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)).
[X] Definitive proxy statement.
[ ] 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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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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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.
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[ ] 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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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WABASH NATIONAL CORPORATION
1000 SAGAMORE PARKWAY SOUTH
LAFAYETTE, INDIANA 47905
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2002 Annual Meeting of Stockholders of Wabash National Corporation will
be held at the Cumberland Place Exhibition Center, 1780 Cumberland Avenue, West
Lafayette, Indiana, 47906 on Thursday, May 30, 2002, at 10:00 a.m. for the
following purposes:
1. To elect six 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 26, 2002
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS--MAY 30, 2002
This Proxy Statement is furnished on or about April 26, 2002, 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 Cumberland Place Exhibition Center,
1780 Cumberland Avenue, West Lafayette, Indiana, 47906 on Thursday, May 30,
2002, at 10:00 a.m. 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 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 facsimile by officers and other management employees of
the Corporation, who will receive no additional compensation for their services.
At the close of business on April 17, 2002, there were 23,093,164
shares of the common stock and 1,194,938 shares of common stock underlying
preferred stock of the Corporation outstanding and entitled to vote at the
meeting. Only stockholders of record on April 17, 2002, will be entitled to vote
at the meeting, and each share will have one vote.
ELECTION OF DIRECTORS
Six 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 six 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.
The name, age, business experience, current committee memberships, and
directorships of each nominee for director are as follows:
David C. Burdakin..............Member--Audit, Compensation, and Nominating
Committees
Age 47
Director of the Corporation since February, 2002.
Mr. Burdakin is President of HON Company, a
manufacturer of business furniture systems, since
August, 1999 and Executive Vice President of HON
Industries, a diversified manufacturer, since
February, 2001. Previously, Mr. Burdakin held a
variety of positions of increasing responsibility
with HON since joining the company in 1993.
William P. Greubel.............Age 50
Mr. Greubel has accepted the positions of
President and Chief Executive Officer of the
Company and will begin his employment in those
capacities in May, 2002. He has also been
nominated by the Board of Directors of the
Company to join the Board in May, 2002,
concurrent with the start of his employment with
the Company, and will serve on the Executive and
Nominating Committees of the Board. Mr. Greubel
was a Director and Chief Executive Officer of
Accuride Corporation, a manufacturer of wheels
for trucks and trailers, since 1998 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.
1
John T. Hackett................Member--Audit, Compensation, Nominating, and
Executive Committees
Age 69
Director of the Corporation since November 1991
and Chairman of the Board of Directors 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 Company from 1964 to 1988. Mr.
Hackett is also a director of Irwin Financial
Corporation and Ball Corporation.
E. Hunter Harrison.............Member--Compensation and Nominating Committees
Age 57
Director of the Corporation since October, 1993.
Mr. Harrison is Executive Vice President and
Chief Operating Officer of Canadian National
Railway, Co. since March 1998. He previously
served as President and Chief Executive Officer
of Illinois Central Railroad since February 1993
and as Senior Vice President of Operations since
July 1992. 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.
Dr. Martin C. Jischke..........Member--Audit, Compensation, and Nominating
Committees
Age 60
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 1991-2000, chancellor of
the University of Missouri-Rolla from 1986-1991,
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.
Ludvik F. Koci.................Member--Audit and Compensation Committees
Age 64
Director of the Corporation since December 1993.
Mr. Koci is Vice Chairman and Chief Executive
Officer of Detroit Diesel Corporation in Detroit,
Michigan since 1997. He previously served as
President and Chief Operating Officer since
December 1989. Mr. Koci also serves on the Board
of Directors of Detroit Diesel Corporation and
the Boards of Directors of Focus Hope and Barron
Cast 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 Compensation Committee, an
Executive Committee, an Audit Committee, and a Nominating Committee.
In 2001, the Board of Directors created a Nominating Committee, which
is responsible for making periodic recommendations to the Board of Directors
with respect to nominees for election to the Board of Directors. This committee
did not meet during 2001.
The Compensation Committee is responsible for determining the
Corporation's compensation policies for executive officers and for administering
the Corporation's 1992 and 2000 Stock Option Plans and the 2001 Stock
Appreciation Rights Plan, pursuant to the provisions of the Plans. This
Committee met three times during 2001.
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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 2001.
