SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
ON
FORM 10-K/A
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 1997
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO
_________
Commission File No. 0-23538
MOTORCAR PARTS & ACCESSORIES, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 11-2153962
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2727 MARICOPA STREET, TORRANCE, CALIFORNIA 90503
- ------------------------------------------ --------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (310) 212-7910
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: Common Stock, $.01 par
value
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 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 in response 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. [_]
Issuer's revenues for its most recent fiscal year: $86,872,000.
The aggregate market value, calculated on the basis of the average bid and asked
prices of such stock on the National Association of Securities Dealers Automated
Quotation System, of Common Stock held by non-affiliates of the Registrant as of
June 23, 1997 was approximately $65,774,512.
There were 5,036,455 shares of Common Stock outstanding as of June 23, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
Items 11 and 12 are hereby amended to reflect that Eli Markowitz is not and has
not been an executive officer of the Company and certain other changes.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual
compensation of the Company's chief executive officer and other most highly
compensated executive officers whose salary and bonus exceeded $100,000 for the
1997 fiscal year, for services in all capacities to the Company during the
Company's 1997, 1996 and 1995 fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SHARES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION (2)
- ----------------------- ---- ------ ----- --------------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Mel Marks 1997 $300,231 $150,000 --- --- $16,292
Chairman of the 1996 $252,000 $175,000 --- --- ---
Board and Chief 1995 $252,969 $ 50,000 --- --- ---
Executive Officer
Richard Marks 1997 $300,231 $150,000 $12,695 50,000 $ 135
President and Chief 1996 $252,145 $175,000 $ 9,060 --- ---
Operating Officer 1995 $252,969 $ 50,000 --- --- ---
Steven Kratz 1997 $175,214 $ 87,500 $ 6,501 20,000(3)
Vice President - 1996 $152,395 $ 75,000 $ 4,569 35,000(3)
Operations 1995 $128,442 $ 10,000 --- ---
Peter Bromberg 1997 $119,711 $ 48,000 $ 4,597 12,500(3)
Chief Financial 1996 $100,057 $ 40,000 $ 3,180 5,000(3)
Officer and 1995 $ 85,000 --- --- ---
Assistant Secretary
</TABLE>
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(1) Represents amounts subject to the Company's non-qualified deferred
compensation plan contributed on the executive employee's behalf by the
Company.
(2) Consists of the dollar value of split-dollar life insurance benefits.
(3) These shares were repriced during fiscal 1997.
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<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES PRICE APPRECIATION FOR
OPTIONS IN FISCAL EXERCISE OR EXPIRATION OPTION TERMS
NAME GRANTED 1997(4) BASE PRICE DATE 5%($) 10%($)
- ---- ------- ---------- -------------- -------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Richard Marks 50,000(1) 28.1 $14.69/share November 28, $461,923 $1,170,604
2006
Steven Kratz 20,000(2) 11.3 $10.63/share(5) April 17, 2006 $133,703 $ 338,830
Peter 12,500(3) 7.0 $10.63/share(5) April 17, 2006 $ 83,564 $ 211,769
Bromberg
</TABLE>
- ---------------
(1) The options are currently exercisable as to 25,000 shares and exercisable
as to 25,000 shares commencing December 2, 1997.
(2) The options are fully exercisable commencing April 18, 1999.
(3) The options are currently exercisable as to 10,000 shares and exercisable
as to 2,500 shares commencing April 18, 1998.
(4) Does not include options repriced during fiscal 1997.
(5) The options were repriced during fiscal 1997 from $16.00 per share to
$10.63 per share.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED REALIZED OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
NAME ON EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- ---- -------------- ------ -------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Richard Marks 0 $ 0 25,000/25,000 $0/$0
Steven Kratz 10,000 $115,750 60,000/40,000 $406,950/$132,400
Peter Bromberg 5,000 $ 57,250 15,000/17,500 $119,100/$57,925
</TABLE>
- ---------------
(1) Represents the fair market value of the underlying shares of Common Stock
on the date of exercise less the option exercise price.
(2) Based on the fair market value per share of $13.94 on the last day of
fiscal 1997.
