<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material pursuant to (S)(S) 240.14a-11(c) or (S)(S) 240.14a-12
Wabash National 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)(4) and 0-11
1) Title of each class of securities to which transaction applies
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2) Aggregate number of securities to which transaction applies:
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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)
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4) Proposed maximum aggregate value of transaction.
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5) Total fee paid:
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[_] 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:
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Notes:
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<PAGE>
WABASH NATIONAL CORPORATION
1000 Sagamore Parkway South
Lafayette, Indiana 47905
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1997 Annual Meeting of Stockholders of Wabash National Corporation
will be held at the University Inn, West Lafayette, Indiana on Thursday, May 8,
1997, at 3:00 p.m. for the following purposes:
1. To elect six members of the Board of Directors.
2. To amend the 1992 Stock Option Plan.
3. To consider and act upon such other business as
may properly come before the meeting.
Whether or not you expect to attend the meeting, you are requested to
sign, date and return the enclosed proxy as promptly as possible in the enclosed
stamped envelope.
By Order of the Board of Directors
/s/ John R. Gambs
JOHN R. GAMBS
Secretary
Lafayette, Indiana
March 26, 1997
<PAGE>
PROXY STATEMENT
Annual Meeting of Stockholders--May 8, 1997
This Proxy Statement is furnished on or about April 3, 1997 to
stockholders of Wabash National Corporation (the "Corporation"), 1000 Sagamore
Parkway South, Lafayette, Indiana 47905, in connection with the solicitation by
the Board of Directors of the Corporation of proxies to be voted at the Annual
Meeting of Stockholders to be held at the University Inn, West Lafayette,
Indiana on Thursday, May 8, 1997. The stockholder giving the proxy has the power
to revoke the proxy at any time before it is exercised. Such right of revocation
is not limited by or subject to compliance with any formal procedure.
The cost of soliciting proxies will be borne by the Corporation. Copies
of solicitation material may be furnished to brokers, custodians, nominees and
other fiduciaries for forwarding to beneficial owners of shares of the
Corporation's Common Stock, and normal handling charges may be paid for such
forwarding service. Solicitation of proxies may be made by mail, personal
interview, telephone and telegraph by officers and other management employees of
the Corporation, who will receive no additional compensation for their services.
At the close of business on February 28, 1997, there were 18,910,923
shares of the Common Stock of the Corporation outstanding and entitled to vote
at the meeting. Only stockholders of record on March 20,1997 will be entitled to
vote at the meeting, and each share will have one vote.
Election of Directors
Six directors are to be elected. Proxies representing shares held on the
record date which are returned duly executed will be voted, unless otherwise
specified, in favor of the six nominees for the Board of Directors named below.
All such nominees are currently directors of the Corporation. Each of the
nominees has consented to be named herein and to serve on the Board if elected.
The name, age, business experience, current committee memberships and
directorships of each nominee for director are as follows:
<TABLE>
<S> <C>
Richard E. Dessimoz..................Age 49
Vice President and Chief Executive
Officer of Wabash National Finance
Corporation since its inception in
December 1991. Prior to his employment by
the Company, he was employed since 1989
by Premier Equipment Leasing Company (an
equipment leasing company) as Chief
Executive Officer and co-owner, and he
was employed from 1985 to 1989 by Evans
Transportation Company (a major lessor of
railcars and truck trailers) as Chief
Operating Officer.
Donald J. Ehrlich....................Member--Executive Committee
Age 59
President and Chief Executive Officer of
the Corporation since its founding and
Chairman of the Board since May, 1995.
Mr. Ehrlich is also a director of Danaher
Corporation, a diversified manufacturer
and Indiana Secondary Market Corporation.
John T. Hackett......................Member--Audit, Executive and Compensation Committees
Age 64
Managing General Partner of CID Equity
Partners, L.P., a private investment
partnership; Mr. Hackett was Vice
President--Finance and Administration of
Indiana University from 1988 to 1991 and
Executive Vice President, Chief Financial
Officer and director of Cummins Engine
Company from 1964 to 1988. Mr. Hackett is
also a director of Irwin Financial
Corporation, Meridian Mutual Insurance
Corporation and Ball Corporation and is
Chairman of the Board of Indiana
Secondary Market Corporation.
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
E. Hunter Harrison...................Member--Audit Committee
Age 52
President and Chief Executive Officer of
Illinois Central Railroad in Chicago,
Illinois. He previously served as Vice
President of Burlington Northern Railroad
in Overland Park, Kansas. Mr. Harrison also
serves on the Board Of Directors of Belt
Railway Co. in Chicago, Illinois; Terminal
Railway in St. Louis, Missouri; TTX Co. in
Chicago, Illinois; and the Association of
American Railroads.
Mark R. Holden.......................Member--Executive Committee
Age 37
Vice President and Chief Financial
Officer of the Corporation since March,
1995. He previously served as Vice
President and Controller of the
Corporation. Prior to his employment by
the Corporation in December 1992, Mr.
Holden was employed by Arthur Andersen
LLP since 1981.
Ludvik F. Koci.......................Member--Audit Committee and Compensation Committees
Age 60
President and Chief Operating Officer of
Detroit Diesel Corporation in Detroit,
Michigan since 1989. He previously served
as Executive Vice President of Detroit
Diesel since its organization. Mr. Koci
also serves on the Executive Committee of
the GMI President's Council, Board of
Directors of Detroit Diesel Corporation
and the Trucking Research Institute.
</TABLE>
Donald J. Ehrlich is the brother of Charles R. Ehrlich and Rodney P.
Ehrlich, executive officers of the Company.
Board Committees
The Board of Directors has established a Compensation Committee, an
Executive Committee and an Audit Committee.
The Compensation Committee is responsible for determining the
Corporation's Compensation policies for executive officers and for administering
the Corporation's 1992 Stock Option Plan pursuant to the provisions of the Plan.
This Committee met once during 1996.
The Executive Committee is responsible for exercising the authority of
the Board of Directors, to the extent permitted by law and the by-laws of the
Corporation, in the interval between meetings of the Board when an emergency
issue or scheduling makes it difficult to convene all directors. This Committee
did not meet during 1996.
The Audit Committee is responsible for recommending the selection of
independent accountants, reviewing the independent accountants' assessments of
the adequacy of the Corporation's internal control system and reviewing the
scope and results of the external audit process. This Committee met twice during
1996.
Attendance at Meetings
During 1996, the Board of Directors of the Corporation held four
meetings. All directors of the Corporation attended 75% or more of all Board
meetings and meetings of committees during the time they were directors of the
Corporation.
Directors' Fees
Directors who are not officers or otherwise affiliated with the
Corporation receive $1,500 per calendar quarter and $500 for each meeting of the
Board attended. All directors are reimbursed for their expenses for any meeting
attended. During 1996, directors who were not officers of the Corporation each
received 1,500 stock options. Options granted had an exercise price of $19.00
per share, which was the fair market value at the time of grant. Options granted
to Directors vest on the date of grant and are exercisable beginning six months
thereafter.
2
<PAGE>
Reports of Beneficial Ownership
The Securities Exchange Act of 1934 requires the Corporation's
directors, executive officers and 10% stockholders to file reports of ownership
of equity securities of the Corporation. To the Corporation's knowledge, based
solely on review of the copies of such reports furnished to the Corporation
during the year ended December 31, 1996 all of such required filings were made
except that Ludvik F. Koci did not file on a timely basis a Form 4 to report one
transaction.
Beneficial Ownership of Common Stock
The following table sets forth certain information as of February 28,
1997 (unless otherwise specified) with respect to the beneficial ownership of
the Corporation's Common Stock by each person who is known to own beneficially
more than 5% of the outstanding shares of Common Stock, each person currently
serving as a director, each nominee for director, each Named Officer (as defined
below), and all directors and executive officers as a group:
<TABLE>
<CAPTION>
Shares of
Common Stock
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
------------------- ------------ --------
<S> <C> <C>
The Crabbe Huson Group, Inc ................................ 1,780,100 9.4%
The Crabbe Huson Special Fund, Inc. ........................
