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Alumax Inc · DEF 14A · For 5/29/97

Filed On 4/4/97 · SEC File 1-12374 · Accession Number 950144-97-3762

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 4/04/97  Alumax Inc                        DEF 14A     5/29/97    1:64                                     950144

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Alumax Definitive Proxy Statement                     64    306K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Executive Compensation Executive Employment and Separation Agreements James C. Huntington, Jr Option Grants in the Last Fiscal Year Performance-Based Restricted Stock Units Awarded in the Last Fiscal Year
1	1st Page
6	James C. Huntington, Jr
12	Executive Compensation
13	Executive Employment and Separation Agreements
16	Option Grants in the Last Fiscal Year
17	Performance-Based Restricted Stock Units Awarded in the Last Fiscal Year

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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:

· Enlarge/Download Table

[ ] 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

ALUMAX 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:

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N O T I C E
o f

A N N U A L M E E T I N G

o f
S T O C K H O L D E R S
a n d
P R O X Y S T A T E M E N T
M a y 2 9 , 1 9 9 7

LOGO

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 1997

April 8, 1997

TO THE HOLDERS OF COMMON STOCK:

The Annual Meeting of Stockholders of Alumax Inc. will be held in the Third
Floor Auditorium of The Chase Manhattan Bank building, 270 Park Avenue, New
York, New York, on Thursday, May 29, 1997, at 10:00 a.m., New York City time,
for the following purposes:

1. To elect three Directors, each for a term of three years;

2. To ratify the selection of Coopers & Lybrand L.L.P. as auditors for
fiscal year 1997;

3. To amend the Alumax Inc. 1993 Long-Term Incentive Plan (as Amended and
Restated and as Further Amended on October 3, 1996) to increase the
number of shares of Common Stock authorized for issuance thereunder by
1,250,000;

4. To amend the Alumax Inc. Non-Employee Directors' Stock Compensation Plan
(as Amended on October 3, 1996) to increase the annual award of stock to
non-employee directors; and

5. To transact such other business as may properly come before the Meeting,
or any adjournments thereof.

The holders of Common Stock are entitled to vote on all of the above
proposals.

The Board of Directors has fixed the close of business on March 31, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting. A list of stockholders entitled to vote will be open to
the examination of any stockholder at the offices of The Chase Manhattan Bank,
450 West 33rd Street, 15th Floor, New York, New York, for ten days prior to May
29, 1997, and will also be available for inspection at the Meeting.

IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE MARK, SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

By order of the Board of Directors

HELEN M. FEENEY
Vice President
and Corporate Secretary

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ALUMAX INC.
5655 PEACHTREE PARKWAY
NORCROSS, GA 30092-2812
TELEPHONE: (770) 246-6600

PROXY STATEMENT

GENERAL

This Proxy Statement, which (along with the enclosed Proxy) is first being
mailed to stockholders on April 8, 1997, is furnished in connection with a
solicitation of proxies by the Board of Directors of Alumax Inc. ("Alumax" or
the "Company") to be used at the Annual Meeting of Stockholders of the Company
(the "1997 Annual Meeting") to be held at 10:00 a.m., New York City time, on
Thursday, May 29, 1997 in the Third Floor Auditorium of The Chase Manhattan Bank
building, 270 Park Avenue, New York, New York, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.

VOTING AT THE MEETING

The Record Date for voting at the 1997 Annual Meeting is the close of
business on March 31, 1997. On the Record Date, the Company had outstanding
54,913,013 shares of Common Stock, par value $.01 per share (the "Common
Stock"). The outstanding Common Stock will be voting on all matters currently
scheduled to be acted upon at the 1997 Annual Meeting, with each share entitled
to one vote.

The presence in person or by proxy of the holders of a majority of the
Company's outstanding shares of Common Stock will constitute a quorum at the
1997 Annual Meeting. A plurality of the votes cast is necessary for the election
of Directors. The affirmative vote of a majority of the total votes cast either
for or in opposition to any other proposal described herein (each a "Proposal")
is necessary to approve it. Abstentions will be treated as shares that are
present for purposes of determining the presence of a quorum but as unvoted for
purposes of determining the approval of any matter submitted to a vote of the
stockholders. If a broker indicates on the proxy that he or she does not have
discretionary authority to vote on a particular matter as to certain shares,
those shares will be counted for general quorum purposes but will be considered
as unvoted with respect to that matter.

Votes at the 1997 Annual Meeting will be tabulated by two officers of
ChaseMellon Shareholder Services, L.L.C. who have been appointed by the
Company's Board of Directors to serve as inspectors of election.

PROXIES AND PROXY SOLICITATION

All shares of Common Stock represented by properly executed proxies will be
voted at the 1997 Annual Meeting in accordance with the directions marked on the
proxies, unless such proxies have previously been revoked. If no directions are
indicated on such proxies, they will be voted for the election of the nominees
named in this Proxy Statement, for the ratification of the selection of Coopers
& Lybrand L.L.P. as the Company's auditors for fiscal year 1997, for the
amendment to increase the number of shares of Common Stock that may be issued
under the Alumax Inc. 1993 Long-Term Incentive Plan (as Amended and Restated and
as Further Amended on October 3, 1996) (the "Long Term Plan") and for the
amendment to the Alumax Inc. Non-Employee Directors' Stock Compensation Plan (as
Amended on October 3, 1996) (the "Stock Compensation Plan") to increase the
annual award of stock to non-employee Directors. If any other matters are
properly presented at the 1997 Annual Meeting for action, which is not presently
anticipated, the proxy holders will vote the proxies (which confer discretionary
authority upon such holders to vote on such matters) in accordance with their
best judgment. Each proxy executed and returned by a stockholder may be revoked
at any time before it is voted by timely submission of written notice of
revocation or by submission of a duly executed proxy bearing a later date (in
either case directed to the Vice President and Corporate Secretary of the
Company) or, if a stockholder is present at the 1997 Annual Meeting, he may
elect to revoke his proxy and vote his shares personally.

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In addition to solicitation by mail, certain Directors, officers and other
employees of the Company, not specifically employed for this purpose, may
solicit proxies, without additional remuneration therefor, by personal
interview, mail, telephone or telegram. The Company intends to reimburse
brokerage firms, banks and others for their reasonable out-of-pocket expenses,
including clerical expenses, of forwarding proxy material to the beneficial
owners of Common Stock or otherwise in connection with this solicitation of
proxies. The Company has retained Morrow & Co. to assist in the solicitation at
a cost of $8,500 to the Company, excluding the expenses and disbursements of
that firm.

1. ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes and is
currently comprised of nine members. One class is elected each year for a
three-year term. The following are nominees for the class whose term will expire
at the 1997 Annual Meeting, all of whom are currently Directors of the Company:
Harold Brown, Pierre Des Marais II and J. Dennis Bonney. These three nominees,
if elected at the 1997 Annual Meeting, will serve for a term of three years
expiring at the Annual Meeting of Stockholders to be held in 2000.

It is not anticipated that any of the foregoing nominees will become
unavailable for any reason, but, if that should occur before the 1997 Annual
Meeting, the persons named on the enclosed proxy card reserve the right to
substitute another of their choice as nominee in his place or to vote for such
lesser number of Directors as may be prescribed by the Board of Directors.

The three nominees receiving the largest number of votes by the holders of
shares of Common Stock present at the 1997 Annual Meeting in person or
represented by proxy will be elected. In accordance with Securities and Exchange
Commission ("SEC") regulations, the enclosed proxy card provides stockholders
with an opportunity to grant to or withhold from the appointees named thereon
the authority to vote for the election of any individual named above. In no
event may proxies be voted for more than three nominees. Unless authority to do
so has been withheld, shares represented by the enclosed proxy card, when the
proxy has been duly executed and returned, will be voted in favor of the
election of Harold Brown, Pierre Des Marais II and J. Dennis Bonney, each to
serve as a Director for a three-year term expiring at the Annual Meeting of
Stockholders to be held in 2000 or until their respective successors have been
duly elected and qualified.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
FOREGOING NOMINEES, AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY
CARD TO THE CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.

