<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-13093
PC QUOTE, INC.
Incorporated in the State of Delaware FEIN 36-3131704
Principal Executive Offices:
300 South Wacker Drive, #300, Chicago, Illinois 60606
Telephone Number: (312) 913-2800
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par Value
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
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As of March 17, 1997, the aggregate market value of the Common Stock of the
Registrant (based upon the closing price of the Common Stock as reported by the
American Stock Exchange) on such date held by non-affiliates of the Registrant
was approximately $12,853,094.
Indicate by check mark whether registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes X No
As of March 17, 1997, there were 7,412,849 shares of Common Stock of the
Registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: See Page 3
Portions of the Proxy Statement to be filed with the Securities and Exchange
Commission in connection with the Annual Meeting of Stockholders to be held in
1997 are incorporated by reference into Part III hereof.
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PART OF FORM 10-K DOCUMENT
PART I None
PART II None
PART III None
PART IV
ITEM 14 Exhibits and Reports Exhibits as specified in Item
on Form 8-K 14 of this Report
3
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
During the year ended December 31, 1996, the Company's Board of Directors
was comprised of Louis J. Morgan, M. Blair Hull, Paul DiBiasio, Ronald Langley
and Alexander Piper III. Messrs. Hull and Piper resigned as directors in
December 1996 and Mr. DiBiasio resigned in April 1997. The current directors
and executive officers of the Company, and their ages and positions as of April
28, 1997 are as follows:
NAME AGE POSITION
Louis J. Morgan 60 Chairman of the Board of Directors,
Chief Executive Officer and Treasurer
Ronald Langley 52 Director
Howard C. Meltzer 44 President and Chief Operating Officer
Michael A. Press 53 Vice President, Finance and Chief Financial Officer
Directors hold office for one year and until their successors are elected
and qualified. Executive officers of the Company are appointed by, and serve at
the direction of, the Board of Directors.
LOUIS J. MORGAN became Chairman of the Board of the Company in May 1984.
Mr. Morgan served as President of the Company from August 1980 to May 1984.
From 1962-1972, Mr. Morgan was employed as a securities broker and sales manager
of a regional New York Stock Exchange member brokerage firm. He was a member of
the Chicago Board Options Exchange, Inc. from 1973 to 1986 and served on the
Systems Committee of the Chicago Board Options Exchange, Inc. from 1980 through
1983.
RONALD LANGLEY became Chairman of publicly held PICO Holdings, Inc. in
November 1996; Chairman of Quaker Holdings Limited, an investment banking
firm, in October 1992; Chairman since 1995 and Director since 1993, of
Physicians Insurance Company of Ohio, an insurance company; Chairman of
Global Equity Corporation, a Canadian investment banking corporation since
September 1995; Chairman of Summit Global Management, Inc., a subsidiary of
Physicians Insurance Company of Ohio which acts as an investment advisor
registered with the Securities and Exchange Commission, since 1994. Since
1994, Mr. Langley served as Chairman of the Centurion Trust Company, a bank
specializing in custodian services.
HOWARD C. MELTZER joined the Company in June 1996 as President and Chief
Operating Officer. Previously, he spent 20 years developing and implementing
strategic initiatives for Reuters. Having served in the organization's London,
Hong Kong and Toronto offices, Mr. Meltzer was most recently based at the
Reuters Chicago office as vice president of business operations and Central
District.
MICHAEL A. PRESS joined the Company in July 1996 as Vice President of
Finance, Chief Financial Officer. Since 1987 Mr. Press has been an independent
financial consultant. Prior to that he was an officer of a national real estate
development company and a senior financial and corporate development executive
for Allis Chalmers and Congoleum Corp.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
During the year ended December 31, 1996, the Board of Directors held six
meetings. Each of the directors attended, in person or by telephone, at least
75% of the aggregate of the total number of meetings of the Board of Directors.
