<PAGE> 1
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
INTERMET CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
INTERMET CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(Logo)
INTERMET CORPORATION
SUITE 1600
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1994
The annual meeting of shareholders of Intermet Corporation (the "Company")
will be held on Thursday, April 28, 1994, at 10:00 a.m. at Cobb Galleria Centre,
Two Galleria Parkway, Atlanta, Georgia, for the purpose of considering and
voting upon the following matters, all of which are described in the attached
Proxy Statement:
1. The election of eleven directors to constitute the Board of
Directors and to serve until the next Annual Meeting and until their
successors are elected and qualified.
2. Such other matters as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on March 17, 1994,
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
A Proxy Statement and a Proxy solicited by the Board of Directors are
enclosed. Please sign, date and return the Proxy promptly in the enclosed
business reply envelope. If you attend the meeting, you may, if you wish,
withdraw your Proxy and vote in person.
Also enclosed is the Company's 1993 Annual Report to Shareholders, which
contains financial data and other information concerning the Company.
By Order of the Board of Directors,
John D. Ernst
Vice President - Finance,
Chief Financial Officer,
Secretary and Treasurer
March 30, 1994
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 3
INTERMET CORPORATION
SUITE 1600
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Intermet Corporation (the "Company") for
use at the annual meeting of shareholders of the Company (the "Annual Meeting")
to be held on April 28, 1994, and any adjournment thereof, for the purposes set
forth in the accompanying notice of the meeting.
The expense of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by the Company. Copies of
solicitation materials may be furnished to banks, brokerage houses and other
custodians, nominees and fiduciaries for forwarding to beneficial owners of
shares of the Company's Common Stock, and normal handling charges may be paid
for the forwarding service. In addition to solicitations by mail, directors and
regular employees of the Company may solicit Proxies in person, or by telephone
or telegraph. It is anticipated that this Proxy Statement and the accompanying
Proxy will first be mailed to shareholders on or about March 30, 1994.
Any Proxy given pursuant to this solicitation may be revoked without
compliance with any other formalities by any shareholder who attends the meeting
and gives oral notice of his or her election to vote in person. In addition, any
Proxy given pursuant to this solicitation may be revoked prior to the meeting by
delivering to the Secretary of the Company a notice of revocation or a duly
executed Proxy for the same shares bearing a later date.
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1993, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, TO ANY RECORD
OR BENEFICIAL OWNER OF ITS COMMON STOCK AS OF MARCH 17, 1994 WHO REQUESTS A
COPY. ANY REQUEST FOR THE ANNUAL REPORT ON FORM 10-K SHOULD BE IN WRITING
ADDRESSED TO:
JOHN D. ERNST, SECRETARY
INTERMET CORPORATION
SUITE 1600, 2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
IF THE PERSON REQUESTING THE REPORT WAS NOT A SHAREHOLDER OF RECORD ON MARCH 17,
1994, THE REQUEST MUST INCLUDE A REPRESENTATION THAT THE PERSON WAS A BENEFICIAL
OWNER OF COMMON STOCK ON THAT DATE. COPIES OF ANY EXHIBITS TO THE ANNUAL REPORT
ON FORM 10-K WILL ALSO BE FURNISHED TO SHAREHOLDERS ON REQUEST AND UPON THE
PAYMENT OF THE COMPANY'S EXPENSE IN FURNISHING THE EXHIBITS.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The record of shareholders entitled to vote at the Annual Meeting was taken
as of the close of business on March 17, 1994. On that date the Company had
outstanding and entitled to vote 24,580,719 shares of Common Stock, par value
$0.10 per share, with each share entitled to one vote. All references in this
Proxy Statement to percentages of shares beneficially owned are based on
24,754,719 shares of Common Stock deemed outstanding (which includes presently
exercisable options to purchase 182,500 shares of Common Stock held by directors
and executive officers).
The following table sets forth certain information concerning the only
"persons" (as that term is defined by the Securities and Exchange Commission
("SEC")) who are known to the Company to be the beneficial owners of more than
five percent (5%) of the Company's Common Stock, which is its only class of
voting securities, as of January 1, 1994, and the ownership of the Company's
Common Stock as of that date by the
<PAGE> 4
directors, each of the Named Officers (as defined under "Executive Compensation"
below), and by all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OWNER OWNED BENEFICIALLY PERCENT OF CLASS
- --------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
George W. Mathews, Jr. 4,665,953(1) 18.8%
Suite 1600
2859 Paces Ferry Road
Atlanta, Georgia 30339
The Prudential Insurance Company of America 2,365,522(2) 9.6%
Prudential Plaza
Newark, NJ 07101
Trust Company Bank (as Trustee for Intermet Corporation 1,574,127 6.4%
Employee Stock Ownership Trust)
