SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 0-7961
TPI ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-1899681
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
3950 RCA Boulevard
Suite 5001
Palm Beach Gardens, FL 33401
(Address of principal executive (Zip Code)
offices)
(407) 691-8800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON SHARES, PAR VALUE $.01 PER SHARE
(Title of Class)
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 (Section 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant is $44,190,996 (as of March 22, 1996).
The number of shares outstanding of the Registrant's common stock
is 20,612,795 (as of March 22, 1996).
DOCUMENTS INCORPORATED BY REFERENCE
None
Part III of the report is amended and restated in its
entirety as follows:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.
DIRECTORS
The name, age, principal occupation for the last
five years, selected biographical information, and period of
previous service as a director of the Company with respect
to each such nominee for director is set forth below. The
principal occupations listed refer to positions with the
Company unless otherwise indicated.
Name Age Positions and Offices Director
presently held with Since
the Company
J. Gary Sharp1 49 President, Chief 1992
Executive Officer and
Director
Frederick W. Burford1 45 Executive Vice 1993
President, Chief
Financial Officer,
Secre-tary and
Director
Paul James Siu1 61 Director 1986
Edwin B. Spievack1 63 Director 1986
Osvaldo Cisneros1 55 Director 1992
Thomas M. Taylor1 53 Director 1993
John L. Marion, Jr.1 34 Director 1993
Douglas K. Bratton1 37 Director 1993
Lawrence F. Levy1 52 Director 1993
_______________
1 Pursuant to an agreement dated March 19, 1993, by and
among the Company, The Airlie Group L.P., The Bass
Management Trust, Sid R. Bass Management Trust, Lee M.
Bass and TPI Investors, L.P., (collectively, the
"Purchasers") the Company agreed (i) to increase the
size of the Board and appoint Thomas M. Taylor, John L.
Marion, Jr. and Douglas K. Bratton as Directors and
(ii) to seek the resignation or removal of such other
then existing directors so that the Company's Board
would consist of (a) Messrs. Taylor, Marion and
Bratton, (b) Messrs. Cohen, Sharp, Burford and Cisneros
(collectively, the "Current Enterprises Directors"),
(c) two of the independent directors then serving on
the Board as chosen by mutual agreement of the Current
Enterprises Directors and the Purchasers (Messrs. Siu
and Spievack), and (d) a new independent Director as
recommended by the Purchasers, and mutually agreed to
by the Current Enterprises Directors and the Purchasers
(Mr. Levy). Mr. Cohen resigned from his position of
Chairman of the Board and Director of the Company
effective January 31, 1995.
J. Gary Sharp joined the Company in September 1989
when he was elected President and Chief Operating Officer of
Restaurants. In March 1993, Mr. Sharp was elected President
and Chief Executive Officer of the Company.
Frederick W. Burford joined the Company in
November 1991 when he was appointed Vice President, Chief
Financial Officer and Treasurer of Restaurants. In March
1993, Mr. Burford was elected Executive Vice President and
Chief Financial Officer of the Company. In March 1995, Mr.
Burford was appointed Secretary of both the Company and
Restaurants. From March 1990 through January 1991 Mr.
Burford was Vice President and Controller of The Promus
Companies, Incorporated ("Promus") and, from February 1991
through October 1991, he was Vice President, Treasurer and
Controller of Promus.
Paul James Siu, who was elected a director of the
Company in September 1986, currently serves as principal of
Paul Siu & Company, a business consulting concern.
Edwin B. Spievack, who was elected a director of
the Company in September 1986, served from 1982 through
April 1995 as President of the North American
Telecommunications Association, an industry trade
association. Since January 8, 1996, Mr. Spievack has served
as Vice President of Business Development of Source Inc.
Mr. Spievack also serves as President of EBSco, Limited, a
business consulting concern, and retains his active status
as an attorney. Mr. Spievack is also a director of
Communications World International, Inc.
Osvaldo Cisneros, who was elected a director of
the Company in 1992, has been President of Ocaat, CA, a
holding company that operates numerous Pepsi-Cola plants in
Venezuela, since 1984; President of Telefonia Celular, a
cellular telephone company, since 1991; President of
Produvisa, a glass company, since 1987; President of
Refractarios del Caroni, a brick company, since 1980; and
President of Central Portuguesa, a sugar mill, since 1985.
Thomas M. Taylor, who was elected director of the
Company on March 19, 1993, has been President of Thomas M.
Taylor & Co., an investment entity, since May 1985; and
President of TMT-FW, Inc., a corporation that serves as one
of two general partners of the general partner of The Airlie
Group L.P. a diversified investment firm, since October
1989. Mr. Taylor is also Chairman of the Board of Directors
of La Quinta Inns, Inc. and a director of John Wiley & Sons,
Inc.
John L. Marion, Jr., who was elected director of
the Company on March 19, 1993, has served as an investment
advisor for TMT-FW, Inc. and The Airlie Group L.P. since
1990.
Douglas K. Bratton, who was elected director of
the Company on March 19, 1993, has served as an investment
advisor for TMT-FW, Inc. and a partner of The Airlie Group
L.P. since 1989.
Lawrence F. Levy, who was elected director of the
Company on April 14, 1993, is the Chairman of the Boards of
The Levy Organization and Levy Restaurants. Levy
Restaurants is a food service company that operates
restaurants and concession facilities and The Levy
Organization is involved in a variety of businesses
including, but not limited to, the ownership, management,
leasing and development of commercial real estate. Mr. Levy
is also a director of Chicago Title and Trust Company.
