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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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Wabash National Corporation
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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.
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SEC 1913 (02-02)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Wabash National Corporation
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(Name of Registrant as Specified In Its Charter)
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Payment of Filing Fee (check the appropriate box):
[X] No fee required.
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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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[ ] 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
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SEC 1913 (02-02)
WABASH NATIONAL CORPORATION
1000 SAGAMORE PARKWAY SOUTH
LAFAYETTE, INDIANA 47905
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2005 Annual Meeting of Stockholders of Wabash National Corporation
will be held at the Holiday Inn, 515 South Street, Lafayette, Indiana, 47901 on
Thursday, May 12, 2005, at 10:00 a.m. for the following purposes:
1. To elect eight members of the Board of Directors.
2. To consider and act upon such other matters as may properly
come before the meeting.
IMPORTANT: Whether or not you expect to attend the meeting, you are
requested to mark, sign, date, and return the enclosed proxy as promptly as
possible in the enclosed stamped envelope.
By Order of the Board of Directors
/s/ CYNTHIA J. KRETZ
---------------------------
CYNTHIA J. KRETZ
Secretary
Lafayette, Indiana
April 11, 2005
WABASH NATIONAL CORPORATION
1000 SAGAMORE PARKWAY SOUTH
LAFAYETTE, INDIANA 47905
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS--MAY 12, 2005
This Proxy Statement is furnished on or about April 11, 2005 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 Holiday Inn, 515 South Street,
Lafayette, Indiana, 47901 on Thursday, May 12, 2005, at 10:00 a.m., and at any
adjournments or postponements of the Annual Meeting. The stockholder giving the
proxy has the power to revoke the proxy at any time before it is exercised. This
right of revocation is not limited by or subject to compliance with any formal
procedures.
The cost of soliciting proxies will be borne by the Corporation. Copies of
solicitation materials 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 facsimile by officers, Directors and other management
employees of the Corporation, who will receive no additional compensation for
their services.
At the close of business on April 1, 2005, the record date for the Annual
Meeting, there were 31,168,940 shares of the Common Stock of the Corporation
outstanding and entitled to vote at the meeting, held by 616 stockholders of
record. Only stockholders of record on April 1, 2005, will be entitled to vote
at the meeting, and each share will have one vote. A list of shareholders of
record as of April 1, 2005 will be available for inspection during ordinary
business hours at our offices, 1000 Sagamore Parkway South, Lafayette, Indiana
47905 from May 2, 2005 to the date of our Annual Meeting. The list will also be
available for inspection at the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Corporation's Bylaws provide that its Board of Directors shall be
comprised of not less than three nor more than nine Directors, with the exact
number to be fixed by resolution of the Board of Directors. The Board has
currently fixed the authorized number of Directors at eight.
At the meeting, eight Directors are to be elected for terms of one year or
until their successors are duly elected and qualified. Proxies representing
shares held on the record date which are returned duly executed will be voted,
unless otherwise specified, in favor of the eight nominees for the Board of
Directors named below. Each of the nominees has consented to be named herein and
to serve on the Board if elected. It is not anticipated that any nominee will
become unable or unwilling to accept nomination or election, but, if that should
occur, the persons named in the proxy intend to vote for the election in his or
her stead, such other person as the Nominating and Corporate Governance
Committee may recommend to the Board.
The name, age, business experience, current committee memberships, and
directorships of each nominee for Director, during at least the last five years,
are set forth in the table below. For additional information concerning the
nominees for Director, including stock ownership and compensation, see
"Director's Fees," "Beneficial Ownership of Common Stock," and "Compensation"
below:
David C. Burdakin ........... Member - Compensation, Executive, and Nominating
and Corporate Governance Committees
Age 50
Director of the Corporation since February 2002.
Mr. Burdakin is President of The HON Company, a
manufacturer of office furniture, since February
2000 and Executive Vice President of HNI
Corporation, formerly HON INDUSTRIES, a
diversified manufacturer, since February 2001.
Previously, Mr. Burdakin was President of the HON
Group and has held a variety of positions of
increasing responsibility with HON since 1993.
William P. Greubel........... Member - Executive Committee
Age 53
President, Chief Executive Officer and Director
of the Corporation since May 2002. Mr. Greubel
was a Director and Chief Executive Officer of
Accuride Corporation, a manufacturer of wheels
for trucks and trailers, from 1998 until May l,
2002 and served as President of Accuride
Corporation from 1994 to 1998. Previously, Mr.
Greubel was employed by AlliedSignal Corporation
from 1974 to 1994 in a variety of positions of
increasing responsibility, most recently as Vice
President and General Manager of the
Environmental Catalysts and Engineering Plastics
business units.
John T. Hackett.............. Member - Audit, Compensation, and Executive
Committees
Age 72
Director of the Corporation since November 1991
and Chairman of the Board of Directors of Wabash
National Corporation since October 2001. Mr.
Hackett was Managing General Partner of CID
Equity Partners, L.P., a private investment
partnership, from 1991 until his retirement in
2001. He previously served as Vice
President--Finance and Administration of Indiana
University from 1988 to 1991 and Executive Vice
President, Chief Financial Officer and Director
of Cummins Engine Corporation from 1964 to 1988.
Mr. Hackett is also a Director of Irwin Financial
Corporation.
Dr. Martin C. Jischke........ Member - Audit, Compensation, Executive, and
Nominating and Corporate Governance Committees
Age 63
Director of the Corporation since January 2002.
Dr. Jischke is President of Purdue University,
West Lafayette, Indiana, since August 2000.
Previously, Dr. Jischke was President of Iowa
State University from 1991 to 2000, Chancellor of
the University of Missouri-Rolla from 1986 to
1991, and served in various capacities at the
University of Oklahoma between 1968 and 1986,
including Dean and Interim President. Dr. Jischke
also serves as a Director of Kerr-McGee
Corporation and Duke Realty Corporation.
Stephanie K. Kushner......... Member - Audit, Compensation, and Executive
Committees
Age 49
Director of the Corporation since February 2004.
Ms. Kushner is Vice President and Chief Financial
Officer of Federal Signal Corporation, a
manufacturer and supplier of diverse industrial
products, a position she has held since February,
2002. Prior to joining Federal Signal, she was
employed by affiliates of FMC Corporation for 14
years, most recently as Vice President - Treasury
and Corporate Development for FMC Technologies in
2001 and Vice President and Treasurer for FMC
Corporation from 1999-2001. Before joining FMC,
Ms. Kushner held various financial positions with
AMOCO Corporation, Cyprus Minerals and Homestake
Mining Company.
Larry J. Magee............... Member - Audit and Compensation Committees
Age 50
Director of the Corporation since January 2005.
Mr. Magee is Chairman, CEO and President of BFS
Retail & Commercial Operations, LLC, a retail and
commercial tire and vehicle service operation and
subsidiary of Bridgestone Corporation, a position
he has held since December, 2001. Previously, Mr.
Magee served as President of
Bridgestone/Firestone Retail Division from 1998
until his 2001 appointment. Mr. Magee has held
positions of increasing responsibility within the
Bridgestone/Firestone family of companies during
his 29-year tenure.
2
Scott K. Sorensen ........... Member - Audit and Compensation Committees
Age 43
Director of the Corporation since March 2005. Mr.
Sorensen is Vice President and Chief Financial
Officer of Hillenbrand Industries, Inc., a
manufacturer and provider of products and
services for the health care and funeral services
industries. Prior to joining Hillenbrand, Mr.
Sorensen was Executive Vice President and CFO,
Treasurer of Pliant Corporation (formerly
Huntsman Packaging Corporation) from 1998 to
2001.
Ronald L. Stewart............ Member - Compensation and Nominating and
Corporate Governance Committees
Age 62
Director of the Corporation since December 2004.
