<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
RMI TITANIUM COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
RMI TITANIUM COMPANY
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
<PAGE> 2
RMI TITANIUM COMPANY
LOGO
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
April 25, 1996
1:00 P.M. Eastern Daylight Saving Time
Paonessa's
871 McKay Court
Boardman, Ohio
-----------------------------------------------
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................... 6
Proposal No. 2 -- Election of Independent
Accountants............................. 8
Other Information......................... 9
-----------------------------------------------
<PAGE> 3
LOGO 1000 Warren Avenue
Niles, Ohio 44446
March 28, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders to
be held on April 25, 1996, 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 election of directors and independent accountants.
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 1996 Annual Meeting.
Sincerely,
/s/ L. FREDERICK GIEG, JR.
- -------------------------------------
L. FREDERICK GIEG, JR.
President and Chief Executive Officer
/s/ ROBERT M. HERNANDEZ
- -------------------------------------
ROBERT M. HERNANDEZ
Chairman of the Board
<PAGE> 4
LOGO 11000 Warren Avenue
Niles, Ohio 44446
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
The Annual Meeting of Shareholders of RMI Titanium Company will be held on
April 25, 1996, at 1:00 P.M., Eastern Daylight Saving Time, at Paonessa's, 871
McKay Court, Boardman, Ohio, for the following purposes:
1. To elect eight directors.
2. To elect independent accountants for 1996.
3. 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, 1996, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
RICHARD M. HAYS
Secretary
Dated: March 28, 1996
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.
3
<PAGE> 5
RMI TITANIUM COMPANY
1000 Warren Avenue, Niles, Ohio 44446
March 28, 1996
PROXY STATEMENT
This proxy statement, which is to be mailed on or about March 28, 1996, is
furnished in connection with the solicitation of proxies by the Board of
Directors of RMI Titanium Company (the "Company") for use at the 1996 Annual
Meeting of Shareholders to be held on April 25, 1996, at the time, place and for
the purposes described in the accompanying Notice of Annual Meeting, and at any
adjournment thereof. On March 1, 1996, there were 15,393,532 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, 1996, 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 and for the election of Price Waterhouse LLP as
independent accountants for 1996. 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.
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 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. One incumbent director, Louis A. Valli, is retiring from the Board
effective as of the Annual Meeting. Consequently, the Board has set the number
of directors at eight effective as of the Annual Meeting. The Board of Directors
met four times during 1995. Each of the directors attended more than 80% of the
total number of meetings of the Board of Directors and of the committees of the
Board on which he served during 1995.
4
<PAGE> 6
The Board of Directors will consider recommendations by shareholders for
nominees 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 Board of Directors.
There are three principal committees of the Board of Directors. Committee
membership, the functions of the committees and the number of meetings held
during 1995 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 the Board. All actions taken by the
Committee must be reported at the Board's next meeting. During 1995, the
Executive Committee held no meetings.
AUDIT COMMITTEE
The members of the Audit Committee, which is composed entirely of directors
who are not employees of the Company, are Wesley W. von Schack (Chairman), Craig
R. Andersson and Daniel I. Booker.
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 1995.
STOCK PLAN COMMITTEE
The members of the Stock Plan Committee, which is composed entirely of
directors who are not employees of the Company, are Craig R. Andersson, Neil A.
Armstrong, Daniel I. Booker, Ronald L. Gallatin and Wesley W. von Schack.
The Stock Plan Committee is responsible for administration of the Company's
stock-related plans, including the 1989 Stock Option Incentive Plan, the 1989
Employee Restricted Stock Award Plan and the 1995 Stock Plan. The Stock Plan
Committee held one meeting during 1995.
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. 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 1995, the Common Stock utilized for this purpose was
based on $8.0625, the market value of the stock on August 2, 1995.
SECTION 16 REPORTING
L. Frederick Gieg, Jr., President and Chief Executive Officer of the
Company, was late in filing one Form 4 report required pursuant to Section 16 of
the Securities Exchange Act of 1934 for one transaction in the Company's Common
Stock.
