SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by 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 section number 240.14a-11(c) or section
number 240.14a-12
MLX CORP.
(Name of Registrant as Specified In Its Charter)
MLX CORP.
(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:<F1>
4) Proposed maximum aggregate value of transaction.
[FN]
<F1>1 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:
<PAGE>
[DESCRIPTION]
GRAPHIC #1: Artwork: Heavy Rule Line and MLX Logo
WHERE: Located on Cover Page - Notice of Annual Meeting of Shareholders
MLX Corp
1000 Center Place
Norcross, Georgia 30093
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 4, 1994
The Annual Meeting of Shareholders of MLX Corp. will be held on May 4, 1994 at
10:00 a.m., EDT at the Georgia International Convention Center, 1902 Sullivan
Road, College Park, Georgia (adjacent to the Sheraton Gateway at the Atlanta
airport), for the following purposes:
1. To elect seven directors to hold office until the next Annual Meeting
of Shareholders or until their successors are elected and qualified.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 10, 1994, as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
By Order of the Board of Directors,
James D. Askren, II, Secretary
Norcross, Georgia
April 5, 1994
The vote of every shareholder is important, and your cooperation in returning
your executed proxy promptly will be appreciated. The proxy is revocable and
will not affect your right to vote in person if you attend the meeting. It
will, however, help to avoid added proxy solicitation costs.
<PAGE>
MLX Corp.
1000 Center Place
Norcross, Georgia 30093
PROXY STATEMENT
for Annual Meeting of Shareholders
to be held on May 4, 1994
April 5, 1994
To the Shareholders:
This Proxy Statement and the enclosed proxy, which is first being mailed to
the shareholders on approximately April 5, 1994, is furnished to you in
connection with the solicitation of proxies on behalf of the Board of
Directors of MLX Corp. ("MLX" or the "Company") to be used at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the Georgia
International Convention Center, 1902 Sullivan Road, College Park, Georgia
(adjacent to the Sheraton Gateway at the Atlanta airport), on May 4, 1994 at
10:00 a.m. EDT, and at any subsequent time which may be necessary by an
adjournment or adjournments thereof.
Proxies in proper form received by the time of the meeting will be voted as
specified. A shareholder giving a proxy may revoke it at any time before it is
exercised by filing with the Secretary of the Company a revoking instrument or
a duly executed proxy bearing a later date, or by attending the meeting and
voting in person. Shares cannot be voted at the meeting unless the holder is
present or represented by proxy.
The cost of soliciting proxies, including the preparation, assembling and
mailing of the Notice of Meeting, Proxy Statement, form of proxy and other
soliciting material, as well as the cost of forwarding such material to the
beneficial owners of the Company's Common Stock, is to be borne by the
Company. Directors, officers and employees of the Company may also solicit
proxies, but without compensation other than their regular compensation, by
further mailings, personal conversations or by telephone. The Company may
reimburse brokers and others holding stock in their names or in the names of
nominees for their reasonable out-of-pocket expenses incurred in sending the
proxy materials to principals and beneficial owners.
Each shareholder is entitled to one vote on each proposal per share of Common
Stock held as of the Record Date. In determining whether a quorum exists at
the Annual Meeting for purposes of all matters to be voted on, all votes "for"
or "against," as well as all abstentions (including votes to withhold
authority to vote in certain cases), with respect to the proposal receiving
the most such votes, will be counted. The vote required for the election of
directors is a plurality of the votes cast at an election, provided a quorum
is present. Thus, with respect to the proposal for the election of directors,
an abstention or broker non-vote will have no effect.
The Board of Directors, in accordance with the Bylaws, has fixed the close of
business on March 10, 1994, as the record date for determining the
shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. At the close of business on such date, the outstanding
number of voting securities of the Company was 2,535,950 shares of Common
Stock, $.01 par value, each of which is entitled to one vote.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Principal Shareholders. The following table lists the shareholders known to
the Company to be the beneficial owners of more than five percent of the
Common Stock of the Company as of March 10, 1994. The information concerning
beneficial ownership was obtained from the Company's records or from filings
with the Securities and Exchange Commission on Form 13D.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Names and Addresses of Beneficial Owners Beneficial Ownership Class
<S> <C> <C>
Shareholder Trusts:
Restricted Transfer Trust under Agreement
Dated October 10, 1986, as amended
("Restricted Transfer Trust") c/o MLX. 403,160(1) 15.90%
Voting Trustees under a Voting Trust Agreement
dated December 11, 1984, as amended
("Voting Trust") c/o MLX. 288,803(2) 11.39%
Other Shareholders, including shares held in
above trusts:
Three Cities Holdings Limited 851,456(3) 33.58%
c/o Craigmuir Chambers
P.O. Box 71; Road Town
Tortola
British Virgin Islands
The Equitable Life Assurance Society of
the United States 178,914(4) 7.06%
1285 Avenue of the Americas
New York, New York, 10019
Teribe Limited 136,722(5) 5.39%
c/o Craigmuir Chambers
P.O. Box 71; Road Town
Tortola
British Virgin Islands
William P. Panny
500 Beach Road, Apt. #201 134,302(6) 5.30%
Vero Beach, Florida 32960
</TABLE>
<PAGE>
(1) The shares of MLX Common Stock included in the Restricted Transfer Trust
may not be transferred until the earlier of: (1) when MLX's federal
income tax benefits are consumed or expire; (2) for such shorter period as
is permitted by applicable law without the loss of any benefit of the
federal income tax benefits; or (3) upon the termination of the Voting
Trust. The beneficiaries of the Restricted Transfer Trust control the vote
of the shares held in the Restricted Transfer Trust and the Company is the
sole trustee of the Restricted Transfer Trust. As described in Note 2
below, the Company believes the Voting Trust will soon be terminated in
accordance with its terms. Upon termination, the shares held in the trust
will be distributed to their beneficial owners, who may vote the shares at
the annual meeting of shareholders.
