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 <SUBSECTION> 240.14A-11(c) or
<SUBSECTION> 240.14a-12
OREGON METALLURGICAL 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(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
_________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
_________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_________________________________________________________________
5) Total fee paid:
_________________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previous Paid:
_________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________________________________
3) Filing Party:
_________________________________________________________________
4) Date Filed:
_________________________________________________________________
<PAGE>
OREGON METALLURGICAL CORPORATION
530 Southwest 34th Avenue - P.O. Box 580
Albany, Oregon 97321-0177
[logo]<Registered Trademark>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
The annual meeting of the shareholders of Oregon Metallurgical
Corporation, an Oregon corporation, will be held in the auditorium of the
Company office building at 530 Southwest 34th Avenue in Albany, Oregon, on
the 25th day of April, 1996, at 10 o'clock a.m., Oregon Time, for the
following purposes:
(1) To elect nine directors for the ensuing year;
(2) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only shareholders of record as of the close of business on March 8,
1996, will be entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. Whether or
not you plan to attend, please date, sign and mail the enclosed proxy to
avoid the expense of further solicitation. A majority of the outstanding
shares must be represented at the meeting in order to transact business,
and, whether you own few or many shares, your proxy is important in
fulfilling this requirement.
If you attend the meeting, you may withdraw your proxy and vote in
person.
March 15, 1996 BY ORDER OF THE BOARD OF DIRECTORS
ORVAL N. THOMPSON, Secretary
OREMET<Registered Trademark> is the registered trademark of Oregon
Metallurgical Corporation
1
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
This statement is furnished in connection with the solicitation of
proxies for the annual meeting of shareholders of Oregon Metallurgical
Corporation, (the "Company" or "Oremet") an Oregon corporation, to be held
April 25, 1996. These proxies are solicited by the board of directors. A
proxy may be revoked at any time prior to its exercise. Revocation of a
proxy may be effected by appearing in person at the annual meeting or by a
written revocation delivered to the Secretary of the Company prior to the
convening of the annual meeting. This Proxy Statement and accompanying
form of proxy were first sent or given to shareholders on approximately
March 15, 1996.
The Company has only one class of stock, namely, common stock. The
close of business on March 8, 1996, has been fixed as the record date for
the determination of shareholders entitled to notice of and to vote at the
annual meeting. On the record date, there were outstanding 11,106,938
shares, each entitled to one vote. In the election of directors, the
shareholders have cumulative voting rights. Proxies of shareholders will
be voted by the persons named as proxies, and, in the absence of special
instruction, may be cumulated in the manner authorized by the laws of
Oregon, that is, either by giving one nominee for director as many votes as
the number of directors to be elected (and for whose election the
shareholder has a right to vote), such number being nine (9) for 1996,
multiplied by the number of shares owned by the shareholder, or by
distributing such votes on the same principal among any number of nominees.
It is necessary that a majority of the outstanding common stock be
represented at the meeting in person or by proxy in order to constitute a
quorum for the transaction of business.
ANY SHAREHOLDER MAY OBTAIN WITHOUT CHARGE A COPY (WITHOUT EXHIBITS) OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1995, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES. Requests for the Form 10-K should be
addressed to Dennis P. Kelly, Vice President, Finance and Treasurer, at
P.O. Box 580, Albany, Oregon 97321.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock at February 28, 1996,
(i) by each person known by the Company to own beneficially more than 5% of
the Company's Common Stock; (ii) by each of the Company's directors and
certain executive officers with annual salaries and bonuses in excess of
$100,000; and (iii) by all directors and named executive officers of the
Company as a group.
2
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER OWNED(1) COMMON
STOCK
<S> <C> <S>
Oregon Metallurgical Corporation
Employee Stock Ownership Plan,
530 SW 34th Avenue, Albany, OR 97321 3,745,879 33.7%
David L. Babson & Co., Inc.,
One Memorial Drive,
Cambridge, MA 02142-1300 (5) 575,400 5.2%
Carlos E. Aguirre (2)(6) 17,057 *
Gilbert E. Bezar 2,350 *
Thomas B. Boklund 0 *
Robert P. Booth 14,438 *
Roger V. Carter 5,350 *
Nicholas P. Collins 7,750 *
Howard T. Cusic 4,800 *
David G. Floyd (2)(6) 24,649 *
Dennis P. Kelly (4)(6) 10,193 *
David H. Leonard 5,150 *
James S. Paddock (3) 202,000 1.8%
James R. Pate 2,050 *
Steven H. Reichman (2)(6) 8,892 *
Orval N. Thompson 3,635 *
All directors and executive
officers as a group
(15 persons) (2)(4)(6) 308,564.00 2.8%
<FN>
* Less than 1%
<F1> Except as otherwise noted, each person named in the table has sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned.
