SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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
World Fuel Services 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: Not Applicable
2) Aggregate number of securities to which transaction applies:
Not Applicable
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: Not Applicable
4) Proposed maximum aggregate value of transaction:
Not Applicable
5) Total fee paid: Not Applicable
[ ] 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: Not Applicable
2) Form, Schedule or Registration Statement No.: Not Applicable
3) Filing Party: Not Applicable
4) Date Filed: Not Applicable
<PAGE>
WORLD FUEL SERVICES CORPORATION
700 South Royal Poinciana Blvd., Suite 800
Miami Springs, Florida 33166
--------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD August 17, 1998
--------------------------------
Miami Springs, Florida
July 3, 1998
Notice is hereby given that the Annual Meeting of Shareholders of WORLD FUEL
SERVICES CORPORATION, a Florida corporation (the "Company"), will be held on
August 17, 1998, at 10:00 a.m., local time, at the Company's auditorium, 700
South Royal Poinciana Boulevard, Seventh Floor, Miami Springs, Florida 33166,
for the following purposes:
1. To elect nine Directors of the Company.
2. To increase the number of shares of Common Stock authorized under
the Company's 1996 Employee Stock Option Plan from 750,000 shares to 1,250,000
shares.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
These matters are more fully discussed in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on June 29, 1998, as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the meeting.
The annual meeting for which this notice is given may be adjourned from time to
time without further notice other than announcement at the meeting or any
adjournment thereof. Any business for which notice is hereby given may be
transacted at any such adjourned meeting.
Whether or not you expect to be present at the meeting, please date, sign, and
promptly return the enclosed proxy, which is solicited by and on behalf of the
Board of Directors.
By Order of the Board of Directors
WORLD FUEL SERVICES CORPORATION
Ileana Garcia, Secretary
<PAGE>
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
<PAGE>
TABLE OF CONTENTS
PAGE
Introduction......................................................... 1
Outstanding Voting Stock............................................. 2
Costs of Solicitation................................................ 2
Election of Directors................................................ 2
Board of Directors................................................... 5
Compensation of Directors......................................... 5
Principal Shareholders and Security
Ownership of Management........................................... 6
Information Concerning Executive Officers............................ 9
Reporting Requirements for
Directors and Executive Officers............................... 10
Compensation of Officers............................................. 11
Summary Compensation Table........................................ 11
Stock Option Information.......................................... 12
Option Grants in Last Fiscal Year................................. 13
Options Exercised and Fiscal Year End
Option Values.................................................. 13
Non-Employee Directors Stock Options.............................. 14
Certain Employment Agreements..................................... 14
Compensation Committee Report on
Executive Compensation......................................... 16
Compensation Committee Interlocks and
Insider Participation.......................................... 18
Stock Performance Graph........................................... 18
Transactions with Management and Others.............................. 20
Board of Directors' Proposal Relating to the
1996 Employee Stock Option Plan................................... 21
Company's Relationship with Independent
Public Accountants................................................ 24
Proposals for the 1999 Annual Meeting................................ 24
Other Matters........................................................ 24
-i-
<PAGE>
PROXY STATEMENT
WORLD FUEL SERVICES CORPORATION
700 South Royal Poinciana Blvd., Suite 800
Miami Springs, Florida 33166
--------------------------------
ANNUAL MEETING OF SHAREHOLDERS
to be held on August 17, 1998
INTRODUCTION
This proxy statement is furnished to the shareholders of WORLD
FUEL SERVICES CORPORATION, a Florida corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
the Annual Meeting of Shareholders (the "Annual Meeting") to be held at the
place and time and for the purposes set forth in the attached Notice of Meeting.
This Proxy Statement and the accompanying proxy are first being
sent to shareholders on or about July 3, 1998.
Pursuant to the By-Laws of the Company, the Board of Directors
has ordered the Annual Meeting of Shareholders to be held on August 17, 1998,
and has fixed the close of business on June 29, 1998, as the record date (the
"Record Date") for the determination of shareholders entitled to receive notice
of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof.
Proxies in the accompanying form, properly executed, duly
returned to the Company and not revoked, will be voted in the manner specified.
If no instructions are specified with respect to any particular matter to be
acted upon, proxies will be voted in favor thereof. Returning a signed proxy
will not affect a shareholder's right to attend the Annual Meeting and to vote
in person, since proxies are revocable. A proxy for the Annual Meeting may be
revoked at any time prior to its use by submission of a later dated proxy, by
delivery of written notice of revocation to the President of the Company, or by
voting in person at the Annual Meeting. Presence at the Annual Meeting does not
of itself revoke a proxy.
The Annual Report of the Company for the fiscal year ended March
31, 1998, including financial statements, is being mailed to each shareholder
together with this Proxy Statement.
<PAGE>
OUTSTANDING VOTING STOCK
On June 5, 1998, the Company had 12,500,474 outstanding shares of
common stock, par value $.01 per share (the "Common Stock"), which constitute
the only class of voting securities of the Company. The presence, in person or
by properly executed proxy, of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
the meeting. Each holder of Common Stock on the Record Date is entitled to cast
one vote per share, exercisable in person or by proxy, at all meetings of
shareholders. Directors are elected by a plurality vote of the shares of Common
Stock present in person or represented by proxy at the Annual Meeting. All other
matters to be considered at the Annual Meeting shall be approved if the votes
cast in favor of the action exceed the votes cast opposing the action.
As of June 5, 1998, the nine nominees for Director of the Company
beneficially owned a total of 1,346,674 shares of Common Stock, or approximately
10.8% of the shares of Common Stock outstanding. The nominees have informed the
Company that they intend to vote their shares of Common Stock to elect
themselves to the Board of Directors. See "Principal Shareholders and Security
Ownership of Management."
COSTS OF SOLICITATION
The entire cost of soliciting proxies for the Annual Meeting will
be borne by the Company. Solicitation of proxies may be made through personal
calls upon, or telephone or telegraphic communications with, shareholders or
their representatives by officers and other employees of the Company, who will
receive no additional compensation therefor.
ELECTION OF DIRECTORS
Nine individuals have been nominated to serve as Directors for
the ensuing year and until their successors shall have been duly elected and
qualified. The persons named in the accompanying proxy have advised management
that unless authority is withheld in the proxy, they intend to vote for the
election of the individuals listed in the table on the following page.
Management does not contemplate that any of the nominees named in the table will
be unable, or will decline, to serve; however, if any of the nominees is unable
to serve, or declines to serve, the persons named in the accompanying proxy may
vote for another person, or persons, in their discretion. The following table
sets forth certain information with respect to each nominee for election to the
Board of Directors. All of the nominees currently serve as Directors of the
Company. A summary of the background and experience of each nominee is set forth
in the paragraphs following the table.
-2-
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
NAME AND POSITION AGE AT BECAME DIRECTOR
WITH THE COMPANY MARCH 31, 1998 OF THE COMPANY
- ----------------- -------------- --------------
<S> <C> <C>
Ralph R. Weiser, 72 1984
Chairman of the Board
of Directors
Jerrold Blair, 60 1985
Director and President
Ralph R. Feuerring, 75 1988
Director and Member
of Audit Committee
John R. Benbow, 66 1989
Director and Chairman
of Audit Committee and
Compensation Committee
Phillip S. Bradley, 59 1990
Director and President of
Advance Petroleum, Inc.