(2) The Voting Trustees are the record holders of 288,803 shares of Common
Stock which are held subject to the terms of the Voting Trust. The Voting
Trust is administered by four trustees ("Voting Trustees") who act by
majority vote. The trustees are William P. Panny (a former executive
officer and director of the Company), Robert P. Perkins (a former
executive officer and director of the Company), Alfred R. Glancy III (a
director of the Company), and W. John Roberts (a director of the Company).
The Voting Trust will expire on the earlier of June 30, 1994, or the date
selected by the vote of at least three of the Voting Trustees for
termination of the Voting Trust. At such time, all the shares then held in
the Voting Trust will be distributed to the beneficiaries of the Voting
Trust.
An interpleader action was filed in the U.S. District Court for the
Northern District of Georgia on October 9, 1992, by Mr. Alfred R. Glancy
III, a director of the Company, as the custodian of the shares of Common
Stock held pursuant to the Voting Trust. Mr. Glancy has requested that the
court determine whether or not the Voting Trust was effectively terminated
as a result of the actions of one of the trustees of the Voting Trust.
Upon Mr. Glancy's motion, the interpleader action was dismissed with
prejudice on March 11, 1994. Mr. Glancy has indicated that he will
distribute the trust shares to their beneficial owners, and the Company
has agreed to permit the Voting Trust to terminate. The Company agreed to
the termination of the Voting Trust prior to its scheduled expiration
(June 30, 1994) because the adoption of share transfer restrictions at
last year's annual meeting of shareholders obviated the need for the
trust.
(3) Three Cities Holdings Limited has sole and irrevocable power to vote and
dispose of 851,456 shares of Common Stock that are owned of record by the
following group of investors (the "Investor Group"): Terbem Limited
(374,244 shares -- 14.8%), Mitvest Limited (47,107 shares -- 1.9%), Tinvest
Limited (201,286 shares -- 7.9%), Bobst Investment Corp. (59,961 shares --
2.4%), and TCR International Partners, LP (168,858 shares -- 6.7%). Each
member of the Investor Group is an investment vehicle established for the
purpose of investing in securities of other enterprises in various parts
of the world, and the Investor Group acquired the shares of Common Stock
as participants in an equity portfolio fund managed by Three Cities
Holdings Limited. Three Cities Holdings Limited is the parent company of
Three Cities Research, Inc. and an affiliate of Teribe Limited. Shares
owned by Teribe Limited are not included in Three Cities Holdings
Limited's beneficial ownership. Mr. Willem F.P. de Vogel, a director of
the Company, is President of Three Cities Research, Inc., and Messrs.
Uhrig and Wagner, directors of the Company, are Managing Directors of
Three Cities Research, Inc. See Notes 5 and 6 under "Directors and
Officers." Included in Three Cities Holdings Limited's beneficial
ownership are 193,918 shares held in the Restricted Transfer Trust.
(4) Included in the Equitable Life Assurance Society of the United States
("Equitable") beneficial ownership are 107,348 shares owned directly by
Equitable and 71,566 shares owned by its wholly-owned subsidiary Equitable
Variable Life Insurance Company.
<PAGE>
(5) Included in Teribe Limiteds beneficial ownership are 111,722 shares held
in the Restricted Transfer Trust, 17,500 shares held subject to an
agreement with the Company that Teribe Limited will not dispose of its
interest in such shares until June 30, 1994, and 7,500 shares which are
not subject to any restrictions. Teribe Limited is an indirectly owned
investment subsidiary of Entreprises Quilmes S.A., a Luxembourg holding
company whose shares are listed and traded on the Paris and Luxembourg
Stock Exchanges. One of the members of the Investor Group described in
Note 3 above, Tinvest Limited, is a subsidiary of Teribe Limited and is
also an affiliate of Three Cities Research, Inc. Teribe Limited disclaims
beneficial ownership of the shares owned by Tinvest Limited.
(6) Included in Mr. Pannys beneficial ownership are 68,944 shares held in the
Voting Trust, 51,455 shares held in the Restricted Transfer Trust, 4,411
shares in which he has sole voting and investment power, and 9,492 shares
in which he has shared voting and investment power with his wife. Excluded
from the table are 185 shares directly owned by his wife in which Mr.
Panny has no investment or voting power.
<PAGE>
Directors and Officers. The following information concerning beneficial
ownership of the Common Stock of the Company at March 10, 1994, by directors,
executive officers and by directors and executive officers as a group was
furnished by the respective directors or officers or obtained from the records
of the Company.
