-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TS5rsOw3WVMGvEm8IDS0DznZPPvW4u/68bMh3XA23gRG61Bg/gHO21G7pS7LLmEA XcrhVKLl99y7KNjMaxLX1w== 0000912057-97-014933.txt : 19970501 0000912057-97-014933.hdr.sgml : 19970501 ACCESSION NUMBER: 0000912057-97-014933 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970430 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PC QUOTE INC CENTRAL INDEX KEY: 0000745774 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 363131704 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11108 FILM NUMBER: 97592164 BUSINESS ADDRESS: STREET 1: 300 SOUTH WACKER DRIVE STREET 2: SUITE 300 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129132800 MAIL ADDRESS: STREET 1: 300 S WACKER STREET 2: SUITE 300 CITY: CHICAGO STATE: IL ZIP: 60606 10-K/A 1 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-13093 PC QUOTE, INC. Incorporated in the State of Delaware FEIN 36-3131704 Principal Executive Offices: 300 South Wacker Drive, #300, Chicago, Illinois 60606 Telephone Number: (312) 913-2800 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par Value Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of March 17, 1997, the aggregate market value of the Common Stock of the Registrant (based upon the closing price of the Common Stock as reported by the American Stock Exchange) on such date held by non-affiliates of the Registrant was approximately $12,853,094. Indicate by check mark whether registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No As of March 17, 1997, there were 7,412,849 shares of Common Stock of the Registrant outstanding. DOCUMENTS INCORPORATED BY REFERENCE: See Page 3 Portions of the Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Stockholders to be held in 1997 are incorporated by reference into Part III hereof. 2 PART OF FORM 10-K DOCUMENT PART I None PART II None PART III None PART IV ITEM 14 Exhibits and Reports Exhibits as specified in Item on Form 8-K 14 of this Report 3 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS During the year ended December 31, 1996, the Company's Board of Directors was comprised of Louis J. Morgan, M. Blair Hull, Paul DiBiasio, Ronald Langley and Alexander Piper III. Messrs. Hull and Piper resigned as directors in December 1996 and Mr. DiBiasio resigned in April 1997. The current directors and executive officers of the Company, and their ages and positions as of April 28, 1997 are as follows: NAME AGE POSITION Louis J. Morgan 60 Chairman of the Board of Directors, Chief Executive Officer and Treasurer Ronald Langley 52 Director Howard C. Meltzer 44 President and Chief Operating Officer Michael A. Press 53 Vice President, Finance and Chief Financial Officer Directors hold office for one year and until their successors are elected and qualified. Executive officers of the Company are appointed by, and serve at the direction of, the Board of Directors. LOUIS J. MORGAN became Chairman of the Board of the Company in May 1984. Mr. Morgan served as President of the Company from August 1980 to May 1984. From 1962-1972, Mr. Morgan was employed as a securities broker and sales manager of a regional New York Stock Exchange member brokerage firm. He was a member of the Chicago Board Options Exchange, Inc. from 1973 to 1986 and served on the Systems Committee of the Chicago Board Options Exchange, Inc. from 1980 through 1983. RONALD LANGLEY became Chairman of publicly held PICO Holdings, Inc. in November 1996; Chairman of Quaker Holdings Limited, an investment banking firm, in October 1992; Chairman since 1995 and Director since 1993, of Physicians Insurance Company of Ohio, an insurance company; Chairman of Global Equity Corporation, a Canadian investment banking corporation since September 1995; Chairman of Summit Global Management, Inc., a subsidiary of Physicians Insurance Company of Ohio which acts as an investment advisor registered with the Securities and Exchange Commission, since 1994. Since 1994, Mr. Langley served as Chairman of the Centurion Trust Company, a bank specializing in custodian services. HOWARD C. MELTZER joined the Company in June 1996 as President and Chief Operating Officer. Previously, he spent 20 years developing and implementing strategic initiatives for Reuters. Having served in the organization's London, Hong Kong and Toronto offices, Mr. Meltzer was most recently based at the Reuters Chicago office as vice president of business operations and Central District. MICHAEL A. PRESS joined the Company in July 1996 as Vice President of Finance, Chief Financial Officer. Since 1987 Mr. Press has been an independent financial consultant. Prior to that he was an officer of a national real estate development company and a senior financial and corporate development executive for Allis Chalmers and Congoleum Corp. BOARD OF DIRECTORS' MEETINGS AND COMMITTEES During the year ended December 31, 1996, the Board of Directors held six meetings. Each of the directors attended, in person or by telephone, at least 75% of the aggregate of the total number of meetings of the Board of Directors. 4 ITEM 11. EXECUTIVE COMPENSATION The following table summarizes the compensation for the past three years of (a) the Company's Chief Executive Officer, (b) the Company's President and Chief Operating Officer (who commenced employment June, 1996), (c) the Company's Vice President, Finance and Chief Financial Officer (who commenced employment July, 1996), and (d) the Company's two most highly compensated officers other than executive officers. SUMMARY COMPENSATION TABLE
