<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / 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 Section 240.14a-11(c) or
Section 240.14a-12
Melamine Chemicals, Inc.
- - --------------------------------------------------------------------------------
(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), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
MELAMINE CHEMICALS, INC.
39041 HIGHWAY 18 WEST
DONALDSONVILLE, LOUISIANA 70346
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF MELAMINE CHEMICALS, INC.:
The Annual Meeting of Stockholders of Melamine Chemicals, Inc. will be
held at the Riverside House, 39209 Highway 18 West, Donaldsonville, Louisiana
on Tuesday, November 7, 1995 at 1:00 p.m., for the following purposes:
(i) to elect two directors to serve a three-year term of office
expiring at the 1998 annual meeting of stockholders;
(ii) to ratify the appointment of KPMG Peat Marwick LLP, certified
public accountants, as independent auditors for the Company for the fiscal year
ending June 30, 1996;
(iii) to transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on September 22,
1995 are entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting in
person. However, if you are unable to attend in person and wish to have your
stock voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN
THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked
by appropriate notice to the Secretary of Melamine Chemicals, Inc. at any time
prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
L. R. McMillan, II
Secretary
Donaldsonville, Louisiana
September 29, 1995
<PAGE> 3
MELAMINE CHEMICALS, INC.
39041 HIGHWAY 18 WEST
DONALDSONVILLE, LOUISIANA 70346
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Melamine
Chemicals, Inc. (the "Company") in connection with the solicitation on behalf
of the Board of Directors of proxies for use at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, November 7, 1995 at 1:00
p.m., at the Riverside House, 39209 Highway 18 West, Donaldsonville, Louisiana.
Only holders of record of common stock of the Company (the "Common
Stock") at the close of business on September 22, 1995 are entitled to notice
of and to vote at the meeting. On that date, the Company had outstanding
5,450,300 shares of Common Stock, each of which is entitled to one vote.
The enclosed proxy may be revoked by the stockholder at any time prior
to the exercise thereof by filing with the Secretary of the Company a written
revocation or duly executed proxy bearing a later date. The proxy will be
deemed revoked if the stockholder is present at the Annual Meeting and elects
to vote in person.
The cost of soliciting proxies in the enclosed form will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegraph; and banks, brokerage houses and
other institutions, nominees and fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of proxies. The Company will, upon request, reimburse banks,
brokerage houses and other institutions, nominees and fiduciaries for their
expenses in forwarding proxy materials to their principals.
<PAGE> 4
SECURITY HOLDINGS OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of August 31, 1995
concerning the beneficial ownership of the Company's Common Stock by each
director, each named executive officer and other persons known to own
beneficially more than five percent of the Company's Common Stock. Unless
otherwise noted, all shares shown as beneficially owned are held with sole
voting and investment power.
<TABLE>
<CAPTION>
Amount Percent
Beneficially of
Name and Address Owned Class
---------------- ----- -----
<S> <C> <C>
Ashland Inc. 1,275,000(1) 23.4%
5200 Blazer Parkway
Dublin, OH 43017
First Mississippi Corporation 1,275,000 23.4%
700 North Street
Jackson, MS 39215-1249
Dimensional Fund Advisors, Inc. 360,100(2) 6.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The Killen Group, Inc. 346,700(3) 6.4%
1189 Lancaster Avenue
Berwyn, PA 19312
James W. Crook 88,333(4) 1.6%
David J. D'Antoni 11,370(5) (6)
Charles M. McAuley 200 (6)
Scotty B. Patrick 21,000 (6)
Nick H. Prater 1,000 (6)
Daniel D. Reneau 124(7) (6)
R. Michael Summerford 200 (6)
Frederic R. Huber 77,078(8) 1.4%
All directors and executive officers as a group 308,360(9) 5.4%
</TABLE>
(1) As reported on Schedule 13G dated September 30, 1993 and filed with
the Securities and Exchange Commission.
