<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
INTERMET CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-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 O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-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:
Notes:
<PAGE>
[ART APPEARS HERE]
INTERMET CORPORATION
SUITE 1600
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1995
The annual meeting of shareholders of Intermet Corporation (the "Company")
will be held on Thursday, April 27, 1995, at 9:00 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 twelve directors to constitute the Board of Directors
and to serve until the next Annual Meeting and until their successors
are elected and qualified.
2. The approval of the Intermet Corporation Executive Stock Option and
Incentive Award Plan.
3. The appointment of Ernst & Young LLP as the independent auditors of
the Company for 1995.
4. 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 16, 1995, 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 1994 Annual Report to Shareholders, which
contains financial data and other information concerning the Company.
By Order of the Board of Directors,
James W. Rydel
Vice President - Administration
and Secretary
March 27, 1995
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>
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 27, 1995, 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 27, 1995.
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, 1994, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, TO ANY
RECORD OR BENEFICIAL OWNER OF ITS COMMON STOCK AS OF MARCH 16, 1995 WHO
REQUESTS A COPY. ANY REQUEST FOR THE ANNUAL REPORT ON FORM 10-K SHOULD BE IN
WRITING ADDRESSED TO:
JAMES W. RYDEL, 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
16, 1995, 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 16, 1995. On that date the Company had
outstanding and entitled to vote 24,662,225 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
25,056,719 shares of Common Stock deemed outstanding (which includes options
exercisable at January 1, 1995 to purchase 412,000 shares of Common Stock held
by current directors and executive officers).
<PAGE>
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, 1995, and the ownership of the Company's
Common Stock as of that date by the directors and each of the Named Officers
(as defined under "Executive Compensation" below), and by all current 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. 4,614,521(1) 18.4%
212 Townsend Place
Atlanta, Georgia 30327
The Prudential Insurance Company of 2,364,846(2) 9.4%
America
Prudential Plaza
Newark, NJ 07101
David L. Babson & Company, Inc. 2,180,500(3) 8.7%
One Memorial Drive
Cambridge, MA 02142
J.P. Morgan & Co. Incorporated 1,553,600(4) 6.2%
60 Wall Street
New York, NY 10260
Trust Company Bank (as Trustee for 1,502,247 6.0%
Intermet Corporation
Employee Stock Ownership Trust)
25 Park Place, N.E.
Atlanta, GA 30303
John Doddridge 150,000(5) *
Vernon R. Alden 21,500(6) *
J. Frank Broyles 77,310(6) *
John P. Crecine 6,217(7) *
Anton Dorfmueller, Jr. 16,000(8) *
John B. Ellis 22,000(6)(15) *
Wilfred E. Gross, Jr. 479,500(6) 1.9%
A. Wayne Hardy 126,578(6) *
Harold C. McKenzie, Jr. 47,300(6)(9) *
J. Mason Reynolds 18,500(10) *
Curtis W. Tarr 136,573(11) *
John D. Ernst 126,918(12) *
Daryl R. Marsh 13,600 *
James W. Rydel 29,818(13) *
All Executive Officers 6,034,442(14) 24.1%
and Directors as a Group
(19 persons)
</TABLE>
- ----------
*Less than one percent
(1) Does not include 723,300 shares of Common Stock owned of record by Mr.
Mathews' wife, as trustee for their adult children, and 493,450 shares of
Common Stock held of record by Mr. Mathews' adult children, as to which
shares Mr. Mathews disclaims beneficial ownership. Includes exercisable
options at January 1, 1995 for 52,500 shares of Common Stock.
2
<PAGE>
(2) Includes 2,364,400 shares with respect to which The Prudential Insurance
Company of America ("Prudential") has sole voting and dispositive power
and 466 shares with respect to which Prudential has shared voting and
dispositive power, as reported on Schedule 13G, dated as of December 31,
1994, filed with the SEC.
(3) Includes 1,235,700 shares with respect to which David L. Babson & Company,
Inc. ("Babson") has sole voting power and 944,800 shares with respect to
which Babson has shared voting power. Babson has sole dispositive power
with respect to 2,180,500 shares, as reported on Schedule 13G, dated as of
December 31, 1994, filed with the SEC.
(4) Includes 891,100 shares with respect to which J.P. Morgan & Co.,
Incorporated ("Morgan") has sole voting power and 1,553,600 shares with
respect to which Morgan has sole dispositive power, as reported on
Schedule 13G, dated as of December 31, 1994, filed with the SEC.
(5) Includes presently exercisable options for 100,000 shares of Common Stock.
(6) Includes presently exercisable options for 12,000 shares of Common Stock.
(7) Includes presently exercisable options for 2,000 shares of Common Stock.
(8) Includes presently exercisable options for 6,000 shares of Common Stock.
(9) Includes 35,300 shares of Common Stock held as co-trustee under the will
of Mr. McKenzie's father.
(10) Includes presently exercisable options for 8,000 shares of Common Stock.
(11) Includes exercisable options at January 1, 1995 for 51,000 shares of
Common Stock.
(12) Includes presently exercisable options for 35,000 shares of Common Stock.
(13) Includes presently exercisable options for 19,000 shares of Common Stock.
(14) Includes exercisable options at January 1, 1995 for 412,000 shares of
Common Stock.
(15) Does not include 13,500 shares of Common Stock owned by a corporation of
which Mr. Ellis is a director and minority shareholder.
