<PAGE>
As filed with the Securities and Exchange Commission on June 28, 1996.
REGISTRATION NO. 33-_______
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
____________________
IMCO RECYCLING INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2008280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5215 NORTH O'CONNOR BLVD., SUITE 940
CENTRAL TOWER AT WILLIAMS SQUARE
IRVING, TEXAS 75039
(214) 869-6575
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________
IMCO RECYCLING INC. ANNUAL INCENTIVE PROGRAM
(Full Title of Plan)
PAUL V. DUFOUR
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
IMCO RECYCLING INC.
5215 NORTH O'CONNOR BLVD., SUITE 940
CENTRAL TOWER AT WILLIAMS SQUARE
IRVING, TEXAS 75039
(214) 869-6575
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
HAYNES AND BOONE, L.L.P.
1000 LOUISIANA, SUITE 4300
HOUSTON, TEXAS 77002
ATTN: MARC H. FOLLADORI
(713) 547-2000
____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Proposed
Maximum Proposed Maximum Amount of
Title of Amount to be Offering Price Aggregate Offering Registration
Securities to be Registered Registered(1)(2) Per Share(2) Price(2) Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.10 per share 500,000 shares $18.125 $9,062,500 $3,126
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the anti-dilution
provisions of the Plan.
(2) The 500,000 shares registered hereby represent shares issuable pursuant to
the Company's IMCO Recycling Inc. Annual Incentive Program. With respect
to the shares registered hereby, the offering price per share, the
aggregate offering price and the registration fee have been calculated in
accordance with paragraphs (c) and (h)(1) of Rule 457 on the basis of the
average high and low sale prices for the Company's Common Stock on June 25,
1996, as reported on the New York Stock Exchange composite tape ($18.125
per share).
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The contents of the following documents filed by Imco Recycling Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated into this registration
statement ("Registration Statement") by reference:
(a) The Company's Annual Report, dated March 25, 1996, as filed with the
Commission on Form 10-K, File No. 1-7170, for the fiscal year ended December
31, 1995;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since
December 31, 1995; and
(c) The description of the Company's common stock, par value $.10 per
share (the "Common Stock"), set forth under the caption "Description of
Capital Stock -- Common Stock" in the Company's registration statement on
Form S-2, dated June 11, 1992, Registration No. 33-48571.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the
filing date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement which indicates that
all securities offered have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents. The Company will provide, without charge, each participant in the
Company's Annual Incentive Program, as amended (the "Plan"), upon written or
oral request of such person, a copy (without exhibits, unless such exhibits
are specifically incorporated by reference) of any or all of the documents
incorporated by reference pursuant to this Item 3.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action.
In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees,
actually and reasonably incurred in connection with the defense or
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<PAGE>
settlement of such action, and the corporation may not indemnify for amounts
paid in satisfaction of a judgment or in settlement of the claim. In any
such action, no indemnification may be paid in respect of any claim, issue or
matter as to which such person shall have been adjudged liable to the
corporation except as otherwise approved by the Delaware Court of Chancery or
the court in which the claim was brought. In any other type of proceeding,
the indemnification may extend to judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection with such other
proceeding, as well as to expenses.
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner be reasonably
believed to be in, or not opposed to, the best interests of the corporation
and, in the case of criminal actions or proceedings, the person had no
reasonable cause to believe his conduct was unlawful. The statute contains
additional limitations applicable to criminal actions and to actions brought
by or in the name of the corporation. The determination as to whether a
person seeking indemnification has met the required standard of conduct is to
be made (1) by a majority vote of the disinterested directors, even though
less than a quorum, (2) if there are no disinterested directors or if the
disinterested directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders.
The Company's Bylaws require the Company to indemnify its directors,
officers, employees, and agents to the fullest extent permitted under
Delaware law. The company's Certificate of Incorporation also requires the
Company to indemnify its directors and officers to the fullest extent
permitted under Delaware law. The Company's Certificate of Incorporation
provides that a director of the corporation shall not be held personally
liable to the corporation or its shareholders for monetary damages for breach
of a director's fiduciary duty of care, except that a director shall continue
to be held personally liable for (i) breach of the duty of loyalty, (ii)
failure to act in good faith, (iii) engaging in intentional misconduct or
knowingly violating a law, (iv) paying a dividend or approving a stock
repurchase which was illegal under Delaware law, or (v) obtaining an improper
personal benefit.
The Company has purchased insurance on behalf of its directors and
officers against certain liabilities that may be asserted against, or
incurred by, such persons in their capacities as directors or officers of the
registrant, or that may arise out of their status as directors or officers of
the registrant, including liabilities under the federal and state securities
laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit Description
- ------- -----------
4.1 Specimen certificate for shares of the Company's common stock, par
value $.10 per share. Exhibit 4.1 to the Company's Registration
Statement on Form S-2 ("No. 33-48571"), is incorporated herein by
reference.
4.2 The Company's Annual Incentive Program.
5.1 Opinion of Haynes and Boone, L.L.P.
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<PAGE>
23.1 Consent of Ernst & Young LLP
23.2 Consent of Haynes and Boone, L.L.P. (included in Exhibit 5.1 opinion).
24.1 Power of Attorney (included on the signature page hereto).
ITEM 9. UNDERTAKINGS.
