DEF 14A: Definitive proxy statements
Published on
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or
(s)240.14a-12
KAISER ALUMINUM CORPORATION
(Name of Registrant as Specified In Its Charter)
KAISER ALUMINUM CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
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Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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and states how it was determined.
[ ] Check box if any part of the fee is offset as provided by
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which the offering fee was paid previously. Identify the
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Notes:
[KAC Logo]
April 29, 1994
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders (the "Annual Meeting") of Kaiser Aluminum Corporation (the
"Company") to be held at 9:00 a.m. on Wednesday, May 25, 1994, at the
Westchase Hilton Hotel, 9999 Westheimer Road, Houston, Texas.
At the Annual Meeting, the holders of the Company's common stock,
par value $.01 per share (the "Common Stock"), $.65 Depositary Shares
(the "Depositary Shares") and 8.255% PRIDES SM, Convertible Preferred
Stock, par value $.05 per share (the "PRIDES") (all such holders being
collectively referred to as the "Stockholders") will consider and vote,
as a single class, in the election of directors.
Each Depositary Share represents one tenth of a share of the
Company's Series A Mandatory Conversion Premium Dividend Preferred Stock,
par value $.05 per share (the "Series A Shares"). The Series A Shares
have been deposited with The First National Bank of Boston, as Depositary
(the "Depositary"). As the registered holder of the Series A Shares, the
Depositary will vote the Series A Shares represented by the Depositary
Shares at the Annual Meeting pursuant to instructions given to the
Depositary by the holders of such Depositary Shares. Holders of
Depositary Shares will therefore exercise their vote by instructing the
Depositary pursuant to the instruction card enclosed with the proxy
statement.
Holders of shares of PRIDES have 4/5 vote for each share held of
record and are entitled to vote together with the holders of Common
Stock.
Each Stockholder of record at the close of business on March 31,
1994 is entitled to receive notice of and vote at the Annual Meeting and
is urged to attend the Annual Meeting. Whether or not you intend to be
present at the Annual Meeting, we urge you to complete, date, sign and
promptly return the enclosed proxy card or instruction card, as the case
may be.
We look forward to seeing as many of you as possible at the Annual
Meeting.
GEORGE T. HAYMAKER, JR.
Chairman of the Board and
Chief Executive Officer
KAISER ALUMINUM CORPORATION
5847 San Felipe, Suite 2600
Houston, Texas 77057
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 1994
The Annual Meeting of Stockholders (the "Annual Meeting") of
Kaiser Aluminum Corporation (the "Company") will be held at the Westchase
Hilton Hotel, 9999 Westheimer Road, Houston, Texas, on Wednesday, May 25,
1994, at 9:00 a.m., Houston time, for the following purposes:
1. To elect six (6) directors to hold office until the
Company's 1995 Annual Meeting of Stockholders or
until their respective successors are elected and
qualified; and
2. To transact such other business as may properly be
presented to the Annual Meeting or any adjournments
or postponements thereof.
Holders of record of the Company's common stock, par value $.01
per share (the "Common Stock"), $.65 Depositary Shares (the "Depositary
Shares") and 8.255% PRIDES , Convertible Preferred Stock, par value $.05
per share (the "PRIDES") (all such holders being collectively referred to
as the "Stockholders") as of the close of business on March 31, 1994 are
entitled to notice of and to vote at the Annual Meeting. All
Stockholders will vote as a single class at the Annual Meeting.
Stockholders' lists will be available commencing May 11, 1994, and may be
inspected for purposes germane to the Annual Meeting during normal
business hours prior to the Annual Meeting at the offices of the Company,
5847 San Felipe, Suite 2600, Houston, Texas.
By Order of the Board of Directors
BYRON L. WADE
Secretary
April 29, 1994
IMPORTANT
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY OR INSTRUCTION
CARD, AS THE CASE MAY BE, AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
PROVIDED FOR YOUR CONVENIENCE AND WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. ANY HOLDER OF COMMON STOCK OR PRIDES ENTITLED TO VOTE
AND PRESENT AT THE ANNUAL MEETING MAY VOTE PERSONALLY ON ALL MATTERS
BROUGHT BEFORE THE ANNUAL MEETING AND, IN THAT EVENT, HIS OR HER PROXY
WILL NOT BE USED. HOLDERS OF DEPOSITARY SHARES MAY ONLY VOTE BY
COMPLETING THE ENCLOSED INSTRUCTION CARD AND RETURNING THE CARD TO THE
DEPOSITARY. THE DEPOSITARY WILL VOTE THE SERIES A MANDATORY CONVERSION
PREMIUM DIVIDEND PREFERRED STOCK (THE "SERIES A SHARES") REPRESENTED BY
THE DEPOSITARY SHARES IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN THE
ABSENCE OF SPECIFIC INSTRUCTIONS FROM THE HOLDERS OF DEPOSITARY SHARES,
THE DEPOSITARY WILL ABSTAIN FROM VOTING WITH RESPECT TO THE SERIES A
SHARES UNDERLYING THE DEPOSITARY SHARES FOR WHICH NO INSTRUCTIONS HAVE
BEEN GIVEN.
KAISER ALUMINUM CORPORATION
5847 SAN FELIPE, SUITE 2600
HOUSTON, TEXAS 77057
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 1994
This proxy statement is furnished to Stockholders (as defined
below) in connection with the solicitation of proxies on behalf of the
Board of Directors of Kaiser Aluminum Corporation (the "Company"), a
Delaware corporation, to be voted at an Annual Meeting of Stockholders
(the "Annual Meeting") to be held on May 25, 1994 and any adjournments
thereof, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting. The principal executive offices
of the Company are located at 5847 San Felipe, Suite 2600, Houston, Texas
77057, telephone (713) 267-3777.
This proxy statement, the accompanying proxy or instruction
card, as the case may be, and the Notice of Annual Meeting are being
mailed to the record holders as of the close of business on March 31,
1994 of the Company's common stock, par value $.01 per share (the "Common
Stock"), $.65 Depositary Shares (the "Depositary Shares"), and Preferred
Redeemable Increased Dividend Equity Securities , 8.255% PRIDES ,
convertible preferred stock, par value $.05 per share (the "PRIDES") (all
such holders being collectively referred to as the "Stockholders")
commencing on or about May 2, 1994.
We cordially invite you to attend the Annual Meeting. Whether
or not you plan to attend, please complete, date, sign and promptly
return your proxy card in the enclosed envelope if you are a holder of
Common Stock or PRIDES or your instruction card if you are a holder of
Depositary Shares. If you are a holder of Common Stock or PRIDES, you
may revoke your proxy at any time prior to its exercise at the Annual
Meeting by giving notice to the Company's Secretary, by filing a later
dated proxy or, if you attend the Annual Meeting, by voting your shares
in person. If you are a holder of Depositary Shares, you may revoke your
instruction to The First National Bank of Boston, as Depositary ("the
Depositary") at any time prior to the second business day immediately
preceding the date of the Annual Meeting by giving notice to the
Depositary or by filing a later dated instruction card with the
Depositary. Proxies will be voted in accordance with the directions
specified thereon or, in the absence of instructions, "FOR" the election
of the directors named in this proxy statement. Holders of Depositary
Shares may only vote by completing the enclosed instruction card and
returning the card to the Depositary. Each Depositary Share represents
one-tenth of a share of the Company's Series A Mandatory Conversion
Premium Dividend Preferred Stock (the "Series A Shares"). The Depositary
will vote the Series A Shares represented by the Depositary Shares in
accordance with such instructions. In the absence of specific
instructions from the holders of Depositary Shares, the Depositary will
abstain from voting with respect to the Series A Shares underlying the
Depositary Shares for which no instructions have been given. Under
applicable Delaware law, abstentions and broker non-votes will have no
effect on the outcome of the election of directors. Abstentions and
broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business.
ELECTION OF DIRECTORS
At the Annual Meeting, six directors will be elected by the
stockholders to serve until the 1995 Annual Meeting or until their
respective successors are duly elected and qualified. The six nominees
receiving the highest number of votes will be elected.
The six persons nominated for election to the Board of
Directors at the Annual Meeting, all of whom are now currently members of
the Board of Directors, are Robert J. Cruikshank, George T. Haymaker,
Jr., Charles E. Hurwitz, Ezra G. Levin, Robert Marcus and Paul D. Rusen.
See, "Executive Officers and Directors" and "Principal Stockholders" for
information concerning each of the nominees, including the dates on which
they first became directors, their business experience during the past
five years and the number of shares of the Company's capital stock owned
beneficially by each of them as of March 31, 1994. Each of the nominees
has consented to serve as a member of the Board of Directors if elected.
The persons named in the proxies will vote the shares
represented thereby for the election of the foregoing named nominees
except where authority has been withheld as to a particular nominee or as
to all such nominees. Should any nominee decline or be unable to serve
as a director of the Company, which is not anticipated, the persons named
in the proxies will vote for the election in his stead of such other
person as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
ALL NOMINEES FOR DIRECTOR OF THE COMPANY.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company (sometimes referred to
herein as the "Board") held four meetings and acted by written consent on
twelve occasions during 1993. In addition, management confers frequently
with its directors on an informal basis to discuss Company affairs.