4
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ITEM 11. EXECUTIVE COMPENSATION
The following table summarizes the compensation for the past three years of
(a) the Company's Chief Executive Officer, (b) the Company's President and Chief
Operating Officer (who commenced employment June, 1996), (c) the Company's Vice
President, Finance and Chief Financial Officer (who commenced employment July,
1996), and (d) the Company's two most highly compensated officers other than
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Awards
-------------------- ----------
Shares
Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation (1)
- --------------------------- ---- -------- ------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
Louis J. Morgan 1996 $251,562 $21,875 --- $13,752
Chairman of the Board, Chief 1995 241,896 --- 30,000 13,419
Executive Officer and Treasurer 1994 225,463 --- 20,000 11,509
Howard Meltzer (2) 1996 106,571 27,500 75,000 ---
President and Chief Operating 1995 --- --- --- ---
Officer 1994 --- --- --- ---
Michael Press (3) 1996 57,232 5,450 25,000 ---
Vice President, Finance, 1995 --- --- --- ---
Chief Financial Officer 1994 --- --- --- ---
Michael J. Kreutzjans 1996 152,705 11,911 --- 1,830
Vice President, Development Design 1995 145,619 --- 25,000 1,830
1994 79,365 --- 20,000 3,330
Jerry M. Traver 1996 211,539 4,813 --- ---
Vice President, Sales and Marketing 1995 145,619 25,000 ---
1994 79,365 20,000 ---
</TABLE>
- ----------------------------------
(1) Represents the insurance premiums paid by the Company on life insurance
policies on which the named person's spouse is the beneficiary.
(2) Mr. Meltzer's employment with the Company commenced July 1996. Represents
amounts paid to Mr. Meltzer from June 1996 through December 1996.
(3) Mr. Press' employment with the Company commenced July 1996. Represents
amounts paid to Mr. Press from July 1996 through December 1996.
Mr. Richard Chappetto, the Company's former President, International Division,
and Chief Financial Officer, ceased his employment with the Company on November
1, 1996. During the last fiscal year the Company paid Mr. Chappetto cash
compensation of $159,566 in accordance with his September 1993 employment
agreement with the Company, which Agreement expired in September 1996.
The following table shows the total number of Options granted to each of the
named persons during 1996 (both as the number of shares of Common Stock subject
to such Options and as a percentage of all Options granted to employees during
1996) and, for each of these grants, the exercise price per share of Common
Stock and option expiration date. Except for options granted to Mr. Meltzer,
the options will vest in three equal annual installments in 1997, 1998 and 1999
and will be exercisable through July 16, 2001. The exercise price of these
options was fair market value (as defined in the Plan) at the date of grant. Of
the 75,000 options granted to Mr. Meltzer, 25,000 vested immediately upon
commencement of his employment in July. The remaining 50,000 options vest in
equal annual installments through July, 1998. No SARs were granted in 1996.
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OPTION/SAR GRANTS IN 1996 FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Number of % of Total Assumed Annual Rates of
Securities Options Exercise Price Appreciation
Underlying Granted to or Base for Option
Options Employees in Price Expiration -----------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5%(1) 10%(1)
- ---- ------------ ------------- -------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Morgan ---- ---- _____ __________ ________ ________
Howard Meltzer 75,000 57% 5.375 7-16-2001 $490,000 $590,215
Michael Press 25,000 19% 5.375 7-29-2001 163,333 196,738
Michael J. Kreutzjans ---- ---- ______ __________ ________ ________
Jerry M. Traver ---- ---- ______ __________ ________ ________
</TABLE>
(1) The dollar amounts under these columns are the result of calculations at
the 5% appreciation and 10% appreciation rates for the full five-year terms
of the options as required by the SEC. The dollar amounts presented are
not intended to forecast possible future appreciation, if any, of the price
of the Common Stock.
The following table sets forth, for each of the named persons, the number of
shares they acquired on exercise of Options in 1996, the aggregate dollar value
realized upon exercise, the total number of shares of Common Stock underlying
unexercised Options and the aggregate dollar value of unexercised, in-the-money
Options, separately identifying the exercisable and unexercisable Options. No
SARs were outstanding in 1996.
AGGREGATED OPTION/SAR EXERCISES IN 1996
FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/
Acquired Options/SARs at FY-End (#) SARs at FY-End
on Value ($)(1)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
---- ---------- -------- ------------- ---------------
<S> <C> <C> <C> <C>
Louis J. Morgan 25,000 57,813 35,166/33,334 30,729/15,834
Howard Meltzer ______ ______ 25,000/50,000 ____________
Michael Press ______ ______ /25,000 ____________
Michael J. Kreutzjans 10,000 33,125 31,999/30,001 27,541/15,834
Jerry M. Traver 13,000 135,688 13,999/30,001 4,478/15,834
- -----------------------
</TABLE>
(1) These values represent the excess, if any, of the fair market value of the
shares of Common Stock subject to Options on December 31, 1996 over the
respective option prices.
COMPENSATION OF DIRECTORS
On May 13, 1994, the Company adopted a policy of paying its non-employee
directors $4,000 per year and, in addition, $750 per meeting. Pursuant to this
policy, non-employee directors were paid an aggregate of $29,750 during the last
fiscal year.
