<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Petrolite Corporation
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Charles R. Miller
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computer
pursuant to Exchange Act Rule 0-11:*1*
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4) Proposed maximum aggregate value of transaction:
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*1* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE> 2
Notice of
ANNUAL MEETING
and
PROXY STATEMENT
Annual Meeting of Stockholders
MARCH 7, 1994
<PAGE> 3
PETROLITE CORPORATION
369 MARSHALL AVENUE
ST. LOUIS, MISSOURI 63119
(314) 961-3500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 7, 1994
TO THE STOCKHOLDERS OF
PETROLITE CORPORATION:
The Annual Meeting of the Stockholders of Petrolite Corporation, a
Delaware corporation, will be held at 11:00 o'clock a.m., Central
Standard Time, on Monday, March 7, 1994, in Conference Room 1 on the
Atrium Level at Boatmen's Plaza, 800 Market Street, St. Louis, Missouri
for the following purposes:
1. To elect ten Directors.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on January 7,
1994, are entitled to notice of and to vote at the meeting or any
adjournment or adjournments thereof.
By order of the Board of Directors
CHARLES R. MILLER
Secretary
January 20, 1994
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE. YOUR GRANT OF THE PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON SHOULD YOU DECIDE TO ATTEND THE MEETING.
<PAGE> 4
PETROLITE CORPORATION
369 MARSHALL AVENUE
ST. LOUIS, MISSOURI 63119
(314) 961-3500
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MARCH 7, 1994
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Petrolite Corporation
(hereinafter called the "Company") for use at the Annual Meeting of
Stockholders to be held in accordance with the foregoing notice (the
"Annual Meeting"). It is anticipated that this Proxy Statement,
together with the Proxy and the 1993 Annual Report to Stockholders,
will be mailed to the Company's stockholders on or about January 21,
1994.
PROXY SOLICITATION
THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. All Proxies in the enclosed form which are executed properly
and returned to the Company will be voted at the Annual Meeting, or any
adjournment or adjournments thereof, in accordance with the
instructions of such Proxies and, if no contrary instructions are
given, FOR the Directors nominated by the Board of Directors. A
stockholder executing and returning a Proxy has the power to revoke it
at any time before it is exercised by either executing and delivering a
later-dated Proxy to the Secretary of the Company, or by delivering a
duly-executed written revocation of such Proxy to the Secretary of the
Company.
The inspectors of election will treat shares represented by properly
signed and returned Proxies that reflect abstentions as shares that are
present and entitled to vote for purposes of determining the presence
of a quorum and for purposes of determining the outcome of any question
submitted to the stockholders for a vote. Except as otherwise noted
herein, abstentions do not constitute a vote "for" or "against" a
question and will be disregarded in the calculation of the votes cast.
"Broker non-votes" are those shares held by brokers or nominees as to
which instructions have not been received from the beneficial owners or
persons entitled to vote, and as to which the broker or nominee does
not have the discretionary power to vote on a particular question. The
inspectors of election will treat "broker non-votes" as shares that are
present and entitled to vote for purposes of establishing a quorum. For
purposes of determining the outcome of any question as to which the
broker has physically indicated on the Proxy that it does not have
discretionary authority to vote, these shares will be treated as not
present and not entitled to vote with respect to that question, even
though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other questions.
Other than the election of Directors, the Company does not know of
any matters which are to come before the meeting. If any other matters
are presented properly to the meeting for action, it is intended that
the persons named in the accompanying form of Proxy, and acting
thereunder, will vote in accordance with their best judgment on such
matters.
The Company will bear the entire cost of preparing, assembling,
printing and mailing this Proxy Statement, the Proxy, and any
additional material which may be furnished to brokerage houses, banks,
fiduciaries and custodians to forward to their principals, and the
Company may reimburse them for their expense in so doing. The Company
will not pay any commission or remuneration to any person for any
solicitation of Proxies.
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<PAGE> 5
VOTING SECURITIES
Stockholders of record at the close of business on January 7, 1994,
are entitled to notice of and to vote at the Annual Meeting. The
Company had outstanding on that date 11,294,271 shares of capital stock
(after deducting 907,326 held in treasury). Each outstanding share of
capital stock is entitled to one vote on all matters coming before the
Annual Meeting. The presence, either in person or by Proxy, of persons
entitled to cast a majority of such votes constitutes a quorum for the
transaction of business at the Annual Meeting.
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tabulation shows the holdings of each person who owns
of record, or who is known by the Company to own beneficially, more
than five percent (5%) of the Company's capital stock. Except as
indicated otherwise, these beneficial owners possess sole voting and
sole dispositive power with respect to the total number of shares
reported.
