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PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
RMI TITANIUM COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
RMI TITANIUM COMPANY
- --------------------------------------------------------------------------------
(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(i)(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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* Set forth the amount of 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 date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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Notes:
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RMI TITANIUM COMPANY
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
April 26, 1995
1:00 P.M. Eastern Daylight Saving Time
Paonessa's
871 McKay Court
Boardman, Ohio
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TABLE OF CONTENTS
Page
Notice of Annual Meeting of Shareholders.... 3
Proxy Statement............................. 4
The Board of Directors.................... 4
Proposal No. 1 -- Election of Directors... 6
Nominees for Director................... 7
Continuing Directors.................... 8
Proposal No. 2 -- Election of Independent
Accountants................................. 9
Proposal No. 3 -- Amendment of Code of
Regulations................................. 9
Proposal No. 4 -- Approval of 1995 Stock
Plan....................................... 10
Other Information......................... 12
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<Logo>
1000 Warren Avenue
Niles, Ohio 44446
March 22, 1995
Dear Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders to
be held on April 26, 1995, at Paonessa's, 871 McKay Court, Boardman, Ohio at
1:00 P.M., Eastern Daylight Saving Time. Your Board of Directors and management
look forward to greeting personally those shareholders who are able to attend.
The meeting will begin with a report on Company operations followed by
discussion and voting on the matters set forth in the accompanying Notice of
Annual Meeting and other business matters properly brought before the meeting.
Whether or not you plan to attend, it is important that you vote your shares.
Please promptly read the Proxy Statement and then complete, sign, date and
return your proxy card in the enclosed prepaid envelope.
We look forward to seeing as many of you as possible at the 1995 Annual Meeting.
Sincerely,
L. FREDERICK GIEG, JR.
President and Chief Executive Officer
ROBERT M. HERNANDEZ
Chairman of the Board
<PAGE> 4
<Logo>
1000 Warren Avenue
Niles, Ohio 44446
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1995
The Annual Meeting of Shareholders of RMI Titanium Company will be held on
April 26, 1995, at 1:00 P.M., Eastern Daylight Saving Time, at Paonessa's, 871
McKay Court, Boardman, Ohio, for the following purposes:
1. To elect two directors, one in Class I and one in Class II.
2. To elect independent accountants for 1995.
3. To consider and act upon an amendment of the Code of Regulations of RMI
Titanium Company to provide for annual election of all directors.
4. To consider and act upon the RMI Titanium Company 1995 Stock Plan, said
Plan being described on pages 10 and 11 of the proxy statement dated March
22, 1995, and being set forth in full in Appendix A to said proxy
statement.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Shareholders of record as of the close of business on March 1, 1995, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
RICHARD M. HAYS
Secretary
Dated March 22, 1995
YOU ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED PREPAID ENVELOPE. THE GIVING OF THE ENCLOSED PROXY WILL NOT AFFECT YOUR
RIGHT TO REVOKE SUCH PROXY OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO
ATTEND THE MEETING.
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<PAGE> 5
RMI TITANIUM COMPANY
1000 Warren Avenue, Niles, Ohio 44446
March 22, 1995
PROXY STATEMENT
This proxy statement, which is to be mailed on or about March 22, 1995, is
furnished in connection with the solicitation of proxies by the Board of
Directors of RMI Titanium Company (the "Company") for use at the 1995 Annual
Meeting of Shareholders to be held on April 26, 1995, at the time, place and for
the purposes described in the accompanying Notice of Annual Meeting, and at any
adjournment thereof. On March 1, 1995, there were shares of Common
Stock of the Company outstanding and entitled to vote. Each share of Common
Stock is entitled to one vote. Shareholders whose names appeared of record on
the books of the Company at the close of business on March 1, 1995, will be
entitled to vote at the meeting. Shares cannot be voted at the meeting unless
the owner of record is present to vote or is represented by proxy.
Unless contrary instructions are indicated on the enclosed proxy, all shares
represented by valid proxies will be voted for the election of the nominees for
director named herein, for the election of Price Waterhouse LLP as independent
accountants for 1995, for Proposal No. 3 to amend the Company's Code of
Regulations and for Proposal No. 4 to approve the 1995 Stock Plan. Directors are
elected by a plurality of votes cast and independent accountants by a majority
of votes cast. Abstentions and broker non-votes are not counted in determining
the number of shares voted for or against the independent accountants or any
other voting matter except that since adoption of Proposal No. 3 to amend the
Company's Code of Regulations requires the affirmative vote of at least
two-thirds of the outstanding shares of the Common Stock, abstentions and broker
non-votes have the effect of a vote against the Proposal.
The Company knows of no business which may be presented for consideration at
the Annual Meeting other than as indicated in the Notice of Annual Meeting. If
any other business should properly come before the meeting, the persons named in
the proxy have discretionary authority to vote in accordance with their best
judgment. A proxy may be revoked by a shareholder at any time prior to its use
by a subsequent executed proxy, by giving notice of revocation to the Secretary
of the Company, or by voting in person at the Annual Meeting.
The cost of this solicitation of proxies will be borne by the Company. In
addition to soliciting proxies by mail, directors, officers and employees of the
Company, without receiving additional compensation therefor, may solicit proxies
by telephone, telegram, in person or by other means. Arrangements also will be
made with brokerage firms and other custodians, nominees and fiduciaries to
forward proxy solicitation material to the beneficial owners of shares of Common
Stock of the Company held of record by such persons and the Company will
reimburse such brokerage firms, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in connection therewith.
THE BOARD OF DIRECTORS
The Company is a successor to entities that have been operating in the
titanium industry since 1958. In 1990, USX Corporation ("USX") and Quantum
Chemical Corporation ("Quantum") transferred their entire ownership interest in
the Company's immediate predecessor, RMI Company, an Ohio general partnership,
to the Company in exchange for shares of the Company's Common Stock (the
"Reorganization")". Quantum then sold its shares to the public. USX retained
ownership of its shares. See "Other Information: Security Ownership-Security
Ownership of Certain Beneficial Owners and The Voting Trust Agreement". As used
herein, references to the "Company" include the Company, its predecessors,
including RMI Company, and its subsidiaries, unless the context otherwise
requires.
The business and affairs of the Company are under the general direction of a
Board of Directors as provided by the Code of Regulations of the Company and the
laws of the State of Ohio. The Board of Directors presently consists of nine
members, eight of whom are neither officers nor employees of the Company or its
subsidiaries. Three of the Board members are officers or employees of USX. The
Board of Directors met six times during 1994. Each of the directors attended
more than 75% of the total number of meetings of the Board
4
<PAGE> 6
of Directors and of the committees of the Board on which he served during 1994,
except for Mr. Gedeon who attended five of the eight (62.5%) such meetings.
There are four principal committees of the Board of Directors. Committee
membership, the functions of the committees and the number of meetings held
during 1994 are described below.
EXECUTIVE COMMITTEE
The members of the Executive Committee are Robert M. Hernandez (Chairman),
L. Frederick Gieg, Jr., Craig R. Andersson and Charles C. Gedeon.
The Executive Committee was established to assist the Board in the discharge
of its responsibilities and may act on behalf of the Board when emergencies or
scheduling make it difficult to convene all the directors. All actions taken by
the Committee must be reported at the Board's next meeting. During 1994, the
Executive Committee held one meeting.
AUDIT COMMITTEE
The members of the Audit Committee, which is composed entirely of directors
who are not employees of the Company, are Dan F. Huebner (Chairman), Craig R.
