<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>
[ X ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[ ] 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 ] No fee required.
[ ] $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
RMI
LOGO
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
April 24, 1998
2:00 P.M. Eastern Daylight Saving Time
7440 South Avenue
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... 5
Nominees for Director................... 6
Proposal No. 2 -- Election of Independent
Accountants................................. 8
Proposal No. 3 -- Amendment of Amended
Articles of Incorporation............... 8
Other Information......................... 10
-----------------------------------------------
<PAGE> 3
RMI LOGO 1000 Warren Avenue
Niles, Ohio 44446
March 30, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders to
be held on April 24, 1998, at Mr. Anthony's, 7440 South Avenue, Boardman, Ohio
at 2:00 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
and on a proposal to amend the Company's Amended Articles of Incorporation to
increase the number of authorized shares of common stock.
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 1998 Annual Meeting.
Sincerely,
/s/ ROBERT M. HERNANDEZ
ROBERT M. HERNANDEZ
Chairman of the Board
<PAGE> 4
RMI
LOGO 11000 Warren Avenue
Niles, Ohio 44446
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
The Annual Meeting of Shareholders of RMI Titanium Company will be held on
April 24, 1998, at 2:00 P.M., Eastern Daylight Saving Time, at Mr. Anthony's,
7440 South Avenue, Boardman, Ohio, for the following purposes:
1. To elect ten directors.
2. To elect independent accountants for 1998.
3. To consider and act upon an amendment to the Amended Articles of
Incorporation to increase the number of authorized shares of Common Stock.
4. 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 2, 1998, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
RICHARD M. HAYS
Secretary
Dated: March 30, 1998
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 30, 1998
PROXY STATEMENT
This proxy statement, which is to be mailed on or about March 30, 1998, is
furnished in connection with the solicitation of proxies by the Board of
Directors of RMI Titanium Company (the "Company") for use at the 1998 Annual
Meeting of Shareholders to be held on April 24, 1998, at the time, place and for
the purposes described in the accompanying Notice of Annual Meeting, and at any
adjournment thereof. On March 2, 1998, there were 20,468,882 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 2, 1998, 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 1998 and to approve an amendment to the Articles of
Incorporation to increase the number of authorized shares of Common Stock.
Directors are elected by a plurality of votes cast and independent accountants
by a majority of votes cast. Amendment of the Articles of Incorporation requires
approval by two-thirds of the outstanding shares of Common Stock. Abstentions
and broker non-votes are not counted in determining the number of shares voted
for or against the independent accountants. Abstentions and broker non-votes
have the same effect as a vote against the amendment of the Articles of
Incorporation.
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 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 ten
members, eight of whom are neither officers nor employees of the Company or its
subsidiaries. The Board of Directors met five times during 1997. 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 the director served during
1997.
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 1997 are described below.
EXECUTIVE COMMITTEE
The members of the Executive Committee are Robert M. Hernandez (Chairman),
Craig R. Andersson, Charles C. Gedeon, John H. Odle and Timothy G. Rupert.
4
<PAGE> 6
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 1997, 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, Daniel I. Booker and Dana J. Johnson.
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 three meetings during 1997.
STOCK PLAN COMMITTEE
The members of the Stock Plan Committee, which is composed entirely of
directors who are not employees of the Company, or of USX Corporation, are Craig
R. Andersson, Neil A. Armstrong, Daniel I. Booker, Ronald L. Gallatin, Dana J.
Johnson 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 two meetings during 1997.
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
Corporation ("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 $30,000 and the meeting fee $1,000. The non-employee committee
chairman retainer is $3,000. 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 1997, the Common Stock utilized for this purpose was
based on $26.22, the market value of the stock on August 1, 1997.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Code of Regulations of the Company provides for the annual election of
all members of the Board of Directors. The Board has nominated the ten incumbent
directors for election this year. Each nominee for election has previously been
elected by the shareholders except for Dana J. Johnson who was elected as a
director by the Board on July 25, 1997. Each director elected shall hold office
until the next annual meeting of the shareholders or until a successor is
elected. Of the ten individuals who are nominees for election, two are current
officers of the Company and the remaining eight 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.
