10-K405/A 1 d89588a1e10-k405a.txt AMENDMENT NO. 1 TO FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-KA [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: Commission file number: APRIL 30, 2001 0-14939 CROWN GROUP, INC. (Exact name of registrant as specified in its charter) TEXAS 63-0851141 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4040 N. MACARTHUR BLVD., SUITE 100, IRVING, TEXAS (Address of principal executive offices) 75038 (Zip Code) (972) 717-3423 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 par share Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of August 6, 2001 the aggregate market value of the voting stock held by non-affiliates (all persons other than executive officers, directors and holder's of 5% or more of the Registrant's common stock) of the Registrant (4,429,541 shares) was $15,946,348. As of August 6, 2001 there were 6,735,367 shares of the Registrant's common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None. 2 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS The name, age, position and business experience of each executive officer of the Company is set forth under the heading "Executive Officers" in Item 1 of this report. As of August 15, 2001, the Directors of the Company were as follows (including their age, business experience and the period which they have served as a director): EDWARD R. MCMURPHY, age 50, has served as the Company's Chief Executive Officer since July 1984. He has been a director of the Company since its inception in April 1983. From 1979 to June 1986, Mr. McMurphy served as President of Marion Properties, Inc., a real estate development company and former parent of the Company from July 1984 to June 1986. Mr. McMurphy is also a director of Smart Choice Automotive Group, Inc., a 70% owned subsidiary of the Company that sells and finances used vehicles. TILMAN J. FALGOUT, III, age 52, has served as Executive Vice President and General Counsel of the Company since March 1995 and as a director of the Company since September 1992. From 1978 until June 1995, Mr. Falgout was a partner in the law firm of Stumpf & Falgout, Houston, Texas. Mr. Falgout is also a director of Smart Choice Automotive Group, Inc., a 70% owned subsidiary of the Company that sells and finances used vehicles. JOHN DAVID SIMMONS, age 65, has served as a director of the Company since August 1986. Since 1970, he has been President of Simmons & Associates LLC, a real estate development company, and Management Resources LLC, a management consulting firm. GERALD L. ADAMS, age 66, has been an entrepreneur for the past 35 years, starting, developing and operating a number of businesses primarily related to the shipping, trucking, and real estate industries. Mr. Adams currently owns and operates several companies, including (i) Adams Transportation, Inc. (trucking) where he has been President since 1963, (ii) TriRiver Dock, Inc. (stevedoring), where he has been President since 1970, (iii) Adams Ringside, Inc. (restaurant) and Clover Ridge, Inc. (shopping center operator), where he has been President since 1990, and (iv) Clover Ridge Estates, Inc. (residential real estate development), where he has been President since 1998. Mr. Adams has served as a director of the Company since October 1993. GERARD M. JACOBS, age 46, has been Chairman of Huntington AluTech, Inc., a holding company engaged in the aluminum forging industry, since March 1999. From April 1996 to February 1999, Mr. Jacobs was Chief Executive Officer and a director of Metal Management, Inc., a company specializing in scrap metal recycling. From 1983 through 1995, Mr. Jacobs developed resource recovery, landfill and hydroelectric projects for his own account and for the investment banking firm of Russell, Rea & Zappala, Inc., Pittsburgh, Pennsylvania. From 1978 to 1983, Mr. Jacobs practiced securities, corporate and banking law with the law firms of Reed, Smith, Shaw & McClay and Manion, Alder & Cohen, P.C., Pittsburgh, Pennsylvania. Mr. Jacobs has been a director of the Company since September 1994. Mr. Jacobs is also a director of Ceira Technologies, Inc., Costa Mesa, California. ROBERT J. KEHL, age 66, has been an entrepreneur for the past 35 years, starting, developing and operating businesses primarily in the riverboat construction, gaming, riverboat touring and restaurant industries. From 1993 to 2000, Mr. Kehl was President of Kehl River Boats, Inc., a riverboat construction firm. Since 2000, Mr. Kehl has been managing his personal investments. Mr. Kehl has been a director of the Company since September 1994. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, certain officers, and persons who own more than 10% of the outstanding common stock of the Company, to file with the Securities and Exchange Commission reports of changes in ownership of the common stock of the Company held by such persons. Officers, directors and greater than 10% stockholders are also required to furnish the Company with copies of all forms they file under this regulation. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company, during the fiscal year ended April 30, 2001, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% stockholders were complied with. 2 3 ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the compensation paid or accrued by the Company to or on behalf of the Company's Chief Executive Officer and any other executive officer whose salary and bonus, if any, exceeded $100,000 in fiscal 2001 (the "Named Executive Officers"), for the years ended April 30, 2001, 2000 and 1999: SUMMARY COMPENSATION TABLE
Long-Term All Other Annual Compensation Compensation Compensation(1) --------------------------------------- ------------ --------------- Name and Fiscal Other Annual Stock Principal Position Year Salary Bonus Compensation Options -------------------------- ------ -------- -------- ------------ -------- --------------- Edward R. McMurphy 2001 $350,000 $286,639 -- -- $ 13,967 Chairman of the Board, 2000 350,000 650,000 -- -- 12,967 President and Chief 1999 312,500 800,000 -- 400,000 16,900 Executive Officer Tilman J. Falgout, III 2001 $275,000 $165,368 -- -- $ 9,747 Executive Vice President 2000 275,000 375,000 -- -- 8,862 and General Counsel 1999 237,500 425,000 -- 145,000 12,728 Mark D. Slusser 2001 $175,000 $121,270 -- -- $ 7,675 Chief Financial Officer, 2000 175,000 275,000 -- -- 7,234 Vice President Finance 1999 156,250 250,000 -- 115,000 7,732 and Secretary
---------- (1) These amounts include contributions to the Company's 401(k) Plan and certain insurance premiums as follows:
Disability 401(k) Insurance Plan ---------- ------ Edward R. McMurphy 2001 $8,717 $5,250 2000 8,717 4,250 1999 8,525 8,375 Tilman J. Falgout, III 2001 $4,841 $4,906 2000 4,841 4,021 1999 5,811 6,917 Mark D. Slusser 2001 $2,206 $5,469 2000 2,206 5,028 1999 2,207 5,525
SEVERANCE AGREEMENTS In July 1996, the Board of Directors authorized the Company to enter into severance agreements with each of Mr. McMurphy, Mr. Falgout and Mr. Slusser, which agreements provide that in the event of a sale, merger, consolidation, change in control, or liquidation of the Company, or similar extraordinary corporate transaction causing a change in control, each such officer shall be entitled to 2.99 times the annual compensation paid to the executive as well as accelerated vesting of options under the Company's stock option plans. 3 4 STOCK OPTION PLAN In July 1997, the Board of Directors adopted the Company's 1997 Stock Option Plan which was subsequently approved by the stockholders at the 1997 Annual Meeting (the "1997 Plan"). During the fiscal year ended April 30, 2001, no options were granted under the 1997 Plan to any Named Executive Officer. The following table provides certain information concerning each exercise of stock options under the Company's stock option plans during the fiscal year ended April 30, 2001 by the Named Executive Officers, and the fiscal year-end value of unexercised options held by such persons under the Company's stock option plans: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised Shares Options at Fiscal Options at Fiscal Acquired Year-End Year-End on Value Exercisable/ Exercisable/ Name Exercise Realized(2) Unexercisable Unexercisable(1) ---- -------- ----------- ----------------- -------------------- Edward R. McMurphy 25,000 $60,938 625,000 / 50,000 $403,750 / $ -- Tilman J. Falgout, III -- -- 292,500 / 50,000 142,578 / -- Mark D. Slusser -- -- 140,000 / 40,000 67,875 / --
