UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO
_________
Commission File Number 1-2725
HEIN-WERNER CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0340430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2120 Pewaukee Road 53188
Waukesha, Wisconsin (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (414) 542-6611
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $1 par value American Stock Exchange
Common Stock Purchase Rights American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K [ ]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 27, 1998: $21,816,743
The number of shares outstanding of each registrant's classes of common
stock as of March 27, 1998: Common Stock, $1 par value -- 2,908,899
shares
DOCUMENTS INCORPORATED BY REFERENCE:
None
<PAGE>
The undersigned Registrant hereby amends Items 10 through 13 of
its Annual Report on Form 10-K for the fiscal year ended December 31, 1997
to provide in their entirety as follows:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE COMPANY
The By-laws of Hein-Werner Corporation (the "Company") provide
for six directors, divided into three classes, with directors serving for
separate and overlapping three-year terms.
The following table lists each director of the Company and
provides information given as of March 27, 1998, as to the age, principal
occupation and background for the last five years and period of service as
a director for each person.
Director
Name Since Age Principal Occupation; Background
DIRECTORS WHOSE TERMS EXPIRE IN 1998
J. S. Jones 1975 60 President, Gardner Industries, Inc.,
Horicon, Wisconsin (manufacturer of
original equipment components).
M. J. McSweeney 1982 59 Partner, Foley & Lardner, Milwaukee,
Wisconsin (law firm).
DIRECTORS WHOSE TERMS EXPIRE IN 1999
O. A. Friend 1983 68 Former Chairman of National
Teleservice, Inc. (provider of long
distance telephone service), of Winona,
Minnesota; consultant to the Company
until June, 1990.
D. L. Krause 1997 58 Senior Vice President and Corporate
Controller of Newell Co., Freeport,
Illinois (manufacturer and marketer of
consumer products), since 1990.
DIRECTORS WHOSE TERMS EXPIRE IN 2000
J. L. Dindorf 1976 57 President and Chief Executive Officer
of the Company.
D. J. Schuetz 1977 73 President and Chairman of the Board,
Monark Supply Company, Milwaukee,
Wisconsin (distributor of automotive
parts and supplies).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors are required to
file under the Securities Exchange Act of 1934, as amended, reports
concerning their ownership of Company equity securities with the
Securities and Exchange Commission and the Company. Based solely upon
information provided to the Company by individual directors and executive
officers, the Company believes that during the fiscal year ended December
31, 1997 all filing requirements applicable to executive officers and
directors have been complied with, except that (i) Mr. Schuetz did not
timely file one Form 4 with respect to his sale of 2,107 shares of the
Company's Common Stock, which transaction occurred on December 15, 1997;
and (ii) Mr. James Queenan, an officer of the Company in 1997, did not
timely file one Form 4 with respect to the exercise of vested stock
options to acquire 10,210 shares of the Company's Common Stock on December
30, 1997.
EXECUTIVE OFFICERS OF THE COMPANY
The information required by Item 10 relating to the Company's
executive officers is set forth at the end of Part I of this Annual Report
on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning
the compensation earned in each of the last three fiscal years by the
Company's Chief Executive Officer and each of its four other most highly
compensated executive officers (such persons are sometimes referred to as
the "named executive officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Salary Bonus Compensation(2) Awards Options Payouts Compensa-
Name and Principal Year ($) ($) ($) ($) (#) ($) tion(3)($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph L. Dindorf, 1997 $275,000 $20,000 0 0 0 0 $289,400
President and Chief 1996 $275,000 60,000 0 0 0 0 38,800
Executive Officer 1995 $267,496 0 0 0 0 0 38,100
Jean-Paul Barthelme, 1997 $226,525(1) $0 0 0 0 0 $15,600
Vice President and 1996 226,525(1) 10,000 0 0 0 0 8,600
President, European 1995 226,525(1) 0 0 0 0 0 2,600
Operations
Reinald D. Liegel, 1997 $125,000 $10,000 $26,034 0 0 0 $13,800
Senior Vice President - 1996 125,000 20,000 0 0 0 0 6,700
Technology 1995 122,300 0 0 0 0 0 2,000
Michael J. Koons 1997 $86,500 $10,000 $22,394 0 0 0 $9,100
Vice President Industrial 1996 86,500 20,000 0 0 0 0 4,000
Relations and Personnel 1995 84,300 0 0 0 0 0 1,200
Jeffrey V. Russell 1997 $94,600 $10,000 0 0 0 0 $8,800
President, Collision 1996 91,300 10,000 0 0 0 0 4,400
Repair Equipment Group 1995 88,000 0 0 0 0 0 1,300
_______________
(1) Mr. Barthelme's salary is paid in Swiss Francs. For each of the years 1997, 1996, and 1995 he was paid SFr 331,032.