5
<PAGE> 7
NOMINEES FOR DIRECTOR
CRAIG R. ANDERSSON Age: 60
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, 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
professional chemical 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 BS 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: 67
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: 50
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.
RONALD L. GALLATIN Age: 52
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. and
The First Mexico Income Fund, N.V. 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.
6
<PAGE> 8
CHARLES C. GEDEON Age: 57
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.
ROBERT M. HERNANDEZ Age: 53
CHAIRMAN OF THE BOARD OF THE COMPANY Director since 1990
On December 1, 1994, Mr. Hernandez was elected to his current position, Vice
Chairman and Chief Financial Officer of USX Corporation. 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 Allegheny Health, Education and Research
Foundation, Allegheny General Hospital, and BlackRock Funds; a director and
Chairman of the Executive Committee of ACE Limited and a director of Marinette
Marine Corporation, Transtar, Inc., the Pennsylvania Chamber of Business and
Industry and the Pennsylvania Business Roundtable.
DANA J. JOHNSON Age: 48
DEAN OF COLLEGE OF BUSINESS AND ECONOMICS Director since 1997
UNIVERSITY OF DELAWARE
Dr. Johnson is Dean and Professor of Finance at the University of Delaware.
Prior to assuming her current position in 1996, she served as Dean of the
Calloway School of Business at Wake Forest University for 4 years, as a member
of the Finance faculty at Virginia Tech for 16 years, and as a Visiting
Professor at the Darden Graduate School of Business at the University of
Virginia. Dr. Johnson has conducted research in areas of corporate finance
including public utilities regulation, corporate financing policies, and
corporate governance. She has also consulted with a number of organizations in
the public and private sectors and served in leadership positions in numerous
professional and non-profit organizations.
JOHN H. ODLE Age: 55
EXECUTIVE VICE PRESIDENT Director since 1996
OF THE COMPANY
Mr. Odle was elected a director on July 26, 1996 and has been Executive Vice
President of the Company since June 1996. He was Senior Vice
President--Commercial of the Company and its predecessor from 1989 to 1996 and
served as Vice-President--Commercial from 1981 until 1989. Prior to that, Mr.
Odle served as General Manager--Sales. He has 20 years of service with the
Company and its predecessor and began his career as a commercial management
trainee with USX. He is a member of the American Society for Metals and the
International Titanium Association. He is a graduate of Miami University of
Ohio.
7
<PAGE> 9
TIMOTHY G. RUPERT Age: 51
EXECUTIVE VICE PRESIDENT & Director since 1996
CHIEF FINANCIAL OFFICER OF
THE COMPANY
Mr. Rupert was elected a director on July 26, 1996 and has been Executive Vice
President & Chief Financial Officer of the Company since June 1996. He was
Senior Vice President & Chief Financial Officer from 1994 to 1996 and had served
as Vice President & Chief Financial Officer since September 1991 when he joined
the Company. Prior to that, Mr. Rupert was employed by USX for 23 years in
various accounting and finance positions. He is a director of the International
Titanium Association and Columbus Insurance Ltd. and a member of the Financial
Executives Institute. He has a BS degree from Indiana University of
Pennsylvania.
WESLEY W. VON SCHACK Age: 53
CHAIRMAN, PRESIDENT AND Director since 1991
CHIEF EXECUTIVE OFFICER, NEW YORK
STATE ELECTRIC & GAS CORP.
(ENERGY SERVICES COMPANY)
Mr. von Schack joined New York State Electric & Gas Corp. in September, 1996.
