-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VXTYdXBULADEH65wOeVsZ6cbupU+R/t14FlcFoYRG65bxMLhTP3cBU7M+eg3FgyY AEfOesICPkUKuc+KP8lgPA== 0000908834-96-000135.txt : 19961106 0000908834-96-000135.hdr.sgml : 19961106 ACCESSION NUMBER: 0000908834-96-000135 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960729 DATE AS OF CHANGE: 19960807 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINISHMASTER INC CENTRAL INDEX KEY: 0000917321 STANDARD INDUSTRIAL CLASSIFICATION: 5190 IRS NUMBER: 382252096 STATE OF INCORPORATION: MI FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23222 FILM NUMBER: 96600537 BUSINESS ADDRESS: STREET 1: 4259 40TH ST SE CITY: KENTWOOD STATE: MI ZIP: 49512 BUSINESS PHONE: 6169497604 10-K/A 1 AMENDMENT NO. 1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A* *Amendment No. 1 to Form 10-K for the fiscal year ended March 31, 1996. [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED MARCH 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO _________ Commission file number 0-23222 FINISHMASTER, INC. (Exact name of registrant as specified in its charter) MICHIGAN 38-2252096 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4259 40th Street, SE, Kentwood, Michigan 49512 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (616) 949-7604 Securities registered pursuant to Section 12(b) of the Act: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED NONE NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK (NO PAR VALUE) (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate market value of the voting stock held by non-affiliates of the Registrant as of July 25, 1996 was $20,492,325. At July 25, 1996, there were outstanding 6,000,000 shares of the Registrant's common stock. Documents Incorporated By Reference NONE PART III Item 10. Directors and Executive Officers of the Registrant. The Board of Directors As of March 31, 1996, the Board of Directors (the "Board") of FinishMaster, Inc. (the "Registrant") was comprised of nine directors: Max A. Coon, Eric L. Cross, Richard G. Johns, Douglas A. Milbury, Gary W. Ross, Vincent Shunsky, Michael J. Siereveld, James F. White, and Ronald P. White. The following table indicates, as of March 31, 1996: (i) the name, principal occupation and business experience of each director of the Registrant, (ii) the period during which each director has served in such capacity, and (iii) the age of each director.
Present Position with the Registrant and Age Served as Director of Name Principal Occupation FinishMaster Since - - - ------------------ ------------------------------------------------------ --- -------------------- Max A. Coon Director and Chairman of the Board of 61 1973 FinishMaster Inc.; President and Chairman of the Board of Maxco, Inc., a Michigan corporation which owned 67.4% of the Registrant's common stock as of March 31, 1996. Eric L. Cross Director and Secretary of FinishMaster, Inc.; 53 1987 Executive Vice President of Maxco, Inc. Richard G. Johns Director of FinishMaster, Inc.; Vice President of 50 1990 Maxco, Inc.; President of Wright Plastic Products, Inc. a wholly owned subsidiary of Maxco, Inc. Douglas A. Milbury Director of FinishMaster, Inc.; President of Story 53 1993 Incorporated, a Lansing, Michigan based management and holding company which is involved in the retail automotive business, automotive leasing and credit life insurance. Gary W. Ross Director of FinishMaster, Inc.; Chairman of Pacific 50 1994 Growth Equities, a San Francisco based securities broker/dealer and investment banking company. Vincent Shunsky Director and Treasurer of FinishMaster, Inc.; Vice 47 1990 President of Finance and Treasurer of Maxco, Inc. Michael Siereveld Director and Senior Vice President of 41 1993 FinishMaster, Inc. James F. White Director, Vice Chairman of the Board and Founder 77 1968 of FinishMaster, Inc., Ronald P. White Director, Chief Executive Officer and President of 46 1993 FinishMaster, Inc.
