<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
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:
( ) Preliminary proxy statement
(x) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NL Industries, Inc.
(Name of Registrant as Specified in Its Charter)
NL Industries, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
(x) $125 per Exchange Act Rule 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
14-6(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:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
( ) 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: Not Applicable
(2) Form, schedule or registration statement no.: Not Applicable
(3) Filing party: Not Applicable
(4) Date filed: Not Applicable
<PAGE> 2
J. LANDIS MARTIN
President and
Chief Executive Officer
(NL LOGO)
NL INDUSTRIES, INC.
3000 NORTH SAM HOUSTON PARKWAY EAST
HOUSTON, TEXAS 77032
March 30, 1994
Dear Shareholder:
You are cordially invited to attend the 1994 Annual Meeting of
Shareholders of NL Industries, Inc. which will be held on Wednesday, May 4,
1994, at 10:30 a.m. (local time) at the Sheraton Crown Hotel, 15700 John F.
Kennedy Boulevard, Houston, Texas. In addition to the matters to be acted upon
at the meeting, which are described in detail in the attached Notice of Annual
Meeting of Shareholders and Proxy Statement, we will report to the shareholders
on the operations of NL. I hope that you will be able to attend.
Whether or not you plan to be at the meeting, please complete, date,
sign and return the proxy card or voting instruction form enclosed with this
Proxy Statement as promptly as possible so that your shares are represented at
the Meeting and voted in accordance with your wishes. Your vote, whether given
by proxy or in person at the Meeting, will be held in confidence by the
Inspector of Election for the meeting in accordance with NL's By-laws.
Sincerely,
/s/ J. LANDIS MARTIN
J. Landis Martin
President and Chief Executive Officer
NL INDUSTRIES, INC.
3000 N. Sam Houston Pkwy. East, P.O. Box 60087, Houston, Texas 77205,
Tel. (713) 987-5000
<PAGE> 3
NL INDUSTRIES, INC.
3000 NORTH SAM HOUSTON PARKWAY EAST
HOUSTON, TEXAS 77032
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1994
To the Shareholders of NL Industries, Inc.:
NOTICE IS HEREBY GIVEN that the 1994 Annual Meeting of Shareholders
(the "Annual Meeting") of NL Industries, Inc., a New Jersey corporation (the
"Company" or "NL"), will be held on Wednesday, May 4, 1994, at 10:30 a.m.
(local time) at the Sheraton Crown Hotel, 15700 John F. Kennedy Boulevard,
Houston, Texas, for the following purposes:
1. To elect seven directors to serve until the 1995 Annual
Meeting of Shareholders and until their successors are duly
elected and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors of the Company set the close of business on
March 29, 1994 as the record date (the "Record Date") for the determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. Only
holders of record of NL's common stock, $.125 par value per share ("Common
Stock"), at the close of business on the Record Date are entitled to notice of,
and to vote at, the Annual Meeting. The Company's stock transfer books will not
be closed following the Record Date.
You are cordially invited to attend the Annual Meeting. Whether or not
you expect to attend the Annual Meeting in person, please complete, sign, date
and mail the enclosed proxy card or voting instruction form promptly so that
your shares may be represented and voted at the Annual Meeting. You may revoke
your proxy by following the procedures set forth in the accompanying Proxy
Statement. If you choose, you may vote in person at the Annual Meeting even
though you previously submitted your proxy.
By order of the Board of Directors,
/s/ DAVID B. GARTEN
David B. Garten
Vice President, Secretary and General Counsel
Houston, Texas
March 30, 1994
<PAGE> 4
NL INDUSTRIES, INC.
3000 NORTH SAM HOUSTON PARKWAY EAST
HOUSTON, TEXAS 77032
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy card or voting
instruction form are being furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors (the "Board") of NL
Industries, Inc., a New Jersey corporation (the "Company" or "NL"), for use at
the Company's 1994 Annual Meeting of Shareholders to be held at 10:30 a.m.
(local time) on Wednesday, May 4, 1994, at the Sheraton Crown Hotel, 15700 John
F. Kennedy Boulevard, Houston, Texas, and at any adjournment or postponement
thereof (the "Annual Meeting"). This Proxy Statement and the accompanying proxy
card or voting instruction form were first mailed to the holders of the
Company's common stock, $.125 par value per share ("Common Stock"), on or about
April 1, 1994.
PURPOSE OF ANNUAL MEETING
At the Annual Meeting, shareholders of the Company will consider and
vote upon (i) the election of seven directors to serve until the Company's 1995
Annual Meeting of Shareholders and until their successors are duly elected and
qualified, and (ii) such other business as may properly come before the Annual
Meeting. The Company is not aware of any business to come before the Annual
Meeting other than the election of directors.
QUORUM AND VOTING RIGHTS; PROXY SOLICITATION
The presence, in person or by proxy, of the holders of a majority of
the votes represented by the outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum for the conduct
of business at the Annual Meeting. The accompanying proxy card provides space
for a shareholder to withhold voting for any or all nominees for the Board of
Directors. Director nominees will be elected by a plurality of the votes cast.
Except as may be provided in the Company's Amended and Restated Certificate of
Incorporation (the "Certificate"), any other matter that may be submitted to a
shareholder vote would require the affirmative vote of a majority of the votes
cast at the Annual Meeting. Shares of Common Stock that are voted to abstain
from business coming before the Annual Meeting and broker non-votes will be
counted as being in attendance at the Annual Meeting for purposes of
determining whether a quorum is present, but will not be counted for the
purpose of determining whether matters coming before the Annual Meeting have
been approved. Assuming a quorum is present, director nominees must receive a
plurality of the votes cast at the Annual Meeting, which means that a vote
withheld from a particular nominee will not affect the election of that
nominee. The record date for determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting is the close of business on March 29,
1994 (the "Record Date"). As of the Record Date, there were issued and
outstanding 50,889,943 shares of Common Stock, each of which is entitled to one
vote on all matters that come before the Annual Meeting. Valhi, Inc. ("Valhi")
and Tremont Corporation ("Tremont") held approximately 49% and 18%,
respectively, of the outstanding shares of the Common Stock as of the Record
Date and have indicated their intention to have their shares represented at the
Annual Meeting. Tremont is Valhi's 48%-owned titanium metals affiliate. See
"Security Ownership" and "Election of Directors." If Valhi's and Tremont's
shares of Common Stock are represented at the Annual Meeting, a quorum will be
present.
All shares of Common Stock represented by properly executed proxies
will, unless such proxies have been previously revoked, be voted in accordance
with the instructions indicated in such proxies. If no such instructions are
indicated, such shares will be voted (i) "FOR" the election of the seven
nominees for director and (ii) in the discretion of the proxy holders on any
other matter that may properly come before the Annual Meeting. Any holder of
Common Stock has the unconditional right to revoke his or her proxy at any time
prior to the voting thereof at the Annual Meeting by (i) filing with the
secretary of the Annual Meeting written revocation of his or her proxy, (ii)
giving a duly executed proxy bearing a later date, or (iii) voting in person at
the Annual Meeting. Attendance by a shareholder at the Annual Meeting will not
in itself revoke his or her proxy,
<PAGE> 5
(ii) giving a duly executed proxy bearing a later date, or (iii) voting in
person at the Annual Meeting. Attendance by a shareholder at the Annual Meeting
will not in itself revoke his or her proxy.
This proxy solicitation is made by and on behalf of the Board.
Solicitation of proxies for use at the Annual Meeting may be made by mail,
telephone or in person, by directors, officers and regular employees of the
Company. Such persons will receive no additional compensation for any
solicitation activities. The Company will request banking institutions,
brokerage firms, custodians, trustees, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of Common Stock held of record
by such entities, and the Company will, upon the request of such record
holders, reimburse reasonable forwarding expenses. The costs of preparing,
printing, assembling and mailing the Proxy Statement, proxy card or voting
instruction form and all materials used in the solicitation of proxies from
shareholders of the Company, and all clerical and other expenses of such
solicitation, will be borne by the Company.
First Chicago Trust Company of New York ("First Chicago"), the
transfer agent and registrar for the Common Stock, has been appointed by the
Board to serve as inspector of election (the "Inspector of Election") to count
and ascertain the number of shares of Common Stock represented at the Annual
Meeting. All proxies and ballots delivered to First Chicago shall be kept
confidential by First Chicago in accordance with the terms of the Company's
By-laws.
ELECTION OF DIRECTORS
The Certificate (as defined above) provides for a Board of Directors
consisting of not less than seven and not more than seventeen persons, as such
number is determined from time to time by a majority of the entire Board. The
Board has determined that it shall consist of seven members.
At the Annual Meeting, holders of Common Stock will be asked to elect
seven director nominees to the Board each to serve for a one year term ending
at the 1995 Annual Meeting of Shareholders or until his successor shall have
been elected and qualified or until his earlier resignation or removal. All of
the nominees are currently directors of the Company and have agreed to serve if
elected. Directors will be elected at the Annual Meeting by a plurality of the
shares voting in the election of directors.