25 Park Place, N.E.
Atlanta, GA 30303
David L. Babson & Company, Inc. 1,471,100(3) 5.9%
One Memorial Drive
Cambridge, MA 02142
J.P. Morgan & Co. Incorporated 1,236,200(4) 5.0%
60 Wall Street
New York, NY 10260
Vernon R. Alden 19,500(5) *
J. Frank Broyles 75,310(5) *
John P. Crecine 3,000 *
Anton Dorfmueller, Jr. 12,000(6) *
John B. Ellis 15,000(5) *
Wilfred E. Gross, Jr. 477,500(5) 1.9%
A. Wayne Hardy 124,578(5) *
Harold C. McKenzie, Jr. 48,500(5)(7) *
J. Mason Reynolds 16,500(8) *
Curtis W. Tarr 88,292(9) *
E.A. Bodnar 42,377(10) *
John D. Ernst 108,488(11) *
Daryl R. Marsh 3,500 *
All Executive Officers 5,807,563(12) 23.5%
and Directors as a Group
(17 persons)
(1) Does not include 723,300 shares of Common Stock owned of record by Mr.
Mathews' wife, as trustee for their adult children, as to which Mr. Mathews
disclaims beneficial ownership. Includes presently exercisable options for
35,500 shares of Common Stock.
(2) Includes 2,364,400 shares with respect to which The Prudential Insurance
Company of America ("Prudential") has sole voting and dispositive power and
1,122 shares with respect to which Prudential has shared voting and
dispositive power, as reported on Schedule 13G, dated as of December 31,
1993, filed with the SEC.
(3) Includes 1,054,600 shares with respect to which David L. Babson & Company,
Inc. ("Babson") has sole voting power and 416,500 shares with respect to
which Babson has shared voting power. Babson has sole dispositive power
with respect to 1,471,100 shares, as reported on Schedule 13G, dated as of
December 31, 1993, filed with the SEC.
(4) Includes 730,000 shares with respect to which J.P. Morgan & Co.,
Incorporated ("Morgan") has sole voting power and 1,236,200 shares with
respect to which Morgan has sole dispositive power, as reported on Schedule
13G, dated as of December 31, 1993, filed with the SEC.
(5) Includes presently exercisable options for 10,000 shares of Common Stock.
(6) Includes presently exercisable options for 4,000 shares of Common Stock.
(7) Includes 38,500 shares of common stock held as co-trustee under the will of
Mr. McKenzie's father.
(8) Includes presently exercisable options for 6,000 shares of Common Stock.
(9) Includes presently exercisable options for 3,500 shares of Common Stock.
(10) Includes presently exercisable options for 29,500 shares of Common Stock.
(11) Includes presently exercisable options for 22,500 shares of Common Stock.
(12) Includes presently exercisable options for 182,500 shares of Common Stock.
- ---------------
* Less than one percent
</TABLE>
2
<PAGE> 5
NOMINATION AND ELECTION OF DIRECTORS
The By-Laws of the Company provide that the Board of Directors shall
consist of eleven directors. The term of office for each director continues
until the next annual meeting and until his successor is elected and qualified.
Each Proxy executed and returned by a shareholder will be voted as
specified thereon by the shareholder. If no specification is made, the Proxy
will be voted for the election of the nominees named below to constitute the
entire Board of Directors. In the event that any nominee withdraws or for any
reason is not able to serve as a director, the Proxy will be voted for such
other person as may be designated by the Board of Directors as a substitute
nominee, but in no event will the Proxy be voted for more than eleven nominees.
Management of the Company has no reason to believe that any nominee will not
serve if elected. All of the nominees are currently directors of the Company.
Directors are elected by a plurality of the votes cast by the holders of
the shares entitled to vote in an election at a meeting at which a quorum is
present. A quorum is present when the holders of a majority of the shares
outstanding on the record date are present at a meeting in person or by proxy.
An abstention and a broker non-vote would be included in determining whether a
quorum is present at a meeting, but would not otherwise affect the outcome of a
vote.
3
<PAGE> 6
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information, as of January 1, 1994, has been furnished by the
respective nominees for director. Except as otherwise indicated, each nominee
has been or was engaged in his present or last principal employment, in the same
or a similar position, for more than five years.
<TABLE>
<CAPTION>
<S> <C>
NAME
AGE INFORMATION ABOUT NOMINEE
----------------------- ----------------------------------------------------------
(Picture Chairman of the Board, Chief Executive Officer, and
of Mathews) Director of the Company and its predecessor since 1971 and
------------------- President of the Company since 1991.
-------------------
-------------------
-------------------
-------------------
-------------------
George W. Mathews, Jr.
(66)
(Picture Director of the Company since 1984, Vice Chairman of the
of Tarr) Board since 1992, President of Intermet International,
------------------- Inc. since 1991, and a consultant to the Company from late
------------------- 1989 through 1990. Mr. Tarr was a professor and Dean of
------------------- the Johnson School of Management at Cornell University
------------------- from 1984 through 1989 and remained a professor there
------------------- until 1990. He was a Vice President of Deere & Co., a farm
------------------- equipment manufacturer, from 1973 to 1983. Mr. Tarr was
------------------- President of Lawrence University, Appleton, Wisconsin,
------------------- from 1963 to 1969 and an Undersecretary of State from 1972
Curtis W. Tarr to 1973. He is also a director of George Banta Co., Inc.,
(69) a commercial printer, and of State Farm Insurance
Companies.
