SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A*
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
*Date of Report (Date of earliest event reported) July 9, 1996
FINISHMASTER, INC.
(Exact name of registrant as specified in its charter)
Michigan 000-23222 38-2252096
(State or other jurisdiction) (Commission File Number) (IRS Employer
Identification No.)
4259 40th Street, SE, Kentwood, Michigan 49512
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (616) 949-7604
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Item 1. Change in Control of Registrant.
At a closing held on July 9, 1996 (the "Closing Date"), LDI AutoPaints,
Inc., an Indiana corporation ("AutoPaints"), and Maxco, Inc., a Michigan
corporation ("Maxco") consummated the purchase and sale of all 4,045,000 shares
of common stock, without par value ("Common Stock"), of FinishMaster, Inc. (the
"Registrant") which were owned by Maxco (the "Stock Purchase"). The shares
purchased and sold in the Stock Purchase (the "Shares") represent 67.4% of the
total issued and outstanding shares of Common Stock of the Registrant.
The Stock Purchase was consummated pursuant to a Stock Purchase
Agreement dated June 5, 1996 (the "Purchase Agreement") among Lacy Distribution,
Inc., an Indiana corporation and the corporate parent of AutoPaints ("Lacy"),
Maxco, and LDI, Ltd., an Indiana limited partnership and the parent entity of
Lacy and AutoPaints ("LDI"). Under an Assignment and Assumption Agreement dated
as of the Closing Date, Lacy assigned all its right, title and interest in and
to the Purchase Agreement to AutoPaints, and AutoPaints assumed of all
obligations, duties, covenants and conditions of Lacy thereunder with respect to
the purchase of the Shares, all with the consent of LDI and Maxco. As a result
of the Stock Purchase, AutoPaints is now the beneficial owner of 67.4% of the
total issued and outstanding shares of Common Stock of the Registrant.
AutoPaints purchased the Shares from Maxco at a price of $11.50 per
Share, or $46,517,500 in the aggregate (the "Purchase Price"). Pursuant to the
Purchase Agreement, Maxco and certain directors of the Registrant prior to the
Closing Date who are also directors of Maxco (the "Individual Restricted
Parties") entered into a Non-Competition Agreement with Lacy, effective as of
the Closing Date, pursuant to which Maxco and the Individual Restricted Parties
are to receive consideration in the aggregate amount of $16,500,000 (the
"Non-Compete Consideration"). The Non- Compete Consideration is payable
according to the following schedule: (i) $12,000,000 was paid to Maxco on the
Closing Date, and (ii) $4,500,000 in the aggregate is to be paid to Maxco and
the four Individual Restricted Parties in five annual installments of $900,000
each commencing in July, 1997. Of each such annual installment of $900,000,
$20,000 is payable to each of the four Individual Restricted Parties and the
remainder ($820,000) is payable to Maxco.
A portion of the Purchase Price was obtained under an existing
$200,000,000 revolving credit facility evidenced by a Credit Agreement dated as
of March 29, 1996, as amended from time to time, among LDI, Lacy, various
financial institutions and Bank of America National Trust and Savings
Association, as Agent.
In accordance with the Purchase Agreement, six (6) individuals executed
and delivered their resignations as directors of the Registrant, effective
immediately upon the closing of the Stock Purchase (the "Closing").
Simultaneously therewith, certain
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individuals designated by Lacy and AutoPaints were elected to the Board of
Directors of the Registrant to fill the vacancies created by such resignations.
In addition, effective immediately upon the Closing, certain officers of the
Registrant who are also officers of Maxco executed and delivered their
resignations as officers of the Registrant.
The following individuals resigned as directors and/or officers of the
Registrant as of the Closing Date (collectively, the "Resigning Directors"): (i)
Max A. Coon Chairman of the Board; (ii) Eric L. Cross - Secretary and Director;
(iii) Richard G. Johns - Director; (iv) Vincent Shunsky - Treasurer and
Director, (v) Douglas A.
Milbury - Director; and (vi) Gary W. Ross - Director.
The following individuals have been elected to the Board of Directors
of the Registrant to fill the vacancies created by such resignations
(collectively, the "Designated Directors"): (a) Andre B. Lacy, (b) Thomas U.
Young, (c) Margot L. Eccles, (d) William J. Fennessy and (e) Walter S. Wiseman.
The Designated Directors, together with Messrs. Michael J. Siereveld, James F.
White and Ronald P. White, constitute the Board of Directors of the Registrant
following the Stock Purchase.
At a meeting held on July 10, 1996, the Board of Directors of the
Registrant elected the following individuals as officers of the Registrant:
Name Office
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Andre B. Lacy Chairman of the Board and
Chief Executive Officer
Thomas U. Young Vice Chairman of the Board
Ronald P. White President and
Chief Operating Officer
Michael J. Siereveld Senior Vice President
Roger A. Sorokin Vice President - Finance
Christopher R. Banner Vice President - Operations
William J. Fennessy Treasurer
Robert H. Reynolds Secretary
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Item 4. Change in Registrant's Certifying Accountant
At a meeting held on July 10, 1996, the Board of Directors of the
Registrant dismissed Ernst & Young, LLP ("Ernst & Young") as the independent
auditor of the Registrant for the fiscal year ending March 31, 1997, effective
July 10, 1996.
At the same meeting, the Board of Directors of the Registrant approved
the appointment of Coopers & Lybrand, LLP as the independent auditor of the
Registrant for the fiscal year ending March 31, 1997, to replace the firm of
Ernst & Young. The decision to change auditors was recommended and approved by
the Board of Directors of the Registrant.
Ernst & Young's report on the Registrant's financial statements during
the two most recent fiscal years contained no adverse opinion or a disclaimer of
opinion, and was not qualified as to uncertainty, audit scope or accounting
principles. During the last two fiscal years and subsequent interim periods
preceding this change, there were no disagreements between the Registrant and
Ernst & Young on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Ernst & Young, would have caused it to make
a reference to the subject matter of the disagreements in connection with its
reports.
The Company has requested Ernst & Young to furnish it a letter
addressed to the Commission stating whether it agrees with the above statements.
A copy of that letter, dated July 29, 1996, is filed as Exhibit 16 to the 8-K/A.
Item 7. Financial Statements and Exhibits
Exhibit 16 - Letter Re: Change in Certifying Accountant.
[signature page follows]
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FINISHMASTER, INC.
By: /s/ Andre B. Lacy
Andre B. Lacy, Chairman of
the Board and Chief Executive
Officer
Date: July 26, 1996
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[Ernst & Young LLP Letterhead]
Exhibit 16 to Amended Form 8-K, Dated July 29, 1996
July 29, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 of Amended Form 8-K dated July 29, 1996, of Finishmaster,
Inc. and are in agreement with the statements contained in paragraphs 1, 3 and 4
therein. We have no basis to agree or disagree with other statements of the
registrant contained in paragraph 2 therein.
/s/ Ernst & Young LLP
