<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
(AMENDMENT NO. )
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>
CASTECH ALUMINUM GROUP INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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:
- --------------------------------------------------------------------------------
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<PAGE> 2
CASTECH ALUMINUM GROUP INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 18, 1996
TO OUR STOCKHOLDERS:
The 1996 Annual Meeting of Stockholders of CasTech Aluminum Group Inc. (the
"Company") will be held at Chase Corporate Headquarters, 11th Floor, Room D, 270
Park Avenue, New York, New York 10017, on July 18, 1996 at 9:00 a.m. EDT.
Following a report on the Company's business operations, the stockholders will
act on the following matters:
1. Election of Directors for the ensuing year;
2. Ratification of the appointment of Ernst & Young LLP as the Company's
independent accountants for the ensuing year;
3. Adoption of The 1996 Non-Employee Directors Stock Plan;
4. Proposed amendment to the Company's Certificate of Incorporation to
provide for a new class of capital stock; and
5. Consideration of such other business as may properly come before the
stockholders.
All stockholders of record as of the close of business on May 24, 1996 are
entitled to notice of and to vote at the Annual Meeting. Your proxy vote is
important whether or not you expect to attend the Annual Meeting. To assure your
representation at the meeting, please sign and date the enclosed proxy and
return it promptly in the enclosed envelope.
By Order of the Board of Directors
TERRY D. SMITH
Secretary
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE.
Long Beach, California
May 31, 1996
<PAGE> 3
CASTECH ALUMINUM GROUP INC.
2630 El Presidio Street
Long Beach, California 90810
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CasTech Aluminum Group Inc. (the
"Company"), a Delaware corporation, for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at Chase Corporate
Headquarters, 11th Floor, Room D, 270 Park Avenue, New York, New York 10017, on
July 18, 1996 at 9:30 a.m. EDT. The approximate mailing date of this Proxy
Statement and the enclosed proxy card is May 31, 1996.
The principal solicitation of proxies is being made by mail. However,
certain officers, directors and employees of the Company, none of whom will
receive additional compensation therefor, may solicit proxies by telegram,
telephone or other personal contact. In addition, the Company has retained
Chemical Mellon Shareholder Services, L.L.C., New York, New York, to aid in the
solicitation of proxies with respect to shares held by brokerage houses,
custodians, fiduciaries and other nominees for a fee of approximately
$10,000.00, plus expenses. The Company will bear the cost of the solicitation of
the proxies, including postage, printing and handling, and will reimburse
brokerage firms and other record holders of shares beneficially owned by others
for their reasonable expenses incurred in forwarding solicitation material to
beneficial owners of shares.
VOTING
The Board of Directors has fixed the close of business on May 24, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting. The Company has only one class of voting
securities, its Common Stock par value $.01 per share (the "Common Stock"). On
May 24, 1996, 12,942,443 shares of Common Stock were outstanding.
At the Annual Meeting, each stockholder of record at the close of business
on May 24, 1996 will be entitled to one vote on all matters that are presented
for consideration and action by the stockholders. The presence at the meeting,
in person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum for conducting business. The
election inspectors appointed for the Annual Meeting will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on a
proxy that the broker does not have discretionary authority as to certain shares
to vote on a particular matter, such shares will be counted for general quorum
purposes, but will not be considered as present and entitled to vote with
respect to that matter.
Unless otherwise indicated on the proxy, shares represented by any proxy in
the form of the enclosed proxy card will, if the proxy is properly executed and
received by the Company before the Annual Meeting, be voted FOR each of the nine
nominees for director of the Company shown on the proxy, FOR ratification of the
appointment of Ernst & Young LLP as the Company's independent accounting firm
for fiscal 1997, FOR the adoption of The 1996 Non-Employee Directors Stock Plan,
and FOR the amendment of the Company's Certificate of Incorporation providing
for a new class of capital stock. If other matters properly come before the
Annual Meeting and may properly be acted upon, including voting on a substitute
nominee for director in the event that one of the nominees named in this Proxy
Statement becomes unwilling or unable to serve before the Annual Meeting, the
proxy will be voted in accordance with the best judgment of the persons named in
the proxy.
<PAGE> 4
Any stockholder has the power to revoke his proxy at any time before it is
voted at the Annual Meeting by delivering a later signed and dated proxy or
other written notice of revocation to Terry D. Smith, Secretary of the Company,
at 2630 El Presidio Street, Long Beach, California 90810. A proxy may also be
revoked if the person executing the proxy is present at the Annual Meeting and
chooses to vote in person.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning the shares of Common
Stock beneficially owned as of May 24, 1996, by each current director and
executive officer, and by all directors and executive officers of the Company as
a group. Unless otherwise noted, each beneficial owner listed below has sole
investment and voting power with respect to the Common Stock indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1)
------------------------------------------------------------------ ----------------
<S> <C>
Charles J. Pilliod, Jr............................................ 165,749
Norman E. Wells, Jr............................................... 107,000
Terry D. Smith.................................................... 42,280
Robert D. Lloyd................................................... 70,143
Thomas P. Salice (2).............................................. 281,949
Gerald L. Hadeen.................................................. 40,781
Stanley W. Platek................................................. 45,881
Reginald H. Jones................................................. 5,684
Robert S. Hatfield................................................ 5,684
Ronald D. Glosser................................................. 1,000
Philip Caldwell (3)............................................... 6,242
C. Fred Fetterolf................................................. 1,500
----------------
All directors and executive officers as a group (12 persons)
(4)............................................................. 485,702
</TABLE>
- ---------------
(1) Each of the named persons owns less than 1% of the outstanding shares of
Common Stock except for Mr. Pilliod who owns approximately 1.3%. All
directors and executive officers as a group own approximately 3.75% of the
outstanding shares of Common Stock. The foregoing percentages and the share
amounts shown in the table include with respect to Messrs. Pilliod, Wells,
Smith, Lloyd, Platek, Hadeen and all directors and executive officers as a
group (including those named) 163,125 shares, 104,400 shares, 40,781 shares,
70,143 shares, 40,781 shares, 40,781 and 460,011 shares, respectively,
subject to options which are exercisable within sixty days of May 24, 1996.
