<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
----------------------------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Commission File No. 0-6936-3
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
WD-40 COMPANY
-------------
(Exact Name of Registrant as specified in its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rules
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>
WD-40 COMPANY
1061 CUDAHY PLACE
P.O. BOX 80607
SAN DIEGO, CALIFORNIA 92138-0607
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The 1996 Annual Meeting of the Shareholders will be held at the Carmel
Room, Mission Valley Hilton, 901 Camino del Rio South, San Diego, California
92108, on Tuesday, November 26, 1996, at 2:00 p.m. for the following purposes:
1. To elect a Board of Directors for the ensuing year and until their
successors are elected and qualified;
2. To ratify the selection of Price Waterhouse LLP as the Company's
independent accountants for the year 1997; and
3. To consider and act upon such other business as may properly come
before the meeting.
Only the shareholders of record at the close of business on October 10,
1996 are entitled to vote at the meeting.
By Order of the Board of Directors
Harlan F. Harmsen
Secretary
San Diego, California
November 1, 1996
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of WD-40 Company for use at its Annual Meeting
of Shareholders to be held on November 26, 1996, and at any adjournment or
adjournments thereof. This Proxy Statement and enclosed form of Proxy are first
sent to shareholders on or about November 1, 1996.
At the meeting, the shareholders of WD-40 Company will vote on the Board of
Directors for the ensuing year and the selection of Price Waterhouse LLP as
independent accountants. Detailed information concerning these matters is set
forth below. Management knows of no other business to come before the meeting.
The close of business on October 10, 1996 is the record date for
shareholders entitled to notice of and to vote at the Annual Meeting of
Shareholders of WD-40 Company. On October 10, 1996, WD-40 Company had
outstanding 7,725,653 Common Shares. Shareholders of record entitled to vote at
the meeting will have one vote for each share so held on the matters to be voted
upon. A majority of the outstanding shares will constitute a quorum at the
meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum.
If the enclosed form of Proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions specified
thereon. Except as described herein with respect to broker non-votes, if no
specification is made, the shares will be voted by the proxy holder as set forth
on the Proxy. A Proxy may be revoked by attendance at the meeting or by filing
a Proxy bearing a later date with the Secretary of the Company.
The cost of soliciting proxies will be borne by the Company. Solicitations
other than by mail may be made by telephone or in person by employees of the
Company for which the expense will be nominal.
-1-
<PAGE>
PRINCIPAL SECURITY HOLDERS
The following table sets forth information concerning those persons known
to the Company to be the beneficial owners of more than 5% of the common stock
of the Company.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Ownership Percent
Name and Address of Beneficial Owner October 10, 1996 of Class
- - ------------------------------------ ----------------- ---------
<S> <C> <C>
Mario L. Crivello 524,770/1/ 6.8%
San Diego, California
Margaret L. Roulette 410,000/2/ 5.3
San Diego, California
</TABLE>
/1/ Mr. Crivello has sole voting and investment power over 471,864 shares held
in trust for the benefit of his mother and remainder beneficiaries. He also
has sole voting and investment power over 7,390 shares held as custodian
for children and 45,516 shares held directly.
/2/ Mrs. Roulette has sole voting and investment power over all shares held in
trust for the benefit of herself and remainder beneficiaries.
-2-
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS
AND SECURITY OWNERSHIP OF MANAGEMENT
Unless marked to the contrary, the Proxies received will be voted for the
election of the nine nominees named below to serve as Directors until the next
Annual Meeting of Shareholders and until their successors are elected or
appointed. In the event any nominee is unable or declines to serve as a
Director at the time of the Annual Meeting, his or her Proxy will be voted for a
nominee designated by the present Board of Directors to fill such vacancy.
Each shareholder entitled to vote at the Annual Meeting has the right to
vote his or her shares cumulatively for the election of Directors, provided at
least one shareholder has given notice at the meeting of his or her intention to
vote cumulatively. If cumulative voting is in effect, each shareholder will be
entitled to cast as many votes as there are Directors to be elected multiplied
by the number of shares registered in his or her name on the record date, and to
cast all such votes for one candidate or to distribute such votes among the
nominees in accordance with his or her choice.
