<PAGE>
FORM 10-K/A1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
For the transition period from _________ to _________
Commission file number 1-10263
T/SF COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 73-1341805
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2407 EAST SKELLY DRIVE, TULSA, OKLAHOMA 74105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (918) 747-2600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of Each Exchange
- ------------------- on which Registered
-------------------
COMMON STOCK, $0.10 PAR VALUE AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
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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. [_]
As of March 7, 1997, 3,298,076 shares of the registrant's Common Stock were
outstanding. The aggregate market value of those shares held by nonaffiliates
of the registrant on March 7, 1997, was approximately $39,775,000. For this
purpose, the Common Stock was valued at $27.50 per share, being the closing
price on March 7, 1997, on the American Stock Exchange on which the stock is
traded. For purposes of this computation, only officers and directors of the
registrant, the chief operating or executive officer of each of its material
subsidiaries, and beneficial owners of more than 10 percent of the combined
voting power of all voting securities of the registrant, and affiliates of such
persons, were deemed to be affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into this Form 10-K:
1. Registrant's Current Report on Form 8-K, dated August 30, 1996, with
respect to events occurring on August 15, 1996 (Part I, Item 1; Part
III, Items 11 and 13; Part IV, Item 14).
2. Registrant's Form 8-K/A1, dated October 29, 1996, amending the Form 8-K
referenced in 1. above (Part I, Item 1; Part III, Items 11 and 13; Part
IV, Item 14).
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information with respect to each Director
and executive officer, as well as with respect to certain other key employees of
T/SF Communications Corporation ("T/SF", the "Company" or the "registrant").
All Directors of the Company hold office until the next Annual Meeting of
Stockholders and until the election and qualification of their successors. Mr.
Swab, under the terms of his Retirement Agreement, is entitled to be nominated
to serve as a Director of the Company as long as he owns at least 50,000 shares
of Common Stock of the Company. Except as noted, each officer was elected in
1996 at the annual meeting of the Board of Directors to serve for one year or,
if earlier or later, until the next Annual Meeting of the Board of Directors.
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<TABLE>
<CAPTION>
DIRECTOR OR OFFICER
OF THE COMPANY OR
TRIBUNE/SWAB-FOX OR POSITION WITH THE
NAME AGE EMPLOYEE SINCE (1) COMPANY
---- --- -------------------- -----------------------
<S> <C> <C> <C>
Howard G. Barnett, Jr. 46 1984 Chairman, President,
Chief Executive
Officer and Director
Robert E. Craine, Jr. 49 1985 Executive Vice
President and Director
J. Gary Mourton 50 1980 Senior Vice
President-Finance,
Chief Financial
Officer and Treasurer
Martin F. Beck 79 1989 Director
William N. Griggs 65 1989 Director
Mark A. Leavitt 38 1989 Director
David Lloyd Jones 58 1991 Director
Jenkin Lloyd Jones Jr. 60 1984 Director
Robert J. Swab 59 1969 Director
Martin A. Vaughan 70 1984 Director
Stuart P. Honeybone 55 1986 Vice President of the
Company and President
of G.E.M.
Communications, Inc.
("G.E.M.")
Richard A. Wimbish 53 1987 President of
Transportation
Information Services,
Inc. ("TISI")
Robert Frank 44 1996 President of
CORSEARCH, Inc.
("CORSEARCH")
W. Michael Goodwin 46 1996 President and Chief
Executive Officer of
Atwood Convention
Publishing, Inc.
("Atwood") and Galaxy
Registration, Inc.
("Galaxy")
Jimmy C. Strong 62 1990 Vice President-Human
Resources
Linda F. Toon 52 1985 Secretary
</TABLE>
__________________________
(1) As the Company was not formed until 1989, if the date indicated is prior to
1989, this represents the date that the individual was first employed or
became an officer or director of Tribune/Swab-Fox Companies, Inc.
("Tribune/Swab-Fox"), the former parent company of the Company.
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HOWARD G. BARNETT, JR. - Became Executive Vice President of Tribune/Swab-Fox
on January 1, 1985, and was elected President in March, 1991, and Chief
Executive Officer on August 1, 1993. He was elected President of the Company on
its formation in 1989, and was elected Chairman and Chief Executive Officer on
August 1, 1993. For approximately ten years prior to joining Tribune/Swab-Fox,
Mr. Barnett was a member of the law firm of Sneed, Lang, Adams & Barnett, Tulsa,
Oklahoma. Mr. Barnett is the cousin of David Lloyd Jones and Jenkin Lloyd Jones
Jr.
ROBERT E. CRAINE, JR. - Joined Tribune/Swab-Fox in November, 1985, as
President of TSF Capital Corp., a then wholly-owned subsidiary of Tribune/Swab-
Fox. He became Vice President of Tribune/Swab-Fox in May, 1986, and Senior Vice
President in August, 1988. Mr. Craine became Senior Vice President of the
Company upon its formation in 1989 and became Executive Vice President and a
Director in March, 1994. For the 11 years preceding his joining Tribune/Swab-
Fox, Mr. Craine was a member of the law firm of Gable & Gotwals, Inc., Tulsa,
Oklahoma.