The Crabbe Huson Small Cap Fund
121 SW Morrison
Suite 1400
Portland, OR 97204
State of Wisconsin Investment Board ........................ 1,514,700 8.1%
P.O. Box 7842
Madison, WI 53707
Paine Webber Group, Inc. ................................... 1,350,940 7.2%
1285 Avenue of the Americas
New York, NY 10019
Donald J. Ehrlich .......................................... 428,662(2) 2.3%
Lawrence J. Gross .......................................... 22,500(3) *
Richard E. Dessimoz ........................................ 24,100(3) *
Charles R. Ehrlich ......................................... 31,970(4) *
Rodney P. Ehrlich .......................................... 32,600(4) *
Mark R. Holden ............................................. 13,000(4) *
John T. Hackett ............................................ 10,300(5) *
E. Hunter Harrison ......................................... 9,000(5) *
Ludvik F. Koci ............................................. 10,000(5) *
All Executive Officers and Directors as a group (14 persons) 617,332 3.3%
</TABLE>
* Less than one percent.
3
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options or warrants currently exercisable or exercisable within
60 days of February 28, 1997 are deemed outstanding for purposes of
computing the percentage ownership of the person holding such option but
are not deemed outstanding for purposes of computing the percentage
ownership of any other person. Except where indicated otherwise, and
subject to community property laws where applicable, the persons named in
the table above have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them.
(2) Includes currently exercisable options to purchase 95,000 shares.
(3) Includes currently exercisable options to purchase 18,100 shares.
(4) Includes currently exercisable options to purchase 13,000 shares.
(5) Includes currently exercisable options to purchase 9,000 shares.
Compensation
Executive Compensation
The following table sets forth the annual and long-term compensation for
services in all capacities to the Corporation for the fiscal years ended
December 31, 1996, 1995 and 1994 of the Chief Executive Officer and the other
five most highly compensated executive officers of the Corporation as of
December 31, 1996 (the "Named Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term All Other
Annual Compensation Compensation Compensation(1)
------------------- ------------ ---------------
Awards
------------
Name and Principal Securities Underlying
Position Year Salary Bonus(2) Options (#) 401(K) Insurance
------------------ ---- ------ -------- ---------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Ehrlich................................. 1996 $ 350,000 $ 0 3,200 $ 2,850 $ 1,350
President and Chief Executive Officer 1995 $ 350,000 $ 174,195 50,000 $ 2,864 $ 1,350
1994 $ 258,333 $ 238,157 100,000 $ 3,510 $ 1,350
Lawrence J. Gross................................. 1996 $ 164,000 $ 0 3,200 $ 2,446 $ 306
Vice President-Marketing 1995 $ 141,167 $ 50,185 8,000 $ 2,626 $ 306
1994 $ 129,167 $ 85,056 0 $ 3,304 $ 306
Richard E. Dessimoz............................... 1996 $ 164,000 $ 0 3,200 $ 2,442 $ 522
Vice President and Chief Executive Officer- 1995 $ 141,167 $ 50,185 8,000 $ 2,734 $ 522
Wabash National Finance Corporation 1994 $ 117,250 $ 77,209 0 $ 2,467 $ 522
Mark R. Holden.................................... 1996 $ 157,812 $ 0 3,200 $ 2,331 $ 198
Vice President-Chief Financial Officer 1995 $ 126,042 $ 44,808 8,000 $ 1,891 $ 198
1994 $ 109,833 $ 65,080 0 $ 1,573 $ 198
Charles R. Ehrlich................................ 1996 $ 151,563 $ 0 3,200 $ 2,248 $ 864
Vice President-Manufacturing 1995 $ 126,042 $ 44,808 8,000 $ 2,344 $ 864
1994 $ 109,833 $ 65,092 0 $ 2,504 $ 864
Rodney P. Ehrlich................................. 1996 $ 151,563 $ 0 3,200 $ 2,248 $ 864
Vice President-Engineering 1995 $ 126,042 $ 44,808 8,000 $ 2,344 $ 522
1994 $ 109,833 $ 65,092 0 $ 2,504 $ 522
</TABLE>
(1) "All Other Compensation" consists of (i) contributions to the
Corporation's 401(k) Plan on behalf of all of the Named Officers, and
(ii) payments by the Corporation with respect to term life insurance
for the benefit of the Named Officers.
4
<PAGE>
(2) See the Report on Executive Compensation below for a description of the
Bonus Plan.
Option Grants
Shown below is information on grants to the Named Officers of stock
options pursuant to the Corporation's 1992 Stock Option Plan during the year
ended December 31, 1996.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------
Potential Realizable Value at
Number of Percentage of Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to Exercise or For Option Term (3)
Options Employees Base Price Expiration ----------------------------
Name Granted(1) in 1996 (per share)(2) Date 5%($) 10%($)
---- ---------- -------------- -------------- ---------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Ehrlich.......... 3,200 1.8% $ 19.00 12/12/06 $99,037 $157,700
Lawrence J. Gross.......... 3,200 1.8% $ 19.00 12/12/06 99,037 157,700
Richard E. Dessimoz........ 3,200 1.8% $ 19.00 12/12/06 99,037 157,700
Mark R. Holden............. 3,200 1.8% $ 19.00 12/12/06 99,037 157,700
Charles R. Ehrlich......... 3,200 1.8% $ 19.00 12/12/06 99,037 157,700
Rodney P. Ehrlich.......... 3,200 1.8% $ 19.00 12/12/06 99,037 157,700
</TABLE>
(1) Options become exercisable ratably beginning one year from date of grant
through five years of date of grant.
(2) Options were granted at fair market value on the date of grant.
(3) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of stock price appreciation from
December 12, 1996 (the date of grant) to December 12, 2006 (the date of
expiration of such options) of 5% and 10%. These assumptions are not
intended to forecast future appreciation of the Corporation's stock price.
The Corporation's stock price may increase or decrease in value over the
time period set forth above.
Option Fiscal Year-End Values
Shown below is information with respect to the unexercised options to purchase
the Corporation's Common Stock granted under the 1992 Stock Option Plan. None of
the Named Officers exercised any stock options during the fiscal year ended
December 31, 1996.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money Options Options
Held at December 31, 1996 at December 31, 1996 (1)
------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Donald J. Ehrlich.............................................. 95,000 133,200 $ 35,640 $ 23,760
Lawrence J. Gross.............................................. 18,100 15,600 14,064 5,001
Richard E. Dessimoz............................................ 18,100 15,600 14,064 5,001
Mark R. Holden................................................. 13,000 13,200 9,826 3,050
Charles R. Ehrlich............................................. 13,000 13,200 9,826 3,050
Rodney P. Ehrlich.............................................. 13,000 13,200 9,826 3,050
</TABLE>
(1) Based on the closing price on the New York Stock Exchange-Composite
Transactions of the Corporation's Common Stock on that date ($18.375 per
share).
5
<PAGE>
Compensation Committee Report on Executive Compensation
During 1996, decisions on cash compensation and stock options of the
Corporation's executive officers were made by the Compensation Committee of the
Board of Directors, which has furnished the following report on its policies.
This report is not deemed to be "soliciting material" or to be "filed" with the
Securities and Exchange Commission (the "SEC") or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the report shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the Corporation
under the Securities Act of 1933, as amended or the 1934 Act.
