<PAGE>
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
JUNE 30, 1996 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
23,797,946 Shares of Common Stock were outstanding as of June 30, 1996.
INDEX TO EXHIBITS at page 12 of this Report<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
June 30, December 31,
1996 1995
(Unaudited)
CURRENT ASSETS
Accounts and notes receivable, less
allowance for doubtful accounts
of $8,809 on June 30, 1996
and $8,014 on December 31, 1995:
Related parties $ 23,884 $ 17,208
Other 79,512 78,330
Total accounts and notes receivable 103,396 95,538
Inventories 52,535 49,538
Refundable federal and state income taxes - 472
Deferred federal income taxes 2,713 2,389
Other current assets 3,022 2,252
Total current assets 161,666 150,189
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land and improvements 2,572 2,572
Buildings 10,985 10,985
Equipment 22,680 20,324
Furniture and fixtures 2,478 2,381
Leasehold improvements 613 600
39,328 36,862
Less accumulated depreciation 20,275 17,714
Total property, plant and equipment 19,053 19,148
OTHER ASSETS 8,317 10,615
TOTAL ASSETS $189,036 $179,952
See accompanying notes to consolidated financial statements.
-2-<PAGE>
TBC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1996 1995
(Unaudited)
CURRENT LIABILITIES
Outstanding checks, net $ 6,409 $ 8,120
Notes payable to banks 27,425 50,838
Current portion of long-term debt 51 81
Accounts payable, trade 36,846 10,117
Federal and state income taxes payable 113 -
Other current liabilities 5,087 4,433
Total current liabilities 75,931 73,589
LONG-TERM DEBT, LESS CURRENT PORTION 488 555
NONCURRENT LIABILITIES 1,076 985
STOCKHOLDERS' EQUITY
Common stock, $.10 par value,
shares issued and outstanding -
23,798 on June 30, 1996 and
23,784 on December 31, 1995 2,380 2,378
Additional paid-in capital 9,643 9,543
Retained earnings 99,518 92,902
Total stockholders' equity 111,541 104,823
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $189,036 $179,952
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 Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
NET SALES* $134,499 $132,223 $255,865 $262,566
COSTS AND EXPENSES:
Cost of sales 123,854 120,270 233,919 238,702
Distribution 2,311 2,041 4,411 3,968
Selling and administrative 3,973 3,323 7,773 6,650
Other (income) expense - net (844) 80 (909) (159)
Total costs and expenses 129,294 125,714 245,194 249,161
INCOME BEFORE INCOME TAXES 5,205 6,509 10,671 13,405
PROVISION FOR INCOME TAXES 1,978 2,474 4,055 5,094
NET INCOME $ 3,227 $ 4,035 $ 6,616 $ 8,311
Earnings per share $ .14 $ .16 $ .28 $ .33
Weighted average number of shares
and equivalents outstanding 23,857 24,994 23,847 25,348
* Including sales to related parties of $35,874 and $36,277 in the three
months ended June 30, 1996 and 1995, respectively, and $68,700 and
$72,123 in the six months ended June 30, 1996 and 1995, 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
Six Months Ended
June 30, 1995
BALANCE, JANUARY 1, 1995 26,282 $2,628 $10,391 $100,964 $113,983
Net income for period 8,311 8,311
Issuance of common stock
under stock option and
incentive plans, net 19 2 132 - 134
Repurchase and retirement
of common stock (1,517) (152) (600) (14,187) (14,939)
Tax benefit from exercise
of stock options - - 22 - 22
BALANCE, JUNE 30, 1995 24,784 $2,478 $ 9,945 $ 95,088 $107,511
Six Months Ended
June 30, 1996
BALANCE, JANUARY 1, 1996 23,784 $2,378 $ 9,543 $ 92,902 $104,823
Net income for period 6,616 6,616
Issuance of common stock
under stock option and
incentive plans, net 14 2 100 - 102
BALANCE, JUNE 30, 1996 23,798 $2,380 $ 9,643 $ 99,518 $111,541
See accompanying notes to consolidated financial statements.
