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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
DETREX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
DETREX CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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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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DETREX CORPORATION
24901 NORTHWESTERN HIGHWAY
SUITE 500
SOUTHFIELD, MICHIGAN 48075
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1996
PLEASE TAKE NOTICE that the annual meeting of shareholders of DETREX
CORPORATION will be held on Thursday, the 25th day of April, 1996 at 11:00
o'clock, Local Time, in the forenoon, at the Radisson Plaza Hotel, 1500 Town
Center, Southfield, Michigan, for the purposes of considering and acting upon
the following:
(1) the election of three directors;
(2) the consideration of a shareholder proposal to amend the corporation's
by-laws to establish a shareholders' advisory committee; and
(3) the transaction of such other business as may properly come before the
meeting and any adjournments or postponements thereof.
The Board of Directors knows of no other business which will be presented
to the shareholders at this meeting.
The Board of Directors has fixed February 23, 1996 as the record date for
the determination of the shareholders entitled to receive notice of and to vote
at the annual meeting of shareholders and any adjournments or postponements
thereof.
It is important that proxies be returned promptly. Therefore, shareholders
who do not expect to attend in person are requested to vote, sign, date and
return the enclosed proxy, which is solicited by the Board of Directors, in the
enclosed prepaid envelope.
By Order of the Board of Directors
ROBERT M. CURRIE
Secretary
Dated: March 25, 1996
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DETREX CORPORATION
24901 NORTHWESTERN HIGHWAY
SUITE 500
SOUTHFIELD, MICHIGAN 48075
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors of DETREX CORPORATION (the "Corporation" or
"Detrex") requests all shareholders who do not expect to be present at the
annual meeting to be held April 25, 1996 (the "Annual Meeting"), and who wish
their stock to be voted upon the business to be transacted thereat to vote,
sign, date and return the enclosed form of proxy. At any time before it is
voted, each granted proxy may be revoked by the shareholder by a later-dated
proxy, by written revocation addressed to the Secretary of the Corporation at
the address listed below, or by voting by ballot at the Annual Meeting. The cost
of solicitation is being borne by the Corporation. This solicitation is made by
and on behalf of the Board of Directors of the Corporation. Proxies received by
the Board of Directors from shareholders will be voted at the meeting. It is
anticipated that this Proxy Statement and the enclosed Proxy will be mailed to
the shareholders of the Corporation on or about March 25, 1996. The
Corporation's principal offices are located at 24901 Northwestern Highway, Suite
500, Southfield, Michigan 48075.
Only shareholders of record at the close of business on February 23, 1996
are entitled to vote at the Annual Meeting. As of that date, there were
1,583,414 shares of common stock, $2 par value per share, ("Common Stock")
outstanding and entitled to vote. They were the only outstanding shares of the
Corporation. Every holder of outstanding shares of Common Stock entitled to be
voted at the Annual Meeting is entitled to one vote for each share held.
Presence in person or by proxy of holders of a majority of the shares of
Common Stock will constitute a quorum at the Annual Meeting. Assuming a quorum
is present, directors are elected by a plurality vote of all votes cast. In
accordance with applicable law, abstentions and broker non-votes will not have
the effect of votes in opposition to a director.
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ELECTION OF DIRECTORS
The Articles of Incorporation of the Corporation provide for the
classification of directors into three classes of membership as nearly equal in
number as possible, with three-year terms expiring on successive annual meeting
dates. The Corporation's By-Laws currently provide that the Board of Directors
shall consist of not less than seven nor more than twelve persons as shall be
fixed from time to time by the Board. At a meeting on December 13, 1995 the
Board voted to increase the number of directors from seven to eight.
At the Annual Meeting, two Directors of the First Class will be elected to
serve for a term of three years and until their successors have been elected and
have qualified. The terms of the two present Directors of the First Class, John
F. Mangold and William C. King, expire at the Annual Meeting. Mr. Mangold was
elected by the shareholders in 1993. Mr. King was elected by the Board of
Directors in May 1995 to replace Joseph L. Wenzler, who resigned in April 1995.
Also at the Annual Meeting one Director of the Third Class will be elected
to serve for a term of two years and until his or her successor has been elected
and has qualified. The term of one of the present Directors of the Third Class,
Thomas E. Mark, expires at the Annual Meeting. In December 1995, when the number
of directors was increased, the Board of Directors elected Mr. Mark as a
Director of the Third Class, effective January 1996, to serve until the Annual
Meeting.
It is the intention of the persons named in the accompanying form of proxy
to vote such proxies for the nominees named below. The Board of Directors has no
reason to believe that any nominee will be unable to serve. In the event that
any nominee should not be available, the persons named in the proxy will vote
for the election of such substitute nominee as may be selected by the Board of
Directors of the Corporation.