All of the foregoing directors have been engaged in the principal occupation specified for the previous five (5) years. Messrs. Coon, Cross, Johns, Shunksy and James White are also directors of Maxco, Inc., a Michigan corporation which owned 67.4% of the Registrant's common stock as of March 31, 1996 ("Maxco"). Messrs. Coon and Shunsky are Directors of Medar, Inc., a 20% owned subsidiary of Maxco. Mr. Coon is additionally a director of Spartan Motors, Inc., whose stock is traded on the Nasdaq Stock Market. -2- Ronald P. White is the son of James F. White. Mr. Coon and Mr. Cross are brothers-in-law. There are no other family relationships between any directors or executive officers of the Registrant. The management of the Registrant is under the direction of the Board. The Board held four meetings during the Registrant's fiscal year ended March 31, 1996. James F. White and Gary W. Ross attended fewer than 75% of the meetings of the Board. The Registrant's Articles of Incorporation and By-Laws provide that the directors of the Registrant shall be elected for the term for which they are elected and until their respective successors shall have been elected and qualified, or until their resignation or removal. Generally, directors of the Registrant have been elected to serve 1-year terms. Board Committees The Board of Directors has established an Audit Committee and a Compensation Committee. The Audit Committee, whose members consisted of Messrs. Milbury, Shunsky and Ross for the fiscal year ended March 31, 1996, met two times in the fiscal year ended March 31, 1996. The Audit Committee recommends the annual employment of the Registrant's auditors with whom the Audit Committee will review the scope of audit and non-audit assignments, related fees, the accounting principles used by the Registrant in financial reporting, internal financial auditing procedures and the adequacies of the Registrant's internal control procedures. The Compensation Committee, whose members consisted of Messrs. Cross, Johns and Shunsky for the fiscal year ended March 31, 1996, met four times in such fiscal year to determine executive officer salaries and bonuses. The Compensation Committee also administers the Registrant's stock option plan. Director Compensation In the fiscal year ended March 31, 1996, the non-employee Directors of the Registrant who were not also directors or employees of Maxco or its subsidiaries were paid $1,000 per meeting attended. In such fiscal year, fees were not paid to directors for attendance at committee meetings. Executive Officers The following table sets forth, as of March 31, 1996, the names of the executive officers of the Registrant, their positions, offices and ages: Present Position With the Name Registrant and Principal Occupation Age Ronald P. White.................. President and Chief Executive Officer of FinishMaster, Inc. 46 Michael J. Siereveld............. Senior Vice President of FinishMaster, Inc. 41 Roger A. Sorokin................. Vice President-Finance of FinishMaster, Inc. 55 Christopher R. Banner............ Vice President-Operations of FinishMaster, Inc. 44 Eric L. Cross.................... Secretary of FinishMaster, Inc.; Executive Vice President and 53 Secretary of Maxco, Inc. Vincent Shunsky.................. Treasurer of FinishMaster, Inc.; Vice President of Finance and 47 Treasurer of Maxco, Inc. All of the foregoing officers of the Registrant have been engaged in the principal occupations specified above for the previous five years, except as follows: Roger A. Sorokin was elected Vice President-Finance in April 1993 after serving as Director of Finance since joining the Registrant in 1991. Eric L. Cross was elected Secretary of the Registrant in 1993. From 1985 to present, Mr. Cross has served as the Executive Vice President of Maxco, Inc. -3- Recent Developments At a closing held on July 9, 1996 (the "Closing Date"), LDI AutoPaints, Inc., an Indiana corporation ("AutoPaints"), and Maxco consummated the purchase and sale of all 4,045,000 shares of common stock, without par value ("Common Stock"), of the Registrant which were owned by Maxco (the "Stock Purchase"). The shares purchased and sold in the Stock Purchase represent 67.4% of the total issued and outstanding shares of Common Stock of the Registrant. In accordance with the Purchase Agreement, six (6) individuals executed and delivered their resignations as directors of the Registrant, effective immediately upon the closing of the Stock Purchase (the "Closing"). Simultaneously therewith, certain individuals designated by AutoPaints were elected to the Board of Directors of the Registrant to fill the vacancies created by such resignations. In addition, effective immediately upon the Closing, certain officers of the Registrant who are also officers of Maxco executed and delivered their resignations as officers of the Registrant. The following individuals resigned as directors and/or officers of the Registrant as of the Closing Date (collectively, the "Resigning Directors"): (i) Max A. Coon - Chairman of the