<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission File No. 0-25506
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
PST VANS, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0411704
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No).
1901 West 2100 South
Salt Lake City, UT 84119
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: 801-975-2500
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 _____
The number of shares outstanding of Registrant's Common Stock, par
value $0.001 per share, as of May 10, 1996, was 4,209,409 shares.
<PAGE> 2
PST VANS, INC.
INDEX
PART I, FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Condensed Balance Sheets as of
March 31, 1996 (unaudited) and December 31, 1995 1
Condensed Statements of Income (unaudited) for the
Three Months Ended March 31, 1996 and 1995 2
Condensed Statements of Cash Flows (unaudited) for
the Three Months Ended March 31, 1996 and 1995 3
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II, OTHER INFORMATION
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults Upon Senior Securities *
Item 4. Submission of Matters to a Vote of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K 12
* No Information Submitted Under This Caption
<PAGE> 2
PST VANS, INC.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS: (Unaudited)
Cash $104,776,871 $104,249,981
Accounts receivable, net 15,377,528 16,235,574
Receivables from sale of equipment 939,649 -
Deposits 880,012 985,952
Prepaid expenses and other 3,376,451 4,088,996
Inventories and operating supplies 636,058 642,730
-------------- --------------
Total current assets 25,986,569 26,203,233
-------------- --------------
PROPERTY AND EQUIPMENT, net 69,690,186 73,253,423
-------------- --------------
GOODWILL, net 8,816,122 8,884,112
-------------- --------------
OTHER ASSETS, net 370,897 541,362
-------------- --------------
$104,863,774 $108,882,130
============== ==============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Current portion of long-term obligations $141,730,509 $141,109,337
Current portion of capitalized lease obligations 10,906,653 10,736,025
Accounts payable 4,629,875 4,509,834
Current portion of accrued claims payable 4,136,287 3,656,381
Accrued liabilities 3,235,813 3,256,896
------------ ------------
Total current liabilities 24,639,137 23,268,473
------------ ------------
LONG-TERM ACCRUED CLAIMS PAYABLE,
net of current portion 2,362,139 2,321,686
------------ ------------
LONG-TERM OBLIGATIONS, net of current portion 2,532,959 4,031,690
------------ ------------
CAPITALIZED LEASE OBLIGATIONS, net of
current portion 48,861,661 51,655,247
------------ ------------
STOCKHOLDERS EQUITY:
Common stock 4,209 4,209
Additional paid-in capital 49,731,276 49,731,276
Accumulated deficit (23,267,607) (22,130,451)
-------------- -------------
Total stockholders equity 26,467,878 27,605,034
-------------- -------------
$104,863,774 $108,882,130
============== ==============
</TABLE>
See accompanying notes to condensed financial statements
<PAGE> 3
PST VANS, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
<S> <C> <C>
REVENUES $ 38,236,024 $ 36,291,779
------------------------------
COSTS AND EXPENSES:
Salaries, wages and benefits 11,014,236 9,906,495
Purchased transportation 9,130,993 9,075,585
Fuel and fuel taxes 5,588,489 4,552,790
Revenue equipment lease expense 2,153,701 3,515,974
Maintenance 1,893,735 2,019,522
Insurance and claims 2,721,486 1,681,972
General supplies and expenses 1,312,115 1,432,291
Taxes and licenses 903,949 710,453
Communications and utilities 917,725 656,506
Depreciation and amortization 3,355,957 1,130,398
Amortization of goodwill 67,991 67,991
(Gain) loss on disposition of assets (1,009,044) 37,314
------------- ------------
38,051,333 34,787,291
------------- -------------
OPERATING INCOME 184,691 1,504,488
------------- -------------
OTHER INCOME (EXPENSE):
Interest expense (1,364,732) (1,113,157)
Other, net 42,885 52,910
------------- --------------
(1,321,847) (1,060,247)
------------- --------------
(Loss) income before provision for
income taxes (1,137,156) 444,241
PROVISION FOR INCOME TAXES - (88,848)
------------- ---------------
NET (LOSS) INCOME $ (1,137,156) $ 355,393
============== ================
NET (LOSS) INCOME PER SHARE $(0.27) $0.12
=============== ===============
WEIGHTED AVERAGE SHARES OUTSTANDING 4,209,409 2,904,051
=============== =============
</TABLE>
See accompanying notes to condensed financial statements
<PAGE> 4
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (1,137,156) $ 355,393
Adjustments to reconcile net (loss) income to net
cash provided by operating activities -
Depreciation and amortization 3,423,948 1,198,389
Provision for losses on accounts receivable 239,427 236,716
(Gain) loss on sale of property and equipment (1,009,044) 37,314
(Increase) decrease in receivables 321,029 (1,303,809)
Decrease in deposits 105,940 1,905,076
Decrease in prepaid expenses and other 712,545 391,430
(Increase) decrease in inventories and
operating supplies 6,672 (139,200)
(Increase) decrease in other assets, net 170,465 (8,002)
Increase (decrease) in accounts payable 120,041 (443,417)
Increase (decrease) in accrued claims payable 745,883 (260,683)
Decrease in accrued liabilities (21,083) (990,476)
------------ -----------
Total adjustments 4,173,765 623,338
------------ -----------
Net cash flows provided by operating activities 3,036,609 978,731
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (364,500) (108,590)
Proceeds from sale of property and equipment 1,355,299 7,000
------------ -----------
Net cash flows provided by (used in) investing
activities 990,799 (101,590)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (877,559) (1,535,819)