(2) All such shares are held by AEA Investors Inc. Mr. Salice, a Managing
Director of AEA, disclaims beneficial ownership of all such shares.
(3) All such shares are held by members of Mr. Caldwell's family. Mr. Caldwell
disclaims beneficial ownership of such shares.
(4) Excludes 288,191 shares as to which beneficial ownership is disclaimed.
2
<PAGE> 5
PRINCIPAL STOCKHOLDERS
The following table sets forth as of May 24, 1996 (i) the name of each
person known to the Company, based upon filings made by such persons with the
Securities and Exchange Commission or information provided by such persons to
the Company, to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock, (ii) the total number of shares of Common
Stock beneficially owned by such person, and (iii) the percentage of the
outstanding shares of Common Stock so owned.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT
NAME AND ADDRESS (1)(4) OF CLASS
------------------------------------------------- ------------------------ --------
<S> <C> <C>
Neumeier Investment Counsel
26435 Carmel Rancho Boulevard
Carmel, CA 93923................................. 1,172,525(2) 9.06%
Pioneering Management Corporation
60 State Street
Boston, MA 02109................................. 1,295,300(3) 10.0%
</TABLE>
- ---------------
(1) Except as otherwise noted, the number of shares beneficially owned is deemed
to include shares of Common Stock in which the persons named have or share
either investment or voting power.
(2) Based solely on a Schedule 13G dated February 6, 1996 filed with the
Securities and Exchange Commission ("SEC") by Neumeier Investment Counsel
("Neumeier"). Neumeier, a registered investment advisor, states in its 13G
that it has sole dispositive power over all of these shares and sole power
to vote or direct the voting of 795,225 shares.
(3) Based solely on a Schedule 13G dated January 26, 1996 filed with the SEC by
Pioneering Management Corporation ("PMC"). PMC, a registered investment
advisor, states in its 13G that it has the sole power to vote or direct the
voting of all these shares. PMC has the sole dispositive power over 720,300
shares and shared dispositive power over 575,000 shares.
(4) Each of the above beneficial owners stated in its Schedule 13G that its
shares were acquired in the ordinary course of business and not for the
purpose of changing or influencing the control of the Company. The Company
has no knowledge whether the above beneficial owners have changed their
beneficial ownership since the date of their Schedule 13Gs.
To the best knowledge of the Company's management, there is no other
beneficial owner of more than 5% of the Company's Common Stock.
3
<PAGE> 6
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A board of nine directors is to be elected at the Annual Meeting. Directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on the election
of directors. Directors who are elected at the Annual Meeting will hold office
until the 1997 Annual Meeting and until their successors are elected and
qualified. Management's nominees, listed below with brief biographies, all
currently serve on the Company's board. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for Management's nominees. In the
event that any of these nominees is unable or declines to serve as a director at
the time of the Annual Meeting, it is intended that the proxies will be voted
for any nominee who shall be designated by the present Board of Directors to
fill the vacancy. The Company is not aware of any nominee who will be unable or
will decline to serve as a director.
Nominees for Election at the 1996 Annual Meeting [age in parentheses]
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE BUSINESS EXPERIENCE
- ---------------------------- ---- -------------------------------------------------------------
<S> <C> <C>
Charles J. Pilliod, Jr. (77) Mr. Pilliod has been Chairman of the Board of Directors of
the Company since April 1989 and was the Chief Executive
Officer from April 1989 through March 1993. From 1985 to
1989, Mr. Pilliod served as U.S. Ambassador to Mexico. Prior
to that, he was Chairman of the Board of Directors and Chief
Executive Officer of Goodyear Tire & Rubber Company. Mr.
Pilliod serves as Chairman of the Board of Directors of
Dal-Tile International Inc.
Norman E. Wells, Jr. (47) Mr. Wells has been President and Chief Executive Officer of
the Company since March 1993 and a director since 1992. He
has been an employee of the Company since 1989, holding
various positions. From 1989 to 1991, Mr. Wells was Vice
President of Production of Barmet, and since March 1991 has
been President and Chief Executive Officer of Barmet. Prior
to 1989, Mr Wells held various positions at Kaiser Aluminum
Corporation.
Robert D. Lloyd (62) Mr. Lloyd has been a director of the Company since June 1992.
He has been President of Alflex since June 1991. Prior to
joining the Company in 1991, Mr. Lloyd was Vice President,
Western Operations of Triangle PWC, Inc., a manufacturer of
wire and cable, from March 1984 to May 1991.
Thomas P. Salice (35) Mr. Salice has been a director of the Company since February
1991. Mr. Salice is a Managing Director of AEA Investors
Inc., a privately-held investment firm, and has been
associated with AEA since June 1989. Mr. Salice is also a
director of Waters Corporation.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE BUSINESS EXPERIENCE
- ---------------------------- ---- -------------------------------------------------------------
<S> <C> <C>
Reginald H. Jones (78) Mr. Jones has been a director of the Company since March
1994. Mr. Jones retired as Chairman of the Board of Directors
of General Electric Company in April 1981. At General
Electric, he served as Chairman of the Board of Directors and
Chief Executive Officer from December 1972 through April
1981, President from June 1972 to December 1972 and a
Director from August 1971 to April 1981. Mr. Jones is also a
director of ASA Limited and Birmingham Steel Corporation.
Robert S. Hatfield (80) Mr. Hatfield has been a director of the Company since March
1994. Mr. Hatfield was Chairman of the Board of Directors and
Chief Executive Officer of The Continental Group, Inc.
(Continental Can Company) from 1971 to 1981. Prior to that,
he held various executive positions at The Continental Group
from 1936 to 1991. Mr. Hatfield is currently Chairman of the
Board of Directors and Chief Executive Officer of The
National Executive Service Corps, a nonprofit firm that
provides management assistance to social service,
educational, health, cultural, religious and governmental
organizations. He also served as Chairman of the Board of
Governors of The Society of the New York Hospital from 1981
to 1988.