NOMINEES For Directors of the First Class:
John F. Mangold
William C. King
NOMINEE For Director of the Third Class:
Thomas E. Mark
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 6, 1996, the amount of Common
Stock beneficially owned by each director and nominee for director, each current
executive officer named in the Summary Compensation Table, and all directors,
nominees for director and executive officers as a group:
TOTAL SHARES PERCENT OF
NAME BENEFICIALLY OWNED(1) CLASS
- ------------------------------------------------------------ --------------------- ----------
John D. Withrow............................................. 5,000(2) *
Bruce W. Cox................................................ 65,290(2) 4.0%
John F. Mangold............................................. 5,500(2) *
William C. King............................................. 5,000(2)(3) *
Robert A. Emmett, III....................................... 43,642(2)(4)(5) 2.7%
Benjamin W. McCleary........................................ 5,500(2) *
Arbie R. Thalacker.......................................... 33,500(2)(4) 2.0%
Thomas E. Mark.............................................. 18,750(2) 1.1%
Gerald J. Israel............................................ 6,000(2) *
Robert M. Currie............................................ 2,000(2) *
Joseph F. Schatt............................................ 3,000(2) *
All Executive Officers, Directors and Nominees
for Director as a Group................................... 193,182(2) 11.7%
- -------------------------
* Less than 1%
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(1) Ownership is direct with sole voting power and sole investment power unless
otherwise indicated by footnote.
(2) Totals include shares underlying options exercisable within 60 days of March
6, 1996, as follows: Messrs. Emmett, McCleary, Thalacker, Mangold, Withrow
and Cox, 5,000 shares each; Messrs. King and Currie 2,000 shares each; Mr.
Mark, 18,750 shares; Mr. Israel, 6,000 shares; and Mr. Schatt, 3,000 shares.
(3) Included in the shares reported for Mr. King are 3,000 held by his wife as
trustee of her trust.
(4) Messrs. Thalacker and Emmett are first cousins.
(5) Included in the shares reported for Mr. Emmett are 1,000 shares owned
jointly with his wife, 11,189 shares owned by his wife, 100 shares owned by
his minor son, and 11,864 shares held by Mr. Emmett as trustee.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following information is furnished with respect to each person
nominated for election as a director and each other person whose term of office
as a director will continue after the Annual Meeting:
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION DURING LAST 5 YEARS
- ---------------------- --- -------- --------------------------------------------------------
NOMINEES FOR DIRECTORS OF THE FIRST CLASS
WHOSE TERM OF OFFICE WILL EXPIRE IN 1999
JOHN F. MANGOLD....... 69 1993 Independent Consultant; President and Chief Executive
Officer of the Corporation from September 1992 to
January 1993; from July 1990 to January 1991 Mr. Mangold
was the Vice President/Utility Steam Generators of ABB
Combustion Engineering; from March 1990 to June 1990 and
June 1991 to September 1991 Mr. Mangold served as a
consultant to ABB Combustion Engineering; prior to that
time, Mr. Mangold was the President of Resource Recovery
Systems, a division of Combustion Engineering, Inc.
WILLIAM C. KING....... 51 1995 Chairman of the Board and Chief Executive Officer of the
Corporation since January 1996; President and Chief
Executive Officer of the Corporation from April 1995 to
January 1996; Director of the Corporation since May
1995; President and Chief Operating Officer of Masland
Industries from 1992 to 1994; Vice President and Group
Executive of Allied Signal prior to 1992.
NOMINEE FOR DIRECTOR OF THE THIRD CLASS
WHOSE TERM OF OFFICE WILL EXPIRE IN 1998
THOMAS E. MARK........ 43 1996 President and Chief Operating Officer of the Corporation
since January 1996; President and General Manager of ABB
Paint Finishing from 1990 to 1996; Director of Business
Development ABB Flakt Alpha from March 1987 to December
1989.
DIRECTORS OF THE SECOND CLASS
WHOSE TERMS OF OFFICE WILL EXPIRE IN 1997
ROBERT A. EMMETT, 52 1984
III................. Partner, Reed Smith Shaw & McClay, attorneys,
Washington, D.C.
BENJAMIN W. 51 1990
MCCLEARY............ Partner, McFarland Dewey & Co., investment bankers, New
York, New York.
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DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION DURING LAST 5 YEARS
- ---------------------- --- -------- --------------------------------------------------------
ARBIE R. THALACKER.... 60 1980 Chairman of the Board of the Corporation from April 1993
to January 1996, Partner, Shearman & Sterling,
attorneys, New York, New York.
DIRECTORS OF THE THIRD CLASS
WHOSE TERM OF OFFICE WILL EXPIRE IN 1998
JOHN D. WITHROW....... 63 1993 Consultant to Eaton Corporation; Member of the Board of
Directors of A.P. Parts International; President of
Lectron Products, Inc. until December 1994; Formerly
Executive Vice President of Chrysler Corporation.
BRUCE W. COX.......... 67 1968 President of B.W. Cox Company, manufacturers
representative, N. Canton, Ohio.
The information as to securities owned, business interests and other events
and transactions of the directors and nominees, insofar as it was not within the
knowledge of the Corporation, has been furnished by such persons.
CERTAIN BUSINESS RELATIONSHIPS
Mr. Arbie R. Thalacker, a director of the Corporation, is a member of the
firm of Shearman & Sterling, attorneys, New York, New York. Shearman & Sterling
rendered legal services to the Corporation during 1995 and it is anticipated
that the firm will render legal services to the Corporation during 1996.