The Audit Committee is responsible for:
- reviewing the independence of the independent auditors and making
recommendations to the Board of Directors regarding engaging and discharging
independent auditors;
- reviewing with the independent auditors the plan and results of auditing
engagements;
- reviewing significant non-audit services provided by the independent auditors
and the range of audit and non-audit fees;
- reviewing the scope and results of the Company's internal audit procedures and
the adequacy of the system of internal controls;
- overseeing special investigations;
- reviewing the Company's financial statements and reports filed with the SEC;
- overseeing the Company'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;
- overseeing the Company's internal reporting system regarding compliance by the
Company with Federal, state and local laws; and,
- reviewing significant accounting policies of the Company.
This Committee met seven times during 2001.
ATTENDANCE AT MEETINGS
During 2001, the Board of Directors of the Corporation held seven
meetings. All directors of the Corporation attended 75% or more of all Board
meetings and meetings of committees on which they served in that year.
DIRECTORS' FEES
Directors who are not officers or otherwise affiliated with the
Corporation receive total compensation of $10,000 per calendar quarter (paid 1/3
in cash and 2/3 in common stock of the Corporation) and $1,000 for each
Committee meeting attended. During 2001, directors who were not officers of the
Corporation each received 1,500 stock options. Options granted had an exercise
price of $12.950 per share, which was the fair market value at the time of
grant. Options granted to Directors who are not officers are exercisable
beginning six months after the date of grant.
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, 2001, all such reports were
made on a timely basis, except that due to clerical oversights by the
Corporation (i) Bryan K. Langford, Brent Larson, Arthur R. Brown and Christopher
A. Black each did not timely report option or SAR holdings on Form 3, (ii) Bryan
K. Langford, Brent Larson, Nick Fletcher, Arthur R. Brown, Christopher A. Black
and Angela K. Knowlton each did not timely file Form 3, (iii) Brent Larson did
not timely file Form 5, (iv) Charles R. Ehrlich did not timely report three
transactions on Form 4 and (v) Wilfred E. Lewallen did not timely report one
transaction on Form 4.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of April 17, 2002
(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
------------------------------------------------ ------------ --------
Perkins, Wolf, McDonnell & Company
310 South Michigan Avenue, Suite 2600
Chicago, IL 60604 ........................................... 3,258,500(2) 14.11%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 ...................................... 1,953,600(3) 8.46%
State of Wisconsin Investment Board
P.O. Box 7842
Madison, WI 53707 ........................................... 1,667,300(4) 7.22%
David C. Burdakin ............................................... 0 *
Richard E. Dessimoz ............................................. 58,034(5) *
Charles R. Ehrlich .............................................. 64,750(6) *
Donald J. Ehrlich ............................................... 173,779(7) *
Rodney P. Ehrlich ............................................... 73,184(8) *
William P. Greubel .............................................. 0 *
John T. Hackett ................................................. 22,128(9) *
E. Hunter Harrison .............................................. 35,828(10) *
Mark R. Holden .................................................. 57,534(11) *
Martin C. Jischke ............................................... 0 *
Ludvik F. Koci .................................................. 20,828(12) *
Derek L. Nagle .................................................. 16,667(13) *
All Executive Officers and Directors as a group (14 persons) .... 579,816 2.47%
* Less than one percent
(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 May 30, 2002 are deemed outstanding for purposes of computing the
percentage ownership of the person holding
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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 filed February 26, 2002.
(3) Based solely on a Schedule 13G filed February 12, 2002.
(4) Based solely on a Schedule 13G filed February 13, 2002.
(5) Includes currently exercisable options to purchase 55,034 shares.
(6) Includes currently exercisable options to purchase 48,800 shares.
(7) Includes currently exercisable options to purchase 6,667 shares.
(8) Includes currently exercisable options to purchase 54,534 shares.
(9) Includes currently exercisable options to purchase 18,000 shares.
(10) Includes currently exercisable options to purchase 18,000 shares.
(11) Includes currently exercisable options to purchase 56,534 shares.
(12) Includes currently exercisable options to purchase 18,000 shares.
