<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
UCAR INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
(UCAR INTERNATIONAL INC. LOGO)
UCAR INTERNATIONAL INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 2000 AND
PROXY STATEMENT
March 31, 2000
<PAGE> 3
ADMISSION TICKET
UCAR INTERNATIONAL INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 2000 AT 10:00 AM
LOEWS VANDERBILT PLAZA HOTEL
2100 WEST END AVENUE
NASHVILLE, TENNESSEE
PRESENT THIS TICKET TO ADMIT ONE STOCKHOLDER AND ONE GUEST
Name of Stockholder:
------------------------------------------------------------
Address:
------------------------------------------------------------------------
(See reverse side for directions)
<PAGE> 4
FROM THE NORTH ON I-24 OR I-65:
Take I-24 or I-65 South until you reach I-265/Memphis. Take I-265 toward Memphis
until you reach I-40. Take I-40 East/Nashville to Exit 209B, Broadway. Turn
right onto Broadway at the traffic light. Veer right at fork in road onto West
End Avenue. Hotel will be on your right just past 21st Avenue.
FROM THE SOUTH ON I-24 OR I-65:
Take I-24 West or I-65 North to I-40. Take I-40 West to Exit 209A, Broadway.
Turn left onto Broadway. Veer right at fork in road onto West End Avenue. Hotel
will be on your right just past 21st Avenue.
FROM THE EAST ON I-40 (INCLUDING NASHVILLE INTERNATIONAL AIRPORT):
Take I-40 West to Exit 209A, Broadway. Turn left onto Broadway. Veer right at
fork in road onto West End Avenue. Hotel will be on your right just past 21st
Avenue.
FROM THE WEST ON I-40:
Take I-40 East/Nashville to Exit 209B, Broadway. Turn right onto Broadway at the
traffic light. Veer right at fork in road onto West End Avenue. Hotel will be on
your right just past 21st Avenue.
<PAGE> 5
(UCAR INTERNATIONAL INC. LOGO)
UCAR INTERNATIONAL INC. Suite 1100, 3102 West End Avenue, Nashville, TN 37203
GILBERT E. PLAYFORD
Chairman of the Board
March 31, 2000
Fellow Stockholders:
It is my pleasure to invite you to our annual meeting, which will be held
on Tuesday, May 9, 2000, at 10:00 a.m., at the Loews Vanderbilt Plaza Hotel,
2100 West End Avenue, Nashville, Tennessee.
In the following pages, you will find the formal notice of our annual
meeting and our proxy statement. After reading the proxy statement, please mark,
sign and promptly return the enclosed proxy card to ensure that your shares are
represented at the meeting.
We hope that many of you will be able to attend our annual meeting in
person. If you wish to do so, please indicate your intention where requested on
the enclosed proxy card. In addition, please write your name, where indicated,
on the enclosed admission ticket and bring it with you to the meeting.
We appreciate the continuing interest of our stockholders in our business,
and we look forward to seeing you at the meeting.
Sincerely,
/s/ G.E. Playford
Chairman of the Board
<PAGE> 6
(UCAR INTERNATIONAL INC. LOGO)
UCAR INTERNATIONAL INC. Suite 1100, 3102 West End Avenue, Nashville, TN 37203
KAREN G. NARWOLD
Vice President,
General Counsel
and Secretary
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 2000
The annual meeting of stockholders of UCAR International Inc. will be held
at 10:00 a.m. on Tuesday, May 9, 2000, at the Loews Vanderbilt Plaza Hotel, 2100
West End Avenue, Nashville, Tennessee, for the following purposes:
1. To elect 7 directors to serve on UCAR's Board of Directors until
the annual meeting of stockholders for 2001.
2. To transact such other business as may properly come before the
meeting.
To ensure that your shares are represented at the meeting in the event that
you do not attend, please mark and sign the enclosed proxy card and return it in
the enclosed envelope.
By Order of the Board of Directors
/s/ Karen G. Narwold
Vice President, General Counsel and
Secretary
Date: March 31, 2000
<PAGE> 7
(UCAR INTERNATIONAL INC. LOGO)
UCAR INTERNATIONAL INC. Suite 1100, 3102 West End Avenue, Nashville, TN 37203
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS FOR 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information for Stockholders........................ 1
Purpose of Proxy.......................................... 1
How to Vote............................................... 1
Matters to Be Submitted to a Vote......................... 1
Revoking Proxies.......................................... 1
Naming Other Proxies...................................... 1
Who May Vote.............................................. 1
Savings Plan Participants................................. 1
Election of Directors....................................... 1
Nominees.................................................. 1
Meetings of the Board..................................... 3
Committees of the Board................................... 3
Director Compensation..................................... 4
Stock Ownership Guidelines for Directors and Senior
Management............................................. 5
Executive Officer Compensation............................ 5
Report on Executive Compensation.......................... 11
Performance Graph......................................... 13
Security Ownership of Management and Certain Beneficial
Owners................................................. 14
Section 16(a) Beneficial Ownership Reporting Compliance... 14
Certain Transactions...................................... 14
Stockholder Proposals for the Annual Meeting of Stockholders
for 2001.................................................. 15
Independent Public Accountants.............................. 15
Other Information........................................... 15
</TABLE>
<PAGE> 8
GENERAL INFORMATION FOR STOCKHOLDERS
PURPOSE OF PROXY. This proxy statement and the enclosed proxy card relate
to the annual meeting of stockholders of UCAR International Inc., a Delaware
corporation ("UCAR" and, together with its subsidiaries, "WE," "US" or "OUR"),
for 2000. UCAR's Board of Directors is soliciting proxies from stockholders in
order to provide every stockholder an opportunity to vote on all matters
submitted to a vote of stockholders at the meeting, whether or not he or she
attends in person. This proxy statement and the enclosed proxy card are being
mailed to stockholders beginning on or about March 31, 2000.
HOW TO VOTE. You may vote on each matter to be submitted to a vote of
stockholders at the meeting by marking the appropriate box on the proxy card,
signing it and returning it in the enclosed envelope. When the proxy card is
properly signed and returned by you, your shares will be voted at the meeting by
the proxyholders named on the proxy card in accordance with your directions. If
you return the proxy card without marking a box for a specified matter, your
shares will be voted on that matter as recommended by UCAR's Board of Directors.
MATTERS TO BE SUBMITTED TO A VOTE. The only matter known to management to
be submitted to a vote of stockholders at the meeting is the election of
directors. When you sign and return a proxy card, your proxy card gives the
proxyholders the discretionary authority to vote your shares in accordance with
their best judgment on any other business that may come before the meeting.
Unless you specify otherwise, your shares will be voted on any other business as
recommended by UCAR's Board of Directors.
REVOKING PROXIES. If you sign and return a proxy card, you may revoke it
or submit a revised one at any time before the vote to which the proxy card
relates. You may also vote by ballot at the meeting. If you vote by ballot, you
will thereby cancel any proxy which you previously returned as to any matter on
which you vote by ballot.
NAMING OTHER PROXIES. You may designate as your proxy someone other than
those named on the enclosed proxy card by crossing out those names and inserting
the name(s) of the person(s) you wish to have act as your proxy. No more than
three persons should be so designated. In such a case, you must deliver the
proxy card to the person(s) you designated and they must be present and vote at
the meeting. Proxy cards on which other proxyholders have been designated should
not be mailed or delivered to us.
WHO MAY VOTE. Stockholders as of the close of business on March 17, 2000
are entitled to notice of and to vote at our annual meeting. Each share of
common stock, par value $.01 per share, of UCAR is entitled to one vote. As of
March 17, 2000, 45,119,788 shares of common stock were outstanding. Those shares
were held by 62 stockholders of record.