Andersson, William E. Lewellen and Wesley W. von Schack.
The Audit Committee makes recommendations to the Board of Directors
regarding the independent accountants to be nominated for election by the
shareholders and reviews the independence of such accountants, approves the
scope of the annual audit activities, approves the audit fee payable to the
independent accountants, reviews audit results and regularly meets with the
Company's internal auditors. The Committee monitors developments in accounting
standards and principles followed by the Company in its financial reports and
discusses with management the system of internal accounting controls. The
independent accountants have full and free access to the Committee and may meet
with it, with or without management being present, to discuss all appropriate
matters. The Audit Committee held four meetings during 1994.
ORGANIZATION AND COMPENSATION COMMITTEE
The members of the Organization and Compensation Committee, which is
composed entirely of directors who are not employees of the Company, are Neil A.
Armstrong (Chairman), Craig R. Andersson and Wesley W. von Schack.
The Organization and Compensation Committee makes recommendations to the
Board concerning the membership of the committees of the Board and general
executive management organization matters. The Committee is responsible for
recommendations to the Board on all matters of policy and procedures relating to
compensation of executive management, for approving the salaries of officers
(other than officer-directors whose salaries are approved by the Board) and for
administration of the Company's formal compensation plans, including the Annual
Incentive Compensation Plan, the 1989 Stock Option Incentive Plan and the 1989
Employee Restricted Stock Award Plan. The Committee makes recommendations to the
Board concerning policy matters relating to employee benefits and employee
benefit plans. In addition, the Committee makes recommendations to the Board
concerning its size and candidates for election as directors, including nominees
recommended by shareholders for election as director. Such recommendations,
together with the nominee's qualifications and consent to be considered as a
nominee, should be sent to the Secretary of the Company for presentation to the
Organization and Compensation Committee. The Organization and Compensation
Committee held two meetings during 1994.
FINANCE COMMITTEE
The members of the Finance Committee are William E. Lewellen (Chairman),
Neil A. Armstrong, Charles C. Gedeon, L. Frederick Gieg, Jr., Robert M.
Hernandez and Dan F. Huebner.
The Finance Committee makes recommendations to the Board concerning
dividends and matters of financial import, receives reports concerning certain
financial matters and has authority to approve certain borrowings by the
Company. The Finance Committee held one meeting during 1994.
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<PAGE> 7
COMPENSATION OF DIRECTORS
Directors who are officers or employees of the Company receive no fees or
remuneration, as such, for their services as directors. For so long as USX is a
shareholder, directors who are officers or employees of USX will accept no fees
or remuneration for their services as directors but participate in the 1989
Non-Employee Director Restricted Stock Award Plan (described below).
Non-employee directors receive an annual retainer plus a fee for each Board or
committee meeting attended, except that no fee is payable for attending a
committee meeting if there is a Board meeting on the same day. The annual
retainer is $22,500 and the meeting fee is $450. Each non-employee committee
chairman also receives an additional annual retainer of $2,500. One-half of the
annual retainer payable to non-employee directors and to non-employee committee
Chairmen is paid in the Company's common stock. In 1994, the common stock
utilized for this purpose was based on the market value of the stock on August
1, 1994.
The 1989 Non-Employee Director Restricted Stock Award Plan (the "Plan")
authorized the award of up to 15,000 shares of the Company's Common Stock,
subject to adjustment in certain circumstances, to the non-employee directors of
the Company. No further grants may be made under the Plan. The Plan provided
that on the date of each Annual Meeting of Shareholders of the Company, each
eligible director who is then a continuing or an elected director shall be
awarded 300 restricted shares. A person who becomes an eligible director after
an Annual Meeting will receive a grant of a pro rata portion of 300 shares based
on full months of service until the next Annual Meeting. Each of the incumbent
directors, other than Mr. Gieg, received a grant of 300 shares under the Plan
with respect to the 1994 Annual Meeting. Shares awarded under the Plan are
subject to a restriction providing that a participant shall not be permitted to
sell, transfer, pledge or assign awarded shares during the period commencing
with the date of an award and ending with the retirement of the participant from
the Board of Directors. Upon a participant's ceasing to remain a director of the
Company for any reason other than retirement, the participant's restricted
shares are forfeited. However, upon a participant's total disability or death,
the restrictions applicable to such participant's restricted shares
automatically lapse. Also, in the event of a change of control of the Company,
the restrictions with respect to a participant's shares will lapse.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Under the Code of Regulations of the Company, the directors are to be
divided into two or three classes. Each class must consist of no fewer than
three and no more than four directors, and shall consist, as nearly as possible,
of a like number of directors. At such time as there are nine or more directors,
or at such time as the number of directors is reduced to a number less than
nine, the Board of Directors shall take such action as it in its sole discretion
deems necessary to reconstitute or change the number and/or terms of the classes
of directors in order to comply with these requirements. The term of the current
Class II directors expires at the 1995 Annual Meeting of Shareholders. The terms
of the current Class III and the Class I directors will expire at the 1996 and
1997 Annual Meetings of Shareholders, respectively. A director elected to fill a
vacancy is elected to the same class as the director he succeeds, and a director
elected to fill a newly created directorship holds office until the next
election of the class to which such director is elected.
Two incumbent directors of the current Class II are nominees for election
this year. The other incumbent director from the current Class II, Dan F.
Huebner, is retiring from the Board effective as of the Annual Meeting.
Consequently the Board has determined to set the number of directors at eight
and reduce the number of classes of directors from three to two by eliminating
the current Class II and redesignating the current Class III as Class II, all
effective as of the 1995 Annual Meeting. The Board has further nominated
incumbent director William E. Lewellen for election as a Class II director and
incumbent director Craig R. Andersson for election as a Class I director. The
term of Class I directors will continue to expire in 1997 and that of new Class
II directors in 1996. Of the eight incumbent directors who are nominees for
election or continuing directors, one is a current officer of the Company and
the remaining seven have high level executive or professional experience. A
brief statement of the background of each nominee and each continuing director
is given on the following pages. If any nominee is unable to serve, proxies may
be voted for another person designated by the Board of Directors. The Company
has no reason to believe that any nominee will be unable to serve.
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<PAGE> 8
NOMINEE FOR DIRECTOR--TERM EXPIRES 1996
CLASS II (FORMERLY CLASS III)
WILLIAM E. LEWELLEN Age: 69
RETIRED SENIOR VICE PRESIDENT-FINANCE AND TREASURER Director since 1990
USX CORPORATION
Mr. Lewellen served as Senior Vice President-Finance and Treasurer of USX from
1982 until his retirement on September 30, 1990, and previously had served as a
Vice President of USX since 1976. He is a graduate of Bethany College and the
University of Louisville School of Law. Mr. Lewellen is a director of Pitt-Des
Moines, Inc. and Magee Women's Health Corporation, and is a trustee of Bethany
College. He is also a member of the Kentucky and Federal Bars and a life member
of Financial Executive Institute.
NOMINEE FOR DIRECTOR--TERM EXPIRES 1997
CLASS I
CRAIG R. ANDERSSON Age: 57
VICE-CHAIRMAN Director since 1990
ARISTECH CHEMICAL CORPORATION
(CHEMICAL PRODUCER)
Mr. Andersson is a director and became Vice-Chairman of Aristech Chemical
Corporation on January 1, 1994. Previously, he was President and Chief Operating
Officer, a position he had held since December 4, 1986. Mr. Andersson was
President of USS Chemicals Division of USX (the predecessor of Aristech) from
1985. He is a member of the American Institute of Chemical Engineers, The
Society of the Plastics Industry, The Society of the Chemical Industry, Chemical
Manufacturers Association and Alpha Chi Sigma (a chemical professional society).