(13) Includes currently exercisable options to purchase 12,167 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, 2001, 2000, and 1999 of the Chief Executive Officers and the other
four most highly compensated executive officers of the Corporation as of
December 31, 2001 (together, the "Named Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS COMPENSATION(2)
---------------------------------------- ---- -------- -------- --------- --------------
Donald J. Ehrlich .............................. 2001 $359,316 $ 0 0 $ 825
President and Chief Executive Officer 2000 $599,500 $ 0 20,000 $ 8,847
1999 $545,000 $419,650 135,000 $ 10,071
Mark R. Holden ................................. 2001 $287,500 $ 0 5,000 $ 2,675
Senior Vice President - Chief Financial Officer 2000 $287,500 $ 0 10,000 $ 3,965
1999 $250,000 $137,500 25,000 $ 3,998
Derek L. Nagle ................................. 2001 $275,000 $ 0 5,000 $ 4,144
Senior Vice President of the Corporation and 2000 $275,00 $ 0 8,000 $ 4,972
President - NOAMTC, Inc. 1999 $250,000 $ 65,000 6,250 $ 2,911
Richard E. Dessimoz ............................ 2001 $264,500 $ 0 10,000 $ 39,796
Acting Chief Executive Officer 2000 $264,500 $ 0 10,000 $ 5,255
1999 $230,000 $126,500 25,000 $ 3,119
Rodney P. Ehrlich .............................. 2001 $251,275 $ 0 0 $ 5,183
Senior Vice President - Product Development 2000 $251,275 $ 0 10,000 $ 8,841
1999 $218,500 $120,175 20,000 $ 7,238
Charles R. Ehrlich ............................. 2001 $251,275 $ 0 0 $ 5,183
Vice President - Manufacturing 2000 $251,275 $ 0 10,000 $ 11,735
1999 $218,500 $120,175 20,000 $ 9,937
(1) See the Report on Executive Compensation for a description of the Bonus
Plan.
5
(2) "All Other Compensation" consists of (i) contributions to the Corporation's
401(k) Plan on behalf of all of the Named Officers. In 2001, these payments
consisted of $2,400 each in respect of Mr. Holden, Mr. Nagle, and Mr.
Dessimoz, and $4,000 each in respect of Rodney P. Ehrlich and Charles R.
Ehrlich.; (ii) payments by the Corporation with respect to term life
insurance for the benefit of the Named Officers. In 2001, these payments
consisted of $825 in respect of Donald J. Ehrlich, $275 in respect of Mr.
Holden, $633 each in respect of Mr. Nagle and Mr. Dessimoz, and $1,183 each
in respect of Rodney P. Ehrlich and Charles R. Ehrlich; (iii) amounts
included as compensation for the Named Officers related to Company-provided
automobiles. In 2001, these payments consisted of $1,111 in respect of Mr.
Nagle; and, (iv) reimbursement of relocation expenses incurred by the Named
Officers. In 2001, these payments consisted of $36,763 in respect of Mr.
Dessimoz.
OPTION GRANTS
Shown below is information on grants to the Named Officers of stock
options pursuant to the Corporation's 2000 Stock Option and Incentive Plan
during the year ended December 31, 2001.
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENTAGE OF ASSUMED ANNUAL RATE OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS EMPLOYEES BASE PRICE EXPIRATION --------------------------
NAME GRANTED(1) IN 2001 (PER SHARE)(2) DATE 5% ($) 10% ($)
---- ---------- ------- -------------- ---- ------ -------
Donald J. Ehrlich....... --- --- $ 0.000 --- --- ---
Mark R. Holden.......... 5,000 5.88% $ 8.660 08/01/11 27,231 69,009
Derek L. Nagle.......... 5,000 5.88% $ 8.660 08/01/11 27,231 69,009
Richard E. Dessimoz..... 10,000 11.76% $ 8.660 08/01/11 54,462 138,018
Rodney P. Ehrlich....... --- 0.00% $ 0.000 --- --- ---
Charles R. Ehrlich...... --- 0.00% $ 0.000 --- --- ---
(1) Options become exercisable ratably beginning one year from date of
grant through three years of date of grant.
(2) Options were granted having exercise prices 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
August 11, 2001 (the date of grant) to August 11, 2011 (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 and 2000 Stock
Option Plans, as amended. None of the Named Officers exercised any stock options
during the fiscal year ended December 31, 2001.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
HELD AT DECEMBER 31, 2001 AT DECEMBER 31, 2001(1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------- ----------- ------------- ----------- -------------
Donald J. Ehrlich............................. 6,667 13,333 $2,833 $ 5,667
Mark R. Holden................................ 56,534 34,666 1,417 2,833
Derek L. Nagle................................ 12,167 15,783 1,133 1,714
Richard E. Dessimoz........................... 55,034 30,666 1,417 2,833
Rodney P. Ehrlich............................. 54,534 26,666 1,417 2,833
Charles R. Ehrlich............................ 52,134 29,066 1,417 2,833
6
(1) Based on the closing price on the New York Stock Exchange-Composite
Transactions of the Corporation's Common Stock on December 31, 2001
($7.800 per share).
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 2001, 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 determines 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
primarily 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 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. Bonuses for 1999, 2000, and 2001 for each of the
Named Officers appear under the caption "Bonus" in the Summary Compensation
Table on page 5.
