<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)
- --------------------------------------------------------------------------------
(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:
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<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 Tuesday, May 14, 1996, commencing at 9:00 A.M., Central
Daylight Savings 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 1999 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, to consider and approve the Corporation's Annual Incentive Program
and to consider and ratify the appointment of Ernst & Young LLP as the
Corporation's independent accountants for 1996. Information concerning the Board
nominees, the amended 1992 Stock Option Plan, the Annual Incentive Program 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 IMCO's Board of Directors and employees, thank you for your
cooperation and continued support.
Sincerely,
DON V. INGRAM
CHAIRMAN OF THE BOARD
April 12, 1996
<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 14, 1996
To the Stockholders of
IMCO Recycling Inc.
NOTICE IS HEREBY GIVEN that the 1996 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 Tuesday, May 14, 1996, at 9:00 A.M., Central Daylight
Savings Time, for the following purposes:
1. To elect three Class III directors to hold office until the 1999 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 approve the Corporation's Annual Incentive Program.
4. To consider and ratify the appointment of Ernst & Young LLP as the
Corporation's independent accountants for 1996.
5. 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 29, 1996 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 12, 1996
<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 14, 1996
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 14,
1996 and at any adjournment thereof. The Proxy Statement and the enclosed proxy
are first being mailed to stockholders on or about April 12, 1996 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 12, 1996. 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 29, 1996 (the "Record Date") are entitled to notice
of and to vote at the meeting. On the Record Date, the Corporation had
outstanding 11,791,502 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.
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 proposals to amend the 1992 Stock Option Plan and to
approve the Annual Incentive Program will have the effect of a negative vote
because those proposals require the affirmative vote of holders of a majority of
shares present in person or by proxy and entitled to vote. 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 who do not receive
instructions are entitled to vote on the election of directors, the proposal to
amend the 1992 Stock Option Plan, the proposal to approve the Annual Incentive
Program 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, nor will it count as a vote cast in determining the total votes cast
on the proposal to amend the 1992 Stock Option Plan and the proposal to approve
the Annual Incentive Program.
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 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
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specification is made, the shares will be voted (i) FOR the nominees for
director identified below; (ii) FOR the approval of the amendment of the
Corporation's 1992 Stock Option Plan; (iii) FOR the approval of the
Corporation's Annual Incentive Program; and (iv) FOR the ratification of the
appointment of Ernst & Young LLP as the Corporation's independent accountants
for 1996.
1997 ANNUAL MEETING
The Board presently intends to hold the Corporation's next Annual Meeting of
Stockholders on or about May 15, 1997. 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 1997 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 13, 1996. 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 11,791,502 shares of Common Stock
which were held of record by 564 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.
The following table sets forth as of March 29, 1996, 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 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
NUMBER OF EXERCISABLE BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER SHARES(1) WITHIN 60 DAYS OWNERSHIP CLASS
- ----------------------------------------------------------------- ---------- ---------------- ---------- -----------
<S> <C> <C> <C> <C>
Don V. Ingram 1,165,212(2) 66,666 1,231,878 10.4%
2200 Ross Ave.
Suite 4500-E
L.B. 170
Dallas, Texas 75201
FMR Corp. 1,195,500 -- 1,195,500 10.1%
82 Devonshire Street
Boston, MA 02109 (3)
J.M. Brundrett 15,000 2,911 17,911 *
Ralph L. Cheek 67,841 -- 67,841 *
John J. Fleming 18,218 3,311 21,529 *
Richard W. Hanselman 1,000 3,036 4,036 *
Thomas A. James 4,700(4) -- 4,700 *
Don Navarro 1,000 3,311 4,311 *
Jack C. Page 100 3,311 3,411 *
Frank H. Romanelli 12,656 -- 12,656 *
Paul V. Dufour 80,410 116,900 197,310 1.7%
Richard L. Kerr 43,039 56,800 99,839 *
C. Lee Newton 6,027 111,500 117,527 *
Thomas W. Rogers 23,200 86,500 109,700 *
All Executive Officers and Directors as a group (17 persons, 1,506,076 488,846(5) 1,994,992 16.2%
including those individuals named above)
</TABLE>
- --------------------------
* 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.
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<PAGE>
(2) Represents 927,071 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 14, 1996 as filed with the Securities and Exchange
Commission. FMR Corp. has sole power to vote or to direct the vote for
516,700 shares and sole power to dispose or to direct the disposition of
1,195,500 shares.
(4) Does not include shares owned by Raymond James Financial, Inc. or its
subsidiaries of which Mr. James is Chairman of the Board and Chief Executive
Officer.
(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 438,846 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 29, 1996.
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 be fixed
from time to time exclusively by the Board of Directors (but not to a number
less than three) and that the directors shall be divided into three classes as
nearly equal in number as possible. The term of office of the Class III
directors expires at the Annual Meeting of Stockholders to be held on May 14,
1996, the term of office of the Class II directors expires at the 1997 Annual
Meeting of Stockholders and the term of office of the Class I directors expires
at the 1998 Annual Meeting of Stockholders.
The persons named in the proxy will vote for J.M. Brundrett, Ralph L. Cheek
and Jack C. Page as nominees for election as Class III Directors except where
authority has been withheld as to a particular nominee or as to all nominees.
Dr. Brundrett, Mr. Cheek and Mr. Page 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 III DIRECTORS PRESENT TERM EXPIRES 1996.
<TABLE>
<CAPTION>
NAME AGE
- --------------------------------------------------------------------------------------- ---------
<S> <C>
J.M. Brundrett......................................................................... 71
Ralph L. Cheek......................................................................... 65
Jack C. Page........................................................................... 70
</TABLE>
J. M. Brundrett, a retired Doctor of Veterinary Medicine, has served as a
director since March 1985. Prior to his election to the Board, 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 served as
Chairman, President and Chief Executive Officer of the Corporation and its
predecessors from 1987 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.
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.
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE
CLASS II DIRECTORS PRESENT TERM EXPIRES 1997.
