<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ENGELHARD CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ENGELHARD CORPORATION
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $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:*
(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
LOGO OF ENGELHARD 101 WOOD AVENUE, ISELIN, NEW JERSEY 08830
ORIN R. SMITH
President and
Chief Executive Officer
March 30, 1994
Dear Shareholder:
You are cordially invited to attend the 1994 Annual Meeting of Shareholders
which will be held at 10:00 a.m. on Thursday, May 5, in Auditoriums A and B,
Ground Floor, at Chase Manhattan Bank, One Chase Manhattan Plaza, New York
City. You may enter at Liberty or William Street.
The enclosed Notice and Proxy Statement contain complete information about
matters to be considered at the Annual Meeting, at which the business and
operations of Engelhard will also be reviewed. Discussions at our Annual
Meeting have generally been interesting and useful, and we hope that you will
be able to attend. If you plan to attend, please check the box provided on the
proxy card and an admission ticket will be sent to you. Only shareholders and
their proxies will be permitted to attend the Annual Meeting. If you do not
attend the Annual Meeting, you will of course be informed of the proceedings,
as in prior years, in the post- meeting report which will be sent to all
shareholders.
Whether or not you plan to attend, we urge you to complete, sign and return
the enclosed proxy card, so that your shares will be represented and voted at
the Annual Meeting.
Sincerely yours,
/S/ ORIN R. SMITH
<PAGE>
ENGELHARD CORPORATION
101 WOOD AVENUE
ISELIN, NEW JERSEY 08830
-----------------
NOTICE OF THE 1994 ANNUAL MEETING OF SHAREHOLDERS
-----------------
To our Shareholders: March 30, 1994
The Annual Meeting of Shareholders of Engelhard Corporation, a Delaware
corporation, will be held on Thursday, May 5, 1994, at 10:00 a.m., New York
City time, in Auditoriums A and B, Ground Floor, at Chase Manhattan Bank, One
Chase Manhattan Plaza, New York, New York, for the following purposes:
(1) To elect three Directors;
(2) To ratify the appointment of Coopers & Lybrand as independent public
accountants; and
(3) To transact such other business as may properly come before the
meeting.
The record date for the determination of the shareholders entitled to vote at
the meeting or at any adjournment thereof is the close of business on March 14,
1994.
A list of shareholders entitled to vote at the Annual Meeting will be open to
the examination of any shareholder, for any purpose germane to the meeting, at
the offices of the Company's Transfer Agent and Registrar, Mellon Securities
Trust Company, 120 Broadway, New York, New York 10271, during ordinary business
hours for ten days prior to the meeting.
By Order of the Board of Directors
ARTHUR A. DORNBUSCH, II
Vice President, General
Counsel
and Secretary
SHAREHOLDERS ARE URGED TO MARK, SIGN AND RETURN PROMPTLY
THE ACCOMPANYING PROXY IN THE ENCLOSED RETURN ENVELOPE
<PAGE>
ENGELHARD CORPORATION
101 WOOD AVENUE
ISELIN, NEW JERSEY 08830
-----------------
PROXY STATEMENT FOR THE 1994 ANNUAL MEETING OF SHAREHOLDERS
-----------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to shareholders on or about March 30,
1994, is solicited by the Board of Directors of Engelhard Corporation (the
"Company") for use at the Annual Meeting of Shareholders (the "Meeting") to be
held on Thursday, May 5, 1994. In case the Meeting is adjourned, the proxy will
be used at any adjournments thereof. If a proxy is received before the Meeting,
the shares represented by it will be voted unless the proxy is revoked by
written notice prior to the Meeting or by voting by ballot at the Meeting. If
matters other than those set forth in the accompanying Notice of Annual Meeting
are presented at the Meeting for action, which is not currently anticipated,
the proxy holders will vote the proxies in accordance with their best judgment.
Holders of Common Stock as of the close of business on March 14, 1994 will be
entitled to vote. On such date there were outstanding and entitled to vote
96,601,195 shares of Common Stock of the Company, each of which is entitled to
one vote with respect to each matter to be voted on at the Meeting. The
presence at the Meeting in person or by proxy of the holders of a majority of
the outstanding shares of Common Stock entitled to vote shall constitute a
quorum for the transaction of business. Proxies marked as abstaining (including
proxies containing broker non-votes) on any matter to be acted upon by
stockholders will be treated as present at the meeting for purposes of
determining a quorum but will not be counted as votes cast on such matters.
The cost of soliciting proxies in the form enclosed will be borne by the
Company. In addition to the solicitation by mail, proxies may be solicited
personally, or by telephone, by employees of the Company. The Company has also
engaged D.F. King & Co., Inc., 77 Water Street, New York, New York, to assist
in such solicitation at an estimated fee of $14,000 plus disbursements. The
Company may reimburse brokers holding Common Stock in their names or in the
names of their nominees for their expenses in sending proxy material to the
beneficial owners of such Common Stock.
<PAGE>
INFORMATION AS TO CERTAIN SHAREHOLDERS
Set forth below is certain information with respect to the only persons known
to the Company who owned beneficially more than five percent of the Company's
voting securities as of March 3, 1994:
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT
OWNED OF CLASS
------------ --------
<S> <C> <C>
Minorco.................................................. 30,637,603 31.7%(1)
9 rue Sainte Zithe, Luxembourg City,
Grand Duchy of Luxembourg
State Farm Mutual Automobile Insurance Company........... 6,447,262 6.7%(2)
One State Farm Plaza,
Bloomington, Illinois 61710
Janus Capital Corporation................................ 5,411,273 5.6%(3)
100 Fillmore Street, Suite 300
Denver, Colorado 80206
</TABLE>
- --------
(1) The Company is informed by Minorco, a company incorporated under the laws
of Luxembourg as a societe anonyme, as follows:
Minorco, through a wholly-owned subsidiary, holds 30,637,603 shares of
Common Stock of the Company, representing approximately 31.7% of the
outstanding voting securities of the Company. Shares granted to Mr.