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------ ---------------------- --------
<S> <C> <C>
Wm. S. Barnickel & Company 5,337,360(1) 47.3%
P.O. Box 190189
St. Louis, MO 63119-6189
Boatmen's Bancshares, Inc. 953,747(1)(2) 8.4%
100 North Broadway
St. Louis, MO 63102
Mitchell Hutchins Institutional Investors Inc. 741,377(3) 6.6%
1285 Avenue of the Americas
New York, NY 10019
</TABLE>
The following tabulation sets forth the number and percentage of shares
of the Company's capital stock beneficially owned, directly or
indirectly, by each of the Company's Directors, Director Nominees, and
Named Executive Officers and by the Directors and Executive Officers of
the Company as a group. Except as noted otherwise, such persons possess
sole voting and sole dispositive power with respect to the entire
number of shares reported. With respect to the Directors, except for
Mr. Cornelsen and Mr. Nasser, the amount shown includes 2,000 shares
deemed to be outstanding pursuant to stock options that are presently
exercisable.
DIRECTORS, DIRECTOR NOMINEES AND NAMED EXECUTIVE OFFICERS
<TABLE>
DIRECTORS AND DIRECTOR NOMINEES
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------ ---------------------- --------
<S> <C> <C>
Paul F. Cornelsen 3,100 *
Andrew B. Craig, III 3,000 *
Louis Fernandez 3,000 *
Paul H. Hatfield 500 *
Michael V. Janes 126,300(4) 1%
William E. Maritz 3,000 *
James E. McCormick 3,000 *
William E. Nasser 14,463(5) *
Richard L. O'Shields 500 *
Thomas P. Reidy 3,000 *
<FN>
- -----
*Less than 1%
</TABLE>
3
<PAGE> 6
<TABLE>
NAMED EXECUTIVE OFFICERS
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------ --------------------- --------
<S> <C> <C>
Jasper S. Titone 13,423(5) *
Toby R. Graves 3,520(5) *
Richard J. Seidel 10,302(5) *
Ralph J. Churchill 471(5) *
All Directors and Officers 223,508(6) 2%
as a group (21 persons)
<FN>
- -----
*Less than 1%
Note (1): Ninety percent of the outstanding capital stock of Wm. S.
Barnickel & Company is held by a trust established under the
will of William S. Barnickel, deceased, of which Michael V.
Janes and Boatmen's Trust Company, a subsidiary of Boatmen's
Bancshares, Inc., serve as co-trustees. The co-trustees share
voting and dispositive power over the trust assets. The death
of Genevieve B. Janes on August 27, 1993, terminated the
trust. The assets of the trust, including the shares of Wm.
S. Barnickel & Company, continue to be held by the trustees
pending distribution of the trust assets. The remaining
shares of stock of Wm. S. Barnickel & Company are held by two
other trusts, of which Boatmen's Trust Company serves as
Trustee.
Note (2): Shares shown are held by Boatmen's Bancshares, Inc., and its
subsidiary companies, which companies have shared voting
power over 140,434 shares and shared dispositive power over
221,304 shares. Information presented as of November 30,
1993.
Note (3): Mitchell Hutchins Institutional Investors Inc. possesses
shared voting and dispositive power over all of the shares
shown. Information presented as of February 11, 1993.
Note (4): Includes 60,800 shares held in trust over which Mr. Janes, as
one of three co-trustees, shares voting and investment
powers, and includes 2,700 shares with respect to which Mr.
Janes disclaims beneficial ownership. Excludes 5,337,360
shares held by Wm. S. Barnickel & Company, 90% of the capital
shares of which are held by a trust established under the
will of William S. Barnickel, deceased. Mr. Janes serves as
one of two co-trustees of such trust and has shared voting
and dispositive power with respect to the trust assets. (See
Note (1)). Mr. Janes is a Director and Officer of Wm. S.
Barnickel & Company.
Note (5): The amount shown includes shares which are deemed to be
outstanding pursuant to stock options that are presently
exercisable or are exercisable within sixty days of January
7, 1994, as follows: Mr. Nasser, 5,000; Mr. Titone, 7,500;
Dr. Graves, 1,000; Mr. Seidel, 6,000. The amount shown
includes shares of capital stock held in trust for the
benefit of individual Officers through the Company Employees'
Savings Plan, as follows: Mr. Nasser, 3,805; Mr. Titone,
1,736; Dr. Graves, 1,729; Mr. Seidel, 3,445; Dr. Churchill,
471. The participants share investment authority with the
Plan trustee, and the shares are voted by the Plan trustee.
(Savings Plan information presented as of September 30,
1993.)
Note (6): The amount shown includes 48,700 shares which are deemed to
be outstanding pursuant to stock options that are presently
exercisable, or are exercisable within sixty days of January
7, 1994. The amount shown includes 21,714 shares held in
trust for the benefit of individual Officers through the
Company Employees' Savings Plan. (Savings Plan information
presented as of September 30, 1993.)
</TABLE>
ELECTION OF DIRECTORS
Ten Directors, comprising the entire membership of the Board of
Directors of the Company, are to be elected at the Annual Meeting.
Unless contrary instructions are given, Proxies will be voted for the
following named persons, each to hold the office of Director for the
ensuing year, subject to the provisions of the By-Laws. If, for
unforeseen reasons, any of such nominees should be unable to serve as
Director, it is intended that Proxies not limited to the contrary will
be voted in favor of the election as Director of such other person or
persons as the Proxy holder may determine.
