<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 23, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Wolverine Tube, Inc. on Thursday, May 20, 1999, 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/ Jan K. Ver Hagen
Jan K. Ver Hagen
Chairman
<PAGE> 3
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 20, 1999
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 20, 1999, at
the Huntsville Marriott, 5 Tranquility Base, Huntsville, Alabama 35805 at 11:00
a.m., local time, for the following purposes:
1. To elect three (3) Class III directors of the Company to serve a
three-year term.
2. To approve an amendment to the Company's 1993 Equity Incentive Plan.
3. To approve the Company's Amended and Restated 1993 Stock Option Plan
for Outside Directors.
4. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1999.
5. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 31, 1999 are
entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
By Order of the Board of Directors
/s/ James E. Deason
------------------------------------------
James E. Deason
Secretary
Huntsville, Alabama
April 23, 1999
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 20, 1999
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....................15
COMPANY STOCK PRICE PERFORMANCE............................................18
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934............................19
PROPOSAL TWO - APPROVAL OF THE AMENDMENT
TO THE 1993 EQUITY INCENTIVE PLAN.................................19
PROPOSAL THREE - APPROVAL OF THE AMENDED AND RESTATED 1993
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS...........................22
PROPOSAL FOUR - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS..............................................26
OTHER BUSINESS.............................................................26
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT THE NEXT ANNUAL MEETING........................................26
</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 20, 1999, 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 is (256) 353-1310. The date of this Proxy Statement is April
23, 1999, the approximate date on which this Proxy Statement, the accompanying
Proxy and the Annual Report to Stockholders for the fiscal year ended December
31, 1998, 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 Corporate Investor Communications, Inc. (the "Solicitor") to
assist in the solicitation of proxies. The Company will pay approximately
$5,500 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, 1999 (the "Record Date"),
13,363,400 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 at the meeting, shall constitute a quorum for
the transaction of business. Each stockholder is entitled to one vote for each
share of Common
<PAGE> 6
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 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> 7
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of March 31, 1999, 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. The number of
shares of Common Stock outstanding as of March 31, 1999 was 13,363,400.
<TABLE>
<CAPTION>
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED
---------------------------
SHARES PERCENT
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Trinity I Fund, L.P. (a) 1,629,300 12.2%
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
The Prudential Insurance Company of America(b) 1,547,085 11.6%
751 Broad Street
Newark, New Jersey 07102-37778
Citigroup Inc. (c) 1,147,613 8.6%
Salomon Smith Barney Holdings, Inc.
153 East 53rd Street
New York, New York 10043
Chris A. Davis (d) 2,667 *
John L. Duncan (e) 11,000 *
Thomas P. Evans (f) 8,000 *
Jan K. Ver Hagen (g) 11,000 *
W. Barnes Hauptfuhrer (h) 1,667 *
Gail O. Neuman (i) 2,667 *
Charles E. Thompson (j) 1,667 *
Dennis J. Horowitz (k) 70,500 *
John M. Quarles (l) 222,401 1.7%
James E. Deason (m) 31,975 *
Dale G. Barnhart (n) 10,062 *
Johann R. Manning, Jr. (o) 5,129 *
All directors and executive officers as a group (12 persons) 165,834 1.2%
</TABLE>
- ----------------
* REPRESENTS LESS THAN 1%.
3
<PAGE> 8
(a) This information is based upon a Form 4 Statement of Changes of
Beneficial Ownership of Securities, filed with the Securities and
Exchange Commission (the "Commission") on January 8, 1999.
(b) This information is based upon Amendment No. 3 to Schedule 13G, filed
with the Commission on January 29, 1999. According to such filing, The
Prudential Insurance Company of America ("Prudential") owns the shares
of Common Stock directly or indirectly, and has sole voting and
dispositive power with respect to 793,100 shares of Common Stock and
shared voting and dispositive power with respect to 753,985 shares of
Common Stock. Prudential disclaims beneficial ownership of 1,544,285
shares of Common Stock.
(c) This information is based upon Amendment No. 1 to Schedule 13G filed
with the Commission on February 3, 1999. According to such filing, the
holders listed own the shares of Common Stock directly or indirectly,
having shared voting and dispositive power with respect to all shares
of Common Stock beneficially owned. Citigroup Inc. is the sole
stockholder of Salomon Smith Barney Holdings Inc.
(d) Includes 2,667 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(e) Includes 9,000 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(f) Includes 8,000 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(g) Includes 8,000 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(h) Includes 1,667 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(i) Includes 2,667 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(j) Includes 1,667 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(k) Includes 45,000 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(l) Based on information known to the Company as of May 21, 1998, when Mr.
Quarles retired from all positions with the Company. Mr. Quarles
served as Interim Chief Executive Officer until March 1998. Includes
42,400 shares of Common Stock subject to presently exercisable
options.
