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
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
PROLER INTERNATIONAL CORP.
(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) or Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
____________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
(5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
____________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
____________________________________________________________________
(3) Filing party:
____________________________________________________________________
(4) Date filed:
____________________________________________________________________
<PAGE>
PROLER INTERNATIONAL CORP.
P. O. BOX 286
HOUSTON, TEXAS 77001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 1995
To the Stockholders:
The 1995 Annual Meeting of Stockholders of Proler International Corp. (the
"Company") will be held in the Board Room on the mezzanine level of the Texas
Commerce Bank Building, 707 Travis Street, Houston, Texas on June 20, 1995 at
9:00 a.m. local time for the purposes of:
(1) electing two directors of the Company; and
(2) transacting such other business as may properly be brought before
the meeting.
Owners of record of the Company's Common Stock at the close of business on
May 15, 1995 will be entitled to vote at the meeting.
If you cannot attend the meeting in person, you are urged to sign the
enclosed proxy and return it in the enclosed envelope as soon as possible in
order that your shares will be represented at the meeting.
By order of the Board of Directors,
/s/ HERMAN PROLER
Herman Proler
CHAIRMAN OF THE BOARD
May 18, 1995
Houston, Texas
<PAGE>
PROLER INTERNATIONAL CORP.
P. O. BOX 286
HOUSTON, TEXAS 77001
-------------------
PROXY STATEMENT
-----------------
This statement is furnished in connection with the solicitation by Proler
International Corp., a Delaware corporation (the "Company"), of proxies to be
voted at the Annual Meeting of Stockholders of the Company, to be held on June
20, 1995, and at any adjournment thereof (the "Annual Meeting"). Each valid
proxy that is received in time for voting and is not revoked will be voted at
the Annual Meeting in accordance with the specifications thereon. If no contrary
specification is made, all shares represented by an executed proxy will be voted
for the nominees for the Board of Directors named therein. Any stockholder who
has submitted a proxy may revoke it at any time before it is exercised by giving
notice in writing to the Secretary of the Company. The proxy will automatically
be revoked if the stockholder votes in person at the Annual Meeting or provides
a later dated proxy. It is anticipated that this proxy statement will first be
sent or given to stockholders of the Company on or about May 18, 1995.
On May 15, 1995, there were 4,714,158 shares of common stock, $1.00 par
value per share, of the Company (the "Common Stock") outstanding. Holders of
record of the Common Stock on May 15, 1995 will be entitled to one vote per
share on all matters to come before the Annual Meeting. During the ten days
prior to the Annual Meeting, a list of the stockholders entitled to vote at the
Annual Meeting will be available at the principal offices of the Company during
ordinary business hours for examination by any stockholder for any purpose
germane to the Annual Meeting. The holders of 50% of the shares of Common Stock
entitled to vote and represented in person or by proxy will constitute a quorum
for the transaction of business at the Annual Meeting. Directors will be elected
by a plurality of the votes cast at the Annual Meeting. Abstentions and broker
non-votes will be included in determining whether a quorum is represented at the
Annual Meeting. Abstentions from voting on any matter will be included in the
voting tally, but will not have an effect on the election of directors other
than to reduce the total number of votes cast for the various candidates. Broker
non-votes are not considered "shares present" with respect to matters decided by
a plurality or a majority of shares represented at the meeting, and as a result,
broker non-votes will not affect the outcome with respect to the election of
directors.
All costs incurred in the solicitation of proxies will be borne by the
Company. In addition to solicitation by mail, the officers, employees or
stockholders of the Company may solicit proxies personally and by telephone and
telegraph without additional compensation. The Company may also request banks
and brokers who hold shares of stock in their names or custody or in the names
of nominees for others, to forward copies of the proxy material to those persons
for whom they hold such shares and to request authority for the execution of
proxies. The Company will reimburse such banks and brokers for their
out-of-pocket expenses incurred in connection therewith.
1
<PAGE>
The following table sets forth, as of May 15, 1995, the beneficial ownership
in the Company of each stockholder known to the Company who owned more than five
percent of the Common Stock of the Company, and of each director, each executive
officer named in the Summary Compensation Table and all officers and directors
of the Company as a group.