A. UNDERTAKING TO UPDATE
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. UNDERTAKING WITH RESPECT TO DOCUMENTS INCORPORATED BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
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<PAGE>
C. UNDERTAKING WITH RESPECT TO DELIVERY OF DOCUMENTS
(1) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the documents constituting the prospectus
to each participant to whom such prospectus is sent or given, a copy
of the registrant's annual report to stockholders for its last fiscal
year, unless such participant otherwise has received a copy of such
report in which case the registrant shall state in such prospectus
that it will promptly furnish, without charge, a copy of such report
on written request of the participant.
(2) The undersigned registrant hereby undertakes to transmit or
cause to be transmitted to all participants who do not otherwise
receive such material as stockholders of the registrant, at the time
and in the manner such material is sent to its stockholders, copies of
all reports, proxy statements and other communications distributed to
its stockholders generally.
D. UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Irving, State of Texas, on June 27,
1996.
IMCO RECYCLING INC.
By: /S/ PAUL V. DUFOUR
------------------------------------------
Paul V. Dufour
Executive Vice President - Finance and
Administration and Chief Financial Officer
(Principal Financial Officer)
POWER OF ATTORNEY
Each of the undersigned hereby appoints Don V. Ingram, Frank H. Romanelli
and Paul V. Dufour and each of them (with full power to act alone), as
attorney and agents for the undersigned, with full power of substitution, for
and in the name, place and stead of the undersigned, to sign and file with
the Securities and Exchange Commission under the Securities Act of 1933 any
and all amendments and exhibits to this Registration Statement and any and
all applications, instruments and other documents to be filed with the
Securities and Exchange Commission pertaining to the registration of the
securities covered hereby, with full power and authority to do and perform
any and all acts and things whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on June 27, 1996.
SIGNATURE TITLE
--------- -----
/S/ DON V. INGRAM Director, Chairman of the Board of Directors
- -------------------------
Don V. Ingram
/S/ FRANK H. ROMANELLI Director, President and
- ------------------------- Chief Executive Officer
Frank H. Romanelli (Principal Executive Officer)
/S/ PAUL V. DUFOUR Executive Vice President - Finance and
- ------------------------- Administration and Chief Financial Officer
Paul V. Dufour (Principal Financial Officer)
/S/ ROBERT R. HOLIAN Vice President and Controller (Principal
- ------------------------- Accounting Officer)
Robert R. Holian
/S/ JACK M. BRUNDRETT Director
- -------------------------
Jack M. Brundrett
- ------------------------- Director
John J. Fleming
- ------------------------- Director
Richard Hanselman
- ------------------------- Director
Ralph L. Cheek
/S/ DON NAVARRO Director
- -------------------------
Don Navarro
/S/ JACK C. PAGE Director
- -------------------------
Jack C. Page
- ------------------------- Director
Thomas A. James
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<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
4.1 Specimen certificate for shares of the Company's common stock, par
value $0.10 per share. Exhibit 4.1 to the Company's Registration
Statement on Form S-2 (No. 33-48571) is incorporated herein by
reference.
*4.2 The Company's Annual Incentive Program.
*5.1 Opinion of Haynes and Boone, L.L.P.
*23.1 Consent of Ernst & Young LLP
*23.2 Consent of Haynes and Boone, L.L.P. (included in Exhibit 5.1
opinion).
*24.1 Power of Attorney (included on the signature page hereto).
______________________
* Filed herewith
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<PAGE>
EXHIBIT 4.2
IMCO RECYCLING INC.
ANNUAL INCENTIVE PROGRAM
PURPOSE
The purpose of the IMCO Recycling Inc. Annual Incentive Program is to
advance the interests of IMCO Recycling Inc. and its stockholders by
providing certain key employees with annual incentive compensation which is
tied to the achievement of preestablished and objective performance goals.
The Plan is intended to provide Participants with annual incentive
compensation which is not subject to the deduction limitation rules
prescribed under Section 162(m) of the Code, and should be construed to the
extent possible as providing for remuneration which is "performance-based
compensation" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder. The Plan also provides for the payment
of an annual retainer to the Company's non-employee directors.
ARTICLE I
DEFINITIONS
For the purpose of this Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:
"ANNUAL DIFFERENCE" has the meaning assigned to it in Article V.
"ANNUAL ELECTION" has the meaning assigned to it in Section 7.4.
"ANNUAL RETAINER" has the meaning assigned to it in Article XII.
"AVERAGE EPS" has the meaning assigned to it in Article VI.
"BASE SALARY" means the actual base salary of a Participant (exclusive of
Bonuses and any compensation under any other employee compensation or benefit
plans of the Company) paid or to be paid, as the case may be, to a Participant
with respect to the Bonus Year in question, according to the books and records
of the Company and its Subsidiaries.
"BOARD" means the board of directors of the Company.
"BONUS" means either or both, as the context may require, of a ROTA Bonus
or an EPS Bonus actually awarded pursuant to the Plan.
"BONUS YEAR" means the fiscal year of the Company and its Subsidiaries with
respect to which a Bonus is calculated.
"BONUSABLE AMOUNT" has the meaning assigned to it in Article VI.
"COMMITTEE" has the meaning assigned to it in Article II.
"CHANGE IN CONTROL" means the occurrence of any of the following events: (i)
there shall be consummated any merger or consolidation pursuant to which shares
of the Company's Common Stock would be converted into cash, securities or other
property, or any sale, lease, exchange or other disposition (excluding
disposition by way of mortgage, pledge or hypothecation), in one transaction or
a series of related transactions, of all or substantially all of the assets of
the Company (a "Business Combination"), in each case unless, following such
Business Combination, all or substantially all of the holders of the outstanding
Common Stock immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50.1% of the outstanding common stock or
equivalent equity interests of the corporation or entity resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns
<PAGE>
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the outstanding Common Stock, (ii) the stockholders of the
Company approve any plan or proposal for the complete 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 a majority of the directors then still in
office who were directors at the beginning of the period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock which the Company is currently
authorized to issue or may in the future be authorized to issue.
