MLX CORP.
1000 Center Place
Norcross, Georgia 30093
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of
Shareholders of MLX Corp. (the "Company") at Kilpatrick & Cody,
27th Floor, 1100 Peachtree Street, Atlanta, Georgia, on May 1,
1996, at 11:00a.m., Atlanta time.
The Annual Meeting will be held 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
andqualified.
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
15,1996, as the record date for determination of shareholders
entitled to notice of and to vote at the meeting.
A copy of the Annual Report to Shareholders for the fiscal year
ended December 31, 1995 is enclosed.
By Order of the Board of Directors,
Theodore R. Kallgren, Secretary
Norcross, Georgia
April 2, 1996
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.
MLX Corp.
1000 Center Place
Norcross, Georgia 30093
PROXY STATEMENT
for Annual Meeting of Shareholders
to be held on May 1, 1996.
INTRODUCTION
April 2 , 1996
This Proxy Statement and the enclosed proxy, which is first being
mailed to the shareholders of MLX Corp. (the "Shareholders") on
approximately April 2, 1996, 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 offices of Kilpatrick & Cody, 27th Floor, 1100 Peachtree
Street, Atlanta, Georgia on May 1, 1996, at 11:00 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 (the "Common Stock"), is to be borne by
the Company. Directors, officers and employees of the Company may
also solicit proxies, but without 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 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 election of directors, an
abstention or broker non-vote will have no effect.
The Board of Directors of the Company (the "Board"), in
accordance with the Bylaws, has fixed the close of business on
March 15, 1996, 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 2,607,384 shares of Common Stock, $.01 par value,
each of which is entitled to one vote.
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 a 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, Compensation
and Funds Management Committees. 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 five meetings of the Board of Directors in 1995. 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 Company's 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 1995, has as its primary responsibilities the
selection and recommendation of an independent certified public
accounting firm to be appointed by the Board as the Company's
independent auditors, to review the scope and results of the
audit, and to evaluate the adequacy of and compliance with the
Company's internal accounting procedures and controls. The
members of the Audit Committee are:
W. John Roberts-Chairman * S. Sterling McMilllan, III * Alfred
R.Glancy III * J. William Uhrig
The Compensation Committee of the Board of Directors, which met
twice during 1995, has as its primary responsibilities the review
of the Company's 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 MLX Corp. Stock Option and Incentive Award Plan. The
members of the Compensation Committee are:
Alfred R. Glancy III-Chairman * Willem F.P. de Vogel * W. John
Roberts
The Funds Management Committee of the Board of Directors, which
met twice during 1995, has as its primary responsibilities the
review of the Company's investment policies and practices and
counseling with management on investments, investment strategies
and approval of certain funds transfers. The members of the Funds
Management Committee are:
W. John Roberts * H. Whitney Wagner * J. William Uhrig
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.
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 15, 1996. The information concerning beneficial
ownership was obtained from the Company's records or from filings
with the Securities and Exchange Commission on Forms 13D
or 13G.
<TABLE>
Names and Addresses of Amount and Nature of
Percent of
Beneficial Owners Beneficial Ownership
Class
<S> <C> <C>
Three Cities Holdings Limited 851,456(1) 32.66%
c/o Craigmuir Chambers
P.O. Box 71: Road Town
Tortola
British Virgin Islands
The Equitable Life Assurance 178,914(2) 6.86%
Society of the United States
1285 Avenue of the Americas
New York, New York 10019
Teribe Limited 136,722(3) 5.24%
c/o Craigmuir Chambers
P.O. Box 71; Road Town
Tortola
British Virgin Islands
</TABLE>
(1) 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 - 14.35%),
Mitvest Limited (47,107 shares - 1.81%), Tinvest Limited
(201,286 shares - 7.72%), Bobst Investment Corp. ( 59,961
shares - 2.30%), and TCR International Partners, LP (168,858
shares - 6.48%). 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 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS - Directors and Officers."