He has a Bachelor of Science degree in chemical engineering from the University
of Minnesota.
CONTINUING DIRECTORS--TERM EXPIRES 1996
CLASS II (FORMERLY CLASS III)
CHARLES C. GEDEON Age: 54
EXECUTIVE VICE PRESIDENT-RAW MATERIALS Director since 1991
AND DIVERSIFIED BUSINESSES
U.S. STEEL GROUP, USX CORPORATION
Mr. Gedeon joined USX in 1986 as Vice President-Raw Materials and President of
U.S. Steel Mining Co., Inc. He was promoted to Senior Vice President-Related
Resources for USX in 1988 and advanced to the position of President, U.S.
Diversified Group in 1990. He assumed his current position in 1992. From 1983
until he joined USX, Mr. Gedeon had been Vice President-Operations of National
Steel Corporation. Mr. Gedeon is a member of the Board of Directors of the U.S.
Steel Group of USX Corporation and Zuari Agro Chemicals of India and a member of
the American Iron and Steel Institute.
L. FREDERICK GIEG, JR. Age: 63
PRESIDENT AND CHIEF EXECUTIVE OFFICER Director since 1990
OF THE COMPANY
Mr. Gieg has been President and Chief Executive Officer of the Company and its
predecessor since September 1, 1982. Previously, Mr. Gieg had been Vice
President and General Manager of the Western Steel Division of USS and Senior
Vice President of Manufacturing and Associated Subsidiaries of USX through
August 1982. He began his career with USX in June 1953. Mr. Gieg is a member of
the Board of Trustees of the United Way of Trumbull County; a member of the
Operating Board of Leadership Warren and of the Board of Trustees of Leadership
Youngstown; and past President and member of the Board of Directors of the
Titanium Development Association and National Multiple Sclerosis Society. He has
a BA degree from Dartmouth College and a degree from the Advanced Management
Program at Harvard University.
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LOUIS A. VALLI Age: 62
SENIOR VICE PRESIDENT-EMPLOYEE RELATIONS Director since 1993
USX CORPORATION
On June 1, 1989, Mr. Valli was elected Senior Vice President-Employee Relations
of USX. Mr. Valli was named Vice President-Benefits Administration on August 1,
1980, and was appointed Vice President-Personnel in 1982. He began his career
with USX in 1954. Mr. Valli is a trustee of Point Park College, a member of the
Board of Directors of Marathon Oil Company and of the Delhi Group of USX
Corporation and a member of the Labor Policy Association, the Personnel
Roundtable and the Association of Iron and Steel Engineers. He has a BA degree
in business administration from the University of Pittsburgh.
CONTINUING DIRECTORS--TERM EXPIRES 1997
CLASS I
NEIL A. ARMSTRONG Age: 64
CHAIRMAN, AIL SYSTEMS, INC. Director since 1990
(A DEFENSE ELECTRONICS COMPANY)
Mr. Armstrong received a BS degree in aeronautical engineering from Purdue
University and an MS degree in aerospace engineering from the University of
Southern California. For 17 years he served with the National Aeronautics and
Space Administration and its predecessor agency as engineer, test pilot,
astronaut and administrator. From 1971 to 1979 he was professor of aerospace
engineering at the University of Cincinnati. He became Chairman of Cardwell
International, Ltd. in 1980; Chairman of CTA, Inc. in 1982; and Chairman of AIL
Systems, Inc. in 1989. He is a director of Cinergy Corporation, Cincinnati
Milacron, Inc., Eaton Corporation, Thiokol Corp., and USX. He is a member of the
National Academy of Engineering.
ROBERT M. HERNANDEZ Age: 50
CHAIRMAN OF THE BOARD OF THE COMPANY Director since 1990
VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER
USX CORPORATION
On December 1, 1994, Mr. Hernandez was elected Vice Chairman of USX. Mr.
Hernandez had been elected Executive Vice President--Accounting & Finance and
Chief Financial Officer and director of USX on November 1, 1991. He was Senior
Vice President-Finance & Treasurer of USX from October 1, 1990, to October 31,
1991. Mr. Hernandez was President-U.S. Diversified Group of USX from June 1,
1989, to September 30, 1990, and in such role had responsibilities for USX's
businesses not related to energy and steel. From January 1, 1987, until May 31,
1989, he was Senior Vice President and Comptroller of USX. Mr. Hernandez has his
undergraduate degree from the University of Pittsburgh and his MBA from the
Wharton Graduate School of the University of Pennsylvania. In addition to being
a director of USX, he is a director of ACE Limited, Marinette Marine
Corporation, the Pittsburgh Baseball Club, Allegheny Health, Education and
Research Foundation, Allegheny General Hospital, the Pennsylvania Chamber of
Business and Industry and the Pennsylvania Business Roundtable.
WESLEY W. VON SCHACK Age: 50
CHAIRMAN OF THE BOARD, PRESIDENT AND Director since 1991
CHIEF EXECUTIVE OFFICER, DQE
(ENERGY SERVICE HOLDING COMPANY)
Mr. von Schack has been a director of DQE since 1989 and of Duquesne Light
Company since 1986 and is Chairman of the Board, President and Chief Executive
Officer of DQE and of Duquesne Light. DQE is the parent company of Duquesne
Light. He is also a director of Mellon Bank Corporation, Mellon Bank, N.A., the
Pennsylvania Business Roundtable and Duquesne University, a trustee of the
Pittsburgh Cultural Trust and a life trustee of Carnegie Mellon University. Mr.
von Schack has an AB in economics from Fordham University, an MBA from St.
John's University and a Doctorate Degree from Pace University.
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PROPOSAL NO. 2 -- ELECTION OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP has served as independent accountants for the Company
and its predecessors for a number of years. For the year 1994, Price Waterhouse
LLP rendered professional services in connection with the audit of the financial
statements of the Company and its subsidiaries, including examination of certain
employee benefit plans. It is knowledgeable about the Company's operations and
accounting practices and is well qualified to act in the capacity of independent
accountants.
Representatives of Price Waterhouse LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF PRICE WATERHOUSE
LLP AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR 1995.
PROPOSAL NO. 3--AMENDMENT OF CODE OF REGULATIONS
There will be presented to the meeting a proposal to amend the Company's
Code of Regulations, effective as of the 1996 Annual Meeting of Shareholders, to
provide for the annual election of all members of the Board of Directors. The
Board of Directors has authorized submitting such amendment to the shareholders
for their consideration and recommends a vote FOR the proposal.
GENERAL
As described in Proposal No. 1 above, the Company's Code of Regulations (the
"Regulations") currently provide that the directors are to be divided into two
or three classes, with each class to consist of no fewer than three and no more
than four directors. Under the Regulations, the Board is to consist of not less
than three or more than twelve directors. The Board has established the number
of classes as two and the number of directors as eight, both effective as of the
1995 Annual Meeting. The Board also has unanimously concluded to recommend to
the shareholders that they approve amending the Regulations to provide for the
annual election of each director, commencing with the 1996 Annual Meeting. Thus,
if the amendment is approved by the shareholders, at the 1996 Annual Meeting
each director shall be elected for a term expiring at the 1997 Annual Meeting.