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<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement, as amended to
date, with Mel Marks pursuant to which he is employed full-time as the Company's
Chairman of the Board and Chief Executive Officer. The agreement expires in
September 1999 and provides for an annual base salary of $300,000. The Company's
Board of Directors also may grant bonuses or increase the base salary payable to
Mr. Marks. In addition to his cash compensation, Mr. Marks receives an
automobile allowance and other benefits, including those generally provided to
other employees of the Company. The agreement further provides for a severance
payment of one year's salary upon termination of employment under certain
circumstances. In addition, in the event of the termination of employment
(including termination by Mr. Marks for "good reason") within two years after a
"change in control" of the Company, Mr. Marks will (except if termination is for
cause) be entitled to receive a lump sum payment equal in amount to the sum of
(i) Mr. Marks' base salary and average three-year bonus through the termination
date and (ii) three times the sum of such salary and bonus. In addition, the
Company must in such circumstances continue Mr. Marks' then current employee
benefits for the remainder of the term of the employment agreement. In no case,
however, may Mr. Marks receive any payment or benefit in connection with a
change in control in excess of 2.99 times his "base amount" (as that term is
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code")).
The Company has entered into an employment agreement, as amended to
date, with Mr. Richard Marks pursuant to which he is employed full-time as the
Company's President and Chief Operating Officer. The agreement expires in
September 2000 and provides for an annual base salary of $400,000. The Company's
Board of Directors also may grant bonuses or increase the base salary payable to
Mr. Marks. In addition to his cash compensation, Mr. Marks receives an
automobile allowance and other benefits, including those generally provided to
other employees of the Company. The agreement further provides for a severance
payment of one year's salary upon termination of employment under certain
circumstances. In addition, in the event of the termination of employment
(including termination by Mr. Marks for "good reason") within two years after a
"change in control" of the Company, Mr. Marks will (except if termination is for
cause) be entitled to receive a lump-sum payment equal in amount to the sum of
(i) Mr. Marks' base salary and average three-year bonus through the termination
date and (ii) three times the sum of such salary and bonus. In addition, the
Company must in such circumstances continue Mr. Marks' then current employee
benefits for the remainder of the term of the employment agreement. In no case,
however, may Mr. Marks receive any payment or benefit in connection with a
change in control in excess of 2.99 times his "base amount" (as that term is
defined in Section 280G of the Code).
The Company has entered into an employment agreement, as amended to
date, with Mr. Steven Kratz pursuant to which he is employed full-time as the
Company's Vice President - Operations. The agreement expires in September 1999
and provides for an annual base salary of $225,000. The Company's Board of
Directors also may grant bonuses or increase the base salary payable to Mr.
Kratz. In addition to his cash compensation, Mr. Kratz has exclusive use of a
Company-owned automobile and he receives additional benefits, including those
that are generally provided to other employees of the Company. Pursuant to the
agreement, Mr. Kratz also has been granted options under the 1994 Stock Option
Plan to purchase (i) 65,000 shares of Common Stock at an exercise price of $6.00
per share, 30,000 of which have been exercised and the remainder of which are
fully vested, and (ii) 35,000 shares of Common Stock at an exercise price of
$10.63 per share, of which 15,000 are exercisable commencing September 1, 1997
and 20,000 are exercisable commencing September 1, 1998.
The Company has entered into an employment agreement, as amended to
date, with Mr. Peter Bromberg pursuant to which he is employed full-time as the
Company's Chief Financial Officer. The agreement expires in September 1998 and
provides for an annual base salary of $145,000. In addition to his cash
compensation, Mr. Bromberg receives an automobile allowance and additional
benefits, including those that are
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<PAGE>
generally provided to other employees of the Company. Pursuant to the agreement,
Mr. Bromberg also has been granted options under the 1994 Stock Option Plan to
purchase (i) 20,000 shares of Common Stock at an exercise price of $6.00 per
share, 5,000 of which have been exercised and the remainder of which are fully
vested, and (ii) 5,000 shares of Common Stock at an exercise price of $10.63,
all of which are fully vested.
In conformity with the Company's policy, all of its directors and
officers execute confidentiality and nondisclosure agreements upon the
commencement of employment with the Company. The agreements generally provide
that all inventions or discoveries by the employee related to the Company's
business and all confidential information developed or made known to the
employee during the term of employment shall be the exclusive property of the
Company and shall not be disclosed to third parties without prior approval of
the Company. The Company's employment agreements with Messrs. Marks and Bromberg
also contain non-competition provisions that preclude each employee from
competing with the Company for a period of two years from the date of
termination of his employment. The Company's employment agreement with Mr. Kratz
contains a non-competition provision which precludes him from competing with the
Company for a period of one year from the date of termination of his employment.
Public policy limitations and the difficulty of obtaining injunctive relief may
impair the Company's ability to enforce the non-competition and nondisclosure
covenants made by its employees.
