-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EmHnUv5FYNZ3wcLWUqYwrEIFtsp/R7HItUVDVAkun+tUJM1hsCaQibReLJCPVLj8 uZEorSse2oY30Pi5QGXgKw== 0000007649-97-000010.txt : 19970630 0000007649-97-000010.hdr.sgml : 19970630 ACCESSION NUMBER: 0000007649-97-000010 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASARCO INC CENTRAL INDEX KEY: 0000007649 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 134924440 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-00164 FILM NUMBER: 97631248 BUSINESS ADDRESS: STREET 1: 180 MAIDEN LN CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 2125102000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN SMELTING & REFINING CO DATE OF NAME CHANGE: 19760607 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 1996 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 Commission file number 1-164 ASARCO Incorporated (Exact name of registrant as specified in its charter) New Jersey 13-4924440 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 Maiden Lane, New York, N. Y. 10038 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 510-2000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange on Title of each class which registered Common Stock, without par value New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of February 28, 1997, there were of record 42,894,878 shares of Common Stock, without par value, outstanding, and the aggregate market value of the shares of Common Stock (based upon the closing price of Asarco Common Stock on the New York Stock Exchange - Composite Transactions) of ASARCO Incorporated held by nonaffiliates was approximately $1.3 billion. PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE: Part III: Proxy statement in connection with the Annual Meeting to be held on April 30, 1997. Part IV: Exhibit index is on pages C1 through C4. ASARCO Incorporated FORM 10-K/A December 31, 1996 INDEX
Page Number FORM 10-K/A i ITEM 14 ii EXHIBIT INDEX C1-C4 FORM 11-K C22-C34
ASARCO Incorporated and Subsidiaries FORM 10-K/A December 31, 1996 The undersigned registrant hereby amends the 1996 Annual Report on Form 10-K as set forth in the pages attached hereto to add the information, financial statements and exhibits required by Form 11-K filed with respect to the Savings Plan of ASARCO Incorporated and Participating Subsidiaries pursuant to Rule 15d-21. The following item has been refiled to reflect such amendments: Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K. As the Exhibits are considered a "discrete filing item", the Exhibits and Exhibit Index as amended have been refiled. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. ASARCO Incorporated By /s/ K. R. Morano K. R. Morano Vice President and Chief Financial Officer Date: June 27, 1997 i PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K ii ASARCO Incorporated EXHIBIT INDEX
Exhibit Indexed No. Description on Page 3. Certificate of Incorporation and By-Laws (a) Certificate of Incorporation - restated, filed May 4, 1970 (Filed as an Exhibit to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference) (b) Certificate of Amendment to the Certificate of Incorporation effective April 23, 1975 (Filed as an Exhibit to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference) (c) Certificate of Amendment of Certificate of Incorporation executed April 14, 1981 (Filed as an Exhibit to the Post-Effective Amendment No. 8 to Registration Statement No. 2-47616, filed April 30, 1981 and incorporated herein by reference) (d) Certificate of Amendment of Restated Certificate of Incorporation filed on May 6, 1985 (Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1985 and incorporated herein by reference) (e) Certificate of Amendment of Certificate of Incorporation filed July 21, 1986 (Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1986 and incorporated herein by reference) (f) Certificate of Amendment of Restated Certificate of Incorporation, as amended filed April 22, 1987 (Filed as an Exhibit to the Company's 1987 Annual Report on Form 10-K and incorporated herein by reference) (g) Statement of Cancellation filed July 31, 1987 whereby 155,000 shares of Series A Cumulative Preferred Stock and 862,500 shares of $9.00 