For comparison purposes, these amounts have been converted to U.S. dollars using the exchange rate in effect on December 31,
1997.
(2) Certain personal benefits provided by the Company to the named executive officers are not included in the table. The
aggregate amount of such personal benefits for each named executive officer in each year reflected in the table, with the
exception of Messrs. Liegel and Koons for 1997 only, did not exceed the lesser of $50,000 or 10% of the sum of such
officer's salary and bonus in such respective year. The amounts shown for 1997 for Messrs. Liegel and Koons each include
$15,000 for the purchase of an annuity contract and $5,700 for a related income tax reimbursement.
(3) Consists solely of contributions by the Company to the Company's profit sharing plan (the "Plan") for all of the named
executives, except Mr. Dindorf. Each year the Company may contribute between 5% and 16% of its net income before taxes for
the prior fiscal year if it is in excess of various levels, which amount, if any, is allocated among participants by means
of a formula based on individual compensation and years of service with the Company, subject to certain limits. The amounts
reported for Mr. Dindorf represent contributions by the Company to the Plan and the value of annual insurance premiums paid
by the Company with respect to life insurance and disability insurance for the benefit of Mr. Dindorf, respectively, as
follows: 1997: $15,600, $9,500, and $11,500; 1996: $8,600, $18,700, and $11,500; and 1995: $2,600, $24,000, and $11,500.
In addition, the 1997 amount for Mr. Dindorf includes $172,600 for the value of a life insurance policy transferred to him
and $80,200 for a related income tax reimbursement.
</TABLE>
Stock Options
The Company has in effect the 1987 Stock Option and Incentive Plan
pursuant to which options to purchase Common Stock may be granted to key
employees of the Company and its subsidiaries. No options were granted to
any of the named executive officers in fiscal year 1997. The following
table sets forth information regarding the exercise of stock options by
each of the named executive officers during the 1997 fiscal year and the
fiscal year-end value of unexercised options held by such officers.
Aggregated Option Exercises In 1997
Fiscal Year and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Value of Unexercised In-
Securities Underlying the-Money Options at
Unexercised Fiscal Year-End ($)(2)
Options at Fiscal Year-End(#)(1)
Name Number of Value Exercisable Unexercisable Exercisable Unexercisable
Shares Realized($)
Acquired
on
Exercise(#)
<S> <C> <C> <C> <C>
J. L. Dindorf -- -- 51,051 -- $137,965 --
J. P. Barthelme -- -- 10,210 -- 27,593 --
R. D. Liegel -- -- 19,145 -- 51,739 --
M. J. Koons -- -- 6,381 -- 17,245 --
J. V. Russell -- -- 6,381 -- 17,245 --
_______________
(1) The number of securities underlying unexercised options reported does not reflect the effect of the Company's 5%
stock dividend which was paid on January 23, 1998.
(2) The dollar values are calculated by determining the difference between the fair market value of the underlying
stock as of December 31, 1997 and the exercise price of the options.
</TABLE>
Compensation of Directors
The Company's standard method of compensating directors is to pay each
director who is not also an officer of the Company a retainer of $8,000
per year, payable quarterly. In addition, a director is entitled to a fee
of $650 for each Board meeting attended and $600 for each committee
meeting attended. Board members are also reimbursed for reasonable
travel, lodging, and related expenses incurred in connection with
attendance at such meetings.
Agreements with Named Executive Officers
The Company has in effect a Change of Control Agreement with Mr. Dindorf.