Principal payments on capitalized lease obligations (2,622,959) (805,641)
Decrease in advances from factor - (5,336,289)
Purchase of accounts receivable from factor - (9,063,711)
Proceeds from issuance of common stock, net - 21,678,648
------------ -------------
Net cash flows (used in) provided by
financing activities (3,500,518) 4,937,188
------------- ------------
NET INCREASE IN CASH 526,890 5,814,329
CASH AT BEGINNING OF PERIOD 4,249,981 765,200
------------- ------------
CASH AT END OF PERIOD $ 4,776,871 $ 6,579,529
============ ===========
</TABLE>
<PAGE> 5
See accompanying notes to condensed financial statements
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
------------- ------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid for - Interest $ 1,371,136 $ 1,140,479
Income taxes 62,391 670,515
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Equipment acquired through capitalized
leases obligations - 2,860,831
Common stock issued as payment of
long-term debt - 112,905
</TABLE>
See accompanying notes to condensed financial statements
<PAGE> 6
PST VANS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Financial Information:
The accompanying condensed financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations, although
the Company believes the following disclosures are adequate to make the
information presented not misleading. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. Results of operations
for interim periods are not necessarily indicative of results for a full year.
These condensed financial statements and notes thereto should be read in
conjunction with the Company's financial statements and notes thereto,
included in the Company's Form 10-K for the year ended December 31, 1995.
Note 2. Income Taxes:
Income taxes for the interim periods are based upon the Company's
estimated effective annual tax rates. The Company's effective tax rate
(income tax expense divided by income before income taxes) decreased to
zero for the three months ended March 31, 1996, compared to approximately 20%
for the three months ended March 31, 1995, as a result of the Company not
recording any benefit on its pre-tax loss.
PST Vans, Inc.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Revenues increased by 5.4% to $38.2 million for the three months ended
March 31, 1996 compared to $36.3 million for the three months ended
March 31, 1995. This revenue growth resulted primarily from an increase
in revenue equipment as the average number of tractors increased to 1379
for the three months ended March 31, 1996 compared to 1195 for the three
months ended March 31, 1995. Revenues for the three months ended March 31,
1996, however, were adversely affected by a 2.5% decrease in the average
revenue per loaded mile. Empty miles also increased resulting in net average
revenue per total mile decreasing 2.6% for the three months ended March 31,
1996 compared to the three months ended March 31, 1995. In addition, average
miles per tractor decreased 6.5% between the two periods. Management believes
the decrease in average revenue per total mile and average miles per tractor
was a result of the extreme winter weather conditions in 1996 as well as slower
than anticipated economic conditions in the first quarter of 1996, and an over-
capacity of tractors, that affected the industry generally. As management does
not expect economic conditions and/or the overcapacity of tractors in the
industry to significantly change during the remainder of 1996, management is not
replacing 48 tractors which are at their normal retirement age of three years.
In addition, 172 older trailers have been sold to attain a more efficient
trailer to tractor ratio. Operating costs and expenses were 99.5% of revenues
for the three months ended March 31, 1996, compared to 95.9% of revenues for
the three months ended March 31, 1995. Operating costs and expenses, as a
percent of revenue, were adversely effected by the 2.6% reduction in average
revenue per total mile and the 6.5% decrease in utilization for the three
months ended March 31, 1996, as well as the factors discussed below.
Salaries, wages and benefits increased to 28.8% of revenues for the three
months ended March 31, 1996 compared to 27.3% of revenues for the three months
ended March 31, 1995, due primarily from driver pay changes in October, 1995
and an increase in the percent of total miles driven by Company drivers
compared to independent contractors during the two periods.
Purchased transportation decreased to 23.9% of revenues for the three
months ended March 31, 1996, compared to 25.0% for the three months
ended March 31, 1995, as result of a smaller percent of total miles driven
by independent contractors. Independent contractors are under contract
with the Company and are responsible for their own salaries, wages and
benefits, fuel, maintenance and depreciation. Independent contractor costs
are classified as purchased transportation expenses.
Fuel and fuel taxes increased to 14.6% of revenues for the three months
ended March 31, 1996, compared to 12.5% of revenues for the three
months ended March 31, 1995, as a result of a higher percentage of miles
driven with Company tractors, more adverse winter weather conditions in
1996 and an increase in the cost of fuel. This was offset slightly by an
increase in the fuel efficiency of Company tractors as the Company has
modernized its fleet of tractors. Management expects the cost of fuel to
remain high through the second quarter. In order to reduce the Company's
vulnerability to rapid increases in the price of fuel, the Company has
historically entered into purchase contracts with fuel suppliers from time to
time for a portion of its estimated fuel requirements at guaranteed prices.
