10-K/A 1 form10ka93001.txt FORM 10-K/A FOR SEPTEMBER 30, 2001 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K/A Amendment X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) --- OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required) For the Fiscal Year Ended September 30, 2001 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-20757 TRAVIS BOATS & MOTORS, INC. (Exact name of registrant as specified in its charter) TEXAS (State or other jurisdiction of incorporation or organization) 74-2024798 (I.R.S. Employer Identification Number) 5000 Plaza on the Lake, Suite 250, Austin, Texas 78746 (Address of principal executive offices) Registrant's telephone number, including area code: (512) 347-8787 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Report on Form 10-K or any amendment to this Report on Form 10-K. _____ The aggregate market value of the voting stock (which consists solely of shares of Common Stock) held by non-affiliates of the Registrant as of December 28, 2001, (based upon the last reported price of $2.00 per share) was approximately $5,879,410 on such date. The number of shares of the issuer's Common Stock, par value $.01 per share, outstanding as of December 28, 2001 was 4,350,527, of which 2,939,705 shares were held by non-affiliates. Documents Incorporated by Reference: Portions of Registrant's Proxy Statement relating to the 2002 Annual Meeting of Shareholders have been incorporated by reference herein (Part III). The Registrant files this amendment to submit data and other financial information which is related to Registrant's Proxy Statement relating to the 2002 Annual Meeting of Shareholders. This includes Part III, Items 10, 11, 12 and 13. Part III, Item 10. ------------------ Directors and Executive Officers of the Registrant -------------------------------------------------- Election of Directors The Company's Bylaws provide that the affairs of the Company shall be conducted by a Board of Directors and empower the Board to increase or decrease the number of directors by resolution adopted by a majority of the Board. The Board in its discretion and in accordance with such authority has therefor fixed its size at seven (7) members. The Board of Directors is divided into three classes, designated as Class A, Class B and Class C. The members of each class of directors serve for staggered three-year terms. Messrs. Walton and Siddons are currently Class C directors and are to stand for re-election at the 2002 annual stockholders' meeting. Messrs. Simpson and Birnbaum are currently Class A directors and will stand for re-election at the 2003 annual stockholders' meeting. Messrs. Spradling, Gurasich and McClendon are currently Class B directors and will stand for re-election at the 2004 annual stockholders' meeting. The Class C directors elected at the 2002 annual stockholders' meeting will hold office until the 2005 annual stockholders' meeting or until such director's successor shall be elected or appointed. The affirmative vote of a plurality of holders of the outstanding shares of Common Stock represented at a meeting at which a quorum is present is required to elect the director nominee. The persons whose names are set forth as proxies in the enclosed form of proxy will vote all shares over which they have control "FOR" the election of the Board of Directors' nominee unless otherwise directed. Although the Board of Directors of the Company does not contemplate that any nominee will be unable to serve, if such a situation should arise prior to the Meeting, the appointed proxies will use their discretionary authority pursuant to the proxy and vote in accordance with their best judgment. The affirmative vote of a plurality of holders of the outstanding shares of Common Stock represented at a meeting at which a quorum is present is required to elect the director nominee. Directors and Executive Officers of the Company The following table sets forth certain information with respect to each director and each executive officer of the Company:
Name Age Position ---- --- -------- Mark T. Walton(1)(2) 50 Chairman of the Board and President Ronnie L. Spradling(1) 58 Executive Vice President--New Store Development and Director Michael B. Perrine 38 Chief Financial Officer, Treasurer and Secretary Joseph E. Simpson(1)(2)(3) 68 Director Robert C. Siddons(1)(2)(3)(4) 59 Director 2 Stephen W. Gurasich, Jr.(3)(4) 53 Director Zach McClendon, Jr.(3)(4) 64 Director Richard Birnbaum(4) 64 Director ------------------------------------------------------------------------------------------------ (1) Member of the Nominations Committee. (2) Member of the Executive Committee. (3) Member of the Audit Committee. (4) Member of the Compensation Committee.
