UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A*
*Amendment No. 1 to Form 10-K for the fiscal year ended March 31, 1996.
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED MARCH 31,
1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO
_________
Commission file number 0-23222
FINISHMASTER, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2252096
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4259 40th Street, SE, Kentwood, Michigan 49512
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616) 949-7604
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK (NO PAR VALUE)
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 the 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 ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of July 25, 1996 was $20,492,325.
At July 25, 1996, there were outstanding 6,000,000 shares of the Registrant's
common stock.
Documents Incorporated By Reference
NONE
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Board of Directors
As of March 31, 1996, the Board of Directors (the "Board") of
FinishMaster, Inc. (the "Registrant") was comprised of nine directors: Max A.
Coon, Eric L. Cross, Richard G. Johns, Douglas A. Milbury, Gary W. Ross, Vincent
Shunsky, Michael J. Siereveld, James F. White, and Ronald P. White. The
following table indicates, as of March 31, 1996: (i) the name, principal
occupation and business experience of each director of the Registrant, (ii) the
period during which each director has served in such capacity, and (iii) the age
of each director.
<TABLE>
<CAPTION>
Present Position with the Registrant and Age Served as Director of
Name Principal Occupation FinishMaster Since
- - - ------------------ ------------------------------------------------------ --- --------------------
<S> <C> <C> <C>
Max A. Coon Director and Chairman of the Board of 61 1973
FinishMaster Inc.; President and Chairman of the
Board of Maxco, Inc., a Michigan corporation which
owned 67.4% of the Registrant's common stock as of
March 31, 1996.
Eric L. Cross Director and Secretary of FinishMaster, Inc.; 53 1987
Executive Vice President of Maxco, Inc.
Richard G. Johns Director of FinishMaster, Inc.; Vice President of 50 1990
Maxco, Inc.; President of Wright Plastic Products,
Inc. a wholly owned subsidiary of Maxco, Inc.
Douglas A. Milbury Director of FinishMaster, Inc.; President of Story 53 1993
Incorporated, a Lansing, Michigan based
management and holding company which is
involved in the retail automotive business,
automotive leasing and credit life insurance.
Gary W. Ross Director of FinishMaster, Inc.; Chairman of Pacific 50 1994
Growth Equities, a San Francisco based securities
broker/dealer and investment banking company.
Vincent Shunsky Director and Treasurer of FinishMaster, Inc.; Vice 47 1990
President of Finance and Treasurer of Maxco, Inc.
Michael Siereveld Director and Senior Vice President of 41 1993
FinishMaster, Inc.
James F. White Director, Vice Chairman of the Board and Founder 77 1968
of FinishMaster, Inc.,
Ronald P. White Director, Chief Executive Officer and President of 46 1993
FinishMaster, Inc.
</TABLE>
All of the foregoing directors have been engaged in the principal
occupation specified for the previous five (5) years.
Messrs. Coon, Cross, Johns, Shunksy and James White are also directors
of Maxco, Inc., a Michigan corporation which owned 67.4% of the Registrant's
common stock as of March 31, 1996 ("Maxco"). Messrs. Coon and Shunsky are
Directors of Medar, Inc., a 20% owned subsidiary of Maxco. Mr. Coon is
additionally a director of Spartan Motors, Inc., whose stock is traded on the
Nasdaq Stock Market.
-2-
<PAGE>
Ronald P. White is the son of James F. White. Mr. Coon and Mr. Cross
are brothers-in-law. There are no other family relationships between any
directors or executive officers of the Registrant.
The management of the Registrant is under the direction of the Board.
The Board held four meetings during the Registrant's fiscal year ended March 31,
1996. James F. White and Gary W. Ross attended fewer than 75% of the meetings of
the Board.
The Registrant's Articles of Incorporation and By-Laws provide that the
directors of the Registrant shall be elected for the term for which they are
elected and until their respective successors shall have been elected and
qualified, or until their resignation or removal. Generally, directors of the
Registrant have been elected to serve 1-year terms.
Board Committees
The Board of Directors has established an Audit Committee and a Compensation
Committee. The Audit Committee, whose members consisted of Messrs. Milbury,
Shunsky and Ross for the fiscal year ended March 31, 1996, met two times in the
fiscal year ended March 31, 1996. The Audit Committee recommends the annual
employment of the Registrant's auditors with whom the Audit Committee will
review the scope of audit and non-audit assignments, related fees, the
accounting principles used by the Registrant in financial reporting, internal
financial auditing procedures and the adequacies of the Registrant's internal
control procedures.