Mr. Stewart is President and Chief Executive
Officer of Material Sciences Corporation, a
provider of material-based solutions for
electronic, acoustical/thermal and coated metal
applications, a position he has held since March
1, 2004. Previously, Mr. Stewart was President
and Chief Executive Officer of Pangborn
Corporation from 1999 thru 2004. From 1996 to
1998, Mr. Stewart was President and CEO of Colt
Industries. He currently serves on the Board of
Directors for both Material Sciences Corporation
and Pangborn Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE DIRECTORS
LISTED ABOVE.
BOARD COMMITTEES
The Board of Directors has established a Nominating and Corporate
Governance Committee, a Compensation Committee, an Executive Committee and an
Audit Committee. The charters for the Nominating and Corporate Governance,
Compensation and Audit Committees can be accessed electronically in the
"Corporate Governance Policies" section on the About Us page of our website at
www.wabashnational.com or by writing to us at Wabash National Corporation,
Attention: Corporate Secretary, P.O. Box 6129, Lafayette, Indiana 47903.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee (the Nominating
Committee) met four times during 2004. The Board of Directors has determined
that each of the members of the Nominating Committee is "independent" within the
meaning of the rules of the New York Stock Exchange, Inc. The Nominating
Committee's responsibilities include: (i) assisting the Board by identifying
individuals qualified to become Board members, and by recommending to the Board
the Director nominees for the next annual meeting of stockholders; (ii)
developing and recommending to the Board a set of corporate governance
principles applicable to the Corporation; (iii) leading the Board in its annual
review of the Board's performance; and (iv) recommending to the Board Director
nominees for each Board committee.
COMPENSATION COMMITTEE
The Compensation Committee met seven times during 2004. The Board of
Directors has determined that each of the members of the Compensation Committee
is "independent" within the meaning of the rules of the New York Stock Exchange,
Inc. The Compensation Committee's responsibilities include: (i) overseeing the
Corporation's incentive compensation plans and equity-based plans, and (ii)
annually reviewing and approving the corporate goals and objectives relevant to
the Chief Executive Officer's and other executive officers' compensation,
evaluating their performance in light of those goals and objectives and setting
their compensation level based on this evaluation.
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, 2000 Stock Option and Incentive Plan,
2004 Stock Incentive Plan, 1997 Stock Bonus Plan, and 2001 Stock Appreciation
Rights Plan, pursuant to the provisions of the plans.
3
EXECUTIVE COMMITTEE
The Executive Committee is responsible for exercising the authority of the
Board of Directors, to the extent permitted by law and the Bylaws of the
Corporation, in the interval between meetings of the Board when an emergency
issue or scheduling makes it difficult to convene all Directors. The Executive
Committee did not meet during 2004.
AUDIT COMMITTEE
The Audit Committee met nine times during 2004. The Board of Directors has
determined that each of the members of the Audit Committee is "independent"
within the meaning of the rules of the New York Stock Exchange, Inc. The Board
of Directors also determined that Mr. Hackett and Ms. Kushner are each an "audit
committee financial expert" as defined by the Securities and Exchange Commission
("SEC"). In 2005, Ms. Kushner is taking over the responsibilities as Chair of
the Audit Committee from Mr. Hackett.
The Audit Committee's responsibilities include: (i) reviewing the
independence of the independent auditors and making decisions regarding engaging
and discharging independent auditors; (ii) reviewing with the independent
auditors the plan and results of auditing engagements; reviewing and approving
non-audit services provided by the independent auditors and the range of audit
and non-audit fees; (iii) reviewing the scope and results of the Corporation's
internal audit procedures and the adequacy of the system of internal controls;
(iv) overseeing special investigations; (v) reviewing the Corporation's
financial statements and reports filed with the SEC; (vi) overseeing the
Corporation's efforts to assure that its business and operations are conducted
in compliance with the highest legal and regulatory standards applicable to it,
as well as ethical business practices; (vii) overseeing the Corporation's
internal reporting system regarding compliance by the Corporation with Federal,
state and local laws; (viii) establishing and implementing procedures for
confidential communications for "whistleblowers" and others who have concerns
with the Corporation's accounting, internal accounting controls and audit
matters; and (ix) reviewing significant accounting policies of the Corporation.
ATTENDANCE AT MEETINGS
During 2004, the Board of Directors of the Corporation held four meetings.
All Directors of the Corporation except Mr. Ludvik F. Koci attended 75% or more
of all Board meetings and meetings of committees on which they served in that
year. Mr. Koci will retire from the Board of Directors effective May 12, 2005.
In 2004, 100% of our six Directors then serving attended our annual meeting.
DIRECTOR NOMINATIONS
The Nominating Committee will consider stockholder recommendations for
Directors sent to the Nominating and Corporate Governance Committee, c/o
Corporate Secretary, Wabash National Corporation, P.O. Box 6129, Lafayette,
Indiana 47903. Stockholder recommendations for Director should include: (i) the
name and address of the stockholder recommending the person to be nominated,
(ii) a representation that the stockholder is a holder of record of stock of the
Corporation including the number of shares held and the period of holding, (iii)
a description of all arrangements or understandings between the stockholder and
the recommended nominee, (iv) such other information regarding the recommended
nominee as would be required to be included in a proxy statement filed pursuant
to Regulation 14A promulgated by the SEC pursuant to the Securities Exchange Act
of 1934, as amended, and (v) the consent of the recommended nominee to serve as
the Director of the Corporation if so elected. To submit a recommendation for a
Director for an upcoming annual stockholder meeting, it is necessary that you
notify the Corporation not less than 120 days or more than 180 days before the
first anniversary of the date that the proxy statement for the preceding year's
annual meeting was first sent to stockholders. Our 2004 Proxy Statement is first
being sent to stockholders on April 11, 2005. Thus, in order for any such
nomination to be considered by the Corporation for the 2006 annual meeting, it
must be received by no later than December 12, 2005. In addition, the notice
must meet all other requirements contained in our Bylaws, if any. Upon receipt
by the Corporate Secretary of a stockholder notice of a Director nomination, the
Corporate Secretary will notify the stockholder that the notice has been
received and will be presented to the Nominating Committee for their review.
Stockholders' nominees that comply with these procedures will receive the same
consideration as other candidates identified to the Nominating Committee.
4
To be considered by the Nominating Committee, a Director nominee must meet
the following minimum criteria:
- Director candidates shall have the highest personal and professional
integrity.
- Director candidates shall have a record of exceptional ability and
judgment.
- Director candidates shall have skills and knowledge useful to the
oversight of the Corporation.
- Director candidates must be able and willing to devote the required
amount of time to the Corporation's affairs, including attendance at
Board and committee meetings.
- Director candidates should have the interest, capacity and
willingness, in conjunction with the other members of the Board, to
serve the long-term interests of the Corporation's stockholders.
- To the extent considered appropriate by the Board, a Director
candidate may be required to be a "financial expert" as defined in
Item 401 of Regulation S-K.
- Director candidates shall be free of any personal or professional
relationships that would adversely affect their ability to serve the
best interest of the Corporation and its stockholders.
The Nominating Committee, with the help of the General Counsel and, as
needed, a retained search firm, will screen the candidates, do reference checks,
prepare a biography for each candidate for the Nominating Committee to review
and conduct interviews. The Nominating Committee and the Corporation's Chief
Executive Officer will interview candidates that meet the criteria, and the
Nominating Committee will select nominees that best suit the Board's needs to
recommend to the full Board.
DIRECTOR INDEPENDENCE
Under the rules of the New York Stock Exchange, the Board must
affirmatively determine that a Director has no material relationship with the
Corporation in order for the Director to be considered independent. As permitted
by the New York Stock Exchange rules, to assist the Board in making this
determination, the Board has adopted categorical standards of independence. The
Board has determined that the following relationships are not material
relationships that would impair a Director's independence: Relationships where
the aggregate amount of payments by the Corporation to, and to the Corporation
from, any company of which a Director is an executive officer or employee or
where a family member of a Director is an executive officer, are less than the
greater of $1 million or 2% of such other company's consolidated gross revenues
in any single fiscal year.
The Board has determined that with the exception of William P. Greubel,
our Chief Executive Officer, all the Director nominees are "independent" within
the meaning of the rules of the New York Stock Exchange, Inc. and the
categorical standards described above.
