<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REXENE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Charter)
REXENE CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
/ / 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>
[LOGO]
5005 LBJ FREEWAY
DALLAS, TEXAS 75244
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 1994
To the Stockholders of
REXENE CORPORATION:
Notice is hereby given that the annual meeting of stockholders of Rexene
Corporation, a Delaware corporation, will be held on Tuesday, May 24, 1994, at
9:00 a.m., local time, in the Panorama Room, 21st floor of the Westin Hotel,
13340 Dallas Parkway, Dallas, Texas 75240 for the following purposes:
1. To elect nine directors to serve until the Annual Meeting of
Stockholders in 1995; and
2. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on April 1, 1994 are
entitled to notice of, and to vote at, the meeting or any adjournment(s)
thereof.
You are cordially invited and urged to attend the meeting, but if you are
unable to attend, please sign and date the enclosed proxy and return it promptly
in the enclosed self-addressed stamped envelope. A prompt response will be
appreciated. If you attend the meeting, you may vote in person, if you wish,
whether or not you have returned your proxy. In any event, a proxy may be
revoked at any time before it is exercised.
BY ORDER OF THE BOARD OF DIRECTORS
BERNARD J. McNAMEE
SECRETARY
Dallas, Texas
April 13, 1994
<PAGE>
REXENE CORPORATION
5005 LBJ FREEWAY
DALLAS, TEXAS 75244
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 1994
SOLICITATION OF PROXIES
SOLICITATION AND REVOCABILITY OF PROXIES
This proxy statement is furnished to holders of Rexene Corporation
("Rexene", "New Rexene" or the "Company") common stock, $0.01 par value ("Common
Stock"), in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company for use at the annual meeting of stockholders of
Rexene to be held on Tuesday, May 24, 1994, at 9:00 a.m., local time, in the
Panorama Room, 21st floor of the Westin Hotel, 13340 Dallas Parkway, Dallas,
Texas 75240, and at any adjournment(s) thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders.
Shares represented by a proxy in the form enclosed, duly signed, dated and
returned to the Company and not revoked, will be voted at the meeting in
accordance with the directions given, but in the absence of directions to the
contrary, such shares will be voted for the election of the Board's nominees for
directors set forth in the foregoing notice. The Board of Directors knows of no
other matters, other than those stated in the foregoing notice, to be presented
for consideration at the meeting or any adjournment(s) thereof. If, however, any
other matters properly come before the meeting or any adjournment(s) thereof, it
is the intention of the persons named in the enclosed proxy to vote such proxy
in accordance with their judgment on any such matters. The persons named in the
enclosed proxy may also, if it is deemed to be advisable, vote such proxy to
adjourn the meeting from time to time.
Any stockholder executing and returning a proxy has the power to revoke it
at any time before it is voted by delivering to the Secretary of Rexene, 5005
LBJ Freeway, Dallas, Texas 75244, a written revocation thereof or by duly
executing a proxy bearing a later date. Any stockholder attending the annual
meeting of stockholders may revoke his proxy by notifying the Secretary at such
meeting and voting in person if he desires to do so. Attendance at the annual
meeting will not by itself revoke a proxy.
The approximate date on which this proxy statement and the form of proxy are
first sent to stockholders is April 13, 1994.
The cost of soliciting proxies will be borne by Rexene. Solicitation may be
made, without additional compensation, by directors, officers and regular
employees of Rexene in person or by mail, telephone or telegram. Rexene may also
request banking institutions, brokerage firms, custodians, trustees, nominees
and fiduciaries to forward solicitation material to the beneficial owners of the
Common Stock held of record by such persons, and Rexene will reimburse the
forwarding expense. All costs of preparing, printing, assembling and mailing the
form of proxy and the material used in the solicitation will be borne by Rexene.
SHARES OUTSTANDING AND VOTING RIGHTS
The close of business on April 1, 1994 is the record date for determination
of stockholders entitled to notice of and to vote at the meeting or any
adjournment(s) thereof. The only voting security of
1
<PAGE>
Rexene outstanding is the Common Stock, each share of which entitles the holder
thereof to one vote. At the record date for the meeting, there were outstanding
and entitled to be voted 10,500,867 shares of Common Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tabulation sets forth as of April 1, 1994, information with
respect to each person who was known by Rexene to be the beneficial owner of
more than five percent of the Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
----------------------------
NUMBER OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES(1) OF CLASS
- --------------------------------------------------------------------------- --------------- -----------
<S> <C> <C>
Executive Life Insurance Company of New York .............................. 1,147,144(2) 10.9%
390 North Broadway
Jericho, New York 11753-2167
Energy Management Corporation ............................................. 974,574(3) 9.3%
1733 Woodstead Court
The Woodlands, Texas 77380
Mr. James D. Bennett and Restructuring Capital 956,878(4) 9.1%
Associates, L.P. .........................................................
437 Madison Avenue
New York, New York 10022
M. D. Sass Investors Services, Inc. ....................................... 633,293(5) 6.0%
1133 Avenue of the Americas
New York, New York 10036
The Prudential Insurance Company of America ............................... 567,455(6) 5.4%
Prudential Plaza
Newark, New Jersey 07102-3777
Household Commercial of California, Inc. .................................. 539,682(7) 5.1%
2700 Sanders Road
Prospect Heights, Illinois 60070
<FN>
- ------------------------
(1) All shares listed are directly held with sole voting and investment power
unless otherwise indicated.
(2) Based upon information reported in a Schedule 13G filed by Kevin E. Foley,
Deputy Superintendent of Insurance of the State of New York, as
Rehabilitator of Executive Life Insurance Company of New York, with the
Securities and Exchange Commission (the "SEC") on November 25, 1992.
