<PAGE> 1
DETREX CORPORATION
24901 NORTHWESTERN HIGHWAY
SUITE 500
SOUTHFIELD, MICHIGAN 48075
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1995
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of DETREX
CORPORATION will be held on Thursday, the 27th day of April, 1995 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 two directors;
(2) The transaction of such other business as may properly come before the
meeting and any adjournments or postponement 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 24, 1995 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 21, 1995
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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 27, 1995 (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 proxy granted may be revoked by the shareholder by a later dated
proxy, by written revocation addressed to the Secretary of the Company 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 21, 1995. The
Corporation's principal offices are located at 24901 Northwestern Highway, Suite
500, Southfield, Michigan 48075.
Only stockholders of record at the close of business on February 24, 1995
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 the 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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RESPECTING THE 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. The number of Directors is now fixed at
seven.
The present terms of the two Directors of the Third Class, Bruce W. Cox and
John D. Withrow, expire at the Annual Meeting.
At this Annual Meeting, two directors, designated as Directors of the Third
Class, will be elected to serve for a term of three years and until their
successors have been elected and qualify. 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 Third Class:
Bruce W. Cox
John D. Withrow
Both of the nominees previously have been elected by the shareholders.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 6, 1995, the amount of the
Company's common stock beneficially owned by each of its Directors and nominees
for Director, each Executive Officer named in the Summary Compensation Table,
and all Directors, nominees for Director and Executive Officers as a group:
<TABLE>
<CAPTION>
TOTAL SHARES PERCENT OF
NAME BENEFICIALLY OWNED(1) CLASS
------------------------------------------------------------ --------------------- ----------
<S> <C> <C>
John D. Withrow............................................. 4,000(2) *
Bruce W. Cox................................................ 64,290(2) 3.9%
John F. Mangold............................................. 4,500(2) *
Joseph L. Wenzler........................................... 15,000(2) *
Robert A. Emmett III........................................ 42,642(2)(3)(4) 2.6%
Benjamin W. McCleary........................................ 4,500(2) *
Arbie R. Thalacker.......................................... 31,500(2)(3) 1.9%
Gerald J. Israel............................................ 4,000(2) *
Robert M. Currie............................................ 1,000(2) *
All Executive Officers, Directors and Nominees
for Director as a Group................................... 171,432(2) 10.5%
</TABLE>
-------------------------
* Less than 1%
(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, 1995, as follows: Messrs. Emmett, McCleary, Thalacker, Mangold, Withrow
and Cox, 4,000 shares each; Mr. Wenzler, 15,000 shares; Mr. Israel, 4,000
shares; and Mr. Currie, 1,000 shares.
(3) Mr. Arbie R. Thalacker and Mr. Robert A. Emmett, III are first cousins.
(4) Included in the shares reported for Mr. Emmett are 1,000 shares of Common
Stock owned jointly with his wife, 11,189 shares of Common Stock owned by
his wife, 100 shares of Common Stock owned by his minor son, and 11,864
shares of Common Stock held by Mr. Emmett as trustee.
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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:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION DURING LAST 5 YEARS
----------------------- --- -------- --------------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR DIRECTOR OF THE THIRD CLASS
WHOSE TERMS OF OFFICE WILL EXPIRE IN 1995
JOHN D. WITHROW........ 62 1993 Consultant to Lectron Products since December, 1994 and
President of Lectron Products from August, 1989 to
December, 1994.
BRUCE W. COX........... 66 1968 President of B.W. Cox Company, manufacturers
representative, N. Canton, Ohio.
DIRECTORS OF THE SECOND CLASS
WHOSE TERMS OF OFFICE WILL EXPIRE IN 1997
ROBERT A. EMMETT,
III.................. 51 1984 Partner, Reed Smith Shaw & McClay, attorneys,
Washington, D.C.
BENJAMIN W. MCCLEARY... 50 1990 Partner, McFarland Dewey & Co., investment bankers, New
York, New York.
ARBIE R. THALACKER..... 59 1980 Partner, Shearman & Sterling, attorneys, New York, New
York.
DIRECTORS OF THE FIRST CLASS
WHOSE TERMS OF OFFICE WILL EXPIRE IN 1996
JOHN F. MANGOLD........ 68 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, division of Combustion Engineering, Inc.
JOSEPH L. WENZLER...... 54 1993 President and Chief Executive Officer of the
Corporation; President and Chief Executive Officer of
Heartland Industries, 1990 to 1992; prior to that time
Mr. Wenzler was the President and Chief Executive
Officer of Akzo Coatings, Inc.