NOMINATION AND ELECTION OF DIRECTORS
(PROPOSAL 1)
The By-Laws of the Company provide that the Board of Directors shall consist
of twelve 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 twelve 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>
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information, as of January 1, 1995, 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.
NAME (AGE) INFORMATION ABOUT NOMINEE
John Doddridge (54)........ Chairman of the Board and Chief Executive Officer
since October 27, 1994. Mr. Doddridge was Vice
Chairman and Chief Executive Officer of Magna
International, Inc., a supplier of motor vehicle
parts, from November 1992 until November 1994,
where he also served as a director. From mid-1989
to 1992 he served as President of North American
Operations of Dana Corporation, a motor vehicle
parts manufacturer, and prior to mid-1989 he
served as President of Hayes-Dana Inc., a
subsidiary of Dana Corporation. Mr. Doddridge
serves as a director of Detroit Diesel
Corporation.
Vernon R. Alden (71)....... Director of the Company since 1986. A director
and trustee of several organizations, 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 and
Sonesta International Hotels Corporation.
J. Frank Broyles (70)...... Director of the Company since 1986 and its
predecessor from 1977 to 1984. Mr. Broyles has
been Athletic Director of the University of
Arkansas since 1958.
John P. Crecine (55)....... Director of the Company since 1993. Mr. Crecine
has served as Chairman and Chief Executive
Officer of Integrated Digital Systems, Inc. since
mid-1994. He was President of the Georgia
Institute of Technology from 1987 to mid-1994.
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 Senior Vice
President for Academic Affairs. He held that
position until his Georgia Tech appointment. Mr.
Crecine is a director of HBO and Co.
Anton Dorfmueller, Jr.
(68)....................... Director of the Company since 1991. Mr.
Dorfmueller served as North American agent to Red
Rock International, a robotics manufacturer,
during 1994. From 1988 to 1994 he served as a
consultant to Andersen Consulting. Mr.
Dorfmueller retired in 1988 as a Group Vice
President of Ashland Chemical Company.
John B. Ellis (70)......... Director of the Company since 1989. A private
investor, Mr. Ellis retired in 1986 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.
4
<PAGE>
NAME (AGE) INFORMATION ABOUT NOMINEE
Wilfred E. Gross, Jr.
(66)....................... Director of the Company and its predecessor since
1971. Mr. Gross is Chief Executive Officer of
W.T. Harvey Lumber Company in Columbus, Georgia.
A. Wayne Hardy (58)........ Director of the Company and its predecessor since
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.
George W. Mathews, Jr.
(67)....................... Director of the Company and its predecessor since
1971, Mr. Mathews is the founder of the Company
and was Chairman of the Board and Chief Executive
Officer of the Company from 1971 until October
1994. He retired from the Company in December
1994. Mr. Mathews serves as a director of
Metrotrans Corporation.
Harold C. McKenzie, Jr.
(63)....................... Director of the Company and its predecessor since
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 1986 until 1989 and a commercial
real estate broker with Haas & Dodd Realty Co. in
Atlanta, Georgia from 1989 to 1991. Mr. McKenzie
is presently serving as Facilities Coordinator
for The Carter Center of Emory University.
J. Mason Reynolds (68)..... Director of the Company since 1990. From 1986
until his retirement in 1989, Mr. Reynolds was
Executive Vice President of Allied Signal Corp.
and President of its Automotive Sector, which
manufactures automobile parts.
Curtis W. Tarr (70)........ Director of the Company since 1984. Mr. Tarr
retired as Vice Chairman of the Board as of
December 31, 1994, a position he held since 1992.
At that time he also retired as President of
Intermet International, Inc. a position he held
since 1991. He served as 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 to 1973. He is
also a director of George Banta Co., Inc., a
commercial printer, and of State Farm Insurance
Companies.
There are no family relationships among the executive officers and directors
of the Company.
Directors who are not officers of the Company receive a retainer of $3,000
per quarter, $1,500 for each Board of Directors meeting attended, and $1,000
for each committee meeting attended. Directors are reimbursed for expenses
incurred in attending Board of Directors and committee meetings.
Mr. Crecine was late in reporting on Form 4 sales of Common Stock in May and
June 1994.
5
<PAGE>
PROPOSAL TO ADOPT THE INTERMET CORPORATION
EXECUTIVE STOCK OPTION AND INCENTIVE AWARD PLAN
(PROPOSAL 2)
GENERAL
The following description of the material features of the Intermet
Corporation Executive Stock Option and Incentive Award Plan (the "Plan") is a
summary and is qualified in its entirety by reference to the Plan, as proposed
to be adopted by the shareholders, a copy of which will be provided to any
shareholder upon written request to James W. Rydel, Secretary of the Company,
at the Company's address.
The Board of Directors approved the adoption of the Plan on February 9, 1995,
subject to shareholder approval. The Plan, if approved by the shareholders,
will be effective as of the date of shareholder approval, and will terminate on
the day immediately prior to the tenth anniversary thereof, unless earlier
terminated by the Board of Directors. The number of shares of the Common Stock
authorized for issuance under the Plan will be 1,500,000 shares (approximately
6% of the presently outstanding shares of Common Stock).
The Plan provides for the grant of incentive stock options ("ISOs"),
nonqualified stock options ("NQOs"), restricted stock and common stock without
restriction to key employees of the Company and its subsidiaries. Grants of
stock options may no longer be made under the Company's Key Individual Stock
Option Plan as it has expired.
As of the date hereof, no benefits or amounts that will be received by or
allocated to John Doddridge, Chairman and Chief Executive Officer, any of the
Named Officers (as defined below under "Executive Compensation"), the current
executive officers as a group or nonexecutive officers as a group is known.