<TABLE>
<CAPTION>
Exercisable Percent of
Stock Common
Name or Group Options(1) Other Total Stock
<S> <C> <C> <C> <C> <C>
Brian R. Esher 190,400 -- 190,400 7.0%
Alfred R. Glancy III 667 3,300(2) 3,967 (7)
S. Sterling McMillan, III 667 14,719(3) 15,386 (7)
W. John Roberts 667 600(4) 1,267 (7)
Willem F.P. de Vogel -- 1,950(5) -- (7)
J. William Uhrig -- (6) -- (7)
H. Whitney Wagner -- (6) -- (7)
Thomas C. Waggoner 5,833 -- 5,833 (7)
Ronald E. Grambo 13,333 1,948 15,281 (7)
James D. Askren II 1,333 1,460 2,793 (7)
Theodore R. Kallgren 1,333 124 1,457 (7)
All directors and executive
officers, including those
names above (11 persons) 214,233 24,101 236,384 8.4%
<FN>
<F1>(1) Includes shares subject to options which are exercisable within sixty
days of April 5, 1994.
<F2>(2) Included in the other amount shown for Mr. Glancy are 3,000 shares in
which he has sole voting and investment power, 100 shares owned by his
wife and 200 shares owned by his children in which he has no voting or
investment power.
<F3>(3) Included in the other amount shown for Mr. McMillan are 7,126 shares in
which he has sole voting and investment power, 600 shares which are
owned by his wife in which he has no voting or investment power, 1,150
shares which are owned by his minor children in which he has sole
voting and investment power, 1,640 shares held by three trusts in
which Mr. McMillan as trustee has sole voting and investment power,
649 shares held by three trusts in which Mr. McMillan as trustee has
shared voting and investment power, and 3,552 shares held by a trust
in which Mr. McMillan is a possible beneficiary over which he has only
advisory voting and investment power. Excluded from the table are
34,095 shares for which Mr. McMillan is an investment advisor and/or
trustee with discretionary investing and/or voting power in which Mr.
McMillan disclaims any beneficial interest. In 1993, Mr. McMillan
failed to report two transactions made by the trust which he is a
possible beneficiary on a timely basis pursuant to Section 16(a) of
the Securities Exchange Act of 1934.
<F4>(4) The shares indicated for Mr. Roberts are owned jointly with his wife.
<F5>(5) Mr. de Vogel is President of Three Cities Research, Inc., a wholly
owned subsidiary of Three Cities Holdings Limited and an affiliate
of Entreprises Quilmes S.A., which indirectly owns Teribe Limited
(see Note 5 under "Principal Shareholders"). None of the shares
beneficially owned by Three Cities Holdings Limited and Teribe Limited
is included in Mr. de Vogels beneficial ownership.
<F6>(6) Messrs. Uhrig and Wagner are both Managing Directors of Three Cities
Research, Inc. None of the shares owned by Three Cities Holdings
Limited and Teribe Limited is included in the beneficial ownership of
Messrs. Uhrig and Wagner.
<F7>(7) Less than 1%
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
Board of Directors:
The Bylaws of the Company provide for a Board of Directors consisting of from
six to ten directors. The Bylaws also provide that the directors, by vote of a
majority, have the power, within such limits, to fix the number of directors
that shall constitute the whole Board and to fill vacancies for the unexpired
term by an affirmative majority vote. The current number of directors is set
at seven.
The Board of Directors is responsible for the overall affairs of the Company.
To assist it in carrying out its duties, the Board has delegated certain
authority to standing Audit and Compensation Committees. The Finance Committee
was dissolved on June 2, 1993, and did not meet in 1993. Members of each
standing committee are normally elected by the Board at its organizational
meeting following the Annual Meeting of Shareholders. The Board of Directors
has no nominating committee or other committee which performs a similar
function.
Meetings of the Board of Directors:
There were three meetings of the Board of Directors in 1993. In addition to
the meetings of the Board of Directors and its committees at which all formal
actions are taken, additional time on the part of the Companys directors is
required to be expended in the frequent review of Company matters and
documents and in numerous communications with the chairman and other
executives during periods between meetings.
Committees of the Board of Directors:
The Audit Committee of the Board of Directors, which met two times during
1993, has as its primary responsibilities the selection and recommendation of
an independent certified public accounting firm to be appointed by the Board
as the Companys independent auditors, to review the scope and results of the
audit, and to evaluate the adequacy of and compliance with the Companys
internal accounting procedures and controls. The members of the Audit
Committee are:
W. John Roberts - Chairman * S. Sterling McMillan, III
* Alfred R. Glancy III * J. William Uhrig
The Compensation Committee of the Board of Directors, which did not meet
during 1993, has as its primary responsibilities the review of the Companys
salary administration program, the review of the salaries of the officers of
the Company, and recommendations with respect to such salaries to the full
Board, and the review and approval of any recommendations made by management
for awards under the Companys Stock Option Plan. The members of the
Compensation Committee are:
Alfred R. Glancy III - Chairman * Willem F.P. de Vogel * W. John Roberts
During 1993, each of the nominees for director attended all of the meetings of
the Board and of the committees on which he served except that H. Whitney
Wagner did not attend the June 2, 1993 Board meeting.
