<PAGE> 1
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
April 24, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Wolverine Tube, Inc. on Thursday, May 22, 1997, at 11:00 a.m., local time, at
the Huntsville Marriott, 5 Tranquility Base, Huntsville, Alabama 35805. We hope
that many Wolverine Tube, Inc. stockholders will be able to attend the meeting
and we look forward to greeting those able to attend.
The notice of annual meeting and proxy statement accompanying this letter
describe the specific business to be acted upon.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND IN PERSON, YOU ARE REQUESTED TO VOTE, SIGN, DATE, AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
On behalf of the Board of Directors, I would like to express our appreciation
for your continued interest in the Company. The Board of Directors and the
management team look forward to seeing you at the meeting.
Sincerely,
/s/ John M. Quarles
John M. Quarles
Chairman and Interim
Chief Executive Officer
<PAGE> 2
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
To the Stockholders:
Please take notice that the Annual Meeting of the Stockholders of Wolverine
Tube, Inc., a Delaware corporation, will be held on May 22, 1997, at the
Huntsville Marriott, 5 Tranquility Base, Huntsville, Alabama 35805 at 11:00
a.m., local time, for the following purposes:
1. To elect two (2) Class I directors of the Company to serve a
three-year term.
2. To approve and adopt the amendment and restatement of the Company's
1993 Equity Incentive Plan.
3. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the next fiscal year.
4. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 31, 1997 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof.
By Order of the Board of Directors
/s/ James E. Deason
James E. Deason
Secretary
Huntsville, Alabama
April 24, 1997
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO
EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE> 3
WOLVERINE TUBE, INC.
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Information Concerning the Solicitation and Voting........................... 1
Stock Ownership of Certain Beneficial Owners and Management.................. 3
Proposal One - Election of Directors......................................... 4
Executive Compensation....................................................... 9
Compensation Committee Report on Executive Compensation...................... 14
Company Stock Price Performance.............................................. 17
Compliance with Section 16(a) of the Securities Exchange Act of 1934......... 19
Proposal Two - Approval of the Amendment and Restatement of the
1993 Equity Incentive Plan................................................... 19
Proposal Three - Ratification of Appointment of Independent Auditors......... 25
Other Business............................................................... 25
Stockholder Proposals to be Presented at the Next Annual Meeting............. 25
</TABLE>
i
<PAGE> 4
PROXY STATEMENT
------------
ANNUAL MEETING OF STOCKHOLDERS
OF
WOLVERINE TUBE, INC.
-------------
This Proxy Statement is furnished in connection with the solicitation by
the management of Wolverine Tube, Inc. (the "Company") of proxies for use at the
Annual Meeting of its Stockholders to be held on May 22, 1997, at the Huntsville
Marriott, 5 Tranquility Base, Huntsville, Alabama 35805 at 11:00 a.m., local
time, or at any adjournment thereof.
INFORMATION CONCERNING THE SOLICITATION AND VOTING
GENERAL
The principal executive offices of the Company are located at 1525
Perimeter Parkway, Suite 210, Huntsville, Alabama 35806. The Company's telephone
number at that location is (205) 353-1310. The date of this Proxy Statement is
April 24, 1997, the approximate date on which these proxy solicitation materials
and the Annual Report to Stockholders for the fiscal year ended December 31,
1996, including financial statements, were first sent or given to stockholders
entitled to vote at the meeting.
This solicitation of proxies is made on behalf of the management of the
Company and the associated cost will be borne by the Company. The Company's
regularly retained investor relations firm, Corporate Communications, Inc. (the
"Solicitor"), may also be called upon to solicit proxies by telephone and mail.
The Company will pay $3,500 in fees for the Solicitor's services and will
reimburse the Solicitor for reasonable out-of-pocket expenses.
In addition to solicitation by mail and by the Solicitor, management may
use the services of its directors, officers and others to solicit proxies,
personally or by telephone. Arrangements may also be made with brokerage houses
and other custodians, nominees and fiduciaries to forward solicitation materials
to the beneficial owners of the stock held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket and clerical expenses
incurred by them in so doing.
<PAGE> 5
RECORD DATE, VOTING AND REVOCABILITY OF PROXIES
The Company had outstanding on March 31, 1997 (the "Record Date"),
13,983,127 shares of Common Stock, $.01 par value (the "Common Stock"), all of
which are entitled to vote on all matters to be acted upon at the meeting. The
Company's By-Laws provide that a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum for the transaction
of business. Each stockholder is entitled to one vote for each share of Common
Stock held on the Record Date. If no instructions are given on the executed
Proxy, the Proxy will be voted for all nominees and in favor of all proposals
described.
An affirmative vote of a majority of shares present and voting at the
meeting is required for approval of all items being submitted to the
stockholders for their consideration, other than the election of directors,
which is determined by a plurality of the votes cast if a quorum is present and
voting. An automated system administered by the Company's transfer agent
tabulates the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting for purposes of
determining the presence of a quorum. Each is tabulated separately. Neither
abstentions nor broker non-votes are counted in tabulations of the votes cast
for purposes of determining whether a proposal has been approved.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by filing with the Secretary of the Company
a written notice revoking it, by presenting at the meeting a duly executed proxy
bearing a later date, or by attending the meeting and voting in person.
2
<PAGE> 6
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of March 31, 1997, with
respect to the beneficial ownership of the Company's outstanding Common Stock by
(i) stockholders known by the Company to own beneficially more than 5% of the
outstanding Common Stock, (ii) each director, (iii) each executive officer of
the Company named in the Summary Compensation Table below, and (iv) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED
SHARES PERCENT
------------------------------------------------------------------------------
<S> <C> <C>
Neuberger & Berman L.P. (a) 859,500 6.1%
605 Third Avenue
New York, NY 10158-3698
The Prudential Insurance Company 785,635 5.6%
of America (b)
751 Broad Street
Newark, New Jersey 07102-3777
American Express Financial Corporation (c) 731,650 5.2%
IDS Tower 10
Minneapolis, MN 55440
Donald C. Blasius (d) 8,000 *
John L. Duncan (d) 8,000 *
Thomas P. Evans (e) 2,667 *
Jan K. Ver Hagen (e) 4,167 *
John M. Quarles (f) 211,601 1.5%
Thomas B. Roller (g) -- --
Gregory M. Trickey (h) 21,279 *
James E. Deason (i) 6,600 *
Richard P. Westmoreland (j) 27,759 *
Thomas J. Ruble (k) 2,700 *
All directors and executive officers as a group 438,495 3.1%
(16 persons)
</TABLE>
- ----------
* REPRESENTS LESS THAN 1%.
(footnotes continued on following page)
3
<PAGE> 7
(a) This information was provided to the Company pursuant to a Schedule 13G
filed with the Securities and Exchange Commission (the "Commission") on
February 13, 1997.
(b) This information was provided to the Company pursuant to a Schedule 13G
filed with the Commission on February 3, 1997.
(c) This information was provided to the Company pursuant to a Schedule 13G
filed with the Commission on February 1, 1997.
(d) Includes 8,000 shares subject to options exercisable within 60 days of
March 31, 1997.
(e) Includes 2,667 shares subject to options exercisable within 60 days of
March 31, 1997.
(f) Includes 31,600 shares subject to options exercisable within 60 days of
March 31, 1997.
(g) Mr. Roller was appointed as President and Chief Executive Officer of the
Company on September 16, 1996, and as a Director in December 1996. He
resigned from all positions with the Company, effective March 31, 1997.
(h) Includes 11,278 shares subject to options exercisable within 60 days of
March 31, 1997.
(i) Includes 6,600 shares subject to options exercisable within 60 days of
March 31, 1997.
(j) Includes 9,358 shares subject to options exercisable within 60 days of
March 31, 1997.
(k) Includes 2,200 shares subject to options exercisable within 60 days of
March 31, 1997.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board has nominated Messrs. Blasius and Trickey to be reelected as
Class I directors, each for a three-year term expiring in 2000. If elected, each
nominee will hold office until his term expires and until his successor is
elected and qualified. Management knows of no reason why any of these nominees
would be unable or unwilling to serve, but if any nominee should be unable or
unwilling to serve, the proxies will be voted for the election of such other
persons for the office of director as management may recommend in the place of
such nominee. THE BOARD RECOMMENDS VOTING "FOR" THE TWO NOMINEES LISTED BELOW.
INFORMATION REGARDING NOMINEES
The Certificate of Incorporation of the Company provides for the Board of
Directors to be divided into three classes of directors serving staggered
three-year terms. Each class shall consist, as nearly as may be practicable, of
one-third of the total number of directors constituting the entire Board of
Directors. As a result, approximately one-third of the Board of Directors will
be elected each year. The Class I directors are composed of Messrs. Blasius and
Trickey; the Class II directors are composed of Messrs. Duncan, Quarles and Ver
Hagen; and the Class III directors are composed of Messrs. Deason and Evans.
Directors hold office until their terms expire and their successors have been
elected and qualified.