(3) Based upon information reported in a Schedule 13D filed by Energy
Management Corporation ("EMC") and John W. Adams with the SEC on October
13, 1992. EMC is a Colorado corporation whose principal business is the
purchase and sale of publicly and privately traded securities, accounts
receivable and other claims against distressed and troubled debtors. Does
not include 4,656 shares of Common Stock beneficially owned by John W.
Adams, a director of EMC whose business address is 767 Third Avenue, New
York, New York 10017.
(4) Based upon information reported in a Schedule 13D filed with the SEC by
Mr. Bennett and Restructuring Capital Associates, L.P ("RCA") on November
3, 1992, as amended by amendments thereto filed on December 30, 1992 and
February 7, 1993. Includes 513,032 shares held by Bennett Restructuring
Fund, L.P ("BRF"), an investment partnership whose principal address is
also 437 Madison Avenue, New York, New York 10022, and 443,846 shares held
by managed accounts over which Mr. Bennett and RCA have investment
discretion. Mr. Bennett is the sole
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
general partner of RCA, which is the sole general partner of BRF. The
principal business of both Mr. Bennett and RCA is to act as an investment
advisor. RCA is registered as an investment advisor with the SEC.
(5) Based upon information reported in a Schedule 13G filed by M. D. Sass
Investors Services, Inc. ("Sass") dated February 10, 1994. Sass has sole
investment power with respect to 124,700 of such shares and shared
investment power with respect to 508,593 of such shares.
(6) Based upon information reported in a Schedule 13G filed by The Prudential
Insurance Company of America ("Prudential") with the SEC on or about
February 11, 1993, as amended by an amendment thereto dated January 31,
1994. Includes 1,709 shares as to which Prudential has sole voting and
investment power, and 565,746 shares as to which Prudential has shared
voting and investment power, which are held for the benefit of its
clients.
(7) Based upon information reported in a Schedule 13D filed by Household
Commercial of California, Inc. on October 13, 1992, as amended by an
amendment thereto filed on October 22, 1992.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following tabulation sets forth information with respect to the
beneficial ownership of the Common Stock as of April 1, 1994 by each director of
the Company, each executive officer listed in the Summary Compensation Table
included elsewhere in this proxy statement, and all officers and directors of
the Company as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
------------------------------
NUMBER OF PERCENT
NAME SHARES (1)(2) OF CLASS
- -------------------------------------------------------------------------------------- ---------------- ---------
<S> <C> <C>
DIRECTORS
Lavon N. Anderson..................................................................... 8,916 *
Kevin N. Clowe........................................................................ 6,250 *
Arthur L. Goeschel.................................................................... 31,334 0.3%
William B. Hewitt..................................................................... 6,250 *
Ilan Kaufthal......................................................................... 6,250 *
Fred P. Rullo, Jr..................................................................... 6,250 *
Phillip Siegel........................................................................ 9,250 *
Andrew J. Smith....................................................................... 11,845 0.1%
Heinn F. Tomfohrde, III............................................................... 6,250 *
NAMED EXECUTIVE OFFICERS (EXCLUDING
ANY DIRECTOR NAMED ABOVE) AND GROUP
Kevin W. McAleer...................................................................... 5,000 *
Jack E. Knott......................................................................... 7,750(3) *
James M. Ruberto...................................................................... 5,000 *
All directors and executive officers as a group (15 persons).......................... 121,678(4) 1.2%
<FN>
- ------------------------
* Less than .1%
(1) All shares listed are directly held with sole voting and investment power
unless otherwise indicated.
(2) All shares listed are shares subject to stock options exercisable within
60 days except as follows: Mr. Goeschel -- 23,000 shares; Mr. Siegel --
3,000 shares; Mr. Smith -- 4,512 shares; and Mr. Knott -- 3,000 shares.
(3) Includes 3,000 shares held by Mr. Knott's spouse in a custodial capacity
under the Uniform Gift to Minors Act.
(4) Includes 88,166 shares subject to stock options which are exercisable
within 60 days.
</TABLE>
3
<PAGE>
ELECTION OF DIRECTORS
The business and affairs of the Company are managed by and under the
direction of the Board of Directors, which exercises all corporate powers of the
Company and establishes broad corporate policies. When the Board is not in
session, the Executive Committee may, to the extent permitted by law, exercise
the powers of the Board of Directors in the management the business and affairs
of the Company. The Executive Committee of the Board of Directors is composed of
Lavon N. Anderson, Kevin N. Clowe, Arthur L. Goeschel, Ilan Kaufthal, Phillip
Siegel and Andrew J. Smith. During 1993, the Board of Directors held 10
meetings.
The Company has standing audit, compensation and nominating committees of
the Board of Directors. The Management Development and Compensation Committee
(the "Compensation Committee"), which held four meetings during 1993, is
composed of William B. Hewitt (Chairman), Arthur L. Goeschel, Fred P. Rullo, Jr.
and Heinn F. Tomfohrde, III. The Compensation Committee exercises the powers of
the Board of Directors in connection with all matters relating to compensation
of employees, including salaries and employment agreements for executive
officers, employee benefit plans and the administration of Rexene's stock option
program.
The Audit Committee, which held three meetings in 1993, is composed of Ilan
Kaufthal (Chairman), William B. Hewitt, Kevin N. Clowe and Phillip Siegel. The
Audit Committee's primary responsibilities are to (i) recommend Rexene's
independent auditors to the Board of Directors, (ii) review with Rexene's
auditors the plan and scope of the auditor's annual audit, the results thereof
and the auditors' fees, (iii) review internal audit procedures and periodically
meet with Rexene's internal auditors to review the results of such procedures,
(iv) review Rexene's financial statements and (v) take such other action as they
deem appropriate as to the accuracy and completeness of financial records of
Rexene and financial information gathering, reporting policies and procedures of
Rexene.
