<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
IMCO RECYCLING INC.
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(Name of Registrant as Specified In Its Charter)
IMCO RECYCLING INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[_] 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:
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(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, La Cima Club, 5215 North O'Connor Blvd., Irving, Texas, on
Wednesday, May 10, 2000, 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 elect three directors to serve until the
2003 Annual Meeting of Stockholders. Your Board of Directors has unanimously
nominated these persons for election as directors. You are also being asked to
consider the approval of the IMCO Recycling Inc. Performance Share Unit Plan
and to consider and ratify the appointment of Ernst & Young LLP as the
Corporation's independent accountants for 2000. Information concerning the
Board nominees, the Performance Share Unit Plan and the proposal regarding the
Corporation's independent accountants, as well as other important information,
is contained in the accompanying proxy statement which you are urged to read
carefully.
Whether or not you plan to attend in person and regardless of the number of
shares you own, it is important that your shares be represented and voted at
the meeting. Accordingly, you are requested to sign, date and mail the enclosed
proxy at your earliest convenience. Your shares will then be represented at the
meeting, and the Corporation will be able to avoid the expense of further
solicitation.
On behalf of IMCO's Board of Directors and employees, thank you for your
cooperation and continued support.
Sincerely,
Don V. Ingram
Chairman of the Board
April 7, 2000
<PAGE>
IMCO RECYCLING INC.
5215 North O'Connor Blvd., Suite 1500
Central Tower at Williams Square
Irving, Texas 75039
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 10, 2000
---------------------
To the Stockholders of
IMCO Recycling Inc.
The 2000 Annual Meeting of Stockholders of IMCO Recycling Inc. (the
"Corporation") will be held at the Central Tower at Williams Square, Twenty-
Sixth Floor, La Cima Club, 5215 North O'Connor Blvd., Irving, Texas, on
Wednesday, May 10, 2000, at 9:00 A.M., Central Daylight Savings Time, for the
following purposes:
1. To elect three Class II directors to hold office until the 2003 Annual
Meeting of Stockholders.
2. To consider and vote on the approval of the Corporation's Performance
Share Unit Plan.
3. To consider and ratify the appointment of Ernst & Young LLP as the
Corporation's independent accountants for 2000.
4. To transact any other business which properly may be brought before the
meeting and any adjournment thereof.
Only holders of record of the Corporation's Common Stock at the close of
business on March 17, 2000 are entitled to notice of and to vote at the Annual
Meeting. A complete list of these stockholders of record will be open to the
examination of any stockholder at the Corporation's principal executive
offices at 5215 North O'Connor Blvd., Suite 1500, Central Tower at Williams
Square, Irving, Texas for a period of ten days before 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 proxy card should be signed and returned to
ensure that all of your shares will be voted. The proxy card should be signed
by you exactly as your stock is registered. If you have already signed and
returned your proxy, you may revoke it at any time prior to the meeting, and
if you are present at the meeting, you 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 enclosed Proxy are
sent to you by order of the Board of Directors of the Corporation.
Paul V. Dufour
Secretary
Irving, Texas
April 7, 2000
<PAGE>
IMCO RECYCLING INC.
5215 North O'Connor Blvd., Suite 1500
Central Tower at Williams Square
Irving, Texas 75039
---------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 10, 2000
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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 10,
2000 and at any adjournment of the meeting. The Proxy Statement and the
enclosed proxy are first being mailed to stockholders on or about April 7,
2000.
This proxy solicitation is intended to give stockholders the opportunity to
vote on the matters set forth in the accompanying Notice of Annual Meeting. The
proxy permits stockholders to withhold voting for any or all nominees for
election to the Corporation's Board of Directors and to abstain from voting on
any other specified proposal if the stockholder chooses.
All holders of record of shares of the Corporation's Common Stock at the
close of business on March 17, 2000 (the "Record Date") are entitled to notice
of and to vote at the meeting. On the Record Date, the Corporation had
outstanding 15,265,028 shares of 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, so long as a quorum is
constituted, is required for the election of directors. Approval of other
proposals discussed in this Proxy Statement requires the affirmative vote of a
majority of the votes cast by the stockholders represented at the Annual
Meeting, so long as 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 proposal to approve the Performance Share Unit Plan
will have the effect of a negative vote because approval of that proposal
requires the affirmative vote of holders of a majority of the shares present in
person or by proxy and entitled to vote. Under the rules of the New York Stock
Exchange (NYSE), 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 approve the Performance
Share Unit Plan and the proposal to ratify the appointment of the auditors.
Under 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 approve the Performance Share Unit Plan.
A stockholder has the unconditional right to revoke his or her proxy at any
time before it is voted. Any proxy given may be revoked either by a written
notice signed and delivered to the Secretary of the Corporation prior to the
exercise of the proxy, by signing a subsequent proxy or by voting in person at
the meeting (although simply attending the Annual Meeting without signing a
ballot or signing a subsequent proxy will not constitute revocation of a
proxy). Where a stockholder's signed proxy specifies a choice with respect to a
voting matter, the shares will be voted accordingly. If no such specification
is made, the shares will be voted
<PAGE>
(i) FOR the nominees for director identified below; (ii) FOR the approval of
the Corporation's Performance Share Unit Plan; and (iii) FOR the ratification
of the appointment of Ernst & Young LLP as the Corporation's independent
accountants for 2000.
2001 ANNUAL MEETING
The Board intends to hold the Corporation's next Annual Meeting of
Stockholders on or about May 9, 2001. A Proxy Statement and Notice of this
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 2001 Annual Meeting of Stockholders, a proposal of a
stockholder must be received by the Corporation at its principal executive
offices in Irving, Texas, by December 8, 2000. All stockholder proposals of
this nature must comply with Rule 14a-8 promulgated by the Securities and
Exchange Commission (SEC) under the Securities Exchange Act of 1934 (the
Exchange Act).
In addition, in order for a stockholder proposal to be raised from the floor
during the next year's annual meeting, written notice about that proposal must
be received by the Corporation by no later than December 8, 2000 and must
contain the necessary information as required by the Corporation's bylaws. In
order for a stockholder to make a director nomination at an annual meeting, it
is necessary to notify the Corporation not fewer than 120 days in advance of
the date specified in the Proxy Statement for this year's Annual Meeting. Thus,
since April 7, 2000 is specified as the mailing date in this year's Proxy
Statement, in order for any nomination notice to be timely for next year's
annual meeting, it must be received by the Corporation not later than December
8, 2000 (that is, 120 days prior to April 7). Also, the notice must meet all
the other requirements contained in the Corporation's bylaws for nominating
directors. If you would like a copy of the relevant bylaw provisions containing
the requirements for making stockholder proposals and nominating director
candidates, please contact the Corporation's corporate secretary at the
executive headquarters of the Corporation. Also, under "Meetings of Directors
and Committees--Committee on Directors" you can find information about
suggestions for nominations to the Board of Directors.
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<PAGE>
VOTING AND PRINCIPAL STOCKHOLDERS
At the Record Date, there were outstanding 15,265,028 shares of Common Stock
which were held of record by 454 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 17, 2000, certain information with
regard to the beneficial ownership of Common Stock by (i) all persons known by
the Corporation to be the beneficial owner of more than 5% of the outstanding
Common Stock of the Corporation; (ii) each director and nominee for director of
the Corporation (see "Election of Directors"); (iii) each named executive
officer of the Corporation; and (iv) all executive officers and directors as a
group.
<TABLE>
<CAPTION>
Number Shares Underlying Total Percent
Name of of Options Exercisable Beneficial of
Beneficial Owner Shares(1) Within 60 Days Ownership Class
---------------- --------- ------------------- ---------- -------
<S> <C> <C> <C> <C>
Don V. Ingram............. 1,261,710(2) 414,787 1,676,497 10.7%
2200 Ross Ave., Suite
4500-E
L.B. 170
Dallas, Texas 75201
William Warshauer......... 1,135,743(3) 3,000 1,138,743 7.5%
430 W. Garfield Ave.
Coldwater, Michigan 49036
Mellon Financial
Corporation.............. 1,339,369(4) -0- 1,339,369 8.8%
One Mellon Bank Center
Pittsburgh, Pennsylvania
15258
Dimensional Fund Advisors
Inc...................... 1,165,500(5) -0- 1,165,500 7.6%
1299 Ocean Avenue, 11th
Floor
Santa Monica, California
90401
Eagle Asset Management,
Inc...................... 1,016,625(6) -0- 1,016,625 6.7%
880 Carillion Parkway
St. Petersburg, Florida
33716
Steve Bartlett............ 4,425 856 5,281 *
John J. Fleming........... 24,146 10,294 34,440 *
Jeb Hensarling............ 4,195 -0- 4,195 *
Don Navarro............... 4,678 30,294 34,972 *
Hugh G. Robinson.......... 625 -0- 625 *
Paul V. Dufour............ 160,670 251,113 411,803 2.7%
Richard L. Kerr........... 85,917 212,133 298,050 1.9%
Denis W. Ray.............. 5,137 18,334 23,471 *
M. Russ Robinson.......... 76,346(7) -0- 76,346 *
All Executive Officers and
Directors as a group
(18 persons, including
those individuals named
above)................... 2,912,331 1,275,092(8) 4,187,423 25.3%
</TABLE>
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*Less than 1%
(1) Except as otherwise indicated, the persons named in the table possess sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them. Includes shares of Common Stock held
by wives and minor children of such persons and corporations in which such
persons hold a controlling interest.