Section 16(a) of the Exchange Act requires the
Company's directors, executive officers, and persons who own
more than 10% of a registered class of the Company's equity
securities, to file with the Commission initial reports of
ownership and reports of changes in ownership of shares of
the Company's Common Stock and other equity securities of
the Company. Executive officers, directors and beneficial
owners of greater than 10% of the Company's Common Stock are
required by Commission regulation to furnish Enterprises
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review
of the copies of such reports furnished to Enterprises and
written representations from certain reporting persons that
no other reports on forms were required for such persons,
during the fiscal year ended December 31, 1995 all Section
16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were
complied with.
EXECUTIVE OFFICERS
Information required regarding executive officers
is included in the Form 10-K Part I Item 4 entitled
Executive Officers of the Registrant.
ITEM 11. EXECUTIVE COMPENSATION.
COMPENSATION OF DIRECTORS
Non-employee directors who beneficially own 5% or
more of the shares of the Company's Common Stock are
compensated for their services as directors of the Company
at a rate of $10,000 per annum, and non-employee directors
who beneficially own less than 5% of the shares of the
Company's Common Stock are compensated at a rate of $25,000
per annum. Pursuant to this arrangement during the fiscal
year ended December 31, 1995, Messrs. Cisneros, Taylor,
Marion and Bratton were compensated for their services as
directors of the Company at the rate of $10,000 per annum
and Messrs. Siu, Spievack and Levy received $25,000 per
annum for their services as directors of the Company.
Pursuant to agreements between The Airlie Group L.P. and
each of Messrs. Taylor, Marion and Bratton, each of such
directors pays the fees he receives for his services as a
director of the Company over to The Airlie Group L.P.
Under the terms of the Company's 1992 Non-Employee
Stock Option Directors Plan (the "Non-Employee Directors
Plan"), each non-employee director is granted an option to
purchase 2,500 shares of the Company's Common Stock on the
first business day of each February and August, provided the
director is serving on the Company's Board on the date of
the grant. Grants under the Non-Employee Directors Plan
generally vest in 20% increments each year following the
date of grant. Grants made to non-employee directors on the
date the plan was adopted, vested as to each such director
as if the grant had been made when he was elected to the
Company's Board. Pursuant to the Non-Employee Directors
Plan, Messrs. Cisneros, Siu, Spievack, Taylor, Marion,
Bratton and Levy were each granted an option to purchase
2,500 shares of the Company's Common Stock on February 1,
1995 and on August 1, 1995. Each new non-employee director
is granted an option to purchase 10,000 shares of the
Company's Common Stock at the time such director is elected
to the Board.
Messrs. Spievack, Cisneros and Siu are members of
the Special Committee which was established on September 12,
1995 by the Company's Board to determine the advisability of
a possible transaction with Shoney's, Inc. Members of the
Special Committee each receive a fee of $2,000, plus out-of-
pocket expenses for each in-person meeting of the Special
Committee attended by such member and for each day from and
after September 12, 1995 (other than a day during which an
in-person meeting of the Special Committee occurs) during
which such member devotes a substantial portion of the day
to Special Committee affairs. Mr. Spievack received
$89,917, Mr. Cisneros received $0 and Mr. Siu received
$52,185 in 1995 as compensation for their activities with
respect to the Special Committee.
No other director receives compensation for his
services as such.
EXECUTIVE COMPENSATION
The Summary Compensation Table set forth below
shows the compensation for the past three years of each of
the Company's most highly compensated executive officers
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Other
Annual
Name and Compensa- Awards Other
Principal Year Salary Bonus tion Options Compensa-
Position ($) ($) ($) (#) tion ($)
J. Gary Sharp 1995 319,065 0 0 0
President and 1994 303,594 0 100,000(1) 0
Chief 1993 289,402 0 0 33,357(2)
Executive
Officer
Frederick E. 1995 234,084 30,000 30,000(1) 24,171(3)
Burford 1994 197,953 30,000 50,774 0 55,206(4)
Executive 1993 182,438 36,255(5) 0 0
Vice
President,
and Chief
Financial
Officer and
Secretary
Robert Kennedy 1995 227,326 0 0 300,000(6)
Executive 1994 226,939 0 0 0
Vice 1993 313,600 0 0 700,000(8)
President and
Secretary(7)
Haney A. Long, 1995 253,211 124,284 0 6,405(9)
Jr. 1994 217,440 142,977 84,684 0 105,388(10)
Vice 1993 202,325 143,954 0 0
President of
Procurement
and
Distribution
(1) Options with respect to the 100,000 and 30,000 shares of the
Company's Common Stock for Mr. Sharp and Mr. Burford, respectively,
become exercisable in 10% increments tied to increases in the
trading prices of the Company's Common Stock. The options do not
begin to vest until the market price of the Company's Common Stock
exceeds $18 per share for 20 consecutive trading days, at which time
10% will vest. The options then vest in 10% increments each time
the stock price increases by $1 and retains such increase for 20
consecutive trading days.
(2) Represents $33,357 in moving expenses paid to Mr. Sharp in 1993.
(3) Represents $24,171 in moving expenses paid to Mr. Burford in 1995.
(4) Represents $55,206 in moving expenses paid to Mr. Burford in 1994.
(5) Includes a $30,000 bonus and reflects the fair market value of 500
shares of the Company's Common Stock awarded to Mr. Burford at the
time of the award.
(6) Represents $300,000 paid to Mr. Kennedy in March 1996, pursuant to
the terms of an agreement relating to the Maxcell Lawsuit. See "-
Employment Contracts, Termination of Employment and Change in
Control Arrangements."