Myles Klein, 59 1995
Director and Member
of Audit Committee and
Compensation Committee
Michael J. Kasbar, 41 1995
Director and Executive Vice
President of the Company,
and Chief Executive Officer
of Trans-Tec Services, Inc.
Paul H. Stebbins, 41 1995
Director and Executive Vice
President of the Company,
and Chief Operating Officer
of Trans-Tec Services, Inc.
Luis R. Tinoco 57 1997
Director
- --------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
RALPH R. WEISER has been employed as Chairman of the Board of Directors of the
Company since its organization in July 1984.
JERROLD BLAIR has served as President and a Director of the Company since
January 1985.
RALPH R. FEUERRING, a Director of the Company, has served as a Director and
Chairman of the finance committee of American Premier, Inc., a mineral
processing and refractory business, since 1991. Mr. Feuerring has also served as
the President of Ferro Metal & Chemical Corp., a mineral and alloy trading
company, since 1949. From 1960 to 1991, Mr. Feuerring served as the President
and Chief Executive Officer of Ralstan Trading and Development Corporation, a
mineral processing company. Ralstan Trading and Development Corporation was
merged into American Premier, Inc. in 1991.
JOHN R. BENBOW, a Director of the Company, has served as President of Benbow &
Associates, Inc., a real estate development firm located in Coral Gables,
Florida, since June 1988. From December 1986 to May 1988, he was employed as
President of Weiner, Kane & Benbow, Inc., an investment banking and stock
brokerage firm located in Miami, Florida. From May 1983 to November 1986, Mr.
Benbow was employed as President of Florida National Bank, formerly a commercial
bank located in Miami, Florida.
PHILLIP S. BRADLEY has served as a Director of the Company since 1990, and as
President of Advance Petroleum, Inc. d/b/a World Fuel Services of FL ("WFSFL"),
a wholly-owned subsidiary of the Company, since January 1988. Mr. Bradley was a
co-founder of WFSFL and served as Vice President from its organization in 1983
until January 1988. From 1967 to 1982, Mr. Bradley was an airline captain for
Braniff International Airways and Chairman of the Braniff Airline Pilots
Association.
MYLES KLEIN has served as a Director of the Company since February 1995. He has
been a partner in the accounting firm of Klein & Barreto, P.A., in Miami,
Florida, since 1985. From 1971 until 1985, Mr. Klein was a partner in the
international accounting and auditing firm of Grant Thornton, eventually
becoming the partner in charge of the tax department for Grant Thornton's South
Florida offices.
MICHAEL J. KASBAR has served as a Director and an Officer of the Company since
June 1995 and has served as Chairman and Chief Executive Officer of Trans-Tec
Services, Inc. ("Trans-Tec Delaware"), a wholly owned subsidiary of the Company,
since January 1995. From September 1985 to December 1994, Mr. Kasbar was an
officer, shareholder, and director of Trans-Tec Services, Inc., a New York
corporation ("Trans-Tec New York") and its affiliated companies. On January 3,
1995, Trans-Tec Delaware purchased substantially all of the assets of Trans-Tec
New York and the outstanding stock of its affiliate Trans-Tec Services (U.K.)
Ltd. Prior to founding Trans-Tec New York, Mr. Kasbar founded and worked for
Gray Bunkering Services, Inc. from February 1983 through August 1985.
PAUL H. STEBBINS has served as a Director and an Officer of the Company since
June 1995 and has served as President and Chief Operating Officer of Trans-Tec
Delaware since January 1995.
-4-
<PAGE>
From September 1985 to December 1994, Mr. Stebbins was an officer, shareholder,
and director of Trans-Tec New York and its affiliated companies. Prior to
founding Trans-Tec New York, Mr. Stebbins was employed by Gray Bunkering
Services, Inc. from October 1983 to September 1985 as a bunker broker.
LUIS R. TINOCO, a Director of the Company since June 17, 1997, is an attorney
and has served as a partner of Lara, Lopez, Matamoros, Rodriguez and Tinoco
("Lara, Lopez"), a law firm in Costa Rica, since 1971. He has also served as an
Ambassador of Costa Rica to Great Britain and on several United Nations
committees.
BOARD OF DIRECTORS
During the fiscal year ended March 31, 1998, the Company's Board
of Directors held seven (7) formal meetings. The Board of Directors has two
committees, the Audit Committee and the Compensation Committee. All of the
Directors attended at least 75% of the meetings of the Board of Directors and of
the committees on which they served, except for Mr. Ralph Weiser and Mr. Paul
Stebbins, who attended 70% of the Board of Directors' meetings.
The Audit Committee consists of John R. Benbow, Chairman, Ralph
R. Feuerring and Myles Klein. The Audit Committee held six (6) meetings during
the fiscal year ended March 31, 1998. The Audit Committee performs the following
principal functions: recommends to the Board of Directors the engagement of
independent auditors for the ensuing year; reviews the scope and budget for the
annual audit; reviews with independent auditors the results of the audit
engagement, including review of the financial statements and the management
letter; and reviews the scope of, and compliance with, the Company's internal
controls.
The Compensation Committee consisted of John R. Benbow, Chairman,
and Myles Klein. During the fiscal year ended March 31, 1998, the Compensation
Committee held four (4) meetings. The Compensation Committee reviews and
recommends to the Board of Directors the annual salary, bonus, stock options and
other benefits of the Company's senior executives, reviews new and existing
compensation programs, reviews and makes recommendations to the Board of
Directors regarding management perquisites, administers stock option and
incentive compensation plans, and administers and makes recommendations to the
Board of Directors regarding performance goals for executive compensation plans.
COMPENSATION OF DIRECTORS
Directors who are not Company employees are generally members of
at least one Committee of the Board of Directors and receive a monthly fee of
$1,667, except for the Chairman of the Audit and Compensation Committees who
receives $2,292 per month. The Directors of the Company who are employed by the
Company do not receive additional compensation for serving as Directors.
-5-
<PAGE>
Pursuant to the 1993 Non-Employee Directors Stock Option Plan (the
"1993 Plan"), each Director who is not employed by the Company receives an
option to purchase 2,500 shares of Common Stock each year, upon his re-election
to the Board of Directors. The exercise price per share is the closing market
price of the Common Stock on the date of the Company's Annual Meeting, which is
the date these options are granted each year. To further promote Director stock
ownership, the Board of Directors has adopted a plan pursuant to which the
Company would issue to each non-employee Director 500 shares of the Common Stock
(the "Stock Grant") each year, upon his or her reelection to the Board of
Directors, at no cost to the Director. The shares would vest immediately, but
would be subject to resale restrictions imposed by federal securities laws.
Under existing federal securities laws, after one year, directors would be able
to resell the shares pursuant to Rule 144. The Stock Grants would be in addition
to, and not in lieu of, options granted under the 1993 Plan. The first Stock
Grants will be made immediately after the Annual Meeting.
Luis R. Tinoco, a Director of the Company, also received a
monthly fee of $1,500 for his service as a Director of World Fuel International,
a subsidiary of the Company. In addition, Mr. Tinoco, individually and as a
partner of the law firm of Lara, Lopez, received $61,401 for the fiscal year
ended March 31, 1998 for legal services rendered to the Company's subsidiaries.
