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As filed March 14, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
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
Commission File Number 1-10718
TPC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 76-0091595
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 WESTLAKE PARK BOULEVARD
SUITE 1000
HOUSTON, TEXAS 77079
(Address of principal executive offices)
(281) 597-6200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
(Each class is registered on the New York Stock Exchange):
CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE
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
--- ---
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. [ ]
THE AGGREGATE MARKET VALUE OF THE VOTING COMMON STOCK, PAR VALUE $0.01 PER
SHARE, HELD BY NONAFFILIATES OF THE REGISTRANT AS OF MARCH 7, 1997 WAS
APPROXIMATELY $145,176,000.
AS OF MARCH 7, 1997, THE REGISTRANT HAD OUTSTANDING 17,424,252 SHARES OF CLASS
A COMMON STOCK (NET OF 470,000 TREASURY SHARES), PAR VALUE $.01 AND 579,963
SHARES OF CLASS B, SERIES A COMMON STOCK, PAR VALUE $.01.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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ITEM 11. EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Employee directors are not compensated for their services as a director
of TPC. In 1996, each nonemployee director was paid $3,000 per quarter, $1,000
per Board meeting attended and $500 for each committee meeting attended.
Nonemployee directors participate in both the Non-Management Director
Stock Option Plan (the "1992 Director Plan") and the 1995 Stock Option Plan for
Non-Employee Directors (the "1995 Director Plan"), which were respectively
adopted on February 4, 1992 and February 13, 1995. The 1992 Director Plan
provides for nonqualified stock options to purchase up to 100,000 Shares, in
the aggregate, by TPC's outside directors. The 1995 Director Plan provides for
nonqualified stock options to purchase up to 48,000 Shares, in the aggregate,
by TPC's outside directors.
Under the 1992 Director Plan, each director, on the date of the Board
meeting following his initial election to the Board, is granted an option to
purchase 10,000 Shares, which option vests ratably over a five year period.
Under the 1995 Director Plan, on May 15th of each year (or the first succeeding
business day thereafter) each nonemployee director receives an annual option
grant to purchase 2,000 Shares, which options also vest ratably over five
years. The exercise price for the options granted under both the 1992 Director
Plan and the 1995 Director Plan is the fair market value of TPC's Shares on the
date of grant.
The following table sets forth information with respect to the Chief
Executive Officer and the other four most highly compensated executive officers
of TPC (the "Named Officers") for the fiscal year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------------------
OTHER ANNUAL SHARES ALL OTHER
COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($)(1) ($) (3) OPTIONS (#)(4) ($) (5)
- --------------------------- ---- ------------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Larry W. Bickle .......................... 1996 162,000 189,200 9,973 35,000 3,136
Chairman of the Board and 1995 157,500 62,235 (2) 10,728 10,000 9,492
Chief Executive Officer 1994 108,000 137,699 12,668 50,000 19,310
John A. Strom ............................ 1996 162,000 189,200 9,973 35,000 3,136
President 1995 157,500 62,235 (2) 10,728 10,000 9,492
1994 108,000 137,699 12,668 50,000 19,310
J. Chris Jones ........................... 1996 162,000 189,200 9,973 35,000 3,566
Senior Vice President, Chief 1995 157,500 62,235 (2) 10,728 10,000 9,492
Operating Officer and Chief Financial 1994 108,000 137,699 12,668 50,000 19,310
Officer
Ronald H. Benson ......................... 1996 84,000 341,000 1,192 15,000 4,224
Vice President-Corporate Development 1995 84,000 59,485 (2) 243 -- 1,053
1994 3,500 -- -- 50,000 --
Michael E. Calderone ..................... 1996 106,800 147,050 685 15,000 4,199
Vice President-Gas Marketing 1995 87,508 84,571 (2) 2,322 25,000 9,492
1994 84,000 92,288 3,669 57,125 3,669
</TABLE>
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(1) Amounts include cash compensation earned and received by the Named
Officers as well as amounts deferred under a 401(k) Savings Plan.
(2) A portion of each Named Officer's third quarter 1995 bonus was deferred
until the first quarter of 1996. The amounts deferred for each of the
Named Officers, respectively, was $105,750, $105,750, $105,750, $300,000
and $100,000.