AMOUNT AND
NATURE OF PERCENTAGE OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) SHARES
- ------------------------------------ ------------ -------------
Billie Fay Proler .......................... 267,409(2) 5.67%
2929 Buffalo Speedway
Houston, Texas 77098
David S. Lurie ............................. 266,779(3) 5.66%
5847 San Felipe, Suite 600
Houston, Texas 77057
Herman Proler .............................. 447,872(4) 9.40%
4265 San Felipe, Suite 900
Houston, Texas 77027
Steven F. Gilliland ........................ 36,666(5) *
4265 San Felipe, Suite 900
Houston, Texas 77027
Richard B. Mayor ........................... 4,500(6) *
700 Louisiana, Suite 1900
Houston, Texas 77002
John J. McKenna ............................ 5,000(7) *
600 Travis, Suite 2500
Houston, Texas 77002
Harvey Alter ............................... 2,700(8) *
1615 H Street Northwest
Washington, D.C. 20062
Dennis Caputo .............................. 16,232(9) *
4265 San Felipe, Suite 900
Houston, Texas 77027
Michael Loy ................................ 25,820(10) *
4265 San Felipe, Suite 900
Houston, Texas 77027
Ian Linton ................................. 6,279(11) *
4265 San Felipe, Suite 900
Houston, Texas 77027
David Juengel .............................. 6,036(12) *
4265 San Felipe, Suite 900
Houston, Texas 77027
Pioneering Management Corporation .......... 468,000(13) 9.93%
60 State Street
Boston, Massachusetts 02114
Tweedy, Browne Company L.P. ................ 389,795(14) 8.27%
52 Vanderbilt Avenue
New York, New York 10017
All officers and directors as a group
(10 persons) ............................... 557,884(15) 11.56%
- ---------
* Less than one percent.
(1) The persons listed above have the sole power to vote and to dispose of
the shares beneficially owned by them except as otherwise indicated.
(2) Of the shares shown above as beneficially owned by Mrs. Billie Fay
Proler, 630 shares are held of record by Mrs. Proler, 94,420 shares are
held by Mrs. Proler and David S. Lurie as trustees
2
for the benefit of Mrs. Proler, and 172,359 shares are held by Mrs.
Proler and Mr. Lurie as trustees of the Trust under the Will of Israel
Proler, Deceased (the "Trust"). Mrs. Proler and Mr. Lurie share the
power to vote and dispose of shares held in trust for the benefit of
Mrs. Proler and as trustees of the Trust.
(3) As described in note 2 above, the shares held by Mr. Lurie are held in
his capacity as a trustee for the benefit of Mrs. Proler and as a
trustee of the Trust.
(4) Includes 395,919 shares held of record by Mr. Proler, 3,020 shares
allocated to Mr. Proler pursuant to the Company's 401(k) Plan as to
which Mr. Proler does not have voting power, and 48,933 shares subject
to currently exercisable options. Excluded are 300 shares held by the
wife of Herman Proler, the beneficial ownership of which he disclaims.
(5) Includes 15,000 shares held of record by Mr. Gilliland and 21,666
shares subject to currently exercisable options.
(6) Includes 2,500 shares held of record by Mr. Mayor and 2,000 shares
subject to currently exercisable options.
(7) Includes 3,000 shares held of record by Mr. McKenna and 2,000 shares
subject to currently exercisable options.
(8) Includes 700 shares held of record by Dr. Alter and 2,000 shares
subject to currently exercisable options.
(9) Includes 3,656 shares held of record by Mr. Caputo, 1,201 shares
allocated to Mr. Caputo pursuant to the Company's 401(k) Plan, as to
which Mr. Caputo does not have voting power, and 11,375 shares subject
to currently exercisable options. Does not include 1,311 shares of
restricted stock awarded to Mr. Caputo pursuant to the Company's 1993
Incentive Compensation Plan and subject to vesting as described below.
(10) Includes 15,820 shares held of record by Mr. Loy and 10,000 shares
subject to currently exercisable options. Does not include 1,639 shares
of restricted stock awarded to Mr. Loy pursuant to the Company's 1993
Incentive Compensation Plan and subject to vesting as described below.
(11) Includes 956 shares held of record by Mr. Linton, 323 shares allocated
to Mr. Linton pursuant to the Company's 401(k) Plan, as to which Mr.
Linton does not have voting power, and 5,000 shares subject to
currently exercisable options. Does not include 1,311 shares of
restricted stock awarded to Mr. Linton pursuant to the Company's 1993
Incentive Compensation Plan and subject to vesting as described below.
(12) Includes 479 shares held of record by Mr. Juengel, 807 shares allocated
to Mr. Juengel pursuant to the Company's 401(k) Plan, as to which Mr.
Juengel does not have voting power, and 4,750 shares subject to
currently exercisable options. Does not include 557 shares of
restricted stock awarded to Mr. Juengel pursuant to the Company's 1993
Incentive Compensation Plan and subject to vesting as described below.