IT IS THE INTENTION OF THE AGENTS DESIGNATED IN THE ENCLOSED PROXY
CARD TO VOTE "FOR" THE ELECTION OF ALL SEVEN NOMINEES UNLESS OTHERWISE
SPECIFIED BY THE SHAREHOLDER GRANTING THE PROXY. IF ANY NOMINEE BECOMES
UNAVAILABLE TO SERVE FOR ANY REASON, THE PROXY WILL BE VOTED FOR A SUBSTITUTE
NOMINEE OR NOMINEES TO BE SELECTED BY THE BOARD, UNLESS THE SHAREHOLDER
WITHHOLDS AUTHORITY TO VOTE FOR THE ELECTION OF DIRECTORS. VALHI AND TREMONT,
WHICH HOLD APPROXIMATELY 49% AND 18%, RESPECTIVELY, OF THE OUTSTANDING COMMON
STOCK, HAVE INFORMED THE COMPANY THAT THEY INTEND TO VOTE THEIR SHARES IN FAVOR
OF THE NOMINEES SET FORTH IN THIS PROXY STATEMENT. VALHI'S AND TREMONT'S
VOTES, TOGETHER, ARE SUFFICIENT TO ELECT ALL SEVEN NOMINEES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES IDENTIFIED
BELOW.
2
<PAGE> 6
NOMINEES FOR DIRECTOR
The information provided below has been provided by the respective
nominees for election as directors for a term expiring at the 1995 Annual
Meeting of Shareholders of the Company. Each of the following nominees for
election as a director is currently a director of the Company whose term
expires at the Annual Meeting:
J. LANDIS MARTIN, 48, has been President and Chief Executive Officer
of NL since 1987, and a director of NL since 1986. He has been a director and
Chief Executive Officer of Tremont since prior to 1989 and has been Chairman of
the Board of Tremont since 1990. Except for a period in 1990, Mr. Martin has
served as President of Tremont since prior to 1989. From 1990 to 1994, Mr.
Martin also served as Chairman of the Board and Chief Executive Officer of
Baroid Corporation ("Baroid"), a company engaged in the petroleum services
industry, which was merged into a wholly-owned subsidiary of Dresser
Industries, Inc. ("Dresser") in January 1994. Since the effective date of such
merger, Mr. Martin has served as a director of Dresser.
KENNETH R. PEAK, 48, has been a director of NL since 1989. Mr. Peak
has been President of Peak Enernomics, Inc., an energy industry consulting
firm, since 1990 and was managing director and co-head, Corporate Finance, for
Howard, Weil, Labouisse, Friedrichs Incorporated, an investment banking firm,
from 1989 to 1990. Prior to 1989, Mr. Peak served as Vice President of Finance
of Forest Oil Company. Mr. Peak is Chairman of NL's Audit Committee and
Management Development and Compensation Committee and is a member of NL's
Nominations Committee.
GLENN R. SIMMONS, 66, has been a director of NL since 1986. Since
prior to 1989, Mr. Simmons has been Vice Chairman of the Board and a director
of Valhi, a diversified industrial management company, and Contran Corporation
("Contran"), a diversified holding company which directly and through related
entities holds approximately 90% of the outstanding common stock of Valhi. Mr.
Simmons is also a director of Tremont and Vice Chairman of the Board and a
director of Valcor, Inc. ("Valcor"), Valhi's wholly-owned registered subsidiary
engaged in the forest products, fast foods and hardware products industries.
Mr. Simmons is also Chairman of the Board and Chief Executive Officer of
Keystone Consolidated Industries, Inc., a majority-owned subsidiary of Contran
engaged in the manufacture of steel rod, wire and wire products. Mr. Simmons
has been an executive officer and/or director of various companies related to
Contran since 1969. He is a brother of Harold C. Simmons.
HAROLD C. SIMMONS, 62, has been a director of NL since 1986 and
Chairman of the Board of NL since 1987. Since prior to 1989, Mr. Simmons has
also been Chairman of the Board, Chief Executive Officer and a director of
Valhi and Contran. Mr. Simmons is also a director of Tremont and Chairman of
the Board, Chief Executive Officer and a director of Valcor and served as
Tremont's Chairman of the Board from prior to 1989 to 1990. Mr. Simmons has
been an executive officer and/or director of various companies related to
Contran since 1968. He is a brother of Glenn R. Simmons.
MICHAEL A. SNETZER, 53, has been a director of NL since 1986. Mr.
Snetzer has served as President and a director of Valhi and Contran since prior
to 1989. Mr. Snetzer is also President and a director of Valcor and a director
of Tremont. Mr. Snetzer has been an executive officer and/or director of
various companies related to Contran since 1977. Mr. Snetzer is Chairman of
NL's Nominations Committee.
LAWRENCE A. WIGDOR, 52, has been a director and Executive Vice
President of NL since 1992. Dr. Wigdor has been President and Chief Executive
Officer of Kronos, Inc., a wholly-owned subsidiary of NL ("Kronos"), and
Chairman of the Board, President and Chief Executive Officer of Rheox, Inc.
("Rheox"), a wholly-owned subsidiary of NL, since 1990. From 1989 to 1990, Dr.
Wigdor was Chairman of the Board of MEMC Electronic Materials, Inc., a producer
of silicon wafers for the semiconductor industry. From 1986 to 1990, he served
as director, President and Chief Executive Officer of Huls America, Inc.
(formerly Nuodex, Inc.), a worldwide producer of chemicals.
3
<PAGE> 7
ELMO R. ZUMWALT, JR., 73, has been a director of NL since 1987. He is
a retired United States Navy Admiral and served as Chief of Naval Operations
and a member of the Joint Chiefs of Staff from 1970 to 1974. He has been
President of Admiral Zumwalt & Consultants, Inc., a Washington-based consulting
firm, since prior to 1989. Admiral Zumwalt is a director of Fleet Aerospace
Corporation, Fleet Aerospace Inc., Navistar International Corporation, Lincoln
Savings Bank and Dallas Semiconductor Corporation. He is also Chairman of the
International Consortium for Research on the Health Effects of Radiation,
Chairman of the National Marrow Donor Program and Chairman of the Ethics and
Public Policy Center. Admiral Zumwalt is a member of NL's Management
Development and Compensation Committee, Audit Committee and Nominations
Committee.
For information concerning legal proceedings to which certain
directors are parties and other matters, see "Certain Litigation" and "Certain
Relationships and Transactions."
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held six meetings and took action by written consent in lieu
of a meeting on three occasions in 1993. Each of the directors participated in
more than 75% of the total number of meetings of the Board and committees held
during 1993, and each of the directors executed all written consents of the
Board during the year.
The Board has established three standing committees, an Audit
Committee, a Management Development and Compensation Committee and a
Nominations Committee, all of which are composed entirely of individuals who
are not employees of the Company.
Audit Committee. The principal responsibilities of the Audit
Committee are to recommend to the Board the selection of the firm of
independent auditors; to review with the independent auditors the plan and
results of the audit engagement, the program for internal auditing, the system
of internal accounting controls and the internal audit results; to review and
approve the professional services provided by the independent auditors; and to
direct and supervise special audit inquiries. The Committee held three meetings
in 1993. Current members of the Audit Committee are Mr. Peak, Chairman, and
Admiral Zumwalt.
Management Development and Compensation Committee. The principal
responsibilities of the Management Development and Compensation Committee are
to establish policies and periodically review matters involving executive
compensation, to recommend certain changes in employee benefit programs, to
grant stock options or other stock- based compensation under the Company's
incentive plans and to serve as a counseling committee to the Chief Executive
Officer regarding matters of key personnel selection, organization strategies
and such other matters as the Board may from time to time direct. The
Management Development and Compensation Committee held one meeting in 1993. Its
current members are Mr. Peak, Chairman, Admiral Zumwalt and General Thomas P.
Stafford. Except for a period in 1986, General Stafford served as a director of
NL from 1984 to 1989. General Stafford currently serves as a director of
Tremont.
Nominations Committee. The principal responsibilities of the
Nominations Committee are to review and make recommendations to the Board
regarding such matters as the size and composition of the Board and criteria
for director nominations, director candidates, the term of office of directors,
and such other related matters as the Board may request from time to time.
Current members of the Nominations Committee are Mr. Snetzer, Chairman, Admiral
Zumwalt and Mr. Peak. The Nominations Committee held one meeting in 1993. The
Nominations Committee will consider recommendations by shareholders of the
Company with respect to nominees for election as director if such
recommendations are submitted in writing to the Secretary of the Company and
received not later than December 31 of the year prior to the next annual
meeting of shareholders. These recommendations should be accompanied by a full
statement of qualifications and confirmation of the person's willingness to
serve.
4
<PAGE> 8
The Board has previously established, and from time to time may
establish, other committees to assist it in discharging its responsibilities.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information relating to the current
executive officers of the Company. Biographical information with respect to
Messrs. Simmons and Martin and Dr. Wigdor is set forth above under "Election of
Directors."
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
Harold C. Simmons . . . . . . . . . . . . 62 Chairman of the Board
J. Landis Martin . . . . . . . . . . . . 48 President and Chief Executive Officer
Dr. Lawrence A. Wigdor . . . . . . . . . 52 Executive Vice President; President and Chief
Executive Officer of Kronos; and Chairman of
the Board, President and Chief Executive
Officer of Rheox.