Nominees for the Board of Directors:
Seven directors are to be elected at the Annual Meeting of Shareholders to
hold office until the next Annual Meeting of Shareholders or until their
successors are elected and qualified. The nominees for election as directors
who are named below are willing to be elected and to serve. However, in the
event that a nominee at the time of election is unable to serve, or is
otherwise unavailable for election, the Board of Directors may select a
substitute nominee. Information concerning the business experience of the
nominees appears in the following section. The nominees for directors are:
Brian R. Esher * Alfred R. Glancy III * S. Sterling McMillan, III
J. William Uhrig * W. John Roberts * H. Whitney Wagner
* Willem F.P. de Vogel
IT IS INTENDED THAT PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED
FOR (UNLESS OTHERWISE DIRECTED) THE ELECTION OF THE SEVEN NOMINEES NAMED ABOVE.
<PAGE>
BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS
The following information with respect to business experience has been
furnished by the respective officer, director or nominee for director.
Brian R. Esher, age 45. Chairman, President & Chief Executive Officer of the
Company. Director of the Company since February 1991.
Mr. Esher joined the Company as Chairman, President & Chief Executive Officer
in February 1991. He was previously employed by Environmental Control Group,
Inc., a full service publicly traded hazardous materials abatement consulting,
insurance, contracting and product distribution services firm, as its
Chairman, President & Chief Executive Officer from September 1989 to January
1991. Previously, Mr. Esher served as Executive Vice President of A.B. Dick
Company, a manufacturer and distributor of printing and graphic arts equipment
and supplies from August 1988 to March 1989. Prior to this position, he was
employed as Senior Vice President of Itek Graphix Corp. from 1985 until its
acquisition by A.B. Dick in August 1988. He is also currently employed as
Chairman, President and Chief Executive Officer of Pameco Holdings, Inc. See
"Compensation Committee Interlocks and Related Transactions."
_________
Alfred R. Glancy III, age 56. Chairman, President and Chief Executive Officer
of MCN Corporation, a holding company with subsidiaries engaged in natural gas
distribution, transmission, storage and technology development and computer
operations services. Director of the Company since 1985.
Mr. Glancy joined Michigan Consolidated Gas Company, a subsidiary of MCN, in
1962 and has held the position of Chairman since 1984 and Chief Executive
Officer from 1984 until September 1992. In 1988, through a corporate
reorganization, Michigan Consolidated Gas Company became a subsidiary of MCN
Corporation. Mr. Glancy has been Chairman and Chief Executive Officer since
the reorganization. Mr. Glancy is also a director of NBD Bancorp, Inc. and NBD
Bank, N.A.
__________
Ronald E. Grambo, age 58. President of S.K. Wellman Limited, Inc.
Mr. Grambo joined the Company in 1958 and has held various positions in its
engineering and product development areas. In September 1985, Mr. Grambo
assumed the position of Vice President and General Manager of The S.K. Wellman
Corp. In September 1986, Mr. Grambo assumed the position of President of S.K.
Wellman Limited, Inc.
__________
S. Sterling McMillan, III, age 55. Vice Chairman of Greenleaf Capital
Management, an investment management company. Director of the Company since
1985.
Mr. McMillan has held his current position since 1986. Prior to joining
Greenleaf, Mr. McMillan was employed by Cleveland - Cliffs Inc. as Vice
President - Finance (1983-1986).
__________
W. John Roberts, age 62. Retired Senior Vice President - Finance and Treasurer
of the Amerisure Companies, a group of affiliated companies providing
multi-line property, casualty and life insurance. Director of the Company
since 1985.
Mr. Roberts joined Michigan Mutual Insurance Company, the parent organization
for the Amerisure Companies, as Vice President - Finance in 1982 and was Senior
Vice President - Finance and Treasurer from 1985 until his retirement in March
1991.
__________
J. William Uhrig, age 32. Managing Director of Three Cities Research, Inc., a
firm engaged in the investment and management of private capital. Director of
the Company since 1993. Mr. Uhrig joined Three Cities in 1984. Prior to
December 1991, Mr. Uhrig was the Managing Director of TCR Europe Ltd. Mr.
Uhrig has been nominated at the behest of the Investor Group pursuant to the
terms of a Nomination Agreement between the Investor Group and the Company.
See "Compensation Committee Interlocks and Related Transactions."
Mr. Uhrig received his Master of Business Administration from the University
of Chicago in 1984, and graduated from Purdue University in 1982.
<PAGE>
Willem F.P. de Vogel, age 43. President of Three Cities Research, Inc., a firm
engaged in the investment and management of private capital. Director of the
Company since 1986.
Mr. de Vogel joined Three Cities in 1977 and has been the President of Three
Cities since 1982. Mr. de Vogel also serves as a director of Computer
Associates International.
__________
Thomas C. Waggoner, age 49. Vice President and Chief Financial Officer of the
Company.
Mr. Waggoner joined the Company in March 1991 as its Vice President and Chief
Financial Officer. He was previously employed by Forstmann & Company from 1986
to 1990 as its Vice President and Chief Financial Officer. Prior to that
position, he was employed during 1984 and 1985 by Breneman Company as its Vice
President of Finance and Administration. From 1971 to 1983 he was employed by
Deloitte, Haskins & Sells.
__________
H. Whitney Wagner, age 38. Managing Director of Three Cities Research, Inc., a
firm engaged in the investment and management of private capital. Director of
the Company since 1993. Mr. Wagner joined Three Cities in 1983. Mr. Wagner has
been nominated at the behest of the Investor Group pursuant to the terms of a
Nomination Agreement between the Investor Group and the Company. See
"Compensation Committee Interlocks and Related Transactions."