5
<PAGE> 7
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Code of Regulations of the Company was amended by the shareholders at
the 1995 Annual Meeting to provide for the annual election of all members of the
Board of Directors effective as of the 1996 Annual Meeting. As mentioned above,
Mr. Valli is retiring from the Board effective as of the Annual Meeting.
Consequently, the Board has nominated eight of the nine incumbent directors for
election this year. Each director elected shall hold office until the next
annual meeting of the shareholders or until a successor is elected. Of the eight
individuals who are nominees for election, 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 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.
NOMINEES FOR DIRECTOR
CRAIG R. ANDERSSON Age: 58
RETIRED VICE-CHAIRMAN Director since 1990
ARISTECH CHEMICAL CORPORATION
(CHEMICAL PRODUCER)
Mr. Andersson retired as a director and Vice-Chairman of Aristech Chemical
Corporation on April 30, 1995. 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 director of Albermarle Corporation and Duquesne University. He is
a member of the American Institute of Chemical Engineers and Alpha Chi Sigma (a
chemical professional society) and has served on the boards and executive
committees of The Society of the Chemical Industry, the Chemical Manufacturers
Association, the Pennsylvania Business Roundtable and the Greater Pittsburgh
Chamber of Commerce. He has a Bachelor of Science degree in chemical engineering
from the University of Minnesota and did graduate work in the same discipline at
the University of Delaware.
NEIL A. ARMSTRONG Age: 65
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.
DANIEL I. BOOKER Age: 48
MANAGING PARTNER Director since 1995
REED SMITH SHAW & MCCLAY
(LAW FIRM)
Mr. Booker is a partner of the law firm of Reed Smith Shaw & McClay. Since 1992,
he has been Managing Partner, or chief executive, of Reed Smith. He received an
undergraduate degree from the University of Pittsburgh and a law degree from the
University of Chicago. He is a member of the District of Columbia, Pennsylvania
and U.S. Supreme Court bars. Mr. Booker is an officer and/or director of Penn's
Southwest Association, the Pittsburgh Civic Light Opera, United Way of
Southwestern Pennsylvania and other community and professional organizations.
6
<PAGE> 8
RONALD L. GALLATIN Age: 50
RETIRED MANAGING DIRECTOR Director since 1996
LEHMAN BROTHERS INC.
(INVESTMENT BANKING FIRM)
Mr. Gallatin served as a Managing Director of Lehman Brothers Inc., where he was
a member of the Firm's Operating Committee and its Director of Corporate
Strategy and Product Development until his retirement on December 31, 1995.
During his 24 years with Lehman, Mr. Gallatin had various senior roles in both
its investment banking and capital markets divisions and was responsible for a
series of financial innovations, most notably Zero Coupon Treasury Receipts,
Money Market Preferred Stock, and Targeted Stock. He is currently a Senior
Advisor to Lehman Brothers Inc. and a director of Gabelli Securities, Inc. A
graduate of New York University, and both Brooklyn and New York University Law
Schools, Mr. Gallatin has BS, JD and LLM (Taxation) degrees and is a Certified
Public Accountant.
CHARLES C. GEDEON Age: 55
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 a member of the American Iron and Steel
Institute.
L. FREDERICK GIEG, JR. Age: 64
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.
ROBERT M. HERNANDEZ Age: 51
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 trustee of Compass Capital Funds and a director of
ACE Limited, Marinette Marine Corporation, Allegheny Health, Education and
Research Foundation, Allegheny General Hospital, the Pennsylvania Chamber of
Business and Industry and the Pennsylvania Business Roundtable.
7
<PAGE> 9
WESLEY W. VON SCHACK Age: 51
CHAIRMAN OF THE BOARD, PRESIDENT AND Director since 1991
CHIEF EXECUTIVE OFFICER, DQE, INC.
(ENERGY SERVICES 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, Chairman of the Board
of Trustees of the Pittsburgh Cultural Trust, Chairman of the Board of the
Regional Industrial Development Corporation 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.
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 1995, 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 1996.
