of the award. Actual gains, if any, on stock option
exercises are dependent on the future performance of common stock.
There can be no assurance that the amounts reflected on this table will
be achieved.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth all stock options exercised by the Named
Officers during the Fiscal 1996 and the number and value of unexercised options
held by such executive officers at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS AT OPTIONS AT
ACQUIRED ON REALIZED FISCAL YEAR-END FISCAL YEAR-END($)(2)
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr....... -0- -0- -0- 20,000 -0- -0-
David L. Deerman........... -0- -0- 24,000 18,000 -0- -0-
James B. Grover............ -0- -0- -0- 12,000 -0- -0-
William R. Sherman......... -0- -0- 1,500 -0- -0- -0-
</TABLE>
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1. Value realized is calculated based on the difference between the option
exercise price and the closing market price of the Company's Common
Stock on the date of exercise multiplied by the number of shares to
which the exercise relates.
2. Value of unexercised in-the-money options is calculated based on the
difference between the option exercise price and the closing price of
the Company's Common Stock at fiscal year end, multiplied by the number
of shares underlying the options. The closing price of the Company's
Common Stock as reported on the NASDAQ Stock market on September 30,
1996 was $5.95.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with Mr. Evans,
Sr. pursuant to which he is employed as the Company's President and Chief
Executive Officer. The agreement
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<PAGE>
commenced on April 1, 1993 and expires on September 30, 1998, unless it's
terminated earlier in accordance with the agreement. Pursuant to the agreement,
Mr. Evans receives an annual base salary of $120,000 and is entitled to receive
an annual bonus in an amount equal to 7-1/2% of the net profits of the Company,
subject to the limitation set forth below. In addition, the agreement contains a
confidentiality provision and prohibits Mr. Evans from competing with the
Company's business during the term thereof.
The Company has entered into two separate employment agreements with
Mr. Deerman pursuant to which he is employed full-time as (i) the Vice-President
of Marketing, Terminal Operations and Sales of the Company's subsidiary, The Way
Energy, Inc., and (ii) the President of the Company's subsidiary, Chem-Way,
Inc., respectively. The agreements each commenced on October 1, 1992 and expire
on September 30, 1997, unless they are terminated earlier in accordance with
their respective terms. Pursuant to the agreements, Mr. Deerman will receive an
annual base salary aggregating $120,000. Mr. Deerman is also entitled to receive
bonuses to be computed at the end of each fiscal year in an amount equal to 10%
of the net profits of the terminal operations of The Way Energy, Inc. and 8% of
the net profits of Chem-Way, Inc., subject to the limitation set forth below. In
addition, the agreements each contain a confidentiality provision and prohibit
Mr. Deerman from competing with the respective businesses of The Way Energy,
Inc. and Chem-Way, Inc. during the term thereof and for a period of three years
thereafter.
The Company has entered into two separate employment agreements with
Mr. Grover pursuant to which he is employed full-time as (i) the President and
General Manager of the Company's subsidiary, EDCO Environmental Systems, Inc.,
and (ii) President and General Manager of the Company's subsidiary, EDCO, Inc.
The agreements each commenced on January 1, 1993 and expire on December 31,
1997, unless they are terminated earlier in accordance with their respective
terms. Pursuant to the agreements, Mr. Grover will receive an annual base salary
aggregating $119,000. Mr. Grover is also entitled to receive bonuses to be
computed at the end of each fiscal year in an amount equal to 10% of the net
profits of EDCO Environmental Systems, Inc. and 10% of the net profits of EDCO,
Inc., subject to the limitation set forth below. In addition, The agreements
each contain a confidentiality provision and prohibit Mr. Grover from competing
with the respective businesses of EDCO Environmental Systems, Inc. and EDCO,
Inc. during the term thereof and for a period of three years thereafter.
An addendum to the employment agreements for Messrs. Evans, Sr.,
Deerman and Grover dated June 8, 1993, limits the total bonuses received by such
individuals from the Company or its subsidiaries to a maximum of 12% of the
Company's consolidated after tax net earnings.
The Company has entered into an employment agreement with Mr. Sherman
pursuant to which he is employed as the National Sales Manager of the Company's
subsidiary, Chem-Way Systems, Inc. The agreement commenced on December 5, 1994
and expires on December 4, 1997, unless it's terminated earlier in accordance
with the agreement. Pursuant to the agreement, Mr. Sherman receives an annual
base salary of $72,000 and is entitled to receive an annual bonus in an amount
equal to 3% of the net profits of Chem-Way Systems, Inc. In addition, the
agreement contains a confidentiality provision and prohibits Mr. Sherman from
competing with the Company's business during the term thereof.
