<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WALBRO CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
WALBRO CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
WALBRO CORPORATION
6242 GARFIELD STREET
CASS CITY, MICHIGAN 48726
(517) 872-2131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
MARCH 14, 1996
To the Stockholders of
Walbro Corporation
The Annual Meeting of the stockholders of Walbro Corporation, a
Delaware corporation, will be held in Auburn Hills, Michigan, at the Company's
automotive headquarters, 1227 Centre Road, on April 17, 1996 at 11:00 a.m. EDT,
for the following purposes:
(1) To elect three Directors to serve for a term of three years or
until their successors have been elected and qualified; and
(2) To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
The Board of Directors of the Company (the "Board of Directors" or
"Board") has fixed the close of business on February 19, 1996 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the meeting. The transfer books of the Company will not be closed. It is
anticipated that this Notice and Proxy Statement and the enclosed form of proxy
will first be sent to the stockholders on or about March 14, 1996.
The Board of Directors would like to have all stockholders represented
at the meeting. Whether or not you plan to attend the meeting, you are urged
to fill in, date and sign your proxy, and return it in the accompanying
envelope. You have the power to revoke your proxy at any time before it is
voted by written notice to the Secretary of the Company, and the giving of a
proxy will not affect your right to vote in person if you attend the meeting.
Your proxy is solicited by the Board of Directors, and the cost of solicitation
will be paid by the Company. Proxies may be solicited by personal interview,
telephone or telegram by the officers, employees or directors of the Company,
none of whom will receive any compensation therefor in addition to his or her
regular compensation. In addition, the Company has engaged Morrow & Co., Inc.
to solicit proxies by telephone, mail or personal contact from brokers, bank
nominees, other institutional holders and the 100 individual stockholders of
record holding the greatest
<PAGE> 3
number of shares of the Company's common stock, par value $.50 per share
("Common Stock"). The Company will pay Morrow & Co. a fee of $3,500 for its
services.
On February 19, 1996, there were 8,598,096 shares of Common Stock
outstanding, each of which is entitled to one vote. An Annual Report for the
fiscal year 1995 containing financial and other information pertaining to the
Company is being mailed to the stockholders together with this Notice and Proxy
Statement.
The vote of a majority of the shares present in person or by proxy at
the meeting will be required to elect the candidates for Director.
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the election inspectors appointed for the meeting and will
determine whether or not a quorum is present. The election inspectors will
treat abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum and will also count abstentions for
purposes of voting on any proposal presented at the meeting or any adjournment
thereof. Abstentions will have the same effect as a vote against a proposal.
If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the power vested in it under Article VI of the Company's
Restated Certificate of Incorporation, as amended (the "Restated Certificate"),
the Board of Directors has fixed the number of Directors which shall constitute
the whole Board at eight. Article VI of the Restated Certificate also provides
that the Board members shall be classified with respect to the time for which
they shall hold office by dividing them into three classes, the members of each
class to hold office for a term of three years. Three Class III Directors are
to be elected at the Annual Meeting of Stockholders on April 17, 1996 for a
term of three years expiring at the Annual Meeting of Stockholders in 1999.
If for any reason any of the nominees shall become unavailable for
election, the proxy will be voted for nominees selected by the Board of
Directors. At this time the Company knows of no reason why any of the nominees
would not be available for election.
2
<PAGE> 4
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE NOMINEES NAMED
BELOW AND YOUR PROXY WILL BE SO VOTED UNLESS AUTHORITY IS WITHHELD.
INFORMATION AS TO NOMINEES
The names of the nominees for the office of Director, together with
certain information concerning such nominees, are set forth below:
<TABLE>
<CAPTION>
Served as
Principal Occupation and Business Experience Director
Nominees Age During the Past Five Years Since
- -------------------- --- ---------------------------------------------------------------- ---------
<S> <C> <C> <C>
CLASS III
TERM EXPIRES IN 1999:
William T. Bacon, Jr. 73 Associate, The Chicago Corporation since 1991. Honorary 1972
* Director, Stifel Financial Corp. 1984 - 1994. Prior thereto,
** Managing Partner of Bacon Whipple & Co., Inc. Also a director
of IDEON Corp.
Frank E. Bauchiero 61 President Industrial Group, Dana Corporation North American 1990
** Operations, Dana Corporation since 1989 and Dana Group Vice-
*** President, 1987-1990. Dana Corporation manufactures automotive
**** product systems, mobile off-highway equipment and industrial
equipment. Also a director of Regal Beloit Corp.
Vernon E. Oechsle 53 President, Chief Executive Officer and Director of Quanex 1994
**** Corporation since 1996; Chief Operating Officer of Quanex
***** Corporation, 1993-1995. Quanex is a manufacturer of specialty
steel and aluminum products. From 1990 to 1992, Chief
Executive Officer of Allied Signal Automotive; prior thereto
Group Executive, Automotive and Truck for Dana Corporation and
President of Hayes-Dana, Dana's Canadian subsidiary.
</TABLE>
- ---------------
* Member of the Executive Committee
** Member of the Compensation Committee
*** Member of the Audit Committee
**** Member of the Human Resource Planning Committee
***** Member of the Directors Committee
3
<PAGE> 5
INFORMATION AS TO DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE
MEETING
The name of, and certain information with respect to, the remaining
five (5) Directors of the Company are as follows:
<TABLE>
<CAPTION>
Served as
Principal Occupation and Business Experience Director
Directors Age During the Past Five Years Since
- ------------------ --- ---------------------------------------------------------------- ----------
<S> <C> <C> <C>
CLASS I
TERM EXPIRES IN 1997:
Herbert M. Kennedy 66 Professor of Business Administration, Principia College, Elsah, 1981
* Illinois since before 1990 to 1995 (Retired July 1995).
