SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(MARK ONE)
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
/X/ ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended SEPTEMBER 30, 1998
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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 000-21956
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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 of (I.R.S. employer identification no.)
incorporation or organization)
720 Avenue F North, Bay City, Texas 77404-2480
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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: None.
Securities registered pursuant to Section 12(g) 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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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]
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The aggregate market value of the Registrant's Common Stock held by
non-affiliates at January 12, 1999 was approximately $26,800,000. For purposes
of computing such market value, the Registrant has deemed as affiliates only
executive officers, directors and their affiliates.
<PAGE>
The total number of shares of the Registrant's Common Stock
outstanding at January 12, 1999 was 3,545,709, exclusive of treasury shares or
shares held by subsidiaries of the registrant.
Documents incorporated by reference: None.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this "Amendment") is being
filed in order to amend the Registrant's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on January 13, 1999 to include the
information required to be disclosed in Part III thereof.
Part III of this Annual Report is hereby amended in its entirety to
add the following information:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to
the current directors and executive officers of the Company.
NAME POSITION AGE
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Jerriel L. Evans, Sr. Chairman of the Board, President and Chief 59
Executive Officer
Peter J. Losavio, Jr. Vice Chairman of the Board 57
Maybell H. Evans Director and Secretary 59
Darlene E. Jones Director, Treasurer and Administrative Manager 40
Charles N. Way Director, Vice President and Controller 56
Richard A. Goeggel Director , Vice President and Chief Financial
Officer 47
Julie H. Edwards Director 40
Carl W. Schafer Director 62
Richard B. Dix Executive Vice President 30
Jerry L. Evans, Jr. Vice President of Corporate Relations
and Human Resources 33
The principal occupation of each director and executive officer for
at least the last five years is set forth below:
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<PAGE>
JERRIEL L. EVANS, SR. has been a member of the Company's Board of
Directors since August 1968. Mr. Evans founded the Company in 1968 and has
served as its Chairman of the Board, President and Chief Executive Officer since
that time. Mr. Evans 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.
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 Bachelor of
Science degree in chemistry from Tulane University in 1970, and his Masters
degree in chemistry from Tulane University in 1973. He graduated from Louisiana
State University Law School in Baton Rouge, Louisiana in 1975 and received a
masters of law in taxation from the University of Florida in 1976. Mr. Losavio
is a Board Certified Tax Attorney. He became a licensed and certified accountant
in Louisiana in 1979. He completed the certified financial planning program
offered by the College for Financial Planning in Denver, Colorado in 1987. Since
1967, Mr. Lasavio has had a private law practice in Baton Rouge, Louisiana. 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 as assistant bar examiner. In 1980, he was Chairman
of the Tax Committee for the Society of Louisiana Certified Public Accountants.
MAYBELL H. EVANS has been a member of the Company's Board of
Directors since August 1968. Ms. Evans has 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.
DARLENE E. JONES has been a member of the Company's Board of
Directors since December 1992. Ms. Jones is also 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 Bachelor of Science degree in Biology/Chemistry.
Subsequently, Ms. Jones completed course work involving computer systems
technology. She joined the Company in 1980.
CHARLES WAY has been a member of the Company's Board of Directors
since March 1982. Mr. Way also serves as the Vice President and Controller of
the Company. He has held these positions since June 1980 and June 1998,
respectively. Mr. Way previously served as the Company's Chief Financial Officer
from June 1980 until June 1998. 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.
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<PAGE>
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.
RICHARD A. GOEGGEL has been a member of the Company's Board of
Directors since December 1998. Mr. Goeggel was born in St. Louis, Missouri in
1951, and earned his A. B. degree in Economics and M.B.A. in Finance &
Accounting from Cornell University in 1974 and 1976 respectively. Until 1997,
Mr. Goeggel was employed as Vice President and CFO of Truck Accessories Group,
Inc. From 1995 to 1996 he served as financial advisor to the Board of Directors
of Stanley Stores, Inc.; and from 1989 to 1995 he was employed with AppleTree
Markets, Inc. as Vice President, treasurer and director. Mr. Goeggel joined the
Company in January 1998 as financial advisor and was hired as Vice President and
Chief Financial Officer in June 1998.
