<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT
PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only ( as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GREASE MONKEY HOLDING CORPORATION
---------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-ll (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LOGO]
GREASE MONKEY
HOLDING CORPORATION
216 16th Street, Suite 1100
Denver, Colorado 80202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 10, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of Grease Monkey Holding Corporation
("Company"), a Utah corporation, will be held at the training center of the
Company, 216 16th Street, Suite 600, Denver, Colorado 80202, on June 10, 1997,
at 10:00 a.m., Mountain Daylight Time, for the purpose of considering and
acting upon the following:
(1) The election of seven (7) Directors; and
(2) To consider and act upon a proposal to amend the first sentence of
Section 3 of the Company's 1994 Stock Incentive Plan to increase
the number of shares of common stock which may be optioned or
awarded under the plan from 500,000 shares to 1,000,000 shares.
(3) Such other matters as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on May 9, 1997, are
entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. Even if you
plan to attend the meeting, however, you are requested to mark, sign, date and
return the accompanying proxy as soon as possible.
Dated: May 12, 1997
By Order of the Board of Directors
T. Timothy Kershisnik, Secretary
IMPORTANT
THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT
THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING.
<PAGE>
GREASE MONKEY HOLDING CORPORATION
216 16th Street
Suite 1100
Denver, Colorado 80202
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
June 10, 1997
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Grease Monkey Holding Corporation ("Company") for use at the Company's
Annual Meeting of Shareholders to be held at the training center of the Company
216 16th Street, Suite 600, Denver, Colorado 80202, at 10:00 a.m., Mountain
Daylight Time, on June 10, 1997, and at any adjournment thereof. It is
anticipated that this Proxy Statement and the accompanying proxy will be mailed
to the Company's shareholders on or about May 12, 1997.
Any person signing and mailing the enclosed proxy may revoke it at any
time before it is voted by giving written notice of the revocation to the
Company or by voting in person at the meeting, or by voting again by submitting
a new proxy card. Only the latest dated proxy card, including the one which
may be voted in person at the meeting, will count.
VOTING SECURITIES
All voting rights are vested exclusively in the holders of the Company's
$0.03 par value common stock with each share entitled to one vote. Only
shareholders of record at the close of business on May 9, 1997, are entitled to
notice of and to vote at the meeting or any adjournment thereof. On May 9,
1997, the Company had 4,599,274 shares of the Company's $0.03 par value common
stock issued and outstanding. Cumulative voting in the election of directors
is not permitted.
PRINCIPAL SHAREHOLDERS AND OWNERSHIP OF
DIRECTORS, EXECUTIVE OFFICERS AND NOMINEES FOR DIRECTOR
The following table sets forth as of April 30, 1997, the number of shares
of the Company's $0.03 par value common stock owned by each person who owned of
record, or was known to own beneficially, more than 5% of the number of shares
of the Company's outstanding common stock, sets forth the number of shares of
the Company's outstanding common stock beneficially owned by Rex L. Utsler and
by each of the Company's directors and executive officers and sets forth the
number of shares of the Company's common stock beneficially owned by all of the
Company's and/or Grease Monkey International, Inc. ("GMI") directors and
executive officers as a group:
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<TABLE>
<CAPTION>
Shares
Underlying
Presently
Shares Convertible
Underlying Series C
Shares of Presently Preferred
Name of Common Exercisable Stock
Beneficial Stock Options and and Unpaid Beneficial Total Percent of
Owner(1) Owned Warrants (4) Dividends(5) Ownership Ownership Class (7)
- - -------------------------- ----- ------------ ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
First of September
Corporation(2) 1,479,432 500,000 179,276 - 2,158,708 31.7%
Rex L. Utsler(2)(3)(6) 219,123 62,500 - 2,158,708 2,440,331 35.8%
Jerry D. Armstrong(2)(3) 179,260 30,000 48,219 2,158,708 2,416,187 35.4%
James B. Wallace(2)(3) 179,261 25,000 24,415 2,158,708 2,387,384 35.0%
Charles E. Steinbrueck(2) 190,476 130,000 35,706 - 356,182 5.2%
Cortlandt S. Dietler(2) 55,556 20,000 19,043 - 94,599 1.4%
George F. Wood(2) 38,639 25,000 4,761 - 68,400 1.0%
Wayne H. Patterson(2) - 35,000 23,804 - 58,804 .9%
Jim D. Baldwin(2) - 25,000 11,902 - 36,902 .5%
All executive officers and
directors as a group
(11 persons) 643,192 450,000 177,372 2,158,708 3,429,272 50.3%
- - --------------
</TABLE>
To avoid duplication, the aggregate number of shares of common stock and total
percentage of all executive officers and directors as a group have been computed
to include only once the shares of common stock beneficially owned by First of
September Corporation.
(1) All beneficial owners listed have sole voting and/or investment power
with respect to the shares shown unless otherwise indicated.
(2) The address for First of September Corporation and Rex L. Utsler is
216 16th Street, Suite 1100, Denver, Colorado 80202. The address for Messrs.
Armstrong and Wallace is 475 17th Street, Suite 1300, Denver, Colorado 80202.