Slack pursuant to the Company's Stock Bonus Plan for Non-Employee
Directors have been ceded to Minorco pursuant to an arrangement between
Mr. Slack and Minorco.
Minorco is an international natural resources company principally
involved in mining and the processing of gold, base metals and
industrial materials, pulp, paper, packaging and in agribusiness. The
capital stock of Minorco is owned, in part, as follows: approximately
43%, directly or through subsidiaries, by Anglo American Corporation of
South Africa Limited ("Anglo American"), a publicly held mining and
finance company, and approximately 22%, directly or through
subsidiaries, by De Beers Centenary AG ("Centenary"), a publicly held
Swiss diamond mining and investment company, and approximately 3% by
Anglo American Gold Investment Company Limited ("Amgold"), a publicly
held mining investment company. Approximately 39% of the capital stock
of Anglo American is owned, directly or through subsidiaries, by De
Beers Consolidated Mines Limited ("De Beers"), a publicly held diamond
mining and investment company. Approximately 29% of the capital stock
of Centenary and 33% of the capital stock of De Beers is owned,
directly or through subsidiaries, by Anglo American. De Beers owns
approximately 9% of Centenary. Approximately 50% of the capital stock
of Amgold is owned, directly or through subsidiaries, by Anglo
American.
2
<PAGE>
Mr. Nicholas F. Oppenheimer, deputy chairman and a director of Anglo
American, Centenary and De Beers, chairman and a director of Amgold and
a director of Minorco, and Mr. Henry R. Slack, president and chief
executive and a director of Minorco and a director of Anglo American
and Engelhard, have indirect partial interests in approximately 7% of
the outstanding shares of Minorco, approximately 8% of the outstanding
shares of Anglo American and less than one percent of the outstanding
shares of Amgold.
(2) As reported by State Farm Mutual Automobile Insurance Company and related
entities on Schedule 13G filed with the Securities and Exchange Commission
and dated January 29, 1994.
(3) As reported by Janus Capital Corporation and related entities on Schedule
13G filed with the Securities and Exchange Commission and dated February
11, 1994.
1. ELECTION OF DIRECTORS
The Board of Directors of the Company consists of three classes, Class I,
Class II and Class III, each class serving for a full three-year term. Messrs.
Antonini, Lea and Watson, are nominees for election as Class I Directors at the
Annual Meeting. Messrs. Antonini and Watson are incumbent Class I Directors and
Mr. Lea is a first time nominee to the Board of Directors. If elected, the
Class I Directors will serve three-year terms expiring in 1997. Mr. Gerard E.
Munera a Class I Director since 1991 will not stand for reelection. The Class
II Directors will be considered for reelection at the 1995 Annual Meeting. The
Class III Directors will be considered for reelection at the 1996 Annual
Meeting.
Messrs. Slack and Smith have been members of the Board of Directors since
1981, Mr. Richards since 1983, Mr. Antonini since 1985, Mr. Napier since 1986,
Mrs. Pace since 1987, Mr. LaTorre since 1990 and Messrs. Guyett and Watson
since 1991.
Directors will be elected by the affirmative vote of a majority of the votes
cast at the Meeting.
The persons named as proxies in the accompanying proxy, who have been
designated by the Board of Directors, intend to vote, unless otherwise
instructed in such proxy, FOR the election of Messrs. Antonini, Lea and Watson
as Class I Directors.
3
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES AND
DIRECTORS WHOSE TERMS CONTINUE
The following table sets forth the name and age of each nominee and Director;
all other positions and offices, if any, now held by him or her with the
Company and his or her principal occupation during the last five years.
DIRECTORS WITH TERMS EXPIRING MAY 1994 AND NOMINEES, AGES,
PRINCIPAL BUSINESS EXPERIENCE DURING THE PAST
FIVE YEARS, BOARD MEMBERSHIPS (CLASS I)
-------------------------------------------
MARION H. ANTONINI
Age 63. Chairman, President and Chief Executive Officer of Welbilt
Corporation, a food service equipment and consumer products company, since
September 1990; Chairman and Managing Director of KD Equities prior thereto.
Mr. Antonini is also a director of Vulcan Materials Company and Scientific-
Atlanta, Inc.
ANTHONY W. LEA
Age 45. Director and Member of the Executive Committee of Minorco since prior
to 1989; Finance Director thereof from September 1988 to December 1989;
Joint Managing Director thereof from January 1990 to December 1992; Director
of Anglo American Corporation of South Africa since November 1993.
DOUGLAS G. WATSON
Age 49. President of the Pharmaceuticals Division and Director of CIBA-GEIGY
Corporation since prior to 1989.
Mr. Watson is also a director of The Summit Bancorporation.
4
<PAGE>
DIRECTORS WITH TERMS EXPIRING MAY 1995, AGES,
PRINCIPAL BUSINESS EXPERIENCE DURING THE PAST
FIVE YEARS, BOARD MEMBERSHIPS (CLASS II)
---------------------------------
ROBERT L. GUYETT
Age 57. Senior Vice President and Chief Financial Officer of the Company
since September 1991; Senior Vice President and Chief Financial Officer of
Fluor Corporation prior thereto.