</TABLE>
Mr. Wenzler filed for bankruptcy under the Federal bankruptcy laws in April
1993 and was granted a discharge in October 1993. Mr. Wenzler sought protection
under the bankruptcy laws as a result of his having guaranteed the indebtedness
of two small manufacturing companies which operated during the period 1983 to
1989. Mr. Wenzler was not active in the day-to-day management of either company
and was otherwise employed as the President and CEO of unrelated companies.
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, Chairman of the Board of the Corporation, is a
member of the firm of Shearman & Sterling, attorneys, New York, New York.
Shearman & Sterling rendered legal services to the
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Corporation during 1994 and it is anticipated that the firm will render legal
services to the Corporation during 1995.
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 1994 and it is
anticipated that the firm will render legal services to the Corporation during
1995.
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 1994 were John F. Mangold, John
D. Withrow and Arbie R. Thalacker. Mr. Mangold served as Chairman of the Audit
Committee. 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 1994 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 Compensation Committee's functions
are to review and recommend to the Board of Directors the salaries and other
compensation of all officers of the Corporation.
The Board of Directors does not have a Nominating Committee.
During the fiscal year ended December 31, 1994, the Board of Directors held
twelve 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 THIRD CLASS.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consisted in 1994 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 granting options under the 1993 Stock Option Plan and 1994
Stock-Based Cash Incentive Plan.
The Committee did not grant during 1994 any additional stock options under
the 1993 Stock Option Plan or any additional units under the 1994 Stock-Based
Cash Incentive Plan.
The Committee reviewed in September 1994 a report prepared by the
Corporation's outside compensation consultant (the "Consultant's Report"). The
Consultant's Report reviewed the compensation and benefit plans for the
Corporation's senior employees, including the Officers. The Consultant's Report
compared the Corporation's compensation levels (including benefits) with similar
sized companies in the chemical industry and other companies in the Detroit
area. The Consultant's Report recommended that the Corporation institute formal
short and long term incentive programs. The Committee after much discussion and
review recommended to the Board that any action on such plans be deferred until
such time as the Corporation returned to an acceptable level of profitability.
In accordance with the Corporation's Performance Review and Salary
Administration program, Management recommended that certain Officers' and other
senior employees' base
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salary levels be adjusted upwards by 4 to 6% based on the most recent
performance review. The Committee recommended that the Board approve
management's recommendation for 1994, but that salary levels be held constant
during 1995. The Board approved the Committee's recommendations.
The Corporation's income in 1994, excluding the $8.5 million addition to
the Environmental Reserve, was approximately break-even. While this level of
performance did not warrant incentive compensation on a corporate wide basis,
the Committee and management felt that the employees of divisions or
subsidiaries which reported profitable operations in 1994 that were
substantially above their 1994 plan should receive some recognition.
Consequently, the payment of $18,993 in cash bonuses to 40 employees of PIFCO
and Seibert-Oxidermo was recommended to and approved by the Board. In addition,
as indicated on the Summary Compensation Table, Mr. Porter received a $10,000
bonus in accordance with his employment agreement.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Joseph L. Wenzler has served as President and Chief Executive Officer
of the Corporation since January 15, 1993. Under the terms of his employment
agreement (described under "Employment and Other Agreements"), Mr. Wenzler is
receiving a base salary of $205,000 per year. The Committee reviewed Mr.
Wenzler's performance for 1994. Areas of review included the financial
performance of the Corporation, the strategic direction of the Corporation and
his overall leadership of the Corporation. Based on this review and in light of
the Corporation's financial performance during 1994, the Committee recommended
to the Board that there be no change in his base compensation and that he
receive no incentive compensation (cash or stock-based) for 1994.
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 1994 as
described under "Certain Business Relationships". Robert A. Emmett, III is a
member of the firm of Reed Smith Shaw & McClay, attorneys, Washington, D.C.