Prior to that he had served as Chairman of the Board, President and Chief
Executive Officer of DQE and of Duquesne Light Company since 1986. DQE is the
parent company of Duquesne Light. He is also a director of Mellon Bank
Corporation, Mellon Bank, N.A., Edison Electric Institute, The Business Council
of New York State, Inc., The Peconic Land Trust and Associated Electric & Gas
Insurance Services Limited. 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 1997, 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; review of quarterly reports and review of filings with
the Securities and Exchange Commission. 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 1998.
PROPOSAL NO. 3 -- AMENDMENT OF AMENDED ARTICLES OF INCORPORATION
The Directors unanimously recommend that the first paragraph of Article
Fourth of the Company's Amended Articles of Incorporation be amended to increase
the authorized number of shares of the Company's Common Stock from 30,000,000
shares to 80,000,000 shares. The Articles currently provide that the Company is
authorized to issue two classes of stock: 30,000,000 shares of Common Stock, par
value $.01 per share, and 5,000,000 shares of Preferred Stock without par value.
No change is proposed to the number of authorized shares of Preferred Stock. If
the proposed amendment is approved, the first paragraph of Article Fourth would
be replaced with the following:
"FOURTH: The number of shares which the Corporation is authorized to have
outstanding is 85,000,000 shares of which 80,000,000 shall be common shares with
$.01 par value and 5,000,000 shall be preferred shares without par value."
As of March 2, 1998, of the 30,000,000 shares of the Company's Common Stock
currently authorized, 20,468,882 shares were issued and outstanding.
8
<PAGE> 10
The Board of Directors has determined that the number of authorized shares
of Common Stock should be increased to make additional shares available for
issuance from time to time for possible equity financings, acquisitions, equity
compensation plans, stock dividends or stock splits, implementation of the
Company's Shareholder Rights Plan, if deemed desirable, and other corporate
purposes. The Board has no present agreement, understanding or plan to issue any
of the additional shares for which approval is sought. If the amendment is
approved by the shareholders, the Board will have authority to issue the
additional authorized shares of Common Stock without first seeking or obtaining
further shareholder approval, except as may be required by applicable law or the
rules of any stock exchange on which the Common Stock may be listed, such as the
New York Stock Exchange.
Approval of the proposed amendment by the shareholders will not have any
immediate effect on the rights of current shareholders. To the extent that the
additional authorized shares of Common Stock are issued in the future, they
would decrease the existing shareholders relative percentage equity ownership
and, depending on the circumstances, could be dilutive to the existing
shareholders. The holders of Common Stock do not have preemptive rights; thus
they do not have a prior right to purchase newly-issued Common Stock in order to
maintain their proportionate ownership interest.
Although the increase in authorized Common Stock will not have an immediate
effect on the rights of current shareholders, under certain circumstances such
increase could provide management with a means of preventing or discouraging an
attempt to gain control of the Company or the Board. Shares of authorized but
unissued Common Stock could be issued to implement the Company's Shareholder
Rights Plan or in one or more other transactions which would dilute the stock
ownership or voting rights of a person or persons seeking to obtain control of
the Company in a manner or on terms not approved by the Board of Directors. The
Board of Directors has no present intention of using the additional Common Stock
for such purpose and is not aware of any existing plan or action that would
result in a change in control of the Company.
VOTE REQUIRED
Approval of the amendment will require the affirmative vote of at least
two-thirds of the outstanding shares of the Common Stock.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF PROPOSAL NO. 3.
9
<PAGE> 11
OTHER INFORMATION
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Company, as of March 2, 1998, 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................................. 5,483,600(1) 27.0%
600 Grant Street
Pittsburgh, PA 15219-4776
Smith Barney Inc................................ 2,489,839(2) 12.0%
Smith Barney Holdings Inc.
Travelers Group Inc.