Compensation Policies Toward Executive Officers
The Corporation's executive compensation policies are intended to provide
competitive levels of compensation that reflect the Corporation's annual and
long-term performance goals, reward superior corporate performance, and assist
the Corporation in attracting and retaining qualified executives. Total
compensation for each of the Named Officers as well as the other executive
officers is comprised of three principal components: base salary, annual
incentive compensation and grants of options to purchase the Corporation's
Common Stock.
Base Salary. Each year the Compensation Committee fixes the base salaries
of each of the executive officers and that of the Chief Executive Officer based
on available competitive compensation data and the Compensation Committee's
assessment of each officer's past performance and its expectation as to future
contributions.
Annual Bonus Plan. The amount of annual bonuses paid to the executive
officers under the Corporation's bonus program (the "Bonus Plan") depends mainly
upon whether, and the extent to which, the Corporation achieved certain
pre-established working capital, profit and specific strategic objectives. Under
the Bonus Plan, the Corporation has established for each participant a
percentage of his annual base salary which is to be the participant's standard
bonus percentage (the "Standard Bonus Percentage"). The Standard Bonus
Percentages are reviewed each year by the Compensation Committee and changes are
made when deemed necessary.
Generally, if the Corporation achieves its working capital, profit and
specific strategic objectives, each Bonus Plan participant will accrue a bonus
for the year which is equal to his Standard Bonus Percentage of his base pay for
the year. If the Corporation's performance is 25% below its objectives, each
participant accrues a bonus equal to half of his Standard Bonus Percentage of
base pay. If the Corporation's performance is 10%, 20%, 30%, 40%, or 50% above
its objectives, each participant accrues a bonus equal to 120%, 140%, 160%, 180%
or 200% of his Standard Bonus Percentage of base pay, respectively. Bonuses are
prorated for Corporation performance which falls between these achievement
percentages. After the bonus percentage is computed for each Bonus Plan
participant, the Compensation Committee may in its discretion increase or
decrease the percentage, based upon individual performance. Bonuses are paid to
participants in the calendar year following the year in which bonuses are
accrued by the participants. For 1996, the Corporation achieved 42% of its
targeted objectives. As a result, there were no bonuses paid out for 1996.
Bonuses for 1994, 1995 and 1996 for each of the Named Officers appear under the
caption "Bonus" in the Summary Compensation Table on page 4.
Long Term Compensation Through Stock Options. In 1992, the Corporation
adopted its 1992 Stock Option Plan (the "1992 Plan") to provide for
discretionary grants of stock options to employees as a means of achieving the
goal of creating long-term compensation incentives. During 1996, the 1992 Plan
was administered by the Compensation Committee. Options granted to employees
under the 1992 Plan vest cumulatively to the extent of one-fifth of the amount
granted on each of the first five anniversary dates of the date of effectiveness
of such grants. Individual option grants were made by the Compensation Committee
based upon the Compensation Committee's deliberations as to the individual's
contribution to the Corporation, overall level of compensation and seniority.
Options granted in 1996 had an exercise price of $19.00 per share, which was the
fair market value at the time of grant.
6
<PAGE>
Mr. Ehrlich's 1996 Compensation
Mr. Ehrlich generally participates in the same executive compensation
plans and arrangements available to the other senior executives. Accordingly,
his compensation also consists of annual base salary, annual bonus and grants of
options. The Compensation Committee's general approach in setting Mr. Ehrlich's
compensation is to be competitive with other companies in the industry, but to
have a large portion of his salary based upon the Corporation's performance.
Submitted by the
Members of the Compensation Committee
John T. Hackett
Ludvik F. Koci
7
<PAGE>
Shareholder Return Performance Presentation
The following graph shows a comparison of cumulative total returns for an
investment in the Common Stock of the Corporation, the S&P 500 Composite Index
and the Dow Jones Transportation Index. This graph is not deemed to be
"solicited material" or to be "filed" with the SEC or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the 1934 Act, and the graph shall
not be deemed to be incorporated by reference into any prior or subsequent
filing by the Corporation under the Securities Act of 1933, as amended or the
1934 Act.
Comparison of Cumulative Total Return to Shareholders
December 31, 1991 through December 31, 1996
Among Wabash National Corporation, the S&P 500 Index
and the Dow Jones Transportation Index
(return assumes dividend reinvestment)
[LINE GRAPH APEARS HERE]
<TABLE>
<CAPTION>
WNC S&P 500 D.J. TRANSPORT
INDEX RETURN INDEX RETURN INDEX RETURN
<S> <C> <C> <C> <C> <C> <C>
12/31/91 16.50 100.00 429.29 100.00 1358.00 100.00
12/31/92 16.58 100.51 448.10 104.38 1449.19 106.71
12/31/93 22.73 137.78 479.02 111.58 1762.31 129.77
12/31/94 39.08 236.85 472.46 110.06 1455.00 107.14
12/31/95 22.48 136.21 629.73 146.69 1981.00 145.88
12/31/96 18.49 112.09 755.65 176.02 2255.63 166.10
</TABLE>
8
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consisting of John T. Hackett and Ludvik F. Koci
determined the Corporation's cash compensation policies for executive officers
during 1996 and administered the 1992 Stock Option Plan pursuant to the
provisions of the 1992 Plan.
Proposal to Amend the 1992 Stock Option Plan
General
The Board of Directors has approved and is proposing for stockholder
approval the Wabash National Corporation Amended 1992 Stock Option Plan ("the
Plan"). The purpose of the Plan, as amended, is to enable eligible employees and
directors of the Corporation or any of its subsidiaries, to purchase shares of
the Corporation's Common Stock and thus to encourage stock ownership by
employees and officers of the Corporation and directors and to encourage the
continued provision of services by employees, officers and directors. The
amendment to the Plan increases the authorized shares reserved for issuance
under the Plan, authorizes broker-assisted option exercises, provides that
options covering all of the shares reserved for issuance under the Plan may be
granted to any officer or other individual during the term of the Plan and
eliminates the requirement for shareholder approval of Plan amendments.
The affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to approve the
Plan, as amended. Unless otherwise indicated, properly executed proxies will be
voted in favor of Proposal 2 to adopt the Plan.
The Board of Directors recommends a vote FOR Proposal 2.
1992 Stock Option Plan
The following summary of the Plan does not purport to be complete, and is
subject to and qualified in its entirety by reference to the complete text of
the Plan, which is attached hereto as Exhibit A and is incorporated herein by
reference.
Description of the Plan
The Plan provides for the grant of non-qualifying options and stock
appreciation rights (SARs) to directors and employees of the Corporation and its
subsidiaries.
The Plan is administered by the Compensation Committee, which consists of
two outside directors appointed by the Board of Directors. The Compensation
Committee makes all determinations concerning the employees of the Corporation
and its subsidiaries to whom non-qualifying options and SARs will be granted.
The Plan has a "formula" feature providing for automatic grants of
non-qualifying stock options to non-employee directors of the Corporation. Each
non-employee director who commences service as a director after January 1, 1994
is granted an initial option to purchase 7,500 shares of Common Stock. A
non-employee director is also granted an additional option to purchase 1,500
shares of Common Stock immediately after each subsequent annual meeting of the
Corporation's stockholders in each of the following years he or she has served
as director for at least one year and is then serving as a director.
The option exercise price for non-qualifying stock options granted under
the Plan is set by the Compensation Committee and shall not be less than 85% of
fair market value of the shares of Common Stock. The maximum option term is 10
years. The option exercise price for non-qualifying stock options granted to
non-employee directors is 100% of fair market value of the shares of Common
Stock, and the option term is 10 years. Options may be exercised at any time
after grant, except as otherwise provided in the particular option agreement. If
there is a change of control of the Corporation, all outstanding options become
exercisable. Options covering all of the shares reserved for issuance under the
Plan may be granted to any officer or other individual during the term of the
Plan. No options may be granted more than 10 years after the effective date of
the Plan.