Ronald D. Glosser (63) Mr. Glosser has been a director of the Company since March
1994. From February 1989 to December 1995, Mr. Glosser served
as President and Chief Executive Officer of Hershey Trust
Company, as well as Chairman of the Board of Directors and
Chief Executive Officer of The M.S. Hershey Foundation. From
1982 to 1989, he served as President of National City Bank in
Akron, Ohio. Mr. Glosser is Co-Chairman of the International
Council of Advisors, World Leadership Council.
Philip Caldwell (76) Mr. Caldwell has been a director of the Company since March
1994. Since 1985, Mr. Caldwell has been Senior Managing
Director of Lehman Brothers, Inc. and its predecessor,
Shearson Lehman Brothers Holdings Inc. Mr. Caldwell spent 32
years at Ford Motor Company where he was Chairman of the
Board of Directors and Chief Executive Officer from 1980 to
1985 and a director from 1973 through 1990. Mr. Caldwell is a
director of Lehman Brothers, Inc., The Mexico Fund, Zurich
Reinsurance Centre Holdings, Inc. and Waters Corporation.
C. Fred Fetterolf (67) Mr. Fetterolf has been a director of the Company since March
1995. Mr. Fetterolf was President and Chief Operating Officer
of Aluminum Company of America (Alcoa) from 1985 to 1991, and
served as President of Alcoa from 1983 to 1985. Mr. Fetterolf
is a director of Allegheny Ludlum Corporation, Mellon
National Bank, Union Carbide Corporation and Quaker State
Corporation.
</TABLE>
5
<PAGE> 8
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of five meetings during
the fiscal year ended March 31, 1996. The Board of Directors has two committees,
the Audit Committee and the Compensation Committee, which met two and three
times, respectively, during fiscal 1996. Each incumbent director serving during
the last fiscal year attended at least 75% of the aggregate of all meetings of
the Board of Directors and the committees of the Board upon which such director
served.
The Audit Committee of the Board of Directors consists of directors Jones
(Chairman), Caldwell and Glosser. The Audit Committee recommends engagement of
the Company's independent public accountants and is primarily responsible for
approving the services performed by the Company's independent public accountants
and for reviewing and evaluating the Company's accounting principles and its
system of internal accounting controls.
The Compensation Committee of the Board of Directors consists of directors
Pilliod (Chairman), Hatfield, Salice and Fetterolf. The Compensation Committee
reviews and approves the Company's executive compensation policy and grants
stock options to employees of the Company, including officers, pursuant to the
Company's stock option plan. The Committee's Report on executive compensation
can be found beginning on page of this Proxy Statement.
DIRECTOR COMPENSATION
Members of the Board of Directors who are not full-time employees of the
Company presently receive an annual retainer fee of $15,000 (except for the
Chairman of the Board who receives $25,000), plus $750 for each board and board
committee meeting attended. All directors are reimbursed for their traveling
costs and other out-of-pocket expenses incurred in attending board and board
committee meetings. Directors who serve on either or both of the Audit Committee
and Compensation Committee receive no additional compensation.
As discussed more extensively on pages 13 and 14 of this Proxy Statement,
the Board of Directors has approved, subject to stockholder approval at the
Annual Meeting, a new compensation plan for the Company's non-employee
directors in order to further align their interests with the long-term
interests of the stockholders. Under this plan, instead of receiving an annual
cash retainer fee of $15,000.00, non-employee directors would receive one
thousand (1,000) shares of the Company's common stock each year plus a fee of
$1,000.00 for each board and board committee meeting attended. The Board is
recommending that the stockholders approve the adoption of the 1996
Non-Employee Directors Stock Plan.
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE DIRECTOR NOMINEES LISTED ABOVE
6
<PAGE> 9
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following table provides information concerning compensation paid by
the Company to the Chief Executive Officer of the Company and the other four
most highly compensated executive officers of the Company whose total annual
salary and bonus exceeded $100,000 (collectively with the Chief Executive
Officer, the "Named Executives") for each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION SHARES
------------------------------------------------- UNDERLYING ALL OTHER
SALARY BONUS OTHER ANNUAL OPTIONS COMPENSATION
NAME & PRINCIPAL POSITION YEAR $ $ COMPENSATION (A) (#) ($)
- --------------------------- ---- ------- ------- ---------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Wells, Jr. 1996 300,849 99,375 -- -- 76,327(b)
Chief Executive Officer 1995 255,816 150,000 -- -- 50,514(b)
1994 259,700 75,000 -- 174,000 21,186(b)
Robert D. Lloyd 1996 225,385 40,000 -- -- 50,888(c)
Executive Vice President 1995 206,668 90,000 -- -- 19,000(c)
&
President-Alflex Division 1994 190,000 90,000 -- 116,906 18,600(c)
Terry D. Smith 1996 149,292 45,000 -- -- 28,815(d)
Chief Financial Officer 1995 143,076 75,000 -- -- 23,217(d)
and Secretary 1994 144,020 37,500 -- 67,968 8,167(d)
Gerald L. Hadeen 1996 146,877 18,000 -- -- 39,381(e)
Senior Vice President, 1995 138,000 60,000 -- -- 6,600(e)
Alflex Division 1994 138,000 60,000 -- 67,968 6,600(e)
Stanley W. Platek 1996 145,698 45,000 -- -- 58,363(f)
Vice President -- 1995 137,161 75,000 -- -- 46,558(f)
Technology,
Barmet Aluminum Corp. 1994 142,860 37,500 -- 67,968 26,442(f)
</TABLE>
- ---------------
(a) The dollar value of perquisites and other personal benefits was less than
the lesser of $50,000 and 10% of the total annual salary and bonus for each
named officer and therefore has been excluded.
