<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
FILED BY THE 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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / 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 the transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
GREASE MONKEY
HOLDING CORPORATION
216 16th Street, Suite 1100
Denver, Colorado 80202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 15, 1998
To Our Shareholders:
The Annual Meeting of Shareholders ("Meeting") 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 15,
1998, at 10:00 a.m., Mountain Time, for the purpose of considering and acting
upon the following:
(1) The election of seven (7) Directors; and
(2) 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 8, 1998, are
entitled to notice of and to vote at the Meeting and at any adjournment thereof.
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 22, 1998
By Order of the Board of Directors
Dana Klapper Cohen, 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 15, 1998
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 ("Meeting") to be held at the training center of the
Company, 216 16th Street, Suite 600, Denver, Colorado 80202, at 10:00 a.m.,
Mountain Time, on June 15, 1998, 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 22, 1998.
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's
corporate secretary, 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 at the Meeting are vested exclusively in the holders of
the Company's $0.03 par value common stock ("Common Stock") with each share
entitled to one vote. Only shareholders of record at the close of business on
May 8, 1998, are entitled to notice of and to vote at the Meeting or any
adjournment thereof. On May 8, 1998, the Company had 4,647,805 shares of the
Company's 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 May 8, 1998, the number of shares of
the Company's 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 each of the Company's directors
and by each nominee for director and sets forth the number of shares of the
Company's Common Stock beneficially owned by all of the Company's directors,
nominees for director and officers as a group:
<PAGE>
<TABLE>
<CAPTION>
Shares
Underlying
Presently
Shares Convertible
Underlying Series C
Shares of Presently Preferred
Common Exercisable Stock and Percent
Stock Options and Unpaid Total of
Name of Beneficial Owner(1) Owned Warrants(3) Dividends(4) Ownership Class(6)
--------------------------- ----- ----------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Rex L. Utsler(2)(5) 640,315 206,800 53,358 901,473 18.4%
Jerry D. Armstrong(2) 438,820 128,925 84,406 652,151 13.4%
James B. Wallace(2) 443,821 123,925 59,127 626,873 13.0%
Ray O. Brownlie(2) 442,375 88,925 59,127 590,427 12.3%
J.H. Bander(2) 407,709 88,925 59,127 555,761 11.6%
Charles E. Steinbrueck(2) 190,476 330,000 37,525 558,001 11.1%
Cortlandt S. Dietler(2) 55,556 30,000 20,014 105,570 2.2%
George F. Wood(2) 38,639 35,000 5,003 78,642 1.7%
Wayne H. Patterson(2) -- 47,000 25,017 72,517 1.5%
Jim D. Baldwin(2) -- 32,500 12,508 45,008 1.0%
All officers and directors as a
group 1,167,312 927,850 243,600 2,338,762 40.2%
(9 persons)
</TABLE>
- - ----------
(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 Rex L. Utsler is Trinity Place, Suite 720, 1801
Broadway, Denver, Colorado 80202. The address for Messrs. Armstrong, Wallace,
Brownlie and Bander 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 706 Golf Club Drive, Castle Pines Village,
Colorado 80104.
2
<PAGE>
(3) Represents shares of Common Stock underlying presently exercisable
options and warrants.
(4) Represents shares of Common Stock underlying shares of Series C
Preferred Stock with a stated value of $100 per share plus accumulated unpaid
dividends that is convertible into Common Stock at $2.50 per share.
(5) Does not include 3,100 shares held by Mr. Utsler's children, of which
he disclaims beneficial ownership.
(6) Assumes all options and warrants are exercised and all Series C
Preferred Stock and accumulated dividends are converted.
(7) The only persons known to the Company who own of record, or who the
Company knows own beneficially, more than 5% of the shares of the Company's
outstanding Series C Preferred Stock are James H. Binger, IDS Center, Suite
4522, 80 South 8th Street, Minneapolis, Minnesota 55402, who owns 1,886.79
shares of Series C Preferred Stock which represents approximately 9.0% of the
outstanding Series C Preferred Stock, and Rex L. Utsler, Trinity Place, Suite
720, 1801 Broadway, Denver, Colorado 80202, who owns 1,079.36 shares of Series C
Preferred Stock, which represents approximately 5.2% of the outstanding shares
of Series C Preferred Stock.
