<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
TBC Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(Logo) (TBC CORPORATION
4770 HICKORY HILL ROAD
MEMPHIS, TENNESSEE 38141
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
APRIL 22, 1998
To the Stockholders of TBC Corporation:
The Annual Meeting of Stockholders of TBC Corporation will be held at the
Adam's Mark Hotel, 939 Ridgelake Boulevard, Memphis, Tennessee, on Wednesday,
April 22, 1998, at 9:30 a.m., Central Daylight Savings Time, for the purpose of
considering and voting upon:
(1) Election of three directors to serve for a term of three years.
(2) Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of business on
March 2, 1998 as the record date for determination of stockholders entitled to
notice of and to vote at the Annual Meeting and any adjournment thereof. A list
of stockholders of record entitled to vote at the meeting will be available for
examination by any stockholder for any purpose germane to the Annual Meeting,
during normal business hours, for a period of 10 days prior to the Annual
Meeting, at the Company's offices at the address set forth above. The list will
also be available at the Annual Meeting.
It is important that your shares be represented at the meeting. For that
reason we ask that you please mark, date, sign and return the enclosed proxy in
the envelope provided. Giving the proxy will not affect your right to vote in
person if you attend the meeting.
By Order of the Board of Directors
Memphis, Tennessee
March 23, 1998
<PAGE> 3
(TBC CORPORATION LOGO)
4770 HICKORY HILL ROAD
MEMPHIS, TENNESSEE 38141
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of TBC Corporation, a
Delaware corporation (the "Company"), in connection with the solicitation by its
Board of Directors of proxies to be used at the Annual Meeting of Stockholders
to be held on April 22, 1998, and any adjournment thereof. The close of business
on March 2, 1998 has been fixed as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting of
Stockholders. Each share entitles the holder thereof to one vote. The Company
has one class of shares outstanding, namely Common Stock, of which there were
23,051,347 shares outstanding at the close of business on March 2, 1998.
All properly executed proxies received by the Board of Directors pursuant
to this solicitation will be voted in accordance with the stockholder's
directions specified on the proxy. If no directions have been specified by
marking the appropriate squares on the accompanying proxy card, the shares will
be voted in accordance with the Board of Directors' recommendations. A
stockholder signing and returning the accompanying proxy has the power to revoke
it at any time prior to its exercise by giving notice to the Company in writing
or in open meeting, but without affecting any vote previously taken.
An affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote is required for approval of all items being
submitted to the stockholders for their consideration. Both abstentions and
broker non-votes will be included in the determination of the number of shares
present for quorum purposes. Under Delaware law, however, abstentions have the
effect of a negative vote, but broker non-votes have no impact on the outcome of
a vote. With regard to the election of directors, votes may be cast in favor of
a nominee or authority to vote may be withheld with respect to any nominee.
Votes that are withheld with respect to any nominee have the effect of a
negative vote.
The costs of preparing, assembling and mailing this Proxy Statement and the
accompanying proxy are to be borne by the Company. The Company will, upon
request, reimburse banks, brokerage houses and other institutions for their
expenses in forwarding proxy materials to their principals. Directors, officers
and regular employees of the Company may solicit proxies personally from some
stockholders if proxies are not received promptly.
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about March 23, 1998.
ELECTION OF DIRECTORS
The authorized number of directors of the Company is currently fixed at
ten. The Board of Directors is divided into three classes, with one class of
directors being elected at each Annual Meeting of Stockholders for a term of
three years. At the 1998 Annual Meeting, stockholders will elect three directors
who will hold office until the 2001 Annual Meeting and until their successors
are elected and qualified.
The nominees of the Board of Directors are Louis S. DiPasqua, Charles A.
Ledsinger, Jr., and Raymond E. Schultz, each of whom is presently a director and
is nominated to succeed himself. It is the intention of the proxy agents named
in the accompanying proxy, unless directed otherwise, to vote each proxy for the
election of Messrs. DiPasqua, Ledsinger, and Schultz. Should any of them be
unable to accept the office of director, an
<PAGE> 4
eventuality which is not anticipated, proxies may be voted with discretionary
authority for a substitute nominee or nominees designated by the Board of
Directors.
The Company's By-Laws require that a stockholder give advance written
notice, within the timeframes set forth in the By-Laws, of the stockholder's
intention to nominate an individual to serve as a director. Since the Company
did not receive such a notice from any stockholder, no individual who is not a
nominee of the Board of Directors or designated by the Board may be nominated
for election as a director at this Annual Meeting. See "Stockholder Nominations
and Other Matters."
Dwain W. Higginbotham, a director whose term of office expires at this
Annual Meeting, is not standing for re-election. With his retirement from the
Board of Directors, Mr. Higginbotham ends 28 years of service as a director of
the Company.
Set forth below is certain information concerning each nominee for director
and each director whose term of office continues after the 1998 Annual Meeting.
NOMINEES TO BE ELECTED FOR A TERM EXPIRING 2001:
LOUIS S. DiPASQUA, 63, has been a director of the Company since 1991. Mr.
DiPasqua has been the Company's President and Chief Executive Officer since July
1994. From 1991 when he joined the Company until 1994, Mr. DiPasqua served as
the Company's President and Chief Operating Officer. Prior to joining the
Company, Mr. DiPasqua was an executive with the Goodyear Tire & Rubber Company.
During his 28 years at Goodyear, Mr. DiPasqua held a variety of positions,
including Vice President of Replacement Tire Sales and Marketing, President and
Chief Executive Officer of Kelly Springfield Tire Company (a division of
Goodyear), and Chairman and Managing Director of Goodyear Great Britain.
CHARLES A. LEDSINGER, JR., 48, has been a director of the Company since
April 1996. Mr. Ledsinger was elected President and Chief Operating Officer of
St. Joe Corporation in February 1998. From May 1997 until February 1998, Mr.