Convertible Exchangeable Preferred Stock were cancelled (Filed as an Exhibit to the Company's 1987 Annual Report on Form 10-K and incorporated herein by reference) (h) Statement of Cancellation filed November 20, 1987 whereby 1,026,900 shares of Series A Cumulative Preferred Stock were cancelled (Filed as an Exhibit to the Company's 1987 Annual Report on Form 10-K and incorporated herein by reference) (i) Statement of Cancellation filed December 18, 1987 whereby 1,250,000 shares of Series B Cumulative Convertible Preferred Stock were cancelled (Filed as an Exhibit to the Company's 1987 Annual Report on Form 10-K and incorporated herein by reference)
C1 ASARCO Incorporated EXHIBIT INDEX
Exhibit Indexed No. Description on Page (j) Statement of Cancellation filed March 3, 1988 whereby 27,000 shares of Series A Cumulative Preferred Stock were cancelled (Filed as an Exhibit to the Company's 1987 Annual Report on Form 10-K and incorporated herein by reference) (k) Certificate of Amendment of Restated Certificate of Incorporation, as amended, filed August 7, 1989 (Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1989 and incorporated herein by reference) (l) By-Laws as last amended on June 26, 1991 (Filed as an Exhibit to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference) 4. Instruments defining the rights of security holders, including indentures (a) There are currently various separate indentures, agreements or similar instruments under which long-term debt of Asarco is currently outstanding. The Registrant hereby agrees to furnish to the Commission, upon request, a copy of any of the instruments which define the rights of holders of long-term debt securities. None of the outstanding instruments represent long-term debt securities in excess of 10% of the total assets of Asarco as of December 31, 1996 (b) Form of Rights Agreement dated as of July 26, 1989, between the Company and First Chicago Trust Company of New York, as Rights Agent, defining the rights of shareholders under a July 1989 Shareholders' Rights plan and dividend declaration (Filed as an Exhibit to the Company's report on Form 8-K filed on July 28, 1989 and incorporated herein by reference) (c) Rights Agreement Amendment dated as of September 24, 1992, between the Company and The Bank of New York, as Successor Rights Agent under the Rights Agreement listed above (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference) (d) Second Rights Agreement Amendment dated as of February 23, 1995, between the Company and The Bank of New York (Filed as an Exhibit to the Company's report on Form 8-K filed on February 24, 1995, and incorporated herein by reference) (e) Indenture Agreement dated as of February 1, 1993 between the Company and Bankers Trust Company, as Trustee, covering the issuance of debt securities registered by the Company in April 1992, not to exceed $250 million (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference)
C2 ASARCO Incorporated EXHIBIT INDEX
Exhibit Indexed No. Description on Page (f) Indenture Agreement dated as of October 1, 1994 between the Company and Chemical Bank, as Trustee covering the issuance of debt securities registered by the Company in October 1994, not to exceed $300 million (Filed as an Exhibit to the Company's registration statement on Form S-3 filed on October 12, 1994, and incorporated herein by reference) 10. Material Contracts (a) Stock Option Plan as last amended on November 30, 1994 (Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K and incorporated herein by reference) (b) Form of Amended Employment Agreement dated February 26, 1997, between the Company and currently 12 of its executive officers, including Messrs. R. de J. Osborne, F.R. McAllister, K.R. Morano, R.M. Novotny and R.J. Muth C11-C20 (c) Deferred Fee Plan for Directors, as amended through January 26, 1994 (Filed as an Exhibit to the Company's 1993 Annual Report on Form 10-K and incorporated herein by reference) (d) Supplemental Pension Plan for Designated Mid-Career Officers, as amended through January 25, 1995 (Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K and incorporated herein by reference) (e) Retirement Plan for Non-Employee Directors, as amended