The Compensation Committee, whose members consisted of Messrs. Cross, Johns
and Shunsky for the fiscal year ended March 31, 1996, met four times in such
fiscal year to determine executive officer salaries and bonuses. The
Compensation Committee also administers the Registrant's stock option plan.
Director Compensation
In the fiscal year ended March 31, 1996, the non-employee Directors of the
Registrant who were not also directors or employees of Maxco or its subsidiaries
were paid $1,000 per meeting attended. In such fiscal year, fees were not paid
to directors for attendance at committee meetings.
Executive Officers
The following table sets forth, as of March 31, 1996, the names of the
executive officers of the Registrant, their positions, offices and ages:
Present Position With the
Name Registrant and Principal Occupation Age
Ronald P. White.................. President and Chief Executive
Officer of FinishMaster, Inc. 46
Michael J. Siereveld............. Senior Vice President of
FinishMaster, Inc. 41
Roger A. Sorokin................. Vice President-Finance of
FinishMaster, Inc. 55
Christopher R. Banner............ Vice President-Operations of
FinishMaster, Inc. 44
Eric L. Cross.................... Secretary of FinishMaster, Inc.;
Executive Vice President and 53
Secretary of Maxco, Inc.
Vincent Shunsky.................. Treasurer of FinishMaster, Inc.;
Vice President of Finance and 47
Treasurer of Maxco, Inc.
All of the foregoing officers of the Registrant have been engaged in the
principal occupations specified above for the previous five years, except as
follows:
Roger A. Sorokin was elected Vice President-Finance in April 1993 after
serving as Director of Finance since joining the Registrant in 1991. Eric L.
Cross was elected Secretary of the Registrant in 1993. From 1985 to present, Mr.
Cross has served as the Executive Vice President of Maxco, Inc.
-3-
<PAGE>
Recent Developments
At a closing held on July 9, 1996 (the "Closing Date"), LDI AutoPaints,
Inc., an Indiana corporation ("AutoPaints"), and Maxco consummated the purchase
and sale of all 4,045,000 shares of common stock, without par value ("Common
Stock"), of the Registrant which were owned by Maxco (the "Stock Purchase"). The
shares purchased and sold in the Stock Purchase represent 67.4%
of the total issued and outstanding shares of Common Stock of the Registrant.
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 individuals designated by 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 interim Board of Directors of the Registrant
following the Stock Purchase.
At an organizational meeting held on July 10, 1996 (the "Organizational
Meeting"), the interim Board of Directors of the Registrant nominated the
existing directors for election at the next annual shareholders' meeting. The
Registrant currently plans to recruit one or more additional individuals with
relevant industry and/or public company experience to serve as independent
directors of the Registrant. Such individuals, if successfully recruited, would
join the members of the existing Board of Directors as director-nominees for
election at the next annual shareholders' meeting.
In addition, at the Organizational Meeting, the Board of Directors of the
Registrant elected the following individuals as officers of the Registrant, in
part to fill certain vacancies created as a result of the Stock Purchase:
Name Office
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
At the Organizational Meeting, the Board established an Executive
Committee consisting of Andre B. Lacy, Thomas U. Young and Ronald P. White,
which committee, in addition to such other duties as may be prescribed from time
to time by the Board, shall have and exercise, during intervals between the
meetings of the Board, all powers invested in the Board, subject to applicable
legal requirements. In addition, the Board appointed all of the members of the
Board to the Audit Committee of the Registrant, with Walter S. Wiseman serving
as the Chair of such committee. Finally, the Board appointed Margot L. Eccles
and Mr. Wiseman to the Compensation Committee, to replace those directors who
had previously served on such committee prior to the Stock Purchase, with Ms.
Eccles serving as the Chair of such committee.
By a letter dated July 22, 1996, Mr. Ronald P. White resigned as a director
and as President and Chief Operating Officer of the Registrant. In response to
this resignation, the Board of Directors, by a unanimous written consent dated
as of July 24, 1996, elected Thomas U. Young President and Chief Operating
Officer to hold such office until the next annual meeting of the Board
of Directors of the Registrant and until his successor shall be duly chosen
and qualified.
-4-
<PAGE>
Item 11. Executive Compensation.
