<PAGE> 1
SCHEDULE 14A INFORMATION*
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement (fee paid with Preliminary Materials)
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WYNN'S INTERNATIONAL, INC.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
WYNN'S INTERNATIONAL, INC.
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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 transactions applies:
- - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- - - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - - --------------------------------------------------------------------------------
/ / 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:
- - - --------------------------------------------------------------------------------
- - - ---------------
* The shares of Common Stock issuable under the Wynn's International, Inc.
Employee Stock Purchase Plan and the Wynn's International, Inc.
Non-Employee Directors' Stock Option Plan will be registered pursuant to
registration statements on Form S-8 to be filed prior to the issuance of
such shares.
<PAGE> 2
WYNN'S INTERNATIONAL, INC.
500 NORTH STATE COLLEGE BOULEVARD, SUITE 700
ORANGE, CALIFORNIA 92668
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 11, 1994
The Annual Meeting of Stockholders of Wynn's International, Inc., a
Delaware corporation (the "Company"), will be held at the Doubletree Hotel, 100
The City Drive, Orange, California, on May 11, 1994, at 10:00 A.M., local time,
to consider and vote on the following matters described in the attached Proxy
Statement:
1. >The election of three directors for three-year terms ending in 1997;
2. The approval of an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the
Company's Common Stock from 10,000,000 to 20,000,000;
3. The approval of the Wynn's International, Inc. Employee Stock Purchase
Plan;
4. The approval of the Wynn's International, Inc. Non-Employee Directors'
Stock Option Plan;
5. The approval of Ernst & Young as independent auditors of the Company for
the fiscal year ending December 31, 1994; and
6. The transaction of such other business as may properly come before the
meeting, or any adjournments thereof.
The Board of Directors has fixed March 14, 1994 as the record date for the
meeting, and only holders of Common Stock of record at the close of business on
that date are entitled to receive notice of and vote at the meeting. Each
stockholder is requested to execute the enclosed proxy card and to return it
without delay in the enclosed postage-paid envelope. Any stockholder attending
the meeting may withdraw his or her proxy and vote personally on each matter
brought before the meeting.
By Order of the Board of Directors
Gregg M. Gibbons
Secretary
Orange, California
March 25, 1994
<PAGE> 3
WYNN'S INTERNATIONAL, INC.
---------------------
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Wynn's International,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of proxies to be voted at the Annual
Meeting of Stockholders to be held on May 11, 1994, at 10:00 A.M., local time,
and at any and all adjournments thereof. The executive offices of the Company
are located at 500 North State College Boulevard, Suite 700, Orange, California
92668. This Proxy Statement and accompanying proxy are first being mailed to
stockholders on or about March 25, 1994.
PROXY PROCEDURES
The three persons named in the enclosed proxy have been selected by the
Board of Directors to vote shares represented by valid proxies. These
individuals have indicated that, unless otherwise specified in the proxy, they
intend to vote (i) to elect as directors the nominees listed below, (ii) to
approve an amendment to the Company's Certificate of Incorporation to increase
the number of authorized shares of the Company's Common Stock from 10,000,000 to
20,000,000, (iii) to approve the Wynn's International, Inc. Employee Stock
Purchase Plan, (iv) to approve the Wynn's International, Inc. Non-Employee
Directors' Stock Option Plan, and (v) to approve Ernst & Young as independent
auditors of the Company for the fiscal year ending December 31, 1994. The
Company has no knowledge of any other matters to be presented at the meeting
except the report of officers on which no action is proposed to be taken. In the
event other matters do properly come before the meeting, the persons named in
the proxy will vote on such matters in accordance with their judgment.
Any person executing a proxy may revoke it at any time prior to its
exercise by filing with the Secretary of the Company a written revocation of the
proxy or a duly executed proxy bearing a later date. The powers of the proxy
holders also will be suspended in the event the person executing the proxy is
present at the meeting, or any adjournment thereof, and elects to vote in
person.
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, some of the Company's directors, officers and
regular employees, without extra remuneration, may conduct additional
solicitation by telephone and personal interview.
The 1993 Annual Report to Stockholders, which includes financial statements
for the year ended December 31, 1993, accompanies this Proxy Statement. The
Annual Report does not constitute a part of the proxy materials.
As of the close of business on March 14, 1994, there were 5,548,117
outstanding shares of Common Stock. The Company has only one class of equity
securities outstanding. Each share of Common Stock is entitled to one vote. The
Board of Directors has set the close of business on March 14, 1994 as the record
date for determining those stockholders entitled to vote at the Annual Meeting.
In September 1993, the Company effected a three-for-two stock split. All
references herein to numbers of shares of Common Stock reflect such stock split.
Votes cast by proxy or in person at the Annual Meeting will be counted by
the person appointed by the Company to act as the Inspector of Elections for the
meeting. The Inspector of Elections will treat shares represented by proxies
that reflect abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum and for purposes of determining
the outcome of any matter submitted
<PAGE> 4
to the stockholders for a vote. Abstentions, however, do not constitute a vote
"for" or "against" any matter and thus will be disregarded in the calculation of
a plurality or of "votes cast."
The Inspector of Elections will treat shares referred to as "broker
non-votes" (i.e., shares held by brokers or nominees over which the broker or
nominee lacks discretionary power to vote and for which the broker or nominee
has not received specific voting instructions from the beneficial owner) as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of any
matter as to which the broker or nominee has physically indicated on the proxy
that it does not have discretionary authority to vote, those shares will be
treated as not present and not entitled to vote with respect to that matter
(even though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other matters).
Any unmarked proxies, including those submitted by brokers or nominees,
will be voted as indicated in the accompanying proxy card.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 14, 1994 as to
shares of the Company's Common Stock held by persons known to the Company to be
the beneficial owners of more than 5% of the Company's Common Stock based upon
information received from such persons:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED(1)
------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Mario J. Gabelli........................... 1,319,709(2) 23.8
One Corporate Center
Rye, New York 10580
Wynn Foundation............................ 492,779 8.9
Post Office Box 14143
Orange, California 92613
Shufro, Rose & Ehrman...................... 446,327(3) 8.0
745 Fifth Avenue
New York, New York 10151
Dimensional Fund Advisors Inc.............. 394,125(4) 7.1
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
James Carroll.............................. 397,350(5) 7.0
P.O. Box 14143
Orange, California 92613
Metropolitan Life Insurance Company........ 426,135(6) 7.1
One Madison Avenue
New York, New York 10010
</TABLE>
- - - ---------------
(1) Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of March 14, 1994 are
deemed outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by any person holding such
securities but are not deemed outstanding for the purpose of computing the
percentage of the class owned by any other person.
(2) Mr. Gabelli has reported that these shares are owned by various entities
engaged primarily in providing investment advisory services for their
clients, that Mr. Gabelli directly or indirectly controls and acts as chief
investment officer for such entities, and that he or they have sole voting
power with respect to 1,238,109 shares, sole disposition power with respect
to 1,299,359 shares and shared voting and disposition power with respect to
20,350 shares. Except for 43,500 shares owned by Gabelli Performance
Partnership and 600 shares owned by Mr. Gabelli personally, Mr. Gabelli
disclaims any economic interest in the above reported shares.
2
<PAGE> 5
(3) Shufro, Rose & Ehrman has sole voting power with respect to 58,300 shares
only. It has sole disposition power with respect to all 446,327 shares.
(4) Dimensional Fund Advisors Inc. ("Dimensional") has reported that it is a
registered investment advisor and was deemed to have beneficial ownership
of 394,125 shares as of December 31, 1993, all of which shares were held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of The DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans.
Dimensional serves as investment manager for each such entity. Dimensional
disclaims beneficial ownership of all such shares. Dimensional has sole
disposition power with respect to all 394,125 shares and sole voting power
with respect to 272,100 shares, and it or certain of its officers have
shared voting power with respect to 122,025 shares.
(5) Includes 159,900 shares purchasable within 60 days of March 14, 1994 upon
the exercise of stock options. Excludes 22,040 shares owned by members of
Mr. Carroll's family, as to which shares Mr. Carroll disclaims beneficial
ownership.
(6) Metropolitan Life Insurance Company ("Metropolitan") is the registered
holder of the Company's 9% Convertible Subordinated Note due March 6, 1996
in the principal amount of $6,250,000 (the "Convertible Note"). Pursuant to
the terms of the Convertible Note, the holder may convert all or a portion
of the principal amount of the Convertible Note into shares of Common Stock
of the Company at $14.67 per share at any time prior to the maturity date
of the Convertible Note. During 1993, Metropolitan converted a portion of
the Convertible Note into 51,134 shares of Common Stock. In February 1994,
Metropolitan converted a portion of the Convertible Note into 17,045 shares
of Common Stock. If the remaining $6,250,000 principal amount of the
Convertible Note is fully converted, the holder would receive 426,135
shares of Common Stock of the Company.
The following table sets forth information as of March 14, 1994 with
respect to shares of the Company's Common Stock owned by each director of the
Company, by each executive officer listed in the Summary Compensation Table and
by all directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES PERCENTAGE OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(2)
---------------------------------------- --------------------- ---------------------
<S> <C> <C>
James Carroll........................... 397,350(3) 7.0
Barton Beek............................. 1,500 *
Wesley E. Bellwood...................... 7,750(4) *
John D. Borie........................... 3,000(4) *
Bryan L. Herrmann....................... 1,000 *
Robert H. Hood, Jr...................... 1,000 *
Richard L. Nelson....................... 1,000 *
James D. Woods.......................... 1,500 *
Gregg M. Gibbons........................ 47,887(5) *
Seymour A. Schlosser.................... 32,700(6) *
All directors and executive officers
as a group (10 persons)............... 494,687(7) 8.6
</TABLE>
- - - ---------------
* Less than one percent.
(1) Subject to applicable community property and similar statutes, the persons
listed as beneficial owners of the shares have sole voting and investment
power with respect to such shares.
(2) Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of March 14, 1994 are
deemed outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by any person holding such
securities but are not deemed outstanding for the purpose of computing the
percentage of the class owned by any other person.
3
<PAGE> 6
(3) Includes 159,900 shares purchasable within 60 days of March 14, 1994 upon
the exercise of stock options. Excludes 22,040 shares owned by members of
Mr. Carroll's family, as to which shares Mr. Carroll disclaims beneficial
ownership.
(4) Excludes 492,779 shares owned by the Wynn Foundation, of which Mr. Bellwood
and Mr. Borie are Trustees. See the table on page 2.
(5) Includes 34,200 shares purchasable within 60 days of March 14, 1994 upon the
exercise of stock options.
(6) Includes 30,450 shares purchasable within 60 days of March 14, 1994 upon the
exercise of stock options.
(7) Includes 224,550 shares purchasable within 60 days of March 14, 1994 upon
the exercise of stock options.
ELECTION OF DIRECTORS
The Company's Board of Directors consists of that number of directors as
may be determined by the Board of Directors. Currently there are eight
directors. The Board of Directors is divided into three classes, two of the
classes having three directors and the other class having two directors, and
only one class being elected each year. In 1994, three directors are to be
elected for a term of three years or until the election and qualification of
their respective successors. For the purpose of electing directors, each
stockholder is entitled to one vote per share for each of the three directors to
be elected. The candidates receiving the highest number of votes will be
elected.
The nominees for election are: Wesley E. Bellwood, John D. Borie and James
D. Woods. Each nominee is presently a member of the Company's Board of
Directors. Each nominee was elected to his present term of office at a prior
annual meeting of stockholders of the Company.
Each of the nominees has consented to be named as a nominee in this Proxy
Statement and has indicated that he is willing and able to serve as a director
if elected. If any nominee named herein becomes unavailable for any reason, the
persons named in the proxy will vote for the election of such other person as
the Board of Directors may propose to replace such nominee.
The information set forth below as to each nominee has been furnished by
the nominee.
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE DURING PAST DIRECTOR
NAME AGE FIVE YEARS AND CERTAIN OTHER DIRECTORSHIPS SINCE
- - - -------------------- --- ----------------------------------------------- --------
<S> <C> <C> <C>
Wesley E. Bellwood 70 Chairman of the Board of the Company (April 1955
1984-present); Chairman of the Board and Chief
Executive Officer of the Company (February
1982-April 1984); President and Chief Executive
Officer of the Company (1973-1982); a director
of Source Capital, Inc.; a Director and member
of the Executive Committee and member of the
Audit Committee.