Annual Compensation Awards -------------------- ---------- Shares Underlying All Other Name and Principal Position Year Salary Bonus Options Compensation (1) - --------------------------- ---- -------- ------ ----------- ---------------- Louis J. Morgan 1996 $251,562 $21,875 --- $13,752 Chairman of the Board, Chief 1995 241,896 --- 30,000 13,419 Executive Officer and Treasurer 1994 225,463 --- 20,000 11,509 Howard Meltzer (2) 1996 106,571 27,500 75,000 --- President and Chief Operating 1995 --- --- --- --- Officer 1994 --- --- --- --- Michael Press (3) 1996 57,232 5,450 25,000 --- Vice President, Finance, 1995 --- --- --- --- Chief Financial Officer 1994 --- --- --- --- Michael J. Kreutzjans 1996 152,705 11,911 --- 1,830 Vice President, Development Design 1995 145,619 --- 25,000 1,830 1994 79,365 --- 20,000 3,330 Jerry M. Traver 1996 211,539 4,813 --- --- Vice President, Sales and Marketing 1995 145,619 25,000 --- 1994 79,365 20,000 ---
- ---------------------------------- (1) Represents the insurance premiums paid by the Company on life insurance policies on which the named person's spouse is the beneficiary. (2) Mr. Meltzer's employment with the Company commenced July 1996. Represents amounts paid to Mr. Meltzer from June 1996 through December 1996. (3) Mr. Press' employment with the Company commenced July 1996. Represents amounts paid to Mr. Press from July 1996 through December 1996. Mr. Richard Chappetto, the Company's former President, International Division, and Chief Financial Officer, ceased his employment with the Company on November 1, 1996. During the last fiscal year the Company paid Mr. Chappetto cash compensation of $159,566 in accordance with his September 1993 employment agreement with the Company, which Agreement expired in September 1996. The following table shows the total number of Options granted to each of the named persons during 1996 (both as the number of shares of Common Stock subject to such Options and as a percentage of all Options granted to employees during 1996) and, for each of these grants, the exercise price per share of Common Stock and option expiration date. Except for options granted to Mr. Meltzer, the options will vest in three equal annual installments in 1997, 1998 and 1999 and will be exercisable through July 16, 2001. The exercise price of these options was fair market value (as defined in the Plan) at the date of grant. Of the 75,000 options granted to Mr. Meltzer, 25,000 vested immediately upon commencement of his employment in July. The remaining 50,000 options vest in equal annual installments through July, 1998. No SARs were granted in 1996. 5 OPTION/SAR GRANTS IN 1996 FISCAL YEAR
Potential Realizable Value at Number of % of Total Assumed Annual Rates of Securities Options Exercise Price Appreciation Underlying Granted to or Base for Option Options Employees in Price Expiration ----------------------- Name Granted (#) Fiscal Year ($/Sh) Date 5%(1) 10%(1) - ---- ------------ ------------- -------- ----------- ----- ------ Louis J. Morgan ---- ---- _____ __________ ________ ________ Howard Meltzer 75,000 57% 5.375 7-16-2001 $490,000 $590,215 Michael Press 25,000 19% 5.375 7-29-2001 163,333 196,738 Michael J. Kreutzjans ---- ---- ______ __________ ________ ________ Jerry M. Traver ---- ---- ______ __________ ________ ________
(1) The dollar amounts under these columns are the result of calculations at the 5% appreciation and 10% appreciation rates for the full five-year terms of the options as required by the SEC. The dollar amounts presented are not intended to forecast possible future appreciation, if any, of the price of the Common Stock. The following table sets forth, for each of the named persons, the number of shares they acquired on exercise of Options in 1996, the aggregate dollar value realized upon exercise, the total number of shares of Common Stock underlying unexercised Options and the aggregate dollar value of unexercised, in-the-money Options, separately identifying the exercisable and unexercisable Options. No SARs were outstanding in 1996. AGGREGATED OPTION/SAR EXERCISES IN 1996 FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Shares Value of Unexercised Shares Underlying Unexercised In-the-Money Options/ Acquired Options/SARs at FY-End (#) SARs at FY-End on Value ($)(1) Exercise Realized Exercisable/ Exercisable/ Name (#) ($) Unexercisable Unexercisable ---- ---------- -------- ------------- --------------- Louis J. Morgan 25,000 57,813 35,166/33,334 30,729/15,834 Howard Meltzer ______ ______ 25,000/50,000 ____________ Michael Press ______ ______ /25,000 ____________ Michael J. Kreutzjans 10,000 33,125 31,999/30,001 27,541/15,834 Jerry M. Traver 13,000 135,688 13,999/30,001 4,478/15,834 - -----------------------