Board; (ii) Eric L. Cross - Secretary and Director; (iii) Richard G. Johns - Director; (iv) Vincent Shunsky - Treasurer and Director, (v) Douglas A. Milbury - Director; and (vi) Gary W. Ross - Director. The following individuals have been elected to the Board of Directors of the Registrant to fill the vacancies created by such resignations (collectively, the "Designated Directors"): (a) Andre B. Lacy, (b) Thomas U. Young, (c) Margot L. Eccles, (d) William J. Fennessy and (e) Walter S. Wiseman. The Designated Directors, together with Messrs. Michael J. Siereveld, James F. White and Ronald P. White, constitute the interim Board of Directors of the Registrant following the Stock Purchase. At an organizational meeting held on July 10, 1996 (the "Organizational Meeting"), the interim Board of Directors of the Registrant nominated the existing directors for election at the next annual shareholders' meeting. The Registrant currently plans to recruit one or more additional individuals with relevant industry and/or public company experience to serve as independent directors of the Registrant. Such individuals, if successfully recruited, would join the members of the existing Board of Directors as director-nominees for election at the next annual shareholders' meeting. In addition, at the Organizational Meeting, the Board of Directors of the Registrant elected the following individuals as officers of the Registrant, in part to fill certain vacancies created as a result of the Stock Purchase: Name Office Andre B. Lacy Chairman of the Board and Chief Executive Officer Thomas U. Young Vice Chairman of the Board Ronald P. White President and Chief Operating Officer Michael J. Siereveld Senior Vice President Roger A. Sorokin Vice President - Finance Christopher R. Banner Vice President - Operations William J. Fennessy Treasurer Robert H. Reynolds Secretary At the Organizational Meeting, the Board established an Executive Committee consisting of Andre B. Lacy, Thomas U. Young and Ronald P. White, which committee, in addition to such other duties as may be prescribed from time to time by the Board, shall have and exercise, during intervals between the meetings of the Board, all powers invested in the Board, subject to applicable legal requirements. In addition, the Board appointed all of the members of the Board to the Audit Committee of the Registrant, with Walter S. Wiseman serving as the Chair of such committee. Finally, the Board appointed Margot L. Eccles and Mr. Wiseman to the Compensation Committee, to replace those directors who had previously served on such committee prior to the Stock Purchase, with Ms. Eccles serving as the Chair of such committee. By a letter dated July 22, 1996, Mr. Ronald P. White resigned as a director and as President and Chief Operating Officer of the Registrant. In response to this resignation, the Board of Directors, by a unanimous written consent dated as of July 24, 1996, elected Thomas U. Young President and Chief Operating Officer to hold such office until the next annual meeting of the Board of Directors of the Registrant and until his successor shall be duly chosen and qualified. -4- Item 11. Executive Compensation. The following table summarizes, for the Registrant's last three fiscal years, the compensation of the persons who served as Chief Executive Officer of the Registrant during the fiscal year ended March 31, 1996 and each of the other most highly compensated executive officers of the Registrant who were serving as such at the end of such fiscal year and whose salary and bonus compensation exceeded $100,000 for services rendered in all capacities to the Registrant and its subsidiary (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE Long-Term Annual Compensation Compensation Fiscal Year Name and Ended Securities Underlying All Other Principal Position March 31, Salary($) Bonus($) Option Awards (#)(1) Compensation($)(2) Ronald P. White................ 1996 $155,000 $24,000 25,000 $3,651 Chief Executive Officer 1995 127,000 48,260 --- 3,348 1994 108,000 60,500 19,000 3,042 Michael J. Siereveld........... 1996 $150,000 $22,000 25,000 $3,581 Senior Vice President 1995 110,000 44,000 --- 3,348 1994 93,000 52,000 17,000 2,618 Roger A. Sorokin............... 1996 $92,000 $14,000 12,500 $2,921 Vice President, Finance 1995 79,000 27,650 --- 2,346 1994 --- --- --- --- Christopher R. Banner.......... 1996 $92,000 $15,000 12,500 $2,931 Vice President, Operations 1995 80,132 28,046 --- --- 1994 --- --- --- ---
- - - -------------------- (1) Represents the number of Shares on which options were granted. (2) Represents the Registrant's 20% match of employee deferrals of currently earned income into the 401(k) Employee Savings Plan and a profit sharing contribution made by the Registrant for all of its eligible employees to the 401(k) Employee Savings Plan at the rate of 1% of compensation. -5- The following table sets forth information related to options granted during the fiscal year ended March 31, 1996 to each of the Named Executive Officers to whom options have been granted.