This will provide more flexibility in establishing the number of directors from
time to time than is possible under the current Regulations. The Company has
shut down a number of its facilities in response to market conditions and has
taken a number of other steps to reduce costs. Decreasing the size of the Board
is one such step.
PROPOSED AMENDMENT
The Regulations will be amended, effective as of the 1996 Annual Meeting of
Shareholders, by substituting the following for the current Article II, Section
1(c):
"Each Director of the Corporation shall hold office until the next annual
meeting of the shareholders and until his successor is elected, or until his
earlier resignation, removal from office or death.
In the case of any increase in the number of Directors of the Corporation,
the additional Director or Directors shall be elected by the Board of
Directors."
VOTE REQUIRED
Approval of the proposed amendment of these Regulations will require the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Common Stock.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF PROPOSAL NO. 3.
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PROPOSAL NO. 4--APPROVAL OF 1995 STOCK PLAN
There will be presented to the meeting a proposal to approve a new 1995
Stock Plan in the form attached as Appendix A hereto to replace the 1989 Stock
Option Incentive Plan and the 1989 Employee Restricted Stock Award Plan. The
Board of Directors has adopted the Plan, effective as of April 26, 1995, subject
to approval by the shareholders and recommends a vote FOR the proposal.
GENERAL
The Plan would permit the grant of any or all of the following types of
awards in any combination or sequence: (a) Stock Options, (b) Stock Appreciation
Rights, and (c) Restricted Stock. Up to 2% of the outstanding common stock on
December 31 of the preceding year will be available for Grants during each
calendar year the Plan is in effect. On December 31, 1994, 15,271,561 shares
were outstanding, thus 305,431 shares will be available for Grant in 1995
assuming the Plan is approved by the shareholders. Any unused shares from prior
years will be available for Grant in subsequent years and Shares related to
Grants that are forfeited, terminated, cancelled, expire unexercised, settled in
cash in lieu of shares or in such manner that all or some of the shares covered
by the Grant are not issued to a participant shall immediately become available
under the Plan. At March , 1995, the closing price of a share of the Common
Stock on the New York Stock Exchange composite tape was $ .
As of March 1, 1995, 16,853 shares of Common Stock remain available for
option under the 1989 Stock Option Incentive Plan and 32,925 shares of Common
Stock remain available for grant under the 1989 Employee Restricted Stock Award
Plan. If the 1995 Plan is approved, no further options will be granted under the
1989 Stock Option Incentive Plan although options outstanding under the Plan
will not be affected. In addition no further grants will be made under the 1989
Employee Restricted Stock Award Plan.
The employees of the Company and its subsidiaries who are eligible for
participation under the Plan are those in responsible positions whose
performance in the judgment of the Committee administering the Plan may affect
the Company's success. It is expected that the approximately 35 employees,
including Messrs. Gieg, Odle and Rupert, who are eligible to participate in the
1989 Plans will initially be eligible for participation under the 1995 Plan.
Over the term of the 1995 Plan it is likely that other employees will become
eligible for participation but it is impossible to estimate their number at this
time.
The Committee appointed by the Board of Directors pursuant to the Plan (the
"Committee") shall administer the Plan. It shall determine the type or types of
Grants to be made under the Plan and shall set forth in each such Grant the
terms, conditions and limitations applicable to it, including provisions
relating to a possible change in control of the Company. The Committee shall
have full and exclusive power to interpret the Plan, to adopt rules, regulations
and guidelines relating to the Plan, to grant waivers of Plan restrictions and
to make all of the determinations necessary for its administration.
TYPES OF GRANTS
Options. The Committee may grant the right to purchase a specified number of
shares of common stock at not less than the fair market value at the date of the
Grant. All Options will be Non-Qualified Options. Payment of the purchase price
shall be made in cash or in such other form as approved by the Committee
including Common Stock valued at its fair market value on the date of the option
exercise.
An employee receiving the Option does not realize income under the Internal
Revenue Code upon the grant of the Option. The employee will generally realize
income at the time of exercise of the Option in the amount of the difference
between the option price and the fair market value of the Common Stock on the
date of exercise. The Company will be entitled to a tax deduction in an amount
equal to the amount of income realized by the employee.
Stock Appreciation Rights. The Committee may grant the right to receive a
payment in cash and/or Common Stock equal to the excess of the fair market value
of a share of Common Stock on the date the right is exercised over the fair
market value of a share on the date the right is granted for a specified number
of shares.
10
<PAGE> 12
An employee receiving the right does not realize income under the Internal
Revenue Code at the time of receipt of the right. The employee will realize
income upon the exercise of the right in the amount of the cash received and the
fair market value on the date of exercise of the Common Stock received. The
Company will be entitled to a tax deduction in the amount of such income
realized by the employee.
Restricted Stock. The Committee may award shares of Common Stock for no cash
consideration or for such other consideration as determined by the Committee.
All or part of the award may be subject to conditions including, but not limited
to, continuous service with the Company; achievement of business objectives;
individual, unit and Company performance and other criteria; and provisions for
forfeiture and restricting transfer.
An employee normally will not realize income under the Internal Revenue Code
upon the grant of Restricted Stock. Upon the termination of the restrictions
applicable to such stock, the employee will realize taxable income equal to the
fair market value of the shares of Common Stock at that time less any amount
paid by the employee. However, the employee may elect to realize income in the
year the Restricted Stock is awarded in an amount equal to the fair market value
of the shares of Common Stock awarded, less any amount paid by the employee,
determined without regard to the restrictions. The Company will be entitled to a
deduction in the same amount and at the same time the employee realizes income.
Dividends paid to the employee with respect to Restricted Stock constitute
compensation and are taxable to the employee and deductible by the Company.
AMENDMENTS
The Board of Directors may amend, suspend or terminate the Plan provided
that no such action may, without stockholder approval, increase the aggregate
number of shares of Common Stock available for grants under the Plan, decrease
the price of options or Stock Appreciation Rights, change the requirements
relating to the Committee or extend the 10-year term of the Plan. The Committee
may amend the terms and conditions applicable to outstanding grants consistent
with the Plan provided that no such action may modify the Grant in a manner
adverse to the participant without the participant's consent unless it is
provided for or contemplated in the terms of the Grant.
Other features of the Plan are included in the text of the Plan set forth in
Appendix A.
VOTE REQUIRED
Approval of the RMI Titanium Company 1995 Stock Plan will require the
affirmative vote of the holders of a majority of the shares present or
represented at the Annual Meeting and entitled to vote on this proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF PROPOSAL NO. 4.
11
<PAGE> 13
OTHER INFORMATION
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Company, as of March 1, 1995, no person or group
owned beneficially more than five percent of the outstanding Common Stock of the
Company except:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------- --------------------- ----------
<S> <C> <C>
USX Corporation.......................... 8,250,000(1) 54%
600 Grant Street
Pittsburgh, PA 15219-4776
Smith Barney Inc. and
Smith Barney Holdings Inc.............. 2,450,392(2) 16%
1345 Avenue of Americas
New York, NY 10105
The Travelers Inc.
65 East 55th Street
New York, NY 10022
<FN>
- ---------
(1) See "The Voting Trust Agreement" below.
(2) Based on Schedule 13G dated February 7, 1995 which indicates that
each reporting person had sole voting power over no shares, shared
voting power over 2,450,392 shares, sole dispositive power over no
shares and shared dispositive power over 2,450,392 shares.