Mr. Guyett is also a director of Canonie Environmental Services Corp. and
Newport Corporation.
JAMES V. NAPIER
Age 57. Chairman of Scientific-Atlanta, Inc., a communications manufacturing
company, since December 1992; Chairman and President of Commercial Telephone
Group, Inc. prior thereto.
Mr. Napier is also a director of Intelligent Systems Corporation, Vulcan
Materials Company, HBO & Company, Centex Telemanagement, Inc., Rhodes, Inc.
and Summit Communications Group.
NORMA T. PACE
Age 72. Senior Advisor and Director of WEFA Group, Inc., economic
consultants, since 1992; President of Economic Consulting and Planning Inc.
prior thereto.
Mrs. Pace is also a director of Hasbro, Inc. and Georgia-Pacific Corporation.
DIRECTORS WITH TERMS EXPIRING MAY 1996, AGES,
PRINCIPAL BUSINESS EXPERIENCE DURING THE PAST
FIVE YEARS, BOARD MEMBERSHIPS (CLASS III)
---------------------------------
L. DONALD LATORRE
Age 56. Senior Vice President and Chief Operating Officer of the Company
since June 1990; Vice President of the Company and President of the Pigments
and Additives Division prior thereto.
REUBEN F. RICHARDS
Age 64. Non-Executive Chairman of the Board of the Company since prior to
1989; Chairman of the Board, Terra Industries Inc., agribusiness, from prior
to 1989; Chief Executive Officer and President thereof from prior to 1989 to
May 1991; Chairman of the Board of Minorco (U.S.A.) Inc. since May 1990 and
Chief Executive Officer and President since February, 1994.
Mr. Richards is also a director of Santa Fe Energy Resources, Inc., Ecolab
Inc., Minorco and Potlatch Corporation.
HENRY R. SLACK
Age 44. Chief Executive of Minorco since December 1992; President and a
director thereof since prior to 1989; director of Anglo American Corporation
of South Africa Limited since prior to 1989.
Mr. Slack is also a director of Terra Industries Inc.
ORIN R. SMITH
Age 58. President and Chief Executive Officer of the Company from prior to
1989.
Mr. Smith is also a director of Vulcan Materials Company, The Summit
Bancorporation, The Louisiana Land and Exploration Company and New Jersey
Manufacturers Insurance Company.
5
<PAGE>
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the following table is the beneficial ownership of Common Stock
as of March 3, 1994 for all nominees, continuing Directors, each of the
Executive Officers listed on the Summary Compensation Table and all Directors
and Executive Officers as a group. No Director or Executive Officer owns more
than 1% of the total outstanding shares (including exercisable options). All
Directors and Executive Officers as a group own approximately 2.0% of the total
outstanding shares (including exercisable options).
<TABLE>
<CAPTION>
NAME SHARES
---- ---------
<S> <C>
Marion H. Antonini................................................. 6,750
Arthur A. Dornbusch, II............................................ 114,015(1)
Robert L. Guyett................................................... 196,536(1)
L. Donald LaTorre.................................................. 374,758(1)
Anthony W. Lea..................................................... 500
James V. Napier.................................................... 6,750
Norma T. Pace...................................................... 12,131
Reuben F. Richards................................................. 6,750
Robert J. Schaffhauser............................................. 80,551(1)
Henry R. Slack..................................................... 1,687(2)
Orin R. Smith...................................................... 752,393(1)
Douglas G. Watson.................................................. 12,834
All Directors and Executive Officers as a group.................... 1,963,278(1)
</TABLE>
- --------
(1) Includes 216,563, 101,250, 90,000, 11,251, 7,502 and 535,689 shares of
Common Stock subject to options granted to Messrs. Smith, LaTorre, Guyett,
Schaffhauser, Dornbusch and all Directors and Executive Officers as a
group, respectively, under the Company's Stock Option Plan of 1981 (the
"1981 Stock Option Plan") and the Company's Stock Option Plan of 1991 (the
"Stock Option Plan", together with the 1981 Stock Option Plan, the "Stock
Option Plans"), which options may be exercised within 60 days from March 3,
1994, and also includes 2,436 shares owned by family members in which
persons in the group disclaim any beneficial interest.
(2) Excludes 548,122 shares of Common Stock in which Mr. Slack has an indirect
partial interest and in which he disclaims any beneficial interest.
6
<PAGE>
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors of the Company held a total of nine meetings during
1993. Among the standing committees of the Board of Directors are the Audit
Committee, the Compensation Committee and the Stock Option/Stock Bonus
Committee. The Board does not have a nominating committee.
The members of the Audit Committee are Mrs. Pace (Chairman), Messrs.
Antonini, Munera and Richards, all of whom are non-employee Directors. The
Audit Committee periodically reviews the Company's accounting policies,
internal accounting controls and the scope and results of the independent
accountants' audit of the Company's financial statements. The Audit Committee
held three meetings during 1993.
The members of the Compensation Committee are Messrs. Antonini (Chairman),
Napier, Richards, Slack and Watson and Mrs. Pace, all of whom are non-employee
Directors. The Compensation Committee determines the appropriate level of
compensation for the Officers and employees of the Company. The Compensation
Committee held four meetings during 1993.