Stock Option Grants in Fiscal Year Ended March 31, 1996 Individual Grants % of Total Options Securities Granted to Exercise Underlying Employees or Base Options in Fiscal Price Expiration Name Granted (#) Year 1996 ($/Sh) Date 5%($)(1) 10%($)(1) ---- ----------- --------- ------ ----- -------- --------- Ronald P. White 25,000 25.1% $11.00 12/22/05 $172,947.50 $438,267.50 Michael J. Siereveld 25,000 25.1% $11.00 12/22/05 $172,947.50 $438,267.50 Christopher J. Banner 12,500 12.6% $11.00 12/22/05 $86,473.75 $219,133.75 Roger A. Sorokin 12,500 12.6% $11.00 12/22/05 $86,473.75 $219,133.75
- - - ------------------- (1) These gains are based upon assumed rates of annual compound stock appreciation of 5% and 10% from the date the options were granted over the full option term. These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on option exercises are dependent upon the future performance of the Shares and overall stock market conditions. There can be no assurance that the amounts reflected on this table will be achieved. The following table sets forth certain information regarding the total number of stock options held by each of the Named Executive Officers, and the aggregate value of such stock options, as of March 31, 1996. None of such stock options had been exercised as of such date.
Aggregated Option Exercises in Fiscal Year Ended March 31, 1996 and Fiscal Year-End Option Values Number of Securities Shares Underlying Value of In-the-Money Acquired on Value Unexercised Options Unexercised Options at Name Exercise (#) Realized ($) at Fiscal Year-End Fiscal Year-End ($)(1) ---- ------------ ------------ ------------------ ---------------------- Ronald P. White --- --- 44,000 $31,500 Michael J. Siereveld --- --- 42,000 29,500 Christopher J. Banner --- --- 22,550 16,300 Roger A. Sorokin --- --- 23,000 22,000
- - - ------------------- (1) Based on the closing price for the Shares on the last business day of the fiscal year ended March 31, 1996, which was $11.50 per share. -6- Compensation Committee Interlocks and Insider Participation For the fiscal year ended March 31, 1996, the Compensation Committee of the Board of Directors (the "Committee") consisted of Eric L. Cross, Richard G. Johns and Vincent Shunsky. Messrs. Cross and Shunsky, although officers of the Registrant in the fiscal year ended March 31, 1996, were also officers and directors of Maxco, were paid by Maxco, and received no compensation from the Registrant. Compensation Committee Report on Executive Compensation Overview and Philosophy The Committee is responsible for developing and making recommendations to the Board with respect to the Registrant's executive compensation policies. In addition, the Committee, pursuant to authority delegated by the Board, determines on an annual basis the compensation to be paid to the Chief Executive Officer and each of the other executive officers of the Registrant. The objectives of the Registrant's executive compensation program are to: _ Support the achievement of desired Registrant performance. _ Provide compensation that will attract and retain superior talent and reward performance. _ Align the executive officers' interests with the success of the Registrant by placing a portion of pay at risk, with payout dependent upon corporate performance. The executive compensation program provides an overall level of compensation opportunity that is competitive with companies of comparable size and complexity. The Committee will use its discretion to set executive compensation where in its judgment external, internal or an individual's circumstances warrant it. Executive Officer Compensation Program The Registrant's executive officer compensation program is comprised of base salary, annual cash incentive compensation, long-term incentive compensation in the form of stock options, and various benefits, including medical and deferred compensation plans, generally available to employees of the Registrant. Base Salary Base salary levels for the Registrant's executive officers are competitively set relative to other comparable companies. In determining salaries the Committee also takes into account individual experience and performance. Annual Incentive Compensation The Registrant's annual incentive program for executive officers and key managers provides direct financial incentives in the form of an annual cash bonus to executives based on the Registrant's ability to create economic