SAVINGS PLAN PARTICIPANTS. If you participate in the UCAR Carbon Savings
Plan (the "SAVINGS PLAN"), your proxy card will represent both the number of
shares registered in your name and the number of shares allocated to your
account in the Savings Plan. All of these shares will be voted by the trustee
for the Savings Plan in accordance with your directions on the proxy card signed
and returned by you.
ELECTION OF DIRECTORS
NOMINEES. Unless you specify otherwise, your shares represented by a proxy
card signed and returned by you will be voted for the election to UCAR's Board
of Directors of each of the seven nominees listed below. UCAR'S BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED BELOW.
The seven nominees listed below were unanimously nominated by UCAR's Board
of Directors. Each nominee has consented to being named as a nominee for
election as a director and agreed to serve if elected. Each nominee who is
elected will serve as a director for one year until his or her successor is
elected at the next annual meeting of stockholders or until his or her earlier
removal or resignation. Except as otherwise described below, if any of the
nominees is not available for election at the time of our annual meeting,
discretionary authority will be exercised to vote for substitutes designated by
UCAR's Board of
1
<PAGE> 9
Directors unless UCAR's Board of Directors chooses to reduce the number of
directors. Management is not aware of any circumstances that would render any
nominee unavailable. The ages of the nominees are given as of March 1, 2000.
Gilbert E. Playford, age 52, became a director in June 1998, when he joined
UCAR as President and Chief Executive Officer. In September 1999, Mr.
Playford also became the Chairman of the Board. From January 1996 to June
1998, he was the President and Chief Executive Officer of LionOre Mining
International Ltd., a Toronto Stock Exchange company which he founded and
which is engaged in mining nickel in Botswana and nickel/gold in Australia.
Prior to founding LionOre Mining International Ltd., of which he continues
to serve as a director and non-executive Chairman, Mr. Playford spent his
career with Union Carbide Corporation ("Union Carbide"). We are the
successor to the Carbon Products Division of Union Carbide. Mr. Playford
began his career in 1972 with Union Carbide in Canada. In 1989, after
several years in Europe and Canada, he was appointed Corporate Vice
President, Strategic Planning of Union Carbide. In 1990, he became Vice
President, Corporate Holdings of Union Carbide. He assumed the additional
responsibility of President and Chief Executive Officer of Union Carbide's
Canadian subsidiary in 1991. Mr. Playford was named Vice President,
Treasurer and Principal Financial Officer of Union Carbide in 1992. In his
capacity as Principal Financial Officer of Union Carbide, he also served as
a nominee of Union Carbide on UCAR's Board of Directors from 1992 until our
leveraged equity recapitalization in January 1995. He took on additional
duties as Vice President for Union Carbide's latex and paint business in
1993. Mr. Playford left Union Carbide in January 1996.
R. Eugene Cartledge, age 70, became a director in February 1996. From 1986
until his retirement in 1994, he was the Chairman of the Board and Chief
Executive Officer of Union Camp Corporation. Mr. Cartledge retired as
Chairman of the Board of Savannah Foods & Industries, Inc. in December
1997. He is a director of Chase Brass Industries, Inc., Sun Company, Inc.
and Delta Air Lines, Inc.
Mary B. Cranston, age 52, became a director in January 2000. Ms. Cranston
is a partner and has served since 1999 as Chairperson of Pillsbury Madison
& Sutro LLP, an international law firm based in San Francisco, California.
Ms. Cranston has been practicing complex litigation, including antitrust,
telecommunications and securities litigation, with Pillsbury Madison &
Sutro LLP since 1975. She is a director of the San Francisco Chamber of
Commerce and the Bay Area Council, and a trustee of the San Francisco
Ballet.
Alec Flamm, age 73, became a director in April 1998. From January 1982 to
August 1985, Mr. Flamm served as President and Chief Operating Officer of
Union Carbide. Mr. Flamm joined Union Carbide in 1949 and held various
marketing and management positions. He retired as a Vice Chairman and a
director of Union Carbide in March 1986. Mr. Flamm served Union Carbide as
Vice Chairman from August 1985 and as a director from 1981.
John R. Hall, age 67, became a director in November 1995. Since July 1997,
he has been the non-employee Chairman of Arch Coal, Inc. He retired as
Chairman effective January 31, 1997 and as Chief Executive Officer
effective October 1, 1996 of Ashland Inc., which positions he had held
since 1981. Mr. Hall served in various engineering and managerial
capacities at Ashland Inc. since 1957. Mr. Hall is a director of Bank One
Corporation, Canada Life Assurance Company, CSX Corporation, Humana Inc.,
Reynolds Metals Company, Arch Coal Inc. and USEC Inc.
Thomas Marshall, age 71, became a director in June 1998. He retired in 1995
as Chairman of the Board and Chief Executive Officer of Aristech Chemical
Corporation, a spinoff of USX Corp., which positions he had held since
1986. Mr. Marshall had previously served in various positions, including
Executive Vice President and Chief Operating Officer - Manufacturing,
Fabricating and Chemicals, for the former U.S. Steel Corp. Mr. Marshall
serves on the Boards of Baron Enterprises and the National Flag Foundation.
He is a trustee of the University of Pittsburgh and a director of the
Thomas Marshall Foundation, which makes grants to organizations working to
improve the quality of life for children and their families.
2
<PAGE> 10
Michael C. Nahl, age 57, became a director in January 1999. He is Senior
Vice President and Chief Financial Officer of Albany International
Corporation, a manufacturer of paper machine clothing, which are the belts
of fabric that carry paper stock through the paper production process. He
joined Albany International Corporation in 1981 as Group Vice President,
Corporate and was appointed to his present position in 1983. Mr. Nahl is a
member of the Chase Manhattan Corporation Northeast Regional Advisory
Board.
In connection with the settlement in October 1999 of the securities class
action lawsuit which had been commenced in April 1998 against UCAR and certain
former and current directors and officers, UCAR has agreed that it will take and
cause to be taken all reasonable and appropriate steps for the nomination for
re-election and the re-election of Ms. Cranston at our annual meetings in 2000,
2001 and 2002 unless she resigns, retires, dies, becomes disabled, is removed or
not re-nominated for good cause shown, is removed or resigns in connection with
a change in control of UCAR, or is not re-elected by our stockholders. If prior
to our annual meeting in 2001, Ms. Cranston ceases to be a director for any of
the reasons mentioned above (other than that relating to a change in control),
then the lead plaintiff in the lawsuit, the Florida State Board of
Administration which is the eighth largest state employees pension fund, and
UCAR shall identify other individuals possessing relevant business, financial,
antitrust compliance, corporate governance and other experience for
consideration as candidates for election as a director. The lead plaintiff shall
recommend one or more of such individuals to be so elected and, upon UCAR's
approval of such individual, UCAR shall be obligated to take the steps described
above with respect to that individual. UCAR has also agreed that Ms. Cranston
and/or such other individual will be appointed as a member of the Audit and
Finance Committee.
MEETINGS OF THE BOARD. UCAR's Board of Directors met five times in 1999.
Each director listed above who was then serving attended all of the meetings of
UCAR's Board of Directors and the meetings of the committees of UCAR's Board of
Directors of which he was a member, except for Mr. Marshall who did not attend
one meeting of UCAR's Board of Directors and one meeting of each of the Audit
and Finance Committee and the Organization, Compensation and Pension Committee.