(3) Amounts shown include car allowances paid to the Named Officers, the
value of financial planning services and the payment of insurance
premiums for long-term disability coverage.
(4) All options awarded in 1994, 1995 and 1996 were granted under the terms
of TPC's 1994 Stock Option Plan (the "1994 Plan").
(5) Amounts shown are derived from TPC contributions to the 401(k) Savings
Plan and to TPC's Employee Stock Option Plan (the "ESOP"). The respective
amounts paid under each plan are shown in the following table. TPC's ESOP
contributions to each of the Named Officers for 1996 will not be
calculated until the second quarter of 1997.
<TABLE>
<CAPTION>
NAME YEAR 401(k) ($) ESOP ($)
- ---- ---- --------- -------
<S> <C> <C> <C>
Larry W. Bickle 1996 3,136 --
1995 2,310 7,182
1994 2,310 17,000
John A. Strom 1996 3,136 --
1995 2,310 7,182
1994 2,310 17,000
J. Chris Jones 1996 3,566 --
1995 2,310 7,182
1994 2,310 17,000
Ronald H. Benson 1996 4,224 --
1995 1,053 --
1994 -- --
Michael E. Calderone 1996 4,199 --
1995 2,310 7,182
1994 1,785 1,884
</TABLE>
The following table shows, as to the Named Officers, information about
option grants in the last fiscal year. TPC does not grant any stock
appreciation rights. The fair value of each option grant is estimated as of the
date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions: a risk-free interest rate of 6.206%, expected
volatility of 33%, a dividend yield of 0% and an expected option term of four
years. No gain to the options is possible without an increase in stock price
which will benefit all stockholders proportionately. Actual gains, if any, on
option exercises and common stockholdings are dependent on the future
performance of the shares of TPC's Class A Common Stock (the "Shares"). There
can be no assurance that the actual realized values will not be greater or less
than potential realizable values shown in this table.
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OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
PERCENT OF
TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) IN 1996 ($/SH)(2) DATE PRESENT VALUE($)
---- -------------- ---------- ------------ ---------- ----------------
<S> <C> <C> <C> <C> <C>
Larry W. Bickle........... 35,000 8.5% 8.25 5/15/06 102,212
John A. Strom............. 35,000 8.5% 8.25 5/15/06 102,212
J. Chris Jones............ 35,000 8.5% 8.25 5/15/06 102,212
Ronald H. Benson.......... 15,000 3.7% 8.25 5/15/06 43,805
Michael E. Calderone...... 15,000 3.7% 8.25 5/15/06 43,805
</TABLE>
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(1) Options granted under the 1994 Plan. Options generally are
nontransferable and vest ratably over four years.
(2) The exercise price is the closing market price per share of the Shares on
the date of grant, as reported on the New York Stock Exchange Composite
Tape.
The following table shows aggregate fiscal year-end option values for the
Named Officers. No options were exercised during the last fiscal year by any of
the Named Officers. TPC does not grant any stock appreciation rights.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT YEAR-END OPTIONS AT YEAR-END($)(1)(2)
SHARES ACQUIRED VALUE -------------------------- -------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry W. Bickle......... -- -- 567,313 67,500 2,611,345 26,250
John A. Strom........... -- -- 567,313 67,500 2,611,345 26,250
J. Chris Jones.......... -- -- 567,313 67,500 2,611,345 26,250
Ronald H. Benson........ -- -- 25,000 40,000 -- 11,250
Michael E. Calderone.... -- -- 36,013 63,112 2,100 12,650
</TABLE>
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(1) Based on the closing market price of $9.00 per Share as reported on the
New York Stock Exchange Composite Tape for December 31, 1996. These
amounts do not reflect the actual amounts, if any, which may be realized
in the future upon exercise of stock options and should not be considered
indicative of future stock performance.
(2) As amended by the Form 10-K/A1 filed by TPC on March 14, 1997.
SENIOR EXECUTIVE PERFORMANCE BONUS AND SEVERANCE PACKAGE
Pursuant to a resolution of the TPC Board of Directors in November 1996,
Messrs. Larry Bickle, John Strom and Chris Jones (the "Senior Executives"), are
entitled to receive a cash bonus upon the consummation of a change in control
of TPC prior to December 31, 1997, measured by their performance in obtaining a
premium to the then current market price for TPC's Shares in such a
transaction.