Joseph S. Compofelice . . . . . . . . . . 44 Vice President and Chief Financial Officer
Susan E. Alderton . . . . . . . . . . . . 42 Vice President and Treasurer
David B. Garten . . . . . . . . . . . . . 42 Vice President, General Counsel and Secretary
Dennis G. Newkirk . . . . . . . . . . . . 43 Vice President and Controller
</TABLE>
JOSEPH S. COMPOFELICE was elected Vice President and Chief Financial
Officer of the Company in 1994. Mr. Compofelice also was elected Vice
President and Chief Financial Officer of Tremont in 1994. Mr. Compofelice was
Vice President of Baroid from 1988 until 1993 and Chief Financial Officer from
1990 until 1993. Mr. Compofelice was President of Shaffer, Inc. and Atlas
Bradford Corporation, subsidiaries of Baroid, from prior to 1989 until 1990.
SUSAN E. ALDERTON has been Vice President and Treasurer of the Company
since prior to 1989. Ms. Alderton has been a director of Tremont since 1990 and
was Vice President-Finance of Tremont from 1990 until 1992, and served as its
Treasurer from prior to 1989 to 1992 and as a Vice President from prior to 1989
to 1990.
DAVID B. GARTEN has been Vice President, General Counsel and Secretary
of the Company since 1990. From 1990 to 1993, Mr. Garten served as Vice
President and General Counsel of Tremont and since 1990 has served as Assistant
Secretary of Tremont. Mr. Garten was a partner in the national law firm of
Kirkland & Ellis from prior to 1989 until 1990.
DENNIS G. NEWKIRK has been Vice President and Controller of the
Company since 1989. Mr. Newkirk was Assistant Controller of Valhi from prior to
1989 until he joined the Company in 1989.
5
<PAGE> 9
SECURITY OWNERSHIP
Ownership of NL Common Stock. The following table and accompanying
notes set forth as of the Record Date the beneficial ownership, as defined by
regulations of the Securities and Exchange Commission (the "Commission"), of
Common Stock held by (a) each person or group of persons known by NL to
beneficially own more than 5% of the outstanding shares of Common Stock, (b)
each director or nominee for director of NL, (c) each executive officer of NL
listed on the Summary Compensation Table below, and (d) all executive officers
and directors of NL as a group. See note (4) below for information concerning
individuals and entities which may be deemed to indirectly beneficially own
those shares of Common Stock directly beneficially held by Valhi and Tremont,
as reported in the table below. No securities of NL's subsidiaries are
beneficially owned by any director, nominee for director, or officer of NL.
Except as described in note (4) below and the table following the caption
"Ownership of Valhi and Tremont Common Stock" below and the accompanying notes,
no securities of NL's parent companies other than Valhi and Tremont are
beneficially owned by any director, nominee for director or executive officer
of NL. All information is taken from or based upon ownership filings made by
such persons with the Commission or information provided by such persons to NL.
<TABLE>
<CAPTION>
NL COMMON STOCK
---------------
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(2)
---------------- ----------------------- -----------
<S> <C> <C>
Valhi, Inc.
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, TX 75240 24,787,210(3)(4) 49%
Tremont Corporation
1999 Broadway
Suite 4300
Denver, CO 80202 9,064,780(3) 18%
J. Landis Martin 487,813(5) --
Kenneth R. Peak 3,825(6) --
Glenn R. Simmons 8,800(4) --
Harold C. Simmons 7,775(4)(7) --
Michael A. Snetzer 12,000(4) --
Dr. Lawrence A. Wigdor 242,548(8) --
Admiral Elmo R. Zumwalt, Jr. 2,100(9) --
Susan E. Alderton 65,204(10) --
David B. Garten 120,240(11) --
Dennis G. Newkirk 81,988(12) --
All directors and executive officers
of the Company as a group
(11 persons) 1,053,482(3)(4)(5)(6)(7)(8) 2%
(9)(10)(11)(12)
</TABLE>
- ------------------
(1) All beneficial ownership is sole and direct unless otherwise noted.
(2) No percent of class is shown for holdings of less than 1%.
6
<PAGE> 10
(3) Tremont holds approximately 18% of the outstanding Common Stock. Valhi
holds approximately 48% of the outstanding common stock of Tremont and
may be deemed to indirectly beneficially own the shares of Common
Stock held by Tremont. See note (4) below.
(4) Valhi Group, Inc. ("VGI"), National City Lines, Inc. ("National") and
Contran are the holders of approximately 74.5%, 10.0% and 5.1%,
respectively, of the outstanding Valhi Common Stock (as defined
below). National, NOA, Inc. ("NOA") and Dixie Holding Company ("Dixie
Holding") are the holders of approximately 73.3%, 11.4% and 15.3%,
respectively, of the outstanding common stock of VGI. Contran and NOA
are the holders of approximately 85.7% and 14.3%, respectively, of the
outstanding common stock of National. Contran and Southwest Louisiana
Land Company, Inc. ("Southwest") are the holders of approximately
49.9% and 50.1%, respectively, of the outstanding common stock of NOA.
Dixie Rice Agricultural Corporation, Inc. ("Dixie Rice") is the holder
of 100% of the outstanding common stock of Dixie Holding. Contran is
the holder of approximately 88.7% and 54.3% of the outstanding common
stock of Southwest and Dixie Rice, respectively. All of Contran's
outstanding voting stock is held by trusts established for the benefit
of Harold C. Simmons' children and grandchildren (the "Trusts"), of
which Harold C. Simmons is the sole trustee. As sole trustee of the
Trusts, Harold C. Simmons has the power to vote and direct the
disposition of the shares of Contran common stock held by the Trusts.
However, Mr. Simmons disclaims beneficial ownership thereof. The
Combined Master Retirement Trust (the "Master Trust") holds
approximately .1% of the outstanding shares of Valhi Common Stock. The
Master Trust is a trust formed by Valhi to permit the collective
investment by trusts which maintain the assets of certain employee
benefit plans adopted by Valhi and related companies. Harold C.
Simmons is sole trustee of the Master Trust and sole member of the
Trust Investment Committee for the Master Trust. The trustee and
members of the Trust Investment Committee for the Master Trust are
selected by Valhi's Board of Directors. Harold C. Simmons, Glenn R.
Simmons and Michael A. Snetzer are each members of Valhi's Board of
Directors and are participants in one or more of the employee benefit
plans which invest through the Master Trust. However, each such person
disclaims beneficial ownership of the shares of Valhi Common Stock
held by the Master Trust, except to the extent of his individual
vested beneficial interest in the assets held by the Master Trust.
Harold C. Simmons is Chairman of the Board of NL and Chairman of the
Board and Chief Executive Officer of Contran, Southwest, Dixie Rice,
Dixie Holding, NOA, National, VGI and Valhi and a director of Tremont.
By virtue of the stock ownership described above and the holding of
such offices, Mr. Simmons may be deemed to control Contran, Southwest,
Dixie Rice, Dixie Holding, NOA, National, VGI, Valhi, Tremont and NL,
and Mr. Simmons, VGI, National, NOA, Dixie Rice, Dixie Holding,
Southwest and Contran may be deemed to possess indirect beneficial
ownership of the shares of Tremont Common Stock (as defined below) and
Common Stock directly beneficially owned by Valhi and Tremont and the
shares of Valhi Common Stock (as defined below) held by Contran and
its subsidiaries. However, Mr. Simmons disclaims beneficial ownership
of the shares of Common Stock, Valhi Common Stock and Tremont Common
Stock beneficially owned, directly and indirectly, by such entities.
(5) The shares of Common Stock shown as beneficially owned include (i)
450,288 shares of Common Stock which J. Landis Martin has the right to
acquire by exercise of options within 60 days of the Record Date under
the 1989 Long Term Performance Incentive Plan of NL Industries, Inc.
(the "Incentive Plan") or predecessor plans, and (ii) 6,860 shares
credited to Mr. Martin's account under the Savings Plan for Employees
of NL Industries, Inc. (the "Savings Plan").
(6) The shares of Common Stock shown as beneficially owned includes (i)
2,000 shares of Common Stock which Kenneth R. Peak has the right to
acquire by exercise of options within 60 days of the Record Date
pursuant to the NL Industries, Inc. 1992 Non- Employee Director Stock
Option Plan (the "Director Plan"), and (ii) 21 shares of Common Stock
held by Mr. Peak's wife with respect to which Mr. Peak disclaims
beneficial ownership.
7
<PAGE> 11
(7) Includes 7,775 shares of Common Stock held by Harold C. Simmons' wife
with respect to which beneficial ownership is disclaimed by Mr.
Simmons.
(8) The shares of Common Stock shown as beneficially owned include (i)
170,000 shares of Common Stock which Dr. Lawrence A. Wigdor has the
right to acquire by exercise of options within 60 days of the Record
Date under the Incentive Plan, (ii) 3,048 shares credited to Dr.
Wigdor's account under the Savings Plan, and (iii) 60,000 shares of
restricted stock with respect to which Dr. Wigdor has voting power and
right to receive dividends.
(9) The shares of Common Stock shown as beneficially owned include 2,000
shares of Common Stock which Admiral Elmo R. Zumwalt, Jr. has the
right to acquire by exercise of options within 60 days of the Record
Date pursuant to the Director Plan.
(10) The shares of Common Stock shown as beneficially owned include (i)
25,733 shares of Common Stock which Susan E. Alderton has the right to
acquire by exercise of options within 60 days of the Record Date under
the Incentive Plan or predecessor plans, (ii) 8,571 shares credited
to Ms. Alderton's account under the Savings Plan, and (iii) 30,000
shares of restricted stock with respect to which Ms. Alderton has
voting power and the right to receive dividends.