John D. Borie 68 Vice President -- Corporate Affairs and General 1982
Counsel of the Company (1973-1986); a Director
and member of the Executive Committee and
member of the Compensation Committee.
James D. Woods 62 Chairman of the Board, President and Chief 1990
Executive Officer of Baker Hughes Incorporated
(1987-present) (oil field services and process
technologies); director of the Petroleum
Equipment Suppliers Association, National Ocean
Industries Association, Carter Hawley Hale
Stores, Inc. and Varco International, Inc.;
member of the National Petroleum Council; a
Director and member of the Compensation
Committee.
</TABLE>
4
<PAGE> 7
Set forth below is information concerning each of the other five directors
of the Company whose three-year terms of office will continue after the 1994
Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE DURING PAST DIRECTOR
NAME AGE FIVE YEARS AND CERTAIN OTHER DIRECTORSHIPS SINCE
- - - -------------------- --- ----------------------------------------------- --------
<S> <C> <C> <C>
Barton Beek 70 Of Counsel, O'Melveny & Myers (February 1994- 1993
present) (law firm); Partner, O'Melveny & Myers
(1962-January 1994); a director of JMC Group,
Inc.; a Director and Chairman of the Audit
Committee.
James Carroll 64 President and Chief Executive Officer of the 1988
Company (1988-present); a Director and Chairman
of the Executive Committee.
Bryan L. Herrmann 58 Chairman and Chief Executive Officer, Spaulding 1975
Composites Company (1992-present) (industrial
composite materials); General Partner, MOKG
1984 Investment Partners Ltd. (1984-present)
(investment banking); Chairman, Base Camp 9
Corp. (1990-present) (recreational equipment);
President, Morgan, Olmstead, Kennedy & Gardner
Capital Corporation (1979-1988) (investment
banking); a Director and Chairman of the
Compensation Committee.
Robert H. Hood, Jr. 61 President, Douglas Aircraft Company 1993
(1989-present) (aircraft manufacturing);
President, McDonnell Douglas Missile Systems,
Inc. (1988-1989) (defense contractor).
Richard L. Nelson 64 Independent business consultant (1983-present); 1994
Partner, Ernst & Young (1969-1983); a Director
and member of the Audit Committee.
</TABLE>
OTHER INFORMATION
Since March 1992, Mr. Herrmann has served as Chief Executive Officer of
Spaulding Composites Company. In February 1993, Spaulding Composites Company
commenced a voluntary Chapter 11 bankruptcy proceeding.
5
<PAGE> 8
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
COMPENSATION OF DIRECTORS
During 1993, the Company compensated each director, except Mr. Bellwood and
Mr. Carroll, for his services by payment of a quarterly retainer of $2,500, a
fee of $2,000 for each Board of Directors meeting attended, and a fee of $1,000
for attending each meeting of the Audit or Compensation Committee on which he
served. Commencing January 1, 1994, the quarterly retainer will be $3,000. Mr.
Bellwood received a monthly retainer fee of $5,833 for his continuing services
as Chairman of the Board, a fee of $2,000 for each Board meeting attended, and a
fee of $1,000 for each Audit Committee meeting attended. Commencing January 1,
1994, Mr. Bellwood's monthly retainer fee will be $6,000. During 1993, Mr.
Bellwood was reimbursed for automotive-related expenses of $967, supplemental
medical expenses of $2,096 and tax preparation charges of $5,525, and continued
to participate in the Company's group health plans. Directors who are employees
of the Company are not paid any fees or additional remuneration for serving as a
member of the Board or any of its Committees and therefore Mr. Carroll did not
receive any such fees or remuneration during 1993. During 1993, Mr. Borie and
Mr. Herrmann were each paid a consulting fee of $1,000 for Compensation
Committee-related matters, and Mr. Borie was paid an additional consulting fee
of $1,000 for Executive Committee-related matters.
COMMITTEES OF THE BOARD
The Company has an Audit Committee consisting of the following members of
the Board of Directors: Barton Beek, Wesley E. Bellwood and Richard L. Nelson.
Mr. Nelson became a member of the Audit Committee in February 1994. The Audit
Committee has responsibility for consulting with the Company's officers
regarding the appointment of independent public accountants as auditors of the
Company, discussing the scope of the auditors' examination and reviewing the
annual financial statements and accounting policies of the Company. The Audit
Committee met two times during 1993.
The Company has an Executive Committee consisting of the following members
of the Board of Directors: James Carroll, Wesley E. Bellwood and John D. Borie.
The Executive Committee has all the power and authority of the Board of
Directors, except the power and authority to: (i) amend the Certificate of
Incorporation or Bylaws of the Company; (ii) adopt an agreement of merger or
consolidation or to recommend to stockholders the sale, lease or exchange of all
or substantially all of the Company's property and assets; (iii) recommend to
stockholders a dissolution of the Company or a revocation of the dissolution;
and (iv) declare a dividend or authorize the issuance of stock of the Company
unless expressly authorized by a resolution of the Board of Directors. The
Executive Committee met once during 1993. The Company does not have a Nominating
Committee. The Board of Directors normally designates Committee members at the
organizational meeting of the Board following the Annual Meeting of
Stockholders.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has a Compensation Committee consisting of the following
members of the Board of Directors: Bryan L. Herrmann, John D. Borie and James D.
Woods. Wesley E. Bellwood served on the Compensation Committee from January 1,
1993 until the May 12, 1993 meeting of the Board of Directors, at which meeting
members of the Compensation Committee customarily are appointed to serve for the
ensuing year. At such meeting, Mr. Herrmann was appointed to succeed Mr.
Bellwood on the Compensation Committee. Mr. Bellwood and Mr. Borie are former
officers of the Company. The Compensation Committee has responsibility for
recommending the cash compensation of the officers of the Company and the
granting of stock options, stock appreciation rights, restricted stock awards
and performance share awards to eligible employees of the Company. The
Compensation Committee met two times during 1993.
6
<PAGE> 9
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During 1993, the Board of Directors met four times. No director attended
fewer than 75% of the aggregate number of meetings held by the Board of
Directors and the Committees of the Board of Directors on which he served.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
AWARDS
--------------------------
RESTRICTED
ANNUAL COMPENSATION STOCK SECURITIES ALL OTHER
NAME AND ---------------------------- AWARD(S) UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($)(A) BONUS ($)(A) ($)(B) OPTIONS (#) ($)
- - - ---------------------------------------- ---- ------------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James Carroll........................... 1993 $ 410,000 $244,707 $1,221,900(C) 12,000 $ 5,433(D)
President and 1992 $ 355,000 $200,536 -0- -0- $ 18,000(E)
Chief Executive Officer 1991 $ 335,000 -0- -0- -0- $ 14,000(E)
Gregg M. Gibbons........................ 1993 $ 170,000 $101,463 -0- 6,000 $ 4,346(D)
Vice President -- Corporate Affairs, 1992 $ 155,000 $ 87,558 $ 29,610 -0- $ 2,327(D)
General Counsel and Secretary 1991 $ 145,000 -0- -0- 7,500 $ 2,178(D)
Seymour A. Schlosser.................... 1993 $ 170,000 $101,463 -0- 6,000 $ 4,346(D)
Vice President -- Finance 1992 $ 155,000 $ 87,558 $ 29,610 -0- $ 2,327(D)
and Chief Financial Officer 1991 $ 145,000 -0- -0- 7,500 $ 2,178(D)
</TABLE>
- - - ---------------
(A) Amounts shown include cash compensation earned and received or deferred by
executive officers. All other annual compensation did not exceed the lesser
of $50,000 or 10% of the total salary and bonus reported for the named
executive officer.
(B) As of December 31, 1993, the Company had granted to executive officers an
aggregate of 64,500 shares of restricted stock with an aggregate value of
$1,177,125 (including 60,000 shares with a value of $1,095,000 granted to
Mr. Carroll and 2,250 shares with a value of $41,063 granted to each of
Messrs. Gibbons and Schlosser), based on the closing price of the Company's
Common Stock on that date of $18.25. Regular dividends are payable on such
restricted stock. As of December 31, 1993, the 4,500 shares of restricted
stock held by Messrs. Gibbons and Schlosser had vested and were no longer
subject to a substantial risk of forfeiture. Such shares vested one year
after the date they were awarded.
(C) On December 13, 1993, Mr. Carroll was granted a restricted stock award of
60,000 shares at a cost to Mr. Carroll of $0.01 per share. The closing
price of the Company's Common Stock on that date was $20.375. Such shares
will vest in equal annual installments over a three-year period.
(D) Represents amounts contributed to the Company's Employees Savings and
Investment Plan (which was terminated in June 1993) and the Company's
401(k) Plan, each a qualified defined contribution plan, for the accounts
of the named executive officers.
(E) Represents director's fees paid to Mr. Carroll for the years 1991 and 1992.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED ANNUAL
SECURITIES PERCENT OF RATES OF STOCK PRICE
UNDERLYING TOTAL OPTIONS EXERCISE APPRECIATION FOR OPTION
OPTIONS GRANTED TO OR BASE TERM
GRANTED EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME (#)(A,B) FISCAL YEAR ($/SH)(C) DATE 5% ($) 10% ($)
- - - ----------------------------- --------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James Carroll................ 12,000 17.6% $20.67 2/9/2003 $ 155,991 $ 395,312
Gregg M. Gibbons............. 6,000 8.8% $20.67 2/9/2003 $ 77,996 $ 197,656
Seymour A. Schlosser......... 6,000 8.8% $20.67 2/9/2003 $ 77,996 $ 197,656
</TABLE>
- - - ---------------
(A) No stock appreciation rights have been granted or are presently outstanding.
Options granted in 1993 are exercisable starting 12 months after the grant
date, with 70% of the shares covered thereby becoming exercisable at that
time and with an additional 10% of the options shares becoming exercisable
on each successive anniversary date, with full vesting occurring on the
fourth anniversary date. Acceleration of the exercisability of the options
may occur under certain circumstances, including a change in control of the
Company. The options were granted with an exercise price of 100% of the
fair market value of the Company's Common Stock on the date of grant. The
options were granted for a term of 10 years, subject to earlier termination
in certain events related to termination of employment.
(B) Under the terms of the Company's Stock-Based Incentive Award Plan, the
Compensation Committee retains discretion, subject to plan limits, to
modify the terms of outstanding options and to reprice the options.
(C) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares or by offset of the underlying
shares, subject to certain conditions.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
No stock options were exercised by any executive officer in 1993.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END AT FY-END
(#) ($)(A)
-------------- ---------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
----------------------------------------------------- -------------- ---------------
<S> <C> <C>
James Carroll........................................ 151,500/18,000 $943,455/38,520
Gregg M. Gibbons..................................... 29,250/8,250 $143,805/13,680
Seymour A. Schlosser................................. 25,725/8,025 $ 64,683/12,537
</TABLE>
- - - ---------------
(A) Market value of the underlying securities at year end minus the exercise
price of "in-the-money" options.
DEFINED BENEFIT PLANS
The Company's Retirement Plan, in which most employees of the Company and
three of its domestic subsidiaries are eligible to participate, is a compulsory
noncontributory defined benefit pension plan. Employees generally become
eligible for the Retirement Plan after one year of service, and their interests
generally vest after five years of service. Benefits under the Retirement Plan
are based upon the employees' earnings and length of service with the Company.
Effective January 1, 1989, the Retirement Plan was amended to modify the benefit
formula and to comply with changes to applicable laws and regulations. For each
credited year of service after 1988, a participant will receive an annual
benefit upon normal retirement at
8
<PAGE> 11
age 65 equal to 1.15% of his or her salary up to $10,000 and 1.80% of his or her
salary in excess of $10,000 up to maximum includable compensation. A vested
participant receives an annual benefit of 1% of his or her salary below the
social security wage base and 2% of his or her salary in excess of the social
security wage base for each credited year of service under the Retirement Plan
between January 1, 1978 and December 31, 1988 and a lesser annual benefit for
each credited year of past service prior to January 1, 1978. A vested
participant may retire as early as age 55, but such participant's annual benefit
under the Retirement Plan will be reduced actuarially for early retirement. The
Retirement Plan became effective on January 1, 1978 and the Internal Revenue
Service has formally granted qualified tax status to it. Messrs. Gibbons and
Schlosser have completed sixteen and five years of service, respectively, under
the Retirement Plan. Mr. Gibbons' current estimated annual benefit under the
Retirement Plan payable upon retirement at age 65 is approximately $19,229.