(m) Includes 25,800 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(n) Includes 5,600 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
(o) Includes 1,200 shares of Common Stock subject to options exercisable
within 60 days of March 31, 1999.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board has nominated Ms. Neuman and Messrs. Deason and Evans to be
reelected as Class III directors, each for a three-year term expiring in 2002.
If elected, each nominee will hold office until his or her term expires and
until his or her 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 REELECTION
OF THE THREE NOMINEES LISTED BELOW.
INFORMATION REGARDING NOMINEES
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 is elected each year. The Class I directors are composed of Ms. Davis
and Messrs. Horowitz and Hauptfuhrer; the Class II directors are composed of
Messrs. Duncan, Thompson 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.
4
<PAGE> 9
The following table sets forth certain information for each nominee,
and for each director of the Company whose term of office continues after the
Annual Meeting:
NOMINEES FOR ELECTION AS CLASS III DIRECTORS WHOSE TERMS WILL EXPIRE IN 2002:
<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 51
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, an
independent auditing firm, in Birmingham, Alabama.
Thomas P. Evans Mr. Evans has been a director of the Company since 42
December 1995. Mr. Evans has served as the Senior
Vice President and Chief Operating Officer of Permal
Asset Management ("Permal") since January 1999. Prior
to holding that position, Mr. Evans was the President,
Emerging Markets, of Permal. 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.
Gail O. Neuman Ms. Neuman has been a director of the Company since 52
November 1997. Ms. Neuman has served as the Vice
President-Human Resources and General Counsel of
Nissan Motor Manufacturing Corporation U.S.A., a
vehicle manufacturer, since 1981. Ms. Neuman also
serves as a director of First Union National Bank of
Tennessee.
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2000:
Principal Occupation During
Name the Past Five Years Age
- ----------------------------------------------------------------------------------------------------------------
Chris A. Davis Ms. Davis has been a director of the Company since 48
October 1997. Ms. Davis has served as the Executive
Vice President and Chief Financial and Administrative
Officer and a director of Gulfstream Aerospace
Corporation, a corporate aircraft manufacturer, since July
1993.
</TABLE>
5
<PAGE> 10
<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 Executive 52
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
Philips Electronics North America Corporation
("Philips"), a diverse electronics manufacturer, 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.
W. Barnes Mr. Hauptfuhrer has been a director of the Company 44
Hauptfuhrer since May 1998. Mr. Hauptfuhrer has served as a
Managing Director, Co-Head of Investment
Banking for First Union Corporation, a
financial services corporation, since January
1999. Mr. Hauptfuhrer previously served as a
Managing Director of First Union Capital
Partners, a private equity and subordinated
debt investment group, since 1988.
INCUMBENT DIRECTORS WHOSE TERMS WILL EXPIRE IN 2001:
Principal Occupation During
Name the Past Five Years Age
- ----------------------------------------------------------------------------------------------------------------
John L. Duncan Mr. Duncan has been a director of the Company since 65
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. Mr. Duncan is a nominee to the Board of Directors
of Martin Industries, Inc.
Jan K. Ver Hagen Mr. Ver Hagen has been a director of the Company since 61
January 1996 and the non-executive Chairman of the
Board since May 1998. Mr. Ver Hagen currently serves
as Senior Vice President reporting to the Chairman of
Emerson Electric Co. ("Emerson"), a manufacturer and
</TABLE>
6
<PAGE> 11
<TABLE>
<CAPTION>
Principal Occupation During
Name the Past Five Years Age
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
marketer of electronic and electrical products. Prior to
joining Emerson, Mr. Ver Hagen was employed by United
Dominion Industries, Limited ("UDI") as Vice Chairman in
1998, and as President and Chief Operating Officer from
1994 to 1998. Prior to joining UDI in May 1994,
Mr. Ver Hagen was Vice Chairman of Emerson from 1988 to 1994.
Mr. Ver Hagen also serves as a director of UDI and Plexus Corp.
Charles E. Thompson Mr. Thompson has been a director of the Company since 69
May 1998. Mr. Thompson previously served as Senior
Vice President and Director of World Marketing for the
Semiconductor Products Sector of Motorola, Inc., a
communications and semiconductor solutions provider,
from 1975 to 1995.
</TABLE>
BOARD MEETINGS AND COMMITTEES
Ms. Neuman and Messrs. Hauptfuhrer and Evans currently serve as
members of the Compensation Committee of the Board of Directors (the
"Compensation Committee"). The responsibilities of the Compensation Committee
are described under "Compensation Committee Report on Executive Compensation."
The Compensation Committee held five meetings during 1998.
Ms. Davis and Messrs. Thompson and Duncan 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 two meetings during 1998.
Messrs. Horowitz, Deason and Ver Hagen 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 meet during
1998.
Messrs. Ver Hagen and Evans 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 held no formal
meetings during 1998, does not have any procedures established for the
consideration of nominees recommended by stockholders.