which rendered legal services to the Corporation during 1994 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 $100,000 in total
annual salary and bonus.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------------------
PAYOUTS
--------------------
AWARDS LONG
ANNUAL COMPENSATION ---------------------- TERM
----------------------------------- RESTRICTED INCENTIVE
NAME AND PRINCIPAL SALARY BONUS OTHER STOCK OPTIONS PLAN ALL
POSITION YEAR ($) ($) ($) ($) (#) ($) OTHER
------------------------- ---- ------- ------ ------ ----------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. L. Wenzler............ 1994 205,000
President and CEO 1993 197,904 7,000 36,695(1) 75,000
1992
G. J. Israel............. 1994 129,615
Vice President, 1993 102,885 4,500 10,000 (2)
Treasurer
and CFO 1992
D. R. Crandell........... 1994 107,387
Vice President, 1993 97,923 2,400 (2)
Commercial Development 1992 76,310
R. M. Currie............. 1994 125,000 (2)
General Counsel and 1993 54,446(3) 600 5,000
Secretary 1992
A. E. Porter............. 1994 102,652 10,000 (2)
Vice President, 1993 64,246 5,000
Operations 1992
</TABLE>
-------------------------
(1) Mr. Wenzler's "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.
(2) On December 20, 1993 Mr. Israel, Mr. Crandell, Mr. Currie and Mr. Porter
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, 1994 did not exceed the initial value of the
Share Units.
(3) Mr. Currie was hired by the Corporation effective July 16, 1993. Mr. Currie
was named Secretary of the Corporation in 1994.
(4) Mr. Porter was hired by the Corporation effective March, 1993.
The Corporation has a defined benefit 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 annual
contribution to the Retirement Plan is determined for the total of all
participants covered by such Retirement 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 Retirement Plan. Of the
current annual compensation reported in the Summary Compensation Table above for
all participants, approximately 95% 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 1994. 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 1995(1)
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE ANNUAL --------------------------------------------
COMPENSATION(2) 10 YEARS 20 YEARS 30 YEARS 40 YEARS
---------------------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 75,000............................................... 9,092 18,183 27,275 37,805
$100,000............................................... 12,842 25,683 38,525 52,805
$125,000............................................... 16,592 33,183 49,775 67,805
$150,000............................................... 20,342 40,683 61,025 82,805
$175,000............................................... 20,342 40,683 61,025 82,805
$200,000............................................... 20,342 40,683 61,025 82,805
$225,000............................................... 20,342 40,683 61,025 82,805
$250,000............................................... 20,342 40,683 61,025 82,805
</TABLE>
-------------------------
(1) Based on the Social Security Law as in effect on January 1, 1995 and the
Retirement Plan formula in effect on January 1, 1995.
(2) 1995 Internal Revenue Code Section 415 limit is $120,000. 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 individuals named in the Summary Compensation Table
were respectively as follows: J.L. Wenzler 2 years and $201,452; G.J. Israel 2
years and $116,250; D.R. Crandell 3 years and $93,873; R.M. Currie 2 years and
$89,732; A.E. Porter 2 years and $85,936.
EMPLOYMENT AND OTHER AGREEMENTS
On June 23, 1993 the Corporation entered into an employment agreement with
Robert M. Currie, General Counsel of the Corporation, effective July 16, 1993.
Mr. Currie was named Secretary of the Corporation in 1994. The employment
agreement has a three year term and will automatically be extended for
additional one year periods unless earlier terminated. The agreement provides
for a base salary at the initial rate of $125,000 per year and Mr. Currie will
be afforded the opportunity to earn an annual bonus. The agreement also provides
for medical benefits, life insurance, and full vesting in the Corporation's
pension plan after five full years of employment. Under the agreement Mr. Currie
also received options to purchase 5,000 shares of Detrex Corporation common
stock at an exercise price of $9.50 per share. The options are exercisable in
five equal annual installments commencing on the effective date of Mr. Currie's
employment with the Corporation. In the event of a change in control of the
Corporation (as defined in the 1993 Stock Option Plan), the options will become
exercisable with respect to all 5,000 shares of Common Stock. Unexercised
options expire July 15, 2003 unless Mr. Currie's full time employment with the
Corporation (as defined in the 1993 Stock Option Plan) is earlier terminated.
The employment agreement further provides for payment of 18 months of severance
pay to Mr. Currie in the event the Corporation terminates his employment for any
reason other than "cause", as defined in the agreement.
On March 23, 1993 the Corporation entered into an employment agreement with
Anthony E. Porter, Division General Manager. Mr. Porter was named Vice
President, Operations in 1994. The agreement provides for a base salary at an
initial rate of $96,000 per year and provides that Mr. Porter will be afforded
an opportunity to earn an annual bonus. The agreement further provides for a
$5,000 signing bonus and a minimum bonus for 1993 performance of $10,000 to be
paid in 1994. The employment agreement also provides for medical benefits, life
insurance and full vesting in the Corporation's pension plan after five full
years of employment. The agreement also provides for the payment of three months
of severance pay if the Corporation terminates Mr. Porter'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.