(2) Represents 1,021,569 shares owned by Mr. Ingram directly, 78,141 shares
owned by Mr. Ingram's wife and 162,000 shares held by trusts and custodial
accounts created for the benefit of Mr. Ingram's children
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<PAGE>
and relatives (of which Mr. Ingram is trustee). Substantially all of these
shares have been pledged or are held in margin maintenance accounts.
(3) Represents 16,954 shares owned by Mr. Warshauer directly, 16,129 shares
owned by Mr. Warshauer's wife and 1,102,660 shares owned by a limited
partnership in which both Mr. Warshauer and his wife own a 50% partnership
interest. Of these shares, 225,000 shares are held in an escrow fund and
subject to return to the Corporation under certain conditions pursuant to
an Escrow Agreement by and among Mr. Warshauer, his wife and the
Corporation, entered into in connection with the Corporation's acquisition
of Alchem Aluminum, Inc. in 1997.
(4) Information with respect to beneficial ownership of shares of Common Stock
by Mellon Financial Corporation is based solely upon the latest report of
Mellon Financial Corporation on Schedule 13G dated January 20, 2000 as
filed with the SEC. Mellon Financial Corporation and certain of its
affiliates have sole power to vote or to direct the vote of 1,300,467
shares, and sole power to dispose or to direct the disposition of
1,339,369 shares.
(5) Information with respect to beneficial ownership of shares of Common Stock
by Dimensional Fund Advisors Inc. is based solely upon the report of
Dimensional Fund Advisors Inc. on Schedule 13G dated February 4, 2000 as
filed with the SEC.
(6) Information with respect to beneficial ownership of shares of Common Stock
by Eagle Asset Management, Inc. is based solely upon the latest report of
Eagle Asset Management, Inc. on Schedule 13G dated January 6, 2000 as
filed with the SEC.
(7) Represents 71,546 shares owned by Mr. Robinson directly and 4,800 held by
trusts created for the benefit of Mr. Robinson's children. Of the shares
owned by Mr. Robinson, 47,502 shares are held in an escrow fund and
subject to return to the Corporation under certain conditions pursuant to
an Escrow Agreement by and between Mr. Robinson and the Corporation,
entered into in connection with the Corporation's acquisition of U.S. Zinc
Corporation in 1998.
(8) Represents 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 17, 2000.
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
II Directors expires at the Annual Meeting of Stockholders to be held on May
10, 2000, the term of office of the Class I Directors expires at the 2001
Annual Meeting of Stockholders and the term of office of the Class III
Directors expires at the 2002 Annual Meeting of Stockholders.
The persons named in the proxy will vote for John J. Fleming, Jeb Hensarling
and Don Navarro as nominees for election as Class II Directors except where
authority has been withheld as to a particular nominee or as to all nominees.
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 for any substitute
nominee designated by the Board.
4
<PAGE>
Directors and Nominees for Election to the Board of Directors
NOMINEES
Class II Directors.
<TABLE>
<CAPTION>
Name Age
---- ---
<S> <C>
John J. Fleming........................................................ 60
Jeb Hensarling......................................................... 42
Don Navarro............................................................ 55
</TABLE>
John J. Fleming has served as a director since 1989. Mr. Fleming is a
director of TransAtlantic Petroleum Corp., an oil and gas exploration and
production company. Mr. Fleming serves as president of Bonanza Energy Ltd., a
private energy and investment company. Mr. Fleming also serves as a director of
Gothic Energy Corporation.
Jeb Hensarling has served as a director since 1998. He is a principal and
owner of F-H & Associates, a public affairs and media relations consulting firm
located in Dallas, Texas. Mr. Hensarling has served as vice president of
Maverick Capital, an investment management firm, and as executive director of
the National Republican Senatorial Committee. Mr. Hensarling managed U.S.
Senator Phil Gramm's 1990 Reelection Campaign.
Don Navarro has served as a director since 1986. Mr. Navarro is the owner and
president of Don Navarro Company, a company which provides business and
management services to public and private companies, specializing in assisting
organizations to develop, refine and implement strategic plans.
DIRECTORS CONTINUING IN OFFICE
Class I Directors; Present Term Expires 2001.
<TABLE>
<CAPTION>
Name Age
---- ---
<S> <C>
Don V. Ingram.......................................................... 64
Steve Bartlett......................................................... 52
</TABLE>
Don V. Ingram has served as a director since 1988. He was elected chief
executive officer of the Corporation in February 1997 and has served as
Chairman of the Board of the Corporation since 1994. 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. Mr. Ingram is also a director of
TransAtlantic Petroleum Corp.
Steve Bartlett has served as a director since 1998. He serves as President
and CEO of Financial Services Roundtable, a Washington, D.C.-based association
of 100 of the largest financial services companies in the United States. He is
a the majority owner of Saranda Corporation, a custom manufacturer of
injection-molded plastics located in Phoenix, Arizona. He founded in 1976 and
served as Chairman of Meridian Products Corporation, a business similar to
Saranda, and sold his interest in 1999. Mr. Bartlett served as Mayor of Dallas,
Texas from 1991 until 1995, and as a member of the United States Congress from
1983 until 1991. Mr. Bartlett is also a director of Kaufman and Broad Home
Corporation.
Class III Directors; Present Term Expires 2002.
<TABLE>
<CAPTION>
Name Age
---- ---
<S> <C>
Hugh G. Robinson....................................................... 67
William Warshauer...................................................... 67
</TABLE>
5
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Hugh G. Robinson has served as a director since 1999. He is Chairman and
Chief Executive Officer of The Tetra Group, Inc., a construction management
firm located in Dallas, Texas. He has held that position since 1989. Prior to
then, Mr. Robinson was President of Cityplace Development Corporation, a real
estate development subsidiary of the Southland Corporation. Mr. Robinson is a
former Chairman and Board member of the Federal Reserve Bank of Dallas. Mr.
Robinson served as an officer in the United States Army, retiring with the rank
of Major General. He is currently a member of the Boards of Directors of A.H.
Belo Corporation, Guaranty Federal Savings Bank and Circuit City Stores, Inc.,
and is on the Advisory Board of TXU Electric.
William Warshauer has served as a director since 1999. He was the Chief
Executive Officer of Alchem Aluminum, Inc., a secondary specification aluminum
alloying firm that he founded in 1970. Alchem primarily serves the automotive
market from its facility located in Coldwater, Michigan. In November 1997 the
Corporation purchased all of the outstanding capital stock of Alchem.
The Board recommends that stockholders vote FOR John J. Fleming, Jeb
Hensarling and Don Navarro as nominees for election as Class II Directors at
the Annual Meeting of Stockholders.
MEETINGS OF DIRECTORS AND COMMITTEES
Board Meetings. The Board held a total of nine meetings in 1999. Each
director attended at least 75% of the meetings of the full Board and the
committees of which he was a member held during 1999. The Board has established
four standing committees to assist it in the discharge of its responsibilities.
In addition, the Board has created an Executive Compensation Subcommittee
within the Compensation Committee.
Audit Committee. The Audit Committee reviews the professional services
provided by the Corporation's independent accountants and the independence of
that 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 six
meetings in 1999. The members of the Audit Committee are Mr. Fleming, Chairman,
Mr. Hensarling and Mr. Robinson.
Compensation Committee. 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 (except with respect to matters
entrusted to the Executive Compensation Subcommittee, as described below). This
Committee held seven meetings in 1999. The members of the Compensation
Committee are Mr. Navarro, Chairman, Mr. Hensarling and Mr. Bartlett.