(2) As reported on Amendment No. 3 to Schedule 13G dated January 31, 1995
and filed with the Securities and Exchange Commission. Dimensional
Fund Advisors Inc. ("Dimensional"), a registered investment advisor,
is deemed to have beneficial ownership of 360,100 shares, all of which
shares are held in portfolios of DFA Investment Dimensions Group Inc.,
a registered open-end investment company, or in series of DFA
Investment Trust Company, a Delaware business trust, the DFA Group
Trust and DFA Participating Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of such shares. Sole voting power is held only
with respect of 236,600 of such shares.
2
<PAGE> 5
(3) As reported on Schedule 13G and dated January 31, 1995 filed with the
Securities and Exchange Commission. Sole voting power is held only
with respect to 108,100 of such shares.
(4) Includes 73,333 shares which Mr. Crook has immediately exercisable
options to purchase. Does not include 1,275,000 shares held by First
Mississippi Corporation with respect to which Mr. Crook shares voting
and investment power as a member of the First Mississippi Corporation
Board of Directors.
(5) Includes 10,870 shares owned by Mr. D'Antoni's wife and son.
(6) Less than 1%.
(7) Includes 24 shares owned by Mr. Reneau's son.
(8) Includes 1,200 shares owned by Mr. Huber's wife, children and
mother-in-law and 60,000 shares which Mr. Huber has immediately
exercisable options to purchase.
(9) Includes 206,666 shares that executive officers have immediately
exercisable options to purchase.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and By-laws divide the
Board of Directors into three classes serving three-year staggered terms. The
Company's By-laws authorize the Board of Directors to fix the size of the
Board, and until fixed otherwise by the Board, the By-laws have set the number
of directors at seven. The term of office of one class of two directors
expires at the Annual Meeting. A second class of three directors will serve
until the 1996 annual meeting and a third class of two directors will serve
until the 1997 annual meeting. David J. D'Antoni and R. Michael Summerford,
the directors whose terms are expiring, have been nominated by the Board of
Directors for re-election and will stand for re-election at the Annual Meeting
for a three-year term of office expiring at the 1998 annual meeting and until
their successors are duly elected and qualified. Accordingly, proxies cannot
be voted for more than two persons.
Unless authority to vote for the election of directors is withheld,
all shares represented by the enclosed form of proxy will be voted in favor of
the election of each of the two nominees listed below. Under the Company's
By-laws, directors are elected by plurality vote. The Company is informed that
Messrs. D'Antoni and Summerford are willing to serve if re-elected; however, if
either of them should decline or become unable to serve for any reason, votes
represented by the enclosed proxy will be cast instead for a substitute nominee
designated by the Board of Directors, or, if none is designated, votes will be
cast according to the judgment of the person or persons voting the proxy.
Under the Company's by-laws, a shareholder may nominate one or more persons for
election as directors only if written notice of such shareholders' intent to
make such nomination, together with certain other information, is received at
the Company's principal executive offices not later than the 10th day following
the day on which the notice of the Annual Meeting, including with this proxy
statement, is mailed to stockholders.
The following table sets forth certain information as of August 31,
1995 regarding the continuing directors and the nominees for election as
directors of the Company. Unless otherwise indicated, each director has been
engaged in the principal occupation shown for more than the past five years.
3
<PAGE> 6
NOMINEES FOR RE-ELECTION:
<TABLE>
<CAPTION>
Nominated for
Name, Age, Principal Occupation and Director Term
Directorships in Other Public Corporations Since Expiring
------------------------------------------ ----- --------
<S> <C> <C>
David J. D'Antoni, 50 1992 1998
President, Ashland Chemical Company and
Senior Vice President, Ashland Inc.
R. Michael Summerford, 46 1983 1998
Vice President & Chief Financial Officer,
First Mississippi Corporation;
Director, FirstMiss Gold Inc.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES NAMED ABOVE.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation and Director Serving Term
Directorships in Other Public Corporations Since Expiring
------------------------------------------ ----- --------
<S> <C> <C>
CONTINUING DIRECTORS:
James W. Crook, 65 1972 1996
Chairman of the Board of the Company;
Director, First Mississippi Corporation
Charles M. McAuley, 61 1979 1996
Advisor, First Mississippi Corporation (1)
Scotty B. Patrick, 60 1968 1996
Group Vice President, Petrochemical and
Technical, Ashland Chemical Company
Nilon H. Prater, 66 1991 1997
Retired Corporate Executive;
Director, Calgon Carbon Corporation;
Director, Harsco Corporation;
Director, Koppers Industries, Inc.(2)
Daniel D. Reneau, 55 1987 1997
President, Louisiana Tech University
</TABLE>
(1) From 1985 to March 1992, Mr. McAuley served as Group Vice President of
First Mississippi Corporation. From April 1992 to August 1994, Mr.