Mr. Robert A. Emmett, III, a director of the Corporation, is a member of
the firm of Reed Smith Shaw & McClay, attorneys, Washington, D.C. Reed Smith
Shaw & McClay rendered legal services to the Corporation during 1995 and it is
anticipated that the firm will render legal services to the Corporation during
1996.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation has an Audit Committee of
non-employee directors, the members of which in 1995 were John F. Mangold
(chairman), John D. Withrow and Arbie R. Thalacker. The Audit Committee held
three meetings during the last fiscal year. The Audit Committee, as
representative of the Board of Directors, meets with the independent auditors of
the Corporation to review the manner of the auditing of the Corporation's
accounts. The committee reviews with the auditors the methods of accounting, the
internal accounting controls and procedures and the reports submitted by the
auditors. The Audit Committee reviews the audit scope and the estimated amount
of the audit fee. The Audit Committee also recommends to the Board of Directors
the selection of the Corporation's independent public accountants.
The Board of Directors also has a Compensation Committee of non-employee
directors, the members of which in 1995 were Benjamin W. McCleary (chairman)
Arbie R. Thalacker, and Robert A. Emmett, III. The Compensation Committee held
two meetings during the last fiscal year. The committee reviews and recommends
to the Board of Directors the salaries and other compensation of all officers of
the Corporation. The committee also administers and grants options under the
1993 Stock Option Plan and 1994 Stock-Based Cash Incentive Plan.
In January 1996, The Board of Directors formed a Finance Committee. Its
members are Benjamin W. McCleary (chairman), William C. King, Arbie R. Thalacker
and Thomas E. Mark. The primary function of the Finance Committee is to review
and approve the Corporation's financing arrangements.
The Board of Directors does not have a Nominating Committee.
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During the fiscal year ended December 31, 1995, the Board of Directors held
nine regular meetings and four special meetings. Each incumbent director
attended at least 75% of the aggregate of all meetings of the Board of Directors
and all meetings held by all committees of the Board on which he served.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
LISTED ABOVE AS DIRECTORS OF THE FIRST CLASS AND OF THE THIRD CLASS.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consisted of three members of the Board, none of whom are present officers or
employees of the Corporation, or former officers of the Corporation. The
Committee is responsible for reviewing and making recommendations to the Board
with respect to compensation paid to all officers of the Corporation (the
"Officers"). In addition, the Committee has been charged with the responsibility
of administering and authorizing options or grants under the 1993 Stock Option
Plan and the 1994 Stock-Based Cash Incentive Plan.
No increases were made to the salaries of Officers or other key employees
during 1995. Increased salary amounts appearing in the Summary Compensation
Table for 1995 were the result of salary adjustments made in July 1994. In late
1995 the Committee met with the Chief Executive Officer to review his
assessments of the performance of each Officer and other key employees and his
recommendations for increases in responsibilities and compensation. The
Committee concurred with these recommendations and, in turn, recommended them to
the Board of Directors for implementation during 1996.
In 1995 the Corporation did not have a bonus plan for Officers or key
employees of the Corporation. The Committee reviewed with management the
elements of a new Variable Compensation Plan ("VCP") that would be implemented
for 1996. The VCP would pay a cash bonus to an executive, depending on the
financial performance of the Corporation and its divisions. The bonus
opportunity would range from 10% to 30% of salary. No bonus would be paid if the
financial results were below 90% of the 1996 Budget and the maximum would be
paid if the financial results were at 110% of the 1996 Budget, in each case
after taking into account the accrual of bonuses. Corporate Officers' bonuses
would be based entirely on the performance of the Corporation as a whole.
Managers with divisional responsibilities would have 50% dependent on the
division's performance and 50% dependent on corporate performance. The Committee
concurred with the desirability of implementing such a plan to ensure the
motivation of the Corporation's managers. The Committee discussed the economic
impact the proposed plan would have at different levels of financial
performance, both at the divisional level and the corporate level. The Committee
recommended the adoption of the VCP to the Board. The Board approved the
Committee's recommendation.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Joseph Wenzler resigned as President and Chief Executive Officer of the
Corporation in April, 1995. Mr. Wenzler received his base salary through April,
1995 and severance payments under the terms of his employment agreement
described under "Employment and Other Agreements".
In April, 1995, Mr. William King was elected President and Chief Executive
Officer of the Corporation. His initial employment contemplated that he would
remain President and Chief Executive Officer until his successor was identified
after a search conducted with the assistance of a nationally recognized search
firm. His compensation was therefore established on a basis which reflected the
amount of time he actually devoted to the affairs of the Corporation. In May,
1995 the Board elected Mr. King a Director of the Corporation and the Committee
awarded him options covering 3,000 shares of common stock under the 1993 Stock
Option Plan. The options are not exercisable until the first anniversary of the
date of grant. This grant was made so that Mr. King had the same number of stock
options that he would have received if he had been elected an outside Director
of the Corporation.
As the year progressed, the Board concluded that the Corporation would be
best served if Mr. King agreed to stay on as Chairman and Chief Executive
Officer and the search redirected to seek a President and
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Chief Operating Officer. Mr. King agreed on the basis that he receive a salary
of $100,000 per year for spending approximately 25% of his normal working days
on Corporation matters, plus performance based compensation and stock options
appropriate to his contribution. The Committee recommended to the Board that
this arrangement be accepted and the Board of Directors approved the Committee's
recommendation.
In January, 1996 Thomas Mark was elected President and Chief Operating
Officer of the Corporation.
