CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
MARCH 31, 1995 0-11579
TBC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0600670
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4770 Hickory Hill Road
Memphis, Tennessee 38141
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (901) 363-8030
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by 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
25,080,984 Shares of Common Stock were outstanding as of March 31, 1995.
INDEX TO EXHIBITS at page 11 of this Report<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
March 31, December 31,
1995 1994
(Unaudited)
CURRENT ASSETS
Accounts and notes receivable, less
allowance for doubtful accounts
of $7,386 on March 31, 1995
and $7,069 on December 31, 1994:
Related parties $ 22,919 $ 13,557
Other 90,101 88,221
Total accounts and notes receivable 113,020 101,778
Inventories 51,727 39,754
Refundable federal and state income taxes - 383
Deferred federal income taxes 2,085 1,928
Other current assets 2,419 2,482
Total current assets 169,251 146,325
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land and improvements 1,560 1,560
Buildings 8,440 8,438
Equipment 19,057 16,943
Furniture and fixtures 2,130 2,101
Leasehold improvements 600 600
31,787 29,642
Less accumulated depreciation 16,051 15,020
Total property, plant and equipment 15,736 14,622
OTHER ASSETS 9,741 8,735
TOTAL ASSETS $194,728 $169,682
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1995 1994
(Unaudited)
CURRENT LIABILITIES
Outstanding checks, net $ 10,488 $ 4,257
Notes payable to banks 32,099 25,780
Accounts payable, trade 38,328 20,763
Federal and state income taxes payable 2,154 -
Other current liabilities 4,238 4,246
Total current liabilities 87,307 55,046
NONCURRENT LIABILITIES 728 653
STOCKHOLDERS' EQUITY
Common stock, $.10 par value,
shares issued and outstanding -
25,081 on March 31, 1995 and
26,282 on December 31, 1994 2,508 2,628
Additional paid-in capital 9,940 10,391
Retained earnings 94,245 100,964
Total stockholders' equity 106,693 113,983
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $194,728 $169,682
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
1995 1994
NET SALES* $130,343 $133,780
COSTS AND EXPENSES
Cost of sales 118,432 120,963
Distribution 1,927 1,979
Selling and administrative 3,327 3,098
Other (income) expense - net (239) (463)
Total costs and expenses 123,447 125,577
INCOME BEFORE INCOME TAXES 6,896 8,203
PROVISION FOR INCOME TAXES 2,620 3,117
NET INCOME $ 4,276 $ 5,086
Earnings per share $ .17 $ .18
Weighted average number of shares
and equivalents outstanding 25,707 28,514
* Including sales to related parties of $35,846 and $37,640 in the
three months ended March 31, 1995 and 1994, respectively.
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
Common Stock Additional
Number of Paid-In Retained
Shares Amount Capital Earnings Total
Three Months Ended
March 31, 1994
BALANCE, JANUARY 1, 1994 28,377 $2,838 $11,056 $102,656 $116,550
Net income for period 5,086 5,086
Issuance of common stock
under stock option and
incentive plans 16 2 84 - 86
Repurchase and retirement
of common stock (47) (5) (18) (584) (607)
Tax benefit from exercise
of stock options - - 41 - 41
BALANCE, MARCH 31, 1994 28,346 $2,835 $11,163 $107,158 $121,156
Three Months Ended
March 31, 1995
BALANCE, JANUARY 1, 1995 26,282 $2,628 $10,391 $100,964 $113,983
Net income for period 4,276 4,276
Issuance of common stock
under stock option and
incentive plans 3 - 22 - 22
Repurchase and retirement
of common stock (1,204) (120) (476) (10,995) (11,591)
Tax benefit from exercise
of stock options - - 3 - 3
BALANCE, MARCH 31, 1995 25,081 $2,508 $ 9,940 $ 94,245 $106,693
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended March 31,
1995 1994
OPERATING ACTIVITIES
Net income $ 4,276 $ 5,086
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,042 966
Amortization 4 23
Deferred federal income taxes (157) (34)
Changes in operating assets and liabilities:
Receivables (11,270) (18,723)
Inventories (11,973) 3,215
Other current assets 63 50
Outstanding checks, net 6,231 5,774
Accounts payable, trade 17,565 12,052
Federal and state income taxes
refundable or payable 2,540 2,851
Other current liabilities (8) 39
Noncurrent liabilities 75 -
Net cash provided by (used in)
operating activities 8,388 11,299
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,156) (602)
Investment in joint venture (982) -
Other, net - 33
Net cash used in investing activities (3,138) (569)
FINANCING ACTIVITIES
Net bank borrowings (repayments) under
short-term borrowing arrangements 6,319 (10,209)
Issuance of common stock under stock option and
incentive plans 22 86
Repurchase and retirement of common stock (11,591) (607)
Net cash provided by (used in)
financing activities (5,250) (10,730)
Increase (decrease) in Cash and Cash Equivalents - -
CASH AND CASH EQUIVALENTS
Balance - Beginning of period - -
Balance - End of period $ - $ -
Supplemental Disclosures of Cash Flow Information:
Cash paid for - Interest $ 440 $ 224
- Income taxes 237 300
Supplemental Disclosure of Non-Cash Financing
Activity:
Tax benefit from exercise of stock options $ 3 $ 41
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statement Presentation
The consolidated balance sheet as of March 31, 1995, and the
consolidated statements of income, stockholders' equity and cash flows
for the three months ended March 31, 1995 and 1994, have been prepared
by the Company, without audit. It is Management's opinion that these
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial position, results
of operations and cash flows as of March 31, 1995 and for all periods
presented. The results for the periods presented are not necessarily
indicative of the results that may be expected for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
1994 Annual Report.
2. Earnings Per Share
Earnings per share have been computed by dividing net income by
the weighted average number of common shares and equivalents
outstanding. Common share equivalents included in the computation
represent shares issuable upon assumed exercise of stock options, which
would have a dilutive effect in the respective periods. Fully diluted
earnings per share did not significantly differ from primary earnings
per share in the periods presented.