(11) The shares of Common Stock shown as beneficially owned include (i)
80,000 shares of Common Stock which David B. Garten has the right to
acquire by exercise of options within 60 days of the Record Date under
the Incentive Plan, (ii) 10,240 shares credited to Mr. Garten's account
under the Savings Plan, and (iii) 30,000 shares of restricted stock
with respect to which Mr. Garten has voting power and the right to
receive dividends.
(12) The shares of Common Stock shown as beneficially owned include (i)
41,000 shares of Common Stock which Dennis G. Newkirk has the right to
acquire by exercise of options within 60 days of the Record Date under
the Incentive Plan, (ii) 6,616 shares credited to Mr. Newkirk's
account under the Savings Plan, and (iii) 30,000 shares of restricted
stock with respect to which Mr. Newkirk has voting power and the right
to receive dividends.
Securities Exchange Act Reports. Section 16 of the Securities Exchange
Act of 1934, as amended, requires the Company's executive officers, directors,
and persons who own beneficially more than 10% of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the Commission, the New York Stock Exchange, the Pacific Stock
Exchange and the Company. Based solely on a review of copies of the Section 16
reports furnished to the Company and written representations by certain
reporting persons, the Company believes that during the fiscal year ended
December 31, 1993, all of the Company's executive officers, directors and
greater than 10% beneficial owners were in compliance with their filing
requirements except for one director of the Company with respect to one
transaction. Harold C. Simmons reported the purchase of 5,000 shares of Common
Stock by his wife more than 10 days after the end of the month in which such
report was due. Mr. Simmons disclaims beneficial ownership of such shares.
Ownership of Valhi and Tremont Common Stock. The following table and
accompanying notes set forth as of the Record Date (i) the beneficial
ownership, as defined above, of the common stock, $.01 par value per share, of
Valhi ("Valhi Common Stock") held by (a) each director or nominee for director
of NL, (b) each executive officer of NL listed in the Summary Compensation
Table below, and (c) all executive officers and directors of NL
8
<PAGE> 12
as a group, and (ii) the beneficial ownership, as defined above, of the common
stock, $1.00 par value per share, of Tremont ("Tremont Common Stock") held by
(a) each director or nominee for director of NL, and (b) each executive officer
of NL listed in the Summary Compensation Table below, and (c) all executive
officers and directors of NL as a group. See note (4) to the table following
the caption "Ownership of NL Common Stock" above, for information concerning
individuals and entities who may be deemed to indirectly beneficially own those
shares of Common Stock directly beneficially held by Tremont and Valhi. Except
as described in note (4) above and the table below and the accompanying notes,
no securities of NL's parent companies are beneficially owned by any director,
nominee for director or executive officer of NL. All information is taken from
or based upon ownership filings made by such persons with the Commission or
information provided by such persons to NL.
<TABLE>
<CAPTION>
TREMONT COMMON STOCK VALHI COMMON STOCK
---------------------------------- --------------------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
NAME OF BENEFICIAL PERCENT BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS(2) OWNERSHIP(1) OF CLASS(2)
---------------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
J. Landis Martin 123,729(3) 1.7% 320,000(8) --
Kenneth R. Peak -0- -- -0- --
Glenn R. Simmons 4,000(4)(5) -- 513,542(4)(8)(9) --
Harold C. Simmons -0-(4) -- 670,342(4)(8)(10) --
Michael A. Snetzer 6,000(4) -- 643,496(4)(8)(11) --
Dr. Lawrence A. Wigdor -0- -- -0- --
Admiral Elmo R. Zumwalt, Jr. -0- -- -0- --
Susan E. Alderton 7,316(6) -- -0- --
David B. Garten 3,600(7) -- -0- --
Dennis G. Newkirk 1,000 -- 22,000 --
All directors and executive
officers of the Company
as a group (11 persons) 145,645(3)(4)(5) 1.8% 2,167,380(4)(8)(9) 1.9%
(6)(7) (10)(11)
</TABLE>
- ------------------
(1) All beneficial ownership is sole and direct unless otherwise noted.
(2) No percent of class is shown for holdings of less than 1%. For
purposes of calculating the percent of class owned, 1,186,200 shares
(1.0%) of Valhi Common Stock held by NL are included in the amount of
Valhi Common Stock outstanding and 5,180,000 shares of Valhi Common
Stock held by a wholly owned subsidiary of Valhi are excluded from the
amount of Valhi Common Stock outstanding.
(3) The shares of Tremont Common Stock shown as beneficially owned by J.
Landis Martin include 24,172 shares which Mr. Martin has the right to
acquire by exercise of options within 60 days of the Record Date under
the 1988 Long Term Performance Incentive Plan of Tremont (the "Tremont
Incentive Plan"), and 510 shares held by the trustee for the benefit
of Mr. Martin under the Savings Plan. Such shares include 2,300 shares
held by Mr. Martin's wife and 1,900 shares held by the Martin
Children's Trust No. II for which Mr. Martin is the sole trustee, with
respect to all of which beneficial ownership is disclaimed by Mr.
Martin.
(4) See note (4) to the table following "Ownership of NL Common Stock"
above.
(5) The shares of Tremont Common Stock shown as beneficially owned by
Glenn R. Simmons include 515 shares held by Mr. Simmons' wife, of
which 300 shares are held in a retirement account, and 25 shares are
held in trust for the benefit of their daughter, with respect to all
of which beneficial ownership is disclaimed by Mr. Simmons.
(6) The shares of Tremont Common Stock shown as beneficially owned by
Susan E. Alderton include 7,089 shares which Ms. Alderton has the
right to acquire by exercise of options within 60 days of the Record
Date
9
<PAGE> 13
under the Tremont Incentive Plan, 11 shares held for the benefit of
Ms. Alderton under the Savings Plan (as defined above) and 216 shares
of restricted stock with respect to which Ms. Alderton has the power
to vote and the right to receive dividends.
(7) The shares of Tremont Common Stock shown as beneficially owned by
David B. Garten include 3,100 shares which Mr. Garten has the right to
acquire by exercise of options within 60 days of the Record Date under
the Tremont Incentive Plan.
(8) Includes shares of Valhi Common Stock registered in such person's name
which are restricted and the vested beneficial interests in shares of
Valhi Common Stock held as of December 31, 1993 by a Valhi employee
stock ownership plan. Also included are shares that such person or
group could acquire upon the exercise of stock options within 60 days
of the Record Date. During such 60-day period, options for 590,000
shares of Valhi Common Stock are exercisable by Harold C. Simmons,
options for 480,000 shares of Valhi Common Stock are exercisable by
Michael A. Snetzer, options for 420,000 shares of Valhi Common Stock
are exercisable by Glenn R. Simmons, options for 300,000 shares of
Valhi Common Stock are exercisable by J. Landis Martin, and options
for 20,000 shares of Valhi Common Stock are exercisable by the
remaining directors and executive officers of the Company as a group,
all of which shares are included in the amount outstanding for
purposes of calculating the percent of class owned by such persons.
(9) Includes 1,000 shares of Valhi Common Stock held by Glenn R. Simmons'
wife in trust for the benefit of their daughter and 800 shares held in
a retirement account for Mr. Simmons' wife, with respect to all of
which beneficial ownership is disclaimed by Mr. Simmons.
(10) Includes 77,000 shares of Valhi Common Stock held by Harold C.
Simmons' wife, with respect to which beneficial ownership is
disclaimed by Mr. Simmons.
(11) Includes 2,000 shares of Valhi Common Stock held in an account with
respect to which Michael A. Snetzer has investment authority and 9,000
shares held in an account for his son of which Mr. Snetzer is
custodian, with respect to all of which beneficial ownership is
disclaimed by Mr. Snetzer.
The Company understands that Valhi, Tremont and related entities may
consider acquiring or disposing of shares of Common Stock through open-market
or privately-negotiated transactions depending upon future developments,
including, but not limited to, the availability and alternative uses of funds,
the performance of the Common Stock in the market, an assessment of the
business of and prospects for the Company, financial and stock market
conditions and other factors. The Company does not presently intend, and
understands that neither Valhi nor Tremont presently intends, to engage in any
transaction or series of transactions which would result in the Common Stock
becoming eligible for termination of registration under the Securities Exchange
Act of 1934, as amended, or ceasing to be traded on a national securities
exchange.
10
<PAGE> 14
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
AND OTHER INFORMATION
COMPENSATION OF DIRECTORS
During 1993, fees were paid to each director who was not an officer or
employee of the Company or a subsidiary of the Company. Fees consist of an
annual retainer of $15,000, payable in quarterly installments, plus an
attendance fee of $750 for each meeting of the Board or a committee at which
the director is present. Such directors also receive a fee of $750 per day for
each day spent on NL business at the request of the Board or the Chairman of
the Board, other than the day of Board or committee meetings and directors are
reimbursed for reasonable expenses incurred in attending Board of Directors and
committee meetings. If any director who is not an officer or employee of NL or
any subsidiary or affiliate of NL dies while in active service, his designated
beneficiary or estate will be entitled to receive a life insurance benefit
equal to the annual retainer then in effect. Directors receiving fees for
serving on the Board of Directors in 1993 were Messrs. Peak, G. Simmons, H.
Simmons, Snetzer and Admiral Zumwalt. See "Certain Relationships and
Transactions."
In 1993, each of Admiral Zumwalt and Mr. Peak was granted an option
pursuant to the Director Plan (as defined above) to purchase 1,000 shares of
Common Stock at an exercise price of $4.8125 per share, representing the last
reported sales price of Common Stock on the New York Stock Exchange Composite
Tape on the date of grant. Options granted under the Director Plan become
exercisable one year after the date of grant and expire on the fifth
anniversary following the date of grant.