On February 22, 1993 the Corporation entered into an employment with Gerald
J. Israel, Chief Financial Officer and Vice President, Finance. Mr. Israel was
also elected Treasurer in 1994. The employment agreement provides for a base
salary at an initial rate of $125,000 and provides that Mr. Israel will be
afforded the opportunity to earn an annual bonus. The agreement provides for
medical benefits, life insurance, and full
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vesting in the Corporation's pension plan after five full years of employment.
Under the agreement, Mr. Israel also received options to purchase 10,000 shares
of Detrex Corporation common stock at an exercise price of $9.00 per share. The
options are exercisable in five equal annual installments commencing on the
effective date of Mr. Israel's employment with the Corporation. In the event of
a change in control of the Corporation (as defined in the 1993 Stock Option
Plan), the options will become exercisable with respect to all 10,000 shares of
Common Stock. Unexercised options expire February 23, 2003, unless Mr. Israel's
full time employment is earlier terminated (as defined in the 1993 Stock Option
Plan). The employment agreement further provides for payment of three months of
severance pay 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.
In mid-January, 1993 the Corporation entered into an employment agreement
with Mr. Wenzler, President and Chief Executive Officer of the Corporation,
effective as of January 1, 1993. The agreement has a five year term and will
automatically be extended for additional one year periods unless earlier
terminated. The Corporation also entered into a stock option agreement with Mr.
Wenzler.
The employment agreement provides for a base salary at the initial rate of
$205,000 per year. Under the agreement Mr. Wenzler will be afforded an
opportunity to earn an annual bonus in the range of 10%-15% of his annual rate
of salary if applicable performance targets are achieved. Under the employment
and stock option agreements Mr. Wenzler is also entitled to options to purchase
75,000 shares of Common Stock at an exercise price of $9.00 per share. With
respect to 37,500 shares, the options are exercisable in five equal annual
installments, commencing January 15, 1994. With respect to the remaining 37,500
shares, the options will become exercisable in three installments: one-third
upon the Corporation achieving annual earnings per share of $2.00, one-third
upon achieving annual earnings per share of $3.00, and one-third upon achieving
annual earnings per share of $4.00. No more than one-third of the options for
these shares can become exercisable in any fiscal year. In the event of a change
in control of the Corporation (as defined in the agreement), the options will
become exercisable with respect to all 75,000 shares of Common Stock, subject to
certain limitations. Unexercised options expire January 15, 2003 unless Mr.
Wenzler's full time employment with the Corporation (as defined in the
agreement) is earlier terminated. If the termination is for Cause (as defined in
the agreement), all unexercised options shall expire immediately. If termination
is due to Retirement or Disability (as such terms are defined in the employment
agreement) or death, the vested portion of the options shall be exercisable for
one year after the date of termination. If termination is due to any other
reason, the vested portion of the options shall be exercisable for ninety days
after the date of termination. The Compensation Committee of the Corporation may
extend the post-termination exercise period.
The employment agreement also provides for reimbursement to Mr. Wenzler of
reasonable moving and relocation expenses, which were paid in 1993 and totalled
$36,695. The employment agreement further provides for supplemental pension
benefits in an amount equal to five years of additional Credited Service under
the Corporation's Retirement Plan at such time as Mr. Wenzler becomes entitled
to a non-forfeitable pension benefit under the Retirement Plan (generally after
five years of continuous employment by the Corporation). If Mr. Wenzler's
employment is terminated otherwise than for Disability or Cause (as such terms
are defined in the employment agreement) or Mr. Wenzler resigns for Good Reason
(as defined in the employment agreement) prior to the third anniversary of the
effective date of the agreement, Mr. Wenzler will become entitled to a severance
allowance equal to two years of base salary payable at the times and in the
manner provided in the agreement. If such resignation occurs on or after the
third anniversary of the effective date of the agreement, Mr. Wenzler will be
entitled to one year of base salary.
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 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 of the Corporation. Subject to certain
limits set forth in the Plan, the value of Share Units will be paid in cash to
participants following the end of the Performance Cycle. The
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initial value of the Share Units under the 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 Plan is administered, and share units are granted under the Plan, by
the Compensation Committee. The Chief Executive Officer is not eligible for
grants of share units under the Plan.