Mr. Wagner was employed as a Corporate Banking Officer with Chemical Bank
prior to joining Three Cities (1978-1983).
__________
James D. Askren, II, age 51. Vice President, General Counsel and Secretary of
the Company.
Mr. Askren joined the Company as its Vice President, General Counsel and
Secretary in April 1991. He also currently serves as President of The
Bellefontaine Development Company, a position he has held since 1989. He was
previously employed by Recovery Consultants Corporation of Georgia as its
General Counsel from 1990 to 1991. Prior to that time, he served as Division
and Staff Counsel for Rollins, Inc. from 1975 to 1990. He is also currently
employed as Vice President and General Counsel for Pameco Holdings, Inc. See
"Compensation Committee Interlocks and Related Transactions."
__________
Theodore R. Kallgren, age 32. Vice President of Finance and Treasurer of the
Company.
Mr. Kallgren joined the Company in May 1988 and has served as its Vice
President of Finance and Treasurer since June 1991. He was previously employed
by Ernst & Whinney from 1984 to 1988. He is also currently employed as Chief
Financial Officer for Pameco Holdings, Inc. See "Compensation Committee
Interlocks and Related Transactions."
__________
<PAGE>
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION SUMMARY
The following table provides certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries to or on
behalf of the Companys Chief Executive Officer and the other two most highly
compensated executive officers of the Company, who are the only executive
officers whose compensation, including salary and bonus, exceeded $100,000
(determined as of the end of the last fiscal year), for the last three fiscal
years of the Company:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts All other
compen-
sation
Other Restricted Options/ LTIP
Name and Principal Position Year Salary($) Bonus($) annual stock SARs(#) payouts
compen- award(s) ($)
sation ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian R. Esher 1993 $106,089 $425,000 $0 $0 -0- $0 $0
Chairman, President and 1992 120,329 301,823 -0- -0- -0- -0- -0-
Chief Executive Officer 1991 357,692 456,000(1) * -0- 190,400(1) -0- -0-
Thomas C. Waggoner 1993 $126,666 $ 60,000 $0 $0 7,500 $0 $0
Vice President and C 1992 125,000 47,500 27,921(2) -0- 5,000(3) -0- -0-
Financial Office 1991 95,125 46,500 * -0- 5,000 -0- -0-
Ronald E. Gram 1993 $107,226 $ 75,000 $0 $0 -0- $0 $15,243(4)
President S.K. Wellma 1992 102,485 65,000 -0- -0- 20,000(3) -0- 4,018(4)
Limited, Inc. 1991 98,310 50,000 * -0- 6,350 -0- -0-
*Amounts omitted pursuant to transition rule.
<FN>
<F1>(1) In 1991, Mr. Esher received a $400,000 bonus upon entering into his
employment agreement with the Company on February 11, 1991. He also
received a $56,000 bonus based on his performance during the year.
Upon entering into his employment agreement with the Comp options to
purchase 190,400 shares of the Companys Common Stock (a 1993 reverse
stock split).
<F2>(2) In 1991, Mr. Waggoner was reimbursed by the Company for the costs
associated with the relocation of his family, sale of his home, and
moving of household goods to Atlanta.
<F3>(3) Messrs. Waggoner and Grambo were issued stock options with respect to
5,000 and 6,350 shares, respectively (as adjusted to account for the
1993 reverse stock split), in 1992 after the completion of the sale of
the Refrigeration & Air Conditioning Group, which replaced options for
the same number of shares that were granted in 1991. The stock options
were reissued with an exercise price at the then market price of the
Common Stock.
<F4>(4) In 1992 and 1993, the Company paid $900 for life insurance benefits
on Mr. Grambos behalf. Also, pursuant to the profit sharing element of
the Companys Defined Contribution Plan, Mr. Grambo received $14,343 in
1993 and $3,118 in 1992.
</TABLE>
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
President & CEO Compensation
Decisions on compensation and bonus for the President and Chief Executive
Officer are made by the three member Compensation Committee of the Board of
Directors, each of whom is a non-employee Director.
The compensation provided for in Mr. Eshers initial Employment Agreement, the
material terms of which are described in the Summary Compensation Table and in
"Employment Agreements with Executive Officers," (see page 14) was based on
the Companys tenuous financial condition at the time Mr. Esher was hired and
Mr. Eshers background and experience with respect to correcting similarly
situated companies. The compensation package negotiated was comparable with
similar companies experiencing financial difficulties, and was the result of
arms length negotiations with Mr. Esher. The decision to hire Mr. Esher was
based, among other things, on the Compensation Committees and the Boards
belief that he would help the Company avoid a bankruptcy filing and the costs
associated with operating in bankruptcy. The results achieved to date in
taking the Company from a deficit equity position of $100 million to the
Companys positive equity position of approximately $7.3 million in a
relatively short time frame attests to the decision to recruit Mr. Esher. The
initial Employment Agreement was amended effective January 1, 1994, and
extended on terms reflective of MLXs current financial condition and size.
(See page 14).