<TABLE>
<CAPTION>
NAME AGE
- --------------------------------------------------------------------------------------- ---------
<S> <C>
John J. Fleming........................................................................ 56
Richard W. Hanselman................................................................... 68
Don Navarro............................................................................ 51
</TABLE>
John J. Fleming has served as a director since May 1989. Mr. Fleming is
Chairman and Chief Executive Officer of Profco Resources Ltd., 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., Columbia/HCA Healthcare Corp.,
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 business and management
services to public and private companies. Mr. Navarro also serves as a director
of Pizza Inn, Inc.
CLASS I DIRECTORS PRESENT TERM EXPIRES 1998.
<TABLE>
<CAPTION>
NAME AGE
- --------------------------------------------------------------------------------------- ---------
<S> <C>
Don V. Ingram.......................................................................... 60
Thomas A. James........................................................................ 53
Frank H. Romanelli..................................................................... 51
</TABLE>
Don V. Ingram has served as a director 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 Profco Resources Ltd.
Thomas A. James has served as a director since May 1995. Mr. 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
a director of Arbor Health Care Company 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 Chemical Corporation from 1985 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.
The Board recommends that stockholders vote FOR J. M. Brundrett, Ralph L.
Cheek and Jack C. Page as nominees for election as Class III Directors at the
Annual Meeting of Stockholders.
4
<PAGE>
MEETINGS OF DIRECTORS AND COMMITTEES
The Board held a total of six Board meetings in 1995. Each director, with
the exception of Mr. James, attended at least 75% of the meetings of the full
Board and the committees of which he was a member held during 1995. Mr. James
attended 71% of these meetings. 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 three meetings in 1995. The members of the
Audit Committee are Mr. Fleming, Chairman, Mr. Hanselman and Mr. James.
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, incentive
and bonus plans. This Committee held thirteen meetings in 1995. The members of
the Compensation Committee are Mr. Navarro, Chairman, Mr. Fleming and Mr. Page.
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 1995. The members of the Investment and Finance
Committee are Mr. Ingram, Chairman, Dr. Brundrett, Mr. Hanselman, Mr. Page, and
Mr. Romanelli.
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 two meetings in 1995. The
members of the Environmental Committee are Dr. Brundrett, Chairman, Mr. Cheek
and Mr. Fleming.
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 four meetings in 1995. The members
of the Committee on Directors are Mr. Ingram, Chairman, Dr. Brundrett and Mr.
Navarro.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Corporation's executive compensation program is administered by the
Compensation Committee of the Board of Directors. Each member of the Committee
is a non-employee director. During 1995 the Committee was comprised of Don
Navarro, Chairman, John J. Fleming and Jack C. Page.
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
5
<PAGE>
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 growth in value of its
equity. This policy aligns the interests of the Corporation's management and
stockholders by placing increased emphasis on performance-based pay and reduced
emphasis on fixed pay in total compensation. To achieve its goals, the
Corporation's executive compensation policies have been designed to provide
competitive levels of compensation that integrate annual base compensation with
bonuses based upon corporate performance and individual initiatives and
performance. Since 1990, the Corporation has adopted and implemented stock
option plans under which the benefits realized by executives are directly
related to stock price performance. To further this objective of linking
compensation to Corporation performance, the Board adopted in 1992 a bonus
participation plan (the "1992 Bonus Plan") which established a bonus pool based
on return on total assets from which yearly bonuses were paid to the officers
and other key managers of the Corporation.
As a result of the Committee's continuing review of the competitiveness of
the Corporation's total compensation program for executives and the changes to
the federal income tax laws imposed by the adoption of Section 162(m) of the
Internal Revenue Code of 1986 (including treasury regulations which were
finalized in December 1995), the Committee recommended to the Board of Directors
that the Corporation adopt the IMCO Recycling Inc. Annual Incentive Program (the
"Incentive Plan") to replace the 1992 Bonus Plan. The Incentive Plan adopted by
the Board of Directors, which is subject to stockholder approval at the Annual
Meeting, is comprised of bonuses and stock options determined by reference to
objective performance criteria. The terms of the Incentive Plan are included
with this Proxy Statement as Appendix B, and the significant features of the
plan are described elsewhere in this Proxy Statement.
The Committee has considered the impact of Section 162(m) regarding the
corporate limitations on deducting certain compensation expenses. It is the
Committee's intent to adopt policies to obtain maximum tax deductibility of
executive compensation, consistent with providing motivational and competitive
compensation which is truly performance-based. In furtherance of this goal, the
Incentive Plan and amendments to the 1992 Stock Option Plan have been proposed
for stockholder approval in order to ensure that the Corporation's executive
compensation plans meet the requirements of Section 162(m) to achieve maximum
deductibility of compensation expenses. See "Proposal to Approve Amendments to
the IMCO Recycling Inc. 1992 Stock Option Plan" and "Proposal to Approve the
IMCO Recycling Inc. Annual Incentive Program."
For 1995, the principal elements of the Corporation's executive compensation
program consisted of base salary, cash bonuses and stock options. Following is a
description of the elements of the Corporation's current executive compensation
program and how each relates to the objectives and policies 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, 1995, Mr. Romanelli became the Corporation's President
and Chief Executive Officer. Mr. Romanelli's annual base salary was established
at $275,000 through negotiations with the Corporation in late 1994. The Board
considered relevant factors, including compensation levels for comparable CEO
positions, when it negotiated Mr. Romanelli's 1995 base salary. Neither Mr.
Romanelli nor any of the other Named Executive Officers of the Corporation
received any raises with respect to their base salaries for 1996 consistent with
the compensation policy objective of increasing the emphasis on
performance-based pay and reducing the proportion of fixed pay in total
compensation.
6
<PAGE>
ANNUAL BONUSES
During 1995, the Board of Directors and Compensation Committee determined
that the criteria for determining bonus amounts under the 1992 Bonus Plan should
be revised in order to change the emphasis from return on assets to a formula
based both upon return on assets and earnings per share. This change was
believed advisable to further the overall compensation objective of enhancing
stockholder value. As a result of these factors, the Compensation Committee
designed the proposed Incentive Plan, the terms of which were approved by the
Board of Directors in December 1995. Bonus amounts paid to Mr. Romanelli and the
other Named Executive Officers with respect to 1995 were based upon the criteria
under the 1992 Bonus Plan with respect to the first four months of 1995, and a
formula tied to earnings per share with respect to the remainder of the year.