3. Other Assets
Other assets consist of the following (in thousands):
March 31, December 31,
1995 1994
Notes receivable $7,928 $7,900
Intangible assets, net of amortization 831 835
Investment in joint venture 982 -
$9,741 $8,735
The notes receivable totals include a note for $4,897,000 from a
former distributor. The maker of the note was discharged in a
proceeding under Chapter 11 of the Bankruptcy Code in 1991. The Company
received distributions totaling $290,000 from the bankruptcy proceeding.
The Company holds written guarantees of the distributor's account,
absolute and continuing in form, signed by the principal former owners
and officers of the distributor and their wives, upon which the Company
filed suit in 1989. The defendants have pleaded various defenses based
on, among other things, an alleged oral cancellation of the guarantees.
The defendants have also filed a third party complaint against the
Company's former chief executive officer in which they claim the right
to recover against him for any liability they may have to the Company.
The Company believes, on the basis of applicable Tennessee law, that
those defenses are invalid and that there is no merit to the third party
complaint. In October 1994, the Court granted the Company's motion to
exclude evidence of any oral cancellation of the guarantees. The
Court's order has been appealed and no date for trial has been
scheduled. The Company knows of no reason to believe that the
defendants will be unable to pay any judgment that may be entered
against them in the action.
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ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Condition
The Company's financial position and liquidity remain strong. Stock
repurchases during the current quarter led to a decline in working capital,
from $91.3 million at December 31, 1994 to $81.9 million at March 31, 1995.
Current accounts and notes receivable increased by $11.2 million and
inventories increased by $12.0 million during the current quarter, due
principally to seasonal fluctuations. Other assets increased $1.0 million
due to the Company's investment in a joint venture in Mexico. The
composite total owed to banks and vendors, in the form of outstanding
checks, notes payable to banks and accounts payable, increased by $30.1
million from December 31, 1994 to March 31, 1995. This increase, together
with cash generated from operations, enabled the Company to fund the above-
noted increases in receivables and inventories, as well as the repurchase
of 1.2 million shares of common stock and normally recurring capital
expenditures during the first three months of 1995.
Results of Operations
Net sales decreased 2.6% during the first quarter compared to the
year-earlier level. Sales of tires accounted for approximately 88% of
total sales in the first quarter of both 1995 and 1994. Unit tire volume
declined 6.5% compared to the unusually high level experienced in the prior
year first quarter. The average tire sales price increased 4.3% in the
current quarter compared with the year-earlier level, due primarily to the
effect of industry price increases.
Cost of sales as a percentage of net sales increased from 90.4% in the
first quarter of 1994 to 90.9% in the current quarter, due to the combined
effects of higher net product costs from suppliers and an increase in
shipments to customers directly from manufacturers rather than through the
Company's distribution facilities.
Distribution expenses decreased 2.6% in the current quarter compared
to the year-earlier level due to reduced operating expenses.
Selling and administrative expenses increased $229,000 from the level
in the first quarter of 1994, due principally due to increased expenses
connected with the Company's retirement plans.
Net other income was lower in the first quarter of 1995 compared to the
year-earlier level, due largely to increased interest expenses associated
with higher interest rates and bank borrowing levels.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Index to Exhibits
(b) No reports on Form 8-K were filed during the three months
ended March 31, 1995.
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SIGNATURE
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 thereunto duly authorized.
TBC CORPORATION
April 24, 1995 By /s/ Ronald E. McCollough
Ronald E. McCollough
Senior Vice President Operations
(principal accounting and
financial officer)
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INDEX TO EXHIBITS
Located at
Sequentially-
Exhibit No. Description Numbered Page
(10) MATERIAL CONTRACTS:
Management Contracts and Compensatory Plans
or Arrangements
10.1 Executive Employment Agreement, between the Company
and Mr. Louis S. DiPasqua, amended and restated
as of January 31, 1995 .............................. 12
10.2 Executive Consulting Agreement between the Company
and Mr. Marvin E. Bruce, dated January 1, 1995 ...... 29
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Exhibit 10.1
Restated
LOUIS S. DiPASQUA
TBC CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT was entered into as of February 18, 1991, between
TBC CORPORATION, a Delaware corporation (the "Company"), and LOUIS S.
DiPASQUA, who resides at 2500 Johnson Road, Germantown, Tennessee 38139
(the "Executive"), and was later amended by an Amendment dated July 23,
1992, and by an Amendment effective as of January 20, 1994.
The Company and the Executive have now agreed to further amend this
Agreement in certain respects, effective January 31, 1995.
In addition, for ease of reference, the Company and the Executive
desire to restate this Agreement to incorporate the new amendments and all
prior amendments which still remain in effect and to reflect the text of this
Agreement as in effect on January 31, 1995.
NOW, THEREFORE, the Company and the Executive hereby agree that the
following provisions represent the text of the Executive Employment
Agreement, between the Company and the Executive, as in effect on January 31,
1995:
Section 1. Term of Employment. The Company hereby agrees to employ
the Executive, and the Executive hereby agrees to continue in the employ of
the Company, for a period commencing upon the date of this Agreement and
terminating on the later of January 31, 1998, or two (2) years after the
occurrence of a Change in Control of the Company in the event a Change in
Control of the Company shall have occurred on or prior to January 31, 1998.
Section 2. Position and Duties. A. During the term of employment,
the Company shall employ the Executive as, and the Executive shall serve as,
President and Chief Executive Officer or in such other executive capacity as
the Company shall reasonably request.