During 1998, 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
7
<PAGE> 12
Directors and the Committees of which they were a member during the last year,
except for Mr. Evans.
BOARD COMPENSATION
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. The Chairman of the Board of Directors receives
an annual retainer of $40,000, plus $2,000 for every board meeting he attends.
In addition, Mr. Duncan, who serves as Lead Director, receives an additional
$1,000 per board meeting attended for serving in that capacity.
In addition, the Company's 1993 Stock Option Plan for Outside
Directors , as currently in effect, provides for the granting of nonqualified
stock options to independent directors of the Company. Under that option 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 first four anniversaries of such Director's election to the Board.
At the meeting, stockholders are being asked to adopt the Amended and Restated
1993 Stock Option Plan for Outside Directors, which would provide further
flexibility and discretion in the ability to grant options to non-employee
directors. See "PROPOSAL THREE - Adoption of the Amended and Restated 1993 Stock
Option Plan for Outside Directors."
8
<PAGE> 13
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 1998 and the other persons who were serving as an executive officer of
the Company at December 31, 1998 and whose total annual salary and bonus
exceeded $100,000 for that year (collectively, the "Named Executive Officers")
for services rendered in the years ended December 31, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
INCENTIVE
ANNUAL COMPENSATION AWARDS
----------------------------------------------- ------------------------
COMMON
STOCK
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(A) AWARDS(B) (SHARES) COMPENSATION(C)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dennis Horowitz 1998 $373,880 $ 50,000 $139,718 $306,563 125,000 $ 490
President and Chief
Executive Officer
John M. Quarles 1998 208,500 -- 42,798 -- -- 92,343
Chairman and Interim Chief 1997 317,424 120,000 -- -- 5,469
Executive Officer (d) 1996 387,803 -- -- 10,000 3,692
James E. Deason 1998 218,994 20,000 -- 41,795 17,000 6,341
Executive Vice President, 1997 205,839 65,000 -- 17,000 4,203
Chief Financial Officer and 1996 178,158 -- -- 12,000 2,351
Secretary
Dale G. Barnhart 1998 150,489 10,000 -- 27,877 10,000 205
Senior Vice President, 1997 138,207 45,000 -- 9,000 265
Fabricated Products
Johann R. Manning, Jr. 1998 88,443 10,000 45,239 27,877 6,000 2,415
Vice President, Human
Resources and General
Counsel
</TABLE>
- ------------------------
(a) The 1998 amounts include, for Mr. Horowitz, $139,718, and for Mr.
Manning, $45,239 in reimbursement of expenses in connection with their
respective relocations to Huntsville, and for Mr. Quarles, $42,798 in
benefits paid pursuant to the terms of the Company's Retirement Plan.
(b) The dollar value of the restricted stock awards is based upon the
closing market price of $20.4375 on February 16, 1999, the date on
which the awards were made by the Board of Directors as bonus awards
for 1998. The total number of restricted shares awarded was 15,000,
2,045, 1,364 and 1,364 to each of Messrs. Horowitz, Deason, Barnhart
and Manning, respectively. Such shares vest at the rate of 50% on each
of the first and second anniversaries of the date of grant. In the
event that any dividends are paid with respect to the Common Stock in
the future, dividends will be paid on the restricted Common Stock at
the same rate.
(c) The 1998 amounts include 401(k) matching contributions made by the
Company of $4,998, $5,688 and $2,415 for Messrs. Quarles, Deason and
Manning, respectively, and term life insurance premiums paid by the
Company of $490, $538, $653 and $205 for each of Messrs. Horowitz,
Quarles, Deason and Barnhart, respectively. Additionally, the 1998
amount for Mr. Quarles includes an $86,807 payment for accrued
vacation time made in connection with his retirement and pursuant to
the terms of his employment agreement with the Company.
(d) Mr. Quarles served as Chairman of the Company from May 1994 until May
1998. He served as President and Chief Executive Officer until his
retirement from those positions in September 1996 and served as
Interim Chief Executive Officer from March 31, 1997 until March 1998
when Mr. Horowitz joined the Company. Mr. Quarles' compensation was
established pursuant to an employment agreement with the Company. See
"Plans and Arrangements -- Employment Agreement with John M. Quarles."
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, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENT OF ASSUMED RATES OF STOCK PRICE
SHARES OF TOTAL APPRECIATION FOR OPTION
COMMON OPTIONS TERM(B)
STOCK GRANTED -----------------------------
UNDERLYING TO EXERCISE
OPTIONS EMPLOYEES PRICE PER EXPIRATION
GRANTED(A) IN 1998 SHARE DATE
NAME 5% 10%
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dennis Horowitz 125,000 34.97 $40.25 03/23/08 $3,164,126 $8,018,517
James E. Deason 17,000 4.76 37.675 02/25/08 402,815 1,020,765
Dale G. Barnhart 10,000 2.80 37.675 02/25/08 236,950 600,450
Johann R. Manning, Jr. 6,000 1.68 36.625 05/28/08 138,200 350,225
</TABLE>
- ----------------
(a) 25,000 of Mr. Horowitz's options are currently exercisable. The
remainder of his options vest at the rate of 20% per year for five
years beginning on March 23, 1999. Options vest at the rate of 20% per
year for five years beginning on February 25, 1999 for Messrs. Deason
and Barnhart and beginning on May 28, 1999 for Mr. Manning.