The Executive Compensation Subcommittee was formed during 1997 to succeed to
certain functions previously reserved to the Compensation Committee. The
Executive Compensation Subcommittee's principal responsibility is to review and
advise the board with respect to performance-based compensation of corporate
officers who are, or who are likely to become, subject to Section 162(m) of the
Internal Revenue Code (which limits the deductibility of compensation in excess
of $1,000,000 paid to a corporation's chief executive and four other most
highest compensated executive officers, unless certain conditions are met), and
equity awards to corporate officers and directors who are subject to Section 16
of the Exchange Act. The Subcommittee held five meetings in 1999. Messrs.
Hensarling (Chairman) and Bartlett currently comprise the members of this
subcommittee.
Environmental Committee. The Environmental Committee was established for the
purposes of providing oversight and reviewing, reporting on and making
recommendations to the Board regarding the Corporation's policies concerning
environmental, health and safety matters affecting the Corporation. This
Committee held one meeting in 1999. The members of the Environmental Committee
are Mr. Warshauer, Chairman, Mr. Bartlett and Mr. Robinson.
6
<PAGE>
Committee on Directors. 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. These suggestions must be sent in writing to the
Secretary of the Corporation at the Corporation's principal executive offices,
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 one meeting in
1999. The members of the Committee on Directors are Mr. Navarro, Chairman, Mr.
Fleming and Mr. Ingram. See also "2001 Annual Meeting."
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors of the Corporation (the
"Committee") has furnished the following report on executive compensation. The
Committee report documents the components of the Corporation's executive
officer compensation programs and describes the compensation philosophy on
which 1999 compensation determinations were made by the Committee with respect
to the executive officers of the Corporation, including the Chief Executive
Officer and the four other executive officers that are named in the
compensation tables (the "Named Executives Officers"). Because certain of the
functions of the Committee have been transferred to the Executive Compensation
Subcommittee (the "Subcommittee"), the Subcommittee joins in this report. The
Subcommittee was established in 1997 to address all issues before the
Committee that require decisions by directors who qualify as outside directors
under 162(m) of the Internal Revenue Code, and as non-employee directors under
16(b) of the Exchange Act.
Compensation Philosophy and Overall Objectives of Executive Compensation
Programs
It is the philosophy of the Corporation to ensure that executive
compensation be directly linked to continuous improvements in corporate
performance and increases in stockholder value. The following objectives have
been adopted by the Committee as guidelines for compensation decisions:
. Provide a competitive total executive compensation package that enables
the Corporation to attract and retain key executives.
. Integrate all pay programs with the Corporation's annual and long-term
business objectives and strategy, and focus executives on the
fulfillment of these objectives.
. Provide variable compensation opportunities that are directly linked
with the performance of the Corporation.
In 1999 the Committee engaged PricewaterhouseCoopers LLP ("PwC") to serve as
the Committee's independent consultant and assist the Committee in its
deliberations in determining 1999 compensation awards.
Cash Compensation
Cash compensation for 1999 included base salary and the Corporation's Annual
Incentive Compensation Plan awards. The base salary of each of the Named
Executive Officers is determined by an evaluation of the responsibilities of
that position and by comparison to the average level of salaries paid in the
competitive market in which the Corporation competes for comparable executive
ability and experience. Annually, the performance of each Named Executive
Officer is reviewed by the Subcommittee and, in the case of the other
executive officers, by the Chief Executive Officer, taking into account the
Corporation's operating and financial results for that year, the contribution
of each executive officer to these results, the achievement of goals
established for each executive officer at the beginning of each year and
competitive salary levels for persons in
7
<PAGE>
those positions in the markets in which the Corporation competes. To assist in
its deliberations, the Committee is advised by PwC in compiling comparable
salary and incentive compensation information for a number of representative
companies in the industry. Following its review of the performance of the Named
Executive Officers, the Subcommittee reports their recommendations for salaries
and incentive awards to the Board of Directors.
The Corporation implemented its Annual Incentive Compensation Plan
("Incentive Plan") in 1999. The Committee believes the Incentive Plan should be
the principal short-term incentive plan for providing cash bonus opportunities
for the Corporation's executives contingent upon profitability of operating
results. The Incentive Plan corporate financial targets for 1999 were return on
net assets ("RONA") compared to the Corporation's peer group and budgeted
earnings before interest, taxes, depreciation and amortization ("EBITDA"). The
Committee will continue to review and modify the performance goals for the
Incentive Plan as necessary to ensure reasonableness, achievability and
consistency with overall Corporation objectives and stockholder expectations.
In 1999, annual base salary increases and incentive compensation awards for the
Named Executive Officers were approved by the Subcommittee and reported to the
Board of Directors, and incentive compensation awards were approved by the
Committee for all of the other executive officers. The Committee believes these
recommended salary increases and incentive awards were warranted and consistent
with the performance of these executives during 1999 based on the Committee's
and Subcommittee's evaluation of each individual's overall contribution to
accomplishing the Corporation's 1999 corporate goals and of each individual's
achievement of individual goals during the year.
In certifying the 1999 Incentive Plan results, the Committee recognized that
the Corporation achieved 114% of its targeted corporate goals. In addition to
corporate goals, most participants in the Incentive Plan have business unit and
individual goals that were established within the first ninety days of 1999. In
December 1999, the Committee approved the fiscal 2000 EBITDA and RONA target
goals.
Long Term Incentives
The Committee believes that it is essential to align the interests of the
Corporation's executive officers and other key management personnel responsible
for the growth of the Corporation with the interests of the Corporation's
stockholders. The Committee believes that this is best accomplished through the
provision of stock-based and cash-based long-term incentives that align
themselves to enhancing the Corporation's value. Under its stock option plans,
the Corporation currently does not have sufficient shares reserved for grants
of new options to its executives. A large number of shares are reserved for
issuance under existing options, most of which feature exercise prices below
recently prevailing market prices for the Corporation's common stock. Instead
of requesting the Corporation's stockholders to approve the authorization of
additional shares under its option plans, the Committee recommended to the
Board that the Corporation adopt the IMCO Recycling Inc. Performance Share Unit
Plan ("PSU Plan"). See "Proposal to Approve the IMCO Recycling Inc. Performance
Share Unit Plan." The Committee will continue to review long-term incentives
and make recommendations, where it deems appropriate, to the Board of Directors
from time to time, to assure that the Named Executive Officers and other key
employees are appropriately motivated and rewarded based on the long-term
financial success of the Corporation.
Chief Executive Officer Compensation
In determining the compensation of Don V. Ingram, the Chairman and Chief
Executive Officer, the Subcommittee considered the Corporation's operating and
financial results for 1999, evaluated Mr. Ingram's individual performance and
contribution to those results and considered the compensation range for other
chief executive officers of companies in the industry. Based on that review and
assessment, the Subcommittee recommended, and the Board of Directors approved,
an increase to Mr. Ingram's base salary to $525,000 per year effective January
1, 2000 and an annual incentive award for 1999, as certified by the
Subcommittee, of $313,500, which represented 63% of Mr. Ingram's base salary
for 1999. The Subcommittee also granted Mr. Ingram options to purchase 25,000
shares of Comon Stock under the Corporation's Annual Incentive Program.
8
<PAGE>
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code disallows a corporation's tax
deduction for compensation paid to its chief executive officer and its named
executive officers in excess of $1,000,000 per person. Performance-based
compensation and certain other compensation are not subject to this deduction
limitation. Neither the Corporation's Chief Executive Officer nor any of its
Named Executive Officers received compensation in excess of this limitation in
1999. The Corporation continually reviews its compensation plans to minimize or
avoid potential adverse effects of this legislation. The Committee will
consider recommending such steps as may be required to qualify either annual or
long-term incentive compensation as performance-based. However, the Board, the
Committee and the Subcommittee reserve the authority to award non-deductible
compensation under circumstances they consider appropriate.
Summary
As a result of the concepts incorporated into the Corporation's compensation
program, the Committee believes that the total compensation program for
executive officers is competitive with the compensation programs provided by
other corporations with which the Corporation competes, emulates programs of
high-performing companies and will serve the best interests of the stockholders
of the Corporation. The Committee also believes this program design will
provide opportunities to participants that are consistent with the expectations
of the Board of Directors and with the returns that are generated on the behalf
of the Corporation's stockholders.
Compensation Committee
Compensation Committee Members:
Don Navarro, Chairman Steve Bartlett Jeb Hensarling
Executive Compensation Subcommittee Members:
Jeb Hensarling, Chairman Steve
Bartlett
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
(Securities Act) or the Exchange Act, except to the extent that the Corporation
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under those Acts.
Compensation Committee Interlocks and Insider Participation
During 1999, the Corporation paid Don Navarro Company, a firm owned by Mr.
Navarro, $145,000 for representing the Corporation regarding potential business
opportunities for the Corporation and in connection with several collection
matters that required the expertise of Mr. Navarro's firm. In addition, Mr.