McAuley served as President, Chief Executive Officer and a Director of
FirstMiss Gold Inc.
4
<PAGE> 7
(2) From 1986 until his retirement in 1990, Mr. Prater served as President
and Chief Executive Officer of Mobay Corporation.
During the fiscal year ended June 30, 1995, the Board of Directors
held four meetings. All of the directors attended 75% or more of the aggregate
number of meetings of the Board of Directors and committees of which they were
members.
The Board of Directors has no nominating committee. The Board has an
Audit Committee on which Messrs. Prater, Summerford and Reneau serve. The
Audit Committee was formed in July 1987 and given general responsibility for
meeting from time to time with representatives of the Company's independent
public accountants in order to obtain an assessment of the financial position
and results of operations of the Company and report to the Board with respect
thereto. The Committee met two times during fiscal year 1995. The Board also
has a Personnel and Compensation Committee (the "Compensation Committee") on
which Messrs. Patrick, Prater and McAuley serve. The Compensation Committee
was formed in August 1987 and given general responsibility for the
administration of certain of the Company's employee benefit plans and of the
Company's compensation structure. The Compensation Committee met two times
during fiscal year 1995. The Long-Term Incentive Plan Committee, on which
Messrs. Reneau and Prater serve, administers the Long-Term Incentive Plan and
determines the type, size and recipients of awards granted thereunder. This
committee met once during fiscal year 1995.
COMPENSATION OF DIRECTORS
During fiscal year 1995, non-employee directors were compensated for
their services at the rate of $7,200 per year and received $600 per day for
attendance at board and committee meetings. The Chairman of each committee
received an additional $100 per meeting. Messrs. D'Antoni and Patrick have
waived their right to receive directors' fees. Directors are reimbursed for
travel expenses to and from meetings upon request. No fees are paid for
informal meetings or meetings held by telephone conference call. The Company
furnishes each director with $50,000 in accidental death and dismemberment
insurance protection at an annual premium cost of approximately $28 per
director.
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
WITH MANAGEMENT
COMPENSATION COMMITTEE AND LONG-TERM INCENTIVE PLAN COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
Policies and Programs
The Company seeks to attract and retain executive officers who, in the
judgment of the Board of Directors, possess the skill, experience and
motivation to contribute significantly to the long-term success of the Company
and enhance value for the Company's shareholders. These committees follow an
executive officer compensation policy designed to compensate the Company's
executive officers with
5
<PAGE> 8
both cash and equity-based compensation in a program that takes into account
both individual performance and contribution to corporate results.
The compensation policies followed by these committees involve three
components--base salary, annual incentive and long-term incentive compensation.
Base salary compensation is determined by the impact the executive has on the
Company, the skills and experience the executive brings to the job, competition
in the marketplace for those skills and the potential of the executive in the
job. The Compensation Committee reviews and approves base salary annually
based on the executive's performance in comparison to the Board's and the Chief
Executive Officer's expectations.
Annual incentive compensation is based on corporate net earnings and
individual performance and is paid through the Company's Annual Incentive Award
Plan. The payment to the executive is based equally on a return on equity
formula and the Compensation Committee's evaluation of the executive's overall
performance during the year. If the Company does not have net earnings, the
executives are not eligible for any payments under the Annual Incentive Award
Plan. Payments under the Annual Incentive Award Plan are made over a
three-year period. The Plan is reviewed annually to determine if changes and
modifications are needed.