(See liquidity and capital resources).
The Company has also implemented fuel surcharges to many of its customers.
Management anticipates that the purchase contracts and fuel surcharge will
help offset some of the increase in the cost of fuel. Revenue equipment lease
expense decreased to 5.6% of revenues for the three months ended March 31,
1996, compared to 9.7% of revenues for the three months ended March 31, 1995,
primarily as a result of the Company reducing the percentage of its tractor
fleet financed through operating leases to 29.1% for the three months ended
March 31, 1996, compared to 62.3% for the three months ended March 31, 1995.
Maintenance decreased to 5.0% of revenues for the three months ended
March 31, 1996, compared to 5.6% of revenues for the three months
ended March 31, 1995, as a result of reduced maintenance costs associated
with a newer tractor fleet. The average age of Company owned tractors
decreased to 1.2 years during the three months ended March 31, 1996 compared
to 1.9 years for the three months ended March 31, 1995.
Insurance and claims increased to 7.1% of revenues for the three months
ended March 31, 1996, from 4.6% of revenues for the three months ended
March 31, 1995 as a result of an increase in the amount of the losses per
accident during the three months ended March 31, 1996 and the number of
small losses compared to the three months ended March 31, 1995.
Also, the Company had favorable claims experience during the three
months ended March 31, 1995. On October 1, 1995, management
increased the training requirements of new drivers and has changed the
driver pay to attract more experienced drivers which management
believes are less accident prone. Management continues to review
accidents to determine what actions may be taken to reduce future claims
costs.
General supplies and expenses decreased to 3.4% of revenues for the three
months ended March 31, 1996 compared to 4.0% of revenues for the three
months ended March 31, 1995 as a result of decreased costs associated
with driver recruiting. In addition, a new computer upgrade was leased
through an operating lease while the previous computer lease was
capitalized and therefore expensed through depreciation and interest costs.
Taxes and licenses increased to 2.4% of revenues for the three months
ended March 31, 1996, compared to 2.0% of revenues for the three
months ended March 31, 1995, primarily as a result of increased costs
associated with a higher trailer to tractor ratio in addition to licensing
equipment with a higher cost.
Communications and utilities increased to 2.4% of revenues for the three
months ended March 31, 1996, compared to 1.8% of revenues for the
three months ended March 31, 1995, primarily as a result of the Company
utilizing "Highway Master" on board communication systems in a larger
portion of its fleet of tractors. The Company began installation of
"Highway Master" systems in June, 1994. The use of the "Highway
Master" system generally enhances the Company's ability to track loads,
service customers and communicate with and monitor drivers.
Gain on disposition of assets increased to 2.6% of revenues for the three
months ended March 31, 1996, compared to a loss of $37,314 for the three
months ended March 31, 1995, as a result of the Company selling 172 of
its older trailers in the first quarter of 1996. The Company anticipates
selling more of its older trailers during the second quarter of 1996 as a
result of the Company reducing the size of its fleet to better meet the
freight demands during 1996, and reducing the trailer to tractor ratio to
attain better efficiency of assets.
Depreciation and amortization increased to 8.8% of revenues for the three
months ended March 31, 1996, compared to 3.1% of revenues for the
three months ended March 31, 1995, as a result of the majority of the
Company's new revenue equipment being financed with capitalized leases.
Interest expense increased to 3.6% of revenues for the three months ended
March 31, 1996, compared to 3.1% of revenues for the three months
ended March 31, 1995 as a result of the majority of the Company's new
revenue equipment being financed with capitalized leases. This increase in
interest expense was offset by a 1.6% decrease in interest expense as a
result of the Company ceasing to discount its accounts receivable to a
factor following its initial public offering of its common stock in March,
1995.
As a consequence of the items discussed above, the Company incurred a
loss before provision for income taxes for the three months ended March
31, 1996 of $1,137,156 compared to income before provision for income
taxes of $444,241 for the three months ended March 31, 1995.
The Company's effective tax rate (income tax expense divided by income
before income taxes) decreased to zero for the three months ended March
31, 1996, compared to 20% for the three months ended March 31, 1995,
as a result of the Company not recording any benefit on its pre-tax loss.
Liquidity and Capital Resources
The Company's sources of liquidity have been funds provided by
operations, leases on revenue equipment and revolving lines of credit.
The Company has a credit facility with the Bank of New York for issuance
of letters of credit up to $9.3 million. As of March 31, 1996, the Company
had used $9.3 million of this facility, principally for letters of credit in
favor of the Company's insurance carrier. As outstanding letters of credit
issued under this credit facility are not renewed, the maximum commitment
available under this credit facility will be reduced by the amount of the
letters of credit that are not renewed. In May, 1995 the Company obtained
an additional $8.0 million working capital line of credit. This line of credit
provides the Company with additional working capital resources. The
Company anticipates that use of the line will be primarily for insurance
related letters of credit as well as providing any short term cash
requirements. As of March 31, 1996 the Company has utilized $3.0 million
of this line of credit for an insurance related letters of credit. Both of the
credit facilities have loan covenants which obligate the Company to
maintain a required level of profitability and cash flow. The Bank
of New York has amended these covenants for periods through and
including December 31,1996, and the Company's other lender waived
these requirements through the maturity of the working capital line of
credit. The Company may be required to seek additional amendments or
waivers in the future based on actual operating results. The Company is in
the process of negotiating an extension of its $8.0 million working capital
line of credit which expired on May 12, 1996. Management believes that
an extension will be obtained with similar terms and conditions.