value. Economic value is measured by the Registrant's ability to generate a return in excess of the Registrant's cost of capital. Specific individual performance was also taken into account in determining bonuses, including meeting department goals, attitude, dependability, cooperation with co-workers, and creativity or ideas that benefit the Registrant. -7- Stock Option Program The stock option program is the Registrant's long-term incentive plan for executive officers and key employees. The objectives of the program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and shareholder return, and to enable executives to develop and maintain a significant, long-term stock ownership position in the Registrant's Common Stock. The Registrant's stock option plan was adopted by the Registrant's Board of Directors in November 1993 and was ratified by the sole stockholder on November 30, 1993. The stock option plan provides for the grant of both incentive stock options intended to qualify for preferential tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended, and nonqualified stock options that do not qualify for such treatment. The stock option plan authorizes a committee of directors to award executive and key employee stock options. Stock options are granted at an option price equal to the fair market value of the Registrant's common stock on the date of grant, have ten year terms and can have exercise restrictions established by the Committee. A total of 600,000 shares of common stock have been reserved for issuance under the stock option plan. Deferred Compensation The Registrant's employees participate in FinishMaster Inc.'s 401(k) Employee Savings Plan. The 401(k) plan is a "cash or deferred" plan under which employees may elect to contribute a certain portion of their annual compensation which they would otherwise be eligible to receive in cash. The Registrant has agreed to make a matching contribution of 20% of the employees' contributions of up to 6% of their annual compensation. In addition, the Registrant intends to contribute 1% of compensation for each employee, or more or less at the discretion of the Board. Contributions must be made from current or retained earnings of the Registrant. All full time employees of the Registrant or its subsidiary who have completed one year of service are eligible to participate in the plan. Participants are immediately 100% vested in all contributions. The plan does not contain an established termination date and it is not anticipated that it will be terminated at any time in the foreseeable future. Benefits The Registrant provides medical benefits to the executive officers that are generally available to Registrant employees. The amount of perquisites, as determined in accordance with the rules of the Securities and Exchange Commission relating to executive compensation, did not exceed 10% of salary for the fiscal year ended March 31, 1996. Chief Executive Officer Ronald P. White served as the Registrant's Chief Executive Officer in the fiscal year ended March 31, 1996, having first been named to such position in 1988. His base salary for the fiscal year ended March 31, 1996 was $155,000. Mr. White's bonus in fiscal year 1996 was $24,000. The factors discussed under "Annual Incentive Compensation", above, were also applied in establishing the amount of Mr. White's bonus. Significant factors in establishing Mr. White's compensation were the Registrant's ability to create economic value, the development and implementation of the Registrant's acquisition strategy and general business development. The Committee believes Mr. White managed the Registrant well in a challenging business climate and has achieved above-average results in comparison to other comparable companies. TheCompensation Committee of the Registrant for the Fiscal Year Ended March 31, 1996: Eric L. Cross Richard G. Johns Vincent Shunsky -8- [PERFORMANCE GRAPH] COMPARATIVE STOCK PERFORMANCE The graph below compares the cumulative total shareholder return on the Common Stock of the Registrant for the period beginning April 1, 1995 and ending March 31, 1996, with the cumulative total return on the CRSP Total Return Index for the Nasdaq Stock Market (US Companies) (1) and the Nasdaq index of Non-Financial Companies (2) over the same period, assuming the investment of $100 in the Registrant's Common Stock, the Nasdaq U.S. Index and the Nasdaq Non-Financial Index on February 