Long-term incentive compensation generally consists of stock options
awarded by the Long-Term Incentive Plan Committee. The size of a stock option
award is based primarily on the executive's potential to contribute to the
long-term growth of the Company. The value of the option once it vests
(generally over a three-year period) depends upon the Company's performance as
evidenced by the price appreciation of its Common Stock at the time the option
is exercised. The long-term incentive compensation is designed to provide
significant financial rewards to the executives when shareholder value is
added. The long-term incentive compensation also attempts to align more
closely the executive's interests with those of the Company's shareholders.
Chief Executive Officer Compensation in 1995
At its August 2, 1994 meeting, the Compensation Committee reviewed Mr.
Huber's performance as Chief Executive Officer of the Company during the prior
year. The Compensation Committee noted that although the Company had
experienced a loss during fiscal 1994, the last two fiscal quarters had shown
improvements in operating results. The Compensation Committee felt that Mr.
Huber's performance contributed significantly to those improvements and decided
to increase his base salary from $162,750 to $179,025.
At its January 31, 1995 meeting, the Compensation Committee again
reviewed Mr. Huber's performance. The Compensation Committee noted the
significant improvement in operating results during the first two quarters of
fiscal 1995 and decided to increase Mr. Huber's base salary from $179,025 to
$187,980 effective April 1, 1995. In addition, the Compensation Committee
decided to grant to Mr. Huber a special bonus of $30,000, which had been
authorized in 1992 but had been declined by Mr. Huber because no other
executive officer was eligible for a bonus during that year.
The Long-Term Incentive Plan Committee granted Mr. Huber an option to
purchase 15,000 shares of Common Stock at $7.50 per share (the market price at
the date of grant) to compensate Mr. Huber for
6
<PAGE> 9
the part he was expected to play in the improvement of the Company's
performance and in creating shareholder value in the future. Based on the
Company's net earnings for fiscal 1995 and the Compensation Committee's
evaluation of Mr. Huber's performance during fiscal 1995, the Compensation
Committee awarded him incentive compensation totaling $56,394. Of this amount,
$37,596 was paid to Mr. Huber on June 30, 1995, and the remainder will be paid
out over the next two years in equal installments.
<TABLE>
<S> <C>
PERSONNEL AND COMPENSATION COMMITTEE: LONG-TERM INCENTIVE PLAN COMMITTEE:
Charles M. McAuley Scotty B. Patrick Nick H. Prater Daniel D. Reneau
Nick H. Prater
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Two members of the Compensation Committee are former officers of the
Company. Mr. Patrick served as Vice President and Acting General Manager of
the Company from 1971 to 1987, and Mr. McAuley served as Vice President of the
Company from 1986 to 1987. Mr. McAuley is an advisor to, and Mr. Crook is a
member of the Board of Directors of, First Mississippi Corporation.
SUMMARY OF EXECUTIVE COMPENSATION
Set forth below is information on the compensation of the Company's
Chief Executive Officer and each other executive officer who received
compensation totaling $100,000 or more for services rendered during the most
recently completed fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation
------------------------------------------- -------------------------------
Name and Principal Fiscal Other Annual Options All Other
Position Year Salary Bonus Compensation Awards (#) Compensation(5) ($)
-------- ---- ------ ----- ------------ ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Frederic R. Huber(1) 1995 $179,907 $86,394(2) (4) 15,000 $7,196
President & Chief 1994 162,750 0 (4) 15,000 6,510
Executive Officer 1993 162,104 0 (4) 5,000 3,798
Wayne D. DeLeo 1995 $109,859 $28,547(3) (4) 7,500 $4,233
Vice President & 1994 90,000 0 (4) 7,500 3,600
Chief Financial
Officer 1993 88,917 0 (4) 5,000 3,557
Martin F. Lapari 1995 $104,976 $27,277(3) (4) 7,500 $4,045
Vice President of 1994 86,000 0 (4) 7,500 3,440
Manufacturing & 1993 85,271 0 (4) 5,000 3,405
Engineering
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation
------------------------------------------- -------------------------------
Name and Principal Fiscal Other Annual Options All Other
Position Year Salary Bonus Compensation Awards (#) Compensation(5) ($)
-------- ---- ------ ----- ------------ ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
William A. Sorensen 1995 $ 95,457 $20,684(3) (4) 0 $1,935
Vice President of 1994 45,000(6) 0 (4) 15,000 0
Sales and Marketing 1993 (6)
</TABLE>
(1) Mr. Huber has an employment contract expiring on November 16, 1995.