During 1993, no director attended fewer than 75% of the aggregate of the
meetings of the Board and all Committees on which he served, except for
John B. Connally who, due to illness, attended 60% of such meetings.
The Board of Directors of the Company has several standing
committees, including Executive, Audit and Compensation Committees.
The Executive Committee meets on call and has authority to act
on most matters during the intervals between meetings of the entire Board
of Directors. Its current members are Messrs. Haymaker and Hurwitz
(Chairman). The Committee held one meeting and acted by written consent
four times during 1993.
The Audit Committee presently consists of Messrs. Levin, Marcus
(Chairman) and Rusen. The Audit Committee meets with appropriate Company
financial and legal personnel, internal auditors and independent public
accountants and reviews the internal controls of the Company and the
objectivity of its financial reporting. This Committee recommends to the
Board the appointment of the independent public accountants to serve as
auditors in examining the corporate accounts of the Company. The
independent public accountants periodically meet privately with the Audit
Committee and have access to the Committee at any time. The Audit
Committee met on two occasions during 1993.
The Compensation Committee reviews and advises management,
makes recommendations to the Board, and reviews and approves proposals
regarding the establishment or change of benefit plans, salaries or
compensation afforded the executive officers and other employees of the
Company. Messrs. Cruikshank, Levin (Chairman) and Marcus currently serve
as members of this Committee. The Compensation Committee met on three
occasions during 1993.
The Board of Directors of the Company does not have a standing
nominating committee nor does it have any committee performing a similar
function.
DIRECTOR COMPENSATION
Directors who were not employees of the Company or its
principal subsidiary, Kaiser Aluminum & Chemical Corporation ("KACC"),
received a base fee of $30,000 for the 1993 calendar year. Non-employee
directors of the Company who are also directors of MAXXAM Inc.
("MAXXAM"), the Company's parent, may receive additional director or
committee fees for serving as a director of the Company and/or KACC.
During 1993, Mr. Levin received an aggregate $7,250 in such committee
fees from the Company and KACC. Subject to the approval of the Chairman
of the Board, directors may also be paid additional ad hoc fees for
extraordinary services in the amount of $750 per half day or $1,500 per
day for such services. Mr. Rusen was paid additional fees of $7,500 for
extraordinary services, and $9,963 as reimbursement for expenses incurred
therewith, performed for the Company and KACC in 1993. Directors are
reimbursed for travel and other disbursements relating to Board and
Committee meetings. Fees to directors who are also employees of the
Company or KACC are deemed to be included in their salary. Directors of
the Company are also directors of KACC and received the foregoing
compensation for acting in both capacities.
In addition to the compensation payable as a director for 1993,
the Chairman of each of the Executive, Audit and Compensation Committees
was paid a fee of $3,000 per year for services as Chairman of such
committee. All members of such committees receive a fee of $1,500 per
day per committee meeting held in person on a date other than a Board
meeting date and $500 per formal telephonic committee meeting.
In November 1988, one of the Company's former directors, Mr.
John B. Connally entered into a one year consulting agreement with MAXXAM
Group Inc. ("MGI"), a wholly owned subsidiary of MAXXAM, under which Mr.
Connally received $250,000. The agreement was subsequently renewed each
year on the same terms and was effective until June 1993.
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information, as of the
record date, with respect to the executive officers and directors of the
Company and KACC. All officers and directors hold office until their
respective successors are elected and qualified or until earlier
resignation or removal.
George T. Haymaker, Jr. Mr. Haymaker, age 56, assumed the
positions of Chairman of the Board and Chief Executive Officer of the
Company and KACC effective January 1, 1994. From May 1993 to December
1993, Mr. Haymaker served as President and Chief Operating Officer of the
Company and KACC. Mr. Haymaker was elected a director of the Company at
the Company's Annual Meeting of Stockholders on May 19, 1993, and was
also elected a director of KACC at KACC's Annual Meeting of Stockholders
held on June 15, 1993. From 1987 to April 1993, Mr. Haymaker had been a
partner in a partnership which acquires, redirects and operates small to
medium sized companies in the metals industry. He served as President
from February 1992 to March 30, 1993, and has been a director since July
1987 of Metalmark Corporation, which is in the business of semi-
fabrication of aluminum specialty foils and extrusions. From May 1986
until February 1993, he also served as President of West Coast Sales
Corp., which provides management and acquisition services. Mr. Haymaker
also served as Chief Executive Officer and a director of Amarlite
Architectural Products, Inc. ("Amarlite"), a producer of architectural
curtain wall and entrance products, from August 1990 to April 1992 and
from April 1989 to February 1993, respectively. He was a director of
American Powdered Metals Company, which is engaged in the manufacture of
powdered metal components, from August 1988 to March 1993, and Hayken
Metals Asia Limited, which represents manufacturers of aluminum and metal
products, from January 1988 to April 10, 1993. During 1984 to 1986, Mr.
Haymaker served as Executive Vice President--Aluminum Operations of
Alumax Incorporated, responsible for all primary aluminum and
semifabricating activities. Mr. Haymaker has extensive experience in the
management of businesses engaged in the production and sale of aluminum
and aluminum products, including 25 years of experience in a variety of
executive and managerial positions with Aluminum Company of America and
its subsidiaries.
Joseph A. Bonn. Mr. Bonn, age 50, has been Vice President,
Planning and Administration of the Company and KACC since February 1992
and July 1989, respectively. Mr. Bonn has served as a Vice President of
KACC since April 1987 and served as Senior Vice President--Administration
of MAXXAM from September 1991 through December 31, 1992. He was also
KACC's Director of Strategic Planning from April 1987 until July 1989.
John T. La Duc. Mr. La Duc, age 51, has been Vice President
and Chief Financial Officer of the Company since June 1989 and May 1990,
respectively. He has been Chief Financial Officer of KACC since January
1990 and a Vice President of KACC since June 1989. From January 1, 1993
until April 5, 1993, Mr. La Duc served as Treasurer of the Company and
KACC, having previously served as Treasurer of the Company from September
1987 to May 1990 and Assistant Treasurer of the Company from February
1987 to September 1987. Mr. La Duc also previously served as Treasurer
of KACC from September 1987 until January 1990, after having served as
Assistant Treasurer of KACC from April 1985 until 1987. He was
Treasurer, International Operations of KACC from 1982 until 1984. In
September 1990, Mr. La Duc was elected Senior Vice President and Chief
Financial Officer of MAXXAM. Mr. La Duc also serves as a Vice President
and Chief Financial Officer of MGI, The Pacific Lumber Company ("Pacific
Lumber"), an indirect subsidiary of MAXXAM engaged in forest products
operations, and Pacific Lumber's subsidiary, Scotia Pacific Holding
Company ("Scotia Pacific"). He also serves as a director of MGI, Pacific
Lumber and Scotia Pacific.
Anthony R. Pierno. Mr. Pierno, age 62, has served as Vice
President and General Counsel of the Company and KACC since January 1992.
He also serves as Senior Vice President and General Counsel of MAXXAM,
positions he has held since February 1989. Mr. Pierno also serves as
Vice President and General Counsel of MGI, Pacific Lumber and Scotia
Pacific and as a director of MGI and Pacific Lumber since November 1993.
Immediately prior to joining MAXXAM, Mr. Pierno served as partner in
charge of the business practice group in the Los Angeles office of the
law firm of Pillsbury, Madison & Sutro. He has served as the
Commissioner of Corporations of the state of California and as chair of
several committees of the State Bar of California. Mr. Pierno is
Chairman of the Board of Trustees of Whittier College, and a former
member and Chairman of the Board of Trustees of Marymount College.
Byron L. Wade. Mr. Wade, age 47, has served as Vice President
and Secretary of the Company and KACC since January 1992, and Deputy
General Counsel of the Company and KACC since May 1992 and June 1992,
respectively. Mr. Wade has also served as Vice President and Deputy
General Counsel of MAXXAM since May 1990, and Secretary of MAXXAM since
October 1988. He previously served as Assistant Secretary and Assistant
General Counsel of MAXXAM from November 1987 to October 1988 and May
1990, respectively. Mr. Wade has served as Vice President, Secretary and
Deputy General Counsel of Pacific Lumber and Scotia Pacific since June
1990 and November 1992, respectively, and as Vice President, Secretary
and Deputy General Counsel of MGI since July 1990. He had previously
served since 1983 as Vice President, Secretary and General Counsel of MCO
Resources, Inc., a publicly traded oil and gas company, which was
majority owned by MAXXAM. Since July 1993, Mr. Wade has served as a
director, Vice President and Secretary of SHRP, Inc. ("SHRP"), the sole
general partner of Sam Houston Race Park, Ltd., a Texas limited
partnership, which has been granted a license to operate a horse racing
facility in Harris County, Texas. Since July 1993, Mr. Wade has also
served as a director, Vice President and Secretary of SHRP Capital Corp.