J. GARY MOURTON - Joined Tribune/Swab-Fox as Chief Financial Officer in 1980
and became Vice President-Finance and Treasurer in 1984. For the 11 years
prior to that time, Mr. Mourton was with the accounting firm of Arthur Andersen
LLP. Mr. Mourton is a certified public accountant. Mr. Mourton became Senior
Vice President-Finance, Chief Financial Officer and Treasurer of the Company
upon its formation in 1989.
MARTIN F. BECK - Until its sale in 1995, Mr. Beck was Chairman of Beck-Ross
Communications, Inc., Rockville Centre, New York, a company which he founded in
1968 and which owned and operated several radio stations. Mr. Beck has been
involved most of his life in the media business, primarily in radio. He is a
past president of the New York State Broadcasters Association and Past Chairman
of the Radio Board of the National Association of Broadcasters. Mr. Beck is
currently an investor and serves on the Board of Granite Broadcasting Company,
a public media company which owns and operates television stations.
WILLIAM N. GRIGGS - Has been a Managing Director of Griggs & Santow
Incorporated, a financial and economic consulting firm, since 1983. Dr. Griggs
previously served as financial economist at the Federal Reserve Bank of Dallas
and Deputy to the Assistant Secretary of the Treasury responsible for economic
policy. Prior to forming his own firm, Dr. Griggs worked over the years in Wall
Street with Aubrey G. Lanston, Lehman Brothers and J. Henry Schroder Bank &
Trust Company. He currently serves on the Board of Directors of Massachusetts
Mutual Life Insurance Company, and its Investment Policy Committee. Dr. Griggs
received his PH.D from Ohio State University.
MARK A. LEAVITT - Joined Prudential Securities Incorporated, an investment
banking firm, as a Managing Director in 1996. For the nine years prior to
joining Prudential, Mr. Leavitt was with another investment banking firm,
Oppenheimer & Co., Inc., joining it as a Vice President in the Corporate Finance
Department in 1987, and became Senior Vice President in 1989 and Managing
Director on May 1, 1992. For the seven years prior to joining Oppenheimer, Mr.
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Leavitt was with Continental Illinois National Bank, and was a Senior Director
in the Capital Markets Group when he left to join Oppenheimer & Co., Inc.
DAVID LLOYD JONES - Served as Vice President and Director of Tulsa Tribune
Company, a wholly-owned subsidiary of the Company ("Tribune"), from 1984 until
1992. Mr. Jones was elected as a Director of the Company in 1991. Mr. Jones,
with his wife, currently owns and manages a book store in Tulsa, Oklahoma. Mr.
Jones is the cousin of Howard G. Barnett, Jr., and the brother of Jenkin Lloyd
Jones Jr.
JENKIN LLOYD JONES JR. - Was Vice President of Tribune from 1967, and became
Executive Editor of the Tulsa Tribune, a newspaper published by Tribune, in
1975, was made Editor in 1988 and in November, 1991, was made Publisher. Mr.
Jones currently writes for various publications on a contract or a freelance
basis. Mr. Jones is the brother of David Lloyd Jones and a cousin of Howard G.
Barnett, Jr.
ROBERT J. SWAB - Has been associated with Tribune/Swab-Fox and its
predecessors and has served as a Director of such companies from May, 1969, to
May, 1995. He was Executive Vice President, Secretary and Treasurer of
Tribune/Swab-Fox or such predecessors from 1969 through January, 1979, President
from January, 1979, to April, 1980, and Chairman of the Board from April, 1980,
to October, 1984, and Chairman of the Executive Committee from October 1, 1984,
until December, 1994, when he retired.
MARTIN A. VAUGHAN - Is currently the Chairman of the Board, President and
Chief Executive Officer, Director and a major owner of Midwest Energy
Corporation, a privately-held oil and gas exploration company, and of Midwest
Energy Companies, Inc., a public international oil and gas exploration company.
Mr. Vaughan has been with such companies or their predecessors since 1982. Mr.
Vaughan was a Director of Tribune/Swab-Fox from 1984 to May, 1995, and was Vice
Chairman of that Board from August, 1993, to May, 1995.
STUART P. HONEYBONE - Joined Tribune/Swab-Fox in June, 1986, as Vice
President of TSF Capital Corp., a then wholly-owned subsidiary of Tribune/Swab-
Fox, and became Vice President of Tribune/Swab-Fox in 1988. Mr. Honeybone
became Vice President of the Company upon its formation in 1989. Mr. Honeybone
became President of G.E.M. (formerly BMT Communications, Inc.), a wholly-owned
subsidiary of the Company, in December, 1994. From September, 1985, until
joining Tribune/Swab-Fox, Mr. Honeybone was the Owner and Chief Executive
Officer of HBO Management, a consulting firm specializing in problem or troubled
businesses. For the six years preceding this, Mr. Honeybone was with
Hinderliter Industries, Inc. and was Group Vice President, Energy Group, at the
time of his leaving the employ of such company.