Payment for shares purchased under the Plan may be made either in cash or,
if permitted by the particular option agreement, by exchanging shares of Common
Stock of the Corporation with a fair market value equal to
9
<PAGE>
the total option exercise price or cash for any difference. Subject to
shareholder approval, options may, if permitted by the particular option
agreement, be exercised by directing that certificates for the shares purchased
be delivered to a licensed broker as agent for the optionee, provided that the
broker tenders to the Corporation cash or cash equivalents equal to the option
exercise price plus the amount of any taxes that the Corporation may be required
to withhold in connection with the exercise of the option.
If an employee's or other individual's service with the Corporation or its
subsidiaries terminates by reason of death his or her options, to the extent
then exercisable, may be exercised within one year after such death unless a
later date is otherwise provided in the particular option agreement (but not
later than the date the option would otherwise expire). If an employee's service
terminates for any reason other than death or disability, options held by such
optionee terminate 30 days after the date of such termination unless a later
date is otherwise provided in the particular option agreement (but not later
than the date the option would otherwise expire). Options granted to
non-employee directors do not terminate on termination of service as a director.
In the event of any change in the number of issued shares of Common Stock
of the Corporation resulting from a subdivision or consolidation of shares or
other capital adjustment, or the payment of a stock dividend or other increase
or decrease of such shares, an appropriate and proportionate adjustment will be
made in the number and kinds of shares subject to the Plan, and in the number,
kinds, and per share exercise price of shares subject to the unexercised portion
of options granted prior to any such change. Any such adjustment in an
outstanding option, however, will be made without a change in the total price
applicable to the unexercised portion of the option but with a corresponding
adjustment in the per share option price.
In the event the Corporation is the surviving or resulting corporation in
any merger, sale of assets or stock, consolidation or corporate reorganization,
any award granted under the Plan will pertain to and apply to the securities to
which a holder of Common Stock would have been entitled. In the event the
Corporation shall not be the surviving or resulting corporation in any merger,
sale of assets or stock, consolidation or corporate reorganization, the
successor corporation may, but is not required to, issue substitute awards so as
to substantially preserve the rights and benefits of participants under the
Plan.
The Board of Directors may amend the Plan with respect to shares of the
Common Stock as to which options have not been granted. The Board of Directors
at any time may terminate or suspend the Plan. Unless previously terminated,
this Plan will terminate automatically on June 30, 2002. No termination,
suspension or amendment of this Plan may, without the consent of the optionee to
whom an option has been granted, adversely affect the rights of the holder of
the option. The Federal income tax consequences of the Plan are discussed below.
See "Federal Income Tax Consequences of Stock Option Plan."
As adopted by the Board and approved by the shareholders in 1992, the Plan
provides that grants may be made with respect to no more than 750,000 shares of
Common Stock in the aggregate. The aggregate grants made since the Plan was
adopted have used 645,000 shares originally authorized for grants under the
Plan.
The amendment to the Plan authorizes an additional 1,000,000 shares of
Common Stock for grants under the Plan. These shares are necessary to provide
for future grants of options under the Plan. The amendment is intended to
further the purpose of the Plan as approved by the shareholders which is to
attract and to encourage the continued employment and service of, and maximum
efforts by, officers, other key employees and other individuals by facilitating
their purchase of a stock interest in the Corporation. In the judgment of the
Board of Directors, an initial or increased option will be a valuable incentive
and will serve to the ultimate benefit of stockholders by aligning more closely
the interests of officers, other key employees and other individuals with those
of the stockholders.
Federal Income Tax Consequences of the Stock Option Plan
The grant of an option is not a taxable event for the optionee or the
Corporation. Upon exercising a non-qualifying (i.e. non-incentive) option, an
optionee will recognize ordinary income in an amount equal to the difference
between the exercise price and the fair market value of the Common Stock on the
date of exercise. If the Corporation complies with applicable reporting
requirements, it will be entitled to a business expense deduction in the same
amount. Upon a subsequent sale or exchange of shares acquired pursuant to the
exercise of non-incentive option, the optionee will have taxable gain or loss,
measured by the difference between the amount realized on this disposition and
the tax basis of the shares (generally, the amount paid for the shares plus the
amount treated as ordinary income at the time the option was exercised).
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If, pursuant to an option agreement, the optionee surrenders shares of
Common Stock in payment of part or all of the exercise price for non-qualifying
options, no gain or loss will be recognized with respect to the shares
surrendered and the optionee will be treated as receiving an equivalent number
of shares pursuant to the exercise of the option in a nontaxable exchange. The
basis of the shares surrendered will be treated as the substituted tax basis for
an equivalent number of option shares received and the new shares will be
treated as having been held for the same holding period as had expired with
respect to the transferred shares. However; fair market value of any shares
received in excess of the number of shares surrendered (i.e., the difference
between the aggregate option exercise price and the aggregate fair market value
of the shares received pursuant to the exercise of the option) will be taxed as
ordinary income. Under current federal income tax law, for 1993 and subsequent
years, the highest tax rate on ordinary income is 39.6% and long-term capital
gains are subject a maximum tax rate of 28%. Gain on a sale of stock acquired as
a consequence of the exercise of an option should qualify as long-term if the
stock has been held for more than one year (after exercise). Because of certain
provisions in the law relating to the "phase out" of personal exemptions and
certain limitations on itemized deductions, the federal income tax consequences
to a particular taxpayer of receiving additional amounts of ordinary income or
capital gain may be greater than would be indicated by application of the
foregoing tax rates to the additional amount of income or gain.
An optionee will recognize ordinary income in the amount received on
exercise of SARs.
Provisions of the Certificate of Incorporation
with Anti-Takeover Effects
Authorized Shares of Capital Stock
The Certificate of Incorporation authorizes the issuance of up to
75,000,000 shares of Common Stock, 18,910,923 shares of which were issued and
outstanding as of February 28, 1997, and up to 25,000,000 shares of Preferred
Stock, none of which were outstanding as of February 28, 1997. Additional shares
of Preferred Stock with voting rights could be issued and would then represent
an additional class of stock required to approve any proposed acquisition. In
addition, such shares of Preferred Stock, together with authorized but unissued
shares of Common Stock, could also represent additional capital required to be
purchased by an acquirer. Issuance of such additional shares may also dilute the
voting interest of the Corporation's stockholders.
On November 7, 1995, the Board of Directors adopted a Stockholder Rights
Plan (the "Plan"). The Plan is designed to deter coercive or unfair takeover
tactics, to prevent a person or group from gaining control of the Company
without offering fair value to all shareholders and to deter other abusive
takeover tactics which are not in the best interest of shareholders.
Under the terms of the Plan, each share of Common Stock is accompanied by
one right; each right entitles the shareholder to purchase from the Company, one
one-thousandth of a newly issued share of Series A Preferred Stock at an
exercise price of $120.
The rights become exercisable ten days after a public announcement that an
acquiring person or group (as defined in the Plan) has acquired 20% or more of
the outstanding Common Stock of the Company (the Stock Acquisition Date) or ten
days after the commencement of a tender offer which would result in a person
owning 20% or more of such shares. The Company can redeem the rights for $.01
per right at any time until ten days following the Stock Acquisition Date (the
10-day period can be shortened or lengthened by the Company). The rights will
expire in November 2005, unless redeemed earlier by the Company.
If, subsequent to the rights becoming exercisable, the Company is acquired
in a merger or other business combination at any time when there is a 20% or
more holder, the rights will then entitle a holder to buy shares of the
Acquiring Company with a market value equal to twice the exercise price of each
right. Alternatively, if a 20% holder acquires the Company by means of a merger
in which the Company and its stock survives, or if any person acquires 20% or
more of the Company's Common Stock, each right not owned by a 20% or more
shareholder, would become exercisable for Common Stock of the Company (or, in
certain circumstances, other consideration) having a market value equal to twice
the exercise price of the right.