The address for Charles E. Steinbrueck is 216 16th Street, Suite 1100, Denver,
Colorado 80202. The address for Cortlandt S. Dietler is 2750 Republic Plaza,
370 Seventeenth St., Denver, Colorado 80202. The address for George F. Wood is
55 Madison Street, Suite 680, Denver, Colorado 80206. The address for Wayne H.
Patterson is 384 Inverness Drive South, Suite 200, Englewood, Colorado 80112.
The address for Jim D. Baldwin is 901 Chestnut Trail, Greenwood Village,
Colorado 80121.
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<PAGE>
(3) Rex L. Utsler, Jerry D. Armstrong and James B. Wallace own a total of
64% of the outstanding stock of First of September Corporation. As such they
are deemed to be beneficial owners of the shares of common stock of the Company
which are beneficially owned by First of September Corporation.
(4) Represents shares of common stock underlying presently exercisable
options and warrants.
(5) Represents shares of common stock underlying shares of Series C, 6%
Preferred stock with a stated value of $100 per share plus accumulated unpaid
dividends, convertible into common stock at $2.50 per share.
(6) Does not include 3,100 shares held by Mr. Utsler's children, of which
he disclaims beneficial ownership.
(7) Assumes all options and warrants are exercised and all Series C
Preferred stock and accumulated dividends are converted.
ACTIONS TO BE TAKEN AT THE MEETING
The meeting is being called to consider and act upon the following matters:
(1) The election of seven (7) directors; and
(2) To consider and act upon a proposal to amend the first sentence of
Section 3 of the Company's 1994 Stock Incentive Plan to increase
the number of shares of common stock which may be optioned or
awarded under the plan from 500,000 shares to 1,000,000 shares.
(3) Such other matters as may properly come before the meeting or any
adjournment thereof.
The holders of a majority of the outstanding shares of common stock of the
Company, present at the meeting in person or represented by proxy, shall
constitute a quorum. Directors are elected by a plurality of the votes cast.
The affirmative votes of a majority of the shares of common stock of the Company
represented by person or by proxy at the meeting entitled to vote will be
required to approve the adoption of the amendment to the 1994 Stock Incentive
Plan. Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present, but will not be counted for purposes of
determining whether a proposal has been approved or a director elected, and will
have the effect of a vote against the proposed amendment.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws, as amended, of the Company currently provide for between three
and fifteen directors. The Board of Directors, as provided for in the Bylaws,
has set the number of directors at seven. Unless authority to vote in the
election of directors is withheld, it is the intention of the proxies to
nominate and vote for the following named persons. If any of the nominees
become unavailable for election as a director, which event is not expected to
occur, the proxies will be voted for such substitute as shall be designated by
the Board of Directors. Each director will hold office until the next annual
meeting of shareholders or until his successor is elected and qualified. The
nominees for director, each of whom has consented to serve if elected, are as
follows:
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<PAGE>
DIRECTOR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE SINCE DURING THE LAST FIVE YEARS
- - --------------- --- -------- ------------------------------------------
James B. Wallace 68 1991 Partner in Brownlie, Wallace, Armstrong and
Bander Exploration (BWAB), an oil and gas
company, since 1992; President and member of
the Board of Directors of BWAB Incorporated,
an oil and gas company, from 1980 to 1992.
Mr. Wallace is also a member of the Board of
Directors of Tom Brown, Inc., (a public
company).
Charles E. 53 1994 President and Chief Executive Officer of the
Steinbrueck Company, Grease Monkey International, Inc.
("GMI"), and all other wholly-owned
subsidiaries of the Company, since
February 1997; Managing partner of Retail
Venture Partnership, a partnership
specializing in investments of emerging
public companies, since 1993; Founder,
President, and CEO of Pace Membership
Warehouse from 1983 to 1993.
Jerry D. Armstrong 66 1991 Partner in Brownlie, Wallace, Armstrong and
Bander Exploration (BWAB), an oil and gas
company, since 1992; Senior Vice President
and member of the Board of Directors of BWAB
Incorporated, an oil and gas company, from
1980 to 1992.
Jim D. Baldwin 64 1994 Retired President of King Soopers, a retail
grocery store chain owned by Dillon
Companies, a subsidiary of the Kroger
Company, from 1979 to 1990. Mr. Baldwin was
with Dillon Companies for over 40 years.
Cortlandt S. 75 1995 Chairman, President, CEO and Director of
Dietler TransMontaigne Oil Company, an oil and gas
company, since March 1995; Chairman and CEO
of Associated Natural Gas Corporation, a gas
gathering, processing and marketing company,
from 1980 to February 1995. Mr. Dietler is
also on the Board of Directors for the
following public companies: Forest Oil
Corporation, Key Production Company, Inc.,
PanEnergy Corporation and Hallador Petroleum
Corporation.
Wayne H. 51 1994 Chairman, QuickPen International, a
Patterson commercial software and systems company,
since December 1992; Principal, Patterson
Consulting, a management consulting firm,
since December 1991; Chairman, Live
Entertainment, 1990 to 1991; Chairman, Pace
Membership Warehouse, from 1988 to 1990.