The function of the Nominating Committee is to recommend nominees for
election as directors at the annual meeting of stockholders and to recommend the
candidates for election to fill vacancies on the Board as they occur. The Board
of Directors considers and takes action upon the recommendations of the
Nominating Committee. Although this committee has no formal policy on the
subject, the Board of Directors believes that any nominee recommended by a
stockholder in writing to the Secretary of the Company with complete
biographical data regarding the nominee would be considered by the Nominating
Committee. The Nominating Committee, which did not meet in 1993, is composed of
Andrew J. Smith (Chairman), Lavon N. Anderson, Ilan Kaufthal, Fred P. Rullo,
Jr., Phillip Siegel and Heinn F. Tomfohrde, III.
All duly submitted and unrevoked proxies will be voted for the nominees for
directors selected by the Board of Directors, except where authorization so to
vote is withheld. If any nominee(s) should become unavailable for election for
any presently unforeseen reason, the persons designated as proxies will have
full discretion to cast votes for another person(s) designated by the Board. On
March 25, 1994, D. George Harris resigned as a member of the Board of Directors.
In accordance with the Company's by-laws, the Board of Directors has been
reduced to nine members. The nine nominees of the Board of Directors of the
Company are named below. Each of the nominees has consented to serve as a
director if elected. Set forth below is certain information with respect to the
nominees, including their ages, their principal occupations and their
directorships of publicly held companies. All of the nominees are currently
directors of the Company and, except as otherwise indicated, have served as a
director of Rexene since September 18, 1992.
LAVON N. ANDERSON, age 58, has served as President and Chief Operating
Officer of the Company since January 1991 and as a director since June 1990.
From May 1988 to January 1991, Dr. Anderson was Executive Vice President --
Manufacturing and Technical of Rexene. Dr. Anderson has held positions in
engineering, manufacturing and research and development at Rexene since 1972.
4
<PAGE>
KEVIN N. CLOWE, age 43, has served as Assistant Treasurer and Corporate
Officer of American International Group, Inc., an international insurance and
financial services company, since January 1988, as Vice President and Corporate
Officer of American International Group Capital Corporation since 1987, and
President and Director of American International Fund Distributors, Inc. since
1988. Mr. Clowe is also a director of Concurrent Computer Corporation and
Harvest Foods, Inc.
ARTHUR L. GOESCHEL, age 72, has served as Chairman of the Board of Rexene
since March 1992. He also served as a director of Rexene from April 1988 to May
1989. Mr. Goeschel is presently retired. He was Chairman of the Board of Tetra
Technologies, Inc., a company which recycles and treats environmentally
sensitive by-product and waste water streams, and then markets end use chemicals
extracted from such streams, from November 1992 to October 1993. He is a
director of Calgon Carbon Corporation, a manufacturer of granular activated
carbon, and a member of the board of trustees of the Laurel Mutual Funds.
WILLIAM B. HEWITT, age 55, has served as a director of the Company since
February 1990. He has been Chairman of the Board and Chief Executive Officer of
Capital Credit Corporation, a receivables management company, since September
1991. Mr. Hewitt was Executive Vice President of First Manhattan Consulting
Group, a management consulting firm, from 1980 to September 1991. He is also a
director of the Union Corporation.
ILAN KAUFTHAL, age 46, has been a managing director of Wertheim Schroder &
Co. Incorporated, an investment banking firm, since 1987. He is also a director
of Formica Corporation, United Retail Group, Inc., Cambrex Corporation and Image
Business Systems, Inc.
FRED P. RULLO, JR., age 53, has been President of Freedom Chemical Company,
a specialty chemical company, since October 1991. He was President of ABB
Combustion Engineering Systems and Service Inc., a manufacturer of power plants
for utilities and industrial concerns, from September 1989 through September
1991. He is also a director of NAXCOR, Inc.
PHILLIP SIEGEL, age 51, is an independent business consultant. From December
1989 to February 1993, Mr. Siegel served as Senior Vice President of
Presidential Life Insurance Company, a company involved in the sale of life and
annuity products. During 1989, Mr. Siegel was an independent consultant with
respect to mergers and acquisitions. Mr. Siegel is a director of West Point
Stevens, Inc. and Bally's Grand, Inc.
ANDREW J. SMITH, age 52, has served as Chief Executive Officer and director
of the Company since March 1992. From December 1991 to March 1992, he was
engaged in private consulting. From June 1991 to December 1991, he was President
and Chief Operating Officer of Itex Enterprises, Inc., an environmental
remediation company. Mr. Smith also served as a consultant to the Company from
January 1991 to June 1991. Immediately prior thereto, he had been a director of
Rexene since May 1988 and the President and Chief Executive Officer of Rexene
since June 1988. Prior thereto, he had held various positions with Rexene since
1976.
HEINN F. TOMFOHRDE, III, age 60, is currently retired. From January 1987 to
his retirement in December 1991, Mr. Tomfohrde served as President and Chief
Operating Officer and a director of GAF Chemicals Corp. and its successor
company, International Specialty Products, Inc., a specialty chemicals company.
He is also a director of Sybron Chemicals Corp., Creative Technologies Group,
Inc., OSI Specialties, Inc. and McWhorter Technologies, Inc.