If cumulative voting is in effect at the Annual Meeting, unless otherwise
indicated by the shareholder, the persons named in the enclosed form of Proxy
will vote, in their discretion, for one or more of the nominees for whom
authority was not withheld and will cumulate votes in such a manner so as to
assure the election of the maximum number of the nominees of the Board.
To be elected as a Director, a nominee must receive the affirmative vote of
a plurality of votes of Common Shares present or represented at the meeting and
entitled to vote for the election of Directors, whether cumulative voting is in
effect or not. Withheld votes and broker non-votes (which are treated as
"withheld" votes) are not counted as votes in favor of any nominee.
Article III, Section 2 of the By-Laws of the Company, duly adopted by its
shareholders on October 30, 1972, provides that the authorized number of
Directors of the Company shall be not less than six nor more than nine until
changed by amendment of the Articles of Incorporation or by a by-law duly
adopted by the shareholders. The exact number of Directors is to be fixed from
time to time by a by-law or amendment thereof duly adopted by the shareholders
or by the Board of Directors. On June 27, 1988, the number of Directors was
fixed at nine by a resolution duly adopted by the Board of Directors.
-3-
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
- - ------------------------------------------------------
The following table sets forth certain information, including beneficial
ownership of the Company's common stock, for the nine nominees, for the
executive officers named in the Summary Compensation Table on Page 8, and for
all Directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
Principal Director October 10, 1996/1/
Nominee Age Occupation Since Number Percent of Class
- - ------- --- ---------- -------- ------ ----------------
<S> <C> <C> <C> <C> <C>
John S. Barry 72 Retired; Former Chief 1970 211,760 2.7%
Executive Officer and Present
Chairman, WD-40 Company
Mario L. Crivello 56 Investor 1994 524,770/2/ 6.8
Daniel W. Derbes 66 President, Signal Ventures 1984 500 *
Harlan F. Harmsen 69 Retired Attorney; 1977 3,500/3/ *
Secretary, WD-40 Company
Jack L. Heckel 66 Retired; Former President and 1984 2,040 *
Chief Operating Officer,
GenCorp
Margaret L. Roulette 72 Investor 1977 410,000/4/ 5.3
Gerald C. Schleif 61 President and Chief 1984 53,459/5/ *
Executive Officer,
WD-40 Company
C. Fredrick Sehnert 65 Retired; Former Chairman 1983 407 *
and Chief Executive Officer,
Laser Precision Corp.
Edward J. Walsh 64 President, The Sparta Group, 1988 500 *
Ltd.
Executive Officers
- - ------------------
Robert D. Gal 62 Retired; Former Treasurer, N/A 6,855/6/ *
WD-40 Company
Garry O. Ridge 40 Vice President-International, N/A 9,351/7/ *
WD-40 Company
Paul A. Thompsen 60 Vice President-Sales, N/A 26,945/8/ *
WD-40 Company
All Directors and Executive
Officers as a Group 1,250,087/9/ 16.1
</TABLE>
* Less than one (1) percent.
/1/ All shares owned directly unless otherwise indicated.
-4-
<PAGE>
/2/ Mr. Crivello has sole voting and investment power over 471,864 shares held
in trust for the benefit of his mother and remainder beneficiaries. He also
has sole voting and investment power over 7,390 shares held as custodian
for children and 45,516 shares held directly.
/3/ Mr. Harmsen has sole voting and investment power over 800 shares held in
trust for others and 2,700 shares held directly.
/4/ Mrs. Roulette has sole voting and investment power over all shares held in
trust for herself and remainder beneficiaries.
/5/ Mr. Schleif has the right to acquire 26,461 shares upon exercise of stock
options. Mr. Schleif has voting power over 390.3 shares held under the
Company's Employee Stock Ownership Plan.