B. The Executive shall devote his full-time efforts to the business
and affairs of the Company and shall perform his duties as an executive
officer, or in such other executive capacity as the Company shall reasonably
request, faithfully, diligently and to the best of his ability and in
conformity with the policies of the Company and under and subject to such
reasonable directions and instructions as the Board of Directors may issue
from time to time.
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Section 3. Salary. The Company shall pay the Executive a salary
of not less than $418,000 per year in approximately equal installments in
accordance with the normal pay schedule for officers of the Company. In
the event the Board of Directors of the Company shall at any time or times
after the date hereof increase the Executive's salary, then the Executive's
salary under this Agreement for any period after any such increase shall be
not less than the last amount to which the Board increased the salary of
the Executive.
Section 4. Deferred Compensation. A. The Executive may elect to
defer payment of all or a specified part of the salary and other
compensation payable for the Executive's services by executing an Election
(the "Election") in a form prescribed by or acceptable to the Company and
delivering the same to the Secretary of the Company. The Election shall be
effective as of the first day of the next succeeding calendar year and shall
apply only to compensation payable for services rendered on or after the
effective date of the Election. The Election shall remain in effect until
terminated or changed as provided in this Agreement.
B. The Executive may terminate any Election relating to future
services by giving written notice of termination to the Secretary of the
Company. The Executive may change any Election relating to future services
by executing a revised Election and delivering such Election to the
Secretary of the Company. Any such termination or change in the amount or
part to be deferred shall be effective only with respect to compensation
payable for services on or after the first day of the next succeeding
calendar year.
C. The Company shall establish and maintain a deferred
compensation account on its books in the name of the Executive in which
shall be recorded the amount of the Executive's deferred compensation. The
Company shall credit to the deferred compensation account, on a daily
basis, interest on the amount then credited to such account (including all
previous credits to such account by operation of this Paragraph C) computed
at an annual rate which is equal to the composite bond yield for Single A
bonds, rounded to the nearest 1/10 of 1%, as published in the Standard &
Poor's Corporate and Government Bond Yield Index (or such similar index as
the Compensation Committee of the Board of Directors of the Company shall
select) for the month last preceding the beginning of the then current
calendar quarter.
D. All amounts and assets credited to or held in the deferred
compensation account referred to in Section 4.C. of this Agreement
("Credited Amounts") shall be paid as follows:
1. If the Executive's employment with the Company is terminated
for any reason, including his death or disability, the Company shall pay
the Credited Amounts or the fair market value thereof, as of the date of
such termination, wholly or partly in cash or in kind, to the Executive,
or, in the event of
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his death, to his designated beneficiary or beneficiaries or his estate, as
the case may be, on or before a day fourteen (14) days after the date of
such termination; provided, however, that if such termination occurs on or
after August 31 in any year and the Executive is then living, then and in
that event, the Company shall make such payment on the earlier of (i) the
first business day of the following calendar year or (ii) in the event of
his earlier death, on or before a day fourteen (14) days after the date of
his death.
2. The beneficiary or beneficiaries referred to in this
paragraph may be designated or changed by the Executive (without the consent
of any prior beneficiary) by a writing delivered to the Company before his
death. If there shall be no designated beneficiary who shall survive the
Executive as to all or any part of the Credited Amounts, the same (or its
fair market value) shall be paid to the Executive's estate.
E. The deferred compensation account shall be solely a memorandum
account, and title to and beneficial ownership of any amounts credited
thereto shall at all times remain in the Company. The effect of this Section
4 is simply to create an unfunded and unsecured promise to pay deferred
compensation to the Executive, his estate or his beneficiaries, in accordance
with the terms of this Agreement. Nothing contained therein and no deferral
of compensation pursuant thereto shall by itself create or be construed to
create a trust of any kind, or a fiduciary relationship of any kind regarding
the deferred compensation between the Company and the Executive, his estate
or any beneficiary of the Executive or any other person. No right or benefit
under this Agreement shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same shall be void.
Section 5. Other Benefits. In addition to the salary and deferred
compensation payable pursuant to Sections 3 and 4, the Executive shall,
during the term of his employment, participate in the TBC Corporation
Management Incentive Compensation Plan, 1989 Stock Incentive Plan, and in any
other stock option or compensation plan or arrangement adopted by the Company
in addition to, or in lieu of, said plans. The Company shall also, during
the term of the Executive's employment, continue to extend to Executive the
fringe benefits (including, but not limited to, medical, disability and life
insurance, vacation, personal leave, automobile and other similar personal
benefits) which it establishes from time to time for its most highly
compensated executives.
Section 6. Termination of Employment. A. The Executive's
Employment shall terminate upon the death of the Executive, but the Company
shall continue to pay each month for twelve (12) months after the death of
the Executive an amount per month equal to the salary per month (inclusive
of the amount of deferred compensation) that was being paid to the Executive
at
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the time of his death to the person or entity that the Executive shall have
last designated in writing to the Company, or if the Executive shall fail
to designate a person or entity or if the person or entity so designated
shall not be in existence at the time of any payment pursuant to this
Section 6.A., then to the Executive's estate. Nothing in this Section 6.A.
shall in any way limit or restrict any rights or benefits to which the
heirs, legatees or successors in interest of the Executive are entitled
under any plans, insurance or other arrangements referred to in Section 5
hereof in the event of the Executive's death.