Ledsinger served as Senior Vice President and Chief Financial Officer of St. Joe
Corporation. From 1990 until May 1997, Mr. Ledsinger was the Senior Vice
President and Chief Financial Officer of Harrah's Entertainment, Inc. Prior to
1990, Mr. Ledsinger held management positions at The Promus Companies
Incorporated, Holiday Corporation and Holiday Inns, Inc., and Embassy Suites.
Mr. Ledsinger is also a director of FelCor Suite Hotels, Inc.
RAYMOND E. SCHULTZ, 64, was elected a director of the Company on March 11,
1998. Mr. Schultz has been the Chairman and Chief Executive Officer of Promus
Hotel Corporation since December 1997. From April 1995 until December 1997, Mr.
Schultz served as President and Chief Executive Officer of Promus. From 1993 to
April 1995, he served as President and Chief Executive Officer of the Hotel
Division of the Promus Companies Incorporated, and was the President and Chief
Executive Officer of its Hampton Inn/Homewood Suites Hotel Division from 1991 to
1993. Mr. Schultz is also a director of Promus.
DIRECTORS CONTINUING IN OFFICE UNTIL 2000:
MARVIN E. BRUCE, 69, has been a director of the Company since 1972 and has
served as Chairman of the Board of Directors since 1991. Mr. Bruce was the
Company's President from 1972 until 1991 and its Chief Executive Officer from
1973 until his retirement in July 1994. Mr. Bruce is also a director of Union
Planters Corporation, a bank holding company.
ROBERT E. CARROLL, JR., 70, has been a director of the Company since 1970.
Mr. Carroll has been the President of Carroll's, Inc., a wholesale distributor
of tires and automotive accessories, since it was incorporated in 1960.
ROBERT H. DUNLAP, 68, has been a director of the Company since 1970. Mr.
Dunlap has been the Chairman of the Board of Dunlap & Kyle Co., Inc., a
wholesale distributor of tires and automotive accessories, since 1993. From 1960
until his election as Chairman of the Board, Mr. Dunlap served as President of
Dunlap & Kyle.
2
<PAGE> 5
DIRECTORS CONTINUING IN OFFICE UNTIL 1999:
RICHARD A. McSTAY, 61, has been a director of the Company since 1983. Mr.
McStay served as the President of Southern Capital Advisors, Inc., a division of
Morgan Asset Management and a registered investment advisor, from 1986 until his
retirement in February 1998. Mr. McStay was also a Managing Director of Morgan
Asset Management's parent company, Morgan Keegan & Company, Inc., a brokerage
and investment banking firm. Mr. McStay is also a director of Envoy Corporation.
ROBERT M. O'HARA, 71, has been a director of the Company since 1983. Mr.
O'Hara has been the Chairman and Chief Executive Officer of Falcon Management, a
management consulting firm, since 1983. Prior to 1983, Mr. O'Hara was an
executive with The Mead Corporation, his last position being Senior Vice
President.
ROBERT R. SCHOEBERL, 62, has been a director of the Company since April
1995. Prior to his retirement in 1994, Mr. Schoeberl was an executive with
Montgomery Ward & Company. During his 39 years at Montgomery Ward, Mr. Schoeberl
held a number of positions, his last being Executive Vice President for Home and
Auto. Mr. Schoeberl is also a director of Lund International Holdings, Inc.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors of the Company has established standing audit,
compensation, and nominating committees.
The Audit Committee (of which Messrs. Higginbotham, Ledsinger, and O'Hara
are members) recommends annually the appointment of the independent public
accountants for the Company. The Committee meets with the independent public
accountants and appropriate management personnel to review the scope and results
of the annual audit of the Company's financial statements and any
recommendations of the independent public accountants in regard to the Company's
accounting practices, policies, procedures and overall internal controls. The
Committee also reviews the Company's procedures for assuring compliance with the
Company's policy on standards of business conduct and the Company's policy
against insider trading.
The Compensation Committee (of which Messrs. Bruce, Dunlap, McStay, and
Schoeberl are members) fixes the compensation of officers of the Company elected
by the Board, establishes policies and guidelines in regard to employee
compensation in general, and administers the Company's compensation plans, 1989
Stock Incentive Plan (the "1989 Plan"), and Executive Supplemental Retirement
Plan.
The Nominating Committee (of which Messrs. Bruce, McStay, and O'Hara are
members) recommends nominees for election as directors of the Company,
identifies and recommends qualified candidates to fill vacancies on the Board,
and recommends directors for appointment to the various committees of the Board.
Stockholders wishing to recommend individuals for consideration by the Committee
may do so by contacting the Secretary of the Company at its principal executive
offices.
In 1997, there were five meetings of the Board of Directors, the
Compensation Committee held four meetings, the Audit Committee held two
meetings, and the Nominating Committee held no meetings. Each director, other
than Mr. Carroll, attended at least 75% of the meetings of the Board and of the
committees on which he served.
Non-employee members of the Board of Directors receive $15,000 per year,
payable quarterly, for services as directors, plus $750 ($375 in the case of
telephonic meetings lasting one hour or less) for attendance at each meeting of
the Board or a committee of the Board of which they are members. A director may
elect to defer receipt of all or a portion of fees payable for service on the
Board and any committees of the Board. Interest is accrued on deferred amounts,
and payment of deferred amounts commences after the director ceases to be a
director.
In addition to the fees described above, pursuant to the 1989 Plan, each
non-employee director is automatically granted, on the date of each Annual
Meeting of Stockholders, restricted stock having a market value of $5,000 on the
date of grant. The non-employee director may vote the stock and receive
dividends, if
3
<PAGE> 6
declared and paid, but may not dispose of the stock until the expiration of a
defined restriction period or the earlier lapse of restrictions. Each share of
restricted stock is accompanied by four nonqualified stock options, which expire
as the associated restricted stock vests. Each option entitles the director to
purchase a share of the Company's Common Stock at a price equal to its fair
market value on the date of grant. The options are not exercisable until one
year after the date of grant and unless the market price of the Company's Common
Stock has appreciated by a minimum amount calculated in accordance with a
formula set forth in the 1989 Plan. If the options are exercised, the associated
shares of restricted stock are forfeited. The restricted shares are also
forfeited to the Company if the non-employee director ceases to be a director of
the Company prior to the end of the restriction period for reasons other than
death, retirement, disability, failure to be re-elected, or a change in control
of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Three of the four current Compensation Committee members, Messrs. Bruce,
Dunlap, and McStay, served as members throughout 1997. In April 1997, Stanley A.