(Picture Director of the Company since 1986. A private consultant,
of Alden) Mr. Alden was Chairman of the Board and Executive
------------------- Committee of The Boston Company, Inc., a financial
------------------- services company, from 1969 to 1978 and President of Ohio
------------------- University from 1962 to 1969. He is also a director of
------------------- Augat, Inc., Colgate-Palmolive Company, Digital Equipment
------------------- Corporation, McGraw-Hill, Inc. and Sonesta International
------------------- Hotels Corporation.
-------------------
-------------------
Vernon R. Alden
(70)
(Picture Director of the Company since 1986 and its predecessor
of from 1977 to 1984. Mr. Broyles has been Athletic Director
Broyles) of the University of Arkansas since 1958.
-------------------
-------------------
-------------------
-------------------
-------------------
-------------------
J. Frank Broyles
(69)
4
<PAGE> 7
(Picture Director of the Company since 1993. Mr. Crecine has
of Crecine) been President of the Georgia Institute of
------------------- Technology since 1987. Previously he served as a
------------------- professor at the University of Michigan and
------------------- founding director of the Institute of Public
------------------- Policy Studies from 1965 to 1975. He became Dean
------------------- of the College of Humanities and Social Sciences at
------------------- Carnegie Mellon University in 1976, a position
------------------- he held until 1983 when he became the University's
John P. Crecine Senior Vice President for Academic Affairs. He held
(54) that position until his Georgia Tech appointment.
Mr. Crecine is a director of HBO and Co.
(Picture Director of the Company since 1991. A consultant to
of Andersen Consulting since 1988, Mr. Dorfmueller
Dorfmueller) retired that same year as a Group Vice President
------------------- of Ashland Chemical Company, a position he held
------------------- since 1980.
-------------------
-------------------
-------------------
-------------------
Anton Dorfmueller, Jr.
(67)
(Picture Director of the Company since 1989. A private
of Ellis) investor, Mr. Ellis retired in 1985 as Senior Vice
------------------- President - Finance and Treasurer of Genuine Parts
------------------- Co., an automotive parts distributor, where he had
------------------- been employed in various capacities since 1974.
------------------- Mr. Ellis is a director of Flowers Industries,
------------------- Inc., Genuine Parts Co., Hughes Supply, Inc.,
------------------- Oxford Industries, Inc., and Interstate/Johnson
------------------- Lane, Inc.
John B. Ellis
(69)
(Picture Director of the Company and its predecessor since
of Gross) 1971. Mr. Gross is Chairman of the Board of
------------------- Directors and Manager of W.T. Harvey Lumber
------------------- Company in Columbus, Georgia.
-------------------
-------------------
-------------------
-------------------
-------------------
Wilfred E. Gross, Jr.
(65)
(Picture Director of the Company and its predecessor since
of Hardy) 1978. Mr. Hardy is a private investor and
------------------- consultant. He was Chairman and Chief Executive
------------------- Officer of Eastern Inter-Trans Services, Inc. from
------------------- 1986 to 1992. From 1975 to 1986 Mr. Hardy was a
------------------- Vice President of the Company and its predecessor.
-------------------
-------------------
-------------------
A. Wayne Hardy
(57)
5
<PAGE> 8
(Picture of Director of the Company and its predecessor since
McKenzie) 1971. Mr. McKenzie retired at the end of 1986 from
------------------- Southern Electric International, Inc., a subsidiary
------------------- of The Southern Company, with which he was
------------------- affiliated for thirty years. He had served as
------------------- Executive Vice President of Georgia Power
------------------- Company and as President and CEO of Southern Electric
------------------- International, Inc. He was Chairman and CEO of Machine
------------------- Technologies, Inc. of Martinsville, Virginia, from
Harold C. McKenzie, Jr. 1986 until 1989 when that Company filed a petition
(62) under Chapter 11 of the federal bankruptcy laws and
substantially all of its assets were sold. From 1989
to 1991, Mr. McKenzie was a commercial real estate
broker with Haas & Dodd Realty Co. in Atlanta,
Georgia. Mr. McKenzie is presently serving as
Facilities Management Coordinator for The Atlanta
Project of The Carter Presidential Center.
(Picture Director of the Company since 1990. From 1986 until
of Reynolds) his retirement in 1989, Mr. Reynolds was Executive
------------------- Vice President of Allied Signal Corp. and President
------------------- of its Automotive Sector, which manufactures
------------------- automobile parts.
-------------------
-------------------
-------------------
-------------------
J. Mason Reynolds
(66)
</TABLE>
There are no family relationships among the executive officers and
directors of the Company.