4
<PAGE> 8
The following table sets forth certain information for each nominee, and
each director of the Company whose term of office continues after the Annual
Meeting:
NOMINEES FOR ELECTION AS CLASS I DIRECTORS WHOSE TERMS WILL EXPIRE IN 2000:
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -----------------------------------------------------------------------------------
<S> <C> <C>
Donald C. Blasius Mr. Blasius has been a director of the Company 67
since December 1993. From 1988 until June
1993, Mr. Blasius was President of White
Consolidated Industries, Inc. Prior to that, he
was Chairman and Chief Executive Officer of
the Home Products Group of White
Consolidated Industries, Inc. Mr. Blasius also
serves as a director of Ohio Edison Company.
Gregory M. Trickey Mr. Trickey has been a director of the Company 49
since June 1994. Mr. Trickey has been the
Chief Operations Officer of the Company since
June 1994. From October 1990 to June 1994,
he served as the Company's Executive Vice
President, Operations. Mr. Trickey has been
employed by the Company for 24 years, holding
numerous positions in engineering and
operations.
</TABLE>
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 1998:
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -----------------------------------------------------------------------------------
<S> <C> <C>
John L. Duncan Mr. Duncan has been a director of the 63
Company since December 1993. Mr. Duncan
previously served as President and Chief
Executive Officer of Murray Ohio
Manufacturing Co., a position he held from
1987 to 1994.
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -----------------------------------------------------------------------------------
<S> <C> <C>
John M. Quarles Mr. Quarles currently serves as Chairman and 56
Interim Chief Executive Officer of the
Company. He has been a director since January
1991 and Chairman since May 1994. Mr.
Quarles had served as President and Chief
Executive Officer since October 1990, until his
retirement from those positions in September
1996. In March 1997 he was appointed to serve
as Interim Chief Executive Officer until a new
Chief Executive Officer is appointed. Mr.
Quarles joined the Company in 1972 and has
held numerous positions, including Director of
Development and Planning of the Company
from 1985 to 1987 and President of the
Company's former U.S. operating subsidiary
from 1987 to 1990.
Jan K. Ver Hagen Mr. Ver Hagen has been a director of the 59
Company since January 1996. Mr. Ver Hagen is
the President, Chief Operating Officer and a
Director of United Dominion Industries,
Limited. Prior to his election to his current
position at United Dominion in October 1994,
Mr. Ver Hagen was Executive Vice President of
that company. Prior to joining United
Dominion in May 1994, Mr. Ver Hagen was
Vice Chairman of Emerson Electric Co. from
1988 to 1994.
</TABLE>
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 1999:
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -----------------------------------------------------------------------------------
<S> <C> <C>
James E. Deason Mr. Deason has been a director of the Company 49
since October 1995. Mr. Deason has been the
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer of the
Company since September 1994. Prior to
joining the Company, Mr. Deason, a Certified
Public Accountant, was most recently a partner
with Ernst & Young LLP, in Birmingham,
Alabama.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -----------------------------------------------------------------------------------
<S> <C> <C>
Thomas P. Evans Mr. Evans has been a director since December 39
1995. Mr. Evans is the President, Emerging
Markets, of Permal Asset Management
(formerly known as Worms Asset Management).
Prior to joining Permal in May 1994, Mr. Evans
was the Executive Vice President, Finance and
Administration, Secretary and Treasurer and a
director of Wolverine Tube, Inc. since April
1992. From July 1989 to April 1992, Mr. Evans
was Vice President, Treasurer and Chief
Financial Officer of Mr. Coffee, Inc.
</TABLE>
BOARD MEETINGS AND COMMITTEES
Messrs. Duncan and Evans serve as members of the Compensation Committee of
the Board of Directors (the "Compensation Committee"). The Compensation
Committee held four meetings during 1996. The responsibilities of the
Compensation Committee are described under "Compensation Committee Report on
Executive Compensation."
Messrs. Blasius and Duncan served on the Company's Audit Committee
throughout 1996. The Audit Committee (which reviews and approves (i) the scope
of the audit performed by the Company's independent auditors and (ii) the
Company's accounting principles and internal accounting controls) held two
meetings during 1996.
Messrs. Quarles, Trickey and Deason currently serve on the Company's
Executive Committee. The purpose of the Executive Committee is to act in the
place and stead of the Board, to the extent permitted by law and within certain
limits set by the Board, on matters that require Board action between meetings
of the Board of Directors. The Executive Committee did not hold any meetings
during 1996.
Messrs. Quarles, Evans and Ver Hagen currently serve on the Company's
Nominating Committee, which has the principal purpose of selecting, or
recommending to the Board of Directors the selection of, nominees for election
as Directors of the Company and determining whether to nominate incumbent
Directors for reelection. The Nominating Committee, which did not meet during
1996, does not have any procedures established for the consideration of nominees
recommended by stockholders.
During 1996, the Board of Directors held meetings or acted by written
consent eight times. Each incumbent director attended at least 75% of the
aggregate number of meetings of the Board of Directors and the Committees of
which they were a member during the last year.
7
<PAGE> 11
BOARD COMPENSATION
The Company's 1993 Stock Option Plan for Outside Directors (the "Directors'
Plan") provides for the granting of nonqualified stock options to independent
directors of the Company. The Company has reserved a total of 50,000 shares of
Common Stock for issuance pursuant to the Directors' Plan. The Directors' Plan
is currently administered by the Board of Directors. Under the Directors' Plan,
each independent director initially receives a nonqualified option to purchase
5,000 shares of the Company's Common Stock on the date upon which such person
first becomes a director. In addition, each independent director is
automatically granted a nonqualified option to purchase 1,000 shares of Common
Stock on the anniversary of such director's election to the Board. On January
25, 1996, Mr. Ver Hagen was granted 5,000 options with an exercise price of
$35.75 per share. On December 7, 1996, Mr. Evans was granted 1,000 options with
an exercise price of $36.75 per share. On December 15, 1995, Messrs. Blasius and
Duncan each received 1,000 options with an exercise price of $36.875 per share.
As of December 31, 1996, options to purchase an aggregate of 27,000 shares were
outstanding under the Directors' Plan at an average per share exercise price of
approximately $28.18.
Options granted under the Directors' Plan have a term of 10 years unless
terminated sooner upon termination of the optionee's status as a director or
otherwise pursuant to the Directors' Plan. Such options are not transferable by
the optionee other than by will or the laws of descent or distribution, and each
option is exercisable during the lifetime of the director only by such director.
The exercise price of each option under the Directors' Plan is equal to the fair
market value of the Common Stock on the date of grant. Initial Options granted
under the Directors' Plan vest at the rate of 33 1/3% per year and subsequent
options vest immediately; all initial options must be held at least one year
prior to exercise. Unless sooner terminated, the Directors' Plan will terminate
in 2003.
Directors who are not officers or employees of the Company, receive an
annual retainer of $20,000, plus $1,000 each for every board or committee
meeting they attend, and $1,000 for each board or committee meeting he
respectively chairs.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to or accrued on
behalf of each person who served as the Chief Executive Officer of the Company
during 1996 and each of the four other most highly compensated executive
officers of the Company (collectively, the "Named Executive Officers") for
services rendered in all capacities for the years ended December 31, 1996, 1995
and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
-------------------- ----------
Common
Stock
Underlying All
Options Other
Name and Principal Position Year Salary (Shares) Compensation(a)
- --------------------------------- ---- -------- ---------- ---------------
<S> <C> <C> <C> <C>
John M. Quarles 1996 $387,803 10,000 $3,692
Chairman and Interim Chief 1995 335,000 10,000 3,601
Executive Officer (b) 1994 270,501 20,000 2,963
Thomas B. Roller 1996 131,250 30,000 70
Former President and
Chief Executive Officer (c)
Gregory M. Trickey 1996 203,220 10,000 2,937
Chief Operations Officer 1995 173,750 10,000 2,470
1994 141,566 7,500 2,515
James E. Deason 1996 178,158 12,000 2,351
Executive Vice President, Chief 1995 153,690 7,500 1,817
Financial Officer, Secretary and 1994 44,327 3,000 -
Treasurer (d)
Richard P. Westmoreland 1996 165,657 5,000 4,552
Executive Vice President, 1995 152,044 6,000 3,220
International and Business 1994 146,175 6,000 3,220
Development
Thomas J. Ruble 1996 157,161 5,000 2,317
Senior Vice President, 1995 116,250 3,000 1,445
Operations (e) 1994 - - -
</TABLE>
(a) The amounts hereunder include insurance premiums paid by the Company for
term life insurance policies for the benefit of the named executive
officers. In addition, the 1994 amounts include 401(k) matching
contributions made by the Company of $2,310, $2,310 and $1,929 to Messrs.
Quarles, Trickey and Westmoreland, respectively. The 1995 amounts include
401(k) matching contributions made by the Company of $2,310, $1,612,
$2,266, $1,930 and $1,445 to Messrs. Quarles, Trickey, Deason, Westmoreland
and Ruble, respectively. The 1996 amounts include 401(k) matching
contributions made by the Company of $2,671, $2,733, $2,147, $2,270 and
$2,276 to Messrs. Quarles, Trickey, Deason, Westmoreland and Ruble,
respectively.