INFORMATION CONCERNING DIRECTORS AND NOMINEES

NOMINEES FOR TERMS EXPIRING IN 2000

HAROLD BROWN Director since 1993
Counselor, Center for Strategic and International Studies Age 69
Partner, Warburg, Pincus & Co.
(A money management firm)

Mr. Brown has been Counselor to the Center for Strategic and International
Studies since July 1992 and a partner of Warburg, Pincus & Co. since May 1990.
For more than five years prior to July 1992, he had been Chairman of the Foreign
Policy Institute at The Johns Hopkins University School of Advanced
International Studies. Mr. Brown is also a Director of Cummins Engine Company,
Inc., Evergreen Holdings, Inc., International Business Machines Corporation,
Mattel Inc. and Philip Morris Companies Inc.

Chairman of Corporate Governance and Nominating Committee and member of
Executive, Finance and Human Resources and Compensation Committees

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PIERRE DES MARAIS II Director since 1993
President and Chief Executive Officer Age 62
Unimedia Inc.
(Editors and publishers)

Mr. Des Marais has been President and Chief Executive Officer of Unimedia Inc.
for more than five years. He is also a Director of Hollinger Inc., Imperial Oil
Limited, Ouimet-Cordon Bleu Inc., Rothman's Inc. and St. Lawrence Cement Inc.

Member of Executive, Finance and Human Resources and Compensation Committees

J. DENNIS BONNEY Director since 1996
Independent Businessman Age 66

Mr. Bonney has been an independent businessman since his retirement from Chevron
Corporation in December 1995. For more than five years prior thereto, he was a
Vice Chairman of Chevron Corporation. He is also a Director of United Meridian
Corporation and Aeromovel USA, Inc.

Member of Audit and Human Resources and Compensation Committees

DIRECTORS WHOSE TERMS EXPIRE IN 1998

L. DON BROWN Director since 1994
Senior Vice President, Operations/Technology Age 51
Coors Brewing Company
(A producer of beer and other malt beverages)

Mr. Brown has been Senior Vice President, Operations/Technology of Coors Brewing
Company since August 1996. For more than five years prior thereto, he held
various executive and senior operations positions within the Kraft Foods
organization, most recently serving as Senior Vice President, Manufacturing and
Engineering.

Member of Audit and Corporate Governance and Nominating Committees

JAMES C. HUNTINGTON, JR. Director since 1993
Independent Businessman Age 69

Mr. Huntington has been an independent businessman for more than five years. He
is also a Director of Cyprus Amax Minerals Company, Dravo Corporation and
Westinghouse Air Brake Company.

Chairman of Finance Committee and member of Audit and Corporate Governance and
Nominating Committees

W. LOEBER LANDAU Director since 1993
Partner Age 65
Sullivan & Cromwell
(Attorneys)

Mr. Landau has been a partner of Sullivan & Cromwell for more than five years.
He is also a Director of The United States Life Insurance Company.

Member of Executive, Finance and Corporate Governance and Nominating Committees

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DIRECTORS WHOSE TERMS EXPIRE IN 1999

ALLEN BORN Director since 1985
Chairman and Chief Executive Officer Age 63
Alumax Inc.

Mr. Born has been a Director of the Company since 1985, Chairman since April
1993 and Chairman and Chief Executive Officer since November 1993. He was also
Co-Chairman of Cyprus Amax Minerals Company from November 1993 to November 1995
and Vice Chairman of that company from November 1995 to May 1996. For more than
five years prior to November 1993, he had been Chief Executive Officer of AMAX
Inc. ("Amax"), the Company's former parent, and also served as Chairman of that
company from June 1988 to November 1993. Mr. Born is also a Director of Amax
Gold Inc., AK Steel Holding Corporation and Cyprus Amax Minerals Company.

Member of Executive and Finance Committees

PAUL W. MACAVOY Director since 1993
Williams Brothers Professor of Management Studies Age 62
Yale School of Management

Mr. MacAvoy has been Williams Brothers Professor of Management Studies at the
Yale School of Management since January 1991 and served as Dean of such
institution from July 1992 to July 1994. Mr. MacAvoy is also a Director of
Lafarge Corporation.

Chairman of Executive and Human Resources and Compensation Committees and member
of Audit and Corporate Governance and Nominating Committees

ANNE WEXLER Director since 1994
Chairman and Chief Executive Officer Age 67
The Wexler Group
(A government relations and public affairs firm)

Ms. Wexler has been Chairman and Chief Executive Officer of The Wexler Group for
more than five years. She is also a Director of Comcast Corporation, the Dreyfus
Index Funds, the Dreyfus Mutual Funds, NOVA Corporation, Wilshire Asset
Management and the New England Electric System.

Chairman of Audit Committee and member of Human Resources and Compensation
Committee

DIRECTORS' MEETINGS, COMPENSATION AND COMMITTEES

During 1996 the Board of Directors held ten meetings. Each Director
attended at least 75 percent of the aggregate of (a) all meetings of the Board
and (b) all meetings of the Committees of the Board on which such Director
served.

For their services, non-employee Directors receive an annual retainer of
$20,000 and $1,000 per Board meeting attended. Non-employee Directors serving on
Board Committees are compensated at the rate of $600 per Committee meeting
attended, with Committee Chairmen receiving an additional $1,000 per meeting
attended.

Non-employee Directors are eligible to defer all or a portion of the
foregoing fees through participation in the Alumax Inc. Non-Employee Directors'
Deferred Compensation Plan (the "DCP"). Amounts deferred under the DCP are
credited to a participant's account in the form of shares of Common Stock of the
Company. Additional shares are credited to such account as and to the extent
dividends are paid on the Common Stock. A distribution will be made to a
participant upon termination of his or her directorship or, if he or she so
elects, on any January 1 occurring thereafter in a lump sum or in installments.
The DCP also contains a subplan that allowed certain Directors to roll over to
the DCP certain payments from a retirement plan and a deferred compensation plan
maintained by Amax. The DCP provides for accelerated cash

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distributions in the event of a Change in Control (as defined) of the Company.
The Board of Directors may suspend or discontinue the DCP at any time and may
amend the DCP from time to time.

Under the Stock Compensation Plan, each Director who is not an employee of
the Company, its subsidiaries or affiliates is granted an option to acquire
10,000 shares of Common Stock of the Company on the first Thursday in December
following his or her election to the Board. The exercise price of the option is
equal to the fair market value of the shares at the time the option is granted.
All options granted vest at the rate of one-third per year and are exercisable
for a period of ten years following the date of grant. Payment of the option
exercise price may be made in cash, by delivery of shares of Common Stock
already owned by the Director for at least six months or any combination of the
foregoing. Special vesting provisions apply in the case of certain terminations
of service as a non-employee Director. In addition, under current Stock
Compensation Plan provisions, each non-employee Director serving as such on
February 1 of each year is awarded 850 shares of Common Stock. A non-employee
Director is entitled to defer receipt of any such shares. All shares so deferred
are credited to a deferred stock account maintained by the Company for the
benefit of the participating non-employee Director. Account balances will be
distributed as soon as practicable following cessation of Board service or on
January 1 over a stated number of years after cessation of Board service.
Distributions under the Stock Compensation Plan will be made in the form of
whole shares of Common Stock, with a cash payment for any fractional share
interest. The Board of Directors may discontinue the Stock Compensation Plan at
any time or may amend it from time to time. Special vesting and cash-out
provisions apply to options and shares granted under the Stock Compensation Plan
in the event of a Change in Control (as defined) of the Company.