Directors who are not officers of the Company received a retainer of $3,000
per quarter during 1993 and $1,500 for each Board of Directors meeting attended,
$500 for each committee meeting attended on the date of a regular Board meeting,
and $1,000 for each other committee meeting attended. Directors are reimbursed
for expenses incurred in attending Board of Directors and committee meetings.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation paid
by the Company and its subsidiaries to the Company's Chief Executive Officer and
to the other four most highly compensated executive officers of the Company
(collectively, the "Named Officers") for services rendered to the Company during
1993, 1992 and 1991.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
--------------
ANNUAL COMPENSATION OPTIONS, SARS
NAME AND PRINCIPAL ------------------------------------- (NO. OF ALL OTHER
POSITION YEAR SALARY BONUS(1) OTHER(2) SHARES) COMPENSATION(3)
- -------------------------- ---- -------- -------- -------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
George W. Mathews, Jr..... 1993 $289,008 -- $1,313 16,000 17,801
Chairman of the Board, 1992 331,508 -- 1,312 16,000 17,188
Chief Executive Officer 1991 325,008 30,000 -- 16,000 --
and President
Curtis W. Tarr............ 1993 185,016 -- 1,161 14,000 14,463
Vice Chairman of the 1992 185,016 -- 1,161 14,000 16,432
Board of the Company and 1991 185,016 30,000 -- 14,000 --
President, Intermet
International, Inc.
E. A. Bodnar.............. 1993 185,016 -- -- 14,000 14,463
President, Intermet 1992 185,016 -- -- 14,000 16,432
Foundries, Inc. 1991 175,008 30,000 -- 14,000 --
John D. Ernst............. 1993 140,016 10,000 1,254 14,000 12,013
Vice 1992 140,016 -- 1,254 14,000 13,282
President - Finance, 1991 130,008 30,000 -- 14,000 --
Chief Financial Officer,
Secretary and Treasurer
Daryl R. Marsh(4)......... 1993 65,628 68,000 -- -- 375
Vice President 1992 -- -- -- -- --
1991 -- -- -- -- --
- ---------------
(1) The Company has reported bonuses in this Proxy Statement in the year earned,
not in the year paid.
(2) In accordance with the transitional provisions to the revised rules on
executive officer and director compensation disclosure adopted by the SEC,
amounts of "Other Annual Compensation" are excluded for 1991. No shares of
restricted stock are owned by any Named Officer.
(3) For 1993, "All Other Compensation" includes the following: (i) premium
payments of $1,512 paid by the Company on behalf of Messrs. Mathews, Tarr,
Bodnar and Ernst and $375 paid by the Company on behalf of Mr. Marsh under
the Company's life insurance program, under which the Company provides all
employees with life insurance payable to the employee's and his dependents'
designated beneficiaries; (ii) Company Employee Stock Ownership Plan
contributions in the amounts of $7,075, $5,550, $5,550, $4,500 and $0 for
Messrs. Mathews, Tarr, Bodnar, Ernst and Marsh, respectively; and (iii)
Company and Company matching Profit Sharing Plan contributions in the
aggregate amounts of $9,214, $7,401, $7,401, $6,001 and $0 for Messrs.
Mathews, Tarr, Bodnar, Ernst and Marsh, respectively.
(4) Mr. Marsh was hired in August 1993 and received a signing bonus as reported
under "Bonus."
Messrs. Bodnar, Ernst and Tarr and Mr. Peter C. Bouxsein, Controller of the
Company, each inadvertently filed a late Form 5 with respect to the allocation
to the account of each of Common Stock pursuant to the Company's Employee Stock
Ownership Plan for the year ended December 31, 1992, which was reported to each
in March 1993.
</TABLE>
7
<PAGE> 10
OPTION GRANTS. Shown below is further information on grants of stock
options pursuant to the Key Individual Stock Option Plan ("Key Individual Plan")
during 1993 to the Named Officers, which are reflected in the Summary
Compensation Table. No stock appreciation rights were granted during 1993, and
none of the Company's compensation plans currently provides for the grant of
stock appreciation rights.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NO. OF VALUE AT ASSUMED ANNUAL
SECURITIES % OF TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS/SARS APPRECIATION FOR OPTION
OPTION/ GRANTED TO TERM(2)
SARS EMPLOYEES IN EXERCISE EXPIRATION -------------------------
NAME GRANTED(1) 1993 PRICE DATE 0% 5% 10%
- -------------------------------- ---------- ------------ -------- ---------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
George W. Mathews, Jr........... 11,000 3.85% $11.83 2/11/98 $0 $20,792 $60,312
5,000 1.75% 10.75 2/11/03 0 33,803 85,661
Curtis W. Tarr.................. 14,000 4.9% 10.75 2/11/03 0 94,649 239,852
E. A. Bodnar.................... 14,000 4.9% 10.75 2/11/03 0 94,649 239,852
John D. Ernst................... 14,000 4.9% 10.75 2/11/03 0 94,649 239,852
Daryl R. Marsh.................. -- -- -- -- -- -- --
- ---------------
(1) 25% are exercisable on the first anniversary of the grant date, 50% are
exercisable on the second anniversary of the grant date, 75% are
exercisable on the third anniversary of the grant date and 100% are
exercisable on the fourth anniversary of the grant date.