George F. Wood 53 1991 President of Wood and Co., an investment
management firm, since 1982.
5
<PAGE>
The Board of Directors is responsible for the overall affairs of the
Company. The Board of Directors held five meetings during the Company's fiscal
year ended December 31, 1996, and no Director attended fewer than 75% of the
meetings.
There are three (3) types of standing committees of the Board of
Directors, the Option/Compensation Committee, the Audit Committee, and the
Executive Committee. The Company has no nominating committee. Information
pertaining to the Option Committees is set forth below under "COMPENSATION
PURSUANT TO PLANS." The Audit Committee is composed of George F. Wood, Wayne H.
Patterson and Jerry D. Armstrong. Its functions are to review accounting
procedures of the Company and to discuss accounting, audit and reporting matters
with the Company's auditors. The Audit Committee met once during 1996. The
Executive Committee is composed of James B. Wallace, Cortlandt S. Dietler,
Charles E. Steinbrueck and Wayne H. Patterson. The Executive Committee did not
meet during 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF ELECTION OF THE NOMINEES
LISTED ABOVE.
EXECUTIVE OFFICERS
The executive officers of the Company are elected annually at the first
meetingof the Company's Board of Directors held after each annual meeting of
shareholders. Each executive officer will hold office until his or her
successor is duly elected and qualified, until his or her death or resignation,
or until he or she shall have been removed in the manner provided in the
Company's Bylaws. The current executive officers of the Company and GMI and
their business experience are as follows:
NAME OF OFFICER PRINCIPAL OCCUPATION DURING THE LAST
EXECUTIVE OFFICER AGE SINCE FIVE YEARS
----------------- --- -------- ------------------------------------
Charles E.
Steinbrueck 53 1997 President and Chief Executive Officer
of the Company, Grease Monkey
International, Inc. ("GMI"), and all
other wholly-owned subsidiaries of the
Company, since February 1997; Managing
partner of Retail Venture Partnership,
a partnership specializing in
investments of emerging public
companies, since 1993; Founder,
President, and CEO of Pace Membership
Warehouse from 1983 to 1993.
6
<PAGE>
NAME OF OFFICER PRINCIPAL OCCUPATION DURING THE LAST
EXECUTIVE OFFICER AGE SINCE FIVE YEARS
----------------- --- -------- ------------------------------------
T. Timothy
Kershisnik 39 1992 Vice President of GMI since May 1997;
Controller and Treasurer of the Company
and GMI since 1992; and Corporate
Secretary of the Company and GMI since
April 1994; employed by KPMG Peat
Marwick LLP, an accounting firm, from
1980 to 1992, and Senior Manager at
KPMG Peat Marwick LLP from 1987 through
1992.
Darcy A. Erickson 45 1993 Vice President, Marketing and Sales
Promotion of GMI since May 1997; Vice
President, Marketing and Communications
of GMI from August 1993 to May 1997;
Marketing and Communications Director
of GMI from April 1992 to August 1993;
Self-employed as a marketing and
training consultant from 1987 to 1992.
Michael J. Brunetti 40 1995 Vice President, Sales, Development and
Real Estate of GMI since May 1997; Vice
President, Franchise Development of GMI
from July 1995 to May 1997; Director of
Region Development - Western Region for
Moto Photo Inc., a franchisor of
photography imaging centers, from March
1993 to July 1995; employed by Taco
Johns International, Inc., a franchisor
of fast food Mexican style restaurants,
most recently as Vice President of
Franchise Development, from August 1987
to August 1992.
Gary L. Wofford 53 1997 Vice President, System Sales and
Support of GMI since May 1997; Director
of GMI's Company Center Operations from
December 1996 to May 1997; Consultant
to GMI from August 1996 to December
1996; Vice President of Operations and
Franchise Services, Taco Johns
International, Inc., a franchisor of
fast food Mexican style restaurants,
from June 1988 to July 1996.
There are no family relationships between or among any of the directors and
executive officers.
There are no arrangements or understandings pursuant to which any person was
selected as an executive officer.
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<PAGE>
EXECUTIVE COMPENSATION
CASH COMPENSATION, BONUSES AND DEFERRED COMPENSATION
The following table shows all plan and non-plan compensation paid by the
Company and its subsidiaries for services rendered for the fiscal year ended
December 31, 1996, to the only executive officer of the Company whose total
cash compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
Other Annual
Name Principal Position Year Salary Compensation(2)
---- ------------------ ---- ------ ---------------
Rex L. Utsler President and Chairman of
the Board of Directors of
the Company and GMI(1) 1996 $163,417 $ 11,450
1995 $157,842 $ 11,328
1994 $151,522 $ 10,922
- - ------------------------
(1) Mr. Utsler became Chairman of the Board and President on March 4, 1991, and
resigned from such positions on February 6, 1997.
(2) Includes costs of a leased car and the Company's 401(k) matching
contribution.