(7) Mr. Kennedy retired as Executive Vice President and Secretary of
Enterprises effective March 17, 1996.
(8) Represents a lump sum payment of $700,000 made to Mr. Kennedy upon
termination of the Company's retirement plan in connection with an
employment agreement with Mr. Kennedy, which provided for a
reduction in compensation for future services, and in satisfaction
of the Company's obligations under the retirement plan.
(9) Represents $6,405 in moving expenses paid to Mr. Long in 1995.
(10) Represents $105,388 in moving expenses paid to Mr. Long in 1994.
EMPLOYEE OPTION/SAR GRANTS
The Company has in effect stock option plans
pursuant to which options to purchase shares of the
Company's Common Stock and stock appreciation rights
("SARs") (rights, granted in tandem with an option to
receive cash payments equal to any appreciation in value of
the shares subject to option from the date of the option
grant to the date of exercise in lieu of exercise of the
option) are granted to officers and other key employees of
the Company and its subsidiaries.
The following table shows stock options granted to
the Named Executive Officers in 1995. Of the stock options
shown in the Summary Compensation Table above, none of
the options were options with tandem SARs. No free-standing
SARs have been granted under the Company's stock option
plans.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
Percent of Value of
Number of Total Assumed Annual
Securities Options/SAR's Rate of Stock
Underlying granted to Exercise of Price Appreciation
Option/SAR's Employees in Base Price Expiration for Option Term
Name granted Fiscal Year ($/SH) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
J. Gary Sharp...... 0 -- -- -- --
Frederick W. Burford.. 30,000(1) 100% $3.875 12/31/98 0 0
Robert A. Kennedy.... 0 -- -- -- -- --
Haney A. Long, Jr..... 0 -- -- -- -- --
_____________
(1) The options do not become exercisable until the
market price of the Company's Common Stock exceeds
$18 per share for twenty consecutive trading days,
at which time 10% will become exercisable. The
options then become exercisable in 10% increments
each time the stock price increases by $1 and
retains such increase for 20 consecutive trading
days.
</TABLE>
EMPLOYEE OPTION/SAR EXERCISES OF THE COMPANY'S COMMON STOCK
AND YEAR-END VALUE TABLE
The following table shows employee stock option
exercises for the shares of the Company's Common Stock by
Named Executive Officers during 1995. The table shows the
number of shares covered by both exercisable and non-
exercisable employee stock options as of December 31, 1995,
and the values for "in-the-money" options, which represent
the positive spread between the exercise price of any
outstanding stock option and the price of the Company's
Common Stock as of December 31, 1995.
AGGREGATED EMPLOYEE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SAR's Options/SAR's
Shares at Fiscal Year at Fiscal
Acquired Value Year End (#) Year End ($)
on Real- Exercisable/ Exercisable/
Name Exercise ized $ Unexercisable Unexercisable
J. Gary Sharp 0 0 142,900/150,000 0/0
Frederick W. Burford 0 0 132,000/58,000 0/0
Robert A. Kennedy 0 0 55,000/0 0/0
Haney A. Long, Jr. 0 0 87,160/20,000 0/0
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE
IN CONTROL ARRANGEMENTS
J. Gary Sharp is employed by the Company under an
employment agreement dated as of January 13, 1994 which
expires January 13, 1999 at a current minimum base salary of
$335,018 per annum. Pursuant to the terms of the employment
agreement, Mr. Sharp is entitled to an annual salary
increase of no less than 5% of the immediately preceding
year's base salary. Pursuant to the terms of the employment
agreement, Mr. Sharp is entitled to receive an annual bonus
in an amount equal to 2.7% of the increase in the Company's
operating profits (as defined in the agreement) for the
calendar year, plus an additional $28,000 for each
percentage point increase (or portion thereof) in the
Company's same store nominal sales. As a result of the
Company's financial performance in 1995, Mr. Sharp received
no annual bonus for 1995.
In addition, Mr. Sharp's employment agreement
provides for a discretionary annual grant of up to 50,000
stock options with a ten-year term that vest pro rata over
the five years following the grant with an exercise price
equal to the market price of the Company's Common Stock on
the date of grant. Any such grant will be based on a review
of the Company's financial performance during such year.
Mr. Sharp did not receive a stock option grant at the end of
1995.
The employment agreement provides that in the
event that Mr. Sharp's employment with the Company is
terminated without cause or Mr. Sharp terminates his
employment after a material breach of the employment
agreement by the Company that is not remedied, the Company
will pay Mr. Sharp his full base salary at the rate then in
effect until January 13, 1999.
Frederick W. Burford is employed by the Company
under an employment agreement dated as of January 1, 1995
which expires on December 31, 1996 at a current minimum base
salary of $245,788 per annum. Pursuant to the terms of the
employment agreement, Mr. Burford is entitled to a 5%
increase in annual base salary for each year during the term
of the agreement. Pursuant to the employment agreement, Mr.
Burford is also entitled to receive an annual bonus of the
amount equal to 1.5% of the increase in the Company's
operating profits (as defined in the agreement) for the
calendar year plus an additional $16,000 for each percentage
point increase in the Company's same store nominal sales.
As a result of the Company's performance in 1995, Mr.
Burford received no annual bonus for 1995 pursuant to the
formula described above.
Pursuant to the employment agreement, Mr. Burford
was granted 30,000 stock options expiring December 31, 1998
with an exercise price of $3.875, the closing market price
of the Company's Common Stock on December 30, 1994, the
business day preceding the date of his employment agreement.