FOR INFORMATION CONCERNING A PROPOSED AMENDMENT TO THE STOCK COMPENSATION
PLAN WHICH WOULD INCREASE THE NUMBER OF SHARES OF COMMON STOCK AWARDED ANNUALLY
TO EACH PARTICIPANT FROM 850 SHARES TO 1,250 SHARES, SEE PAGES 24 AND 25 OF THIS
PROXY STATEMENT.

The standing Committees of the Board include, among others, the Audit
Committee, the Human Resources and Compensation Committee and the Corporate
Governance and Nominating Committee.

The Audit Committee is comprised of Ms. Wexler (Chairman) and Messrs.
Bonney, L. Don Brown, Huntington and MacAvoy. The principal functions of this
Committee are to (i) recommend to the Board of Directors the independent public
accounting firm that will conduct the annual audit of the Company's accounts;
(ii) review the nature and scope of the audit; and (iii) review the financial
organization and accounting practices of the Company and the qualifications and
performance of its internal auditors and its independent auditing firm. The
Committee also recommends to the Board of Directors policies concerning
avoidance of employee conflicts of interest and reviews the administration of
such policies. The Audit Committee met three times during 1996.

The Human Resources and Compensation Committee is comprised of Messrs.
MacAvoy (Chairman), Bonney, Harold Brown and Des Marais and Ms. Wexler. The
principal functions of this Committee are to (i) establish, implement and
monitor the Company's program for executive development, succession planning and
compensation of Executive Officers and certain other senior managerial employees
of the Company and (ii) perform various administrative tasks with respect to
certain employee benefit matters. In this regard, the Committee administers the
Long Term Plan, the Alumax Inc. 1993 Annual Incentive Compensation Plan (as
Amended and Restated and as Further Amended on October 3, 1996) (the "Annual
Plan") and the Alumax Inc. Deferred Compensation Plan, as such plans pertain to
Executive Officers and certain other senior managerial employees of the Company.
During 1996, the Human Resources and Compensation Committee met five times.

The Corporate Governance and Nominating Committee is comprised of Messrs.
Harold Brown (Chairman), L. Don Brown, Huntington, Landau and MacAvoy. The
principal functions of this Committee include, among other things, (i) screening
and recommending candidates for the Board of Directors of the Company; (ii)
recommending to the Board appointments to and the responsibilities of Board
committees; (iii) establishing procedures for evaluation of the performance of
the Chief Executive Officer by the non-employee Directors; and (iv) considering
matters of corporate and social responsibility and matters related to corporate
public affairs and to the Company's relations with its various stakeholders. The
Committee will also

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consider candidates for Board membership suggested by the stockholders.
Suggestions for candidates, accompanied by biographical material for evaluation,
may be sent to the Vice President and Corporate Secretary of the Company at its
principal executive offices. Individuals suggested as candidates should have
attained a position of leadership in the candidate's field of endeavor and have
demonstrated the ability to exercise sound business judgment. A candidate must
also indicate a willingness to attend scheduled Board and Committee meetings.
The Corporate Governance and Nominating Committee met four times in 1996.

The Company's By-Laws provide that if a stockholder intends to nominate a
candidate for election as a director, the stockholder must give written notice
of his or her intention to the Vice President and Corporate Secretary of the
Company. The notice must be delivered or mailed to, and received at, the
principal executive offices of the Company not less than 60 nor more than 90
days before the date of a meeting of stockholders to be considered timely;
provided, however, that in the event that notice to the stockholders or
disclosure to the general public of the date of such meeting is given or made
less than 70 days prior to the meeting, notice by a stockholder to be timely
must be so received not later than the close of business on the tenth day
following the day on which such notice or disclosure of the date of the meeting
was first given or made. The notice must set forth the name and address of, and
number and class of shares beneficially owned by, the stockholder and the
nominee for election as a Director, the age of the nominee, the nominee's
business experience during the past five years, any other directorships held by
the nominee, the nominee's involvement in certain legal proceedings during the
past five years and such other information concerning the nominee as would be
required to be included in a proxy statement soliciting proxies for the election
of the nominee. In addition, the notice must include the consent of the nominee
to serve as a Director of the Company if elected.

CERTAIN TRANSACTIONS

W. Loeber Landau, a Director of the Company, is a Partner in the law firm
of Sullivan & Cromwell which, during 1996, rendered legal services to the
Company and its subsidiaries.

See also "Executive Compensation -- Executive Employment and Separation
Agreements."

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SECURITY OWNERSHIP

PRINCIPAL STOCKHOLDERS

The following table furnishes information as to the only persons known by
the Company to be the beneficial owners of more than five percent of the
Company's Common Stock:

· Download Table

PERCENT
NAME AND ADDRESS OF NO. OF OF CLASS
BENEFICIAL OWNER SHARES AT 12/31/96
------------------- ------ -----------

FMR Corp.(A)(B)............................................ 6,731,726 12.30%
82 Devonshire Street
Boston, MA 02109

Wellington Management Company, LLP(C)...................... 4,659,615 8.52%
75 State Street
Boston, MA 02109

Sanford C. Bernstein & Co., Inc.(D)........................ 4,113,897 7.52%
One State Street Plaza
New York, NY 10004

Norwest Corporation(E)..................................... 2,788,979 5.10%
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479

---------------

(A) According to information filed by FMR Corp. ("FMR") with the SEC, FMR,
through its various subsidiaries, has sole voting power as to 1,041,336
shares of the Company's Common Stock, shared voting power as to 4,400
shares, sole dispositive power as to 6,727,326 shares and shared
dispositive power as to 4,400 shares. Such amounts include certain shares
beneficially owned by Edward C. Johnson 3rd. See Footnote B.

(B) Edward C. Johnson 3rd ("E. Johnson") is Chairman of FMR and Abigail P.
Johnson ("A. Johnson") is a director of such entity. E. Johnson, A.
Johnson, various family members and certain trusts form a controlling group
with respect to FMR. See Footnote A. According to information filed by E.
Johnson and A. Johnson with the SEC, E. Johnson has sole voting power as to
15,600 shares of the Company's Common Stock, shared voting power as to
4,400 shares, sole dispositive power as to 6,727,326 shares and shared
dispositive power as to 4,400 shares. Such amounts included 20,000 shares
that are owned directly by E. Johnson or are held in trusts either for the
benefit of E. Johnson or an E. Johnson family member. A. Johnson has sole
dispositive power with respect to 6,727,326 shares of the Company's Common
Stock.

(C) According to information filed by Wellington Management Company, LLP
("WMC") with the SEC, WMC, through its subsidiary, Wellington Trust
Company, N.A., has shared voting power as to 916,600 shares of the
Company's Common Stock and shared dispositive power as to 4,659,615 shares.

(D) According to information filed by Sanford C. Bernstein & Co., Inc.
("Bernstein") with the SEC, Bernstein has sole voting power as to 2,291,563
shares of the Company's Common Stock, shared voting power as to 445,051
shares and sole dispositive power as to 4,113,897 shares.

(E) According to information filed by Norwest Corporation ("Norwest") with the
SEC, Norwest and certain of its subsidiaries have sole voting power as to
2,489,303 shares of the Company's Common Stock, shared voting power as to
3,265 shares, sole dispositive power as to 2,783,558 shares and shared
dispositive power as to 2,962 shares.