ACTIONS TO BE TAKEN AT THE MEETING
The Meeting is being called by the Board of Directors of the Company to
consider and act upon the following matters:
(1) The election of seven (7) directors; and
(2) Such other matters as may properly come before the Meeting or any
adjournment thereof.
The holders of a majority of the outstanding shares of the Company's Common
Stock, present at the Meeting in person or represented by proxy, shall
constitute a quorum for the purpose of electing directors and for any other
business. If a quorum is present, directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election. For all actions
other than the election of directors, the affirmative vote of a majority of the
shares of the Company's Common Stock represented in person or by proxy at the
Meeting entitled to vote will be required to constitute an act of the
shareholders. Where brokers have not received any instruction from their
clients on how to vote on a particular proposal, brokers are permitted to vote
on routine proposals but not on nonroutine matters. The absence of votes on
nonroutine matters are "broker nonvotes." Abstentions and broker nonvotes will
be counted as present for purposes of determining whether a quorum is present,
but will not be counted for purposes of determining whether a director has been
elected or a proposal has been approved.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Articles of Incorporation, as amended, of the Company currently provide
for between three and fifteen directors. The Board of Directors has set the
number of directors at seven in the Bylaws. Only the holders of Common Stock on
May 8, 1998, will be entitled to vote on the seven directors. 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, if any, as
shall be designated by the Board of Directors or the Board of Directors may
reduce the number of directors to be elected. If elected, each director will
hold office until the annual meeting of shareholders to be held in 1999, until
the director's successor is elected and qualified or until the director's
earlier death, resignation or removal. The nominees for director, each of whom
has consented to serve if elected, are as follows:
DIRECTOR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE SINCE DURING THE LAST FIVE YEARS
- - --------------- --- -------- --------------------------
James B. Wallace 69 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. 55 1994 President and Chief Executive
Steinbrueck 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.
Jerry D. Armstrong 67 1991 Partner in 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.
4
<PAGE>
DIRECTOR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE SINCE DURING THE LAST FIVE YEARS
- - --------------- --- -------- --------------------------
Jim D. Baldwin 65 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. Mr.
Baldwin is on the Board of
Directors for Channel 6 KRMA TV.
Wayne H. Patterson 52 1994 Chairman, QuickPen International, a
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.
Cortlandt S. Dietler 76 1995 Chairman and CEO of TransMontaigne
Oil Company, an oil and gas
company, since April 1995;
Chairman, Founder and CEO of
Associated Natural Gas Corporation,
a gas gathering, processing and
marketing company from 1980 to
1994. Mr. Dietler is also on the
Board of Directors for the
following public companies: Forest
Oil Corporation, Key Production
Company, Inc., and Hallador
Petroleum Corporation.
George F. Wood 54 1991 President of Wood and Co., an
investment management firm, since
1982.
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, 1997, 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/Compensation Committee is set forth below under "Stock Option 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 1997. The Executive
5
<PAGE>
Committee is composed of James B. Wallace, Cortlandt S. Dietler, Charles E.
Steinbrueck and Wayne H. Patterson. The Executive Committee did not meet during
1997. The members of the Option/Compensation Committee, the Audit Committee and
the Executive Committee will be selected again after the first meeting of the
Company's Board of Directors held after the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF ELECTION OF THE
NOMINEES LISTED ABOVE.
Paragraph 5(d) of the Statement of Designation, Voting Powers, Preferences
and Rights of the Series C Preferred Stock that was filed on February 15, 1994
("Statement of Designation"), provides that, if dividends on the Series C
Preferred Stock are in arrears in an aggregate amount equal to at least four
quarterly dividends, the number of members of the Board of Directors of the
Company is automatically increased by the smallest number of directors that will
constitute at least 25% of the Board of Directors after such increase and that
the holders of the Series C Preferred Stock (voting as a separate voting group)
have the exclusive right to elect, remove or replace such additional directors
of the Company.