The options do not begin to vest until the market price of
the Company's Common Stock exceeds $18 per share for 20
consecutive trading days, at which time 10% will vest. The
options then vest in 10% increments each time the stock
price increases by $1, and retains such increase for 20
consecutive trading days.
In addition, Mr. Burford's employment agreement
provides for a discretionary annual grant of up to 50,000
stock options with a ten-year term that vest pro rata over
the five years following the grant with an exercise price
equal to the market price of the Company's Common Stock on
the date of grant. Any such grant will be based on a review
of the Company's financial performance during such year.
Mr. Burford did not receive a stock option grant at the end
of 1995.
In the event that the employment agreement is
terminated by the Company without cause or by Mr. Burford
for good reason (as defined in the agreement) he shall be
paid, as severance, one year's salary based on the
compensation in effect on the date of termination and his
bonus accrued through the date of termination.
Pursuant to the relocation policy adopted by the
Company in connection with the Company's relocation of its
offices to Florida, Mr. Burford will also receive one year's
compensation if his employment is terminated without cause
if termination occurs within two years following relocation.
Mr. Kennedy's employment agreement with the
Company expired on January 1, 1995. On February 20, 1995,
Mr. Robert A. Kennedy entered into an agreement with the
Company clarifying and replacing a certain provision of his
employment agreement which survived the expiration of such
employment agreement. Pursuant to the terms of the new
agreement, the Company and Maxcell Telecom Plus, Inc.
("Maxcell") agreed to pay to Mr. Kennedy 1% of the gross
proceeds received by Maxcell or the Company in settlement of
the action brought by Maxcell against McCaw Cellular
Communications, Inc., Charisma Communications Corp. and
various related parties (the "Maxcell Lawsuit") or 0.5% of
the gross proceeds received upon a final, non-appealable
judgment in the Maxcell Lawsuit. Pursuant to the terms of
this agreement, Mr. Kennedy was paid $300,000 in March 1996
in connection with the settlement of the Maxcell Lawsuit
(the "Maxcell Settlement").
Pursuant to a Letter Agreement dated March 19,
1996 between Mr. Kennedy and the Company (the "Letter
Agreement"), Mr. Kennedy resigned from his positions of
Executive Vice President and Secretary of the Company
effective March 17, 1996. In connection therewith, Mr.
Kennedy received a lump-sum payment of $250,000 which was
deemed to satisfy all payment obligations the Company may
have had to Mr. Kennedy under all agreements between Mr.
Kennedy and the Company. The Letter Agreement also provided
for general releases by the Company and Mr. Kennedy.
Mr. Haney A. Long's employment agreement with the
Company expired on January 1, 1996. His current base salary
is $265,872 per annum. Pursuant to the terms of the
employment agreement, Mr. Long was entitled to receive (i) a
bonus payable at the end of the first quarter of each year
in an amount equal to 12.5% of his base salary, (ii) a bonus
payable at the end of the second quarter of each year in an
amount equal to 12.5% of his base salary, and (iii) a bonus
payable at the end of the year in an amount no less than 25%
of the gross salary and bonus earned by Mr. Long during the
year. Mr. Long received bonus payments of an aggregate of
$124,284 during the fiscal year ended December 31, 1995.
Pursuant to the relocation policy adopted by the Company in
connection with the Company's relocation of its offices to
Florida, Mr. Long will also receive one year's compensation
if his employment is terminated without cause if termination
occurs within two years following relocation.
The Company's 1983 Stock Option Plan (the "1983
Plan"), 1984 Stock Option Plan (the "1984 Plan"), 1992 Stock
Option and Incentive Plan and Non-Employee Directors Plan
(each, an "Option Plan," and, collectively, (the "Option
Plans") contain certain change in control provisions. The
Option Plans, except for the Non-Employee Directors Plan,
provide that the stock option agreement may provide that if
the holder of an option under such Option Plan is an
employee of a subsidiary of the Company and such subsidiary
ceases to be a subsidiary of the Company, such option shall
be treated as if the employment of the holder was terminated
otherwise than by reason of death, voluntarily or for cause,
as provided in such Option Plan. Under the 1984 Plan, the
Stock Option Committee may provide that an option may become
exercisable immediately upon a change in control of the
Company. The Non-Employee Directors Plan also provides for
acceleration of the exercisability of options in the event
of a change in control of the Company. Under the 1983 Plan
and the 1984 Plan, a change in control shall be deemed to
occur if any person is or becomes the beneficial owner,
directly or indirectly, of at least 35% of the Company's
outstanding voting securities, or in the event of a change
in the majority composition of the Company's Board. Under
the Non-Employee Directors Plan, a change in control shall
be deemed to occur if any person is or becomes the
beneficial owner, directly or indirectly, of at least 50% of
the Company's outstanding voting securities, or in the event
of a change in the majority composition of the Board. The
1983 Plan and the 1984 Plan, but not the options previously
granted under such Option Plans, terminated on May 9, 1994
and December 8, 1993, respectively, in accordance with their
terms.
COMPENSATION COMMITTEE REPORT
The undersigned members of the Compensation
Committee, all of whom are independent, non-employee members
of the Company's Board, present to the shareholders of the
Company this report concerning the compensation of the
Company's executive officers. The role of the Compensation
Committee in this matter is to establish or approve both the
broad principles underlying the compensation program for
executive officers and the specific application of these
principles to each executive officer's compensation package.
Compensation Philosophy.