(2) 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.
(3) Teribe Limited is a wholly owned subsidiary of Real Limited,
a British Virgin Islands international business company
("Real"). Real is a 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 1 above,
Tinvest Limited, is a subsidiary of Real and is also an
affiliate of Three Cities Research, Inc. Teribe Limited
disclaims beneficial ownership of the shares owned by
Tinvest Limited.
Directors and Officers. The following information concerning
beneficial ownership of the Common Stock of the Company at March
15, 1996, 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>
Exercisable Percent of
Stock Common
Name or Group Options Other Total Stock
<S> <C> <C> <C> <C>
Brian R. Esher 190,400 0 190,400 6.8%
Alfred R. Glancy III 1,000 3,300(2) 4,300 (7)
S. Sterling McMillan, III 1,000 13,726(3) 14,726 (7)
W. John Roberts 1,000 600(4) 1,600 (7)
Willem F.P. de Vogel 0 1,950(5) 1,950 (7)
J. William Uhrig 0 (6) 0 (7)
H. Whitney Wagner 0 (6) 0 (7)
Thomas C. Waggoner 30,833 0 30,833 1.2%
Theodore R. Kallgren 2,000 124 2,124 (7)
All directors and
executive officers,
including those named
above (9 persons) 226,233 19,700 245,933 8.7%
</TABLE>
(1) Includes shares subject to options which are exercisable
within sixty days of March 15, 1996.
(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.
(3) Included in the other amount shown for Mr. McMillan are
6,526 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, 1,445 shares which are
owned by his children in which he has no voting or
investment power, 1,603 shares held by trusts in which Mr.
McMillan as trustee has sole or 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 40,010 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.
(4) The shares indicated for Mr. Roberts are owned jointly with
his wife.
(5) Mr. de Vogel is President of Three Cities Research, Inc., a
wholly owned subsidiary of Three Cities Holdings Limited and
an affiliate of Enterprises Quilmes S.A., which indirectly
owns Teribe Limited (see Note 3 under "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS - Principal Shareholders"). None
of the shares beneficially owned by Three Cities Holdings
Limited and Teribe Limited is included in Mr. de Vogel's
beneficial ownership.
(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.
(7) Less than 1%.
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 47, Chairman and Chief Executive Officer of
the Company. Director of the Company since February 1991. He was
previously employed by Pameco Corp. as Chairman and Chief
Executive Officer from February 1991 to March 1996. See
"COMPENSATION INTERLOCKS AND RELATED TRANSACTIONS." Prior to
joining Pameco, Mr.Esher was 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 currently serves as a board
member of Pameco Holdings, Inc. and Bennett Pumps, Inc.
Alfred R. Glancy III, age 58. 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.
S. Sterling McMillan, III, age 57. Vice Chairman of Greenleaf
Capital Management, an investment 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 64. Retired Senior Vice President-Finance
and Treasurer of the Amerisure Companies, a group of affiliated
companies providing property, casualty and life insurance.
Director of the Company since 1985. Mr. Roberts joined Michigan
Mutual Insurance Company, the parent organization for 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 34. 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.
Willem F.P. de Vogel, age 45. President of Three Cities Research,
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 51. 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 promoted
to President in 1995. 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 40. 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 also serves as a
director of Garden Ridge Corporation. 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).
Theodore R. Kallgren, age 34. Vice President of Finance,
Treasurer and Secretary 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 has served as its
Secretary since June 1995. 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."
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 for the last three fiscal years of the Company to or
on behalf of the Company's Chief Executive Officer and the one
other executive officer whose compensation, including salary and
bonus, exceeded $100,000 during the last fiscal year.