Benjamin W. McCleary, Chairman
Robert A. Emmett, III
Arbie R. Thalacker
Members of the Compensation Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Arbie R. Thalacker is a member of the law firm of Shearman & Sterling, New
York, New York, which rendered legal services to the Corporation during 1995 as
described under "Certain Business Relationships". Robert A. Emmett, III is a
member of the law firm of Reed Smith Shaw & McClay, Washington, D.C., which
rendered legal services to the Corporation during 1995 as described under
"Certain Business Relationships".
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EXECUTIVE COMPENSATION
AND OTHER TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation earned in each of the
last three years by the Corporation's Chief Executive Officer and the other most
highly compensated executive officers who earned more than $100,000 in total
annual salary and bonus.
LONG TERM COMPENSATION
---------------------------------------------
PAYOUTS
--------------------
AWARDS LONG
ANNUAL COMPENSATION --------------------- TERM
--------------------------- RESTRICTED INCENTIVE
NAME AND PRINCIPAL SALARY BONUS OTHER STOCK OPTIONS PLAN ALL
POSITION YEAR ($) ($) ($) ($) (#) ($) OTHER
- --------------------------- ---- ------- ----- ----- ---------- ------- --------- -------
J. L. Wenzler.............. 1995 63,077 141,923(2)
President and CEO(1) 1994 205,000
(1/93 to 4/95) 1993 197,904 7,000 75,000 36,695(2)
W. C. King................. 1995 179,267 3,000(3)
President and CEO(1) 1994
(4/95 to 1/96) 1993
G. J. Israel............... 1995 135,000
Vice President, Treasurer 1994 129,615
and CFO 1993 102,885 4,500 10,000 (4)
R. M. Currie............... 1995 125,000
General Counsel 1994 125,000 (4)
and Secretary 1993 54,446(5) 600 5,000
J. F. Schatt............... 1995 103,400
Vice President, 1994 98,374 (4)
Administration 1993 63,269(6) 4,000 5,000
D. R. Crandell............. 1995 110,130
Vice President, 1994 107,387
Commercial Development 1993 97,923 2,400 (4)
- -------------------------
(1) In April 1995 Mr. Wenzler resigned, and Mr. King was hired as President and
Chief Executive Officer.
(2) Mr. Wenzler's "All Other" compensation in 1993 reflects moving and
relocation expenses of $10,695 and a brokerage fee on the sale of his home
of $26,000, which was paid pursuant to his employment agreement with the
Corporation. His "All Other" compensation in 1995 reflects severance
payments.
(3) On May 22, 1995 in connection with his election as a director, Mr. King
received options to purchase 3,000 shares of Common Stock at the then market
price of $8.00 per share. The options are exercisable commencing May 22,
1996.
(4) On December 20, 1993, Messrs. Israel, Currie, Schatt and Crandell were each
awarded 4,000 Share Units under the Corporation's 1994 Stock-Based Cash
Incentive Plan. The fair market value of the Common Stock of the Corporation
at December 31, 1995 did not exceed the initial value of the Share Units.
(5) Mr. Currie was hired by the Corporation effective July 16, 1993. He was
named Secretary of the Corporation in 1994.
(6) Mr. Schatt was hired by the Corporation effective April 19, 1993.
The Corporation has a defined benefit retirement plan (the "Retirement
Plan") which is qualified under the Internal Revenue Code. The participants are
all salaried and all non-union employees of the Corporation. Benefits are, in
general, based upon annual salary and length of service. The amount of the
Corporation's
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annual contribution to the Retirement Plan is determined for the total of all
participants covered by the plan, and the amount of payment in respect of a
specified person is not and cannot readily be separated or individually
calculated by the regular actuaries for the plan. Of the current annual
compensation reported in the Summary Compensation Table above for all
participants, approximately 96% is covered by the Retirement Plan. The table
below illustrates the amount of annual pension benefits payable to a person in
specified average annual compensation and years of service classifications,
assuming retirement in 1996. The Retirement Plan is integrated with Social
Security benefits and the amounts payable upon retirement shown in the table are
net of Social Security benefits offsets.
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BENEFIT EXAMPLES -- ANNUAL BENEFIT AT AGE 65 IN 1996(1)(2)
YEARS OF SERVICE
AVERAGE ANNUAL --------------------------------------------
COMPENSATION 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- ---------------------------------------------------------- -------- -------- -------- --------
$ 75,000............................................... 9,004 18,007 27,011 37,512
$100,000............................................... 12,754 25,507 38,261 52,512
$125,000............................................... 16,504 33,007 49,511 67,512
$150,000(3)............................................ 20,254 40,507 60,761 82,512
- -------------------------
(1) Based on the Social Security law in effect on January 1, 1996 and the
Retirement Plan formula in effect on January 1, 1996.
(2) Internal Revenue Code Section 415 limit is $120,000.
(3) Compensation in excess of $150,000 is not recognized.
The years of credited service and average annual compensation covered by
the Retirement Plan for the current employees named in the Summary Compensation
Table were respectively as follows: W.C. King 1 year and $150,000; G.J. Israel 3
years and $129,706; R.M. Currie 3 years and $121,538; J.F. Schatt 3 years and
$99,391; and D.R. Crandell 4 years and $96,086.