B. The Company shall have the right to terminate the Executive's
employment hereunder at any time upon not less than sixty (60) days' advance
written notice to the Executive in the event (i) of such prolonged physical
or mental disability or other condition of the Executive as, in the
reasonable judgment of the Board of Directors, shall render him incapable of
performing the services required of him hereunder; provided, however, that
no disability or condition shall be considered incapacitating unless it has
prevented the Executive from carrying on his duties for a consecutive period
of at least six (6) months; (ii) that the Executive engages in an act or acts
of dishonesty constituting a felony and resulting or intended to result
directly or indirectly in personal gain or enrichment at the expense of the
Company; or (iii) that the Executive shall deliberately and intentionally
refuse in a material way to observe or comply with any of the material terms
or provisions hereof (except by reason of total or partial incapacity due to
physical or mental disability or otherwise); provided further, however,
that the Executive's employment shall not terminate if such disability or
refusal is cured or corrected within the 60-day notice period provided
herein. In addition to any retirement benefits payable to the Executive
under Section 7, in the event Executive's employment is terminated as the
result of disability pursuant to this Section 6.B.(i), the Company shall
continue to pay to the Executive each month for twelve (12) months after
such termination an amount equal to his salary per month (inclusive of the
amount of deferred compensation) at the time of such termination.
C. If a Change in Control of the Company shall occur on or prior to
January 31, 1998, and the employment of the Executive shall terminate during
the period of two (2) years following the Change in Control of the Company,
regardless of whether the Executive resigns or is discharged or otherwise
(except for termination pursuant to the provisions of Sections 6.A. or 6.B.
above), the following shall be applicable:
1. During the remainder of the period specified in Section 1
hereof or for a period of two (2) years after such termination of employment,
whichever is longer, the Company shall continue to pay to the Executive an
amount equal to the salary determined in accordance with the provisions of
Section 3 and shall credit him with an amount equal to the deferred
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compensation determined in accordance with the provisions of Section 4.
2. Beginning on the first day of the month following such
termination of the Executive's employment and on the first day of every month
thereafter during the period of time specified in Section 6.A. above, the
Company shall pay to Executive one-twelfth (1/12) of the sum of any benefits
which the Executive may have been awarded under any incentive compensation
plans of the Company during the last two fiscal years of the Company
preceding the year in which the termination of the Executive's employment
occurred, divided by two.
3. During the time period specified in Section 6.C.1. above,
the Company shall, at its expense, provide to or for the benefit of the
Executive fringe benefits comparable to those provided prior to the Change
in Control of the Company.
4. Any options or stock appreciation rights which the Executive
holds under the 1989 Stock Incentive Plan of the Company (or under any other
option plan of the Company) on the date of the termination of his employment
may be exercised by the Executive with respect to all shares subject to any
such options or rights at any time within ninety (90) days of the Executive's
termination of employment, regardless of whether such options or rights were
exercisable on the date of termination; or at any time within ninety (90)
days after the termination of the Executive's employment, the Executive may,
in lieu of exercising all or any portion of any such option or right, elect
to be paid by the Company in cash the excess of the fair market value of a
Company share (as defined in the 1989 Stock Incentive Plan of the Company)
on the date the election is made (or, if higher, the highest price per
Company share actually paid in connection with the Change in Control of the
Company) over the option price per share times the number of shares then
subject to unexercised options held by the Executive as to which this
election is made, whether or not such options were exercisable on the date of
the termination of the Executive's employment. Any payment required to be
made to the Executive pursuant to the preceding sentence shall be made within
two (2) days of the Executive's election to be paid in cash.
5. Within forty-five (45) days after the end of the fiscal
year in which termination of the Executive's employment occurs, the Company
shall make pro rata awards to the Executive under any incentive compensation
plans of the Company in which he participated which shall be calculated by
multiplying (i) the fraction of which the numerator is the number of full
months worked during such year and the denominator is twelve (12) and (ii)
by the awards which would have been earned (as determined by the
Compensation Committee) if termination had not occurred during such year.
6. If the Executive dies during the period that he is receiving
compensation or fringe benefits pursuant to the
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provisions of Section 6.C.1., 2. or 3., the Company shall continue to make
such payments to the person or entity entitled thereto pursuant to Section
6.A. for the period of time provided in Section 6.C.1. but in no event for
a period of more than twelve (12) months after the Executive's death. If
the Executive dies prior to receiving the payments specified in Section
6.C.5. or prior to exercising his rights under Section 6.C.4., such
payments shall be made at the time they are required to be made hereunder
to the person or entity entitled thereto pursuant to Section 6.A., and such
rights may be exercised during the time the Executive could have exercised
them but for his death by the person or entity entitled thereto pursuant to
Section 6.A.
7. A "Change in Control" of the Company shall, for purposes of
this Agreement, mean any change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as the same is construed by the Securities and Exchange
Commission on the date of execution of this Agreement or in accordance with
any change made with respect to said Item or construction thereof deemed
more favorable by the Executive; provided that, without limitation, such a
Change in Control shall be deemed to have occurred if (i) any "person" (as
such term is defined in Sections 13(d) and 14(d)(2) of the Exchange Act),
other than the Executive and/or any entity then controlled by the Company or
the Executive is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities; (ii) during any period of
two (2) consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were directors at
the beginning of the period; (iii) the Company merges or consolidates with
another corporation and the Company or an entity controlled by the Company or
the Executive immediately prior to the merger or consolidation is not the
surviving entity; or (iv) a sale, lease, exchange or other disposition of
all or substantially all of the assets of the Company takes place.
8. So long as the Executive shall be receiving payments under
Section 6.C.1. above, the Executive shall not engage in any Competitive
Activity. For purpose of this Agreement, "Competitive Activity" shall mean
the Executive's participation, without the written consent of the Company, in
the management of any business operation of any enterprise if such operation
(a "Competitive Operation") engages in substantial and direct competition
with any business operation actively conducted by the Company or its
subsidiaries. "Competitive Activity" shall not include (i) the mere
ownership of securities in any enterprise or (ii) participation in the
management of any
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enterprise or any business operation thereof, other than in connection with
a Competitive Operation of such enterprise.