Ingram, Chief Executive Officer and Chairman of the Board of the Corporation,
is a director of TransAtlantic Petroleum Corp., a Canadian oil and gas
exploration and production company. Mr. Fleming, a member of the Compensation
Committee until May 1999 is also a director of TransAtlantic Petroleum Corp.
Other than the foregoing, the Corporation has no interlocking relationships or
other transactions involving any of its Compensation Committee members that are
required to be reported under this heading by SEC rules, and no current or
former officer of the Corporation serves on the Compensation Committee.
9
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in the
cumulative total stockholder return on the Corporation's Common Stock (as
measured by dividing: (i) the sum of (A) the cumulative dividends for the
measurement period and (B) 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 (which includes the
Corporation) and (3) an index of peer companies selected by the Corporation
consisting of: Wellman Inc. and EnviroSource Inc. The Corporation considers
itself a part of the resource recovery industry, along with the other companies
in the peer index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG IMCO RECYCLING INC., THE S & P 500 INDEX,
THE S & P SMALLCAP 600 INDEX AND A PEER GROUP
[STOCK PRICE PERFORMANCE GRAPH]
---------------------------------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
---------------------------------------------------------------------
IMCO RECYCLING INC. 100 163 98 109 106 88
---------------------------------------------------------------------
PEER GROUP 100 82 64 74 36 63
---------------------------------------------------------------------
S & P 500 100 137 169 226 290 351
---------------------------------------------------------------------
S & P SMALLCAP 600 100 130 158 198 203 229
---------------------------------------------------------------------
* $100 invested on 12/31/94 in stock or index--including reinvestment of
dividends. Fiscal year ending December 31.
The foregoing graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act or the Exchange Act, except to the extent that
the Corporation specifically incorporates this information by reference, and
shall not otherwise be deemed filed under those Acts.
10
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning
compensation paid or accrued by the Corporation to or on behalf of the
Corporation's chief executive officers and each of the other four most highly
compensated executive officers of the Corporation and its subsidiaries
determined as of the end of the last fiscal year (referred to collectively as
the "Named Executive Officers") for the fiscal years ended December 31, 1999,
1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------------ ---------------------
Name and Principle Other annual Securities underlying All other
Position Year Salary Bonus(1) compensation options (#) compensation(2)
- ------------------ ---- -------- -------- ------------ --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
D.V. Ingram............. 1999 $495,000 $309,210 -- 25,000 $18,351
Chief Executive Officer 1998 $361,200 $100,910 -- 200,000 $19,141
1997 $320,833 $243,000 -- 155,000 --
R.L. Kerr............... 1999 $288,000 $151,794 $ 12,950(3) -- $14,385
President and Chief 1998 $258,000 $ 62,447 -- 45,000 $21,238
Operating Officer
1997 $247,058 $183,000 -- 95,000 $13,770
P.V. Dufour............. 1999 $280,000 $151,794 $ 15,390(3) -- $14,775
Executive Vice 1998 $242,250 $ 62,427 -- 45,000 $21,293
President, Chief
Financial
Officer and Secretary 1997 $232.000 $175,400 -- 95,000 $13,935
D.W. Ray................ 1999 $229,583 $ 87,579 -- -- $12,229
Executive Vice 1998 $146,900 $ 50,000 $102,756(4) 40,000 $ 7,693
President,
Aluminum 1997 -- -- -- -- --
M. Russ Robinson........ 1999 $216,000 $ 90,000 -- -- $ 4,463
President, 1998 -- -- -- -- --
U.S. Zinc Corporation 1997 -- -- -- -- --
</TABLE>
- ---------------------
(1) Amounts represent cash bonus payments made to Named Executive Officers (a)
in 2000 and 1999 with respect to fiscal year 1999; (b) in 1999 and 1998
with respect to fiscal year 1998; and (c) in 1998 and 1997 with respect to
fiscal year 1997.
(2) Represents compensation paid or accrued pursuant to the Corporation's
Retirement Savings Plan and Executive Life and Health Insurance Programs
described below.
Retirement Savings Plan. Executive officers who have served for at least one
year are eligible to participate in the Corporation's Retirement Savings
Plan, which includes both a profit sharing plan feature and a 401(k)
feature.
The Corporation contributed the following amounts to the Retirement Savings
Plan for the accounts of the Named Executive Officers during 1999, 1998 and
1997:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Don V. Ingram...................................... $11,091 $11,161 --
Richard L. Kerr.................................... $13,000 $13,000 $12,750
Paul V. Dufour..................................... $13,000 $13,000 $12,750
Denis W. Ray....................................... $11,804 -- --
M. Russ Robinson................................... $ 4,463 -- --
Executive Life Insurance Programs. The Corporation has entered into split-
dollar life insurance agreements with the Named Executive Officers to
provide them with death benefits in the following amounts: Mr. Ingram--
$3,000,000; Messrs. Kerr and Dufour--$1,000,000 each; Mr. Ray--$500,000. The
amounts below include the entire dollar amount of the term life portion of
each insurance premium and includes, for Messrs. Kerr, Dufour, and Ray in
1999 only, the present value of the interest-free use of the non-term
portion of each premium:
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Don V. Ingram...................................... $ 7,260 $ 7,980 --
Richard L. Kerr.................................... $ 1,385 $ 8,238 $ 1,020
Paul V. Dufour..................................... $ 1,775 $ 8,293 $ 1,185
Denis W. Ray....................................... $ 425 $ 7,673 --
M. Russ Robinson................................... -- -- --
</TABLE>
11
<PAGE>
(3) Represents interest forgiven under the terms of the Executive Option
Exercise Loan Program. See "Option Exercises and Holdings--Loan Program"
below.
(4) Represents reimbursement of moving expenses to Mr. Ray under the
Corporation's relocation policy.
Stock Options
The options shown below were awarded during 1999 under the Corporation's 1996
Annual Incentive Program:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------
Percent of total
Number of securities options granted Hypothetical
underlying options to employees in Exercise or Expiration Grant Date
Name granted (1) fiscal year base price date Value (2)
- ---- -------------------- ---------------- ----------- ---------- ------------
(#) (%) ($/Sh)
<S> <C> <C> <C> <C> <C>
D.V. Ingram............. 25,000 12.4% 14.8125 1/14/2009 $104,750
R.L. Kerr............... -0- 0 NA NA NA
P.V. Dufour............. -0- 0 NA NA NA
D.W. Ray................ -0- 0 NA NA NA
M.R. Robinson........... -0- 0 NA NA NA
</TABLE>
- ---------------------
(1) All options granted to officers will vest in three equal annual increments
beginning on the first anniversary date of the grant.
(2) The options are valued pursuant to the Black-Scholes valuation model, based
upon the following assumptions: (a) expected stock price volatility
calculated using monthly changes in stock price since January 1994,
resulting in a stock price volatility of 0.329; (b) a risk-free rate of
return calculated using the interest rates of five-year U.S. Treasury notes
as of the date of the grant, resulting in a risk-free rate of return
assumption of 4.61% for options granted as of January 14, 1999, (c) a
weighted dividend yield assumption of 2.11%, determined by dividing the
current $0.24 per share annualized dividends by the fair market value of
the Common Stock on the date of the grant; and (d) a time of exercise
assumption of four years (although the actual option term is ten years,
that period was reduced for valuation purposes to reflect the non-
transferability, vesting schedule and risk of forfeiture of the options).
12
<PAGE>
Option Exercises and Holdings
General. The following table provides information with respect to the Named
Executive Officers concerning (i) the exercise of options and (ii) unexercised
options held as of the end of fiscal 1999 under the Corporation's Amended and
Restated Stock Option Plan (1990), the 1992 Stock Option Plan and the 1996
Annual Incentive Program:
AGGREGATED OPTION EXERCISES IN 1999 AND DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
Exercisable Unexercisable
------------------------------ ------------------------------------
Number of Value of Value of
shares underlying unexercised Number of unexercised
unexercised in-the-money shares underlying in-the-money
Shares acquired Value options at options at unexercised options at
Name on exercise (#) realized(1) 12/31/99 (#) 12/31/99(2) options at 12/31/99 (#) 12/31/99(2)
- ---- --------------- ----------- ----------------- ------------ ----------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
D.V. Ingram............. -0- -0- 346,454 $ 0 209,998 $ 0
R.L. Kerr............... -0- -0- 187,133 $ 0 61,667 $ 0
P.V. Dufour............. -0- -0- 226,133 $ 0 61,667 $ 0
D.W. Ray................ -0- -0- 13,334 $ 0 26,666 $ 0
M.R. Robinson........... -0- -0- -0- $ 0 -0- $ 0
</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 NYSE composite tape
on December 31, 1999 was $12.625 per share.