During the fiscal year ended March 31, 1998, the Company made no
other payments to Directors with respect to participation on the Board of
Directors or Board Committees or with respect to special assignments. See
"Compensation of Officers" and "Transactions with Management and Others."
PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of June 5, 1998, the number of
shares of Common Stock of the Company owned beneficially by each nominee for
Director of the Company, the five most highly compensated executive officers of
the Company, and all nominees and executive officers of the Company as a group.
The table also shows the name and address of each person who is known to the
Company to be the beneficial owner of more than 5% of the outstanding Common
Stock of the Company. Except as shown in the table, no other person is known by
the Company to own beneficially more than 5% of the outstanding Common Stock of
the Company. Unless otherwise stated, all shares are held with sole dispositive
and voting power.
-6-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP OF CLASS
- ---------------- ----------------- --------
<S> <C> <C>
Neumeier Investment Counsel 1,605,450 (1) 12.8%
26435 Carmel Rancho Blvd.
Carmel, CA 93923
FMR Corp. 1,251,206 (2) 10.0%
82 Devonshire Street
Boston, MA 02109
The Prudential Insurance Company of America 725,100 (3) 5.8%
751 Broad Street
Newark, New Jersey 07102
Jerrold Blair 724,580 (4) 5.8%
c/o World Fuel Services Corporation
700 South Royal Poinciana
Blvd., Suite 800
Miami Springs, FL 33166
Ralph R. Weiser 217,742 (5) 1.7%
Ralph R. Feuerring 40,500 (6) * (7)
John R. Benbow 11,475 (8) * (7)
Phillip S. Bradley 0 0
Myles Klein 16,875 (9) * (7)
Michael Kasbar 170,268 (10) 1.4%
Paul Stebbins 161,484 (11) 1.3%
Michael Clementi 0 0
Luis R. Tinoco 3,750 (12) *
All Executive Officers and
Nominees for Director as a
Group (13 persons) 1,441,674 (13) 11.5%
- ------------------
</TABLE>
-7-
<PAGE>
(1) Based on information disclosed, as of December 31, 1997, in a Schedule
13G filed with the Securities and Exchange Commission (the "SEC").
Neumeier Investment Counsel ("Neumeier"), its subsidiaries and
affiliates, have sole voting power with respect to 832,850 shares and
sole dispositive power with respect to 1,605,450 shares. Neumeier
shares voting power and dispositive power with respect to 0 shares.
(2) Based on information disclosed, as of December 31, 1997, in a Schedule
13G filed with the SEC. FMR Corp. ("FMR"), its subsidiaries and
affiliates, have sole dispositive power with respect to 1,251,206
shares. FMR, its subsidiaries and affiliates, have sole voting power
with respect to 0 shares. Fidelity Low-Priced Stock Fund, an investment
company registered under the Investment Company Act of 1940 and
affiliated with FMR, owned 1,216,206 of these shares. FMR shares voting
power and dispositive power with respect to 0 shares.
(3) Based on information disclosed, as of December 31, 1997, in a Schedule
13G filed with the SEC. The Prudential Insurance Company of America
("Prudential"), its subsidiaries and affiliates, have sole voting power
and sole dispositive power with respect to 166,500 shares. Prudential
shares voting power and dispositive power with respect to 558,600
shares.
(4) Includes 7,438 shares owned solely by Mr. Blair's wife and 112,741
shares which may be purchased by Mr. Blair pursuant to options which
are exercisable within the next sixty days.
(5) Includes 112,742 shares which may be purchased by Mr. Weiser pursuant
to options which are exercisable within the next sixty days.
(6) Includes 3,750 shares which may be purchased by Mr. Feuerring pursuant
to options which are exercisable within the next sixty days.
(7) Indicates ownership of less than 1% of the outstanding Common Stock.
(8) Includes 11,250 shares which may be purchased by Mr. Benbow pursuant to
options which are exercisable within the next sixty days.
(9) Consists of 16,875 shares which may be purchased by Mr. Klein pursuant
to options which are exercisable within the next sixty days.
(10) Includes 56,250 shares which may be purchased by Mr. Kasbar pursuant to
options which are exercisable within the next sixty days.
(11) Includes 12,705 shares which may be purchased by Mr. Stebbins pursuant
to options which are exercisable within the next sixty days.
(12) Includes 3,750 shares which may be purchased by Mr. Tinoco pursuant to
options which are exercisable within the next sixty days.
(13) Includes 401,223 shares which may be purchased by executive officers
and Directors of the Company pursuant to options granted by the Company
from January 3, 1995 through August 18, 1997. These options are
exercisable within the next sixty days.
-8-
<PAGE>
INFORMATION CONCERNING EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Company and its principal subsidiaries. A summary of
the background and experience of each executive officer, other than Messrs.
Weiser, Blair, Bradley, Kasbar and Stebbins is set forth in the paragraphs
following the table. The background and experience of Messrs. Weiser, Blair,
Bradley, Kasbar and Stebbins are described in the section captioned "Election of
Directors." All executive officers serve at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
NAME AND POSITION AGE AT YEAR FIRST BECAME
WITH THE COMPANY MARCH 31, 1998 EXECUTIVE OFFICER
- ----------------- -------------- -----------------
<S> <C> <C>
Ralph R. Weiser, 72 1984
Chairman of the Board
Jerrold Blair, President 60 1985
Phillip S. Bradley, 59 1986
President of WFSFL
Robert S. Tocci, 44 1988
Executive Vice President
Carlos A. Abaunza, 38 1989
Chief Financial Officer and
Treasurer
Raymond A. Rossman, 58 1991
Chairman of World Fuel
Services, Inc. and Baseops
International, Inc.
Michael Clementi, 36 1998
President of World Fuel
Services, Inc. and Managing
Director of World Fuel
Services Ltd.
Michael J. Kasbar, Executive 41 1995
Vice President of the
Company and Chief Executive
Officer of Trans-Tec
Services, Inc.
-9-
<PAGE>
Paul H. Stebbins, Executive 41 1995
Vice President of the Company
and Chief Operating Officer
of Trans-Tec Services, Inc.
- -----------------------------------------------------------------------------------------------------
</TABLE>
ROBERT S. TOCCI has served as Executive Vice President since April 1995 and
served as Senior Vice President and Chief Financial Officer of the Company from
April 1988 through April 1995. From November 1988 through May 1989, he also
served as Treasurer of the Company.
CARLOS A. ABAUNZA has served as Chief Financial Officer of the Company since
April 1995, and as Treasurer since June 1989. From June 1988 through April 1995
he served as Controller of the Company.
RAYMOND A. ROSSMAN has served as Chairman of World Fuel Services, Inc. and
Baseops International, Inc., both subsidiaries of the Company, since April, 1998
and May, 1998, respectively. Mr. Rossman served as President of World Fuel
Services, Inc., from February 1995 through March 1998. He served as Senior
Vice-President - International Sales and Supply of World Fuel Services, Inc.
from December 1991 until February 1995. From 1983 to 1991, Mr. Rossman served as
General Manager - Fuel & Energy for Pan American World Airways.