Effective February 6, 1997, Charles E. Steinbrueck was named President
and Chief Executive Officer of the Company. Mr. Steinbrueck's compensation
includes an annual salary of $125,000 and the standard benefits provided to
employees. Mr. Steinbrueck was also granted five year options to purchase
100,000 shares of the Company's common stock at $1.31 per share. In addition,
Mr. Steinbrueck was granted five year options to purchase 650,000 shares of the
Company's common stock at $1.31 per share which will vest upon certain
performance criteria being achieved. Mr. Steinbrueck also purchased 190,476
newly issued shares of the Company's common stock for $250,000.
Option/SAR Grants in Last Fiscal Year
Individual Grants
- - -------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
- - -------------------------------------------------------------------------------
Rex L. Utsler 12,500 12.5% $1.17 8-15-01
Mr. Utsler did not exercise any options during the year ended December 31, 1996.
8
<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year and Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End(#) at FY-End
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
-------------------------------------------------------
Rex L. Utsler 62,500/0 -0- (1)
(1) The exercise prices were above the market price of the common stock on
December 31, 1996.
COMPENSATION OF DIRECTORS.
Directors of the Company who are not employees or officers are granted
stock options as compensation. Options are granted for services provided as a
director, with additional options granted for committee participation. Options
for 5,000 shares are granted annually for service as a director, options for
2,500 shares are granted annually for service on the Option/Compensation and
Audit Committees and options for 5,000 shares are granted annually for service
on the Executive Committee.
Options to purchase 70,000 shares of common stock at $1.06 per share were
granted to non-employee, non-officer directors on August 16, 1996, for services
to be provided for the period from June 11, 1996, through the date of this
Annual Meeting of Shareholders. The options were granted at the market value
of the Company's common stock on the date of grant (market value being the last
trade as of the close of business) and are exercisable for five years.
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<PAGE>
COMPENSATION PURSUANT TO PLANS
401(k) SAVINGS AND RETIREMENT PLAN
On May 4, 1992, GMI adopted the Grease Monkey International, Inc. 401(k)
Savings and Retirement Plan and Trust Agreement (the "Plan"), effective as of
April 1, 1992. Colorado National Bank Trust and Investment Group is Trustee
under the Plan. At present, the Company issues matching stock to the Plan on a
quarterly basis in an amount equal to 50% of the employees' contribution, up to
a maximum of 6% of the employees' compensation. The Company's contribution is
paid with its $0.03 par value common stock valued at market on the date of the
contribution. During 1996, the Company contributed 40,616 shares to the Plan
at an average of $1.14 per share.
1986, 1993 AND 1994 STOCK PLANS
The Company adopted the 1986 Incentive Stock Option Plan ("1986 Plan") which
was approved by the shareholders on February 17, 1987, in which the employees
of the Company and its subsidiaries are eligible to participate. The 1986 Plan
authorized the granting of options to purchase up to 66,667 shares of the
Company's common stock. No further options can be granted under the 1986 Plan.
The Company adopted the 1993 Incentive Stock Option Plan ("1993 Plan") which
was approved by the shareholders on June 30, 1993. All employees of the Company
and its subsidiaries are eligible to participate. The 1993 Plan authorizes the
granting of options to purchase 300,000 shares of the Company's common stock.
The Company adopted the 1994 Stock Incentive Plan ("1994 Plan") which was
approved by the shareholders on July 11, 1994. All employees, officers,
directors and consultants of the Company and its subsidiaries are eligible to
participate. The 1994 Plan authorizes 500,000 shares of the Company's common
stock. The 1994 Plan provides for the grant of stock options, the award of
cash or stock bonuses and the award of stock appreciation rights.
The 1986 and 1993 Plans are administered by an Option Committee of not fewer
than three persons appointed by the Board of Directors. Such persons are not
eligible to receive options under the Plan. The members of the Option
Committee are Jerry D. Armstrong, Jim D. Baldwin and George F. Wood. The
Option Committee met once during 1996. All members were present at the meeting.
New members of the Option Committee will be selected after the Annual Meeting
of Shareholders.
The 1994 Plan is administered by an Option Committee of not fewer than three
persons appointed by the Board of Directors. The members of the Option
Committee are Jack D. Rule, Jr., George H. Fancher, Jr. and Kermit L. Darkey.
The Option Committee met once during 1995. All members were present at the
meeting. New members of the Option Committee will be selected after the Annual
Meeting of Shareholders.
As a result of rule changes adopted by the Securities and Exchange
Commission under Section 16(b) of the Securities Exchange Act of 1934, the
Board of Directors amended the 1993 and 1994 Plans. This resulted in
administration of the 1993 and 1994 plans by either the board of directors or
by a committee consisting solely of two or more non employee directors. This
resulted in the elimination of a separate
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<PAGE>
Option Committee for the 1994 Plan. In 1997, the Option Committee currently
administering the 1986 and 1993 Plans will also administer the 1994 Plan.
TRANSACTIONS WITH MANAGEMENT AND OTHERS AND CERTAIN BUSINESS RELATIONSHIPS.
On February 5, 1997, the Company entered into a Consultant Agreement with
Rex L. Utsler, the Company's former Chairman of the Board, President and Chief
Executive Officer. The term of the agreement is from March 4, 1997 through
March 3, 1999. The agreement requires Mr. Utsler to perform such duties and
services as may be assigned to him from time to time at the direction or
request of the Company's President and Chief Executive Officer. For these
services, Mr. Utsler will be paid a fee of $16,071 per month, be reimbursed for
his expenses incurred on behalf of the Company and receive the medical benefits
provided generally to the Company's employees.
