<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:
[ ] 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-12
WRP Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(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
WRP CORPORATION
500 PARK BOULEVARD, SUITE 1260
ITASCA, ILLINOIS 60143
================================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
================================================================================
To the Shareholders of WRP Corporation:
Notice is hereby given that the annual meeting of shareholders (the
"Meeting" or the "Annual Meeting") of WRP Corporation, a Maryland corporation,
will be convened at the Wyndham Hotel, 400 Park Blvd., Prescott Room, 2nd Floor,
Itasca, Illinois on January 30, 2001 at 9:00 a.m. Central Time (the "Meeting
Date"). Refreshments begin at 8:30 a.m. All holders of our Common Stock, par
value $.01 per share, and Series A Convertible Common Stock, par value $.01 per
share (the "Shareholders") are entitled to attend the Meeting. We are soliciting
proxies, pursuant to the attached Proxy Statement, for use at the Annual Meeting
on the Meeting Date. We expect that a quorum will be present on the Meeting Date
and that the proposals to be considered by the Shareholders will be:
(1) To elect six (6) Class A Directors and two (2) Class B
Directors to hold office until the next annual meeting of
Shareholders or until their respective successors are elected
and qualified;
(2) To concur in the selection of Arthur Andersen LLP as our
independent public accountants for the fiscal year ending June
30, 2001; and
(3) To transact any other business as may properly come before the
Meeting, or any adjournment or postponement thereof.
Only Shareholders of record at the close of business on December 19,
2000, are entitled to receive notice of the Meeting and to vote at the Meeting
or any adjournment or postponement thereof (the "Eligible Holders"). A list of
Eligible Holders will be available for inspection at our office for at least 10
days prior to the Meeting.
Our Transition Report for the six months ending June 30, 2000 on Form
10-K is being mailed concurrently with this Notice and Proxy Statement to all
Shareholders of record.
All Shareholders are cordially invited to attend the Annual Meeting.
Those who cannot attend are urged to sign, date and otherwise complete the
enclosed proxy and return it promptly in the envelope provided. Any Shareholder
giving a proxy has the right to revoke it at any time before it is voted.
By order of the Board of Directors:
Richard Wong
Itasca, Illinois Chairman
December 20, 2000
<PAGE> 3
================================================================================
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
WRP CORPORATION
JANUARY 30, 2001
================================================================================
This proxy statement (the "Proxy Statement") is furnished to all
holders of record as of the close of business on December 19, 2000 of Common
Stock, par value $.01 per share (the "Common Stock"), and Series A Convertible
Common Stock, par value $.01 per share (the "Series A Common Stock") (the
"Shareholders") of WRP Corporation, a Maryland corporation, in connection with
the solicitation of proxies by and on behalf of our Board of Directors (the
"Directors" or the "Board") to be voted at the annual meeting of Shareholders
(the "Meeting" or the "Annual Meeting"). The Annual Meeting will be convened at
the Wyndham Hotel, 400 Park Blvd., Prescott Room, 2nd Floor, Itasca, Illinois on
January 30, 2001 at 9:00 a.m. Central Time (the "Meeting Date"), or any
adjournment or postponement thereof. This Proxy Statement, and the enclosed form
of proxy are first being mailed or otherwise delivered to Shareholders on or
about December 20, 2000. Shareholders who wish to attend the Meeting should
contact us at (630) 285-9191 so that arrangements can be made.
We expect that a quorum will be present on the Meeting Date and that
the proposals to be considered by the Shareholders will be:
(1) To elect six (6) Class A Directors and two (2) Class B
Directors to hold office until the next annual meeting of
Shareholders or until their respective successors are elected
and qualified;
(2) To concur in the selection of Arthur Andersen LLP as our
independent public accountants for the fiscal year ending June
30, 2001; and
(3) To transact any other business as may properly come before the
Meeting, or any adjournment or postponement thereof.
THE PROXIES SOLICITED BY US PURSUANT TO THIS PROXY STATEMENT ARE
SOLICITED FOR USE AT THE MEETING WHEN CONVENED ON THE MEETING DATE AND ANY
SUBSEQUENT ADJOURNMENTS AND MAY NOT BE USED FOR ANY OTHER PURPOSE, INCLUDING THE
DETERMINATION OF WHETHER A QUORUM IS PRESENT, PRIOR TO THE MEETING DATE.
THEREFORE, IT IS ANTICIPATED THAT THE BUSINESS TO BE CONSIDERED AT THE MEETING,
WITH RESPECT TO WHICH PROXIES ARE SOLICITED PURSUANT TO THIS PROXY STATEMENT,
WILL BE ADDRESSED ON THE MEETING DATE.
The shares of Common Stock and/or the Series A Common Stock (the
"Shares") represented by properly executed proxies in the accompanying form
received by the Board of Directors prior to the Meeting Date will be voted at
the Meeting. The Shares not represented by properly executed proxies will not be
voted. Where a Shareholder specifies a choice in a proxy with respect to any
matter to be acted upon, the Shares represented by such proxy will be voted as
specified. When a Shareholder does not specify a choice, in any otherwise
properly executed proxy, with respect to any proposal referred to therein, the
Shares represented by such proxy will be voted with respect to such proposal in
accordance with the recommendations of the Board of Directors described herein.
A Shareholder who signs and returns a proxy in the accompanying form may revoke
it by: (i) giving written notice of revocation to our Assistant Secretary before
the proxy is voted at the Meeting on the Meeting Date; (ii) executing and
delivering a later-dated proxy; or (iii) attending the Meeting on the Meeting
Date and voting his or her Shares in person.