Freedman, who was Secretary and a director of the Company and who served on the
Compensation Committee, died. Robert R. Schoeberl was appointed to succeed Mr.
Freedman as a member of the Compensation Committee, effective April 23, 1997.
Mr. Bruce was the Company's Chief Executive Officer until his 1994
retirement as an employee of the Company and provided advisory and consulting
services to the Company for an annual retainer of $130,000 pursuant to a three
year agreement which terminated on December 31, 1997. As the Company's Chairman
of the Board, Mr. Bruce continues to participate in the Company's health
insurance plan and is provided coverage under the plan for himself and his wife
at the same cost as if he were still an employee of the Company. Mr. Dunlap is
the Chairman of the Board and sole owner of Dunlap & Kyle Co., Inc., one of the
Company's distributors, and owns a controlling interest in another of the
Company's distributors, Hesselbein Tire Co., Inc. In 1997, purchases by Dunlap &
Kyle Co., Inc. and Hesselbein Tire Co., Inc. from the Company amounted to
$46,118,000 in the aggregate. Thompson Hine & Flory LLP, the law firm of which
Mr. Freedman was a member, serves as legal counsel to the Company. Southern
Capital Advisors, Inc., which Mr. McStay served as President until February
1998, performed money management services for the Company's Retirement Plan
until January 31, 1997.
CERTAIN TRANSACTIONS
In addition to Mr. Dunlap, two other members of the Board of Directors of
the Company are executive officers or more than 10% equity owners of
distributors of the Company whose purchases from the Company in 1997 exceeded
either 5% of the Company's consolidated gross revenues or 5% of the
distributor's consolidated gross revenues during its last fiscal year.
Mr. Carroll is the President and principal owner of Carroll's, Inc. During
1997, purchases by Carroll's, Inc. from the Company totaled $67,505,000 and
purchases by distributors which operate under arrangements with, and may pay
compensation to, Carroll's, Inc. totaled $1,316,000.
Mr. Higginbotham is the President and sole owner of National Brands Tire
Co., Inc., which operates retail tire sales and service stores, and has served
as its President since it was incorporated in 1956. During 1997, purchases by
National Brands Tire Co., Inc. from the Company totaled $155,000.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of
the Company's Chief Executive Officer and the Company's four most highly
compensated executive officers other than its Chief Executive Officer for 1997,
1996, and 1995.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ---------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(A) COMPENSATION OPTIONS/SARS(B) COMPENSATION(C)
- --------------------------- ---- -------- -------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Louis S. DiPasqua............... 1997 $450,000 $222,480 -- 71,744 $4,000
President and Chief 1996 434,004 50,000 -- -- 1,500
Executive Officer 1995 418,008 -- -- 32,361 1,500
Bob M. Hubbard.................. 1997 $201,308 $ 79,617 -- 27,816 $4,000
Executive Vice President 1996 194,284 25,000 -- -- 1,500
Purchasing and Engineering 1995 187,260 -- -- 9,665 1,500
Ronald E. McCollough............ 1997 $184,321 $ 72,899 -- 25,185 $4,000
Executive Vice President, 1996 175,909 25,000 -- -- 1,500
Chief Financial Officer, and 1995 169,548 -- -- 8,751 1,500
Treasurer
Barry D. Robbins................ 1997 $182,025 $ 71,991 $44,904(d) 24,871 $3,561
Executive Vice President 1996 105,000 12,500 32,920(d) 10,141 --
Sales and Marketing 1995 -- -- -- -- --
Kenneth P. Dick................. 1997 $152,669 $ 80,197 -- 21,094 $3,679
Senior Vice President 1996 149,733 12,500 -- -- 1,377
Sales 1995 146,796 -- -- 7,577 1,468
</TABLE>
- ---------------
(a) Represents cash bonuses earned for 1997 pursuant to the Company's
Management Incentive Compensation Plan and paid for 1996 at the discretion
of the Compensation Committee of the Board of Directors. No bonuses were
awarded for 1995.
(b) Represents number of shares subject to options granted under the Company's
1989 Stock Incentive Plan. No stock appreciation rights ("SARs") were
granted in 1997, 1996, or 1995.
(c) Represents the Company's matching contribution for each of the named
executive officers under the Company's 401(k) Savings Plan.
(d) Represents amounts paid to reimburse Mr. Robbins for relocation expenses
incurred by him in connection with his employment with the Company and for
the taxes payable with respect to such expense reimbursement. The Company
has also incurred approximately $170,000 in relocation expenses paid or
payable to third party service companies for temporary living quarters,
moving and storage, fees and loss reimbursement on the sale of Mr. Robbins'
prior residence, and other miscellaneous items.
EMPLOYMENT CONTRACTS
The Company has employment agreements with Messrs. DiPasqua, McCollough,
Robbins, and Dick. The agreement with Mr. DiPasqua expires April 30, 2000, the
agreements with Messrs. McCollough and Dick expire October 31, 2000, and the
agreement with Mr. Robbins expires May 31, 1999. Pursuant to the agreements,
Messrs. DiPasqua, McCollough, Robbins, and Dick currently receive annual base
salaries of $475,000, $190,478, $188,100, and $159,539, respectively, which are
subject to such increases as may be authorized by the Board of Directors. Each
may also elect to defer payment of all or any part of his compensation.
In the event the employee dies or becomes disabled, payment of his annual
base salary will continue for a twelve-month period, in the case of Mr.