RICHARD A. WIMBISH - Joined TISI, a wholly-owned subsidiary of the Company,
as controller in 1987 and became Executive Vice President in 1990. Mr. Wimbish
was made President of TISI in 1991. Prior to joining TISI, Mr. Wimbish was
Controller and Chief Financial Officer of Carlson Reserve Corporation from 1981
through 1986.
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ROBERT FRANK - Founded CORSEARCH in 1983 and has been the President of such
company on a full time basis since such time (CORSEARCH was acquired by T/SF in
August, 1996). Prior to that time, Mr. Frank served as Adjunct Professor at
Ithaca College and also taught at Cornell University.
W. MICHAEL GOODWIN - Joined T/SF in December, 1996, as President and Chief
Executive Officer of both Atwood and Galaxy, wholly-owned subsidiaries of the
Company which together comprise the Company's Exposition Services Division.
Prior to joining Atwood-Galaxy, Mr. Goodwin was founder and President of Falcon
Sports Group, Inc., a company which focused on developing and introducing new
sports media properties. Before forming his own company in 1995, Mr. Goodwin
was Executive Vice President and Chief Operating Officer of Professional Sports
Publications, a publisher of sporting event game day magazines (1992-1995) and
was Vice President of Marketing and Development of Kraft General Foods - Kraft
Dairy Division (1989-1991). From 1984 through 1988, Mr. Goodwin was Director of
New Business Development for General Foods Corporation.
JIMMY C. STRONG - Became Vice President-Human Resources of the Company in
1990. For the year before joining the Company, Mr. Strong was with Hinderliter
Heat Treating, Inc., as Vice President of Human Resources, and was with
Hinderliter Industries, Inc., a diversified manufacturing company, for the
preceding 16 years.
LINDA F. TOON - Has been employed as Assistant to Mr. Barnett since 1985 and
became Secretary of the Company in December, 1995.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. To the Company's
knowledge, based solely on review of the copies of Forms 3, 4 and 5 furnished to
the Company and written representations that no other forms were required, all
persons required to file Forms 3, 4 and 5 during and with respect to 1996 timely
made all required filings, except: W. Michael Goodwin filed his initial Form 3
a month late because he did not realize his position required the filing; Jimmy
C. Strong and Linda F. Toon filed their Form 5's late because they inadvertently
overlooked the fact that the allocation of shares of Common Stock to their
accounts in T/SF'S 401(K) plan required such a filing; and Fir Tree Value Fund,
L.P. and its General Partner, Jeffrey A. Tannenbaum, both filed financial Form
3's late.
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ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION.
Set forth below is certain information with respect to the compensation of
the Company's Chief Executive Officer and each of the Company's and its
subsidiaries' four other most highly compensated executive officers, based on
salary and bonus earned during 1996, for services in all capacities to the
Company and its subsidiaries during each of the Company's last three fiscal
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION (1) AWARDS PAYOUTS
---------------------------------- -------------------------- ---------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
NAME AND COMPEN- STOCK OPTIONS/ LTIP COMPENSA-
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) SATION($) AWARD(S)($)(3) SARS(#)(4) PAYOUTS($) TION ($)(5)
- --------------------------- ---- --------- ----------- --------- -------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Howard G. Barnett, Jr.(6) 1996 270,000 189,000 --- --- 30,000 --- 7,600
Chairman, President and 1995 210,904 175,000 --- --- --- --- 5,575
Chief Executive Officer 1994 207,704 77,889 --- 77,889 75,000 --- 5,544
J. Gary Mourton 1996 166,400 116,480 --- --- 21,000 --- 6,541
Senior Vice President & 1995 157,410 63,000 --- --- --- --- 5,047
Chief Financial Officer 1994 151,410 34,067 --- 34,067 37,500 --- 4,620
Robert E. Craine, Jr. 1996 159,000 111,300 --- --- 21,000 --- 6,418
Executive Vice President 1995 150,000 55,000 --- --- --- --- 5,154
1994 133,900 30,127 --- 30,127 37,500 --- 4,107
Richard A. Wimbish 1996 155,000 41,491 --- --- 10,000 --- 5,429
President, TISI 1995 140,000 36,083 --- --- --- --- 4,959
1994 125,000 36,192 --- --- 22,500 --- 3,960
Stuart P. Honeybone 1996 154,000 107,800 --- --- 21,000 --- 7,585
Vice President 1995 132,000 52,000 --- --- 15,000 --- 5,369
___________________ 1994 120,150 27,500 --- --- 10,000 --- 4,064
</TABLE>
(1) No cash compensation other than the annual amounts described was paid to any
of the named executives attributable to the period shown. Certain
executives are also entitled to car allowances or are provided cars, and
club dues are paid for certain executives. The value of such perquisites is
not required to be disclosed because the aggregate amount of such
compensation does not exceed the lesser of $50,000 or 10 percent of the
total amount of annual salary and bonus for any named executive.