On July 7, 1992, the United States Bankruptcy Court for the District of
Delaware entered an order confirming a First Amended Plan of Reorganization,
which became effective on September 18, 1992 (the "Effective Date"), relating to
the Company's bankruptcy proceedings pursuant to voluntary petitions filed by
the Company's predecessor ("Old Rexene") under Chapter 11 of the United States
Bankruptcy Code on October 18, 1991. Lavon N. Anderson, Arthur L. Goeschel,
William B. Hewitt and Andrew J. Smith, directors of the Company, were also
directors of the Company's predecessor that filed such petitions.
5
<PAGE>
COMPENSATION OF DIRECTORS
FEES AND EXPENSES. In 1993, each director who is not an employee of the
Company received a fee of $1,000 for each regular meeting of the Board attended,
$1,000 for each special meeting of the Board attended which requires travel, and
$1,000 for each committee meeting attended which required travel and was not
held on the same day as a Board meeting. In addition, on each of January 1, 1993
and January 1, 1994, each director who is not an employee of the Company
received options to purchase an aggregate of 12,500 shares of Common Stock
(other than the Chairman of the Board who received options to purchase 16,667
shares of Common Stock) under the Company's 1993 Non-Qualified Stock Option Plan
for Outside Directors. Such 1993 and 1994 options are exercisable at $0.63 and
$0.43 per share, respectively, equal to the average of the fair market value per
share of Common Stock for the 20 business days immediately preceding the date of
grant, less $2.40. The Company also reimburses directors for travel, lodging and
related expenses they may incur in attending Board and committee meetings.
CONSULTING AGREEMENT. By agreement dated March 16, 1992, Rexene has agreed
to compensate Arthur L. Goeschel, Chairman of the Board, in addition to his
normal director fees, the sum of $2,750 per day plus expenses for each day (over
five days per quarter) that he consults with respect to Company matters. Under
the agreement, the Company paid Mr. Goeschel $107,250 in consulting fees in
1993. Mr. Goeschel is not entitled to any employee benefits, or to participate
in any benefit plans maintained by Rexene for its employees, other than those in
which non-employee directors are eligible to participate.
EXECUTIVE COMPENSATION
The following is a report submitted by members of the Compensation Committee
addressing the Company's compensation policy as it related to the executive
officers for fiscal 1993.
The report of the Compensation Committee appearing in this proxy statement
and the information herein under "Executive Compensation -- Performance Graphs"
shall not be deemed to be "soliciting material" or to be "filed" with the SEC or
subject to the SEC's proxy rules, or to the liabilities of Section 18 of the
1934 Act, and such information shall not be deemed to be incorporated by
reference into any filing made by the Company under the Securities Act of 1933
or the 1934 Act.
REPORT OF THE MANAGEMENT DEVELOPMENT
AND COMPENSATION COMMITTEE
GENERAL
The Management Development and Compensation Committee (the "Committee") of
the Board of Directors (the "Board") of the Company has the responsibility to
establish overall policy for compensation of executive officers of the Company,
to recommend to the Board of Directors of the Company executive compensation
plans for the executive officers, to administer such plans and to recommend to
the Board specific levels of compensation to be paid to the executive officers.
The Committee also has the sole authority to determine the timing, pricing and
amount of any award of any rights to any executive officer to acquire common
stock of the Company.
The Committee's long-term objective is to set executive compensation at
levels which (i) link executive compensation to company performance and
stockholder value, and (ii) are sufficient to attract, motivate and retain
qualified individuals for executive positions. In 1993, the Company's executive
compensation programs consisted of (i) a base salary, (ii) a bonus opportunity
based upon Company financial performance, and (iii) stock options granted under
the Company's 1993 Non-Qualified Stock Option Plan.
In view of the current levels of executive compensation, the Company has not
deemed it necessary to consider or adopt a policy concerning executive
compensation exceeding $1 million per year.
6
<PAGE>
BASE SALARY
In establishing base salaries for executives for 1993 the Committee reviewed
executive compensation analyses prepared by the Company's independent
compensation consultant, Towers Perrin. Towers Perrin, upon whom the Company
relies to provide reliable compensation data, prepares surveys of executive
compensation ranges at approximately 100 chemical and industrial concerns
selected by Towers Perrin (the "Compensation Peer Group"). The Compensation Peer
Group is not identical to the broad based peer groups to which stock performance
of the Company is compared elsewhere in this proxy statement. Many companies in
the Compensation Peer Group are significantly larger than the Company. Using the
raw data collected and applying a single regression analysis calculation, Towers
Perrin estimates pay level ranges for executive and management positions that it
believes would apply at companies similar in size to the Company.
Based upon this survey the Committee determined that executive officers'
1993 base salaries were within the middle third of the range of base salaries
for executive officers holding comparably responsible positions at other
companies in the Compensation Peer Group. In reliance upon such information and
the recommendation of the chief executive officer, the Committee recommended to
the Board that no salary increases be given to any executive officers, including
the chief executive officer, in 1993. This decision was influenced by an effort
to control costs in view of the Company's financial difficulties and the
November 1992 salary increases awarded to the executive officers.
BONUS
An integral part of executive officer cash compensation is the use of annual
cash bonuses to reward executive officers for their individual and team results
when Company performance meets or exceeds specified targets adopted by the
Committee on an annual basis. Such targets may vary from year to year depending
upon those elements of Company performance which the Board deems of special
significance in a particular fiscal year, and the competitive environment in
which the Company operates.
The Committee believes that linking a substantial portion of executive
officer cash compensation to annual Company financial performance provides a
meaningful incentive to such officers to enhance Company performance.