DiPasqua, and for a six-month period in the cases of Messrs. McCollough,
Robbins, and Dick. In the event that employment is terminated by the Company or
the employee within certain specified periods after a change in control of the
Company, other than as a result of death or disability, the employment
agreements of Messrs. DiPasqua, McCollough, Robbins, and Dick provide
5
<PAGE> 8
that the terminated executive will continue to receive his salary for the longer
of (a) the remaining term of the agreement or (b) a two-year period in the case
of Mr. DiPasqua, or a one-year period in the cases of Messrs. McCollough,
Robbins, and Dick. In addition, if any of Messrs. DiPasqua, McCollough, Robbins,
or Dick is terminated after a change in control of the Company, he is entitled
to receive a monthly payment equal to one-twelfth of the average annual amount
of any awards made to him during the preceding two fiscal years under any
incentive compensation plan of the Company. This monthly payment would continue
for a period of twelve months in the case of Mr. DiPasqua, and for a period of
six months in the cases of Messrs. McCollough, Robbins, and Dick.
Under the agreements, a "change in control" means any change that would be
required to be disclosed under federal proxy rules and includes an acquisition
of 30% or more of the Company's Common Stock, a change in the composition of a
majority of the Board of Directors, a merger or consolidation in which the
Company is not the surviving entity, and a sale of substantially all of the
Company's assets.
The employment agreement with Mr. DiPasqua provides for certain additional
supplemental retirement benefits, and the agreements of Messrs. McCollough,
Robbins, and Dick provide that the executive is entitled to participate in the
Company's Executive Supplemental Retirement Plan. See "Retirement Benefits."
OPTION/SAR GRANTS TABLE
The following table sets forth information concerning options to purchase
shares of the Company's Common Stock which were granted during the year ended
December 31, 1997 to each of the Company's executive officers named in the
table. No stock appreciation rights ("SARs") were granted in 1997.
The table shows, among other things, hypothetical potential gains from
stock options granted in 1997. These hypothetical gains are based entirely on
assumed annual growth rates of 5% and 10% in the price of the Company's Common
Stock over the ten year life of the options. The assumed rates of growth were
selected by the Securities and Exchange Commission for illustrative purposes
only and are not intended to predict future stock prices, which will depend upon
market conditions and the Company's future performance and prospects. If the
Company's Common Stock achieves a 5% annual growth rate, its price would
increase by 63% from $7.75 (the closing price of the Company's Common Stock on
January 15, 1997, when the options were granted) to $12.62 at the end of the ten
year option term. If the Company's Common Stock achieves a 10% annual growth
rate, its price would increase by 159% from $7.75 to $20.10 during the same
period.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS(A) OPTION TERM
- --------------------------------------------------------------------------------- ---------------------------
NO. OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED 1997 PER SHARE DATE 5% 10%
- ---- ------------ ------------ --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Louis S. DiPasqua.......... 71,744 22% $7.75 01/14/07 $349,393 $886,038
Bob M. Hubbard............. 27,816 9 7.75 01/14/07 135,464 343,528
Ronald E. McCollough....... 25,185 8 7.75 01/14/07 122,651 311,035
Barry D. Robbins........... 24,871 8 7.75 01/14/07 121,122 307,157
Kenneth P. Dick............ 21,094 7 7.75 01/14/07 102,728 260,511
</TABLE>
- ---------------
(a) In general, options granted in 1997 are not exercisable for the first
twelve months following the date of grant. Options vest in equal annual
installments over the next three years, becoming exercisable for one-third
of the underlying Common Stock on the first anniversary of the date of
grant and for an additional one-third of the underlying Common Stock on
each of the second and third anniversaries of the date of grant.
6
<PAGE> 9
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth, for each of the named executive officers,
aggregated information concerning all exercises of stock options or stock
appreciation rights with respect to the Company's Common Stock during 1997 and
the number and value of outstanding stock options at December 31, 1997. No stock
appreciation rights were outstanding at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
NO. OF SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(A)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(B) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Louis S. DiPasqua.......... -0- -0- 85,983 109,560 $256,314 $130,036
Bob M. Hubbard............. -0- -0- 38,967 31,037 97,567 50,417
Ronald E. McCollough....... -0- -0- 36,046 28,102 90,648 45,648
Barry D. Robbins........... -0- -0- 3,380 31,632 2,324 49,727
Kenneth P. Dick............ 500 $2,673 30,041 23,619 74,192 38,233
</TABLE>
- ---------------
(a) Represents the market value of the stock options on December 31, 1997, less
the aggregate exercise price.
(b) Represents the market value on the date of exercise, less the aggregate
exercise price.
RETIREMENT BENEFITS; CERTAIN RETIREMENT MATTERS
The Company has a noncontributory, tax-qualified, defined benefit
retirement plan (the "Retirement Plan") for employees, including officers, hired
prior to January 1, 1997. In addition, the Company maintains an unfunded
Executive Supplemental Retirement Plan (the "Supplemental Plan"), in which
employees designated by the Compensation Committee of the Board of Directors may
participate. Benefits under the Retirement Plan and the Supplemental Plan are
forfeited if a participant's employment with the Company is terminated for any
reason before the participant has five years of service.
The following table shows the estimated aggregate annual retirement
benefits payable at normal retirement (age 65) to participants in both the
Retirement Plan and the Supplemental Plan at selected compensation levels after
various years of service. Amounts shown are straight life annuity amounts and
are not subject to reduction for Social Security benefits.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
REMUNERATION 15 YRS. 20 YRS. 25 YRS. OR MORE
- ------------ -------- -------- ---------------
<S> <C> <C> <C>
$100,000....................................... $ 36,000 $ 48,000 $ 60,000
200,000....................................... 72,000 96,000 120,000
300,000....................................... 108,000 144,000 180,000
400,000....................................... 144,000 192,000 240,000
500,000....................................... 180,000 240,000 300,000
600,000....................................... 216,000 288,000 360,000
700,000....................................... 252,000 336,000 420,000
800,000....................................... 288,000 384,000 480,000
</TABLE>
For those executives participating in both the Retirement Plan and the
Supplemental Plan, aggregate retirement benefits are payable based upon, and the
"Remuneration" column in the Pension Plan Table refers to, the executive's
average annual compensation for the three highest consecutive years during the
last ten years of employment with the Company. Compensation includes all salary,
incentive compensation, deferred compensation, grants of restricted stock, and
grants of stock options to the extent that fair market value on the date of
grant exceeds the option price. In the case of each executive officer named in
the Summary
7
<PAGE> 10
Compensation Table, covered compensation includes amounts listed as salary,
bonus, and restricted stock awards (if any) in the Summary Compensation Table.
