<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
RTI INTERNATIONAL METALS, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(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:
----------------------------------------------------
[ X ] No fee required
<PAGE> 2
RTI LOGO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY
STATEMENT
APRIL 28, 2000
1:00 P.M. EASTERN DAYLIGHT TIME
Holiday Inn Conference Center
7410 South Avenue
Boardman, Ohio
<PAGE> 3
RTI LOGO
1000 Warren Avenue
Niles, Ohio 44446
April 3, 2000
Dear RTI Shareholder:
You are cordially invited to attend our 2000 Annual Meeting of Shareholders on
April 28, 2000, in the Holiday Inn Conference Center, 7410 South Avenue,
Boardman, Ohio.
The meeting will begin promptly at 1:00 p.m. Eastern Daylight Time with a report
on Company operations. We will then elect directors and independent accountants.
Whether or not you plan to attend, it is important that you vote your shares.
Please sign, and return your proxy card as soon as possible.
We look forward to seeing as many of you as possible at the 2000 Annual Meeting.
Sincerely,
/s/ ROBERT M. HERNANDEZ
ROBERT M. HERNANDEZ
Chairman of the Board
/s/ TIMOTHY G. RUPERT
TIMOTHY G. RUPERT
President & Chief Executive Officer
<PAGE> 4
TABLE OF CONTENTS
Notice of Annual Meeting.................................................... 3
Proxy Statement............................................................. 4
General Information...................................................... 4
The Board of Directors................................................... 5
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS............................ 6
PROPOSAL NO. 2 -- ELECTION OF INDEPENDENT ACCOUNTANTS.............. 8
Security Ownership......................................................... 9
Executive Compensation.................................................... 10
Stock Performance Graph................................................... 13
Pension and Employment Contract Information............................... 13
Other Information......................................................... 16
<PAGE> 5
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF RTI INTERNATIONAL METALS, INC.
TIME:
1:00 p.m., Eastern Daylight Time
DATE:
April 28, 2000
PLACE:
Holiday Inn Conference Center
7410 South Avenue
Boardman, Ohio
PURPOSE:
- Elect directors
- Elect independent accountants
- Conduct other business if properly raised
Only shareholders of record on March 1, 2000 may vote at the
meeting.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE, AND RETURN
YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
/S/ RICHARD M. HAYS
RICHARD M. HAYS
Secretary
April 3, 2000
3
<PAGE> 6
PROXY STATEMENT
GENERAL INFORMATION
- --------------------------------------------------------------------------------
- - WHO MAY VOTE?
Shareholders of RTI as of the close of business on the record date, March 1,
2000, are entitled to vote at the Annual Meeting.
- - WHAT MAY I VOTE ON?
You may vote on:
the election of nominees to serve on our Board of Directors and
the election of our independent auditors for 2000.
- - HOW DOES THE BOARD RECOMMEND I VOTE?
The Board recommends that you vote FOR each of the nominees and FOR
PricewaterhouseCoopers LLP as our independent accountants for 2000.
- - HOW DO I VOTE?
Sign and date each proxy card you receive and return it in the envelope
provided. If you return your signed proxy card but do not mark the boxes showing
how you wish to vote, your shares will be voted FOR the two proposals. You have
the right to revoke your proxy at any time before the meeting by:
(1) notifying RTI's Secretary;
(2) voting in person; or
(3) returning a later-dated proxy card.
- - WHAT VOTES ARE NEEDED?
The director candidates receiving the most votes will be elected to the Board.
Election of the independent accountants requires the favorable vote of a
majority of the votes cast. Only votes for or against a proposal count.
Abstentions and broker non-votes do not count for voting purposes. Broker
non-votes occur when a broker returns a proxy but does not have authority to
vote on a particular proposal.
4
<PAGE> 7
THE BOARD OF DIRECTORS
The business and affairs of RTI are under the general direction of the Board of
Directors. The Board presently consists of ten members, eight of whom are
neither officers nor employees of RTI or its subsidiaries. The Board met six
times during 1999.
The Board will consider recommendations by shareholders for nominees for
election as director. Recommendations, together with the nominee's
qualifications and consent to be considered as a nominee, should be sent to the
Secretary of RTI for presentation to the Board of Directors.
There are three principal committees of the Board of Directors. Committee
membership, the functions of the committees and the number of meetings held
during 1999 are described below.
EXECUTIVE COMMITTEE
The members of the Executive Committee are Robert M. Hernandez (Chairman), Craig
R. Andersson, Charles C. Gedeon, John H. Odle and Timothy G. Rupert.
The Executive Committee assists the Board in the discharge of its
responsibilities and may act on behalf of the Board when emergencies or
scheduling make it difficult to convene the Board. All actions taken by the
Committee must be reported at the Board's next meeting. During 1999, the
Executive Committee held no meetings.