Assuming Mr. Gibbons remains employed with the Company for the next twenty-four
years until his normal retirement age, his estimated annual benefit under the
Retirement Plan payable upon retirement will be approximately $108,459. Mr.
Schlosser's current estimated annual benefit under the Retirement Plan payable
upon retirement at age 65 is approximately $9,403. Assuming Mr. Schlosser
remains employed with the Company for the next eighteen years until his normal
retirement age, his estimated annual benefit under the Retirement Plan payable
upon retirement will be approximately $66,427.
Mr. Carroll continues to participate in the Wynn's-Precision, Inc. Salaried
Employees' Pension Plan (the "Precision Plan"). Salaried employees of
Wynn's-Precision, Inc., a subsidiary of the Company, become eligible for the
Precision Plan upon hire and their interests vest after five years of service. A
base benefit is provided for all participants. Participants who elect to
contribute 3% of their salaries to the Precision Plan earn additional benefits
for the period during which they contribute. Under the Precision Plan, upon
retirement at age 65, a vested participant with 15 or more years of service
receives an annual base benefit of $1,200. In addition, a participant who
elected to contribute to the Precision Plan receives a benefit based upon a
percentage of the participant's salary averaged over the five consecutive years
of contributory participation which produced the highest average. The percentage
is 2.33% for each of the first 15 years and 1.0% for each year in excess of 15
during which the participant contributed to the Precision Plan. A vested
participant may retire as early as age 55, but such participant's annual benefit
under the Precision Plan will be reduced actuarially for early retirement. The
Precision Plan became effective on June 14, 1959 and the Internal Revenue
Service has formally granted qualified tax status to the Precision Plan. The
Precision Plan was amended effective January 1, 1989 to comply with changes to
applicable laws and regulations. Mr. Carroll has completed fourteen years of
service under the Precision Plan. Mr. Carroll's current estimated and projected
annual benefit under the Precision Plan payable upon retirement at age 65 is
approximately $74,914.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has entered into employment contracts with Messrs. Carroll,
Gibbons and Schlosser, which expire December 31, 1995. These contracts provide
for an annual salary to be fixed by the Board of Directors for 1994 and
thereafter at not less than $440,000 for Mr. Carroll and $182,000 for each of
Messrs. Gibbons and Schlosser. Increases above this minimum are entirely within
the discretion of the Board of Directors.
The employment contracts contain provisions which are designed to retain
the executives in the event of a "change in control" of the Company. For
purposes of the contracts, a "change in control" will be deemed to take place if
(a) any change occurs which is required to be reported in response to the proxy
regulations of the Securities and Exchange Commission; (b) any person becomes
the beneficial owner of 40% or more of the outstanding voting securities of the
Company; or (c) at the end of any two-year period, the directors, who at the
beginning of the period constituted the Board, no longer constitute a majority
of the Board, unless the election of the new directors was approved by a
two-thirds vote of the then directors who were in office at the beginning of the
period. If, within the two-year period immediately following any change in
control, either Mr. Carroll, Mr. Gibbons or Mr. Schlosser is terminated by the
Company either voluntarily or involuntarily, for any reason other than death,
permanent disability or retirement at or after his normal retirement date, the
Company will pay termination compensation to him equal to 2.99 times the average
annual compensation, including salary and bonuses, paid to him during the five
most recent calendar years, except that in the event
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<PAGE> 12
of voluntary termination in certain cases the lump sum compensation will be
equal to such officer's highest annual compensation, including salary and bonus,
for services rendered in any of the three most recent calendar years.
The Company's Stock-Based Incentive Award Plan provides for the
acceleration of the vesting of awards granted thereunder, including restricted
stock awards, upon the occurrence of a "change in control" of the Company. The
definition of "change in control" in the Stock-Based Incentive Award Plan is
substantially the same as the definition of such term in the employment
contracts referred to above. Such acceleration will occur automatically unless
the Board of Directors, prior to the occurrence of the change in control,
determines otherwise.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR
INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
REPORT OF THE COMPENSATION COMMITTEE
TO: THE BOARD OF DIRECTORS
As members of the Compensation Committee, we are responsible for
administering the Company's various incentive plans, including its Stock-Based
Incentive Award Plan and its annual Corporate Management Incentive Plan. In
addition, we review compensation levels of members of senior management,
evaluate the performance of corporate management and consider management
succession and related matters. The Committee reviews with the Board in detail
all aspects of compensation for the executive officers of the Company.
OVERALL COMPENSATION POLICIES
The primary compensation policy of the Company, which is endorsed by the
Committee, is that a substantial portion of the annual compensation of each
executive officer should be based upon the financial performance of the Company
and the contribution to that performance made by each executive officer. As a
result, much of an executive officer's compensation is contingent upon the
financial performance of the Company. The annual incentive compensation of an
executive officer may be up to but may not exceed 100% of the executive
officer's base salary.
Another policy of the Company and the Committee is that executive
compensation should serve to attract and retain key employees and provide them
with incentives to assist the Company in achieving strategic and financial goals
which ultimately should enhance the value of the Company's stock. In that
regard, in addition to the base salary and bonus elements of executive
compensation, the Company from time to time provides long-term incentives to key
employees through the grant of stock options, restricted stock and other awards
under the Company's Stock-Based Incentive Award Plan.
The Committee takes into account various quantitative and qualitative
indicators of corporate and individual performance in determining the amount and
type of compensation for the Company's executive officers. While the Committee
considers such corporate performance measures as net income, earnings per common
and common equivalent share, return on average common stockholders' equity and
return on net operating assets, the Committee does not apply any specific
quantitative formula in making compensation decisions. The Committee also
considers the importance of achievements that are difficult to quantify, and
accordingly recognizes qualitative indicators of individual performance such as
the development and execution of key corporate strategies and demonstrated
leadership ability.
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Compensation Committee considers the
anticipated tax treatment to the Company and to its executive
10
<PAGE> 13
officers of various payments and benefits. Some types of compensation payments
and their deductibility (e.g., the spread on exercise of non-qualified options)
depend upon the timing of an executive's vesting or exercise of previously
granted rights. In addition, interpretations of and changes in the tax laws and
other factors beyond the Committee's control also affect the deductibility of
compensation.
For example, the enactment in 1993 of Section 162(m) of the Internal
Revenue Code and the issuance of the proposed regulations thereunder are
anticipated to affect the deductibility of executive compensation. The Committee
is currently analyzing Section 162(m) and the proposed regulations in order to
determine their potential impact on the compensation policies of the Company,
although the Committee does not expect necessarily or in all circumstances to
limit executive compensation to the deductible amount under Section 162(m). When
the final regulations have been adopted, the Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Carroll's base salary for 1993 was based on the terms of his existing
employment agreement with the Company which expires on December 31, 1995 (the
"Employment Agreement"). The Employment Agreement establishes Mr. Carroll's
minimum annual base salary at $410,000 for 1993 and $440,000 for 1994.
In addition to his base salary, Mr. Carroll received a bonus in 1993 of
$244,707 under the Company's annual Corporate Management Incentive Plan (the
"Management Incentive Plan"). Under the Management Incentive Plan, the size of
the bonus pool is based on the management bonus pools generated by the four
principal operating subsidiaries of the Company. The subsidiary bonus pools are
based on financial performance as measured primarily by each subsidiary's
respective annual return on beginning net operating assets. Once the size of the
Management Incentive Plan bonus pool is calculated, the executive officers
determine the amount of bonuses to be paid to the Company's management, other
than the executive officers, based on the executive officers' subjective
evaluation of the individual performance of such members of management. Such
management bonuses are deducted from the bonus pool and the remainder of the
bonus pool is allocated by the Committee among the executive officers. The
Committee has the authority to determine the amount of individual bonuses
awarded to executive officers based on the Committee's subjective evaluation of
their performance and historically the Committee has allocated such bonuses to
the executive officers based on their relative base salaries. Each of the
executive officers, including Mr. Carroll, was awarded a bonus of approximately
60% of his base salary for services rendered in 1993.
On December 13, 1993, the Committee granted to Mr. Carroll a restricted
stock award consisting of 60,000 shares of the Company's Common Stock. Such
shares will vest in equal annual installments over a three-year period. If Mr.
Carroll's employment with the Company should terminate during the three-year
period, whether by retirement, disability, death or otherwise, he will forfeit
the shares of restricted stock to the extent such shares have not become vested
as of the date of termination of his employment.
Prior to granting the restricted stock award to Mr. Carroll, the Committee
determined that retaining Mr. Carroll as the Company's Chief Executive Officer
was a key objective. The Committee noted that a recent study commissioned by the
Company and issued by an independent compensation consultant indicated that
long-term compensation of the Company's executive officers was below the median
value for general industrial companies surveyed, after adjusting for relative
revenue levels. The Committee concluded that a significant restricted stock
grant with phased-in vesting would provide to Mr. Carroll an incentive for
future service and continued performance, as well as an incentive to achieve
business goals that would increase the value of the Company's Common Stock for
the benefit of all stockholders.
In determining the size of Mr. Carroll's restricted stock grant, the
Committee reviewed the strong financial performance of the Company over the past
two years, including increased earnings and a significant reduction in inventory
with a corresponding increase in cash flow. The Committee also recognized
progress achieved by Mr. Carroll on strategic goals, such as the transformation
of Wynn's Climate Systems, Inc. from a low-technology assembler to a value-added
component manufacturer. The Committee also reviewed and
11
<PAGE> 14
made a subjective evaluation of certain qualitative factors, including Mr.
Carroll's leadership and motivational skills, his vast knowledge of the
Company's markets, his efforts to develop new products and technology, and his
record of managing profitable businesses. In view of the foregoing factors, and
after reviewing the number of shares of the Company's Common Stock owned by Mr.
Carroll and the number of his outstanding stock options, the Committee concluded
that an award of 60,000 shares of restricted stock was appropriate.
In February 1993, the Committee granted to Messrs. Carroll, Gibbons and
Schlosser options to purchase 12,000, 6,000 and 6,000 shares of Common Stock,
respectively. Such options vest as to 70% of such shares on the first
anniversary of the grant date and as to 10% of such shares on each successive
anniversary date, with full vesting occurring on the fourth anniversary date.
The Committee determined that the grant of such options was appropriate based on
the Committee's subjective evaluation of the executive officers' performance in
1992 and its desire to encourage continued strong performance by the executive
officers.
The Company does not offer a long-term incentive plan. The compensation of
executive officers consists principally of salary, annual bonus income and
potential gains from stock options and awards. The perquisites and other
benefits received by executive officers are incidental to employment. The
aggregate amount of such benefits for each executive officer is below threshold
reporting requirements.
The Committee has reviewed each element of compensation for each of the
executive officers for 1993. The Committee reported to the Board that in the
Committee's opinion, the compensation of each executive officer is reasonable in
view of the Company's consolidated performance and the Committee's subjective
evaluation of the contribution of each executive officer to that performance.
COMPENSATION COMMITTEE
Bryan L. Herrmann
John D. Borie
James D. Woods
February 7, 1994
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<PAGE> 15
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG WYNN'S INTERNATIONAL, INC., NEW YORK STOCK EXCHANGE
MARKET INDEX AND AUTOMOTIVE PARTS AND ACCESSORIES PEER GROUP**
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------
1988 1989 1990 1991 1992 1993
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Wynn's International, Inc........................ 100 115.91 85.50 86.42 144.39 151.51
Peer Group Index................................. 100 99.94 82.12 105.05 149.67 210.93
NYSE Maeket Index................................ 100 127.57 122.36 158.35 165.80 188.25
</TABLE>
- - - ---------------
* $100 invested on December 31, 1988 in the Company's Common Stock and in the
New York Stock Exchange Market Index and the Automotive Parts and Accessories
Peer Group Index. Total return includes reinvestment of dividends if
applicable. Returns for the Company are not necessarily indicative of future
performance. Dates are for the calendar years ending on December 31 of each
year.
** Automotive Parts and Accessories Peer Group is comprised of 40 public
companies. The Peer Group and New York Stock Exchange Market Index
information was furnished by Media General Financial Services.