Prior to April 1998, the Change of Control Agreement provided that in the
event of the termination of Mr. Dindorf's employment with the Company for
any reason (other than his death or disability), including voluntary
termination by Mr. Dindorf, within two years following a change of control
of the Company, Mr. Dindorf would have been entitled to a lump sum payment
from the Company equal to 200% of his total compensation during the
twelve-month period immediately preceding such change in control. For
purposes of the Change of Control Agreement, a change of control is
defined as the acquisition, by any person, organization or association of
persons or organizations of more than 30% of the voting stock of the
Company. In the event that any such person, organization, or association
acquired more than 50% of the Company's voting stock, the period within
which termination of employment gave rise to payment under the Change of
Control Agreement would have been the shorter of one year following
acquisition of such stock or two years following a change in control.
Subsequent to the date of the initial filing of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 and in
connection with the execution of that certain Agreement and Plan of
Merger, dated as of April 27, 1998 (the "Merger Agreement"), by and
between the Company, Snap-on Incorporated ("Snap-on") and Snap-on Pace
Company, a wholly-owned subsidiary of Snap-on (the "Purchaser"), the
Company modified certain existing agreements and entered into new
agreements with, among others, the named executive officers. These
agreements are briefly described below.
In April 1998, the Company and Mr. Dindorf entered into Amendment No. 1 to
the foregoing Change of Control Agreement. Pursuant to the amendment, Mr.
Dindorf will be entitled to receive $995,000 immediately upon a change of
control of the Company. The amendment also provided that in the event any
portion of the benefits under the Change of Control Agreement or under any
other agreement for Mr. Dindorf would constitute an "excess parachute
payment" for purposes of the Internal Revenue Code, benefits will be
reduced so that Mr. Dindorf will be entitled to receive $1 less than the
maximum amount which he could receive without becoming subject to the 20%
excise tax imposed by the Internal Revenue Code on certain excess
payments, or which the Company may pay without losing deductions under the
Internal Revenue Code. In connection with the execution of Amendment No.
1 to the Change of Control Agreement, the Company also established and
funded a trust in favor of Mr. Dindorf for the full amount payable under
the amended Change of Control Agreement.
Snap-on requested, as an inducement for Snap-on and the Purchaser to enter
into the Merger Agreement, that Mr. Dindorf enter into an Employment and
Consulting Agreement with Snap-on and the Company. Such agreement, which
was entered into on April 27, 1998, provides for Mr. Dindorf's employment
by the Company until December 31, 1998 and for Mr. Dindorf to serve as a
consultant thereafter until December 31, 2000. Mr. Dindorf is entitled to
a base salary of $25,000 per month through December 31, 1998 and
consulting fees at the annual rate of $250,000 for the year 1999 and at
the annual rate of $200,000 for the year 2000. Mr. Dindorf is also
entitled to certain fringe benefits. If there is a termination of Mr.
Dindorf's services under the Employment and Consulting Agreement by Mr.
Dindorf for "good reason" or by Snap-on other than for cause (as defined
in the agreement) or as a result of his death or disability, Mr. Dindorf
will be entitled to a severance payment equal to the aggregate of all
unpaid amounts he would have been entitled to receive under the agreement
as if he had continued in the employ of the Company and/or had continued
to provide consulting services to the Company for the remainder of the
employment and/or consulting terms, and he will continue to be entitled to
receive the insurance coverage provided to him and his dependents prior to
his termination for a certain period. For purposes of the Employment and
Consulting Agreement, Mr. Dindorf shall have "good reason" to terminate
his services thereunder if there is (i) a material breach of the agreement
by Snap-on, (ii) any reduction in his compensation, (iii) during the
employment term of the agreement, a material adverse change in his
assignment or of his responsibility, authority or duties, (iv) the
relocation of his principal place of employment or performance of
consulting services to a location outside of Waukesha, Milwaukee or
Kenosha Counties, Wisconsin or (v) Snap-on requires Mr. Dindorf to travel
to a materially greater extent than was required during the 180-day period
prior to the date of the agreement.