<PAGE> 4
In electing directors only, the Common Stock and the Series A Common
Stock each vote as a separate class. Six (6) Class A Directors will be elected
by the holders of the Series A Common Stock and two (2) Class B Directors will
be elected by the holders of the Common Stock. The Class A Directors and the
Class B Directors will be elected by a majority of the votes cast by the
respective class. Approval of the ratification of Arthur Andersen LLP as our
independent public accountants for the year ending June 30, 2001 requires the
affirmative vote of the holders of at least a majority of all outstanding shares
of Common Stock and Series A Common Stock, with the holders of Common Stock and
Series A Common Stock voting together as a single class. Shares represented at
the Meeting as the result of proxies marked "abstain" will be counted for
purposes of determining the existence of a quorum at the Meeting, but will not
be voted. Shareholders have no cumulative voting rights. Shares held by brokers
will not be considered entitled to vote on matters as to which the brokers have
not received authority to vote from beneficial owners.
It is not anticipated that matters other than those set forth in the
Notice of Annual Meeting, as described herein, will be brought before the
Meeting for action. If any other matters properly come before the Meeting, it is
intended that votes thereon will be cast pursuant to said proxies in accordance
with the best judgment of the proxy holders.
RECORD DATE
The close of business on December 19, 2000 has been fixed by our Board
of Directors as the record date (the "Record Date") for the determination of
Shareholders entitled to receive notice of, and to vote at, the Meeting. Each
outstanding share of Common Stock is entitled to one (1) vote on all matters
herein, except for the election of the Class A Directors; Common Stock
Shareholders are entitled to vote only for the election of Class B Directors.
Each outstanding share of Series A Common Stock is entitled to one (1) vote on
all matters herein, except for the election of Class B Directors; Series A
Common Stock Shareholders are entitled to vote only for the election of Class A
Directors. On the Record Date, we had outstanding 5,562,792 shares of Common
Stock and 1,252,538 shares of Series A Common Stock. Only Shareholders of record
as of the Record Date will be entitled to vote at the Meeting or any adjournment
thereof. A quorum, consisting of the holders of at least a majority of all
issued and outstanding Shares eligible to vote, must be present, in person or by
proxy, at the Meeting for valid Shareholder action to be taken at the Meeting or
any adjournment thereof.
EXPENSES OF SOLICITATION
We will bear the expenses of this solicitation of proxies, including
expenses in connection with the preparation and mailing of this Proxy Statement
and all documents which now accompany or may hereafter supplement it. We
anticipate the total cost of the proxy solicitation to be $10,000. Solicitations
will be made only by the use of the mails, except that, if deemed desirable, our
officers and regular employees may solicit proxies by telephone, telegram,
facsimile, or personal calls. Our officers and regular employees will not be
paid additional compensation for soliciting proxies. It is contemplated that
brokerage houses, custodians, nominees, and fiduciaries will be requested to
forward the proxy soliciting material to the beneficial owners of the Common
Stock held of record by such persons and that we will reimburse them for their
reasonable expenses incurred in connection therewith.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our Common Stock and Series A Common Stock as of
December 19, 2000 by: (i) each Director who beneficially owns Common Stock or
Series A Common Stock; (ii) each Executive Officer; (iii) each person that we
know to beneficially own in excess of five percent of the outstanding shares of
our Common Stock and Series A Common Stock; and (iv) all Directors and Executive
Officers, as a group. Except as otherwise indicated in the footnotes to the
table, the Shareholders named below have sole voting and investment power with
respect to the shares of Common Stock and Series A Common Stock beneficially
owned by them.
<TABLE>
<CAPTION>
Percent of
Amount and Nature of Total Voting
Title of Class Name of Beneficial Owner Beneficial Ownership Stock(4)
-------------- ------------------------ -------------------- ------------
<S> <C> <C> <C> <C>
Series A Common Stock WRP Asia Pacific Sdn. Bhd.(1) 1,252,538 18.4%
Common Stock WRP Asia Pacific Sdn. Bhd.(1) 2,500,000 36.7%
Common Stock Heartland Advisors, Inc.(2) 432,200 6.3%
Common Stock Kamaruddin Taib 7,000(3) *
Common Stock Richard Wong 90,000(3) 1.3%
Common Stock Kwong Ann Lew 30,000(3) *
Common Stock Edward J. Marteka 101,000(3)
Common Stock Edward J. Marteka 13,500 114,500 1.7%
-------
Common Stock George Jeff Mennen 10,000(3)
Common Stock George Jeff Mennen 10,000 20,000 *
-------
Common Stock Robert J. Simmons 10,000(3)
Common Stock Robert J. Simmons 5,000 15,000 *
-------
Common Stock Don L. Arnwine 10,000(3)
Common Stock Don L. Arnwine 3,000 13,000 *
-------
Common Stock Richard Swanson 7,000(3)
Common Stock Richard Swanson 1,000 8,000 *
-------
Common Stock Kenneth Ling 30,000(3) *
Common Stock Robert C. Carter 27,000(3)
Common Stock Robert C. Carter 3,000 30,000 *
-------
Common Stock Total Executive Officers & Directors 322,000(3)
as a group (10 persons) 35,500 357,500 5.2%
-------
</TABLE>
----------------
*Represents less than 1%
(1) WRP Asia Pacific Sdn. Bhd. ("WRP Asia") is located at 28th Floor, Wisma
Denmark, 86, Jalan Ampang, 50450, Kuala Lumpur, Malaysia.
(2) Heartland Advisors, Inc. is located at 789 North Water Street, Milwaukee,
Wisconsin 53202.