13
<PAGE> 16
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has approved, and recommends that the stockholders
of the Company approve, an amendment to the Company's Certificate of
Incorporation which will increase the authorized number of shares of Common
Stock of the Company from 10,000,000 to 20,000,000. The amendment to the
Certificate of Incorporation adopted by the Board of Directors is being
submitted to the stockholders for approval in accordance with Delaware law. If
the amendment is approved, Article FOURTH of the Company's Certificate of
Incorporation will read as set forth in Exhibit A attached to this Proxy
Statement and the Company will effect the amendment by filing with the Secretary
of State of the State of Delaware a certificate of amendment to the Company's
Certificate of Incorporation. No amendment is proposed to be made to the
authorized number of shares of Preferred Stock of the Company.
The number of authorized shares of Common Stock was set at 10,000,000 when
the Company was incorporated in 1973 and has not been increased since that date.
As of March 14, 1994, there were 5,548,117 shares of Common Stock outstanding,
exclusive of 347,250 shares held in treasury. As of that date, there were
reserved, out of authorized but unissued shares, 426,135 shares of Common Stock
issuable upon conversion of the Company's 9% Convertible Subordinated Note held
by Metropolitan Life Insurance Company, 487,950 shares of Common Stock issuable
upon exercise of outstanding stock options, and 84,675 shares of Common Stock
issuable in connection with awards granted under the Company's Stock-Based
Incentive Award Plan. After giving effect to the number of authorized but
unissued shares so reserved, only 3,453,123 authorized shares of Common Stock
remained available for issuance as of that date for any other proper corporate
purpose.
The amount of authorized but unissued shares decreased in 1993 by 1,817,463
shares due to the three-for-two stock split effected in September 1993. The
Board of Directors believes that it would be desirable and prudent to have
additional authorized shares of Common Stock available for issuance in
connection with possible future transactions, including stock dividends or stock
splits, acquisitions involving the issuance of stock in addition to or in lieu
of the payment of cash, and additional equity financings, if required. In
addition, the Board of Directors is recommending that the stockholders approve
an Employee Stock Purchase Plan and a Non-Employee Directors' Stock Option Plan
as described in this Proxy Statement. If such plans are approved by the
stockholders, the Company would be required to reserve an additional 450,000
shares for issuance under such plans.
An increase in the additional authorized shares available for issuance in
the future would provide the Company with greater flexibility and enable the
Company to issue shares of Common Stock without the expense and delay of a
special stockholders' meeting. If the proposed amendment is adopted, the Company
would be permitted to issue the authorized shares without further stockholder
approval, except to the extent otherwise required by applicable law or
applicable rules of the New York Stock Exchange. Except for the shares reserved
for issuance as described above and for the shares issuable under the Company's
Employee Stock Purchase Plan and Non-Employee Directors' Stock Option Plan, if
such plans are approved by the stockholders, the Board of Directors has no
present plans, arrangements, understandings or commitments to issue any
additional shares.
The increased authorized but unissued shares would be available for
issuance as an appropriate response to an actual or threatened attempt to
acquire control of the Company or as a strategic measure to deal with potential
takeover activity. For example, shares of Common Stock could be privately placed
with purchasers who might support the Board of Directors in opposing a hostile
takeover bid. The Board has not received any takeover proposals and is not aware
of any present effort by anyone to obtain control of the Company. The Board
believes that an increase in the availability of a sufficient number of
authorized but unissued shares for use under such circumstances would enhance
the ability of the Board of Directors to evaluate carefully the terms of any
takeover proposal that might be received in the future and, if it were
appropriate, to negotiate the terms thereof for the benefit of all of the
Company's stockholders. While the Board believes that the availability of shares
for the above-described purposes could promote responsible consideration of any
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<PAGE> 17
potential takeover proposal, it may also inhibit the making of takeover
proposals and thereby perpetuate the incumbency of the members of the Board of
Directors and management of the Company.
Adoption of the proposed amendment to the Certificate of Incorporation of
this Corporation requires the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ADOPTION OF THE PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION.
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<PAGE> 18
ADOPTION OF EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has adopted, subject to stockholder approval, the
Wynn's International, Inc. Employee Stock Purchase Plan (the "Stock Purchase
Plan"). Under the proposed Stock Purchase Plan, 400,000 shares of the Company's
Common Stock would be available for purchase by qualified employees electing to
participate in the Stock Purchase Plan. Such employees would be entitled
annually to purchase Common Stock of the Company, by means of payroll
deductions, at a 15% discount from the market price of the Company's Common
Stock. The Board of Directors believes that the Stock Purchase Plan would
provide an additional incentive to employees to achieve business goals that
would increase stock values and to remain in the employment of the Company.
SUMMARY DESCRIPTION OF THE STOCK PURCHASE PLAN
The material provisions of the Stock Purchase Plan are summarized below.
The following summary is qualified in its entirety by reference to the text of
the Stock Purchase Plan, a copy of which is set forth as Exhibit B to this Proxy
Statement.
Operation of the Stock Purchase Plan. The Stock Purchase Plan operates as
follows. Prior to January 1 of each year, Qualified Employees (as such term is
defined below) are given the opportunity to participate in the Stock Purchase
Plan. Participating Qualified Employees ("Participants") designate a certain
amount of their after-tax base salary to be set aside over the next calendar
year (a "Plan Year") to purchase the Company's Common Stock. At the end of the
Plan Year, the total amount set aside by each Participant is used to purchase
Common Stock. The purchase price of each share of Common Stock is 85% of the
closing price of a share of Common Stock on the New York Stock Exchange on the
first day of the Plan Year or the last day of the Plan Year, whichever is lower.
Shortly after the end of the Plan Year, the Company issues to the Participants
stock certificates representing the shares purchased under the Stock Purchase
Plan. If the Stock Purchase Plan is approved by stockholders of the Company, the
first Plan Year will commence on January 1, 1995.
Eligibility. Only Qualified Employees are eligible to participate in the
Stock Purchase Plan. The Stock Purchase Plan defines a "Qualified Employee" as
an employee of the Company or any of its subsidiaries who has completed 12
months of continuous service with the Company or such subsidiary as of January 1
of the Plan Year and who is customarily employed for more than 20 hours per week
and more than five months in a calendar year. The term "Qualified Employee" does
not include any employee who, after giving effect to his or her participation in
the Stock Purchase Plan, owns or would own stock representing 5% or more of the
total combined voting power or value of all classes of stock of the Company. As
of March 25, 1994, there were approximately 1,500 Qualified Employees. The
executive officers of the Company, other than Mr. Carroll, are Qualified
Employees.
Limitations on Amount of Shares Purchased. The fair market value of stock
(valued as of January 1 of a Plan Year) purchased by any Participant may not
exceed $25,000 in any calendar year. In addition, the maximum amount that an
employee may elect to set aside under the Stock Purchase Plan in each Plan Year
is 10% of his or her base salary. The minimum amount that an employee may elect
to set aside each pay period is $10.00.
Term of Stock Purchase Plan. The Stock Purchase Plan has no definite term
and will terminate when all of the shares subject to the Stock Purchase Plan
have been purchased.
Termination of Employment. The Stock Purchase Plan does not restrict the
Company's right to terminate the employment of Participants. The Stock Purchase
Plan provides that upon termination of a Participant's employment due to death,
disability or retirement, the Participant or his or her personal representative
may elect to either (i) purchase Common Stock under the Stock Purchase Plan
using the funds in the Participant's account as of the date of death, disability
or retirement, or (ii) receive a refund of the balance of the Participant's
account. Upon termination of employment for a reason other than death,
disability or retirement, the Participant will be deemed to have withdrawn from
the Stock Purchase Plan and all
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<PAGE> 19
amounts in his or her account for that Plan Year will be refunded to him or her
without interest. Termination of employment has no effect on shares previously
purchased under the Stock Purchase Plan.
Acceleration Provision. Upon the dissolution or liquidation of the Company,
or upon a reorganization of the Company with one or more corporations as a
result of which the Company is not the surviving corporation, or upon a sale of
all or substantially all of the property of the Company to another corporation,
the Stock Purchase Plan will terminate and the rights of Participants to
purchase shares under the Stock Purchase Plan will terminate and the Company
thereupon will refund the balance of the Participant's accounts to the
Participants, unless (i) the Compensation Committee of the Board of Directors
determines that the rights of Participants to purchase shares should accelerate
or (ii) provision is made in connection with such transaction for the assumption
of the Stock Purchase Plan or the substitution of rights to purchase the
Company's Common Stock with rights to purchase stock of a successor employer
corporation or an affiliate thereof, with appropriate adjustments as to number
and kind of shares and prices. If the Compensation Committee determines to
accelerate the rights of Participants to purchase Common Stock, the purchase
price of each share would be 85% of the closing price of a share of Common Stock
on January 1 of the then current Plan Year or the acceleration date designated
by the Compensation Committee, whichever is lower.
Amendment or Termination of the Stock Purchase Plan. The Board of Directors
may amend, suspend or terminate the Stock Purchase Plan at any time and from
time to time; provided, however, that, if any amendment would (i) materially
increase the benefits accruing to Participants under the Stock Purchase Plan,
(ii) materially increase the aggregate number of shares of Common Stock that may
be issued under the Stock Purchase Plan, or (iii) materially modify the
requirements as to eligibility for participation in the Stock Purchase Plan,
then to the extent then required by Rule 16b-3 under the Securities Exchange Act
of 1934 (the "Exchange Act") or required under Section 423 of the Internal
Revenue Code (the "Code") or any other applicable law, or deemed necessary or
desirable by the Board, such amendment will be subject to stockholder approval.
Administration. The Compensation Committee of the Board of Directors would
administer the Stock Purchase Plan. The Compensation Committee would have the
power to make, amend and repeal rules and regulations for the interpretation and
administration of the Stock Purchase Plan that are consistent with applicable
tax and securities laws.
Federal Income Tax Consequences. The Stock Purchase Plan is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Code.
Under the Code, no taxable income is recognized by a Participant either as of
the first day of the Plan Year (the "Grant Date") or as of the last day of the
Plan Year when the shares are purchased (the "Exercise Date"). Depending upon
the length of time the acquired shares are held by the Participant, the federal
income tax consequences will vary. If the shares are held for a period of two
years or more from the Grant Date and for at least one year from the Exercise
Date (the "Required Period"), and are sold at a price in excess of the purchase
price paid by the Participant for the shares, the gain on the sale of the shares
will be taxed as ordinary income to the Participant to the extent of the lesser
of (i) the amount by which the fair market value of the shares on the Grant Date
exceeded the purchase price, or (ii) the amount by which the fair market value
of the shares at the time of their sale exceeded the price paid for the shares.
Any portion of such gain not taxed as ordinary income will be treated as
long-term capital gain. If the shares are held for the Required Period and are
sold at a price less than the purchase price paid by the Participant for the
shares, the loss on the sale will be treated as a long-term capital loss to the
Participant. If the shares are held for the Required Period and are subsequently
sold by the Participant, whether at a gain or loss, the Company will not be
entitled to any deduction for federal income tax purposes.
If a Participant disposes of shares within the Required Period, the
Participant will recognize ordinary income in an amount equal to the difference
between the purchase price paid by the Participant for the shares and the fair
market value of the shares on the Exercise Date, and the Company will be
entitled to a corresponding deduction for federal income tax purposes. In
addition, if a Participant disposes of shares within the Required Period at a
price in excess of the purchase price paid by the Participant for the shares,
the Participant will recognize a capital gain in an amount equal to the
difference between the selling price of the shares and the fair market value of
the shares on the Exercise Date. Alternatively, if such shares are disposed
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<PAGE> 20
of during the Required Period at a price less than the fair market value of the
shares on the Exercise Date, the Participant will recognize a capital loss in an
amount equal to the difference between the fair market value of the shares on
the Exercise Date and the selling price of the shares. The Company will not
receive a deduction for federal income tax purposes with respect to any capital
gain recognized by a Participant who sells shares within the Required Period.
The foregoing tax summary is based upon federal income tax laws in effect
as of March 14, 1994.