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Voting Procedures
Shares can be voted only if the stockholder is present in person or by
proxy. Whether or not you plan to attend in person, you are encouraged to sign
and return the enclosed proxy card. The representation in person or by proxy of
at least a majority of the outstanding shares entitled to vote is necessary to
provide a quorum at the meeting. Directors are elected by a plurality of the
affirmative votes cast.
Abstentions and "non-votes" are counted as present in determining whether
the quorum requirement is satisfied. Abstentions and "non-votes" are treated as
votes against proposals presented to stockholders other than elections of
directors. A "non-vote" occurs when a nominee holding shares for a beneficial
owner votes on one proposal, but does not vote on another proposal because the
nominee does not have discretionary voting power and has not received
instructions from the beneficial owner.
Independent Public Accountants
The accounting firm of Arthur Andersen LLP has acted as the Corporation's
independent public accountants for the year ended December 31, 1996 and has been
selected by the Board of Directors to act as such for 1997. Representatives of
Arthur Andersen LLP are expected to be present at the stockholders meeting and
will have an opportunity to make a statement if they desire and are expected to
be available to respond to appropriate questions.
Stockholder Proposals
All stockholder proposals intended to be considered for inclusion in the
Company's proxy material for the 1998 Annual Meeting of the Corporation must be
received at the Company's principal executive offices no later than December 11,
1997 and must otherwise comply with the rules of the Securities and Exchange
Commission for inclusion in the Corporation's proxy statement and form of proxy
relating to that meeting.
Other Matters
Management knows of no matters to be presented for action at the meeting
other than those mentioned above. However, if any other matters properly come
before the meeting, it is intended that the persons named in the accompanying
form of proxy will vote on such other matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ John R. Gambs
JOHN R. GAMBS
Secretary
March 26, 1997
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EXHIBIT A
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WABASH NATIONAL CORPORATION AMENDED 1992 STOCK OPTION PLAN
SECTION ONE. PURPOSE OF PLAN
The purpose of the Wabash National Corporation Amended 1992 Stock
Option Plan is to increase the ownership of Wabash National Corporation Stock by
certain of the Company's directors and those key employees of the Company who
contribute to the continued growth, development and financial success of the
Company and its Subsidiaries, and to attract and retain such directors and
employees and reward them for the Company's continued profitable performance.
This plan shall consist of grants of Non-Qualified Stock Options and Stock
Appreciation Rights.
SECTION TWO. DEFINITIONS
A. "Award" means, individually or collectively, Non-Qualified Stock
Options or Stock Appreciation Rights.
B. "Board" means the Board of Directors of the Company.
C. "Code" means the Internal Revenue Code of 1986, as amended. Reference
in this Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
promulgated thereunder.
D. "Committee" means the Committee of the Board referred to in Section
Four, elected and designated from time to time by the Board to administer the
Plan.
E. "Company" means Wabash National Corporation or any successors as
described in Section Twelve.
F. "Date of Disability" means the date on which a Participant is
classified as Disabled.
G. "Date of Grant" means the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
H. "Director" means a member of the Board who is not also an employee of
the Company or a Subsidiary.
I. "Disability" or "Disabled" means the classification of a Participant
as "disabled" pursuant to any long term disability plan of the Company or a
Subsidiary, or any amendment or successor provision to such plan.
J. "Early Retirement" means the retirement of an employee under a
retirement or pension plan of the Company or a
Subsidiary prior to the Normal Retirement Date.
K. "Eligible Employee" means any person employed by the Company or a
Subsidiary on a regularly scheduled basis who satisfies all of the requirements
of Section Six.
L. If the Stock is listed on a national securities exchange, "Fair
Market Value" shall be determined on the basis of the last sale price of the
Stock as of the Date of Grant on the New York Stock Exchange or such other
national securities exchange as the Stock is then being traded, or if the Stock
is not traded on such date, as of the date nearest preceding the Date of Grant.
If the Stock is not traded on a national securities exchange, "Fair Market
Value" shall be determined on the basis of the average of the bid and asked
prices for such Stock on the Date of Grant, as reported by a recognized
quotation service, or if there are no quotations on the Date of Grant, on the
date
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nearest preceding on which quotations are reported. In the absence of such
quotations or if the Common Stock is not publicly traded, "Fair Market Value"
shall be determined by the Committee.
M. "Fiscal Quarter Date" means March 31, June 30, September 30, or
December 31 of any year, or such other dates as the Company may, from time to
time, elect as the end dates of fiscal quarters of the Company.
N. "Insider" means an officer or director of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934.
O. "Non-Qualified Stock Option" means an Option which is not qualified
under Section 422 of the Code and which is granted under Section Seven.
P. "Normal Retirement Date" is the normal retirement date as described
in the Company's or Subsidiary's retirement or pension plan.
Q. "Participant" means an Eligible Employee who has been granted an
Award under this Plan.
R. "Plan" means this Wabash National Corporation Amended 1992 Stock
Option Plan.
S. "Retirement" means retirement under a retirement or pension plan of
the Company or a Subsidiary on or after the Normal Retirement Date.
T. "Stock" means the Common Stock of the Company including authorized
but unissued shares and shares held in the treasury of the Company.
U. "Stock Option Agreement" means an agreement with respect to
Non-Qualified Stock Options and Stock Appreciation Rights as described in
Section Nine.
V. "Stock Appreciation Right" means an Award granted under Section
Eight.
W. "Subsidiary" means any corporation of which 20% or more of its
outstanding voting stock or voting power is beneficially owned, directly or
indirectly, by the Company.
X. "Termination" means resignation or discharge from employment with the
Company or any of its Subsidiaries except in the event of death, Disability,
Retirement, or Early Retirement.
Y. "Additional Option" means any Option other than an Initial Option.
Z. "Commencement of Service" means the date of election of the Director
to his or her first term as a Director.
AA. "Effective Date" means May 8, 1997.
BB. "Initial Option" means an Option received by a Director as of the
Effective Date or thereafter as of a Director's Commencement of Service.
CC. "Option" means any option to purchase one or more Shares pursuant to
the Plan including both Initial Options and Additional Options.
SECTION THREE. EFFECTIVE DATE, DURATION, AND SHAREHOLDER APPROVAL
A. Effective Date and Stockholder Approval. Subject to the approval of
this Plan by a majority of the outstanding shares of Stock voted at the 1992
Annual Meeting of Shareholders, this Plan shall be effective as of
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June 30, 1992. Subject to the approval of the amendment of this Plan by a
majority of the outstanding shares of Stock voted at the 1997 Annual Meeting of
Shareholders, the Plan, as amended, shall be effective as of May 8, 1997.
B. Period for Grants of Awards. Awards may be made as provided herein
for a period of 10 years after June 30, 1992.
C. Termination. This plan may be terminated as provided in Section
Thirteen, but shall continue in effect until all matters relating to the payment
of Awards and administration of this Plan have been settled.
SECTION FOUR. ADMINISTRATION
This Plan shall be administered by a Committee designated by the Board
consisting of not less than two members of the Board, each of whom shall qualify
(at the time of appointment to the Committee and during all periods of service
on the Committee) in all respects as a "non-employee director" as defined in
Rule 16b-3 under Securities Exchange Act of 1934, as now in effect or as
hereafter amended. Except as otherwise provided by the Board or hereunder, such
Committee shall have all powers respecting this Plan. Except where the Plan
specifically reserves administrative power or authority to the Board, questions
of interpretation and application of this Plan, or of the terms and conditions
pursuant to which Awards are granted, exercised or forfeited under the
provisions hereof, shall be subject to the determination of the Committee. Such
determination shall be final and binding upon all parties affected thereby.