Loan Program. During 1998, the Corporation, acting through the Compensation
Committee, extended loans to certain management employees under the
Corporation's Executive Option Exercise Loan Program (the "Loan Program"). The
Loan Program was designed to facilitate these employees' ability to exercise
their outstanding options and to pay their federal and state taxes realized
upon exercise. All loans under the Loan Program bear interest at the
"applicable federal rate," and all loans are secured by the shares purchased
with the proceeds of the loan. Each loan matures in five years. Interest on
each "Tax Loan" is due and payable annually and at maturity. Interest on each
"Exercise Loan" is due and payable at maturity. However, on each anniversary
date of an Exercise Loan, if the employee remains employed with the
Corporation, 50% of the interest accrued during the most recent year will be
forgiven and 50% of the interest not forgiven from the prior year will also be
forgiven; all remaining interest will be forgiven on the maturity date.
On March 1, 2000, loans based upon the terms set forth above were outstanding
to two of the named executive officers as follows: (i) Mr. Kerr, $454,390
(Exercise Loan) and $131,784 (Tax Loan), and (ii) Mr. Dufour, $540,000
(Exercise Loan) and $305,822 (Tax Loan). In addition, as of March 1, 2000, the
Corporation had an aggregate of (i) $629,790 in Exercise Loans outstanding and
(ii) $204,561 in Tax Loans outstanding to three other executive officers.
Directors' Compensation
The 1996 Annual Incentive Program provides that each non-employee director
shall be granted as a retainer on a quarterly basis (i) a number of shares of
Common Stock to be determined from time to time by the Board (the "retainer
shares") plus (ii) a cash payment equal to the fair market value of the
retainer shares, determined over the five successive trading days prior to the
quarterly retainer award date. If a director elects prior to the beginning of
the fiscal quarter, the director may take a total retainer for that quarter
equal to twice the number of the retainer shares, in lieu of the cash portion
of the quarterly retainer for that quarter. During 1999, the number of shares
determined by the Board to constitute the number of retainer shares to be
granted each quarter to each non-employee director was 250 shares; the
aggregate number of shares issued by the
13
<PAGE>
Corporation as retainer shares during 1999 was 7,375 and the aggregate cash
payments made were $82,859. 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. The Chairman of the Compensation
Committee is to receive an annual cash retainer of $4,000; the Chairmen of the
other standing committees are each to receive annual retainers of $2,000.
The Corporation's 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 aggregate fair market value (determined over the
previous four fiscal quarters when calculating the fair market value of the
Common Stock retainer component) of the retainer granted to each director by
the fair market value per share of Common Stock on December 15th. On December
15, 1999, pursuant to the 1992 Stock Option Plan, Messrs. Bartlett, Fleming and
Navarro were each granted an option to purchase 2,923 shares, Mr. Hensarling
was granted an option to purchase 2,767 shares and Messrs. Robinson and
Warshauer were each granted an option to purchase 1,148 shares of Common Stock.
The exercise price per share with respect to these options is $10.5625 (the
closing price per share on the NYSE composite tape on December 15, 1999).
Compliance with Section 16(a)
Section 16(a) of the Exchange Act 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 SEC. These persons are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms filed by them. Based solely
upon the Corporation's review of those forms furnished to it and written
representations from certain reporting persons, the Corporation believes that
all filing requirements applicable to the Corporation's executive officers,
directors and 10% stockholders were complied with during 1999.
Certain Transactions
In May 1999, the Corporation entered into a renewable one-year consulting
agreement with Mr. Warshauer. Under the agreement, Mr. Warshauer is engaged as
a consultant and advisor to the Corporation in connection with its automotive
business strategic planning and market development. The agreement provides that
Mr. Warshauer is to be paid $100,000 per year, related out-of-pocket expenses
and medical insurance coverage.
The Corporation has entered into an agreement effective as of December 30,
1999 with two of the former stockholders of U.S. Zinc Corporation, M. Russ
Robinson, the President of U.S. Zinc, and his brother, Howard Robinson. The
agreement contemplates the conveyance of real property in Chicago, Illinois
owned by Midwest Zinc Corporation, a subsidiary of U.S. Zinc, to a limited
liability company owned by the Robinsons, in exchange for $10,000 cash and a
secured $2,440,000 promissory note. The debt under the note is to mature June
30, 2002, bear interest at a rate of 8% per annum payable in monthly
installments, and is to be secured by a first lien mortgage on the property.
The Corporation's recorded allocated cost of the property was $2,000,000. The
purchase price for the real property was determined by the parties through
arms'-length negotiations and a review of sales prices for comparable
properties in the area. The Corporation has agreed to enter into a lease with
the purchaser for the continued use of the property through December 31, 2001,
at an annual rental cost of $195,000, payable in monthly installments. In
addition, for a period of 13 months after closing, the purchaser will have an
option to sell the property to Midwest Zinc for $2,440,000, less the
outstanding balance owed on the note. Also, until June 30, 2002, the purchaser
may, under certain circumstances, require Midwest Zinc to repurchase the
property for the same amount in the event the purchaser becomes aware of
certain environmental liabilities.
In addition, the Corporation and the Robinsons amended, effective December
30, 1999, their earn-out agreement entered into in connection with the
Corporation's acquisition of U.S. Zinc in July 1998. The earn-
14
<PAGE>
out agreement provides for additional cash payments to the Robinsons if U.S.
Zinc's annual EBITDA exceeds certain specified annual thresholds. Under the
amendment, among other changes, the Corporation increased the 1999 EBITDA
threshold by an additional $1,500,000 and increased the threshold for 2001 by
an additional $200,000. No earn-out amounts for 1999 were required to be paid
to the Robinsons under the amended earn-out agreement. Any amounts payable
under the earn-out agreement to the Robinsons for subsequent fiscal years are
to be applied against the balance owed on the $2,440,000 note, until the debt
has been fully paid.
See "Compensation Committee Report to Stockholders--Compensation Committee
Interlocks and Insider Participation" above.
PROPOSAL TO ADOPT THE IMCO RECYCLING INC.
PERFORMANCE SHARE UNIT PLAN
General
On December 15, 1999, the Board of Directors of the Corporation adopted the
terms of the IMCO Recycling Inc. Performance Share Unit Plan (the "PSU Plan"),
subject to approval by the Company's stockholders at the Annual Meeting.
The purpose of the PSU Plan is to advance the interests of the Corporation by
. encouraging the long-term commitment of key employees,
. motivating performance of key employees through long-term performance
related incentives,
. attracting and retaining key employees by providing incentive
compensation opportunities, and
. enabling participation by key employees in the long-term growth and
financial success of the Company.
Summary Description of the PSU Plan
The following summary of the PSU Plan is qualified in its entirety by the
text of the PSU Plan, which is attached as Appendix A to this Proxy Statement.
The PSU Plan is administered by the Compensation Committee, or the Executive
Compensation Subcommittee consisting of not less than two Directors of the
Corporation.
The PSU Plan provides for grants by the Committee of performance units and
performance share units. Important provisions of the PSU Plan are as follows:
Eligibility. The Committee has full and final authority, in its discretion,
to determine those employees of the Corporation and its subsidiaries to whom
awards will be granted under the PSU Plan, and the other conditions of the
grant of such awards. Specifically, the Committee is authorized to grant awards
to key employees in a position to contribute materially to the Corporation's
continued growth and development and to its long-term financial success. The
Committee may also designate a number of units and delegate to the
Corporation's Chief Executive Officer the authority to grant from those units
awards to eligible employees, so long as those employees at date of grant are
not an officer of the Company and are not likely to be a "covered employee"
under Code Section 162(m). Approximately 25 employees are eligible to
participate in the PSU Plan.
Limitation of Benefits. No participant may receive during any fiscal year
payment of awards in an amount exceeding 300% of the target amount designated
in the participant's award agreement, and in any event, awards exceeding
$4,500,000 for any performance period.
Determination of Benefits. For grants of performance units and performance
share units, the Committee shall determine
. the number of units to be granted to each participant,
15
<PAGE>
. the minimum, target and maximum value of each unit for the performance
period,
. the time period--or performance period--during which performance goals
must be achieved (generally expected to be three years), and
. the performance goals that must be met before a performance unit or
performance share unit award can be paid.