Non-employee directors are not eligible to receive awards under the Plan.
PURPOSE
The purpose of the Plan is to promote the long-term success of the Company
and its subsidiaries by providing financial incentives to key employees who are
in positions to make significant contributions toward such success. The Plan is
designed to attract individuals of outstanding ability to employment with the
Company and its subsidiaries, to encourage key employees to acquire a
proprietary interest in the Company and to continue their employment with the
Company or its subsidiaries and to render superior performance during such
employment.
ADMINISTRATION
The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"), which has authority to determine the individuals
to whom awards will be granted, the form and amount of the awards, the dates of
the grant and other terms of each award and also has authority to amend or
waive the terms of outstanding awards, within the parameters of the Plan. The
Committee will be composed at all times of not less than three members of the
Board of Directors who satisfy the "disinterested administration" requirement
of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act").
DESCRIPTION OF AWARDS UNDER THE PLAN
Options. Key fulltime, salaried employees of the Company or any of its
subsidiaries will be eligible for consideration as participants under the Plan.
The Plan will provide for grants to key employees of both ISOs, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, and NQOs. Holders
of greater than 10% of the outstanding Common Stock are not eligible for ISOs,
and certain executive officers, including the Named Officers, cannot receive
grants of options for more than 100,000 shares in any twelve-month period. The
exercise price of an option granted under the Plan will be determined by the
Committee at the
6
<PAGE>
time of grant. The exercise price of an ISO may not be less than the fair
market value on the date of grant of the shares subject to such option. The
exercise price of an NQO, however, may, at the discretion of the Committee, be
less than the fair market value of the shares subject to such option at the
time of grant, but not less than 85% of the fair market value on the date of
grant of the shares subject to such option (or such lower percentage of fair
market value as may be established by the Internal Revenue Service as the limit
for granting discounted stock options without causing immediate tax
consequences to the employee). Full payment of the option exercise price must
be made by the optionee when an option is exercised. The exercise price may be
paid in cash, by tendering shares of Common Stock, valued at fair market value
on the date of option exercise, or in any combination of cash and shares. The
proceeds received by the Company from exercises of options under the Plan will
be used for general corporate purposes.
The period of exercise of an option will be determined by the Committee at
the time of grant. Unless otherwise provided by the Committee, options will not
be exercisable prior to twelve months from the date of grant, and after such
date will be exercisable in an amount equal to 25% of the option per year, with
full vesting four years after the date of grant. In the event of a change in
control of the Company (as defined in the Plan), all NQOs and ISOs become fully
vested and exercisable. No option may expire any later than the tenth
anniversary of the date of grant unless otherwise provided by the Committee.
Unless otherwise specified by the Committee, no option may be sold, transferred
or assigned except by will or the laws of descent and distribution.
If an optionee dies while actively employed, all of his or her options
immediately vest and remain exercisable until their expiration date or for one
year after his or her death, whichever period is shorter. If the employment of
an optionee is terminated by reason of disability (as defined in the Plan), all
of his or her outstanding options immediately vest as of the date the Committee
determines the disability to have commenced and will remain exercisable at any
time prior to the expiration date or for one year after the date that the
Committee determines the disability commenced, whichever is shorter. If any
optionee retires (as defined in the Plan), all options granted to him or her
immediately vest and remain exercisable at any time prior to the expiration
date or for three years after the effective date of retirement, whichever is
shorter. If employment of an optionee terminates by reason of a disability or
retirement and the optionee dies within the exercise period following such
termination, then the remaining exercise period under outstanding options
equals one year following death or the remaining portion of the exercise period
that was triggered by the employment termination, whichever is longer. If the
employment of an optionee terminates for any other reason, all options held by
him or her which are not vested as of the effective date of the termination
will be forfeited. If the employment is terminated for cause (as defined in the
Plan) or such optionee voluntarily terminates employment, the option rights
under any then vested outstanding options will immediately terminate. If the
optionee's employment is terminated by the Company without cause, any options
vested as of his or her date of termination remain exercisable at any time
prior to the expiration date or for one year after the date of termination,
whichever is shorter.
RESTRICTED STOCK; STOCK AWARDS. The Committee may from time to time grant
Common Stock to employees, with such terms and conditions, and the amount of
payment, if any, to be made by employees for such stock as the Committee
determines. The Committee may grant such stock without restrictions of any type
(a "Stock Award") or with vesting restrictions ("Restricted Stock"). All
Restricted Stock that is not vested will be forfeited unless the employee
remains employed on a full-time basis until the Restricted Stock is vested and
all other conditions prescribed by the Committee are met. The Committee may
waive or amend any restrictions with respect to Restricted Stock at any time
after the date of grant. Restricted Stock Stock Awards will be registered in
the name of the employee but retained by the Company or its agent until lapse
of the restrictions. The employee will have the right to vote the Restricted
Stock and to receive dividends with respect to it, except that the right to
receive cash dividends on Restricted Stock will be paid in cash or Restricted
Stock, as determined by the Committee. Restricted Stock will not be
transferrable or assignable until fully vested. In the event that a change in
control of the Company occurs (as defined in the Plan), all vesting
requirements with respect to a grant of Restricted Stock lapse, and such stock
will be delivered to the employee.