Messrs. Hubbard, McCollough, Robbins, and Dick participate in both the
Retirement Plan and the Supplemental Plan. For purposes of the Plans, Mr.
Hubbard has 36 years of service, Mr. McCollough has 24 years of service, Mr.
Robbins has one year of service, and Mr. Dick has 26 years of service.
Mr. DiPasqua participates in the Retirement Plan (under which he currently
has seven years of service) and also is entitled to supplemental retirement
benefits pursuant to the terms of his employment agreement. Under the agreement,
Mr. DiPasqua may elect to receive supplemental retirement benefits in either of
two ways: (i) in an amount which compensates him for reductions in his benefits
under the Retirement Plan due to the exclusion of certain compensation from the
definition of covered compensation for purposes of the Plan and to limitations
on the amount of his annual benefits and covered compensation that are imposed
on tax-qualified retirement plans by the Internal Revenue Code; or (ii) as if he
were a participant in the Supplemental Plan. Under either option, Mr. DiPasqua's
benefits are to be calculated assuming that he has earned an additional 28 years
and seven months of service under the Retirement Plan, and his supplemental
benefits are to be reduced by the amount of his retirement benefits from his
former employer.
Currently, Mr. DiPasqua's supplemental retirement benefits would be greater
if he elects to receive supplemental benefits as if he were a participant in the
Supplemental Plan. If he did so, the Pension Plan Table illustrates the
estimated aggregate annual retirement benefits payable to Mr. DiPasqua under the
Retirement Plan and as supplemental benefits, before reduction for retirement
benefits from his former employer.
Mr. Hubbard, who is a 36 year employee of the Company, has announced his
retirement, effective March 31, 1998. Pursuant to an agreement with the Company
relating to his retirement, Mr. Hubbard will receive, among other things,
consulting fees of $285,367 for the one year period following his retirement,
plus continuation of health and life insurance benefits through March 31, 1999
and a $75,000 lump sum payment in lieu of certain retirement benefits.
REPORT OF THE COMPENSATION COMMITTEE
Pursuant to resolutions adopted by the Company's Board of Directors, the
Compensation Committee of the Board of Directors has all the power and authority
of the Board of Directors to fix the compensation of executive officers of the
Company and to determine compensation guidelines for the entire Company. In
addition, the Compensation Committee administers the Company's compensation and
stock option plans other than its Retirement Plan and its 401(k) Savings Plan.
The key components of the compensation packages of the Company's executive
officers are annual salary, bonuses dependent upon Company performance, and long
term, stock-based incentives. In addition, the Company's executive officers
receive health, accident, and life insurance, retirement, and other personal
benefits typically offered to executives by major corporations.
Historically, the Company has entered into employment agreements with its
senior executive officers which fix their minimum annual salaries, subject to
increase by the Compensation Committee. The Company currently has employment
agreements with Mr. DiPasqua, its President and Chief Executive Officer, as well
as with Messrs. McCollough, Robbins, and Dick. Mr. DiPasqua's employment
agreement expires on April 30, 2000.
During 1996, the Compensation Committee retained William M. Mercer,
Incorporated ("Mercer") to conduct a comprehensive executive compensation study
for the Company. The Committee commissioned the study because the Committee
wanted an up-to-date evaluation of the Company's executive compensation policies
and practices, the last such study having been completed in 1989, and because
the Committee wanted Mercer's recommendations as to how best to harmonize the
Company's executive compensation policies and practices with those of Big O
Tires, Inc., which the Company acquired in July 1996. Mercer's work included,
among other tasks, a competitive pay analysis as well as a financial performance
analysis. Mercer's report and
8
<PAGE> 11
recommendations to the Compensation Committee (the "Mercer Study") were approved
by the Committee in October 1996.
The pay philosophy recommended in the Mercer Study and approved by the
Committee is that the compensation of the Company's executives and key managers
should be designed to promote achievement of the Company's business, financial,
and stockholder return objectives; to align the interests of the Company's
executives and key managers with those of stockholders; to provide pay that is
externally competitive and internally equitable, which will allow TBC to
attract, retain, and motivate the executives and key managers necessary to
accomplish its business objectives; and to reward exceptional performance.
To achieve this pay philosophy, the Mercer Study provided that direct
compensation (salary, annual incentives, and long term incentives) should be
targeted at or about the market median when all aspects of performance are at
target levels; that the Committee should have the ability to pay in excess of
median levels when performance exceeds targeted levels; that all executives and
key managers should have both a short term and a long term stake in the
Company's financial performance, as well as its stockholder performance; and
that higher paid executives and managers should have a greater percentage of
their total direct compensation delivered through incentive, stock-based and
long term pay, as opposed to salary.
The Committee's practice has been to review the salaries provided for in
the employment agreements with its senior executive officers, as well as the
salaries of the Company's other officers, once a year. The recommendations of
the Company's Chief Executive Officer as to the salaries of the Company's
officers (other than himself) are solicited and discussed in connection with
this annual salary review.
The salaries of most of the Company's executive officers were adjusted in
July 1996. At that time, Mr. DiPasqua's salary was fixed at $450,000. In light
of the Mercer Study, the Compensation Committee did not adjust the salaries of
any executive officers until October 1997, when it approved increases for
Messrs. McCollough and Robbins. Throughout 1997, Mr. DiPasqua's salary remained
at the level established in July 1996.