23, 1994, and reinvestment of all dividends. Cumulative Total Return ------------------------------ 2/23/94 3/94 3/95 3/96 Finishmaster, Inc. FMST 100 83 140 105 NASDAQ Stock Market--US INAS 100 94 105 142 NASDAQ Non-Financial INNF 100 94 103 137 - - - ---------------------- (1) The CRSP Total Return Index for the Nasdaq Stock Market (US Companies) is composed of all domestic common shares traded on the Nasdaq National Market and the Nasdaq Small-Cap Market. (2) Nasdaq index of non-financial companies. -9- Item 12. Security Ownership of Certain Beneficial Owners and Management The authorized capital stock of the Registrant as of July 26, 1996 consisted of (i) 10,000,000 shares of common stock, no par value (each a "Share"), of which 6,000,000 Shares were issued and outstanding and 600,000 Shares were reserved for issuance pursuant to outstanding stock options (rights to stock options for an aggregate of 222,025 Shares being outstanding as of March 31, 1996) and (ii) 1,000,000 shares of preferred stock, without par value, of which no shares are outstanding. As of March 31, 1996, Maxco owned beneficially and of record 4,045,000 Shares, representing 67.4% of the total issued and outstanding Shares. Each issued and outstanding Share is entitled to one vote on each matter subject to a shareholder vote. Security Ownership of Certain Beneficial Owners The following table sets forth information as to the beneficial ownership of Shares by each person known to the Registrant, as of March 29, 1996, to own more than 5% of the issued and outstanding Shares.
Amount and Nature of Beneficial Ownership ------------------------------------------------------------------------------------ Name and Address of Sole Voting and Shared Voting and Beneficial Owner Investment Power Investment Power % of Class Maxco, Inc. 4,045,000 0 67.4 1118 Centennial Way Lansing, Michigan 48917 Edgemont Asset Management 365,000 0 6.1 Corporation 140 East 45th Street 43rd Floor New York, New York 10017 Kalmar Investments Inc. 428,000 0 7.1 1300 Market Street, Suite 500 Wilmington, Delaware 19801
-10- Security Ownership of Management The following table sets forth information as of May 31, 1996 with respect to Shares beneficially owned by (i) each director, (ii) each Named Executive Officer (as defined below), and (iii) all directors and executive officers of the Registrant as a group.
Amount and Nature of Beneficial Ownership ------------------------------------------------------------------------------------ Name of Sole Voting and Shared Voting and Beneficial Owner Investment Power Investment Power % of Class Christopher R. Banner...................... 25,400(1) 0 * Max A. Coon................................ 5,000(2) 0(4) * Eric L. Cross.............................. 2,500(3) 0 * Richard G. Johns........................... 2,500(5) 1,000 * Douglas A. Milbury......................... 6,000(6) 0 * Gary W. Ross............................... 36,000(7) 0 * Vincent Shunsky............................ 3,500(8) 0 * Michael J. Siereveld....................... 49,650(9) 350 * Roger A. Sorokin........................... 23,000(10) 0 * James F. White............................. 13,500(11) 1,000 * Ronald P. White............................ 47,500(12) 0 * All directors and officers as a group (11 persons)............................... 214,550 2,350 *
- - - --------------- * Beneficial ownership does not exceed one percent (1%) (1) Includes options for 22,500 Shares, which options are currently exercisable in accordance with their terms. (2) Consists of options for 5,000 Shares, which options are currently exercisable in accordance with their terms. (3) Consists of options for 2,500 Shares, which options are currently exercisable in accordance with their terms. (4) Does not include Shares held by Maxco, of which Mr. Coon is the President and Chairman of the Board and the owner of 22% of its common stock. (5) Consists of options for 2,500 Shares, which options are currently exercisable in accordance with their terms. (6) Includes options for 5,000 Shares, which options are currently exercisable in accordance with their terms. (7) Includes options for 5,000 Shares, which options are currently exercisable in accordance with their terms. (8) Includes options for 2,500 Shares, which options are currently exercisable in accordance with their terms. (9) Includes options for 42,000 Shares, which options are currently exercisable in