<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
/ / 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
IMCO Recycling Inc.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
IMCO Recycling Inc.
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
IMCO RECYCLING INC.
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of IMCO
Recycling Inc. scheduled to be held at the Central Tower at Williams Square,
twenty-sixth floor, LaCima Club, Lakeside Room, 5215 North O'Connor Blvd.,
Irving, Texas, on Friday, May 12, 1995, commencing at 9:00 A.M., Central time.
Your Board of Directors and management look forward to greeting those
stockholders able to attend in person.
At the meeting, you will be asked to consider and elect three directors to
serve until the 1998 Annual Meeting of Stockholders. Your Board of Directors has
unanimously nominated these persons for election as directors. You are also
being asked to consider and approve amendments to the Corporation's 1992 Stock
Option Plan and to consider and ratify the appointment of Ernst & Young LLP as
the Corporation's independent accountants for 1995. Information concerning the
Board nominees, the amended 1992 Stock Option Plan and the proposal regarding
the Corporation's independent accountants, as well as other important
information, is contained in the accompanying proxy statement which you are
urged to read carefully.
Whether or not you plan to attend in person and regardless of the number of
shares you own, it is important that your shares be represented and voted at the
meeting. Accordingly, you are requested to sign, date and mail the enclosed
proxy at your earliest convenience. Your shares will then be represented at the
meeting, and the Corporation will be able to avoid the expense of further
solicitation.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Sincerely,
FRANK H. ROMANELLI
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
April 10, 1995
<PAGE>
IMCO RECYCLING INC.
5215 NORTH O'CONNOR BLVD., SUITE 940
CENTRAL TOWER AT WILLIAMS SQUARE
IRVING, TEXAS 75039
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1995
To the Stockholders of
IMCO Recycling Inc.
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stockholders of IMCO
Recycling Inc. (the "Corporation") will be held at the Central Tower at Williams
Square, twenty-sixth floor, LaCima Club, Lakeside Room, 5215 North O'Connor
Blvd., Irving, Texas, on Friday, May 12, 1995, at 9:00 A.M., Central time, for
the following purposes:
1. To elect three Class I directors to hold office until the 1998 Annual
Meeting of Stockholders or until their respective successors shall have
been elected and qualified.
2. To consider and approve certain amendments to the Corporation's 1992
Stock Option Plan.
3. To consider and ratify the appointment of Ernst & Young LLP as the
Corporation's independent accountants for 1995.
4. To transact any other business which properly may be brought before the
meeting and any adjournment thereof.
Only holders of record of the Corporation's Common Stock at the close of
business on March 24, 1995 are entitled to notice of and to vote at the Annual
Meeting. A complete list of such stockholders will be open to the examination of
any stockholder at the Corporation's principal executive offices at 5215 North
O'Connor Blvd., Suite 940, Central Tower at Williams Square, Irving, Texas for a
period of ten days prior to the meeting. The meeting may be adjourned from time
to time without notice other than by announcement at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED. IF YOU RECEIVE MORE
THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR AT
DIFFERENT ADDRESSES, EACH SUCH PROXY CARD SHOULD BE SIGNED AND RETURNED TO
ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED. THE PROXY CARD SHOULD BE SIGNED BY
ALL REGISTERED HOLDERS EXACTLY AS THE STOCK IS REGISTERED. ANY PERSON GIVING A
PROXY HAS THE POWER TO REVOKE IT AT ANY TIME PRIOR TO ITS EXERCISE AND, IF
PRESENT AT THE MEETING, MAY WITHDRAW IT AND VOTE IN PERSON. ATTENDANCE AT THE
ANNUAL MEETING IS LIMITED TO STOCKHOLDERS, THEIR PROXIES AND INVITED GUESTS OF
THE CORPORATION.
This Notice, the accompanying Proxy Statement, and the Proxy enclosed
herewith are sent to you by order of the Board of Directors of the Corporation.
PAUL V. DUFOUR
SECRETARY
Irving, Texas
April 10, 1995
<PAGE>
IMCO RECYCLING INC.
5215 NORTH O'CONNOR BLVD., SUITE 940
CENTRAL TOWER AT WILLIAMS SQUARE
IRVING, TEXAS 75039
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1995
SOLICITATION AND REVOCABILITY OF PROXIES
The Board of Directors of the Corporation is soliciting proxies to be voted
at the Annual Meeting of Stockholders to be held in Irving, Texas on May 12,
1995 and at any adjournment thereof. The Proxy Statement and the enclosed proxy
are first being mailed to stockholders on or about April 10, 1995 in connection
with this solicitation.
This proxy solicitation is intended to afford stockholders the opportunity
to vote on the matters set forth in the accompanying Notice of Annual Meeting
dated April 10, 1995. The proxy permits stockholders to withhold voting for any
or all nominees for election to the Corporation's Board of Directors (the
"Board") and to abstain from voting on any other specified proposal if the
stockholder so chooses.
All holders of record of shares of the Corporation's Common Stock at the
close of business on March 24, 1995 (the "Record Date") are entitled to notice
of and to vote at the meeting. On the Record Date, the Corporation had
outstanding 11,511,788 shares of Common Stock, par value $.10 per share (the
"Common Stock"). Each share of Common Stock is entitled to one vote on each
matter to come before the meeting. The presence, in person or by proxy, of
holders of a majority of the outstanding shares of Common Stock entitled to vote
as of the Record Date is necessary to constitute a quorum at the meeting. A
plurality of the votes of the shares present in person or represented by proxy
at the Annual Meeting, provided a quorum is constituted, is required for the
election of directors. All other action proposed herein may be taken upon the
affirmative vote of a majority of the votes cast by the stockholders represented
at the Annual Meeting, provided a quorum is constituted, except that the
proposal to amend the 1992 Stock Option Plan requires the affirmative vote of
holders of at least a majority of the shares of Common Stock present or
represented and entitled to vote at the meeting, so long as the total votes cast
on the proposal represent more than 50% of the outstanding shares of Common
Stock.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all other proposals and
will be counted as present for purposes of the item on which the abstention is
noted. Abstentions on the proposal to amend the 1992 Stock Option Plan will have
the effect of a negative vote because that proposal requires the affirmative
vote of holders of a majority of shares present in person or by proxy and
entitled to vote. Abstentions on all other proposals will not be counted in
determining the votes cast on such proposals. Under the rules of The New York
Stock Exchange, brokers who hold shares in street names for customers have the
authority to vote on certain items when they have not received instructions from
beneficial owners. Brokers that do not receive instructions are entitled to vote
on the election of directors and the proposal to ratify the appointment of the
auditors. Under applicable Delaware law, a broker non-vote will have no effect
on the outcome of the election of directors or the proposal to ratify the
appointment of the auditors, although a broker non-vote will not count as a vote
cast in determining the total votes cast on the proposal to amend the 1992 Stock
Option Plan.
Any stockholder has the unconditional right to revoke his proxy at any time
before it is voted. Any proxy given may be revoked either by a written notice
duly signed and delivered to the Secretary of the Corporation prior to the
exercise of the proxy, by execution of a subsequent proxy or by voting in
<PAGE>
person at the meeting (although attending the Annual Meeting without executing a
ballot or executing a subsequent proxy will not constitute revocation of a
proxy). Where a stockholder's duly executed proxy specifies a choice with
respect to a voting matter, the shares will be voted accordingly. If no such
specification is made, the shares will be voted (i) FOR the nominees for
director identified below; (ii) FOR the approval of the proposal to amend the
Corporation's 1992 Stock Option Plan; and (iii) FOR the ratification of the
appointment of Ernst & Young LLP as the Corporation's independent accountants
for 1995.
1996 ANNUAL MEETING
The Board presently intends to hold the Corporation's next Annual Meeting of
Stockholders on or about May 10, 1996. A Proxy Statement and Notice of such
meeting will be mailed to all stockholders approximately one month prior to that
date. In order to be eligible for inclusion in the Corporation's proxy statement
for the 1996 Annual Meeting of Stockholders, any proposal of a stockholder must
be received by the Corporation at its principal executive offices in Irving,
Texas, by December 6, 1995. All stockholder proposals must comply with Rule
14a-8 promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.
VOTING AND PRINCIPAL STOCKHOLDERS
At the Record Date, there were outstanding 11,511,788 shares of Common Stock
which were held of record by 618 stockholders. The holders of the Common Stock
have no appraisal or similar rights with respect to any of the matters being
voted on at the Annual Meeting.
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<PAGE>
The following table sets forth as of March 24, 1995, certain information
with regard to the beneficial ownership of Common Stock by (i) all persons known
by the Corporation to be the beneficial owner of more than 5% of the outstanding
Common Stock of the Corporation; (ii) each director and nominee for director of
the Corporation (see "Election of Directors"); (iii) each named executive
officer of the Corporation; and (iv) all executive officers and directors as a
group.
<TABLE>
<CAPTION>
SHARES UNDERLYING
OPTIONS/WARRANTS TOTAL
NAME OF NUMBER OF EXERCISABLE BENEFICIAL PERCENT OF
BENEFICIAL OWNER SHARES (1) WITHIN 60 DAYS OWNERSHIP CLASS
- - - ------------------------------------------------------ --------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Don V. Ingram ........................................ 1,160,212(2) 50,000 1,210,212 10.5%
2200 Ross Ave.
Suite 4500-E, LB 170
Dallas, Texas 75201
FMR Corp. ............................................ 788,200 -- 788,200 6.9%
82 Devonshire Street
Boston, MA 02109 (3)
J. M. Brundrett....................................... 14,800 2,190 16,990 *
Ralph L. Cheek........................................ 87,348 44,000 131,348 1.1%
John J. Fleming....................................... 18,218 2,190 20,408 *
Richard W. Hanselman.................................. 1,000 1,915 2,915 *
Thomas A. James....................................... 4,200(4) -- 4,200 *
Don Navarro........................................... 1,000 2,190 3,190 *
Jack C. Page.......................................... 100 2,190 2,290 *
Milan Resanovich...................................... 40,000 2,190 42,190 *
Frank Romanelli....................................... 1,840 -- 1,840 *
John B. Tuthill....................................... 13,000 2,190 15,190 *
Paul V. Dufour........................................ 80,410 90,500 170,910 1.5%
Richard L. Kerr....................................... 40,339 112,000 152,339 1.3%
C. Lee Newton......................................... -- 118,800 118,800 1.0%
Thomas W. Rogers...................................... 24,400 75,500 99,900 *
All Executive Officers and Directors as a group (15
persons, including those individuals named above).... 1,486,867 505,855(5) 1,992,722 16.6%
<FN>
- - - ------------------------
* Less than 1%
(1) Except as otherwise indicated, the persons named in the table possess sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them. Includes shares of Common Stock held
by wives and minor children of such persons and corporations in which such
persons hold a controlling interest.
(2) Represents 922,071 shares owned by Mr. Ingram directly, 78,141 shares owned
by Mr. Ingram's wife and 160,000 shares held by trusts and custodial
accounts created for the benefit of Mr. Ingram's children and relatives (of
which Mr. Ingram is trustee). Substantially all of these shares have been
pledged or are held in margin maintenance accounts.
(3) Information with respect to beneficial ownership of shares of Common Stock
by FMR Corp. is based solely upon the latest report of FMR Corp. on
Schedule 13G dated February 13, 1995 as filed with the Securities and
Exchange Commission. FMR Corp. has sole power to vote or to direct the vote
for 426,600 shares and sole power to dispose or to direct the disposition
of 788,200 shares.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(4) Does not include shares owned by Raymond James & Associates, Inc. of which
Mr. James is Chairman.
(5) Represents 50,000 shares which Mr. Ingram has the right to acquire pursuant
to the terms of a warrant exercisable at $.10 per share and 455,855 shares
represented by outstanding options under the Corporation's stock option
plans granted to officers and directors of the Corporation which are
exercisable within 60 days of March 24, 1995.
</TABLE>
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation of the Corporation provides that the number
of directors which shall constitute the whole Board of Directors shall not be
less than three, that the number of directors shall be fixed from time to time
exclusively by the Board of Directors and that the directors shall be divided
into three classes as nearly equal in number as possible. The term of office of
the Class I directors expires at the Annual Meeting of Stockholders to be held
on May 12, 1995, the term of office of the Class III directors expires at the
1996 Annual Meeting of Stockholders and the term of office of the Class II
directors expires at the 1997 Annual Meeting of Stockholders.
The persons named in the proxy will vote for Don V. Ingram, Thomas A. James
and Frank H. Romanelli as nominees for election as Class I Directors except
where authority has been withheld as to a particular nominee or as to all
nominees. Mr. Ingram and Mr. Romanelli are currently members of the Board of
Directors. Each nominee has consented to being named in this Proxy Statement and
to serve if elected. If any nominee should for any reason become unavailable for
election, proxies may be voted with discretionary authority by the persons named
therein for any substitute designated by the Board.