Our independent Directors meet at least twice per year in executive
session without management, and a Chair is appointed to preside at each meeting.
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
Stockholders wishing to report complaints or concerns about the
Corporation's accounting, internal accounting controls or auditing matters or
other concerns to the Board or the Audit Committee may do so by sending an email
to board@wabashnational.com or auditcommittee@wabashnational.com, or by writing
to the Board or Audit Committee at Wabash National Corporation, P.O. Box 6129,
Lafayette, Indiana 47903.
Complaints relating to the Corporation's accounting, internal accounting
controls or auditing matters will be referred to members of the Audit Committee.
Other concerns will be referred to the Nominating and Corporate Governance
Committee. All complaints and concerns will be received and processed by the
General Counsel's office. You will receive a written acknowledgment from the
General Counsel's office upon receipt of your written complaint or concern. You
may report your concerns anonymously or confidentially.
5
DIRECTORS' FEES
Directors who are not officers or otherwise affiliated with the
Corporation receive compensation of $10,000 per calendar quarter (paid 1/2 in
cash and 1/2 in Common Stock of the Corporation), except for the Chairman of the
Board who receives compensation of $11,250 per calendar quarter (paid 1/2 in
cash and 1/2 in Common Stock of the Corporation). Directors who are not officers
or otherwise affiliated with the Corporation also receive $1,000 for each
committee meeting attended. In addition, the Chairman of each committee shall
receive an annual retainer of $5,000 cash to be paid in equal installments of
$1,250 per calendar quarter.
In addition, Directors who are not officers or otherwise affiliated with
the Corporation annually receive a restricted stock award of 1,000 shares on the
last day of the fiscal year. One-half of these shares vest on the first
anniversary of the grant date and one-half vest on the second anniversary of the
grant date. Vesting of the restricted stock will be accelerated on the first to
occur of either (1) an involuntary termination of the directorship and (2) the
voluntary resignation of the Director if the Director has served for one year.
Beginning January 1, 2005, the Chair of each committee will also receive
an annual retainer of $5,000 for chairing the committee, which will be paid
quarterly. For each committee meeting, each Director who is not an officer or
otherwise affiliated with Corporation will receive $1,000 in addition to the
amounts set forth above. The compensation for the Chairman of the Board of
Directors has also been increased for 2005 to be $13,750 paid quarterly.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of 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 related to the year ended December 31, 2004, all such reports were
made on a timely basis, except for one Form 4 for both Stan Sutton and Ludvik
Koci each reporting one transaction, which was not filed due to an
administrative oversight.
(THIS SPACE INTENTIONALLY LEFT BLANK)
6
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of March 28, 2005
(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:
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED (1) OF CLASS
------------------------------------------------------- -------------- --------
FMR Corp.
82 Devonshire Street
Boston, MA 02109................................... 3,680,391 (2) 11.70%
Goldman Sachs Asset Management, L.P.
32 Old Slip
New York, NY 10005................................. 2,584,479 (3) 8.29%
Pioneer Global Asset Management S.P.A.
Galleria San Carlo 6
20122 Milan, Italy.................................. 2,407,524 (4) 7.72%
Westfield Capital Management Co. LLC
One Financial Center
Boston, MA 02111.................................... 2,225,734 (5) 7.14%
Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94104............................. 1,750,356 (6) 5.62%
David C. Burdakin...................................... 8,137 *
Rodney P. Ehrlich...................................... 65,263 (7) *
Richard J. Giromini.................................... 109,351 (8) *
William P. Greubel..................................... 323,168 (9) 1.03%
John T. Hackett........................................ 23,675 (10) *
Martin C. Jischke...................................... 7,824 *
Ludvik F. Koci......................................... 15,218 (11) *
Stephanie K. Kushner................................... 1,761 *
Brent A. Larson........................................ 32,959 (12) *
Larry J. Magee......................................... 100 *
Timothy J. Monahan..................................... 11,584 (13) *
Robert J. Smith........................................ 8,350 (14) *
Scott K. Sorenson...................................... 0 *
Ronald L. Stewart...................................... 1,186 *
All Executive Officers and Directors as a group (14
persons).............................................. 608,576 1.93%
-------------------
* Less than one percent
7
(1) Beneficial ownership is determined in accordance with the rules of the SEC
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 March 28, 2005 are
deemed outstanding for purposes of computing the percentage ownership of
the person holding such options 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) Based solely on a Schedule 13G/A filed February 14, 2005 filed on behalf
of FMR Corp. Edward C. Johnson 3d and Abigail P. Johnson. Fidelity
Management & Research Company ("Fidelity"), 82 Devonshire Street, Boston,
Massachusetts 02109, a wholly-owned subsidiary of FMR Corp. and an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, is the beneficial owner of 3,187,391 shares or 10.14% of the
Common Stock outstanding of the Corporation as a result of acting as
investment adviser to various investment companies registered under
Section 8 of the Investment Company Act of 1940. The number of shares of
Common Stock of the Corporation owned by the investment companies at
December 31, 2004 included 276,041 shares of Common Stock resulting from
the assumed conversion of $5,300,000 principal amount of the Corporation's
3.25% Senior Convertible Notes due 2008.
Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and the
funds each has sole power to dispose of the 3,187,391 shares owned by the
Funds.
Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR Corp., has the
sole power to vote or direct the voting of the shares owned directly by
the Fidelity Funds, which power resides with the Funds' Boards of
Trustees. Fidelity carries out the voting of the shares under written
guidelines established by the Funds' Boards of Trustees.
Fidelity Management Trust Company, 82 Devonshire Street, Boston,
Massachusetts 02109, a wholly-owned subsidiary of FMR Corp., and a bank as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934, is the
beneficial owner of 493,000 shares or 1.57% of the Common Stock
outstanding of the Corporation as a result of its serving as investment
manager of the institutional account(s).
Edward C. Johnson 3d and FMR Corp., through its control of Fidelity
Management Trust Company, each has sole dispositive power over 493,000
shares and sole power to vote or to direct the voting of 493,000 shares of
Common Stock owned by the institutional account(s) as reported above.
Members of the Edward C. Johnson 3d family are the predominant owners of
Class B shares of common stock of FMR Corp., representing approximately
49% of the voting power of FMR Corp. Mr. Johnson 3d owns 12.0% and Abigail
Johnson owns 24.5% of the aggregate outstanding voting stock of FMR Corp.
Mr. Johnson 3d is Chairman of FMR Corp. and Abigail P. Johnson is a
Director of FMR Corp. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under
which all Class B shares will be voted in accordance with the majority
vote of Class B shares. Accordingly, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR Corp.
(3) Based solely on a Schedule 13G/A filed February 11, 2005. Goldman Sachs
Asset Management, L.P. has sole voting power with respect to 2,062,754
shares of Common Stock, or 6.62% of the Corporation's Common Stock.
(4) Based solely on a Schedule 13G filed February 10, 2005.
(5) Based solely on a Schedule 13G dated February 14, 2005. Westfield Capital
Management Co., LLC has sole voting power with respect to 1,976,809 shares
of Common Stock, or 6.34% of the Corporation's Common Stock.
(6) Based solely on a Schedule 13G/A filed January 31, 2005, filed by Wells
Fargo & Company on behalf of its subsidiaries, First Allied Securities,
Inc., Peregrine Capital Management, Inc. and Wells Capital Management
Incorporated, which are classified as registered investment advisors in
accordance with Regulation 13d-1(b)(1)(ii)(E), and Wells Fargo Bank,
National Association and Wells Fargo Funds Management, LLC, which are
classified as bank in accordance with Regulation 13d-1(b)(1)(ii)(B). Wells
Fargo & Company has sole voting power with respect to 1,346,856 shares of
Common Stock, or 4.32% of the Corporation's Common Stock,
8
and sole dispositive power with respect to 1,744,329 shares of Common
Stock, or 5.6% of the Corporation's Common Stock.
