<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 / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / 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)
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
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<PAGE> 2
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
PETROLITE
ANNUAL MEETING OF STOCKHOLDERS
MARCH 4, 1996
<PAGE> 3
PETROLITE CORPORATION
369 MARSHALL AVENUE
ST. LOUIS, MISSOURI 63119
(314) 961-3500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 4, 1996
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 4, 1996, 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 eleven 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 5, 1996, 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 23, 1996
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 4, 1996
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 1995 Annual Report to
Stockholders, will be mailed to the Company's stockholders on or about January
26, 1996.
PROXY SOLICITATION
THE ENCLOSED PROXY IS BEING 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 and Director
Nominees 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
either by 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.
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 that 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.
VOTING SECURITIES
Stockholders of record at the close of business on January 5, 1996, are
entitled to notice of, and to vote at, the Annual Meeting. The Company had
outstanding on that date 11,332,948 shares of capital stock (after deducting
887,749 held in treasury). Each outstanding share of capital stock is entitled
to one vote on all matters coming before the meeting of stockholders. The
presence, either in person or by Proxy, of persons
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<PAGE> 5
entitled to cast a majority of such votes constitutes a quorum for the
transaction of business at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows the holdings of each person who owns of record, or
who is known by the Company to own beneficially, more than 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.
<TABLE>
<CAPTION>
TITLE NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-------- ------------------- -------------------- --------
<S> <C> <C> <C>
Capital................... Wm. S. Barnickel & Company 5,337,360<F1> 47.1%
P.O. Box 190189
St. Louis, MO 63119-6189
Capital................... Mitchell Hutchins Institutional 843,587<F2> 7.4%
Investors Inc.
1285 Avenue of the Americas
New York, NY 10019
Capital................... Scudder Stevens & Clark, Inc. 665,000<F3> 5.9%
175 Federal Street
Boston, MA 02110
<FN>
- --------
Note <F1>: Prior to June 6, 1995, 90% of the outstanding capital stock of Wm. S.
Barnickel & Company (``Barnickel Company'') was held by The William
S. Barnickel Testamentary Trust (the ``Barnickel 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., served as co-trustees. The Barnickel
Trust terminated on the death of Genevieve B. Janes on August 27,
1993, and on June 6, 1995, the Barnickel Trust distributed its
assets, consisting primarily of shares of common stock of Barnickel
Company, to its beneficiaries.
The remaining 10% of the outstanding capital stock of Barnickel
Company is held by two other trusts, The John S. Lehmann Trust f/b/o
John S. Lehmann, Jr. and The John S. Lehmann Trust f/b/o Frederick W.
Lehmann III. Boatmen's Trust Company serves as trustee of both of the
Lehmann Trusts.
On June 8, 1995, Boatmen's Bancshares, Inc. (``BBI''), Boatmen's
Trust Company (``BTC''), Barnickel Company, the Barnickel Trust, The
John S. Lehmann Trust f/b/o John S. Lehmann, Jr., The John S. Lehmann
Trust f/b/o Frederick W. Lehmann III, Michael V. Janes, Genevieve J.
Brown, John V. Janes, Jr., William B. Janes, Fairfax F. Pollnow and
Wayne J. Grace (collectively the ``Reporting Persons'') filed a fifth
amendment to previously amended 13D Schedules. The fifth amendment
reported, among other things, that the trustees of the Barnickel
Trust had caused the Barnickel Trust to distribute its assets,
consisting primarily of shares of common stock of Barnickel Company,
to its beneficiaries. The amendment also reported that the Board of
Directors of Barnickel Company continued to analyze possible
strategic alternatives in view of the objectives of maximizing
liquidity, minimizing taxes and providing for impartial treatment of
all Barnickel Company shareholders to the extent practicable.
As previously reported by the Company, on February 7, 1995, the
Board of Directors amended the Rights Agreement dated March 28, 1994,
as amended, to, among other things, clarify that no rights issued
thereunder would become exercisable solely by reason of the
distribution of the assets of the Barnickel Trust pursuant to its
terms.
The Reporting Persons reported aggregate beneficial ownership of
5,681,530 shares of the Company's capital stock, or 50.2% of the
shares outstanding.