EMPLOYMENT AND OTHER AGREEMENTS
In January 1993 the Corporation and Joseph L. Wenzler entered into an
employment agreement naming Mr. Wenzler President and Chief Executive Officer of
the Corporation. In April 1995, Mr. Wenzler resigned. During 1995, Mr. Wenzler
received $63,007 in salary and severance payments of $141,923 under the
agreement. All options granted to Mr. Wenzler under the employment agreement
have expired unexercised.
On October 1, 1995, the Corporation and William C. King entered into an
employment agreement which replaced a temporary agreement executed in April of
1995. Under the October agreement, Mr. King is to serve as President and Chief
Executive Officer with the understanding that, upon the hiring of a chief
operating officer, he would continue as Chief Executive Officer. The agreement
has a five year term and provides for a salary of $100,000 per year plus $200
per hour to a maximum of $1,350 per day for days in excess of a minimum five
days of service per month. The agreement also provides that Mr. King will
participate in the Corporation's medical and life insurance plan (and be
entitled, in certain circumstances, for retiree medical coverage) and be
eligible for option grants and annual bonuses. Under the terms of the employment
agreement, Mr. King will also be entitled to a supplemental pension upon his
termination of employment with the Corporation based upon the formula in the
Retirement Plan, but increased for additional credited service in accordance
with the terms of the agreement. The agreement includes severance terms
providing two years' salary and two years' medical benefits if Mr. King is
terminated before expiration of the agreement's term for a reason other than
Cause or Disability or if he resigns for Good Reason (as such terms are defined
in the agreement).
On January 22, 1996, the Corporation and Thomas E. Mark entered into an
employment agreement naming Mr. Mark President and Chief Operating Officer. The
agreement has a three year term but extends on each anniversary date for an
additional year unless either party declines the extension. It provides for a
salary of $238,000 per year and a signing bonus of $40,000. The agreement
provides that Mr. Mark will participate in the Corporation's medical and life
insurance plans and be eligible for option grants and annual bonuses. The
agreement also provides for a supplemental pension upon his termination of
employment, subject to certain vesting and other conditions set forth in the
agreement. The full amount of the pension will equal 50% of his final salary and
will be earned if Mr. Mark completes five (5) years of employment with the
Corporation. The agreement includes severance terms providing six months' salary
and six months' medical benefits if Mr. Mark is terminated before the expiration
of the agreement's term for a reason other than Cause or Disability or if he
resigns for Good Reason (as such terms are defined in the agreement). Under the
agreement, he is also entitled to receive his salary and medical benefits for an
additional period, up to 18 months, during which he is seeking new employment.
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On February 22, 1993 the Corporation and Gerald J. Israel entered into an
employment agreement naming Mr. Israel Chief Financial Officer and Vice
President, Finance, effective February 23, 1993. Mr. Israel was named Treasurer
in 1994. The agreement provides for an initial base salary of $125,000, and Mr.
Israel will be afforded the opportunity to earn an annual bonus. It provides
medical benefits, life insurance, and full vesting in the Retirement Plan after
five full years of employment. The employment agreement further provides for a
severance payment of three months' salary if the Corporation terminates Mr.
Israel's employment in the first year of service, to be increased by one month
per each year of service thereafter to a maximum of twelve months' salary.
On June 23, 1993 the Corporation and Robert M. Currie entered into an
employment agreement naming Mr. Currie General Counsel of the Corporation,
effective as of July 16, 1993. Mr. Currie was named Secretary of the Corporation
in 1994. The agreement has a three year term and will automatically be extended
for additional one year periods unless earlier terminated. It provides for an
initial base salary of $125,000, and Mr. Currie will be afforded the opportunity
to earn an annual bonus. It provides medical benefits, life insurance, and full
vesting in the Retirement Plan after five full years of employment. The
employment agreement further provides for a severance payment of 18 months'
salary in the event the Corporation terminates Mr. Currie's employment for a
reason other than "Cause" (as defined in the agreement).
On April 19, 1993, the Corporation and Joseph F. Schatt entered into an
employment agreement naming Mr. Schatt Vice President, Human Resources. In 1995
his title was changed to Vice President, Administration. The agreement has no
set term. It provides for an initial base salary of $88,000 and that he is
eligible for an annual bonus. The agreement also provides medical and life
insurance benefits and full vesting in the Retirement Plan after five full years
of employment. The employment agreement further provides for a severance payment
of three months' salary if the Corporation terminates Mr. Schatt's employment in
the first year of service, to be increased by one month per year thereafter to a
maximum of twelve months' salary.
Each of the named executive officers have received various option grants
under the Corporation's 1993 Stock Option Plan. The Corporation also maintains
the 1993 Stock Option Plan For Outside Directors. Both plans provide for the
immediate vesting and acceleration of options upon a Change in Control (as
defined in the plans) of the Corporation.
1994 STOCK-BASED CASH INCENTIVE PLAN
On December 15, 1993 the Board of Directors adopted the 1994 Stock-Based
Cash Incentive Plan of Detrex Corporation (the "Incentive Plan"). The Incentive
Plan provides for grants of "Share Units", the value of which is determined by
reference to the increase, over a "Performance Cycle" beginning January 1, 1994
and ending March 31, 1997, in the fair market value of the Common Stock. Subject
to certain limits set forth in the Incentive Plan, the value of Share Units will
be paid in cash to participants following the end of the Performance Cycle. The
initial value of the Share Units under the Incentive Plan is $12.75 per unit for
senior executives designated as such in the plan, and $11.75 per unit for all
other participants.