The following table summarizes, for the Registrant's last three fiscal
years, the compensation of the persons who served as Chief Executive Officer of
the Registrant during the fiscal year ended March 31, 1996 and each of the other
most highly compensated executive officers of the Registrant who were serving as
such at the end of such fiscal year and whose salary and bonus compensation
exceeded $100,000 for services rendered in all capacities to the Registrant and
its subsidiary (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Fiscal Year
Name and Ended Securities Underlying All Other
Principal Position March 31, Salary($) Bonus($) Option Awards (#)(1) Compensation($)(2)
<S> <C> <C> <C> <C> <C>
Ronald P. White................ 1996 $155,000 $24,000 25,000 $3,651
Chief Executive Officer 1995 127,000 48,260 --- 3,348
1994 108,000 60,500 19,000 3,042
Michael J. Siereveld........... 1996 $150,000 $22,000 25,000 $3,581
Senior Vice President 1995 110,000 44,000 --- 3,348
1994 93,000 52,000 17,000 2,618
Roger A. Sorokin............... 1996 $92,000 $14,000 12,500 $2,921
Vice President, Finance 1995 79,000 27,650 --- 2,346
1994 --- --- --- ---
Christopher R. Banner.......... 1996 $92,000 $15,000 12,500 $2,931
Vice President, Operations 1995 80,132 28,046 --- ---
1994 --- --- --- ---
</TABLE>
- - - --------------------
(1) Represents the number of Shares on which options were granted.
(2) Represents the Registrant's 20% match of employee deferrals of currently
earned income into the 401(k) Employee Savings Plan and a profit sharing
contribution made by the Registrant for all of its eligible employees to
the 401(k) Employee Savings Plan at the rate of 1% of compensation.
-5-
<PAGE>
The following table sets forth information related to options granted
during the fiscal year ended March 31, 1996 to each of the Named Executive
Officers to whom options have been granted.
<TABLE>
<CAPTION>
Stock Option Grants in Fiscal Year Ended March 31, 1996
Individual Grants
% of Total
Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Expiration
Name Granted (#) Year 1996 ($/Sh) Date 5%($)(1) 10%($)(1)
---- ----------- --------- ------ ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ronald P.
White 25,000 25.1% $11.00 12/22/05 $172,947.50 $438,267.50
Michael J.
Siereveld 25,000 25.1% $11.00 12/22/05 $172,947.50 $438,267.50
Christopher J.
Banner 12,500 12.6% $11.00 12/22/05 $86,473.75 $219,133.75
Roger A.
Sorokin 12,500 12.6% $11.00 12/22/05 $86,473.75 $219,133.75
</TABLE>
- - - -------------------
(1) These gains are based upon assumed rates of annual compound stock
appreciation of 5% and 10% from the date the options were granted over the
full option term. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on option exercises are dependent
upon the future performance of the Shares and overall stock market
conditions. There can be no assurance that the amounts reflected on this
table will be achieved.
The following table sets forth certain information regarding the total
number of stock options held by each of the Named Executive Officers, and the
aggregate value of such stock options, as of March 31, 1996. None of such stock
options had been exercised as of such date.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Fiscal Year Ended March 31, 1996
and Fiscal Year-End Option Values
Number of Securities
Shares Underlying Value of In-the-Money
Acquired on Value Unexercised Options Unexercised Options at
Name Exercise (#) Realized ($) at Fiscal Year-End Fiscal Year-End ($)(1)
---- ------------ ------------ ------------------ ----------------------
<S> <C> <C>
Ronald P. White --- --- 44,000 $31,500
Michael J. Siereveld --- --- 42,000 29,500
Christopher J. Banner --- --- 22,550 16,300
Roger A. Sorokin --- --- 23,000 22,000
</TABLE>
- - - -------------------
(1) Based on the closing price for the Shares on the last business day of the
fiscal year ended March 31, 1996, which was $11.50 per share.
-6-
<PAGE>
Compensation Committee Interlocks and Insider Participation
For the fiscal year ended March 31, 1996, the Compensation Committee of the
Board of Directors (the "Committee") consisted of Eric L. Cross, Richard G.
Johns and Vincent Shunsky. Messrs. Cross and Shunsky, although officers of the
Registrant in the fiscal year ended March 31, 1996, were also officers and
directors of Maxco, were paid by Maxco, and received no compensation from the
Registrant.