(2) "Potential Realizable Value" is disclosed in response to Securities and
Exchange Commission regulations that require such disclosure for
illustration only. The values disclosed are not intended to be, and should
not be interpreted as, representations or projections of the future value
of the Company's Common Stock or of the stock price. To lend perspective to
the illustrative "Potential Realizable Value," if the Company's Common
Stock price increases 5% per year for 10 years from January 1, 1993
(disregarding any dividend payments and assuming for purposes of the
calculation a constant number of shares outstanding), the total increase in
value of all shares outstanding at January 1, 1993 would be $154,321,055,
and if the stock price increases 10% per year over such period, the
increase in value would be $391,077,523.
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES. Shown below is information
with respect to unexercised options to purchase the Company's Common Stock
granted under the Directors Stock Option Plan and Key Individual Plan to the
Named Officers and held by them at December 31, 1993. In addition, information
is shown below with respect to the exercise during fiscal year 1993 by the Named
Officers of options granted under the Directors Stock Option Plan and the Key
Individual Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NO. OF SHARES SUBJECT TO VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS/ SARS THE-MONEY OPTIONS/ SARS AT
SHARES HELD AT DECEMBER 31, 1993 DECEMBER 31, 1993
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Mathews, Jr........ -- -- 35,500 40,500 $46,878 $31,653
Curtis W. Tarr............... 11,000 $38,920 3,500 31,500 0 24,920
E. A. Bodnar................. -- -- 29,500 34,500 46,670 30,920
John D. Ernst................ -- -- 22,500 33,500 39,170 28,920
Daryl R. Marsh............... -- -- -- -- -- --
- ---------------
(1) Based on the closing sale price on The Nasdaq National Market on the date of
exercise less the exercise price.
</TABLE>
8
<PAGE> 11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board is responsible for setting the
policies on compensation offered to the executive officers of the Company,
including the Named Officers. These policies cover salary and benefits,
including insurance, bonuses, stock options, retirement programs, and other
awards. The following report was prepared by the current members of the
Compensation Committee. All current members of the Committee are independent
outside directors.
EXECUTIVE COMPENSATION POLICIES
The Company seeks to attract and retain key executives who will strive for
the Company's success, both immediately and in the long term. We realize that in
a small industry that is based upon technology not widely understood, we will
not have many opportunities to recruit leaders outside our Company. We also are
aware that we must make the opportunity at the Company attractive so that our
executives will not accept employment elsewhere.
The Company relates executive compensation to what must be done to improve
Company performance and to attract and retain talented people. The Company seeks
to do the former with stock options and bonuses, in an effort to enhance
shareholder value, and the latter with salary. When the Company does well, our
executives should benefit. The Company believes that key executives can affect
dramatically the performance of the Company and that an executive should be
compensated on what he or she achieves.
The Compensation Committee believes that stock options provide an incentive
to executives to encourage the Company to excel in a way that will improve the
price of the stock and thus shareholder value. Because the Key Individual Stock
Option Plan calls for vesting over a period of years, the Committee members also
believe that stock options encourage retention of the skilled executives and
managers the Company needs to perform well.
The Compensation Committee has judged that a significant portion of the
compensation paid to senior executives should be based upon incentive awards.
Thus executive compensation in the future will tend to vary considerably
depending upon the performance of the Company. Given a reasonable growth in the
price of the Company's Common Stock and thus the value of stock options, and the
success of the Company to meet bonus targets, managers and executives of the
Company will be able to increase their earnings from ten to sixty percent above
their base salaries.
FORMS OF COMPENSATION
To carry out these policies, the Company offers the following:
Salary
Salaries for executive jobs, including that of the CEO, are determined by
an evaluation of that job, considering the wisdom, skills, and experience
required for it, and the market pricing of these. To calculate market pricing,
the Company reviewed independent third-party studies prepared by various
organizations which encompassed several hundred companies, including many in
similar lines of business and of comparable size to the Company. We try to look
at job content instead of titles, because we realize that the latter may not
apply well to the jobs in our industry and company. The Committee seeks to set
salaries above the average levels in the surveys.
Job evaluation and market pricing provide a salary range for each position.
Annually the performance appraisal of the executive or manager provides a
rating. This and the person's position within the salary range determine what
the salary merit increase, if any, will be. Each year, the Compensation
Committee reviews this information for each position. In 1993, the Compensation
Committee withheld salary merit increases.
9
<PAGE> 12
The results of the surveys of Marketplace Salary Levels for the Named
Officers were as follows:
<TABLE>
<CAPTION>
MINIMUM AVERAGE AGGRESSIVE
-------- -------- ----------
<S> <C> <C> <C>
Chairman & CEO................................ $310,000 $413,500 $ 516,900
Vice Chairman................................. 131,900 175,800 219,800
President, IFI................................ 131,900 175,800 219,800
VP, Machining................................. 125,300 167,100 208,900
VP, Finance/CFO............................... 124,100 165,400 206,800
</TABLE>
In 1992, because he was not satisfied with the Company's operating
performance, Chairman and Chief Executive Officer George W. Mathews, Jr. asked
that his compensation be reduced by 15%. This was done, and his salary for
November and December of 1992 continued through the year 1993. Committee members
believe that Mr. Mathews' salary, considerably below average for comparable
positions in the survey, should be increased at least to the average level when
the performance of the Company improves.