MICHAEL CLEMENTI has served as President of World Fuel Services, Inc. and
Managing Director of World Fuel Services Ltd., both subsidiaries of the Company,
since April 1998 and May 1995, respectively. From August 1994 through March
1998, he served as Senior Vice President of World Fuel Services, Inc. From
December 1991 through July 1994, he served as Vice President of World Fuel
Services, Inc.
REPORTING REQUIREMENTS FOR DIRECTORS AND EXECUTIVE OFFICERS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the Securities and Exchange Commission
and the New York Stock Exchange, Inc., reports of ownership and changes in
ownership of common stock and other equity securities of the Company. The
Company believes that, during the fiscal year ended March 31, 1998, all filings
required of its officers and directors were made on a timely basis.
-10-
<PAGE>
COMPENSATION OF OFFICERS
The following table sets forth the annual and long-term
compensation which the Company and its subsidiaries paid to those persons who
were, on March 31, 1998, the chief executive officer and the five most highly
compensated executive officers of the Company, for services rendered in each of
the fiscal years ended March 31, 1998, 1997, and 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- -------------
NAME AND FISCAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- ------------------ ------ ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ralph R. Weiser, 1998 $262,000 $738,000 0 $303,452 (1)
Chairman of the 1997 262,000 738,000 121,500 (2) 143,585 (1)
Board of Directors 1996 262,000 737,999 0 85,400 (1)
Jerrold Blair, 1998 262,000 738,000 0 303,452 (1)
President of the 1997 262,000 738,000 121,500 (2) 143,585 (1)
Company 1996 262,000 737,999 0 85,400 (1)
Phillip S. Bradley, 1998 512,000 0 0 6,900 (3)
President of 1997 474,500 100,000 0 6,900 (3)
WFSFL 1996 399,500 75,000 0 6,900 (3)
Michael Clementi, 1998 184,333 318,866 0 0
President of World 1997 156,000 236,111 0 0
Fuel Services, Inc. 1996 141,000 69,123 0 0
Michael Kasbar, 1998 213,900 110,346 37,500 (4) 0
Chief Executive Officer 1997 188,450 67,377 0 0
of Trans-Tec Services, 1996 163,450 0 0 0
Inc.
Paul Stebbins, 1998 213,900 110,346 37,500 (4) 0
Chief Operating Officer 1997 188,450 67,377 0 0
of Trans-Tec Services, 1996 163,450 0 0 0
Inc.
</TABLE>
- ----------------------------
(1) This amount represents a portion of the executive's cash compensation
which has been deferred pursuant to the terms of his employment
agreement. See "Certain Employment Agreements," below.
(2) On August 28, 1996, the Company granted to each of Ralph R. Weiser and
Jerrold Blair options to purchase 121,500 shares of the Company's
Common Stock. The options
-11-
<PAGE>
granted to each of these executives consisted of 26,277 Incentive Stock
Options ("ISOs") which vest at the rate of 8,759 shares per year for
three years commencing August 28, 1997, and 95,223 options which do not
qualify as ISOs ("NSOs") which vest August 28, 1998. The options
granted to Messrs. Weiser and Blair were granted pursuant to the 1996
Stock Option Plan, described elsewhere in this Proxy Statement. This
table does not include the May 18, 1998 awards to each of Messrs.
Weiser and Blair of options to purchase 100,000 shares of the Common
Stock, at an exercise price of $20.25 per share (the closing price on
May 18, 1998).
(3) This amount represents premiums paid by the Company on life insurance
for Mr. Bradley where the Company is not the beneficiary.
(4) On January 1, 1998, the Company granted to each of Michael Kasbar and
Paul Stebbins options to purchase 37,500 shares of the Company's Common
Stock. The options granted to each of these executives consisted of
14,280 Incentive Stock Options ("ISOs") which vest at the rate of 4,760
shares per year for three years commencing January 1, 1999, and 23,220
options which do not qualify as ISOs ("NSOs") which vest January 1,
2000. The options granted to Messrs. Kasbar and Stebbins were granted
pursuant to the 1996 Stock Option Plan, described elsewhere in this
Proxy Statement.
STOCK OPTION INFORMATION
In 1997, the Company adopted the 1996 Employee Stock Option Plan
(the "1996 Plan") under the terms of which options to purchase Common Stock of
the Company are awarded to employees of the Company. The purpose of the 1996
Plan is to help attract and retain superior personnel for positions of
substantial responsibility with the Company and to provide an additional
incentive to officers and other key employees of the Company upon whose
judgment, initiative and efforts the success and development of the Company's
business depends. In addition to options issued pursuant to the 1996 Plan, the
Company has stock options outstanding pursuant to the 1986 Employee Stock Option
Plan, which expired in January 1996, and non-qualified stock options granted
prior to the adoption of the 1996 Plan.
-12-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth certain information pertaining to stock
options granted to the named executive officers during the fiscal year ended
March 31, 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR OPTION
UNDERLYING OPTIONS TERM
OPTIONS GRANTED IN EXERCISE
NAME GRANTED FISCAL YEAR PRICE EXPIRATION 5% 10%
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Paul Stebbins 37,500 38% $21.00 January 1, 2008 $495,255 $1,255,072
Michael Kasbar 37,500 38% 21.00 January 1, 2008 495,255 1,255,072
</TABLE>
OPTIONS EXERCISED AND FISCAL YEAR END OPTION VALUES
The table below sets forth certain information pertaining to
stock options exercised by the named executive officers during the fiscal year
ended March 31, 1998, and the options held by the named executive officers as of
March 31, 1998.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SHARES UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT FISCAL OPTIONS AT FISCAL
NAME EXERCISE REALIZED (1) YEAR-END YEAR-END(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Ralph R. Weiser (3) 0 0 8,759 112,741 $92,699 $1,193,172
Jerrold Blair (3) 0 0 8,759 112,741 92,699 1,193,172
Phillip S. Bradley 0 0 0 0 0 0
Michael Clementi 0 0 0 0 0 0
Michael Kasbar 0 0 56,250 37,500 850,000 37,500
Paul Stebbins 43,545 565,480 12,705 37,500 191,987 37,500
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The value realized upon exercise consists of the difference between (i) the
closing price of the Common Stock on the New York Stock Exchange ("NYSE")
on the date of exercise, and (ii) the option exercise price.
(2) Based on a fair market value of $22.00 per share for the Common Stock, as
determined by using the closing price on the NYSE on March 31, 1998.
(3) This table does not include the May 18, 1998 awards to each of Messrs.
Weiser and Blair of options to purchase 100,000 shares of the Common Stock,
at an exercise price of $20.25 per share (the closing price on May 18,
1998).
-13-
<PAGE>
NON-EMPLOYEE DIRECTORS STOCK OPTIONS
The 1993 Plan provides for a grant of an option to purchase 2,500
shares of Common Stock to each member of the Board of Directors who joins the
Board of Directors as a non-employee Director (a "Non-Employee Director"), and
further provides an additional grant of an option to purchase 2,500 shares of
Common Stock upon re-election at each Annual Meeting. All options granted under
the 1993 Plan fully vest and are exercisable twelve months after the date of
grant. Under the 1993 Plan, each grant of options to a Non-Employee Director
remains exercisable for a term of five years from the grant date so long as such
Non-Employee Director remains a member of the Board of Directors, and are
exercisable at a price per share equal to the closing bid quotation for the
Common Stock on the NYSE at the end of the day preceding the grant date. In
accordance with the 1993 Plan, on August 18, 1997, Messrs. Feuerring, Benbow,
Klein and Tinoco each received grants of options to purchase 2,500 shares of
Common Stock at the exercise price of $22.3125 per share.