EXECUTIVE AND KEY EMPLOYEE INCENTIVE BONUS PLAN
In August 1995, the Board of Directors approved the adoption of the
Company's Executive and Key Employee Incentive Bonus Plan (the "Bonus Plan").
The purpose of the Bonus Plan is to provide an incentive for (i) each officer of
the Company elected by the Board of Directors and not excluded by the
Compensation Committee, including the executive officers named in the Summary
Compensation Table, and (ii) each key employee expressly included by the
Compensation Committee (collectively, the "Participants") to achieve substantial
increases in the profitability of the Company in comparison to the Company's
performance in the previous fiscal year by providing bonus compensation tied to
such increases in profitability.
The Bonus Plan is administered by the Compensation Committee, which
has the power and authority to take all actions and make all determinations
which it deems necessary or desirable to effectuate, administer or interpret the
Bonus Plan, including the power and authority to extend, amend, modify or
terminate the Bonus Plan at any time and to change award periods and determine
the time or times for payment of bonuses. The Compensation Committee establishes
the bonus targets and performance goals and establishes any other measures as
may be necessary to meet the objectives of the Bonus Plan.
No bonuses will be awarded under the Bonus Plan unless the earnings
before interest and taxes, exclusive of extraordinary items, of a fiscal year
exceeds such earnings for the prior fiscal year by at least 20%. Under the Bonus
Plan, Participants are grouped into four classes, with each class having a
different range of bonus payments for achieving specified targets of such
earnings. The maximum bonus payments, payable in the event that such earnings
for a fiscal year exceed such earnings for the prior fiscal year by 40%, range
among the groups from 27% to 50% of base salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal 1997 were,
until August 4, 1996, Messrs. Rosenzweig, Moskowitz, M. Marks (an officer of the
Company) and R. Marks (also an officer of the Company) and, thereafter, Messrs.
Rosenzweig, Moskowitz and Joffe. No member of the Compensation Committee has a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity. In October 1996, pursuant to a
three-year consulting agreement entered into by the
5
<PAGE>
Company and Mr. Joffe (as described below), Mr. Joffe was granted options to
purchase 15,000 shares of Common Stock at an exercise price of $13.44 per share
as compensation for financial advisory and consulting services thereunder.
COMPENSATION OF DIRECTORS
Each of the Company's non-employee directors receives annual
compensation of $10,000, is paid a fee of $2,000 for each meeting of the Board
of Directors attended and $500 for each meeting of a Committee of the Board of
Directors attended and is reimbursed for reasonable out-of-pocket expenses in
connection therewith.
The Company's 1994 Non-Employee Director Stock Option Plan (the
"Non-Employee Director Plan") provides that each non-employee director of the
Company will be granted thereunder ten-year options to purchase 1,500 shares of
Common Stock upon his or her initial election as a director, which options are
fully exercisable on the first anniversary of the date of grant. The exercise
price of the option will be equal to the fair market value of the Common Stock
on the date of grant. The Non-Employee Director Plan was adopted by the Board of
Directors on October 1, 1994, and by the shareholders in August 1995, in order
to attract, retain and provide incentive to directors who are not employees of
the Company. The Board of Directors does not have authority, discretion or power
to select participants who will receive options pursuant to the Non-Employee
Director Plan, to set the number of shares of Common Stock to be covered by each
option, to set the exercise price or period within which the options may be
exercised or to alter other terms and conditions specified in such plan. To
date, options to purchase 4,500 shares of Common Stock, at an exercise price of
$8.125 per share, have been granted under the Non-Employee Director Plan, none
of which has been exercised.
In addition, the Company's 1994 Stock Option Plan provides that each
non-employee director of the Company receive formula grants of stock options as
described below. Each person who served as a non-employee director of the
Company during all or part of a fiscal year (the "Fiscal Year") of the Company,
including March 31 of that Fiscal Year, will receive on the immediately
following April 30 (the "Award Date"), as compensation for services rendered in
that Fiscal Year, an award under the Stock Option Plan of immediately
exercisable ten-year options to purchase 1,500 shares of Common Stock (a "Full
Award") at an exercise price equal to the fair market value of the Common Stock
on the Award Date. Each non-employee director who served during less than all of
the Fiscal Year is awarded one-twelfth of a Full Award for each month or portion
thereof that he or she served as a non-employee director of the Company. As
formula grants under the Stock Option Plan, the foregoing grants of options to
directors are not subject to the determinations of the Board of Directors or the
Compensation Committee.
In September 1995, the Company entered into a three-year consulting
agreement with Selwyn Joffe, a director of the Company, pursuant to which Mr.