***
Robert D. Tuttle 70 A Director of Woodhead Industries, Inc. and Guardsman Products, 1981
** Inc. From before 1989 to 1991, Chairman, CEO and Director of
**** SPX Corporation which produces specialty tools and equipment and
***** distributes automotive components.
Robert H. Walpole 56 President of Walbro Engine Management Corporation since 1991. 1983
Vice President of the Company since 1983.
CLASS II
TERM EXPIRES IN 1998:
Lambert E. Althaver 65 Chairman of the Board of the Company since 1987. President and 1968
* Chief Executive Officer since 1982.
John E. Utley 55 Chairman of the Board of Kelsey-Hayes Company since 1992 and 1993
*** Vice Chairman and Vice President from 1989 to 1992. Senior
***** Vice President of Varity Corporation since 1994. Kelsey-Hayes
produces anti-lock braking systems, traction control systems
and wheel assemblies for the automotive industry. Also
Chairman of the Board of Hayes Wheels International, Inc.
</TABLE>
Mr. Robert H. Walpole is a brother-in-law of Mr. Lambert E. Althaver.
- ---------------
* Member of the Executive Committee
** Member of the Compensation Committee
*** Member of the Audit Committee
**** Member of the Human Resource Planning Committee
***** Member of the Directors Committee
4
<PAGE> 6
BOARD MEETINGS AND COMMITTEES
The Company has an Audit Committee, a Compensation Committee, a
Directors Committee, a Human Resource Planning Committee and an Executive
Committee.
The Audit Committee, consisting of Messrs. Kennedy (Chairman),
Bauchiero and Utley, met twice in 1995 and recommended to the Board of
Directors the selection of the Company's independent public accountants and
reviewed the plan, scope and results of such independent public accountants'
audit. The primary purpose and function of the Audit Committee is to provide
an opportunity for direct communication with the Board of Directors by the
Company's independent public accountants.
The Compensation Committee of the Board of Directors held one meeting
in 1995. The members of the Compensation Committee are Messrs. Bacon
(Chairman), Bauchiero and Tuttle. The Compensation Committee awards stock
options under the Company's stock option plans, determines the compensation of
the Company's executive officers and reviews, and sets the policies for, the
compensation payable to approximately the next 25 most highly compensated
employees of the Company. See "Compensation Committee Report on Executive
Compensation."
The Directors Committee of the Board of Directors did not meet in
1995. The members of the Directors Committee are Messrs. Utley (Chairman),
Oechsle and Tuttle. The Directors Committee (i) conducts a continuing study of
the size, structure, and composition of the Board; (ii) seeks out and
interviews possible candidates and reports its recommendations to the Board;
(iii) periodically reviews the Board's tenure policy; and (iv) determines the
criteria for selection and retention of Board members. Although the Committee
has its own procedures for selecting nominees for Board membership, it will
give due consideration to nominees recommended by stockholders. A stockholder
desiring to recommend a person for nomination to the Board should submit a
complete resume of the proposed nominee's qualifications and background
together with a statement setting forth the reasons why such person should be
considered for membership. Such information should be addressed to the
Secretary of the Company.
The Company has an Executive Committee vested with the powers of the
Board, except those powers specifically reserved by Delaware law to the full
Board. The Executive Committee exists to give the Board the flexibility to
make decisions during intervals between regular meetings of the full Board.
The Committee members are Messrs. Althaver (Chairman), Bacon and Kennedy. The
Executive Committee did not meet in 1995.
The Human Resources Planning Committee of the Board met once in 1995.
The members of this committee are Messrs. Tuttle (Chairman), Bauchiero and
Oechsle. The Human Resource Planning Committee reviews the short and long
range human resource needs of the Company and advises management of its
assessment. Also, the Human Resource Planning Committee evaluates strategic
human resource needs including senior executive succession.
During the year ended December 31, 1995, the Board of Directors held a
total of six meetings. During 1995, each Director attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all committees of the Board on which he
served.
COMPENSATION OF THE BOARD OF DIRECTORS
Employee-officers who are also Directors do not receive compensation
for their service as Directors. The non-employee Directors of the Company
receive an attendance fee of $1,200 for each Directors' meeting attended, $750
for each committee meeting attended and $300 for each telephone
5
<PAGE> 7
meeting of the full Board or a Committee. Additionally, non-employee Directors
of the Company receive an annual retainer of $20,000.
On June 21, 1994, the Company granted to each non-employee Director of
the Company, other than Mr. Oechsle, an option to purchase 10,000 shares of
Common Stock at $25.50 per share and effective October 1, 1994, the Company
granted to Mr. Oechsle an option to purchase 10,000 shares of Common Stock at
$21.75 per share. Under the Equity Plan, each non-employee Director may elect
to receive all or any portion of his compensation in the form of stock options.
In addition, non-employee Directors are entitled to participate in the
Company's Retirement Income Plan for Directors (the "Retirement Income Plan").