(b) Includes Company contributions to a defined contribution retirement plan
totalling $38,619, $30,389 and $10,005 and accrued wages under a deferred
compensation agreement payable on retirement of $37,708, $20,125 and $11,181
for the years ended March 31, 1996, 1995 and 1994, respectively.
(c) Includes company contributions to a defined contribution retirement plan
totalling $19,000 for each of the years ended March 31, 1996 and 1995 and
$18,600 for the year ended March 31, 1994 and accrued wages under a deferred
compensation agreement payable on retirement of $31,888 for the year ended
March 31, 1996.
(d) Includes Company contributions to a defined contribution retirement plan
totalling $19,440, $16,583 and $5,613 and accrued wages under a deferred
compensation agreement payable on retirement of $9,375, $6,634 and $2,554
for the years ended March 31, 1996, 1995 and 1994, respectively.
(e) Includes Company contributions to defined contribution retirement plan
totalling $6,600 for each of the years ended March 31, 1996, 1995 and 1994
and accrued wages under a deferred compensation agreement payable on
retirement of $32,781 for the year ended March 31, 1996.
7
<PAGE> 10
(f) Includes Company contributions to a defined contribution retirement plan
totalling $19,045, $16,123 and $5,688 and accrued wages under a deferred
compensation agreement payable on retirement of $39,318, $30,435 and $20,754
for the years ended March 31, 1996, 1995 and 1994, respectively.
Option Exercises and Values.
No stock options were exercised by the Named Executives in the year ended
March 31, 1996. The following table sets forth information with respect to the
aggregate number of unexercised options to purchase Common Stock granted in all
years to the Named Executives and held by them as of March 31, 1996, and the
value of unexercised in-the-money options (i.e., options that had a positive
spread between the exercise price and the fair market value of the Common Stock)
as of March 31, 1996:
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Norman E. Wells, Jr. 104,400 69,600 $ 420,210 $ 280,140
Robert D. Lloyd 70,143 46,763 282,326 188,221
Terry D. Smith 40,781 27,187 164,144 109,428
Gerald L. Hadeen 40,781 27,187 164,144 109,428
Stanley W. Platek 40,781 27,187 164,144 109,428
</TABLE>
- ---------------
(1) Based on the New York Stock Exchange closing price of the Company's Common
Stock on March 31, 1996 of $14.375.
Stock Options.
No stock options were granted under the Company's Stock Option Plan to the
Named Executives during the year ended March 31, 1996.
8
<PAGE> 11
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors is composed of four
independent non-employee directors. The Committee is responsible for the
evaluation and approval of compensation for the Company's executive officers.
The Committee's objective is to establish a compensation program for the
Company's executive officers that will attract and maintain quality management
talent while remaining consistent with the Company's overall business strategy
and compensation philosophy. The Committee's decisions relating to compensation
of the Company's executive officers are reviewed by the full Board of Directors
of the Company.
The Committee's compensation policies have been designed to reflect the
Company's commitment to a "pay-for-performance" philosophy. Towards that end,
executive officers are rewarded for their contributions to the enhancement of
shareholder value and the attainment of corporate goals through the award of
stock options and cash bonus incentives. In general, base pay is targeted at or
below a level that is competitive for similar executive positions in comparable
companies. As such, the Company believes that its compensation policies place
greater emphasis on annual and long-term performance incentives. The Committee
uses outside, independent benefits and compensation specialists and related
outside surveys to assist the Company in developing and assessing the
reasonableness of the Company's compensation program for its executive officers.
The companies included in these outside surveys do not necessarily include the
same companies included in the peer group set forth in the Performance Graph in
this Proxy Statement.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
Compensation paid to the Company's executive officers is composed primarily
of base salary compensation, annual incentive compensation and long-term
incentive compensation in the form of stock options. In addition, certain key
executive officers have individual deferred compensation agreements which are
funded through life insurance policies and which are payable upon retirement.
Base Salary. The Company's base salary compensation for executive officers
is established after examining both objective and subjective criteria. In
determining base salary, the Committee considers the responsibility of the
individual's position, the individual's overall job performance, and the base
salaries of similar positions in comparable companies. Individual performance is
measured against the achievement of annual business goals and long-term
strategic goals. These factors are considered subjectively in the aggregate and
neither of these factors is accorded a specific weight. In general, the
Committee establishes base salary for executive officers that is at or below the
average paid for comparable positions at other similarly sized companies as set
forth in national compensation surveys.
Bonus Plan. Each of the Company's executives participates in a Management
Incentive Program which provides for the payment of annual cash bonuses. The
Management Incentive Program's purpose is to align a substantial portion of
executive compensation with the achievement of the Company's annual financial
goals. Bonus payments are established by the Committee and in such amounts such
that the attainment of various levels of performance will provide total annual
cash compensation to the Company's executive officers that is at or somewhat
above the average paid for comparable positions with other similarly-sized
companies. Under this program, the Company establishes earnings-based
performance targets for the Company as a whole and separately for each of the
Company's two operating units. (These confidential performance targets are not
disclosed in this Report in order to avoid compromising the Company's
competitive position.) It is the
9
<PAGE> 12
Committee's belief that earnings-based targets are the best measure of the
Company's performance, although the Committee is vested with the discretion to
change the standards used to measure performance as appropriate in order to
create proper incentives for the Company's executives. The Committee establishes
four tiers of performance targets for each applicable business unit. The amount
of an executive's bonus is based upon which tier of the business unit's earnings
targets is reached. The higher the earnings target that is achieved, the higher
the amount of the bonus award. The minimum level at which an executive will earn
any incentive payment, and the levels at which the bonus payments increase, are
established by the Committee in the early part of the fiscal year.
Stock Options. Stock options which, in the Committee's view, provide
additional incentive to executives to work towards maximizing shareholder value,
is one of the more important components of the Company's long-term,
performance-based compensation philosophy. The Company grants stock options to
its executives at or near the date of hire and, in some instances, through
subsequent periodic grants. These options have exercise prices equal to the fair
market value at the time of grant, and generally vest over a four-year period.