The bonus pool available under this earnings-per-share formula, which was less
than what the bonus pool would have been for the full year under the 1992 Bonus
Plan formula, was allocated to participants and paid according to the other
applicable provisions of the 1992 Bonus Plan.
Under the proposed Incentive Plan, in the event that the Corporation's
return on total assets is greater than ten percent (10%) with respect to a
fiscal year, then participants shall be eligible for a bonus to be determined
pursuant to a formula tied to the participant's salary. Participants would also
be eligible for a bonus to be based upon the growth in average annual earnings
per share of the Corporation. After calculating the maximum bonuses payable
under the Incentive Plan, such amounts may be reduced by the Committee in its
sole discretion. Bonuses shall be paid in cash and in shares of Common Stock in
accordance with the Incentive Plan. See "Proposal to Approve the IMCO Recycling
Inc. Annual Incentive Program."
LONG-TERM INCENTIVES
Through 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 corporate performance and stock value.
The Incentive Plan provides for the granting of stock options to
participants in the event that the return on total assets for any bonus year
exceeds 15%. The Committee may grant options covering a number of shares of
Common Stock to be determined pursuant to a formula based upon the total bonus
awarded to each participant. See "Proposal to Approve the IMCO Recycling Inc.
Annual Incentive Program."
The 1992 Stock Option Plan provides for options to be granted for shares
having an exercise price of not less than the market value on the date of grant.
To encourage early exercise and stock retention, the 1992 Stock Option Plan
provides for a replacement option feature which results in automatic additional
stock option grants if a participant delivers Common Stock in payment of the
exercise price and/or shares are delivered to, or withheld by, the Corporation
in payment of the Corporation's tax withholding obligations and contains
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 he
or she remains employed by the Corporation. See "Proposal to Approve Amendments
to the IMCO Recycling Inc. 1992 Stock Option Plan." The Incentive Plan also
contains these features.
In connection with the adoption of the Incentive Plan, and to further
encourage stock ownership, the Committee has established stock ownership and
vested stock option guidelines for all officers of the Corporation and all other
participants in the Incentive Plan. These guidelines set forth specified levels,
as established from time to time by the Committee, of stock ownership that
officers are encouraged to meet in order to determine the portions of each
participant's Incentive Plan bonus to be payable in stock and the portion
payable in cash. In addition, the guidelines prohibit the granting of additional
stock options to officers who have outstanding vested stock options covering
shares in excess of specified amounts established by the Committee from time to
time. This restriction is designed to encourage exercises of outstanding stock
options and higher levels of direct stock ownership by officers of the
Corporation. The Committee believes that these guidelines will have the positive
effect of further aligning the interests of the officer group with those of all
stockholders.
7
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
As discussed above, Mr. Romanelli's base salary was $275,000 for the year
1995. Also, a portion of Mr. Romanelli's bonus with respect to 1995 was
calculated pursuant to the 1992 Bonus Plan, which computations were based solely
upon a formula tied to returns on total assets. For the remainder of 1995, his
bonus was determined by a formula based on earnings per share. Based on these
factors, Mr. Romanelli received an aggregate of $202,000 in cash bonus with
respect to the year ended December 31, 1995.
Mr. Romanelli's participation in total option grants made by the Corporation
during 1995 under the 1992 Stock Option Plan was based upon overall compensation
packages and option plans provided to senior executives in similar companies as
well as Mr. Romanelli's level and scope of responsibilities and contributions to
the Corporation during 1995. Based on these criteria, in December 1995, the
Committee awarded options to purchase 18,050 shares of Common Stock under the
1992 Stock Option Plan to Mr. Romanelli.
SUMMARY
The Committee believes that the Corporation's executive compensation
policies and programs serve the interests of the stockholders and the
Corporation effectively. The various compensation programs are believed
appropriately balanced to provide the motivation for executives to contribute to
the Corporation's overall success and enhance the value of the Corporation for
the stockholders' benefit. As in past years, when performance goals are met or
exceeded, resulting in increased value to stockholders, executives will be
rewarded commensurately. In the aggregate, 41% of the Named Executive Officers'
cash compensation for 1995 was derived from incentives directly linked to
corporate performance. Mr. Romanelli received 42% of his cash compensation from
incentives. The Committee will continue to monitor the effectiveness of the
Corporation's total compensation program and continue to make proposals where
applicable, such as the Incentive Plan, to meet the current and future needs of
the Corporation.
COMPENSATION COMMITTEE
Don Navarro, Chairman John J. Fleming Jack C. Page
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 Page served on the Compensation Committee of
the Board of Directors in 1995. No member of the Compensation Committee has ever
served as an executive officer or as an employee of the Corporation. Before
1996, Don Navarro & Associates, a business and management services company of
which Mr. Navarro is the president and owner, provided consulting services to
the Corporation from time to time. In 1995, the Corporation paid $27,500 to Don
Navarro & Associates as consulting fees for services in connection with the
settlement of certain litigation involving the Corporation. In addition, Jack C.
Page, Inc., a business consulting company of which Mr. Page is the president and
owner, has provided consulting services to the Corporation in the past. In 1995,
the Corporation paid $38,700 to Jack C. Page, Inc. in connection with his
services concerning strategic planning for the Corporation. Due to the desires
of the Compensation Committee for the Corporation's compensation for its
executives, to the degree practicable, to be "performance-based", and therefore
not subject to the limitations on deductibility pursuant to Section 162(m) of
the Internal Revenue Code, it is expected that Messrs. Navarro and Page and
their corporations will not be performing consulting services and receiving
consulting fees during 1996 and future years so long as they remain members of
the Compensation Committee.
8
<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 INC., 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>
12/90 100 100 100 100
12/91 104 107 130 148
12/92 237 104 140 180
12/93 190 80 155 213
12/94 239 91 157 203
12/95 389 84 215 264
</TABLE>
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED 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.