/6/ Mr. Gal retired as Treasurer of the Company effective October 9, 1996. He
has the right to acquire 6,000 shares upon exercise of stock options. Mr.
Gal has voting power over 854.9 shares held under the Company's Employee
Stock Ownership Plan.
/7/ Mr. Ridge has the right to acquire 7,728 shares upon exercise of stock
options. Mr. Ridge has voting power over 123.4 shares held under the
Company's Employee Stock Ownership Plan.
/8/ Mr. Thompsen has the right to acquire 11,592 shares upon exercise of stock
options. Mr. Thompsen has voting power over 1,627 shares held under the
Company's Employee Stock Ownership Plan.
/9/ Total includes the rights of executive officers to acquire 51,781 shares
upon exercise of stock options and also includes 2,995.6 shares held under
the Company's Employee Stock Ownership Plan over which individual executive
officers have voting power.
-5-
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS
- - ----------------------------------
John S. Barry joined the Company in 1969 as President, became a Director in
1970 and served as Treasurer from 1972 until 1989. He served as Chief Executive
Officer from 1990 until 1992. Mr. Barry was elected Chairman of the Board in
1990.
Mario L. Crivello was elected to the Board of Directors in 1994 following
the death of his father, Sam Crivello, a Company founder. Mr. Crivello is
retired, having been the managing owner and master of Tuna Purse Seiners.
Daniel W. Derbes was elected to the Board of Directors in 1984. He is
President of Signal Ventures, a venture capital firm. Mr. Derbes served as
President of Allied-Signal International, Inc. and Executive Vice President of
the parent corporation until his retirement in 1988. Mr. Derbes is also a
director of Enova Corporation (and its subsidiaries, San Diego Gas & Electric
Company and Pacific Diversified Capital) as well as Oak Ind., Inc.
Harlan F. Harmsen practiced law in San Diego, California from 1957 to 1989.
He has been a Director of the Company since 1977 and was named Secretary of the
Company in 1982.
Jack L. Heckel was elected to the Board of Directors in 1984. He served as
President and Chief Operating Officer of GenCorp from 1987 through 1993. He was
named President of Aerojet General (a division of GenCorp) in 1981 and was
elected Chairman of the Board in 1984. Mr. Heckel joined Aerojet General in
1956 and served as a Group Vice President from 1977 through 1981. Mr. Heckel is
also a director of San Diego based Advanced Tissue Sciences, Inc. and Wisconsin
based Applied Power Corporation.
Margaret L. Roulette is the sister of Mrs. John S. Barry and is the widow
of Robert S. Roulette, a former Director and founder of the Company. Mrs.
Roulette is an investor. She has been a Director since 1977.
Gerald C. Schleif joined the Company in 1969 as Marketing Manager. Mr.
Schleif was elected Chief Executive Officer in 1992 and has served as Company
President since 1990. He has held elected offices of Vice President-Marketing,
Executive Vice President, Treasurer and Chief Operating Officer. Mr. Schleif
has been a director since 1989.
C. Fredrick Sehnert has been a Director of the Company since 1983. Mr.
Sehnert served as Chairman and Chief Executive Officer of Laser Precision Corp.
from 1991 through 1994. Previously, he served as President of Wavetek
Corporation from 1988 until 1991. He was President of Software Products
International, Inc. from 1986 until 1988. Mr. Sehnert was employed by Kratos,
Inc. from 1976 through 1984, serving as Chairman and Chief Executive Officer
from 1981 until 1984.
Edward J. Walsh was elected to the Board of Directors in 1988. He is
President of The Sparta Group, Ltd., a business consulting organization. Mr.
Walsh was employed by The Dial Corporation and its predecessor, Armour-Dial
Corporation, for 27 years, serving as its President and Chief Executive Officer
from 1984 to 1987. He is also a director of Guest Supply, Inc. and Nortrust of
Arizona Holding Corporation.
-6-
<PAGE>
COMPENSATION, COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
---------------------------------------------------------------
Outside directors receive $10,000 as an annual fee and $1,000 for each
Board meeting.