(7) Includes options to purchase 40,133 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(8) Includes options to purchase 73,299 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(9) Includes options to purchase 207,866 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(10) Includes options to purchase 10,500 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(11) Includes options to purchase 1,500 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(12) Includes options to purchase 20,334 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(13) Includes options to purchase 4,734 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
(14) Includes options to purchase 1,200 shares that are currently, or will be
within 60 days of March 28, 2005, exercisable.
EXECUTIVE OFFICERS OF THE REGISTRANT
In addition to Mr. Greubel, who is identified above under the heading
"Election of Directors", the table below sets forth the names, ages, and current
positions of each of the executive officers of the Corporation. The business
experience for each of these executive officers for at least the last five years
is described below the table.
NAME AGE POSITION
---- --- --------
Richard J. Giromini... 51 Executive Vice President - Chief Operating Officer
Rodney P. Ehrlich..... 59 Senior Vice President - Chief Technology Officer
Brent A. Larson....... 40 Senior Vice President - Sales and Marketing
Jerry R. Linzey....... 41 Senior Vice President - Manufacturing
Timothy J. Monahan.... 52 Senior Vice President - Human Resources
Robert J. Smith....... 58 Senior Vice President - Chief Financial Officer
Richard J. Giromini. Mr. Giromini was promoted to Executive Vice President
and Chief Operating Officer on February 28, 2005. He had been Senior Vice
President - Chief Operating Officer since joining the Company on July 15, 2002.
He has also served as President and a Director of Wabash National Trailer
Centers, Inc. since January 2004. Prior to joining Wabash, Mr. Giromini spent
his entire career in the automotive industry. Most recently, Mr. Giromini was
with Accuride Corporation from April 1998 to July 2002, where he served in
capacities as Senior Vice President - Technology and Continuous Improvement;
Senior Vice President and General Manager - Light Vehicle Operations; and
President and CEO of AKW LP. Previously, Mr. Giromini was employed by ITT
Automotive, Inc. from 1996 to 1998 serving as the Director of Manufacturing.
Rodney P. Ehrlich. Mr. Ehrlich has been Senior Vice President - Chief
Technology Officer of the Company since January 2004. From 2001-2003, Mr.
Ehrlich was Senior Vice President of Product Development. Mr. Ehrlich has been
in charge of the Company's engineering operations since the Company's founding.
Brent A. Larson. Mr. Larson has been Senior Vice President - Sales and
Marketing since March 2004. From December 2001 until March 2004, Mr. Larson was
our Vice President - Sales. Prior to that, Mr. Larson was Senior Vice President
and an owner of a Canadian trailer distributorship, Breadner Trailers Ltd., for
over seven years. Prior to that, Mr. Larson was Account Executive, Large
Accounts for IBM Corporation for over eight years.
9
Jerry R. Linzey. Mr. Linzey was promoted to Senior Vice President -
Manufacturing on March 1, 2005. He had been Vice President, Manufacturing since
September 2002. Mr. Linzey has been Vice President, Continuous Improvement since
joining us on June 6, 2002. Prior to that, Mr. Linzey was Director, North
American Operations, for Stanley Fastening Systems. Previously, Mr. Linzey was
employed by Delphi Automotive Systems from 1985 to 2000 in manufacturing,
engineering and quality positions of increasing responsibility.
Timothy J. Monahan. Mr. Monahan has been Senior Vice President - Human
Resources since joining the Company on October 15, 2003. Prior to that, Mr.
Monahan was with Textron Fastening Systems from 1999 to October 2003 where he
served as Vice President - Human Resources. Previously, Mr. Monahan served as
Vice President - Human Resources at Beloit Corporation. Mr. Monahan serves on
the Board of Directors of North American Tool Corporation.
Robert J. Smith. Mr. Smith was appointed Senior Vice President - Chief
Financial Officer in October 2004, after serving as our Acting Chief Financial
Officer since June 2004, and our Vice President and Controller since joining us
in March 2003. Before joining us, Mr. Smith served from 2000 to 2001 as Director
of Finance for KPMG Consulting, Inc., now BearingPoint, Inc.; from 1993 to 2000
with Great Lakes Chemical Corp. (serving from 1998 to 2000 as Vice President and
Controller) and from 1983 to 1993 with Olin Corporation, including as Chief
Financial Officer for several of its divisions.
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, 2004, 2003, and 2002 of the Chief Executive Officer and the other
five most highly compensated executive officers of the Corporation as of
December 31, 2004, (together, the "Named Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG - TERM COMPENSATION AWARDS
------------------------------ -----------------------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS AWARDS(2) OPTIONS COMPENSATION(3)
POSITION(1) YEAR ($) ($) ($) (#) ($)
-------------------------------- ---- ---------- ---------- ---------- ---------- ---------------
William P. Greubel............... 2004 $ 633,333 $ 437,760 $ 375,230 23,600 $ 42,431
President and Chief Executive 2003 $ 600,000 $ 528,300 $ 0 175,000 $ 188,558
Officer 2002 $ 393,461 $ 200,000 $ 262,500 250,000 $ 21,945
Richard J. Giromini.............. 2004 $ 383,676 $ 219,451 $ 143,400 9,900 $ 20,998
Executive Vice President- 2003 $ 330,305 $ 242,361 $ 0 70,000 $ 81,086
Chief Operating Officer 2002 $ 150,208 $ 235,264 $ 70,000 125,000 $ 13,816
Rodney P. Ehrlich................ 2004 $ 261,275 $ 134,467 $ 71,700 4,800 $ 3,508
Senior Vice President - Chief 2003 $ 251,275 $ 143,126 $ 0 20,000 $ 10,337
Technology Officer 2002 $ 251,275 $ 0 $ 0 0 $ 5,790
Brent A. Larson.................. 2004 $ 239,500 $ 133,127 $ 71,700 5,000 $ 508
Sr. Vice President - 2003 $ 226,417 $ 119,606 0 33,000 $ 17,021
Sales & Marketing 2002 $ 200,000 $ 0 $ 40,875 25,000 $ 49,882
Timothy J. Monahan............... 2004 $ 210,000 $ 113,633 $ 62,140 4,200 $ 36,923
Senior Vice President - 2003 $ 44,558 $ 75,000 $ 0 10,000 $ 1,376
Human Resources 2002 $ 0 $ 0 $ 0 0 $ 0
Robert J. Smith.................. 2004 $ 188,492 $ 115,425 $ 59,750 3,600 $ 9,794
Senior Vice President - Chief 2003 $ 134,041 $ 78,640 0 0 $ 4,333
Financial Officer 2002 $ 0 $ 0 0 0 $ 0
10
(1) Mr. Greubel became the Corporation's Chief Executive Officer on May 6,
2002. Mr. Giromini became the Corporation's Chief Operating Officer on
July 15, 2002. Mr. Larson became the Corporation's Senior Vice President -
Sales & Marketing on February 12, 2003. Mr. Monahan became the
Corporation's Senior Vice President - Human Resources on October 26, 2003.
Mr. Smith became the Senior Vice President - Chief Financial Officer on
October 20, 2004.
(2) As of December 31, 2004, based on the closing price of the Corporation's
common stock on the New York Stock Exchange on that date of $26.93 per
share, Mr. Greubel held 60,192 shares of restricted stock with an
aggregate value of $1,620,970.56; Mr. Giromini held 19,592 shares of
restricted stock with an aggregate value of $527,612.56; Mr. Ehrlich held
3,000 shares of restricted stock with an aggregate value of $80,790; Mr.
Larson held 7,875 shares of restricted stock with an aggregate value of
$212,073.75; Mr. Monahan held 2,600 shares of restricted common stock with
an aggregate value of $70,018; and Mr. Smith held 2,500 shares of
restricted common stock with an aggregate value of $67,325.
(3) "All Other Compensation" consists of (i) contributions to the
Corporation's 401(k) Plan, which, in 2004, consisted of $2,000 in respect
of Mr. Greubel, $1,077 in respect of Mr. Ehrlich, $1,230 in respect of Mr.