through January 25, 1995. Effective December 31, 1995, the Company terminated the plan for current and future directors. (Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K and incorporated herein by reference) (f) Directors' Stock Award Plan, as amended through January 27, 1993 (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference) (g) Stock Incentive Plan adopted by the Company's Shareholders on April 25, 1990, as last amended on November 29, 1995 (Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K and incorporated herein by reference) (h) Director's Deferred Payment Plan, effective October 25, 1995 (Filed as an Exhibit to the Company's 1995 Annual Report on Form 10-K and incorporated herein by reference) (i) Incentive Compensation Plan for Senior Officers, effective January 1, 1996 (Filed as an Exhibit B to the Company's 1996 Proxy Statement filed on March 12, 1996 and incorporated herein by reference)
C3 ASARCO Incorporated EXHIBIT INDEX
Exhibit Indexed No. Description on Page (j) 1996 Stock Incentive Plan, effective April 24, 1996 (Filed as an Exhibit to the Company's Registration Statement on Form S-8 filed on December 17, 1996, and incorporated herein by reference) (k) Compensation Deferral Plan, effective December 1, 1996 (Filed as an Exhibit to the Company's Registration Statement on Form S-8 filed on November 26, 1996, and incorporated herein by reference) 11. Statement re Computation of Earnings Per Share C5 12. Statement re Computation of Ratios C6 21. Subsidiaries of the Registrant C7-C9 23. Consent of Independent Accountants is included on page A68 of this Annual Report on Form 10-K. 99. Report on Form 11-K relating to the Savings Plan for Salaried Employees of ASARCO Incorporated and Participating Subsidiaries. C22-C34
Copies of exhibits may be acquired upon written request to the Treasurer and the payment of processing and mailing costs. C4 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 11-K ------------------ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------ Commission File No. 1-164 ------------------ For the fiscal year ended December 31, 1996 Savings Plan of ASARCO Incorporated and Participating Subsidiaries ASARCO Incorporated 180 Maiden Lane New York, New York 10038 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Financial Statements and Schedules December 31, 1996 and 1995 Savings Plan of ASARCO Incorporated and Participating Subsidiaries INDEX
Page Number Report of Independent Accountants C22 Statement of Net Assets Available for Benefits, with Fund Information at December 31, 1996 C23 Statement of Net Assets Available for Benefits, with Fund Information at December 31, 1995 C24 Statement of Changes in Net Assets Available for Benefits, with Fund Information for the year ended December 31, 1996 C25 Notes to Financial Statements C26-C31 Supplemental Schedules: Form 5500 Item 27a*-Schedule of Assets Held for Investment Purposes at December 31, 1996 C32 Form 5500 Line 27d*-Schedule of Reportable Transactions for the year ended December 31, 1996 C33 Consent of Independent Accountants C34
* Refers to item number in Form 5500 ("Annual Return/Report of Employee Benefit Plan") filed with the Department of Labor for the plan year ended December 31, 1996. C21 REPORT OF INDEPENDENT ACCOUNTANTS ------------- To the Savings Plan Committee of ASARCO Incorporated and Participating Subsidiaries: We have audited the accompanying statements of net assets available for benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the "Plan") as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. These financial statements are the responsibility of the Plan administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995 and the changes in net assets available for benefits for the year ended December 31, 1996 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules, as listed in the index on page C21, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the accompanying statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the statements of net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. New York, New York June 16, 1997 C22 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Benefits, with Fund Information at December 31, 1996 (dollars in thousands)