<TABLE>
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts All Other
compen-
sation
Other Restricted Securities LTIP
Name and Principal Year Salary ($) Bonus ($) annual stock underlying payouts
Position compen- award(s) Options/ ($)
sation ($) SARs #
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian R. Esher 1995 $ 70,187 $ 37,500 0 0 0 0 0
Chairman and 1994 125,000 75,000 0 0 0 0 0
Chief Executive 1993 106,089 425,000 0 0 0 0 0
Officer
Thomas C. Waggoner 1995 $ 131,508 $150,000 0 0 30,000 0 0
President and Chief 1994 135,000 70,000 0 0 12,500 0 0
Financial Officer 1993 126,666 60,000 0 0 7,500 0 0
</TABLE>
Compensation Committee Report on Executive Compensation
PRESIDENT & CEO COMPENSATION
Decisions on compensation and bonuses 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.
Mr. Esher's compensation during 1995 was governed by his
Employment Agreement with the Company, which was first entered
into in 1991. The initial Employment Agreement was amended on
February 11, 1992 in light of the decreased size of the Company
following the sale of the Company's Refrigeration and Air
Conditioning Group and to reflect the responsibilities Mr. Esher
acquired as Chief Executive Officer of Pameco Holdings, Inc. The
Employment Agreement was again amended, effective January 1, 1994
and January 1, 1995, and extended on terms reflective of MLX's
current financial condition and size. Effective with the sale of
S.K. Wellman in June 1995, Mr. Esher's salary was decreased from
$125,000 per year to $12,000 per year and all incentive
compensation for the remainder of 1995 was eliminated. Mr.
Esher's annual bonus for 1995, calculated on a pro-rata basis
through the end of June 1995, was based on the Company's
performance versus its budgeted pre-tax operating income (the
"Goal"). If the Company earned 90% of its Goal, Mr. Esher
would receive a bonus of $25,000. For every percentage point by
which the Company exceeded 90% of its Goal, Mr. Esher received an
additional $2,500 in bonus payments, up to a maximum of $75,000
if the Company earned 110% or more of its Goal. Mr. Esher's
Employment Agreement was extended through December 31, 1996 based
on a $12,000 annual salary and no incentive compensation.
However, the salary and incentive compensation provided to Mr.
Esher will be renegotiated if the Company should acquire an
operating business during 1996.
GENERAL
The Company's 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 Company's compensation
program provides for competitive base salaries, annual incentive
bonus opportunities, competitive benefits (health, life,
disability, vacation, and defined contribution retirement) with
employee contributions and long term stock options. This
compensation program aligns the interest of the Company's
management and its shareholders to build long term value and
improve the return to the Company's shareholders. It is the
Company's policy to structure its compensation programs so that
all compensation is deductible by the Company pursuant to Section
162(m) of the Internal Revenue Code.
SALARIES
Only the Chairman and CEO of MLX is engaged pursuant to an
employment agreement. All other officers are employed as
employees at will. Salaries of the other executive officer are
determined by the Chairman 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 conducted by
several independent trade associations, which include data
gathered from thousands of employers. The identity of the
employers included in such surveys is typically not of
significance to the Company (one survey does not even identify
participants); rather, the size and geographic location of groups
of employers are the most significant factors considered. The
Company generally attempts to set its salaries near the midpoint
of the salary ranges of comparably sized employers.
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 in customer service, in each case depending
upon the responsibilities of the executive. Evaluation of these
factors is subjective, and no fixed, relative weights are
assigned to the criteria considered. For 1995, these objectives
were determined to have been met or exceeded for Mr. Waggoner,
resulting in the salary increase reflected in the Summary
Compensation Table above.
BONUS COMPENSATION
All executive officers other than the Chairman and CEO are
granted bonus opportunities under the Company's 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. For Mr. Waggoner,
these goals include profitability, lender matters, common stock
and NASDAQ matters, financial reporting and income tax
compliance, and mergers and acquisitions. Each goal is assigned a
relative weight of 10% to 25%. In each case, these targets were
substantially met in 1995, resulting in the bonus for Mr.
Waggoner reflected in the Summary Compensation Table above.