BBI reported sole voting and dispositive power over no shares, shared
voting power over 274,824 shares and shared dispositive power over
241,263 shares. BTC reported sole voting power over 138,796 shares,
shared voting power over 136,028 shares, sole dispositive power over
30,782 shares and shared dispositive power over 210,481 shares.
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<PAGE> 6
Barnickel Company reported sole voting and dispositive power over
5,337,360 shares and shared voting and dispositive power over no
shares. The Barnickel Trust reported sole voting and dispositive
power over no shares and shared voting and dispositive power over no
shares.
The John S. Lehmann Trust f/b/o John S. Lehmann, Jr. reported sole
voting and dispositive power over no shares and shared voting and
dispositive power over 400,302 shares. The John S. Lehmann Trust
f/b/o Frederick W. Lehmann III reported sole voting and dispositive
power over no shares and shared voting and dispositive power over
133,434 shares. It was indicated that the reported shares represent
the indirect proportional interests of each trust in the shares of
the Company's capital stock held by Barnickel Company.
Genevieve J. Brown reported sole voting and dispositive power over
11,946 shares and shared voting and dispositive power over 5,337,360
shares.<F*>
John V. Janes, Jr. reported sole voting and dispositive power over
500 shares and shared voting power over 5,337,360 shares.<F*>
Michael V. Janes reported sole voting and dispositive power over
52,400 shares and shared voting and dispositive power over 5,411,260
shares, including the shares owned by Barnickel Company.
William B. Janes reported sole voting power over no shares and
shared voting power over 5,337,360 shares. He reported sole
dispositive power over 23,400 shares and shared dispositive power
over 5,337,360 shares.<F*>
<F*>The amendment disclosed that the reported shares include shares
representing an indirect proportional interest in 800,604
shares of the Company's capital stock held by Barnickel
Company.
Fairfax F. Pollnow reported sole voting and dispositive power over
1,000 shares and shared voting and dispositive power over no shares.
Wayne J. Grace reported sole voting and dispositive power over no
shares and shared voting and dispositive power over no shares.
Subsequent to the filing described above, on September 1, 1995, Mr.
Grace acquired 1,000 shares of the Company's capital stock, over
which he has sole voting and dispositive power.
Note <F2>: Mitchell Hutchins Institutional Investors Inc. possesses shared
voting and dispositive power over all of the shares shown.
Information presented as of February 13, 1995.
Note <F3>: Scudder Stevens & Clark, Inc. possesses shared voting and dispositive
power over 665,000 shares and sole voting and dispositive power over
665,000 shares. Information presented as of April 21, 1995.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows 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, these persons possess sole voting and sole dispositive power with
respect to the entire number of shares reported. The number shown includes
shares deemed to be outstanding pursuant to stock options that are presently
exercisable, as follows: Mr. Craig, 6,000 shares; Dr. Fernandez, 6,000 shares;
Mr. Hatfield, 8,000 shares; Mr. Maritz, 6,000 shares; Mr. O'Shields, 2,000
shares; Mr. Reidy, 6,000 shares.
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<PAGE> 7
<TABLE>
DIRECTORS AND DIRECTOR NOMINEES
<CAPTION>
TITLE NAME OF AMOUNT AND NATURE OF PERCENT
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------- ---------------- -------------------- --------
<S> <C> <C> <C>
Capital................... Paul F. Cornelsen 7,100 <F*>
Capital................... Andrew B. Craig, III 7,000 <F*>
Capital................... Jerry B. Davis 500 <F*>
Capital................... Louis Fernandez 7,000 <F*>
Capital................... Wayne J. Grace 1,000<F1> <F1>
Capital................... Paul H. Hatfield 14,500<F2> <F*>
Capital................... William E. Maritz 7,000 <F*>
Capital................... William E. Nasser 18,857<F3><F4><F5> <F*>
Capital................... Richard L. O'Shields 2,500 <F*>
Capital................... Fairfax F. Pollnow 1,000<F1> <F1>
Capital................... Thomas P. Reidy 7,000 <F*>
Capital................... Brian M. Rushton 200 <F*>
Capital................... Joseph T. Williams 1,000 <F*>
<CAPTION>
NAMED EXECUTIVE OFFICERS
TITLE NAME OF AMOUNT AND NATURE OF PERCENT
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------- ---------------- -------------------- --------
<S> <C> <C> <C>
Capital................... John M. Casper 5,437<F3> <F*>
Capital................... Toby R. Graves 4,829<F3> <F*>
Capital................... Richard J. Seidel 4,869<F3><F5> <F*>
Capital................... James M. Zemenick 11,221<F3><F4> <F*>
Capital................... All Directors and Officers 119,126<F6> 1%
as a Group (21 persons)
<FN>
- --------
<F*> Less than 1%
Note <F1>: See Note (1) under the heading Security Ownership of Certain
Beneficial Owners in this Proxy Statement.