There were five scheduled meetings of the Board of Directors during the
last fiscal year. All directors attended at least 75 percent of the aggregate
of the total number of meetings of the Board and of all committees on which the
director served. The Board of Directors has an Audit Committee and a
Compensation Committee. The Board of Directors does not have a Nominating
Committee.
The Audit Committee is comprised of C. Fredrick Sehnert, Jack L. Heckel and
Edward J. Walsh. One meeting was held during the last fiscal year to consider
the annual audit and review the audit with the independent accountants after its
completion. The Audit Committee also provides its recommendations to the full
Board of Directors with respect to the selection and appointment of independent
accountants for the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- - -----------------------------------------------------------
The Compensation Committee for the past fiscal year was comprised of Jack
Heckel (Chairman), Daniel W. Derbes, C. Fredrick Sehnert and Edward J. Walsh,
all of whom are outside directors.
The function of the Compensation Committee is to provide guidance to the
Board of Directors and oversight for all executive compensation and benefit
programs. The Committee provides recommendations for base salary and incentive
compensation awards for the CEO and executive officers. The Compensation
Committee also serves as the Stock Option Committee with full authority to grant
options and administer the Company's Incentive Stock Option Plans. The
Compensation Committee met twice during the last fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- - -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's stock, to file with the Securities Exchange Commission initial
reports of stock ownership and reports of changes in stock ownership. Reporting
persons are required by SEC regulation to furnish the Company with copies of all
Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company during the last fiscal year and written
representations that no other reports were required, all Section 16(a)
requirements were complied with by all persons required to report with respect
to the Company's stock during the last fiscal year.
RELATED TRANSACTION
- - -------------------
The Company's Operations Manager is Randall Barry who is the son of John S.
Barry. Randall Barry has been an employee of the Company since 1984. For
fiscal year 1996, Randall Barry received total cash compensation in the amount
of $83,844 and employer contributions to the Company's Pension and Profit
Sharing Plans were allocable to his account in the amount of $15,369.
-7-
<PAGE>
EXECUTIVE COMPENSATION
The following table shows information for the three (3) fiscal years ended
August 31, 1996 concerning the Company's Chief Executive Officer and each of the
highest paid executive officers whose annual salary and bonus compensation
exceeded $100,000.
SUMMARY COMPENSATION TABLE/1/
<TABLE>
<CAPTION>
Long Term
Annual Compensation All Other
Compensation Awards Compensation/2/
Fiscal Year ------------------------ -----------------
Name and Principal Position Ended Aug. 31 Salary ($) Bonus ($) Stock Options (#) ($)
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gerald C. Schleif 1996 $250,000 $215,000 8,000 $25,000/3/
Chief Executive Officer 1995 230,000 180,000 8,000 29,000
1994 220,000 132,000 8,000 32,500
Paul A. Thompsen 1996 $135,000 $ 37,000 3,500 $25,000/4/
Vice President-Sales 1995 132,000 61,000 3,400 25,000
1994 126,000 41,000 3,400 26,700
Garry O. Ridge 1996 $120,000 $ 71,000 3,500 $25,000/5/
Vice President-International 1995 100,000 58,500 3,500 25,000
1994 70,340 42,204 3,100 16,882
Robert D. Gal 1996 $ 84,000 $ 19,927 1,200 $19,019/6/
Treasurer 1995 80,000 17,800 1,200 17,897
1994 70,000 17,000 1,200 15,921
</TABLE>
/1/ No information for Other Annual Compensation, Restricted Stock Awards or
Long Term Incentive Payouts has been provided because there was no such
reportable compensation awarded to, earned by or paid to the individuals
named.
/2/ All Other Compensation includes employer contributions to the Company's
Money Purchase Pension Plan, Profit Sharing Plan and 401(k) Employee Stock
Ownership Plan, and director fees for Mr. Schleif for 1994 and 1995.
/3/ Includes $22,500 in contributions to the Company's Money Purchase Pension
Plan and Profit Sharing Plan, $2,500 in matching contributions to the
Company's 401(k) Employee Stock Ownership Plan.