"COMPANY" means IMCO Recycling Inc., a Delaware corporation.
"DATE OF GRANT" means the effective date on which an option is awarded to a
Participant as set forth in the stock option agreement.
"EARNINGS PER SHARE" or "EPS" means:
(a) with respect to a Final Payment Date, (i) the sum of (a) the
consolidated net earnings of the Company and its Subsidiaries for the
Bonus Year in question, as reported in the Company's audited
consolidated statement of earnings for such fiscal year prepared in
accordance with GAAP PLUS (b) the total of all bonus amounts (as tax
affected at the federal statutory rate) for the Participants actually
deducted in determining such amount for such fiscal year divided by (ii)
the number of shares of Common Stock used to calculate the Company's
earnings per share as reported in the Company's audited consolidated
statement of earnings for such fiscal year prepared in accordance with
GAAP; and
(b) with respect to a Preliminary Payment Date, (i) the sum of (a) the
consolidated net earnings of the Company and its Subsidiaries for the
Bonus Year in question to date PLUS (b) the total of all bonus amounts
(as tax affected at the federal statutory rate) for the Participants
accrued to date, in both instances annualized to give effect to the
Bonus Year in question, divided by (ii) the estimated number of shares
of Common Stock to be used to calculate the Company's earnings per share
for the Bonus Year in question. In this regard, the Committee shall be
entitled to rely in good faith upon, and shall be protected in so
relying upon, estimates based upon consolidated financial statements and
other books and records of the Company and its Subsidiaries.
"ELIGIBLE PARTICIPANT" shall have the meaning set forth in Section 9.1
hereof.
"EPS BONUS" has the meaning assigned to it in Article VI.
"FAIR MARKET VALUE" of the Company's shares of Common Stock means (i)
the closing sale price per share on the principal securities exchange on
which the Common Stock is traded (or if there is no sale on the relevant
date, then on the last previous day on which a sale was reported), or (ii)
the mean between the closing
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<PAGE>
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.
"FINAL PAYMENT DATE" means the business day selected by the Committee
upon which the Committee shall make final Bonus calculations in accordance
with Section 7.3, which shall be a date after the Company's independent
accounting firm issues its audit report on the Company's financial statements
with respect to the Bonus Year in question.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the American Institute of Certified
Public Accountants acting through the Accounting Principles Board or by the
Financial Accounting Standards Board or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as
to properly reflect the financial condition and the results of operations of
the Company and its Subsidiaries, except that any accounting principle or
practice required to be changed by such Financial Accounting Standards Board
(or other appropriate board or committee of such board) in order to continue
as a generally accepted accounting principle or practice may so be changed.
"GUIDELINES" has the meaning assigned to it in Section 7.4.
"INCENTIVE STOCK OPTION" means an option to purchase shares of Common Stock
granted to an Eligible Participant pursuant to Article IX and which is intended
to qualify as an incentive stock option under Section 422 of the Code.
"JOINT VENTURE" means any joint venture or other corporation, partnership or
other entity or organization, whether incorporated or unincorporated, in which
the Company and/or any of its Subsidiaries own an equity interest or interests
which, in the aggregate, do not constitute at least a majority of the common
equity interests or voting interests which entitle the holder(s) to elect at
least a majority of the members of the board of directors or equivalent
governing body of the corporation, partnership or organization in question.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"NONQUALIFIED STOCK OPTION" means an option to purchase shares of Common
Stock granted to a Participant pursuant to Article VIII and which is not
intended to qualify as an incentive stock option under Section 422 of the
Code.
"OPTION AMOUNT" has the meaning assigned to it in Section 8.1.
"PARTICIPANT" means any key employee of the Company or any of its
Subsidiaries that the Committee has determined to be eligible for
participation in the Plan and who, on the particular Payment Date, is,
subject to Article IV of the Plan, then employed by the Company or any of its
Subsidiaries.
"PAYMENT DATE" means either a Preliminary Payment Date or a Final Payment
Date.
"PLAN" means the IMCO Recycling Inc. Annual Incentive Program, as it may be
amended from time to time.
"PRELIMINARY PAYMENT DATE" means a business day selected by the Committee
in its sole discretion during the last month of the fiscal year constituting
the Bonus Year in question, upon which date the Committee shall calculate and
declare Bonuses in accordance with Section 7.3.
"PROFITS BEFORE TAXES" or "PBT" means:
(a) with respect to a Final Payment Date, (i) the income (or loss),
before provision for income taxes of the Company and its Subsidiaries for
the Bonus Year in question, determined by
-3-
<PAGE>
reference to the Company's audited consolidated statement of earnings
for such fiscal year prepared in accordance with GAAP, PLUS (ii) the sum
of all bonus amounts for the Participants actually deducted in
determining such amount for such fiscal year; and
(b) with respect to a Preliminary Payment Date, (i) the income
(or loss) before provision for income taxes of the Company and its
Subsidiaries for the Bonus Year in question to date (determined by
reference to the most recent unaudited consolidated statement of
earnings for such Bonus Year to date, prepared in accordance with GAAP),
and then annualized to give effect to estimated results for the entire
fiscal year, PLUS (ii) the estimated sum of all bonus amounts for the
Participants to be deducted in determining such estimated annualized
amount for the entire fiscal year. In this regard, the Committee shall
be entitled to rely in good faith upon, and shall be protected in so
relying upon, estimates based upon consolidated financial statements and
other books and records of the Company and its Subsidiaries.