9
<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 collectively as the "Named Executive
Officers") for the fiscal years ended December 31, 1995, 1994, and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
-------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION OPTIONS (#) COMPENSATION (2)
- ---------------------------------- --------- --------- ----------- -------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
F.H. Romanelli 1995 $ 275,000 $ 202,000 -- 18,050 $ 730
President and Chief Executive 1994 -- -- -- 80,000 --
Officer
R.L. Kerr 1995 $ 214,700 $ 151,000 $ 18,144(3) 13,800 $ 11,286
President -- Metals Division 1994 $ 193,867 $ 120,438 -- 60,000 $ 11,229
and Chief Operating Officer 1993 $ 180,700 $ 81,045 -- 20,000 $ 17,195
P.V. Dufour 1995 $ 199,000 $ 138,000 -- 12,800 $ 11,589
Executive Vice President, 1994 $ 157,333 $ 92,298 -- 67,000 $ 11,521
Chief Financial Officer 1993 $ 141,500 $ 66,860 -- 17,500 $ 15,491
and Secretary
T.W. Rogers 1995 $ 161,500 $ 112,000 -- 9,000 $ 11,139
Senior Vice President, 1994 $ 148,500 $ 95,495 -- 20,000 $ 11,111
Marketing and Sales 1993 $ 141,000 $ 66,577 -- 17,500 $ 15,073
C.L. Newton 1995 $ 150,500 $ 96,000 -- 8,500 $ 11,050
Senior Vice President, 1994 $ 132,500 $ 83,171 $ 24,252(3) 20,000 $ 11,012
Operations 1993 $ 123,000 $ 54,389 $ 23,189(3) 13,000 $ 14,416
</TABLE>
- ------------------------
(1) Amounts in the table represent cash payments to named executive officers
(a) in 1996 and 1995 with respect to fiscal year 1995; (b) in 1995 and 1994
with respect to fiscal year 1994; and (c) in 1994 and 1993 with respect to
fiscal year 1993.
(2) Represents compensation paid or accrued pursuant to the Corporation's
Profit Sharing Retirement Plan and Executive Life and Health Insurance
Programs described below.
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.
The Corporation contributed the following amounts to the Profit Sharing
Retirement Plan for the accounts of the named executive officers during
1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Frank H. Romanelli................................................... $ -- $ -- $ --
Richard L. Kerr...................................................... $ 10,500 $ 10,500 $ 16,509
Paul V. Dufour....................................................... $ 10,500 $ 10,500 $ 14,552
Thomas W. Rogers..................................................... $ 10,500 $ 10,500 $ 14,502
C. Lee Newton........................................................ $ 10,500 $ 10,500 $ 13,935
</TABLE>
EXECUTIVE LIFE INSURANCE PROGRAMS. The Corporation has entered into
split-dollar life insurance agreements with the Named Executive Officers to
provide each of them with death benefits of $500,000 ($350,000 in the case
of Mr. Newton) under life insurance policies. Under the
10
<PAGE>
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 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Frank H. Romanelli......................................................... $ 730 -- --
Richard L. Kerr............................................................ $ 786 $ 729 $ 686
Paul V. Dufour............................................................. $ 1,089 $ 1,021 $ 939
Thomas W. Rogers........................................................... $ 639 $ 611 $ 571
C. Lee Newton.............................................................. $ 550 $ 512 $ 481
</TABLE>
(3) Represents reimbursements of moving expense to Mr. Kerr and Mr. Newton under
the Corporation's relocation policy.
STOCK OPTIONS
The options shown below were awarded during 1995 pursuant to the 1992 Stock
Option Plan:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE
UNDERLYING EMPLOYEES IN EXERCISE OR APPRECIATION FOR
OPTIONS GRANTED FISCAL YEAR BASE PRICE OPTION TERM (1)
----------------- --------------- ----------- --------------------
NAME (#) (%) ($/SH) EXPIRATION DATE 5% 10%
- ------------------------ ----------------- --------------- ----------- --------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
F.H. Romanelli.......... 18,050(2) 9.0% $ 22.75 12/12/2005 $ 258,246 $ 654,449
R.L. Kerr............... 13,800(2) 6.9% $ 22.75 12/12/2005 $ 197,440 $ 500,354
P.V. Dufour............. 12,800(2) 6.4% $ 22.75 12/12/2005 $ 183,133 $ 464,097
T.W. Rogers............. 9,000(2) 4.5% $ 22.75 12/12/2005 $ 128,765 $ 326,318
C.L. Newton............. 8,500(2) 4.2% $ 22.75 12/12/2005 $ 121,611 $ 308,189
Executive Group......... 80,750 -- -- -- -- --
Non-Employee Director
Group.................. 48,653 -- $ 22.75 -- -- --
Non-Executive Officer
Employee and Consultant
Group.................. 71,070 -- $ 22.75 -- -- --
</TABLE>
- ------------------------------
(1) 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.
(2) These options will vest in three equal annual increments beginning on the
first anniversary date of the grant. The 1992 Stock Option Plan provides
that in the event of a "change in control" of the Corporation (as defined
in the plan), all stock options will become fully vested.
11
<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 Stock Option
Plan during the last fiscal year and unexercised options under the 1990 Stock
Option Plan and the 1992 Stock Option Plan held as of the end of the fiscal
year:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION VALUES
- --------------------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE
-------------------------- ------------------------
NUMBER OF NUMBER OF VALUE OF
SHARES VALUE OF SHARES UNEXERCISED
SHARES UNDERLYING UNEXERCISED UNDERLYING IN-THE-
ACQUIRED ON VALUE UNEXERCISED IN-THE-MONEY UNEXERCISED MONEY
EXERCISE REALIZED OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
NAME (#) (1) 12/31/95(#) 12/31/95(2) 12/31/95(#) 12/31/95(2)
- ------------------------------------ ----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
F.H. Romanelli...................... -- -- 16,000 $ 146,000 82,050 $ 579,488
R.L. Kerr........................... -- -- 136,000 $ 2,201,500 77,800 $ 596,550
P.V. Dufour......................... -- -- 116,900 $ 1,608,088 77,900 $ 617,963
T.W. Rogers......................... -- -- 86,500 $ 1,203,563 42,500 $ 299,063
C.L. Newton......................... 10,000 $ 131,000 118,000 $ 1,837,385 37,500 $ 259,250
</TABLE>
- ------------------------
(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 29, 1995 was $24.50 per share.