</TABLE>
THE VOTING TRUST AGREEMENT
USX Corporation has entered into a Voting Trust Agreement ("Voting Trust
Agreement") with the Company effective August 4, 1994. Mellon Bank, N.A., is
also a party to the Voting Trust Agreement in its capacity as Trustee. The
Voting Trust Agreement provides that USX will deposit with the Trustee
sufficient shares of Common Stock so that the shares held by USX outside of the
trust do not exceed 49% of all shares of Common Stock then outstanding and are
at least one share less than the number of such shares owned by holders other
than USX and all of its Affiliates (as defined in Rule 405 of the Securities and
Exchange Commission). In addition, USX has agreed that if at any time during the
term of the Voting Trust Agreement (a) the sum of the number of shares of Common
Stock owned by USX and all of its Affiliates increases above the number of such
shares so owned immediately after completion of the Rights Offering, or (b) the
number of shares of Common Stock outstanding decreases below the number then
outstanding, then in each such event USX will promptly deposit with the Trustee
such number of additional shares of Common Stock, if any, as is necessary to
reduce the sum of the number of shares of Common Stock owned by USX and not held
by the Trustee in the voting trust and by all of USX's Affiliates to no more
than 49% of all shares of Common Stock then outstanding and at least one share
less than the total number of shares of Common Stock owned by holders other than
USX and its Affiliates (the "Public Stock"). USX may, but is not obligated to,
deposit in the trust additional shares of Common Stock from time to time.
Pursuant to the Voting Trust Agreement, the Trustee is obligated to cause
the shares of Common Stock which are deposited with it in the voting trust ("the
Trust Stock") to be present for purposes of determining a quorum at every
meeting of the holders of Common Stock. Whenever any vote of the holders of the
Common Stock is conducted at such a meeting, the Trustee is required not to vote
any of the Trust Stock with respect to any election of directors. With respect
to each matter on which a vote of the holders of Common Stock is conducted at
such meeting, other than the election of directors, the Trustee is required to
cause the Trust Stock to be voted "for," "against," or to abstain from voting,
in the same proportion as all shares of Common Stock, other than the Trust
Stock, are validly voted "for," "against," or abstain, as the case may be, with
respect to such matter. The Trustee is similarly required to consent in writing
to the taking of any action by the shareholders of the Company with respect to
such number of shares of the Trust Stock as equals the proportion of all shares
of Common Stock, other than the Trust Stock, as validly consents to such action.
The Company has agreed to recognize any proxy or written consent properly
delivered by the Trustee to it in connection with any such meeting or such
action and consistent with the Voting Trust Agreement as effective. Except as
set forth above, the Trustee shall not possess or be entitled to exercise any
right or power with
12
<PAGE> 14
respect to the Trust Stock, but shall instead act solely as directed by USX from
time to time with respect to the Trust Stock. In particular, but not in
limitation of the foregoing, USX may from time to time direct the Trustee to
tender shares of Trust Stock in connection with any tender, exchange or other
offer and to distribute the consideration received for such shares in any such
tender, exchange or other offer directly to USX free of the trust (unless such
consideration is shares of stock of the Company having ordinary voting power, in
which case such shares shall be retained by the Trustee and deemed to be Trust
Stock to the extent described above), and to exercise or sell for USX's benefit
and as USX shall direct any options, rights or warrants issued to the holders of
the Common Stock. USX may also direct the Trustee to sell shares of the Trust
Stock at any time in accordance with USX's directions, and any such shares sold
shall be sold free of the voting trust, provided that such sale shall be a bona
fide sale to a person other than an Affiliate of USX and that USX is not then in
default of any of its obligations under the Voting Trust Agreement. Any cash
dividends declared and paid upon the Trust Stock shall be paid to USX.
The Voting Trust Agreement and the voting trust created thereby shall
terminate on April 1, 2004, and are expressly declared to be irrevocable, except
that the Agreement and the voting trust may be terminated at any time (i) by USX
by written notice to the Trustee and the Company in the event the sum of the
number of shares of Common Stock owned by USX, including all the Trust Stock,
and all of its Affiliates, is less than 49% of all shares of Common Stock then
outstanding, (b) the total number of shares of Common Stock owned by USX,
including all the Trust Stock, is 80% or more of all shares of Common Stock then
outstanding, or (c) any person shall acquire more than 75% of the Public Stock,
and (ii) by the written election of the Trustee in its sole and absolute
discretion in the event it determines that the purpose for which the Voting
Trust Agreement has been entered and the voting trust has been created is no
longer applicable and that the continuation of the same serves no substantial
purpose. In the event the Company issues any of its currently authorized
Preferred Stock, which is entitled to ordinary voting rights in the same manner
as the Common Stock, such shares shall also be subject to the Voting Trust
Agreement, and the Trustee shall be required to act with respect to such shares,
in the same manner and to the same extent as Common Stock owned by USX.
As of March 1, 1995, USX has deposited 1,319,175 shares of Common Stock with
the Trustee under the Voting Trust Agreement.
SECURITY OWNERSHIP OF MANAGEMENT
The following table reflects the number of shares of Common Stock of the
Company beneficially owned, as of March 1, 1995, by each director, by each
executive officer named in the Summary Compensation Table and by all directors
and executive officers as a group:
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF OUTSTANDING
NAME SHARES(1) SHARES(2)
---- --------- -----------
<S> <C> <C>
Craig R. Andersson....................... 26,327 --
Neil A. Armstrong........................ 18,199 --
Charles C. Gedeon........................ 2,200 (3) --
L. Frederick Gieg, Jr.................... 40,000 --
Robert M. Hernandez...................... 16,830 (3) --
Dan F. Huebner........................... 17,099 --
William E. Lewellen...................... 8,989 --
Louis A. Valli........................... 2,860 (3) --
Wesley W. von Schack..................... 13,577 --
John H. Odle............................. 21,627 --
Timothy G. Rupert........................ 8,528 --
All directors and executive officers
as a group (11 persons)................ 176,236 1.2%
<FN>
- ---------
(1) Does not include 202,042, 105,643 and 66,877 shares, respectively, which
Messrs. Gieg, Odle and Rupert had the right to acquire under the Company's
1989 Stock Option Incentive Plan.
(2) No percent is shown for ownership of less than one percent.
(3) Messrs. Gedeon, Hernandez and Valli may be deemed to have shared voting
power over the shares of Common Stock beneficially owned by USX (other than
shares deposited with the Trustee under the Voting Trust Agreement). Each of
them disclaim beneficial ownership of such shares.
</TABLE>
13
<PAGE> 15
EXECUTIVE COMPENSATION
The following table shows the annual and long term compensation paid the
chief executive officer and the other two executive officers of the Company for
services rendered in all capacities to the Company and its subsidiaries in 1994,
1993 and 1992:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION -------------------------- ----------
----------------------------------- STOCK LONG TERM
OTHER RESTRICTED OPTIONS/ INCENTIVE
NAME AND ANNUAL STOCK SARS PLAN ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) (SHARES)(2) PAYOUTS COMPENSATION(1)
------------------ ---- -------- -------- ------------ ---------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
L. Frederick Gieg, Jr......... 1994 $259,367 $ -- $ -- $ -- 75,000(3) -$- $43,125
President and Chief 1993 251,109 -- -- 40,625 24,000 -- --
Executive Officer 1992 248,004 -- -- -- 40,000 -- --
John H. Odle.................. 1994 130,735 -- -- -- 40,000(3) -- 24,150
Senior Vice President- 1993 126,579 -- -- 22,750 12,500 -- --
Commercial and Research 1992 125,004 -- -- -- 20,000 -- --
Timothy G. Rupert............. 1994 107,834 -- -- -- 40,000(3) -- 20,700
Senior Vice President and 1993 103,104 -- -- 19,500 11,000 -- --
Chief Financial Officer 1992 103,104 -- -- -- 15,000 -- --
<FN>
- ---------
(1) Value of restricted stock granted in 1993 and vested in 1994.