The benefits that would be received by or allocated to executive officers
of the Company participating in the Stock Purchase Plan and to other Qualified
Employees cannot be determined at this time because a Qualified Employee's
participation in the Stock Purchase Plan and the amount of funds set aside to
purchase shares under the Stock Purchase Plan (subject to the limitations
discussed above) are entirely within the discretion of the Participant. The
closing price of the Company's Common Stock on the New York Stock Exchange on
March 14, 1994, as reported on the Composite Tape and reported in the Western
Edition of The Wall Street Journal, was $20.625 per share.
The adoption of the Stock Purchase Plan requires the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting. Proxies solicited by the Board of Directors will be
voted in favor of the Stock Purchase Plan unless stockholders specify otherwise
in their proxies.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ADOPTION OF THE STOCK PURCHASE PLAN.
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<PAGE> 21
ADOPTION OF NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval, the
Wynn's International, Inc. Non-Employee Directors' Stock Option Plan (the
"Directors' Plan"). The proposed Directors' Plan provides for the automatic
grant of non-qualified stock options ("Options") to directors of the Company who
are not also officers or employees of the Company or any of its subsidiaries
("Non-Employee Directors"). Under the Directors' Plan, Options to purchase up to
50,000 shares of the Company's Common Stock ("Common Stock") may be granted. The
Board of Directors believes that the Directors' Plan will promote the success of
the Company by providing an additional means, through the grant of Options, to
attract, motivate and retain experienced and knowledgeable Non-Employee
Directors.
SUMMARY DESCRIPTION OF THE DIRECTORS' PLAN
The material provisions of the Directors' Plan are summarized below. The
following summary is qualified in its entirety by reference to the text of the
Directors' Plan, a copy of which is set forth as Exhibit C to this Proxy
Statement.
Administration. The Directors' Plan would be administered by the Board of
Directors of the Company (the "Board"). The Board would have the authority to
construe and interpret the Directors' Plan and any agreements evidencing the
Options granted under the Directors' Plan.
Eligibility. Only Non-Employee Directors are eligible to receive Options
under the Directors' Plan. As of March 25, 1994, seven of the eight members of
the Board were Non-Employee Directors. James Carroll, the President and Chief
Executive Officer and a director of the Company, is not a Non-Employee Director
and therefore is not eligible to receive Options under the Directors' Plan.
Type of Option. Only non-qualified stock options may be granted to
Non-Employee Directors under the Directors' Plan.
Grant of Options. If the Directors' Plan is approved by stockholders of the
Company, each person who is a Non-Employee Director at the time the Directors'
Plan is approved by stockholders will receive, as of the date of stockholder
approval, an Option to purchase 2,000 shares of Common Stock. In addition, each
person who thereafter for the first time becomes a Non-Employee Director will be
entitled to receive, upon his or her initial election to the Board, an Option to
purchase 2,000 shares of Common Stock. In each calendar year thereafter during
the term of the Directors' Plan, commencing in 1995, each Non-Employee Director
who is reelected as a director at the Company's Annual Meeting of Stockholders
and who has been a Non-Employee Director for at least one year prior to such
date will be entitled to receive an Option to purchase 1,000 shares of Common
Stock upon his or her re-election to the Board. Because members of the Board are
elected to serve three-year terms and therefore are eligible for re-election
every three years, Non-Employee Directors who meet the foregoing requirements
would be entitled to receive Options to purchase 1,000 shares of Common Stock
once every three years, assuming they are re-elected. If the Directors' Plan is
approved by stockholders, then in 1994 current Non-Employee Directors as a group
will receive Options to purchase a total of 14,000 shares of Common Stock, which
include Options to purchase 2,000 shares of Common Stock to be received by each
of the three nominees for election as a director named in this Proxy Statement.
The value of automatic grants of Options to Non-Employee Directors is not
determinable until the market value on the grant date is known.
Duration of Options. Subject to early termination or acceleration
provisions, which are summarized below, an Option is exercisable, in whole or in
part, for a period of ten years from the date the Option is granted.
Option Exercise Price. The price payable upon the exercise of an Option
(the "Option Price") is the fair market value of the Common Stock on the date of
grant. As of March 14, 1994, the fair market value of the Common Stock (defined
in the Directors' Plan as the closing price of the Common Stock on the Composite
Tape on the New York Stock Exchange) was $20.625 per share. Payment of the
Option Price may be
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<PAGE> 22
made (i) in cash or by check, (ii) in shares of Common Stock already held by the
Non-Employee Director, subject to certain restrictions, or (iii) a combination
thereof.
Termination of Service. If a Non-Employee Director ceases to be a member of
the Board for whatever reason, each Option theretofore granted to him or her
will terminate to the extent it was not exercisable as of the date he or she
ceased to be a member of the Board (the "Cessation Date"). If a Non-Employee
Director ceases to be a member of the Board for a reason other than death or
total disability, the Non-Employee Director will have 90 days from the Cessation
Date or until the expiration date of the Option, whichever occurs first, to
exercise each Option held by the Non-Employee Director to the extent it was
exercisable as of the Cessation Date. If a Non-Employee Director ceases to be a
member of the Board as a result of death or total disability, the Non-Employee
Director or his beneficiary or personal representative, as the case may be, will
have one year or until the expiration date of the Option, whichever occurs
first, to exercise each Option held by the Non-Employee Director to the extent
it was exercisable as of the Cessation Date, and the Board may, in its
discretion, deem to be exercisable a greater portion of the Option than would
otherwise be exercisable as of the Cessation Date.
Acceleration of Options. Upon the approval of the stockholders of a
dissolution of the Company, certain mergers or the sale of all or substantially
all of the property of the Company to another corporation, or upon the
occurrence of a Change of Control, as such term is defined in the Directors'
Plan, each Option that has been held for six months or more (an "Eligible
Option") will become immediately exercisable to the extent it was not previously
exercisable. In such event, upon the surrender of an Option, the Non-Employee
Director will be paid, for each share covered by an Eligible Option, cash in an
amount equal to the difference between the per share consideration being paid to
holders of Common Stock in connection with the event and the Option Price. Such
acceleration will occur automatically unless the Board, prior to such event,
determines otherwise.
Term; Termination; Amendment. The Directors' Plan will terminate on
February 6, 2004, unless terminated earlier by the Board or under the provisions
of the Directors' Plan. The Board may at any time terminate the Directors' Plan,
or from time to time amend or suspend the Directors' Plan, except that the
Directors' Plan may not be amended more than once every six months (other than
as may be necessary to conform to any applicable changes in the tax law) unless
the amendment complies with Rule 16b-3(c)(2)(ii) (or any successor provision)
under the Securities Exchange Act of 1934.
FEDERAL INCOME TAX CONSEQUENCES
Non-qualified Options. A Non-Employee Director who receives an Option under
the Directors' Plan does not recognize taxable income on the date of grant of
the Option, assuming (as is usually the case with plans of this type) that the
Option does not have a readily ascertainable fair market value at the time it is
granted. The Non-Employee Director must, however, recognize ordinary income at
the time of exercise of the Option in the amount of the difference between the
Option Price and the fair market value of the Common Stock on the date of
exercise. The amount of ordinary income recognized by a Non-Employee Director is
deductible by the Company in the year that the income is recognized. Upon
subsequent disposition, any further gain or loss is taxable either as short-term
or long-term capital gain or loss, depending upon the length of time that the
shares of Common Stock are held.
The foregoing tax summary is based upon federal income tax laws in effect
as of March 14, 1994.
The adoption of the Directors' Plan requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting. Each of the directors, other than Mr. Carroll, will be
participants in the Directors' Plan and thus will receive grants of Options if
the Directors' Plan is approved by stockholders.
Proxies solicited by the Board of Directors will be voted in favor of the
Directors' Plan unless stockholders specify otherwise in their proxies.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ADOPTION OF THE DIRECTORS' PLAN.
20
<PAGE> 23
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Ernst & Young as independent auditors of the
Company for the fiscal year ending December 31, 1994. The Board of Directors
recommends that the stockholders approve Ernst & Young as independent auditors
of the Company for the fiscal year ending December 31, 1994. Ernst & Young has
been the Company's independent auditors since the Company's incorporation in
1973 and has been the independent auditors for Wynn Oil Company since 1967. In
the event that the stockholders do not approve Ernst & Young as independent
auditors, the selection of independent auditors will be reconsidered by the
Board of Directors.
A representative of Ernst & Young will be (i) in attendance at the Annual
Meeting, (ii) able to make a statement if he or she so desires, and (iii)
available to respond to appropriate questions.
OTHER MATTERS
Management does not know of any other matters to be presented at the Annual
Meeting of Stockholders, but should any other matters requiring a vote of
stockholders arise, including a question of adjourning the meeting, the persons
named in the accompanying proxy will vote thereon according to their best
judgment.
UPON REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1993, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WILL BE FURNISHED TO ANY STOCKHOLDER WITHOUT CHARGE BY THE COMPANY. ANY
STOCKHOLDER DESIRING A COPY SHOULD WRITE TO THE COMPANY AT THE ADDRESS SET FORTH
IN THE COVER PAGE OF THE PROXY STATEMENT, ATTENTION: GREGG M. GIBBONS,
SECRETARY.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1995 Annual Meeting
of the Company must be received by November 25, 1994 for inclusion in its 1995
Proxy Statement.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
A Form 3 for Robert H. Hood, Jr. was not filed on a timely basis upon Mr.
Hood's election as a director of the Company. Mr. Hood did not own any Common
Stock of the Company at the time of his election to the Board of Directors of
the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993, director Barton Beek was a partner of, and currently is of
counsel to, O'Melveny & Myers, a law firm which the Company retained during 1993
and proposes to retain in 1994 to handle various legal matters on behalf of the
Company.
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<PAGE> 24
EXHIBIT A
ARTICLE FOURTH OF CERTIFICATE OF INCORPORATION
AS PROPOSED TO BE AMENDED
"FOURTH: The corporation shall be authorized to issue two classes of
shares of stock to be designated, respectively, 'Common' and 'Preferred,' the
total number of shares which the corporation shall have authority to issue
shall be twenty million five hundred thousand (20,500,000); the total number of
shares of Common Stock shall be twenty million (20,000,000) and the par value
of each share of Common Stock shall be one dollar ($1.00); and the total number
of shares of Preferred Stock shall be five hundred thousand (500,000) and the
par value of each share of Preferred Stock shall be one dollar ($1.00).
"The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is hereby expressly vested with authority to fix by
resolution or resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including, without limitation, the voting
powers, if any, the dividend rate, conversion rights, redemption price, or
liquidation preference, of any series of Preferred Stock, and to fix the number
of shares constituting any such series, and to increase or decrease the number
of shares of any such series (but not below the number of shares thereof then
outstanding). In case the number of shares of any such series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution or resolutions originally
fixing the number of shares of such series. The number of authorized shares of
any class or classes of stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the stock of the corporation entitled to vote."
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EXHIBIT B
WYNN'S INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. DEFINITIONS.
(a) "Base Pay" means a Qualified Employee's gross pay for a 40-hour
week, excluding overtime payments, incentive compensation, bonuses, sales
commissions, relocation or attributed types of compensation, and other
special payments, fees or allowances.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended and as
it may be amended from time to time.
(d) "Committee" has the meaning set forth in Section 13 hereof.
(e) "Common Stock" means the Common Stock of the Company, $1.00 par
value per share.
(f) "Company" means Wynn's International, Inc., a Delaware
corporation, and its successors.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and as it may be amended from time to time.
(h) "Exercise Date" has the meaning set forth in Section 4(a) hereof.
(i) "Fair Market Value" means the closing price of the Common Stock on
the New York Stock Exchange as reported on the Composite Tape and published
in the Western Edition of The Wall Street Journal, or if there is no
trading of the Common Stock on the date in question, then the closing price
of the Common Stock, as so reported and published, on the next preceding
date on which there was trading in the Common Stock; provided, however,
that the Committee, in determining such Fair Market Value, may utilize such
other exchange, market or other factors affecting value of the Common Stock
as it may deem appropriate.
(j) "Grant Date" has the meaning set forth in Section 4(a) hereof.
(k) "Option Price" has the meaning set forth in Section 5(b) hereof.
(l) "Participant" means a Qualified Employee who elects to participate
in this Plan during a Plan Year.
(m) "Personal Representative" means the person or persons who, upon
the death or Total Disability of a Participant, shall have acquired, on
behalf of the Participant by legal proceeding or under the laws of descent
and distribution or otherwise, the right to exercise the Participant's
rights under, or to receive the benefits specified in, this Plan.
