SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to <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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
<PAGE>
OREGON METALLURGICAL CORPORATION
530 Southwest 34th Avenue - P.O. Box 580
Albany, Oregon 97321-0177
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
The annual meeting of the shareholders of Oregon Metallurgical
Corporation, an Oregon corporation, will be held in the auditorium of the
Company's office building at 530 Southwest 34th Avenue in Albany, Oregon, on the
24th day of April, 1997, at 10 o'clock a.m., Oregon Time, for the following
purposes:
(1) To elect nine directors for the ensuing year;
(2) To approve an amendment to the Restated Articles of
Incorporation to increase
the authorized number of shares of the Company; and
(3) 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 7,
1997, 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.
March 14, 1997 BY ORDER OF THE BOARD OF DIRECTORS
ORVAL N. THOMPSON, Secretary
OREMET<REGISTERED TRADEMARK> is the registered trademark of Oregon Metallurgical
Corporation
<PAGE>
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
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
24, 1997. These proxies are solicited by the Board of Directors of the Company
(the "Board"). A proxy may be revoked at any time prior to its exercise by (i)
appearing in person and voting at the annual meeting; (ii) a written revocation
delivered to the Secretary of the Company prior to the convening of the annual
meeting; or (iii) a later-dated proxy received by the Secretary of the Company.
Attendance at the meeting will not by itself revoke a proxy. This Proxy
Statement and accompanying form of proxy were first sent or given to
shareholders on approximately March 14, 1997.
The Company has only one class of stock, namely, $1.00 par value common
stock ("Common Stock"). The close of business on March 7, 1997, 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 16,185,553
outstanding 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 for 1997, multiplied by the number of shares
owned by the shareholder, or by distributing such votes on the same principal
among any number of nominees. The shares held by each person giving a proxy in
the accompanying form will be voted at the meeting in accordance with any
instructions specified in the proxy. If no instructions are specified, the
shares will be voted: (i) FOR the directors named in this Proxy Statement or, in
the discretion of those voting the proxy, cumulatively for the election of one
or more of such directors and (ii) FOR the amendment to the Restated Articles of
Incorporation.
It is necessary that a majority of the outstanding Common Stock
(including abstentions and broker non-votes) be represented at the meeting in
person or by proxy in order to constitute a quorum for the transaction of
business. A plurality of the votes cast by the shares entitled to vote is
required to elect directors. The approval of the amendment to the Restated
Articles of Incorporation requires that the votes cast favoring the amendment
exceed the votes cast opposing the amendment. Proxies withholding authority to
vote will be treated as votes cast. Abstentions and broker non-votes will have
no effect on the vote for directors. For the other proposal, abstentions will be
treated as a vote cast against the proposal and broker non-votes will not be
treated as a vote cast and, therefore, will not be counted for or against the
proposal.
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, 1996, INCLUDING FINANCIAL STATEMENTS
AND SCHEDULES. Requests for the
1
<PAGE>
Form 10-K should be addressed to Dennis P. Kelly, Vice President, Finance and
Chief Financial Officer and Treasurer, at P.O. Box 580, Albany, Oregon 97321,
phone number (541) 967-9000.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock at February 28, 1997, (i) by each person known by
the Company to own beneficially more than 5% of the Common Stock; (ii) by each
of the Company's directors, nominees and the named executive officers; and (iii)
by all directors, nominees and executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER BENEFICIALLY OF
OWNED (1) COMMON
STOCK
<S> <C> <C>
American Century Companies, Inc., 850,000 5.3%
American Century Investment Management, Inc.,
American Century Mutual Funds, Inc. and
James E. Stowers, Jr.
4500 Main Street, Kansas City, MO 64141
Nicholas-Applegate Capital Management (2) 918,405 5.7%
600 West Broadway, San Diego, CA 92101
Wellington Management Company, LLP (3) 828,400 5.1%
75 State Street, Boston, MA 02109
Carlos E. Aguirre (4) (5) 17,512 *
Gilbert E. Bezar 2,000 *
Thomas B. Boklund 1,300 *
J.P. Byrne (4) (5) 959 *
Thomas L. Chrystie (6) 10,000 *
Roger V. Carter 6,000 *
Nicholas P. Collins 6,400 *
Howard T. Cusic 5,800 *
David G. Floyd (4) (5) 25,104 *
T. Grant John (7) 886 *
Dennis P. Kelly (4) (5) 11,647 *
David H. Leonard 5,800 *
James S. Paddock (8) 120,000 *
James R. Pate 950 *
All directors, nominees and executive officers as a group 224,199 1.4%
(15 persons) (4) (5) (9)
* Less than 1%
2
<PAGE>
<FN>
<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> Based on the information obtained from a Schedule 13G dated February 3,
1997, filed by Nicholas-Applegate Capital Management with the
Securities and Exchange Commission: Nicholas-Applegate Capital
Management has the sole power to vote 875,362 shares and the sole power
to dispose of 918,405 shares.