DIRECTORS AND NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
NOMINEES
CLASS I DIRECTORS
PRESENT TERM EXPIRES 1995.
<TABLE>
<CAPTION>
NAME AGE
- - - ------------------------------------------------------------ ---
<S> <C>
Don V. Ingram............................................... 59
Thomas A. James............................................. 52
Frank H. Romanelli.......................................... 50
</TABLE>
Don V. Ingram has served as a director of the Corporation since 1988. He
served as acting chief executive officer of the Corporation from August to
December 1994 and formerly served as Chairman of the Board of International
Metal Co., a predecessor company to the Corporation. Mr. Ingram played the major
role in the Corporation's formation in 1986. Mr. Ingram has been owner and
President since 1984 of Summit Partners Management Co., a private investment
management company in Dallas. In addition, Mr. Ingram is a private investor in
oil and gas exploration and development activities and served as Chairman of the
Board of Directors of Grasso Corporation from 1985 to 1994. Mr. Ingram is also a
director of Coastwide Energy Services, Inc.
Thomas A. James has been since 1969, the Chairman of the Board and Chief
Executive Officer of Raymond James Financial, Inc. and Chairman of Raymond James
& Associates, Inc., an investment banking and securities firm located in St.
Petersburg, Florida. Mr. James also serves as director and officer of various
affiliated entities. He is also a director of Arbor Health Care Company, a
publicly held health-care provider and World of Science, Inc.
Frank H. Romanelli assumed his current position as President and Chief
Executive Officer and director in January 1995. Mr. Romanelli previously served
as executive vice president of Occidental
4
<PAGE>
Chemical Corporation from 1990 to 1994, with responsibilities for long-term
strategy, divestitures and acquisitions. He also headed Occidental's
petrochemical business and its international division which operated 15 plants
in seven countries.
DIRECTORS CONTINUING IN OFFICE
CLASS III DIRECTORS
PRESENT TERM EXPIRES 1996.
<TABLE>
<CAPTION>
NAME AGE
- - - ------------------------------------------------------------ ---
<S> <C>
J. M. Brundrett............................................. 70
Ralph L. Cheek.............................................. 64
Jack C. Page................................................ 69
</TABLE>
J. M. Brundrett, retired Doctor of Veterinary Medicine, has served as a
director since March 1985. Prior to being selected as a director, Dr. Brundrett
served on the Creditors' Committee in connection with the reorganization
proceedings for Pioneer Texas Corporation, a predecessor of the Corporation. Dr.
Brundrett is a private investor in real estate and securities.
Ralph L. Cheek has served as a director since May 1987. Mr. Cheek was
employed as President and Chief Executive Officer of International Metal Co., a
predecessor of the Corporation, in April 1987 and served as Chairman, President
and Chief Executive Officer of the Corporation from July 1988 to August 1994.
Previously, Mr. Cheek held various positions with Kaiser Aluminum and Chemical
Corporation, most recently as Vice President-Europe and Vice President-Pacific
Northwest. He is serving as a consultant to the Corporation through April 30,
1995. See "Remuneration of Directors and Officers -- Directors' Compensation."
Jack C. Page has served as a director since November 1991. Mr. Page is an
independent management consultant with experience in conducting organizational,
marketing, management and computer studies in both the private and public
sectors. Before founding his own consulting business in 1972, Mr. Page headed
the Dallas and Mexico City offices of Booz, Allen & Hamilton, Inc., an
international consulting firm.
CLASS II DIRECTORS
PRESENT TERM EXPIRES 1997.
<TABLE>
<CAPTION>
NAME AGE
- - - ------------------------------------------------------------ ---
<S> <C>
John J. Fleming............................................. 55
Richard W. Hanselman........................................ 67
Don Navarro................................................. 50
</TABLE>
John J. Fleming has served as a director since May 1989. Mr. Fleming is
Chairman and Chief Executive Officer of Excel Energy Inc., a Canadian oil and
gas exploration and production company. Mr. Fleming served as Chairman and Chief
Executive Officer from 1980 until March 1991, of CanCapital Corporation, a
Canadian merchant banking, securities investment, and oil and gas exploration
and production company headquartered in Calgary, Alberta, Canada.
Richard W. Hanselman has served as a director since May 1992. Mr. Hanselman
has been principally engaged as a corporate director and consultant since 1986.
He was Chairman and Chief Executive Officer of Genesco, Inc., an apparel company
in Nashville, Tennessee, from 1980 through 1986. Mr. Hanselman is a director of
Becton Dickinson & Co., Arvin Industries Inc., Healthtrust Inc., Foundation
Health Corporation, Bradford Funds Inc., Benson Eye Care Corporation, and
Gryphon Holdings Inc.
Don Navarro has served as a director since June 1986. Mr. Navarro is
president of Don Navarro & Associates, which provides specialized business and
management services to public and private companies. Mr. Navarro serves as a
director of Pizza Inn, Inc.
5
<PAGE>
Milan Resanovich and John B. Tuthill are currently Class I Directors who are
not standing for re-election at the Annual Meeting. After the Annual Meeting,
Mr. Tuthill will serve as a Director Emeritus to the Corporation for a one-year
term.
The Board recommends that stockholders vote FOR Don V. Ingram, Thomas A.
James and Frank H. Romanelli as nominees for election to the Board at the Annual
Meeting of Stockholders.
MEETINGS OF DIRECTORS AND COMMITTEES
The Board held a total of eight Board meetings in 1994. Each director
attended at least 75% of the meetings of the full Board and the committees of
which he was a member held during 1994. The Board has established five standing
committees to assist it in the discharge of its responsibilities.
The Audit Committee reviews the professional services provided by the
Corporation's independent accountants and the independence of such firm from
management of the Corporation. This Committee also reviews the scope of the
audit coverage, the annual financial statements of the Corporation, the adequacy
of the Corporation's internal accounting controls and such other matters with
respect to the accounting, auditing and financial reporting practices and
procedures of the Corporation as it may find appropriate or as have been brought
to its attention. This Committee held two meetings in 1994. The members of the
Audit Committee are Mr. Fleming, Chairman, Mr. Page and Mr. Tuthill.
The Compensation Committee reviews and recommends the amount and form of
compensation and benefits payable to all officers, advises and consults with
management regarding the benefit plans and compensation policies and practices
of the Corporation, and administers the Corporation's stock option and bonus
plans. This Committee held four meetings in 1994. The members of the
Compensation Committee are Mr. Navarro, Chairman, Mr. Fleming and Mr.
Resanovich.
The Investment and Finance Committee assists management in developing plans
for implementing and financing investment and expansion strategies of the
Corporation and presents its recommendations to the Board for its approval. This
Committee held six meetings in 1994. The members of the Investment and Finance
Committee are Mr. Ingram, Chairman, Dr. Brundrett, Mr. Cheek, Mr. Hanselman and
Mr. Page.
The Environmental Committee was established for the purposes of providing
oversight and reviewing, reporting on and making recommendations to the Board
regarding the Corporation's policies concerning environmental, health and safety
matters affecting the Corporation. This Committee held one meeting in 1994. The
members of the Environmental Committee are Mr. Resanovich, Chairman, Mr.
Hanselman and Mr. Tuthill.
The Committee on Directors was established for the purpose of recommending
to the Board nominees for election or reelection as director and to recommend
policies regarding certain Board governance issues. While the Committee on
Directors normally is able to identify from its own resources an ample number of
qualified candidates, it will consider stockholder suggestions of persons to be
considered as nominees to fill future vacancies on the Board. Such suggestions
must be sent in writing to the Secretary at the Corporation's address, and must
be accompanied by detailed biographical and occupational data on the prospective
nominee, along with a written consent of the prospective nominee to the
consideration of his or her name by the Committee on Directors. Additionally,
there must be no legal impediments to the nominee serving as a director.
However, the selection of nominees is solely within the discretion of the Board
of Directors. The Committee on Directors held two meetings in 1994. The members
of the Committee on Directors are Dr. Brundrett, Chairman, Mr. Ingram and Mr.
Navarro.
6
<PAGE>
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Corporation's executive compensation program is administered by the
three-member Compensation Committee of the Board of Directors. Each member of
the Committee is a non-employee director. During 1994 the Committee was
comprised of Don Navarro, Chairman, John J. Fleming and Milan Resanovich.
COMPENSATION POLICY
The goal of the Corporation's executive compensation policy is to support
the overall objective of enhancing stockholder value, while at the same time
attracting, motivating and retaining highly qualified and productive employees.
It is the policy of the Corporation that a significant portion of the
compensation paid to the executive officers should be based on the Corporation's
results of operations and the price of its Common Stock. This policy aligns the
interests of the Corporation's management and stockholders. To achieve this
goal, the Corporation's executive compensation policies are designed to provide
competitive levels of compensation that integrate annual base compensation with
bonuses based upon corporate performance and individual initiatives and
performance. The Corporation has maintained two stock option plans for a number
of years, under which the benefits realized by executives are directly related
to stock price performance. See "Proposal to Approve Amendments to the IMCO
Recycling Inc. 1992 Stock Option Plan." To further this objective of linking
compensation to Corporation performance, the Board also adopted the 1992 Bonus
Participation Plan (the "1992 Bonus Plan" described below) which establishes a
bonus pool based upon return on total assets from which yearly bonuses are paid
to the officers and other key managers of the Corporation. The Board will
continue to examine ways to more closely link its annual bonus and long-term
incentive plans to the Corporation's stock performance. The objective is to
create plans that strengthen the relationship between stockholder value and
management incentive compensation.
The 1993 Tax Act restricts the ability of a publicly-held corporation to
deduct compensation in excess of $1,000,000 paid to its chief executive officer
and the four most highly compensated officers. The Committee intends to maintain
executive compensation packages below this threshold, and based on its current
compensation structure, the Committee does not anticipate that any of the
Corporation's relevant officers will reach the $1,000,000 threshold in the near
future.
For 1994, the executive compensation program consisted of base salary, the
1992 Bonus Plan and stock options that generally vest and become exercisable
over a five-year period. Following is a description of the elements of the
Corporation's executive compensation program and how each relates to the
objectives and policy outlined above.
BASE SALARY
The Committee reviews each executive officer's salary annually. In
determining appropriate salary levels, the Committee considers compensation
levels for executive positions in the external market with similar duties and
responsibilities, corporate and individual performance, as well as internal
equity.
Effective January 1, 1994, the base salary for Mr. Cheek, the Corporation's
Chairman, President and Chief Executive Officer, increased 3.9% to $239,500. Mr.
Cheek's base salary was increased 4.8% and 6.8%, respectively, for each of 1993
and 1992. Mr. Cheek's 1994 base salary increase reflected the Committee's
recognition of Mr. Cheek's responsibility for implementing and sustaining the
Corporation's expansion program, including the inception of a program to
increase recycling capacity at the Corporation's Uhrichsville, Ohio plant and
the acquisition of an additional facility in California.
In August 1994, Mr. Cheek retired as the Corporation's President and Chief
Executive Officer, although he remained as an employee of the Corporation and
continued to receive his annual base salary for the remainder of 1994. Following
Mr. Cheek's retirement as President, Don V. Ingram, a director of the
Corporation, served for the remainder of 1994 as the Corporation's Co-Chairman
(with Mr. Cheek) and as acting Chief Executive Officer. While Mr. Ingram
received no salary for his service as acting Chief Executive Officer, the
Committee granted Mr. Ingram a one-time bonus of $50,000 and
7
<PAGE>
options to purchase up to 50,000 shares of Common Stock in recognition of his
service to the Corporation from August to December 1994. In addition, Mr. Ingram
receives $10,000 per month pursuant to a Consulting Agreement with the
Corporation. See "Remuneration of Directors and Officers."
ANNUAL BONUS
The Board adopted the 1992 Bonus Plan in order to provide a link between the
value created for stockholders and bonus incentives paid to executives. The
Bonus Plan establishes a bonus pool which is funded by a portion of the
Corporation's income before interest and taxes that exceeds a threshold return
on total assets. Under this plan, executives do not receive any incentive bonus
until fiscal year consolidated net income before interest and taxes exceeds
12.5% of total assets. Individual awards for senior management are based upon a
pro-rata allocation of the bonus pool based on the individual's "bonusable
income" (an amount derived from that individual's base salary for that year).
The Committee may increase or decrease an individual's bonusable income for
purposes of the bonus pool allocation based on the individual's achievement of
personal goals set for that individual under the Plan and an evaluation of
performance by the Committee.
LONG-TERM INCENTIVES
Through annual grants of stock options to the named executives and others,
the Corporation's philosophy for long-term incentives is to retain and motivate
executives to improve long-term corporate performance and stock value.
The 1992 Stock Option Plan (the "1992 Plan") provides for options to be
granted having an exercise price equal to at least the market value on the date
of grant. Generally, grants of options vest in equal increments over five years.