(b) The assumed annual rates of appreciation of five and ten percent would
result in the price of the Company's Common Stock increasing from
$40.25 to $65.56 and $104.40 per share, respectively, for Mr.
Horowitz, from $37.675 to $61.37 and $97.72, respectively, for Messrs.
Deason and Barnhart and from $36.625 to $59.66 and $95.00,
respectively, for Mr. Manning.
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, 1998, 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, 1998, 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, 1998:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998(A)
ACQUIRED --------------------- -------------------------
ON VALUE
NAME EXERCISE REALIZED VESTED UNVESTED VESTED UNVESTED
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis Horowitz -- -- 25,000 100,000 -- --
John M. Quarles(b) -- -- 42,400 -- $463,752 --
James E. Deason -- -- 15,100 41,400 -- --
Dale G. Barnhart -- -- 1,800 17,200 -- --
Johann R. Manning, Jr. -- -- -- 6,000 -- --
</TABLE>
- --------------------
(a) For all unexercised in-the-money options, assumes a fair market value
at December 31, 1998 of $21.00 per share of Common Stock, which was
the last transaction in the Common Stock on the New York Stock
Exchange as of that date.
(b) Based on information known to the Company as of May 21, 1998, when Mr.
Quarles retired from all positions with the Company.
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
11
<PAGE> 16
such retirement precedes age 60, ending at age 55, the minimum age to receive
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 1998 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 25,943 34,591 43,238 51,886 61,261
150,000 31,568 42,091 52,613 63,136 74,386
175,000 37,193 49,591 61,988 74,386 87,511
200,000 42,818 57,091 71,363 85,636 100,636
250,000 54,068 72,091 90,113 108,136 126,886
300,000 65,318 87,091 108,863 130,636 153,136
350,000 76,568 102,091 127,613 153,136 179,386
400,000 87,818 117,091 146,363 175,636 205,636
450,000 99,068 132,091 165,113 198,136 231,886
500,000 110,318 147,091 183,863 220,636 258,136
</TABLE>
As of December 31, 1998, Mr. Horowitz had 1 year of credited service
in the Retirement Plan, Mr. Quarles had 25 years of credited service, Mr.
Deason had 4 years, Mr. Barnhart had 2 years and Mr. Manning had 1 year. Mr.
Horowitz, Mr. Quarles, Mr. Deason, Mr. Barnhart and Mr. Manning had
compensation of $373,880, $208,500, $218,994, $150,489 and $88,443 for purposes
of the above table, as of December 31, 1998.
12
<PAGE> 17
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 provided that commencing
January 1, 1997, Mr. Quarles would 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
devoted to his duties thereunder. In addition, Mr. Quarles would be eligible to
receive an annual bonus under the Company's key manager bonus plan. The
Agreement also provided that if Mr. Quarles were terminated for cause or if he
resigned, other than for certain enumerated reasons, he would be 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 were terminated without cause or resigned for one of the
enumerated reasons, he would be 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 provided that Mr. Quarles would
have the right to receive medical and insurance benefits, to retain all of 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, Mr. Quarles was compensated in accordance with the terms of
the Agreement from March 1997 until March 1998.
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.
CHANGE OF CONTROL, SEVERANCE AND NON-COMPETITION AGREEMENTS. The
Company has entered into Change of Control, Severance and Non-Competition
Agreements ("Severance Agreements") with each of the Named Executive Officers.
The Severance Agreements generally provide that (i) certain payments may be
made by the Company to the Named Executive Officer if his employment is
terminated or he resigns in certain circumstances, (ii) during the term of
employment and for a period of three years following termination of employment
with the Company, the Named Executive Officer will not disclose or improperly
use confidential information relating to the Company, (iii) for a period of two
years following termination of employment with the Company, the Named Executive
Officer will not solicit business from the Company's customers, and (iv) during
the term of employment and for a specified period of years following
termination of employment with the Company, the Named Executive Officer will
not compete with the Company in the United States.