338 Greenwich Street
New York, NY 10013
</TABLE>
- ---------
(1) Based on Schedule 13G dated February 12, 1997, which indicates that
USX had sole voting power over 5,483,600 shares, shared voting power
over no shares, sole dispositive power over 5,483,600 shares and
shared dispositive power over no shares. In December 1996, USX issued
in a public offering 6 3/4% Exchangeable Notes due February 1, 2000
("Debt Exchangeable for Common Stock" or "DECS") the principal amount
of which is mandatorily exchangeable at maturity (including as a
result of acceleration or otherwise) for up to 5,483,600 shares of
the Company's Common Stock owned by USX or, at USX's option, an
equivalent amount of cash.
(2) Based on Schedule 13G dated January 23, 1998, which indicates that
each reporting person had sole voting power over no shares, shared
voting power over 2,489,839 shares, sole dispositive power over no
shares and shared dispositive power over 2,489,839 shares.
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 February 23, 1998, 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........................... 36,811 --
Neil A. Armstrong............................ 13,003 --
Daniel I. Booker............................. 3,324 --
Ronald L. Gallatin........................... 6,089 --
Charles C. Gedeon............................ 2,220 --
Robert M. Hernandez.......................... 10,000 --
Dawne S. Hickton............................. 9,475 --
Dana J. Johnson.............................. 429 --
John H. Odle................................. 103,275 --
Timothy G. Rupert............................ 57,225 --
Wesley W. von Schack......................... 9,368 --
Harry B. Watkins............................. 25,733 --
All directors and executive officers
as a group (12 persons).................... 276,952 1.3%
</TABLE>
- ---------
(1) Includes 51,646 shares, 26,667 shares and 9,583 shares, respectively, which
Messrs. Odle, Rupert and Watkins had the right to acquire within 60 days
under the Company's 1989 Stock Option Incentive Plan and 1995 Stock 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. Each of them disclaims
beneficial ownership of such shares.
10
<PAGE> 12
EXECUTIVE COMPENSATION
The following table shows the annual and long term compensation paid the
four executive officers of the Company for services rendered in all capacities
to the Company and its subsidiaries in 1997, 1996 and 1995.
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 (SHARES) PAYOUTS COMPENSATION
------------------ ---- ------ ----- ------------ ------ -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John H. Odle................ 1997 $218,334 $115,000 -- 10,500 11,000 -- --
Executive Vice President- 1996 173,856 120,000 -- 10,000 20,000 -- --
Commercial and Research 1995 131,256 35,000 -- -- -- -- --
Timothy G. Rupert........... 1997 218,334 125,000 -- 10,500 11,000 -- --
Executive Vice President 1996 163,190 120,000 -- 10,000 20,000 -- --
& Chief Financial
Officer 1995 108,264 30,000 -- -- -- -- --
Dawne S. Hickton(1)......... 1997 64,169 32,000 -- 4,500 10,000 -- --
Vice President and General
Counsel
Harry B. Watkins(2)......... 1997 129,167 60,000 -- 5,250 7,500 -- --
Vice President-Technical 1996 116,675 60,000 -- 10,000 10,000 -- --
Marketing & Tubular Group
</TABLE>
- ---------
(1) Elected Vice President and General Counsel effective June 1, 1997.
(2) Elected Vice President April 25, 1996.
The following tables set forth information with respect to stock option
grants and exercises in 1997 and December 31, 1997 stock option values:
STOCK OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM
GRANTED EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME (SHARES) IN 1997 ($/SH) DATE 5% 10%
---- -------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
John H. Odle......................... 11,000 9.20% $25.5625 1/24/07 $155,026 $381,837
Timothy G. Rupert.................... 11,000 9.20% 25.5625 1/24/07 155,026 381,837
Dawne S. Hickton..................... 10,000 8.36% 27.50 7/25/08 140,933 347,125
Harry B. Watkins..................... 7,500 6.27% 25.5625 1/24/07 105,700 260,344
</TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY
ACQUIRED DECEMBER 31, 1997 OPTIONS AT
ON (SHARES)(1) DECEMBER 31, 1997
EXERCISE VALUE ----------------- -----------------
NAME (SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
John H. Odle................. 22,000 $ 514,400 51,646 34,333 $ 502,334 $160,625
Timothy G. Rupert............ 4,000 $ 96,750 26,667 34,333 321,250 160,625
Dawne S. Hickton............. -- -- -- 10,000 -- --
Harry B. Watkins............. 6,250 126,171 9,583 20,417 100,390 100,390
</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
In 1995, the Board of Directors 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. The Stock Plan Committee, which is composed
entirely of directors who are not employees of the Company or of USX,
administers 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 Committee approves grants under the 1995 Stock Plan. No further grants
can be made under the 1989 Plans.
