<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ASARCO INCORPORATED
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ASARCO INCORPORATED
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF ASARCO APPEARS HERE]
RICHARD DE J. OSBORNE
CHAIRMAN OF THE BOARD
March 14, 1994
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders which
will be held in the Ground Floor Auditorium, 1 Chase Manhattan Plaza, New
York, New York on Wednesday, April 27, 1994, at 2 P.M. We hope you can be with
us.
At the meeting, you will be asked to elect directors and to approve the
selection of auditors.
The meeting also provides an opportunity to give you a current report on the
activities of the Company and its plans and prospects for the future.
It is important that your shares be represented at the meeting whether or
not you are able to attend in person. Therefore, you are asked to vote, sign,
date and mail the enclosed proxy. Please do so today.
Sincerely,
/S/ Richard de J. Osborne
ASARCO INCORPORATED, 180 MAIDEN LANE, NEW YORK, N.Y. 10038 (212) 510-2000
<PAGE>
[LOGO] [LETTERHEAD OF ASARCO APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 1994
To the Stockholders:
The annual meeting of stockholders of ASARCO Incorporated will be held in the
Ground Floor Auditorium, 1 Chase Manhattan Plaza, New York, New York on
Wednesday, April 27, 1994, at 2 P.M. for the following purposes:
(1) To elect four directors to serve until the 1997 annual meeting of
stockholders.
(2) To act upon a proposal to approve the selection by the Board of
Directors, upon recommendation of the Audit Committee, of Coopers &
Lybrand as independent auditors for the calendar year 1994.
(3) To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 8, 1994 will be
entitled to vote at the annual meeting. Stockholders of record who attend the
annual meeting in person may withdraw proxies and vote in person if they wish.
By order of the Board of Directors,
A.B. Kinsolving
Secretary
New York, N.Y., March 14, 1994
YOUR VOTE IS IMPORTANT
Please mark, sign, date and return your proxy.
<PAGE>
PROXY STATEMENT
This proxy statement is furnished as part of the solicitation by the Board of
Directors of ASARCO Incorporated, 180 Maiden Lane, New York, N.Y. 10038
("Asarco" or the "Company") of the proxies of all stockholders entitled to vote
at the annual meeting to be held on April 27, 1994 and at any adjournment
thereof. This proxy statement and the enclosed form of proxy are being mailed,
commencing on or about March 16, 1994, to stockholders of record on March 8,
1994. Any proxy in the enclosed form given pursuant to this solicitation and
received in time for the annual meeting will be voted with respect to all
shares represented by it and in accordance with the instructions, if any, given
in such proxy. If the Company receives a signed proxy with no voting
instructions given, such shares will be voted for the proposals. Any proxy may
be revoked at any time prior to the exercise thereof by notice from the
stockholder, received in writing by the Secretary, or by written ballot voted
at the meeting.
At the close of business on March 8, 1994, the record date for the meeting,
the Company had outstanding and entitled to be voted 41,787,235 shares of
Common Stock, without par value. Each share of Common Stock outstanding at the
record date will be entitled to one vote. The presence in person or by proxy of
the holders of record of a majority of the shares entitled to vote at the
meeting shall constitute a quorum. Abstentions or votes withheld are counted
for quorum purposes but are not counted either as votes cast "For" or
"Against". A plurality of the votes cast is required for the election of
directors.
When a stockholder participates in the Dividend Reinvestment Plan applicable
to the Company's Common Stock, his proxy to vote shares of Common Stock will
include the number of shares held for him by The Bank of New York, the agent
under the plan. If the stockholder does not send any proxy, the shares held for
his account in the Dividend Reinvestment Plan will not be voted. Shares of
Common Stock owned under the Company's Savings Plans will be voted by the
trustee under the plans in accordance with the instructions contained in the
proxy submitted by the beneficial stockholder. Any shares held by the trustee
as to which it receives no voting instructions will be voted by the trustee in
the same proportion as the shares for which it has received voting
instructions.
ELECTION OF DIRECTORS
At the recommendation of the Company's Organization and Compensation
Committee and pursuant to a resolution of the Board of Directors adopted on
January 26, 1994, four nominees are proposed for election at the annual
meeting. James R. Greene, currently a Class III director, has attained
retirement age under the Company's By-Laws and accordingly will not stand for
reelection as director. The remaining nine directors will continue to serve in
accordance with their previous election. All of the nominees are currently
directors. All current directors were elected to their present term of office
at a previous annual meeting of stockholders. Norman C. Fussell and Peter R.
Rowland are the directors designated by M.I.M. Holdings Limited ("MIM")
pursuant to a 1985 agreement, as amended, between MIM and the Company. See
discussion of MIM under "Security Ownership of Certain Beneficial Owners."
2
<PAGE>
The Company's Restated Certificate of Incorporation, as amended, provides
that there shall be three classes of directors, as nearly equal in number as
possible, each class to be elected for a three-year term. At its meeting held
on January 26, 1994, the Board of Directors of the Company fixed the number of
directors at thirteen effective April 27, 1994 and nominated James C. Cotting,
Norman C. Fussell, E. Gordon Gee and James Wood for election as Class III
directors to serve until the 1997 annual meeting of stockholders. All four
nominees are currently serving as Class III directors with a term of office
expiring in 1994.
Proxies in the enclosed form will be voted, unless authority is withheld, for
the election of the four nominees named below. If any person should be
unavailable for election, proxies will be voted for another individual chosen
by the Board of Directors as a substitute for the unavailable nominee, unless
the Board of Directors adopts a resolution pursuant to the By-Laws reducing the
number of directors.
NOMINEES FOR ELECTION AS DIRECTORS
Class III
(to serve until the 1997 annual meeting of stockholders)
<TABLE>
<CAPTION>
DIRECTOR
FOR DIRECTOR AGE SINCE
------------ --- --------
<S> <C> <C> <C>
James C. Cotting........ Chairman and Chief Executive Officer of 60 1987
Navistar International Corporation (truck
and engine manufacturer) since April 1987;
its Vice Chairman and Chief Financial Of-
ficer from September 1983 until March
1987, and previously its Executive Vice
President, Finance and Planning; director
of USG Corporation and The Interlake Cor-
poration.