General
The Companys compensation programs have been designed to enable the Company to
attract, motivate and retain senior managers and key employees by providing a
total compensation opportunity based upon individual and unit performance. The
Companys compensation program provides for competitive base salaries, annual
incentive bonus opportunities, competitive benefits (health, life, disability,
vacation, and defined contribution retirement) with employee contributions,
long term stock options, and participation in Company sponsored profit sharing
based upon achievement of operating objectives. This compensation program
aligns the interest of the Companys management and its shareholders to build
long term value and improve the return to the Companys shareholders.
Salaries
Only the President and CEO of MLX is subject to an employment agreement. All
other employees are employed as employees at will. Salaries of other executive
officers are determined by the President and CEO (subject to approval by the
Compensation Committee) and are based upon salary grades assigned to positions
and the relative experience and performance of the individual. Salary grades
are reviewed annually and compared to industry and geographic wage and salary
surveys.
Typically, individual executives are reviewed annually and their performance
evaluated against their objectives for the period of evaluation. Such
objectives include measurements of revenue generation, operating profit,
asset management, cash flows, cost improvements, quality and customer service,
depending upon the responsibilities of the executive.
Bonus Compensation
All executive officers other than the President and CEO are granted bonus
opportunities under the Companys Senior Management Discretionary Bonus Plan,
which defines the administration and goal measurements of each key position.
This plan is updated annually and target bonus opportunities assigned to
qualifying managers. Payments are granted annually based upon achievement of
goals which are also established annually. Typically these goals include
revenue growth, profitability and asset management targets.
Option Grants
The Company uses grants of stock options to its key employees and executive
officers to closely align the interests of such employees and officers with
the interests of its stockholders. The Companys Stock Option Plan is
administered by the Compensation Committee, which determines the persons
eligible, the number of shares subject to each grant, the exercise price
thereof and the other terms and conditions of the option. Options granted
under the Stock Option Plan have an exercise price equal to at least 100% of
the market price of the Common Stock on the date that the option is granted,
and the term of any option granted cannot exceed five (5) years. Option grants
typically vest over a three year period, subject to continued employment.
The Company has made an effort to offer options to key employees and all
levels of management, including first line supervisors, in an effort to give
them an ownership opportunity to align their goals with those of the Companys
shareholders.
<PAGE>
Profit Sharing
The Company offers its Defined Contribution Plan (known as a 401(k) Plan) to
its employees with a matching contribution of 10% of the first 6% of the
employees salary contributed to the plan. The Company added a profit sharing
contribution to its 401(k) Plan in 1992 to offset the termination of the S.K.
Wellman Defined Benefit Retirement Plan. This change focused all plan
participants on achieving the Companys Annual Operating Plan which is the
basis for determining funding for this profit sharing contribution. Based upon
achievement of its operating plans the Boards of Directors of the S.K. Wellman
Subsidiaries vote to fund the plan from 0-5% of each employees annual gross
compensation. In 1993 the Board voted to fund the program at 5% for such year
based upon the groups exceeding its Annual Operating Plan. This amounted to
$417,000 in 1993.
MLX executive officers, including the President and CEO, are not eligible to
participate in the profit sharing contribution portion of the Defined
Contribution Plan.
The Compensation Committee
Alfred R. Glancy III, Chairman
Willem F.P. de Vogel
W. John Roberts
<PAGE>
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
Set forth below is a line graph comparing, for the five-year period ending
December 31, 1993, the cumulative total shareholder return (stock price
increase plus dividends, divided by beginning stock price) on the Companys
Common Stock with that of (i) all U.S. companies quoted on NASDAQ and (ii)
non-financial companies quoted on NASDAQ. The stock price performance shown on
the graph below is not necessarily indicative of future price performance.
Comparison of Five Year Cumulative Total Return
Among the Company, The NASDAQ Stock Market and NASDAQ
Non-Financial Stocks
[DESCRIPTION]
GRAPHIC #2: Artwork - (1) Bar Graph. The following information is the Data
Points for Graph of Stock Performance
WHERE: Located on Page 12 of Proxy Statement
<TABLE>
<CAPTION>
NASDAQ NASDAQ MLX
Stock Price Performance U.S. NON-FINA CORP
<S> <C> <C> <C> <C>
12/31/88 100.000 100.000 100.000
Chart 6 12/31/89 121.244 125.099 71.429
Chart 6 12/31/90 102.958 110.129 25.143
12/31/91 165.206 177.325 16.057
12/31/92 192.104 193.931 28.571
12/31/93 219.214 222.282 30.000
</TABLE>
<PAGE>
OPTION GRANTS
The following table sets forth information with respect to grants of stock
options under the Companys Stock Option Plan during the last fiscal year to
the Companys Chief Executive Officer and the other executive officers named
in the Summary Compensation Table above. No stock appreciation rights were
granted during the last fiscal year. In addition, in accordance with
Securities and Exchange Commission Rules, the hypothetical gains or "option
spreads" that would exist for the respective options, based on assumed rates
of annual compound stock appreciation of 5% and 10% from the date the options
were granted over the full option term, are also reflected:
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individiual Grants
Potenital realizable value
at assumed annual rates of
stock price appreciation
for option term
Name Number of Percentage of Exercise of Expiration 5%($) 10%($)
securities total options base price date
underlying granted to ($/Sh)
options employees
granted in fiscal year
<S> <C> <C> <C> <C> <C> <C>
Brian R. Esher -0- -0- -0- -- -- --
Thomas C. Waggoner 7,500 64% $4.25 10/04/98 $9,572 $12,075
RonaldE. Grambo -0- -0- -0- -0- -- --
</TABLE>
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows for the Companys Chief Executive Officer and the
other executive officers named in the Summary Compensation Table above the
number of shares covered by both exercisable and non-exercisable stock options
as of December 31, 1993, and the values for "in-the-money" options, based on
the positive spread between the exercise price of any such existing stock
options and the year-end price of the Companys Common Stock.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Shares Value Number of unexercised Value of unexercised
Name Acquired on Realized options at December 31, in-the-money options at
Exercise (#) ($) 1993 (No. of shares) December 31, 19931
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Brian R. Esher -0- -0- 190,400 -0- $47,600 -0-
Thomas C. Waggoner -0- -0- 5,833 6,667 $11,666 $ 9,584
Ronald E. Grambo -0- -0- 13,333 6,667 $36,666 $18,334
<FN>
<F1>(1) Based on closing stock price of $5.25 on December 31, 1993.