The Severance Agreement with Mr. Horowitz 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
13
<PAGE> 18
of the enumerated reasons, he is entitled to three years' salary, plus payment
for any unused vacation time for the year of termination or resignation (all
payable either in a lump sum or in periodic payments over three years) plus
temporary continuation of his medical and life insurance benefits. In the event
that Mr. Horowitz is terminated without cause or resigns for any reason within
two years of a change in control, he would be entitled to an additional amount
equal to forty percent of his base salary for each year that continuing
payments are made to him pursuant to the Severance Agreement, except that, in
the event the termination or resignation occurs after the first six months of
the Company's fiscal year, then he would be entitled to receive the greater of
the actual amount of the annual bonus to which he would be actually entitled to
be paid pursuant to the Company's annual bonus plan for the year in which the
termination occurred and forty percent of his base salary for that year. In
those circumstances following a change in control, Mr. Horowitz would also be
entitled to reimbursement for outplacement services utilized by him for up to
one year following his termination or resignation. Mr. Horowitz's Severance
Agreement provides that he may not compete with the Company in the United
States for a period of three years from termination of employment.
The Severance Agreements with each of Messrs. Deason, Barnhart and
Manning provide that if such officer is terminated for cause or if he resigns
other than for certain enumerated 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. The Severance
Agreements with Messrs. Barnhart and Manning provide that if such officer is
terminated without cause or resigns for one of the enumerated reasons, or
resigns for any reason within two years following a change in control, he is
entitled to two years' salary plus payment for any unused vacation time for
that year (payable either in a lump sum or in periodic payments over two years)
plus temporary continuation of such officer's medical and life insurance
benefits. The Severance Agreement with Mr. Deason provides that (i) if he is
terminated without cause or resigns for any reason within two years following a
change in control, he is entitled to three years' salary or (ii) if such
termination or resignation for any of the enumerated reasons occurs in any
other circumstances, he is entitled to two years' salary plus, in either case,
payment for any unused vacation time for that year (payable either in a lump
sum or in periodic payments over two or three years, as applicable) plus
temporary continuation of his medical and life insurance benefits. The
Severance Agreements with each of Messrs. Deason, Barnhart and Manning also
provide that, in the event such officer is terminated without cause or resigns
for any reason within two years of a change in control, he would be entitled to
an additional amount equal to thirty percent of his base salary for each year
that continuing payments are made pursuant to the Severance Agreement, except
that, in the event the termination or resignation occurs after the first six
months of the Company's fiscal year, then he would be entitled to receive the
greater of the actual amount of the annual bonus to which he would be actually
entitled to be paid pursuant to the Company's annual bonus plan for the year in
which the termination occurred and thirty percent of his base salary for that
year. In those circumstances following a change in control, each officer would
also be entitled to reimbursement for outplacement services utilized by him for
up to one year following termination or resignation. The Severance Agreements
for each of Messrs. Deason, Barnhart and Manning provide that such officer may
not compete with the Company in the United States for a period of two years
from termination of employment.
A "change in control" is defined in the Severance Agreements to mean:
(i) a merger, consolidation or other reorganization of the Company that results
in the shareholders of the Company
14
<PAGE> 19
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.
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 compensation of the Company's executive
officers. The Compensation Committee, which is comprised of three 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 from time to time retains management and compensation consulting
firms 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, retain and motivate key executives, and to reward
performance by those executives that benefits the stockholders. The primary
elements of executive officer compensation are base salary, annual cash bonus
awards, long term incentive compensation awards, and stock option and
restricted stock awards. Base 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
generally based on the Company's performance measured against the attainment of
financial and other objectives established annually by the Board of Directors,
and on achieving individual performance objectives. Long term incentive awards,
which include cash awards, as well as restricted stock and 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, competitive benchmarks established in
comparisons to similarly situated companies, and contributions toward achieving
the objectives of the Company. Further information on each of these
compensation elements is set forth below.
15
<PAGE> 20
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 within the Company
and in comparable companies. The specific objectives for each executive officer
(other than the CEO) are set by 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 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. In
connection with the process of searching for and hiring a new CEO in 1998, 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 $500,000
that was offered to and accepted by Mr. Horowitz was established in the process
that led to his hiring.
BONUSES
The Compensation Committee believes that the executive officers should
be entitled to receive cash bonus awards based upon both individual achievement
as well as the financial performance of the Company. Pursuant to the Company's
annual management bonus plans, annual cash bonus objectives are more 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. 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. In measuring those objectives with respect to the CEO, the
Compensation Committee assessed such factors as executive management skills,
investor relations, leadership, company performance in the context of market
conditions, and strategic planning and development.
The Company has also established long-term incentive plans developed
in consultation with senior management and with compensation consultants, and
the CEO, and selected senior executives designated by the CEO and approved by
the Compensation Committee, are eligible for awards under the plan based upon
the Company's return on total capital measured over a four year period. Bonus
objectives for all participants (including the CEO) under the long-term
incentive plans are based upon an incremental scale depending upon achieving or
exceeding the specified target return rate.
STOCK OPTION AND RESTRICTED STOCK AWARDS
Stock options and restricted stock awards 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 the long term, and to align the
interests of the executive with those of the stockholders by providing
16
<PAGE> 21
a stake in the Company. All equity based awards for management are generally
granted pursuant to the Company's 1993 Equity Incentive Plan (the "Equity
Plan"). Grants of stock options to participants generally 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 of equity awards, 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 or other equity
awards.