("SHRP Capital"), a wholly owned subsidiary of Sam Houston Race Park,
Ltd.
Robert E. Cole. Mr. Cole, age 47, has been a Vice President of
KACC since March 1981. Since September 1990, Mr. Cole also has served as
Vice President--Federal Government Affairs of MAXXAM, MGI and Pacific
Lumber. He also currently serves as Chairman of the Board of National
Environmental Development Association, and as a director, Secretary and
Treasurer of Global Climate Coalition, both of which are 501(c)(6)
organizations.
John E. Daniel. Mr. Daniel, age 58, has been a Vice President
of KACC since January 1992, and has been the General Manager of KACC's
primary aluminum products business unit since November 1990. From
November 1990 to January 1992, he was Divisional Vice President of the
Company's primary aluminum products business unit. From December 1989 to
November 1990, Mr. Daniel was Reduction Plant Manager of the Company's
Tacoma, Washington plant. From July 1986 to December 1989, he was
Reduction Plant Manager of the Company's formerly owned Ravenswood, West
Virginia plant.
Richard B. Evans. Mr. Evans, age 46, has been a Vice President
of KACC since January 1, 1992, and has been the General Manager and
Divisional Vice President of KACC's flat-rolled products business unit
since January 1989. From July 1986 to January 1992, he was Divisional
Vice President of KACC's flat-rolled products business unit.
Geoffrey W. Smith. Mr. Smith, age 47, has been a Vice
President of KACC since January 1992, and has been Co-General Manager of
KACC's alumina business unit since September 1991. From September 1990
to January 1992, Mr. Smith was Divisional Vice President of KACC's
alumina business unit. From August 1988 to August 1990, Mr. Smith was
Director of Business Development for the alumina business unit, and from
1982 to August 1988, he was Operations/Technical Manager for the Gramercy
Works.
Lawrence L. Watts. Mr. Watts, age 47, has been a Vice
President of KACC since January 1992, and has been Co-General Manager of
KACC's alumina business unit since September 1991. From June 1989 to
January 1992, Mr. Watts was Divisional Vice President, Governmental
Affairs and Human Resources, for the alumina business unit, and from July
1988 to June 1989, he was Divisional Vice President, Public Relations and
Governmental Relations, for the alumina business unit. From September
1984 to July 1988, Mr. Watts was Manager, Human Resources for the alumina
business unit.
Charlie Alongi. Mr. Alongi, age 63, has been the Controller of
the Company and KACC since July 1989, and was the Assistant Controller of
KACC from February 1982 until July 1989.
Kris S. Vasan. Mr. Vasan, age 44, became Treasurer of the
Company and KACC in April 1993. Mr. Vasan previously served the Company
and KACC as Corporate Director of Financial Planning and Analysis from
June 1990 until April 1993. From October 1987 until June 1990, he served
as Associate Director of Financial Planning and Analysis.
Robert J. Cruikshank. Mr. Cruikshank, age 63, was appointed a
director of the Company and KACC on January 26, 1994. In addition, he
has been a director of MAXXAM since May 1993. Mr. Cruikshank was a
Senior Partner in the international public accounting firm of Deloitte &
Touche from December 1989 until his retirement in March 1993. Prior to
its merger with Touche Ross & Co. in December 1989, Mr. Cruikshank served
as Managing Partner of Deloitte Haskins & Sells from June 1974 until the
merger, and served on such firm's board of directors from 1981 to 1985.
Mr. Cruikshank also serves as a director of Houston Industries
Incorporated, a public utility holding company with interests in electric
utilities, cable television, coal and transportation businesses; Compass
Bank of Texas; and Texas Biotechnology Incorporated.
Charles E. Hurwitz. Mr. Hurwitz, age 53, has served as a
director of the Company since October 1988 and of KACC since November
1988. Mr. Hurwitz has also served as a member of the Board of Directors
and the Executive Committee of MAXXAM since August 1978 and was elected
Chairman of the Board and Chief Executive Officer of MAXXAM in March
1980. Since May 1982, Mr. Hurwitz has been Chairman of the Board and
Chief Executive Officer of MGI. Since January 1, 1993, Mr. Hurwitz has
also served MAXXAM and MGI as President. Since July 1993, Mr. Hurwitz
has also served as a director and Chairman of the Board of SHRP and
director, Chairman of the Board and President of SHRP Capital. From May
1986 until February 1993, Mr. Hurwitz served as a director of Pacific
Lumber, and from December 31, 1992 until February 1993, he served as
Chairman of the Board of Pacific Lumber. Mr. Hurwitz has been, since
January 1974, Chairman of the Board and Chief Executive Officer of
Federated Development Company ("Federated"), a New York business trust
primarily engaged in the management of real estate investments.
Ezra G. Levin. Mr. Levin, age 60, has been a director of the
Company since July 1991. He has been a director of KACC since November
1988, and a director of MAXXAM since May 1978. Mr. Levin also served as
a director of the Company from April 1988 to May 1990, and as a director
of MGI from May 1982 through December 1993. Mr. Levin is a partner in
the law firm of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel. He
serves as a trustee of Federated and as a director of Pacific Lumber,
Scotia Pacific and UMB Bank and Trust Company.
Robert Marcus. Mr. Marcus, age 69, has been a director of the
Company and KACC since September 1991. From 1987 to January 1992, Mr.
Marcus was a partner in American Industrial Partners, a San Francisco and
New York based firm specializing in private equity investments in
industrial companies. From 1983 to 1991, Mr. Marcus was a director of
Domtar Inc., a Canadian resource-based multi-business corporation. From
1982 to 1987, Mr. Marcus served as President and Chief Executive Officer
of Alumax Inc., an integrated aluminum company.
Paul D. Rusen. Mr. Rusen, age 58, has been a director of the
Company since July 1991. Mr. Rusen previously served as a director of
the Company from May 1987 to May 1990. Mr. Rusen has served as a
director of KACC since April 1986. He is President of Employee
Ownership, Inc., an investment banking firm, Chairman of Bliss/Salem
Corporation, a rolling mill manufacturing company, former Chairman and
Chief Executive Officer of Pittsburgh Forgings Company, a former director
of Wheeling-Pittsburgh Steel Corporation and a former principal of
Working Equity, Inc., an investment banking firm.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 31, 1994, the
undiluted beneficial ownership of the Company's capital stock by (i)
those persons known by the Company to own beneficially more than 5% of
the shares of the capital stock then outstanding, (ii) each of the
directors and the named executive officers, and (iii) all directors and
executive officers of the Company as a group.
OWNERSHIP OF CERTAIN PARENTS OF THE COMPANY
As of March 31, 1994, MAXXAM owned approximately 60% of the
issued and outstanding capital stock in the Company on a fully diluted
basis. The following table sets forth, as of March 31, 1994, the
beneficial ownership of the Common Stock and Class A $.05 Non-Cumulative
Participating Convertible Preferred Stock ("Class A Preferred Stock") of
MAXXAM by the directors and nominees for director of the Company, and by
the Company's directors and executive officers as a group:
At March 15, 1994, 28,000,000 shares of the Company's Common
Stock owned by MAXXAM were pledged as security for two MGI debt issues
consisting of $100.0 million aggregate principal amount of 11 1/4% Senior
Secured Notes due 2003 and $126.7 million aggregate principal amount of
12 1/4% Senior Secured Discount Notes due 2003.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation information, cash
and non-cash, for each of the Company's last three completed fiscal years
with respect to the Chief Executive Officer and the four most highly
compensated executive officers of the Company (collectively referred to
as the "named executive officers") for the fiscal year ended December 31,
1993:
OPTION/SAR GRANTS TABLE
The following table sets forth certain information concerning
options to purchase Common Stock granted in fiscal year 1993 to any of
the named executive officers, of which there was only one:
Mr. Haymaker's options set forth in the tables above and below
were granted under the Kaiser 1993 Omnibus Stock Incentive Plan upon such
plan being approved by the Company's stockholders in May 1993. The
options to purchase shares of the Company's Common Stock vest 20% on the
anniversary date of the grant and an additional 20% on each anniversary
date thereafter until fully vested.
OPTION/SAR EXERCISES AND FISCAL YEAR END VALUE TABLE
The table below provides information on an aggregated basis
concerning each exercise of stock options (or tandem SARs) and
freestanding SARs during the fiscal year ended December 31, 1993 by each
of the named executive officers, of which there were none, and the 1993
fiscal year-end value of unexercised options and SARs.
The SARs set forth in the above table for Messrs. La Duc and
Pierno were granted under MAXXAM's 1984 Phantom Share Plan. The SARs are
exercisable for cash, MAXXAM common stock or a combination thereof at the
discretion of MAXXAM's Board of Directors, and vest with respect to 20%
on the anniversary date of the grant and an additional 20% on each
anniversary date thereafter until fully vested.