(n) "Plan" means this Wynn's International, Inc. Employee Stock
Purchase Plan, as it may be amended from time to time.
(o) "Plan Year" means the 12-month term of options under this Plan,
commencing on January 1 and ending on December 31 of each year. The first
Plan Year shall be from January 1, 1995 through December 31, 1995.
(p) "Qualified Employee" means any employee of the Company or any
Subsidiary who has completed 12 months of continuous service with the
Company or a Subsidiary as of the Grant Date and who is customarily
employed for more than 20 hours per week and more than five months in a
calendar year. Notwithstanding the foregoing, the term "Qualified Employee"
does not include any employee who, immediately after the option is granted,
owns (within the meaning of Sections 423(b)(3) and 425(d) of the Code)
stock representing 5% or more of the total combined voting power or value
of all classes of stock of the Company or a Subsidiary.
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<PAGE> 26
(q) "Retirement" means the voluntary termination of employment of a
Participant who either (i) is at least 55 years of age and has completed at
least ten (10) years of service with the Company or a Subsidiary, or (ii)
is at least 65 years of age.
(r) "Subsidiary" means any corporation or other entity, at least a
majority of whose outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company.
(s) "Total Disability" means the total and permanent physical or
mental disability of a Participant, evidenced by an inability to engage in
any substantial gainful activity, as determined by the Committee.
All references herein to the masculine shall also be references to the
feminine or neuter as appropriate.
2. PURPOSE; SUMMARY. The purpose of this Plan is to assist Qualified
Employees in acquiring a stock ownership interest in the Company pursuant to a
plan which is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Code. Under this Plan, Participants are deemed to have been
granted options to purchase shares of Common Stock. Participants designate a
certain amount of their Base Pay to be set aside during the Plan Year for the
purpose of purchasing Common Stock. At the end of 12 months, the Participants
are deemed to have exercised their options using the funds set aside for them
and the Company issues share certificates to them. The Plan is intended, among
other things, to provide an additional incentive to Participants, through the
ownership of Common Stock, to achieve business goals that would increase stock
values and to remain in the employ of the Company or a Subsidiary.
3. STOCK SUBJECT TO THIS PLAN. Subject to the provisions of Section 10
hereof (relating to adjustments upon changes in capitalization), the total
number of shares available under this Plan is 400,000 shares of Common Stock.
Such shares may be authorized but unissued shares or treasury shares.
4. GRANT OF OPTIONS.
(a) IN GENERAL. Commencing January 1, 1995 and continuing while this
Plan remains in force, the Company will offer options to purchase shares of
Common Stock under this Plan to all Participants. The options will be
deemed to have been granted as of January 1 of each year (the "Grant
Date"). The term of each option shall be 12 months, the last day of which
shall be December 31 (the "Exercise Date"). The number of shares subject to
each option and deemed to be purchased by each Participant shall be the
quotient, rounded down to the nearest whole number, of (i) the aggregate
payroll deductions authorized by each Participant in accordance with
Section 4(b) below made during the Plan Year, divided by (ii) the Option
Price.
(b) ELECTION TO PARTICIPATE; PAYROLL DEDUCTION AUTHORIZATION. Except
as provided in Section 4(d) below, a Qualified Employee may participate in
this Plan only by means of payroll deductions. Each Qualified Employee who
elects to participate in this Plan shall deliver to the Company, no later
than the December 15 next preceding a Grant Date (or the next business day
following December 15 if such day is not a business day), a written payroll
deduction authorization in a form approved by the Company pursuant to which
he gives notice of his election to participate in this Plan as of the next
following Grant Date, and whereby he designates a stated amount to be
deducted from his Base Pay on each payday during the next Plan Year and
credited to his account under this Plan ("Account"). The stated amount to
be deducted from a Participant's Base Pay may not be less than $10.00 per
pay period. The aggregate stated amount for any Plan Year may not exceed
either of the following: (i) ten percent of the Participant's Base Pay
during the Plan Year; or (ii) an amount which will result in noncompliance
with the $25,000 limitation stated in Section 4(c) below. Payroll deduction
authorizations may not be changed during the Plan Year. In the event the
number of shares of Common Stock subject to options during a Plan Year
exceeds the number of shares then available under this Plan, the available
shares shall be allocated among the Participants in proportion to the
balance of their Accounts at the end of the Plan Year, and any amounts
credited to their Accounts after giving effect to shares purchased that
year shall be refunded to the Participants.
B-2
<PAGE> 27
(c) $25,000 LIMITATION. No Participant shall be deemed to have been
granted an option under this Plan which would permit his rights to purchase
Common Stock under this Plan or any other employee stock purchase plan of
the Company or any Subsidiary to accrue at a rate which exceeds $25,000 of
Fair Market Value of Common Stock (determined as of the Grant Date of such
option) for each calendar year such option is outstanding. For purposes of
this subsection (c), the right to purchase Common Stock under an option
accrues when the option (or any portion thereof) becomes exercisable, and
the right to purchase Common Stock which has accrued during one Plan Year
may not be carried over to any subsequent Plan Year.
(d) LEAVES OF ABSENCE. During leaves of absence approved by the
Company and meeting the requirements of Regulation Section 1.421-7(h)(2)
under the Code, a Participant may continue participation in this Plan by
making cash payments to the Company on the Company's normal paydays equal
to the reduction in his payroll deductions attributable to his leave.
5. EXERCISE OF OPTIONS.
(a) IN GENERAL. On December 31 of each Plan Year, each Participant
automatically and without any act on his part will be deemed to have
exercised his option to the extent that the balance then credited to his
Account is sufficient to purchase whole shares of Common Stock at the
Option Price. The Company shall promptly refund to the Participant any
balance remaining in his Account after giving effect to the purchase of
such whole shares.
(b) "OPTION PRICE" DEFINED. The Option Price per share to be paid by
each Participant upon the exercise of his option shall be an amount equal
to 85% of the Fair Market Value of Common Stock on the Grant Date or on the
Exercise Date, whichever amount is less.
(c) DELIVERY OF SHARE CERTIFICATES. Subject to Section 5(d) below, the
Company will deliver to each Participant a certificate issued in the
Participant's name for the number of shares with respect to which his
option was exercised. The Company will deliver the certificate as soon as
practicable following the Exercise Date.
(d) GOVERNMENT REGULATIONS. This Plan, the granting of options under
this Plan and the issuance of Common Stock pursuant hereto are subject to
all applicable federal and state laws, rules and regulations and to such
approvals by any regulatory or governmental agency which may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Without limiting the generality of the foregoing, no options may
be granted under this Plan, and no shares may be issued by the Company,
unless and until, in each such case, all legal requirements applicable to
the grant or issuance have, in the opinion of counsel to the Company, been
complied with. In connection with the issuance of Common Stock hereunder,
the Participant shall, if requested by the Company, give assurances
satisfactory to counsel to the Company in respect of such matters as the
Company may deem desirable to assure compliance with all applicable legal
requirements.
6. WITHDRAWAL FROM THIS PLAN.
(a) IN GENERAL. Any Participant (other than a person subject to
Section 16(b) of the Exchange Act) may completely withdraw from this Plan
at any time. A Participant who desires to withdraw from this Plan must
deliver to the Company a notice of withdrawal in a form approved by the
Company. Promptly following the time when the notice of withdrawal is
delivered, the Company will refund to the Participant the amount of the
balance of his Account and the Participant's payroll deduction
authorization, interest in this Plan and option under this Plan shall
thereupon terminate.
(b) ELIGIBILITY FOLLOWING WITHDRAWAL. A Participant who has withdrawn
from this Plan shall again be eligible to participate in this Plan upon
expiration of the Plan Year during which the Participant withdrew.
B-3
<PAGE> 28
7. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OF EMPLOYMENT OTHER THAN BY RETIREMENT, DEATH OR TOTAL
DISABILITY. If the employment of a Participant by the Company or a
Subsidiary terminates during a Plan Year other than by reason of
Retirement, death or Total Disability, his participation in this Plan
automatically and without any act on his part shall terminate as of the
date of the termination of the Participant's employment. The Company
promptly will refund to the Participant the amount of the balance of his
Account, and thereupon his interest in and option under this Plan shall
terminate. Nothing in this Plan shall prevent the Company or any Subsidiary
from terminating any Participant's employment.
(b) TERMINATION BY RETIREMENT. If a Participant's employment
terminates during a Plan Year because of Retirement of the Participant, the
Participant may, at his election by written notice to the Company, either
(i) exercise his option as of his Retirement date, in which event the
Company shall apply the balance of his Account to the purchase, at the
Option Price, of whole shares of Common Stock and refund the excess, if
any, or (ii) request payment of the balance of his Account, in which event
the Company promptly shall make such payment, and thereupon his interest in
and option under this Plan shall terminate. If the Participant elects to
exercise his option, the date of his Retirement shall be deemed to be the
Exercise Date for the purpose of computing the Option Price.
(c) TERMINATION BY DEATH OR TOTAL DISABILITY. If a Participant dies or
suffers a Total Disability during a Plan Year, the Participant or his
Personal Representative, as the case may be, by written notice to the
Company, may either (i) exercise the Participant's option as of the date of
death or Total Disability, in which event the Company shall apply the
balance of his Account to the purchase, at the Option Price, of whole
shares of Common Stock and refund the excess, if any, or (ii) request
payment of the balance of the Participant's Account, in which event the
Company promptly shall make such payment to the Participant or his Personal
Representative, and thereupon the Participant's interest in and option
under this Plan shall terminate. If the option is exercised, the date of
death or Total Disability shall be deemed to be the Exercise Date for the
purpose of computing the Option Price. If the Company does not receive such
notice within 90 days of the date of Participant's death or Total
Disability, the Participant or his Personal Representative shall be
conclusively presumed to have elected alternative (ii) above and requested
the payment of the balance of the Participant's Account.
8. RESTRICTION UPON ASSIGNMENT. An option granted under this Plan shall not
be transferable otherwise than by will or the laws of descent and distribution
pursuant to Section 7(c) hereof, and is exercisable during the Participant's
lifetime only by the Participant (or his Personal Representative in the event of
the Participant's Total Disability). The Company will not recognize any
assignment or purported assignment by a Participant of his option or of any
rights under his option or under this Plan.
9. NO RIGHTS AS STOCKHOLDER. With respect to shares of Common Stock subject
to an option, a Participant shall not be deemed to be a stockholder and shall
not have any of the rights or privileges of a stockholder until a certificate
for shares of Common Stock has been issued to the Participant following the
exercise of his option.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If the outstanding shares
of Common Stock are increased, decreased or changed into, or exchanged for, a
different number or kind of shares or securities of the Company through a
reorganization or merger in which the Company is the surviving entity, or
through a combination, recapitalization, reclassification, stock split, stock
dividend, stock consolidation or otherwise, an appropriate adjustment shall be
made in the number and kind of shares that may be issued under this Plan.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger, or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the property of the Company to
another corporation, this Plan shall terminate, and any outstanding options
shall terminate and the Company thereupon will promptly refund the balance of
the Participants' Accounts to the Participants, unless (i) the Committee shall
determine, in its sole and absolute discretion, that any or all options under
this Plan shall accelerate and become immediately exercisable or (ii) provision
shall be made in connection with such transaction for the assumption of options
B-4
<PAGE> 29
theretofore granted hereunder, or the substitution for such options of new
options covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to number and kind of shares
and prices. If the Committee determines to accelerate any or all of the options,
the acceleration date designated by the Committee shall be deemed to be the
Exercise Date for the purpose of computing the option price of the accelerated
option.
In so adjusting Common Stock to reflect such changes, or in determining
that no such adjustment is necessary, the Committee may rely upon the advice of
independent counsel and accountants of the Company, and the determination of the
Committee shall be conclusive. No fractional shares of stock shall be issued
under this Plan on account of any such adjustment.
11. USE OF FUNDS; NO INTEREST PAID. All amounts withheld from Participants'
paychecks hereunder and credited to their Accounts will be included in the
general funds of the Company free of any trust or other restriction and may be
used by the Company for any corporate purpose. Under no circumstances shall
interest on such amounts be paid to any Participant or credited to his Account.