The members of the Stock Option/Stock Bonus Committee are Messrs. Antonini
(Chairman), Napier, Richards, Slack and Watson and Mrs. Pace, all of whom are
non-employee Directors. The Stock Option/Stock Bonus Committee administers the
Company's stock option and stock bonus plans and determines the terms and
conditions for the issuance of stock options and stock bonus awards to the
Officers and employees of the Company. The members of the Committee are not
eligible to participate in such plans. The Stock Option/Stock Bonus Committee
held two meetings during 1993.
During 1993 all of the Directors of the Company attended all of the meetings
of the Board and meetings of committees of the Board on which they served,
except for Mr. Slack, who attended fewer than 75% of such meetings.
Directors who are not employees of the Company each received a retainer at
the annual rate of $30,000 in 1993. There was also a Chairman's fee paid in
1993 of $75,000. In addition, non-employee Directors received a $1,350
attendance fee for each Board meeting attended in 1993. During 1993, non-
employee Directors also received a $1,000 attendance fee for each committee
meeting attended; a $5,000 annual retainer for each committee on which they
served; and an additional $5,000 annual retainer for each chairman of a
committee. Directors who are employees of the Company do not receive any
Directors' fees or retainers.
Pursuant to the Company's Retirement Plan for Directors, a Director or
Director Emeritus will receive retirement benefits following his retirement as
a Director if at the time of such retirement either (i) he has six or more
years of service as a non-employee Director or (ii) his age and years of
service as a non-employee Director equal at least 65. Such retirement benefits
will be an annual
7
<PAGE>
amount equal to the annual Board retainer fee (excluding meeting and committee
fees) in effect on the date of the Director's retirement and will be payable in
equal monthly installments commencing on the first day of the month coinciding
with or next following the Director's 65th birthday or, if later, the date of
the Director's retirement and continuing until the earlier of (i) the
Director's death or (ii) the completion of payments for a period equal to the
period of the Director's service as a non-employee Director.
Pursuant to the Company's Stock Bonus Plan for Non-Employee Directors (the
"Directors Stock Bonus Plan") each person who becomes such a non-employee
Director prior to June 30, 1996 shall be awarded 5,062 shares of the Company's
Common Stock effective as of such person's election to the Board of Directors.
Such shares will vest in equal increments over a ten year period. Directors are
entitled to receive cash dividends on and to vote shares which are the subject
of an award prior to their distribution or forfeiture. Upon termination of the
Director's service as a non-employee Director, the Director (or, in the event
of his death, his beneficiary) shall be entitled to receive the shares awarded
to such Director which have tentatively vested up to the date of such
termination of service; shares may be received prior to such date if there has
been an "acquisition of a control interest".
Pursuant to the Company's Directors and Executives Deferred Compensation
Plan, the Company's Deferred Compensation Plan for Directors and the Company's
Directors Stock Bonus Plan, non-employee Directors may elect to defer payment
of all or a designated portion of their compensation for services as a
Director.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION AND CERTAIN
TRANSACTIONS
The members of the Compensation Committee are Messrs. Antonini (Chairman),
Napier, Richards, Slack and Watson and Mrs. Pace, all of whom are non-employee
directors. Messrs. Richards and Slack are the Chairman of the Board, Chief
Executive Officer and President of Minorco (U.S.A.) Inc. and the Chief
Executive, President and Director of Minorco, respectively. Minorco
beneficially owns more than five percent of the Company's voting securities.
For additional information regarding Minorco, see "Information as to Certain
Shareholders" on page 2.
The Company markets, fabricates and processes various metals, minerals and
ores acquired from numerous domestic and foreign suppliers. The Company makes
and will continue to make purchases of such materials, in the ordinary course
of its business, from entities in which it is informed Anglo American has a
material interest, upon terms which are no less favorable to the Company than
those obtainable from other sources. The Company's purchases of such materials
from all sources during 1993 approximated $1.3 billion including purchases of
approximately $229 million from entities in which the Company is informed Anglo
American has a material interest.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors and persons who own more than 10% of a
registered class of the Company's equity securities to file initial reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Such Officers, Directors and
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on a review of the copies of
such forms furnished to the Company and written representations from the
Company's Executive Officers and Directors, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis, with the exception of L. Donald LaTorre, who inadvertently failed to
report until February 1994 certain purchases prior to 1993 of the Company's
Common Stock pursuant to the Company's Dividend Reinvestment Plan.
9
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the compensation paid by the Company for
services rendered in all capacities during each of the last three fiscal years
to the Chief Executive Officer and the other four most highly compensated
Executive Officers. All share and per share data have been restated to give
effect to all relevant stock splits, the last of which occurred in September,
1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS (1)(2)
---------------------------------------- ----------------------
NAME AND OTHER ANNUAL RESTRICTED ALL OTHER
PRINCIPAL COMPEN- STOCK OPTIONS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) SATION ($) AWARD(S)($)(3) (#) ($)(4)
- ----------------------- ---- ---------- --------- ------------ -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Orin R. Smith Director, 1993 670,034 585,000 686 1,323,000 191,250
President and Chief 1992 620,000 670,000 1,265 1,674,750 225,000
Executive Officer 1991 570,000 675,000 924,000 225,000
L. Donald LaTorre, 1993 376,269 250,000 3,985 945,000 115,000 2,697
Director, Senior 1992 341,250 350,000 2,872 1,196,250 135,000 1,826
Vice President 1991 307,500 350,000 660,000 135,000
and Chief
Operating Officer
Robert L. Guyett, 1993 351,660 200,000 3,136 588,000 77,500 1,882
Director, Senior 1992 330,684 250,000 61,033(5) 747,656 90,000 741
Vice President 1991 88,987(5) 225,000 828,230 135,000
and Chief
Financial Officer
Robert J. Schaffhauser, 1993 249,696 110,000 2,785 378,000 40,000
Vice President, 1992 231,600 160,000 2,077 478,500 45,000
Corporate 1991 216,333 140,000 264,000 45,000
Development
Arthur A. Dornbusch, II 1993 233,711 100,000 2,409 329,000 26,000 2,158
Vice President, 1992 223,038 100,000 1,722 398,750 30,000 1,461
General Counsel, 1991 210,520 120,000 231,000 33,750
and Secretary
</TABLE>
- --------
(1) The Company's Key Employee Stock Bonus Plan and the Company's Stock Option
Plans provide for acceleration of vesting in the event of a "change in
control." For information on what constitutes a "change in control," see
"Employment Contracts and Change In Control Arrangements" on page 15.