COMMITTEES OF THE BOARD. UCAR's Board of Directors has three standing
committees. The members of each committee at March 1, 2000, the number of
meetings held by each committee in 1999 and the functions of each committee are
described below. The chairperson of each committee is indicated by an asterisk.
Audit and Finance Committee, which held three meetings in 1999.
Members: Messrs. Flamm* and Nahl and Ms. Cranston. None of our employees
may be a member of the committee.
Functions: Responsible for: policies, procedures and other matters relating
to accounting, internal financial controls and financial
reporting, including the engagement of independent auditors, the
planning, scope, timing and cost of any audit and any other
services the independent auditors may be asked to perform;
reviewing with the independent auditors their report on the
financial statements following completion of each such audit;
reviewing the adequacy and results of the internal accounting
and financial control systems and practices; reviewing with
UCAR's General Counsel legal matters which may have a
significant impact on us; reviewing material financing,
financial planning and hedging, derivative and other capital and
capital market activities, UCAR's dividend and stock repurchase
policies, reports on officers' and directors' expenses and
overseeing policies, procedures and other matters relating to
business integrity and ethics including conflict of interest,
antitrust and insider trading matters.
Nominating Committee, which held two meetings in 1999.
Members: Messrs. Flamm and Nahl* and Ms. Cranston.
3
<PAGE> 11
Functions: Responsible for: reviewing the criteria for election as a
director of UCAR and recommending individuals to UCAR's Board of
Directors for election as directors of UCAR.
Organization, Compensation and Pension Committee, which held three meetings
in 1999.
Members: Messrs. Cartledge, Hall* and Marshall.
Functions: Responsible for: policies, procedures and other matters relating
to employee benefit and compensation plans, including
compensation of the executive officers as a group and the chief
executive officer individually; policies, procedures and other
matters relating to management development; reviewing,
monitoring and recommending (for approval by UCAR's Board of
Directors) plans with respect to succession of officers and
other key employees; administering and making recommendations or
awards under certain cash and stock-based compensation plans;
reviewing and recommending (for approval by UCAR's Board of
Directors) matters relating to the provision of, and payment
for, indemnification to directors and officers in certain
circumstances; review periodically UCAR's policies on management
perquisites, employee relations, equal opportunity employment
and sexual harassment prevention; search for, select and review
annually the performance of investment managers for our
qualified and non-qualified retirement and benefit plans, review
periodically the financial and investment policies and
objectives of such plans and monitor legal compliance for such
plans; and review and make recommendations to the Audit and
Finance Committee relating to actuarial assumptions applicable
to and funding for our retirement and benefit plans.
DIRECTOR COMPENSATION. Employee directors do not receive compensation for
rendering services as directors. All directors are entitled to reimbursement for
all expenses incurred for rendering services as directors. Non-employee
directors are entitled to receive the compensation described below.
Annual Retainer: $25,000 ($27,000, if chairperson of one or more
committees).
Attendance Fee: $1,000 for each meeting attended (but no more than
one fee for multiple meetings held at the same time
as a regularly scheduled meeting of UCAR's Board of
Directors).
Stock Option Grants: Options for 5,000 shares upon initial election as
director granted as described below; options for
additional shares annually (3,200 shares for 2000)
as described below.
Stock Options. In 1998, UCAR's Board of Directors adopted a policy of
awarding options to all non-employee directors. Under the policy, each
individual who was a non-employee director at March 30, 1998, and who,
subsequent to March 30, 1998, became or becomes a non-employee director, has
been or will be granted an option to purchase 5,000 shares of common stock (the
"Initial Grants"). In 1999, UCAR's Board of Directors adopted the policy of
granting, in addition to the Initial Grants, an option to purchase shares of
common stock to each non-employee director serving as such on January 1 of each
year and a prorated number of shares for such portion of the year in which a
non-employee director is elected and serves as such. For 2000, each non-employee
director will receive an option for 3,200 shares of common stock or a prorated
amount thereof. UCAR's Board of Directors determines the number of shares
covered by such options each year for the ensuing year. All of the options vest
one year after the date of grant so long as the director is then serving as a
director. The exercise price per share of an option, for grants made prior to
September 1998, was the average of the high and low trading prices for the 20
business days immediately preceding the date of grant and, for grants made after
September 1998, is the closing sale price of a share of common stock on the last
trading date preceding the date of grant. Options granted to a non-employee
director expire upon the earlier of ten years after the date of grant or four
years after the director ceases to be a director. Other provisions relating to
the options are described below.
Restricted Stock. From 1995 through 1999, all non-employee directors
participated in a stock grant plan which provided that each non-employee
director at January 1, 1996 would be granted 1,000 shares of
4
<PAGE> 12
common stock, which became nonforfeitable over five years at the rate of 200
shares per year on January 1 of each year commencing January 1, 1996. The plan
further provided that each individual who became a non-employee director after
January 1, 1996 would be granted that number of shares of common stock equal to
200 times the number of full or partial years between such date and December 31,
1999, which shares became nonforfeitable in the same manner. The plan expired on
January 1, 2000. Each participant in the plan has voting rights with respect to
those shares which are nonforfeitable. On each date on which shares became
nonforfeitable, a cash payment was made by us to the participants for the
purpose of paying any federal, foreign or state income tax liabilities
associated with the award of those shares.
Other Compensation. UCAR's Board of Directors has in the past and may in
the future award additional cash or stock-based compensation to one or more
directors for special services rendered to UCAR. A former director received
additional retainers of $62,500 and $6,250 for special services rendered in
1999.
STOCK OWNERSHIP GUIDELINES FOR DIRECTORS AND SENIOR MANAGEMENT. UCAR's
Board of Directors has adopted guidelines for ownership of common stock by
directors and senior management. Compliance with these guidelines by directors
and senior management is voluntary.
Under these guidelines, each non-employee director should, within a
reasonable period of time after the later of the adoption of the guidelines or
election as a director, own shares of common stock with a market value equal to
at least $150,000. UCAR's Board of Directors has adopted a policy providing that
we will not finance a director's purchase or holding of these shares.
In addition, under the guidelines, certain members of senior management
should, within five years after the later of adoption of the guidelines or
appointment as a member of senior management, own shares of common stock with a
market value equal to his or her annual base salary (or, in the case of the
chief executive officer, three times his annual base salary). All executive
officers currently comply with the guidelines.
EXECUTIVE OFFICER COMPENSATION. The following table sets forth certain
information concerning compensation received by our chief executive officer at
December 31, 1999 and each of our other four most highly compensated executive
officers at December 31, 1999 who received total salary and bonus compensation
in excess of $100,000 for services rendered in all capacities (including service
as a director of UCAR or an officer or director of one or more of our
subsidiaries) during our last fiscal year. The individuals listed in the
following table are sometimes called the "NAMED EXECUTIVE OFFICERS."