AUDIT COMMITTEE
The members of the Audit Committee, all of whom are non-employee directors, are
Wesley W. von Schack (Chairman), Craig R. Andersson, Daniel I. Booker and Edith
E. Holiday.
The Audit Committee recommends the independent accountants to be nominated by
the Board for election by the shareholders and reviews the independence of the
accountants. It also approves the scope of the annual audit activities, approves
the audit fee payable to the independent accountants, reviews audit results and
regularly meets with RTI's internal auditors. The Committee monitors
developments in accounting standards and principles followed by RTI in its
financial reports and discusses with management the system of internal
accounting controls. The independent accountants have full and free access to
the Committee and may meet with it, with or without management being present, to
discuss all appropriate matters. The Committee has a written charter. The
members of the Committee have reviewed the charter and believe the Committee has
complied with it in 1999. The Audit Committee held three meetings during 1999.
STOCK PLAN COMMITTEE
The members of the Stock Plan Committee, all of whom are non-employee directors,
are Craig R. Andersson, Neil A. Armstrong, Daniel I. Booker, Ronald L. Gallatin,
Edith E. Holiday and Wesley W. von Schack.
The Stock Plan Committee is responsible for administration of RTI's
stock-related plans, including the 1989 Stock Option Incentive Plan, the 1989
Employee Restricted Stock Award Plan and the 1995 Stock Plan. The Stock Plan
Committee held two meetings during 1999.
COMPENSATION OF DIRECTORS
RTI employees receive no extra pay for serving as a director. Non-employee
directors receive an annual retainer plus a fee for each Board or committee
meeting attended, except that no fee is payable for attending a committee
meeting if there is a Board meeting on the same day. The annual retainer is
$30,000 (except for the Chairman) and the meeting fee $1,000. For his services
as non-employee Chairman, commencing April 1, 1999, Mr. Hernandez receives an
annual retainer of $75,000: $60,000 in RTI common stock and $15,000 in cash. The
non-employee committee chairman retainer is $3,000. One-half of the annual
retainer payable to non-employee directors and to non-employee committee
chairmen is paid in RTI's Common Stock. In 1999, the Common Stock utilized for
this purpose and for the Chairman's annual retainer was based on $20.72, the
market value of the stock on August 3, 1999.
5
<PAGE> 8
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
RTI's directors are elected for one year terms. Non-employee directors may not
stand for election after age 72. Employee directors leave the Board when they
retire from RTI.
The Board has nominated the ten current directors for election. Each nominee for
election has previously been elected by the shareholders except for Edith E.
Holiday who was elected by the Board in July, 1999. Of the ten individuals who
are nominees for election, two are current RTI officers and the remaining eight
have high level executive or professional experience. If any nominee is unable
to serve, your proxy may be voted for another person designated by the Board.
NOMINEES FOR DIRECTOR
CRAIG R. ANDERSSON Age: 62
RETIRED VICE-CHAIRMAN Director since 1990
ARISTECH CHEMICAL CORPORATION
(CHEMICAL PRODUCER)
Mr. Andersson retired as a director and Vice-Chairman of Aristech Chemical
Corporation on April 30, 1995. Previously, he was President and Chief Operating
Officer, a position he had held since December, 1986. He is a director of
Albermarle Corporation and Duquesne University. He is a member of the American
Institute of Chemical Engineers and Alpha Chi Sigma (a professional chemical
society) and has served on the boards and executive committees of The Society of
the Chemical Industry, the Chemical Manufacturers Association, the Pennsylvania
Business Roundtable and the Greater Pittsburgh Chamber of Commerce. He has a BS
degree in chemical engineering from the University of Minnesota and did graduate
work in the same discipline at the University of Delaware.
NEIL A. ARMSTRONG Age: 69
CHAIRMAN, AIL SYSTEMS, INC. Director since 1990
(A DEFENSE ELECTRONICS COMPANY)
Mr. Armstrong received a BS degree in aeronautical engineering from Purdue
University and an MS degree in aerospace engineering from the University of
Southern California. For 17 years he served with the National Aeronautics and
Space Administration and its predecessor agency as engineer, test pilot,
astronaut and administrator. From 1971 to 1979 he was professor of aerospace
engineering at the University of Cincinnati. He became Chairman of Cardwell
International, Ltd. in 1980; Chairman of CTA, Inc. in 1982; and Chairman of AIL
Systems, Inc. in 1989. He is a director of Cinergy Corporation, Cordant
Technologies Inc., Milacron, Inc. and USX Corporation. He is a member of the
National Academy of Engineering.
DANIEL I. BOOKER Age: 52
MANAGING PARTNER Director since 1995
REED SMITH SHAW & MCCLAY LLP
(LAW FIRM)
Mr. Booker is a partner of the law firm of Reed Smith Shaw & McClay LLP. Since
1992, he has been Managing Partner, or chief executive, of Reed Smith. He
received an undergraduate degree from the University of Pittsburgh and a law
degree from the University of Chicago. He is a member of the District of
Columbia, Pennsylvania and U.S. Supreme Court bars. Mr. Booker is an officer
and/or director of Pittsburgh Regional Alliance, the Pittsburgh Civic Light
Opera, United Way of Southwestern Pennsylvania and other community and
professional organizations.
6
<PAGE> 9
RONALD L. GALLATIN Age: 54
RETIRED MANAGING DIRECTOR Director since 1996
LEHMAN BROTHERS INC.