The Incentive Plan is administered, and Share Units are granted under the
plan, by the Compensation Committee. The Chief Executive Officer and Chief
Operating Officer do not participate in the Incentive Plan. As of March 1, 1996,
53 employees of the Corporation held 33,850 Share Units.
A participant who ceases to be employed by the Corporation prior to the end
of the Performance Cycle will forfeit all Share Units granted to such
participant; provided, however, that if termination is due to death or
disability of the participant, then the participant will receive an award based
upon the "Appreciation Value" of the Share Units calculated using the value of
the Common Stock as of the date of termination of employment unless, in the
event of disability, the Compensation Committee decides to permit the
participant to hold the Share Units for a longer period as provided in the
Incentive Plan. In the event of a Change in Control (as defined in the Incentive
Plan) of the Corporation prior to the end of the Performance Cycle, each
participant, who is in the employ of the Corporation on or immediately prior to
the date of such Change in Control, will receive a payment with respect to his
or her Share Units based upon the higher of the value of the Common
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Stock at the time or the highest price paid per share in connection with the
Change in Control. The rights of a participant with respect to Share Units may
not be assigned or transferred, otherwise than by will or by the laws of descent
and distribution. Neither the Incentive Plan nor any action taken thereunder may
be construed as giving any employee any right to be retained in the employ of
the Corporation.
DIRECTOR COMPENSATION
A director of the Corporation who is not an employee of the Corporation or
its subsidiaries is paid for his services as a director $675 per month plus $405
and reasonable expenses for each Board of Directors meeting attended, and $135
and reasonable expenses for each committee meeting attended. Mr. Thalacker
received no additional compensation for serving as Chairman of the Board in
1995.
A Stock Option Plan for Outside Directors was approved by the shareholders
at the 1993 Annual Meeting. In 1995, options to purchase 1,000 shares (with an
exercise price of $8.25) were granted on May 1 to John F. Mangold, Robert A.
Emmett, III, Benjamin W. McCleary, Arbie R. Thalacker, Bruce W. Cox, and John D.
Withrow. The options are exercisable as of May 1, 1996. The options will
terminate at the earliest of the tenth anniversary of the date of grant, the
first anniversary of the director's resignation, removal or termination as a
member of the Board, or the date of the director's removal from the Board for
Cause (as defined in the plan).
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PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Common Stock for the last five fiscal years with the cumulative total return on
the NASDAQ Index and the Chemicals-Specialty Index over the same period
(assuming an investment of $100 in the Common Stock, NASDAQ Index and the
Chemicals-Specialty Index on December 31, 1990, and reinvestment of all
dividends). The common stock of each of the following companies is included in
the Chemicals-Specialty Index: Air Products, Betz Laboratories, Cabot
Corporation, Ethyl Corporation, Grace (WR) and Company, Great Lakes Chemical,
Lubrizol Corporation, Morton International, Nalco Chemical, Praxair Inc., and
Sigma Aldrich Corporation.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG DETREX CORPORATION, THE NASDAQ STOCK MARKET -- US INDEX
AND A PEER GROUP
MEASUREMENT PERIOD CHEMICALS-
(FISCAL YEAR COVERED) DETREX CORP. SPECIALTY NASDAQ INDEX
1990 100 100 100
1991 57 149 161
1992 61 163 187
1993 88 168 215
1994 78 158 210
1995 40 200 296
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OPTION GRANTS IN LAST FISCAL YEAR
The following table shows information about option grants in the last
fiscal year for each of the executive officers included in the Summary
Compensation Table. In 1995, no other executive officer of the Corporation
received stock options. The Corporation did not grant any stock appreciation
rights.
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR GRANT DATE
OPTIONS IN FISCAL BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) YEAR ($/SH) DATE VALUE($)(1)
- ----------------------------------- ---------- ----------- ----------- ---------- -----------
W.C. King.......................... 3,000 100% 8.00 5/22/05 $14,322
- -------------------------
(1) Based on the Black-Scholes option valuation model. The actual value, if any,
an executive may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised, so that there is no
assurance the value realized will be at or near the value estimated by the
Black-Scholes model. The assumptions underlying the Black-Scholes model
include (i) an expected volatility of .42 based upon the prior ten years of
month-end closing stock prices of the Common Stock, (ii) a risk-free rate of
return of 6.61%, which approximates the 10-year Treasury Bond rate, and
(iii) a ten year period from time of grant until exercise.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
The following table shows aggregate option exercises in the last fiscal
year and fiscal year-end option values for the executive officers included in
the Summary Compensation Table who were executive officers at the end of 1995.
In 1995, no other executive officer of the Corporation who was such at the end
of the year earned more than $100,000 in total 1995 annual salary and bonus and
also received stock options.