(1) These values represent the excess, if any, of the fair market value of the shares of Common Stock subject to Options on December 31, 1996 over the respective option prices. COMPENSATION OF DIRECTORS On May 13, 1994, the Company adopted a policy of paying its non-employee directors $4,000 per year and, in addition, $750 per meeting. Pursuant to this policy, non-employee directors were paid an aggregate of $29,750 during the last fiscal year. 6 EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS. Effective as of December 2, 1996, the 1989 Employment Agreement between the Company and Mr. Morgan was replaced by a new Employment Agreement. Mr. Morgan's current agreement provides for his continued employment by the Company as Chairman of the Board of Directors at an annual salary of $251,000, an amount equal to his 1996 base compensation. Pursuant to the Agreement, the Company shall use its best efforts to nominate Mr. Morgan as director at its next meeting of shareholders. The Agreement expires December 2, 1997 unless extended by the parties. The Employment Agreement also contains confidentiality and nondisclosure provisions. In July, 1996, the Company and Mr. Meltzer entered into an Employment Agreement. It provides for (i) the employment of Mr. Meltzer as President and Chief Operating Officer of the Company, (ii) a minimum annual base salary of $190,000 for the three years beginning July 16, 1996 unless Mr. Meltzer's employment is earlier terminated in accordance with the Agreement, and (iii) the granting of certain stock options during its term. Further, the Employment Agreement provides that upon termination of Mr. Meltzer's employment under certain circumstances, Mr. Meltzer shall be entitled to additional compensation in an amount equal to his annual base salary. The Employment Agreement also contains confidentiality and non-compete provisions. In July, 1996, Michael Press commenced his employment as Vice President, Finance, and Chief Financial Officer. On that date, Mr. Press entered into a letter agreement with the Company which provides that in the event his employment with the Company is terminated for any reason he would receive an amount equal to one year of his compensation. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information as of December 31, 1996 regarding the beneficial ownership of shares of the Common Stock of the Company by each director and by all current directors and executive officers as a group.
Beneficial Ownership of Shares of of Percent Name Common Stock of Class ----- ----------------------- --------- Louis J. Morgan(1)...................... 374,932 5.1% Ronald Langley(2)....................... 3,396,400 45.8% All Directors and Officers as a Group (4 persons)(1)(2)(3)........... 3,877,496 52.3%
- ----------------------------- (1) Does not include 275,100 shares of Common Stock held by Mr. Morgan's spouse, as to which shares Mr. Morgan disclaims any voting or investment power. Includes 35,166 shares of Common Stock which may be acquired upon exercise of presently exercisable options. (2) Mr. Langley, a Director of the Company since 1995, is a Director of PICO Holdings, Inc. ("PICO"). As such, Mr. Langley may be deemed to beneficially own the 3,396,400 shares of common stock of the Company over which shares PICO claimed beneficial ownership in a Schedule 13D filed with the SEC on December 16, 1996. See "Principal Stockholders." Mr. Langley disclaims beneficial ownership of these shares within the meaning of 13d-3 of the Securities and Exchange Act of 1934. (3) Includes 106,164 shares of Common Stock which may be acquired upon exercise of presently exercisable options. 7 PRINCIPAL STOCKHOLDERS The following table sets forth information as of December 31, 1996 regarding each person other than directors of the Company who were known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock. Each person named has sole voting and investment power with respect to the shares beneficially owned by such person. The information presented in the table is derived from a Schedule 13D filed with the SEC by the named person on December 16, 1996.
Amount and Nature of Name and Address of Beneficial Owner Beneficial Ownership of Shares Percent of Class - ------------------------------------ ------------------------------ ----------------- PICO Holdings, Inc. 3,396,400--Direct 45.8% 875 Prospect Street La Jolla, California
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On November 14, 1996, the Company entered into an agreement with Physicians Insurance Company of Ohio, Inc. ("PICO"), which then owned approximately 30% of the Company's outstanding shares of common stock. Pursuant to the Agreement, PICO invested $2.5 million in the Company in exchange for a Subordinated Convertible Debenture (the "Debenture") in the principal amount of $2.5 million with interest at 1% over prime. PICO made the investment and the Debenture was issued on December 2, 1996. The Debenture matures on December 31, 2001 and is convertible at any time by PICO into 1.25 million shares of common stock of the Company (subject to adjustment in certain cases). 8 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PC QUOTE, INC. By: /s/ LOUIS J. MORGAN - -------------------------------------------------- Louis J. Morgan, Chairman By: /s/ HOWARD MELTZER - ------------------------------------------------- Howard Meltzer President and Chief Operating Officer By: /s/ MICHAEL PRESS - -------------------------------------------------------- Michael Press Vice President, Finance, Chief Financial Officer In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ LOUIS J. MORGAN - --------------------------------------------- Louis J. Morgan, Director April 30, 1997 /s/ RONALD LANGLEY - ---------------------------------------- Ronald Langley, Director April 30, 1997 9 -----END PRIVACY-ENHANCED MESSAGE-----