Section 7. Retirement Benefit. A. The Company shall pay a
Retirement Benefit to or on account of the Executive which, as at any date,
is an amount that, when expressed as a single life annuity, is equal to:
1. an amount, expressed as a single life annuity, determined in
accordance with the provisions of the Retirement Plan for Employees of TBC
Corporation (the "Retirement Plan") as in effect on that date, assuming, for
purposes of this computation, that:
(a) the Executive had earned an additional 28 years and 7
months of Credited Service under the Retirement Plan;
(b) the Executive's Average Monthly Compensation under the
Retirement Plan is an amount determined on the basis of the sum
of the amounts paid to him under Sections 3 and 4 above and
under the TBC Management Incentive Compensation Plan (or any
other compensation plan adopted by the Company in addition to,
or in lieu of, said plan), assuming for this determination that
section 401(a)(17) of the Internal Revenue Code of 1986 (the
"Code") had not been enacted; and
(c) that section 415 of the Code had not been enacted;
reduced by
2. the sum of:
(a) the amount, expressed as a single life annuity, actually
payable to him as of that date under the Retirement Plan; and
(b) the amounts, expressed as single life annuities,
actually payable to him as of that date or previously paid to
him under the terms of the Goodyear Retirement Plan for Salaried
Employees and the Goodyear Supplementary Pension Plan.
The benefit described in this Section 7.A. shall be calculated in the
manner set forth in Exhibit A attached hereto.
B. Payment of the Executive's Retirement Benefit shall be made
monthly and shall commence on the first day of the calendar month next
following the date on which the Executive's employment with the Company is
terminated for any reason; provided, however, that if the Executive's
employment with the Company is terminated under Section 6 above, payment of
his monthly Retirement Benefit shall commence on the first day of the
calendar month next following the first to occur of the date as
-18-<PAGE>
of which the Executive ceases to receive benefits under Sections 6.C.1. and
6.C.2. above or the date of his death.
C. Notwithstanding Section 7.A. above, if the Executive or his
representative so elects (by written notice to the Company not later than
ninety (90) days after the date his Retirement Benefits are to begin under
the provisions of Section 7.B. above), the Executive shall be paid a
Supplemental Retirement Benefit as provided in Section 3 of the Company's
Executive Supplemental Retirement Plan as if the Executive were a Participant
in such Plan and assuming that the Executive had earned an additional 28
years and 7 months of Credited Service under the Retirement Plan, reduced by
the amounts, expressed as single life annuities, actually payable to him as
of that date or previously paid to him under the terms of the Goodyear
Retirement Plan for Salaried Employees and the Goodyear Supplementary
Pension Plan. The Supplemental Retirement Benefit described in this
Section 7.C. shall be paid to Executive in lieu and instead of the amount
provided for in Section 7.A. above and shall be calculated in the manner
set forth in Exhibit B attached hereto.
D. Except as otherwise specifically provided by Section 7.B.
above, the Executive's Retirement Benefit shall be paid in the same form and
for the same period as is the benefit payable to him under the Retirement
Plan. In determining the actuarial equivalency of any Retirement Benefit
payable hereunder, the actuarial rates and assumptions set forth in the
Retirement Plan shall be utilized.
Section 8. Compensation from Other Employment. Any compensation
payable to the Executive pursuant to the provisions of Section 6 shall be
reduced by any amounts of compensation earned or received by the Executive
from any other employer for services rendered during the period for which
such payments by the Company are to be made thereunder.
Section 9. Limitation on Payments. A. Sections 280G and 4999 of
the Internal Revenue Code (the "Code") impose a 20% excise tax on excessive
compensation received by, and deny a deduction to the Company for the amount
of excess compensation paid to, employees who are officers, shareholders or
highly compensated individuals as a result of a change in the ownership or
effective control of the Company or in the ownership of a substantial
portion of the Company's assets. In general, payments to an individual that
are contingent on a Change in Control will not be treated as excessive if
such payments do not exceed three (3) times the average annual compensation
received by such individual over the five (5) years preceding the Change in
Control. The provisions that follow are designed to maximize the amounts
payable to the Executive under this Agreement in the event of a Change in
Control, taking into consideration the possible application of the foregoing
Code provisions.
B. Notwithstanding anything in this Agreement to the contrary, in
the event that it is determined that any payment by
-19-<PAGE>
the Company to the Executive or for the Executive's benefit, whether paid
or payable pursuant to the terms of this Agreement or otherwise, would be
taxable because of Section 4999 of the Code, then the aggregate present
value of amounts payable to the Executive or for the Executive's benefit
pursuant to this Agreement shall be reduced to the Reduced Amount unless C.
below applies. For purposes of this subparagraph, the "Reduced Amount"
shall be defined as an amount expressed in present value which maximizes
the amounts payable pursuant to this Agreement without causing any such
payments to be taxable to the Executive because of Section 4999 of the
Code.
C. If the Net After Tax Benefit of all amounts payable to the
Executive pursuant to this Agreement exceeds the Net After Tax Benefit of the
Reduced Amount, then this Section 9 shall not apply to limit any amount
payable to the Executive. "Net After Tax Benefit" means the amount payable
to the Executive or for the Executive's benefit pursuant to this Agreement
(whether the Reduced Amount or the full amounts payable to the Executive
under this Agreement), less the sum of (i) the amount of Federal income taxes
payable with respect to such amounts and (ii) the amount of excise taxes
payable on such amounts pursuant to Section 4999 of the Code, if any. For
purposes of this clause C., Federal income taxes payable in respect of future
payments shall be those prescribed by the Code at the time the calculation
is made for the periods in which the same shall be payable.