(3) Represents shares to be issued upon exercisable options granted under our
Omnibus Equity Compensation Plan.
(4) Percent of class is based on 6,815,330 shares of the combined number of
shares of Series A Common Stock and Common Stock outstanding on December 19,
2000.
3
<PAGE> 6
MATTERS TO BE CONSIDERED BY SHAREHOLDERS
1. ELECTION OF DIRECTORS
Eight (8) individuals will be elected at the Annual Meeting to serve as
our Directors, until the next annual meeting of Shareholders or until their
successors have been elected and qualified. The biographies of the nominees
designated by the Board of Directors, all of whom are presently Directors, are
set forth below. Six (6) of the nominees have been nominated as Class A
Directors and two (2) have been nominated as Class B Directors. Holders of
Common Stock and Series A Common Stock each vote as a separate class only with
respect to the election of Directors. We have been advised by the holder of the
Series A Common Stock that its proxy is to be voted FOR the six (6) Class A
nominees for Directors listed below. In the event any nominee is unable or
declines to serve as a Director at the time of the Annual Meeting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. As of the date of this Proxy Statement, we are
not aware of any nominee who is unable or will decline to serve as a Director.
The nominees receiving a majority of the votes of shares of Common Stock or
Series A Common Stock required for election, as the case may be, shall be
elected. See "Compensation of Directors and Executive Officers" regarding
compensation of Directors.
CLASS A DIRECTORS
<TABLE>
<CAPTION>
Year Became a
Name Age Principal Occupation(s) During Past 5 Years Director
---- --- ------------------------------------------- -------------
<S> <C> <C> <C>
Kamaruddin Taib 43 Elected Class A Director on April 1, 1998. Kamaruddin Taib is 1998
currently the Deputy Executive Chairman of WRP Asia. He formerly
served as the Group Managing Director of various Malaysian
publicly listed companies. Mr.Taib holds a Bachelor of Science
(Mathematics) degree from the University of Salford, United
Kingdom. Upon completing his studies, he joined a leading local
Merchant Bank for three years (1980-1983) where he had extensive
exposure in corporate and financial advisory work.
Richard C.M. Wong 55 Elected Class A Director on May 20, 1997, Mr. Wong currently 1997
serves as our Chairman of the Board and Chief Executive Officer.
Mr. Wong is the President and Chief Executive Officer of WRP Asia.
In addition, he is a Deputy Chairman of Nylex Malaysia Bhd. and a
director of two other publicly listed companies in Malaysia. Mr.
Wong is the founder of TEC Asia Centre, an international
organization of Chief Executive Officers who share ideas to manage
change and remain competitive.
Edward J. Marteka 63 Class A Director and former President. Mr. Marteka had served 1995
as our President and President of our subsidiary, American
Health Products Corporation ("AHPC") since its incorporation in
1989. Mr. Marteka resigned as President of WRP Corporation and
AHPC effective November 30, 2000. From 1968 to 1988, Mr. Marteka
held various positions with Baxter Healthcare Corporation,
having served as Vice President of its International Division.
Kwong Ann Lew 40 Elected Class A Director on May 20, 1997 and was our Chief 1997
Financial Officer and Secretary from 1997 through March 2000.
Mr. Lew is an Executive Director and Chief Financial Officer of
WRP Asia. He is a member of the Malaysian CPA Society and
Institute of Taxation and was with Arthur Andersen LLP from 1988
to 1991. Prior to joining WRP Asia, he held various key
management positions in two public listed companies, primarily
in the corporate and judicial advisory areas.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C> <C>
George Jeff Mennen 60 Elected Class A Director on October 12, 1994. For over five 1994
years, Mr. Mennen has headed the G.J. Mennen Group, a consulting
firm specializing in family-owned businesses. Mr. Mennen had a
distinguished career at The Mennen Company, including being the
Vice-Chairman of the company. The Mennen Company was founded by
Mr. Mennen's great grandfather in 1878 and remained privately
owned until it was sold in 1992 to Colgate-Palmolive.
Richard Swanson 65 Elected Class A Director on June 12, 1998. Mr. Swanson is 1998
presently a consultant with The Executive Committee, an
international company that focuses on strategic coaching and
corporate troubleshooting for CEO's of public and private
companies. Also, since 1980, Mr. Swanson has been the president
of two Denver, Colorado based companies, Investment Partners,
Inc. and Real Estate Associates, Inc. Investment Partners is
engaged in the restructuring and recapitalization of troubled
companies, and Real Estate Associates focuses on the acquisition
and development of real estate projects.
</TABLE>
CLASS B DIRECTORS
<TABLE>
<CAPTION>
Year Became a
Name Age Principal Occupation(s) During Past 5 Years Director
---- --- ------------------------------------------- -------------
<S> <C> <C> <C>
Robert J. Simmons 57 Mr. Simmons is currently President of RJS HealthCare, Inc., a 1995
healthcare consulting company, founded in 1990. He served as
executive vice president at Baxter International, Inc. from 1987
until founding RJS in 1990. Mr. Simmons joined Baxter after
serving over 20 years at American Hospital Supply Corporation.
His last position at American Hospital Supply Corporation was
vice president of corporate marketing.
Don L. Arnwine 68 Mr. Arnwine is President of Arnwine Associates, a company he 1995
formed in 1989 to provide specialized advisory services to the
health care industry. From 1961 to 1972, Mr. Arnwine served as
Director of the Hospital at the University of Colorado Medical
Center. From 1972 to 1982, he served as President and CEO of the
Charleston Area Medical Center. Mr. Arnwine became President and
CEO of Voluntary Hospitals of America (VHA) in 1982, and was
named Chairman and CEO in 1985, in which capacity he served
until founding Arnwine Associates.
