<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SPECIALTY CHEMICAL RESOURCES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
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<PAGE> 2
SPECIALTY CHEMICAL RESOURCES, INC.
[LOGO] 9100 Valley View Road
Macedonia, Ohio 44056
------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1995
------------------------------------
To Our Stockholders:
The Annual Meeting (the "Annual Meeting") of Stockholders of Specialty
Chemical Resources, Inc. (the "Company) will be held at the offices of Specialty
Chemical Resources, Inc., 9100 Valley View Road, Macedonia, Ohio 44056 on June
8, 1995 at 10:00 a.m. (Cleveland time) for the following purposes:
I. To elect six Directors of the Company for the ensuing year;
II. To ratify the appointment of Grant Thornton as the independent
accountants for the Company; and
III. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
Only stockholders of record as of the close of business on April 17, 1995
are entitled to notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
EDWIN M. ROTH
Chairman of the Board
and President
April 28, 1995
PLEASE DATE AND EXECUTE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE
ENCLOSED STAMPED ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
<PAGE> 3
SPECIALTY CHEMICAL RESOURCES, INC.
[LOGO] 9100 Valley View Road
Macedonia, Ohio 44056
------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 1995
------------------------------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders of Specialty
Chemical Resources, Inc., a Delaware corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company from
the holders of the Company's common stock, par value $.10 per share ("Common
Stock"), for use at the Annual Meeting of Stockholders of the Company to be held
at 10:00 a.m., Cleveland time, on June 8, 1995 (the "Annual Meeting"), at the
offices of Specialty Chemical Resources, Inc., 9100 Valley View Road, Macedonia,
Ohio 44056.
Stockholders of record as of the close of business on April 17, 1995 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
or postponements thereof. On that date there were outstanding 3,932,602 shares
of Common Stock. Each share of Common Stock is entitled to one vote on all
matters to come before the Annual Meeting. The Company has no other class of
voting securities outstanding.
Shares of Common Stock cannot be voted at the Annual Meeting unless the
holder thereof is present or represented by proxy. When proxies in the
accompanying form are returned, properly executed, the shares represented
thereby will be voted as specified on such proxies. All votes represented by the
enclosed proxy will be cast (i) for the six nominees named herein, unless
authorization to do so is withheld by a stockholder, and (ii) in the manner
specified by a stockholder with respect to the proposal to ratify the
appointment of Grant Thornton as the independent accountants for the Company,
except that in the absence of such specification, the votes will be cast "FOR"
such proposal. Any stockholder giving a proxy has the right to revoke it at any
time prior to its exercise, either by delivering a notice in writing to the
Secretary of the Company or by voting in person at the Annual Meeting.
At the Annual Meeting, the results of stockholder voting will be tabulated
by the inspector of elections appointed for the Annual Meeting. Under Delaware
law and the Company's Restated Certificate of Incorporation and By-laws,
properly executed proxies that are (i) marked "abstain" or (ii) held in "street
name" by brokers and that are not voted on one or more particular proposals (if
otherwise voted on at least one proposal), will be counted for purposes of
determining whether a quorum has been achieved at the Annual Meeting.
Abstentions will have the same effect as a vote against the proposal to which
such abstention applies. Broker non-votes will not be treated as either a vote
for or a vote against any of the proposals to which such broker non-votes apply.
The approximate date on which this Proxy Statement and the enclosed proxy
are first being sent to stockholders is April 28, 1995.
<PAGE> 4
I. ELECTION OF DIRECTORS
At the Annual Meeting, six Directors are to be elected for the ensuing year
to hold office until the next Annual Meeting and until their successors shall
have been elected and shall have qualified. Pursuant to the Company's By-laws,
provided that a quorum is present, Directors are elected by a majority of the
votes cast in the election. Unless otherwise specified, the shares represented
by the enclosed proxy will be voted "FOR" the election of the six nominees named
below. In the event that any nominee refuses or is unable to serve as a Director
(which is not now anticipated), the persons named as proxies reserve full
discretion to vote for such other person as may be nominated.
INFORMATION AS TO THE NOMINEES, THE BOARD OF DIRECTORS
AND THE EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information about each nominee for election as a
Director and each executive officer of the Company (based on information
supplied by him), including his name, age, positions with the Company (other
than as a Director) and principal occupations during the past five years.