Note <F2>: Mr. Hatfield was elected Chairman of the Board, President and Chief
Executive Officer of the Company on November 20, 1995.
Note <F3>: The number shown includes shares which are deemed to be outstanding
pursuant to stock options that are presently exercisable, as follows:
Mr. Nasser, 5,000; Dr. Graves, 1,000; Mr. Zemenick, 6,000. The number
shown includes shares of capital stock held in trust through the
Company Employees' Savings Plan, as follows: Mr. Nasser, 7,186; Mr.
Casper, 387; Dr. Graves, 2,578; Mr. Seidel, 3,886; Mr. Zemenick,
3,053. (Savings Plan information presented as of September 30, 1995.)
Note <F4>: Mr. Nasser disclaims beneficial ownership of 50 of the shares shown.
Mr. Zemenick disclaims beneficial ownership of 298 of the shares
shown.
Note <F5>: Mr. Nasser retired as Chairman of the Board, President and Chief
Executive Officer of the Company on November 20, 1995. Mr. Seidel
resigned as a Vice President, General Manager of the Company
effective November 30, 1995.
Note <F6>: The number shown includes 50,200 shares which are deemed to be
outstanding pursuant to stock options that are presently exercisable,
and 26,600 shares held through the Company Employees' Savings Plan.
(Savings Plan information presented as of September 30, 1995.)
</TABLE>
5
<PAGE> 8
ELECTION OF DIRECTORS
Eleven 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 any of these nominees should be unable to serve as
a Director for unforseen reasons, it is intended that Proxies not limited to the
contrary will be voted in favor of the election as Director of such other person
as the Proxy holder may determine.
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.
<TABLE>
<CAPTION>
SERVED
AS
CURRENT POSITIONS AND DIRECTOR
NAME NOTES AGE OFFICES WITH THE COMPANY SINCE
---- ----- --- ------------------------ --------
<S> <C> <C> <C> <C>
Andrew B. Craig, III...................... <F1><F3> 64 Director 1989
Jerry B. Davis............................ 64 -- --
Louis Fernandez........................... <F2><F4> 71 Director 1983
Wayne J. Grace............................ <F2><F5> 55 Director 1995
Paul H. Hatfield.......................... <F1> 59 Chairman of the Board, 1994
President and Chief
Executive Officer
William E. Maritz......................... <F3><F4> 67 Director 1986
Richard L. O'Shields...................... <F1><F2><F4> 70 Director 1994
Fairfax F. Pollnow........................ <F4><F5> 44 Director 1995
Thomas P. Reidy........................... <F3> 67 Director 1985
Brian M. Rushton.......................... 62 -- --
Joseph T. Williams........................ <F2> 58 Director 1995
<FN>
- --------
Note <F1>: Member, Executive Committee of Board of Directors.
Note <F2>: Member, Audit Committee of Board of Directors.
Note <F3>: Member, Compensation Committee of Board of Directors.
Note <F4>: Member, Nominating Committee of Board of Directors.
Note <F5>: Mr. Grace and Mr. Pollnow originally were proposed for nomination as
Directors of the Company by the Board of Directors of Wm. S.
Barnickel & Company (``Barnickel Company''), which owns 47.1% of the
Company's outstanding capital stock. Additional information about
Barnickel Company is presented in this Proxy Statement under the
headings Security Ownership of Certain Beneficial Owners and Certain
Transactions.
</TABLE>
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND
DIRECTORSHIPS OF NOMINEES FOR ELECTION AS DIRECTORS
ANDREW B. CRAIG, III: Mr. Craig, a Director of the Company since 1989, is
Chairman and Chief Executive Officer of Boatmen's Bancshares, Inc. He also is a
Director of Anheuser-Busch Companies, Inc., Laclede Gas Company, and a Trustee
of Washington University in St. Louis.