SECTION FIVE. GRANT OF AWARDS AND LIMITATION OF NUMBER OF SHARES OF STOCK
AWARDED
The Committee may, from time to time, grant Awards of Stock to one or
more Directors or Eligible Employees; provided that, (i) subject to any
adjustment pursuant to Section Eleven or Twelve, the aggregate number of shares
of Stock subject to Awards under this Plan may not exceed 1,750,000 shares; (ii)
to the extent that an Award lapses or the rights of the participant to whom it
was granted terminate, any shares of stock subject to such Award shall again be
available for the grant of an Award hereunder; and (iii) shares ceasing to be
subject to an Award because of the exercise of a Non-Qualified Stock Option and
Stock Appreciation Right shall no longer be available for the grant of an Award
hereunder. In determining the size of Awards, the Committee may take into
account a Participant's responsibility level, performance, potential, cash
compensation level, the Fair Market Value of the Stock at the time of Awards and
such other consideration as it deems appropriate.
SECTION SIX. ELIGIBILITY
Key employees of the Company and its Subsidiaries and Directors who, in
the opinion of the Committee, contribute to the continued growth, development
and financial success of the Company or its Subsidiaries shall be eligible to be
granted Awards under this Plan. Subject to the provisions of this Plan, the
Committee shall from time to time select from the Directors and Eligible
Employees those to whom awards shall be granted and determine the size of the
Awards. No officer or employee of the Company or its Subsidiaries or Directors
shall have any rights to be granted an Award under this plan.
SECTION SEVEN. NON-QUALIFIED STOCK OPTIONS
A. Grants of Non-Qualified Stock Options. An Award pursuant to this
Section Seven shall be granted to a Participant in the form of Non-Qualified
Stock Options to purchase Stock.
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B. Limitations on Non-Qualified Stock Options. The Committee may choose
to grant a Participant Non-Qualified Stock Options subject to guidelines adopted
by the Board or the Committee with respect to the timing and size of such
Non-Qualified Stock Options. In addition, the Committee may in its discretion
provide that an Option may not be exercised in whole or in part for any period
or periods specified by the Board or the Committee. The rights of a Participant
to exercise a Non-Qualified Stock Option are used to calculate amounts received
upon exercise of a related Stock Appreciation Right. In the discretion of the
Board or the Committee, the Company may agree to repurchase Non-Qualified Stock
Options for cash; provided, however, that no Non-Qualified Stock Options shall
be repurchased by the Company from an insider for cash within six months of the
Award to the insider of such Non-Qualified Stock Option hereunder. The Board or
the Committee may grant Awards covering up to the entire number of shares
available for issuance under the Plan (as determined under Section 5) to any one
Participant or to several Participants, in the sole discretion of the Board or
the Committee.
SECTION EIGHT. STOCK APPRECIATION RIGHTS
A. Grants of Stock Appreciation Rights. An Award pursuant to this
Section Eight may only be granted to a Participant who has been granted a
Non-Qualified Stock Option pursuant to Section Seven. Each such Stock
Appreciation Right shall relate to a specific Option granted and may be granted
concurrently with the Non-Qualified Stock Option to which it relates or at any
time prior to the exercise, termination or expiration of such Non-Qualified
Stock Option.
For the purposes of this Plan, the term "Stock Appreciation Right" means
the right to receive from the Company, upon surrender of the Non-Qualified Stock
Option or a portion thereof without payment to the Company, an amount equal to
the Fair Market Value on the exercise date of the total number of Shares for
which the Stock Appreciation Right is exercised, less the exercise price which
the Participant would have otherwise been required to pay upon purchase of the
relevant shares.
A Stock Appreciation Right shall be payable by the Company upon exercise
of such right in cash or Stock, or in any combination thereof, as the Board or
the Committee in its sole discretion may determine.
B. Limitations on Stock Appreciation Rights. In no event shall the total
number of shares of Stock which may be paid to the Participant pursuant to the
exercise of a Stock Appreciation Right exceed the total number of shares subject
to the related Non-Qualified Stock Option. The Board or the Committee may fix,
with respect to Stock Appreciation Rights granted under this Plan, such waiting
periods, exercise dates or other limitations as it shall deem appropriate,
except that a Stock Appreciation Right shall only be exercisable during such
time as the related Non-Qualified Stock Option could be exercised. In addition,
the Board or the Committee may impose a total prohibition on the exercise of
Stock Appreciation Rights for such period or periods as it, in its sole
discretion, deems to be in the best interest of the Company.
SECTION NINE. TERMS AND CONDITIONS OF STOCK OPTION AGREEMENTS
Non-Qualified Stock Options and Stock Appreciation Rights shall be
evidenced by Stock Option Agreements in such form as the Board or the Committee
shall, from time to time, approve. A Stock Appreciation Right shall be evidenced
by an agreement incorporated in or amending the Stock Option Agreement to which
such right relates. Such agreements shall comply with and be subject to the
following terms and conditions:
A. Medium of Payment. Upon exercise of the Non-Qualified Stock Option,
the Option price shall be payable either (i) in United States dollars in cash or
by check, bank draft or money order payable to the order of the Company, or (ii)
in the discretion of the Board or the Committee, through the delivery of shares
of Stock with a Fair Market Value equal to the total option price, or (iii) by a
combination of the methods described in (i) and (ii); provided, however, that in
the case of an Option purchase which is paid by an insider in whole or in part
by the delivery of shares of Stock, the Stock acquired in the exercise shall not
be disposed by the insiders for a six month period commencing on the date on
which the insider acquired the Stock tendered in connection with such exercise
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or any other Stock. Payment in full of the Option price need not accompany the
written notice of exercise provided the notice directs that the Stock
certificate or certificates for the shares for which the Option is exercised be
delivered to a licensed broker acceptable to the Company as the agent for the
individual exercising the Option and, at the time such Stock certificate or
certificates are delivered, the broker tenders to the Company cash (or cash
equivalents acceptable to the Corporation) equal to the Option price plus the
amount (if any) of federal and/or other taxes which the Corporation may, in its
judgment, be required to withhold with respect to the exercise of the Option. An
attempt to exercise any Option granted hereunder other than as set forth above
shall be invalid and of no force and effect. Promptly after the exercise of an
Option and the payment in full of the Option Price of the shares of Stock
covered thereby, the individual exercising the Option shall be entitled to the
issuance of a Stock certificate or certificates evidencing such individual's
ownership of such shares.
B. Number of Shares. The Stock Option Agreement shall state the total
number of shares to which it pertains.
C. Option Price. The option price shall be not less than 85% of the Fair
Market Value of the shares of Stock on the date of the granting of the Option.
D. Term of Non-Qualified Stock Options and Stock Appreciation Rights.
Each Non-Qualified Stock Option and related Stock Appreciation Right granted
under this Plan shall expire not more than 10 years from the date the Option is
granted.
E. Date of Exercise. Except for such limitations as may be provided by
the Board or the Committee in its discretion pursuant to Sections Seven and
Eight, any Options or Stock Appreciation Right may be exercised in whole at any
time or in part from time to time during its term; provided, however, that the
exercise of a Stock Appreciation Right by an insider hereunder for cash shall be
permitted only (i) on or after November 8, 1992 and (ii) pursuant to an election
made during the period beginning on the third business day following the date of
release for publication by the Company of quarterly and annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date.
F. Forfeiture or Exercise of Non-Qualified Stock Option and Stock
Appreciation Right--Employees. In the event a Participant who is an Employee of
the Company or Subsidiary ceases employment with the Company or the Subsidiary
prior to exercise of the Participants Non-Qualified Stock Option and Stock
Appreciation Right, such Non-Qualified Stock Option and Stock Appreciation Right
shall be forfeited and terminated or be exercised only as follows:
(i) Termination. If Termination is at the Participant's request or
for gross misconduct at the Company's request and in the Company's
sole discretion, the Participant's Non-Qualified Stock Option and
Stock Appreciation Right shall be forfeited immediately. If
Termination is for reasons other than at the Participant's request or
for gross misconduct at the Company's request and in the Company's
sole discretion, the Participant's Non-Qualified Stock Option and
Stock Appreciation Right may thereafter be exercised for a period of
30 days from the date of Termination to the extent to which they were
exercisable on the date of Termination.