JULIE H. EDWARDS has been a member of the Company's Board of
Directors since December 1997. Ms. Edwards was born in Charleston, West Virginia
in 1959 and earned her Bachelor of Science degree in geology and geophysics from
Yale University in 1980. Ms. Edwards earned her Masters degree in Business
Administration/Finance from Wharton Graduate School in 1985. Ms. Edwards was
employed with Smith Barney, Harris Upham & Co. from 1984 to 1991 and served as
Vice President of Corporate Finance with Smith Barney, Harris Upham & Co., from
1988 to 1991. Since 1991, Mrs. Edwards has been employed with Frontier Oil
Corporation as Senior Vice President of Finance and Chief Financial Officer.
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
Bachelor of Arts 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 Representative 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., Frontier Oil
Corporation, Nutraceutix, Inc., Electronic Clearing House, Inc., Base Ten
Systems, Inc., the Paine Webber and Guardian Groups of Mutual Funds, Harbor
Branch Institution, Inc., and the Johnson Atelier School of Sculpture. He is a
member of the International Advisory Council of William Sword and Company, Inc.
RICHARD B. DIX joined the Company as Executive Vice President in
April 1998. Mr. Dix was born in Corpus Christi, Texas in 1968. He graduated from
Baylor University with a B.B.A. in 1990 with a focus on Entrepreneurship and
International Business. Prior to joining the Company, Mr. Dix served four years
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<PAGE>
as owner and Chief Executive Officer of Do-Rags, Inc., a recreational head-wear
manufacturer, which was sold in 1995. Since 1995, he has been actively involved
as a private consultant to several companies.
JERRY L. EVANS, JR. has been with the Company for over fifteen
years, having started with the Company as a Store Associate in 1983. Mr. Evans
graduated from Bay City High School in 1983 and attended both Wharton Junior
college and Southwest Texas State, where he focused on Communications and
Political Science. Mr. Evans served as Vice President of Investor Relations from
1993 to 1998 when he was appointed Vice President of Corporate and Investor
Relations and Human Resources in April 1998. Mr. Evans is active on several
organization and community committees having served as Chairman of the Matagorda
County Republican Party, City Councilman for Bay City, Chairman of the Home Rule
Charter Commission and the Board of Directors of the Texas Petroleum Marketers
and Convenience Store Association.
There are no family relationships between any directors and
executive officers of the Company except that Jerriel L. Evans, Sr. and Maybell
H. Evans are husband and wife and Jerry L. Evans, Jr. and Darlene E. Jones are
their son and daughter, respectively.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended September 30, 1998 ("Fiscal 1998"), the
Company's Board of Directors formally met on nine occasions. Each of the
directors attended (or participated by telephone) more than 75% of such meetings
of the Board of Directors and committees on which he served during Fiscal 1998.
The Board of Directors has no committees other than the Compensation Committee
and the Audit Committee.
The Company's Compensation Committee, which is comprised of Peter J.
Losavio (Chairman), Carl W. Schafer and Julie H. Edwards, reviews and approves
the compensation of the Company's executive officers and administers and
interprets the Company's stock option plans. The Compensation Committee met or
took action on two occasions during Fiscal 1998.
The Company's Audit Committee, which is comprised of Carl W. Schafer
(Chairman), Peter J. Losavio and Julie H. Edwards recommends the Company's
independent auditors, reviews the scope of their engagement, consults with the
auditors, reviews the results of their examination, acts as liaison between the
Board of Directors and the auditors and reviews various Company policies,
including those relating to accounting and internal controls. The Audit
Committee met or took action on three occasions during Fiscal 1998.
COMPENSATION OF DIRECTORS
During Fiscal 1998, each director, who is not an employee of the
Company, received $1,500 for each Board of Directors' meeting attended, or $500
for each committee meeting attended, which was held on a day other than a Board
of Director's meeting day. The Company also pays its non-employee directors a
monthly retainer fee of $500. Employees of the Company receive no additional
compensation for service as a director. All directors are reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
the Company.