PENSION PLAN TABLE
KACC maintains a qualified, defined-benefit Retirement Plan
(the "Kaiser Retirement Plan") for salaried employees of KACC and co-
sponsoring subsidiaries who meet certain eligibility requirements. The
table below shows estimated annual retirement benefits payable under the
terms of the Kaiser Retirement Plan to participants with the indicated
years of credited service. These benefits are reflected without
reduction for the limitations imposed by the Internal Revenue Code of
1986, as amended (the "Code") on qualified plans and before adjustment
for the Social Security offset, thereby reflecting aggregate benefits to
be received under the Kaiser Retirement Plan and the Kaiser Supplemental
Benefits Plan (as defined below).
The estimated annual retirement benefits shown are based upon the
assumptions that current Kaiser Retirement Plan provisions remain in
effect, that the participant retires at age 65, and that the retiree
receives payments based on a straight life annuity for his lifetime.
Messrs. Hutchcraft, La Duc and Bonn had 37.8, 24.3 and 26.5 years of
credited service, respectively, on December 31, 1993. Monthly retirement
benefits, except for certain minimum benefits, are determined by
multiplying years of credited service (not in excess of 40) by the
difference between 1.50% of average monthly compensation for the highest
base period (of 36, 48 or 60 consecutive months, depending upon
compensation level) in the last 10 years of employment and 1.25% of
monthly primary Social Security benefits.
The compensation covered by the Kaiser Retirement Plan includes
base salary and bonus payments. Mr. Hutchcraft had compensation covered
by the Kaiser Retirement Plan in 1993 of $450,000, which differed by more
than 10% from that set forth in the Summary Compensation Table (column
(c) plus column (d) thereof). Mr. Hutchcraft's accrued vacation pay for
1993 did not qualify as compensation for purposes of the Kaiser
Retirement Plan.
Participants are entitled to retire and receive pension
benefits, unreduced for age, upon reaching age 62 or after 30 years of
credited service. Full early pension benefits (without adjustment for
Social Security offset prior to age 62) are payable to participants who
are at least 55 years of age and have completed 10 or more years of
pension service (or whose age and years of pension service total 70) and
who have been terminated by KACC or an affiliate for reasons of job
elimination or partial disability. Participants electing to retire prior
to age 62 who are at least 55 years of age and have completed 10 or more
years of pension service (or whose age and years of pension service total
at least 70) may receive pension benefits, unreduced for age, payable at
age 62 or reduced benefits payable earlier. Participants who terminate
their employment after five years or more of pension service, or after
age 55 but prior to age 62, are entitled to pension benefits, unreduced
for age, commencing at age 62 or actuarially reduced benefits payable
earlier. For participants with five or more years of pension service or
who have reached age 55 and who die, the Kaiser Retirement Plan provides
a pension to their eligible surviving spouses. Upon retirement,
participants may elect among several payment alternatives including, for
most types of retirement, a lump-sum payment. Mr. Hutchcraft elected to
receive such lump-sum payment in the amount of $1,086,328 upon his
retirement as reflected in column (i) of the Summary Compensation Table.
All executive officers who are also employees and other regular
employees of MAXXAM automatically participate in the MAXXAM Pension Plan
(the "Pension Plan"), a noncontributory, funded plan. Benefits equal the
sum of an employee's "past service benefit" and "future service benefit."
Benefits are based on an employee's base salary or wages, plus overtime
(excluding bonuses, commissions, incentive compensation and all other
extra compensation).
Under the Pension Plan, the annual past service benefit is the
greatest of
(i) benefits accrued under the plan through December 31, 1986,
(ii) the product of (a) the sum of 0.8% of the participant's
Past Service Compensation Base (as defined), plus 0.8% of
his Past Service Compensation Base in excess of $15,000
multiplied by (b) his credited years of service prior to
January 1, 1987, or
(iii) the product of 1.2% of his Past Service Compensation
Base multiplied by his credited years of service
prior to January 1, 1987.
For 1987 and 1988, the annual future service benefit equaled
1.6% of an employee's compensation up to two thirds of the Social
Security wage base, plus 2.4% of any remaining compensation. Effective
January 1, 1989, the annual future service benefit equals 1.75% of an
employee's compensation for each year of participation, plus 0.6% of the
employee's compensation in excess of $10,000.
The amount of an employee's aggregate compensation that may be
included in benefit computations under the Pension Plan is limited to
$235,840 for 1993. This amount is reduced to $150,000 beginning in 1994.
Benefits are generally payable as a lifetime annuity or, with respect to
married employees, as a 50% joint and survivor annuity, or, if the
employee elects (with spousal consent), in certain alternative annuity
forms. Benefits under the Pension Plan are not subject to any deductions
for Social Security or other offsets. The covered compensation for 1993
and credited years of service as of December 31, 1993 for the Pension
Plan and estimated annual benefits payable upon retirement at normal
retirement age for the named executive officers (other than those
compensated by KACC who do not participate in the Pension Plan), of which
there was only one, were as follows: Mr. Pierno: $235,840--4 years--
$35,783.
The projected benefits shown above were computed as lifetime
annuity amounts, payable beginning at age 65. The benefit amounts
reflect a covered compensation limit of $150,000 for 1994 and subsequent
years under Section 401(a)(17) of the Code. In addition, the amounts
reflect a maximum benefit limit of $118,800 for 1994 and subsequent years
(with early retirement reductions where applicable) that is placed upon
annual benefits that may be paid to a participant in the Pension Plan at
retirement under Section 415 of the Code. Combined plan limits
applicable to employees participating in both defined contribution and
defined benefit plans have not been reflected.
Kaiser Supplemental Benefits Plan
KACC maintains an unfunded, non-qualified Supplemental Benefits
Plan (the "Kaiser Supplemental Benefits Plan"), the purpose of which is
to restore benefits which would otherwise be paid from the Kaiser
Retirement Plan or the Supplemental Savings and Retirement Plan, a
qualified Section 401(k) plan (the "Kaiser Savings Plan"), were it not
for the limitations imposed by the Code. Participation in the Kaiser
Supplemental Benefits Plan includes all employees of KACC and its
subsidiaries whose benefits under the Kaiser Retirement Plan and Kaiser
Savings Plan are likely to exceed the maximum dollar limitations imposed
by the Code. Eligible participants are entitled to receive the
equivalent of the Kaiser Retirement Plan and Kaiser Savings Plan benefits
which they may be prevented from receiving under those plans because of
Code limitations. Mr. Hutchcraft received a benefit payment in the
amount of $1,890,765 upon retirement under the Kaiser Supplemental
Benefits Plan, as reflected in column (i) of the Summary Compensation
Table.
Kaiser Termination Payment and Benefits Continuation Policy
Most full-time salaried employees of KACC are eligible for
benefits under an unfunded termination policy if their employment is
involuntarily terminated, subject to a number of exclusions. The policy
provides for lump sum payments after termination ranging from one-half
month's salary for less than one year of service graduating to eight
months' salary for 30 or more years of service. The amounts payable to
Messrs. La Duc and Bonn under the policy if they had been involuntarily
terminated on December 31, 1993 would have been $120,000 and $126,175,
respectively.
MAXXAM Supplemental Executive Retirement Plan
Effective March 8, 1991, MAXXAM adopted an unfunded
non qualified Supplemental Executive Retirement Plan (the "SERP"). The
SERP provides that participants are entitled to receive benefits which
would have been payable to such participants under the Pension Plan
except for the limitations imposed by the Code. Participants in such
plan are selected by MAXXAM's Board of Directors or are entitled to
participate by virtue of provisions in their employment agreements. Only
one executive officer of the Company, Mr. Pierno, was entitled to receive
benefits under the SERP during 1993.
The following projections for Mr. Pierno are based on the same
assumptions as utilized in connection with the Pension Plan projections
above. The 1994 qualified plan pay limit ($150,000) and benefit limit
($118,800) are reflected for all years in the future. In addition, no
future increases in the participant's covered compensation amount from
the 1993 levels are assumed.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Pursuant to an employment agreement dated October 1, 1992, A.
Stephens Hutchcraft, Jr. held the position of President of the Company
and KACC, and from January 1, 1993 through December 31, 1993, Mr.
Hutchcraft also became the Chairman and Chief Executive Officer of the
Company and KACC. Mr. Hutchcraft's agreement provided for a 1993 base
salary of $450,000 and for termination of his participation in the LTIP
as of December 31, 1992, with payment of his estimated account balance
thereunder on December 31, 1992 with any adjustment from estimated to
actual balance determined after preparation of audited financial
statements for 1992, to be made on or about April 10, 1993. Pursuant to
this agreement, Mr. Hutchcraft was paid $1,358,000 on December 31, 1992
and $18,874 on April 8, 1993 on account of his LTIP account balance.
Also, Mr. Hutchcraft was paid $100,000 upon his retirement under Section
4.5 of his employment agreement, which provided for additional retirement
benefits based on a formula, subject to a $100,000 maximum. Prior to the
time of his election as Chairman of the Board and Chief Executive Officer
of the Company and KACC, Mr. Hutchcraft served as Chief Operating Officer
in addition to President of the Company and KACC and his compensation was
established pursuant to the base salary program and bonus plan for
executives and managers of the Company generally, as described below, and
based on certain performance factors. See "Compensation Committee Report
on Executive Compensation." The compensation set forth in Mr.