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1996, Charles N. Way served on the Compensation Committee
of the Board of Directors. Mr. Way also serves as the Vice President of Finance
and the Chief Financial Officer of the Company. Mr. Way participated in all
decisions made by the Compensation Committee not related to his personal
compensation and incentives.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock, as of December 31, 1996, by (i) each person who is known
by the Company to be the beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's directors and nominees for director,
(iii) each executive officer named in the Summary Compensation Table; and (iv)
all current directors and executive officers of the Company as a group. Unless
otherwise indicated, the address of each person or entity listed below is the
Company's principal executive offices.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Ownership(2) Class(3)
NAME AND ADDRESS(1) -------------------- ---------------------
-------------------
<S> <C> <C>
J.L. Evans Systems, Ltd., a Texas Limited Partnership ............... 1,417,500(4) 45.6
J.L. Evans, Sr....................................................... 1,498,747(5) 48.2
Maybell H. Evans..................................................... 1,484,993(6) 47.8
Charles N. Way....................................................... 51,477(7) 1.6
Darlene E. Jones..................................................... 37,136(8) 1.1
J.L. Evans, Jr....................................................... 17,174(9) *
David L. Deerman..................................................... 38,173(10) 1.2
Carl W. Schafer...................................................... 15,000(11) *
c/o The Atlantic Foundation
16 Faber Road
Princeton, NJ 08540
Peter J. Losavio, Jr................................................. 7,500(11) *
8414 Bluebonnett Blvd., Suite 110
Baton Roughe, LA 70810
James B. Grover..................................................... 14,434(12) *
William R. Sherman................................................... 1,500(13) *
All executive officers and Directors as a group (12
persons)............................................................. 1,748,634 56.2
</TABLE>
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<PAGE>
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* less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
the Company, P.O. Box 2480, Bay City, Texas 77404-2480.
(2) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Exchange Act ("Rule 13d-3") and unless otherwise indicated,
represents shares of which the beneficial owner has sole voting and
investment power.
(3) The percentage of class is calculated in accordance with Rule 13d-3 and
assumes that the beneficial owner has exercised any options or other
rights to subscribe which are exercisable within sixty (60) days and
that no other options or rights to subscribe have been exercised by
anyone else.
(4) The general partner is J.L. Evans Management, Inc. (controlled by J.L.
Evans, Sr. and Maybell H. Evans) and the limited partners are Jerriel
L. Evans, Sr., Maybell H. Evans, and their children, Darlene E. Jones,
Jerriel L. Evans, Jr., and Terry W. Evans.
(5) Includes 1,417,500 shares held by J.L. Evans Systems, Ltd., of which
Mr. Evans claims beneficial ownership.
(6) Includes 1,417,500 shares held by J.L. Evans Systems, Ltd., of which
Ms. Evans claims beneficial ownership.
(7) Includes 45,000 shares issuable to Mr. Way upon the exercise of
warrants.
(8) Includes 35,000 shares issuable to Ms. Jones upon the exercise of
warrants.
(9) Includes 14,000 shares issuable to Mr. Evans, Jr. upon the exercise of
warrants.
(10) Includes 34,000 shares issuable to Mr. Deerman upon the exercise of
options.
(11) Includes 7,500 shares issuable to each of Messrs. Schafer and Losavio
upon the exercise of options.
(12) Mr. Grover has pledged 13,567 shares to a subsidiary of the Company to
secure repayment of a note receivable in the approximate amount of
$111,000.
(13) Includes 1,500 shares issuable to Mr. Sherman upon the exercise of
options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases three convenience store locations from the majority
shareholder of the Company. One ten-year lease commenced in June 1987 with
monthly lease payments of $2,500 and allows for one five-year automatic renewal
at the Company's option. The other two leases are for terms of five years and
commenced in April 1990. Each provides for a monthly lease payment of $1,800
with one automatic five-year renewal at the Company's option. The amounts paid
under these leases for Fiscal 1996 was $73,000. Future minimum lease commitments
as of September 30, 1996 are $324,000.
As of September 30, 1996, the Company rents, on a month-to-month basis,
six convenience store locations and an office facility from the majority
shareholder. Previously, the Company rented additional locations which were sold
by the shareholder to unrelated parties. The total month-to-month rents paid for
Fiscal 1996 was $104,000. If all locations continue to be rented under similar
terms for the fiscal year ending September 30, 1997, the Company would pay
approximately $104,000.
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<PAGE>
Other current assets include a note receivable from a director which
was refinanced from an earlier note and is due in quarterly installments. 13,567
shares of the Company's common stock are pledged to secure repayment. The
balance of the note receivable was approximately $116,000 at September 30, 1996.
Interest accrues at 8.5%.
From time to time, the Company makes advances to individuals who are
shareholders, directors, officers and/or employees. Such advances are usually
unsecured and accrue interest at 9%. There were no advances outstanding at
September 30, 1996.
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.
Dated: January 30, 1997
EVANS SYSTEMS, INC.
By: /S/ CHARLES N. WAY
-------------------------------
Name: Charles N. Way
itle: Vice President and
Chief Financial Officer
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