Giromini, $5,250 in respect of Mr. Monahan, and $8,200 in respect of Mr.
Smith; (ii) payments by the Corporation with respect to term life
insurance for the benefit of the respective officer, which, in 2004,
consisted of $1,518 in respect of each of Messrs. Greubel and Giromini,
$2,430 in respect of Mr. Ehrlich, $982.77 in respect of Mr. Monahan,
$1,594 in respect of Mr. Smith, and $508 in respect of Mr. Larson; (iii)
payments by the Corporation with respect to the Executive Life Insurance
Plan (which provides employees with a bonus to pay for a universal life
insurance policy that is fully owned by the employee), which, in 2004,
consisted of $38,913 in respect of Mr. Greubel and $18,250 in respect of
Mr. Giromini; and (iv) reimbursement of relocation expenses, which, in
2004, consisted of $30,690 in respect of Mr. Monahan.
OPTION GRANTS
Shown below is information on grants of stock options during the year
ended December 31, 2004, to the Named Officers pursuant to the Corporation's
Amended 1992 Stock Option and Incentive Plan, 2000 Stock Option and Incentive
Plan, 2004 Stock Incentive Plan and inducement options granted outside of any
corporate plan.
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
POTENTIAL REALIZABLE
PERCENTAGE OF VALUE
NUMBER OF TOTAL OPTIONS AT ASSUMED ANNUAL RATE OF
SECURITIES GRANTED STOCK PRICE APPRECIATION
UNDERLYING TO EXERCISE OR FOR OPTION TERM(2)
OPTIONS EMPLOYEES BASE PRICE EXPIRATION -----------------------------
NAME GRANTED IN 2003 (PER SHARE)(1) DATE 5% ($) 10% ($)
------------------- ---------- ------------- -------------- ---------- ------------- -----------
William P. Greubel 23,600 12.36% $ 23.90 5/20/2014 $ 354,722 $ 898,934
Richard J. Giromini 9,900 5.19% $ 23.90 5/20/2014 $ 148,803 $ 377,095
Rodney P. Ehrlich 4,800 2.51% $ 23.90 5/20/2014 $ 72,147 $ 182,834
Brent A. Larson 5,000 2.62% $ 23.90 5/20/2014 $ 75,153 $ 190,452
Timothy J. Monahan 4,200 2.20% $ 23.90 5/20/2014 $ 63,128 $ 159,980
Robert J. Smith 3,600 1.89% $ 23.90 5/20/2014 $ 54,110 $ 137,126
-------------------
(1) Options were granted having exercise prices at fair market values on the
date of grant.
(2) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of stock price appreciation from the
date of grant to 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.
(3) Options granted vest with respect to 1/3 of the options on the first
anniversary from the date of grant, 1/3 of the options on the second
anniversary from the date of grant and 1/3 of the options on the third
anniversary from the date of grant.
11
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
Shown below is information with respect to the exercise of options by the
Named Officers to purchase the Company's Common Stock during the fiscal
year-ended December 31, 2004 and unexercised options to purchase the Company's
Common Stock pursuant to the Company's Amended 1992 Stock Option and Incentive
Plan, 2000 Stock Option and Incentive Plan, 2004 Stock Incentive Plan and
inducement options granted outside of any corporate plan held by the Named
Officers.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES HELD AT DECEMBER 31, 2004 AT DECEMBER 31, 2004(1)
ACQUIRED --------------------------- ---------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------- ----------- -------------- ----------- ------------- ----------- -------------
William P. Greubel 130,000 $ 2,361,334 36,667 281,933 $ 620,406 $ 4,614,002
Richard J. Giromini 0 $ 0 83,333 121,567 $ 1,523,327 $ 2,044,670
Rodney P. Ehrlich 16,000 $ 126,040 25,200 24,800 $ 48,846 $ 372,544
Brent A. Larson 0 $ 0 16,667 46,333 $ 282,172 $ 746,928
Timothy J. Monahan 0 $ 0 3,334 10,866 $ 22,605 $ 57,921
Robert J. Smith 0 $ 0 0 8,600 $ 0 $ 22,308
(1) Based on the closing price on the New York Stock Exchange-Composite
Transactions of the Corporation's Common Stock on December 31, 2004
($26.93 per share).
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 2004, decisions on cash compensation and equity compensation,
including stock options and restricted stock grants, for 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 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.
The Corporation's executive compensation policies toward its executive
officers 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 the executive officers of the
Corporation is comprised of three principal components: base salary, annual
incentive compensation and long-term compensation tied to the Corporation's
Common Stock.
Base Salary. Each year the Compensation Committee determines the base
salaries of each of the executive officers and that of the Chief Executive
Officer based on available competitive compensation data, 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
primarily upon whether, and the extent to which, the Corporation achieved
certain pre-established working capital, profit targets, and personal
performance objectives. Under the Bonus Plan, the Corporation has established
for each participant a percentage of his annual base salary that is to be the
target payout. The Compensation Committee reviews the target amount and the
performance metrics each year and changes are made when deemed necessary.
Generally, if the Corporation achieves its specific performance metrics
objectives, each Bonus Plan participant will receive a bonus for the year that
is equal to the plan targets. If the Corporation's performance exceeds target
performance, payouts can exceed target payout levels. Target payouts range from
15% to 60% of base salary. After the bonus payouts are computed for each Bonus
Plan participant, they are subject to review and approval by the Compensation
Committee. Bonuses are paid to participants in the calendar year following the
year in which bonuses are accrued by the participants.
12
In addition, certain Executives may receive bonus amounts pursuant to an
executive employment agreement. Bonuses for 2002, 2003 and 2004 for each of the
Named Officers appear under the caption "Bonus" in the Summary Compensation
Table in the proxy statement in which this report is included.
Long Term Compensation through Stock Option, Restricted Common Stock and
Stock Appreciation Rights. Under the Corporation's 2000 Stock Option and
Incentive Plan and 2004 Stock Incentive Plan, options may be granted to
officers, Directors and other key employees of the Corporation and its
subsidiaries to purchase shares of Common Stock at a price not less than market
price at the date of grant. Options granted under the 2000 Stock Option and
Incentive Plan and 2004 Stock Incentive Plan typically become exercisable in
annual installments of three years and options granted under the Corporation's
Amended 1992 Stock Option Plan, under which grants may no longer be made,
typically become exercisable in annual installments of five years. Option grants
to non-employee Directors of the Corporation, however, are fully vested on the
date of grant and are exercisable six months thereafter. All options granted
expire ten years after the date of grant.
The 2000 Stock Option and Incentive Plan and 2004 Stock Incentive Plan
provide for the award of restricted Common Stock to Directors and officers of
the Corporation and key employees of the Corporation and its subsidiaries. In
2004, the Compensation Committee began to reduce the portion of equity awards
granted to equity officers as options and increased the use of restricted stock.
The forfeiture restrictions applicable to restricted stock grants generally
lapse ratably on the third, fourth and fifth anniversaries of the grant date.
In 2001, the Corporation adopted a Stock Appreciation Rights Plan, under
which stock appreciation rights may be granted to officers and key employees of
the Corporation and its subsidiaries. The Corporation has not made any grants in
2004 under the Stock Appreciation Rights Plan.
Severance Agreements. The Corporation has adopted a policy of providing
severance arrangements for senior management employees, including the Named
Officers, pursuant to which in the event of any such employee's termination
"without cause" or by the employee in certain circumstances "for good reason"
(as defined therein) the Corporation will pay such employee from one to three
years of salary dependent upon the individual grade level and employment
agreement. Further detail on severance arrangements is contained in the
description of the employment agreements described elsewhere in the proxy
statement in which this report is included.
Chief Executive Officer's 2004 Compensation. The Chief Executive Officer
of the Corporation generally participates in the same executive compensation
plans and arrangements available to the other senior executives. Accordingly,
the compensation of the Chief Executive Officer consists of annual base salary,
annual bonus and grants of options and restricted stock. The Compensation
Committee's general approach in setting compensation of the Chief Executive
Officer is to be competitive with other companies in the industry, but to have a
large portion of compensation based upon the Corporation's performance.