Benefits
The Company provides benefits at no charge to each salaried employee,
including medical, dental, short and long term disability, accidental death or
dismemberment, life and dependent life insurance. The Company also has a medical
reimbursement plan available to the Named Officers and other key employees that
compensates them for certain medical expenses not covered by the regular group
insurance programs.
Bonuses
Before 1993, the Compensation Committee decided year-to-year whether a
bonus pool should be established, given the performance of the Company. The pool
was then distributed to executives and managers based upon a subjective
evaluation of the contribution by the individual.
For 1993, the Compensation Committee established a formal bonus program for
its key executives and managers. That plan authorized the payment of bonuses if
corporate and division operating profit goals were attained. Because the Company
did not reach these goals, no executive was awarded a bonus under the Bonus Plan
for 1993. However, the Company paid bonuses outside the Bonus Plan to two Named
Officers in 1993 -- $10,000 to John D. Ernst for his successful public placement
of $30 million of the Company's Common Stock in 1992 and for the restructuring
of the Company's lending facilities in 1992 and 1993, and $68,000 to the
newly-recruited Vice President, Machining, Daryl R. Marsh as a signing bonus.
For 1994, the Compensation Committee has established a formal bonus
program, again based upon the achievement of gross profit or operating profit
goals at the manufacturing units or divisions and a pretax income goal at the
corporate level. New in the 1994 plan will be the inclusion of key managers
reporting to the operating unit managers. We hope that the broader participation
will help to improve the operations of the Company. Although the Committee
members discussed the possibility of a part of the bonus being based upon
factors other than financial performance, such as scrap levels or yield or up
time in the foundries, we decided that a simpler plan would be a better
motivator for our executives and managers. A target bonus amount for each
participant has been set, and annual bonuses can range from 0% to 150% of each
participant's target bonus amount depending upon performance.
Stock Options
The Compensation Committee believes that stock options are an effective
inducement to directors and to key executives to meet long-term performance
goals. Accordingly, the Company has asked, and gained approval from the
shareholders, to create two plans, one for directors and one for key
individuals. Committee members believe that options should be granted each year,
at the first regular board meeting, and that the awards should be comparable
from one year to the next. Key executives to whom options are granted are those
considered by the Committee to be individuals best able to improve the
performance of the Company.
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<PAGE> 13
The Director's Stock Option Plan authorizes the Company to issue options
for not more than 100,000 shares of the Company's Common Stock to directors.
Options granted under the Plan must have an exercise price of no less than the
fair market value of the Common Stock on the date of grant. No options may be
granted after April 26, 2000, and the term of each option may not exceed ten
years from the date of grant. During 1993, ten non-employee directors each
received options for 2,000 shares of the Company's Common Stock at an exercise
price of $10.75 per share.
The Company's Key Individual Stock Option Plan encourages senior executives
to acquire a proprietary interest in the Company and to continue their
employment or association with the Company. The Plan provides for the grant of
both incentive and non-qualified stock options. Options for a total of 1,440,000
shares of the Company's Common Stock may be granted. During 1993, the
Compensation Committee granted options for 286,000 shares of the Company's
Common Stock to 33 key executives and managers at exercise prices ranging from
$10.75 to $11.83 per share. The Committee relates the number of options granted
to executive salary levels.
Retirement Plans
The Company has a two-part retirement program: the 401(k) Savings and
Investment Plan and the Employee Stock Ownership Plan Trust, which are available
to eligible employees, including the Named Officers.
The 401 (k) Savings and Investment Plan permits eligible employees to
contribute up to 10% of their compensation, subject to certain limitations, and
invest it in one or more of three investment funds offered through the Plan. The
Company matches an individual's contribution at a rate of fifty cents for each
dollar saved, up to 4% of pay. At the end of the year, the Company makes an
added contribution to the individual's account of an amount equal to 2% of the
individual's annual compensation.
The Employee Stock Ownership Plan Trust purchases Common Stock of the
Company for eligible employees. The Company contributes an amount equal to 3% of
the individual's wages or salary.
Other Awards
The Company provides automobiles for certain key employees including sales
people. When these are used for personal rather than business needs, the Company
determines the cost of that use and includes that amount on the W-2 form sent to
the Internal Revenue Service.
The Company has a salary continuation plan in the event of the death of
certain key executives. Salary is paid for one year following the death of the
Chairman or President of the Company, for nine months for other executive
officers of the Company, and for six months for certain executive officers of
one of the subsidiaries of the Company.
The Company provides certain key employees with memberships in country and
social clubs if doing so is helpful to the attraction and maintenance of
business relationships.
The Company has no plan for payments to its executives in the event that an
outside group takes control of the Company.
INTERMET CORPORATION COMPENSATION COMMITTEE
Vernon R. Alden, Chairman
J. Frank Broyles
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Mathews, Chairman, Chief Executive Officer and President of the
Company, and Mr. Tarr, Vice Chairman of the Board of the Company and President
of Intermet International, Inc., were members of the Compensation Committee
through April 1993, and each attended one of two Compensation Committee meetings
in 1993.