As stated previously, the Board of Directors of the Company has set the
number of directors at seven. However, due to the fact that the dividends on
the Series C Preferred Stock have been in arrears in an aggregate amount equal
to at least four quarterly dividends for some period of time, as a result of
Paragraph 5(d) of the Statement of Designation, the actual number of directors
of the Company effective at the Meeting will be ten and the holders of the
Series C Preferred Stock, if they so choose, could fill the three vacancies with
additional directors selected by them. The holders of the Series C Preferred
Stock have not notified the Company that they have any intention to fill such
vacancies. Accordingly, even after the election of seven directors at the
Meeting, three vacancies would still exist on the Board of Directors after the
Meeting. These three vacancies can only be filled by the holders of the Series
C Preferred Stock.
EXECUTIVE OFFICERS
The executive officers of the Company are elected annually at the first
meeting of 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:
6
<PAGE>
DIRECTOR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE SINCE DURING THE LAST FIVE YEARS
- - --------------- --- -------- --------------------------
Charles E. Steinbrueck 55 1997 President and Chief Executive
Officer of the Company, 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.
Gary L. Wofford 55 1997 Senior Vice President - Operations
and Development of the Company
since March 1998; Vice President,
System Sales and Support of GMI
from May 1997 to March 1998;
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.
Michael J. Brunetti 41 1995 Vice President - Franchise Sales of
the Company since July 1995; Vice
President, Franchise Development of
GMI since July 1995; 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.
7
<PAGE>
OFFICER PRINCIPAL OCCUPATION
NAME OF EXECUTIVE OFFICER AGE SINCE DURING THE LAST FIVE YEARS
- - ------------------------- --- -------- --------------------------
Dana Klapper Cohen 30 1998 Vice President-Administration,
General Counsel and Corporate
Secretary of the Company since
March 26, 1998. Manager of
Strategic and Legal Affairs of the
Company from May 1997 to March
1998. Associate attorney of the
law firm of Hogan and Hartson, LLP,
from March 1996 to April 1997.
Associate attorney for the law firm
of Holland & Hart, LLP, from
October 1994 to March 1996. Prior
to October 1994, Ms. Cohen attended
Columbia University School of Law.
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.
EXECUTIVE COMPENSATION
The following table sets forth all plan and non-plan compensation paid by
the Company and its subsidiaries to the Chief Executive Officers of the Company
for services rendered for the fiscal years ended December 31, 1997, 1996 and
1995. No other executive officer's total cash compensation exceeded $100,000
for the fiscal years ended December 31, 1997, 1996 or 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Securities
Underlying
Other Annual Options/
Name Principal Position Year Salary Compensation SAR's(#)
---- ------------------ ---- ------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Charles E. President and 1997 $114,182 --- 750,000
Steinbrueck Chief Executive 1996 --- --- 10,000
Officer and 1995 --- --- 20,000
Director of the
Company and GMI(1)
Rex L. Utsler President and 1997 $179,868 $ 8,386(3) ---
Chairman of the 1996 $163,417 $11,450(3) 12,500
Board of Directors 1995 $157,842 $11,328(3) 50,000
of the Company and
GMI(2)
</TABLE>
8
<PAGE>
(1) Mr. Steinbrueck became President and Chief Executive Officer on
February 6, 1997, and has been a Director since 1994. Mr. Steinbrueck has an
Employment Agreement with the Company, described below under "Transactions with
Management and Officers and Certain Business Relationships."
(2) Mr. Utsler resigned as the Chairman of the Board and President of the
Company on February 6, 1997. Mr. Utsler continues to be paid under a consulting
contract through March 31, 1999, described below under "Transactions with
Management and Officers and Certain Business Relationships."
(3) Includes costs of a leased car, country club dues and the Company's
401(k) matching contribution.
The following table sets forth information pertaining to options to
purchase shares of Common Stock that were granted by the Company to Charles E.
Steinbrueck during the year ended December 31, 1997:
Option Grants in Last Fiscal Year
Individual Grants
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of % of Total Options
Securities Granted to
Underlying Option Employees in Exercise or Base
Name Granted (#) Fiscal Year Price ($/Sh) Expiration Date
---------------- ------------------ ------------------ ---------------- ---------------
<S> <C> <C> <C> <C>
Charles E. Steinbrueck 300,000(1) 40% 1.3125 12/31/02
450,000(2) 60% 1.3125 12/31/02
</TABLE>
(1) Options relating to 300,000 shares are fully vested and exercisable.