The Retirement Income Plan, which became effective February 23, 1988, provides
an annual benefit to Directors who have completed at least five consecutive
years of service equal to the annual retainer paid to the outside Directors of
the Company as periodically modified, subject to the following vesting
schedule: five years - 50%; six years - 60%; seven years - 70%; eight years -
80%; nine years - 90%; and ten years - 100%. The benefit is paid annually
commencing at age 72 or when the individual ceases to be a Director, whichever
last occurs, and continues for life. If upon death a Director is survived by a
spouse, the spouse is entitled to receive for the balance of the spouse's life
an annual payment equal to 50% of the annual payment that would have been
payable to the Director under this policy.
6
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 19, 1996, to the knowledge of the Company's Board of
Directors, the following persons were owners of more than five percent (5%) of
the Common Stock.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percentage of
Beneficial Owner Beneficial Ownership Class
- --------------------------------------- -------------------- -------------
<S> <C> <C>
David L. Babson & Co., Inc. 730,900(1) 8.5%
One Memorial Drive
Cambridge, MA 02142
The Capital Guardian Trust Company 571,300(2) 6.6%
and The Capital Group Companies, Inc.
333 S. Hope Street
Los Angeles, CA 90071
</TABLE>
- ------------------
(1) As reported on a Schedule 13G dated February 12, 1996 filed with the
Commission by David L. Babson & Co., Inc. According to such Schedule 13G,
David L. Babson & Co., Inc. has sole voting power with respect to 403,300
of these shares, shared voting power with respect to 327,600 of these
shares and sole dispositive power with respect to all 730,900 of these
shares.
(2) As reported on a Schedule 13G dated February 9, 1996 filed with the
Securities and Exchange Commission (the "Commission") by The Capital Group
Companies, Inc. and The Capital Guardian Trust Company. The Capital
Guardian Trust Company is a wholly owned subsidiary of The Capital Group
Companies, Inc. According to such Schedule 13G, The Capital Group
Companies, Inc. and The Capital Guardian Trust Company each have sole
voting power with respect to 471,300 of these shares and no voting power
with respect to the remaining 100,000 shares and have sole dispositive
power with respect to all 571,300 of these shares.
7
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding beneficial
ownership of Common Stock by each of the Directors and nominees, each of the
Named Officers (as defined on page 11) and all Directors and executive officers
of the Company as a group as of February 19, 1996:
<TABLE>
<CAPTION>
Amount and Nature of Percentage
Names Beneficial Ownership (1) of Class
- ------------------------------------------------------- ----------------------- ----------
<S> <C> <C>
Lambert E. Althaver . . . . . . . . . . . . . . . . . . 220,944(2) 2.6%
William T. Bacon, Jr. . . . . . . . . . . . . . . . . . 67,775(3) *
Frank E. Bauchiero . . . . . . . . . . . . . . . . . . 12,494(4) *
Herbert M. Kennedy . . . . . . . . . . . . . . . . . . 12,500(5) *
Vernon E. Oechsle . . . . . . . . . . . . . . . . . . . 12,466(6) *
Michael A. Shope . . . . . . . . . . . . . . . . . . . 5,609(7) *
Robert D. Tuttle . . . . . . . . . . . . . . . . . . . 16,000(8) *
John E. Utley . . . . . . . . . . . . . . . . . . . . . 12,297(9) *
Gary L. Vollmar . . . . . . . . . . . . . . . . . . . . 38,778(10) *
Robert H. Walpole . . . . . . . . . . . . . . . . . . . 194,425(11) 2.3%
Richard H. Whitehead, III . . . . . . . . . . . . . . . 14,790(12) *
All Directors and Executive Officers as
a Group (12 persons) . . . . . . . . . . . . . . . . 625,585(13) 7.3%
</TABLE>
- ------------------
* Indicates that the percentage beneficially owned does not exceed one
percent.
(1) The named stockholders have sole voting and dispositive power over all
shares except as otherwise noted and except as to those shares over which
beneficial ownership is disclaimed.
(2) Includes 74,643 shares owned by Mr. Althaver's wife. Mr. Althaver
disclaims beneficial ownership of these shares. Also includes 55,349
shares which are covered by presently exercisable options under the
Company's stock option plans and 17,791 shares held for the account of
Mr. Althaver by the trustee of the Company's Advantage Plan.
(3) Includes 3,300 shares owned by Mr. Bacon's wife and 5,025 shares owned by
Mr. Bacon's son. Mr. Bacon disclaims beneficial ownership of these
shares. Also includes 10,000 shares over which Mr. Bacon shares voting
power as co-trustee of two trusts for the benefit of the beneficiaries of
the estate of his deceased mother. Includes 10,000 shares which are
exercisable under the Equity Plan.
(4) Includes 11,466 shares which are exercisable under the Equity Plan.
(5) Includes 1,250 shares over which Mr. Kennedy has voting power as trustee
of a trust. Also includes 1,250 shares over which Mr. Kennedy's wife has
sole voting power as trustee of a trust and as to which Mr. Kennedy
disclaims beneficial ownership. Includes 10,000 shares which are
exercisable under the Equity Plan.
(6) Includes 11,466 shares which are exercisable under the Equity Plan.
(7) Includes 100 shares owned by Mr. Shope's son. Mr. Shope disclaims
beneficial ownership of these shares. Also includes 3,309 shares which
are covered by presently exercisable options under the Company's stock
option plans.
(8) Includes 3,000 shares which Mr. Tuttle owns jointly with his wife, over
which Mr. Tuttle and his wife share voting and dispositive power.
Includes 10,000 shares which are exercisable under the Equity Plan.
(9) Includes 11,797 shares which are exercisable under the Equity Plan.