---------- (1) The market value of the Company's common stock on April 30, 2001 was $3.95 per share, and options to purchase 842,500 shares held by the above officers were in-the-money. The actual value, if any, an executive may realize will depend upon the amount by which the market price of the Company's common stock exceeds the exercise price when the options are exercised. (2) Calculated as the amount by which the aggregate fair market value of the optioned shares exceeds the aggregate exercise price on the date of exercise. DIRECTOR COMPENSATION Non-employee directors of the Company receive a $24,000 annual retainer, $2,000 per Board meeting attended in person, and $500 per Committee meeting attended in person. Directors who are also employees of the Company do not receive separate compensation for their services as a director. Pursuant to the 1997 Plan, on the first business day of July in each year, each then serving non-employee director of the Company is automatically granted an option to purchase 2,500 shares of common stock, at an exercise price equal to the fair market value of such stock on the date of grant. Options granted under the 1997 Plan are exercisable for a period of up to ten years. In the event that a director ceases to be a director of the Company for any reason, options granted to the director will generally expire upon the earlier to occur of (1) the tenth anniversary of the date of grant of the option, or (2) ninety days following the date on which such director ceased to be a director. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the fiscal year ended April 30, 2001, Edward R. McMurphy, Chairman of the Board, President and Chief Executive Officer of the Company, served as a member of the Compensation and Stock Option Committee of the Board of Directors. Mr. McMurphy also serves as a Director of Huntington AluTech, Inc., a firm in which Gerard M. Jacobs, a Director of the Company, serves as Chairman. 4 5 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information as of August 15, 2001, with respect to ownership of the outstanding common stock of the Company by (i) all persons known to the Company to own beneficially more than five percent (5%) of the Company's outstanding common stock (whose address is shown), (ii) each director of the Company, (iii) each of the executive officers of the Company named in the Summary Compensation Table, and (iv) all directors and executive officers as a group. Unless otherwise indicated, each person possesses sole voting and investment power with respect to the shares owned by him.
Number of Shares Percent Name Beneficially Owned of Class ---- ------------------ -------- Edward R. McMurphy 1,014,540(1) 13.8% 4040 N. MacArthur Blvd., Suite 100 Irving, Texas 75038 Robert J. Kehl 974,167(2) 14.4% Third St., Ice Harbor Dubuque, Iowa 52004 Tilman J. Falgout, III 721,000(3) 10.3% 4040 N. MacArthur Blvd., Suite 100 Irving, Texas 75038 Gerard M. Jacobs 210,280(4) 3.1% Mark D. Slusser 144,500(5) 2.1% Gerald L. Adams 125,889(6) 1.9% John David Simmons 49,650(7) * All Directors and Executive 3,240,026(8) 41.0% Officers as a Group (7 persons)
---------- * Less than 1%. (1) Includes 625,000 shares subject to presently exercisable stock options. (2) Includes 956,667 shares issued in the name of Kehl River Boats, Inc., of which Mr. Kehl is a principal shareholder. Also includes 17,500 shares subject to presently exercisable stock options. (3) Includes 292,500 shares subject to presently exercisable stock options and 400,000 shares held in a corporation controlled by Mr. Falgout. (4) Includes 2,300 shares held by a corporation controlled by Mr. Jacobs and 17,500 shares subject to presently exercisable stock options. (5) Includes 140,000 shares subject to presently exercisable stock options. (6) Includes 20,000 shares subject to presently exercisable stock options. (7) Includes 47,500 shares subject to presently exercisable stock options. (8) Includes an aggregate of 1,160,000 shares subject to presently exercisable stock options, 402,300 shares held in corporations controlled by certain directors and 956,667 shares issued in the name of Kehl River Boats, Inc. of which a director is a principal shareholder. ITEM 13. RELATIONSHIPS AND RELATED TRANSACTIONS During the fiscal year ended April 30, 2001, the Company paid a consulting firm $81,140, of which John David Simmons, a Director of the Company, is President. The fees were paid in connection with providing certain consulting services to the Company's used car sales and finance businesses. 5 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CROWN GROUP, INC. By: /s/ Mark D. Slusser ------------------------------------------------------------- Mark D. Slusser Chief Financial Officer, Vice President Finance and Secretary (Principal Financial and Accounting Officer) Dated: August 24, 2001 6