(2) Options relating to 200,000 shares vest on December 31, 1998, and
options relating to 250,000 shares vest on December 31, 1999, provided the
Company has attained certain performance criteria, described in more detail
below under "Transactions with Management and Officers and Certain Business
Relationships."
No options were granted to Rex L. Utsler during the year ended December 31,
1997.
The following table sets forth information pertaining to the options to
purchase shares of Common Stock that were held by Charles E. Steinbrueck and Rex
L. Utsler as of December 31, 1997. Neither Mr. Steinbrueck nor Mr. Utsler
exercised any options during the year ended December 31, 1997.
Aggregated Option/SAR Exercises in Last Fiscal Year and Option/SAR Values
9
<PAGE>
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options/SARs at Fiscal the-Money Options/SARs at
Year End(#) Fiscal Year End
Name ------------------------- -------------------------
- - ----
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------- -------------------------
<S> <C> <C>
Charles E. Steinbrueck 330,000/450,000 -0- (1)
Rex L. Utsler 62,500/0 -0- (1)
</TABLE>
(1) The exercise prices were above the market price of the Common Stock on
December 31, 1997.
COMPENSATION OF DIRECTORS.
Directors of the Company who are not employees or officers are granted
stock options to purchase shares of Common Stock 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 for 60,000 shares were granted to such directors on March 24, 1998,
for services rendered for the period June 1997 to June 1998. The options have
an exercise price of $1.125 per share and terminate on March 23, 2003.
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 Common Stock valued at market on the date of the contribution.
During 1997, the Company contributed 33,234 shares to the Plan at an average of
$1.36 per share. During 1996, the Company contributed 40,616 shares to the Plan
at an average of $1.14 per share.
STOCK OPTION 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.
10
<PAGE>
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 1,000,000 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, 1993 and 1994 Plans are administered by the Option/Compensation
Committee of not less than three persons appointed by the Board of Directors.
The members of the Option/Compensation Committee for 1997 were Jerry D.
Armstrong, Jim D. Baldwin and George F. Wood. The Option/Compensation Committee
met once during 1997. All members were present at the Meeting. New members of
the Option/Compensation Committee will be selected after the Annual Meeting of
Shareholders.
The Option/Compensation Committee selects the persons to whom options are
granted, determines the time or times when any option granted becomes
exercisable, determines the period within which it becomes exercisable and
determines the price per share at which the option is exercisable, provided that
no option may be exercised more than 10 years after it is granted and the
exercise price must be at least the fair market value of the Company's Common
Stock on the date of the grant. If an employee owns more than 10% of the
Company's outstanding Common Stock, then the Option/Compensation Committee may
grant an incentive option to such employee only if the exercise price of the
option is at least 110% of the fair market value of the Company's Common Stock
on the date of the grant. An incentive option granted to any employee owning
more than 10% of the Company's outstanding Common Stock may not be exercisable
for longer than five years from the date of the grant.
Payment for shares of Common Stock purchased upon exercise of any option
must be in full and in cash or, with certain restrictions, the surrender of
other shares of Common Stock of the Company owned by the employee at the time
the option is exercised.
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.
11
<PAGE>
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. On June 30, 1997, First of September
Corporation was dissolved and any ownership of the Company's Common Stock,
preferred stock and the warrants mentioned previously were transferred to First
of September Corporation's shareholders.
On March 12, 1998, the Company entered into an Employment Agreement
("Agreement") with Charles E. Steinbrueck pursuant to which the Company employed
Mr. Steinbrueck as the President and Chief Executive Officer of the Company
effective January 20, 1997. The Agreement will terminate on January 20, 2000,
unless terminated earlier pursuant to the terms thereof. Pursuant to the
Agreement, the Company has agreed to pay Mr. Steinbrueck an initial base salary
of $125,000 per year. The base salary is to be reviewed annually by the
Compensation Committee of the Board of Directors and the base salary for each
year (or portion thereof) beginning January 1, 1998, shall be determined by the
Compensation Committee which shall authorize an increase in the base salary.
Mr. Steinbrueck also is entitled to receive bonuses in such amount as determined
by the Board of Directors of the Company. Further, Mr. Steinbrueck is eligible
to participate in all plans available to the executive officers of the Company.