OPTION GRANTS
The Company uses grants of stock options under its 1985 Stock
Option Plan and its 1995 Stock Option and Incentive Award Plan
(the "Stock Option Plans") to its key employees and executive
officers to closely align the interests of such employees and
officers with the interests of its shareholders. The Company's
Stock Option Plans are 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 Plans 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 is from
five (5) to ten (10) years. Option grants typically vest over a
three year period, subject to continued employment.
THE COMPENSATION COMMITTEE
Alfred R. Glancy III, Chairman
Willem F.P. de Vogel
W. John Roberts
Five-Year Shareholder Return Comparison
Set forth below is a line graph comparing for the five-year
period ended December 31, 1995, the cumulative total shareholder
return (stock price increase plus dividends, divided by beginning
stock price) on the Company's 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.
<TABLE>
Comparison of Five Year Cumulative Total Return
Among the Company, The NASDAQ Stock Market and NASDAQ Non-Financial Stocks
[Table replaces graft that goes here]
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
MLX Common Stock 100,000 74,933 133,333 140,000 120,000 266,667
NASDAQ Stock Market 100,000 160,564 186,866 214,511 209,686 296,304
NASDAQ Non-Financial 100,000 160,983 176,089 203,323 194,855 267,923
</TABLE>
Option Grants
The following table sets forth information with respect to grants
of stock options under the Company's Stock Option Plans during
the last fiscal year to the Company's Chief Executive Officer and
the other executive officer named in the Summary Compensation
Table See "REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS -
Employment Agreements with Executive Officers." 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 "options 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:
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants
Potential realizable value
at assumed annual rates of
stock price appreciation for
option term(1)
Name Number of Percent of Exercise or 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 0 0 0
Thomas C. Waggoner 30,000(2) 100% $9.25 7/25/2005 $174,518 $442,264
</TABLE>
(1) These amounts represent assumed rates of appreciation only.
Actual gains, if any, on stock option exercises and holding
of Common Stock are dependent upon the future performance of
the Common Stock and overall market conditions. There can be
no assurance that the amounts reflected in this table will
be achieved.
(2) The options are exercisable in one-third increments on July
26, 1995, 1996, and 1997.
Option Exercises and Fiscal Year-End Values
The following table shows for the Company's Chief Executive
Officer and the other executive officer named in the Summary
Compensation Table above the number of shares covered by both
exercisable and non-exercisable stock options as of December 31,
1995, and the values for "in-the-money" options, based on the
positive spread between the exercisable price of any such
existing stock options and the year-end price of the Company's
common stock.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of unexercised Value of unexercised
Shares Value options at December 31, in-the-money options at
Name Acquired on Realized 1995 (No. of shares) December 31, 1995(1)
Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Brian R. Esher 0 0 190,400 0 $952,000 0
Thomas C. Waggoner 0 0 30,833 24,167 $138,124 40,002
(1) Based on closing stock price of $10.00 on December 31, 1995.
</TABLE>
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 of three years, subject to earlier
termination for cause as provided in the agreement. Mr. Esher's
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 had as the Chief Executive Officer of the new Refrigeration
& Air Conditioning group company, Pameco Holdings, Inc. See
"COMPENSATION COMMITTEE INTERLOCKS AND RELATED TRANSACTIONS."
Based on a review of Mr. Esher's employment agreement, the
Company and Mr. Esher amended his employment agreement effective
as of January 1, 1994 , 1995 and 1996, in each case to extend the
term until the end of the calendar year. Under the terms of the
currently amended agreement, Mr. Esher will receive a base salary
of $12,000 per year. The salary and incentive compensation
provided to Mr. Esher will be renegotiated in the event the
Company acquires an operating business in 1996.
Under the terms of his original 1991 employment agreement, Mr.