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SECURITIES OWNED BY MANAGEMENT

The following table sets forth information concerning the beneficial
ownership of Common Stock held, as of March 14, 1997, by each of the Company's
Directors, each of the Executive Officers named in the Summary Compensation
Table who are not directors and all Directors and Executive Officers as a group.
No Director or Executive Officer owns more than one percent of the outstanding
Common Stock. All Directors and Executive Officers as a group are the beneficial
owners of approximately 2.0 percent of the outstanding Common Stock, including
shares that may be acquired by them through the exercise of stock options that
are, or within 60 days of March 14, 1997 will become, exercisable. Unless
indicated otherwise, all shares are held directly, with each person having sole
voting and dispositive power with respect to the Common Stock owned beneficially
by such person.

· Enlarge/Download Table

NUMBER OF SHARES
BENEFICIALLY SHARES
OWNED AS OF ACQUIRABLE
MARCH 14, 1997(A) WITHIN 60 DAYS(B)
DIRECTORS: ----------------- -----------------

Allen Born.............................................. 211,480(C) 466,826
J. Dennis Bonney........................................ 1,850(D) 0
Harold Brown............................................ 12,760(C)(D) 10,000
L. Don Brown............................................ 3,486(D) 6,666
Pierre Des Marais II.................................... 8,788(D) 10,000
James C. Huntington, Jr................................. 6,719(D) 10,000
W. Loeber Landau........................................ 22,363(D) 10,000
Paul W. MacAvoy......................................... 22,077(D) 10,000
George P. Stoe.......................................... 11,741(C) 28,600
Anne Wexler............................................. 5,295(D) 6,666

NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS:
Lawrence B. Frost....................................... 26,322(C) 52,832
Eugene R. Greenberg..................................... 5,705 0
Jay M. Linard........................................... 8,966(C) 0
All Directors and Executive Officers as a group,
including those named above (20 persons).............. 400,539 724,640

---------------

(A) Includes shares allocated to the individual accounts of Executive Officers
under the Alumax Inc. Thrift Plan for Salaried Employees.

(B) Represents shares that could be acquired within 60 days after March 14,
1997 through the exercise of stock options.

(C) Includes the following number of shares held indirectly in trust form:
86,565 for Mr. Born; 106 for Mr. Harold Brown; 3,000 for Mr. Stoe; 6,391
for Mr. Frost; and 3,397 for Mr. Linard.

(D) Includes the following number of shares held under the DCP and/or the Stock
Compensation Plan: none for Mr. Bonney; 12,654 for Mr. Harold Brown; 3,486
for Mr. L. Don Brown; 6,088 for Mr. Des Marais; 5,019 for Mr. Huntington;
21,863 for Mr. Landau; 21,678 for Mr. MacAvoy; and 4,795 for Ms. Wexler.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and Executive Officers and the beneficial owners of more
than ten percent of the Company's 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 the Company. Because of the complexity of the
reporting rules, the Company has assumed responsibility for preparing and filing
all reports required to be filed under Section 16(a) by the

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Directors and Executive Officers. The Company believes that during the last
fiscal year all Section 16(a) filing requirements applicable to its Directors
and Executive Officers were complied with, except that the Form 3 filed on
behalf of Jay M. Linard, a Vice President of the Company, failed to include
certain shares of Common Stock awarded to him under the Long Term Plan. Once the
omission was discovered, an amendment was promptly filed.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation
paid during each of the last three years to the Company's Chief Executive
Officer and the four other most highly compensated Executive Officers of the
Company, based on salary and bonus earned in respect of the 1996 fiscal year.

SUMMARY COMPENSATION TABLE

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ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- ---------------------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($)(A) ($)(B) (SHARES)(C) ($)(D)
-------- ---- ------- ------- ------------ ---------- ----------- ------------

Allen Born...................... 1996 800,000 797,100 39,602 670,000 687,800 101,693
Chairman and CEO(E) 1995 750,000 504,900 0 563,750 65,000 84,914
1994 750,000 450,000 28,443 494,563 147,200 84,766
George P. Stoe.................. 1996 218,500 181,400 266,865 130,650 34,200 25,715
Executive Vice President(F) 1995 190,000 133,500 0 93,500 17,400 16,012
1994 161,166 127,969 0 76,875 28,600 13,239
Lawrence B. Frost............... 1996 235,900 156,900 7,236 100,500 20,900 43,172
Senior Vice President and 1995 220,500 105,300 0 82,500 13,600 36,333
Chief Financial Officer(G) 1994 199,000 122,400 0 53,813 22,000 31,898
Eugene R. Greenberg(H).......... 1996 190,949 156,500 31,037 87,100 29,375 17,559
Vice President
Jay M. Linard(H)................ 1996 203,317 134,300 0 87,100 14,375 17,978
Vice President

---------------

(A) "Other Annual Compensation" consists of amounts paid by the Company for
relocation expenses and/or taxes on certain non-cash compensation. The
dollar value of perquisites and other personal benefits for each of the
named Executive Officers was less than established reporting thresholds,
except for Mr. Stoe who, in 1996, received total perquisites of $63,758,
including $53,000 for club initiation fees.

(B) Amounts for 1996, 1995 and 1994 represent the value attributable to
performance-based restricted stock units awarded under the Long Term Plan.
Each such unit is equivalent to one share of Common Stock. The units have
been valued using the closing price of the Common Stock on the New York
Stock Exchange on the date of the award. At December 31, 1996, the number
and value of the units held by the Executive Officers shown in the table
above, using for valuation purposes the closing price of the Common Stock
on the New York Stock Exchange on such date, were as follows: Mr.
Born -- 59,800 units valued at $2,003,300; Mr. Stoe -- 10,300 units valued
at $345,050; Mr. Frost -- 8,100 units valued at $271,350; Mr.
Greenberg -- 2,600 units valued at $87,100; and Mr. Linard -- 2,600 units
valued at $87,100. Holders of restricted stock units have been granted
dividend equivalents which entitle them to receive dividends at the same
time and at the same rate as holders of the Common Stock.

(C) The amounts shown in this column represent the number of non-qualified stock
options granted under the Long Term Plan, including the grant of 687,800
non-qualified stock options to Mr. Born in December 1996 pursuant to his
amended employment agreement. For additional information concerning Mr.
Born's employment agreement, see "Executive Employment and Separation
Agreements."

(D) The amounts shown in this column for 1996 represent (i) Company matching
contributions on behalf of the named Executive Officers to the Alumax Inc.
Thrift Plan for Salaried Employees, as well as amounts credited to the
accounts of such Executive Officers under the Alumax Inc. Excess Benefit
Plan

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(the "Excess Plan") described below, (ii) above market interest earned on
deferred compensation under a terminated plan, (iii) life insurance
premiums paid by the Company on behalf of Messrs. Stoe, Greenberg and
Linard under the Company's group term life insurance program, and split
dollar insurance premiums paid by the Company on behalf of Messrs. Born and
Frost and (iv) disability insurance premiums paid by the Company on behalf
of the named Executive Officers. The table below sets forth this
information in greater detail.

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ABOVE MARKET LIFE DISABILITY
THRIFT PLAN INTEREST ON INSURANCE INSURANCE
NAME CONTRIBUTIONS DEFERRED COMPENSATION PREMIUMS PREMIUMS
---- ------------- --------------------- --------- ----------

Allen Born........................ $36,000 $ 0 $51,016 $14,677
George P. Stoe.................... 9,833 5,869 4,368 5,645
Lawrence B. Frost................. 10,616 8,402 17,180 6,974
Eugene R. Greenberg............... 8,593 0 3,921 5,045
Jay M. Linard..................... 9,149 0 3,968 4,861

(E) Mr. Born has an employment agreement with the Company which expires on
December 31, 1999 and which establishes his minimum annual base salary at
$800,000, subject to periodic review. The agreement also provides for
grants of stock options and stock units. For additional information
concerning Mr. Born's employment agreement, see "Executive Employment and
Separation Agreements."

(F) Mr. Stoe resigned on March 5, 1997.