5
<PAGE> 13
SUMMARY COMPENSATION TABLE(A)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------- -----------------------------------
AWARDS PAYOUTS
----------------------- ---------
RESTRICTED SECURITIES LONG TERM
NAME AND VARIABLE OTHER ANNUAL STOCK UNDERLYING PLAN ALL OTHER
PRINCIPAL POSITIONS YEAR SALARY COMPENSATION(B) COMPENSATIONS(C) AWARDS OPTIONS PAYOUTS COMPENSATION(D)
------------------- ---- -------- --------------- ---------------- ---------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gilbert E. Playford... 1999 $540,000 $645,000 $261,514 -- -- -- $ 79,946
Chairman of the
Board, 1998 263,258 42,894 -- 600,000 -- 8,977
Chief Executive
Officer and
President(e)
Craig S. Shular....... 1999 225,000 250,000 78,322 -- 150,000 -- 20,477
Executive Vice
President, Electrode
Sales and Marketing
and Chief Financial
Officer(f)
Peter B. Mancino...... 1999 228,339 175,000 64,210 -- -- -- 27,302
Vice President(g) 1998 212,500 200,000 26,062 -- 100,000 -- 513,575
1997 196,667 425,800 45,242 -- -- -- 27,710
Corrado F. De
Gasperis............ 1999 181,005 175,000 127,698 -- -- -- 14,359
Vice President and
Chief Information
Officer(h)
Petrus J. Barnard..... 1999 188,004 175,000 145,078 -- -- -- 17,788
Executive Vice
President, 1998 172,336 -- 96,573 -- 66,000 -- 22,664
Global Electrode
Supply Chain(i)
</TABLE>
- ---------------
(a) Includes, for each year, compensation earned but deferred under
compensation deferral or other applicable plans or statutory provisions.
(b) Consists of cash bonuses under various plans or as otherwise approved by
UCAR's Board of Directors.
(c) Includes, for 1998 and 1997 (as applicable), respectively: for Mr.
Playford, $11,320, for Mr. Mancino, $9,245 and $29,200, and for Mr.
Barnard, $7,568, of payments under a worldwide group profit sharing plan
for 1998 and a U.S. group profit sharing plan for 1997. Includes, for 1999,
1998 and 1997 (as applicable), respectively: for Mr. Playford, $4,851 and
$740, for Mr. Shular, $13,125, for Mr. Mancino, $13,125, $5,300 and $5,145,
for Mr. De Gasperis, $10,925, and for Mr. Barnard, $5,475 and $10,600, of
financial planning services and related tax advice and, in certain cases,
tax return preparation services; for Mr. Playford, $134,245 and $5,350, for
Mr. Shular, $18,454, for Mr. Mancino, $28,488, $11,517 and $10,897, for Mr.
De Gasperis, $14,502, and for Mr. Barnard, $14,584 and $691, of imputed
interest income and reimbursement for tax liabilities on non-interest
bearing loans made under various programs; for Mr. Playford, $24,795 and
$25,484, and for Mr. Barnard, $14,330 and $19,237, of reimbursement for
miscellaneous expenses and, if applicable, reimbursement for tax
liabilities thereon; for 1999 for Mr. Playford, $97,623, for Mr. Shular
$46,743, for Mr. De Gasperis, $102,271, and for 1999 and 1998 for Mr.
Barnard, $82,488 and $32,627, of reimbursement for relocation expenses and,
if applicable, reimbursement for tax liabilities thereon; for 1999 and 1998
for Mr. Barnard, $28,201 and $25,850, for allowances for international
service; and for Mr. Mancino, $22,597, for accrued vacation paid in 1999.
(d) Includes, for 1999, 1998 and 1997 (as applicable), respectively: for Mr.
Playford, $70,948 (for 1999), for Mr. Shular, $14,477, for Mr. Mancino,
$21,302, $24,619 and $24,110, for Mr. De Gasperis, $5,361, and for Mr.
Barnard, $11,788 and $16,664, for annual life insurance premiums paid on a
split dollar life contract; for Mr. Playford, $8,998 and $8,977, for Mr.
Shular, $6,000, for Mr. Mancino, $6,000, $6,000 and $3,600, for Mr. De
Gasperis, $8,998, and for Mr. Barnard, $6,000 and $6,000, for employer
contributions to the Savings Plan; and for Mr. Mancino, $482,956,
attributable to annuitization of non-funded retirement benefits and
reimbursement for related tax liabilities for 1998. The amount of the whole
life insurance portion reported as paid for the executive is the entire
premium minus that portion of the premium actually paid by the executive.
We recover our contributions following the latest of the executive's
retirement, attainment of age 65 or fifteenth year of participation.
(e) Mr. Playford became Chief Executive Officer and President in June 1998 and
Chairman of the Board in September 1999.
(f) Mr. Shular was Vice President and Chief Financial Officer through 1999 and
became Executive Vice President, Electrode Sales and Marketing and Chief
Financial Officer in February 2000.
(g) Mr. Mancino was Vice President, General Counsel and Secretary until
September 1999 and Vice President through December 1999.
(h) Mr. De Gasperis was Controller through 1999 and became Vice President and
Chief Information Officer in February 2000.
(i) Mr. Barnard was Director, Electrode Operations, Americas through 1999 and
became Executive Vice President, Global Electrode Supply Chain in February
2000.
6
<PAGE> 14
The following table sets forth certain information relating to options
granted to the named executive officers during 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
NUMBER PERCENT OF POTENTIAL REALIZABLE VALUE AT
OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES PRICE EXPIRATION -----------------------------
NAME GRANTED IN 1999 PER SHARE DATE 5% 10%
---- ---------- ---------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gilbert E. Playford............. -- -- -- -- -- --
Craig S. Shular................. 150,000(a) 37% $17.31 9/29/08 $1,577,575 $3,967,055
Peter B. Mancino................ -- -- -- -- -- --
Corrado F. De Gasperis.......... -- -- -- -- -- --
Petrus J. Barnard............... -- -- -- -- -- --
</TABLE>
- ---------------
(a) Constitutes initial grant made to Mr. Shular when he became Vice President
and Chief Financial Officer in January 1999.
The following table sets forth certain information relating to the exercise
of previously granted options by the named executive officers during 1999.
AGGREGATED OPTION EXERCISES IN 1999
AND OPTION VALUES AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF NUMBER OF SECURITIES UNEXERCISED IN THE
SHARES UNDERLYING UNEXERCISED MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT DECEMBER 31, 1999 DECEMBER 31, 1999
NAME EXERCISE REALIZED (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
---- ----------- -------- ----------------------------- ----------------------------
<S> <C> <C> <C> <C>
Gilbert E. Playford............. -- -- 300,000/300,000 $ 225,000/$0
Craig S. Shular................. -- -- 100,000/50,000 50,000/25,000
Peter B. Mancino................ -- -- 315,153/-- 2,272,250/0
Corrado F. De Gasperis.......... -- -- 75,000/21,000 56,250/0
Petrus J. Barnard............... -- -- 182,689/15,472 1,190,124/106,945
</TABLE>
Employment and Other Agreements. In June 1998, UCAR entered into a
five-year employment agreement with Mr. Playford to serve as President and Chief
Executive Officer. The agreement automatically renews for successive additional
one-year terms, unless UCAR gives notice of non-renewal within 90 days prior to
any renewal date or Mr. Playford gives notice of non-renewal at least two years
prior to any renewal date.
Mr. Playford is entitled to receive a base salary (which may be increased
by UCAR's Board of Directors) of $540,000 ($650,000, approved by UCAR's Board of
Directors on December 17, 1999) and annual cash bonuses (commensurate with his
position). In addition, for the purpose of calculating Mr. Playford's benefits
under the UCAR Carbon Retirement Program, (i) Mr. Playford earns, ratably over
the initial term of the agreement, credit for 26.5 years of prior service,
substantially all of which was with Union Carbide, and (ii) the amount of
benefits receivable by Mr. Playford under the UCAR Carbon Retirement Program
will be likewise ratably offset by the amount of benefits receivable by him
under the Union Carbide Retirement Program.