In determining equity based awards 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
grant awards that are greater than may be indicated by comparisons of relative
salary amounts. Stock options and restricted stock 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. In 1998, in connection with his appointment as CEO, Mr.
Horowitz was granted stock options to purchase 125,000 shares of Common Stock.
Options to purchase 60,000 of such shares were granted under the Equity Plan.
Due to a limitation on the number of options available for grant during a
single year pursuant to the Equity Plan, the remaining options to purchase
65,000 shares of Common Stock were granted pursuant to the terms of a
NonQualified Option Agreement between Mr. Horowitz and the Company containing
substantially the same terms as the grant made pursuant to the Equity Plan.
During the process of searching for and hiring a new CEO, the Compensation
Committee determined that in order to provide an appropriate incentive over the
long term, it was necessary to grant options in excess of the maximum amount
currently specified in the Equity Plan. In addition, the CEO was awarded 15,000
shares of restricted stock, valued at approximately $306,563 in February 1999,
representing a portion of a discretionary performance award granted to him for
1998.
SUMMARY
The Company's 1998 earnings fell short of the target set by the Board
of Directors, which governs awards under the management bonus plan. Therefore,
there were no bonus payments under that program for 1998; however, the
Compensation Committee did determine to make discretionary performance awards
during the first quarter of 1999 to certain executive officers (including the
CEO) based upon individual performance during 1998, a portion of which award
amounts were paid in the form of restricted stock awards. 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
Gail O. Neuman
Thomas P. Evans
W. Barnes Hauptfuhrer
- --------
(1) Due to the historical compensation levels of the Company's executive
officers, 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 below is a line graph comparing the five-year cumulative
total stockholder return on the Common Stock since December 31, 1993, with the
cumulative total stockholder return of the S&P Industrials Index, the NYSE
Composite Index and the Russell 2000 Index, assuming reinvestment of any
dividends.
[GRAPHIC]
TOTAL CUMULATIVE RETURNS
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Wolverine Tube, Inc. 100 120 190 178 157 106
S&P Industrials 100 104 140 172 225 301
NYSE Composite 100 97 127 151 197 230
Russell 2000 100 97 122 140 169 163
</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,
1998, with the exception of the filing of Mr. Hauptfuhrer's Form 3, which was
inadvertently filed late, 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
TO THE 1993 EQUITY INCENTIVE PLAN
On March 25, 1999, the Board of Directors of the Company adopted,
subject to stockholder approval, an amendment of the Company's 1993 Equity
Incentive Plan, as previously amended (the "Equity Plan"), to provide for an
increase (i) in the maximum number of shares of Common Stock that may be issued
and sold thereunder from 1,225,000 to 2,075,000 and (ii) in the maximum number
of shares of Common Stock issuable pursuant to options or stock appreciation
rights that may be granted to a participant during any calendar year from 60,000
to 125,000 shares of Common Stock. 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 provisions of the Equity Plan, which was originally approved by a
majority of the Company's stockholders in June 1993, as proposed to be 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 Equity Plan, a
copy of which is attached to this Proxy Statement as Annex A.
SUMMARY OF THE EQUITY PLAN
The Equity 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 Equity Plan. The Compensation Committee has the authority
under the Equity 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
Equity Plan. A total of 2,075,000 shares of Common Stock have been reserved for
issuance under the Equity Plan, of which 1,052,012 are subject to outstanding
options as of March 31, 1999. Shares that are issued upon exercise of stock
options or are otherwise awarded under the Equity Plan 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
19
<PAGE> 24
be deemed to have been issued or transferred under the Equity Plan only the net
number of shares of Common Stock actually issued or transferred by the Company.
The Equity 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 Equity 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 Equity Plan and the interests of the Company.
Under the option component of the Equity 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 the Equity Plan is proposed to be amended, no participant shall be
granted option rights (or SARs) for more than 125,000 shares of Common Stock
during any calendar year, subject to adjustments as provided in the Equity 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 Equity Plan, as
proposed to be amended, shall not exceed 2,075,000 shares, subject to
adjustments as provided in the Equity 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 Equity 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 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 Equity 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 Equity 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.
20
<PAGE> 25
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the Federal income tax
consequences of certain transactions under the Equity Plan based on Federal
income tax laws in effect on January 1, 1999. 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 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.
21
<PAGE> 26
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.
ELIGIBILITY
Officers and key employees of the Company and its subsidiaries
(approximately 120 as of December 31, 1998), as determined by the Compensation
Committee, may be selected to receive benefits under the Equity Plan.