"RELOAD STOCK OPTION" means a Nonqualified Stock Option or an Incentive
Stock Option granted pursuant to Section 10.2.
"RESTRICTED STOCK" shall have the meaning set forth in Section 10.3.
"RESTRICTION PERIOD" shall have the meaning set forth in Section 10.3.
"RETURN ON TOTAL ASSETS" or "ROTA" means, on a Preliminary Payment Date or a
Final Payment Date, as the case may be, the quotient, expressed as a percentage,
derived from (i) PBT with respect to the Bonus Year in question being divided by
(ii) Total Assets as of the beginning of that Bonus Year.
"ROTA BONUS" has the meaning assigned to it in Article V.
"SPREAD" shall have the meaning set forth in Article XVII hereof.
"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.
"STOCK OPTIONS" shall mean any and all Incentive Stock Options,
Nonqualified Stock Options and Reload Stock Options granted pursuant to the
Plan.
"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 more than 50% 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.
"TOTAL ASSETS" means, on a Preliminary Payment Date or a Final Payment
Date, as the case may be, the total assets of the Company and its
Subsidiaries (exclusive of interests in, or assets attributable to, as the
case may be, Joint Ventures) as of the beginning of the Bonus Year in
question, as reported in the Company's audited consolidated balance sheet as
of the last day of the immediately preceding fiscal year, prepared in
accordance with GAAP.
"TOTAL BONUS" means the aggregate compensation, if any, awarded to a
Participant on the Preliminary Payment Date and the Final Payment Date for
any Bonus Year pursuant to a ROTA Bonus and/or an EPS Bonus.
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<PAGE>
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.
Each member of the Committee, at the time of his appointment to the Committee
and while he is a member thereof, must be (i) a "disinterested person" as that
term is defined in Rule 16b-3 promulgated under the 1934 Act and (ii) an
"outside director" as such term is used in Code Section 162(m).
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 of the Company to be designated as Participants, 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.
The Committee shall have full authority and responsibility to administer
the Plan, including authority to interpret and construe any provision of the
Plan and the terms of any award issued under it and to adopt such rules and
regulations for administering the Plan as it may deem necessary. 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
Subject to the provisions of Articles XVI and XVII of the Plan, the
aggregate number of shares which may be issued to Participants under grants of
Stock Options and in payment of Bonuses made by the Committee under the Plan
shall be:
(a) 500,000 shares of Common Stock; plus
(b) the number of shares that are delivered or tendered, or withheld
from any exercise, by a Participant as full or partial payment made to
the Company in connection with the exercise price of any Stock Option or
in connection with satisfying the Participant's tax withholding
obligations pursuant to Section 19.6 of the Plan, to the extent that a
Reload Stock Option is granted to purchase such number of shares so
delivered to or withheld by the Company.
The aggregate number of shares of Common Stock that may be represented by
grants of Stock Options made to any Participant under the Plan in any Bonus Year
may not exceed 100,000 shares. Shares to be distributed and sold under the Plan
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. Shares of Common Stock that are
forfeited pursuant to the terms of the Plan shall be returned to the Plan and
made available for future grant.
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ARTICLE IV
ELIGIBILITY
The Committee shall, from time to time, but not less often than annually,
select the particular key members of management of the Company and its
Subsidiaries to whom Bonuses and Stock Options provided for under the Plan may
be granted. Employees who participate in this Plan may also participate in
other incentive or benefit plans of the Company or any Subsidiary. As used
herein, the term "employee" shall mean any person employed full-time by the
Company or Subsidiary on a salaried basis, and the term "employment" shall mean
full-time salaried employment by the Company or a Subsidiary.
ARTICLE V
ROTA BONUS
Subject to and in accordance with the terms of this Plan, on each Payment
Date, the Committee shall compute in good faith the Return on Total Assets by
reference to (i) the Total Assets and (ii) the most recent audited, or, in the
case of the Preliminary Payment Date, unaudited consolidated statement of
earnings for the Company and its Subsidiaries for the Bonus Year in question
which unaudited statement of earnings shall reflect (or shall be annualized to
give effect to) results for the entire Bonus Year. In the event that the Return
on Total Assets is greater than ten percent (10%), then Participants may be
eligible for a Bonus to be calculated as follows ("ROTA Bonus"):
(a) First, there shall be determined the "Bonusable Amount" for each
Participant, which shall be the dollar amount calculated by deducting
$50,000 from such Participant's Base Salary;
(b) Second, the Committee shall calculate the difference between the
ROTA for the relevant Bonus Year and ten percent (10%), which difference
shall be expressed as a percentage (the "Annual Difference"); and
(c) Third, the Annual Difference shall be multiplied by three (3) and
the product thereof, expressed as a percentage, shall be multiplied by the
Participant's Bonusable Amount to yield the maximum ROTA Bonus amount with
respect to such Participant.