11
<PAGE> 15
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table set forth below provides certain
summary information concerning annual and long-term compensation paid or
accrued by the Company to or on behalf of its Chief Executive Officer and each
of its other four most highly compensated executive officers during 1993, for
services rendered during the years ended December 31, 1993, 1992 and 1991.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------
(1)
Awards
------
Annual Compensation (1) Securities
Name and ----------------------- Underlying All Other
Principal Position Year Salary Bonus (2) Options Compensation
------------------ ---- -------- --------- ---------- ------------
($) ($) (#) (3)((6)($)
<S> <C> <C> <C> <C> <C>
J. Landis Martin 1993 400,000(3) -0- 120,000 16,416
President and Chief 1992 400,000(3) 400,000(3) 70,000 71,237
Executive Officer 1991 250,000(3) 250,000(3) 400,000 --
Dr. Lawrence A. Wigdor 1993 450,000 -0- 90,000 41,133
Executive Vice President 1992 450,000 675,000 50,000 101,383
1991 450,000 450,000 50,000 --
Susan E. Alderton 1993 131,250 -0- 45,000 -0-
Vice President and 1992 50,000(4) 45,200(4) 20,000 35,340
Treasurer 1991 80,160(4) 47,848(4) -0- --
David B. Garten 1993 153,132(5) -0- 45,000 2,667
Vice President, Secretary 1992 140,008(5) 210,000(5) 20,000 33,383
and General Counsel 1991 112,500(5) 112,500(5) -0- --
Dennis G. Newkirk 1993 150,000 -0- 45,000 -0-
Vice President and 1992 150,000 116,300 20,000 17,534
Controller 1991 125,004 63,800 -0- --
</TABLE>
(1) No awards of restricted stock or payouts under any long-term incentive
plans were made during 1993, 1992 or 1991, and no other annual
compensation payments were made in 1993 or 1992. Therefore, columns
for such compensation have been omitted.
(2) Amounts paid pursuant to the NL Industries, Inc. Share in Performance
Incentive Plan (the "Variable Compensation Plan"). See "Compensation
Committee Report on Executive Compensation" below.
(3) During 1993, 1992 and 1991, Mr. Martin also served as an executive
officer of Baroid and Tremont. For a portion of 1991, Mr. Martin was
compensated directly by NL and Baroid reimbursed NL for that portion
of his base salary and bonus attributable to Baroid and Tremont for
services to such companies. Therefore,
12
<PAGE> 16
amounts paid in 1991 by NL to Mr. Martin that were reimbursed by
Baroid for services to Baroid and Tremont are not included in the
table above. Mr. Martin is expected to continue to serve as an
executive officer of NL and Tremont in 1994 and to be compensated
directly by NL and Tremont, respectively, for services as an executive
officer of each such company. Mr. Martin ceased serving as an
executive officer of Baroid in January 1994 and is expected to
continue to devote approximately one- half of his working time as
President and Chief Executive Officer of NL. See "Certain
Relationships and Transactions."
(4) Ms. Alderton also served as an executive officer of Tremont during
1992 and 1991 and as an executive officer of Baroid during a portion
of 1991. During 1992 and 1991, Ms. Alderton was compensated directly
by NL, and Baroid and Tremont reimbursed NL for their respective
portions of her base salary and bonus earned for services attributable
to Baroid and Tremont. Therefore, amounts paid in 1992 and 1991 by NL
to Ms. Alderton that were reimbursed by Baroid and Tremont are not
included in the table above. Ms. Alderton ceased serving as an
executive officer of Baroid in 1991 and Tremont in 1992. See "Certain
Relationships and Transactions."
(5) During 1993, 1992 and 1991, Mr. Garten was compensated directly by NL,
and Tremont reimbursed NL for the portion of Mr. Garten's base salary
and bonus earned for services attributable to Tremont. Therefore,
amounts paid to Mr. Garten in 1993, 1992 and 1991 by NL that were
reimbursed by Tremont are not included in the table above. Mr. Garten
ceased serving as an executive officer of Tremont on June 30, 1993.
See "Certain Relationships and Transactions."
(6) For 1993, represents the amount accrued by the Company in an unfunded
account for the benefit of the named executive officer under the
Supplemental Executive Retirement Plan for Executives and Officers of
NL Industries, Inc. (the "SERP"). For 1992, represents the amount
similarly accrued for the benefit of the named executive officer under
the SERP together with (i) the amount of contributions by the Company
to such officer's account under the Savings Plan, or (ii), with
respect to Ms. Alderton, the last of five annual payments received by
Ms. Alderton in exchange for her agreement to waive her right to
payment under a certain executive severance plan. No Savings Plan
contributions were made in 1993 by the Company to the accounts of any
of the named executive officers.
See "Certain Relationships and Transactions."
13
<PAGE> 17
STOCK OPTION GRANTS
The following table provides information, with respect to the
individual grants to the executive officers named in the Summary Compensation
Table set forth above under the Incentive Plan (as defined above) during fiscal
year 1993.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options Potential Realizable Value at
Underlying Granted to Exercise or Assumed Annual Rates of Stock
Options Granted Employees in Base Price Expiration Appreciation for
Name (#)(1) Fiscal Year ($/Share) Date Option Term (5)
---- --------------- ------------ ----------- ---------- -----------------------------
5% ($) 10% ($)
------ -------
<S> <C> <C> <C> <C> <C> <C>
J. Landis Martin 40,000 26.6% 5.00(2) 2/16/03 125,600 318,800
40,000 6.00(3) 85,600 278,800
40,000 7.00(4) 45,600 238,800
Lawrence A. Wigdor 30,000 20% 5.00(2) 2/16/03 94,200 239,100
30,000 6.00(3) 64,200 209,100
30,000 7.00(4) 34,200 179,100
Susan E. Alderton 15,000 10% 5.00(2) 2/16/03 47,100 119,550
15,000 6.00(3) 32,100 104,550
15,000 7.00(4) 17,100 89,550
David B. Garten 15,000 10% 5.00(2) 2/16/03 47,100 119,550
15,000 6.00(3) 32,100 104,550
15,000 7.00(4) 17,100 89,550
Dennis G. Newkirk 15,000 10% 5.00(2) 2/16/03 47,100 119,550
15,000 6.00(3) 32,100 104,550
15,000 7.00(4) 17,100 89,550
</TABLE>
(1) Grants of options to purchase shares of Common Stock ("Options")
under the Incentive Plan vest over five years from February 16, 1993,
the date of grant, at a rate of 40% on the second anniversary of the
date of grant, and 20% on each of the next three succeeding
anniversary dates. The Options expire on the tenth anniversary date of
the date of grant.
(2) Exercise price is equal to the mean of the high and low prices of the
Common Stock on the New York Stock Exchange Composite Tape (the "NYSE
mean price") on the date of grant.
(3) Exercise price is equal to 120% of the NYSE mean price on the date of
grant.
(4) Exercise price is equal to 140% of the NYSE mean price on the date of
grant.
(5) Pursuant to the rules of the Commission, these amounts reflect the
calculations at assumed 5% and 10% appreciation rates. Such
calculations are not intended to forecast future appreciation, if any,
and do not necessarily reflect the actual value, if any, that may be
realized. The actual value of such Options, if any, would be realized
only upon the exercise of such Options and depends upon the future
performance of the
14
<PAGE> 18
Common Stock. No assurance can be made that the amounts reflected in
these columns will be achieved. The potential realizable value was
computed as the difference between the appreciated value (at the end
of the ten-year term of the Options) of the Common Stock into which
the listed Options are exercisable and the aggregate exercise price of
such Options. The appreciated value per share at the end of the
ten-year term would be $8.14 and $12.97 at the 5% rate and 10% rate,
respectively.
STOCK OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the
executive officers named in the Summary Compensation Table, as set forth above,
concerning the exercise of options during the last fiscal year and the value of
unexercised options held as of December 31, 1993. No such executive officer
exercised or realized any value with respect to any options during 1993. No
SARs have been granted under the Incentive Plan.
AGGREGATED OPTION EXERCISES IN 1993 AND 12/31/93 OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Acquired on Options at 12/31/93(#) at 12/31/93 ($)
Name Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------ ------------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
J. Landis Martin -0- -0- 342,288/430,000 -0-/-0-
Lawrence A. Wigdor -0- -0- 110,000/230,000 -0-/-0-
Susan E. Alderton -0- -0- 17,733/73,000 -0-/-0-
David B. Garten -0- -0- 57,000/103,000 -0-/-0-
Dennis G. Newkirk -0- -0- 30,000/80,000 -0-/-0-
</TABLE>
PENSION PLAN
The Retirement Plan of NL Industries, Inc. for its U.S. employees (the
"NL Pension Plan") provides lifetime retirement benefits to eligible employees.