At the time he entered into the employment agreement, Mr. Playford received
options to purchase 300,000 shares of common stock. Two-thirds of the options
vest on the second anniversary of the date of grant and the balance of the
options vest on the third anniversary of the date of grant. The exercise price
per share of the options ($30.58 per share) was equal to the average of the high
and low trading prices for the 20 business days immediately preceding the date
of grant. The options expire in January 2007. Other provisions relating to the
options are described below. In recognition of Mr. Playford's appointment as
Chairman of the Board in September 1999 in addition to President and Chief
Executive Officer, UCAR's
7
<PAGE> 15
Board of Directors approved a grant to Mr. Playford of 100,000 shares of
restricted stock, of which 70,000 shares will vest in June 2003 and 30,000
shares will vest in December 2004, in both cases assuming Mr. Playford is still
employed by UCAR. The grant was made on January 5, 2000.
The agreement provides for termination (subject to certain notice and other
procedural provisions) by UCAR for cause or by Mr. Playford for good reason and
contains a noncompetition covenant which continues for a period of two years
beyond the expiration of the then current term. If UCAR terminates Mr.
Playford's employment without cause or Mr. Playford resigns for good reason,
then Mr. Playford will be entitled to severance payments and enhanced pension
benefits and all of his years of prior service, substantially all of which was
with Union Carbide, will be immediately recognized. Those severance payments
will equal 2.99 times the sum of Mr. Playford's base salary and the cash bonus
paid or payable for the calendar year ending on or immediately before
termination. Mr. Playford's pension benefits will be enhanced by assuming that
he had an additional three years of age and three years of service. These
benefits are payable commencing immediately following termination of employment
and are not reduced for early commencement of benefits.
UCAR has agreed that, for the purpose of calculating Mr. Shular's benefits
under the UCAR Carbon Retirement Program, Mr. Shular earns, ratably over five
years, credit for 22.5 years of prior service, all of which was with Union
Carbide, with the same offset arrangement as Mr. Playford.
In connection with the 1995 Equity Recapitalization, UCAR entered into an
employment agreement with Mr. Mancino. The agreement had a three year initial
term, which expired on January 26, 1998, and provided for automatic renewals for
successive additional one year terms unless UCAR or the officer gives notice of
non-renewal not less than 90 days prior to the expiration of the then current
term or the officer retires in accordance with the applicable retirement plan.
Mr. Mancino retired as General Counsel and Secretary effective September 15,
1999 and as Vice President effective December 31, 1999. The agreement contains a
noncompetition covenant which continues for a period of two years after his
retirement.
Under the agreement, the base salary at the time of retirement for Mr.
Mancino was $235,008. The agreement provided Mr. Mancino with the opportunity to
receive two cash bonuses, the first of which consisted of annual awards as
determined by UCAR's Board of Directors and the second of which was payable if
actual EBITDA (as defined in the agreements) equaled or exceeded specified
targets. The amount of the EBITDA cash bonus equaled 75% of base salary
(excluding increases in base salary subsequent to the 1995 Equity
Recapitalization) for achieving 100% of the specified target, plus an additional
5% of base salary (excluding those increases) for each percentage point by which
actual EBITDA exceeded such specified target. Mr. Barnard is also eligible for
both bonuses. No EBITDA cash bonus payments were made for 1999. The EBITDA cash
bonus plan terminated on December 31, 1999.
UCAR's Board of Directors has determined that, upon his retirement, Mr.
Mancino became entitled to severance payments and enhanced pension benefits as
provided in the agreement. Those severance payments equal two times the sum of
his base salary and the cash bonus paid or payable for 1999, reduced by any
pension payments paid by us under our qualified and nonqualified pension plans
for the two year period following his retirement (or, if Mr. Mancino elects to
defer receipt of such benefits, the amount he would have so received). Mr.
Mancino's pension benefits are enhanced by assuming that he had an additional
three years of age and three years of service. These benefits are not reduced
for early commencement of benefits.
UCAR's Board of Directors has approved severance compensation agreements
for more than 28 members of management, including the current named executive
officers. In the case of the current named executive officers, the agreements
provide for severance compensation equal to 2.99 times the officer's base salary
and, with respect to U.S. employees, extended insurance coverage and
reimbursement for certain excise tax liabilities (and income tax liabilities on
this reimbursement). The officers are entitled to the compensation if they are
terminated (other than for cause) or resign for good reason within 12 months
after a change in control. A change in control has the same meaning under the
agreements as it has under certain stock option agreements as described below.
The employment agreement with Mr. Playford also
8
<PAGE> 16
has a change of control provision similar to the ones under these agreements,
except that it covers termination or resignation within two years after a change
in control.
Stock Options. We maintain several plans which provide for the grant of
options to purchase shares of common stock to management employees and which are
amended from time to time. In 1998, non-employee directors became eligible to
receive options under one of the plans and the number of shares of common stock
subject to plans in which named executive officers and non-employee directors
are eligible to participate was increased to about 7,300,000. Management
employees have been and may be granted vested or unvested options at the
discretion of UCAR's Board of Directors or the Organization, Compensation and
Pension Committee. Unvested options granted to management employees have vested
or may vest on satisfaction of such employment or performance conditions as may
be provided in the plan or as may be imposed by UCAR's Board of Directors or the
Organization, Compensation and Pension Committee at the time of grant. The
exercise price per share of options granted under the plans must equal the fair
market value of a share of common stock on the date of grant. Prior to September
1998, the definition of fair market value under certain plans had been the
average of the high and low trading prices for the 20 business days immediately
preceding the relevant date, except in the case of options granted in connection
with the 1995 Equity Recapitalization. The exercise price per share of those
options was fixed at $7.60 per share, which was the price at which unrelated
third parties purchased a majority of the outstanding shares of common stock on
that date. In September 1998, the definition of fair market value under those
plans was changed to mean the closing sale price of a share of common stock on
the last trading day preceding the relevant date. The exercise price of options
may, under certain circumstances, be paid with the proceeds from the sale of
shares to be issued upon exercise of such options. Any shares subject to, and
the exercise prices of, options are subject to adjustment for stock dividends,
stock splits, share combinations and certain other events. All options which
have been granted, and substantially all options which may be granted, under the
plans are nonqualified stock options. Options awarded to employees expire on,
among other dates, the date fixed by UCAR's Board of Directors or the
Organization, Compensation and Pension Committee at the time the options are
granted, but must expire within no more than 12 years under one plan, or 10
years under other plans, after the date of grant.
UCAR has the right to cancel substantially all outstanding options in the
event of a change in control, in which event UCAR is required to pay
participants an amount equal to the difference between the exercise price of the
canceled options and the fair market value of the underlying shares. For this
purpose, after the plans discussed above were amended in 1998, a change in
control occurs on: (i) the date on which any person or group becomes the
beneficial owner of more than 22.5% of the outstanding common stock; (ii) the
date, at the end of any two-year period, on which individuals, who at the
beginning of such period were directors of UCAR, or individuals nominated or
elected by a vote of 66 2/3% of such directors or directors previously so
elected or nominated ("Incumbent Directors"), cease to constitute a majority of
UCAR's Board of Directors; (iii) the date on which stockholders of UCAR approve
a liquidation or dissolution of UCAR; or (iv) the date on which UCAR consummates
certain reorganizations, mergers, asset sales or similar transactions.
Compensation Deferral. We maintain a compensation deferral plan for the
benefit of United States-paid management employees who participate in a variable
compensation program. The plan is effective for compensation that would
otherwise be payable on or after January 1, 2000. Under the plan, participants
are able to defer up to 85% of their variable compensation, up to 50% of their
base salary and up to 100% of their lump sum payments from our non-qualified
retirement plans. Distributions from the plan generally will be made upon
retirement or other termination of employment, unless further deferred by the
participant. In addition, a participant may irrevocably elect to receive interim
distributions prior to retirement or other termination of employment.