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TBC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months
Ended June 30,
1996 1995
OPERATING ACTIVITIES
Net income $ 6,616 $ 8,311
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,611 2,184
Amortization 55 8
Equity in earnings from joint ventures (162) -
Deferred federal income taxes (324) (264)
Changes in operating assets and liabilities:
Receivables (5,459) (18,761)
Inventories (2,997) (17,594)
Other current assets (770) (190)
Other assets 6 -
Outstanding checks, net (1,711) 1,894
Accounts payable, trade 26,729 11,797
Federal and state income taxes
refundable or payable 585 767
Other current liabilities 654 (220)
Noncurrent liabilities 91 150
Net cash provided by (used in)
operating activities 25,924 (11,918)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,539) (2,931)
Investment in joint venture - (1,260)
Other, net 23 -
Net cash used in investing activities (2,516) (4,191)
FINANCING ACTIVITIES
Net bank borrowings (repayments) under
short-term borrowing arrangements (23,413) 30,914
Net decrease in long-term debt (97) -
Repurchase and retirement of common stock - (14,939)
Issuance of common stock under stock option and
incentive plans 102 134
Net cash provided by (used in)
financing activities (23,408) 16,109
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 $ 1,357 $ 1,178
- Income taxes 3,794 4,591
Supplemental Disclosure of Non-Cash Financing
Activity:
Tax benefit from exercise of stock options $ - $ 22
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 June 30, 1996, the consolidated
statements of income for the three months and six months ended June 30,
1996 and 1995, and the consolidated statements of stockholders' equity
and cash flows for the six months ended June 30, 1996 and 1995, 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 June 30, 1996 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 1995
Annual Report.
2. Other Assets
Other assets consist of the following (in thousands):
June 30, December 31,
1996 1995
Notes receivable $5,562 $ 7,961
Investments in joint ventures 1,691 1,562
Intangible assets, net of amortization 1,028 1,058
Other 36 34
$8,317 $10,615
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 $308,000 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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TBC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. 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.
4. Subsequent Event
On July 10, 1996, the Company completed the acquisition of all of the
outstanding shares of Big O Tires, Inc., a franchisor of independent
retail tire and automotive service stores. Under the terms of the merger
agreement, Big O stockholders will receive $16.47 in cash for each of the
3,317,916 outstanding shares of common stock, a total purchase price of
$54,646,000. The acquisition was financed through long-term borrowings and
will be accounted for as a purchase.
The following pro forma unaudited information (adjusted for interest,
estimated amortization of intangible assets, improved sourcing strength,
etc.) has been prepared as if the companies had been combined as of January
1, 1995. The final allocation of intangible assets by independent
appraisers has not yet been completed. The pro forma information does not
purport to present what actual results of operations would have been if the
acquisition of Big O had occurred on such date or to project results for any
future period. Net sales reflect certain reclassifications made to present
the results of the combined companies on a consistent basis.
(In millions, except per share data)
Six Months
Ended June 30,
1996 1995
Net sales $326.2 $331.7
Net income 8.4 9.3
Earnings per share $ .35 $ .37
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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. Working
capital increased from $76.6 million at December 31, 1995 to $85.7 million
at June 30, 1996. Current accounts and notes receivable increased by $7.9
million and inventories increased by $3.0 million, due principally to
seasonal fluctuations. Other assets decreased $2.3 million due primarily to
collections of notes receivable. The composite total owed to banks and
vendors, in the form of outstanding checks, notes payable to banks and
accounts payable, increased by $1.6 million from December 31, 1995 to June
30, 1996. 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 normally recurring capital expenditures during
the first six months of 1996.
As indicated in Note 4 to the financial statements, on July 10, 1996 the
Company acquired all of the outstanding shares of Big O Tires, Inc. Long-term
borrowings of $60 million were made in connection with the transaction, of
which $54.6 million was used to finance the purchase of the stock.