To further promote Director stock ownership, the Board of
Directors has adopted a plan pursuant to which each non-employee Director would
receive a Stock Grant of 500 shares of Common Stock each year, upon his or her
reelection to the Board of Directors, at no cost to the Director. The shares
would vest immediately, but would be subject to resale restrictions imposed by
federal securities laws. Under existing federal securities laws, after one year,
directors would be able to resell the shares pursuant to Rule 144. The Stock
Grants would be in addition to, and not in lieu of, options granted under the
1993 Plan. The first Stock Grants will be made immediately after the Annual
Meeting.
CERTAIN EMPLOYMENT AGREEMENTS
The Company's employment agreements with Messrs. Weiser and Blair
expire on March 31, 2002. Each agreement, as amended, provides for an annual
salary of $250,000, and annual bonus equal to 5% of the pre-tax income of the
Company in excess of $2,000,000.
The employment agreements limit the amount of each executive's
annual salary and bonus to the maximum amount which may be deducted under the
Internal Revenue Code (currently $1,000,000 per year). In March 1996, the
employment agreements were amended to provide that if in any year the cash
compensation payable to each executive exceeds the $1,000,000 limit described
above, the excess will be deferred and paid to the executive in a future year
when such compensation can be deducted by the Company for federal income tax
purposes. For the fiscal year ended March 31, 1998, the Company deferred
$324,000 in compensation and interest accrued for each executive. The
accumulated deferred balances, including deferred interest, pursuant to the
employment agreements amounted to $560,500 for each executive as of March 31,
1998, and bear interest at the prime rate until paid to the executives.
-14-
<PAGE>
The employment agreements also provide that if the Company
terminates the employment of the executive for reasons other than death,
disability, or cause, or, if the executive terminates his employment with the
Company for good reason, including under certain circumstances, a change in
control of the Company, the Company will pay the executive compensation of up to
three times his average salary and bonus during the five year period preceding
his termination.
The employment agreements with Messrs. Weiser and Blair provide
that, upon expiration or termination of such agreements for any reason, the
executive shall not solicit or transact business with the Company's suppliers,
sales representatives or customers, and shall not compete with the Company, for
a period of three years following the date of expiration or termination, in the
states of Florida, Louisiana, Georgia, Delaware, Pennsylvania, New York,
California, Virginia, New Jersey, or Maryland, or any other state where the
Company collects or sells used oil, or in Singapore, Greece, South Korea,
England or Costa Rica, or any airport or seaport anywhere in the world that is
or has been serviced by the Company or its affiliates at any time since January
1, 1994.
The Company employs Phillip S. Bradley, President of WFSFL and a
Director of the Company, pursuant to an employment agreement which expires on
June 30, 2000. The agreement also provides that Mr. Bradley will serve as a
consultant to the Company from July 1, 2000 to June 30, 2007. Effective July 1,
1996, Mr. Bradley receives a salary of $500,000 per year. While he serves as a
consultant to the Company, Mr. Bradley will receive annual consulting fees of
$100,000 per year plus certain insurance benefits. The agreement prohibits Mr.
Bradley from competing with the Company's aviation fuel business for a period of
five years following the termination of his employment or consulting agreement
for any reason.
The Company employs Michael Clementi, President of World Fuel
Services, Inc. and Managing Director of World Fuel Services Ltd. pursuant to an
employment agreement which expires on December 31, 1998. The agreement provides
for annual base salary of $196,000 and a quarterly bonus of 7.5% of Mr.
Clementi's adjusted gross profit above $2,000,000, plus 5% of the pre-tax profit
generated by the World Fuel Services Ltd. staff under Mr. Clementi's direction,
plus 3.0% of the adjusted gross profit of certain U.S.A. sales staff under the
direction of Mr. Clementi. The agreement prohibits Mr. Clementi from competing
in the Company's business for a period of six months following the termination
of his employment with the Company.
On June 10, 1997, Messrs. Kasbar and Stebbins signed employment
agreements with the Company, effective January 1, 1998, under the terms of which
each will be employed through December 31, 2002, at base salaries of $225,000,
$250,000, $275,000, $300,000 and $325,000 for each of the years ending December
31, 1998 through 2002, respectively. In addition, on January 1, 1998, the
Company issued each executive options to purchase 37,500 shares of the Company's
common stock, par value $0.01 per share, at an exercise price equal to the
closing price of such common stock on the New York Stock Exchange on such date.
On January 1, 1999, the Company is obligated to issue to each executive options
to purchase an additional 37,500 shares of the Company's common stock at an
exercise price equal to the closing price of such common stock on the New York
Stock Exchange on such date. Each is also entitled to receive an annual bonus
equal to 5% of the pre-tax profits (adjusted for certain acquisition related
charges) of the Company's marine fuel division in excess of $4,000,000 during
each year from 1998 through 2002. The employment agreements prohibit each of
Messrs. Kasbar and Stebbins from competing with the
-15-
<PAGE>
Company during a period of two years following the termination of his employment
(for any reason), in the areas where the Company conducts its business.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Compensation Committee of the Board of Directors
administers the Company's executive compensation program to assure that
executive compensation is linked to the Company's goals, performance and return
to its shareholders. The executive compensation program is designed to attract
outstanding executives to the Company's key management positions and motivate
such individuals to work toward increasing shareholder value by offering
competitive base salaries, performance-based bonuses, and equity interests in
the Company through stock options. The Compensation Committee reviews and
recommends to the Board of Directors the total compensation for the Company's
two most senior executives, and reviews senior management's recommendations
regarding the compensation of other executives of the Company and its
subsidiaries.
In determining the compensation of the Company's executive
officers, the Compensation Committee reviews a number of factors including: the
Company's performance and the achievement of its internal strategic objectives,
business conditions in general and in the Company's lines of business during the
year, the Company's performance during the year in light of such conditions, and
the market compensation for executives of similar background and experience. The
Compensation Committee also examines the performance of the specific executive
officer under consideration and the business area of the Company for which such
executive officer is responsible. The Company's executive compensation program
consists of three components: base salary, bonus and stock options.
In evaluating the compensation levels of these executives, the
Compensation Committee has found that there are virtually no other public
companies with which close comparisons to the Company can be made. Therefore,
the Compensation Committee reviews a variety of sources for comparison purposes,
including: (i) salary data from most of the companies comprising the Standard
and Poor's Transportation Index as well as selected other companies; and (ii)
published salary surveys for national as well as Florida-based companies with
comparable gross revenues. In the end, the Compensation Committee's
recommendations must of necessity involve a considerable amount of subjectivity,
judgment and discretion.
BASE SALARY. The base salary offered to executive officers by the
Company is intended to be competitive in relation to industry standards and
corporations of comparable size and complexity. Generally, the executive's
salary reflects his job experience and responsibility. The Company has
employment contracts with each of its executive officers, and these agreements
provide for different levels of base salary. The employment agreements generally
extend for terms of three to five years, enabling the Company to stabilize the
levels of executive salaries.