Retirement. Prior to February 25, 1991, substantially all of our domestic
employees participated in the Union Carbide Retirement Program. Effective
February 25, 1991, we adopted the UCAR Carbon Retirement Program, which was
similar to the Union Carbide Retirement Program at that time. The cost of the
UCAR Carbon Retirement Program is borne entirely by us. The UCAR Carbon
Retirement Program covers substantially all of our employees in the U.S. and
certain U.S. nationals employed by our
9
<PAGE> 17
foreign subsidiaries. Retirement and death benefits related to employee service
through February 25, 1991 are covered by the Union Carbide Retirement Program.
Benefits paid by the Union Carbide Retirement Program are based on final average
pay through February 25, 1991 plus salary increases (not to exceed 6% per year)
through January 26, 1995. All of our employees who retired prior to February 25,
1991 are covered under the Union Carbide Retirement Program. Subject to certain
limitations, all service and earnings recognized under the Union Carbide
Retirement Program prior to February 25, 1991 are recognized under the UCAR
Carbon Retirement Program.
The following table sets forth the estimated annual benefits payable, based
on the indicated credited years of service and the indicated average annual
compensation used in calculating benefits, assuming a normal retirement at age
65 in 2000, under the Union Carbide Retirement Program and the UCAR Carbon
Retirement Program on a combined basis.
RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE ANNUAL ---------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40
- -------------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000
150,000 33,570 45,000 56,520 67,500 78,750 90,000
250,000 56,520 75,000 93,750 112,500 131,250 150,000
500,000 112,500 150,000 187,500 225,000 262,500 300,000
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000
</TABLE>
Under the UCAR Carbon Retirement Program, the monthly amount of an
employee's retirement benefit upon retirement at age 65 is a percentage of
average monthly compensation received during the three-year period preceding
retirement, or the highest average monthly compensation received during any
three calendar years in the 10 calendar years preceding retirement if it would
result in a higher pension benefit, multiplied by the number of years of service
credit, less up to 50% of projected primary Social Security benefits and less
any public pension (except any military pension or any benefit under the Social
Security Act). An employee who is (i) age 62 or over with ten or more years of
service credit or (ii) whose age and service credit add up to 85 may voluntarily
retire earlier than age 65 with a retirement benefit unreduced because of early
retirement, based on years of service credit at the date of retirement. The
compensation covered by the UCAR Carbon Retirement Program includes salary and
certain variable compensation, including, through 1999, group profit sharing in
an amount up to 8% of the employee's base salary. The benefits payable reflected
in the preceding table are calculated on a straight life annuity basis and are
subject to an offset for such Social Security benefits.
For federal income tax purposes, the amount of benefits that can be paid
from a qualified retirement plan is restricted. We have adopted nonqualified
unfunded plans for payment of those benefits at retirement that cannot be paid
from our qualified retirement plan. These nonqualified plans together with our
qualified retirement plan constitute the UCAR Carbon Retirement Program.
Employees who retire after January 1, 1994 may elect to receive the payment of
benefits from these nonqualified unfunded plans monthly or in a lump sum.
Benefits under certain of these plans, under certain circumstances, may be
terminated if UCAR's Board of Directors determines that an employee has engaged
in activities which are detrimental to the interests of, or are in competition
with, UCAR. Except as described in the preceding sentence and, with respect to
years of service, as described above for Messrs. Playford and Shular, the
practical effect of these non-qualified plans is to calculate benefits to all
employees, including those who are officers and directors, on a uniform basis.
Benefits under these nonqualified plans are generally paid out of our
general assets, although they may also be paid through a grantor trust adopted
by us or by purchase of annuities. When we purchase annuities, this does not
increase the after tax amount of benefits to which employees are entitled, but
does relieve us of liability for the benefits under the nonqualified plans
covered by such annuities.
10
<PAGE> 18
As of February 28, 2000, the named executive officers were credited with
the number of years of service under the UCAR Carbon Retirement Program (unless
noted otherwise) as follows: Mr. Playford, age 52, is credited with 28 years of
service, substantially all of which was with Union Carbide and which will vest
under the UCAR Carbon Retirement Program ratably through 2003, Mr. Shular, age
47, is credited with 23 years of service, substantially all of which was with
Union Carbide and which will vest under the UCAR Carbon Retirement Program
ratably through 2003, Mr. Mancino, age 57, is credited with 27 years of service
and retired on December 31, 1999, Mr. De Gasperis, age 34, is credited with 1
year of service, and Mr. Barnard, age 50, is credited with 28 years of service,
of which 26 years were with our foreign subsidiaries.
Benefit Security. We have adopted a grantor trust to assist us in
providing for payment of certain benefit plan obligations to management which
are currently paid out of our general assets. These obligations include accrued
benefits under nonqualified retirement plans and severance obligations under
employment and other agreements. In 1998, we used funds in the trust to purchase
annuities to pay certain of those accrued benefits with respect to certain
members of senior management, including Mr. Mancino. The trust is also used to
set aside compensation which is deferred under our compensation deferral plan.
The trust contains a benefits protection account which makes funds
available to the trustee to assist participants and their beneficiaries in
enforcing their claims with respect to those benefits and obligations upon a
change in control. We may from time to time contribute assets to or, with the
approval of a majority of UCAR's Board of Directors, withdraw assets from the
trust (other than from the benefits protection account, to which $250,000 has
been contributed), except that no withdrawal can be made after a change in
control until all such benefits and obligations are paid or discharged. UCAR's
Board of Directors may amend or terminate the trust at any time prior to a
change in control. Upon a change in control, the trust becomes irrevocable, UCAR
is required to make contributions to the trust sufficient to discharge such
obligations or pay such benefits and the trustee is required to use the amounts
held in the trust for such purposes. Upon a change in control, no amendment of
the trust may be adopted without the written consent of a majority of the
participants and the beneficiaries who are receiving benefits. Consistent with
the requirements of applicable law, the assets of the trust are subject to the
claims of creditors of UCAR in the event of UCAR's insolvency or bankruptcy. For
this purpose, a change in control occurs on (i) the date on which any person
beneficially owns more than 35% of the total voting power of UCAR or (ii) the
date at the end of any two-year period on which Incumbent Directors cease to
constitute a majority of UCAR's Board of Directors, except that any transaction
approved by a majority of the Incumbent Directors shall not constitute a change
in control if so determined by two-thirds of the Incumbent Directors.
REPORT ON EXECUTIVE COMPENSATION. In accordance with the rules and
regulations of the SEC, the following report of the Organization, Compensation
and Pension Committee and the table and other information under the caption
"Performance Graph" appearing immediately thereafter shall not be deemed to be
soliciting material within the meaning of Regulations 14A and 14C under the
Securities Exchange Act of 1934, filed with the SEC under the Exchange Act or
otherwise subject to Regulations 14A or 14C or the liabilities of Section 18 of
the Exchange Act and shall not be deemed to be incorporated by reference into
any filing under the Securities Act of 1933 or the Exchange Act, notwithstanding
any general incorporation by reference of this proxy statement into any other
document filed with the SEC.