</TABLE>
BOARD MEETINGS AND COMMITTEES
During the six months ending June 30, 2000, our Board of Directors held
two meetings. All other actions by the Board of Directors were taken by
unanimous written consent without a meeting.
The Board of Directors has a Compensation Committee that administers
our Omnibus Equity Compensation Plan (the "Plan"). The Compensation Committee is
responsible for reviewing, determining and establishing the salaries, bonuses
and other compensation of our executive officers. During the six months ending
June 30, 2000, the Compensation Committee held one meeting and all other actions
of the Compensation Committee were taken by unanimous written consent without a
meeting. The Compensation Committee currently consists of Kamaruddin Taib,
Richard Wong, George Jeff Mennen and Richard Swanson.
5
<PAGE> 8
During the six months ending June 30, 2000, the Audit Committee held
one meeting. The Audit Committee consists of Don Arnwine, Richard Swanson and
George Jeff Mennen.
We, the members of the Audit Committee of WRP Corporation, represent
the following:
1) The Audit Committee has reviewed and discussed the Company's
audited financial statements with management of the Company;
2) The Audit Committee has discussed with Arthur Andersen, LLP,
the Company's independent auditors, the matters required to be
discussed by Statement of Accounting Standards 61, as may be
modified or supplemented;
3) The Audit Committee has received the written disclosures and
the letter from Arthur Andersen LLP required by Independence
Standards Board Standard No. 1, as may be modified or
supplemented, and has discussed with Arthur Andersen LLP its
independence and;
4) Based on the review and discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's
Transition Report on Form 10-K for the six months ended June
30, 2000.
Don Arnwine Richard Swanson George Jeff Mennen
The Board of Directors has adopted a written charter for the Audit
Committee, a copy of which is included as an appendix to this Proxy Statement.
All of the members of the Audit Committee are independent, as independence is
defined in Section 4200 of the rules of the Nasdaq Stock Market.
RECOMMENDATION OF THE BOARD: The Board hereby recommends and nominates
each of Messrs. Kamaruddin Taib, Richard Wong, Edward J. Marteka, Kwong Ann Lew,
George Jeff Mennen and Richard Swanson for election as Class A Directors, and
each of Messrs. Robert J. Simmons and Don L. Arnwine for election as Class B
Directors of the Company to serve until the next annual meeting of Shareholders
or until their respective successors are elected and qualified.
2. CONCURRENCE IN SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as our
independent public accountants to audit our financial statements for the six
month period ending June 30, 2001 and has determined that it would be desirable
to request that the Shareholders approve such appointment. Arthur Andersen LLP
is knowledgeable about our operations and accounting practices and is well
qualified to act in the capacity of our independent public accountants. A
representative of Arthur Andersen LLP is expected to be present at the Meeting
and will have the opportunity to make a statement if he or she so desires. The
representative also is expected to be available to respond to appropriate
questions from Shareholders.
RECOMMENDATION OF THE BOARD: The Board considers Arthur Andersen LLP to
be well-qualified and recommends that the Shareholders concur in the following
resolution which will be presented for a vote of the Shareholders at the Annual
Meeting:
RESOLVED, that the Shareholders concur in the appointment, by the
Board, of Arthur Andersen LLP to serve as our independent public accountants for
the fiscal year ending June 30, 2001.
6
<PAGE> 9
The affirmative vote of a majority of the votes cast by Shareholders
present in person or by proxy and eligible to vote at the Meeting, a quorum
being present, is required for the adoption of the foregoing resolution. For
purposes hereof, the holders of Series A Common Stock and Common Stock vote as a
single class.
EXECUTIVE OFFICERS
The following table sets forth information with respect to our
executive officers. Each officer is appointed by the Board of Directors and
serves until his successor is elected and qualified or until his death,
resignation or removal by the Board of Directors. Our executive officers are
Richard Wong, Chairman and C.E.O., Neil Kosterman, President, Kenneth Ling,
Acting C.O.O., Chief Financial Officer and Secretary, and Robert C. Carter,
Controller and Assistant Secretary. The biography of Richard Wong is set forth
above.
<TABLE>
<CAPTION>
Year Became
Name Age Principal Occupation(s) During Past 5 Years an Officer
---- --- ------------------------------------------- -----------
<S> <C> <C> <C>
Neil Kosterman 53 President of the Company since December 2000. Since 1992, Mr. 2000
Kosterman was President of DeltaQuest LLC, a consulting firm
which specializes in strategic marketing and business
development. Since then, he has co-founded several medical and
pharmaceutical companies while recently co-founding Venture
Wrx LLC, which is dedicated to assisting entrepreneurial
businesses. Mr. Kosterman's corporate career has included
senior management positions with C.R. Bard Inc., Pfizer Inc.,
and Smith & Nephew PLC (United Kingdom) covering product
development, new product launches, marketing, strategic
planning and acquisitions.
Kenneth Ling 35 Chief Financial Officer and Secretary. Mr. Ling joined us in 2000
April 2000 as the Acting Chief Operating Officer, Chief
Financial Officer and Secretary. He is a member of the
Institute of Chartered Accountants in Australia. From
September 1998 to April 2000, Mr. Ling held the position of
Vice President-Group Affairs at WRP Asia. Prior to that he was
an Assistant Director with the Prudential Asia Group based in
Singapore involved in private equity investment. He has also
worked with Coopers & Lybrand and Price Waterhouse in
Singapore and Australia in consulting and audit capacities.