(b) Mr. Quarles has served as Chairman of the Company since May 1994, and
served as President and Chief Executive Officer until his retirement from
those positions in September 1996. On March 31, 1997, Mr. Quarles was
appointed to serve as Interim Chief Executive Officer. Mr. Quarles'
compensation is established pursuant to an Employment Agreement with the
Company. See "Plans and Arrangements -- Employment Agreement with John M.
Quarles."
(c) Reflects compensation, based upon an annual base salary of $450,000,
received by Mr. Roller between September 16, 1996, the date he joined the
Company, and December 31, 1996. Mr. Roller resigned from all positions with
the Company effective March 31, 1997, and all options granted to Mr. Roller
were terminated at that time.
(d) Mr. Deason joined the Company in September 1994 and, therefore, the
compensation received by him for 1994 reflects amounts received between
September 15 and December 31, 1994.
(e) Mr. Ruble joined the Company in April 1995 and, therefore, the compensation
received by him for 1995 reflects amounts received between April 23 and
December 31, 1995.
9
<PAGE> 13
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option grants
made to all persons who served as the Company's Chief Executive Officer and each
of the other Named Executive Officers during the fiscal year ended December 31,
1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
NUMBER OF PERCENT OF
SHARES OF TOTAL POTENTIAL REALIZABLE VALUE AT
COMMON STOCK OPTIONS ASSUMED RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM(B)
OPTIONS EMPLOYEES PRICE PER EXPIRATION ---------------------------------
NAME GRANTED(A) IN 1995 SHARE DATE 5% 10%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John M. Quarles 10,000 5.6% $35.75 01/25/06 $224,828 $ 569,762
Thomas B. Roller (c) 30,000 16.8 41.13 09/16/06 775,893 1,966,277
Gregory M. Trickey 10,000 5.6 35.75 01/25/06 224,828 569,762
James E. Deason 12,000 6.7 35.75 01/25/06 269,794 683,714
Richard P. Westmoreland 5,000 2.8 35.75 01/25/06 112,414 284,881
Thomas J. Ruble 5,000 2.8 35.75 01/25/06 112,414 284,881
</TABLE>
(a) Options vest at the rate of 20% per year for five years starting on January
25, 1997 for Messrs. Quarles, Trickey, Deason, Westmoreland and Ruble.
(b) The assumed annual rates of appreciation of five and ten percent for option
term would result in the price of the Company's stock increasing from
$35.75 to $58.23 and $92.73 per share, respectively, for Messrs. Quarles,
Trickey, Deason, Westmoreland and Ruble, and from $41.13 to $66.99 and
$106.67 per share, respectively, for Mr. Roller.
(c) Options granted to Mr. Roller were scheduled to vest at the rate of 20% per
year for five years starting on September 16, 1997. All of such options
terminated upon his resignation from the Company, effective March 31, 1997.
10
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth information with respect to stock options
exercised during the year ended December 31, 1996, the aggregate number of
unexercised options to purchase Common Stock granted in all years to the Named
Executive Officers and held by them as of December 31, 1996, and the value of
unexercised in-the-money options (i.e., options that had a positive spread
between the exercise price and the fair market value of the Common Stock) as of
December 31, 1996:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK VALUE OF
UNDERLYING UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT OPTIONS AT
NAME ON EXERCISE REALIZED (A) DECEMBER 31, 1996 DECEMBER 31, 1996 (B)
- ------------------------------------------------------------------------------------------------------------------------------
VESTED UNVESTED VESTED UNVESTED
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John M. Quarles 109,600 $3,227,438 10,000 32,400 $ -- $925,452
Thomas B. Roller (c) -- -- -- 30,000 -- --
Gregory M. Trickey 38,372 1,140,896 -- 31,518 -- 401,262
James E. Deason -- -- 2,700 19,800 25,800 76,200
Richard P. Westmoreland 37,512 1,156,501 -- 22,778 -- 366,358
Thomas J. Ruble -- -- 600 7,400 5,850 23,400
</TABLE>
(a) Value realized equals the amount of the excess of the fair market value of
the Common Stock acquired on exercise of the stock options over the
relevant exercise price paid by the holder of such options, and does not
constitute any disbursement of the Company's funds.
(b) For all unexercised in-the-money options, assumes a fair market value at
December 31, 1996 of $35.25 per share of Common Stock, which is the last
transaction in the Common Stock on the New York Stock Exchange as of that
date.
(c) All options granted to Mr. Roller terminated upon his resignation from the
Company, effective March 31, 1997.
PLANS AND ARRANGEMENTS
RETIREMENT PLANS. Executive employees of the Company are eligible to
participate in the Wolverine Tube, Inc. Retirement Plan (the "Retirement Plan").
This funded noncontributory defined benefit plan provides an annuity benefit,
upon retirement at normal retirement age of 65, of (i) 1.5% of average monthly
compensation, averaged over the 60 month period that produces the highest
average during the last 120 months, times (ii) years of service to the Company,
minus (iii) an adjustment for Social Security benefits as described in the
Retirement Plan. Upon early retirement prior to age 60, a reduction will be made
to the foregoing benefit equal to 4% for each year by which such retirement
precedes age 60, ending at age 55, the minimum age to receive pension
benefits. A
11
<PAGE> 15
minimum of five years of service is needed for eligibility for an early
retirement benefit. There is a minimum benefit of 1.25% of average monthly base
compensation multiplied by years of service with the Company. However, no
Company executive is expected to receive a benefit under this formula.
The covered compensation of participants used to calculate the retirement
benefits described above consists of base pay, overtime, commissions,
non-incentive bonus payments and year-end bonuses or incentive compensation not
in excess of one-half of base pay.
The Company has a Supplemental Executive Retirement Plan (the "Executive
Plan"). This defined benefit pension plan is nonfunded and provides benefits to
certain eligible executives of the Company. The benefits provided under the
Executive Plan are identical to the benefits provided by the Retirement Plan,
except that under the Retirement Plan final average annual compensation for
purposes of determining plan benefits is capped at $150,000 pursuant to certain
Internal Revenue Service limits. Benefits under the Executive Plan are not
subject to this limitation. However, Executive Plan benefits are offset by any
benefits payable from the Retirement Plan.
The following table shows the estimated approximate annual benefits payable
upon normal retirement at age 65 in 1996 under both the Retirement Plan and
Executive Plan for persons in specified remuneration and years of service
classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
FINAL
AVERAGE
SALARY YEARS OF SERVICE
- ----------------------------------------------------------------------------------------
15 20 25 30 35
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 26,191 34,921 43,652 52,382 61,757
150,000 31,816 42,421 53,027 63,632 74,882
175,000 37,441 49,921 62,402 74,882 88,007
200,000 43,066 57,421 71,777 86,132 101,132
250,000 54,316 72,421 90,527 108,632 127,382
300,000 65,566 87,421 109,277 131,132 153,632
400,000 88,066 117,421 146,777 176,132 206,132
450,000 99,316 132,421 165,527 198,632 232,382
500,000 110,566 147,421 184,277 221,132 258,632
</TABLE>
12
<PAGE> 16
As of December 31, 1996, Mr. Quarles had 24 years of credited service in
the Retirement Plan, Mr. Trickey had 23 years, Mr. Westmoreland had 11 years,
and each of Mr. Deason and Mr. Ruble had 2 years. Mr. Quarles, Mr. Trickey, Mr.
Westmoreland, Mr. Deason and Mr. Ruble had compensation of $387,803, $203,220,
$178,158, $165,657 and $157,161, for purposes of the above table, as of December
31, 1996.
EMPLOYMENT AGREEMENT WITH JOHN M. QUARLES. In connection with Mr. Quarles'
retirement as President and Chief Executive Officer of the Company in September
1996, the Company entered into an Employment Agreement, dated September 16, 1996
(the "Agreement"), with Mr. Quarles, which replaced and superseded his then
existing employment agreement. Pursuant to the Agreement, Mr. Quarles agreed to
continue to serve as Chairman of the Company following his retirement as
President and Chief Executive Officer, and in such capacity, from and after
January 1, 1997, to devote at least 60 days per year to the performance of his
duties thereunder. The Agreement provides that commencing January 1, 1997 Mr.
Quarles will receive a base salary of $100,100 per year (subject to periodic
adjustment by the Board) plus an amount equal to 1/60 of such base salary for
each day in excess of 60 days per year that Mr. Quarles devotes to his duties
thereunder. In addition, Mr. Quarles is eligible to receive an annual bonus
under the Company's key manager bonus plan. The Agreement also provides that if
Mr. Quarles is terminated for cause or if he resigns, other than for certain
enumerated reasons, he is entitled to receive only the severance benefits
provided by the Company's standard severance plan and to payment of his salary
through the date of his termination or resignation. If he is terminated without
cause or resigns for one of the enumerates reasons, he is entitled to receive an
amount equal to his salary through the term of the Agreement plus continuance of
medical and life insurance benefits. In addition, the Agreement provides that
Mr. Quarles will have the right to receive medical and insurance benefits, to
retain all his stock options and to exercise those options as they vest or until
they terminate pursuant to their terms. In Mr. Quarles' role as Interim Chief
Executive Officer, effective March 31, 1997, Mr. Quarles will be compensated in
accordance with the terms of the Agreement.