(2) All stock options shown include stock appreciation rights ("SARs.")
(3) Does not include 127,042 shares, 65,643 shares and 26,877 shares covered by
unexercised options held by Messrs. Gieg, Odle and Rupert, respectively,
which were granted prior to 1994 and were repriced in 1994 to take into
account the one-for-ten reverse stock split effective March 31, 1994 and the
subsequent rights offering.
</TABLE>
The following tables set forth information with respect to Stock
Option/Stock Appreciation Rights Grants and Exercises in 1994 and December 31,
1994 Stock Option/Stock Appreciation Rights Values:
STOCK OPTION/SAR GRANTS IN 1994
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS/ OPTIONS/SARS APPRECIATION
SARS GRANTED TO EXERCISE OR FOR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME (SHARES)(1) 1994 ($/SH) DATE 5% 10%
---- ----------- ------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
L. Frederick Gieg, Jr.......... 75,000 20.7% $4.0625 10/27/04 $496,305 $720,283
John H. Odle................... 40,000 11.1% 4.0625 10/27/04 264,696 421,484
Timothy G. Rupert.............. 40,000 11.1% 4.0625 10/27/04 264,696 421,484
<FN>
- ---------
(1) All stock options shown include stock appreciation rights.
</TABLE>
14
<PAGE> 16
AGGREGATED STOCK OPTION/SAR EXERCISES IN 1994
AND DECEMBER 31, 1994 STOCK OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED UNEXERCISED
ACQUIRED ON OPTIONS/SARS AT IN-THE-MONEY
EXERCISE VALUE DECEMBER 31, 1994 OPTIONS/SARS AT
NAME (SHARES) REALIZED (SHARES)(1)(2) DECEMBER 31, 1994
---- ------------- ----------- -------------------- --------------------
<S> <C> <C> <C> <C>
L. Frederick Gieg, Jr........... -- $-- 202,042 $232,400
John H. Odle.................... -- -- 105,643 117,600
Timothy G. Rupert............... -- -- 66,877 92,750
<FN>
- ---------
(1) All stock options shown include stock appreciation rights.
(2) Adjusted for one-for-ten reverse stock split effective March 31, 1994 and
subsequent rights offering.
</TABLE>
ORGANIZATION AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Organization and Compensation Committee of the Board has furnished the
following report on executive compensation:
The Organization and Compensation Committee decides or recommends to the
Board for its decision all matters of policy relating to compensation of
executive management, approves the salaries of officers (other than the
president and chief executive officer whose salary is approved by the Board) and
administers the Annual Incentive Compensation Plan. The Committee also approves
grants of options, stock appreciation rights and restricted stock under, and
administers, the Company's 1989 Stock Option Incentive Plan and the 1989
Employee Restricted Stock Award Plan.
Compensation programs for the Company's executive officers are designed to
attract, retain and motivate employees who will contribute to achievement of
corporate goals and objectives. Elements of executive compensation include
salaries, incentive compensation awards and awards under the 1989 Stock Option
Incentive Plan and the 1989 Employee Restricted Stock Award Plan. The last three
of these elements are variable.
There has been a severe downturn in market conditions in the titanium
industry since 1990. The Company's management has had to contend with a number
of factors beyond their control such as aggressive international competition,
declining defense and commercial aerospace spending and an uncertain economy.
The Committee considers management performance in 1994 to have been excellent
under very difficult market conditions. Management took a number of steps which
cut operating costs and resulted in numerous efficiencies. Management also
aggressively pursued new product applications in the energy industry and
elsewhere. The progress to date in this area has been encouraging and management
intends to continue their diligent efforts in developing these new product
applications as well as their achieving additional improvement in operating
costs and efficiencies in serving the Company's traditional markets.
Management also did an outstanding job in connection with the very
successful rights offering. Preparation of the documents required for the
offering, responding to shareholder questions and concerns and describing the
Company's business and prospects to holders of the rights when they were
considering whether or not to exercise them involved substantial time and effort
on the part of executive management.
In making its decisions or recommendations, the Committee has had to take
into account the Company's financial results for the last three years, including
lack of profit and negative cash flow. The Committee has sought to recognize
management performance without unduly increasing the Company's current costs or
adversely affecting cash flow. Thus there have been only modest salary increases
and no bonuses during this period. Although the Committee did permit management
to reinstate in 1994 the salary increases which were suspended in 1993, in 1994
it again focused primarily upon non-cash awards under the Stock Option Incentive
Plan. The Committee believes that it is in the best interests of the
shareholders to align management's interests with theirs by providing
opportunities for increased stock ownership by management. In considering grants
or awards under this Plan, the Committee took into account the performance of
each executive officer and an assessment of the Company's performance against
the other two companies in the titanium industry shown in
15
<PAGE> 17
the performance graph. In addition, in considering relative awards under the
Stock Option and Restricted Stock Plans, the numbers of shares included in
option grants is diminished in the years (usually every 3 years) in which
restricted stock is awarded.
In 1994 the Committee made no grants of restricted stock to the executive
officers, but it did grant options to the executive officers for a larger number
of shares than in previous years. Each of these grants (except for the chief
executive officer) becomes exercisable in four equal annual installments
commencing one year from the date of grant, October 28, 1994. The chief
executive officer's stock option becomes exercisable in its entirety one year
from the date of grant. In determining the amount of these awards, the Committee
reviewed data included in a survey of companies of comparable size to the
Company made by the Hay Group, compensation consultants. It also took into
account past practice in relating the amount of stock and options awarded to
cash compensation as well as the individual performance of the executive
officers.
The compensation of the chief executive officer reflects the same elements,
and the Committee considered the same factors described above in determining the
chief executive officer's total compensation. In addition, the chief executive
officer's leadership and effectiveness in dealing with major corporate problems
and opportunities were considered. As noted above, the chief executive officer
received only a modest increase in cash compensation but did receive a stock
option grant which was larger than grants to him in previous years. The
Committee considered this action to be appropriate under the circumstances.
Neil A. Armstrong, Chairman Craig R. Andersson Wesley W. von
Schack
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative shareholder return on the Company's Common Stock with the
cumulative total return of the S&P 500 Stock Index and a titanium industry group
index consisting of the Company, Oregon Metallurgical Corporation and Tremont
Corporation. The graph commences October 29, 1990 since the Company's Common
Stock was not publicly traded until April 20, 1990 and Tremont Corporation
Common Stock first traded publicly on October 29, 1990.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG RMI, INDUSTRY PEER GROUP AND S&P 500
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TITANIUM RMI TITANIUM
(FISCAL YEAR COVERED) INDUSTRY COMPANY S&P 500
<S> <C> <C> <C>
OCT 1990 100 100 100
JAN 1991 115 112 110
JAN 1992 94 60 143
JAN 1993 62 40 154
JAN 1994 57 34 169
JAN 1995 94 51 171
</TABLE>
Assumes $100 invested on October 29, 1990 in RMI common stock, 3 major titanium
producers and S&P 500 Index.