Under the terms of the contract, Mr. Huber is to be paid a base salary
of not less than $155,000 per year.
(2) A total of $67,596 was paid during fiscal 1995. The remaining $18,798
will be paid during the next two fiscal years.
(3) Two-thirds paid in fiscal 1995. The remaining portion will be paid in
equal installments in fiscal 1996 and 1997.
(4) Less than 10% of the total annual salary and bonus reported.
(5) Amount represents Company's matching contribution to the 401(k)
retirement plan.
(6) Mr. Sorensen joined the Company as Vice President of Sales and
Marketing on January 1, 1994.
STOCK OPTIONS
Set forth below is information on stock options granted in fiscal 1995:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- - ---------------------------------------------------------------------------------
Number of Potential Realizable Value at Assumed
Securities Percent of Total Annual Rates of Stock Price
Underlying Options Granted to Exercise Appreciation for Option Term
Options Employees in Price Expiration -------------------------------------
Name Granted Fiscal Year ($/Share) Date 5% ($) 10% ($)
---- ------- ----------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Frederic R. Huber 15,000 25.00% $7.50 8/3/04 $70,750 $179,300
Wayne D. DeLeo 7,500 12.50% 7.50 8/3/04 35,380 89,650
Martin F. Lapari 7,500 12.50% 7.50 8/3/04 35,380 89,650
</TABLE>
8
<PAGE> 11
Set forth below is information on the options exercised in fiscal 1995 and
the fiscal year end value of unexercised options to purchase Common Stock held
by the named executives:
AGGREGATE OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of Unexercised
Value Unexercised Options in-the-money Options
Shares Acquired Realized at Fiscal Year-End (#) at Fiscal Year-End ($)
Name on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- --- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Frederic R. Huber 0 0 60,000/15,000 $142,086/$66,664
Wayne D. DeLeo 0 0 25,833/14,167 $42,707/$36,668
Martin F. Lapari 0 0 25,833/14,167 $22,707/$36,668
William A. Sorensen 0 0 5,000/10,000 $13,750/$27,500
</TABLE>
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's Common Stock for the last five fiscal years with the CRSP Total
Return Index for the NASDAQ Stock Market (US Companies) and an index composed
of a group of peer issuers. The members of the peer group were selected by the
Company based upon size and type of business. The peer group includes the
following companies: Kinark Corporation, High Plains Corporation and Detrex
Corporation.
[CHART]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Melamine Chemicals 100 74.94 36.56 40.41 47.38 69.27
Nasdaq US 100 105.89 127.25 159.99 161.61 215.33
Peer Group 100 90.13 107.85 105.39 124.16 120.32
</TABLE>
9
<PAGE> 12
COMPENSATION PURSUANT TO PLANS
Retirement Plans
The Company funds a qualified defined benefit retirement plan and related
trust (the "Retirement Plan") covering all employees of the Company who have
completed six months of employment and worked at least 1,000 hours. An
employee becomes fully vested after five years. Retirement Plan benefits are
based on the participant's highest average monthly compensation for any
successive five-year period preceding retirement or termination of employment
and are not subject to reduction for Social Security benefits. Retirement
income payable to a participant is equal to the sum of 1.4% of that portion of
highest average monthly compensation that is not in excess of $600, plus 1.8%
of his or her highest average monthly compensation in excess of $600,
multiplied by years of service.
A participant may select one of four alternative payment options under the
Retirement Plan, including the Ten Years Certain and Life Option, the Joint
Annuitant Option, the Joint and 66 2/3% Survivor Option or the lump-sum
distribution. Except for lump sum distribution, each of these options allows
for the payment of benefits to the participant's dependents upon the
participant's death. Each payment option has the same actuarial value at
commencement, but monthly payments vary according to the alternative selected.
The benefit formula notwithstanding, the annual retirement benefit cannot
exceed the maximum benefit allowed under Section 415(b) of the Internal Revenue
Code. For 1995, the maximum annual benefit is $120,000.