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<PAGE> 7
<TABLE>
The following information is submitted with respect to nominees for
election as Director. Unless indicated otherwise, each person listed
below has served in his present occupation for at least five years.
<CAPTION>
SERVED
AS
CURRENT POSITIONS AND DIRECTOR
NAME NOTES AGE OFFICE WITH THE COMPANY SINCE
---- ----- --- ----------------------- ---------
<S> <C> <C> <C> <C>
Paul F. Cornelsen............................ (1)(3) 70 Director 1979
Andrew B. Craig, III......................... (1)(3) 62 Director 1989
Louis Fernandez.............................. (2) 69 Director 1983
Paul H. Hatfield............................. 58 - -
Michael V. Janes............................. (1)(2) 52 Director 1988
William E. Maritz............................ (3)(4) 65 Director 1986
James E. McCormick........................... (2)(4) 66 Director 1992
William E. Nasser............................ (1) 54 Chairman of the Board, President and
Chief Executive Officer 1988
Richard L. O'Shields......................... 68 - -
Thomas P. Reidy.............................. (3)(4) 65 Director 1985
<FN>
- -----
Note (1): Member, Executive Committee of Board of Directors.
Note (2): Member, Audit Committee of Board of Directors.
Note (3): Member, Compensation Committee of Board of Directors.
Note (4): Member, Nominating Committee of Board of Directors.
</TABLE>
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND
DIRECTORSHIPS OF NOMINEES FOR ELECTION AS DIRECTORS
PAUL F. CORNELSEN: Mr. Cornelsen, a Director of the Company since
1979, previously served as Chairman and Chief Executive Officer of
MiTek, Inc. (formerly MiTek Industries, Inc.), an international parent
company whose subsidiaries principally manufacture engineered
components for the building construction industry. He also is a
Director of DEKALB Genetics Corporation.
ANDREW B. CRAIG, III: Mr. Craig, a Director of the Company since
1989, is Chairman, President and Chief Executive Officer of Boatmen's
Bancshares, Inc. He also is a Director of Anheuser-Busch Companies,
Inc., and a Trustee of Washington University in St. Louis.
LOUIS FERNANDEZ: Dr. Fernandez, a Director of the Company since 1983,
previously served as Chairman, President and Chief Executive Officer of
Celgene Corporation. He formerly was the Chairman of Monsanto Company.
He also is a Director of Boehringer Ingelheim Corporation, IMCERA
Group, Inc., A. G. Edwards and Sons, Inc., Alteon, Inc., and Arcturus
Pharmaceutical Corporation.
PAUL H. HATFIELD: Mr. Hatfield is President and Chief Executive
Officer of Protein Technologies International, a Ralston Purina Company
based in St. Louis, Missouri. Protein Technologies International is
technology based, with its primary product line of soy protein based
food ingredients marketed with direct account management, sales and
technical support people in over forty countries. He also is a director
of DEKALB Genetics Corporation, Japan American Society, and Stout
Industries.
MICHAEL V. JANES: Mr. Janes, a Director of the Company since 1988, is
engaged in private investments. He also is a Director of Wm. S.
Barnickel & Company and Gross & Janes Company.
5
<PAGE> 8
WILLIAM E. MARITZ: Mr. Maritz, a Director of the Company since 1986,
is Chairman and Chief Executive Officer of Maritz, Inc., a performance
improvement, travel, communications, training and marketing research
company. He also is a Director of General American Life Insurance
Company, Brown Group, Boatmen's Bancshares, Inc., and a Trustee of
Washington University in St. Louis.
JAMES E. MCCORMICK: Mr. McCormick, a Director of the Company since
1992, previously served as President and Chief Operating Officer of
Oryx Energy Company and as President and Chief Operating Officer of Sun
Exploration and Production Company. He also is a Director of Lone Star
Technology, B. J. Services, Snyder Oil Corporation and Texas Commerce
Bank.
WILLIAM E. NASSER: Mr. Nasser, a Director of the Company since 1988,
was elected Chairman and Chief Executive Officer of the Company in
February, 1992. He has served as President of the Company since May,
1988. He has been with the Company since 1962, serving previously as
Vice President and General Manager of Petrolite's Specialty Polymers
Group. He also is a Director of The Boatmen's National Bank of St.
Louis and Energy BioSystems Corporation.
RICHARD L. O'SHIELDS: Mr. O'Shields previously served as Chairman and
Chief Executive Officer of Panhandle Eastern Corporation, operator of
one of the major interstate gas pipeline systems in the nation. He also
is a Director of Daniel Industries, Inc., and a member of the National
Advisory Board for First Commercial Bank of Little Rock, Arkansas.
THOMAS P. REIDY: Mr. Reidy, a Director of the Company since 1985, is
the President and Chief Executive Officer of Reidy International, Inc.,
an oil and gas exploration company.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal year 1993, the Company's Board of Directors held eight
meetings. The Board has established the following standing Committees:
Executive Committee, Audit Committee, Compensation Committee, and
Nominating Committee. Each Director attended at least 75% or more of
the aggregate of the meetings of the Board of Directors and of the
Committees of the Board of Directors on which he served.