(2) Currently, the Company has no Long Term Incentive Plans which are required
to be reported pursuant to the General Rules and Regulations of the
Securities and Exchange Commission.
10
<PAGE>
(3) As of December 31, 1993, Messrs. Smith, LaTorre, Guyett, Schaffhauser and
Dornbusch held 180,900, 117,900, 68,198, 44,550 and 46,500 unvested shares,
respectively, of stock which were awarded pursuant to the Company's Key
Employee Stock Bonus Plan having a market value of $4,409,438, $2,873,813,
$1,662,326, $1,085,906 and $1,133,438, respectively. The reported grants
were made in February, 1994 for services rendered during 1993. Restricted
stock awards of the Company's Common Stock granted under the Key Employee
Stock Bonus Plan vest in five equal annual installments commencing on the
first anniversary of the date of the grant. Vesting will be accelerated
upon the occurrence of a "change in control." The Company pays dividends on
restricted stock, if and to the extent paid on Common Stock generally. For
information on what constitutes a "change in control," see "Employment
Contracts and Change In Control Arrangements" on page 15.
(4) Represents interest accrued during 1992 and 1993 in excess of 120% of the
applicable federal interest rate with respect to salary and bonus
deferrals.
(5) Mr. Guyett joined the Company on September 23, 1991 and received $58,658 in
1992 pursuant to the Company's Relocation Policy in connection with his
relocation from California.
11
<PAGE>
The following table sets forth information concerning individual grants of
stock options made under the Stock Option Plan in February, 1994 for services
rendered during 1993 by each of the named Executive Officers. There were no
options granted to the named Executive Officers in fiscal 1993.
OPTION GRANTS FOR SERVICES RENDERED DURING 1993
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
- --------------------------------------------------------------------- ------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS FOR SERVICES OR BASE GRANT DATE
GRANTED RENDERED PRICE EXPIRATION PRESENT
NAME (#)(1) DURING 1993 ($/SH) DATE VALUE ($)(2)
- ---- ---------- ------------ -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Orin R. Smith........... 191,250 10% 26.88 2/3/2004 1,155,150
L. Donald LaTorre....... 115,000 6% 26.88 2/3/2004 694,600
Robert L. Guyett........ 77,500 4% 26.88 2/3/2004 468,100
Robert J. Schaffhauser.. 40,000 2% 26.88 2/3/2004 241,600
Arthur A. Dornbusch, II. 26,000 1% 26.88 2/3/2004 157,040
</TABLE>
- --------
(1) Options have a ten year term and vest in four equal annual installments
commencing on the first anniversary of the date of grant. Vesting will be
accelerated upon the occurrence of a "change in control." For information
as to what constitutes a "change in control," see "Employment Contracts and
Change In Control Arrangements" on page 15.
(2) Based on a binomial option pricing model. The model assumes: (a) an option
term of 3 1/3 years, which represents historic and anticipated exercise
trends for the named Executive Officers; (b) an interest rate that
represents the current yield curve with an upward adjustment during the
term; (c) volatility calculated using weekly stock prices for the three
years prior to the grant date; and (d) dividends at the rate of $.44 per
share (the current annual dividend rate) with an upward adjustment during
the term which represents historic trends. The Company does not believe
that the values estimated by the model will necessarily be indicative of
the values to be realized by an executive.
12
<PAGE>
The following table sets forth information concerning each exercise of stock
options during 1993 by each of the named Executive Officers and the value of
unexercised options at December 31, 1993.