SEVERANCE PAY PLAN. The Company's Severance Pay Plan (the "Severance Plan")
provides benefits to all eligible employees who have at least one year of
service and who are terminated for reasons other than for cause. Severance
benefits include payment of all accrued vacation and two weeks pay at the
employee's current base salary plus one-half of one week's pay for each full
year of continuous service, not to exceed 26 weeks. Acceptance of severance
benefits constitutes a release of all claims against the Company, except claims
in accordance with the provisions of applicable benefit plans.
SEVERANCE AGREEMENT. The Company has entered into severance agreements with
each of Messrs. Trickey, Westmoreland, Deason and Ruble (the "Severance
Agreements"). The Severance Agreements provide that if the officer is terminated
for cause or if he resigns other than for certain enumerated good reasons, he is
entitled to only the severance benefits provided by the Company's standard
procedure and practice and payment of his salary through the date of his
termination or resignation. If he is terminated without cause or resigns for
good reason, then he is entitled to certain enumerated benefits.
13
<PAGE> 17
The Company's Severance Agreements with Messrs. Westmoreland, Deason and
Ruble provide that if the officer is terminated without cause or resigns for
good reason (i) he is entitled to one year salary plus any unused vacation time
for that year (payable either in a lump sum or in periodic payments over one
year) plus temporary continuance of his medical and life insurance benefits, or
(ii) at his option, to continue working for the Company for one year, for the
same salary as he would receive under (i) above, in a different position
designated by the Company. Mr. Trickey's Severance Agreement is substantially
identical to these agreements with the exception that he is entitled to one year
and three weeks' salary.
The Company had also entered into a comparable Severance Agreement with Mr.
Roller in September 1996. In connection with Mr. Roller's resignation from the
Company in March 1997, the Company entered into an agreement with Mr. Roller,
pursuant to which, among other things, Mr. Roller will be paid an aggregate of
$675,000 in a series of payments through September 30, 1998, and will be
entitled to certain medical benefits, payment for accrued vacation time, and
reimbursement for up to a maximum of $70,000 in certain other expenses. The
agreement also contains certain confidentiality covenants, and provides for the
discharge of any other obligations of the Company or rights of Mr. Roller,
including those that would have been provided under the Severance Agreement and
under outstanding options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
The Compensation Committee is responsible for the general compensation
policies of the Company, and in particular is responsible for setting and
administering the policies that govern executive compensation. The Compensation
Committee, which is comprised of two non-employee directors, evaluates the
performance of management and determines the compensation levels for all
executive officers.
To assist in determining compensation policies, the Compensation Committee
retained the services of Buck Consultants, a management and compensation
consulting firm, to evaluate the Company's various compensation programs.
Additional information on compensation has been derived in the course of
recruiting senior executives for the Company.
The objective of the Compensation Committee is to establish policies and
programs to attract and retain key executives, and to reward performance by
these executives which benefits the stockholders. The primary elements of
executive officer compensation are base salary, annual cash bonus awards, and
stock option awards. The salary is based on factors such as the individual
executive officer's level of responsibility and comparison to similar positions
in the Company and in comparable companies. Annual cash bonus awards are based
on the Company's performance measured against the attainment of financial and
other objectives established annually by the Board of Directors, and, to a
lesser extent, on individual performance. Stock option awards are intended to
align the executive officer's
14
<PAGE> 18
interests with those of the stockholders in promoting the long-term growth of
the Company, and are determined based on the executive officer's salary, level
of responsibility, number of options previously granted, and contributions
toward achieving the objectives of the Company. Further information on each of
these compensation elements is set forth below.
SALARIES
Base salaries are adjusted annually, following a review by the Company's
chief executive officer (the "CEO"). In the course of the review, performance of
the individual with respect to specific objectives is evaluated, as are any
increases in responsibility, and salaries for similar positions and levels of
responsibility. The specific objectives for each executive officer are set by
the individual's manager, sometimes with advice from the CEO, and will vary for
each executive position and for each year. Since this is a base salary review,
performance of the Company is not weighed heavily in the result. When all
reviews are completed, the CEO makes a recommendation to the Compensation
Committee for its review and final approval.
With respect to the CEO, the Compensation Committee reviews and establishes
a base salary, which is influenced primarily by the Compensation Committee's
assessment of the individual's performance and the Compensation Committee's
expectations as to his future contributions. Competitive compensation data is
also a major factor in establishing the CEO's salary, but no precise formula is
applied in considering this data. The Compensation Committee's review takes
place annually. As a result of that review last year, the Compensation Committee
determined that it was appropriate to increase Mr. Quarles' compensation during
the time he served as CEO in 1996. In connection with the process of searching
for a new CEO in 1996, the Board determined that, based upon market conditions,
the base salary, bonus and equity compensation elements would need to be
increased in order to attract a suitable candidate for the position.
Accordingly, the base salary of $450,000 that was offered to and accepted by Mr.
Roller was determined in the process that led to his hiring.
BONUSES
In early 1996, the Compensation Committee commenced the implementation of
new senior management bonus plans designed to more directly and effectively link
bonuses to both short and long term performance objectives of the Company and
the individual executive officer. These programs took effect in 1996, and were
proposed in response to the Compensation Committee's belief that the Company's
historical bonus plans were not creating appropriate incentives for the
Company's executives.
For fiscal year 1996, annual cash bonus objectives were governed by the
management bonus plan, which was heavily dependent on the financial performance
of the Company, and less so on individual performance. The Board of Directors of
the Company reviewed the business plan developed by management and then approved
the objectives for the year, capital expenditure plans and other factors, and
set a target amount of earnings. The
15
<PAGE> 19
Compensation Committee then incorporated this target into the bonus plans as a
threshold below which no bonus would be paid. With respect to the bonus
objectives for the CEO, the Compensation Committee reviewed this separately,
with the amount allocated by salary ratio as a base. Performance factors were
then considered, such as attainment of objectives in product development, market
share, representation of the Company at analyst and investor meetings,
development of management personnel, and other considerations. The Company's
long-term incentive plan was developed in consultation with senior management
and Buck Consultants, and the Company's senior executive officers are eligible
for awards thereunder based upon the Company's return on total capital measured
over a four year period.
STOCK OPTION AWARDS
Stock options are an integral part of each executive officer's compensation
and are intended to provide an incentive to continue as employees of the Company
over a long term, and to align the interests of the executive with those of the
stockholders by providing a stake in the Company. All equity based awards for
management are granted pursuant to the Company's 1993 Equity Incentive Plan,
which the Board has proposed be amended and restated. Grants to participants are
made at fair market value on the date of the grant, vest over a period of five
years, and expire after ten years. In making grants the Compensation Committee
takes into account the total number of shares available for grant under the
plan, prior grants outstanding, and estimated requirements for future grants.
Individual awards take into account the executive officer's contributions to the
Company, scope of responsibilities, strategic and operational goals, salary and
number of unvested options.
In determining an option grant for the CEO, the Compensation Committee
weighs all of the above factors, but, recognizing the CEO's critical role in
developing strategies for the long-term benefit of the Company, may award grants
greater than would have been indicated by considerations of proportional
salaries. In addition, in connection with hiring a new CEO, the Compensation
Committee believes that it may be appropriate to expand the equity based awards
for the CEO. Stock options are an important element in attracting and retaining
capable executives at all levels, and this is particularly so in the case of the
CEO, who must constantly act in the stockholders' interest.
SUMMARY
Base salaries were revised in March 1996 and were not affected by 1996
performance. The Company's 1996 earnings fell short of the target set by the
Board of Directors, which governs the management bonus program. Therefore, there
were no bonus payments made for that year. The long-term incentive plan was
adopted in 1996 and target performance will be measured at the end of fiscal
2000. Based on available information, the Compensation Committee believes that
the Company's level of base salaries is competitive, and that the Company's new
bonus programs will cause bonus levels to be competitive as well. The Committee
continually reviews the Company's compensation programs to ensure
16
<PAGE> 20
that the overall package is competitive, balanced, and that proper incentives
and rewards are provided.(1)
Compensation Committee
J. L. Duncan
T. P. Evans
- --------
(1) The Compensation Committee has not yet formulated a policy on
qualifying executive officer compensation under new Section 162(m) of the Code
(adopted under the Omnibus Budget and Reconciliation Act of 1993).
17
<PAGE> 21
COMPANY STOCK PRICE PERFORMANCE
Set forth is a line graph comparing the cumulative total stockholder
return on the Common Stock since August 13, 1993, the date the Common Stock
first commenced trading, assuming reinvestment of dividends, with the cumulative
total stockholder return of the S&P Industrials Index, and the NYSE Composite
Index.
[GRAPH]
TOTAL CUMULATIVE RETURNS
(includes reinvestment of dividends)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
8/13/93 12/31/93 12/31/94 12/31/95 12/31/96
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Wolverine Tube, Inc. 100 127 153 242 227
- --------------------------------------------------------------------------------------------------------------
S&P Industrials 100 108 112 151 185
- --------------------------------------------------------------------------------------------------------------
NYSE Composite 100 106 106 143 174
- --------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 22
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than ten percent of the Common Stock are
subject to the reporting requirements of Section 16(a) of the Exchange Act,
which require them to file reports with respect to their ownership of the
Company's securities on Form 3 and transactions in the Company's securities on
Forms 4 or 5. Based solely on its review of the copies of such forms received by
it, the Company believes that, for the fiscal year ended December 31, 1996, the
Section 16(a) filing requirements were complied with by all incumbent executive
officers, directors and director nominees during the year.