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE YEAR-END(#) YEAR-END($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------- ----------- -------- ------------- -------------
W.C. King.................................... 0 0 0/3,000 0/0
R. M. Currie................................. 0 0 2,000/3,000 0/0
G. J. Israel................................. 0 0 4,000/6,000 0/0
J. F. Schatt................................. 0 0 2,000/3,000 0/0
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SHAREHOLDERS' ADVISORY COMMITTEE PROPOSAL
THE FOLLOWING PROPOSAL HAS BEEN INCLUDED IN THIS PROXY STATEMENT PURSUANT
TO RULE 14A-8 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE BOARD OF
DIRECTORS OF DETREX BELIEVES THE PROPOSAL IS UNNECESSARY, INEQUITABLE AND
WASTEFUL. THE BOARD OF DIRECTORS AND MANAGEMENT STRONGLY RECOMMEND THAT ALL
SHAREHOLDERS VOTE THEIR SHARES AGAINST THIS PROPOSAL AT THE ANNUAL MEETING.
The Proposal
RESOLVED, that the stockholders of Detrex Corp. Inc. add the following as
Section 12, ARTICLE II of the Corporation's By-Laws to establish a Stockholders'
Advisory Committee:
Section 12. Stockholders' Advisory Committee. The Corporation shall have a
Stockholders' Advisory Committee ("Committee") to advise the Board of
Directors (the "Board") on the views and interests of stockholders. A
majority of the entire Board shall meet with the Committee on a quarterly
basis. The Committee shall serve in an advisory capacity only. The
Committee shall serve without cost to the Corporation, except that the
Committee shall be reimbursed for normal travel if approved by the Board.
The Committee shall be composed of (a) one designee from each of the five
stockholders that, as of the immediately preceding record date,
beneficially own the greatest number of shares of the Corporation's common
stock and that elect to join the Committee ("Largest Stockholder Members")
and (b) two additional individual stockholders or their designees
("Individual Stockholder Members"), elected by a majority vote of the
Largest Stockholder Members. Largest Stockholder Members and Individual
Stockholder Members (collectively "Members") shall be nominated by
submitting, in writing, to the Secretary of the Corporation within 10 days
following each annual meeting of stockholders, the designee's name and
proof of the nominating holders' beneficial ownership. Members must
beneficially own or represent beneficial owners of at least 1,000 shares of
the common stock of the Corporation; no officer or director of the
Corporation may be a Member; no Member may serve more than three
consecutive years; vacancies shall not be filled except during
reconstitution of the Committee.
The Board shall ensure the formation of the Committee, and its annual
reconstitution, within 45 days after each annual meeting of stockholders.
The above proposal was submitted to Detrex for inclusion in this Proxy
Statement by Gerald B. Rivlin, 1404 Blackheath, Riverwoods, Illinois 60015 on
November 17, 1995, who subsequently advised Detrex that as of November 27, 1995
he held 14,500 shares of Detrex common stock.
GERALD B. RIVLIN'S STATEMENT IN SUPPORT OF THE PROPOSAL
A Stockholders' Advisory Committee would provide an organized forum to
allow stockholders to regularly express their views to the Board. Such a forum
is particularly warranted at this time due to the following set of circumstances
affecting the interest of all stockholders:
The book value and price value have eroded to levels that for all practical
purposes would present the appearance of financial difficulty. The company has
had frequent changes of management and, as of the present, has not established
permanent full time management. The above Committee would help to tackle the
numerous problems of the corporation and share responsibility for the
rejuvenation of the corporation.
DETREX STATEMENT IN OPPOSITION TO THE PROPOSAL
THE BOARD OF DIRECTORS OF DETREX BELIEVES THAT THE PROPOSAL IS UNNECESSARY
AND INEQUITABLE AND COULD RESULT IN A WASTE OF CORPORATE ASSETS. THE BOARD OF
DIRECTORS AND MANAGEMENT STRONGLY RECOMMEND THAT SHAREHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors is elected by all shareholders and includes several
individuals who have significant holdings of Detrex common stock. The Board is
entrusted by shareholders to exercise its independent business judgment to see
that the business and affairs of Detrex are managed for the benefit of ALL
shareholders. Management communicates to all shareholders on a regular basis and
has always encouraged shareholders to
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communicate their views to management and to attend all shareholder meetings
where they can express their views in person. The Detrex management team is the
strongest it has been in many years. The Chairman and Chief Executive Officer
and the newly elected President and Chief Operating Officer both have
outstanding business histories with substantially larger companies. They will
continue to consider carefully all views expressed by shareholders.
The Board of Directors believes that the proposed committee would
unnecessarily complicate the information flow between management and
shareholders. The proposed committee would divert the Board's attention from the
oversight of Detrex to the demands of a few self-interested shareholders who,
unlike the Board, would have no fiduciary responsibilities to the shareholders.
Moreover, the legality of the proposed committee is unclear. Detrex's counsel
has reviewed Michigan law and has not found any direct support for the formation
of such an unusual committee.
If the proposal is adopted, the Board would be required to meet with the
proposed committee on a quarterly basis and Detrex would be required to
reimburse the committee for travel expenses if approved by the Board. The
proposal does not limit the number of meetings which the committee may conduct.
As has previously been reported to the shareholders, Detrex has undertaken
substantial measures in an attempt to streamline its operations, and the Board
does not believe the additional expense and use of human resources contemplated
by this proposal would be justified. Since the committee would have no fiduciary
responsibility to the shareholders, there could be no assurance that such
expense and use would benefit shareholders in general.
The Board also believes that the proposed committee would unfairly
discriminate between shareholders by creating an information flow which would
only be available to a few large shareholders, one or more of whom could have
special interests or motives contrary to the interests of the shareholders in
general.