On August 5, 1991, the Company issued warrants to First of September
Corporation to purchase 500,000 shares of its common stock for $1.50 per share.
In exchange, First of September Corporation provided the Company with a
$750,000 line of credit which was repaid on March 23, 1994, and canceled. The
warrants were to expire on August 4, 1996, but were extended in March 1996 by
the Board of Directors to August 4, 1998, as consideration for First of
September Corporation's agreement to cooperate in an equity and debt financing,
then under consideration. The increase in the estimated fair value of the
warrants of $54,000 was recorded as an increase in stockholder's equity and
deferred offering costs. The offering costs were subsequently written off when
the proposed financing was abandoned.
See also "Executive Compensation" for information for transactions with
Charles E. Steinbrueck.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of the
Company's outstanding common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than ten percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on a review of the Forms 3, 4 and 5 and amendments thereto
furnished to the Company during and for the Company's fiscal year ended
December 31, 1996, the directors, officers or more than 10% shareholders of the
Company who failed to timely file a Form 3, Form 4 or Form 5 were Michael J.
Brunetti who filed a late Form 3 for the grant of stock options on July 25,
1995, Dennis R. McCarthy who failed to timely file Forms 4 for the purchase of
common stock on June 17, 1994, August 2, 1994 and December 26, 1996, and
Charles E. Steinbrueck who filed a late Form 4 for the grant of stock options
on August 16, 1996.
PROPOSAL TWO
PROPOSAL TO AMEND THE FIRST SENTENCE OF SECTION 3 OF THE COMPANY'S 1994 STOCK
INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK WHICH MAY BE
OPTIONED OR AWARDED UNDER THE PLAN FROM 500,000 SHARES TO 1,000,000 SHARES.
The Board of Directors has approved an amendment to the Company's 1994 Stock
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<PAGE>
Incentive Plan ("1994 Plan") to increase the number of shares of common stock
which may be optioned or awarded under the 1994 Plan from 500,000 shares to
1,000,000 shares.
As of April 25, 1997, there were 434,000 shares of common stock awarded or
underlying outstanding options granted or issued upon exercise of options
granted under the 1994 Plan. Currently, the first sentence of Section 3 of the
1994 Plan provides that 500,000 shares of common stock may be optioned or
awarded under the 1994 Plan. As a result, as of April 25, 1997, only 66,000
shares were available for grants of options or awards under the 1994 Plan.
Therefore, the Company must increase the number of shares reserved for grant of
options or award under the 1994 Plan if it is to continue to make grants or
awards under the 1994 Plan.
The 1994 Plan is intended to secure and retain officers, directors,
consultants and employees responsible for the success of the Company, to
motivate such persons to exert their best efforts on behalf of the Company, to
encourage stock ownership and to provide such persons with proprietary
interests in, and a greater concern for, the welfare of, and an incentive to
continue service with the Company. The approximate number of persons eligible
to participate in the 1994 Plan as of April 25, 1997, was 300.
The 1994 Plan is a program that provides for the grant of stock options, the
award of cash or stock bonuses and the award of stock appreciation rights, each
to be evidenced by written instruments delivered by the Company to each
participant. The options granted to officers and other employees may be either
options intended to qualify for federal income tax purposes as "incentive stock
options" or options not so qualifying ("nonstatutory options"). The shares to
be issued under the 1994 Plan may be authorized and unissued shares, treasury
shares or a combination thereof. In the event of a stock split, stock dividend
or other relevant change in capitalization, the maximum number of shares
issuable under the 1994 Plan, as well as the number of shares subject to any
grant or award theretofore made, would be appropriately adjusted to give effect
to such change. Shares awarded or underlying options granted which are not
exercised by reason of the expiration, cancellation or other termination of the
award or grant prior to exercise, shall be available again for future awards
and grants.
The awards and grants under the 1994 Plan may be made to officers,
directors, consultants, and employees of the Company. The 1994 Plan is
administered by the Board of Directors or by a Committee chosen by the Board of
Directors (hereinafter referred to as "Committee") and the Committee selects
the persons to whom awards and grants are to be made and determines the form
of the award or grant.
The Board of Directors may amend or terminate the 1994 Plan in any respect
except that no amendment may be made without stockholder approval if such an
amendment would increase the maximum number of shares available for issuance
under the 1994 Plan.
The Committee may make awards of common stock to eligible persons as
restricted stock or merit or performance share awards from time to time and
upon such conditions and criteria as the Committee may establish. Common stock
granted as a restricted stock award may be issued subject to such restrictions
as the Committee determines. Such awards are not transferrable during a
restricted period established at the date of the award. Restricted stock
awards may be forfeited at the option of the Committee if the grantee's
employment or service with the Company is terminated prior to the lapse of all
restrictions. The grantee may defer the receipt of vested shares and receive a
common stock bonus for deferral, however, in no event will the deferral exceed
20% of the restricted stock so deferred. The Company will hold certificates
for restricted stock until expiration of all restrictions. However, the
grantee will own and enjoy all rights
12
<PAGE>
appurtenant to the restricted stock such as voting rights and rights to receive
distributions, except that the Company will retain custody of all such
distributions without interest, until the expiration of all restrictions.