JERRY B. DAVIS: Mr. Davis is the retired President and Chief Executive
Officer of Otis Engineering Corporation, a subsidiary of The Halliburton
Company. Before his election as President and Chief Executive Officer he held
several positions at Otis in international and domestic operations and
manufacturing.
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
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<PAGE> 9
Monsanto Company. He also is a Director of Boehringer Ingelheim Corporation,
A. G. Edwards and Sons, Inc., and Alteon, Inc.
WAYNE J. GRACE: Mr. Grace, a Director of the Company since 1995, is Managing
Partner of Grace & Company, P.C., a public accounting firm he founded. He has
more than 25 years of business experience in public accounting and in the
private sector.
PAUL H. HATFIELD: Mr. Hatfield, a Director of the Company since 1994, was
elected Chairman, President and Chief Executive Officer of the Company in
November, 1995. He previously served as President and Chief Executive Officer of
Protein Technologies International, a Ralston Purina Company based in St. Louis,
Missouri. He also is a Director of DEKALB Genetics Corporation and Penwest, Ltd.
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., Maritz, Inc., and a Trustee of Washington University in St.
Louis.
RICHARD L. O'SHIELDS: Mr. O'Shields, a Director of the Company since 1994,
is the retired 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 Chairman of the Board of Daniel Industries, Inc.
FAIRFAX F. POLLNOW: Mr. Pollnow, a Director of the Company since 1995, is
engaged in private investments and is President of Arbor Land Company, a real
estate development and investment firm. He also is a Director and Officer of Wm.
S. Barnickel & Company and a Director of The Churchill School.
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.
BRIAN M. RUSHTON: Dr. Rushton is Immediate Past President of the American
Chemical Society. He previously served as Senior Vice President, Research and
Development, for Air Products and Chemicals, Inc., and as President of Celanese
Research Company and Vice President of Technology for Celanese Corporation (now
Hoechst Celanese). He also is a Director of Mallinckrodt Group Inc.
JOSEPH T. WILLIAMS: Mr. Williams, a Director of the Company since November,
1995, is Vice Chairman and Chief Executive Officer of Enserch Exploration, Inc.,
a NYSE-listed company. He previously served as President and Chief Executive
Officer of DALEN Resources, a subsidiary of Pacific Gas and Electric Company. He
also is a Director of Enserch Exploration, Inc.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held 11 meetings during fiscal year 1995. The Board
has established the following standing committees: Executive Committee, Audit
Committee, Compensation Committee and Nominating Committee. All Directors
attended at least 70% or more of the aggregate of the meetings of the Board of
Directors and of the committees of the Board of Directors on which they served
and all Directors, except Mr. Maritz, attended at least 75% or more of the
aggregate of these meetings.
The Executive Committee did not meet in fiscal year 1995. 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 met three times in fiscal year 1995. Among other things,
the Committee reviews the scope and procedures of the audit activities of both
the independent accountants and the Company's internal auditors, and
subsequently, 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
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<PAGE> 10
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 met four times in fiscal year 1995. The
Committee, which is composed solely of outside Directors, reviews the competency
and effectiveness of the management of the Company and its subsidiaries, 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's subsidiaries, 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 and administer the Company's stock incentive
plans.
The Nominating Committee met twice in fiscal year 1995. The Committee
recommends individuals for election to the Board. The Committee will consider
stockholder recommendations of persons to be considered for nomination for the
1997 Annual Meeting of Stockholders.
CERTAIN TRANSACTIONS
(a) On December 9, 1994, the Company announced that it had signed a letter
of intent (the ``Letter of Intent'') pursuant to which the Company would acquire
substantially all of the assets of Wm. S. Barnickel & Company (``Barnickel
Company'') in a tax-free reorganization between the two companies (the
``Transaction'').
The Transaction was subject to a number of conditions, including the receipt
of certain favorable rulings from the Internal Revenue Service regarding the tax
treatment of the Transaction. As reported previously, on January 26, 1995, the
Company and Barnickel Company were advised that Revenue Procedure 94-76,
pursuant to which the Internal Revenue Service suspended consideration of
certain advance ruling requests pending completion of a designated study,
applied to the Transaction. As reported previously, both parties determined that
it was unlikely that the Transaction would be completed on the terms originally
agreed upon. The parties are reviewing alternatives to the Transaction in light
of the application of the Revenue Procedure. No agreement with respect to the
terms of any such alternative transaction has been reached.