(2) Includes bonuses earned for the year, even if paid in another year.
(3) Under the T/SF Communications Corporation 1994 Incentive Stock Plan (the
"Incentive Stock Plan"), approved by the stockholders of the Company at the
1994 Annual Meeting of Stockholders, one-half of the 1994 bonus paid to
Howard G. Barnett, Jr., J. Gary Mourton and Robert E. Craine, Jr., was paid
in the form of restricted stock grants. The amount shown here represents
the dollar amount of such stock grants, which were granted at a rate of
$6.25 per share, being the closing price on the American Stock Exchange for
Common Stock on December 30, 1994 (the last trading day of 1994). Each such
stock grant vests 100 percent
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after three years, assuming the employee is then employed by the Company
(subject to earlier vesting in the case of death or disability of the
employee). Dividends are payable on the restricted stock to the same extent
as would be paid on Common Stock. There are no other outstanding restricted
stock grants to such persons. As of December 31, 1996, Mr. Barnett held
12,462 shares of restricted Common Stock, valued at $345,820 in the
aggregate; Mr. Mourton held 5,451 shares of restricted Common Stock, valued
at $151,265 in the aggregate; and Mr. Craine held 4,820 shares of restricted
Common Stock, valued at $133,755 in the aggregate. Values as of December 31,
1996, of restricted Common Stock are based on the closing price on the
American Stock Exchange for Common Stock on December 31, 1996 (the last
trading day of 1996).
(4) Consists solely of options to acquire shares of Common Stock.
(5) These amounts represent the total value of the Company's contributions made
or accrued to the Company's 401(k) plan. All such persons are 100 percent
vested in their accounts under the Company's plan.
(6) The cash compensation shown for Howard G. Barnett, Jr., in the table does
not include amounts paid to him as a director of Tribune/Swab-Fox in 1994
and 1995. Employees who are Directors of the Company do not receive fees
from the Company as Directors.
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OPTIONS.
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company and its subsidiaries
during 1996, and the number and value of unexercised options held by such
persons at the end of the year. The Company has never granted any stock
appreciation rights.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
-------------------------------------
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDER- IN-THE-MONEY
LYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT AT FISCAL YEAR-
FISCAL YEAR-END END ($) (1)(2)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ------------------------ --------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Howard G. Barnett, Jr. -0- -0- 30,000/75,000 382,500/1,762,500
J. Gary Mourton -0- -0- 21,000/37,500 267,750/881,250
Robert E. Craine, Jr. -0- -0- 21,000/37,500 267,750/881,250
Richard A. Wimbish -0- -0- -0-/32,500 -0-/667,500
Stuart P. Honeybone -0- -0- 21,000/25,000 267,750/561,250
</TABLE>
(1) Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
(2) The closing price for Common Stock on the American Stock Exchange on
December 31, 1996, the last trading day of the fiscal year, was $27.75.
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The following table sets forth certain information with respect to options
granted to the named executive officers of the Company and its subsidiaries
during 1996. The Company has never granted any stock appreciation rights.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ---------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (2)
OPTIONS/SARS EMPLOYEES IN OR BASE EXPIRATION ---------------------------
NAME GRANTED(#)(1) FISCAL YEAR PRICE($SH) DATE 5%($) 10%($)
---- ------------- ------------ ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Howard G. Barnett, Jr. 30,000(3) 19.61 $ 15.00 3/18/03 135,700 361,200
J. Gary Mourton 21,000(3) 13.73 15.00 3/18/03 95,000 252,800
Robert E. Craine, Jr. 21,000(3) 13.73 15.00 3/18/03 95,000 252,800
Richard A. Wimbish 10,000(4) 6.54 13.875 3/18/06 87,700 221,100
Stuart P. Honeybone 21,000(3) 13.73 15.00 3/18/03 95,000 252,800
</TABLE>
(1) Consists solely of options to acquire shares of Common Stock. The option
exercise price may be paid in cash, by delivery of already-owned shares, and
in some instances by offset of the underlying shares, or by a combination of
such methods. Tax withholding obligations, if any, related to exercise may
be paid by offset of the underlying shares, subject to certain conditions.
(2) Potential realizable value illustrates the value that might be realized upon
exercise of the options immediately prior to the expiration of their term
(ten years from the date of grant as to the options granted Mr. Wimbish and
seven years from the date of grant as to all other options in the table),
assuming that the Common Stock appreciates in value from the date of grant
to the end of the option term at rates of 5 percent and 10 percent,
respectively, compounded annually.
(3) These options were granted for a term of seven years, subject to earlier
termination in certain events related to the termination of employment. The
exercise price of $15.00 was higher than the $13.88 per share market price
of the Common Stock on the date of grant. These options vested in three
traunches as the price of the Common Stock reached $18.00, $21.00 and
$24.00, all of which were achieved in 1996.