Norman C. Fussell....... Managing Director and Chief Executive Offi- 56 1990
cer of M.I.M. Holdings Limited (metals and
minerals producer) since December 1990,
its Executive General Manager from 1980 to
December 1990 and a director since 1980;
director of Aberfoyle Limited, Mount Isa
Mines (Coal Finance) Limited and Highlands
Gold Limited.
E. Gordon Gee........... President of The Ohio State University 50 1989
since September 1990; from 1985 until Au-
gust 1990, President of the University of
Colorado. From 1981 to 1985 Dr. Gee was
President of West Virginia University; di-
rector of Banc One Corporation and The
Limited, Inc.
James Wood.............. Chairman of the Board, President and Chief 64 1989
Executive Officer of The Great Atlantic &
Pacific Tea Company, Inc. (supermarket
chain) since 1980; prior to 1980, Mr. Wood
was Chairman of the Board and Chief Execu-
tive Officer of The Grand Union Company;
director of Schering-Plough Corporation.
</TABLE>
3
<PAGE>
DIRECTORS WHOSE TERM OF OFFICE CONTINUES
Class II
(serving until the 1996 annual meeting of stockholders)
<TABLE>
<CAPTION>
DIRECTOR
DIRECTOR AGE SINCE
-------- --- --------
<S> <C> <C> <C>
Willard C. Butcher...... Director of Texaco Inc., Celgene Corpora- 67 1974
tion, International Paper Company and
Olympia & York Companies (U.S.A.). Mr.
Butcher was Chairman of the Executive Com-
mittee of The Chase Manhattan Bank, N.A.
from November 1, 1990 until October 31,
1991 and was Chairman of the Board and
Chief Executive Officer of the bank from
1981 through October 1990. Mr. Butcher was
also Chairman of the Board and Chief Exec-
utive Officer of The Chase Manhattan Cor-
poration from 1981 through October 1990.
Harry Holiday, Jr....... Director of NBD Bancorp, Inc., Birmingham 70 1981
Steel Corporation and Adince, Inc. From
April 1982 until January 1986, Mr. Holiday
was Chairman of the Board of Armco Inc.
(steel products and manufacturing) and its
Chief Executive Officer from 1979 until
February 1985.
Richard de J. Osborne... Chairman of the Board, Chief Executive Of- 59 1976
ficer and President of the Company since
December 1, 1985 and President of the Com-
pany from 1982; director of The Continen-
tal Corporation and Schering-Plough Corpo-
ration.
Peter R. Rowland........ Consultant, Feez Ruthning, Brisbane, 62 1987
Queensland, Australia (law firm) since De-
cember 1986 and previously Partner; direc-
tor of M.I.M. Holdings Limited and High-
lands Gold Limited.
</TABLE>
4
<PAGE>
Class I
(serving until the 1995 annual meeting of stockholders)
<TABLE>
<CAPTION>
DIRECTOR
DIRECTOR AGE SINCE
-------- --- --------
<S> <C> <C> <C>
David C. Garfield....... Director of Schering-Plough Corporation. 66 1984
Mr. Garfield was consultant to Ingersoll-
Rand Company (machinery manufacturer) from
June 1986 until June 1992. Mr. Garfield
was President of Ingersoll-Rand Company
from 1981 through May 1986 and previously
its Vice Chairman.
James W. Kinnear........ Director of Texaco Inc. and Corning Incor- 65 1990
porated and an advisory director of
Unilever N.V. and Unilever PLC; President
and Chief Executive Officer of Texaco Inc.
(crude oil, natural gas and petroleum
products) from 1987 to April 1993; previ-
ously its Vice Chairman of the Board from
1983 to 1987, Executive Vice President
from 1978 to 1983, and a director since
July 1977.
Francis R. McAllister... Executive Vice President of the Company in 51 1988
charge of copper operations since April
1993; previously its Chief Financial Offi-
cer from April 1982 until April 1993.
Michael T. Nelligan..... President and Chief Executive Officer of 54 1984
Don Ward & Co. (specialty trucking) since
January 1987; Mr. Nelligan was Chairman of
the Board of Ideal Basic Industries, Inc.
(cement products) from October 1985 until
January 1986, its Chief Executive Officer
from July 1983 until January 1986 and its
President from 1982 until January 1986.
John D. Ong............. Chairman and Chief Executive Officer of The 60 1991
BFGoodrich Company (diversified chemicals
and aerospace) since 1979 and its Presi-
dent from 1975 to 1984; director of Cooper
Industries, Inc., Ameritech Corporation,
The Kroger Co. and The Geon Company.
</TABLE>
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information with respect to those persons who are
known to the Company to have been, as of the dates indicated below, the
beneficial owners of more than five percent of the Company's Common Stock.
<TABLE>
<CAPTION>
SHARES OF
THE COMPANY'S
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS
------------------------------------ ------------- ----------
<S> <C> <C>
M.I.M. Holdings Limited........................ 10,353,363(a) 24.8%
410 Ann Street
Brisbane, Queensland 4000
Australia
</TABLE>
- --------
(a) Based on information provided by M.I.M. Holdings Limited as of January 27,
1994. MIM has sole dispositive and voting power over such shares.
Under a 1981 Stock Purchase Agreement, MIM has the right to require the
Company, under certain conditions, to register 1,000,000 or more of its shares
of the Company's Common Stock under the Securities Act of 1933 should MIM wish
to sell such shares. Asarco has a right of first refusal, under certain
conditions, to purchase up to 4,938,400 shares of Asarco Common Stock owned by
MIM, within 90 days of notice of the proposed sale or transfer, should MIM wish
to sell or transfer 1,000,000 or more shares in a single transaction, a group
of related transactions or pursuant to a program of transactions. The agreement
expires on a date designated by either party by twelve months' prior notice
("Expiration Date").
Under a 1985 agreement, as amended in 1987, MIM has the right to designate
two nominees to Asarco's Board so long as MIM owns more than 6,500,000 shares
of Asarco Common Stock, adjusted for stock dividends or stock splits, and so
long as such ownership constitutes more than 10% of Asarco's Common Stock.
Asarco has the right to nominate two persons for election to MIM's Board so
long as Asarco's ownership exceeds 241,718,641 MIM shares, which shall be
adjusted for stock dividends, stock splits and rights offers. MIM now owns
sufficient shares of Asarco Common Stock to have the right to nominate two
directors. Asarco now owns sufficient MIM shares to have the right to nominate
two directors of MIM but does not currently intend to exercise this right. The
Company's current ownership in MIM is approximately 17.2%. In the 1985
agreement, as amended, MIM agreed, subject to certain exceptions, to limit its
beneficial ownership of Asarco Common Stock to 33 1/3% of the outstanding
shares of Common Stock until the Expiration Date, and Asarco agreed to limit
its ownership of MIM shares to 40% for the same period.