<TABLE>
<CAPTION>
Name, Age and Positions
With the Company
Other than Director Occupation and Other Information
- ---------------------------------------- --------------------------------------------------
<S> <C>
NOMINEES
Edwin M. Roth, 67 Mr. Roth has been a Director and President of the
President and Chairman of Company and Chairman of the Board of Directors of
the Board of Directors the Company since its formation in June 1982. Mr.
Roth was Chief Executive Officer of Aerosol
Systems, Inc. ("ASI"), a former subsidiary of the
Company acquired effective December 31, 1988 and
merged into the Company effective December 30,
1992, from January 1989 until December 1992. Mr.
Roth is the father of Corey B. Roth, a Director
and executive officer of the Company.
Corey B. Roth, 37 Mr. Roth has been a Vice President of the Company
Vice President, Treasurer since June 1982, a Director since October 1984 and
and Assistant Secretary Treasurer and Assistant Secretary since June 1992.
Mr. Roth served as Secretary from October 1984
until June 1992 and Treasurer from November 1987
until January 1990. Mr. Roth was Vice President of
Administration of ASI from April 1989 until
December 1992. Mr. Roth is the son of Edwin M.
Roth.
George N. Aronoff, 61 Mr. Aronoff has been a Director of the Company
Secretary since May 1989 and Secretary since June 1992. Mr.
Aronoff was also a Director of the Company from
February 1982 until September 1984. Mr. Aronoff
has been a partner in the Cleveland law firm of
Benesch, Friedlander, Coplan & Aronoff, counsel to
the Company, for more than the past five years.
Mr. Aronoff is also a Director of Bally
Entertainment Corporation.
Victor Gelb, 68 Mr. Gelb has been a Director of the Company since
May 1989. Mr. Gelb is President and Chief
Executive Officer of Victor Gelb Inc., a
manufacturer of reinforcement fibers, a position
which he has held for more than five years. Mr.
Gelb is also a Director of Pioneer Standard
Electronics, Inc.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
Name, Age and Positions
With the Company
Other than Director Occupation and Other Information
- ---------------------------------------- --------------------------------------------------
<S> <C>
Norton W. Rose, 66 Mr. Rose has been a Director of the Company since
May 1989. Since 1991, Mr. Rose has been Vice
Chairman of Blue Coral, Inc., a privately-owned
consumer chemical company, and Chairman of Premier
Travel Partners, a privately-owned travel
management company. Since January 1994, Mr. Rose
has been Executive Vice President of Creativity
for Kids, a privately-owned toy company. From
November 1991 until January 1993, Mr. Rose was
Chairman of Action Auto Rental, Inc., an
automobile leasing company. Action Auto Rental,
Inc. filed for bankruptcy protection under Chapter
11 of the Bankruptcy Code on January 28, 1993.
From 1985 until August 1990, Mr. Rose was Vice
Chairman of Progressive Corporation, a liability
and casualty insurance company. Mr. Rose is also a
Director of Telxon Corporation, LDI Corporation
and Cohesant Technologies.
Lionel N. Sterling, 57 Mr. Sterling has been a Director of the Company
since May 1989. Mr. Sterling was also a Director
of the Company from February 1982 until September
1984. Since January 1987, Mr. Sterling has been
President of Equity Resources, Inc., a private
investment company. From July 1988 to September
1992, Mr. Sterling was Managing Partner of
Whitehead/Sterling, an investment management firm.
Mr. Sterling is also a Director of I-Stat
Corporation.
EXECUTIVE OFFICER
John H. Ehlert, 42 Mr. Ehlert has been a Vice President of the
Vice President, and Company since April 1992. He was President of ASI
President of Aerosol from April 1992 until December 1992, when ASI was
Systems Division merged into the Company, at which time he became
President of the Aerosol Systems Division. From
February 1990 until April 1992, Mr. Ehlert was
Vice President of Marketing and Sales of ASI.
</TABLE>
The Board of Directors held six meetings during the fiscal year ended
December 31, 1994. The Board of Directors has an Audit Committee, a Nominating
Committee, and a Stock Option and Compensation Committee. The general functions
of such Board committees, the identity of each committee member and the number
of committee meetings held by each committee during the last fiscal year are set
forth below.
The Audit Committee acts as a liaison between the Company's independent
auditors and the Board of Directors, reviews the scope of the annual audit,
reviews the Company's annual and quarterly financial statements and reviews the
sufficiency of the Company's internal accounting controls. The Audit Committee
consists of Victor Gelb, Norton W. Rose and Lionel N. Sterling. The Audit
Committee held two meetings during the fiscal year ended December 31, 1994. Each
of the members of the Audit Committee attended the meetings.