(ii) Retirement. In the event of Retirement, the Participant shall
have the right, subject to the provisions of Section Nine and
Fourteen, to exercise his Non-Qualified Stock Option and Stock
Appreciation Right within 12 months of the Participant's Normal
Retirement Date, or if later the date of his or her Retirement.
(iii) Early Retirement. If Early Retirement is at the Participant's
request, the Non-Qualified Stock Option and Stock Appreciation Right
shall be forfeited on the Early Retirement Date unless the Board or
the Committee in its discretion decides that the Non-Qualified Stock
Option and Stock Appreciation Right shall be exercisable as if the
Participant had maintained active employment until the Normal
Retirement Date. If Early Retirement is at the Company's request, the
Non-Qualified Stock Option and Stock Appreciation Right shall be
exercisable as if the Participant had maintained active employment
until the Normal Retirement Date.
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(iv) Disability. Upon a Participant's Disability, the Participant's
Non-Qualified Stock Option and Stock Appreciation Right shall be
exercisable as if the Participant had maintained active employment
until the Normal Retirement Date.
(v) Death. If the Participant shall die while in the employment of
the Company or within the period of time after Retirement during
which the Participant would have been entitled to exercise his
Non-Qualified Stock Option and Stock Appreciation Right, the
Participant's estate, personal representative or beneficiary,
whichever succeeds to the Participant's rights under the Plan, shall
have the right to exercise such Non-Qualified Stock Option and Stock
Appreciation Right within 12 months from the date of the
Participant's death to the extent they were exercisable immediately
prior to the Participant's death.
G. Forfeiture or Exercise of Non-Qualified Stock Option and Stock
Appreciation Right--Directors. In the event a Participant who is a Director
ceases to be a Director prior to the exercise of the Participant's Non-Qualified
Stock Option and Stock Appreciation Right, such Non-Qualified Stock Option
and/or Stock Appreciation right may thereafter be exercised only for a period of
thirty days from the date of such cessation of Director status and only to the
extent to which such Non-Qualified Stock Option and Stock Appreciation Right
were exercisable on the last day on which the Director was a Director.
H. Agreement as to Sale of Securities. If, at the time of the exercise
of any Non-Qualified Stock Option or Stock Appreciation Right for shares of
Stock, in the opinion of counsel for the Company, it is necessary or desirable,
in order to comply with any applicable laws or regulations relating to the sale
of securities, that the Participant exercising the Non-Qualified Stock Option or
Stock Appreciation Right shall agree to purchase the shares that are subject to
the Non-Qualified Stock Option or Stock Appreciation Right for investment only
and not with any present intention to resell the same and that if a Participant
shall dispose of such shares only in compliance with such laws and regulations,
the Participant will, upon the request of the Company, execute and deliver to
the Company an agreement to such effect.
I. Other Provisions. Stock Option Agreements authorized under this Plan
may contain such other provisions not inconsistent herewith as the Board or the
Committee shall deem advisable, including a provision to reacquire Options for
cash.
SECTION TEN. GRANT IN SUBSTITUTION FOR NON-QUALIFIED STOCK OPTIONS AND STOCK
APPRECIATION RIGHTS GRANTED BY OTHER CORPORATIONS
Awards may be granted under this Plan from time to time in substitution
for similar awards held by employees of corporations who become or are about to
become key employees of the Company or a Subsidiary as the result of a merger or
consolidation of the employing corporation with the Company or a Subsidiary, or
the acquisition by the Company or a Subsidiary of the assets of the employing
corporation, or the acquisition by the Company or a Subsidiary of 20% or more of
the stock of the employing corporation causing it to become a Subsidiary.
Subject to the procurement of the approval of the stockholders of the Company as
may be required for the Plan to satisfy the requirements under rule 16b-3 under
the Securities Exchange Act of 1934, the terms and conditions of the substitute
Awards so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Board at the time of the grant may deem appropriate to
conform, in whole or in part, to the provisions of the non-qualified stock
options and stock appreciation rights in substitution for which they are
granted.
SECTION ELEVEN. CHANGES IN CAPITAL STRUCTURE
In the event of any change in the number of issued shares of Stock of
the Company resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend or other increase or
decrease of such shares, then appropriate adjustments shall be made by the Board
or the Committee with respect to outstanding Awards and the aggregate number of
shares of stock which may be awarded pursuant to this
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Plan. Additions to Awards issued as a result of any such change shall bear the
same restrictions and carry the same terms as the Awards to which they relate.
In the event of a change in the Company's Stock which is limited to a
change in the designation thereof to "Capital Stock" or other similar
designation, or in par value to no par value, without increase or decrease in
the number of issued shares, the shares resulting from any such change shall be
deemed to be Stock within the meaning of this Plan.
SECTION TWELVE. COMPANY SUCCESSOR
In the event the Company shall be the surviving or resulting corporation
in any merger, sale of assets or stock, consolidation or corporate
reorganization (including a reorganization in which the holders of Stock receive
securities of another corporation), any Award granted hereunder shall pertain to
and apply to the securities to which a holder of Stock would have been entitled.
The Board shall make such appropriate determinations and adjustments as it deems
necessary so as to substantially preserve the rights and benefits both as to
number of shares and otherwise, of Participants under this Plan.
In the event the Company shall not be the surviving or resulting
corporation in any merger, sale of assets or stock, consolidation or corporate
reorganization (including a reorganization in which the holders of Stock receive
securities of another corporation), the successor corporation may, but shall not
be required to, issue substitute awards so as to substantially preserve the
rights and benefits of Participants under this Plan.
SECTION THIRTEEN. AMENDMENT OF PLAN
The Board may at any time and from time to time alter, amend, suspend or
terminate this Plan in whole or in part, except no such action may be taken,
without the consent of the Participant to whom any Award shall have been
granted, which adversely affects the rights of such Participant concerning such
Award, except as such termination or amendment of this Plan is required by
statute, or rules and regulations promulgated thereunder, or as otherwise
permitted hereunder.
SECTION FOURTEEN. MISCELLANEOUS PROVISIONS
A. Non-Transferability. No benefit provided hereunder shall be subject
to alienation or assignment by a Participant (or by any person entitled to such
benefit pursuant to the terms of this Plan), nor shall it be subject to
attachment or other legal process of whatever nature. Any attempted alienation,
assignment or attachment shall be void and of no effect whatsoever. Payment
shall be made only into the hands of the Participant entitled to receive the
same or into the hands of the Participant's authorized legal representative.
B. No Employment Right. Neither this Plan nor any action taken hereunder
shall be construed as giving any right to be retained as a Director, Officer, or
Employee of the Company of any of its Subsidiaries.
C. Tax Withholding. Either the Company or a Subsidiary, as appropriate,
shall have the right to deduct from all Awards paid any Federal, state, local or
employment taxes which it deems are required by law to be withheld with respect
to such payment. In the case of Awards paid in Stock, the Participant receiving
such Stock may be required to pay to the Company or a Subsidiary an amount
required to be withheld with respect to such Stock. At the request of a
Participant, or as required by law, such sum as may be required for the payment
of any estimated or accrued income tax liability may be withheld and paid over
to the governmental entity entitled to receive the same.