ARTICLE VI
EPS BONUS
Subject to and in accordance with the terms of this Plan, on each Payment
Date, the Committee shall compute in good faith the Company's Earnings Per Share
by reference to the most recent audited, or, in the case of the Preliminary
Payment Date, unaudited consolidated statement of earnings for the Company and
its Subsidiaries for the Bonus Year in question which unaudited statement of
earnings shall reflect (or shall be annualized to give effect to) the results
for the entire Bonus Year. Participants may be eligible for a Bonus to be
calculated as follows ("EPS Bonus"):
(a) First, the Committee shall calculate the average EPS for the
preceding three fiscal years by dividing the sum of EPS for each of the
preceding three fiscal years by three (3) (the "Average EPS"); and
(b) Second, the EPS for the applicable Bonus Year shall be divided by
the Average EPS, which amount shall reduced by 1.0 and shall be expressed
as a percentage; and
(c) Third, if such percentage is a positive number, such percentage
amount shall be multiplied by the Participant's Bonusable Amount to yield
the maximum EPS Bonus amount for such Participant.
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ARTICLE VII
PAYMENT OF BONUSES AND GENERAL PROVISIONS
7.1 COMMITTEE DETERMINATION; LIMITATIONS. Subject to the terms of this
Plan, the Committee shall, from time to time, determine the time or times at
which Bonuses will be paid, the selection of the Preliminary Payment Date and
the Final Payment Date, the determination and payment of Bonuses to Participants
and all other terms and conditions regarding the Bonuses, which terms and
conditions shall be consistent with this Plan. Notwithstanding anything to the
contrary herein, the value of the maximum Total Bonus payable to any Participant
with respect to any Bonus Year shall not exceed $750,000.
7.2 REDUCTION OF BONUS. The maximum Bonus amounts for any Participant
under the Plan calculated in accordance with Articles V and VI hereof may be
reduced by an amount of up to 50% by the Committee in its sole discretion;
PROVIDED, HOWEVER, that under no circumstances may the amount of a maximum Bonus
so determined in accordance with Articles V and VI to any Participant be
increased. In determining whether a Bonus will be reduced, the Committee shall
consider any extraordinary changes which may occur during the Bonus Year, such
as changes in accounting practices or applicable law, and shall consider such
individual or business performance criteria that it deems appropriate,
including, but not limited to, the Company's net income, operating earnings,
gross margins, return on investment, return on equity and other relevant
operating and strategic business indicia and results applicable to an individual
Participant.
7.3 PAYMENTS ON PRELIMINARY AND FINAL PAYMENT DATES. As a condition to
eligibility for receipt of a Bonus with respect to any particular Bonus Year, a
Participant shall be required to be in the employ of the Company or one of its
Subsidiaries through the applicable Payment Date, UNLESS (i) such Participant
terminated his or her employment during such period due to retirement from the
Company and its Subsidiaries in accordance with the standard retirement policies
of the Company and its Subsidiaries then in effect, or (ii) the Participant,
while in the employ of the Company or one of its Subsidiaries, became totally
and permanently disabled (as that term is defined in Section 22(e) of the Code)
or died during such period.
On the Preliminary Payment Date, the Committee shall calculate the Bonuses
in accordance with Articles V and VI (and Section 7.2, if applicable) and award
80% of the aggregate of the ROTA Bonus and the EPS Bonus, if any, payable to a
Participant. The Committee shall instruct the Company, or instruct the Company
to cause any Subsidiary, as applicable, to pay to each Participant his Bonus in
accordance with this Article VII, as promptly as reasonably practicable after
such Preliminary Payment Date.
On the Final Payment Date, the Committee shall calculate the Bonus in
accordance with Articles V and VI (and Section 7.2), and either:
(a) allocate and distribute the portions of the Bonus which had not
been previously awarded to Participants following the Preliminary
Payment Date; PROVIDED, HOWEVER, that subject to this Section 7.3, in
order for a Participant to receive a Bonus on the Final Payment Date, it
shall be a requirement that such Participant shall be employed by the
Company or its Subsidiaries on such Final Payment Date; or
(b) if the amount of the Bonus calculated as of the Final Payment Date
is less than the portion of the Bonus which had previously been awarded
to the Participants on the Preliminary Payment Date, the difference
shall be subtracted from the amount of the Bonus or Bonuses payable in
the next succeeding Bonus Year or Bonus Years, if any, until such
difference has been eliminated.
7.4 STOCK OWNERSHIP GUIDELINES. The Committee shall, from time to time,
establish guidelines for the ownership of shares of the Company's Common Stock
for Participants (the "Guidelines"). The Guidelines may be altered or amended
by the Committee at any time and from time to time in its sole discretion and
are to be utilized in determining the portions of a Participant's Bonus payable
in cash and in Common Stock. On June 1 of each Bonus Year, each Participant
shall irrevocably elect, in writing, the percentages of such Participant's Bonus
to be paid in cash and
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in shares of Common Stock (the "Annual Election"). On November 30 of each
Bonus Year, the Committee shall determine, by reference to the Guidelines,
whether a Participant's stock ownership then meets or exceeds the Guidelines.
If, as of such November 30, a Participant's Common Stock ownership meets or
exceeds the Guidelines, such Participant's Bonus, after giving effect to
deductions of amounts for applicable tax withholding requirements, shall be
paid in proportions of cash and shares of Common Stock, on the applicable
Preliminary Payment Date and Final Payment Date, in accordance with the
allocation set forth in such Participant's Annual Election. If, on the other
hand, such Participant's Common Stock ownership does not then meet such
Guidelines, such Participant's Bonus shall be paid, after giving effect to
deductions of amounts for applicable tax withholding requirements, on the
applicable Preliminary Payment Date and Final Payment Date, in accordance
with percentages of Common Stock and cash established by the Committee under
the Guidelines from time to time and at any time then in effect with respect
to the applicable Bonus Year. Notwithstanding the foregoing, in the event
that a Participant's Annual Election provides for a GREATER percentage of
such Participant's Bonus to be paid in shares of Common Stock than the
percentage determined by reference to the Guidelines, then such Participant's
Annual Election shall control.