In April 1998, the Company also entered into Key Executive Employment and
Severance Agreements with certain officers of the Company, including
Messrs. Barthelme, Liegel, Koons and Russell, to provide these executives
with a measure of security against changes in their relationship with the
Company in the event of a change in control of the Company. The
agreements provide that each officer covered by the agreements is entitled
to benefits if, within one to two years (depending on which executive is
involved) after a change in control of the Company (as defined in the
agreements), the officer's employment is ended through (i) termination by
the Company, other than by reason of death or disability or for cause (as
defined in the agreements), or (ii) termination by the officer due to a
breach of the agreement by the Company, a significant change in the
officer's responsibilities, the relocation of the officer's principal
place of employment to a location more than 35 miles from his or her
present place of employment or the Company requires the officer to travel
to a materially greater extent than was required during the 180-day period
prior to the effective date of the agreement. The benefits provided under
each agreement are: (i) a cash termination payment of one to two times
(depending on which executive is involved) the sum of the executive
officer's annual salary and his or her highest annual bonus during the
three years before the termination or the effective date of the agreement
(or, if higher, the current year targeted bonus) and (ii) continuation for
up to two years of equivalent hospital, medical, dental, disability and
life insurance coverage as in effect at the time of termination. The
agreements also provide the foregoing benefits in connection with certain
terminations which are effected in anticipation of a change of control.
Each agreement provides that if any portion of the benefits under the
agreement or under any other agreement for the officer would constitute an
"excess parachute payment" for purposes of the Code, benefits will be
reduced so that the officer will be entitled to receive $1 less than the
maximum amount which he or she could receive without becoming subject to
the 20% excise tax imposed by the Code on certain excess payments, or
which the Company may pay without loss of deduction under the Code. The
acquisition of more than 25% of the shares of Common Stock pursuant to the
tender offer contemplated by the Merger Agreement will constitute a change
in control for purposes of the agreements.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Management
The following table sets forth as of March 27, 1998, the number
of shares of the Company's Common Stock beneficially owned by each
director, each of the executive officers named in the Summary Compensation
Table set forth below, and all of the directors and executive officers as
a group. Except as otherwise indicated in the footnotes, all of the
persons listed below have sole voting and investment power over the shares
of Common Stock identified as beneficially owned.
Amount and Nature
of Beneficial
Name of Beneficial Owner Ownership Percent of Class
J. L. Dindorf 96,528(1)(2) 3.3%
O. A. Friend 59,095 2.0%
J. S. Jones 21,173 *
M. J. McSweeney 7,534 *
D. J. Schuetz 21,911 *
D.L. Krause 6,379(3) *
J. P. Barthelme 11,165(2) *
R. D. Liegel 29,804(2)(4) 1.0
M. J. Koons 8,245(2)(5) *
J. V. Russell 6,700(2) *
All directors and executive
officers as a group (10 268,534(2) 9.2%
persons)
_______________
* Less than one percent.
(1) Includes 42,924 shares held with Mr. Dindorf's wife. Mr.
Dindorf shares voting and investment power over these shares.
(2) Includes the following shares subject to stock options that
are currently exercisable: Mr. Dindorf, 53,604; Mr. Barthelme, 10,721;
Mr. Liegel, 20,102; Mr. Koons, 6,700; Mr. Russell, 6,700; and all
directors and executive officers as a group, 97,827.
(3) All 6,379 shares held with Mr. Krause's wife. Mr. Krause
shares voting and investment power over these shares.
(4) Includes 1,104 shares held by Mr. Liegel's wife. Mr. Liegel
shares voting and investment power over these shares.
(5) Includes 735 shares held with Mr. Koons' wife. Mr. Koons
shares voting and investment power over these shares.
Other Beneficial Owners
The following table sets forth the number of shares of the
Company's Common Stock beneficially owned by the persons known to the
Company to own more than five percent (5%) of its outstanding Common Stock
as of December 31, 1997. The information is based on reports on Schedules
13G and 13D filed with the Securities and Exchange Commission or other
reliable information. The table indicates whether the person has sole or
shared investment and voting power with respect to such shares.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Sole Power Shared Power
Percent
Voting Investment Voting Investment Aggregate of Class
<S> <C> <C> <C> <C> <C> <C>
Athey Products Company (2)
1839 South Main Street
Wake Forest, NC 27587
And
-- -- 369,396 369,396 369,396 12.7%
Orton/McCullough Crane (2)
Company, Inc.
1211 West 22nd Street
Oak Brook, IL 60521
Mr. Marvin Schwartz(3) 44,100(4) 44,100(4) 0 229,690(4) 273,790(4) 9.4%
c/o Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158-3698
Wanger Asset Management, -- -- 208,372(6) 208,372(6) 208,372(6) 7.2%
L.P.(5)
Wanger Asset Management, Ltd.