(13) This information is derived from a Schedule 13G dated January 25, 1995
filed by Pioneering Management Corporation ("Pioneering"). Pioneering
has sole voting power and shared dispositive power with respect to
these shares.
(14) This information is derived from a joint Amendment Number 2 to a
Schedule 13D filed by Tweedy, Browne Company L.P. ("TBC") and Amendment
No. 1 to a Schedule 13D filed by Vanderbilt Partners, L.P.
("Vanderbilt") dated March 10, 1995. The general partners of TBC are
Christopher H. Browne, William H. Browne, James M. Clark, Jr. and John
D. Spears, who are also general partners in Vanderbilt. Of the 389,795
shares shown, 384,795 shares (the "TBC Shares") are held in the
accounts of various customers of TBC as to which TBC has shared
dispositive power. TBC has sole power to vote 348,345 of the TBC Shares
and no power to vote 36,450 of the TBC Shares. 5,000 shares are held by
Vanderbilt, which has sole voting and dispositive power with respect to
such shares. Each of TBC and Vanderbilt disclaim beneficial ownership
of shares held by the other and of shares held in TBC's customer
accounts.
(15) Includes 110,677 shares subject to immediately exercisable options, and
8,849 shares allocated to officers under the Company's 401(k) Plan,
including those shares discussed in notes 4 through 12 above. Does not
include a total of 5,474 shares of restricted stock awarded to officers
under the Company's 1993 Incentive Compensation Plan and subject to
vesting, including those discussed in notes 9 through 12 above.
3
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of five directors
who hold office for staggered three-year terms and until their successors are
elected and have qualified or until their earlier death, resignation or
removal. In February, 1995, the Board of Directors elected Mr. Steven F.
Gilliland as President and Chief Operating Officer of the Company and
appointed him to fill a vacancy on the Board of Directors expiring in 1995.
The term of Richard B. Mayor also expires in 1995. The stockholders will elect
two directors to fill these positions at the Annual Meeting.
Mr. Gilliland and Mr. Mayor have been nominated for election at the Annual
Meeting, and shares represented by each properly signed and submitted proxy
(unless otherwise indicated on such proxy) will be voted for their election.
Management has been advised that Mr. Gilliland and Mr. Mayor will serve if
elected. If elected, their terms will expire in 1998. If, however, either Mr.
Gilliland or Mr. Mayor is unable to serve, proxies will be voted for another
nominee selected by management.
The following table provides information with respect to the nominees and
all current directors whose terms do not expire in 1995.
<TABLE>
<CAPTION>
DIRECTOR OF
COMPANY POSITION AND OFFICES
TERM OR PRESENTLY HELD WITH
WILL PREDECESSOR COMPANY (AND PRESENT PRINCIPAL
NAME AGE EXPIRE SINCE OCCUPATION IF DIFFERENT)
---- --- ------ ----------- ----------------------------------------
<S> <C> <C> <C> <C>
Nominee:
Steven F. Gilliland(1)............. 43 1995 1995 Director; President; Chief Operating
Officer
Richard B. Mayor(2)................ 61 1995 1985 Director (Partner, Mayor, Day, Caldwell
& Keeton, L.L.P.)
Directors whose terms do not expire:
Herman Proler...................... 67 1996 1948 Director; Chairman of the Board; Chief
Executive Officer
Harvey Alter(3).................... 62 1996 1993 Director (Association Manager, Resources
Policy Department of the U.S. Chamber of
Commerce)
John J. McKenna(4)................. 46 1997 1992 Director (Chairman and Chief Executive
Officer of McKenna & Company)
</TABLE>
- ---------
(1) Steven F. Gilliland joined the Company in February, 1995 as President
and Chief Operating Officer. Mr. Gilliland was employed by CRSS Inc. and
its predecessors in various executive positions from 1980 to 1990 and
again from 1992 to 1995 when he served as Senior Vice President. From
1990 to 1992, he served as Senior Vice President and Chief Operating
Officer of Transco Power Company.
(2) Richard B. Mayor has been a partner in the Houston law firm of Mayor,
Day, Caldwell & Keeton, L.L.P. since its formation in 1982. Mayor, Day,
Caldwell & Keeton, L.L.P. is retained by the Company.