(4) The options were granted for a term of ten years, subject to earlier
termination in certain events related to the termination of employment. The
exercise price of the options is equal to the fair market value of the
Common Stock on the date of grant. The options become exercisable in full
on March 18, 1999.
COMPENSATION OF DIRECTORS. Employee Directors receive no additional
compensation for service on the Board of Directors or any committee thereof.
Nonemployee Directors are paid a fee of $7,500 per year, plus an attendance fee
of $500 per meeting. Nonemployee Directors receive an additional fee of $1,500
per year for each committee of the Board of Directors on which they serve, plus
an attendance fee of $500 per committee meeting. Also, Directors who serve as
chairman of a board committee receive an additional $1,500 annually. All
Directors are reimbursed by the Company for out-of-pocket expenses incurred by
them in connection with their service on the Board of Directors and any
committee thereof. In addition to the fees paid to Dr.
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Griggs for serving as a Director of the Company, the Company has agreed to pay
the firm of Griggs & Santow Incorporated, economists and consultants, $5,000
annually for periodic consulting services.
EMPLOYMENT AGREEMENTS. As of April 22, 1997, the Company was subject to
employment agreements with certain directors, officers or key employees, as
follows:
David Lloyd Jones - As part of Tribune's termination of the Joint
Operating Agreement ("JOA") with World Publishing Company ("World"), which
resulted in the closure of The Tulsa Tribune, Director David Lloyd Jones'
employment with Newspaper Printing Corporation ("NPC") was terminated and he was
no longer needed as an employee of Tribune. A severance arrangement was entered
into by the Company whereby Mr. Jones is employed by the Company for special
projects and is paid $50,000 per year through March, 1999. This severance
payment is in lieu of severance to which Mr. Jones would have been entitled
under the Company's package for other Tribune newsroom employees of NPC.
Jenkin Lloyd Jones Jr. - In the same way as for David Lloyd Jones,
Jenkin Lloyd Jones Jr.'s employment with NPC was terminated upon the termination
of the JOA with World. A severance arrangement was entered into by the Company
whereby Mr. Jones is employed by the Company for special projects and is paid
$33,333 per year through December, 1998. This severance package is in lieu of
severance to which Mr. Jones would have been entitled under the Company's
package for other Tribune newsroom employees of NPC.
W. Michael Goodwin - Mr. Goodwin was hired by the Company in December,
1996, to serve as President and Chief Executive Officer of its Exposition
Services Division, which includes Atwood and Galaxy. Mr. Goodwin was employed
pursuant to an Employment Agreement which extends to December 31, 1997, at a
base salary of $165,000 annually. The Employment Agreement provides for various
incentives and bonus possibilities, with $20,000 of such bonus guaranteed.
Pursuant to such Employment Agreement, Mr. Goodwin was granted on January 16,
1997, options for 20,000 shares of Common Stock of the Company at an exercise
price of $28.00 per share, the closing price of the Common Stock on the American
Stock Exchange on such date of grant. The options, granted under the Incentive
Stock Plan, are for a period of ten years, and vest 100% as of the date three
years after the date of grant, or January 16, 2000.
Richard A. Wimbish - In November, 1996, the Company announced that it had
engaged Prudential Securities Incorporated, to help it explore strategic
alternatives affecting TISI, including a possible sale, of which Mr. Wimbish is
President. As the Company has done in the past in connection with the possible
divestiture of a division, the Company entered into agreements with the senior
managers of TISI to (i) ensure their continued presence at TISI during the time
which such strategic alternatives are being explored, and (ii) provide an
incentive to such employees to ensure that the maximum consideration is received
by the Company in connection with any such transaction, if consummated. As to
Mr. Wimbish, the Company caused TISI to enter into an Employment Agreement with
him, effective January 1, 1997, which provides for the following, among other
things:
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. A salary in 1997 of $165,000 and in 1998 of $175,000.
. Bonus plans consistent with prior practices of TISI (reference is made to
the above compensation table for information concerning Mr. Wimbish's
historical bonus earnings).
. If a transaction is effective with respect to TISI which results in the
change of control of TISI (except in certain circumstances), Mr. Wimbish
is entitled to a bonus equal to 1/2 of 1% of the total consideration
received by the Company in such transaction. In addition, in connection
with any such transaction, all options granted, but then unvested, to Mr.
Wimbish are deemed vested and he receives an additional bonus determined
in accordance to the following formula: 10,000 x (X-28), where X is the
price of the Common Stock of the Company on the date immediately
preceding the closing of any such transaction.
. If Mr. Wimbish is terminated at any time after any such change in control
transaction, he receives a severance package equal to two years of his
then base salary.
Robert Frank - In connection with the acquisition of CORSEARCH in August,
1996, CORSEARCH entered into an Employment Agreement with Mr. Frank employing
him as its President through December 31, 1999. Mr. Frank is employed at a
salary of $236,250 in 1997, subject to five percent annual raises if certain
income targets for CORSEARCH are achieved each year. Mr. Frank can receive
bonuses based on the net income of CORSEARCH being over certain thresholds each
year. Under the Agreement by which CORSEARCH was acquired, in the year 2000,
Mr. Frank can receive additional payments for his interest in CORSEARCH sold to
the Company based on the earnings of CORSEARCH in 1997, 1998 and 1999.