(10) Includes 28,740 shares which are covered by presently exercisable options
under the Company's stock option plans and 5,250 shares held for the
account of Mr. Vollmar by the trustee of the Company's Advantage Plan.
(11) Includes 79,385 shares over which Mr. Walpole shares voting power as
co-trustee of a trust for the benefit of the beneficiaries of the estate
of his deceased father. Includes 13,325 shares owned by Mr. Walpole's
wife. Mr. Walpole disclaims beneficial ownership of these shares. Also
includes 690 shares held for the account of Mr. Walpole by the trustee of
the Company's Advantage Plan.
(12) Includes 13,583 shares which are covered by presently exercisable options
under the Company's stock option plans. Also includes 1,207 shares held
for the account of Mr. Whitehead by the trustee of the Company's
Advantage Plan.
(13) Includes 178,879 shares which are covered by presently exercisable
options under the Company's stock option plans. Also includes 24,938
shares held for the account of four officers of the Company by the
trustee of the Company's Advantage Plan and includes 1,238 shares held
for one officer of the Company by the trustee of the Company's Employee
Stock Ownership Plan.
8
<PAGE> 10
IDENTIFICATION OF OTHER EXECUTIVE OFFICERS
A description of the Company's other executive officers, excepting
those officers who are also Directors, is set forth below:
<TABLE>
<CAPTION>
Name Age Experience During the Past Five Years
- ------------------ --- -------------------------------------
<S> <C> <C>
Daniel L. Hittler 60 Secretary of the Company since 1993. Chief Administrative Officer
of the Company from 1994 to present. Director of Administration
from 1992 to 1993. Director of Technical Planning from 1989 to
1992.
Michael A. Shope 51 Chief Financial Officer of the Company since December 1993.
Treasurer of the Company since April 1994. Treasurer of Libbey-
Owens-Ford Co., a manufacturer of glass for automotive and
industrial applications, from 1986 to 1993.
Gary L. Vollmar 44 President of Walbro Automotive Corporation since 1993. Vice-
President of the Company since 1989. Chief Financial Officer of
the Company from 1989 to 1993.
Richard H. Whitehead, III 51 Vice-President of the Company since 1988. Vice-President/General
Manager, Automotive Division-Whitehead from 1988 to 1990.
</TABLE>
For a description of those executive officers who are also Directors,
see the Class I and II Director charts. Each executive officer shall serve in
the capacity described above until such time as his successor is duly elected
and qualified.
9
<PAGE> 11
INDEBTEDNESS OF MANAGEMENT
The following Named Officers (as defined on page 11) are indebted to
the Company as disclosed in the following table. The principal amount of the
indebtedness in each case relates to loans made by the Company to the Named
Officers and to approximately 24 other employees (collectively the "Borrowers")
to permit them to repay individual bank loans that came due. The bank loans
originated approximately six years ago to enable the borrowers collectively to
acquire approximately 84,500 shares of the Common Stock from UIS, Inc. which
had acquired the shares in 1987 as part of an unsuccessful tender offer
strategy. The loans carry interest at prime.
<TABLE>
<CAPTION>
Maximum
Indebtedness
Since January 1, Indebtedness at
Name Position 1995 February 19, 1996
- ------------------- -------- ---------------- -----------------
<S> <C> <C> <C>
Lambert E. Althaver Chairman, President and Chief Executive $161,250 $161,250
Officer
Gary L. Vollmar Vice-President 145,125 145,125
Robert H. Walpole Vice-President 112,875 112,875
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and persons who own
greater than 10% of a registered class of the Company's equity securities to
file reports of ownership and changes in ownership with the Commission. Based
solely on a review of the forms it has received and on written representations
from certain reporting persons that no such forms were required for them, the
Company believes that, except as set forth below, during 1995 all Section 16
filing requirements applicable to its officers, directors and 10% beneficial
owners were complied with by such persons.
Mr. Whitehead did not timely report one transaction on a Form 4 during
1995; however, the information required was included in a Form 5 filed in
February 1996.
10
<PAGE> 12
EXECUTIVE COMPENSATION
The table below provides information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal years ended December 31, 1995, 1994 and 1993 of the persons who were at
December 31, 1995 (i) the Chief Executive Officer and (ii) the four other most
highly compensated (based upon combined salary and bonus) executive officers of
the Company (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards (1)
------------------------ -----------
Securities All Other
Name and Salary Bonus Underlying Compensation
Principal Position Year ($) ($) Options (#) ($)(2)
------------------------------ ---- -------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Lambert E. Althaver 1995 $375,000 -0- 15,625 $9,100
Chairman, President and Chief 1994 330,000 -0- 14,559 11,575
Executive Officer 1993 305,000 -0- 11,244 11,229
Robert H. Walpole 1995 254,000 -0- -0- 8,550
Vice-President 1994 242,000 -0- -0- 11,725
1993 235,000 -0- -0- 10,244
Gary L. Vollmar 1995 225,000 -0- 9,375 9,000
Vice-President 1994 200,000 -0- 8,824 8,849
1993 166,670 -0- 6,452 7,705
Richard H. Whitehead, III 1995 180,000 -0- 10,000 6,040
Vice-President 1994 170,000 -0- 7,500 5,006
1993 165,000 -0- 6,083 6,866
Michael A. Shope 1995 135,000 $18,750 4,500 2,025
Treasurer and Chief Financial 1994 125,000 -0- 3,309 -0-
Officer 1993 -0- -0- -0- -0-
</TABLE>
(1) None of the Named Officers had any restricted stockholdings as of December
31, 1995.