Hutchcraft's agreement was also established in recognition of his
previous compensation history, in anticipation of his new additional
responsibilities as Chairman of the Board, his personal leadership
qualities and industry expertise widely recognized in the Company and in
the aluminum industry, and also as an incentive to Mr. Hutchcraft to
continue in the employ of the Company. Upon his retirement as of
December 31, 1993, Mr. Hutchcraft received payments under the Kaiser
Retirement Plan and the Kaiser Supplemental Benefits Plan, as reflected
in column (i) of the Summary Compensation Table.
On April 1, 1993, the Company entered into an employment
agreement with Mr. George T. Haymaker, Jr. pursuant to which Mr. Haymaker
joined the Company in May 1993 as President and Chief Operating Officer
until he was named Chairman and Chief Executive Officer of the Company
effective January 1, 1994 upon Mr. Hutchcraft's retirement. Mr.
Haymaker's agreement has a term of five (5) years, provides for a base
salary of $450,000 per annum and a bonus target of 50% of his salary
beginning fiscal year 1994. Mr. Haymaker was not paid a bonus for
calendar 1993 pursuant to the terms of the agreement. Any bonus actually
awarded for 1994 or thereafter could be less or greater than the target
level, depending upon corporate performance as compared to corporate plan
objectives, as well as individual performance. Pursuant to Mr.
Haymaker's agreement, he received an initial award under the Plan upon
its approval by stockholders of options to purchase up to 100,000 shares
of Common Stock at its fair market value on the date of the award. Such
options vest 20% per year for a period of five (5) years and are
reflected in the Summary Compensation Table.
In the event of a change of control of the Company or KACC
which within one year thereafter adversely affects Mr. Haymaker's title,
position, duties, responsibilities or compensation, Mr. Haymaker's
employment agreement provides that he may elect to be deemed terminated
without cause, and therefore, entitled to a severance payment in an
amount equal to two times his base annual salary reduced by any payment
made as discussed under "Pension Plan Table--Kaiser Termination Payment
and Benefits Continuation Policy" above. Additionally, in the event of
such termination, Mr. Haymaker's options for 100,000 shares of Common
Stock shall fully vest.
Mr. Haymaker's employment agreement further provides that he
vests 20% per year in an unfunded non-qualified supplemental benefit,
payable at retirement after age 62, equal to a benefit determined as if
his Kaiser Retirement Plan pension were based on his aggregate service
with KACC and a prior employer (25 years), less his pension from that
prior employer and any retirements from KACC.
Mr. Pierno and MAXXAM entered into a five-year employment
agreement effective as of March 8, 1990. Pursuant to the terms of the
agreement, Mr. Pierno was entitled during 1993 to a base salary of
$321,232 per year, which amount is increased annually by an amount not
less than the increase in the Consumer Price Index for that year. The
agreement provided for a bonus for the year 1992 in an amount not less
than 75% and not more than 125% of Mr. Pierno's then base salary.
Although the agreement specifies no bonus percentage for the years 1993
and 1994, a bonus as reflected in the Summary Compensation Table was paid
during 1993, and in the employment agreement MAXXAM expresses an intent
to pay a bonus during 1994 in the same percentage range. The agreement
also entitles Mr. Pierno to participate in employee benefit plans and
programs applicable to senior executives of MAXXAM.
Mr. La Duc held the positions of Vice President and Chief
Financial Officer of the Company and KACC and Senior Vice President and
Chief Financial Officer of MAXXAM pursuant to an employment agreement
among MAXXAM, KACC and Mr. La Duc, which commenced September 26, 1990,
and expired December 31, 1993. The employment agreement provided for an
initial base salary of $190,000, with any increases at the discretion of
KACC and MAXXAM. Currently, Mr. La Duc continues in his employment in
such positions with the Company, KACC and MAXXAM. Subject to limitations
pursuant to the LTIP, an annual bonus may be paid under the terms of the
KACC bonus plan. Mr. La Duc is eligible to participate in the employee
benefit plans and programs maintained by KACC, as from time to time in
effect, applicable to senior executives of KACC, including, but not
limited to, the Plan.
KACC and MAXXAM entered into an employment agreement with Mr.
Joseph A. Bonn, Vice President, Planning and Administration of the
Company and KACC. The employment agreement has a term of three years
ending June 30, 1994, and provides for an initial base salary of
$210,000, which has and may increase at the discretion of KACC and
MAXXAM. Subject to limitations pursuant to the LTIP, an annual bonus may
be paid under the terms of the KACC bonus plan. Mr. Bonn is eligible to
participate in the employee benefit plans and programs maintained by
KACC, as from time to time in effect, applicable to senior executives of
KACC, including, but not limited to, the Plan.
COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
The members, the names of whom this report appears over, served
on the Company's Compensation Committee during all of 1993. The
Company's principal subsidiary, Kaiser Aluminum & Chemical Corporation
("KACC"), has the same members on its Committee. Although certain plans
or programs in which executive officers of the Company participate are
jointly sponsored by the Company and KACC, executive officers of the
Company are directly employed and compensated by KACC. References to the
"Company" made in the remainder of this report of the Committee are
deemed to include KACC as well as the Company. The Committee reviews and
approves proposals which cover the initiation, modification or
termination of benefit plans, salaries or other compensation except where
such functions are performed by a plan committee, a board of directors of
a subsidiary of the Company or as covered by collective bargaining
arrangement or other binding contract.
In performing its responsibilities, the Committee frequently
obtains reports and/or recommendations from management, particularly from
the Company's President and its Vice President-Planning and
Administration, and from time to time and on an ad hoc basis, reports,
studies or recommendations from outside compensation consulting firms.
Generally, the Committee holds regular meetings in connection with the
regular meetings of the board of directors, which are usually four times
per year, and meets more frequently during the third and fourth quarters
of the year. The Committee's actions with respect to salary, bonus and
other elements of executive compensation are generally effectuated as of
the first of the calendar year and approved by the Committee as early as
September and as late as January. The Company's compensation philosophy
consists of three key priorities:
Cash flow and profit enhancement - Compensation
programs are designed to support the primary corporate
objective of long-term cash flow and profit generation. Both
annual and longer term variable compensation programs are
utilized and designed to emphasize performance measures that
contribute to long-term cash flow and corporate profits
generation.
Business unit orientation - Sensitivity to various of
the Company's decentralized business units requires a
development of operational objectives at major business
component units.
Incentive emphasis - Strong emphasis is placed on
incentives, so that compensation can, to the degree possible,
reward an individual's efforts to achieve the short- and long-
term objectives of the unit or function for which he or she has
responsibilities.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The Company's compensation of its executive officers is
administered in an overall program which includes the managers and other
key employees of its six operating divisions. Under the direction of the
Committee, management prepares recommendations for the Committee based,
generally, on the following methodology:
Comparator Companies - Using a data base, a select
group of approximately 20 companies is used as a primary
comparator group. The group indexes a mix of major customers,
suppliers, competitors and regionally equivalent comparable
companies. Two of the three companies that make up the S&P 500
Aluminum Industry Index are included in this group. These
companies usually range in size from $1 billion to about $13
billion in assets. They typically average $4 billion in annual
revenues. The data are size-adjusted to allow comparisons to
the Company based on revenues.
Position Matching - The Company develops a
description of various key positions and their major
responsibilities. These include the scope of the job as
indicated by unit sales levels, number of employees, production
levels, reporting level and other relevant factors. These
positions are matched to data base descriptions to insure an
accurate match to reasonably comparable positions at
comparative companies.
Annual Bonus Incentives - The Company maintains a
bonus plan for officers and managers which was first approved
by stockholders in 1967. It was last materially amended in
1989. Early in each year, a target bonus award, based on the
Company's target financial and operating plan for the year, is
established. In establishing the target, target bonus levels
at comparator companies are reviewed, and the target (as a
percent of base compensation) is established at approximately
the median of the target bonus levels of comparator companies.
Performance above expected levels can result in above average
bonus payments. Performance is viewed not only in terms of
earnings, but also within the context of industry trends,
possible longer term impacts of objectives achieved, progress
toward multi-year, general corporate objectives, leadership,
and performance of both regularly assigned duties and
extraordinary contributions. The Committee, pursuant to the
bonus plan, identifies officers and management personnel of the
Company who, by their services, ability, diligence and
ingenuity make direct and important contributions to the
Company's profits, performance, growth and continued success
and authorizes bonus awards payable in cash to such persons.
