<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
WOLVERINE TUBE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
April 17, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Wolverine Tube, Inc. on Thursday, May 21, 1998, 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 INDICATE YOUR VOTE, AND
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
<PAGE> 3
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 21, 1998
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 21, 1998, 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 II directors of the Company to serve a
three-year term.
2. To approve and adopt an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of Common Stock of the Company from
20,000,000 shares to 40,000,000 shares.
3. To approve and adopt an amendment to the Company's 1993 Stock
Option Plan for Outside Directors to increase the aggregate
number of shares of Common Stock available for issuance
thereunder from 50,000 to 105,000.
4. To ratify the appointment of Ernst & Young LLP as the
independent auditors of the Company for the fiscal year
ending December 31, 1998.
5. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on March 31, 1998 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 17, 1998
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> 4
WOLVERINE TUBE, INC.
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1998
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............................................................................................8
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..........................................................15
COMPANY STOCK PRICE PERFORMANCE .................................................................................18
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934....................................................................................19
PROPOSAL TWO - AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION............................................................................19
PROPOSAL THREE - AMENDMENT TO THE 1993 STOCK OPTION
PLAN FOR OUTSIDE DIRECTORS..............................................................................20
PROPOSAL FOUR - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS....................................................................................22
OTHER BUSINESS...................................................................................................23
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT THE NEXT ANNUAL MEETING..............................................................................23
</TABLE>
i
<PAGE> 5
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 21, 1998, 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 17, 1998, the approximate date on which these proxy
solicitation materials and the Annual Report to Stockholders for the fiscal
year ended December 31, 1997, 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
has retained Morrow & Company, Inc. (the "Solicitor") to assist in the
solicitation of proxies. The Company will pay $7,500 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.
RECORD DATE, VOTING AND REVOCABILITY OF PROXIES
The Company had outstanding on March 31, 1998 (the "Record Date"),
14,100,550 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
<PAGE> 6
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 (a) the election of directors,
which is determined by a plurality if a quorum is present and voting and (b)
the amendment to the Company's Restated Certificate of Incorporation, which
requires approval by the holders of a majority of the outstanding shares of
Common Stock. 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> 7
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of March 31, 1998, 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>
The Prudential Insurance Company of America(a) 1,805,885 12.6%
751 Broad Street
Newark, New Jersey 07102-3777
Smith Barney, Inc. (b) 1,003,082 7.0%
Salomon Smith Barney Holdings, Inc.
Travelers Group, Inc.
338 Greenwich Street
New York, New York 10013
Trinity I Fund, L.P. (c) 788,300 5.5%
TF Investors, L.P.
Trinity Capital Management, Inc.
Thomas M. Taylor
Portfolio X. Investors, L.P.
Portfolio Genpar L.L.C.
201 Main Street, Suite 2600
Fort Worth, Texas 76102
Chris A. Davis - - - -
John L. Duncan (d) 11,000 *
Thomas P. Evans (e) 5,334 *
Jan K. Ver Hagen (f) 7,333 *
Gail O. Neuman - - - -
John M. Quarles (g) 222,401 1.6%
Dennis J. Horowitz (h) 25,000 *
Thomas B. Roller (i) -- - -
James E. Deason (j) 14,500 *
Alan L. Smith (k) 2,200 *
Thomas J. Ruble (l) 5,200 *
Gregory M. Trickey (m) 10,001 *
All directors and executive officers as a group (17 persons) 432,670 3.0%
</TABLE>
- -------------------------------
* REPRESENTS LESS THAN 1%.
(footnotes continued on following page)
3
<PAGE> 8
(a) This information was provided to the Company pursuant to Amendment No.
2 to Schedule 13G filed with the Securities and Exchange Commission
(the "Commission") on February 10, 1998. According to such filing, The
Prudential Insurance Company of America owns the shares directly or
indirectly, and has sole voting and dispositive power with respect to
935,100 shares and shared voting and dispositive power with respect to
870,785 shares.
(b) This information was provided to the Company pursuant to a Schedule
13G filed with the Commission on February 6, 1998. According to such
filing, the holders listed own the shares of Common Stock directly or
indirectly, with Smith Barney, Inc. having sole voting and dispositive
power with respect to an aggregate of 935,465 shares and Salomon Smith
Barney Holdings, Inc. ("SSB") and Travelers Group, Inc. ("TRV") having
shared voting and dispositive power with respect to an aggregate of
1,003,082 shares. SSB and TRV disclaim beneficial ownership of all of
such shares of Common Stock deemed to be beneficially owned.
(c) This information was provided to the Company pursuant to a Schedule
13D filed with the Commission on February 10, 1998. According to such
filing, the holders listed own the shares of Common Stock directly or
indirectly, and collectively have sole voting and dispositive power
with respect to an aggregate of 788,300 shares of Common Stock.
(d) Includes 9,000 shares subject to options exercisable within 60 days of
March 31, 1998.
(e) Includes 5,333 shares subject to options exercisable within 60 days of
March 31, 1998.
(f) Includes 4,333 shares subject to options exercisable within 60 days of
March 31, 1998.
(g) Includes 42,400 shares subject to options exercisable within 60 days
of March 31, 1998.
(h) Includes 25,000 shares subject to options exercisable within 60 days
of March 31, 1998.
(i) Based upon information known to the Company as of March 31, 1997. Mr.
Roller served as President and Chief Executive Officer of the Company
from September 16, 1996 until March 31, 1997.