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<PAGE> 14
Mr. Mathews acquired 49% of the voting stock of Systrand Manufacturing
Corporation ("Systrand"), a machining company located in Detroit, Michigan,
during 1992. The Company, through its Board of Directors, declined to purchase
such shares and approved Mr. Mathews' purchase. Mr. Mathews and the other
shareholder of Systrand granted to the Company an option, exercisable during
1996-1998, to purchase all of the shares of Systrand, subject to certain
conditions, for cash or Company Common Stock. In 1993, Mr. Mathews acquired 50%
of a machining company, also located in the Detroit area, owned by an affiliate
of the other shareholder of Systrand (the "Related Company"), and Mr. Mathews
and such affiliate shareholder have granted an option to the Company to purchase
all of the shares of the Related Company. During 1993, the Company purchased
$631,000 of machining services from Systrand and the Related Company, which were
merged in September 1993.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Russell 2000 Index and the cumulative total
return for a group of companies consisting of Arvin Industries, Inc., Chrysler
Corporation, Dana Corporation, Ford Motor Company, General Motors Corporation,
Masco Industries, Inc., Simpson Industries, Inc. and Standard Products Company,
for the period of five years commencing on December 31, 1988 and ended December
31, 1993.
1989 1990 1991 1992 1993
------ ------ ------ ------ ------
INMT 96 59 90 124 117
Russell 2000 116 94 137 162 193
Peer Group 97 76 74 111 182
* $100 INVESTED ON 12/31/88 IN STOCK OR INDEX.
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
CERTAIN TRANSACTIONS
In September 1986, the Company sold all of the capital stock and
intercompany debt of the Company's wholly-owned subsidiary, Intermet
Transportation, Inc., to Eastern Inter-Trans Services, Inc. ("EITS") at book
value. At the time of sale, A. Wayne Hardy, a director of the Company, was
Chairman, Chief Executive Officer and a principal shareholder of EITS. The
aggregate sale price was paid partially in cash and the balance by delivery of a
$240,000 unsecured promissory note (the "Note"). The Note, as amended, bore
12
<PAGE> 15
interest at a rate two percentage points above the prime rate at a designated
bank and was due and payable in thirty-one installments of $4,000 each,
commencing in October 1988, with a final installment of $116,000 due in
September 1991. The parties amended the Note in May 1992 to reflect that the
then outstanding principal amount of $132,000 and accrued and unpaid interest of
$14,529 plus interest at 5% per annum from May 8, 1992 would be repaid on June
30, 1993. Payments of $20,100 were made with respect to the Note during 1993.
The Company and Mr. Hardy are currently in negotiations to restructure the
Note's payment terms.
The Prudential Insurance Company of America ("Prudential") is the record
owner of 2,365,522 shares (9.6%) of the outstanding Company Common Stock.
Prudential had certain piggyback registration rights with respect to 3,629,400
shares of Common Stock which were granted in 1980 when the Company issued to
Prudential warrants to purchase shares of Common Stock as part of a subordinated
debt financing. The Company has extended Prudential's piggyback registration
rights through December 31, 1995 (the "Extended Registration Rights") with
respect to 2,364,400 shares of Common Stock. These rights had been scheduled to
expire on September 30, 1992. All expenses, disbursements and fees associated
with the Extended Registration Rights will be allocated between the Company and
Prudential pro rata, based on the number of shares sold by each. On December 11,
1992, the Company sold $25,000,000 principal amount of Senior Notes due December
11, 2002 to Prudential.
On March 31, 1992, a subsidiary of the Company acquired all of the common
and preferred stock of PBM Industries, Inc. ("PBM") and all of the outstanding
preferred stock of Batten Design and Engineering Services, Inc. (now known as
InterMotive Technologies, Inc.), an 80% owned subsidiary of PBM. In connection
with the acquisition, the Company guaranteed approximately $9,000,000 of PBM's
debt owed to Prudential, which debt was refinanced by the Company as part of the
Trust Company Bank line of credit described below. Prudential and two of its
affiliates were also minority shareholders of PBM, owning in the aggregate 22%
of PBM's common stock and 16% of PBM's preferred stock. As a result of the
acquisition of PBM by the Company, Prudential and its affiliates received
approximately $128,000 in cash and $479,138 in notes for their equity interests.
As of December 31, 1993, a subsidiary of the Company owed approximately $493,338
in principal and interest to Prudential on such notes.
On August 31, 1992 the Company entered into a Credit Agreement with certain
domestic and foreign lenders, relating to a $75,000,000 and DM 8,000,000
revolving line of credit. Trust Company Bank is one of the lenders under the
Credit Agreement and also acts as agent for the other lenders. Trust Company
Bank is the trustee of the Company's Employee Stock Ownership Plan Trust and in
such capacity owns of record 1,574,127 (6.4%) of the Company's outstanding
Common Stock.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during 1993. All of the directors
attended at least 75% of all meetings of the Board and of each committee of the
Board on which they served except Mr. Crecine, who attended 50% of the Board
meetings held during his tenure as director, Mr. Alden, who attended 50% of the
meetings of the Compensation Committee, and Mr. Dorfmueller, who attended 50% of
the meetings of the Environmental Committee.