BONUS COMPENSATION. Certain executive officers are eligible for
performance bonuses based upon the Company's achievement of certain goals. These
performance-based bonuses are
-16-
<PAGE>
typically determined as a percentage of the pre-tax earnings in excess of
predetermined goals for which the executive is responsible. With respect to the
Company's senior executives (including the Chairman and President), the
percentage of pre-tax earnings and the predetermined goals are established
within the officer's employment contract. In the event that an employment
contract does not specify the bonus formula, the Chairman of the Board and the
President of the Company determine the bonus.
STOCK OPTIONS. The Company offers stock options to its executive
officers in order to align the interests of the executive officers with those of
the shareholders, and to encourage the executive officers to become substantial
shareholders. Stock options are awarded at market price. For this reason, the
value of the stock options increases according to the increase in the Company's
stock price. Because no benefit is received by the option-holder unless the
Company's stock price performs favorably, stock option awards provide incentives
for directors and officers to enhance long-term Company performance, as
reflected in stock price appreciation, thereby increasing shareholder value.
Grants to executive officers are dependent upon many factors, including the
individual's prior and expected performance, effect upon the Company, level of
position and responsibility, and potential for promotion. The Company grants
stock options upon favorable individual employee evaluations, which are
performed periodically. In order for an executive officer to exercise the stock
option, the officer must remain in the employ of the Company at the time the
stock options vest, which is usually one to three years after the option is
awarded. For this reason, the award of stock options also provides additional
incentive to executive officers to remain in the service of the Company.
In April, 1997, the Compensation Committee amended and extended
the employment agreements of Ralph Weiser and Jerrold Blair. In June, 1997 the
Compensation Committee approved new employment agreements for Michael Kasbar and
Paul Stebbins. In May, 1998, the Compensation Committee awarded an option to
purchase 100,000 shares of the Company's Common Stock to each of Ralph Weiser
and Jerrold Blair pursuant to the 1996 Employee Stock Option Plan. The
Compensation Committee also approved an increase in the number of shares
authorized under the 1996 Employee Stock Option Plan from 750,000 to 1,250,000,
subject to shareholder approval at the Annual Meeting. During the 1998 fiscal
year the Compensation Committee awarded stock options to certain employees in
recognition of the services performed by those employees on the Company's
behalf.
John R. Benbow, Chairman
Myles Klein
-17-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served as members of the Compensation
Committee of the Board of Directors during the year ended March 31, 1998: Myles
Klein and John R. Benbow. None of the members of the Compensation Committee were
employees of the Company during the year ended March 31, 1998.
STOCK PERFORMANCE GRAPH
In accordance with Securities and Exchange Commission regulations,
the following graph compares the cumulative total shareholder return to the
Company's shareholders, during the five year period ended March 31, 1998, to the
Russell 2000 Index and the Standard & Poor's Transportation Index.
-18-
<PAGE>
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Return (*)
Among World Fuel Services Corporation, The Russell 2000 Index and
the Standard & Poor's Transportation Index
Graphic Omitted
================================================================================================================================
3/93 3/94 3/95 3/96 3/97 3/98
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
World Fuel Services Corporation 100 121 157 245 260 489
- --------------------------------------------------------------------------------------------------------------------------------
The Russell 2000 Index 100 111 117 151 159 226
- --------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's Transportation Index 100 106 110 141 154 216
================================================================================================================================
</TABLE>
* Assumes that the value of the investment in the Company and each index
was $100 on March 31, 1993, and that all dividends are reinvested.
-19-
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Two of the Company's subsidiaries lease premises in New Orleans,
Louisiana and Plant City, Florida from a trust established for the benefit of
the children of Jerrold Blair, the President and a Director of the Company. The
base annual rent under each lease is $50,500 per year, which amount will
increase by 5% annually. The leases expire in August 2001. The Company has an
option to purchase the properties at the current market value at any time during
the lease term. For purposes of the purchase option, the market value of the
land will be determined by independent appraisals to be obtained by the lessor
and the Company. Management of the Company believes that the terms of the
existing leases are no less favorable to the Company than those which could have
been obtained in arm's length transactions.
In January 1995, the Company and its subsidiary, Trans-Tec
Delaware, acquired substantially all of the assets and assumed certain
liabilities of Trans-Tec New York, and stock and assets of its affiliated
companies. At that time, Michael Kasbar and Paul Stebbins were shareholders of
Trans-Tec New York and its affiliated companies. Messrs. Kasbar and Stebbins are
now employed by Trans-Tec Delaware, and are Directors and executive officers of
the Company. See "Election of Directors."
The aggregate purchase price for the Trans-Tec New York
acquisition was approximately $14,511,000 (excluding acquisition costs of
$321,000), paid as follows: (i) approximately $4,000,000 was paid in cash; (ii)
the Company issued four promissory notes (the "Notes") to the shareholders of
Trans-Tec New York, including Messrs. Kasbar and Stebbins, for an aggregate
amount of $6,000,000; and (iii) the Company issued shares of its Common Stock
valued at $4,511,000. Under the Notes, the Company owed Mr. Stebbins $1,365,000,
and Mr. Kasbar $1,425,000. As of March 31, 1998, the Notes were paid in full. Of
the Common Stock issued by the Company in the acquisition, Mr. Kasbar received
141,413 shares and Mr. Stebbins received 136,131 shares.
Luis R. Tinoco, individually and as a partner of the law firm of
Lara, Lopez, received $61,401 for the fiscal year ended March 31, 1998 for legal
services rendered to the Company's subsidiaries.
-20-
<PAGE>
BOARD OF DIRECTORS' PROPOSAL RELATING
TO THE 1996 EMPLOYEE STOCK OPTION PLAN
On August 28, 1996, the Company's Board of Directors adopted the
1996 Employee Stock Option Plan (the "Plan"), subject to shareholder approval at
the 1997 Annual Meeting. The Plan was approved by the shareholders at the Annual
Meeting of Shareholders on August 18, 1997. The purpose of the Plan is to
provide for the grant of options to purchase shares of Common Stock to employees
and independent contractors and agents of the Company and its subsidiaries. As
of June 1, 1998, there were approximately 30 employees and independent
contractors of the Company and its subsidiaries who were eligible to participate
in the Plan.
The Board of Directors of the Company believes that stock options
are important to attract, and encourage the continued employment and service of,
officers, other key employees and key independent contractors, by facilitating
their acquisition of an equity interest in the Company. The acquisition and
holding of an equity interest in the Company by such persons align their
interests with those of the Company's shareholders, and creates incentives for
such persons to remain with the Company.
A total of 750,000 shares of Common Stock were reserved for
issuance under the Plan. As of June 5, 1998, there were 12,500,474 shares of
Common Stock outstanding and the closing price per share of Common Stock on that
day was $17.0625.
Of the 750,000 shares authorized under the Plan, only 80,000
remain available for issuance. In order to continue to effectively award options
under the Plan, the Company's Board of Directors adopted an amendment to the
Plan increasing the number of shares authorized for issuance under the Plan to
1,250,000, subject to the approval of the shareholders at the Annual Meeting of
Shareholders. The following is a general description of the principal features
of the Plan. Such summary does not purport to be complete and is qualified in
its entirety by the terms of the Plan. A copy of the complete Plan, as modified
pursuant to this amendment, is attached hereto as Exhibit "A".