DIRECTORS' COMPENSATION
Non-employee directors of the Corporation (other than Mr. Ingram) are
presently entitled to receive directors' fees of $30,000 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 Annual Incentive
Program provides that one-half of the annual director's fee amount shall be paid
quarterly in shares of Common Stock determined by dividing one-eighth of such
fee amount by the closing price per share of Common Stock as quoted on the NYSE
on the third trading day prior to the last day of each fiscal quarter. Any
fractional shares shall be paid in cash. See "Proposal to Approve the IMCO
Recycling Inc. Annual Incentive Program -- 'Directors' Annual Retainer.' "
The 1992 Stock 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 amount then in effect by the fair market value per
share of Common Stock on that date. On December 15, 1995, pursuant to the 1992
Stock Option Plan, each such non-employee director was granted an option to
purchase 824 shares of Common Stock. Mr. James, due to his being newly elected
to the Board in May 1995, was granted an option to purchase 659 shares of Common
Stock. The exercise price per share with respect to these options granted is
$22.75. See "Proposal to Approve Amendments to the IMCO Recycling Inc. 1992
Stock Option Plan," and "Proposal to Approve the IMCO Recycling Inc. Annual
Incentive Program."
The Corporation has in effect a Consulting Agreement with Mr. Ingram on a
month-to-month basis with respect to operations of the Corporation. In December
1995, the consulting fee was increased to $15,000 per month effective January 1,
1996. A total of $120,000 was paid to Mr. Ingram under the Consulting Agreement
during 1995. In addition, in December 1995 Mr. Ingram received a cash award of
$202,000 and grants of options covering 43,050 shares of Common Stock under the
1992
12
<PAGE>
Stock Option Plan at an exercise price of $22.75 per share. These options have a
ten year term and vest in three equal annual installments. The cash award and
stock options were granted by the Compensation Committee in recognition of Mr.
Ingram's services as a consultant to the Corporation.
In October 1994, the Corporation entered into a consulting agreement with
Mr. Cheek, which commenced effective January 1, 1995. Under the agreement, Mr.
Cheek was engaged as consultant and advisor to the Corporation in connection
with certain international projects. The agreement terminated on April 30, 1995.
Mr. Cheek was paid $40,000 under this agreement in 1995, plus reimbursement for
related out-of-pocket expenses, medical insurance coverage and a $1,500 per
month overhead allowance. Pursuant to the agreement, upon its termination Mr.
Cheek received severance pay of $239,500, an amount equal to his 1994 annual
base salary.
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers, directors and persons who own more than 10% of the
Corporation's Common Stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC"). Such
persons are required by SEC regulations to furnish the Corporation with copies
of all Section 16(a) forms filed by such person.
Based solely on the Corporation's review of such forms furnished to the
Corporation and written representations from certain reporting persons, the
Corporation believes that all filing requirements applicable to the
Corporation's executive officers, directors and more than 10% stockholders in
1995 were complied with, except that a Form 4 for Ralph L. Cheek, a director of
the Corporation, and a Form 4 for Richard L. Kerr, an executive officer of the
Corporation, were filed after the required date.
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 and amended in 1994. In February 1996, the Board approved, subject to
approval by the Corporation's stockholders, certain additional amendments to the
1992 Plan.
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 proposed to be amended and
restated, a copy of which is attached hereto as Appendix A. The stockholders'
attention is directed to Appendix A so that they may acquaint themselves fully
with all of the terms of the 1992 Plan.
During 1993, the United States Congress adopted Section 162(m) of the
Internal Revenue Code of 1986 (the "Code"), which provision places limits on the
Corporation's ability to deduct certain compensation in excess of $1,000,000 for
any taxable year paid to certain of its executive officers ("Section 162(m)").
One exception to these limitations is for "performance-based" compensation that
has been disclosed to and approved by stockholders prior to payment of the
awards. Final federal income tax regulations were promulgated in December 1995,
which provide guidelines for compliance with this exception to the deduction
limitation rules. In order for compensation attributable to future stock options
granted under the 1992 Plan to be "performance-based" compensation exempt from
the limitations of Section 162(m), stockholder approval is sought for certain
amendments to the 1992 Plan. The principal amendment in this regard limits the
aggregate number of shares of Common Stock represented by grants of stock
options made to any individual participant during any fiscal year to 100,000
shares (Article III of the 1992 Plan). An additional related amendment requires
that each member of the Compensation Committee be an "outside director" as
defined under Section 162(m).
The Corporation believes that adoption of this amendment does not reflect a
material change in the 1992 Plan, but merely brings the plan into compliance
with Section 162(m) and the regulations thereunder.
13
<PAGE>
Other amendments to the 1992 Plan include:
(i) An amendment to permit shares of Restricted Stock (as defined in the
1992 Plan) to be delivered to the Corporation in payment of the exercise
price of a stock option or in satisfaction of tax withholding obligations
(Section 7.3 of the 1992 Plan);
(ii) An amendment regarding the aggregate number of shares of Common
Stock which may be issued to participants under the 1992 Plan, which
clarifies how shares are counted under replacement or "reload" options
granted under the 1992 Plan (Article III of the 1992 Plan); and
(iii) Amendments which clarify the Board's authority to amend the 1992
Plan in order for the Plan to continue to qualify under Section 162(m) of
the Code and with respect to certain exemptions from Section 16(b) of the
1934 Act (Article IX of the 1992 Plan); and
(iv) An amendment to the definition of a "Change in Control" of the
Corporation (Section 1.2 of the 1992 Plan).
Eligible employee-participants under the 1992 Plan include key employees and
officers selected by the Compensation Committee from time to time. At December
31, 1995, the Corporation estimates that approximately 54 employees, directors,
consultants and officers were eligible to participate in the 1992 Plan, 54 of
whom were participants. As of December 31, 1995 options to purchase 770,754
shares of Common Stock had been granted to 54 persons under the 1992 Plan at
exercise prices ranging from $13.375 to $22.75 per share, leaving 379,246 shares
of Common Stock available for future option grants thereunder. As of March 29,
1996, the aggregate market value of the shares of Common Stock underlying
outstanding options under the 1992 Plan was $15,222,391 (based on the closing
sales price per share of $19.75 on the New York Stock Exchange Composite Tape on
such date).