Reference is made to the Company's Current Report on Form 8-K, dated August 30,
1996, as amended by the Company's Form 8-K/A1, dated October 29, 1996, for a
complete description of Mr. Frank's earnout arrangement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Certain
members of the Compensation Committee receive compensation from the Company by
reason of other activities for the Company, either currently or previously. The
Compensation Committee of the Board is composed of four members: David Lloyd
Jones, Mark A. Leavitt, Robert J. Swab and William N. Griggs. As noted above,
Mr. Jones is subject to an employment agreement with the Company, though the
Company considers Mr. Jones as an independent director as such agreement is in
lieu of a severance package that Mr. Jones would have received in connection
with his termination of full-time employment with Tribune, a wholly-owned
subsidiary of the Company. As noted below in item 13. Certain Relationships and
Related Transactions, Mr. Leavitt was a Managing Director of Oppenheimer &
Co., Inc., which has acted as investment banker for the Company in several
previous transactions. Mr. Leavitt is currently a Managing Director of
Prudential Securities Incorporated which has been engaged by the Company to
review the possible strategic alternatives with respect to TISI. Mr. Swab is
subject to a retirement agreement with the Company. Dr. Griggs, in addition to
payment received as a director of the Company, also receives $5,000 annually to
provide consulting services with respect to his employment as a consulting
economist.
12
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of April 22, 1997 (except for Dimensional Fund
Advisors Inc., as to which the information is as of December 31, 1995, the
effective date of its Schedule 13G filing notifying the Company of its
ownership, which has not been amended, and Fir Tree Partners, to which the
information is as of March 31, 1997, the effective date of its last Form 4
filing notifying the Company of its ownership), for each beneficial owner of
more than five percent of the Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES APPROXIMATE PERCENTAGE
NAME AND ADDRESS OF OF COMMON STOCK OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICALLY OWNED(1)
- ------------------- ------------------ ----------------------
<S> <C> <C>
Florence Lloyd Jones
Barnett (2)
2619 East 37th Street
Tulsa, OK 74105 658,239 19.9%
Howard G. Barnett, Jr. (3)
6742 South Evanston
Tulsa, OK 74136 760,489 22.3%
Jenkin Lloyd Jones Jr. (4)
6447 S. Louisville
Tulsa, OK 74136 231,251 7.0%
Fir Tree Partners (5)
29th Floor
1211 Avenue of the Americas
New York, NY 10036 450,806 13.7%
Dimensional Fund Advisors
Inc. (6)
11th Floor
1299 Ocean Avenue
Santa Monica, CA 90401 231,400 7.0%
</TABLE>
- -----------------------------------------
(1) The percentage ownership of each holder shown was determined assuming only
vested options or other rights to acquire Common Stock owned by such holder
had been exercised.
(2) Of the 658,239 shares of Common Stock beneficially owned by Mrs. Barnett,
466,139 shares are owned by her and Howard G. Barnett, Jr., as Co-Trustees
of the Revocable Inter Vivos Trust of Florence Lloyd Jones Barnett, which
shares are also included in the beneficial ownership of Howard G. Barnett,
Jr., and 192,100 shares are owned by Mrs. Barnett as Trustee of the Florence
Lloyd Jones Barnett Charitable Remainder Unitrust. Mrs. Barnett's ownership
does not include 2,510 shares beneficially owned by her husband, Howard G.
Barnett, which shares are included in the ownership of Howard G. Barnett,
Jr. Mrs. Barnett disclaims beneficial ownership of the shares held by her
husband.
13
<PAGE>
(3) Of the 760,489 shares of Common Stock beneficially owned by Mr. Barnett,
175,346 shares are beneficially owned directly for his own account (12,462
shares are restricted until January, 1998, except as to voting rights) and
135 shares are held by the T/SF Communications Savings and Retirement Plan
and allocated to Mr. Barnett's account. In addition, Mr. Barnett is the
beneficial owner of 466,139 shares of Common Stock owned by Florence Lloyd
Jones Barnett (Mr. Barnett's mother) and Mr. Barnett, as Co-Trustees of the
Revocable Inter Vivos Trust of Florence Lloyd Jones Barnett, and 2,510
shares of Common Stock owned by Howard G. Barnett (Mr. Barnett's father) and
Mr. Barnett, as Co-Trustees of the Revocable Inter Vivos Trust of Howard G.
Barnett. The ownership for Mr. Barnett includes 105,000 shares attributable
to vested options under the Company's 1994 Incentive Stock Plan and
Incentive Stock Option Plan. Also, Mr. Barnett is the beneficial owner of
11,359 shares of Common Stock (excluding the 135 shares allocated to Mr.