12. AMENDMENT OF THIS PLAN. The Board may amend, suspend or terminate this
Plan at any time and from time to time; provided, however, that, if any
amendment would (i) materially increase the benefits accruing to Participants
under this Plan, (ii) materially increase the aggregate number of shares of
Common Stock that may be issued under this Plan, or (iii) materially modify the
requirements as to eligibility for participation in this Plan, then to the
extent then required by Rule 16b-3 under the Exchange Act to secure benefits
thereunder or to avoid liability under Section 16 of the Exchange Act (and Rules
thereunder) or required under Section 423 of the Code or any other applicable
law, or deemed necessary or advisable by the Board, such amendment shall be
subject to stockholder approval.
13. ADMINISTRATION BY COMMITTEE; RULES AND REGULATIONS. This Plan shall be
administered by a committee composed of not less than two directors of the
Company (the "Committee"), each of whom shall be a "disinterested person" as
such term is defined in Rule 16b-3(c)(2)(i) under the Exchange Act. Each member
shall serve for a term commencing on a date specified by the Board and
continuing until he dies or resigns or is removed from office by the Board. The
Committee shall have the power to make, amend and repeal rules and regulations
for the interpretation and administration of this Plan consistent with the
qualification of this Plan under Section 423 of the Code and consistent with
Rule 16b-3 under the Exchange Act. With respect to persons subject to Section 16
of the Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or any successor rule. To the extent
that any provision of this Plan or action by the Committee fails to so comply,
it shall be deemed null and void to the extent permitted by law.
14. TERM; APPROVAL BY STOCKHOLDERS. No option may be granted during any
period of suspension nor after termination of this Plan, and in no event may any
option be granted under this Plan after the date on which all of the Common
Stock available under this Plan has been purchased.
This Plan shall be submitted for the approval of the Company's stockholders
within 12 months after the date of the Board's initial adoption of this Plan and
shall be effective upon its approval by the stockholders.
15. EFFECT UPON OTHER PLANS. The adoption of this Plan shall not affect any
other compensation or incentive plans in effect for the Company or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company or any Subsidiary (a) to establish any other forms of incentives or
compensation for employees of the Company or any Subsidiary or (b) to grant or
assume options otherwise than under this Plan in connection with any proper
corporate purpose.
16. HEADINGS. Headings are provided herein for convenience only and shall
not serve as a basis for interpretation or construction of this Plan.
17. GOVERNING LAW. This Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of California. If any
provision shall be held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall continue to be fully
effective.
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EXHIBIT C
WYNN'S INTERNATIONAL, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. THE PLAN
1.1 Purpose.
The purpose of this Plan is to promote the success of the Company by
providing an additional means, through the grant of Options, to attract,
motivate and retain experienced and knowledgeable Eligible Directors.
Capitalized terms used herein are defined in Article 4.
1.2 Administration.
(a) Board Authority and Powers; Interpretation. This Plan shall be, to
the maximum extent possible, self-effectuating. This Plan shall be
interpreted and, to the extent any determinations are required hereunder,
shall be administered by the Board. Subject to the express provisions of
this Plan, the Board shall have the authority to construe and interpret
this Plan and any agreements defining the rights and obligations of the
Corporation and Participants under this Plan.
(b) Binding Determinations. Any action taken by, or inaction of, the
Corporation or the Board relating or pursuant to this Plan shall be within
the absolute discretion of that entity or body and shall be conclusive and
binding upon all persons. No member of the Board or officer of the
Corporation shall be liable for any such action or inaction.
(c) Reliance on Experts. In making any determination or in taking or
not taking any action under this Plan, the Board may obtain and may rely
upon the advice of experts, including professional advisors to the
Corporation.
(d) Delegation. The Board may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Corporation.
1.3 Shares Available for Options.
(a) Common Stock. Subject to the provisions of Section 3.4, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares.
(b) Number of Shares. The maximum number of shares of Common Stock
that may be delivered pursuant to Options granted to Eligible Directors
under this Plan shall not exceed 50,000 shares, subject to adjustments
contemplated by Section 3.4.
(c) Calculation of Available Shares and Replenishment. Shares subject
to outstanding Options shall be reserved for issuance. If any Option shall
expire or be canceled or terminated without having been exercised in full,
the undelivered shares subject thereto shall again be available for the
purposes of this Plan.
2. THE OPTIONS
2.1 Automatic Option Grants.
Subject to adjustments contemplated by Section 3.4:
(a) Initial Options. Persons who are Eligible Directors at the time
this Plan is first approved by the stockholders of the Corporation shall be
granted, without any action by the Board, an Option to purchase 2,000
shares of Common Stock (the Option Date of which shall be the date of
stockholder approval of this Plan). After approval of this Plan by the
stockholders of the Corporation, if any person who is not then an Eligible
Director of the Company shall become for the first time an Eligible
Director of the Corporation, there shall be granted automatically to such
person, without any action by the Board, an
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Option to purchase 2,000 shares of Common Stock (the Option Date of which
shall be the date such person becomes an Eligible Director).
(b) Subsequent Options. At the close of business on the date of the
annual stockholders meeting of the Corporation during the term of this
Plan, commencing in 1995, there shall be granted automatically, without any
action by the Board, to each Eligible Director who is reelected as a
director at such meeting, provided that such Eligible Director has been an
Eligible Director for at least one year prior to such date, an Option to
purchase 1,000 shares of Common Stock (the Option Date of which shall be
the date of such annual stockholders meeting).
(c) Maximum Number of Shares. Any annual grant under Section 2.1(b)
that would otherwise exceed the maximum number of shares set forth in
Section 1.3(b) shall be prorated within such limitation among the number of
Eligible Directors entitled thereto.
(d) Option Price. The purchase price per share of the Common Stock
covered by each Option granted pursuant to this Section 2.1 (the "Option
Price") shall be 100% of the Fair Market Value of the Common Stock on the
Option Date.
(e) Option Period and Exercisability. Each Option granted under this
Plan shall become exercisable in installments at the rate of 70% of the
shares initially underlying such Option on the first anniversary of the
Option Date and an additional 10% of such shares on each of the next three
anniversaries thereof.
(f) Non-Qualified Options. Each Option granted under this Plan is
intended to be a non-qualified stock option (i.e., not an "incentive stock
option") under the Code and shall be so designated.
2.2 Payment of Option Price.
The Option Price of any Option granted under this Plan shall be paid in
full at the time of each exercise in cash or by check or in shares of Common
Stock valued at their Fair Market Value on the date of exercise of the Option,
or partly in such shares and partly in cash, provided that any such shares used
in payment shall have been owned by the Participant at least six months prior to
the date of exercise.
2.3 Option Period.
Each Option granted under this Plan and all rights or obligations
thereunder shall expire ten years after the Option Date and shall be subject to
earlier termination as provided herein.
2.4 Limitations on Exercise and Vesting of Options.
(a) Provisions for Exercise. No Option shall be exercisable or shall
vest until at least six months after the initial Option Date, and once
exercisable an Option shall remain exercisable until the expiration or
earlier termination of the Option.
(b) Procedure. Any exercisable Option shall be deemed to be exercised
when the Secretary of the Corporation receives written notice of such
exercise from the Participant, together with the required payment of the
Option Price.
(c) Fractional Shares. Fractional share interests shall be
disregarded, but may be accumulated.
3. OTHER PROVISIONS
3.1 Rights of Participants and Beneficiaries.
(a) No Service Commitment. Nothing contained in this Plan (or in any
other document related to this Plan or to any Option) shall confer upon any
Participant the right to continue to serve as a director of the Corporation
nor shall interfere in any way with the right of the Corporation to change
director compensation or other benefits or to terminate the Participant's
service as a director, with or without cause. Nothing contained in this
Plan or any document related hereto shall influence the construction or
interpretation of the Corporation's Certificate of Incorporation or Bylaws
regarding service on the Board
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or adversely affect any independent contractual right of any Eligible
Director without his or her consent thereto.
(b) Plan Not Funded. Options payable under this Plan shall be payable
in shares and except for the shares reserved for issuance under the Plan,
no special or separate reserve, fund or deposit shall be made to assure
payment of such Options. No Participant, Beneficiary or other person shall
have any right, title or interest in any fund or in any specific asset
(including shares of Common Stock) of the Corporation by reason of any
Option hereunder. Neither the provisions of this Plan (or of any related
document), the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan, shall create, or be construed to
create, a trust of any kind or a fiduciary relationship between the
Corporation and any Participant, Beneficiary or other person. To the extent
that a Participant, Beneficiary or other person acquires a right to receive
payment pursuant to any Option hereunder, such right shall be no greater
than (and will be subordinate to) the right of any unsecured general
creditor of the Corporation.
3.2 No Transferability.
Options may be exercised only by, and shares issuable pursuant to an Option
shall be issued only to, the Participant or, if the Participant has died, the
Participant's Beneficiary or, if the Participant has suffered a Total
Disability, the Participant's Personal Representative, if any, or if there is
none, the Participant. Other than by will or the laws of descent and
distribution, no right or benefit under this Plan or any Option, including,
without limitation, any Option that has not vested, shall be transferable by the
Participant or shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any such attempted
action shall be void. The designation of a Beneficiary hereunder shall not
constitute a transfer for these purposes.
3.3 Termination of Directorship.
If a Participant ceases to be a member of the Board, each Option
theretofore granted to him or her shall terminate and become null and void to
the extent it was not exercisable as of the date he or she ceased to be a member
of the Board (the "Cessation Date"). If a Participant ceases to be a member of
the Board for a reason other than death or Total Disability, the Participant
shall have ninety (90) days from the Cessation Date or until the expiration date
of the Option, whichever occurs first, to exercise each Option held by the
Participant to the extent it was exercisable as of the Cessation Date. If a
Participant ceases to be a member of the Board as a result of death or Total
Disability, the Participant or his or her Beneficiary or Personal
Representative, as the case may be, shall have one year from the Cessation Date
or until the expiration date of the Option, whichever occurs first, to exercise
each Option held by the Participant to the extent it was exercisable as of the
Cessation Date. If a Participant ceases to be a member of the Board as a result
of death or Total Disability, the Board may, in its discretion, consider to be
exercisable a greater portion of the Participant's Option than would otherwise
be exercisable as of the Cessation Date, upon such terms as the Board shall
determine.
3.4 Adjustments Upon Changes in Capitalization.
If the outstanding shares of Common Stock are increased, decreased or
changed into, or exchanged for, a different number or kind of shares or
securities of the Corporation through a reorganization or merger in which the
Corporation is the surviving entity, or through a combination, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
an appropriate adjustment shall be made in the number and kind of shares that
may be issued upon the exercise of Options. A corresponding adjustment to the
Option Price of Options granted prior to any such change shall also be made. Any
such adjustment, however, shall be made without change in the total payment, if
any, applicable to the portion of the Option not exercised, vested or issued but
with a corresponding adjustment in the price for each share.
Subject to the provisions of Section 3.5, upon the dissolution or
liquidation of the Corporation, or upon a reorganization, merger, or
consolidation of the Corporation with one or more corporations as a result of
which the Corporation is not the surviving corporation, or upon a sale of all or
substantially all of the property of the
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Corporation to another corporation, this Plan shall terminate, and any
outstanding Options shall be forfeited, unless provision shall be made in
connection with such transaction for the assumption of Options theretofore
granted, or the substitution for such Options with new stock options covering
the stock of a successor employer corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to number and kind of shares and
prices.
In so adjusting Common Stock to reflect such changes, or in determining
that no such adjustment is necessary, the Board of Directors may rely upon the
advice of independent counsel and accountants of the Corporation, and the
determination of the Board of Directors shall be conclusive; provided, however,
that (i) such adjustment or determination and the Board's actions in respect
thereof are based on objective criteria, and (ii) any adjustment (to the extent
consistent with Section 3.11(c)) is consistent with adjustments to comparable
stock options of the Corporation held by persons other than directors of the
Corporation. No fractional shares of stock shall be issued under this Plan on
account of any such adjustment.
3.5 Acceleration of Options.
(a) In General. Subject to the provisions of Section 3.5(c) below,
upon the occurrence of a Reorganization Transaction or a Change in Control,
each Option that has been held for six months or more (an "Eligible
Option") shall become immediately exercisable to the full extent
theretofore not exercisable. Acceleration of Eligible Options shall comply
with applicable regulatory requirements, including, without limitation,
Rule 16b-3. For purposes of this Section 3.5 only, the "Board" means the
Board of Directors of the Corporation as constituted immediately prior to
the Reorganization Transaction or Change in Control.