The Compensation Committee believes that the
Company's Board can best meet its primary responsibility to
shareholders of the Company -- to enhance short-term and
long-term profitability of the Company -- by attracting,
retaining and motivating management of the highest quality.
A competitive and fair compensation program that provides
appropriate incentive to management is essential to the
attainment of this goal.
The Company's compensation program has three
principal components: annual base salary and fringe benefit
plans, short-term incentives consisting of annual bonuses
and long-term incentives consisting of grants of stock
options under the Company's 1992 Stock Option and Incentive
Plan (the "1992 Plan"). The annual bonuses are generally
linked to the Company's performance based on formulae which
the Compensation Committee believes align the interests of
the executive officers with those of shareholders. Option
grants are based to some extent on historical performance
but primarily on the Stock Option Committee's subjective
assessment of the executive officer's (and other employees')
likely ability to contribute to the growth of the Company
over the term of the option (after taking into consideration
the executive officer's existing employee stock options).
The members of the Compensation Committee also constitute
the members of the Stock Option Committee. In view of the
Company's financial performance in 1995, no options were
granted in 1995 under the 1992 Plan, except for 30,000
options granted to Mr. Burford pursuant to his employment
agreement, which options do not begin to vest until the
market price of the Company's Common Stock exceeds $18 per
share for 20 consecutive trading days. The Company has
historically placed particular emphasis on its annual
bonuses and its option plans, in the belief that meaningful
participation in the Company's success is an effective and
fair means of retaining and motivating its executive
officers.
COMPENSATION PROGRAM COMPONENTS
Salary. As noted above, annual base salary is one
component of the Company's compensation program. In
formulating base salaries, the Company balances its need to
attract top quality executive officers with its desire to
provide these officers with sufficient incentive to perform
in a way that enhances corporate performance. The result is
that the base salary for each executive officer is designed
to represent only a part of that officer's compensation
package. However, as a result of the 1995 performance of
the Company, base salary represented all of the compensation
for the executive officers (other than fixed bonuses not
based on performance). For certain executive officers, the
base salary is set forth in an employment agreement for such
officer which generally provides for annual increases at a
specified rate during the term of the agreement. Other
executive officers receive salaries not set forth in a
contract. The percentage of total compensation for
executive officers represented by base salary varies from
year to year because the incentive-based component of
executive compensation varies from year to year. Executive
officers are also permitted to participate in other
designated fringe benefit plans.
In early 1995, the Company completed the
consolidation of the offices in Palm Beach Gardens, Florida.
In connection with this move, the Company adopted a new
policy and certain base salary increases of up to 16% were
given to certain officers who relocated from Memphis,
Tennessee to Palm Beach Gardens, Florida.
Short-term incentives. Annual bonuses represent a
second component of each executive officer's total
compensation. Certain of the executive officers receive
annual bonuses equal to a percentage of the increase in the
Company's profits attributable to operations for the year
over profits for the prior year generally pursuant to
formulae set forth in their employment agreements with the
Company. In the case of such formula bonuses, the annual
bonus component of total compensation is directly dependent
upon certain measures (as described below) of the Company's
performance that were determined at the time the contracts
were negotiated with the executive officers. Other
executive officers have, in past years, received annual
bonuses at the discretion of the Compensation Committee
based on the Compensation Committee's annual assessment of
the executive's contribution to the success of the Company
for the year. In both cases, the annual bonus component of
the executive's total compensation package reflects the
Company's philosophy of providing its executive officers
with proper incentives tied to corporate performance. As a
result of the Company's financial results in 1995, executive
officers did not receive annual bonuses for such year
pursuant to formulae in their employment agreements or at
the discretion of the Compensation Committee. Mr. Long's
employment agreement which expired January 1, 1996 provided
for fixed annual bonuses as a percentage of base salary.
Mr. Long received bonus payments for fiscal 1995 of
$124,284. Mr. Burford received a payment of $30,000 in 1995
pursuant to the terms of his previous employment agreement
with the Company dated October 1, 1991 which expired October
1, 1994.
Long-term incentives. The long-term incentive
component of executive compensation is equity-based and
consists of the award of stock options to the executive
officers (as well as other employees of the Company), which
grants are made by and at the discretion of the Stock Option
Committee of the Company. The stock options are granted
with an exercise price equal to not less than the market
value of shares of the Company's Common Stock on the date of
grant. The Compensation Committee believes the stock
options (together with any options previously granted)
primarily represent compensation that will be earned by the
executive officer for his service over a period of up to ten
years (the period during which such options may be
exercised). As a result of the Company's financial
performance in 1995, the only stock options granted in 1995
were those granted to Mr. Burford pursuant to the terms of
his employment agreement which do not begin to vest until
the market price of the Company's Common Stock exceeds $18
per share for 20 consecutive trading days. See "Employment
Contracts, Termination of Employment and Change in Control
Arrangements."
1995 Compensation of Enterprises Chief Executive
Officer. J. Gary Sharp has served as the Company's Chief
Executive Officer since March 19, 1993. The Company entered
into an employment agreement with Mr. Sharp dated January
13, 1994 which provides for his employment as Chief
Executive Officer of the Company through January 13, 1999.
Mr. Sharp's base salary for 1995 was $319,065 or 5% over his
1994 base salary. Mr. Sharp received this salary increase
pursuant to the terms of such employment agreement which
provides that Mr. Sharp's base salary shall increase by not
less than 5% for each succeeding year during his term of
employment.