* Total return assumes reinvestment of dividends.
16
<PAGE> 18
PENSION BENEFITS
The Company has two defined benefit plans, which first became effective at
RMI Company in 1971, in which substantially all salaried employees of the
Company and its subsidiaries automatically participate (the "Pension Plan"). The
Pension Plan recognizes, for certain purposes, services and compensation with
RMI Company, Reactive Metals, Inc. (a predecessor of RMI Company), USX, Quantum,
or subsidiaries of each. The amounts payable under the Pension Plan will be paid
monthly after a participant retires. The table below shows the annual pension
benefits for retirement at age 65 (or earlier under certain circumstances)
assuming no election of any dependent or surviving spouse feature, for various
levels of eligible earnings which would be payable to employees retiring with
representative years of service based on a formula of a specified percentage
(dependent on years of service) of average annual eligible earnings in the five
consecutive years of the ten years prior to retirement in which such earnings
are highest. Eligible compensation includes only base salary. Incentive awards
and similar benefits are excluded, although the amount of such benefits is
included on the Summary Compensation Table. Benefits payable under the Pension
Plan, and amounts reflected in the following table are subject to offsets for
social security benefits and, in certain instances, pensions payable under the
USX and the Quantum pension plans. As of December 31, 1994, Messrs. Gieg, Odle
and Rupert had 42, 17 and 26 credited years of service, respectively.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL GROSS BENEFITS PAYABLE FROM PENSION
PLANS
---------------------------------------------------------
AVERAGE
CONSECUTIVE ANNUAL BENEFITS FOR YEARS OF SERVICE
HIGHEST 5 YEARS OF ---------------------------------------------------------
COMPENSATION 10 15 30 40 45
- ------------------ ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 $12,500 $18,750 $ 37,500 $ 51,000 $ 57,750
200,000 25,000 37,500 75,000 102,000 115,500
300,000 37,500 56,260 112,500 153,000 173,250
</TABLE>
USX has agreed to provide Messrs. Gieg and Rupert, each a former employee of
USX, certain pension and death and disability benefits necessary to supplement
like benefits payable under the Company plans so that the aggregate of such
payments to each such person equals what he would have received had he remained
employed by USX.
USX maintains the USX Corporation Pension Plan for Employees (the "USX
Plan") which provides defined benefits for USX employees using a different
formula than that used by the Company plan described above. Upon their
retirement from the Company, Messrs. Gieg and Rupert will each receive a pension
from the Company Pension Plan and the USX Plan, with the benefits paid from the
USX Plan calculated on service with USX and USX subsidiaries prior to their
employment by the Company. The combined benefits payable annually to Messrs.
Gieg and Rupert under the USX Plan (which relates to employment by USX) and from
USX pursuant to the supplemental agreements described above, if they retire at
age 65 and if their compensation remains at current levels, would be
approximately $224,229 and $67,657, respectively.
SUPPLEMENTAL PENSION PLAN
Officers and key employees who participate in the Incentive Compensation
Plan are also eligible for the RMI Company Supplemental Pension Program
("Supplemental Pension"), which first became effective at RMI Company on August
1, 1987. Eligible employees who retire or otherwise terminate employment after
age 60, or prior to age 60 with Company consent, under conditions of eligibility
for an immediate pension under the terms of the Pension Plan will be entitled to
receive a Supplemental Pension. The annual Supplemental Pension (which is paid
in monthly installments following retirement), is equal to the product of (i)
the annual average of the total bonuses paid or credited to the participant
pursuant to the Incentive Plan on or after January 1, 1985, during the five
years in which total bonus payments or credits were the highest out of the last
ten consecutive years prior to retirement, multiplied by (ii) a percentage equal
to 1.5% multiplied by the employee's years of continuous service with USX,
Quantum, any subsidiary of either company, RMI Company and the Company. Bonuses
paid under the Annual Incentive Compensation Plan while it was maintained by RMI
Company as well as any bonuses paid under any successor cash incentive plan
adopted by the Company will be recognized for purposes of benefit calculations.
Upon retirement, a participant's Supplemental Pension will not be less than the
greatest benefit that the participant would have been entitled to at the end of
any earlier year in which he was eligible to participant in the plan if the
participant had retired at that time. Participants may elect to receive
17
<PAGE> 19
an actuarially equivalent lump sum payment in lieu of the monthly Supplemental
Pension. The Supplemental Pension Program also provides survivor benefits.
As of December 31, 1994, Messrs. Gieg, Odle and Rupert had 42, 17 and 26
credited years of service, respectively, for purposes of this plan.
RMI EXCESS BENEFITS PLAN
The Company's Excess Benefits Plan, adopted by the Board of Directors on
July 18, 1991, provides for payment to eligible participants of pension benefits
that would be payable under the Pension Plan were it not for certain benefit
limitations set forth in the Internal Revenue Code of 1986, as amended. Such
benefits are generally payable at the same time and in the same form as benefits
under the Pension Plan, except that a participant may elect to receive an
actuarially equivalent lump sum distribution at the time such benefit payments
would otherwise commence.
As of December 31, 1994, Mr. Gieg was the only participant in the Excess
Benefits Plan.
EMPLOYMENT CONTRACTS
Messrs. Gieg, Odle and Rupert each have an employment agreement with the
Company, expiring February 1, 1997, pursuant to which he will be paid an annual
salary as set forth in the agreement, subject to increases from time to time in
the sole discretion of the Company. Each agreement provides that in the event of
the executive's death, or if the executive's employment is terminated because of
physical or mental disability, the executive's right to compensation under such
agreement terminates. Each agreement also provides that the Company may
terminate the services of the executive for gross misconduct in the course of
such employment. The agreements also obligated the Company to make an
interest-free loan to the executive in an amount sufficient to enable the
executive to purchase the additional shares of Common Stock covered by the Basic
Subscription Privilege included in Rights issued with respect to Common Stock
owned by the executive at the time of the Rights Offering. The loans are
repayable by the executive in three equal annual installments. Pursuant to such
agreements, on July 5, 1994, the Company loaned $71,880, $39,220 and $14,600 to
Messrs. Gieg, Odle and Rupert, respectively. The agreements further provide that
each executive will not, for a period of 18 months after the end of the
employment period or employment termination, whichever occurs first, be employed
by, or otherwise participate in, any business which competes with the Company.
CERTAIN TRANSACTIONS
The Company, in the ordinary course of business, purchases goods and
services from USX. The cost of such transactions to the Company in 1994 amounted
to approximately $386,000.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the 1996 Annual
Meeting of Shareholders must be received no later than November 22, 1995, for
inclusion in the proxy statement and proxy for that meeting.
By Order of the Board of Directors
RICHARD M. HAYS
Secretary
Dated: March 22, 1995
18
<PAGE> 20
APPENDIX A
RMI TITANIUM COMPANY
1995 STOCK PLAN
1. Objectives. The RMI Titanium Company 1995 Stock Plan (the "Plan") is
designed:
(a) to promote the long-term financial interests and growth of the
Company and its subsidiaries by attracting and retaining management
personnel with the training, experience and ability to enable them to make a
substantial contribution to the success of the Company's business;
(b) to motivate management personnel by means of growth-related
incentives to achieve long-range growth goals; and
(c) to further the identity of interests of participants with those of
the shareholders of the Company through opportunities for increased stock
ownership in the Company.
2. Definitions.
(a) Board. The Board of Directors of RMI Titanium Company;
(b) Committee. A Committee of at least three directors appointed by the
Board to take action under this Plan.