Mr. Greubel's compensation is based on a negotiated employment agreement
entered into in April 2002 between Mr. Greubel and the Corporation's Board of
Directors and it provided for a salary of $600,000 per year, which has now been
increased to a base salary of $680,000, and a bonus that is targeted at 50% of
his base salary but may range from 0% to 100% of his base salary. This agreement
is described in further detail elsewhere in the proxy statement in which this
report is included. In negotiating Mr. Greubel's compensation, the Board of
Directors considered the criteria contained in this report, his qualifications
and experience, his previous compensation levels, foregone awards and other
compensation at his prior employer, and the competitive marketplace for
executive talent. In addition, they considered that a substantial initial equity
award in the form of an option was warranted and necessary in order to attract
an executive such as Mr. Greubel, and to provide him a strong incentive to
increase shareholder value. As a result of the achievement of corporate
objectives in 2004 and his individual performance, the Corporation raised his
base salary to $680,000 effective March 1, 2005, awarded Mr. Greubel a bonus of
$437,760 (60% of his base salary) for his performance and granted him an
additional option to purchase 25,360 shares of the Corporation's Common Stock
along with 25,110 restricted stock units. The size of Mr. Greubel's 2004 bonus
reflects the Corporation's success in achieving and significantly exceeding
certain annual performance objectives related to working capital, profit and
specific strategic objectives, as well as reflects his individual performance
and leadership. In keeping with the philosophy of granting equity awards for the
purpose of encouraging executive officers to focus on long-term shareholder
returns and for the purpose of encouraging the retention of key executives, the
forfeiture restrictions on the restricted stock granted in 2004 begin to lapse
after three years and do not fully lapsed until the fifth anniversary of the
date of grant.
13
Section 162(m). Under Section 162(m) of the Code, and applicable Treasury
regulations, no tax deduction is allowed for annual compensation in excess of $1
million paid to the five most highly compensated executive officers.
Performance-based compensation that has been approved by stockholders, however,
is excluded from the $1 million limit if, among other requirements, the
compensation is payable only upon attainment of pre-established, objective
performance goals and the board committee that establishes such goals consists
only of "outside directors" as defined for purposes of Section 162(m). For 2004,
all of the members of the Compensation Committee qualified as "outside
directors." The Compensation Committee considers the impact of Section 162(m)
when making its compensation decisions, however, the Compensation Committee's
primary focus is on the most appropriate methods and approaches for the design
and delivery of compensation to executive officers of the Corporation. The 2004
Stock Incentive Plan is structured to qualify as "performance-based" and to
satisfy the stockholder approval and outside director administration
requirements of Section 162(m). Accordingly, compensation awarded by the
Compensation Committee to any of the five most highly compensated executive
officers under the 2004 Stock Incentive Plan would be deductible under Section
162(m).
Submitted by the
Members of the Compensation Committee
John T. Hackett
David C. Burdakin
Martin C. Jischke
Ludvik F. Koci
Stephanie K. Kushner
EMPLOYMENT AND SEVERANCE AGREEMENTS
In April 2002, the Corporation entered into an employment agreement with
Mr. Greubel to serve as President and Chief Executive Officer of the Corporation
effective April 12, 2002 through March 31, 2005. The term of Mr. Greubel's
employment automatically renews for successive one-year periods unless and until
either party provides written notice, not less than 60 days prior to the end of
the then current term, of their intent not to renew the agreement. The agreement
requires the Corporation to use its commercially reasonable efforts while Mr.
Greubel is serving as the Chief Executive Officer to cause him to be nominated
for election to the Board of Directors. Pursuant to this agreement, Mr.
Greubel's initial base salary was set at $600,000 per year, subject to annual
adjustment in connection with annual performance reviews and discussions between
Mr. Greubel and the Corporation. Mr. Greubel is also eligible for an annual
bonus targeted at 50% of his base salary and which may range from 0% to 100% of
that year's base salary. This agreement provided that his bonus for 2002 would
be at least $200,000. Pursuant to the terms of the agreement, the Board of
Directors granted Mr. Greubel an option to purchase 250,000 shares of our Common
Stock at an exercise price of $10.01 per share. One-third of these options
vested on the first anniversary of Mr. Greubel's employment and on each of the
next two anniversaries thereafter, an additional one-third of these options will
vest.
In the event that the Corporation terminates Mr. Greubel's employment
without cause, or it is terminated by Mr. Greubel as a result of a material
diminishment of his position, duties or responsibilities, the assignment by the
Corporation to Mr. Greubel of substantial additional duties or responsibilities
which are inconsistent with the duties or responsibilities then being carried
out by him and which are not duties of an executive nature, a material breach of
this agreement by the Corporation, which is not corrected within twenty (20)
business days of the receipt of a written notice specifying the breach, material
fraud on the part of the Corporation, or the discontinuance of the active
operation of business of the Corporation or its insolvency or bankruptcy, the
Corporation will pay to him the sum of three times his then current base salary
if the termination is prior to or on March 31, 2003 and two times his salary if
after March 31, 2003. In addition, all unvested options then held by Mr. Greubel
shall become vested. If the Corporation terminates Mr. Greubel's employment
without cause, upon the attainment of corporate objectives, he is entitled to
receive a pro-rata portion of his bonus for the year in which he is terminated.
Mr. Greubel has agreed not to compete with the Corporation during the term of
his agreement and for a period of two years after termination for any reason.
14
In June 2002, the Corporation also entered into an employment agreement
with Mr. Giromini to serve as Chief Operating Officer of the Corporation
effective July 15, 2002 through July 15, 2003. The term of Mr. Giromini's
employment automatically renews for successive one-year periods unless and until
either party provides written notice, not less than 60 days prior to the end of
the then current term, of their intent not to renew the agreement. Pursuant to
this agreement, Mr. Giromini's initial base salary was set at $325,000 per year,
subject to annual adjustment in connection with annual performance reviews and
discussions between Mr. Giromini and the Corporation. Mr. Giromini is also
eligible for an annual bonus targeted at 50% of his base salary and which may
range from 0% to 100% of that year's base salary. This agreement provided that
his bonus for 2002 would be at least $150,000. Pursuant to the terms of the
agreement, the Board of Directors granted Mr. Giromini an option to purchase
125,000 shares of the Corporation's Common Stock at an exercise price of $8.65
per share. Two-thirds of these options will vest on the second anniversary of
Mr. Giromini's employment and on the next anniversary thereafter, the remaining
one-third of these options will vest.
In the event that the Corporation terminates Mr. Giromini's employment
without cause, or it is terminated by Mr. Giromini as a result of a material
diminishment of his position, duties or responsibilities, the assignment by the
Corporation to Mr. Giromini of substantial additional duties or responsibilities
which are inconsistent with the duties or responsibilities then being carried
out by him and which are not duties of an executive nature, a material breach of
this agreement by the Corporation, which is not corrected within twenty (20)
business days of the receipt of a written notice specifying the breach, material
fraud on the part of the Corporation, or the discontinuance of the active
operation of business of the Corporation or its insolvency or bankruptcy, the
Corporation will pay to him the sum of two times his then current base salary.
In addition, all unvested options then held by Mr. Giromini shall become vested.
If the Corporation terminates Mr. Giromini's employment without cause, upon the
attainment of corporate objectives, he is entitled to receive a pro-rata portion
of his bonus for the year in which he is terminated. Mr. Giromini has agreed not
to compete with the Corporation during the term of his agreement and for a
period of two years after termination for any reason.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors in 2004 consisted of
Messrs. Hackett, Koci, Burdakin, Jischke and Ms. Kushner. None of these
individuals is currently, or was during 2004, an officer or employee of the
Corporation. In addition, none of these individuals serves as a member of the
Board of Directors or on the Compensation Committee of any Corporation that has
an executive officer serving on the Board of Directors of the Corporation or its
Compensation Committee.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors in fiscal 2004 consisted of
Messrs. Hackett, Jischke, Burdakin, and Ms. Kushner. Mr. Koci was a member of
the Audit Committee through May of 2004. The Committee's responsibilities are
described in a written charter adopted by the Board of Directors which was
amended in February 2003. The charter was included as Appendix A to the proxy
statement for the Corporation's 2003 annual meeting and is available on our
website at www.wabashnational.com or by writing to us at Wabash National
Corporation, Attention: Corporate Secretary, P.O. Box 6129, Lafayette, Indiana
47903.