UCAR's philosophy has always been, and continues to be, to seek to align
the interests of management with the interests of stockholders. UCAR seeks to
implement this philosophy through a combination of base compensation (including
benefits) and stock and cash-based incentives. In general, base compensation is
intended to be sufficient to attract and retain and motivate qualified
management employees. Stock-based incentive compensation is designed to reward
management for increases in the market value of the common stock. The Committee
believes that this is the primary interest of stockholders and that, over the
long term, improvements in the financial performance of UCAR's business will be
the primary drivers of such increases. The Committee also recognizes that,
notwithstanding improvements in financial performance, increases in market value
may not be realized on a timely basis
11
<PAGE> 19
due to external factors beyond management's control. These include macroeconomic
factors such as changes in interest rates and monetary and fiscal policies in
the United States and elsewhere. The Committee believes that cash-based
incentive compensation is an important element in keeping management focused on
improving UCAR's financial performance despite those external factors.
Implementation of this philosophy is tempered by several factors. First,
competition for qualified management employees is intense. Second, UCAR
continues to face antitrust and other legal issues even though many of such
issues have been resolved. At the same time, it has encountered a very difficult
business environment. This is due to, among other things, economic conditions
which are materially adversely affecting the global steel and metal industries
that are UCAR's principal customers.
Since mid-1998, UCAR has put in place a new management team. Viewing that
development and other changed conditions as an opportunity to make adjustments
(to the extent feasible under existing contracts), executive compensation has
been both reset and simplified from the plan that had been put in place in
connection with the 1995 Equity Recapitalization. This new approach to executive
compensation consists primarily of base salary, annual cash bonuses and stock
options and restricted stock. Each of the components mentioned is awarded to the
chief executive officer by UCAR's Board of Directors based on recommendations of
the Committee and to the other members of senior management by UCAR's Board of
Directors based on recommendations by the chief executive officer as well as the
Committee.
Base salary for each member of senior management is determined after taking
into account his or her current or new position and current base salary,
salaries and other compensation offered by other companies for individuals in
equivalent positions, the performance during the prior year of the business or
functional unit for which he or she was responsible and, to the extent relevant,
the geographic area in which he or she is or will be employed.
Annual cash bonuses awarded to each member of senior management are
determined based on the factors mentioned above, achievement of specified goals
during the prior year and performance of UCAR as a whole during the prior year.
Annual cash bonuses for each year are determined and payable in the following
year. The specified goals for 1999 related to earnings per share, cost savings,
cash flow and strategic initiatives, including those contained within UCAR's
financial plans announced in September 1998. Since annual cash bonuses were not
generally paid for 1998 due to, among other things, the short time period for
which new management had been in place and UCAR's financial performance in 1998,
the annual cash bonuses for 1999 represented approximately one and one-half
times normalized annual cash bonuses. The specified goals for 2000 relate to
return on invested capital, cash flow and cost savings.
Stock options granted to each member of senior management are determined
based on the same factors mentioned above. In September 1998, UCAR's Board of
Directors granted options to each member of senior management in amounts equal
to approximately three times normalized annual grants. These grants were and are
expected to be the only major grants to be made to these members of senior
management through 2000, aside from those in connection with promotions and
similar events. The options had two vesting periods, a short-term period
designed to retain management employees while UCAR's global restructuring and
rationalization plan is being implemented and a long-term period designed to
retain management employees for an extended period, subject to accelerated
vesting if target prices for the common stock were met. Such target prices were
achieved and all of such options have vested.
Mr. Playford's compensation for 1999 was determined on the same basis as
other members of senior management (commensurate with his position), but with
adjustments to take into account incentives to induce him to assume increased
leadership and responsibility for UCAR, as he took on the additional
responsibilities of Chairman of the Board, under continuing difficult
circumstances, as well as his experience and prior familiarity with UCAR's
business and industry.
Section 162(m) of the Internal Revenue Code of 1986 limits the
deductibility by public companies of certain executive compensation in excess of
$1 million per executive per year, but excludes from the calculation of the $1
million limit certain elements of compensation, including performance based
12
<PAGE> 20
compensation, provided that certain requirements are met. While the Committee
and UCAR's Board of Directors considered the impact of Section 162(m) in
connection with adopting and implementing the philosophy described above, they
do not believe that Section 162(m) is a significant factor in determining the
amount or types of compensation to be paid to senior management or the
conditions to payment of such compensation.
R. Eugene Cartledge
John R. Hall
Thomas Marshall
PERFORMANCE GRAPH. The graph set forth below shows cumulative total return
to stockholders on an initial investment of $100 in the common stock as compared
to an initial investment of $100 in the Standard & Poor's 400 Midcap Index and
the NYSE Industrials Index over the period from August 10, 1995, the first
trading date for the common stock, through December 31, 1999. Total return
assumes dividend reinvestment. The performance shown on the graph is not
necessarily indicative of future performance.
Sources: Compustat, Bloomberg L.P.
(PERFORMANCE GRAPH)
<TABLE>
<CAPTION>
10 AUG 95 31 DEC 95 31 DEC 96 31 DEC 97 31 DEC 98 31 DEC 99
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
UCAR INTERNATIONAL INC................ $100.00 $125.58 $140.00 $148.61 $ 74.99 $ 74.99
S&P MIDCAP 400 INDEX.................. 100.00 106.41 126.87 167.76 190.34 216.30
NYSE INDUSTRIALS...................... 100.00 109.80 133.62 173.34 195.93 217.45
</TABLE>
13
<PAGE> 21
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS. The
following table sets forth, as of March 10, 2000, the number and percentage of
outstanding shares of common stock owned beneficially by: (i) each stockholder
known by UCAR to own more than 5% of the outstanding shares of common stock;
(ii) each director of UCAR; (iii) each of the named executive officers; and (iv)
all directors and executive officers as a group. The number of shares of common
stock outstanding as of March 10, 2000 was 45,119,788.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
BENEFICIAL OWNER NUMBER OF SHARES SHARES
---------------- ---------------- -------------
<S> <C> <C>
Southeastern Asset Management, Inc.(a).................... 8,900,200 19.7%
6075 Poplar Avenue, Suite 900
Memphis, TN 38119
Gilbert E. Playford(b).................................... 458,286 1.0%
Craig S. Shular(b)........................................ 185,869 *
Peter B. Mancino(b)(c).................................... 176,338 *
Corrado F. De Gasperis(b)(d).............................. 103,872 *
Petrus J. Barnard(b)...................................... 197,828 *
R. Eugene Cartledge(b).................................... 21,800 *
Mary B. Cranston(e)....................................... 2,000 *
Alec Flamm(b)............................................. 14,400 *
John R. Hall(b)........................................... 22,000 *
Thomas Marshall(b)(f)..................................... 210,400 *
Michael C. Nahl(b)(g)..................................... 24,900 *
Directors and executive officers as a group(h) (13
persons)................................................ 1,691,597 3.7%
</TABLE>
- ---------------
* Represents holdings of less than one percent
(a) Based solely upon the amended Schedule 13G filed as of February 9, 2000 by
such stockholder with the SEC. Such stockholder may be part of a group
which filed the amended Schedule 13G jointly.
(b) Includes shares subject to vested options as follows: Mr. Playford, 300,000
shares; Mr. Shular, 150,000 shares; Mr. Mancino, 143,359 shares; Mr. De
Gasperis, 75,000 shares; Mr. Barnard, 182,689 shares; Mr. Cartledge, 5,000
shares; Mr. Flamm, 5,000 shares; Mr. Hall, 5,000 shares; Mr. Marshall,
5,000 shares; and Mr. Nahl, 5,000 shares.
(c) As of December 31, 1999.
(d) Includes 4,500 shares owned by Mr. De Gasperis' spouse.
(e) Owned by the Mary & Harold Cranston Family Trust of which Ms. Cranston is
Trustee.
(f) Includes 75,000 shares owned through a self-directed IRA and 75,000 shares
owned by the Thomas Marshall Foundation, of which Mr. Marshall is a
director.