The Plan is intended to satisfy the conditions of Section 16 of
the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3
promulgated thereunder, which rule exempts certain short-swing gains from
recapture by the Company. The Plan is administered by the Compensation Committee
which is comprised exclusively of two or more "non-employee directors" within
the meaning of Rule 16b-3. Subject to the terms of the Plan, the Compensation
Committee has the sole authority and discretion to grant options, construe the
terms of the Plan and make all other determinations and take all other action
with respect to the Plan.
Under the Plan, the Compensation Committee is authorized to issue
stock options which qualify as incentive stock options (ISOs) within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and options which do not so qualify as ISOs (NSOs). The maximum number of shares
with respect to which options may be granted under the Plan to any employee in
any calendar year is one percent (1%) of the total shares of common stock
outstanding on the date of the grant.
-21-
<PAGE>
Pursuant to the provisions of the Code, the aggregate fair market
value of the Common Stock (determined at the time the option is granted) with
respect to which ISOs are exercisable for the first time by any individual
during any calendar year (under all option plans of the Company and its
subsidiaries) shall not exceed $100,000.
The exercise price for options granted under the Plan may not be
less than the fair market value of the Common Stock on the date of grant of the
option, said market value to be determined in good faith by the Compensation
Committee at the time of the grant. With respect to an ISO granted to a person
then owning more than ten percent (10%) of the voting power of all classes of
the Company's stock, the purchase price per share may be no less than 110
percent of the fair market value of the stock on the date of grant of the
option, determined in good faith as aforesaid.
Any option granted under the Plan must contain provisions setting
forth the manner of exercise of such option. Options granted under the Plan must
expire no later than ten (10) years from the date of the grant thereof;
provided, however, that any ISO granted to a person owning more than ten percent
(10%) of the voting power of all classes of the Company's stock must expire no
later than five (5) years from the date of grant thereof. The exercise price may
be paid in cash, check, promissory note, or in Common Stock (subject to certain
restrictions), or any combination thereof.
The Compensation Committee may amend or terminate the Plan;
however, no amendment may increase the number of shares subject to the Plan,
other than in connection with a recapitalization, stock split, reorganization or
similar adjustment, change the class of persons eligible to receive options,
materially increase the benefits accruing to participants under the Plan, or
increase the maximum number of shares with respect to which options may be
granted to any employee, unless the Compensation Committee also obtains the
approval of the Company's shareholders to such change. No amendment, termination
or modification of the Plan may, without the consent of the optionee, affect
options theretofore granted, except that the Compensation Committee may amend
the Plan in a manner that does not affect options theretofore granted upon a
finding by the Compensation Committee that such amendment or modification is in
the best interests of the shareholders or optionees.
The Plan became effective as of August 28, 1996 and will
terminate on August 28, 2006, unless earlier terminated by the Compensation
Committee.
Under current Federal income tax laws, the grant of an option is
not a taxable event for the optionee or the Company. Stock options granted under
the 1996 Plan will generally have the following tax consequences. Holders of
ISOs are not taxed until they sell the stock received upon the exercise of the
option. The entire spread between the sale proceeds and the ISO exercise price
is treated as long-term capital gain. Holders of NSOs receive ordinary income
upon exercise of the option in an amount equal to the spread between the value
of the purchased stock on exercise and the exercise price.
-22-
<PAGE>
The following table provides certain information regarding
options currently outstanding under the Plan to the persons and groups
indicated.
<TABLE>
<CAPTION>
1996 EMPLOYEE STOCK OPTION PLAN
EXERCISE PRICE NUMBER OF VALUE OF OPTIONS
NAME AND POSITION PER SHARE (1) OPTIONS GRANTED AS OF JUNE 5, 1998 (2)
- ----------------- ------------- --------------- ------------------------
<S> <C> <C> <C>
Ralph Weiser, Chairman $15.4046 221,500 $685,965
of the Board of Directors
Jerrold Blair, Director and 15.4046 221,500 685,965
President
Paul Stebbins, Director and 21.0000 37,500 0
Executive Vice President
of the Company and Chief
Operating Officer of
Trans-Tec Services, Inc.
Michael Kasbar, Director and 21.0000 37,500 0
Executive Vice President of
the Company and Chief
Executive Officer of
Trans-Tec Services, Inc.
All Current Executive 16.0948 540,500 1,455,836
Officers as a Group
All Current Employees 20.6815 129,500 43,125
(Excluding Executive
Officers) as a Group ____________________
</TABLE>
(1) The exercise price of all options is the fair market value of a share
of Common Stock on the date of grant.
(2) The closing sale price of the Common Stock on June 5, 1998 was $17.0625
per share. Value is calculated by multiplying (a) the difference
between $17.0625 and the option exercise price, by (b) the number of
shares of Common Stock underlying the option.
The amendment to the Plan has been approved by the Board of Directors
and, assuming a quorum is present at the Annual Meeting, requires the
affirmative vote of a number of shares which exceeds the number of shares voted
against the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
-23-
<PAGE>
COMPANY'S RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm selected by the Board of Directors of the
Company for the fiscal year ending March 31, 1999 is Arthur Andersen LLP. This
accounting firm is expected to have a representative present at the Annual
Meeting. This representative will be available to answer appropriate questions
and will be given an opportunity to make a statement, if the representative so
desires.
PROPOSALS FOR THE 1999 ANNUAL MEETING
In order to be considered for inclusion in the Proxy Statement
for the 1999 Annual Meeting, shareholders' proposals must be received at the
principal office of the Company, 700 South Royal Poinciana Blvd., Suite 800,
Miami Springs, Florida 33166, Attention: Secretary, no later than March 1, 1999.
OTHER MATTERS
Management is not aware of any other matters to be presented
for action at the Annual Meeting. IF, HOWEVER, ANY OTHER MATTERS COME BEFORE THE
ANNUAL MEETING, THE PERSONS NAMED AS PROXIES WILL VOTE ON SUCH MATTERS IN
ACCORDANCE WITH THEIR BEST JUDGMENT.
-24-
<PAGE>
PROXY
Annual Meeting of Shareholders
of World Fuel Services Corporation
To Be Held On August 17, 1998
The undersigned hereby appoints Ralph R. Weiser and Jerrold Blair, and
each of them severally, as proxies, each with the power to appoint a substitute,
and to vote, as designated on the reverse side, all of the shares of Common
Stock of World Fuel Services Corporation held of record on June 29, 1998 by the
undersigned at the Annual Meeting of Shareholders to be held on August 17, 1998,
or any adjournment or postponement thereof.
(Continued and to be Signed on Reverse Side)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
1. Election of Directors: [ ] FOR [ ] WITHHOLD
Nominees: Ralph R. Weiser
Jerrold Blair
Ralph R. Feuerring
John R. Benbow
Phillip S. Bradley
Myles Klein
Michael J. Kasbar
Paul H. Stebbins
Luis R. Tinoco
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN
THE LIST ABOVE. IF AUTHORITY IS NOT SO WITHHELD, THE
PROXY WILL BE VOTED TO ELECT ALL NOMINEES.