7
<PAGE>
GENERAL. The receipt of Stock Awards, Restricted Stock and Common Stock upon
exercise of options granted under the Plan will be contingent upon the
compliance with federal and state securities laws and The Nasdaq Stock Market
or exchange listing requirements. In the event of changes in the outstanding
shares of the Common Stock by reason of stock dividends, recapitalizations,
reclassifications, split-ups or consolidation or other changes in the Common
Stock, the aggregate number and class of shares available under the Plan and
the maximum number of shares as to which options may be granted shall be
appropriately adjusted by the Committee.
The Plan may, from time to time, be terminated, suspended or amended by the
Board of Directors. However, without the approval of the shareholders, no such
amendment may: (a) materially modify eligibility requirements under the Plan;
(b) increase the total number of shares which may be granted under the Plan,
except as required under any adjustment described above; (c) extend the term of
the Plan; (d) amend the Plan in any other manner which the Board of Directors,
in its discretion, determines should become effective only if approved by the
shareholders even though such shareholder approval is not expressly required by
the Plan or by law; or (e) become effective without shareholder approval if
required for transactions under the Plan to continue to comply with Rule 16b-3
under the Exchange Act.
TAX CONSEQUENCES
There are no federal tax consequences to the optionee or the Company on the
granting of options under the Plan. The federal tax consequences upon exercise
of the option will vary depending on whether the option is an ISO or an NQO.
Under current tax law, a holder of an ISO under the Plan will not realize
taxable income upon the grant or exercise thereof. However, depending upon the
holder's income tax situation, the exercise of the ISO may have alternative
minimum tax implications. The amount of gain which the employee must recognize
is equal to the amount by which the value of the Common Stock on the date of
the sale exceeds the option price. If the optionee disposes of the stock after
the required holding period, that is, no earlier than a date which is two years
after the date of grant of the option and one year after the date of exercise,
the optionee will recognize capital gain or loss at the time of the
disposition. The Company will not be entitled to a tax deduction if the
optionee satisfies these holding period requirements. If disposition occurs
prior to the expiration of the holding period, the gain is ordinary income, and
the Company is entitled to a tax deduction equal to the amount of income
recognized by the optionee.
An optionee will not realize income when an NQO is granted to him or her.
Upon exercise of such option, however, the optionee must recognize ordinary
income to the extent that the fair market value of the Common Stock on the date
the option is exercised exceeds the option price. Any such gain is taxed in the
same manner as ordinary income in the year the option is exercised. Any gain
recognized upon the disposition of the shares of stock obtained by the exercise
of an NQO will be taxed at capital gains rates if the employee holds the shares
of stock for at least one year after the exercise of the NQO. The Company will
not experience any tax consequences upon the grant of an NQO, but will be
entitled to take an income tax deduction equal to the amount which the option
holder recognizes as income (if any) when the NQO is exercised.
The granting of Restricted Stock will not be a taxable event to the employee
or result in a tax deduction for the Company at the time of grant. Upon the
lapse or termination of the restrictions, the employee will recognize ordinary
income equal to the fair market value of the portion of the Restricted Stock no
longer subject to restrictions, less the amount of any payment by the employee
for such Restricted Stock. The Company will be entitled to an income tax
deduction in the same amount at the time the employee is required to recognize
the income.
Since Stock Awards are not subject to restrictions under the Plan, at the
time of the award, the employee will recognize ordinary income equal to the
fair market value of the Stock Award on the date of the award,
8
<PAGE>
less the amount of any payment by the employee for such Stock Award. The
Company will be entitled to an income tax deduction in the same amount at the
time the employee is required to recognize the income.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
In order for the Common Stock to continue to be eligible for listing on The
Nasdaq Stock Market, shareholder approval is required for plans pursuant to
which options and awards of Common Stock may be granted to officers and
directors. In addition, shareholder approval of the Plan may afford executive
officers of the Company greater flexibility under federal securities laws in
connection with the purchase and sale of Common Stock of the Company. For these
reasons, shareholder approval is sought for the Plan.
To be adopted, the Plan proposal must be approved by the holders of a
majority of the Common Stock having voting power and who are present in person
or by proxy 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. Abstentions and broker non-votes
would be included in determining whether a quorum is present at a meeting. A
broker non-vote would have no effect on the outcome of the vote on the proposal
to adopt the Plan, but an abstention would have the effect of a vote against
the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL, AND
THE ENCLOSED PROXY WILL BE VOTED IN THAT MANNER UNLESS THE SHAREHOLDER
EXECUTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY OR ABSTAINS FROM VOTING
ON THIS PROPOSAL.
9
<PAGE>
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
former Chief Executive Officer and to the four most highly compensated
executive officers of the Company (collectively, the "Named Officers") for
services rendered to the Company during 1994, 1993 and 1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-----------------------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
---------------------- RESTRICTED OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (2) OTHER STOCK AWARD (NO. OF SHARES) COMPENSATION
- --------------------------- ---- ------- --------- ------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John Doddridge..........
Chairman of the Board 1994 $29,168 $127,500(3) $96,591 $165,000(4) 100,000 $ --
and Chief Executive 1993 -- -- -- -- -- --
Officer (1) 1992 -- -- -- -- -- --
George W. Mathews, Jr. . 1994 264,924 -- -- -- 20,000 36,109(5)
Former Chairman of the 1993 289,008 -- 1,313 -- 16,000 17,814
Board, Chief Executive 1992 331,508 -- 1,312 -- 16,000 17,188
Officer and President
Curtis W. Tarr.......... 1994 185,016 100,000 1,661 -- 16,000 12,025(6)
Former Vice Chairman of 1993 185,016 -- 1,661 -- 14,000 14,476
the Board of the 1992 185,016 -- 1,661 -- 14,000 16,432
Company and President,
Intermet International,
Inc.