The Executive Committee (established in 1963) met three times in
fiscal year 1993. The Committee exercises the powers of the Board in
directing the management of the business and affairs of the Company
between meetings of the Board (except for certain matters reserved to
the Board).
The Audit Committee (established in 1975) met three times in fiscal
year 1993. The Committee reviews the scope and procedures of the audit
activities of both the independent accountants and the Company's
internal auditors, and reviews the reports on their examinations,
together with any recommendations concerning internal controls. It also
reviews reports from the Company's financial management, general
counsel, independent auditors and internal auditors on compliance with
corporate policies and the adequacy of the Company's internal
accounting controls. In order to assure complete independence, the
Committee meets regularly with the independent accountants, both prior
to and subsequent to the annual audit. The Committee also reviews the
scope of the non-audit professional services provided by the
independent accountants. The Committee also is responsible for
recommending to the full Board the firm of independent accountants to
be retained each year.
The Compensation Committee (established in 1977) met five times in
fiscal year 1993. The Committee, which is composed solely of outside
Directors, reviews the competency and effectiveness of the management
of the Company, reviews the soundness and adequacy of the Company's
compensation programs, approves compensation for senior Officers of the
Company, reviews the adequacy of compensation of senior management of
the Company, and formulates and administers the Company's special
compensation programs. The Committee members are "disinterested
persons" within the meaning of Rule 16b-3 under the Securities Exchange
Act of 1934. The Committee administers the Company's stock incentive
plans.
The Nominating Committee (established in 1991) did not meet in fiscal
year 1993. The Committee recommends individuals for election to the
Board. The Committee will consider nominees
6
<PAGE> 9
recommended by stockholders to be considered for the 1995 Annual
Meeting of Stockholders. Any such recommendations must be submitted in
writing to the corporate office no later than October 5, 1994.
CERTAIN TRANSACTIONS
During fiscal year 1993, the Company and its subsidiaries engaged, in
the ordinary course of business, in various types of transactions with
other corporations with which Directors of the Company are associated
either as Officers or Directors. It is expected that the Company and
its subsidiaries will continue to engage in such transactions. The
Company does not consider the amounts involved in such transactions to
be material in relation to the businesses of such other corporations or
the interests of the Directors involved.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors (the
"Committee") reviews the competency and effectiveness of the management
of the Company, reviews the soundness and adequacy of the Company's
compensation and benefit programs, and administers the Company's stock
incentive plans. In fulfilling these responsibilities the Committee
evaluates the performance of the Chief Executive Officer and other
executive officers and determines their compensation levels in terms of
base salary, variable incentive compensation, stock options, and
related benefits, all subject to Board approval.
COMPENSATION PHILOSOPHY
The Company's base and incentive compensation programs reward
individual and team performance on both quantitative and qualitative
factors. The Company's philosophy of total compensation is to combine a
competitive base salary with incentive plans that link Company
financial results to individual compensation, thus aligning the
Company's compensation system with shareholder value.
Base salaries are competitive with market rates and are based on an
internal evaluation of the responsibilities required of each position.
Increases to base salaries are based on annual supervisor reviews and
are intended to recognize individual performance that contributes to
Company growth.
The Company's incentive compensation programs for fiscal year 1993
linked the total compensation of the Company's key employees to
increases in sales revenues, pretax earnings, and year-to-year
increases in return on sales. Since 1988, when participation in
incentive compensation plans was limited to less than 20% of executives
and sales personnel, the Company has broadened participation in these
plans to include key division support employees, marketing and
technical support employees, corporate executives, and key corporate
managers. Presently about 60% of all salaried employees are included in
such plans, all designed to reward increases in profitability and
shareholder value.
The Company's total compensation approach reflects its divisional
structure. The performance of each of the Company's strategic business
units is measured separately, and year-end incentive compensation
payments for division employees are awarded accordingly. Incentive
payments for corporate executives and key corporate managers are linked
to the overall performance of the Company.
Within the divisions, year-end incentive compensation payments for
fiscal year 1993 were based on an employee's job function. For division
executives, marketing, technical, and other key division personnel,
incentive compensation payments were linked to the employee's
contribution to overall profitability. For division sales personnel,
incentive compensation payments were based on the increase in sales
contribution dollars (defined as sales revenues less certain costs)
over the prior year.
7
<PAGE> 10
Incentive compensation payments to division staff support, marketing,
and technical support employees were based either on the increase in
regional contribution to the Company's profits or on the increase in
the Division's pretax earnings and return on sales. Incentive
compensation payments to key division management employees were based
on pretax earnings growth, increased return on sales, and performance
against the annual business plan.
Corporate executives and key corporate managers were eligible to
receive incentive compensation payments based on the growth in pre-tax
earnings and in return on sales, which were based on the business
plans. The operation of the Company's incentive plans and the potential
payments thereunder were provided in writing to eligible employees at
the beginning of each fiscal year.
COMPENSATION REPORT
The Company's total compensation philosophy is premised on the
integration of base salary, variable incentive compensation, stock
option grants and other benefits to offer appropriate compensation to
Company employees. The following is a summary of the compensation
reported for fiscal year 1993:
BASE SALARY
In reviewing base salaries, the Committee relies on independent
industry surveys to assess salary competitiveness. The base salaries
offered to the Company's executive officers tend to fall between the
60th and 75th percentile of the ranges identified by industry surveys.