(j) Includes 14,500 shares subject to options exercisable within 60 days
of March 31, 1998.
(k) Includes 1,800 shares subject to options exercisable within 60 days of
March 31, 1998.
(l) Includes 4,700 shares subject to options exercisable within 60 days of
March 31, 1998.
(m) Mr. Trickey retired as Chief Operations Officer and resigned all
positions as an officer and director of the Company effective December
31, 1997.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board has nominated Messrs. Duncan and Ver Hagen to be reelected
as Class II directors, each for a three-year term expiring in 2001. 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 director as management may recommend in the place of such nominee.
THE BOARD RECOMMENDS VOTING "FOR" THE TWO NOMINEES LISTED BELOW.
4
<PAGE> 9
INFORMATION REGARDING NOMINEES
On March 23, 1998, Mr. Dennis J. Horowitz joined the Company as
President, Chief Executive Officer and a director of the Company. On March 26,
1998, Mr. Quarles announced his retirement as Chairman and as a member of the
Board of Directors, effective at the conclusion of the Annual Meeting of
Stockholders on May 21, 1998. In connection therewith, Mr. Ver Hagen was
elected to the new position of non-executive Chairman of the Board of
Directors, effective upon the retirement of Mr. Quarles.
The Restated 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 Ms.
Davis and Mr. Horowitz; the Class II directors are composed of Messrs. Duncan,
Quarles (who is not standing for re-election) and Ver Hagen; and the Class III
directors are composed of Ms. Neuman and Messrs. Deason and Evans. Directors
hold office until their terms expire and their successors have been elected and
qualified.
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 II DIRECTORS WHOSE TERMS WILL EXPIRE IN 2001:
<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 Company since 64
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.
Jan K. Ver Hagen Mr. Ver Hagen has been a director of the Company since 60
January 1996 and has been elected to serve as non-executive
Chairman of the Board of Directors upon the retirement of the
current Chairman at the conclusion of the meeting on May 21,
1998. Mr. Ver Hagen currently serves as Vice Chairman and
a Director of United Dominion Industries, Limited ("UDI").
Prior to his election to his current position at UDI,
Mr. Ver Hagen previously served as President and Chief
Operating Officer of UDI. Prior to joining UDI in May 1994,
Mr. Ver Hagen was Vice Chairman of Emerson Electric Co.
from 1988 to 1994.
</TABLE>
5
<PAGE> 10
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 since 50
October 1995. Mr. Deason has been the Executive
Vice President, Chief Financial Officer and Secretary
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.
Thomas P. Evans Mr. Evans has been a director since December 1995. 40
Mr. Evans is the President, Emerging Markets, of
Permal 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.
Gail O. Neuman Ms. Neuman has been a director of the Company 51
since November 1997. Ms. Neuman serves as the
Vice President-Human Resources and General
Counsel of Nissan Motor Manufacturing Corporation
U.S.A. since 1981. Ms. Neuman also serves as a
director of First Union National Bank of Tennessee.
<CAPTION>
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2000:
Principal Occupation During
Name the Past Five Years Age
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Chris A. Davis Ms. Davis has been a director of the Company since 47
October 1997. Ms. Davis is the Executive Vice
President and Chief Financial Officer and a director
of Gulfstream Aerospace Corporation since July
1993. Ms. Davis previously served as Chief
Financial Officer for General Electric Co.'s
Electronic Systems Division from 1990 to 1993.
</TABLE>
6
<PAGE> 11
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dennis J. Horowitz Mr. Horowitz has been the President and Chief 51
Executive Officer and a director of the Company
since March 1998. Prior to joining the Company,
Mr. Horowitz served as Corporate Vice President and
President of the Americas of AMP Incorporated
("AMP"), a high technology electric connector and
interconnection systems company, since September
1994. Prior to joining AMP, Mr. Horowitz was
employed for over fourteen years at North American
Philips Corporation where he served from October
1993 to August 1994 as President and Chief
Executive Officer of Philips Technologies and
previously served as President and Chief Executive
Officer Philips Magnavox CATV Systems and
President and Chief Executive Officer of Philips
Discrete Products Division. Mr. Horowitz also
serves as a director of Aerovox Incorporated,
Superconductor Technologies, Inc. and Amonix, Inc.
</TABLE>
BOARD MEETINGS AND COMMITTEES
Mr. Evans and Ms. Neuman currently serve as members of the
Compensation Committee of the Board of Directors (the "Compensation
Committee"). The Compensation Committee held two meetings during 1997. The
responsibilities of the Compensation Committee are described under
"Compensation Committee Report on Executive Compensation."
Mr. Duncan and Ms. Davis currently serve as members of the Company's
Audit Committee. 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 one
meeting during 1997.
Messrs. Quarles, Horowitz 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 1997. Mr. Quarles will resign his membership on such committee upon his
retirement from the Company.
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
1997, does not have any procedures established for the consideration of
nominees
7
<PAGE> 12
recommended by stockholders. Mr. Quarles will resign his membership on such
committee upon his retirement from the Company.
During 1997, the Board of Directors held meetings or acted by written
consent ten 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 except for Mr. Evans who was
excused from certain board meetings due to other business commitments.