</TABLE>
<PAGE>
RETIREMENT PLANS
In 1987, the Board of Directors of MLX adopted the MLX Corp., SinterMet
Corporation (now known as S.K. Wellman Limited, Inc.) and The S.K. Wellman
Corp. Retirement Plan for Salaried Employees ("Retirement Plan"). The
Retirement Plan covered all employees of S.K. Wellman Limited, Inc. and The
S.K. Wellman Corp. (both of which are subsidiaries of MLX) and MLX, excluding
employees who are members of a collective bargaining unit. It provided for
annual retirement benefits based on the employees final average salary and on
the number of years of employment by one of the companies.
On September 30, 1992, the Company terminated the Retirement Plan for salaried
employees. Upon settlement of the Retirement Plan in June 1993, the Company
purchased annuities to fund the obligations of the participants or funded a
rollover into the participants 401(k) account. Of the executive officers
identified on the Summary Compensation Table above, only Mr. Grambo was a
participant in the Retirement Plan. The amount rolled over into the 401(k)
account of Mr. Grambo was $234,818.
DIRECTORS FEES
Directors who are not employees of the Company receive a quarterly retainer of
$2,500 and a meeting fee of $400 per meeting attended.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Effective as of February 11, 1991, the Company and Brian R. Esher entered into
an employment agreement wherein Mr. Esher agreed to be employed as the
Chairman, President & Chief Executive Officer of MLX for a period for three
years, subject to earlier termination for cause as provided in the agreement.
Under the terms of the agreement, Mr. Esher received a lump sum payment of
$400,000 upon signing the agreement and was granted a seven-year option to
purchase 190,400 shares (as adjusted to account for the 1993 reverse stock
split) of MLX common stock at $5.00 per share. As of December 31, 1993, all
such options are vested. Mr. Eshers employment agreement was amended as of
February 11, 1992, as a result of the substantial change in the Company
resulting from the sale of its Refrigeration & Air Conditioning group (the "RAC
Group"). The Amendment acknowledged the other duties that Mr. Esher now has as
the Chief Executive Officer of the new Refrigeration & Air Conditioning group
company. See "Compensation Committee Interlocks and Related Transactions."
Based on a review of Mr. Eshers employment agreement, the Company and Mr.
Esher have amended his employment agreement effective as of January 1, 1994,
and have extended the term for one year, through December 31, 1994. Under the
terms of the amended agreement, Mr. Esher will receive a base salary of $125,000
per year. Mr. Esher will also receive a bonus based upon the Companys
performance versus its budgeted pre-tax operating income. If the Company earns
90% of its budgeted pre-tax operating income, Mr. Esher will receive a bonus of
$25,000. For every percentage point by which the Company exceeds 90% of its
budgeted pre-tax operating income, Mr. Esher will receive an additional $2,500
in bonus payments, up to a maximum of $75,000 if the Company earns 110% or more
of its budgeted pre-tax operating income.
In the event that any existing or new shareholder increases their percentage
ownership interest of the Companys Common Stock by 5% or more, then
simultaneously with such acquisition, the options described above will be
converted to a stock appreciation right ("SAR") which will have substantially
identical economic results to Mr. Esher. Upon the consummation of the
acquisition of the Common Stock by the Investor Group, as described in
"Compensation Committee Interlocks and Related Transactions," the option
converted into an SAR. Within 30 days of becoming aware of such conversion, a
majority of the Board of Directors who are not employed by the Company
("Disinterested Directors") may elect to rescind, in whole or in part, the
automatic conversion of the option to a SAR, and in 1993 the Disinterested
Directors voted to restore the SARs to options.
Under Mr. Eshers amended employment agreement, if MLX or S.K. Wellman Limited
files for protection under the bankruptcy code, Mr. Esher will receive his
base salary for the remainder of the agreement, but he will be free of any
continuing obligation to perform any duties under the agreement.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND RELATED TRANSACTIONS
Messrs. de Vogel, Glancy, and Roberts served on the Compensation Committee of
the Board of Directors for the past fiscal year. None of the members of the
committee served as an officer of the Company or any of its subsidiaries
during the preceding fiscal year.