(G) Mr. Frost served as Vice President and Treasurer of the Company from
November 1993 to April 1994 and Senior Vice President and Chief Financial
Officer from May 1994 to February 1997. He was elected Executive Vice
President and Chief Financial Officer of Alumax in March 1997. For
information concerning certain stock options and stock units granted to Mr.
Frost pursuant to his agreement with Amax and the Company, see "Executive
Employment and Separation Agreements."

(H) Mr. Greenberg and Mr. Linard each joined the Company in 1996, and each was
elected a Vice President of Alumax in December of that year.

EXECUTIVE EMPLOYMENT AND SEPARATION AGREEMENTS.

The Company has an employment agreement with Mr. Born which became
effective November 15, 1993 and which was amended and restated on December 5,
1996, all as described below. The agreement, as so amended and restated,
provides for Mr. Born's employment through December 31, 1999, unless terminated
by either party. Among other things, in consideration of Mr. Born's waiver of a
$5.2 million cash payment for severance and pension credit benefits due under a
prior employment agreement with Amax, the agreement also provides for the grant
to Mr. Born directly, and not pursuant to the Long Term Plan, of options to
purchase 532,712 shares of Common Stock at a per share exercise price of
$23.6115 and stock units to be paid out in the form of 113,673 shares of Common
Stock valued at $23.6115 per share. Such options and units vest over a five-year
period beginning November 15, 1994 at the rate of 20 percent per year, but will
vest earlier in the event of Mr. Born's death or disability (as defined) or his
retirement at age 65 or, with the Company's approval, after age 62; a Change in
Control (as defined) of the Company; or a termination of Mr. Born's employment
by the Company without cause (as defined) or by Mr. Born with good reason (as
defined). Mr. Born will forfeit all such options and units that have not vested
if his employment is terminated by the Company for cause or by Mr. Born without
good reason.

The Company also made similar awards of options and units to Mr. Frost and
to Helen M. Feeney, former Amax executives who were elected Vice President and
Treasurer and Vice President and Corporate Secretary, respectively, of the
Company at the time Alumax became an independent, public corporation and who
agreed to the cancellation without payment of rights which they may have had
under severance policies of Amax. The awards were made on terms substantially
similar to those described in the paragraph above and provide for grants of
options covering 51,388 shares of Common Stock and stock units for 10,962 shares
of

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Common Stock in the case of Mr. Frost and options covering 39,250 shares of
Common Stock and stock units for 8,374 shares of Common Stock in the case of
Mrs. Feeney.

In consideration of Mr. Born's consent to extend his employment to December
31, 1999, his employment agreement, which otherwise would have expired in
December 1996, was amended and restated on December 5, 1996. The agreement, as
so amended and restated, establishes Mr. Born's minimum annual base salary of
$800,000 after January 1, 1997, subject to periodic review, and also provides
for an additional grant of options to purchase 687,800 shares of Common Stock
under the Long Term Plan which are exercisable for a term of six years from date
of grant at the following times and prices: (i) 229,267 shares become
exercisable on November 15, 1997, at a per share exercise price of $32.125 (the
closing price of the Common Stock on the New York Stock Exchange on December 5,
1996); (ii) 229,267 shares become exercisable on November 15, 1998, at a per
share exercise price of $36.125; and (iii) the remaining 229,266 shares become
exercisable on November 15, 1999, at a per share exercise price of $40.125. The
additional stock options will vest earlier in the event of Mr. Born's death or
disability (as defined); termination of Mr. Born's employment by the Company
without cause (as defined) or by Mr. Born with good reason (as defined); or a
Change in Control (as defined) of the Company. Mr. Born will forfeit all such
additional stock options that have not vested if he retires before December 31,
1999, unless the Company's Board of Directors, in its sole discretion and
without taking into account any vote of Mr. Born, approves the immediate (or
future) vesting of such additional options upon any such retirement; or
termination of Mr. Born's employment by the Company with cause (as defined) or
by Mr. Born other than with good reason (as defined).

The agreement with Mr. Born also provides for a supplemental pension
benefit under the Retirement Plan for Salaried Employees of Alumax Inc. and its
Subsidiaries (the "Pension Plan") and the Excess Plan equal to the difference
between (a) the actual benefits to be received under such plans and (b) the
benefits he would have received under such plans if the period from September
15, 1981 through May 31, 1985 (when he was not an employee of Amax) were
included in his years of credited service under these plans. To compensate Mr.
Born for deferring his retirement and the reduced benefits resulting from such
deferral, as well as a loss of benefits associated with Mr. Born's mandatory
receipt of benefits under the defined benefit plans sponsored by Amax, the
agreement with Mr. Born was amended to further provide that the Company will pay
Mr. Born the lump sum of $1,175,876 at the time of expiration of the Period of
Employment (as defined) on December 31, 1999, in addition to, and without offset
of, the benefits otherwise payable to him. Such additional pension payment will
be made on a prorated basis in the event of Mr. Born's death or disability (as
defined); termination of Mr. Born's employment by the Company without cause (as
defined) or by Mr. Born with good reason (as defined); or a Change in Control
(as defined) of the Company. Mr. Born will forfeit the additional pension
payment if his employment is terminated by the Company with cause (as defined)
or by Mr. Born without good reason (as defined); or if Mr. Born retires prior to
December 31, 1999, unless the Company's Board of Directors, in its sole
discretion, and not taking into account any vote of Mr. Born, approves such
retirement and prorated payment of the additional pension payment.

The employment agreement with Mr. Born provides that he will be paid
termination compensation if his employment is terminated by the Company without
cause (as defined) or if he terminates employment for good reason (as defined).
Such termination compensation includes (i) a cash payment based upon Mr. Born's
annual salary plus the target award under the Company's Annual Plan; (ii) a pro
rata portion of certain previously granted incentive compensation awards,
determined on the assumption that all applicable targets have been met; (iii)
maintenance of all insurance plans in effect for Mr. Born until December 31,
1999, or until the commencement of equivalent benefits from a new employer; and
(iv) for a period terminating one year after the date of termination of
employment, payment of benefits equivalent on an after-tax basis to the benefits
Mr. Born would have received under all employee benefit and executive
compensation plans (other than stock option and incentive plans) in which he was
participating immediately prior to termination, as if he had received credit for
age and service under such plans during such period following termination. In
the event that any such termination payment or benefits pursuant to the
agreement (together with any payments under any other plans, policies or
arrangements) are subject to excise tax under Federal tax laws, the Company will
increase Mr. Born's termination payment to the extent necessary to restore him
to the same after-tax position as he would have had if the excise tax had not
been imposed.

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The Company has adopted a corporate separation policy applicable to
Executive Officers (other than Mr. Born) and certain other key employees
designated by the Chief Executive Officer that provides for termination
compensation, but at lower amounts and for varying periods than the termination
compensation described in the paragraph above.

PENSION BENEFITS

The Pension Plan is a defined benefit retirement plan with pensions paid in
accordance with a formula based upon final pay and service. Participants become
entitled to accrued benefits under the Pension Plan after they complete five
years of continuous service. Accrued benefits are determined on the basis of a
participant's years of credited service, which includes all continuous service
prior to his or her normal retirement date. The basic benefit formula provides
an annual retirement allowance equal to 1 7/8 percent of the average of the
participant's three highest annual rates of compensation prevailing on January 1
during any of the last ten years of credited service multiplied by the number of
years of credited service up to and including ten years, plus 1 3/4 percent of
such average multiplied by the number of years of credited service over ten
years, less certain adjustments for Social Security benefits, with a minimum
benefit of $21 per month multiplied by the number of years of credited service.
In those cases where the amounts payable under the Pension Plan exceed the
annual pension limitations imposed by the Internal Revenue Code of 1986, as
amended (the "Code"), such excess will be paid from the Excess Plan.