(INVESTMENT BANKING FIRM)
Mr. Gallatin served as a Managing Director of Lehman Brothers Inc., where he was
a member of the Firm's Operating Committee and its Director of Corporate
Strategy and Product Development until his retirement on December 31, 1995.
During his 24 years with Lehman, Mr. Gallatin had various senior roles in both
its investment banking and capital markets divisions and was responsible for a
series of financial innovations, most notably Zero Coupon Treasury Receipts,
Money Market Preferred Stock and Targeted Stock. He is currently a Senior
Advisor to Lehman Brothers Inc. and a director of CNA Financial Corporation and
The First Mexico Income Fund, N.V.
A graduate of New York University, and both Brooklyn and New York University Law
Schools, Mr. Gallatin has BS, JD and LLM (Taxation) degrees and is a Certified
Public Accountant.
CHARLES C. GEDEON Age: 59
EXECUTIVE VICE PRESIDENT-RAW MATERIALS Director since 1991
AND DIVERSIFIED BUSINESSES
U.S. STEEL GROUP, USX CORPORATION
Mr. Gedeon joined USX in 1986 as Vice President-Raw Materials and President of
U.S. Steel Mining Co., Inc. He was promoted to Senior Vice President-Related
Resources for USX in 1988 and advanced to the position of President, U.S.
Diversified Group in 1990. He assumed his current position in 1992. From 1983
until he joined USX, Mr. Gedeon had been Vice President-Operations of National
Steel Corporation. Mr. Gedeon is a member of the Board of Directors of the U.S.
Steel Group of USX Corporation and a member of the American Iron and Steel
Institute. He is also a member of the Board of Directors of
INROADS/Pittsburgh-Erie, Inc., a not for profit minority career development
organization.
ROBERT M. HERNANDEZ Age: 55
CHAIRMAN OF THE BOARD OF THE COMPANY Director since 1990
On December 1, 1994, Mr. Hernandez was elected to his current position, Vice
Chairman and Chief Financial Officer of USX Corporation. Mr. Hernandez had been
elected Executive Vice President--Accounting & Finance and Chief Financial
Officer and director of USX on November 1, 1991. He was Senior Vice
President-Finance & Treasurer of USX from October 1, 1990, to October 31, 1991.
Mr. Hernandez was President-U.S. Diversified Group of USX from June 1, 1989, to
September 30, 1990, and in such role had responsibilities for USX's businesses
not related to energy and steel. From January 1, 1987, until May 31, 1989, he
was Senior Vice President and Comptroller of USX. Mr. Hernandez has his
undergraduate degree from the University of Pittsburgh and his MBA from the
Wharton Graduate School of the University of Pennsylvania. In addition to being
a director of USX, he is a trustee of BlackRock Funds; a director and Chairman
of the Executive Committee of ACE Limited and a director of Transtar, Inc., the
Pennsylvania Chamber of Business and Industry and the Pennsylvania Business
Roundtable.
EDITH E. HOLIDAY Age: 48
ATTORNEY Director since 1999
Ms. Holiday was elected a director on July 29, 1999. She served as Assistant to
the President and Secretary of the Cabinet in the White House from 1990 to 1993.
Prior to that she held several senior positions in the United States Treasury
Department including General Counsel. She is a director of Amerada Hess
Corporation; Beverly Enterprises, Inc.; Hercules Incorporated and H.J. Heinz
Company. She is also a director or trustee of a number of investment companies
in the Franklin Templeton Group of Funds. She has BS and JD degrees from the
University of Florida.
7
<PAGE> 10
JOHN H. ODLE Age: 57
EXECUTIVE VICE PRESIDENT Director since 1996
OF RTI
Mr. Odle was elected a director on July 26, 1996 and has been Executive Vice
President since June 1996. He was Senior Vice President--Commercial from 1989 to
1996 and served as Vice-President--Commercial from 1981 until 1989. Prior to
that, Mr. Odle served as General Manager--Sales. He has 21 years of service with
RTI and its predecessor. He is a member of the American Society for Metals and
the International Titanium Association. He is a graduate of Miami University of
Ohio.
TIMOTHY G. RUPERT Age: 53
PRESIDENT & CHIEF Director since 1996
EXECUTIVE OFFICER OF RTI
Mr. Rupert was elected a director on July 26, 1996 and President & Chief
Executive Officer on July 30, 1999. He had been Executive Vice President & Chief
Financial Officer since June 1996. He was Senior Vice President & Chief
Financial Officer from 1994 to 1996 and had served as Vice President & Chief
Financial Officer since September 1991 when he joined RTI's predecessor. He is a
director and President of the International Titanium Association, a director of
Columbus Insurance Ltd. and a member of the Financial Executives Institute. He
has a BS degree from Indiana University of Pennsylvania.