Barnett's account) owned by the T/SF Communications Corporation Savings and
Retirement Plan of which Mr. Barnett is the Trustee. The stock ownership of
Mr. Barnett does not include shares held by his wife, Billie T. Barnett
(26,602 shares). Mr. Barnett disclaims beneficial ownership of the shares
held by his wife.
(4) The ownership shown for Jenkin Lloyd Jones Jr. is derived as follows: 93,465
shares of Common Stock owned by Jenkin Lloyd Jones Jr. and Carol B. Jones,
as Co-Trustees of the Revocable Inter Vivos Trust of Jenkin Lloyd Jones Jr.,
4,641 shares owned by Carol B. Jones and Jenkin Lloyd Jones Jr., as Co-
Trustees of the Revocable Inter Vivos Trust of Carol B. Jones, 29 shares
held by the T/SF Communications Savings and Retirement Plan and allocated to
Mr. Jones Jr.'s account, and 133,116 shares owned by the Revocable Inter
Vivos Trust of Jenkin Lloyd Jones, of which Jenkin Lloyd Jones and Jenkin
Lloyd Jones Jr. are Co-Trustees.
(5) As shown on Form 4 filed as of March 31, 1997, shares owned beneficially by
Fir Tree, Inc., a New York corporation, doing business as Fir Tree Partners,
and Jeffrey Tannenbaum, the sole stockholder, executive officer, director
and principal of Fir Tree Partners, for the account of Fir Tree Value Fund,
L.P., of which Mr. Tannenbaum is the general partner, Fir Tree Institutional
Value Fund, L.P. of which Mr. Tannenbaum is a member of the General Partner,
and Fir Tree Value Partners LDC which has an Investment Advisory Agreement
with Mr. Tannenbaum.
(6) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 231,400 shares of Common
Stock as of December 31, 1995 (the date of the last filing by Dimensional,
which filing has not been amended), all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
14
<PAGE>
The following table sets forth the beneficial ownership of the Common Stock
held by each Director of the Company, each of the executive officers of the
Company or its subsidiaries named in the Summary Compensation table above and
all executive officers and Directors, as a group, as of April 22, 1997.
<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF SHARES PERCENTAGE OF
OF COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY
NAME AND POSITION (1) OWNED(2)
----------------- ------------------ --------------
<S> <C> <C>
Howard G. Barnett, Jr.,
Chairman, President and
Chief Executive Officer,
Director (3) 760,489 22.3
Martin F. Beck, Director 1,000 --
Robert E. Craine, Jr.,
Executive Vice President,
Director (4) 94,803 2.8
William N. Griggs, Director -0- --
Stuart P. Honeybone, Vice
President (5) 31,177 .9
David Lloyd Jones, Director 33,181 1.0
Jenkin Lloyd Jones Jr.,
Director (6) 231,251 7.0
Mark A. Leavitt, Director 1,000 --
J. Gary Mourton, Senior
Vice President-Finance (7) 97,124 2.9
Robert J. Swab, Director 112,180 3.4
Richard A. Wimbish,
President, TISI (8) 23,995 .7
Martin A. Vaughan,
Director (9) 53,024 1.6
All Executive Officers and
Directors as a group, 16
persons (10) 1,440,232 40.3
- --------------------------
</TABLE>
(1) Each of the beneficial owners has sole voting and investment power with
respect to the securities specified, except as noted in the footnotes
below. Included are vested options held by each person under the Company's
Incentive Stock Option Plan and Incentive Stock Plan.
(2) Percentages are determined for each holder assuming that only vested
options or other rights to acquire Common Stock owned by the holder had
been exercised
(3) The beneficial ownership for Mr. Barnett is determined as described in
footnote 3 of the preceding table.
(4) Included in Mr. Craine's ownership are 4,820 shares which are restricted
until 1998 except as to voting rights, 149 shares held by T/SF
Communications Savings and Retirement Plan and
15
<PAGE>
allocated to Mr. Craine's account and 58,500 shares attributable to
vested options held by Mr. Craine.
(5) Included in Mr. Honeybone's ownership are 177 shares held by T/SF
Communications Savings and Retirement Plan and allocated to Mr. Honeybone's
account and 31,000 shares attributable to vested options held by Mr.
Honeybone.
(6) The beneficial ownership of Mr. Jones Jr. is determined as described in
footnote 4 of the preceding table.
(7) Included in Mr. Mourton's ownership are 5,451 shares which are restricted
until 1998 except as to voting rights, 146 shares held by T/SF
Communications Savings and Retirement Plan and allocated to Mr. Mourton's
account and 58,500 shares attributable to vested options held by Mr.
Mourton.
(8) Included in Mr. Wimbish's ownership are 158 shares held by T/SF
Communications Savings and Retirement Plan and allocated to Mr. Wimbish's
account and 22,500 shares attributable to vested options held by Mr.
Wimbish.