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EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
Effective as of December 2, 1996, the 1989 Employment Agreement between the
Company and Mr. Morgan was replaced by a new Employment Agreement. Mr. Morgan's
current agreement provides for his continued employment by the Company as
Chairman of the Board of Directors at an annual salary of $251,000, an amount
equal to his 1996 base compensation. Pursuant to the Agreement, the Company
shall use its best efforts to nominate Mr. Morgan as director at its next
meeting of shareholders. The Agreement expires December 2, 1997 unless extended
by the parties. The Employment Agreement also contains confidentiality and
nondisclosure provisions.
In July, 1996, the Company and Mr. Meltzer entered into an Employment Agreement.
It provides for (i) the employment of Mr. Meltzer as President and Chief
Operating Officer of the Company, (ii) a minimum annual base salary of $190,000
for the three years beginning July 16, 1996 unless Mr. Meltzer's employment is
earlier terminated in accordance with the Agreement, and (iii) the granting of
certain stock options during its term. Further, the Employment Agreement
provides that upon termination of Mr. Meltzer's employment under certain
circumstances, Mr. Meltzer shall be entitled to additional compensation in an
amount equal to his annual base salary. The Employment Agreement also contains
confidentiality and non-compete provisions.
In July, 1996, Michael Press commenced his employment as Vice President,
Finance, and Chief Financial Officer. On that date, Mr. Press entered into a
letter agreement with the Company which provides that in the event his
employment with the Company is terminated for any reason he would receive an
amount equal to one year of his compensation.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1996 regarding the
beneficial ownership of shares of the Common Stock of the Company by each
director and by all current directors and executive officers as a group.
<TABLE>
<CAPTION>
Beneficial
Ownership of Shares of
of Percent
Name Common Stock of Class
----- ----------------------- ---------
<S> <C> <C>
Louis J. Morgan(1)...................... 374,932 5.1%
Ronald Langley(2)....................... 3,396,400 45.8%
All Directors and Officers as a
Group (4 persons)(1)(2)(3)........... 3,877,496 52.3%
</TABLE>
- -----------------------------
(1) Does not include 275,100 shares of Common Stock held by Mr. Morgan's
spouse, as to which shares Mr. Morgan disclaims any voting or investment
power. Includes 35,166 shares of Common Stock which may be acquired upon
exercise of presently exercisable options.
(2) Mr. Langley, a Director of the Company since 1995, is a Director of PICO
Holdings, Inc. ("PICO"). As such, Mr. Langley may be deemed to
beneficially own the 3,396,400 shares of common stock of the Company over
which shares PICO claimed beneficial ownership in a Schedule 13D filed with
the SEC on December 16, 1996. See "Principal Stockholders." Mr. Langley
disclaims beneficial ownership of these shares within the meaning of 13d-3
of the Securities and Exchange Act of 1934.
(3) Includes 106,164 shares of Common Stock which may be acquired upon exercise
of presently exercisable options.
7
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PRINCIPAL STOCKHOLDERS
The following table sets forth information as of December 31, 1996 regarding
each person other than directors of the Company who were known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock. Each
person named has sole voting and investment power with respect to the shares
beneficially owned by such person. The information presented in the table is
derived from a Schedule 13D filed with the SEC by the named person on December
16, 1996.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership of Shares Percent of Class
- ------------------------------------ ------------------------------ -----------------
<S> <C> <C>
PICO Holdings, Inc. 3,396,400--Direct 45.8%
875 Prospect Street
La Jolla, California
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 14, 1996, the Company entered into an agreement with Physicians
Insurance Company of Ohio, Inc. ("PICO"), which then owned approximately 30% of
the Company's outstanding shares of common stock. Pursuant to the Agreement,
PICO invested $2.5 million in the Company in exchange for a Subordinated
Convertible Debenture (the "Debenture") in the principal amount of $2.5 million
with interest at 1% over prime. PICO made the investment and the Debenture was
issued on December 2, 1996. The Debenture matures on December 31, 2001 and is
convertible at any time by PICO into 1.25 million shares of common stock of the
Company (subject to adjustment in certain cases).
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PC QUOTE, INC.
By:
/s/ LOUIS J. MORGAN
- --------------------------------------------------
Louis J. Morgan, Chairman
By:
/s/ HOWARD MELTZER
- -------------------------------------------------
Howard Meltzer President and Chief Operating Officer
By:
/s/ MICHAEL PRESS
- --------------------------------------------------------
Michael Press Vice President, Finance, Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
/s/ LOUIS J. MORGAN
- ---------------------------------------------
Louis J. Morgan, Director
April 30, 1997
/s/ RONALD LANGLEY
- ----------------------------------------
Ronald Langley, Director
April 30, 1997
9