WESLEY W. VON SCHACK Age: 55
CHAIRMAN, PRESIDENT AND Director since 1991
CHIEF EXECUTIVE OFFICER,
ENERGY EAST CORPORATION
(ENERGY SERVICES COMPANY)
Mr. von Schack joined Energy East Corporation's predecessor New York State
Electric & Gas Corp. in September, 1996. Prior to that he had served as Chairman
of the Board, President and Chief Executive Officer of DQE and of Duquesne Light
Company since 1986. DQE is the parent company of Duquesne Light. He is also a
director of Mellon Bank Corporation, Mellon Bank, N.A., American Gas
Association, The Business Council of New York State, Inc., The Peconic Land
Trust and Aegis Insurance Limited. Mr. von Schack has an AB in economics from
Fordham University, an MBA from St. John's University and a Doctorate Degree
from Pace University.
PROPOSAL NO. 2 -- ELECTION OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as independent accountants for RTI and its
predecessors for a number of years. For 1999, PricewaterhouseCoopers LLP
rendered professional services in connection with the audit of the financial
statements of RTI and its subsidiaries, including examination of certain
employee benefit plans, review of quarterly reports and review of filings with
the Securities and Exchange Commission. It also provided internal audit and tax
consulting services and reviewed RTI's enterprise resource planning software
system from the accounting controls standpoint. It is knowledgeable about RTI's
operations and accounting practices and is well qualified to act in the capacity
of independent accountants.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS
FOR RTI FOR 2000.
8
<PAGE> 11
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of RTI, as of March 1, 2000, no person or group owned
beneficially more than five percent of the outstanding Common Stock of RTI
except:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
---------------- -------------------- -----
<S> <C> <C>
Salomon Smith Barney Inc........................ 2,345,618(1) 10.5%
Salomon Brothers Holding Company Inc.
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
ICM Asset Management, Inc....................... 2,109,936(2) 10.1%
601 W. Main Ave., Ste. 600
Spokane, WA 99201
Sanford C. Bernstein & Co., Inc................. 1,835,900(3) 8.8%
767 Fifth Avenue
New York, NY 10153
Stavich Enterprises, Inc........................ 1,300,900(4) 6.2%
Andrew Stavich
8918 N. Palmyra Rd.
Canfield, OH 44406
Dimensional Fund Advisors, Inc.................. 1,227,410(5) 5.9%
1299 Ocean Ave, 11th Floor
Santa Monica, CA 90401
</TABLE>
- ---------
(1) Based on Schedule 13G dated February 4, 2000, which indicates that
each reporting person had sole voting power and sole dispositive
power over no shares; Salomon Smith Barney Holdings Inc. and
Citigroup Inc. had shared voting power and shared dispositive power
over 2,345,618 shares; and Salomon Smith Barney Inc. and Salomon
Brothers Holding Company Inc. had shared voting power and shared
dispositive power over 1,239,632 shares.
(2) Based on Schedule 13G dated February 29, 2000, which indicates ICM
had sole voting power over 1,205,586 shares, shared voting power
over no shares, sole dispositive power over 2,109,936 shares and
shared dispositive power over no shares.
(3) Based on Schedule 13G dated February 8, 2000, which indicates that
Bernstein had sole voting power over 1,547,350 shares, shared voting
power over 34,500 shares, sole dispositive power over 1,835,900
shares and shared dispositive power over no shares.
(4) Based on Schedule 13G dated February 7, 2000, which indicates that
each reporting person had sole voting power over 1,300,900 shares,
shared voting power over no shares, sole dispositive power over
1,300,900 shares and shared dispositive power over no shares.
(5) Based on Schedule 13G dated February 3, 2000, which indicates that
Dimensional Fund had sole voting power over 1,227,410 shares, shared
voting power over no shares, sole dispositive power over 1,227,410
and shared dispositive power over no shares.
9
<PAGE> 12
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table reflects the number of shares of Common Stock of RTI
beneficially owned, as of February 21, 2000, by each director, by each executive
officer named in the Summary Compensation Table and by all directors and
executive officers as a group:
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF OUTSTANDING
NAME SHARES(1) SHARES(2)
---- --------- ---------
<S> <C> <C>
Craig R. Andersson........................... 55,692 --
Neil A. Armstrong............................ 15,884 --
Daniel I. Booker............................. 10,055 --
Ronald L. Gallatin........................... 37,970 --
Charles C. Gedeon............................ 3,377 --
Robert M. Hernandez.......................... 42,627 --
Dawne S. Hickton............................. 36,583 --
Edith E. Holiday............................. 1,157 --
Lawrence W. Jacobs........................... 34,167 --
John H. Odle................................. 178,738 --
Timothy G. Rupert............................ 169,602 --
Wesley W. von Schack......................... 18,436 --
Harry B. Watkins............................. 44,900 --
-------
All directors and executive officers
as a group (14 persons).................... 655,854 3.1%
</TABLE>
- ---------
(1) Includes 8,833 shares, 6,667 shares, 80,053 shares, 54,999 shares and 23,750
shares, respectively, which Mrs. Hickton and Messrs. Jacobs, Odle, Rupert
and Watkins had the right to acquire within 60 days under the Company's 1989
Stock Option Incentive Plan and 1995 Stock Plan.
(2) No percent is shown for ownership of less than one percent.