Pursuant to the Agreement, Mr. Steinbrueck was granted stock options for 750,000
shares of the Company's Common Stock that have an exercise price of $1.3125 per
share. The options vested as to 100,000 shares as of January 20, 1997, and
options for the remaining 650,000 shares were to vest over a three year period,
subject to the attainment by the Company of certain performance criteria, so
that options with respect to 200,000 shares would become exercisable on December
31, 1997, options with respect to 200,000 shares would become exercisable on
December 31, 1998, and options for 250,000 shares would become exercisable on
December 31, 1999. The options were only to become exercisable if the Company
attained minimum corporate earnings for the years ended December 31, 1997, 1998
and 1999 of $500,000, $1,000,000 and $1,500,000, respectively, if the Company
achieved a compounded growth rate in gross revenue of 20% for each year from
1997 through 1999 and if the Company was within 75% of the growth target for new
unit openings in the business plan established by the Board of Directors for the
Company. Although the Company did not meet the performance criteria for the
year ended December 31, 1997, the Board of Directors of the Company and the
Compensation Committee have determined that 200,000 shares would be exercisable
as of December 31, 1997, pursuant to the option granted to Mr. Steinbrueck. The
options expire on December 31, 2002, if not previously exercised.
The Agreement provides that the Company may terminate the Agreement for
cause without paying Mr. Steinbrueck any additional compensation. However, if
the Company terminates the Agreement other than for cause, the Company is
required to pay Mr. Steinbrueck severance compensation for a period of the
lesser of the remaining portion of the term of the Agreement or two years from
the date of such termination, reduced by any compensation that
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Mr. Steinbrueck may receive from a new employer ("Severance Compensation"). Mr.
Steinbrueck also has the ability to terminate the Agreement voluntarily or upon
a change in control of the Company. A change in control in the Company is
deemed to occur if (i) any person or group acquires direct or indirect
beneficial ownership of 20% or more of the Company's outstanding securities
unless a majority of the "Continuing Directors" approve the acquisition or (ii)
on the first day on which a majority of the members of the Board of Directors
are not "Continuing Directors." A "Continuing Director" is any member of the
Company's Board of Directors who (i) was a member of that Board of Directors on
January 20, 1997, (ii) has been a member of that Board of Directors for the two
years immediately preceding such date of determination, or (iii) was nominated
for election or elected to the Company's Board of Directors with the affirmative
vote of the greater of (x) a majority of the Continuing Directors who are
members of the Company's Board of Directors at the time of such nomination or
election or (y) at least three Continuing Directors. If Mr. Steinbrueck
terminates the Agreement voluntarily, he is entitled to no additional
compensation. However, if the termination is within 120 days following a change
in control, Mr. Steinbrueck is entitled to receive Severance Compensation which
Mr. Steinbrueck can elect to receive in a lump sum. In no event, however, shall
the Severance Compensation upon a Change in Control exceed any amount that the
Company is prohibited from deducting for federal income tax purposes by virtue
of Section 280G of the Internal Revenue Code.
The Agreement also provides that Mr. Steinbrueck will not compete with the
Company during the term of the Agreement and for a period of two years following
the termination thereof.
On January 20, 1997, the Company sold 190,476 shares of the Company's
Common Stock to Mr. Steinbrueck for a total of $250,000.
On January 30, 1998, the Company entered into Employment Agreements
("Agreements") with Gary L. Wofford and with Dana Klapper Cohen pursuant to
which the Company employed Mr. Wofford as Vice President of System Sales and
Support and Ms. Cohen as Vice President-Administration, General Counsel and
Corporate Secretary. The agreements will terminate on January 30, 2001, unless
terminated earlier pursuant to the terms thereof. Pursuant to the Agreements,
the Company has agreed to pay Mr. Wofford an initial base salary of $92,500 per
year and Ms. Cohen an initial base salary of $57,500 per year. The base
salaries are to be reviewed annually by the President and CEO. Mr. Wofford and
Ms. Cohen are entitled to receive bonuses and to participate in all plans
available to the executive officers of the Company. Pursuant to the Agreements,
Mr. Wofford was granted stock options for 100,000 shares of the Company's Common
Stock and Ms. Cohen was granted stock options for 50,000 shares of the Company's
Common Stock. The options were granted under the 1994 Plan and have an exercise
price of $1.375 per share.