The Company's general compensation objectives for executives
are: (i) to pay base salaries in approximately the 45th to 50th
percentile of its competitive market, (ii) to utilize bonus awards as
incentives (iii) to allow extra compensation for above average
performance and effort, (iv) to provide long-term incentives which will
result in opportunities for executives and key managers to realize
personal rewards from good long-term performance, (v) to pay other
benefits generally in the 50th percentile of its comparative market, and
(vi) to provide executive perquisites which are at or slightly below its
competitive market level. In determining recommendations to the
Committee for bonus payments to be paid, the Company's Management
considers certain performance weighing factors. For example, the Chief
Executive Officer bonus recommendation is based 75% on corporate
objectives and performance and 25% on individual performance; corporate
staff executives' bonus recommendations are based 50% on corporate
objectives and performance and 50% on individual performance; and
business unit managers' and heads of major plants' bonus recommendations
are based 25% on corporate objectives and performance, 25% on individual
performance, and 50% on business unit or plant objectives and
performance. Elements of corporate performance considered include a
comparison of production and financial results for a period both with the
planned production and financial results for the period and with
production and financial results of competitors within the aluminum
industry for the period. Elements of individual performance considered
include a comparison of an individual's planned objectives in areas such
as safety, quality, on-time performance, budget, development and
implementation of strategic plans, and other projects. Consideration of
such factors, and giving the relative weight to such factors described
above, forms the basis for the determination of whether bonuses will be
paid for a period and of the amount of any such bonuses. Based
principally on the determination that the Company's financial
performance was lower than its planned financial performance
and the performance of its competitors in the aluminum industry
for 1993, it was determined that, with one exception, the Company
or KACC would not pay bonuses in 1993.
One bonus was paid to an executive officer (who is not named in the
Summary Compensation Table) because a business unit's performance
exceeded its plan goals. Two named executive officers received bonuses
from MAXXAM.
DISCRETION OF THE COMMITTEE
After receiving and considering the recommendations of
management, the Committee may consider whatever additional or other
factors it deems to be relevant or appropriate to consider in
establishing or approving compensation levels for executives. Among such
factors may be the cost of living, the establishment of bonus targets as
a percentage of salary, and related quantitative factors. The Committee
is also mindful that the Company is largely involved in the production
and sales of a commodity for which there is a world-wide market and price
structure and therefore considers not only absolute performance but
performance within the context of the world markets and performance of
competitive companies. The Committee considers that activities in one
year may relate to results or growth in another year and that services
provided in difficult times may be more exacting, in some respects, than
those provided in years in which markets provide higher prices, stronger
demand and higher earnings. The Committee also recognizes that the
duties of some executive employees may be more directly linked to short-
term revenues or earnings than others, and that the support provided in
some functions may enable the efforts of others to be more successful.
With respect to compensation levels for 1993, the Committee considered
the depressed world and domestic aluminum industry conditions, the
slightly higher performance in general of the Company's competitors
in the aluminum industry, the Company's performance was lower than
its plan, and non-controllable events or conditions such as the world-
wide glut of supply affecting the aluminum industry as well as
the Company's performance and financial results. After such considera-
tion, the Committee determined that, in general, 1994 salaries would be
kept at 1993 levels. The Committee typically makes its final
compensation determinations in an "Executive Session" at which time it
excludes all non-Committee members which may be affected by the action
or decision.
STOCK/OPTION PLAN
During 1993, the board of directors of the Company adopted, and
the stockholders of the Company approved, the Kaiser 1993 Omnibus Stock
Incentive Plan (the "Plan"). The Plan is utilized to provide those
persons who have substantial responsibility for management and growth of
the Company with an opportunity to increase their ownership of Common
Stock, stock options or related types of benefits. The Plan is used as
the primary long-term incentive program for officers, key employees and
middle managers of the Company. Grants were made under the Plan in 1993
in order to provide long-term retention and performance incentives to the
recipients of the grants. The size of the grants was determined based
upon surveys of jobs at comparator companies similar to the jobs of the
recipients, in order to determine the percentage of compensation for such
jobs that represented long-term incentive compensation. The value
calculated by applying the median of such percentages to each recipient's
base compensation was converted into options for shares of the Company's
stock based upon an approximation of the value of such options for the
thirty days preceding the grant.
EMPLOYMENT AGREEMENTS
From time to time and for various reasons, management and the
board of directors has deemed it appropriate to enter into specific
employment agreements with certain executive officers. Such agreements
may relate, for example, to the further retention of the officer or a
commitment by the officer to relocate to another location. Where such
agreements are made, they are negotiated by the Company's General
Counsel, or his designee under the supervision of the Committee and
reviewed and approved by the board of directors or the Committee. In
making its compensation decisions and in negotiating and approving such
employment contracts, the Committee is mindful of the Company's overall
corporate objectives and its compensation objectives described above as
well as the circumstances making the employment agreement an appropriate
compensation mechanism. Such employment agreements generally range in
term from one to five years. During 1993, Messrs. Hutchcraft, La Duc and
Bonn were employed under employment agreements as discussed under the
heading, "Employment Contracts, Termination of Employment and Change-in-
Control Arrangements."
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER FOR THE LAST COMPLETED FISCAL
YEAR
A. Stephens Hutchcraft, Jr. served as the Chairman of the Board
and Chief Executive Officer ("CEO") of the Company until his retirement
effective December 31, 1993. Mr. Hutchcraft was employed pursuant to a
written employment agreement which was entered into as of October 1,
1992. His 1993 base salary of $450,000 was established at the time of
his employment agreement with the Company pursuant to the base salary
program and bonus plan for executives and managers for the Company
generally and, in part, on a level of compensation in recognition of his
previous compensation history, the assumption of additional
responsibilities as Chairman of the Board, his leadership qualities and
industry expertise widely recognized in the Company and in the aluminum
industry, and as an incentive to continue in the employ of the Company.
Mr. Hutchcraft received a 12.5% increase in his 1993 annual salary over
his 1992 salary. This increase was not based on the Company's 1992
performance but on the factors previously stated. Mr. Hutchcraft's LTIP
payouts in 1991 and 1992 as shown in the Summary Compensation Table
represent the bulk of his benefit under the Company's LTIP and was paid
by virtue of participation percentages therein granted to Mr. Hutchcraft
as a long-term incentive in 1989.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1
million paid to the Chief Executive Officer and four other most highly
compensated executive officers of such corporations. Qualifying
performance-based compensation will not be subject to the deduction limit
if certain requirements are met. No current action on the part of the
Company has been taken for 1994 in response to such Section 162(m) and
the proposed regulations thereunder. The Company does not expect Section
162(m) of the Code to have a material impact upon the deductibility of
compensation paid to its covered executives during 1994. The Company
currently intends to structure the performance-based portion of the
compensation of its executive officers (which currently consists of stock
option grants and the discretionary annual bonuses described above) in a
manner that complies with the new statute and proposed regulations (or as
finalized) thereunder for those executive officers of the Company prior
to such fiscal year as such officers may become subject to such deduction
limitation.
Compensation Committee
of the Board of Directors
Ezra G. Levin, Chairman
Robert Marcus
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of
Directors of the Company was, during the 1993 fiscal year, an officer or
employee of the Company or any of its subsidiaries, or was formerly an
officer of the Company or any of its subsidiaries or, other than Mr.
Levin, had any relationships requiring disclosure by the Company under
Item 404 of Regulation S-K. Mr. Levin served on the Company's
Compensation Committee and Board during 1993. Mr. Levin is also a
partner in the law firm of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel, which provided legal services for the Company and its
subsidiaries during 1993.
During the Company's 1993 fiscal year, no executive officer of
the Company served as (i) a member of the compensation committee (or
other board committee performing equivalent functions) of another entity,
one of whose executive officers served on the Compensation Committee of
the Board of Directors, (ii) a director of another entity, one of whose
executive officers served on the Compensation Committee of the Company,
or (iii) a member of the compensation committee (or other board committee
performing equivalent functions) of another entity, one of whose
executive officers served as a director of the Company.
PERFORMANCE GRAPH
The following performance graph compares, on a quarterly basis
since July 11, 1991, the cumulative total stockholder return on the
Company's Common Stock with the cumulative total returns of the S&P 500
Stock Index and a peer group which consists of companies included by S&P
in its published index for the Aluminum Industry. The graph assumes that
the value of the investment in the Company's Common Stock and each index
was $100 at July 31, 1991 and that all dividends were reinvested. The
data points are calculated as of the last trading day for the month
indicated. The measurement period for the following graph is less than 5
years because the Company only became publicly traded on July 11, 1991,
the date of the commencement of the Company's initial public offering.
CERTAIN TRANSACTIONS
For periods through June 30, 1993, the Company and its
subsidiaries (including KACC) were members of an affiliated group of
corporations (an "Affiliated Group") within the meaning of Section 1504
of the Code, of which MAXXAM is the common parent corporation (the
"MAXXAM Tax Group"). Effective July 1, 1993, the Company and its
subsidiaries are no longer members of the MAXXAM Tax Group (the
"Deconsolidation") but are members of a new Affiliated Group of which the
Company is the common parent corporation (the "New Kaiser Tax Group").