D. Acceleration. Except as otherwise provided hereunder, the Board or
the Committee may in its discretion accelerate the time at which a Non-Qualified
Stock Option or Stock Appreciation Right granted
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hereunder may be exercised; provided, however, that, in the event of any such
acceleration with respect to Non-Qualified Stock Options or Stock Appreciation
Right held by an insider, at least six months shall elapse from the date of such
acceleration and (i) in the case of a Non-Qualified Stock Option, to the later
of the date of exercise of the Non-Qualified Stock Option or the disposition of
the Stock acquired by exercising the Non-Qualified Stock Option, or (ii) in the
case of a Stock Appreciation Right, the date of exercise of the Stock
Appreciation Right.
E. Fractional Shares. Any fractional shares concerning Awards shall be
eliminated at the time of payment or payout by rounding down for fractions of
less than one-half and rounding up to fractions of equal to or more than
one-half. No cash settlements shall be made with respect to fractional shares
eliminated by rounding.
F. Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules and regulations, and to such approvals by any government agencies as
may be required. If Stock awarded hereunder may in certain circumstances be
exempt from registration under the Securities Act of 1933, the Company may
restrict its transfer in such manner as it deems advisable to ensure such exempt
status.
G. Indemnification. Each person who is or at any time serves as a member
of the Board of the Committee shall be indemnified and held harmless by the
Company against and from (i) any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which such person may be
a party or in which such person may be involved by reason of any action or
failure to act under this Plan; and (ii) any and all amounts paid by such person
in satisfaction of judgment in any such action, suit or proceeding relating to
this Plan, provided, however, that no such person shall be entitled to
indemnification hereunder for any loss, cost, liability or expense incurred by
such person in his or her capacity as a Participant hereunder. Each person
covered by this indemnification shall give the Company an opportunity, at its
own expense, to handle and defend the same before such person undertakes to
handle and defend it on such person's own behalf. The foregoing right of
indemnification shall not be exclusive of any rights of indemnification to which
such persons may be entitled under the charter or by-laws of the Company or any
of its Subsidiaries, as a matter of law, or otherwise, or any power that the
Company may have to indemnify such person or hold such person harmless.
H. Reliance on Reports. Each member of the Board or the Committee shall
be fully justified in relying or acting in good faith upon any report made by
the independent public accountants of the Company and its Subsidiaries, and upon
any other information furnished in connection with this Plan. In no event shall
any person who is or shall have been a member of the Board be liable for any
determination made or other action taken or any omission to act in reliance upon
any such report or information, or for any action taken, including the
furnishing of information, or failure to act, if in good faith.
I. Governing Law. All matters relating to this Plan or to Awards granted
hereunder shall be governed by the laws of the State of Delaware, without regard
to the principles of conflict of laws.
J. Relationship to Other Benefits. No payment under this Plan shall be
taken into account in determining any benefits under any other pension,
retirement, profit sharing or group insurance plan of the Company or any
Subsidiary.
K. Expenses. The expenses of implementing and administering this Plan
shall be borne by the Company and its Subsidiaries.
L. Titles and Headings. The titles and headings of the sections in this
Plan are for convenience of reference only, and in the event of any conflict,
the text of this Plan, rather than such titles or headings, shall control.
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<PAGE>
SECTION FIFTEEN. FORMULA GRANTS OF OPTIONS TO DIRECTORS
A. Number of Shares and Grant Dates. On the Effective Date, each
Director then serving on the Board shall be granted an Initial Option to
purchase 1,500 shares of Stock. Each Director whose Commencement of Service is
after the Effective Date shall be granted an Initial Option, as of the date of
the Director's Commencement of Service, to purchase 7,500 shares of Stock.
Thereafter, subject to the availability of shares of Stock, immediately
following the annual election of Directors, each Director shall be granted an
Additional Option to purchase 1,500 shares of Stock if he or she has served as a
Director for one (1) year or more and is then serving as a Director on the
Board. The date on which the Board approves the grant of an Option (or such
later date as is specified by the Board) shall be considered the date on which
such Option is granted.
B. Option Price. The Option Price of the shares of Stock covered by each
Option granted pursuant to this Section 15 of the Plan shall be the Fair Market
Value of such shares on the Grant Date. The Option Price shall be subject to
adjustment as provided in Section 11 hereof.
C. Vesting of Options. Subject to the provisions of Section 15(D), the
Initial and Additional options shall be vested upon the Grant Date.
D. Option Period. An Option shall be exercisable only during the Option
Period. The Option Period shall commence six months after the Grant Date shall
end at the close of business on the tenth (10th) anniversary of the Grant Date.
Termination of the Optionee's status as a Director for any reason shall not
cause an Option to terminate. To the extent an Option is not exercisable on the
date of such termination, it shall be forfeited and terminate.
SECTION SIXTEEN. VESTING IN CONNECTION WITH A CHANGE IN CONTROL
In the event of a Change in Control, all non-vested Options outstanding
under the Plan shall immediately vest. A "Change in Control" shall be deemed to
have occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
becomes, after the date hereof, the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities; (ii) during any two (2) year period,
individuals who at the beginning of such period constitute the Board, including
for this purpose any new director whose election resulted from a vacancy on the
Board caused by the mandatory retirement, death, or disability of a director and
was approved by a vote of at least two-thirds (2/3rds) of the directors then
still in office who were directors at the beginning of the period, cease for any
reason to constitute a majority thereof; (iii) the Company consummates a merger
or consolidation of the Company with or into another corporation, the result of
which is that the stockholders of the Company at the time of the execution of
the agreement to merge or consolidate own less than eighty percent (80%) of the
total equity of the corporation surviving or resulting from the merger or
consolidation or of a corporation owning, directly or indirectly, one hundred
percent (100%) of the total equity of such surviving or resulting corporation;
or (iv) the sale in one or a series of transactions of all or substantially all
of the assets of the Company; (v) any person has commenced a tender or exchange
offer, or entered into an agreement or received an option to acquire beneficial
ownership of twenty percent (20%) or more of the total number of voting shares
of the Company unless the Board has made a determination that such action does
not constitute and will not constitute a change in the persons in control of the
Company.
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<PAGE>
PROXY PROXY
WABASH NATIONAL CORPORATION
Proxy Solicited on behalf of the Board of Directors
Annual Meeting of Stockholders to be held May 8, 1997
The undersigned hereby appoints Donald J. Ehrlich and Mark R. Holden, or
either of them, the proxies of the undersigned, with full power of substitution,
to vote all shares of Common Stock of Wabash National Corporation which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held May 8, 1997, or any adjournment thereof, as follows:
Your vote is important. If you do not expect to attend the Annual Meeting,
or if you do plan to attend but wish to vote by proxy, please date, sign and
mail this proxy. A return envelope is provided for this purpose.
(Continued and to be signed on reverse side.)
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<PAGE>
WABASH NATIONAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITIONS.
<TABLE>
<S> <C> <C> <C>
For Withhold For all
All All (Except nominee(s) written below)
1. Election of Six Directors by all Stockholders--
Nominees: Richard E. Dessimoz, Donald J. Ehrlich, [_] [_] [_]
John T. Hackett, E. Hunter Harrison, Mark R. Holden -----------------------------
and Ludvik F. Koci
For Against Abstain
[_] [_] [_]
</TABLE>
2. Proposal to amend 1997 Stock Option Plan.
3. The proxies are authorized to vote in their discretion on any other matters
which may properly come before the Annual Meeting to the extent set forth in
the proxy statement.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder(s). If no direction is made, this Proxy will be
voted FOR Proposals 1 and 2.
Dated: ,1997
-----------------------------
Signature(s)
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Please sign exactly as name appears in the box on the left. When signing as
attorney, executor, administrator, trustee, or guardian, please give your title
as such. If a corporation, please sign full corporate name by president or other
authorized officer. If a partnership, please sign partnership name by authorized
person. If a joint account, please provide both signatures.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