7.5 PAYMENT OF BONUS IN SHARES OF COMMON STOCK. In the event that all or
any portion of a Participant's Bonus is to be paid in shares of Common Stock,
the number of shares of Common Stock issued to such Participant as of any
Payment Date shall be determined by dividing the dollar amount of the portion of
the Bonus to be payable in Common Stock (after deduction of amounts for
applicable withholding tax requirements) by the Fair Market Value on the third
trading day prior to the Preliminary Payment Date or the Final Payment Date,
whichever is applicable. Fractional shares resulting from such calculation
shall be paid in cash equal to the fractional amount multiplied by the Fair
Market Value on the third trading day prior to the Preliminary Payment Date or
the Final Payment Date, whichever is applicable.
7.6 PARTIAL FISCAL YEARS. In the event that the Company and its
Subsidiaries adopt any different fiscal year which results in a fiscal year
having less than twelve months, the Committee shall, in its sole discretion,
award Bonuses computed as provided in Articles V and VI (and Section 7.2, if
applicable) but reduced by the Committee for such shortened fiscal year, or
defer any awards of Bonuses for such fiscal period until, with respect to a
Preliminary Payment Date, the last month of the first full twelve-month fiscal
year following such shortened fiscal year and to a Final Payment Date following
such full twelve-month fiscal year.
7.7 NO RIGHTS TO BONUS. The prospective recipient of a Bonus shall not
have any rights with respect to any Bonus, or any portion thereof, until the
Preliminary Payment Date or Final Payment Date, as the case may be, to which the
particular Bonus amount relates and only until such Bonus amount is actually
granted by the Committee to such Participant in accordance with the terms of the
Plan.
ARTICLE VIII
STOCK OPTIONS
The provisions of this Article VIII shall apply only to Stock Options
granted under the Plan to Participants:
8.1 GRANTS OF STOCK OPTIONS. In the event that the ROTA for any Bonus
Year calculated in accordance with Article V exceeds 15%, then the Committee
may grant Stock Options under the Plan to Participants as follows:
(a) On, or as soon as reasonably practicable following, the
Preliminary Payment Date, the Committee shall calculate the number of
shares of Common Stock to be covered by the Stock Options to be granted
by first multiplying the dollar amount of the most recent Total Bonus
actually awarded to each Participant, by 1.5 (the "Option Amount"); and
(b) The number of shares of Common Stock issuable upon the exercise of
the Stock Option to be granted to such Participant shall be determined
by dividing the Option Amount by the Fair Market Price on the Date of
Grant.
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8.2 STOCK OPTION AGREEMENTS. 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 exercise price, the term of the Stock Option,
whether such Stock Option is an Incentive Stock Option or a Nonqualified 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 Section 422 (or any successor provision) of the
Code. The Company shall execute stock option agreements upon instructions from
the Committee.
8.3 EXERCISE PRICE. The exercise 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 exercise 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 8.3, 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.
8.4 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 a Participant shall
become exercisable. In the event of the retirement of an employee of the
Company or a Subsidiary in 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 X.
ARTICLE IX
LIMITS ON INCENTIVE STOCK OPTIONS
9.1 OPTION PERIOD. Notwithstanding the provisions of Sections 8.4 and
10.2 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 exercise 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.
9.2 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.
9.3 DISQUALIFYING DISPOSITION. If Common 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.
9.4 TERMINATION. Notwithstanding the provisions of Article XI, an
Eligible Participant's Incentive Stock Options shall terminate no later than
ninety (90) days after termination of such Participant's employment with the
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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 X
EXERCISE OF STOCK OPTIONS; RELOAD STOCK OPTIONS; RESTRICTED STOCK
10.1 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
exercise price (or in any combination of cash and shares of Common Stock having
an aggregate Fair Market Value equal to the option exercise 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. Additionally, shares covered by a Stock Option may be purchased
upon exercise, in whole or in part, in accordance with the applicable stock
option agreement, by authorizing a third party to sell the shares (or a
sufficient portion thereof) acquired upon exercise of a Stock Option, and
assigning the delivery to the Company of a sufficient amount of the sale
proceeds to pay for all the shares acquired through such exercise and any tax
withholding obligations resulting from such exercise.
10.2 RELOAD STOCK OPTIONS. Subject to the terms of this Section 10.2, 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 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 19.6, then a Participant so
exercising a Nonqualified Stock Option shall automatically be granted a
replacement Nonqualified Stock Option and a Participant so exercising an
Incentive Stock Option shall automatically be granted a replacement 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 of the original Stock Option (subject to the
provisions of Article IX 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 commence on the Date of Grant and expire on the
expiration date of the original Stock Option it replaces (subject to the
provisions in Article IX regarding Incentive Stock Options and the provisions of
Article XI), 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 exercise
price, the term of the Reload Stock Option and such other terms and provisions
as are consistent with the Plan.