6
<PAGE>
BENEFICIAL OWNERSHIP OF MANAGEMENT
The information set forth below as to the shares of Common Stock of the
Company beneficially owned by the nominees, directors, executive officers named
in the Summary Compensation Table below and by all nominees, directors and
officers as a group is stated as of December 31, 1993.
<TABLE>
<CAPTION>
SHARES OF THE
COMPANY'S ADDITIONAL
COMMON STOCK SHARES DEEMED PERCENT
BENEFICIALLY BENEFICIALLY OF
OWNED(A) OWNED(B) TOTALS CLASS
------------- ------------- ------- -------
<S> <C> <C> <C> <C>
Willard C. Butcher................. 800 -- 800 (c)
James C. Cotting................... 1,000 -- 1,000 (c)
Norman C. Fussell(d)............... 500 -- 500 (c)
David C. Garfield.................. 10,300 -- 10,300 (c)
E. Gordon Gee...................... 600 -- 600 (c)
James R. Greene.................... 2,128 -- 2,128 (c)
Harry Holiday, Jr.................. 900 -- 900 (c)
James W. Kinnear(e)................ 800 -- 800 (c)
Francis R. McAllister(f)........... 20,223 70,002 90,225 (c)
Michael T. Nelligan................ 1,015 -- 1,015 (c)
John D. Ong........................ 400 -- 400 (c)
Richard de J. Osborne(f)(g)........ 62,708 193,980 256,688 (c)
Peter R. Rowland(d)(e)............. 900 -- 900 (c)
James Wood(e)...................... 2,600 -- 2,600 (c)
George W. Anderson(f)(h)........... 15,884 52,800 68,684 (c)
Augustus B. Kinsolving(f).......... 8,035 39,400 47,435 (c)
Robert J. Muth(f).................. 8,057 24,000 32,057 (c)
Robert M. Novotny(f)............... 6,459 21,500 27,959 (c)
All nominees, directors and
officers as a group (27
individuals) (f).................. 166,078 483,432 649,510 1.6
</TABLE>
- --------
(a) Information with respect to beneficial ownership is based upon information
furnished by each nominee, director or officer. Except as noted below, all
nominees, directors and officers have sole voting and investment power over
the shares beneficially owned by them.
(b) Consists of shares deemed beneficially owned under regulations of the
Securities and Exchange Commission since such shares may be acquired within
60 days after December 31, 1993 through the exercise of options granted
under the Company's Stock Incentive Plan or the previous Stock Option Plan.
(c) Less than 0.65%.
(d) Excludes the 10,353,363 shares of Common Stock beneficially owned by MIM.
Individual beneficial ownership of such shares is disclaimed.
(e) In addition, Messrs. Kinnear, Rowland and Wood have credited to their
account the equivalent of 5,023 shares, 768 shares and 3,144 shares of
Common Stock, respectively, in book entry form under the Company's Deferred
Fee Plan for Directors. Deferred fees are paid in cash at or following
retirement depending on the market value of the shares at that time.
(f) Includes restricted Common Stock awarded under the Company's Stock
Incentive Plan to certain of the Company's executive officers, and still
held by the Company subject to restrictions, as follows: 23,900 such shares
to Mr. Osborne; 7,540 to Mr. McAllister; 5,500 to Mr. Anderson; 4,920 to
Mr. Kinsolving; 3,580 to Mr. Muth; 4,060 to Mr. Novotny and 11,220 to other
executive officers. Restrictions on such shares lapse in equal installments
over five years beginning on their respective grant dates.
(g) Includes 4,545 shares of Common Stock over which Mr. Osborne and his wife
share voting and investment power.
(h) Includes 717 shares over which Mr. Anderson and his wife share voting and
investment power.
7
<PAGE>
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Organization and Compensation Committee of the Board of Directors has
furnished the following report on executive compensation.
The compensation of Asarco's executive officers other than those who are also
directors is reviewed and established annually by the Organization and
Compensation Committee of the Board of Directors. For the two officers who are
also directors (Mr. Osborne and Mr. McAllister) the Committee makes
compensation recommendations to the Board absent those officers, which
establishes their compensation. The Board did not modify or reject in any
material way the Committee's recommendations for 1993 compensation. The
Committee met a total of four times during 1993. Long-term incentive
compensation awards for 1993 to officers and other salaried employees were
approved by the Committee (and recommended to the Board with respect to Messrs.
Osborne and McAllister) at the Committee's January 1993 meeting. At its April
1993 meeting the Committee approved an increase in salary and long-term
incentive compensation awards to Mr. K.R. Morano in connection with his
promotion to Vice President and Chief Financial Officer.
The Company retains an independent compensation consulting organization to
advise and assist the Company and the Committee in connection with compensation
matters. During 1993 the consulting organization made recommendations to the
Committee on base salary, cash incentive and long-term incentive compensation
for the Chief Executive Officer and each other Asarco executive position on
subjects including target levels for base salary and cash incentive
compensation; long-term income targets and recommended distribution of stock
option and restricted stock values; and appropriate stock option and restricted
stock valuation methods. The consultant also recommended a methodology to
implement comparisons of pay versus performance and examination of pay
competitiveness. The Committee carefully considered the recommendations and
acted within the scope of the recommendations in these areas.
In January 1993 the Committee retained a second independent compensation
consultant to review the procedures and methodology used to determine executive
compensation at Asarco. The consultant reported that based on his study the
Company's overall compensation program was conservatively competitive, and the
process and procedures and individual pay elements followed at Asarco are
appropriate and sensitive to individual performance and the Company's relative
performance. The consultant recommended that a retrospective review of peer
company performance and peer executive pay be undertaken each year, and the
Committee implemented that recommendation. The consultant recommended that the
Company consider adoption of fixed corporate performance formulas in connection
with cash incentive compensation and vesting of shares of restricted stock,
with measures to increase upside potential in these awards if performance
formulas are satisfied. The Committee decided that the Company's cash incentive
compensation program is already fully sensitive to corporate performance and
should not be modified in this respect. The Committee is continuing to evaluate
whether a formula approach should be added to vesting of shares of restricted
stock.