As part of its ongoing activities, which are described in the proxy
statement for the Corporation's 2005 Annual Meeting under the heading "Board
Committees -- Audit Committee," the Audit Committee has:
- Reviewed and discussed with management the Corporation's audited
consolidated financial statements for the fiscal year ended December
31, 2004;
- Discussed with Ernst & Young, the Corporation's independent auditors
for fiscal 2004, the matters required to be discussed by Statement
on Auditing Standards No. 61, Communication with Audit Committees,
as currently in effect;
- Received the written disclosures and the letter from the independent
auditors required by Independence Standards Board Statement No. 1,
Independence Discussions with Audit Committees, as currently in
effect, and has discussed with the independent auditors their
independence; and,
- Considered the compatibility of the non-audit services provided by
the auditors (which are described in the Corporation's proxy
statement for its 2005 Annual Meeting under the heading "Independent
Registered Public Accounting Firm") with the auditors' independence.
15
Independent Auditor Fees. As part of its ongoing activities, the Audit
Committee has approved the fees and services set forth in the Corporation's
proxy statement for its 2005 Annual Meeting under the heading "Independent
Registered Public Accounting Firm".
The Audit Committee's job is one of oversight. The members of the Audit
Committee are not experts in the fields of accounting or auditing, including
auditor independence. It is not the duty of the Audit Committee to prepare the
Corporation's financial statements, to plan or conduct audits or to determine
that the Corporation's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. The Corporation's
management is responsible for preparing the Corporation's financial statements
and for maintaining the system of internal controls. The independent auditors
are responsible for auditing the financial statements and for expressing an
opinion as to the conformity of the audited financial statements with generally
accepted accounting principles.
On the basis of these reviews and discussions, the Audit Committee
recommended that the Corporation's audited consolidated financial statements be
included in the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 2004, for filing with the SEC.
All Audit Committee members have approved this report.
John T. Hackett
David C. Burdakin
Martin C. Jischke
Stephanie K. Kushner
16
STOCKHOLDER 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. It covers the period commencing December
31, 1999 and ending December 31, 2004. The graph assumes that the value for the
investment in the Common Stock of the Corporation and in each index was $100 on
December 31, 1997 and that all dividends were reinvested. This graph is not
deemed to be "soliciting 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 STOCKHOLDERS
DECEMBER 31, 1999 THROUGH DECEMBER 31, 2004
AMONG WABASH NATIONAL CORPORATION, THE S&P 500 INDEX
AND THE DOW JONES TRANSPORTATION INDEX
[LINE GRAPH]
WABASH S&P 500 DJ TRANS
------ ------- --------
1999 100.00 100.00 100.00
2000 58.57 90.90 100.40
2001 53.85 80.09 91.06
2002 57.83 62.39 80.61
2003 202.21 80.29 106.28
2004 185.86 89.02 135.75
17
RELATED PARTY TRANSACTIONS
In July 2001, the Corporation entered into a three-year consulting and
non-compete agreement with Donald J. Ehrlich, former President and Chief
Executive Officer of the Corporation. At the time the agreement was executed,
Mr. Ehrlich was a Director of the Corporation. The agreement provides for Mr.
Ehrlich to provide certain consulting services to the Corporation and precludes
Mr. Ehrlich from engaging in defined activities that are deemed competitive to
the interests of the Corporation. The agreement provides for payments to Mr.
Ehrlich for consulting services rendered to the Corporation of $50,000 per month
during the first year of the agreement term, $41,667 per month during the second
year of the agreement term, and $33,333 per month during the third year of the
agreement term. Mr. Ehrlich is the brother of Rodney P. Ehrlich, an executive
officer of the Corporation.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information regarding the Corporation's equity
compensation plans as of December 31, 2004.
Number of securities
remaining available for
Number of securities to Weighted average future issuance under
be issued upon exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (A))
--------------------------------- ------------------------- -------------------- -------------------------
(A) (B) (C)
------------------------- -------------------- -------------------------
Equity Compensation plans
approved by security holders..... 446,485(1) $ 22.73 848,830 (3)
Equity Compensation plans not
approved by security holders..... 913,050(2) $ 8.70 100,000
Total............................ 1,359,535 $ 13.31 948,830
(1) Consists of shares of Common Stock to be issued upon exercise of
outstanding options granted under the Wabash National Corporation Amended
1992 Stock Option Plan, shares of Common Stock to be issued upon exercise
of outstanding options granted under the Wabash National Corporation 1992
Directors Stock Option Plan, shares of Common Stock to be issued under the
Wabash National Corporation Directors and Executives Deferred Compensation
Plan, and shares of Common Stock to be issued upon exercise of outstanding
options granted under the Wabash National Corporation 2004 Stock Incentive
Plan. The number of shares that may be granted under the Wabash National
Corporation Directors and Executives Deferred Compensation Plan is based
on compensation deferral by Directors and executives.
(2) Consists of shares of Common Stock to be issued upon exercise of
outstanding options granted under the Wabash National Corporation 2000
Stock Option and Incentive Plan, shares of Common Stock to be issued under
the Wabash National Corporation Stock Bonus Plan, shares of Common Stock
to be issued under the Wabash National Corporation Employee Stock Purchase
Plan and inducement options that were granted outside of any formal
corporate plan.
(3) Consists of shares of Common Stock available for future issuance pursuant
to the Corporation's 2004 Stock Incentive Plan.
2000 STOCK OPTION AND INCENTIVE PLAN
The Corporation's Board of Directors adopted the 2000 Stock Option and
Incentive Plan effective November 2000. This plan provides for the grant of
non-qualified stock options and restricted stock in order to attract, retain and
compensate Directors, highly qualified officers, key employees and other
persons. There were 2,000,000 shares of stock originally authorized for issuance
under the plan. The exercise price for each option granted is set by the
Compensation Committee, but is required to be at least the aggregate fair market
value of the shares subject to the option. The Compensation Committee sets the
vesting schedule for each option granted and sets the restricted period for each
grant of restricted stock. Upon a change in control of the Corporation, all
outstanding shares subject to options vest and all restrictions and conditions
applicable to shares subject to restricted stock lapse. The term of the plan is
10 years, unless earlier terminated by the Board of Directors. As a result of
the approval of
18
the 2004 Stock Incentive Plan at the Corporation's 2004 Annual Meeting, the
number of shares available for grant under the 2000 Stock Option and Incentive
Plan was reduced to 100,000 shares.
EMPLOYEE STOCK PURCHASE PLAN
The Corporation's Board of Directors adopted the Employee Stock Purchase
Plan effective June 1993. This plan provides for the purchase of the
Corporation's Common Stock by certain employees in order to increase the
employee's interest in the Corporation's growth and success and to retain the
employee's services. The employee purchases the stock by electing to have
deducted from his or her payroll a whole percentage amount of at least two
percent and no more than 15 percent of the employee's daily compensation. There
were 200,000 shares of Common Stock originally authorized for issuance under the
Employee Stock Purchase Plan. The purchase price for each share of Common Stock
is the fair market value of the Common Stock on the last day of the applicable
period. The Board of Directors may terminate this plan at any time.
STOCK BONUS PLAN
The Corporation's Board of Directors adopted the Stock Bonus Plan
effective January 1, 1997. This plan provides that stock may be awarded as
supplementary compensation as an incentive and reward to eligible long service
employees who, through industry, ability and exceptional service, contribute
materially to the success of the Corporation. There were 500,000 shares of stock
originally authorized for issuance under the Stock Bonus Plan. The Board of
Directors has the authority to determine, in its sole discretion, the amount of
individual stock bonus awards. This plan may be amended, suspended or terminated
by the Board of Directors at any time.