The Nominating Committee is responsible for making recommendations to the
Board of Directors with respect to the organization and size of the Board and
its committees, for selecting candidates for
3
<PAGE> 6
election to the Board of Directors and its committees and for considering the
qualifications of Directors. There is no established procedure for submission of
nominations by stockholders. The Nominating Committee consists of George N.
Aronoff, Corey B. Roth and Edwin M. Roth. The Nominating Committee held one
meeting during the fiscal year ended December 31, 1994. Each of the members of
the Nominating Committee attended the meeting.
The Stock Option and Compensation Committee is responsible for the approval
of grants of options under the Company's stock option plan for officers and key
employees of and consultants to the Company and makes recommendations regarding
the compensation of officers and key employees of the Company. The Stock Option
and Compensation Committee consists of George N. Aronoff, Victor Gelb and Norton
W. Rose. The Stock Option and Compensation Committee held one meeting during the
fiscal year ended December 31, 1994. Each of the members of the Stock Option and
Compensation Committee attended the meeting.
DIRECTOR REMUNERATION
Directors who are not employed by the Company received in 1994 an annual
fee of $12,000, reimbursement for travel expenses, a fee of $500 for each Board
meeting attended and a fee of $500 for each meeting of a committee of the Board
attended that was not held on the same day as a Board meeting.
During fiscal 1994, the Company retained the law firm of Benesch,
Friedlander, Coplan & Aronoff as counsel to the Company. Mr. Aronoff, a Director
of the Company, is a partner with this law firm. The Company plans to retain
this firm during the coming year.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company is required to identify any director or executive officer who
failed to file, on a timely basis, with the Securities and Exchange Commission
(the "Commission") a required report relating to ownership and changes in
ownership of the Company's equity securities. Based on material provided to the
Company, it believes that during 1994, the Directors and executive officers of
the Company complied with all such filing requirements.
4
<PAGE> 7
<TABLE>
COMMON STOCK OWNERSHIP
The following table sets forth, as of April 12, 1995, based on information
provided to the Company by the persons named in the table, the number of shares
of Common Stock owned by each Director, each executive officer and by the
Directors and executive officers of the Company as a group, and the persons or
groups of persons known to the Company to be the beneficial owners of more than
5% of the Common Stock of the Company.
<CAPTION>
Amount and Nature of
Name, and Address if applicable, of Beneficial Percentage
Beneficial Owner Ownership(1) Ownership
- ------------------------------------------- -------------------- ----------
<S> <C> <C>
Edwin M. Roth 657,405(2)(3) 16.36%
Specialty Chemical Resources, Inc.
9100 Valley View Road
Macedonia, Ohio 44056
Corey B. Roth 161,611(2)(3) 4.05%
John H. Ehlert 45,714(3) 1.15%
George N. Aronoff 27,467(3) *
Victor Gelb 9,107(3) *
Norton W. Rose 9,035(3) *
Lionel N. Sterling 38,857(3) *
All Directors and officers as a group 942,946(3) 22.70%
(seven individuals)
Merrill Lynch Phoenix Fund, Inc.(4) 360,000(5) 9.10%
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Pioneering Management Corporation(4) 387,200(6) 9.85%
60 State Street
Boston, Massachusetts 02109
Dimensional Fund Advisors Inc.(4) 222,100(7) 5.65%
1299 Ocean Avenue
Eleventh Floor
Santa Monica, California 90401
- ---------------
<FN>
* Less than one percent.
(1) Except as otherwise indicated, the persons listed as beneficial owners of
the shares of Common Stock have sole voting and investment power with
respect to those shares.
(2) Includes 6,250 shares of Common Stock owned by the Edwin M. Roth Family
Foundation, Inc., a not-for-profit Ohio corporation. Edwin M. Roth and Corey
B. Roth are both officers and trustees of such foundation and have shared
voting and investment power with respect to the shares of Common Stock owned
by such foundation.
(3) Includes the following number of shares of Common Stock which such persons
have or had within 60 days after April 12, 1995 the right to acquire upon
the exercise of options: Mr. Edwin M. Roth, 86,667; Mr. Corey B. Roth,
54,048; Mr. Ehlert, 45,714; Mr. Aronoff, 8,750; Mr. Gelb 8,750; Mr. Rose,
8,750; Mr. Sterling, 8,750; and all current officers and Directors as a
group, 221,429.