The Agreements provide that the Company may terminate the Agreements for
cause without paying Mr. Wofford or Ms. Cohen any additional compensation.
However, if the Company terminates the Agreements other than for cause, the
Company is required to pay Mr. Wofford and Ms. Cohen severance compensation for
a period of the lesser of the remaining portion of the term of the Agreements or
one year from the date of such termination ("Severance Compensation"). Mr.
Wofford and Ms. Cohen also have the ability to terminate
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the Agreements voluntarily or upon a change in control of the Company. A change
in control in the Company is deemed to occur if (i) any person or group acquires
direct or indirect beneficial ownership of 20% or more of the Company's
outstanding securities unless a majority of the "Continuing Directors" approve
the acquisition or (ii) on the first day on which a majority of the members of
the Board of Directors are not "Continuing Directors." A "Continuing Director"
is any member of the Company's Board of Directors who (i) was a member of that
Board of Directors on January 20, 1998, (ii) has been a member of that Board of
Directors for the two years immediately preceding such date of determination, or
(iii) was nominated for election or elected to the Company's Board of Directors
with the affirmative vote of the greater of (x) a majority of the Continuing
Directors who are members of the Company's Board of Directors at the time of
such nomination or election or (y) at least three Continuing Directors. If Mr.
Wofford or Ms. Cohen terminate their respective Agreements voluntarily, he/she
is entitled to no additional compensation. However, if the termination is
within 120 days following a change in control, Mr. Wofford and Ms. Cohen are
entitled to receive Severance Compensation which they can elect to receive in a
lump sum. In no event, however, shall the Severance Compensation upon a Change
in Control exceed any amount that the Company is prohibited from deducting for
federal income tax purposes by virtue of Section 280G of the Internal Revenue
Code.
The Agreements also provide that Mr. Wofford and Ms. Cohen will not compete
with the Company during the term of the Agreements and for a period of two years
following the termination thereof.
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, 1997, 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 Charles E. Steinbrueck
who filed a late Form 4 for three transactions and Gary L. Wofford who filed a
late Form 5 reporting one transaction.
1997 ANNUAL REPORT ON FORM 10-KSB
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB (WITHOUT EXHIBITS) FOR
THE YEAR ENDED DECEMBER 31, 1997 AS FILED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION, ACCOMPANIES THIS PROXY STATEMENT. AN ADDITIONAL COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB (WITHOUT EXHIBITS) WILL BE SUPPLIED
TO EACH BENEFICIAL OWNER OF THE COMPANY'S SECURITIES UPON RECEIPT OF A WRITTEN
REQUEST FROM SUCH BENEFICIAL OWNER. EACH SUCH REQUEST
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MUST SET FORTH A GOOD FAITH REPRESENTATION THAT, AS OF MAY 8, 1998, THE PERSON
MAKING THE REQUEST WAS A BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK. THE
EXHIBITS TO THE ANNUAL REPORT ON FORM 10-KSB MAY BE OBTAINED BY ANY SHAREHOLDER
UPON WRITTEN REQUEST TO GREASE MONKEY HOLDING CORPORATION, ATTENTION: DANA
KLAPPER COHEN, SECRETARY, 216 16TH STREET, SUITE 1100, DENVER, COLORADO 80202.
EACH PERSON MAKING ANY SUCH REQUEST WILL BE REQUIRED TO PAY A FEE OF $0.25 PER
PAGE TO COVER THE COMPANY'S EXPENSES IN FURNISHING SUCH EXHIBITS.
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 January 22, 1999.
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, 1997 were KPMG Peat Marwick LLP. The Board has not met to
select the principal independent public accountants for the fiscal year ended
December 31, 1998. Selection of independent public accountants for fiscal year
1998 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.
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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.
DANA KLAPPER COHEN, Secretary
Denver, Colorado
May 22, 1998
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PROXY GREASE MONKEY HOLDING CORPORATION PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 15, 1998
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 Monday,
June 15, 1998, at 10:00 a.m. Mountain 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 George F. Wood
Charles E. Steinbrueck James B. Wallace Wayne H. Patterson
2. 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. 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 on Form
10-KSB for the fiscal year ended December 31, 1997.
Dated: , 1998
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SIGNATURE
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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.