8
<PAGE> 10
OTHER INFORMATION
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Company, as of March 1, 1996, 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............................. 7,783,600(1) 50.5
600 Grant Street
Pittsburgh, PA 15219-4776
Smith Barney Inc............................ 2,394,471(2) 15.6
Smith Barney Holdings Inc.
Travelers Group Inc.
338 Greenwich Street
New York, NY 10013
Husic Capital Management.................... 775,100(3) 5.1
Frank J. Husic and Co.
Frank J. Husic
555 California Street, Suite 2900
San Francisco, CA 94104
</TABLE>
- ---------
(1) See "The Voting Trust Agreement" below.
(2) Based on Schedule 13G dated January 25, 1996 which indicates that
each reporting person had sole voting power over no shares, shared
voting power over 2,394,471 shares, sole dispositive power over no
shares and shared dispositive power over 2,394,471 shares.
(3) Based on Schedule 13G dated January 15, 1996 which indicates that
each reporting person had sole voting power over no shares, shared
voting power over 766,700 shares, sole dispositive power over no
shares and shared dispositive power over 775,100 shares.
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 as of August 4, 1994, or (b) the number of shares of
Common Stock outstanding decreases below the number outstanding as of August 4,
1994, 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
9
<PAGE> 11
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 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, 1996, USX has deposited 1,319,175 shares of Common Stock with
the Trustee under the Voting Trust Agreement.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table reflects the number of shares of Common Stock of the
Company beneficially owned, as of March 1, 1996, 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....................... 27,722 --
Neil A. Armstrong........................ 11,914 --
Daniel I. Booker......................... 2,000 --
Ronald L. Gallatin....................... 2,000 --
Charles C. Gedeon........................ 1,220(3) --
L. Frederick Gieg, Jr.................... 248,687 1.6%
Robert M. Hernandez...................... 16,830(3) --
Louis A. Valli........................... 2,860 --
Wesley W. von Schack..................... 15,042 --
John H. Odle............................. 99,270 --
Timothy G. Rupert........................ 32,525 --
All directors and executive officers
as a group (11 persons)................ 460,070 2.6%
</TABLE>
10
<PAGE> 12
- ---------
(1) Includes 182,042 shares, 67,643 shares and 10,000 shares, respectively,
which Messrs. Gieg, Odle and Rupert had the right to acquire within 60 days
under the Company's 1989 Stock Option Incentive Plan.
(2) No percent is shown for ownership of less than one percent.
(3) Messrs. Gedeon and Hernandez 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
disclaims beneficial ownership of such shares.
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 1995,
1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------
PAYOUTS
ANNUAL COMPENSATION AWARDS ----------
----------------------------------- -------------------------- LONG TERM
OTHER RESTRICTED STOCK INCENTIVE
NAME AND ANNUAL STOCK OPTIONS PLAN ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) (SHARES) PAYOUTS COMPENSATION(1)
------------------ ---- ------ ----- ------------ --------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
L. Frederick Gieg, Jr....... 1995 $260,400 $ 70,000 $ -- $ -- -- $ -- $ --
President and Chief 1994 259,367 -- -- -- 75,000(2) -- 43,125
Executive Officer 1993 251,109 -- -- 40,625 24,000 -- --
John H. Odle................ 1995 131,256 35,000 -- -- -- -- --
Senior Vice President- 1994 130,735 -- -- -- 40,000(2) -- 24,150
Commercial and Research 1993 126,579 -- -- 22,750 12,500 -- --
Timothy G. Rupert........... 1995 108,264 30,000 -- -- -- -- --
Senior Vice President and 1994 107,834 -- -- -- 40,000(2) -- 20,700
Chief Financial Officer 1993 103,104 -- -- 19,500 11,000 -- --
</TABLE>
- ---------
(1) Value of restricted stock granted in 1993 and vested in 1994.
(2) 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.