To encourage early exercise and stock retention, the 1992 Plan provides for a
reload option feature which results in automatic additional stock option grants
if a participant delivers Common Stock in payment of the option exercise price,
and provisions which restrict the disposition of a portion of the Common Stock
received by a participant upon exercise for a specified period of time while
employed by the Corporation. See "Proposal to Approve Amendments to the IMCO
Recycling Inc. 1992 Stock Option Plan."
In addition, options have been granted under the Amended and Restated Stock
Option Plan (the "1990 Plan"). Outstanding nonqualified options under the 1990
Plan are exercisable at an exercise price equal to not less than 85% of market
value on the date of grant.
During 1994, the Committee granted to Mr. Ingram and the Named Executive
Officers options covering an aggregate of 217,000 shares of Common Stock at
exercise prices ranging from $12.325 per share to $13.375 per share. At December
31, 1994, Messrs. Cheek and Ingram and the Named Executive Officers held options
covering an aggregate of 753,000 shares of Common Stock, of which 440,800 shares
were vested and exercisable. See "Remuneration of Directors and Officers."
CHIEF EXECUTIVE OFFICER COMPENSATION
The factors which the Committee considered in determining Mr. Cheek's
compensation for fiscal 1994 were generally the same as those discussed above
for the executive officers of the Corporation. However, in assessing Mr. Cheek's
compensation levels, the Committee focused to a slightly greater degree, as it
had in past years, on corporate financial performance goals, such as earnings
per share. In assessing Mr. Ingram's bonus and option awards for 1994, the
Committee considered the extraordinary nature of Mr. Ingram's services, his
efforts along with other Board members in finding a new Chief Executive Officer
for the Corporation, his institution of certain management structural changes
and cost identification and containment programs and his overall efforts to
provide a successful transition between Mr. Cheek's and Mr. Romanelli's tenures.
The Committee also considered Mr. Ingram's Consulting Agreement pursuant to
which the Corporation pays Mr. Ingram a consulting fee of $10,000 per month. The
Corporation awarded Mr. Ingram a one-time bonus of $50,000 in
8
<PAGE>
December 1994, recognizing his contributions and service to the Corporation as
acting Chief Executive Officer. Neither Mr. Ingram nor Mr. Cheek have received
director's or committee member's fees for their services as directors.
The Corporation's employment agreement with Mr. Cheek provided him with an
annual base salary and eligibility to participate in Corporation bonus programs
and other benefit programs available to employees. As noted above, in 1994 Mr.
Cheek's base salary was increased by 3.9% to $239,500 from the $230,500 annual
base level for 1993. See "Remuneration of Directors and Officers -- Employment
Agreements" and "-- Director's Compensation."
As described above, the 1992 Bonus Plan is based upon annual returns on
total assets of the Corporation. Mr. Cheek's degree of participation in the
total bonus amounts awarded under this plan for 1994 was based in part upon the
objective formula criteria set forth in the plan and in part on Mr. Cheek's
limited length of service as Chief Executive Officer in 1994. Based on these
factors, Mr. Cheek received an aggregate of $103,980 pursuant to the 1992 Bonus
Plan during the year ended December 31, 1994. Under the terms of the 1992 Bonus
Plan, Mr. Ingram was not eligible to participate in the bonus pool under this
Plan.
Mr. Ingram's participation in option grants made by the Corporation in 1994
was based in part upon his responsibilities and contributions as acting Chief
Executive Officer. During 1994, the Committee awarded options to purchase 50,000
shares of Common Stock under the 1992 Plan to Mr. Ingram. This option is subject
to stockholder approval of the proposal to amend the 1992 Stock Option Plan.
As performance goals are met or exceeded, resulting in increased value to
stockholders, executives are rewarded commensurately. In the aggregate, 38% of
the Named Executive Officers' cash compensation for 1994 was derived from
incentives directly linked to corporate performance. Mr. Cheek received 30% of
his cash compensation from incentives, while Mr. Ingram received 100% of his
cash payments from incentives. The Committee believes that compensation levels
during 1994 adequately reflected the Corporation's compensation goals and
policies.
COMPENSATION COMMITTEE
Don Navarro, Chairman John J. Fleming Milan Resanovich
The Compensation Committee Report on executive compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934, except to the extent that the
Corporation specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Navarro, Fleming and Resanovich served on the Compensation Committee
of the Board of Directors in 1994. No member of the Compensation Committee has
ever served as an executive officer or as an employee of the Corporation. Don
Navarro & Associates, a specialized business and management services company of
which Mr. Navarro is the president and owner, provides consulting services to
the Corporation from time to time. In 1994, the Corporation paid approximately
$59,000 to Don Navarro & Associates as consulting fees in connection with
certain litigation matters to which the Corporation was a party.
9
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in the
cumulative total stockholder return on the Corporation's Common Stock (as
measured by dividing: (i) the difference between the Common Stock share price at
the end and the beginning of the measurement period by (ii) the Common Stock
share price at the beginning of the measurement period) with the cumulative
total return assuming reinvestment of dividends of (1) The Standard and Poor's
500 Index, (2) The Standard and Poor's Small Cap 600 Index and (3) an index of
peer companies selected by the Corporation consisting of: Wellman Inc.,
Safety-Kleen Corp., Proler International Corp., EnviroSource Inc. and Allwaste
Inc. The Corporation considers itself a part of the resource recovery industry,
along with the companies in the peer index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG IMCO RECYCLING, THE S&P 500 INDEX, THE S&P SMALLCAP 600 INDEX AND A PEER
GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
IMCO RECYCLING INC. PEER GROUP S&P 500 S&P SMALLCAP 600
<S> <C> <C> <C> <C>
1989 100 100 100 100
1990 100 79 97 76
1991 104 87 126 113
1992 237 87 136 137
1993 190 69 150 163
1994 239 84 152 155
</TABLE>
* $100 INVESTED ON 12/31/89 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
The foregoing graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
10
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Corporation to or on behalf of the
Corporation's chief executive officer and each of the
other most highly compensated executive officers of the Corporation determined
as of the end of the last fiscal year (herein referred to as the "Named
Executive Officers") for the fiscal years ended December 31, 1994, 1993, and
1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSA-
ANNUAL COMPENSATION TION AWARDS
------------------------------ -----------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL COMPENSA- OPTIONS COMPENSA-
POSITION YEAR SALARY BONUS(1) TION (#) TION(2)
- - - -------------------------------------- ---- -------- -------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
R. L. Cheek .......................... 1994 $239,500 $103,980 -- -- $ 18,398
President and Chief Executive Officer 1993 $230,500 $109,229 -- 22,000 $ 23,393
1992 $220,000 $168,990 $ 4,500 22,000 $ 22,474
D. V. Ingram ......................... 1994 -- $ 50,000 -- 50,000 --
Acting Chief Executive Officer
R. L. Kerr ........................... 1994 $193,867 $120,438 -- 60,000 $ 11,229
President -- Metals 1993 $180,700 $ 81,045 -- 20,000 $ 17,195
Division and Chief 1992 $172,000 $124,544 $ 4,500 20,000 $ 17,231
Operating Officer
P. V. Dufour ......................... 1994 $157,333 $ 92,298 -- 67,000 $ 11,521
Executive Vice President, Chief 1993 $141,500 $ 66,860 -- 17,500 $ 15,491
Financial Officer and Secretary 1992 $134,000 $ 89,356 17,500 $ 16,079
T. W. Rogers ......................... 1994 $148,500 $ 95,495 -- 20,000 $ 11,111
Senior Vice President, Marketing and 1993 $141,000 $ 66,577 -- 17,500 $ 15,073
Sales 1992 $134,000 $ 89,356 17,500 $ 15,757
C. L. Newton ......................... 1994 $132,500 $ 83,171 $24,252(3) 20,000 $ 11,012
Senior Vice President, Operations 1993 $123,000 $ 54,389 $23,189(3) 13,000 $ 14,416
<FN>
- - - ------------------------
(1) Amounts represent cash payments made under the 1992 Bonus Plan to named
executive officers (a) in 1995 and 1994 with respect to fiscal year 1994;
(b) in 1994 and 1993 with respect to fiscal year 1993; and (c) in 1993 and
1992 with respect to fiscal year 1992.
A preliminary calculation is made in December of each year, and 80% of a
preliminary bonus amount is then paid. A final bonus calculation is made
after the Corporation's independent accountants have completed the annual
audit. The difference between the final bonus calculation and the
preliminary bonus paid in December is then paid.
(2) Represents compensation paid or accrued pursuant to the Corporation's
Profit Sharing Retirement Plan and Executive Life and Health Insurance
Programs described below.
</TABLE>
PROFIT SHARING RETIREMENT PLAN. All employees of the Corporation who
have served for at least one year are eligible to participate in the
Corporation's Profit Sharing Retirement Plan. Corporation contributions are
determined annually by the Corporation and may be as much as 15% of annual
covered compensation. Participants are not required or permitted to make
contributions to the Plan.
11
<PAGE>
The Corporation contributed the following amounts to the Profit Sharing
Retirement Plan for the accounts of the named executive officers during
1994, 1993 and 1992:
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Ralph L. Cheek....................................................... $ 10,500 $ 16,509 $ 16,592
Don V. Ingram........................................................ -- -- --
Richard L. Kerr...................................................... 10,500 16,509 16,592
Paul V. Dufour....................................................... 10,500 14,552 15,218
Thomas W. Rogers..................................................... 10,500 14,502 15,218
C. Lee Newton........................................................ 10,500 13,935 --
</TABLE>
EXECUTIVE LIFE INSURANCE PROGRAMS. Under the terms of a supplemental
term life insurance policy provided to Mr. Cheek, a benefit of $600,000
would be payable to the beneficiaries of Mr. Cheek. In 1994, 1993 and 1992,
the Corporation paid premiums of $7,898, $6,884 and $5,882, respectively,
with respect to Mr. Cheek's supplemental term life insurance policy. The
Corporation also has entered into split-dollar life insurance agreements
with Messrs. Kerr, Dufour, Rogers and Newton to provide each of them with
death benefits of $500,000 ($350,000 in the case of Mr. Newton) under life
insurance policies. Under each split-dollar agreement, the Corporation
initially "owns" the "cash value element" of the insurance policy, which is
defined as the greater of the cash surrender value of the policy and the
premiums the Corporation has previously paid. The employee "owns" the
difference between the face amount of the policy and the amount of the
policy owned by the Corporation. The Corporation will, pursuant to the
split-dollar agreements, transfer a portion of its ownership interest in the
respective policies each year to Messrs. Kerr, Dufour, Rogers and Newton,
beginning at age 62 and continuing until the policies are owned solely by
them at age 65.
Under the split-dollar life insurance agreements, the Corporation paid
the following premiums on behalf of the following officers with respect to
term life insurance portions of these policies during 1994, 1993 and 1992:
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Richard L. Kerr.............................................................. $ 729 $ 686 $ 639
Paul V. Dufour............................................................... 1,021 939 861
Thomas W. Rogers............................................................. 611 571 539
C. Lee Newton................................................................ 512 481 --
(3) Represents reimbursement of moving expenses to Mr. Newton under the
Corporation's relocation policy. Mr. Newton relocated from Morgantown,
Kentucky to Rockwood, Tennessee in 1993 and to Irving, Texas in 1994.
</TABLE>
12
<PAGE>
STOCK OPTIONS
The options shown below were awarded during 1994 pursuant to the 1990 and
1992 Option Plans:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL OPTIONS POTENTIAL REALIZABLE VALUE AT
SECURITIES GRANTED TO EXERCISE ASSUMED ANNUAL RATES OF STOCK PRICE
UNDERLYING EMPLOYEES OR BASE APPRECIATION FOR OPTION TERM (2)
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------------------
NAME GRANTED (1)(#) YEAR (%) ($/SH) DATE 0% 5% 10%
- - - ------------------------ -------------- ------------- --------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. L. Cheek............. -- -- -- -- -- -- --
D. V. Ingram............ 50,000(3) 12.8% $ 13.375 12/15/2004 $ -0- $ 420,570 $ 1,065,813
R. L. Kerr.............. 30,000(3)(4) 7.7% $ 12.325 10/12/2004 $ 65,250 $ 338,817 $ 758,526
R. L. Kerr.............. 30,000(5) 7.7% $ 13.375 12/15/2004 $ -0- $ 252,342 $ 639,488
P. V. Dufour............ 45,000(3)(4) 11.5% $ 12.325 10/12/2004 $ 97,875 $ 508,226 $ 1,137,790
P. V. Dufour............ 22,000(5) 5.6% $ 13.375 12/15/2004 $ -0- $ 185,051 $ 468,957
T. W. Rogers............ 20,000(5) 5.1% $ 13.375 12/15/2004 $ -0- $ 168,228 $ 426,325
C. L. Newton............ 20,000(5) 5.1% $ 13.375 12/15/2004 $ -0- $ 168,228 $ 426,325
Executive Group......... 297,000 -- -- -- -- -- --
Non-Employee Director
Group.................. 7,847 -- $ 13.375 -- -- -- --
Nominees for Director
Group.................. -- -- -- -- -- -- --
Non-Executive Officer
Employee and Consultant
Group.................. 85,000 -- $ 13.375 -- -- -- --
<FN>
- - - --------------------------
(1) All options were granted under the 1992 Plan unless otherwise noted.