Pursuant to his employment contract, Mr. Sharp is
entitled to receive an annual bonus equal to 2.7% of the
increase in the Company's operating profits for the calendar
year just ended over the Company's operating profits for the
prior year and a bonus of $28,000 for each percentage point
increase (or portion thereof) in the Company's same store
nominal sales. It is the Compensation Committee's judgment
that these two different objective performance criteria
(together with the options described below) provide an
incentive for contribution to long-term growth. As a result
of the financial performance of the Company in 1995, Mr.
Sharp received no bonus for such year.
Mr. Sharp's employment agreement provides for a
discretionary annual grant of up to 50,000 stock options
with a ten-year term that vest pro rata over the five years
following the grant with an exercise price equal to the
market price of the Company's Common Stock on the date of
grant. Any such grant will be based on a review of the
Company's financial performance during such year. Mr. Sharp
did not receive an option grant at the end of 1995 because
of the Company's performance in 1995.
Internal Revenue Code. On August 10, 1993, the
Omnibus Budget Reconciliation Act of 1993 was signed into
law (the "Revenue Act"). The Revenue Act limits the
deductibility of certain compensation in excess of $1
million per year paid by a publicly traded corporation to an
employee of such corporation for years following 1993.
Under the Revenue Act, compensation which is payable under a
written contract that was in effect on February 17, 1993, or
which qualifies as "performance-based" compensation is
exempt from the $1 million deductibility limitation. The
Compensation Committee is aware of the applicable provisions
of the Revenue Act and does not expect that any compensation
for fiscal 1995 would fail to be deductible under the
Revenue Act.
Osvaldo Cisneros
Edwin B. Spievack
Thomas M. Taylor
Compensation Committee Members
PERFORMANCE OF THE COMPANY'S COMMON STOCK
Set forth below is a line graph comparing the
total cumulative return of the Company's Common Stock to the
Standard & Poor's 500 Stock Index (the "S&P 500 Index") and
the Standard & Poor's 500 Restaurant Index (the "S&P 500
Restaurant Index").
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
AMONG TPI ENTERPRISES, INC., THE S & P 500 INDEX
AND A PEER GROUP(2)
Cumulative Total Return
12/90 12/91 12/92 12/93 12/94 12/95
TPI Enterprises, Inc. 100 115 166 193 76 61
PEER GROUP 100 171 205 187 137 118
S & P 500 100 130 140 155 157 215
1 100 invested on 12/31/90 in stock or index including reinvestment of
dividends. Fiscal year ended December 31.
2 The Peer Group is comprised of Bob Evans Farms, Cracker Barrel Old
Country Store, Flagster Companies, Inc. IHOP Corp., Perkins Family
Restaurants, Shoney's, Inc. and Vcorp Restaurants, Inc.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
THE COMPANY'S PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 22,
1996, the number and percentage of shares held by all
persons who, to the knowledge of the Company, are the
beneficial owners of more than 5% of the outstanding shares
of the Company's Common Stock.
Name and Address of Amount and Nature Approximate
Beneficial Owner or of Beneficial Percentage
Identity of Group Ownership of Class
__________________ ________________ ____________
The Airlie Group L.P.,
The Bass Management Trust,
Sid R. Bass Management Trust,
Lee M. Bass,
TPI Investors, L.P., and
certain related parties
c/o W. Robert Cotham
201 Main Street, Suite 2600
Fort Worth, Texas 76102 5,381,911 (1) 22.3%
EBD L.P.
TMT-FW, Inc.
201 Main Street
Fort Worth, Texas 76102
Dort A. Cameron, III
115 East Putnam Avenue
Greenwich, Connecticut 06830 2,602,523 (2) 12.0%
Thomas M. Taylor
201 Main Street 2,611,523 (3) 12.1%
Fort Worth, Texas 76102
Osvaldo Cisneros
Aptd. 70519 Los Ruices
Caracus, Venezuela 2,501,000 (4) 12.1%
Balanchine Corporation
P.O. Box 7788
Nassau, Bahamas 1,500,000 (5) 7.3%
Liberty Investment Management
2502 Rocky Point Drive,
Suite 500 1,288,800 (6) 6.3%
Tampa, Florida 33607
College Retirement Equities
Fund
730 Third Avenue
New York, New York 10017 1,107,000 (7) 5.4%
Merrill Lynch & Co., Inc.
Merrill Lynch Group. Inc.
World Financial Center, North
Tower
250 Vesey Street
New York, New York 10281
Princeton Services, Inc.
Fund Asset Management, L.P.
Merrill Lynch Special Value
Fund, Inc.
800 Scudders Mills Road 1,496,660 (8) 7.3%
Plainsboro, New Jersey 08536
_________________________
(1) Includes 1,899,120 shares of the Company's Common
Stock owned by such reporting persons, 1,092,155
shares of the Company's Common Stock obtainable
upon conversion of the Company's 81/4% Convertible
Subordinated Debentures due 2002 (the "81/4%
Debentures"), 1,363,636 shares of the Company's
Common Stock obtainable upon conversion of the
Company's 5% Convertible Senior Subordinated
Debentures due 2003 (the "5% Debentures") and
1,000,000 shares of the Company's Common Stock
obtainable upon exercise of warrants held by such
reporting persons. Also includes an aggregate
27,000 shares of the Company's Common Stock
issuable upon exercise of presently exercisable
options held by Messrs. Taylor, Bratton and
Marion.