John D. Ernst...........
Vice President -
Finance, Chief 1994 180,000 -- 1,254 -- 16,000 14,664(7)
Financial Officer, and 1993 140,016 10,000 1,254 -- 14,000 14,664
Treasurer 1992 140,016 -- 1,254 -- 14,000 15,921
Daryl R. Marsh.......... 1994 177,840 60,000 -- -- 16,000 12,025(6)
Vice President - 1993 65,628 68,000 -- -- -- 381
Machining Services 1992 -- -- -- -- -- --
James W. Rydel..........
Vice President - 1994 170,016 -- 1,318 -- 14,000 12,025(6)
Administration and 1993 110,016 15,000 1,146 -- 12,000 10,276
Secretary 1992 110,016 -- 1,146 -- 12,000 10,621
</TABLE>
- ----------
(1) Mr. Doddridge was hired October 27, 1994, and the Company commenced paying
a salary and bonus to him on December 1, 1994.
(2) The Company has reported bonuses in this Proxy Statement in the year
earned, not in the year paid.
(3) Includes 20,000 shares of Company Common Stock with a value of $115,000 on
the date of award.
(4) Mr. Doddridge owns 30,000 shares of restricted stock with the value shown,
based on the closing per share sale price of Company Common Stock on the
date of award. Mr. Doddridge will receive any dividends paid with respect
to the restricted stock. The restricted stock vests at the rate of 10,000
shares on each of the first, second and third anniversaries of the date of
award. No other Named Officer owns restricted stock. The value of Mr.
Doddridge's restricted stock at December 30, 1994 was $202,500.
(5) Includes (i) premiums of $1,525 paid by the Company under the Company's
life insurance program pursuant to which the Company provides all employees
with life insurance payable to the employee's and his dependents'
designated beneficiaries (the "Life Insurance Program"); (ii) Company
matching Profit Sharing Plan contributions in the aggregate amount of
$3,000; and (iii) retirement compensation in the amount of $31,584.
(6) Includes (i) premiums under the Life Insurance Program of $1,525; (ii) a
Company ESOP contribution of $4,500; and (iii) Company and Company matching
Profit Sharing Plan contributions in the aggregate amount of $6,000.
10
<PAGE>
(7) Includes (i) premiums under the Life Insurance Program of $1,525 and for
split dollar life insurance of $2,639; (ii) a Company ESOP contribution of
$4,500; and (iii) Company and Company matching Profit Sharing Plan
contributions in the aggregate amount of $6,000.
OPTION GRANTS. Shown below is further information on grants of stock options
during 1994 to the Named Officers, which are reflected in the Summary
Compensation Table. No stock appreciation rights were granted during 1994, 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 VALUE
NO. OF AT ASSUMED ANNUAL RATES
SECURITIES % OF TOTAL OF STOCK PRICE
UNDERLYING OPTIONS/SARS APPRECIATION
OPTION/ GRANTED TO FOR OPTION TERM (3)
SARS EMPLOYEES EXERCISE EXPIRATION ---------------------------
NAME GRANTED IN 1994 PRICE DATE 0% 5% 10%
---- ---------- ------------ -------- ---------- ---- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
John Doddridge.......... 100,000 24.5% $ 5.75 12-01-04 -- $361,618 $916,378
George W. Mathews, Jr... 14,000(1) 3.4% 10.11 03-01-95(2) -- 0 835
6,000(1) 1.5% 9.19 03-01-95(2) -- 2,931 5,878
Curtis W. Tarr.......... 16,000(1) 3.9% 9.19 03-31-95(2) -- 8,433 16,968
John D. Ernst........... 16,000(1) 3.9% 9.19 02-10-04 -- 92,473 234,338
Daryl R. Marsh.......... 16,000(1) 3.9% 9.19 02-10-04 -- 92,473 234,338
James W. Rydel.......... 14,000(1) 3.4% 9.19 02-10-04 -- 80,914 205,045
</TABLE>
- ----------
(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) Options expire three months after retirement date.
(3) "Potential Realizable Value" is disclosed in response to SEC 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, 1994 (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, 1994
would be approximately $143,000,000, and if the stock price increases 10%
per year over such period, the increase in value would be approximately
$362,000,000.
FISCAL YEAR-END VALUES. Shown below is information with respect to
unexercised options to purchase the Company's Common Stock held by the Named
Officers at December 31, 1994. No options were exercised during 1994 by a Named
Officer.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NO. OF SHARES SUBJECT TO VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
HELD AT DECEMBER 31, 1994 AT DECEMBER 31, 1994
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John Doddridge............. 100,000 -- $100,000 $ --
George W. Mathews, Jr...... 52,000 44,000 8,873 2,958
Curtis W. Tarr............. 51,000 -- 7,420 --
John D. Ernst.............. 35,000 37,000 11,130 3,710
Daryl R. Marsh............. -- 16,000 -- --
James W. Rydel............. 19,000 31,000 6,360 2,120
</TABLE>
11
<PAGE>
Employment Agreements and Termination of Employment Arrangements.
Mr. Doddridge. The Company entered into an employment agreement with Mr.