Unless the Committee otherwise provides, options become exercisable as to 20% of
the shares covered thereby on the date of grant and as to an additional 20% of
such shares on each of the next four anniversaries of the date of grant. The
initial option grant is designed to be competitive with those of comparable
companies for similar executive positions and is designed to motivate the
executive to make the kinds of decisions and implement strategies and programs
that will contribute to an increase in the Company's stock price over time. In
determining the persons to whom awards shall be granted and the number of shares
covered by each award, the Committee takes into account the duties of the
respective executive, the individual's present and potential contribution to the
financial success of the Company and such other factors as the Committee deems
relevant.
Other. In addition to the foregoing, the Company has entered into deferred
compensation agreements with certain key executive officers. These agreements
provide for a fixed benefit payable monthly upon the death or retirement of the
covered executive. The Company has obtained life insurance policies to fund the
benefits payable under these deferred compensation agreements. Participating
executives are not entitled to any payments if their employment is terminated
for reasons other than death, retirement or termination without cause.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The factors considered by the Committee in determining the compensation of
Mr. Wells, the Company's Chief Executive Officer, in addition to survey data,
include the Company's operating and financial performance, as well as the CEO's
leadership and establishment and implementation of strategic direction for the
Company. These factors are considered subjectively and none of these factors is
accorded specific weight. In determining Mr. Wells' compensation for fiscal
1996, the Committee considered the Company's outstanding financial results for
fiscal 1995, Mr. Wells' decisive management of operational issues, and the
improved overall competitive position of the Company. As a result, effective in
the second quarter of fiscal 1996, Mr. Wells' base salary was increased an
additional $25,000.00 so that his annual base salary would be $290,000.00. The
Committee believes that, even with this increase in base salary, Mr. Wells' base
salary is below the average for chief executive officers in comparable
companies. Mr. Wells' cash bonus for fiscal 1996 was paid in accordance with the
Company's Management Incentive Program.
10
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The following directors served on the Compensation Committee during fiscal
1996: Charles J. Pilliod, Jr. (Chairman), Robert S. Hatfield, Thomas P. Salice
and C. Fred Fetterolf. Mr. Pilliod served as an officer of the Company during
the past fiscal year.
------------------------
THE FOREGOING REPORT ON EXECUTIVE COMPENSATION
IS PROVIDED BY THE FOLLOWING DIRECTORS
WHO CONSTITUTED THE COMPENSATION COMMITTEE
DURING FISCAL 1996
Charles J. Pilliod, Jr. (Chairman)
Robert S. Hatfield
Thomas P. Salice
C. Fred Fetterolf
11
<PAGE> 14
PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Ernst & Young LLP has served as the independent accountants for the Company
since 1986. The Company's Board of Directors has approved the retention of Ernst
& Young LLP to audit the consolidated financial statements of the Company for
the year ending March 31, 1997. It is anticipated that representatives of Ernst
& Young LLP will be present at the Annual Meeting and will be given an
opportunity to make a statement, if they desire to do so, and to respond to any
appropriate inquiries of the stockholders.
In recognition of the important role of the Company's independent
accountants, the Board of Directors has determined that its appointment of Ernst
& Young LLP as the independent accountants for the Company should be submitted
to the stockholders for ratification. If the appointment is not ratified, the
Board of Directors will take the vote of the stockholders into account in
determining whether to appoint another firm as the company's independent
accountants for the upcoming fiscal year. The Board of Directors also retains
the power to appoint another independent accountant for the Company to replace
an accountant ratified by the stockholders in the event the Board of Directors
determines that the interests of the Company require such a change.
MANAGEMENT RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
12
<PAGE> 15
PROPOSAL THREE
APPROVAL OF 1996 NON-EMPLOYEE DIRECTORS STOCK PLAN
On May 22, 1996, the Board of Directors adopted the 1996 Non-Employee
Directors Stock Plan (the "Directors Stock Plan"), to be effective on the day
of, and only upon approval by the stockholders at, the Annual Meeting. If the
Directors Stock Plan is not approved by the stockholders at the Annual Meeting
it shall automatically become void. The purpose of the Directors Stock Plan is
to enable the Company to attract, retain and motivate the best qualified
directors and to enhance a long term mutuality of interest between the directors
and stockholders of the Company by providing the Company's non-employee
directors with stock ownership. The summary that follows is qualified in its
entirety by reference to the complete text of the Directors Stock Plan which
appears as Exhibit A to this Proxy Statement.
Number of Shares. An aggregate of 100,000 shares of Common Stock is
reserved for issuance under the Directors Stock Plan. Such number of shares may
be appropriately adjusted in the event of certain changes in the Company's
capitalization, such as stock dividends, stock splits, recapitalizations and the
like. Shares issuable under the Directors Stock Plan may be authorized and
unissued shares of Common Stock, Common Stock held in treasury, or any
combination thereof.
Share Awards. Participation in the Directors Stock Plan is limited to
directors of the Company who are not employees of the Company or any of its
subsidiaries. If the Directors Stock Plan is approved by stockholders, for each
fiscal year beginning with the fiscal year commencing April 1, 1996, each
non-employee director of the Company who is elected a director at the Annual
Meeting of Stockholders for such year or at any time thereafter during such year
and continues to be a director as of September 30 of that year shall receive an
award of one thousand (1,000) shares of Common Stock, without payment, as
compensation for such director's services as a member of the Board of Directors
of the Company. Unless a participating director defers receipt of the shares
awarded under this plan, the shares will be transferred annually on the last day
of the third calendar quarter. In addition to other restrictions, the shares may
not be sold, transferred, assigned, pledged, mortgaged, or otherwise disposed of
for a period of six months and one day after their award.