2. Increase Number of Shares Reserved Under 1996 Employee Stock
Option Plan [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon any
other matter coming before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
FOR ALL NOMINEES AND FOR ALL OTHER PROPOSALS DESCRIBED HEREIN.
-25-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
We have enclosed an envelope for your convenience in returning your proxy.
SIGNATURE____________________ DATE_________ SIGNATURE________________ DATE______
NOTE: Please sign name(s) exactly as shown above. When signing as
executor, administrator, trustee or guardian, give the title as
such. When shares have been issued in names of two or more
persons all should sign.
-26-
<PAGE>
EXHIBIT "A"
1996 WORLD FUEL SERVICES CORPORATION
EMPLOYEE STOCK OPTION PLAN
WHEREAS, it is in the best interest of World Fuel Services Corporation
(the "Corporation") to adopt a new employee stock option plan (the "Plan"), the
following Employee Stock Option Plan is hereby unanimously adopted:
1. COMMITTEE; GRANT OF OPTIONS.
1.1 COMMITTEE. The Compensation Committee of the Board of
Directors (the "Committee") of the Corporation is hereby authorized to
administer the Plan and to issue options to purchase the Corporation's Common
Stock from time to time to any one or more persons, in accordance with the terms
hereof. Each member of the Committee shall at all times be (i) a "disinterested
person," as defined in Rule 16b-3 promulgated by the Securities and Exchange
Commission ("SEC"), or any successor rule, and (ii) an "outside director" as
defined for purposes of Section 162(m) of the Internal Revenue Code of 1986 (the
"Code").
1.2 OPTION GRANTS. The Committee shall be authorized to issue
stock options which qualify as incentive stock options within the meaning of
Section 422 of the Code ("ISO's"), and options which do not so qualify as ISO's
("NSO's"). ISO's may be granted only to employees of the Corporation. NSO's may
be granted to employees, independent contractors and agents.
2. AMOUNT OF STOCK. The aggregate amount of stock which may be
purchased pursuant to options granted under this Plan shall be 1,250,000 shares
of the Corporation's common stock, par value $.01 per share. The maximum number
of shares with respect to which options may be granted under the Plan to any
employee in any calendar year is one percent (1%) of the total shares of common
stock outstanding on the date of the grant.
3. ISO LIMITATION. The aggregate fair market value of the common stock
(determined at the time the option is granted) with respect to which ISO's are
exercisable for the first time by any individual during any calendar year (under
all option plans of the Corporation and its subsidiaries) shall not exceed
$100,000. The restrictions contained in this Section 3 shall not apply to NSO's
issued under the Plan.
4. EXERCISE; PAYMENT.
4.1 EXERCISE. Any option granted pursuant to this Plan shall
contain provisions, established by the Committee, setting forth the manner of
exercise of such option. In no event, however, shall any ISO granted to a person
then owning more than 10 percent of the voting power
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of all classes of the Corporation's stock be exercisable by its terms after the
expiration of five years from the date of the grant thereof, nor shall any other
option granted hereunder be exercisable by its terms after the expiration of ten
years from the date of the grant thereof. No ISO granted pursuant to this Plan
may be exercised while there is outstanding any other ISO which was granted to
the employee at an earlier time.
4.2 PAYMENT. The consideration to be paid for the shares to be
issued upon exercise of an option, including the method of payment, shall be
determined by the Committee and may consist entirely of cash, check, promissory
note, or other shares of the Corporation's capital stock having a fair market
value on the date of surrender equal to the aggregate exercise price of the
shares as to which said option shall be exercised, or any combination of such
methods of payment, or such other consideration and method of payment for the
issuance of shares as is permitted under Florida law and acceptable to the
Committee. When payment of the exercise price for the shares to be issued upon
exercise of an option consists of shares of the Corporation's capital stock,
such shares will not be accepted as payment unless the optionee or transferee,
if applicable, has held such shares for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting purposes.
5. NONTRANSFERABILITY. The terms of any option granted under this Plan
shall include a provision making such option nontransferable by the optionee,
except upon death, and exercisable during the optionee's lifetime only by the
optionee.
6. PURCHASE PRICE. The purchase price for a share of stock subject to
any option granted hereunder shall be not less than the fair market value of the
stock on the date of grant of the option, said fair market value to be
determined in good faith by the Committee at the time of grant; provided,
however, that with respect to an ISO granted to a person then owning more than
10 percent of the voting power of all classes of the Corporation's stock, the
purchase price per share of the stock subject to the ISO shall be not less than
110 percent of the fair market value of the stock on the date of grant of the
option, determined in good faith as aforesaid.
7. EFFECTIVE DATE AND TERM. The effective date of this Plan is August
28, 1996; provided that, if the Plan is not approved by the shareholders of the
Corporation in accordance with the terms hereof within twelve (12) months after
the date of adoption by the Committee, the Plan and any options granted
thereunder shall terminate and become null and void. The Plan shall continue in
effect until August 28, 2006, unless sooner terminated in accordance with the
terms hereof.
8. STOCK RESERVE. The Corporation shall at all times during the term of
this Plan reserve and keep available such number of shares of its Common Stock
as will be sufficient to satisfy the requirements of this Plan, and shall pay
all fees and expenses necessarily incurred by the Corporation in connection with
the exercise of options granted hereunder.
9. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Corporation entitled to vote thereon within
twelve (12) months after the date the Plan is adopted.
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10. AMENDMENT AND TERMINATION OF THE PLAN. The Committee may amend or
terminate the Plan from time to time in such respects as the Committee may deem
advisable; provided that, the following revisions or amendments shall require
approval of the Corporation's shareholders: (i) any increase in the number of
shares subject to the Plan, other than in connection with a recapitalization,
stock-split, reorganization or similar adjustment; (ii) any change in the
designation of the class of persons eligible to be granted options; (iii) any
material increase in the benefits accruing to participants under the Plan; or
(iv) any increase in the maximum number of shares with respect to which options
may be granted to any employee. No amendment or termination or modification of
the Plan shall in any manner affect any option theretofore granted without the
consent of the optionee, except that the Committee may amend or modify the Plan
in a manner that does affect options theretofore granted upon a finding by the
Committee that such amendment or modification is in the best interest of
shareholders or optionees.
11. COMPLIANCE WITH RULE 16B-3. It is the intent of the Corporation
that this Plan comply in all respects with Rule 16b-3 (or any successor rule) in
connection with any option granted to a person who is subject to Section 16 of
the Securities and Exchange Act of 1934 (the "Exchange Act"). Accordingly, any
provision of this Plan or any option agreement that does not comply with the
requirements of Rule 16b-3 (or any successor rule) as then applicable to any
such person shall be construed or deemed amended to the extent necessary to
conform to such requirements, except that such automatic amendment shall not
apply to any other participant in the Plan who is not (at the time of such
application) subject to Section 16 of the Exchange Act. Any action taken by the
Committee pursuant to the Plan that does not comply with the requirements of
Rule 16b-3 (or any successor rule) shall be null and void.
12. OTHER TERMS. Any option granted hereunder shall contain such other
and additional terms, not inconsistent with the terms of this Plan, which are
deemed necessary or desirable by the Committee, or by legal counsel to the
Corporation.
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