In the event of a change of control, the employee may receive such
restricted stock free and clear of all restrictions, subject to federal and
state securities laws.
Merit awards may be awarded in shares of common stock for such reasons and
in such amounts as the Committee in its sole discretion may determine. As a
condition to a merit award, the Committee may require the grantee to pay to the
Company an amount equal to or in excess of the par value of the shares of
common stock awarded.
The Committee may also make awards of common stock on the basis of the
Company's financial performance for any given period, subject to criteria which
may be established for each performance period by the Committee. In order to
receive such awards, the grantee must be employed or retained by the Company at
the end of the performance period, provided, however, that if termination of
the employment or service to the Company occurs before the end of such period
due to death, retirement or disability, or other reason approved by the
Committee, the Committee may permit the award of such performance shares. In
the event of change of control, a grantee may receive such performance shares
if approved by the Committee or as otherwise provided in the performance share
award.
Options to purchase shares of common stock of the Company may be granted to
eligible officers, directors, consultants, and employees. The Committee will
determine the time or times when any option granted becomes exercisable, the
period within which it becomes exercisable and the price per share at which the
option is exercisable, provided, however, that no option will be able to be
exercisable for more than 10 years after it is granted and the exercise price
must be at least 100% of the fair market value of the Company's common stock on
the date of the grant.
If an optionee owns shares possessing more than 10% of the voting power of
all classes of the Company's outstanding stock, the Committee may grant an
option to such employee only if the exercise price of the option is at least
110% of the fair market value of the common stock on the day of the grant. The
1994 Plan provides that the fair market value shall be determined by reference
to the closing price of the stock if listed on an exchange or a National
Association of Securities Dealers, Inc. ("NASD") system or by the average of
the last reported highest bid and the lowest asked prices quoted on NASD's
Automated Quotation System or the National Quotation Bureau, Inc. at the close
of business on the date as of which the option is granted. If no market
exists, the Committee shall determine the fair market value. An option granted
to any employee owning shares possessing more than 10% of the voting power of
all classes of the Company's outstanding stock may not be exercised longer than
five years after the date of the grant. Any number of options may be granted
to an employee so long as the fair market value of the shares which vest under
all incentive stock options held by an optionee during any one calendar year
does not exceed $100,000.
Regardless of the type of option, upon exercise, the option price may be
paid in cash, or if permitted by the Committee, in shares of common stock of
the Company having a fair market value equal to the option price. No option
may be transferred except by will or by the laws of descent and distribution
and if, during the optionee's lifetime, the optionee is terminated for any
reason other than death, retirement or disability, the option will be
terminated three months after the date the optionee's employment terminates.
Options held by employees who die or are disabled may be exercised within one
year following death or disability
13
<PAGE>
and options held by employees who retire may be exercised within three months
after retirement, in all cases provided the options were otherwise exercisable
on the date of death, disability or retirement. Options may be exercised during
the individual's continued employment with the Company or service on the Board
of Directors, as the case may be, and for a period not in excess of ninety days
following termination of employment or service on the Board. In the case of
disability of the optionee within the meaning of Section 22(a)(3) of the
Internal Revenue Code of 1986, as amended, ("Code"), or death of the optionee
within three months of retirement, the option may be exercised within one year
following such disability, or death, to the extent the option was otherwise
exercisable.
If, while any option granted under the 1994 Plan remains outstanding, a
change in control of the Company as defined in the 1994 Plan occurs, all such
options, whether or not vested, shall be fully and immediately exercisable.
The Committee may provide for other terms and conditions of the option not
inconsistent with the foregoing provisions.
The Committee may also specify at the time of grant that the grantee shall
be granted another stock option, called a "Reload Option". If the grantee
exercises all or part of a stock option by surrendering previously owned shares
of common stock in full or partial payment of exercise price under the option,
the Reload Option will be for a number of shares equal to the number of shares
surrendered in payment of the exercise price, and will have the same exercise
price equal to the fair market value of the common stock on the date of the
grant of the Reload Option and shall expire on the date of the original option.
The Reload Option may also contain such other terms and conditions as determined
by the Committee at the date of grant of the Reload Option.
Rights entitling the grantee to receive shares of common stock having a fair
market equal to the appreciation in market value of a stated number of shares of
common stock of the Company from the date of grant to the date of exercise may
be granted to eligible persons. Stock appreciation rights or SARs may be
granted in tandem with a related stock option, in which event the grantee may
elect to exercise either the option or the SAR, but not both, as to the same
shares of common stock subject to the option and the SAR. The SAR will have the
same exercise term as the related option except that the SAR will be exercisable
only when the fair market value of the common stock at the date of exercise of
the SAR exceeds the exercise price per share of common stock subject to the
related option. SARs are not transferable. SARs may be exercised during the
individual's continued employment with the Company and for a period not in
excess of ninety days following termination of employment, except in the case of
a termination by reason of retirement or total and permanent incapacity, in
which case the SAR may be exercised within the same periods as the related
option.