Finally, this proposal is almost identical to a proposal defeated by a
substantial majority of shares at the Detrex 1992 annual meeting. Thus Detrex
shareholders, by a large majority, rejected the creation of a shareholders
advisory committee.
In summary, the Board of Directors strongly believes that the proposed
committee would unfairly and wastefully allocate Detrex's human and financial
resources for the benefit of only a few self-interested shareholders.
For the reasons stated above, the Board of Directors and Management
strongly recommend that all shareholders vote their shares AGAINST this
proposal.
The affirmative vote of a majority of Detrex common stock issued and
outstanding and entitled to vote at the Annual Meeting is required for the
approval of this proposal.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, certified public accountants, have audited the
accounts of the Corporation for over 36 years and have been selected by the
Corporation to continue in that capacity during 1996. This selection was
approved by the Audit Committee and by the Board of Directors.
Deloitte & Touche LLP plans to have a representative attend the Annual
Meeting who will be available to respond to appropriate questions and who will
have the opportunity to make a statement if the representative desires to do so.
SOLICITATION OF PROXIES
The expenses in connection with the solicitation of the enclosed form of
proxy, including clerical work, printing and postage, will be borne by the
Corporation. In addition to the use of the mails, directors, officers, or
employees of the Corporation or its subsidiaries may make solicitations in
person or by telephone without special compensation. The Corporation has
retained Corporate Investor Communications, Inc. to assist in the
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solicitation of proxies at an estimated cost of $1,500 plus reimbursement of
reasonable expenses. The Corporation will reimburse custodians, nominees or
other persons for their out-of-pocket expenses in sending proxy material to
beneficial owners.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Secretary, Detrex Corporation, P.O. Box 5111,
Southfield, Michigan 48086-5111 no later than November 25, 1996.
AS TO OTHER MATTERS WHICH
MAY COME BEFORE THE MEETING
The Board of Directors does not intend to bring any other matters before
the meeting and has not been informed of such an intention by any other person.
However, if any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of proxy to vote said
proxies in accordance with their judgment on such matters.
It is important that the proxies be returned promptly. Therefore,
shareholders are requested to execute and return the enclosed proxy to which no
postage need be affixed if mailed in the United States.
By Order of the Board of Directors
ROBERT M. CURRIE
Secretary
Dated: March 25, 1996
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REVOCABLE PROXY
DETREX CORPORATION
24901 NORTHWESTERN HIGHWAY, SUITE 500, SOUTHFIELD, MICHIGAN 48075
ANNUAL MEETING APRIL 25, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT A. EMMETT, III, BENJAMIN W. McCLEARY and ARBIE R. THALACKER, and each of them, with power of
substitution to each, proxies of the undersigned, to vote at the Annual Meeting of Shareholders of Detrex Corporation (the
"Corporation") to be held on the 25th day of April, 1996, and at any and all postponements and adjournments of said meeting, all of
the shares of the stock of the Corporation which the undersigned may be entitled to vote with all the powers the undersigned would
possess, if then and there personally present.
The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or act with respect to such shares and hereby
ratifies and confirms all that said proxies, their substitutes or any of them may lawfully do by virtue hereof.
This proxy may be revoked at any time prior to said meeting and the undersigned reserves the right to attend such meeting and vote
said stock in person.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders, dated March 25, 1996, the Proxy
Statement furnished herewith and the Annual Report of the Corporation for 1995.
_____________________________________________________________________________
- ---------------------- /PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE./----------------------------
---------------------------------------------------------------------------
Please sign this Proxy exactly as your name appears hereon. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a
corporation, this signature should be that of an authorized officer who should state his or her title.
- ----------------------------------------------------------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________________________________ __________________________________________________
______________________________________________________ __________________________________________________
______________________________________________________ __________________________________________________
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE With- For All
For held Except
UNLESS OTHERWISE SPECIFIED, THE SHARES REPRESENTED 1.) Election of Directors / / / / / /
BY THIS PROXY SHALL BE VOTED "FOR" ITEM 1 AND
"AGAINST" ITEM 2. THIS PROXY WILL BE VOTED IN THE Directors of the First Class:
DISCRETION OF THE PROXIES NAMED ON THE REVERSE SIDE JOHN F. MANGOLD AND WILLIAM C. KING
WITH RESPECT TO ANY OTHER MATTERS WHICH MAY Director of the Third Class:
PROPERLY COME BEFORE THE MEETING AND ANY POSTPONEMENTS Thomas E. Mark
OR ADJOURNMENTS THEREOF.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE FOR ITEM 1.
RECORD DATE SHARES:
______________________________________________________ ________________________________________________________
To withhold authority for an individual nominee, check
the box entitled For All Except and write that nominee's
name in the space above.
REGISTRATION
For Against Abstain
____________________________________________________ 2.) Individual Shareholder proposal
to amend the Bylaws to create a / / / / / /
Shareholders Committee.
______________
Please be sure to sign and date this Proxy. Date _____________ THE BOARD OF DIRECTORS RECOMMENDS THAT
_________________________________________________________ SHAREHOLDERS VOTE AGAINST ITEM 2.
_____Shareholder sign here _____Co owner sign here______ Mark box at right if comments or address change
have been noted on reverse side of this card. / /
DETACH CARD