In fiscal 1995, the Company adopted a Supplemental Retirement Plan (SRP) to
supplement the retirement plan benefits limited under federal law. The
supplement consists of an amount equal to the excess of the participant's
benefits calculated under the Retirement Plan over the maximum benefit
permitted by law. The Compensation Committee approves all employees covered
under the SRP. Mr. Huber is the only employee currently covered by the SRP.
The following table reflects annual retirement benefits that a participant
with the years of service and the compensation levels indicated below can
expect to receive under the Retirement Plan and, in the case of Mr. Huber, the
Supplemental Retirement Plan upon retirement at age 65. The table assumes that
benefits are paid pursuant to the Ten Years Certain and Life Option. As of
June 30, 1995, Messrs. Huber, DeLeo, Lapari and Sorensen had 3, 7, 12 and 1
years of credited service, respectively.
<TABLE>
<CAPTION>
Years of Service
----------------
10 15 20 25 30
-- -- -- -- --
Earnings
--------
<S> <C> <C> <C> <C> <C>
$ 100,000 $17,712 $26,568 $35,424 $44,280 $53,136
125,000 22,212 33,318 44,424 55,530 66,636
150,000 26,712 40,068 53,424 66,780 80,136
175,000 31,212 46,818 62,424 78,030 93,636
200,000 35,712 53,568 71,424 89,280 107,136
</TABLE>
10
<PAGE> 13
Change of Control Severance Agreements
The Company has entered into agreements with Messrs. Huber, DeLeo, Lapari,
and Sorensen providing for severance benefits if the officer's employment is
terminated for the reasons described below during a two-year period following a
change in control of the Company. The severance benefit is equal to the sum of
(i) two times the sum of his annual salary and bonus; (ii) any accrued and
unpaid or deferred benefits, including accrued salary, vacation pay and accrued
bonus, and (iii) the actuarial difference between the amount he would receive
under the Retirement Plan if he were employed for the two-year period following
termination and the amount paid or payable thereunder. The agreement also
provides for the continued provision of benefits under the Company's welfare
benefit plans, practices, policies and programs.
Such severance benefits are payable upon termination of employment by the
Company other than for disability or cause or by Messrs. Huber and DeLeo for
any reason. Such severance benefits are payable to Messrs. Lapari and Sorensen
upon termination of employment by the Company other than for disability or
cause, as defined therein, or by the office for good reason, as defined
therein. In no event, however, may severance benefits payable under such
agreement exceed the amount allowable to the Company as a deduction for federal
tax purposes under applicable law.
The agreement also provides for the continued employment of Mr. Huber for a
period of two years following a change in control on terms at least as
favorable as those applicable for the 120-day period immediately preceding the
change in control and at an annual base salary at least equal to twelve times
the highest monthly base salary paid to him in the preceding five years.
CERTAIN TRANSACTIONS
Furnished below is information regarding certain transactions in which
executive officers, directors and principal stockholders of the Company had an
interest during the fiscal year ended June 30, 1995.
Prior to its initial public offering in 1987, the Company was operated as a
joint venture between First Mississippi Corporation ("First Mississippi") and
Ashland Inc. ("Ashland"). As participants in a joint venture, Ashland and
First Mississippi negotiated the terms of many significant contracts to which
the Company is a party. Certain of those contracts were with Ashland and First
Mississippi, and although the Company did not negotiate such contracts at
arm's-length, the Company believes that its current commercial relationships
with Ashland and First Mississippi are, and all future transactions between the
Company and its officers, directors and principal stockholders or any of their
affiliates will be on terms no less favorable than could be obtained from
unaffiliated third parties. Such future transactions will be approved by a
majority of the outside directors.