/4/ Includes $22,500 in contributions to the Company's Money Purchase Pension
Plan and Profit Sharing Plan and $2,500 in matching contributions to the
Company's 401(k) Employee Stock Ownership Plan.
/5/ Includes $22,500 in contributions to the Company's Money Purchase Pension
Plan and Profit Sharing Plan and $2,500 in matching contributions to the
Company's 401(k) Employee Stock Ownership Plan.
/6/ Includes $15,589 in contributions to the Company's Money Purchase Pension
Plan and Profit Sharing Plan and $3,430 in matching contributions to the
Company's 401(k) Employee Stock Ownership Plan.
-8-
<PAGE>
STOCK OPTIONS
-------------
The following table sets forth stock options granted pursuant to the
Restated WD-40 Company 1990 Incentive Stock Option Plan during the last fiscal
year to each of the Company's executive officers named in the Summary
Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Total Options
Options Granted to Granted to Employees in Exercise Price Grant Date
Name (#) Fiscal Year 1996 ($/Sh) Expiration Date Value/1/
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gerald C. Schleif 8,000/2/ 12.8% $42.375 9/25/2005 $52,560
Paul A. Thompsen 3,500/3/ 5.6 42.375 9/25/2005 22,995
Garry O. Ridge 3,500/4/ 5.6 42.375 9/25/2005 22,995
Robert D. Gal 1,200/5/ 1.9 42.375 9/25/2005 7,884
</TABLE>
/1/ The Grant Date Value of $6.57 per share has been determined using the
Black-Scholes Option Valuation model. The following assumptions were used
in determining the value: (i) a dividend yield of 5.71%; (ii) expected
volatility of .1879; (iii) a ten-year risk-free rate of return of 6.48%;
and (iv) exercise ten years from the grant date.
/2/ Mr. Schleif's options are non-qualified options exercisable in full on
September 25, 1996.
/3/ Mr. Thompsen's incentive stock options are exercisable as to 1,248 shares
on January 1, 1997 and as to 2,252 shares on January 1, 1998.
/4/ Mr. Ridge's incentive stock options are exercisable as to 1,886 shares on
January 1, 1997 and as to 1,614 shares on January 1, 1998.
/5/ Mr. Gal's incentive stock options are exercisable in full as of September
25, 1996.
Except as noted for Mr. Schleif, all options granted during the Company's
last fiscal year were granted as Incentive Stock Options. The options may be
exercised for cash or in lieu of cash, an option holder may, with the approval
of the Stock Option Committee of the Board of Directors, tender shares of the
Company's common stock previously held by the option holder. In permitting the
exchange of stock upon exercise of options, the Stock Option Committee has
restricted the exercise of options with stock to the tender of shares held for a
minimum of six months.
-9-
<PAGE>
The following table sets forth the number of shares acquired on exercise of
stock options in the Company's last fiscal year, the aggregate dollar value
realized on exercise of such options and the number and dollar value of
unexercised options as of August 31, 1996 for the Company's executive officers
named in the Summary Compensation Table above.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Options Value of Unexercised In-the-Money
at August 31, 1996 (#) Options at August 31, 1996/1/
Shares Acquired Value Realized ------------------------------ ---------------------------------
Name on Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Schleif 7,306 $120,625 26,461 11,433 $145,518 $18,882
Paul A. Thompsen -0- -0- 11,592 4,608 53,701 14,262
Garry O. Ridge 1,000 7,000 7,728 3,972 17,884 12,354
Robert D. Gal -0- -0- 6,000 -0- 31,494 -0-
</TABLE>
/1/ The value of Unexercised In-the-Money Options at August 31, 1996 was
determined based on the difference between the exercise price for such
options and the closing price of $45.50 for the Company's shares as
reported by The Nasdaq Stock Market for August 30, 1996.