INDUCEMENT GRANTS
The Corporation has issued non-qualified stock options outside of any plan
in connection with inducing certain individuals to start work for the
Corporation. In the aggregate, the Corporation has issued options to purchase
385,000 shares of Common Stock to three individuals. The exercise price for each
option granted was set by the Compensation Committee at the fair market value of
the shares subject to that option. The Compensation Committee set vesting
schedules that vest over three years. Upon a change in control of the
Corporation, all outstanding shares subject to options vest. The term of each
option is 10 years.
GENERAL MATTERS
VOTING PROCEDURES AND REQUIREMENTS
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. If you hold shares in "street name" (that
is, through a bank, broker or other nominee) and would like to attend the Annual
Meeting and vote in person, you will need to bring an account statement or other
acceptable evidence of ownership of Common Stock as of the close of business on
April 1, 2005, the record date for voting. Alternatively, in order to vote, you
may contact the person in whose name your shares are registered and obtain a
proxy from that person and bring it to the Annual Meeting.
ELECTION OF DIRECTORS. The election of Directors requires a plurality of
the votes cast for the election of Directors; accordingly, the directorship to
be filled at the Annual Meeting will be filled by the nominees receiving the
highest number of votes. In the election of Directors, the votes may be cast in
favor of or withheld with respect to any or all nominees; votes that are
withheld will be excluded entirely from the vote and will have no effect on the
outcome of the vote.
BROKER AUTHORITY TO VOTE. Under the rules of the National Association of
Securities Dealers, Inc., member brokers generally may not vote shares held by
them in street name for customers unless they are permitted to do so under the
rules of any national securities exchange of which they are a member. Under the
rules of the New York Stock Exchange, Inc., a member broker who holds shares in
street name for customers has the authority to vote on certain items if it has
transmitted proxy soliciting materials to the beneficial owner but has not
received instructions from that owner. NYSE rules permit member brokers who do
not receive instructions to vote on the election of Directors.
19
QUORUM. 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. Abstentions and broker non-votes are counted as present in determining
whether the quorum requirement is satisfied.
AVAILABILITY OF CERTAIN DOCUMENTS
A copy of our 2004 Annual Report on Form 10-K, is enclosed. You also may
obtain additional copies without charge and without the exhibits by writing to:
Wabash National Corporation, P.O. Box 6129, Lafayette, Indiana 47903, Attn:
Corporate Secretary. These documents also are available through our website at
www.wabashnational.com.
The charters for our Audit, Compensation and Nomination and Corporate
Governance Committees, as well as our Corporate Governance Guidelines and our
Code of Business Conduct and Ethics, are available on the About Us page of our
website at www.wabashnational.com and are available in print without charge by
writing to: Wabash National Corporation, P.O. Box 6129, Lafayette, Indiana
47903, Attn: Corporate Secretary.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The accounting firm of Ernst & Young, LLP has acted as the Corporation's
independent auditors for the year ended December 31, 2004. Representatives of
Ernst & Young 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.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The fees billed by Ernst & Young LLP to the Corporation for professional
services for the years ended December 31, 2004 and December 31, 2003 were as
follows:
FEE CATEGORY 2004 2003
------------------ --------- ---------
(DOLLARS IN THOUSANDS)
Audit Fees $ 1,390 $ 858
Audit-Related Fees 97 805
Tax Fees 136 273
All Other Fees 0 17
--------- ---------
Total Fees $ 1,623 $ 1,953
Audit Fees. Consist of fees billed for professional services rendered for
the audit of the Corporation's consolidated financial statements, review of the
interim consolidated financial statements included in quarterly reports and
services provided by Ernst & Young in connection with the Corporation's
securities offerings and its registration statements.
Audit-Related Fees. Consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Corporation's consolidated financial statements and are not reported
under "Audit Fees." In 2003 and 2004, these services include audits of benefit
plans, audits, accounting consultation, consulting on internal controls and
other audit-related services.
Tax Fees. Consist of fees billed for professional services for tax
compliance, tax advice and tax planning. In 2003 and 2004, these services
include assistance related to state tax filing and incentives reviews of
corporation tax filings, consulting or net operating loss treatments, and review
of tax audits.
All Other Fees. In 2003, these services include assistance related to
expatriate tax liability for a single non-executive officer.
In 2004, all Ernst & Young fees were pre-approved by the Audit Committee
pursuant to the policy described below or related to contracts existing on May
6, 2003.
20
The Audit Committee has not yet selected the Corporation's auditors for
the year ending December 31, 2005. As part of the Corporation's ongoing process
of evaluating services and costs, the Audit Committee is evaluating its options.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT SERVICES AND PERMISSIBLE
NON-AUDIT SERVICES OF INDEPENDENT AUDITORS
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services performed by the independent public accountants. These
services may include audit services, audit related services, tax services and
other services. For audit services, the independent auditor provides an
engagement letter in advance of the meeting of the Audit Committee that occurs
in connection with the Corporation's Annual Meeting, outlining the scope of the
audit and related audit fees. If agreed to by the Audit Committee, this
engagement letter is formally accepted by the Audit Committee at the meeting.
For all services, the Corporation's senior management submits from time to
time to the Audit Committee for approval services that it recommends the Audit
Committee engage the independent auditor to provide for the fiscal year. In
addition, the Audit Committee pre-approves all non-audit services that the
independent auditor can provide from time-to-time during the year. All fee
proposals for those non-audit services must be approved in advance in writing by
the requesting department head and by the Corporate Controller. Any fee proposal
greater than $25,000 must also be approved in advance in writing by the Chief
Financial Officer. Any fee proposal greater than $100,000 must also be approved
in advance in writing by the Chairman of the Audit Committee. The Audit
Committee will be informed routinely as to the non-audit services actually
provided by the independent auditor pursuant to this pre-approval process.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2006 Annual Meeting
of the Corporation (other than proposals submitted under Securities Exchange Act
Rule 14a-8) must be received at the Corporation's principal executive offices no
later than February 10, 2006 and no earlier than January 11, 2006. Stockholder
proposals intended to be presented under Rule 14a-8 must be received at the
Corporation's principal executive offices no later than December 12, 2005.
OTHER MATTERS
Management knows of no matters to be presented for action at the meeting
other than the matters 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/ CYNTHIA J. KRETZ
-------------------------------
CYNTHIA J. KRETZ
Secretary
April 11, 2005
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[WABASH NATIONAL LOGO]
c/o National City Bank
Corporate Trust Operations
Locator 5352
P. O. Box 92301
Cleveland, OH 44101-4301
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of
Stockholders, you can be sure your shares are represented at the meeting
by promptly returning your proxy in the enclosed envelope.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
[WABASH NATIONAL LOGO]
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 12, 2005
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
Dated:________________________ , 2005
_____________________________________
Signature(s)
___________________________________
Please sign exactly as name appears
in address. When signing as attorney,
executor, administrator, trustee, or
guardian, please give your title as
such. If joint account, please provide
both signatures.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
WABASH NATIONAL CORPORATION PROXY
The undersigned hereby appoints John T. Hackett and Martin C. Jischke, or each
of them, as the proxies of the undersigned, to vote all shares of Common Stock
of Wabash National Corporation that the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held May 12, 2005, or any
adjournment thereof, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL LISTED PROPOSALS.
Proposal 1. Election of eight Directors by all Stockholders
Nominees: David C. Burdakin William P. Greubel John T. Hackett Martin C. Jischke
Stephanie K. Kushner Larry J. Magee Scott K. Sorensen Ronald L. Stewart
[ ] FOR ALL
[ ] WITHHOLD ALL
[ ] FOR ALL (Except Nominee(s) listed below)
2. The proxies are authorized to vote in their discretion on any other
matters which may properly come before the Annual Meeting.
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY FORM PROMPTLY USING
THE ENCLOSED ENVELOPE
(Continued and to be signed on reverse side.)