<F2> Shares beneficially owned are in Mr. Aguirre's, Mr. Floyd's, and Mr.
Reichman's ESOP accounts.
<F3> Shares shown include 200,000 which are issuable under a warrant
agreement with Mr. Paddock.
<F4> Shares shown include 9,433 beneficially owned, which are in Mr.
Kelly's ESOP account, and 500 shares in which voting and investment
power is shared.
<F5> Shares shown include 180,100 shares in which voting power is shared.
<F6> Shares include 260 shares to be contributed to the Savings Plan for
Messrs. Aguirre, Floyd, Kelly, and Reichman.
</FN>
</TABLE>
3
<PAGE>
The Oremet ESOP provides that the ESOP Trustee (Key Trust Company of
the Northwest) shall vote all Common Stock of the Company held by the ESOP
as directed by the ESOP Administrators in accordance with the directions of
the participants. Each participant has the right with respect to Common
Stock allocated to his or her ESOP account to direct the ESOP Trustee how
to vote in any matter put to a shareholder vote. With respect to any
Common Stock which has not been allocated to a participant's ESOP account
or Common Stock as to which the ESOP Trustee has not received direction
from any participant, the ESOP Trustee is required to vote the stock in
accordance with a secondary vote of participants.
The ESOP provides that, in the event of a tender or an exchange offer,
each participant will have the right to determine whether the shares
allocated to his or her ESOP account should be tendered or exchanged.
Unallocated shares, or nondirected shares, are subject to tender or
exchange in accordance with a secondary vote of participants.
ELECTION OF DIRECTORS
The board of directors of the Company consists of nine members. The
board of directors held five meetings during the last fiscal year. During
the portion of 1995 for which he was a director, each incumbent director
attended at least 75% of the total of (i) the meetings of the board of
directors and (ii) the meetings held by all committees of the board of
directors on which he served.
All nominees named for election are presently members of the board of
directors except Mr. Boklund. The term of office for which each nominee is
a candidate will expire at the annual meeting of shareholders in 1997, and
until a successor is elected. The accompanying proxy, when properly
executed and returned to the Company, will, unless otherwise indicated, be
voted for the nominees. If any nominee should become unavailable for
election (an event which management does not anticipate), the proxy will be
voted for the election of such substitute nominee as may be designated by
the board of directors. The board of directors does not have a nominating
committee. Nominations for directors are made by the board of directors as
a whole. All nominees have indicated they will serve if elected.
Beginning in 1997, directors, other than the President, must be under age
72, and have less than twelve years of cumulative service as a director.
Messrs. Bezar and Cusic will exceed the maximum age and years of service
allowed for election to the Board in 1997.
The Articles of Incorporation of the Company currently provide that,
so long as 25 percent of the Company's outstanding stock is held by the
ESOP and Oremet Savings Plan, management's nominees to the board of
directors must include the President of the Company, three directors that
are unaffiliated with the Company's hourly (union) or salaried (non-union)
employees, two persons selected by hourly employees and two selected by
salaried employees of the Company, and one person to be selected at the
discretion of the board. In the event that less that 25 percent of the
Company's outstanding stock is held by the Oremet ESOP and Oremet Savings
Plan, the nominees by the hourly and the salaried employees are reduced to
one for each group.
4
<PAGE>
DIRECTORS
Information with respect to each person nominated for election as a
director is set forth below.
Carlos E. Aguirre, Ph.D., age 52, the President and Chief Executive
Officer of the Company, has been a director since June, 1993. Mr. Aguirre
served as President of Axel Johnson Metals, Inc. from 1982 to 1993. Prior
to that, Mr. Aguirre was the Vice President of Technology at Ingersoll-
Johnson Steel Corporation from 1979 to 1982.
Gilbert E. Bezar, age 65, has been a director of the Company since
1983. He was Vice President, Administration of Armco Inc.'s Strategic
Metals Group from 1981 to 1985. He also held the similar position with
Owens-Corning Fiberglas Corporation from 1985 until his retirement in 1988.
Thomas B. Boklund, age 56, will replace Mr. Booth as director. He has
been employed by Oregon Steel Mills, Inc., since 1973 and was President and
CEO from 1982 to 1992, and, since 1992, CEO and Chairman of the Board. Mr.
Boklund is also a director of Paragon Trade Brands, Inc., and a Trustee of
the William G. Gilmore Foundation.
Roger V. Carter, age 66, selected by the salaried employees, has been
a director of the Company since 1990. He has been an independent metals
technology consulting engineer since 1986. He was employed by the Boeing
Company from 1954 and served as Chief Metallurgist and Manager of Metals
Technology at the time of his retirement in 1986.
