<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
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 Section 240.14a-11(c) or Section
240.14a-12
WD-40 COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 1998 Annual Meeting of the Shareholders will be held at San Diego
Museum of Art, Copley Auditorium, Balboa Park, San Diego, California 92101, on
Tuesday, December 15, 1998, 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 PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year 1999; 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 19,
1998 are entitled to vote at the meeting.
By Order of the Board of Directors
Harlan F. Harmsen
Secretary
San Diego, California
November 12, 1998
1
<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 December 15, 1998, and at any
adjournment or adjournments thereof. This Proxy Statement and enclosed form
of Proxy are first sent to shareholders on or about November 12, 1998.
At the meeting, the shareholders of WD-40 Company will vote to elect the
Board of Directors for the ensuing year and to ratify the selection of
PricewaterhouseCoopers LLP as the Company's 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 19, 1998 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 19, 1998, WD-40 Company had
outstanding 15,579,688 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.
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 19, 1998 OF CLASS
- ------------------------------------ ----------------------- --------
<S> <C> <C>
Mario L. Crivello 1,006,080(1) 6.5%
San Diego, California
Margaret L. Roulette 785,323(2) 5.0%
San Diego, California
</TABLE>
1. Mr. Crivello has sole voting and investment power over 896,815 shares
held in trust for the benefit of his mother and remainder beneficiaries.
He also has sole voting and investment power over 14.780 shares held as
custodian for children and 94,485 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 ten 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.
Articles III, Section 2 of the By-Laws of the Company, duly adopted by
its shareholders on November 25, 1997, provides that the authorized number of
Directors of the Company shall be not less than nine nor more than twelve
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. The number of Directors was fixed
at ten upon adoption of Article III, Section 2 of the By-Laws by the
shareholders on November 25, 1997.
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 ten nominees, for the
executive officers named in the Summary Compensation Table on Page 7, and for
all Directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
PRINCIPAL DIRECTOR OWNERSHIP-OCTOBER 19, 1998(1)
NOMINEE AGE OCCUPATION SINCE NUMBER PERCENT OF CLASS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John S. Barry 74 Retired; Former Chief 1970 406,085 2.6%
Executive Officer and Present
Chairman, WD-40 Company
Mario L. Crivello 58 Investor 1994 1,006,080(2) 6.5
Daniel W. Derbes 68 President, Signal Ventures 1984 1,000 *
Harlan F. Harmsen 71 Retired Attorney; 1977 6,400(3) *
Secretary, WD-40 Company
Jack L. Heckel 67 Retired; Former President and 1989 4,080 *
Chief Operating Officer,
GenCorp
Garry O. Ridge 42 President and Chief Executive 1997 24,505(4) *
Officer, WD-40 Company
Margaret L. Roulette 74 Investor 1977 785,323(5) 5.0
Gerald C. Schleif 63 Retired; Former President 1989 55,292 *
and Chief Executive Officer,
WD-40 Company
C. Fredrick Sehnert 67 Retired; Former Chairman 1983 813 *
and Chief Executive Officer,
Laser Precision Corp.
Edward J. Walsh 66 President, The Sparta Group, Ltd. 1988 1,000 *
EXECUTIVE OFFICERS
- ------------------
Michael L. Freeman 45 Vice President Administration, N/A 17,288(6) *
WD-40 Company
Graham P. Milner 44 Senior Vice President, N/A 25,056(7) *
The Americas, WD-40 Company
William B. Noble 40 Managing Director Europe, N/A 16,364(8) *
WD-40 Company Ltd. (U.K.)
All Directors and
Executive Officers
as a Group 2,358,069(9) 15.1
</TABLE>
* Less than one (1) percent.
(1) All shares owned directly unless otherwise indicated.
(2) Mr. Crivello has sole voting and investment power over 896,815 shares
held in trust for the benefit of his mother and remainder beneficiaries.
He also has sole voting and investment power over 14,780 shares held as
custodian for children and 94,485 shares held directly.