To assist it in its compensation actions, the Board has adopted a
comprehensive statement entitled "Pay Philosophy and Guiding Principles
Governing Officers and Key Manager Compensation at RMI Titanium Company".
Principal components of the statement are as follows:
The Philosophy is to have RMI's officer/key manager compensation programs:
- 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.
Market conditions in the titanium industry continued their substantial
improvement in 1997. Management continued to carefully control operating costs
while managing increasing raw materials and labor costs and inventory
adjustments accompanying the increased production volumes. Management has also
made considerable progress in implementing "lean manufacturing" concepts.
Management also continued to pursue new product applications in the energy
industry and elsewhere.
In January, 1997 the Board of Directors reviewed the 1996 performance of
executive management and key managers against their objectives for that year.
After considering their performance and the Company's improved financial
results, the Board approved compensation increases for executive management (as
well as the bonuses for 1996 for Messrs. Odle, Rupert and Watkins shown in the
Summary Compensation Table).
The Stock Plan Committee approved grants of restricted stock and stock
options in January, 1997. In each case the grants to executive management were
in line with the long term incentive compensation administration guidelines
mentioned above.
In January, 1998 the Board reviewed executive performance against 1997
objectives, as well as the Company's operating and financial results, and
awarded the bonuses for 1997 shown in the Summary Compensation Table. Again
these bonuses were in line with the Pay Philosophy and Guiding Principles
Statement. The Board also took other compensation actions.
The Company does not have a chief executive officer. It has established an
Office of the Chairman which sets policy direction and coordinates strategic and
overall Company activities. Messrs. Hernandez, Odle and Rupert are the members
of the Office of the Chairman. In its consideration of compensation and
restricted stock and stock option actions relating to Messrs. Odle and Rupert,
the Board or the Stock Plan Committee takes into account the
12
<PAGE> 14
leadership and effectiveness of the Office of the Chairman as well as assessing
the individual performance of the two executives with regard to the respective
aspects of the Company's activities for which they are responsible.
<TABLE>
<S> <C> <C>
Craig R. Andersson Neil A. Armstrong Daniel I. Booker
Ronald L. Gallatin Charles C. Gedeon Robert M. Hernandez
Dana J. Johnson John H. Odle Timothy G. Rupert
Wesley W. von Schack
</TABLE>
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
Robert M. Hernandez, Chairman of the Board, John H. Odle, Executive Vice
President and Timothy G. Rupert, Executive Vice President & Chief Financial
Officer are members of the Board of Directors. Mr. Hernandez receives no
compensation from the Company. Messrs. Odle and Rupert are not present at Board
meetings when compensation matters relating to either of them are considered.
None of them is a member of the Stock Plan Committee.
13
<PAGE> 15
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 (Timet
Corporation after June 4, 1996, the date its stock first became publicly
traded).
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG RMI, INDUSTRY PEER GROUP AND S&P 500
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TITANIUM
(FISCAL YEAR COVERED) S&P 500 INDUSTRY RMI TITANIUM CO.
<S> <C> <C> <C>
12/31/92 100.000 100.000 100.000
12/31/93 110.013 94.970 85.714
12/31/94 111.399 155.457 129.643
12/31/95 153.001 215.241 188.571
12/31/96 188.038 566.218 662.946
12/31/97 250.619 517.406 474.375
</TABLE>
* Assumes $100 investment on January 1, 1993 and reinvestment of dividends.