PLAN BENEFITS
For disclosure of outstanding awards granted to the Named Officers, the
executive officers as a group, non-executive directors and the non-executive
officer employees as a group, see the table under the caption "Benefits Granted
Under the Equity Plan and the Directors' Plan," included in "PROPOSAL THREE -
Approval of the Amended and Restated 1993 Stock Option Plan for Outside
Directors" below.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL THREE - APPROVAL OF THE AMENDED AND RESTATED 1993
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
On March 25, 1999, the Board of Directors of the Company adopted the
Amended and Restated 1993 Stock Option Plan for Outside Directors (the
"Directors' Plan"). The purposes of the Directors' Plan, which was originally
adopted by the Company's stockholders in 1993, 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 Board of Directors determined to amend the existing stock option
plan for outside directors in order (i) to increase the maximum number of shares
of Common Stock that may be issued thereunder from 105,000 to 185,000 shares,
(ii) to provide that, rather than limiting the formula grants of 1,000 options
to be made only on the first four anniversaries of a non-employee director's
initial election to the Board of Directors, such grants shall be made on each
anniversary of such director's election to the Board of Directors, and (iii) to
allow for options to be granted to outside directors from time to time in lieu
of retainer amounts or other compensation otherwise payable to
22
<PAGE> 27
the outside director. In addition, the previous restriction that options may not
be exercised until at least one year from the date of grant is being eliminated.
The provisions of the Directors' Plan, as amended and restated in March
1999, 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 Directors'
Plan, a copy of which is attached to this Proxy Statement as Annex B.
SUMMARY OF THE DIRECTORS' PLAN
The Directors' Plan is administered by the members of the Board of
Directors who are not eligible to receive awards under the Directors' Plan. All
directors who are not employees of the Company or any of its subsidiaries are
eligible to receive awards under the Directors' Plan. A total of 185,000 shares
of Common Stock have been reserved for issuance under the Directors' Plan, of
which 47,000 are subject to outstanding options as of March 31, 1999. Each
non-employee director receives options 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 Options"). On each anniversary of a non-employee
director's election to the Board of Directors, that non-employee director, who
is a member of the Board of Directors on such anniversary date, shall receive
options, effective on the anniversary date, to purchase 1,000 shares of Common
Stock (the "Periodic Options"). The Directors' Plan also allows for additional
options to be granted to non-employee directors in lieu of retainer amounts or
other compensation otherwise payable to such non-employee director (the
"Additional Options"). 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 Options
shall vest at the rate of 33 1/3% per year beginning on the first anniversary of
the date of grant, while the Periodic Options and Additional Options are fully
vested on the date of grant, unless otherwise determined by the committee of the
Board of Directors that administers the Directors' Plan. All options under the
Directors' 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 Directors' Plan. No option under the
Directors' 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 Directors' Plan based on Federal
income tax laws in effect on January 1, 1999. This summary is not intended to be
complete and does not describe state or local tax consequences.
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<PAGE> 28
TAX CONSEQUENCES TO PARTICIPANTS
Options granted under the Directors' 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).
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.
24
<PAGE> 29
BENEFITS GRANTED UNDER THE EQUITY PLAN AND THE DIRECTORS' PLAN
The table below shows the option awards that have been granted to each
of the following persons or groups under the Equity Plan or the Directors' Plan
from inception through March 31, 1999.
PLAN BENEFITS PREVIOUSLY GRANTED
<TABLE>
<CAPTION>
Amended and Restated
1993 Stock Option Plan
1993 Equity Incentive Plan For Outside Directors
-------------------------- ----------------------
Estimated
Outstanding Value of Outstanding
Option Dollar Restricted Stock Dollar Option
Name Rights Value Awards (1) Value Rights
---- -------- ------- ----------- ----- -------
<S> <C> <C> <C> <C> <C>
Dennis Horowitz
President and Chief Executive
Officer 60,000 (2) $538,687.50 N/A N/A
John M. Quarles
Retired Chairman and
Interim Chief Executive Officer 10,000 (2) N/A N/A N/A
James E. Deason
Executive Vice President,
Chief Financial Officer
and Secretary 56,500 (2) 130,446.88 N/A N/A
Dale G. Barnhart
Senior Vice President,
Fabricated Products 19,000 (2) 94,259.75 N/A N/A
Johann R. Manning, Jr.
Vice President, Human Resources
and General Counsel 6,000 (2) 83,000.13 N/A N/A
Executive Officer Group (5
persons) 156,500 (2) 920,331.75 N/A N/A
Non-Executive Director Group (7
persons) N/A N/A N/A (2) 47,000
Non-Executive Officer Employee 885,512 (2) 278,976.75 N/A N/A
Group
</TABLE>
- -----------------------
(1) The estimated value of outstanding restricted stock awards is based
upon the closing price of the Common Stock on the New York Stock
Exchange on March 31, 1999, which was $21.125 per share.
(2) Stock options were granted under the Equity Plan and the Directors'
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 March 31, 1999, the last
reported sale price for the Common Stock on the New York Stock Exchange
was $21.125 per share.
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<PAGE> 30
The types of awards and amounts thereof that may be granted under the
Equity Plan to the above-named individuals and groups in the future are not
determinable at this time.