Plan Administration. The Directors Stock Plan will be administered by the
Board of Directors through its Compensation Committee (the "Committee"). The
Board of Directors or the Committee may amend the Directors Stock Plan in any
respect, provided that no amendment may be made without stockholder approval
that would (i) materially increase the maximum number of shares of Common Stock
available for issuance under the Directors Stock Plan, (ii) materially increase
the benefits accruing to participants under the Directors Stock Plan, or (iii)
materially modify the requirements as to eligibility for participation in the
Directors Stock Plan, and provided, further, that the Directors Stock Plan may
not be amended more than once every six months except to comport with changes in
the Internal Revenue Code of 1986, as amended, or rules thereunder. The Board of
Directors has the authority to terminate the Directors Stock Plan at any time.
Tax Effects. Unless subject to an irrevocable election to defer receipt of
shares and except as provided in the following sentence, a director will
recognize ordinary income six months following the date of the receipt of the
shares (i.e., at the end of the period during which the director may not sell
the shares) in an amount equal to the fair market value of the shares at that
time. Within thirty (30) days after the date of receipt, the director may elect
under Section 83(b) of the Internal Revenue Code of 1986, as amended, to
recognize taxable ordinary income at the time of receipt in an amount equal to
the fair market value of the shares at such time.
13
<PAGE> 16
A director's holding period for the shares for tax purposes will begin at
the time taxable income is recognized, and the tax basis in the shares will be
the amount of ordinary income so recognized. Any dividends received on the
shares prior to the date the director recognizes income as described above will
be taxable compensation income when received. The Company is entitled to a
federal income tax deduction equal to the amounts of income recognized by a
director.
MANAGEMENT RECOMMENDS A VOTE FOR THE ADOPTION
OF THE DIRECTORS STOCK PLAN.
14
<PAGE> 17
PROPOSAL FOUR
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Amended and Restated Articles of Incorporation (the
"Amendment") and recommends that you vote for the proposal to approve the
Amendment. If this proposal is approved by the stockholders, the Amendment will
become effective at the time the Company files the appropriate Articles of
Amendment with the office of the Delaware Secretary of State. It is anticipated
that such action would occur on or about July 22, 1996.
The substance and effect of the Amendment is described below and the
complete text of the proposed Second Amended and Restated Articles of
Incorporation (the "Restated Articles") is set forth in Exhibit B to this Proxy
Statement. The following discussion is qualified in its entirety by reference to
the text of the proposed Restated Articles.
Creation of a New Class of Capital Stock. The Amendment authorizes the
creation of a class of preferred stock not presently authorized under the
Company's charter. The Board of Directors believes that the complexity of modern
business financing and acquisition transactions requires greater flexibility in
the Company's capital structure than now exists. In the event of stockholder
approval of the Amendment, preferred stock could be issued in one or more series
without any further action by the stockholders. The Amendment would give the
Board of Directors the authority to determine the designation, rights,
preferences, privileges and restrictions, including voting rights, conversion
rights, right to receive dividends, right to assets upon any liquidation, and
other relative benefits, restrictions and limitations of any series of preferred
stock. The Board of Directors will also determine whether such preferred stock
will be convertible into other securities of the Company, including Common
Stock. Accordingly, the issuance of preferred stock, while promoting flexibility
in connection with possible acquisitions and other corporate purposes, could
adversely affect the voting rights of the holders of, or the market price of,
Common Stock. The Company has no agreements or commitments at this time for the
sale or other use of any shares of preferred stock, although these shares may be
used by the Company as part of an overall anti-takeover strategy.
The overall effect of the amendment may be to render more difficult or to
discourage a merger, tender offer or proxy contest, the assumption of control of
the Company by a holder of a large block of the Company stock, or the removal of
incumbent Management, even if such actions may be beneficial to the Company's
stockholders generally.
MANAGEMENT RECOMMENDS THAT YOU APPROVE THE PROPOSED AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
15
<PAGE> 18
The following graph compares the percentage change in the cumulative total
stockholder return on the Company's Common Stock with that of the Company's peer
group (assuming reinvestment of dividends) and the New York Stock Exchange
Industrial Index during the period October 31, 1994 (the end of the month in
which the Company first went public) through March 31, 1996. The peer group is
comprised of Quanex Corporation, ACX Technologies, Inc., IMCO Recycling, Inc.,
Alcoa, Reynolds Metals Co., Alcan Aluminum, Ltd, and Alumax, Inc.
STOCK PRICE PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NYSE INDUS-
(FISCAL YEAR COVERED) CASTECH TRIAL PEER GROUP
<S> <C> <C> <C>
OCT. 94 100 100 100
DEC. 94 97 99 99
MAR. 95 102 107 95
JUN. 95 118 115 110
SEP. 95 108 122 118
DEC. 95 97 129 115
MAR. 96 99 137 129
</TABLE>
OTHER BUSINESS
The Company knows of no other matters to be acted upon at the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed Proxy to vote the shares they
represent as the Board of Directors may recommend.
STOCKHOLDER PROPOSALS
In order for proposals of stockholders to be considered for inclusion in
the Company's proxy statement and proxy for the 1997 Annual Meeting of
Stockholders, such proposals must be received at the Company's executive office
no later than March 1, 1997.
By Order of the Board of Directors
TERRY D. SMITH
Chief Financial Officer and
Secretary
16
<PAGE> 19
1996 NON-EMPLOYEE DIRECTORS STOCK PLAN
OF CASTECH ALUMINUM GROUP INC.
1. PURPOSE OF THE PLAN.
The purpose of the 1996 Non-Employee Directors Stock Plan (the "Plan") is to
attract, retain and motivate the best qualified directors and to enhance a
long-term mutuality of interest between the directors and stockholders of the
Company by providing the participating directors with stock ownership under the
Plan.
2. PARTICIPANTS.
Participants in the Plan shall consist of directors of the Company who are not
employees of the Company or any of its subsidiaries. The term "subsidiary" as
used in the Plan means a corporation more than 50% of the voting stock of which
shall at the time be owned directly or indirectly by the Company.