PENSION BENEFITS
The Company has two defined benefit plans, which first became effective at
RMI Company (the Company's immediate predecessor) 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 Chemical Corporation
("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
14
<PAGE> 16
payable under the USX and the Quantum pension plans. As of December 31, 1997,
Mrs. Hickton and Messrs. Odle, Rupert and Watkins had 0, 20, 29 and 12 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>
Under the employment agreement dated as of September 1, 1996 between the
Company and Mr. Odle, hereinafter described, the Company agreed that if he
continues in active employment with the Company until either age 65 or such
earlier date as the Company's Board of Directors may approve, the Company at his
retirement will pay him a one time lump sum payment of the then present value of
the 9.16 years of non-pensionable service attributable to periods he was
employed by USX (3.58 years) and the Company (5.58 years) which pre-date his
current period of employment, calculated pursuant to the provisions for
determining accrued pension benefits set forth in the Company's Pension Plan and
its Supplemental Pension Program applicable to him at date of retirement and
based on his average monthly earnings (or then applicable pensionable earnings)
at such time.
USX has agreed to provide Mr. Rupert, 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 his retirement
from the Company, Mr. Rupert will 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 his employment by the Company.
The combined benefits payable annually to Mr. Rupert under the USX Plan (which
relates to employment by USX) and from USX pursuant to the supplemental
agreement described above, if he retires at age 65 and if his compensation
remains at its current level, would be $103,956. Mr. Watkins is also a former
employee of USX and will receive a pension from the USX Plan calculated on his
service with USX and USX subsidiaries prior to his employment by the Company.
The benefit payable annually to him under the USX Plan if he retires at age 65
and if his compensation remains at its current level would be $24,428.
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 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, 1996, Mrs. Hickton and Messrs. Odle, Rupert and Watkins
had 0, 20, 29 and 12 credited years of service, respectively, for purposes of
this plan, subject in the case of Mr. Odle to the provisions described above of
his employment agreement.
15
<PAGE> 17
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, 1997, Messrs. Odle and Rupert were the only participants
in the Excess Benefits Plan.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mrs. Hickton and
Messrs. Odle, Rupert and Watkins covering their employment for an initial three
year term expiring August 31, 1999 in the case of Messrs. Odle and Rupert and
May 31, 2000 in the case of Mrs. Hickton and Mr. Watkins and for additional one
year terms each year thereafter until the executive attains age 65 unless
terminated prior thereto by either party on 120 days notice. The agreements
provide that each executive 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 also 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 the agreement
terminates. The Company may terminate the services of the executive at any time
for "cause" as defined in the agreement. The executives each agree that the
executive will not, for a period of 24 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. This
restriction does not apply if the executive terminates employment with the
Company under certain circumstances following a "change in control" of the
Company as defined in the agreement.
The employment agreements also provide that the executive will be entitled
to certain severance benefits in the event the executive terminates employment
under certain circumstances following a "change in control" as defined. These
are (i) a cash payment of up to 2.958 times the sum of the executive's current
salary and the average annual bonus paid to him in the three years immediately
preceding the date of termination in the case of Messrs. Odle and Rupert and up
to 2 times the sum of the executive's current salary and the average annual
bonus paid to the executive in the two years immediately preceding the date of
termination in the case of Mrs. Hickton and Mr. Watkins, (ii) all options and
restricted stock held by the executive shall irrevocably vest and options shall
be uncancellable by the Company, (iii) payment to the executive of legal fees
and expenses incurred as a result of termination of employment, including fees
and expenses incurred in enforcing the agreement, (iv) life, disability,
accident and health insurance benefits for a 24 month period after termination;
and (v) a cash payment of the amount necessary to insure that the
above-mentioned payments are not subject to net reduction due to imposition of
excise taxes which are payable under Section 4999 of the Internal Revenue Code.