Nicholas P. Collins, age 63, selected by the salaried employees, has
been a director of the Company since 1990. He is the Vice Chairman of ESCO
Corporation, a steel technology company, where he has been employed since
1957.
Howard T. Cusic, age 71, has been a director of the Company since 1980
and is Chairman of the board of directors. He retired as Senior Vice
President of Owens-Corning Fiberglas Corporation in 1989 and was Group Vice
President for Armco from 1981 to 1985. From 1973 to 1985, he was also
President of HITCO, which was a wholly owned subsidiary of Owens-Corning
Fiberglas Corporation from September 1985 to January 1987.
David H. Leonard, age 49, selected by the hourly employees, has been a
director of the Company since 1989. He has been a partner of the Salem,
Oregon, law firm of Churchill, Leonard, Brown, Lodine and Hendrie, since
1976.
James S. Paddock, age 54, became a director in September 1994. Since
September 1994, he has been a Vice President of the Company and President,
Chief Executive Officer and Chief Operating Officer of Titanium Industries,
Inc., an 80% owned subsidiary of the Company. From
5
<PAGE>
1986 to 1994 Mr. Paddock was the President, Chief Executive Officer and
Chief Operating Officer of the predecessor company to Titanium Industries,
Inc.
James R. Pate, age 50, selected by the hourly employees, has been a
director of the Company since 1989. He was Manager, Business Services,
Oregon Department of Corrections from 1990 to 1993, and is currently the
Financial Services Manager, Vocational Rehabilitation Division, Oregon
Department of Human Resources.
EXECUTIVE OFFICERS
Information about the five executive officers of the Company who are
not also members of the board of directors is set forth below.
John P. Byrne, age 44, has been Vice President, Manufacturing and
Engineering, since March 1, 1995. Mr. Byrne was President of Byrne &
Associates in 1994. Mr. Byrne was President and CEO of TiLine, Inc., and
then its successor company, IMI Titanium, Inc., from 1986 to 1994.
David G. Floyd, age 53, has been Vice President, Commercial, since
July, 1991. Mr. Floyd was Managing Director, International Sales for RMI
Titanium Company from 1984 to 1991.
Dennis P. Kelly, age 49, was appointed Vice President, Finance, Chief
Financial Officer and Treasurer of the Company in October 1993. Mr. Kelly
was the Vice President Finance, Chief Financial Officer and Treasurer of
Titanium Metals Corporation from 1985 to 1993.
Steven H. Reichman, age 52, has been Vice President, Technology and
Corporate Development since November, 1993. Mr. Reichman was Director of R
& D at Wyman Gordon Company from 1983 to 1993.
Orval N. Thompson, age 81, has been Secretary and General Counsel for
the Company since 1956 and was Treasurer until April 1988. Mr. Thompson
has been a director of the Company from April 1988 and until September
1994, and for various periods since the Company was incorporated. Mr.
Thompson is of counsel to the law firm of Weatherford, Thompson, Quick &
Ashenfelter, P.C., of Albany, Oregon.
COMMITTEES OF BOARD OF DIRECTORS
The board of directors has an executive committee, an audit committee
and a finance/compensation committee.
The Executive Committee currently consists of Mr. Cusic, Chairman, Mr.
Aguirre, Mr. Collins, and Mr. Leonard. The committee has authority to act
on behalf of the board on all but major corporate actions which are
reserved by law to the full board. In practice, the
6
<PAGE>
committee meets in place of the full board when pressing matters arise
which require action between regularly scheduled meetings of the board.
All actions taken by the committee are reported at the next board meeting.
The committee held two meetings during 1995.
The Audit Committee currently consists of Mr. Bezar (Chairman), Mr.
Pate, and Mr. Carter. The audit committee, which met three times during
the fiscal year, is responsible for (i) nominating independent auditors for
selection by the board of directors, (ii) reviewing the planned scope of
the independent audit, (iii) reviewing the results of the independent
auditors' examination, (iv) reviewing annual financial statements prior to
issuance, and (v) reviewing internal financial control procedures.
The Finance/Compensation Committee, which currently consists of Mr.
Collins, Chairman, Mr. Bezar, Mr. Cusic, and Mr. Leonard, held three
meetings during 1995. The Finance/Compensation Committee, when requested
by the board, reviews and advises the board on fiscal and compensation
matters.
COMPENSATION POLICY
The Finance/Compensation Committee (the "Committee") consists of four
(4) Directors, none of whom are executive officers of the Company. The
Committee advises the Board on compensation matters when requested by the
Board. The Committee's policy is to review and establish executive
compensation to insure that base pay and current compensation are at
competitive levels to reward performance, and to provide incentive systems
reflecting financial performance and an alignment with shareholder
interests. The Committee has established executive officers' compensation
based on (1) the Company's historical pattern of encouraging employee
ownership through the ESOP and other stock compensation programs; (2) the
special circumstance of the recent acquisition of Titanium Industries,
Inc.; and (3) current and long-term incentive programs to reward and retain
executive officers.