Asarco's executive officer compensation is composed of base salary and
incentive compensation.
The Company's policy for base salary for executive officers is to establish
target compensation levels for each position based on competitive data and the
responsibilities and value of each executive
8
<PAGE>
position to the Company. The Committee considers compensation information from
other companies in the mining and metals industry and comparably sized and both
larger and smaller companies in other industries. The Committee then considers
individual and corporate performance in establishing salary levels within a
competitive range.
Base salaries for Mr. Osborne, Mr. McAllister and other executive officers
were not increased during 1993, except for Mr. K.R. Morano in connection with
his promotion.
Incentive compensation consists of cash incentive compensation awarded
annually if justified, and long-term incentive compensation. Long-term
incentive compensation combines restricted stock and stock options in tandem
with stock appreciation rights and is designed to link the interests of
executive officers with those of stockholders by providing an incentive to
manage the business as an owner with an equity stake.
Annual cash incentive payments are determined under the Asarco Incentive
Compensation Plan, which is administered by the Organization and Compensation
Committee. Approximately 73% of all active salaried employees of the Company
are eligible for annual cash incentive compensation payments. A par level of
annual incentive compensation is established for each eligible employee based
on level of responsibility. Under this plan, awards to employees are increased
or decreased from a predetermined par level, based upon performance measured at
three levels: individual, operating unit or staff group and Company-wide.
Incentive compensation for the Company's officers other than Messrs. Osborne
and McAllister was established by the Committee after two meetings at which it
considered the Company's performance in 1993. Incentive compensation for
Messrs. Osborne and McAllister was determined by the Board of Directors upon
the recommendation of the Committee, after review by the Board and the
Committee at meetings held in November 1993 and January 1994. Based on these
reviews the Committee and the Board of Directors concluded that no annual cash
incentive payments should be made to the Company's officers including Messrs.
Osborne and McAllister based on the Company's 1993 performance.
In the case of the Chief Executive Officer, the Committee and the Board of
Directors evaluated the Chairman's performance in 1993 in the context of the
adverse changes which occurred during the first quarter of 1993 in the economic
environment in which the Company operates. These changes came about as a result
of severe flooding in the Southwestern part of the United States where the
Company operates two of its major copper properties, and as a result of a
significant decline in revenue caused by a sharp drop in prices for the
Company's principal metal products. The Committee and the Board of Directors
concluded that the Chairman's performance in defining a strategy and in leading
the implementation of a plan to return the Company to profitability and to
protect its financial integrity continues to exceed expectations. The Committee
recommended, and the Board concurred, that in the light of the Company's
results of operations in 1993 and the fact that no incentive compensation was
paid to any other officer of the Company, it was appropriate not to make a cash
incentive compensation award to the Chairman with respect to 1993.
In January 1993 the Committee approved awards of stock options with stock
appreciation rights and restricted stock to the Company's officers other than
Mr. Osborne and Mr. McAllister, and
9
<PAGE>
recommended to the Board awards to Mr. Osborne and Mr. McAllister. These awards
were made within long-term incentive income targets based upon competitive
analysis by the compensation consultant. In making these awards the Committee
also considered each officer's performance. The Committee also considered
outstanding options and stock appreciation rights and shares of restricted
stock. In the case of the Chairman the Committee also considered his
performance and responsibility in establishing the Company's strategic goals
and directing all elements of its performance.
Willard C. Butcher, Chairman
Harry Holiday, Jr.
James W. Kinnear
Michael T. Nelligan
----------------
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In the ordinary course of business, the Company, its subsidiaries and its
associated company Southern Peru Copper Corporation purchase petroleum based
fuel and lubricants and natural gas from several major oil companies and their
distributors, including Texaco Inc. Such purchases are made on an arms' length
basis at prevailing market prices. In 1993, such purchases from Texaco Inc.
amounted to approximately $6.8 million in the aggregate. James W. Kinnear, a
member of the Company's Organization and Compensation Committee, was President
and Chief Executive Officer of Texaco Inc. until March 31, 1993, when he
retired from that position. The other members of the Committee, none of whom
have transactions of such nature with Asarco, are Messrs. W.C. Butcher,
Chairman; H. Holiday, Jr. and M.T. Nelligan.
10
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is certain information concerning the annual and long-term
compensation for services in all capacities to the Company for fiscal years
1993, 1992 and 1991 of the Company's Chief Executive Officer and the other five
most highly compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- --------------------------
SECURITIES
UNDERLYING
OPTIONS/
NAME AND RESTRICTED SARS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS(1) (SHARES) COMPENSATION(2)
------------------ ---- ------------------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard de J. Osborne... 1993 $725,000 $ -- $260,000 27,000 $8,994
Chairman of the Board, 1992 687,500 125,000 180,625 21,000 6,866
President and Chief 1991 670,853 180,000 169,500 25,000 6,667
Executive Officer
Francis R. McAllister... 1993 389,507 -- 78,000 12,000 8,994
Executive Vice President 1992 370,713 41,100 55,250 9,000 6,866
1991 361,910 55,100 62,150 10,000 6,667
George W. Anderson(3)... 1993 326,000 -- 57,200 8,300 8,994
Executive Vice President 1992 312,500 26,000 42,500 6,500 6,866
1991 306,667 34,900 42,375 7,000 6,667
Augustus B. Kinsolving.. 1993 264,000 -- 41,600 6,500 4,717
Vice President 1992 250,500 26,100 53,125 5,000 1,144
1991 244,437 94,200 33,900 6,000 1,111
Robert J. Muth.......... 1993 264,000 -- 39,000 5,800 8,994
Vice President 1992 253,500 21,800 29,750 4,500 6,866
1991 248,917 29,200 25,425 4,700 6,667
Robert M. Novotny....... 1993 258,000 -- 41,600 6,500 8,994
Vice President 1992 244,500 26,100 31,875 5,000 6,866
1991 238,417 35,100 31,075 6,000 6,667
</TABLE>
- --------
(1) Dollar value of 1993 restricted stock awards is shown as of the date of
grant. The number and dollar value of shares of restricted stock holdings
owned at December 31, 1993 and still held by the Company subject to
restrictions are as follows: Mr. Osborne, 23,900 shares/$546,713; Mr.
McAllister, 7,540 shares/$172,478; Mr. Anderson, 5,500 shares/$125,813; Mr.