BOARD COMPENSATION
The Company's 1993 Stock Option Plan for Outside Directors (the
"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 Plan. The Plan is currently
administered by the Board of Directors. Under the 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, 1997, Mr. Ver Hagen
was granted 1,000 options with an exercise price of $36.38 per share. On
October 29, 1997, Ms. Davis was granted 5,000 options with an exercise price of
$31.125 per share. On November 11, 1997, Ms. Neuman was granted 5,000 options
with an exercise price of $31.813 per share. On December 7, 1997, Mr. Evans
received 1,000 options with an exercise price at $31.938 per share. On December
14, 1997, Mr. Duncan received 1,000 options with an exercise price of $31.313
per share. As of December 31, 1997, options to purchase an aggregate of 40,000
shares were outstanding under the Plan at an average per share exercise price
of $29.36.
Options granted under the 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 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 Plan is equal to the fair
market value of the Common Stock on the date of grant. Initial Options granted
under the 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 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 such
director respectively chairs.
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 1997 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, 1997, 1996
and 1995.
8
<PAGE> 13
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
AWARDS
----------------
ANNUAL COMPENSATION COMMON STOCK
-------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (SHARES) COMPENSATION(A)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John M. Quarles 1997 $317,424 $120,000 -- $ 5,469
Chairman and Interim Chief 1996 387,803 -- 10,000 3,692
Executive Officer (b) 1995 335,000 -- 10,000 3,601
Thomas B. Roller 1997 112,500 -- -- 710,000
Former President and 1996 131,250 -- 30,000 70
Chief Executive Officer (c)
Gregory M. Trickey 1997 241,020 -- 15,000 283,964
Retired Chief Operations 1996 203,220 -- 10,000 2,937
Officer (d) 1995 173,750 -- 10,000 2,470
James E. Deason 1997 205,839 65,000 17,000 4,203
Executive Vice President, Chief 1996 178,158 -- 12,000 2,351
Financial Officer and Secretary 1995 153,690 -- 7,500 1,817
Thomas J. Ruble 1997 168,207 42,500 4,500 3,319
Senior Vice President, 1996 157,161 -- 5,000 2,317
Operations 1995 116,250 -- 3,000 1,445
Alan L. Smith 1997 163,202 45,000 5,000 2,180
Senior Vice President and 1996 140,730 -- 2,000 1,800
General Manager, Fabricated
Products Group
</TABLE>
- -----------------------------
(a) The 1995 amounts hereunder include 401(k) matching contributions made
by the Company of $2,310, $1,612, $2,266 and $1,445 to Messrs.
Quarles, Trickey, Deason and Ruble, respectively. The 1996 amounts
include 401(k) matching contributions made by the Company of $2,671,
$2,733, $2,147, $2,276 and $1,594 to Messrs. Quarles, Trickey, Deason,
Ruble, and Smith, respectively. The 1997 amounts include 401(k)
matching contributions made by the Company of $4,150, $3,753, $3,550,
$3,114 and $1,976 for Messrs. Quarles, Trickey, Deason, Ruble and
Smith, respectively. In addition, the amounts hereunder include
insurance premiums paid by the Company for term life insurance
policies for the benefit of the Named Executive Officers. With respect
to Mr. Roller and Mr. Trickey, respectively, the 1997 amounts reflect
compensation paid or accrued in connection with Mr. Roller's
resignation and Mr. Trickey's retirement from all positions with the
Company. See "Plans and Arrangements - Severance Agreements."
(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) 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. Trickey retired as Chief Operations Officer and resigned all
positions as an officer and director of the Company effective December
31, 1997. See "Plans and Arrangements - Severance Agreements."
9
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option
grants made to any Named Executive Officers during the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED RATES OF
SHARES OF TOTAL STOCK PRICE APPRECIATION
COMMON STOCK OPTIONS FOR OPTION TERM(B)
UNDERLYING GRANTED TO --------------------------
OPTIONS EMPLOYEES EXERCISE PRICE
NAME GRANTED(A) IN 1997 PER SHARE EXPIRATION DATE 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gregory M. Trickey 10,000 5.6 37.25 02/13/07 234,262 593,668
5,000 2.8 25.63 04/21/97 80,592 204,238
James E. Deason 12,000 6.8 37.25 02/13/07 281,114 712,402
5,000 2.8 25.63 04/21/07 80,592 204,238
Thomas J. Ruble 4,500 2.5 37.25 02/13/07 105,418 267,151
Alan L. Smith 5,000 2.8 37.25 02/13/07 117,131 296,834
</TABLE>
- ---------------------------------
(a) Options vest at the rate of 20% per year for five years starting on
February 13, 1997 for Messrs. Trickey, Deason, Ruble and Smith and on
April 21, 1997 for Messrs. Trickey and Deason.
(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 $37.25 to $60.68 and $96.92 per share, respectively, for Messrs.
Trickey, Deason, Ruble and Smith and from $25.63 to $41.75 and $66.48
per share, respectively, for Messrs. Trickey and Deason.