<F3> Based on the information obtained from a Schedule 13G dated January 24,
1997, filed by Wellington Management Company, LLP ("WMC") with the
Securities and Exchange Commission: WMC has the shared power to vote
545,600 shares and the shared power to dispose of 828,400 shares.
<F4> Shares beneficially owned are in Messrs. Aguirre's, Byrne's, Floyd's,
and Kelly's ESOP and Savings Plan accounts, except 1,500 shares for Mr.
Kelly in which voting and investment power is shared, 109 shares owned
directly by Mr. Byrne, 188 shares for Mr. Byrne in which voting and
investment power is shared and 20,730 shares held in Mr. Floyd's IRA.
<F5> Shares include 398 shares to be contributed to the Savings Plan for
each of Messrs. Aguirre, Byrne, Floyd and Kelly.
<F6> Shares held in the Thomas L. Chrystie Living Trust.
<F7> 500 shares are owned directly by Mr. John and 386 shares are
beneficially owned by his spouse.
<F8> Shares shown are issuable under a warrant agreement with Mr. Paddock.
<F9> Shares shown include 1,688 shares in which voting and investment power
is shared.
</FN>
</TABLE>
The Oregon Metallurgical Corporation Employee Stock Ownership Plan (the
"ESOP") and the Oremet Savings Plan (together the "Plans") provide that the
Trustee (Key Trust Company of the Northwest) will vote all Common Stock held by
the Plans as directed by the participants. Each participant has the right with
respect to Common Stock allocated to his or her plan account to direct the
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 Plan account or
Common Stock as to which the Trustee has not received direction from any
participant, the Trustee is required to vote the stock in accordance with a
secondary vote of the participants. The Plans also provide 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 Plan account should be tendered or
exchanged and unallocated shares, or nondirected shares, are subject to tender
or exchange in accordance with a secondary vote of the participants.
ELECTION OF DIRECTORS
The Board consists of nine members. The Board held seven meetings
during the last fiscal year. During the portion of 1996 for which he was a
director, each incumbent director attended at least 75%, except Mr. Boklund who
attended 63%, of the total of (i) the meetings of the Board and (ii) the
meetings held by all committees of the Board on which he served.
All nominees named for election are presently members of the Board
except Messrs. Chrystie and John. The term of office for which each nominee is a
candidate will expire at the annual meeting of shareholders in 1998, 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 as specified. 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. All
nominees have consented to serve if elected. Directors, other than the
President, must be under age 72, and have less than twelve years of cumulative
service as a director. Current directors Messrs. Bezar and Cusic have not been
renominated as they will exceed the maximum age or years of service allowed for
election to the Board in 1997.
3
<PAGE>
The Restated Articles of Incorporation of the Company provide that, if
less than 25% of the Company's outstanding stock is held by the ESOP and Oremet
Savings Plan, nominees to the Board must include one person selected by hourly
(union) employees and one selected by salaried (non-union) employees of the
Company ("ESOP Directors").
DIRECTORS
Information with respect to each person nominated for election as a
director is set forth below.
Carlos E. Aguirre, Ph.D. in Metallurgy and Material Science, age 53,
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.
Thomas B. Boklund, age 57, has been a director since 1996. He has been
employed by Oregon Steel Mills, Inc., since 1973 and was President and Chief
Executive Officer from 1982 to 1992, and, since 1992, Chief Executive Officer
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 67, selected for nomination as a director 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.
Thomas L. Chrystie, age 63, is a nominee for director in 1997. He is
currently an investor and business consultant, after retiring from Merrill Lynch
& Co., Inc. From 1955 to 1988, Mr. Chrystie served in various investment banking
and management capacities, including heading Merrill Lynch's investment banking
capital markets, and merchant banking activities, each of which he helped build.
He also served as the Chief Financial Officer at Merrill Lynch & Co., Inc. with
additional responsibility for planning and development. Mr. Chrystie is a
trustee of Columbia University, The Presbyterian Hospital, Columbia-Presbyterian
Center, and the National Museum of Wildlife Art.
Nicholas P. Collins, age 64, 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.