Kinsolving, 4,920 shares/$112,545; Mr. Muth, 3,580 shares/$81,893 and Mr.
Novotny, 4,060 shares/$92,873. Restrictions on such shares lapse in equal
installments over five years beginning with the grant dates which were in
June 1989, April 1990 and in January of 1991, 1992 and 1993. Dividends paid
on the shares of restricted stock are not subject to restrictions.
(2) Amounts shown reflect matching contributions made by the Company for the
named individuals under the Company's Savings Plan. The Plan is a qualified
defined contribution profit sharing plan available generally to all United
States salaried employees with one year of service with the Company. These
amounts are immediately vested and may be withdrawn subject to certain
restrictions, penalties and suspension periods.
(3) Retired as an officer effective December 14, 1993 and as an employee
effective January 31, 1994.
11
<PAGE>
OPTION GRANTS
Set forth below is further information on grants of stock options and related
stock appreciation rights ("SARs") under the Company's Stock Incentive Plan for
the period January 1, 1993 to December 31, 1993.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT
INDIVIDUAL GRANTS VALUE
----------------------------------------------- ----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS/SARS EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR PRICE $/SH DATE VALUE(2)
- ---- ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Richard de J. Osborne 27,000 14.5% $26.125 1/27/03 $175,395
Francis R. McAllister 12,000 6.4% $26.125 1/27/03 77,953
George W. Anderson 8,300 4.5% $26.125 1/27/03 53,918
Augustus B. Kinsolving 6,500 3.5% $26.125 1/27/03 42,225
Robert J. Muth 5,800 3.1% $26.125 1/27/03 37,677
Robert M. Novotny 6,500 3.5% $26.125 1/27/03 42,225
</TABLE>
- --------
(1) The options and SARs were awarded under the Company's 1990 stockholder-
approved Stock Incentive Plan. The option price per share equals the fair
market value of the Company's Common Stock on the date of grant. SARs are
granted in tandem with options, therefore the exercise of one cancels the
other. The options provide for limited rights exercisable upon the
occurrence of specified events that may materially affect the value of the
Company's Common Stock and are designated as such by the Committee that
administers the Plan, including a tender or exchange offer for shares of the
Company's Common Stock, the replacement of a majority of the Board as a
result of a proxy contest, a merger or reorganization of the Company, a
liquidation or dissolution of the Company. If an exercise event occurs, the
holder is entitled to receive the cash value of the options at the highest
market value that the shares traded over a period of sixty days preceding
the event or, in the event of the consummation of a tender offer, the tender
offer price.
(2) Based on the Black-Scholes option pricing model, a widely recognized method
of valuing options. The following assumptions were used in determining the
value of the options using the model: expected volatility of 26.19% based on
actual monthly volatility for the preceding five years, risk-free rate of
return of 5.68% based on the yield of the five year U.S. treasury notes as
of the grant date, annual dividend rate of $0.71 per share based on average
dividends paid per share over the preceding ten years, and exercise of the
option five years after the grant date. The actual value, if any, an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance the value realized by an executive will be at or near the value
estimated by the Black-Scholes model. The model is used for valuing market
traded options and is not directly applicable to valuing stock options
granted under the Company's Stock Incentive Plan which cannot be sold.
12
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Set forth below is information concerning stock option and SAR exercises by
named executive officers during 1993, including the aggregate value of gains
on the date of exercise, the number of shares covered by exercisable options
and the value of "in-the-money" options as of December 31, 1993. All
outstanding options were exercisable at December 31, 1993.
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND
DECEMBER 31, 1993 OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT YEAR OPTIONS/SARS
SHARES ACQUIRED VALUE END EXERCISABLE/ AT YEAR
NAME ON EXERCISE REALIZED UNEXERCISABLE (1) END(2)
---- --------------- -------- --------------------- ------------
<S> <C> <C> <C> <C>
Richard de J. Osborne... 1,099(3) $30,925 193,980 $55,679
Francis R. McAllister... -- -- 70,002 12,287
George W. Anderson...... -- -- 52,800 3,672
Augustus B. Kinsolving.. -- -- 39,400 3,516
Robert J. Muth.......... -- -- 24,000 --
Robert M. Novotny....... -- -- 21,500 --
</TABLE>
- --------
(1) The above officers held no unexercisable options or SARs at December 31,
1993.
(2) Based on the New York Stock Exchange--Composite Transactions price for the
Company's Common Stock of $22 7/8 on December 31, 1993.
(3) SARs were exercised 50% for stock and 50% for cash; net share acquisition
was 549 shares.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total return on the Company's Common Stock against the
cumulative total return of the S&P Composite-500 Stock Index and the S&P
Metals Miscellaneous Group Index for the five year period 1988 to 1993.
In 1985 the Company established a strategic plan to reduce costs and to
change the Company from a predominantly custom smelting and refining company
to an integrated producer of copper and lead. From 1985 through 1993, the
Company implemented cost reduction programs and spent over $900 million to
acquire new ore reserves and to expand and modernize its mining, smelting and
refining operations in order to achieve this objective. In 1987 the Company
reported profits for the first time since 1983. The Company also resumed its
dividend, which had been suspended in 1985 and 1986, at a level of $.10 per
share in the fourth quarter of 1987. The dividend was increased to $.20 per
share in the second quarter of 1988, to $.30 per share in the first quarter of
1989, and to $.40 per share in the second quarter of 1989.
By 1992, the Company had, in line with its objective of becoming an
integrated producer of copper and lead, increased its mine production of
copper concentrates to 100% of its smelter requirements as compared to 25% in
1985 and its mine production of lead concentrates for its Missouri lead
operations to 80% of its requirements as compared to 5% in 1985.
13
<PAGE>
In order to achieve these objectives, the Company increased capital spending
to $157 million in 1989, $237 million in 1990 and $283 million in 1991. In
1992, as this program was completed, capital expenditures was reduced to $135
million. In 1993, as the Company completed its copper smelter modernization and
expansion program at El Paso, Texas, capital spending was further reduced to
$112 million.