William M. Mercer, Inc., prepared an Executive Compensation Study
Report for 1995, and the Committee adopted certain recommendations of that
Report with respect to establishing annual base salaries for executive
officers, an annual incentive program for executive officers, and a long-
term incentive program based on stock appreciation rights. The Report also
reviewed directors' compensation.
BASE PAY. The Board awards compensation packages that it believes are
competitive with other companies in order to attract and retain executives.
Pursuant to such policy, the Board authorized employment contracts for the
following new or vacant positions during the last few years: President and
Chief Executive Officer (Mr. Aguirre); Vice President, Commercial (Mr.
Floyd); Vice President, Finance, Chief Financial Officer and Treasurer (Mr.
Kelly); and Vice President, Technology and Corporate Development (Mr.
Reichman). The agreements with the executive officers of the Company
generally provide for a base compensation, a bonus paid at the time of
execution of the agreement, and an annual bonus for years before 1995.
Relocation expenses were not awarded under the executive officers'
employment agreements.
7
<PAGE>
Mr. Aguirre's base compensation takes into account the Executive
Compensation Study Report, and is based on comparisons with compensation
paid to executives in comparable companies, and his qualifications.
The Company established a Stock Compensation Plan for salaried and
hourly employees during 1995 where all employees, except executive
officers, receive one share of Oremet common stock for each $100 of
compensation earned. Executive officers of the Company are paid the cash
equivalent due to constraints on their ability to sell company stock.
COMPENSATION POLICIES AND TITANIUM INDUSTRIES, INC., ACQUISITION
The Company entered into several agreements with Mr. Paddock at the
time of the Company's acquisition of Titanium Industries, Inc. ("TII") in
order to assure the continued services of Mr. Paddock as President, Chief
Executive Office and Chief Operating Officer after the acquisition. Mr.
Paddock's compensation and benefits are paid by TII.
A Corporate Organization and Shareholders Agreement ("COSA") between
Mr. Paddock and Oremet sets forth the rights of Mr. Paddock as the minority
shareholder of TII. The COSA provides Mr. Paddock with an annual right to
sell to Oremet up to 50,000 of his 200,000 TII shares starting in 1999, and
obligates Oremet to purchase at least 30,000 shares annually from Mr.
Paddock starting in 2004. Mr. Paddock also entered into a Non-Competition
and Confidentiality Agreement with both TII and Oremet, and was issued a
warrant to purchase 200,000 shares of Oremet stock at $6.375 per share.
Mr. Paddock entered into employment agreements with the Company and
TII making him a Vice President of Oremet, and President, Chief Executive
Officer and Chief Operating Officer of TII. Under the employment agreement
with TII, Mr. Paddock is paid an annual salary of $235,000, and TII will
institute an incentive bonus program that will reward Mr. Paddock an annual
bonus based on TII's financial performance compared to key performance
targets set by the TII board of directors each year. Mr. Paddock
participates in the TII Savings Plan. If Mr. Paddock voluntarily
terminates his employment, or is terminated for cause, as defined in the
agreement, the warrants (or underlying shares, if the warrants are
exercised) to purchase Oremet stock, and the shares held by Mr. Paddock in
TII, are partially forfeitable in accordance with schedules in the
respective agreements.
PERFORMANCE AND COMPENSATION
ESOP AND EXCESS BENEFIT PLANS. In adopting the ESOP and related
Excess Benefit Plan, the Board stated its belief that participation of
employees in the growth and profits of the corporation through the ESOP
would be a benefit to the corporation. Executive officers of the Company
have acquired the following cumulative number of shares in their ESOP
accounts: Mr. Aguirre, 16,797; Mr. Floyd, 24,389; Mr. Reichman, 8,632; and
Mr. Kelly, 9,433. Mr. Paddock and Mr. Thompson are not eligible to
participate in the ESOP. All shares under the
8
<PAGE>
ESOP and Excess Benefit Plan were allocated during 1994, and no further
shares remain to be allocated
SAVINGS PLAN: Effective January 1, 1995, the Company adopted a
Savings Plan containing salary reduction features in which executive
officers participate other than Mr. Paddock and Mr. Thompson who are not
eligible. The Company contributes one share of Oremet common stock for
each day that an employee works. As part of such plan, the Company also
makes a matching contribution based on the employee's contribution and the
profitability of the Company. In no event will such match exceed 3% of an
employee's compensation.