10
<PAGE> 15
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, 1997, the aggregate number of
unexercised options to purchase Common Stock granted in all years to any of the
Named Executive Officers and held by them as of December 31, 1997, 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, 1997:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997 (B)
SHARES VALUE -------------------------------------------------------
ACQUIRED REALIZED
NAME ON EXERCISE (A) VESTED UNVESTED VESTED UNVESTED
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John M. Quarles -- -- 31,600 10,800 $532,764 $254,988
Gregory M. Trickey(c) -- -- 12,518 -- 244,950 --
James E. Deason -- -- 7,200 32,300 25,800 58,425
Thomas J. Ruble -- -- 2,200 10,300 6,000 9,900
Alan L. Smith -- -- 400 6,600 -- --
</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, 1997 of $31.00 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) Mr. Trickey retired as Chief Operations Officer and resigned from all
positions as an officer and director of the Company effective December
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
11
<PAGE> 16
pension benefits. A 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 $160,000
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 1997 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 26,071 34,761 43,451 52,141 61,516
150,000 31,696 42,261 52,826 63,391 74,641
175,000 37,321 49,761 62,201 74,641 87,766
200,000 42,946 57,261 71,576 85,891 100,891
250,000 54,196 72,261 90,326 108,391 127,141
300,000 65,446 87,261 109,076 130,891 153,391
350,000 76,696 102,261 127,826 153,391 179,641
400,000 87,946 117,261 146,576 175,891 205,891
450,000 99,196 132,261 165,326 198,391 232,141
500,000 110,446 147,261 184,076 220,891 258,391
</TABLE>
12
<PAGE> 17
As of December 31, 1997, Mr. Quarles had 25 years of credited service
in the Retirement Plan, Mr. Trickey had 24 years, Mr. Smith had 2 years, and
each of Mr. Deason and Mr. Ruble had 3 years. Mr. Quarles, Mr. Trickey, Mr.
Deason, Mr. Ruble and Mr. Smith had compensation of $317,424, $241,020,
$205,839, $168,207 and $163,202, for purposes of the above table, as of
December 31, 1997. Mr. Trickey retired as Chief Operations Officer and resigned
from all positions as an officer and director of the Company effective December
31, 1997.
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 was compensated in
accordance with the terms of the Agreement. After many years of loyal service,
Mr. Quarles will retire from the Company immediately following the Annual
Meeting of Stockholders.
EMPLOYMENT OF DENNIS J. HOROWITZ. In March 1998, Dennis J. Horowitz
was appointed as President, Chief Executive Officer and a director of the
Company. The Company authorized an initial base salary of $500,000 and the
granting of stock options to purchase 125,000 shares of Common Stock. Mr.
Horowitz is also eligible to receive an annual bonus under the Company's key
manager bonus plan and participate in the Company's long term incentive plans.
In addition, Mr. Horowitz is entitled to an automobile allowance, insurance,
and relocation expenses.
The Company has entered into a Severance Agreement with Mr. Horowitz
that provides that if he is terminated for cause or resigns, other than for
certain enumerated reasons, he is entitled to receive only the severance
benefits provided by the Company's standard procedure and practice and payment
of his salary through the date of termination or resignation. If Mr. Horowitz
is terminated without cause or resigns for one of the enumerated reasons, he is
entitled to (i) two years' salary if such termination or resignation occurs
within one year following a change of control plus any unused vacation time for
that year (payable either in a lump sum or in periodic payments over two years)
plus temporary continuation of his medical and life insurance benefits
13
<PAGE> 18
or (ii) in all other such events two years' salary plus any unused vacation
time for that year (payable either in a lump sum or in periodic payments over
two years) plus temporary continuation of his medical and life insurance
benefits. A "change in control" is defined by the agreement to mean: (i) a
merger, consolidation or other reorganization of the Company that results in
the shareholders of the Company holding less than a majority of the voting
power of the resulting entity after such a transaction; (ii) a sale or transfer
of all or substantially all of the Company's assets to an entity in which the
shareholders of the Company hold less than a majority of the voting power of
such entity immediately following such sale or transfer; (iii) the filing of a
report pursuant to the provisions of the Securities Exchange Act of 1934 (the
"Exchange Act") disclosing that a person or entity beneficially owns shares
representing at least 15% of the Company's voting power; (iv) disclosure by the
Company, pursuant to the requirements of the Exchange Act, that a change in
control (as defined in the Exchange Act) has occurred or may occur pursuant to
a then-existing agreement; or (v) during a period of two consecutive years, the
failure to reelect a majority of the members of the Company's Board of
Directors to the Board.
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 AGREEMENTS. The Company has entered into severance
agreements with each of Messrs. Deason, Ruble and Smith (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.
The Company's Severance Agreements with Messrs. Deason, Ruble and
Smith 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.
The Company had also entered into a Severance Agreement with Mr.
Trickey on April 29, 1997, and in connection with his retirement from the
Company Mr. Trickey was paid $280,006 on January 30, 1998 in satisfaction of
all obligations of the Company under his Severance Agreement.
The Company had entered into a 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
14
<PAGE> 19
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. In 1997, Mr. Roller was paid $372,500 in connection with that
agreement. 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 has in the past 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 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 for executive officers (other than the Chief Executive
Officer (the "CEO")) are adjusted annually, following a review by 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
15
<PAGE> 20
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 generally 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. Mr. Roller
served as CEO until his resignation effective March 31, 1997, at which time Mr.
Quarles was appointed to serve as Interim CEO until a new CEO was appointed.
During his tenure as CEO, Mr. Roller was compensated pursuant to the terms of
his employment and the Compensation Committee had not made any assessment
regarding future compensation prior to his resignation. In Mr. Quarles' role as
Interim CEO, Mr. Quarles was compensated pursuant to the terms of his existing
employment agreement. Accordingly, the Compensation Committee did not undertake
any review of the CEO's salary for 1997. See "Plans and Arrangements --
Employment Agreement with John M. Quarles."
BONUSES
Annual cash bonus objectives are generally governed by the management
bonus plan and are heavily dependent on the financial performance of the
Company, and less so on individual performance. The Board of Directors of the
Company reviews the business plan developed by management and then approves the
objectives for the year, capital expenditure plans and other factors, and sets
a target amount of earnings. The Compensation Committee then incorporates 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
reviews this separately, with the amount allocated by salary ratio as a base.