In April 1997, the Compensation Committee approved a $50,000 cash bonus for
Mr. DiPasqua to recognize the many major initiatives undertaken and accomplished
by him since the beginning of 1996. The most notable of these initiatives
included the restructuring of the Company to eliminate its non-tire business,
the sale of its battery business, the July 1996 acquisition of Big O, and the
subsequent integration of Big O into the Company. This bonus is included in the
1996 information provided with respect to Mr. DiPasqua in the Summary
Compensation Table.
Also in accordance with the Mercer Study, the Compensation Committee
adopted a new Management Incentive Compensation Plan (the "Incentive Plan") for
the Company's executive officers and key managers for 1997 and thereafter.
Participants in the Incentive Plan are designated by the Committee annually.
Under the Incentive Plan, the Committee establishes levels to which participants
are assigned and a targeted incentive award (stated as a percentage of base
salary) applicable to each level. The targeted incentive awards set by the
Committee range from 50% of base salary to 5% of base salary.
Incentive awards are payable based upon performance measures established by
the Committee for each participant. The Committee approves a threshold, target,
and maximum performance objective for each performance measure. No payment with
respect to a performance measure is made if performance is below the threshold
performance objective established for that performance measure. If the target
performance objective is reached, the participant is entitled to receive 100% of
the incentive award attributable to that performance measure. If the maximum
performance objective is reached, the participant receives 200% of the award
attributable to that performance measure. As a result, if the maximum
performance objectives for all performance measures are reached, a participant
will receive an incentive award equal to 200% of his or her targeted award.
Under the Incentive Plan, no participant may receive more than 200% of his
or her targeted incentive award. Awards are subject to reduction or cancellation
by the Committee on the basis of a participant's individual performance or in
the event of conduct by a participant detrimental to the Company. Awards are
payable in cash.
9
<PAGE> 12
All of the Company's executive officers participated in the Incentive Plan
in 1997. In accordance with the recommendations of the Mercer Study, the
Committee established a targeted incentive award for Mr. DiPasqua of 50% of his
base salary if the target objective for each performance measure were achieved.
In the case of the other executive officers named in the Summary Compensation
Table, their targeted incentive awards were set at 40% of base salary. For 1997,
performance measures established by the Committee related to the achievement of
targeted levels of adjusted earnings before tax, net sales, and unit sales of
tires. The performance measures applicable to Mr. DiPasqua were the Company's
net sales and adjusted earnings before tax. Based upon the Company's results,
Mr. DiPasqua earned an award under the Incentive Plan for 1997 which was equal
to 49.4% of his base salary, or $222,480.
The Mercer Study also recommended that the Company abandon its biennial
grant of options under the 1989 Stock Incentive Plan and implement an annual
grant of options, with the number of shares which an optionee is granted being
based upon a formula using a percentage of base salary on the date of grant and
the Black-Scholes value of a hypothetical option on the last day of the month
preceding the date of grant. The percentage of base salary varies from 15% to
75%, in the case of Mr. DiPasqua.
Implementing the Mercer Study's recommendations, the Compensation Committee
granted stock options to the Company's executive officers, including the five
named executive officers, and other key employees in January 1997, with the
number of shares subject to each option being determined using the formula set
forth in the Mercer Study. In accordance with that formula, Mr. DiPasqua
received an option to purchase 71,744 shares of the Company's Common Stock at
$7.75 per share (which was the closing price of the Company's Common Stock on
the date of grant).
Because of Section 162(m) of the Internal Revenue Code (which limits the
Company's ability to deduct compensation in excess of $1.0 million paid to
certain executive officers), the Incentive Plan contains provisions which
require the Company to delay the payment of any portion of an incentive award
which would not be deductible by the Company due to Section 162(m). The
Incentive Plan requires that the Company pay any such delayed portion as
promptly as possible after the Committee determines that the payment would then
be deductible. Until it is paid, any portion so delayed bears interest at a rate
per annum based upon the Standard & Poor's Corporate and Government Bond Yield
Index.
Given the Company's current compensation levels, except as indicated in the
preceding paragraph, the Committee has not discussed the establishment of any
policy with respect to qualifying compensation paid to its executive officers
for deductibility under Section 162(m).
THE COMPENSATION COMMITTEE
Robert R. Schoeberl, Chairman
Marvin E. Bruce
Robert H. Dunlap
Richard A. McStay
10
<PAGE> 13
THE COMPANY'S CUMULATIVE TOTAL RETURN TO STOCKHOLDERS
The graph which follows compares the Company's cumulative total return to
stockholders for the five year period ended December 31, 1997, with the
cumulative total return of the Standard & Poor's SmallCap 600 Index and the
Standard & Poor's Auto Parts After Market Stock Price Index for such five year
period. The graph assumes that $100 was invested on December 31, 1992 in the
Company's Common Stock and in each of the two indexes and that dividends were
reinvested.
<TABLE>
<CAPTION>
Measurement Period S&P Small Cap S&P Auto Parts &
(Fiscal Year Covered) TBC Corporation 600 Equipment
<S> <C> <C> <C>
1992 100 100 100
1993 79 119 116
1994 59 113 101
1995 55 147 125
1996 48 178 141
1997 61 224 176
</TABLE>
11
<PAGE> 14
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth information as of December 31, 1997 with
respect to the number of shares of Common Stock of the Company beneficially
owned by each director of the Company, each executive officer of the Company
named in the Summary Compensation Table, all directors and executive officers of
the Company as a group, and each other person known by the Company to be the
beneficial owner of 5% or more of the Company's outstanding shares.
For purposes of this table, a person is considered to beneficially own any
shares if the person, directly or indirectly, has (or has the right to acquire
within 60 days after December 31, 1997) sole or shared power (i) to vote or to
direct the voting of such shares or (ii) to dispose or to direct the disposition
of such shares. In the case of shares listed as being beneficially owned by an
individual and a corporation, the individual may be deemed to share beneficial
ownership of such shares, which are held of record by the corporation, because
of the individual's relationship with the corporation. In the case of shares
listed as being beneficially owned only by an individual, voting power and
investment power are exercised solely by the named individual or are shared by
such individual and his spouse or children. Individuals holding restricted
shares may vote them and receive dividends, but may not dispose of the
restricted shares until the applicable restriction period expires.