The following is a summary of the Letter of Intent, which is described in
more detail in a current report on Form 8-K filed with the Securities and
Exchange Commission on December 13, 1994.
In exchange for substantially all of the assets of Barnickel Company, which
consist primarily of 5,337,360 shares of the Company's capital stock, the
Company would issue to Barnickel Company an equal number of new shares of its
capital stock. The Company also would issue a small number of additional shares
of its capital stock, not likely to exceed 200,000 shares, to acquire all or
some of certain oil and gas properties owned by Barnickel Company, and would
assume certain liabilities of Barnickel Company for certain fees and expenses
associated with the proposed Transaction, and certain pre-reorganization taxes,
in the aggregate amount of $9.0 million.
The contemplated Transaction would include:
Dissolution of Barnickel Company and distribution of the Company's capital
stock to the trusts that own the shares of Barnickel Company stock,
including The William S. Barnickel Testamentary Trust (the ``Barnickel
Trust'') and, thereafter, to the beneficiaries of the Barnickel Trust;
A Stockholder Agreement containing specified limitations on the purchase and
sale of shares of the Company's capital stock, and associated standstill
provisions and voting rights limitations, by the principal beneficiaries of
the Barnickel Trust. The time period for the limitations on the purchase and
sale of the Company's capital stock would be January 1, 1997, and the time
period for the limitations on voting rights and standstill provisions would
extend through the Company's 1997 Annual Meeting of Stockholders;
A Registration Rights Agreement providing specified registration rights to
certain recipients of shares of the Company's capital stock;
8
<PAGE> 11
Two new seats on the Company's Board of Directors to be filled by persons
proposed initially by Barnickel Company and thereafter by certain
stockholders of the Company, including the principal beneficiaries of the
Barnickel Trust, subject to certain restrictions related to their continued
ownership of specified amounts of the Company's capital stock.
If the Transaction as summarized herein had been consummated, the Company
expected to take a charge against earnings of approximately $10.5 million, or
$0.93 per share, reflecting the designated liabilities of Barnickel Company
assumed by the Company and other expenses of the Company associated with the
Transaction.
(b) During fiscal year 1995, 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.
(c) The Company and Mr. Hatfield entered into a Management Agreement and a
Stock Option Agreement effective August 11, 1995, pursuant to which Mr. Hatfield
agreed to provide certain management services to the Company with regard to the
Company's Chemicals Group. Both agreements were terminated effective November
20, 1995, upon Mr. Hatfield's election as Chairman, President and Chief
Executive Officer of the Company. Under the Management Agreement, Mr. Hatfield
was to be paid $125,000 in 12 monthly installments; under the Stock Option
Agreement, Mr. Hatfield was granted an option to purchase 36,000 shares of the
Company's capital stock at a price of $21.03 per share. The option, which was to
become exercisable in 12 monthly installments beginning September 29, 1995,
became exercisable with respect to 6,000 shares before the Stock Option
Agreement was terminated.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors (the ``Committee'')
reviews the effectiveness of the Company's management and the adequacy of the
Company's compensation and benefit programs. The Committee has been designated
by the Board to administer 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 and variable incentive compensation, all subject
to Board approval.
COMPENSATION PHILOSOPHY
The Company's base and variable incentive compensation programs are designed
to reward individual and team performance. The Company's philosophy of total
compensation combines a competitive base salary with variable incentive plans
linked to defined performance goals for each executive's area of responsibility.
Retroactive appraisal of achievement permits the individual's total compensation
to be based upon specified performance which relates to shareholder value. The
total compensation of the Company's executive officers, including variable
incentive compensation payments when Company performance warrants them, is
targeted to fall between the 60th and 90th percentile of ranges identified by
independent industry surveys.
Base salaries reflect an internal evaluation of the functions and
responsibilities for each position and a review of market rates published in
industry surveys. Increases to base salaries reflect both relative position
against market rates and annual performance appraisals, and are intended to
recognize individual performance that contributes to Company growth.
1995 BASE SALARY
In reviewing base salaries, the Committee relies on independent industry
surveys to assess the Company's salary competitiveness. The base salaries of the
Company's executive officers are targeted at the 60th percentile of the market
as identified by these independent industry surveys, subject to individual
9
<PAGE> 12
performance. 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 stockholders 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.