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,
1999, 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.
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
In order for a stockholder proposal to be considered for
inclusion in the proxy statement for the Company's 2000 Annual Meeting of
Stockholders, such proposal must be received by the Company at its principal
executive office no later than December 24, 1999. In accordance with the rules
of the SEC and the Company's Bylaws, the Company may exclude from consideration
at the meeting any proposals that are not timely. To be timely, a proposal must
be received by the Company no later than 60 days prior to the annual meeting.
However, if the Company does not publicly announce the date of the annual
meeting at least 75 days before such meeting, a stockholder has 10 days from the
date of that public announcement to deliver any proposal to the Company.
By Order of the Board of Directors
/s/ Jan K. Ver Hagen
------------------------------------
Jan K. Ver Hagen
Chairman
April 23, 1999
26
<PAGE> 31
ANNEX A
WOLVERINE TUBE, INC.
1993 EQUITY INCENTIVE PLAN
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;
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<PAGE> 32
(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 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.
A-2
<PAGE> 33
"Committee" means the committee of the board described in
Section 4.
"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 law, 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.
A-3
<PAGE> 34
"Restricted Shares" means restricted shares of Common Stock,
subject to the terms and conditions provided for in Section 9.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder, as such law, rules or 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 2,075,000 shares.
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 2,075,000 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 125,000 shares of
A-4
<PAGE> 35
Common Stock during any calendar year or receive more than 125,000 Stock
Appreciation Rights in any calendar year, subject to adjustments as provided in
Section 12 of this Plan.
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;
A-5
<PAGE> 36
(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 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.
A-6
<PAGE> 37
(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 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
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<PAGE> 38
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 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. FreeStanding Stock Appreciation Rights may
be granted by the Committee at any time to any Participant.
A-8
<PAGE> 39
(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 FreeStanding 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 FreeStanding
Stock Appreciation Rights shall immediately vest and become exercisable
upon a Change in Control.
(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.
A-9
<PAGE> 40
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.
(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)
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<PAGE> 41
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.
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.
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<PAGE> 42
(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.
(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
A-12
<PAGE> 43
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.
A-13
<PAGE> 44
ANNEX B
AMENDED AND RESTATED
1993 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
OF
WOLVERINE TUBE, INC.
ARTICLE I
PURPOSE
The purpose of the Wolverine Tube, Inc. Amended and Restated 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
"Administration Committee" means the committee of the Board, which is
composed of the members of the Board who are not Outside Directors, that
administers the Plan in accordance with Article VIII hereof.
"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
14.03 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.
B-1
<PAGE> 45
"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.
"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
185,000 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 and Periodic Grants. Unless otherwise determined by
the Administration Committee, each Outside Director shall be granted the
following options: (a) 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"); (b) on each anniversary 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 "Periodic Options").
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<PAGE> 46
5.02 Additional Grants. In addition to the Options granted pursuant
to Section 5.01 above, each Outside Director may be granted additional Options
in lieu of any retainer or other compensation otherwise payable to the Outside
Director (the "Additional Options").
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. Unless otherwise determined by the Administration Committee, Periodic
Options and Additional Options shall be fully vested when granted.
6.02 Exercisability. Options 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 By-Laws 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> 47
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
ADMINISTRATION
The Plan shall be administered by the Administration Committee, which
shall be composed of all of 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 Board shall be liable for
anything whatsoever in connection with the administration of the Plan except
such member's own willful misconduct.
B-4
<PAGE> 48
ARTICLE IX
AMENDMENTS AND TERMINATION
9.01 Amendments. Subject to Section 9.02 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.
9.02 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.
9.03 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 X
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.
ARTICLE XI
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.
B-5
<PAGE> 49
ARTICLE XII
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 XIII
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 XIV
MISCELLANEOUS
14.01 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.
14.02 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.
14.03 Change in Control. A "Change in Control of the Company" means:
(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
B-6
<PAGE> 50
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
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
B-7
<PAGE> 51
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> 52
WOLVERINE TUBE, INC.
1525 PERIMETER PARKWAY, SUITE 210
HUNTSVILLE, ALABAMA 35806
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Dennis Horowitz 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, 1999 by the
undersigned, at the Annual Meeting of Stockholders to be held on May 20, 1999,
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: James E. Deason, Thomas P. Evans and Gail O. Neuman
<TABLE>
<S> <C>
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed above
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST ABOVE.
2. Proposal to approve the Amendment to the Company's 1993 Equity Incentive
Plan as described in the Proxy Statement for the Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the Company's Amended and Restated 1993 Stock Option
Plan for Outside Directors as described in the Proxy Statement for the
Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
(CONTINUED FROM THE OTHER SIDE)
4. Proposal to ratify the appointment of Ernst & Young LLP as Independent
Auditors for the Company for Fiscal Year 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
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: , 1999
------------------
------------------------------
------------------------------
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).