The table below shows the estimated annual retirement benefits, before any
applicable offset for Social Security benefits, that would be payable to
participants in the Pension Plan at normal retirement (age 65) on a straight
life annuity basis. Optional forms of benefit payments are available. Benefits
payable under the Pension Plan are also subject to reduction to the extent that
participants receive payments pursuant to certain Company (or Amax) sponsored
pension or retirement plans that have been suspended, discontinued or otherwise
terminated and in certain other circumstances. As noted above, benefits under
the Pension Plan are limited to the extent prescribed by the Code, and any
amounts in excess of such limitations will be paid pursuant to the Excess Plan.
Accordingly, the amounts shown in the table reflect the aggregate of payments
under both the Pension Plan and the Excess Plan.

PENSION PLAN TABLE

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HIGHEST ESTIMATED ANNUAL PENSION FOR
THREE-YEAR REPRESENTATIVE YEARS OF CREDITED SERVICE
AVERAGE -------------------------------------------------------------------------------------------
COMPENSATION 5 10 15 20 25 30 35 40
------------ - -- -- -- -- -- -- --

$ 250,000............ $ 23,438 $ 46,875 $ 68,750 $ 90,625 $112,500 $ 134,375 $ 156,250 $ 178,125
500,000........... 46,875 93,750 137,500 181,250 225,000 268,750 312,500 356,250
750,000........... 70,313 140,625 206,250 271,875 337,500 403,123 468,750 534,375
1,000,000........... 93,750 187,500 275,000 362,500 450,000 537,500 625,000 712,500
1,250,000........... 117,188 234,375 343,750 453,125 562,500 671,875 781,250 890,625
1,500,000........... 140,625 281,250 412,500 543,750 675,000 806,250 937,500 1,068,750
1,750,000........... 164,063 328,125 481,250 634,375 787,500 940,625 1,093,750 1,246,875
2,000,000........... 187,500 375,000 550,000 725,000 900,000 1,075,000 1,250,000 1,425,000

At December 31, 1996, the years of credited service under the Pension Plan
for Messrs. Born, Stoe, Frost, Greenberg and Linard were 30 years, 27 years, 24
years, 1 year and 1 year, respectively. For purposes of determining benefits
under the Pension Plan, covered compensation for each of these individuals
includes the amounts shown in the "Salary" and "Bonus" columns of the Summary
Compensation Table with certain minor adjustments.

The Company entered into agreements with Messrs. Frost and Stoe that
provide for supplemental benefits under the Excess Plan as a result of the
inclusion of certain periods of service with a prior employer, which was
acquired by the Company in 1983, offset by benefits to be received under the
Pension Plan and the

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pension program of such prior employer. The years of credited service under the
Pension Plan for Messrs. Frost and Stoe, as indicated above, include these
periods of service with such prior employer. In addition, the years of credited
service under the Pension Plan shown above for Mr. Born includes the period from
September 15, 1981 through May 31, 1985 (when he was not an employee of Amax) as
required by the terms of his employment agreement, as discussed above.

EXECUTIVE COMPENSATION PLANS

The following tables show the forms and amounts of awards made to certain
persons and groups under the Company's executive compensation plans in respect
of the 1996 fiscal year.

Option Grants in the Last Fiscal Year

The following table sets forth certain information concerning non-qualified
stock options granted by the Company to Mr. Born pursuant to his employment
agreement and to Messrs. Frost, Greenberg, Linard and Stoe under the Long Term
Plan during the 1996 fiscal year. The data in the column shown below relating to
the hypothetical grant date present value of stock options granted in 1996 are
presented pursuant to SEC rules and are calculated under the modified
Black-Scholes Model for pricing options. The Company is not aware of any model
or formula which will determine with reasonable accuracy a present value for
stock options based on future unknown factors. The actual amount, if any,
realized upon the exercise of stock options will depend upon the market price of
the Company's Common Stock relative to the exercise price per share of the
Company's Common Stock of the stock option at the time the stock option is
exercised. There is no assurance that the hypothetical grant date present values
of the stock options reflected in this table actually will be realized.

OPTION GRANTS IN THE LAST FISCAL YEAR

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NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS EXERCISE GRANT DATE
GRANT OPTIONS GRANTED TO ALL PRICE EXPIRATION PRESENT
NAME DATE GRANTED(A) EMPLOYEES(B) ($/SH) DATE(C) VALUE($)(D)
---- -------- ---------- -------------- -------- ---------- -----------

Allen Born.................... 12/05/96 229,267 17.4% 32.125 12/05/02 1,795,350
12/05/96 229,267 17.4% 36.125 12/05/02 1,428,637
12/05/96 229,266 17.4% 40.125 12/05/02 1,134,524
George P. Stoe................ 12/05/96 34,200 2.6% 32.125 12/05/06 312,232
Lawrence B. Frost............. 12/05/96 20,900 1.6% 32.125 12/05/06 190,808
Eugene R. Greenberg........... 03/07/96 15,000 1.1% 34.250 03/07/06 161,875
12/05/96 14,375 1.1% 32.125 12/05/06 131,238
Jay M. Linard................. 12/05/96 14,375 1.1% 32.125 12/05/06 131,238

---------------

(A) Options granted in 1996, excluding options granted to Mr. Born, are
exercisable upon vesting two years after the grant date. For information
relating to vesting of Mr. Born's options, see "Executive Employment and
Separation Agreements."

(B) Based on 1,315,350 options granted in total during the 1996 fiscal year.

(C) Except for the options granted to Mr. Born, vested options are exercisable
for ten years after the grant date, subject to earlier termination in
certain events related to termination of employment.

(D) The hypothetical present values on the grant date are calculated under the
modified Black-Scholes Model, which is a mathematical formula used to value
options traded on stock exchanges. This formula considers a number of
factors in hypothesizing an option's present value. Factors used to value
the above options include the Common Stock's expected volatility rate
(30.57 percent with respect to the options granted on December 5, 1996 and
35.89 percent with respect to options granted on March 7, 1996); expected
risk-free rate of return (6.08 percent with respect to the options granted
on December 5, 1996 and 5.99 percent with respect to the options granted on
March 7, 1996); expected dividend yield (3.0

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percent with respect to all options); projected time of exercise (7 years
with respect to options having a ten year term and 4 years with respect to
options having a six year term); and projected risk of forfeiture over the
vesting period (5 percent per year or 10 percent in total with respect to
all options, with the exception of those awarded to Mr. Born, and 4.72
percent, 9.72 percent and 14.72 percent with respect to the options awarded
to Mr. Born which have exercise prices of $32.125, $36.125 and $40.125 and
vest on November 15, 1997, November 15, 1998 and November 15, 1999,
respectively).

Fiscal Year-End Option Values

The following table sets forth certain information concerning the number
and value of exercisable and unexercisable stock options granted under the Long
Term Plan at December 31, 1996 to each of the persons named in the Summary
Compensation Table. Data with respect to Mr. Born also includes options awarded
to him pursuant to his employment agreement and, with respect to Mr. Frost,
options granted to him pursuant to his agreement with Amax and the Company. THE
VALUE OF EXERCISABLE AND UNEXERCISABLE IN-THE-MONEY STOCK OPTIONS AT DECEMBER
31, 1996 SHOWN BELOW IS PRESENTED PURSUANT TO SEC RULES. THE ACTUAL AMOUNT, IF
ANY, REALIZED UPON EXERCISE OF STOCK OPTIONS WILL DEPEND UPON THE MARKET PRICE
OF THE COMPANY'S COMMON STOCK RELATIVE TO THE PER SHARE EXERCISE PRICE OF THE
STOCK OPTION AT THE TIME SUCH OPTION IS EXERCISED. THERE IS NO ASSURANCE THAT
THE VALUES OF EXERCISABLE AND UNEXERCISABLE IN-THE-MONEY STOCK OPTIONS REFLECTED
IN THIS TABLE WILL BE REALIZED.