(3) Dr. Alter has been Association Manager, Resources Policy Department of
the U.S. Chamber of Commerce since 1979. He is an Adjunct Professor,
University of Maryland University College Graduate School of Management
and Technology. Dr. Alter is director of the National Institute for
Urban Wildlife and of wTe Corporation. He also serves on the Executive
Advisory Board of the Energy Source Education Council and is a member of
the Solid Waste Committee of Keep America Beautiful. Dr. Alter has
served on the State of Maryland's Task Force on Solid Waste and in 1989
was appointed Chairman of the Governor's Advisory Council on Recycling.
He has been a member of two federal advisory committees on aspects of
solid waste regulation.
(4) John J. McKenna has been Chairman and Chief Executive Officer of McKenna
& Company, a Houston-based investment banking firm, since its formation
in October 1989. From June 1986 to September 1989, Mr. McKenna was
managing director and head of the Houston investment banking office of
Lehman Brothers. McKenna & Company has been retained by the Company.
4
Each director has been principally employed as indicated above for more
than five years except as otherwise noted.
The Board of Directors has established and maintains an Audit Committee
and a Compensation Committee. The Audit Committee reviews with the Company's
independent auditors the plan, scope and results of the annual audit and the
procedures for and results of internal controls. The Audit Committee met twice
during the year ended January 31, 1995. The members of the Audit Committee are
Mr. McKenna (Chairman) and Dr. Alter. The Compensation Committee reviews and
recommends compensation arrangements for key management personnel, including
the Chairman and Chief Executive Officer and the President of the Company. The
Compensation Committee met twice during the year ended January 31, 1995. The
members of the Compensation Committee are Dr. Alter (Chairman) and Mr.
McKenna. The members of the Compensation Committee also administer the 1988
Stock Option Plan and the 1993 Incentive Compensation Plan. The Board of
Directors does not have a nominating committee.
During the Company's fiscal year ended January 31, 1995, the Board of
Directors held five meetings. During such fiscal year each director attended
all of the meetings of the Board of Directors and all of the meetings of the
committees of which he was a member.
Directors who are not employees of the Company receive a quarterly payment
of $3,750, plus $1,000 for each Board of Directors meeting attended. In
addition, committee chairmen receive $1,500 and other committee members
receive $1,000 for each committee meeting attended.
Each of Messrs. McKenna, Alter and Mayor was granted options to purchase
2,000 shares of Common Stock at an exercise price of $8.375 per share under
the 1994 Non-Employee Director Stock Option Plan on June 17, 1994, the
effective date of such plan. In addition, each person who is a non-employee
director of the Company on the date of each annual meeting of stockholders
through 1998 will receive options to purchase an additional 1,000 shares of
Common Stock on each such date, for an exercise price equal to the market
value of Common Stock on such date.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file
reports with the Securities and Exchange Commission and the New York Stock
Exchange relating to transactions and holdings in the Company's common stock.
The Company believes that during the fiscal year ended January 31, 1995 all
such filing requirements were satisfied, except that the acquisition of 2,752
shares of Common Stock for Mr. Proler's account under the Company's 401(k)
Plan was reported on a Form 5 filed by Mr. Proler on March 15, 1995.
REMUNERATION OF EXECUTIVE OFFICERS
The following tables set forth (i) the aggregate amount of remuneration
paid by the Company for the three fiscal years ended January 31, 1993, 1994
and 1995 to the Chief Executive Officer and the Company's four most highly
compensated officers in addition to the Chief Executive Officer, and (ii) the
fiscal year-end value of all stock options held by such individuals. No stock
options were granted to or exercised by any of such individuals during the
fiscal year ended January 31, 1995.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------------
AWARDS
-----------------------
(#) OF
ANNUAL COMPENSATION RESTRICTED SECURITIES ALL OTHER
FISCAL ------------------------------------ STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARD(1) OPTIONS (2)
--------------------------- ------ ----------- ---------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herman Proler........................ 1995 $ 384,470 $ 0 $ 280,882(3) $ 0 0 $ 25,016(4)
Chairman and Chief 1994 300,000 0 277,888(3) 0 10,000 26,248(4)
Executive Officer 1993 300,000 0 23,405(3) N/A 0 29,605(4)
Michael Loy.......................... 1995 $ 150,000 $ 45,000 $ 1,633(5) $ 0 0 $ 1,450
Vice President 1994 131,251 56,250 1,415(5) 29,815 6,000 1,449
Finance 1993 62,649(6) 0 759(5) N/A 12,000 0
Dennis Caputo........................ 1995 $ 125,000 $ 40,000 $ 3,509(5) $ 0 0 $ 1,474
Vice President 1994 125,001 45,000 1,904(5) 23,850 6,000 1,449
Environmental and 1993 111,381 0 5,093(5) N/A 0 1,423
Safety Compliance
Ian Linton........................... 1995 $ 115,000 $ 40,000 $ 2,366(5) $ 0 0 $ 9,829(7)
Vice President 1994 92,500 45,000 276(5) 23,850 6,000 784
Western Operations 1993 71,385 0 312(5) N/A 0 505
David Juengel........................ 1995 $ 85,000 $ 25,500 $ 2,249(5) $ 0 0 $ 1,474
Vice President 1994 82,702 19,125 975(5) 10,137 3,000 1,449
and Treasurer 1993 78,281 0 2,327(5) N/A 0 1,250
</TABLE>
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(1) Represents the value as of March 11, 1994 of shares of restricted stock
awarded on that date as a portion of the participant's bonus for fiscal
1994 pursuant to the Company's 1993 Incentive Compensation Plan. The
number of shares awarded to Messrs. Loy, Caputo, Linton and Juengel were
2,459, 1,967, 1,967 and 836, respectively. Each share award vests
one-third each year over the three-year period beginning January 31, 1995.