ANNUAL INCENTIVE PROGRAM: The annual incentive program, in which
executive officers other than Mr. Paddock and Mr. Thompson participate,
emphasizes a positive link between enhanced shareholder value and incentive
compensation. Incentive payments under the plan are based solely on
achievement of specified levels of Return on Equity (ROE). The Committee
believes incentive opportunities are commensurate with the performance
required to achieve increasingly higher levels of ROE. Performance above a
specified ROE threshold level is required before any incentives are paid.
Because ROE is used to measure performance, the Committee believes total
direct compensation (base salary plus annual incentive) is positively
correlated with the performance of the Company. No payments were made
under the program for 1995. Mr. Paddock participates in a separate program
which is based on the profitability of TII.
LONG-TERM INCENTIVE PROGRAM: The Company adopted a Stock Appreciation
Rights Plan in December of 1995 under which phantom stock appreciation
rights ("SARs") are awarded to certain key executive officers and senior
managers. 166,500 SARs were granted in December 1995, of which 96,000 were
granted to named executive officers. Such grants will be awarded
periodically to executive officers of the Company as determined by the
Board of Directors other than interested directors. The SARs vest as
follows: Less than second anniversary of grant ("anniversary"), 0%; second
anniversary, 50%; third anniversary, 75%; fourth anniversary, 100%. The
SARs also fully vest upon the death or disability of the participant, or
upon a change in control of Oremet. Units will be forfeited if the
participant is terminated for "cause" (as defined in the Plan). The SARs
are payable only in cash, and the employee receives the difference between
the market value of Oremet Common Stock on the date of exercise, less the
grant price. The Plan will expire in 2005 unless extended by the Board of
Directors.
SUPPLEMENTAL PENSION PLAN. The Company has also implemented a
supplemental non-qualified pension plan for salaried employees, including
executive officers other than Mr. Paddock and Mr. Thompson, whose benefits
under the Oremet Salaried Employees Pension Plan are limited by application
of certain tax laws. Payments to participants in the Supplemental Pension
Plan do not accrue until a participant terminates service with the Company.
The tables which follow and accompanying narrative and footnotes
reflect the above policies.
Gilbert E. Bezar Howard T. Cusic Nicholas P. Collins David H. Leonard
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table summarizes compensation for the last three years
(or since commencement of employment if less than three years) for the
Chief Executive Officer and for the next four most highly-compensated
executive officers of the Company whose total annual salary and bonuses for
the last year exceeded $100,000.
<TABLE>
<CAPTION> SUMMARY COMPENSATION TABLE
Long Term Compensation
__________________________________
Annual Compensation Awards Payouts
______________________________________________________________________________________________
Restricted Securities All Other
Name and Other Annual Stock Underlying LTIP Compen-
Principal Salary Bonus Compensation Award(s) Options/SAR Payouts sation
Position Year ($) ($) ($)(1)[2] ($) (#) ($) ($)[3]
________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carlos E. Aguirre 1995 $220,993 0 $ 27,872 0 45,000 0 $ 4,335
President & CEO 1994 $195,000 $ 40,000 0 0 0 0 $105,357
1993 $ 97,500 $105,000 0 0 0 $ 67,042
James S. Paddock 1995 $225,000 $180,000 0 0 0 0 $ 4,500
Vice President 1994 $ 65,000 $ 90,000 0 0 0 0 $ 1,125
(President & CEO 1993[4] 0 0 0 0 0 0 0
of Titanium
Industries, Inc.)
Dennis P. Kelly 1995 $127,300 0 $ 21,725 0 17,000 0 $ 3,572
Vice President 1994 $120,000 $ 10,000 0 0 0 0 $ 70,318
Finance & 1993 $ 27,325 $ 50,000 0 0 0 0 $ 16,706
Treasurer
Steven H. Reichman 1995 $119,600 0 $ 15,287 0 17,000 0 $ 3,470
Vice President 1994 $115,000 $ 10,000 0 0 0 0 $ 64,757
Technology & 1993 $ 16,586 $ 35,000 0 0 0 0 $ 11,690
Corporate
David G. Floyd 1995 $130,449 0 $ 16,323 0 17,000 0 $ 3,604
Vice President, 1994 $124,825 0 0 0 0 0 $ 56,290
Commercial 1993 $122,956 0 0 0 0 0 $ 39,781
<FN>
<F1> Includes cash payments under Stock Compensation Plan based on
market value of Company stock at time of payment. Also
includes, for Mr. Kelly, vacation entitlement of $4,798.
<F2> Certain perquisites and personal benefits which were less than
the lesser of $50,000 or 10% of the individual's bonus and
salary are not shown.
<F3> Includes, for Mr. Paddock, contributions to TII Savings Plan.