(2) Potential realizable value is the amount that would be realized upon
exercise by the named executive officer of the options immediately prior to
the expiration of their respective terms, assuming the specified annualized
rates of appreciation on the Common Stock over the respective terms of the
options. The 0% column indicates such value at grant date market price for
options granted having exercise prices below market price at date of grant.
(3) These options will vest in three equal annual increments beginning on the
first anniversary date of the grant. The Plan provides that in the event of
a "Change in Control" of the Corporation, all stock options will become
fully vested.
(4) Options granted pursuant to the 1990 Plan.
(5) The options granted will vest in five equal annual increments beginning
November 1, 1995 and are subject to the same "Change in Control" provisions
as discussed in footnote (3) above.
</TABLE>
13
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the named executive
officers concerning the exercise of options granted under the 1990 Plan during
the last fiscal year and unexercised options under the 1990 Plan and the 1992
Plan held as of the end of the fiscal year:
AGGREGATED OPTION EXERCISES IN 1994 AND DECEMBER 31, 1994 OPTION VALUES
<TABLE>
<CAPTION>
EXERCISABLE UNEXERCISABLE
-------------------------- -------------------------
NUMBER OF NUMBER OF
SHARES SHARES
UNDERLYING VALUE OF UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED UNEXERCISED UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT IN-THE-MONEY
ACQUIRED ON VALUE 12/31/94 OPTIONS AT 12/31/94 OPTIONS AT
NAME EXERCISE(#) REALIZED(1) (#) 12/31/94 (2) (#) 12/31/94 (2)
- - - ------------------------------- ----------- ----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
R. L. Cheek.................... 42,000 $ 297,150 44,000 $ 66,000 -- --
D. V. Ingram................... -- -- -- -- 50,000 $ 87,500
R. L. Kerr..................... -- -- 112,000 $ 1,148,000 88,000 $ 178,500
P. V. Dufour................... -- -- 90,500 $ 685,750 91,500 $ 201,250
T. W. Rogers................... -- -- 75,500 $ 548,125 44,500 $ 71,750
C. L. Newton................... -- -- 118,800 $ 1,054,685 38,200 $ 62,300
<FN>
- - - ------------------------
(1) Value realized is calculated based on the difference between the option
exercise price and the closing market price of the Common Stock on the date
of exercise multiplied by the number of shares to which the exercise
relates.
(2) The last reported sale price of the Common Stock on The New York Stock
Exchange composite tape on December 31, 1994 was $15.125 per share.
</TABLE>
EMPLOYMENT AGREEMENTS
The Corporation has entered into employment agreements with its five
executive officers named below.
Mr. Romanelli's employment agreement expires December 31, 1995, but may be
extended by mutual agreement. The agreement provides for Mr. Romanelli to be
employed as President and Chief Executive Officer of the Corporation at an
annual base salary of $275,000, and authorizes the grant to Mr. Romanelli of a
non-qualified option under the 1992 Option Plan to purchase 80,000 shares. The
agreement also authorizes a bonus for fiscal 1995 for Mr. Romanelli in an amount
not less than $100,000. If the Corporation terminates Mr. Romanelli's employment
without cause before the expiration of the term of the agreement, Mr. Romanelli
will be entitled to receive severance pay equal to one year's salary, plus a pro
rata portion of his 1995 bonus. Mr. Romanelli's contract also provides for
supplemental life insurance benefits, similar to those described above in note
(2) to the Summary Compensation Table.
The employment agreements with Messrs. Kerr, Dufour, Rogers and Newton have
been extended for an additional three months to expire on June 30, 1995, and
provide for each officer to be employed in his current position at an annual
base salary which may be increased from time to time by the Board of Directors
of the Corporation. Each of the named executives is also entitled to receive
severance pay in an amount equal to one and one-half times his annual base
salary if his employment is terminated without cause or for "Good Reason" after
a "Change in Control" of the Corporation (see below).
"Good Reason" is defined in the employment agreements of Messrs. Kerr,
Dufour, Rogers and Newton to include a material change in the employee's duties,
a relocation of the employee, or the failure by the Corporation to obtain the
assumption of the employee's employment agreement by any successor to the
Corporation. "Change in Control" is defined as the occurrence of any of the
following events: (i) a consolidation or merger in which the Corporation does
not survive, unless the Corporation's stockholders retain the same proportionate
common stock ownership in the surviving Corporation after the merger, or a sale
of all or substantially all of the Corporation's assets, (ii) the approval by
14
<PAGE>
the Corporation's stockholders of a plan to dissolve or liquidate the
Corporation, (iii) a third party acquires 50.1% or more of the Corporation's
voting securities, or (iv) during any two-year period, persons who constituted a
majority of the Board at the beginning of such period cease to serve as
directors for any reason other than death, unless each new director was approved
by at least two-thirds of the directors then still in office who were directors
at the beginning of the two-year period.
DIRECTORS' COMPENSATION
Non-employee directors of the Corporation (other than Mr. Ingram and Mr.
Cheek) and Directors Emeritus are presently entitled to receive directors' fees
of $20,000 per year. In addition, any director serving as a member of a
committee of the Board is entitled to receive $750 per committee meeting
attended and $250 for telephonic meetings. Chairmen of the Compensation and the
Investment and Finance Committees are to receive an annual retainer of $4,000;
the Chairmen of the other standing committees are to receive annual retainers of
$2,000. The 1992 Option Plan provides that each non-employee director will
automatically be granted on December 15th of each year a nonqualified stock
option to purchase that number of shares of Common Stock determined by dividing
the annual director's fee then in effect by the fair market value per share of
Common Stock on that date. On December 15, 1994, pursuant to the 1992 Plan, each
such non-employee director was granted an option to purchase 1,121 shares of
Common Stock. The exercise price per share with respect to these options granted
is $13.375. See "Proposal to Approve Amendments to the IMCO Recycling Inc. 1992
Stock Option Plan."
In 1985 the Corporation entered into a Consulting Agreement with Mr. Ingram
on a year-to-year basis with respect to certain operations of the Corporation at
a rate of $10,000 per month. In 1987, the Board determined to continue this
arrangement on a month-to-month basis. A total of $120,000 was paid to Mr.
Ingram under the Consulting Agreement during 1994.
In October 1994, the Corporation entered into a consulting agreement with
Mr. Cheek, which commenced effective January 1, 1995. Under the agreement, Mr.
Cheek is engaged as consultant and advisor to the Corporation in connection with
certain international projects. The agreement is to terminate on April 30, 1995.
The agreement provides that Mr. Cheek is to be paid a $10,000 retainer per
month, plus reimbursement for related out-of-pocket expenses, medical insurance
coverage and a $1,500 overhead allowance. Upon expiration, Mr. Cheek will be
entitled to receive severance pay in an amount equal to his 1994 annual base
salary. The agreement contains provisions granting to Mr. Cheek certain rights
to indemnification with respect to certain ongoing litigation involving
specified claims against the Corporation and Mr. Cheek.
CERTAIN TRANSACTIONS
The Corporation and Mr. Ingram are parties to an Amended and Restated
Registration Agreement dated September 30, 1988 (the "Registration Agreement").
The agreement grants to Mr. Ingram and certain former partners of PTX Partners,
a former limited partnership of which Mr. Ingram was general partner,
collectively, rights to one demand registration and unlimited piggyback
registrations. (PTX Partners was dissolved and liquidated in November 1989.)
See also "Remuneration of Directors and Officers -- Directors' Compensation"
and "Compensation Committee Interlocks and Insider Participation."
PROPOSAL TO APPROVE AMENDMENTS TO THE IMCO RECYCLING INC.
1992 STOCK OPTION PLAN
GENERAL
The Corporation's 1992 Stock Option Plan (the "1992 Plan") was adopted in
1992. In December 1994, the Board approved, subject to approval by the
Corporation's stockholders, certain amendments to the 1992 Plan. The principal
amendments to the 1992 Plan are as follows:
15
<PAGE>
(i) To increase the authorized number of shares of Common Stock issuable
upon the exercise of options granted under the terms of the 1992 Plan from
600,000 to 1,150,000 shares;
(ii) To increase the class of eligible participants under the 1992 Plan
to include officers (which includes non-employee officers) of the
Corporation and consultants and similar advisors to the Corporation;
(iii) To vest additional authority in the Committee to accelerate the
date upon which options granted under the 1992 Plan become exercisable;
(iv) To clarify certain provisions applicable to incentive stock options
as required by the Internal Revenue Code of 1986 (the "Code"); and
(v) To delete in most instances the requirement under the 1992 Plan that
options shall not be exercisable during the six months' period after the
date of grant.
The provisions of the 1992 Plan, as proposed to be amended and restated, are
summarized below. The statements herein concerning the terms and provisions of
the 1992 Plan are summaries only and are qualified in their entirety by
reference to the full text of the 1992 Plan, as so proposed to be amended and
restated, a copy of which is attached hereto as Appendix I.
As of March 24, 1995, options to purchase 576,402 shares of Common Stock had
been granted to 43 persons and were outstanding under the 1992 Plan at exercise
prices ranging from $13.375 to $14.75 per share, leaving 23,598 shares of Common
Stock available for option grants. As of the same date, only 12,400 shares
remained available for grant pursuant to the 1990 Plan.
The Board considers that stockholder approval of the amendments to the 1992
Plan is advisable due to the relatively low number of shares that remain
available for option grants. In addition, by expanding the class of eligible
participants to include consultants and officers, the Board of Directors
believes that the amended 1992 Plan will allow the Corporation to continue to
emphasize equity-based compensation and additional flexibility in structuring
compensation packages, not only for employees but also for non-employee
officers, directors, advisors and consultants to the Corporation. Formerly,
shares registered under compensatory benefit plans such as the 1992 Plan were
only available to employees and directors under Form S-8 promulgated by the
Securities and Exchange Commission under the Securities Act of 1933 (the "1933
Act"). In recent years, the Commission amended this Form to, in effect, permit
certain consultants and advisors to a publicly-held company to receive shares
registered under the 1933 Act under such a plan.
As an example of this, the Corporation entered into a consulting agreement
with Ralph L. Cheek which provided that Mr. Cheek could be eligible for grants
of non-qualified options as part of his overall compensation for his consulting
services. See "Remuneration of Officers and Directors -- Directors'
Compensation." If the amendments are approved, the Committee will have the
flexibility to grant options to outside consultants and advisors who make
significant contributions to the growth and success of the Corporation.
Similarly, the Board recognized that, from time to time, other non-employee
individuals may be called upon to contribute their services to the Corporation.
From August through December 1994, Mr. Ingram served the Corporation as acting
Chief Executive Officer, although he was not an employee of the Corporation and
was also not entitled to grants of options under the 1992 Plan to non-employee
directors because he did not receive directors' fees. See "Compensation
Committee Report to Stockholders." Accordingly, the Committee recommended that
the Board amend the Plan in order to give the Corporation the flexibility to
make grants of options to non-employee officers, such as Mr. Ingram and others,
to award them for their efforts without the use of Corporation cash.
Assuming the stockholders approve the proposal to amend the 1992 Plan, key
employees, consultants and officers of the Corporation and its subsidiaries and
non-employee directors of the Corporation will be eligible to receive options
under the 1992 Plan. The purposes of the 1992 Plan are to attract and retain
directors and key employees, consultants and officers and to encourage
performance by providing such persons with a proprietary interest in the
Corporation through the granting of
16
<PAGE>
stock options. The proceeds from the sale of Common Stock pursuant to the
exercise of options granted under the 1992 Plan will be added to the general
funds of the Corporation and used for general corporate purposes.
The 1992 Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974. At December 31, 1994, the Corporation estimates
that approximately 43 employees, directors, consultants and officers were
eligible to participate in the 1992 Plan, all of whom were then participants.
Unless sooner terminated by action of the Board, the 1992 Plan will
terminate on December 15, 2002, and thereafter no options may be granted
thereunder.
NEW PLAN BENEFITS
For information concerning stock options granted during 1994 under the 1992
Plan to each of Messrs. Cheek and Ingram (each of whom served at least part of
the year as the Corporation's Chief Executive Officer), the Named Executive
Officers, the Corporation's executive officers as a group, all non-employee
directors as a group, and all non-executive employees and consultants as a
group, see "Remuneration of Directors and Officers -- Stock Options." There are
currently 34 employees, 1 consultant and 8 non-employee directors or officers
eligible to participate in the 1992 Plan.