Net cash provided by operating activities totaled approximately $3.0
million for the three months ended March 31, 1996. Net cash provided by
investing activities (primarily selling of equipment) amounted to $1.0
million for the three months ended March 31, 1996. Net cash
used in financing activities was $3.5 million for the three months ended
March 31, 1996. Payments on debt and capitalized lease obligations was
$3.5 million for the three months ended March 31, 1996.
The Company expects capital expenditures to be approximately $3.0
million in 1996 primarilyfor a computer system and software replacement
and upgrade. For the first three months of 1996, the Company acquired
$0.4 million of new equipment. Future expansion of the fleet will be made
as future economic conditions dictate. Management believes that
commitments available under the Company's lines of credit will be
sufficient to meet the Company's capital requirements through 1996. The
Company's business is capital intensive and will require the Company to
seek additional debt and possibly equity capital to enable the Company to
maintain a modern fleet. Whether such capital will be available on
favorable terms, or at all, will depend on the Company's future operating
results, prevailing economic and industry conditions and other factors over
which the Company has little or no control.
Fuel is one of the Company's most substantial operating expenses. In order
to reduce the Company's vulnerability to rapid increased in the price of
fuel, the Company enters into purchase contracts with fuel suppliers from
time to time for a portion of its estimated fuel requirements at guaranteed
prices. As of March 31, 1996, the Company had entered into various
agreements with fuel suppliers to purchase approximately 48% of its
estimated fuel needs through 1996 at a guaranteed price. Although
this arrangement helps reduce the Company's vulnerability to rapid increases
in the price of fuel, the Company will not benefit from a decrease in the
price of fuel to the extent of its commitment to purchase fuel under
these contracts.
Seasonality
In the trucking industry, revenues generally show a seasonal pattern as
customers reduce shipments during and after the winter holiday season and
its attendant weather variations. Operating expenses also tend to be higher
during the cold weather months, primarily due to poorer fuel economy and
increased maintenance costs.
Inflation
Inflation can be expected to have an impact on the Company's operations.
The effect of inflation has been minimal over the past three years.
PART II, OTHER INFORMATION
INDEX
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Amendment to Bank of New York Credit Facility
10.2 Amendments to Stock Incentive Plan
10.3 Employment Term Sheet -Robert D. Hill
10.4 Employment Term Sheet -Jeffrey L. Theurer
(b) Reports on Form 8-K
None
Signatures
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 thereto duly authorized.
PST Vans, Inc.
Date: May 14, 1996 By: /s/ Kenneth R. Norton
--------------------------
Kenneth R. Norton
Chief Executive Officer
Date: May 14, 1996 By: /s/ Jeffrey L. Theurer
---------------------------
Jeffrey L. Theurer
Chief Financial Officer and
Principal Financial Officer
<PAGE>
EXHIBIT 10.1
FIFTH AMENDMENT TO REVOLVING
LOAN AGREEMENT
This Fifth Amendment to Revolving Loan Agreement (the
Amendment ) is entered into as of the 29th day of March, 1996,
between PST Vans, Inc., a Utah corporation (the Borrower ), and
The Bank of New York (the Bank ).
RECITALS:
A.Borrower and Bank entered into a Revolving Loan Agreement with
Letter of Credit Facility (the Loan Agreement ) dated March 7, 1994
(as amended). In connection with the Loan Agreement, Borrower
made, executed and delivered to Bank a Revolving Promissory Note,
dated March 7, 1994, in the principal amount of $9,500,000 (the
Note ). Also, in connection with the Loan Agreement, and as
security for payment of Borrower s obligations under the Note and
Loan Agreement, Borrower executed a Security Agreement (the
Security Agreement ) dated March 7, 1994, wherein Borrower
granted to Bank a security interest in the Collateral, as defined in the
Security Agreement. The Note, Loan Agreement, Security Agreement
and all other documents executed by Borrower and Bank in connection
with the Loan Agreement are hereafter sometimes referred to
collectively as the Loan Documents .
B.Borrower has requested that Bank modify the terms of the Loan
Agreement with respect to certain financial covenants and that other
changes to the Loan Agreement be made.
C.Bank is willing to modify the terms of the Loan Agreement on the
terms and conditions stated herein.
NOW THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Bank agree as follows:
1.Debt Service Coverage Ratio: Section 5.8(b) of the Loan
Agreement is amended to provide that the debt service coverage ratio
for the quarter ending December 31, 1995, shall be at least .85 to 1.00,
for the quarter ending March 31, 1996, shall be at least .84 to 1.00, for
the quarter ending June 30, 1996, shall be at least .87 to 1.00, for the
quarter ending September 30, 1996, shall be at least .79 to 1.00, and
for the quarter ending December 31, 1996, shall be at least .80 to 1.00.