For Messrs. Aguirre, Kelly, Reichman and Floyd, represents
Company contributions to be made to the Savings Plan (260 shares
each) for 1995, and contributions to the ESOP and Excess Benefit
Plan for 1994 and 1993. Mr. Paddock does not participate in the
ESOP or Excess Benefit Plan.
<F4> Mr. Paddock was not employed by the Company in 1993.
</FN>
</TABLE>
10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
__________________________________________________
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise Grant
Options/SARs Employees or Base Date
Granted in Fiscal Price Expiration Present
Name (#)[1] Year[2] ($/Sh.)[3] Date Value $[4]
__________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Carlos E. Aguirre 45,000 27% $10.25 Dec. 2005 $186,750
President & CEO
Dennis P. Kelly 17,000 10% $10.25 Dec. 2005 $ 70,550
Vice President
Finance &
Treasurer
Steven H. Reichman 17,000 10% $10.25 Dec. 2005 $ 70,550
Vice President
Technology &
Corporate
David G. Floyd 17,000 10% $10.25 Dec. 2005 $ 70,550
Vice President
Commercial
<FN>
<F1> Vesting is as follows: Less than 2 years from grant, 0%; 2 years,
50%; 3 years, 75%; 4 years, 100%. Full vesting also accrues upon
death or disability, or change in control of Oremet.
<F2> Based on total options granted to employees of 166,500.
<F3> Fair market value at date of grant.
<F4> Black-Scholes Model Value of $4.15 per SAR.
</FN>
</TABLE>
11
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End(#) at FY-End($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable[1]
___________________________________________________________________________
<S> <C> <C> <C> <C>
Carlos E. Aguirre 0 0 0/45,000 $0/50,625
President & CEO
___________________________________________________________________________
Dennis P. Kelly 0 0 0/17,000 $0/19,125
Vice President
Finance & Treasurer
___________________________________________________________________________
Steven H. Reichman 0 0 0/17,000 $0/19,125
Vice President
Technology &
Corporate
___________________________________________________________________________
David G. Floyd 0 0 0/17,000 $0/19,125
Vice President
Commercial
___________________________________________________________________________
<FN>
<F1> Market value of Company's common stock at exercise or year-end, minus
the exercise price.
</FN>
</TABLE>
SEVERANCE ARRANGEMENTS. If there is a change in the ownership of a
majority of the outstanding capital stock of the Company, other than in
accordance with the existing ESOP, and within one year thereafter there is
an involuntary termination of employment, Mr. Aguirre will be paid two
years salary as severance pay and continue to be eligible for all pension
benefits otherwise available to him from the Company at the end of the
severance pay period. Involuntary termination shall include a reduction in
compensation or a reduction of responsibility.
The employment agreements with executive officers of the Company
generally provide that, in the event employment is terminated other than
for cause, the officer will receive between six months and one year's base
salary as a severance.
Mr. Paddock's Employment Agreement with Titanium Industries, Inc.,
provides that if his employment is involuntarily terminated, in addition to
receiving compensation for the remaining period of the agreement, he will
receive two times his base compensation and bonus for the prior calendar
year. If TII does not renew Mr. Paddock's employment at any renewal date
before December 31, 2005, Mr. Paddock will be paid 75 percent of his annual
base compensation for two years as a severance settlement.
12
<PAGE>
PENSION PLAN. The following table shows the estimated annual pension
benefits under the Company's qualified defined benefit pension plan, as
well as non-qualified supplemental pension plans that provide benefits for
participants that would otherwise be denied by reason of certain Internal
Revenue Code limitations on plan benefits. Benefits are payable on normal
retirement at age 65 based on a straight single life annuity at specified
salary levels (based on the highest average of five (5) consecutive years)
with various years of service.
<TABLE>
<CAPTION>
Y E A R S O F S E R V I C E
====================================================
SALARY 10 20 25 30 40
====================================================
<S> <C> <C> <C> <C> <C>
$100,000 22,500 45,000 46,500 55,800 72,150
120,000 27,100 54,200 56,050 67,260 86,930
140,000 31,700 63,400 65,600 78,720 101,710
200,000 45,500 91,000 94,250 113,100 146,050
250,000 57,000 114,000 118,125 141,750 183,000
300,000 68,500 137,000 142,000 170,400 219,950
</TABLE>
The benefits listed above are not subject to any deduction for social
security benefits or other offset amounts. Salary used in determining
retirement benefits generally consists of an employee's specified annual
salary, including bonuses, as adjusted to the generally higher levels in
existence prior to the implementation of the ESOP. The Company's executive
officers named in the Summary Compensation Table have the following
credited years of service under the plan as of January 1, 1996: Mr.
Aguirre, two years; Mr. Kelly, two years; Mr. Reichman, two years; Mr.
Floyd, five years; and Mr. Paddock, zero years.