Performance factors are 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. During fiscal year 1997, the Compensation Committee did not
perform a review of the bonus objectives for the CEO. The Company's long-term
incentive plans for 1996 and 1997 were developed in consultation with senior
management and Buck Consultants, and the Company's senior executive officers
are eligible for awards under each plan 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. 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
16
<PAGE> 21
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. 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. During 1997, no
stock options were granted to Mr. Roller prior to his resignation as CEO on
March 31, 1997 or to Mr. Quarles in his role as Interim CEO.
SUMMARY
The Company's 1997 earnings fell short of the target set by the Board
of Directors, which governs the management bonus program. Therefore, there were
no bonus payments under that program made for 1997; however, the Compensation
Committee did determine to award discretionary bonuses to certain management
personnel (including the Interim CEO) based upon individual performance during
1997. Long term incentive plans were adopted in 1996 and 1997 and target
performance under each plan is measured over a four-year period. Based on
available information, the Compensation Committee believes that the Company's
level of base salaries is competitive, and that the Company's bonus programs
will cause bonus levels to be competitive as well. The Committee continually
reviews the Company's compensation programs to ensure that the overall package
is competitive, balanced, and that proper incentives and rewards are provided.1
Compensation Committee
T. P. Evans
G. O. Neuman
- -------------------------
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> 22
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, with the cumulative total stockholder return of the
S&P Industrials Index, and the NYSE Composite Index, assuming reinvestment of
any dividends.
TOTAL CUMULATIVE RETURNS
<TABLE>
<CAPTION>
8/13/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Wolverine Tube, Inc. 100 127 153 242 227 200
S&P Industrials 100 108 112 151 185 242
NYSE Composite 100 106 106 143 174 231
</TABLE>
18
<PAGE> 23
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 and written representations from the Company's executive officers and
directors, the Company believes that, for the fiscal year ended December 31,
1997, the Section 16(a) filing requirements were complied with by all incumbent
executive officers, directors and director nominees during the year.
PROPOSAL TWO - AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
On March 26, 1998, the Board of Directors unanimously approved, and
recommends that the stockholders adopt, an amendment to the Company's Restated
Certificate of Incorporation (the "Restated Certificate") to increase the
number of authorized shares of Common Stock from 20,000,000 to 40,000,000 (the
"Authorized Stock Amendment"). The full text of the Authorized Stock Amendment
is included in Annex A to this Proxy Statement.
AUTHORIZED STOCK AMENDMENT
The Board of Directors believes that it is in the Company's best
interests to increase the number of authorized shares of Common Stock in order
to have additional authorized but unissued shares available for issuance to
meet business needs as they arise. The Board of Directors believes that the
availability of such additional shares will provide the Company with greater
flexibility in considering potential future actions involving the issuance of
stock identified by the Board of Directors, without the possible expense and
delay of having to convene a special stockholders' meeting.
SUMMARY OF AUTHORIZED STOCK AMENDMENT
The Authorized Stock Amendment would amend the Restated Certificate to
provide for an increase in the number of authorized shares of Common Stock from
20,000,000 to 40,000,000. The Authorized Stock Amendment will not increase or
otherwise affect the number of authorized shares of preferred stock which may
be issued by the Company. If approved by the stockholders, the proposed
amendment will become effective upon the filing of an amendment to the Restated
Certificate with the Secretary of State of Delaware, which will occur as soon
as reasonably practicable following such approval.
The authorized shares of Common Stock in excess of those issued will
be available for issuance at such times and for such corporate purposes as the
Board of Directors may deem advisable, without further action by the Company's
stockholders, except as may be required by applicable law or by the rules of
any stock exchange or national securities association trading
19
<PAGE> 24
system on which the securities may be listed or traded. Upon issuance, such
shares will have the same rights as the outstanding shares of Common Stock.
Holders of Common Stock have no preemptive rights.
Other than with respect to the reservation of Common Stock in
connection with the Company's stock options plans, the Company has no other
plans, or existing or proposed arrangements, agreements or understandings to
issue, or reserve for future issuance, and of the additional shares of Common
Stock which would be authorized by the Authorized Stock Amendment. The Board of
Directors does not intend to issue any Common Stock except on terms which the
Board deems to be in the best interests of the Company and its then existing
stockholders. Any future issuance of Common Stock will be subject to the rights
of holders of outstanding shares of any preferred stock which the Company may
issue in the future.
VOTE REQUIRED TO APPROVE THE AUTHORIZED STOCK AMENDMENT
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required to approve the Authorized Stock Amendment.
THE BOARD RECOMMENDS VOTING "FOR" THIS PROPOSAL.
PROPOSAL THREE - AMENDMENT TO THE 1993
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
On March 26, 1998, the Board of Directors of the Company adopted an
amendment of the Company's 1993 Stock Option Plan for Outside Directors (the
"Plan") to provide for an increase in the maximum number of shares of Common
Stock that may be issued and sold thereunder from 50,000 shares to 105,000
shares. The purposes of the Plan are to promote the long-term success of the
Company by creating a long-term mutuality of interests between the directors
and stockholders of the Company, to provide an additional inducement for such
directors to remain with the Company, to reward such directors by providing an
opportunity to acquire shares of Common Stock on favorable terms and to provide
a means through which the Company may attract able persons to serve as
directors of the Company.