There were no stock option grants in 1995. The following table sets forth
information with respect to stock option exercises in 1995 and December 31, 1995
stock option values:
AGGREGATED STOCK OPTION EXERCISES IN 1995
AND DECEMBER 31, 1995 STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
SHARES DECEMBER 31, 1995 OPTIONS AT
ACQUIRED ON (SHARES)(1) DECEMBER 31, 1995
EXERCISE VALUE ---------------------------- ----------------------------
NAME (SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. Frederick Gieg, Jr............ 20,000 $ 120,250 182,042 -- $504,538 --
John H. Odle..................... 8,000 48,100 67,643 30,000 157,414 118,125
Timothy G. Rupert................ 26,877 140,975 10,000 30,000 39,375 118,125
</TABLE>
- ---------
(1) Adjusted for one-for-ten reverse stock split effective March 31, 1994 and
subsequent rights offering.
11
<PAGE> 13
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
1995 was a year of transition for the Company in a number of respects. After
an extensive review by the Board of Directors of a number of governance matters,
including executive compensation policies, programs and procedures, several
actions were taken. The Organization and Compensation Committee of the Board
which had previously handled most compensation matters was discontinued. The
Board determined that in most instances, in view of the size of the Company and
also of the Board, the full Board should itself handle compensation matters. In
order to comply with the requirements of the regulations of the Securities and
Exchange Commission, a Stock Plan Committee was established to administer the
Company's stock-related plans; namely the 1989 Stock Option Incentive Plan, the
1989 Employee Restricted Stock Award Plan and the 1995 Stock Plan. The Stock
Plan Committee will approve grants under the 1995 Stock Plan. No further grants
can be made under the 1989 Plans.
During 1995 the Board reviewed and approved a comprehensive statement
entitled "Pay Philosophy and Guiding Principles Covering Officer and Key Manager
Compensation at RMI Titanium Company". Principal components of the statement are
as follows:
The Overall Philosophy is described as:
RMI's officer/key manager compensation programs are designed to:
- promote achievement of the Company's business objectives and reinforce its
strategies
- align the interests of the Company's officers and key managers with those
of its shareholders
- provide pay that is externally competitive and internally equitable, that
rewards accomplishment to the extent identifiable and measurable and that
delivers significant rewards for exceptional performance.
The Guiding Principles are described as:
1. Pay programs will be characterized by variability, clarity,
communicability and strategic emphasis. Specific areas of communication will be
factors considered, annual target incentive objectives and results and annual
target levels for restricted stock vesting performance measures and results. The
strategic emphasis will include recognition of the roles of various elements of
pay in attracting, retaining and motivating employees, the aspects of
performance that each element is best suited to reward and the characteristics
of the Company and its officer/key manager group that point to emphasis on
specific elements of pay.
2. Specific descriptions of salary administration and annual and long term
incentive compensation administration are set forth. Annual incentive
compensation is accomplished through the Company's Incentive Compensation Plan
while long term incentive compensation is handled under the 1995 Stock Plan.
No action was taken in 1995 by the Stock Plan Committee to approve grants
under the 1995 Stock Plan. The Committee did approve agreeing with holders of
outstanding stock options under the 1989 Stock Option Incentive Plan to pay
certain brokerage costs involved in sale of Company stock acquired through
option exercises in return for the optionee relinquishing stock appreciation
rights contained in the option(s). All holders of options agreed to so amend
their option agreements; thus there are no longer any outstanding stock
appreciation rights relating to Company stock.
Executive management and key managers submitted their 1995 objectives as is
provided in the Pay Philosophy and Guiding Principles Statement. Performance
against these objectives was reviewed by the Board at its January 1996 meeting
and a number of compensation actions were taken at that time including the award
of the bonuses shown in the Summary Compensation Table. In addition to the
individual's performance against objectives, the Board also considered
managements' overall performance, improving market conditions in the titanium
industry and the Company's improving financial results, most notably in the
fourth quarter. It is intended that the Board will continue to consider
executive compensation matters at its January meeting each year.
The Stock Plan Committee also met in January 1996 and approved grants of
restricted stock under the 1995 Stock Plan to executive management and other key
managers. No action was taken at that meeting with respect to grants of stock
options.