Compensation Committee Report on Executive Compensation
Overview and Philosophy
The Committee is responsible for developing and making recommendations to
the Board with respect to the Registrant's executive compensation policies. In
addition, the Committee, pursuant to authority delegated by the Board,
determines on an annual basis the compensation to be paid to the Chief Executive
Officer and each of the other executive officers of the Registrant.
The objectives of the Registrant's executive compensation program are to:
_ Support the achievement of desired Registrant performance.
_ Provide compensation that will attract and retain superior talent
and reward performance.
_ Align the executive officers' interests with the success of the
Registrant by placing a portion of pay
at risk, with payout dependent upon corporate performance.
The executive compensation program provides an overall level of
compensation opportunity that is competitive with companies of comparable size
and complexity. The Committee will use its discretion to set executive
compensation where in its judgment external, internal or an individual's
circumstances warrant it.
Executive Officer Compensation Program
The Registrant's executive officer compensation program is comprised of
base salary, annual cash incentive compensation, long-term incentive
compensation in the form of stock options, and various benefits, including
medical and deferred compensation plans, generally available to employees of the
Registrant.
Base Salary
Base salary levels for the Registrant's executive officers are
competitively set relative to other comparable companies. In determining
salaries the Committee also takes into account individual experience and
performance.
Annual Incentive Compensation
The Registrant's annual incentive program for executive officers and key
managers provides direct financial incentives in the form of an annual cash
bonus to executives based on the Registrant's ability to create economic value.
Economic value is measured by the Registrant's ability to generate a return in
excess of the Registrant's cost of capital.
Specific individual performance was also taken into account in determining
bonuses, including meeting department goals, attitude, dependability,
cooperation with co-workers, and creativity or ideas that benefit the
Registrant.
-7-
<PAGE>
Stock Option Program
The stock option program is the Registrant's long-term incentive plan for
executive officers and key employees. The objectives of the program are to align
executive and shareholder long-term interests by creating a strong and direct
link between executive pay and shareholder return, and to enable executives to
develop and maintain a significant, long-term stock ownership position in the
Registrant's Common Stock.
The Registrant's stock option plan was adopted by the Registrant's Board
of Directors in November 1993 and was ratified by the sole stockholder on
November 30, 1993. The stock option plan provides for the grant of both
incentive stock options intended to qualify for preferential tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended, and nonqualified
stock options that do not qualify for such treatment. The stock option plan
authorizes a committee of directors to award executive and key employee stock
options. Stock options are granted at an option price equal to the fair market
value of the Registrant's common stock on the date of grant, have ten year terms
and can have exercise restrictions established by the Committee. A total of
600,000 shares of common stock have been reserved for issuance under the stock
option plan.
Deferred Compensation
The Registrant's employees participate in FinishMaster Inc.'s 401(k)
Employee Savings Plan. The 401(k) plan is a "cash or deferred" plan under which
employees may elect to contribute a certain portion of their annual compensation
which they would otherwise be eligible to receive in cash. The Registrant has
agreed to make a matching contribution of 20% of the employees' contributions of
up to 6% of their annual compensation. In addition, the Registrant intends to
contribute 1% of compensation for each employee, or more or less at the
discretion of the Board. Contributions must be made from current or retained
earnings of the Registrant. All full time employees of the Registrant or its
subsidiary who have completed one year of service are eligible to participate in
the plan. Participants are immediately 100% vested in all contributions. The
plan does not contain an established termination date and it is not anticipated
that it will be terminated at any time in the foreseeable future.
Benefits
The Registrant provides medical benefits to the executive officers that
are generally available to Registrant employees. The amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed 10% of salary for
the fiscal year ended March 31, 1996.
Chief Executive Officer
Ronald P. White served as the Registrant's Chief Executive Officer in the
fiscal year ended March 31, 1996, having first been named to such position in
1988. His base salary for the fiscal year ended March 31, 1996 was $155,000. Mr.
White's bonus in fiscal year 1996 was $24,000.
The factors discussed under "Annual Incentive Compensation", above, were
also applied in establishing the amount of Mr. White's bonus. Significant
factors in establishing Mr. White's compensation were the Registrant's ability
to create economic value, the development and implementation of the Registrant's
acquisition strategy and general business development.
The Committee believes Mr. White managed the Registrant well in a
challenging business climate and has achieved above-average results in
comparison to other comparable companies.