In the case of salaried employees, an employee becomes eligible to participate
in the NL Pension Plan after both completing at least five months of service
(as defined in the NL Pension Plan) in a twelve-month period and attaining 21
years of age. The plan was amended to provide that, commencing in January 1989
and annually thereafter, the Board establish, in its discretion, the amount of
an employee's annual pension benefit for the year based primarily on the
employee's compensation for that year and the Company's financial performance
in relationship to its annual operating plan for the previous year. Such
pension benefits are payable upon retirement and attainment of ages specified
in the NL Pension Plan. The NL Pension Plan covers each executive officer named
in the Summary Compensation Table set forth above. No amounts were paid or
distributed to any of the named executive officers in 1993. The estimated
accrued annual benefits payable upon retirement at normal retirement age for
Mr. Martin, Dr. Wigdor, Ms. Alderton, and Messrs. Garten and Newkirk,
respectively, are $39,504, $18,504, $24,324, $16,611, and $20,975.
15
<PAGE> 19
EMPLOYMENT AGREEMENTS
In December 1991, J. Landis Martin entered into an executive severance
agreement which provides that Mr. Martin may be terminated at any time by
action of the Board of Directors. The executive severance agreement also
provides that the following payments shall be made to Mr. Martin in the event
Mr. Martin is terminated by the Company without cause (as defined in the
agreement) or Mr. Martin terminates his employment with the Company for good
reason (as defined in the agreement): (i) the greater of two times Mr. Martin's
annual base salary plus target bonus (which shall not be less than the amount
of his annual salary) or Mr. Martin's actual salary and bonus for the two
years prior to termination; (ii) accrued salary and bonus through the date of
termination; (iii) an amount in cash or Common Stock equal to the fair market
value of outstanding stock options granted to Mr. Martin in excess of the
exercise price and unvested restricted stock grants; (iv) an amount equal to
unvested Company contributions together with an amount equal to the Company's
matching contributions to Mr. Martin's account under the Savings Plan for a
period of two years; (v) an amount equal to the vested and unvested portions of
Mr. Martin's account under the SERP; and certain other benefits. This agreement
is automatically extended for one-year terms commencing each January 1, unless
the Company and Mr. Martin agree otherwise in writing.
In 1990, NL entered into a five-year employment agreement with Dr.
Wigdor, which provides for an annual salary of $450,000 and a bonus based on
the Variable Compensation Plan (as defined above). Pursuant to the agreement,
Dr. Wigdor was granted an option under the Incentive Plan (as defined above) to
purchase 150,000 shares of Common Stock at a price of $24.19 per share. Under
the agreement, Dr. Wigdor's employment can be terminated only for cause (as
defined in the employment agreement), sale of the Company, death or disability.
In the event of Dr. Wigdor's death or disability, he shall be entitled to
accrued bonuses and benefits through the date of termination and salary through
the end of the month in which such termination occurs. In the event of
termination because of a sale of the Company, Dr. Wigdor shall be entitled to
receive a severance payment equal to the lesser of (i) 2.99 times the average
annual compensation (minimum $900,000) paid by the Company to him during the
most recent 5 years or (ii) the compensation to which Dr. Wigdor would be
entitled for the period from the sale of the Company through December 31, 1994
(assuming an annual bonus of $450,000). In addition, Dr. Wigdor shall become
vested in the above described options. Notwithstanding the foregoing, in the
event of a sale of the Company, the President of NL may assign Dr. Wigdor to an
affiliate to perform substantially similar executive services for similar pay
for the remainder of the term of the agreement and no severance payment will be
made.
In connection with Joseph S. Compofelice's employment with the Company
in February 1994, the Committee (as defined below) approved the terms of an
executive severance agreement with Mr. Compofelice which shall provide that Mr.
Compofelice may be terminated at any time by the Company and that the following
payments be made to Mr. Compofelice in the event that Mr. Compofelice 's
employment is terminated by the Company without cause (as defined) or Mr.
Compofelice terminates his employment with the Company for good reason (as
defined): (i) the greater of two times Mr. Compofelice's annual base salary
plus target bonus (which shall not be less than the amount of his annual
salary) or Mr. Compofelice's actual salary and bonus for the two years prior to
termination; (ii) accrued salary and bonus through the date of termination;
(iii) an amount in cash or Common Stock equal to the fair market value of
outstanding stock options granted to Mr. Compofelice in excess of exercise
price, unvested stock appreciation rights and unvested restricted stock grants;
(iv) an amount equal to unvested Company contributions together with an amount
equal to the Company's matching contributions to Mr. Compofelice's account
under the Savings Plan for a period of two years; and certain other benefits.
16
<PAGE> 20
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Management Development and Compensation Committee (the
"Committee") consists of individuals who are neither officers nor employees of
the Company or its subsidiaries and who are not eligible to participate in any
of the employee benefit plans the Committee administers.
The Committee reviews and recommends executive officer compensation
policies and practices. The Committee is responsible for reviewing and
approving all compensation actions involving the Company's executive officers
other than the Chief Executive Officer. With respect to the CEO, the Committee
reviews compensation matters and makes recommendations to the full Board of
Directors for approval.
The Company's compensation system with respect to its executive
officers, including the CEO, consists of three primary components: base salary,
annual variable compensation pursuant to the Variable Compensation Plan and the
grant of stock options, restricted stock, or stock appreciation rights pursuant
to the Incentive Plan. It is the goal of the Committee to achieve through the
use of the foregoing components a balanced compensation package that will
attract and retain high quality key executives and appropriately reflects each
such executive officer's individual performance and contributions, provides
further incentives to such officers to continue to maximize annual operating
performance and long-term shareholder value, and reflects appropriate market
compensation for comparable executives.
The Committee intends to study the new $1 million deductibility cap on
executive compensation promulgated by the Revenue Reconciliation Act of 1993 to
determine the effect of such cap on the Company's current compensation and
employee benefit plans and whether any recommendations should be proposed to
the Board in connection with such deductibility cap.
BASE SALARIES
The Committee reviews recommendations of the CEO regarding base
salaries for executive officers. Such reviews occur no more frequently than
annually and an increase in base salary for a given executive occurs no more
frequently than every two years and sometimes longer. The annual base salaries
of the executive officers, including the CEO, were not increased in 1993 and
remained at 1992 levels in view of, among other things, the Company's overall
earnings and stock market performance. Dr. Wigdor's base salary has remained
unchanged since he began employment with the Company on January 1, 1990. Base
salaries historically have been designed to be below the median annual base
salary for comparable executives averaged over a period of years. When
recommendations as to base salary levels are made by the CEO, the Committee
reviews them and may take such actions, including any modifications, as it
deems appropriate. These recommendations are based primarily on industry and
peer group data, including certain companies contained in the peer group
indices plotted in the Performance Graph following this report, as well as
other companies deemed appropriate, and past and potential future individual
performance and contributions.
VARIABLE COMPENSATION PLAN
Awards under the Variable Compensation Plan, which constitute a
significant portion of an executive's potential annual cash compensation
(between 0% and 150% of base salary for the CEO and the executive officers),
are based primarily on the Company's principal operating subsidiary achieving
annual pre-determined operating income goals and secondarily on individual
performance. The Company's management makes recommendations to the Board for
appropriate operating income goals for the year after reviewing market
conditions and the Company's operations, competitive position, marketing
opportunities, and strategies for maximizing financial performance. The Board
approves these recommendations with any modifications it deems appropriate,
based upon the goals the Committee seeks to achieve. The Company's goals are
set at three levels which are designed to help focus the executives' attention
on achieving superior annual operating results in light of existing conditions:
a threshold level, which is the minimum
17
<PAGE> 21
operating income level for any award to be made under the Variable Compensation
Plan (the "Minimum Level"), a target level (the "Target Level"), and a maximum
level (the "Maximum Level").
The Variable Compensation Plan, in combination with base salary, is
designed to provide executive officers and other eligible participants with
annual cash compensation below competitive compensation levels if the Minimum
Level is not achieved. The Company achieved the Minimum Level under the
Variable Compensation Plan in 1990, the Target Level in 1991, the Maximum Level
in 1992, and below the Minimum Level in 1993.
Pursuant to the Variable Compensation Plan, if operating income is
below the Minimum Level, no variable compensation is paid except at the
discretion of the Committee. If the Target Level is reached, executive officers
would be eligible to receive variable compensation payments ranging between 39%
and 100% of base salary, depending on the executive. If the Minimum Level is
met, the executives' variable compensation payments would be between 24% and
50% of base salary, depending on the executive. On the other hand, if the
Maximum Level is reached or exceeded, variable compensation payments ranging
between 57% and 150% of base salary may be awarded, depending on the executive.
The Committee has the authority to award other bonuses if the Company's
operating income falls between the Minimum, Target and Maximum Levels, and to
award other bonuses as the Committee deems appropriate from time to time. In
1993, the Company's operating income was below the Minimum Level and the
Committee determined not to award any payments under the Variable Compensation
Plan to any of the executive officers, including the CEO, and none was paid.
Awards made for 1991, 1992 and 1993 to Mr. Martin and the four other highest
paid executive officers under the Variable Compensation Plan are reported in
the bonus column in the Summary Compensation Table set forth above.
In addition, minimum, target and maximum levels for operating income
performance are utilized by the Committee and the Board, as applicable, for
determining the contributions, if any, by the Company to the accounts of
eligible participants, including the executive officers, under the Savings
Plan, the Pension Plan, and the SERP. See "Pension Plan" above. Because
operating income was below the Minimum Level in 1993, no contributions shall be
made by the Company to the accounts of eligible participants, including the
executive officers, under the Savings Plan. In addition, other than monthly de
minimis contributions pursuant to the Pension Plan and interest accrued on
outstanding balances with respect to the SERP, no Company contributions to the
SERP or Pension Plan will be made with respect to any executive officer for the
twelve month period beginning May 1, 1994.