The performance goal criteria and objectives must be set by the Committee at
the date of grant of the award. The particular criteria may be earnings before
interest, taxes, depreciation and amortization (EBITDA), return on assets,
return on net assets, return on equity, growth in net earnings, growth in
earnings per share or growth in tangible net assets, but will not necessarily
be limited to these criteria. For grants made in fiscal 2000, it is anticipated
that the principal performance goal criteria and objectives will be based on
EBITDA and return on net assets of the Corporation. Future goals may be
established on a corporate-wide basis or with respect to one or more operating
units, divisions, acquired businesses, or joint ventures. The Committee will
make appropriate adjustments to exclude the effect of extraordinary corporate
transactions, such as acquisitions, divestitures, recapitalizations and
reorganizations, and will not take into account extraordinary or non-recurring
accounting charges or items that affect the results under the applicable
perfomance measures. The Committee shall certify the levels of the performance
goals attained, and the amount of the award payable, at the end of the
performance period when the units or share units become "vested;" however,
awards may be accelerated in the Committee's discretion.
Payment of Awards. The awards will be paid to the participant after the end
of the performance period. Awards under the PSU Plan are payable only in cash.
Individual awards may provide for an option to defer all or a portion of the
payment of the participants' units or share units to a subsequent year or
years. Deferred units may accrue an interest or appreciation factor, to be
determined by the Committee in its sole discretion. The unvested awards will be
forfeited if the participant's employment with the Corporation terminates for
any reason other than his death, disability or retirement or a change in
control. If the participant's employment with the Corporation terminates
because of his death, disability, or retirement, the participant (or his estate
or beneficiary, as the case may be) will be entitled to a pro-rated payment
based upon the number of months' service under his performance period and the
level of achievement of his performance goals, to be determined after the end
of the performance period.
Amendment and Termination of the Long-Term Plan. The Board of Directors may
terminate or amend the PSU Plan. No amendment, termination or modification of
the PSU Plan may affect awards previously granted without the consent of the
participant. The PSU Plan will remain in effect until December 15, 2009, unless
the Board earlier terminates it.
Change in Control. The PSU Plan contains a change in control provision. The
definition of "change in control" is substantially identical to that contained
in several of the Corporation's equity benefit plans. In the event of a change
of control event in which the outstanding awards under the PSU Plan are not
assumed by the corporation surviving or resulting from the change in control or
are not replaced by fully equivalent substitute awards, awards will be
accelerated and paid to participants based on the extent to which the
performance goals have been achieved through the change in control date, but in
any event, in an amount not less than that participant's target award amount.
If the awards are assumed by the surviving or resulting entity or replaced by
fully equivalent substitute awards, no acceleration of vesting will occur.
However, during the period beginning 90 days before and continuing for 12
months after the change of control date, if the particpant's employment with
the Corporation is terminated for any reason other than a termination for
"cause" or the participant's resignation for "good reason" (for example, in
circumstances where the participant's position or his base salary is reduced),
the awards will fully vest and be payable by the Corporation. The amount to be
paid in that instance will be the greater of his or her target award amount, or
the amount to be paid based on attainment of performance goals.
Federal Income Tax Consequences. Under current federal income tax laws,
participants will realize ordinary income equal to the amount received in the
year of payment of the award. The Corporation will
16
<PAGE>
receive a deduction for the amount constituting ordinary income to the
participant, provided that the award satisfies the requirements of Code Section
162(m), which limits the deductibility of nonperformance-related compensation
paid to certain corporate executives. It is the Company's intention that the
PSU Plan be constructed and administered for its highest-paid executive
officers in a manner which maximizes the deductibility of compensation for the
Company under Code Section 162(m).
Plan Benefits
The Corporation has not previously adopted any long-term compensation
benefits similar to those to be granted under the PSU Plan. Awards for fiscal
2000 are tied to performance goals based on EBITDA and return on net assets.
The actual amount of awards to be paid to these and future participants cannot
be determined at this time, since actual amounts will depend on actual
corporate performance measured against attainment of the preestablished
performance goals. However, assuming that the same performance goals
established for fiscal 2000 grants had been in effect in 1999, and based on the
Corporation's EBITDA and return on net assets calculated with respect to fiscal
1997 through fiscal 1999, no incentive compensation would have been paid to
participants under the PSU Plan for fiscal 1999.
The Board recommends that stockholders vote FOR the proposal to approve the
adoption of the IMCO Recycling Inc. Performance Share Unit Plan.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board, upon the recommendation of its Audit Committee, has selected Ernst
& Young LLP as its independent auditors to examine the consolidated financial
statements of the Corporation for 2000. 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
2000.
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 these brokerage firms and other custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection with forwarding such materials. In addition, the Corporation has
retained the services of Georgeson Shareholder Communications Inc., a proxy
solicitation firm, for assistance in connection with the Annual Meeting at a
cost of approximately $7,000 plus reimbursement of their reasonable out-of-
pocket expenses.
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.
17
<PAGE>
The Annual Report to Stockholders for the fiscal year ended December 31,
1999, which includes financial statements, accompanies this Proxy Statement.
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 to you
if you send a written request addressed to IMCO Recycling Inc., Attn: Paul V.
Dufour, 5215 N. O'Connor Blvd., Suite 1500, Central Tower at Williams Square,
Irving, Texas 75039, telephone (972)-401-7200. The Corporation also will
furnish its 10-K annual report to you if you are a "beneficial owner" of Common
Stock at no charge if you send a written request, addressed to Mr. Dufour,
containing a good faith representation that at the record date you were a
beneficial owner of Common Stock of the Corporation entitled to vote at the
annual meeting of stockholders to be held May 10, 2000. 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 7, 2000
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Appendix A
IMCO RECYCLING INC.
PERFORMANCE SHARE UNIT PLAN
SECTION 1. ESTABLISHMENT, PURPOSE,
AND EFFECTIVE DATE OF PLAN
1.1 Establishment. IMCO Recycling Inc., a Delaware corporation, hereby
establishes the "IMCO RECYCLING INC. Performance Share Unit Plan" for key
employees (the "Plan"). The Plan permits the grant of performance units and
performance share units.
1.2 Purpose. The purpose of the Plan is to foster and promote the long-term
financial success of the Company and its Subsidiaries and materially increase
the value of the Company and its Subsidiaries by (a) encouraging the long-term
commitment of key employees, (b) motivating performance of key employees by
means of long-term performance related incentives, (c) attracting and retaining
outstanding key employees by providing incentive compensation opportunities,
and (d) enabling participation by key employees in the long-term growth and
financial success of the Company and its Subsidiaries.
1.3 Effective Date. The Plan shall become effective upon its adoption by the
Board of Directors of the Company (i.e., December 15, 1999), subject to
approval by the stockholders of the Company. Awards may be granted hereunder on
or after the effective date but shall in no event be exercisable by or payable
to a Participant prior to such stockholder approval; and, if such approval of
the stockholders is not obtained within twelve (12) months after the effective
date, such Awards shall be of no force and effect.
SECTION 2. DEFINITIONS
2.1 Definitions. In addition to the terms defined elsewhere herein, whenever
used herein, the following terms shall have their respective meanings set forth
below:
(a) "Award" means any Performance Unit or Performance Share Unit granted
pursuant to the Plan.
(b) "Award Agreement" means a written agreement between a Participant and
the Company which sets forth the terms of the grant of an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means any action by the Participant or inaction by the
Participant that constitutes: (i) a breach of a written employment
agreement by that Participant; or (ii) misconduct, dishonesty, disloyalty,
disobedience or action that might reasonably injure the Company or any or
its Subsidiaries or their business interests or reputation.
(e) "Change in Control" shall have the meaning set forth in Section 10.2.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the Compensation Committee of the Board or a
subcommittee thereof, which shall consist of at least two members.
(h) "Company" means IMCO Recycling Inc., a Delaware corporation.
(i) "Disability" means any mental or physical illness, condition,
disability or incapacity that prevents the Participant from reasonably
discharging the Participant's duties and responsibilities to the Company,
as determined by the Committee in its sole discretion.
(j) "Employee" means a regular salaried employee (including officers and
directors who are also employees) of the Company or any of its
Subsidiaries, or any branch or division thereof. An Award may be granted to
a potential Employee in connection with hiring, retention or otherwise,
prior to the date the
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Employee first performs services for the Company or its Subsidiaries,
provided that such Award shall not become vested to any extent prior to the
date the Employee first performs such services.
(k) "Participant" means any Employee designated by the Committee to
participate in the Plan.
(l) "Performance Goals" shall mean the criteria and objectives determined
by the Committee pursuant to the Plan, which shall be satisfied or met
during the applicable Performance Period as a condition precedent to the
Participant's receipt of payment with respect to any Performance Unit Award
or Performance Share Unit Award. Such criteria and objectives may include,
but are not limited to, earnings before interest, taxes, depreciation and
amortization; return on assets; return on equity; growth in net earnings;
growth in earnings per share; tangible net asset growth; any combination of
the foregoing; or any other financial criteria and objectives determined by
the Committee.