AGGREGATED OPTION EXERCISES IN 1993
AND VALUES AT DECEMBER 31, 1993
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1993 (#) AT DECEMBER 31, 1993($)
------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------ --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Orin R. Smith........... 247,800 4,734,539 360,001 329,062 4,356,905 2,357,305
L. Donald LaTorre....... 70,313 1,339,448 151,875 191,250 1,646,460 1,314,956
Robert L. Guyett........ 0 0 90,000 135,000 793,755 853,740
Robert J. Schaffhauser.. 46,687 825,059 37,125 64,687 374,401 453,383
Arthur A. Dornbusch, II. 28,687 527,208 29,439 46,125 321,939 343,067
</TABLE>
13
<PAGE>
PENSION PLANS
The following table shows estimated pension benefits payable to a covered
participant at normal retirement age under the Company's qualified defined
benefit pension plan, as well as non-qualified supplemental pension plans that
provide benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits and
provide additional credited years of service, based on remuneration that is
covered under the plans and years of service with the Company and its
subsidiaries.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000.................... $10,224 $13,632 $17,040 $20,448 $23,856
100,000.................... 21,474 26,632 35,790 42,948 50,106
200,000.................... 43,974 58,632 73,290 87,948 102,606
300,000.................... 66,474 88,632 110,790 132,948 155,106
400,000.................... 88,974 118,632 148,290 177,948 207,606
500,000.................... 111,474 148,632 185,790 222,948 260,106
600,000.................... 133,974 178,632 223,290 267,948 312,606
700,000.................... 156,474 208,632 260,790 312,948 365,106
800,000.................... 178,974 238,632 298,290 357,948 417,606
900,000.................... 201,474 268,632 335,790 402,948 470,106
1,000,000.................... 223,974 298,632 373,290 447,948 522,606
1,100,000.................... 246,474 328,632 410,790 492,948 575,106
1,200,000.................... 268,974 358,632 448,290 537,948 627,606
1,300,000.................... 291,474 388,632 485,790 582,948 680,106
1,400,000.................... 313,974 418,632 523,290 627,948 732,606
1,500,000.................... 336,474 448,632 560,790 672,948 785,106
</TABLE>
A participant's remuneration covered by the Company's pension plans is his or
her average monthly earnings, consisting of base salary and regular cash
bonuses, if any (as reported in the Summary Compensation Table, except as set
forth below), for the highest 60 consecutive calendar months out of the 120
completed calendar months next preceding termination of employment. With
respect to each of the individuals named in the Summary Compensation Table on
page 10, credited years of service under the plans as of December 31, 1993 are
as follows: Mr. Smith, 22 years; Mr. LaTorre, 9 years; Mr. Guyett, 2 years; Mr.
Schaffhauser, 4 years; and Mr. Dornbusch, 17 years. Messrs. Smith, LaTorre,
Guyett, Schaffhauser and Dornbusch had $670,034, $326,269, $272,660, $249,696
and $193,711, respectively, of annual remuneration covered by the plans during
1993. Benefits shown are computed as a straight line single life annuity
beginning at age 65 and the benefits listed in the Pension Plan Table are not
subject to any deduction for Social Security or other offset amounts.
14
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
In May 1986, the Company entered into a three-year employment agreement with
Mr. Smith. Commencing May 20, 1987, and on each May 20 thereafter, Mr. Smith's
agreement shall automatically be extended for another year unless notice of the
Company's intention not to extend shall have been given in writing no later
than December 31st of the preceding year. The agreement provides for an annual
salary of not less than $400,000, an annual cash bonus as the Company, in its
sole discretion, shall determine, but not less than $216,645, and grants of
shares of the Company's Common Stock pursuant to the Key Employees Stock Bonus
Plan, then in effect, in such amounts as the Company, in its sole discretion,
shall determine; provided, however, that such annual bonus share grants may not
be less than 14,999 shares, conditioned on the Company achieving its financial
plan, as approved by the Board of Directors, for the year with respect to which
the grant is made. Such financial plan is established by the Board of Directors
in its discretion and may or may not require an improvement in the Company's
performance from the prior year. In addition, Mr. Smith is entitled to
participate in the benefit plans of the Company.
The Company's Key Employee Stock Bonus Plan and the Company's Stock Option
Plans, in which all of the Executive Officers participate, provide for the
acceleration of vesting of awards granted in the event of a change in control.
Pursuant to these plans a "change in control" shall occur if (a) twenty-five
percent or more of the Company's outstanding securities entitled to vote in the
election of directors shall be beneficially owned, directly or indirectly, by
any person or group of persons, other than the groups presently owning the
same, or (b) a majority of the Board of Directors of the Company ceases to
consist of the existing membership or successors nominated by the existing
membership or their similar successors.
REPORT ON EXECUTIVE COMPENSATION
Under the overall direction of the Compensation Committee and the Stock
Option/Stock Bonus Committee of the Board of Directors and in accordance with
the Company's Stock Option Plan and Stock Bonus Plan approved by its
shareholders, the Company has developed and implemented compensation programs
designed to:
. Attract and retain people who can build and continue to grow a
successful corporation;
. Provide incentives to achieve high levels of corporate,
business, and individual performance; and
. Maintain and enhance alignment of employee and shareholder
interests.
The Compensation and Stock Option/Stock Bonus Committees are composed
entirely of non-employee Directors individually noted as signatories to this
report.
15
<PAGE>
The Compensation Committee is responsible for overseeing the development and
for review and approval of:
. Overall compensation policy;
. Salaries for the Chief Executive Officer and for approximately
45 other senior managers worldwide; and
. Aggregate cash incentive awards for the Company and specific
individual cash awards under the annual plan for the Chief
Executive Officer and approximately 45 other senior managers
worldwide.
The Stock Option/Stock Bonus Committee is responsible for overseeing the
development and for review and approval of:
. Plan design and policies related to senior management and
employee awards of options and restricted stock; and
. Individual grants under the Stock Option Plan to the Chief
Executive Officer and approximately 60 other senior managers
worldwide and restricted stock awards under the Key Employee
Stock Bonus Plan to approximately 325 employees worldwide.
In exercising those responsibilities and in determining the compensation in
particular of Mr. Smith and in general of other senior managers individually
reviewed, the Committees examine and set:
1. Base Salary
Salaries are reviewed annually against industry practices as determined
by professional outside consultants who conduct annual surveys. The
Company's current competitive target is to pay somewhat above the median
for positions of comparable level as adjusted for company size. This
target is being achieved with the Company's senior management
population, while on average the entire salaried population has received
compensation slightly above this target. Salary structures are set each
year based on the Company's target and its actual competitive position.