D. The initial determination as to whether any reduction in
payments and benefits is necessary in order to comply with B. above and,if
so, the calculation of the Reduced Amount shall be made by the Company and
furnished to the Executive in writing within seven (7) days following the
date of termination of the Executive's employment. The Company's
determination and its calculation of the Reduced Amount will be final and
binding upon the Executive unless the Executive notifies the Company within
eight (8) days after the Executive receives the Company's determination and
calculation that the Executive disputes the same. Within ten (10) days
after the Executive so notifies the Company, the Executive shall deliver to
the Company a statement of the basis for the Executive's opinion as to
whether any reduction in payments and benefits is necessary, pursuant to B.
above and, if so, the Executive's calculation of the Reduced Amount. If,
within ten (10) days after the Company receives such statement, the Company
and the Executive are unable to agree as to whether any reduction is
necessary or as to the calculation of any amounts under this Section 9,
then the Company and the Executive shall, within three (3) days thereafter,
choose a nationally recognized accounting firm to resolve any such dispute.
Such accounting firm's determination shall be made promptly and delivered
to the Company and the Executive within twenty (20) days of its appointment
and shall be final and binding on the parties. All costs incurred in
connection with the accounting firm's determination shall be borne by the
Company.
-20-<PAGE>
E. Within ten (10) days after the date a determination and
calculation of the Reduced Amount becomes final and binding in accordance
with D. above, the Executive may elect which portion of the payments due him
under the Agreement shall be eliminated or reduced to meet such Reduced
Amount (including meeting the Reduced Amount by reducing the present value of
any payment and benefits through deferral of the payment date). If the
Executive does not notify the Company of his election within such ten
(10)-day period, the Company shall have the right to decide how the Reduced
Amount will be met.
F. Pending a final and binding determination and calculation of the
Reduced Amount in accordance with this Section 9, the Executive shall have
the right to require the Company to pay to the Executive all or any
undisputed portion of the Reduced Amount, as determined and calculated by the
Company, that would be then due and payable to the Executive pursuant to this
Agreement. Such payment shall be made by the Company within two (2) days
after the date of receipt of notice from the Executive requesting such
payment.
G. The Company shall pay to the Executive or for the Executive's
benefit that portion of the Reduced Amount which is then due and payable
(less any amount previously paid by the Company pursuant to F. above)
within ten (10) days after receipt of the election by the Executive described
in E. above or, in the absence of such an election, within fifteen (15) days
after the date upon which any determination and calculation of the Reduced
Amount becomes final and binding in accordance with D. above. The balance of
the Reduced Amount shall be paid promptly as the same becomes due and payable
under this Agreement.
H. In the event that the Internal Revenue Service or a court of
competent jurisdiction makes a final determination that any payments to the
Executive under this Agreement are taxable to the Executive pursuant to
Section 4999 of the Code, and such payments should not have been made under
the terms of Sections 9.B. and C. hereof (such taxable payments and benefits
being referred to hereinafter as an "Overpayment") or in the event that the
Code shall be amended or final regulations thereunder adopted and, as a
result thereof, payments or benefits previously made to the Executive under
this Agreement should not have been made under the terms of Sections 9.B.
and C. and are thus recharacterized as an Overpayment, the amount of such
Overpayment shall be treated for all purposes as a loan to the Executive
which shall be repayable by the Executive within thirty (30) days after
demand by the Company, together with interest at the applicable Federal
rate specified for a demand loan in Section 7872(f)(2) of the Code,
compounded semiannually. The foregoing provision relating to Overpayments
shall be applicable notwithstanding previous compliance by the Company and
the Executive with the requirements of this Section 9; provided, however,
that no such Overpayment shall be repaid by the Executive to the Company if
and to the extent that, despite
-21-<PAGE>
making such repayment, the amount which is subject to taxation under
Section 4999 of the Code would not be reduced.
Section 10. Review of Agreement. The Compensation Committee of
the Board of Directors of the Company may consider such extension and
modification of the terms of this Agreement for a period or periods
subsequent to its expiration as it may deem appropriate at any time or from
time to time.
Section 11. Waiver. The failure of either party to insist, in any
one or more instances, upon the performance of any of the terms, covenants or
conditions of this Agreement by the other party hereto, shall not be
construed as a waiver or as a relinquishment of any right granted hereunder
to the party failing to insist on such performance, or as a waiver of the
future performance of any such term, covenant or condition, but the
obligations hereunder of both parties hereto shall remain unimpaired and
shall continue in full force and effect.
Section 12. Successor; Binding Agreement. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of such
succession shall be deemed to be a Change in Control of the Company
effective on the date of such succession. As used herein, "Company" shall
mean TBC Corporation and any successor to its business and/or its assets as
aforesaid which executes and delivers the agreement provided for in this
Section 12 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
Section 13. Notices. All notices required or permitted to be given
under this Agreement shall be in writing and shall be mailed (postage prepaid
via either registered or certified mail) or delivered, if to the Company,
addressed to:
TBC Corporation
4770 Hickory Hill Drive
Post Office Box 18342
Memphis, Tennessee 38181-0342
Attention: Chairman of the Board
and if to the Executive, addressed to:
Mr. Louis S. DiPasqua
2500 Johnson Road
Germantown, Tennessee 38139.
-22-<PAGE>
Either party may change the address to which notices to it or him are to be
directed by giving written notice of such change to the other party in the
manner specified in this paragraph.
Section 14. Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, shall be settled by
arbitration in Memphis, Tennessee, in accordance with the Rules of the
American Arbitration Association, and judgment upon the award rendered by
the Arbitrator(s) may be entered in any court having jurisdiction thereof.
Section 15. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
Section 16. Reference. From and after January 31, 1995, this
Agreement may be referred to as the Executive Employment Agreement, dated
February 18, 1991, as later amended and extended, and as restated effective
January 31, 1995, between the parties.
IN WITNESS WHEREOF, the parties have hereunto set their hands.