(3) Mr. Harmsen has sole voting and investment power over 400 shares held in
trust for others and 6,000 shares held directly.
(4) Mr. Ridge has the right to acquire 16,424 shares upon exercise of stock
options. Mr. Ridge has voting power over 521 shares held under the
Company's Employee Stock Ownership Plan.
(5) Mrs. Roulette has sole voting and investment power over all shares held
in trust for herself and remainder beneficiaries.
(6) Mr. Freeman has the right to acquire 14,338 shares upon exercise of
stock options. Mr. Freeman has voting power over 710 shares held under
the Company's Employee Stock Ownership Plan.
(7) Mr. Milner has the right to acquire 22,958 shares upon exercise of stock
options. Mr. Milner has voting power over 716 shares held under the
Company's Employee Stock Ownership Plan.
(8) Mr. Noble has the right to acquire 16,364 shares upon exercise of stock
options.
(9) Total includes the rights of executive officers to acquire 77,459 shares
upon exercise of stock options and also includes 1,947 shares held under
the Company's Employee Stock Ownership Plan over which individual
executive officers have voting power.
4
<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 Sempra Energy Corporation (and its subsidiaries, San Diego Gas &
Electric Company, Enova Corporation and Southern California Gas Co.) 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.
Garry O. Ridge joined WD-40 Company in 1987 as Managing Director, WD-40
Company (Australia) Pty. Ltd. Mr. Ridge was responsible for company
operations throughout the Asia Pacific region. Mr. Ridge transferred to the
corporate office in September 1994 as Director-International Operations and
was elected Vice President-International in June 1995. He was elected to the
position of Executive Vice President/Chief Operating Officer in December
1996, was named President and Chief Executive Officer as of October 1, 1997,
and was elected to the Board of Directors on November 25, 1997. Prior to
joining WD-40 Company Mr. Ridge was Managing Director of Mermax Pacific Pty.
Ltd. and held a number of senior management positions with Hawker Pacific
Pty. Ltd. (a Hawker Siddeley PLC Group Company) which was the licensee for
WD-40.
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 served as Chief Executive Officer from 1992 and as Company President
from 1990 through September 1997. 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.
5
<PAGE>
RELATED PARTY TRANSACTION
The Company's Director of Operations 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 1998, Randall Barry received total cash compensation in the
amount of $95,180 and employer contributions to the Company's Pension and
Profit Sharing Plans were allocable to his account in the amount of $17,446.
COMPENSATION, COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1998, outside directors received $10,000 as an annual fee
and $1,000 for each Board meeting attended. On September 29, 1998, the Board
of Directors adopted new policies for the compensation of outside directors
to be effective January 1, 1999. Each outside director will receive an
annual fee of $15,000, payable in quarterly installments. The Board also
adopted a policy to provide for the issuance of 250 shares annually of
restricted common stock of the Company to each non-employee member of the
Board of Directors in lieu of $5,000 of cash compensation. The issuance of
shares in lieu of cash compensation is intended to be mandatory for any
director who does not hold shares of the Company having a fair market value
of at least $50,000 and optional for all other directors. The shares would
not become vested for resale for a period of five years except in the event
of death or retirement from the Board. The number of shares to be issued will
be reviewed annually to account for changes in the price of the shares on the
open market. The Board of Directors will adopt a formal Restricted Stock
Plan for Non-Employee Directors prior to the issuance of any shares pursuant
to this policy.
There were five scheduled meetings of the Board of Directors during the
last fiscal year. All directors attended 100 percent of the meetings of the
Board and of all committees on which each 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 Edward J. Walsh (Chairman), Jack L.
Heckel and C. Fredrick Sehnert. 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
Daniel W. Derbes (Chairman), Jack L. Heckel, 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
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 except that
Michael L. Freeman, Vice President, Administration, filed one late report.