T. Grant John, age 58, Ph.D. in Metallurgical Engineering, is a nominee
for director in 1997. He has been employed by Lukens Inc., since 1993. He is
currently its Senior Vice President - Commercial, after having been President
and Chief Operating Officer of subsidiary, Washington Steel Corporation. Prior
to joining Lukens, Mr. John was employed by Axel Johnson, Inc., for fourteen
years, during which time he held a number of senior managerial positions.
4
<PAGE>
David H. Leonard, age 50, has been a director of the Company since
1990. He has been a partner of the Salem, Oregon, law firm of Churchill,
Leonard, Brown, Lodine and Hendrie since 1976.
James S. Paddock, age 55, has been a director since 1994. Since 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 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 51, selected for nomination as a director 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 four executive officers of the Company who are
not also members of the Board is set forth below.
J.P. Byrne, age 45, has been Vice President, Manufacturing and
Engineering since March 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 54, has been Vice President, Commercial since 1991.
Mr. Floyd was Managing Director, International Sales for RMI Titanium Company
from 1984 to 1991.
Dennis P. Kelly, age 50, has been Vice President, Finance, Chief
Financial Officer and Treasurer of the Company since 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 53, has been Vice President, Technology and
Corporate Development since 1993. Mr. Reichman was Director of Research &
Development at Wyman-Gordon Company from 1983 to 1993.
5
<PAGE>
COMMITTEES OF BOARD OF DIRECTORS
The Board has an executive committee, an audit committee, a nominating
committee, and a finance/compensation committee.
The Executive Committee 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 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 six meetings during 1996.
The Audit Committee consists of Mr. Bezar (Chairman), Mr. Pate, and Mr.
Carter. The audit committee, which met two times during 1996, is responsible for
(i) nominating independent auditors for selection by the Board, (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 Nominating Committee consists of Mr. Cusic, Mr. Aguirre, Mr. Carter
(an ESOP Director), and Mr. Boklund. One member of this committee is selected
from the ESOP Directors. The selection of ESOP Director alternates each year
between the director proposed for nomination to the Board by the hourly
employees and the director proposed for nomination to the Board by the salaried
employees. The committee identifies, reviews, and recommends potential
candidates for Board vacancies. Nominees for director positions are selected by
the Board as a whole. The committee will consider candidates suggested by
shareholders through timely communication with the Secretary of the Company.
The committee held one meeting in 1996.
The Finance/Compensation Committee, which consists of Mr. Collins
(Chairman), Mr. Bezar, Mr. Cusic, and Mr. Leonard, held two meetings during
1996. The Finance/Compensation Committee, when requested by the Board, reviews
and advises the Board on fiscal and compensation matters.
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
The Report of the Finance/Compensation Committee of the Board and the
Performance Graph following it should not be deemed to be incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and will not otherwise
be deemed filed under such Acts.
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. The Committee's policy is to review
and establish executive
6
<PAGE>
compensation to ensure that base pay and incentive compensation are at
competitive levels, and to provide incentive systems reflecting both financial
performance and an alignment with shareholder interests. The Committee
implements these principles through a combination of: competitive base salary
and benefit programs containing both cash and equity based components; an annual
incentive program; and an equity based long-term incentive program.
KEY ELEMENTS OF EXECUTIVE 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, Manufacturing and
Engineering (Mr. Byrne); Vice President, Commercial (Mr. Floyd); Vice President,
Finance, Chief Financial Officer and Treasurer (Mr. Kelly); Vice President (Mr.
Paddock); 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. See
"Employment Contracts, Severance Arrangements and Change In Control
Arrangements."
In 1996, the Company benchmarked its compensation program by retaining
an independent outside consulting firm to prepare an updated report that
compared the base salary and benefits programs of the Company to those of
similar sized companies ("Report"). The Committee utilized the Report and
compared compensation paid to other executives in comparable companies and with
comparable qualifications and adjusted Mr. Aguirre's and the other executives'
base compensation to remain consistent with competitive levels.
The Company established separate stock compensation plans as a
component of base pay for salaried and hourly employees during 1995. In lieu of
stock, executive officers are paid the cash equivalent of one share of Common
Stock for each $100 of compensation earned subject to a ceiling of $20 per share
value.
ANNUAL INCENTIVE PROGRAM. The annual incentive program, as amended in
1996, in which executive officers other than Mr. Paddock 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.
Mr. Paddock participates in a separate program which is based on the
profitability of Titanium Industries, Inc. ("TII"). The Company also maintains a
cash profit sharing program for other salaried and hourly employees, based on
achievement of specified levels of ROE.