3. SHARES RESERVED UNDER THE PLAN.
Subject to certain adjustments as set forth in Section 8 hereof, there shall be
reserved for issuance under the Plan an aggregate of 100,000 shares of Common
Stock of the Company ("Common Stock"). Shares of Common Stock to be issued under
the Plan may be authorized and unissued shares of Common Stock, Common Stock
held in treasury, or any combination thereof.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Compensation Committee of the Board of
Directors or such other committee as may be appointed by the Board consisting of
not less than three members of the Board of Directors (the "Committee"). The
Committee shall have authority to interpret the Plan and to prescribe, amend and
rescind the rules and regulations relating to the administration of the Plan.
All such interpretations, rules and regulations shall be conclusive and binding
on all persons. The Board or the Committee may appoint agents (who may be
employees of the Company) to assist in the administration of the Plan, and may
grant authority to such persons to execute agreements or other documents on its
behalf. The Board or the Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of the Plan. All
expenses incurred in the administration of the Plan, including, without
limitation, for the engagement of any counsel, consultant or agent, shall be
paid by the Company.
5. EFFECTIVE DATE OF THE PLAN.
The Plan shall be submitted to the Company stockholders for approval at the
Annual Meeting of Stockholders to be held on July 18, 1996, or any adjournment
thereof, and, if approved by the stockholders, shall be deemed to have become
effective on the date of such approval.
6. AWARD OF SHARES.
For each fiscal year beginning with the fiscal year commencing April 1, 1996,
each non-employee director of the Company who is elected a director at the
Annual Meeting of Stockholders for such year or at any time thereafter during
such year and continues to be a director as of September 30 of such year shall
receive an award of 1,000 shares of Common Stock effective as of such September
30. A participant shall not be required to make any payment for any shares of
Common Stock issued under the Plan. Upon the issuance of shares of Common Stock
under the Plan, the recipient shall have the entire beneficial ownership
interest in, and all rights and privileges of the stockholder as to, such
shares, including the right to vote such shares and the right to receive
dividends. Participants may elect to defer receipt of the shares of Common Stock
to which they are
17
<PAGE> 20
entitled under the Plan on the condition that the Company receive such notices
and agreements as it may deem reasonably appropriate.
7. RESTRICTION ON TRANSFER OF SHARES.
Common Stock acquired under the Plan shall not be subject to sale, transfer,
assignment, pledge, mortgage or other disposition by a director for a period of
six months and one day after the date of award. The restriction imposed under
this Section 7 shall be evidenced by a written agreement between the Company and
each director.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of changes in the outstanding Common Stock of the Company by reason
of stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations or
liquidations, the number and class of shares to be issued under the Plan shall
be appropriately adjusted by the Committee.
9. GOVERNMENTAL AND OTHER REGULATIONS.
The Company's obligation to deliver shares of Common Stock under the Plan shall
be subject to all applicable laws, rules and regulations and such approvals by
any governmental agencies as may be required.
10. AMENDMENT AND TERMINATION OF THE PLAN.
The Plan may be amended by the Company's Board of Directors in any respect,
provided that, without stockholder approval, no amendment shall (i) materially
increase the maximum number of shares of Common Stock available for issuance
under the Plan, (ii) materially increase the benefits accruing to participants
under the Plan, or (iii) materially modify the requirements as to eligibility
for participation in the Plan, and provided further, that the Plan may not be
amended more than once every six months except to comport with changes in the
Internal Revenue Code of 1986, as amended, or the regulations thereunder. The
Plan may also be terminated at any time by the Board of Directors.
11. MISCELLANEOUS.
(a) INVESTMENT REPRESENTATION AND REGISTRATION REQUIREMENTS.
Notwithstanding any provision of the Plan to the contrary:
(i) The Company may, at the time of the issuance of the shares of Common
Stock, require a participant to deliver to the Company a written
representation of present intent to hold or acquire shares of Common
Stock solely for the account of the participant for investment
purposes and not for distribution, and that any subsequent offer for
sale or sale of any such shares of Common Stock shall be made either
pursuant to (1) a registration statement on an appropriate form
under the Securities Act of 1933, as amended ("Securities Act"),
which registration statement shall have become effective and shall
be current with respect to the shares of Common Stock being offered
and sold, or (2) a specific exemption from the registration
requirements of the Securities Act (e.g., Section 4(2) of the
Securities Act or Rule 144 promulgated thereunder) and that in
claiming such exemption the holder will, prior to any offer for sale
or sale of such shares of Common Stock, obtain a favorable written
opinion from counsel approved by the Company as to the availability
of such exemption; and
(ii) If at any time the Company determines, in its sole discretion that
the listing, registration or qualification, (or any updating of any
such document) of shares of Common Stock is necessary
18
<PAGE> 21
on any stock exchange or under any federal or state securities or
blue sky law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with, issuance of shares of Common Stock, such shares
shall not be issued unless such listing, registration,
qualification, consent or approval is effected or obtained free of
any conditions not acceptable to the Company.
(b) NO RIGHT TO CONTINUE AS DIRECTOR. Nothing contained in this Plan shall
be deemed to confer upon any person any right to continue as a director
of or to be associated in any other way with the Company.
(c) GOVERNING LAW. To the extent that federal laws do not otherwise
control, the Plan and all determinations made and actions taken
pursuant hereto shall be governed by the law of the State of Delaware.
(d) INUREMENT. This Plan shall be binding upon and shall inure to the
benefit of the Company and each director hereto and their respective
heirs, executors, administrators, successors and assigns.
(e) TRANSFER OF RIGHTS. No interest or expectancy in the Plan shall be
subject to transfer, pledge or assignment, other than by will or the
laws of dissent and distribution in accordance with the terms of the
Plan, and the Company shall not recognize any such assignment, pledge
or transfer.
(f) WITHHOLDING TAXES. The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any
obligations it may have to withhold federal, state or local income or
other taxes incurred by reason of the issuance of shares of Common
Stock under the Plan, including requiring a participant to reimburse
the Company for any taxes required to be withheld or otherwise deducted
and paid by the Company in respect of the issuance of shares of Common
Stock. In lieu thereof, the Company shall have the right to withhold
the amount of such taxes from any other sums due or to become due from
the Company to the participating director upon such terms and
conditions as the Board may prescribe.