Doddridge as of December 1, 1994. The agreement provides for a term ending on
December 31, 1997, but it automatically extends on a daily basis such that the
remaining term is always two years. Either the Company or Mr. Doddridge may
terminate this automatic extension, in which event the agreement will terminate
two years from such date. The agreement provides for a minimum annual base
salary of $350,000 and an annual bonus based on the Company's income, with a
minimum bonus of $150,000 annually, except that the bonus will be prorated for
the first year of the term. The agreement also provides for the grant on
December 1, 1994 of options to purchase 100,000 shares of Common Stock at an
exercise price of $5.75 per share, the award of 20,000 shares of Common Stock
and the award of 30,000 shares of restricted Common Stock, subject to vesting
in one-third increments over a three year period. In the event of a change in
control of the Company (as defined in the agreement), the restricted shares
immediately vest.
The Company or Mr. Doddridge may terminate the agreement at any time during
the term. If Mr. Doddridge is terminated for cause or if he resigns for other
than good reason (as defined in the agreement), no further payments are due to
Mr. Doddridge. If Mr. Doddridge's employment is terminated due to his death or
disability, the agreement provides that the Company will pay to him (or his
designated beneficiary) a prorata bonus for the year during which Mr.
Doddridge's employment is terminated. In addition, the Company will pay to Mr.
Doddridge (or his beneficiary) his annual base salary and minimum annual bonus
for two years. The agreement further provides that if Mr. Doddridge's
employment is terminated by the Company without cause or by Mr. Doddridge for
good reason, the Company will provide Mr. Doddridge with all salary, bonus and
benefits to which he would be entitled under the agreement had his employment
not been terminated.
Mr. Marsh. The Registrant entered into an employment agreement with Mr.
Marsh, Vice President -- Machining Services for a term ending on July 15,
1996. Pursuant to the agreement, the Company agreed to pay Mr. Marsh a base
salary of $14,583.33 per month, subject to adjustment by agreement of the
parties, a signing bonus of $68,000 and a $60,000 bonus for 1994. The Company
agreed to provide to Mr. Marsh insurance and other benefits of the same type as
provided to other executives.
Either the Company or Mr. Marsh has the right to terminate the agreement, but
if the Company terminates Mr. Marsh's employment without cause, it agreed to
pay Mr. Marsh his base salary in effect at the time of termination for the
remainder of the term of the agreement.
Mr. Mathews. In connection with Mr. Mathews' retirement as Chairman and Chief
Executive Officer on December 1, 1994, the Company agreed to pay Mr. Mathews
the sum of $350,000 per year for three years. If Mr. Mathews dies during such
three year period, the Company agreed to continue payments of his salary to his
spouse until December 1, 1997. For three years after Mr. Mathews' retirement,
the Company also agreed to provide Mr. Mathews and his spouse with medical and
dental insurance, to provide Mr. Mathews with an automobile and office space
and to pay the salary and benefits for an assistant for Mr. Mathews.
Mr. Tarr. In connection with Mr. Tarr's retirement as President of Intermet
International, Inc. as of December 31, 1994, the Company agreed to continue his
1994 salary and to provide medical and dental insurance for Mr. Tarr and his
spouse for a period of one year.
12
<PAGE>
INTERMET CORPORATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation for the fiscal year
ending December 31, 1994.
COMMITTEE RESPONSIBILITIES
The Compensation Committee of the Board is comprised of three non-employee
directors. Committee responsibilities, with respect to the compensation of
executive officers, including the Named Officers, of Intermet and its
subsidiaries, include reviews and recommendations relative to the following
compensation elements:
. Base salary levels of the executive officers of Intermet;
. All aspects of Intermet's annual bonus compensation plan;
. Intermet's stock-based compensation;
. All aspects of Intermet's two retirement plans, namely the 401(k) Savings
and Investment Plan and the Employee Stock Ownership Plan Trust;
. All employment agreements and amendments thereof; and
. The process and substance of all other aspects of compensation.
The Committee monitors market practices and trends, and makes revisions as
necessary, to ensure that Intermet's programs are adequate to attract and
retain the best possible executive talent.
OVERALL COMPENSATION PHILOSOPHY
In 1994, the Committee redefined the Company's underlying compensation
philosophy for 1995 and the resulting compensation changes will represent a
significant departure from prior year practices. Historically, Intermet's
compensation involved three primary components: (1) base salaries, considered
to be competitive with the market, (2) bonus awards and (3) annual stock option
grants. Going forward, the Company is focusing its efforts on re-distributing
the mix of compensation across these three components. For 1995, the
Committee's compensation goals for Intermet are as follows: (1) base salaries
held slightly below prevailing market levels, (2) annual incentives based on
pretax earnings, and (3) long-term incentive awards targeted at increasing the
ownership stake of key executives. The three concepts, outlined below, will
facilitate the implementation of the new compensation mix at Intermet:
Management Development. The Company's compensation opportunities will be
structured to attract, retain and motivate those individuals who are proficient
in maximizing shareholder value.
Pay for Performance. In 1995, the Company will base a greater portion of
employee compensation on incentive pay, or pay for performance. The Company
will emphasize variable, at-risk compensation that is dependent upon the
employees' level of success in meeting specified Company goals.
Equity Orientation. To properly align employee and shareholder interests,
equity-based plans will represent a fundamental component of the at-risk
portion of total compensation. Consistent with this philosophy, the Company
will encourage its key executives to hold stock delivered through equity-based
plans. This will promote a continuing focus on building profitability and
shareholder value.