Long Term Compensation through Stock Options and Stock Appreciation
Rights. The Company has two non-qualified stock option plans (the 1992 and 2000
Stock Options Plans) under which options may be granted to officers and other
key employees of the Company and its subsidiaries to purchase shares of common
stock at a price not less than market price at the date of grant. Under the
terms of the Stock Option Plans, up to an aggregate of 3,750,000 shares are
reserved for issuance, subject to adjustment for stock dividends,
recapitalizations and the like. Options granted under the Stock Option Plans
become exercisable in annual installments of three years for options granted
under the 2000 Plan and five years for options granted under the 1992 Plan,
except for non-employee Directors of the Company in which options 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
Plan also provides for the award of restricted stock to directors and officers
of the Company and key employees of the Company and its subsidiaries. Under the
terms of the 2000 Stock Option Plan, shares
7
designated for restricted stock awards are included in the aggregate of
2,000,000 shares reserved for issuance, subject to adjustment for stock
dividends, recapitalizations, and the like. In 2001, the Company adopted a Stock
Appreciation Rights Plan, under which stock appreciation rights may be granted
to officers and key employees of the Company and its subsidiaries. Under the
terms of the Stock Appreciation Rights Plan, 1,000,000 rights are designated as
reserved for issuance.
Chief Executive Officers' 2001 Compensation. The Chief Executive
Officer of the Company 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. 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.
Section 162(m). Section 162(m) of the Internal Revenue Code limits tax
deductions for executive compensation to $1 million. There are several
exemptions to Section 162(m), including one for qualified performance-based
compensation. To be qualified, performance-based compensation must meet various
requirements including shareholder approval. The Committee intends to consider
annually whether it should adopt a policy regarding 162(m) and to date has
concluded that it was not appropriate to do so. One reason for this conclusion
is that, assuming the current compensation policies and philosophy remain in
place, Section 162(m) will not be applicable in the near term to any executive's
compensation.
Submitted by the
Members of the Compensation Committee
John T. Hackett
Ludvik F. Koci
E. Hunter Harrison
AUDIT COMMITTEE REPORT
The Audit Committee of the board of directors in fiscal 2001 consisted
of Messrs. Hackett, Harrison and Koci. In March, 2002, Mr. Harrison resigned
from the Audit Committee, and Messrs. Burdakin and Jischke joined the Audit
Committee. Each such member of the Audit Committee is independent within the
meaning of the rules of the New York Stock Exchange. The Committee's
responsibilities are described in a written charter adopted by the board.
As part of its ongoing activities, which are described above under
"Information Concerning the Board of Directors and Certain Committees--Audit
Committee," the Audit Committee has:
- Reviewed and discussed with management the Company's audited
consolidated financial statements for the fiscal year ended December
31, 2001;
- Discussed with Andersen LLP, the Company's independent auditors for
fiscal 2001, 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 auditors their independence; and,
- Considered the compatibility of the non-audit services provided by
the auditors (which are described below) with the auditors'
independence.
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
Company's financial statements, to plan or conduct audits or to determine that
the Company's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. The Company's
management is responsible for preparing the Company's financial statements and
for maintaining the system of internal controls. The independent auditors are
responsible for auditing the financial statements and for
8
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 Company's audited consolidated financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, for filing with the Securities and Exchange Commission.
The fees paid by the Company to Andersen LLP for the fiscal year ended
December 31, 2001 were as follows:
Audit Fees. The aggregate fees billed for professional services
rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2001 and the reviews of the
financial statements included in the Company's Forms 10-Q for the
fiscal year ended December 31, 2001 were $1,450,000.
Financial Information Systems Design and Implementation Fees. No fees
were billed by Andersen LLP for financial information systems design
and implementation services during 2001.
All Other Fees. The aggregate fees billed for other professional
services rendered by Andersen LLP for the year ended December 31, 2001,
other than the services described above under "Audit Fees," equaled
$1,298,000, including audit-related fees of $2,000 and tax and other
fees of $1,296,000. Audit-related fees include audits of subsidiaries,
benefit plan audits, accounting consultation, various attest services
under professional standards, consents, certain internal audit services
and other audit services. Tax and other fees include operational
systems implementation, tax compliance and consulting matters.
All Audit Committee members have approved this report.