(2) EBD L.P. is the general partner of The Airlie
Group L.P. TMT-FW, Inc. and Dort A. Cameron, III
are the general partners of EBD L.P. Includes
1,589,703 shares of the Company's Common Stock
held by The Airlie Group L.P., 546,154 shares of
the Company's Common Stock obtainable upon
conversion of the 81/4% Debentures held by The
Airlie Group L.P., and 466,666 shares of the
Company's Common Stock obtainable upon exercise of
warrants held by The Airlie Group L.P. EBD L.P.,
TMT-FW, Inc. and Dort A. Cameron, III share voting
and dispositive power over the foregoing shares.
(3) Includes 1,589,703 shares of the Company's Common
Stock held by The Airlie Group L.P., 546,154
shares of the Company's Common Stock obtainable
upon conversion of the 81/4% Debentures held by The
Airlie Group L.P., and 466,666 shares of the
Company's Common Stock obtainable upon exercise of
warrants held by The Airlie Group L.P. Mr. Taylor
shares voting and dispositive power over the
foregoing shares through TMT-FW, Inc. Also
includes 9,000 shares of the Company's Common
Stock issuable upon the exercise of presently
exercisable options.
(4) Includes 1,500,000 shares of the Company's Common
Stock owned by Balanchine Corporation over which
Mr. Cisneros has the right to provide instructions
as to voting, disposition and receipt of dividends
and thus may be deemed to have shared voting and
shared dispositive power over such shares of the
Company's Common Stock. Also includes 990,000
shares of the Company's Common Stock beneficially
owned by Inversiones Macuto, S.A. ("Macuto"), a
Panama corporation of which Mr. Cisneros is the
sole stockholder, and thus he may be deemed to
beneficially own any shares of the Company's
Common Stock beneficially owned by Macuto. Mr.
Cisneros may be deemed to have shared voting power
and shared dispositive power over all of such
shares of the Company's Common Stock. Also
includes 9,000 shares of the Company's Common
Stock issuable upon the exercise of presently
exercisable options and 2,000 shares of Common
Stock issuable upon the exercise of options which
become exercisable within 60 days.
(5) Balanchine Corporation ("Balanchine") is an entity
formed by Coutts & Co. ("Coutts"), a Bahamian bank
(formerly NatWest International Trust
Corporation). Mr. Cisneros has the right to
provide instructions to Coutts as to matters
relating to voting, disposition and receipt of
dividends with respect to the 1,500,000 shares of
the Company's Common Stock owned by Balanchine.
Balanchine may be deemed to have shared voting and
shared dispositive power over such 1,500,000
shares of the Company's Common Stock with Mr.
Cisneros.
(6) Based upon the Schedule 13G filed by Liberty
Investment Management with the Commission on
February 16, 1996.
(7) Based upon Amendment No. 3 to the Schedule 13G
filed by College Retirement Equities Fund with the
Commission on February 1, 1996.
(8) Based upon Amendment No. 1 to the Schedule 13G
filed by Merrill Lynch & Co., Inc., Merrill Lynch
Group, Inc., Princeton Services, Inc., Fund Asset
Management, L.P. and Merrill Lynch Special Value
Fund, Inc. with the Commission on February 8,
1996.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 22,
1996, the number and percentage of outstanding shares of the
Company's Common Stock beneficially owned by directors,
nominees, each of the Named Executive Officers, and
directors and executive officers as a group. The number of
shares of the Company's Common Stock owned are those
"beneficially owned," as determined under Rule 13d-3
promulgated by the Commission under the Exchange Act, and
the information set forth herein is not necessarily
indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares
as to which a person, directly or indirectly, through any
contract, arrangement, understanding, relationship or
otherwise, has sole or shared voting power or investment
power, and also any shares that the person has the right to
acquire within 60 days of March 22, 1996 through the
exercise of any option, warrant or right, through conversion
of any security, or pursuant to the automatic termination or
power of revocation of a trust, discretionary account or
similar arrangement.
SHARES OF ENTERPRISES
COMMON STOCK
BENEFICIALLY OWNED
AND APPROXIMATE
PERCENTAGE OF CLASS
NAME AS OF MARCH 22, 1996
J. Gary Sharp 188,855 (1) *
Frederick W. Burford 139,442 (2) *
Paul J. Siu 14,800 (3) *
Edwin B. Spievack 15,500 (4) *
Osvaldo Cisneros 2,501,000 (5) 12.1%
Thomas M. Taylor 2,611,523 (6) 12.1%
John L. Marion, Jr. 16,500 (7) *
Douglas K. Bratton 149,785 (8) *
Lawrence F. Levy 9,000 (9) *
Robert A. Kennedy 88,514 (10) *
Haney A. Long, Jr. 93,423 (11) *
____________________
* Less than one (1%) percent.
All executive officers and
directors as a
group (ten persons) (12) 5,739,828 25.6%
(1) Represents (i) 45,955 shares of the Company's Common
Stock owned by Mr. Sharp and (ii) 142,900 shares of
the Company's Common Stock issuable upon the exercise
of presently exercisable options.
(2) Represents (i) 2,827 shares of the Company's Common
Stock owned by Mr. Burford, (ii) 132,000 shares of
the Company's Common Stock issuable upon the exercise
of presently exercisable options and (iii) 4,615
shares of the Company's Common Stock issuable upon
conversion of 81/4% Debentures.
(3) Represents (i) 1,800 shares of the Company's Common
Stock owned by Mr. Siu, and (ii) 13,000 shares of the
Company's Common Stock issuable upon the exercise of
presently exercisable options.
(4) Represents (i) 2,500 shares of the Company's Common
Stock owned by Mr. Spievack, and (ii) 13,000 shares
of the Company's Common Stock issuable upon the
exercise of presently exercisable options.