In 1993 the Committee recommended and the Board approved a cash bonus plan
(the "1993 Bonus Plan") that would provide all executive officers, including the
chief executive officer, under a formula set out in the 1993 Bonus Plan, the
opportunity to receive amounts ranging between 30% and 100% of their 1993 base
salary if designated operating cash flow targets for 1993 were achieved or
exceeded. The specific percentages for each executive officer varied depending
upon his position and responsibilities and the percentage by which the targeted
operating cash flow amount was exceeded. The chief executive officer's bonus
opportunity ranged between 37.5% and 100% of his base salary. No bonus was
payable if the actual 1993 operating cash flow did not equal at least 90% of the
targeted amount. Because the Company did not achieve in 1993 the threshold
operating cash flow amount, no bonus was paid to any executive officer for 1993.
We recognize that 1993 was a very difficult year in the industry in which the
Company competes and that many competing companies also reported no or negative
growth in earnings.
STOCK OPTIONS
The retention of executive officers is also fostered by utilizing forms of
compensation which either increase in value or only have value in relation to
longer term performance and growth of the Company and if the executive officer
remains with the Company for specified periods of time.
In 1993 the Committee acknowledged that options granted by the Company to
executive officers and other key employees prior to its bankruptcy had little or
no future value and that new options should be authorized and awarded to key
employees, including executive officers, to further the goals of increasing the
value of the Company's stock and of retaining key qualified employees.
Accordingly, the Board approved and the stockholders adopted at the annual
meeting on May 27, 1993 a key
7
<PAGE>
employee non-qualified stock option plan that would authorize the grant over a
three-year period of options to key employees of the Company to purchase at the
market price at the time of grant of up to 700,000 shares of Common Stock
(approximately 7% of the then-outstanding common stock). The value of such
options as long-term incentive compensation depends on the long-term success of
the Company and aligns such executive officer interests with those of other
stockholders of the Company.
The Committee in 1993 awarded options to key employees to purchase an
aggregate of 207,000 shares of Common Stock. Of these, the eight executive
officers were awarded options to purchase 106,000 shares. The chief executive
officer was awarded options to purchase 22,000 shares. The number of options
awarded in 1993 to each key employee, including the chief executive officer and
other executive officers, was based upon the position level of such employee in
the Company with more senior level employees receiving a larger number of
options. The options become exercisable in equal increments over a three-year
period from the date of grant (May 27, 1993).
April 4, 1994 MANAGEMENT DEVELOPMENT AND COMPENSATION
COMMITTEE
William B. Hewitt, Chairman
Arthur L. Goeschel
Fred P. Rullo, Jr.
Heinn F. Tomfohrde, III
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning the
compensation paid or awarded to the Chief Executive Officer of the Company and
the four other highest paid executive officers of the Company in 1993 (the
"named executive officers") for the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------
OPTIONS
(NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION(1) YEAR SALARY BONUS SHARES) COMPENSATION
- ------------------------------------------------- --------- -------------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Andrew J. Smith, 1993 $ 350,000 -- 22,000 $ 4,342(2)
Chief Executive Officer 1992 235,500 $ 25,000 -- 3,153
1991 175,500(3) -- -- 216
Lavon N. Anderson, President 1993 285,000 -- 17,000 6,299(4)
and Chief Operating Officer 1992 260,000 44,000 -- 5,332
1991 255,000 -- -- 14,993
Kevin W. McAleer, Executive Vice 1993 216,000 -- 12,000 2,209(5)
President and Chief Financial Officer 1992 202,500 32,000 -- 2,739
1991 200,000 -- -- 11,596
Jack E. Knott, Executive Vice 1993 205,000 -- 12,000 2,525(6)
President -- Sales and Marketing 1992 194,000 25,000 -- 2,621
1991 190,000 -- -- 10,871
James M. Ruberto, Executive Vice 1993 205,000 -- 12,000 3,303(7)
President and President of 1992 192,500 25,000 -- 3,969
Consolidated Thermoplastics 1991 190,000 -- -- 11,619
Company, a division of Rexene ("CT Film")
<FN>
- ------------------------
(1) Summary Compensation Table does not include Arthur L. Goeschel, Chairman
of the Board of the Company, who received approximately $107,250 in fees
from the Company for consulting
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
services in 1993. Mr. Goeschel is not an employee of the Company. For more
information relating to the Company's consulting agreement with Mr.
Goeschel, see "Election of Directors -- Compensation of Directors."
(2) Consists of Company contributions to defined contribution plans of $1,750
and $1,641 in 1993 and 1992, respectively, and imputed income for life
insurance of $2,592, $1,512 and $216 for 1993, 1992 and 1991,
respectively.
(3) Represents amount paid to Mr. Smith pursuant to a consulting arrangement
for services rendered from January to June 1991.
(4) Consists of Company contributions to defined contribution plans of $2,249,
$2,182 and $11,843 in 1993, 1992 and 1991, respectively, and imputed
income for life insurance of $4,050 in 1993 and $3,150 in each of 1992 and
1991.
(5) Consists of Company contributions to defined contribution plans of $1,434,
$2,025 and $10,870 in 1993, 1992 and 1991, respectively, and imputed
income for life insurance of $775, $714, and $726 in 1993, 1992 and 1991,
respectively.
(6) Consists of Company contributions to defined contribution plans of $2,050,
$2,182 and $10,433 in 1993, 1992 and 1991, respectively, and imputed
income for life insurance of $475, $439, and $4,387 in 1993, 1992 and
1991, respectively.
(7) Consists of Company contributions to defined contribution plans of $2,050,
$2,812 and $10,433 in 1993, 1992 and 1991, respectively, and imputed
income for life insurance of $1,253, $1,157 and $1,186 in 1993, 1992 and
1991, respectively.