(2) These amounts represent matching and retirement contributions made by the
Company pursuant to its salary savings plan, entitled the Advantage Plan.
11
<PAGE> 13
The following table provides information on grants of stock options in
1995 to the Named Officers pursuant to the Equity Plan. No stock appreciation
rights were granted under the Equity Plan during 1995.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Appreciation for Option
Grants Terms (2)
- ----------------------------------------------------------------------------------- ------------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise
Granted Employees Price Expiration
Name (#) (1) in 1995 ($/Sh) Date 5% ($) 10% ($)
------------------------- ---------- ---------- --------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Lambert E. Althaver 15,625 14.2% $18.00 12/11/2005 $176,877 $448,240
Robert H. Walpole -0- -0- -- -- -- --
Gary L. Vollmar 9,375 8.5 18.00 12/11/2005 106,126 268,944
Richard H. Whitehead, III 10,000 9.1 18.00 12/11/2005 113,201 286,876
Michael A. Shope 4,500 4.1 18.00 12/11/2005 50,940 129,093
</TABLE>
(1) These options were granted under the Equity Plan, approved, as amended, by
the stockholders on April 19, 1995. The Named Officers may exercise the
options at a price of $18.00 per share at any time after June 11, 1996
through December 11, 2005. Each option includes the grant of a stock
performance award under the terms of which the Named Officer will receive
a target number of shares of Common Stock if the $18.00 share price
appreciates to $39.46 per share by December 11, 2000.
(2) Gains are reportable net of the option exercise price but before taxes
associated with exercise. These amounts represent certain assumed rates
of appreciation only. Actual gains, if any, on stock option exercise are
dependent on the future performance of Common Stock, as well as the option
holder's continued employment throughout the vesting period. The amounts
reflected in the Table may not necessarily be achieved.
12
<PAGE> 14
The following table provides information for the Named Officers'
unexercised options at December 31, 1995. Included are options granted under
the Equity Plan.
AGGREGATED OPTION EXERCISES IN 1995
AND YEAR-END 1995 OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at Options at December 31, 1995
December 31, 1995 (#) ($)(1)
--------------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-------------------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
Lambert E. Althaver 55,349 15,625 $133,155 $1,953
Robert H. Walpole -0- -0- -0- -0-
Gary L. Vollmar 28,740 9,375 64,972 1,172
Richard H. Whitehead, III 13,583 10,000 8,438 1,250
Michael A. Shope 3,309 4,500 3,723 563
</TABLE>
(1) Based upon the difference between the exercise price and the $18 1/8
closing price of the Common Stock on the Nasdaq National Market on
December 29, 1995.
13
<PAGE> 15
The following table provides information on awards in 1995 to the
Named Officers pursuant to the Company's Equity Plan and its Engine Management
Corporation Incentive Compensation Plan.
LONG-TERM INCENTIVE PLANS AWARDS IN 1995
<TABLE>
<CAPTION>
Estimated Future Payouts under
Non-Stock Price-Based Plans
Performance or ------------------------------
Number of Shares, Other Period
Units or Other Until Maturation Target
Name Rights (#) or Payout ($)
-------------------------- ----------------- ---------------- --------
<S> <C> <C> <C>
Lambert E. Althaver -0- N/A N/A
Robert H. Walpole 22 Units (1) 1/2 year $281,603
Gary L. Vollmar -0- N/A N/A
Richard H. Whitehead, III -0- N/A N/A
Michael A. Shope -0- N/A N/A
</TABLE>
(1) Award granted under the Company's Engine Management Incentive Compensation
Plan, which provides an opportunity for participants to share a pool of
money (the "Pool") if Engine Management Corporation ("EMC") meets
cumulative financial performance goals ("EBIT Target") over a five year
period, commencing July 1, 1991. A total of 500 units are being granted
under the Plan, 100 each fiscal year. Each participant, including the
Named Officer, is entitled to the percentage of the Pool calculated by
dividing his total units granted by 500. Threshold before any dollars are
assigned to the Pool is 70% of the EBIT Target. The value of the Pool as
of the determination date is equal to the product of the fair market value
of EMC (as determined by an independent investment advisor) and a target
percentage. If the cumulative financial performance goal is achieved or
exceeded, the target is 15%. If the performance is between 70% and 100%
of the goal, the target percentage is decreased proportionately.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company has entered into employment agreements with Messrs.
Althaver and Vollmar which have terms beginning on August 6, 1993 and ending on
August 5, 1994 and provide them minimum base salaries of $305,000 and $150,000,
respectively, subject to review and increase by the Compensation Committee.
Also, the Company has entered into an employment agreement with Mr. Shope which
has a term beginning December 20, 1993 and ending December 19, 1994 and
provides a minimum base salary of $125,000, subject to review by the
Compensation Committee. The Company also entered into an employment agreement
with Mr. Whitehead, which has a term expiring in May 1, 1996 and provides him
with a minimum base salary of $180,000 per year subject to review by the
Compensation Committee. Each employment agreement is renewable automatically
for twelve months, subject to cancellation by the Company prior to the
anniversary date. The employment agreements with Messrs. Althaver and Vollmar
have been renewed through August 5, 1996. The employment agreement with Mr.