TheCompensation Committee of the Registrant for the Fiscal Year Ended March 31,
1996:
Eric L. Cross
Richard G. Johns
Vincent Shunsky
-8-
<PAGE>
[PERFORMANCE GRAPH]
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock of the Registrant for the period beginning April 1, 1995 and ending
March 31, 1996, with the cumulative total return on the CRSP Total Return Index
for the Nasdaq Stock Market (US Companies) (1) and the Nasdaq index of
Non-Financial Companies (2) over the same period, assuming the investment of
$100 in the Registrant's Common Stock, the Nasdaq U.S. Index and the Nasdaq
Non-Financial Index on February 23, 1994, and reinvestment of all dividends.
Cumulative Total Return
------------------------------
2/23/94 3/94 3/95 3/96
Finishmaster, Inc. FMST 100 83 140 105
NASDAQ Stock Market--US INAS 100 94 105 142
NASDAQ Non-Financial INNF 100 94 103 137
- - - ----------------------
(1) The CRSP Total Return Index for the Nasdaq Stock Market (US Companies)
is composed of all domestic common shares traded on the Nasdaq National
Market and the Nasdaq Small-Cap Market.
(2) Nasdaq index of non-financial companies.
-9-
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The authorized capital stock of the Registrant as of July 26, 1996
consisted of (i) 10,000,000 shares of common stock, no par value (each a
"Share"), of which 6,000,000 Shares were issued and outstanding and 600,000
Shares were reserved for issuance pursuant to outstanding stock options (rights
to stock options for an aggregate of 222,025 Shares being outstanding as of
March 31, 1996) and (ii) 1,000,000 shares of preferred stock, without par value,
of which no shares are outstanding. As of March 31, 1996, Maxco owned
beneficially and of record 4,045,000 Shares, representing 67.4% of the total
issued and outstanding Shares. Each issued and outstanding Share is entitled to
one vote on each matter subject to a shareholder vote.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to the beneficial ownership
of Shares by each person known to the Registrant, as of March 29, 1996, to own
more than 5% of the issued and outstanding Shares.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
------------------------------------------------------------------------------------
Name and Address of Sole Voting and Shared Voting and
Beneficial Owner Investment Power Investment Power % of Class
<S> <C> <C> <C>
Maxco, Inc. 4,045,000 0 67.4
1118 Centennial Way
Lansing, Michigan 48917
Edgemont Asset Management 365,000 0 6.1
Corporation
140 East 45th Street
43rd Floor
New York, New York 10017
Kalmar Investments Inc. 428,000 0 7.1
1300 Market Street, Suite 500
Wilmington, Delaware 19801
</TABLE>
-10-
<PAGE>
Security Ownership of Management
The following table sets forth information as of May 31, 1996 with respect
to Shares beneficially owned by (i) each director, (ii) each Named Executive
Officer (as defined below), and (iii) all directors and executive officers of
the Registrant as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
------------------------------------------------------------------------------------
Name of Sole Voting and Shared Voting and
Beneficial Owner Investment Power Investment Power % of Class
<S> <C> <C>
Christopher R. Banner...................... 25,400(1) 0 *
Max A. Coon................................ 5,000(2) 0(4) *
Eric L. Cross.............................. 2,500(3) 0 *
Richard G. Johns........................... 2,500(5) 1,000 *
Douglas A. Milbury......................... 6,000(6) 0 *
Gary W. Ross............................... 36,000(7) 0 *
Vincent Shunsky............................ 3,500(8) 0 *
Michael J. Siereveld....................... 49,650(9) 350 *
Roger A. Sorokin........................... 23,000(10) 0 *
James F. White............................. 13,500(11) 1,000 *
Ronald P. White............................ 47,500(12) 0 *
All directors and officers as a group
(11 persons)............................... 214,550 2,350 *
</TABLE>
- - - ---------------
* Beneficial ownership does not exceed one percent (1%)
(1) Includes options for 22,500 Shares, which options are currently
exercisable in accordance with their terms.
(2) Consists of options for 5,000 Shares, which options are currently
exercisable in accordance with their terms.
(3) Consists of options for 2,500 Shares, which options are currently
exercisable in accordance with their terms.
(4) Does not include Shares held by Maxco, of which Mr. Coon is the President
and Chairman of the Board and the owner of 22% of its common stock.
(5) Consists of options for 2,500 Shares, which options are currently
exercisable in accordance with their terms.