One transaction was not reported on a timely basis by Mr. Freeman. On
February 9, 1998 Mr. Freeman filed an amended report on Form 4 for the month
of October, 1997 to report the exercise of stock options in addition to the
stock options that had been reported on a timely basis.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table shows information for the three (3) fiscal years
ended August 31, 1998 concerning the Company's Chief Executive Officers and
each of the highest paid executive officers whose annual salary and bonus
compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM ALL OTHER
FISCAL YEAR ANNUAL COMPENSATION COMPENSATION AWARDS(2) COMPENSATION(3)
NAME AND PRINCIPAL POSITION ENDED AUG. 31 SALARY ($) BONUS ($) STOCK OPTIONS(#) ($)
- --------------------------- ------------- -------------------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
Gerald C. Schleif(4) 1998 $ 35,000 $ 60,000(5) -0- $ 50,500(6)
Chief Executive Officer 1997 265,000 195,000 16,000 25,000
1996 250,000 215,000 16,000 29,000
Garry O. Ridge 1998 $255,000 $150,000 16,000 $ 26,000(7)
Chief Executive Officer 1997 145,000 50,000 7,000 25,000
1996 120,000 71,000 7,000 25,000
Graham P. Milner 1998 $140,000 $ 55,000 6,000 $ 26,000(7)
Senior Vice President, 1997 125,000 40,000 5,000 25,000
The Americas 1996 109,000 52,000 5,000 25,000
Michael L. Freeman 1998 $135,000 $ 55,000 6,000 $ 26,000(7)
Vice President, 1997 105,000 30,000 5,000 23,500
Administration 1996 95,000 32,000 5,000 22,700
William B. Noble(8) 1998 $154,500 $ 57,900 6,000 $ -0-
Managing Director, Europe 1997 126,900 36,700 6,000 -0-
WD-40 Company Ltd. (U.K.) 1996 86,600 38,100 5,000 -0-
</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 historical option grant information has been adjusted to account for
the 2 for 1 stock split on July 11, 1997.
(3) All Other Compensation includes employer contributions to the Company's
Money Purchase Pension Plan, Profit Sharing Plan and 401(k) Employee
Stock Ownership Plan
(4) Mr. Schleif served as Chief Executive Officer until September 30, 1997.
His employment terminated on October 17, 1997.
(5) Amount received by Mr. Schleif in December 1997 as a severance bonus
following his retirement.
(6) Includes directors fees of $11,500 and Supplemental Retirement Plan
payments of $39,000.
(7) Includes $24,000 in contributions to the Company's Money Purchase Pension
Plan and Profit Sharing Plan and $2,000 in matching contributions to the
Company's 401(k) Employee Stock Ownership Plan.
(8) Mr. Noble was employed by the Company in Malaysia during the year ended
August 31, 1996 and by the Company's U.K. subsidiary in 1997 and 1998.
Compensation amounts have been converted from local currencies at average
annual exchange rates for each year.
7
<PAGE>
STOCK OPTIONS
The following table sets forth stock options granted pursuant to the
Restated WD-40 Company 1990 Incentive Stock Option Plan during the last
fiscal year to each of the Company's executive officers named in the Summary
Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR (1998)
<TABLE>
<CAPTION>
PERCENT OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE
GRANTED TO EMPLOYEES IN PRICE EXPIRATION GRANT DATE
NAME (#) FISCAL YEAR 1998 ($/SH) DATE VALUE(1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gerald C. Schleif -0- 0.0% n/a n/a n/a
Garry O. Ridge 16,000(2) 10.8% $ 31.75 9/22/2007 $ 54,576
Graham P. Milner 6,000(3) 4.1 $ 31.75 9/22/2007 $ 20,466
Michael L. Freeman 6,000(4) 4.1 $ 31.75 9/22/2007 $ 20,466
William B. Noble 6,000(5) 4.1 $ 31.75 9/22/2007 $ 20,466
</TABLE>
(1) The Grant Date Value of $3.411 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 5.40%, (ii) expected
volatility of .189; (iii) a ten-year risk-free rate of return of 4.03%;
and (iv) exercise ten years from the grant date.