(m) "Performance Period" means a period of time determined at date of
grant by the Committee over which performance is measured for the purpose
of determining a Participant's right to and the payment value of any
Performance Unit Award or Performance Share Unit Award.
(n) "Performance Unit Award" or "Performance Share Unit Award" means an
Award representing a contingent right to receive cash at the end of a
Performance Period based upon the achievement of certain Performance Goals
pursuant to Section 6 of the Plan.
(o) "Plan" means the IMCO Recycling Inc. Performance Share Unit Plan as
set forth herein and any amendments hereto.
(p) "Resigns for Good Reason" means a Participant's resignation caused
by, and within ninety (90) days after the occurrence of, any one of the
following: (i) an action is taken by the Company which results in a
material diminution in the position or status of the Participant with the
Company immediately prior to said action, except in connection with a
termination of the Participant's employment as a result of the
Participant's Disability or for Cause; (ii) a transfer or proposed transfer
of the Participant to a location outside of the Participant's city of
residence immediately prior to such transfer, without the Participant's
prior written consent; or (iii) the Company reduces the annual base salary
of the Participant, unless such decrease is the result of a general
reduction affecting the annual base salaries of sixty percent (60%) or more
of the then similarly situated employees of the Company; provided that the
Company has failed to rescind or remedy the action or occurrence prompting
such resignation within five (5) days (or if it requires a longer period, a
reasonable period of time) after the Participant has given the Company
written notice identifying such action or occurrence.
(q) "Retirement" means termination of employment due to retirement from
the Company and its Subsidiaries in accordance with standard retirement
policies of the Company and its Subsidiaries then in effect, or permitted
early retirement as determined by the Board in its sole discretion.
(r) "Subsidiary" means any corporation or entity of which more than 50%
of the outstanding securities or ownership interests having ordinary voting
power to elect a majority of the members of the Board of Directors or
persons in a similar capacity of such corporation or entity, is, directly
or indirectly, owned by the Company.
2.2 Definitional Terms; Gender and Number. All terms defined in this Plan
shall have the meanings set forth herein when used in any Award Agreement or
other document made or delivered pursuant to the Plan, except where the context
thereof shall otherwise require. Except when otherwise indicated by the
context, words in the masculine gender when used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular. The words "hereof," "herein," "hereunder," and similar
terms when used in this Plan shall refer to this Plan as a whole and not to any
particular provision of the Plan.
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SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Participants in the Plan shall be selected
by the Committee from among those Employees who, in the opinion of the
Committee, are key employees in a position to contribute materially to the
Company's continued growth and development and to its long-term financial
success. The Committee, upon its own action, may grant, but shall not be
required to grant, an Award to any eligible Employee of the Company or any
Subsidiary. The Committee shall determine the amounts, terms and conditions of
each Award granted hereunder. Awards may be granted by the Committee at any
time and from time to time to new Participants, or to already-participating
Participants, or to a greater or lesser number of Participants, and may include
or exclude previous Participants, as the Committee shall determine. The grant
of an Award shall be evidenced by an Award Agreement setting forth such terms,
provisions, limitations and performance criteria as are approved by the
Committee, but not inconsistent with the Plan.
Except as required by this Plan, Awards granted at different times need not
contain similar provisions. The Committee's determinations under the Plan
(including without limitation determinations of which Employees are to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Award Agreements evidencing same) need not be uniform and
may be made by the Committee selectively among Participants who receive, or are
eligible to receive, Awards under the Plan.
Notwithstanding any other provision contained in this Plan to the contrary,
the Committee may delegate to the Chief Executive Officer of the Company from
time to time the authority to grant up to a certain number (to be designated by
the Committee from time to time) of Performance Units and/or Performance Share
Units to be awarded to eligible Employees to be chosen by the Chief Executive
Officer in his sole discretion, so long as those Employees are not at the date
of grant an officer of the Company and are not and are not likely to be a
"covered employee" (as that term is defined under Section 162(m) of the Code
and the Treasury Regulations promulgated thereunder).
SECTION 4. ADMINISTRATION
4.1 Administration. The Committee shall be responsible for the administration
of the Plan. Any member of the Committee may be removed at any time, with or
without cause, by resolution of the Board in its sole discretion. Any vacancy
occurring in the membership of the Committee may be filled by appointment by
the Board.
Plan administrative costs and expenses shall be paid by the Company. The
Committee is authorized to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, to correct any errors or inconsistencies in and make adjustments for
mistakes or errors made in the administration of the Plan, and to make all
other determinations necessary or advisable for the administration and
application of the Plan, including but not limited to the eligibility and
participation determinations as set forth in Section 3. Notwithstanding any
provision contained herein to the contrary, the Committee may, at any time and
from time to time, in its absolute discretion (i) accelerate the date on which
any Award granted under the Plan vests, (ii) extend the date on which any Award
granted under the Plan terminates, or (iii) remove, suspend or alter the
restrictions imposed with respect to any Award granted under the Plan. Except
as otherwise provided herein, determinations, interpretations, or other actions
made or taken by the Committee pursuant to the provisions of the Plan shall be
final and binding and conclusive for all purposes and upon all persons
whomsoever, including the Company and all Participants.
To the extent that the Committee determines that the restrictions imposed by
the Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.
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SECTION 5. DURATION OF PLAN
5.1 Duration of Plan. The Plan shall remain in effect, subject to the Board's
right to earlier terminate the Plan pursuant to Section 11 hereof, until
December 15, 2009. Notwithstanding the foregoing, all Awards granted prior to
the date specified in the preceding sentence will continue to be effective in
accordance with their terms and conditions.
SECTION 6. PERFORMANCE UNIT AWARDS
AND PERFORMANCE SHARE UNIT AWARDS
6.1 Grant of Performance Unit or Performance Share Unit Awards. Subject to
the provisions of this Section 6, Performance Unit Awards or Performance Share
Unit Awards may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Units or Performance Share
Units to be awarded to any Participant. Any Award shall be subject to such
conditions, restrictions and contingencies (including such Performance Goals)
as the Committee shall determine. The Performance Period shall also be
determined by the Committee and set forth in the Award Agreement.
6.2 Performance Goals. At the beginning of each Performance Period, the
Committee shall (i) establish for each Performance Period the specific
Performance Goals as the Committee believes are relevant to the Company's
overall business objectives; (ii) determine the value of a Performance Unit or
a Performance Share Unit relative to the Performance Goals; and (iii) instruct
senior management to notify each Participant in writing of the established
Performance Goals and the minimum, target, and maximum Performance Unit or
Performance Share Unit value for such Performance Period.
6.3 Adjustments. The Committee will make appropriate adjustments to exclude
the effect of extraordinary corporate transactions, such as acquisitions,
divestitures, recapitalizations and reorganizations, and will not take into
account extraordinary or non-recurring accounting charges and items, insofar as
they would otherwise affect the results under the applicable Performance Goals.
6.4 Payment. Upon completion of the Performance Period, the Committee shall
certify the level of the Performance Goals attained and the amount of the Award
payable as a result thereof. The basis for payment of each Performance Unit or
Performance Share Unit for a given Performance Period shall be the achievement
of those Performance Goals determined by the Committee at the beginning of the
Performance Period. If minimum performance is not achieved for a Performance
Period, no payment shall be made, the Performance Unit Award or Performance
Share Unit Award will terminate and all contingent rights thereunder shall
cease. If minimum performance is achieved or exceeded, the value of a
Performance Unit or Performance Share Unit shall be based on the degree to
which actual performance met or exceeded the pre-established minimum
performance standards, as determined by the Committee. The amount of payment
shall be determined by multiplying the number of Performance Units or
Performance Share Units granted at the beginning of the Performance Period
times the final Performance Unit or Performance Share Unit value. Payments
shall be made in cash following the close of the applicable Performance Period.
6.5 Deferral. If the terms of the particular Award granted by the Committee
so provide, the Participant may be provided an option to defer payment of the
Participant's vested Performance Unit Award or Performance Share Unit Award.
6.6 Termination of Employment Due To Death, Disability or Retirement. In the
case of death, Disability, or Retirement, the holder of a Performance Unit or
Performance Share Unit (or his beneficiary, as the case may be) shall be
entitled to receive following the end of the particular Performance Period, a
pro rata payment based on the number of months' service during the Performance
Period, and the level of achievement of Performance Goals during the
Performance Period, to be determined by the Committee following the end of the
Performance Period.