STOCK-BASED COMPENSATION
The Incentive Plan further supports the goal of the Committee to
maximize long-run shareholder value by providing for stock-based compensation,
the value of which is directly related to increases in shareholder value. Stock
option grants, in particular, are considered an essential and significant
element of the Company's total compensation package for the CEO and other
executive officers of the Company. The Committee believes that compensation
linked to stock price performance helps focus the executives' attention on
management of the Company from the perspective of an owner with an equity stake
in the business.
Option grants are primarily intended to provide incentives to increase
shareholder value in the future and, secondarily may be used to reward past
performance by the executive, with no specific weighting assigned to any give
criteria. The Committee reviews recommendations by the CEO regarding option
grants to executive officers other than the CEO annually. Options are granted
to executive officers in the Committee's discretion based on a subjective
evaluation regarding each executive after a review of survey data and valuation
information based upon the Black-Scholes model.
To help assure a focus on long-term creation of shareholder value, the
Committee grants ten year options, which vest 40%, 60%, 80% and 100% on the
second, third, fourth and fifth anniversary dates of the date of grant,
respectively. In addition, to further provide incentives for increasing
shareholder value, in 1993 the Committee determined that options to certain
company officers, including executive officers, would be granted in three
exercise price tranches. One-third of the options granted to such individuals
in 1993 are exercisable at the Common Stock fair market value on the date
18
<PAGE> 22
of grant. The next third of the options and the last third are exercisable at
levels that are above the market price on the date of grant. Grants made in
1993 are reported in the Option Grants in Last Fiscal Year table set forth
above. Although permitted under the Incentive Plan, the Committee did not make
or recommend any grants of restricted stock, stock appreciation rights, or
equity- based awards other than options in 1993.
To encourage growth in shareholder value, the Committee believes that
executives who are in a position to make a substantial contribution to the
long-term success of the Company should have a significant stake in its ongoing
success. The Committee has established the following voluntary goals for
minimum Common Stock ownership for executive officers to encourage executives
to build their Common Stock ownership. Executives will be encouraged to achieve
these ownership goals over a period of approximately five to seven years. The
table also shows the year-end market value of the actual share ownership as a
multiple of 1993 base salary.
<TABLE>
<CAPTION>
Year-End Market Value of Share
------------------------------
Ownership as a Multiple of Base Salary(1)
-----------------------------------------
Actual Goal
------ ----
<S> <C> <C>
President and Chief Executive Officer .4 X 4 X
Executive Vice President .1 X 3 X
Vice Presidents: Chief Financial Officer .5 X 3 X
Controller .3 X 2 X
General Counsel .3 X 2 X
Treasurer .3 X 2 X
</TABLE>
(1) Year-end market value of share ownership as a multiple of base salary
includes all shares of Common Stock beneficially owned and shares held
pursuant to the Savings Plan, and does not include shares which may be
acquired pursuant to the exercise of stock options.
The foregoing report on executive compensation has been furnished by the
Company's Management Development and Compensation Committee of the Board of
Directors.
Mr. Kenneth R. Peak (Chairman)
General Thomas P. Stafford
Admiral Elmo R. Zumwalt, Jr.
19
<PAGE> 23
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Common Stock against the
cumulative total return of the S & P Composite 500 Stock Index and the S & P
Chemical Index for the period commencing December 31, 1988 and ending December
31, 1993.
(INSERT GRAPH)
[See APPENDIX A for a description of a line graph plotting the points
set forth below which compare the yearly percentage change in the cumulative
total shareholder return on the Common Stock against the cumulative return
of the S&P indices described below.]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NL Industries, Inc. 100 132.50 56.99 59.73 28.89 28.11
S & P 500 100 131.69 127.60 166.47 179.15 197.21
S & P Chemicals Index 100 129.12 109.64 142.97 156.56 175.09
</TABLE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
RELATIONSHIPS WITH RELATED PARTIES
As set forth under the caption "Security Ownership," Harold C. Simmons,
through Valhi and Tremont, may be deemed to control NL. The Company and other
entities that may be deemed to be controlled by or affiliated with Mr. Simmons
sometimes engage in (a) intercorporate transactions such as guarantees,
management and expense sharing arrangements, shared fee arrangements, joint
ventures, partnerships, loans, options, advances of funds on open account, and
sales, leases and exchanges of assets, including securities issued by both
related and unrelated parties and (b) common investment and acquisition
strategies, business combinations, reorganizations, recapitalizations,
securities repurchases, and purchases and sales (and other acquisitions and
dispositions) of subsidiaries, divisions or other business units, which
20
<PAGE> 24
transactions have involved both related and unrelated parties and have included
transactions which resulted in the acquisition by one related party of a
publicly-held minority equity interest in another related party. While no
transactions of the type described above are planned or proposed with respect
to the Company (except as otherwise set forth in this Proxy Statement), the
Company from time to time considers, reviews and evaluates, and understands
that Contran, Valhi and related entities consider, review and evaluate, such
transactions. Depending upon the business, tax and other objectives then
relevant, including, without limitation restrictions under certain indentures
and other agreements of the Company, it is possible that the Company might be a
party to one or more such transactions in the future. It is the policy of the
Company to engage in transactions with related parties on terms, in the opinion
of the Company, no less favorable to the Company than could be obtained from
unrelated parties.
Harold C. Simmons, Glenn R. Simmons and Michael A. Snetzer, each a director
of NL, are also directors of Valhi. Each of the foregoing persons and Mr.
Martin and Ms. Alderton are directors of Tremont. Mr. Martin, the Company's
President and Chief Executive Officer, and Mr. Garten, the Company's Vice
President, Secretary and General Counsel, served as executive officers of
Tremont for all or a portion of 1993. Mr. Garten ceased serving as an
executive officer of Tremont on June 30, 1993, and continues to serve as
assistant secretary of Tremont. Mr. Martin expects to continue to serve in
1994 as an executive officer of Tremont. Until the January 1994 merger of
Baroid into a wholly-owned subsidiary of Dresser, Mr. Martin served as an
executive officer of Baroid. Mr. Compofelice, the Company's Vice President
and Chief Financial Officer since February 1994, also serves as an executive
officer of Tremont. Such management interrelationships and the existing
intercorporate relationships may lead to possible conflicts of interest. These
possible conflicts may arise from the duties of loyalty owed by persons acting
as corporate fiduciaries of two or more companies under circumstances where
such companies may have adverse interests. Mr. Compofelice devotes
approximately two-thirds of his working time to NL and one-third to Tremont.
Mr. Martin devotes approximately one-half of his working time to NL and a
significantly lesser amount of his working time to Tremont. See "Certain
Contractual Relationships and Transactions" below.
Although no specific procedures are in place that govern the treatment of
transactions among the Company, Valhi, Tremont and related entities, the boards
of directors of the Company, Valhi and Tremont include one or more members who
are not officers or directors of any other entity that may be deemed to be
related to with the Company. Additionally, under applicable principles of law,
in the absence of shareholder ratification or approval by directors of the
Company who may be deemed disinterested, transactions involving contracts among
the Company and any other companies under common control with the Company must
be fair to all companies involved. Furthermore, each director and officer of
the Company owes fiduciary duties of good faith and fair dealing with respect
to all shareholders of the company or companies for which they serve.
CERTAIN CONTRACTUAL RELATIONSHIPS AND TRANSACTIONS
Intercorporate Services Agreements. The Company and Baroid are parties to
an intercorporate services agreement (the "Baroid ISA") pursuant to which
Baroid makes available to the Company office space in Houston and provides the
Company with certain corporate services. Baroid is a subsidiary of Dresser, of
which Mr. Martin is a director. During 1993, Messrs. Martin and Snetzer served
as directors of Baroid. As amended the initial term of the Baroid ISA
terminates on December 31, 1994, subject to automatic renewal for additional
one-year terms but may be terminated by either party upon six months written
notice. The Company's expenses for services pursuant to this agreement are
expected to be approximately $350,000 in 1994 and were approximately $566,000
in 1993.
The Company and Contran are parties to an intercorporate services agreement
(the "Contran ISA") whereby Contran makes available to the Company the services
of Harold C. Simmons to consult and assist in the development and
implementation of the Company's strategic plans and objectives (other than
major corporate acquisitions, divestitures and other special projects outside
the scope of the Company's business as it has been conducted in the past). The
Contran ISA provides for quarterly payments aggregating approximately $380,000
for 1994. The Contran ISA is subject to termination or renewal by mutual
agreement and may be terminated by either party pursuant to a written notice
delivered 30 days prior
21
<PAGE> 25
to a quarter-end. The Company will continue to pay directors' fees and
expenses separately to Harold C. Simmons. See "Compensation of Directors and
Executive Officers and Other Information" above.
The Company and Valhi are parties to an intercorporate services
agreement (the "Valhi ISA"), whereby Valhi renders certain management,
financial and administrative services to the Company. The Company paid fees of
approximately $716,000 to Valhi for services rendered pursuant to the Valhi ISA
during 1993. In addition, the Company reimbursed Valhi for out-of-pocket costs
incurred by Valhi in rendering such services. Pursuant to an amendment to the
Valhi ISA, the fees for services pursuant to this agreement were reduced to
$200,000 for 1994 which reduction reflects, among other things, the elimination
of services by Messrs. Harold Simmons, Glenn Simmons and Michael Snetzer under
the Valhi ISA. The Valhi ISA is subject to termination or renewal by mutual
agreement and may be terminated by either party pursuant to a written notice
delivered 30 days prior to a quarter-end.