10.3 RESTRICTED STOCK. In the event that a Participant exercises a Stock
Option and receives a Reload Stock Option under Section 10.2, the following
restrictions and conditions will apply to that number of the shares of Common
Stock (the "Restricted Stock") issued to the Participant upon exercise of such
original Stock Option, which number of shares 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 19.6, 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;
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(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 XI hereof); or
(vi) a Change in Control of the Company.
Notwithstanding the foregoing, shares of Restricted Stock, and
any Stock Dividends paid in shares of Common Stock on or with
respect to Restricted Stock, may be used during the Restriction
Period in payment of the exercise price of any Stock Option and/or
in satisfaction of the Company's tax withholding obligations upon
any such exercise in accordance with Section 19.6.
(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:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions of the
IMCO Recycling Inc. Annual Incentive Program. 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 XI
TERMINATION OF EMPLOYMENT OR SERVICE
In the event a Participant shall cease to be employed by the Company or a
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 9.4 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, 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 a Participant 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
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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 8.4.
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 XII
NON-EMPLOYEE DIRECTORS FEES
The Company shall pay an annual retainer, as may be established and
modified from time to time at the discretion of the Board, to non-employee
directors with respect to their service as members of the Board and Committees
thereof (the "Annual Retainer"), subject to the following terms and conditions:
(a) On the last business day of each quarter in the Company's
fiscal year ("Stock Award Date"), each non-employee director who has
held such office for the entire three-month period preceding the
relevant Stock Award Date shall be granted a number of shares of Common
Stock equal to (i) one-eighth of the amount of the Annual Retainer
divided by (ii) the Fair Market Value per share of Common Stock on the
third trading day prior to the Stock Award Date. On each Stock Award
Date each non-employee director who has not held such office for the
entire three-month period preceding the Stock Award Date, shall be
granted a number of shares of Common Stock equal to (i) one-eighth of
the amount of the Annual Retainer divided by (ii) the Fair Market Value
per share of Common Stock on the third trading day prior to the Stock
Award Date multiplied by (iii) a fraction, the numerator of which is the
number of days which such non-employee director has served as director
since the previous Stock Award Date and the denominator of which is the
number of days since and including the previous Stock Award Date. Any
fractional shares shall be paid in cash, based upon multiplying such
fractional amount times the Fair Market Value per share. Upon an award
of shares to a non-employee director, the stock certificate representing
such shares shall be issued and transferred to the non-employee director.
(b) On the last business day of each fiscal quarter of the Company's
fiscal year, each non-employee director shall receive in cash an amount
equal to one-fourth of the portion of the Annual Retainer which was not
or shall not be paid in shares on the Stock Award Date with respect to
that calendar year.
ARTICLE XIII
AMENDMENT OR DISCONTINUANCE
Subject to the limitations set forth in this Article XIII, the Board may at
any time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part; provided
that no amendment which requires stockholder approval in order for the Plan to
continue to comply with Rule 16b-3 under the 1934 Act, including any successor
to such Rule, shall be effective unless such amendment shall be approved by the
requisite vote of the stockholders of the Company entitled to vote thereon.
Subject to the foregoing, the Board shall have the power to amend the Plan
in any manner advisable in order for Stock Options or Bonuses granted under the
Plan to qualify for the exemption provided by Rule 16b-3 (or any successor rule
relating to exemption from Section 16(b) of the 1934 Act) or to qualify as
"performance-based" compensation under Section 162(m) of the Code (including
amendments as a result of changes to Rule 16b-3 or Section 162(m) or the
regulations thereunder to permit greater flexibility with respect to Stock
Options or Bonuses granted under
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the Plan), and any such amendment shall, to the extent deemed necessary or
advisable by the Committee, be applicable to any outstanding Stock Options
theretofore granted under the Plan, notwithstanding any contrary provisions
contained in any stock option agreement. In the event of any such amendment
to the Plan, the holder of any Stock Option outstanding under the Plan shall,
upon request of the Committee and as a condition to the exercisability
thereof, execute a conforming amendment in the form prescribed by the
Committee to any stock option agreement relating thereto within such
reasonable time as the Committee shall specify in such request.
Notwithstanding anything contained in this Plan to the contrary, unless
required by law, no action contemplated or permitted by this Article XIII
shall adversely affect any rights of Participants or obligations of the
Company to Participants with respect to any Bonuses or Stock Options
theretofore granted under the Plan without the consent of the affected
Participant.
ARTICLE XIV
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 Participant any right to be granted a
Bonus or a Stock Option to purchase or receive Common Stock of the Company or
any other rights except, with respect to Stock Options, 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 XV
TERM
The effective date of this Plan shall be as of February 28, 1996, subject
to stockholder approval. This Plan and any benefits granted hereunder shall be
null and void if stockholder approval is not obtained at the next annual meeting
of stockholders of the Company. Unless sooner terminated by action of the
Board, the Plan will terminate on the 28th day of February, 2006. Bonuses and
Stock Options under the Plan may not be granted after that date, but Bonuses and
Stock Options granted before that date will continue to be effective in
accordance with their terms and conditions.
ARTICLE XVI
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 Bonuses or
Stock Options 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;
(ii) A similar adjustment shall be made in the maximum number of
shares of Common Stock issuable under Stock Options granted to any
individual Participant in any Bonus Year pursuant to Article III; 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.
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Any fractional shares resulting from any adjustment made pursuant to this
Article XVI 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 a 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.
ARTICLE XVII
RECAPITALIZATION, MERGER AND CONSOLIDATION
(a) The existence of this Plan and Bonuses 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.
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(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.