Robert C. Carter 39 Controller and Assistant Secretary. Mr. Carter joined us in 1995
March 1992 as the Controller and became the Assistant
Secretary in May 1995. From February 1987 to March 1992, Mr.
Carter was a CPA with Clifton, Gunderson & Co., CPA's. Prior
to that, Mr. Carter worked for Arthur Andersen LLP as an
auditor.
</TABLE>
On March 31, 2000, Mr. Lew Kwong Ann resigned as the CFO and Secretary.
In April 2000, Mr. Kenneth Ling was appointed as Acting C.O.O., CFO and
Secretary.
Effective November 30, 2000, Mr. Marteka resigned as President of WRP
Corporation and AHPC. In December 2000, Mr. Neil Kosterman was appointed as
President of WRP Corporation and AHPC.
7
<PAGE> 10
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
A. DIRECTOR COMPENSATION
All directors, who were not also our executive officers, which group is
comprised of Kamaruddin Taib, George Jeff Mennen, Richard J. Swanson and the
Class B Directors, will receive, (1) an annual Board member retainer of $5,000,
(2) compensation of $1,000 for each Board meeting attended, (3) $500 for each
committee meeting attended and (4) an annual Committee member retainer of
$1,000. Each new Director is presently entitled to receive stock options under
the Plan to purchase 2,000 shares of our Common Stock in connection with his
election and 1,000 shares of our Common Stock per Board meeting attended, up to
a maximum of 5,000 shares for Board meetings attended. Under the terms of the
Plan, the Compensation Committee shall determine the exercise price of a
Director Option, provided that the exercise price shall not be less than the
lowest fair market value of our Common Stock during the six months preceding the
election and qualification of such Director. All Director options are
immediately exercisable for a period of ten years from the date of grant. All
directors will be reimbursed for expenses incurred in attending Board and
Committee meetings.
B. EXECUTIVE COMPENSATION
The following table discloses the compensation paid by the Company for
services rendered in all capacities to the Company during the six-month
transition period ended June 30, 2000 and calendar years ended December 31,
1999, 1998 and 1997 to (i) the Company's former President and (ii) the Company's
executive officers at June 30, 2000 whose aggregate annual salary and bonus are
expected to exceed $100,000 for the 2000 calendar year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------------------------------------
LONG-TERM COMPENSATION
-----------------------
NAME AND OTHER ANNUAL STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Edward J. Marteka 2000 $112,500 $ 34,500 $ 3,600 -- $ 0
Former President 1999 $200,000 $ 20,000 $ 7,200 -- $ 0
1998 $200,000 $100,000 $ 7,200 50,000 $ 0
1997 $160,000 $ 26,667 $ 7,200 5,000 $ 0
Kenneth Ling 2000 $ 25,000 $ 0 $ 0 30,000 $ 5,400(1)
CFO, Acting COO
</TABLE>
----------------
(1) Includes housing and automobile costs associated with Mr. Ling's relocation
to the U.S.
EMPLOYMENT AGREEMENTS
On December 1, 2000, we entered into an employment agreement with Neil
Kosterman (the "Kosterman Agreement"). The Kosterman Agreement provides, among
other things, for: (i) Mr. Kosterman to serve as our President and the President
of AHPC; (ii) a base salary of $225,000 per annum; (iii) life and medical
insurance, automobile allowance and other customary benefits; and (iv) incentive
stock options to be determined by the Compensation Committee.
On April 12, 2000, we entered into an employment agreement with Kenneth
Ling (the "Ling Agreement"). The Ling Agreement provides for: (i) Mr. Ling to
serve as our CFO, Acting COO, Secretary and Treasurer; (ii) a base salary of
$120,000 per annum; (iii) housing costs associated with his relocation to the
U.S.; (iv) incentive stock options to purchase 30,000 shares of Common Stock;
and (v) an automobile provided for his use. Mr. Ling was issued 30,000 stock
options at $1.44, the exercise price of the closing price of the Common Stock on
April 17, 2000, the date of the grant. Mr. Ling's stock options are immediately
exercisable for a period of ten years from the date of grant.
8
<PAGE> 11
On April 1, 1994, we entered into an employment agreement with Edward
J. Marteka (the "Marteka Agreement"). The Marteka Agreement, as amended on June
30, 1995 and on July 22, 1996, provides for: (i) Mr. Marteka to serve as our
President (since May 31, 1995) and AHPC; (ii) a base salary of $140,000 per
annum; (iii) non-qualified stock options to purchase 35,000 shares of Common
Stock under the Plan; and (iv) life and medical insurance, automobile allowance
and other additional customary benefits. The amended Marteka Agreement also
granted to Mr. Marteka additional non-qualified stock options to purchase 14,000
shares of Common Stock.
As approved by the Compensation Committee, all of Mr. Marteka's options
outstanding, totaling 101,000 stock options at February 29, 2000, were repriced
to $2.07, the closing price on that date. Effective January 1, 2000, Mr.
Marteka's base salary was increased to $225,000 per year as approved by the
Compensation Committee.
In connection with the resignation of Mr. Marteka on November 30, 2000,
the Company provided Mr. Marteka with a severance package, which includes, among
other things, a one-year salary, as well as health benefits to be paid for a
one-year period. Mr. Marteka will remain on the Board of Directors.
OPTION GRANTS DURING THE SIX MONTHS ENDED JUNE 30, 2000
The following table sets forth certain information concerning
individual grants of stock options to each of the persons named in the Summary
Compensation Table made during the six-month transition period ended June 30,
2000.