TBC CORPORATION
March 1, 1995 By /s/ M.E. Bruce
Marvin E. Bruce,
Chairman of the Board
March 1, 1995 /s/ Louis S. DiPasqua
LOUIS S. DiPASQUA (Executive)
-23-<PAGE>
The Wyatt Company Exhibit A
Consultants and Actuaries 1 of 3
6750 Poplar Avenue
Memphis, TN 38138
December 8, 1994
Mr. Louis DiPasqua
President & Chief Executive Officer
TBC Corporation
Post Office Box 18342
Memphis, Tennessee 38141-0342
Dear Mr. DiPasqua:
TBC Retirement Benefits
As requested, we have computed the retirement benefits payable to you from
the qualified retirement plan and the non-qualified plan, including benefits
provided under your employment contract with TBC.
The retirement income payable for your lifetime, assuming you retire on
October 1, 1999 (age 65), is equal to:
1. Qualified plan $2,277.40
2. Non-qualified plan 4,747.45
3. Total TBC retirement income $7,024.85
The attached pages show the details of our calculations. We have also
enclosed a copy of the retirement benefit information we received from
Goodyear.
Our computation of the benefit defined in your employment contract recognizes
an additional 28.583 years of service with Goodyear and is based on earnings
inclusive of any deferred compensation. The benefit is then offset by the
income payable from the TBC qualified plan and any retirement benefits from
the Goodyear plan. We suggest that these calculations be reviewed by your
attorney to confirm that our understanding of the retirement benefit
provided under your contract is correct since we did not have a complete
and current copy of the contract.
If you have any questions or would like any additional computations, please
call us.
Sincerely,
THE WYATT COMPANY
/s/ Sarah W. Harrold
Sarah W. Harrold
Consultant
Enclosure
cc: Ron McCollough
-24-<PAGE>
TBC CORPORATION Exhibit A
2 of 3
Retirement Benefits
(Qualified Plan and SERP)
LOUIS DIPASQUA
Data
DOB 9-17-34
DOH 2-16-91
NRD 10-1-99
Service at age 65:
TBC 8.583 years
+ Goodyear 28.583 years
= Total 37.167 years
Covered Compensation:
1993 $2,647
Projected to 1999 2,900
Earnings:
With IRS
Non-Qualified Qualified Limits
1994 $367,630.00 $342,630.16 $150,000
1993 317,583.00 292,583.16 235,840
1992 369,558.00 344,558.16 228,860
1991-10.5 mos 240,625.14 240,625.14 194,443
(222,220*10.5/12 = 194,443)
Qualified Plan Benefit
Average monthly pay (assuming $150,000 limit continues):
$150,000/12 = $12,500
Preserved average monthly pay as of 10-31-94:
1993 $235,840 12.0
1992 228,860 12.0
1991 194,443 10.5
$659,143 34.5 = $19,105.58
Benefit (the greater of 1 and 2):
1. Formula:
[.012 * 12,500 * 8.583] + [.0065 * (12,500 - 2,900) * 8.583] = $1,823.03
2. "Wear-away" formula (frozen benefit at 10-31-94 plus future accruals):
[.012 * 19,105.58 * 3.667] +
[.0065 * (19,105.58 - 2,647) * 3.667] = $1,233.03
+ [.012 * 12,500 * 4.917] + [.0065 * (12,500 - 2,900) * 4.917] = 1,044.37
= Total $2,277.40
-25-<PAGE>
Exhibit A
3 of 3
Non-Qualified Plan Benefit
Average monthly pay (assuming earnings of $367,630 continues):
$367,630/12 = $30,635.83
Benefit:
1. Formula:
[.012 * 30,635.85 * 25] + [.0065 * (30635.85 - 2,900) * 25] +
[.005 * 30,635.83 * 12.167] = $15,561.49
2. SERP benefit (offset for qualified plan and Goodyear benefits):
Formula $15,561.49
Qualified plan -2,277.40
Goodyear* -8,536.64
Non-qualified benefit $ 4,747.45
* see computation of Goodyear benefit
* Goodyear Benefit
Lump-sum paid in 1991 from supplemental plan: $241,034.97
Monthly early retirement income (jt & 2/3 option): $4,077.31
Age 65 actuarial equivalent benefit:
Early retirement income $4,077.31
Converted to life income (4,077.31 / .9042) 4,509.30
Unreduced at age 65 (4,509.30 / .744) $6,060.89
Lump-sum benefit $241,034.97
Converted to jt & 2/3 income
(241,034.97 / 12.0602 / 12) $1,665.50
Converted to life income (1,665.50 / .9042) 1,841.96
Unreduced at age 65 (1841.96 / .744) $2,475.75
Total age 65 benefit $8,536.64
Note: The actuarial factors used above are those used by
Goodyear in their computations.