SUPPLEMENTAL DEATH AND RETIREMENT BENEFIT PLANS
- - -----------------------------------------------
Since 1984 the Board of Directors has adopted Supplemental Death Benefit
Plans for certain key employees. Under the Death Benefit Plan agreements, a
participating employee's designated beneficiary or the employee's estate will
receive a death benefit equal to the employee's then current base salary in the
event of death prior to retirement from the Company.
Since 1988 the Board of Directors has adopted Supplemental Retirement
Benefit Plans for certain key employees. Under the Retirement Benefit Plan
agreements, participating employees will receive retirement benefits in the
event of the participant's retirement on or after a designated retirement date.
The annual retirement benefit for participating employees will be equal to
twenty-five percent (25%) of the employee's then current base salary, payable in
quarterly installments over a period of fifteen years.
All benefits under the plans will be subject to payroll taxes and required
withholding for state and federal income taxes as deferred compensation. The
benefits are funded by key man life insurance policies purchased and owned by
the Company. The Board of Directors determines which key employees will
participate in the plans and the amount of benefits payable for each
participant. Non-employee directors do not participate in the plans.
-10-
<PAGE>
Based upon current (1997) base salaries, the death benefits and annual
retirement benefits to be provided under the plans to the executive officers
named in the Summary Compensation Table above are set forth below. The
retirement benefit will not be payable unless the executive officer retires with
the Company on or after reaching the specified retirement age. In such event,
the actual amount of the annual benefit will be dependent upon the executive's
then current annual salary.
<TABLE>
<CAPTION>
Death Annual Retirement Retirement
Name Benefit Benefit Age
---- ------- ----------------- ----------
<S> <C> <C> <C>
Gerald C. Schleif $265,000 $66,250 65
Paul A. Thompsen 135,000 33,750 65
Garry O. Ridge 135,000 33,750 65
Robert D. Gal -0- -0- N/A
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation philosophy of the Company is to be competitive in the
marketplace, to attract, retain, and motivate a highly qualified workforce. The
Company uses compensation surveys, conducted by independent consultants, to
provide data to support the development of competitive compensation plans which
reinforce this philosophy. The Compensation Committee of the Board of Directors
(the "Committee") determines compensation for the CEO and executive officers.
The Committee also serves as the Stock Option Committee under the Company's 1981
and 1990 Incentive Stock Option Plans. In evaluating the CEO's performance, the
Committee will measure the year's results against the specific goals set forth
in the annual business plan. In addition to financial performance, the
Committee considers factors important to the Company such as ethical business
conduct, environmental responsiveness, and the general overall perception of the
Company by financial and business leaders.
The Committee is responsible for setting and administering the policies
which govern executive compensation and the stock ownership programs of the
Company. The members of the Committee are Jack Heckel (Chairman), Daniel W.
Derbes, C. Fredrick Sehnert and Edward J. Walsh.
Compensation of the CEO and management's recommendations for all employees'
compensation is reviewed annually by the Committee. Changes proposed for
executive officers are evaluated and approved by the Committee on an individual
basis and all other employees are reviewed as a group. As management
responsibilities increase, a greater portion of compensation is driven by
financial performance measures.
There are four components in the Company's executive compensation program:
1. Base salary
2. Performance Incentive
3. Pension and Profit Sharing
4. Long-term Stock Options
-11-
<PAGE>
The Committee uses a ratio, which is reviewed periodically, to maintain
what it believes to be the appropriate relationship between these components.
The Committee has determined that compensation for the CEO and other executive
officers should be weighted more heavily in favor of performance factors.
Annual Performance Incentives could range between 0-50% of total cash
compensation based on the level of achievement of the current fiscal year's
business plan goals.
Base Salary
- - -----------
Base salaries for the CEO and executive officers are established at the
beginning of each fiscal year. Detailed position descriptions, scope and
complexity of the position as well as external market factors are used to
determine base salary levels. Independent compensation surveys such as Wyatt
Data Services and William Mercer are the basis for these comparables and base
salary levels are pegged at the 50-75th percentile for similar companies. The
companies included in these surveys do not necessarily include any of the
companies included in the Peer Group identified with reference to the Stock
Performance Graph that follows this report. Salary changes are based on
guidelines established for all employees using individual performance and
comparable adjustments from midpoint levels for the various job classifications.