13
<PAGE>
The basic elements of Intermet's executive compensation packages are base
salary, annual incentive compensation and long-term incentive compensation. The
Committee's policies with respect to each of these elements are discussed
below. In addition, while the elements of compensation described below are
considered separately, the Committee takes into account the total compensation
package afforded by Intermet to each individual, including pension benefits,
severance plans, insurance and other benefits. All actions of the Committee
with respect to executive compensation in 1994 were subsequently unanimously
approved by the Board of Directors.
BASE SALARIES
Individual salaries for specified executives are reviewed annually and
recommendations for adjustments are made to the Board by the Chief Executive
Officer based on individual responsibilities, performance over time and the
Compensation Committee's judgment of overall Company financial performance.
With respect to the fiscal year ending December 31, 1994, the Company
maintained base salary levels considered to be competitive with the market. To
establish competitive market levels for its key executives, the Committee
utilized the services of independent third-party studies, published survey
sources and market studies of comparably sized companies competing within the
same markets as Intermet. Based on these findings, the Committee recommended a
merit increase pool of 4.3%.
For 1995, the Company's approach to base compensation will be to hold base
compensation levels slightly below industry peer group averages. This will be
accomplished with lower merit increases going forward. The effect of this
strategy will be to control the fixed portion of compensation costs, while
placing increased emphasis on the "at-risk" component, or annual incentive
compensation, as discussed below.
ANNUAL INCENTIVE COMPENSATION
The bonus program used in 1994 was based on the achievement of gross profit
or operating profit goals at the Manufacturing Unit / Division Level and a
pretax income goal at the Corporate Level. Although other non-financial
performance measures were considered as possible measures for a portion of the
annual bonus program, the Committee members decided that a simpler plan would
be a stronger motivator for the Company's executives and managers. In an effort
to improve Company operations, the bonus program was broadened to include key
managers who directly report to operating unit managers.
Target bonuses in 1994 were set for each Participant based on each
executive's organizational level, position responsibilities and performance
during the fiscal year. Actual bonus levels for key managers and operating unit
managers in 1994 ranged from 0% to 112% of targeted bonus amounts. No bonuses
were paid to key executives under the Plan. However, certain executives did
receive bonuses based upon contractual agreements and $100,000 was paid to
Curtis Tarr in recognition of his extra effort during George Mathews' leave of
absence.
For 1995, the Compensation Committee has implemented a Profit Sharing Plan
for key executives on the Operating Committee. The purpose of this plan is to
provide an incentive compensation system which rewards corporate operating
management proportionately to the profitability of the Corporation.
Participants will receive a percentage of audited annual pretax earnings of the
Company before minority interests and corporate profit sharing adjustments.
LONG-TERM INCENTIVE COMPENSATION
Intermet maintains, for key executives and management of Intermet and its
subsidiaries, certain stock-based compensation plans, which allow the Committee
to award the individuals it selects incentive and non-qualified stock options.
Awards under these stock-based compensation plans directly link potential
participant rewards to increases in stockholder value.
14
<PAGE>
Intermet historically has provided the majority of its stock-based
compensation in the form of stock options. Stock options are granted with an
exercise price equal to the market price of Intermet's Common Stock on the date
of grant and become exercisable over a four year period. This approach is
designed to encourage the creation of stockholder value and the retention of
the executives over the long term, as this element of the compensation package
has value only to the extent that stock price appreciation occurs.
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 1994, nine non-employee directors received
a total of 18,000 stock options (or 2,000 options per Director) for shares of
the Company's Common Stock at an exercise price of $9.19 per share.
In 1984, the Company established a Key Individual Stock Option Plan and
reserved 1,440,000 shares for option grants to key executives. The plan
provided for the grant of both incentive and non-qualified stock options.
During 1994, the Compensation Committee granted 308,000 options under the plan
to 31 key executives and managers with exercise prices ranging from $9.19 to
$10.11 per share. In addition, Mr. Doddridge was granted 100,000 options with
an exercise price of $5.75 as a condition of his employment.
In 1995 it will be the Company's intent to encourage stock ownership among
its key executives. The Company has proposed, and submitted for approval in
this Proxy Statement, the implementation of the Executive Stock Option and
Incentive Award Plan. The Plan would permit the grant of non-qualified stock
options, incentive stock options, as well as restricted stock and stock awards
to key executives and managers of Intermet. The total number of shares
available for grant under the Plan, as proposed, would be 1,500,000 shares. The
purpose of this plan, when combined with the effects of the proposed changes in
base and annual incentive compensation philosophy, is to form the third leg of
the compensation plan so that key executives are rewarded only when the
shareholders are rewarded.
BENEFITS
The Company provides benefits at no charge to each salaried employee,
including medical, dental, short and long-term disability, accidental death and
dismemberment, life insurance 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.
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 salaried employees, including the Named Officers.
The 401(k) Savings and Investment Plan permits eligible salaried employees to
contribute up to 10% of their compensation subject to certain limitations, and
invest it in one or more of five 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 its eligible salaried employees. The Company contributes an amount equal to
3% of the individual's wages or salary.
15
<PAGE>
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 Services.
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, nine months for other executive officers
of the Company, and six months for certain executive officers of one of the
subsidiaries of the Company.
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
J. Frank Broyles
John P. Crecine
16
<PAGE>
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,
MascoTech, Inc. (formerly known as Masco Industries, Inc.), Simpson Industries,
Inc. and Standard Products Company, for the period of five years commencing on
December 31, 1989 and ended December 31, 1994.