The provisions of the Plan, as amended, 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 Plan, as proposed to be amended, a copy of
which is attached to this Proxy Statement as Annex B.
SUMMARY OF THE AMENDED PLAN
The Plan is administered by the members of the Board of Directors who
are not non-employee directors. All non-employee directors are eligible to
receive awards under the Plan. A total of 50,000 shares of Common Stock have
been reserved for issuance under the Plan, of which 40,000 are subject to
outstanding options as of December 31, 1997. Each non-employee director
receives an option to purchase 5,000 shares of Common Stock on the date of such
individual's election or appointment to the Board of Directors (the "Initial
Option"). On the first through the fourth anniversaries of the non-employee
director's election to the Board of Directors,
20
<PAGE> 25
each non-employee director, who is a member of the Board of Directors on such
anniversary date, shall receive an option, effective on the anniversary date,
to purchase 1,000 shares of Common Stock (the "Subsequent Option"). The
exercise price of any option granted to a non-employee director shall be equal
to the fair market value of the Common Stock on the date of grant.
Subject to the expiration or earlier termination, the Initial Option
shall vest at the rate of 331/3% per year while the Subsequent Option is fully
vested on the date of grant. All options under the Plan terminate on the
earlier of the tenth anniversary of the date of grant unless terminated sooner
upon termination of the optionee's status as a director or otherwise pursuant
to the Plan. No option under the Plan is transferable or assignable by the
non-employee director other than by the laws of descent and distribution and
may be exercised, during the lifetime of the non-employee director, only by the
non-employee director, or in the event of his or her death, by a beneficiary
designated by the non-employee director, provided, that, the option has not
been terminated.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the Federal income tax
consequences of certain transactions under the Plan based on Federal income tax
laws in effect on January 1, 1998. This summary is not intended to be complete
and does not describe state or local tax consequences.
TAX CONSEQUENCES TO PARTICIPANTS
Options. Options stated under the Plan will be 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 a short-term or long-term capital
gain (or loss).
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.
21
<PAGE> 26
TAX CONSEQUENCES TO THE COMPANY
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company 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 and is not an
"excess parachute payment" within the meaning of Section 280G of the Code.
PLAN BENEFITS
The table below shows the option awards that have been granted to each
of the following persons or groups under the Plan from the inception of the
Plan through December 31, 1997.
<TABLE>
<CAPTION>
NAME DOLLAR VALUE OUTSTANDING
OPTION RIGHTS
<S> <C> <C>
All non-employee directors as (1) 40,000
a group (5 persons)
</TABLE>
- -----------------------------------
(1) Stock options were granted under the 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, 1997, the last reported sale price for the
Common Stock on the New York Stock Exchange was $31.00.
THE BOARD RECOMMENDS VOTING "FOR" THIS PROPOSAL.
PROPOSAL FOUR - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the
independent auditors for the Company for the fiscal year ending December 31,
1998, 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 RECOMMENDS VOTING "FOR" THIS PROPOSAL.
22
<PAGE> 27
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 18, 1998, 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
April 17, 1998
23
<PAGE> 28
ANNEX A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
WOLVERINE TUBE, INC.
Wolverine Tube, Inc.(hereinafter called the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify:
1. That the Board of Directors of the Corporation has determined
that it is advisable and in the best interests of the Corporation that the
Restated Certificate of Incorporation of the Corporation be hereby amended by
deleting the current text of Article FOURTH, Section 1 in its entirety and by
substituting in lieu thereof the following:
FOURTH. Section 1. Authorized Capital Stock. The
Corporation is authorized to issue two classes of capital stock,
designated Common Stock and Preferred Stock. The total number of
shares of capital stock that the Corporation is authorized to
issue is 40,500,000 shares, consisting of 40,000,000 shares of
Common Stock, par value $0.01 per share, and 500,000 shares of
Preferred Stock, par value $1.00 per share.
2. That upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, a majority of all the shares of
capital stock entitled to vote as a class voted in favor of such amendment.
3. The amendment of the Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment to be executed by its duly authorized officer as of the ____ day
of May, 1998.
WOLVERINE TUBE, INC.
--------------------------------
Name:
Title:
A-1
<PAGE> 29
ANNEX B
1993 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
OF
WOLVERINE TUBE, INC.
ARTICLE I
PURPOSE
The purpose of the Wolverine Tube, Inc. 1993 Stock Option Plan
for Outside Directors of the Company (the "Plan") is to retain the services of
qualified persons who are not employees of the Company to serve as members of
the Board of Directors of the Company and to secure for the Company the
benefits of the incentives inherent in increased stock ownership by paying such
persons a portion of their compensation for such service through the grant of
stock options to purchase shares of Common Stock.
ARTICLE II
DEFINITIONS
"Beneficiary" means the person or persons designated by an
Outside Director to exercise an Option in the event of an Outside Director's
death or, if no such person is designated, the Outside Director's estate.
"Board" means the Board of Directors of the Company.
"Change in Control of the Company" has the meaning set forth in
Section 15.03 below.
"Common Stock" means the common stock of the Company, par value
$.01 per share.
"Company" means Wolverine Tube, Inc., a Delaware corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to the Common Stock the
average of the closing bid and asked prices as reported on the New York Stock
Exchange Composite Trading Tape for the date of determination and the four
preceding trading days.
"Option" means an option to purchase shares of Common Stock
granted under the Plan to an Outside Director.