</TABLE>
OPTION GRANTS
The following table shows information with respect to grants of stock
options pursuant to the Company's 1993 Non-Qualified Stock Option Plan during
1993 to the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE ON MAY 27, 2003
AT ASSUMED RATES
PERCENTAGE OF OF STOCK PRICE
OPTIONS TOTAL OPTIONS APPRECIATION(2)
(SHARES) GRANTED IN EXERICSE EXPIRATION ----------------------
NAME GRANTED(1) 1993 PRICE DATE 5% 10%
- --------------------------------------- ----------- --------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. Smith........................ 22,000 10.6% $ 3.43 5/27/03 $ 47,500 $ 120,300
Lavon N. Anderson...................... 17,000 8.2 3.43 5/27/03 36,700 92,900
Kevin W. McAleer....................... 12,000 5.8 3.43 5/27/03 25,900 65,600
Jack E. Knott.......................... 12,000 5.8 3.43 5/27/03 25,900 65,600
James M. Ruberto....................... 12,000 5.8 3.43 5/27/03 25,900 65,600
<FN>
- ------------------------
(1) All of the options granted become exercisable in equal installments of
one-third each on the first, second and third anniversary dates of the
date of grant.
(2) The assumed five percent and ten percent rates of stock price appreciation
are specified by the proxy rules and do not reflect expected actual
appreciation. The amounts shown represent the assumed value of the stock
options (less exercise price) at the end of the ten-year period beginning
on the date of grant and ending on the option expiration date.
</TABLE>
OPTION EXERCISES AND HOLDINGS
No options to purchase Common Stock were exercised in 1993. The following
table sets forth certain information with respect to the unexercised options to
purchase Common Stock held at December 31, 1993 by each of the Company's named
executive officers. The exercise price of outstanding options reported below
range from $3.43 to $304 (after giving effect to the 40 to 1 reverse stock split
pursuant to the Company's 1992 reorganization) per share. Thus, the exercise
price of such
9
<PAGE>
options exceeds $3.00, the market value of the Common Stock as of December 31,
1993 and the options had no ascertainable value at such date. The following
table sets forth the number of unexercised options at December 31, 1993:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS AT 12/31/93
(SHARES)
--------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------ ----------- -------------
<S> <C> <C>
Andrew J. Smith................................................... 0 22,000
Lavon N. Anderson................................................. 3,250 17,000
Kevin W. McAleer.................................................. 1,000 12,000
Jack E. Knott..................................................... 750 12,000
James M. Ruberto.................................................. 1,000 12,000
</TABLE>
PENSION BENEFITS
The following table shows the annual pension benefits which would be payable
under the Rexene Retirement Plan for retirement at age 65 for various levels of
final average annual pay and years of service.
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR YEARS OF SERVICE(1)
-----------------------------------------------------
FINAL AVERAGE PAY(2) 5 10 15 20 25
- --------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$100,000..................................... $ 6,432 $ 12,864 $ 19,296 $ 25,728 $ 32,161
150,000..................................... 9,932 19,864 29,796 39,728 49,661
200,000..................................... 13,432 26,864 40,296 53,728 67,161
235,840..................................... 15,941 31,882 47,823 63,764 79,705
<FN>
- ------------------------
(1) Benefit amounts under the Rexene Retirement Plan are based on an
employee's vested percentage, average annual compensation and number of
years of benefit service and are not subject to any deduction for social
security benefits or other offset amounts. Upon retirement at age 65 (or
earlier under certain circumstances) an employee is entitled, subject to
various Code limitations, to annual pension benefits equal to 0.9% of the
employee's average annual base salary during the highest paid three
consecutive years of the employee's final 10 calendar years of service
("Final Average Pay") multiplied by years of service under the Retirement
Plan, plus 0.5% of the employee's Final Average Pay which exceeds an
average, computed under Internal Revenue Service rules, of the employee's
wages taken into account for social security purposes, multiplied by the
number of years of the employee's participation in the Retirement Plan (up
to a maximum of 35 years).
(2) Under Section 401 of the Code, the highest annual salary on which benefits
can be calculated is $235,840 for 1993 and $150,000 for 1994.
(3) For purposes of calculation of benefits, only years of service since 1984
count in the benefits formula.
</TABLE>
As of December 31, 1993, the named executive officers had the following
credited years of service under the Rexene Retirement Plan: Mr. Smith -- ten
years; Dr. Anderson -- ten years; Mr. McAleer -- three years; Mr. Knott -- eight
years; and Mr. Ruberto -- four years.
EXECUTIVE SECURITY PLAN
The Executive Security Plan of the Company (the "Security Plan") provides
retirement and death benefits to certain key employees of the Company.
Participants in the Security Plan are selected and the Security Plan is
administered by a committee (the "Security Plan Committee"), the members of
which are selected by the chief executive officer of the Company. The Company
has considered terminating the Security Plan, but no action has been taken to
date. At the present time, it is not expected that any additional employees will
be selected for participation in the Security Plan. The Security Plan is
unfunded except that the Company purchases life insurance covering the
participants in the Security Plan. All of a participant's rights under the
Security Plan terminate if the participant's
10
<PAGE>
employment with the Company terminates for any reason other than retirement or
death. Benefits are payable to a participant upon his retirement or to the
participant's designated beneficiary upon the participant's death. Currently,
only two executive officers of the Company, Dr. Anderson and Mr. Knott,
participate in the Security Plan.