(b) Surrender of Eligible Options. Each Participant who is the holder
of an Eligible Option must surrender all outstanding and unexercised
Eligible Options to the Corporation within thirty (30) days after a
Reorganization Transaction or Change in Control occurs. The Board shall
provide written notice of such event and the date thereof to each holder of
an Eligible Option. Upon surrender of an Eligible Option pursuant to this
Section 3.5, the Corporation shall cancel the same and shall pay to the
Participant with respect to each share covered by the Eligible Option an
amount in cash equal to the difference between the Per-Share Consideration
and the Option Price per share.
(c) Discretion of Board. If, prior to a Reorganization Transaction or
a Change in Control, the Board determines that upon its occurrence, there
shall be no acceleration of Options or that only certain Options shall be
accelerated in whole or in part, then such determination of the Board of
Directors shall supersede the provisions of Sections 3.5(a) and 3.5(b)
above; provided, however, that (i) such determination and the Board's
actions in respect thereof are based on objective criteria, and (ii) any
determination (to the extent consistent with Section 3.11(c)), is
consistent with the acceleration or non-acceleration of comparable stock
options of the Corporation held by persons other than directors of the
Corporation.
3.6 Compliance with Laws.
This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of shares of Common Stock, and/or of other securities
pursuant to Section 3.4, under this Plan or under Options are subject to
compliance with all applicable federal and state laws, rules and regulations
(including, but not limited to, state and federal tax and securities laws) and
to such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to assure such
compliance.
3.7 Amendment, Suspension and Termination of Plan.
(a) Board Authorization. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in part.
No Options may be granted during any suspension of this
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Plan or after termination of this Plan, but the Board shall retain
jurisdiction as to Options then outstanding in accordance with the terms of
this Plan.
(b) Stockholder Approval. To the extent required by law or the
provisions of Rule 16b-3 as in effect at the time of any proposed
amendment, any amendment to this Plan or any then outstanding Option shall
be subject to stockholder approval.
(c) Limitations on Amendments to Plan and Options. The provisions of
this Plan shall not be amended more than once every six months (other than
as may be necessary to conform to any applicable changes in the Code or the
rules thereunder), unless such amendment would be consistent with the
provisions of Rule 16b-3(c)(2)(ii) (or any successor provision). No
amendment, suspension or termination of this Plan or any modification of
the terms of any outstanding Option shall, without the written consent of
the Participant, affect in any manner materially adverse to the Participant
any rights or benefits of the Participant or obligations of the Corporation
under any Option granted under this Plan prior to the effective date of
such change. Changes contemplated by Section 3.4 shall not be deemed to
constitute changes or amendments for purposes of this Section 3.7.
3.8 Privileges of Stock Ownership.
Except as otherwise expressly authorized by this Plan, a Participant shall
not be entitled to any privilege of stock ownership as to any shares of Common
Stock subject to an Option granted under this Plan not actually delivered to and
held of record by him or her. No adjustment will be made for dividends or other
rights accruing to stockholders for which the record date is prior to such date
of delivery.
3.9 Effective Date of Plan.
This Plan shall be effective as of February 7, 1994, the date of Board
approval, subject to stockholder approval within twelve (12) months thereafter.
3.10 Term of Plan.
No Option shall be granted more than ten (10) years after the effective
date of this Plan. Unless otherwise expressly provided in this Plan or in an
Option Agreement, any Option theretofore granted may extend beyond such date,
and this Plan shall continue to apply thereto.
3.11 Miscellaneous.
(a) Governing Law. This Plan, the Options, all documents evidencing
Options and all other related documents shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
(b) Severability. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) Plan Construction. It is the intent of the Corporation that this
Plan and Options hereunder satisfy and be interpreted in a manner that, in
the case of persons who are or may be subject to Section 16 of the Exchange
Act, satisfies the applicable requirements of Rule 16b-3 so that such
persons will be entitled to the benefits of Rule 16b-3 or other exemptive
rules under Section 16 of the Exchange Act and will not be subjected to
avoidable liability thereunder. If any provision of this Plan or of any
Option would otherwise frustrate or conflict with the intent expressed
above, that provision to the extent possible shall be interpreted and
deemed amended so as to avoid such conflict, but to the extent of any
remaining irreconcilable conflict with such intent as to such persons in
the circumstances, such provision shall be deemed void.
(d) Non-Exclusivity of Plan. Nothing in this Plan shall limit or be
deemed to limit the authority of the Board to grant awards or authorize any
other compensation under any other plan or authority.
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4. DEFINITIONS
4.1 Definitions.
(a) "Beneficiary" shall mean the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive the
benefits specified in the Option Agreement and under this Plan in the event
of a Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is identified and able to act under
the circumstances.
(b) "Board" shall mean the Board of Directors of the Corporation or,
with respect to administrative matters (as distinguished from Plan
amendments, suspension or termination), any duly authorized committee of
members of the Board designated to administer this Plan.
(c) A "Change in Control" shall be deemed to have occurred if (i) any
change occurs which is required to be reported in response to the proxy
regulations of the Commission; (ii) any "person" (as such term is used in
Section 3(a)(9) and Sections 13(d) and 14(d)(2) of the Exchange Act), other
than the Corporation, is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing 40% or more of
the combined voting power of the Corporation's then outstanding securities;
(iii) during any period of two consecutive years individuals who, at the
beginning of such period, constitute the Board, cease for any reason to
constitute at least a majority thereof unless the election of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period; or
(iv) shares of Common Stock are first purchased pursuant to an exchange or
tender offer other than an offer by the Corporation or a Subsidiary.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Commission" shall mean the Securities and Exchange Commission.
(f) "Common Stock" shall mean the Common Stock of the Corporation,
$1.00 par value per share, and such other securities as may become the
subject of Options, or become subject to Options, pursuant to an adjustment
made under Section 3.4 of this Plan.
(g) "Company" shall mean, collectively, the Corporation and its
Subsidiaries.
(h) "Corporation" shall mean Wynn's International, Inc., a Delaware
corporation, and its successors.
(i) "Eligible Director" shall mean a member of the Board of Directors
of the Corporation who is not (1) an officer or employee of the Corporation
or any Subsidiary at the time of the grant of the Option or (2) a person to
whom equity securities of the Corporation or an affiliate have been granted
or awarded within the year prior to the date of grant or other applicable
date of determination, under or pursuant to the Corporation's Stock-Based
Incentive Award Plan or any other plan of the Corporation or an affiliate
(except this Plan or any other formula or ongoing securities acquisition
plan, the participation in which does not compromise the disinterested
administration of this Plan or any other such plan under Rule 16b-3) or (3)
until the expiration of the transition period under Rule 16b-3 for all
purposes of this Plan, a person who is eligible to participate in any other
such plan.
(j) "Eligible Option" has the meaning given to such term in Section
3.5(a).
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(l) "Fair Market Value" on any specified date shall mean the closing
price of the Common Stock on the New York Stock Exchange as reported on the
Composite Tape and published in the Western Edition of The Wall Street
Journal, or, if there is no trading of the Common Stock on such date, then
the closing price of the Common Stock, as so reported and published, on the
next preceding date on which there was trading in the Common Stock;
provided; however, that the Board, in determining such Fair Market Value,
may utilize such other exchange, market or factors affecting value as it
may deem appropriate.
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(m) "Option" shall mean an option to purchase Common Stock authorized
and granted under this Plan, and related rights.
(n) "Option Agreement" shall mean a written agreement setting forth
the terms of an Option.
(o) "Option Date" shall mean the applicable date set forth in Article
2.
(p) "Option Price" has the meaning given to such term in Section
2.1(d).
(q) "Participant" shall mean an Eligible Director who has been granted
an Option under the provisions of this Plan.
(r) "Per-Share Consideration" shall mean (i) in the case of a
Reorganization Transaction, the highest price per share of Common Stock
provided for in the agreement for the Reorganization Transaction or, in the
case of a Reorganization Transaction involving the dissolution of the
Corporation, the highest amount per share to be distributed to the
stockholders, or (ii) in the case of a Change in Control, the highest price
per share of Common Stock offered pursuant to the tender or exchange offer
if the Change in Control resulted therefrom, or the Fair Market Value of
one share of Common Stock on the date the Change in Control occurred, if it
occurred other than pursuant to a tender or exchange offer, in each case as
determined by the Board, whose determination shall be final and conclusive.
A Reorganization Transaction or Change in Control shall be deemed to have
occurred on the date the Board obtains actual knowledge of the
Reorganization Transaction or Change in Control.
(s) "Personal Representative" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired
on behalf of the Participant, by legal proceeding or otherwise, the power
to exercise the rights or receive benefits under this Plan and who shall
have become the legal representative of the Participant.
(t) "Plan" shall mean this Wynn's International, Inc. Non-Employee
Directors' Stock Option Plan.
(u) "Reorganization Transaction" shall mean the approval by the
stockholders of the Corporation of (i) the merger or consolidation of the
Corporation with or into any other corporation (other than a wholly-owned
Subsidiary) and the Corporation does not survive or survives only as a
subsidiary of another corporation, or (ii) the sale of all or substantially
all of the Corporation's assets to any other corporation (other than a
wholly-owned Subsidiary), or (iii) dissolution of the Corporation.
(v) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act, as amended from time to time.
(w) "Subsidiary" shall mean any corporation or other entity a majority
of whose outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Corporation.
(x) "Total Disability" shall mean the total and permanent physical or
mental disability of a Participant, evidenced by an inability to engage in
any substantial gainful activity, as determined by the Board.
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WYNN'S INTERNATIONAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR ANNUAL MEETING MAY 11, 1994
The undersigned, a stockholder of WYNN'S INTERNATIONAL, INC., a Delaware
corporation (the "Company"), acknowledges receipt of a copy of the Notice of
Annual Meeting of Stockholders, the accompanying Proxy Statement and the Annual
Report to Stockholders for the year ended December 31, 1993; and, revoking any
proxy previously given, hereby constitutes and appoints James Carroll, Gregg M.
Gibbons and Seymour A. Schlosser, and each of them, his true and lawful agents
and proxies with full power of substitution in each, to vote the shares of
Common Stock of the Company standing in the name of the undersigned at the
Annual Meeting of Stockholders of the Company to be held at the Doubletree
Hotel, 100 The City Drive, Orange, California 92668, on Wednesday, May 11,
1994, at 10:00 A.M., local time, and at any adjournment thereof, on all
matters coming before said meeting.
The Board of Directors recommends a vote FOR Items 1, 2, 3, 4 and 5.
1. Election of Three Directors. Nominees: Wesley E. Bellwood, John D.
Borie and James D. Woods
For all nominees / / Withhold authority to vote for all nominees / /
(AUTHORITY TO VOTE FOR ANY NOMINEE NAMED MAY BE
WITHHELD BY LINING THROUGH THAT NOMINEE'S NAME.)
2. Approval of an amendment to the Company's
Certificate of Incorporation to increase the
number of authorized shares of the Company's
Common Stock from 10,000,000 to 20,000,000.
FOR / / AGAINST / / ABSTAIN / /
3. Approval of the Wynn's International, Inc.
Employee Stock Purchase Plan.
FOR / / AGAINST / / ABSTAIN / /
4. Approval of the Wynn's International, Inc.
Non-Employee Directors' Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
5. Approval of Ernst & Young as independent
auditors for the fiscal year ending December 31, 1994.
FOR / / AGAINST / / ABSTAIN / /
6. In their discretion, upon any other matters as
may properly come before the meeting.
(continued and to be signed on other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3, 4 AND 5. IF ANY NOMINEE BECOMES UNAVAILABLE FOR
ANY REASON, THE PERSONS NAMED AS PROXIES SHALL VOTE FOR THE ELECTION OF SUCH
OTHER PERSON AS THE BOARD OF DIRECTORS MAY PROPOSE TO REPLACE SUCH NOMINEE.
Dated , 1994
-------------------------
Signature of Stockholder
-------------------------
Signature of Stockholder
This Proxy must be signed exactly as your name appears hereon. Executors,
administrators, trustees, etc., should give full title, as such. If the
stockholder is a corporation, a duly authorized officer should sign on behalf
of the corporation and should indicate his or her title. PLEASE MARK, SIGN,
DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