For information concerning stock options granted during 1995 under the 1992
Plan to the Named Executive Officers, the Corporation's executive officers as a
group, all non-employee directors as a group, and all non-executive officers,
employees and consultants as a group, see "Remuneration of Directors and
Officers -- Stock Options."
TERMS OF THE 1992 PLAN
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.
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. 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.
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
14
<PAGE>
shares of Common Stock having an aggregate fair market value equal to the
exercise price) or through third-party exercise transactions. 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 replacement nonqualified stock option (or a participant 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 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 commence on the date
of grant and expire on the expiration date of the original 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 is restricted from
transferring or pledging that number of shares received by the participant upon
exercise of the original stock option, 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"). These
restrictions will continue in effect until the earliest to occur of the
following: (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 (see below). However, shares of Restricted Stock may
be used in payment of the exercise price of a stock option or in satisfaction of
the Corporation's tax withholding obligations upon any such exercise. 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.
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, or otherwise, 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). 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 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 in Section 1.2 of the
1992 Plan.
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, officers and consultants. The
current members of the Compensation Committee are Don Navarro, Chairman, John J.
Fleming, and Jack C. Page. The Board selects the members of the
15
<PAGE>
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. The 1992
Plan provides that the members of the Compensation Committee must be
"disinterested persons" as that term is defined under the 1934 Act, and "outside
directors" as that term is defined under Section 162(m).
AMENDMENT OF THE 1992 PLAN
The 1992 Plan provides that the Board may from time to time discontinue or
amend the 1992 Plan without the consent of the participants; however, no
amendment which requires stockholder approval in order for the 1992 Plan to
comply with Rule 16b-3 under the 1934 Act will be effective unless approved by
the stockholders. Subject to the foregoing, the Board may amend the 1992 Plan in
order for stock options to qualify for the exemption under Rule 16b-3 or to
qualify as "performance-based" compensation under Section 162(m).
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 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.
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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 income taxes at applicable rates will
be required in connection with any ordinary income realized by a participant by
reason of the exercise of stock 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 approve the
amendments to the 1992 Plan.
PROPOSAL TO APPROVE THE IMCO RECYCLING INC.
ANNUAL INCENTIVE PROGRAM
GENERAL
On February 28, 1996, the Board adopted the IMCO Recycling Inc. Annual
Incentive Program (the "Incentive Plan"), subject to approval by the
Corporation's stockholders at the Annual Meeting.
The Incentive Plan was designed by the Compensation Committee during 1995 to
replace the 1992 Bonus Plan, and in response to Section 162(m) and the adoption
in December 1995 of the final treasury regulations thereunder. The Incentive
Plan is intended to comply with the performance-based exception to Section
162(m). See "Proposal to Approve Amendments to the IMCO Recycling Inc. 1992
Stock Option Plan -- General". If the Incentive Plan is not approved by the
stockholders as proposed, the Board intends to rescind the Incentive Plan and
seek future stockholder approval of another incentive program that also is
intended to comply with Section 162(m). Assuming the Incentive Plan is approved
by the stockholders, the Incentive Plan will terminate on February 28, 2006,
unless sooner terminated by action of the Board.
The provisions of the Incentive Plan (which include the material terms of
the performance-based compensation that the Corporation intends to pay pursuant
to the Incentive Plan) are summarized below. The statements herein concerning
the terms and provisions of the Incentive Plan are summaries only and are
qualified in their entirety by reference to the full text of the Incentive Plan,
a copy of which is attached hereto as Appendix B. The stockholders' attention is
directed to Appendix B so that they may acquaint themselves fully with all of
the terms of the Incentive Plan.
The purpose of the Incentive Plan is to advance the interests of IMCO and
its stockholders by providing certain of the Corporation's key employees with
annual incentive compensation which is tied to the achievement of preestablished
and objective performance goals. The Incentive Plan is designed to provide the
Corporation with flexibility in achieving those purposes and to implement
performance-based compensation strategies that will attract and retain officers
and employees who are important to the long-term success of the Corporation. The
Incentive Plan also provides for the payment of an annual retainer to the
Corporation's non-employee directors, payable partially in shares of Common
Stock.
Key management employees as selected by the Compensation Committee from time
to time are eligible to participate in the Incentive Plan. It is estimated that
approximately 25 employees will be eligible to participate in the Incentive
Plan.
The Compensation Committee shall, from time to time, but not less often than
annually, select the particular key members of management of the Corporation and
its subsidiaries to whom bonuses and stock options under the Incentive Plan may
be granted. Employees who participate in the Incentive Plan may also participate
in other incentive or benefit plans of the Corporation or any of its
subsidiaries.
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The Incentive Plan authorizes the issuance of an aggregate of 500,000 shares
of Common Stock which may be issued to participants under grants of stock
options, in payment of bonuses and in partial payment of directors' fees under
the Incentive Plan. 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 Incentive Plan. In addition, the number of shares delivered, tendered,
or withheld from any exercise by a participant in connection with the exercise
price of any stock option or in connection with satisfying the participant's tax
withholding obligations, to the extent that a Reload Stock Option is granted to
purchase such number of shares so delivered to or withheld by the Corporation,
shall be reserved and made available for future issuance under the Incentive
Plan.
The Incentive Plan is administered by the Compensation Committee. See
"Proposal to Approve Amendments to the IMCO Recycling Inc. 1992 Stock Option
Plan -- Administration of the 1992 Plan."
BONUSES UNDER THE INCENTIVE PLAN
ROTA BONUS. In the event that the Corporation's return on total assets
("ROTA") (as defined in Article I of the Incentive Plan) is greater than ten
percent (10%) with respect to a fiscal year, then participants shall be eligible
for a bonus ("ROTA Bonus"). ROTA Bonuses shall be determined as follows: (i) the
applicable participant's "Bonusable Amount" shall be determined, which shall be
the Participant's base salary minus $50,000; (ii) the difference between ROTA
for the relevant year and ten percent (10%) shall be calculated and expressed as
a percentage (the "Annual Difference"); and (iii) 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.