As of January 31, 1995, the value of the aggregate restricted stock held
by Messrs. Loy, Caputo, Linton and Juengel (exclusive of the shares that
vested on such date) was $11,268, $9,013, $9,013 and $3,829, respectively,
based on the $6.875 per share Closing price of the Common Stock on the New
York Stock Exchange on such date. No dividends will be paid on the
unvested shares of restricted stock. No other shares of restricted stock
are held by such individuals.
(2) Except as otherwise noted, represents the Company's matching 401(k)
contribution for such officer.
(3) Represents payments of $5,882, $2,884, and $488 for fiscal 1995, 1994, and
1993, respectively, under the Company's medical reimbursement arrangement
for executive officers and $275,000, $275,004 and $22,917 for fiscal 1995,
1994 and 1993, respectively, in payments under Mr. Proler's deferred
compensation arrangement described below.
(4) The spouse of Herman Proler is a party to a split dollar insurance
agreement with the Company pursuant to which she has obtained an insurance
policy on his life in the amount of $1,000,000. The amounts shown include
annual premiums on this policy paid by the Company, net of reimbursements
from Mrs. Proler, in the amounts of $23,542, $24,799, and $28,182 for
fiscal 1995, 1994 and 1993, respectively. Upon the death of Mr. Proler,
the beneficiary named by his spouse is entitled to receive a portion of
the benefits under the policy, and the Company will receive the cash
surrender value of the policy. The balance of the amounts shown represent
the Company's matching 401(k) contributions for Mr. Proler of $1,474,
$1,449 and $1,423 for fiscal 1995, 1994 and 1993, respectively.
(5) Represents payments under the Company's medical reimbursement arrangement
for executive officers.
(6) Mr. Loy joined the Company on August 1, 1992.
(7) Represents payments by the Company of $8,895 in legal fees in connection
with Mr. Linton's employment by the Company. The balance of the amount
represents the Company's matching 401(k) contribution of $934.
6
JANUARY 31, 1995 FISCAL YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END*
--------------------------------- -----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Herman Proler .................................. 48,933 6,667 $ 0 $ 0
Michael Loy .................................... 10,000 8,000 12,000 6,000
Dennis Caputo .................................. 11,375 4,000 0 0
Ian Linton ..................................... 5,000 4,000 0 0
David Juengel .................................. 4,750 2,000 0 0
</TABLE>
- ---------
* Based on the $6.875 per share closing price of the Common Stock on the New
York Stock Exchange on January 31, 1995.
REMUNERATION AGREEMENTS AND OTHER ARRANGEMENTS
The Company has entered into a deferred compensation agreement with Herman
Proler, amended as of December 31, 1989, under which he is entitled to receive
monthly payments of $22,917 for a ten-year period commencing with the month
following his attainment of age 65, regardless of whether he is actively
employed by the Company. Pursuant to this agreement such monthly payments
began in January 1993. In the event of Mr. Proler's death, his designated
beneficiary or, in the absence of a designated beneficiary, his spouse or the
executor or administrator of his estate, would be entitled to receive such
monthly payments.
The Company has entered into a deferred compensation agreement with Steven
Gilliland effective February 6, 1995, under which Mr. Gilliland will receive a
monthly payment beginning on the later of the date he attains age 65 or the
first day of the month following his retirement from the Company, and
continuing for ten years. Such monthly payments will be $833 if he is
continuously employed by the Company through February 1, 2000, $1,667 if he is
so employed through February 1, 2001, $2,500 if he is so employed through
February 1, 2002, $3,333 if he is so employed through February 1, 2003 and
$4,167 if he is so employed through February 1, 2004. In the event of Mr.