The Committee believes the Company's competitors for executive talent
are not limited to those that would be included in a peer group
reviewed to compare stockholder returns. For this reason, the companies
analyzed for compensation purposes are not necessarily the same as the
peer group index in the Comparison of Five Year Cumulative Total Return
graph included in this Proxy Statement.
Approved salary increases are awarded annually on February 1 to
ensure fairness across the Company and to reflect both the previous
fiscal year's operating results and individual employee performance. In
1993 about 68% of all salaried employees received some percentage
increase in base salary.
VARIABLE COMPENSATION INCENTIVE PLANS
The Company provides opportunities for compensation above the base
salary level through its incentive compensation plans.
ANNUAL INCENTIVE PLAN
Participants in this plan were selected by the Committee from
officers and key employees of the Company and its affiliates. The total
number of participants may not exceed 5% of the Company employees
worldwide. Annual incentive compensation payments were based on target
amounts, which ranged from 20% to 70% of a participant's base salary,
selected by the Committee when an individual was designated to
participate in the Plan. The actual annual incentive compensation
payment was based on pretax earnings and return on sales for the fiscal
year.
For fiscal year 1993, 90% of key division management employees and
94% of corporate executives and key corporate managers received an
incentive compensation payment. These payments were based on an
increase in pretax earnings of 26.5% and an increase in return on sales
of 18.5% from the previous year and, at the division level, actual
results compared to the business plan. Fully 63% of the target amounts
for fiscal year 1993 were paid out to the participants. By comparison,
90% of eligible sales, marketing, technical, and divisional staff
employees received an incentive payment under other incentive plans
established by the Company and described previously in this report.
1993 STOCK INCENTIVE PLAN
During fiscal year 1993 the Committee limited the options granted
under this Plan to the Chief Executive Officer and key senior managers.
The option grants are designed to retain these key
8
<PAGE> 11
managers and to motivate them to improve the Company's long-term market
performance, thus aligning more closely their interests with those of
stockholders.
The Committee considered data on general manufacturing industry
practices in determining the number of stock options to be granted. The
data included a survey of long-term incentive plans maintained by
companies with annual sales under $1 billion. The Committee set the
long-term incentive amounts at a level consistent with the 50th
percentile of amounts shown in the survey.
The figure calculated then was converted into a number of stock
options using the Black-Scholes option pricing model. The number of
stock options was multiplied by four to reflect a four-year up-front
grant. The Committee then adjusted the figures to reflect the
Committee's judgment about each optionee's relative job scope and
responsibility with the Company. Because the number of options granted
under the Company's 1987 Stock Incentive Plan varied only slightly from
optionee to optionee, the number of options granted under the 1987 Plan
were not a factor considered in granting options under the 1993 Plan.
The Committee granted options in two groups with different
performance criteria. The performance criteria are summarized in the
footnotes to the table showing Options Granted in FY 1993 on page 11 of
this proxy statement.
In the event that any person or group, as defined in Sections 13(d)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other
than the Company, acquires directly or indirectly ownership of 51% or
more of the outstanding capital stock of the Company or acquires
substantially all of its assets, all stock options granted under the
1993 Plan will become exercisable for a period of one year, regardless
of whether the applicable performance targets have been met.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In reviewing the fiscal 1993 base salary for the Company's Chairman
and Chief Executive Officer, Mr. William E. Nasser, the Committee
considered the demonstrated leadership he brings to the Company based
on his 30 years of experience with the Company. The Committee
considered his development and implementation of policies and practices
that are consistent with the strategic operating principles and that
contributed to eight consecutive quarters of improvement in
profitability and shareholder return prior to February 1, 1993. An
assessment of CEO compensation within other companies of similar size
and profitability, both inside and outside the industry, also was
reviewed.
In addition, the Committee noted that Mr. Nasser's base salary had
not been increased since February, 1990. In light of all these factors,
Mr. Nasser's base salary was increased 6.3% in February, 1993. The
Committee undertook a similar assessment in recommending the grant of
stock options to Mr. Nasser, subject to the performance criteria
discussed in the table showing Options Granted in FY 1993.
Finally, based on the Company's 1993 achievements, including sales
growth of 10.6%, an increase in pretax earnings of 26.5%, a growth in
earnings per share of 25.5%, and Mr. Nasser's personal performance, the
Committee recommended and the Board approved an incentive compensation
payment of $193,463, which was 58.6% of his base salary.
This Compensation Committee Report shall not be deemed incorporated
by reference by any general statement incorporating by reference this
Proxy Statement into any filing under the Securities Act or Exchange
Act, except to the extent the Company specifically incorporates this
report by reference, and otherwise shall not be deemed filed under such
Acts.