Mark T. Walton has served as President and as a director of the Company since 1980 and as Chairman of the Board since 1995. From 1979 to 1980, Mr. Walton served as the General Manager of the Company's Austin store. Mr. Walton has over 31 years of retail boating experience. Ronnie L. Spradling has served as Executive Vice President of the Company since 1989 and as the Executive Vice President of New Store Development since 1994. Mr. Spradling became a director in 1995. Mr. Spradling previously served as the General Manager of Falcon Marine, Inc. (a subsidiary of the Company), located in Midland, Texas from 1982 to 1988. Mr. Spradling has over 34 years of experience in boat retailing operations. Michael B. Perrine has served as Chief Financial Officer since 1991 and as Treasurer and Secretary of the Company since 1992. From 1986 to 1991, he was employed in the Commercial Banking Division of NationsBank, N.A. Mr. Perrine is responsible for developing and implementing the Company's corporate structure. Joseph E. Simpson has served as a director of the Company since 1979. He served as President and as a director of Capitol Commerce Reporter, Inc., a records research company, from 1986 through 1997. Mr. Simpson is currently an independent investor. Robert C. Siddons has served as a director of the Company since 1979. He has served as President of Frank Siddons Insurance Agency, a family-owned insurance agency, since 1987. In addition, he has served as President of the Texas Builders Insurance Company, a commercial lines insurance company, since 1987. Stephen W. Gurasich, Jr. has served as director of the Company since July, 1996. For over the past 20 years, Mr. Gurasich has served in various capacities, including most recently as Chairman of the Board of GSD&M Advertising, Austin, Texas, an advertising firm, handling such accounts as Southwest Airlines, Wal-Mart, MasterCard, Coors Light and DreamWorks. Zach McClendon, Jr. has served as a director of the Company since July, 1996. Mr. McClendon is the co-founder of the predecessor to SeaArc Marine, Inc., a manufacturer of various types of boats and marine products, and now serves as the Chairman of the Board of its parent company, SeaArk Boats, Inc. In addition, Mr. McClendon serves as the Chairman of the Board of Union Bank and Trust Company, a subsidiary of First Union Financial Corporation, and as Chairman of the Board of Drew Cottonseed Oil Mill, Inc., a manufacturer of polystyrene products. Richard Birnbaum. has served as a director of the Company since May, 2001. Mr. Birnbaum began his career in 1972 at Circuit City Stores, Inc. (NYSE -- CC) and after progressive positions in the corporation, he retired in 2001 as Executive Vice President - Operations. Mr. Birnbaum is currently an independent investor. 3 Part III, Item 11. ------------------ Executive Compensation ---------------------- Compensation of Directors Directors who are not officers and employees of or consultants to the Company receive annual compensation of $10,000, plus $2,000 annually for each committee on which such director serves, excluding the Nominations Committee, for which compensation is not received, and $3,000 per year in the case of the Executive Committee. Directors' expenses for attending meetings are reimbursed by the Company. In addition to the above compensation, Zach McClendon and Stephen Gurasich were each granted stock options in the amount of 10,000 shares on October 1, 2000 at an exercise price of $3.8125 per share and 10,000 additional shares on May 22, 2001 at an exercise price of $2.70 per share. Richard Birnbaum was also granted stock options in the amount of 33,333 shares on May 22, 2001 at an exercise price of $2.70 per share. All of the options were granted in accordance with the company's stock option plan and were granted at market price on the date of the respective grant. All of the shares were fully vested on the date of such grant. Compensation of Executive Officers The following table sets forth certain information with respect to the compensation awarded to, earned by or paid for services rendered to the Company in all capacities during the fiscal years ended September 30, 2001, September 30, 2000 and September 30, 1999, with respect the Company's President, Mr. Walton, the Executive Vice President, Mr. Spradling, and the Chief Financial Officer, Mr. Perrine (collectively, the "Named Executive Officers"). No other executive officers of the Company received annual compensation (including salary and bonuses earned) which exceeded $100,000 during the fiscal year ended September 30, 2001.