Feedstock Supply Agreement. The Company obtains all of its raw materials
(urea and anhydrous ammonia) from First Mississippi and Mississippi Chemical
Corporation ("Mississippi Chemical"), an unrelated party, out of the production
of Triad Chemical, a joint venture between First Mississippi and Mississippi
Chemical. First Mississippi previously provided all of the Company's urea and
anhydrous ammonia under the feedstock agreement. In July 1988, the Company
agreed to an assignment in which one-half of First Mississippi's obligation
under the feedstock supply agreement was assigned to
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Mississippi Chemical. In this connection, First Mississippi executed a
stand-by agreement pursuant to which it agreed to supply urea and anhydrous
ammonia to the Company to the extent of the assignment if Mississippi Chemical
wrongfully ceased to make deliveries. The prices paid by the Company for urea
and anhydrous ammonia relate to their market prices. In the last fiscal year,
the Company paid First Mississippi approximately $7.2 million for urea and
anhydrous ammonia.
Payments to Triad for Certain Goods and Services. The Company obtains
certain utilities and services from Triad Chemical including clarified water,
demineralized water and certain of its steam and air. In addition, the Company
has agreed to share the expenses of certain basic services required for the
operation of the Company's and Triad's facilities including, among others, a
guard force, telephone equipment, road maintenance and shared legal costs. The
Company's payment for services provided under the agreement is based on the
actual cost of such services plus an overhead fee of 25%. The agreement may be
terminated by either party without cause upon one year's notice or the shutdown
of either Triad's or the Company 's facilities. Payments for such services to
Triad in fiscal year 1995 were approximately $429,000.
PROPOSAL TO RATIFY THE SELECTION
OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
approved the retention of KPMG Peat Marwick LLP ("Peat Marwick") as independent
auditors of the Company for the fiscal year ending June 30, 1996, which
selection will be submitted to the stockholders for ratification. If the
stockholders do not ratify the Board of Directors' selection of Peat Marwick by
the affirmative vote of at least a majority of the shares of Common Stock
represented at the meeting in person or by proxy, the selection of independent
auditors will be reconsidered by the Board.
Representatives of Peat Marwick are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do
so. They will also be available to respond to appropriate questions from
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence in person or by proxy of a majority of the outstanding shares
of Common Stock of the Company is necessary to constitute a quorum. If a
quorum is present, the vote of a majority of the Common Stock present or
represented will decide all questions properly brought before the meeting,
except that directors will be elected by plurality vote. Abstentions will have
the effect of a vote against the proposal to ratify the selection of Peat
Marwick LLP as independent auditors.
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All proxies in the form enclosed received by the Board of Directors will be
voted as specified and, in the absence of instructions to the contrary, will be
voted for the election of the nominees named above and for ratification of the
selection of independent auditors.
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than the election of directors and the ratification of the
selection of independent auditors. However, if any other matters properly come
before the meeting or any adjournment thereof, it is the intention of the
persons named in the enclosed proxy to vote the shares represented by them in
accordance with their best judgment.
STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal qualified for inclusion
in the Company's proxy materials relating to the 1996 annual meeting of
stockholders must forward the proposal to the Secretary of the Company at the
address shown on the first page of this Proxy Statement in time to arrive at
the Company prior to June 1, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
L. R. McMillan, II
Secretary
Donaldsonville, Louisiana
September 29, 1995
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MELAMINE CHEMICALS, INC. PROXY
39041 HIGHWAY 18 WEST
DONALDSONVILLE, LA 70346
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MELAMINE
CHEMICALS, INC.
The undersigned hereby appoints Frederic R. Huber and Wayne D. DeLeo, or
either of them, as proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all the shares of Common Stock of Melamine Chemicals, Inc. held of record by
the undersigned on September 22, 1995 at the Annual Meeting of Stockholders to
be held on November 7, 1995, or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Proposal to elect two directors to serve a three-year term of office
expiring at the 1998 annual meeting of stockholders;
/ / FOR / / WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees listed below
(except as marked to the
contrary below)
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the
list below.
David J. D'Antoni R. Michael Summerford
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP, certified
public accountants, as independent auditors for the Company for the
fiscal year ending June 30, 1996.
/ / FOR / / AGANIST / / ABSTAIN
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR Proposals 1 and 2. The individuals named above are authorized to vote
in their discretion on any other matter that may properly come before the
meeting.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Date:__________________________, 1995
_____________________________________
SIGNATURE OF STOCKHOLDER
_____________________________________
SIGNATURE IF HELD JOINTLY
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