(5) Includes 1,500,000 shares of the Company's Common
Stock owned by Balanchine over which Mr. Cisneros has
the right to provide instructions as to voting,
disposition and receipt of dividends and thus may be
deemed to have shared voting and shared dispositive
power over such shares of the Company's Common Stock.
Also includes 990,000 shares of the Company's Common
Stock beneficially owned by Macuto of which Mr.
Cisneros is the sole stockholder, and thus he may be
deemed to beneficially own any shares of the
Company's Common Stock beneficially owned by Macuto.
Mr. Cisneros may be deemed to have sole voting power
over and sole dispositive power over all such shares
of the Company's Common Stock. Also includes 9,000
shares of the Company's Common Stock issuable upon
the exercise of presently exercisable the Company's
options, and 2,000 shares of the Company's Common
Stock issuable upon the exercise of the Company's
options which become exercisable within 60 days.
(6) Includes 1,589,703 shares of the Company's Common
Stock held by The Airlie Group L.P., over which Mr.
Taylor shares dispositive power through TMT-FW, Inc.,
an additional 546,154 shares of the Company's Common
Stock obtainable upon conversion of 81/4% Debentures
held by The Airlie Group L.P., and an additional
466,666 shares of the Company's Common Stock
obtainable upon exercise of warrants held by The
Airlie Group L.P. Also includes 9,000 shares of the
Company's Common Stock issuable upon the exercise of
presently exercisable options.
(7) Includes 7,500 shares of the Company's Common Stock
and 7,000 shares of the Company's Common Stock
issuable upon the exercise of presently exercisable
options and 2,000 shares of the Company's Common
Stock issuable upon the exercise of options which
become exercisable within 60 days of March 22, 1996.
(8) Includes 7,834 shares of the Company's Common Stock,
91,618 shares of the Company's Common Stock
obtainable upon conversion of 5% Debentures and
35,833 shares of the Company's Common Stock
obtainable upon exercise of warrants, all held by TPI
Investors, L.P., over which Mr. Bratton has sole
voting and dispositive power. Also includes 5,500
shares of the Company's Common Stock owned by
Mr. Bratton and his spouse, as joint tenants, and
7,000 shares of the Company's Common Stock issuable
upon the exercise of presently exercisable options
and 2,000 shares of the Company's Common Stock
issuable upon the exercise of options which become
exercisable within 60 days of March 22, 1996. Does
not include 500 shares of the Company's Common Stock
held in a trust for the benefit of Mr. Bratton's
minor son.
(9) Includes 7,000 shares of the Company's Common Stock
issuable upon the exercise of presently exercisable
options granted under the Non-Employee Directors Plan
and 2,000 shares of the Company's Common Stock
issuable upon the exercise of options which become
exercisable within 60 days of March 22, 1996.
(10) Represents (i) 31,207 shares of the Company's Common
Stock owned by Mr. Kennedy, (ii) 55,000 shares of the
Company's Common Stock issuable upon the exercise of
presently exercisable options and (iii) 2,307 shares
of the Company's Common Stock issuable upon
conversion of 81/4% Debentures.
(11) Represents (i) 1,600 shares of the Company's Common
Stock owned by Mr. Long, (ii) 48 shares of the
Company's Common Stock owned indirectly by Mr. Long
pursuant to the 1989 Employee Stock Purchase Plan,
(iii) 87,160 shares of the Company's Common Stock
issuable upon the exercise of presently exercisable
options and (iv) 4,615 shares of the Company's Common
Stock issuable upon conversion of 81/4% Debentures.
(12) All officers and directors as a group are ten in
number and beneficially own 5,739,828 shares of the
Company's Common Stock (25.6%) as of March 22, 1996.
Does not include shares of the Company's Common Stock
beneficially owned by Robert A. Kennedy who resigned
from his position with the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Stephen R. Cohen was employed by the Company
as Chairman of the Board of Directors of the Company under
an employment agreement dated as of January 13, 1987. Mr.
Cohen retired from this position effective January 31,
1995 pursuant to the Termination Agreement, Receipt and
Release dated January 26, 1995 (the "Termination
Agreement").
Under the terms of the Termination Agreement the
Company paid Mr. Cohen a lump sum of $1,150,000 in full
satisfaction of all amounts owed to him under his
employment agreement and other agreements entered into
between Mr. Cohen and the Company. Pursuant to the
Termination Agreement, Mr. Cohen waived any right to
receive a bonus during 1994 and 1995 and any right to
receive pay for accrued and unpaid vacation. In addition,
the Company and Maxcell agreed to pay Mr. Cohen 5% of the
gross proceeds received by Maxcell or the Company upon
settlement of the Maxcell Lawsuit or 3% of the gross
proceeds upon a final, non-appealable judgment in the
Maxcell Lawsuit. Mr. Cohen was paid $1,500,000 in March
1996 in connection with the Maxcell Settlement. Mr. Cohen
also continues to be provided with medical benefits, a
secretary, a car and a driver for certain periods as set
forth in the Termination Agreement.
In connection with the Company's relocation of
its headquarters, Mr. Frederick Burford received an equity
advance from the Company of $100,000 in January 1995
regarding the sale of his home in Tennessee, which advance
was repaid in full without interest on June 13, 1995.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TPI ENTERPRISES, INC.
Date: April 29, 1996 By: /s/ Frederick W. Burford
____________________
Frederick W. Burford
Executive Vice President
Chief Financial Officer
and Secretary