The taxable income and loss and tax credits for the Company and its
subsidiaries for the period January 1, 1993 through June 30, 1993, will
be included in the 1993 MAXXAM Tax Group consolidated Federal income tax
return (the "MAXXAM 1993 Tax Return"). For periods beginning on or after
July 1, 1993 (the "Post Deconsolidation Periods"), the taxable income and
loss and tax credits for the Company and its subsidiaries will be
included in the consolidated Federal income tax returns to be filed for
the New Kaiser Tax Group.
As a consequence of the Deconsolidation, the KACC Tax
Allocation Agreement (as defined below) and the Kaiser Tax Allocation
agreement (as defined below) (collectively, the "Tax Allocation
Agreements") terminated pursuant to their terms, effective with respect
to Post Deconsolidation Periods. The provisions of the Tax Allocation
Agreements will continue to govern taxable periods ending before the date
of the Deconsolidation (the "Pre Deconsolidation Periods"). Therefore,
payments or refunds may still be required by or payable to the Company or
KACC under the Tax Allocation Agreements for Pre Deconsolidation Periods
due to the final resolution of audits, amended returns and related
matters with respect to such Pre Deconsolidation Periods. However, the
Company's and KACC's credit agreement dated as of February 15, 1994 (the
"Credit Agreement") prohibits any payments by KACC to MAXXAM pursuant to
the KACC Tax Allocation Agreement after February 15, 1994, however,
MAXXAM may offset amounts owing to it against amounts owed by it under
the KACC Tax Allocation Agreement, and KACC may make certain payments
that are required as a result of audits of MAXXAM's tax returns and only
to the extent of any amounts paid after February 15, 1994 by MAXXAM to
KACC under the KACC Tax Allocation Agreement. To the extent the New
Kaiser Tax Group generates unused tax losses or tax credits in Post
Deconsolidation Periods, such amounts will not be available to obtain
refunds of amounts paid by the Company or KACC to MAXXAM for Pre
Deconsolidation Periods pursuant to the Tax Allocation Agreements. It is
anticipated that such losses and credits will be carried forward to
offset future Federal income taxes payable by the New Kaiser Tax Group.
Any unused tax attribute carryforwards existing as of the date
of the Deconsolidation under the terms of the Tax Allocation Agreements
will be eliminated and will not be available to offset Federal income tax
liabilities of the New Kaiser Tax Group for Post Deconsolidation Periods.
Upon the filing of the MAXXAM 1993 Tax Return, the tax attribute
carryforwards of the MAXXAM Tax Group as of December 31, 1993 will be
apportioned in part to the New Kaiser Tax Group, based upon the
provisions of the relevant consolidated return regulations. It is
anticipated that the amounts of such tax attribute carryforwards
apportioned to the New Kaiser Tax Group will approximate or exceed the
amounts of tax attribute carryforwards eliminated under the Tax
Allocation Agreements. Although the amounts of tax attribute
carryforwards apportioned to the New Kaiser Tax Group will be determined
as of December 31, 1993, they will be available as of the date of the
Deconsolidation, subject to certain limitations, to reduce Federal income
taxes payable by the New Kaiser Tax Group for Post Deconsolidation
Periods.
In 1989, KACC and MAXXAM entered into a tax allocation
agreement (the "KACC Tax Allocation Agreement"). Pursuant to the terms
of the KACC Tax Allocation Agreement, MAXXAM pays any consolidated
Federal income tax liability for the MAXXAM Tax Group. KACC is liable to
MAXXAM for the Federal income tax liability of KACC and its subsidiaries
(collectively, the "KACC Subgroup") computed as if the KACC Subgroup were
a separate Affiliated Group which was never affiliated with the MAXXAM
Tax Group (taking into account all limitations under the Code and
regulations applicable to the KACC Subgroup), except that the KACC
Subgroup excludes interest income received or accrued on an intercompany
note issued by the Company in connection with a financing consummated in
December 1989 (the "KACC Subgroup's Separate Income Tax Liability"). To
the extent such calculation results in a net operating loss or a net
capital loss or credit which the KACC Subgroup could have carried back to
a prior taxable period under the principles of Sections 172 and 1502 of
the Code, MAXXAM pays to KACC an amount equal to the tax refund to which
KACC would have been entitled (but not in excess of the aggregate amount
previously paid by KACC to MAXXAM for the current year and the three
prior years). If such separately calculated net operating loss or net
capital loss or credit of the KACC Subgroup cannot be carried back to a
prior taxable year of the KACC Subgroup for which the KACC Subgroup paid
its separate tax liability to MAXXAM, the net operating loss or net
capital loss or credit becomes a loss or credit carryover of the KACC
Subgroup to be used in computing the KACC Subgroup's Separate Income Tax
Liability for future taxable years. The same principles are applied to
any consolidated or combined state or local income tax returns filed by
the MAXXAM Tax Group with respect to KACC and its subsidiaries.
Although, under Treasury regulations, all members of the MAXXAM Tax
Group, including the members of the KACC Subgroup, are severally liable
for the MAXXAM Tax Group's Federal income tax liability for all of 1993
and applicable prior periods, under the KACC Tax Allocation Agreement,
MAXXAM indemnifies each KACC Subgroup member for all Federal income tax
liabilities relating to taxable years during which such KACC Subgroup
member was a member of the MAXXAM Tax Group, except for payments required
under the KACC Tax Allocation Agreement.
During 1992, under the KACC Tax Allocation Agreement, KACC made
a payment to MAXXAM of $28.0 million in respect of the year ended
December 31, 1991. The eighth amendment dated as of January 7, 1993 (the
"Eighth Amendment") to the Company's and KACC's former credit agreement
(the "1989 Credit Agreement") prohibited the payment by KACC to MAXXAM of
any additional amounts due under the KACC Tax Allocation Agreement until
December 15, 1994. Therefore, amounts payable by KACC to MAXXAM with
respect to the year ended December 31, 1992 have not yet been paid. KACC
has recorded tax losses and tax credits for the period January 1, 1993
through June 30, 1993, and such losses and credits will be carried back
to prior taxable periods under the terms of the KACC Tax Allocation
Agreement. It is estimated that MAXXAM owes KACC approximately $7.0
million for this period, net of amounts owed by KACC to MAXXAM with
respect to the year ended December 31, 1992.
In 1991, MAXXAM also entered into a tax allocation agreement
with the Company (the "Kaiser Tax Allocation Agreement"). Pursuant to
the terms of the Kaiser Tax Allocation Agreement, the Federal income tax
liability of the Company and its subsidiaries (collectively, the "Kaiser
Subgroup") is computed using the same principles used in the KACC Tax
Allocation Agreement to determine the KACC Subgroup's income tax
liability. To the extent such tax liability ("Kaiser's Separate Income
Tax Liability") for any applicable period exceeds the KACC Subgroup's
Separate Income Tax Liability for such period, the Company is obligated
to pay the amount of such difference to MAXXAM. To the extent that
Kaiser's Separate Income Tax Liability for any applicable period is less
than the KACC Subgroup's Separate Income Tax Liability for such period,
MAXXAM is obligated to pay the amount of such difference to the Company
(but not in excess of the aggregate net amount previously paid by the
Company and KACC to MAXXAM for the current year and the three prior
years). The foregoing principles also are applied to any consolidated or
combined state or local income tax returns filed by the MAXXAM Tax Group
with respect to the Company. While the Company is severally liable for
the MAXXAM Tax Group's Federal income tax liability for all of 1993 and
applicable prior periods, pursuant to the Kaiser Tax Allocation
Agreement, MAXXAM indemnifies the Company according to the same
principles as those applied to KACC Subgroup members under the KACC Tax
Allocation Agreement.
During 1992, under the Kaiser Tax Allocation Agreement, MAXXAM
made a payment to the Company of $45,000 in respect of the year ended
December 31, 1991. The Company estimates the amounts due from MAXXAM to
it in respect of the year ended December 31, 1992 and for the period
January 1, 1993 through the date of the Deconsolidation to be
approximately $84,000 and $42,000, respectively.
Under the current consolidated return regulations, the
Deconsolidation caused certain tax basis adjustments and the recognition
of certain types of taxable income (including amounts that were
previously deferred), none of which the Company believes to be material.
On June 30, 1993, the Company and KACC entered into a tax
allocation agreement (the "New Tax Allocation Agreement") effective for
Post Deconsolidation periods. The terms of the New Tax Allocation
Agreement are identical in all material respects to those of the KACC Tax
Allocation Agreement except that KACC is liable to the Company.
KACC and MAXXAM have an arrangement pursuant to which they
reimburse each other for certain allocable costs associated with the
performance of services by their respective employees, and KACC also pays
to MAXXAM amounts in respect of directors' fees for directors of KACC who
are not employees of KACC and who are directors of MAXXAM. During 1993,
KACC paid a total of approximately $2.0 million to MAXXAM pursuant to
such arrangements and MAXXAM paid approximately $0.8 million to KACC
pursuant to such arrangements.