On March 19, 1992, the Company consummated a sale of its RAC Group and a
restructuring of the Companys and its subsidiaries debt obligations to its
senior lenders (such sale and debt restructuring are referred to collectively
herein as the "1992 Restructuring").
Following its sale of the RAC Group, the Company entered into a Management
Services Agreement, dated March 19, 1992 (the "Management Services
Agreement"), with Pameco Holdings, Inc., the purchaser of the RAC Group,
pursuant to which the Company provided management, operational and
administrative services to the RAC Group for a fee of $30,000 per month. In
1993, this agreement was amended to provide for the transfer of certain
employees to Pameco Holdings and for the Company to pay a monthly fee of
$5,000 to Pameco Holdings for shared expenses, including the lease of common
office space and for the services of the transferred employees. Under the
Management Services Agreement, Pameco Holdings paid the Company $81,500 in
fees (net of amounts paid by the Company to Pameco Holdings under the
post-amendment version of the Management Services Agreement) during 1993.
As an integral part of the 1992 Restructuring, Brian R. Esher and Pameco
Holdings entered into an employment agreement providing that in addition to
his duties as the Chairman, President and Chief Executive Officer of the
Company, Mr. Esher will perform other duties as the Chairman, President and
Chief Executive Officer of Pameco Holdings. Mr. Eshers agreement with Pameco
Holdings also required him to acquire an 8.5% equity interest in the common
stock of Pameco Holdings and to make certain other investments in Pameco
Holdings. See "Employment Agreements" under the caption "Remuneration of
Directors and Executive Officers" above for additional details concerning Mr.
Eshers employment arrangements with the Company. Messrs. Askren and Kallgren,
also executive officers of the Company, are also employees of Pameco Holdings.
See "Managements Discussion and Analysis of Financial Condition and Results of
Operations" contained in the 1993 Annual Report to Shareholders, enclosed with
this Proxy Statement, for a more detailed discussion of the 1992
Restructuring.
The Investment Group that purchased the assets of the RAC Group was led by
Three Cities Research, Inc., a firm engaged in the investment and management
of private capital. Willem F.P. de Vogel, a member of MLXs Board of Directors
since 1986 and a member of the Companys Compensation Committee, is the
president of Three Cities Research, Inc. Messrs. Uhrig and Wagner, directors
of the Company, are both Managing Directors of Three Cities Research, Inc.
In connection with the Investor Groups acquisition of the Companys outstanding
zero coupon bonds and shares of Common Stock from certain of the Companys
lenders, the Company entered into a Nomination Agreement with the Investor
Group, dated December 15, 1992, whereby the Investor Group may nominate up to
three directors to the Board. In 1993 and 1994, Messrs. Uhrig and Wagner have
been nominated by the Investor Group pursuant to the Nomination Agreement.
On January 15, 1993, the Company exchanged 100,000 shares of its newly
authorized shares of $30 per share Series A Preferred Stock and approximately
$24,000 cash for zero coupon bonds with a carrying value of approximately
$7,674,000 held by the Investor Group. At the same time, the Company issued an
additional 100,000 shares of its Series A Preferred Stock and paid
approximately $19,000 in cash in exchange for notes, valued at $3,116,000,
acquired by the Investor Group in December 1992.
In April 1993 the Company exchanged 64,000 shares of its $30 Series A
Preferred Stock and cash of $14,000 for zero coupon bonds with a carrying
value of $4,895,000 held by the Investor Group. At the same time, the Company
issued 1993 Variable Rate Notes with a redemption value of $1,444,000 to The
Equitable Life Assurance Society of the United States and certain affiliates
(collectively, "Equitable") in exchange for zero coupon bonds owned by
Equitable with a carrying value of $3,629,000.
As of December 31, 1992, the Company purchased the outstanding 13.7% minority
interest in its S.K. Wellman Limited, Inc. subsidiary by issuing notes in the
aggregate principal amount of $2.5 million to the owners of the minority
interests. The notes bear interest at the greater of 12% or prime plus 3%. In
connection with the execution of the Companys 1993 senior credit facility,
these notes were paid down by $1.9 million, and in December 1993, the notes
were paid in full. Teribe Limited, a holder of approximately 5.39% of the
Companys Common Stock, held a 10.6% minority interest in S.K. Wellman Limited,
Inc., and its holdings were redeemed in this transaction. For more details
concerning Teribe Limiteds ownership of the Companys Common Stock see
"Security Ownership of Certain Beneficial Owners."
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Ernst & Young has served as the Companys independent accountants for many
years, including the year ended December 31, 1993. The selection of
independent accountants is subject to annual review and recommendation by the
Audit Committee and final decision by the Board of Directors. The selection of
independent accountants for 1994 has not yet been made. The Companys Bylaws do
not require that the shareholders approve the selection of independent
accountants. A representative of Ernst & Young is expected to be at the Annual
Meeting and will have the opportunity to make a statement if he desires to do
so and will be available to respond to appropriate questions.
MISCELLANEOUS
SHAREHOLDER PROPOSALS
Pursuant to the general rules under the Securities Exchange Act of 1934,
proposals of shareholders intended to be presented at the 1995 Annual Meeting
of Shareholders must be received by management of the Company at its executive
offices on or before December 31, 1994.
OTHER MATTERS
It is not expected that any other matters are likely to be brought before the
meeting.
By Order of the Board of Directors,
James D. Askren II, Secretary