(4) All information contained in this table regarding the identified beneficial
owner and its security ownership, including related footnotes, is based
solely on the Schedule 13G filing made by such beneficial owner as of the
date of such filing.
(5) Merrill Lynch Phoenix Fund, Inc. (the "Fund") is an investment company
advised by Fund Asset Management, LP. ("FAM"), an investment advisor.
Princeton Service, Inc. ("PSI") is the general partner of FAM and a
wholly-owned subsidiary of Merrill Lynch Group, Inc. ("MLG"). MLG is a
wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("MLC"). The Fund, FAM,
PSI, MLG, and
5
<PAGE> 8
MLC (together, the "Reporting Persons") have all made Schedule 13G filings
with respect to all of the identified shares of Common Stock and all of
which have expressly disclaimed beneficial ownership of such shares. The
Reporting Persons have shared voting power over 360,000 shares and shared
investment power over 360,000 shares.
(6) Pioneering Management Corporation has sole voting power over 387,200 shares,
sole investment power over 57,200 shares and shared investment power over
330,000 shares.
(7) Dimensional Fund Advisors Inc. has sole voting power over 158,700 shares and
sole investment power over 222,100 shares. Certain officers of Dimensional
Fund Advisors Inc. also serve as officers of DFA Investment Dimensions Group
Inc. (the "Fund") and The DFA Investment Trust Company (the "Trust"). In
their capacities as officers of the Fund and the Trust, these persons vote
37,800 additional shares which are owned by the Fund and 25,600 shares which
are owned by the Trust. These shares are included in the number of shares
over which Dimensional Fund Advisors Inc. has sole investment power.
</TABLE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth the compensation paid to or deferred for the
executive officers of the Company at December 31, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
AWARDS
ANNUAL COMPENSATION ----------------------- PAYOUTS
------------------------------------- RESTRICTED -------
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#)(1) ($) ($)(4)
- ------------------- ---- -------- ------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edwin M. Roth 1994 $250,000 $75,000 $0 $0 20,000 $ 0 $ 0
President & 1993 225,000 75,000 0 0 30,000 0 0
Chairman 1992 168,750 0 0 0 60,000 0 0
Corey B. Roth 1994 $167,500 $50,000 $0 $0 10,000 $ 0 $6,738
Vice President 1993 157,500 50,000 0 0 15,000 0 6,738
& Treasurer 1992 145,000 30,000 0 0 40,714(2) 0 6,738
John H. Ehlert 1994 $155,000 $50,000 $0 $0 10,000 $ 0 $9,181
Vice President 1993 142,500 50,000 0 0 10,000 0 9,181
1992 121,250 40,000 0 0 37,142(3) 0 9,181
- ---------------
<FN>
(1) There were no SAR grants by the Company in 1992, 1993 or 1994.
(2) Includes 714 options granted in 1991 that were repriced on March 5, 1992,
the effective date of a public offering of Common Stock by the Company, to
the public offering price of $10.00 per share. Prior to such offering, there
was not an established public market for the Common Stock.
(3) Includes 2,142 options granted in 1990 and 1991 (prior to the time Mr.
Ehlert became an executive officer of the Company) that were repriced on
March 5, 1992, the effective date of a public offering of Common Stock by
the Company, to the public offering price of $10.00 per share. Prior to such
offering, there was not an established public market for the Common Stock.
(4) Represents the dollar value of term life insurance premiums paid during each
fiscal year by the Company for the benefit of Messrs. Corey Roth and Ehlert.
</TABLE>
OPTION AND SAR GRANTS
The following table summarizes options granted in the last fiscal year to
the executive officers of the Company and potential realizable value of the
options assuming a 5% and 10% annually compounded stock price appreciation.
There were no SAR grants by the Company in 1994.
6
<PAGE> 9
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED
OPTION/SAR GRANTS IN LAST FISCAL YEAR ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM
- ------------------------------------------------------------------------------------------- -----------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED
GRANTED TO EMPLOYEES IN EXERCISE OR BASE 5% 10%
NAME (#)(1) FISCAL YEAR PRICE ($/SH) EXPIRATION DATE ($) ($)
- -------------- ------------ --------------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Edwin M. Roth 20,000 23.4% $ 4.50 4/18/99 $ 24,867 $ 54,946
Corey B. Roth 10,000 11.7% $ 4.50 4/18/99 $ 12,433 $ 27,473
John H. Ehlert 10,000 11.7% $ 4.50 4/18/99 $ 12,433 $ 27,473
- ---------------
<FN>
(1) Options are exercisable as to one-third of the shares covered on each of the
first, second and third anniversaries of the date of grant and the term of
each option grant is five years.