PROPOSAL TWO - APPROVAL OF THE AMENDMENT
AND RESTATEMENT OF THE 1993 EQUITY INCENTIVE PLAN
On February 13, 1997, the Board of Directors of the Company adopted an
amendment and restatement of the Company's 1993 Equity Incentive Plan (the
"Amended Plan"), subject to the ratification and approval thereof by the
stockholders. The Board of Directors believes that continuing to provide
officers and key employees of the Company and its subsidiaries with a
proprietary interest in the Company helps to attract, retain and motivate such
persons and rewards them for their contributions to the Company. The Board of
Directors determined that the amendments contained in the Amended Plan help to
further those objectives. If the approval of the stockholders is not obtained,
no further awards will be granted under the Amended Plan.
The amendments contained in the Amended Plan effect the following principal
changes to the 1993 Equity Incentive Plan, as originally adopted: (i) increase
the maximum number of shares of Common Stock that may be issued and sold
thereunder from 550,000 shares to 1,225,000 shares; (ii) eliminate the ability
to grant awards of "Phantom Shares" (rights whose value is determined with
reference to the value of Common Stock); (iii) limit the number of stock option
rights and stock appreciation rights that may be granted to an officer or key
employee during any calendar year to 60,000 shares of Common Stock; (iv) enact
certain technical changes to the definition of a "Change in Control," including
a provision reducing the amount of "Voting Stock" of the Company that a person
must beneficially own in order to constitute a Change in Control from 50% to
20%; and (v) provide that all awards granted under the Amended Plan shall become
immediately vested and exercisable upon a Change in Control.
The provisions of the Amended Plan, which was originally approved by a
majority of the Company's stockholders in June 1993, are summarized below. Such
summaries do not purport to be complete, and are qualified in their entirety by
reference to the full text of the Amended Plan, a copy of which is attached to
this Proxy Statement as Annex A.
19
<PAGE> 23
SUMMARY OF THE AMENDED PLAN
The Amended Plan is administered by the Compensation Committee, which is
composed of directors who are not officers of the Company and are not eligible
to participate in the Amended Plan. The Compensation Committee has the authority
under the Amended Plan to grant awards to officers or other key employees of the
Company selected on the basis of their present and potential contributions to
the Company. Non-employee directors are not eligible to receive awards under the
Amended Plan. A total of 1,225,000 shares of Common Stock have been reserved for
issuance under the Amended Plan, of which 731,866 are subject to outstanding
options as of March 31, 1997. Shares that are issued upon exercise of stock
options may be either newly issued shares or shares of Common Stock that are
held in treasury. Upon the payment of any option exercise price by the transfer
to the Company of shares of Common Stock or upon satisfaction of any withholding
amount by means of transfer or relinquishment of shares of Common Stock, there
shall be deemed to have been issued or transferred under the Amended Plan only
the net number of shares of Common Stock actually issued or transferred by the
Company.
The Amended Plan provides for the award of nonqualified options, incentive
stock options ("ISOs") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), free-standing or tandem stock
appreciation rights ("SARs"), and restricted shares. The Amended Plan also
permits the Compensation Committee to specify the terms and conditions of other
types of equity-based or equity-related awards which are consistent with the
purposes of the Amended Plan and the interests of the Company.
Under the option component of the Amended Plan, awardees will receive the
right to purchase a specified number of shares of Common Stock at an option
exercise price determined by the Compensation Committee on the date of grant. In
the case of an ISO, however, the option price shall be no less than the fair
market value of a share of Common Stock on the date of grant.
As noted above, no participant shall be granted option rights (or SARs) for
more than 60,000 shares of Common Stock during any calendar year, subject to
adjustments as provided in the Amended Plan. The aggregate number of shares of
Common Stock actually issued or transferred by the Company upon the exercise of
ISOs during the life of the Amended Plan shall not exceed 1,225,000 shares,
subject to adjustments as provided in the Amended Plan. Any grant may provide
for the automatic grant of additional option rights to an optionee upon the
exercise of option rights using shares of Common Stock as payment of the option
exercise price or in satisfaction of the optionee's tax liability.
Under the SAR component of the Amended Plan, awardees will receive rights
which entitle them to payments based on changes in the value of shares of Common
Stock. SARs may be granted either in tandem with option rights or as
free-standing rights. Tandem SARs entitle an awardee to a payment at the time of
exercise equal to the spread between the option price of the tandem option and
the current fair market value of the shares of Common Stock. Free-standing SARs
entitle an awardee to a payment at the time of exercise equal to the spread
between an initial value determined by the Compensation Committee and the
current fair market value of the shares of Common Stock. At the
20
<PAGE> 24
direction of the Compensation Committee, payment of the spread may be in cash,
shares of Common Stock, or a combination thereof.
Restricted Shares under the Amended Plan are shares of Common Stock that
are subject to vesting restrictions for such time as Compensation Committee
shall determine. The participant is entitled immediately to voting, dividends
and other ownership rights in such shares. Restricted Shares may be granted or
offered for sale to any participant, may be granted solely in consideration for
services rendered or to be rendered to the Company, and may also be granted in
substitution or exchange for other restricted property held by a participant.
Under the Amended Plan, the Compensation Committee has the authority to set
the terms and provisions of each applicable award, including the applicable
vesting schedule, exercise price and the methods by which participants may pay
the option exercise price, which include, among other things, stock delivery,
stock withholding and broker-coordinated cashless exercises.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the Federal income tax
consequences of certain transactions under the Amended Plan based on Federal
income tax laws in effect on January 1, 1997. This summary is not intended to be
complete and does not describe state or local tax consequences.
TAX CONSEQUENCES TO PARTICIPANTS
Nonqualified Options. In general, (i) no income will be recognized by an
optionee at the time a nonqualified option is granted; (ii) at the time of
exercise of a nonqualified option, ordinary income will be recognized by the
optionee in an amount equal to the difference between the option price paid for
the shares and the fair market value of the shares, if unrestricted, on the date
of exercise; and (iii) at the time of sale of shares acquired pursuant to the
exercise of a nonqualified option, appreciation (or depreciation) in value of
the shares after the date of exercise will be treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held.
ISOs. No income generally will be recognized by an optionee upon the grant
or exercise of an ISO. If shares of Common Stock are issued to the optionee
pursuant to the exercise of an ISO, and if no disqualifying disposition of such
shares is made by such optionee within two years after the date of grant or
within one year after the transfer of such shares to the optionee, then upon
sale of such shares, any amount realized in excess of the option price will be
taxed to the optionee as a long-term capital gain and any loss sustained will be
a long-term capital loss.
If shares acquired upon the exercise of an ISO are disposed of prior to the
expiration of either holding period described above, the optionee generally will
recognize ordinary income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of such shares at the time of exercise
(or, if less, the amount realized on the
21
<PAGE> 25
disposition of such shares if a sale or exchange) over the option price paid for
such shares. Any further gain (or loss) realized by the participant generally
will be taxed as short-term or long-term capital gain (or loss) depending on the
holding period.
SARs. No income will be recognized by a participant in connection with the
grant of a tandem SAR or a free-standing SAR. When the SAR is exercised, the
participant normally will be required to include as taxable ordinary income in
the year of exercise an amount equal to the amount of cash received and the fair
market value of any unrestricted shares received on the exercise.
Restricted Shares. The recipient of Restricted Shares generally will be
subject to tax at ordinary income rates on the fair market value of the
Restricted Shares (reduced by any amount paid by the participant for such
Restricted Shares) at such time as the shares are no longer subject to
forfeiture or restrictions on transfer for purposes of Section 83 of the Code
("Restrictions"). However, a recipient who so elects under Section 83(b) of the
Code within 30 days of the date of transfer of the shares will have taxable
ordinary income on the date of transfer of the shares equal to the excess of the
fair market value of such shares (determined without regard to the Restrictions)
over the purchase price, if any, of such Restricted Shares. If a Section 83(b)
election has not been made, any dividends received with respect to Restricted
Shares that are subject to the Restrictions generally will be treated as
compensation that is taxable as ordinary income to the participant.
Special Rules Applicable to Officers. In limited circumstances where the
sale of stock received as a result of a grant or award could subject an officer
to suit under Section 16(b) of the Exchange Act, the tax consequences to the
officer may differ from the tax consequences described above. In these
circumstances, unless a special election under Section 83(b) of the Code has
been made, the principal difference (in cases where the officer would otherwise
be currently taxed upon his receipt of the stock) usually will be to postpone
valuation and taxation of the stock received so long as the sale of the stock
received could subject the officer to suit under Section 16(b) of the Exchange
Act of 1934, but no longer than six months.
TAX CONSEQUENCES TO THE COMPANY
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense, is not an "excess parachute
payment" within the meaning of Section 280G of the Code and is not disallowed by
the $1 million limitation on certain executive compensation under Section 162(m)
of the Code.