RETAINERS AND COMPENSATION OF DIRECTORS. Each member of the board of
directors, excluding Mr. Aguirre, Mr. Paddock and the Chairman of the
Board, receives 650 shares of Company stock per year as a retainer. The
Chairman of the Board receives 1,000 shares of Company stock per year as a
retainer. Each member of the board of directors, excluding Mr. Aguirre,
Mr. Paddock and the Chairman of the Board, is paid $6,000 per year, plus
$700 for each board meeting attended, $600 for each meeting of a board
committee attended, and $250 for each meeting of the ESOP committee
attended that is not on the same day as a board meeting. The Chairman of
the board receives $9,000 per year and an additional $1,200 for each day,
or portion of a day, he spends on Company business. All directors are
reimbursed for travel expenses incurred in attending board and committee
meetings. Under the Company's Deferred Compensation Plan for directors,
directors of the Company may defer their compensation until after they
cease serving as directors but before they reach age 70. Amounts deferred
earn interest at an annual rate of 10% and are payable in cash either in a
lump sum or in up to five annual installments.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. For
1995, no member of the Compensation Committee was an officer or employee of
Oremet.
PERFORMANCE GRAPH. Set forth below is a line-graph comparing the
yearly percentage change and cumulative shareholder return on Oremet common
stock with the cumulative total return of the Index for the NASDAQ Stock
Market (U.S. Companies) and a titanium industry group consisting of RMI
Titanium Company and Tremont Corporation.
14
<PAGE>
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
Performance Graph for
Oregon Metallurgical Corporation
Prepared by the Center for Research in Security Prices
Produced on 01/30/96 including data to 12/29/95
<TABLE>
<CAPTION>
DATE COMPANY INDEX MARKET INDEX PEER INDEX
<S> <C> <C> <C>
12/31/90 100.000 100.000 100.000
01/31/91 127.586 111.085 98.284
02/28/91 127.586 121.770 125.030
03/28/91 128.414 129.918 139.391
04/30/91 121.280 130.741 122.344
05/31/91 115.929 136.742 119.012
06/28/91 98.094 128.414 107.717
07/31/91 121.280 136.016 108.922
08/30/91 103.444 142.778 108.874
09/30/91 99.877 143.303 104.445
10/31/91 107.012 148.057 93.345
11/29/91 82.042 143.093 87.522
12/31/91 87.393 160.564 77.454
01/31/92 110.579 169.953 98.450
02/28/92 110.579 173.805 95.059
03/31/92 99.877 165.601 97.396
04/30/92 92.743 158.500 96.442
05/29/92 85.609 160.559 91.950
06/30/92 74.908 154.282 88.757
07/31/92 67.774 159.746 89.759
08/31/92 67.774 154.865 80.736
09/30/92 62.423 160.622 70.515
10/30/92 57.073 166.948 55.895
11/30/92 53.506 180.230 54.914
12/31/92 57.073 186.866 47.852
01/29/93 64.207 192.185 46.841
02/26/93 59.748 185.016 51.401
03/31/93 64.207 190.371 51.401
04/30/93 80.259 182.247 45.853
05/28/93 87.393 193.134 44.820
06/30/93 92.743 194.026 44.303
07/30/93 89.176 194.256 43.294
08/31/93 78.475 204.297 44.310
09/30/93 73.125 210.382 45.319
10/29/93 65.990 215.110 40.285
11/30/93 64.207 208.695 40.788
12/31/93 67.774 214.511 39.780
01/31/94 76.692 221.022 45.320
02/28/94 87.393 218.957 46.831
03/31/94 78.475 205.488 38.774
04/29/94 73.125 202.821 37.262
05/31/94 76.692 203.317 40.271
06/30/94 85.609 195.885 37.365
07/29/94 78.475 199.907 40.200
08/31/94 74.908 212.649 40.200
09/30/94 82.042 212.104 46.056
10/31/94 92.743 216.271 59.709
11/30/94 94.527 209.096 61.367
12/30/94 103.444 209.686 66.890
01/31/95 103.444 210.786 59.063
02/28/95 96.310 221.922 56.787
03/31/95 99.877 228.493 63.004
04/28/95 112.362 235.677 68.028
05/31/95 124.847 241.778 66.585
06/30/95 137.331 261.361 106.078
07/31/95 158.734 280.535 101.721
08/31/95 174.785 286.237 101.665
09/29/95 181.920 292.820 118.040
10/31/95 131.981 290.996 100.086
11/30/95 155.167 297.839 93.693
12/29/95 162.301 296.304 95.94
_____________________________________________________________________________________________________________________________
LEGEND
Symbol CRSP Total Returns Index for: 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
______________________________ ____________________________ ________ ________ ________ ________ ________ ________
<THIN LINE WITH SQUARE> Oregon Metallurgical Corporation 100.0 87.4 57.1 67.8 103.4 162.3
<ELLIPSIS & EM DASH WITH STAR> Nasdaq Stock Market (US Companies) 100.0 160.6 186.9 214.5 209.7 296.3
<DASHES WITH TRIANGLE> Self-Determined Peer Group 100.0 77.5 47.9 39.8 66.9 95.9
Companies in the Self-Directed Peer Group
R M I TITANIUM CO TREMONT CORP NEW
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/90.