(2) Mr. Ridge's incentive stock options are exercisable as to 2,222 shares on
January 1, 2000, as to 3,149 shares on January 1, 2001, as to 3,149 shares
on January 1, 2002, as to 3,149 shares on January 1, 2003, as to 3,149
shares on January 1, 2004 and as to 1,182 shares on January 1, 2005.
(3) Mr. Milner's incentive stock options are exercisable as to 2,290 shares
on September 22, 1998, as to 3,149 shares on January 1, 1999 and as to
561 shares on January 1, 2000.
(4) Mr. Freeman's incentive stock options are exercisable as to 2,488 shares
on September 22, 1998, as to 3,149 shares on January 1, 1999, and as to
363 shares on January 1, 2000.
(5) Mr. Noble's incentive stock options are exercisable as to 1,764 shares
on September 22, 1998, as to 3,149 shares on January 1, 1999, and as to
1,087 shares on January 1, 2000.
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 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 Incentive Stock Option Plan restricts the
exercise of options with previously owned stock to shares held for a minimum
of six months.
8
<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, 1998 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(1)
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
VALUE AT AUGUST 31, 1998(#) AT AUGUST 31, 1998($)(2)
SHARES ACQUIRED REALIZED -------------------------- --------------------------
NAME ON EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald C. Schleif 52,504 $379,891 -0- -0- n/a n/a
Garry O. Ridge -0- -0- 16,424 21,626 $ -0- $ -0-
Graham P. Milner 500 3,813 20,668 6,000 1,701 -0-
Michael L. Freeman 750 6,128 11,850 6,000 -0- -0-
William B. Noble -0- -0- 14,600 6,000 -0- -0-
</TABLE>
(1) All historical option grant information has been adjusted to account for
the 2 for 1 stock split on July 11, 1997.
(2) The value of Unexercised In-the-Money Options at August 31, 1998 was
determined based on the difference between the exercise price for such
options and the closing price of $20.75 for the Company's shares as
reported by The Nasdaq Stock Market.
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. No death benefit is
payable if Retirement Benefits become due upon the employee's retirement
under the Retirement Benefit Plan agreement.
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 witholding 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. Outside directors do not participate in the
plans.
Based upon current (1999) 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. Mr. Noble
does not have a Supplemental Death Benefit Plan since he is entitled to
similar benefits under the laws of the United Kingdom. The benefits shown for
Mr. Schleif are in accordance with arrangements approved by the Board of
Directors relating to his retirement in 1997. Such arrangement is described
below under Retirement Arrangements. 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 n/a $52,000 n/a
Garry O. Ridge $275,000 68,750 65
Graham P. Milner 149,100 37,275 65
Michael L. Freeman 143,800 35,950 65
William B. Noble -0- 42,060 65
</TABLE>
9
<PAGE>
RETIREMENT ARRANGEMENTS
The Board of Directors approved certain financial arrangements for
Gerald C. Schleif in connection with his retirement in 1997. Mr. Schleif
received a severance bonus of $60,000 and a retirement benefit in lieu of the
benefit that otherwise would have been payable to him pursuant to his
Supplemental Retirement Benefit Plan described above had he been age 65 at
retirement. His retirement benefit provides for payment of $52,000 per year
for a period of fifteen years commencing January 1, 1998, payable in
quarterly installments. He also received title to his company-owned
automobile and continued medical, dental and vision insurance coverage is
being provided for him and his spouse to age 65.
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 Daniel W. Derbes (Chairman), Jack
L. Heckel, 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
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. Ridge's base salary for fiscal year 1998 was $255,000.
For fiscal year 1999 Mr. Ridge will receive a base salary of $275,000, an
increase of 7.8%.
10
<PAGE>
PERFORMANCE INCENTIVE
The Performance Incentive is that 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.