(g) NONEXCLUSIVITY. Neither the adoption of the Plan by the Board nor the
submission of the Plan to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting or issuance of
stock options, shares and/or other incentives otherwise than under the
Plan, and such arrangements may be either generally applicable or
applicable only in specific instances.
(h) NO RIGHT TO SPECIFIC ASSETS. Nothing contained in the Plan and no
action taken pursuant to the Plan shall create or be construed to
create a trust of any kind or any fiduciary relationship between the
Company and any participant, the executor, administrator or other
personal representative or designated beneficiary of such participant,
or any other persons. To the extent that any participant or his
executor, administrator, or other personal representative, as the case
may be, acquires a right to receive any payment from the Company
pursuant to the Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company.
(i) SEVERABILITY OF PROVISIONS. If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not
effect any other provisions hereof, and the Plan shall be construed and
enforced as if such provision had not been included.
19
<PAGE> 22
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CASTECH ALUMINUM GROUP INC.
(PURSUANT TO SECTIONS 242 AND 245 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE)
Norman E. Wells, Jr. and Terry D. Smith certify that:
1. They are President and Secretary, respectively, of CasTech Aluminum
Group Inc., a corporation organized and existing under the laws of the State of
Delaware; and
2. The Amended and Restated Certificate of Incorporation of this
corporation is amended and restated to read as follows:
FIRST: The name of the corporation is CasTech Aluminum Group Inc. (the
"Corporation").
SECOND: The address of the Corporation's registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of its registered agent
at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is Twenty-Five Million (25,000,000)
shares of common stock, and the par value of each such share is One Cent
($.01) (the "Common Stock"), and Five Hundred Thousand (500,000) shares of
preferred stock, and the par value of each such share of preferred stock is
One Cent ($.01) (the "Preferred Stock"). Subject to the limitations
prescribed by law and the provisions hereof, the Board of Directors of the
Corporation is authorized to issue the Preferred Stock from time to time in
one or more series, each of such series to have such voting powers, full or
limited, or no voting powers, and such designations, preferences and
relative participating, optional or other special rights, and such
qualifications, limitations or restrictions thereof, as shall be determined
by the Board of Directors in a resolution or resolutions providing for the
issuance of such Preferred Stock. Subject to the powers, preferences and
rights of any Preferred Stock, including any series thereof, having any
preference or priority over, or rights superior to, the Common Stock and
except as otherwise provided by law, the holders of the Common Stock shall
have and possess all powers and voting and other rights pertaining to the
stock of this Corporation and each share of Common Stock shall be entitled
to one vote.
FIFTH: Elections of directors need not be by ballot unless the By-Laws
of the Corporation so provide.
SIXTH: The Board of Directors of the Corporation may make By-Laws and
from time to time may alter, amend or repeal By-Laws.
SEVENTH: To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, a Director
of the Corporation shall not be liable to the Corporation or its
stockholders for the monetary damages for breach of fiduciary duty as a
Director.
20
<PAGE> 23
3. This Second Amended and Restated Certificate of Incorporation was
proposed by the Board of Directors and duly adopted by the stockholders of the
Corporation in the manner and by the vote prescribed by Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have signed this instrument on this
day of , 1996.
Norman E. Wells, Jr., President
Terry D. Smith, Secretary
21
<PAGE> 24
________________________________________________________________________________
CASTECH ALUMINUM GROUP INC.
ANNUAL MEETING OF STOCKHOLDERS AS OF MAY 24, 1996
TO BE HELD ON JULY 18, 1996
CUSIP 148380-108
The undersigned hereby appoints Charles J. Pilliod, Jr. and Norman E.
Wells, Jr., and each of them, as the undersigned's proxies, with full power of
substitution to attend the Annual Meeting of Stockholders of CasTech Aluminum
Group Inc., to be held at Chase Corporate Headquarters, 11th Floor, Room D, 270
Park Avenue, New York, New York on Thursday, July 18, 1996 at 9:00 A.M. Eastern
Standard Time, and any adjournment or adjournments thereof, and to vote thereat
the number of shares which the undersigned would be entitled to vote, with all
the power the undersigned would possess if present in person, as indicated on
the reverse side.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 25
<TABLE>
<S> <C> <C>
The Proxies will vote as specified below, or if a choice is not specified, they Please mark / X /
will vote FOR the nominees listed in Item 1, FOR the proposal described in Item 2, your votes as
FOR the proposal described in Item 3, and FOR the proposal described in Item 4. indicated in
Receipt of the Notice of Annual Meeting of Stockholders and the related Proxy this example
Statement dated May 31, 1996 is hereby acknowledged.
1. Election of Directors: Charles J. Pilliod, Jr., Norman E. Wells, Jr., 2. Proposal to ratify the appointment
Robert D. Lloyd, Thomas P. Salice, Reginald H. Jones, Robert S. Hatfield, of Ernst & Young LLP as the
Ronald D. Glosser, Philip Caldwell, C. Fred Fetterolf. independent public accountants of the
Company for the 1997 Fiscal Year.
FOR ALL WITHHOLD
NOMINEES LISTED AUTHORITY FOR AGAINST ABSTAIN
(except as marked to vote for all / / / / / /
to the contrary) nominees
5. On such other business as may
INSTRUCTION: To withold authority to vote for any individual nominee, properly come before the meeting.
write that nominee's name on the line provided below.)
_______________________________________________________________________________
3. Proposal to adopt The 1996 Non-Employee 4. Proposal to amend the Company's
Directors Stock Plan. Certificate of Incorporation to provide
for a new class of capital stock.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
/ / / / / / / / / / / /
I PLAN TO ATTEND THE MEETING / /
Dated:_____________________________________________________, 1996
_________________________________________________________________________
Signature of Stockholder
__________________________________________________________________________
Signature if Held Jointly
Please date and sign exactly as your name appears hereon, indicating, where
proper, official position or representative capacity.
When signing as Attorney, Executor, Administrator, Trustee, etc., give full
title as such.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