EXECUTIVE COMPENSATION
The following table shows the annual and long term compensation paid the chief
executive officer and the other four most highly compensated executive officers
of RTI for services rendered in all capacities in 1999, 1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
PAYOUTS
ANNUAL COMPENSATION AWARDS ----------
---------------------------------- ------------------------ LONG TERM
OTHER RESTRICTED STOCK INCENTIVE
NAME AND $ ANNUAL STOCK OPTIONS PLAN ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS (SHARES) PAYOUTS COMPENSATION
------------------ ---- ------ ----- ------------ ------ -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Timothy G. Rupert(1)........ 1999 $285,000 $ 75,000 -- 50,000 15,000 -- --
President & 1998 229,167 113,000 -- 11,000 11,000 -- --
Chief Executive Officer 1997 218,334 125,000 -- 10,500 11,000 -- --
John H. Odle................ 1999 243,333 65,000 -- 36,000 15,000 -- --
Executive Vice President 1998 229,167 103,000 -- 11,000 11,000 -- --
1997 218,334 115,000 -- 10,500 11,000 -- --
Dawne S. Hickton(2)......... 1999 135,583 50,000 -- 12,750 7,000 -- --
Vice President & General 1998 120,084 60,000 -- 4,975 6,500 -- --
Counsel 1997 64,169 32,000 -- 4,500 10,000 -- --
Lawrence W. Jacobs(3)....... 1999 121,667 35,000 -- 12,500 6,000 -- --
Vice President & 1998 77,651 35,000 -- 4,000 10,000 --
Chief Financial Officer
Harry B. Watkins(4)......... 1999 141,500 45,000 -- 5,000 7,500 -- --
Vice President-Technical 1998 135,500 60,000 -- 5,500 7,500 -- --
Marketing & Tubular Group 1997 129,167 60,000 -- 5,250 7,500 -- --
</TABLE>
- ---------
(1) Elected President and Chief Executive Officer July 30, 1999.
(2) Elected Vice President and General Counsel effective June 1, 1997.
(3) Elected Vice President and Treasurer effective March 23, 1998; elected Chief
Financial Officer July 30, 1999.
(4) Retired January 31, 2000.
10
<PAGE> 13
The following tables set forth information with respect to stock option grants
and exercises in 1999 and December 31, 1999 stock option values:
STOCK OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM
GRANTED EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME (SHARES) IN 1999 ($/SH) DATE 5% 10%
---- -------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Timothy G. Rupert.................... 15,000 3.9% $12.438 1/30/09 $303,903 $483,915
John H. Odle......................... 15,000 3.9 12.438 1/30/09 303,903 483,915
Dawne S. Hickton..................... 7,000 1.8 12.438 1/30/09 141,821 225,827
Lawrence W. Jacobs................... 6,000 1.6 12.438 1/30/09 121,561 193,566
Harry B. Watkins..................... 7,500 2.0 12.438 1/30/09 151,951 241,957
</TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1999
AND DECEMBER 31, 1999 STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY
ACQUIRED DECEMBER 31, 1999 OPTIONS AT
ON (SHARES)(1) DECEMBER 31, 1999
EXERCISE VALUE ----------------- -----------------
NAME (SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Timothy G. Rupert............ -- -- 54,999 26,001 $78,000 -0-
John H. Odle................. -- -- 80,053 26,001 59,828 -0-
Dawne S. Hickton............. -- -- 8,833 14,667 -0- -0-
Lawrence W. Jacobs........... -- -- 6,667 12,667 -0- -0-
Harry B. Watkins............. -- -- 23,750 15,000 20,313 -0-
</TABLE>
- ---------
(1) Adjusted for one-for-ten reverse stock split effective March 31, 1994 and
subsequent rights offering.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
In 1995, the Board of Directors determined that in most instances, in view of
the size of RTI and also of the Board, the full Board should itself handle
compensation matters. The Stock Plan Committee, which is composed entirely of
directors who are not employees of RTI, administers RTI's stock-related plans;
namely the 1989 Stock Option Incentive Plan, the 1989 Employee Restricted Stock
Award Plan and the 1995 Stock Plan. The Committee approves grants under the 1995
Stock Plan. No further grants can be made under the 1989 Plans.
To assist it in its compensation actions, the Board has adopted a comprehensive
statement entitled "Pay Philosophy and Guiding Principles Governing Officer
Compensation". Principal components of the statement are as follows:
The Philosophy is to have RTI's officer compensation programs:
- promote achievement of RTI's business objectives and reinforce its
strategies.
- align the interests of RTI's officers with those of its shareholders.
- provide pay that is externally competitive and internally equitable, that
rewards accomplishment to the extent identifiable and measurable and that
delivers significant rewards for exceptional performance.
The Guiding Principles are described as:
1. Pay programs will be characterized by variability, clarity, communicability
and strategic emphasis. Specific areas of communication will be the factors
considered, annual target incentive objectives and results and annual target
levels for restricted stock vesting performance measures and results. The
strategic emphasis will include recognition of the roles of various elements of
pay in attracting, retaining and motivating employees, the aspects of
performance that each element is best suited to reward and the characteristics
of RTI and its officer group that point to emphasis on specific elements of pay.