All other quarterly calculations shall be governed by the minimum ratio
of 1.30 to 1.00 as stated in the Loan Agreement.
2.Fixed Charge Coverage Ratio: Section 5.8 of the Loan Agreement
is amended to provide that the fixed charge coverage ratio for the
quarter ending December 31, 1995, shall be at least 1.05 to 1.00, for
the quarter ending March 31, 1996, shall be at least .99 to 1.00, for
the quarter ending June 30, 1996, shall be at least .97 to 1.00, for the
quarter ending September 30, 1996 shall be at least .87 to 1.00, and for
the quarter ending December 31, 1996, shall be at least .86 to 1.00.
All other quarterly calculations shall be governed by the minimum ratio
of 1.30 to 1.00 as stated in the Loan Agreement.
3. Termination of Commitment: Borrower and Bank
agree that the Commitment under the Loan Agreement shall be deemed
terminated as of the date of this Amendment and Bank shall have no
further obligation to make Advances under the Loan Agreement or
issue any additional Letters of Credit under the Agreement.
4. Excess Letter of Credit Draws: In the event that draws
under a Letter of Credit exceed the amounts that are otherwise due to
the beneficiary thereunder, it is understood and acknowledged that
pursuant to the Loan Documents, Bank has a security interest in the
right and claim of Borrower to have the excess returned to Borrower
and in the event any such excess is returned or paid to Borrower,
Borrower shall immediately forward all such funds to Bank to be either
applied to any outstanding reimbursement obligations with respect to
Letters of Credit or other amounts outstanding under the Agreement or
to be held as security for such obligations that may thereafter accrue.
Nothing in this section shall be deemed to be an acknowledgment by
Borrower or the Bank that any beneficiary is entitled to draw on a
Letter of Credit an amount that is greater than the amount that is owed
at the time to the beneficiary.
5. Borrower Acknowledgments: Borrower hereby
represents, warrants, acknowledges and agrees that, as of the date
hereof: (a) Borrower has no offsets, counterclaims or other claims of
damage or liability against Bank or defenses to payments due under the
Obligations, Borrower, in all events, hereby knowingly and
intentionally waiving, relinquishing and releasing the right to assert or
claim any of the foregoing; (b) Bank is not nor has it been in breach or
default of any of the duties or obligations of Bank under any of the
Loan Documentation, and Borrower fully and knowingly hereby
waives, releases and relinquishes the right to make any claim for the
same; the execution and performance of this Amendment have been
duly authorized pursuant to all necessary corporate authority; and (d)
the recitals set forth above in this Amendment are true. Borrower
further reaffirms its obligations hereunder and all of the Obligations, as
modified hereby. Except as specifically and expressly provided in
writing signed by the Bank, neither this Amendment nor any action
taken in accordance herewith shall constitute a release or waiver of any
obligation or liability of Borrower under the Loan Documentation,
including the Loan Agreement or the Note.
IN WITNESS WHEREOF the parties hereto have caused this Fifth
Amendment to be executed as of the date first written above.
BORROWER: THE BANK:
PST VANS, INC. THE BANK OF NEW YORK
By:______________________ By:___________________
Its:______________________ Its:___________________
<PAGE>
EXHIBIT 10.2
AMENDMENT NO. 2
TO
PST VANS, INC.
STOCK INCENTIVE PLAN
THIS AMENDMENT NO. 2 (the "Amendment"), is executed
effective as of June 22, 1995 by PST Vans, Inc., a Utah corporation (the
"Company").
RECITALS
WHEREAS, the Company has previously adopted the PST Vans,
Inc. Stock Incentive Plan on December 6, 1994 (the "Plan"), and
subsequently amended such plan on March 7, 1995 ("Amendment No. 1")
(the Stock Incentive Plan as amended is hereinafter referred to as the
"Plan"); and
WHEREAS, the Board of Directors approved a further amendment
to the Plan on June 22, 1995 to provide for the grant of NSOs (as defined
in the Plan) to non-employee directors of the Company on annual basis
pursuant to a formula plan intended to qualify under Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934; and
WHEREAS, the Company now desires to document such amendment.
NOW THEREFORE, upon these premises, the Plan is hereby
modified, altered and amended in the following respects only, subject to
the conditions set forth in Sections 2 and 3 below:
1. Amendment. (a) A new Article 17 shall be added to read in its
entirety as follows:
ARTICLE 17 FORMULA AWARD PLAN.
17.1 General.
The provisions of this Article 17 are applicable only to
Options granted to Non-Employee Directors
pursuant to Section 17.2 below (the "Formula Plan"). All other
Options granted to Directors and Key Employees under the Plan
shall be governed by the provisions of Articles 5 and 6.
17.2 Grants.
(a) Initial Grant to Existing Directors. NSOs to
purchase 2,000 Common Shares shall be granted to each person
who is serving as a Non-Employee Director of the Company on
June 22, 1995, the effective date of the amendment to the Plan
pursuant to which this Article 17 was adopted.