Ralph Wanger
227 West Monroe
Suite 3000
Chicago, IL 60606
Acorn Investment Trust, -- -- 208,372(6) 208,372(6) 208,372(6) 7.2%
Series Designated Acorn Fund
227 West Monroe, Suite 3000
Chicago, IL 60606
Dimensional Fund Advisors 132,119 195,298 63,179 -- 195,298 6.7%
Inc.(7)(8)
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Mr. Luis Hernandez 156,623 156,623 -- -- 156,623 5.4%
3069 Misty Harbor
Las Vegas, NV 89117
________________
(1) For purposes of calculating the percent of class owned by such person
or group, the shares of Common Stock which may be acquired upon
conversion of such person's or group's Notes at the current
conversion price and the shares of Common Stock that may be acquired
upon the exercise of such person's or group's Option are deemed to be
outstanding.
(2) Athey Products Company ("Athey") and Orton/McCullough Crane Company,
Inc. ("Orton") are reported in the aggregate because they may be
regarded as a group for reporting purposes. John F. McCullough, the
principal shareholder and officer of Orton, is a director and the
owner of 39.71% of the voting stock of Athey. Of the 369,396 shares
of Common Stock for which the parties have reported as sharing voting
and investment power, Athey has reported holding 241,406 shares and
Orton has reported holding 127,990 shares.
(3) Mr. Schwartz is a principal in Neuberger & Berman, LLC, a registered
broker/dealer and investment advisor. All of the shares are held
individually by Mr. Schwartz and others. Neuberger & Berman has no
voting or investment power regarding any of the shares.
(4) Mr. Schwartz owns 44,100 shares for his personal account and has sole
voting and investment power over these shares. Mr. Schwartz is the
beneficial owner of 229,690 shares held in several accounts for the
benefit of his family by virtue of his shared investment power over
these shares.
(5) Wanger Asset Management, Ltd. is the sole general partner of Wanger
Asset Management, L.P. and Ralph Wanger is the principal shareholder
of Wagner Asset Management, Ltd.
(6) Wanger Asset Management, L.P. and Acorn Investment Trust, Series
Designated Acorn Fund share voting and investment power over 208,372
shares of Common Stock. Acorn Investment Trust, Series Designated
Acorn Fund is a registered investment company. Wanger Asset
Management, L.P. is the investment advisor of Acorn Investment Trust,
Series Designated Acorn Fund.
(7) The reported shares are held in the portfolios of advisory clients of
Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor. Dimensional disclaims beneficial ownership of
such shares.
(8) Persons who are officers of Dimensional also serve as officers of DFA
Investment Dimensions Group Inc. (the "Fund") and The DFA Investment
Trust Company (the "Trust"), each a registered open-end management
investment company. In their capacity as officers of the Fund and
the Trust, these persons vote 41,080 additional shares of Common
Stock which are owned by the Fund and 38,905 shares which are owned
by the Trust. Dimensional has sole dispositive power over such
shares and they are included under such column.
</TABLE>
Beneficial ownership of shares is reported in the foregoing
tables and footnotes in accordance with the beneficial ownership rules
promulgated by the Securities and Exchange Commission. The ownership
information set forth in the foregoing tables reflects the effects of the
Company's 5% stock dividend which was paid on January 23, 1998 to
shareholders of record on January 2, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 25, 1983, the Company acquired the business assets and
operations of the Winona Van Norman Division of Winvan, Inc. ("Winona Van
Norman"), from O. A. Friend. Mr. Friend was subsequently elected to the
Board. The Company is leasing Winona Van Norman's manufacturing facility
from Mr. Friend for annual rental payments of $198,988, adjusted every
year for inflation, and is subleasing a portion of the facility to a third
party. Pursuant to the terms of the lease, the Company is required to
purchase the facility from Mr. Friend for its fair market value on or
before June 30, 2002.
M. J. McSweeney, a director and Secretary of the Company, is a partner of
Foley & Lardner, attorneys, Milwaukee, Wisconsin. Foley & Lardner has
served as legal counsel to the Company for many years.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
amendment to this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated April 29, 1998
HEIN-WERNER CORPORATION
By: /s/ J. L. Dindorf
J. L. Dindorf
President and Chief Executive
Officer