Ridge's Performance Incentive compensation for fiscal year 1998 was 38% of
his 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.
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. Option 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 1999, the Stock Option Committee granted options to
purchase a total of 175,600 shares to company employees (56) at $23.06 per
share on September 29, 1998. In 1997 the Board of Directors significantly
increased the number of employees participating in the Stock Option Plan.
This increase is due to increased employment as well as a decision to broaden
the scope of the Plan to include lower level management employees. The Board
of Directors believes that wider participation will further enhance employee
productivity, loyalty and commitment as well as provide more employees with
an opportunity to benefit from increasing share values.
Mr. Ridge received options to purchase 16,000 shares on September 29,
1998. Options granted in September 1997 to Mr. Ridge 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.
Daniel W. Derbes (Chairman)
Jack L. Heckel
C. Fredrick Sehnert
Edward J. Walsh
11
<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, 1998.
The comparison assumes $100 was invested on August 31, 1993 in the Company's
Common Shares and in each of the indices.
<TABLE>
<CAPTION>
Year Ended August 31
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
WD-40 Company 100.00 90.31 98.37 110.20 139.95 111.96
Peer Group 100.00 106.99 117.16 131.16 179.09 162.54
S&P 500 Index 100.00 105.49 128.07 152.06 213.81 231.14
</TABLE>
The Peer Group returns are based upon beginning-of-year market
capitalization weighting of the cumulative returns for the following 15
consumer product companies: Alberto-Culver Co., Church & Dwight, Inc., Enesco
Group, Inc. (formerly Stanhome, 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, Valspar Corp. and Wynn's International,
Inc.
12
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
WD-40 Company shareholders will vote to ratify the selection of
PricewaterhouseCoopers 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. PricewaterhouseCoopers LLP acted as the Company's independent
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 PricewaterhouseCoopers 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), tax-related services, and certain corporate
finance-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 15, 1999 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 12, 1998
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.
13
<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 Copley Auditorium, San Diego
Museum of Art, Balboa Park, San Diego, California, on Tuesday, December 15,
1998 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 VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. ELECTION OF DIRECTORS: NOMINEES:
01-J.S. Barry, 02-M.L. Crivello, 03-D.W. Derbes, 04-H.F. Harmsen,
05-J.L. Heckel, 06-G.O. Ridge, 07-M.L. Roulette, 08-G.C. Schleif,
09-C.F. Sehnert, 10-E.J. Walsh
(INSTRUCTIONS: To withhold authority to vote for any nominee(s),
write that nominee's name on the space provided below.)
--------------------------------------------------------------------------
/ / For All / / Withhold for All / / For All Except
2. Ratifying the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for fiscal year 1999.
/ / For / / Against / / Abstain
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Dated: , 1998
-------------------------------
Signature:
-------------------------------------
Title:
-------------------------------------
Important: Please sign exactly as name appears on this proxy. When signing as
attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
Control Number
- -------------------------
VOTE BY TELEPHONE
Call - Toll Free - On a Touch Tone Telephone
1-800-678-5291 - ANYTIME
There is NO CHARGE for this call
Your telephone vote authorizes the named proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card, and gives
them discretion to vote on such other matters as may properly come before the
meeting.
You will be asked to enter a Control Number which is located in the box on
the left side of this form. IF YOU ENTER YOUR CONTROL NUMBER, BUT DO NOT MAKE
A CHOICE ON ANY ITEM, YOUR SHARES WILL BE VOTED FOR ITEM 1 AND ITEM 2.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS: PRESS 1
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH ITEM SEPARATELY, PRESS 0. YOU WILL
HEAR THESE INSTRUCTIONS:
ITEM 1: To vote FOR ALL nominees, press 1;
to WITHHOLD FOR ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee,
Press 0 and listen to the instructions
ITEM 2: To vote FOR, press 1; AGAINST, press 9: ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
If you vote by telephone, DO NOT mail back your proxy.
THANK YOU FOR VOTING.