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG INTERMET CORPORATION, PEER GROUP AND RUSSELL 2000 INDEX
<CAPTION>
Measurement period Intermet Peer Russell 2000
(Fiscal Year Covered) Corporation Group Index
- --------------------- ----------- ----- -------------
<S> <C> <C> <C>
Measurement PT -
12/31/89 $ 100 $ 100 $ 100
FYE 12/31/90 $ 61 $ 78 $ 80
FYE 12/31/91 $ 94 $ 76 $ 117
FYE 12/31/92 $ 129 $ 114 $ 139
FYE 12/31/93 $ 121 $ 187 $ 166
FYE 12/31/94 $ 88 $ 157 $ 163
</TABLE>
CERTAIN TRANSACTIONS
The Prudential Insurance Company of America ("Prudential") is the record
owner of 2,364,846 shares (9.4%) of the outstanding Company Common Stock, with
respect to which Prudential has certain piggyback registration rights. These
registration rights expire December 31, 1995. 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"). 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. As a result of the
acquisition of PBM by the Company, Prudential and its affiliates received
approximately $479,138 in notes in partial payment for their equity interests.
As of December 31, 1994, a subsidiary of the Company owed approximately
$314,137 in principal and interest to Prudential on such notes.
17
<PAGE>
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 1,502,247 (6.0%) of the Company's outstanding
Common Stock.
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 by delivery of a $240,000 unsecured, interest bearing promissory note
(the "Note"), which was to have been repaid in 1991. EITS was subsequently
liquidated. The Company attempted to restructure the Note's payment terms to
result in collection of the Note, but during 1994 wrote off the $110,000 in
principal and $30,559 in accrued interest on the Note.
During 1994 the Company purchased $1,443,000 in machining services from a
machining company of which Mr. George W. Mathews, Jr., a director of the
Company, is a creditor and was a shareholder until September 1994. The Company
believes that the services provided were on substantially the same terms as
those prevailing at the time from other unrelated machining companies.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during 1994. 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 that Mr. Gross attended only one of two Audit
Committee meetings held during 1994.
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, Broyles and Crecine. The
Compensation Committee held two meetings during 1994.
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. Dorfmeuller, Gross, and McKenzie, held two meetings during 1994.
The Company currently has no nominating committee or other committee
performing similar functions.
APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 3)
The Board of Directors has appointed Ernst & Young LLP as the Company's
independent auditors for 1995, subject to approval of this appointment by the
shareholders of the Company at the Annual Meeting.
Ernst & Young LLP was the principal independent auditors for the Company for
1994. Representatives of Ernst & Young LLP 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 BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL, AND
THE ENCLOSED PROXY WILL BE SO VOTED IN THAT MANNER UNLESS THE SHAREHOLDER
EXECUTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY OR ABSTAINS FROM VOTING
ON THIS PROPOSAL.
18
<PAGE>
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 1996 Annual Meeting must be received by November 30, 1995 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 27, 1995
19
<PAGE>
- --------------------------------------------------------------------------------
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 (the "Company") allocated to the undersigned's account in
connection with the Annual Meeting of Shareholders of INTERMET CORPORATION to
be held on April 27, 1995, and any adjournment thereof:
1. [_] FOR all nominees for director listed below (except as marked to the
contrary):
John Doddridge; Vernon R. Alden; J. Frank Broyles; John P. Crecine; Anton
Dorfmueller, Jr.; John B. Ellis; Wilfred E. Gross, Jr.; A. Wayne Hardy; George
W. Mathews, Jr.; Harold C. McKenzie, Jr.; J. Mason Reynolds; Curtis W. Tarr.
(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. Approval of the Intermet Corporation Executive Stock Option and Incentive
Award Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Appointment of Ernst & Young LLP as the independent auditors of the
Company for 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In accordance with their best judgment with respect to any other matters
that may properly come before the meeting.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS OF THE
PERSONS NAMED IN THE PROXY, "FOR" APPROVAL OF THE STOCK OPTION AND INCENTIVE
AWARD PLAN AND "FOR" APPROVAL OF THE INDEPENDENT AUDITORS, AND, UNLESS
INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS PROXY
WILL BE SO VOTED. THE TRUSTEE WILL VOTE THOSE SHARES ALLOCATED TO ESOP
PARTICIPANTS FOR WHICH IT DOES NOT RECEIVE TIMELY VOTING INSTRUCTIONS.
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>
- --------------------------------------------------------------------------------
COMMON STOCK
OF INTERMET CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 1995 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints John Doddridge and James W. Rydel, 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 (the "Company") to be held on April 27, 1995, and any
adjournment thereof.
1. [_] FOR all nominees for director listed below (except as marked to the
contrary):
John Doddridge; Vernon R. Alden; J. Frank Broyles; John P. Crecine; Anton
Dorfmueller, Jr.; John B. Ellis; Wilfred E. Gross, Jr.; A. Wayne Hardy; George
W. Mathews, Jr.; Harold C. McKenzie, Jr.; J. Mason Reynolds; Curtis W. Tarr.
(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. Approval of the Intermet Corporation Executive Stock Option and Incentive
Award Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Appointment of Ernst & Young LLP as the independent auditors of the
Company for 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In accordance with their best judgment with respect to any other matters
that may properly come before the meeting.
- --------------------------------------------------------------------------------
<PAGE>
-------------------------------------------------------------------------------
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS OF THE
PERSONS NAMED IN THE PROXY, "FOR" APPROVAL OF THE STOCK OPTION AND INCENTIVE
AWARD PLAN AND "FOR" APPROVAL OF THE INDEPENDENT AUDITORS, 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: __________________________________
- --------------------------------------------------------------------------------