In December, 1993 the Compensation Committee authorized the award of 58,950
Share Units to 87 officers and other key employees of the Corporation, out of a
maximum of 60,000 Share Units available under the Plan. Of these, 55,000 Share
Units were awarded to 83 employees of the Corporation. As of March 1, 1995, 65
of these employees were still employed with the Corporation and held 48,500
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 Appreciation Value of the Share Units calculated using the value of the
Corporation's Common Stock as of the date of termination of employment unless,
in the event of disability, the Committee decides to permit the participant to
continue to hold the Share Units for a longer period as provided in the Plan. In
the event of a Change in Control of the Corporation (as defined in the Plan)
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 Corporation's Common 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
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
1994.
A Stock Option Plan for Outside Directors was approved by the shareholders
at the 1993 Annual Meeting. Under the Plan, options to purchase 1,000 shares
(with an exercise price of $11.25) were granted on May 1, 1994 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, 1995. The
options will terminate at the earlier 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, and 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 of the Corporation 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 Corporation's Common
Stock, NASDAQ Index and the Chemicals-Specialty Index on December 31, 1989, and
reinvestment of all dividends). The Common Stocks of the following companies are
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
<TABLE>
<CAPTION>
MEASUREMENT PERIOD CHEMICALS-
(FISCAL YEAR COVERED) DETREX CORP. SPECIALTY NASDAQ INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 70 105 85
1991 40 154 136
1992 43 169 159
1993 62 174 181
1994 55 164 177
</TABLE>
* $100 invested on 12/31/89 in stock or index including reinvestment of
dividends. Fiscal year ending December 31.
11
<PAGE> 12
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 Chief Executive Officer and the
other named executive officers shown in the Summary Compensation Table. In 1994,
no other executive officer of the Corporation who was such at the end of the
year earned more than $100,000 in total 1994 annual salary and bonus and also
received stock options.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE YEAR-END(#) YEAR-END($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---------------------------------------- ----------- -------- ------------- --------------
<S> <C> <C> <C> <C>
J.L. Wenzler............................ 0 0 7,500/67,500 $9,375/$84,375
R.M. Currie............................. 0 0 1,000/ 4,000 $ 750/$ 3,000
G.J. Israel............................. 0 0 2,000/ 8,000 $2,500/$10,000
</TABLE>
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 1995. 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 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 1996 Annual
Meeting must be received by the Secretary, Detrex Corporation, P.O. Box 5111,
Southfield, Michigan 48086-5111 no later than November 21, 1995.
12
<PAGE> 13
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 21, 1995
13
<PAGE> 14
<TABLE>
<S> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE With- For All
For hold Except
UNLESS OTHERWISE SPECIFIED ABOVE, THE SHARES 1.) Election of Directors / / / / / /
REPRESENTED BY THIS PROXY SHALL BE VOTED FOR
ITEM 1. THIS PROXY WILL BE VOTED IN THE Directors of the Third Class:
DISCRETION OF THE PROXIES NAMED ABOVE WITH Bruce W. Cox ____________
RESPECT TO ANY OTHER MATTERS WHICH MAY PROPERLY John D. Withrow _____________
COME BEFORE THE MEETING AND ANY POSTPONEMENTS
OR ADJOURNMENTS THEREOF.
RECORD DATE SHARES: THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE FOR ITEM 1.
Mark box at right if comments or address change / /
have been noted on the reverse side of this card.
PLEASE VOTE, SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
Note: Please sign exactly as name appears hereon. If the
stock is held in the name of two or more persons, each
Date _________ should sign. Executors, administrators, trustees,
Please be sure to sign and date this Proxy. guardians, attorneys and corporate officers should add
their titles. If a corporation, sign in full corporate
name by president or other authorized officer. If a
________Shareholder sign here ______Co-owner sign here _____ partnership, sign in partnership name by authorized person.
</TABLE>
<PAGE> 15
REVOCABLE PROXY
DETREX CORPORATION
24901 NORTHWESTERN HIGHWAY, SUITE 500, SOUTHFIELD, MICHIGAN 48075
ANNUAL MEETING APRIL 27, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT A. EMMETT, III, BENJAMIN W. McCLEARY
and JOHN F. MANGOLD, 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 27th day of April,
1995 and at any and all postponements or adjournments of said meeting, all of
the shares of 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, and especially (but without limiting the general authority
and power hereby given) to vote.
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 Shareholders, dated March 21, 1995, the Proxy Statement furnished herewith
and the Annual Report of the Corporation for 1994.
Comments/Address Changes: _______________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(CONTINUED FROM OTHER SIDE)