<TABLE>
<CAPTION>
NUMBER OF SHARES,
INCLUDING OPTION
SHARES, BENEFICIALLY
OWNED AS OF PERCENT OF
NAME DECEMBER 31, 1997 CLASS(A)
- ---- -------------------- ----------
<S> <C> <C>
Marvin E. Bruce............................................. 1,633,369(b) 7.0%
Robert E. Carroll, Jr. and Carroll's, Inc. Profit Sharing
Plan and Trust............................................ 42,325(c)(d) (e)
Kenneth P. Dick............................................. 38,443(f) (e)
Louis S. DiPasqua........................................... 130,793(g) (e)
Robert H. Dunlap and Dunlap & Kyle Co., Inc. ............... 35,638(d) (e)
Dwain W. Higginbotham....................................... 13,625(d) (e)
Bob M. Hubbard.............................................. 53,486(h) (e)
Charles A. Ledsinger, Jr. .................................. 1,312(i) (e)
Ronald E. McCollough........................................ 59,915(j) (e)
Richard A. McStay........................................... 7,678(d) (e)
Robert M. O'Hara............................................ 21,982(d) (e)
Barry D. Robbins............................................ 11,670(k) (e)
Robert R. Schoeberl......................................... 9,788(l) (e)
Raymond E. Schultz.......................................... -0- (e)
Directors and Executive Officers as a Group (15 persons).... 2,075,003(m) 8.9
T. Rowe Price Associates, Inc. ............................. 2,310,700(n) 10.0
FMR Corp. .................................................. 1,959,700(o) 8.5
KPM Investment Management, Inc.............................. 1,231,500(p) 5.3
</TABLE>
- ---------------
(a) Percentages are calculated based upon the number of shares of Common Stock
outstanding on December 31, 1997, plus the number of shares subject to
outstanding options held by the named individual or group, as the case may
be, and exercisable within 60 days thereafter.
(b) Includes 30,928 shares subject to outstanding options. Also includes 1,788
restricted shares granted to Mr. Bruce as a non-employee director. Shares
subject to tandem options related to these restricted shares are not
included because they were not exercisable on December 31, 1997 or within
60 days thereafter. Mr. Bruce's mailing address is: TBC Corporation, 4770
Hickory Hill Road, Memphis, Tennessee 38141.
12
<PAGE> 15
(c) Includes 37,968 shares held by Carroll's, Inc. Profit Sharing Plan and
Trust as to which Mr. Carroll disclaims beneficial ownership.
(d) Includes 2,148 restricted shares previously granted to the named
non-employee director (but not the shares subject to the options granted in
tandem with these restricted shares, since the options were not exercisable
at December 31, 1997 or within 60 days thereafter).
(e) Represents less than one percent of the outstanding shares of Common Stock
of the Company.
(f) Includes 37,072 shares subject to outstanding options.
(g) Includes 94,933 shares subject to outstanding options.
(h) Includes 48,239 shares subject to outstanding options.
(i) Represents restricted shares previously granted to Mr. Ledsinger (but not
the shares subject to related tandem options which were not exercisable on
December 31, 1997 or within 60 days thereafter).
(j) Includes 44,441 shares subject to outstanding options.
(k) Represents shares subject to outstanding options.
(l) Includes 1,788 restricted shares previously granted to Mr. Schoeberl as a
non-employee director (but not the shares subject to related tandem options
which were not exercisable on December 31, 1997 or within 60 days
thereafter).
(m) Includes 281,080 shares subject to outstanding options and 15,628
restricted shares.
(n) Based upon information filed with the Securities and Exchange Commission
(the "SEC"), these shares are owned by various individual and institutional
investors, including the T. Rowe Price Small Cap Value Fund, Inc., a
registered investment company (the "Price Fund"), which owns 1,650,000
shares. T. Rowe Price Associates, Inc., a registered investment adviser
("Price Associates"), serves as an investment adviser with power to direct
the investment of and/or sole power to vote the shares. As of December 31,
1997, the Price Fund had sole power to vote or to direct the voting of the
1,650,000 shares of the Company's Common Stock and Price Associates had
sole power to dispose or to direct the disposition of these shares. Price
Associates also had sole power to vote or to direct the voting and to
dispose or direct the disposition of an additional 275,700 shares of the
Company's Common Stock and sole power to dispose or to direct the
disposition of an additional 385,000 shares. For purposes of the reporting
requirements of federal securities laws, Price Associates is deemed to be a
beneficial owner of these shares; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such shares. The
business address of the two companies is 100 E. Pratt Street, Baltimore,
Maryland 21202.
(o) Based upon information filed with the SEC, as of December 31,1997, Fidelity
Low-Priced Stock Fund, a registered investment company (the "Fidelity
Fund"), owned 1,959,700 shares of the Company's Common Stock. FMR Corp.'s
wholly-owned subsidiary, Fidelity Management & Research Company, a
registered investment adviser ("Fidelity Management"), acts as investment
adviser to the Fidelity Fund with respect to these shares. Fidelity
Management votes the shares under written guidelines established by the
Fidelity Fund's Board of Trustees, which has sole power to vote or to
direct the voting of the shares. FMR Corp., Fidelity Management, the
Fidelity Fund, and FMR's controlling shareholders (collectively,
"Fidelity") together have the sole power to dispose or to direct the
disposition of these shares. Fidelity's mailing business is 82 Devonshire
Street, Boston, Massachusetts 02109.
(p) Based upon information filed with the SEC, as of December 31, 1997, KPM
Investment Management, Inc., a registered investment adviser, had sole
power to vote or to direct the voting of and sole power to dispose or to
direct the disposition of, 1,231,500 shares of the Company's Common Stock.