</TABLE>
OPTION AND SAR EXERCISES
The following table summarizes the exercise of options for the Company's
Common Stock by the executive officers of the Company during the last fiscal
year and the year-end balances of exercisable and unexercisable options of the
executive officers. The Company has no outstanding SARs.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES ACQUIRED VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END
ON EXERCISE REALIZED (#) ($)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------- --------------- -------- ------------------------- --------------------------
<S> <C> <C> <C> <C>
Edwin M. Roth 0 $0 50,000/60,000 $0/$0
Corey B. Roth 0 $0 32,381/33,333 $0/$0
John H. Ehlert 0 $0 28,810/28,333 $0/$0
</TABLE>
REPORT OF THE STOCK OPTION AND COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The 1994 compensation of Mr. Edwin M. Roth and the other executive officers
of the Company was recommended to the Board of Directors by the Stock Option and
Compensation Committee (the "Committee") which is composed of three non-employee
Directors. The Committee is responsible for approval (or recommendation to the
Board of Directors) of the compensation arrangements for senior management,
Directors and other key employees; review of benefit plans in which officers and
Directors are eligible to participate; periodic review of the equity
compensation plans of the Company and grants under such plans; and oversight of
management development to insure continuity of senior management.
While the Company does not have specific annual goals for each executive
officer upon which to base compensation decisions, the Committee believes that
there should be a strong correlation between executive compensation and
compensation paid by comparable companies as well as overall Company
performance, both to reward outstanding executive effort and to encourage it in
the future. In this way maximum stockholder return can be expected. The Company
presently uses a flexible array of salary, bonus and stock option plans to
compensate and motivate its executive officers. The nature and manner of
application of these various compensation tools for executive officers is
determined subjectively by the Board of Directors upon the recommendation of the
Committee.
In 1994 the Company strived to provide an overall compensation package for
each executive officer that fairly reflected that officer's contribution in
relation to overall Company performance and that would motivate that officer to
improve such performance in the future. The bases used to
7
<PAGE> 10
determine Mr. Edwin M. Roth's compensation were the same as those for the other
executive officers of the Company. Base salary was determined subjectively upon
consideration of salary history, expected individual contribution and the
Committee's belief that the base salary established in 1994 is more in line with
executive compensation paid by comparable companies. No bonuses were paid to the
Company's executive officers with respect to fiscal 1994. The bonuses paid
during 1994 were paid with respect to performance during fiscal 1993.
Finally, during 1994 the Committee awarded stock options to the executive
officers. In determining the size of stock option awards, the Committee
considered, among other things, previous awards made to executive officers. Such
an incentive was meant to keep experienced executives with the Company while at
the same time motivating them to contribute to improvements in the stock
performance of the Company and to encourage and create ownership and retention
of the Company's stock.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to a public corporation for compensation over $1
million paid to the corporation's chief executive officer and four other most
highly compensated executive officers. Qualifying performance-based compensation
will not be subject to the cap if certain requirements are met. The Committee
and the Board of Directors intend to structure the compensation of its executive
officers in a manner that should insure that the Company does not lose any tax
deductions because of the $1 million compensation limit. The Committee does not
expect that this cap will cause the Company to lose any tax deductions in the
foreseeable future. The Company's salaries for its highest paid executives, when
added to annual bonus awards, do not approach $1 million.
Stock Option and Compensation
Committee
Victor Gelb
Norton W. Rose
George N. Aronoff
PERFORMANCE GRAPH
The following graph compares the performance of the Common Stock ("CHM") to
the Value Line Chemical Specialty Industry Index ("Industry Group") and the
Russell 2000 Index ("Russell 2000") for the period commencing December 31, 1989,
the last trading day before the beginning of the Company's fifth preceding
fiscal year, and ending December 31, 1994. The results assume that $100 was
invested on December 31, 1989 in CHM, Industry Group and Russell 2000 and that,
in the case of Industry Group and Russell 2000, dividends have been reinvested.
No dividends were paid on the Common Stock during this period.