Mr. Schleif's base salary for fiscal year 1996 was $250,000. For fiscal year
1997, Mr. Schleif will receive $265,000, an increase of 6%, in line with
industry average adjustments.
Performance Incentive
- - ---------------------
The Performance Incentive is that substantial portion of the annual
compensation for each executive officer that is related to and contingent upon
the individual's contribution and performance and upon the performance of the
Company as a whole. Consideration is also given to the performance of any
business units under his or her management. The Performance Incentive bonus can
range anywhere from 0-50% of total compensation based primarily on the level of
business plan achievement. In this way, the Company seeks to encourage
continuing focus on increasing the Company's revenue and profitability and
shareholder value while at the same time motivating its executive officers to
perform to the fullest extent of their abilities. Mr. Schleif's Performance
Incentive compensation for fiscal year 1996 was about 46% of his total cash
compensation, an increase of approximately 2% from the prior fiscal year as a
percentage of total cash compensation.
Pension and Profit Sharing Plans
- - --------------------------------
Since 1963 the Company has maintained tax qualified Pension and Profit
Sharing Plans for the benefit of all full time employees, including executive
officers. The Company's present Plans include a Money Purchase Pension Plan
providing for required contributions for participating employees equal to 10% of
their covered compensation, a Profit Sharing Plan providing for discretionary
contributions which will be generally limited to 5% of covered compensation and
a 401(k) Employee Stock Ownership Plan which allows employees to defer up to
6.6% of covered compensation and provides a matching contribution equal to one-
half of the amounts deferred. The Plans serve to provide Company employees with
tax-advantaged retirement savings and to focus the attention of employees on
profits and the effective use of assets.
-12-
<PAGE>
The benefits for the CEO and executive officers under these Plans have been
limited to $30,000 under applicable income tax laws. A limit of $150,000 for
individual covered compensation effective for the Company's current plan year
limits the amount of the Company's contributions to highly compensated
employees' accounts under the Money Purchase Pension Plan and the Profit Sharing
Plan to $22,500 (15% of $150,000). In order to obtain the maximum deferral of
$30,000, such employees are required to defer $5,000 from their salaries under
the Company's 401(k) Plan, matched to the extent of $2,500 by the Company.
Long-Term Stock Options
- - -----------------------
The Company has employed stock options as a means of providing long-term
compensation to its key employees for many years. Options are granted at the
beginning of each fiscal year to executive officers and other employees based
upon the level of management responsibility. Options grants are not generally
based on prior performance or results of operation. The Company's Stock Option
Plan has been established to:
a. Focus attention on corporate strategic business direction; and
b. Increase ownership and retention in the Company's stock, thereby
aligning the interests of the participant employees with those of the Company's
shareholders.
For fiscal year 1997, the Stock Option Committee granted options to
purchase a total of 63,400 shares to all management level employees (38) at
$46.00 per share on September 23, 1996. Based upon his level of responsibility
and position as CEO, Mr. Schleif will receive options to purchase 8,000 shares.
Options granted in September 1995 to Mr. Schleif and executive officers are set
forth in the Stock Option Table included above.
The Committee believes the Company has a unique overall compensation plan
which fulfills current Company philosophy and which historically has been
successful in producing increased shareholder value.