<TABLE>
<CAPTION>
Option Grants in Transition Period
--------------------------------------------------------------------------------------------------------------
Potential Realizable Value
at Assumed Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
-------------------------------------------------------------------------------- ----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in or Expiration
Name Granted (#) Transition Period Base Price Date 5%($) 10%($)
---- ----------- ----------------- ---------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Kenneth Ling 30,000 100% $1.44 4/17/10 $70,371 $112,047
</TABLE>
(1) Represents the value of such options at the end of its ten year term
assuming the market prices of the Common Stock appreciates from the grant date
at an annual compound rate of 5% or 10%. These amounts represent rates of
appreciation only. Actual gains will be dependent on overall market conditions
and on the future performance of our Common Stock. There can be no assurance
that the amounts reflected in this table will be achieved.
AGGREGATED OPTION EXERCISES DURING THE SIX MONTHS ENDED JUNE 30, 2000 AND FISCAL
PERIOD-END OPTION VALUES
The following table provides information on option exercises during the
six-month transition period ended June 30, 2000 by the executive officers named
in the Summary Compensation Table and the value of such officer's unexercised
stock options as of June 30, 2000.
9
<PAGE> 12
<TABLE>
<CAPTION>
Number of Unexercised Value of In-the-Money
Shares Value Options at 6/30/00 Options at 6/30/00(1)
Acquired on Realized --------------------------- ----------------------------
Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward J. Marteka 0 $ - 0 - 101,000 - 0 - $ - 0 - $ - 0 -
Kenneth Ling 0 $ - 0 - 30,000 - 0 - $ - 0 - $ - 0 -
</TABLE>
(1) Represents the total gain which would have been realized if all such options
had been exercised on June 30, 2000.
REPRICING OF STOCK OPTIONS
The following table sets forth information concerning all such
repricing of stock options to an executive officer during the six-month
transition period ended June 30, 2000.
<TABLE>
<CAPTION>
Number of Market Length of
Securities Price of Original
Stock Underlying Stock at Exercise Price New Option Term
Options Options Time of at Time of Exercise Remaining at
Repricing Repriced Repricing Repricing Price Date of
Name and Position Date (#) ($) ($) ($) Repricing
-------------------------------- ----------- ------------ ------------- ------------------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Richard Wong, Chairman 2/29/00 90,000 $2.07 $6.3125 $2.07 8 Years
Edward J. Marteka, 2/29/00 101,000 $2.07 $2.75 - $6.3125 $2.07 4 to 8 Years
Former President
Kwong Ann Lew, CFO 2/29/00 30,000 $2.07 $6.3125 $2.07 8 Years
Robert C. Carter, Controller 2/29/00 27,000 $2.07 $3.66 - $6.3125 $2.07 7 to 8 Years
</TABLE>
As approved by the Board of Directors, all outstanding stock options at
February 29, 2000 to current employees, officers and directors were repriced
effective February 29, 2000 to $2.07, the closing price on that date. The Board
of Directors repriced the stock options to provide an incentive to current
employees, officers and directors for their continued employment. All of the
stock options which were repriced, totaling 483,600 options, originally
contained exercise prices which were significantly higher than the market price.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is currently
comprised of the following four Class A Directors who are Kamaruddin Taib,
Richard Wong, George Jeff Mennen and Richard Swanson, each of whom was appointed
by the Board of Directors. The Committee oversees administration of our Omnibus
Equity Compensation Plan. The purpose of the Plan is to attract and retain
capable and experiences officers and employees by compensating them with
equity-based awards whose value is connected to our continued growth and
profitability. Under the Plan, awards may be made in the form of stock options
or restricted stock. In general, we compensate executive officers and senior
management through salary, bonus (where appropriate) and the grant of stock
options. During the six months ended June 30, 2000, all action of the
Compensation Committee was made during the one meeting held or was taken by the
Committee by unanimous written consent without a meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Kamaruddin Taib, Richard Wong and Kwong Ann Lew are executive directors
and officers of WRP Asia. Accordingly, these members should not be considered as
independent Directors when serving on the Board of Directors or the Compensation
Committee.
10
<PAGE> 13
STOCK PERFORMANCE CHART
The following graph compares the yearly percentage change in the
cumulative total shareholder return on our Common Stock for each of our last
five fiscal years ended June 30 with the cumulative total return (assuming
reinvestment of dividends) of (i) the NYSE/AMEX/Nasdaq Stock Market - U.S. Index
and (ii) a peer group selected by us in good faith. The peer group consists of
American Shared Hospital Services, Daxor Corp., DVI, Inc., Hemacare Corp.,
National Home Health Care Inc. and Prime Medical Services Inc. During the
six-month transition period ended June 30, 2000, our peer group was changed to
exclude two companies which were no longer publicly traded.
* $100 invested on June 30, 1995 in stock or Index - including
reinvestment of dividends. Fiscal year ending June 30.
[PERFORMANCE GRAPH]
CUMULATIVE TOTAL RETURN
-----------------------
<TABLE>
<CAPTION>
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99 6/30/00
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
WRP Corporation 100 31.8 31.8 57.6 53.4 12.4
NYSE/AMEX/Nasdaq Stock 100 126.2 162.7 209.6 251.4 278.1
Peer Group 100 220.5 157.4 196.9 148.4 143.4
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the six months ended June 30, 2000, we purchased latex
powder-free exam gloves amounting to $6.6 million from our majority shareholder,
WRP Asia. In addition, our Indonesian factory sold approximately $5.2 million of
powdered latex exam gloves to WRP Asia during the first half of 2000. We believe
that the terms and conditions of such glove purchases were similar to those
which we could have obtained from unaffiliated third parties.