EPS BONUS. Participants may be eligible for a bonus based on the
Corporation's earnings per share ("EPS") for the applicable fiscal year ("EPS
Bonus"), which shall be calculated as follows: (i) the average EPS for the
preceding three fiscal years (the "Average EPS") shall be calculated; (ii) the
EPS for the applicable bonus year shall be divided by the Average EPS, which
amount shall be reduced by 1.0 and expressed as a percentage; and (iii) such
percentage shall be multiplied by the participant's Bonusable Amount to yield
the maximum EPS Bonus amount for such participant.
REDUCTION OF BONUS. The maximum bonus amounts for any participant as
calculated above may be reduced by an amount of up to 50% by the Committee in
its sole discretion; however, the total maximum bonus amounts to any participant
may not be increased. In addition, the maximum total bonus payable to any
participant with respect to any bonus year shall not exceed $750,000.
PAYMENTS. On the preliminary payment date, which shall be in the last month
of the fiscal year in question, the Committee shall calculate the bonuses and
distribute 80% of the aggregate of the actual ROTA Bonus and EPS Bonus, if any,
awarded to a participant. On the final payment date, which shall occur after the
Corporation's independent auditors render their final audit opinion with respect
to the fiscal year in question, the Committee shall calculate the bonus, and
distribute the portions of the bonus which had not been previously distributed
to participants on the preliminary payment date.
STOCK OWNERSHIP GUIDELINES. The Committee shall, from time to time,
establish guidelines for the ownership of shares of the Corporation's Common
Stock for participants (the "Guidelines"). 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 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 for applicable
withholding requirements, shall be paid in proportions of cash and shares of
Common Stock 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, after
giving effect to deductions for
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applicable withholding requirements, shall be paid in accordance with
percentages of Common Stock and cash established by the Committee under the
Guidelines then in effect with respect to the applicable bonus year.
STOCK OPTIONS UNDER THE INCENTIVE PLAN
The Incentive Plan also provides for the granting of stock options to
participants in the event that the ROTA for any bonus year exceeds 15%. The
Committee may grant options under the Incentive Plan as follows: (i) on, or as
soon as reasonably practicable following, the preliminary payment date for
bonuses, the Committee shall calculate the number of shares of Common Stock to
be covered by the options to be granted by first multiplying the dollar amount
of the most recent total bonus awarded to each participant, by 1.5 (the "Option
Amount"); and (ii) 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 market price for the Common
Stock on the date of grant.
The aggregate number of shares of Common Stock that may be represented by
grants of stock options made to any individual participant under the Incentive
Plan in any fiscal year may not exceed 100,000 shares.
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 Incentive 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.
The options to be granted under the Incentive 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. 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.
Terms of the Incentive Plan concerning exercises of stock options, Reload
Stock Options, Restricted Stock, termination of employment or service, and Plan
amendments are substantially the same as the corresponding terms of the 1992
Plan. See "Proposal to Approve Amendments to the IMCO Recycling Inc. 1992 Stock
Option Plan -- Amendment of the 1992 Plan," "-- Terms of the 1992 Plan and
Agreements -- Exercise of Options; Reload Options," and "-- Termination of
Employment or Service."
The fact that the terms of the Incentive Plan would prohibit grants of stock
options thereunder with respect to any particular bonus year because the ROTA
goal for that year was not met, would not by itself prohibit grants of options
by the Committee to affected participants under the 1992 Plan.
DIRECTORS' ANNUAL RETAINER
The Corporation may pay an annual retainer, in amounts 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"). The Incentive Plan provides that one-half of
the amount of the Annual Retainer shall be paid quarterly in shares of Common
Stock determined by dividing one-eighth of the Annual Retainer by the closing
price per share of the Common Stock as quoted on the NYSE on the third trading
day prior to the last day of each fiscal quarter. Any fractional shares shall be
paid in cash. On the last day of each fiscal quarter of
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the Corporation'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 is not
to be paid in shares of Common Stock with respect to that calendar year.
ADJUSTMENTS
The Incentive Plan provides that the number of shares issuable in payment of
bonuses and upon exercises of stock options and the exercise price of such
options 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.
CERTAIN FEDERAL INCOME TAX ASPECTS
The following is a summary of the principal federal income tax consequences
associated with the Incentive Plan. It does not describe all federal income tax
consequences under the Incentive 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
Incentive Plan.
BONUSES. Under current law, bonuses paid in cash will be included for
federal income tax purposes in the recipient's income as taxable compensation in
the year paid, and the Corporation will generally receive an income tax
deduction at the same time and for the same amount. Similarly, the fair market
value of shares of Common Stock issued in payment of a portion of a recipient's
bonus shall be recognized as taxable income to the recipient in the year issued,
and the Corporation will generally receive an income tax deduction at the same
time and for the same amount.
NONQUALIFIED AND INCENTIVE STOCK OPTIONS. For a description of certain
federal income tax consequences associated with nonqualified and incentive stock
options granted under the Incentive Plan, see "Proposal to Approve Amendments to
the IMCO Recycling Inc. 1992 Stock Option Plan -- Certain Federal Income Tax
Aspects -- Nonqualified Stock Options," and "-- Incentive Stock Options."
WITHHOLDING. Withholding of federal income taxes at applicable rates will
be required in connection with any ordinary income realized by a participant by
reason of the payment of a bonus in cash or in shares of Common Stock and by
reason of the exercise of stock options granted pursuant to the Incentive Plan.
Such taxes may be deducted, withheld or remitted to the Corporation prior to the
receipt of any Common Stock certificates.