LONG TERM INCENTIVE PROGRAM. The Company adopted a Long Term Incentive
Compensation Stock Appreciation Rights Plan ("SAR Plan") in December of 1995
under which phantom stock appreciation rights ("SARs") may be awarded to certain
key executive officers
7
<PAGE>
and senior managers. In December 1996, 187,500 SARs were granted, of which
96,000 were granted to named executive officers. Such grants are awarded
periodically to executive officers of the Company as determined by the Board
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%; and expire on the tenth anniversary
of the grant. The SARs also fully vest upon the death or disability of the
participant, or upon a change in control of Oremet. SARs will be forfeited if
the participant is terminated for "cause" (as defined in the SAR Plan). The SARs
are payable only in cash, and the participant receives the difference between
the market value of Common Stock on the date of exercise, less the grant price.
The SAR Plan will expire in 2005 unless extended by the Board.
In 1996, the Company established a stock option plan for certain
eligible employees, other than executive officers, and granted options to buy
500 shares of Common Stock at the fair market value at the date of grant. The
options vest 100% on the fourth anniversary of the grant.
The total number of shares subject to options is 252,000.
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 Company through the ESOP would be a benefit to the
Company. Executives officers of the Company have acquired the following
cumulative number of shares in their ESOP accounts: Mr. Aguirre, 16,797; Mr.
Byrne, 0; Mr. Floyd, 24,389; and Mr. Kelly, 9,433. All shares under the ESOP and
Excess Benefit Plan were allocated during 1994, and no further shares remain to
be allocated. Mr. Paddock does not participant in these plans.
SAVINGS PLAN. Effective January 1, 1995, the Company adopted a Savings
Plan containing salary reduction features in which executive officers other than
Mr. Paddock who is not eligible, participate. The Company contributes one share
of Common Stock for each day that an employee works subject to a maximum of a
$32 share value. 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.
Mr. Paddock participates in the TII Savings Plan.
PENSION PLANS. The Company maintains qualified pension plans and
supplemental pension plans for certain of its employees, including the executive
officers. See "Pension and Supplemental Pension Plans."
8
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee has used the same policies with respect to the
compensation of Mr. Aguirre. In 1996, Mr. Aguirre and the Company entered into
a new employment agreement. In determining Mr. Aguirre's base salary and
negotiating his new employment agreement, the Committee reviewed Mr. Aguirre's
performance and responsibilities and the status of the Company. The Committee
noted the challenges, responsibilities and results attained by Mr. Aguirre and
determined to increase his base salary. Mr. Aguirre also participates in the
other plans of the Company. See "Employment Contracts, Severance Arrangements
and Change In Control Arrangements."
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a public corporation from deducting compensation of more than $1
million for its chief executive officer or for any of its four other highest
paid officers. The compensation paid to the executive officers for the 1996
fiscal year did not exceed the limit; however, the exercise of the warrant and
sale of the shares by Mr. Paddock in 1996 was characterized as compensation and
resulted in Section 162(m) compensation for which the limit applied.
The tables which follow and accompanying narrative and footnotes
reflect the above policies.
Compensation Committee During 1996
Nicholas P. Collins, Chair
Gilbert E. Bezar
Howard T. Cusic
David H. Leonard
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table summarizes compensation for the last three years (or
since commencement of employment if less than three years) for the Chief
Executive Officer and the next four most highly compensated executive officers
of the Company.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------------
RESTRICT- SECURITIES ALL
NAME AND OTHER ED STOCK UNDERLYING LTIP PAYOUTS OTHER
PRINCIPAL SALARY BONUS ANNUAL AWARDS OPTIONS/ ($) COMPEN-
POSITION YEAR ($) ($) COMPEN- ($) SAR SATION
SATION (#) ($)(3)
($)(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carlos E. 1996 $265,350 $260,400 $61,939 0 45,000 $0 $ 12,835
Aguirre 1995 220,993 0 27,872 0 45,000 0 4,335
President & 1994 195,000 40,000 0 0 0 0 105,357
CEO
James S. 1996 235,000 235,000 0 0 0 1,974,126(4) 7,050
Paddock 1995 225,000 180,000 0 0 0 0 4,500
Vice 1994 65,000 90,000 0 0 0 0 1,125
President
(President &
CEO of
Titanium
Industries,
Inc.)