(6) Includes options for 5,000 Shares, which options are currently
exercisable in accordance with their terms.
(7) Includes options for 5,000 Shares, which options are currently
exercisable in accordance with their terms.
(8) Includes options for 2,500 Shares, which options are currently
exercisable in accordance with their terms.
(9) Includes options for 42,000 Shares, which options are currently
exercisable in accordance with their terms.
(10) Consists of options for 23,000 Shares, which options are currently
exercisable in accordance with their terms.
(11) Includes options for 12,500 Shares, which options are currently
exercisable in accordance with their terms.
(12) Includes options for 44,000 Shares, which options are currently
exercisable in accordance with their terms.
-11-
<PAGE>
Item 13. Certain Relationships and Related Transactions
Transactions With Management and Beneficial Owners
Prior to November 30, 1993, Maxco owned 100% of the outstanding stock of
the Registrant and of the Registrant's wholly owned subsidiary, Refinishers
Warehouse. In contemplation of the Registrant's initial public offering of its
common stock, which became effective on February 23, 1994, the Registrant and
Maxco entered into an agreement effective November 30, 1993, whereby Maxco
transferred all of the capital stock of Refinishers Warehouse to the Registrant
in exchange for 4,299,000 previously unissued shares of the Registrant's common
stock.
Maxco provided certain services for its subsidiaries, including the
Registrant, in the fiscal year ended March 31, 1996. The services included
central purchasing of all insurance, including employee benefit coverage,
general and automobile liability, property and casualty insurance. While each
subsidiary was charged for its pro rata share of the costs of such services in
the fiscal year ended March 31, 1996, there has never been a management or
service fee charged to any of the subsidiaries by Maxco. The officers of the
Registrant who are also officers of Maxco are not compensated by the Registrant.
During the period in which Maxco owned shares of common stock of the
Registrant, the Registrant from time to time incurred indebtedness to Maxco in
connection with the payment of taxes and the Registrant's share of the
costs of certain of the above-described services. At March 31, 1996, there
was no outstanding indebtedness of the Registrant to Maxco.
In addition, Maxco leased during the fiscal year ended March 31, 1996, and
continues to lease, a retail store premises to the Registrant at prevailing
market rates.
Recent Developments
In anticipation of the public offering of the Shares, the Registrant
entered into an agreement with Maxco for the purpose of defining the
relationship between them after the offering (the "Inter-Company Agreement").
This intercompany agreement did not result from arms length negotiations between
independent parties. In connection with the Stock Purchase, the Registrant and
Maxco terminated, effective July 9, 1996, all agreements existing between them,
including without limitation the Inter-Company Agreement. In order allow the
Registrant to continue to participate in a certain medical plan for the benefit
of its employees, the Registrant and Maxco entered into an agreement, effective
as of the Closing Date, which provides for the Registrant's continued
participation in such plan until the termination of the agreement on December
31, 1996. See "Recent Developments" under Item 10, above.
-12-
<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 Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FINISHMASTER, INC.
By: /s/ Andre B. Lacy
Andre B. Lacy
Chairman & Chief Executive Officer
Date: July 26, 1996
POWER OF ATTORNEY
Each person whose signature appears below does hereby make, constitute and
appoint Andre B. Lacy and William J. Fennessy, and each of them, as
attorney-in-fact to execute in the name and on behalf of each person
individually and in each capacity stated below any amendment, exhibit, or
supplement to this report making such changes in the report as such attorney
deems appropriate.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
1. Principal Executive Officer
/s/ Andre B. Lacy Chairman & July 26, 1996
Andre B. Lacy Chief Executive
Officer
2. Principal Financial and
Accounting Officer
/s/ Roger A. Sorokin Chief Financial Officer July 26, 1996
Roger A. Sorokin
3. A majority of the Board
of Directors
/s/ Andre B. Lacy Director July 26, 1996
Andre B. Lacy
/s/ Thomas U. Young Director July 26, 1996
Thomas U. Young
/s/ Margot L. Eccles Director July 26, 1996
Margot L. Eccles
/s/ William J. Fennessy Director July 26, 1996
William J. Fennessy
/s/ Michael J. Siereveld Director July 26, 1996
Michael J. Siereveld
/s/ James F. White Director July 26, 1996
James F. White
/s/ Walter S. Wiseman Director July 26, 1996
Walter S. Wiseman
</TABLE>