Andrew B. Craig, III
William E. Maritz
Thomas P. Reidy
Paul F. Cornelsen, Chairman
9
<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the
compensation for services to the Company in all capacities for the
fiscal years ended October 31, 1993, October 31, 1992, and October 31,
1991, of those persons who were, respectively at October 31, 1993, (i)
the Company's Chief Executive Officer and (ii) the four other most
highly compensated Executive Officers of the Company whose annual
salary and bonus for the fiscal year ended October 31, 1993, exceeded
$100,000 (collectively the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------------- ----------------------
OTHER RESTRICTED STOCK ALL OTHER
ANNUAL STOCK OPTION COMPEN-
BONUS COMPEN- UNIT(S) GRANTS SATION
NAME AND PRINCIPAL POSITION YEAR SALARY (1) SATION (2) (3) # (4)
--------------------------- ---- ------ ----- ------ ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
William E. Nasser 1993 $330,000 $193,463 - - 220,000 $2,800
Chairman of the Board, President 1992 $315,000 - $6,875 - - $1,800
and Chief Executive Officer 1991 $315,000 $176,400 - $33,045 - $1,800
Jasper S. Titone 1993 $158,875 $ 73,935 - - 90,000 $2,800
Group Vice President-Chemicals 1992 $147,333 $ 25,219 - - - $1,800
1991 $140,000 $ 36,519 - $22,030 - $1,800
Toby R. Graves 1993 $156,000 $ 43,872 - - 60,000 $1,300
Vice President, General Manager, 1992 $142,166 - - - - -
Polymers Division 1991 $122,000 $ 48,156 - $ 2,400 - -
Richard J. Seidel 1993 $147,499 $ 56,000 - - 24,000 $2,800
Vice President, General Manager, 1992 $142,333 - - - - $1,800
Petreco Division 1991 $135,000 $ 12,150 - $21,537 - $1,800
Ralph J. Churchill 1993 $135,250 $ 50,861 - - 30,000 $2,800
Vice President, Special Projects 1992 $129,166 - - - - $1,800
1991 $120,000 - - - - $1,800
<FN>
- -----
(1) The amounts reflect the incentive compensation paid under the
Annual Incentive Plan for the fiscal years noted. See the
Compensation Committee's Report to stockholders beginning on Page 7
for a description of this Plan.
(2) The amounts reflect the value of the final payment on restricted
stock units made during the fiscal year, plus the dividend
equivalents paid during the fiscal year on those units prior to
their distribution.
(3) The options were granted pursuant to the Petrolite 1993 Stock
Incentive Plan. See the Compensation Committee's Report to
stockholders beginning on Page 7 of this Proxy Statement.
(4) Reflects the cash value of contributions by the Company to the
Employees' Savings Plan (a defined contribution savings plan) as a
match to a portion of the employee's contributions under the Plan.
Due to a change in the Plan during the fiscal year, the actual cash
value of the Company's contribution for fiscal year 1993 only may
exceed the Plan year maximum.
</TABLE>
10
<PAGE> 13
STOCK OPTIONS GRANTED IN FISCAL YEAR 1993
The following table sets forth information concerning options granted
under the Petrolite 1993 Stock Incentive Plan to the Chief Executive
Officer and the Named Executive Officers during the fiscal year ended
October 31, 1993.
<TABLE>
OPTIONS GRANTED IN FISCAL YEAR 1993
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS EXERCISE
OPTIONS GRANTED IN PRICE EXPIRATION GRANT DATE
NAME GRANTED FISCAL YEAR(3) ($/SH) DATE PRESENT VALUE(4)
---- ----------- -------------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
William E. Nasser................. 150,000(1) $32.875 6/09/2003 $ 754,500
70,000(2) $32.875 6/09/2003 385,000
------- ----------
220,000 34.4% $1,139,500
Jasper S. Titone.................. 60,000(1) $32.875 6/09/2003 $ 301,800
30,000(2) $32.875 6/09/2003 150,500
------- ----------
90,000 14.1% $ 452,300
Toby R. Graves.................... 40,000(1) $32.875 6/09/2003 $ 201,200
20,000(2) $32.875 6/09/2003 100,600
------- ----------
60,000 9.0% $ 301,800
Richard J. Seidel................. 16,000(1) $32.875 6/09/2003 $ 80,480
8,000(2) $32.875 6/09/2003 40,240
------- ----------
24,000 3.7% $ 120,720
Ralph J. Churchill................ 20,000(1) $32.875 6/09/2003 $ 100,600
10,000(2) $32.875 6/09/2003 50,300
-------- ----------
30,000 5.0% $ 150,900
<FN>
- -----
(1) The option becomes exercisable in five equal annual installments
beginning five (5) market days after the first anniversary of the
option grant so long as the value of the Company's stock (market
price plus dividends paid) shows an average annual growth rate of
not less than ten percent (10%) with respect to the first
anniversary date and shows an average annual compound growth rate
of not less than ten percent (10%) from the date of the option
grant with respect to each succeeding annual anniversary date; or
shows, with respect to any anniversary date, an average annual
compound growth rate of ten percent (10%) from the date of the
option grant. The option becomes fully exercisable for one day
after the fifth anniversary of the grant date.