Gilliland's death, his designated beneficiary, or in the absence of a
designated beneficiary, the executor or administrator of his estate would be
entitled to receive such monthly payments.
In no event may benefits otherwise payable to Mr. Proler and Mr. Gilliland
under their deferred compensation agreements described above exceed the lesser
of (i) 299% of their respective "base amounts" as defined and used in Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), or (ii)
the maximum amount of additional compensation respectively payable to them
without resulting in the denial of any Federal income tax deduction by the
Company for such payments under Section 280G or Section 4999 of the Code.
The Company has also entered into a deferred compensation agreement with
Norman Bishop effective April 16, 1993 under which Mr. Bishop will receive a
monthly payment beginning on the later of May 1, 1998 or the first day of the
month following his retirement from the Company, and continuing for ten years.
Such monthly payments will be $1,181 if Mr. Bishop is continuously employed by
the Company through April 16, 1996, $2,361 if he is so employed through April
16, 1997, and $3,542 if he is so employed through April 16, 1998. In the event
of Mr. Bishop's death, his designated beneficiary, or in the absence of a
designated beneficiary, the executor or administrator of his estate would be
entitled to receive such payments.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
McKenna & Company, an investment banking firm of which John J. McKenna is
Chairman and Chief Executive Officer, provided investment banking services to
the Company. During calendar year 1994, the Company paid fees and expenses of
$154,586 to McKenna & Company for such services in connection with the sale of
its Kansas City and Vinton facilities. Mr. McKenna is a director and a member
of the Compensation Committee of the Company.
7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors presents
the following report on executive compensation. This report describes the
components of the Company's compensation to its executive officers and the
basis on which compensation was determined for the Chief Executive Officer and
other executive officers of the Company for the fiscal year ended January 31,
1995.
The members of the Compensation Committee are Dr. Alter (Chairman) and Mr.
McKenna. The Compensation Committee's duties include recommending compensation
for the Chairman and Chief Executive Officer and for the President of the
Company and reviewing and approving recommendations made by management
regarding compensation for other executive officers. Recommendations of the
Compensation Committee are subject to the approval of the Board of Directors
of the Company. Members of the Compensation Committee also administer the
Company's 1988 Stock Option Plan and the Company's 1993 Incentive Compensation
Plan.
The executive officers of the Company for the fiscal year ended January
31, 1995, consisted of Herman Proler, Chairman and Chief Executive Officer,
Michael F. Loy, Vice President-Finance, Chief Financial Officer and Secretary,
Dennis Caputo, Vice President-Environmental and Safety Compliance, Ian Linton,
Vice President-Western Operations, David A. Juengel, Vice President and
Treasurer, and Norman Bishop, Vice President-Technical. Steven F. Gilliland
joined the Company as President and Chief Operating Officer in February 1995.
In conducting its review and recommendations with respect to executive
compensation, the Compensation Committee considers the following general
objectives:
o Attracting and retaining key executives for the Company.
o Basing incentive compensation opportunities on the Company's
performance.
o Coordinating its recommendations with the Company's annual and
long-term objectives and strategies.
EXECUTIVE OFFICER COMPENSATION. The three principal components of the
Company's compensation for executive officers and key employees are base
salary, annual bonuses and stock option grants. The Compensation Committee
believes that it is essential that the Company be able to attract and retain
qualified individuals for positions of substantial responsibility by offering
a total compensation package that is competitive in the industry. To that end,
the Compensation Committee has adopted a policy for setting base salaries for
satisfactorily performing executives at the median level of the competitive
market for such executives. In determining competitive market salaries,
comparisons are made to durable goods manufacturing companies, which include
steel and metal manufacturing companies, supplemented by available information
on comparable companies. Other factors taken into account in determining base
salary amounts are the individual officer's duties and responsibilities,
current performance, future potential and tenure with the Company. The
Company's financial performance and business conditions are also important
considerations.
In addition to base salary, the Company's executive officers have
historically received cash bonuses determined near the Company's fiscal year
end. Under the Company's 1993 Incentive Compensation Plan key employees of the
Company have the opportunity to earn annual bonus awards based on their
achievement of performance goals set annually by the Compensation Committee.