ANNUAL INCENTIVE PLAN
Participants in this Plan were selected by the Committee from officers and
key employees of the Company and its affiliates, including the Company's
executive officers. Annual incentive compensation payments for the fiscal year
were based on target amounts, which ranged from 8% to 70% of a participant's
base salary, selected by the Committee when an individual was designated to
participate in the Plan. A participant's actual annual incentive compensation
payment was based on pretax earnings, return on assets and the participant's
achievement of specific goals defined at the beginning of the fiscal year.
For fiscal year 1995, the Company's Annual Incentive Plan placed strong
emphasis on increases to earnings and a continued focus on improvements in the
management of the Company's asset base. The performance of each of the Company's
divisions was measured against targeted pretax earnings thresholds and a base
return of assets goal for the year.
For fiscal year 1995, key division management employees and executives in
two of the Company's six operating divisions received an incentive compensation
payment based on the pretax earnings and return on assets achieved by the
participant's division. No incentive payments were made to any employee in the
four divisions that fell short of their respective base levels. The consolidated
results for the Company also fell short of the base level and no incentive
awards were made to any corporate executive or key corporate manager.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Committee reviewed the base salary of William E. Nasser, Chairman,
President and Chief Executive Officer, when salaries of the Company's executive
officers and key managers were reviewed during January, 1995. After assessing
the total compensation of chief executive officers within companies of similar
size and profitability, both inside and outside the industry, the Committee
recommended that Mr. Nasser's base salary be increased 5%.
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 and Exchange Act, except to the
extent the Company specifically incorporates this report by reference, and
otherwise shall not be deemed filed under such Acts.
COMPENSATION COMMITTEE
Paul F. Cornelsen, Chairman
Andrew B. Craig, III
William E. Maritz
Thomas P. Reidy
10
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table shows information concerning the compensation for
services to the Company in all capacities for the fiscal years ended October 31,
1995, October 31, 1994, and October 31, 1993, of those persons who were,
respectively at October 31, 1995, (i) the Company's Chief Executive Officer and
(ii) the four other most highly compensated Executive Officers of the Company
(collectively the ``Named Executive Officers'').
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------------------------------
LONG-TERM
OTHER INCENTIVE STOCK ALL OTHER
ANNUAL PLAN OPTIONS COMPEN-
BONUS COMPEN- PAYMENTS GRANTED SATION
NAME AND PRINCIPAL POSITION YEAR SALARY <F2> SATION <F3> <F4> # <F5>
--------------------------- ---- ------ ----- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
William E. Nasser 1995 $370,300 -- -- -- -- $2,500
Chairman of the Board, President 1994 $347,750 -- -- $51,525 -- $2,500
and Chief Executive Officer 1993 $330,000 $193,463 -- -- 220,000 $2,800
John M. Casper 1995 $196,000 -- -- -- -- $2,500
Vice President and 1994 $139,444<F1> -- -- -- 75,000 $2,375
Chief Financial Officer 1993 -- -- -- -- -- --
Toby R. Graves 1995 $173,250 $ 85,502 -- -- -- $2,500
Vice President, General Manager, 1994 $166,000 $ 84,000 -- $24,699 -- $2,500
Polymers Division 1993 $156,000 $ 43,872 -- -- 60,000 $1,300
Richard J. Seidel 1995 $159,500 $ 56,184 -- -- -- $2,500
Vice President, General Manager, 1994 $153,500 $ 54,250 -- $22,800 -- $2,500
Petreco Division 1993 $147,499 $ 56,000 -- -- 24,000 $2,800
James M. Zemenick 1995 $155,500 -- -- -- -- $2,500
Vice President, Corporate 1994 $149,500 -- -- -- -- $2,500
Administration and Development 1993 $143,750 $ 41,870 -- -- 15,000 $2,800
<FN>
- ---------
<F1> Partial year.
<F2> Reflects the incentive compensation paid under the Annual Incentive Plan
for the fiscal years noted. See the Compensation Committee Report to
Stockholders beginning on Page 9 for a description of this Plan.
<F3> Reflects the value of awards made pursuant to the Company's Long-Term
Incentive Plan for a performance period beginning November 1, 1990, and
ending October 31, 1994.
<F4> The options were granted pursuant to the Petrolite 1993 Stock Incentive
Plan.