During the six months ended June 30, 2000, we received consulting
services from Healthcare Alliance, Inc. ("Alliance"), a company 60% owned by
Robert Simmons, one of our directors. We engaged Alliance to assist us in
marketing our products with the expressed purpose of negotiating and executing a
purchase agreement with various healthcare group purchasing organizations. We
paid Alliance $42,216 during the six-month period ended June 30, 2000 for its
services.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires certain officers, directors and beneficial owners of more than 10% of
our Common Stock to file reports of ownership and changes in their ownership of
our equity securities with the Securities and Exchange Commission and Nasdaq.
Specific due dates for these reports have been established and we are required
to report in this transition period any failure to file by these due dates
during our last fiscal year.
11
<PAGE> 14
During the six-month transition period ended June 30, 2000, we reviewed
the filings and noted that several filings were not made on a timely basis. Mr.
Simmons, Arnwine, Marteka, Mennen, Swanson and Ling did not file a Form 3 upon
their commencement as a director or officer of the Company. In September 2000,
all Form 3 filings with respect to these individuals were made as required.
Based upon our review of the filings, we became aware of late Form 4
filings specifically with respect to stock options issued to directors and
officers as follows.
<TABLE>
<CAPTION>
Number
of Late
Individual Position Reports Number of Late Transactions
---------- -------- ------- ---------------------------
<S> <C> <C> <C>
Mr. Simmons Director 6 6 Stock Option Awards Granted
Mr. Arnwine Director 6 6 Stock Option Awards Granted
Mr. Mennen Director 6 6 Stock Option Awards Granted
Mr. Swanson Director 5 5 Stock Option Awards Granted
Mr. Taib Director 4 4 Stock Option Awards Granted
Mr. Lew Director 1 1 Stock Option Award Granted
Mr. Wong Chairman 1 1 Stock Option Award Granted
Mr. Marteka Former President 1 1 Stock Option Award Granted
Mr. Ling CFO 1 1 Stock Option Award Granted
Mr. Carter Controller 1 1 Stock Option Award Granted
</TABLE>
In addition, Mr. Arnwine failed to file on a timely basis one report in
March 1999 relating to a single transaction in Common Stock owned by him. During
September 2000, all of the Form 4 filings were made with respect to all late
filings.
SHAREHOLDER PROPOSALS
We must receive shareholder proposals for the Year 2002 Annual Meeting
of Shareholders at our executive office in Itasca, Illinois, on or prior to
August 21, 2001 for inclusion in our proxy statement for that meeting. Any
Shareholder proposal must also meet the other requirements for shareholder
proposals as set forth in the rules of the U.S. Securities and Exchange
Commission relating to shareholder proposals.
REQUESTS FOR DOCUMENTS
Any requests for documents or other information should be directed to
Robert Carter, Controller and Assistant Secretary at (630) 285-9191. We will
forward such documents, via first class mail, upon receipt of a Shareholder's
written request therefor.
OTHER MATTERS
As of the date of this Proxy Statement, no business, other than that
discussed above, is to be acted upon at the Meeting. If other matters not known
to the Board of Directors should, however, properly come before the Meeting, the
persons appointed by the signed proxy intend to vote it in accordance with their
best judgment.
12
<PAGE> 15
WRP Corporation
By Order of the Board of Directors
Richard Wong
Chairman
Itasca, Illinois
December 20, 2000
================================================================================
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE US THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES. PLEASE PROMPTLY MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.
================================================================================
13
<PAGE> 16
APPENDIX
AUDIT COMMITTEE CHARTER
WRP CORPORATION
ORGANIZATION
The audit committee must be composed of a minimum of three board
members who are independent of the management of WRP Corporation (the "Company")
and are free of any relationship that would interfere with their exercise of
independent judgment as a committee member. The definition of "independent"
shall be in accordance with any applicable NASDAQ and SEC regulations as amended
from time to time. Such members of the audit committee shall be able to read and
understand fundamental financial statements or will become able to do so in a
reasonable period of time after the appointment to the audit committee. At least
one member of the audit committee shall have past employment experience in
finance or requisite professional certificate in accounting or other comparable
experience or background.
STATEMENT OF POLICY
Senior operating management of the Company, as overseen by the Board of
Directors, is responsible for the Company's internal controls. The audit
committee shall assist the Company's board members in fulfilling their
responsibility to the shareholders, potential shareholders and investment
community relating to the reliability and effectiveness of financial reporting
and compliance with applicable laws and regulations. In so doing, the audit
committee shall be responsible for maintaining open communication among board
members, the independent auditors and the management of the Company.
It is acknowledged that the independent auditor's ultimate
accountability is to the Board of Directors and the audit committee, as
representatives of shareholders. The Board of Director's and the audit committee
have authority and responsibility to select, evaluate and, where appropriate,
replace the independent auditor (or to nominate the independent auditor to be
proposed for shareholder approval in any proxy statement).
RESPONSIBILITIES
The audit committee's responsibilities will include the following:
- Ensure receipt from the independent auditor of a formal
written statement delineating all relationships between the
auditor and the Company, consistent with Independence
Standards Board Standard 1. The audit committee will engage in
dialogue with the auditor with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the auditor and will make recommendations to
the Board of Directors to take appropriate action to oversee
the independence of the independent auditor.
- The audit committee will review the auditor's fees to
determine whether they are appropriate for the services they
render.
- Meet with the independent auditors and management of the
Company to review the scope of the proposed audit for the
current year and the audit procedures to be performed.