Shope has been renewed through December 19, 1996. In addition, each is
entitled to participate in the Equity Plan. The Company has also entered into
an employment agreement with Mr. Walpole which has a term beginning on October
1, 1993 and ending on September 30, 1994 and provides him a minimum base salary
of $235,000, subject to review and increase by the Compensation Committee. The
employment agreement with Mr. Walpole has been renewed through September 30,
1996. In addition, he is entitled to participate in the Company's Engine
Management Incentive Compensation Plan. See "Compensation Committee Report on
Executive Compensation."
14
<PAGE> 16
Each employment agreement includes a severance clause under the terms
of which the employee is entitled to severance pay if during the initial term
of the agreement or a renewal term, his employment is terminated by the Company
other than as a result of his (i) permanent disability or (ii) termination for
cause. The severance pay payable under the agreements is an amount equal to
the annual base compensation being paid to the Named Officer at the date of
termination, offset by the amount due under the portion of the employment
agreement that had not yet been performed, if any, and the amount of
compensation the Named Officer may receive from any other employers during the
twelve months immediately following the date notice of termination is given to
him by the Company.
In 1990, the Company entered into Severance Compensation Consulting
Agreements (the "Severance Agreements") with over 40 senior employees,
including each of the Named Officers. The Severance Agreements were the result
of a determination by the Board of Directors that it was important to, and in
the best interests of the Company and its stockholders to ensure that, in the
event of a possible change in control of the Company, the stability and
continuity of management will continue unimpaired, free of distraction incident
to any such change in control.
The Severance Agreements provide that if during a two-year period
following a Change in Control of the Company (as described below), an
employee's employment is terminated by the Company other than for cause, death
or permanent disability, or if the employee terminates employment for good
reason, the employee will receive (1) a single sum payment equal to either
three times or two times (depending upon the individual employment agreement)
the employee's average compensation of the prior five calendar years (including
incentive bonus), and (2) 36 months of additional medical, dental, life,
disability and accident insurance and other perquisites substantially similar
to that in effect for the employee at the time of the Change in Control.
However, in no event can the payments and benefits exceed an amount which would
render them "parachute payments" under Section 280G of the Internal Revenue
Code. In order to assure an orderly transition in the event of a Change in
Control, the covered employees have agreed to remain in the employ of the
Company for a period of ninety (90) days following a Change in Control.
"Change in Control" of the Company is defined to include certain
reorganizations, consolidations or mergers of the Company, certain sales or
transfers of substantially all the assets of the Company, approval by the
stockholders of the Company of its liquidation or dissolution, a change in the
composition of the Company's Board of Directors such that it is comprised of
directors a majority of whom are not "Continuing Directors" as defined in the
agreements, or the acquisition by certain persons of thirty percent or more of
the combined voting power of the Company's outstanding securities.
The Severance Agreements further provide that following a Change of
Control, if the employee terminates employment other than for good reason and
the Company could not have terminated the employee for cause, death or
disability, the employee may elect to serve as a consultant to the Company for
a one-year period following the termination of employment and will be paid a
single sum amount equal to the annual compensation, including bonus, paid the
individual during the immediately preceding calendar year. The individual will
also be provided an additional year of coverage with respect to medical,
dental, life, disability and accident insurance and other perquisites
substantially similar to the insurance and other perquisites at the time the
employee elects to render consulting services.
The Severance Agreements have a term of two years, renewable
automatically for additional twelve month periods, subject to cancellation by
the Company upon six months advance notice. If there has been a Change in
Control during the term of the Severance Agreements they would expire two years
after the Change in Control.
15
<PAGE> 17
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
Recognizing that an organization's long term success is in large part
determined by the quality of leadership provided by its executive officers, the
Company has designed its executive compensation program to attract, motivate
and retain the highest level of executive talent and to align these executives'
interests with the long term interests of the stockholders. The program is
comprised of base salary, long term incentive opportunities, cash bonuses and
benefits typically offered to executives by comparably sized manufacturing
companies.
The Compensation Committee, which is comprised solely of outside
Directors, determines the compensation of the executive officers of the
Company, including the Named Officers, and sets the policies for, and reviews
the compensation awarded to, the approximately next 25 most highly compensated
employees. In reviewing the individual performances of the Named Officers
(other than Mr. Althaver, the CEO), the Compensation Committee considers the
recommendations of Mr. Althaver.
The Compensation Committee currently intends for all compensation paid
to the Named Officers to be tax deductible pursuant to Section 162(m) of the
Internal Revenue Code. In the future, however, if in the judgment of the
Compensation Committee the benefits to the Company outweigh any costs to the
Company of such failure to qualify, the Compensation Committee may adopt such a
program.
BASE SALARY
The Committee believes that base compensation should primarily be a
function of the competitive environment of the marketplace. Base salaries for
new executive officers are initially determined by evaluating the
responsibilities of the position held and the experience of the individual, and
by reference to the competitive marketplace for executive talent, including a
comparison to base salaries for positions of comparable complexity and
responsibility. For this purpose the Company utilizes the services of a
compensation consultant. Hay Management Consultants, whose data are based on a
survey (the "Survey") of executive positions in over 700 industrial companies
of all types, has provided this service through 1994. For 1995, Zachary D.
Ford and Associates (Ford) provided a similar service. The principal
consultant at Ford was a former senior employee at Hay who used the same
methodology and the same database to perform the compensation analysis. The
base salaries paid to two of the Named Officers are in the top half of
comparable positions included in the Hay database; three of the Named Officers
are below the 50th percentile of the survey database.