Long-Term Compensation Principal Other Securities ---------- Annual Underlying Name Position Fiscal Year Salary Bonus Compensation Options -------- -------- -------- ------------ ---------- Mark T. Walton President 2001 $200,000 $ -0- 43,121(1) 2000 200,000 -0- 43,121(1) 20,000 1999 187,945 40,183 10,780(1) -- Ronnie L. Spradling Executive Vice 2001 $175,000 $ -0- 43,121(1) President 2000 175,000 -0- 43,121(1) 20,000 1999 160,721 40,183 10,780(1) -- Michael B. Perrine Chief 2001 $130,000 $ -0- 23,163(1)(2) Financial 2000 130,000 -0- 21,483(1) 20,000 Officer 1999 130,000 40,183 5,371(1) -- ----------------------------------------------------------------------------------------------------------------- (1) Effective July 1, 1999, the Company entered into Amended and Extended Employment Agreements with Messrs. Walton, Spradling and Perrine. The Employment Agreements expire on June 30, 2002. In consideration of entering into the Employment Agreements the Company agreed to pay the amounts of $129,362; $129,362 and $64,450 to Messrs. Walton, Spradling and Perrine, respectively, as a pre- condition for their execution of the agreements. These amounts paid to Messrs. Walton, Spradling and Perrine are recognized ratably over the 36 month term of the agreements. [see Employment Agreements] (2) Includes vehicle allowance.
Options Granted in Last Fiscal Year The Company did not grant any stock options to the Named Executive Officers during the fiscal year ended September 30, 2001. -4- Stock Option Exercises and Holdings The following table shows information regarding stock option exercises and unexercised options held as of the end of the fiscal year ended September 30, 2001 by the Named Executive Officers.
At September 30, 2001 --------------------- Number of Options Value of In-the-Money Options ----------------- ----------------------------- Options Value Name Exercised Realized Exercisable Unexercisable Exercisable* Unexercisable* ---- --------- -------- ----------- ------------- -------------- -------------- Mark T. Walton 0 0 24,267 16,000 $---0--- $---0--- Ronnie L. Spradling 0 0 50,933 16,000 $---0--- $---0--- Michael B. Perrine 0 0 49,665 17,000 $---0--- $---0--- * Based on closing price of $2.20 on September 28, 2001.
Employment Agreements The Company is the beneficiary of employment agreements with TBC Management, Ltd. (an affiliated partnership of the Company) and each of Mark T. Walton, Ronnie L. Spradling and Michael B. Perrine, providing, among other things, for three-year terms commencing in July 1999 and annual base salaries of $200,000 for Mr. Walton, $170,000 for Mr. Spradling and $130,000 for Mr. Perrine, respectively. In addition, Messrs. Walton, Spradling and Perrine have agreed to contractual confidentiality and noncompete provisions in their respective employment agreements, which will extend beyond termination of their employment for any reason. In the event any of these employees are (i) terminated without "cause", (ii) or if termination is voluntary after a "change in control" as such terms are defined in the employee agreements, such employees will be entitled to payment of their accrued bonus plus approximately three times their annual salary. As a pre-condition to acceptance of the employment agreements, TBC Management, Ltd., made conditional payment to Messrs. Walton, Spradling and Perrine in the amounts of $129,362, $129,362 and $65,450, respectively. The payment amount will be earned by the individuals ratably over the life of the employment agreements. In the event that Messrs. Walton, Spradling or Perrine were to voluntarily terminate their employment with the Company, except in the event of a change in control as defined in the agreements, then such individual shall repay, upon demand, the unearned portion of the conditional payment. The employment agreements also provide that, if the consolidated income of Travis Boats before income tax expenses and non-recurring audit adjustments (the "Pre-tax Income") reflects growth in excess of 20% over the previous fiscal year, Messrs. Walton, Spradling and Perrine will each receive a bonus of 1.5% of the Pre-tax Income. If the Pre-tax Income does not reflect growth of 20%, the bonus for each individual will be determined by the Board of Directors. 5 Part III, Item 12. ------------------ Security Ownership of Certain Beneficial Owners and Management -------------------------------------------------------------- Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the beneficial ownership of the Common Stock as of December 31, 2001 by (i) each director of the Company, (ii) each Named Executive Officer, (iii) each person known or believed by the Company to own beneficially 5% or more of the Common Stock and (iv) all directors and executive officers as a group. Unless otherwise indicated, each person has sole voting and dispositive power with respect to such shares.