-26-<PAGE>
Exhibit B
1 of 2
TBC CORPORATION
Retirement Benefits
(Qualified Plan and SERP Based on Floor Benefit )
LOUIS DIPASQUA
Data
DOB 9-17-34
DOH 2-16-91
NRD 10-1-99
Service at age 65:
TBC 8.583 years
+ Goodyear 28.583 years
= Total 37.167 years
Covered Compensation:
1993 $2,647
Projected to 1999 2,900
Earnings:
With IRS
Non-Qualified Qualified Limits
1994 $367,630.00 $342,630.16 $150,000
1993 317,583.00 292,583.16 235,840
1992 369,558.00 344,558.16 228,860
1991-10.5 mos 240,625.14 240,625.14 194,443
(222,220*10.5/12 = 194,443)
Qualified Plan Benefit
Average monthly pay (assuming $150,000 limit continues):
$150,000/12 = $12,500
Preserved average monthly pay as of 10-31-94:
1993 $235,840 12.0
1992 228,860 12.0
1991 194,443 10.5
$659,143 34.5 = $19,105.58
Benefit (the greater of 1 and 2):
1. Formula:
[.012 * 12,500 * 8.583] + [.0065 * (12,500 - 2,900) * 8.583] = $1,823.03
2. "Wear-away" formula (frozen benefit at 10-31-94 plus future accruals):
[.012 * 19,105.58 * 3.667] +
[.0065 * (19,105.58 - 2,647) * 3.667] = $1,233.03
+ [.012 * 12,500 * 4.917] + [.0065 * (12,500 - 2,900) * 4.917] = 1,044.37
= Total $2,277.40
-27-<PAGE>
Exhibit B
2 of 2
Supplemental Retirement Plan Floor Benefit
Average monthly pay (assuming earnings of $367,630 continues):
$367,630/12 = $30,635.83
Benefit:
1. Formula:
[.60 * 30,635.83] = $18,381.50
2. Floor benefit (offset for qualified plan and Goodyear benefits):
Formula $18,381.50
Qualified plan -2,277.40
Goodyear* -8,536.64
Non-qualified benefit $ 7,567.46
* see computation of Goodyear benefit
* Goodyear Benefit
Lump-sum paid in 1991 from supplemental plan: $241,034.97
Monthly early retirement income
(jt & 2/3 option): $4,077.31
Age 65 actuarial equivalent benefit:
Early retirement income $4,077.31
Converted to life income (4,077.31 / .9042) 4,509.30
Unreduced at age 65 (4,509.30 / .744) $6,060.89
Lump-sum benefit $241,034.97
Converted to jt & 2/3 income
(241,034.97 / 12.0602 / 12) $1,665.50
Converted to life income (1,665.50 / .9042) 1,841.96
Unreduced at age 65 (1841.96 / .744) $2,475.75
Total age 65 benefit $8,536.64
Note: The actuarial factors used above are those used by Goodyear in their
computations.
-28-<PAGE>
Exhibit 10.2
EXECUTIVE CONSULTING AGREEMENT
This Executive Consulting Agreement dated as of January 1, 1995, is made
between TBC Corporation ("TBC"), a Delaware corporation, with its principal
office and place of business at 4770 Hickory Hill Road, Memphis, Tennessee
38141, and Marvin E. Bruce ("Mr. Bruce"), residing at Memphis, Tennessee,
under the following circumstances:
Mr. Bruce served as chief executive officer of TBC from 1972 until June
30, 1994, when he retired from active service but continued to hold the
position of, and now serves as, Chairman of the Board of Directors of TBC.
Mr. Bruce was himself largely responsible for the growth and success of TBC.
He is well and favorably known throughout the tire and rubber industry, as
well as the automotive parts and accessories industry, has many friends in
important positions, serves on the boards of directors of a major bank and
several industrial corporations, public and private, and can exercise
positive influence on TBC's future business relations with actual and
potential suppliers and customers. TBC desires to retain the advice and
counsel of Mr. Bruce and to obtain the benefit of his many business contacts,
and Mr. Bruce is willing to furnish those services to TBC, on the terms and
conditions set forth in this agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. TBC hereby retains Mr. Bruce, and Mr. Bruce hereby accepts TBC's
retainer, as an adviser and consultant on its business plans, its relations
with its suppliers and customers, its industry relationships, and its
marketing endeavors.
2. The term of this Executive Consulting Agreement shall be for a period
of three years, ending on December 31, 1997.
3. Mr. Bruce shall make himself available for consultation and advice as
may be requested by the Chief Executive Officer of TBC or by its Board of
Directors, at such times as shall be convenient, not to exceed (without his
consent) in any month a period of more than seven days or, in any year, a
period in excess of 60 days in the aggregate.
4. TBC shall compensate Mr. Bruce for his services at the rate of
$130,000 per annum, payable monthly or at such other intervals as shall be
agreed.
5. TBC shall reimburse Mr. Bruce for reasonable expenses incurred by
him in performing services under this agreement, including travel and lodging
away from his home.
6. Mr. Bruce shall be an Independent Contractor for all purposes and
shall not have authority to contract for TBC or bind it in any way nor shall
he participate, by virtue of this
-29-<PAGE>
agreement (without prejudice to his rights under other plans or agreements),
in any compensation or similar plan or program of TBC.
7. Mr. Bruce shall be responsible for paying any and all income or other
taxes on his compensation under this agreement.
8. This is the entire agreement on this subject between the parties
and may not be assigned by either party.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first set forth above.
TBC CORPORATION
By \s\ Louis S. DiPasqua
Louis S. DiPasqua
President and CEO
\s\ Marvin E. Bruce
Marvin E. Bruce
-30-<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> (10,488)<F1>
<SECURITIES> 0
<RECEIVABLES> 120,406
<ALLOWANCES> 7,386
<INVENTORY> 51,727
<CURRENT-ASSETS> 169,251
<PP&E> 31,787
<DEPRECIATION> 16,051
<TOTAL-ASSETS> 194,728
<CURRENT-LIABILITIES> 87,307
<BONDS> 0
<COMMON> 2,508
0
0
<OTHER-SE> 104,185
<TOTAL-LIABILITY-AND-EQUITY> 194,728
<SALES> 130,343
<TOTAL-REVENUES> 130,343
<CGS> 118,432
<TOTAL-COSTS> 118,432
<OTHER-EXPENSES> 5,015
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 0<F2>
<INCOME-PRETAX> 6,896
<INCOME-TAX> 2,620
<INCOME-CONTINUING> 4,276
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,276
<EPS-PRIMARY> .17
<EPS-DILUTED> 0<F2>
<FN>
<F1>THIS ITEM IS SHOWN UNDER THE CATEGORY "OUTSTANDING CHECKS, NET" ON THE
CONSOLIDATED BALANCE SHEETS.
<F2>THESE ITEMS ARE NOT SEPARATELY REPORTED ON TBC CORPORATION'S FORM 10-Q.
</FN>
</TABLE>