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<PAGE>
On December 19, 1997, directors Edwards, Schafer and Losavio, were
each granted options to purchase 7,500 shares of Common Stock at an exercise
price of $1.625 per share under the ESI Stock Benefit Plan of 1995.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended September
30, 1998, 1997, and 1996, certain summary information concerning annual and
long-term compensation paid by the Company for services in all capacities to the
Company of the Chief Executive Officer, and the other most highly compensated
executive officers of the Company at September 30, 1998 who received
compensation of at least $100,000 during the Fiscal 1998 (collectively, the
"Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
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Other Annual Restricted
Name and Compensation Stock All Other
Principal Position Year Salary($) Bonus($) ($)(1) Awards($) Options(#) Compensation
------------------ ---- --------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr.
Chairman of the Board, 1998 125,093 -0- --- --- 91,500 (2)(3)
President and 1997 125,093 -0- --- 1,210 --- (2)(3)
Chief Executive Officer 1996 122,252 37,934 240 292 --- (2)(3)
Richard A. Goeggel (4)
Vice-President and 1998 85,000 -0- --- --- 50,000 ---
Chief Financial Officer 1997 -0- -0- --- --- --- ---
1996 -0- -0- --- --- --- ---
Richard B. Dix (5)
Executive Vice-President 1998 75,789 -0- --- --- 35,000 ---
1997 -0- -0- --- --- --- ---
1996 -0- -0- --- --- --- ---
</TABLE>
(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. Evans' estate will receive the death benefit less the
accumulated cash value, which would return to the Company. Yearly premiums
for Mr. Evans' life insurance policy were $2,580 for 1998, $2,580 for
1997, and $2,580 for 1996.
(4) Mr. Goeggel's employment with the Company (including time spent as a
consultant) began in January 1998.
(5) Mr. Dix's employment with the Company began in April 1998.
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<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning
Options/SARs granted during Fiscal 1998 to the Named Officers:
<TABLE>
<CAPTION>
Potential Realizable Value of Assumed
Annual Rates of Stock Price
Appreciation for Option Term(2)
Shares % of Total
Underlying Granted to
Options/SARs Employees Exercise or Base Expiration
Name Granted(#) In Fiscal 1998 ($/Share)(1) Date 5%($) 10%($)
---- ---------- -------------- ------------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr. 91,500 22.6% 1.4425 12/19/07 214,996 342,244
Richard B. Dix 35,000 8.6% 1.250 04/16/03 55,839 70,459
Richard A. Goeggel 50,000 12.3% 3.500 04/16/03 223,349 281,839
</TABLE>
(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 Fiscal 1998 and the number and value of unexercised
options held by such executive officers at Fiscal Year-End.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-money
Options at Options at
Fiscal Year-End Fiscal Year-End($)(2)
-------------------------------------- ----------------------------
NAME Shares Value EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Acquired on Realized
EXERCISE(#) ($)(1)
<S> <C> <C> <C> <C> <C> <C>
Jerriel L. Evans, Sr. -0- -0- -0- 91,500 -0- $394,136
Richard B. Dix -0- -0- -0- 35,000 -0- $157,500
Richard A. Goeggel -0- -0- -0- 50,000 -0- $112,500
</TABLE>
(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, 1998 was $5.75.
EMPLOYMENT AGREEMENTS
Jerriel L. Evans, Sr. and the Company entered into an employment
agreement, dated April 6, 1998, for Mr. Evans to serve as President and Chief
Executive Officer of the Company through September 30, 2001. The agreement
provides for an annual base salary of $120,000 during the first year of its
term, $140,000 during the second year of its term, $150,000 during the third
year of its term and for annual increases in each of the remaining years to be
determined by the Board of Directors. The agreement also
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<PAGE>
provides for an annual bonus in an amount equal to 7 1/2% of the net
consolidated after-tax profits of the Company. The agreement provides that
certain options granted to Mr. Evans will vest upon a change of control of the
Company. During the term of his employment with the Company, Mr. Evans is also
entitled to (i) participation in all other benefit plans provided by the Company
to its executives, (ii) four weeks paid vacation per year, (iii) term life
insurance policies in the aggregate face amount of $2,000,000, and (iv) a $500
per month non-accountable car allowance. The agreement also restricts Mr. Evans
from competing with the Company or soliciting customers or other business for
any entity other than the Company during the term of the agreement and from
disclosing certain confidential information with respect to the Company.