Dennis P. 1996 130,000 122,200 30,566 0 17,000 0 12,835
Kelly 1995 127,300 0 21,725 0 17,000 0 3,572
Vice 1994 120,000 10,000 0 0 0 0 70,318
President,
Finance, CFO
& Treasurer
David G. Floyd 1996 130,449 106,300 30,232 0 17,000 0 12,835
Vice 1995 130,449 0 16,323 0 17,000 0 3,604
President, 1994 124,825 0 0 0 0 0 56,290
Commercial
J.P. Byrne (5) 1996 130,000 96,700 33,430 0 17,000 0 12,835
Vice 1995 100,000 10,000 14,044 0 17,000 0 3,042
President,
Manufacturing
& Engineering
<FN>
<F1>Includes cash payments under Stock Compensation Plan based on market value
of Common Stock at time of payment. Also includes, (i) in 1995, for Mr.
Kelly, vacation entitlement of $4,798 and (ii) in 1996, for Mr. Byrne,
vacation entitlement of $2,499.
<F2>Certain perquisites and personal benefits which were less than the lesser of
$50,000 or 10% of the individual's bonus and salary are not shown.
<F3>Includes, for Mr. Paddock, contributions to TII Savings Plan. For all
others, this represents (i) in 1996, the estimated value of Common Stock to
be contributed to the Savings Plan; (ii) for 1995, the value of Common Stock
contributed to the Savings Plan; and (iii) for 1994, contributions to the
ESOP and Excess Benefits Plans.
<F4>Represents net proceeds received by Mr. Paddock from the sale of 80,000
shares of Common Stock acquired by exercising a warrant he received from the
Company at the time of the acquisition of TII.
<F5>Mr. Byrne was not employed by the Company in 1994.
</FN>
</TABLE>
10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT
OPTIONS/SARS EMPLOYEES OR BASE EXPIRATION DATE
GRANTED IN FISCAL PRICE DATE PRESENT
NAME (#)(1) YEAR (2) ($/SH.)(3) VALUE $(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Carlos E. Aguirre 45,000 24% $33.75 Dec. 2006 $742,500
President & CEO
Dennis P. Kelly 17,000 9.07% 33.75 Dec. 2006 280,500
Vice President,
Finance, CFO &
Treasurer
David G. Floyd 17,000 9.07% 33.75 Dec. 2006 280,500
Vice President,
Commercial
J.P. Byrne 17,000 9.07% 33.75 Dec. 2006 280,500
Vice President,
Manufacturing &
Engineering
<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 SARs granted to employees of 187,500.
<F3>Fair market value at date of grant.
<F4>Black-Scholes Model Value of $16.50 per SAR.
</FN>
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END ($)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE (1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Carlos E. Aguirre 0 $0 0/90,000 $0/990,000
President & CEO
Dennis P. Kelly 0 0 0/34,000 0/374,000
Vice President,
Finance, CFO & Treasurer
David G. Floyd 0 0 0/34,000 0/374,000
Vice President,
Commercial
J.P. Byrne 0 0 0/34,000 0/374,000
Vice President,
Manufacturing &
Engineering
<FN>
<F1>Market value of Common Stock at exercise or year-end, minus the exercise
price.
</FN>
</TABLE>
11
<PAGE>
PENSION AND SUPPLEMENTAL PENSION PLANS. The Company maintains qualified
pension plans for its salaried and hourly employees. The executive officers,
other than Mr. Paddock, participate in the Oremet Salaried Employees Pension
Plan. In addition, the Company maintains a supplemental non-qualified pension
plan for salaried employees, including executive officers other than Mr.
Paddock, whose benefits under the pension plan are limited by application of
certain tax laws. Payments to participants in the Pension and Supplemental
Pension Plans do not accrue until a participant terminates service with the
Company.
The following table shows the estimated annual pension benefits under
the Company's Salaried Employees Pension Plan and Supplemental Pension Plan.
Benefits are payable on normal retirement at age 65 (age 62 after 30 years of
service) based on a straight single life annuity at specified salary levels
(based on the highest average of five consecutive years) with various years of
service.
<TABLE>
<CAPTION>
Y E A R S O F S E R V I C E
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
REMUNERATION 10 20 25 30 40
=============================================================================================================
$100,000 22,500 45,000 46,500 55,800 72,150
200,000 45,500 91,000 94,250 113,100 146,050
300,000 68,500 137,000 142,000 170,400 219,950
400,000 91,500 183,000 189,750 227,700 293,850
500,000 114,500 229,000 237,500 285,000 367,750
600,000 137,500 275,000 285,250 342,300 441,650
</TABLE>
The benefits listed above are not subject to any deduction for social
security benefits or other offset amounts. Remuneration used in determining
retirement benefits consists of an employee's specified annual salary, including
bonuses and other annual compensation, as indicated on the Summary Compensation
Table and 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 plans as of January 1, 1997: Mr. Aguirre, four years; Mr. Byrne, two years;
Mr. Floyd, six years; and Mr. Kelly, three years. Mr. Paddock does not
participate in the Company's Pension and Supplement Pension Plans.