If the entire Company is sold for a per Share price equal to $15.50, the
Senior Executives will each receive a Performance Bonus equal to two times his
Base Amount (being the respective Senior Executive's base amount on
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the date of the consummation of the change in control as determined in
accordance with Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code")). A per Share price between $10.50 and $15.50 will entitle each of
the Senior Executives to a performance bonus equal to the interpolated value;
i.e., four-tenths of their Base Amount for each dollar of per Share value
between $10.50 and $15.50. For example, a per Share sales price of $12.00
results in a Performance Bonus equal to six-tenths of the Senior Executive's
Base Amount. In addition thereto, if a per Share price in excess of $15.50 is
received, each of the Senior Executives will be entitled to an additional
one-half of the Base Amount for each dollar of Share value in excess of $15.50.
If the entire Company is sold for a per Share price less than or equal to
$10.50, the Senior Executives will not receive any performance bonus.
Each Senior Executive will also be entitled to a severance payment equal
to his respective Base Amount, plus the cost to continue his medical and dental
health benefits for up to two years following the consummation of the
transaction. The value of the benefits to be paid to any one of the Senior
Executives, as a result of a change of control in TPC, shall be limited so as
to escape application of the excise tax imposed on excessive change of control
payments.
CHANGE OF CONTROL AGREEMENTS
TPC is a party to a change in control agreement (a "Change in Control
Agreement") with certain officers, key employees, affiliate employees and
consultants (each a "Named Executive") of TPC. Under the Change in Control
Agreement, if, prior to the expiration or termination thereof, a change in
control (as defined in the Change in Control Agreement) occurs, each Named
Executive would be entitled to receive (i) a retention bonus equal to a
specified multiple of their Base Amount, and (ii) if, thereafter TPC or, in
certain circumstances, the Named Executive, terminates the Named Executive's
employment and, in the case of termination by TPC "cause" (as defined in the
Change in Control Agreement) for such termination does not exist, a cash
severance benefit equal to a specified multiple of the Named Executive's Base
Amount, as provided in the respective agreement of each Named Executive. Each
Named Executive would also be entitled to COBRA continuation for a period of
twenty-four months following such termination at no cost to the Named
Executive. In the event that any Named Executive's receipt of all payments
under the Change in Control Agreement would subject such Named Executive to the
excise tax imposed by Section 4999 of the Code, then the aggregate present
value of all payments to such Named Executive shall be reduced to an amount,
expressed in present value, which maximizes the aggregate present value of the
payment, without causing any payment to be nondeductible by TPC because of Code
Section 280G, or subject the Named Executive to such excise tax. The Change in
Control Agreements with the Named Executives will expire on November 8, 1997,
provided however, that the term shall automatically be extended without further
action by the parties for additional one year periods, unless TPC gives a Named
Executive six months written notice of its intent not to extend the current
term of the respective Change in Control Agreement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, TPC Corporation has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on March 14, 1997.
TPC CORPORATION
(Registrant)
By: /s/ LARRY W. BICKLE
-------------------------------
LARRY W. BICKLE
CHAIRMAN, CHIEF EXECUTIVE
OFFICER AND DIRECTOR
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of TPC
Corporation and in the capacities indicated on March 14, 1997:
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ LARRY W. BICKLE Chairman and Chief Executive Officer (Principal
- ------------------------------------------------------- Executive Officer)
Larry W. Bickle
/s/ J. CHRIS JONES Senior Vice President and Chief Operating and
- ------------------------------------------------------- Financial Officer (Principal Financial Officer)
J. Chris Jones
/s/ D. HUGHES WATLER, JR. Corporate Controller (Principal Accounting Officer)
- -------------------------------------------------------
D. Hughes Watler, Jr.
</TABLE>
D. Hughes Watler, Jr., pursuant to powers of attorney which are being
filed with this annual report on Form 10-K, has signed below on March 14, 1997,
as attorney-in-fact for the following directors of the Registrant, constituting
a majority of the Registrant's Board of Directors:
Jean P. Abiteboul Roger L. Jarvis
Bernard Brelle Thomas M. Jenkins
W. Jack Bowen Michael E. McMahon
Robert Cosson James S. Pignatelli
/s/ D. HUGHES WATLER, JR.
--------------------------------
D. Hughes Watler, Jr.
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