Richard B. Dix and the Company entered into an employment agreement,
dated June 22, 1998, for Mr. Dix to serve as Executive Vice-President of the
Company through April 15, 2000. The agreement provides for an annual base salary
of $108,000 during the first year of its term and for annual increases in each
of the remaining years to be determined by the Board of Directors. The agreement
provides that certain options granted to Mr. Dix will vest upon a change of
control of the Company. During the term of his employment with the Company, Mr.
Dix is also entitled to (i) participation in all other benefit plans provided by
the Company to its executives, and (ii) two weeks paid vacation per year. Upon a
change of control of the Company that results in Mr. Dix's removal as Executive
Vice-President a significant change in the conditions of his employment or other
breach of the agreement, Mr. Dix has the right to elect to deem his employment
to have been terminated by the Company and receive a lump sum payment equal to
the remaining term of the agreement (which amount shall be reduced such that all
payments will be deductible to the Company and not subject to the excise tax
imposed by the United States Internal Revenue Code of 1986, as amended). Except
as expressly permitted in the agreement, Mr. Dix is also restricted from
competing with the Company or soliciting customers or other business for any
entity other than the Company during the term of the agreement and from
disclosing certain confidential information with respect to the Company.
Richard A. Goeggel and the Company entered into an employment
agreement, dated June 22, 1998, for Mr. Goeggel to serve as Vice President and
Chief Financial Officer of the Company through June 15, 2000. The agreement
provides for an annual base salary of $120,000 during the first year of its term
and for annual increases in each of the remaining years to be determined by the
Board of Directors. The agreement provides that certain options granted to Mr.
Goeggel will vest upon a change of control of the Company. During the term of
his employment with the Company, Mr. Goeggel is also entitled to (i)
participation in all other benefit plans provided by the Company to its
executives, and (ii) two weeks paid vacation per year. Upon a change of control
of the Company that results in Mr. Goeggel's removal as Vice-President or Chief
Financial Officer, a significant change in the conditions of his employment or
other breach of the agreement, Mr. Goeggel has the right to elect to deem his
employment to have been terminated by the Company and receive a lump sum payment
equal to the remaining term of the agreement (which amount shall be reduced such
that all payments will be deductible to the Company and not subject to the
excise tax imposed by the United States Internal Revenue Code of 1986, as
amended). Except as expressly permitted in the agreement, Mr. Goeggel is also
restricted from competing with the Company or soliciting customers or other
business for any entity other than the Company during the term of the agreement
and from disclosing certain confidential information with respect to the
Company.
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<PAGE>
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, 1998, 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, (iii) each executive
officer, and (iv) all current directors and executive officers of the Company as
a group.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Name and Address(1) Ownership(2) Class(3)
------------------- ------------ --------
<S> <C> <C>
J. L. Evans Systems, Ltd., a Texas Limited Partnership 1,351,200(4) 33.6%
J. L. Evans, Sr. 1,500,162(5) 37.3%
Maybell H. Evans 1,429,715(6) 35.6%
Charles N. Way 39,650(7) *
Richard B. Dix 1,000 *
Richard A. Goeggel 0 0
Darlene E. Jones 65,750(8) 1.6%
J. L. Evans, Jr. 45,869(9) 1.1%
Carl W. Schafer 27,875(10) *
c/o The Atlantic Foundation
66 Witherspoon Road
Princeton, NJ 08542
Peter J. Losavio, Jr. 20,000(10) *
8414 Bluebonnet Blvd., Suite 110
Baton Rouge, LA 70810
Julie H. Edwards 7,500(11)
c/o Frontier Oil Corporation
10000 Memorial Drive, Suite 600
Houston, TX 77024
All executive officers and directors as a group (10 persons) 1,786,321 44.4%
</TABLE>
* less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
the Company, Post Office 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.