(b) Annual Grants. Subject to the limitation in Section
17.12, NSOs to purchase 2,000 Common Shares shall be granted
automatically each year on the date of the Annual Meeting of
Shareholders to each individual who is elected to serve or
continues to serve as a Non-Employee Director of the Company
following such Annual Meeting.
17.3 Option Agreement.
Each Formula Award granted under the Formula Plan shall be evidenced by
a Formula Award Agreement duly executed on behalf of the Company and by
the Non-Employee Director to whom such Formula Award is granted
and dated as of the applicable date of grant. All Formula Awards
granted under the Formula Plan shall be nonstatutory options not
intended to qualify under Section 422 of the Code.
17.4 Formula Award Exercise Price.
The exercise price of the Common Shares subject to each Formula Award
shall be 100% of the Fair Market Value for such Shares on the date the
Formula Award is granted.
17.5 Exercisability.
(a) Except as otherwise set forth in Section 17.7 or 17.13,
a Formula Award granted pursuant to Section 17.2(a) shall vest and
become exercisable in equal annual installments over the remaining
term of the Director with the first installment vesting and becoming
exercisable on the date of the first Annual Meeting of Shareholders
subsequent to the date of grant, and the remaining installments
vesting and becoming exercisable on the date of each subsequent
Annual Meeting of Shareholders thereafter.
(b) Except as otherwise set forth in Section 17.7 or
17.13, a Formula Award granted pursuant to Section 17.2(b) shall
vest and become exercisable in three equal installments in
accordance with the following schedule:
Period of Optionee's Continuous Service as a
Director of the Company Portion of Formula
Award that Is Exercisable
From the date of the first Annual
Meeting of Shareholders subsequent to
the grant of the Formula Award to the
day prior to the second Annual Meeting
of Shareholders subsequent to the grant
of the Formula Award............................33%
From the date of the second Annual
Meeting of Shareholders subsequent to
the grant of the Formula Award to the
day prior to the third Annual Meeting of
Shareholders subsequent to the grant of
the Formula Award...............................67%
From the date of the third Annual
Meeting of Shareholders subsequent to
the grant of the Formula Award to the
expiration of the term of the Formula
Award..........................................100%
(c) Notwithstanding paragraph (a)
or (b) above, an Optionee shall not be able
to exercise any Formula Award granted
under this Article 17 unless six months and
one day have elapsed since the date that the
amendment to the Plan adopting this Article
17 is approved by the shareholders of the
Company. If an Optionee ceases to serve as
a Director for any reason, the Optionee shall
have no rights with respect to that portion of
a Formula Award which is not yet
exercisable in accordance with this Section
17.5 or Section 17.13.
17.6 Method of Payment.
A Formula Award may be exercised, in whole or in part, by giving written
notice of exercise to the Company specifying the number of Common Shares
to be purchased. Such notice shall be accompanied by payment in full of
the purchase price in cash or in Common Shares already owned by the
Optionee as provided by Section 6.2. In addition, payment may also be
made: (i) by delivery (on a form prescribed by the Committee) of an
irrevocable direction to a securities broker approved by the Committee
to sell Common Shares and to deliver all or part of the sales proceeds
to the Company in payment of all or part of the Exercise Price
and any withholding taxes as provided by Section 6.3, or (ii) by the
delivery (on a form prescribed by the Committee) of an irrevocable
direction to pledge Common Shares to a securities broker or lender
approved by the Committee as security for a loan and to deliver all or
part of the loan proceeds to the Company in payment of all or part of
the Exercise Price and any withholding taxes as provide by Section 6.4.
17.7 Term of Formula Awards.
Each Formula Award shall expire five (5) years from its date of grant,
but shall be subject to earlier termination as follows:
(i) If an Optionee's service as a Director terminates for any reason
other than Cause, the Optionee may for a period of one (1)
year after such termination exercise his or her Formula Awards to
the extent, and only to the extent, that such Formula Awards or
portion thereof were vested and exercisable as of the date the
Optionee's service as a Director terminated, after which time the
unexercised portion of any Formula Awards shall automatically
terminate in full.
(ii) If an Optionee's service as a Director terminates for Cause,
the unexercised portion of any Formula Awards granted to the
Optionee hereunder shall immediately terminate in full and no
rights or Options thereunder may be exercised.
This Section 17.7 shall not be construed to extend the term of any Formula
Award or to permit anyone to exercise any Formula Award after the
expiration of its term nor shall it be construed to increase the number
of Common Shares as to which any Formula Award is exercisable from the
amount exercisable on the date of termination of the Optionee's service as
a Director.
17.8 Non-Transferability.
No Formula Award granted hereunder shall be transferable by the Optionee
to whom it was granted otherwise than by will or the laws of descent
and distribution, and a Formula Award may be exercised during the
lifetime of such Optionee only by the Optionee or hisor her guardian
or legal representative.