Through June 30, 1993, the Company and Tremont were parties to an
intercorporate services agreement, as amended (the "Tremont ISA"), pursuant to
which the Company provided certain legal services to Tremont and its
subsidiaries, and made available the Company's General Counsel to act in such
capacity for Tremont. Effective as of June 30, 1993, the Tremont ISA was
terminated. Tremont paid to NL approximately $75,000 in 1993 for services
provided by NL to Tremont under the Tremont ISA. In addition, Tremont
reimbursed the Company for out-of-pocket costs incurred by the Company in
rendering such services.
Tremont Registration Rights Agreement. In connection with the December 1991
purchase by Tremont of 7.8 million shares of Common Stock from Valhi, the
Company entered into a Registration Rights Agreement pursuant to which Tremont
received certain registration rights with respect to the purchased shares.
Unless all registration rights are exercised earlier, such agreement expires in
December 2001.
Valhi Stock Options. Certain executive officers of the Company have been
granted options to purchase Valhi Common Stock under the terms of Valhi's stock
option plans. The Company has agreed to pay Valhi the aggregate difference
between the option price and the market value of Valhi's Common Stock on the
exercise date of such options. At December 31, 1993, Messrs. Martin and Newkirk
held options to purchase 300,000 and 20,000 shares, respectively, of Valhi
Common Stock at an exercise price of $8.50 per share.
Supply Agreements. A wholly-owned subsidiary of Baroid (now a wholly-owned
subsidiary of Dresser) is party to a long-term contract with Rheox pursuant to
which Rheox is assured, subject to certain limitations, the right to purchase
its requirements of bentonite clays for manufacture of its bentonite-based
rheological additive products. The agreement establishes an initial base price
which is subject to adjustment to reflect changes in market conditions. The
term of the agreement is through 1995 and Rheox has options to extend the
agreement through 2004. Sales by the Baroid subsidiary to Rheox pursuant to
this agreement were approximately $700,000 in 1993 and are expected to be a
similar amount in 1994. During 1993 another wholly-owned subsidiary of Baroid
purchased amines from Rheox totalling approximately $1,800,000 and sold
certain products to Rheox totalling approximately $600,000. The Company expects
that 1994 purchases by and sales to the Baroid subsidiary will approximate 1993
purchases and sales.
Insurance Sharing Agreement. An indirect insurance subsidiary of Tremont
has assumed the obligations of the issuer of certain reinsurance contracts that
relate to primary insurance policies issued by a third-party insurance company
in favor of Tremont and the Company. The Company and the Tremont indirect
insurance subsidiary are parties to an insurance sharing agreement with respect
to such reinsurance contracts (the "Insurance Sharing Agreement"). Under the
terms of the Insurance Sharing Agreement, the Company is to reimburse the
Tremont insurance subsidiary with respect to certain loss payments and reserves
established by such Tremont subsidiary that (a) arise out of claims against the
Company and its subsidiaries (the "NL Liabilities"), and (b) are subject to
payment by such Tremont subsidiary under its reinsurance contracts with the
third-party insurance company. Also pursuant to the Insurance Sharing
Agreement, the Tremont insurance subsidiary is to credit the Company with
respect to certain underwriting profits or recoveries that such Tremont
subsidiary receives from independent reinsurers that relate to the NL
Liabilities. As of December 31, 1993, the Company had current accounts payable
to such Tremont subsidiary of approximately $4.8 million with respect to such
Agreement.
22
<PAGE> 26
Baroid Letter of Credit. Approximately $2.4 million of a $6 million letter
of credit issued under Baroid's existing bank credit facility which
collateralizes certain obligations arising out of insurance arrangements of the
Company and its subsidiaries continued to be outstanding in 1993. The Company
reimburses Baroid for its share of the fees and expenses arising from this
letter of credit.
CERTAIN LITIGATION
In November 1991, a purported derivative complaint was filed in the Court of
Chancery of the State of Delaware, New Castle County, (Alan Russell Kahn v.
Tremont Corporation, et al., No. 12339), in connection with Tremont's
agreement to purchase 7.8 million shares of Common Stock from Valhi. In
addition to Tremont, the complaint names as defendants Valhi and the members of
the Board of Directors of Tremont, including Messrs. Martin, Glenn Simmons,
Harold Simmons and Snetzer and Ms. Alderton. The complaint alleges, among other
things, that Tremont's purchase of the Company shares constitutes a waste of
Tremont's assets and that the Tremont Board of Directors breached its fiduciary
duties to Tremont's public stockholders and seeks, among other things, to
rescind Tremont's consummation of the purchase of the Company shares and award
damages to Tremont for injuries allegedly suffered as a result of the
defendants' wrongful conduct. It is the Company's understanding that Tremont
believes, and understands that the other defendants believe, that the action is
without merit. The Company understands that Tremont has and the other
defendants have denied all allegations of wrongdoing and liability, and intend
to vigorously defend this action. The defendants have moved to dismiss the
complaint on the ground that the plaintiff lacks standing to pursue this
action, and a hearing on the motion has been scheduled for April 1994.
INDEPENDENT ACCOUNTANTS
The firm of Coopers & Lybrand served as independent auditors of the Company
for the year ended December 31, 1993, and is expected to be considered for
appointment to serve for the year ended December 31, 1994. Representatives of
Coopers & Lybrand are expected to attend the Annual Meeting. They will have an
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
In order to be included in the Company's 1995 proxy statement and form of
proxy, shareholder proposals for the 1994 annual meeting of shareholders must
be received at the principal executive offices of the Company, 3000 North Sam
Houston Parkway East, Houston, Texas 77032, Attention: Mr. David B. Garten,
Secretary, not later than November 24, 1994. All such proposals shall be
treated in accordance with applicable rules administered by the Commission.
1993 ANNUAL REPORT ON FORM 10-K
A copy of the Company's 1993 Annual Report on Form 10-K, as filed with the
Commission, is included as part of the Annual Report to Shareholders mailed to
the shareholders with this Proxy Statement. An additional copy of such Form
10-K may be obtained without charge by writing: Investor Relations Department,
NL Industries, Inc., 3000 North Sam Houston Parkway East, Houston, Texas 77032.
OTHER MATTERS
The Board does not know of any business except as described above which may
be presented for consideration at the Annual Meeting. If any business not
described in this Proxy Statement should properly come before the Annual
Meeting, the persons designated as agents in the enclosed proxy card or voting
instruction form will vote on those matters in accordance with their best
judgment.
Houston, Texas NL INDUSTRIES, INC.
March 30, 1994
23
<PAGE> 27
NL Industries, Inc.
200 North Sam Houston Parkway East
Houston, Texas 77032
FOR ANNUAL MEETING OF SHAREHOLDERS MAY 4, 1994
The undersigned hereby appoints David B. Garten, Lourdes T. Hernandez
and Dennis G. Newkirk and each of them, the proxy and attorney-in-fact
P for the undersigned, with full power of substitution in each, to
represent the undersigned and vote on behalf of the undersigned at the
R Annual Meeting of Shareholders of NL Industries, Inc. to be held on May
4, 1994, and at any adjournment or postponement of such meeting, all
O Common Stock of NL Industries, Inc. standing in the name of the
undersigned or which the undersigned may be entitled to vote on the
X matters described on the reverse side.
Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NL
INDUSTRIES, INC.
You are encouraged to specify your voting choices by marking the
appropriate boxes on the reverse side of this card but you need not
mark any boxes if you wish to vote in accordance with the Board of
Directors' recommendations. The Proxy Committee cannot vote your shares
unless you sign, date and promptly return this card. Please use the
enclosed return envelope. This proxy may be revoked by a proxy accepted
at a later date or otherwise as set forth in the NL Proxy Statement
which accompanies this proxy card.
SEE REVERSE SIDE
<PAGE> 28
/X/ Please mark your votes as in this example 9857
This proxy if properly executed, will be voted as specified below
by the shareholder. If no direction is given, this proxy will be voted FOR all
nominees named in item 1 set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1 SET FORTH BELOW.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF SEVEN DIRECTORS FOR / / WITHHOLD / / Nominees: J. Landis Martin, Kenneth R. Peak,
(except authority Glenn R. Simmons, Harold C. Simmons,
as indicated to vote Lawrence A. Wigdor, Michael A. Snetzer,
below) for all and Admiral Elmo R. Zumwalt, Jr.
nominees
</TABLE>
Withhold authority to vote for the following individual nominees.
- ------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any postponement thereof.
- ------------------------------------------------------------------------------
Please sign exactly as name appears on this
card. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign full corporate name and
sign authorized officer's name and title. If a
partnership, please sign in partnership name and
sign authorized person's name and title.
The Undersigned hereby revokes all proxies
heretofore given by the undersigned to vote at such
meeting or any adjournments or postponements
thereof.
-------------------------------------------------
-------------------------------------------------
SIGNATURE(S) DATE
<PAGE> 29
APPENDIX A
page 20 -- a line graph plotting the points shown in the chart on page 20 which
compares the yearly percentage change in the cumulative total
shareholder return on the Common Stock against the cumulative total
return of the S & P Composite 500 Stock Index and S & P Chemical
Index for the period commencing December 31, 1988 and ending
December 31, 1993.