The mailing address of KPM Investment Management, Inc. is 10250 Regency
Circle, Omaha, Nebraska 68114.
Price Associates, the Price Fund, Fidelity, and KPM Investment Management,
Inc. each has represented that the shares of the Company's Common Stock which it
is deemed to beneficially own were acquired in the ordinary course of business
and were not acquired for the purpose of and do not have the effect of changing
or influencing the control of the Company and were not acquired in connection
with or as a participant in any transaction having such purpose or effect.
13
<PAGE> 16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities laws require the Company's directors and officers and
persons who own more than 10% of the outstanding shares of Common Stock of the
Company to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and to furnish the Company with copies of all
such reports. Based solely upon the Company's review of the copies of these
reports received by it and written representations that no other reports were
required to be filed, the Company believes that all filing requirements
applicable to its directors, officers, and greater than 10% stockholders were
met on a timely basis with respect to its fiscal year ended December 31, 1997.
STOCKHOLDER NOMINATIONS AND OTHER MATTERS
Pursuant to the Company's By-Laws, at any annual or special meeting of
stockholders, only such business may be conducted as has been specified in the
notice of the meeting or brought before the meeting by or at the direction of
the Board of Directors, or by a stockholder who has given timely written notice
to the Company's Secretary of the stockholder's intention to bring such business
before the meeting. The By-Laws also provide that a person will be eligible for
election as a director only if he or she is nominated by or at the direction of
the Board of Directors, its Nominating Committee, or a stockholder who has given
timely written notice to the Secretary of the Company of the stockholder's
intention to nominate the individual for election as a director.
To be timely, notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 75 days nor more than
90 days prior to the meeting (or, if less than 90 days' notice or prior public
disclosure of the date of the meeting is given, such notice must be given no
later than the close of business on the 15th day following the date of mailing
of the notice of meeting or the date such public disclosure was made, whichever
is first).
A stockholder's notice of intention to bring any matter before a meeting
must contain a brief description of the business desired to be brought and
certain information concerning the stockholder. Notice of intention to nominate
any individual to serve as a director must contain certain information about the
proposed nominee and about the stockholder who intends to make the nomination.
The specific requirements of the notices are set forth in Article II, Section 7
of the By-Laws, a copy of which will be provided to any stockholder upon
request.
Since no notices were received from stockholders relating to any business
or nominee to be brought before this year's Annual Meeting of Stockholders, only
those nominees of the Board of Directors described in this Proxy Statement or
otherwise nominated by or at the direction of the Board of Directors will be
eligible for election as directors at this Annual Meeting. In addition, the only
items of business which will be brought before the meeting will be such other
business, if any, as the Board may hereafter direct. At the date of the mailing
of this Proxy Statement, the Board of Directors knows of no other business that
will be brought before the meeting, but it is intended that, as to any such
other matter or business, a vote may be cast pursuant to the accompanying proxy
in accordance with the judgment of the person or persons voting the same.
1999 ANNUAL MEETING INFORMATION
The 1999 Annual Meeting of Stockholders will be held on Wednesday, April
28, 1999. Under the rules of the Securities and Exchange Commission, in order to
be included in the Company's proxy statement and form of proxy for the 1999
Annual Meeting of Stockholders, stockholder proposals must be received by the
Company, at 4770 Hickory Hill Road, Memphis, Tennessee 38141, Attention:
Secretary, on or before November 23, 1998. In addition, in accordance with
Article II, Section 7 of the Company's By-Laws, stockholders wishing to bring
any matter before the 1999 Annual Meeting of Stockholders or to nominate any
individual for election as a director at the 1999 Annual Meeting, must give
written notice thereof to the Company during the period between January 28 and
February 12, 1999 in order to be eligible for consideration at the 1999 Annual
Meeting. See "Stockholder Nominations and Other Matters."
14
<PAGE> 17
Appendix A
PROXY
TBC CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 22, 1998
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned holder(s) of Common Stock of TBC Corporation, a Delaware
corporation (the "Company"), hereby appoint(s) Marvin E. Bruce and Louis S.
DiPasqua, and each or either of them, attorneys and proxies of the undersigned,
with power of substitution, to vote all of the Common Stock which the
undersigned is (are) entitled to vote at the Annual Meeting of Stockholders of
the Company to be held at the Adam's Mark Hotel, 939 Ridgelake Boulevard,
Memphis, Tennessee on Wednesday, April 22, 1998, at 9:30 a.m., Central Daylight
Savings Time, and at any adjournment thereof, as follows:
1. Election of Directors
<TABLE>
<S> <C> <C>
[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY to
(except as marked to the contrary below). vote for all nominees listed below.
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME BELOW.
Louis S. DiPasqua Charles A. Ledsinger, Jr. Raymond E. Schultz
2. In their discretion, the attorneys and proxies are authorized to vote upon
such other matters as may properly come before the meeting or any adjournment
thereof.
<TABLE>
<S> <C>
[ ]GRANT AUTHORITY [ ]WITHHOLD AUTHORITY
to vote to vote
</TABLE>
(Continued and to be signed on reverse side)
(Continued from other side)
A VOTE FOR PROPOSAL 1 AND GRANTING THE PROXIES DISCRETIONARY AUTHORITY IS
RECOMMENDED BY THE BOARD OF DIRECTORS OF THE COMPANY. WHEN PROPERLY EXECUTED,
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED
STOCKHOLDER(S). IF NO DIRECTION IS SPECIFIED, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1 AND AT THE DISCRETION OF THE PROXIES UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The undersigned acknowledges receipt of the Notice & Proxy Statement for the
1998 Annual Meeting of Stockholders and the Annual Report to Stockholders for
the year ended December 31, 1997.
Dated , 1998
------------------
------------------------------
------------------------------
Signature(s)
Stockholders should date this
proxy and sign here exactly as
name appears at left. If stock
is held jointly, both owners
should sign this proxy.
Executors, administrators,
trustees, guardians and others
signing in a representative
capacity should indicate the
capacity in which they sign.