(c) Company. RMI Titanium Company (RMI) and its subsidiaries.
(d) Fair Market Value. Such value of a Share as reported for stock
exchange transactions and determined in accordance with any applicable
resolutions or regulations of the Committee in effect at the relevant time;
(e) Grant. A Grant made under the Plan to a Participant in the form of
an Option, Stock Appreciation Right or Restricted Stock or any combination
thereof;
(f) Participant. An employee of the Company to whom a Grant is made;
and
(g) Share. A share of Common Stock of RMI which may be authorized but
unissued or issued and reacquired.
3. Eligibility. Employees of the Company eligible for a Grant under the
Plan are those in responsible positions whose performance, in the judgment of
the Committee, may affect the Company's success.
4. Administration. The Plan shall be administered by the Committee which
shall be constituted to permit the Plan to comply with Rule 16b-3 promulgated
under the Securities and Exchange Act of 1934 or any successor rule. The
Committee shall determine the type or types of Grants to be made to each
Participant and shall set forth in such Grant the terms, conditions and
limitations applicable to it, including provisions relating to change in control
of the Company. Grants may be made singly, in combination or in tandem. The
Committee shall have full and exclusive power to interpret the Plan, to adopt
rules, regulations and guidelines relating to the Plan, to grant waivers of Plan
restrictions and to make all of the determinations necessary for its
administration.
5. Shares Subject to the Plan. Up to 2% of the outstanding Common Stock as
determined on December 31 of the preceding year, shall be available for Grants
during each calendar year in which the Plan is in effect. Shares related to
Grants that are forfeited, terminated, cancelled, expire unexercised, settled in
cash in lieu of stock or in such manner that all or some of the Shares covered
by a Grant are not issued to a Participant shall immediately become available
for Grants. Any unused portion of the percentage limit of common stock in any
calendar year shall be carried forward and available for Grants in succeeding
calendar years.
6. Delegation of Authority. The Committee may delegate to the Stock Option
Officer and to other senior officers of the Company its duties under the Plan
subject to such conditions and limitations as the Committee shall prescribe
except that only the Committee may designate and make Grants to Participants who
are subject to Section 16 of the Securities and Exchange Act of 1934.
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<PAGE> 21
7. Options. A right to purchase a specified number of Shares at not less
than 100% of Fair Market Value on the date of the Grant. All Options will be
Non-Qualified Options. Full payment for Shares purchased shall be made at the
time of the exercise of the Option, in whole or in part. Payment of the purchase
price shall be made in cash or in such other form as the Committee may approve,
including Shares valued at the Fair Market Value of the Shares on the date of
exercising the Option.
8. Stock Appreciation Rights. A right to receive a payment in cash and/or
Shares equal to the excess of the Fair Market Value of a Share on the date the
Stock Appreciation Right (SAR) is exercised over the Fair Market Value of a
Share at the date of the SAR Grant for a specified number of Shares.
9. Restricted Stock. An award of Shares for no cash consideration, if
permitted by applicable law, or for such other consideration as determined by
the Committee. All or part of the award may be subject to conditions including,
but not limited to, continuous service with the Company; achievement of business
objectives; individual, unit and Company performance and other criteria; and
provisions for forfeiture and restricting transfer. Subject to such forfeiture
and transfer restriction provisions as may be established by the Committee, any
Participant receiving an award shall have all the rights of a shareholder of the
Company with respect to Shares of Restricted Stock, including the right to vote
the Shares and the right to receive any cash dividends thereon.
10. Transfer. No Grant may be assigned, pledged or transferred other than
by will or by the laws of descent and distribution and during a Participant's
lifetime shall be exercisable only by the Participant or his or her guardian or
legal representative.
11. Adjustments. In the event of any change in the outstanding Common Stock
of RMI by reason of a stock split, stock dividend, stock combination or
reclassification, recapitalization or merger, or similar event, the Committee
may adjust appropriately the number of Shares available for or covered by Grants
and Share prices related to outstanding Grants and make such other revisions to
outstanding Grants as it, in its discretion, deems appropriate.
12. Tax Withholding. RMI shall have the right to deduct applicable taxes
from any cash payment under the Plan which are required to be withheld and
further to condition the obligation to deliver or the vesting of Shares under
the Plan upon the Participant paying RMI such amount as it may request to
satisfy any liability for applicable withholding taxes. Grants under the Plan
may provide that Participants may elect to have RMI withhold Shares to satisfy
all or part of their withholding liability with the value of such withheld
Shares based upon the Fair Market Value on the date the tax withholding is
required to be made.
13. Amendments. The Committee shall have the authority to make such
amendments to any terms and conditions applicable to outstanding Grants as are
consistent with this Plan provided that, except for adjustments under Paragraph
11 hereof, no such action shall modify such Grant in a manner adverse to the
Participant without the Participant's consent except as such modification is
provided for or contemplated in the terms of the Grant.
The Board may amend, suspend or terminate the Plan except that no such
action may be taken which would, without shareholder approval, or except as
permitted pursuant to Paragraph 11, increase the aggregate number of Shares
available for Grants under the Plan, decrease the price of Options or SARs,
change the requirements relating to the Committee or extend the term of the
Plan.
14. Effective and Termination Dates. The Plan shall be effective on the
date it is approved by the shareholders of RMI and shall terminate ten years
later, subject to earlier termination by the Board pursuant to Paragraph 13.
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<PAGE> 22
RMI TITANIUM COMPANY
1000 WARREN AVENUE, NILES, OHIO 44446
PROXY FOR 1995 ANNUAL MEETING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RMI TITANIUM COMPANY
The undersigned hereby appoints L. FREDERICK GIEG, JR., ROBERT M. HERNANDEZ
AND RICHARD M. HAYS, or any of them, proxies to vote all shares of Common Stock
which the undersigned is entitled to vote with all powers which the undersigned
would possess if personally present, at the Annual Meeting of Shareholders of
RMI Titanium Company on April 26, 1995, and any adjournments thereof, upon such
matters as may properly come before the meeting. SHAREHOLDERS ARE REQUESTED TO
COMPLETE, DATE AND SIGN THIS PROXY CARD AND TO RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
PLEASE COMPLETE, DATE AND SIGN THE REVERSE SIDE.
FOLD AND DETACH HERE
<PAGE> 23
THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION TO THE CONTRARY IS INDICATED, IT WILL BE VOTED "FOR" ALL
PROPOSALS.
The Board of Directors recommends a Vote FOR:
<TABLE>
<C> <S> <C>
1. Proposal No. 1--Election of William E. Lewellen as a Class II director and Craig R. Andersson as a Class I director.
FOR WITHHELD (To withhold authority for any individual nominee, write that nominee's name in the space below:
all nominees from all
0 0 -----------------------------------------------------------------------------------------------.)
2. Proposal No. 2--Election of Price Waterhouse 3. Proposal No. 3--Amendment of 4. Proposal No. 4--Approval
LLP as independent accountants for 1995. Code of Regulations. of 1995 Stock Plan.
For Against Abstain For Against Abstain For Against Abstain
0 0 0 0 0 0 0 0 0
</TABLE>
Dated: _____________________________________, 1995
(Signature or Signatures)
_________________________________________________
_________________________________________________
Please sign EXACTLY as your name appears hereon.
When signing as a fiduciary or corporate officer,
give full title. Joint owners should both sign.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE
AND SIGN THE ABOVE PROXY CARD AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE.