Upon exercise of an SAR, the grantee will be paid consideration equal in
value to the excess of the then fair market value of the number of shares to
which the right relates over the fair market value of such number of shares at
the date of grant and such excess will be paid in cash, in shares of common
stock having a fair market value equal to such excess, or such combination
thereof as the Committee may determine.
With respect to bonuses awarded under the 1994 Plan: (a) if payable in cash
or in shares of stock, the award will not constitute taxable income to the
participant until actual vesting or payment of the award at which time the award
(in an amount measured by the then fair market value of such shares or the
amount of
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<PAGE>
cash) will constitute taxable income to the participant and will be deductible
by the Company, or (b) if the award is made in shares of restricted stock,
unless the participant makes the election hereinafter described, the award will
not constitute taxable income to the participant until actual vesting and
release from the restrictions, at which time the award (in an amount measured by
the then fair market value of the shares) will constitute taxable income. Under
Section 83 of the Code, if the award is made in the form of restricted stock,
the participant may elect, at the time of receipt of the award, to report as
income the then fair market value (determined without regard to the
restrictions) of the shares which are the subject of the award, in which case
the participant will not be entitled to a deduction or loss if the award is
thereafter forfeited. In either case, the Company will be entitled to a
deduction for the same amount as the income reported by the participant, at the
same time the participant reports such income.
Under Sections 421(a) and 422 of the Code, the grant or exercise of
incentive options under the 1994 Plan will not result in income taxable to the
optionee or in a business expense deductible by the Company. Upon a later sale
of the shares received on exercise of an incentive option, the optionee will
realize capital gain or loss, so long as the optionee satisfies the minimum
holding period requirements under the 1994 Plan and the Code.
If an optionee disposes of shares acquired from the exercise of an option
under the 1994 Plan prior to the expiration of the statutory holding period
("disqualifying disposition") or if the option is a nonstatutory option, such
optionee will be required to recognize as compensation taxable as ordinary
income the difference between the exercise price and the fair market value on
the date of exercise, as well as the amount realized on any disposition of the
shares in excess of the option exercise price paid by the optionee. The Company
will be entitled to a deduction equal to the amount that the optionee is
required to include in income in the Company's taxable year which falls within
the end of the participating employee's taxable year when the disqualifying
disposition occurs.
The current maximum rate for long-term capital gains realized by
non-corporate taxpayers is less than the current maximum rate on ordinary
income, although the difference is relatively minor and could change if tax
rates change.
The amount by which the fair market value of the Company's common stock
exceeds the exercise price of an incentive option on the date of exercise will
be considered a tax preference item for the optionee and may be subject to the
alternative minimum tax under Section 55 of the Code in the year the option is
exercised.
Persons exercising options granted under the 1994 Plan will not be able to
sell or otherwise distribute the shares issued upon exercise except pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the "Act"), or pursuant to an exemption from the registration requirements of
the Act. Certificates evidencing shares purchased pursuant to the 1994 Plan
will bear a restrictive legend until registered under the Act. The Company has
filed a registration statement registering all shares underlying the options and
awards currently authorized under the 1994 Plan and plans to file a registration
statement registering the additional 500,000 shares, subject to approval of the
amendment to the first sentence of Section 3 of the 1994 Plan by the
shareholders.
With respect to stock appreciation rights granted under the 1994 Plan, the
participant will not realize income by reason of the grant, but upon exercise
the participant will realize taxable income in an amount
15
<PAGE>
equal to the value of the right i.e., the cash received or the fair market value
of the shares issued as a result of the exercise, and the Company will be
entitled to a corresponding deduction for the same amount.
As of April 25, 1997, the Company had approximately 17 persons who had
outstanding option grants under the 1994 Plan.
The following table sets forth as of April 25, 1997, options granted in the
aggregate under the 1994 Plan to (i) current executive officers of the Company
and GMI as a group, (ii) each nominee for election as a director, (iii) current
directors who are not executive officers, as a group, (iv) each other person who
received or is to receive 5% of such options, and (v) all employees who are not
executive officers as a group:
Name Title No. of Options Granted
- - ---- ----- ----------------------
Charles E.Steinbrueck President, Chief
Executive Officer
and Director 130,000
James B. Wallace Chairman of the Board 25,000
Jerry D. Armstrong Director 30,000
Jim D. Baldwin Director 25,000
Cortlandt S. Dietler Director 20,000
Wayne H. Patterson Director 35,000
George F. Wood Director 25,000
Rex L. Utsler Former President and
Chairman of the Board 62,500
Current Directors who are not
executive officers as a group 160,000
-------
-------
Current Executive Officers as
a group 160,000
-------
-------
All employees who are not
executive officers as a group 10,000
-------
-------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF THE AMENDMENT TO THE 1994 PLAN.
16
<PAGE>
1996 ANNUAL REPORT ON FORM 10-KSB
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1996 AS FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED BY ANY SHAREHOLDER WITHOUT CHARGE UPON WRITTEN
REQUEST TO GREASE MONKEY HOLDING CORPORATION, ATTENTION: INVESTOR RELATIONS,
216 16TH STREET, SUITE 1100, DENVER, COLORADO 80202.