With respect to the base salary granted to Mr. Althaver in 1995, the
Compensation Committee utilized the Survey and also considered the longevity of
Mr. Althaver's service to the Company and its belief that Mr. Althaver is an
excellent representative of the Company to the public. Mr. Althaver was
granted a base salary of $375,000 for 1995, an increase of 13.6% over his
$330,000 base salary for 1994. The Committee's decision to increase Mr.
Althaver's base compensation was not directly based upon or related to the
Company's financial performance.
LONG TERM INCENTIVE COMPENSATION
Under the Company's executive compensation program, each Named
Officer's opportunity for incentive compensation is in large part tied to the
Company's financial performance, through participation in either the Equity
Plan or Walbro Engine Management Incentive Compensation Plan.
Equity Based Long Term Incentive Plan. Key executives not assigned to
the Engine Management Corporation subsidiary are entitled to participate in the
Equity Plan, approved by the stockholders, as
16
<PAGE> 18
amended, on April 19, 1995. The Equity Plan provides the participants the
opportunity to receive stock options at the prevailing market rate. Included
with the stock options are stock performance awards tied to appreciation of the
Common Stock.
The size of each stock option award, the aggregate exercise price of
which cannot exceed 125% of the executive's base salary, is determined by the
Compensation Committee. In making this determination the Committee considers
competitive industry practice, as reported in the Hay Survey, and the Company's
financial performance for the most recent fiscal year measured against its
short term and long term goals. In addition, the Committee considers other
performance measures which may not directly bear on short term stock
performance, including, where appropriate, sales growth, market share,
improvements in product quality and improvements in relations with customers,
suppliers and employees, assigning no specific weight to any one performance
measure.
Each stock option includes a stock performance award which provides an
opportunity to receive a target number of shares of the Common Stock if the
share price of the stock appreciates at a compound 17% rate per year for a
period of five years from the date of grant. If the appreciation is achieved,
the target number of shares will be issued to the executive. Such shares would
have a fair market value approximately equal to the exercise price of the stock
option.
In 1995, Mr. Althaver received options to purchase 15,625 shares of
Common Stock at $18.00 per share, the fair market value of the options on the
date the options were granted. In determining the number of stock options to
award Mr. Althaver, the Committee assessed the Company's financial performance
relative to its goals for net income for the year, and it took into
consideration certain subjective factors, including its evaluation of his
accomplishments in strategic planning and the steps taken to expand the
Company's products and markets. This stock option component of the CEO's 1995
compensation was 25% less than the maximum potential grant authorized under the
Equity Plan, directly reflecting the Company's below-target earnings. The
Committee also considered Mr. Althaver's role in the successful completion
during 1995 of the acquisition of the fuel systems business of Dyno Industrier
A.S., Oslo, Norway, and the related $110 million private placement of ten year
senior notes and new $135 million credit facility.
Mr. Althaver received a total of 390 stock performance award shares in
1995, all of which were pursuant to stock options granted on December 5, 1994.
The fair market value of the shares as of December 31, 1995 was $7,069. The
number of stock performance award shares earned by Mr. Althaver was determined
by the formula established by the Equity Plan.
Engine Management Incentive Compensation Plan . Incentive compensation
for executive officers assigned to the Walbro Engine Management Corporation
subsidiary ("EMC"), including Mr. Walpole, is tied to EMC's financial
performance measured against the five year plan ending June 30, 1996.
Participants are entitled to share a pool of dollars the size of which is based
upon EMC's degree of success in achieving a cumulative five year earnings
target. The threshold before any dollars are assigned to the pool is 70% of the
five year plan. The value of the performance pool as of the determination date
is equal to the product of the fair market value of EMC and a target percentage
determined by the amount of imputed debt outstanding under the EMC plan.
COMPENSATION COMMITTEE
William T. Bacon, Jr., Chairman
Frank E. Bauchiero Robert D. Tuttle
17
<PAGE> 19
PERFORMANCE GRAPH
The following graph shows a five year comparison of cumulative total
returns for the Company, the S&P 500 composite index, a peer group of companies
selected by the Company (the "New Peer Group"), and a peer group of companies
described more fully below (the "Old Peer Group") which until this year, was
used by the Company for purposes of this comparison. The Company determined to
change its peer group of companies from those included in the prior year's
proxy statement because it believes that the companies included in the New Peer
Group represent a more comparable group of companies.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Walbro Corporation 100.00 223.33 356.70 307.19 222.14 215.00
Standard and Poor's 500 Index 100.00 130.47 140.41 154.56 156.60 214.86
New Peer Group 100.00 140.43 211.31 327.93 244.59 230.30
Old Peer Group 100.00 97.98 161.15 262.96 195.01 215.44
</TABLE>
The comparison assumes $100 was invested on December 31, 1990 in the
Common Stock, the S&P 500 index, the New Peer Group and in the Old Peer Group.
18
<PAGE> 20
The companies in the New Peer Group, all of which are in the
automotive industry, are as follows:
<TABLE>
<S> <C>
Arvin Industries, Inc. Mascotech, Inc.
Borg Warner Automotive, Inc. Masland Corporation
Breed Technologies Inc. Shiloh Industries Inc.
Collins & Aikman Products Co. Simpson Industries, Inc.
Donnelly Corporation A.O. Smith Corporation
Excel Industries, Inc. The Standard Products Company
Gentex Corporation Stant Corporation
Harvard Industries, Inc. Superior Industries International, Inc.
Hayes Wheels International, Inc. Tower Automotive
Intermet Corporation Walbro Corporation
The companies in the Old Peer Group, all of which are in the automotive parts industry, are as
follows:
Custom Chrome Inc. Modine Manufacturing Company
Defiance Inc. R & B Inc.