John T. Hackett
Ludvik F. Koci
David C. Burdakin
Martin C. Jischke
9
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. It covers the period commencing
December 31, 1996 and ending December 31, 2001. 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, 1996 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 SHAREHOLDERS
DECEMBER 31, 1996 THROUGH DECEMBER 31, 2001
AMONG WABASH NATIONAL CORPORATION, THE S&P 500 INDEX
AND THE DOW JONES TRANSPORTATION INDEX
(RETURN ASSUMES DIVIDEND REINVESTMENT)
WABASH S&P 500 DJ TRANS
1996 100 100 100
1997 154.52 130.47 144.37
1998 111.93 164.82 139.63
1999 82.90 194.44 131.99
2000 48.57 174.74 130.63
2001 48.95 151.95 117.04
10
RELATED PARTY TRANSACTIONS
On July 16, 2001, the Company entered into a three-year consulting and
non-compete agreement with Donald J. Ehrlich, former President and Chief
Executive Officer of the Company. At the time the agreement was executed, Mr.
Ehrlich was a director of the Company. The agreement provides for Mr. Ehrlich to
provide certain consulting services to the Company and precludes Mr. Ehrlich
from engaging in defined activities which are deemed competitive to the
interests of the Company. The agreement provides for payments to Mr. Ehrlich for
consulting services rendered to the Company 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.
In April, 2002, the Company entered into an employment contract with
William P. Greubel in connection with Mr. Greubel's employment as Chief
Executive Officer and President of Wabash National Corporation beginning in May,
2002. Mr. Greubel was formerly a Director and Chief Executive Officer of
Accuride Corporation, a manufacturer and supplier of wheels for medium and
heavy-duty trucks and trailers. During 2001, the Company purchased certain
products from Accuride Corporation, and the Company expects to make additional
purchases during 2002. All purchases made during 2001 were on an arm's-length
basis, and the Company expects that future purchases will be made on an
arm's-length basis.
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, 23,087,260 shares of which were issued and
outstanding as of April 2, 2002, and up to 25,000,000 shares of Preferred Stock,
482,041 shares of which were outstanding as of April 2, 2002. 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
Corporation 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
Corporation, 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 Corporation (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 Corporation 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
Corporation). The rights will expire in November 2005, unless redeemed earlier
by the Corporation.
If, subsequent to the rights becoming exercisable, the Corporation 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 Corporation with a market value equal to twice the exercise price of
each right. Alternatively, if a 20% holder acquires the Corporation by means of
a merger in which the Corporation and its stock survives, or if any person
acquires 20% or more of the Corporation's Common Stock, each right not owned by
a 20% or more shareholder, would become exercisable for Common Stock of the
Corporation (or, in certain circumstances, other consideration) having a market
value equal to twice the exercise price of the right.
11
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 not
counted for the election of director proposal. 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 Andersen, LLP has acted as the Corporation's
independent public accountants for the year ended December 31, 2001.
Representatives of 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.
The Audit Committee and the Board are currently monitoring various
matters involving Andersen, including the indictment of Andersen by the U.S.
Department of Justice and other litigation and investigations by regulatory
agencies into the financial reporting practices of certain companies audited by
Andersen. In view of the rapid pace of these on-going developments, and in view
of the extensive work required in connection with the recent renegotiation of
the Company's credit facilities, the Audit Committee and the Board have
determined that it is in the best interests of the Company and its stockholders
to defer the selection of the Company's auditors this year until further
information becomes known about the status of Andersen, and to allow adequate
time for the Audit Committee carefully to consider alternative accounting firms,
should it decide not to recommend retaining Andersen. Accordingly, the Board of
Directors has not yet selected the Company's auditors for the year ending
December 31, 2002.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2003 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 March 13, 2003. Stockholder proposals intended
to be presented under Rule 14a-8 must be received at the Corporation's principal
executive offices no later than December 26, 2002.
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 26, 2002
WABASH NATIONAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 30, 2002
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
or Preferred 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 30, 2002, or any adjournment thereof, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITION.
1. Election of six Directors by all Stockholders. Nominees:
01 - David C. Burdakin 02 - William P. Greubel 03 - John T. Hackett
04 - E. Hunter Harrison 05 - Martin C. Jischke 06 - Ludvik F. Koci
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 to the
extent set forth in the proxy statement.
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on the reverse side)
DETACH HERE
================================================================================
(continued from other side)
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 PROPOSITION 1.
DATED ______________________, 2002
____________________________________
SIGNATURE(S)
____________________________________
PLEASE SIGN EXACTLY AS NAME APPEARS
IN BOX ON THE LEFT. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE, OR GUARDIAN, PLEASE GIVE YOUR
TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT
OR OTHER AUTHORIZED OFFICIAL. IF A PARTNERSHIP,
PLEASE SIGN PARTNERSHIP NAME BY AUTHORIZED
PERSON. IF JOINT ACCOUNT, PLEASE PROVIDE
BOTH SIGNATURES.