NEW PLAN BENEFITS
As discussed above, bonus and stock option awards under the Incentive Plan
will be based upon performance goals with respect to fiscal 1996 and future
years. No incentive compensation under these terms has yet been earned by any
participant. Accordingly, the amount of annual incentive compensation to be paid
in the future to participants, including the Corporation's current or future
named executive officers subject to Section 162(m), cannot be determined at this
time, since actual amounts will depend on actual performance measured against
the attainment of the preestablished performance goals and on the Committee's
discretion to reduce such amounts. However, the following table provides certain
summary information concerning maximum bonuses which could have been awarded in
fiscal 1995 to Mr. Romanelli, the Corporation's Chief Executive Officer, the
Named Executive Officers, the Corporation's executive officers as a group and
all non-executive employees as a group, if the Incentive Plan had been in
effect:
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MAXIMUM AMOUNT AVAILABLE UNDER INCENTIVE PLAN ASSUMING INCENTIVE
PLAN WAS IN EFFECT DURING 1995
<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION VALUE
- ----------------------------------------------------------------------------------------------------- -----------
<S> <C>
Frank H. Romanelli,
President and Chief Executive Officer............................................................... $ 179,775
Richard L. Kerr,
Executive Vice President, President -- Metals Division
and Chief Operating Officer......................................................................... $ 131,595
Paul V. Dufour,
Executive Vice President, Chief Financial
Officer and Secretary............................................................................... $ 119,051
Thomas W. Rogers,
Senior Vice President, Marketing and Sales.......................................................... $ 89,088
C. Lee Newton
Senior Vice President, Operations................................................................... $ 80,300
Executive Group...................................................................................... $ 752,418
Non-Executive Officer Employee Group................................................................. $ 284,604
</TABLE>
The Board recommends that stockholders vote FOR the proposal to approve the
Incentive Plan.
PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board, upon the recommendation of its Audit Committee, has selected
Ernst & Young LLP as independent auditors to examine the consolidated financial
statements of the Corporation for 1996. 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 auditors for
1996.
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.
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The Annual Report to Stockholders for the fiscal year ended December 31,
1995, 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 14, 1996. 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 12, 1996
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APPENDIX A
IMCO RECYCLING INC.
1992 STOCK OPTION PLAN
(As amended December 15, 1994 and February 28, 1996)
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 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 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 when still in office who were directors at the
beginning of the period.
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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.
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 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 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 of, 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.
A-2
<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 a "disinterested person", as that term is
defined in Rule 16b-3 promulgated under the 1934 Act, and an "outside director"
under Section 162(m) of the Code.
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.
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 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
Subject to the provisions of Articles XII and XIII of the Plan, the
aggregate number of shares which may be issued to Participants under grants of
Stock Options made by the Committee under the Plan shall be:
a. 1,150,000 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 15.7 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 during any fiscal
year during which the Plan is in effect, may not exceed 100,000 shares. 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.
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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.
4.3 EXERCISE PRICE. The 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 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.
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 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
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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
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.
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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 exercise
price (or in any combination of cash and shares of Common Stock having an
aggregate Fair Market Value equal to the 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, 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.
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, subject to Article XI, 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 of 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 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 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 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 exercise 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 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 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;
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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 VIII 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 15.7.
(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 payable in Common Stock 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. 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
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(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 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 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 granted under 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 IX shall adversely affect any rights of Participants
or obligations of the Company to Participants with respect to any Stock Options
theretofore granted under the Plan without the consent of the affected
Participant.
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.
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
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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:
(a) 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;
(b) A similar adjustment shall be made in the maximum number of
shares of Common Stock issuable under Stock Options granted to any
individual Participant during any fiscal year during which the Plan is in
effect pursuant to Article III; and
(c) 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 any 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 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
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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.
(e) Notwithstanding sub-Section (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
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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 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 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
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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. This Plan does not constitute a
contract of 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 current or previous 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 such members of the Board or the Committee and each
and any officer or 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. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such individuals may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise.
15.9 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.
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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
amendments of this Plan effective as of December 15, 1994 and February 28, 1996,
and subject to the terms of Article IX of the Plan, neither the terms of the
Stock Options outstanding as of such dates nor the stock option 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. Following
approval by the stockholders of the Company in accordance with applicable law,
the Plan, as amended and restated herein, will continue in effect until the
expiration of its term or until earlier terminated, amended, or suspended in
accordance with the terms hereof.
* * * * * * * * *
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:
--------------------------------------
Frank H. Romanelli
CHIEF EXECUTIVE OFFICER
Attest:
- ----------------------------------------
Paul V. Dufour
SECRETARY
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APPENDIX B
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.
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"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 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.
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"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 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
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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.
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"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 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.
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"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 and/or an EPS Bonus.
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
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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.
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
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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,
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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 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
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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.
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
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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.
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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
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
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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;
(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.
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(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 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.
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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.
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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 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
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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.
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
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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.
(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
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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
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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 (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),
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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, 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.
B-22
<PAGE>
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:
------------------------------------
Frank H. Romanelli
Chief Executive Officer
Attest:
- --------------------------------
Paul V. Dufour
Secretary
B-23
<PAGE>
PLEASE MARK YOUR VOTES AS INDICATED IN THE EXAMPLE /X/
1. Election of Directors.
The election of the following nominees to the Board of Directors as Class III
Directors, unless otherwise indicated below.
FOR AGAINST (a) J.M. Brundrett (b) Ralph L. Check (c) Jack C. Page
/ / / / IN THE EVENT THE UNDERSIGNED WISHES TO WITHHOLD AUTHORITY
TO VOTE FOR ANY PARTICULAR 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 certain amendments to the Corporation's 1992 Stock
Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Proposal to approve and adopt the Corporation's Annual Incentive Program.
FOR AGAINST ABSTAIN
/ / / / / /
4. Proposal to ratify the appointment of Ernst & Young LLP as the independent
public accountants of the Corporation for 1996.
FOR AGAINST ABSTAIN
/ / / / / /
5. In their discretion upon such other matters as may properly come before
the meeting or any adjournment thereof.
Please complete, date, sign and mail this Proxy promptly in the enclosed
envelope. No postage is required for mailing in the United States.
Dated ________________________________ , 1996
_____________________________________________
Signature
_____________________________________________
Signature
IMPORTANT: Please date the Proxy and sign
exactly as your name appears on this
Proxy. If shares are held 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 corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
^ FOLD AND DETACH HERE ^
Dear Stockholder(s):
Enclosed you will find material relative to the Corporations's 1996 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.
<PAGE>
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 Tuesday, May 14, 1996, 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 Daylight Savings 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, 3 AND 4. This Proxy hereby revokes all
prior proxies given with respect to the shares of the undersigned.
(CONTINUED ON REVERSE SIDE)
^ FOLD AND DETACH HERE ^