<F5> 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 Savings Plan. Due to a change in
the Savings Plan during fiscal year 1993, the actual cash value of the
Company's contribution for fiscal year 1993 only may exceed the plan year
maximum.
</TABLE>
11
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table shows information with respect to the Named Executive
Officers concerning unexercised options held as of the fiscal year ended October
31, 1995. No Named Executive Officer exercised a stock option during fiscal year
1995.
<TABLE>
OPTION VALUES AT END OF FISCAL YEAR 1995
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT OCTOBER 31, 1995 AT OCTOBER 31, 1995<F1>
-------------------------------- -------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE<F2>
---- ----------- ------------- ----------- -----------------
<S> <C> <C> <C> <C>
William E. Nasser............... 5,000 220,000 -- --
John M. Casper.................. -0- 75,000 -- --
Toby R. Graves.................. 1,000 60,000 -- --
Richard J. Seidel............... 6,000 24,000 $1,000 --
James M. Zemenick............... 6,000 15,000 $1,000 --
<FN>
- --------
<F1> Calculated on the basis of the fair market value of the underlying
securities as of October 31, 1995 ($23.50 per share) minus the exercise
price.
<F2> The options will become exercisable in annual installments based on annual
compounded increases in the value of the Company's capital stock, which
consists of the market price plus dividends paid. The options become fully
exercisable for one day five years after the grant date. If a change in
control of the Company occurs, as defined in the option plans, all options
become exercisable for one year, regardless of whether applicable
performance targets have been met.
</TABLE>
EXECUTIVE AGREEMENTS
The Company has entered into Executive Agreements with several executive
officers, including the Named Executive Officers. The agreements, which include
confidentiality and non-competition provisions, provide severance compensation
to each covered executive in the event of the executive's involuntary
termination from employment. This severance compensation would be in the form of
a continuation of the executive's base salary for one year. No severance
compensation payment would be made if the executive's termination from
employment is due to death, disability or normal retirement or is for cause, as
defined in the agreement. The agreements also provide severance compensation in
the event of the executive's termination in connection with a change in control
of the Company. This compensation would be in the form of a lump sum payment
equal to two times the executive's annual base salary and target incentive
payment, and continuation of certain other executive benefits for a period
specified in the agreement.
Mr. Nasser retired as Chairman of the Board, President and Chief Executive
Officer of the Company on November 20, 1995. He and the Company have entered
into an agreement under which Mr. Nasser will provide consulting services to the
Company through March 31, 1997. That agreement, which terminated the Executive
Agreement between Mr. Nasser and the Company, includes: a monthly retirement
benefit beginning April 1, 1996, equal to the benefit to which Mr. Nasser would
be entitled at his normal retirement date under the Company's Retirement Plan
assuming an additional five years of service; continuation of certain other
executive benefits for a specified period; surrender of stock options granted
under the Petrolite 1993 Stock Incentive Plan; and a consulting payment of
$370,000, payable in monthly installments through March 31, 1997.
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
12
<PAGE> 15
salary and certain amounts paid under the Company's incentive plans. Estimated
annual benefits payable upon retirement (assuming normal retirement date) to
persons participating in the Plan are shown 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............ $13,250 $ 26,500 $ 39,750 $ 51,875
$150,000............ $21,000 $ 42,000 $ 63,000 $ 81,750
$200,000............ $28,750 $ 57,500 $ 86,250 $111,625
$250,000............ $36,500 $ 73,000 $109,500 $141,500
$300,000............ $44,250 $ 88,500 $132,750 $171,375
$350,000............ $52,000 $104,000 $156,000 $201,250
$400,000............ $59,750 $119,500 $179,250 $231,125
$450,000............ $67,500 $135,000 $202,500 $261,000
$500,000............ $75,250 $150,500 $225,750 $290,875
</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 Named Executive Officers is shown in the Summary Compensation Table under
the headings ``Salary'', ``Bonus'' and ``Long-Term Incentive Plan Payments''.
Years of credited service to October 31, 1995, for the Named Executive Officers
are: Mr. Nasser, 32; Mr. Casper, 1; Dr. Graves, 23; Mr. Seidel, 9; Mr. Zemenick,
18.