Douglas and Lomason Company Republic Automotive Plans Inc.
Durakon Industries Inc. Simpson Industries, Inc.
Hahn Automotive Warehouse Inc. TBC Corporation
Insurance Auto Auctions Venturian Corporation
Lund International Holdings Inc. Walbro Corporation
Mascotech, Inc.
</TABLE>
In 1995, Automotive Industries Holding and Bestop Inc., which were
included in the Company's peer group in prior years' proxy statements, were
acquired by Lear Seating Corporation and Douglas & Lomason Company,
respectively. In December of 1994, Trico Products Corporation, which also was
included in the Company's peer group in prior years' proxy statements, was
acquired by Stant Corporation. As a result of these acquisitions, these three
companies have been deleted from the Old Peer Group.
19
<PAGE> 21
INDEPENDENT PUBLIC ACCOUNTANT
The Board of Directors, upon recommendation of the Audit Committee,
has appointed Arthur Andersen & Co. to audit the financial statements of the
Company and its subsidiaries for the year ending December 31, 1996. Arthur
Andersen & Co. has been the Company's independent public accountant for ten
years. A representative of Arthur Andersen & Co. is expected to be present at
the Annual Meeting with the opportunity to make a statement, if he or she
desires, and is expected to be available to respond to appropriate questions
with respect to that firm's examination of the Company's Consolidated Financial
Statements.
PROPOSALS OF SECURITY HOLDERS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders must be received by the Secretary of the Company, 6242
Garfield Street, Cass City, Michigan 48726, no later than November 14, 1996.
FORM 10-K
The Company will furnish without charge a copy of its Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, including the financial
statements and the schedules thereto, upon the written request of any security
holder as of the record date, and will provide copies of the exhibits to such
Annual Report upon payment of a reasonable fee which shall not exceed the
Company's reasonable expenses incurred in connection therewith. Requests for
such materials should be directed to Secretary, Walbro Corporation, 6242
Garfield Street, Cass City, Michigan, 48726.
OTHER BUSINESS
It is not anticipated that any matters will be presented to the
stockholders other than those mentioned in this Notice. However, if other
matters are brought before the meeting, it is intended that the persons named
in the Proxy will vote as the Board of Directors directs.
By order of the Board of Directors
/s/ Daniel L. Hittler
---------------------------------------
Daniel L. Hittler, Secretary
ALL STOCKHOLDERS ARE URGENTLY REQUESTED
TO SIGN AND MAIL THEIR PROXIES PROMPTLY
20
<PAGE> 22
<TABLE>
<S><C>
PROXY PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS OF
WALBRO CORPORATION
TO BE HELD ON APRIL 17, 1996
The undersigned hereby appoints Lambert E. Althaver and Robert H. Walpole, and each or either of them, with power of
substitution, as attorneys and proxies for and in the name and place of the undersigned, to vote the number of shares that the
undersigned would be entitled to vote if then personally present at the Annual Meeting of Stockholders of Walbro Corporation to be
held in Auburn Hills, Michigan at the Company's automotive headquarters, 1227 Centre Road, on the 17th day of April, 1996 at 11:00
a.m. EDT, or at any adjournment thereof, upon the matters set forth in the Notice of Annual Meeting of Stockholders and Proxy
Statement, receipt of which is hereby acknowledged.
IF NOT MARKED TO THE CONTRARY, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1.
IMPORTANT: THIS PROXY IS CONTINUED AND MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
</TABLE>
<TABLE>
<S><C>
WALBRO CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
FOR ALL
EXCEPT
NOMINEES
1. ELECTION OF CLASS III DIRECTORS: FOR WITHHELD CROSSED OUT 2. IN THEIR DISCRETION, THE PROXIES ARE
William T. Bacon, Frank E. Bauchiero, Vernon E. Oechsle / / / / / / AUTHORIZED TO VOTE UPON SUCH OTHER
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL MATTERS AS MAY PROPERLY COME BEFORE
NOMINEE(S), STRIKE A LINE THROUGH THE NOMINEE'S NAME THE MEETING.
ABOVE AND FILL IN THE "FOR ALL EXCEPT NOMINEES
CROSSED OUT" OVAL.)
__________________________________________________
Signature
__________________________________________________
Signature (if held jointly)
Dated: _____________________________________, 1996
Signature(s) of holders of common stock should agree
with the name(s) shown on this Proxy. For joint
accounts, both owners should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give title as such. When signing
as a corporation, please sign in full corporate name
by President or other authorized officer. When
signing as a partnership, please sign in partnership
name by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
<PAGE> 23
EDGAR FORMAT APPENDIX
Pursuant to Rule 304(a) of Regulation S-T, following is a list of all
graphic or image information contained in the paper format version of the
Notice of Annual Meeting of Stockholders, Proxy Statement and Form of Proxy:
1. The Notice of Annual Meeting (cover page) contains the Walbro
Corporation logo, centered at the top of the page on the left margin. The
logo consists of the word "Walbro".
2. Page 18 contains a line graph, with the horizontal axis labeled
in years from 1990 through 1995, and the vertical axis labeled in dollars from
0 to 400, in increments of 50, on which the data contained in the table on page
18 of the attached EDGAR format version is represented by four lines, labeled
"Walbro Corporation", "Standard and Poor's 500 Index", "New Peer Group" and
"Old Peer Group", respectively. Both the key to the lines contained in the
graph and the data represented in the graph are set forth below the graph.