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<PAGE> 30
"Outside Director" means a member of the Board who is not an
employee of the Company or any of its subsidiaries.
ARTICLE III
SHARES AVAILABLE
Subject to the provisions of Article XII of the Plan, no more
than 105,000 shares of Common Stock shall be issued pursuant to the exercise of
Options granted under the Plan. If an Option is forfeited or expires without
being exercised, the shares of Common Stock subject to the Option shall be
available for additional Option grants under the Plan. Either authorized and
unissued shares of Common Stock or treasury shares may be delivered pursuant to
the exercise of Options granted under the Plan.
ARTICLE IV
PARTICIPATION
All Outside Directors shall participate in the Plan. Grants of
Options to purchase Common Stock may be made pursuant to the Plan only to
Outside Directors.
ARTICLE V
GRANTS OF OPTIONS
5.01 Initial Grants. Each individual who is or becomes an
Outside Director after the date hereof shall be granted an Option to purchase
5,000 shares of Common Stock, effective as of the date of such individual's
election or appointment to the Board (the "Initial Options").
5.02 Periodic Grants. On each of the first through the fourth
anniversaries of each Outside Director's election to the Board, each Outside
Director who is a member of the Board on such anniversary date shall receive a
grant, effective as of such anniversary date, of an additional Option to
purchase 1,000 shares of Common Stock (the "Subsequent Options").
B-2
<PAGE> 31
ARTICLE VI
TERMS AND CONDITIONS OF OPTION GRANTS
6.01 Vesting. Initial Options granted to an Outside
Director shall vest in accordance with the following schedule: 1/3 on the first
anniversary of grant; 1/3 on the second anniversary of grant; and 1/3 on the
third anniversary of grant. Subsequent Options shall be fully vested when
granted.
6.02 Exercisability. Options shall not be exercisable until
the expiration of one year from the date of grant, at which point they will be
fully exercisable (subject to the vesting requirements of Section 6.01) until
termination of the Option pursuant to Section 6.03 below; provided, however,
that, in the event of a Change in Control of the Company, all outstanding
Options shall be immediately exercisable as of the date of such Change in
Control of the Company.
6.03 Termination of Option. Options shall terminate on the
earliest to occur of (i) the tenth anniversary of the Date of Grant of the
Option, (ii) the first anniversary of the date of an Outside Director's
resignation, removal or termination as a member of the Board, and (iii) the
date of the Outside Director's removal from the Board for "cause." Whether an
Outside Director has been removed from the Board for "cause" shall be
determined in accordance with the ByLaws of the Company.
6.04 Exercise Price. The per share exercise price of each
Option shall be the Fair Market value of a share of Common Stock as of the date
of grant of the Option.
6.05 Payment Of Option Exercise Price. An Outside Director
may pay the exercise price of an Option by tendering to the Company cash
(including a certified check, teller's check or wire transfer of funds),
previously owned shares of Common Stock or any combination thereof.
6.06 Certificate. The terms and provisions of an Option
shall be set forth in an option certificate which shall be delivered to the
Outside Director reasonably promptly following the date of grant of the Option.
6.07 Nontransferable. Options shall be nontransferable
other than by will or the laws of descent and distribution and, during the life
of the Outside Director, such Options shall be exercisable only by the Outside
Director; provided, however, that this sentence shall not preclude the Outside
Director from designating a Beneficiary who shall be entitled to exercise the
Option in the event of the Outside Director's death during the exercise period
specified in Section 6.03 above.
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<PAGE> 32
ARTICLE VII
REGISTRATION OF SHARES; LIMITS ON EXERCISABILITY
7.01 Securities Act. No Option shall be exercisable and
no transfer of the shares of Common Stock underlying such Option (the
"Underlying Shares") may be made to any Outside Director, and any attempt to
exercise any Option or to transfer any Underlying Shares to any Outside
Director shall be void and of no effect, unless and until (i) a registration
statement under the Securities Act of 1933, as. amended (the "Securities Act"),
has been duly filed and declared effective pertaining to the Underlying Shares
and the Underlying Shares have been duly qualified under applicable state
securities or blue sky laws or (ii) the Board, in its sole discretion after
securing the advice of counsel, determines, or the Outside Director provides an
opinion of counsel satisfactory to the Board, that such registration or
qualification is not required as a result of the availability of an exemption
from registration or qualification under such laws.
7.02 Limit on Exercise. Without limiting the foregoing, if
at any time the Board shall determine in its discretion that the listing,
registration or qualification of the Underlying Shares under any state or
federal law or on any securities exchange, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of Options or the delivery or purchase of
Underlying Shares, such Options may not be granted or exercised unless such
listing, registration, qualification,, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board. In
addition, if at any time the Board shall determine in its discretion that the
grant or exercise of Options would violate any securities laws, then such
Options may not be granted or exercised until such time as the Board shall
determine that such grant or exercise may be effected other than in violation
of such laws. Any restrictions imposed on the exercise of Options under this
Section 7.02 shall be effective immediately upon notice to the Outside
Director.
ARTICLE VIII
EFFECTIVE DATE
Effective Date and First Grants. The Plan shall become effective
only if approved by the affirmative vote of a majority of the shares of Common
Stock present or represented by proxy at the next annual on special meeting of
stockholders of the Company.
ARTICLE IX
ADMINISTRATION
The Plan shall be administered by the members of the Board who
are not Outside Directors. All questions of interpretation, administration and
application of the Plan shall be determined by the Board. The Board may
authorize any officer of the Company to execute and deliver an option
certificate on behalf of the Company to an Outside Director. No member of the
B-4
<PAGE> 33
Board shall be liable for anything whatsoever in connection with the
administration of the Plan except such member's own willful misconduct.