As a condition to the effectiveness of the Eighth Amendment, a
subsidiary of MAXXAM made a loan to KACC on January 14, 1993 in the
principal amount of $15.0 million evidenced by a promissory note (the
"MAXXAM Note"). On June 30, 1993, the MAXXAM Note was exchanged for
2,132,950 Depositary Shares of the Company. The Company made a capital
contribution of the MAXXAM Note to KACC, which resulted in the
extinguishment of the MAXXAM Note.
The Company did not declare any dividends on Common Stock
during 1993.
On December 15, 1992, KACC issued a note (the "PIK Note") to a
subsidiary of MAXXAM in the principal amount of $2.5 million,
representing the entire amount of a dividend received by such subsidiary
in respect of the shares of the Company's Common Stock which it owned.
The PIK Note bears interest, compounded semiannually, at a rate equal to
12% per annum, and is due and payable, together with accrued interest
thereon, on June 30, 1995. KACC is not required to make any payment of
principal of or interest on the PIK Note prior to June 30, 1995.
However, to the extent not prohibited by the Credit Agreement, KACC may
be required to prepay the PIK Note upon demand. The Credit Agreement
currently prohibits the payment of principal and interest on the PIK Note
except at the maturity thereof.
In January 1994, MAXXAM entered into a commercial guaranty of
payment (the "Guaranty") of a promissory note dated January 28, 1994, in
the original principal amount of $150,000 from Mr. Anthony R. Pierno,
Vice President and General Counsel of the Company, to Charter National
Bank--Houston. The Guaranty is subject to an agreement between MAXXAM
and Mr. Pierno that any payment by MAXXAM under the Guaranty shall be
offset in like amount plus interest at 12% per annum from the date of
payment on the Guaranty to the date of payment to MAXXAM by Mr. Pierno.
Such offset may be made from any payments due Mr. Pierno from MAXXAM
which lawfully may be the subject of such offset, including any payment
under any compensation arrangement or employee benefit plan. The
Guaranty was entered into by MAXXAM for the convenience of Mr. Pierno and
replaces a previous guaranty with substantially the same terms entered
into in February 1993 in respect of a promissory note dated January 28,
1993.
Pursuant to the terms of Mr. Pierno's employment agreement with
MAXXAM, his personal loans outstanding on the date of the agreement are
forgiven at the rate of $15,000 per year beginning March 8, 1991, with
any remaining balance being due and payable upon Mr. Pierno's termination
of employment. At the time of the agreement, MAXXAM had loaned an
aggregate of $150,000 at 6% interest to Mr. Pierno. The current
principal balance on such loans as of March 15, 1994 was $90,000. Such
loans are payable on demand, require monthly interest payments and are
secured by real estate owned by Mr. Pierno. The agreement also provided
for up to an additional $200,000 in loans to Mr. Pierno bearing interest
at 6% per annum, with interest being payable monthly and principal being
due December 15, 1994 (with prepayments due upon the exercise by Mr.
Pierno of any SARs granted pursuant to the agreement or employee benefit
plan). All of such amount has been borrowed by Mr. Pierno.
In July 1993, MAXXAM loaned Mr. Wade $100,000 pursuant to the
terms of an unsecured promissory note which bore interest at an annual
rate of 6%. The loan was repaid within approximately one month with a
cash payment of $50,000 and a new unsecured promissory note for $50,000,
interest on which is payable monthly at an annual rate of 6%. The new
note is payable upon the earliest to occur of July 20, 1998 or Mr. Wade's
termination of employment with MAXXAM. In December 1993, Mr. Wade repaid
$30,000 of the outstanding principal balance of the note.
Mr. Levin, a director of the Company, is a partner in the law
firm of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, which provides
legal services for the Company and its subsidiaries.
In February 1992, Pittsburgh Forgings Company filed a voluntary
corporate petition under Chapter 11, Title 11, of the United States Code
in the United States Bankruptcy Court for the Western District of
Pennsylvania. Mr. Rusen was the Chairman, President and Chief Executive
Officer of Pittsburgh Forgings Company at such time.
In October 1990, Amarlite Architectural Products, Inc.
("Amarlite") filed a voluntary corporate petition under Chapter 11, Title
11, of the United States Code in the United States Bankruptcy Court for
the Northern District of Georgia. In December 1991, Amarlite obtained
approval of its reorganization plan, which was funded and substantially
consummated on January 14, 1992. Mr. Haymaker was Chief Executive
Officer and a director of Amarlite during such period.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of the copies of the Forms 3, 4 and
5 and amendments thereto furnished to the Company with respect to its
most recent fiscal year, and written representations from reporting
persons that no Forms 5 were required, the Company believes that all
filing requirements were complied with applicable to its officers,
directors and greater than ten percent beneficial owners.
OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Arthur Andersen & Co. as its
independent public accountants through the conclusion of the audit with
respect to the Company's 1993 fiscal year. Representatives of Arthur
Andersen & Co. plan to attend the Annual Meeting of Stockholders and will
be available to answer appropriate questions. Such representatives will
also have an opportunity to make a statement at the meeting, if they so
desire.
STOCKHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals intended to be presented at the 1995
Annual Meeting of Stockholders must be received at the Company's
executive offices at 5847 San Felipe, Suite 2600, Houston, Texas 77057 by
January 1, 1995 in order to be included in the Company's proxy statement
and form of proxy relating to that meeting.
OTHER MATTERS
The cost of soliciting proxies in connection with the Annual
Meeting will be borne by the Company. The Company will, if requested,
reimburse banks, brokerage houses and other custodians, nominees and
certain fiduciaries for their reasonable expenses incurred in mailing
proxy material to their principals. Proxies may be solicited by
directors, officers and employees of the Company without special
remuneration. The Company has retained Corporate Investor
Communications, Inc. to assist in the distribution of proxies at an
estimated cost of approximately $4,800 (including expenses). In addition
to the use of mails, proxies may be solicited by personal interviews,
telephone or telegraph.
The persons designated to vote shares covered by management
proxies intend to exercise their judgment in voting such shares on other
matters that may properly come before the meeting. Management knows of
no matters which will be presented for action at the meeting other than
as referred to in this proxy statement.
By Order of the Board of Directors
BYRON L. WADE
Secretary
April 29, 1994
Houston, Texas
TABLE OF CONTENTS
Notice of Annual Meeting of Stockholders
Proxy Statement
Election of Directors . . . . . . . . . . . . . . . . . . . . . . 2
The Board of Directors and its
Committees . . . . . . . . . . . . . . . . . . . . . . . . . 2
Executive Officers and Directors . . . . . . . . . . . . . . . . . 4
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . 7
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 9
Compensation Committee Report on
Executive Compensation . . . . . . . . . . . . . . . . . . 16
Performance Graph . . . . . . . . . . . . . . . . . . . . . . . 20
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . 21
Compliance with Section 16(a)
of the Exchange Act . . . . . . . . . . . . . . . . . . . . 22
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . 24
[KAC Logo]
NOTICE OF 1994 ANNUAL MEETING
AND
PROXY STATEMENT
IMPORTANT
PLEASE SIGN AND DATE YOUR PROXY OR INSTRUCTION CARD
AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
INSTRUCTION CARD FOR DEPOSITARY SHARES
KAISER ALUMINUM CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 25, 1994
The undersigned, a registered holder of $.65 Depositary Shares, each
representing one-tenth of a share of the Company's Series A Mandatory
Conversion Premium Dividend Preferred Stock ("Series A Shares"), hereby
authorizes the Depositary, through its nominee(s), to vote or to execute
proxies to vote as designated on the reverse side, all Series A Shares
underlying the Depositary Shares the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held on May 25, 1994, and at any
and all adjournments or postponements thereof.
IMPORTANT: IN ORDER FOR THE DEPOSITARY TO VOTE, THIS INSTRUCTION
CAR MUST BE SIGNED, DATED AND RETURNED TO THE DEPOSITARY (DIRECTLY OR
THROUGH YOUR BROKER) IN THE ENCLOSED ENVELOPE ON OR BEFORE MAY 24, 1994.
SEE REVERSE
SIDE
PROXY FOR 8.255% PRIDES, CONVERTIBLE PREFERRED STOCK
KAISER ALUMINUM CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 25, 1994
The undersigned hereby appoints GEORGE T. HAYMAKER, JR., CHARLES E.
HURWITZ, and JOHN T. LA DUC as proxies (each with power to act alone and
with power of substitution) to vote, as designated on the reverse side,
all shares of 8.255% PRIDES, Convertible Preferred Stock the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on
May 25, 1994, and at any and all adjournments or postponements thereof.
SEE REVERSE
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY SIDE
PROXY FOR COMMON STOCK
KAISER ALUMINUM CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
The undersigned hereby appoints GEORGE T. HAYMAKER, JR., CHARLES E.
HURWITZ, and JOHN T. LA DUC as proxies (each with power to act alone and
with power of substitution) to vote, as designated on the reverse side,
all shares of Common Stock the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on May 25, 1994, and at any and
all adjournments or postponements thereof.
SEE REVERSE
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY SIDE