______________________________________________________________________________
15
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In 1995 the Company paid Weatherford, Thompson, Quick & Ashenfelter,
P.C., $134,816 as attorneys' fees, and Mr. Thompson's salary for his
position as Secretary.
INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed the accounting firm of Coopers &
Lybrand, 400 Country Club Road, Suite 300, Eugene, Oregon 97401, as its
principal accountant to audit Oremet's financial statements for the 1996
calendar year. Coopers & Lybrand also examined and certified the financial
statements for Oremet for the year ending December 31, 1995. The Company
expects representatives of Coopers & Lybrand to be present at the annual
meeting and to be available to respond to appropriate questions from
shareholders. The accountants will have the opportunity to make a
statement at the annual meeting if they desire to do so.
1997 ANNUAL MEETING OF SHAREHOLDERS
The 1997 Annual Meeting of Shareholders is scheduled to be held in
Albany, Oregon, on April 24, 1997. Specific proposals of shareholders
intended to be presented at the 1997 annual meeting of shareholders must
comply with the requirements of the Securities Exchange Act of 1934, as
amended, and be received by the Company's Corporate Secretary by November
15, 1996, for inclusion in its 1997 proxy materials.
OTHER MATTERS
Management knows of no matters to be brought before the meeting other
than those described above. However, should any other matters properly
come before the meeting, the persons named in the accompanying form of
proxy will vote or refrain from voting thereon in accordance with their
judgment.
MISCELLANEOUS INFORMATION
The cost of this solicitation will be borne by the Company. In
addition to solicitation by mail, some solicitations may be conducted by
telephone, telegraph, facsimile transmissions and personal interviews by a
few regular employees of the Company.
16
<PAGE>
The Company does not expect to pay any compensation for the
solicitations of proxies, but may reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their
reasonable expenses for furnishing shareholder lists and sending proxy
material to principals and obtaining their proxies.
___________________________________
Albany, Oregon 97321
BY ORDER OF THE BOARD OF DIRECTORS
ORVAL N. THOMPSON, Secretary
<PAGE>
OREGON METALLURGICAL CORPORATION
Proxy solicited on behalf of the Board of Directors
Annual Meeting of Shareholders, April 25, 1996
The undersigned acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement in connection with the annual meeting above mentioned,
and hereby appoints CARLOS E. AGUIRRE and ORVAL N. THOMPSON, and each of
them, proxies of the undersigned, with full power of substitution, to
attend said annual meeting and any and all adjournments thereof, and to
vote all shares of Oregon Metallurgical Corporation stock the undersigned
would be entitled to vote if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY WHEN
PROPERLY EXECUTED BY THE UNDERSIGNED STOCKHOLDER WILL BE VOTED IN THE
MANNER SPECIFIED ON THE REVERSE SIDE OF THIS PROXY. IF AUTHORITY IS NOT
WITHHELD, THIS PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES LISTED ON THE
REVERSE SIDE OF THIS PROXY.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<TRIANGLE> FOLD AND DETACH HERE <TRIANGLE>
OREGON METALLURGICAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 25, 1996
<PAGE>
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
/ / / /
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
DRAW A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
CARLOS E. AGUIRRE ROGER V. CARTER DAVID H. LEONARD
GILBERT E. BEZAR NICHOLAS P. COLLINS JAMES S. PADDOCK
THOMAS B. BOKLUND HOWARD T. CUSIC JAMES R. PATE
DATED: ____________________________, 1996
__________________________________________
SIGNATURE(S)
__________________________________________
PLEASE SIGN ABOVE EXACTLY AS YOUR NAME
APPEARS ON THE LEFT SIDE HEREOF. IF MORE
THAN ONE NAME APPEARS, ALL SHOULD SIGN.
PERSONS SIGNING AS EXECUTOR, ADMINISTRATOR,
TRUSTEE, GUARDIAN, CORPORATE OFFICER OR IN
ANY OTHER OFFICIAL OR REPRESENTATIVE
CAPACITY, SHOULD ALSO PROVIDE FULL TITLE.
<TRIANGLE> FOLD AND DETACH HERE <TRIANGLE>
OREGON METALLURGICAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 25, 1996