The Compensation Committee of the Board of Directors sets the compensation
for the Company's executive officers and key personnel. The Compensation
Committee is currently comprised of Messrs. Alden and Broyles. Messrs. Mathews
and Tarr were members of the Compensation Committee until they resigned from the
Committee in April 1993. Mr. John Aderhold was a member of the Compensation
Committee prior to his resignation from the Board of Directors in February 1994.
The Compensation Committee held two meetings during 1993.
The Audit Committee reviews financial controls and the methods of
preparation of the Company's financial statements, evaluates audit performance
and reports on such matters to the Board. The Audit Committee, which is
currently comprised of Messrs. Dorfmueller, Gross, Hardy and McKenzie, held
three meetings during 1993.
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<PAGE> 16
The Nominating Committee, which is currently comprised of Messrs. Broyles,
Crecine, Mathews and Tarr, was established during the third quarter of 1992. It
has not yet been determined whether the Nominating Committee will consider
nominees recommended by shareholders or what the procedures for such
nominations, if considered, will be. The Nominating Committee did not hold any
meetings during 1993.
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
Ernst & Young were the principal independent auditors for the Company for
1993. Representatives of Ernst & Young are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and to respond to appropriate questions. The Company anticipates that Ernst &
Young will be the accountants for the current fiscal year.
SHAREHOLDER PROPOSALS
In accordance with the provisions of Rule 14a-8(a)(-3)(i) of the Securities
and Exchange Commission, proposals of shareholders intended to be presented at
the Company's 1995 Annual Meeting must be received by November 26, 1994 in order
to be eligible for inclusion in the proxy statement and form of proxy for that
meeting.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated above
that are to be brought before the meeting. If any other matter is presented for
consideration and voting, the persons named as proxies in the enclosed Proxy
intend to vote the Proxy in accordance with their judgment of what is in the
best interest of the Company.
Dated: March 30, 1994
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<PAGE> 17
COMMON STOCK
OF INTERMET CORPORATION
DIRECTIONS FOR VOTING COMMON STOCK ALLOCATED TO A PARTICIPANT'S ACCOUNT PURSUANT
TO THE INTERMET CORPORATION EMPLOYEE STOCK OWNERSHIP TRUST
The undersigned participant in the Employee Stock Ownership Plan ("ESOP")
hereby directs Trust Company Bank as Trustee of the Intermet Corporation
Employee Stock Ownership Trust to vote those shares of Common Stock of Intermet
Corporation allocated to the undersigned's account in connection with the Annual
Meeting of Shareholders of INTERMET CORPORATION to be held on April 28, 1994,
and any adjournment thereof:
1. / / FOR: all nominees for director listed below (except as marked to the
contrary):
George W. Mathews, Jr.; Curtis W. Tarr; Vernon R. Alden; J. Frank Broyles; John
P. Crecine; Anton Dorfmueller, Jr.; John B. Ellis; Wilfred E. Gross, Jr.; A.
Wayne Hardy; Harold C. McKenzie, Jr.; J. Mason Reynolds.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW)
---------------------------------------------------------------------
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
2. In accordance with their best judgment with respect to any other matters
that may properly come before the meeting.
(over)
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS OF THE
PERSONS NAMED ABOVE AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN
THE SPACE PROVIDED, THE ALLOCATED SHARES OF THE UNDERSIGNED WILL BE SO VOTED.
Please sign exactly as name
appears on these Directions.
------------------------------
------------------------------
Note: When signing as an
attorney, trustee,
administrator or guardian,
please give your title as
such. In the case of joint
tenants, each joint owner must
sign.
Date:
-------------------------
<PAGE> 18
COMMON STOCK
OF INTERMET CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 1994 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints George W. Mathews, Jr. and John D. Ernst, or
either of them with power of substitution to each, the proxies of the
undersigned to vote the Common Stock of the undersigned at the Annual Meeting of
Shareholders of INTERMET CORPORATION to be held on April 28, 1994, and any
adjournment thereof.
1. / / FOR all nominees for director listed below (except as marked to the
contrary):
George W. Mathews, Jr.; Curtis W. Tarr; Vernon R. Alden; J. Frank Broyles; John
P. Crecine; Anton Dorfmueller, Jr.; John B. Ellis; Wilfred E. Gross, Jr.; A.
Wayne Hardy; Harold C. McKenzie, Jr.; J. Mason Reynolds.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
2. In accordance with their best judgment with respect to any other matters that
may properly come before the meeting.
(over)
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS OF THE
PERSONS NAMED IN THE PROXY AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE
INDICATED IN THE SPACE PROVIDED, THIS PROXY WILL BE SO VOTED.
Please sign this Proxy exactly
as name appears on the Proxy.
-----------------------------
-----------------------------
Note: When signing as an
attorney, trustee,
administrator or guardian,
please give your title as
such. In the case of joint
tenants, each joint owner must
sign.
Date:
------------------------