As of March 24, 1995, the aggregate market value of the shares of Common
Stock underlying outstanding options under the 1992 Plan was $8,934,231 (based
on the closing sales price per share of $15.50 on the New York Stock Exchange
Composite Tape on such date.)
TERMS OF THE 1992 PLAN AND AGREEMENTS
NON-EMPLOYEE DIRECTORS. On December 15 of each year, all directors of the
Corporation who are not employees will receive a nonqualified stock option to
purchase that number of shares of Common Stock determined by dividing the annual
director's fee paid or accrued to be paid to that director with respect to the
12-month period immediately preceding such date of grant, by the fair market
value per share of Common Stock on such date of grant. The exercise price for
non-employee director options will be equal to the fair market value per share
of Common Stock on the date of grant, and all such options shall vest and become
fully exercisable after the expiration of six months after the date of grant.
The term of each non-employee director option will expire ten years from the
date of grant, subject to earlier expiration upon death, disability, retirement
or termination of service, as described below. All grants of options to
non-employee directors under the 1992 Plan will be automatic without any
discretion on the part of the Compensation Committee with respect to the
grantee, the number of shares of Common Stock subject to options to be granted,
the term of the options and the exercise price of the options.
EMPLOYEES, CONSULTANTS AND OFFICERS. The Compensation Committee will have
authority to grant stock options to key employees, consultants and officers of
the Corporation (including non-employee officers), or any majority-owned
subsidiary at such time, in such amounts and under such terms as the
Compensation Committee determines in accordance with the 1992 Plan.
LIMITS ON OPTIONS. The exercise price for a nonqualified stock option
cannot be less than the fair market value per share of Common Stock on the date
of grant. The exercise price for an incentive stock option cannot be less than
100% (110% in the case of certain employees owning more than 10% of the
outstanding shares of Common Stock) of the fair market value of the Common Stock
on the date of grant. The option period may not extend longer than ten years
from the date the option is granted and, in the case of incentive stock options,
is limited to five years from the date of grant for certain eligible
participants owning more than 10% of the outstanding shares of Common Stock.
Notwithstanding any other provisions of the 1992 Plan, incentive stock options
will terminate not later than 90 days after termination of an employee's service
to the Corporation, unless such termination results from the death or permanent
disability of the participant, in which case the option shall expire 180 days
after the date of such termination.
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The options granted and to be granted under the 1992 Plan are not
transferable other than by will or by the laws of descent and distribution or
pursuant to the terms of a qualified domestic relations order as defined in the
Code or the Employee Retirement Income Security Act of 1974. The exercise of
incentive stock options shall be subject to a $100,000 calendar year limit based
on the fair market value of the Common Stock at the time the option was granted.
During the lifetime of the optionee, his stock options may be exercised only by
him unless the particular stock option agreement provides that his guardian or
legal representative may do so.
EXERCISE OF OPTIONS; RELOAD OPTIONS. The exercise price may be paid in cash
or in shares of Common Stock valued at their fair market value on the date of
exercise (or in any combination of cash and shares of Common Stock having an
aggregate fair market value equal to the exercise price). In the event that
shares are delivered by a participant in payment of all or a portion of the
exercise price and/ or shares are delivered to, or withheld by, the Corporation
in payment of the Corporation's tax withholding obligations upon exercise, the
participant so exercising a nonqualified stock option shall automatically be
granted a nonqualified stock option (or a participant so exercising an incentive
stock option shall automatically be granted an incentive stock option) (in
either case, a "Reload Stock Option") to purchase that number of shares so
delivered to, or withheld by, the Corporation at an exercise price equal to the
fair market value per share of Common Stock on such date of exercise. The option
period for a Reload Stock Option will expire on the expiration date of the stock
option it replaces.
In the event that a participant exercises a stock option and receives a
Reload Stock Option as described above, the participant cannot transfer or
pledge that number of shares received by the participant which is equal to
one-half of the total number of shares delivered to and/or withheld by, the
Corporation upon the participant's exercise of the stock option (the "Restricted
Stock"), until the earliest to occur of the following events: (i) the expiration
of five years from the date of issuance of the Restricted Stock, (ii) in the
case of an employee, the retirement of such participant from the Corporation or
the subsidiary in accordance with standard retirement policies, (iii) in the
case of a non-employee director, officer or consultant of the Corporation, the
cessation of service to the Corporation of such participant in such capacity,
(iv) the death of such participant, (v) the total and permanent disability of
such participant, or (vi) a "Change in Control" of the Corporation (defined
below). Except for these restrictions on transfer, participants receiving shares
of Restricted Stock shall have all of the rights of a stockholder of the
Corporation, including the right to vote the shares and the right to receive any
dividends or other distributions thereon.
The amendments to the 1992 Plan provide that the Committee is vested with
full authority to accelerate the date on which options become exercisable.
TERMINATION OF EMPLOYMENT OR SERVICE. The 1992 Plan states that upon
termination of an optionee's employment or service with the Corporation by
reason of death, total and permanent disability, retirement or otherwise, as the
case may be, his option will be exercisable for a period of 180 days after such
termination to the extent the option was exercisable on the date of such
termination (so long as the option is exercised prior to the date of its stated
expiration). If the optionee dies or is disabled before the termination of his
rights to exercise his option in accordance with the provisions of his stock
option agreement, his option may be exercised according to its terms by his
estate or personal representative or by a person who acquired the right to
exercise the option by bequest or inheritance or by reason of the optionee's
death; provided that the option is exercised within 180 days after the
optionee's death or disability. The 1992 Plan provides that more restrictive
terms than the foregoing concerning exercises following termination of service
may be provided for in the particular stock option agreement.
The 1992 Plan provides that if an optionee who is an employee (including any
employee-director) retires in accordance with standard policies of the
Corporation, all stock options held by the optionee
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will become fully exercisable and vested. If an option granted under the 1992
Plan terminates or expires without having been exercised in full, the
unexercised shares subject to that option will be available for further grants
of options under the 1992 Plan.
The 1992 Plan provides that in the event of a "Change in Control" of the
Corporation, all stock options will become fully exercisable and vested,
regardless of provisions under option agreements requiring shares to be
exercised in installments. "Change in Control" is defined as the occurrence of
any of the following events: (i) a consolidation or merger in which the
Corporation does not survive, unless the Corporation's stockholders retain the
same proportionate common stock ownership in the surviving Corporation after the
merger, or a sale of all or substantially all of the Corporation's assets, (ii)
the approval by the Corporation's stockholders of a plan to dissolve or
liquidate the Corporation, (iii) a third party acquires 50.1% or more of the
Corporation's voting securities, or (iv) during any two-year period, persons who
constituted a majority of the Board at the beginning of such period cease to
serve as directors for any reason other than death, unless each new director was
approved by at least two-thirds of the directors then still in office who were
directors at the beginning of the two-year period.
ADJUSTMENTS
The 1992 Plan provides that the number of shares issuable upon exercise of
an option and the exercise price of such option are subject to such adjustments
as the Corporation may deem appropriate to reflect any stock dividend, stock
split, share combination, exchange of shares, recapitalization, merger,
consolidation, reorganization, sale of substantially all of the Corporation's
assets, liquidation or such similar events or occurrence, of or by the
Corporation. All stock options granted under the 1992 Plan may be canceled by
the Board upon the reorganization, merger, consolidation, dissolution,
liquidation or sale of substantially all of the assets of the Corporation,
subject to each optionee's right to exercise his option for a period of 30 days
immediately preceding the effective date of such event as to the shares of
Common Stock covered by his stock option, including shares as to which such
stock option would not otherwise be exercisable.
ADMINISTRATION OF THE 1992 PLAN
The 1992 Plan is administered by the Compensation Committee of the Board.
The Compensation Committee may grant options under the 1992 Plan and determine
the terms of options granted to key employees. The current members of the
Compensation Committee are Don Navarro, Chairman, John J. Fleming and Milan
Resanovich. The Board selects the members of the Compensation Committee from
among disinterested members of the Board. Members of the Compensation Committee
serve at the will of the Board and may be removed from the Compensation
Committee at any time at the Board's discretion.
AMENDMENT OF THE 1992 PLAN
The 1992 Plan provides that the Board may from time to time discontinue or
further amend the 1992 Plan without the consent of the stockholders unless such
discontinuance or amendment (i) materially increases the benefits accruing to
participants under the 1992 Plan, (ii) materially increases the number of
securities which may be issued under the 1992 Plan, or (iii) materially modifies
the requirements as to eligibility for participation in the 1992 Plan.
CERTAIN FEDERAL INCOME TAX ASPECTS
The following is a summary of the principal federal income tax consequences
associated with grants of options under the 1992 Plan. It does not describe all
federal income tax consequences under the 1992 Plan, nor does it describe
foreign, state or local tax consequences. Each participant is urged to consult
his or her personal tax advisor to determine the specific tax consequences to
him or her of the 1992 Plan.
NONQUALIFIED STOCK OPTIONS. The 1992 Plan is not a "qualified plan" within
the meaning of Section 401 of the Code. The granting of a nonqualified stock
option will not result in federal income tax consequences to either the
Corporation or the optionee. Upon exercise of a nonqualified stock
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option, the optionee will recognize ordinary income in an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the exercise price, and the Corporation will be entitled to a corresponding
deduction.
For purposes of determining gain or loss realized upon a subsequent sale or
exchange of such shares, the optionee's tax basis will be the sum of the
exercise price paid and the amount of ordinary income, if any, recognized by the
optionee. Any gain or loss realized by an optionee on disposition of such shares
generally will be a long-term capital gain or loss (if the shares are held as a
capital asset for at least one year) and will not result in any tax deduction to
the Corporation.
INCENTIVE STOCK OPTIONS. In general, no income will be recognized by an
optionee and no deduction will be allowed to the Corporation at the time of the
grant or exercise of an incentive stock option granted under the 1992 Plan. When
the stock received on exercise of the option is sold, provided that the stock is
held for more than two years from the date of grant of the option and more than
one year from the date of exercise, the optionee will recognize long-term
capital gain or loss equal to the difference between the amount realized and the
exercise price of the option related to such stock. If these holding period
requirements under the Code are not satisfied, the subsequent sale of stock
received upon exercise of an incentive stock option is treated as a
"disqualifying disposition." In general, the optionee will recognize taxable
income at the time of a disqualifying disposition as follows: (i) ordinary
income in an amount equal to the excess of the lesser of the fair market value
of the Common Stock on the date the incentive stock option is exercised or the
amount realized on such disqualifying disposition over the exercise price and
(ii) capital gain to the extent of any excess of the amount realized on such
disqualifying disposition over the fair market value of the Common Stock on the
date the incentive stock option is exercised (or capital loss to the extent of
any excess of the exercise price over the amount realized on disposition). Any
capital gain or loss recognized by the optionee will be long-term or short-term
depending upon the holding period for the stock sold. The Corporation may claim
a deduction at the time of the disqualifying disposition equal to the amount of
the ordinary income the optionee recognizes.
Although an optionee will not realize ordinary income upon the exercise of
an incentive stock option, the excess of the fair market value of the shares
acquired at the time of exercise over the option price is included in
"alternative minimum taxable income" for purposes of calculating the optionee's
alternative minimum tax, if any, pursuant to Section 55 of the Code.
WITHHOLDING. Withholding of federal taxes at applicable rates will be
required in connection with any ordinary income realized by a participant by
reason of the exercise of options granted pursuant to the 1992 Plan. A
participant must pay such taxes to the Corporation in cash or Common Stock prior
to the receipt of any Common Stock certificates.
The Board recommends that stockholders vote FOR the proposal to amend the
1992 Plan.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board, upon the recommendation of its Audit Committee, has selected
Ernst & Young LLP as independent accountants to examine the consolidated
financial statements of the Corporation for 1995. Stockholders are being asked
to ratify this appointment. The Corporation has been informed that neither Ernst
& Young LLP nor any of its partners have any direct financial interest or any
material indirect financial interest in the Corporation nor have had any
connection during the past three years with the Corporation in the capacity of
promoter, underwriter, voting trustee, director, officer or employee.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they so desire and to
be available to respond to appropriate questions.
The Board recommends that stockholders vote FOR the ratification of the
appointment of Ernst & Young LLP as the Corporation's independent accountants
for 1995.
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OTHER MATTERS
The Corporation will bear all costs of this proxy solicitation. In addition
to soliciting proxies by mail, directors, executive officers and employees of
the Corporation, without receiving additional compensation, may solicit proxies
by telephone, by telegram or in person. Arrangements will also be made with
brokerage firms and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of shares of the Common Stock,
and the Corporation will reimburse such brokerage firms and other custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection with forwarding such materials.