(e) Notwithstanding sub-Section (c) above of this Article XVII, 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 XVIII
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 XIX
MISCELLANEOUS PROVISIONS
19.1 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 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 Bonus award or Stock Option if any
necessary listing of the shares on a securities exchange or any registration
under state or federal securities laws required under the circumstances has not
been accomplished.
19.2 NON-ASSIGNABILITY. No Stock Option granted to a Participant may 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
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(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 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. Subject to Section 7.3 hereof, no interest of
a Participant in any Bonus awarded under the Plan may be transferred, alienated,
assigned or encumbered other than by will or pursuant to the laws of descent and
distribution.
19.3 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 acquired hereunder are being acquired for
investment and not with a view to their distribution.
19.4 NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any Bonus
or 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).
19.5 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.
19.6 TAX REQUIREMENTS - STOCK OPTIONS. The obligations of the Company
under the Plan shall be conditional on compliance with all applicable
withholding tax obligations as required by the Code and under applicable state
and local law and regulation. 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.
19.7 TAX REQUIREMENTS - BONUSES. The Company (and, where applicable, its
Subsidiaries) shall have the power and the right to deduct or withhold, or
require a participant to remit to the Company an amount sufficient to satisfy
applicable taxes required by law to be withheld with respect to any payment of
any Bonus to a Participant.
19.8 INDEMNIFICATION OF BOARD AND COMMITTEE. No member of the Board or the
Committee, nor any officer, employee or agent 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 every officer,
employee or agent of the Company acting on their behalf shall,
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to the fullest extent permitted by law, be fully indemnified and protected by
the Company in respect of any such action, determination or interpretation.
Each member of the Board and the Committee shall, in the performance of his
or her duties under the Plan, be fully protected in relying in good faith
upon the audited and unaudited financial statements of the Company as
contemplated by the terms of the Plan.
19.9 EFFECT ON PARTICIPATION. The grant of a Bonus to a Participant shall
not be deemed either to entitle the Participant to, or to disqualify the
Participant from, as the case may be, participation in any other future grant of
Bonuses under the Plan or otherwise, or in any other compensation or benefit
plan of the Company or in any of its Subsidiaries currently existing or
hereafter established.
19.10 OTHER COMPENSATION AGREEMENTS. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.
19.11 GENDER AND NUMBER. Where the context permits, words in the
masculine gender shall include the feminine and neuter genders, the plural form
of a word shall include the singular form, and the singular form of a word shall
include the plural form.
ARTICLE XX
UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any Bonuses granted but not yet paid to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general unsecured
creditor of the Company. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver payments with respect to awards of Bonuses; PROVIDED,
HOWEVER, that the creation or existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
as of the 28th day of February, 1996, by its Chief Executive Officer pursuant to
prior action taken by the Board.
IMCO RECYCLING INC.
By: /s/ Frank H. Romanelli
-------------------------------------
Frank H. Romanelli
Chief Executive Officer
Attest:
/S/ PAUL V. DUFOUR
- -------------------------------
Paul V. Dufour
Secretary
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EXHIBIT 5.1
HAYNES AND BOONE, L.L.P.
1000 Louisiana Street, Suite 4300
Houston, Texas 77002
(713) 547-2000
June 27, 1996
IMCO Recycling Inc.
5215 North O'Connor Blvd.
Suite 940
Central Tower at Williams Square
Irving, Texas 75039
Gentlemen:
We have acted as counsel to IMCO Recycling Inc., a Delaware corporation
(the "Company"), in connection with the preparation of the Registration
Statement on Form S-8 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the registration of 500,000 shares of Common Stock, par
value $0.10 per share (the "Common Stock"), of the Company that may be issued
pursuant to the IMCO Recycling Inc. Annual Incentive Program (the "Plan").
In connection therewith, we have examined (i) the Certificate of
Incorporation and the Bylaws of the Company, each as amended; (ii) minutes
and records of the corporate proceedings of the Company with respect to the
adoption of the Plan and the granting of stock options and payments of
bonuses and directors' fees thereunder; (iii) certificates of certain
officers and directors of the Company; (iv) the Plan and the forms of stock
option agreements pertaining thereto; and (v) such other documents as we have
deemed necessary for the expression of the opinions contained herein.
In making the foregoing examination, we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. Furthermore, we have
assumed that all stock option exercise prices will equal or exceed the par
value per share of the Common Stock. As to questions of fact material to
this opinion, where such facts have not been independently established, and
as to the content and form of the Certificate of Incorporation (as amended),
Bylaws (as amended), minutes, records, resolutions and other documents or
writings of the Company, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by
the Company, without independent check or verification of their accuracy.
Based upon the foregoing, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the 500,000
shares of Common Stock covered by the Registration Statement which may be
issued from time to time pursuant to the exercise of options duly granted or
which may be duly granted, and in payment of bonuses and in partial payment
of directors' fees, all in accordance with the terms of the Plan, have been
duly authorized for issuance by the Company, and, when so issued in
accordance with the terms and conditions of the Plan and the related option
agreements upon the valid exercise of options and in payment of bonuses and
directors' fees as provided in the Plan, will be validly issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
/s/ Haynes and Boone, L.L.P.
----------------------------------
Haynes and Boone, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the IMCO Recycling Inc. Annual Incentive Program of
our report dated February 5, 1996, with respect to the consolidated financial
statements of IMCO Recycling Inc. included in its Annual Report (Form 10-K)
for the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
------------------------------
ERNST & YOUNG LLP
Dallas, Texas
June 27, 1996