11
<PAGE> 14
2. Specific descriptions of salary administration and annual and long term
incentive compensation administration are set forth. Annual incentive
compensation is accomplished through RTI's Incentive Compensation Plan while
long term incentive compensation is handled under the 1995 Stock Plan.
Market conditions in the titanium industry plateaued in 1998. Union represented
employees at RTI's subsidiary, RMI Titanium Company, were on strike during the
fourth quarter of 1998 and until mid-April, 1999. Despite the strike, management
carefully controlled operating costs, managed producing, finishing and shipping
operations and with the dedicated salaried work force maintained production
volumes at very respectable levels with a substantially reduced work force.
Following the end of the strike returning workers were provided retraining.
That, together with needed facility maintenance, precluded significant
production until May. In addition, commercial aerospace markets failed to meet
RTI's forecasts for shipments. Despite the adverse conditions, previous and
current management actions helped in maintaining RTI as a strong company. During
1999 management made progress in implementing "lean manufacturing" concepts and
installed an enterprise resource planning software system. Management also
continued to pursue new product applications in the energy industry and
elsewhere.
In January, 1999 the Board of Directors reviewed the 1998 officer performance
against their objectives for that year. After considering their performance and
RTI's financial results, the Board approved compensation increases for them (as
well as the bonuses for 1998 shown in the Summary Compensation Table).
The Stock Plan Committee approved grants of restricted stock and stock options
in January, 1999. The grants to officers were in line with the long term
incentive compensation guidelines mentioned above.
On July 29, 1999, the Board elected Timothy G. Rupert President & Chief
Executive Officer and Lawrence W. Jacobs Chief Financial Officer to succeed Mr.
Rupert. The Board also approved RTI entering into four year employment
agreements with Mr. Rupert and Mr. Jacobs as well as with Dawne S. Hickton and
John H. Odle. The agreements provided for increases in compensation and includes
references to grants by the Stock Plan Committee on the same day of restricted
stock that will vest in four years. The compensation increases and restricted
stock grants were deemed appropriate in light of the increased responsibilities
of Mr. Rupert and Mr. Jacobs as well as the four year agreements with each of
the officers.
In January, 2000 the Board reviewed executive performance against 1999
objectives, as well as RTI's operating and financial results. The officer group
was not specifically compensated for its outstanding performance during the
strike, in returning operations to required production levels following the
strike and for other strike-related activities. After taking this into account
as well as RTI's 1999 performance, officer performance against objectives and
the performance of RTI stock in 1999, the Board awarded the bonuses for 1999
shown in the Summary Compensation Table. These awards were well below the target
levels in the Pay Philosophy and Guiding Principles Statement.
The compensation of the chief executive officer was set at the time of his
election to the office at a level which the Board believed to be comparable to
that received by CEOs of companies similar in size and complexity to RTI. RTI's
Chairman was assisted by a consultant in formulating his recommendation to the
Board with respect to the CEO's pay. Board members discussed the subject at
length, utilizing their experience and background in determining the appropriate
level of this compensation. The Board followed the procedure described in the
preceding paragraph in determining the CEO's bonus in January, 2000.
<TABLE>
<S> <C> <C>
Craig R. Andersson Neil A. Armstrong Daniel I. Booker
Ronald L. Gallatin Charles C. Gedeon Robert M. Hernandez
Edith E. Holiday John H. Odle Timothy G. Rupert
Wesley W. von Schack
</TABLE>
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
Robert M. Hernandez, Chairman of the Board, John H. Odle, Executive Vice
President and Timothy G. Rupert, President & Chief Executive Officer are members
of the Board of Directors. Mr. Hernandez receives the compensation set forth on
page 6. Messrs. Hernandez, Odle and Rupert are not present at Board meetings
when compensation matters relating to them are considered. None of them is a
member of the Stock Plan Committee.
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<PAGE> 15
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the five year cumulative total return
to shareholders on RTI's Common Stock with the cumulative total return of the
S&P 500 Stock Index and a titanium industry group index consisting of RTI,
Oregon Metallurgical Corporation (until March 15, 1998, the last date its stock
was publicly traded) and Tremont Corporation (Timet Corporation after June 4,
1996, the date its stock first became publicly traded).
COMPARISON OF CUMULATIVE TOTAL RETURN
RTI, INDUSTRY PEER GROUP AND S&P 500*
<TABLE>
<CAPTION>
S&P 500 INDUSTRY RTI/RMI
------- -------- -------
<S> <C> <C> <C>
'1994' 100.00 100.00 100.00
'1995' 137.30 146.70 145.50
'1996' 168.80 382.30 511.40
'1997' 225.00 335.40 365.90
'1998' 289.20 167.10 254.50
'1999' 350.00 90.10 136.40
</TABLE>
* Assumes $100 investment on January 1, 1995 and reinvestment of dividends.