The Board does not know of any business to be presented for consideration at
the Annual Meeting other than that stated in the accompanying Notice. It is
intended, however, that the persons authorized under the Board's proxies may, in
the absence of instructions to the contrary, vote or act in accordance with
their judgment with respect to any other proposal properly presented for action
at such meeting.
The Annual Report to Stockholders for the fiscal year ended December 31,
1994, which includes financial statements, is enclosed herewith. The Annual
Report does not form a part of this Proxy Statement or the materials for the
solicitation of proxies to be voted at the annual meeting.
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT NO
CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS DELIVERED UPON RECEIPT OF A
WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO IMCO RECYCLING INC., ATTN: PAUL V.
DUFOUR, 5215 NORTH O'CONNOR BLVD., SUITE 940, CENTRAL TOWER AT WILLIAMS SQUARE,
IRVING, TEXAS 75039, TELEPHONE (214) 869-6575. THE CORPORATION WILL ALSO FURNISH
SUCH ANNUAL REPORT ON FORM 10-K TO ANY "BENEFICIAL OWNER" OF SUCH SECURITIES AT
NO CHARGE UPON RECEIPT OF A WRITTEN REQUEST, ADDRESSED TO MR. DUFOUR CONTAINING
A GOOD FAITH REPRESENTATION THAT, AT THE RECORD DATE, SUCH PERSON WAS A
BENEFICIAL OWNER OF SECURITIES OF THE CORPORATION ENTITLED TO VOTE AT THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD MAY 12, 1995. COPIES OF ANY EXHIBIT TO THE
FORM 10-K WILL BE FURNISHED UPON THE PAYMENT OF A REASONABLE FEE.
Information contained in the Proxy Statement relating to the occupations and
security holdings of directors and officers of the Corporation is based upon
information received from the individual directors and officers.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT
WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors
PAUL V. DUFOUR
SECRETARY
Irving, Texas
April 10, 1995
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APPENDIX I
IMCO RECYCLING INC.
1992 STOCK OPTION PLAN
(As amended December 15, 1994)
PURPOSE
The purpose of the Plan is to attract and retain key employees, consultants,
officers and directors of the Company and to provide such persons with a
proprietary interest in the Company through the granting of Incentive Stock
Options and Nonqualified Stock Options which will:
(a) increase the interest of such employees, consultants, officers and
directors in the Company's welfare;
(b) furnish an incentive to such employees, consultants, officers and
directors to continue their services for the Company; and
(c) provide a means through which the Company may attract able persons
to enter its employ or to serve as consultants, officers and directors.
ARTICLE I
DEFINITIONS
For the purpose of this Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:
1.1 "Board" means the board of directors of the Company.
1.2 "Change in Control" means the occurrence of any of the following
events: (i) there shall be consummated (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(excluding transfer by way of pledge or hypothecation), in one transaction or a
series of related transactions, of all, or substantially all, of the assets of
the Company, (ii) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company, (iii) any "person" (as such
term is defined in Section 3(a)(9) or Section 13(d)(3) under the 1934 Act) or
any "group" (as such term is used in Rule 13d-5 promulgated under the 1934 Act),
other than the Company or any successor of the Company or any Subsidiary of the
Company or any employee benefit plan of the Company or any Subsidiary (including
such plan's trustee), becomes a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Company representing 50.1% or more of the Company's then outstanding securities
having the right to vote in the election of directors, or (iv) during any period
of two consecutive years, individuals who, at the beginning of such period
constituted the entire Board, cease for any reason (other than death) to
constitute a majority of the directors, unless the election, or the nomination
for election, by the Company's stockholders, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Common Stock" means the common stock which the Company is currently
authorized to issue or may in the future be authorized to issue.
1.5 "Company" means IMCO Recycling Inc., a Delaware corporation.
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1.6 "Date of Grant" means the effective date on which an option is awarded
to a Participant as set forth in the stock option agreement.
1.7 "Eligible Participant" shall have the meaning set forth in Section 6.1
hereof.
1.8 "Fair Market Value" of the Company's shares of Common Stock means (i)
the closing price per share on any stock exchange on which the Common Stock is
traded, or (ii) the mean between the closing or average (as the case may be) bid
and asked prices per share of Common Stock on the over-the-counter market,
whichever is applicable.
1.9 "Incentive Stock Option" means an option to purchase shares of Common
Stock granted to an eligible Participant pursuant to Article V and which is
intended to qualify as an incentive stock option under Section 422 of the Code.
1.10 "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.11 "Nonqualified Stock Option" means an option to purchase shares of
Common Stock granted to a Participant pursuant to Article IV or Article V and
which is not intended to qualify as an incentive stock option under Section 422
of the Code.
1.12 "Participant" means any employee of the Company or any Subsidiary of
the Company or any non-employee director, officer or consultant of the Company
who is, or who is proposed to be, a recipient of a Stock Option.
1.13 "Plan" means the IMCO Recycling Inc. 1992 Stock Option Plan, as it may
be amended from time to time.
1.14 "Reload Stock Option" means a Nonqualified Stock Option or an
Incentive Stock Option granted pursuant to Section 7.2 hereof.
1.15 "Restricted Stock" shall have the meaning set forth in Section 7.3
hereof.
1.16 "Restriction Period" shall have the meaning set forth in Section 7.3
hereof.
1.17 "Spread" shall have the meaning set forth in Article XIII hereof.
1.18 "Stock Dividend" means a dividend or other distribution declared on
the shares of Common Stock payable in (i) capital stock of the Company or any
Subsidiary of the Company, or (ii) rights, options or warrants to receive or
purchase capital stock of the Company or any Subsidiary of the Company, or (iii)
securities convertible into or exchangeable for capital stock of the Company or
any Subsidiary of the Company, or (iv) any capital stock received upon the
exercise, or with respect to, the foregoing.
1.19 "Stock Options" shall mean any and all Incentive Stock Options,
Nonqualified Stock Options and Reload Stock Options granted pursuant to the
Plan.
1.20 "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the Stock
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain, and
"Subsidiaries" means more than one of any such corporations.
ARTICLE II
ADMINISTRATION
Subject to the terms of this Article II, the Plan shall be administered by
the Compensation Committee (the "Committee") of the Board, which shall consist
of at least two members. Any member of the Committee may be removed at any time,
with or without cause, by resolution of the Board. Any vacancy occurring in the
membership of the Committee may be filled by appointment by the Board.
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Each member of the Committee, at the time of his appointment to the Committee
and while he is a member thereof, must be a "disinterested person", as that term
is defined in Rule 16b-3 promulgated under the 1934 Act.
The Board shall select one of its members to act as the Chairman of the
Committee, and the Committee shall make such rules and regulations for its
operation as it deems appropriate. A majority of the Committee shall constitute
a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee. Subject
to the terms hereof, the Committee shall designate from time to time the key
employees, consultants, or officers of the Company to whom Stock Options will be
granted, interpret the Plan, prescribe, amend, and rescind any rules and
regulations necessary or appropriate for the administration of the Plan, and
make such other determinations and take such other action as it deems necessary
or advisable. In this regard, the Committee shall consider and give appropriate
weight to input from representatives of management of the Company regarding the
contributions or potential contributions to the Company or a Subsidiary of
certain of the employees, officers or consultants, or potential employees,
officers or consultants, of the Company or any Subsidiary.
The Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and the terms of
any Stock Options issued under it and to adopt such rules and regulations for
administering the Plan as it may deem necessary. The Committee may, in its
absolute discretion (except with respect to Stock Options granted to the
Company's non-employee directors pursuant to Article IV hereof) accelerate the
date on which any Stock Option granted under the Plan becomes exercisable.
Except as provided below, any interpretation, determination, or other action
made or taken by the Committee shall be final, binding, and conclusive on all
interested parties, including the Company and all Participants.
ARTICLE III
SHARES SUBJECT TO PLAN
The Committee may not grant Stock Options under the Plan for more than
1,150,000 shares of Common Stock of the Company (as may be adjusted in
accordance with Article XII or XIII hereof). Shares to be distributed and sold
may be made available from either authorized but unissued Common Stock or Common
Stock held by the Company in its treasury. Shares that by reason of the
expiration or unexercised termination of a Stock Option are no longer subject to
purchase may be reoffered under the Plan.
ARTICLE IV
NON-EMPLOYEE DIRECTORS' STOCK OPTIONS
The provisions of this Article IV shall apply only to Nonqualified Stock
Options granted under the Plan to non-employee directors of the Company.
4.1 ELIGIBILITY. Only non-employee directors of the Company shall be
eligible to receive grants of Nonqualified Stock Options under this Article IV.
4.2 GRANT OF STOCK OPTIONS. On December 15 of each year during the term of
this Plan (or if such date is not a business day, then on the next succeeding
business day thereafter), the Company shall grant to each non-employee director
of the Company a Nonqualified Stock Option to purchase that number of shares of
Common Stock determined by dividing the annual director's fee paid or accrued to
be paid to that director with respect to the 12-month period immediately
preceding such Date of Grant, by the Fair Market Value per share of the Common
Stock on the Date of Grant. Each grant of Nonqualified Stock Options under this
Article IV shall be evidenced by a stock option agreement setting forth the
total number of shares subject to the Nonqualified Stock Option, the option
exercise price, the term of the Nonqualified Stock Option and such other terms
and provisions as are consistent with the Plan.
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4.3 OPTION PRICE. The option exercise price for a Nonqualified Stock
Option granted under this Article IV shall be equal to the Fair Market Value per
share of Common Stock on the Date of Grant. Notwithstanding anything to the
contrary contained in this Section 4.3, the option exercise price of each
Nonqualified Stock Option granted pursuant to this Article IV shall not be less
than the par value per share of the Common Stock.
4.4 OPTION PERIOD. All Nonqualified Stock Options granted under this
Article IV shall automatically vest and be exercisable in full after the
expiration of six months from the Date of Grant. The period during which a
Nonqualified Stock Option granted under this Article IV may be exercised shall
expire ten years from the Date of Grant, unless sooner terminated pursuant to
Article VIII. No Nonqualified Stock Option granted under this Article IV may be
exercised at any time after its term.
ARTICLE V
STOCK OPTIONS FOR EMPLOYEES, CONSULTANTS AND OFFICERS
The provisions of this Article V shall apply only to Stock Options granted
under the Plan to key employees, consultants and officers of the Company or any
of its Subsidiaries, including directors who are employees of the Company and/or
any of its Subsidiaries and non-employee officers of the Company and/or any of
its Subsidiaries:
5.1 ELIGIBILITY. The Committee shall, from time to time, select the
particular key employees, consultants and officers of the Company and its
Subsidiaries to whom the Stock Options provided under this Article V are to be
granted and/or distributed in recognition of each such Participant's
contribution to the Company's or the Subsidiary's success. In this regard, the
Committee shall consider and give appropriate weight to input from
representatives of management of the Company regarding the contributions or
potential contributions to the Company or a Subsidiary of certain of the
employees, officers or consultants or potential employees, officers or
consultants of the Company or a Subsidiary.
5.2 GRANT OF STOCK OPTIONS. All grants of Stock Options under this Article
V shall be awarded by the Committee. Each grant of Stock Options shall be
evidenced by a stock option agreement setting forth the total number of shares
subject to the Stock Option, the option exercise price, the term of the Stock
Option, and such other terms and provisions as are approved by the Committee,
but, except to the extent permitted herein, are not inconsistent with the Plan.
In the case of an Incentive Stock Option, the stock option agreement shall also
include provisions that may be necessary to assure that the option is an
incentive stock option under the Code. The Company shall execute stock option
agreements upon instructions from the Committee.
5.3 OPTION PRICE. The option price for a Nonqualified Stock Option shall
be equal to the Fair Market Value per share of the Common Stock on the Date of
Grant. The option price for an Incentive Stock Option shall be determined by the
Committee and shall be an amount not less than the Fair Market Value per share
of the Common Stock on the Date of Grant; the Committee shall determine the Fair
Market Value of the Common Stock on the Date of Grant, and shall set forth the
determination in its minutes. Notwithstanding anything to the contrary contained
in this Section 5.3, the exercise price of each Stock Option granted pursuant to
the Plan shall not be less than the par value per share of the Common Stock.
5.4 OPTION PERIOD. The option period will begin and terminate on the
respective dates specified by the Committee, but may not terminate later than
ten years from the Date of Grant. No Stock Option granted under the Plan may be
exercised at any time after its term. The Committee may provide for the exercise
of Stock Options in installments and upon such terms, conditions and
restrictions as it may determine. The Committee shall have the right to
accelerate the time at which any Stock Option granted to an employee, consultant
or officer (including an employee director) shall become exercisable. In the
event of the retirement of an employee of the Company or a Subsidiary in
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accordance with the standard retirement policies of the Company or the
Subsidiary, as the case may be, all unmatured installments of Stock Options
outstanding shall automatically be accelerated and exercisable in full in
accordance with the provisions of Article VIII.