Despite the beneficial effects which are expected to result from these
expansion and modernization programs, the Company's earnings have been
adversely affected by higher interest costs and operating costs associated with
starting up certain of these new facilities, by heavy rains and flooding at two
of its copper mines in Arizona in late 1992 and early 1993 and by a substantial
decline in prices for the Company's principal metal products, copper, lead and
zinc. In response to these events in 1992 and 1993, the Company began a new
program in 1993 to lower spending and increase productivity at all of its
operations. The Company also began the sale of non-core assets and closure of
operations which did not meet the Company's profit expectations. In response to
lower earnings, the Company reduced its dividend to $.20 per share in the first
quarter of 1992 and to $.10 per share in the second quarter of 1993.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN (1)
ASARCO INCORPORATED, S&P 500 INDEX, AND S&P METALS MISC. GROUP INDEX (2)
S&P
METALS MISC.
ASARCO S&P 500 GROUP
--------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $100 $100 $100
FYE 12/31/89 $114.77 $131.69 $115.09
FYE 12/31/90 $110.83 $127.60 $109.32
FYE 12/31/91 $ 92.85 $166.47 $123.35
FYE 12/31/92 $112.11 $179.15 $132.34
FYE 12/31/93 $104.98 $197.21 $147.43
</TABLE>
(1) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
(2) ASSUMES $100 INVESTED ON 12/31/88 IN ASARCO COMMON STOCK, S&P 500 INDEX,
& S&P METALS GROUP INDEX
14
<PAGE>
The preceding chart analyzes Asarco's stock performance over the five year
period commencing December 31, 1988. For the first two years of this period,
through December 31, 1990, the total return on Asarco's stock was 10.8%
compared to that of the S&P Metals group, which was 9.3% and the S&P 500, which
was 27.6%. In the following two years of this period, through December 31,
1992, the total return on Asarco's stock declined to 1.2% compared to the total
return of the S&P Metals group, which was 21.1% and the S&P 500, which was
40.0%. Nevertheless, the total return for Asarco's stock for the one year
period ended December 31, 1992 improved to 20.7%, compared to the total return
for the S&P Metals Group, which was 7.3% and the S&P 500, which was 7.6%.
During 1993, Asarco's stock performance declined to a negative 6.4% for the one
year period ending December 31, 1993, compared to the total return for the S&P
Metals group of 11.4% and for the S&P 500 of 10.1%. The total return on
Asarco's stock over the five year period has remained positive.
RETIREMENT PLANS
The following table shows the estimated amount of annual retirement income
(calculated as a single life annuity benefit) payable to employees for life,
commencing at normal retirement at age 65 in 1994, under the Company's
qualified Retirement Benefit Plan for Salaried Employees ("Plan"), covering
substantially all salaried employees, a prior plan of the Company and a
supplemental retirement benefit plan (the "Supplemental Plan"). Benefits are
calculated using a final average earnings formula (i.e. average of the highest
consecutive 60 months of the last 120 months of compensation received "Average
Final Compensation"), minus a Social Security offset. The Supplemental Plan is
a non-qualified supplemental retirement benefit plan under which any benefits
not payable from Plan assets by reason of the limitations imposed by the
Internal Revenue Code of 1986, as amended (the "Code") and the loss due to the
deferrals of salaries made under the Company's Deferred Income Benefit System
are paid from the Company's general corporate funds. The table assumes Social
Security benefit levels as in effect on January 1, 1994.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
APPROXIMATE ANNUAL RETIREMENT BENEFITS
------------------------------------------------------
AVERAGE 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
FINAL COMPENSATION OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 400,000 $ 87,811 $117,082 $146,352 $175,622 $204,893
500,000 110,311 147,082 183,852 220,622 257,393
600,000 132,811 177,082 221,352 265,622 309,893
700,000 155,311 207,082 258,852 310,622 362,393
800,000 177,811 237,082 296,352 355,622 414,893
900,000 200,311 267,082 333,852 400,622 467,393
1,000,000 222,811 297,082 371,352 445,622 519,893
</TABLE>
15
<PAGE>
As of January 31, 1994, the following officers had completed the number of
years of service indicated opposite their names: Richard de J. Osborne, 19
years; Francis R. McAllister, 27 years; George W. Anderson, who retired as of
such date, 37 years; Augustus B. Kinsolving, 19 years; Robert J. Muth, 25 years
and Robert M. Novotny, 5 years. Under the Plan and Supplemental Plan, the
amounts of covered compensation of such persons for calendar year 1993 were
Richard de J. Osborne, $850,000, Francis R. McAllister, $421,100, George W.
Anderson, $352,000, Augustus B. Kinsolving, $290,100, Robert J. Muth, $285,800,
and Robert M. Novotny, $284,100 and consisted of basic salary and bonuses in
the year received as shown in the Summary Compensation Table and in prior proxy
statements.
Messrs. R. de J. Osborne, A.B. Kinsolving, R.J. Muth and R. M. Novotny are
eligible to receive additional benefits, not included in the amounts shown in
the table, under the Company's supplemental plan for designated officers hired
in mid-career (the "Mid-Career Plan"). The Mid-Career Plan provides
supplemental retirement benefits out of the general funds of the Company for
officers holding the rank of Vice President or higher who are determined by the
Organization and Compensation Committee to have had prior business or
professional experience valuable to the Company and relevant to the positions
for which they were employed by the Company, and who at retirement or
termination of employment with the consent of the Company will have been with
the Company as a Vice President or higher for 10 years or more. The Mid-Career
Plan provides for annual benefits equal to 55% of the Average Final
Compensation, which amount is reduced by any benefits payable by the Company or
any other employer under any other pension plan not attributable to the
employee's contributions, and by all Social Security benefits payable at the
time of retirement or early termination. All benefits under the Mid-Career Plan
are forfeited by a participant who prior to attaining age 65 terminates
employment with the Company without its consent.