Esher received an option to purchase 190,400 shares of Common
Stock, at a price of $5.00 per share, exercisable (subject to
vesting schedules which have been satisfied) at any time or from
time to time prior to February 10, 1998. In the event that any
existing or new shareholders increase their percentage ownership
interest of the Company's Common Stock by 5% or more, then
simultaneously with such acquisition, the options held by Mr.
Esher will be converted to a stock appreciation right ("SAR")
which will have substantially identical economic results to Mr.
Esher. Any SAR held by Mr. Esher may be converted into an option
having the same terms and conditions as the original option by
the vote of a disinterested majority of the Board and any such
option will once again be subject to conversion into an SAR, as
provided above. Conversion of Mr. Esher's options to an SAR and
back to options will have no economic impact upon other option
holders.
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. On March 19, 1992, the Company consummated a sale of its
RAC Group and a restructuring of the Company's and its
subsidiaries' debt obligations to it 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. This amount was adjusted to $4,500
per month for 1996. 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. The
Company paid $60,000 to Pameco Holdings under this arrangement
during 1994. 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 and
Chief Executive Officer of the Company, Mr. Esher will perform
other duties as the Chairman, President and Chief Executive
Officer of Pameco Holdings. Effective April 1, 1996 Mr. Esher
ended his employment with Pameco Holdings but continues to serve
on the board of that company. See "Employment Agreements with
Executive Officers" under the caption "REMUNERATION OF DIRECTORS
AND EXECUTIVE OFFICERS" above for additional details concerning
Mr. Esher's employment arrangements with the Company. Mr.
Kallgren, an executive officer of the Company, is also an
employee of Pameco Holdings.
The Investment Group that purchased the assets of the RAC Group
included Mr. Esher and 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 the Board since 1986 and a
member of the Company's 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.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Ernst & Young LLP has served as the Company's independent
accountants for many years, including the year ended December 31,
1995. 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 1996 has not yet been made. The Company's Bylaws
do not require that the shareholders approve the selection of
independent accountants. A representative of Ernst & Young LLP 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 1996 Annual Meeting of Shareholders must be received by
management of the Company at its executive offices on or before
December 31, 1996.
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,
Theodore R. Kallgren
Secretary
[ATTACHMENT - PROXY CARD]
PROXY
MLX Corp.
Norcross, Georgia
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1996
ANNUAL MEETING OF STOCKHOLDERS.
The undersigned shareholder of MLX Corp. hereby appoints Thomas
C. Waggoner, Alfred R. Glancy III, or W. John Roberts, or any of
them, with full power of substitution to each, the proxies of the
undersigned to vote, as designated below, the shares of the
undersigned at the annual meeting of shareholders of MLX Corp. to
be held on May 1, 1996 and at any adjournments thereof.
The undersigned directs this proxy to be voted as follows:
1. APPROVAL OF THE ELECTION of all nominees for Director
listed below:
Brian R. Esher Willem F. P. de Vogel Alfred R. Glancy III
S. Sterling McMillan, III
W. John Roberts J. William Uhrig H. Whitney Wagner
[ ] For all nominees for [ ] Withholding authority to
director listed above vote for all nominees
(except as marked to
the contrary)
Instructions: To withhold authority to vote for any Individual
Nominee, write that Nominee's name in the space provided below.
- --------------------------------------------------------------
2. IN ACCORDANCE WITH THE BEST JUDGEMENT of the named proxies
with respect to any other matter which may properly come
before the meeting and any adjournment thereof.
Unless a contrary direction is indicated, the shares
represented by this proxy will be voted for all nominees for
directors named above. If specific instructions are indicated,
this proxy will be voted in accordance with such instructions.
Please vote, date and sign this proxy and return it at once,
whether or not you expect to attend the meeting. You may vote in
person if you do attend.
Date:________________________________
_____________________________________
_____________________________________
Signature(s)
Note: if signing for estates, trusts or corporations, title or
capacity should be stated. If shares are held jointly, each
holder should sign.