SHAREHOLDER PROPOSALS
Shareholder proposals for inclusion in the Company's proxy materials
relating to the next annual meeting of shareholders must be received by the
Company on or before February 10, 1998.
SOLICITATION OF PROXIES
The cost of soliciting proxies, including the cost of preparing, assembling
and mailing this proxy material to shareholders, will be borne by the Company.
Solicitations will be made only by use of the mails, except that, if necessary,
directors, officers, and regular employees of the Company, without additional or
special compensation, may make solicitations of proxies by telephone, telefax or
by personal calls. Brokerage houses, custodians, nominees and fiduciaries will
be requested to forward the proxy soliciting material to the beneficial owners
of the Company's shares held of record by such persons and the Company will
reimburse them for their reasonable expenses in this connection.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's principal independent public accountants for the fiscal year
ended December 31, 1996 were KPMG Peat Marwick LLP. The Board has not met to
select the principal independent public accountants for the fiscal year ended
December 31, 1997. Selection of independent public accountants for fiscal year
1997 will be made by the Board of Directors, based upon the recommendation of
the Audit Committee.
The Company expects a representative of KPMG Peat Marwick LLP to be present
at the Annual Meeting of Shareholders and that the representative will have an
opportunity to answer questions and make a statement if the representative
desires.
17
<PAGE>
OTHER BUSINESS
The Company's Board of Directors does not know of any matters to be
presented at the meeting other than the matters set forth herein. If any other
business should come before the meeting, the persons named in the enclosed form
of proxy will vote such proxy according to their judgment on such matters.
T. TIMOTHY KERSHISNIK, Secretary
Denver, Colorado
May 12, 1997
<PAGE>
PROXY GREASE MONKEY HOLDING CORPORATION PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 10, 1997
The undersigned hereby constitute(s) and appoint(s) Charles E.
Steinbrueck and Jerry D. Armstrong and each of them, the true and lawful
attorneys and proxies of the undersigned with full power of substitution and
appointment, for and in the name, place and stead of the undersigned, to act
for and to vote all of the undersigned's shares of common stock of Grease
Monkey Holding Corporation ("Company") at the Annual Meeting of Shareholders
to be held at the training center of the Company, 216 16th Street, Suite 600,
Denver, Colorado, on Tuesday, June 10, 1997, at 10:00 a.m. Mountain Daylight
Time and at any and all adjournments thereof, for the following purposes:
1. ELECTION OF SEVEN (7) DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below) [ ] WITHHOLD AUTHORITY to vote for all nominees listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW. UNLESS THE
PROXIES ARE OTHERWISE INSTRUCTED, YOUR TOTAL VOTE FOR DIRECTORS WILL BE CAST
EQUALLY FOR THE NOMINEES WITH RESPECT TO WHOM YOU DO NOT WITHHOLD AUTHORITY.
Jerry D. Armstrong Jim D. Baldwin Cortlandt S. Dietler
Wayne H. Patterson Charles E. Steinbrueck James B. Wallace
George F. Wood
2. AMENDMENT OF THE FIRST SENTENCE OF SECTION 3 OF THE COMPANY'S 1994 STOCK
INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK WHICH
MAY BE OPTIONED OR AWARDED UNDER THE 1994 PLAN FROM 500,000 SHARES
TO 1,000,000 SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business, including a substitute nominee for director if a nominee is unable
to serve, as may lawfully come before the meeting.
The undersigned hereby revoke(s) any proxies as to the undersigned's
shares heretofore given by the undersigned and ratify(ies) and confirm(s) all
that said attorneys and proxies may lawfully do by virtue hereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ABOVE AND
FOR THE APPROVAL OF THE AMENDMENT TO THE FIRST SENTENCE OF SECTION 3 OF THE
COMPANY'S 1994 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK WHICH MAY BE OPTIONED OR AWARDED UNDER THE 1994 PLAN FROM
500,000 SHARES TO 1,000,000 SHARES. It is understood that this Proxy confers
discretionary authority in respect to matters not known or determined at the
time of the mailing of the Notice of Annual Meeting of Shareholders to the
undersigned. THE PROXIES AND ATTORNEYS INTEND TO VOTE THE SHARES REPRESENTED
BY THIS PROXY ON SUCH MATTERS, IF ANY, AS DETERMINED BY THE BOARD OF
DIRECTORS.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, the Proxy Statement and the Company's Annual Report
for the fiscal year ended December 31, 1996.
Dated: , 1997
-------------------------------------
------------------------------------------
SIGNATURE
------------------------------------------
SIGNATURE IF HELD JOINTLY
Signature(s) should agree with name(s)
stenciled hereon. Executors,
administrators, trustees, guardians and
attorneys should indicate when signing.
Attorneys should submit powers of
attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS. PLEASE SIGN AND
RETURN THIS PROXY TO AMERICAN SECURITIES
TRANSFER, INC., 938 QUAIL STREET, SUITE
101, LAKEWOOD, CO. 80215-5513. THE
GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