accordance with their terms. (10) Consists of options for 23,000 Shares, which options are currently exercisable in accordance with their terms. (11) Includes options for 12,500 Shares, which options are currently exercisable in accordance with their terms. (12) Includes options for 44,000 Shares, which options are currently exercisable in accordance with their terms. -11- Item 13. Certain Relationships and Related Transactions Transactions With Management and Beneficial Owners Prior to November 30, 1993, Maxco owned 100% of the outstanding stock of the Registrant and of the Registrant's wholly owned subsidiary, Refinishers Warehouse. In contemplation of the Registrant's initial public offering of its common stock, which became effective on February 23, 1994, the Registrant and Maxco entered into an agreement effective November 30, 1993, whereby Maxco transferred all of the capital stock of Refinishers Warehouse to the Registrant in exchange for 4,299,000 previously unissued shares of the Registrant's common stock. Maxco provided certain services for its subsidiaries, including the Registrant, in the fiscal year ended March 31, 1996. The services included central purchasing of all insurance, including employee benefit coverage, general and automobile liability, property and casualty insurance. While each subsidiary was charged for its pro rata share of the costs of such services in the fiscal year ended March 31, 1996, there has never been a management or service fee charged to any of the subsidiaries by Maxco. The officers of the Registrant who are also officers of Maxco are not compensated by the Registrant. During the period in which Maxco owned shares of common stock of the Registrant, the Registrant from time to time incurred indebtedness to Maxco in connection with the payment of taxes and the Registrant's share of the costs of certain of the above-described services. At March 31, 1996, there was no outstanding indebtedness of the Registrant to Maxco. In addition, Maxco leased during the fiscal year ended March 31, 1996, and continues to lease, a retail store premises to the Registrant at prevailing market rates. Recent Developments In anticipation of the public offering of the Shares, the Registrant entered into an agreement with Maxco for the purpose of defining the relationship between them after the offering (the "Inter-Company Agreement"). This intercompany agreement did not result from arms length negotiations between independent parties. In connection with the Stock Purchase, the Registrant and Maxco terminated, effective July 9, 1996, all agreements existing between them, including without limitation the Inter-Company Agreement. In order allow the Registrant to continue to participate in a certain medical plan for the benefit of its employees, the Registrant and Maxco entered into an agreement, effective as of the Closing Date, which provides for the Registrant's continued participation in such plan until the termination of the agreement on December 31, 1996. See "Recent Developments" under Item 10, above. -12- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FINISHMASTER, INC. By: /s/ Andre B. Lacy Andre B. Lacy Chairman & Chief Executive Officer Date: July 26, 1996 POWER OF ATTORNEY Each person whose signature appears below does hereby make, constitute and appoint Andre B. Lacy and William J. Fennessy, and each of them, as attorney-in-fact to execute in the name and on behalf of each person individually and in each capacity stated below any amendment, exhibit, or supplement to this report making such changes in the report as such attorney deems appropriate. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date 1. Principal Executive Officer /s/ Andre B. Lacy Chairman & July 26, 1996 Andre B. Lacy Chief Executive Officer 2. Principal Financial and Accounting Officer /s/ Roger A. Sorokin Chief Financial Officer July 26, 1996 Roger A. Sorokin 3. A majority of the Board of Directors /s/ Andre B. Lacy Director July 26, 1996 Andre B. Lacy /s/ Thomas U. Young Director July 26, 1996 Thomas U. Young /s/ Margot L. Eccles Director July 26, 1996 Margot L. Eccles /s/ William J. Fennessy Director July 26, 1996 William J. Fennessy /s/ Michael J. Siereveld Director July 26, 1996 Michael J. Siereveld /s/ James F. White Director July 26, 1996 James F. White /s/ Walter S. Wiseman Director July 26, 1996 Walter S. Wiseman
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