EMPLOYMENT AGREEMENTS
The Company has employment agreements which provide for severance payments in
certain events to Messrs. Osborne, McAllister, Kinsolving, Muth and Novotny and
seven other key executive officers. The employment agreements are for a term of
one year, renewable automatically on a year-to-year basis unless terminated by
the Company at least 60 days prior to the anniversary date, except that they
continue in effect for not less than three years following occurrence of a
change in control of the Company. If, as a result of a change in control, the
executive's employment is terminated, his responsibilities are materially
reduced, or his salary, bonus or benefits are adversely affected, the executive
is entitled to receive from the Company as severance pay one lump-sum payment
equal to the total of three times such executive's average annual base salary
and incentive compensation payments received for the higher of the three or
five years immediately preceding the date of termination or the change in
control, and the annual cost to the Company of all the benefits such executive
is entitled to receive immediately preceding the date of termination. Upon
termination by the Company after a change in control, under the agreements each
executive is also entitled to payment from the Company of the value of such
executive's stock options. The amount of the severance payment from the Company
will also include an amount necessary to reimburse each executive for any
excise taxes imposed by the Code in respect of such payments. The employment
agreements also provide that following the occurrence of a potential change in
control of the Company each executive officer will remain in the employ of the
Company for 180 days. Under the agreements, change in control as to an
executive shall not be deemed to have occurred if the event first giving rise
to the change in
16
<PAGE>
control involves a publicly-announced transaction or publicly-announced
proposed transaction which at the time of the announcement has not been
previously approved by the Company's Board of Directors and the executive is
part of a purchasing group proposing the transaction. Also, there is deemed to
be no change of control as to an executive if the executive is part of a
purchasing group which consummates a change in control transaction.
CERTAIN TRANSACTIONS
During 1993, the Company, its subsidiaries and its associated company
Southern Peru Copper Corporation ("Southern Peru") engaged in transactions in
the ordinary course of their business with companies having an officer serving
as a director of the Company. Transactions comparable to the following occurred
prior to 1993, and similar transactions will occur during 1994. Management
believes these transactions to be on terms as favorable as could be obtained
from unaffiliated parties.
Regarding transactions with Texaco Inc. in the ordinary course of business,
see above under "Compensation Committee Interlocks and Insider Participation."
During 1993, the Company sold metal products and services to and purchased
furnace parts from subsidiaries of MIM, for an aggregate price of approximately
$2.8 million. Norman C. Fussell is Managing Director and Chief Executive
Officer of MIM.
During 1993, Southern Peru and subsidiaries of the Company purchased products
from and sold services to The BFGoodrich Company, of which John D. Ong is
Chairman and Chief Executive Officer, and its subsidiaries for an aggregate
price of approximately $7.1 million.
ADDITIONAL INFORMATION
The functions of the Organization and Compensation Committee of the Board of
Directors (composed of Messrs. Willard C. Butcher, Chairman, Harry Holiday,
Jr., James W. Kinnear and Michael T. Nelligan) include making recommendations
to the Board with respect to nomination and tenure policy for directors and
election of and title changes for all corporate executive officers. The
Committee considers recommendations for nominees to the Board of Directors from
all sources. Such recommendations should be sent in writing to the Secretary of
the Company. The Company's By-Laws define notice procedures to be followed by
stockholders seeking to nominate directors for election. Under the By-laws, a
stockholder seeking to nominate a director for election by shareholders must
give written notice to the Secretary of the Company at least 90 days in advance
of the anniversary date of the immediately preceding annual meeting, or within
10 days of the giving of notice of a special meeting. The notice must provide
specific biographical data with respect to each nominee, including such
information as is required to be included in the Company's proxy statement, and
a representation by the stockholder that he or she is a holder of record
entitled to vote at the meeting and that he or she intends to appear in person
or by proxy to make the nomination. Nominations for the Company's 1995 annual
meeting of stockholders must be received by January 27, 1995.
The Pension Advisory Committee of the Board of Directors (composed of Messrs.
David C. Garfield, Chairman, E. Gordon Gee, James R. Greene, Michael T.
Nelligan, John D. Ong and James Wood) reviews pension fund and savings plan
matters affecting directors, officers and employees of
17
<PAGE>
the Company and makes recommendations on such matters to the Board of
Directors. The Committee met two times during 1993.
The Board of Directors met nine times during 1993. All incumbent directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and of the Committees of the Board on which they served, except Peter
R. Rowland, who attended 67%, Willard C. Butcher, who attended 69% and James
Wood, who attended 71%.
Directors who are not officers or employees of the Company were paid in 1993
a basic fee of $22,000 plus $1,100 for attendance at each meeting of the Board
or of any Committee of the Board on which they served. The Company has a stock
award plan for non-employee directors providing for the award of 200 shares of
Asarco Common Stock per annum payable following each annual meeting to non-
employee directors who continue to serve or who are elected or reelected at
such meeting, or payable to non-employee directors who are first elected
between annual meetings or at a special meeting. The plan also allows incumbent
directors to forego their award for any year by giving irrevocable notice prior
to the start of such year or, in the case of new directors, by notice before
their election.
Directors may defer payment of fees payable for serving on the Board or a
Committee under the Deferred Fee Plan for Directors. Deferred compensation will
be credited with interest compounded quarterly at a floating rate equal to the
prime rate charged by The Chase Manhattan Bank, N.A. from the date on which it
would normally have been paid until payment or credited with a bookkeeping
entry in shares of Asarco Common Stock. In the case of cash or stock deferrals,
the value of a participant's deferred compensation is payable, at the
participant's election, in cash in a lump sum, or in annual installments
commencing on January 15 of any year subsequent to the fourth year following
the year in which such fees were earned. In any case, payment of the deferred
compensation will commence on January 15 of the year following termination of
services as a director. In the event of a participant's death, the value of the
participant's account is paid in a lump sum on the first January or July 15
following the participant's death unless the participant had elected to
continue the schedule for payment of benefits previously elected.
The Retirement Plan for Non-Employee Directors is a pension plan for
directors who do not participate in other retirement plans of the Company and
its subsidiaries and have at least five years of service as a director of the
Company. Benefits are payable out of the general funds of the Company and are
calculated at the time of retirement from the Board as a percentage of the
annual retainer paid to the director. Annual benefits equal 50% of the annual
retainer for directors with at least five years of service as Asarco directors
and are thereafter increased by 10% of such annual retainer for each additional
year of service preceding retirement, until they reach a maximum of 100%. Under
Asarco's current By-Laws a director is not eligible to serve on the Board
beyond the annual meeting of stockholders next following the director's 72nd
birthday. Benefits are not payable after the death of a director.
18
<PAGE>
PROPOSAL TO APPROVE THE SELECTION OF AUDITORS
Upon recommendation of its Audit Committee, the Board of Directors has
selected Coopers & Lybrand to serve as independent auditors for the Company for
the calendar year 1994, subject to approval of the stockholders. The Board of
Directors recommends that the stockholders approve the selection of Coopers &
Lybrand at the annual meeting. Coopers & Lybrand and its predecessors have
served as the Company's auditors continuously since 1935. Coopers & Lybrand
have advised the Company that neither the firm nor any of its members has any
direct or material indirect financial interest in the Company or its
subsidiaries.