22
<PAGE> 26
ELIGIBILITY
Officers and key employees of the Company and its subsidiaries
(approximately 100 as of December 31, 1996), as determined by the Compensation
Committee, may be selected to receive benefits under the Amended Plan.
23
<PAGE> 27
AMENDED PLAN BENEFITS
The table below shows the option awards that have been granted to each of
the following persons or groups under the Amended Plan from the inception of the
Plan through March 31, 1997.
PLAN BENEFITS PREVIOUSLY GRANTED
<TABLE>
<CAPTION>
Outstanding
Name Dollar Value Option Rights
---- ------------ -------------
<S> <C> <C>
John M. Quarles
Chairman and Interim Chief
Executive Officer (1) 42,400
Thomas B. Roller
Former President and
Chief Executive Officer -- --
Gregory M. Trickey
Chief Operations Officer (1) 41,518
James E. Deason
Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer (1) 34,500
Richard P. Westmoreland
Executive Vice President,
International and Business
Development (1) 22,778
Thomas J. Ruble
Senior Vice President,
Operations (1) 12,500
Executive Officer Group (1) 276,196
Non-Executive Director Group N/A N/A
Non-Executive Officer Employee Group (1) 455,670
</TABLE>
- -----------------------
(1) Stock options were granted under the Amended Plan at exercise prices equal
to the fair market value of the Common Stock on the date of grant. The
actual value, if any, a person may realize will depend on the excess of the
stock price over the exercise price on the date the option is exercised. On
December 31, 1996, the last reported sale price for the Common Stock on the
New York Stock Exchange was $35.25.
The types of awards and amounts thereof that may be granted under the
Amended Plan to the above-named individuals and groups in the future are not
determinable at this time.
24
<PAGE> 28
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL THREE - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the independent
auditors for the Company for fiscal year 1997, and recommends that the
stockholders vote for ratification of such appointment. Ernst & Young LLP has
audited the Company's financial statements since 1989. Notwithstanding the
selection, the Board, in its discretion, may direct the appointment of a new
independent auditors at any time during the year if the Board feels that such a
change would be in the best interests of the Company and its stockholders. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting with the opportunity to make a statement if he or she so desires and be
available to respond to appropriate questions. THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THIS PROPOSAL.
OTHER BUSINESS
The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matters are properly brought before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent in accordance with their judgment.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT THE NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented by such stockholders at
next year's Annual Meeting must be received by the Company at its principal
office no later than December 25, 1997, and must satisfy the conditions
established by the Securities and Exchange Commission for stockholder proposals
to be included in the Company's proxy statement for that meeting.
By Order of the Board of Directors
/s/ John M. Quarles
John M. Quarles
Chairman and Interim
Chief Executive Officer
April 24, 1997
25
<PAGE> 29
ANNEX A
WOLVERINE TUBE, INC.
1993 EQUITY INCENTIVE PLAN
(as Amended and Restated as of February 13, 1997)
1. Purpose. The Wolverine Tube, Inc. 1993 Amended and Restated Equity
Incentive Plan (the "Plan") is intended to enhance the ability of Wolverine
Tube, Inc., a Delaware corporation (the "Company"), to attract, retain and
motivate key executives and employees of the Company and its Subsidiaries (as
defined herein), by providing such persons with an opportunity to obtain a
proprietary interest in the Company and by rewarding them for their
contributions to the Company.
2. Definitions. As used herein:
"Awards" means Options, Restricted Shares, Stock Appreciation Rights or the
additional awards referred to in Section 10 below.
"Beneficiary" or "Beneficiaries" means the person or persons designated by
a Participant pursuant to the provisions of the Agreement (as defined in Section
6) to receive payments or rights pursuant to such Agreement upon the
Participant's death. If no Beneficiary is so designated by a Participant or if
no Beneficiary is living at the time a payment is due pursuant to such
Agreement, payments shall be made to the estate of such Participant. The
Agreement shall provide a Participant with the right to change the designated
Beneficiaries from time to time by written instrument executed by the
Participant and filed with the Committee in accordance with such rules as may be
specified by the Committee; provided, however, that no Beneficiary designation
shall be effective unless it is received by the Committee prior to the date of
death of the Participant.
"Board" means the Board of Directors of the Company.
"Change in Control of the Company" means any of the following events:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such transaction;
(b) The Company sells or otherwise transfers all or substantially all of
its assets to any other corporation or other legal person, less than a majority
of the combined voting power of the then-outstanding securities of such
corporation or person immediately
A-1
<PAGE> 30
after such sale or transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or transfer;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the Voting Stock of the Company;
(d) The Company files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to Form
8-K or Schedule 14A (or any successor schedule, form or report or item therein)
that a change in control of the Company has or may have occurred or will or may
occur in the future pursuant to any then-existing contract or transaction;
(e) If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Directors of the Company cease for
any reason to constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's stockholders, of each Director of
the Company first elected during such period was approved by a vote of at least
two-thirds of the Directors of the Company then still in office who were
Directors of the Company at the beginning of any such period; or
(f) The Board approves, or the Company enters into an agreement providing
for, a transaction, event or development that constitutes (or would constitute
if consummated) a Change of Control pursuant to any of the foregoing.
(g) Notwithstanding the foregoing provisions of (c) and (d) above, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Plan (i) solely because (A) the Company, (B) a Subsidiary or (C) any
Company-sponsored employee stock ownership plan or other employee benefit plan
of the Company, either files or becomes obligated to file a report or proxy
statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein) under
the Exchange Act, disclosing beneficial ownership by it of shares of Voting
Stock of the Company, whether in excess of 20% or otherwise, or because the
Company reports that a change of control of the Company has or may have occurred
or will or may occur in the future by reason of such beneficial ownership or
(ii) solely because of a change in control of any Subsidiary.
"Code" means the internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Committee" means the committee of the board described in Section 4.
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"Common Stock" means the common stock of the Company, par value $.01 per
share, or such other class or kind of shares or other securities as may be
applicable under Section 12.
"Effective Date" means the date the Plan is first approved by the
stockholders of the Company in the manner required by the Company's charter, its
Bylaws and the laws of the State of Delaware, at the time such vote is taken.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, as such acts rules or regulations may be
amended from time to time.
"Fair Market Value" means the fair market value of a share of Common Stock,
as determined in good faith by the Committee, using such methodology as it may
deem appropriate.
"Free-Standing Stock Appreciation Right" means a Stock Appreciation Right
not granted in tandem with an Option,
"Grant Date" means, with respect to any Award, the date on which such Award
was granted.
"Incentive Stock Option" means an Option which is intended to qualify as an
incentive stock option under Section 422 of the Code.
"Initial Value" means the initial value, if any, of a Free-Standing Stock
Appreciation Right as determined at the time of grant by the Committee in its
discretion and as set forth in the applicable Agreement.
"Non-qualified Stock Option" means an Option which is not intended to
qualify as an Incentive Stock Option.
"Option" means an option to purchase shares of Common Stock, subject to the
terms and conditions provided for in Section 7.
"Option Price" means the exercise price of an option, as determined at the
time of grant by the Committee in its discretion and as set forth in the
applicable Agreement; provided, however, that the Option Price for an Incentive
Stock Option shall be no less than 100 percent of the fair Market Value of a
share of Common Stock as of the Grant Date.
"Participant" means an officer or a key employee of the Company, or one of
its Subsidiaries, who is designated by the Committee to receive an Award under
the Plan.
"Restricted Shares" means restricted shares of Common Stock, subject to the
terms and conditions provided for in Section 9.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rates and regulations thereunder, as such law, rules and regulations may be
amended from time to time.
"Stock Appreciation Right" means a right to receive the appreciation, if
any, in the Fair Market Value of shares of Common Stock, subject to the terms
and conditions provided for in Section 8.
"Subsidiary" means a corporation in respect of which the Company directly
or indirectly beneficially owns or controls a majority of the Voting Stock.
"Tandem Stock Appreciation Right" means a Stock Appreciation Right granted
in tandem with an Option.
"Voting Stock" means at any time, the then-outstanding securities entitled
to vote generally in the election of directors of a corporation.
3. Shares Available for Grant. (a) Subject to adjustment as provided in
Section 12 of this Plan, the number of shares of Common Stock that may be issued
or transferred under the Plan shall not exceed 1,225,000 shares (550,000 of
which were approved in 1993 and 675,000 of which are being added by this
Amendment and Restatement). Notwithstanding the foregoing:
(i) upon the payment of any Option Price by the transfer to the
Company of Common Stock or upon satisfaction of any withholding amount by
means of transfer or relinquishment of Common Stock, there shall be deemed
to have been issued or transferred under this Plan only the net number of
shares of Common Stock actually issued or transferred by the Company; and
(ii) total shares available under the Plan shall also include any
shares relating to awards that expire or are forfeited.
(b) Shares of Common Stock issued under the Plan may be authorized and
unissued shares or issued and re-acquired shares, as the Committee may from time
to time determine.