(g) Includes 1,700 shares owned for the account of Mr. Nahl's minor child.
(h) Based solely upon registered ownership. Includes 1,097,681 shares subject
to vested options and options that are scheduled to vest by May 30, 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Exchange Act requires UCAR's directors and officers and holders of more than
10% of the outstanding shares of common stock to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of UCAR. UCAR believes that, during 1999, its directors
and officers and holders of more than 10% of the outstanding shares of common
stock complied with all reporting requirements under Section 16(a).
CERTAIN TRANSACTIONS. In connection with the 1995 Equity Recapitalization,
we provided interest-free loans (i) in an aggregate amount of $2 million to
members of management who purchased stock and received additional restricted
matching stock pursuant to an equity ownership program and (ii) in the aggregate
amount of $1 million to members of management who elected to recognize income
pursuant to Section 83(b) of the Internal Revenue Code at the time they received
the restricted matching stock. In addition, we agreed to reimburse the borrowers
for the incremental income tax liability (at such time as such liability is
incurred) due on interest income imputed because of the interest-free nature of
the loans.
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Although the loans generally are nonrecourse to the borrowers, we are permitted
to offset severance payments which are otherwise payable to the borrowers upon
their termination of employment by the amount of any outstanding loan. Mr.
Mancino was the only named executive officer who had such a loan outstanding in
1999. The outstanding amount of the loan to Mr. Mancino at December 31, 1999,
which is also the largest aggregate amount of such loan outstanding during 1999,
was $102,547.
In 1998, UCAR's Board of Directors adopted an executive employee loan
program. All members of senior management are eligible to participate in the
program. Under the program, participants are able to borrow, on a full recourse
basis, an amount equal to up to their annual base salary (or, in the case of the
chief executive officer, three times his annual base salary). The loans are non
interest-bearing and become due upon the earlier to occur of termination of
employment or the expiration of five years from the date of borrowing. We have
agreed to reimburse the borrowers for the incremental income tax liability (at
such time as such liability is incurred) due on the interest income imputed
because of the interest-free nature of the loans. The outstanding amount of each
such loan to a named executive officer at December 31, 1999, which is also the
largest aggregate amount of each such loan outstanding during 1999, was:
$1,620,000 for Mr. Playford; $225,000 for Mr. Shular; $215,000 for Mr. Mancino;
$175,000 for Mr. De Gasperis; $176,000 for Mr. Barnard; and an aggregate of
$1,196,000 for all other executive officers as a group.
In 1998, UCAR's Board of Directors adopted an executive employee stock
purchase program. All members of senior management are eligible to participate
in the program. Under the program, participants are able to purchase shares of
common stock from UCAR in an amount equal to up to their annual base salary (or,
in the case of the chief executive officer, three times his annual base salary).
The purchase price per share under the program equals the closing price of a
share of common stock on the last trading day prior to the date of purchase.
During January 1999, Mr. Shular purchased 12,996 shares at a purchase price of
$17.31 per share.
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING OF STOCKHOLDERS FOR 2001.
Proposals which stockholders wish to have considered for inclusion in the proxy
statement for the annual meeting of stockholders for 2001 must be received at
UCAR's principal executive office on or before November 25, 2000. UCAR's By-Laws
provide that notice of a proposal by a stockholder must be received by the
Secretary of UCAR not later than the date that is 120 days before the meeting
before which such proposal is to be brought, except in certain circumstances,
and must contain detailed information regarding the proposal and the stockholder
making the proposal. Proxyholders named in the proxy card enclosed with that
proxy statement will have discretionary authority to vote on any proposal
submitted after such deadline.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP has been recommended by the Audit and Finance Committee and
selected by UCAR's Board of Directors to audit our books and accounts for 2000.
Representatives of KPMG LLP will be present at the meeting, will be given
the opportunity to make a statement if they desire to do so and will respond to
appropriate questions of stockholders.
KPMG LLP has advised us that neither it nor any of its members has any
direct financial interest in UCAR as a promoter, underwriter, voting trustee,
director, officer or employee.
All professional services rendered by KPMG LLP during 1999 were furnished
at customary rates.
OTHER INFORMATION
The presence, in person or by proxy, of stockholders holding a majority of
the outstanding shares of common stock entitled to vote at the meeting is
necessary to constitute a quorum for the transaction of business.
The nominees receiving a plurality of the votes cast will be elected as
directors.
Only those votes cast for or against a proposal are used in determining the
results of a vote.
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Abstentions and broker nonvotes are each included for purposes of
determining the presence or absence of a sufficient number of shares to
constitute a quorum. With respect to the approval of any particular proposal,
abstentions are considered present at the meeting, but since they are not
affirmative votes for the proposal they will have the same effect as votes
against the proposal. Broker nonvotes, on the other hand, are not considered
present at the meeting for the particular proposal for which the broker withheld
authority to vote.
In addition to the solicitation of proxies by mail, officers or other
employees, without extra remuneration, may solicit proxies by telephone or
personal contact.
We will request brokerage houses, nominees, custodians and fiduciaries to
forward soliciting material to beneficial owners of common stock and will pay
such persons for forwarding such material.
All costs for the solicitation of proxies by UCAR's Board of Directors,
anticipated to be approximately $10,000, will be borne by us.
A list of stockholders entitled to vote at the meeting will be available
for examination by stockholders during ordinary business hours during the 10
days prior to the meeting at UCAR's principal executive offices at Suite 1100,
3102 West End Avenue, Nashville, Tennessee.
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1. Election of Directors
FOR all nominees listed below.
WITHHOLD AUTHORITY to vote for all nominees listed below.
*EXCEPTIONS
Nominees: Gilbert E. Playford, R. Eugene Cartledge, Mary B. Cranston, Alec
Flamm, John R. Hall, Thomas Marshall and Michael C. Nahl.
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions_____________________________________________________________________
In their discretion the Proxies are authorized to vote upon such other matters
as may properly come before the meeting or any adjournment to postponement
thereof.
If you plan to attend the meeting, please check here.
Change of Address and or Comments mark Here.
The signature on this Proxy should correspond exactly with stockholders name as
printed to the left. In the case of joint tenancies both stockholders should
sign. Persons signing as Attorney, Executor, Administrator, Trustee or Guardian
should give their full title.
Dated:__________________, 2000
______________________________
(Signature)
______________________________
(Signature)
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
Voices must be indicated (x) in Black or Blue ink.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
UCAR INTERNATIONAL INC.
PROXY/VOTING INSTRUCTION CARD
This proxy is solicited on behalf of the Board of Directors of
UCAR International Inc.
For the Annual Meeting of Stockholders on May 9, 2000
The undersigned appoints Gilbert E. Playford, Craig S. Shular and Karen
G. Narwold, and each of them with full power of substitution in each, the
proxies of the undersigned, to represent the undersigned and vote all shares of
UCAR International Inc. Common Stock which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders to be held on May 9, 2000, and at any
adjournment or postponement thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is given, this
proxy will be voted FOR the election for the nominees listed on the reverse
side. If you are a participant in the UCAR Carbon Savings Plan (the "Savings
Plan"), the front of this Proxy Card shows units allocated to you under the
Savings Plan. The actual number of shares allocated to you and which will be
voted on your behalf at the Annual Meeting of Stockholders in respect of such
units may vary slightly in accordance with the provisions of the Savings Plan.
(Continued, and to be dated and signed, on the other side)
UCAR INTERNATIONAL INC.
P.O. BOX 11202
NEW YORK, NY 10203-0202