Percent Number of Beneficially Name of Beneficial Owner Shares(1)(2)(12) Owned ------------------------ ---------------- ------------ Mark T. Walton(3) 361,735 7.9% E.D. Bohls(4) 330,176 7.2% Robert C. Siddons(5) 312,868 6.9% Ronnie L. Spradling(6) 253,576 5.6% J.E. Simpson Family Partners, L.P. (7) 204,000 4.5% Michael B. Perrine(8) 57,732 1.3% Zach McClendon, Jr.(9) 33,333 * Stephen W. Gurasich(10) 33,333 * Richard Birnbaum(11) 33,333 * SAFECO Resource Series Trust (12) 367,000 8.0% Downtown Associates, L.L.C.(13) 586,100 12.8% Downtown Associates I, L.P. Downtown Associates II, L.P. Downtown Associates III, L.P. Downtown Associates IV, L.P. Downtown Foundations, L.P. Ronald Juvonen All executive officers and directors as a group (eight persons)(14) 1,289,910 28.2% * Less than 1% (1) Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to the shares of Common Stock shown as beneficially owned by them. Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), based on information furnished by the persons listed, and represents the number of shares of Common Stock for which a person, directly or indirectly, through any contract, management, understanding, relationship or otherwise, has or shares voting power, including the power to vote or direct the voting of such shares, or investment power, including the power to dispose or to direct the disposition of such shares, and includes shares which may be acquired upon the exercise of options within 60 days following December 31, 2001. The percentages are based upon 4,524,331 shares outstanding (which includes, as outstanding, shares which may be acquired upon the exercise of options within 60 days following December 31, 2001). Except as otherwise noted below, the address of each holder of 5% or more of the Common Stock is 5000 Plaza on the Lake, Suite 250, Austin, Texas, 78746. (2) Does not include options granted to Mark T. Walton, Ronnie L. Spradling and Michael B. Perrine to purchase 16,000; 16,000 and 17,000 shares of Common Stock, respectively, which are not exercisable within 60 days after December 31, 2001. (3) Includes 24,267 shares subject to options exercisable within 60 days of December 31, 2001, 291,000 6 shares held in a family limited partnership, over which Mr. Walton has sole voting control, and 3,268 shares owned and held in trust for Mr. Walton's children, for which the voting rights reside with Mr. Walton. (4) The address for E.D. Bohls, is P.O. Box 276, Austin, Texas 78767-0276. (5) Includes 20,002 shares held by family trusts over which Mr. Siddons exercises sole voting and investment control. (6) Includes 50,933 shares subject to options exercisable within 60 days of December 31, 2001. (7) The address of J.E. Simpson Family Partners, L.P. is Route 1, Box 136, San Saba, Texas 76877. Sole voting and dispositive power is held by Joseph E. Simpson, General Partner. (8) Includes 49,665 shares subject to options exercisable within 60 days of December 31, 2001. (9) Includes 33,333 shares subject to options exercisable within 60 days of December 31, 2001. (10) Includes 25,333 shares subject to options exercisable within 60 days of December 31, 2001. (11) Includes 33,333 shares subject to options exercisable within 60 days of December 31, 2001. (12) The address of SAFECO Resource Series Trust is 10865 Willows Road, NE, Redmond, WA 98052. SAFECO Resource Trust is a registered investment company for which SAFECO Asset Management Company serves as an investment advisor. SAFECO Corporation is the parent holding company of SAFECO Asset Management Company. The address of SAFECO Asset Management Company is 601 Union Street, Suite 2500, Seattle, WA 98101. The address of SAFECO Corporation is SAFECO Plaza, Seattle, WA 98185. (13) Downtown Associates I, L.P., Downtown Associates II, L.P., Downtown Associates III, L.P., Downtown Associates IV, L.P. and Downtown Foundations, L.P. are collectively referred to as the "Downtown Funds". Sole voting power and dispositive power of is held by Ronald Juvonen, as the Managing Member of Downtown Associates, L.L.C., general partner of the Downtown Funds. The address of the Downtown Funds and Ronald Juvonen is 674 Unionville Road, Suite 105, Kennett Square, Pennsylvania 19348. (14) See Notes (3),(6), (8), (9), (10) and (11). Includes 216,864 shares subject to options exercisable within 60 days of December 31, 2001.