(c) Notwithstanding anything in this Section 3, or elsewhere in this Plan,
to the contrary, the aggregate number of shares of Common Stock actually issued
or transferred by the Company upon the exercise of Incentive Stock Options shall
not exceed 1,225,000 shares, subject to adjustments as provided in Section 12 of
the Plan.
(d) Notwithstanding anything in this Section 3, or elsewhere in this Plan,
to the contrary, no Participant shall be granted Option rights to purchase more
than 60,000 shares of Common Stock during any calendar year or receive more than
60,000 Stock Appreciation Rights in any calendar year, subject to adjustments as
provided in Section 12 of this Plan.
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4. Administration. The Plan shall be administered by the Committee, which
shall be appointed by the Board and which shall consist of two or more members
of the Board who, during the time of their service as members of the Committee,
qualify with respect to the Plan as "Non-Employee Directors", within the meaning
of Rule 16b-3 under the Exchange Act. The Committee shall have the authority to
interpret and construe the provisions of the Plan and of any agreements under
the Plan and make determinations pursuant to any Plan provision or agreement.
Each interpretation, determination or other action made or taken pursuant to the
Plan by the Committee shall be final, conclusive and binding on all persons. No
member of the Committee shall be liable for anything done or omitted to be done
by such Committee member or by any other member of the Committee in connection
with the Plan, except for his or her own willful misconduct or as expressly
provided by statute.
5. Grant or Offer of Awards. The Committee shall, from time to time, make
grants of Awards or offers for the sale of Awards to Participants.
6. Agreement. The terms and conditions of each grant or sale of Awards
shall be embodied in a written agreement (the "Agreement") in a form approved by
the Committee which shall contain terms and conditions not inconsistent with the
Plan and which shall incorporate the Plan by reference. Each Agreement shall:
(a) state the Grant Date of the Award, the number of shares of
Common Stock issuable in connection with the Award or the number of
Free-Standing Stock Appreciation Rights or Restricted Shares related to the
Award, as the case may be, and:
(i) in the case of Options (and any related Tandem Stock
Appreciation Rights), the Option Price;
(ii) in the case of Restricted Shares, the purchase price, if
any, for such Restricted Shares; or
(iii) in the case of Free-Standing Stock Appreciation Rights, the
Initial Value thereof and the maximum number of shares of Common Stock that
may be issued in connection therewith;
(b) specify any applicable vesting schedule;
(c) in the case of Options, state whether the Option is intended to
qualify as an Incentive Stock Option;
(d) provide that Restricted Shares shall only be transferable after
they vest and that all other Awards shall not be transferable by the Participant
otherwise then by will or the laws of descent and distribution or, in the case
of all awards except for Incentive Stock Options, pursuant to a qualified
domestic relations order as such term is defined in
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the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder, and during the participant's lifetime shall
only be exercisable by or paid to the Participant;
(e) provide for the treatment of Awards in the event of the
termination of the Participant's employment;
(f) provide such other additional or alternative terms as may, in the
Committee's discretion, be advisable to comply with the exemptive relief
provided by Rule 16b-3 under the Exchange Act;
(g) provide such other terms and conditions, not inconsistent with the
Plan, as the Committee may deem advisable;
(h) be signed by the recipient of the Award and a person designated by
the Committee; and
(i) be delivered to the recipient of the Award.
7. Terms of Options.
(a) Terms of Options Generally. Options may be granted to any
Participant to purchase such number of shares of Common Stock as the Committee
shall determine in its discretion. Options granted under the Plan shall comply
with the terms and conditions set forth in this Section 7.
(i) Vesting each Option shall vest and become exercisable as
determined by the Committee and as set forth in the applicable Agreement;
provided, however, that the Committee shall have the right at any time to
accelerate the vesting of any Option previously granted under the Plan, and
all Options shall immediately vest and become exercisable upon a Change in
Control. An Option shall be exercisable following a Participant's
termination of employment with the Company and its Subsidiaries at such
times and in such manner as determined by the Committee, which the
Committee may specify in the applicable Agreement or determine at the time
of such termination of employment.
(ii) Duration of Options. Each Option shall be effective for
such term as shall be determined by the Committee and set forth in the
Agreement.
(b) Payment of Option Price. Payment of the Option Price shall be made
in full at the time the notice of exercise of the Option is delivered to the
Committee and shall be in cash, bank certified or cashier's check or personal
check (unless at the time of exercise the Committee in a particular case
determines not to accept a personal check) for the Common Stock being purchased.
The Committee may determine at the time the Option is granted for Incentive
Stock Options, or at any time before exercise for Non-qualified Stock Options,
that additional forms of payment will be permitted. To the extent permitted
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by the Committee and applicable laws and regulations (including, but not limited
to, federal tax and securities laws and regulations and state corporate law), an
Option may be exercised by:
(i) delivery of shares of Common Stock held by the Participant
having a Fair Market Value equal to the Option Price and, at the discretion
of the Committee, any federal, state or local withholding tax obligations
that may arise in connection with the exercise;
(ii) delivery of a properly executed exercise notice, together
with irrevocable instructions to a broker selected or approved by the
Committee, all in accordance with the regulations of the Federal Reserve
Board, to deliver promptly to the Company the amount of the sale or loan
proceeds to pay the Option Price and, at the discretion of the Committee,
any federal, state or local withholding tax obligations that may arise in
connection with the exercise;
(iii) delivery of instructions to the Company to withhold from the
shares of Common Stock that would otherwise be issued upon exercise that
number of shares having a Fair Market Value equal to the Option Price and,
at the discretion of the Committee, any federal, state or local withholding
tax obligations that may arise in connection with the exercise;
(iv) delivery of a full-recourse promissory note executed by the
Participant in an amount which shall equal the Option Price and, at the
discretion of the Committee, any federal, state or local withholding tax
obligations that may arise in connection with the exercise; provided,
however, that (A) such note delivered in connection with an Incentive Stock
Option shall, and such note delivered in connection with a Non-qualified
Stock Option may, in the sole discretion of the Committee, bear interest at
a rate specified by the Committee, but in no case less than the rate
required by the Internal Revenue Service to avoid imputation of interest
(taking into account any exceptions to the imputed interest rules) for
purposes of the Code; (B) the Committee in its sole discretion shall
specify the term and other provisions of such note at the time an Incentive
Stock Option is granted or at the time the note is entered into with
respect to a Non-qualified Stock Option; (C) the Committee shall require
that the Participant pledge the Participant's shares of Common Stock to the
Company for the purpose of securing the payment of such note and shall
require that the certificate representing such shares be held in escrow in
order to perfect the Company's security interest and shall conspicuously
note on the face or back of the certificate that future payments are
required to be made; and (D) the Committee in its sole discretion may at
any time restrict or rescind the Participant's right to deliver a note,
upon notification to the Participant.
(c) Reload Options. The Committee may provide in the applicable
Agreement that the Participant will automatically be granted a new Option (the
"Second Option") in the event that the Participant exercises a prior Option
(the "First Option") by paying some or all of the exercise price of the First
Option with shares of Common Stock or by satisfying some or all of the
Participant's tax liability incurred in connection with the
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first Option by having shares of Common Stock withheld to satisfy such
liability. The number of shares of Common Stock subject to the Second Option and
the other terms and conditions thereof shall be determined by the Committee and
set forth in the Agreement applicable to the First Option.
(d) Effect of Exercise on Related Tandem Stock Appreciation Rights.
The exercise of an Option shall result in the cancellation of any related Tandem
Stock Appreciation Rights on a share-for-share basis.
(e) Limitation on Exercise. The Options shall not be exercisable
unless either the Common Stock subject to the Options has been registered under
the Securities Act of 1933, as amended and qualified under applicable state
"blue sky" laws in connection with the offer and sale thereof, or the
Participant has furnished the Company with an investment representation
satisfactory to the Company that such registration and qualification is not
required as a result of the availability of an exemption from registration under
such laws.
(f) Delivery of Certificate. As soon as practicable following the
exercise of an Option, a certificate in the Participant's name evidencing the
appropriate number of shares of Common Stock issued in connection with such
exercise shall be delivered to the Participant.
8. Terms of Stock Appreciation Rights.
(a) Terms of Stock Appreciation Rights Generally. Each Stock
Appreciation Right granted under the Plan shall comply with the terms and
conditions set forth in this Section 8.
(i) Grants of Stock Appreciation Rights. Each Tandem Stock
Appreciation Right shall relate to a specific Option granted under the Plan
and in the case of Incentive Stock Options may be granted only concurrently
with the Option to which it relates. In the case of Non-qualified Stock
Options, Tandem Stock Appreciation Rights may be granted at any time prior
to the exercise, termination or expiration of such Option. Free-Standing
Stock Appreciation Rights may be granted by the Committee at any time to
any Participant.
(ii) Vesting, Exercise and Duration of Stock Appreciation Rights.
A Tandem Stock Appreciation Right shall be exercisable by a Participant
only at such times as the Option to which it relates may be exercised,
shall be forfeited when the related Option is forfeited and may expire no
later than the expiration of the related Option. Each Free-Standing Stock
Appreciation Right shall vest and become exercisable as determined by the
Committee and as set forth in the applicable Agreement; provided, however,
that all Free-Standing Stock Appreciation Rights shall immediately vest and
become exercisable upon a Change in Control.