(9) The shares shown as owned by Mr. Vaughan exclude 42,421 shares of Common
Stock held by his wife, Nancy Swab Vaughan, directly, and 28,643 shares of
Common Stock held by his wife as Co-Trustee of the Revocable Inter Vivos
Trust of John T. Swab. Mr. Vaughan disclaims beneficial ownership in any
such shares. Mr. Vaughan's stock holdings in the table include 29,833
shares of Common Stock held by Midwest Resources, Inc., a private company
of which Mr. Vaughan is president, and 3,639 shares of Common Stock held by
Maverick Exploration, Inc., of which Mr. Vaughan owns 100 percent. The
trustees of the Revocable Inter Vivos Trust of John T. Swab are Nancy Swab
Vaughan, wife of Martin A. Vaughan, and John Stephen Swab.
(10) Includes 1,163,819 shares of Common Stock owned directly (of which 22,733
shares are restricted until 1998 except as to voting rights), 913 shares
held by T/SF Communications Savings and Retirement Plan and allocated to
officers' accounts and 275,500 shares of Common Stock related to vested
options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By reason of the merger ("Merger") of Tribune/Swab-Fox, then the owner of
78% of the Common Stock of the Company, with and into the Company in May, 1995,
the Company was substituted for Tribune/Swab-Fox as a lender under a Loan
Agreement with Howard G. Barnett, Jr., Chairman, President and Chief Executive
Officer, that arose in 1984 in connection with the merger of Tribune and the
predecessor to Tribune/Swab-Fox. During 1996, the maximum amount of Mr.
Barnett's loan was $233,333 and that amount represented the amount outstanding
under such loan at December 31, 1995. The balance of such loan as of December
31, 1996, was $200,000 and was $183,333 as of April 22, 1997. As of May 1,
1995, this loan became an installment loan requiring amortization of principal
in semi-annual installments (plus accrued interest at 8.5 percent per annum)
equal to 1/15th of the outstanding principal balance, with the first installment
having been due and paid October 1, 1995, with semi-annual payments thereafter
with the remaining principal and interest being due on October 1, 1999. Mr.
Barnett has pledged 87,279 shares of Common Stock to secure this loan.
16
<PAGE>
On December 14, 1994, Tribune/Swab-Fox entered into a retirement agreement
(the "Retirement Agreement") with Mr. Swab and the Company is bound by the terms
thereof as a result of the Merger. The Retirement Agreement had certain
conditions relating to Mr. Swab's participation in the Merger, all of which were
fulfilled. Pursuant to Mr. Swab's Retirement Agreement, effective December 31,
1994, the following matters, which are now binding on the Company as a result of
the Merger, were agreed to:
(i) Commencing January, 1995, for 72 consecutive months, Mr. Swab will be
paid the amount of $5,130 per month.
(ii) Mr. Swab entered into a Covenant-Not-to-Compete (with 30 percent of
the payments described in (i) above being allocated for such
Covenant-Not-to-Compete).
(iii) Mr. Swab's loan (previously having a principal balance of $325,000)
was reduced to an outstanding balance of $299,317, bearing interest,
payable quarterly, at 9 percent per annum, with $25,000 of principal
payable each year, and the remaining balance due May 31, 1998. The
maximum balance outstanding on such loan during 1996 was $299,317,
the amount outstanding at December 31, 1995, which was paid in full
on January 3, 1996, in connection with the purchase of 30,000 shares
of Common Stock from Mr. Swab at $10.50 per share and amendment of
the Retirement Agreement to eliminate its "puts" and "calls" and
their enforceability.
(iv) As long as Mr. Swab owns at least 50,000 shares of Common Stock, he
will be nominated to serve as a director of the Company.
In March, 1996, Mrs. Florence Lloyd Jones Barnett transferred 200,000
shares of Common Stock to a charitable remainder trust (the "Trust"), of which
she is the sole trustee. Under the terms of the Trust, it was obligated to pay
Mrs. Barnett $191,000 in cash in December, 1996. To raise such cash, the Trust
sold 7,900 shares of Common Stock to the Company in December, 1996, at $24.94
per share (or a total purchase price of $192,100), which price was equal to 95%
of the average closing price of the Common Stock on the American Stock Exchange
for the ten trading days preceding December 20, 1996.
In August, 1996, the Company acquired CORSEARCH. Reference is made to the
Company's Current Report on Form 8-K, dated August 30, 1996, as amended by the
Company's Form 8-K/A1, dated October 29, 1996, for information on the benefits
to and agreements with Robert Frank, President of CORSEARCH, as a result of such
acquisition.
In 1996, Oppenheimer & Co., Inc., was paid a retainer to search for
possible acquisitions for the Company. Mr. Leavitt was a Managing Director of
Oppenheimer & Co., Inc., until 1996 when he moved to Prudential Securities
Incorporated as a Managing Director. In November, 1996, the Company engaged
Prudential Securities Incorporated to advise the Company in exploring strategic
alternatives, including the possible sale of TISI.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
T/SF COMMUNICATIONS CORPORATION
Date: April 29, 1997 By: /s/ Howard G. Barnett, Jr.
------------------------------------
Howard G. Barnett, Jr.
Chairman, President and
Chief Executive Officer
18