The circumstances which occasion the executive becoming entitled to these
severance benefits are termination by the executive at the executive's sole
option within 90 days after a "change in control" or for "good reason"
thereafter or by the Company other than for "cause" or "disability" at any time
during the employment period after a "change in control" in the case of Messrs.
Odle and Rupert. In the case of Mrs. Hickton and Mr. Watkins, such entitlement
occurs upon the executive's terminating employment for "good reason" or the
Company's terminating employment other than for "cause" or "disability" at any
time during the employment period after a "change in control." A "change in
control" is defined as a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not the Company is then subject to such reporting requirement;
provided that such a change in control shall be deemed to have occurred if (A)
any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act), but
excluding USX, the Company, its subsidiaries, fiduciaries under any Company
benefit plans, underwriters temporarily holding Company securities and
corporations owned by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing twenty percent or more
of the combined voting power of the Company's then outstanding voting
securities; (B) there shall cease to be a majority of the Board comprised as
follows: individuals who on the date of the agreement constitute the Board and
any new director(s) (other than a director whose initial assumption of office
16
<PAGE> 18
is in connection with an election contest) whose appointment or election by the
Board or nomination for election by the Company stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors on the date of the agreement or whose appointment, election or
nomination for election was previously so approved; or (C) there is consummated
a merger or consolidation of the Company or a Company subsidiary with any other
corporation, other than a merger or consolidation which would result in the
holders of the voting securities of the Company outstanding immediately prior
thereto holding securities which represent immediately after such merger or
consolidation at least 50% of the combined voting power of the entity surviving
the merger or consolidation (or the parent of such surviving entity) or the
shareholders of the Company approve a plan of complete liquidation of the
Company, or there is consummated the sale or other disposition of all or
substantially all of the Company's assets.
CONSULTING AGREEMENT
The Company has entered into an agreement with L. Frederick Gieg, Jr. who
retired on February 28, 1997 as a director and as President and Chief Executive
Officer of the Company providing for him to act in an independent consulting
capacity to the Company. The agreement's term commenced on July 1, 1997 and ends
June 30, 2000. Under the agreement, Mr. Gieg will be paid annual fees of
$24,000; $1,000 for each actual or partial day on which consulting services are
performed; and authorized expenses he incurs.
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 1997 amounted
to approximately $1,171,000.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received no later than November 30, 1998, for
inclusion in the proxy statement and proxy for that meeting.
By Order of the Board of Directors
RICHARD M. HAYS
Secretary
Dated: March 30, 1998
17
<PAGE> 19
RMI TITANIUM COMPANY
1000 WARREN AVENUE, NILES, OHIO 44446
PROXY FOR 1998 ANNUAL MEETING
SOLICITED ON BEHALF OF THE DIRECTORS OF RMI TITANIUM COMPANY
The undersigned hereby appoints ROBERT M. HERNANDEZ, JOHN H. ODLE,
TIMOTHY G. RUPERT 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 24, 1998, 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> 20
PLEASE MARK
YOUR VOTES AS [ X ]
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>
<CAPTION>
FOR WITHHOLD
all nominees from all
<S> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR: [ ] [ ]
1. PROPOSAL NO. 1 - Election of Craig R. Andersson; Neil A. Armstrong;
Daniel I. Booker; Ronald L. Gallatin; Charles C. Gedeon;
Robert M. Hernandez, Dana J. Johnson, John H. Odle, Timothy G. Rupert
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:
FOR AGAINST ABSTAIN
2. PROPOSAL NO. 2 - Election of ____________________ LLP as independent [ ] [ ] [ ]
accountants for 1998.
FOR AGAINST ABSTAIN
3. PROPOSAL NO. 3 - Amendment of Amended Articles of Incorporation. [ ] [ ] [ ]
</TABLE>
SIGNATURE(S) Dated: , 1998
--------------------------------------- -----------
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 *