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(iii) Value of Stock Appreciation Rights. A vested Stock
Appreciation Right shall entitle a Participant to receive from the Company,
upon exercise of the right, an amount (payable in the manner described in
Section 8(c)) equal to the Fair Market Value on the exercise date of the
Stock Appreciation Right of the total number of shares of Common Stock for
which the Stock Appreciation Right is exercised, less (A) in the case of
Tandem Stock Appreciation Rights, the Option Price that the Participant
would have otherwise been required to pay to purchase such shares had the
Option been exercised with respect to such shares or (B) in the case of a
Free-Standing Stock Appreciation Right, the Initial Value.
(iv) Number of Shares Covered by a Tandem Stock Appreciation
Right. In no case may the number of shares of Common Stock covered by a
Tandem Stock Appreciation Right exceed the number of shares of Common Stock
covered by the related Option.
(b) Effect of Exercise of Tandem Stock Appreciation Right on Related
Option. The exercise of a Tandem Stock Appreciation Right shall automatically
result in the cancellation of the related Option on a share-for-share basis.
(c) Payment. Payment to a Participant upon the exercise of a Stock
Appreciation Right shall be made as soon as practicable following such exercise
and, in the discretion of the Committee, may be made in cash, in shares of
Common Stock or a combination of cash and shares of Common Stock; provided,
however, that payment shall not be made in Common Stock unless Common Stock has
been registered under the Securities Act, or the Company has determined that an
exemption under such Act is available and applicable to such exercise and
payment in Common Stock.
(d) Delivery of Certificate. As soon as practicable following the
exercise of a Stock Appreciation Right that is paid in whole or part in Common
Stock, a certificate evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise shall be delivered to the Participant.
9. Terms of Restricted Shares.
(a) Terms of Restricted Shares Generally. Restricted Shares may be
granted or offered for sale to any Participant, may be granted solely in
consideration for services rendered or to be rendered to the Company, or its
subsidiaries or affiliates, and may also be granted in substitution and exchange
for "restricted property" (within the meaning of Section 83 of the Code) held by
a Participant. If Restricted Shares are offered for sale hereunder, the purchase
price shall be payable in cash, or, in the discretion of the Committee and to
the extent provided in the applicable Agreement, in shares of Common Stock
already owned by the Participant, in other property or in any combination of
cash, shares of Common Stock or such other property. The Restricted Shares
granted or offered for sale under the Plan shall comply with the terms and
conditions set forth in this Section 9.
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(b) Purchase Price; Offering Period. Restricted Shares offered for
sale shall be sold at a purchase price determined at the time of offering by the
Committee in its discretion and as set forth in the applicable Agreement.
(c) Delivery of Certificate. At the time of grant or sale of
Restricted Shares to a Participant, a certificate evidencing the appropriate
number of shares of Common Stock granted or sold to the Participant as
Restricted Shares shall be issued in the Participant's name but shall be held by
the Company for the account of the Participant until such time as such
Restricted Shares vest hereunder. Upon such vesting, the certificate evidencing
such shares shall be delivered to the Participant.
(d) Vesting. Each Restricted Share shall vest as determined by the
Committee and as set forth in the applicable agreement; provided, however, that
the Committee shall have the right at any time to accelerate the vesting of any
Restricted Shares previously granted under the Plan, and all Restricted Shares
shall immediately vest upon a Change in Control.
10. Other Awards. The Committee shall have the authority to specify the
terms and provisions of other equity-based or equity-related Awards not
described above which the Committee determines to be consistent with the purpose
of the Plan and the interests of the Company, which Awards may provide for the
acquisition or future acquisition of Common Stock by Participants.
11. Effectiveness of the Plan. The Plan was effective on the Effective
Date.
12. Certain Adjustments. The Board may make or provide for such adjustments
in the numbers of shares of Common Stock covered by outstanding Awards, in the
prices per share applicable to Options and Stock Appreciation Rights and in the
kind of shares covered thereby, as the Board, in its sole discretion, exercised
in good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of Participants or optionees that otherwise would
result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, or (b)
any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Board, in its
discretion, may provide in substitution for any or all outstanding Awards under
this Plan such alternative consideration as it, in good faith, may determine to
be equitable in the circumstances and may require in connection therewith the
surrender of all Awards so replaced. The Board may also make or provide for such
adjustments in the numbers of shares specified in Section 3 of this Plan as the
Board in its sole discretion, exercised in good faith, may determine is
appropriate to reflect any transaction or event described in this Section 12.
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13. Amendment of the Plan. The Board may at any time and from time to time
alter, amend, suspend or terminate the Plan in whole or in part; provided,
however, that any amendment which must be approved by the stockholders of the
Company in order to comply with applicable law or the rules of any national
securities exchange upon which the shares of Common Stock are traded or quoted
shall not be effective unless and until such approval has been obtained.
Presentation of the Plan or any amendment thereof for stockholder approval shall
not be construed to limit the Company's authority to offer similar or dissimilar
benefits in plans that do not require stockholder approval.
14. Termination. Unless previously terminated pursuant to Section 14, the
Plan shall terminate on the tenth anniversary of the Effective Date, and no
further Awards may be granted hereunder after such date; provided, however, that
if the Plan is adopted by the Board prior to the Effective Date, no Incentive
Stock Option shall be granted under the Plan on or after the tenth anniversary
of the date of such adoption of the Plan by the Board of Directors. Awards then
outstanding may continue to be exercised, vest or be paid in accordance with
their terms.
15. Use of Proceeds. The proceeds received by the Company from the sale of
Common Stock pursuant to the sale or exercise of Awards under the Plan shall be
added to the Company's general funds and used for general corporate purposes.
16. Miscellaneous.
(a) No Rights to Grants or Continued Service. Except as expressly
provided for in the Plan, no Participant shall have any claim or right to be
granted an Award under the Plan. Neither the Plan nor any action taken hereunder
shall be construed as giving any Participant any right to be retained in the
employ or service of the Company.
(b) No Restriction on Right of Company to Effect Corporate Changes.
Nothing in the Plan shall affect the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into or exchangeable
for Common Stock, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
(c) Governing Law. The Plan and all agreements entered into under the
Plan shall be construed in accordance with and governed by the law of the State
of Delaware.
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(d) Withholding. As a condition to the making of any Award, the vesting
of any Award or the lapse of the restrictions pertaining thereto, the Company
may, in the discretion of the Committee, require the Participant to pay such sum
to the Company as may be necessary to discharge the Company's obligations with
respect to any taxes, assessments or other governmental charges imposed on
property or income received by a Participant pursuant to the Plan. In the
discretion of the Committee, such payment may be in the form of cash or other
property. In the discretion of the Committee, the Company may:
(i) make available for delivery a lesser number of shares, in
satisfaction of such taxes, assessments or other governmental charges;
(ii) deduct or withhold from any payment or distribution to a
Participant whether or not pursuant to the Plan; or
(iii) offer loans to Participants to satisfy withholding requirements
on such terms as the Committee may determine, which loans may be
non-interest bearing.
(e) Stockholder Rights. A Participant shall have no rights as a
stockholder with respect to any shares issued or issuable with respect to an
Award until a certificate or certificates evidencing such shares shall have been
issued to or for the benefit of such Participant, and no adjustment shall be
made for dividends or distributions or other rights in respect of any share for
which the record date is prior to the date upon which the Participant shall
become the holder of record thereof; provided, however, that a Participant shall
have all rights of a stockholder as to any Restricted Shares sold or granted to
the Participant, including the right to receive dividends and the right to vote
for directors and upon other matters in accordance with the Company's charter,
except that the Participant shall not have the right to transfer, sell,
hypothecate, pledge or otherwise alienate any unvested Restricted Share.
(f) Construction of the Term "Participant". Whenever the word
"Participant" is used in this Plan under circumstances where the provision
should logically be construed to apply to the executors, the administrators, the
Beneficiary, or any other person or persons to whom an Award may be transferred
by will or by the laws of descent and distribution or by reason of the death of
the Participant, the word "Participant" shall be deemed to include such person
or persons.
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APPENDIX A
WOLVERINE TUBE, INC.
This Proxy is solicited on Behalf of the Board of Directors.
The undersigned hereby appoints John M. Quarles or James E. Deason as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all shares of common stock of
Wolverine Tube, Inc. (the "Company") held of record by the undersigned at the
close of business on March 31, 1997 at the Annual Meeting of Stockholders to be
held on May 22, 1997 or any adjournments thereof.
1. Election of Directors:
Donald C. Blasius Gregory M. Trickey
[ ] FOR all Nominees [ ] WITHHELD on all Nominees
Except as otherwise provided below
Withhold as to
-------------------------------------------------------------
(TO WITHHOLD AUTHORITY AS TO ANY NOMINEE, WRITE NAME ON LINE PROVIDED)
2. Amendment and Restatement of the Company's 1993 Equity Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Appointment of Ernst & Young LLP as Independent Auditors for the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on the other side)
(Continued from the other side)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals 1, 2, and 3.
Date
------------------------
----------------------------
Signature
(Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such.)