In setting performance goals, the Compensation Committee attempts to emphasize
quantitative measures of performance whenever possible and focuses on
management activities intended to lead to greater profitability for the
Company. Performance goals are determined for each participant on an
individual basis and consist of specific job assignments or financial or
operational performance objectives for the fiscal year. A participant's
overall performance and contribution to the Company may also be considered in
determining a portion of any award. The Compensation Committee believes that
the 1993 Incentive Compensation Plan should incorporate specific operating
profit expectations where appropriate. For example, based on performance goals
and criteria under the plan for the fiscal year ended January 31, 1995, no
incentive award could have been earned by the Chief Executive Officer or
President of the Company unless the Company had positive pretax income for
8
fiscal 1995, as reflected in the financial statements of the Company for such
year after any awards to such individuals had been expensed.
Under the 1993 Incentive Compensation Plan, a portion of each award may be
payable in restricted shares of Common Stock, valued at the closing price of
Common Stock on the New York Stock Exchange the first day of the fiscal year
to which the award pertains. The percentage of awards to be paid in cash and
in stock may be varied by the Compensation Committee from time to time
provided that the portion payable in stock may not exceed fifty percent of the
award. For fiscal 1995, none of the awards payable were made in stock.
The Compensation Committee believes that the 1993 Incentive Compensation
Plan and its other policies with respect to executive salaries discussed above
are important aspects of its overall policy to structure incentives for
executive development and to reward and retain those individuals whose
contributions are vital to the future growth and success of the Company. The
Compensation Committee intends to continue to evolve criteria to better
accomplish those goals.
The 1988 Stock Option Plan is maintained by the Company to provide
executive officers and key employees with additional incentive to promote the
financial success of the Company as reflected by increased value of the
Company's Common Stock. During fiscal year 1995, no options to purchase shares
of Common Stock were granted under this Plan.
The executive officers of the Company, other than Mr. Proler, Mr.
Gilliland and Mr. Bishop, are also entitled to participate in the Company's
Executive Deferred Compensation Plan for key employees. In general,
participants under this plan who are employed continuously by the Company
until age 65 (or who become permanently disabled while employed by the
Company) are entitled to receive a monthly retirement benefit beginning on the
later of their retirement from the Company or age 65. The benefit is based on
a percentage of their monthly salary on entry into the plan plus a percentage
of their bonus for the prior year. The Chief Executive Officer of the Company
determines the employees who will participate in the Plan and the effective
date of their participation. Mr. Proler, Mr. Gilliland and Mr. Bishop
participate in the separate deferred compensation arrangements discussed
above.
The Company has in effect a medical reimbursement arrangement with its
executive officers under which the Company pays medical expenses incurred by
such individuals that are not covered by the regular medical insurance
maintained by the Company.
Executive officers of the Company are also entitled to participate in the
Company's Tax Deferred Savings and Retirement Plan and Trust (the 401(k) Plan)
on the same basis as other employees of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. In establishing compensation for
Mr. Proler for the fiscal year ended January 31, 1995, the Compensation
Committee assessed the factors noted above in reviewing the Chief Executive
Officer's performance for the year, as well as the overall financial
performance of the Company. An increase in Mr. Proler's salary to $400,000
annually effective in fiscal 1995 had been recommended last year after taking
into account his overall performance and contributions to the Company,
median-level competitive market salaries for comparative executives, and the
fact that Mr. Proler's salary had not been adjusted since January 1989.
Considering all of these factors, no further increase has been recommended for
Mr. Proler's salary in fiscal 1996. Although the Company had pre-tax income
for fiscal 1995, no bonus was awarded Mr. Proler under the 1993 Incentive
Compensation Plan. In addition to his current compensation, Mr. Proler began
to receive monthly payments under the deferred compensation arrangement
discussed above in January 1993 following his attainment of age 65.
Section 162(m) of the Code limits the deductibility by publicly-held
companies of compensation in excess of $1,000,000 paid to the chief executive
officer and each of the four additional highest-paid executive officers of the
Company. In the past the compensation levels of the Company's executives have
not exceeded this limit and the Company does not anticipate that they will do
so in the foreseeable future.