12
<PAGE> 14
In summary, no specific executive compensation actions were taken in 1995;
however the groundwork was established for the significant actions taken in
January, 1996.
The above comments relate in their entirety to the chief executive officer.
The Pay Philosophy and Guiding Principles Statement applies to him. In addition,
his leadership and effectiveness in dealing with major corporate problems will
be taken into account in all compensation determinations relating to him. As was
the case with other executive management, no actions were taken with respect to
the chief executive's compensation in 1995 but significant actions were taken in
1996. These included the award to him by the Board of the bonus shown in the
Summary Compensation Table, as well as the grant by the Stock Plan Committee of
restricted stock. In determining the amount of the chief executive's bonus, the
Board reviewed his performance against his objectives, as well as his leadership
role in achieving the Company's improved financial results.
<TABLE>
<S> <C> <C>
Craig R. Anderson Neil A. Armstrong Daniel I. Booker
Ronald L. Gallatin Charles C. Gedeon L. Frederick Gieg, Jr.
Robert M. Hernandez Louis A. Valli Wesley W. von Schack
</TABLE>
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
Robert M. Hernandez, Chairman of the Board, and L. Frederick Gieg, Jr.,
President and Chief Executive Officer, are members of the Board of Directors. Mr
Hernandez receives no compensation from the Company. Mr. Gieg is not present at
Board meetings when compensation matters relating to him are considered. Neither
Mr. Hernandez nor Mr. Gieg are members of the Stock Plan Committee.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the five year cumulative total
return to stockholders 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.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG RMI, INDUSTRY PEER GROUP AND S&P 500
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TITANIUM RMI TITANIUM
(FISCAL YEAR COVERED) S&P 500 INDUSTRY COMPANY
<S> <C> <C> <C>
1/1/91 100 100 100
12/31/91 130.336 80.344 53.302
12/31/92 140.251 52.535 35.535
12/31/93 154.295 50.112 30.458
12/31/94 156.239 83.083 46.068
12/31/95 214.586 106.659 67.009
</TABLE>
* Assumes $100 investment on January 1, 1991 and reinvestment of dividends.
13
<PAGE> 15
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, 1995, Messrs. Gieg, Odle
and Rupert had 43, 18 and 27 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 $68,041, 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 participate in the plan if the
participant had retired at that time. Participants may elect to receive
14
<PAGE> 16
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, 1995, Messrs. Gieg, Odle and Rupert had 43, 18 and 27
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, 1995, 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 each 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 in 1994. 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. As of March 1, 1996, the amounts
still owing on such loans were $47,920, $26,147 and $9,733, 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 1995 amounted
to approximately $1,275,000.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the 1997 Annual
Meeting of Shareholders must be received no later than November 28, 1996, for
inclusion in the proxy statement and proxy for that meeting.
By Order of the Board of Directors
RICHARD M. HAYS
Secretary
Dated: March 28, 1996
15
<PAGE> 17
PLEASE MARK
YOUR VOTE AS [ ]
INDICATED IN
THIS EXAMPLE
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.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHOLD
all nominees from all FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR: 2. PROPOSAL NO. 2 -- Election of [ ] [ ] [ ]
1. PROPOSAL NO. 1 -- Election of Craig R. Andersson; [ ] [ ] Price Waterhouse LLP as
Neil A. Armstrong; Daniel I. Booker; independent accountants
Ronald L. Gallatin; Charles C. Gedeon; for 1996.
L. Frederick Gieg, Jr.; Robert M. Hernandez and
Wesley W. von Schack as directors.
(To withhold authority to vote for any individual nominee,
write that nominee's name in the space below:
- ---------------------------------------------------------)
</TABLE>
<TABLE>
<S> <C>
Signature(s) Dated: , 1996
------------------------------------------------------------------ ----------------
</TABLE>
Please sign EXACTLY as your name appears hereon. When signing as 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.
RMI TITANIUM COMPANY
1000 WARREN AVENUE, NILES, OHIO 44446
PROXY FOR 1996 ANNUAL MEETING
SOLICITED ON BEHALF OF THE 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 25, 1996, 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