(2) The option becomes exercisable beginning five (5) market days after
the fifth anniversary of the date of the grant with respect to a
percentage of shares subject thereto determined by the average of
the compound annual growth in the value of the Company's stock
(market price plus dividends paid) from the date of the option
grant, according to the following schedule:
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
SHARES SUBJECT
FIVE-YEAR AVERAGE TO THE OPTION
COMPOUND ANNUAL GROWTH THAT BECOMES
IN SHAREHOLDER VALUE EXERCISABLE
---------------------- -------------
<S> <C>
Less than 11%...................................... 0
11% but less than 12%.............................. 10%
12% but less than 13%.............................. 20%
13% but less than 14%.............................. 30%
14% but less than 15%.............................. 60%
15% and above...................................... 100%
<FN>
(3) Includes 28,000 options granted to Directors and Advisory Directors
during the fiscal year.
(4) Calculated in accordance with the Black-Scholes option pricing
model. The following assumptions were used: Expected volatility,
.1790; risk-free rate of return, 5.50%; dividend yield, 4.65%; time
of exercise, 10-year term. No adjustment was made for non-
transferability or risk of forfeiture, although the options are
subject to performance criteria as outlined in Notes (1) and (2).
</TABLE>
11
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
The following table sets forth information with respect to the Chief
Executive Officer and the Named Executive Officers concerning options
held as of October 31, 1993. Neither the Chief Executive Officer nor
any of the Named Executive Officers exercised options during fiscal
year 1993.
<TABLE>
OPTION VALUES AT END OF FISCAL YEAR 1993
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT OCTOBER 31, 1993 OCTOBER 31, 1993(1)
---------------------------------- ----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William E. Nasser........................................ 5,000 220,000 $33,750 $1,402,500
Jasper S. Titone......................................... 7,500 90,000 $74,375 $ 573,750
Toby R. Graves........................................... 1,000 60,000 $67,500 $ 382,500
Richard J. Seidel........................................ 6,000 24,000 $59,500 $ 153,000
Ralph J. Churchill....................................... - 30,000 $ - $ 191,255
<FN>
- -----
(1) Calculated on the basis of the fair market value of the underlying
securities as of October 31, 1993, ($39.25 per share) minus the
exercise price. The terms under which the options will become
exercisable are set out in the footnotes to the Options Granted
table.
</TABLE>
RETIREMENT BENEFITS
The Company's Retirement Plan is a defined benefit plan with benefits
determined on the basis of years of service and the average covered
remuneration for the five highest consecutive years of service in the
last ten years. Covered remuneration is the annual compensation of an
individual, which includes annual base salary and amounts paid under
the Company's Annual Incentive Plan. Estimated annual benefits payable
upon retirement (assuming normal retirement date) to persons
participating in the Plan are set forth below:
<TABLE>
APPROXIMATE ANNUAL RETIREMENT BENEFIT
<CAPTION>
YEARS OF PARTICIPATION IN PLAN
FINAL AVERAGE -----------------------------------------------------------------------------------
ANNUAL EARNINGS 10 YEARS 20 YEARS 30 YEARS 40 YEARS
--------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$100,000.................. $14,600 $ 29,200 $ 43,800 $ 56,600
150,000.................. 22,400 44,800 67,200 86,500
200,000.................. 30,100 60,200 90,300 116,400
250,000.................. 37,900 75,800 113,700 146,300
300,000.................. 45,600 91,200 136,800 176,100
350,000.................. 53,400 106,800 160,200 206,000
400,000.................. 61,100 122,200 183,300 235,900
450,000.................. 68,900 137,800 206,700 265,800
500,000.................. 76,600 153,200 229,800 295,600
</TABLE>
The benefits shown above are based on a straight life annuity with a
five year guaranty and are paid in addition to any Social Security
benefits to which the individual may be entitled. The compensation
covered by the Plan for the Chief Executive Officer and the Named
Executive Officers is shown in the Summary Compensation Table under the
headings "Salary" and "Bonus." Years of credited service to October 31,
1993, for the Chief Executive Officer and the Named Executive Officers
are: Mr. Nasser, 30; Mr. Titone, 10; Dr. Graves, 20; Mr. Seidel, 7; Dr.
Churchill, 3.
12
<PAGE> 15
The Internal Revenue Code limits the amount of annual benefits
payable from the pension trusts; the limit is currently $115,641 per
year, subject to annual cost of living adjustments. To the extent that
any individual's annual retirement income benefit exceeds such limits,
it may be paid out of Company funds.
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return of the Company,
the S&P 500 Index, and the Specialty Chemical Value Line Index
(dividends reinvested). The graph assumes $100 was invested on October
31, 1988 in Petrolite Corporation stock, the S&P 500 Index and the
Specialty Chemical Value Line Index (the "Peer Group").
COMPARATIVE FIVE-YEAR TOTAL RETURNS
PETROLITE CORP., S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 10/31/93)
[ STOCK PRICE PERFORMANCE GRAPH ]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
PLIT $100.00 $113.68 $ 94.51 $105.38 $128.69 $205.15
S&P 500 $100.00 $126.30 $116.85 $156.01 $171.91 $197.42
Peer Group $100.00 $122.04 $125.30 $193.93 $239.66 $293.41
</TABLE>
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in
the graph above. The Company does not make or endorse any predictions
as to future stock performance.