Non- Participant Participant Directed Directed ------------------------------------------------------------------------------------------------ ------ Vanguard Vanguard Vanguard Money Short Vanguard Index Asarco Market Term U.S. Index Asarco Trust Common Reserves Treasury Vanguard Extended Vanguard Vanguard Total Common 500 Stock Prime Bond Wellington Market U.S.Growth Windsor II Bond Loan Stock Portfolio Fund Portfolio Portfolio Fund Fund Fund Fund Market Fund Fund Total ------ ---- -------- -------- ------ ---- ---- ----- ---- ---- ----- ----- ASSETS: Investments, at fair value: ASARCO Common Stock (cost $23,547) $3,513 $18,506 $22,019 Shares of registered investment companies: Vanguard Money Market Reserves Prime Portfolio (cost approximates market) 17 $18,728 90 18,835 Vanguard Index Trust 500 Portfolio (cost $19,143) $29,014 29,014 Vanguard Short Term U.S. Treasury Bond Portfolio (cost $7,819) $7,812 7,812 Vanguard Wellington Fund (cost $8,337) $9,855 9,855 Vanguard Index Extended Market Fund (cost $2,568) $3,077 3,077 Vanguard U.S. Growth Fund (cost $3,187) $3,964 3,964 Vanguard Windsor II Fund (cost $7,588) $9,329 9,329 Total Bond Market (cost $712) $716 716 Loans to Participants $4,374 4,374 ------- ------ ------ ------ ------ ------ ------ ------ ----- ------ ------- ------- Total 29,014 3,530 18,728 7,812 9,855 3,077 3,964 9,329 716 4,374 18,596 108,995 Investments Contributions Receivable: Participants 164 21 71 46 89 34 43 90 4 562 Company 197 197 Interest 29 29 Receivable Loans Recievable 53 7 25 16 21 8 8 25 1 (164) ------- ------ ------- ------ ------ ------ ------ ------ ----- ------ ------ -------- TOTAL 29,231 3,558 18,824 7,874 9,965 3,119 4,015 9,444 721 4,239 18,793 109,783 ------- ------ ------- ------ ------ ------ ------ ------ ----- ------- ------- -------- ASSETS NET ASSETS AVAILABLE FOR PLAN BENEFITS $29,231 $3,558 $18,824 $7,874 $9,965 $3,119 $4,015 $9,444 $721 $4,239 $18,793 $109,783 ======= ====== ======= ====== ====== ====== ====== ====== ==== ====== ======= ========
The accompanying notes are an integral part of these financial statements. C23 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Benefits, with Fund Information at December 31, 1995 (dollars in thousands)
Non- Participant Participant Directed Directed ------------------------------------------------------------------------------------------------ ------ Vanguard Vanguard Vanguard Money Short Vanguard Index Asarco Market Term U.S. Index Asarco Trust Common Reserves Treasury Vanguard Extended Vanguard Vanguard Total Common 500 Stock Prime Bond Wellington Market U.S.Growth Windsor II Bond Loan Stock Portfolio Fund Portfolio Portfolio Fund Fund Fund Fund Market Fund Fund Total ------ ---- -------- -------- ------ ---- ---- ----- ---- ---- ----- ----- ASSETS: Investments, at fair value: ASARCO Common Stock (cost $19,784) $2,494 $21,838 $24,332 Shares of registered investment companies: Vanguard Money Market Reserves Prime Portfolio (cost approximates market) 15 $19,078 129 19,222 Vanguard Index Trust 500 Portfolio (cost $17,258) $23,328 23,328 Vanguard Short Term U.S. Treasury Bond Portfolio (cost $8,845) $8,958 8,958 Vanguard Wellington Fund (cost $7,086) $8,333 8,333 Vanguard Index Extended Market Fund (cost $1,736) $2,093 2,093 Vanguard U.S. Growth Fund (cost $1,897) $2,358 2,358 Vanguard Windsor II Fund (cost $5,749) $6,697 6,697 Total Bond Market (cost $370) $382 382 Loans to Participants $4,303 4,303 ------- ----- ------ ----- ----- ----- ------ ----- ---- ------ ------- ------- Total 23,328 2,509 19,078 8,958 8,333 2,093 2,358 6,697 382 4,303 21,967 100,006 Investments Contributions Receivable: Participants 145 21 87 58 83 32 29 74 2 531 Company 187 187 Interest 26 26 Receivable Loans Receivable 48 6 28 18 20 6 9 21 (157) 1 ------- ------ ------- ------ ------ ----- ----- ------ ------ ------ ------- ------- TOTAL 23,521 2,536 19,193 9,034 8,436 2,131 2,396 6,792 384 4,172 22,155 100,750 ------- ------ ------- ------ ------ ----- ----- ------ ------ ------ ------- ------- ASSETS NET ASSETS AVAILABLE FOR PLAN BENEFITS $23,521 $2,536 $19,193 $9,034 $8,436 $2,131 $2,396 $6,792 $384 $4,172 $22,155 $100,750 ======= ====== ======= ====== ====== ====== ====== ====== ======= ====== ======= ========