Results of Operations
Net sales increased 1.7% during the second quarter compared to the year-
earlier level. For the first six months of 1996, net sales were 2.6% lower
than in the first half of 1995. Sales of tires accounted for approximately
87% of total sales in the second quarter and first six months of 1996 versus
88% in the second quarter and first half of 1995. Unit tire volume increased
4.8% in the current quarter but declined 1.8% during the first half of 1996,
compared with the year-earlier results. The average tire sales price
decreased 3.6% in the current quarter and 2.1% in the first six months
compared with the year-earlier levels, due primarily to the effect of
industry-wide price discounting. Sales of non-tire products increased 9.0%
in the current quarter and 9.5% in the first half of 1996, due principally to
greater shipments of automotive service equipment and batteries.
Cost of sales as a percentage of net sales increased from 91.0% in the
second quarter of 1995 to 92.1% in the current quarter. For the year-to-date
period, cost of sales increased from 90.9% of net sales in 1995 to 91.4% in
1996. The fluctuations were due principally to the effects of higher net
product costs from suppliers and increased competitive pressures. The higher
net product costs in the current quarter were related in part to reduced
interest on early payments to suppliers.
Distribution expenses increased 13.2% in the current quarter and 11.2% in
the first six months of 1996 compared to the year-earlier levels, due
primarily to the addition of facilities in the northeastern United States
during the third quarter of 1995.
Selling and administrative expenses increased $650,000 in the second
quarter and $1.1 million in the first half of 1996, compared to the prior
year levels, due principally to the expenses associated with the facilities
added in the northeastern United States.
The fluctuations in net other income/expense in the second quarter and
first six months were related principally to income in the current quarter
from the settlement of a trademark infringement matter. In addition,
interest expenses were lower than in the year-earlier periods due to reduced
bank borrowing levels and interest rates.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders held on April 25, 1996,
Messrs. Stanley A. Freedman, Richard A. McStay, Robert M. O'Hara and Robert
R. Schoeberl were elected as directors of the Company for a term expiring at
the 1999 Annual Meeting of Stockholders and stockholders approved the
appointment of Coopers & Lybrand as independent public accountants of the
Company for the year ending December 31, 1996.
The number of shares of Common Stock voted for each director elected at
the Annual Meeting and the number of shares with respect to which authority
to vote for each such director was withheld are as follows: 18,725,070 shares
were voted for Mr. Freedman and authority to vote 1,204,559 shares for Mr.
Freedman was withheld; 18,733,093 shares were voted for Mr. McStay and
authority to vote 1,196,536 shares for Mr. McStay was withheld; 19,657,699
shares were voted for Mr. O'Hara and authority to vote 271,930 shares for Mr.
O'Hara was withheld; 19,666,779 shares were voted for Mr. Schoeberl and
authority to vote 262,850 shares for Mr. Schoeberl was withheld. A total of
19,889,226 shares were voted for approval of the appointment of Coopers &
Lybrand, 18,935 shares were voted against approval, and the holders of 21,468
shares abstained from voting on such approval.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Index to Exhibits
(b) During the quarter for which this report is filed, the Company
filed a Current Report on Form 8-K dated April 30, 1996 providing
under Item 5, "Other Events", information relative to the signing
of a definitive merger agreement relating to TBC's proposed
acquisition of all of the outstanding shares of Big O Tires, Inc.
The transaction, after receiving the necessary regulatory
approvals and the approval of the stockholders of Big O, was
consummated on July 10, 1996.
-10-<PAGE>
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
August 14, 1996 By /s/ Ronald E. McCollough
Ronald E. McCollough
Senior Vice President Operations
and Treasurer
(principal accounting and
financial officer)
-11-<PAGE>
INDEX TO EXHIBITS
Located at
Sequentially-
Exhibit No. Description Numbered Page
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT,
LIQUIDATION OR SUCCESSION:
2.1 Agreement and Plan of Merger, dated as of April 30,
1996, among TBC Corporation, TBCO Acquisition, Inc.,
and Big O Tires, Inc. (Filed as Exhibit 2.1 to TBC's
Current Report on Form 8-K, dated April 30, 1996, and
incorporated herein by reference.) .................. -
(10) MATERIAL CONTRACTS:
Management Contracts and Compensatory Plans
or Arrangements
10.1 Executive Employment Agreement dated as of June 1,
1996 between TBC Corporation and Barry D. Robbins ... 13
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TBC CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
This AGREEMENT is entered into as of June 1, 1996, between TBC
CORPORATION, a Delaware corporation (the "Company"), and BARRY D. ROBBINS,
who resides at 529 Timber Creek Drive, Akron, Ohio 44333 (the "Executive"),
under the following circumstances:
A. Executive is an experienced rubber company manager and desires to
be employed by the Company as its Senior Vice President Strategic
Planning.