FISCAL YEAR-END OPTION VALUES

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VALUE OF EXERCISABLE
NUMBER OF SECURITIES AND UNEXERCISABLE
UNDERLYING EXERCISABLE IN-THE-MONEY
AND UNEXERCISABLE STOCK STOCK OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END($)(A)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------

Allen Born..................................... 466,826 965,886 4,172,626 2,447,038
George P. Stoe................................. 28,600 51,600 197,625 53,550
Lawrence B. Frost.............................. 52,832 55,056 456,428 237,137
Eugene R. Greenberg............................ 0 29,375 0 19,766
Jay M. Linard.................................. 0 14,375 0 19,766

---------------

(A)
Based on a price of $33.50, which represents the per share closing price of
the Common Stock on the New York Stock Exchange on December 31, 1996.

Performance-Based Restricted Stock Units Awarded in the Last Fiscal Year

The table below indicates the number and value of performance-based
restricted stock units (with dividend equivalents) awarded in the 1996 fiscal
year under the Long Term Plan to each of the persons named in the Summary
Compensation Table. Each unit is equivalent to one share of Common Stock. Units
ordinarily vest after a ten-year service period. Accelerated vesting and payment
of all or a portion of the units may occur on completion of a three-year
performance period ending December 31, 1998, provided that certain performance
goals established by the Human Resources and Compensation Committee of the Board
of Directors for such period based on corporate cumulative net income are
achieved. To the extent these goals are not met and accelerated vesting does not
occur, the units vest and will be paid out on completion of the ten-year service
period. The value attributable to units awarded in 1996 to each of the persons
named in the Summary Compensation Table is reflected in the "Restricted Stock"
column for 1996 of such Table.

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PERFORMANCE-BASED RESTRICTED STOCK UNITS AWARDED IN THE LAST FISCAL YEAR

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NUMBER OF VALUE
RESTRICTED STOCK OF UNITS
NAME UNITS AWARDED AWARDED($)(A)
---- ---------------- -------------

Allen Born(B)............................................... 20,000 670,000
George P. Stoe.............................................. 3,900 130,650
Lawrence B. Frost(C)........................................ 3,000 100,500
Eugene R. Greenberg......................................... 2,600 87,100
Jay M. Linard............................................... 2,600 87,100

---------------

(A) Based on a price of $33.50, which represents the per share closing price of
the Common Stock on the New York Stock Exchange on the date of award.

(B) Does not include data pertaining to stock units awarded to Mr. Born
pursuant to his employment agreement. See "Executive Employment and
Separation Agreements."

(C) Does not include data pertaining to stock units awarded to Mr. Frost
pursuant to his agreement with Amax and the Company. See "Executive
Employment and Separation Agreements."

REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION

Compensation Policies Applicable to Executive Officers

The Human Resources and Compensation Committee of the Board of Directors
(the "Committee"), comprised entirely of outside Directors who are not former or
current officers or employees of the Company or any of its subsidiaries, is
responsible for establishing, implementing, administrating and monitoring the
Company's strategy, policies and plans for executive development, succession
planning and compensation. The Company's strategy is to (i) attract high-caliber
managerial and technical talent at both the entry and mid-career levels to meet
the organization's human resources needs, (ii) assess and develop such talent to
succeed to key positions throughout the Company and its subsidiaries, (iii)
select and retain top-performing executives at the corporate level and in each
of the subsidiaries, (iv) provide compensation opportunities that are fair and
competitive with those provided by comparable organizations, as well as
cost-effective and tax efficient, and (v) motivate and reward its executives
based on corporate, subsidiary, business unit and individual annual and
long-term business performance, strategic progress and the creation of
stockholder value.

In accordance with its responsibilities, at the beginning of the year, the
Committee reviews the Company's overall corporate mission, strategy and
objectives. These form the basis both for supporting corporate, subsidiary and
business unit annual profit plan goals which are subject to Board and Committee
review and approval at year-start, and for Executive Officer performance
initiatives. Based on this review, the Committee, in its sole discretion,
determines the Company's total compensation structure for the year, including
the elements and level of compensation opportunities and the variable portion of
"at risk" pay for performance and equity participation in light of industry
conditions and marketplace pay levels and practices. At year-end, results
achieved and strategic progress at the corporate, subsidiary, business unit and
individual levels are assessed by the Committee, relative to previously approved
goals, taking into consideration prevailing economic and business conditions and
opportunities, performance by comparable organizations, and stockholder value.

In establishing the Company's executive compensation structure and program,
the Committee also takes into account current market data and compensation
trends for comparable companies, evaluates corporate performance relative to a
selected peer group, and considers the overall effectiveness of the program in
measuring and rewarding desired performance levels.

The Committee has been assisted in its review and evaluation by Pearl Meyer
& Partners, Inc., executive compensation consultants retained by the Committee
to serve as outside experts in the discharge of its responsibilities. The
consultants provide data to the Committee with respect to the compensation paid
to Chief Executive Officers and other Executive Officers of comparable
organizations as well as information on

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current and evolving practices. Compensation levels for Executive Officers are
benchmarked to the outside market utilizing information drawn from a direct
survey conducted by the outside consultants and from proxy materials of the
comparator companies, including (i) the three major aluminum companies that
comprise the Standard & Poor's Aluminum Index appearing in the Common Stock
Performance Graph, (ii) two other major aluminum businesses and (iii) other
organizations of similar size in related industries regarded as the marketplace
for critical management talent at Alumax. Based on this information, the
Committee evaluates the reasonableness, fairness and competitiveness of the
Company's executive compensation program.

Total compensation for target performance is generally positioned in the
mid-range of the comparator group with salaries and variable annual incentives
which are below average and equity-based, long-term incentive opportunities
which are at average. Therefore, actual annual and long-term compensation
levels, which are based on performance relative to aggressive goals, will vary
from year to year below and above those of the comparator group.

The compensation program for the Company's Chief Executive Officer and
other Executive Officers is comprised of three major elements:

1. Base salaries: Ranges are established relative to the competitive
marketplace at the appropriate level. Placement within base salary ranges
reflects the individual performance and contribution of each Executive Officer
to the business, the level of the executive's experience and overall corporate
financial circumstances. Base salaries are generally subject to annual review
for adjustment by the Committee. Recommendations are provided by the Chief
Executive Officer after an annual performance evaluation of each executive. The
salary of the Chief Executive Officer was set pursuant to the terms of an
employment contract which was entered into at the time the Company became an
independent, public corporation in November 1993, was amended in December 1996
and is described under "Executive Employment and Separation Agreements." The
contract provides for a minimum salary that is subject to future review and
possible upward adjustment by the Committee. The Chief Executive Officer's
salary, which had not been adjusted since November 1993, was increased in
December 1995 to an annual rate of $800,000, effective January 1, 1996,
representing a total increase of 6.6 percent over three years.

2. Annual incentive: Executive Officers participate in the Annual Plan
under which annual incentive awards are generally made in cash. Each Executive
Officer is assigned performance goals based on assigned position
responsibilities and an annual incentive range. For the named Executive
Officers, 1996 targeted awards ranged from 40 percent to 60 percent of base
salary, with the latter percentage applicable only to the Chief Executive
Officer. For 1996, performance goals included corporate net income for all
Executive Officers and subsidiary or business unit earnings from operations for
those Executive Officers who also have subsidiary or business unit
responsibilities. Achievements related to individual, subsidiary and/or business
unit performance goals were included in 1996 annual incentive determinations for
Executive Officers other than the Chairman and the Executive Vice President,
whose annual incentives are based 100 percent on corporate net income
performance. Performance weightings for other Executive Officers ranged from 40
percent to 50 percent on corporate net income and 50 percent to 60 percent on
individual, subsidiary and/or business unit performance goals.