Joffe is to provide certain financial advisory and consulting services to the
Company. The agreement provides that Mr. Joffe receive, on that date and on each
of the next two anniversaries of that date, subject to his continuing
performance under the consulting agreement as compensation for his services
thereunder, a one-time grant of immediately exercisable options to purchase
15,000 shares of Common Stock at an exercise price equal to the fair market
value of the Common Stock. Accordingly, in September 1995, Mr. Joffe was granted
ten-year options to purchase 15,000 shares of Common Stock at an exercise price
of $13.125 per share. Further in accordance with the consulting agreement, in
October 1996, Mr. Joffe was granted ten-year options to purchase 15,000 shares
of Common Stock at an exercise price of $13.44 per share.
6
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 21, 1997, certain
information as to the Common Stock ownership of each of the Company's directors,
each of the officers included in the Summary Compensation Table below, all
executive officers and directors as a group and all persons known by the Company
to be the beneficial owners of more than five percent of the Company's Common
Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Shareholder Beneficial Ownership(1) of Class
- ------------------------- ----------------------- --------
<S> <C> <C>
Mel Marks 764,411 15.1%
c/o Motorcar Parts & Accessories, Inc.
2727 Maricopa Street
Torrance, CA 90503
Richard Marks 563,122(2) 11.1%
c/o Motorcar Parts & Accessories, Inc.
2727 Maricopa Street
Torrance, CA 90503
Gary J. Simon(3) 253,714 5.0%
c/o Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, NY 10036
Steven Kratz 50,000(4) (9)
c/o Motorcar Parts & Accessories, Inc.
2727 Maricopa Street
Torrance, CA 90503
Peter Bromberg 30,900(5) (9)
c/o Motorcar Parts & Accessories, Inc.
2727 Maricopa Street
Torrance, CA 90503
Mel Moskowitz 6,500(6) (9)
6963 Queen Ferry Circle
Boca Raton, FL 33496
Murray Rosenzweig 17,500(6) (9)
24 Northwood Lane
Boynton Beach, FL 33436
7
<PAGE>
Name and Address Amount and Nature of Percent
of Beneficial Shareholder Beneficial Ownership(1) of Class
- ------------------------- ----------------------- --------
Selwyn Joffe 35,150(7) (9)
c/o Eatertainment LLC
8619 Sunset Boulevard
Los Angeles, CA 90069
Directors and executive 1,467,583(8) 28.1%
officers as a group
(7 persons)
</TABLE>
- ------------------
(1) The listed shareholders, unless otherwise indicated in the footnotes below,
have direct ownership over the amount of shares indicated in the table.
(2) Includes 25,000 shares issuable upon exercise of currently exercisable
options, 142,857 shares held by The Richard Marks Trust, of which Richard
Marks is a Trustee and a beneficiary, 4,750 shares held by Mr. Marks' wife
and 8,996 shares held by his son.
(3) Gary J. Simon, by virtue of his shared voting and dispositive power as a
Trustee over the shares held by both The Richard Marks Trust and The Debra
Schwartz Trust, may be deemed the beneficial owner of a total of 250,714
shares, representing the aggregate share holdings of the trusts.
(4) Represents 35,000 shares issuable upon exercise of currently exercisable
options and 15,000 shares issuable upon exercise of options exercisable
commencing September 1, 1997 granted under the 1994 Stock Option Plan.
(5) Includes 30,000 shares issuable upon exercise of currently exercisable
options granted under the 1994 Stock Option Plan.
(6) Includes 3,000 shares issuable upon exercise of currently exercisable
options granted under the 1994 Stock Option Plan and 1,500 shares issuable
upon exercise of currently exercisable options granted under the
Non-Employee Director Plan.
(7) Includes 17,750 shares issuable upon exercise of currently exercisable
options granted under the 1994 Stock Option Plan, 15,000 shares issuable
upon exercise of currently exercisable options granted under the 1996 Stock
Option Plan and 1,500 shares issuable upon exercise of currently
exercisable options granted under the Non-Employee Director Plan.
(8) Includes 128,750 shares issuable upon exercise of currently exercisable
options granted under the 1994 Stock Option Plan, 15,000 shares issuable
upon exercise of currently exercisable options granted under the 1996 Stock
Option Plan and 4,500 shares issuable upon exercise of currently
exercisable options granted under the Non-Employee Director Plan.
(9) Less than 1%.
8
<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.
MOTORCAR PARTS & ACCESSORIES, INC.
By: /S/ PETER BROMBERG
----------------------
Peter Bromberg
Chief Financial Officer
Dated: August 11, 1997
9