B. The Company desires to so employ the Executive.
NOW, THEREFORE, in consideration of the respective covenants of the
parties contained herein, the parties hereto agree as follows:
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 of three years commencing upon the date of this Agreement
and terminating on May 31, 1999, unless sooner terminated as provided in
Section 6.
Section 2. Position and Duties. A. During the term of employment, the
Company shall employ the Executive as, and the Executive shall serve as, Senior
Vice President Strategic Planning of the Company, with his duties, authority
and responsibilities to be such as may be assigned by the Chief Executive
Officer of the Company 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 and the President and Chief
Executive Officer may issue from time to time.
Section 3. Salary. The Company shall pay the Executive a salary of
$180,000 per year in approximately equal installments in accordance with the
normal pay schedule for officers of the Company.
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<PAGE>
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 such 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 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. A. 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 Company's 1995 Management
Incentive Compensation Plan, 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.
B. In that connection, the Executive shall be included as a Participant
in the Company's Management Incentive Compensation Plan and shall be classified
therein for 1996 in Group A. He shall also be granted an option under the
Company's 1995 Stock Incentive Plan on June 1, 1996, for the number of shares
of the Company's Common Stock that shall have a market value on that date equal
to $90,000, subject to all the terms and provisions of said Plan, as shall be
embodied in an instrument substantially in the form customarily used by the
Company for the grant of options under said Plan. 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. The Executive shall be entitled to a car allowance
thereunder at Level II, at the rate of $1,145 per month.<PAGE>
C. Copies of the Company's Management Incentive Compensation Plan and
1995 Stock Incentive Plan are being furnished to the Executive
contemporaneously with execution of this Agreement.
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 six (6) 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 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
three (3) 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 6, in the event
Executive's employment is terminated as the result of disability pursuant to
Section 6.B(i), the Company shall continue to pay to the Executive each month
for six (6) 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.
Section 7. Retirement Benefit. The Executive shall receive such
retirement benefits as may be provided for him under the Company's Retirement
Plan, including any supplements the Company may adopt in that connection.
Section 8. 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 9. 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 10. Successor; Binding Agreement. A. The rights and obligations
of the Company under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Company.
B. This Agreement and the obligations created hereunder may not be
assigned by the Executive.
Section 11. Notices. All notices required or permitted to be given under
this Agreement shall be in writing and shall be mailed<PAGE>
(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: President
and if to the Executive, addressed to:
Mr. Barry D. Robbins
529 Timber Creek Drive
Akron, Ohio 44333.
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 12. 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 13. 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.
IN WITNESS WHEREOF, the parties have hereunto set their
hands as of the day and year first above written.
TBC CORPORATION
By /s/ Louis S. DiPasqua
President and Chief Executive Officer
/s/ Barry D. Robbins
BARRY D. ROBBINS (Executive)<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> (6,409)<F1>
<SECURITIES> 0
<RECEIVABLES> 112,205
<ALLOWANCES> 8,809
<INVENTORY> 52,535
<CURRENT-ASSETS> 161,666
<PP&E> 39,328
<DEPRECIATION> 20,275
<TOTAL-ASSETS> 189,036
<CURRENT-LIABILITIES> 75,931
<BONDS> 0
0
0
<COMMON> 2,380
<OTHER-SE> 109,161
<TOTAL-LIABILITY-AND-EQUITY> 189,036
<SALES> 255,865
<TOTAL-REVENUES> 255,865
<CGS> 233,919
<TOTAL-COSTS> 233,919
<OTHER-EXPENSES> 11,275
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 0<F2>
<INCOME-PRETAX> 10,671
<INCOME-TAX> 4,055
<INCOME-CONTINUING> 6,616
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,616
<EPS-PRIMARY> .28
<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>