17.9 Limitation of Rights.
Neither the recipient of a Formula Award under the Formula Plan nor the
recipients's successor or successors in interest shall have any rights
as a shareholder of the Company with respect to any Common Shares
subject to a Formula Award granted to such person until the date of
issuance of a stock certificate for such Common Shares, except as
provided in Article 10.
17.10 Limitation as to Directorship.
Neither the Formula Plan, nor the granting of a Formula Award, nor any
other action taken pursuant to the Formula Plan shall constitute or be
evidence of any agreement or understanding, express or implied, that a
Director has a right to continue as a Director for any period of time
or at any particular rate of compensation.
17.11 Capital Adjustments.
The number and class of shares subject to each outstanding Formula Award,
and the exercise price per share specified in such Formula Award Agree-
ment shall be proportionately adjusted as provided in Article 10 in the
event of any of the capital adjustments described in Article 10.
17.12 Termination of Formula Awards.
Notwithstanding any provision to the contrary, no Formula Award shall be
granted pursuant to Section 17.2 on a date when the number of Common
Shares authorized for issuance pursuant to the Plan and then available
for issuance pursuant to the new Formula Awards is less than the
aggregate number of such Common Shares which would be issuable pursuant to
Formula Awards otherwise required to be granted on such date assuming the
full vesting and exercise of such Formula Awards. In the event Formula
Awards are not granted as a result of the application of this Section
17.12, no Formula Award shall thereafter be granted pursuant to the Plan.
17.13 Change in Control.
In the event that a Change in Control occurs with respect to the
Company, then each outstanding Formula Award granted hereunder shall
become fully exercisable as to all Common Shares subject to the
Formula Award.
17.14 Other Plan Provisions.
All provisions of the Plan not inconsistent with this Article 17 shall
apply to Formula Awards granted to Directors; provided, however, that
the provisions of Article 5, Article 6 and Article 8 shall not apply to
the grant of Formula Awards. In the event of any conflict between a
provision of this Article 17 and a provision in any other section of
the Plan, such provision of this Article 17 shall be deemed to control
with respect to Formula Awards.
17.15 Shareholder Approval.
The provisions of this Article 17 are subject to the approval by the
Company's shareholders of the amendment to the Plan pursuant to
which this Article 17 was adopted within 12 months of the effective
date of such amendment, which was June 22, 1995.
(b) Existing Article 17 is redesignated as Article 18 and all existing
references in the Plan to Article 17 or any of its sections or
subsections (but not including any references to Article 17 or its
sections or subsections in Section 1(a) above) shall be deemed to refer
to Article 18. In addition Article 18 (formerly Article 17)
shall be amended as follows:
(i) Section 18.1 (formerly Section 17.1) shall be amended
to read in its entirety as follows:
"18.1 "Award" means and award of an Option (with or
without a related SAR), a Formula Award, a Restricted
Share or Stock Unit under the Plan."
(ii) Section 18.16 (formerly Section 17.16)) shall be amended
to read in its entirety as follows:
"18.15 "Option" means an
ISO or NSO granted under
the Plan and entitling the
holder to purchase one
Common Share, and where
not inconsistent with the
provisions of Article 17, a
Formula Award granted
pursuant to Article 17."
(iii) Section 18.17 (formerly Section 17.17) shall be amended to
read in its entirety as follows:
"18.17 Participant" means a
Key Employee or Non-
Employee Director who has
received an Award."
(iv) A new Section 18.25 is added to read in its entirety as
follows:
"18.25 "Cause" means the
commission of an act of fraud
or intentional misrepresentation
or an act of embezzlement,
misappropriation or
conversion of assets or
opportunities of the Company
or any direct or indirect
majority-owned subsidiary of
the Company.
(v) A new Section 18.26 is added to read in its entirety as follows:
"18.26 "Formula Award"
means an NSO to purchase
Common Shares granted to a
Non-Employee Director
pursuant to the provisions of
Article 17."
(vi) A new Section 18.27 is added to read in its entirety as
follows:
"18.27 "Formula Award
Agreement" means the written
agreement between the
Company and Optionee
evidencing the grant of a
Formula Award and
containing the terms and
conditions pertaining to the
Formula Award."
(vii) A new Section 18.28 is added to read in its entirety as
follows:
"18.28 "Non-Employee
Director" means a member of
the Board who is not an
employee of the Company.
2. Effectiveness. This Amendment shall become effective as
of June 22, 1995 subject to receipt of shareholder approval within 12 months
of such effective date.
3. Ratification. In all respects, other than as
specifically set forth in Section 1 above, the Plan shall remain unaffected
by this Amendment, the Plan shall continue in full force and effect, subject
to the terms and conditions thereof, and in the event of any conflict,
inconsistency, or incongruity between the provisions of this Amendment and
any provisions of the Plan, the provisions of this Amendment shall in all
respects govern and control.
IN WITNESS WHEREOF, the Company has duly executed this
Amendment effective as of June 22, 1995.
PST VANS, INC.,
a Utah corporation
AMENDMENT NO. 3
TO
PST VANS, INC.