- Meet with the independent auditors and management of the
Company at the conclusion of the audit to review the results
of the audit, including any comments or recommendations of the
independent auditors, especially the contents of any auditors'
letter to management.
- Confirm and assure the independence of the independent
auditors and review any management consulting services
provided by the independent auditors and the related fees.
<PAGE> 17
- Review with the independent auditors and with the financial
and accounting personnel the adequacy and effectiveness of the
Company's internal controls and elicit any recommendations for
improving the internal controls or particular areas where new
or more detailed controls or procedures are desirable.
- Review legal and regulatory matters that may have a material
effect on the financial statements.
- Inquire of management and the independent auditors regarding
significant risks or exposures and assess the steps management
has taken to minimize such risks and exposures to the Company.
- Review the financial statements contained in the annual report
to shareholders with management and the independent auditors.
- Inquire of the independent auditors regarding their
qualitative judgments about the appropriateness, not just the
acceptability, of the accounting principles and the clarity of
the financial disclosures. Also inquire of the auditors
regarding their reasoning in accepting or questioning
management's significant estimates, changes or proposed
changes in accounting principles and disclosure practices
management employs for new transactions or events.
- Provide sufficient opportunity at all meetings of the audit
committee for the independent auditors to meet with the
members of the audit committee without members of management
present. Among the items to be discussed in these meetings are
the independent auditor's evaluation of the Company's
financial personnel and the cooperation which the independent
auditors received during the course of the audit.
- Consider whether audit committee members are provided with
appropriate background information and training and, when
necessary, seek such information and training from management
or the independent auditors or other relevant parties.
- Submit the minutes of all meetings of the audit committee to
the Board of Directors.
- Investigate any matter brought to its attention within the
scope of its duties, with the power to retain outside counsel
for this purpose if, in its judgment, that is appropriate.
- Review the Company's proxy statement disclosure concerning the
report of the audit committee and the independence of the
members of the audit committee, include the audit committee
charter as an exhibit to the Company's proxy statement at
least once every three years and recommend any changes to the
audit committee charter to the Board of Directors.
- Verify that the independent auditors have reviewed the
Company's financial information prior to filing the Company's
Form 10-Q Reports.
PERIODIC REVIEW OF ADEQUACY OF AUDIT COMMITTEE CHARTER
The audit committee must review and reassess the adequacy of the formal
written audit committee charter on an annual basis.
PERIODIC MEETINGS
The audit committee must meet at least twice per year. More frequent
meetings are encouraged, as needed. The meetings may be held either in
person or by telephonic communications.
<PAGE> 18
PROXY CARD
WRP CORPORATION
COMMON STOCK
500 PARK BOULEVARD, SUITE 1260, ITASCA, ILLINOIS 60143-2639
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Neil Kosterman and Kenneth Ling and
each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote all of the shares of Common
Stock of WRP Corporation, a Maryland corporation, held of record by the
undersigned, at the Annual Meeting of Shareholders ("Meeting") to be held on
January 30, 2001, or any adjournments or postponements thereof, as hereinafter
specified on the matters as more specifically described in our proxy statement
and in their discretion on any other business that may properly come before the
Meeting.
1. Proposal to elect two (2) Class B directors as follows:
Robert J. Simmons Don L. Arnwine
[ ] FOR the election of the [ ] WITHHOLD authority with respect
two nominees. to ______________________________.
SHAREHOLDERS MAY WITHHOLD AUTHORITY
TO VOTE FOR ANY NOMINEE BY WRITING
HIS NAME ON THE LINE ABOVE.
2. Proposal to ratify the Board of Directors' selection of Arthur
Andersen LLP as our independent accountants for the year
ending June 30, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner designated
herein by the undersigned shareholder. If no designation is made, the Proxy will
be voted FOR each of the above Proposals.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED:
----------------------------------------------
----------------------------------------------------
(Signature)
----------------------------------------------------
(Signature if held jointly)
Please sign as name appears hereon. When shares are
held jointly, both should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized officer.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1 AND 2.
<PAGE> 19
PROXY CARD
WRP CORPORATION
SERIES A COMMON STOCK
500 PARK BOULEVARD, SUITE 1260, ITASCA, ILLINOIS 60143-2639
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Neil Kosterman and Kenneth Ling and
each of them as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote all of the shares of Series A
Common Stock of WRP Corporation, a Maryland corporation, held of record by the
undersigned, at the Annual Meeting of Shareholders ("Meeting") to be held on
January 30, 2001, or any adjournments or postponements thereof, as hereinafter
specified on the matters as more specifically described in our proxy statement
and in their discretion on any other business that may properly come before the
Meeting.
1. Proposal to elect six (6) Class A directors as follows:
Kamaruddin Taib Kwong Ann Lew
Richard Wong George Jeff Mennen
Edward J. Marteka Richard J. Swanson
[ ] FOR the election of the six [ ] WITHHOLD authority with respect
nominees. to ______________________________.
SHAREHOLDERS MAY WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE
BY WRITING HIS NAME ON THE LINE
ABOVE.
2. Proposal to ratify the Board of Directors' selection of Arthur Andersen
LLP as our independent accountants for the year ending June 30, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner designated
herein by the undersigned shareholder. If no designation is made, the Proxy will
be voted FOR each of the above Proposals.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED:
-------------------------------------
-------------------------------------------
(Signature)
-------------------------------------------
(Signature if held jointly) Please sign as
name appears hereon. When shares are held
jointly, both should sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership, please
sign in partnership name by authorized
officer.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1 AND 2.