There was no increase in the structure for 1994 for professional,
technical, and managerial personnel. Likewise, merit budgets are
established based on a competitive target, actual competitive position,
and the Company's desire to recognize and reward individual
contribution.
Individual adjustments are earned based on individual performance
measured against business objectives within the constraints of the
structure and the merit budget.
Mr. Smith's salary was adjusted 4.5% for 1994. Base salary is less than
one-fourth of total compensation for Mr. Smith and generally less than
one-half of total compensation for other senior management. This
reflects the Company's emphasis on non-fixed compensation which varies
with Company performance and on other equity vehicles which are closely
aligned with shareholder interests.
16
<PAGE>
2. Annual Cash Incentive Program
This program is designed to provide focus on expected annual results and
recognition of accomplishment for the year. Approximately 275 employees
are eligible to participate in the Company's program. The overall
incentive pool is not determined mathematically. It is based on
Compensation Committee judgment of the appropriate payments relative to
competitively determined "normal" or targeted incentive payments. This
judgment considers the current year's earnings performance compared with
the prior year, the earnings target for the current year, and the
economic and competitive climate. Historically, the Committee's judgment
has been to leverage the size of incentives paid such that they increase
or decrease more rapidly as performance exceeds or falls short of target
annual earnings levels.
For the year 1993, Mr. Smith received a cash incentive award of
$585,000, a decrease of $85,000 from the 1992 award and $90,000 lower
than the 1991 award. This judgment was based on an ambitious earnings
target for 1993 which was approved by the Compensation Committee in
December 1992 and which took into consideration actual 1993 earnings
performance compared with the Company's target, actual 1992 earnings and
economic and competitive conditions. Although the Company's performance
was under its highly ambitious annual earnings target in 1993, it did
attain record earnings (excluding a special charge and the cumulative
effect of an accounting change) despite generally poor world economic
conditions. As a result, average cash incentives paid were less than the
targeted incentive award (approximately 80%) throughout the Company.
While highly variable from year to year in the survey information,
senior management bonuses are above the median but well below the 75th
percentile competitive position targeted if the Company achieves
superior performance.
3. Restricted Stock
The Key Employee Stock Bonus Plan is designed to align key employee and
shareholder long term interests by providing designated employees an
equity interest in the Corporation which vests in equal amounts over a
period of five years. Approximately 325 employees participate in the
Company's plan worldwide. Eligible employees are reviewed annually for
award grants. The size of the award is determined by Stock Option/Stock
Bonus Committee judgment considering the Company's overall performance,
award history, and individual performance. Awards of restricted stock
under the Key Employee Stock Bonus Plan and stock options under the
Stock Option Plan are determined independently of each other but within
the context of a senior manager's total compensation package. The
Company targets a high position relative to the competitive sample if
the Company achieves superior performance. This weights the total
compensation package for senior managers most heavily on stock for
better alignment with shareholder interests.
For the year 1993, Mr. Smith received an award of 47,250 shares. This is
less than the shares awarded in the prior two years (as adjusted for
stock splits) because performance
17
<PAGE>
was under the ambitious earnings target. Although the Company did not
attain its highly ambitious annual earnings target in 1993, it did
attain record earnings (excluding a special charge and the cumulative
effect of an accounting change) despite generally poor world economic
conditions. Overall shares awarded were down by 26% from the excellent
1992 performance (as adjusted for the stock split).
4. Stock Options
The Stock Option Plan has been designed to link employee compensation
growth directly to growth in share price. In conjunction with restricted
stock, options are the major driver of senior management compensation
aligning their rewards with shareholder interests. Approximately 60
employees worldwide participate in the Company's Stock Option Plan.
Eligible employees are reviewed annually for grants. Options vest in
equal increments over four years.
The size of the award is determined by Stock Option/Stock Bonus
Committee judgment considering the Company's overall performance, award
history, and individual performance. Awards of stock options and
restricted stock are determined independently of each other but within
the context of a senior manager's total compensation package. The
Committee targets a high position relative to the competitive sample if
the Company achieves superior performance with the result that a
significant proportion of total compensation potential is at risk if
Company performance does not generate growth in share price.
For 1993 Mr. Smith was awarded 191,250 stock options. This is less than
the shares awarded in the prior two years (as adjusted for stock splits)
because actual performance was under the ambitious earnings target.
Although the Company did not attain its highly ambitious annual earnings
target in 1993, it did attain record earnings (excluding a special
charge and the cumulative effect of an accounting change) despite
generally poor world economic conditions. Overall options awarded were
down by 13% from the Company's excellent 1992 performance (as adjusted
for the stock split).
The Committees direct the purchase of compensation survey information from
several independent professional consultants in order to review the base,
annual cash incentive, and total compensation of Mr. Smith and other individual
senior managers and employee groups. There is some overlap with the Dow Jones
Chemicals Group used in the Performance graph. There are two key reasons for
the divergence in samples: (1) the Company generally utilizes standard surveys
in the belief that the general lack of precision inherent in survey methodology
and compensation decision making does not normally warrant the additional cost
of specialized surveys (most of the Dow Jones Chemicals Group do not
participate in the standard surveys purchased); (2) the predominant labor
markets in which the Company competes for people differ from the Dow Jones
Chemicals Group in that they also include firms in other business line
industries, e.g., metal fabrication and in geographic concentrations, e.g., New
Jersey.