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6.7 Termination of Employment Other Than Death, Disability or
Retirement. Except in circumstances in which a Change in Control is involved
pursuant to Section 9 hereof, in the event that a Participant terminates
employment with the Company for any reason other than death, Disability or
Retirement, all Performance Unit Awards and Performance Share Unit Awards shall
be forfeited.
6.8 Funding. No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets in a manner that would provide any
Participant any rights that are greater than those of a general creditor of the
Company, nor shall the Company maintain separate bank accounts, books, records
or other evidence of the existence of a segregated or separately maintained or
administered fund if such action would provide any Participant with any rights
that are greater than those of a general creditor of the Company. Participants
shall have no rights under the Plan other than as unsecured general creditors
of the Company. However, the Company may establish a "Rabbi Trust" for purposes
of securing the payment pursuant to a Change in Control.
6.9 Nontransferability. Performance Units or Performance Share Units granted
under the Plan may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution until the termination of the applicable Performance Period. All
rights with respect to Performance Unit Awards and Performance Share Unit
Awards granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.
6.10 Restrictions on Awards. It is intended that the Plan will provide
Participants with opportunities for long-term incentive compensation which is
not subject to the deduction limitation rules prescribed under Section 162(m)
of the Code, and that the Plan be construed to the degree possible as providing
for remumeration which is "performance-based compensation" within the meaning
of Section 162(m) of the Code and the Treasury Regulations promulgated
thereunder. Notwithstanding the foregoing, the Committee may grant Awards to
non-officers and individuals who are not and are likely not to be "covered
employees" as that term is defined under Section 162(m) and the Treasury
Regulations, which Awards may thereby not meet the requirements of being
"performance-based compensation." In order for Awards to be "performance-based
compensation," the grant of the Awards and the establishment of the Performance
Goals shall be made during the period required under Section 162(m) of the
Code.
6.11 Maximum Amount. No Participant may receive during any fiscal year of the
Company, payment of Awards covering an aggregate of more than 300% of the
target amount designated in the Participant's Award Agreement, which amount
must be based on maximum achievement of Performance Goals and certified by the
Committee. In addition, and in any event, no Participant may receive during any
fiscal year payment of Awards totaling in excess of $4,500,000.
SECTION 7. BENEFICIARY DESIGNATION
7.1 Beneficiary Designation. Each Participant under the Plan may name, from
time to time, any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid in the event
of such Participant's death before such Participant receives any or all of such
benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Participant in writing with the Committee
during his lifetime. In the absence of any such designation, benefits remaining
unpaid at the Participant's death shall be paid to his estate.
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SECTION 8. RIGHTS OF EMPLOYEES
8.1 Employment. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time
or confer upon any Participant any right to continue in the employ of the
Company.
8.2 Participation. No Employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.
SECTION 9. CHANGE IN CONTROL
9.1 In General.
(a) Notwithstanding any other provision contained herein, in the event of
a Change in Control, as defined in Section 9.2 below, affecting the Company
in which the outstanding Awards granted by the Company prior to such Change
in Control (and the Company's obligations in connection therewith) are not
fully assumed by the Company after the Change in Control or the corporation
or entity resulting from the Change in Control, or replaced by fully
equivalent substitute Awards, then all outstanding Awards shall
automatically be accelerated and become fully vested, whereupon all
Performance Unit Awards and Performance Share Unit Awards shall be paid
based upon the extent to which Performance Goals during the Performance
Period have been met up to the date of the Change in Control, but in any
event, not less than the target Award amount as set forth in each
Participant's Award Agreement.
(b) If there is a Change in Control of the Company in which the
outstanding Awards granted by the Company prior to such Change in Control
(and the Company's obligations in connection therewith) are fully assumed
by the Company after the Change in Control or the corporation or other
legal entity resulting from the Change in Control, or replaced by fully
equivalent substitute Awards, then, except as otherwise provided in this
Section 9, no acceleration of vesting of any unmatured installments of
outstanding Awards granted by the Company shall occur.
(c) In addition, notwithstanding any other provision contained in this
Plan, in the event that a Participant's employment is terminated by the
Company, within that period commencing on the date which is ninety (90)
days prior to and continuing during the 24-month period following the
effective date of a Change in Control (i.e., with such period ending on the
same day of the 24th month following the effective date of the Change in
Control), for any reason (other than such Participant's (i) voluntary
resignation (which does not constitute a Resign for Good Reason
resignation), (ii) termination as a result of death, Disability or
Retirement, or (iii) termination by the Company for Cause), or such
Participant Resigns for Good Reason within such period, then to the extent
the Awards granted to such Participant have not already become fully vested
pursuant to this Section 9, all outstanding Awards granted by the Company
to such Participant shall, without further action by any person,
immediately become fully vested in full, effective as of the date of such
termination of employment, whereupon all Performance Unit Awards and
Performance Share Unit Awards shall be paid out based upon the higher of
the targeted Performance Goals or the extent to which the Performance Goals
during the Performance Period have been met up to the date of the Change in
Control or the date of termination (whichever date results in the then-
higher value of the particular Award).
9.2 Definition. For purposes of the Plan, a "Change in Control" shall mean
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 Stock
would be converted into or exchanged for 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 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
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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 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.
SECTION 10. AMENDMENT, MODIFICATION,
AND TERMINATION OF PLAN
10.1 Amendment, Modification, and Termination of Plan. The Board at any time
may terminate, and from time to time may amend or modify the Plan, provided,
however, that unless required by law, no action contemplated or permitted by
this Section 11.1 shall reduce the amount of any Award theretofore granted
under the Plan without the consent of the affected Participant.
SECTION 11. TAX WITHHOLDING
11.1 Tax Withholding. The Company 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 Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.
SECTION 12. INDEMNIFICATION
12.1 Indemnification. Each Person who is or shall have been a member of the
Committee or of the Board, or who acts on behalf of or at the direction of the
Committee or Board with respect to this Plan, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a
party or in which he may be involved by reason of any action taken or failure
to act under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in satisfaction
of any judgment in any such action, suit, or proceeding against him, provided
he shall give the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on his own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
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SECTION 13. MISCELLANEOUS
13.1 Requirements of Law. The granting of Awards shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
13.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.
13.3 Substitute Awards. Awards may be granted under the Plan from time to
time in substitution for similar instruments held by employees or directors of
a corporation, partnership, or limited liability company who become or are
about to become Employees of the Company or any Subsidiary as a result of a
merger or consolidation of the employing corporation with the Company, the
acquisition by the Company of equity of the employing entity, or any other
similar transaction pursuant to which the Company becomes the successor
employer. The terms and conditions of the substitute Awards so granted may vary
from the terms and conditions set forth in this Plan to such extent as the
Committee or Board at the time of grant may deem appropriate to conform, in
whole or in part, to the provisions of the incentives in substitution for which
they are granted.
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REVOCABLE PROXY
IMCO RECYCLING INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Don V. Ingram and Paul V. Dufour, or
either of them, each 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 Wednesday, May 10, 2000, at the Central Tower at
Williams Square, Twenty-Sixth Floor, LaCima Club, 5215 North O'Connor Blvd.,
Irving, Texas, at 9:00 A.M., Central Daylight Savings Time, and at any and all
adjournments and postponements thereof (the "Annual Meeting"), including
(without limiting the generality of the foregoing) to vote and act as follows on
the reverse side.
This Proxy will be voted at the Annual Meeting or any adjournments or
postponements thereof as specified. IF NO SPECIFICATIONS ARE MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED ON THE
REVERSE SIDE AND FOR PROPOSALS 2 AND 3 AND WILL GRANT DISCRETIONARY AUTHORITY
PURSUANT TO ITEM 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
<PAGE>
Please mark
your vote as [X]
indicated in
this example
Election of Directors.
The election of the following nominees to the Board of Directors as Class II
Directors, unless otherwise indicated below.
FOR AGAINST (a) John J. Fleming (b) Jeb Hensarling (c) Don Navarro
[_] [_] 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.
Proposal to approve the Corporation's Performance Share Unit Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to ratify the appointment of Ernst & Young LLP as the independent
public accountants of the Corporation for 2000.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. 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____________________________, 2000
____
|
| _______________________________________
Signature(s)
_______________________________________
Signature(s)
IMPORTANT: Please date the Proxy and sign exactly
as your name appears in the Proxy. If shares are
held by joint tenants, EACH joint owner should
sign. Executors, administrators, trustees,
guardians, and attorneys should indicate the
capacity in which they sign. Attorneys should
submit powers of attorney. 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 relating to the Corporation's 2000 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.