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<PAGE>
(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 execrable 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 . Evans, Sr., Maybell H. Evans, and their children, Darlene E.
Jones, Jerriel L. Evans, Jr., and Terry W. Evans.
(5) Includes 1,351,200 shares held by J. L. Evans Systems, Ltd., of which
Mr. Evans claims beneficial ownership. Includes 64,500 shares issuable
upon the exercise of options.
(6) Includes 1,351,200 shares held by J. L. Evans Systems, Ltd., of which
Ms. Evans claims beneficial ownership. Includes 12,500 shares issuable
upon the exercise of options.
(7) Includes 24,750 shares issuable to Mr. Way upon the exercise of
warrants and 12,500 upon the exercise of options.
(8) Includes 20,000 shares issuable to Ms. Jones upon the exercise of
warrants and 45,000 upon the exercise of options.
(9) Includes 45,000 shares issuable to Mr. Evans, Jr. upon the exercise of
options.
(10) Includes 20,000 shares issuable to Messrs. Schafer and Losavio upon the
exercise of options.
(11) Includes 7,500 shares issuable to Ms. Edwards upon the exercise of
options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.
The Company believes, based solely on review of copies of such forms
furnished to the Company, or written representations that no Form 5's were
required, that all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with
during Fiscal 1998, except that each of Messrs. Dix and Goeggel inadvertently
filed a Form 3 late.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During Fiscal 1998, the Company leased 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. One ten-year lease
commenced in December 1995, with monthly lease payments of $1,800 and allows for
two five-year automatic renewals at the Company's option. The other location was
sold by the majority shareholder in December 1998. The amounts paid under these
leases were $76,800 for the years ended September 30, 1998 and $73,000 for the
years ended September 30, 1997 and 1996. Future minimum lease commitments as of
September 30, 1998 were $51,200.
During Fiscal 1998, the Company rented, on a month-to-month basis,
five convenience store locations from the majority shareholder. Previously, the
Company rented additional locations which were sold by the
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shareholder to unrelated parties. The total month-to-month rent paid for the
year ended September 30, 1998 were $34,800 and $104,000 for the years ended
September 30, 1998 and $73,000 for the years ended September 30, 1997 and 1996.
All five locations were sold by the shareholder to unrelated third parties
subsequent to September 30, 1998.
See Note 8 ("Related Party Transactions") of the Notes to
Consolidated Financial Statements for disclosure regarding a note receivable
from a former director. The balance of the note receivable was approximately
$111,000 at September 30, 1998. The note was repaid in December 1998.
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, 1998.
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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 28, 1999
EVANS SYSTEMS, INC.
By: /S/ JERRIEL L. EVANS, SR.
--------------------------------------
Name: Jerriel L. Evans, Sr.
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/S/ JERRIEL L. EVANS, SR. (Director and Principal January 28, 1999
- ------------------------ Executive Officer)
Jerriel L. Evans, Sr.
/S/ RICHARD A. GOEGGEL (Principal Financial Officer January 28, 1999
- ------------------------ and Principal Accounting
Richard A. Goeggel Officer)
/S/ MAYBELL H. EVANS Director January 28, 1999
- ------------------------
Maybell H. Evans
/S/ CHARLES N. WAY Director January 28, 1999
- ------------------------
Charles N. Way
/S/ DARLENE E. JONES Director January 28, 1999
- ------------------------
Darlene E. Jones
/S/ CARL W. SCHAFER Director January 28, 1999
- ------------------------
Carl W. Schafer
/S/ PETER J. LOSAVIO Director January 28, 1999
- ------------------------
Peter J. Losavio
/S/ JULIE H. EDWARDS Director January 28, 1999
- ------------------------
Julie H. Edwards