ARTICLE VI
LIMITS ON INCENTIVE STOCK OPTIONS
6.1 OPTION PERIOD. Notwithstanding the provisions of Sections 5.4 and 7.2
hereof, if a Participant eligible to receive a grant of an Incentive Stock
Option under Section 422 of the Code (an "Eligible Participant") owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company (or any Subsidiary of the Company) and an Incentive Stock Option is
granted to such Eligible Participant, the term of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be no more than
five years from the Date of Grant. In addition, the option price of any such
Incentive Stock Option granted to any such Eligible Participant owning more than
10% of the combined voting power of all classes of stock of the Company (or any
Subsidiary of the Company) shall be at least 110% of the Fair Market Value of
the Common Stock on the Date of Grant.
6.2 LIMITATION ON EXERCISES OF SHARES SUBJECT TO INCENTIVE STOCK
OPTIONS. To the extent required by the Code for incentive stock options, the
exercise of Incentive Stock Options granted under the Plan shall be subject to
the $100,000 calendar year limit as set forth in Section 422(d) of the Code.
6.3 DISQUALIFYING DISPOSITION. If stock acquired upon exercise of an
Incentive Stock Option is disposed of by an Eligible Participant prior to the
expiration of either two years from the Date of Grant of such option or one year
from the transfer of shares to such Eligible Participant pursuant to the
exercise of such option, or in any other disqualifying disposition within the
meaning of Section 422 of the Code, such Eligible Participant shall notify the
Company in writing of the date and terms of such disposition. A disqualifying
disposition by an Eligible Participant shall not affect the status of any other
option granted under the Plan as an incentive stock option within the meaning of
Section 422 of the Code.
6.4 TERMINATION. Notwithstanding the provisions of Article VIII, an
Eligible Participant's Incentive Stock Options shall terminate no later than
ninety (90) days after termination of such Participant's employment with the
Company and its Subsidiaries; PROVIDED that if such employment terminates by
reason of the death or total and permanent disability (as defined in Section
22(e) of the Code) of the Participant, then such Participant's Incentive Stock
Options shall terminate no later than one hundred eighty (180) days after such
termination by reason of death or disability.
ARTICLE VII
EXERCISE OF STOCK OPTIONS; RELOAD
STOCK OPTIONS; RESTRICTED STOCK
7.1 PAYMENT. Full payment for shares purchased upon exercise of a Stock
Option shall be made in cash or by the Participant's delivery to the Company of
shares of Common Stock which have a Fair Market Value equal to the option price
(or in any combination of cash and shares of Common Stock having an aggregate
Fair Market Value equal to the option price). No shares may be issued until full
payment of the purchase price therefor has been made, and a Participant will
have none of the rights of a stockholder until shares are issued to him.
7.2 RELOAD STOCK OPTIONS. Subject to the terms of this Section 7.2, in the
event that shares are delivered by a Participant in payment of all or a portion
of the exercise price of a Stock Option as set forth in Section 7.1 and/or
shares are delivered to or withheld by the Company in satisfaction of the
Company's tax withholding obligations upon exercise in accordance with Section
15.7, then a Participant so exercising a Nonqualified Stock Option shall
automatically be granted a Nonqualified Stock
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Option and a Participant so exercising an Incentive Stock Option shall
automatically be granted an Incentive Stock Option (in either case, a "Reload
Stock Option"), to purchase that number of shares so delivered to or withheld by
the Company, as the case may be, at an option exercise price equal to the Fair
Market Value per share of the Common Stock on the date of exercise (subject to
the provisions of Article VI regarding Incentive Stock Options and, in any event
not less than the par value per share of the Common Stock). The option period
for a Reload Stock Option will expire on the expiration date of the Stock Option
it replaces (subject to the provisions in Article VI regarding Incentive Stock
Options and the provisions of Article VIII), after which the Reload Stock Option
cannot be exercised. The Date of Grant of a Reload Stock Option shall be the
date that the Stock Option it replaces is exercised. A Reload Stock Option shall
automatically vest and be exercisable in full after the expiration of six months
from its Date of Grant. It shall be a condition to the grant of a Reload Stock
Option that promptly after its Date of Grant, a stock option agreement shall be
delivered to, and executed and delivered by the Participant and the Company
which sets forth the total number of shares subject to the Reload Stock Option,
the option price, the term of the Reload Stock Option and such other terms and
provisions as are consistent with the Plan.
7.3 RESTRICTED STOCK. In the event that a Participant exercises a stock
option and receives a Reload Stock Option under Section 7.2, the following
restrictions and conditions will apply to that number of the shares of Common
Stock (the "Restricted Stock") issued to the Participant upon such exercise,
which is equal to one-half of the sum of (i) the number of shares of Common
Stock delivered by the Participant to the Company in payment of the exercise
price, if any, plus (ii) the number of shares of Common Stock delivered to, or
withheld by, the Company in satisfaction of the Company's tax withholding
obligations under Section 15.7, if any:
(a) RESTRICTION PERIOD. Subject to the other provisions of this Plan,
each Participant shall not be permitted to sell, assign, transfer, pledge,
exercise or place any encumbrance on shares of Restricted Stock and any
Stock Dividends paid on or with respect to such Restricted Stock until the
earliest to occur of any of the following events (such period of restriction
being referred to herein as the "Restriction Period"):
(i) the expiration of five years from the date of issuance of the
Restricted Stock in the name of the Participant;
(ii) in the case of an employee of the Company or a Subsidiary, the
retirement of such Participant from the Company or the
Subsidiary in accordance with the standard retirement policies
of the Company or the Subsidiary, as the case may be;
(iii) in the case of a non-employee director, officer or consultant
of the Company, the cessation of service to the Company of
such Participant in such capacity;
(iv) the death of such Participant;
(v) the total and permanent disability of such Participant (as
defined in Article VIII hereof); or
(vi) a Change in Control of the Company.
(b) RIGHTS WITH RESPECT TO RESTRICTED STOCK. Except as otherwise
provided in the Plan, the Participant shall have, with respect to his or her
Restricted Stock (and any Stock Dividends paid on such Restricted Stock),
all of the rights of a stockholder of the Company, including the right to
vote the shares and the right to receive any dividends thereon. Each
Participant who is to receive Restricted Stock shall be issued a stock
certificate in respect of such shares of Restricted Stock, registered in the
name of the Participant, which shall bear an appropriate legend referring to
the restrictions applicable to such Restricted Stock, to read substantially
in the following form:
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"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions of the
IMCO Recycling Inc. 1992 Stock Option Plan. A copy of such Plan is
on file in the offices of IMCO Recycling Inc., 5215 North O'Connor
Blvd., Suite 940, Irving, Texas 75039."
ARTICLE VIII
TERMINATION OF EMPLOYMENT OR SERVICE
In the event a Participant who is an employee of the Company (including any
employee who is an officer or a director) or any Subsidiary shall cease to be
employed by the Company or a Subsidiary, or a Participant who is a non-employee
director or a non-employee officer or consultant of the Company or any
Subsidiary shall cease to serve in his capacity as a director, officer or
consultant, as the case may be, of the Company or any Subsidiary, for any reason
other than death, disability or retirement, such Participant's Stock Options may
be exercised by the Participant for a period of one hundred eighty (180) days
after the Participant's termination of employment or service, as the case may
be, or until expiration of the applicable Option Period (if sooner) to the
extent of the shares with respect to which such Stock Options could have been
exercised by the Participant on the date of termination, and thereafter to the
extent not so exercised, such Stock Options shall terminate. In addition, except
as provided in Section 6.4 with respect to Incentive Stock Options, a
Participant's Stock Options may be exercised as follows in the event of such
Participant's death, disability or retirement:
(a) DEATH. In the event of death while employed or while serving as a
(i) non-employee director, (ii) non-employee officer or (iii) consultant, as
the case may be, the Stock Option may be exercised, for a period of one
hundred eighty (180) days after the Participant's death or until expiration
of the Stock Option period (if sooner), to the extent of the shares with
respect to which the Stock Option could have been exercised by the
Participant on the date of the Participant's death, by the Participant's
estate or personal representative, or by the person who acquired the right
to exercise the Stock Option by bequest or inheritance or by reason of the
Participant's death; and
(b) DISABILITY OR RETIREMENT. In the event of termination of
employment of an employee (or termination of service in the case of a (i)
non-employee director, (ii) non-employee officer or (iii) consultant) as the
result of a total and permanent disability (as defined in Section 22(e) of
the Code) or as the result of retirement in accordance with the standard
retirement policies of the Company or the Subsidiary, as the case may be,
the Stock Option may be exercised by the Participant or his guardian for a
period of one hundred eighty (180) days after such termination or until
expiration of the Stock Option period (if sooner), to the extent of the
shares with respect to which the Stock Option could have been exercised by
the Participant on the date of such termination, after taking into account
any acceleration of unmatured installments of Stock Options pursuant to
Section 5.4.
Notwithstanding the foregoing, individual grants of Stock Options to
Participants under the Plan may provide, pursuant to the terms of the particular
stock option agreement, more restrictive terms than those contained in this Plan
concerning any exercise of such Stock Options with respect to any termination of
employment or service by such Participants.
ARTICLE IX
AMENDMENT OR DISCONTINUANCE
Subject to the limitations set forth in this Article IX, the Board may at
any time, without the consent of the Participants, alter, amend, revise,
suspend, or discontinue the Plan, provided that such action shall not, without
obtaining the approval of the stockholders of the Company, (i) materially
increase the benefits accruing to Participants under the Plan, (ii) materially
increase the number of securities which may be issued under the Plan, or (iii)
materially modify the requirements as to
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eligibility for participation in the Plan. Subject to the foregoing limitations,
the Board may amend the Plan or modify the agreements evidencing same in order
to comply with Section 16(b) of the 1934 Act and the rules and regulations
promulgated thereunder, as amended from time to time. The Board may not amend
the provisions of Article IV more than once during any six-month period unless
such amendment is deemed necessary in order to comply with the provisions of the
Code or the treasury regulations promulgated thereunder. The Committee may also
substitute new Stock Options for Stock Options previously granted to employees
of the Company or any of its Subsidiaries, including previously granted Stock
Options having higher exercise prices.
ARTICLE X
EFFECT OF THE PLAN
Neither the adoption of this Plan nor any action of the Board or the
Committee shall be deemed to give any director, officer, consultant or employee
any right to be granted a Stock Option to purchase or receive Common Stock of
the Company or any other rights except as may be evidenced by a stock option
agreement, or any amendment thereto, duly authorized by and executed on behalf
of the Company and then only to the extent of and upon the terms and conditions
expressly set forth therein.
ARTICLE XI
TERM
The Plan shall be submitted to the Company's stockholders for their
approval; PROVIDED, HOWEVER, that Stock Options may be granted under the Plan
prior to the time of stockholder approval. Unless sooner terminated by action of
the Board, the Plan will terminate on the 15th day of December, 2002. Stock
Options under the Plan may not be granted after that date, but Stock Options
granted before that date will continue to be effective in accordance with their
terms and conditions.
ARTICLE XII
CAPITAL ADJUSTMENTS
If at any time while the Plan is in effect or unexercised Stock Options are
outstanding there shall be any increase or decrease in the number of issued and
outstanding shares of Common Stock through the declaration of a Stock Dividend
or through any recapitalization resulting in a stock split-up, combination, or
exchange of shares of Common Stock, then and in such event:
(i) An appropriate adjustment shall be made in the maximum number of
shares of Common Stock then subject to being awarded under grants pursuant
to the Plan, to the end that the same proportion of the Company's issued and
outstanding shares of Common Stock shall continue to be subject to being so
awarded; and
(ii) Appropriate adjustments shall be made in the number of shares of
Common Stock and the exercise price per share thereof then subject to
purchase pursuant to each such Stock Option previously granted and
unexercised, to the end that the same proportion of the Company's issued and
outstanding shares of Common Stock in each instance shall remain subject to
purchase at the same aggregate exercise price.
Any fractional shares resulting from any adjustment made pursuant to this
Article XII shall be eliminated for the purposes of such adjustment. Except as
otherwise expressly provided herein, the issuance by the Company of shares of
its capital stock of any class, or securities convertible into shares of capital
stock of any class, either in connection with direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of or exercise price of shares of Common Stock then subject to
outstanding Stock Options granted under the Plan.