PENSION BENEFITS
RTI's Pension Plan is a defined benefit plan which first became effective at RMI
Company (a predecessor of RTI) in 1971. The Pension Plan recognizes, for pension
benefits, services and compensation with RTI, RMI Titanium Company, RMI Company,
Reactive Metals, Inc. (a predecessor of RMI Company), USX Corporation, Quantum
Chemical Corporation, or subsidiaries of each. The amounts payable under the
Pension Plan will be paid monthly after a participant retires. The table below
shows the annual pension benefits for retirement at age 65 (or earlier under
certain circumstances) for various levels of eligible earnings which would be
payable to employees retiring with the years of service shown. The benefits are
based on a formula of a specified percentage (dependent on years of service) of
average annual eligible earnings in the five consecutive years of the ten years
prior to retirement in which such earnings are highest. Eligible earnings
includes only base salary. Incentive awards and similar benefits are excluded,
although the amount of such benefits is included in the Summary Compensation
Table. Benefits payable under the Pension Plan, and amounts reflected in the
following table are subject to offsets for social security benefits and, in
certain instances, pensions payable under the USX and the Quantum pension plans.
As of December 31, 1999, Mrs. Hickton had 2 credited years of service, and Mr.
Jacobs 1, Mr. Odle 22, Mr. Rupert 31 and Mr. Watkins 14.
13
<PAGE> 16
<TABLE>
<CAPTION>
AVERAGE
CONSECUTIVE ANNUAL BENEFITS FOR YEARS OF SERVICE
HIGHEST 5 YEARS OF --------------------------------------------------
COMPENSATION 10 15 30 40 45
- ------------------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 $12,500 $18,750 $ 37,500 $ 51,000 $ 57,750
200,000 25,000 37,500 75,000 102,000 115,500
300,000 37,500 56,260 112,500 153,000 173,250
400,000 50,000 75,000 150,000 204,000 231,000
</TABLE>
Under the employment agreement dated as of August 1, 1999 between RTI and Mr.
Odle, RTI agreed that if he continues in active employment with RTI until either
age 65, or such earlier date as the RTI Board of Directors may approve, RTI at
his retirement will pay him a one time lump sum payment of the then present
value of the 9.16 years of non-pensionable service attributable to periods he
was employed by USX (3.58 years) and the Company (5.58 years) which pre-date his
current period of employment, calculated pursuant to the RTI Pension Plan and
its Supplemental Pension Program.
USX has agreed to provide Mr. Rupert, a former employee of USX, certain pension
and death and disability benefits necessary to supplement like benefits payable
under the RTI plans so that the aggregate of such payments to him equals what he
would have received had he remained employed by USX.
USX maintains the USX Corporation Pension Plan for Employees which provides
defined benefits for USX employees using a different formula than that used by
the RTI plan. Upon his retirement from RTI, Mr. Rupert will receive a pension
from the RTI Pension Plan and the USX Plan, with the benefits paid from the USX
Plan calculated on service with USX and USX subsidiaries prior to his employment
by RTI. The combined benefits payable annually to Mr. Rupert under the USX Plan
(which relates to employment by USX) and from USX if he retires at age 65 and if
his compensation remains at its current level, would be $72,316. Mr. Watkins is
also a former employee of USX and elected to retire January 31, 2000. The
benefit payable to him on an annual basis under the USX Plan equals $26,120.
SUPPLEMENTAL PENSION PROGRAM
Officers participating in the Incentive Compensation Plan are also eligible for
the RTI Supplemental Pension Program. If they retire or otherwise terminate
employment after age 60, or prior to age 60 with RTI consent, they will be
entitled to receive the benefits shown in the table below based on bonuses paid
under the Incentive Compensation Plan.
<TABLE>
<CAPTION>
AVERAGE ANNUAL
BONUS FOR
FIVE HIGHEST YEARS ANNUAL BENEFITS FOR YEARS OF SERVICE
IN TEN YEAR PERIOD ------------------------------------
PRECEDING RETIREMENT 10 15 20
- -------------------- ---------- ---------- ----------
<S> <C> <C> <C>
$ 50,000 $ 7,500 $11,250 $15,000
100,000 15,000 22,500 30,000
150,000 22,500 33,750 45,000
200,000 30,000 45,000 60,000
</TABLE>
In order to comply with the limitations of the Internal Revenue Code, pension
benefits will be paid directly by RTI when they exceed the amounts permitted by
the Code to be paid from federal income tax qualified pension plans.
EMPLOYMENT AGREEMENTS
On August 1, 1999, RTI entered into employment agreements with Mrs. Hickton and
Messrs. Jacobs, Odle and Rupert covering their employment for an initial four
year term and for additional one year terms each year thereafter until the
officer attains age 65 unless terminated prior thereto by either party on 120
days notice. Under the agreements, each officer will be paid the annual salary
set forth, subject to increases from time to time in the sole discretion of RTI.
RTI may terminate the services of the officer
14
<PAGE> 17
at any time for "cause" as defined in the agreement. Officers each agree not,
for a period of 24 months after the end of the employment period or employment
termination, whichever occurs first, to be employed by, or otherwise participate
in, any business which competes with RTI. This restriction does not apply if the
officer terminates employment with RTI under certain circumstances following a
"change in control" of RTI as defined.
The employment agreements also provide that the officer will be entitled to
certain severance benefits in the event of termination of employment under
certain circumstances following a "change in control" as defined.