The Internal Revenue Code limits the amount of annual benefits which may be
payable from the pension trusts; the limit currently is $120,000 per year,
subject to annual cost of living adjustments. The Internal Revenue Code also
limits the compensation that may be considered in calculating benefits payable
from the pension trusts. The Board of Directors has authorized supplemental
benefits for certain highly compensated employees to whom these limits apply, or
will apply in the future, so that these employees will obtain the benefit of the
Retirement Plan formula that would have applied in the absence of the
limitations. These benefits are reflected in the foregoing table. As of October
31, 1995, Mr. Nasser was entitled to receive supplemental benefits.
13
<PAGE> 16
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total return on the Company's capital
stock, the S&P 500 Index and the Specialty Chemical Value Line Index. The graph
assumes $100 was invested on October 31, 1990, in Petrolite Corporation capital
stock, the S&P 500 Index and the Specialty Chemical Value Line Index.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN<F*>
PETROLITE CORPORATION CAPITAL STOCK, THE S&P 500, AND
THE SPECIALTY CHEMICAL VALUE LINE INDEX
<F*>CUMULATIVE TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
(PERFORMANCE RESULTS THROUGH 10/31/95)
[STOCK PRICE PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NAME 1990 1991 1992 1993 1994 1995
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PETROLITE CORP. 100.00 111.57 136.15 216.85 170.27 140.20
Standard & Poors 500 100.00 133.51 147.00 168.96 176.07 234.15
Chemicals: Special. 100.00 151.63 183.97 212.28 219.78 245.65
</TABLE>
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 a subsequent annual meeting of the Company receives an
option to purchase an additional 2,000 shares at the time of each such
re-election. The exercise price for each option is the fair market value of a
share of the Company's capital stock on the date of such annual meeting. No
options may be granted under the Plan after October 31, 1998. 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,
1995, are Price Waterhouse LLP, who were selected by the Board of Directors upon
the recommendation of the Board's Audit Committee. A representative of Price
Waterhouse LLP will be in attendance at the Company's Annual Meeting on March 4,
1996. The representative will be available to respond to appropriate questions
of the stockholders and to make such statements as the representative may wish
to make.
14
<PAGE> 17
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Secretary of the Company at its
executive offices no later than October 17, 1996, 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 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 10% beneficial owners have
been complied with, except that Mr. Casper filed three late reports reporting
his purchase of 50 shares through three transactions occurring in a private
dividend reinvestment plan.
ANNUAL REPORT. A copy of the Company's Annual Report for the fiscal year
ended October 31, 1995, including financial statements certified by the
Company's independent accountants, is being mailed with this Proxy Statement.
Additional copies of this Report are available on request to the Company.
PETROLITE CORPORATION
15
<PAGE> 18
January 23, 1996
Dear Petrolite Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Petrolite Corporation, a Delaware corporation, which will be held at 11:00
o'clock a.m., Central Standard Time, on Monday, March 4, 1996, 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 eleven 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 5, 1996, are
entitled to notice of, and to vote at, the meeting or any adjournment or
adjournments thereof.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, SIGN AND
RETURN THE ATTACHED 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.
Yours very truly,
Paul H. Hatfield
Chairman, President and
Chief Executive Officer
(Detach Proxy Form Here)
- --------------------------------------------------------------------------------
PROXY PETROLITE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING, MARCH 4, 1996,
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 Paul H. Hatfield, 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 4, 1996 and at any adjournments thereof on all matters properly coming
before the meeting.
Dated ______________________, 1996.
-----------------------------------
-----------------------------------
(THIS PROXY MUST BE SIGNED EXACTLY
AS THE STOCKHOLDER'S NAME APPEARS
HEREON. IF ACTING AS ATTORNEY,
EXECUTOR, OR TRUSTEE, OR IN A
CORPORATE OR REPRESENTATIVE
CAPACITY, PLEASE SIGN NAME AND
TITLE.)
<PAGE> 19
(Detach Proxy Form Here)
- -------------------------------------------------------------------------------
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: Andrew B. Craig, III, Jerry B. Davis, Louis Fernandez, Wayne J.
Grace, Paul H. Hatfield, William E. Maritz, Richard L. O'Shields,
Fairfax F. Pollnow, Thomas P. Reidy, Brian M. Rushton, Joseph T.
Williams
(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.
<PAGE> 20
APPENDIX
The information contained in the Stock Price Performance Graph on page
14 of the printed proxy statement, has been restated in a format that can
be processed by EDGAR.