Jack Heckel (Chairman)
Daniel W. Derbes
C. Fredrick Sehnert
Edward J. Walsh
-13-
<PAGE>
STOCK PERFORMANCE GRAPH
-----------------------
The following graph compares the cumulative total shareholder return on the
Company's Common Shares with the cumulative total return of a Peer Group of
consumer product companies and the Standard & Poor's 500 Composite Stock Index
(the "S&P 500 Index") for the five fiscal years ending August 31, 1996. The
comparison assumes $100 invested on August 31, 1991 in the Company's Common
Shares and in each of the indices.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURNS
WD-40 Company, a Peer Group and S&P 500 Index
[STOCK PERFORMANCE GRAPH OMITTED FROM ELECTRONIC FILING]
<TABLE>
<CAPTION>
Year Ended August 31
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
WD-40 Company 100.00 136.38 172.75 156.00 169.93 190.36
Peer Group 100.00 113.33 121.73 131.46 141.55 158.11
S&P Index 100.00 107.93 124.33 131.18 159.29 189.07
</TABLE>
The Peer Group returns are based upon beginning-of-year market
capitalization weighting of the cumulative returns for the following 17 consumer
product companies: Alberto-Culver Co., ArmorAll Products Corp., Church &
Dwight, Inc., Eljer Industries, Inc., First Brands Corp., Kimball International,
Lancaster Colony Corp., La-Z-Boy Chair Co., National Presto Industries, Inc.,
NCH Corp., Oneida Ltd., RPM Inc.-Ohio, Royal Appliance Manufacturing Co., Scotts
Company, Stanhome, Inc., Valspar Corp. and Wynn's International, Inc. One
company, Pratt & Lambert, Inc., has been eliminated from the Peer Group
following its acquisition by Sherwin Williams during the past year.
-14-
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
WD-40 Company shareholders will vote to ratify the selection of Price
Waterhouse LLP as WD-40 Company's independent accountants. A majority of the
votes of the Common Shares present or represented at the meeting is required for
approval. Broker non-votes will be voted in favor of approval. Price
Waterhouse LLP acted as the Company's independent public accountants during the
past fiscal year and will continue to act in such capacity during the current
fiscal year. It is anticipated that a representative of Price Waterhouse LLP
will attend the Annual Meeting of Shareholders, will have an opportunity to make
a statement if he or she desires to do so and will be available to respond to
appropriate questions.
The Company's independent accountants perform audit services (which include
reading filings with the Securities and Exchange Commission as well as quarterly
and annual reports) and tax-related services for the Company. Before audit
services are performed, the Audit Committee approves an estimated fee. The
possible effect on the independence of the accountants is considered by the
Audit Committee. There is no direct or indirect understanding or agreement that
places a limit on current or future years' audit fees.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company not later than July
5, 1997 to be included in the Proxy Statement and form of Proxy for the next
annual meeting.
By Order of the Board of Directors
Harlan F. Harmsen
Secretary
Dated: November 1, 1996
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OR FORMS OF
PROXY IN THE ENCLOSED ENVELOPE.
-15-
<PAGE>
PROXY WD-40 COMPANY PROXY
1061 Cudahy Place
San Diego, CA 92110
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies for such stock, hereby appoints John
S. Barry and Harlan F. Harmsen, and each of them, proxies of the undersigned,
with power of substitution to each, to vote all stock of WD-40 Company which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Carmel Room, Mission Valley Hilton, 901 Camino del Rio
South, San Diego, California 92108, on Tuesday, November 26, 1996 at 2:00 p.m.
and at any adjournments thereof.
Please mark, sign, date and
return the proxy card
promptly using the enclosed
envelope
<PAGE>
WD-40 COMPANY
PLEASE MARK OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
FOR WITHHOLD
all nominees AUTHORITY
1. ELECTING DIRECTORS: listed below to vote for
J.S. Barry, M.L. Crivello, (except as ALL nominees
D.W. Derbes, H.F. Harmsen, marked to the
J.L. Heckel, M.L. Roulette, contrary below)
G.C. Schleif, C.F. Sehnert,
E.J. Walsh
(Instructions: To withhold
authority to vote for any
nominee(s), write that
nominee's name on the space
provided below.)
----------------------------
----------------------------
FOR AGAINST ABSTAIN
2. Ratifying the selection of Price
Waterhouse LLP as the Company's
independent accountants for
fiscal year 1997.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
- - ---
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
DATED: , 1996.
-----------------
Signature:
-----------------------------------------
Signature (if held jointly):
---------------------------------