Part III, Item 13. ------------------ Certain Relationships and Related Transactions ---------------------------------------------- Certain Relationships and Related Transactions SeaArk Boats, Inc. In fiscal year 2001, the Company purchased approximately $3.6 million of boats from SeaArk Boats, Inc. ("SeaArk"). SeaArk is wholly-owned by UniGrace, Inc., which in turn is wholly-owned by McClendon Resources. McClendon Resources is wholly-owned by Zach McClendon, a Director of the Company, and his children. Mr. McClendon serves as the Chairman of the Board of SeaArk, UniGrace, Inc. and McClendon Resources. The Company anticipates that the amount of purchases from SeaArk will decrease in the fiscal year 2002 due to SeaArk discontinuing the manufacture of certain types and models of boats previously purchased by the Company. Employment Arrangements. Executive management, store management and corporate administrative employees are employed by TBC Management, Ltd., a Texas limited partnership (the "Partnership"). The Partnership, in turn, has entered into a Management Agreement with the Company and its subsidiaries and invoices each company monthly for management services rendered. The general partner and 1.0% owner of the Partnership is the Company. The sole limited partner and 99.0% owner of the Partnership is TBC Management, Inc. (the "Delaware Company"), a Delaware company wholly owned by Travis Boats. The operations of the Partnership are accounted for on a consolidated basis with those of the Company. The Delaware Company's income results from distributions of the Partnership and is accordingly taxed under Delaware law. These arrangements allow the Company more easily to allocate costs among the various store locations and to allocate franchise taxes. 7 Certain Borrowings. E. D. Bohls, Jesse Cox, Robert D. Siddons, Joseph E. Simpson, Ronnie L. Spradling, and Mark T. Walton, all of whom are stockholders, officers or directors of the Company, have each executed a personal guaranty of certain indebtedness of the Company. It is anticipated that such guaranties will be released upon the earlier of the refinancing of such indebtedness or its repayment. Compensation Committee Interlocks and Insider Participation The Compensation Committee consists of Robert C. Siddons, Steven W. Gurusich, Jr. and Zach McClendon, Jr. Mr. Robert C. Siddons served as the President of the Company from 1979 through 1985. Mr. Zach McClendon, Jr. is an indirect majority owner and the Chairman of the Board of SeaArk Boats, Inc. In fiscal year 2001, the Company purchased approximately $3.6 million of boats from SeaArk, Inc. The Company anticipates that the amount of purchases from SeaArk will decrease in the fiscal year 2002 due to SeaArk discontinuing the manufacture of certain types and models of boats previously purchased by the Company. No member of the current Compensation Committee serves as an executive officer of the Company, or as a director of any entity, an executive officer of which serves on the Compensation Committee or as a director of the Company. [THIS SPACE INTENTIONALLY LEFT BLANK] 8 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Travis Boats & Motors, Inc. Date: February 12, 2002 By: /s/ MARK T. WALTON ------------------------------- Mark T. Walton Chairman of the Board and President [THIS SPACE INTENTIONALLY LEFT BLANK] 9 POWER OF ATTORNEY TO SIGN AMENDMENTS KNOW ALL BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint Mark T. Walton his true and lawful attorney-in-fact and agent for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to the Travis Boats & Motors, Inc. Annual Report on Form 10-K for the year ending September 30, 2001, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully, to all intents and purposes, as they or he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. This Power of Attorney has been signed below by the following persons in the capacities and on the dates indicated. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Title Date Signed ---- ----- ----------- /S/ MARK T. WALTON Chairman of the Board, President and December 28, 2001 ------------------- Director (Principal Executive Officer) Mark T. Walton /S/ MICHAEL B. PERRINE Chief Financial Officer, Secretary and December 28, 2001 ----------------------- Treasurer (Principal Financial and Michael B. Perrine Accounting Officer) /S/ RONNIE L. SPRADLING Executive Vice President-New Store December 28, 2001 ------------------------ Development Director Ronnie L. Spradling /S/ STEVEN W. GURASICH, JR Director December 28, 2001 --------------------------- Steven W. Gurasich, Jr. /s/ ZACH MCCLENDON, JR. Director December 28, 2001 ------------------------ Zach McClendon, Jr. /S/ ROBERT C. SIDDONS Director December 28, 2001 ---------------------- Robert C. Siddons /S/ JOSEPH E. SIMPSON Director December 28, 2001 ---------------------- Joseph E. Simpson /S/ RICHARD BIRNBAUM Director December 28, 2001 --------------------- Richard Birnbaum
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