ARTICLE X
AMENDMENTS AND TERMINATION
10.01 Amendments. Subject to Section 10.02 below, the Plan
may be altered, amended, suspended, or terminated at any time by the Board;
provided, however, that in no event may the provisions of the Plan respecting
eligibility to participate or the timing or amount of grants be amended more
frequently than once every six months, other than to comport with changes in
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended, or any rules or regulations thereunder; and
provided, further, that any amendment which under the requirements of
applicable law must be approved by the stockholders of the Company shall not be
effective unless and until such stockholder approval has been obtained in
compliance with such law; and provided, further, that any amendment that must
be approved by the stockholders of the Company in order to maintain the
continued qualification of the Plan under Rule 16b-3(c)(2)(ii) under the
Exchange Act, or any successor provision, shall not be effective unless and
until such stockholder approval has been obtained in compliance with such rule.
10.02 Consents To Plan Changes. No termination or amendment
of the Plan may, without the consent of the Outside Director, affect any such
individual's rights under the provisions of the Plan with respect to awards of
Options which were made prior to such action.
10.03 Termination. Unless terminated earlier in accordance
with Section 10.01 above, the Plan shall terminate on, and no further Options
may be granted hereunder after, August 31, 2003.
ARTICLE XI
ADJUSTMENTS AFFECTING THE COMMON STOCK
In the event of any merger, consolidation, recapitalization,
reclassification, stock dividend, distribution or property, special cash
dividend or other change in corporate structure affecting the Common Stock,
adjustments shall be made by the Board to prevent dilution or enlargement of
rights in the number and class of shares of Common Stock, granted or authorized
to be granted hereunder.
B-5
<PAGE> 34
ARTICLE XII
NO RIGHT TO REELECTION
Nothing in the Plan shall be deemed to create any obligation on
the part of the Board to nominate any of its members for reelection by the
Company's stockholders, nor confer upon any Outside Director the right to
remain a member of the Board for any period of time, or at any particular rate
of compensation.
ARTICLE XIII
GOVERNING LAW
The Plan and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware.
ARTICLE XIV
NO RESTRICTION ON RIGHT OF COMPANY
TO EFFECT CORPORATE CHANGES
The Plan shall not affect in any way 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.
ARTICLE XV
MISCELLANEOUS
15.01 Expenses. All expenses and costs in connection with
the administration of the Plan or the issuance of Options hereunder shall be
borne by the Company.
15.02 Headings. The headings of sections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan.
15.03 Change in Control. A "Change in Control of the
Company" means:
B-6
<PAGE> 35
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of 50 percent or more of either (i) the then
outstanding shares of Common Stock (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly from the
Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company or (D) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation which would not be a Change of
Control under paragraph (c) below; or
(b) Individuals who, as of the effective date of the Plan,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the effective date of
the Plan whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board will be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule l4a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless
following such reorganization, merger or consolidation, (i) more than
50 percent of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, and (ii) at least a
majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which following
B-7
<PAGE> 36
such sale or other disposition, (A) more than 50 percent of the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and (B) at least a majority of the
members of the board of directors of such corporation were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other
disposition of assets of the Company.
B-8
<PAGE> 37
APPENDIX A
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806 PROXY
- ---------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints John M. Quarles and James E. Deason, and each of them, with
power of substitution in each, proxies to appear and vote, as designated below,
all Common Stock of Wolverine Tube, Inc. held of record on March 31, 1998 by
the undersigned, at the Annual Meeting of Stockholders to be held on May 21,
1998, and at all adjournments thereof (the "Meeting"). Management recommends a
vote in favor of all nominees listed in item 1 and in favor of Proposals 2
through 4.
1. ELECTION OF DIRECTORS
Nominees: John L. Duncan and Jan K. Ver Hagen
FOR all nominees listed above WITHHOLD AUTHORITY
--- ---
(except as marked to the contrary) to vote for all nominees listed above
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LAST ABOVE.
2. PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES FROM 20,000,000 SHARES TO 40,000,000 SHARES AS
DESCRIBED IN THE PROXY STATEMENT FOR THE MEETING.
FOR AGAINST ABSTAIN
--- --- ---
3. PROPOSAL TO ADOPT THE AMENDMENT TO THE COMPANY'S 1993 STOCK OPTION PLAN FOR
OUTSIDE DIRECTORS TO INCREASE THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK
AVAILABLE FOR ISSUANCE FROM 50,000 TO 105,000 AS DESCRIBED IN THE PROXY
STATEMENT FOR THE MEETING.
FOR AGAINST ABSTAIN
--- --- ---
4. PROPOSAL TO SELECT ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR THE
COMPANY FOR FISCAL YEAR 1998.
FOR AGAINST ABSTAIN
--- --- ---
5. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 38
* * * * * * * *
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED. IF NO
INDICATION IS MADE, IT WILL BE VOTED IN FAVOR OF ALL DIRECTOR-NOMINEES AND IN
FAVOR OF PROPOSALS 2 THROUGH 4.
Dated : 1998
____________________________,
________________________________________
________________________________________
Signature(s)
(Please sign exactly as name appears on
this proxy. When shares are held by
joint tenants, both should sign. When
signing in a fiduciary or representative
capacity, give full title as such.)