RETAINERS AND COMPENSATION OF DIRECTORS. Each member of the Board,
excluding Mr. Aguirre, Mr. Paddock and the Chairman of the Board, receives 650
shares of Common Stock per year as a retainer. The Chairman of the Board
receives 1,000 shares of Common Stock per year as a retainer. Each member of the
Board, 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
12
<PAGE>
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. For 1996,
no member of the Compensation Committee was an officer or employee of Oremet.
EMPLOYMENT CONTRACTS, SEVERANCE ARRANGEMENTS AND CHANGE IN CONTROL
ARRANGEMENTS. The Company has employment agreements with the following
executives: President and Chief Executive Officer (Mr. Aguirre); Vice
President, Manufacturing and Engineering (Mr. Byrne); Vice President, Commercial
(Mr. Floyd); Vice President, Finance, Chief Financial Officer and Treasurer (Mr.
Kelly); Vice President (Mr. Paddock); and Vice President, Technology and
Corporate Development (Mr. Reichman).
In 1996, Mr. Aguirre entered into a five-year employment agreement
(automatically renewable for successive two-year terms) with the Company under
which he is entitled to receive base compensation and participates in the
Company's plans for annual incentive compensation, long-term incentive program,
stock compensation and other benefits. The agreement is terminable upon death,
disability, for cause (as defined in the agreement) or voluntary termination,
involuntary termination not for cause and by prior notice. In addition to
receiving compensation for the remaining period of the agreement, Mr. Aguirre
will be paid two years' salary if he is terminated other than for cause or in a
change in control situation. Mr. Aguirre is entitled to three years' salary as
severance in the event there is a change in control and either (i) he is
terminated other than for cause; or (ii) within three years after a change,
there is a significant reduction in Mr. Aguirre's responsibilities, or his base
pay is reduced. "Change in control" includes a change of 20% ownership of the
capital stock of the Company, and also includes a majority membership change in
the Board in a two-year period. Mr. Aguirre will be paid 75% of his annual base
pay for two years if the Company does not renew his employment agreement through
June 30, 2005. Mr. Aguirre also entered into a Non-Competition Agreement with
the Company.
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, and an incentive bonus that rewards 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. Mr.
Paddock's Employment Agreement with TII 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% of his annual base compensation for two years as a severance
settlement.
13
<PAGE>
The employment agreements with executive officers of the Company, other
than Messrs. Aguirre and Paddock, 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. The executive officers are also eligible to participate in
the Company's benefit plans, including the SAR Plan. Relocation expenses were
not awarded under the executive officers' employment agreements. In addition,
the employment agreements 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.
RELATED PARTY TRANSACTIONS. The Company entered into several
agreements with Mr. Paddock at the time of the Company's acquisition of TII in
order to assure the continued services of Mr. Paddock as President, Chief
Executive Office and Chief Operating Officer. 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
exercised warrants to purchase 80,000 shares in 1996.
PERFORMANCE GRAPH. Set forth on the following page is a line-graph
comparing the yearly percentage change in cumulative shareholder return on
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, Tremont Corporation and Titanium Metals Corporation (beginning in May
1996, when it became a publicly traded company).