The Audit Committee consists of Messrs. James R. Greene, Chairman, James C.
Cotting, David C. Garfield, E. Gordon Gee, Harry Holiday, Jr. and James W.
Kinnear. Three meetings were held in 1993. The functions of the Committee
include recommending the engagement of independent auditors, reviewing the
fees, scope and timing of their audit and their other services, and reviewing
the audit plan and results of the audit. The Committee also reviews the
Company's policies and procedures on internal auditing, accounting and
financial controls. The implementation and maintenance of internal controls are
understood to be primarily the responsibility of management.
A representative of Coopers & Lybrand will be present at the stockholders'
meeting. The representative will have an opportunity to make a statement and
will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Company's 1995
annual meeting of stockholders must be received by the Company at its principal
executive offices (180 Maiden Lane, New York, N.Y. 10038) by November 16, 1994
in order to be considered for inclusion in the Company's proxy statement and
form of proxy.
OTHER INFORMATION
The Company is not aware of any other matters to be considered at the
meeting. If any other matters properly come before the meeting, the persons
named in the enclosed form of proxy will vote said proxy in accordance with
their judgment on such matters.
A transcript of the proceedings of the 1993 annual meeting of stockholders
will be available after June 1, 1994 to any stockholder upon request to the
Secretary, specifying a proper purpose for the request, and upon payment of
$10.00 to cover the cost of postage and reproduction.
Asarco has adopted a confidential voting policy regarding shareholder votes
at Company shareholder meetings. Under the policy, shareholders' votes are kept
confidential by an independent inspector of election, who may be the transfer
agent, except as may be necessary to meet applicable legal requirements or to
respond to written comments on proxy cards. Each proxy solicited by the Board
which identifies the vote of a specific shareholder will be treated in
accordance with this policy unless
19
<PAGE>
the shareholder elects not to have such vote kept confidential. In the event of
a contested solicitation, if the Company and the opposing party can agree in
writing on mutually acceptable confidentiality procedures which would apply to
each party's solicitation, the Company agrees to be bound by the
confidentiality procedures set forth in such agreement. If the parties do not
agree on mutually acceptable confidentiality procedures, the Company's policy
on confidential voting shall not apply to the solicitation.
The Asarco confidential voting policy shall not operate to impair free and
voluntary communication between Asarco and its shareholders, including
voluntary disclosure by shareholders of the nature of their votes.
The cost of soliciting proxies in the accompanying form will be borne by the
Company. Morrow & Co., Inc. and Georgeson & Co. have been employed to solicit
proxies by mail, telephone or personal solicitation for fees to be paid by the
Company of $10,000 each, plus reasonable out-of-pocket expenses. A number of
regular employees of the Company, without additional compensation, may solicit
proxies personally or by mail or telephone.
ASARCO Incorporated
A.B. Kinsolving, Secretary
New York, N.Y., March 14, 1994
20
<PAGE>
Presented is a comparison of the performance of ASARCO Incorporated's Common
Stock for the last five years to that of the S & P 500 Index and the S & P
Metals Misc. Group Index, all as described in narrative form on page 15 of the
Proxy Statement.
<PAGE>
ASARCO INCORPORATED P R O X Y PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 27, 1994
The undersigned hereby appoints RICHARD DE J. OSBORNE, FRANCIS R.
McALLISTER and AUGUSTUS B. KINSOLVING, and each of them, with power of
substitution, the proxies of the undersigned to vote all the shares the
undersigned may be entitled to vote at the annual meeting of stockholders of
ASARCO Incorporated, to be held in the Ground Floor Auditorium, 1 Chase
Manhattan Plaza, New York, New York at 2 P.M., on Wednesday, April 27, 1994, and
at any adjournments thereof upon all matters specified in the notice of said
meeting as set forth on the reverse hereof, and upon such other business as may
lawfully come before the meeting.
Classified Board Election: For the nominees listed on the reverse
hereof, or such other person or persons, if any, as may be chosen to replace
unavailable nominees.
PLEASE VOTE ON ALL PROPOSALS, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued on the other side.)
<PAGE>
The shares represented by this proxy will be voted as directed by the
stockholder. If a signed proxy is returned to the Company with no voting
instructions given, such shares will be voted FOR all nominees for election as
directors and FOR Proposal No. 2. If you do not wish your shares voted FOR a
particular nominee, mark the Exception box and enter the name(s) of the
exception(s) in the space provided.
Class III Director Nominees: James C. Cotting, Norman C. Fussell, E. Gordon Gee
and James Wood.
- --------------------------------------------------------------------------------
Directors recommend a vote "For"
- --------------------------------------------------------------------------------
(1) Classified board election:
* Exception(s): .............................................................
[_] FOR [_] WITHHOLD [_] EXCEPTION*
- --------------------------------------------------------------------------------
Directors recommend a vote "For"
- --------------------------------------------------------------------------------
(2) Selection of Coopers & Lybrand as independent auditors for 1994.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark here to elect NOT to have your vote kept confidential
[_]
Please sign exactly as name or names appear on this proxy. If stock is held
jointly, each holder should sign. If signing as attorney, trustee, executor,
administrator, custodian, guardian or corporate officer, please give full title.
PROXY DEPARTMENT
New York, N.Y. 10203-0467
DATED ,1994
-------------------------
SIGNED
-----------------------------
-----------------------------
Votes must be indicated (X) in
Black or Blue as in this example. [X]
<PAGE>
ASARCO INCORPORATED
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
BECAUSE OF DELAYS IN MAIL
PLEASE SIGN AND RETURN THE
ENCLOSED PROXY EVEN IF YOU
RETURNED THE ORIGINAL
April 7, 1994
To the Stockholders of
ASARCO Incorporated
A REMINDER
We have previously sent to you proxy soliciting material relating to the
annual meeting of stockholders to be held on April 27, 1994.
According to our latest records, we have not as yet received your Proxy. The
time before the meeting is short and many of our shares are held in small
amounts. Your signed Proxy will be helpful, whether your holding is large or
small, and will aid us in avoiding further expense and delay.
A Proxy and return envelope are enclosed for your use.
Thank you for your cooperation.
Very truly yours,
A.B. Kinsolving
Secretary
PLEASE ACT PROMPTLY