Key employees who are participants in the Security Plan receive (i) a death
benefit in the amount of $300,000 in the event of death before age 65 or early
retirement, and (ii) a supplemental annual retirement benefit (the "Supplemental
Benefit") at age 65 equal to 40% of the participant's salary at the time of
retirement (less benefits under the Retirement Plan and any other private
pension plan) but not less than a $12,000 annual minimum payment. The
Supplemental Benefit is paid in 180 monthly installments to the participant or
his beneficiaries.
Under the Security Plan, a lump-sum benefit of $300,000 is payable in the
event of death to the beneficiaries of Dr. Anderson and Mr. Knott. The annual
Supplemental Benefits payable upon retirement at age 65 based upon salary levels
in effect at December 31, 1993 were $114,000 to Dr. Anderson and $82,000 to Mr.
Knott, less any benefits under the Retirement Plan and any other private pension
plan.
11
<PAGE>
PERFORMANCE GRAPHS
The following graphs show comparisons of cumulative stockholder returns for
the Common Stock in comparison to returns for the Standard and Poor's 500 Index
and Standard and Poor's Chemical Index of companies. The first graph compares
cumulative stockholder returns since September 18, 1992, the date when the
Company emerged from bankruptcy. The second graph compares cumulative
stockholder returns for the 5 year period since 1988.
The following graph shows a comparison of cumulative total stockholder
returns for the Common Stock of New Rexene, the Standard & Poor's 500 Index and
the Standard & Poor's Chemical Index since the Effective Date.
COMPARISON OF CUMULATIVE SHAREHOLDER TOTAL RETURN(1)
AMONG NEW REXENE, S&P 500 TOTAL RETURN INDEX AND
S&P CHEMICAL INDEX(2)
<TABLE>
<CAPTION>
1988 1989 1990 1991 SEP-92 1992 1993
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
New Rexene (CS)......................... 100 129 96
S&P 500................................. 100 105 116
S&P Chemicals........................... 100 103 116
<FN>
- ------------------------
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
the Effective Date in Common Stock of Rexene, the Standard & Poor's 500
Index and the Standard & Poor's Chemical Index.
(2) Fiscal year ending December 31.
(3) No comparison is presented for periods prior to September 1992 when Rexene
emerged from bankruptcy because such numbers would not be meaningful.
</TABLE>
12
<PAGE>
The following graph shows a comparison of cumulative total stockholder
returns for the common stock of Old Rexene, the Standard & Poor's 500 Index and
the Standard & Poor's Chemical Index for the years indicated as prescribed by
the SEC's rules.
COMPARISON OF CUMULATIVE SHAREHOLDER TOTAL RETURN(1)
AMONG OLD REXENE, S&P 500 TOTAL RETURN INDEX AND
S&P CHEMICAL INDEX(2)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Old Rexene (CS)......................... 100 32 13 7 1 1
S&P 500................................. 100 132 127 166 179 197
S&P Chemicals........................... 100 129 110 143 157 175
<FN>
- ------------------------
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
August 1, 1988 on common stock of Old Rexene, the Standard & Poor's 500
Index and the Standard & Poor's Chemical Index.
(2) Fiscal year ending December 31.
</TABLE>
13
<PAGE>
CERTAIN TRANSACTIONS
A son of Andrew J. Smith, the Chief Executive Officer and a director of the
Company, became a Vice President of Orion Pacific, Inc. ("Orion") in 1990 and a
shareholder of Orion in 1993. In August 1993 the son of Mr. Smith resigned as an
officer and employee of Orion. Pursuant to contractual arrangements originated
in 1988, (i) the Company sells to Orion certain (a) discarded by-products which
Orion extracts from Company landfills and (b) scrap products, and (ii) Orion
packages and processes a portion of the Rextac amorphous polyalphaolefins
("APAO") manufactured by the Company at its plant in Odessa, Texas. During the
year ended December 31, 1993, the Company sold approximately $283,000 of such
by-products and scrap products to Orion in the ordinary course of business. For
the same period, the Company purchased approximately $1,551,000 of APAO
processing and packaging services and miscellaneous materials from Orion. In
1990, Orion sold its APAO processing and packaging technology to the Company for
$750,000. The Company has also agreed to pay Orion an additional $250,000 per
plant for each APAO plant utilizing the technology which the Company builds
outside the United States (excluding a certain joint venture plant in Japan).
The Company currently licenses this technology to Orion so that Orion can
continue providing these services to the Company.
Ilan Kaufthal, a director of the Company, is a managing director of Wertheim
Schroder & Co. Incorporated ("Wertheim"). In June 1990, an unofficial committee
of holders of debt securities of the Company retained Wertheim as its financial
advisor at the Company's expense. In November 1991, the official committee of
unsecured creditors in the Company's bankruptcy proceeding also retained
Wertheim as its financial advisor at the Company's expense. Pursuant to these
engagements, the Company paid Wertheim fees of $860,000 and $1,075,000 for 1992
and 1991, respectively. In December 1992 the Company retained Wertheim as its
financial advisor in respect to the adoption of a share purchase rights plan and
paid Wertheim approximately $78,000 in 1993 for such services.