The Committee set highly aggressive performance goals for 1996 annual
incentive awards, and Executive Officers, including the CEO, received annual
incentive awards, which on average exceeded target, in recognition of Company
performance well in excess of its financial goals. The Committee believes that
public disclosure of the various performance and financial goals set under the
Annual Plan in respect of the 1996 fiscal year would adversely affect the
Company's competitive posture and, for this reason, such information has been
omitted from this report.

1996 was a good performance year for Alumax despite falling market prices
for aluminum. The Company generated record sales of approximately $3.2 billion
on record aluminum shipments of approximately 1.1 million metric tons. While
operating earnings declined, primarily due to lower aluminum prices and higher
raw material costs, net earnings for 1996 totalled $250.0 million as compared to
net earnings of $237.4 million for 1995. The 1996 and 1995 results represent the
Company's third and fourth most profitable years since its incorporation in
1973. Total stockholders' equity exceeded $1.6 billion at December 31, 1996, up
almost

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50 percent since the Company became an independent, public corporation. Alumax
also reduced its ratio of total debt to invested capital from 38 percent at
year-end 1995 to 30 percent at year-end 1996.

3. Equity participation: Grants in the form of stock options and long-term
performance-based stock awards are designed to strengthen the coincidence of
interest of Executive Officers and the Company's stockholders in the Company's
growth in real value over the long term. Stock options, which were awarded to
Executive Officers under the Long Term Plan, are exercisable, subject to
vesting, for ten years from date of grant and vest 100 percent two years from
date of grant, after which they are exercisable during the remaining eight years
of future service.

Stock option grants are generally made annually to Executive Officers,
including the Chief Executive Officer, at option prices equal to 100 percent of
fair market value at the date of grant. Stock option grants, as well as
long-term performance related stock award opportunities granted to Executive
Officers, are made by the Committee on a discretionary basis within a guideline
range that takes into account the position responsibilities of each individual
Executive Officer and competitive practice. Such grants reflect the relative
value of the individual's position, as well as the current performance,
continuing contribution and prospective impact of the Executive Officer on the
Company's future success and creation of long term stockholder value. The
Committee does not consider stock holdings, prior option grants or the
appreciation thereon when making future option award determinations.

Long-term performance-related stock ownership opportunities, which provide
executives with an immediate "at risk" equity interest in the Company, are
generally granted annually to Executive Officers, including the Chief Executive
Officer, under the Company's Long Term Plan, with such grants in the form of
performance-based restricted stock units with dividend equivalents ("PARS").
All, a portion or none of the PARS may be earned out earlier than their ten year
vesting period in shares of Common Stock upon completion of successive
three-year performance periods to the extent that predetermined objectives have
been attained. The Committee established corporate cumulative net income
objectives for the performance period ending December 31, 1998 in connection
with PARS awards made in March 1996. The Committee believes, however, that
public disclosure of such forecast results would adversely affect the Company's
competitive posture and, for this reason, such information has been omitted from
this report. Such awards may be deferred, accelerated or otherwise adjusted in
the sole discretion of the Committee based on strategic and comparative
performance assessment or other factors deemed relevant by the Committee. As an
incentive for the Executive Officers to remain in the employ of the Company,
earnout of those shares not accelerated by performance, if any, is contingent
upon completion of an additional seven years of future service. Such shares may
be delivered on an accelerated basis or forfeited as determined by the Committee
in the event of certain terminations.

Like stock option grants, PARS awards are made by the Committee within a
guideline range that takes into account the position responsibilities, current
performance and future potential of each individual Executive Officer, including
the Chief Executive Officer, and competitive practice. The Committee does not
consider stock holdings, prior option and PARS grants or the appreciation
thereon when making PARS award determinations.

Tax Considerations

As noted above, the Company's executive compensation strategy is to be
cost-effective and tax efficient. Section 162(m) of the Code limits the tax
deduction to $1 million for compensation paid to the named proxy officers unless
certain requirements are met. One of the requirements is that compensation over
$1 million must be based upon attainment of performance goals approved by
stockholders. The Annual Plan and the Long Term Plan, which were approved by
stockholders at the 1995 Annual Meeting, are designed to meet these
requirements. The Committee's policy is to preserve corporate tax deductions
attributable to the compensation of certain executives while maintaining
flexibility to approve, when appropriate, compensation arrangements which it
deems to be in the best interests of the Company and its stockholders, but which
may not always qualify for full tax deductibility.

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Basis for the Compensation of the Chief Executive Officer

The Chief Executive Officer participates in the Company's executive
compensation program discussed above on substantially the same basis as other
participants. It should be noted that all the Executive Officers of the Company,
including the Chief Executive Officer, participate in the same program for base
salary, annual incentive and stock option grants as middle and lower-level
management, professional and salaried employees of the Company and its
subsidiaries.

Approximately 66 percent of the Chief Executive Officer's total
compensation at target performance is based on corporate financial performance
as measured by annual and long-term net income and on total return to
stockholders as measured by stock price appreciation.

The Chief Executive Officer was employed by Alumax's predecessor, Amax. He
became employed by Alumax at the time it became an independent, public
corporation under an employment agreement entered into in November 1993 and
amended in December 1996, the terms of which are described separately under
"Executive Employment and Separation Agreements." As noted earlier, the Chief
Executive Officer's salary from Alumax is determined under his employment
contract. That contract permitted him also to serve as Vice Chairman of the
Board of Cyprus Amax Minerals Company until November 1996 and took into account
the compensation received from Cyprus Amax Minerals Company until such date.

Under the Chief Executive Officer's leadership in 1996, Alumax met or
exceeded its objectives and took further steps to position the Company as a
major factor in the aluminum industry. During 1996, significant progress was
made in implementing the Company's strategic plan to strengthen its balance
sheet, enhance stockholder value and position the Company for future growth. In
addition to the acquisition of Cressona Aluminum Company in January 1996, asset
dispositions totalled $495.9 million for the year and generated after-tax gains
of $140.4 million. These transactions, coupled with the acquisition of Cressona,
have served to reduce the Company's exposure to the domestic building and
construction market and increase its presence in the higher growth
transportation and distribution sectors.

As previously indicated, the Chief Executive Officer's salary, which had
not been adjusted since 1993, was increased in December 1995 to an annual rate
of $800,000, effective January 1, 1996. With respect to 1996, he received an
annual incentive award of $797,100 in recognition of the Company's strong
performance. PARS were granted at guideline levels. In addition, the Chief
Executive Officer received a special "Additional Option" grant in consideration
of his agreement to extend his employment to December 31, 1999. The Additional
Option grant of 687,800 shares has a six-year term, vests at the rate of
one-third per annum and is exercisable as to one-third at $32.125 per share (the
closing price of the Common Stock on the New York Stock Exchange at the date of
grant), one-third at a premium of $4.00 per share and one-third at a premium of
$8.00 per share over the closing price at date of grant.

As the Company moves forward in its efforts to create stockholder value in
the years ahead, the Committee will continue to review, monitor and evaluate the
Company's program for executive compensation to assure that it is internally
effective in support of the Company's strategy, is competitive in the
marketplace to attract, retain and motivate the talent needed to succeed, and
appropriately rewards performance on behalf of the Company's stockholders.

Members of the Human Resources and Compensation Committee:

Paul W. MacAvoy, Chairman
J. Dennis Bonney
Harold Brown
Pierre Des Marais II
Anne Wexler

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Alumax Inc · DEF 14A · For 5/29/97

Filed On 4/4/97 · SEC File 1-12374 · Accession Number 950144-97-3762

Definitive Proxy Solicitation Material · Schedule 14AFiling Table of Contents

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