These are:
- a cash payment of up to three times the sum of the officer's current
salary plus the highest bonus in the four years before the date of
termination,
- all unvested restricted stock and options will vest immediately,
- life, disability, accident and health insurance benefits for 24 months
after termination,
- a cash payment of the amount necessary to insure that the payments listed
above are not subject to net reduction due to the imposition of federal
excise taxes.
The severance benefits are payable if, any time after a change in control, the
officer's employment is terminated by the officer for good reason or by RTI
other than for cause or disability. In addition the benefits are payable to Mr.
Odle or Mr. Rupert in the event either of them terminates employment within 90
days after a change in control.
The definition of a change in control for purposes of these agreements is
complex but is summarized as follows. It includes any change in control required
to be reported in response to Item 6(e) of Schedule 14A under the Securities
Exchange Act of 1934 and provides that a change in control will have occurred
if:
- any person not affiliated with RTI acquires 20 percent or more of the
voting power of our outstanding securities,
- the Board no longer has a majority made up of (1) individuals who were
directors on the date of the agreements and (2) new directors (other than
directors who join the Board in connection with an election contest)
approved by two-thirds of the directors then in office who (a) were
directors on the date of the agreements or (b) were themselves previously
approved by the Board in this manner.
- RTI merges with another company and RTI's shareholders end up with less
than 50 percent of the voting power of the new entity,
- our shareholders approve a plan of complete liquidation of RTI, or
- we sell all or substantially all of RTI's assets.
15
<PAGE> 18
OTHER INFORMATION
OTHER BUSINESS
We do not expect any business to come up for shareholder vote at the meeting
other than the items described in the Notice of Annual Meeting. If other
business is properly raised, your proxy card authorizes the people named as
proxies to vote as they think best.
OUTSTANDING SHARES
On March 1, 2000, 20,851,799 shares were outstanding and entitled to vote.
HOW WE SOLICIT PROXIES
In addition to this mailing, RTI employees may solicit proxies personally,
electronically or by telephone. RTI pays the costs of soliciting this proxy. We
also reimburse brokers and other nominees for sending these materials to you and
getting your voting instructions.
SHAREHOLDER PROPOSALS
The deadline for shareholder proposals for next year's meeting is December 4,
2000,
COMPLIANCE WITH SECTION 16(a) REPORTING REQUIREMENTS
Richard R. Burkhart, former RTI Group Vice President, was late in filing a Form
4 report for a transaction in RTI stock. Daniel I. Booker, a director, also was
late in filing a Form 4 report for a transaction in RTI stock. These reports are
required by the Securities Exchange Act of 1934.
CERTAIN TRANSACTIONS
During 1999, RTI's New Century Metal's subsidiary paid an aggregate of $159,566
in rent to XXI, LLC Company for use of a building in Solon, Ohio for the
manufacturing and warehousing operations of NCM. Mr. Burkhart is a 50% partner
in XXI, LLC. On January 6, 1999, RTI paid $16,247,443 to Mr. Burkhart as
deferred consideration for the sale of NCM to RTI on October 1, 1998. Mr.
Burkhart owned 50% of NCM.
By Order of the Board of Directors
RICHARD M. HAYS
Secretary
Dated: April 3, 2000
16
<PAGE> 19
RTI INTERNATIONAL METALS, INC.
1000 WARREN AVENUE, NILES, OHIO 44446
PROXY FOR 2000 ANNUAL MEETING
SOLICITED ON BEHALF OF THE DIRECTORS OF RTI INTERNATIONAL METALS, INC.
The undersigned hereby appoints ROBERT M. HERNANDEZ, TIMOTHY G. RUPERT,
JOHN H. ODLE AND RICHARD M, HAYS, or any of them, proxies to vote all shares of
Common Stock which the undersigned is entitled to vote with all powers which the
undersigned would possess if personally present, at the Annual Meeting of
Shareholders of RTI International Metals, Inc. on April 28, 2000, and any
adjournments thereof, upon such matters as may properly come before the meeting.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THIS PROXY CARD AND TO
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
PLEASE COMPLETE, DATE AND SIGN THE REVERSE SIDE.
/\ FOLD AND DETACH HERE /\
<PAGE> 20
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE [X]
This Proxy Card, when properly executed, will be voted in the manner
directed herein. If no direction to the contrary is indicated, it will be voted
"FOR" all Proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR: FOR WITHHOLD
1. PROPOSAL NO. 1 - Election of Craig R. Andersson; all nominees from all
Neil A. Armstrong; Daniel I. Booker; Ronald L.
Gallatin; Charles C. Gedeon; Robert M. Hernandez, [ ] [ ]
Edith E. Holiday, John H. Odle, Timothy G. Rupert and
Wesley W. von Schack as directors.
(To withhold authority to vote for any individual nominee,
write that nominee's name in the space below:
- ----------------------------------------------------------
2. PROPOSAL NO. 2 - Election of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as [ ] [ ] [ ]
independent accountants for 2000.
Signature(s) __________________________________________ Dated: _________, 2000
Please sign exactly as your name appears hereon. When
signing as fiduciary or corporate officer, give full
title. Joint owners should both sign.
/\ FOLD AND DETACH HERE /\