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 02/11/97 including data to 12/31/96
<TABLE>
<CAPTION>
DATE COMPANY INDEX MARKET INDEX PEER INDEX
<S> <C> <C> <C>
12/31/91 100.000 100.000 100.000
01/31/92 126.531 105.847 127.108
02/28/92 126.531 108.246 122.729
03/31/92 114.286 103.137 125.748
04/30/92 106.122 98.714 124.515
05/29/92 97.959 99.996 118.716
06/30/92 85.714 96.086 114.593
07/31/92 77.551 99.490 115.888
08/31/92 77.551 96.449 104.238
09/30/92 71.429 100.034 91.042
10/30/92 65.306 103.974 72.166
11/30/92 61.224 112.247 70.899
12/31/92 65.306 116.378 61.781
01/29/93 73.469 119.691 60.477
02/26/93 68.367 115.226 66.363
03/31/93 73.469 118.561 66.363
04/30/93 91.837 113.501 59.201
05/28/93 100.000 120.281 57.867
06/30/93 106.122 120.837 57.200
07/30/93 102.041 120.980 55.897
08/31/93 89.796 127.233 57.209
09/30/93 83.673 131.022 58.512
10/29/93 75.510 133.967 52.012
11/30/93 73.469 129.972 52.662
12/31/93 77.551 133.595 51.360
01/31/94 87.755 137.650 58.513
02/28/94 100.000 136.363 60.463
03/31/94 89.796 127.976 50.061
04/29/94 83.673 126.315 48.109
05/31/94 87.755 126.624 51.994
06/30/94 97.959 121.993 48.242
07/29/94 89.796 124.495 51.902
08/31/94 85.714 132.432 51.902
09/30/94 93.878 132.094 59.462
10/31/94 106.122 134.689 77.090
11/30/94 108.163 130.221 79.230
12/30/94 118.367 130.587 86.362
01/31/95 118.367 131.318 76.256
02/28/95 110.204 138.263 73.318
03/31/95 114.286 142.360 81.345
04/28/95 128.571 146.842 87.830
05/31/95 142.857 150.628 85.967
06/30/95 157.143 162.835 136.957
07/31/95 181.633 174.804 131.331
08/31/95 200.000 178.347 131.259
09/29/95 208.163 182.448 152.401
10/31/95 151.020 181.403 129.221
11/30/95 177.551 185.662 120.967
12/29/95 185.714 184.674 123.874
01/31/96 226.531 185.587 185.425
02/29/96 283.674 192.660 187.556
03/29/96 346.939 193.300 245.732
04/30/96 520.408 209.334 290.307
05/31/96 506.123 218.945 294.150
06/28/96 481.633 209.078 304.628
07/31/96 391.837 190.458 281.752
08/30/96 485.715 201.130 272.377
09/30/96 530.612 216.524 329.706
10/31/96 514.286 214.151 333.297
11/29/96 579.592 227.423 349.855
12/31/96 535.787 227.164 364.763
</TABLE>
LEGEND
<TABLE>
<CAPTION>
Symbol CRSP Total Returns Index for: 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
______ ____________________________ ________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
(THIN LINE, WITH SQUARE AT END)
Oregon Metallurgical Corporation 100.0 65.3 77.6 118.4 185.7 535.8
(ELLIPSIS & EM DASH, WITH STAR AT END)
Nasdaq Stock Market (US Companies) 100.0 116.4 133.6 130.6 184.7 227.2
(DASHES, WITH TRIANGLE AT END)
Self-Determined Peer Group 100.0 61.8 51.4 86.4 123.9 364.8
</TABLE>
Companies in the Self-Directed Peer Group
R M I TITANIUM CO TITANIUM METALS CORP
TREMONT CORP NEW
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 12/31/91.
15
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of Forms 3, 4, and 5 furnished to the
Company pursuant to the SEC Rules, all forms were filed on a timely basis,
except that Mr. Pate inadvertently was six (6) days late in filing the required
SEC report concerning a sale of 1,850 shares of the Company's stock.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the accounting firm of Coopers & Lybrand, L.P.,
400 Country Club Road, Suite 300, Eugene, Oregon 97401, as its principal
accountant to audit Oremet's financial statements for the 1997 calendar year.
Coopers & Lybrand, L.P. also examined and certified the financial statements for
Oremet for the year ending December 31, 1996. The Company expects
representatives of Coopers & Lybrand, L.P. 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.
PROPOSED AMENDMENT OF ARTICLES OF INCORPORATION
Restated Articles of Incorporation of the Company is proposed to be
amended to read as follows:
The aggregate number of shares which the corporation shall have
authority to issue is 80,000,000 shares Common Stock with a par
value of $1 per share.
The amendment would increase the number of authorized shares of the
Company from the currently authorized 25,000,000 shares to 80,000,000 shares. As
of March 7, 1997, 16,185,553 shares of Common Stock were outstanding and
approximately 4,630,000 shares of Common Stock are reserved or designated for
future issuance under the Company's Stock Compensation Plans, Stock Option Plan,
Savings Plan, stock purchase warrants and the Rights Plan (as described below).
The number of shares unissued and not reserved for issuance is 4,184,181.
In December 1996, the Company adopted a Rights Plan ("Rights Plan").
The Rights Plan is designed to prevent a person or group from gaining control of
the Company or obtaining a position that could deter the acquisition of control
by others, without offering an adequate price to all shareholders and to deter
other abusive takeover tactics which are not in the best interest of
shareholders. Under the Rights Plan, each outstanding share of the Common Stock
carries one Right which is composed of Common Stock and debt. The Rights may
only become exercisable under certain circumstances including acquisitions of
the Common Stock by a person or group of persons without the prior approval of
the Board. Depending on the circumstances, if the Rights become exercisable, the
holder may be entitled to purchase shares of the Common Stock and receive debt
or shares of common stock of the acquiring person at discounted prices. The
Rights at the option of the Company are redeemable at one cent per Right.