Harvey Alter, Chairman
John J. McKenna
9
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the S&P 500 Index and to the S&P Steel Index. The graph assumes that the
amount of the investment in the Company's Common Stock and each index was $100
on the last trading day in fiscal 1990. The Company's primary business is the
buying, processing for recycling and selling of ferrous and other scrap
metals; however, there is no industry index for this business or group of
public companies engaged in the business that would constitute a peer group
for the Company. The Company is classified with steel companies under the
industry group listings for companies required to file annual reports with the
Securities and Exchange Commission, by the New York Stock Exchange and by
other industry indices, and considers the S&P Steel Index to be an appropriate
published index for purposes of the performance graph comparison.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
(LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW)
FISCAL YEAR
1990 1991 1992 1993 1994 1995
---- ------- ------- ------- ------- -------
Proler International Corp. .. $100 $ 54.86 $ 45.17 $ 47.14 $ 75.94 $ 36.01
S&P 500 Index ............... 100 108.39 132.99 147.06 166.00 166.88
S&P Steel Index ............. 100 91.59 112.31 157.78 206.74 170.45
PURSUANT TO SEC RULES, THIS SECTION OF THIS PROXY STATEMENT IS NOT DEEMED
"FILED" WITH THE SEC AND IS NOT INCORPORATED BY REFERENCE INTO THE COMPANY'S
ANNUAL REPORT ON FORM 10-K.
10
PROPOSALS OF SECURITY HOLDERS
Any stockholder desiring to have included in the 1996 proxy statement a
proposal to be considered at the 1996 Annual Meeting of the Stockholders of
the Company must submit such proposal to the Company at its corporate
headquarters no later than January 19, 1996.
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected the public accounting
firm of Coopers & Lybrand L.L.P. as the Company's independent auditors for the
fiscal year ending January 31, 1996. Coopers & Lybrand L.L.P. has served in
that capacity for a number of years. A representative of Coopers & Lybrand
L.L.P. will be present at the Annual Meeting, will have the opportunity to
make a statement if he so desires and will respond to appropriate questions.
OTHER MATTERS
The Company does not know of any matter which will be brought before the
Annual Meeting other than those set forth in the Notice of Annual Meeting of
Stockholders accompanying this Proxy Statement. If any other matter is
properly brought before the Annual Meeting, it is intended that the persons
named in, and acting under, the enclosed form of proxy, or their substitutes,
will vote thereon in accordance with their best judgment.
By order of the Board of Directors,
/s/ HERMAN PROLER
Herman Proler
CHAIRMAN OF THE BOARD
A COPY OF THE PROLER INTERNATIONAL CORP. ANNUAL REPORT TO THE SECURITIES
AND EXCHANGE COMMISSION ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, IS
AVAILABLE WITHOUT CHARGE TO INTERESTED SECURITY HOLDERS UPON WRITTEN REQUEST.
THE COMPANY WILL FURNISH ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING SUCH
REPORT TO ANY SUCH PERSON ON REQUEST UPON PAYMENT OF REASONABLE FEES RELATING
TO THE COMPANY'S FURNISHING SUCH EXHIBITS. PLEASE DIRECT REQUESTS TO:
CORPORATE AFFAIRS, PROLER INTERNATIONAL CORP., P.O. BOX 286, HOUSTON, TEXAS
77001-0286.
11
<PAGE>
FORM OF PROXY, FRONT SIDE
PROLER INTERNATIONAL CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 20, 1995.
The undersigned hereby appoints Herman Proler and Michael Loy, or
either of them, as Proxies, each with the power to appoint his
P substitute, and hereby authorizes them to represent and to vote as
R designated herein, all shares of common stock of Proler International
O Corp. which the undersigned is entitled to vote at the annual meeting
X of stockholders to be held on June 20, 1995, or any adjournment
Y thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THE PROXY WILL BE VOTED FOR PROPOSAL 1, WHICH IS BEING PROPOSED
BY THE BOARD OF DIRECTORS.
PLEASE MARK, SIGN, DATE AND RETURN
IN THE ENCLOSED ENVELOPE PROMPTLY
(PLEASE SIGN ON REVERSE SIDE)
<PAGE>
FORM OF PROXY, BACK SIDE
[X] Please mark your SHARES IN YOUR NAME
votes as in this
example.
FOR WITHHOLD AUTHORITY
all nominees to vote for all
listed nominees listed
1. Election of [ ] [ ] Nominees: STEVEN F. GILLILAND
Directors RICHARD B. MAYOR
2. In their discretion, the
Proxies are authorized to
vote upon such business as
may properly come before
the meeting or any
adjournment thereof
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE HIS NAME ON THE LINE BELOW
________________________________________________
SIGNATURE(S) ______________________________________ DATE ______________________
SIGNATURE(S) ______________________________________ DATE ______________________
Please sign exactly as name appears above. When
shares are held by joint tenants, both should PLEASE MARK, SIGN, DATE AND
sign. When signing as attorney, executor, RETURN IN THE ENCLOSED
administrator, trustee or guardian, please give ENVELOPE PROMPTLY
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
<PAGE>