COMPENSATION OF DIRECTORS
Directors who are not full-time salaried employees of the Company
receive an annual retainer of $18,000 and receive a fee of $1,000 per
meeting for attendance at meetings of the Board of Directors. Directors
who serve on Committees of the Board receive a fee of $750 per meeting
for each Committee meeting attended.
Under the Petrolite 1993 Stock Incentive Plan approved by the
stockholders on March 1, 1993, each Director who has been a member of
the Board of Directors for at least six months receives an option to
purchase 2,000 shares of the Company's capital stock on account of his
or her election by the stockholders at an annual meeting of the
Company. Each such Director who is re-elected to the Board of Directors
at subsequent annual meetings of the Company receives an option to
purchase an additional 2,000 shares at the time of each such
re-election. Under the provisions of the Petrolite 1993 Stock Incentive
Plan, the maximum number of shares that may be received by any one
Director
13
<PAGE> 16
is 10,000. Directors who are employees of the Company receive no
additional compensation for service on the Board of Directors or its
Committees.
INDEPENDENT ACCOUNTANTS
The Company's independent accountants for the fiscal year ended
October 31, 1993 are Price Waterhouse, who were selected by the Board
of Directors upon the recommendation of the Board's Audit Committee.
During fiscal year 1993, the audit services performed by Price
Waterhouse included the examination of the Company's consolidated
financial statements, limited review of results of operations for
quarterly reports, filings with the Securities and Exchange Commission
and consultation relating to professional and SEC pronouncements. A
representative of Price Waterhouse will be in attendance at the
Company's Annual Meeting on March 7, 1994, to respond to appropriate
questions of the stockholders.
STOCKHOLDER PROPOSALS
Any proposal of a stockholder intended to be presented at the 1995
Annual Meeting of Stockholders must be received at the corporate office
no later than October 5, 1994, in order to be included in the Company's
Proxy Statement and form of Proxy relating to that meeting.
OTHER MATTERS
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
The Company's Executive Officers, Directors and persons who own
beneficially more than ten percent (10%) of the Company's stock are
required under Section 16(a) of the Securities Exchange Act of 1934 to
file certain reports of ownership, and changes in ownership, of the
Company's stock with the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc. Copies of such reports
must be filed with the Company. The Company assists these persons in
complying with the Act and with the regulations promulgated thereunder.
Based solely on a review of the copies of such forms furnished to the
Company, and on written representations of the Executive Officers and
Directors, the Company believes that all Section 16(a) filing
requirements applicable to its Executive Officers, Directors and
greater than ten percent (10%) beneficial owners have been complied
with.
ANNUAL REPORT. Copies of the Annual Report for the fiscal year ended
October 31, 1993, including financial statements audited by the
Company's independent accountants, have been mailed to all stockholders
entitled to vote at the Annual Meeting on March 7, 1994. Additional
copies of this Report are available on request.
PETROLITE CORPORATION
14
<PAGE> 17
APPENDIX
A Performance Graph appears on page 13 of the printed proxy statement.
The information depicted in that graph is restated in the table which
immediately follows the graph.
<PAGE> 1
PROXY
PETROLITE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING, MARCH 7,
1994, 11:00 A.M. CENTRAL STANDARD TIME
CONFERENCE ROOM 1 ON THE ATRIUM LEVEL, BOATMEN'S PLAZA, 800 MARKET
STREET, ST. LOUIS, MISSOURI 63101
The undersigned hereby constitutes and appoints William E. Nasser,
John F. McCartney and Charles R. Miller, and each or any of them,
attorneys with full power of substitution, with the powers the
undersigned would possess if personally present, to vote all shares of
Capital Stock of the undersigned in PETROLITE CORPORATION at the Annual
Meeting of Stockholders to be held Monday, March 7, 1994 and at any
adjournments thereof on all matters properly coming before the meeting.
Dated ................... , 1994
...............................
...............................
(THIS PROXY MUST BE SIGNED
EXACTLY AS THE NAME APPEARS
HEREON. IF ACTING AS ATTORNEY,
EXECUTOR, OR TRUSTEE, OR IN A
CORPORATE OR REPRESENTATIVE
CAPACITY, PLEASE SIGN NAME AND
TITLE.)
<PAGE> 2
THIS PROXY WILL BE VOTED AS DIRECTED BELOW OR, IF NO DIRECTION IS
INDICATED, WILL BE VOTED FOR ITEM 1, WHICH VOTE IS RECOMMENDED BY THE
BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS
Nominees: Paul F. Cornelsen, Andrew B. Craig, III, Louis Fernandez,
Paul H. Hatfield, Michael V. Janes, William E. Maritz,
James E. McCormick, William E. Nasser, Richard L.
O'Shields, Thomas P. Reidy
(Mark only one)
/ / VOTE FOR all nominees listed above / / VOTE WITHHELD from all
nominees
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
....................................................................
2. In their discretion, the proxy holders are authorized to vote upon
such other business as may properly come before the meeting.
IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