16
<PAGE>
In December 1996, the Board unanimously determined that it would be
advisable and in the best interest of the Company to increase the number of
authorized shares of Common Stock in order to provide the Company with an
adequate supply of authorized but unissued shares of Common Stock for general
corporate needs, including employee incentive and benefit plans, additional
financing, implementation of the Rights Plan, the payment of stock dividends,
stock splits or acquisitions of other businesses. While the Company currently
has no arrangements, understandings or commitments with respect to the issuance
of any of the additional shares, it is considered advisable to have sufficient
authorized and unissued shares available to enable the Company, as the need may
arise, to move promptly to take advantage of market conditions and the
availability of other favorable opportunities without the delay and expense
involved in calling a special meeting of shareholders. Unless otherwise required
by applicable law or regulation, the additional shares of Common Stock will be
issuable without further authorization by vote or consent of the shareholders
and on such terms and for such consideration as may be determined by the Board.
The Nasdaq Stock Market, on which the issued shares of Common Stock are listed,
currently requires specific shareholder approval as a prerequisite to listing
shares in certain limited circumstances.
The amendment increasing the authorized capital of the Company, could,
under certain circumstances, discourage or make more difficult an attempt to
gain control of the Company or the Board by tender offer or proxy contest, or to
consummate a merger or consolidation with the Company after acquiring control,
and to remove incumbent management, even if such transactions were favorable to
the shareholders of the Company. In certain circumstances, the issuance of the
additional shares may be used to create voting impediments or to frustrate
persons seeking to gain control of the Company, especially if the shares were
issued in a private placement to a person sympathetic to management and opposed
to any attempt to gain control of the Company. As discussed above, the shares of
Common Stock could become issuable under the Rights Plan, which could deter
unsolicited attempts to acquire the Company or any other attempt to acquire the
Company in a manner or on terms not approved by the Board. Accordingly, this
proposal to amend the Restated Articles of Incorporation may be deemed (under
certain circumstances which may or may not occur) to be an anti-takeover
measure. However, the proposal is not being presented as, nor is it part of, any
plan to adopt a series of anti-takeover measures.
The additional authorized shares of Common Stock would, when issued,
have the same rights as the issued and outstanding shares of Common Stock,
including cumulative voting rights. There are no preemptive rights with respect
to any shares of Common Stock. Although the Board would authorize the issuance
of additional shares of Common Stock based on its judgment as in the best
interests of the Company and its shareholders, the issuance of Common Stock
could have the effect of diluting the voting power and book value per share of
the outstanding Common Stock.
The approval of the amendment to the Restated Articles of Incorporation
requires that the votes cast favoring the amendment exceed the votes cast
opposing the amendment.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT
THE AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
BE ADOPTED.
17
<PAGE>
1998 ANNUAL MEETING OF SHAREHOLDERS
The 1998 Annual Meeting of Shareholders is scheduled to be held in
Albany, Oregon, on April 23, 1998. Specific proposals of shareholders intended
to be presented at the 1998 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 Secretary by November 14, 1997, for inclusion in its 1998 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 directors,
officers and employees of the Company.
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
18
<PAGE>
FRONT
OREGON METALLURGICAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS, APRIL 24, 1997
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 SHAREHOLDER 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 AND THE PROPOSAL 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)
<PAGE>
REVERSE SIDE
PLEASE MARK YOUR VOTES AS
INDICATED BY THIS EXAMPLE
1. ELECTION OF DIRECTOR: Instruction: To withhold authority to /X/
vote for any individual nominee, draw a
line through the nominee's name in the
list below. To cumulate votes, indicate
by the name of the nominee(s) the
number of votes to be cast in his or
their favor. (PROPOSED BY BOARD OF DIRECTORS)
FOR all WITHHOLD
nominees AUTHORITY Carlos E. Aguirre Thomas L. Chrystie David H. Leonard
listed below to vote Thomas B. Boklund Nicholas P. Collins James S. Paddock
(except as for all Roger V. Carter T. Grant John James R. Pate
marked to nominees
the contrary listed
/ / / /
2. PROPOSAL TO AMEND ARTICLES OF INCORPORATION: The proposed amendment
increases the authorized numbers of shares of the Company.
/ / For / / Against / / Abstain
Signature(s)_____________________ Signature(s)_____________________ Date_______
*NOTE: 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, guardians, corporate officer or in any other official or
representative capacity, should also provide full title.