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ARTICLE XIII
RECAPITALIZATION, MERGER AND CONSOLIDATION
(a) The existence of this Plan and Stock Options granted hereunder shall
not affect in any way the right or power of the Company or its stockholders
to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or prior preference stocks ranking prior to or
otherwise affecting the Common Stock or the rights thereof (or any rights,
options or warrants to purchase same), or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(b) Subject to any required action by the stockholders, if the Company
shall be the surviving or resulting corporation in any merger or
consolidation, any outstanding Stock Option granted hereunder shall pertain
to and apply to the securities or rights (including cash, property or
assets) to which a holder of the number of shares of Common Stock subject to
the Stock Option would have been entitled.
(c) In the event of any reorganization, merger or consolidation pursuant
to which the Company is not the surviving or resulting corporation, or of
any proposed sale of substantially all of the assets of the Company, there
may be substituted for each share of Common Stock subject to the unexercised
portions of such outstanding Stock Option that number of shares of each
class of stock or other securities or that amount of cash, property or
assets of the surviving or consolidated company which were distributed or
distributable to the stockholders of the Company in respect of each share of
Common Stock held by them, such outstanding Stock Options to be thereafter
exercisable for such stock, securities, cash or property in accordance with
their terms. Notwithstanding the foregoing, however, the Board, in its sole
discretion, may cancel all such Stock Options as of the effective date of
any such reorganization, merger or consolidation, or of any such proposed
sale of substantially all of the assets of the Company, or of any
dissolution or liquidation of the Company, and either:
(i) give notice to each holder thereof or his personal representative
of its intention to cancel such Stock Options and permit the purchase
during the thirty (30) day period next preceding such effective date of
any or all of the shares subject to such outstanding Stock Options,
including shares as to which such Stock Options would not otherwise be
exercisable; or
(ii) pay the holder thereof an amount equal to a reasonable estimate
of an amount (hereinafter the "Spread") equal to the difference between
the net amount per share payable in such transaction or as a result of
such transaction, less the exercise price of such Stock Options. In
estimating the Spread, appropriate adjustments to give effect to the
existence of the Stock Options shall be made, such as deeming the Stock
Options to have been exercised, with the Company receiving the exercise
price payable thereunder, and treating the shares receivable upon
exercise of the Options as being outstanding in determining the net
amount per share. In cases where the proposed transaction consists of the
acquisition of assets of the Company, the net amount per share shall be
calculated on the basis of the net amount receivable with respect to
shares of Common Stock upon a distribution and liquidation by the Company
after giving effect to expenses and charges, including but not limited to
taxes, payable by the Company before such liquidation could be completed.
(d) In the event of a Change in Control of the Company, then,
notwithstanding any other provision in the Plan to the contrary, all
unmatured installments of Stock Options outstanding shall thereupon
automatically be accelerated and exercisable in full.
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(e) Notwithstanding subsection (c) above of this Article XIII, in case
the Company shall, at any time while any Stock Option under this Plan shall
be in force and remain unexpired, (i) sell all or substantially all of its
property or (ii) dissolve, liquidate, or wind up its affairs, then, provided
that the Board so determines in its sole discretion, each Participant may
thereafter receive upon exercise hereof (in lieu of each share of Common
Stock of the Company which such Participant would have been entitled to
receive) the same kind and amount of any securities or assets as may be
issuable, distributable or payable upon any such sale, dissolution,
liquidation, or winding up with respect to each share of Common Stock of the
Company. In the event that the Company shall, at any time prior to the
expiration of any Stock Option, make any partial distribution of its assets
in the nature of a partial liquidation, whether payable in cash or in kind
(but excluding the distribution of a cash dividend payable out of retained
earnings or earned surplus and designated as such), then in such event the
exercise prices then in effect with respect to each option shall be reduced,
as of the payment date of such distribution, in proportion to the percentage
reduction in the tangible book value of the shares of the Company's Common
Stock (determined in accordance with generally accepted accounting
principles) resulting by reason of such distribution; provided, that in no
event shall any adjustment of exercise prices in accordance with the terms
of the Plan result in any exercise prices being reduced below the par value
per share of the Common Stock.
(f) Upon the occurrence of each event requiring an adjustment of the
exercise price and/or the number of shares purchasable pursuant to Stock
Options granted pursuant to the terms of this Plan, the Company shall mail
forthwith to each Participant a copy of its computation of such adjustment
which shall be conclusive and shall be binding upon each such Participant,
except as to any Participant who contests such computation by written notice
to the Company within thirty (30) days after receipt thereof by such
Participant.
ARTICLE XIV
OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS
GRANTED BY OTHER CORPORATIONS
Stock Options may be granted under the Plan from time to time in
substitution for such stock options held by employees of a corporation who
become or are about to become employees of the Company or a Subsidiary as the
result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by either of the foregoing of stock
of the employing corporation as the result of which it becomes a Subsidiary. The
terms and conditions of the substitute options so granted may vary from the
terms and conditions set forth in this Plan to such extent as the Committee at
the time of grant may deem appropriate to conform, in whole or in part, to the
provisions of the options in substitution for which they are granted.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 EXERCISE OF STOCK OPTIONS. Stock Options granted under the Plan may
be exercised during the option period, at such times and in such amounts, in
accordance with the terms and conditions and subject to such restrictions as are
set forth herein and in the applicable stock option agreements. Notwithstanding
anything to the contrary contained herein, Stock Options may not be exercised,
nor may shares be issued pursuant to a Stock Option if any necessary listing of
the shares on a stock exchange or any registration under state or federal
securities laws required under the circumstances has not been accomplished.
15.2 NON-ASSIGNABILITY. A Stock Option granted to a Participant may not be
transferred or assigned, other than (i) by will or the laws of descent and
distribution or (ii) pursuant to the terms of a qualified domestic relations
order (as defined in Section 401(a)(13) of the Code or Section 206(d)(3) of the
Employee Retirement Income Security Act of 1974, as amended), provided, that in
the case of an
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Incentive Stock Option, such transfer or assignment may occur only to the extent
it will not result in disqualifying such option as an incentive stock option
under Section 422 of the Code, or any successor provision. Subject to the
foregoing, during a Participant's lifetime, Stock Options granted to a
Participant may be exercised only by the Participant or, provided the particular
stock option agreement so provides, by the Participant's guardian or legal
representative.
15.3 INVESTMENT INTENT. The Company may require that there be presented to
and filed with it by any Participant(s) under the Plan, such evidence as it may
deem necessary to establish that the Stock Options granted or the shares of
Common Stock to be purchased or transferred are being acquired for investment
and not with a view to their distribution.
15.4 ALLOTMENT OF SHARES. Except as otherwise set forth in Article IV, the
Committee shall determine the number of shares of Common Stock to be offered
from time to time by grant of Stock Options to Participants under the Plan. The
grant of a Stock Option to a Participant shall not, by itself, be deemed either
to entitle the Participant to, or to disqualify the Participant from,
participation in any other grant of Stock Options under the Plan.
15.5 NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any Stock
Option confers upon any employee the right to continue in the employ of the
Company or interferes with or restricts in any way the right of the Company to
discharge any employee at any time (subject to any contract rights of such
employee).
15.6 STOCKHOLDERS' RIGHTS. The holder of a Stock Option shall have none of
the rights or privileges of a stockholder except with respect to shares which
have been actually issued.
15.7 TAX REQUIREMENTS. Any employee who exercises any Stock Option shall
be required to pay the Company the amount of all taxes which the Company is
required to withhold as a result of the exercise of the Stock Option. With
respect to an Incentive Stock Option, in the event of a subsequent disqualifying
disposition of Common Stock within the meaning of Section 422 of the Code, such
payment of taxes may be made in cash, by check or through the delivery of shares
of Common Stock which the employee then owns, which shares have an aggregate
Fair Market Value equal to the required withholding payment, or any combination
thereof. With respect to the exercise of a Nonqualified Stock Option by a
Participant who is an officer, director or 10% stockholder of the Company (as
determined by reference to Section 16(b) of the 1934 Act and the rules
promulgated thereunder), any obligation of such Participant to pay such taxes
shall only be satisfied by the Company's withholding of that number of whole
shares of Common Stock otherwise issuable upon such exercise which have an
aggregate Fair Market Value which equals or exceeds (if necessary to avoid the
issuance of fractional shares) the required tax withholding payment. With
respect to the exercise of a Nonqualified Stock Option by any Participant who is
not such an officer, director or 10% stockholder of the Company, such
Participant's obligation to pay such taxes may be satisfied by the following, or
any combination thereof: (i) the delivery of cash to the Company in an amount
necessary to satisfy the required tax withholding obligation of the Company
and/or (ii) the actual delivery by the exercising Participant to the Company of
shares of Common Stock which the Participant owns and/or the Company's
withholding of a number of shares to be delivered upon the exercise of the Stock
Option), which shares so delivered or withheld have an aggregate Fair Market
Value which equals or exceeds (if necessary to avoid the issuance of fractional
shares) the required tax withholding payment. Any such withholding payments with
respect to the exercise of a Nonqualified Stock Option made by a Participant in
cash or by actual delivery of shares of Common Stock shall be required to be
made within thirty (30) days after the delivery to the Participant of any
certificate representing the shares of Common Stock acquired upon exercise of
the Stock Option.
15.8 INDEMNIFICATION OF BOARD AND COMMITTEE. No member of the Board or the
Committee, nor any officer or employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Committee and each and any officer or
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employee of the Company acting on their behalf shall, to the extent permitted by
law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
ARTICLE XVI
EFFECTIVE DATE
The effective date of the Plan shall be December 15, 1992, that is, the date
on which it was first approved and adopted by the Board. Notwithstanding the
amendment of this Plan effective as of December 15, 1994, neither the terms of
the Stock Options outstanding as of such date nor the Agreements entered into by
and between the Company and such relevant Participant in respect of such Stock
Options, shall be deemed to be amended in any way.
* * * * * * * * *
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REVOCABLE PROXY
IMCO RECYCLING INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Frank H. Romanelli and Paul V. Dufour,
or either of them, with full power of substitution, as proxies of the
undersigned, with all the powers that the undersigned would possess if
personally present to cast all votes that the undersigned would be entitled
to vote at the Annual Meeting of Stockholders of IMCO Recycling Inc. (the
"Corporation") to be held on Friday, May 12, 1995, at the Central Tower at
Williams Square, twenty-sixth floor, LaCima Club, Lakeside Room, 5215 North
O'Connor Blvd., Irving, Texas, at 9:00 A.M., Central time, and any and all
adjournments and postponements thereof (the "Annual Meeting"), including
(without limiting the generality of the foregoing) to vote and act as follows
on the reverse side.
This Proxy will be voted at the Annual Meeting or any adjournments or
postponements thereof as specified. IF NO SPECIFICATIONS ARE MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED ON THE
REVERSE SIDE AND FOR PROPOSALS 2 AND 3. This Proxy hereby revokes all prior
proxies given with respect to the shares of the undersigned.
(CONTINUED ON REVERSE SIDE)
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FOLD AND DETACH HERE
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<TABLE>
<S> <C> <C> <C> <C>
1. Election of Directors:
The election of the following nominees to the Board of Directors are Class I Directors, unless otherwise indicated below.
(a) Don V. Ingram (b) Thomas A. James (c) Frank H. Romanelli
IN THE EVENT THE UNDERSIGNED WISHES TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR
FOR AGAINST NOMINEE OR NOMINEES LISTED ABOVE, PLEASE SO INDICATE BY CLEARLY AND NEATLY LINING THROUGH
OR STRIKING OUT THE NAME OF ANY SUCH NOMINEE OR NOMINEES.
/ / / /
2. Proposal to approve and adopt 3. Proposal to ratify the appointment 4. In their discretion upon such
certain amendments to the of Ernst & Young LLP as the other matters as may properly
Corporation's 1992 Stock Option independent public accountants of come before the meeting or any
Plan. the Corporation for 1995. adjournment thereof.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Please complete, date, sign and mail this Proxy
promptly in the enclosed envelope. No postage
/ / / / / / / / / / / / is required for mailing in the United States.
Dated ___________________________________ , 1995
________________________________________________
Signature
________________________________________________
Signature
IMPORTANT: Please date the Proxy and sign exactly
as your name appears on this Proxy. If shares are
held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
----------------------------------------------- such. If a corporation, please sign in full
| PLEASE MARK INSIDE BLUE BOXES SO THAT DATA | corporate name by president or other authorized
| PROCESSING EQUIPMENT WILL RECORD YOUR VOTES | officer. If a partnership, please sign in
----------------------------------------------- partnership name by authorized person.
- - - ----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
Dear Stockholder(s):
Enclosed you will find material relative to the Corporation's
1995 Annual Meeting of Stockholders. The Notice of Annual
Meeting and Proxy Statement describe the formal business to be
transacted at the meeting, as summarized on the attached proxy
card.
Whether or not you expect to attend the Annual Meeting, please
complete and return promptly the attached proxy card in the
accompanying envelope, which requires no postage if mailed in
the United States. As a stockholder, please remember that your
vote is important to us. We look forward to hearing from you.
IMCO Recycling Inc.