The American International Group, Inc. ("AIG") of which Kevin Clowe, a
director of the Company, is a corporate officer provides various types of
insurance for the Company. During 1993 the Company paid $2,816,483 in premiums
and fees to subsidiaries of AIG. In addition, a subsidiary of AIG is the
beneficiary of a Company letter of credit in the amount of $1,230,515 to ensure
payment of premiums.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act requires directors and officers of the
Company, and persons who own more than 10 percent of the Common Stock, to file
with the SEC initial reports of ownership and reports of changes in ownership of
the Common Stock. Directors, officers and more than 10 percent stockholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company and written representations
that no other reports were required, during the year ended December 31, 1993,
all Section 16(a) filing requirements applicable to its directors, officers and
more than 10 percent beneficial owners were complied with except that a Form 4
report relating to the sale of 15 shares of Common Stock in 1993 by Geff Perera
was not timely filed. In addition, an amended Form 3 has been filed by Mr. Smith
to reflect his stock holding at the time he rejoined the Company in 1992, and an
amended Form 4 has been filed by Mr. Goeschel to reflect an error in an earlier
filing which overstated the number of shares acquired in December 1992.
EMPLOYMENT AGREEMENTS
Andrew J. Smith, Chief Executive Officer and a director of the Company,
Lavon N. Anderson, President and Chief Operating Officer and a director of the
Company, Kevin W. McAleer, Executive Vice President and Chief Financial Officer
of the Company, Jack E. Knott, Executive Vice President -- Sales and Market
Development of the Company, James M. Ruberto, Executive Vice President of Rexene
and President -- CT Film, Jonathan Wheeler, Senior Vice President --
Administration, and Bernard J. McNamee, Vice President, Secretary and General
Counsel of the Company, are each parties to termination agreements entered into
in 1993. Each termination agreement provides that in the
14
<PAGE>
event the employee is terminated without cause (as defined in the agreement)
after a change in control of Rexene or in the event such employee voluntarily
resigns his employment in certain limited circumstances after such a change in
control, Rexene is obligated to pay the employee within 10 business days after
the effective date of such termination, a lump sum cash severance equal to three
times his then current annual base salary less $1.00. The agreements
additionally provide that in the event the employee is terminated without cause
by Rexene without a change in control, Rexene is obligated to pay the employee
within 10 business days of such termination a lump sum cash severance amount
equal to one year of such employee's then current base salary. "Change in
control" is defined in the relevant agreements to generally include: (i) a
change in at least two-thirds of the members of the Board of Directors, whether
as the result of a merger, reorganization or otherwise; (ii) the acquisition by
a related group of persons of beneficial ownership of at least 20% of the Common
Stock; (iii) the liquidation or dissolution of the Company; or (iv) a
determination by a majority of the directors of the Company that such a change
of control has occurred or is imminent.
AUDITORS
Price Waterhouse, which has served as the Company's independent public
accountants since October 1990 has been appointed by the Board of Directors to
audit the financial statements of the Company for the year ending December 31,
1994. Such appointment will not be submitted to stockholders for ratification or
approval. The representatives of Price Waterhouse are expected to be present at
the meeting to respond to appropriate questions from the stockholders and will
be given the opportunity to make a statement should they desire to do so.
OTHER MATTERS
The Board of Directors of the Company does not intend to present any other
matters at the meeting and knows of no other matters which will be presented.
However, if any other matters come before the meeting, it is the intention of
the persons named in the enclosed proxy to vote in accordance with their
judgment on such matters.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's proxy materials for
the 1995 Annual Meeting of Stockholders, stockholder proposals must be received
at the Company's principal executive office in Dallas, Texas no later than
December 13, 1994.
FORM 10-K ANNUAL REPORT
The Company will provide without charge to each person from whom a proxy is
solicited by this proxy statement, upon the written request of any such person,
a copy of the Company's annual report on Form 10-K, including the financial
statements and the schedules thereto, required to be filed with the Securities
and Exchange Commission pursuant to Section 13(a)-1 under the 1934 Act for the
Company's most recent fiscal year. Requests should be directed to the Secretary,
Rexene Corporation, 5005 LBJ Freeway, Occidental Tower, Dallas, Texas 75244.
15
<PAGE>
REXENE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 24, 1994
The undersigned hereby appoints Arthur L. Goeschel and Andrew J. Smith as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote as designated below, all the shares of common
stock of Rexene Corporation held of record by the undersigned on April 1,
1994, at the Annual Meeting of Stockholders to be held on May 24, 1994 at
9:00 a.m. local time, in the Panorama Room, 21st Floor of the Westin Hotel,
13340 Dallas Parkway, Dallas, Texas 75240, and at any adjournment(s) thereof.
Receipt of the Notice of Annual Meeting of Stockholders and the Proxy
Statement in connection therewith, each dated April 13, 1994, and of a 1993
Annual Report to Stockholders are hereby acknowledged.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS HEREON. IN THE
ABSENCE OF SUCH SPECIFICATIONS, THE PROXY WILL BE VOTED FOR THE ELECTION TO
THE BOARD OF DIRECTORS OF THE NOMINEES LISTED ON THIS PROXY AND IN THE
DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE.
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such common stock and hereby ratifies and confirms all
action that said proxies, their substitutes, or any of them, might lawfully
take in accordance with the terms hereof.
(Continued and to be signed on reverse side)
<PAGE>
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Directors FOR / / WITHHELD / /
For except vote WITHHELD from the following nominee(s):
________________________________________________________
NOMINEES: Lavon N. Anderson, Kevin N. Clowe, Arthur L. Goeschel,
William B. Hewitt, Ilan Kaufthal, Fred P. Rullo, Jr., Philip Siegel,
Andrew J. Smith, Heinn F. Tomfohrde, III
2. In their discretion, the proxies are authorized to vote with respect to
any other matter which may properly come before the meeting or any
adjournment(s) thereof.
Dated __________________________ 1994
_____________________________________
_____________________________________
_____________________________________
Signature(s)*
*When signing on behalf of a corporation,
partnership, estate, trust or in any
representative capacity, please sign name
and title. For joint accounts each joint
owner must sign.