8
<PAGE> 11
<TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN
CHM, INDUSTRY GROUP, RUSSELL 2000
<CAPTION>
MEASUREMENT PERIOD INDUSTRY
(FISCAL YEAR COVERED) CHM GROUP RUSSELL 2000
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 83.33 103.17 80.49
1991 20.00 152.73 117.56
1992 22.86 172.54 139.21
1993 26.19 196.16 165.52
1994 11.43 191.27 162.24
<FN>
Notes: (1) CHM data has been adjusted to reflect a one-for-fourteen reverse
stock split effected in December 1991.
(2) CHM data for the period commencing December 31, 1989 and ending
December 31, 1991 reflects the closing bid prices on the Interdealer
Quotation System of NASDAQ and the closing bid quotations as
reported in the National Daily Quotation Bureau Pink Sheets ("Pink
Sheets"). CHM data for the periods ending December 31, 1992 and 1993
reflects the closing price of the Common Stock as reported in the
AMEX-Composite Transactions.
(3) CHM data for the period ended December 31, 1991 reflects the closing
bid quotation reported in the Pink Sheets on August 1, 1991, the
last day during 1991 for which trading of the Common Stock was
reported.
</TABLE>
II. INDEPENDENT PUBLIC ACCOUNTANTS
The public accounting firm of Grant Thornton was the Company's independent
public accountants for fiscal 1994 and has been appointed, subject to
stockholder ratification at the Annual Meeting, to continue in such capacity for
the current fiscal year. A representative of Grant Thornton is expected to be
present at the Annual Meeting and will have an opportunity to respond to
appropriate questions and make a statement if he or she so desires.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF GRANT THORNTON AS THE INDEPENDENT ACCOUNTANTS FOR THE COMPANY.
9
<PAGE> 12
OTHER MATTERS
All expenses of the Company in connection with this solicitation will be
borne by the Company. Solicitation will be made principally by mail, but
officers and regular employees may solicit proxies by telephone or personal
contact with nominal expense to the Company. The Company will request brokers
and other nominees who hold Common Stock in their names to solicit proxies from
the beneficial owners and will pay the standard charges and expenses associated
therewith.
In order for a stockholder proposal to be included in next year's proxy
statement for presentation at next year's meeting, it must be received by the
Secretary of the Company at its principal executive offices, 9100 Valley View
Road, Macedonia, Ohio 44056, not later than December 21, 1995.
Management of the Company knows of no other matter that may come before the
Annual Meeting. If other matters properly come before the Annual Meeting, it is
intended that proxies in the accompanying form will be voted thereon in
accordance with the best judgment of the person voting the proxies.
By Order of the Board of Directors
EDWIN M. ROTH
Chairman of the Board
and President
Cleveland, Ohio
April 28, 1995
10
<PAGE> 13
SPECIALTY CHEMICAL RESOURCES, INC.
9100 Valley View Road THIS PROXY IS SOLICITED ON
Macedonia, Ohio 44056 BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edwin M. Roth and Corey B. Roth,
or either of them, proxies of the undersigned with full power of
substitution, to vote for the undersigned at the Annual Meeting of
Stockholders to be held on June 8, 1995, at 10:00 a.m. (Cleveland
time), at the offices of Specialty Chemical Resources, Inc., 9100
Valley View Road, Macedonia, Ohio 44056, or at any adjournment(s) or
postponement(s) thereof, as follows:
I. Election of directors
<TABLE>
<S> <C>
/ / FOR the six nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for the nominees listed below
</TABLE>
EDWIN M. ROTH, COREY B. ROTH, GEORGE N. ARONOFF,
VICTOR GELB, NORTON W. ROSE, LIONEL N. STERLING
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided
below.)
----------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SIX NOMINEES LISTED
ABOVE.
II. Ratification of the appointment of Grant Thornton as the
independent accountants for Specialty Chemical Resources, Inc.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NUMBER II.
III. In their discretion on all other matters that may properly come
before the meeting.
(Continued on the reverse side)
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE SIX NOMINEES LISTED ABOVE AND
FOR PROPOSAL II.
PLEASE DATE, SIGN EXACTLY AS NAME APPEARS BELOW, AND RETURN THIS PROXY
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
Dated: , 1995
----------------------------
Signature
----------------------------
Signature, if held jointly
(If signing as attorney,
administrator, executor,
trustee, guardian, etc.,
please add your title as
such.)
No additional postage need
be affixed to the enclosed
envelope if mailed in the
United States. Your prompt
attention will be of
assistance.