The accompanying notes are an integral part of these financial statements. C24 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Changes in Net Assets Available for Benefits, with Fund Information for the year ended December 31, 1996 (dollars in thousands)
Vanguard Vanguard Vanguard Money Short Vanguard Index Asarco Market Term U.S. Index Trust Common Reserves Treasury Vanguard Extended Vanguard Vanguard Total 500 Stock Prime Bond Wellington Market U.S.Growth Windsor II Bond Loan Portfolio Fund Portfolio Portfolio Fund Fund Fund Fund Market Fund Total ------ ---- -------- -------- ------ ---- ---- ----- ---- ---- ----- Investment Income Net Appreciation (Depreciation) in the Fair Value of Investments $4,755 $(5,685) $(134) $605 $186 $434 $1,071 $(7) $1,225 Dividends 631 660 $938 470 782 221 288 657 37 4,684 Interest $328 328 ----- ------- --- --- ----- --- --- ----- --- ---- ----- Total 5,386 (5,025) 938 336 1,387 407 722 1,728 30 328 6,237 Contributions Participants 2,015 265 939 612 1,104 430 445 1,060 46 6,916 Company 2,407 2,407 Loan Repayments 686 103 341 270 313 95 111 323 5 (2,247) Transfer from other plan 271 135 119 33 156 23 61 93 3 44 938 Interfund transfers (750) 1,434 (216) (1,281) (362) 183 551 180 261 ------- ----- ----- ------- ----- ---- ---- ---- --- ----- ---- TOTAL ADDITIONS 7,608 (681) 2,121 (30) 2,598 1,138 1,890 3,384 345 (1,875) 16,498 DEDUCTIONS Withdrawals 1,282 1,543 2,142 856 766 66 181 500 2 117 7,455 Loans 617 116 344 273 301 79 90 232 7 (2,059) General and Administrative (1) 4 1 2 5 (1) 10 ------ ------ ----- ------ ----- ------ --- ---- ---- ------ ------ TOTAL DEDUCTIONS 1,898 1,659 2,490 1,130 1,069 150 271 732 8 (1,942) 7,465 ------ ------ ------ ----- ----- ---- ---- ---- ---- ------- ------ Net Increase (Decrease) 5,710 (2,340) (369) (1,160) 1,529 988 1,619 2,652 337 67 9,033 NET ASSETS AVAILABLE FOR PLAN BENEFITS, BEGINNING OF YEAR 23,521 24,691 19,193 9,034 8,436 2,131 2,396 6,792 384 4,172 100,750 ------ ------ ------- ----- ----- ----- ----- ----- ----- ----- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, END OF YEAR $29,231 $22,351 $18,824 $7,874 $9,965 $3,119 $4,015 $9,444 $721 $4,239 $109,783 ======= ======= ======= ====== ====== ====== ====== ====== ====== ====== ========
The accompanying notes are an integral part of these financial statements. C25 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements 1. Plan Description The following description of the Savings Plan of Asarco Incorporated and Participating Subsidiaries (the "Plan") provides only general information. Reference should be made to the Plan document for a complete description of the Plan and Plan amendments, including eligibility requirements and vesting provisions. General: Effective January 1, 1980, ASARCO Incorporated (the "Company") established the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the "Plan"), which has been amended thereafter. Contributions commenced in July 1980. The Plan is a defined contribution plan and is administered by the Savings Plan Committee in accordance with authority delegated by the Fiduciary Committee. The Plan is designed to provide a method of savings by eligible employees for their retirement and other needs, and to enable them to acquire an ownership interest in the Company. Contributions: Employees are eligible for participation in the Plan after completing six months of service. Each eligible employee wishing to participate in the Plan must elect to authorize pre-tax and/or post-tax contributions by payroll deduction. Contributions are stated in whole percentages of 1% to 12% of the participant's basic earnings, as defined. A participant may elect to increase, decrease or suspend the pre-tax or post-tax contributions on the first day of any calendar quarter. The Internal Revenue Code of 1986 (the "Code"), as amended, limited the maximum amount an employee may contribute on a pre-tax basis to $9,500 in 1996 and $9,240 in 1995. Matching Company Contribution - The Company matches the first 6% of a participant's monthly contribution at the rate of 50%. The matching contribution may be made in either cash or ASARCO Common Stock and in the case of cash, the Plan's trustee, Vanguard Fiduciary Trust Company ("Vanguard"), is required to purchase ASARCO Common Stock. Company contributions for the year ended December 31, 1996 consisted of the following:
Cash $ 162 Asarco Common Stock 2,407,309 ---------- $2,407,471
The Company is not obligated to make a contribution during any period in which it has no accumulated retained earnings. The Company's contributions are subject to all legal restrictions which may apply, including Sections 401 and 415 of the Code, which limit the annual contributions to an employee's account. Participants are 100% vested in both their contributions and the Company's matching contribution upon participation in the Plan. C26 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Loans: The Plan provides for loans to participants who have participated in the Plan for at least one year, subject to certain limitations. The maximum loan allowed to each participant is limited to the lesser of 50% of the total value of the participant's accounts, or $50,000 reduced by the outstanding balance of any plan loans to such participant. A participant's loan is repayable within five years or immediately upon termination of employment. Interest is currently accrued at the prime rate. Loans are secured by a lien on the participant's interest in the Plan. Loan repayments are made through payroll withholdings from the participant's earnings. A participant may pre-pay a loan at any time without penalty. 2. Significant Plan Amendments On June 30, 1995, the Plan was amended effective July 1, 1995 to permit employees to increase, decrease or suspend pre-tax or post-tax contributions as of the first day of any calendar quarter; to include a change in the definition of Basic Earnings to recognize pre-tax contributions made to the Company's Ben-A-Flex program; and to change the definition of Eligible Employee to exclude employees receiving benefits under the Company's Long-Term Disability Plan. 3. Summary of Significant Accounting Policies Valuation of Investments: Shares of registered investment companies and the Asarco Common Stock Fund are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Basis of Accounting: The financial statements of the Plan are prepared under the accrual method of accounting. Investment Transactions and Investment Income: Transactions are accounted for on a trade-date basis. Average cost is the basis used in the determination of gains or losses on sales of securities. Dividend income is recorded at the ex-dividend date. Income from other investments is recorded as earned. Net (depreciation) appreciation in the fair value of the Plan's investments, as shown in the statement of changes in net assets, consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. C27 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Contributions: The Company's matching contributions are measured by reference to the participant contributions and are not discretionary. Loans to Participants: Loans to participants are presented in the Statement of Net Assets Available for Plan Benefits as Plan assets. Withdrawals: Withdrawals are recorded when paid. Plan Expenses: The Company pays all administrative expenses of the Plan including trust, recordkeeping, consulting, audit and legal fees, with the exception of loan administration fees which are charged to participants. Taxes, excluding transfer taxes on shares of Asarco Common Stock distributed to participants or their beneficiaries, and investment fees related to Vanguard Funds are paid from the net assets of such funds. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 4. Investment Funds Vanguard is the investment manager and participant recordkeeper for all investment funds of the Plan. Vanguard is also the trustee of all of the funds. Upon enrollment in the Plan throughout 1996, participants directed their elected contributions to be invested in one or more of the following funds in multiples of 5%: o Vanguard Index Trust 500 Portfolio - A fund invested in all of the stocks included in the Standard & Poor's 500 Composite Index (the "Index") in approximately the same proportions as they are represented in the Index. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 1,382 and 1,272 respectively. o Vanguard Money Market Reserves Prime Portfolio - A fund invested in a portfolio of high quality money market instruments with maturities of one year or less. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 1,137 and 1,222, respectively. C28 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued o Vanguard Short Term U.S. Treasury Bond Portfolio - A fund invested primarily in short-term U.S. Treasury securities with an average maturity of two to three years. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 615 and 680, respectively. o Vanguard Wellington Fund - A fund invested in bonds and common stocks. The bonds are held for relative stability of income and principal, while the common stocks are held for potential growth of capital and income. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 882 and 827, respectively. o Vanguard Index Extended Market Fund - A fund which provides investment results that correspond to the aggregate price and yield performance of the Wilshire 4500 Index. The Wilshire 4500 Index consists of over 4,500 U.S. common stocks (primarily medium and small capitalization stocks) that are not included in the Standard & Poor's 500 Composite Stock Price Index. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 451 and 403, respectively. o Vanguard U.S. Growth Fund - A fund invested primarily in a diversified portfolio of common stocks with above-average growth potential. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 481 and 362, respectively. o Vanguard Windsor II Fund - A fund invested in common stocks to provide capital appreciation and dividend income. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 946 and 800, respectively. o Asarco Common Stock Fund - A fund that invests exclusively in ASARCO Incorporated common stock with a small amount invested in the Vanguard Money Market Reserves Prime Portfolio to allow for timely responsiveness to Plan transactions. At December 31, 1996 and 1995, the number of Plan participants who held an interest in this fund was 2,091 and 2,001, respectively. o Total Bond Market - A fund that holds a combination of securities which, taken together, are expected to perform similarly to the Total Bond Market Portfolio of the Lehman Brothers Aggregate Bond Index. At December 31, 1996, 74 Plan participants held an interest in this fund. The Plan also maintains the following fund: o Loan Fund - A fund designed to facilitate the recordkeeping and other administrative functions relating to loans made to participants based on their account balances (See Note 1). These loans are recorded as receivables of the Plan. C29 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Risks and Uncertainties: The Plan provides for investment options in various mutual funds. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participant's account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in the assets available for plan benefits. Participants are advised to read a Vanguard prospectus or the Plan's summary plan description before investing in any fund. Vanguard as recordkeeper maintains individual account records reflecting each participant's net interest in each fund of the Plan in which such participant invests. Participant's net interest in each fund of the Plan is represented by units of participation. The following schedule shows the number of units and the net asset value per unit or per share in each fund:
December 31, 1996 December 31, 1995 ----------------- ----------------- Net Asset Net Asset Number of Value Number of Value Units Per Unit Units Per Unit Asarco Common Stock Fund* 2,381,684 $9.29 2,048,210 $11.95 Vanguard Index Trust 500 Portfolio* 419,520 $69.16 405,004 $57.60 Vanguard Money Market Reserves Prime Portfolio* 18,727,988 $1.00 19,078,354 $1.00 Vanguard Short Term U.S. Treasury Bond Portfolio* 768,103 $10.17 868,060 $10.32 Vanguard Wellington Fund* 376,883 $26.14 341,107 $24.43 Vanguard Windsor II Fund* 391,461 $23.83 324,145 $20.66 Vanguard U.S. Growth Fund 166,956 $23.74 115,866 $20.35 Vanguard Index Extended Market Fund 117,469 $26.19 86,948 $24.07 Total Bond Market 72,760 $9.84 37,632 $10.15