STOCK INCENTIVE PLAN
THIS AMENDMENT NO. 3 (the "Amendment"), is executed
effective as of February 6, 1996 by PST Vans, Inc., a Utah corporation (the
"Company").
RECITALS
WHEREAS, the Company has previously adopted the PST
Vans, Inc. Stock Incentive Plan on December 6, 1994, and subsequently adopted
two amendments to the Stock Incentive Plan (the Stock Incentive Plan, as
amended, is hereinafter referred to as the "Plan");
WHEREAS, the Board of Directors has adopted an amendment
to the Plan to increase the number of shares available for issuance under
the Plan; and
WHEREAS, the Company now desires to document such
amendment.
NOW THEREFORE, upon these premises, the Plan is hereby
modified, altered and amended in the following respects only, subject to
the conditions set forth in Sections 2 and 3 below:
1. Amendment. Article 3 is hereby amended to read in
its entirety as follows:
"ARTICLE 3. LIMITATION ON AWARDS.
The aggregate number of Restricted Shares, Stock Units and
Options awarded under the Plan shall not exceed 370,000. If any
Restricted Shares, Stock Units or Options are forfeited or if any
Options erminate for any other reason before being exercised,
then such Restricted Shares, Stock Units or Options shall again
become available for Awards under the Plan. However, if Options
are surrendered upon the exercise of related SARs, then such
Options shall not be restored to the pool available for Awards.
Any dividend equivalents distributed under the Plan shall not
be applied against the number of Restricted Shares, Stock Units
or Options available for Awards, whether or not such dividend
equivalents are converted into Stock Units. In addition, the
maximum number of Restricted Shares, Stock Units and Options
which may be granted to any single Participant during any one (1)
Award Year is 85,000. The limitations set forth in this Article 3
shall be subject to adjustment pursuant to Article 10. Any
Common Shares issued pursuant to the Plan may be authorized but
unissued shares or treasury shares."
2. Effectiveness. This Amendment shall become effective as of
February 6, 1996 subject to receipt of shareholder approval within 12 months
of such effective date.
3. Ratification. In all respects, other than as specifically
set forth in Section 1 above, the Plan shall remain unaffected by this
Amendment, the Plan shall continue in full force and effect, subject to the
terms and conditions thereof, and in the event of any conflict,
inconsistency, or incongruity between the provisions of this Amendment and
any provisions of the Plan, the provisions of this Amendment shall in all
respects govern and control.
IN WITNESS WHEREOF, the Company has duly executed this
Amendment effective as of February 6, 1996.
PST VANS, INC.,
a Utah corporation
By /s/ Jeffrey L. Theurer
---------------------------
Its: Chief Financial Officer,
Treasurer and Secretary
By: /s/ Jeffrey L. Theurer
----------------------------
Its:Chief Financial Officer,
Treasurer and Secretary
<PAGE>
EXHIBIT 10.3
TERM SHEET
ROBERT D. HILL
Title: President and Chief
Operating Officer
Base Salary: $200,000 per year, to be
reviewed annually
Effective Date: January 1, 1996
Incentive:
Quarterly Payments of $10,000 per 1% of pre-tax profits
rounded to nearest percent (i.e., 1.56% would equal 2%)
Options:
25,000 common shares at $6.250 a share 42,500
common shares at $5,875 a share Additional shares
available as deemed by the Board of Directors
Vesting is over five (5) years at 20% a year.
Car Allowance: $550 per month
Benefits: All existing company benefits
currently in place.
Understanding:
a. This will be a three year contract which will be extended annually
thereafter within sixty (60) days prior notice of the anniversary date
which we have set as January 1.
b. It is also understood that if the company is acquired of, if there is a
change in control, all of your unvested options will immediately
vest.
c. If the company is acquired or there is a change of control in which
you do not remain as an employee, you will receive a one-year
severance consisting of your prior year s base salary and bonus.
This would be in effect whether you leave at your own volition or
are released without cause.
Kenneth R. Norton Robert D. Hill
Chairman and CEO President and COO
<PAGE>
EXHIBIT 10.4
TERM SHEET
JEFFREY L. THEURER
Title:
Secretary/Treasurer, Chief Financial Officer and Director
Base Salary: $100,000 per year
Effective Date: January 1, 1996
Incentive:
Quarterly Payments of $3,333.00 per 1% of pre-tax profits
rounded to nearest percent (i.e., 1.56% would equal 2%)
Options:
Annual consideration as appropriate
Car Allowance: $550 per month
Benefits: All existing company benefits
currently in place.
Understanding:
a. It is understood that if the company is acquired or if there is a
change in control, all of your unvested options will immediately
vest.
b. If the company is acquired or there is a change of control in which
you do not remain as an employee, you will receive a six-month
severance consisting of your prior year s base salary and bonus.
This would be in effect whether you leave at your own volition or
are released without cause.
Kenneth R. Norton Jeffrey L. Theurer
Chairman and CEO Secretary/Treasurer
and CFO
<PAGE>
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<NAME> PST VANS, INC.
<MULTIPLIER> 1000
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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0
0
<COMMON> 4
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<TOTAL-LIABILITY-AND-EQUITY> 104864
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