18
<PAGE>
Based on the surveys and the achievements of the Company against its targets
and in the context of the economic and competitive climate, the Committees are
satisfied the Company's compensation plans meet the objectives of attracting
and retaining talent, providing incentives for superior performance, and
aligning employee and shareholder interests.
As of the time of issuing this report the Committees were still evaluating
the Company's compensation policies with respect to qualifying compensation
paid to its executive officers for deductibility under section 162(m) of the
Internal Revenue Code. The Committees believe that compensation to be paid in
1994 will not exceed one million dollars in non-excluded compensation to any of
the executives named in the Summary Compensation Table on page 10.
Although the Company did not attain its highly ambitious annual earnings
target in 1993, it did attain record earnings (excluding a special charge and
the cumulative effect of an accounting change) despite generally poor world
economic conditions. At the same time, the Company's financial condition
remained extremely strong. Total return to shareholders during the last three
years from December 31, 1990 to December 31, 1993 has significantly exceeded
both the S&P 500 and the Dow Jones Chemical Group increasing over 350% while
the Company's market capitalization has grown from $841 million to $2.339
billion.
COMPENSATION COMMITTEE
STOCK OPTION/STOCK BONUS COMMITTEE
Marion H. Antonini James V. Napier Norma T. Pace
Reuben F. Richards Henry R. Slack Douglas G. Watson
19
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* AMONG ENGELHARD CORPORATION,
S&P 500 INDEX AND DOW JONES CHEMICAL SECTOR
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1988 1989 1990 1991 1992 1993
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Engelhard Corporation................... 100 114.59 116.25 205.15 331.92 358.78
S&P 500................................. 100 131.69 127.60 166.47 179.15 197.21
Dow Jones (Chemical).................... 100 127.51 116.38 155.93 170.17 188.35
</TABLE>
--------
*Assumes $100 invested on December 31, 1988 in each referenced
group with reinvestment of dividends.
20
<PAGE>
2. APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, based on the recommendation of the Audit Committee,
voted to retain Coopers & Lybrand to serve as independent public accountants
for the year 1994. Coopers & Lybrand expects to have a representative at the
meeting who will have the opportunity to make a statement and who will be
available to answer appropriate questions.
It is understood that even if the appointment is ratified, the Board of
Directors, in its discretion, may direct the appointment of a new independent
accounting firm at any time during the year if the Board of Directors believes
that such a change would be in the best interests of the Company and its
shareholders.
The Board of Directors recommends that you vote FOR the ratification of the
appointment of Coopers & Lybrand as the Company's independent public
accountants for the year 1994.
FUTURE SHAREHOLDER PROPOSAL
The Company will not consider any shareholder proposal for inclusion in the
1995 Annual Meeting of Shareholders' proxy material unless received by the
Company not later than November 30, 1994.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors has no knowledge
of any business other than that described herein which will be presented for
consideration at the meeting. In the event any other business is presented at
the meeting, the persons named in the enclosed proxy will vote such proxy
thereon in accordance with their judgment in the best interests of the Company.
By Order of the Board of Directors
ARTHUR A. DORNBUSCH, II Vice President,
General Counsel and Secretary
March 30, 1994
21
<PAGE>
LOGO OF ENGELHARD
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT
May 5, 1994
<PAGE>
P ENGELHARD CORPORATION
R 101 Wood Avenue, Iselin, New Jersey 08830
O
X Proxy Solicited on Behalf of the Board of Directors of the Company
Y for the Annual Meeting of Shareholders' May 5, 1994
The undersigned hereby constitutes and appoints Reuben F. Richards, Orin R.
Smith and Arthur A. Dornbusch, II, and each of them, his true and lawful agents
and proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Shareholders of ENGELHARD CORPORATION to be
held at One Chase Manhattan Plaza, Ground Floor, on Thursday, May 5, 1994 at
10:00 A.M. New York City Time and at any adjournments thereof, on all matters
coming before said meeting.
(Change of Address/Comments)
Election of Directors, Nominees:
Marion H. Antonini, Anthony W. Lea and
Douglas G. Watson -------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
You are encouraged to specify your choices by marking the appropriate boxes. SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The Proxy Committee cannot vote
your shares unless you sign and return this card.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
I plan to attend
This proxy when properly executed will be voted in the the meeting.
manner directed herein by the undersigned shareholder(s).
If no direction is made, this proxy will be voted FOR
Proposals 1 and 2. [_]
1. Election of Directors (see reverse) (To withhold vote for any individual
nominee write that name below.)
------------------------------------
FOR WITHHELD
[_] [_]
2. Ratification of appointment of Coopers & Lybrand as independent public
accountants.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, upon other matters as they may properly come before the
meeting.
FOR AGAINST ABSTAIN
[_] [_] [_]
Please mark, sign and return promptly using the enclosed envelope. Executors,
administrators, trustees, etc. should give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer.
-----------------------------------
-----------------------------, 1994
SIGNATURE(S) DATED
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Dear Shareholder(s):
Enclosed you will find material relative to the Company's 1994 Annual Meeting of
shareholders. The notice of the annual meeting and proxy statement describe the
formal business to be transacted at the meeting, as summarized on the attached
proxy card.
Whether or not you expect to attend the Annual Meeting, please complete and
return promptly the attached proxy card in the accompanying envelope, which
requires no postage if mailed in the United States. As a shareholder, please
remember that your vote is important to us.
ENGELHARD CORPORATION