*Represents 5% or more of net assets available for plan benefits. C30 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 5. Net Appreciation (Depreciation) in Fair Value of Plan Investments The net appreciation (depreciation) of the fair value of the Plan's investments is summarized as follows:
December 31, 1996 December 31, 1995 ----------------- ----------------- Vanguard Index Trust 500 Portfolio $4,755,328 $5,703,219 ASARCO Common Stock Fund (5,684,656) 2,850,974 Vanguard Short Term U.S. Treasury Bond Portfolio (133,890) 460,436 Vanguard Wellington Fund 605,107 1,579,545 Vanguard Windsor II Fund 1,071,258 1,318,851 Vanguard U.S. Growth Fund 433,725 502,178 Vanguard Index Extended Market Fund 185,663 417,047 Total Bond Market (6,978) 10,907 ----------- ----------- Total $1,225,557 $12,843,157 ========== ===========
6. Tax Status The Plan, as amended through July 27, 1994, has received a favorable determination from the Internal Revenue Service ("IRS") that it is a qualified plan and trust under Section 401(a) of the Code and, thus, exempt from federal income taxes under provisions of Section 501(a) of the Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. 7. Termination Priorities Although it has not expressed any intent to do so, the Company reserves the right to amend or discontinue the Plan by action of the Board at any time. In the event of termination or partial termination of the Plan or a complete discontinuance of matching Company contributions under the Plan, each affected participant shall be 100% vested in all amounts credited to their account at the date of such termination, partial termination, or complete discontinuance of matching Company contributions. C31 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Form 5500 Item 27a Schedule of Assets Held for Investment Purposes at December 31, 1996
Cost or Market Identity of Issue or Borrower Book Value Value Vanguard Index Trust 500 Portfolio $19,142,523 $29,014,032 Asarco Common Stock Fund 23,547,160 22,125,848 Vanguard Short Term U.S. Treasury Bond Portfolio 7,819,278 7,811,607 Vanguard Money Market Reserves Prime Portfolio 18,727,988 18,727,988 Vanguard Wellington Fund 8,336,848 9,855,486 Vanguard Index Extended Market Fund 2,568,105 3,076,515 Vanguard U.S. Growth Fund 3,187,238 3,963,530 Vanguard Windsor II Fund 7,587,552 9,328,509 Total Bond Market 712,173 715,960 Loan Fund Participants' Loans (interest rates range from 8.25% to 8.5%) 4,374,019 4,374,019 ----------- ---------- TOTAL INVESTMENTS $96,002,884 $108,993,494 =========== ============
C32 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Form 5500 Line 27d Schedule of Reportable Transactions for the year ended December 31, 1996
Number of Number of Purchase Selling Basis of Net Gain Description of Asset Purchases Sales Price Price Asset or (Loss) -------------------- --------- ----- ----- ----- ----- --------- Asarco Common Stock Fund 142 172 $7,521,338 $4,186,945 $3,902,180 $284,765 Vanguard Index Trust 500 Portfolio 122 177 5,061,036 4,130,592 3,176,995 953,597 Vanguard Money Market Reserves Prime Portfolio 188 205 6,942,695 7,293,062 7,293,062 - Vanguard Short Term U.S. Treasury Bond Portfolio 135 164 2,358,827 3,371,717 3,384,749 (13,032) Vanguard Wellington Fund 81 157 3,249,729 2,332,611 1,998,510 334,101 Vanguard Windsor II 110 150 3,439,504 1,879,104 1,600,870 278,234
C33 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements of ASARCO Incorporated on Form S-3 (File Nos. 33-45631, 33-55993 and 333-02359) and on Form S-8 (File Nos. 2-67732, 2-83782 and 33-34606, 333-16875 and 333-18083) of our report dated June 16, 1997 on our audits of the Statements of Net Assets Available for Benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries as of December 31, 1996 and 1995, the Supplemental Schedules as of December 31, 1996 and for the year then ended and the Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 1996, which report is included in this Annual Report on Form 11-K. We also consent to the incorporation by reference of such report in the 1996 Annual Report on Form 10-K of ASARCO Incorporated. COOPERS & LYBRAND L.L.P. New York, New York June 16, 1997 C34 -----END PRIVACY-ENHANCED MESSAGE-----